IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA: CWP.No.708/2006. Date of Decision : 23rd May, 2008. Roop Ram and others. …Petitioners. Versus: State of H.P. and othrs. …Respondents. Coram: The Hon’ble Mr.Justice R.B.Misra, Judge. The Hon’ble Mr.Justice Sanjay Karol, Judge. Whether approved for Reporting?1yes For the petitioners: Mr.Dibender Ghosh, Advocate. . For Respondents. Mr.R.M.Bisht, Deputy Advocate General. R.B.Misra, J (Oral). Heard learned counsel for the parties. With the consent of the learned counsel for the parties, the writ petition is disposed of at the admission stage itself. 1. In the present writ petition, preferred under Articles 226 and 227 of the Constitution of India, a prayer has been made seeking directions to the respondents to deposit the entire amount of compensation in pursuance to the award dated 20th July, 2005 along with up to date interest. 2. It appears that a Notification issued under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as `the Act’) on 1st November, 1997, was got published in the State Rajpatra on 20th December, 1997 and subsequent notification under Section 6 of the ‘Act’ was issued on 16th January, 1999 for acquiring the land of 2-17 bighas and 0-10-10 biswansi pertaining to the petitioners. An award of amounting 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 Rs. 3,82,543/- was passed on 20th July, 2005 by the Land Acquisition Collector for the acquired area of 5-16 bighas out of which the land of petitioners No. 1 to 10 was acquired to the extent of 2-17 bighas. The awarded amount had already been deposited through a Cheque No. 734712 dated 5th September, 2006. It appears that in reference to order dated 6th May, 2008 passed by this Court, a revised calculation for the acquired land of petitioner Nos. 1 to 10 to the extent of 2-17 bighas was to be given. Accordingly, a revised calculation sheet (Annexure:R-1) has been filed along with the affidavit dated 17th May, 2008. 3. It appears that petitioner Nos. 4 to 6 are also recorded as tenants in Khata No. 12/14 qua Khasra 185/1 in the Government land and they are entitled for ½ share of the acquired area to the extent of 0-10-10 biswansi and as per the revised calculation the petitioners No. 4 to 6 are entitled for the amount of compensation to Rs. 48,412/-. The revised calculation sheet in respect of Khasra No. 185/1 has been enclosed (through Annexure:R-II along with the affidavit dated 17th May, 2008 of the respondents). According to which, the petitioners are entitled for the total compensation to the tune of Rs. 95,341/- as per enclosed Annexures:R-1 and R-II 4. The revised calculations with regard to the amount claimed by the petitioners are given as under: ___________________________________________________________ “Revised Calculation Sheet: Annexure:R-I. CWP.No.708/06- Roop Ram and others Vs. State of H.P. and others. Date of Notification Under Section 4 of the Act. 1-11-1997 Date of publication in Rajparta 20-12-1997 Date of Award 20-7-2005. 1. Market value of land (Rate Rs.30,000/- per bigha) the petitioners No. 1 to 10 as per share in record of rights. 3 (Area Land 2-17 bighas) Rs.85,322-40 2. 12% Additional amount U/s 23(1-A) w.e.f. 20-12-97 to 20-7-2005 i.e. 2770 days from the date of publication in Rajpatra. Rs.77,701-82 3. 30% CAC on market value of land Rs.25,597-00 4. Total:- Rs.1,88,621-22. Or Say Rs.1,88,621-00 5. 9% interest w.e.f. 21-7-2005 to 20-7-2006 on Rs.1,88,621-00. Rs. 16,976-00 6 15% interest w.e.f. 21-7-2006 to 11-5-2007 for 295 days on Rs.1,88,621/- Rs. 22,867-00 Total (4+5+6) Rs. 2,28,464-00 8. Amount paid by LAC on 11-5-2007 Rs.1,87,583-00 9. Balance due on 12-5-2007 Rs. 40,881-00 10 15% interest w.e.f. 12-5-2007 to 6-5-2008 for 360 days on Rs.40,881/- Rs. 6,048-00 11. Net amount payable on 6-5-2008. Rs. 46,929-00 _______________________________________________________________ “Revised Calculation Sheet: Annexure:R-II. CWP.No.708/06- Roop Ram and others Vs. State of H.P. and others. (Govt. Land and petitioners No. 4 to 6 are tenant on the Area) Date of Notification Under Section 4 of the Act. 1-11-1997 Date of publication in Rajparta 20-12-1997 Date of Award 20-7-2005. 1. Market value of land (Rate Rs.30,000/- per bigha) the petitioners No. 4 to 6 as per share in Record of Rights. (Area Land 0-10-10 bighas) Rs.15,750-00 2. 12% Additional amount U/s 23(1-A) w.e.f. 20-12-97 to 20-7-2005 i.e. 2770 days from the date of publication in Rajpatra. Rs.14,343-00 3. 30% CAC on market value of land Rs. 4,725-00 4. Total:- Rs. 34,818-00 4 5. 