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1995 Supreme(AP) 570
Andhra Pradesh High Court
Judges : B.SUBHASHAN REDDY
Venigandla Srinivas - Appellant
Versus
Government Of A.P. - Respondent
Decided On : 09-14-95
The Land Acquisition Act mandates payment of interest on the market value plus solatium of 30%, and the prescribed rates of interest are 9% for the first year and 15% for subsequent years.
Headnote:
LAND ACQUISITION - INTEREST - ACT 1 OF 1894, SEC. 4(1), 23(1-A), 34 - SUMMARY
Fact of the Case:
Petitioners challenged the computation of interest on the notional value of land acquired for submergence under a dam project. The Land Acquisition Officer awarded interest at 4% for some period and 6% for the rest, on a notional value of Rs. 1,500/- per acre, while the market value was fixed at Rs. 12,500/- per acre.
Finding of the Court:
The court held that the Land Acquisition Officer erred in computing interest on the notional value and in awarding interest at 4% and 6% instead of the prescribed rates of 9% for the first year and 15% for subsequent years.
Issues: 1. Whether the Land Acquisition Officer erred in computing interest on the notional value of the land acquired? 2. Whether the Land Acquisition Officer erred in awarding interest at 4% and 6% instead of the prescribed rates of 9% for the first year and 15% for subsequent years?
Ratio Decidendi: 1. The Land Acquisition Act mandates payment of interest on the market value plus solatium of 30%. 2. The Central Land Acquisition Act, as amended by Act 68 of 1984, prescribes the payment of interest @ 9% per annum for the first year of taking possession and 15% per annum for the subsequent period till payment. 3. Section 23 (1-A) of the Land Acquisition Act provides for additional compensation @ 12% per annum from Section 4 (1) notification till the date of award or possession, whichever is earlier, and from such date of award or possession, the deprived person will get 9% per annum for the first year and 15% per annum for the subsequent years. 4. Section 34 of the Act, which contemplates payment of interest on the compensation, does not operate for the period covered by Section 23 (1-A) of the Act.
Final Decision: The court directed the Land Acquisition Officer to compute interest @ 9% per annum for the first year and @ 15% per annum from the second year till payment, on the market value of Rs. 12,500/- per acre plus 30% solatium, and to pay the same to the petitioners within two months.
( 2 ) THE above injury suffered by the peti tioners and the anomaly created has got to be rectified. While the Land Acquisition Act mandates payment of interest on the market value, the land acquisition officer had grossly erred in computing the interest on the notional value @ Rs. 1500/- per acre. Likewise, while the land acquisition Act prescribes the payment of interest @ 9% per annum for the first year of taking possession and 15% per annum for the subsequent period till payment, the Land Acquisition Officer had awarded interest @ 4% per annum for some period andfor the rent of the period @ 6% per annum. It is ununderstandable as to on what basis, the land acquisition officer did so. Under the original Central Land Acquisition Act the interest was to be awarded @ 6% per annum on the compensation. While the same was reduced to 4% by an Act of Andhra Pradesh, by amending the Central Act. But in view of the Central Act, 68 of 1984 amending the Land Acquisition Act receiving the president s assent necessarily the interest has to be awarded @ 9% per annum for the first year of taking possession and 15% per annum for the subsequent period. There is no escape for the State from this statutory obligation. Discharge of this obligation is necessary to conform to the Constitutional guarantee under article 300-Aof the Constitution of India. I do not countenance the argument of the learned Government Pleader that the petitioners had to approach the Civil court for the remedy. I reiterate my view that alternative remedy theory is inapplicable whenever the State either violates the provisions of the constitution or fails to discharge unconstitutional obligations. Article 300-A of the Constitution of India, which was hitherto a fundamental right under Article 31, guarantees that no person shall be deprived of his property, save by authority of law, the law being the Land Acquisition Act empowering the State to compulsorily acquire a person s property with corresponding obligation of payment of compensation and when and a guarantee is breached, a constitutional Court like this, when approached, has to extend its hand to remedy the situation. I also reject the argument of Mr. A. Puila Reddy that in addition to the interest, the petitioners are en titied for additional compensation under Section 23 (1-A) of the Land Acquisition Act. The said provision, which was also inserted under the amending Act 68 of 1984, provides for compensating the persons as the market value is frozen by issuance of notification under Section 4 (1 ). The Parliament took note of the fact of governments issuing Section 4 (1) notification in order to freeze the prices and then leisurely passing the awards and taking possession as and when they choose. The Parliament had correctly plugged this loophole of unfair practice of the State, as after freezing the market value by issuing Section 4 (1) notification, the State was taking itsown time either to pass the awards or to take possession. The deprived person was helpless as he was not entitled for any interest till the possession was taken over and there was no spedficperiod fixed under the statute for taking po
