Bombay High Court
The State Of Maharashtra vs Laxman Motiram Patil on 1 July, 2011
Author: A.S.Oka
Bench: A.S.Oka
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ssp
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELATE JURISDICTION
FIRST APPEAL NO.1085 OF 1999
The State of Maharashtra ...Appellant
vs.
Laxman Motiram Patil
(since deceased through L.Rs.)
1-A Gangadhar Laxman Jadhav
1-B Bharat Laxman Jadhav
1-C Anusayabai Laxman Jadhav ...Respondents
ALONG WITH
FIRST APPEAL NO.777 OF 2008
vs.
The State of Maharashtra
Mulkanbai w/o Totaram Patil
...Appellant
(since deceased through L.Rs.)
1 Ketan Ghevar Patil(Jadhav)
2 Pravin Ghevar Patil (Jadhav)
3 Anitabai Prabhakar Pagar
4 Manishabai Ramdas Shinde
5 Sarikabai Ghevar Patil (Jadhav)
6 Kamlabai Ghevar Patil (Jadhav) ...Respondents
ALONG WITH
FIRST APPEAL NO.657 OF 1997
The State of Maharashtra ...Appellant
vs.
1 Ghevar Totaram Patil
(since deceased through L.Rs.)
1a Mulkandbai Totaram Patil
1b Kalabai Ghevar Patil
1c Anita Prabhakar Pagar
1d Kewal Ghevar Patil
1e Manisha Ghevar Patil
1f Sarika Ghevar Patil
1g Pravin Ghevar Patil
2 Smt.Mulkanbai Totaram Patil
(since deceased through L.Rs.)
2a Bayjabai Khanderao Devare
2b Keval Ghevar Patil
2c Pravin Ghevar Patil
2d Anita Prabhakar Pagar
2e Manisha Ghevar Patil
2f Sarita Ghevar Patil
2g Kalabai Ghevar Patil ...Respondents
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ALONG WITH
FIRST APPEAL NO.658 OF 1997
The State of Maharashtra ...Appellant
vs.
1 Smt.Keda Ramchandra Patil
2 Ramesh Ramchandra Patil
3 Ratnabai Raghunath Nikam
4 Smt.Jhamkanabai Ramchandra Patil ...Respondents
Mr.A.R.Patil, A.G.P for the appellant in all appeals
Mr.P.N.Joshi for the respondent nos.1A to 1C in F.A.no.
1085 of 1999
Mr.Prakash Ahuja for all respondents in F.A.No.657 of
1997 and for respondent nos.1 to 5 in F.A.No.658 of 1997
and for respondent nos.1 to 6 in F.A.no.777 of 2008
ig CORAM: A.S.OKA, J.
DATE: JULY 1, 2011
ORAL JUDGMENT:
1 These appeals can be disposed of by a common Judgment and Order. The appeals are directed against the Awards made under section 18 of the Land Acquisition Act, 1894 (hereinafter referred to as the said Act). The lands are situated at Village Satmane, Taluka Malegaon, District Nashik. In case of First Appeal No. 1085 of 1999 and First Appeal No.777 of 2008, the notification under section 4(1) of the said Act was issued on 16th February 1984. On 19th September 1986, An Award was made under section 11 of the said Act offering market value at the rate of Rs.7,500/- per Hectare. In the case of remaining two appeals, the notification under section 4(1) of the said Act was issued on 9th July 1987. On 31st March 1989, An Award was made under section 11 of the said Act offering market value at the rate of Rs.9000/- per Hectare. The purpose of acquisition in all four cases was for construction of Minor Irrigation Tank at Ajang, Taluka Malegaon District Nashik. As the claimants did ::: Downloaded on - 09/06/2013 17:25:35 ::: 3 fa1085group.sxw not accept the said Award, References under section 18 of the said Act were made at their instance.
2 So far as F.A.No.1085 of 1999 is concerned, the challenge is to the Judgment and Award passed in a reference under section 18 of the said Act being L.A.R.No.181 of 1989. The Reference Court fixed the market value at the rate of Rs.29,200/- per Hectare for irrigated land and Rs.28,200/- per Hectare for the lands which were not irrigated. For the pot kharaba lands (non-cultivable lands), market value of Rs 500/-per Hectare was granted. The Reference Court also granted a sum of Rs.5,000/- on account of injurious affection. The Reference Court rejected the claim for enhancement made as far as trees are concerned. After noticing that the possession of the acquired land was taken over before the date of notification under Section 4(1) of the said Act, in addition to the other statutory benefits, the Reference Court granted interest under Section 34 of the said Act from the date of dispossession.
