Judgment:
Malimath, C.J.
1. This appeal is directed against the judgment of the learned single Judge in O.P. No. 7627 of 1989, dismissing the original petition. The short question for consideration in this case is a to whether in a reference under Section 18 of the Land Acquisition Act, 1894, as amended (hereinafter referred to as 'the Act'), the Court is competent to entertain a grievance in regard to non-payment of interest under Section 34 of the Act.
2. A preliminary notification for acquiring the appellants' land was published on 19-1-1984. Possession of the land was given voluntarily on the 20th of September, 1984, the final notification under Section 6 was published on the 23rd May, 1985. An award came to be passed on the 17th July, 1989, a copy of which has been produced as Ext. P. the total amount of compensation awarded under the said award is Rs. 7,90,545.35. The award amount includes a sum of Rs. 61,233/-awarded by way of interest under Section 34 of the Act on the amount of compensation for the., lands acquired. Possession having been taken on the 20th September, 1984 without tendering or depositing the compensation for the lands acquired, the appellants are entitled to claim interest under Section 34 of the Act from the date of taking possession until the payment of compensation. The amount awarded also includes items of interest payable under Section 34 of the Act. For some period, interest has been awarded at 9%, for another period at the rate of 15% and for some period no interest whatsoever was awarded. The appellants have a grievance that the Collector has grossly erred in not awarding the full amount of statutory interest to which the appellants are entitled to under Section 34 of the Act. It is the claim of the appellants for determination and grant of the correct amount of interest under Section 34 of the Act in the writ petition. It is the case of the appellants that they are notentitled to make a grievance about interest payable under Section 34 of the Act in a reference under Section 18 of the Act and that therefore this Court, in exercise of its jurisdiction under Article 226 of the Constitution can grant relief regarding interest under Section 34 of the Act. The learned single Judge has dismissed the writ petition holding that the claim of the appellants for enhanced amount of interest under Section 34 of the Act can be the subject-matter of reference under Section 18 of the Act and that therefore it would not be proper for this Court to interfere under Article 226 of the Constitution when there is an alternate remedy available to the appellants under the statute. Aggrieved by the said decision, the appellants have come up in this appeal.
3. Mr. Bhasheer, the learned counsel for the appellants, contended that under Section 18 of the Act, persons whose lands are acquired can seek reference to the Court for proper determination of compensation raising objections in regard to the measurement of the land, the amount of compensation and the persons to whom it is payable or the apportionment of compensation among the persons interested. Having regard to the limited scope of reference under Section 18 of the Act, it was contended that any dispute which does not fall within the ambit of Section 18 cannot be made the subject-matter of reference. He contends that the dispute regarding payment of interest under Section 34 not being a dispute in regard to determination of the amount of compensation or in regard to measurement of the land or the person to whom it is payable or apportionment of the compensation among the persons interested, no reference can be sought under Section 18 of the Act.
4. We shall extract Sub-section (1) of Section 18 of the Land Acquisition Act, for the sake of convenience as follows:
'18. Reference to Court.-- (1) Any person interested who has not accepted the award may, by written application to the Collector, require that the matter be referred by the Collector for the determination of the Court, whether his objection be to the measurement of the land, the amount of the compensation,the persons to whom it is payable, or the apportionment of the compensation among the persons interested.'
It is clear from this provision that a reference to the Court can be sought by a person interested in the land acquired and who has not accepted the award amount by the Collector. He can in a reference under this provision seek proper determination of compensation of the Court, whether his objection be to the measurement of the land, the amount of the compensation, the persons to whom it is payable, or the apportionment of the compensation among the persons interested. If the person interested is not satisfied about the amount of compensation determined by the Collector, he can certainly make a written application and required the Collector to refer his dispute for determination by the Civil Court. The question for examination is as to whether a dispute in regard to the amount of interest payable under Section 34 of the Act is a dispute in regard to the amount of compensation contemplated by Sub-section (1) of Section 18 of the Act. The expression 'Amount of compensation' is not unqualified. Hence as long as the dispute is in regard to the amount of compensation the person interested can seek a reference under Section 18(1) of the Act. The expression 'compensation' has not been defined in the Act. Section 11 requires the Collector to determine compensation for the land acquired. Section 15 of the Act provides that in determining the compensation, the Collector shall he guided by Sections 22 and 23 of the Act. Sub-section (1) of Section 31 provides that on making an award under Section 11, the Collector shall tender payment of compensation awarded by him to the persons interested entitled thereto according to the award, and shall pay it to them unless prevented by some or more of the contingencies mentioned in the next sub-section. Section 34 with which we arc concerned in this case may for the sake of convenience be extracted as follows:
'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 centumper annum from the time of so taking possession until it shall have been so paid or deposited:
Provided that is such compensation or any part thereof is not paid or deposited within a period of 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 condition precedent for attracting the liability to pay interest under Section 34 is nonpayment or non-deposit of the amount of compensation for the land acquired on or before taking possession of the land. It therefore follows that interest payable under Section 34 does not form part of the compensation payable in respect of the land acquired. It is an, amount which is statutorily required to be paid at the specified rates in addition to the amount of compensation payable in respect of the lands acquired. The amount thus payable under this provision has been, described as interest. We thus find that the Act contemplates not only payment of compensation for the land acquired, but also payment of interest under Section 34 of the Act in cases where possession of the land is taken without paying or depositing the amount of compensation for the land acquired. If interest payable under Section 34 of the Act can be regarded as falling within the meaning of the expression 'compensation', occurring in Sub-section (1) of Section 18 of the Act, then any dispute in regard to payment of interest under Section 34 can be the subject-matter of a reference to the Civil Court. We shall therefore examine as to whether 'interest' contemplated by Section 34 of the Act is 'compensation' within the meaning of that expression occurring in Sub-section (1) of Section 18 of the Act.
