St. Theresas Convent vs The District Collector, Ernakulam & Ors.

The petitioner’s property was acquired for the purpose of development of Banerji road, from Kacheripady upto Madhava Pharmacy Junction. The issue involved in this Writ Petition is the petitioner’s claim for interest for the delayed payment of compensation. Petitioner’s claim in this regard was rejected by the the District Collector vide the impugned Ext.P7 Order for reasons, which will be adverted to in detail herebelow.

Heard the learned Counsel for the petitioner, learned Standing Counsel for the 3^rd respondent/Metro Rail and the learned Senior Government Pleader for respondents 1 and 2. Perused the records.

The notification under Section 4(1) was issued on 20/5/2011. Ext.P1 notification under Section 9, was issued on 12/7/2012. Two Land Acquisition cases have arisen at the instance of the petitioner, that is L.A.C Nos.11/11 and 9/11. The property was taken possession of vide Exts.P3 and P4 Kychits on 22/11/2012 in both the cases. Compensation was fixed by the District Level Purchase Committee at the rate of Rs.52 lakhs per cent. 80% of the amount was paid on 28/2/2013, that is to say, after 98 days from the date of taking possession. The remaining 20% was paid only on 9/10/2013, that is to say, after 321 days from the date of taking possession. The petitioner claimed interest in terms of Section 17(3A) of the Land Acquisition Act, 1894 by virtue of Exts.P5 and P5(a) representations. When the same were not considered, the petitioner approached this Court by filing W.P(C). No.27627/2013. By Ext.P6 judgment, the Writ Petition was disposed of directing the District Collector to dispose of the representations. It is accordingly that the impugned Ext.P7 Order has been passed, rejecting the petitioner’s claim for interest. As could be seen from the last page of Ext.P7, the reason stated for rejection is that the petitioner had accepted the compensation without any demur, and that an agreement has been entered into in terms of Section 11(2) of the Land Acquisition Act. 80% of the compensation amount was also paid. In that agreement in Form No.10(a) of the Land Acquisition (Kerala) Rules, 1990, clause (3) stipulates that the petitioner will not make any claim over and above the amount fixed as compensation. Besides, there is a clause preventing the petitioner from approaching a Court of law seeking enhancement of the compensation. As regards the delay in disbursing the 20% of the compensation, the reason cited is the administrative delay in approving the amount fixed by the D.L.P.C by the Government. It is on these specified grounds that the petitioner’s claim for interest has been rejected, vide Ext.P7.

Learned Standing Counsel for the 3^rd respondent opposed the relief sought for. He handed over a judgment of this Court in W.P(C).No.20789/2021, wherein the learned Single Judge took a stand, at paragraph no.8, that a claim for interest cannot be considered under Article 226 of the Constitution.

Learned Counsel for the petitioner would handover the judgment in a Bench judgment of this Court in W.A No.532/2023, wherein, a similar issue with respect to interest for delayed compensation to the extent of 20% has been considered, and allowed. In paragraph nos.12 and 13, the Division Bench found that there has been laches on the part of the District Collector in non-disbursing the remaining 20% of the sale consideration and in not calling upon the petitioner to execute the sale deed in terms of the agreement. Accordingly, interest at the prevailing bank rate was directed to be paid.

Learned Senior Government Pleader would submit that the above judgment of the Division Bench has been challenged before the Hon’ble Supreme Court, and there is an Order of status quo passed therein.

Having heard learned Counsel appearing for the respective parties, this Court notice that the petitioner has a clear entitlement in terms of Section 17(3A) read with Section 34 of the Land Acquisition Act, 1894 to claim interest.

Section 17 (3A) is extracted herebelow:-

Section 34 of the Act is extracted herebelow:-

The mandate to deposit 80% of the compensation before taking possession and the clear entitlement to receive interest, upon the failure to do so is thus clear, beyond the cavil of any doubt.

