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Himachal Pradesh High Court · body

2000 DIGILAW 171 (HP)

BHUBNESH BANGA v. LAND ACQUISITION COLLECTOR

2000-07-12

R.L.KHURANA

body2000
JUDGMENT (R.L. Khurana J):- Land measuring 1854.5 Sq. yards of Station Ward Bara Shimla, in Tehsil and District Shimla, came to be acquired for a public purpose, namely, construction of Ellysium - Devidhar Road, in pursuance of the notification dated 28.9.1983, issued under Section 4 of the Land Acquisition Act, 1894 (for short the Act) published on 15.10.1983. Such acquisition included land measuring 867.1 Sq. yards comprising of KhasraNos. 347/1, 348, 349 and 350/1, belonging to the appellants. The Collector, Land Acquisition, vide his award dated 23.9.1986 made under Section 11 of the Act, assessed the market value of the acquired land at the rate of Rs. 134.42 per Sq. yard and accordingly awarded compensation at the said rate to the appellants. In addition to, he awarded solatium at the rate of 30% of the amount of compensation. The Collector also awarded interest to the appellants as under : (a) at the rate of 12% per annum under Section 23(1-A) of the Act from the date of possession, that is , 1.4.1982 to 15.10.1983, the date of publication of the notification under Section 4 of the Act; and (b) at the rate of 9% per annum under Section 34 of the Act with effect from 1.4.1982, the date of possession, to 23.9.1986, the date of award and the tentative date of payment of the amount of compensation. 2. Feeling aggrieved by an being dissatisfied with the award of the Collector, the appellants applied to the Collector, under Section 18 of the Act, for reference of the dispute as to the amount of compensation to the court of District Judge, Shimla. The appellants claimed that though the market value of their acquired land as on the date of publication of the notification under Section 4 of the Act was not less than Rs. 1000/- per Sq. yard, they are entitled to compensation at the minimum rate of Rs. 250/- per Sq. yard. In addition, the appellants claimed damages as result of loss suffered by him due to severance of his land since only a part of Khasra No. 347 was acquired. A sum .of Rs. 50,000/-was also claimed as damages on account of damage caused to his land due to dumping of debris during the construction of the road. A grievance was also made as to inadequacy of the quantum of compensation awarded for the trees. 3. A sum .of Rs. 50,000/-was also claimed as damages on account of damage caused to his land due to dumping of debris during the construction of the road. A grievance was also made as to inadequacy of the quantum of compensation awarded for the trees. 3. The claims of the appellants were resisted by the respondents and it was inter - alia pleaded that just and reasonable compensation stood allowed and paid to the appellants. 4. The learned Additional District Judge (1) Shimla, vide award dated 11.1.1994 assessed the market value of the acquired land at Rs. 232/- per Sq. yard as against the rate of Rs. 250/- per Sq. yard claimed by the appellants. Accordingly, the appellants were held entitled to compensation for their acquired land at the above said rate. The learned Additional District Judge further awarded the following reliefs in favour of the appellants. (i) Solatium at the rate of the 30% on the enhanced amount under Section 23(2) of the Act; (ii) Interest of the rate of 12% per annum on the enhanced amount under Section 21(IA) of the Act, from 21.4.1984 the date of publication of notification under Section 4 of the Act till 23.9.1986, the date of the award by the Collector; (iii) Interest under Section 28 of the Act at the rate of 9% per annum on the enhanced amount for a period of one year from 23.9.1986 and thereafter at the rate of 15% per annum till the date of payment of the enhanced amount. 5. Insofar as other claims of the appellants are concerned, the same were negatived by the learned Additional District Judge for want of evidence. 6. Dissatisfied with the award dated 11.1.1994 of the learned Additional District Judge, the appellants are before this court by virtue of the present appeal assailing the findings as to assessment of market, value of the acquired land and as well as the denial of compensation for severance of holding. It has also been averred that interest as permissible under th law has not been awarded. The appellants contended that though the market value of their acquired land was not less than Rs. 1000/- per Sq. yard, they were claiming only at the rate of Rs. 500/- per Sq. yard. 7. It has also been averred that interest as permissible under th law has not been awarded. The appellants contended that though the market value of their acquired land was not less than Rs. 1000/- per Sq. yard, they were claiming only at the rate of Rs. 500/- per Sq. yard. 7. At the very outset, it may be stated that the appellants in their petition made under Section 18 of the Act, had restricted their claim as to market value of the land only to the extent of Rs. 250/- per Sq. yard. Therefore, it is not open to the appellants in this appeal to urge and claim a rate higher than the one claimed by them under Section 18 of the Act. 8. As stated above, the learned Additional District Judge had assessed the market value of the land at Rs./ 232/- per Sq. yard after taking into consideration the material brought on record by the parties. During the course of hearing, the learned counsel for the appellants could not point out anything on the record to shows that such assessment of market value is on the lower side. 9. On the basis of the material coming on the record, the assessment of market value appears to be on a higher side, but in the absence of a challenge to such assessment by the respondents either by way of an appeal or cross-objections, we do not propose to interfere with such assessment of the market value. 