IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY FIRST DAY OF JULY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MS JUSTICE G.ROHINI WRIT PETITION NO : 13250 of 2008 Between: 1 Bheemavaram Eswar Reddy, S/o.Chinna Subba Reddy R/o.Sankarapuram, Kadapa, Kadapa District. 2 Duggal Seshamma, W/o.Obulreddy R/o.Siddavaram Village, Penagalur Mandal, Kadapa Dist. 3 Siddam Penchalaiah, S/o.S.Narasimulu R/o.Budurupalli Village, Atlur Mandal, Kadapa District. 4 Sige Subbaiah, S/o.Late. Sige Chinnaiah R/o.Budurupalli Village, Atlur Mandal, Kadapa District. 5 Mamidi Obulreddy, S/o.Chanchu Reddy R/o.Malinenipatnam Village, Atlur Mandal, Kadapa District. 6 Y.Ramulamma. W/o.Y.Venkata Subbareddy R/o.Bovillavaripalli Village, Budvel Mandal, Kadapa District. 7 Lebaku Srinivasulureddy, S/o.Ramachandra Reddy R/o.Siddaram Village, Penagalur Mandal, Kadapa Dist. 8 Pendyam Venkata Subbaiah, S/o.Gangaiah R/o.Balireddy Bail (SC Colony), Village, Atlur (M), Kadapa District. 9 Sige Gangaiah, S/o.Subbaiah R/o.Madakalavalli (V), Budvel (M), Kadapa District. 10 Bovilla Narasimhareddy, S/o.G.Narasimhareddy R/o.Muthukur (V), Atlur (M), Kadapa District. 11 Mudumala Gopalamma, W/o.Nagamunireddy R/o.Vemulur (V), Atlur (M), Kadapa District. 12 Dandu Subbamma, W/o.Subbaiah R/o.Ghothapalli (V), Atlur (M), Kadapa District. 13 Gurrampati Yellamma, W/o.Chinna Gopireddy R/o.Sankarapuram, Kadapa Dist. 14 Sige Gangaiah, S/o.Subbaiah R/o.Madakalavaripalli (V), Budvel (M), Kadapa District. 15 Siddam Bharati, W/o.Narasaiah R/o.Balireddybai, SC Colony (V), Atlur (M), Kadapa District. 16 Nadendla Lakshmi Narasamma, W/o.Ankaiah R/o.Balireddy Bai, SC Colony, Atlur (M), Kadapa District. 17 Siddam Narasaiah, S/o.Narasimulu R/o.Balireddy Bai, SC Colony, Atlur (M), Kadapa District. 18 Neelam Venkataramana, S/o.Chenchaiah R/o.Balireddy Bai, SC Colony, Atlur (M), Kadapa District. 19 Sanapureddy Punnalamma, W/o.Gangireddy R/o.Kondur Near Viswnathapuram (V), Atlur (M), Kadapa District. 20 Nelaturu Lakshumma, W/o.Venkatareddy R/o.G.Kothapali (V), Atlur Mandal, Kadapa District. 21 Shaik Saibee, W/o. Late. Shaik Kadar Valli, R/o.Nabiyabad (V), Atlur (M), Kadapa District. 22 Kasala Jayaramaiah, S/o.Subbaiah R/o.Balireddy Bai, SC Colony, Atlur (M), Kadapa District. 23 B.Yellareddy, S/o.Pedda Yellareddy R/o.Salabad (V), Ontimittla (M), Kadapa District. 24 Neerugattu Gangaiah, S/o.Balachemaiah R/o.Balireddy Bai SC Colony, Atlur (M), Kadapa District. 25 Sige Santaiah, S/o.Subbaiah R/o.Balireddy Bai SC Colony, Atlur (M), Kadapa District. 26 Mamidi Obulreddy, S/o.Obilreddy R/o.Madhavaram I (V), Sidhout (M), Kadapa District. 27 Siddam Narasimulu, S/o.Penchalaiah R/o.Balireddy Bai SC Colony, Atlur (M), Kadapa District. 28 Neerugattu Santiah, S/o.Gangaiah R/o.Balireddy Bai SC Colony, Atlur (M), Kadapa District. 29 Siddam Penchalaiah, S/o.Narasimulu R/o.Seetapuram (V), Ontimitta (M), Kadapa District. 30 Sige Subbaiah, S/o.Chinnaiah R/o.Balireddy Bai SC Colony, Atlur (M), Kadapa District. 31 Gangam Chennaiah, S/o.Lakshumaiah R/o.Balireddy Bai SC Colony, Atlur (M), Kadapa District. 32 Pendam Venkata Subbaiah, S/o.Gangaiah R/o.Balireddy Bai SC Colony, Atlur (M), Kadapa District. 33 Neerugattu Gangaiah, S/o.Balachennaiah R/o.Balireddy Bai SC Colony, Atlur (M), Kadapa District. 34 Mukkara Obulamma, W/o.Chinna Govindareddy R/o.Madhavaram I, Sidhout (M), Kadapa District. 35 Jyothi Santamma, W/o.Tirupalreddy R/o.Gollapalli (V), Sidhout (M), Kadapa District. 36 Mukkara Yellamma, W/o.Pedda Govindareddy R/o.Jyothi Village, Siddavatam (M), Kadapa District. 37 Mamidi Kondaiuah gari Obulreddy, S/o.Obulreddy R/o.Madhavaram I, Sidhout (M), Kadapa District. 38 Gurrampati Ramachandra Reddy, S/o.Venkata Subbareddy R/o.Kongalaveedu (V), Budvel (M), Kadapa District. 39 Palli Obulamma, W/o.Chinnapureddy R/o.Nehrunagar, Kadapa City, Kadapa District. 40 Shaik Hussain Bee, W/o.Kamal Saheb R/o.Madhavaram I (V), Sidhout (M), Kadapa District. 41 Nagam Yella Reddy, S/o.Pedda Subbareddy R/o.Badvel Town, Budvel (M), Kadapa District. 42 Neelam Gangamma, W/o.Chennaiah R/o.Chenchugaripalli (V), Ontimitta (M), Kadapa Dist. 43 Gurivigandla Subbamma, W/o.Gangaiah R/o.Chenchugaripalli (V), Ontimitta (M), Kadapa Dist. 44 Siddam Narasaiah, S/o.Narasimulu R/o.Balireddy Bai SC Colony, Atlur (M), Kadapa District. 