IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 11TH MARCH 2009 / 20TH PHALGUNA 1930 LA.App..No. 208 of 2009() ------------------------- LAR.167/2001 of ADDL.SUB COURT,KOLLAM .................... APPELLANT(S): CLAIMANT ---------------------- OMANA AMMA, GOURY SADANAM, PERUMON, KOLLAM DISTRICT. BY ADV. SRI.B.SURESH KUMAR RESPONDENT(S): RESPONDENT ------------------------- THE STATE OF KERALA, REPRESENTED BY THE DISTRICT COLLECTOR, KOLLAM, KOLLAM - 691 013. SR.GOVERNMENT PLEADER SRI.P.K.BABU THIS LAND ACQUISITION APPEAL HAVING COME UP FOR ADMISSION ON 11/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PIUS C. KURIAKOSE &C.K.ABDUL REHIM, JJ. ----------------------------------------------- LAA. No. 208 OF 2009 ----------------------------------------------- Dated this the 11th day of March, 2009 J U D G M E N T Pius C.Kuriakose, J. The claimant in a reference under section 18 of the Land Acquisition Act, 1894 is the appellant. The ground which is prominently raised in the memorandum of appeal is that possession of the acquired property was taken as early as on 30-8-1990 and hence the reference court should have granted statutory interest at the rate admissible under section 28 for a period of one year from 30-8-1990 at the rate of 9% per annum and thereafter at the rate of 15% per annum. The grievance of the appellant is that the L.A. Officer has awarded interest under section 28 of the Land Acquisition Act only for the period subsequent to 7-7-1991, the date on which the relevant notification under section 4 (1) was published. The further ground which is raised in the memorandum of appeal is that the compensation due under the award of the L.A. Officer was paid in installments only, LAA. N0. 208 of 2009 -2- i.e., advance of Rs.1,07,500/- was paid on 19-8-1992 and the balance of Rs.1,20,000/- was paid on 20-1-1993 and that interest on the amount which remained unpaid has not been paid. 2. We have heard the submissions of Sri.B.Suresh Kumar, learned counsel for the appellant and those of Sri.P.K.Babu, learned Senior Govt. Pleader for the respondent who took notice when the appeal came up for admission. Drawing our attention to the judgment of the Supreme Court in R.L.Jain v. A.D.A., (AIR 2004 SC 1904) and the judgment of a Division Bench of this Court in Sp. Tahsildar (LA) v. Melath Chathukutty Nair, (2002(1) KLT 700) it was submitted by the learned Senior Govt. Pleader that the appellant cannot aspire for getting interest at the rates admissible under section 28 during the period from the date of taking possession till the date of promulgation of section 4(1) notification. As regards the claim for interest LAA. N0. 208 of 2009 -3- on the award amount which admittedly remained unpaid it was fairly conceded by the learned Senior Govt. Pleader that the appellant may be entitled for interest on the amount which remained as balance payable on 19-8-1992 till 20-1-1993 when a further amount of Rs.1,20,000/- was paid and on the further balance till its actual payment. 3. The learned counsel for the appellant was unable to meet the argument of the learned senior Govt. Pleader regarding the appellant's eligibility for interest for the period anterior to the date of publication of the notification under section 4(1)based as the same was on judgment of the Supreme Court and the judgment of this Court. Mr.Suresh Kumar however, submitted that the learned Subordinate Judge erred in his view regarding the appellant's eligibility for payment of interest on the solatium component of the compensation. He would submit that the learned Subordinate Judge did not become inclined to award the LAA. N0. 208 of 2009 -4- interest which was statutorily payable on the unpaid portion of the determined compensation on an erroneous view that such disputes are outside the purview of section 18 of the Land Acquisition Act, 1894 as amended by Act 68 of 1984- which enable the Land Acquisition Court and the Land Acquisition Officer respectively to pay interest on the compensation during the first year from date of taking possession at the rate of 9% per annum and thereafter at the rate of 15% per annum. 4. It has been very clearly held by the Supreme Court in R.L.Jain's case (supra) that in order that interest at the above rate is paid to a party, his property should have been taken possession of pursuant to a notification under section 4(1) of the L.A. Act. In other words, the taking over of possession should be in land acquisition proceedings. It is held that any possession taken prior to the issuance of the notification under section 4(1) is de hors the Act. Their LAA. N0. 208 of 2009 -5- Lordships held that taking over of possession for the purpose of the provisos to both sections 28 and 34 has to be either under section 16 of the Land Acquisition Act or under section 17(1), of that Act. Any taking over of possession otherwise than under section 16 or section 17(1) will not be recognised for payment of interest under section 28 or 34 as the case may be. The above view of the Supreme Court was followed by a Division Bench of this Court in Special Tahsildar (LA) v. Melath Chathukutty Nair, (2002)(1) KLT 700. In the instant case, the property of the appellant was taken over on 30-8-1990 and the notification under section 4(1) was published only 7-7-1991. It is clear that possession was taken over neither under section 16 nor under section 17(1). Appellant does not have a case that he was illegally dispossessed of his property on 30-8-1990 without his consent. It is obvious that the property was taken over on the basis of some private arrangement LAA. N0. 