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PETITIONER: JOGINDER SINGH AND ORS.

       Vs.

RESPONDENT: STATE OF PUNJAB AND ANR.

DATE OF JUDGMENT29/08/1984

BENCH: PATHAK, R.S. BENCH: PATHAK, R.S. THAKKAR, M.P. (J)

CITATION:  1985 AIR  382            1985 SCR  (1) 682  1985 SCC  (1) 231        1984 SCALE  (2)685  CITATOR INFO :  RF         1991 SC2023  (6)

ACT:      Land Acquisition  Act, 1894-Ss.  28 and  34-Amended  by Haryana Act  No.8 of 1967 enhancing rate of interest payable on  compensation-Compensation   fixed  by  Land  Acquisition Officer enhanced  by Court-Enhanced  rate of  interest to be paid  on  amount  of  enhanced  compensation  from  date  of possession of  land and  not from date when compensation was enhanced by Court.

HEADNOTE:      The  appellants   were  awarded   certain   amount   of compensation by the Land Acquisition Officer which was later enhanced by  the District Judge and the High Court. On being pointed out  that ss.  28 and 34 of the Land Acquisition Act had been  amended by  the Haryana  Act No.  8 of  1967 which enhanced the  rate of  interest payable  on  the  amount  of compensation from  4 to 6 per cent per annum, the High Court awarded interest  at the rate of 4 per cent per annum on the amount of  compensation  awarded  by  the  Land  Acquisition Officer and  enhanced by  the District  Judge from  the date possession was  taken and 6 per cent per annum on the amount of  compensation  enhanced  by  it  from  the  date  of  its judgment. In  this appeal the appellants challenged the rate of interest as determined by the High Court.      Allowing the appeal, ^      HELD: The right to compensation arises when the land is acquired,  and   the  judgment  of  the  High  Court  merely represents  a  stage  in  the  process  of  quantifying  the compensation.   The    right   to   compensation   and   the quantification thereof  are two  distinct concepts. Although the  process  of  quantification  may  pass  though  several stages, the  process of  quantification  is  merely  one  of computing the  value of  the land, on the principles enacted in the  Land Acquisition  Act. All along, however, the right to the compensation so quantified refers back to the date of acquisition. The  additional amount  of compensation awarded by the  District Judge  or by  the High Court represents the difference between  the true  value of  the land  on the one hand and  the actual  amount awarded on the other which fell

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short of  the true  value. The owner of the land is entitled to be  paid the true value of the land on the date of taking over  of  possession.  The  fact  that  the  true  value  is determined later  does not mean that the right to the amount comes into existence at a later 683 date. And  if, as the High Court has held, interest at 6 per cent per  annum from  the date  possession was  taken in the case of  compensation determined  by  the  learned  District Judge, there  is no  reason why  the same rate should not be applied from  the date  possession was  taken in the case of the enhancement effected by the High Court. [684H;685 A-D]

