IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)
Decided On: 10.05.2012
Appellants: Lalitkumar Himmatlal Shah,
Vs.
Respondent:The State of Maharashtra,
Vs.
Respondent:
Hon'ble Judges/Coram:
Smt.V.A. Naik and P.B. Varale , JJ.
Smt.
1. Whether a person would be entitled to grant of interest under Section 34 of the Land Acquisition Act from the date of his dispossession if the dispossession is prior to the issuance of Section 4 notification and if not what would be the relevant date for claiming interest is the question that arises for consideration in these writ petitions. Since a common issue is involved in these writ petitions, they are heard together and are decided by this common judgment.
2. Rule. Rule is made returnable forthwith. Heard finally by the consent of the parties.
3 The relevant facts for deciding the issue involved in these petitions are brief. The possession of land belonging to each of the petitioners was acquired by the State of Maharashtra for the purpose of construction of flood prevention wall on 15.01.1997. The Section 4 notification was issued on 20.01.2005 and the award was passed by the Land Acquisition Officer on 05.02.2008. The compensation was determined under the provisions of Section 23 of the Act. The petitioners were also granted 8% rental compensation in pursuance of the government resolutions issued from time to time as the lands were acquired before the issuance of the Section 4 notification.. Since the petitioners were not granted interest on the compensation under the provisions of Section 34 of the Land Acquisition Act, the petitioners have filed the present petitions.
4. It was the case of the petitioners that in view of the provisions of Section 34 of the Land Acquisition Act, it was necessary for the Land Acquisition Officer to have granted interest under Section 34 of the Act to the petitioners from the date of dispossession and the Land Acquisition Officer has committed a serious error in not granting the same. The learned Counsel for the petitioners relied on the judgment in the case of Jafarali Mithabhai Hirani and others.v. State of Maharashtra and others (reported in 2009(3) ALL MR, 779 ), wherein, in similar set of facts, this Court had granted interest on the compensation under Section 34 of the Act from the date of dispossession.
5. On the previous date of hearing, it was pointed out to this Court by the learned Assistant Government Pleader that the judgment in the case of Jafarali Mithabhai Hirani and others.v. State of Maharashtra and others cannot be helpful for seeking interest under Section 34 of the Act as the Division Bench of this Court had not considered the judgments of the Apex Court in the cases of R.L. Jain (D) By Lrs..v. DDA and others (reported in MANU/SC/0221/2004: 2004(4) SCC 79) and Lila Ghosh (Smt)(Dead) through LR Tapas Chandra Roy.v. State of W.B. (reported in MANU/SC/0929/2003 : 2004(9) SCC 337) while rendering the said judgment. It was brought to the notice of this Court by the learned Assistant Government Pleader that the judgment in the case of Jafarali Mithabhai Hirani and others.v. State of Maharashtra and others was not in consonance with the law laid down by the Supreme Court in the two aforesaid judgments.
After reading the two aforesaid judgments of the Hon'ble Supreme Court, the learned Counsel for the petitioners fairly conceded that the petitioners are not entitled to claim interest under Section 34 of the Act from the date of dispossession when the dispossession was prior to the issuance of Section 4notification. It is however submitted on behalf of the petitioners by relying on the judgment in the case of R.L. Jain (D) By Lrs..v. DDA and others that the petitioners are entitled to interest on the compensation from the date of issuance of Section 4 notification till the compensation was actually paid to them. The learned Counsel for the petitioners submitted that the scheme of the Act does not contemplate taking of possession prior to the issuance of Section 4notification and as it is held in the said judgment that the possession of the land could be secured by the State after the issuance of Section 4(1)notification, the petitioners should be granted interest from 20.01.2005 till the compensation is actually paid to them. The learned Counsel for the petitioners fairly conceded that in view of the law laid down by the Supreme Court in the case of State of Maharashtra and others.v. Maimuma Banu and others (reported in MANU/SC/0590/2003 : 2003(7) SCC 448), the petitioners are not entitled to interest under Section 34 of the Act on the amount payable towards rental compensation and are entitled to interest only on the amount of compensation determined under the provisions of the Land Acquisition Act. The learned Counsel for the petitioners, therefore, restricted their prayer for grant of interest on the compensation determined under Section 23 of the Act from the date of issuance of Section 4 notification on 20.01.2005 till the compensation was actually paid to the petitioners.
