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PETITIONER: UNION OF INDIA

       Vs.

RESPONDENT: BUDH SINGH AND OTHERS

DATE OF JUDGMENT27/07/1995

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. PARIPOORNAN, K.S.(J)

CITATION:  1995 SCC  (6) 233        1995 SCALE  (4)816

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Leave granted.      This appeal  by special  leave arises from the order of the High  Court of Punjab & Haryana dated July 21, 1993 made in Civil Revision No. 3389/90. The facts are that possession of land measuring 81 kanals 3 merlas 10 acres and 1 kanals 3 marlas was  taken over  by the  Punjab Armed Police on March 15, 1963  for construction  of its  head quarters at Ajnala. Initially an amount of Rs.14,719.79 was paid to the owner as compensation on  March 9,  1965 as determined by the Revenue Authorities. Later,  he laid  the suit  in the  court of the Addl.  Judge,   Amritsar  for  recovery  of  its  possession pleading that since the land was not acquired under the Land Acquisition Act, 1894 [for short, ‘the Act], it was illegal. The suit  was  decreed  on  April  30,  1969.  In  execution thereof, the court passed an order directing the respondents to refund  the amount  of Rs.14,719.79  received on March 9, 1965. The  State carried  the matter  in  appeal  which  was dismissed. The  second appeal  also ended in dismissal. Then they initiated  the proceedings  for the  acquisition of the said land  and the  notification u/s  4 (1)  of the  Act was published on  November 16,  1984 and an award thereunder has been passed. We are not concerned in this case regarding the legality of  the award made by the reference court since, it had become final. But in execution of the decree, High Court passed an  order that  in the  event of  default in  payment within the  stipulated time,  payment of interest at 18% per annum from the date of taking possession be made. Since that amount has  not been  paid  with  interest,  the  court  has proceeded with  execution and the High Court in the impugned order has  affirmed the  same. Thus  this appeal  by special leave.      The only  question that  arises for decision is whether the respondents-owners of the lands are entitled to interest at 18%  per annum  from March  15, 1963,  the date  on which possession was  initially taken,  till  November  15,  1984,

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preceding the  date on  which the  notification under s.4(1) was published.  It is a jurisdictional issue and the finding in this  behalf touches and trenches into the jurisdictional power of  the court, acting under the Act regarding award of interest. The  payment of interest under the Act is squarely covered by  the provisions of the Act. The Government, while exercising its power of eminent domain, are entitled to have the notification  under  s.4  (1)  published  in  the  State Gazette. They  are also  entitled, in  case of  urgency,  to exercise the  power under  s.17(4) of  the Act  and  thereon declaration under  s.6 published  and would  issue notice to the owner  of the  land under  s.9. On  expiry  of  15  days thereof, the  Government is entitled to take possession from the owner. The award would be made under s.11 thereafter. In case urgency  clause under  s.17(4)  was  not  invoked,  the procedure of  inquiry under  s.5A shall  be gone through and thereafter declaration  under s.6  be made.  The declaration gives conclusiveness to the public purpose. After conducting an inquiry  in Chapter  III of the Act, the Land Acquisition officer makes the award under s.11 and gives notice to owner under s.12(2) and he is entitled to take possession from the owner  of  the  land  under  s.16  and  on  deposit  of  the compensation makes payment thereof under s.31 of the Act. In case, after  taking possession,  if the  amount is not paid, the provision  is made for payment of interest under s.34 of the Act which reads thus:      "34. Payment of interest when the amount      of such  compensation  is  not  paid  or      deposited on or before taking possession      of the land, the Collector shall pay the      amount awarded  with interest thereon at      the rate  of nine  per centum  per annum      from the  time of  so taking  possession      until it  shall have  been  so  paid  or      deposited."      Under the  proviso after  the  Amendment  Act,  if  the amount is  not paid  before one  year from the date on which possession is  taken, interest  at the  rate of  fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry.      The other  provision relevant  for this purpose is s.28 of the  Act, which  empowers the reference court or the High Court for  awarding interest  on the   enhanced compensation from the  date of  taking possession till date of payment as referred to  hereinbefore. Thus,  it could  be seen that the statute  covers   the  entire  field  of  operation  of  the liability of  the State  to make  payment  of  interest  and entitlement thereof  by the  owner when  land has been taken over and  possession in  consequence thereof, the land owner was deprived  of the  enjoyment thereof,  the land owner was deprived of  the enjoyment  thereof. Thus,  it could be seen that the  Court has  no power to impose any condition to pay interest in  excess of the rate and manner prescribed by the statute as  well as for a period anterior to the publication of s.4(1)  notification under  the Act.  The  parameter  for initiation of  the proceedings  is the  publication  of  the notification under  s. 4(1)  of the Act in the State Gazette or in  an appropriate  cases in  District Gazette as per the local amendments. But the condition precedent is publication of the notification under s.4(1) in the appropriate gazette. That would  give legitimacy  to the State to take possession of the  land in  accordance with  the provisions of the Act. Any possession  otherwise would  not  be  considered  to  be

