Holding

The appellants are entitled to simple interest at the rate of 18% per annum from 31 August 2000 until actual payment of the compensation.

Summary

The Agra Development Authority (respondent No.2) took forcible possession of the appellants' land on 31 August 2000 without invoking the provisions of the Land Acquisition Act. The appellants filed a civil suit for injunction, and the court ordered the authority to pay compensation of Rs.17,84,974.50 within two months, an undertaking that was not fulfilled. After a delay of one year and five months the authority issued a cheque, which the appellants refused, leading to the amount being deposited in the civil court without interest. The High Court allowed the appellants to withdraw the principal but denied any claim for interest on the delayed payment. On appeal, the Supreme Court held that the appellants were wrongly deprived of the beneficial use of their money and awarded simple interest at 18% per annum from the date of possession until actual payment, also permitting withdrawal of the deposited sum without security. The appeal was disposed in favour of the appellants with no costs awarded.

Issues considered

Whether the land owners are entitled to interest on compensation delayed beyond the period stipulated in the authority's undertaking.
Whether the deposit of the compensation amount in the civil court, which bears no interest, deprives the owners of the beneficial use of their money.

Legislation cited

Land Acquisition Act, 1894

Subjects

forcible possessionland acquisitioncompensationinterest on delayed paymentinjunctioncivil courtundertakingsimple interestSupreme Court

Judgment

..
RAKESH KUMAR JAIN AND ANR. A
v.
STATEOFU.P. THR. COLLECTOR AND ANR.

JANUARY 5, 2007

[DR. AR. LAKSHMANAN AND ALT AMAS KABIR, JJ.] B

Interest: Acquisition of land-Authorities taking forcible possession
' J of claimants' land-Without resorting to procedure under Land Acquisition
Act-Suit for injunction by land owners-Authorities giving an undertaking
in civil court to pay compensation within stipulated period-Amount C
deposited in court after about I~ years of the stipulated date-Claim by
land owner for interest-Held, claimants were wrongly deprived ofbeneficial
use of their money-They are entitled to I 8% simple interest from the date
of possession of land till the date of actual payment.
D
Respondent no. 2, Agra Development Authority, on 31.8.2000, took
forcible possession of the land of the appellants, who in turn filed a suit for
injunction. Undisputedly provisions of Land Acquisition Act were not
resorted to. In the civil court respondent no. 2 gave an undertaking that it
would pay compensation to the land-owners within the stipulated period.
However, respondent no. 2, one year and five months thereafter, offered to E
the land-owners the cheque, which the latter refused to accept as the same
was not tendered according to the undertaking. Thereafter the money was
deposited in the civil court. In land owners' writ petition, the High Court
permitted them to withdraw the entire amount but rejected their claim for
interest on delayed payment of compensation. Aggrieved, the land owners F
filed the present appeal.

Disposing of the appeal, the Court

HELD: The appellants have wrongly been deprived of the beneficial
G
use of their money. Therefore, they are entitled to interest at the rate of
18% p.a. from 31.8.2000, i.e. the date the possession of the land was taken,
till the date of actual payment. In the meanwhile, the appellants are at
liberty to withdraw the amount which is in deposit with the civil court
without furnishing any security. (Para 4] (212-B-CJ
H
209
210 SUPREME COURT REPORTS (2007] I S.C.R.

A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 64 of2007. '-
I
/...,

From the Judgment and final Order dated 20.10.2005 of the High Court
of Judicature at Allahabad in Civil Misc. Writ Petition No. 15903/2002.

Rajiv Dutta, M.P. Shorawala, Shashi Kiran, Jyoti Saxena and Vipin K.
B Saxena for the Appellants.

· Rakesh Uttamchandra Upadhyay, T.N. Singh, Kamlendra Mishra and
Rajeev Kumar Dubey for the Respondents. ·

c The Judgment of the Court was delivered by

DR. AR. LAKSHMANAN, J. : Leave granted.

2. Heard Mr.Rajiv Dutta, learned senior counsel appearing on behalf of
the appella:its and Mr.Rakesh Uttamchandra Upadhyay, learned counsel
..
D appearing on behalf of the respondentNo.2 (Agra Development Authority).

3. This appeal is . directed against the final judgment and order .: -!·

dt.20.10.2005 passed by the High Court of Judicature at Allahabad in Civil
Misc. Writ Petition No. l 5903/2002 whereby the High Court has dismissed the
E Writ Petition filed by the present appellants/land owners. The appellants
were the owners of land ofKhasra No.11 lA and l 12B measuring 7-6 Bighas
situated at Mauza Lakhanpur Tehsil and District Agra. The respondent No.2
without following the procedure for acquiring the land under the Land
Acquisition Act took forcible possession of land in question on 31.08.2000.
F It is not in dispute that respondent No.2 had not resorted to the provisions
of Land Acquisition Act. Being aggrieved by the arbitrary action of
respondent No.2, the appellants filed an Original Civil Suit No.358 of 2000
before the learned Civil ·Judge (Junior Division), Agra for injunction to

G
restrain the respondent No.2 from encroaching and trespassing or taking, in
any manner, the possession of the land, by raising any construction of
laying road on the land ofthe appellants. The trial court issued notice to
-
.the resp(mdent Nos. l and 2 ..· After the service of notice, the. Civil Court
passed an order .of injunction .for maintaining .the status quo. with respect
to the land in question and the said order was extended from time to time.
Since an interim order was passed, the respondent No.~ gave an undertaking
H to pay compensation to the appellants for their land of Khasra Plot No.111
RAKESH KUMAR JAIN v. STATE OF U.P. THR. COLLECTOR [LAKSHMANAN, J.] 21 l

- . at Mauza Lakhanpur Tehsil and Distril:t Agra and that the said compensation · A
shall be paid within a period of two months from the date of the said
undertaking i.e. 31.08.2000. This undertaking was filed before the Vth
Addi.Civil Judge, Junior Division, Agra in Suit No.358 of 2000 which is
marked as Annexure P-5 in the SLP paperbook. The Vth Addi.Civil Judge,
Junior Division, Agra, on the basis of the above undertaking passed an
order on 02.09.2000 disposing of the injunction application on the basis of
B
the undertaking given by the respondent No.2 to pay compensation to the
appellants. According to the second respondent, the amount of
compensation comes to Rs.17,84,974.50 which they have calculated@ 225
per sq.meter. The said amount, admittedly, as per the undertaking, was not
deposited within two months. However, a cheque for the amount of c
Rs.17,84,974.50 dt.14.02.2002 drawn on Union Bank of India, Agra was
issued to the appellants. However, the appellants refused to the receive
the same since the said amount was not tendered as per the undertaking.
While tendering the Cheque dt.14.02.2002, the respondent No.2 called upon
the appellants to convey their consent for withdrawal of Suit No.358/2000 D
and also signifying their consent in writing that they will not prefer any
other claim in this regard so that the payment made by the cheque can be
given to them. Thereafter, the money was deposited with the Vth Addi.Civil
Judge, Junior Division, Agra. The amount deposited is still lying in the said
court.
E
4. The High Court while disposing of the Writ Petition filed by the
owners of land permitted the appellants herein to withdraw the entire amount
including interest, if any, which may have accrued thereon if the same had
been kept in some interest bearing account on furnishing the certified copy
of the said order before the court concerned. The High Court has also F
observed that insofar as the claim of the appellants herein regarding interest
on delayed payment is concerned, the same has no basis as the Agra
Development Authority (respondent No.2) had prepared the cheque and
offered the same to the appellants herein within the stipulated period and
had deposited the said amount with the Civil Court in the pending suit.
G
We have carefully perused the Annexures and the judgment rendered
by the High Court and also heard the arguments advanced by learned
counsel for the parties. In our opinion, the 'findings recorded by the High
Court in regard to the claim of interest by the appellants is absolutely
incorrect. Though the Agra Development Authority (respondent No.2) had H
212 SUPREME COURT REPORTS [2007] l S.C.R.

agreed to deposit the money within two months, they had not done so. ,_
A l

Admittedly, they had issued a cheque after one year and five months and
when the cheque was refused to be received by the land owners, they
deposited the same in the Civil Court which does not carry any interest.
Admittedly, the land owners have been denied the beneficial use of the
money. In our opinion, the appellants have wrongly been deprived of the
B beneficial use of their money. Therefore, they are entitled to interest. We,
therefore, set aside the order passed by the High Court and award simple
interest at the rate of 18% p.a. The possession of the land was taken on
31.08.2000. Therefore, the Agra Development Authority (Respondent No.2)
.
is liable to pay simple interest@ 18% on the sum of Rs.l 7,84,974.50 from
c 31.08.2000 till the date of actual payment. In the meanwhile, the appellants
are at liberty to withdraw the sum ofRs.17,84,974.50 which is in deposit with
the Civil Court without furnishing any security and on production of a copy
of this Order. The said court is directed to refund the said amount to the
appellants on production of copy of Order of this Court.

D
5. We direct that the Agra Development Authority (respondent No.2)
shall not take any further time and pay the interest on or before 10.02.2007.
.,,/
6. We hope and trust that the Agra Development Authority (respondent
No.2) shall strictly and punctually obey this Order.
E
7. The appeal stands disposed of in the above terms. No costs.

RP. Appeal disposed of.