THE MANAGING DIRECTOR vs THE LAND ACQUISITION OFFICER

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IN THE HIGH COURT OF KARNATAKA


KALABURAGI BENCH

TH
DATED THIS THE 9 DAY OF OCTOBER, 2026

BEFORE

THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL

WRIT PETITION NO. 201828 OF 2025 (LA-RES)

BETWEEN:

1. THE MANAGING DIRECTOR
KARNATAKA NEERAVARI NIGAM LIMITED
(A GOVERNMENT OF KARNATAKA UNDERTAKING)
TH
4 FLOOR, COFFEE BOARD BUILDING
OPP. VISHWESWARAIAH PODIUM BLOCK
DR.AMBEDKAR VEEDHI
BANGALORE-560001

2.
THE EXECUTIVE ENGINEER
KARNATAKA NEERAVARI NIGAM LIMITED
NO.4, CANAL DIVISION (KALUVE VIBHAGA)
SIRVAR (AT POST AND TQ.)
DIST:RAICHUR-584129
…PETITIONERS










Digitally
signed by
NIJAMUDDIN
JAMKHANDI
Location:
HIGH COURT
OF
KARNATAKA

(BY SRI M.R.C. RAVI, SENIOR COUNSEL APPEARING FOR
SRI KRUPASAGAR PATIL, ADVOCATE)

AND:

1. THE LAND ACQUISITION OFFICER/
ASSISTANT COMMISSIONER
RAICHUR SUB-DIVISION
RAICHUR-584101

2. MAHANTESH N. S/O GIRIJA SHANKAR
AGED ABOUT 43 YEARS,
OCC: AGRICULTURE,

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R/AT NO.232, C AND B
NIJALINGAPPA COLONY
RAICHUR-584101
…RESPONDENTS
(BY SRI NARENDRA M. REDDY, HCGP FOR R1,
SRI MAHANTESH PATIL, ADV. FOR R2)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO, I)
ISSUE A WRIT ORDER OR DIRECTION IN THE NATURE OF
CERTIORARI, QUASHING THE IMPUGNED ORDER DATED
05.10.2021 IN CASE PASSED BY THE
¸ÀA.PÀA/¨sÀƸÁé/n©¦/03/2005-06
ST
1 RESPONDENT, AT ANNEXURE-D TO THE WRIT PETITION;
II) PASS SUCH OTHER ORDER IN THE INTEREST OF JUSTICE
AND EQUITY.
THIS PETITION HAVING BEEN HEARD AND RESERVED ON
29.09.2026, COMING ON FOR PRONOUNCEMENT OF ORDERS
THIS DAY, THE COURT MADE THE FOLLOWING:-
CORAM: HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL

CAV ORDER

This writ petition is filed challenging order dated
05.10.2021 passed by respondent No.1.

2. Sri M.R.C. Ravi, learned Senior Counsel
appearing for the petitioner submits that the respondent
No.2’s land was acquired for construction of Distributor
No.92. It is submitted that, an award came to be passed.
Thereafter, respondent No.2 sought a reference and the

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Reference Court enhanced the compensation to Rs.150/-
per sq.ft. along with statutory benefits. It is further
submitted that respondent No.2 gave representation to
respondent No.1 seeking to pass an additional award of
interest at the rate of 15% per annum on the amount
awarded from the date of taking possession till issuance of
preliminary notification. It is also submitted that the
respondent No.1 passed impugned order awarding 15%
interest from the date of taking possession till issuance of
preliminary notification. It is contended that the payment
of amount from taking possession till issuance of
preliminary notification is not the compensation amount
but damages. Hence, the land owner would not be
entitled to the benefit of additional market value at 12%,
9% interest and 30% solatium. Hence, the impugned
order calls for interference as the respondent No.1 has
awarded 15% interest on the market value, solatium and
additional market value, which is impermissible. It is
further contended that the beneficiary – petitioner and the

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respondent No.2 have settled the dispute partially in the
execution proceedings with regard to the market value
and it was agreed that the respondent – claimant would
receive compensation at Rs.127/- per sq. ft. as against
Rs.150/- awarded by the Reference Court. In support of
his contention, he placed reliance on the following
decisions:
1
(a) R.L. Jain (D) by LRs. Vs. DDA and Ors.