Inasmuch as learned Counsel for the 3^rd respondent refers to Form No.10(a) of the Land Acquisition (Kerala) Rules, 1990, in which the agreement/award is entered into by and between the petitioner and the 3^rd respondent, this Court will refer to that. Clause 3 of the said agreement stipulates that the owner and interested party shall not claim any amount in addition to the amount agreed upon as compensation and accept it without any protest. This Court had occasion to consider the impact of Form no.10(a), vis-a-vis a claim for redetermination under Section 28 A, in Jayakumari P. v. Special Tahasildar, Thiruvananthapuram [2026 KHC Online 75]. It was held that the provisions of the Rules cannot operate against the clear entitlement in terms of the Act. It is noteworthy that it is not even the Rules, which interdicts the petitioner from claiming anything other than the compensation. Only the Form prescribed by the Rules, which is an agreement, stipulates that affected person cannot claim any amount in addition to the amount agreed as compensation. Such an interdiction cannot impact the clear entitlement in terms of Section 34 of the Act.

This Court also notice a distinction that, what has been claimed by the petitioner is not an amount in addition to the compensation. Instead, the petitioner seeks interest on the compensation amount. As such, Clause 3 of Form no.10(a) cannot stand in the way of the petitioner from enforcing his statutory right in terms of Section 34 of the Land Acquisition Act 1894.

For the reasons afore, this Court is of the opinion that the petitioner is entitled to the relief sought for. Moreover, no counter affidavit has been placed on record disputing the contentions raised by the petitioner in the Writ Petition, either by the 3^rd respondent or by respondents 1 and 2, though the Writ Petition has been filed, as far back as 2014.

Accordingly, this Writ Petition is allowed, and 1^st respondent will stand directed to pay interest in terms of Section 34 of the Act, at the rate of 9% per annum to the petitioner on 80% of the compensation amount from the date of taking possession (that is 22/11/2012) up to the date of payment (that is 28/2/2013). Insofar as the remaining 20% amount also, there will be a direction to pay interest at the rate of 9% per annum commencing from the date of taking possession (22/11/2012) up to the date of payment (that is 9/10/2013). The above direction shall be complied within a period of three months from the date of receipt of a copy of this judgment. The petitioner will produce a copy of this judgment before the 1^st respondent for compliance.

This Writ Petition is allowed as above.

EXHIBIT P1. TRUE COPY OF THE NOTICE REF. NO. LAC 11/11/A3 DATED 12-7-2012.

EXHIBIT P2. TRUE COPY OF THE NOTICE REF. NO. LAC 9/11/A3 DATED 12-7-2012.

EXHIBIT P3. TRUE COPY OF THE KYCHIT ISSUED BY THE REVENUE INSPECTOR DATED 22-11-12 IN LAC 11/11/A3.

EXHIBIT P4. TRUE COPY OF THE KYCHIT ISSUED BY THE REVENUE INSPECTOR DATED 22-11-12 IN LAC 9/11/A3.

EXHIBIT P5. TRUE COPY OF THE REPRESENTATION DATED 6-10-2013 REQUESTING PAYMENT OF INTEREST IN RESPECT OF LAND COVERED BY EXT.P1

EXHIBIT P5A.TRUE COPY OF THE REPRESENTATION DATED 6-10-2013 REQUESTING PAYMENT OF INTEREST IN RESPECT OF LAND COVERED BY EXT.P2

EXHIBIT P6. TRUE COPY OF THE JUDGMENT DATED 11-11-13 IN WPC NO. 27627/13.

EXHIBIT P7. TRUE COPY OF THE ORDER NO. C-1 2874/2011 DATED 6-3-2014 ISSUED BY THE 1ST RESPONDENT.

EXHIBIT P8. TRUE COPY OF THE DECISION REPORTED IN AIR 2007 (SC) 917.

EXHIBIT P9. TRUE COPY OF THE DECISION REPORTED IN 2005(3) KLT 182.