S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -1- IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR ::: JUDGMENT ::: S.B. Civil Misc. Appeal No.508/1996 Union of India. vs. Ramawatar and ors. DATE OF JUDGMENT :: 13.10.2009 PRESENT HON'BLE MR. PRAKASH TATIA, J. Mr.Ravi Bhansali, for the appellant. Mr.BL Purohit ) for the respondents. Mr.JL Purohit ) Mr.RK Singhal ) <><><> BY THE COURT : REPORTABLE Heard learned counsel for the parties. This appeal has been preferred by the Union of India challenging the order of the Civil Judge (SD), Sri Ganganagar dated 23.1.95 passed in a reference made by the District Collector under S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -2- Section 18 of the Land Acquisition Act, 1894 (referred to herein after as 'the Act of 1894'). Brief facts of the case are that in total 2262.09375 acres of land situated in Suratgarh Tehsil in the State of Rajasthan was sought to be acquired by issuing notification under Section 4 of the then Rajasthan Land Acquisition Act, 1953. This notification was issued on 10.7.79. Then declaration under Section 6 was issued on 17.1.80. The award was passed by the Land Acquisition Officer on 27.3.80. The learned Land Acquisition Officer determined the market value of the land in question as Rs.8000/- per bighas for the Nahari Land (Command Area) and Rs.4000/- per bigha for the Barani Land (Uncommand Area). The learned Land Acquisition Officer instead of determining the land value for cultivators as per their holdings calculated the value of entire land sought to be acquired in two categories and determined the compensation as Rs.1,66,74,800/- for irrigated land and Rs.61,40,000/- for unirrigated land. Solatium was awarded at the rate of 10% which came to Rs.22,81,480/-. In total compensation awarded was Rs.2,50,96,280/-. It will be worthwhile to mention here that in the award, no amount has been awarded against the interest and solatium has been S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -3- awarded at the rate of 10% in view of the fact that at that time, solatium payable was at the rate of 10%. The learned Land Acquisition Officer also took note of the fact that the land in question was already requisitioned on 27.5.77 under the Defence of India and Maintenance of Internal Security Act, 1971 (referred to herein after as 'the Act of 1971') by order dated 31.3.77 and the possession has already been handed over to the authority for whose purpose the land was requisitioned. Since the actual physical possession was not with the cultivators and, therefore, a certificate of possession was issued by the learned Land Acquisition Officer on 27.3.80 handing over the possession of the land to the authorities for which land was acquired under the Act of 1894. Meaning thereby, the land which was sought to be acquired by issuing notification under Section 4 dated 10.7.79 and for which declaration under Section 6 was issued on 17.1.80 and award was passed on 27.3.80, stand transferred and vest in the Union of India with effect from 27.3.80 and physical possession was handed over to the Union of India under the Act of 1894 from 27.3.80. Therefore, according to Union of India, possession of the land was delivered to it under the Act of 1894 on the day when the award was S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -4- passed and on the same day, part of the amount was deposited for payment to the cultivators and remaining amount was paid in 3 days only. The cultivators who were large in number submitted application for making reference to the Civil Court for enhancement of compensation as well as for other reliefs under Section 18 of the Act of 1894 upon which the matter was referred to the Civil Court by the order of the District Collector. Various issues were framed and opportunity to lead evidence was granted to the parties by the Civil Court and ultimately, the Civil Court also reached to the same conclusion on the issue of the market value of the land and upheld the market value as determined by the learned Land Acquisition Officer. The Civil Court held that the possession was taken over on 27.5.77 (which is prior to even date of notification u/s 4 of the Rajasthan Land Acquisition Act, 1953), therefore, the cultivators are entitled to interest from 27.5.77 to 26.5.78, i.e., for one year at the rate of 9% p.a. amounting to Rs.22,58,665/-. The claimants were further held entitled to 15% interest i.e. from 27.5.78 to 27.3.80 amounting to Rs.69,01,477/-. The Civil Court also held that in view of the change in law, the cultivators are entitled to solatium at the S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -5- rate of 30% which was assessed as Rs.68,44,440/-. The Civil Court also held that the cultivators are also entitled to interest at the rate of 15% more in case, the awarded amount is not paid within a period of 3 months obviously from the date of award passed by the Civil Court dated 23.1.95. The cultivators did not choose to challenge the decision of the Civil Court dated 23.1.95. Meaning thereby, they accepted the decision of the Civil Court upholding the land cost as determined by the Land Acquisition Officer. However, the Union of India has preferred this appeal challenging the order of the Civil Court dated 23.1.95. During pendency of this appeal, several respondents died and an objection was taken by the respondents/cultivators that the appeal has abated as a whole. However, this Court vide detail order dated 19.12.2006 held that the appeal has not abated as a whole and in view of the same order dated 19.12.2006, the appellant paid