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2014 DIGILAW 402 (BOM)

Ananda Baburao Pawagi v. State of Maharashtra

2014-02-14

A.S.OKA, M.S.SONAK

body2014
Judgment A.S. Oka, J. 1. By this Petition under Article 226 of the Constitution of India, a writ of mandamus is sought directing the second Respondent (Special Land Acquisition Officer) to make payment of the amount payable under the Award made on 2nd May 2011 (for short “the said award”) under Subsection (2) of Section 28A of the Land Acquisition Act, 1894 (for short “the said Act”) together with interest accrued thereon till the date of payment. The specific prayer is that the entire amount of compensation including the interest be paid to the Petitioners on the Petitioners furnishing a bank guarantee for the entire amount. 2. A land owned by the Petitioners was acquired under the provisions of the said Act for the public purposes of submergence of Neera Deoghar Project. The award under Section 11 of the said Act was made on 28th February 1996. The Petitioners did not apply for a reference under Section 18 of the said Act. An application under Subsection (1) of Section 28A of the said Act was made by the Petitioners for redetermination of the compensation on the basis of the judgment and award made by the Civil Court on 24th August 2004 in Land Acquisition Reference No.70 of 1997 along with the connected Land Acquisition References. After holding an inquiry as contemplated by Subsection (2) of Section 28A of the said Act, on 2nd May 2011, an award under Subsection (2) of Section 28A of the said Act was made by the second Respondent. By the said award, enhanced compensation was offered to the Petitioners. The second Respondent granted statutory benefits under Sections 23(1A) and 23(2) of the said Act. On the enhanced amount of compensation, interest at the rate of 9% per annum was granted for a period of one year from 28th February 1996. The possession of the acquired land was taken over on the said date. For further period from 28th February 1997 till the date of the award (i.e. 2nd May 2011), the interest was made payable at the rate of 15% per annum till the date of the Award. The fourth Respondent which is claiming to be the acquiring body was also heard by the Special Land Acquisition Officer while making the said award. 3. The fourth Respondent which is claiming to be the acquiring body was also heard by the Special Land Acquisition Officer while making the said award. 3. It must be noted here that as the Petitioners were not made aware of the outcome of the inquiry held under Subsection (2) of Section 28A of the said Act, the Petitioners filed Writ Petition No.5019 of 2012 in this Court which was disposed of by this Court by permitting the Petitioners to make a representation. Accordingly, the Petitioners made a representation to the Special Land Acquisition Officer. By letter dated 6th November 2012, the Deputy Collector (Land Acquisition) informed the Petitioners' Advocate that the award has been made on 2nd May 2011. A copy of the award was forwarded along with the said letter to the Advocate for the Petitioners. It was stated in the said letter that the Executive Engineer of the of Neera Deoghar Project has been informed by the letter dated 2nd May 2011 to deposit the compensation amount. The grievance in the Petition is that though the award was made on 2nd may 2011, the compensation payable under the said award has not been paid. Therefore, the present Petition was filed on 30th January 2013. The Petitioners have claimed interest on the unpaid amount. The Petitioners have shown readiness to furnish a bank guarantee for the entire amount. 4. There is a reply filed by the fourth Respondent (Maharashtra Krishna Valley Development Corporation). A contention has been raised in the reply that in the land Acquisition Reference No.70 of 1997 and other connected References, the fourth Respondent was not made a party and even a notice was not issued by the Reference Court to the fourth Respondent. It is pointed out that the State Government has preferred an Appeal against the judgment and award passed in the Land Acquisition Reference No.70 of 1997 which is pending. It is pointed out that in Appeal, the execution and operation of the judgment and award in Land Acquisition Reference No.70 of 1997 has been stayed. It is contended that as the Land Acquisition Reference No.70 of 1997 was decided without notice to the fourth Respondent, the said award is liable to be set aside. It is pointed out that in Appeal, the execution and operation of the judgment and award in Land Acquisition Reference No.70 of 1997 has been stayed. It is contended that as the Land Acquisition Reference No.70 of 1997 was decided without notice to the fourth Respondent, the said award is liable to be set aside. It is pointed out that in the Appeal preferred by the State Government against the said judgment and award, an Application made by the fourth Respondent for intervention is pending. 