45 Siddam Narasimulu, S/o.Penchalaiah R/o.Balireddy Bai SC Colony, Atlur (M), Kadapa District. 46 Kudumala Ravindra Reddy, S/o.K.Suryareddy R/o.Muthikur (V), Atlur (M), Kadapa District. 47 Shaik Nabi Saheb, S/o.Nabi Saheb R/o.Nabiyabad (V), Atlur (M), Kadapa District. 48 Shaik Hussain Saheb, S/o.Pakeer Saheb R/o.Nabiyabad (V), Atlur (M), Kadapa District. 49 Gurrampati Mastan Vali, S/o.Khader Hussaian R/o.Badvel Town, Budvel (M), Kadapa District. 50 Arava Narayanamma, W/o.Ramanareddy R/o.Madhavaram I (V), Sidhout (M), Kadapa District. 51 Nerrugattu Lakshmi Devi, W/o.Yellaiah R/o.Madhavaram I (V), Sidhout (M), Kadapa District. 52 Shaik Rahamathulla, S/o.Imam Saheb R/o.Madhavaram I (V), Sidhout (M), Kadapa District. 53 Shaik Hussain Bee, W/o.Kamal Saheb R/o.Madhavaram I (V), Sidhout (M), Kadapa District. 54 Bovilla Papireddy, S/o.Narasimhareddy R/o.Muthikur (V), Atlur (M), Kadapa District. 55 Kothuru Mallamma, W/o.Narasimha Reddy R/o.Sankarapuram, Kadapa City, Kadapa District. 56 Pasupuleti Suseelamma, W/o.Subbarayudu R/o.Balireddy Bai SC Colony, Atlur (M), Kadapa District. 57 Sige Nagaiah, So.Sige Subbaiah R/o.Balireddy Bai, SC Colony (V), Atlur (M), Kadapa District. 58 Neerugattu Bala Chennaih, S/o.Subbaiah R/o.Balireddy Bai SC Colony (V), Atlur (M), Kadapa District. ..... PETITIONERS AND 1 The Special Collector, Galeru Nagari Srujala Sravanthi, Kadapa, Kadapa District. 2 The Special Deputy Collector (LA), TGP Unit-II, Kadapa, Kadapa District-Cum-The Land Acquisition Officer. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ order or direction more particularly one in the nature of writ of mandamus under article 226 of the constitution of India declaring the orders passed by the respondents in award NO 1/2007-08 (u/s28-A) dated 11.01.2008 denying interest on the enhanced compensation from the date of the notification /taking possession till the date of the applications made under section 28-A of the land acquisition act in terms of the award of the reference court in LAOP No s 248 to250 of the Honble court and also deducting income tax as illegal, arbitrary unjust and violative of articles 14 and 300-A of the constitution of India and also contrary to sections 28-Aand 34 of the land acquisition act and affends article 14 of the Constitution of India and consequently direct the respondents to pay interest from the date of the notification/taking possession till the date of making applications under section 28-A of the Act and also the amount deducted towards income tax and pass Counsel for the Petitioner: MR.P.SRIDHAR REDDY Counsel for the Respondent No.: GP FOR LAND ACQUISITION The Court made the following : THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION No. 13250 of 2008 O R D E R: The petitioners herein claim to be the owners of different extents of land situated in Bedusupalli Village, h/o Chenduvoy Village, Atloor Mandal, Kadapa District. It is not in dispute that the said lands along with structures standing thereon were acquired for the purpose of foreshore submergence under 330 contour of Somasila project vide notification dated 20-02-1995 published under Section 4(1) of the Land Acquisition Act, 1894 (for short ‘the Act’). Pursuant thereto, after conducting due enquiry, the 2nd respondent-Land Acquisition Officer vide award dated 31-08-1995 in award No.5/95 fixed the compensation and the same was paid to the petitioners as well as other claimants. However, not being satisfied with the quantum of compensation some of the claimants sought reference under Section 18 of the Act and in pursuance thereof, LAOP.Nos.248 to 250 of 2000 were taken up by the District Judge Kadapa and by order dated 26-02-2002 the compensation awarded by the Land Acquisition Officer was enhanced apart from granting the statutory benefits including additional market value at 12% per annum under Section 23(1) (a) of the Act from the date of passing of award i.e. 31-08-1995, solatium at 30% under Section 23(2) of the Act on the market value fixed by the Court and interest at 9% per annum under Section 34 