3 First Appeal no.777 of 1995 takes an exception to the Award made in L.A.R.No.179 of 1989. Market value awarded in this case is the same as in earlier case. In the said reference, the learned Trial Judge did not accede to the prayer for grant of enhancement of compensation on account of injurious affection. The Reference Court fixed the market value at the rate of Rs. 29,200/- per Hectare for irrigated land and Rs.28,200/- per Hectare for the lands which were not irrigated. For the pot kharaba lands (non-cultivable lands), market value of Rs 500/-per Hectare was granted.
4 As far as First Appeal no.657 of 1997 is concerned, the same takes exception to the Judgment and Award made ::: Downloaded on - 09/06/2013 17:25:35 ::: 4 fa1085group.sxw in L.A.R.No.443 of 1989. In this case, notification under section 4(1) of the said Act was issued on 9th July 1987. Award was made under section 11 of the said Act on 31st March 1989. By the impugned Judgment and Award, the learned Trial Judge fixed the market value at the rate of Rs.30,000/- per Hectare for the acquired land which was non-irrigated land. In this reference, the learned Trial Judge observed that even before the notification under section 4(1) of the said Act, the claimant was dispossessed on 1st July 1981. Therefore, apart from grant of statutory benefits under section 23 (1-A) and 23(2) of the said Act, the learned Trial Judge granted interest at the rate of 9% per annum from 1st July 1981 to 30th June 1982 and thereafter at the rate of 15% per annum till the date of payment of compensation.
5 First Appeal no.658 of 1997 takes an exception to the Judgment and Award in L.A.R.No.444 of 1989. In this case, the date of notification under section 4(1) of the said Act and the Award under section 11 is the same as in First Appeal No.657 of 1997. By the impugned Award, the market value has been fixed at the rate of Rs.36,000/-
per Hectare for the acquired land which was irrigated land. In this case also, the possession was taken over on 1st July 1981. Therefore, apart from grant of statutory benefits under section 23 (1-A) and 23(2) of the said Act, the learned Trial Judge granted interest at the rate of 9% per annum from 1st July 1981 to 30th June 1982 and thereafter at the rate of 15% per annum till the date of payment of compensation.
6 The learned A.G.P. appearing for the appellants submitted that though in these cases possession of the acquired land was taken over prior to the date of notification under section 4(1) of the said Act, the ::: Downloaded on - 09/06/2013 17:25:35 ::: 5 fa1085group.sxw Reference Court has committed an error by granting interest at the rate of 9% and 15% from the date of dispossession. He submitted that such interest cannot be granted either under section 28 or section 34 of the said Act. He placed reliance on the decision of the Apex Court in the case of R.L.Jain (since deceased through L.Rs.) vs. Delhi Development Authority [(2004) 4 S.C.
79). He submitted that the market value fixed by the Reference Court in respect of the land is excessive and in fact, there is no evidence adduced of comparable sale instances to justify the grant of enhancement in the market value. He submitted that the sale instances relied upon by the claimants are not relevant as the same cannot be said to be comparable. He also challenged the grant of market value of Rs.500/- per Hectare for Pot Kharaba land. He submitted that there is absolutely no evidence on record for showing damage caused by injurious affection in LAR No.181 of 1989 for which a sum of Rs.
5,000/- has been granted. He submitted that the said part of the impugned Award is completely erroneous. The learned counsel Shri Joshi appearing for some of the claimants has made detailed submissions. The learned counsel Shri Ahuja has also made submissions. The submission of Mr.Joshi is that for injurious affection, in L.A.R.No.181 of 1989, only an amount of Rs.5,000/- has been granted. The said amount has been granted on the ground that as a result of the acquisition of a part of the land, rest of the land was getting water logged. He justified the market value fixed by the Reference Court. He submitted that as far as interest granted from the date of dispossession is concerned, in view of the decision of Division Bench of this Court in case of Dinkar Sandipan Gholve & others Vs. State of Maharashtra and others [2009 (supp.) Bombay Cases Reporter 891], the State Government was liable to pay rental compensation.
::: Downloaded on - 09/06/2013 17:25:35 :::6 fa1085group.sxw He submitted that admittedly said compensation has not been paid and therefore, the Reference Court was justified in granting interest from the date of dispossession. He submitted that claimants are entitled to statutory benefits under sections 23 (1-A), 23(2) and 28 of the said Act.
