NOLAMBA VEERSHAIVA SANGHA (R) vs STATE OF KARNATAKA
- Court
- Karnataka High Court
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®
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ST
DATED THIS THE 1 DAY OF JUNE, 2026
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
WRIT PETITION NO. 55526 OF 2013 (GM-SLUM)
BETWEEN
NOLAMBA VEERSHAIVA SANGHA (R)
BY ITS SECRETARY
REPRESENTING MOORU KALASADA MUTT,
RD
1-A CROSS, 3 PHASE
TH
4 MAIN, BASAVESHWARA NAGAR
BANGALORE-560079
...PETITIONER
(BY SRI. SHANKARLINGAPPA NAGARAJ., ADVOCATE)
AND
1. STATE OF KARNATAKA
BY ITS SECRETARY
HOUSING & URBAN
DEVELOPMENT DEPARTMENT
M S BUILDINGS
BANGALORE-560001
2. KARNATAKA SLUM CLEARANCE BOARD
Digitally signed
by SHWETHA
RAGHAVENDRA
Location: HIGH
COURT OF
KARNATAKA
NO.55, ABHAY COMPLEX
RISALDAR STREET
SESHADRIPURAM
BANGALORE-560020
REP BY ITS COMMISSIONER
3. THE DEPUTY COMMISSIONER
HASSAN DISTRICT
HASSAN-573201.
…. RESPONDENTS
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(BY SRI. MAHANTESH., AGA FOR R1 & R3;
SRI. SURESH BABU B.N., ADVOCATE FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF
RD
MANDAMUS TO THE 3 RESPONDENT TO PAY INTEREST AT 5% ON
RS.32,71,500 FROM 21.05.1992 TILL THE DATE OF PAYMENT TO THE
PETITIONER AND ETC.
THIS WRIT PETITION COMING ON FOR ORDERS AND HAVING
BEEN RESERVED FOR ORDERS ON 13.03.2026, THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
CAV ORDER
1. The petitioner is before this Court seeking for the
following reliefs:
rd
a. Issue a writ of mandamus to the 3 Respondent to
pay interest at 5% on Rs.32,71,500/- from
21.05.1992 till the date of payment to the petitioner.
b. Pass any other order as this Hon’ble Court deems fit
in the facts and circumstances of the case including
an order as to costs in the interest of justice and
equity.
2. The petitioner claims to be the owner of land bearing
Katha No.70 and Assessment No.26, measuring 2600
sq. mtr., situated at Arasikere Town, forming part of
Sy.Nos.272 and 273, located in the heart of Arasikere
Town.
3. The State Government issued a notification dated
06/08.08.1979 under Section 3 of the Karnataka
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Slum Areas (Improvement and Clearance) Act, 1973
(for short, ‘the KSA Act’), which came to be
published in the Karnataka Gazette on 13.08.1979.
4. Thereafter, the Government issued a notification
dated 29.05.1992 under Section 11 of the KSA Act
declaring the subject land as acquired. Consequently,
in terms of Section 17 of the KSA Act, the land
vested with the State Government.
5. The petitioner contends that despite acquisition of
the land, compensation was not paid. Several
representations were submitted seeking payment of
compensation. Subsequently, the matter was
referred to the District Registrar of Stamps for
determination of the market value of the property,
who assessed the market value at Rs.46,31,588/-.
However, notwithstanding such determination,
compensation was not disbursed.
6. The petitioner thereafter issued a legal notice dated
24.01.2006, followed by further representations.
Eventually, the Deputy Commissioner, Hassan,
passed an award dated 14.01.2008 determining
compensation by applying 300 times the assessment
value in terms of Section 20(1) of the KSA Act. Even
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thereafter, the awarded amount was not paid despite
repeated requests and representations.
7. Ultimately, a sum of Rs.32,71,500/- came to be paid
to the petitioner on 09.05.2012. The petitioner states
that upon obtaining a certified copy of the award
dated 14.01.2008, it was noticed that no interest at
the rate of 5% per annum had been awarded, though
the land had vested with the State Government on
21.05.1992.
8. The petitioner therefore issued another legal notice
dated 30.04.2013 demanding payment of statutory
interest. Despite acknowledgment of the said notice,
no payment was made, compelling the petitioner to
approach this Court seeking the reliefs prayed for.
9. Sri. Shankaralingappa, learned counsel for the
petitioner would submit that
9.1. The preliminary notification under Section 3 of
the KSA Act was issued on 06/08.08.1979 and
the final notification under Section 17 of the
KSA Act came to be issued on 29.05.1992.
Consequently, the land stood vested with the
State Government with effect from 29.05.1992.
It is further submitted that, in fact, possession
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of the land had already been taken as early as
in the year 1979, since a slum had already
been formed on the subject property by that
time.
9.2. It is his further submission that the very
formation and existence of the slum over the
subject land necessitated issuance of the
notification under Section 3 of the KSA Act
declaring the area as a slum area. Section 3 of
the KSA Act is reproduced hereunder for easy
reference:
“Section 3 - Declaration of slum areas:
(1) Where the Government is satisfied that-
(a) any area is or is likely to be a source of
danger to health, safety or, convenience of
the public of that area or of its
neighborhood, by reason of the area being
low-lying insanitary, squalid, overcrowded
or otherwise; or
(b) the buildings in any area, used or
intended to be used for human habitation
are.--
(i) in any respect, unfit for human
habitation; or
(ii) by reason by dilapidation,
overcrowding faulty arrangement or faulty
arrangement of streets, lack of ventilation,
light or sanitation facilities, or any
combination of these factors, detrimental
to safety, health or morals, it may, by
notification, declare such area to be a slum
area.
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(2) In determining whether a building is unfit
for human habitation, for the purposes of this
Act regard shall be had to its condition in
respect of the following matters that is to
say.?
(i) repair,
(ii) stability,
(iii) freedom from damp,
(iv) natural light and air,
(v) water-supply,
(vi) drainage and sanitary conveniences,
(vii) facilities for storage, preparation and
cooking of food and for the disposal of waste
water,
and the building shall be deemed to be unfit
as aforesaid, if it is so defective in one or
more of the said matters that it is not
reasonably suitable for occupation.”
9.3. By relying on Section 3 of the KSA Act, he
submits that the very issuance of a notification
under the said provision is founded upon the
existence of an already developed slum area
occupied by persons residing in insanitary and
overcrowded conditions. He submits that the
statutory scheme under Section 3 does not
contemplate a mere proposed or anticipated
use of the land, but is intended to address an
existing factual situation where the land has
already come to be utilised for habitation in
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conditions detrimental to public health, safety
and convenience.
9.4. Elaborating the said contention, learned counsel
submits that Section 3 empowers the
Government to declare an area as a slum area
only upon its satisfaction that the locality is
low-lying, insanitary, overcrowded, squalid or
otherwise hazardous to public health and
safety, or where the buildings situated therein
are unfit for human habitation owing to
dilapidation, lack of ventilation, sanitation and
other basic civic amenities. Thus, according to
him, the exercise of power under Section 3
necessarily presupposes physical occupation of
the land by hutments, dwellings or other
human habitations existing on the property.
9.5. It is therefore contended that once the
respondents themselves issued the notification
under Section 3 in the year 1979, the same
constitutes a clear acknowledgment by the
State that the subject land was already being
utilised as a slum area and was under
occupation by slum dwellers.
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9.6. Learned counsel submits that the State cannot
now contend that possession continued with the
petitioner in the conventional sense thereafter,
since the very character of the property stood
altered by governmental intervention and
statutory control under the KSA Act.
9.7. Learned counsel further submits that from the
date of issuance of the notification under
Section 3 of the KSA Act, the petitioner was
effectively deprived of the beneficial
enjoyment, use and control of the property.
According to him, the petitioner could neither
develop the land, alienate it freely, nor exercise
ordinary incidents of ownership owing to the
statutory restrictions imposed under the KSA
Act and the existence of the notified slum. The
practical and beneficial possession of the land,
according to him, therefore stood substantially
divested from the petitioner from the year 1979
itself.
9.8. It is his submission that the subsequent
notification issued under Section 17 of the KSA
Act on 29.05.1992 merely formalised the
acquisition and statutory vesting of the land in
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favour of the State Government. However, in
substance, the State had already assumed
dominion and control over the property much
earlier by permitting and recognising the
existence of the slum and by regulating the
land under the provisions of the KSA Act.
9.9. Learned counsel therefore contends that the
respondents, having deprived the petitioner of
effective enjoyment and possession of the
property for several decades, were under a
corresponding statutory and constitutional
obligation to ensure expeditious payment of
compensation. The failure to pay compensation
within a reasonable period, despite vesting of
the property and continued utilisation thereof
for public purposes, is contended to be
arbitrary, unjust and violative of Article 300A of
the Constitution of India.
