Deemed Lapse under Section 24(2): From Pune Municipal Corporation to Indore Development Authority

No provision of the 2013 Act has been litigated like Section 24(2), and few provisions of any Indian statute have produced a six-year doctrinal war ending in a Constitution Bench overruling the line that started it. This note tracks the battle: Pune Municipal Corporation's claimant-friendly reading, the conflicts it spawned, the extraordinary reference, and Indore Development Authority v. Manoharlal's five-judge settlement of every disputed phrase.

1. The First Reading

📖 Pune Municipal Corporation v. Harakchand Misirimal Solanki (Supreme Court, three Judges, 2014)

Held: "Compensation has not been paid" in Section 24(2) means paid to the landowners or, where that is not possible, deposited in court under Section 31(2) of the 1894 Act; deposit of the award amount in the Government treasury is not payment and does not discharge the State. Acquisitions with five-year-old awards where the money sat in the treasury were accordingly deemed to have lapsed. The decision opened the floodgates: thousands of lapse petitions followed, and Union of India v. Shiv Raj (2014) and a long line applied it.

The companion conflict: in Sree Balaji Nagar Residential Association v. State of Tamil Nadu (2014) it was further held that periods under court stay were not excluded from the five years, Section 24(2) containing no exclusion clause, making lapse easier still.
The stakes: read together, the early line meant that an acquisition could lapse although the State had taken possession, or had tendered money the owner refused, or had been restrained by the owner's own injunction for most of the five years, results the acquiring authorities called a bounty on obstruction.

2. The Rebellion and the Reference

In Indore Development Authority v. Shailendra (2018), another three-judge bench held Pune Municipal Corporation per incuriam, and the ensuing spectacle, coordinate benches in open disagreement, interim directions to High Courts not to decide Section 24 cases, and a recusal controversy when Justice Arun Mishra, author of the 2018 view, presided over the Constitution Bench asked to settle it, made the provision a case study in precedent management as much as in land law. The five-judge bench answered in March 2020.

3. The Settlement

📖 Indore Development Authority v. Manoharlal (Supreme Court, Constitution Bench, 2020)

Held: (1) The conditions of Section 24(2) are conjunctive: lapse occurs only where the State has neither taken possession nor paid the compensation for five years or more; the word "or" is read as "nor", so either possession or payment saves the acquisition. (2) "Paid" does not require money in the landowner's hands: tender of the amount discharges the obligation, and on the owner's refusal, deposit in the treasury suffices; non-deposit in court attracts at most higher compensation under the proviso, not lapse. (3) The proviso to Section 24(2) is a distinct entitlement to 2013-Act compensation where a majority of holdings' compensation was not deposited in beneficiaries' accounts; it does not create lapse. (4) Periods of interim court orders are excluded from the five-year computation, overruling Sree Balaji Nagar. (5) Possession in acquisition practice is taken by drawing a panchnama, which vests the land; subsequent retention or re-entry by the owner is trespass. (6) Section 24 does not revive stale or concluded claims. Pune Municipal Corporation and the decisions following it were overruled.

4. The Law Now, and How to Work It

The operative test: award on or before 1 January 2009, plus neither possession nor payment, each term bearing its Indore meaning, minus stay periods, equals lapse; anything less is a compensation question, not a lapse question.
The proviso's separate life: majority-of-holdings non-deposit in beneficiaries' accounts upgrades everyone under the notification to 2013 compensation, the claimant's consolation where Indore's conjunctive test defeats lapse.
Pleading discipline: a Section 24(2) petition now stands or falls on four documented dates, award, possession panchnama, tender or deposit, and stays, and on nothing rhetorical; equally, authorities resisting lapse must produce the panchnama and the tender record, not assert them.
The critique preserved honestly: Indore is settled law and criticised law, for "or" read as "nor", for "paid" softened into "tendered", and for the bench controversy; a complete answer states the holding and knows the debate.

⚠ Key point

The war: Pune Municipal (2014), treasury deposit is not payment, lapse followed; Sree Balaji Nagar (2014), stays not excluded; Indore Development Authority v. Shailendra (2018) declared Pune Municipal per incuriam; and Indore Development Authority v. Manoharlal (Constitution Bench, 2020) settled it: conditions conjunctive (neither possession nor payment), tender is payment and treasury deposit suffices on refusal, the proviso is a distinct higher-compensation entitlement, stay periods excluded, panchnama is possession, no revival of stale claims, Pune Municipal overruled. Four dates decide every case: award, possession, payment, stays.

5. Related Topics and Provisions

Section 24's structure (Topic 85): the provision this war construed
Possession and vesting (Topic 61) and payment (Topic 78): panchnama, tender and deposit done right; the battle's two poles return in Topics 117 and 118