court fees payable as per Section 54 read with Section 46 of the Court Fees and Suits Valuation Act, 1961. Learned counsel for the appellant submitted S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -6- that the Civil Court has committed grave error of law by holding that the cultivators shall be entitled to interest from the date prior to the date of notification issued under Section 4. It is submitted that the Hon'ble Supreme Court in the cases of (1) Union of India vs. Budh Singh and others reported in (1995) 6 SCC 233 ; (2) Smt. Lila Ghosh (dead) through LR vs. State of West Bengal reported in AIR 2004 SC 288 ; and (3) R.L. Jain (D) by LRs. vs. D.D.A. and others reported in AIR 2004 SC 1904 has already decided that no interest can be awarded under the Act of 1894 for the period prior to the date of issuance of the notification under Section 4. Learned counsel for the appellant vehemently submitted that the court below committed grave error of law while passing the award for the entire land without determining and without examining the number of claimants who have requested for reference and whose reference has been sent to the Civil Court. It is submitted that the award passed by the Land Acquisition Officer became final for those cultivators who did not submit any application u/s 18 and whose matters have not been sent to the Civil Court by the District Collector and, therefore, the award of interest and solatium to those cultivators by the Civil Court is without jurisdiction. It is S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -7- also submitted that there could not have been an award in such a manner so as to determine the market value of the entire land and without making apportionment of the amount among the land owners as per their holdings. Learned counsel for the appellant also submitted that the court below further committed error by awarding solatium at the rate of 30% by taking into account the total award amount as awarded by the Land Acquisition Officer ignoring the fact that 10% of the solatium has already been awarded by the Land Acquisition Officer. It is also submitted that even the court below has committed error while calculating the interest as twice the interest has been awarded for certain amount. It is also submitted that further error committed by the civil court is that the civil court has awarded interest over interest by making provision in the award that in case, the amount shall not be paid within a period of 3 months, then the cultivators shall be entitled to further interest of 15% p.a. Learned counsel for the appellant also submitted that the claimants who have not preferred any reference are not entitled to any enhancement of compensation and for this argument, learned counsel for the appellant relied upon the S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -8- judgment of the Hon'ble Supreme Court delivered in the case of Ambey Devi vs. State of Bihar reported in AIR 1996 SC 1513. Learned counsels Mr.BL Purohit, Mr.JL Purohit and Mr.RK Singhal for the respondents vehemently submitted that there is no material on the record from which it can be gathered that reference was not made on the application submitted by all the cultivators. It is submitted that large number of respondents have already died and even after the order of this Court dated 19.12.2006, a few more respondents have died. Therefore, the cases of those respondents cannot be reopened. However, the learned counsels for the respondents submitted that they are not pleading the cases of those persons who have not submitted the reference applications and whose cases have not been referred by the District Collector to the Civil Court. It is submitted that the land in question though was requisitioned under the Act of 1971 but no compensation or rent has been paid to the cultivators under the Act of 1971. The cultivators, therefore, were rightly held entitled to interest from the date on which they were dispossessed and possession was taken over by the S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -9- Union of India may it be under the Act of 1971. Learned counsel for the respondents relied upon the judgment of the Hon'ble Supreme Court in the case of Satinder Singh vs. Umrao Singh and another reported in AIR 1961 SC 908. So far as the error made while calculating the award amount and award of interest are concerned, the respondents' counsels have not disputed and fairly stated that there is any error in calculation and double award of solatium for some amount and double amount of interest and that may be corrected. I considered the submissions of learned counsel for the parties and perused the record. It will be first appropriate to consider the judgment relied upon by the learned counsel for the respondents in the case of Satinder Singh (supra) as this is the first judgment on the point relied upon by the counsels. In the said case of Satinder Singh (supra), a notification under Section 4 of the Land Acquisition Act, 1894 was issued on 23.3.48. By this notification the State Government declared its intention to acquire land in the Ambala S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -10- District for the construction of the new Capital for East Punjab. No action was, however, taken in pursuance of this notification. Meanwhile the Punjab Legislature passed the East Punjab Requisition of Immovable Property (Temporary Powers) Act 48 of 1948. Under the provisions of this Act the Government requisitioned the land in question for the purpose of resettling the persons who were likely to be evicted from their lands