9.10. It is further contended that once the land
vested with the State Government under
Section 17 of the KSA Act on 29.05.1992, the
liability to pay compensation together with
statutory interest arose immediately. Learned
counsel submits that withholding payment for
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nearly twenty years and ultimately disbursing
compensation only on 09.05.2012, without
payment of interest, amounts to unjust
enrichment by the State at the expense of the
petitioner.
9.11. Section 17 of the KSA Act is reproduced
hereunder for easy reference:
“Section 17 - Power to acquire land
Where the Government is satisfied that, for
the purpose of executing any work of
improvements relation to any slum area or
any building in such area or for the purpose of
re-developing any slum clearance area, or for
the purpose of rehabilitating slum dwellers, it
is necessary to acquire any land within,
adjoining or surrounded, by any such area, it
may acquire the land by publishing in the
Official Gazette, a notice to the effect that it
had been decided to acquire the land in
pursuance of this section:
Provided that before publishing such notice,
the Government shall call upon the owner or
any other person who, in the opinion of the
Government, may be interested in such land,
to show cause why it should not be acquired;
and after considering the cause, if any, shown
by the owner or any other person interested
in the land, the Government may pass such
orders as it deems fit.”
9.12. Placing reliance on Sections 3 and 17 of the
KSA Act, learned counsel for the petitioner
submits that both provisions form part of an
integrated statutory scheme dealing with
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identification, regulation, improvement and
eventual acquisition of slum areas for public
purposes.
9.13. Elaborating the said submission, learned
counsel contends that a declaration under
Section 3 necessarily presupposes the
existence of an already developed slum area
characterised by insanitary, overcrowded and
uninhabitable living conditions. Thus, once the
notification under Section 3 came to be issued
in the year 1979, the State itself acknowledged
that the subject property had already come to
be occupied and utilised as a slum area
requiring governmental intervention and
regulation.
9.14. It is his submission that Section 17 constitutes
the next stage of the statutory process,
whereby the State acquires lands situated
within, adjoining or surrounding such notified
slum areas for the purposes of improvement,
redevelopment and rehabilitation of slum
dwellers. According to him, the acquisition
under Section 17 is therefore not an isolated
exercise of eminent domain, but a statutory
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continuation of the control and regulatory
measures initiated under Section 3 of the KSA
Act.
9.15. Learned counsel submits that in the present
case, from the very date of issuance of the
notification under Section 3 in the year 1979,
the petitioner was substantially deprived of the
beneficial enjoyment and effective control of
the property. The existence of the notified slum
and the statutory restrictions operating under
the KSA Act rendered the petitioner incapable
of freely using, developing or commercially
exploiting the land in the ordinary manner
available to a lawful owner.
9.16. It is further contended that the notification
issued under Section 17 on 29.05.1992 merely
formalised the statutory acquisition and vesting
of the land in favour of the State Government.
In substance, according to learned counsel, the
State had already assumed regulatory dominion
and control over the property from the year
1979 itself by recognising, regulating and
continuing the slum occupation upon the land.
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9.17. Learned counsel therefore submits that the
respondents cannot seek to enjoy the benefits
arising from occupation and utilisation of the
land for slum rehabilitation purposes while
simultaneously postponing payment of
compensation for decades together. Once the
land vested in the State Government pursuant
to the notification under Section 17, the
obligation to pay compensation together with
statutory interest arose immediately.
9.18. It is his submission that the delay in
determination and disbursement of
compensation till 09.05.2012, despite vesting
having taken place on 29.05.1992 and the land
having remained under statutory control even
prior thereto, amounts to arbitrary deprivation
of property contrary to Article 300A of the
Constitution of India.
9.19. Learned counsel lastly contends that the failure
of the Deputy Commissioner, while passing the
award dated 14.01.2008, to award statutory
interest from the date of vesting till the date of
actual payment defeats both the object of the
KSA Act and the constitutional requirement of
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ensuring just, fair and reasonable
compensation in cases of compulsory
acquisition.
10. Per contra, Sri Suresh Babu B.N., learned counsel
appearing for respondent No.2 – Karnataka Slum
Development Board, while not disputing the issuance
of notifications under Sections 3, 11 and 17 of the
KSA Act, fairly admits that the petitioner is entitled
to compensation in respect of the acquired land and
that compensation has in fact been paid.
10.1. However, learned counsel would contend that
the petitioner is not entitled to payment of
interest on the compensation amount.
Elaborating the said submission, he contends
that notwithstanding issuance of the
notifications under the KSA Act, physical
possession of the land was never formally taken
over from the petitioner at the relevant point of
time. According to him, whenever steps were
initiated pursuant to the notifications, the
petitioner had objected to the taking over of
possession and therefore the actual physical
possession continued to remain with the
petitioner.
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10.2. Learned counsel submits that mere issuance of
notifications under Sections 11 and 17 of the
KSA Act would not automatically entitle the
petitioner to claim interest unless it is
demonstrated that actual possession had been
taken over by the respondents. According to
him, since the petitioner continued to remain in
possession of the property, there was no
deprivation warranting payment of interest over
and above the compensation already awarded.
10.3. It is his submission that the payment of
compensation itself sufficiently satisfies the
statutory obligation cast upon the respondents
under the KSA Act and that no additional
financial liability by way of interest can be
imposed in the absence of proof regarding the
date of actual dispossession.
10.4. On a specific query being put to the learned
counsel as to when possession of the land was
in fact taken over, particularly when the
existence of a slum on the property is not in
dispute, learned counsel fairly submits that
there is no material available on record
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indicating the exact date on which physical
possession was taken by the respondents.
10.5. Learned counsel nevertheless contends that in
the absence of any mahazar, possession
certificate or contemporaneous document
evidencing formal delivery of possession to the
State or the Slum Board, the petitioner cannot
automatically claim entitlement to statutory
interest solely on the basis of issuance of
acquisition notifications under the KSA Act.
11. Learned Additional Government Advocate, reiterating
the stand of the State, submits that
11.1. Notifications under Sections 3, 11 and 17 of the
KSA Act had been validly issued and that the
petitioner was fully aware of the acquisition
proceedings from their inception.
11.2. Elaborating the said submission, learned AGA
points out that the petitioner had earlier
challenged the notification issued in the year
1979 by filing W.P.No.24109/1990 before this
Court. During the pendency of the said writ
petition, the notification dated 29.05.1992
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came to be issued under Section 17 of the KSA
Act acquiring the subject land.
11.3. Learned AGA submits that the aforesaid writ
petition ultimately came to be dismissed while
reserving liberty to the petitioner to challenge
the subsequent notification dated 29.05.1992.
However, despite such liberty having been
expressly reserved, the petitioner did not
challenge the acquisition notification issued
under Section 17 of the KSA Act and thereby
allowed the acquisition proceedings to attain
finality.
11.4. It is therefore contended that the vesting of the
land in favour of the State Government under
Section 17 has become conclusive and binding
upon the petitioner and the petitioner cannot
now indirectly reopen issues concerning
acquisition or possession while seeking interest
on the compensation amount.
11.5. Learned AGA further submits that the petitioner
had also submitted representations and
objections before the Principal Secretary to
Government, Housing Department, questioning
the acquisition proceedings and seeking
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redressal of grievances relating to the subject
property.
11.6. The said representations and objections,
according to learned AGA, came to be
considered and rejected by order dated
04.09.2000. Under the said order, the
Government directed the Karnataka Slum
Development Board to explore acquisition of
the subject land by mutual agreement in terms
of Section 26A of the KSA Act.
11.7. Learned AGA therefore submits that the
Government had, at all stages, acted bona fide
and in accordance with the statutory scheme
under the KSA Act. It is contended that the
respondents have already paid compensation to
the petitioner and no further liability survives
insofar as the claim for interest is concerned.
11.8. He refers to Section 26A of the KSA Act is
reproduced hereunder for easy reference:
“Section 26A - The Board to have power to
acquire land by agreement
(1) Notwithstanding anything contained in
Sections 17 and 20, the Board may, with the
previous approval of the Government, enter
into an agreement with any person for the
acquisition from him, by purchase, lease or
exchange of any land within, adjoining or
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surrounded by any slum area or slum
clearance area, or any interest in such land
which is needed for the purpose of executing
any work of improvement in relation to any
slum area or any building in such area or for
the purpose of redeveloping any slum
clearance area, or for the purpose of
rehabilitating slum dwellers.
(2) Where any land is acquired under sub-
section (1), the Board may undertake the
measures referred to in sub-section (1) of
Section 27 in accordance with such plans as
may be approved by the Government and
subject to such directions as may from time to
time, be given by the Government.”