(b) Balwan Singh & Ors. vs. Land Acquisition
2
Collector & Anr.

(c) State of Punjab vs. Amarjeet Singh &
3
Anr.

(d) M. Buggappa, (D) through LRs. & Ors. vs.
Land Acquisition Officer – cum Mandal
4
Revenue Officer & Anr.

Hence, he seeks to allow the petition.

3. Sri Mahantesh Patil, learned counsel appearing
for respondent No.2 supports the order of the respondent

1
(2004) 4 SCC 79
2
(2016) 13 SCC 412
3
(2011) 4 SCC 734
4
Civil Appeal No.10665/2010 ;dt: 13.12.2010

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No.1 and submits that the respondent – land owner has
agreed for Rs.127/- per sq.ft. in execution proceedings as
against Rs.150/- per sq.ft. awarded by the Reference
Court and the said analogy cannot be applied in paying
damages to the land loser for a period commencing from
the date of taking possession prior to the issuance of
preliminary notification. It is submitted that the Reference
Court determined the market value at Rs.150/- per sq.ft.
and the same should be the basis to pay damages as well.
It is submitted that the market value includes statutory
interest, solatium and on that amount the claimant would
be entitled to interest at the rate of 15% which has been
rightly considered by the respondent No.1 and has
awarded damages. The same does not call for any
interference. In support of his contention, he placed
reliance on the following decisions:
(a) Tahera Khotoon & Ors. vs. Revenue
Divisional Officer/ Land Acquisition
5
Officer & Ors.

5
(2014) 13 SCC 613

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(b) Balwan Singh & Ors. vs. Land Acquisition
6
Collector & Anr.
(c) Sri Sannadoddappa S/o Kareppa Marali
7
vs. The State of Karnataka & Ors.
(d) Ramanagouda S/o Laxman Gouda Patil
8
vs. State of Karnataka & Ors.

Hence, he seeks to dismiss the petition.


4. I have heard the arguments of the learned
Senior Counsel appearing for the petitioner, learned HCGP
for respondent No.1 and learned counsel appearing for
respondent No.2 and meticulously perused the material
available on record. I have given my anxious
consideration to the submissions advanced.


5. The point that arises for consideration in this
petition is:
“Whether respondent No.2/land owner would
be entitled for damages along with the
statutory benefits and interest as per the
provisions of the Land Acquisition Act, 1984
for the period prior to the acquisition of the
land?”

6
(2016) 13 SCC 412
7
W.P.No.148717/2020 (LA-RES) & connected matters ; dt: 31.05.2023
8
W.P.No.101994/2023 (LA-RES) ;dt: 29.03.2023

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The above formulated question is answered partly
affirmative and partly negative for the following reasons:


6. The respondent No.2 was the owner of the land
bearing Sy.No.226 measuring 1 acre 3 guntas situated at
Shirwar village, Shirwar taluk, Raichur district. The
respondent No.2’s land was acquired by issuing
preliminary notification dated 05.05.2006 under Section
4(1) of the Land Acquisition Act, 1894 (hereinafter
referred to as ‘the L.A. Act’ for short) followed by the final
notification. The acquisition of the land was for the
purpose of construction of Distributor No.92 and the
acquisition was for the benefit of the petitioner herein.
The respondent No.1 passed an award on 30.11.2007
determining the market value of the land in question at
Rs.92,000/- per acre. Being aggrieved, the respondent
No.2 sought reference for higher compensation before the
Senior Civil Judge and JMFC Sindhanur, sitting at Manvi
(hereinafter referred to as the ‘ Reference Court’ for

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short). The Reference Court re-determined the
compensation at Rs.150/- per sq.ft. in LAC No.4/2015 vide
judgment and award dated 08.02.2019. It is to be noticed
that the respondent No.2 as well as the petitioner –
beneficiary of the acquisition have settled the dispute by
agreeing to the market value at Rs.127/- per sq.ft. as
against Rs.150/- per sq.ft. determined by the Reference
Court in the execution proceedings.


