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Nagar Palika Vs. Radhey Shyam and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtRajasthan High Court
Decided On
Case NumberS.B. Civil Execution First Appeal No. 15 of 1975
Judge
Reported in1975(8)WLN449
AppellantNagar Palika
RespondentRadhey Shyam and anr.
Cases Referred and State of Madhya Pradesh v. Man Mohan Swaroop
Excerpt:
.....land acquisition act, 1953 - section 31 & 34--owner is entitled to interest at 4% on unpaid compensation when possession of land has been taken.;the provision of section 31 of the act is mandatory in nature and, therefore, when compensation has not been paid, tendered or deposited by the collector before taking possession of the land then by virtue of this provision of section 31 of the act, it becomes necessary for the collector to pay interest at the rate of 4 percent per annum since the amount of compensation was actually paid to the person entitled.;the awarding of interest at the rate of 6 percent per annum is therefore obviously illegal.;(b) rajasthan land acquisition act 1953 - section 28--provisions section 28 are not mandatory--no interest on enhanced compensation..........acquisition officer the owner of the land got case referred under section 18 of the act to the district judge, paragraph to get the proper compensation determined by him. the learned judge by his judgment dated 17th decemder. 1969 in misc case no. 9 of 1969 modified the award of the land acquisition officer and enhanced (be compensation by rs. 4540/. during the pendency of the proceedings before the distaict judge, the collector took possession of the land under section 16 of the act on 29th june, 1960 from respondent no. 1. after the judgment of the district judge the municipal board preferred an appeal in this court and obtained stay order restraining the respondent no. 1 to realise the amount of compensation from the municipal board, chittorgarh, the appeal of the municipal board.....
Judgment:

V.P. Tyagi, J.

1. This is an appeal of Nagar Palika Chittorgarh against the order of the District Judge, Partabgarh (Camp Chittorgarh) dated 24th March, 1975 whereby the learned Judge allowed the interest on the entire compensation to be realised from she appellant.

2. The facts giving rise to this appeal are in a out-shell as follows : The land belonging to the respondent was acquired under the provisions of the Rajasthan Land Acquisition Act, 1953 (hereinafter cased 'the Act') for the Municipal Board, Chittorgarh. The Land Acquisition Of seer after hiving undergone all the formalities of use Act de e mined the composition on 28th August, 1959. The amount of compensation fixed by him was Rs. 4772 50 Having felt aggrieved by the decision of a e Land Acquisition Officer the owner of the land got case referred under Section 18 of the Act to the District Judge, Paragraph to get the proper compensation determined by him. The learned Judge by his judgment dated 17th Decemder. 1969 in Misc case No. 9 of 1969 modified the award of the Land Acquisition Officer and enhanced (be compensation by Rs. 4540/. During the pendency of the proceedings before the Distaict Judge, the Collector took possession of the land under Section 16 of the Act on 29th June, 1960 from respondent No. 1. After the judgment of the District Judge the Municipal Board preferred an appeal in this Court and obtained stay order restraining the respondent No. 1 to realise the amount of compensation from the Municipal Board, Chittorgarh, The appeal of the Municipal Board was dismissed by this Court on 4th March, 1970. It appears that the Municipal Board deposited with the Collector the amount of compensation determined by the Land Acquisition Officer but that amount was neither paid nor offered o the owner of the land, after the matter was finally decided by this Court the owner of file land took of the execution proceedings on 25th March, 1970 demanding Rs. 9217/ as the amount of compensation and Rs. 6486/-as interest on that amour, and Rs. 17/- as cost a warded by this Court. The Municipal Board paid on 23rd Mien, 1973 Rs. 9217/- to the respondent No. 1 but raised a contest for the amount of interest demended by the owner of the land on the amount of compensation proceedings. The learned Judge by his impugned order allowed the owner to realise the amount of interest at Rs. 6/- percent pi r annum from the Municipal Board and it is therefore in these circumstances that the present appeal has been filed by the appellant.

3. On an application filed by the Municipal Board the Collector was made a party IO the execution proceedings in the reply filed by the Collector it was averred that since a stay order was obtained from the High Court in the appeal filed by the Nagar Palika on 21st April, 1961, the amount of compensation was not paid to the owner of the land.

4. The question which has been agitated before this Court by learned Counsel far the appellant is that no interest was awarded either by the Collector or by the District Judge on the amount of compensation and, therefore, the owner is not (sic) to realise any interest on the compensation amount from the appellant It was also urged that the appellant after the quantum of compensation was determined by the Collector, deposited the amount with the Collector and, therefore, the appellant cannot be said to be in default and hence no interest could by allowed on that amount which was already deposited by the Nagar Pilika with the Collector.

