Compensation payable from the moment land is deprived of possession: Supreme Court

IN THE CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. OF 2022 Arising from the SLP(C) No.________ of 2022 Diary No. 175620 GAYABAI DIGAMBAR PURITHR. LR APPELLANT(s VERSUS THE EXECUTIVE ENGINEER & ORS. RESPONDENT(s O R D E R Delay condoned. Leave granted. This appeal takes exception to the judgment and order dated 28.02.2019 passed by the High Court of Judicature at Bombay at Aurangabad in First Appeal No 6919. The limited issue involved in this appeal is about the liability to pay interest whether commences from the date of taking possession or only from the date of award. The Court while issuing notice on 13.01.2021 noted thus “Counsel for the petitioner(s) submits that the High Court has glossed over the crucial fact that in the present case urgency clause was invoked. In that event in light of the exposition of this Court in R.L. Jainby LRs vs. D.D.A. & Ors. reported in4 SCC 79 the interest ought to be payable from the date of taking Issue notice on the application for condonation of delay as also on the special leave petition returnable in four weeks. Dasti in addition is permitted. Liberty is granted to serve standing counsel for the State of Maharashtra.” It is discerned from the judgment of the Reference Court dated 22.11.2021 that the interest was ordered to be paid from 04.04.1997 when possession was taken until 03.04.1998 for the first year at the rate of 9 per cent per annum and thereafter at the rate of 15 per cent per annum from 04.04.1998 till the date of payment i.e. 08.09.2004. The relevant part of the operative order of the Reference Court reads thus iv) The respondent No.1 to 3 shall also pay interest to the petitioner on the difference of market value @ Rs.9% per annum from 04.04.1997 to 03.04.1998 for the first year and thereafter Rs. 15% per annum from 04.04.1998 till the date of payment i.e. 08.09.2004under Sec. 34 of the Land Acquisition Act The High Court in the impugned judgment and order has not specifically dealt with this aspect whilst overturning the said direction issued by the Reference It is well settled 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 and if the same is not paid to him forthwith he would be entitled to interest on the compensation amount from the date of taking possession of the land till the date of payment thereof as expounded in R.L. Jain by Lrs. Vs D.D.A. & Ors. reported in 4 SCC 79 SECTION IX S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS SPECIAL LEAVE PETITIONDiary No(s). 17566 2020 Arising out of impugned final judgment and order dated 28 02 2019 in FA No. 692 2019 passed by the High Court Of Judicature At Bombay GAYABAI DIGAMBAR PURITHR. LR Petitioner(s VERSUS THE EXECUTIVE ENGINEER & ORS. Respondent(s IA No. 129362 2020 CONDONATION OF DELAY IN FILING IA No. 129363 2020 EXEMPTION FROM FILING C C OF THE IMPUGNED Date : 03 01 2022 These matters were called on for hearing today CORAM : HON BLE MR. JUSTICE A.M. KHANWILKAR HON BLE MR. JUSTICE C.T. RAVIKUMAR Mr. Mrityunjai Singh Adv. Mr. Shankar Chillage Adv. Mr. Sudhansu Palo AOR Mr. Uday B. Dube AOR Mr. Sachin Patil AOR Mr.Rahul Chitnis Adv. Mr. Aaditya a. Pande Adv. Mr. Geo Joseph Adv. Ms. Shwetal Shepal Adv. UPON hearing the counsel the Court made the following O R D E R Delay condoned. Leave granted. The appeal is disposed of in terms of the signed order. Pending applications if any stand disposed of DEEPAK SINGH) COURT MASTER (NSH Signed order is placed on the file

Summary: The issue involved the clarity regarding the liability to pay interest and whether the liability commences from the date of acquiring possession of the land or only from the date of award in a land acquisition matter before the Supreme Court division bench consisting of Justice A.M. Khanwilkar and Justice CT Ravikumar in the matters between Gayabhai Digambar Puri (Died) Through LR v. The Executive Engineer and Ors. decided on 3.1.2022. The facts of the case are The appellant claimed that when a person’s land was acquired, compensation should be paid to him immediately after he had been deprived of possession. In this case, the reference court ordered interest to be paid from April 1997 to March 1998, when the possession was taken. at a rate of 9 percent per annum for the first year and then at a rate of 15 percent per annum from April 1998 until the payment date in September 2004. Subsequently, the Bombay High Court overturned this decision of the Reference Court. The judgement text does not mention any arguments or contentions by either the Petitioner or Respondent. The apex court held that in RL Jain v. DDA case, it decided that the matter had been resolved, with its 2004 decision ruling that the person whose land was purchased would be entitled to interest from the day the land was acquired. In this case aforementioned, RL Jain v. DDA and Ex. (2004) 4 SCC 79 it was held that in a situation where the landlord’s dispossession fell before prior notice under section 4 of the Act, it was clear that the landlord could reclaim possession of his land by taking appropriate legal action. Thus, in the present case, the appellant would be entitled to interest from 4 April 1997, the date on which the land was deprived of ownership. According to the normal rule, if a person is deprived of his property due to land acquisition, he must be immediately compensated, and if the same is not paid to him immediately, he will be entitled to interest. compensation amount from the date of taking possession of the land to the date of payment.The appeal was partly allowed.