of the Act on the enhanced market value for a period of one year from the date of passing of award and thereafter at 15% per annum till the date of realization. The claimants therein were also granted interest on additional market value and solatium at 9% per annum for one year from the date of award and thereafter at 15% per annum till the date of realization. Challenging the said order of the civil Court, the Government preferred appeals and this Court while allowing the said appeals, in part, reduced the enhanced compensation as awarded by the civil Court from 100% to 80%. This Court, while maintaining the other statutory benefits as awarded by the civil Court, made it clear that the claimants shall be entitled to 12% additional amount from the date of notification for one year and thereafter at 15% per annum till the date of payment. It is stated that the petitioners herein could not seek such reference under Section 18 of the Act and having came to know of the enhancement granted by the civil Court in LAOP.Nos.248 to 250 of 2000, they made applications under Section 28-A of the Act seeking re-determination of compensation on the basis of the awards passed by the reference Court. Since the said applications were not considered, the petitioners filed W.P.No.23424 of 2006 which was allowed by this Court by order dated 10-11-2006 with a direction to the respondents to examine the representations filed by the petitioners and to pass appropriate orders within a period of four weeks. Pursuant thereto, the 2nd respondent passed an order dated 11-01-2008 re-determining the compensation. However, though the enhancement of compensation by 80% in terms of the order of the reference Court in LAOP.Nos.248 to 250 of 2000 as modified by this Court in A.S.No.449 of 2004 and batch was granted, the 2nd respondent had awarded the interest only from the date of applications under Section 28-A of the Act. Hence, the petitioners preferred the present writ petition challenging the order of the 2nd respondent dated 11-01-2008 to the extent of interest awarded. It is contended by the petitioners that they are entitled for grant of interest from the date of notification till the date of making applications under Section 28-A of the Act. It is also contended that 2nd respondent had committed an error in deducting income tax at 10%. It is submitted by the learned counsel for the petitioners that deduction of the income tax is impermissible under law as held by this Court in Ratan Pratap Singh and others v. Land Acquisition Officer[1] I have heard the learned counsel for the petitioners as well as the learned Government Pleader appearing for the respondents and perused the material on record. The contention of the learned counsel for the petitioners that the 2nd respondent ought to have awarded interest from the date of notifications is in terms of the settled legal position and the same has not been disputed by the learned Government Pleader for Land Acquisition. So far as deduction of income tax at 10% is concerned, this Court, while following the decision of the Supreme Court in (1997) 10 SCC 243 held in Rana Pratap Singh’s case (1) supra that although the interest accumulated on the compensation is subject to income tax, but it does not empower the Officer concerned to make deductions at source. Having regard to the above legal position, I find force in the submissions of the learned counsel for the petitioners that the impugned order to the extent of deducting the income tax and also in denying the interest from the date of notification is arbitrary and illegal. Accordingly, the impugned order dated 11-01-2008 is set aside to the extent of the interest awarded and the deduction of 10% towards income tax and the writ petition is disposed of holding that the petitioners herein shall be entitled to interest in terms of the award passed in LAOP.Nos.248 to 250 of 2000 as modified in A.S.No.449 of 2004 and batch. The writ petition is accordingly disposed of modifying the impugned order to the extent mentioned above. No costs. ______________ G. ROHINI,J Date: 21-07-2008 Note: Issue C.C. in one week B/o KLP [1] 1998 (5) ALD 299.