7 The learned counsel Mr.Ahuja has placed on record a compilation containing policy decisions of the State Government on the issue of grant of rental compensation in case of lands which are taken over by the State Government by private negotiations prior to the notification under Section 4(1) of submitted that in fact, in the form of possession receipt the said Act. He prescribed in Appendix A of G.R. Dated 1st December 1972, the rate at which rental compensation is payable has been incorporated. He pointed out that the rate of 6 ½ % mentioned in the original G.R has been enhanced subsequently to 8%. He also relied upon the decision of the Division Bench in case of Dinkar Sandipan Gholve (supra). He also pointed out the decision of another Division Bench of this Court in case of Maimune Banu Hamidali Khan and others Vs. State of Maharashtra & others [2001 (3) Bombay Cases Reporter 529]. He pointed out the decision of the Apex Court in case of State of Maharashtra Vs.Maimuma Banu and others (AIR 2003 S.C. 3698) in appeal arising out of the said decision of the Division Bench. He submitted the rental compensation which the State Government is obliged to pay has not been paid. Therefore, the Reference Court was justified in granting interest. He submitted that the claimants will be entitled to statutory benefits under sections 23 (1- A), 23(2) and 28 of the said Act.
8 I have given careful consideration to the ::: Downloaded on - 09/06/2013 17:25:35 ::: 7 fa1085group.sxw submissions. As far as First Appeal no.1085 of 1999 and 777 of 2008 are concerned, the date of notification under section 4(1) of the said Act is 16th February 1984. In other two appeals, though lands acquired are from the same village and for the same public purpose, the date of notification under section 4(1) is 9th July 1987. The first issue to be decided is as regards the market value as on 16th February 1984. Perusal of the impugned Judgment and the record of the Reference Court show that the sale instance at Exhibit 13 was relied upon by the claimants. The sale instance Exh.13 was of 8th March 1984 in respect of the area of 1 Hectare and 37 Ares Hectare. the wherein the market value reflected was Rs.29,197/- per purchaser and her son were examined as witnesses. The date of the said sale instance is in very close proximity of the relevant date. On the issue of comparability, the purchaser and her son were examined as witnesses. It will be necessary to make a reference to the evidence of one Vijay Karbhari Pawar, the son of the purchaser under the said sale deed. He stated that he was present at the time of execution of the sale deed. He stated that he settled the transaction. He stated that he had seen acquired lands which at the relevant time were irrigated lands with wells. He stated that the land purchased by his mother was not irrigated. He stated that he purchased the land at proper price according to prevailing rate of sale of nearby lands. His mother, the purchaser also stated the same thing about the price. She stated that there was a canal, but the water from the canal is not being supplied to the land purchased by her since the year 1974. She stated that the acquired lands were at a distance of one Km from the land purchased by her and the acquired lands were better in quality as the same were irrigated by the water supply from wells. The land subject matter of the sale deed can be certainly ::: Downloaded on - 09/06/2013 17:25:35 ::: 8 fa1085group.sxw considered to be comparable with the acquired lands. The only other sale deed at Exhibit 15 is of 9th May 1983 which has to be kept out of consideration as the purchaser under the sale deed admitted in the cross examination that the land subject matter of the sale deed was purchased by him as there was a foot path connecting the said land with another agricultural land held by him.
He stated that the land purchased by him was very convenient to him. Thus, the sale deed land was a special property for him and therefore, the sale deed cannot reflect the correct market value.
9The sale deed at Exhibit 13 shows that the price of cultivable but the non-irrigated land was Rs. 29,197/- per Hectare. Considering the evidence of the said witnesses and the evidence of one of the claimants Gangadhar Laxman Jadhav in L.A.R.no.181 of 1989, as of 16th February 1984, for cultivable portion of the lands, the market value was fixed at Rs.29,200/-. For inferior portion of land, the market value was reduced by Rs. 1000/-. Though the pot-kharaba land cannot be used for actual cultivation, the same can be always used for storage of equipment, as a thrashing ground, for construction of farm hut etc. Therefore, the market value of the pot-kharaba land has been rightly fixed at Rs. 500/-per Hectare.
