Chattisgarh High Court
Harishankar Patel vs Sub Divisional Officer on 6 January, 2025
-1-
2025:CGHC:786
AFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
FAM No. 11 of 2010
1 - Harishankar Patel S/o Late Krishna Lal Patel Aged About 45 Years Legal
Representative Of Late Krishna Lal, R/o Village Bhedikona, Tahsil Dabhra,
District Janjgir-Champa, Chhattisgarh.
2 - Gaurishankar Patel S/o Late Krishna Lal Patel Aged About 40 Years
Legal Representative Of Late Krishna Lal, R/o Village Bhedikona, Tahsil
Dabhra, District Janjgir-Champa, Chhattisgarh.
3 - Padum Kunwar (Died And Deleted) As Per Honble Court Order Dated-
15-06-2024.
4 - Resham Lal Patel (Died) Through Legal Heirs As Per Hon'ble Court
Order Dated 01-10-2019:
4.-A Smt. Kumudani Patel W/o Late Resham Lal Patel Aged
About 65 Years R/o Village Bhedikona, Tahsil Dabhara, District
Janjgir-Champa, Chhattisgarh
4.-B Sadanand Patel S/o Late Resham Lal Patel Aged About
45 Years R/o Village Bhedikona, Tahsil Dabhara, District
Janjgir-Champa, Chhattisgarh
4.-C Hiteshwar Patel S/o Late Resham Lal Patel Aged About
40 Years R/o Village Bhedikona, Tahsil Dabhara, District
Janjgir-Champa, Chhattisgarh.
... Appellant (s)
versus
1 - Sub Divisional Officer, Mand Shirsha Karya, Upsambhag Kharsia,
Digitally
signed by District Raigarh, Chhattisgarh
PRAVEEN
KUMAR
SINHA
2 - State Of Chhattisgarh Through Collector-Cum-Land Acquisition Officer
Janjgir, District Janjgir-Champa, Chhattisgarh.
... Respondent(s)
-2-
For Appellants : Mr. Sourabh Sharma, Advocate
For Respondents/State : Mr. Santosh Kumar Soni, Govt. Advocate
S.B.: Hon'ble Shri Parth Prateem Sahu, Judge
Order On Board
06/01/2025
Heard.
1. This appeal is filed by the appellants challenging the legality and
sustainability of the Award dated 27.07.2009 passed in Miscellaneous Civil
Suit No.5/2008 by learned Additional District Judge, Sakti, District -Janjgir
Champa whereby learned Reference Court has partly allowed the
Application for Reference filed under Section 18 (2) of the Land Acquisition
Act, 1894 (hereafter referred to as “the Act of 1894”).
2. Facts relevant for disposal of this appeal are that the appellants are
owner of the land bearing kh. No.84 area 1 acre, kh. no.85 area 0.05 acres,
kh. No.73 area 0.25 acres, kh. no.42 area 0.03 acre, kh. No.256 area 0.10
acre and kh. No.292 area 0.01 acres, situated at Village Sakhrali, Tahsil
Dabhra, District Janjgir- Champa. Aforementioned land was acquired by
respondent-State for purpose of construction of irrigation canal. As per
pleadings made in the application under Section 18 (2) of the Act of 1894,
possession of the land owned by the appellants were taken by the
respondent prior to initiating the acquisition proceedings and pursuant to
taking of possession, work of construction of canal was also started.
Notification under Section 4 of the Act of 1894 was published on 19.03.2004
and after following due procedure as provided under the Act of 1894, Award
was passed by the Land Acquisition Officer on 19.10.2006 calculating the
amount of compensation with respect to land owned by the appellants
-3-
based on the market value as provided under the guidelines prepared by
the Registrar, District- Janjgir Champa valuing the land at the rate of
Rs.1,82,400.00/- per hectare / Rs.73,846.15/- (in round off Rs.73,846.00/-)
per acre. In the Award, apart from the amount of compensation of land,
amount towards solatium of 30%, interest is also awarded at the rate of 12%
per annum from 19.03.2004 till 19.10.2006.
3. Aggrieved by the amount of compensation as calculated by the Land
Acquisition Officer and the award of interest not from the date of taking over
possession but from the date of notification, appellants submitted
application under Section 18 (2) of the Act of 1894 before the Collector
seeking reference of the Award. The Collector has allowed the application
and referred the case to the Addl. District Judge, based upon which,
Miscellaneous Civil Suit No.5/2008 was registered and accordingly,
proceedings was initiated. After hearing both the sides, learned Addl. District
Judge has passed the impugned Award, partly allowing the application filed
under Section 18 (2) of the Act of 1894.
