KAZI AKILODDIN SUJAODDIN vs. STATE OF MAHARASHTRA .

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.    5084              OF 2013 (arising out of SLP(C)No.31318  of 2011) KAZI AKILODDIN SUJAODDIN           … APPELLANT Versus STATE OF MAHARASHTRA & ORS.          … RESPONDENTS J U D G M E N T SUDHANSU JYOTI MUKHOPADHAYA, J. Leave granted.  The appellant is aggrieved by impugned  th order   dated   15   September,   2011   passed   by   the   Division  Bench of the High Court of Bombay, Nagpur Bench, Nagpur in  a   Review   Application,   MCA   No.774/2011.   By   the   impugned  JUDGMENT order the Division Bench reviewed and recalled the judgment  th and order dated 5   October, 2010 passed in Writ Petition  No.3883/2010(D)   filed   by   the   appellant.   The   High   Court  further directed the State of Maharashtra to deposit rental  compensation   at   the   rate   of   8%   of   the   amount   of  Rs.1,07,82,270/­ as enhanced and awarded by the Reference  Court,   in   First   Appeal       No.06/2010,     as   the   same   is  Page 1 2 pending against the award passed by the Reference Court.  The   High   Court   by   the   impugned   order   also   allowed   the  appellant to withdraw only half of the amount deposited by 

Nationalised Bank pending the litigation. 2. The only question involved in this appeal is whether  the   High   Court   of   Bombay,   Nagpur   Bench   was   justified   in  directing the State to deposit the rental compensation with  the Appellate Court at the rate of 8%   per annum on the  award value passed by the Reference Court for the period of  occupation   before   formal   acquisition,   allowing   the  appellant to withdraw only 50% of such rental compensation  during the pendency of the appeal.   JUDGMENT 3. The factual matrix giving rise to this appeal are as  follows:­   The matter relates to payment of rental compensation  with   regard   to   land   occupied   by   State   before   the   formal  acquisition.     The   Land   Acquisition   Act,   1894   does   not  contemplate   the   payment   of   any   rental   compensation.   The  entitlement   of   rental   compensation   is   on   the   basis   of  Page 2 3 resolutions   and   instructions   issued   by   the   State   of  th Maharashtra   from   time   to   time   since   7   February,   1949  nd st including   Resolutions   dated   2   May,   1961,   1   December, 

4. By the aforesaid Resolutions, the State of Maharashtra  has empowered the Irrigation and Power Department/Buildings  and Communication Department Officers to take possession of  lands   required   for   its   development   works   by   private  negotiations, wherever possible, as it was apprehended that  the   speed   of   acquisition   of   lands   under   the   Land  Acquisition   Act,   1894(hereinafter   referred   to   as   the  'Act'),   would   not   be,   in   view   of   its   procedural  requirements, commensurate with  the speed of work planned  by the Department, thus resulting in delay in execution of  JUDGMENT works.   It was also indicated that prompt payment of such  compensation should be done.  nd 5. By Resolution dated 2  May, 1961 it was decided by the  State   Government   that   in   cases   where   awards   have   been  declared   by   the   Revenue   authorities,   rental   compensation  should be paid at the rate of 4% per annum on the award  value   for   the   period   of   occupation   before   the   formal  Page 3 4 acquisition plus the adjustment which has been paid by the  owner of the land for that period in respect of that land.  st Subsequently, by Resolution dated 1    December, 1972 while 

JUDGMENT nd 6. By the subsequent Resolution dated 2   April, 1979 the  State Government decided to increase the percentage from 6­ Page 4 5 1/2%     to   8%   for   working   out   the   amount   for   payment   of  rental compensation, which reads as follows: “GOVERNMENT OF MAHARASHTRA

Read: Government   Resolution,   Irrigation  and   Power   Department,   No.IPM.  1069/20083/I(5), dated Ist December, 1972 Resolution:   The   question   of   raising   the  percentage of rental compensation admissible  to the title holders of the lands during the  period   from   the   date   of   taking   over   the  possession   of   their   lands   by   private  negotiations till the payment of final award  was   under   the   consideration   of   Government  for   some   time   past.   Government   is   now  pleased to increase the percentage from 6­ 1/2%   to   8%   laid   down   for   working   out   the  amount for payment of rental compensation in  paras   6   and   7   of   Government   Resolution,  Irrigation   and   Power   Department,  No.IPM.1069/20083­I(5),   dated   Ist   December,  1972 with effect from Ist January, 1979.” JUDGMENT th 7. The State Government by its Resolution dated 24  March,  1988 directed the authorities to pay rental compensation on  time   else   the   amount   is   payable   towards   interest.   The  relevant   portion   of   the   said   Resolution   is   quoted  hereunder: “3. It   has   come   to   the   notice   of   the  Government that the directions given in the  aforesaid   Government   Resolutions   are   not  Page 5 6

