Court upholds 15% statutory interest on shortfall of compensation regardless of delay in recovery application.

The lands of the respondent-claimants in Village Bhavda, Ahmedabad, were acquired for the Narmada Canal project.

An award under Section 11 of the Land Acquisition Act was passed on 30.08.1993.

Upon the claimants' prayer for enhancement, the Reference Court increased the compensation on 30.11.1999.

While the State deposited certain amounts in 2003, the claimants filed recovery applications in 2011 alleging a shortfall in the principal amount and claiming interest on delayed payment.

The Special Judge (LAQ) found a shortfall of ₹20,505 and directed the State to pay this amount along with 15% interest for a delay of 220 months (from 22.05.2003 to 16.10.2021).

The State challenged this order, arguing it amounted to "interest upon interest".

1. Whether the Reference Court erred in directing the payment of 15% interest on the delayed payment of the remaining compensation amount for a period of 220 months under the Land Acquisition Act.

2. Whether the court has the power to award interest on equitable grounds or in a manner other than that prescribed by the statute.

Section 28 mandates interest on excess compensation at 9% p.a. for the first year and 15% p.a. thereafter from the date of possession.

Section 34 similarly dictates interest for non-payment or non-deposit of compensation on or before taking possession.

Union of India v. Budh Singh (1995) 6 SCC 233, which held that the statute covers the entire field of interest liability and courts cannot grant interest in excess of statutory rates.

State of Himachal Pradesh v. Dharam Das (1995) 5 SCC 683, which established that equitable considerations have no role in statutory compensation and interest determination.

The Court noted that the acquiring body was required to deposit ₹1,10,942 but only deposited ₹90,438 on 22.05.2003, resulting in a shortfall of ₹20,505.

The High Court found that the Special Judge had correctly identified the unpaid principal balance.

Since this "part thereof" of the compensation remained unpaid for over a year after possession, the statutory proviso of Section 28 (and Section 34) automatically triggered the 15% interest rate.

The Court reasoned that because the Land Acquisition Act is a self-contained code, the statutory mandate for 15% interest on delayed "excess or part thereof" must be strictly followed regardless of the delay in claimants filing the recovery application.

The High Court dismissed the writ petitions and all connected Special Civil Applications, affirming there was no error of law in applying the statutory interest rate to the delayed payment of the remaining compensation.