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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
FIRST APPEAL NO. 251 OF 2003
State of Maharashtra,
through Sub Divisional Officer and
Special Land Acquisition Officer,
Darwha, District Yavatmal. APPELLANT
VERSUS
Kailash Shiva Rangari,
aged 40 years, Occ. : Agricuturist,
R/o. Kamthwada, Tah. Darwha,
Distt. Yavatmal RESPONDENT
Smt. Bharti Dangre, Government Pleader, along with Shri Mangesh
Kadu, Assistant Government Pleader for Appellant.
Shri P.V. Thakre, Advocate, for RespondentClaimant
Shri M.M.Agnihotri, Advocate for Claimants in similar matters
CORAM: B.P. DHARMADHIKARI,
R.K. DESHPANDE, &
P.N. DESHMUKH, JJ.
DATE OF RESERVING THE JUDGMENT : 2832016
DATE OF PRONOUCNING THE JUDGMENT : 1842016
JUDGMENT (Per R.K. DESHPANDE, J.) :
Rs.50,000/ per hectare for the land acquired, and Rs.10,000/ for well.
paid additional component on the amount of enhanced compensation at
the rate of twelve per centum per annum from the date of the
possession, i.e. from July, 1985, till the date of the award, i.e. 1691995.
The learned Single Judge (Shri Z.A. Haq, J.) has rejected all the
compensation for the well.
annum on the amount of enhanced compensation of the land, for the
first year from July, 1985 to June, 1986, and thereafter, at the rate of
fifteen per centum per annum from July, 1986 till the date of its
realization.
3. The undisputed factual position is that the possession of the
land under acquisition was taken by the Government in the month of
July, 1985 and the notification under Section 4(1) of the Land
Acquisition Act was issued on 1691993. The award was passed on
acquisition is prior in point of time and it is followed by a notification
under Section 4(1), declaration under Section 6, and the award under
Section 11 of the said Act.
4. The Division Bench of this Court (Smt. Vasanti A. Naik &
2012(4) Mh.L.J. 742, after following the decision of the Apex Court in
the case of R.L. Jain (D) By LRs. v. DDA and others, reported in
(2004) 4 SCC 79, that the interest under Section 28 or 34 of the Land
Acquisition Act shall be payable from the date of the award, if the
notification under Section 4(1) of the said Act. This decision was relied
appellantState to urge that the direction issued by the Reference Court
in the present case to pay the interest at the rate of nine and fifteen
per centum per annum from the date of taking over possession of the
land in the month of July, 1985, is contrary to the law laid down by this
Court.
5. The learned Single Judge (Shri Z.A. Haq, J.) has expressed
delivered by the Division Bench of this Court in Lalitkumar Shah's case,
Bhaskar Namdeo Wagh and others, reported in 2009(1) Mh.L.J. 299, and
the decision of the Apex Court in the case of Special Land Acquisition
were not brought to the notice of the Division Bench of this Court. The
learned Single Judge has, therefore, referred the following questions of
law for determination by the Larger Bench :
In order to decide this reference, the entire scheme of the
Land Acquisition Act, 1894 (hereinafter referred to as "the said Act) will
have to be seen.
6. The Land Acquisition Act is a complete Code as has been
rightly urged by Smt. Bharti Dangre, the learned Government Pleader,
making the provisions for acquiring title over the land, taking possession
publication of preliminary notification under Section 4(1) of the said Act,
which provides that whenever it appears to the appropriate Government
that the land in any locality is needed or is likely to be needed for any
purpose or for a company, a notification to that effect shall be published
in the Official Gazette and in two daily newspapers circulating in that
locality and the Collector shall cause public notice of the substance of
Subsection (2) provides that, thereupon it shall be lawful for any officer,
behalf, and for his servants and workmen, to enter upon and survey and
take levels of any land in such locality; to dig or bore in the subsoil; to
do all other acts necessary to ascertain whether the land is adapted for
such purpose etc.
proposed acquisition as contemplated by Section 5A of the said Act, if
the Government is satisfied that the land is needed for public purposes or
Section 6 of the said Act to be published in the Official Gazette and two
declaration has to be given in the locality. Thereafter, the Collector is
required to issue notice under Section 9(1) of the said Act to the persons
interested, stating that the Government intends to take possession of the
land, and that claims to compensation for all interests in such land may
Collector of the compensation which should be allowed for the land.