10. The claim of the appellant as to damages on account of severance of their holding has been rightly negatived by the learned Additional District Judge. There is no evidence worth the name in support of this claim. On the other hand, it is in evidence that the left over portion of Khasra NO. 347 measures 369 Sq. yard. With the construction of the road, this piece of land now abuts the road and it has become more valuable. 11. Therefore, no faults can be found in the findings of the learned Additional District Judge either as to the assessment of market value of the acquired land or as to the negation of the claim of the appellants with regard to the damages on account of severance of their holding. 12. 11. Therefore, no faults can be found in the findings of the learned Additional District Judge either as to the assessment of market value of the acquired land or as to the negation of the claim of the appellants with regard to the damages on account of severance of their holding. 12. A contention was raised by the learned counsel for the appellants that an error has been committed by the learned Additional District Judge, while granting interest under Sections 23(1-A) and 28 of the Act as amended by the Amendment Act No. 68 of 1984. 13. Section 23( 1-A) of the Act as amended by the Amendment Act No. 68 of 1984 provides:- "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 12% per annum on such market value for the period commencing on and from the date of publication of 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 of possession of the land, whichever is earlier". 14. As noted earlier, the learned Additional District Judge has awarded the amount under Section 23 (1 -A) of the Act at 12% per annum on the enhanced amount from 21.4.1984 to 23.9.1986, the date of the award of the Collector. 15. The award of the amount under Section 23(1-A) by the learned Additional District Judge, therefore, on the face of it is not correct. The notification under Section 4 of the Act, in the present case was published on 15.10.1983. It is the admitted case of the parties that the possession of the acquired land was taken on 1.4.1982 that is prior to the issuance and publication of the notification under Section 4 of the Act. 16. The notification under Section 4 of the Act, in the present case was published on 15.10.1983. It is the admitted case of the parties that the possession of the acquired land was taken on 1.4.1982 that is prior to the issuance and publication of the notification under Section 4 of the Act. 16. A bare perusal of the provisions contained in section 23(1-A) of the Act, quoted above, shows that an amount equal to 12% per annum is payable to the persons whose land has been acquired as under:- (a) on the market value of the land as may be assessed by the court; and (b) for the period on and from the date of publication of the notification under Section 4 of the Act upto the date of the Award of the Collector or the date of taking of possession of the acquired land, whichever is earlier. 17. Admittedly, the possession of the acquired land, in the present case, was taken on 1.4.1982, prior to the publication of the notification under Section 4 of the Act. The question, therefore, arising for consideration is as to how the amount payable under Section 23(1-A) of the Act is to be determined when the possession of the acquired land was taken prior to the publication of the notification under Section 4 of the Act? 18. The answer to the above question can be found in a decision of the Division Bench of this court, of which one of us (R.L. Khurana, J) was a member, in R.F.A No. 94 of 1991 State ofH.P. vs. Dharam Das decided on 4.4.1997. In this case, the possession of the land belonging to the claimant Dharam Dass was taken by the State in October, 1972 for the purpose of construction of Balghar - Tihana Road, without any formal acquisition of the land. Shri Dharam Dass, above named, filed a writ petition, being CWP No. 125/1986, making a grievance of the State having taken possession of his land for the purpose of construction of a road without having acquired the same and without having paid any compensation therefore. Shri Dharam Dass, above named, filed a writ petition, being CWP No. 125/1986, making a grievance of the State having taken possession of his land for the purpose of construction of a road without having acquired the same and without having paid any compensation therefore. The said writ petition came to the decided on 23.7.1986, while disposing of the writ, the following directions were issued by the Division Bench of this court: "(i) The acquired proceedings shall be completed and compensation in accordance with law shall be paid to the petitioner on or before March 31,1987; (ii) The petitioner shall be paid the sum of Rs. 2500/- as and by way of interim compensation, without prejudice to the rights and contentions to claim the compensation due to him in accordance with law in the course of the proceedings under the Act. The interim compensation will be paid to him on or before August 15,1986, after explaining the aforesaid position against a receipt to be executed by him acknowledging the payment towards the ultimate compensation to which he becomes