Section 78: Investment of Money Deposited for Land Belonging to a Person Incompetent to Alienate
Section 78 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 deals with safeguarding compensation deposited with the Authority where the acquired land belonged to a person who had no power to alienate it.
Meaning and purpose of Section 78
The provision applies after money has been deposited with the Land Acquisition, Rehabilitation and Resettlement Authority under Section 77(2). Its purpose is to preserve the capital value of compensation where the person holding the acquired land did not have legal power to alienate that land. Instead of treating the deposited amount as immediately disposable money, the Authority must deal with it in the manner prescribed by Section 78.
Section 78 - statutory provision explained
Sub-section (1): If money deposited with the Authority under Section 77(2) relates to land that belonged to a person having no power to alienate it, the Authority must order the money to be invested in the purchase of other land held under a similar title and conditions of ownership.
If such a purchase cannot be made immediately, the money may be invested in Government or other approved securities considered appropriate by the Authority. Interest or other proceeds from that investment are to be paid to the person or persons who would, for the time being, have been entitled to possession of the acquired land.
The deposited money remains protected until it is applied towards purchase of substitute land or paid to a person or persons who become absolutely entitled to it.
Sub-section (2): In cases covered by Section 78, the Authority must order the Collector to bear the prescribed costs and reasonable charges relating to the investment, orders for payment of interest or other proceeds, payment of the principal amount and connected proceedings. The statutory exception concerns costs occasioned by litigation between adverse claimants.
How Section 78 operates with Section 77
Section 77 ordinarily requires the Collector to tender compensation and deposit it in the entitled person's bank account. Section 77(2), however, requires deposit with the Authority in specified situations, including where there is no person competent to alienate the land or where disputes exist regarding title or apportionment. Section 78 then supplies a special protective mechanism for deposited compensation where the land belonged to a person without power to alienate it.
Key legal points
- The provision concerns money already deposited with the Authority under Section 77(2).
- The trigger is that the acquired land belonged to a person who had no power to alienate it.
- The preferred statutory course is purchase of other land to be held under corresponding title and ownership conditions.
- Until substitute land can be purchased, the Authority may direct investment in Government or other approved securities.
- Income from the investment is payable to the person or persons who would have been entitled to possession of the acquired land for the relevant period.
- The principal remains protected until applied to substitute land or paid to a person who becomes absolutely entitled.
- Specified investment and payment-related costs are to be borne by the Collector, subject to the statutory exception for litigation between adverse claimants.
Related provisions
Section 78 forms part of Chapter X on payment of compensation. It should be read with Sections 75 and 76 on apportionment, Section 77 on payment or deposit of compensation, Section 79 on investment in other cases and Section 80 on payment of interest.
The statutory text should be consulted for application to individual facts, including the nature of title, entitlement and any directions made by the competent Authority.