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,
JJ.) in the case of State of Maharashtra & anr. v.
Rajendra Narayanrao Gaikwad, reported in
2008 (1) BCR 839.
(ii) The interest as provided under Section 34 of the said
Act shall start running from the date of possession,
only if the possession is taken by the Collector in
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
taken prior to issuance of notification under
Section 4(1), then there would be no question of
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
amount of additional component under
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
said Act from the date of publication of the
notification under Section 4(1) of the said Act.
(vi) There is no overlapping of the benefits under
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
taken prior to issuance of notification under
Section 4(1) of the said Act, the interest under
Section 34 shall start running from the date of award
only.
(viii) We also express our full agreement with the view
taken by the Division Bench of this Court in
Lalitkumar Shah's case, cited supra, that the decision
of the Division Bench in the case of Jafarali Mithabhai
Hirani & Ors. v. State of Maharashtra & Ors., reported
in 2009 (3) All MR 779, and the similar view taken
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
under Section 4(1) of the Land Acquisition Act is
published and/or before the award is passed, the
landowner would be entitled for interest as per
Section 34 necessarily from the date of passing of the
award under Section 11 of the said Act, except in cases
where the possession is taken in accordance with
Section 17 of the said Act, and in that situation only, the
provision of Section 34 of the said Act shall start
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
Shah v. State of Maharashtra and others, decided by
Smt. Vasanti A. Naik and Shri Prasanna B. Varale, JJ.,
and reported in 2012(4) Mh.L.J. 742, lays down a
correct position of law and it does not require
reconsideration.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
FIRST APPEAL NO. 251 OF 2003
State of Maharashtra,
VERSUS
Kailash Shiva Rangari,
CORAM: B.P. DHARMADHIKARI,
R.K. DESHPANDE, &
P.N. DESHMUKH, JJ.
1. In Land Acquisition Case No.37 of 1997, the Reference
Court, in exercise of its jurisdiction under Section 18 of the Land
Acquisition Act, 1894, has held on 3092000 that the
respondentclaimant shall be entitled to compensation at the rate of
Rs.50,000/ per hectare for the land acquired, and Rs.10,000/ for well.
The Reference Court has further directed that the claimant should be
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
challenges to the determination of market rate and to the award of
compensation for the well.
2. This reference to a Larger Bench is concerned with the
direction of the Reference Court to the appellantState to pay to the
respondentclaimant an interest at the rate of nine per centum per
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
1991995. Thus, the actual physical possession of the land under
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 &
Shri Prasanna B. Varale, JJ.) has held in the case of Lalitkumar
Himmatlal Shah v. State of Maharashtra and others, reported in
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
possession of the land acquired was taken prior to issuance of
notification under Section 4(1) of the said Act. This decision was relied
upon by the learned Assistant Government Pleader for the
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
in his judgment dated 2812015 and 1022015 that the judgment
delivered by the Division Bench of this Court in Lalitkumar Shah's case,
cited supra, requires reconsideration in view of the decision of the
Division Bench of this Court in the case of State of Maharashtra v.
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
Officer v. Karigowda and others, reported in (2010) 5 SCC 708, which
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 :
“If the possession is taken before notification under
Section 4(1) of the Act of 1894 is published and/or
before the award is passed, whether the landowner
would be entitled for interest as per Section 34 of the Act
of 1894 from the date of publication of the notification
under Section 4(1) of the Act of 1894 or from the date
of passing of the award?”
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
thereof and for payment of compensation to the land owners. The
proceedings for acquisition of land commence from the date of
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
such notification to be given at convenient places in the said locality.
Subsection (2) provides that, thereupon it shall be lawful for any officer,
either, generally or specially, authorized by such Government in this
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.
7. After inviting objections and granting hearing over the
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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
for a company, it can make a declaration to that effect under
Section 6 of the said Act to be published in the Official Gazette and two
daily newspapers and the public notice of the substance of such
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
be made to him. Section 11 provides for making an award by the
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
thereupon vest absolutely in the Government free from all
encumbrances. Section 17 provides that in cases of urgency, whenever
the appropriate Government so directs, the Collector, though no such
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
land needed for a public purpose and such land shall thereupon vest
absolutely in the Government, free from all encumbrances. In view of
subsection (3A) of Section 17, the Collector has to tender 80% of the
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estimated amount of compensation to the persons interested/entitled
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
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. 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
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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.
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.
