The claimants are entitled to interest on the enhanced compensation from the date when the Government takes possession, even if it has been taken prior to initiation of land acquisition proceedings, on principles of justice and equity.

( 1 ) THIS appeal arises out of proceedings for the acquisition of 10,900 Sq. feet of land in T. S. No. 79 of Guntur town. The said land was required by the Guntur Municipality for the High level Service Reservoir for Guntur Water Supply Scheme. The Commissioner of the Guntur Municipality by his letter D/- 16-9-1953 applied for the acquisition of that land for the above purpose. Even prior to the request by the Commissioner the Municipality seems to have taken possession of the land on 30-11-1950. In response to the Commissioners request, proceedings for the acquisition of the land were started under the Land Acquisition Act (hereinafter referred to as "the Act") and notification under 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 Rs. 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 Rs. 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 Rs. 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 Rs. 8 per sq. yard for a small triangular bit of an extent of 208 sq yards and Rs. 15 per sq. yard for the remaining area.

( 3 ) THE contention regarding the difference in extent was given up before the learned subordinate Judge. On the above valuation he held that the enhanced compensation payable was Rs. 7021-78 and solatium on this amount was Rs. 1053-25. He awarded interest at 6 per cent per annum on the enhanced compensation from 30-11-1950 till the date of payment. The referring officer, namely the Revenue Divisional Officer Guntur has preferred the above appeal against the judgment of the learned Subordinate Judge. Three contentions are raised in the appeal, namely. 1. that the rate awarded by the court is excessive and it should have adopted the rate of Rs. 8 per sq. yard as given in the award; 2. interest ought to have been granted on the enhanced compensation from the date of award only and not from 30-11-1950, and 3. the rate of interest should have been 4 per cent and not 6 per cent per annum.

( 4 ) THE appeal first came up before our learned brother Krishna Rao J. It was contended before him by the learned Government Pleader that the Government had not taken possession in pursuance of the acquisition though the award was passed on 31-3-1958 and therefore there is no liability at all on the part of the Government to pay interest. He agreed with that contention but his attention was drawn to an unreported decision of a bench of this Court in F. A. No. 78/1/1958 D/- 23-8-1966 (Andh Pra) dealing with a case under the Hyderabad Land Acquisition Act where it was held that the claimant was entitled to interest at least from the date of notification under section 4 (1) of the Act. As it was contended that this ruling is opposed to the plain language of the Act and requires reconsideration he referred this case for decision by a Division Bench. The appeal, thereupon came up for hearing before a Division Bench consisting of Mr. Justices Barasimham and Mr. Justice Vaidya.

( 5 ) AS they felt that the question regarding interest requires consideration by a Full Bench they formulated the following points for decision by the Full Bench: "whether the claimants are entitled to interest under the Act from 30-11-1950 when the Municipality is said to have taken possession "not under the Act but by p