10 In L.A.R.No.181 of 1989, compensation of Rs.5,000/- has been granted on account of injurious affection. The claimant Gangadhar in the said reference was examined as a witness. He came out with a case that as a result of acquisition of lands, the remaining land is always water logged. There is absolutely no evidence of any details, such as income derived earlier from the remaining part of the land. A sum of Rs.5,000/- arrived at by the ::: Downloaded on - 09/06/2013 17:25:35 ::: 9 fa1085group.sxw Reference Court has absolutely no basis and the said part of the Award will have to be set aside.
11 Now, coming to the market value of the lands subject matter of other two appeals, as pointed out earlier, there is difference of three and half years between the relevant date in earlier two appeals and the relevant date in the said two appeals. I have already confirmed the market value of cultivable and irrigated land at the rate of Rs.29,200/-. In such Awards subject matter of First Appeal nos.657 and 658 of 1997, the Reference Court has fixed the market value of Rs.36,000/- per Hectare for Hectare for irrigated land and the market value of lower category of land.
Rs.30,000/- per
Even if yearly
escalation at 7.5% is considered, the said market value of Rs.36,000/- and Rs.30,000/- respectively is slightly on the lower side. Hence, the said finding of the Reference Court is correct.
12 In case of three Awards subject matter of challenge in these Appeals interest at the rate of 9% and 15% respectively in purported exercise of powers under section 34 has been granted from the date of possession which is prior to the date of notification under section 4(1) of the said Act. The second question is whether Reference Court while deciding a reference under Section 18 can grant interest from a date prior to the date of publication of notification under Section 4(1) of the said Act. There are three sections in the said Act under which interest is made payable. The said provisions are Sections 23(1-A), 28 and 34 which read thus:
"23[(1-A) 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 of such market-value for the period commencing on and from the date of the publication of the notification under Section 4, sub- section (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.::: Downloaded on - 09/06/2013 17:25:35 :::
10 fa1085group.sxw Explanation.--In computing the period referred to in this sub-section, 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.]
28. Collector may be directed to pay interest on excess compensation.--
If the sum which, in the opinion of the Court, the Collector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation, the award of the Court may direct that the Collector shall pay interest on such excess at the rate of [nine per centum] per annum from the date on which he took possession of the land to the date of payment of such excess into Court.
[Provided that the award of the Court may also direct that where such excess or any part thereof is paid into Court after the date of expiry of 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 such excess or part thereof which has not been paid into Court before the date of such expiry.]
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.]"
Under Section 23(1-A), the starting point of interest is the date of the publication of the notification under Section 4(1) and the interest is payable up to the date of the Award under section 11 or the date on which the possession of the acquired land is taken over, whichever is earlier. The interest under section 28 is payable from the date on which possession of the acquired land is taken over by the Collector. The Section 28 is applicable only when while deciding a reference under Section 18 of the said Act, the Reference Court grants market value in excess of market value granted by the Collector under an award under Section 11. Section 34 applies only when the Collector fails to pay or deposit the compensation amount payable as per the Award under section 11 on or before taking possession of ::: Downloaded on - 09/06/2013 17:25:35 ::: 11 fa1085group.sxw the acquired land. There are specific sections in the said Act dealing with the power of taking over possession of the acquired land. The said Sections are 16 and 17 which read thus:
"16. Power to take possession.--When 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.
17. Special powers in cases of urgency.--(1) In cases of urgency, whenever the [appropriate Government] so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in Section 9, sub-section (1), [take possession of any land needed for a public purpose.] Such land shall thereupon [vest absolutely in the [Government]], free from all encumbrances.
(2) Whenever, owing to any sudden change in the channel of any navigable river or other unforeseen emergency, it becomes necessary for any Railway Administration to acquire the immediate possession of any land for the maintenance of their traffic or for the purpose of making thereon a river-side or ghat station, or of providing convenient connection with or access to any such station, [or the appropriate Government considers it necessary to acquire the immediate possession of any land for the purpose of maintaining any structure or system pertaining to irrigation, water supply, drainage, road communication or electricity,] the Collector may, immediately after the publication of the notice mentioned in sub-section (1) and with the previous sanction of the [appropriate Government], enter upon and take possession of such land, which shall thereupon [vest absolutely in the [Government] free from all encumbrances:
Provided that the Collector shall not take possession of any building or part of a building under this sub-section without giving to the occupier thereof at least forty-eight hours' notice of his intention so to do, or such longer notice as may be reasonably sufficient to enable such occupier to remove his movable property from such bundling without unnecessary inconvenience. (3) In every case under either of the proceeding sub-sections the Collector shall at the time of taking possession offer to the persons interested, compensation for the standing crops and trees (if any) on such land and for any other damage sustained by them caused by such sudden dispossession and not excepted in Section 24; and, in case such offer is not accepted, the value of such crops and trees and the amount of such other damage shall be allowed for in awarding compensation for the land under the provisions herein contained, [(3-A) Before taking possession of any land under sub-section (1) or sub-
section (2), the Collector shall, without prejudice to the provisions of sub- section (3),--
(a) tender payment of eight per centum of the compensation for such land as estimated by him to the persons interested entitled thereto, and
(b) pay it to them, unless prevented by some one or more of the contingencies mentioned in Section 31, sub-section (2), and where the Collector is so prevented, the provisions of Section 31, sub- section (2), (except the second proviso thereto), shall apply as they apply to the payment of compensation under that section.
