# Ghaziabad Development Authority v. State of U.P. & Ors

- **Citation:** (2024) 5 ILRA 1762
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-05-02
- **Case number:** Writ - C No. 8626 of 2024
- **Bench:** Manoj Kumar Gupta, Kshitij Shailendra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ghaziabad-development-authority-v-state-of-u-p-ors-52020
- **Pages:** 10

## Headnote

Civil Law - land acquisition- whether the
Collector, while making award under
Section 28-A of the Land Acquisition Act,
1894- competent to award interest on the
compensation amount re-determined by
him thereunder-Sections 4, 11, 11A, 16, 17,
23(1),23 (1A), 25, 28, 28A, 31, 34 of the
Act, 1894-determination of compensation
for land-market value of land on the date
of publication of notification under Section
4(1)- both the Court and Collector vested
with the power to award interest-conjoint
reading of Sections 28 and 34 of the Actaward of interest-entire period-starting
from the date of dispossession until the
amount is deposited in the Court or paid to
the person entitled-object of inserting
Section 28-A-do away with inequality in
payment of compensationto land owners
covered by the same notification-Collector
shall have fill power to award interest on
the enhanced compensation awarded by
him under Section 28-A of the Act-petition
dismissed . (Paras 9, 18, 19, 20, 23 and 26)

HELD:
A combined reading of the aforesaid provisions
shows that the compensation for land acquired is
determined by the Court taking into consideration
the market value of the land on the date of the
publication of the notification under Section 4,
sub-section (1). In the interval between the date
of publication of notification under Section 4(1)
and making of the award, there would be
enhancement in the market value of the land.
The purpose of inserting sub-section (1A) is to
adequately compensate the land owners for rise
in market value during the said period. (Para 9)

In case the Court enhances the compensation, it is
invested with power to award interest on enhanced
amount by virtue of Section 28. A conjoint reading
of Section 28 and 34 reveals that the intent of the
legislature is to ensure award of interest for the
entire period starting from the date of dispossession
until the amount is deposited in the Court or paid to
the person entitled. The award of interest on the
amount originally awarded by the Collector under
Section 11 is taken care of by Section 34 by
investing the power with the Collector who at that
stage is in seisin over the matter. The power to
award interest on the excess sum of compensation
awarded in a reference by a Court is conferred on
the Court before whom only such an eventuality
may arise. There was no occasion to confer such a
power on the Collector, before whom such situation
would never arise. (Para 18)

Thus, there are two mandates of the legislature.
First, to award interest on the compensation
amount to the land owners without any break,
except for the period during which any delay had
occurred on account of stay of proceedings.
Second, the rate of interest should be 9% for the
first year from the date of dispossession and 15%
for the subsequent period. (Para 19)

The object of inserting Section 28-A by Act No. 68 of
1984 w.e.f. 24.9.1984 was to do away with inequality
in payment of compensation to land owners covered
by the same notification. The purpose of grant of
interest is to compensate an unpaid land owner who
had been deprived of possession of his land in
pursuance of the power of compulsory acquisition by
the State Government. The liability to pay interest is
incurred on the date Government takes possession, or
in other words, the tenure holder is dispossessed. The
rationale behind the same is plain and simple. The
dispossession of the owner of the land by the State
Government in exercise of its power of eminent
domain, deprives him of the usufructs and benefits
accruing to him from the acquired land. While the
compensation determined is the value of land, in case
compensation is not paid before depriving him of his
land, the interest is recompense for depriving a person
of the income from his property/compensation
amount. (Para 20)

Once it is established that the legislative intent is to
ensure award of interest on the compensation
amount from date of dispossession until it is paid or
deposited, it inheres

## Text

1762 INDIAN LAW REPORTS ALLAHABAD SERIES
the writ petition be entertained and decided
on merits.

11. I have heard the learned counsel
for the parties and have perused the records.

12. Having considered the rival
submissions of the learned counsels for the
parties, the Court is of the opinion that
several factual aspects as submitted by
counsels for the parties, need to be ironed
out before the writ petition can be decided
on merits. Moreover, a statutory remedy to
assail the order of the Commissioner passed
under Section 24 (4) has been provided in
the statute book itself which in the opinion
of the Court may not be bypassed.

13. The Apex Court in the case of PHR
Invent Education Society case (supra) relied
upon by the learned counsel for the petitioner,
itself in Para 30 of the decision has clarified
that the High Court will not entertain a petition
under Article 226 of the Constitution if an
effective alternative remedy is available to the
aggrieved person or the statute under which
the action is complained of has been taken
itself contains a mechanism for redressal of
grievance.

