1 fa1085group.sxw 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 The State of Maharashtra ...Appellant vs. Mulkanbai w/o Totaram Patil (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 2 fa1085group.sxw 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 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 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 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 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. 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 the said Act. He submitted that in fact, in the form of possession receipt 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 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 wherein the market value reflected was Rs.29,197/- per Hectare. the 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 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. 9 The 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 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 irrigated land and the market value of Rs.30,000/- per Hectare for lower category of land. 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. 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 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. 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 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