Judgment:
B.L. Hansaria, C.J.
1. The point for determination in this appeal is whether a person whose land has been acquired under the provisions of the Land Acquisition Act, 1894 (shortly called 'the Act') would be entitled to interest contemplated by Sections 28 and 34 of the Act from the date of taking possession of the land even if the same be prior in point of time to the date of the award, or for that matter, the date of notification Under Section 4(1) of the Act. The learned single Judge who examined the matter having rejected the contention advanced on behalf of the Land Acquisition Office that interest for the aforesaid period cannot be granted, this appeal has been preferred.
2. It is urged by Shri Das, learned Additional Government Advocate, that as possession of the land can be taken in view of what has been stated in Section 16 of the Act after an award has been made Under Section 11, the interest contemplated by the aforesaid two sections has to run from the date possession of the land has been taken Under Section 16. In view of what has been stated in Section 17 of the Act. It is, however, conceded that the interest contemplated by Sections 28 and 34 of the Act can also run from a date prior to the making of the award, as Section 17 permits taking of possession on the expiry of 15 days from the publication of the notice mentioned in Section 9(1) of the Act. It is strenuously contended that interest cannot be allowed, under the provisions of the Act, for any period prior to the taking of possession permitted by Section 17.
3. The point for examination, therefore, is that though Sections 28 and 34 speak about payment of interest from the date on which possession of the land was taken, can the same be denied from this date on the ground that possession under the Act could not be taken in normal course after the making of the award as laid down in Section 15 of the Act and, in case of urgency, on the expiration of 15 days from publication of the notice Under Section 9(1) of the Act.
4. The aforesaid question is not res integra even in so for as this Court is concerned. There are two Bench decisions of this Court which have held that interest would be payable from the date of taking over possession of the land' irrespective of the fact that the possession could have been taken by invoking any provision of the Act. The first of such decisions was rendered in Swarnamayi v. L. A. Collector, AIR 1964 Ori. 113. In that decision, G. K. Misra, J. (as he then was) formulated three propositions which were said to be well-established and applied as much to private sale as to compulsory acquisition of land. The propositions laid down were : (i) the act of taking possession is an implied agreement to pay interest, (ii) the right to receive interest takes the place of the right to retain possession; and (iii) as a corollary to the aforesaid two propositions, if the owner is deprived of the land, he should be put in possession of compensation immediately, if not, in lieu of possession taken by compulsory acquisition, interest should be paid to him on the said amount of compensation. These propositions were called out from these decisions : Ratanlal Choonilal v. Municipal Commr., AIR 1918 PC 119 : Inglewood Pulp and Paper Co. v. New Brunswick Electric Power Commission, AIR 1928 PC 287 : Vallabdas Narainji v. Development Officer, AIR 1929 PC 163; and Satinder Singh v. Umrao Singh, AIR 1981 SC 908. Though in the leading judgment of R K. Das, J., reference was also made to Rule 3 of Chapter XXVI of the Land Acquisition Manual, it is apparent that the propositions laid down above have nothing to do with this rule.
5. Another decision is that of Collector v. Anasuya Devi, 48, (1979) CLT 7, in which the view expressed by a Full Bench of the Andhra Pradesh High Court in Revenue Divisional Officer v. Vasireddy, AIR 1979 A. P. 262, was cited with approval. The Full Bench of the Andhra Pradesh High Court also referred to the aforenoted decisions of the Privy Council and the Supreme Court and came to the conclusion that the expression 'taking possession of the land' in Section 28 of the Act would mean possession taken even prior to the acquisition proceeding with consent of the owner. In this connection it was observed as below at page 265 :
'...Even assuming that the expression 'taking possession of the land Under Section 28 of the Act would only mean taking possession of the land under or in pursuance of the Act, we do not see any reason why the taking of possession of the land prior to the Land Acquisition proceedings without any objection by the owner (in this case by private negotiation with his consent) followed by valid proceedings under the Act should not be held to be taking possession of the land under the Act. The Act does not prescribe when the Collector representing the Government should take possession of the land. Under Section 16 of the Act he may take possession after he has made an award, but there is nothing in that section or in any other provision of the Act, which prevents the Collector from taking possession of the land earlier with the consent of the owner...'