7. It is further to be noticed that the Reference
Court granted the benefit of interest and solatium from the
date of issuance of preliminary notification in the absence
of availability of date for taking possession of the land of
respondent No.2. The respondent No.2 filed an application
before respondent No.1 praying to pass an additional
award from the date of taking possession of the land till
the date of issuance of preliminary notification.

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8. The respondent No.2’s application seeking for
additional award came to be dismissed vide order dated
17.03.2021 and being aggrieved, respondent No.2 filed
W.P.No.200941/2021, with a prayer to quash the order
dated 17.03.2021 and further prayer for seeking a
direction to the respondent No.1 to award additional
interest by way of damages from the date of taking
possession till the date of preliminary notification. The
writ petition filed by the respondent No.2 came to be
allowed vide order dated 26.05.2021 whereby the
impugned order dated 17.03.2021 passed by respondent
No.1 was quashed and the matter was remitted back to
respondent No.1 to re-consider the claim of respondent
No.2 on merits.


9. The respondent No.1, after remand, allowed the
application filed by respondent No.2 under impugned order
dated 05.10.2021 by granting 15% interest on the
damages from the date of taking possession till the date of
preliminary notification. It is to be noticed that the

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respondent No.1 considered Rs.150/- as market value,
30% solatium, 12% additional market value and on such
amount, 15% interest was awarded. To appreciate the
correctness of the award of damages by respondent No.1
it would be useful to refer to the enunciation of law laid
down by the Hon’ble Supreme Court and this Court in the
following decisions.


10. The Hon’ble Supreme Court in the case of R.L.
Jain referred supra has laid down in paragraphs 13 to 15
and 17 and 18 as under:
“13. In Union of India v. Budh Singh [(1995) 6 SCC
233] after analysis of the provisions of the Act the
Bench arrived at the following conclusions: (SCC p. 236,
para 5)
“The parameter for initiation of the proceedings is the
publication of the notification under Section 4(1) of the
Act in the State Gazette or in an appropriate case in
District Gazette as per the local amendments. But the
condition precedent is publication of the notification
under Section 4(1) in the appropriate gazette. That
would give legitimacy to the State to take possession of
the land in accordance with the provisions of the Act.
Any possession otherwise would not be considered to be
possession taken under the Act.

14. In Shree Vijay Cotton & Oil Mills [(1991) 1 SCC
262] the precise question raised here, namely, whether
in a case where the possession is taken prior to the
issuance of notification under Section 4(1) of the Act,
interest can be awarded in accordance with Section 28

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or 34 of the Act was not examined and the only issue
examined was whether in an appeal which has been
preferred by the State Government challenging the
quantum of compensation awarded by the District Judge
it is open to the High Court to award interest to the
claimant even though he had not preferred any appeal
or cross-objection for the said purpose. It is well settled
that a decision is an authority for what it actually
decides. What is of the essence in a decision is its ratio
and not every observation found therein nor what
logically follows from the various observations made
therein. (See Krishena Kumar v. Union of India [(1990)
4 SCC 207 : 1991 SCC (L&S) 112 : (1990) 14 ATC 846 :
AIR 1990 SC 1782] , Municipal Corpn. of Delhi v.
Gurnam Kaur [(1989) 1 SCC 101 : AIR 1989 SC 38] and
Orient Paper and Industries Ltd. v. State of Orissa [1991
Supp (1) SCC 81 : AIR 1991 SC 672] .) Shree Vijay
Cotton & Oil Mills [(1991) 1 SCC 262] is therefore not an
authority for the proposition that where possession is
taken before issuance of notification under Section 4(1),
interest on the compensation amount could be awarded
in accordance with Section 34 of the Act with effect from
the date of taking of possession.

