Full Judgment Text
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 10665 OF 2010
[Arising out of SLP(C) No.2427/2009]
M. BUGGAPPA(D) THRO' LR & ORS. ......APPELLANTS
Versus
LAND ACQUISITION OFFICER-CUM-MANDAL
REVENUE OFFICER & ANR.
.....RESPONDENTS
O R D E R
Leave granted.
2. The appellants’ land was acquired in pursuance of
preliminary notification dated 3.7.1990 and final notification
dated 18.10.1990 for the public purpose of providing plots to
persons belonging to weaker sections. Possession of the
acquired land was however taken over on 17.11.1977. The Land
Acquisition Officer, by his award dated 21.3.1991, offered
compensation at Rs.110/- per sq. yard. The Reference Court, by
its judgment dated 30.12.1999, affirmed the said rate of
compensation. On appeal to the High Court, by the impugned
judgment dated 13.10.2008, compensation was increased to
Rs.160/- per sq. yard.
3. The Reference Court apart from awarding solatium, also
awarded additional amount on the market value at the rate of
12% per annum from 17.11.1977 to 3.7.1990. The Reference Court
awarded interest at 9% per annum from 17.11.1977 for a period
of one year and at the rate of 15% per annum from 17.11.1978.
The High Court while increasing the compensation as above, held
that the appellants were not entitled to additional amount
under Section 23(1A) of the Land Acquisition Act, 1894 ('the
Act', for short). The High Court also held that appellants
were not entitled to interest from 17.11.1977 but only from the
date of preliminary notification namely, 3.7.1990. The said
judgment is under challenge in this appeal by special leave.
4. Learned counsel for the appellant did not challenge the
correctness of the compensation determined at Rs.160/- per sq.
yard. His grievance was only in regard to the denial of
additional amount under Section 23(1A) of the Act and denial of
interest from the date of possession till the date of
preliminary notification.
Re: Additional Amount
5. Section 23(1A) of the Act provides that in addition to
the market value of the land, the Court shall award an amount
calculated at the rate of twelve per cent per annum on such
market value for the period commencing on and from the date of
the publication of the notification under Section 4(1) in
respect of such land, to the date of the award of the Collector
or the date of taking possession of the land, whichever is
earlier. Thus the date of commencement for payment of
additional amount is the date of notification under Section
4(1) of the Act. The date of possession is the last date upto
which additional amount can be awarded and not the commencement
date. As the award was made on 21.3.1991 and possession was
taken on 17.11.1977, no additional amount would be payable. The
Reference Court has awarded additional amount from the date of
taking possession to date of notification under Section 4(1) of
the Act. This is contrary to Section 23(1A) as it directs
payment of additional amount only from the date of notification
under Section 4(1) of the Act (which is 3.7.1990). There is no
question of paying any additional amount from ‘3.7.1990 to
17.11.1977’ which is absurd and impossible. Additional amount
cannot be granted under Section 23(1A) of the Act in regard to
any acquisition where possession was taken over prior to the
date of the notification under Section 4(1) of the Act.
Therefore, the Reference Court committed an error in awarding
additional amount under Section 23(1A) of the Act and the High
Court has rightly corrected the same.
Interest
6. Insofar as interest is concerned, this Court in R.L.
Jain(D) By Lrs. v. DDA & Ors.- (2004) 4 SCC 79 and Special Land
Acquisition Officer v. Karigowda - (2010) 5 SCC 164, made it
clear that interest cannot be awarded from a date prior to the
date of preliminary notification merely on the ground that
possession was taken prior to the date of preliminary
notification. Therefore award of interest under Section 28 of
the Act from a date prior to date of preliminary notification
is not sustainable and High Court was right in correcting the
date on which the liability to pay interest would arise to
3.7.1990.
Damages
7. This Court in R.L.Jain (supra) observed that the land
owner is entitled to compensation for wrongful use and
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 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 as damages
shall not carry any additional amount or solatium.
.....................J.
( R.V. RAVEENDRAN )
New Delhi; .....................J.
December 13, 2010. ( A.K. PATNAIK )