Sankalp Udgata & Hetal Doshi

The fallacies of statutory interpretation in the Land Acquisition judgment

All land belongs to the people until someone encircles a piece of land and calls it his. This is Rousseau’s theory, which forms the basis of property law, and finds greatest relevance in context of the Supreme Court’s five-judge Constitution bench judgment on Section 24(2) of Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2013 (“Act”). The judgment delivered, in the wake of several controversies, in the case of Indore Development Authority v. Manoharlal & Ors. (2020) was nothing but the might of the State against the poor and weak landowners.

The question arose from the conflicting opinions of the Supreme Court over the interpretation of Section 24(2) in the 2014 Pune Municipal Corporation case and 2017 IDA case. Despite several objections to the presence of Justice Mishra on the Constitution bench, sitting in judgment of his own ruling, the earth shattering judgment was delivered endorsing a bizarre interpretation.

Section 24 is a transitory provision, which talks about the status of the proceedings pending under the Land Acquisition Act, 1894 (“old Act”). Sub-section (1) one calls for proceedings under the old Act where no award has been made to lapse. According to Section 24(2) where an award has been passed before January 1, 2009, the proceedings under the old Act will lapse and fresh ones may be initiated under the new Act only if:

1. possession of land has not been taken, or
2. compensation has not been paid.

The controversy in the two judgments revolved around the interpretation of the words ‘or’ and ‘paid’. The five-judges held that ‘or’ must be interpreted as ‘and/nor’ and mere deposit into the Government treasury shall suffice payment of compensation. Though the judgment attempts to reason its findings, the reasons appear to defeat the existing understanding of rules of interpretation of statutes for the many reasons mentioned below.

1. The Adulterated Gold

The Golden Rule of Interpretation suggests that the words of a statute must be given their literal and ordinary meaning unless it causes absurdity. Thus, when the words of the statute are clear, plain and unambiguous, then the courts are bound to give effect to that meaning, irrespective of the consequences. The word ‘or’ occurring in the provision would essentially mean that proceedings under the old Act shall lapse when either of the two conditions are fulfilled. Similarly, one can safely understand payment to mean transfer of a sum to the person entitled to it.

Although such an interpretation can be avoided, it can only be done in cases where the literal interpretation yields absurd and illogical results that tend to defeat the object and purpose of the legislation. In such cases, the Court may adopt a purposive interpretation that compliments the intention of the legislature.

However, the Court’s opinion that such an interpretation is not in consonance with the intention of the legislature is incorrect as the legislature had made its intention evidently lucid when it struck down the RFCTLARR (Amendment) Bill 2015 that sought to accomplish the exact same outcome. Upon coming to power, the BJP-led government enacted an Ordinance and before its expiry, introduced the bill which inter alia sought to add a proviso to Section 24(2) that would save proceedings under the old Act where possession was not taken from lapsing and provided for deposits into treasury accounts to count as payment. Thanks to India’s bicameralism, although the bill was passed by the Lok Sabha, it failed to receive the assent of Rajya Sabha. In a way therefore, the object so accomplished was not that of the legislature but merely that of the Lower House.

2. The Erroneous Construction

The bench relied upon the judgments in the Atmaram case and Yashpal case concluded that if there are two negative conditions, the expression ‘or’ as in Section 24(2) has to be read as conjunctive and both the conditions must be fulfilled. By doing so the bench has erred in grammar at best and in law at worst as the statement in Atmaram case was merely an isolated observation. In the ratio however, the Court has explicitly held the two negative conditions in that case to apply disjunctively and in ¶20 has categorically discarded the idea of substituting the words ‘or not’ with ‘nor’ as that would change the structure and meaning of the sentence.

Similarly, in Yashpal case, the words ‘established or incorporated’ were interpreted as ‘established and incorporated’ because incorporation must necessarily follow establishment and cannot occur disjunctively. However, since Section 17 of the old Act also provided for taking advance possession without payment of compensation, one may not necessarily follow the other and Section 24(2) therefore stands on a different footing. However, the Court was firm in its strenuous view in ¶122 that Section 24(2) does not visualise such a situation.