15. Similar view has been taken in a recent decision
by a Bench of two Judges in Lila Ghosh v. State of W.B.
[(2004) 9 SCC 337 : JT (2003) 9 SC 23] and the
reasons given there in para 16 of the Report are being
reproduced below: (SCC pp. 343-44, para 19)
“19. Even though the authority in Shree Vijay
Cotton & Oil Mills Ltd. [(1991) 1 SCC 262]
appears to support the claimants, it is to be seen
that apart from mentioning Sections 28 and 34,
no reasons have been given to justify the award
of interest from a date prior to commencement of
acquisition proceedings. A plain reading of Section
34 shows that interest is payable only if the
compensation, which is payable, is not paid or
deposited before taking possession. The question
of payment or deposit of compensation will not
arise if there is no acquisition proceeding. In case
where possession is taken prior to acquisition
proceedings a party may have a right to claim
compensation or interest. But such a claim would

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not be either under Section 34 or Section 28. In
our view interest under these sections can only
start running from the date the compensation is
payable. Normally this would be from the date of
the award. Of course, there may be cases under
Section 17 where by invoking urgency clause
possession has been taken before the acquisition
proceedings are initiated. In such cases,
compensation, under the Land Acquisition Act,
would be payable by virtue of the provisions of
Section 17. As in cases under Section 17
compensation is payable, interest may run from
the date possession was taken.”

17. Shri Dave, learned counsel for the appellant has
also placed strong reliance on Satinder Singh v. Umrao
Singh [AIR 1961 SC 908] wherein the question of
payment of interest in the matter of award of
compensation was considered by this Court. In this case
the initial notification was issued under Section 4(1) of
the Land Acquisition Act, 1894 but the proceedings for
acquisition were completed under East Punjab Act 48 of
1948. The High Court negatived the claim for interest on
the ground that the 1948 Act made no provision for
award of interest. After quoting with approval the
following observations of the Privy Council in Inglewood
Pulp and Paper Co. Ltd. v. New Brunswick Electric Power
Commission [AIR 1928 PC 287]
“upon the expropriation of land under statutory power,
whether for the purpose of private gain or of good to the
public at large, the owner is entitled to interest upon the
principal sum awarded from the date when possession
was taken, unless the statute clearly shows a contrary
intention”
the Bench held as under:
“… when a claim for payment of interest is made by a
person whose immovable property has been acquired
compulsorily he is not making claim for damages
properly or technically so-called; he is basing his claim
on the general rule that if he is deprived of his land he
should be put in possession of compensation
immediately; if not, in lieu of possession taken by
compulsory acquisition interest should be paid to him on
the said amount of compensation”.

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17.1. The normal rule, therefore, is that if on account
of acquisition of land a person is deprived of possession
of his property he should be paid compensation
immediately and if the same is not paid to him forthwith
he would be entitled to interest thereon from the date of
dispossession till the date of payment thereof. But here
the land has been acquired only after the preliminary
notification was issued on 9-9-1992 as earlier
acquisition proceedings were declared to be null and
void in the suit instituted by the landowner himself and
consequently, he was not entitled to compensation or
interest thereon for the anterior period.

18. In a case where the landowner is dispossessed
prior to the issuance of preliminary notification under
Section 4(1) of the Act the Government merely takes
possession of the land but the title thereof continues to
vest with the landowner. It is fully open for the
landowner to recover the possession of his land by
taking appropriate legal proceedings. He is therefore
only entitled to get rent or damages for use and
occupation for the period the Government retains
possession of the property. Where possession is taken
prior to the issuance of the preliminary notification, in
our opinion, it will be just and equitable that the
Collector may also determine the rent or damages for
use of the property to which the landowner is entitled
while determining the compensation amount payable to
the landowner for the acquisition of the property. The
provisions of Section 48 of the Act lend support to such
a course of action. For delayed payment of such amount
appropriate interest at prevailing bank rate may be
awarded.”
( emphasis supplied)