6. Smt. K.S. Joshi, the learned Assistant Government Pleader appearing on behalf of the State Government submitted that the petitioners would not be entitled to interest under Section 34 of the Land Acquisition Act at all as the taking of possession on 15.01.1997 was dehors the provisions of the Land Acquisition Act. It is submitted that it has been held by the Hon'ble Supreme Court in the case of R.L. Jain (D) By Lrs..v. DDA and others that interest under Section 34 of the Act would not be granted where the possession is taken prior to the issuance of Section 4 notification, as the title of the land continues to vest with the land owners. The learned Assistant Government Pleader relied on para 11 of the said judgment to submit that the scheme of the Act does not contemplate taking of possession prior to the issuance of notification under Section 4(1) of the Act and if the possession is taken prior to the said notification it will be dehors the provision of the Act. Reliance was placed on para 12 of the said judgment to point out that the words "such compensation" and "so taking possession" are important and since the taking of possession on 15.01.1997 was dehors the provisions of the Act, the petitioners are not entitled to interest on the compensation as Section 34 of the Act is inapplicable in such cases.
7. For determination of the issue involved in these writ petitions, it would be necessary to consider the provisions of the Act. The Land Acquisition Act is a complete code in itself and provides for the acquisition of the lands, taking possession thereof and for payment of compensation to the land owners. Whenever an appropriate government is of the opinion that the land in question is likely to be needed for any public purpose, a notification to that effect shall be published in the official gazette and two daily newspapers circulated in the localities, under Section 4 of the Act. By issuing notification under Section 4 of the Land Acquisition Act, the government expresses its intention to acquire the land. Section 5-A enables a person interested in the land notified under Section 4(1) to file an objection against the acquisition of land. If the State Government is satisfied, on hearing the objection and after considering the report that the land is needed for a public purpose, a declaration to that effect could be made under Section 6 of the Act. Thereafter, the Collector is required to issue a notice under Section 9 of the Act expressing his intention to take possession of the land and stating that the claims for compensation be made to him. Section 11 provides for making of an award by the Collector. Section 16 provides that after the Collector makes an award under Section 11 of the Act, he may take possession of the land which shall thereupon vest absolutely in the government free from all encumbrances.
8. It is apparent from a reading of Section 16 that the possession of the land can be taken after the Collector makes an award under Section 11. Section17 is however an exception to the provisions of Section 16 and provides for taking of possession in cases of urgency. The aforesaid provisions of the Land Acquisition Act were considered by the Hon'ble Supreme Court in the case of R.L. Jain (D) By Lrs..v. DDA and others. The issue involved in that case was whether in a case where possession is taken before issuance of Section 4 notification, the claimant is entitled to interest for such anterior period in accordance with Section 34 of the Act. The Hon'ble Supreme Court while dismissing the appeals filed by the claimants for grant of interest on compensation from the date of dispossession observed that the normal rule of payment of interest under Section 34 of the Act from the date of dispossession till the date of payment of compensation would apply only in cases where the land has been acquired after the issuance of the preliminary notification under Section 4 of the Act. The Supreme Court observed that the scheme of the Act does not contemplate taking of possession prior to the issuance of notification under 4(1) of the Act and if the possession is taken prior to the said notification, it will be dehors the Act. It is for this reason 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 determining the amount of compensation to be awarded for the land acquired under the Act. The Hon'ble Supreme Court observed that the provisions show in unmistakable terms that the publication of notification under Section 4(1) is the sine qua non for any proceedings under the Act. In the facts of that case, the Collector had granted interest at the rate of nine per cent from the date of dispossession for a period of one year and at the rate of 15 per cent till the date of passing of the award. The Delhi Development Authority had filed an appeal before the High Court and the High Court while allowing the appeal filed by the Authority had held that the interest awarded under Section 34 of the Act was without jurisdiction and had set it aside.
