Few provisions of Indian land law have generated as much litigation as Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the "2013 Act" or "LARR Act"). It offers landowners a route to have long-dormant acquisitions under the old Land Acquisition Act, 1894 declared to have "lapsed." Since the Constitution Bench decision in Indore Development Authority v. Manoharlal in 2020, the scope of that route has narrowed sharply. This article sets out what Section 24(2) now requires, where its limits lie, and which lines of challenge to a stale acquisition survive alongside it.
The Text and the Problem
Section 24(2) addresses acquisitions where an award under the 1894 Act was made five years or more before the 2013 Act commenced on 1 January 2014. Its operative words are:
where an award 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 said proceedings shall be deemed to have lapsed.
The interpretive difficulty lay in the word "or." Read literally, a failure either to take possession or to pay compensation would trigger lapse. That reading, adopted by a three-judge bench in Pune Municipal Corporation v. Harakchand Misirimal Solanki (2014) 3 SCC 183, produced a wave of successful lapse claims and conflicting High Court decisions. The Constitution Bench was convened to settle the question.
The Constitution Bench Holding in Indore Development Authority
Indore Development Authority v. Manoharlal, (2020) 8 SCC 129, decided on 6 March 2020, is now the binding authority on Section 24(2), and it overruled Pune Municipal Corporation.
"Or" Read as "Nor": Both Conditions Must Fail
The central holding is that lapse requires the acquiring authority to have failed on both counts. In the words of the judgment:
The word 'or' used in Section 24(2) between possession and compensation has to be read as 'nor' or as 'and'. The deemed lapse of land acquisition proceedings under Section 24(2) of the Act of 2013 takes place where due to inaction of authorities for five years or more prior to commencement of the said Act, the possession of land has not been taken nor compensation has been paid. In other words, in case possession has been taken, compensation has not been paid then there is no lapse. Similarly, if compensation has been paid, possession has not been taken then there is no lapse.
The practical consequence is stark. If the State has taken possession, even through documentary means, a failure to pay compensation cannot by itself trigger lapse. Equally, if compensation has been properly tendered, a failure to take possession will not cause lapse. Only the coincidence of both failures produces a deemed lapse.
The Meaning of "Paid": Tender, Not Acceptance
The Bench also rejected the narrow view of "paid" from Pune Municipal Corporation. It held:
The expression 'paid' in the main part of Section 24(2) of the Act of 2013 does not include a deposit of compensation in court. The consequence of non-deposit is provided in the proviso to Section 24(2). The obligation to pay is complete by tendering the amount under Section 31(1). Land owners who had refused to accept compensation or who sought reference for higher compensation, cannot claim that the acquisition proceedings had lapsed under Section 24(2) of the Act of 2013.
Once compensation is tendered under Section 31(1) of the 1894 Act, the State's payment obligation is discharged, even if the landowner refuses the money or disputes the amount. A refusal to accept does not keep the acquisition alive. This reading privileges the State's position, but it is binding. The narrow space it leaves is factual: mere determination of compensation in an award is not the same as tender, so where compensation was never actually tendered, or was tendered conditionally or defectively, the "paid" condition may remain unmet.
Deposit and the Proviso
The Bench distinguished "paid" in the main provision from "deposited" in the proviso. The proviso addresses cases where compensation has not been deposited in court; where it has not been deposited in respect of a majority of holdings, all affected landowners become entitled to compensation under the higher rates of the 2013 Act. Non-deposit therefore has a distinct statutory consequence and does not, on its own, cause the acquisition to lapse under the main provision.
The Five-Year Period and Interim Orders
On computation, the Bench held:
The provisions of Section 24(2) providing for a deemed lapse of proceedings are applicable in case authorities have failed due to their inaction to take possession and pay compensation for five years or more before the 2013 Act came into force ... The period of subsistence of interim orders passed by court has to be excluded in the computation of five years.
