On Tuesday, a five-judge Constitution Bench of the Supreme Court will begin hearing a case to clarify the interpretation of the law on land acquisition, specifically the provision related to compensation awarded to land owners. Two three-judge Bench rulings delivered by the apex court in 2014 and 2018 on the same issue differed in their interpretations, prompting the court to refer the matter to a larger Bench.
The scheduled hearing will decide the legality of several cases of land acquisition that took place across the country before 2009. The matter also raises significant questions on judicial discipline, and how judgments of the court are applied while deciding subsequent cases on similar issues.
What is the provision of the law in question?
The issue involves Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which replaced the colonial 1894 land acquisition law.
The provision says that in cases where acquisition proceedings were initiated under the 1894 law and compensation had been determined, the proceedings would lapse if the state did not take possession of the land for five years, and also had not paid compensation to the landowner.
Once the proceedings lapse under the old law, the acquisition process would be initiated again under the new law, allowing the owner to get a higher compensation.
The term “paid” needed interpretation — and since it placed the responsibility on the government, cases were filed before courts soon after the law was implemented.
What did the two conflicting judgments say?
In 2014, in the first such case involving the interpretation of the new law, a three-judge Bench comprising Justices R M Lodha, Madan Lokur and Kurian Joseph in Pune Municipal Authority v Harakchand Misirimal Solanki said that the state depositing the compensation in its own treasury cannot be equated with the landowners being “paid”.
In exceptional circumstances, where the landowner refuses the compensation, the sum can be deposited with the court, but a deposit in its own treasury would not suffice.
This ruling was followed as precedent by High Courts in several cases, and was affirmed by the apex court itself in 2016.
However, in February 2018, a three-judge Bench comprising Justices Arun Mishra, Adarsh Goel and Mohan Shantanagoudar while dealing with a similar issue, ruled in Indore Developmental Authority v Shailendra that in cases where the landowner had refused compensation, depositing it with the treasury was sufficient, and the state was not obligated to deposit it with the court.
The court also said that the only consequence of not depositing the compensation with the court “at the most in appropriate cases may be of a higher rate of interest on compensation”, and not lapse of acquisition.
In doing so, the court also invalidated the settled law on the issue — the 2014 judgment by another three-judge Bench on the same issue — and declared it “per incuriam”.
The two senior judges formed the majority in the 2018 verdict; Justice Shantanagoudar dissented.
Why was a referral to a larger Bench made?
Days after the 2018 verdict was pronounced, another three-judge Bench comprising Justices Lokur, Joseph (both of whom were part of the 2014 verdict that was invalidated), and Deepak Gupta noticed the inconsistency and stayed all cases relating to this provision of the land acquisition Act in High Courts across the country until the question of law was settled.
It also asked “other Benches of the Supreme Court” to not take up the issue until it was decided by a larger Bench.
Justice Joseph in oral observations made in the court strongly criticised the 2018 ruling, and said that the verdict had deviated from “virgin principles” of the institution in declaring a verdict of equal Bench strength as per incuriam.
Subsequently, separate Benches headed by Justices Goel and Mishra referred the case to then Chief Justice of India Dipak Misra requesting him to set up a larger Bench.
What is the problem with an ruling being invalidated?
The controversy stemmed from not only the fact that the 2014 ruling was declared per incuriam, but also because it was done so by a Bench of equal strength. In common law, a judicial system that is followed in India, a judgment of the court is used as the basis or precedent for determining future cases.
A ruling of the Supreme Court is binding on all High Courts, and a ruling of the Supreme Court by Benches of larger or equal strength is binding on other Benches of the court.
A three-judge Bench cannot hold a decision by another three-judge Bench to be per incuriam, but can only ask for consideration by a larger Bench if it disagrees with the precedent.
Similarly, a Bench cannot ask other Benches to not follow a judgment.
Since the Supreme Court sits in Benches of two or three (unlike in the US where all justices of the Supreme Court sit together for hearing every case), the practice of following precedent ensures consistency and certainty in law. Hence, larger Bench rulings are preferred to make sure that the law laid down by the court is predictable as far as possible.
And what does it mean for a case to be declared per incuriam?
‘Incuria’ is Latin for “carelessness”, and when a judgment is declared per incuriam, it means that the case was wrongly decided, mostly because the judges were ill-informed about the applicable law. A judgment can also be declared per incuriam if it has materially deviated from earlier precedents.
A judgment that is per incuriam has no legal force or validity and does not have to be counted as a precedent.
Justice Shantanagoudar in his dissent agreed with the interpretation of the law with Justices Mishra and Goel who wrote the majority opinion, but declined to declare the 2014 ruling per incuriam. He said that the ruling had considered all aspects of the law, but since it was the first decision on the provision, had taken a different view.