4. Learned Addl. District Judge has formulated as many as eight issues
for consideration and based upon evidence brought on record by the
respective parties has concluded that the possession of the land owned by
the appellants have been taken by the respondent in the month of April
2002, awarded interest at the rate of 12 % per annum from 2 nd April 2002 till
19.10.2006 and thereafter interest at the rate of 15 % per annum till deposit
of amount of compensation so awarded.
5. Learned Addl. District Judge has further assessed the value of land at
the rate of Rs.1,70,500/- per hectare for calculating the amount of
-4-
compensation to be awarded to the appellants based on Ex.A-9 which is the
guidelines of market value of land prepared by the Registrar, District Janjgir
Champa .
6. Learned counsel for the appellants would submit that the finding
recorded by the learned Addl. District Judge with respect to value of the land
at the rate of Rs.1,70,500/- per hectare is erroneous on face of award
passed by the Land Acquisition Officer. Land Acquisition Officer has
assessed the value of land at the rate of Rs.2,77,135/- per hectare after
considering the sale transactions placed before it and taking average value
of sale deeds as produced before. However, the Land Acquisition Officer
erred in taking into consideration only the guidelines prepared by the
Registrar, Janjgir Champa and not the present market value as on the date
of issuance of Notification under Section 4 of the Act of 1894. He submits
that the guidelines for market value of the land of a particular area is
prepared with respect to assessment of the stamp duty at the time of
transfer/sale of the land of that village or area. It cannot be taken into
consideration as it is to assess the market value because the market value
is to be considered based upon the rates of land available based on the sale
transaction of the land within the proximate time of acquisition and brought
to notice of Land Acquisition Officer, in the case at hand, sale deeds
executed in between period from 19.03.2004 till 19.03.2005 were produced
before the Land Acquisition Officer. He next contended that the award of
interest will govern by the provision under Section 34 of the Act of 1894. In
the provision, it is specifically provided that interest is to be awarded at the
rate of 9% from the date of possession for a period of one year, and
thereafter, land oustee/land owners whose land is subject matter of
-5-
acquisition are entitled for the interest at the rate of 15% from the next year
till deposit of amount of compensation to the land oustee. It is contention of
learned counsel for the appellants that in view of provision under Section 34
of the Act of 1894, appellants are entitled to receive interest at the rate of
9% from April 2002 till April 2003 and since May 2003 till the date of deposit
of compensation at the rate of 15%. Learned Addl. District Judge fell into
error in awarding interest at the rate of 12% overlooking the specific
provision under Section 34 of the Act of 1894. In support of his submissions,
he places reliance upon the decision in the case of Bharat Sanchar Nigam
Ltd. Vs. Nemichand Damodardas (AIR OnLine 2022 SC 994).
7. Learned counsel for the State opposes the submission of learned
counsel for the appellants and would submit that though in the Award, Land
Acquisition Officer has considered the sale deeds placed before it executed
between the period from 19.03.2004 till 19.03.2005, however, has
erroneously made an observation that average market value comes to
Rs.2,77,135/- per hectare which cannot be basis for assessing the value of
the particular land. Value of the land is to be considered and assessed on
one to one basis. Each land has its separate value and, therefore, value of
land is to be assessed on the basis of each piece of land based on its size,
location, and situation. He next contended that the Reference Application
itself was not maintainable as it was submitted after six months from the
date of passing of Award. He also contended that apart from
aforementioned objection which is raised in the cross- appeal filed under
Order 41 Rule 22 of CPC, on merits, there is no error in the impugned
Award passed by learned Addl. District Judge in a proceeding under Section
18 (2) of the Act of 1894. Learned Addl. District Judge has rightly taken into
-6-
consideration the market value of the land as per the guidelines issued by
the Registrar, Janjgir Champa in absence of any specific evidence with
respect to the value of the land by the appellants /applicants. He next
contended that there is no specific evidence with respect to taking over the
possession of the land by respondent-State. From the evidence available in
the record it is apparent that the possession of the land was taken in the
month of February 2003 when the agreement was entered into between the
Contractor and respondent-State and thereafter the Contractor has started
the work.