entitled in accordance with law; and (iii) On the amount of compensation payable to the petitioner in respect of land, interest at the rate of 12 per cent per annum shall be paid from the date of the taking over of possession till the date of payment of interim compensation and of final compensation if there is enhancement. The interest payable accordingly is in the nature of an equitable compensation and such interest will be in addition to the compensation, solatium and interest at the statutory rate which will be paid to the petitioner under the law in respect of land, whether awarded by the Collector or enhanced by the Court, and such interest will not be taken into consideration in any proceedings under the Act while awarding the statutory compensation. It is clarified that the interest accordingly payable will be confined to the compensation in respect of land only and will not be payable on the compensation awarded or awardable in respect of the damage to the fruit trees". 19. Feeling aggrieved by the above said order of the Division Bench of this court, the State went up in appeal before the Apex Court by Special Leave, being State of H.P. & Ors. vs. Dharam Dass 1995 (5) SCC 683. 19. Feeling aggrieved by the above said order of the Division Bench of this court, the State went up in appeal before the Apex Court by Special Leave, being State of H.P. & Ors. vs. Dharam Dass 1995 (5) SCC 683. The appeal filed by the State was allowed and the order dated 23.7.1986 of the Division Bench of this court to the extent of granting interest at the rate of 12% per annum, on equitable grounds, from the date of taking of possession till the date of deposit of the amount of compensation, being illegal was set aside. The direction to pay additional amount under section 23(1-A) of the Act from the date of taking possession till the date of the making of the award by the Collector was held to be valid. It was held that since the claimant had not challenged the validity of the notification under Section 4 of the Act, the possession taken must be referable to it. 20. In case of State of H.P. vs. Dharam Dass (supra), notification under Section 4 of the Act was made on 27.2.1986 and the award by the Collector under Section 11 of the Act was made on 31.3.1987. The possession of the acquired land was taken on 1.10.1972 long before the publication of the notification under Section 4 of the Act. 21. Following the ratio laid down by the Apex Court, the Division Bench of this Court in R.F. A. No. 94 of 1991 (supra) had approved and allowed the amount under Section 23(1-A) of the Act at the rate of 12% per annum on the market value of the land as assessed by the court from 1.10.1972, the date of taking of possession of the land till 31.3.1997, the date o the award. A similar view has been taken by a Division Bench of Gujarat High Court in Samjuba Merambhai vs. 2nd Special Land Acquisition Officer, Ahmedabad & Anr. [AIR 1998 Gujarat 112.] 22. In Assistant Commissioner Gadag Sub Division, Gadag vs. Matha-pathi Basavannewwa & Ors, 1995 (6) SCC 355, the possession of the land was taken on 23.1.1971 while the notification under Section 4 of the Act was published on 2.8.1984 and the award was made by the Collector on 15.1.1986. A question arose as to from what date the claimants therein were entitled to the benefit under Section 23(1-A) of the Act. A question arose as to from what date the claimants therein were entitled to the benefit under Section 23(1-A) of the Act. While holding that the claimant under Section 23 (1-A) of the Act would be entitled to benefit at the rate of 12% per annum the date of taking of possession till the date of the award, it was observed:- "The object of introducing Section 23(1-A) is to mitigate the hardship caused to the owner of the land, who has been deprived of the enjoyment of the land by taking possession from him and using it for public purpose, because of considerable delay in making the award and offering payment thereof. To obviate such hardship, Section 23(1-A) was introduced and the legislature envisaged that the owner of the land is entitled to 12 per cent per annum additional amount on the market value for a period commencing on and from the date of the publication of the notification under Section 4(1) of the Act in respect of such land upto the date of the award of the Collector or the date of taking possession of the land, whichever is earlier...." 23. In the present case, as noted earlier, the possession of the land of the appellant was taken on 1.4.1982, while the award of the Collector was made j on 23.9.1986. Therefore, the appellants are entitled to additional amount under j Section 23(1-A) of the Act at the rate of 12% per annum from 1.4.1982 to l 23.9.1986. 24. Next comes the question of award of interest under Section 28 of the Act. Section 28 reads:- . Therefore, the appellants are entitled to additional amount under j Section 23(1-A) of the Act at the rate of 12% per annum from 1.4.1982 to l 23.9.1986. 24. Next comes the question of award of interest under Section 28 of the Act. Section 28 reads:- . "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 oh 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". 