UNION OF INDIAversusBUDH SINGH AND ORS.

A                               UNION OF INDIA
                                         v.
                           BUDH SINGH AND ORS.

                                  JULY 27, 1995

B            [K. RAMASWAMY AND K.S. PARIPOORNAN, JJ.)

          Land Acquisition Act, 1894: Sections 4(1), 28, "34 and 48(2)

           Land Acquisition-cqmpensation-lnterest-Possession of land taken
C   prior to notification under section 4(1)-Power of Court to award interest for
    period prior to publication of notification-Award of interest@l8% from the
    date of taking possession held not justified-Held Court has no power to
    award interest in excess of the rate prescribed by Act-Principles of justice
    equity and good conscience cannot be extended for awarding interest contraty
    to the Principles of Act.
D
          The land belonging to the respondents-was taken over by the Punjab
   Armed Police on March IS, 1963 for construction of its headquarters for
   which compensation was also paid. On a suit filed by the respondent-land·
   owners State's possession of land was declared illegal on the ground that
E the acquisition was not under Land Acquisition Act, 1894 and the respon·
   dents were directed to refund the compensation. The State's appeal as well
  .as second appeal was dismissed. Thereafter a notification under section
   4(1) was published on November 16, 1984 and the compensation award was
   also passed. In execution the High Court ordered that in case of default
   of payment within stipulated time 18% interest should be paid to the
F respondents from the date the possession of land was taken over. In appeal
   to this Court on the question whether the respondent-landowners are
   entitled to interest at 18% per annum from March 15, 1963, the date on
   which possession was initially taken, till November 16, 1984, preceding the
   date on which the notification under section 4(1) was published:
G
          Allowing the appeal, this Court

          HELD : 1. The High Court was clearly in error in directing payment
    of interest at 18% per annum and that too, from the date of taking
    possession. The respondents are entitled to interest @9% per annum on
H   enhanced compensation from 16th October, 1984. [389·8]
                                         384
                           u.u.i. v. BUDH SINGH                           385

       2. The payment of interest under the Land Acquisition Act is square-      A
ly covered by the provisions of the Act. 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 landowner was deprived of the
enjoyment thereof. The Court has no power to impose any condition to pay         B
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         C
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. [386-G; 387-F-H; 388-A]

      Va/labhdas Naranji v. Development Officer Bandra, Indian Appeals
                                                                                 D
Vol. LVI, 259 and The Revenue Divisional Officer, Trichinopoly v.
Venkatarama Ayyar & Anr., ILR 49 Mad. 433 = AIR (1936) Mad. 199,
distinguished.

        State of Punjab v. Smt. Raminder Kaur, (1988) LACC 610, referred to.     E
     3. The Land Acquisition 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. [388-C]

        CIVIL APPELLATE JURISDICTION : Civil Appeal No.7413 of                   F
1995.

     From the Judgment and Order dated 21.7.93 of the Punjab &
Haryana High Court in C.R. No. 3389 of 1990.
                                                                                 G
        A. Jayaram, P. Parmeswaran and Y.P. Mahajan for the Appellants.

     Rajeev Dawan, K.R. Nagaraja, R. Santhana Krishnan and Mrs. B.
Rajani for the Respondents.

        The following Order of the Court was delivered :                         H
    386                    SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R.

A         Leave granted.

          This appeal by special leave arises from the order of the High Court
    of Punjab & Haryana dated July 21, 1993 made in Civil Revision No.
    3389/90. The facts are that possession of land measuring 81 kanals 3 marlas
    10 acres and 1 kanals 3 marlas was taken over by the Punjab Armed Police
B
    on March 15, 1963 for construction of its head quarters at Ajnala. Initially
    an amount of Rs. 14,719.79 was paid to the owner as compensation on
    March 9, 1965 as determined by the Revenue Authorities. Later, he laid
    the suit in the court of the Addl. Judge, Amritsar for recovery of its
    possession pleading that since the land was not acquired under the Land
c   Acquisition Act, 1894 (for short, 'the Act'), it was illegal. The suit was
    decreed on April 30, 1969. In execution thereof, the court passed an order
    directing the !'espondents to refund the amount of Rs. 14,719.79 received
    on March 9, 1965. The State carried the matter in appeal which was
    dismissed. The second appeal also ended in·dismissal. Then they initiated
D   the proceedings for the acquisition of the said land and the notification u/s
    4(1) of the Act was published on November 16, 1984 and an award
    thereunder has been passed. We are not concerned in 'this case regarding
    the legality of the award made by the reference court since, it had become
    fmal. But in execution of the decree, High Court passed an order that in
    the event of default in payment within the stipulated ·time, payment of
E   interest at 18% per annum from the date of taking possession be made.
    Since.that amount has not been paid with interest, the court has proceeded
    with execution and the High Court in the impugned order has affirmed the
    same. Thus this appeal by special leave.