8. I have heard learned counsel for the parties, perused the records of
this appeal as also records of MJC No.5/2008.
9. Perusal of the records of MJC No. 5/2008 would show that the
application is filed under Section 18 (2) of the Act of 1894 seeking reference
of the Award passed by the Land Acquisition Officer, for its determination by
the Court. Reference Application filed by the appellants – Krishna Lal and
Resham Lal was referred to Addl. District Judge and received in the Court
on 10.12.2007 and it was registered as Miscellaneous Civil Suit. Notices
were issued to the concerned parties. Based on the pleadings made in the
Reference Application as also reply learned Additional District Judge Sakti
has formulated as many as seven issues for consideration and thereafter
has formulated additional issue on 21.08.2008. Parties to the proceedings
led oral evidence as also placed documentary evidence in support of their
claim. In support of their contention and claim, applicants have submitted as
many as ten documents namely- copies of khasra panchshala P-II (Ex. A-1
to Ex.A-3), copies of applications filed by applicants for awarding proper
compensation (Ex.A-4 and Ex. A-5), copy of application filed by applicants
-7-
for grant of compensation as per market rate based on irrigated land, and
available trees (Ex.A-6), copies of applications for acquisition of land and
passing of award (Ex.A-7 and Ex.A-8), copy of Guidelines for assessment of
land (Ex.A-9) and copy of proposed Award dated 20 th January 1999 (Ex.A-
10) and have examined Gouri Shankar son of Krishnalal as AW-1, Teklal
Sidar (Ex. Sarpanch) as AW-2. Non-applicant State has produced and
exhibited the application filed under Section 18 of the Act of 1894 before the
Land Acquisition Officer as Ex.D-3, Chart showing the sale deed executed
and its value from 19.03.2004 to 19.03.2005 as Ex.D-4, compensation
payable sheet of acquired agricultural land as Ex.D-5,
Confirmation/approval of Award by the Collector (Land Acquisition) as Ex.D-
6, copy of Award dated 19.10.2006 as Ex.D-7. Respondent-State has
further examined M.L. Sidar, Sub Divisional Officer (R) as DW1.
10. So far as the claim with respect to assessment of the market value of
land subject matter of appeal is concerned, appellants have placed reliance
upon the Award dated 19.10.2006 passed by the Land Acquisition Officer
wherein the Land Acquisition Officer has extracted description of the land,
date of execution of sale deed and the value of the land/sale deed as
mentioned therein. Apart from the said description of the land subject matter
of earlier sale deed of other land of village in between 19.03.2004 till
19.03.2005, appellants have not brought any evidence before the learned
Additional District Judge to prove as to the big piece or the small piece of
land; whether the land is situated on the road; its location near residential
area or far from residential area of village; its distance from the road etc.
11. For assessment of the market value of land as on the date of
publication of Notification under Section 4 of the Act of 1894, factors as
-8-
mentioned above and other such factors are relevant and necessary for
considering market value of land, and its proof is necessary. In absence of
any specific evidence in this regard, market value as argued by learned
counsel for the appellants based on the average value of land as mentioned
by Land Acquisition Officer in its Award dated 19.10.2006, cannot be
accepted. For the purpose of calculating amount of compensation, market
value of land based on its location as discussed above along with others, is
required to be proved by bringing specific evidence in this regard. In
absence of any such evidence, market value of the land is to be ascertained
based on the guidelines issued by the Registrar with respect to area, village
where the land is situated. Learned Additional District Judge while
considering the pleading made in the Reference Application as also
evidence brought on record has recorded a finding that methodology
adopted for assessing the value of land on the basis of average value of
land considering ten sale deeds executed of other land by different persons
by the Land Acquisition Officer to be erroneous. Learned Addl. District
Judge has also considered that 1 acre of land was acquired which is being
a big chunk of land and has assessed the value of land based on guidelines
issued by the Registrar, District Janjgir Champa in the year 2003-2004
(Annexure A-9).