5. learned Counsel for respondent No. 1 on the other hand contended that, the provisions of Section 34 of the Act are mandatory in nature and even if no direction is issued by the authority determining the compensation to pay interest to the owner on the amount of the compensation, the Court cannot deny the interest to the owner as the wordings of Section 34 carry a clear mandate that in any case if the amount of compensation is not paid to the owner of the land and he has been deprived of the possession of the land he is entitled to get the interest on the amount of compensation so determined by a competent authority under the Act. As regards interest on the enhanced compensation determined by the District Judge the argument of the earned Counsel for the respondent No. 1 is that Section 28 may be construed as a mandatory provision of the Act if it is read in the cot text of the entire scheme of the Act and. therefore, if the owner is deprived of the amount of compensation he is entitled to go interest under Section 28 of the Act even though no such direction was issued by the District Judge while fixing the amount of compensation under Section 18 of the Act.

6. In order to determine the contentions of the parties we shall have to examine the scheme of the Act with special reference to the duty of the Collector regarding the payment of compensation to the owner of the land,

7. Under Section 16 of the Act the Collector is empowered to take possession of the land only after he has made award under Section 11. As soon as the possession of the land is taken by the Collector the land vests absolutely in the State Government free from all encumbrances. It is at this stage that the owner of the land loses his ownership in that, land and also its possession Section 31 of the Act cases a duty on the Collector that when he sward is made under Section 11. he shall tender payment of the compensation and costs, if any, awarded by him to the persons entitled there to according to the award, and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next sub-section Sub-section (2) deals with those contingencies when the amount of compensation cannot immediately be paid to the person entitled to receive it and it lays down that if the person entitled to receive such compensation does not give his consent to receive it or if there be no person competent to alienate the land, or if there be any dispute as to the title to receive the compensation or as to the apportionment of it, the Collector shall deposit the amount of compensation and costs, if any, in the Court to which a reference under Section 18 is to be submitted.

8. Section 31 of the Act makes it clear that as soon as the award is made it is the duty of the Collector to tender payment of the compensation to the person entitled to receive it and if that person for some reason refuses to receive it then the Collector is under a duty to deposit that amount in the court where reference can be made under Section 18. In this case such court is the court of District Judge of the Chirography district. It is admitted by the Collector on behalf of the State respondent No. 2 that the amount of compensation determined by the land Acquisition officer was not tendered or paid to the respondent No. 1 not did he deposit that amount in the court or the District Judge, Partabgarb It is in this background that I have to examine the claim of interest of respondent No. 1.

9. Section 34 deals with the payment of interest and it reads as follows:

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 four percent per annum from the time of so taking possession until it shall have been so paid or deposited.

10. The wordings of this section are unambiguous and they cannot be interpreted in any other way except that the law has cast a duty on the Collector to pay interest to the person entitled to compensation at the rate of four percent per annum from the time of taking possession of the the land until the compensation is paid or deposited if the amount of compensation is not tendered or deposited with the District Judge under Section 31 of the Act. The provision of Section 31 of the Act is mandatory in nature and, therefore, when compensation has not been paid, tendered or deposited by the Collector before taking possession of the land then by virtue of this provision of Section 34 of the Act, it becomes necessary for the Collector to pay interest at the rate of 4 percent per annum since amount of compensation was actually paid to the person entitled.

11. Mr. Maheshwari argues that the interest at the rate 4 percent per annum must be awarded on the entire amount of compensation as determined by the Land Acquisition Officer and later on enhanced by toe District Judge. Mr. Bhansali however concedes that under the provision of sect; in 34, the Municipal Board is bound to pay interest on the amount of compensation determined by the Land Acquisition Officer which was deposited by the Municipal Board with the Collector to of paid to the owner of the land but that was not actually tendered and paid to respondent No. 1 but with regard to the amount of compensation enhanced by the District Judge his plea h that no int. rest can be claimed on such enhanced compensation unless a direction to from effect for issued by the District Judge at the time when the judgment was pronounced by him under Section 18 of the Act. In support of this view reliance was placed ay Mr. Bhansali on the provisions of Section 28 of the Act which lay down that, if the sum which, in the opinion of the Court, the Co lector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation the award of the Court may direct that the Collector shall pay interest on such excess at the rate of four percent per annum from the date on which he took possession of the land to the date of payment of such excess into Court.

12. According to Mr. Bhansali the discretion is given by the legislature by enacting Section 28 of the Act to the learned Judge giving an ward under Section 18 of the Act to give direction to pay the interest on the enhanced compensation at the rate of four percent per annum and if such direction is not issued then it will be taken that the court did not exercise its discretion vested in it by virtue of this provision of the Act. In this case it is admitted by both the parties that the learned District Judge, Partabgarb did not issue any direction with regard to the payment of interest on the enhanced compensation.