8. Section 16 provides that where the Collector has made an
award under Section 11, he may take possession of the land, which shall
encumbrances. Section 17 provides that in cases of urgency, whenever
award has been made, may, on the expiry of 15 days from the
publication of notice mentioned in Section 9(1), take possession of any
absolutely in the Government, free from all encumbrances. In view of
subsection (3A) of Section 17, the Collector has to tender 80% of the
thereto, before taking over the possession.
9. Section 34 of the said Act with which the present matter is
concerned, deals with the payment of interest and the same is
reproduced below :
"34. 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:
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."
The aforesaid provision contemplates that when the amount
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. In
terms of proviso, if the amount is not paid or deposited within a period
of one year from the date on which the possession is taken, the 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
before the date of such expiry.
10. The right to acquire, hold and dispose of the property has
ceased to be a fundamental right under the Constitution of India, but it
continues to be a legal or constitutional right, viz. that no person can be
deprived of his property save and except by and in accordance with law.
Article 300A as well as Article 31A of the Constitution of India contain
a power of eminent domain to appropriate the private property, which
should satisfy two tests (i) the acquisition is for public purpose, and (ii)
the payment of adequate compensation, which should not be less than
the market value of the land. The Legislature can deprive a person of his
property only in the manner and authority provided by law.
compulsorily acquire the land by extinguishing the rights therein of the
persons or the owners. Except the provision of Section 17 of the said
Act, the land proposed to be acquired under the provisions of the Land
compensation becomes due and payable upon making of an award and
entitlement to take possession becomes coterminus with the deposit or
cannot be taken.
12. Under Section 17 of the urgency clause, it is not necessary
to wait for making of an award under Section 11 of the said Act to take
possession of the land, but the essential conditions for taking possession
of the land are that (i) the notice mentioned under Section 9(1) is
given, (ii) the period of fifteen days from the date of publication of such
notice has expired, (iii) at the time of taking possession, offer of
payment of compensation is given to the persons for the standing crops
and trees (if any) on such land and for other damages sustained by them
because of sudden dispossession, and (iv) before taking possession of
land, tender payment of eighty per centum of the compensation for such
land, as estimated by him to the persons entitled thereto in terms of
clause (a) of subsection (3A) of Section 17 of the said Act. It is only
upon fulfillment of such conditions, if the possession is taken, the title of
the land stands vested in the Government free from all encumbrances. In
terms of Section 17 also, the eighty per centum of the compensation
becomes due and payable before taking possession and the entitlement
compensation determined under clause (a) of subsection (3A) therein.
13. Taking over the possession of the land by the Collector, is
Government under the provisions of the said Act and it is, therefore, of a
great significance. The proceedings commenced for acquisition of land
upon issuing notification under Section 4(1) of the said Act can be
Government. Once the land vests in the Government, it is not even
possible to withdraw it from acquisition. For vesting of title, the manner
deemed vesting of land in the Government as has been canvassed by
S/Shri Agnihotri and Thakre, the learned counsel for the claimants,
cannot be imported upon publication of notification under Section 4(1)
of the said Act, if the possession of the land taken by the Collector
dehors the provisions of the Act, continues with him upon issuance of
proceedings dehors the provisions of the Act will not confer or vest the
Section 4(1) of the said Act is issued and the proceedings for acquisition
of the land have commenced.