25. The words "taking of possession of the land" appearing in Section 28 of the Act, came up for consideration before a Fuil Bench of the High Court of Andhra Pradesh in Revenue Divisional Officer, Guntur vs. Vasireddy Rama Bhanu Bhupa and others [AIR 1970 AP 262.] In the said case, the proceedings for the acquisition of the land involved therein were started by the publication of a notification under Section 4 of the Act on 12.4.1956 at the instance of the Guntur Municipality. The Collector, Land Acquisition, gave his award on 31.3.1958. The Guntur Municipality, much prior to the initiation of the acquisition proceedings, had taken possession of the land on 30.11.1950. The Collector, Land Acquisition, besides offering compensation for the value of the land, awarded solatium at the rate of 15% and interest at the rate of 6% per annum on the compensation amount from 30.11.1950, that is, when the land was taken possession of by the Municipality till 31.3.1958, the date of the award. The Collector, Land Acquisition, besides offering compensation for the value of the land, awarded solatium at the rate of 15% and interest at the rate of 6% per annum on the compensation amount from 30.11.1950, that is, when the land was taken possession of by the Municipality till 31.3.1958, the date of the award. On a reference to the District Court, the compensation was enhanced and interest at the rate of 6% per annum was awarded on the enhanced amount from 30.11.1950 till the date of payment. On appeal to the High Court, it was contended that interest under Section 28 of the Act could be awarded on the enhanced amount of compensation only from the date when the Collector took possession of the land to the date of payment of such excess amount into the court, and that taking of possession under the section could only mean taking of possession in pursuance of or under Act, that is, when the possession of the land is taken by the Government immediately after the Collector makes an award, and that it is only from the date of taking of such possession that interest becomes payable under the section. Repelling the contentions, the Full Bench held:- "Section 28 of the Act states that the Collector shall pay interest from the date on which he took possession of the land. It does not say that the Collector should pay interest only from the date on which he takes possession under the Act. On a plain reading of the section it appears to us that the interest is payable from the date when the Collector takes possession, whether he taken possession under any of the provisions of the Act or by private negotiations or otherwise in anticipation of valid proceedings under the Act for the acquisition of the land in question. That section 28 of the Act has been so understand is also clear from the provisions of Chapter XXVI of the Land Acquisition Manual relating to payment of interest on the compensation awarded. Under paragraph 3 of the said Chapter it is stated as follows: Independently of the Land Acquisition Act, it may become necessary to take possession of land urgently.... Under paragraph 3 of the said Chapter it is stated as follows: Independently of the Land Acquisition Act, it may become necessary to take possession of land urgently.... The Officer entering upon the should record a statement from the owner possession he should if possible obtain a further statement that the owner will not claim interest from the date of taking possession. In cases in which the owner declines to give the amount of compensation should be included in the award. 26. Even assuming that the expression taking possession of the land under Section 28 of the Act, would only mean taking possession of the land under or in pursuance of the Act we do not see any reason why the taking of possession of the land prior to the Land Acquisition proceedings without any objection by the owner (in this case by private negotiation with his consent) followed by valid proceedings under the Act should not be held to be taking possession of the land under the Act. The Act does not prescribe when the Collector representing the Government should take possession of the land. Under section 16 of the Act he may take possession after he has made an award, but there is nothing in that section or in any other provision of the Act, which prevents the Collector from taking possession of the land earlier with the consent of the owner. On the other hand there are provisions in the Act, for instance, Section 17 which authorises the Collector, in case of urgency to take possession of any waste or arable land needed for public purposes, after expiration of fifteen days from the publication of the notice mentioned in Section 9(1) of the Act...." 27. In Satinder Singh vs. Umrao Singh, [AIR 1961 SC 908], one of the question in controversy was whether the amount of compensation awarded for the property acquired under the East Punjab Requisition of Immovable Property (Temporary Powers) Act (48 of 1948) should carry a reasonable rate of interest from the date when the claimants lost possession of their properties. The following pertinent observations made in that contest in the decision rendered in that case are reproduced herein below: "What then is the contention raised by the claimants? They contended that their immovable property has been acquired by the State has taken possession of it. The following pertinent observations made in that contest in the decision rendered in that case are reproduced herein below: "What then is the contention raised by the claimants? They contended that their immovable property has been acquired by the State has taken possession of it. Thus they have been deprived of the right to receive the income from the property and there is a time lag between the taking of the possession by the State and the payment of compensation by it to the claimants. During this period they have been deprived of the income of the property