11.9. Placing reliance on Section 26A of the KSA Act,
learned AGA submits that the statutory scheme
itself contemplates acquisition of lands either
through compulsory acquisition under Section
17 or through consensual acquisition by
agreement under Section 26A. According to
him, the order dated 04.09.2000 passed by the
Principal Secretary directing the Board to
explore acquisition by agreement clearly
demonstrates the bona fide intention of the
Government to resolve the matter amicably and
avoid further disputes.
11.10. Learned AGA contends that Section 26A begins
with a non obstante clause overriding Sections
17 and 20 of the KSA Act and thereby provides
an independent statutory mechanism enabling
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the Board to acquire land through negotiation,
purchase, lease or exchange with the consent
of the land owner. It is therefore submitted that
the Government was justified in directing the
Board to initiate negotiations with the petitioner
for the settlement of compensation by mutual
agreement.
11.11. It is his submission that the respondents were
continuously engaged in resolving the issue
relating to compensation and there was no
deliberate or intentional withholding of amounts
payable to the petitioner. According to him, the
delay, if any, occurred on account of the
pendency of disputes and objections raised by
the petitioner regarding acquisition and
possession.
11.12. Learned AGA further submits that the
petitioner, having participated in the
proceedings and having accepted the
compensation amount ultimately paid, cannot
now seek to impose an additional liability upon
the State by way of interest, particularly when
the issue regarding possession itself remained
disputed.
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11.13. It is therefore contended that the provisions of
Section 26A, read in conjunction with the
earlier proceedings before the Government and
this Court, would clearly indicate that the
respondents had acted within the framework of
the KSA Act and had made bona fide attempts
to settle the matter. Hence, according to
learned AGA, no case is made out for
interference by this Court in exercise of
jurisdiction under Articles 226 and 227 of the
Constitution of India.
11.14. His submission is that notwithstanding Section
17 and 20 of the KSA Act, an agreement could
be arrived at. However, no agreement was
arrived at.
11.15. He refers to Section 20 of the KSA Act is
reproduced hereunder for easy reference.
“Section 20 - Amount payable
(1) The amount payable in respect of any
land acquired under this Act shall be [three
hundred] times the property tax payable in
respect of such land on the date of publication
of the notice referred to in section 17, under
the municipal law applicable to such area and
where no such property tax is payable in
respect of such land, the property tax payable
in respect of similar land adjacent thereto.
(2) The prescribed authority shall, after
holding an enquiry in the prescribed manner,
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determine by order the amount payable under
sub-section (1) and publish the said order in
the Official Gazette, A copy of the said order
shall be communicated to the owner of the
land and every person interested therein.
(3) Where the owner of the land and the
owner of the building on such land are
different, the prescribed authority all
apportion the amount between the owner of
the land and the owner of the building (in the
same proportion as the value of the land
bears to the value of the building on the date
of the acquisition).”
11.16. Placing reliance on Section 20 of the KSA Act,
learned AGA submits that the statute itself
specifically prescribes the manner in which
compensation is to be determined in respect of
lands acquired under the Act. According to him,
the Legislature, in its wisdom, has consciously
adopted a fixed statutory formula by providing
that the amount payable shall be three hundred
times the property tax payable in respect of the
acquired land.
11.17. Learned AGA contends that once the statute
expressly stipulates both the method of
determination and the quantum payable, the
entitlement of the land owner stands confined
to the amount so determined under Section 20
of the KSA Act. It is therefore submitted that
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no additional amount by way of market value,
solatium or statutory interest can be claimed
unless specifically provided for under the Act
itself.
11.18. It is his submission that Section 20 constitutes
a self-contained code governing compensation
payable under acquisitions made pursuant to
the KSA Act. Unlike acquisitions under the Land
Acquisition Act, 1894, the KSA Act does not
contain any express provision mandating
payment of interest for delayed disbursement
of compensation.
11.19. Learned AGA therefore submits that this Court
cannot import principles relating to interest,
solatium or enhanced compensation from the
Land Acquisition Act into proceedings governed
exclusively by the KSA Act, particularly when
the Legislature has intentionally framed a
distinct mechanism for the determination of
compensation under the special enactment.
11.20. It is further contended that the prescribed
authority, namely the Deputy Commissioner,
has already conducted the enquiry
contemplated under Section 20(2) of the KSA
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Act and passed the award dated 14.01.2008
determining the compensation payable to the
petitioner strictly in accordance with the
statutory formula prescribed under Section
20(1) of the KSA Act.
11.21. Learned AGA submits that the petitioner has
accepted the compensation amount determined
under the award and has not challenged either
the methodology adopted for computation or
the quantum of compensation awarded. In that
background, according to him, the petitioner
cannot maintain a separate claim solely seeking
interest over and above the amount statutorily
determined and paid under the KSA Act.
11.22. It is therefore contended that the claim made
by the petitioner for payment of interest lacks
the statutory foundation under the KSA Act and
is liable to be rejected.
11.23. His submission is that since no agreement was
arrived at in terms of Section 20 of the KSA
Act, the compensation was calculated and
award was passed on 14.01.2008 for a sum of
Rs.32,71,500/- and the amount paid thereafter
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on 09.05.2012. Therefore, he submits that no
interest is required to be paid.
11.24. He, however, submits that though the petitioner
was the owner of the land, it was occupied by a
number of persons calling themselves slum
dwellers, and the petitioner was not in
possession of the subject land or even a portion
thereof, the actual slum dwellers had sought
rehabilitation in the same land. They could not
be evicted, and as such, the land was acquired.
11.25. His further submission is that the compensation
having been paid on 09.05.2012 and the Slum
Clearance Board became the owner of the said
land on that date. The question of payment of
interest does not arise.
11.26. He relies on Section 24 of the KSA Act and
submits that the interest would be liable to be
paid if the compensation is not deposited on or
before taking possession.
11.27. Section 24 of the KSA Act is reproduced
hereunder for easy reference:
“Section 24 - Payment of interest
When the amount is not paid or deposited on
or before taking possession of the land, the
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prescribed authority shall pay the amount
with interest thereon at the rate of five per
cent per annum from the time of so taking
possession until it shall have been so paid or
deposited and such interest shall be paid or
deposited by the prescribed authority in the
same manner as provided for the amount.”
11.28. Placing reliance on Section 24 of the KSA Act,
learned AGA submits that the statute itself
clearly specifies the circumstances under which
interest becomes payable on the compensation
amount. According to him, interest at the rate
of 5% per annum would arise only when
possession of the land has been taken prior to
payment or deposit of the compensation
amount.
11.29. Learned AGA contends that the liability to pay
interest under Section 24 is therefore
conditional and not automatic. The statutory
trigger for payment of interest is the actual
taking over of possession by the acquiring
authority. In the absence of proof regarding the
date of possession, no liability to pay interest
can be fastened upon the respondents.
11.30. Elaborating the said submission, learned AGA
argues that the expression “from the time of so
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taking possession” occurring in Section 24
assumes significance and clearly indicates
legislative intent that interest would commence
only upon dispossession of the owner and
assumption of possession by the State or the
Board.
11.31. It is his submission that in the present case,
there is no document evidencing the exact date
on which possession was taken over by the
respondents. According to him, no mahazar,
possession certificate, panchanama or other
contemporaneous record has been produced by
the petitioner establishing formal delivery of
possession to the State authorities.
11.32. Learned AGA further submits that the petitioner
himself had objected to the acquisition
proceedings and resisted dispossession at
various stages. In that background, according
to him, the petitioner cannot now seek to
presume that possession stood automatically
transferred merely upon issuance of
notifications under Sections 11 and 17 of the
KSA Act.
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11.33. It is therefore contended that unless and until
the petitioner establishes the precise date on
which possession was actually taken by the
respondents, the claim for statutory interest
under Section 24 of the KSA Act cannot be
sustained.
11.34. Learned AGA submits that the burden lies upon
the petitioner to establish dispossession so as
to attract Section 24 and that in the absence of
such proof, the respondents cannot be directed
to pay interest merely because compensation
came to be disbursed at a later point of time.
11.35. He therefore reiterates that the compensation
amount determined under Section 20 having
already been paid to the petitioner, the
statutory obligation of the respondents stands
fully discharged and no further liability survives
under the provisions of the KSA Act.
11.36. It is in the aforesaid background that this Court
directed the Deputy Commissioner, Hassan
District, to file an affidavit clarifying the factual
aspects relating to acquisition, possession and
payment of compensation. Pursuant thereto, an
affidavit came to be filed on 25.02.2026.
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11.37. In the said affidavit, the Deputy Commissioner,
Hassan District, states that upon verification of
the available records, it was found that the
preliminary notification dated 12.09.1979 had
been published in the Official Gazette on
05.10.1979 and that the final notification under
the KSA Act came to be issued on 29.05.1992.
