Amid calls for recusal, Arun Mishra delivers another verdict reducing scope of land-acquisition act

The Supreme Court judge, Arun Mishra, in Delhi, in July 2018. Sandeep Saxena / The Hindu
18 October, 2019

Arun Mishra’s conscience is clear, as is his “integrity before god,” the Supreme Court judge said in his courtroom on 15 October. He was responding to multiple parties seeking his recusal from a five-judge constitution bench formed to examine the correctness of two conflicting interpretations of a 2013 land acquisition law. Mishra was heading the bench. He had also authored one of the judgments in question. Both considered when compensation under the law is deemed paid.

Away from the media spotlight, just one day before he sat on the constitution bench that assembled to review his previous verdict and heard a plea for his own recusal, Mishra pronounced another judgment pertaining to the compensation provision under the 2013 law. On 14 October, in Shiv Kumar vs Union of India, Mishra, along with the judges MR Shah and BR Gavai, ruled that those who purchase a piece of land after the government has initiated acquisition proceedings on it—referred to as “subsequent purchasers”—cannot avail the benefits of compensation under the 2013 law. The latest judgment took great pains to set aside a 2017 judgment by the Supreme Court. Further, it not only reduced the scope of the 2013 law, but also revealed a significant contradiction in the court’s reasoning.

To understand the significance of Mishra’s latest judgment, it is necessary to revisit the two cases that ultimately led to the formation of the constitution bench. At the heart of all these cases lies Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The law repealed the Land Acquisition Act of 1894, and was enacted to protect the interests of those affected by the acquisition of property. Section 24 was a crucial element in this regard. It stated that any acquisition under the 1894 act in which the concerned government had not taken possession of the land or paid the due compensation for a period of five years or more would be deemed lapsed.

The 2013 act came to force on 1 January 2014, and one of the first issues on it that the Supreme Court had to adjudicate was the question of when compensation could be deemed paid, in Pune Municipal Corporation vs Harakchand Misirimal Solanki. The municipal corporation submitted that it had issued notices inviting landowners to receive compensation, who had refused to accept the amount. It had therefore submitted the compensation amount with the state treasury. This, it argued, should satisfy the requirement under Section 24, and allow the acquisition to be upheld. But a three-judge bench, comprising RM Lodha, Madan Lokur and Kurian Joseph, unanimously held that the compensation amount would have to either be considered paid to the landowners in question or deposited before the court for it to evade the mandate of Section 24.

Subsequently, various high court and Supreme Court judgments followed the precedent set in Pune Municipal Corporation—until February 2018, when another three-judge bench, led by Mishra, arrived at a contradictory interpretation of the 2013 act. In Indore Development Authority vs Shailendra, the Supreme Court ruled that if compensation is deposited with the state treasury because the landowners refused it, the acquisition cannot be said to have lapsed under Section 24. Mishra did not stop there. In his judgment, authored on behalf of AK Goel and himself, Mishra wrote that the judges had “given deep thinking whether to refer it to further Larger Bench.” They decided against it, he wrote, because the ruling in Pune Municipal Corporation was “per incuriam”—a legal maxim that means “through lack of care,” referring to an incorrect judgment.

The third judge in the case, Mohan Shantanagoudar, wrote a dissenting opinion. Though Shantanagoudar agreed with Mishra’s stance that the acquisition had not lapsed, he dissented on the act of setting the previous judgment aside. “The judgment in Pune Municipal Corporation (supra) was not rendered per incuriam, as the conclusion is reached by proceeding in detail on the interpretation of relevant statutory provisions,” Shantanagoudar wrote. With him dissenting, in effect, a two-judge majority led by Mishra set aside a unanimous judgment delivered by a three-judge bench.

Later that month, while adjudicating another land-acquisition case, another three-judge bench of the Supreme Court, which included Lokur and Joseph—both of whom ruled on Pune Municipal Corporation—stayed the order in Indore Development Authority. The court ruled that on the next hearing, it would determine whether the matter ought to be referred to a larger bench, and requested all other high courts and Supreme Court benches hearing similar cases to adjourn them until such a determination was made.

The very next day, Mishra and Goel—the two judges who had set aside Pune Municipal Corporation with Indore Development Authority—passed two orders in two separate cases, requesting the chief justice to constitute a larger bench to resolve the issue. In effect, the two judges prevented Lokur and Joseph from deciding the matter, and forced their colleagues’ hand by seeking a referral to a constitution bench themselves.

The chief justice referred the matter to a constitution bench on 6 March 2018. At the time, the matter was mentioned before the constitution bench that was hearing a challenge to Section 377 of the Indian Penal Code. Though the bench did not immediately list the matter for hearing, it said, “We are of the prima facie view that it is wrong. A three-judge bench cannot hold the verdict passed by another three-judge bench as per incuriam.”