Section 17 of the said Act is not paid or deposited or it is belatedly paid
or deposited. To take care of such situation, the provision of Section 34
has been introduced for the benefit of the owner of the land. It operates
from the date on which the amount of compensation becomes due and
payable on the date of passing of an award under Section 11 or in terms
of clause (a) of subsection (3A) of Section 17 of the said Act before
under Section 16 or 17 of the said Act till the deposit or payment of the
entire amount as determined under Section 11 of the said Act. This is
the period covered by the interest payable. It is an amount which is
statutorily required to be paid at the specified rates in addition to the
amount of compensation which becomes due and payable on the date of
making of an award under Section 11 or before taking possession of the
land under Section 17 of the said Act. Except Section 34, there is no
other provision in the said Act, to cover the aspect of payment of interest
for such period.
AIR 1964 SC 1878, the question considered was whether interest paid
under Section 34 of Land Acquisition Act, 1894, is of the nature of a
capital receipt or of a revenue receipt. After quoting Section 34 of the
said Act, the Apex Court holds that the interest shall be paid on the
amount awarded, from the time the Collector takes possession until the
amount is paid or deposited. It holds that the interest pertains to the
domain of payment after the compensation has been ascertained and it
is a consideration paid either for the use of money or for forbearance
from demanding it after it has fallen due. In para 9 of the said decision,
compensation paid to the owner for depriving him of his right to
possession of the land acquired, but that given to him for deprivation of
acquired. In para 10, the Apex Court holds that as soon as the Collector
has taken possession of the land either before or after the award, the
title absolutely vests in the Government and thereafter the owner of the
land so acquired, ceases to have any title or right of possession to the
land acquired. It holds that under the award, the owner gets
compensation for both the rights and therefore, the interest awarded
under Section 28 of the Act, just like under Section 34 thereof, cannot
possession, but only compensation payable by the State for keeping back
the amount payable to the owner. It is thus the amount payable under
become payable to the owner before taking possession of the land.
16. On the basis of the Division Bench judgment of this Court in
respondentclaimant that the respondentclaimant would be entitled to
interest as per Section 34 of the Land Acquisition Act from the date of
publication of notification under Section 4(1), once it is found that the
possession of the land was taken prior to issuance of the notification
under Section 4 of the said Act. Both the decisions relied upon by the
Hence, the basic question is about the ratio laid down by the
Apex Court in R.L. Jain's case. Therefore, the facts of that case will have
to be understood along with the principles of law laid down in the said
decision.
supra, the question considered was whether in a case where possession
is taken prior to issuance of notification under Section 4(1) of the said
Act, the claimant (owner of the land) is entitled to interest for such
anterior period in accordance with Section 34 of the said Act. The facts
notification under Section 4(1) of the Land Acquisition Act was issued.
After issuance of such notification, appellant R.L. Jain purchased the
favour on 3181961. On 11101961, the possession was taken over by
the State Authorities pursuance to the notification under Section 6 of the
Land Acquisition Act. The award was passed on 30121961 and the
claimant received the amount of compensation under protest. In Suit
No.154 of 1965 filed by the claimant, the proceedings for acquisition of
land were set aside on 1241967. The High Court dismissed the appeal
on 1481991, and during the pendency of the Special Leave to Appeal
before the Apex Court, a fresh notification was issued under Section 4(1)
of the said Act on 991992. The notification under Section 6 of the said
Act was issued on 891993, and the award was passed on 1161994. In
this background, the question involved was whether the claimant was
entitled to interest under Section 34 of the said Act from the date of
taking over possession of the land on 11101961 or passing of the award
on 1161994.
18. The Apex Court has held in R.L. Jain's case that the scheme
of the Act does not contemplate taking over of possession prior to the
issuance of notification under Section 4(1) of the Act and if possession is
reason, it is held that both Sections 11(1) and 23(1) enjoin the
determination of the market value of the land on the date of publication
of notification under Section 4(1) of the Act for the purpose of
acquired under the Act. It holds that these provisions show in
unmistakable terms that publication of notification under Section 4(1) is
the sine qua non for any proceedings under the Act.