F        The only question that arises for decision is whether the respondents-
   owners of the lands are entitled to interest at 18% per annum from March
   15, 1963, the date on which possession was initially.taken, till November
   15, 1984, preceding the date on which the notification under s.4(1) was
   published. It is a jurisdictional issue and the finding in this behalf fouches
  ·and trenches into the jurisdictional power of the court, acting under the
G Act regarding award of interest. The payment of interest under the Act is
   squarely covered by the provisions of the Act. The Government, while
   exercising its power of eminent domain, are entitled to have the notification
   under s.4 (1) published in the State Gazette. They are also entitled, in case
   of urgency, to exercise the power under s.17(4) of the Act and thereon .
H declaration under s.6 published and would issue notice to the owner of the
                         U.O.I. v. BUDH SINGH                           387

land under s.9. On expiry of 15 days thereof, the .Government is entitled to A
take possession from the owner. The award would be made under s.ll
thereafter. In case urgency clause under s.l7(4) was not invoked, the
procedure of inquiry under s.5A shall be gone through and thereafter
declaration under s.6 be made. The declaration gives conclusiveness to the
public purpose. After conducting an inquiry in Chapter III of the Act, the
Land Acquisition Officer makes the award under s.ll and gives notice to
                                                                             B
the owner under s.12(2) and he is entitled to take possession from the
owner of the land under s.16 and on deposit of the compensation makes
payment thereof under s.31 of the Act. In case, after taking possession, if
the amount is not paid, the provision is made for payment of interest under
s.34 of the Act which reads thus:                                            c
        "34. 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 centum per annum from the time of so D
        taking possession until it shall have been so paid or deposited.

       Under the proviso after the Amendment Act, if the amount is not
paid before 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       E
part thereof which has not been paid or deposited before the date of such
expiry.

      The other provision relevant for this purpose is s.28 of the Act, which
empowers the reference court or the High Court for awarding interest on         F
the enhanc~d compensation from the date of taking possession till date of
payment as referred to hereinbefore. 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          G
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 s.4(1) notification under the Act. The
parameter for initiation of the proceedings is the publication of the
notification under s.4(1) of the Act in the State Gazette or in an ap~          H
    388                    SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R.                ,.


A   propriate cases in District Gazette as per the local amendments. But the
    condition precedent is publication of the notification under s.4(1) in the
    appropriate gazette. That would give legitimacy to the State to take pos·
    session 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 s.48(2) of the Act,
B namely, that when proceedings under the Act were initiated and in the
    mid-stream 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
c   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.
D
            Sri Raje.ev Dhavan the learned senior counsel fairly concluded that
    in Vallabhdas Naranji v. Development Officer, Bandra, Indian Appeals vol.
    LVI 259, the Judicial Committee of the Privy Council had not decided the
    liability to pay interest by the Government for the period when possession
    of the land was taken prior to the publication of the notification under
E . s.4(1) of the Act. But, unfortunately, on the head note it was so stated that
    the State was liable to pay interest for the period prior to notification. This
    decision is of no assistance since there was no decision to pay interest for
    a period anterior to the issuance of the notification under s.4(1). In The
    Revenue Divisional Officer, Trichin.opoly v. Venkataram.a AY,Yar & Anr., ILR
F 49 Mad. 433 = AIR (1936) Mad. 199, the facts were that initially the
    railway station at Trichinopoly was established but due to floods it was
    washed away. Consequently, notification under s.4(1) was issued and pos-
    session was taken. The question was from what date the claimants would
    be entitled to the payment of interest. The learned judges on those facts
    assumed the exercise of power under s.17(1) and (4) and reswnption of
G possession was co-related to the exercise of power under s.17(4) of the Act.
    Accordingly the Court directed payment of interest from the date of taking
    possession. The facts are clearly distinguishable. The ratio is consistent
    with the scheme of the Act.

H          In, State of Punjab v. Smt. Raminder Kaur, (1988] LACC 610, notifica-
                         U.O.l. v. BUDHSINGH                           389

tion under s.4(1) was initially issued in 1968 and possession was taken A
which was stuck down by the Court and thereafter, fresh notification was
issued in 1973 and compensation was determined. The question therein was
whether the claimants would be entitled to the payment of interest from
the date of taking possession pursuant to the first notification. Since the
possession was taken in exercise of the power pursuant to the notification
under s.4(1), directed for payment of interest from the date of taking
                                                                               B
possession is also consistent with the scheme of the Act. Thus considered,
we are of the opinion, that the High Court was clearly in error in directing
payment of interest at 18% per annum and that too, from the date of taking
possession. The respondents are entitled to interest @9% per annum on
enhanced compensation from 16th October, 1984. The appeal is accord· c
ingly allowed. However, since the period of limitation for filing and suit for
damages for use and occupation by the State from March 15, 1963 to
November 15, 1984 is barred, though legally we cannot give any direction
for payment, it is open to the appropriate Government to consider the
same and do the needful to the claimants. No costs.
                                                                             D
T.N.A.                                                    Appeal allowed.