11.38. The Deputy Commissioner has further referred
to the award passed on 14.01.2008
determining compensation in favour of the
petitioner and the subsequent payment made
in the year 2012. It is stated therein that the
date of passing of the award, namely
14.01.2008, is required to be treated as the
date of taking possession of the land for the
purposes of Section 24 of the KSA Act.
11.39. Proceeding on the said premise, the Deputy
Commissioner has stated that since the
compensation amount determined under the
award was paid in the year 2012, the payment
made cannot be said to be delayed so as to
attract any further liability towards interest
under Section 24 of the KSA Act.
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11.40. The affidavit therefore seeks to justify the
action of the respondents by contending that
possession ought not to be treated as having
been taken either on the date of issuance of the
notification under Section 17 of the KSA Act or
from the earlier period during which the slum
admittedly existed on the subject land, but only
from the date of passing of the award itself.
11.41. The Deputy Commissioner accordingly
reiterates that the respondents have complied
with the statutory requirements under the KSA
Act by determining compensation under the
award dated 14.01.2008 and disbursing the
same in the year 2012 and, therefore,
according to the deponent, no further amount
by way of interest is payable to the petitioner.
12. Heard Sri Shankarlingappa, learned counsel for the
petitioner, Sri Suresh Babu B.N., learned counsel for
respondent No.2 and perused papers.
13. The points that would arise for determination are:
(i) Whether, in the facts and
circumstances of the present case,
the land in question can be said to
have vested in and possession thereof
deemed to have been taken by the
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State Government pursuant to the
notification issued under Sections 11
and 17 of the Karnataka Slum Areas
(Improvement and Clearance) Act,
1973?
(ii) Whether the existence and continued
occupation of the subject land by
slum dwellers prior to issuance of the
notification under Section 17 of the
KSA Act would constitute divestment
of possession from the petitioner for
the purposes of Section 24 of the KSA
Act?
(iii) Whether, under Section 24 of the
Karnataka Slum Areas (Improvement
and Clearance) Act, 1973, the
petitioner is entitled to payment of
interest on the compensation amount
determined under Section 20 of the
Act?
(iv) If Point No.3 is answered in the
affirmative, from which date is such
interest liable to be calculated and
paid?
(v) What order?
14. This Court answers the above points as under:
15. Answer to Point No. (i): Whether, in the facts
and circumstances of the present case, the land
in question can be said to have vested in and
possession thereof deemed to have been taken
by the State Government pursuant to the
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notification issued under Sections 11 and 17 of
the Karnataka Slum Areas (Improvement and
Clearance) Act, 1973?
15.1. Sri. Shankarlingappa, learned counsel for the
petitioner, submitted that the Government
issued a preliminary notification dated
06/08.08.1979 under Section 3 of the KSA Act,
followed by a final notification dated
29.05.1992 under Sections 11 and 17 of the
KSA Act. He submitted that upon publication of
the notification under Section 17 of the KSA Act
in the Official Gazette on 29.05.1992, the
subject land stood acquired and vested in the
State Government.
15.2. Learned counsel drew the attention of this
Court to the plain language of Section 17 of the
KSA Act, which provides that the Government
may acquire the land "by publishing in the
Official Gazette, a notice to the effect that it
had been decided to acquire the land." He
submitted that this language makes clear that
the very act of publication constitutes both the
acquisition and the vesting, and no separate
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physical act of delivery of possession is
necessary to complete the vesting in the State.
15.3. Learned counsel further submitted that once
the land vested in the State Government by
operation of Section 17, the petitioner ceased
to have any legal title or proprietary rights over
the property from that date onwards. He
contended that the petitioner, being the lawful
owner of the property, cannot be expected to
retain possession of land that has already been
acquired and vested in the State by operation
of law, particularly when the State had already
exercised regulatory and statutory control over
the land through the Section 3 notification
issued in 1979.
15.4. He further submitted that possession had in
substance already been effectively taken by the
State long before the formal notification under
Section 17, inasmuch as slum dwellers had
been occupying the subject land since at least
the year 1979, with the full knowledge,
permission, and implicit approval of the State
authorities, who regulated the said occupation
through the Section 3 notification. The
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petitioner was therefore, in substance, divested
of possession well before 1992.
15.5. Sri. Suresh Babu B.N., learned counsel for
Respondent No. 2, while not disputing that
notifications under Sections 3, 11, and 17 of
the KSA Act had been issued and that
compensation had been paid, contended that
possession of the subject land was never
formally taken over from the petitioner. He
submitted that whenever steps were initiated
pursuant to the notifications, the petitioner had
objected to the taking over of possession. He
therefore argued that actual physical
possession continued with the petitioner.
15.6. He further submitted that mere issuance of a
notification under Section 17 of the KSA Act
would not automatically amount to taking over
of possession of the land. According to him, in
the absence of a mahazar, possession
certificate, or any other contemporaneous
document establishing formal delivery of
possession, it cannot be held that possession
was taken by the respondents.
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15.7. On a specific query put to him by this Court as
to when possession was actually taken, learned
counsel fairly and candidly conceded that there
is no material on record indicating the exact
date on which physical possession was taken by
the respondents.
15.8. Learned AGA submitted that notifications under
Sections 3, 11, and 17 of the KSA Act had been
validly issued and that the petitioner was fully
aware of the acquisition proceedings from their
very inception. He pointed out that the
petitioner had challenged the 1979 notification
by filing W.P.No.24109/1990 before this Hon'ble
Court, which came to be dismissed, with liberty
reserved to the petitioner to challenge the
notification dated 29.05.1992. He submitted
that the petitioner did not avail of that liberty,
thereby allowing the acquisition proceedings to
attain finality.
15.9. The learned AGA referred to the affidavit filed
by the Deputy Commissioner, Hassan District,
on 25.02.2026 pursuant to the direction of this
Court, wherein it was stated that the date of
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passing of the award, namely 14.01.2008, is
required to be treated as the date of taking
possession for the purposes of Section 24 of
the KSA Act. According to the learned AGA,
since the compensation amount was paid in the
year 2012, i.e., within a short period after the
award of 2008, no further liability for interest
could arise.
15.10. He also submitted that the subject land was
occupied by a number of persons calling
themselves slum dwellers who could not be
evicted and who were seeking rehabilitation.
The petitioner was not in physical possession of
any portion of the subject land. The acquisition
was necessitated because of the inability to
evict the slum dwellers. He submitted that in
these circumstances, the question of formal
taking of possession does not arise in the
conventional manner, and the claim for interest
must therefore fail.
15.11. The core question under Point No. 1 is whether,
upon publication of the notification under
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Sections 11 and 17 of the KSA Act on
29.05.1992, the subject land can be said to
have vested in the State Government and
possession thereof deemed to have been taken.
15.12. For a proper determination of this question, it is
necessary to carefully read and analyse the text
of Section 17 of the KSA Act. Section 17 reads
as follows:
"Section 17 - Power to acquire land
Where the Government is satisfied that, for
the purpose of executing any work of
improvements relation to any slum area or
any building in such area or for the purpose
of re-developing any slum clearance area, or
for the purpose of rehabilitating slum
dwellers, it is necessary to acquire any land
within, adjoining or surrounded, by any such
area, it may acquire the land by publishing in
the Official Gazette, a notice to the effect
that it had been decided to acquire the land
in pursuance of this section:
Provided that before publishing such notice,
the Government shall call upon the owner or
any other person who, in the opinion of the
Government, may be interested in such land,
to show cause why it should not be acquired;
and after considering the cause, if any,
shown by the owner or any other person
interested in the land, the Government may
pass such orders as it deems fit."
15.13. A plain and careful reading of Section 17 shows
that the Government "may acquire the land by
publishing in the Official Gazette, a notice to
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the effect that it had been decided to acquire
the land." The language of Section 17 is clear,
unambiguous, and self-operative. The
acquisition is brought about by the very act of
publication of the notice in the Official Gazette.
The section does not prescribe any further step,
such as delivery of physical possession or
passing of an award, as a precondition to the
completion of the acquisition and vesting.
15.14. This reading is consistent with the overall
scheme of the KSA Act. Section 20 speaks of
the "amount payable in respect of any land
acquired under this Act," which makes clear
that determination of compensation follows
acquisition and is not a precondition to it.
Similarly, Section 24 uses the expression
"taking possession of the land," clearly
indicating that possession is a step that may
follow acquisition, it presupposes that the
acquisition and vesting have already occurred.
The award, therefore, is not the event that
creates either the vesting or the possession; it
is the event that determines the compensation
for an acquisition that has already been
completed.
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15.15. Section 11 of the KSA Act empowers the State
Government to declare a notified slum area as
a "slum clearance area", a designated zone
identified for clearance and redevelopment.