5. We shall proceed to determine the legal character of interest payable under Section 34 of the Act, making it clear that it does not represent the amount of compensation payable in respect of the land acquired. That it is an amount payable in addition to the amount of compensation payable in respectof the land is quite clear from Section 34 of the Act. Section 34 indicates that interest is payable in addition to the compensation in respect of the lands acquired only in cases where possession is taken without tendering or depositing the amount of compensation. When the State Government takes possession of the land, it deprives the person of his right to enjoy or derive the income from the said land. This, it does, without discharging its obligation of paying compensation at the time of taking possession of the land. So far as the person whose land is taken possession of, is concerned, he is put to loss, because he is deprived of income from the land. So far as the 'State Government which acquires the land is concerned, it has the benefit of enjoying the land without paying any compensation for the same. It is to remedy this situation that Section 34 provides for payment of an amount described as interest at the specified rate from the date of taking possession, till the date of payment of compensation. The amount payable under Section 34 described as interest therefor really represents compensation for the loss caused to the person from whom possession of the land has been taken, by not tendering or depositing compensation to him. The Supreme Court had occasion to examine the legal character of interest payable under S. 34 of the Act, in the case of Sham Lal v. Income-tax Commissioner, AIR 1964 SC 1878. The relevant discussion is in paragraphs 8 and 9, which we may extract as follows :
'8. The Legislature expressly used the word 'interest' with its well known connotation under Section 34 of the Act. It is, therefore, reasonable to give that expression the natural meaning it bears. There is an illuminating exposition of the expression 'interest' by the House of Lords in Riches v. Westminster Bank Ltd., (1947) 28 Tax Cas 159 at p. 189. The question there was whether, where in an action for recovery of any debt or damages the Court exercises its discretionary power under a statute and orders that there shall be included in the sum for which the judgment is given interest on the debt or damages, the sum of interest so included is taxable under the Income-tax Acts. If the said amount was 'interest of money' within Schedule D andthe General Rule 21 of the All Schedules Rules of the Income-tax Act, 1918, income-tax waspayable thereon. In that context it was contended that money awarded as damages for the detention of money was not interest and had not the quality of interest.
Lord Wright observed :--
'The general idea is that he is entitled to compensation for the deprivation, From that point of view, it would seem immaterial whether the money was due to him under a contract express or implied, or a statute, or whether the money was due for any other reason in law. In either case the money was due to him and was not paid or in other words, was withheld from him by the debtor after the time when payment should have been made, in breach of his legal rights, and interest was a compensation, whether the compensation was liquidated under an agreement or statute, as for instance under Section 57 of the Bills of Exchange Act, 1882, or was unliquidated and claimable under the Act as in the present case. The essential quality of the claim for compensation is the same, and the compensation is properly described as interest.'
The passage indicates that interest, whether it is statutory or contractual, represents the profit the creditor might have made if he had the use of the money or the loss he suffered because he had not that use. It is something, in addition to the capital amount though it arises out of it. Under Section 34 of the Act, when the Legislature designedly used the word 'interest' in contradistinction to the amount awarded, we do not see any reason why the expression should not be give the natural meaning it bears.
(8) The scheme of the Act and the express provisions thereof establish that the statutory interest payable under Section 34 is not compensation paid to the owner for depriving him of his right to possession of the land acquired, but that given to him for the deprivation of the use of the money representing the compensation for the land acquired.'
