Case Description

The Court will determine if the land acquired by a government agency can lapse when it fails to deposit compensation to the relevant land owner's account or court. Additionally, the Court will decide if a Bench can invalidate a judgment of a prior Bench of the same strength.


On 15th March, 2019 the Supreme Court formed a Constitution Bench for examining the correctness of two 3 judge Bench decisions dealing with the cancellation of land acquired owing to compensation disputes.


The controversy arose last year on 8th February, 2018, when a 3 judge Bench by a 2:1 majority in Indore Development Authority v. Shailendra (Dead) set aside a 2014 decision in Pune Municipal Corporation v. Harakchand Misirmal Solanki (2014) by another 3 judge bench.


In Pune Municipal Corporation, the court had decided that land acquisition will be declared void under section 24(2) of the Land Acquisition Act of 2013, if compensation has not been deposited in the bank accounts of the land owners or with the court. It was categorically clarified that money in the government treasury will not be treated as a payment to a landowner.


But by a 2:1 judgment in Indore Development Authority, the Court held that land acquired could not be quashed due to a land-owner's refusal to accept compensation within 5 years. It went on to say that once compensation for land acquired by the government agency has been tendered, but the person refuses to accept it, then it would amount to a discharge of obligation under Section 31(1) of the Land Acqusition Act, 1894. The apparent conflict in the later judgment is the Court holding that the person refusing compensation would not be allowed to raise the claim that the acquisition has lapsed since the money has not been deposited in court or paid to him. In addition,  the majority judges - Arun Mishra and AK Goel in Indore Development Authority held the previous 2014 Pune Corporation to be ‘per incuriam’, while Mr. Shantanagoudar dissented.


The new judgment created chaos as it meant reopening the various High Court decisions that were settled under the principle evolved in Pune Municipal Corporation.


Following Indore Development Authority, when a similar land acquisition matter came up before a 3 judge Bench on 21st February, 2018 in Haryana v. GD Goenka Tourism Corporation, Jutices Madan Lokur and Kurian Joseph raised judicial impropriety concerns. They also sat on the Pune Municipal Corporation Bench.


Following the eruption of the controversy, the then CJI Dipak Misra on February 26th, 2018 formed a Constitution Bench to decide if the 2018 Bench could have invalidated the earlier decision of the 2014 Bench. The matter was not taken up during the remaining of his  tenure and was only subsequently listed by the next Chief Justice, Ranjan Gogoi.


1) Can a past decision of the Supreme Court be overruled by a subsequent Bench of same strength on a question of law? Or does the subsequent Bench need to refer it to the Chief Justice for formation of a larger Bench?

2) Whether the land acquired by government agency  lapse on non-deposition of compensation to land owner's account or the court under the 2013 Land Acquisition Act?