Such a declaration under Section 11 is a
prerequisite that sets the stage for the exercise
of the acquisition power under Section 17,
which enables the Government to acquire land
within, adjoining, or surrounding the declared
slum clearance area. In the present case, the
notifications under Sections 11 and 17 were
issued as part of the same proceeding on
29.05.1992. The combined effect of these two
notifications, duly published in the Official
Gazette, is that the subject land was first
declared part of a slum clearance area (under
Section 11) and simultaneously acquired (under
Section 17). The vesting of the land in the
State Government followed as an immediate
legal consequence of the Section 17
publication.
15.16. The contention advanced by the learned AGA,
based on the affidavit of the Deputy
Commissioner, Hassan District, that the date of
the award (14.01.2008) ought to be treated as
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the date of taking possession, is, legally
untenable and is rejected. An award is the
formal determination of the quantum of
compensation. It has no nexus whatsoever with
the physical or legal act of taking possession.
Acceptance of this argument would lead to an
absurd and unjust result: the State could delay
the determination of compensation for decades
after the acquisition and thereby indefinitely
postpone its liability to pay interest under
Section 24. Such an interpretation would
render Section 24 otiose and entirely ineffective
as a protection for dispossessed landowners.
Courts must avoid interpretations that lead to
absurd results or that defeat the evident
purpose of a statutory provision.
15.17. The contention of Sri. Suresh Babu B.N.,
learned counsel is that possession was never
formally taken, and that no mahazar or
possession certificate is available, does not
merit acceptance. In cases of statutory
acquisition, the vesting of title and the deemed
taking of possession both operate by force of
the statute itself, and not by any subsequent
physical act of the acquiring authority. The fact
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that no mahazar or possession certificate exists
does not mean that possession was not taken.
It only means that the records of the
Government are deficient. It would be wholly
inequitable to allow the State to benefit from its
own failure to maintain proper records. As this
Court has consistently held in the context of
acquisition proceedings, the absence of a
formal possession document does not negative
the statutory vesting that has already occurred
by operation of law. Once the State itself
admits (as both the learned AGA and Sri.
Suresh Babu B.N. have admitted) that slum
dwellers were in occupation of the land and the
petitioner was not in physical possession, it
cannot simultaneously contend that the State
itself had not taken possession.
15.18. One further contention of the learned AGA. He
submitted that the petitioner had filed
W.P.No.24109/1990 challenging the Section 3
notification of 1979, which came to be
dismissed with liberty reserved to challenge the
Section 17 notification. The petitioner did not
exercise that liberty. According to the learned
AGA, the acquisition proceedings therefore
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attained finality. This Court accepts that the
acquisition itself has attained finality and is not
under challenge in the present writ petition.
The petitioner does not seek to question or
reopen the acquisition. The petitioner accepts
the acquisition as valid and only seeks the
statutory entitlement to interest that flows from
that very acquisition under Section 24 of the
KSA Act. The finality of the acquisition, far from
being a bar to the claim, is a precondition to it,
it is only because the acquisition is final and the
land is definitively vested in the State from
29.05.1992 that the interest liability under
Section 24 is clearly and conclusively
established. The earlier writ petition, which
dealt with the validity of the acquisition
notification, has no bearing on the present writ
petition, which deals with the statutory
consequence of a payment obligation arising
from an acquisition whose validity is not in
dispute.
15.19. For all the foregoing reasons, this Court
answers Point No. (i) by holding that upon
publication of the notification under Sections 11
and 17 of the KSA Act in the Official Gazette on
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29.05.1992, the subject land vested in the
State Government and possession thereof was
deemed to have been taken by the State from
that date. The date of the award (14.01.2008)
is not, and cannot be treated as, the date of
taking possession.
16. Answer to Point No. (ii): Whether the
existence and continued occupation of the
subject land by slum dwellers prior to issuance
of the notification under Section 17 of the KSA
Act would constitute divestment of possession
from the petitioner for the purposes of Section
24 of the KSA Act?
16.1. Sri. Shankarlingappa, learned counsel for the
petitioner, submitted that the subject land had
been under the occupation of slum dwellers
since at least the year 1979, when the
Government issued the preliminary notification
under Section 3 of the KSA Act. He submitted
that Section 3 empowers the Government to
declare an area as a "slum area" only upon its
satisfaction that the area is already
characterised by conditions of being low-lying,
insanitary, squalid, overcrowded or otherwise
hazardous to public health and safety, or that
the buildings therein are already unfit for
human habitation. He contended that Section 3
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does not contemplate a merely proposed or
anticipated future use, its exercise necessarily
presupposes the existence of an already
developed slum area occupied by persons living
in unhealthy and overcrowded conditions.
16.2. Learned counsel relies on Section 3 of the KSA
Act and submits that:
"Section 3 - Declaration of slum areas:
(1) Where the Government is satisfied that-
(a) any area is or is likely to be a source of
danger to health, safety or, convenience of
the public of that area or of its
neighbourhood, by reason of the area being
low-lying insanitary, squalid, overcrowded
or otherwise; or (b) the buildings in any
area, used or intended to be used for human
habitation are- (i) in any respect, unfit for
human habitation; or (ii) by reason of
dilapidation, overcrowding, faulty
arrangement of streets, lack of ventilation,
light or sanitation facilities, or any
combination of these factors, detrimental to
safety, health or morals, it may, by
notification, declare such area to be a slum
area."
16.3. By issuing the notification under Section 3 in
1979, learned counsel contended, the State
Government itself acknowledged that the
subject land was already under occupation by
slum dwellers. Once the State formally
recognised the existence of the slum, the
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petitioner was effectively deprived of the
beneficial enjoyment and control of the
property. He submitted that the petitioner could
neither develop, alienate, nor exercise ordinary
incidents of ownership over the land, owing to
the statutory restrictions under the KSA Act and
the actual existence of slum occupants on the
ground.
16.4. He further submitted that this continued
deprivation of the petitioner's rights over the
land without payment of compensation for
nearly two decades before the formal
acquisition in 1992, and without payment of
interest for a further two decades thereafter,
amounts to a violation of Article 300A of the
Constitution of India, which guarantees that no
person shall be deprived of his property except
by authority of law. The State cannot, on the
one hand, prevent the owner from enjoying the
land and, on the other hand, refuse to
compensate him for that deprivation.
16.5. Sri. Suresh Babu B.N. did not specifically
address Point No. 2 in isolation. He continued to
maintain his overall position that formal
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physical possession was never taken by the
respondents. He did not dispute the existence
of the slum on the subject land or the issuance
of the Section 3 notification in 1979. He
contended that the absence of a mahazar or
possession certificate is fatal to the petitioner's
claim for interest.
16.6. The learned AGA submitted that the subject
land was occupied by slum dwellers who could
not be evicted and who were seeking
rehabilitation on the same land. He candidly
admitted that the petitioner was not in physical
possession of any part of the subject land even
before the Section 17 notification. He submitted
that it was precisely because of the inability to
evict the slum dwellers that the acquisition was
necessitated. He contended that the
compensation having been paid on 09.05.2012,
the liability of the State stands discharged.
16.7. The question under Point No. (ii) is whether the
factual occupation of the land by slum dwellers,
recognised and regulated by the State through
the Section 3 notification of 1979, amounts to a
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divestment of possession from the petitioner for
the purposes of Section 24 of the KSA Act.
16.8. Section 3 of the KSA Act has been extracted in
the submissions of Sri. Shankarlingappa above.
The text of Section 3, as reproduced therein,
makes clear that the power thereunder is
triggered only upon the Government's
satisfaction that the area is already
characterised by conditions of being low-lying,
insanitary, squalid, or overcrowded, or that the
buildings therein are already unfit for human
habitation. Section 3 does not contemplate a
future or anticipated occupation; it presupposes
a factual situation already existing on the
ground. A Section 3 notification is therefore a
formal and official acknowledgement by the
State that the area is already under occupation
by persons living in slum conditions. When the
State issued the Section 3 notification in 1979
in respect of the subject land, it necessarily
acknowledged that the land was already
occupied by slum dwellers living in insanitary
conditions.
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16.9. The admission of the learned AGA himself that
the petitioner was not in physical possession of
any portion of the subject land, and that the
slum dwellers were occupying the same and
could not be evicted, is highly significant. This
admission establishes beyond any doubt that
the petitioner had, as a matter of fact, lost
actual physical possession of the subject
property long before the formal acquisition in
1992. The State was fully aware of this factual
position.
16.10. However, this Court must carefully examine
whether this factual deprivation of possession
constitutes "taking of possession" by the State
for the specific purposes of Section 24 of the
KSA Act. Section 24 provides for interest "from
the time of so taking possession," where "so
taking possession" refers to the taking of
possession by the "prescribed authority" as part
of the acquisition proceedings under the KSA
Act.