9% interest w.e.f. 21-7-2005 to 20-7-2006 on Rs.34,818-00 Rs. 3,134-00 6 15% interest w.e.f. 21-7-2006 to 11-5-2007 for 295 days on Rs.34,818-00 Rs. 4,221-00 Total (4+5+6) Rs. 42,173-00 8. Amount un-paid by LAC Rs. 42,173-00 9. Balance due on 12-5-2007 Rs. 42,173-00 10 15% interest w.e.f. 12-5-2007 to 6-5-2008 for 360 days on Rs.42,172/- Rs. 6,239-00 11. Net amount payable on 6-5-2008. Rs. 48,412-00 12 Total Amount (Rs.46,929+Rs.48,412-00) Rs. 95,341-00” __________________________________________________________________ 5. According to the petitioners, in serial No.5 of both the Annexure R-1 and R-II the interest of 9% has wrongly been given w.e.f. 21- 7-2005 to 20-7-2006, whereas the interest @ 9% shall be payable not from the date of the award but from the date of publication of Notification under Section 4 of the ‘Act’. According to the petitioners, 9% interest shall be payable from 20-12-1997 to 20-7-2005 in respect of the amount shown as Rs.1,88,621/- in Annexure:R-I and Rs.34,818/- shown in Annexure:R-II. 6. During course of arguments, our attention have been drawn to the different provisions of the ‘Act’ and one point of determination in the present writ petition as to whether in view of the provisions of the ‘Act’, more especially in view of the provisions of Section 34 of the ‘Act’ when the possession of land has already been taken prior to the issuance of the notification then the amount of interest shall be payable to the petitioners from the date of passing of the award or from the date of taking over the possession of the land. 7. In order to decide the question whether the provisions of Section 34 of the Act regarding payment of interest would be applicable to a case where possession has been taken over prior to issuance of 5 notification under Section 4(1) of the Act, it is necessary to have a look at the Scheme of the Land Acquisition Act. Acquisition means taking not by voluntary agreement but by authority of an Act of Parliament and by virtue of the compulsory powers thereby conferred. In case of acquisition the property is taken by the State permanently and the title to the property vests in the State. The Land Acquisition Act makes complete provision for acquiring title over the land, taking possession thereof and for payment of compensation to the land owner. Part II of the Act deals with acquisition and the heading of Section 4 is "Publication of preliminary notification and powers of officers thereupon". Sub-section (1) of Section 4 provides that whenever it appears to the appropriate government that land in any locality is needed or is likely to be needed for any public purpose or for a company, a notification to that effect shall be published in the Official Gazette and in two daily newspapers circulating in that locality and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality. Sub-section (2) provides that thereupon it shall be lawful for any officer either generally or specially authorized by such Government in this behalf and for his servants and workmen, to enter upon and survey and take levels of any land in such locality, to dig or bore in the sub-soil and to do all other acts necessary to ascertain whether the land is adapted for such purpose etc. etc. This provision shows that the officers and servants and workmen of the government get the lawful authority to enter upon and survey the land and to do other works only after the preliminary notification under Section 4(1) has been published. Section 5-A enables a person interested in any land which has been notified under Section 4 (1) to file objection against the acquisition of the land and also for hearing of the objection by the Collector. If the State Government is satisfied, after considering the report, that any particular land is needed for public purposes or for a company, it 6 can make a declaration to that effect under Section 6 of the Act and the said declaration has to be published in the Official Gazette and in two daily newspapers and public notice of the substance of such declaration has to be given in the locality. Thereafter the Collector is required to issue notice to persons interested under Section 9 (1) of the Act stating that the Government intends to take possession of the land and that claims to compensation for all interests in such land may be made to him. Section 11 provides for making of an award by the Collector of the compensation which should be allowed for the land. Section 16 provides that when the Collector has made an award under Section 11, he may take possession of the land which shall thereupon vest absolutely in the Government, free from all encumbrances. This provision shows that possession of the land can be taken only after the Collector has made an award under Section 11. Section 17 is in the nature of an exception to Section 16 and it provides that in cases of urgency, whenever the appropriate Government so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in Section 9 (1), take possession of any land needed for a public purpose and such land shall thereupon vest absolutely in the Government, free from all encumbrances. The urgency provision contained in Section 17(1) can be invoked and possession can be taken over only after publication of notification under Section 9(1) which itself can be done after publication of notification under Sections 4(1) and 6 of the Act. Even here in view of sub- section (3-A) the