as a result of the construction of the new Capital. The said land was actually acquired on 20.5.51. In the above case, the Hon'ble Supreme Court observed that in 1953, the Punjab Requisitioning and Acquisition of Immovable Property Act, 1953 (XI of 1953) came into force and Section 24 of this Act repealed the two earlier Acts of 1948 and 1951. The Hon'ble Supreme Court observed that the equitable principle which was inserted in the Act of 1948 by the amending Act of 1951 has been retained in the present Act under Section 8(3). Section 23(1) of this Act validates requisitions and acquisitions of properties there specified, while sub-section (2) of the said section provides that acquisition of immovable property purporting to have been made before the commencement of this Act shall be deemed for all purposes to have been S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -11- validly made as if the provisions of the said enactment or order had been included and enacted in this section, and this section had been in force on and from the date of the acquisition. After considering this legal position, the Hon'ble Supreme Court examined the question of payment of interest in a circumstance where the possession of the land has been taken over prior to the issuance of the notification under Section 4 and after holding that, “It would be legitimate to hold that by the application of S.23(1) in terms the provisions of S.23(2) are by necessary implication excluded. If the Legislature has provided that only one part of S.23 should be applied it would be reasonable to hold that the other part of S.23 was not intended to be applied; but we do not see how it would be reasonable to hold that by the application of S.23(1) the principles underlying the provisions of Ss.28 and 34 are also excluded.” After deciding that question of law, the Hon'ble Supreme Court also considered the issue on equitable grounds and after considering the earlier judgments on the issue held that, “It would thus be noticed that the claim for interest proceeds on the assumption that when the owner of immovable property loses possession of it he is entitled to claim interest in place of right to S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -12- retain possession.” The Hon'ble Supreme Court further held that, “When a claim for payment of interest is made by a person whose immovable property has been acquired compulsorily he is not making claim for damages properly or technically so called; he is basing his claim on the general rule that if he is deprived of his land he should be put in possession of compensation immediately; if not, in lieu of possession taken by compulsory acquisition interest should be paid to him on the said amount of compensation.” The Hon'ble Supreme thereafter considered the provisions of Interest Act, 1839 and held that, “The power to award interest on equitable grounds or under any other provisions of the law is expressly saved by the proviso to S.1 (of Interest Act of 1839).” It will be worthwhile to mention here that in view of the conflict of opinion in two cases of Hon'ble Supreme Court – (1) Shree Vijay Cotton and Oil Mills Ltd. v. State of Gujarat reported in AIR 1991 SC 656 and (2) Union of India vs. Budh Singh and others reported in (1995) 6 SCC 233, the question was referred to the larger bench and the question which was referred to the larger bench was “Whether in a case where possession is taken S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -13- before the issuance of Notification under S.4(1) of the Land Acquisition Act, the claimant (owner of land) is entitled to interest for such anterior period in accordance with S. 34 of the said Act ?” For deciding this issue, several earlier judgments of the Hon'ble Supreme Court including the judgment delivered in the case of Satinder singh (supra) relied upon by learned counsel for the respondents, were also considered. In the case of R.L. Jain, a notification under S.4(1) of the Act of 1894 was issued on 13.11.59 for acquisition of a large area of 34070 acres of land including 1 bigha 11 biswas area in khasra No.223 of village Kharera for the planned development of Delhi. This was followed by a declaration under S.6 of the Act of 1894, which was published in the Gazette on 11.10.61. The dispute was in relation to plot bearing Khasra No.223 referred above. The said plot was notified for being sold in public auction by the Ministry of Rehabilitation and in the auction notice it was mentioned that the same shall be out of the purview of the notification issued on 13.11.59 under S.4(1) of the Act of 1894. Mr. R.L. Jain purchased the said plot in the auction held on 8.4.60 and a sale certificate was issued in his S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -14- favour on 31.8.61. Inspite of above exemption, in pursuance of the Notifications issued under Ss.4 (1) and 6 of the Act, the possession of Plot No. 223 was taken over by the Collector on 10.11.61 and it was handed over to the Delhi Development Authority, obviously ignoring the fact that by the notification issued by the Ministry of Rehabilitation, the said plot was excluded from the coverage of the notification dated 13.11.59. However, compensation amount was determined and Mr. R.L. Jain received the compensation amount under protest and thereafter, he submitted reference application before the Collector under S.18 of the Act. Then Mr.R.L. Jain filed a Suit for declaration that the acquisition proceedings were null and void and that suit was decreed in favour of Mr.R.L. Jain on 12.4.67 and the acquisition proceedings