16.11. Slum dwellers are not agents of the State.
Their occupation of the land, even if tolerated,
regulated, or indirectly enabled by the State
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through the Section 3 notification, cannot be
equated with the State itself formally taking
possession of the property pursuant to the
acquisition proceedings. The expression "taking
possession" in Section 24 refers to the official
assumption of possession by the acquiring
authority in its capacity as such, as part of the
acquisition process. It does not refer to the
mere factual situation where third parties
happen to be in occupation of the land.
16.12. Therefore, while the existence of slum
occupation since 1979 establishes very clearly
that the petitioner was substantially and
effectively deprived of the beneficial enjoyment
and use of the property well before the formal
acquisition in 1992, this deprivation does not,
by itself and independently, constitute "taking
of possession" by the State for the purposes of
triggering the liability under Section 24 of the
KSA Act.
16.13. The formal legal event that triggers the liability
under Section 24 is the vesting of the land in
the State Government under Section 17 of the
KSA Act, which, as held under Point No. (i),
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occurred on 29.05.1992. It is on that date that
the State must be deemed to have taken
possession for the purposes of Section 24. The
pre-1992 occupation by slum dwellers is
relevant as background context and as
evidence that the petitioner had already
suffered significant deprivation, but the precise
date for commencing the statutory interest
under Section 24 remains the date of formal
vesting.
16.14. What the factual occupation of the land by slum
dwellers since 1979 does establish is the
justness and equity of the petitioner's claim.
The State cannot declare a property as a slum
area in 1979, effectively prevent the owner
from using or developing it for over a decade,
formally acquire it in 1992, determine
compensation sixteen years later in 2008, and
then pay the compensation four years after that
in 2012, a total of over thirty years from the
initial declaration, without paying any interest
whatsoever. Such conduct is arbitrary and is
inconsistent with the guarantee under Article
300A of the Constitution of India. Section 24
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was enacted by the Legislature specifically to
address and prevent such situations.
16.15. The argument of Sri. Shankarlingappa based on
Article 300A of the Constitution of India
deserves to be expressly addressed and
resolved. Article 300A provides that no person
shall be deprived of his property save by
authority of law. The Supreme Court has
consistently held that "authority of law" for the
purposes of Article 300A requires not merely
the existence of a law authorising acquisition,
but full compliance with the procedure and
obligations prescribed by that law, including the
obligation to pay compensation and, where
prescribed, interest thereon. Where the law
authorising acquisition also mandates payment
of interest for delayed disbursement of
compensation (as Section 24 of the KSA Act
expressly does), the failure to pay such interest
constitutes non-compliance with the full
"authority of law," thereby engaging Article
300A. In the present case, the State declared
the land a slum area in 1979, prevented the
owner from freely using or developing it
through statutory restrictions, formally acquired
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it in 1992, determined compensation only in
2008, and paid it only in 2012, a span of over
two decades, without paying any interest. This
prolonged deprivation of the petitioner's
property rights, without full compliance with
the statutory obligation to pay interest under
Section 24, is inconsistent with the guarantee
under Article 300A. The present order, which
directs payment of interest under Section 24
itself, fully and effectively addresses this
constitutional concern.
16.16. This Court answers point No. (ii) by holding
that the existence and continued occupation of
the subject land by slum dwellers prior to the
Section 17 notification does not, standing
alone, constitute "taking of possession" by the
State for the purposes of Section 24 of the KSA
Act. However, it firmly establishes that the
petitioner was substantially and effectively
deprived of the beneficial enjoyment of the
property from 1979 onwards. The formal legal
event that constitutes "taking of possession"
under Section 24 is the vesting of the land
pursuant to the notification under Section 17 of
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the KSA Act on 29.05.1992, and interest under
Section 24 runs from that date.
17. Answer to point No. (iii): Whether, under
Section 24 of the Karnataka Slum Areas
(Improvement and Clearance) Act, 1973, the
petitioner is entitled to payment of interest on
the compensation amount determined under
Section 20 of the Act?
17.1. Sri. Shankarlingappa submitted that Section 24
of the KSA Act expressly provides for payment
of interest at the rate of 5% per annum from
the time of taking possession until the
compensation is actually paid or deposited. He
submitted that the land having vested in and
possession having been deemed taken by the
State Government on 29.05.1992 (as per
Section 17), and the compensation having been
paid only on 09.05.2012, the petitioner became
entitled to interest under Section 24 from the
date of vesting to the date of actual payment.
17.2. Learned counsel contended that Section 24 is a
mandatory provision and imposes a non-
negotiable statutory obligation on the
prescribed authority to pay interest whenever
the compensation is not paid or deposited
before taking possession. He submitted that the
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award dated 14.01.2008, which failed to award
any interest under Section 24, is defective and
that the said failure cannot extinguish the
statutory right of the petitioner.
17.3. He further submitted that withholding
compensation for nearly twenty years after
vesting, from 1992 to 2012, without payment
of any interest amounts to unjust enrichment
by the State at the expense of the petitioner.
He contended that Article 300A of the
Constitution of India mandates that a person
deprived of his property by the State must
receive just and fair compensation, which
necessarily includes the monetary value of the
use of the property for the period during which
the compensation was withheld.
17.4. Sri. Suresh Babu B.N. submitted that the
petitioner is not entitled to interest because
formal possession was never taken by the
respondents. He argued that Section 24 is a
conditional provision and not an automatic one,
it is triggered only upon actual physical taking
of possession. Since the petitioner had objected
to the taking of possession at various stages,
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and since there is no mahazar or possession
certificate on record, the condition precedent
for Section 24 has never been satisfied. He
further submitted that the payment of
compensation under the award fully satisfies
the statutory obligation and no additional
liability by way of interest can be imposed.
17.5. Relying on Section 20 of the KSA Act, the
learned AGA submitted that the Act provides a
self-contained, complete, and exclusive code
for determination of compensation. Section 20
of the KSA Act reads as follows:
"Section 20 - Amount payable:
(1) The amount payable in respect of any
land acquired under this Act shall be [three
hundred] times the property tax payable in
respect of such land on the date of
publication of the notice referred to in
section 17, under the municipal law
applicable to such area and where no such
property tax is payable in respect of such
land, the property tax payable in respect of
similar land adjacent thereto.
(2) The prescribed authority shall, after
holding an enquiry in the prescribed manner,
determine by order the amount payable
under sub-section (1) and publish the said
order in the Official Gazette. A copy of the
said order shall be communicated to the
owner of the land and every person
interested therein.
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(3) Where the owner of the land and the
owner of the building on such land are
different, the prescribed authority shall
apportion the amount between the owner of
the land and the owner of the building (in
the same proportion as the value of the land
bears to the value of the building on the date
of the acquisition)."
17.6. He submitted that Section 20 of the KSA Act
consciously adopts a fixed statutory formula,
300 times the property tax, for computation of
compensation, and does not expressly provide
for interest, solatium, or any other additional
amount. He argued that the KSA Act is a
special enactment distinct from the Land
Acquisition Act, 1894, and that the Court
cannot import provisions relating to interest or
solatium from the Land Acquisition Act into the
KSA Act.
17.7. He further submitted that the Deputy
Commissioner, Hassan District, conducted the
enquiry under Section 20(2) of the KSA Act and
passed the award on 14.01.2008. The
petitioner accepted the compensation of
Rs.32,71,500/- and did not challenge either the
methodology or the quantum. He therefore
submitted that the petitioner is estopped from
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now seeking interest over and above the
amount already paid.
17.8. The learned AGA also placed reliance on
Section 24 of the KSA Act itself and submitted
that interest thereunder is payable only when
the compensation is not paid or deposited "on
or before taking possession." He submitted that
since the date of possession is disputed and no
document evidences the date of possession, the
trigger for Section 24 of the KSA Act has not
been established. In the alternative, referring
to the affidavit of the Deputy Commissioner, he
submitted that even if Section 24 of the KSA
Act applies, the relevant date of possession
should be taken as 14.01.2008 (date of award),
and since compensation was paid in 2012, no
meaningful delay justifying interest can be
shown.
17.9. The learned AGA also placed reliance on
Section 26A of the KSA Act, which reads as
under:
"Section 26A - The Board to have power to
acquire land by agreement:
(1) Notwithstanding anything contained in
Sections 17 and 20, the Board may, with the
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previous approval of the Government, enter
into an agreement with any person for the
acquisition from him, by purchase, lease or
exchange of any land within, adjoining or
surrounded by any slum area or slum
clearance area, or any interest in such land
which is needed for the purpose of executing
any work of improvement in relation to any
slum area or any building in such area or for
the purpose of redeveloping any slum
clearance area, or for the purpose of
rehabilitating slum dwellers.
