Union of India (UOI) vs Pushpavathi and Others

S.J. Mukhopadhaya, J.—All these appeals have been preferred against the common order dated 13.4.1999 made in W.P. Nos. 5486 to

5494 of 1999 and the order dated 13.7.1999 made in W.P. No. 11806 of 1999. They arise out of common Land Acquisition Proceedings and as

common question of law is involved thereon, all these appeals are taken together in dispose of by this common judgment.

The Land Acquisition Proceedings was initiated by the appellants. Notification u/s 4(1) of the Land Acquisition Act, 1894 (hereinafter referred

to as ''the Act'' 1894) was issued on 22.12.1986. Declaration u/s 6 of the Act was issued on 12.3.1987. Amount was awarded on 01.06.1987

under Award No. 2/1987 and compensation was paid at the rate of Rs. 318/- per Are. One Govindammal being not satisfied with the quantum of

compensation awarded by the Land Acquisition Officer, moved u/s 18 of the Act, in L.A.O.P. No. 337 of 1988 and the Reference Court

enhanced the compensation and awarded Rs. 1000/- per Kuzhi (Rs. 1868/- per Are) on 09.05.1989. Having come to know, the

Respondents/Land owners preferred application u/s 28A of the Act, on 08.08.1991 for redetermination of amount of compensation on the basis

of the award of the Court in L.A.O.P. No. 337 of 1988. All the applications filed by the Respondents/Land owners on 08.08.1991 were followed

by the enquiry made on 05.06.1992. However, the applications u/s 28A of the Act have not been disposed of about 7 years, the

Respondents/Land owners filed writ petitions in W.P. Nos. 10649 of 1996 etc. Those writ petitions were allowed on 19.8.1998 directing the

Respondents therein to dispose of the representations. Pursuant to which, the Collector redetermined the compensation and awarded

compensation enhancing the amount. The orders were passed between 15.11.1994 and 22.11.1994.

After redetermination of the amount of compensation the land owners preferred representation for payment of interest. The representation for

interest was rejected by the appellants by similar proceedings dated 14.12.1998.

The aforesaid orders were challenged by the Respondents/land owners in writ petitions in which the appellants raised the question of

maintainability of the writ petitions and taken a plea that the Respondents/writ petitioners should have moved before a civil Court u/s 18 of the Act.

The learned Government Advocate appearing on behalf of the Union Territory of Pondicherry has submitted that in a case of Land Acquisition

Proceedings this Court has no jurisdiction under Article 226 of the Constitution of India to direct the authorities to pay interest. There is no scope

for such direction to pay interest in a manner not contemplated either u/s 28 or u/s 34 of the Act. She placed reliance of the Supreme Court of

India in D.D.A. v. Mahender Singh and Anr. 2009 SAR (Civil) 439. He also placed reliance on the reasoning shown in the impugned order dated

14th Dec., 1998, relevant portion of which is quoted hereunder:

i. The relief sought for in the above said Writ Petition is totally misconceived and it is outside the scope and ambit of jurisdictionof the Hon''ble

High Court under Article 226 of the Constitution of India inasmuch as the Petitioner herein has filed the above Writ Petition for awarding of interest

on the compensation amount granted to the Petitioner in the award passed u/s 28-A of the Land Acquisition Act.

ii. The Proceedings contemplated u/s 28-A of the L.A. Act in the matter of redetermination of the compensation by the L.A.O. and on the basis of

the Civil Court Award passed in respect of the proceedings initiated under this Act and in which the Petitioner has not filed any petitions u/s 18 of

the L.A. Act. Section 28-A is a code by itself and the remedy, if any, to be availed of under the Land Acquisition Act is to be pursued in the

manner as indicated u/s 28-A of the Land Acquisition Act and not otherwise. The Petitioner herein is aggrieved of award passed by u/s 28-A(2) of

the Land Acquisition Act and the Petitioner is dissatisfied to the quantum of compensation awarded in the award passed by the Land Acquisition

Act in the proceedings Act. In the event of being not satisfied with the award passed by the Land Acquisition Officer u/s 28-A(2) of the Land