14. In view of the above, this Court is not
inclined to entertain the writ petition in the
wake of availability of a statutory alternate
remedy of filing a revision under Section 210
of the U.P. Revenue Code, 2006 against the
impugned order dated 19.12.2023 passed by
the Addl. Commissioner (Administration)
2nd, Meerut Division, Meerut.

15. This Court finds that the limitation
for filing revision under Section 210 of the
U.P. Revenue Code, 2006 is 60 days from the
date of the order sought to be revised. The 60
days have since expired. The writ petition was
presented in the Registry of this Court on
31.1.2024. Learned counsel for the petitioner
submits that if a revision is now filed, the same
would be rejected on the ground of limitation
and there would be no adjudication on merits.

16. Taking note of the above, the writ
petition is permitted to be dismissed as
withdrawn with liberty to the petitioner to
prefer a revision against the impugned order
dated 19.12.2023 passed by the Addl.
Commissioner (Administration) 2nd, Meerut
Division, Meerut under Section 210 within
three weeks from today.

17. In the eventuality of a revision being
filed by the petitioner within the time allowed
along with an application to condone the
delay, the Board of Revenue is expected to
condone the delay taking note of the fact that
the petitioner had been pursuing the writ
petition before this Court and entertain the
revision consider and decide the same on
merits ignoring the point of limitation.

18. The certified copies of the impugned
orders shall be returned to the petitioner after
retaining a photocopy of the same on record.
----------
(2024) 5 ILRA 1762
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 02.05.2024

BEFORE

THE HON'BLE MANOJ KUMAR GUPTA, J.
THE HON'BLE KSHITIJ SHAILENDRA, J.

Writ - C No. 8626 of 2024

Ghaziabad Development Authority
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Mahesh Narain Singh
5 All. Ghaziabad Development Authority Vs. State of U.P. & Ors.
1763
Counsel for the Respondents:
C.S.C., Kripa Shankar Shukla

Civil Law - land acquisition- whether the
Collector, while making award under
Section 28-A of the Land Acquisition Act,
1894- competent to award interest on the
compensation amount re-determined by
him thereunder-Sections 4, 11, 11A, 16, 17,
23(1),23 (1A), 25, 28, 28A, 31, 34 of the
Act, 1894-determination of compensation
for land-market value of land on the date
of publication of notification under Section
4(1)- both the Court and Collector vested
with the power to award interest-conjoint
reading of Sections 28 and 34 of the Actaward of interest-entire period-starting
from the date of dispossession until the
amount is deposited in the Court or paid to
the person entitled-object of inserting
Section 28-A-do away with inequality in
payment of compensationto land owners
covered by the same notification-Collector
shall have fill power to award interest on
the enhanced compensation awarded by
him under Section 28-A of the Act-petition
dismissed . (Paras 9, 18, 19, 20, 23 and 26)

HELD:
A combined reading of the aforesaid provisions
shows that the compensation for land acquired is
determined by the Court taking into consideration
the market value of the land on the date of the
publication of the notification under Section 4,
sub-section (1). In the interval between the date
of publication of notification under Section 4(1)
and making of the award, there would be
enhancement in the market value of the land.
The purpose of inserting sub-section (1A) is to
adequately compensate the land owners for rise
in market value during the said period. (Para 9)

In case the Court enhances the compensation, it is
invested with power to award interest on enhanced
amount by virtue of Section 28. A conjoint reading
of Section 28 and 34 reveals that the intent of the
legislature is to ensure award of interest for the
entire period starting from the date of dispossession
until the amount is deposited in the Court or paid to
the person entitled. The award of interest on the
amount originally awarded by the Collector under
Section 11 is taken care of by Section 34 by
investing the power with the Collector who at that
stage is in seisin over the matter. The power to
award interest on the excess sum of compensation
awarded in a reference by a Court is conferred on
the Court before whom only such an eventuality
may arise. There was no occasion to confer such a
power on the Collector, before whom such situation
would never arise. (Para 18)

Thus, there are two mandates of the legislature.
First, to award interest on the compensation
amount to the land owners without any break,
except for the period during which any delay had
occurred on account of stay of proceedings.
Second, the rate of interest should be 9% for the
first year from the date of dispossession and 15%
for the subsequent period. (Para 19)

