State of U.P. vs Surya Lakhan and Another

Pankaj Mithal, J.—I have heard Sri Udaibhan, learned Standing Counsel for the appellant and Sri S.D. Shukla, who appears for the claimant/respondent. Sri Shukla, however, submits that he has no instructions in the matter. In this appeal u/s 54 of the Land Acquisition Act the judgment, order and award dated 28.2.1995 passed by the Xth Additional District Judge, Allahabad in L.A.R. No. 13 of 1991 has been assailed on the limited ground that the reference Court has awarded interest on compensation for the period prior to the date of notification u/s 4(1) of the Land Acquisition Act (in short ''Act'') which is not permissible in law.

The notification u/s 4(1) of the Act was issued on 7.12.1987 but admittedly and as per the findings of the reference Court possession of the land was taken over in January, 1982. The reference Court while enhancing the rate of compensation has awarded interest on it from January, 1982 for a period of one year at the rate of 9% and thereafter at the rate of 15% p.a.

The short question arising in this appeal is whether the reference Court is justified in allowing interest on compensation for the period prior to issuance of notification u/s 4(1) of the Act.

No doubt section 28 of the Act provides for awarding interest from the date of possession but the possession contemplated therein is possession in pursuance''s to the acquisition proceedings i.e. subsequent to the notification, issued u/s 4(1) of the Act which is evident from sections 9 and 16 of the Act. Any possession of the acquired land prior to the above notification would not be possession pursuant to the acquisition proceedings rather it would be unauthorized possession by the acquiring body. The land owner or the claimant would therefore be entitle to damages for the unauthorized use and occupation of his land but not the interest.

It has been settled by the Supreme Court in the case of R.L. Jain (D) by Lrs. Vs. DDA and Others, that the possession of the acquired land taken over before the issuance of the notification u/s 4(1) of the Act is not the possession under the provisions of the Act. The land owner as such, is entitle to recover possession of the land by taking appropriate legal action or is entitle to get the rent and damages for the use and occupation of the said land from the acquiring body. Therefore, where possession is taken prior to issuance of notification u/s 4(1) of the Act it is just and equitable that the Collector should also determine the rent and damages for the use and occupation of the property for the period prior to the notification.

The decision in R.L. Jain''s case (supra) has been followed by the Supreme Court in the case of Land Acquisition Officer and Assistant Commissioner and another v. Hemanagouda and others (2005) 12 SCC 443 and in Executive Engineer, Nandur, Madhameshwar Canal Vs. Vilas Eknath Jadhav and Others, .

To put it simply, under the provisions of the Act interest can only be awarded on compensation from the date of possession provided it is pursuant to the notification issued u/s 4(1) of the Act. But where the possession is taken over by the acquiring body, though unauthorizedly prior to the notification, the owner is entitle for rent and damages from the date of possession till the date of notification.

In view of the legal position that emerges the issue arising in this appeal is answered in favour of the appellant and against the claimant/respondent and it is held that the reference Court is not authorised to award interest on compensation for the period prior to acquisition even if possession of the land was taken from the claimant/respondent before the issuance of notification u/s 4 of the Act.

This Court in a similar case where possession was taken over prior to the notification u/s 4(1) of the Act and interest was awarded from the date of the possession, vide judgment and order dated 20th July, 2007 in First Appeal No. 699 of 1994 had remanded the matter to the Reference Court on the limited point for determining the compensation towards the rent and damages for the period prior to the notification.

There is no difficulty in remanding the matter for awarding damages for the unauthorised use and occupation of the land prior to the period of acquisition but the remand of the matter for the above purpose would add another round of litigation consuming sufficient time and, therefore, to cut short the litigation, I am of the view that the interest of the parties would be subserved and the equities would stand balanced if the interest on compensation awarded by the reference Court for the period prior to the notification is converted and is directed to be treated as damages for use and occupation of the said land for the said period.

Accordingly, the appeal is disposed of upholding the impugned award but directing that the interest awarded by the reference Court on compensation from January, 1982 to 7.12.1987 be treated as part of damages for use and occupation of the land and not interest on compensation. Appeal disposed of accordingly with no costs.