1 FA 711.92 others-Mahalung.doc ndm IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 711 OF 1992 The State of Maharashtra. ... Appellant Versus Sopinath Nivarti Rede and another. ... Respondents WITH FIRST APPEAL NO. 713 OF 1992 The State of Maharashtra. ... Appellant Versus Pandurang Kondiba Bhosale and others. ... Respondents AND FIRST APPEAL NO. 715 OF 1992 The State of Maharashtra. ... Appellant Versus Gafur Mahiboob Dange. ... Respondent ----- Mr. A.R.Patil, AGP for the Appellant. Mr. Rupesh Bobade for the Respondents. ----- CORAM : A.S.OKA, J. DATE : 22 nd June, 2011. ORAL JUDGMENT: 1 These appeals can be disposed of by a common judgment. These appeals arise out of awards under Section 18 of the 2 FA 711.92 others-Mahalung.doc Land Acquisition Act, 1894 (hereinafter referred to as “the said Act”). The notification under Section 4(1) of the said Act was issued on 31 st March, 1981. The purpose of acquisition was for construction of Right Ujani Bank Canal from kilometers 16 to 21. The acquired lands are situated at village Mahalung, Taluka Malshiras, District Solapur. The awards under Section 11 of the said Act were made on 12 th February, 1984. The Respondents – claimants did not accept the award/s and therefore, at their instance, references under Section 18 of the said Act were made. By the impugned judgments and awards, the market value of the acquired lands has been fixed at the rate of Rs.25,000/- per Hectare. By the impugned awards, statutory benefits under Section 23(1-A) and Section 23(2) of the said Act have been granted. While granting statutory benefit under Section 28 of the said Act, interest was granted from the year 1977-78 i.e. from the date of taking over the possession of the acquired lands. The possession was taken over even before the publication of the notification under Section 4(1) of the said Act. 3 FA 711.92 others-Mahalung.doc 2 The learned AGP appearing for the Appellant submitted that the claimants have not adduced any evidence of comparable sale instances and the sale instances, which are relied upon are not in respect of comparable lands. Relying upon the decision of the Apex Court in the case of R.L.Jain (D) by LRs. Vs. D.D.A. and others [(2004) 4 SCC 79), he submitted that the interest could not have been granted under Section 28 of the said Act from a date prior to the date of notification under Section 4(1) of the said Act. 3 I have carefully considered the submissions. I have perused the record . As far as the enhancement in the market value is concerned, the claimants have produced various sale instances. The Reference Court has relied upon the sale instance of sale-deed dated 29 th November, 1977 in respect of the agricultural land in the same village. The market value reflected from the said sale-deed was Rs. 32,000/- per Hectare. The evidence on record shows that the acquired land was an irrigated land and whereas the land subject matter of the sale-deed dated 29 th November, 1977 was not an irrigated land. 4 FA 711.92 others-Mahalung.doc Though the said sale-deed was of 1977, for determining the market value as of 31 st March, 1981, the price has been reduced to Rs. 25,000/- per Hectare. Hence, it is not possible to find fault with the fixation of market value. In one case (First Appeal No.711 of 1992 arising out of Land Acquisition Reference No.141 of 1989), claim was made for compensation as regards a Tal having dimensions 500' x 8' x 5'. A separate compensation was fixed of the Tal at Rs.25,000/-. It is true that the said Tal could not have been separately assessed as it is a part of the land. Going by the sale instance of the sale-deed dated 29 th November, 1977, the market value as of 31 st March, 1981 could have been around Rs.30,000/- per Hectare. Only on this ground, no interference is made out as regards compensation of the Tal. 4 The possession of the acquired lands was taken over by the State Government before notification under Section 4(1) of the said Act was issued. The question is whether Reference Court while deciding a reference under Section 18 can grant interest from a date prior to the date of notification under Section 4(1) of the said Act. 5 FA 711.92 others-Mahalung.doc 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. 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 1[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 6 FA 711.92 others-Mahalung.doc 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 1[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 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 a 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. There are specific sections in the said Act dealing with the power of the possession. The said Sections are 16 and 17 which read thus: 7 FA 711.92 others-Mahalung.doc “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 6[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 8 FA 711.92 others-Mahalung.doc 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. (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 9 FA 711.92 others-Mahalung.doc [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).]” 5 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) as 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 rate of 9% per annum for a period of one year from the date of possession and for subsequent period, at the rate of 10% per annum in the date of deposit of the excess amount by the Collector in the court. Perhaps the Reference Court has exercised the power under Section 34 of the said 10 FA 711.92 others-Mahalung.doc Act. The appellant has challenged the grant of said interest on the ground that Section 34 will have no application and even section 28 will not apply. 