Interest under Land Acquisition Act

In order to decide the question whether the provisions of S. 34 of the Act regarding payment of interest would be applicable to a case where possession has been taken over prior to issuance of notification under S. 4(1) of the Act it is necessary to have a look at the Scheme of the Land Acquisition Act. Acquisition means taking not by voluntary agreement but by authority of an Act of Parliament and by virtue of the compulsory powers thereby confirmed. In case of acquisition the property is taken by the State permanently and the title of the property vests in the State. The Land Acquisition Act makes complete provision for acquiring title over the land, taking possession thereof and for payment of compensation to the landowner. The scheme of the Act does not contemplate taking over of possession prior to the issuanceof notification under S. 4(1) of the Act and if possession is taken prior to the said notification it will dehors the Act. It is for this reason that both Ss. 11(1) and 23(1) enjoin the determination of the market value of the land on the date of publication of notification under S. 4(1) of the Act for the purpose of determining the amount of compensation to be awarded for the land acquired under the Act. These provisions show in unmistakable terms that publication of notification under S. 4(1) is the sine qua non for any proceedings under the Act.

The expression "the Collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited" occurring in S. 44 should not be read in isolation divorced from its context. The words "such possession" and "so taking possession" are important and have to be given meaning in the light of other provisions of the Act. "Such compensation" would mean the compensation determined in accordance with other provisions of the Act, namely, Ss. 11 and 15 of the Act which by virtue of S. 23(1) mean market value of the land on the date of notification under S. 4(1) and other amounts like statutory sum under sub-sec. (1-A) and solatium under sub-sec. (2) of S. 23. The heading of Part II of the Act is Acquisition and there is a sub-heading "Taking Possession" which contains Ss. 16 and 17 of the Act. The words "so taking possession" would therefore mean taking possession in accordance with Ss. 16 or 17 of the Act. These are the only Sections in the Act which specifically deal with the subject of taking possession of the acquired land. Clearly the stage for taking possession under the aforesaid provisions would be reached only after publication of the notification under Ss. 4(1) and 9(1) of the Act. If possession is taken prior to the issuance of the notification under S. 4(1) it would not be in accordance with S. 16 or 17 and will be without any authority of law and consequently cannot be recognised for the purposes of the Act. For the parity of reasons the words "from the date on which he took possession of the land" occurring in S. 28 of the Act would also mean lawful taking of possession in accordance with S. 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 S. 4(1) of the Act which is dehors the provisions of the Act.

In a case where the land owner is dispossessed prior to the issuance of preliminary notification under S. 4(1) of the Act the Government merely takes possession of the land but the title thereof continues to best with the land owner. It is fully open for the land owner 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. It will be just and equitable that the Collector may also determine the rent or damages for use of the property to which the land owner is entitled while determining the compensation amount payable to the landowner for the acquisition of the property. The provision of S. 48 of the Act land support to such a course of action. For delayed payment of such amount appropriate interest at prevailing bank rate may be awarded.

(See, R. L. Jain (D) by LRs., Appellant v. D. D. A. and others AIR 2004 SC 1904 (FB) wherein Asst. Commr. v. Mathapati,AIR 1995 SC 2492 : 1995 AIR SCW 3668 was overruled and Spl. Tehsildar v. Jubbar, AIR 1995 SC 762 was approved.)