19. In para 12 of the decision in R.L. Jain's case, the Apex Court
has made reference to the heading “Acquisition” of Part II of the Act and
subheading “Taking Possession”, which contains Sections 16 and 17 of
the Act. The Apex Court has construed the words “so taking possession”
to mean taking possession in accordance with Section 16 or 17 of the
Act. The Court has noted that these are the only two sections in the Act
acquired land. It holds that clearly, the stage for taking possession under
the aforesaid provisions would be reached only after publication of the
notification under Sections 4(1) and 9(1) of the Act. The Court further
consequently cannot be recognized for the purposes of the Act. It further
holds that for parity of reasons, the words “from the date on which he
took possession of the land” occurring in Section 28 of the Act would
Section 16 or 17 of the Act. The words “so taking possession” can under
Section 4(1) of the Act which is dehors the provisions of the Act.
20. Paras 18 and 19 of the said decision in R.L. Jain's case, being
relevant, are also reproduced below :
“18. In a case where the landowner is dispossessed prior
to the issuance of preliminary notification under Section
4(1) of the Act the Government merely takes possession of
the land but the title thereof continues to vest with the
landowner. It is fully open for the landowner to recover the
possession of his land by taking appropriate legal
proceedings. He is therefore only entitled to get rent or
damages for use and occupation for the period the
Government retains possession of the property. Where
possession is taken prior to the issuance of the preliminary
notification, in our opinion, it will be just and equitable
that the Collector may also determine the rent or damages
for use of the property to which the landowner is entitled
while determining the compensation amount payable to
the landowner for the acquisition of the property. The
provisions of Section 48 of the Act lend support to such a
course of action. For delayed payment of such amount
appropriate interest at prevailing bank rate may be
awarded.”
him. Learned counsel for the respondent has placed before
the Court a copy of the sale certificate issued in favour of
R.L. Jain on 3181961 which shows that the plot was
purchased by him for Rs.3200 only and thus he had
received almost double amount of compensation.
Therefore, even on equitable ground he is not entitled to
any amount from the date of dispossession till the date of
second notification under Section 4(1) of the Act which
was issued in 1992.”
It is thus clearly a law laid down by the Apex Court that in
notification under Section 4(1) of the said Act, the title thereof
continues to vest with the landowner and it is open for him to recover
such possession and can claim rent and damages for use and occupation
for the period for which the Government has retained the possession.
The Apex Court has rejected the claim for interest under Section 34 of
the said Act for the period anterior to the issuance of notification under
Section 4(1) of the said Act, in a case where possession was taken prior
to the issuance of the notification under Section 4(1) therein.
case, cited supra, the possession of the land was taken on
hardly a month before issuance of the notification under Section 4 of the
said Act. After referring to the decision of the Apex Court in R.L. Jain's
case, cited supra, it has been held in para 5 as under :
The Division Bench of this Court has held that the period
involved in the present case is of about one month and hence, it has
hardly any impact while determining the market value. The Division
payment of sum by way of interest for a period of about one month prior
to the issuance of notification under Section 4(1), as in our opinion, the
said amount would represent the rent and/or damages, which the
claimants would be entitled to.
22. In the subsequent decision of the Apex Court, delivered by
R.L. Jain's case, cited supra, has been referred to, and it is held in
para 101 as under :
“101. As is evident from the above dictum of the Court,
despite dispossession, the title continues to vest in the
landowners and it is open for the landowners to take
action in accordance with law. Once notification under
Section 4(1) of the Act has been issued and the acquisition
proceedings culminated into an award in terms of Section
11, then alone the land vests in the State free of any
encumbrance or restriction in terms of provisions of
Section 16 of the Act. The court, in situations where
possessions have been taken prior to issuance of
notification under Section 4(1) of the Act, can direct the
Collector to examine the extent of rent or damage that the
It is held by the Apex Court that the legal position is no
more open to controversy in view of the decision of the Apex Court in
decision, the Apex Court accepted the contention of the appellantState
that the Reference Court as well as the High Court could not have
granted any interest under the provisions of the Act for a date anterior
following the dictum in R.L. Jain's case, the Apex Court directed the
Collector to examine the question of payment of rent and damages to
the claimants, from the period when their respective lands were
submerged under the backwater of the river, till the date of issuance of
the notification under Section 4(1) of the Act, from which date, they
compensation.