9. A similar question came up for consideration in the judgment in the case of Lila Ghosh (Smt)(Dead) through LR Tapas Chandra Roy.v. State of W.B.. In that case, the claimants had claimed interest under Section 34 of the Act from the date of taking of possession prior to Section 4 notification. In the said case, the reference Court had granted interest under Section 34 on the compensation amount from the date of taking of possession and the High Court had directed the payment of interest only from the date of passing of the award by the Land Acquisition Officer. The Supreme Court while deciding the said issue thus observed in para 19 of the judgment :-
... A plain reading of Section 34 shows that interest is payable only if the compensation, which is payable, is not paid or deposited before taking possession. The question of payment or deposit of compensation will not arise if there is no acquisition proceeding. In case where possession is taken prior to acquisition proceedings a party may have a right to claim compensation or interest. But such a claim would not be either under Section 34 or Section 23. In our view, interest under these sections can only start running from the date the compensation is payable. Normally this would be from the date of the award. Of course, there may be cases under Section 17 where by invoking urgency clause possession has been taken before the acquisition proceedings are initiated.
10. The issue involved in these writ petitions stands answered by the aforesaid dictum of the Hon'ble Supreme Court. In clear and unequivocal terms, the Hon'ble Supreme Court has observed that in cases where the possession is taken prior to the acquisition proceedings, the claimant would have no right to claim compensation or interest under the provisions of Sec. 34 or Sec. 28 of the Land Acquisition Act. In the view of the Supreme Court, interest is payable under Sections 34 or 28 of the Act from the date the compensation is payable to the claimant. The Hon'ble Supreme Court observed that normally this would be from the date of the award. Though the Hon'ble Supreme Court has not made a particular reference to Section 16 of the Land Acquisition Act while making the aforesaid observations, it appears that the Hon'ble Supreme Court had granted interest to the claimant under Section 34 of the Act from the date of passing of the award in view of the provisions of Section 16 of the Act which empower the Collector to take possession of the land only after the award is passed. Section 16 of the Land Acquisition Act provides that a Collector may take possession of the land when he makes an award and on taking of the possession, the land shall vest absolutely in the government free from all encumbrances. Since the Collector is empowered to take the possession of the land after the passing of the award, it is clear that the possession taken by the Collector prior to the issuance of the Section 4notification, on 15.01.1997 was dehors the provisions of the Act and as held by the Hon'ble Supreme Court in the case of Lila Ghosh (Smt)(Dead) through LR Tapas Chandra Roy.v. State of W.B., the petitioners were not entitled to interest under Section 34 of the Act either from the date of taking of possession or from the date of issuance of Section 4 notification. The State was liable to pay the interest on compensation determined under Section 23of the Act only on the passing of the award on 05.02.2008. Though the possession was physically obtained on 15.01.1997, on an assumption that the possession was legally taken by the Collector on 05.02.2008 after the passing of the award in pursuance of the provisions of Section 16 of the Act, the petitioners would be entitled to interest under Section 34 of the Act with effect from 05.02.2008. It is worthwhile to note that the petitioners have been duly compensated for their dispossession as the Collector has awarded 8% rental compensation to them from the date of dispossession till the date of the award. The judgment in the case of Jafarali Mithabhai Hirani and others.v. State of Maharashtra and others holding that the claimants would be entitled to interest under Section 34 of the Act from the date of dispossession when the possession is taken prior to the issuance of Section 4 notification is not good law as the judgments rendered by the Hon'ble Supreme Court in the cases of Lila Ghosh (Smt)(Dead) through LR Tapas Chandra Roy.v. State of W.B. and R.L. Jain (D) by LRs.v. DDA and others were not brought to the notice of the Court.
11. We, therefore, hold that a person would be entitled to claim interest on the compensation determined under Section 23 of the Land Acquisition Act from the date of the passing of the award under Section 11 of the Act and not from the date of dispossession when the possession is taken before the issuance of Section 4 notification. Hence, for the reasons aforesaid, the writ petitions are partly allowed. The petitioners would be entitled to interest under Section 34 of the Land Acquisition Act on the amount of compensation determined under Section 23 of the Act from 05.02.2008 till the amount is actually paid to the petitioners. It is made clear that the petitioners would not be entitled to interest on the rental compensation as the same is not paid under the provisions of the Land Acquisition Act. The respondents are directed to pay the interest to the petitioners within a period of four months. Rule is made absolute in the aforesaid terms with no order as to costs.
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