208 of 2009 -6- between the appellant and the Railway (the requisitioning authority or the Government) which cannot be countenanced for the purpose of awarding interest under section 28 or section 34. The ground raised in the appeal as regards payment of interest for the period prior to the date of section 4(1) notification has to be turned down. 5. At the same time, we notice that the learned Subordinate Judge has taken the view that the solatium component of the compensation to which the appellant is entitled under the court award will not carry interest under section 28. Learned Subordinate Judge has in this context relied on the judgment of the Supreme Court in Yadav Rao P.Pathdev v. State of Maharashtra, (1996(1) KLT 452). We are afraid that the learned Subordinate Judge did not notice the judgment of the Constitution Bench of the Supreme Court in Sunder v. Union of India (2001(3) KLT 489) whereby it is declared that claimant will be entitled for LAA. N0. 208 of 2009 -7- interest on solatium also. Yadav Rao P.Pathdev's case relied on by the learned Subordinate Judge no longer holds the field. We follow the judgment of the Constitution Bench in Sundar's case and declare that the appellant is entitled for interest on the solatium component of the compensation also. 6. It is clear to our mind that the appellant is entitled to amounts of Rs.15,515.32 and Rs.54,514.78 towards interest at the statutory rates on the compensation which remained as payable after adjusting the part payments made towards the award amount. The above total amount of Rs.70,030.10 is not awarded to the appellant by the learned Subordinate Judge taking the view that in a reference under section 18 the court is not competent to examine complaints regarding non-payment of statutory interest admissible under sections 28 and 34. This is what the learned Subordinate Judge has stated in his judgment LAA. N0. 208 of 2009 -8- on the above context: “This court is not sitting in appeal over the award passed by the L.A. Officer to re-fix the interest awarded by him. The reference is made to this court with regard to the measurement of land, the amount of compensation and with respect to the persons to whom it is payable or the apportionment of the compensation among the interested persons. There is no reference to correct the mistakes if any committed by the L.A. Officer. For that the claimant has to move before the Land Acquisition Officer himself.” The reference leading to the impugned judgment was admittedly a reference under section 18 of the Land Acquisition Act. The above reference was facilitated/ initiated by the appellant himself being not satisfied with the award of compensation by the L.A. Officer. Section 18 of the Land Acquisition Act to the extent necessary is quoted below: “18. Reference to Court.--(1) Any person interested who has not accepted the award may, by written application to the Collector, require that the matter be referred by the Collector for the determination of the Court, whether his objection be to the measurement of the land, the amount of the compensation, the persons to whom it is payable, or the apportionment of the LAA. N0. 208 of 2009 -9- compensation among the persons interested.” It is trite that award passed by the Land Acquisition Officer is only an offer which the awardee may accept or not accept. The awardee who does not accept the offer seeks reference under section 18 and once valid request for reference is made the awarding officer is bound to refer the matter to the court and the court determines the correct compensation payable for the acquired property and settles other objection if any taken by the party within the contemplation of section 18 taking into account the various matters enumerated under section 23 and ignoring the matters enumerated under section 24. The learned Subordinate Judge may be technically correct in saying that the reference court does not sit in appeal over the award of the L.A. Officer. But the reference court is to determine the correct compensation payable for the acquired property as an original authority on the basis of the materials which LAA. N0. 208 of 2009 -10- comes on record before the court. Compensation would take in all its components like market value, solatium under section 23(2) and additional amount under section 23(1-A). In a broader sense, statutory interest which was payable by the L.A. Officer under section 34 and is payable by the court under section 28 will also be part of the total compensation payable to the owners. In other words, any dispute regarding the correct amount payable to the awardee towards interest will have to be settled by the court while determining the correct compensation payable to the claimant before the court. The learned Subordinate Judge's view that within the contours of section 18 disputes regarding interest cannot be settled by him is erroneous. 7. It was fairly conceded by the learned Government Pleader that a total amount of Rs.70,030.10 is payable to the appellant as claimed by him in Ext.A1 statement filed before the reference court towards interest on the LAA. N0. 208 of 2009 -11- compensation which remained unpaid. 6. The result of the above discussion is that the appeal will stand allowed to the following extent: 1. It is declared that the appellant is entitled for interest on the solatium to which he is eligible. 2. It is also declared that the appellant is not entitled for any interest during the period prior to the issuance of the notification under section 4(1). 2. It is ordered that the appellant is entitled to a further amount of Rs.70,030.10 towards interest on the compensation which remained as payable by the awarding officer. The parties are directed to suffer their respective costs. (PIUS C.KURIAKOSE, JUDGE) (C.K. ABDUL RAHIM, JUDGE.) ksv/-