6. What follows from the decision of the Supreme Court is that what is required to bepaid under Section 34 described as interest is not compensation for deprivation of the land in pursuance of the acquisition proceedings; but, that it is an amount which is required to be paid for the reason that the person who is deprived of the possession of the land not having been paid compensation at that time, he is deprived of the use of the amount of compensation for the land to which he was entitled to receive at the time of his dispossession. In other words, the amount described as Interest payable under Section 34 of the Act, represents compensation for delayed payment of the amount of compensation for the land acquired. The expression used in Section 34 is 'interest', it really represents compensation for the delayed payment of compensation. Therefore, the essential character of payment to be made under Section 34, described as interest, is, in reality and substance, compensation, Thus, we find from the scheme of the Act that if a person whose land has been acquired and possession taken, he is entitled to, firstly compensation for the land acquired and secondly if the compensation amount is not paid at the time of deprivation of the possession, compensation for the delay in payment of the amount of compensation for the land acquired. Thus under the scheme of the Act, two types of compensation are contemplated.
7. The next question for consideration is as to whether the determination of compensation, for which a reference can be had, under Section 18(1) of the Act, is restricted to one form of compensation among the two. The expression 'compensation' as already pointed out, has not been defined in the Act. It is, therefore, necessary for us to ascertain the meaning assigned to the expression 'compensation' occurring under Sub-section (1) of Section 18 of the Act. The object of Section 18 is to afford a remedy to the person whose land is acquired for securing proper compensation. When we say proper compensation, it is the amount, which the person whose land has been acquired, is entitled to receive in lieu of the land acquired and the object of Section 18 is to provide a remedy to the person whose land has been acquired, for securing proper compensation from the Court. Is it reasonable to infer that theParliament intended that the aggrieved party should have the remedy of securing determination of compensation only in respect of the land acquired and driving him to another remedy before another forum for securing proper compensation for the loss caused on account of the delay on the part of the State and the authorities in not paying the compensation to him at the time of taking possession? We should bear in mind that both the types of compensation are provided in the same statute. In our opinion, the Parliament could not have intended to create a situation where the same person has to resort to two different forums for recovering the amounts due under the same statute in the context of the acquisition of his land. The expression 'compensation' not having been defined in the Act, and, as a remedy by way of reference has been provided with a view to secure the proper determination of compensation to which the person concerned is entitled to, we are inclined to take the view that the said expression 'compensation cannot be interpreted to have the restricted meaning of compensation for the land acquired. In our opinion, the said expression includes compensation not only for the land acquired but also compensation for the delay in paying the amount of compensation, which amount has been described as interest under Section 34. It virtually amounts to liquidated damages statutorily fixed. We have, therefore, no hesitation in holding that in cases where compensation is not tendered or paid at the time of taking possession, the aggrieved party, who becomes entitled to interest in accordance with Section 34, can, if the same is not awarded by the Collector, seek a reference under Sub-section (1) of Section 18, for the awarding of appropriate amount of interest under Section 34.
8. Our attention, however, was invalid to the decision of the Karnataka High Court, Channarajamanni v. Union of India, AIR 1988 Kant 49, wherein a contrary view has been taken. The only reason assigned is that Section 34, which provides for payment of interest itself, says that interest becomes payable when compensation is not paid or deposited before taking possession of the land at the specified rate on the amount of compensationawarded. It is, therefore, that the Karnataka High Court has said that what is contemplated by Section 34 being payment of interest on the amount of compensation for acquiring the land and that therefore the amount of interest cannot be regarded as compensation. As a reference under Section 18(1) is competent for securing proper determination of compensation, it was held that no reference can be claimed for securing proper determination of interest payable on the amount of compensation. With respect, the Karnataka High Court did not examine as to whether the amount described as interest in Section 34 has really the character of compensation for delayed payment of compensation. It has also not examined, with respect, the question as to whether the expression 'compensation' occurring in Sub-section (1) of Section 18 should be given a restricted meaning to include within its ambit only compensation payable for the land acquired, thereby putting out of its purview compensation payable on account of delay in payment of compensation. Hence, with respect, we find it difficult to subscribe to the view taken by the Karnataka High Court.
9. In the light of our interpretation of Sub-section (1) of Section 18, as aforesaid, it is obvious that the appellants can claim proper determination of the interest payable under Section 34 in a reference invoking Section 18. We are informed that the appellants have already sought a reference. If that be so, they can certainly claim relief in regard to determination and awarding of interest under Section 34 of the Act as well. As the statute itself provides adequate and complete remedy, it would not be proper exercise of jurisdiction by this Court to interfere under Article 226 of the Constitution.
For the reasons stated above, this appeal fails and is dismissed. No costs.