Two points follow. First, the relevant window is five years or more before 1 January 2014, that is, from 1 January 2009 backwards; an award made within that window may fall within Section 24(2). Second, any period during which a court stay or interlocutory order was in force must be excluded from the five-year count, which makes the existence and duration of interim orders a critical factual enquiry in any lapse claim.
The Constitution Bench holding remains the Court's final word. No later three-judge bench has revisited its core, and the Court has since reaffirmed that review petitions against Indore-implementing judgments do not lie where the law is settled by the Constitution Bench.
Possession: Formal Entry Versus Actual Control
A recurring battleground is what counts as "taking possession." Indore answered this in favour of formal, documentary possession:
The mode of taking possession under the Act of 1894 and as contemplated under Section 24(2) is by drawing of inquest report/memorandum. Once award has been passed on taking possession under Section 16 of the Act of 1894, the land vests in State there is no divesting provided under Section 24(2) of the Act of 2013, as once possession has been taken there is no lapse under Section 24(2).
The Court explained that the State need not forcibly evict the previous owner to claim possession. Once an award is made and a memorandum drawn, title no longer rests with the landowner and possession vests in the State as an "indefeasible right"; no representative of the State has to physically occupy the land.
This leaves a conceptual gap that has not been squarely closed. Indore did not directly address the situation of a Rapat Roznamcha entry, a paper recording of State possession in the revenue records, combined with the original owner's continued physical occupation of a constructed residential property to which no compensation was ever paid, and on which no development, construction or State use ever followed. There is an arguable distinction between formal possession, which Indore treats as sufficient, and actual physical possession, meaning whether the State genuinely exercises control. On the current state of the authorities, the memo underlying this article found no post-2020 Supreme Court decision that has expressly limited the Indore possession definition on the ground of continued actual occupation of residential property; courts have generally applied Indore as written. Equally, no decision has expressly rejected such a distinction, which leaves some room to argue, on appropriate facts, that a bare revenue entry leaving the owner in undisturbed occupation is not the meaningful "taking of possession" the statute contemplates, particularly where compensation was also never paid.
Section 5-A: A Substantive Right, Not a Formality
Independent of Section 24(2), the procedural integrity of the underlying 1894-Act acquisition can be challenged, and the key provision is Section 5-A. The Supreme Court has repeatedly held that Section 5-A confers a substantive right rather than a mere procedural step. In Hindustan Petroleum Corporation Ltd. v. Darius Shapur Chenai, (2005) 7 SCC 627, the Court held:
Section 5-A of the Act being the heart of the Act gives the citizen to avail of the only opportunity to make submissions both on the public purpose and the suitability of the acquisition in respect of his land, and, thus, being a valuable right which is akin to a fundamental right, the procedures laid down therein must be strictly complied with.
The provision has two parts, both mandatory: the Collector must hear objections, conduct any necessary enquiry, and report to the Government with recommendations; and the Government must consider that report, apply its own mind to the objections and recommendations, and decide whether to proceed or release the land. As the Court put it, "Section 5-A consists of two parts ... both the parts must be strictly complied with." In Gulabrao Keshavrao Patil v. State of Gujarat (1 December 1995), where one department recommended release while another disagreed and the conflict was never resolved at the level of the Chief Minister, the Court held that no valid decision under Section 5-A(2) had been taken at all.
Two further strands of the doctrine matter. First, on the Government's duty to apply its mind, the Court in Hindustan Petroleum held that a counter-affidavit by the Collector cannot discharge the State's burden, because "the job of the Collector in terms of Section 5-A would be over once he submits his report"; the State must itself demonstrate, on the record, that it considered the objections, the report and the Collector's recommendations. Second, where the Collector recommends release and the Government overrides that recommendation, "reasons for order must exist on the record" even if they need not be formally assigned, and an arbitrary override is a serious defect.