5. There is a reply filed by Samiksha R. Chandrakar, Deputy Collector (Land Acquisition Officer No.17, Pune). In the reply, it is stated that the compensation amount was received by her office by a Cheque dated 27th December 2013 which was forwarded to her office by the fourth Respondent along with a covering letter dated 4th January 2014. It is pointed out that the said letter was actually received by her office on 20th January 2014. 6. The submission of the learned counsel appearing for the Petitioners is that even under the award under Subsection (2) of Section 28A of the said Act subject matter of this Petition, the State Government proceeded to grant interest in accordance with Section 34 of the said Act. The learned counsel appearing for the Petitioners pointed out that the interest at the rate of 9% per annum has been granted for a period of one year from the date on which the possession of the acquired land was taken over and for the subsequent period, the interest at the rate of 15% per annum has been granted. He pointed out that the interest is made payable only till the date of the award and for the further period, the interest is not awarded. The learned counsel submitted that in view of Section 34 of the said Act, the Petitioners were entitled to interest in terms of Section 34 of the said Act till the date of payment of the amount. He urged that Section 34 of the said Act is squarely applicable. He urged that in any event, the Petitioners were entitled to receive the compensation on declaration of Award on 2nd May 2011, but they are deprived of the said amount on account of the gross delay on the part of the fourth Respondent in depositing the compensation amount. He urged that Section 34 of the said Act is squarely applicable. He urged that in any event, the Petitioners were entitled to receive the compensation on declaration of Award on 2nd May 2011, but they are deprived of the said amount on account of the gross delay on the part of the fourth Respondent in depositing the compensation amount. He urged that the Petitioners are thus entitled to interest in accordance with Section 34 of the said Act. The learned AGP submitted that there is no default on the part of the State Government or its officers. The fourth Respondent-acquiring body belatedly deposited the amount on 20th January 2014 and, therefore, the entire delay is attributable to the fourth Respondent. 7. The learned counsel appearing for the fourth Respondent pointed out that the award under Subsection (2) of Section 28A of the said Act which is the subject matter of this Petition, is based on the award made in the Land Acquisition Reference No.70 of 1997. He submitted that the fourth Respondent being the Acquiring Body was a necessary and proper party to the Reference and in any event, the Reference Court ought to have issued a notice to the fourth Respondent as the fourth Respondent had right to be heard. He submitted that as the award in the Land Acquisition Reference No.70 of 1997 has been passed without issuing notice to the fourth Respondent, the said award is null and void and in any event, the same deserves to be quashed and set aside in the pending Appeal. He, therefore, submitted that in fact the Petitioners are not entitled to the compensation amount and in any event, they cannot claim interest. 8. Learned counsel appearing for the Petitioners relied upon a decision of the Apex Court in the case of Chandra Bansi Singh and Others v. State of Bihar and Others (1984)4 SCC 316 ). He urged that the Writ Court in exercise of jurisdiction under Article 226 of the Constitution of India exercises jurisdiction in equity and, therefore, after finding that financial loss has been caused to the citizens, compensation in the form of interest can be always granted by the Writ Court. 9. We have given careful consideration to the submissions. The factual aspects are not at all in dispute. 9. We have given careful consideration to the submissions. The factual aspects are not at all in dispute. It will be necessary to advert to the provisions of the said Act especially regarding payment of compensation. Under Section 11 of the said Act, the Collector is required to make an award specifying the compensation which should be allowed for the acquired land. Subsection (2) of Section 12 of the said Act provides that the Collector shall give immediate notice of the award to the persons interested. Section 16 of the said Act provides that after the Collector makes an award under Section 11 of the said Act, he may take possession of the land which thereupon vests absolutely in the State Government. Section 17 of the said Act is the only provision which permits the possession of the acquired land to be taken over before the award under Section 11 of the said Act is made. However, before taking possession of the land, the Collector is under an obligation to make payment of 80% of the compensation