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Meerut Development Authority v/s Abid Husain

    First Appeal Nos. 633, 638 & 677 of 2008

    Decided On, 24 February 2014

    At, High Court of Judicature at Allahabad


    For the Appellant: B. Dayal, Advocate. For the Respondent: Vivek Kumar, Ajit Kumar Singh, Advocates.

Judgment Text

Krishna Murari, J.

1. These three connected appeals are directed against the common judgment and award dated 17.5.2008 passed by the reference Court. Since in these appeals, common question of law and facts are involved, hence, they have been heard together and are being decided by this common judgment. We have heard Sri B. Dayal, learned counsel for the appellant and Sri Vivek Kumar, learned counsel for the claimant-respondent.

2. Notification u/s 4 of the Land Acquisition Act for acquisition of the land belonging to the claimant-respondent was issued on 6.2.1990 and the award determining the compensation was made by the Special Land Acquisition Officer on 17.3.1992. On the application of the tenure-holders, twenty seven references, including the three out of which the present appeals arise, were made challenging the market value determined by the reference Court.

3. All the references were decided by a common judgment dated 17.5.2008. The re

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ference Court allowed the claim of the respondent-claimants partly. The appellants, in all these connected appeals are not aggrieved by the market value determined by the reference Court. Their grievance is only with respect to the date wherefrom they would be liable for payment interest on the amount of compensation.

4. Therefore, the dispute in the present appeals is confined only to the date from which the appellants would be liable to pay interest. From a perusal of the impugned award made by the reference Court, we find that seven issues were framed. The findings recorded on issue Nos. 1 to 5 are not under challenge and these appeals are confined only to the findings recorded under issue Nos. 6 and 7, which were as under:

"6. The relief to which claimants are entitled.

7. Possession of the land acquired was not taken as had been stated by MDA in para 26 of the written statement."

5. Learned counsel for the appellants vehemently contended that possession of the acquired land was delivered to the appellant on 24.5.2002 and therefore, it is liable to pay interest only from the said date.

6. On the other hand, learned counsel for the respondent-claimants contended that interest has rightly been awarded by the reference Court with effect from the date of the award.

7. Having heard learned counsel for the parties and perusal the record, we find that the reference Court has considered the two issues together and held that the appellant is liable to pay interest from 17.3.1992. However, we find that the reference Court has not recorded any specific and clear finding as to the date on which possession was delivered to the appellant. Though the argument advanced on behalf of the appellant in this regard has been noted by the reference Court that interest is liable to be paid with effect from 24.5.2002 on which possession is stated to have been delivered but without returning any specific finding with respect to the date of delivery of possession, it has proceeded to award interest with effect from 17.3.1992.

8. Sri B. Dayal, learned counsel for the appellant in support of his contention that the material cut off date for the purpose of payment of interest is the date of delivery of possession, has placed reliance on the pronouncement of the Hon'ble Apex Court in the case of:

1. D-Block Ashok Nagar (Sahibabad) Plot Holders Association Vs. State of U.P. and others,

2. R.L. Jain (D) by Lrs. Vs. DDA and Others,

3. D.D.A. Vs. Mahender Singh and Another,

4. S. Prabh Singh Dhillon and Others Vs. Hoshiarpur Improvement Trust and Others,

9. We have considered the argument advanced by learned counsel for appellant.

10. Section 23(1A) of the Land Acquisition Act provides as under:

"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 percent per annum on such market value for the period commencing on and from the date of the publication of the notification u/s 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."

11. Plain language used in Section 23(1-A) indicates that liability to pay interest shall accrue from the date of taking over possession.

12. In the case of S. Prabh Singh Dhillon (Supra), the Hon'ble Apex Court has observed as under:

"Under Section 34, 28 and 23(1-A) payment of interest and additional amount was intended to mitigate the hardship caused to the owner by deprivation of enjoyment of their property, after possession was taken."