23. The ratio of the decision in R.L. Jain's case is clear and
unambiguous in construing the words “so taking possession” employed
under Section 16 or 17 of the said Act to mean that taking possession
only in accordance with Section 16 or 17, which can only be after the
issuance of the notifications under Sections 4(1) and 9(1) of the said
Act. Till such possession is taken, the title thereof continues to vest in
the landowner and it is open for him to claim rent and damages for use
and occupation for the period from which the Government has retained
the possession. Taking possession of the land under acquisition prior to
the stage for taking possession under the provision of Section 16 or 17 is
held to be without authority of law and cannot be recognized for the
purposes of the Act. In the another decision of the Apex Court in case of
Lila Ghosh vrs. State of West Bengal, reported in (2004) 9 SCC 337, it is
held that it is only in case of possession under Section 17 of the said Act,
the payment of interest shall start running from the date of possession.
24. In our view, the Apex Court in its decision in R.L. Jain's case,
cited supra, did not consider the question as to whether the interest
under Section 34 of the said Act can be awarded from the date of
notification under Section 4(1) of the said Act, in a case where the
Section 4(1) of the said Act. Similarly, neither the decision of the
Division Bench of this Court in Bhaskar Wagh's case, nor the decision of
the Apex Court in Karigowda's case, cited supra, lay down the ratio that
if the possession is taken before the notification under Section 4(1) of
the Land Acquisition Act is published and/or before the award is passed,
the landowner would be entitled to interest as per Section 34 of the
Section 4(1) of the said Act. In none of these decisions, such question
was raised and decided. Before us, the position of law that if the
possession is taken after an award is made under Section 11, then the
interest under Section 34 of the said Act shall start running from the
date of award is not disputed and this is the position of law explained by
reported in 2008 (1) BCR 839, with which we agree.
25. In Karigowda's case, cited supra, the Apex Court directed the
Collector to examine the question of payment of rent/damages to the
claimants from the period when their respective lands were submerged
under the backwater of the river, till the date of issuance of the
notification under Section 4(1) of the said Act. In the decision of the
Division Bench of this Court in Bhaskar Wagh's case, the Court has
avoided to adjudicate the question of payment of interest for the period
prior to the date of issuance of notification, where the possession was
already taken over, for the reason that it was only a short period of one
Mrs.Bharti Dangre, the learned Government Pleader, we do not find that
these decisions even if had been considered, would have had any impact
on the decision of the Division Bench of this Court in Lalitkumar Shah's
case, cited supra, which holds, in the circumstances, that the interest in
terms of Section 34 of the said Act shall be payable from the date of
award.
26. No doubt, in Karigowda's case, the TwoJudge Bench of the
Apex Court, after expressing its full agreement with the ratio of the
question of payment of rent/damages to the claimants, and it is held
that from the date of the notification under Section 4(1) of the said Act,
enhanced compensation. Shri Thakre and Shri Agnihotri arguing for
the claimants have placed heavy reliance on this observation to urge that
the interest under Section 34 is the statutory benefit which is payable on
the enhanced compensation.
cannot be construed to include the amount of interest payable under
Section 34 of the said Act. As has been held by the Apex Court in the
decision in the case of Dr. Shamlal Narula, the interest payable under
Section 34 is not the compensation paid to the owner for depriving him
of his right to possession of the land, but that is given to him for
deprivation of the use of money representing the compensation of the
compensation determined under Section 11 or in terms of clause (a) of
subsection (3A) of Section 17 of the said Act, has not been paid or
payable on account of enhancement of compensation which is covered
by Section 28 of the said Act.
relied upon Section 23(1A) of the said Act, which is reproduced below :
Explanation. In computing the period referred to in
this subsection, 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.”
It is urged that the aforesaid provision deals with the
per centum per annum of the market value of the land for the period
notification under Section 4, subsection (1), in respect of such land
to the date of award of the Collector or the date of taking possession
of the land, whichever is earlier. It is further urged that Section 34 of
same area, which is covered by the provision of subsection (1A) of
Section 23, reproduced above.