Acquisition Act, the only proper course open to the Petitioner is to seek reference to Civil Court for adjudication of the claim of the Petitioner in

terms of Section 28-A(3) of the Land Acquisition Act. The concerned Civil Court will alone have jurisdiction to go into the correctness and legality

of the award passed by the Land Acquisition Officer u/s 28-A(2) of the Land Acquisition Act in exercise of the jurisdiction vested under the Civil

Court u/s 18.

iii....

iv. The Petitioner herein has relied on Section 34 of the Land Acquisition Act for the relief prayed for in the said Writ Petition. This Section 34 of

the Land Acquisition Act is not applicable to the case of the Petitioner inasmuch as Section 34 deals with the situation of compensation not having

been paid or deposited on or before taking possession of the land. The facts and situation in this case are quiet otherwise. The Land Acquisition

Officer has passed Award No. 2/87 dated 01.06.1987. The lands were taken possession by Government on 25.05.1987 as per mandate of

Section 34 of the Land Acquisition Act. The entire amount was paid and there was no breach of mandatory Section 34 of the Land Acquisition

Act.

Per contra, according to the learned Counsel appearing on behalf of the Respondents/Petitioners it was incumbent on the part of the Collector

to pass orders for interest u/s 34 of the Act. Once the conditions u/s 34 of the Act is satisfied the award of interest is consequential and automatic.

He placed reliance upon the decision of the Supreme Court in Shree Vijay Cotton and Oil Mills Ltd. Vs. State of Gujarat, .

We heard the learned Counsel for the parties and noticed their rival contentions and perused the records.

To determine the issue, it is desirable to notice the relevant provisions as discussed hereunder:

Section 18 do not stipulate reference for claim of interest as evident from Section 18, relevant portion of which is quoted hereunder:

Reference to Court � (1) Any person interested who has not accepted the award may, by written application to the Collector, require that

the matter be referred by the Collector for determination of the Court, whether his objection be to the measurement of the land, the amount of the

compensation, the persons to whom it is payable, or the apportionment of the compensation among the persons interested.

From the aforesaid provision, it will be evident that a person can file application u/s 18 only with regard to the following objections:

i) with regard to measurement;

ii) compensation;

iii) person to whom it is payable;

iv) apportionment compensation.

Such application can be determined by Civil Court of competent jurisdiction by following the procedure u/s 19 to 26 of the Act.

u/s 28, if the Court is of the opinion that the Collector ought to have awarded compensation in excess of the sum of which the Collector has to

award compensation, it may direct the Collector to pay interest on such excess at the rate prescribed u/s 28 and quoted hereunder:

Collector may be directed to pay interest on excess compensation � If the sum which, in the opinion of the Court, the Collector ought to

have awarded as compensation is in excess of the sum which the Collector did award as compensation, the award of the Court may direct that the

Collector shall pay interest on such excess at the rate of nine per centum per annum from the date on which he took possession of the land to the

date of payment of such excess into Court.

The other provision to claim and pay interest is Section 34, which Collector is supposed to decide in the circumstances mentioned therein and

quoted hereunder:

Payment of interest � When the amount of such 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.

Section 28-A relates to redetermination of amount of compensation on the basis of award of the Court, where the award under Part-III is

allowed by Court and similarly situated persons apply for the same. Under Sub-section (2) of Section 28-A, while procedure for redetermination

of compensation is prescribed, under Sub-section (3) of Section 28-A, if a person do not accept the award (on redetermination u/s 28-A (1) and

(2)), then he may file application before the Collector for reference for determination by Court and only in such case, provisions of Sections 18 to

28 shall apply on such reference.

From a plain reading of Section 28-A, it will be evident that Section 28-A only relates to redetermination of compensation and objection for

reference can be filed only with regard to the award of redetermination of such compensation and not with regard to the interest.

The provisions of Section 28-A fell for consideration before the Supreme Court in Union of India and another Vs. Pradeep Kumari and

others, , the Court held that the Collector can award interest on the additional amount of compensation awarded by him and observed as follows:

It is no doubt true that u/s 28 only the court can direct payment of interest on the excess amount awarded as compensation and the Collector is not

competent to award interest on the additional amount of compensation under the said provision. But a reading of Section 28A shows that after an

application has been submitted u/s 28-A(i) for re-determination of the amount of compensation the process of such re-determination results in

making of an award by the Collector and a person not accepting the said award can move the Collector to refer the matter to the court for

determination and such reference is governed by Sections 18 to 28. If that is so Section 34 of the Act would be applicable to the award that is

made by the Collector under Sub-section (2) of Section 28-A and it would be permissible for him to award interest u/s 34 on the additional

amount of compensation awarded by him.