(2) Where any land is acquired under sub-
section (1), the Board may undertake the
measures referred to in sub-section (1) of
Section 27 in accordance with such plans as
may be approved by the Government and
subject to such directions as may from time
to time, be given by the Government."
17.10. Relying on Section 26A of the KSA Act, the
learned AGA submitted that the Government's
order dated 04.09.2000 directing the Board to
explore acquisition by mutual agreement under
Section 26A of the KSA Act demonstrates the
bona fide intention of the State to settle the
matter amicably. He submitted that this shows
the State was engaged in resolving the dispute
throughout and did not deliberately withhold
compensation. According to him, this should be
taken into account in assessing whether any
delay was intentional.
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17.11. He further submitted that Section 26A of the
KSA Act begins with a non-obstante clause
overriding Sections 17 and 20 of the KSA Act,
and thereby provides an independent statutory
mechanism enabling the Board to acquire land
through negotiation. According to him, the
Government was entitled, under the KSA Act,
to explore both compulsory acquisition and
consensual settlement, and the failure to reach
an agreement under Section 26A does not
convert the consensual process into a
compulsory one for the purposes of Section 24
of the KSA Act.
17.12. Section 24 of the KSA Act is the central
provision to be examined under this Point. It is
reproduced once again for ease of ready
reference:
"Section 24 - Payment of interest:
When the amount is not paid or deposited on
or before taking possession of the land, the
prescribed authority shall pay the amount
with interest thereon at the rate of five per
cent per annum from the time of so taking
possession until it shall have been so paid or
deposited and such interest shall be paid or
deposited by the prescribed authority in the
same manner as provided for the amount."
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17.13. A plain and careful reading of Section 24 of the
KSA Act discloses the following features:
17.13.1. The Section expressly provides for
payment of interest at the rate of 5%
per annum. This rate is fixed by the
statute itself and admits of no variation.
17.13.2. The liability to pay interest arises "when
the amount is not paid or deposited on
or before taking possession." This is the
trigger or condition for the operation of
Section 24 of the KSA Act.
17.13.3. Interest runs "from the time of so taking
possession until it shall have been so
paid or deposited." The start date is the
date of taking possession; the end date
is the date of payment or deposit.
17.13.4. The payment of interest is by the
"prescribed authority." This is a duty cast
upon the prescribed authority and not a
discretionary power. The word "shall"
makes this obligation mandatory.
17.14. The first and most important point to be noted
is this: Section 24 of the KSA Act is itself a part
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of the KSA Act. The argument of the learned
AGA that the KSA Act does not provide for
interest and that interest cannot be "imported"
from the Land Acquisition Act is therefore
wholly misconceived. This Court is not
importing any provision from any other
enactment. This Court is applying Section 24 of
the KSA Act itself, which is a provision of the
very same statute, and which expressly and
unambiguously provides for interest. The
contention that the KSA Act does not provide
for interest flies in the face of the text of
Section 24.
17.15. The contention of the learned AGA that Section
20 is a "self-contained code" governing
compensation is also without merit in the
context of this case. Section 20 of the KSA Act
is a code governing the method of computation
of the compensation amount, it fixes the
formula as 300 times the property tax. It does
not and cannot govern the question of interest
on delayed payment, which is separately dealt
with by Section 24 of the KSA Act. Section 20
and Section 24 of the KSA Act are not in
conflict; they operate in separate domains.
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Section 20 answers the question "How much
compensation is payable?" Section 24 answers
the different question "What happens if the
compensation is not paid before possession is
taken?" They complement each other; they do
not override each other.
17.16. The conditions under Section 24 of the KSA Act
are:
17.16.1. The prescribed authority must have
taken possession of the land.
17.16.2. The compensation amount must not
have been paid or deposited on or before
taking possession.
17.17. Both these conditions are undeniably and
clearly fulfilled in the present case:
17.17.1. As held under Point No. 1, the land
vested in and possession was deemed
taken by the State Government on
29.05.1992 upon publication of the
notification under Section 17 of the KSA
Act.
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17.17.2. It is admitted by all parties, indeed it is
not even disputed, that compensation
was paid only on 09.05.2012, which is
nearly twenty years after possession was
deemed taken on 29.05.1992.
Compensation was clearly not paid on or
before the taking of possession. Section
24 is therefore squarely attracted.
17.18. The argument of Sri. Suresh Babu B.N. that
formal possession was never taken and that no
mahazar or possession certificate exists has
already been rejected under Point No. (i). This
Court has held that vesting under Section 17
constitutes taking of possession in law,
independent of any formal physical act. The
absence of a mahazar does not extinguish the
statutory right to interest. The State cannot
benefit from its own failure to maintain proper
records of possession.
17.19. The argument that the petitioner objected to
the taking of possession is, with respect,
irrelevant to the question of entitlement to
interest under Section 24. The liability under
Section 24 is not contingent on the owner's
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consent or acquiescence in the taking of
possession. The acquisition under Section 17
operates by force of the statute. The owner's
objection to the taking of possession does not
prevent the acquisition from taking effect in
law. If the owner has a legal objection to the
acquisition itself, his remedy is to challenge the
acquisition notification before a court. He
cannot resist the legal consequences of a
validly published notification under Section 17
by merely objecting to the taking of physical
possession.
17.20. The contention that the petitioner "accepted"
the compensation and is therefore estopped
from claiming interest is equally without merit
and is rejected. Firstly, estoppel requires, at
minimum, a clear and unequivocal
representation by the party to be estopped,
reliance upon that representation by the other
party to its detriment, and circumstances that
make it inequitable to allow departure from that
representation. The mere receipt of the
principal compensation by the petitioner does
not constitute any representation, express or
implied, to the State that the petitioner was
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relinquishing his statutory right to interest
under Section 24. The petitioner never made
any such representation. Quite the contrary,
within less than a year of receiving the
compensation in May 2012, the petitioner
issued a legal notice dated 30.04.2013
specifically demanding payment of statutory
interest, thereby making his position
abundantly clear. Secondly, and more
fundamentally, the right to interest under
Section 24 is a statutory right, it is conferred
directly by the Legislature through the KSA Act
and is not a matter of agreement, consent, or
contract between the parties. A statutory right
cannot be extinguished or waived by the mere
acceptance of a part of what is due under the
same statute. The principle that acceptance of
part does not extinguish the right to the
remainder is well-recognised. The award
passed on 14.01.2008 did not address the
question of interest under Section 24 at all. The
payment of the principal compensation was
therefore the only thing discharged by that
payment; it did not and could not discharge a
liability that the award itself had left
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unaddressed. The estoppel argument
accordingly fails.
17.21. This Court now turns to the reliance of the
learned AGA on Section 26A of the KSA Act and
the order of the Government dated 04.09.2000
directing the Board to explore acquisition by
agreement. Section 26A begins with a non-
obstante clause: "Notwithstanding anything
contained in Sections 17 and 20." This means
Section 26A provides an alternative route of
acquisition (by agreement) that overrides the
compulsory acquisition provisions only if and
when an agreement is actually concluded under
that section. In the present case, it is admitted
by the learned AGA himself that no agreement
was arrived at under Section 26A. The
acquisition was therefore completed under
Section 17 and compensation was determined
under Section 20, not under Section 26A.
Section 26A, which never came into operation
in this case, has no bearing on the rights and
obligations created under Sections 17, 20, and
24 of the KSA Act.
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17.22. The Government's direction to explore an
amicable settlement under Section 26A of the
KSA Act does not detract from the right of the
petitioner to interest under Section 24 of the
KSA Act. The existence of a parallel avenue for
settlement does not extinguish a statutory
right. The fact that the State made bona fide
efforts to settle the matter amicably may be a
factor relevant to costs, but it has no bearing
on the substantive statutory right to interest
under Section 24 of the KSA Act.
17.23. In conclusion, this Court answers point No. (iii)
by holding that the petitioner is clearly entitled
to payment of interest at 5% per annum on the
compensation amount of Rs.32,71,500/- under
Section 24 of the KSA Act. The compensation
was not paid on or before the taking of
possession. The statutory conditions of Section
24 of the KSA Act are fulfilled. The objections
raised by the respondents are without merit
and are rejected.
18. Answer to point no. (iv): If Point No.(iii) is
answered in the affirmative, from which date is
such interest liable to be calculated and paid?
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18.1. Sri. Shankarlingappa, learned counsel
submitted that the petitioner has prayed for
interest from 21.05.1992, being the date on
which the notification under Section 17 of the
KSA Act was published in the Official Gazette,
resulting in vesting of the land in the State
Government and deemed taking of possession.