12. Section 23 of the Act of 1894 deals with “matters to be considered in
determining compensation” which read as under:-
“23. Matters to be considered in determining
compensation-(1) In determining the amount of
compensation to be awarded for land acquired under this
Act, the Court shall take into consideration –
-9-
first , the market value of the land at the date of the
publication of the [notification under section 4, sub-
section (1)];
secondly, the damage sustained by the person
interested, by reason of the taking of any standing crops
or trees which may be on the land at the time of the
Collectors taking possession thereof;
thirdly , the damage (if any) sustained by the person
interested, at the time of the Collector’s taking
possession of the land, by reason of severing such land
from his other land;
fourthly , the damage (if any) sustained by the person
interested, at the time of the Collector’s taking
possession of the land, by reason of the acquisition
injuriously affecting his other property, movable or
immovable, in any other manner, or his earnings;
fifthly , if, in consequence of the acquisition of the land by
the Collector, the person interested is compelled to
change his residence or place of business, the
reasonable expenses (if any) incidental to such
change;andsixthly , the damage (if any) bona fide resulting from
diminution of the profits of the land between the time of
the publication of the declaration under section 6 and the
time of the Collectors taking possession of the land.
[(1-A) In addition to the market value of the land, as
above provided, the Court shall in every case award an
amount calculated at the rate of twelve per centum per
annum on such market value for the period commencing
on and from the date of the publication of the notification
under section 4, sub-section (1), in respect of such land
to the date of the award of the Collector or the date of
taking possession of the land, whichever is earlier.
Explanation. In computing the period referred to in
this sub-section, any period or periods during which the
proceedings for the acquisition of the land were held up
on account of any stay or injunction by the order of any
Court shall be excluded.](2)In addition to the market value of the land as above
provided, the Court shall in every case award a sum of
[thirty per centum] on such market value, in consideration
of compulsory nature of the acquisition.”
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13. Under first clause as provided under Section 23 of the Act of 1894, to
determine the amount of compensation, is the market value of land. In
absence of proof of market value of the land subject matter of appeal by
cogent and acceptable piece of evidence, guidelines issued by the Registrar
Janjgir Champa with respect to market value of land can be taken into
consideration. In the case at hand learned Addl, District Judge has
considered the guidelines issued by the Registrar of the year 2003-04 for
computing the amount of compensation, which cannot be said to be
erroneous.
14. Hon’ble Supreme Court in the case of Bharat Sanchar Nigam Limited
(supra) has considered the issue with respect to assessment of market
value of the land as also price mentioned in Ready- Reckoner and observed
thus:
“10. Why the prices mentioned in the Ready Reckoner,
which is basically for the purpose of collecting proper
stamp duty and registration charges shall not be the
basis for determination of the compensation for the lands
acquired under the Land Acquisition Act is required to be
considered from another angle also. It cannot be disputed
that the rates mentioned in the Ready Reckoner are for
the lands of the entire area and the uniform rates are
determined with respect to different lands. In the case of
Chimanlal Hargovinddas v. Special Land Acquisition
Officer, Poona and Anr. (1988) 3 SCC 751] , this Court
has laid down the broad principles to be followed in the
case of determination of compensation, which are as
under :
“4. The following factors must be etched on the mental
screen:
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(1) A reference under Section 18 of the Land Acquisition Act
is not an appeal against the award and the court cannot
take into account the material relied upon by the Land
Acquisition Officer in his award unless the same material is
produced and proved before the court.
(2) So also the award of the Land Acquisition Officer is not
to be treated as a judgment of the trial court open or
exposed to challenge before the court hearing the
reference. It is merely an offer made by the Land
Acquisition Officer and the material utilised by him for
making his valuation cannot be utilised by the court unless
produced and proved before it. It is not the function of the
court to sit in appeal against the award, approve or
disapprove its reasoning, or correct its error or affirm,
modify or reverse the conclusion reached by the Land
Acquisition Officer, as if it were an appellate court.
(3) The court has to treat the reference as an original
proceeding before it and determine the market value afresh
on the basis of the material produced before it.
(4) The claimant is in the position of a plaintiff who has to
show that the price offered for his land in the award is
inadequate on the basis of the materials produced in the
court. Of course the materials placed and proved by the
other side can also be taken into account for this purpose.
(5) The market value of land under acquisition has to be
determined as on the crucial date of publication of the
notification under Section 4 of the Land Acquisition Act
(dates of notifications under Sections 6 and 9 are
irrelevant).
(6) The determination has to be made standing on the
dateline of valuation (date of publication of notification
under Section 4) as if the valuer is a hypothetical purchaser
willing to purchase land from the open market and is
-12-prepared to pay a reasonable price as on that day. It has
also to be assumed that the vendor is willing to sell the land
at a reasonable price.