11. The Land Acquisition Act, 1894 is a piece of Central
Legislation enacted to exercise the power of eminent domain to
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
Acquisition Act stands vested in the Government free from all
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encumbrances only upon taking possession in the manner provided
under Sections 16 of the said Act. In terms of Section 16, the
possession of the land can be taken only upon making of an award
under Section 11 of the said Act. The amount determined as
compensation becomes due and payable upon making of an award and
entitlement to take possession becomes coterminus with the deposit or
payment of compensation. Without making such award, possession
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
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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
to take possession becomes coterminus with the tendering of
compensation determined under clause (a) of subsection (3A) therein.
13. Taking over the possession of the land by the Collector, is
the necessary ingredient or an instance of vesting of title in the
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
dropped in terms of Section 48 therein, before the land vests in the
Government. Once the land vests in the Government, it is not even
possible to withdraw it from acquisition. For vesting of title, the manner
of taking possession has to be strictly adhered to. The concept of
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
such notification. The possession taken over in the acquisition
proceedings dehors the provisions of the Act will not confer or vest the
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title over it in the Government merely because notification under
Section 4(1) of the said Act is issued and the proceedings for acquisition
of the land have commenced.
14. Perusal of Section 34 of the said Act reveals that the
condition precedent for attracting the liability to pay interest is non
payment or non deposit of the amount of compensation for the land
acquired on or before taking possession of the land. There may be a
situation where possession is taken but the compensation determined
under Section 11 or in terms of clause (a) of subsection (3A) of
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
taking possession. It continues to operate if the possession is taken
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
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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.
15. In the decision of the Apex Court in case of Dr. Shyamlal
Narula vrs. The Commissioner of Income Tax reported in
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,
it is held that 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 acquired, but that given to him for deprivation of
the use of the money representing the compensation of the land
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
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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
be a compensation or damages for the loss of the right to retain
possession, but only compensation payable by the State for keeping back
the amount payable to the owner. It is thus the amount payable under
Section 34 of the said Act represents the consideration payable on
account of not tendering or depositing the compensation which has
become payable to the owner before taking possession of the land.
16. On the basis of the Division Bench judgment of this Court in
Bhaskar Wagh's case and the decision of the Apex Court in Karigowda's
case, cited supra, it is urged by the learned counsel for the
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
respondentclaimant, refer to and rely upon the decision of the
ThreeJudge Bench of the Apex Court in R.L. Jain's case, cited supra.
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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.
17. In the decision of the Apex Court in R.L. Jain's case, cited
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
of the said decision need to be seen. Initially on 13111959, the
notification under Section 4(1) of the Land Acquisition Act was issued.
After issuance of such notification, appellant R.L. Jain purchased the
land in auction on 841960. The sale certificate was issued in his
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)
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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
taken prior to the said notification, it will be dehors the Act. For this
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
determining the amount of compensation to be awarded for the land
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
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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
which specifically deal with the subject of taking possession of the
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
holds that if the possession is taken prior to the issuance of the
notification under Section 4(1), it would not be in accordance with
Section 16 or 17 and will be without any authority of law and
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
also mean lawful taking of possession in accordance with
Section 16 or 17 of the Act. The words “so taking possession” can under
no circumstances mean such dispossession of the owner of the land
which has been done prior to publication of notification 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 :
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“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.”
“19. The case may be examined from the equitable
consideration as well. In the earlier acquisition
proceedings`1 the notification under Section 4(1) had
been published on 13111959 and the Collector had made
an award for Rs.6301 for the plot in dispute on
30121961. The award was made within 1½ months of
dispossession which allegedly took place on 10111961.
This amount was paid to R.L. Jain and was retained by
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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
case where the landowner is dispossessed of the land prior to
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.
21. In the decision of the Division Bench of this Court
(M/s. Swatanter Kumar, C.J. & A.P. Deshpande, J.) in Bhaskar Wagh's
case, cited supra, the possession of the land was taken on
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1671981, whereas the notification under Section 4 of the Land
Acquisition Act was issued on 2081981. The possession was taken
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 :
“5. ... Thus, it is clear that where the possession is
taken prior to the issuance of section 4 Notification, it has
been held to be just and equitable that the Collector should
determine and pay the rent or damages for use of the
property to the land owner. In the present case, the
Collector has not paid any rent or damages for a period of
about one month on account of taking of possession before
issuance of section 4 Notification. As stated hereinabove,
that period involved in the present case is of about one
month and hence, it has hardly any impact while
determining the market value. We do not propose to
interfere with the Judgment and Award passed by the
District Judge in relation to the 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.”