29. In terms of the decision of the Apex Court in the case of
Siddappa Vasappa Kuri and another v. Special Land Acquisition Officer
additional compensation under Section 23(1A) of the said Act at the
rate of twelve per centum per annum on the market value of the land
point for the purpose is either the date of the award or the date of
taking possession, whichever is earlier. The interest payable under
Section 34 of the said Act is in the case where the possession is taken
under Section 17 of the said Act, but the compensation determined
Section 11 of the said Act has not been paid or deposited on the date
when it became due and payable. As such, Section 34 of the said Act
operates only from the date on which the compensation determined
becomes due and payable. As against this, the additional component
under Section 23(1A) becomes payable on the date of publication of
the notification under Section 4(1) of the said Act, or from the date
of taking possession of the land, whichever event occurs earlier.
30. In view of above, there is no question of overlapping the
benefits available to the claimants under Section 23(1A) or Section
34 of the said Act. The terminal point under Section 23(1A) is
passing of the award or taking of possession; both terminating on the
date of payment or deposit in Court pursuant to the award passed
under Section 11 of the said Act.
31. If the landowner is divested the possession of his land
possession and claim rent and damages for the use and occupation
for the period for which the State Government has illegally retained
the possession of the land. To take care of such situation, certain
administrative circulars have been issued by the State Government
for payment of rental compensation, in accordance with which the
claimants are paid for the period for which they are deprived of the
Section 4(1) of the said Act. We are not concerned in this matter
provisions of the Act.
Acquisition Act and the ratio of the decisions of the Apex Court in the
cases of R.L. Jain and Lila Ghosh, cited supra, the position of law can
be summarized as under :
(i) If the possession of the land under acquisition is taken
under Section 16 of the said Act i.e. after an award is
made by the Collector under Section 11 therein, the
interest would be payable under Section 34 from the
date of passing of the award and we are in agreement
with such a view expressed by the Division Bench of
this Court (S/Shri N.V.. Dabholkar and M.G. Gaikwad,
2008 (1) BCR 839.
(ii) The interest as provided under Section 34 of the said
exercise of his powers under Section 17 of the said
Act which would obviously be after issuance of notice
under Section 9(1) of the said Act. If the possession
is taken under Section 17, the interest payable under
Section 34 of the said Act shall start running from the
date of possession and not from the date of award.
(iii) Where the possession of the land under acquisition is
invoking the urgency clause under Section 17 of the
said Act and the interest under Section 34 shall start
running from the date of passing of the award.
(iv) The starting point for the purposes of calculating the
Section 23(1A) of the said Act at the rate of twelve
per centum per annum is the date of publication of
the notification under Section 4 of the said Act, and
the terminal point is either the date of the award or
the date of taking possession, whichever is earlier.
(v) We hold that in none of the eventualities, the claimant
shall be entitled to interest under Section 34 of the
notification under Section 4(1) of the said Act.
Section 23(1A) and Section 34 of the said Act. The
terminal points under Section 23(1A) are the starting
points under Section 34 of the said Act and both the
provisions operate in different fields.
(vii) We express our full agreement with the view taken by
the Division Bench of this Court in Lalitkumar Shah's
case, cited supra, that in a case where possession is
Section 34 shall start running from the date of award
only.
of the Division Bench in the case of Jafarali Mithabhai
Hirani & Ors. v. State of Maharashtra & Ors., reported
in other matters is no longer a good law.
33. In view of above, we answer the question of reference as
under :
(a) If the possession is taken before the notification
award under Section 11 of the said Act, except in cases
Section 17 of the said Act, and in that situation only, the
operating from the date of possession.
(b) We also hold that the decision of the Division
Bench of this Court in the case of Lalitkumar Himmatlal
reconsideration.
34. In view of above, the Office to place the matter before
the learned Single Judge for decision in accordance with the answer
to the question given as above.
(P.N. Deshmukh) (R.K. Deshpande) (B.P. Dharmadhikari)
JUDGE JUDGE JUDGE
Rvjalit