11. The Hon’ble Supreme Court in the case of
Balwan Singh referred supra has laid down in paragraph
Nos.1 to 4 as under:

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“KURIAN JOSEPH, J.— The short issue arising for
consideration in this appeal is whether the appellants
are entitled to interest for the period from the date of
dispossession to the date of notification under Section
4(1) of the Land Acquisition Act, 1894 (for short “the
Act”). That issue is no more res integra. In R.L. Jain v.
DDA [R.L. Jain v. DDA, (2004) 4 SCC 79] SCC at para
18, this Court has taken the view that the landowner is
not entitled to interest under the Act. However, it has
been clarified that the landowner will be entitled to get
rent or damages for use and occupation for the period
the Government retained possession of the property.
2. Noticing the above position, this Court in Madishetti
Bala Ramul v. Land Acquisition Officer [Madishetti Bala
Ramul v. Land Acquisition Officer, (2007) 9 SCC 650]
took the view that it may not be proper to remand the
matter to the Collector to determine the amount of
compensation to which the appellants therein would be
entitled for the period during which they remained out of
possession and hence, in the interest of justice, this
Court directed that additional interest @ 15% p.a. on
the amount awarded by the Land Acquisition Collector,
shall be paid for the period between the date of
dispossession and the date of notification under Section
4(1) of the Act.
3. The said view was followed by this Court in Tahera
Khotoon v. Land Acquisition Officer [Tahera Khotoon v.
Land Acquisition Officer, (2014) 13 SCC 613 : (2014) 5
SCC (Civ) 735] .
4. Following the above view taken by this Court, these
appeals are disposed of directing the respondents to
award additional interest by way of damages @ 15%
p.a. for the period between 1-7-1984, the date when the
appellants were dispossessed till 2-9-1993, the date of
Notification under Section 4(1) of the Act. Needless to
say that this compensation will be on the basis of land
value fixed by the Reference Court. The amount as
above, shall be calculated and deposited before the
Reference Court within a period of three months from
today.”
(emphasis supplied)

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12. The Hon’ble Supreme Court in the case of
Amarjeet Singh referred supra has held in paragraph
No.12 as under:
“ 12. Thus a person whose land is acquired is entitled to
the following amounts under the Act:
(a) Compensation determined under Section 23(1) of
the Act (comprising the market value of the land
referred to as the first factor and any
damages/expenses referred to as the second to sixth
factors under the said sub-section).
(b) Solatium at 30% on the market value determined
as the first factor under Section 23(1) of the Act.
(c) Additional amount at 12% per annum of the
market value of the land referred to as the first factor
under Section 23(1) of the Act, for the period specified
in Section 23(2).
(d) Interest on the aggregate of (a), (b) and (c) above
for the period between the date of taking possession to
the date of payment/deposit at the rate of 9% per
annum for the first year and 15% per annum for the
remaining period.
Payments made are to be adjusted and accounted in the
manner set out in Gurpreet Singh v. Union of India
[(2006) 8 SCC 457] .”


13. The Hon’ble Supreme Court in the case of
Tahera Khotoon referred supra in paragraph Nos.9 to 14
has held as under:
“9. Now what remains to be considered and decided by
us is whether the appellants are entitled for rent or
damages from the date they were dispossessed till the
date of preliminary notification.
10. In support of the assertion, Shri Shetty, learned
Senior Counsel for the appellants has brought to our
notice the observations rendered by this Court in R.L.
Jain v. DDA [(2004) 4 SCC 79] and also in Madishetti