Collector has to tender 80 per cent of the estimated amount of compensation to the persons interested entitled thereto before taking over possession. The scheme of the Act does not contemplate taking over of possession prior to the issuance of notification under Section 4(1) of the Act and if possession is taken prior to the said notification it will de hors the Act. It is for this reason that both Sections 11(1) and 23(1) 7 enjoin the determination of the market value of the land on the date of publication of notification under Section 4(1) of the Act for the purpose of determining the amount of compensation to be awarded for the land acquired under the Act. These provisions show in unmistakable terms that publication of notification under Section 4(1) is the sine-qua-non for any proceedings under the Act Section 34 of the Act, on the basis whereof the appellant laid claim for interest, reads as under: "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." 8. In Lila Ghosh (SMT) (Dead) through LR. Tapas Chandra Roy Vs. State of W.B. (2004) 9 SCC 337, Hon’ble Supreme Court has observed as below: “17. The next question which arises is from what date interest is payable. On behalf of the claimants it was argued that possession was taken as far back as on 24th December, 1979. Reliance was placed on Section 34 of the Land Acquisition Act. It was submitted that interest has to be paid from the date of taking possession. It was pointed out that the Reference Court had directed payment of interest from the date of taking possession. However, the High Court has directed payment of interest only from 8th December, 1986. In support of this submission, reliance was placed on the case of Shree Vijay Cotton & Oil Mills Ltd. vs. State of Gujarat 1991(1) SCC 262. In this case the possession had been taken much prior to the acquisition proceedings. This Court directed payment 8 of interest under Sections 28 and 34 from the date of taking possession. The Supreme Court has also observed in Lila Ghosh (supra) as below: “A plain reading of Section 34 shows that interest is payable only if the compensation, which is payable, is not paid or deposited before taking possession. The question of payment or deposit of compensation will not arise if there is no acquisition proceeding. In case where possession is taken prior to acquisition proceedings a party may have a right to claim compensation or interest. But such a claim would not be either under Section 34 or Section 28. Interest under these sections can only start running from the date the compensation is payable. Normally this would be from the date of the award. Of course, there may be cases under Section 17 where by invoking urgency clause possession has been taken before the acquisition proceedings are initiated. In such cases, compensation, under the Land Acquisition Act, would be payable by virtue of the provisions of Section 17. As in cases under Section 17compensation is payable, interest may run from the date possession was taken. However, this case does not fall into this category. In this case if after giving credit for the amounts paid or deposited, it is found that compensation payable has not been paid or deposited, then interest thereon, either under Section 28 or 34 will be payable from the date of the award.” 9. In R.L.Jain (D) By LRs. Vs. DDA and others (2004) 4 SCC 79,Hon’ble Supreme Court has occasion to consider Lila Ghosh (supra) and held as under: “12. The expression "the Collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited" should not be read in isolation divorced from its context. The words "such compensation" and "so taking possession" are important and have to be given meaning in the light of other provisions of the Act. "Such compensation" would mean the compensation determined in accordance with other provisions of 9 the Act, namely, Sections 11 and 15 of the Act which by virtue of Section 23(1) mean market value of the land on the date of notification under Section 4(1) and other amounts like statutory sum under sub-section (1-A) and solatium under Sub-section (2) of Section 23. The heading of Part II of the Act is Acquisition and there is a sub-heading "Taking Possession" which contains Sections 16 and 17 of the Act. The words "so taking possession" would therefore mean taking possession in accordance with Sections 16 or 17 of the Act. These are the only two Sections in the Act which specifically deal with the subject of taking possession of the acquired land. Clearly the stage for taking possession under the aforesaid provisions would be reached only after publication of the notification under Sections 4(1) and 9(1) of the Act. If possession is taken prior to the issuance of the notification under Section 4(1) it would not be in accordance with Sections 16 or 17 and will be without any authority of law and consequently cannot be recognized for the purposes of the Act. For the parity of reasons the words "from the date on which he took possession