13. It is vigorously contended by Mr. Maheshwari that if the previsions of Section 28 are read along with the provision of Section 34 then no room for doubt is left that this provision is also mandatory and if no such direction is issued by the District judge while giving his award of enhanced compensation even then if will bear interest at the rate of four percent per annum. This controversy in my opinion cannot now be raised in view of the pronouncement of Supreme Court in Righubans Narain Singh v. The Uttar Pradesh Government, through Collector of Bijnor AIR 1967 SC 465 where the leaned Judges of the Supreme Court while asking into consideration the scope of Section 28 of the Act laid down as follows:

In its plain language the discretion that is conferred on the Court is whether in the given circumstances of a particular case the court should award interest or not. The words 'may direct' mean that it is discretionary on the part of the court to grant or refuse to grant interest.

14. In the present case award given by the District Judge under Section 18 of the Act is silent about the interest which means that the District Judge did not exercise his discretion in favour of the owner that the amount of compensation an determined by him shall bear interest at the rate of four percent per annum In view of this judgment of the Supreme Court, I cannot hold that the provisions of Section 28 are mandatory in nature and even if no direction was issued by the learned District Judge the amount of compensation would carry interest till it was paid to the owner.

15. The next argument in this connection advanced by Mr. Maheshwari is that the words in Section 34 'such compensation' also include the enhanced compensation determined under Section 18 and therefore, even if no direction is issued by the District Judge the interest at the rate of four percent per annum shall be calculated on the enhanced rate of compensation because interest on the amount of compensation determined by the Land Acquisition Officer as wall as by the District Judge shall be calculated from the date when the land was taken possession of by the Collector under Section 16. I regret I cannot accept ton contention of the learned Counsel. Section 34 appears in part V of the Act which deals with payment. Under the scheme of the Act the Collector has a right to take possession of the land acquired as soon as this compensation is determined by him under Section 11 and the same is either paid or offered to the person entitled to receive such compensation under Section 31. If the possession of the land is taken immediately after the determination of the compensation by the Collector then question of payment d enhanced compensation at that time would not arise as the enhanced compensation was determined much after the compensation was fixed by the Land Acquisition Officer and the possession was taken by the Collector. Therefore the expression 'such compensation' as used in Section 34 cannot include within its ambit that compensation which was not till then determined by the District Judge, I find support for this view from the very provision of Section 28 which provides that if the District Judge in the circumstances of a particular case desires that toe enhanced compensation should also bear interest then he will issue direction. If Section 34 is interpreted in the manner in when Mr. Maheshwari wants to interpret it then I think that there was no necessary to enact Section 28. The existence of a separate provision in the form of Section 28 in the Act' exclusively dealing with the interest on the enhanced compensation suggests that the provision of Section 34 would not automatically govern the contingency of awarding interest on the enhanced Compensation as determined under Section 18 of the Act. The expression such compensation' in Section 34, in my opinion, would mean as the amount of compensation which was then payable to the owner of the land of to the person entitled to receive it when he was actually dispossessed from his land by the Collector in (sic) of the proceedings taken under the Act. In this view of the matter only the amount of Rs. 4772.50 which was determined by he land Acquisition Officer shall carry interest at the rate of four percent per annum from the date when the respondent No. 1 was actually dispossessed from his land under Section 16 of the Act i.e. from 29th June, 1960 till 23nd March. 1973 when it was paid by the Municipal Board.

16. Mr. Maheshwari referred to certain authorities to support his view that his client is entitled to receive interest on the enhanced compensation but the ratio of the decision in Travancore-Cochin State v. Chacko Alexander and Ors. AIR 1956 T & C 121, Collector v. Habis Ullah Din and Ors. AIR 1967 J & K 44 and State of Madhya Pradesh v. Man Mohan Swaroop AIR 1966 MP 220, relied upon by Mr. Maheshwari have hardly any bearing on question posed for my determination in the case. It is true that Section 34 is mandatory in nature but that would entitle respondent No. 1 to claim interest only on Rs. 4772.50 and not on the amount of the enhanced compensation.

17. It is next contended that the District Judge in the execution proceeding taken out by respondent No. 1 awarded interest of the entire amount of compensation at the rate of 6 percent per annum which he was not competent to do. Learned counsel for the respondent No. 1 admits that he is entitled to get the interest at the prescribed rate of four percent per annum. The awarding of interest at the rate of 6 percent per annum is therefore obviously illegal.

18. The result is that the appeal of the appellant is partly allowed. The enhanced compensation i.e. the amount of Rs. 4540/- shall not bear any interest. The interest on Re. 4772 50 shall be circulated at the rate of 4 percent per annum from 29th June, 1960 upto 23nd March, 1973 when the amount of Rs. 9217/- was actually paid by the Municipal Board to Radhey Shyam in the executing court. The order of the learned Judge is accordingly modified. No order as to costs.


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