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Judgment
P. Jyothimani, J.—The agricultural lands to an extent of 2.55 acres and 0.05 acres in Athikaripatti village and Udayapatti village, Salem
Taluk respectively, belonging to the petitioner were acquired for the purpose of putting up a Government High School. Notification u/s 4(1) of the
Land Acquisition Act, 1894 (in short, ""the Act"") was issued on 28.12.1977 and declaration u/s 6 of the Act was made on 7.10.1980 and award
was passed on 13.7.1981 in Award No. 2/81. The acquisition proceedings challenged by the petitioner have ultimately been dismissed in W.A.
No. 183 of 1983, which has become final.
The petitioner filed an application u/s 18 of the Act for reference to the competent Court for enhancement of compensation, which was rejected
on 31.12.1993, against which W.P. No. 20681 of 1994 was filed which came to be allowed on 22.4.1999, directing to refer the matter u/s 18 of
the Act and in spite of several representations, the respondents have not taken any steps. According to the petitioner, the respondents have even
failed to deposit the compensation amount of Rs. 40,481/- fixed as per Award No. 2/81 in the Court. In the circumstances, the writ petition is filed
for direction against respondents to pay the award amount as fixed in Award No. 2/81 with interest at 15% per annum or to deposit the said
amount in the competent civil Court as per Section 31 of the Act.
While the factum of acquisition and passing of award are admitted, it is the case of the first respondent in the counter affidavit that after award
was passed, notice was served on the petitioner by registered post on 17.11.1981 to receive the amount and the petitioner has not received the
sum and therefore, the award amount was deposited in the revenue deposit on 23.3.1982. According to the respondents, inasmuch as the amount
has been deposited in the revenue deposit, it is as per Section 31 of the Act, and there is no violation. It is also stated by the respondents in the
counter affidavit that even the petitioner has filed SLP in respect of land acquisition proceedings, but that was also dismissed. It is the further case
of the respondents that the interest will not accrue either for the amount deposited in the Court or in the revenue deposit in treasury and therefore,
the act of the respondents is in accordance with Section 31 of the Act.
Mr. P. Jagadeesan, learned counsel appearing for the petitioner would rely upon Section 31(2) of the Land Acquisition Act which mandates the
Collector to deposit the amount of compensation in the Court to which a reference would lie u/s 18 of the Act in cases where the parties either
refuse to receive the amount or where there is no competent person to alienate the land or where the dispute as to the title about the compensation
is in existence. He would also submit that u/s 34 of the Land Acquisition Act, if such amount is not deposited on or before taking possession of the
land, it is the duty of the Collector to pay the amount awarded with interest thereon.
On the other hand, Mr. P.S. Raman, learned Additional Advocate General would submit that while it is true that the award was passed in this
case as early as on 13.7.1981, it was the duty on the part of the petitioner to receive the same and inasmuch as he has not received the amount,
deposit was made to the treasury and the said deposit was made on 23.3.1982. He would submit that in this case the said deposit has been made
for long period as per the Manual issued by the Government in the year 1928, which is in the form of regulation or assistance to the officials in the
Government. It is his submission that as per the Manual the amount has been deposited with revenue treasury to the credit of L.A.O.P. It is his
further contention that as per the Manual the treasury deposit will lapse after six years unless it is revalidated and therefore, for every six years, it is
revalidated and it is pending with the treasury. According to him, once the amount is deposited within one year i.e., the award was passed on
13.7.1981 and the deposit was made in the revenue deposit on 23.3.1982, the petitioner has no right to claim interest u/s 34 of the Act. He would
fairly submit that following the Manual which is of the year 1928 only shows the bona fide attitude on the part of the respondents in this case.
I have heard the learned counsel for the petitioner and the respondents and perused the entire records.