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Bala Ramul v. Land Acquisition Officer [(2007) 9 SCC
650] .
11. In the first case, this Court after considering the
submission that is canvassed by the landloser(s)
thought it fit to remand the matter to the LAO to
determine the rent or damages for use of the property
by the landowner(s) are entitled while determining the
compensation amount payable to the landowner(s) for
acquisition of the property.
12. In the latter decision, this Court instead of
remanding the matter to the LAO, thought it fit to award
15% interest to the landloser(s) from the date they
were dispossessed till the date of preliminary
notification.
13. Keeping in view the peculiar facts and
circumstances of the case, we are of the opinion that the
exercise that has been done by this Court in Madishetti
Bala Ramul [(2007) 9 SCC 650] requires to be adopted.
14. In the instant case, it is not in dispute nor can it
be disputed by either side that the property in dispute
was in possession of the Warangal Municipal Committee.
In fact the said Municipal Committee had developed the
aforesaid land into a park. Since there was a dispute
among the owners of the land with the Municipal
Committee, the Municipal Committee had sought the
assistance of the State Government to acquire the
property and to hand over the same to the Municipal
Committee for its use and development.”



14. The Hon’ble Supreme Court in the case of
M.Buggappa (D) through LRs and Others v. Land
Acquisition Officer cum Mandal Revenue Officer and
9
Another at paragraph Nos.7 to 10 has held as under:
“ 7. This Court in R.L.Jain (supra) observed that the land
owner is entitled to compensation for wrongful use and

9
Civil Appeal No.10665/2010

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occupation from the date of actual possession to date of
preliminary notification. We extract below the relevant
portion of the said judgment: “In a case where the
landowner is dispossessed prior to the issuance of
preliminary notification under Section 4(1) of the Act the
Government merely takes possession of the land but the
title thereof continues to vest with the landowner. It is
fully open for the landowner to recover the possession of
his land by taking appropriate legal proceedings. He is
therefore only entitled to get rent or damages for use
and occupation for the period the Government retains
possession of the property. Where possession is taken
prior to the issuance of the preliminary notification, in
our opinion, it will be just and equitable that the
Collector may also determine the rent or damages for
use of the property to which the landowner is entitled
while determining the compensation amount payable to
the landowner for the acquisition of the property. The
provisions of Section 48 of the Act lend support to such
a course of action. For delayed payment of such amount
appropriate interest at prevailing bank rate may be
awarded.” In a subsequent decision in Madishetti Bala
Ramul (D) By Lrs. Vs. The Land Acquisition Officer,
(2007) 9 SCC 650, this Court was of the view that
instead of remanding the matter to the Collector for
determining the amount of compensation to the
landowners for the period prior to the date of
preliminary notification, interest of justice would be met
if a direction is made for payment of some interest on
the amount awarded, by way of damages for the period
of illegal use, that is, between the date of dispossession
to date of preliminary notification.
8. We are of the view that having regard to the fact that
the possession of the land was taken as long back in
1977, that is 33 years ago, it would not be just and
proper to remand the matter to the Collector at this
stage for determination of compensation for wrongful
use at this stage. Award of 6% per annum on the

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compensation amount, as damages for use and
occupation from the date of dispossession (17.11.1977)
to date of preliminary notification (3.7.1990) in addition
to what has been awarded by the High Court would
serve the interest of justice.
9. Learned counsel for the appellant submitted that in
Madishetti Bala Ramul (supra) this Court had awarded
damages at the rate of 15% per annum (on the market
value determined) and, therefore, we should award
damages at that rate. We find that award of damages at
15% on the compensation on the peculiar facts and
circumstances of the case, and not on account of any
principle evolved. Further, the market value as on
17.11.1977 when possession was taken would have
been much less than the market value as on 3.7.1990.
Therefore, if damages is awarded at 6% per annum on
the market value determined as on 3.7.1990, the actual
rate of damages with reference to the market value as
on 17.11.1977 will be much more. In the circumstances,
we are of the view that the damages for dispossession
without initiating acquisition proceedings, when
expressed in terms of a percentage of the compensation
determined with reference to the market value more a
decade later should not be more than 6% per annum.
Where of course the preliminary notification is issued
within one or two years from the date of taking
possession, the court may award damages even at 8%
to 10% of the market value determined depending upon
the facts and circumstances.
10. We accordingly allow the appeal in part, and award
in addition to what has been awarded by the High Court,
damages at 6% per annum from 17.11.1977 to
3.7.1990, on the market value determined as on
3.7.1990. The amount so due as damages shall carry
interest at 6% per annum from the date of award
(21.3.1991) to date of payment. The amount awarded

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as damages shall not carry any additional amount or
solatium.”