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possession taken  under the  Act. In  fact, a  situation has been envisaged  under s.48(2)  of the Act, namely, that when proceedings under  the Act  were initiated  and in  the mid- stream the  proceedings were dropped, the owner who has been deprived of  the enjoyment  of  the  property,  the  statute prescribes the  remedy of  determination of  the  amount  of compensation due  to the  owner for  the damages suffered by the owner  in consequence  of the  notice of the proceedings under the  Act. The  statute also  imposes liability  on the state to reimburse the costs incurred by the owner to defend the proceedings  under the  Act. The Act is a self contained code and  common law  principles of justice, equity and good conscience cannot be extended in awarding interest, contrary to the provisions of the statute.      Sri Rajeev  Dhavan the  learned senior  counsel  fairly concluded  that   in  Vallabhdas   Naranji  vs.  Development Officer,  Bandra,  [Indian  Appeals  (Vol.  LVI)  259],  the Judicial Committee  of the Privy Council had not decided the liability to  pay interest  by the Government for the period when  possession   of  the  land  was  taken  prior  to  the publication of  the notification  under s.4(1)  of the  Act. But, unfortunately,  on the  head note it was so stated that the State was liable to pay interest for the period prior to notification. This  decision is of no assistance since there was no decision to pay interest for a period anterior to the issuance of  the notification  under s. 4(1). In The Revenue Divisional Officer,  Trichinopoly vs.  Venkatarama  Ayyar  & Anr., [ILR  49 Madras,  433 =  AIR 1936 Mad. 199], the facts were that  initially the railway station at Trichonopoly was established  but   due  to   floods  it   was  washed  away. Consequently,  notification  under  s.4(1)  was  issued  and possession was  taken. The  question was  from what date the claimants would  be entitled to the payment of interest. The learned judges  on those facts assumed the exercise of power under s.17(1)  and (4)  and resumption of possession was co- related to  the exercise  of power under s.17(4) of the Act. Accordingly the  Court directed payment of interest from the date  of   taking  possession.   The   facts   are   clearly distinguishable. The  ratio is consistent with the scheme of the Act.      In State  of Punjab  vs. Smt. Raminder Kaur, [1988 LACC 610], notification under s.4(1) was initially issued in 1968 and possession  was taken which was struck down by the Court and thereafter,  fresh notification  was issued  in 1973 and compensation  was   determined.  The  question  therein  was whether the  claimants would  be entitled  to the payment of interest from  the date of taking possession pursuant to the first  notification.  Since  the  possession  was  taken  in exercise of  the power  pursuant to  the notification  under s.4(1), directed  for payment  of interest  from the date of taking possession  is also consistent with the scheme of the Act. Thus  considered, we  are of the opinion, that the High Court was  clearly in error in directing payment of interest at 18%  per annum  and that  too, from  the date  of  taking possession. The  respondents are  entitled to interest at 9% interest on  enhanced compensation  from 16th October, 1984. The appeal is accordingly allowed. However, since the period of limitation  for filing  and suit  for damages for use and occupation by  the State from March 15, 1963 to November 15, 1984 is  barred, though legally we cannot give any direction for payment,  it is  open to  the appropriate  Government to consider the  same and  do the  needful to the claimants. No costs.

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