::: Downloaded on - 09/06/2013 17:25:35 :::12 fa1085group.sxw (3-B) The amount paid or deposited under sub-section (3-A), shall be taken into account for determining the amount of compensation required to be tendered under Section 31, and where the amount so paid or deposited exceeds the compensation awarded by the Collector under Section 11, the excess may, unless refunded within three months from the date of the Collector's award, be recovered as an arrear of land revenue.] [(4) In the cases of any land to which, in the opinion of the [appropriate Government], the provisions of sub-section (1), or sub-section (2) are applicable, the [appropriate Government] may direct that the provisions of Section 5-A shall not apply, and, if it does so direct, a declaration may be made under Section 6 in respect of the land at any time [after the date of the publication of the notification] under Section 4, sub-section (1).] The power to take the possession can be exercised under Section 16 of the said Act only after an Award is made under section 11 of the said Act. In case of urgency, Section 17 comes ig into picture which empowers the Collector to take the possession of the land notified for acquisition after notice under Section 9 (1) is served but before the Award under Section 11 is made. In the three cases in hand, the interest under Section 23 (1 A) has been granted upto the date of the award under Section
11. Interest on the excess amount payable on the components of market value, interest under section 23 (1-A) and solatium under Section 23 (2) has been granted at the rate of 9% per annum for a period of one year from the date of possession and for subsequent period, at the rate of 15% per annum till the date of deposit of the excess amount by the Collector in the Court. Perhaps the Reference Court has exercised the power under Section 34 of the said Act. The appellant has challenged the grant of said interest on the ground that Section 34 will have no application and even section 28 will not apply.
13 On this aspect, a reference will have to be made to the decision of the Apex Court in the case of R.L.Jain (supra). In paragraph 1 of the decision, the issue which arose before the Apex Court has been set out which reads thus:
::: Downloaded on - 09/06/2013 17:25:35 :::13 fa1085group.sxw "In view of conflict of opinion in two decisions of this Court, namely, Shree Vijay Cotton & Oil Mills Ltd. v.
State of Gujarat and Union of India v. Budh Singh the appeal has been placed for hearing before this larger Bench and the question in issue is whether in a case where possession is taken before the issuance of notification under Section 4(1) of the Land Acquisition Act, the claimant (owner of land) is entitled to interest for such anterior period in accordance with Section 34 of the said Act."
(Emphasis added) In paragraph 11, the Apex Court proceeded to observe thus:
".................Section 11 provides for making of an award by the Collector of the compensation which should be allowed for the land. Section 16 provides that when 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. This provision shows that possession of the land can be taken only after the Collector has made an award under Section 11. Section 17 is in the nature of an exception to Section 16 and it provides that in cases of urgency, whenever the appropriate Government so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the 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. The urgency provision contained in Section 17(1) can be invoked and possession can be taken over only after publication of notification under Section 9(1) which itself can be done after publication of notification under Sections 4(1) and 6 of the Act. Even here in view of sub-section (3-A) the Collector has to tender 80 per cent of the estimated amount of compensation to the persons interested/entitled thereto before taking over possession. 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. 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 ::: Downloaded on - 09/06/2013 17:25:35 :::
14 fa1085group.sxw awarded for the land acquired under the Act. 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.
