1. Compensation paid to wrong person — Claim for interest on delayed payment to rightful landowners. (Para 3 , 4 )
2026 Supreme(Online)(Del) 20288
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, Vikas Mahajan, JJ
Shardha Nand – Appellant
Versus
Land Acquisition Collector – Respondent
W.P.(C) 10278/2018
For the Appellants/Petitioners: M. M. Singh, Mohit
For the Respondents: Sanjay Kumar Pathak, Sunil Kumar Jha, M.S. Akhtar
Rightful owners of acquired land are entitled to statutory interest under Section 34 of the Land Acquisition Act, 1894, for the period of delay in receiving compensation, even if the delay was caused by the authority paying the wrong person.
Headnote:(A) Land Acquisition - Compensation - Payment to wrong person - Where compensation is inadvertently paid to an incorrect person, the rightful owner is entitled to the recovery of such amount and statutory interest for the period of delay. (Para 9)
(B) Statutory Interest - Section 34, Land Acquisition Act, 1894 - Entitlement - Petitioners are entitled to statutory interest under Section 34 of the Land Acquisition Act, 1894, when compensation is delayed, regardless of whether the delay was due to an inadvertent error by the Land Acquisition Collector. (Para 9, 10)
Issues: Whether the petitioners are entitled to statutory interest on the compensation amount paid to them after a significant delay due to payment being initially made to the wrong person.
Legal Category Hierarchy
Table of Contents
2. Petitioners seek statutory interest on delayed compensation; LAC claims delay was inadvertent error. (Para 7 , 8 )
3. Award of 1984-85, possession taken in 2006, compensation paid in 2017 — Petitioners entitled to interest. (Para 9 )
4. Rightful landowners entitled to statutory interest under Section 34, Land Acquisition Act, 1894 for delayed compensation. (Para 9 , 10 )
5. LAC directed to release interest under Section 34, Land Acquisition Act, 1894, with specified rates. (Para 10 , 12 )
6. Are rightful landowners entitled to interest on delayed compensation under the Land Acquisition Act, 1894?
Yes, statutory interest under Section 34 of the Land Acquisition Act, 1894 is payable for the period of delay in payment. (Para 9 , 10 )
7. What is the rate of interest payable on delayed land acquisition compensation?
Interest at 9% per annum for the first three months from the order, and at 15% per annum thereafter. (Para 10 )
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by Shri Shardha Nand, who is since deceased through his legal heir Mr. Subhash Chand, and Mr. Subhash Chand, in his individual capacity, both of whom are the sons of Late Shri Ishwar Singh.
3. As per the Petitioners, they are illiterate farmers, who are entitled to interest on the amount of compensation paid to them in respect of the part of the land, which was acquired in terms of the award, which is explained in Paragraph 18 of the writ petition in the following terms.
“18. That from the RTI and other proceedings/documents it is revealed that the respondent made the payment of land measuring 1 bigha and 10 biswas to Sh Sheoraj who was entitled for only for the compensation of 19 biswas. Therefore the payment of compensation of land measuring 11 biswas belonging to the petitioners were wrongly made to said Sh Sheoraj, who fraudulently received the same concealing the material facts before the respondent as well as before the ADJ concerned in proceedings u/s 18 of LA Act. The copy of judgment dated 28.11.2008 is annexed as ANNEXURE - P23.”
4. The possession of the land in question was taken on 29th May, 2006. The compensation unfortunately came to be paid to the wrong person and, hence, both the Petitioners had made a representation to the LAC for release of the compensation to them. The said application for compensation was decided by the LAC vide order dated 28th March, 2016 wherein the LAC observed as under:
“Shri Subhash Chand claim that out of above Acquired Land his share of land is to the extent of 1 bigha 2 biswa and this amount has been paid to Sh. Deepak, his cousin brother and to Sh. Sheo Raj. He has shown a copy of Filed Book prepared during 1981 when the consolidation is reportedly carried out and a copy at Form P-4 which is Khasra Girdhwari being maintained as per the DLR Rules 1962 showing the khasra no.128/6/2 area to 2 bigha 1 biswa as his recorded land.
Be that so, the area acquired is 1 bigha 17 biswa from khasra no 128/6/1 to 3 min, and while passing the award, the area in khasra no. 128/6/1, 128/6/2, and 128/6/3 is not-shown separately and the award is notified as 128/6/1 to 3 min. Shri Subhash Chand would have raised this issue at the time of passing the award and at this belated stage, the request for compensation payment for his part, of land, cannot be accepted now after the compensation amount has been paid. The petitioner has also not dispute the issue when the matter was adjudicated by the ADJ Court where the amount has been enhanced and paid to Shri Deepak. The records available with LAC branch shows that the award is passed for an area of 1 bigha 17 biswa and payment has been issued of Shri Deepak S/o Sheo Raj.
Therefore Shri Subhah Chand may approach Court of Low for recovery of compensation amount from Shri, Deepak S/o Sheo Raj.”
5. As per the LAC, the Petitioners were directed to approach the appropriate Court for recovery of the compensation amount from Mr. Deepak, to whom the payment was wrongly paid. The said order was again challenged by the Petitioners before the Public Grievances Cell (hereinafter, ‘PGC’), wherein vide order dated 23rd November, 2016, the PGC directed as under:
“3. Relevant facts emerging during the hearing
3.1 During the hearing on 15/11/2016 though the complainant was present, but there was no representative present on behalf the department. As such, today’s hearing in this grievance case was rendered infructuous.
3.2 However, during the discussion with the complainant, it was brought in notice of Commission that entries in respect of area of Khasra No.128/6/1 and 128/6/3 were given wrong in in Naksamutzamin prepared after award and at the lime of payment of compensation to the recorded owner. Due to this error on the part of LAC / staff, the compensation of acquired land was paid by LAC inadvertently to owners of the land wrongly mentioned in the above said Khasra Nos. instead