13. Again in the case of D-Block Ashok Nagar (Sahibabad) Plot Holders Association (Supra), the Apex Court has held that the liability to pay interest arises only when the Land Acquisition Officer takes possession of the land after the award comes to be made.

14. The same view has again been reiterated in the case of D.O.A. v. Mahender Singh and another (Supra), by observing that Collector, Land Acquisition is liable to pay interest on statutory rates to such persons only when possession has been taken over before the payment of the entire compensation to them u/s 34.

15. Noticing conflict in the two pronouncements of the Apex Court in Shree Vijay Cotton and Oil Mills Ltd. Vs. State of Gujarat, and Union of India (UOI) Vs. Budh Singh and Others, a reference was made in the case of R.L. Jain (Supra). It may be relevant to quote observation made in the said reports:

"17. Shri Dave learned counsel for the appellant has also placed strong reliance on Satinder Singh and Others Vs. Amrao Singh and Others, wherein the question of payment of interest in the matter of award of compensation was considered by this Court. In this case the initial notification was issued u/s 4(1) of Land Acquisition Act, 1894 but the proceedings for acquisition were completed under East Punjab Act No. 48 of 1948. The High Court negatived the claim for interest on the ground that the 1948 Act made no provision for award of interest. After quoting with approval the following observations of Privy Council in Inglewood Pulp and Paper Co. Ltd. v. New Brunswick Electric Power Commission (supra):

"upon the expropriation of land under statutory power, whether for the purpose of private gain or of good to the public at large the owner is entitled to interest upon the principal sum awarded from the date when possession was taken, unless the statute clearly shows a contrary intention."

The Bench held as under:

"..........When a claim for payment of interest is made by a person whose immovable property has been acquired compulsorily he is not making claim for damages properly or technically so called; he is basing his claim on the general rule that if he is deprived of his land he should be put in possession of compensation immediately; if not, in lieu of possession taken by compulsory acquisition interest should be paid to him on the said amount of compensation."

16. The normal rule, therefore, is that if on account of acquisition of land a person is deprived of possession of his property he should be paid compensation immediately and if the same is not paid to him forthwith he would be entitled to interest thereon from the date of dispossession till the date of payment thereof. But here the land has been acquired only after the preliminary notification was issued on 9.9.1992 as earlier acquisition proceedings were declared to be null and void in the suit instituted by the land owner himself and consequently he was not entitled to compensation or interest thereon for the anterior period.

17. The reference Court has relied upon the decision given in the case of Smt. Lila Ghosh (Dead) through LR Shri Tapas Chandra Roy Vs. The State of West Bengal, In the said case, possession was taken by the authority even before issuance of notification u/s 4 of the Act. The said judgment has been distinguished and explained by the Hon'ble Apex Court in the case of R.L. Jain (Supra) and the ratio laid down in the case of Smt Lila Ghosh (Supra) should be read only in that context.

18. In the case in hand, the facts are different. It is not the case of the claimant that possession was taken before issuance of the notification u/s 4 of the Act. In such view of the matter, reliance placed by the reference Court on the ratio of the decision in the case of Smt. Lila Ghosh (Supra) is misplaced and the same is not applicable.

19. The issue being settled by the pronouncement of the Hon'ble Apex Court, the appellant is only liable to pay interest u/s 23(1-A) from the date of taking possession.

20. The parties are at issue with regard to the date when the possession of the land was taken over and since the reference Court has not recorded any finding in this respect, the matter is liable to be reconsidered and decided afresh in the light of the evidence already existing on the record of the case.

21. There being no dispute with regard to the market value and solatium and other statutory dues to be paid to the claimants, the said part of the Judgment of the reference Court stands confirmed.

22. Accordingly, all the three appeals are allowed in part and The issue regarding the date of taking possession and interest to be paid u/s 23(1-A) stands remitted back to the reference Court to be decided afresh in the light of the observations made hereinabove. The reference Court shall decide the issue expeditiously preferably within a period of six months from the date of receipt of certified copy of this judgment. In the facts and circumstances, there shall be no order as to costs.