for such land as estimated by him. Thus, for taking advance possession of the acquired land, 80% of the compensation, which is tentatively payable, has to be offered to the Claimants. Thus, the scheme of the said Act appears to be that when Section 17 of the said Act is invoked, even before the award under Section 11 is made, ad hoc compensation is required to be offered to the Claimants. If urgency clause of Section 17 of the said Act is not invoked, the possession can be taken over only after the service of the notice under Subsection (2) of Section 12 of the said Act. Thus, from the scheme of the Act, it appears that unless the possession is taken over by a private agreement, before taking over the possession of the land notified for acquisition, the compensation amount has to be offered to the Claimants. Section 31 of the said Act reads thus: “31. Payment of compensation or deposit of same in Court.- (1) On making an award under section 11, the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next subsection. Payment of compensation or deposit of same in Court.- (1) On making an award under section 11, the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next subsection. (2) If they shall not consent to receive it, or if there be no person competent to alienate the land, or if there be any dispute as to the title to receive the compensation or as to the apportionment of it, the Collector shall deposit the amount of the compensation in the Court to which a reference under section 18 would be submitted: Provided that any person admitted to be interested may receive such payment under protest as to the sufficiency of the amount: Provided also that no person who has received the amount otherwise than under protest shall be entitled to make any application under section 18: Provided also that nothing herein contained shall affect the liability of any person, who may receive the whole or any part of any compensation awarded under this Act, to pay the same to the person lawfully entitled thereto. (3) Notwithstanding anything in this section the Collector may, with the sanction of the[ appropriate Government] instead of awarding a money compensation in respect of any land, make any arrangement with a person having a limited interest in such land, either by the grant of other lands in exchange, the remission of land-revenue on other lands held under the same title, or in such other way as may be equitable having regard to the interests of the parties concerned. (4) Nothing in the last foregoing subsection shall be construed to interfere with or limit the power of the Collector to enter into any arrangement with any person interested in the land and competent to contract in respect thereof.” This Section which forms part of the Chapter V under the heading “Payment of Compensation”, lays down a general Rule that on making of an Award under Section 11, the Collector shall tender compensation to the person interested entitled thereto. The exceptions to the Rule are provided in the Section. 10. Now, it will be necessary to make a reference to Section 28A of the said Act which reads thus: “28A. The exceptions to the Rule are provided in the Section. 10. Now, it will be necessary to make a reference to Section 28A of the said Act which reads thus: “28A. Re-determination of the amount of compensation on the basis of the award of the Court. – (1) where in an award under this part, the court allows to the applicant any amount of compensation in excess of the amount awarded by the collector under section 11, the persons interested in all the other land covered by the same notification under section 4, subsection (1) and who are also aggrieved by the award of the Collector may, notwithstanding that they had not made an application to the Collector under section 18, by written application to the Collector within three months from the date of the award of the Court require that the amount of compensation payable to them may be re-determined on the basis of the amount of compensation awarded by the court: Provided that in computing the period of three months within which an application to the Collector shall be made under this subsection, the day on which the award was pronounced and the time requisite for obtaining a copy of the award shall be excluded. (2) The Collector shall, on receipt of an application under subsection (1), conduct an inquiry after giving notice to all the persons interested and giving them a reasonable opportunity of being heard, and make an award determining the amount of compensation payable to the applicants. (3) Any person who has not accepted the award under subsection (2) may, by written application to the Collector, required that the matter be referred by the Collector for the determination of the Court and the provisions of sections 18 to 28 shall, so far as may be, apply to such reference as they apply to a reference under section 18.” 