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PETITIONER: VIJAY COTTON AND OIL MILLS (P) LTD.

       Vs.

RESPONDENT: STATE OF GUJARAT

DATE OF JUDGMENT06/12/1990

BENCH: KULDIP SINGH (J) BENCH: KULDIP SINGH (J) KASLIWAL, N.M. (J)

CITATION:  1991 AIR  656            1990 SCR  Supl. (3) 447  1991 SCC  (1) 262        JT 1990 (4)   771  1990 SCALE  (2)1194

ACT:     Land Acquisition Act, 1894  Section 6(1), 23 & 26--Costs and interest can be awarded by higher courts if not  awarded by lower court.

HEADNOTE:     The  appellant  owned  land in Kutch  District  and  the Government  of  Gujarat took its possession  on  a  specific understanding that in exchange the Government would give  to it land of equal value but the Government resided and issued a  notification under section 6(1) of the  Land  Acquisition Act,  1894 straightaway declaring that the land in  question was  needed  for  public  purpose.  The  collector   awarded Rs.5,075/44  np  as  compensation. At the  instance  of  the appellant,  a reference to the Court was made under  Section 18 of the Act and the District Judge determined the  compen- sation at the rate of Rs.3 per sq. yard on the basis of  the market value of the land on the date of the notification and paid  solatium and interest from that date. The  State  pre- ferred  an  appeal against the award of the  District  Judge before  the  High  Court but the appellant  did  not  appeal against  that part of the award which went against  him  but filed  Cross-objections  which being time-barred  were  dis- missed. In the Cross-objections the appellant had inter alia claimed  interest from November 19, 1949 the date  when  the land  in question was taken over by the Government  and  not from February 1, 1955, the date when the notification  under the  Land Acquisition Act was issued. The High  Court  ruled that the compensation could only be determined on the  basis of the market value of the land on the date of the notifica- tion  issued  under 4( 1 ) of the Land Acquisition  Act  and since  such a notification had not been issued in the  case. it was not possible to determine the amount of  compensation payable to the appellant. The claimant appellant appealed to this  Court on the strength of a certificate and this  court held  that  the notification dated February 1,  1955  issued under  Section 6 of the Act could be treated as a  composite notification  both under Section 4(1) as also under  Section 6(1) of the Act and the district Judge could lawfully  award the market value of the land. So holding, the Court remanded the matter to the High Court for disposal on merit. The High

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Court on remand reduced the price of the acquired land  from Rs.3 per sq. yard to 1.35 sq, yard and rejected the claim of the claimant to interest from November 19, 1949 instead of 448 February 1, 1955. as the Cross-objections failed by it  were treated  to be time-barred. Hence this appeal  raising  both the contentions reprice of the land and the award of  inter- est., w.e.f. Feb. 1, 1955. Partly allowing the appeal this Court;     HELD: (1) On a reference under Section 18 of the Act the parties go to trial before the Court primarily on the  issue of  determination  of market value of the land.  So  far  as award of interest is concerned it is never an issue  between the parties. Once the conditions under Section 28 or Section 34 of the Act are satisfied the award of interest is  conse- quential and automatic. [454G-H]     (2)  The  payment of interest is not  dependent  on  any claim by the person whose land has been acquired. There  can be  no controversy or any lis between the parties  regarding payment  of interest. When once the provision of section  34 are attracted it is obligatory for the collector to pay  the interest. If he fails to do so the same can be claimed  from the Court in proceedings under section 18 of the Act or even from the appellate court/courts thereafter. [455B]     Reading  section  23 with section 26 of the Act,  it  is clear that the award, which is deemed to be a decree, is the sum total of conclusions reached by the courts in  determin- ing  compensation  under Section 23 on appreciation  of  the evidence  between the parties. The costs ’under  Section  27 and  the interest under Section 28 and 34 are added  to  the compensation  amount  to make it a consolidated  award.  The costs and interest under the Act if not awarded by the lower court  can  always be awarded by the higher  courts  in  any proceedings  under the Act and to any party entitled to  the same under the Act. [455D-E]

JUDGMENT: