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2016 Supreme(Kar) 400
IN THE HIGH COURT OF KARNATAKA AT DHARWAD BENCH
Mrs. B.V. Nagarathna, J.
Chanabasappa Sangappa Chachadi - Appellant
Versus
Karnataka Neeravari Nigam Ltd., Saundatti and another - Respondents
M.S.A. No. 552 of 2012 (LAC)
Decided On : 17-02-2016
For the Appellant : S.N. Hatti.
For the Respondent: Ramesh N. Misale, Smt. Veena Hegde.
Interest under Section 34 of the Land Acquisition Act, 1894 is payable from the date of the award and not for the period prior to the award, even if possession has been taken prior to the issuance of the Section 4(1) notification.
Headnote:
Land Acquisition - Compensation - Interest - Malaprabha Reservoir Project - Section 4(1) Notification - Section 34 of the Land Acquisition Act, 1894 - [COMPENSATION] - [LAND ACQUISITION] - [Section 4(1), Section 34]
Fact of the Case:
The case involves the acquisition of land for the Malaprabha Reservoir Project. The appellant sought enhancement of compensation under Section 18(1) of the Land Acquisition Act, 1894, based on the escalation assessed at 10% per annum. The appellant also claimed interest under Section 34 of the Act from the date of the award.
Finding of the Court:
The court held that the appellant was entitled to enhanced compensation by assessing escalation at 10% per annum, in line with a previous Division Bench judgment affirmed by the Supreme Court. However, the court ruled that interest under Section 34 of the Act would be awarded from the date of the award and not for the period prior thereto.
Issues: 1. Whether the appellant is entitled to enhancement of compensation based on escalation to be assessed at 10% per annum. 2. Whether the appellant is entitled to payment of interest under Section 34 of the Act from the date of the award or from the date of the Section 4(1) notification.
Ratio Decidendi: The court followed the principle established in R.L. Jain and Karigowda, holding that interest under Section 34 of the Act is payable from the date of the award and not for the period prior to the award, even if possession has been taken prior to the issuance of the Section 4(1) notification.
Final Decision: The court allowed the appeal in part, enhancing the compensation and ruling that interest under Section 34 of the Act would be awarded from the date of the award. The appellant was also granted liberty to file an application to seek damages for the period between the date of submergence of the land and the date of issuance of the Section 4(1) notification.
Mrs. B.V. Nagarathna, J.
This is a miscellaneous second appeal, assailing judgment and award passed in LAC. Appeal No. 130/2011 by the Principal District Judge, Belgaum, dated 02.04.2012 by which, judgment and award passed by the Civil Judge (Sr.Dn), Bailhongal, (hereinafter referred to as "the reference court" for the sake of convenience) dated 26.3.2011 in LAC.No.193/2010 has been modified by partly allowing the appeal.
2. Relevant facts of the case are that an extent of 17 guntas out of 1 acre 37 guntas of land, in Sy.No.6/3+4b; 25 guntas in Sy.No.87/5 and 35 guntas in Sy.No.85/1 situated at Mugabasava village, Bailhongal taluk, Belgaum District, were acquired for the purpose of River Malaprabha Reservoir Project. In fact the aforesaid lands along with other lands were submerged in the backwaters of Malaprabha River on the construction of the reservoir project. Consequently, the aforesaid lands along with other lands were sought to be acquired by issuance of preliminary notification under Section 4(1) of the Land Acquisition Act, 1894, (hereinafter referred to as "the Act" for the sake of brevity), dated 07.06.2007. Subsequently, declaration was issued under Section 6(1) of the Act and an award was passed on 23.07.2009. The Special Land Acquisition Officer (hereinafter referred to as "SLAO") awarded compensation of Rs. 56,672/- per acre by a common award.
3. Not being satisfied with the said award, the appellant/claimant filed an application under Section 18(1) of the Act (read with Karnataka Amendment) seeking a reference to the court for enhancement of compensation. The reference court awarded compensation of Rs. 2,70,000/- per acre by assessing escalation in the market value of the land at 8% per annum as per the assessment of the lands in the neighbouring village in the same taluk which were also acquired earlier for the very same purpose. Being aggrieved by the compensation awarded by the reference court, respondent No. 1, beneficiary filed an appeal before the Principal District Judge at Belgaum (hereinafter referred to as the "first appellate court" for the sake of convenience), who by his judgment and award dated 02.04.2012 reduced the compensation to Rs. 2,25,000/- per acre on the basis of capitalisation method. The appellant-claimant had also filed cross-objection before the first appellate court. The cross-objection of the appellant was dismissed on the ground of delay.
4. Being aggrieved by the judgment and award of the First Appellate Court, the claimant has preferred this Second Appeal.
5. I have heard Sri. S.N. Hatti, learned Counsel for the claimant and Sri. Ramesh N. Misale, learned Counsel for respondent No. 1 and Smt. Veena Hegde learned Government Pleader for respondent No. 2.
6. Appellant's Counsel has raised a two polonged contention in this appeal. Firstly, he contended that the land in question has been acquired for Malaprabha Reservoir Project. In so far as the said acquisition is concerned, while applying escalation method, as has been done by the reference court in this case, the ruling of a Division Bench of this court must be applied. He submitted that the Division Bench has assessed escalation in the price of the land by 10% per annum by judgment dated 01.12.2011 in MFA.No.22947/2011 and that the judgment has been affirmed by the Hon'ble Supreme Court by order dated 16.12.2013 in SLP.No.8875/2013 filed by the first respondent herein. The SLP was dismissed both on the ground of delay as well as on merits and therefore, following the aforesaid dictum, this court may enhance escalation at 10% instead of 8% per annum which was reckoned by the reference court, although the First Appellate Court did not proceed on that basis but on capitalisation method. He contended that if the aforesaid decisions are applied, then compensation would be Rs. 3,00,000/- per acre and accordingly all statutory benefits would apply.
7. His next contention was with regard to payment of interest under Section 34 of the