The reach of a Section 5-A challenge is not unlimited. In New Okhla Industrial Development Authority v. Darshan Lal Bohra, 2024 INSC 508, the Court reaffirmed that strict compliance with Section 5-A is required but confined the right to challenge on procedural grounds to those who actually filed objections; a person who accepted compensation or never objected cannot later invoke a procedural violation. Section 5-A therefore offers a standalone ground for testing the legality of an acquisition, distinct from Section 24(2), but only to a party who preserved it by objecting.
Article 14: No "Pick and Choose" in Acquisition
Land acquisition, like all State action, must satisfy Article 14. The Supreme Court has held that the State cannot "pick and choose" which owners to favour. In Ramesh Chandra Sharma v. State of Uttar Pradesh, 2023 INSC 144, the Court held:
State or its instrumentalities cannot be permitted to adopt an attitude of pick and choose in land acquisition matters ... The classification between 'Pushtaini' (ancestral) and 'Gair-pushtaini' (non-ancestral) landholders in compensation determination was arbitrary and violated Article 14 of the Indian Constitution.
The principle extends beyond compensation to acquisition and release decisions themselves. If land belonging to some owners within an acquisition is released while similar land of others is retained, the State must show an intelligible differentia and a rational nexus with the statutory purpose. Where the lands are similarly situated, differential treatment offends Article 14. The Court's decision in Ex-Subedar Surat Singh v. State of Haryana reflects the same logic in the specific setting of constructed residential property: the retention of a constructed residential property while similar acquired land is released may violate Article 14 unless a rational basis for the difference is shown. Selective release, or an arbitrary override of a Collector's recommendation for release, can thus be attacked as both a Section 5-A defect and an Article 14 arbitrariness.
Article 21: The Right to Shelter as a Supporting Argument
The Court has recognised the right to shelter as a facet of the right to life. In Francis Coralie v. Union Territory of Delhi (1981) it located the right to residence and settlement within Article 21; in P.C. Gupta v. State of Gujarat (1994) it connected the right to shelter to Article 19(1)(e) and Article 21; and in UP Avas Evam Vikas Parishad v. Friends Coop. Housing Society Ltd. (1996) it affirmed the right to shelter as a fundamental right springing from both. In more recent land-acquisition orders, such as those in Abdul Mateen Siddiqui v. Union of India (2023), where the Court granted an interim stay on eviction and directed attention to rehabilitation, it has emphasised the "human angle" where families face homelessness through acquisition.
The limits are important. The Court has not created an absolute bar on acquisition on Article 21 grounds. As the caution in Chameli Singh reflects, where the State follows the applicable acquisition procedure, a bare Article 21 deprivation claim is unsustainable. The right to shelter therefore operates as a supporting argument, strongest where the acquisition process is itself procedurally defective, rather than as a freestanding ground of relief.
Distinguishing Indore and the Role of Article 142
Because Indore is binding, a challenge to a stale acquisition that survives it must generally do one of two things: distinguish the case on its facts, or invite the Court to exercise its power to do complete justice.
On distinguishing, the arguable factual pressure points are that the acquired land includes constructed residential property rather than bare land, a situation Indore did not directly address; that a mere Rapat Roznamcha entry was made while the owner remained in continuous physical occupation for years; that compensation was never actually tendered as opposed to merely determined in the award; and that a Section 5-A defect, such as an ignored recommendation for release, taints the acquisition independently. Whether such distinctions succeed depends heavily on whether the lower court applied Indore mechanically or examined these facts.
On extraordinary relief, the memo identifies that individual benches have, without disturbing Indore, used other tools. In Government of NCT of Delhi v. M/s BSK Realtors LLP, 2024 INSC 455, the Court invoked Article 142 to balance procedural doctrines against the public interest, indicating scope for complete-justice relief on appropriate facts. The Abdul Mateen Siddiqui orders illustrate interim protection granted on the human dimension of shelter. Relief of this kind is more plausible where the land was acquired but never developed or used, no third-party interests have intervened, compensation was never received, and no substantial public purpose has been served. Indore itself sounded the countervailing warning, cautioning against the misuse of Section 24 to unwind settled acquisitions decades later where land has already been handed over and developed and third-party interests have arisen:
The court is alive to the fact that there are a large number of cases where, after acquisition land has been handed over to various corporations, local authorities, acquiring bodies, etc. ... now declaration is sought under the cover of section 24(2) to invalidate all such actions.