(Emphasis added) The Apex Court considered the provision of section 34 of the said Act. In paragraph 12 of the said decision, while referring to section 34, the Apex Court has held thus:
"12. The expression "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" should not be read in isolation divorced from its context. The words "such compensation" and "so taking possession" are important and have to be given meaning in the light of other provisions of the Act. "Such compensation"
would mean the compensation determined in accordance with other provisions of the Act, namely, Sections 11 and 15 of the Act which by virtue of Section 23(1) mean market value of the land on the date of notification under Section 4(1) and other amounts like statutory sum under sub- section (1-A) and solatium under sub-section (2) of Section 23. The heading of Part II of the Act is "Acquisition" and there is a sub-heading "Taking Possession" which contains Sections 16 and 17 of the Act. The words "so taking possession" would therefore mean taking possession in accordance with Section 16 or 17 of the Act. These are the only two sections in the Act which specifically deal with the subject of taking possession of the acquired land. 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. If 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 recognised for the purposes of the Act. 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 ::: Downloaded on - 09/06/2013 17:25:35 ::: 15 fa1085group.sxw 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."
(Emphasis added) Thus, when possession is taken over prior to the notification under Section 4(1) of the said Act, Section 34 cannot be invoked. The section 34 will apply only when the possession is taken either under section 16 or section 17 of the said Act. The Apex Court also dealt with the aspect of grant of compensation where the possession of the land subject matter of acquisition has been taken over prior to the date of notification under Section 4(1) of the said Act. This aspect has been dealt with in paragraph 18 of the decision which reads thus:
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.
(Emphasis added) ::: Downloaded on - 09/06/2013 17:25:35 ::: 16 fa1085group.sxw The Apex Court also considered the issue of applicability of Section 23(1-A) in a case where possession is taken over before the date of notification under Section 4(1).
"16. In this connection it will be apposite to refer to sub- section (1-A) of Section 23 of the Act which enjoins payment of 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(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. There are two decisions of this Court, wherein same controversy arose, namely, whether the claimant would be entitled to additional sum at the rate of twelve per centum on the market value where possession has been taken over prior to publication of notification under Section 4(1). In Special Tahsildar (LA), PWD Schemes v. M.A. Jabbar which has been decided by a Bench of two Judges (K. Ramaswamy and Mrs Sujata V. Manohar, JJ.), it was held that the claimant would not be entitled to this additional sum for the period anterior to publication of notification under Section 4(1). However, in Asstt. Commr., Gadag Sub-Division v. Mathapathi Basavannewwa11 also decided by a two-Judge Bench (K. Ramaswamy and B.L. Hansaria, JJ.) it was held that even though notification under Section 4(1) was issued after taking possession of the acquired land the owners would be entitled to additional amount at twelve per cent per annum from the date of taking possession though notification under Section 4(1) was published later. For the reasons already indicated, we are of the opinion that the view taken in Special Tahsildar is legally correct and the view to the contrary taken in Asstt. Commr. is not in accordance with law and is hereby overruled.
(Emphasis added) Therefore, it will be necessary to make a reference to the decision of the Apex in the case of Special Tahsildar (LA) v. M.A. Jabbar, (1995) 2 SCC 142, which has been approved by the Apex Court in the case of ::: Downloaded on - 09/06/2013 17:25:35 ::: 17 fa1085group.sxw R.L.Jain (supra). The Apex Court in the said decision held thus:
"In other words, the owner of the land who has been deprived of the enjoyment of the land by having been parted with possession, the Act intended that the owner be compensated by awarding an additional amount calculated at the rate of 12 per centum per annum on the enhanced market value for the period between the date of notification and the date of award or date of taking possession of the land whichever is earlier. Admittedly, possession having already been taken on 15-2-1965, before publication of the notification under Section 4(1) on 6-3-1980, the award of additional amount for the period from 6-3-1980 to 30-9-1983, i.e., the date of making the award under Section 11 is perfectly correct. In addition to other statutory benefits, the owner also is entitled to the additional amount but to give in award additional amount from 15-2-1965, i.e., from the date of taking possession, though apparently earlier in point of time mentioned in Section 23(1-A), in effect it amounts to giving retrospective effect to sub-section (1-A) to Section 23 under the Amendment Act 68 of 1984, even though the Amendment Act was prospective and the transitory provision had only retro-limited activity.
Thus, the issue of the applicability of the aforesaid provisions of Sections 23(1-A) and 34 dealing with interest to a case where the possession of the land under acquisition is taken over prior to the date of publication of notification under Section 4 (1) of the said Act has been decided by the Apex Court. The interest under section 23 (1 A) shall be payable in such a case from the date of publication of the notification under Section 4(1) up to the date of award under Section 11. The interest as per Section 34 will not be payable as the possession has not been taken over in accordance with the provisions of the said Act. The interest under section 28 shall not be payable from the date of possession when the possession is taken over prior to the date on which ::: Downloaded on - 09/06/2013 17:25:35 ::: 18 fa1085group.sxw notification under Section 4 (1) of the said Act is issued.