3. Just Payment of Compensation

Since Section 24(2) deals with the acquisitions during 2009-2014, provisions of the old Act must apply. Section 31(2) of the same explicitly provides that deposit in court is the only valid method of payment of compensation, in cases where land owners refuse to accept the same. The bench however seems to adopt a rather complicated method to hold that mere tendering of compensation or its deposit in the Government’s treasury shall be deemed as paid and substantiates this with the absence of any provision under the old Act for lapse of proceedings owing to non-deposit of compensation in Court.

In doing so the bench has ignored two important features that were highlighted in the DDA case. First, that Section 24(2) begins with a non-obstante clause and therefore has an overriding effect and second, that the Act is a transitory legislation that should not import the intent and scheme of the old Act. Moreover, the bench’s embrace of State favouring schemes of the old Act while refusing to apply Section 31 unselectively as the law at the time in force is nothing short of a tragic irony.

4. Truth about Purposive Interpretation of Beneficial Legislations

While adopting a purposive construction of the Act, the Mischief rule finds most relevance. This rule from Heydons case, suggests that a statute must be interpreted in a way that it remedies the mischief it sought to remedy. Despite recognising in ¶112 that Section 24(2) aims to penalise the lethargy and indolence of the acquiring authority, the Court refuses to acknowledge that such inaction may be in either taking possession or paying compensation in accordance with the old Act, thereby diluting the remedy envisaged by the legislature.

Moreover, the beneficial nature of the legislation is evident from the preamble of the Act, in the words, ‘least disturbance to the owners…provide just and fair compensation’ or ‘rehabilitation and resettlement.’ It is an essential rule of statutory interpretation that where several interpretations of a beneficial legislation are possible, the Court must adopt the one that affects the rights of an individual the least and protects the interest of the beneficiaries. Since the State wields the power of the sword as well as the purse, it is the duty of the Courts to protect individuals against State action and not vice versa. The bench seems to have missed this cardinal rule when it apparently describes a landowner’s refusal to accept compensation on account of inadequacy as a ‘wrong’ and rules out prejudice caused by deposit of compensation into the Government’s treasury instead of an impartial and neutral Court.

5. Bandwagon Fallacy

The bench was swayed by the multitude of rules framed by the States that called for treasury deposit of compensation. In lieu of interpreting Section 31(2) of the old Act according to the rules framed thereunder, the Court should have declared such rules as ultra vires the parent Act. Similarly, in construing the absence of refund provisions to imply non-comprehension of refund of compensation, the Court has wrongly filled a lacuna by judicial interpretation.

6. Ghost of Per Incuriam

While the bench declares the DDA judgment as per incuriam, it fails to take into account the two leading judgments in the cases of Magnum Promoters and Karnail Kaur passed by the Supreme Court acknowledging in detail, the literal interpretation of Section 24(2) and payment into Reference Court as the correct position of law.

Conclusion

The sovereign judiciary derives its authority from public trust and confidence. This obedience is borne out of consistent judicial propriety. By adopting an unnecessarily arduous interpretation of a statute and disregarding the overwhelming number of precedents that set a contrary stare decisis, the five-judge bench has unsettled several established principles. In fact, given the sundry of fallacies in interpretation that the judgment beholds, it is doubtful if the correctness of the judgment is determined by the strength of the bench.

In creating a casus omissus situation when there existed none, and subsequently bringing a virtual amendment in the 2013 Act by judicial legislation the Court has defied the fundamental rule of jus discre non facere. The way this judgment has played havoc with a landowner’s quest for just compensation, one is but compelled to question the whereabouts of the justice that was once seen to be done.

The authors are students at the National Law University, Ranchi.

Image Source: Africa Europe Faith and Justice Network