of the land" occurring in Section 28 of the Act would also mean lawful taking of possession in accordance with Sections 16 or 17 of the Act. The words "so taking possession" can under no circumstances mean such dispossession of the owner of the land which has been done prior to publication of notification under Section 4(1) of the Act which is de hors the provisions of the Act. 13. In Union of India v. Budh Singh (1995) 6 SCC 233 after analysis of the provisions of the Act the Bench arrived at the following conclusions: "The parameter for initiation of the proceedings is the publication of the notification under Section 4(1) of the Act in the State Gazette or in an appropriate case in District Gazette as per the local amendments. But the condition precedent is publication of the notification under Section 4(1) in the appropriate gazette. That would give legitimacy to the State to take possession of the land in accordance with the provisions of the Act. Any possession otherwise would not be considered to be possession taken under the Act." “14. In Shri Vijay Cotton & Oil Mills Vs. State of Gujarat, (1991) 1 SCC 262 , the precise question raised here namely 10 whether in a case where the possession is taken prior to the issuance of notification under Section 4(1) of the Act, interest can be awarded in accordance with Sections 28 or 34 of the Act was not examined and the only issue examined was whether in an appeal which has been preferred by the State Government challenging the quantum of compensation awarded by the District Judge it is open to the High Court to award interest to the claimant even though he had not preferred any appeal or cross objection for the said purpose. It is well settled that a decision is an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made therein. (See Krishena Kumar v. Union of India, AIR 1990 SC 1782, Municipal Corporation of Delhi v. Gurnam Kaur, AIR 1989 SC 38 and M/s. Orient Paper and Industries Ltd. & Anr. v. State of Orissa AIR 1991 SC 672). Shri Vijay Cotton & Oil Mills (supra) is therefore not an authority for the proposition that where possession is taken before issuance of notification under Section 4(1), interest on the compensation amount could be awarded in accordance with Section 34 of the Act with effect from the date of taking of possession. 17.1 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 18. In a case where the land owner is dispossessed prior to the issuance of preliminary notification under Section 4(1) of the Act the government merely takes possession of the land but the title thereof continues to vest with the land owner. It is fully open for the land owner to recover the possession of his land by taking appropriate legal proceedings. He is therefore only entitled to get rent or damages for use and occupation for the period the 11 government retains possession of the property. Where possession is taken prior to the issuance of the preliminary notification, in our opinion, it will be just and equitable that the Collector may also determine the rent or damages for use of the property to which the land owner is entitled while determining the compensation amount payable to the land owner for the acquisition of the property. The provision of Section 48 of the Act lend support to such a course of action. For delayed payment of such amount appropriate interest at prevailing bank rate maybe awarded” 10. Learned counsel for the respondents has submitted that since the petitioners’ land has already been taken into possession prior to the issuance of the notification under Section 4 of the ‘Act’, therefore that cannot be treated and acknowledged as legally authorized possession and in view of the observations made by the Supreme Court in Lila Ghosh (SMT) (Dead) through L.R. Tapas Chandra Roy Vs. State of W.B (supra)., the interest shall be payable from the date of the award. As such, 9% interest shall be payable only from 21st July, 2005 to 20th July, 2006 as has already been indicated in the revised calculation and submitted through Annexure-R-I and Annexure: R-II . According to the learned Deputy Advocate General, the petitioners may be entitled to get rent or damages for use and occupation for the period the Government retains possession of the property prior to the issuance of the notification under Section 4 of the ‘Act’ 11. We have heard learned counsel for the parties. We find force in the submissions made by the learned counsel for the respondents and we are of the considered view that in the facts and circumstances of the present case, the interest at the rate of 9% in reference to the provisions of Section 34 of the ‘Act’ shall be payable to the petitioners from the date of the award i.e. 21-7-2005 and not from 20-12-1997. Accordingly the point in issue to be adjudicated in the present writ petition is dealt with. 12 In view of the above observations, the writ petition is disposed of. (R.B.Misra), Judge. (Sanjay Karol), Judge. May 23, 2008(R) 13 14