The Full Bench also came to the conclusion in paragraph 13 that at any rate interest is payable on equitable principles on the compensation amount from the date when the owner was deprived of his possession
6. We do not propose to burden this judgment with all that has been laid down in the aforesaid Privy Council and Supreme Court decisions inasmuch as the same has been dealt with at length by the Full Bench of the Andhra Pradesh High Court in the case noted above. All that we would like to observe is that it has been accepted by these decisions that the owner of immovable property who loses possession of it is entitled to claim interest in place of right to retain possession. As Sections 28 and 34 have clearly spoken about the interest to run from the date possession of the land was taken, we are not prepared to cut short the duration of this period with reference to any power conferred by the Act to take possession of the land.
7. The submission of learned Additional Government Advocate that 'as market value of the land has to be determined under the first clause of Section 23(1) of the Act with reference to publication of notification Under Section 4(1) of the Act, any interest on market value of the land to run prior to the date of publication of the notification would be incongruous' has not commended to us in view of the clear language used in Section 28 and 34 of the Act. May we observe at this stage that in principle no difference can be made between the interest payable Under Sections 28 and 34 of the Act in view of what was stated by their Lordships of the Privy Council in Vallabdas (supra)
8. We have, however, to make an observation regarding the amount payable Under Section 23(1-A) of the Act. As this amount is payable from the date of the publication of the notification Under Section 4(1) of the Act to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier, we are of the view that in cases where possession has been taken prior to Section 4(1) notification, the amount contemplated by this section shall not be available to the land owner. Of course, if possession had been taken after the aforesaid notification, the amount visualised by this section shall be paid from the date of notification to the period mentioned in this section. Though in this connection it is contended by Shri D. K. Das by relying on State of Maharashtra v. Nanabhai Rathod, AIR 1989 Bombay 9, that in a case where possession was taken even before issue of notification Under Section 4, the claimant would be entitled to award of 12% of the market value from the date of notification upto the date of the award, we would respectfully differ with this view inasmuch as the terminus adquo of this section is the date of Section 4(1) noti- fication for which reason it cannot travel back, and its terminus ad quem is date of award or date of taking possession whichever is earlier. In cases where possession is taken even before issuance of notification Under Section 4(1), this section would have, therefore, no operation. But then, we are not prepared to agree with the learned Additional Government Advocate that what has been laid down in this section would alter the position which has emerged from the aforenoted Privy Council and Supreme Court decisions regarding the payment of interest Under Sections 28 and 34 of the Act, as the former section has made no reference to the award of interest under the latter sections indeed, it does not speak about payment of any interest which is conceptually different from the amount which is required to be paid by Section 23(1-A).
9. In this context Shri S. K. Das has referred us to Collector, Kalahandi v. Padmalochan, 68 (1989) CLT 204, wherein an award under the Act for loss of crop accruing prior to the notification Under Section 4(1) of the Act was not allowed inasmuch as the same was not taken to come within the purview of Section 23 of the Act. We say with respect that the ratio of this decision is apparently right inasmuch as under the first clause to Section 23(1) of the Act the market value is to be determined on the date of publication of the 4 (1) notification and as such any compensation for any period prior to Section 4(1) notification could not have been awarded with the aid of this clause. This, however, is different from saying that interest to which one is entitled under the law and equity in view of what has been stated in the aforenoted decisions of the Privy Council and Supreme Court would not be available for a period prior to Section 4(1) notification, This decision, therefore, cannot take away the weight of the propositions mentioned by G.K. Misra, J. in the case of Swarnamayi (supra).
10. In view of all that has been stated above, we do not find any force in the appeal and the same is, therefore, dismissed with costs.