TMI Blog1967 (12) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 4(1) of the Act was published on 12-4-1956. The Land Acquisition Officer gave his award on 31-3-1958, whereby he assessed the value of the land at ₹ 8 per sq yard. he awarded 15 per cent solatium on the said amount and awarded interest on the compensation at 6 per cent from 30-11-1950 when the land was taken possession of by the Municipality till 31-3-1958, the date of award. The total compensation awarded was ₹ 16,044-80 . As the respondents herein requested that a reference be made under S. 18 of the Act as they claimed compensation at the rate of ₹ 18 per Sq. yard and also disputed the extent of the site acquired the Land Acquisition Officer made a reference to the Court of the Subordinate Judge. Guntur and that reference was numbered as O. P. No. 33/59. 2. The learned Subordinate Judge after considering the evidence oral and documentary, in the case came to the conclusion that the reasonable price payable for the site was ₹ 8 per sq. yard for a small triangular bit of an extent of 208 sq yards and ₹ 15 per sq. yard for the remaining area. 3. The contention regarding the difference in extent was given up before the learned subordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n question is being referred to the Full Bench it was expedient to refer the entire case for decision by the Full Bench. In the above circumstances the entire appeal is before us. 7. The first contention that is rugged by the learned government pleader is that the proper value of the land on the date of acquisition is ₹ 8 per sq. yard as stated in the award and that the granting of ₹ 15 per sq. yard for a major portion of the site is not warranted by the evidence on record. The learned Subordinate Judge made an inspection of the acquired site. He found that the land was attractive as a house site and there was possibility of the property being used as such site and several buildings were likely to be constructed upon it in the near future. He, therefore, held that the land was not to be valued merely by reference to the use to which it was being put to at the time of acquisition but also by reference to the uses to which it was capable of being put in the near future. The site in question abuts two roads running north and south and is very near the ring road which is a very important road running round Guntur. The value of the land has naturally to be ascertained wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision was followed by this court in Revenue Divisional Officer v. Appalaswami, AIR1967AP56 ). 11. We are not satisfied that there has been any error on principle justifying any interference by the appellate Court. On the other hand, we are of the opinion that the compensation awarded by the court below is just and reasonable in the circumstances of the case. 12. The next contention which as has already been observed necessitated the reference to a Full bench is that interest can be awarded on the enhanced amount of the compensation awarded by the Court only form the date of the award. Though it seems to have been argued before Mr. Justice Krishnarao that as the possession was taken only by the Municipality under private negotiations and that the Government has not taken possession under the Act, no interest at all was payable by the Government for any period. The argument before us it that interest should have been awarded from the date of the award. To appreciate this contention it is necessary to set out the relevant provisions of the Act. Section 16. When the Collector has made an award under Section 11 he may take possession of the land, which shall thereupon v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible obtain a further statement that the owner will not claim interest form the date of taking possession. In cases in which the owner declines to give such further statement interest on the amount of compensation should be included in the award. Even assuming that the expression 'taking possession of the land' under Section 28 of the Act, would only mean taking possession of the land under or in pursuance of the Act we do not see any reason why the taking of possession of the land prior to the Land Acquisition proceedings without any objection by the owner (in this case by private negotiation with his consent) followed by valid proceedings under the Act should not be held to be taking possession of the land under the Act. The Act does not prescribe when the Collector representing the Government should take possession of the land under the Act. The Act does not prescribe when the Collector representing the Government should take possession of the land. Under Section 16 of the Act he may take possession after he has made an award, but there is nothing in that section or in any other provision of the Act, which prevents the collector form taking possession of the land e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay interest on his purchase money from the date of taking possession and which is based on an implied agreement arising out of the fact of taking over possession without paying the consideration amount. The Division Bench consisting of Subbarao, C. J., (as he then was) and Bhimasankaram J., pointed out that this principle is quite independent of the provisions of the transfer of Property Act. After referring to the English decisions on this subject, they pointed out that this equitable principle was applied in India under similar circumstances. In particular, they referred to the decision of the Privy Council in Ratanalal Chunilal