Factually, it is clear in this case that the award was passed on 13.7.1981 and the case of the respondents is that the award amount was
deposited in the revenue deposit on 23.3.1982. The question that has to be decided is, whether such deposit in the revenue deposit is in
compliance to Section 31(2) of the Land Acquisition Act.
Section 31 of the Land Acquisition Act, 1894 (Central Act) speaks about the payment of compensation or deposit of the same in court after the
award is passed. It is made clear that immediately after the award is passed, it is the duty of the Collector to tender payment of compensation to
the party and in case where there is no consent to receive or there is incompetency to alienate the land or there exists a dispute regarding
apportionment, it is the duty of the Collector to deposit the amount of compensation in Court to which a reference u/s 18 would lie. It is also stated
that it is open to the party to receive the amount of compensation under protest. Further, when a person receives the amount without protest, he
will lose his right of making reference for higher compensation. Section 31 of the Land Acquisition Act states as follows:
Payment of compensation or deposit of same in Court.-
(1) On making an award u/s 11, the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto
according to the award, and shall pay it to them unless prevented by someone or more of the contingencies mentioned in the next sub-section.
(2) If they shall not 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 the compensation in the Court to which a reference u/s
18 would be submitted:
Provided that any person admitted to be interested may receive such payment under protest as to the sufficiency of the amount:
Provided also that no person who has received the amount otherwise than under protest shall be entitled to make any application u/s 18:
Provided also that nothing herein contained shall affect the liability of any person, who may receive the whole or any part of any compensation
awarded under this Act, to pay the same to the person lawfully entitled thereto.
(3) Notwithstanding anything in this section, the Collector may, with the sanction of the [appropriate Government], instead of awarding a money
compensation in respect of any land, make any arrangement with a person having a limited interest in such land, either by the grant of other lands in
exchange, the remission of land revenue on other lands held under the same title, or in such other way as may be equitable having regard to the
interests of the parties concerned.
(4) Nothing in the last foregoing sub-section shall be construed to interfere with or limit the power of the Collector to enter into any arrangement
with any person interested in the land and competent to contract in respect thereof.
Section 34 of the said Act mandates that in the event of Collector not paying the amount before taking possession of the land, the Collector shall
be liable to pay interest at the rate of 9% per annum from the date of taking possession. It is also made clear that if the amount is not paid or
deposited within a period of one year from the date on which the possession was taken, the owner will be entitled to 15% interest per annum from
the date of expiry of one year on the amount of compensation. Section 34 states as follows:
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 taking possession until it shall
have been so paid or deposited.
Provided that if such compensation or any part thereof is not paid or deposited within a period of 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 part thereof which has not been paid or deposited before the date of such expiry].
It is also relevant to point out that u/s 33 of the Act when such amount is deposited in the Court to which a reference would lie for
enhancement of compensation, such court, on application of any party interested may direct the amount to be invested in such Government or
other approved securities and direct payment of interest to be made in respect of such investment to the party concerned. Section 33 reads as
follows:
Investment of money deposited in other cases. When any money shall have been deposited in Court under this Act for any cause other than
that mentioned in the last preceding section, the Court may, on the application of any party interested or claiming an interest in such money, order
the same to be invested in such Government or other approved securities as it may think proper, and may direct the interest or other proceeds of
any such investment to be accumulated and paid in such manner as it may consider will give the parties interested therein the same benefit
therefrom as they might have had from the land in respect whereof such money shall have been deposited or as near thereto as may be.
