Statutory interest on slum land compensation runs from the date of final notification and legal vesting.

The Petitioner, owner of land in Arasikere Town, faced acquisition proceedings under the Karnataka Slum Areas (Improvement and Clearance) Act, 1973 ("KSA Act").

A preliminary notification under Section 3 was issued in 1979.

a final acquisition notification under Section 17 was published on 29.05.1992.

Although the land vested in the State in 1992, an award was only passed on 14.01.2008.

the principal compensation of Rs. 32,71,500 was paid on 09.05.2012.

The Petitioner filed this Writ Petition seeking a mandamus for 5% statutory interest for the 20-year delay between vesting (1992) and payment (2012).

The State contended that since the Petitioner was not in physical possession (due to existing slum dwellers) and no formal 'possession certificate' was issued, interest was not exigible.

1. Whether the land is deemed to have vested in and possession taken by the State upon the publication of the Section 17 notification on 29.05.1992?

2. Whether the continued occupation by slum dwellers prior to the acquisition constitutes divestment of possession for the purpose of statutory interest?

3. Whether the Petitioner is entitled to 5% interest under Section 24 of the KSA Act for the period between the 1992 notification and the 2012 payment?

Section 3 of the KSA Act, which defines the declaration of slum areas based on existing factual insanitary conditions.

Section 17 was applied to establish that acquisition is completed and vesting occurs immediately upon publication of the notice in the Official Gazette.

Section 20 provides the fixed statutory formula for compensation (300 times property tax).

Section 24 mandates that if compensation is not paid "on or before taking possession," the authority shall pay interest at 5% per annum from the time of taking possession until payment.

Article 300A of the Constitution of India, necessitating the "authority of law" (including statutory interest) for deprivation of property.

The Court rejected the State's argument that the date of the award (2008) should be treated as the date of possession, noting that an award only determines quantum and has no nexus with the legal act of vesting.

Under Section 17, vesting is a self-operative legal consequence of the Gazette publication.

The Court held that even in the absence of a formal mahazar or possession certificate, the State had assumed regulatory dominion since 1979 via Section 3 and formal title via Section 17 in 1992.

The Court found Section 24 to be a mandatory statutory obligation that cannot be waived by the Petitioner's mere acceptance of the principal amount.

the Court invoked its equitable jurisdiction under Article 226 to grant "interest on interest" because the statutory interest itself became a liquidated debt that was wrongfully withheld from 2012 onwards.

The Court issued a Writ of Mandamus directing Respondent No. 3 to: (a) Pay 5% simple interest on the principal sum from 21.05.1992 to 09.05.2012 (Component I); and (b) Pay 5% simple interest on Component I from 09.05.2012 until actual disbursement (Component II).

Compliance is required within eight weeks of receipt of the order.