as well as the notification dated 11.10.61 issued under S.6 of the Act of with regard to the plot in dispute were quashed. The appeal against the said judgment and decree too was dismissed and that judgment attained finality. Since the plot in question was already taken over by the District Collector and was handed over to the DDA and the DDA raised the construction over the plot in dispute, Mr.R.L. Jain filed another suit for demolition of the said S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -15- construction. Trapped in that situation, another notification under S.4(1) of the Act of 1894 for acquisition of the plot in dispute was issued on 9.9.92 and ultimately, the land was acquired by passing the award on 11.6.94. In that situation where when the land was subject matter of the notification under S.4(1) dated 13.11.59 and for which the notification under S.6 was issued and award was passed and compensation was determined and paid to the owner of the land (who received under protest) who thereafter obtained the decree for declaration that the acquisition is null and void, when prayed for award of interest from the date of taking possession i.e. from 10.11.61 and that is in the land acquisition proceedings which has been declared null and void, the Hon'ble Supreme Court ultimately held that said R.L. Jain is not entitled to interest from the date of acquisition of the land as in the earlier round of litigation he himself obtained the decree of declaring the acquisition proceedings null and void. The Hon'ble Supreme Court on equitable grounds also found that the compensation awarded to said R.L. Jain since has been awarded by taking into account the market rate of the property in question as in the year 1994, therefore, he got more benefit and, therefore, he need not be S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -16- compensated. Learned counsel Mr.Singhal pointed out that in the case of R.L. Jain (supra), interest was denied on equitable grounds and learned counsel Mr.Purohit submits that even in the case of R.L. Jain (supra), the judgment of Satinder Singh (supra) has not been reversed but in fact in the case of R.L. Jain, the judgment of Satinder Singh has been upheld by observing that the normal rule is that if on account of acquisition of land, a person is deprived of possession of his property, he should be paid compensation immediately. 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. The issue was also considered in the case of Smt. Lila Ghosh (supra) wherein the Hon'ble Supreme Court held that, “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 S.34 or S.28. Thus interest under these sections can only start running from the date the compensation is payable. Normally S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -17- this would be from the date of the award. There may be cases under S.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 S.17. As in cases under S.17 compensation is payable interest may run from the date of possession was taken. The same view was taken by the Hon'ble Supreme Court in the case of Budh Singh (supra). It is true that three Judges bench of the Hon'ble Supreme Court in the case of Satinder Singh (supra) after considering the effect of various provisions of East Punjab Requisition of Immovable Property (Temporary Powers) Act, 1948 and the Act of 1951 as well as the Act of 1894 held that the persons who have been deprived from possession of their land are entitled to compensation/interest forthwith obviously from the date possession was taken from him but that can be a position when possession is taken without authority of law or illegally or under the garb of exercise of legal right or under illegal proceedings and party is deprived of possession without compensation/mesne profit/ or rent. If S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -18- possession of the property was taken by agreement or by exercise of legal right in whatever form which is not found illegal at any time than the party whose property has been taken over by the other party cannot claim compensation or damages. He is entitled to rent or mesne profit or any amount in any farm only in accordance with the agreement, if it is there, and if possession was taken by exercise of legal right than as per law under which possession was taken. Here in this case, admittedly, the possession fo the land was taken from the cultivators under the statutory provisions of law for requisition of land on payment of rent which itself provided for periodical payment/rent to cultivators. Once the cultivators were entitled to rent for their land under the Act of 1971 than for the same period they cannot claim damages or compensation. If we look into the judgment delivered in the case of Satinder Singh as well as other judgments referred above, then there appears to be no conflict in two sets of judgments. In Satinder Singh's case, the Hon'ble Supreme Court held that, “It would thus be noticed that the claim for interest proceeds on the assumption that when the owner of immovable property loses possession of it S.B. Civil Misc. Appeal No.508/1996 Union of India. Vs. Ramawatar & Ors -19- he is entitled to claim interest in place of right to retain possession.” The same is the view taken in other judgments and in none of the judgments, it has been held that the person is entitled to interest/compensation under Land Acqusition Act, as the case may be, even if possession of his property is taken under compulsory acquisition/requisition by exercise of power under law providing for payment of rent for the land. The