Landowner won a stay, then claimed the acquisition lapsed. The Supreme Court said: not so fast.
The APMC wanted land for a mega market. The Trust got court orders stalling the process for years. When a new law said acquisitions lapse after 5 years, the Trust said: time's up. The Supreme Court disagreed.
16
years.
The APMC wanted land for a mega market. The Trust got court orders stalling the process for years. When a new law said acquisitions lapse after 5 years, the Trust said: time's up. The Supreme Court disagreed.
A trust got a stay on land acquisition, waited years, then argued the case had lapsed under a new law. The Supreme Court just rejected that move — and sent the case back.
The Trust had done what many landowners do: stall the government with court orders. Then it turned around and told the court: the government took too long. The acquisition must lapse. The Karnataka High Court agreed — twice. But the Supreme Court saw a problem. The Trust had asked for the stay. The Trust had benefited from the delay. And now the Trust wanted to use that same delay as a weapon.
When the government wanted land for a mega market
In the 1990s, the Agricultural Produce Marketing Committee (APMC) of Bangalore needed land to establish a mega market. It initiated two separate acquisition proceedings under the old Land Acquisition Act of 1894. The first notification, issued on September 3, 1994, under Section 4(1) of the 1894 Act (the preliminary notification that starts the acquisition process), targeted 172 acres and 22 guntas (a gunta is about 1/40th of an acre). The Trust challenged this notification in the Karnataka High Court. The High Court dismissed that writ petition on December 23, 1995. But the Trust persisted. A Section 6 declaration (the formal declaration of acquisition under the 1894 Act) was issued on October 10, 1996.
The second acquisition began with a notification under Section 4(1) on April 13, 1999. This time, the government invoked the urgency clause under Section 17(1)-(4) of the 1894 Act (a provision that lets the government skip procedural steps like hearing objections when speed is needed). The notification covered 104 acres and 5 guntas. An award was eventually made on May 22, 2002, for 100 acres and 11 guntas — a partial award under the second acquisition.
The Jamanlal Bajaj Seva Trust owned the land. It went to the Karnataka High Court and obtained interim stay orders (court directions that stop the government from taking possession or making the final award). Those stays held for years. Meanwhile, separate proceedings under Section 66 of the Karnataka Land Reforms Act, 1961 (the provision that governs whether a person or entity holds land beyond the legal ceiling) questioned whether the Trust held excess land. The physical file of the stay order, a thin sheaf of paper with a single judge's signature, had effectively frozen a government project for nearly two decades.
The new law — and the opening the Trust saw
In 2013, Parliament passed the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act. Section 24(2) of this Act contained a powerful provision: if five years or more had passed since the old law's award was made, and if neither possession had been taken nor compensation paid, the entire acquisition would be deemed to have lapsed.
The Trust went back to the High Court. Its argument was simple: the acquisition had been stalled for years — thanks to the very stay orders the Trust had obtained — and therefore the proceedings had lapsed under the new law. The Single Judge agreed. The court framed five issues but chose to rule only on the lapse question. It decided in favour of the Trust. The other four issues — the validity of the notifications under Section 4(1) and Section 6 of the 1894 Act, the legality of possession taken, the invocation of the urgency clause under Section 17(1)-(4), and the deferral pending the Karnataka Land Reforms Act proceedings — were left untouched. The Division Bench upheld this decision.
Why the Supreme Court said no
The APMC appealed. The case reached a bench of Justice M.R. Shah and Justice B.V. Nagarathna, who delivered judgment on March 22, 2022, in The Agricultural Produce Marketing Committee, Bangalore v. The State of Karnataka & Ors.
The court's reasoning turned on two points. First, the interpretation of Section 24(2) itself. The provision says an acquisition lapses where "an award under the said Land Acquisition Act has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid." The Trust argued that "or" meant either condition — either possession not taken or compensation not paid — was enough. The Supreme Court disagreed. It relied on its own Constitution Bench decision in Indore Development Authority v. Manoharlal (2020) 8 SCC 129, which held that "or" must be read as "nor" — meaning both conditions must be present: possession not taken and compensation not paid for a lapse to occur under Section 24(2).
The court was blunt about the Trust's strategy. It held that periods covered by interim court orders — like the stay orders the Trust had obtained — must be excluded from the five-year computation. A landowner who gets a stay cannot then claim that the government's delay, caused by that very stay, triggers a lapse. "The landowners who obtained interim stays cannot claim benefit of Section 24(2)," the court stated, directly quoting its own ratio decidendi. The court also referenced its earlier decisions in Pune Municipal Corporation v. Harakchand Misirimal Solanki (2014), Sree Balaji Nagar Residential Assn. v. State of T.N. (2015), and Nusli Neville Wadia v. Ivory Properties & Ors. (2020) to reinforce the principle that the 2013 Act was not intended to penalise acquiring bodies for delays caused by court orders obtained by landowners themselves.
The court further examined Section 24(1)(a) of the 2013 Act (the provision dealing with cases where no award has been made under the 1894 Act). Under the Constitution Bench's interpretation, even where no award has been made, the acquisition does not automatically lapse — the acquiring body gets a fresh opportunity to proceed under the new law. The Trust's case, however, involved awards that had been made — the partial award of May 22, 2002 — making the lapse argument under Section 24(2) the central question.
The shortcut that failed
But the Supreme Court went further. It criticised the High Court for deciding only one issue — the lapse question — while leaving four others unresolved. The court cited Order 14 Rule 2 of the Code of Civil Procedure, 1908 (the rule that governs how courts frame and decide issues in a case, requiring that all issues be adjudicated unless a preliminary issue can dispose of the entire matter). The High Court, it said, had taken a "shortcut approach" that increased the burden on appellate courts.
"Adopting a shortcut approach of deciding only one issue increases the burden on appellate courts and necessitates remand if that single issue is found erroneous," the court stated, directly quoting its own judgment. If the single issue decided is found to be wrong — as it was here — the entire case must be sent back, wasting years of judicial time. The court noted that the Single Judge had framed five issues but had chosen to decide only the lapse question under Section 24(2) in favour of the landowners, without adjudicating the other four issues concerning the validity of notifications, the legality of possession, the invocation of the urgency clause, and the deferral pending proceedings under the Karnataka Land Reforms Act. The Division Bench had simply affirmed this approach without correction.
The court set aside both the Single Judge's order in Writ Petition No. 3884/1998 and Writ Petition Nos. 37140-37146/2000, as well as the Division Bench's common judgment. It remanded the matter back to the Single Judge for fresh adjudication on all remaining issues — the validity of the notifications under Section 4(1) and Section 6 of the 1894 Act, the legality of possession taken, the invocation of the urgency clause under Section 17(1)-(4), and the deferral pending the Karnataka Land Reforms Act proceedings. The court directed that this exercise be completed within 12 months. It also directed that Writ Appeal No. 1089/2021 be heard and decided by December 31, 2022. No order was made as to costs.
The procedural journey had been long: the first notification in September 1994, the High Court challenge dismissed in December 1995, the Section 6 declaration in October 1996, the second notification in April 1999, the partial award in May 2002, the Single Judge's lapse finding in June 2014, the Division Bench's confirmation, and finally the Supreme Court's remand in March 2022 — a span of nearly 28 years. The land the APMC wanted for its mega market remained in legal limbo, waiting for the High Court to decide what should have been decided years ago. The file, thick with decades of orders and objections, sat on a judge's desk, its pages yellowed with age.
THE PLAY: If you obtained a stay on land acquisition, the period of that stay does not count toward the five-year lapse period under Section 24(2) of the 2013 Act — and you cannot claim the acquisition has lapsed.