Judgment:
1. In pursuance of a Notification issued under Section 4(1) of the Land Acquisition Act, 1894 approved in G.O.Ms. No. 445, Education, dated 15.4.1991, the lands of a total extent of 1.87.0 Hectares in Survey Nos. 450/1A, 453/1A, 453/3E, 454/4, 455/3A2 and 456/2A1 in Keezha-veeraraghavapuram Village, Palayamkottai Taluk, Tirunelveli District was acquired for the purpose of establishing a Government College of Engineering at Tirunelveli.
2. As a matter of fact, proceedings for acquisition were first initiated in the year 1983 and possession of lands were also taken, but due to various reasons, the Notification lapsed. Therefore, the Government was compelled to issue a fresh Notification in the year 1991, which it did under G.O.Ms. No. 445 dated 15.4.1991. The notification was published in the Gazette on 26.6.1991 and the substance of the same was published in the locality on 25.10.1991.
3. After completion of other formalities, an award was passed in Award No. 2/94 dated 20.10.1994 fixing a compensation of Rs. 1,000/- per cent. But on reference under Section 18 of the Act, the Fast Track Court-I, Tirunelveli (Land Acquisition Tribunal) enhanced the compensation to Rs. 14,000/- per cent. Aggrieved by such enhancement, the State is on appeal in these regular appeals.
4. We have heard Mr. K.M. Vijayakumar, Additional Government Pleader appearing for the appellants and Mr. T.R. Rajagopalan, learned Senior Counsel appearing for the respondents.
5. The Land Acquisition Officer (L.A.O) took into consideration the statistics relating to 180 sale transactions that took place during the period from 25.10.1988 to 24.10.1991. These transactions related to lands in Kulavanigarpuram Village, which adjoins Keezhaveeraraghavapuram Village. After rejecting most of those sale deeds either on the ground that they are far away from the acquired land or on the ground that the land sold was a house site, the Land Acquisition Officer accepted the sale deed dated 29.9.1990 taken at Sl. No. 115 in the data lands. In that sale deed, the land in Survey No. 1003 of the extent of 41 cents had been sold for a total consideration of Rs. 41,000/-. Therefore, L.A.O. fixed the value at Rs. 1,000/- per cent as the acceptable market value.
6. Before the Tribunal there were five references in L.A.O.P. Nos. 39,69,70,71 and 72 of 2002. In L.A.O.P. No. 39 of 2002, the claimants examined two witnesses and marked 10 exhibits. The Referring Officer examined the District Supply Officer and filed 3 documents. In L.A.O.P. Nos. 69, 70, 71 and 72 of 2002, the claimants were the same persons and hence, they examined one witness and marked 10 documents. On the side of the Referring Officer, the Revenue Divisional Officer was examined and 3 documents were marked.
7. The claimants in all those references relied on a sale deed dated 1.6.1990, which was marked as Ex.A.9 in L.A.O.P. No. 39 of 2002 and as Ex.A.10 in L.A.O.P. No. 69 to 72 of 2002. Under this sale deed, the land bearing Plot No. 11 measuring an extent of 2 cents in Survey No. 580/1 in Kulavanigarpuram Village had been sold for Rs. 39,250/-. Therefore, the claimants sought a sum of Rs. 19,625/- as the fair market value per cent.
8. In L.A.O.P. No. 39 of 2002 as well as in the other batch viz., L.A.O.P. Nos. 69 to 72 of 2002, Advocate Commissioners were appointed separately. The report of the Commissioner and the Sketch filed by him in L.A.O.P. No. 39 of 2002 were marked as Ex.A.10 but the Commissioner was not examined. Similarly, the Commissioner's report and Survey Sketch in L.A.O.P. Nos. 69 to 72 of 2002 were marked a Exs.A.7, A.8, A.9 and A.10. Even in this case, the Commissioner was not examined.
9. In L.A.O.P. No. 39 of 2002 as well as in L.A.O.P. No. 69 to 72 of 2002, statistics of sales considered by the L.A.O. were marked as Ex.R1 respectively. Topo-sketch of the acquired land and the data lands were filed as Exs.R2 and R3 respectively.
10. Even at the outset, it is seen from the award as well as the judgment of the Tribunal that the statistics relating to sale transactions in Keezhaveeraraghavapuram were not at all considered, on the ground that the market value reflected in those transactions was on the higher side. Therefore, the statistics of transactions relating to the adjoining village viz., Kulavanigarpuram alone were considered. Unfortunately, the claimants also did not collect statistics relating to the lands in Keezhaveeraraghavapuram in which the acquired lands were situated. Therefore, we will have to go only by the statistics available in respect of sale of lands in Kulavanigarpuram.
11. As stated earlier, the L.A.O. took into account the value indicated in the sale of the land at Survey Nos. 1003. The claimants contended that Survey Nos. 1006 was classified as Government burial ground poromboke and that there was also C.S.I. Cemetery nearby. The Tribunal noted that this objection of the claimants was not challenged by the Referring Officer.