He submitted that Section 24 mandates interest
"from the time of so taking possession" and
therefore interest must be computed from
21.05.1992. He further submitted that the
interest must run until the date of actual
payment, i.e., 09.05.2012, since Section 24
expressly states that interest is payable "until it
shall have been so paid or deposited."
18.2. Sri. Suresh Babu B.N., learned counsel
reiterated his overall position that no interest is
payable and did not specifically address the
question of the start date of interest in the
event that this Court were to hold interest to be
payable.
18.3. The learned AGA relied upon the affidavit of the
Deputy Commissioner, Hassan District, and
reiterated that the date of the award
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(14.01.2008) should be treated as the date of
taking possession. On that basis, he submitted
that since compensation was paid in 2012,
which is only about four years after the award
date, no substantial delay justifying interest
liability has occurred. He contended that even if
interest is to be awarded, the period of
calculation should commence no earlier than
14.01.2008.
18.4. Section 24 of the KSA Act expressly and
unambiguously provides that interest runs
"from the time of so taking possession until it
shall have been so paid or deposited." The start
date is, therefore, the date of taking
possession, and the end date is the date of
actual payment or deposit of the compensation
amount.
18.5. As held under Point No.(i), the date of taking
possession is the date of vesting under Section
17 of the KSA Act, which is the date of
publication of the acquisition notification. The
petitioner has prayed for interest from
21.05.1992. The body of the petition refers to a
notification dated 29.05.1992 under Sections
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11 and 17 of the KSA Act. There is a
discrepancy of eight days between the prayer
date (21.05.1992) and the notification date as
mentioned in the body of the petition
(29.05.1992). The affidavit of the Deputy
Commissioner refers only to "the final
notification under the KSA Act coming to be
issued on 29.05.1992" without specifying the
date of publication in the Gazette. Under
Section 17, what vests the land is the
"publishing in the Official Gazette, a notice to
the effect that it had been decided to acquire
the land." The operative event is the publication
in the Gazette, not the administrative act of
"issuing" the notification. It is therefore
possible that the notification was issued
(signed/dispatched) on 29.05.1992 but
published (gazetted) on an earlier date,
including possibly 21.05.1992 as stated in the
prayer.
18.6. The respondents have not filed any counter to
dispute the prayer date of 21.05.1992. They
have not contended that the date of publication
in the Gazette was later than 21.05.1992. In
the absence of any contradiction of the prayer
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date by the respondents on the basis of the
actual gazette publication date, this Court
accepts the date stated in the prayer, namely
21.05.1992, as the relevant date. This Court
also notes that granting interest from
21.05.1992 (eight days earlier than
29.05.1992) does not cause any prejudice to
the respondents that they have not already
accepted by failing to dispute the prayer date.
Accordingly, interest shall be computed from
21.05.1992.
18.7. The contention of the learned AGA that the
date of the award (14.01.2008) should be
treated as the starting date for interest is
rejected for all the reasons already given under
Point No. (i). This Court emphasises once more
that such an interpretation would allow the
State to unilaterally determine when its
obligation to pay interest commences, simply
by delaying the passing of the award. This is
precisely the mischief that Section 24 was
enacted to prevent.
18.8. This Court has held, under Point No. (iv), that
statutory interest under Section 24 of the KSA
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Act is payable on the compensation amount of
Rs.32,71,500/- from 21.05.1992 (deemed date
of taking possession) to 09.05.2012 (date of
actual payment of compensation). The principal
compensation was discharged on 09.05.2012.
However, the interest amount that had accrued
under Section 24 up to 09.05.2012, being
approximately Rs.32,68,000/- (and to be
precisely computed by Respondent No. 3 as
directed), was never paid on that date, nor at
any time thereafter. The respondents have not
paid this amount despite the legal notice dated
30.04.2013 and the filing and pendency of the
present writ petition. The interest amount
under Section 24 of the KSA Act has therefore
itself remained outstanding since 09.05.2012.
18.9. The question that arises is whether this Court
should, in the exercise of its writ jurisdiction
under Article 226 of the Constitution of India,
direct further interest on the outstanding
Section 24 interest amount from 09.05.2012 till
actual payment. This Court answers that
question in the affirmative, for the following
reasons:
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18.9.1. The interest amount under Section 24 is
not a penalty or a discretionary award, it
is a statutory debt due and payable to
the petitioner. A debt due under a
statute carries with it, in equity and in
law, an obligation to pay further interest
for the period during which that debt
remains unpaid. Once the principal
compensation was paid on 09.05.2012,
the interest amount crystallised and
became immediately due and payable as
a liquidated sum. The respondents'
continued failure to pay this liquidated
sum thereafter amounts to wrongful
withholding of a sum of money to which
the petitioner has been legally entitled
since 09.05.2012.
18.9.2. This Court is a Court of equity as well as
law. Article 226 of the Constitution of
India confers wide and expansive powers
on this Court to issue directions, orders,
or writs as it deems necessary to do
complete and effectual justice. It is
settled law that a High Court exercising
its writ jurisdiction is not confined to
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granting only the minimum relief strictly
available under the letter of the statute,
but may fashion appropriate relief to
ensure complete justice between the
parties. Where a statutory debt has
remained wrongfully withheld for an
extended period despite a formal legal
demand, this Court is competent to
direct payment of further interest on that
debt so as to prevent the debtor from
benefiting from its own wrongful default.
18.9.3. The rate of further interest is fixed at 5%
per annum simple interest, the same
rate prescribed by Section 24 of the KSA
Act. This rate reflects the legislative
judgment on the appropriate rate of
compensation for delayed payment in
the context of this very statute and
these very proceedings. There is no
reason to depart from this rate. The
period for which further interest runs is
from 09.05.2012 (the date on which the
interest debt crystallised and became
due) until the date of actual payment of
the interest amount by Respondent No.
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3. Respondent No. 3 shall apply this
further interest at 5% per annum simple
interest on the interest amount
computed under Section 24 (i.e., on the
amount computed under para 16.6
above, as precisely determined by
Respondent No. 3 in accordance with the
formula directed), from 09.05.2012 till
the date of actual disbursement.
19. Answer to point No. (v): What order?
19.1. In view of the findings recorded under Points (i)
to (iv) above, the petitioner has made out a
clear and complete case for the exercise of writ
jurisdiction under Articles 226 and 227 of the
Constitution of India.
19.2. The right to receive interest under Section 24
of the KSA Act is a statutory right created by
the Legislature in favour of landowners whose
land is acquired without simultaneous payment
of compensation. The failure of the respondents
to pay interest under Section 24 despite the
plain statutory mandate constitutes a failure to
perform a statutory duty. A writ of mandamus
lies to compel the performance of a statutory
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duty that has been wrongfully withheld. The
petitioner has duly demanded interest through
a legal notice dated 30.04.2013, which has
remained unanswered. The failure to respond
to this demand further makes out a case for
issuance of a writ of mandamus. Hence, this
court passes the following
ORDER
(i) Writ Petition No.55526 of 2013 is
hereby Allowed.
(ii) A Writ of Mandamus is hereby issued
to Respondent No. 3, the Deputy
Commissioner, Hassan District,
directing as follows:
(iii) Respondent No.3 shall compute and
disburse to the petitioner, Nolamba
Veershaiva Sangha (R), the following
two amounts:
(a) COMPONENT I — Statutory
interest under Section 24 of the
Karnataka Slum Areas (Improvement
and Clearance) Act, 1973: Simple
interest at 5% per annum on the
compensation amount of
Rs.32,71,500/- (Rupees Thirty Two
Lakhs Seventy One Thousand Five
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Hundred only) for the period from
21.05.1992 to 09.05.2012, which
is approximately Rs.32,68,000/-
(Rupees Thirty Two Lakhs Sixty Eight
Thousand only).
(b) COMPONENT II — Further interest
on Component I: Simple interest at
5% per annum on the Component I
amount for the period from
09.05.2012 until the date of actual
disbursement to the petitioner. This
further interest is awarded in exercise
of the jurisdiction of this Court under
Article 226 of the Constitution of India
to ensure complete justice and to
prevent unjust enrichment of the
State at the expense of the petitioner.
(iv) Respondent No. 3 shall disburse both
Component I and Component II (as
computed under clause (iii) above) to
the petitioner within eight weeks from
the date of receipt of a certified copy
of this order. Component II shall be
computed up to the actual date of
disbursement.
(v) The disbursement shall be made
through the office of the Deputy
Commissioner, Hassan District, in the
same manner in which the principal
compensation amount of
Rs.32,71,500/- was disbursed on
09.05.2012.
(vi) If Respondent No. 3 fails to compute
and disburse the interest amount
within eight weeks as directed above,
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the petitioner shall be at liberty to
apply to this Court for further
directions.
Sd/-
(SURAJ GOVINDARAJ)
JUDGE
KTY
List No.: 1 Sl No.: 95