8. The respondent­State required the land of the appellant  for construction of flood protection wall for the city of  Akola and after negotiations the appellant handed over the  th possession of his land on 15  November, 1998 to the State.  Subsequently,   Notification   under   Section   4   of   the   Land  rd Acquisition Act, 1894, was published on 3   June, 1999 in  JUDGMENT respect   of   said   land,   followed   by   Notification   under  th Section 6 of the Act published on 18   November, 1999. The  th  Special   Land   Acquisition   Officer   by   his   award   dated   4 August,   2000   determined   the   compensation   at   the   rate   of  Rs.5,61,000/­ per hectare and awarded total compensation of  Rs.9,45,173/­ in favour of  appellant. Page 6 7 9. Aggrieved   by   the   award,   the   appellant   filed   an  application under Section 18 of the Act which on reference  registered   as   LAC   No.140/2000   in   the   Court   of   District 

August,   2001   towards   rental   compensation.   The   amount   was  calculated at the rate of 8% of the compensation awarded by  the Land Acquisition Officer.   The Reference Court by its  nd award   dated   2   August,   2008   allowed   the   application   and  enhanced   the   rental   compensation   @   8%   per   annum   on  th  Rs.1,07,82,270/­ with interest at the rate of 9% from 12 th October, 2000 to 11  October, 2001 that is for one year and  interest at the rate of   15% per annum, thereafter, till  the date of actual payment.  JUDGMENT 10. Aggrieved   by   the   enhancement,   the   State   Government  preferred First Appeal No.06/2009 before the High Court of  Bombay. In the said appeal, the High Court passed interim  th order   on   28   January,   2009   staying   operation,  implementation   and   execution   of   the   order   passed   by   the  Reference Court on the condition of depositing 50% of the  amount granted by the Reference Court.   The First Appeal  Page 7 8 No.06/2009 is still pending before the High Court for its  decision. 11. The appellant was also not happy with the award passed 

Appeal No.1210/2008, which is also pending before the High  Court. 12. During   the   pendency   of   the   appeals,   the   appellant  rd applied   to   the   3   respondent   for   grant   of   rental  compensation on the basis of enhanced compensation awarded  nd by the Reference Court by its order dated 2  August, 2008.  As no reply was received by the appellant he filed a Writ  Petition   No.2763/2009   before   the   High   Court   of   Bombay,  Bench at Nagpur.  The said writ petition was disposed of on  th 6   July,   2009   recording   the   statement   of   the   Assistant  JUDGMENT Government   Pleader   that   the   application   of   the   appellant  would be decided on merits at the earliest.   Thereafter,  rd the 3  respondent on consideration of the said application,  th by his letter dated 5  October, 2009 rejected the prayer on  the   ground   that   the   order   of   Reference   Court   was   under  challenge   before   the   High   Court.   Against   the   order   of  rejection   the   appellant   preferred   Writ   Petition  Page 8 9 No.3883/2010,   before   the   High   Court   of   Bombay,   Bench   at  Nagpur.   In   the   said   case,   the   Special   Land   Acquisition  th Officer,   4   respondent   filed   an   affidavit   assailing   the 

that   the   appellant   was   not   entitled   for   enhanced   rental  compensation on the basis of compensation awarded by the  Reference   Court.     The   High   Court   allowed   the   said   writ  th petition by order dated 5   October, 2010 referring to the  decision of this Court in   State of Maharashtra and others  vs.   Maimuma   Banu   and   others,   (2003)   7   SCC   448.   As   the  Division Bench ordered to pay enhanced rental compensation  to   the   appellant   as   per   award   passed   by   the   Reference  Court,   the   respondents   filed   a   review   petition   for  JUDGMENT th recalling   the   order   dated   5   October,   2010.     It   was  submitted that the order was passed by the High Court on  wrong   interpretation   of   decision   in   Maimuma   Banu   (supra)  and   that   there   is   an   error   apparent   on   the   face   of   the  record.  13. On   notice   and   hearing   the   parties,   the   High   Court  th passed   the   impugned   order   dated   15   September,   2011,  Page 9 10 th recalling   its   earlier   order   dated   5   October,   2010.   The  following   direction   has   been   issued   in   place   of   earlier  order:

6. Four weeks time is granted to deposit  the above said amount. 7. Order accordingly.” JUDGMENT 14. Learned counsel for the appellant contended that the  appellant is entitled for the enhanced rental compensation  proportionate   to   the   increase   in   compensation   awarded   by  the Reference Court. As per the policy of the respondent­ State, the claimant is entitled to rental compensation at  the rate of 8% of the amount of compensation awarded to the  claimant for acquisition of his land.  Circulars issued by  the State do not limit the rental compensation to 8% of the  Page 10 11 amount   awarded   by   the   Land   Acquisition   Officer.   The  resolutions do not stipulate that the rental compensation  should not be enhanced proportionate to the enhancement of 

courts.  15. Learned   counsel   for   the   appellant   further   contended  that   the   High   Court   committed   a   grave   error   in   deciding  against the appellant by   reviewing its own order on the  basis of judgment of this Court in  State of Maharashtra and  others vs. Maimuma Banu and others, (2003) (7) SCC 448.  16.   Per   contra,   according   to   the   respondents,   the  Reference   Court   enhanced   the   compensation   exorbitantly.  Therefore,   the   State   Government   was   left   with   no   other  option   but   to   challenge   the   award   by   filing   the   first  JUDGMENT appeal, registered as First Appeal No.06/2009.  17. In   Maimuma   Banu   (supra)   this   Court   noticed   that   the  State of Maharashtra by  its resolutions and instructions,  st th  contained   in the circulars dated 1   December, 1972, 17 nd th September,   1977,   2   April,   1979   and   24   March,   1988  provided   for   rental   compensation,   payable   to   the   title­ Page 11 12 holders of the lands.   Apart from those resolutions, the  provisions   of   the   Land   Acquisition   Act,   1894     do   not  contemplate   payment   of   any   rental   compensation.     In   the 

compensation’awarded   to   the   persons   whose   lands   were  acquired under the Land Acquisition Act, 1894; this Court  in the said case also held as follows: “ 9 .............It is not in dispute that  in most of the cases the rental compensation  has not been paid. If that factual position  continues,   it   clearly   is   a   case   where   the  amount   to   which   a   person   is   entitled   is  withheld without any legitimate excuse. The  learned   counsel   for   the   appellants  strenuously urged that in most of the cases  the   proceedings   have   not   yet   attained  finality and are pending either before the  Reference Court or in appeal.  That does not  provide   a   legitimate   excuse   to   the  appellants to withhold payment of the rental  compensation.   The   amount   calculated   on   the  basis   of   award   by   the   Land   Acquisition  Officer cannot be below than the amount to  be   ultimately   fixed.   If   in   appeal   or   the  reference   proceeding,   there   is   any  variation, the same can be duly taken note  of   as   provided   in   law.   There   is   no  difficulty and we find none as to why the  compensation   on   the   basis   of   value  determined   by   the   Land   Acquisition   Officer  cannot be paid. If there is upward revision  of the amount, the consequences will follow  and   if   necessary,   redetermination   of   the  rental   compensation   can   be   made   and   after  adjustment   of   the   amount   paid,   if   any,  JUDGMENT Page 12 13

18. From the aforesaid decision of this Court, it is clear  that   during   the   pendency   of   a   reference   proceeding   or  appeal before a Higher Court the rental compensation is to  be   determined on the basis of award passed by the Land  Acquisition   Officer.   Subsequently,   if   there   is   upward  revision   of   amount,   consequences   will   follow   and   if  necessary,                     re­determination   of   the   rental  compensation can be made and after adjustment of the amount  paid, if any, balance can be paid.  JUDGMENT 19. In the present case, we find that the State Government  along with the appellant is not satisfied with the award  passed   by   the   Reference   Court   and   hence,   two   appeals  against the said award by both parties are pending before  the High Court of Bombay, Nagpur Bench for determination.  Giving reference to the decision in  Maimuma Banu (supra)  it  was not open to the High Court to direct the authorities to  Page 13 14 pay   rental   compensation   as   per   award   passed   by   the  Reference   Court.   For   the   reason   aforesaid,   if   the   High  th Court   recalled   the   order   dated   5   October,   2010   and 

Reference   Court   with   the   appellate   Court,   allowing   the  appellant   to   withdraw   the   half   of   the   amount,   no  interference is called for.   However, this order will not  stand in the way of appellant to claim proportionate higher  rental compensation, if the order of the Reference Court is  upheld or further enhancement of compensation is made by  the Appellate Court. 20.  We find no merit in this appeal. It is, accordingly,  dismissed with observations as made above. No costs. JUDGMENT ………..……………………………………………..J. ( T.S. THAKUR ) ...……………………………………………………….J. NEW DELHI,            ( SUDHANSU JYOTI MUKHOPADHAYA)  JULY 3,  2013. Page 14