12. The contention of the claimants that the Government burial ground was located in Survey No. 1006 was fortified by the Sketch filed by the Advocate Commissioner in L.A.O.P. No. 39 of 2002 as Ex.A.10. In that Sketch Ex.A.10, the Deputy Inspector of Survey, Palayamkottai had signed. The data land in Survey No. 1003 adjoins the burial ground land in Survey No. 1006 on the South-East. Even in the data land in Survey No. 1003, there were seven tombs indicating that burials had taken place. There were seven tomb stones in Survey No. 1003, in which the names of persons interned therein are inscribed. The dates found in those tomb stones are 10.2.1954, 6.8.1998 and 20.11.1956. Even in the adjoining Survey No. 1002, there was C.S.I. Cemetery.
13. It is pertinent to note that the Commissioners appointed in L.A.O.P. No. 39 of 2002 and other batch were different advocates. The report of the Advocate Commissioner in L.A.O.P. No. 69 of 2002, Ex.A.4 also confirmed the fact that the land in Survey No. 1006 was a burial ground poromboke and that there are clear indications of burial of bodies in that land. The Referring Officer neither took this fact into consideration while passing the award nor rebutted the claim made by the claimants in this regard. During cross-examination, the witnesses on the side of the Referring Officer, just feigned ignorance of the existence of burial ground. Such ignorance of the existence of a fact, cannot be equated to a firm denial of the very existence a fact. Therefore, the Tribunal rejected the comparison made by the L.A.O. with the data land and we are of the considered view that the Tribunal was right in doing so. The land used as a burial ground or the land adjoining the burial ground will not fetch the same value as that of any other land. Therefore, the Tribunal was right in rejecting the comparison made by the L.A.O with the data land.
14. As stated earlier, the claimants relied upon the sale deed dated 1.6.1990 which was found at Sl. No. 127 in the data lands. The copy of the said sale deed was filed as Ex.A.9 in L.A.O.P. No. 39 of 2002 and Ex.A.6 in other batch. But the land covered by that sale deed was in Survey No. 580/1 and the total extent covered by the sale deed was only 2 cents. It is seen from the evidence on record including the report of the Advocate Commissioner Ex.A4 in L.A.O.P. No. 69 of 2002 that the land in Survey No. 580/1 is in a lay out of house sites approved in the year 1984 and that the said land is surrounded by Housing Board Buildings, Water Tank, Private Houses etc.,. The distance between the acquired land and the land in Survey No. 580/1 is also seemingly more than 11/2 Kms. Therefore, the Tribunal rightly rejected the comparison between two.
15. However, the Tribunal found that the sale deed at Sl. No. 20 in the Statistics, related to Survey Nos. 941 & 942 and that under the said sale deed dated 7.2.1989, the land measuring 7 cents had been sold for a consideration of Rs. 97,000/-, which works out to Rs. 13,233/- per cent. The Tribunal found that this sale deed is comparable to the acquired land. Therefore, the Tribunal adopted the value of Rs. 14,000/- per cent on the basis of the sale deed dated 7.2.1989 found at Sl. No. 20 of the sales statistics. It is relevant to note that this transaction was rejected by the L.A.O. on the ground that it was a house site located far away from the acquired land. Aggrieved by this comparison and fixation of value at Rs. 14,000/- per cent, the Referring Officer has come up with the present appeals.
16. Mr. K.M. Vijayakumar, learned Additional Government Pleader, assailing the judgment of the Tribunal contended that the data land in Survey No. 1003 was the nearest land and that there were no justifiable reasons for the Tribunal to reject the same.
17. The learned Additional Government Pleader also contended that the land in Survey No. 941 and 942 found at Sl. No. 20 of the Statistics was of a small extent and located far way. It is a house site with which no comparison could be made by the Tribunal. Therefore, the learned Additional Government Pleader contended that the Tribunal was in error in rejecting the data land and accepting the sale relating to Survey Nos. 941 and 942.
18. In response, Mr. T.R. Rajagopalan, the learned Senior Counsel for the respondents contended that there were certain special features relating to the acquired land, which the L.A.O. failed to take note of and therefore, the Tribunal was convinced, justifiably, to enhance the compensation.
19. The special features of the land are:
(a) The acquired land abuts National Highway No. 7, which is one of the most important Highways in the country running upto Kanyakumari.
(b) There is a Naval Base Station known as I.N.S. Kattabomman in a nearby place.
(c) On the Eastern side of the acquired land, there is an Industrial Training Institute run by the State Transport Corporation.
(d) There is a Bus Stand, Petrol Bunk and Housing Board Buildings nearby.
(e) The acquired land was part of developed area in Tirunelveli Corporation.
(f) The land was treated as urban land by the Urban Land Tax (U.L.T.) Officer.
(g) At a distance of 1/2 Km, there was a milk processing unit run by Aavin.
(h) The land was actually acquired and its possession was taken way back in 1983 in pursuance of the first Notification but that Notification was allowed to lapse due to technical reasons. A fresh Notification under Section 4(1) of the Act was issued in 1991, after eight years of taking possession. By this time, the Engineering College had gained prominence and the area had fully developed.
20. In the light of the above special features, Mr.T.R. Rajagopalan, learned Senior Counsel contended that even the amount of Rs. 14,000/- per cent fixed by the Tribunal with reference to the land in Survey Nos. 941 and 942 is too low and that the Tribunal ought to have fixed the value of Rs. 20,000/- per cent by taking reference to the sale of the land in Survey Nos. 580/1.
21. We have carefully considered the rival submissions. As we have stated earlier, the fixation of market value at Rs. 1,000/- per cent by the Land Acquisition Officer was on the basis of a sale deed relating to the land in survey No. 1003. But the fixation of market value at Rs. 14,000/- per cent by the tribunal was on the basis of the sale deed relating to survey No. 941 and 942.
22. In L.A.O.P.39 of 2002, CW-1 stated in his deposition, that there is a burial ground in survey No. 1006, which adjoins the data land in survey No. 1003 and that there is also a Christian cemetery. CW.2 also stated in his oral evidence that the land in survey No. 1003 is a burial ground and that there is a Government burial poromboke land in survey No. 1006. The District Supply Officer who was holding charge as Revenue Divisional Officer examined has RW-1 on the side of the Referring Officer, did not make a positive assertion that there was no such burial ground or cemetery in survey No. 1006. On the other hand he said he did not know whether there was a burial ground in survey No. 1006. A suggestion was put to him that a tomb was constructed in 1956 in memory of Vallithai, Chellammal, Muthammal and P.S. Ponnaiah. He said that he did not know whether there is a C.S.I. Cemetery in survey No. 1002.
23. Similarly, in L.A.O.P. No. 69 of 2002, the Revenue Divisional Officer, examined as RW.1 stated in cross examination that he did not remember whether the data land was a burial ground. A suggestion was also put to him that there is a cemetery and that though he knew about the same, he was telling a lie.
24. The Commissioner appointed in L.A.O.P. No. 39 of 2002 filed a report, marked as Ex.A-10. In that report, it was stated that the land in survey No. 1006 is a burial ground poromboke. It was also stated that with the help of Lions Club, a crematorium has also been constructed under the 'Namakku Naame' scheme. As per the report, a lot of tombs were found in survey No. 1003. In one tomb stone, the name Vallithai, wife of Shanmuga Thevar, with date of death 10.02.1954, was inscribed. Similarly, in another tomb stone, the name Muthammal, wife of Arunachalam, with date of birth as 15.04.1918 and date of death as 06.08.1968 was found inscribed. In yet another tomb stone the name Chellammal, wife of Sankara Thevar, with date of death 20.11.1956 was found inscribed. The report also stated that there were a lot of dilapidated tomb stones in the entire land and that there was a C.S.I. Cemetery and Luthern cemetery in survey No. 1002.
25. In the Commissioner's reports filed in L.A.O.P.69 to 72 of 2002, as Exhibits A-4, A-7 to A-9, also, it was stated that the lands in survey Nos. 1003 and 1006 had places of burial and cremation. The Commissioner appointed in these petitions, was accompanied by a Surveyor. The sketch prepared by the surveyor, filed as Exhibit A-10 also confirmed the existence of burial ground in the data land.
26. In the light of the overwhelming evidence, it is clear that the data land is not at all comparable to the acquired land. Therefore the Land Acquisition Officer was clearly in error in taking the land in survey No. 1003 and 1006 as the data land and the Tribunal was right in rejecting the same.
27. Coming to the comparison made by the Tribunal with the land in survey No. 941 and 942, it is seen that the said land measuring an extent of about 7.33 cents had been sold by a sale deed dated 07.02.1989 for a total sale consideration of Rs. 97,000/-. It worked out to Rs. 13,233.80 p, per cent and the Tribunal held this to be comparable and hence adopted the rate of Rs. 14,000/- per cent.
28. But we find on a comparison between the sale statistics of 180 transactions and the topo sketch (Exhibits A-1 and A-2) that the document at serial No. 20, relating to survey No. 941 and 942, is not wholly reliable. Though the sale deed at serial No. 20 dated 07.02.1989 reflects a rate of Rs. 13,233.80 per cent for the land in survey No. 941 and 942, there are other sale deeds relating to abutting lands in survey Nos. 931, 939, 940 and 946, reflecting a lesser value. They are as follows:
(a) The sale deed dated 25.10.1988 found at serial No. 1 of the statistics relates to survey No. 940/2 and it reflects a market value of Rs. 1,818.20 per cent.
(b) The sale deed dated 03.02.1989 found at serial No. 16 of the statistics relates to survey No. 940/1 and it reflects a market value of Rs. 3,000/- per cent.
(c) The sale deed dated 06.05.1989 found at serial No. 45 of the statistics relates to survey No. 946/1 and it reflects a market value of Rs. 3,000/- per cent.
(d) The sale deed dated 27.02.1990 found at serial No. 103 of the statistics relates to survey No. 939 and it reflects a market value of about Rs. 5,000/- per cent.
(e) The sale deed dated 29.03.1990 found at serial No. 116 of the statistics relates to survey No. 940/1 and it reflects a market value of Rs. 4,000/- per cent.
(f) The sale deed dated 30.06.1990 found at serial No. 130 of the statistics relates to survey No. 931 and it reflects a market value of Rs. 3,750/- per cent.
29. It is pertinent to point out that survey No. 940 is just adjoining survey Nos. 941 and 942. The land in survey No. 931 adjoins survey No. 940. The Land in survey No. 939 is just below survey No. 940. The transactions in survey Nos. 940, 931 and 939 have taken place on 25.10.1988, 03.02.1989, 27.02.1990, 29.03.1990 and 30.06.1990. The transaction in survey Nos. 941 and 942 at serial No. 20, taken as the basis by the Tribunal, had taken place on 07.02.1989.
30. Thus it is clear that in all the sale transactions that took place, both before and after the transaction at serial No. 20, the market value of the lands just abutting and adjoining the land in survey Nos. 941 and 942 ranged between Rs. 1,800/- and Rs. 5,000/- per cent. Therefore, the rate indicated by the sale deed at serial No. 20 of the statistics, at Rs. 13,233.80, appears to be artificial and unreliable. Hence, we reject the sale transaction at serial No. 20, which was taken by the Tribunal, as comparable and indicative of the market value of the acquired land.
31. Once the basis adopted by the Tribunal goes, we have to see, from the statistics available on record and the topo sketch, as to which of the remaining transactions would best suit a comparison. It is seen from the topo sketch that the lands in survey Nos. 822/1 and 946 are located at a shorter distance from the acquired land than any other land, of which statistics are available. Their details are as follows:
--------------------------------------------------------------------------------Serial No. Date of sale Survey No. Extent Total Rate per centIn statistics consideration--------------------------------------------------------------------------------67 17/7/1989 822/1 5.5 cent Rs. 46,000/- Rs. 5,303/---------------------------------------------------------------------------------104 27/2/1990 822/1 6.42 cent Rs. 32,100/- Rs. 5,350/---------------------------------------------------------------------------------45 6/5/89 946/1 5.5 cent Rs. 16,500/- Rs. 3,000/---------------------------------------------------------------------------------
32. The lands in survey Nos. 822 and 946 are comparable to the acquired land, for the following reasons:
(a) They are located to the right of (east of) the National Highway.
(b) While the acquired land abuts the national highway, the lands in survey Nos. 822 and 946 are separated from the highway by just one bit of land in survey Nos. 821 and 947 respectively.
(c) The lands in survey Nos. 822 and 946 are nearer than the other lands, to the acquired land and they are situate on the northern side of the acquired land.
(d) Though the acquired lands are situate in Keezhaveeraragavapuram and the lands in survey Nos. 822 and 946 are in Kulavanikarpuram, the acquired land is located along side those lands in survey No. 822 and 946. Interestingly, all the lands in Keezhaveeraragavapuram, except the acquired land are located to the western side of the National Highway. But the acquired land is on the eastern side of the National Highway. Therefore the lands in survey Nos. 822 and 946 compare well with the acquired land.
33. As stated earlier, the market value of the land in survey No. 946, as per the document at serial No. 45, was Rs. 3,000/- per cent on 06.05.1989. The market value of land in survey No. 822/1, as per the documents at serial Nos. 67 and 104 was Rs. 5,303/- and Rs. 5,350/- per cent respectively, as on 17.07.1989 and 27.02.1990. Therefore, we are of the considered view that Rs. 5,350/- per cent could be taken as the foundation.
34. The notification under Section 4(1) was published in the Gazette on 26.06.1991 and the substance of the notification published in the locality on 25-10-1991. The valuation of properties is revised once in a year, in April, by the Government, for the purpose of preventing under valuation and evasion of stamp duty. Therefore if the rate of Rs. 5,350/- per cent, indicated as on 27.2.1990, is accordingly revised in April 1990 and April 1991, we would arrive at a market value of Rs. 6,420/- per cent for the comparable lands in Survey No. 822 as on the date of publication of notification under Section 4(1).
35. The acquired land, as seen from the topo sketch, is just abutting the National Highway proceeding to Kanyakumari. It is in close proximity to the Engineering College, already in existence. As per the Commissioner's report, it has certain locational advantages and high potential for development. They are also indicated in para-19 above. Therefore the market value would be certainly a little more than the value of the lands in Survey No. 822 and 946. Hence an increase of 10% on the value arrived at in the previous paragraph, in our opinion, would meet the ends of justice. Accordingly, we arrive at the market value of the acquired land as Rs. 7,060/- per cent.
36. Thus, we find that while the fixation of Rs. 1,000/- per cent by the Land Acquisition Officer is extremely low, the fixation of Rs. 14,000/- per cent by the Tribunal is on the other extreme. The adoption of a value of Rs. 7,060/- per cent, in our considered view, would be fair and reasonable. On this rate the respondents would be entitled to solatium and interest as per the provisions of the Act.
37. Apart from fixing the market value of the land, there is one more issue to be sorted out. In this case, the possession of the lands were taken as early as on 17.8.1983. But the proceedings initiated at that time lapsed. Therefore a fresh notification under Section 4(1) was published on 25.6.1991. During the period from 17.8.1983 (date of taking possession) to 25.6.1991 (date of publication of notification), the lands were taken over and buildings were constructed and annexed to the Tirunelveli Government Engineering College. The Land Acquisition Officer did not award any amount towards compensation for this interregnum period. But the Tribunal awarded interest at the rate of 6% per annum for a period of one year from 17.8.1983 to 16.8.1984 and interest at the rate of 15% per annum from 17.8.1984 to 25.6.1991 on the notional value of Rs. 7,000/- per cent (50% of the compensation of Rs. 14,000/- actually fixed by the Tribunal). For doing so, the Tribunal relied upon the decision of the Division Bench of this Court in S. Balasubramanian v. The Land Acquisition Officer 2001 (2) CTC 519. Though the appellants have not raised any grounds in the memo of grounds of appeal, regarding this portion of the award of the Tribunal, we wish to deal with this issue in view of its importance. Since these appeals are under Section 54 of the Land Acquisition Act, to which Order 41, Rule 2, CPC is applicable, we see no impediment on our path.
38. Under Section 16 of Land Acquisition Act, 1894, the Collector is empowered to take possession of the land, after an award is passed under Section 11 and the land would vest absolutely in the Government, thereafter. But in case of urgency, the Collector is empowered to take possession of a land needed for public purpose, under Section 17(1). However the power thereunder can be exercised only when the appropriate Government so directs and a period of 15 days had expired from the publication of the notice under Section 9(1). Section 17(2) vests similar powers in respect of the channel of a river or any land for Railway administration. Whenever the power under Section 17(1) or 17(2) is exercised, the Collector is obliged under Section 17(3) to offer compensation for standing crops and trees, at the time of taking possession. By Act 68 of 1984, Sub-section (3-A) and (3-B) were inserted to Section 17. They read as follows:
[(3-A) Before taking possession of any land under Sub-section (1) or of Sub-section (2), the Collector shall, without prejudice to the provisions of Sub-section (3),:
(a) tender payment of eighty per centum of the compensation for such land as estimated by him to the persons interested entitled thereto, and
(b) pay it to them, unless prevented by some one or more of the contingencies mentioned is Section 31, Sub-section (2),
and where the Collector is so prevented, the provisions of Section 31 Sub-section (2),(except the second proviso thereto), shall apply as they apply to the payment of compensation under that section.
(3-B) The amount paid or deposited under Sub-section (3-A), shall be taken in to account for determining the amount of compensation required to be tendered under Section 31, and where the amount so paid or deposited exceeds the compensation awarded by the Collector under Section 11, the excess may, unless refunded within three months from the date of the Collector's award, be recovered as an arrear of land revenue.]
Therefore the appellants ought to have paid or deposited 80% of the compensation estimated by them, at the time of taking possession, if it was a case of urgency. But the appellants did not pay any amount, before taking possession of the land in these cases on 17.08.1983. However it is to be remembered that the date of possession was much before the said amendment came in to force.
39. It is by the very same Amendment Act 68 of 1984 that Sub-section (1-A) was inserted to Section 23, which provides for payment of interest at 12% per annum on the market value, for the period commencing from the the date of publication of notification under Section 4(1) to the date of the award or the date of taking possession, whichever is earlier. In all cases where possession is taken pursuant to a notification under Section 4(1), either under Section 16 or under Section 17, there is no difficulty in computing interest, as per Section 23(1-A). But on rare occasions, cases do come up, where either possession was taken even before the proceedings were initiated or the notification under Section 4(1) itself lapsed or got quashed after possession was taken over, compelling the Government to issue a fresh notification post facto. It is these cases which pose some difficulties and hence let us see how some of them were dealt with by courts in the past.
40. In Shree Vijay Cotton and Oil Mills Limited v. The State of Gujarat : 1991(1) SCC 262, possession of the land was taken by the Government in 1949 under an arrangement to give suitable land in exchange. Buildings were put up on the land, but no land was given in exchange. Therefore a notification was issued for acquisition in 1955. The award was enhanced by the Tribunal under Section 18. Challenging the enhancement, the state went on appeal to the High Court. Two questions were raised before the High Court, namely (1) whether the compensation awarded by the Tribunal was right and (2) whether the claimant was entitled to interest for the period from 1949 to 1955. The Tribunal had awarded interest only from 1955 and the claimant did not file any appeal against that part of the award. Their cross objections were rejected as time barred. Therefore the claimant took the matter on appeal to the Supreme Court. After pointing out the mandatory requirement of Section 34, the Supreme Court held that the claimant was entitled to interest for the period from 1949 to 1955. Therefore, it appeared from this decision as though the claim for interest in such cases was automatic.
41. But in Union of India v. Budh Singh : (1995 (6) SCC 233, a different view was taken. In that case, possession was taken on 15.03.1963 and a compensation was paid on 09.03.1965. But since there were no proceedings, the suit filed by the owner for recovery of possession was decreed. Therefore a notification under Section 4(1) was issued on 16.11.1984 (after 21 years of taking possession) and an award was passed. The award attained finality. At the time of execution, a question arose whether interest was payable for the period from 1963 to 1984. Dealing with the said question, the Supreme Court held in para 3 and 5 as follows:
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.
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. 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 Section 4(1) notification under the Act. The parameter for initiation of the proceedings is the publication of the notification under Section 4(1) of the Act in the State Gazette or in an appropriate case in District Gazette as per the local amendments. But the condition precedent is publication of the notification under Section 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 possession taken under the Act. In fact, a situation has been envisaged under Section 48(2) of the Act, namely, that when proceedings under the Act were initiated and in the midstream 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.
After expositing the law as above, the Supreme Court Ordered payment of interest only from the date of notification and left it to the appropriate government to consider payment of interest for the previous period.
42. But within a month of deciding Budh Singh, the Supreme court had an occasion to consider another case in Assistant Commissioner v. Mathapathi Basavannewwa : 1995 (6) SCC 355. In that case, possession was taken on 23.1.1971, but the notification under Section 4(1) was published on 2.8.1984. The question taken up by the Supreme Court for consideration, as seen from paragraph-2 of the decision, was as to from what date the owners would be entitled to the benefit of Section 23(1-A) of the Act. A contention was raised, as seen from paragraph-3 of the decision that the owners are not entitled to additional amount at 12% per annum from the date of possession till the date of notification under Section 4(1). But the Apex Court specifically rejected the said contention in the last line of paragraph-3. Thereafter the Court considered the object of introduction of Section 23(1-A) and held in paragraph-5 as follows:
5. But strict construction leads to unjust result, hardship to the owner and defeats legislative object. Take a case like the one in hand. Possession was taken long before publication of the notification. In the meanwhile, the owner was deprived of enjoyment of his property. In other words, if the possession is taken earlier and notification is issued later but the award is subsequently made, the owner or the claimant is entitled to the compensation from the date of taking possession till date of the award, though possession was taken before the notification under Section 4(1) was published. The expression 'whichever is earlier' has to be construed in that backdrop and the claimant would be entitled to additional amount from the date of taking possession.
After holding so, the Court awarded interest at 12% per annum from the date of possession till the date of publication of notification under Section 4(1). Thus there was a conflict between Budh Singh and Basavannewwa, both of which were decided within a span of one month.
43. Again in Lila Ghosh v. The State of West Bengal : 2004 (9) SCC 337, the same question arose. In that case, the State Government took possession of the property in December 1979, but the notification under Section 4(1) was issued in July 1982 and published only in August 1983. Ultimately the Supreme Court awarded interest only from the date of publication of the notification namely 05.08.1983. While doing so, the Supreme Court distinguished the decision in Shree Vijay Cotton and Oil Mills Ltd. on the following lines:
Even though the authority in Shree Vijay Cotton & Oil Mills Ltd. appears to support the claimants, it is to be seen that apart from mentioning Sections 28 and 34, no reasons have been given to justify the award of interest from a date prior to commencement of acquisition proceedings. A plain reading of Section 34 shows that interest is payable only if the compensation, which is payable, is not paid or deposited before taking possession. The question of payment or deposit of compensation will not arise if there is no acquisition proceeding. In case where possession is taken prior to acquisition proceedings a party may have a right to claim compensation or interest. But such a claim would not be either under Section 34 or Section 28. In our view interest under these Sections can only start running from the date the compensation is payable. Normally this would be from the date of the Award. Of course, there may be cases under Section 17 where by invoking urgency clause possession has been taken before the acquisition proceedings are initiated. In such cases, compensation, under the Land Acquisition Act, would be payable by virtue of the provisions of Section 17. As in cases under Section 17 compensation is payable interest may run from the date possession was taken. However, this case does not fall into this category.
Interestingly, the conflict of opinion between Budh Singh and Basavannewwa was not brought to the notice of the court when it decided Lila Ghosh. The decision in Shree Vijay Cotton Mills alone was cited and the court distinguished the same.
44. Ultimately, the conflict of views between the decisions in Shree Vijay Cotton and Oil Mills, Budh singh and Basavannewwa was noted in R.L. Jain(D) by Lrs v. DDA and Ors. : 2004(4) SCC 79 and hence the issue was referred to a larger bench. In that case a notification under Section 4(1) was issued on 13.11.1959. Though the land in question was not included in that notification, it was included in the subsequent notification and possession was taken on 10.11.1961. However the acquisition proceedings were held as null and void, in a suit filed by the owner. Despite the decree, the Delhi Development Authority put up constructions. The constructions were directed to be removed, by the Civil Court, by a decree of mandatory injunction. Therefore a fresh notification for acquisition under Section 4(1) was issued on 09.09.1992. The Collector passed an award on 11.06.1994, granting interest from the date of possession namely 10.11.1961. The High Court set aside the award on the ground that under Section 34, interest was not payable from a date anterior to the date of commencement of proceedings. Therefore the claimant went to the Supreme Court.
45. After a survey of entire scheme of the Act, the Supreme Court pointed out in paragraph 11 that the scheme of the Act does not contemplate taking over of possession prior to the issue of a notification under Section 4(1) and that if possession was taken prior to the notification, it would be dehors the Act. It was further pointed out in the same decision that the publication of a notification under Section 4(1) is the sine qua non for any proceeding under the Act. In paragraph 12 it was held as follows:
Clearly, the stage for taking possession under the aforesaid provisions would be reached only after publication of the notification under Sections 4(1) and 9(1) of the Act. If possession is taken prior to the issuance of the notification under Section 4(1) it would not be in accordance with Section 16 or 17 and will be without any authority of law and consequently cannot be recognised for the purposes of the Act. For parity of reasons the words 'from the date on which he took possession of the land' occurring in Section 28 of the Act would also mean lawful taking of possession in accordance with Section 16 or 17 of the Act. The words 'so taking possession' can under no circumstances mean such dispossession of the owner of the land which has been done prior to publication of notification under Section 4(1) of the Act which is dehors the provisions of the Act.
46. After holding so in para 12, the Bench pointed out in para 14 that the decision in Shree Vijay Cotton and Oil Mills is not an authority for the proposition that where possession is taken before the issuance of notification under Section 4(1), interest on the compensation could be awarded with effect from the date of taking possession. Ultimately in para 18 the Bench indicated the legal position in such cases, on the following lines:
In a case where the landowner is dispossessed prior to the issuance of preliminary notification under Section 4(1) of the Act the Government merely takes possession of the land but the title thereof continues to vest with the landowner. It is fully open for the landowner to recover the possession of his land by taking appropriate legal proceedings. He is therefore only entitled to get rent or damages for use and occupation for the period the Government retains possession of the property. Where possession is taken prior to the issuance of the preliminary notification, in our opinion, it will be just and equitable that the Collector may also determine the rent or damages for use of the property to which the landowner is entitled while determining the compensation amount payable to the landowner for the acquisition of the property. The provisions of Section 48 of the Act lend support to such a course of action. For delayed payment of such amount appropriate interest at prevailing bank rate may be awarded.
47. Though the decisions in Lila Ghosh and R.L. Jain were noted in Madishetti Balaramul (D) By Lrs v. Land Acquisition Officer 2007 STPL(LE) 38553, the Supreme Court awarded interest at 15% per annum from the date of taking possession upto the date of notification. Para 20 of the said decision is as follows:
In the peculiar facts and circumstances of the case, although the proper course for us would have to remand the matter back to the Collector to determine the amount of compensation to which the Appellants would be entitled for being remained out of possession since 1979, we are of the opinion that the interest of justice would be met if this appeal is disposed of with a direction that additional interest @ 15% per annum on the amount awarded in terms of award dated 02.01.1999 for the period 16.03.1979 till 22.12.1991, should be granted, which, in our opinion, would meet the ends of justice.
But in the light of the decision of the larger Bench in R.L. Jain case, the directions issued in MADISHETTI BALARAMUL can be construed only as a direction under Article 142.
48. Therefore it is clear from the above discussion and the decision of the larger Bench in R.L. Jain that a person, whose land was taken possession of, even before the date of issue of notification under Section 4(1), would be entitled only to a fair rent or damages for use and occupation from the date of possession till the date of notification. The provisions of Section 23(1-A) or 34 of the Land Acquisition Act, 1894 would have no application in such cases, as the possession in such cases would fall outside the purview of the Act.
49. Once it is found that the remedy of the land owner in such cases is only to seek a fair rent or damages for use and occupation, then the next question that arises is as to how such determination shall be made and who shall do the same. Let us now take up these questions for consideration.
50. As we have noted earlier, there are two types of cases, where possession may precede the notification under Section 4(1). Cases where the Government or the beneficiary enters into the land and occupies the same before realising that no proceedings had ever been initiated, fall under the first category. Cases where proceedings are initiated and possession is taken, but such proceedings either lapse or get quashed subsequently, fall under the second category.
51. Cases falling under the second category may be brought within the purview of Section 48(2) of the Act. In such cases, the Collector himself can conduct an enquiry and determine the damages for use and occupation. The determination of such compensation under Section 48(2) is a matter, to which the provisions of Part III of the Act are made applicable, by Section 48(3). Therefore the Collector is also empowered to make a reference to the Court, if the land owner is aggrieved by the quantum of compensation so fixed and raises an objection in a manner prescribed. The Court would then be entitled to determine the correctness of the compensation so fixed.
52. But in cases falling under category-I, the Collector may not be entitled to determine the quantum of damages for use and occupation, since the very possession and the liability to pay damages for use and occupation, fall outside the purview of the Act. However, it may be open to the Collector, while making a reference under Section 18, to request the Court to determine this issue also. That it is possible to do so can be gathered from the mandate of Section 23(1), the relevant portion of which reads as follows:
23. Matters to be considered in determining compensation
(1) In determining the amount of compensation to be awarded for land acquired under this Act, the Court shall take into consideration: .. .. .. .. .. .. .. .. ..
fourthly, the damage (if any) sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner or his earnings.
Out of six factors enlisted in Section 23(1), the one extracted above, uses the phrase 'damage sustained' followed by the phrase 'by reason of the acquisition injuriously affecting .... his earnings'. Therefore, loss of earnings is a factor that could be taken into consideration by the Court while adjudicating a reference under Section 18. While the loss of earnings suffered after the notification under Section 4(1) is a factor in-built in the reference itself, the loss of earnings suffered before the issue of notification may have to be specifically referred by the Collector for adjudication. This is for the reason that the Reference Court gets jurisdiction only in respect of matters referred to it under Section 18 or 30 of the Act by the Land Acquisition Officer. The Civil Court cannot widen the scope of its jurisdiction or decide matters which are not referred to it (Prayag Upnivesh Awas Evam Nirman Sahkari Samiti Ltd. v. Allahabad Vikas Pradhikaran : 2003 (5) SCC 561).
53. Therefore the law on the point can be summarised as follows:
(a) Where possession of the land is taken without the initiation of any proceedings, it would be open to the land owners to approach a Civil Court both for recovery of possession and for damages for use and occupation.
(b) If after taking possession, proceedings for acquisition are initiated, it may be open to the land owner to continue to prosecute the suit, with regard to the relief of damages for use and occupation, from the date of taking possession till the date of publication of notification. However, the prayer for recovery of possession and the prayer for damages for use and occupation for the period subsequent to the date of publication of the notification, cannot be prosecuted after the publication of the notification under Section 4(1).
(c) If after taking possession, proceedings for acquisition are initiated, it may be open to the land owner, at the time of seeking a reference under Section 18, to request the Collector to include in the terms of the reference, the question relating to damages for use and occupation for the period from the date of possession till the date of notification. The Court would then be obliged to adjudicate this issue.
(d) If possession had been taken in pursuance of a notification under Section 4(1), but the proceedings for acquisition either get lapsed or get quashed, compelling the initiation of fresh proceedings, the Collector himself may determine the compensation payable for the period from the date of possession till the date of the fresh notification, by invoking the power under Section 48(2). By virtue of Section 48(3), the determination made by the Collector under Section 48(2), could also become the subject matter of a reference under Section 18.
54. Since the above propositions emerge broadly out of the provisions of the Act as well as a catena of decisions, we are obliged, as a consequence, to remit the matter back to the District Collector, for an enquiry to determine the damages for use and occupation. But we do not propose to do so, for the following reasons:
(a) The possession of the land in these cases, was taken way back in the year 1983 in pursuance of a first notification and after it lapsed, a fresh notification was issued in 1991. A period of 26 years has now passed from the date on which the respondents lost possession of the property. Therefore it will cause severe hardship to make the parties, after 26 years, to go back to square one, get the question adjudicated by the Land Acquisition Officer and then have a reference made to the Court under Section 18.
(b) In the memorandum of grounds of appeal, the appellants have not raised any ground with regard to the validity of the judgment of the Referring Court, granting interest from the date of possession in 1983 till the date of notification in 1991. The appellants also did not seek any leave under Order 41, Rule 2, CPC. But we have taken up this issue, in view of the fact that the Referring Court had relied upon a decision of the Division Bench of this Court in S. Balasubramanian v. Land Acquisition Officer 2001 (2) CTC 519. But at the time when the Division Bench rendered the above decision, there were conflicting views on the issue, in three decisions of the Supreme Court viz., (i) Shree Vijay Cotton and Oil Mills (ii) Budh Singh and (iii) Mathapathi Basavannewwa. The conflict was resolved by a larger Bench in R.L. Jain case only in 2004. Therefore a clarification was found necessary.
(c) At the time when the appeals were taken on file in the year 2004, interim orders were passed on 2.7.2004, directing the appellants to deposit 25% of the decree amount. On 29.9.2005, a Division Bench passed further orders in CMP Nos. 5960 to 5964 of 2005, directing the appellants to deposit a further amount of 25% of the decree. The respondents were permitted to withdraw the amount so deposited, after furnishing security. The respondents have thus withdrawn about 50% of the amount decreed by the Court below. Therefore a resolution of the dispute here and now, is more prudent than a remand on a single issue.
55. Now coming to the quantum of damages for use and occupation, to be awarded to the respondents, for the period from 1983 to 1991, it is seen from the records that no evidence was let in by the parties regarding the income derived from the lands. Therefore the only method for determining the notional loss of income, is to adopt the method of calculating the rate of return on investment. Since we have found the market value of the land in October 1991 to be Rs. 7,060/- per cent, the market value in August 1983 (when possession was taken) could be taken to be about Rs. 3,300/-, by applying the depreciated method of valuation. On this market value, which in effect, would be the value of the investment, a rate of return of 12% per annum could be applied, since the period in question is 8 years. In other words, the damages for use and occupation, for the period from 17.8.1983 to 25.10.1991, is fixed at 12% per annum on Rs. 3,300/- per cent.
56. In the result, all the appeals are allowed and the judgment and decree of the Fast Track Court-I, Tirunelveli, dated 17.10.2003 in LAOP Nos. 39, 69, 70, 71 and 72 of 2002 shall stand modified to the following effect:
(a) The respondents are entitled to a compensation of Rs. 7,060/- per cent, for the lands acquired from them.
(b) On the compensation as fixed above, the respondents are entitled to solatium at 30% and interest, as per the provisions of the Act, on both the compensation and the solatium.
(c) The respondents are also entitled to damages for use and occupation of the property at the rate of 12% per annum, on a value of Rs. 3,300/- per cent, for the period from 17.6.1983 to 25.10.1991.
(d) The appellants shall work out the actual amount payable, on the above terms and find out if the money deposited by them and withdrawn by the respondents in pursuance of the interim orders passed in these appeals, is in excess or in deficit. If the money already deposited by the appellants is in deficit, the appellants shall deposit the shortfall within one month. If the money already deposited by the appellants and withdrawn by the respondents is in excess, the respondents shall deposit such excess in the Court below within one month.
(e) There will be no order as to costs in these appeals.