(7) In doing so by the instances method, the court has to
correlate the market value reflected in the most comparable
instance which provides the index of market value.
(8) Only genuine instances have to be taken into account.
(Sometimes instances are rigged up in anticipation of
acquisition of land.)
(9) Even post-notification instances can be taken into
account : (1) if they are very proximate, (2) genuine and (3)
the acquisition itself has not motivated the purchaser to pay
a higher price on account of the resultant improvement in
development prospects.
(10) The most comparable instances out of the genuine
instances have to be identified on the following
considerations:
(i) proximity from time angle,
(ii) proximity from situation angle.
(11) Having identified the instances which provide the index
of market value the price reflected therein may be taken as
the norm and the market value of the land under acquisition
may be deduced by making suitable adjustments for the
plus and minus factors vis-à-vis land under acquisition by
placing the two in juxtaposition.
(12) A balance sheet of plus and minus factors may be
drawn for this purpose and the relevant factors may be
evaluated in terms of price variation as a prudent purchaser
would do.
(13) The market value of the land under acquisition has
thereafter to be deduced by loading the price reflected in
the instance taken as norm for plus factors and unloading it
-13-for minus factors.
(14) The exercise indicated in Clauses (11) to (13) has to be
undertaken in a common sense manner as a prudent man
of the world of business would do. We may illustrate some
such illustrative (not exhaustive) factors:
Plus factors Minus factors 1. smallness of size 1. largeness
of area 2. proximity to a road 2. situation in the interior at a
distance from the road 3. frontage on a road 3. narrow strip
of land with very small frontage compared to depth 4.
nearness to developed area 4. lower level requiring the
depressed portion to be filled up 5. regular shape 5.
remoteness from developed locality 6. level vis-a -vis land
under acquisition 6. some special disadvantageous factor
which would deter a purchaser 7. special value for an owner
of an adjoining property to whom it may have some very
special advantage.”
x x x x
15. Hon’ble Supreme Court in clause -14 of para-10 of its judgment has
observed plus and minus factors for determining the market value of the
land. Further in para-11 Hon’ble Supreme Court observed that there may be
various factors which are required to be considered for determining the
market value of the land. Market value of the land depends upon the
location of land; area of land; whether the land is in a developed area or not;
whether the acquisitions of a small plot of land or the big chunk of land and
number of other advantageous and disadvantageous factors are required to
be considered. It was further observed that there cannot be the same
market value for the different lands while determining the compensation for
the land acquired under the Land Acquisition Act. In the case at hand,
appellants have not brought any evidence with respect to location of the
land and other parameters as discussed above in the decision of Hon’ble
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Supreme Court for ascertaining/determining the market value. In the said
circumstances and facts, in the opinion of this Court, learned Additional
District Judge has not committed any error in taking help of the guidelines
issued by the Registrar for ascertaining the market value of the land.
16. So far as the second ground raised in this appeal with respect to not
awarding proper and appropriate interest as provided under provision of
Section 34 of the Act of 1894 is concerned the witnesses to application
under Section 18 (2) of the Act of 1894 have made categorical statement in
the affidavit filed under Order 18 Rule 4 of CPC that possession of the land
was taken in the month of April 2002. No cross question was put before
these witnesses with respect to taking possession in the month of April 2002
and therefore the statement made under Order 18 Rule 4 of CPC with
respect to date of taking possession remains uncorroborated. In the
evidence of M.L. Sindar (DW1) Sub Divisional Officer, Dabhara has stated
that he is not in a position to state that State Govt. has taken possession of
the land in month of April 2002. However in his statement he stated that on
the land acquired work was done uptil 03.03.2003. He also stated that in
memo dated 03.03.2003 it is mentioned as to land acquired on 03.03.2003.
However in self statement he stated that the meaning of acquisition is to the
work done . He also admitted that in the memorandum, it is not specifically
mentioned as to on which date land was acquired. He stated that as per
record, possession was taken on 06.02.2003. In the evidence he stated that
agreement between the State and Contractor was executed and pursuant
thereto the Contractor has given intimation on 19.02.2003 prior to starting of
work and the agreement was executed on 06.02.2003 bearing Agreement
No.26/D.L.2002-03.
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17. From aforementioned facts and evidence of DW1 it is apparent that
after taking possession of the land, agreement was executed on 06.02.2003
between the State Govt. and Contractor. State Govt. has not submitted any
document or there is no categorical statement/evidence of witness DW1
with respect to date of taking possession of the land.