11. Section 28A was brought on the Statute Book by the Amendment Act of 1984. Section 28A was brought on the Statute Book by the Amendment Act of 1984. Clause (ix) of the Statement of Objects and Reasons of the Amendment Act reads thus: “(ix) Considering that the right of reference to the civil court under Section 18 of the Act is not usually taken advantage of by inarticulate and poor people and is usually exercised by the comparatively affluent landlowners and that this causes considerable inequality in the payment of compensation for the same or similar quality of land to different interest parties, it is proposed to provide an opportunity to all aggrieved parties whose land is covered under the same notification to seek redetermination of compensation, once anyone of them has obtained orders for payment of higher compensation from the reference court under Section 18 of the Act.” (Underline supplied ) 12. In the case of Union of India and Another v. Pradeep Kumari and Others (1995)2 SCC 736 ), in Paragraph 8, the Apex Court has observed thus: “8. We may, at the outset, state that having regard to the Statement of Objects and Reasons, referred to earlier, the object underlying the enactment of Section 28A is to remove inequality in the payment of compensation for same or similar quality of land arising on account of inarticulate and poor people not being able to take advantage of the right of reference to the civil court under Section 18 of the Act. This is sought to be achieved by providing an opportunity to all aggrieved parties whose land is covered by the same notification to seek redetermination once any of them has obtained orders for payment of higher compensation from the reference court under Section 18 of the Act. Section 28A is, therefore, in the nature of a beneficent provision intended to remove inequality and to give relief to the inarticulate and poor people who are not able to take advantage of right of reference to the civil court under Section 18 of the Act. In relation to beneficent legislation, the law is well-settled that while construing the provisions of such a legislation the court should adopt a construction which advances the policy of the legislation to extend the benefit rather than a construction which has the effect of curtailing the benefit conferred by it. In relation to beneficent legislation, the law is well-settled that while construing the provisions of such a legislation the court should adopt a construction which advances the policy of the legislation to extend the benefit rather than a construction which has the effect of curtailing the benefit conferred by it. The provisions of Section 28A should, therefore, be construed keeping in view the object underlying the said provision.” (Underlines supplied) 13. The object seems to be to help a person interested, who was for the various reasons unable to file an application for Reference under Section 18 of the said Act. The object seems to be to pay the compensation to the person interested to which in law he was entitled to by way of an award under Section 11 of the said Act. The object is to pay compensation to him to which he was legitimately entitled to on the date of passing an award under Section 11 of the said Act. 14. If Subsections (2) and (3) of Section 28A are read together, it appears that an Award under Subsection (2) appears to be on par with an Award under Section 11 of the said Act in so far as the provisions of reference under Section 18 of the said Act are concerned. Once an Award under Subsection (2) of Section 28A of the said Act is made, it replaces an Award under Section 11 for all purposes as it becomes the offer of the Appropriate Government. The payment of compensation under such Award will be also governed by Subsection (1) of Section 31 of the said Act in so far as the same is applicable. Hence, on making of an Award under subsection (2) of Section 28A, the Collector is under an obligation to tender the compensation awarded to the persons interested entitled thereto. 15. We have already held that the scheme of the said Act is that the compensation must be offered to the persons interested before taking over the possession of the land. The persons interested become entitled to receive compensation immediately on declaration of an Award under Section 11 of the said Act which is required to be offered to the person entitled to compensation by issuing a notice under Subsection (2) of Section 12 of the said Act. 16. The persons interested become entitled to receive compensation immediately on declaration of an Award under Section 11 of the said Act which is required to be offered to the person entitled to compensation by issuing a notice under Subsection (2) of Section 12 of the said Act. 16. In this context, Section 34 of the said Act will have to be taken into consideration. Section 34 of the said Act forms a part of Chapter V which deals with the payment of compensation. We have already adverted to Subsection (1) of Section 31 of the said Act which provides that on making an award under Section 11, the Collector shall tender payment of compensation awarded by him to the persons interested entitled to. Section 34 of the said Act reads thus: “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 or 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.]” 