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
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hardly any impact while determining the market value. The Division
Bench clearly holds that we do not propose to interfere with the
Judgment and Award passed by the District Judge in relation to the
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
the two Judges, in Karigowda's case, the decision of the Apex Court in
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
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owners of land would be entitled to, the provisions of
Section 48 of the Act would come to aid and the court
would also be justified in issuing appropriate direction.
This was the unequivocal view expressed by the Court in
R.L. Jain case as well. This legal question is no more open
to controversy and stands settled by this Court. We would
follow the view taken and accept the contention of the
appellant State 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 to the issuance of
notification under Section 4 of the Act. However,
following the dictum of the Bench in R.L. Jain case, we
direct 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 Act, from which
date, they would be entitled to the statutory benefits on
the enhanced compensation.”
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
R.L. Jain's case, cited supra, and it stands settled. Following the said
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
to the issuance of notification under Section 4 of the Act. However,
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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
were held entitled to the statutory benefits on the enhanced
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,
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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
possession of the land under acquisition was taken under the private
agreement or otherwise, prior to the issuance of notification under
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
said Act, from the date of publication of the notification under
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
the Division Bench of this Court in State of Maharashtra v. Rajendra
reported in 2008 (1) BCR 839, with which we agree.
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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
month, and instead of interest, the amount would represent the rent
and/or damages. In view of this, as has been rightly urged by
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
decision in R.L. Jain's case, has directed the Collector to examine the
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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,
the claimants would be entitled to the statutory benefits on the
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.
27. In our view, the aforesaid direction of the Apex Court
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
land acquired. It is payable where possession is taken but 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
deposited on the date when it became due and payable. It is not
payable on account of enhancement of compensation which is covered
by Section 28 of the said Act.
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28. The learned counsels appearing for the claimants have
relied upon Section 23(1A) of the said Act, which is reproduced below :
“23. Matters to be considered in determining
compensation.(1A) 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, subsection (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 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
additional component to be calculated at the rate of twelve
per centum per annum of the market value of the land for the period
commencing on and from the date of the publication of the
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
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the said Act, which deals with the payment of interest covers the
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
and another, reported in AIR 2001 SC 2951, it is held that the
starting point for the purposes of calculating the amount of
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
is the date of publication of Section 4 notification. The terminal
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
under clause (a) of subsection (3A) of Section 17 or under
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
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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
either the date of the award or taking of possession, whereas the
starting point of interest under Section 34 of the said Act is the
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
by the Collector or the State Government illegally or de hors the
provisions of the said Act, it is open for him to recover such
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
benefits of the land till the notification is published under
Section 4(1) of the said Act. We are not concerned in this matter
about the rental compensation or the damages to which the
claimants are entitled, if the possession of the land is de hors the
provisions of the Act.
32. Keeping in view the entire scheme of the Land
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,
JJ.) in the case of State of Maharashtra & anr. v.
Rajendra Narayanrao Gaikwad, reported in
2008 (1) BCR 839.
(ii) The interest as provided under Section 34 of the said
Act shall start running from the date of possession,
only if the possession is taken by the Collector in
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
taken prior to issuance of notification under
Section 4(1), then there would be no question of
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
amount of additional component under
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
said Act from the date of publication of the
notification under Section 4(1) of the said Act.
(vi) There is no overlapping of the benefits under
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
taken prior to issuance of notification under
Section 4(1) of the said Act, the interest under
Section 34 shall start running from the date of award
only.
(viii) We also express our full agreement with the view
taken by the Division Bench of this Court in
Lalitkumar Shah's case, cited supra, that the decision
of the Division Bench in the case of Jafarali Mithabhai
Hirani & Ors. v. State of Maharashtra & Ors., reported
in 2009 (3) All MR 779, and the similar view taken
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
under Section 4(1) of the Land Acquisition Act is
published and/or before the award is passed, the
landowner would be entitled for interest as per
Section 34 necessarily from the date of passing of the
award under Section 11 of the said Act, except in cases
where the possession is taken in accordance with
Section 17 of the said Act, and in that situation only, the
provision of Section 34 of the said Act shall start
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
Shah v. State of Maharashtra and others, decided by
Smt. Vasanti A. Naik and Shri Prasanna B. Varale, JJ.,
and reported in 2012(4) Mh.L.J. 742, lays down a
correct position of law and it does not require
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
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