18. In para-6 of the impugned judgment /award, learned Addl. District
Judge had considered the evidence of DW1 of starting of work on
19.02.2003 and in absence of any evidence, came to conclusion that
possession was taken in the month of April 2002. Though in the cross-
appeal, finding recorded by the Court with respect to taking possession is
challenged, however, along with the cross-appeal also no document is
placed on record of taking possession of land. In absence of any evidence
brought on record by respondent to prove fact of taking possession of the
land subject matter of proceeding under Section 18 (2) of the Act of 1894
and the evidence of the appellants before the Reference Court, it cannot be
said that finding recorded by the learned Court in Reference Proceeding to
be perverse to any evidence available on record.
19. For the foregoing discussion, I do not find any good ground to interfere
with the finding recorded by learned Addl. District Judge of taking
possession of land in the month of April 2002. Submission of learned
counsel for the respondent-State and ground taken in the cross-appeal for
the afore discussion is not sustainable and it is repelled.
20. Section 34 of the Act of 1894 talks of payment of interest . Section 34
of the Act of 1894 is extracted below for ready reference:
“34. Payment of Interest – When the amount of such
-16-compensation is not paid or deposited on or before taking
possession of the land, the Collector shall pay the amount
awarded with interest thereon at the rate of [nine per
centum] per annum from the time of so taking possession
until it shall have been so paid or deposited:
[Provided that if such compensation or any part
thereof is not paid or deposited within a period of one year
from the date on which possession is taken, interest at the
rate of fifteen per centum per annum shall be payable from
the date of expiry of the said period of one year on the
amount of compensation or part thereof which has not
been paid or deposited before the date of such expiry.”
21. Perusal of the aforementioned provision would show that it provides for
interest when the amount of compensation is not paid or deposited on or
before taking possession of the land, the Collector shall pay the amount
awarded with interest thereon at the rate of nine per cent per annum from
the time so taking possession until it shall have been so paid or deposited.
Under proviso to Section 34 also further provides that if such compensation
or any part thereof is not paid or deposited within a period of one year from
the date on which possession is taken, interest at the rate of fifteen per cent
per annum shall be payable from the date of expiry of the said period of one
year on the amount of compensation.
22. Provision is very clear that the land oustee are entitled for the interest
at the rate of 9 % per annum for period of one year from the date of taking
possession of their land when compensation is not paid or deposited and
thereafter at the rate of 15% per annum.
23. The Land Acquisition Officer in its award has awarded interest at the
rate of 12 percent from 19.03.2004 till 19.10.2006. Reference Court has
awarded interest from 2nd April 2002 till 19.10.2006 at the rate of 12 per cent
and from 19.10.2006 till deposit of amount at the rate of 15 % . Addl. District
-17-
Judge has not taken into consideration the proviso to Section 34 of the Act
of 1894 which was inserted w.e.f. 24.09.1984, therefore, erred in awarding
the interest at lesser rate.
24. Hon’ble Supreme Court in case of Prem Nath Kapur and Anr. Vs.
National Fertilizers Corpn. Of India and Ors. (1996) 2 SCC 71 has
observed thus:
“12. It is clear from the scheme of the Act and the express
language used in Sections 23(1) and (2), 34 and 28 and
now Section 23(1-A) of the Act that each component is a
distinct and separate one. When compensation is
determined under Section 23(1), its quantification, though
made at different levels, the liability to pay interest thereon
arises from the date on which the quantification was so
made but, as stated earlier, it relates back to the date of
taking possession of the land till the date of deposit of
interest on such excess compensation into the court.
Equally, when the appellate court under Section 54 further
enhances the compensation, interest is payable on such
excess amount determined under Section 23(1). In other
words, the liability to pay interest arises as and when the
compensation is further enhanced and liability to pay
interest would be coterminous with the payment of the
amount under Section 34 from the date of taking
possession till date of payment or deposit or under Section
28 or Section 54 from the date of taking possession till the
date of deposit of such excess amount into the court. The
liability to pay interest is only on the excess amount of
compensation determined under Section 23(1) and not on
the amount already determined by the Land Acquisition
Officer under Section 11 and paid to the party or deposited
into the court or determined under Section 26 or Section 54
and deposited into the court or on solatium under Section
-18-23(2) and additional amount under Section 23(1-A).
