Interest under Section 34 runs from actual possession, not automatically from the award.

The State of Haryana issued a notification dated 21.01.2009 under Section 4 of the Land Acquisition Act, 1894 (“1894 Act”) for acquiring 5 Kanal 13 Marla of land situated in Villages Khairpur and Kanganpur, District Sirsa.

The Collector passed an award under Section 11 on 18.01.2012, and the landowners sought enhancement under Section 18.

The Additional District Judge, Sirsa enhanced the compensation by award dated 09.12.2016.

In execution proceedings, the landowners claimed interest, and the Executing Court held them entitled to interest from the date of the award, relying on Section 23(1A) of the 1894 Act.

HSIIDC challenged the orders dated 06.02.2025 and 28.05.2025 under Article 227 of the Constitution, contending that possession was taken only on 16.01.2018 and that interest under Section 34 was payable only from the date of actual possession.

The landowners argued that possession had effectively been taken in May 2012, after disposal of related writ proceedings, and that HSIIDC had retained possession thereafter.

Whether the Executing Court was justified in awarding interest from the date of the award by relying on Section 23(1A) of the 1894 Act.

Whether interest under Section 34 of the 1894 Act is payable from the date of actual possession, and what was the legally established date of possession in the present case.

Whether the matter required remand for determination of the actual date on which possession was taken.

The Court held that Section 23(1A) of the 1894 Act provides additional compensation at the rate of 12% per annum and does not govern interest on delayed payment of compensation.

Interest is governed by Sections 28 and 34; under Section 34, interest becomes payable from the date possession is taken until payment or deposit, at 9% per annum initially and 15% per annum after one year on the unpaid amount.

Relying on Balwant Narayan Bhagde v. M.D. Bhagwat, (1976) 1 SCC 700, the Court reiterated that “possession” means actual possession on the spot, not merely symbolic or paper possession, and that taking actual possession results in vesting of the land in the Government.

The Court also relied on Sitaram Shivchandrai Garoda v. State of Maharashtra, 1995 Mh.L.J. 596, for the principle that the acquiring authority must take actual possession of the acquired land.

The Executing Court applied the wrong statutory provision by relying on Section 23(1A), which concerns additional compensation and has no bearing on the commencement of interest.

Since the applicable provision was Section 34, the entitlement to interest depended upon proof of the date on which actual possession was taken.

The impugned orders contained no finding determining that date; consequently, the conclusion that interest was payable from the date of the award could not be sustained.

The rival assertions—HSIIDC’s claim that possession was taken on 16.01.2018 and the landowners’ claim that possession was taken in May 2012—required factual adjudication, including evidence regarding actual possession on the spot.

The Court therefore held that the issue could not be finally determined in revision without a proper finding by the Executing Court.

The Executing Court was directed to permit the parties to lead evidence regarding the actual date of possession and to pass a fresh order within six months.

It was further directed to consider whether similarly situated landowners had been paid interest for the disputed period.

The Court did not finally determine the date from which interest was payable; it clarified that interest under Section 34 would run from the date of actual possession, which could be the date of the award only if possession was established to have been taken on that date.