Practical Takeaways
The doctrine, distilled, yields a clear set of working propositions for anyone assessing whether a pre-2014 acquisition can still be challenged:
- A Section 24(2) lapse now requires both non-possession and non-payment. If the State took possession, whether or not it paid, or paid (by tender under Section 31(1)), whether or not it took possession, there is no lapse.
- "Paid" means tendered, not accepted. A landowner's refusal of tendered compensation, or a pending reference for higher compensation, does not keep the acquisition alive. But a mere determination of compensation in the award, with no actual tender, may leave the "paid" condition unmet.
- Formal possession through a memorandum or revenue entry generally suffices under Indore; arguments based on continued actual occupation of constructed residential property remain open but unsettled.
- Exclude any period of a subsisting court interim order when counting the five years. Verify whether a stay was in force.
- Section 5-A supplies an independent ground: both the Collector's enquiry and the Government's reasoned decision are mandatory, but only an actual objector who did not accept compensation can raise it.
- Selective release of similar land, or an arbitrary override of a recommendation for release, can be challenged under Article 14 and as a Section 5-A defect.
- The right to shelter under Article 21 is a supporting argument, strongest where the acquisition process is itself defective; it is not a standalone bar to acquisition.
- Where Indore technically applies, relief may still be available by distinguishing on facts or through Article 142, particularly where the land was never used, no third-party interests exist, and no compensation was received.
Key Authorities
- Indore Development Authority v. Manoharlal, (2020) 8 SCC 129 (Constitution Bench, 6 March 2020) — reads "or" in Section 24(2) as "nor," requiring both non-possession and non-payment for lapse; "paid" means tender under Section 31(1); overrules Pune Municipal Corporation. Source
- Pune Municipal Corporation v. Harakchand Misirimal Solanki, (2014) 3 SCC 183 — earlier three-judge view (now overruled) that either failure triggered lapse.
- Hindustan Petroleum Corporation Ltd. v. Darius Shapur Chenai, (2005) 7 SCC 627 — Section 5-A is a substantive right; both the Collector's and the Government's roles must be strictly complied with, and reasons must exist on the record. Source
- Gulabrao Keshavrao Patil v. State of Gujarat (1 December 1995) — an unresolved inter-departmental conflict means no valid Section 5-A(2) decision was taken. Source
- New Okhla Industrial Development Authority v. Darshan Lal Bohra, 2024 INSC 508 — strict Section 5-A compliance required, but only actual objectors who did not accept compensation may challenge on procedural grounds.
- Ramesh Chandra Sharma v. State of Uttar Pradesh, 2023 INSC 144 — the State cannot "pick and choose"; arbitrary classification in acquisition or compensation violates Article 14.
- Ex-Subedar Surat Singh v. State of Haryana — discriminatory retention of constructed residential property while releasing similar land may violate Article 14.
- Government of NCT of Delhi v. M/s BSK Realtors LLP, 2024 INSC 455 — Article 142 used to balance procedural doctrine against the public interest in acquisition.
- Abdul Mateen Siddiqui v. Union of India (2023) — interim stay on eviction, emphasising the "human angle" and the right to shelter under Article 21.
- Francis Coralie v. Union Territory of Delhi (1981); P.C. Gupta v. State of Gujarat (1994); UP Avas Evam Vikas Parishad v. Friends Coop. Housing Society Ltd. (1996) — the right to shelter as a facet of Articles 19(1)(e) and 21.
This analysis reflects the law as at May 2026. It is published for general information and does not constitute legal advice.