Manoharlal: the acquisition-lapse test

When the 2013 land-acquisition law replaced the 1894 Act, its s.24(2) offered old-acquisition landowners a dramatic remedy: if the acquisition had sat incomplete for five years, it lapsed and the land came back. For six years the scope of that remedy swung wildly with the case law; since March 2020 it has been fixed. Every deemed-lapse plea you see in a Telangana acquisition file — and old acquisitions generate them constantly — is now tested on Manoharlal alone.

The case

Section 24(2) of the RFCTLARR Act 2013 provides that a 1894-Act acquisition in which the award was passed five or more years before the 2013 Act commenced lapses “where possession has not been taken or compensation has not been paid”. In Pune Municipal Corpn. v. Harakchand Misirimal Solanki, (2014) 3 SCC 183, the Supreme Court read this generously for landowners: depositing compensation in the government treasury was not “payment”, so acquisitions where the money sat in the treasury lapsed. A wave of lapse litigation followed, and conflicting benches eventually forced a reference.

In Indore Development Authority v. Manoharlal, (2020) 8 SCC 129 / AIR 2020 SC 1496 (5-judge Constitution Bench, decided 06-03-2020), the Court overruled Pune Municipal Corporation and settled the test. The word “or” in s.24(2) is read conjunctively for lapse purposes: an acquisition lapses only if the State has neither taken possession nor paid compensation for five years or more. If either step was completed — possession taken, or compensation paid — there is no lapse. Tender or deposit of the compensation discharges the payment obligation: the State’s duty ends with tendering the amount; a landowner who refused to accept compensation cannot ride his own refusal into a lapse claim. And the five-year window excludes periods covered by court interim orders — a landowner who obtained a stay cannot count the stayed years against the State.

The rule you apply

When a deemed-lapse claim arrives — usually as a representation, a writ counter you must instruct on, or an objection in a possession-handover file — assemble a two-column chronology and answer two questions of fact. Was possession taken? Look for the possession panchanama, the handover to the requiring body, subsequent use of the land. Was compensation paid, tendered or deposited? Look for the award, payment vouchers, tender notices, reference-court deposits, treasury deposits. If either column has a yes within the window, the acquisition survives; only a double no — neither possession nor any payment/tender for five-plus years, after excluding stay periods — lapses it. Then check the litigation history: every interim order, its dates, and who obtained it, because those periods come out of the computation. Your factual report on these points is usually what the Government Pleader’s case stands on.

Where it bites in your work

• Old-award acquisitions being operationalised now. Irrigation, roads and industrial-area acquisitions with 1980s–2000s awards resurface when the project finally moves; occupants resist handover claiming lapse. The chronology you certify decides the writ.
• Record-correction applications over acquired land. Erstwhile owners seek restoration of their names on the strength of Pune MC-era logic. If possession or payment happened, the land vested absolutely; the entry stays with the State/requiring body.
• Compensation-refusal files. Award amounts lying undisbursed because owners refused them or title was disputed: the refusal or the reference-court deposit defeats a later lapse plea — record the tender history meticulously.
• Alienation and NOC checks. Parcels under old acquisitions appear in sale-permission and 22-A-type verification queues; whether the acquisition subsists (no lapse) determines whether any private transaction is possible at all.

How officers get it wrong

The first error is citing the overruled case: reports and even orders still occasionally track Pune MC’s treasury-deposit-is-not-payment reasoning; since 06-03-2020 that is simply wrong law, and a report built on it misleads the Government Pleader. The second is sloppy possession records: where the panchanama is missing or undated, the State’s best facts become unprovable — which is why today’s possession proceedings must be documented as if a lapse plea will arrive in 2045, because it will. The third is ignoring stay periods: computing five years on the calendar without deducting the years the claimant’s own interim order froze the acquisition. The fourth is conceding lapse administratively: restoring names or recommending re-acquisition on a representation, without the chronology, because the acquisition “looks dead” — lapse is a legal conclusion for a court, and your role is to supply accurate facts, not to declare it. The fifth is the converse: treating Manoharlal as if lapse can never occur — where the State genuinely neither took possession nor tendered a rupee for decades, s.24(2) does bite, and pretending otherwise just prolongs the writ.

Questions you’ll actually get

“The award was passed in 1996 but the money is still in the treasury. Hasn’t the acquisition lapsed?” No. The Constitution Bench held that deposit or tender discharges the payment obligation — the treasury deposit defeats the lapse claim. The claimant’s remedy is to seek disbursal of the compensation (with whatever interest the law allows), not return of the land.

“The owners refused the cheques in 2001 and now claim lapse for non-payment. What goes in the report?” The tender history — dates, notices, refusal endorsements. Manoharlal holds in terms that landowners who refused compensation cannot claim lapse; their refusal completes the State’s obligation.

“Possession was never taken and nothing was ever paid — the file just died in 2004. Do we oppose the lapse plea anyway?” Check for stays first; if the five-plus years stand clean with neither possession nor tender, this is the genuine s.24(2) case and the honest report says so. Fighting the unfightable wastes the court’s time and your credibility for the cases the State should win.