15. The Hon’ble Supreme Court in the case of
Madishetti Bala Ramul (Dead) By Lr’s Vs Land
10
Acquisition Officer at paragraph Nos.19 and 20 has
held as under:
“ 19. In Land Acquisition Officer-cum-DSWO v. B.V.
Reddy and Sons [(2002) 3 SCC 463] this Court opined
that Section 25 being not a procedural provision will
have no retrospective effect, holding: (SCC p. 471, para
6)
“6. Coming to the second question, it is a well-settled
principle of construction that a substantive provision
cannot be retrospective in nature unless the provision
itself indicates the same. The amended provision of
Section 25 nowhere indicates that the same would have
any retrospective effect. Consequently, therefore, it
would apply to all acquisitions made subsequent to 24-
9-1984, the date on which Act 68 of 1984 came into
force. The Land Acquisition (Amendment) Bill of 1982
was introduced in Parliament on 30-4-1982 and came
into operation with effect from 24-9-1984.”
20. In the peculiar facts and circumstances of the
case, although the proper course for us would have to
remand the matter back to the Collector to determine
the amount of compensation to which the appellants
would be entitled for being remained out of possession
since 1979, we are of the opinion that the interest of
justice would be met if this appeal is disposed of with a
direction that additional interest @ 15% per annum on
the amount awarded in terms of award dated 2-1-1999
for the period 16-3-1979 till 22-12-1991, should be
granted, which, in our opinion, would meet the ends of
justice.”

10
(2007) 9 SCC 650

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16. This court in the case of Sri Sannadoddappa
11
Vs State of Karnataka and Others in Paragraph no.19
has held as under:
“19. The second respondent has been disputing the
quantum determined by his predecessor. As rightly
pointed out by the learned counsel appearing for the
petitioners, the rent and damages are determined as
per the guidelines laid down by the Hon'ble Supreme
Court and this Court. The Division Bench of this Court
in Subbarao 's case in W.A.Nos.50311-50312/2013
placing reliance on judgment rendered by the Apex
Court in the case of Madishetti Bala Ramul (supra)
held that the market value determined by the
Reference Court would be the guiding factor while
determining the damages. Therefore, the second
respondent has rightly taken the market value as
determined by the Reference Court and thereafter
added 30% solatium and 12% market value from date
of notification till date of award. Therefore, the total
value determined by the second respondent is
Rs.14,21,122/-. On this amount, damages is
calculated at the rate of 15% p.a. from the date of
taking possession till issuance of 4(1) notification i.e.
31.3.1985 to 19.08.2010. Further, interest at the rate
of 6% p.a. is awarded from the date of preliminary
notification till the date of deposit by the fourth
respondent-beneficiary. This calculation is not at all
refuted by the respondent-State nor cogent material is
placed to demonstrate that the damages determined
by second respondent is exorbitant and contrary to the
guidelines issued by the Apex Court in the case of
Madishetti Bala Ramul(supra).”

11
W.P. No.148717/2020 (LA-RES); Dt: 31.05.2023

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17. The law enunciated by the Hon’ble Supreme
Court makes it clear that where possession of the land is
taken prior to the issuance of the preliminary notification
under Section 4(1) of the L.A. Act, such possession cannot
be treated as possession taken under the Act and,
therefore, the landowner would not be entitled to statutory
interest under Sections 28 or 34 of the Act for the anterior
period. The Hon’ble Supreme Court in the cases of
R.L.Jain, Balwan Singh and Tahera Khotoon referred
supra held that the land owner would be entitled for
damages for use of his land by the authorities prior to the
issuance of preliminary notification. The award of damages
or rent paid to the land loser is not as per the provisions of
the Act. Hence, the respondent-land loser cannot seek to
award market value of the land as determined under
Section 23(1) of the Act, solatium at 30% on the market
value, additional market value at 12% per annum of the
market value and interest at 9% per annum for first year

