Holding

When possession of land is taken before the publication of the notification under Section 4(1), the owner is entitled to the additional amount under Section 23(1‑A) at 12% per annum from the date of taking possession.

Summary

The Assistant Commissioner, GADAG Sub‑Division appealed against a decision that land owners were entitled to additional compensation under Section 23(1‑A) of the Land Acquisition Act, 1894. The land was taken into possession on 23‑Jan‑1971, the notification under Section 4(1) was published on 2‑Aug‑1994, and the award was made on 15‑Jan‑1986. The State argued that the additional amount of 12% per annum should commence only from the date of the notification, not from the earlier possession date. The Supreme Court held that when possession is taken before the notification, the owners are entitled to the additional amount from the date of taking possession, as the provision aims to mitigate hardship caused by delayed awards. The Court emphasized a purposive interpretation of the phrase “whichever is earlier” and dismissed the appeal.

Issues considered

Whether the additional amount under Section 23(1‑A) of the Land Acquisition Act, 1894 is payable from the date of taking possession when possession precedes the publication of the notification under Section 4(1).
How the phrase “whichever is earlier” in Section 23(1‑A) should be interpreted in the context of delayed acquisition proceedings.

Legislation cited

Land Acquisition Act, 1894s. 17(4), s. 23(1-A), s. 4(1)

Subjects

Land acquisitionAdditional compensationSection 23(1‑A)Possession before notification12% per annumStatutory interpretationHardship mitigation

Judgment

,.
.,.
THE ASSISTANT COMMISSIONER, A
· GADAG SUB-DIVISION, GADAG
v.
MATHAPATHI BASAVANNEWWA AND ORS.

AUGUST 17, 1995
B
[K. RAMASWAMY AND B.L. HANSARIA, JJ.]

Land Acquisition Act, 1894 :

Section 23(1-A}-Lands-Acquisition of-Possession taken over prior
to publication of notification under s.4( 1}-Period to be reckoned for payment
c
of additional amount-Held, where possession was taken long before publi-
cation of notification under s.4( 1) and award made subsequently, landowner
would be entitled to payment of additional amount at 12 per cent per annum
of market value from date of taking possession.
D
. Certain lands of the respondents were acquired under the Land
Acquisition Act, 1894. The possession was taken on 23.1.1971 whereas the
notification under s.4(1) of the Act was published on 2.8.1994 and the
award was made by the Land Acquisition Officer .on 15.1.1986.

In the appeal before this Court filed by the State, it was contended E
by the appellant that in view of provisions of s.23(1- A) of the Act, the
land-owners would not be entitled to additional amount at 12 per cent
annum of the compensation commencing from the date of taking posses•
sion till the date of publication of the notification under s.4(1).

Dismissing the appeal, this Court F

HELD : 1.1. Possession of the land having been taken before publi-
cation of Notification under s.4(1) of the Land Acquisition Act, 1894, which
has never been questioned by the land owners, they, by necessary implica-
tion, are entitled, under s.23(1-A) of the Act, to payment of additional
G
amount at 12 per cent annum of market value from the date of taking
possession. (810-D]
....
1.2. The object of introducing s.23(1-A) is to mitigate the hardship
caused to the owner of the land, who has been deprived of the enjoyment of
the land by taking possession from him and using it for the public purpose, H
807
808 SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R.

A because of considerable delay in making the award and offering payment
thereof. The additional amount at 12 per cent per annum was intendea to be ·
paid as compensation from the date of taking possession. [809-D-E; F]

13. Strict construction of the provisions of s.23 (1 ·A) of the Act leads
to unjust result, hardship to the owner and defeats legislative object.
B Where possession was taken long before publicatio';l of the notification
under s.4(1) but the award is subsequently made and meanwhile the owner
has been deprived of enjoyment of his property, the owner would be
entitled to the compensation from the date of taking possession till date
of the award. The expression ''whichever is earlier" has to be construed in
c that backdrop and the claimant would be entitled to additional amount
from the date of taking possession. [809-G· H, 810-A]

CIVIL APPELLATE JURISDICTION: Special Leave Petition (C)
No. 17885 of 1995.