14. The question which is not specifically answered by the Apex Court is whether the interest under section 28 can be granted by the Reference Court in such a case. If it can be granted, the question will be what will be the starting point of interest. As pointed out earlier, the Section 28 comes into picture only when a reference is made under section 18 and the Reference Court grants an amount in excess of the amount granted by the Collector.
The object of section 28 is to compensate the landowner on account of the delay in payment of compensation to which he is legitimately entitled. The land owner becomes entitled to receive the compensation in terms of Section 23 (1), section 23(1-A) and section 23(2) on the date of an Award under Section 11 of the said Act. As pointed out in the subsequent part of the judgment, there is a policy of the State Government to pay rental compensation in such a case from the date on which the possession is taken over prior to the date on which notification under Section 4 (1) of the said Act is published. A reference will have to be made to the policy of the state government which has been interpreted by a decision of the Division Bench of this Court in the case of Dinkar Gholve (supra). This Court has reiterated the principle laid down by the Apex Court in case of R.L.Jain (supra) that the land owner who had handed over possession of the acquired land before the notification under section 4(1) is not entitled to statutory interest under the provisions of the Section 34 of the said Act. The reason being that the possession is not taken over under any of the provisions of the said Act. The Division Bench observed thus:::: Downloaded on - 09/06/2013 17:25:35 :::
19 fa1085group.sxw 11 As a contention was raised that the amount payable is not only for the land, but for the structures and things standing thereon including trees on behalf of the land owners reliance has been placed on the judgment of a Division Bench of this Court in (Reliance Industries Ltd.,Bombay & anr Vs. State of Maharashtra & Ors.), 2007 (3) Bom.C.R. 881: 2006 (5) All M.R. 288. A learned Bench of this Court considering the expression land was pleased to hold that there cannot be acquisition of limited interest in the land, but it has be whole of the things attached or permanently fastened thereto land including as well as benefits arising there from. In our opinion it may not be necessary to answer the submission based on the said judgment. The rental compensation has to be paid in terms of Government G.R. In terms of the Government Resolution rental compensation is worked out at 8% of the Awarded value. The awarded value, therefore, considering section 23 of the Land Acquisition Act would include all components included under section 23. It must be borne in mind that this rental compensation is payable based on two aspects (1) Possession has earlier been taken and for possession earlier taken, the interest in terms of section 34 is not payable and also non-payment of additional amount under section 23 (1-A). The rental compensation, therefore, payable is the compensation worked out at the rate of 6 1/2% or 8 per cent as the case may be on the awarded value and is payable from the date of taking possession till the full amount of final award ::: Downloaded on - 09/06/2013 17:25:35 ::: 20 fa1085group.sxw is paid to the land owner.
(Emphasis added) In paragraph No.13, the Division Bench observed that in the event there is a delay in payment of the rental compensation, the same will carry interest at the rate of 6% per annum. The perusal of the policy decision of the State Government dated 1st December 1972 as amended subsequently shows that the rental compensation is payable at the rate of 8% per annum on the market value determined by the Collector by the award under Section 11 from the date on which possession is taken over till the no date of the Award under section 11 of the said Act. There is provision in the policy decision of the State Government to award interest on the amount enhanced under section 18 of the said Act. The rental compensation is payable on the basis of the amount determined by an Award under Section 11. The rental compensation is not payable at the rate of 8% of the amount determined under Section 18 or 28(A-1) of the said Act. The object of the policy seems to be to compensate the landowner for the use of land by the State from the date on which possession is taken over till the date on which compensation is offered by an Award under section 11.