13. Thus we hold that the liability to pay interest on the
amount of compensation determined under Section 23(1)
continues to subsist until it is paid to the owner or interested
person or deposited into court under Section 34 read with
Section 31. Equally, the liability to pay interest on the
excess amount of compensation determined by the Civil
Court under Section 26 over and above the compensation
determined by the Collector/Land Acquisition Officer under
Section 11 subsists until it is deposited into court. Proprio
vigore in case of further enhancement of the compensation
on appeal under Section 54 to the extent of the said
enhanced excess amount or part thereof, the liability
subsists until it is deposited into court. The liability to pay
interest ceases on the date on which the deposit into court
is made with the amount of compensation so deposited. As
held earlier, the computation of the interest should be
calculated from the date of taking possession till date of
payment or deposit in terms of Section 34 or deposit into
court in terms of Section 28, as the case may be.”
25. Hon’ble Supreme Court in the case of Major General Kapil Mehra &
Anr. Vs. Union of India & Anr. (2015) 2 SCC 262, observed thus”
“45. Award of interest under Section 34 is mandatory
inasmuch the word used in the section is “shall”. The
scheme of the Act and the express provisions thereof
establish that the interest payable under Section 34 is
statutory. The claim for interest under Section 28 of the
Act proceeds on the basis that due compensation not
having been paid, the claimant should be allowed interest
on the enhanced compensation amount. The award of
interest under Section 28 is discretionary power vested in
the court and it has to be exercised in a judicious manner
and not arbitrarily. The use of the word “may” in Section
-19-28 does not confer any arbitrary discretion on the court to
disallow interest for no valid or proper reasons. Normally,
the court awards interest if it enhances the compensation
in excess of the amount awarded by the Collector, unless
there are exceptional circumstances.
46. A Constitution Bench of this Court in Gurpreet Singh v.
Union of India [Gurpreet Singh v. Union of India, (2006) 8 SCC
457] , considering the scope of Section 34 and Section 28 of
the Act, has held as under : (SCC pp. 481-82, paras 44-45)“44. Section 34 of the Act fastens liability on the Collector
to pay interest on the amount of compensation determined
under Section 23(1) with interest from the date of taking
possession till date of payment or deposit into the court to
which reference under Section 18 would be made. On
determination of the excess amount of compensation,
Section 28 empowers the court, if it was enhancing the
compensation awarded by the Collector, to award interest
on the sum in excess of what the Collector had awarded as
compensation. The award of the court may also direct the
Collector to pay interest on such excess or part thereof
from the date on which he took possession of the land to
the date of payment of such excess into court at the rates
specified thereunder. The Court stated : (Prem Nath Kapur
v. National Fertilizers Corpn. of India Ltd. [(1996) 2 SCC 71
: 1995 Supp (5) SCR 790] , SCC p. 77, para 10)’10. … In other words, Sections 34 and 28 fasten the
liability on the State to pay interest on the amount of
compensation or on excess compensation under
Section 28 from the date of the award and decree but
the liability to pay interest on the excess amount of
compensation determined by the Court relates back to
the date of taking possession of the land to the date of
the payment of such excess “into the court”.’
45. The Court concluded : (Prem Nath Kapur case
[(1996) 2 SCC 71 : 1995 Supp (5) SCR 790] , SCC p.
-20-
78, para 12)
’12. It is clear from the scheme of the Act and the
express language used in Sections 23(1) and (2), 34
and 28 and now Section 23(1-A) of the Act that each
component is a distinct and separate one. When
compensation is determined under Section 23(1), its
quantification, though made at different levels, the
liability to pay interest thereon arises from the date on
which the quantification was so made but, as stated
earlier, it relates back to the date of taking possession
of the land till the date of deposit of interest on such
excess compensation into the court. … The liability to
pay interest is only on the excess amount of
compensation determined under Section 23(1) and not
on the amount already determined by the Land
Acquisition Officer under Section 11 and paid to the
party or deposited into the court or determined under
Section 26 or Section 54 and deposited into the court or
on solatium under Section 23(2) and additional amount
under Section 23(1-A).'”
x x x
x x x
49. When the High Court enhanced the compensation,
the High Court held that the appellants shall be paid
interest in terms of Section 28 of the Act. On the
enhanced compensation, the High Court ordered
payment of interest at the rate of 9% from 19-2-1997 to
18-2-1998 and thereafter at the rate of 15% p.a. till the
date of payment. The relevant portion of the judgment
of the High Court reads as under : (Maj. Gen. Kapil
Mehra case [Maj. Gen. Kapil Mehra v. Union of India,
(2011) 176 DLT 361] , DLT p. 379, para 40)“40. … On the enhanced market value, the
appellant shall be paid interest under Section 28 of
the Act @ 9% per annum from 19-2-1997, the date
-21-of issuance of Section 4 notification for the first year
ending on 18-2-1998 and thereafter, @ 15% per
annum till the date of tender of compensation.