17. Section 34 provides for payment of interest on par with Section 28 of the said Act. However, the power to grant interest under Section 28 vests in the Court and not in the Collector. Section 34 confers the power on the Collector to grant interest when the compensation is not paid or deposited on or before taking over the possession of the acquired land. Use of the word “shall” indicates that the provision is mandatory. Similar provision under Section 28 of the said Act is held to be mandatory. The object of both Sections 28 and 34 of the said Act is to compensate a Claimant who does not receive the compensation before the dispossession through he is legitimately entitled to it. 18. Use of the word “shall” indicates that the provision is mandatory. Similar provision under Section 28 of the said Act is held to be mandatory. The object of both Sections 28 and 34 of the said Act is to compensate a Claimant who does not receive the compensation before the dispossession through he is legitimately entitled to it. 18. In the present case, in the award made under Subsection (2) of Section 28A of the said Act, the Land Acquisition Officer has granted interest from the date of dispossession at the rate of 9% per annum for the first year and at the rate of 15% per annum for the second year. But he has erroneously stated that he has invoked the power under Section 28 of the said Act for granting the interest which is only the power of the Court. 19. As far as the applicability of Section 34 of the said Act is concerned, in the case of Union of India v. Pradeep Kumari and Others (supra), the Apex Court dealt with the contention that while redetermining the compensation under Subsection (2) of Section 28A of the said Act, it is not permissible for the Collector to award interest on the payment of compensation. In paragraph 13 of the decision, the Apex Court dealt with the said submission. In Paragraph 13, the Apex Court has held thus:- “13. …..It is no doubt true that under Section 28 only the court can direct payment of interest on the excess amount awarded as compensation and the Collector is not competent to award interest on the additional amount of compensation under the said provision. But subsection (2) of Section 28A provides that after an application has been submitted under subsection (1) of Section 28A the Collector after conducting an inquiry makes an award determining the amount of compensation payable to the applicants and under subsection (3) of Section 28A any person who has not accepted the award under subsection (2) may move the Collector requiring that the matter be referred for determination to the court and the provisions of Sections 18 to 28 have been made applicable to such reference. This would show that after an application has been submitted under Section 28A(1) for redetermination of the amount of compensation the process of such redetermination results in making of an award by the Collector and a person not accepting the said award can move the Collector to refer the matter to the court for determination and such reference is governed by Sections 18 to 28. If that is so, Section 34 of the Act would be applicable to the award that is made by the Collector under subsection (2) of Section 28A and it would be permissible for him to award interest under Section 34 on the additional amount of compensation awarded by him. The second contention urged by Shri Goswamy is, therefore, rejected.” (Under added) 20. Hence, while making an award under Subsection (2) of Section 28A of the said Act, the Collector can always invoke Section 34 of the said Act. As stated earlier, in the present case, the Collector has granted interest as provided in Section 34 of the said Act upto the date of the award though he has purported to invoke the power under Section 28 of the said Act. Merely because a Reference is made to a wrong Section, the exercise of power does not become bad. The Land Acquisition Officer was, therefore, justified in granting interest at the rates of 9% per annum and 15% per annum as provided in Section 34 of the said Act. But, he ought to have allowed interest till the date of payment of compensation or the date of deposit. 21. It is true that the statute does not provide for any time limit for payment of compensation in terms of the award made according to Subsection (2) of Section 28A of the said Act. But in view of applicability of Subsection (1) of Section 31 of the said Act, it is obvious that the amount has to be offered immediately after the Award is made. Under Section 34 of the said Act, the interest is payable till the date of payment of compensation or the date of deposit of compensation. 