1. These appeals arise out of a batch of references made to the Court under Section 18 of the Land Acquisition Act. The lands acquired, thirty-seven and odd acres in extent, form a block of territory between the South Indian Railway and the river Cauvery near Trichinopoly, and have been acquired for the purpose of making a new bund in the place of the old flood bank which was washed away by the serious flood in 1924. The lands are of the same quality throughout, that is to say, single crop land. The notification under the Act was made on 20th October, 1925, and that is the date for determining the market value of the land. The claimants put the value at Rs. 17-8-0 for each cent of land. The acquisition Officer awarded Rs. 12 for each cent and the Court has given Rs. 16 for each cent.
2. [Their Lordships then discuss the evidence re value and award compensation at Rs. 15 a cent.]
3. A further question is raised with regard to six per cent interest given by the Subordinate Judge as compensation for the period of occupation by the Public Works Department Officers prior to the award, that is from 16th January, 1925 to 31st December, 1927. Urgent possession was required, and the consent of the owners obtained. The two sections of the Act which make provision for Government taking possession are : Section 16, which says that the Collector may take possession of the land after the award is made; and Section 17, which says that in cases of urgency the Collector may take possession even before the award has been made. Sub-Section (3) of Section 17 makes provision for compensation to be paid when such urgent possession is taken. It requires that compensation for the standing crops and trees (if any) on the land and for any other damage sustained by sudden dispossession shall be offered to the parties interested and, in case such offer is not accepted, the value of the crops and trees and the amount of such other damages shall be allowed for in awarding compensation for the land. But the facts of this case do not exactly fall under Sections 16 and 17.
4. We have however been referred to Valldbhdas Naranji Development Officer, Bandra (1929) L.R. 56 IndAp 259 : 53 Bom. 589 : 57 M.L.J. 139 (P.C.) which we think furnishes a precedent for the award of interest by way of compensation in circumstances which are very similar to the present. It was there said:
Their Lordships agree that the justice of the case was met by holding that the appellant was entitled to compensation for the occupation of the lands by the officials before the notification of November 4, 1920, which, as before stated, was awarded in the form of interest on the value of the land computed from the date when the Government took possession.
5. As pointed out in Inglewood Pulp and Paper Co. v. New Brunswick Electric Power Commission (1928) A.C. 492 the right to receive interest takes the place of the right to retain possession. We think that the principle of those cases can be applied to the present one.
6. Section 34 of the Act says that the amount of compensation, if not paid on or before taking possession of the land, shall carry interest at the rate of six per cent per annum from the time of taking possession until the compensation money is paid. No doubt Section 34 contemplates an award having been made. But the foundation of the section is that when compensation is payable and has not been paid, interest for nonpayment must be given from the date of taking possession. We think that the lower Court was right in awarding six per cent interest, the rate fixed by Section 34, from the date on which the Government Officers took possession.
7. The appeal is therefore allowed in part with regard to the rate of compensation awarded; it will be reduced from Rs. 16 for each cent to Rs. 15 for each cent. The memoranda of objections are dismissed without costs. The Government will pay half the costs of the appeal in the cases where memoranda of objections have been filed, but in the other two cases they will pay full costs to the respondents.