15 From the scheme of the Section 28 it appears that the object is to compensate the land holder for the delay in payment of compensation payable under Section 23 which includes components of the market value, interest under Section 23 (1 A) and the solatium under section 23 (2). The legislature was conscious of the fact that in several cases, inadequate market value is offered by an Award under Section 11 and enhancement is granted in a reference under section 18 of the said Act. Very often there is a delay in disposal of references under Section ::: Downloaded on - 09/06/2013 17:25:35 ::: 21 fa1085group.sxw 18 and/or appeals arising there from. In view of what is held in the case of R.L.Jain(supra), in a case where the possession is handed over prior to the publication of the notification under Section 4 (1) of the said Act, vesting in the State takes place on the date of an Award under Section 11. Therefore, when possession is handed over prior to the notification under Section 4 (1) of the said Act, the interest under section 28 will be payable from the date on which the award is made under Section 11 of the said Act. In view of what is held by the Apex Court in the Case of R.L.Jain (supra), interest under Section 28 will be payable in such a case not from the date of possession, but from the date of the possession contemplated under section 28 of the said Act award. The is the possession taken over under section 16 or section
17 as the case may be. In case the possession is taken over prior to the date of notification under section 4(1), vesting is completed when the Award under section 11 is made and the compensation is offered to the claimants. The object of fixing the date of possession as the starting point for payment of interest under section 28 is that on the date of taking possession in accordance with Section 16, the claimant is divested of right, title or interest in the acquired land and therefore, if the lawful compensation to which he is entitled to is not paid, he must get interest on the said compensation from the date on which he is divested of acquired land by compulsory acquisition. In a case where the possession is handed over before the date of publication of notification under section 4(1) of the said Act, only on declaration of Award under section 11 that the claimant will be divested of his right, title, interest and the possession will vest in the State Government as the title holder. Therefore, in such a case starting point of interest under section 28 will be the date on which Award ::: Downloaded on - 09/06/2013 17:25:35 ::: 22 fa1085group.sxw under section 11 of the said Act is made.
16. The legal position which emerges from the aforesaid decisions of the Apex Court regarding the applicability of the aforesaid provisions dealing with grant of interest to a case where the possession of the land under acquisition is taken over prior to the date on which notification under Section 4 (1) of the said Act is published can be summarised as under:
(i)The interest under section 23 (1 A) shall be payable in such a case from the date of ig publication of the notification Section 4(1) up to the date of award under under Section 11.
(ii)The interests as per Section 34 will not be payable as the possession has not been taken over in accordance with the provisions of the said Act.
(iii)The interest under section 28 shall not be payable from the date of possession when the possession is taken over prior to the date on which notification under Section 4 (1) of the said Act is published. In such a case, the starting point of interest under section 28 will be the date on which Award under section 11 of the said Act is made.
17 Though the market value awarded by the Reference Court deserves to be confirmed, the appeals preferred by the State Government will have to be partly allowed.
18 Hence, I pass the following order:
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i) Judgment and award in L.A.R.no.181 of 1989 is hereby modified. Compensation of Rs.5,000/- awarded on account of injurious affection is quashed and set aside.
ii)Interest granted from the date of possession in L.A.R. Nos.181, 443 and 444 of 1989 is quashed and set aside with liberty to the claimants to apply to the Collector for grant of rental compensation in terms of the Government Resolution of the State Government. The claimants can also apply for grant of interest on the rental compensation.
iii)The claimants shall be entitled to statutory benefit under section 23 (1-A) from the date of publication of the notification under Section 4(1) only up to the date of award under Section 11.
However, the claimants shall be entitled to benefits under section 23(2) of the said Act and section 28 of the said Act. Interest under section 28 shall be computed from the date on which Award under section 11 of the said Act has been declared and not from the date on which possession is taken over.
iv)First Appeals (except First Appeal no.777 of 2008) are partly allowed to that extent with no order as to costs.
v) First Appeal no.777 of 2008 is dismissed with no order as to costs.
vi)Exercise of computing compensation payable to the claimants under the modified Awards shall be completed by the Reference Court within a period of three months from the date of receipt of writ of this Judgment by the said Court.
vii) The respondents in the First Appeals (except in First Appeal no.777 of 2008) shall be entitled to make an application to the Collector for granting rental compensation in terms of the Government ::: Downloaded on - 09/06/2013 17:25:35 ::: 24 fa1085group.sxw Resolution dated 1st December 1972 as amended from time to time and in terms of the law laid down by the Division Bench of this Court in case of Dinkar Gholve (supra). It will be open for them to apply for grant of interest on the rental compensation. If such application is made by the respondent to the Collector or the Special Land Acquisition Officer as the case may be, the same shall be decided as expeditiously as possible and preferably within a period of 12 weeks from the date of the said application in the light of the law laid down by the Division Bench in the case of Dinkar Gholve (supra).
JUDGE ::: Downloaded on - 09/06/2013 17:25:35 :::