and they have not been able to receive interest from the amount of compensation. Stated broadly the act of taking possession of immovable property generally implies an agreement to pay interest on the value of the property and it is on this principle that a claim for interest is made against the State...It would thus be noticed that the claim for interest proceeds on the assumption that when the owner of immovable property loses possession of it he is entitled to claim interest in place of right to retain possession.. ..When a claim for payment of interest i s made by a person whose immovable property has been acquired compulsorily he is not making claim for damages property or technically so called; he is basing his claim on the general rule that if he is deprived of his land he would 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....We have already seen that the right to receive interest in lieu of possession of immovable property taken away either by private treaty or by compulsory acquisition is generally regarded by judicial decisions as an equitable right, and so, the proviso to S.I of the Interest Act saves the said right. We must accordingly hold that the High Court was in error in rejecting the claimants case for the payment of interest on compensation amount, and so we direct that the said amount should carry interest at 4% per annum from the date when respondent 2 took possession of the claimants lands to the date on which it deposited or paid the amount of compensation to them." 28. A similar question also arose for consideration before a single Bench of this Court in Land Acquisition Collector, HP PWD Solan & Anr. vs. Jeet Ram, AIR 1987 HP 71. In this case the possession of the land was taken over by the State on 1.6.1958. The Collector, Land Acquisition, made his award on 1.6.1983. The learned single Judge following the ratio of the Full Bench of the High Court of Andhra Pradesh in the above referred to case and the principle laid down by the apex court in Satinder Singh v. Umrao Singh (supra), held:- "The decision in Vasireddy Ramas case [AIR 170 Andhra Pradesh 262] (FB) supra, with which I am in respectful agreement, is an authority for the proposition that the liability to pay interest on the amount of compensation does not arise only from the date on which the Collector take possession under the Act. The liability arises from the date when the Collector takes possession, irrespective of whether such possession is taken under any of the provisions of the Act or by private negotiations or otherwise. Besides the Act of taken possession before the initiation of acquisition proceedings without any objection on the part of the owner followed by valid proceedings under the must be regarded as tanta-mounting to taking possession of the land under the Act. In any case, as held in Satinder Singhs case, [AIR 1961 SC 908] (supra), as well as in Vasireddy Ramas case (supra), interest is payable on equitable principles on the compensation amount from the date when the owner is deprived of the possession of the land. The very act of taking possession of immovable property generally implies an agreement to any interest on the value of the property. A person whose immovable property has been acquired compuisorily is entitled to base his claim for interest on the general rule founded on equitable principles that he should be put in possession of compensation immediately; if not, in lieu of possession taken by compulsory acquisition, interest should be paid t him on the amount of compensation from the date of dispossession. In view of the foregoing legal position, which must be regarded as well settled, the submission made but he learned Advocate General that the liability to pay interest arose, in the present case, earliest on June 1, 1983, when the award was announced must be rejected." 29. In view of the foregoing legal position, which must be regarded as well settled, the submission made but he learned Advocate General that the liability to pay interest arose, in the present case, earliest on June 1, 1983, when the award was announced must be rejected." 29. The view taken by the Full Bench of the High Court of Andhra Pradesh in Vasireddy Ramas case (supra) and that of the learned single Judge of this court in Jeet Rams case (supra) was approved and followed by a Division Bench of this court in R.F.A.No 94 of 1991, State of H.P. vs. Dharam Dass (supra) and it was held that the claimants therein would be entitled to interest under Section 28 of the Act from the date of taking of possession till the date of payment/deposit of the enhanced amount in court. 30. A similar view was taken in L.A.C., H.P.P. W.D., Kullu vs. Smt. Dugli Devi & Ors., 1997 (2) Sim.L.C. 461. 31. The learned Additional District Judge, therefore, the erred in awarding interest under section 28 of the Act on and from 23.9.1986, that is, the date of the award of the Collector. The appellants are entitled to interest on the enhanced amount under Section 28 of the Act at the rate of 9% per annum from 1.4.1982, the date of taking o possession for one year and thereafter at the rate of 15% per annum till the date of payment/deposit of the enhanced amount. 32. It may be noticed that the Collector also had awarded interest under Section 34 of the Act on and from the date of taking of possession of the land viz., 1.4.1982. 33. Resultantly, the present appeal is partly allowed and the award dated 11.1.194 of the learned Additional District Judge is modified to the extent indicated above. 34. Parties are left to bear their own costs.