6 On this aspect, a reference will have to be made to the decision of the Apex Court in the case of R.L.Jain (supra). In paragraph 1 of the decision, the issue which arose before the Apex Court has been set out which reads thus: “In view of conflict of opinion in two decisions of this Court, namely, Shree Vijay Cotton & Oil Mills Ltd. v. State of Gujarat and Union of India v. Budh Singh the appeal has been placed for hearing before this larger Bench and the question in issue is whether in a case where possession is taken before the issuance of notification under Section 4(1) of the Land Acquisition Act, the claimant (owner of land) is entitled to interest for such anterior period in accordance with Section 34 of the said Act.” (Emphasis added) In paragraph 11, the Apex Court proceeded to observe thus: “..... 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 11 FA 711.92 others-Mahalung.doc 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 be dehors the Act. It is for this reason that both Sections 11(1) and 23(1) 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. (Emphasis added) 7 The Apex Court considered the provision of section 34 of the said Act. In paragraph 12 of the said decision, while referring to 12 FA 711.92 others-Mahalung.doc section 34, the Apex Court has held thus: “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 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 Section 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 Section 16 or 17 and will be without any authority of law and consequently cannot be recognised for the purposes of the Act. For 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 Section 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 13 FA 711.92 others-Mahalung.doc been done prior to publication of notification under Section 4(1) of the Act which is dehors the provisions of the Act.” (Emphasis added) 8 Thus, when possession is taken over prior to the notification under Section 4(1) of the said Act, Section 34 cannot be invoked. The Apex Court also dealt with the aspect of grant of compensation where the possession of the land subject matter of acquisition has been taken over prior to the date of notification under Section 4(1) of the said Act. This aspect has been dealt with in paragraph 18 of the decision which reads thus: “18. In a case where the landowner 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 landowner. It is fully open for the landowner 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 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 landowner is entitled while determining the compensation amount payable to the landowner for the acquisition of the property. The provisions of 14 FA 711.92 others-Mahalung.doc 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 may be awarded.” (Emphasis added) 9 The Apex Court also considered the issue of applicability of Section 23(1-A) in a case where possession is taken over before the date of notification under Section 4(1). “16. In this connection it will be apposite to refer to sub- section (1-A) of Section 23 of the Act which enjoins payment of an amount calculated at the rate of twelve per centum per annum on such market value for the period commencing on and from the date of the publication of the notification under Section 4(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. There are two decisions of this Court, wherein same controversy arose, namely, whether the claimant would be entitled to additional sum at the rate of twelve per centum on the market value where possession has been taken over prior to publication of notification under Section 4(1). In Special Tahsildar (LA), PWD Schemes v. M.A. Jabbar which has been decided by a Bench of two Judges (K. Ramaswamy and Mrs Sujata V. Manohar, JJ.), it was held that the claimant would not be entitled to this additional sum for the period anterior to publication of notification under Section 4(1). However, in Asstt. Commr., Gadag Sub-Division v. Mathapathi Basavannewwa also decided by a two-Judge Bench (K. Ramaswamy and B.L. Hansaria, JJ.) it was held that even though notification under Section 4(1) was issued after taking possession of the acquired land the owners would be 15 FA 711.92 others-Mahalung.doc entitled to additional amount at twelve per cent per annum from the date of taking possession though notification under Section 4(1) was published later. For the reasons already indicated, we are of the opinion that the view taken in Special Tahsildar is legally correct and the view to the contrary taken in Asstt. Commr. is not in accordance with law and is hereby overruled.” (Emphasis added) 10 Therefore, it will be necessary to make a reference to the decision in the case of Special Tahsildar (LA) Vs. M.A. Jabbar, [(1995) 2 SCC 142], which has been approved by the Apex Court. The Apex Court in the said decision held thus: “In other words, the owner of the land who has been deprived of the enjoyment of the land by having been parted with possession, the Act intended that the owner be compensated by awarding an additional amount calculated at the rate of 12 per centum per annum on the enhanced market value for the period between the date of notification and the date of award or date of taking possession of the land whichever is earlier. Admittedly, possession having already been taken on 15-2-1965, before publication of the notification under Section 4(1) on 6-3-1980, the award of additional amount for the period from 6-3-1980 to 30-9-1983, i.e., the date of making the award under Section 11 is perfectly correct. In addition to other statutory benefits, the owner also is entitled to the additional amount but to give in award additional amount from 15-2-1965, i.e., from the date of taking possession, though apparently earlier in point of time mentioned in Section 23(1-A), in effect it amounts to giving 16 FA 711.92 others-Mahalung.doc retrospective effect to sub-section (1-A) to Section 23 under the Amendment Act 68 of 1984, even though the Amendment Act was prospective and the transitory provision had only retro-limited activity.” (Emphasis added) 11 Thus the issue of the applicability of the aforesaid provisions of Sections 23(1-A) and 34 dealing with interest to a case where the possession of the land under acquisition is taken or prior to the date on which notification under Section 4 (1) of the said Act has been decided by the Apex Court. The interest under section 23 (1-A) shall be payable in