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and 15% per annum for the remaining period. It is very
clear from the enunciation of law laid down by the Hon’ble
Supreme Court in the aforesaid decisions that the land
loser would be entitled for damages or rent for the period
from taking possession of land till the issuance of
preliminary notification for acquisition of land. The Hon’ble
Supreme Court considering certain aspects in the case of
M.Buggappa (D) through LRs and Others and
Madishetti Bala Ramul (Dead) by LR’s referred supra
held that the interest on damages can be awarded.
Considering the case on hand, the possession of the land
from the respondent No.2 was taken by the authorities
without acquisition proceedings on 09.09.1987 and
preliminary notification was issued on 05.05.2006. Insofar
as the award of damages to respondent No.2 for the
period prior to the acquisition is concerned, I am of the
considered view that the market value determined by the
Reference Court at Rs.150/- per sq.ft should be the basis
for award of damages also. Hence, respondent No.2-land

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owner would be entitled for damages at Rs.150/- per sq.ft
and interest on the said damages @ 12% from the date of
taking possession till issuance of acquisition notification.
The duration of utilization of land by the respondent -
authority is nearly two decades without any acquisition
proceedings. Hence, it would be appropriate to direct the
petitioner to pay damages/rent at Rs.150/- per sq.ft., and
on the said amount interest @ 12% per annum. The award
of interest @ 12% is awarded on the damage amount by
considering the various factors such as the authorities
utilizing the land of respondent No.2 for nearly two
decades without acquisition proceedings, the respondent
No.2 has litigated twice before this Court on earlier
occasions and that he has also approached the authorities
by giving various representations.


18. The contention of learned Senior Counsel
appearing for the petitioner that the quantum of damages
should be Rs.127/- as agreed between the parties in the

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execution proceedings has no merit, as the petitioner and
respondent No.2 have agreed to reduce the market value
in the execution proceedings and the same analogy cannot
be applied, while awarding damages. The Reference Court,
upon adjudication, has come to the conclusion that the
market value of the acquired land is Rs.150/- per sq.ft.
and said market value should be the basis to award
damages.


19. Insofar as the decision relied by the learned

counsel for the respondent No.2 in the case of Sri
Sannadoddappa referred supra cannot be applied to the
facts and circumstances of the case on hand as the
decisions of the Hon’ble Supreme Court referred supra
clearly indicate that the land owner would be entitled to
the damages for utilization of land prior to issuance of
acquisition notification and not the statutory benefit or

interest as provided under the Act. Accordingly, I proceed
to pass the following:

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ORDER

i) The Writ Petition is allowed in part .

ii) The impugned order dated 05.10.2021 passed
by respondent No.1 at Annexure-D is
modified.

iii) The Petitioners are directed to pay the
damages to respondent No.2 at Rs.150/- per
sq.ft. for the period prior to the issuance of
acquisition notification. The Respondent No.2
is entitled to the interest at the rate of 12%
per annum on the quantum of damages from
09.09.1987 to 05.05.2006.

iv) The Registry is directed to transmit back the
amount deposited by the petitioner to the
respondent No.1 immediately.

v) If the amount transferred from this court is
insufficient, then the petitioner shall make
good the same by depositing the balance
amount before the respondent No.1 or if the
amount in deposit is in excess, the respondent
No.1 shall return the said amount to the
petitioner.

vi) The respondent No.1 is directed to release the
amount with interest as ordered supra in

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favour of the respondent No.2 immediately by
calculating the interest on the damages.


Sd/-
(VIJAYKUMAR A. PATIL)
JUDGE



SWK, ABK
List No.: 1 Sl No.: 1