Interest shall also be paid on the solatium and the
additional amount in view of the judgment of the
Supreme Court in Sunder v. Union of India [(2001) 7
SCC 211 : (2001) 93 DLT 569] .”
Since the statutory interest under Section 34 and also the
interest in terms of Section 28 of the Act had been awarded
to the appellants, we find no merit in the grievance of the
appellants as to the payment of interest.”
26. Hon’ble Supreme Court in the case of Union of India And Anr. Vs.
Pushpavathi & Ors. (2018) 3 SCC 28 has observed thus:-
“40. This Court explained the object and scope of Sections
28 and 34 succinctly in Shree Vijay Cotton & Oil Mills Ltd.
v. State of Gujarat [Shree Vijay Cotton & Oil Mills Ltd. v.
State of Gujarat, (1991) 1 SCC 262] , in the following
words: (SCC pp. 269-70, para 16)“16. There is inherent evidence in the wording of
Sections 28 and 34 to show that the framers of the Act
intended to assure the payment of interest to the person
whose land was acquired and it was not the intention to
subject the said payment to procedural hazards.
Section 34 lays down that “the Collector shall pay the
amount awarded with interest at 6 per cent per annum
…”. The legislative mandate is clear. It is a directive to
the collector to pay the interest in a given circumstance.
Section 34 nowhere says that the interest amount is to
be included in the award-decree as prepared under
Section 23(1) read with Section 26 of the Act. Similarly
Section 28 provides “the award of the court may direct
that the Collector shall pay interest”. Here also the
award under Section 23(1) read with Section 26 has
been kept distinct from the payment of interest under
the section. The interest to be paid under Section 34
and also under Section 28 is of different character than
the compensation amount under Section 23(1) of the
Act. Whereas the interest, if payable under the Act, can
be claimed at any stage of the proceedings under the
Act, the amount of compensation under Section 23(1)
-22-which is an award-decree under Section 26, is subject
to the rules of procedure and limitation. The rules of
procedure are hand-maiden of justice. The procedural
hassle cannot come in the way of substantive rights of
citizens under the Act.”
27. In the case at hand, admittedly finding recorded by learned Addl.
District Judge is that the possession of land was taken in the month of April
2002 and, therefore, appellants are entitled for the interest at the rate of 9%
per annum from April 2002 till April 2003 and since May 2003 at the rate of
15% per annum on the amount of compensation so calculated by the Court .
It is ordered accordingly.
28. So far as the ground raised in cross-appeal with respect to
maintainability of Reference Application as the Reference Application has
been filed after six months from the date of award is concerned, learned
Addl. District Judge has considered the issue in para-11 and has observed
that the applicants therein have received information with respect to award
only on 27.06.2007 and thereafter the Reference Application is filed and
from the date of its knowledge the application under Section 18 has been
held to be within the limitation. Though the objection is raised by learned
counsel for the State with respect to maintainability on the ground that it is
filed beyond period of six months as provided under Section 18 of the Act of
1894, however, there is no argument and evidence or document placed on
record by learned counsel for the State with respect to compliance of
provision under Section 12 (2) of the Act of 1894. Section 12 (2) of the Act of
1894 provides that the Collector shall give immediate notice of his award to
such of the persons interested as are not present personally or by their
representatives when the award is made.
29. In aforementioned facts of the case in absence of compliance under
-23-
Section 12 (2) of the Act of 1894, submission/ground raised by learned
counsel for the State is not sustainable and it is repelled.
30. For the foregoing discussions, appeal filed by the appellants/land
oustee are allowed in part in the above terms. Cross-appeal filed by
respondent-State is dismissed.
Sd/-/-/—/-
Sd/–
(Parth Prateem Sahu)
Judge
Praveen