22. In the facts of the case, the fourth Respondent, which is claiming to be the Acquiring Body, was given an opportunity of being heard by the Collector before making the award dated 2nd May 2011. 22. In the facts of the case, the fourth Respondent, which is claiming to be the Acquiring Body, was given an opportunity of being heard by the Collector before making the award dated 2nd May 2011. Paragraph 5 of the award records that an opportunity was granted to the Acquiring Body and in fact a submission in writing was submitted by the Acquiring Body. It is not the case made out by the fourth Respondent in the affidavit that the said Respondent was not aware of the award. The only contention raised by the fourth Respondent is that the award under Section 18 of the said Act on which the reliance was placed by the Petitioners is illegal as the notice of the Reference was not served to the fourth Respondent. However, as of today, the award is not set aside and the Appeal preferred by the State is pending. The Petitioners have offered to submit a bank guarantee for the amount withdrawn by them. Therefore, in the event the award in Reference under Section 18 of the said Act, which was the basis of the Application under Subsection (1) of Section 28A of the said Act, is set aside, the Acquiring Body will be adequately protected. Surprisingly, in the affidavit-in-reply, the fourth Respondent has not at all given reasons for delay in depositing the compensation amount in terms of the award dated 2nd May 2011. The fourth Respondent has not chosen to challenge the award under Subsection (2) of Section 28A of the said Act. The affidavit of the Deputy Collector shows that the amount of compensation was received from the fourth Respondent by the State Government on 20th January 2014. The Petitioners were legitimately and lawfully entitled to compensation amount on the very date on which the award was made. However, for two years and nine months, the Petitioners have been deprived of the compensation amount. Therefore, the interest as provided in Section 34 of the said Act will have to be paid by the Respondents till the date of the deposit of the compensation amount i.e. 20th January 2014. The State Government which is the Appropriate Government is primarily liable to pay compensation to the persons interested as Subsection (1) of Section 31 of the said Act enjoins the Collector to offer the compensation. The State Government which is the Appropriate Government is primarily liable to pay compensation to the persons interested as Subsection (1) of Section 31 of the said Act enjoins the Collector to offer the compensation. Hence, the liability of the State Government and the fourth Respondent will be joint and several. 23. The Petitioners have invoked a public law remedy. Even in exercise of equitable jurisdiction, this Court can always award interest by way of compensation. As far as the rate of interest is concerned, the Court will be guided by Section 34 of the said Act as in the present case, the Petitioners are entitled to interest under the said Section. 24. We must note here that the present Petition was filed on 30th January 2013. The fourth Respondent was aware of the Award dated 2nd May 2011. The State Government was aware of the filing of the Petition. The notice for final disposal was issued on 21st March 2013. The record shows that an Advocate entered appearance for the Acquiring Body in June 2013. The affidavit-in-reply was filed on 17th October 2013 but the Acquiring Body did not deposit the amount till January 2014. The default is of the Acquiring Body. Therefore, this is a fit case where the fourth Respondent will have to be saddled with the costs quantified at Rs.25,000/-. 25. Hence, we pass the following order: ORDER:- (a) We direct the Respondents to pay compensation to the Petitioners as per the award dated 2nd may 2011 together with interest thereon as per Section 34 of the Land Acquisition Act,1894 till 20th January 2014. Thus, interest as awarded under the Award at the rate of 15% per annum shall be payable from 28th February 1997 till 20th January 2014; (b) The aforesaid amount shall be paid by the Respondents to the Petitioners within a period of three months from today; However, the amount shall be paid only on the Petitioners furnishing bank guarantee of any nationalised bank for the entire amount. The bank guarantee shall be kept alive till the disposal of the pending Appeal in this Court arising out of the award made in Land acquisition Reference No.70 of 1997; (c) The bank guarantee shall be to the satisfaction of the second Respondent; Before accepting the bank guarantee, the fourth Respondent shall be heard by the second Respondent; (d) The fourth Respondent shall pay costs quantified at Rs.25,000/- to the Petitioners within a period of two months from today; (e) The Petition is allowed on above terms.