Therefore, the contention of the learned Additional Advocate General that by investing the amount in the revenue deposit in the Government
treasury within one year, the liability of the Collector u/s 34 comes to an end is not acceptable. Such deposit is as per the provisions of Section
31(2) of the Act, since the said section makes it clear that the deposit has to be made only in Court to which a reference u/s 18 of the Act would
lie. Further, by not depositing the amount in the Court, the right of the party to move the Court for the purpose of investment for earning benefit by
way of interest is taken away. Therefore, it cannot be said that even by depositing the amount in court, the person interested will not be entitled to
get interest and therefore, the deposit in the Court to which reference u/s 18 of the Act will lie as well as the deposit in the revenue account are one
and the same. Since the amount has been deposited in the revenue account, the owner would loose his right u/s 33 of the Act. Therefore, it can
never be accepted that the revenue deposit and the deposit made in Court are one and the same. So far as the contention raised by the learned
Additional Advocate General that the deposit was made in revenue account as per Manual of the year 1928 which is in the form of assistance to
the officials is concerned, the officials of the respondents may be bona fide by following the said procedure, but the same is totally against the
provisions of the Land Acquisition Act (Central Act), particularly Sections 31(2), 33 and 34 of the said Act. It is needless to state that in the
presence of the concrete statutory provisions as enumerated above, the alleged Manual being followed by the officials of the respondents cannot
have any superseding effect.
Exactly a similar issue was decided by the Supreme Court in Hissar Imporvement Trust Vs. Smt. Rukmani Devi and another, . That was a
case wherein the contention of the appellant for whose benefit the acquisition was made was that it has already deposited the amount of
compensation before taking possession to the Collector, but the Collector has not paid or deposited the amount as per Section 34 of the Act and
therefore, according to the appellant, it is the Government which is liable to pay. Without expressing any opinion about the liability on the appellant
Trust to share with the Government, the Supreme Court has made it very clear that in so far as the landlord is concerned, his right to be
compensated is enforceable against the State by holding that it is the duty of the Collector to pay or deposit the amount awarded u/s 31 of the Act,
failing which he will be liable to pay interest as per Section 34. The Supreme Court has held as follows:
Section 31 of the Land Acquisition Act, 1894 provides for payment of compensation or deposit of the same in court. The section requires that
the Collector should tender payment of the compensation awarded by him to the persons interested. If for reasons mentioned in that section the
compensation has not been paid, the Collector should deposit the amount of the compensation in the court to which reference can be made u/s 18
of the Act. Section 34 provides for payment of interest in the event of compensation, which has to be paid or deposited in the court as provided
u/s 31, being not so paid or deposited before taking possession of the land.
In the present case, according to the appellant, the amount of compensation had been paid by him to the Collector in time i.e. before possession
was taken. If the Collector had not paid the money or deposited the same in court as provided by Section 34, counsel for the appellant submits,
the liability is that of the government and not of the appellant.
It cannot be gainsaid that interest is due and payable to the landowner in the event of the compensation not being paid or deposited in time in
court. Before taking possession of the land, the Collector has to pay or deposit the amount awarded, as stated in Section 31, failing which he is
liable to pay interest as provided in Section 34.
In the circumstances, the High Court was right in stating that interest was due and payable to the landowner. The High Court was justified in
directing the necessary parties to appear in the executing court for determination of the amount.
We make it clear that insofar as the landowner is concerned, his right to be compensated is enforceable against the State. It is the liability of the
Collector in terms of the relevant provisions to pay the amount awarded, together with interest in the event of the amount not being paid in time.
The liability of the appellant-Trust arising under its agreement with the government for payment in respect of the property acquired is a matter on
which we express no view.
It is also informed to this Court that the rate of interest is 9% for the first one year and thereafter 15% is made applicable in respect of the
awards passed on or after 30.4.1984. Before that date, the rate of interest was 4% for the first year and 6% thereafter. Be that it may, as per the
provisions of Sections 31(2) and 34 of the Land Acquisition Act, the petitioner is certainly entitled to interest as per the law that existed at the time
of passing the award as well as taking possession.
In view of the same, the writ petition stands allowed with direction to the respondents to pay the amount of compensation as fixed in Award
No. 2/81 dated 13.7.1981 along with interest as per Section 34 of the Land Acquisition Act and such amount shall be paid expeditiously, in any
event within a period of eight weeks from the date of receipt of copy of the order. No costs. Connected miscellaneous petition is closed.