In Shree Vijay Cotton and Oil Mills Ltd. Vs. State of Gujarat, the Supreme Court having noticed the provisions of Section 28 and 34

observed as follows:

There is no dispute that under the Act the claimant is entitled to compensation at the rate of the market value of the land on the date of notification

u/s 4 of the Act. Section 23(1) of the Act enumerates the matters which are to be taken into consideration in determining the compensation. On a

reference u/s 18 of the Act the parties go to trial before the court primarily on the issue of determination of market value of the land. So far as

award of interest is concerned it is never an issue between the parties. Once the conditions u/s 28 or Section 34 of the Act are satisfied the award

of interest is consequential and automatic.

The High Court while appreciating the point in issue did not consider the mandatory provisions of Section 34 of the Act. The said Section

specifically provides that when the amount of compensation is not paid on or before taking possession of the land the Collector shall pay interest at

6 per cent per annum from the date of taking over possession. The payment of interest is not dependent on any claim by the person whose land

has been acquired. There can be no controversy or any lis between the parties regarding payment of interest. When once the provision of Section

34 are attracted it is obligatory for the Collector to pay the interest. If he fails to do so the same can be claimed from the court in proceedings u/s

18 of the Act or even from the appellate court/courts thereafter.

In Union of India (UOI) Vs. Budh Singh and Others, , the Supreme Court had occasioned to deal with Sections 28 and 34 of the Act and it

was observed that these were the only provisions which deal with the payment of interest to the land owners. The Court observed:

Thus, it could be seen that the statute covers the entire field of operation of the liability of the State to make payment of interest and entitlement

thereof by the owner when land has been taken over and possession in consequence thereof, the land owner was deprived of the enjoyment

thereof. Thus, it could be seen that the Court has no power to impose any condition to pay interest in excess of the rate and manner prescribed by

the statute as well as for a period anterior to the publication of Section 4(1) notification under this Act.

In D.D.A. v. Mahender Singh and Anr. (supra) 2009 SAR (Civil) 439, similar view was expressed by the Court.

From the provisions of law and observation as made by Supreme Court and noticed above, we hold as follows:

(i) No independent petition for claim of interest is maintainable u/s 18 of the Act, if person otherwise has no objection either with regard to

measurement of land or amount of compensation or person to whom it is payable or apportionment amongst persons interested.

(ii) Similarly, no independent petition for interest could be filed for reference under Sub-section (3) of Section 28-A, if person concerned has no

objection with regard to compensation as redetermined by Collector under Sub-section (2) of Section 28-A of the Act.

(iii) The only provisions for payment of interest are under Sections 28 and 34 of the Act. u/s 28 the Court is empowered to order to pay interest

on excess amount of compensation if any determined in a petition u/s 18 of the Act.

iv) u/s 34 the Collector is empowered to order to pay interest on the amount awarded, if amount not paid or deposited on or before taking

possession of the land.

v) The Collector is also empowered u/s 28-A of the Act to pass order to pay interest in terms of Section 34 of the Act on the re-determined

award, on the excess amount of compensation which was not paid or deposited before the date of possession.

So far as the present case is concerned, it is not in dispute that the Collector has re-determined the award and enhanced it u/s 28-A of the Act

by orders passed in between 15.11.1994 and 22.11.1994. The Respondents applied for interest u/s 34 of the Act. They being entitled for the

same and such claim having rejected by the authority, learned single Judge rightly held the said order is illegal.

In the present case though we may not agree with the reasonings shown by learned single Judge or observations made at paragraph 15 of the

impugned order dated 14.12.1998, but in view of our finding as recorded above that the petitioners are entitled for interest as per Section 34 of

the Act on the excess amount of compensation determined in their favour, we are not inclined to interfere with the order passed by the learned

single Judge.

There being no merit, all these writ appeals are accordingly dismissed. Consequently, connected miscellaneous petitions are also dismissed.

But in the facts and circumstances, there shall be no order as to costs.