According to an April 2019 report in the Business Standard, Mishra’s verdict setting aside the Pune Municipal Corporation case was particularly beneficial to Reliance Industries Limited. Since 2006, the report said, the corporate powerhouse had been trying acquire land in the Jamnagar special economic zone in Gujarat, but the project had been stalled for over a decade because farmers had refused to accept the compensation for their land. In November 2017, the Gujarat High Court had ruled in favour of Reliance, holding that Section 24 would not bind private parties if they had deposited the compensation amount with the treasury. The farmers appealed before the Supreme Court, and in January 2018, the case was listed for hearing before a division bench led by Mishra. He posted the matter to March. In February, he set aside the Pune Municipal Corporation case. But before the Reliance case came up for hearing, Lokur stayed the Indore judgment.

In mid October this year, the chief justice of India announced the constitution bench, which included Mishra. As the senior-most judge on the bench, Mishra would lead it. Almost immediately, observers began to raise concerns about Mishra’s participation in the bench, and whether he should recuse himself. The first hearing was listed for 15 October.

A day earlier, Mishra pronounced the Shiv Kumar vs Union of India judgment. Mishra once again overruled a judgment written by Joseph—this time, the latter had written on behalf of himself and R Banumathi, in the 2017 case of Government of NCT of Delhi vs Manav Dharam Trust. The judgments in Shiv Kumar and Manav Dharam were centred on a different aspect of Section 24—whether subsequent purchasers, as opposed to the original landowners, are entitled to claim that an acquisition under the 1894 act has lapsed due to the provisions of the new act.

While examining Manav Dharam, Joseph had first considered the definitions of various terms under the 2013 act, such as “person interested,” “land owner” and “affected family.” These, he reasoned, showed that the scope of the 2013 act was much wider than that of the 1894 act, and that the individuals who may move the court for relief under the act were not limited to only those who hold the title to a property that was being acquired. Even though it is a settled position of law that subsequent purchasers have no right to challenge the acquisition proceedings, Joseph explained, the appellants in the case were not contesting the acquisition, but only seeking a declaration that it had lapsed due to Section 24. He further observed that the Supreme Court “has protected the rights of the subsequent purchaser to claim compensation, being a person interested in the compensation, despite holding that they have no locus standi to challenge the acquisition proceedings.”

Joseph also relied on the preamble to the 2013 act, which describes the legislation’s intent to protect “the owners of the land and other affected families … whose land has been acquired or proposed to be acquired or are affected by such acquisition.” After quoting the preamble in its entirety, he wrote, “There is a clear indication that the Act proposes to protect the interest of those persons, among others who are affected by the acquisition. The subsequent purchasers/successors, etc., in the cases before us, are all people affected by the acquisition.” Accordingly, the bench held that subsequent purchasers are entitled to file a case for a declaration that the land-acquisition proceedings have lapsed. “It is a declaration qua the land wherein indisputably they have an interest and they are affected by such acquisition,” he wrote. “For such a declaration, it cannot be said that the respondents/ writ petitioners do not have any locus standi.”

Mishra interpreted it differently in Shiv Kumar. As on the question of payment of compensation, Mishra’s interpretation reduced the possibility of challenging the acquisition proceedings using Section 24 of the 2013 act.

This, however, was not the most striking aspect of his judgment. It was instead the extent to which he excoriated Joseph’s interpretation. Mishra concluded that Section 24 of the 2013 act was not applicable in Shiv Kumar because the compensation had been awarded and the government had taken possession of the acquired land. He then proceeded to reason against the Manav Dharam judgment.

In his judgment, Joseph had failed to elaborate what could follow once a court declared that an acquisition had lapsed. Would the subsequent purchaser gain the title to the property, or would it go back to the original owner who had sold it during acquisition proceedings? And would the government have to start the acquisition process afresh?

Mishra employed this lacunae to argue against Joseph’s judgment. The purpose of the declaration that acquisition had lapsed, according to Mishra, was “to get the property back.” The transaction entered into by the original landowner and the subsequent purchaser “is always a void transaction, as no title can be acquired in the land as such no such declaration can be sought.” Mishra insisted that in the Manav Dharam case, “even the provisions of the Act of 2013 have not been taken into consideration”—an evidently incorrect reading of Joseph’s judgment, which quoted extensively from the law.

He further wrote, “It was not legally permissible to a Division Bench”—a two-judge bench—“to ignore the decisions of the larger Bench comprising of three Judges.” He continued, “They were not per incuriam and were not relevant for deciding the issue of taking possession under Act of 1894, at the instance of purchaser. In case it wanted to depart from the view taken earlier, it ought to have referred the matter to a larger bench.” Mishra delivered this verdict one day before the constitution bench hearing on the Pune Municipal Corporation and Indore Development Authority cases, in which he and Goel had overturned a judgment by a three-judge bench.

On 16 October, the Mishra-led constitution bench, set up to interpret the conflicting interpretations he had introduced, reserved its order on the plea for his recusal. It will pronounce its order on 23 October. During the recusal hearing, Mishra termed the suggestion that he should recuse himself as “maligning the court.” He said, “I won’t budge.”