v. Municipal Commissioner for the City of Bombay, ILR Bom 181 : ( AIR 1918 PC 129 ) where the Judicial Committee observed as follows: The Board is of opinion that the right to interest depends upon the following broad and clear consideration. unless there be something in the contract of parties which necessarily imports the opposite, the date when one party enters into possession of the property of another is the property date from which interest on the unpaid price should run. On the one hand the new owner has possession, use and fruits, on the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government took possession. Their Lordships of the Privy Council held that under the circumstances of this case the Government Officials were in possession 'not as mere trespassers' but under such a colour of title that the buildings erected by them on the land ought not to be included in the valuation as having become the property of the landowner. Regarding interest they observed as follows; the justice of the case was met by holding that the appellant was entitled to compensation for the occupation of the land by the officials before the notification on 4-11-1920 which as before stated, was awarded in the form of interest in the value of the land computed from 27-11-1919 when the Government took possession. 14. It is therefore seen that even in the above case the Privy council considered it just to award interest from the date of taking possession by the Government even though the award was passed much later. it is no doubt true, as submitted by the Government Pleader that there was no argument addressed on the right to award such interest from that date. But it is to be observed that their Lordships of the Privy Council did not consider the award of interest fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quisition was made on 23rd March, 1948 but no action was taken in pursuance of the notification. Meanwhile the Punjab legislature passed the East Punjab Requisition of Immovable Property (Temporary Powers) Act 48 of 1948. Under the provisions of that Act the Government requisitioned the land in question for the purpose of resettling the persons who were likely to be evicted from their lands as a result of the construction of the new Capital. It was contended that under this act it was not permissible to award interest on the compensation and this contention was rejected by the High Court. Their Lordships of the Supreme Court, however held that there was nothing in the act which excludes the application of the general rule in the matter of payment of interest. Discussing the general grounds and principles regarding awarding of interest, their Lordships stated as follows: What then is the contention raised by the claimants? They contend that their immovable property has been acquired by the State and the State has taken possession of it. Thus they have been deprived of the right to receive the income from the property and there is a time lag between the taking of the possessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the claimant is entitled to interest on equitable principles from the date he is deprived of possession even if it be prior to the land acquisition proceedings. Reliance however is placed by the learned Government Pleader on an unreported decision of a bench of this court in F. A. 78/1 of 1956 D/- 23-8-1965 Andh Pra. In that case possession was taken in 1337 F. but proceedings under the Act were not however, taken till 1351F. when the file was transferred to the Talukudar's Office for that purpose. A declaration under Section 5 of the Hyderabad Land Acquisition Act (Corresponding to S. 4 of the Act was made on 7-7-1956 F. The learned District Judge awarded interest at 6% per annum on the total compensation as found by him from the date of notification till the date of final payment. it was argued that the claimant was entitled to interest from the date of taking possession. it was held by this court that under Section 29 of the Hyderabad Act (corresponding to S. 34 of the Act) the claimant would be entitled to interest only from the time of taking possession under the Act, that though the Military authorities were already in possession, they must be deemed to have taken po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case will be entitled to interest as and from 30-11-1950. 20. It was next argued that the rate of interest is 4% and not 6%. Under Section 28 of the Central act, the rate of interest stipulated is 6% but by reason of Madras Amendment (Madras Act 12/53) the interest payable is 4% and the argument that the rate should be 4% only is based on this amendment. There is however a proviso introduced by the same amending Act to the following effect : Provided that where such possession is taken before the commencement of the Land Acquisition (Madras Amendment) Act 1953, the foregoing provision shall have effect as if for the rate of four percent per annum specified therein, the rate of six per cent per annum had been substituted. As possession was taken in this case on 30-11-1950, that is before the commencement of the amending Act, it follows that the rate of 6% awarded by the court below is correct. In any event as we have held that the interest is payable under principles of equity from the date of taking possession, the rate of 6% which has always been regarded as just and equitable and has even been taken as the proper rate under the Civil Procedure Code will in our ..... X X X X Extracts X X X X X X X X Extracts X X X X
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