JUDGMENT:      CIVIL APPEAL  JURISDICTION: Civil  Appeal No.  2293  of 1978      From the  Order dated 21.4.77 of the Punjab and Haryana High Court in Civil Misc. No. 508-C-1/77.      Ramlal for the Appellants.      The Order of the Court was delivered by      PATHAK, J.  This appeal  by special  leave is  directed against the  order dated April 21, 1977 of the High Court of Punjab and  Haryana determining  the interest payable on the compensation awarded  to the  appellants for the acquisition of their land by the State Government.      A notification  under Section 4 of the land Acquisition Act was made on August 31, 1961 in respect of land belonging to the  appellants and in the proceedings which followed the land Acquisition  officer determined  a sum of Rs. 27,992.84 as compensation payable therefor. Possession of the land was taken thereafter.  On reference  made at the instance of the appellants, the  learned District Judge held by his judgment dated November 30, 1963 that the appellants were entitled to a further sum of Rs. 11,307.10 as compensation. Dissatisfied with that  determination, the appellants proceeded in appeal to the  High Court, and on March 8, 1977 the High Court held that the appellants were entitled to a further amount of Rs. 17,919.30 as compensation. The High Court also held that the appellants were  entitled to  interest at  the rate of 4 per cent per  annum  on  the  enhanced  amount  of  compensation awarded by  it, the interest to run from the date possession of the  land was  taken. The  appellants then applied to the High Court  for a  review of  its order  in so far as it had determined the  rate of interest. The appellants pointed out that s.  28 and  s. 34 of the Land Acquisition Act, 1894 had been amended by the Haryana Act No. 8 of 1967 in consequence of which the rate of interest payable on the compensa- 684 tion was  awarded for  acquisition of land had been enhanced from 4  per cent  to 6  per cent  per annum  from  the  date possession was  taken to  the date of payment. The claim was resisted by  the State, which contended that the Haryana Act No. 8  of 1967  had been brought into force with effect from July 1,  1967  and  proceedings  for  the  determination  of compensation initiated  before the  enforcement of  that Act were liable  to be governed by the original rate of interest at 4  per cent per annum, and no advantage could be taken of the higher  rate enacted later. By its order dated April 21, 1977 the  High Court  ruled in  favour of the appellants and held that the higher rate of interest should be available to the appellants even though the proceedings for determination of compensation were already pending before the amending Act was brought  into force.  A curious  inconsistency, however,

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entered thereafter in the judgment of the High Court. On the amount determined  as compensation  by the  Land Acquisition Officer and  the learned  District Judge the High Court held that the higher rate of interest at 6 per cent per annum was attracted, and  interest at  that rate  ruled from  the date possession was  taken to  the date  of payment.  But on  the amount of  Rs. 17,919.30  representing the enhancement by it the High Court applied the rate of 4 per cent per annum from the date  possession was taken and 6 per cent per annum from the date  of its  judgment awarding  that amount.  The  High Court seems  to have proceeded on the view that the right to this amount  of Rs.  17,919.30 as  compensation arose to the appellants only from date of its judgment.      We are  of opinion that the High Court has erred. It is apparent from  the impugned  order of the High Court that it has found the appellants entitled to interest at the rate of 4 per  cent per  annum on  the sum of Rs. 17,919.30 from the date possession  was taken.  In so  far that  the High Court recognises the  appellants’ claim to interest from that date the High  Court is  right, because the right to compensation arises when  the land  is acquired,  and the judgment of the High Court  merely represents  a stage  in  the  process  of quantifying the  compensation. The right to compensation and the quantification  thereof are  two distinct  concepts. The right to  compensation arises  when the  land vests  in  the State while  its quantification may be concluded much later. Although the  process of  quantification  may  pass  through several stages,  from the  Land Acquisition  Officer to  the District Judge and thereafter to the High 685 Court, the  process  of  quantification  is  merely  one  of computing the  value of  the land, on the principles enacted in the  Land Acquisition  Act. All along, however, the right to the compensation so quantified refers back to the date of acquisition. The  additional amount  of compensation awarded by the  District Judge  or by  the High Court represents the difference between  the true  value of  the land  on the one hand and  the actual  amount awarded on the other which fell short of  the true  value. The owner of the land is entitled to be  paid the true value of the land on the date of taking over of  possession.  Since,  however,  the  true  value  is usually determined  only after  it  is  computed  through  a multi-tiered process  passing through  different levels of a hierarchical judicial structure by the very nature of things it take  sometime before  the  true  value  can  be  finally determined. The  fact that  it is  determined later does not mean that  the right to the amount comes into existence at a later date.  And if, as the High Court has held, interest at 6 per  cent per  annum rules  from the  date procession  was taken in  the case of compensation determined by the learned District Judge,  there is no reason why the same rate should not be  applied from  the date  possession was  taken in the case of the enhancement effected by the High Court.      We hold that the appellants are entitled to interest at 6 per  cent per annum on the amount of Rs. 17,919.30 for the entire period from the date possession of the land was taken to the date of payment.      The appeal  is allowed,  and the  order dated April 21, 1977 passed  by the  High Court is modified accordingly. The respondents will pay the costs of the appellants. H.S.K.    Appeal allowed 686