D From the Judgment and Order dated 17.1.95 of the Karnataka High
Court in C.P. No. 59 of 1995.

K.R Nagaraja for the Petitioner.

The following Order of the Court was delivered :
E
An interesting question has been raised by Shri Nagaraja, learned
counsel for the Petitioner, in this case. ·,

The admitted facts are that the petitioner had taken possession of
the lands on 23.1.1971, but the notification under s.4(1) of the Land
F Acquisition Act (for short, 'the Act) was published in the Gazette on
2.8.1984. The award came to be made by the Land Acquisition Officer on
15.1.1986. The question is from what date the respondents-owners are
entitled to the benefit of s.23(1-A) of the act as amended by Act 68of1984.

Section 23 (1-A) reads thus:
G
"23(1-A): In addition to the market value of the land, as above
provided, the Court shall in every case award an amount calculated
at the rate of twelve per centum per annum on such market value
for the period commencing on and from the date of the publication
H of the notification under Section 4, sub-section (1), in respect of
ASSTI. COMMR. GADAG v. M. BASAVANNEWWA 809

such land to the date of the award of the Collector or the date of A
taking possession of the land whichever is earlier." (emphasis
supplied)

Learned counsel contended that conjoint reading of the dates of
notification and making of award would connote that taking possession B
referable under the expressions "commencing on and from the date of
publication of the notification" and "whichever is earlier" would be relatable
to the date of the notification published under s.4(1) of the Act and the
date of passing of the award by the Collector and not anterior to the date
of publication of the notification under s.4(1). Therefore, the owners of the
land are not entitled to additional amount at 12 per cent per annum of the C
compensation commencing from the date of taking possession till date of
publication of the notification under s~l). We find no force in the
contention.

The object of introducing Section 23(1-A) is to mitigate the hardship D
caused to the owner of the land, who has been deprived of the enjoyment
of the land by taking possession from him and using it for the public
purpose, because of considerable delay in making the award and offering
payment thereof. To obviate such hardship, Section 23(1-A) was intro-
duced and the Legislature envisaged that the owner of the land is entitled
to 12 per cent per annum additional amount on the market value for a E
period commencing on and from the date of the publication of the notifica-
tion under s.4(1) of the Act in respect of such land up to the date of the
award of the Collector or the date of taking possession of the land,
whiChever is earlier. At times after publication of the notification under
s.4(1), by invoking power of urgency under s.17(4), possession is taken F
before making the award. The additional amount at 12% per annum was
intended to be paid as commendation from the date of taking possession.

But strict construction leads to unjust result, hardship to the owner
and defeats legislative object. Take case like one in hand. Possession was
taken long before publication of the notification. In the meanwhile the G
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 compensa-
tion from the date of taking possession till date of the award, thought
possession was taken before the notification under s.4(1) was published. H
A
810 SUPREME COURT REPORTS [1995) SUPP. 2 S.C.R.

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.

In this case, since advance possession was taken before the publica-
tion of notification under s.4(1), which was never questioned by the owners
B in a court of law, the claimants, by necessary implication are entitled to the
payment of the additional amount by way of compensation from the date
of taking over the possession for loss of enjoyment of the land. A different
situation may arise where the claimants themselves may question the
notification and its invalidity is upheld by the court. Thereunder, the
C claimants may not be entitled to the additional compensation since they
are not willing to surrender the possession under the notification and the
state did not in law come into possession under the notification referred
to in 23(1A).

Therefore, we are of the considered view that though the notification
D under s.4(1) was issued after taking possession of the acquired land from
the owners of the land, the owners of the land would be entitled, in the
case at hand, to additional amount at 12 per cent per annum of market
value from the date of taking possession though notification under s.4(1)
was published later.

E The petition is, therefore, dismissed.

R.P. Appeal dismissed.