The object of inserting Section 28-A by Act No. 68 of
1984 w.e.f. 24.9.1984 was to do away with inequality
in payment of compensation to land owners covered
by the same notification. The purpose of grant of
interest is to compensate an unpaid land owner who
had been deprived of possession of his land in
pursuance of the power of compulsory acquisition by
the State Government. The liability to pay interest is
incurred on the date Government takes possession, or
in other words, the tenure holder is dispossessed. The
rationale behind the same is plain and simple. The
dispossession of the owner of the land by the State
Government in exercise of its power of eminent
domain, deprives him of the usufructs and benefits
accruing to him from the acquired land. While the
compensation determined is the value of land, in case
compensation is not paid before depriving him of his
land, the interest is recompense for depriving a person
of the income from his property/compensation
amount. (Para 20)

Once it is established that the legislative intent is to
ensure award of interest on the compensation
amount from date of dispossession until it is paid or
deposited, it inheres in an award envisaged under
Section 28-A(1) that an affected person taking
recourse to such provision, inserted with the sole
object of ensuring equality, cannot be deprived of
the interest. The mere fact that no separate
provision has been made under Section 28-A would
not denude the Collector of the power to award
interest which he automatically derives on the
strength of the award which forms the foundation
of the proceedings. (Para 23)
1764 INDIAN LAW REPORTS ALLAHABAD SERIES
In our opinion, viewed from any angle, the
irresistible conclusion is that the Collector shall
have full power to award interest on the
enhanced compensation amount awarded by him
under Section 28-A of the Act. (Para 26)

Petition disposed of. (E-14)

List of Cases cited:

1. U.O.I. & anr.Vs Pushpavathi & ors., (2018) 3
SCC 28

2. Shree Vijay Cotton & Oil Mills Ltd. Vs State of
Guj., (1991) 1 SCC 262

3. U.O.I.& anr. Vs Pradeep Kumari & ors., (1995)
2 SCC 736

(Delivered by Hon'ble Manoj Kumar
Gupta, J.)

1. The moot question which arises for
consideration in the instant petition is
whether the Collector, while making award
under Section 28-A of the Land Acquisition
Act, 1894 is competent to award interest on
the compensation amount re-determined by
him thereunder.

Facts

2. The factual matrix of the case lies in
a narrow compass. The land of the third
respondent was acquired by the State under
the provisions of the Land Acquisition Act,
1894 (for short, hereinafter referred to as
"the Act") for planned development of the
area by the petitioner. The award under
Section 11 of the Act was declared on
20.9.1986 at uniform rate of Rs. 3.47 per sq.
yard. Some of the tenure holders, feeling
aggrieved by the award, sought reference
under Section 18 of the Act. The Court
decided Reference No. 71 of 1987 and 64 of
1988 by a common order dated 28.8.1998
and the compensation for the acquired land
was enhanced to Rs. 90 per sq. yard apart
from 30% solatium. The Court also granted
12% interest from the date of preliminary
notification, i.e. 7.7.1984, till the date of
taking possession as per Section 23(1A) of
the Act and interest at the rate of 9% per
annum for period of one year from the date
of possession and 15% per annum for the
subsequent period till the date of actual
payment as per Section 28 of the Act. The
third respondent, who had not sought
reference under Section 18 of the Act, on
basis of the award of the Court dated
28.2.1998, sought enhancement of the
compensation by invoking Section 28-A of
the Act. The application was filed on
22.5.1998, well within three months from
the date of award of the Court dated
28.2.1998. The Collector, by impugned
order dated 2.5.2022, has passed award in
favour of the third respondent, enhancing
the compensation amount to Rs. 90 per sq.
yard, along with other benefits as had been
granted by the Court in the aforementioned
references. Resultantly, the award of the
Collector also includes interest for the
period post taking over of the possession.
Aggrieved thereby, the instant petition has
been filed.

Submissions of Counsel for the
Parties

3. Sri G.K. Singh, learned Senior
Counsel, assisted by Sri Mahesh Narain
Singh,
appearing
for
the
petitioner,
contended that the Collector, while deciding
application under Section 28-A of the Act,
is not competent to award interest. The said
power is vested solely in the Court by virtue
of Section 28 of the Act. In support of his
contention, he has placed various provisions
of the Act to emphasize that under the
scheme of the Act, the Collector has power
to award interest only under Section 34. It is
confined to cases where the compensation
5 All. Ghaziabad Development Authority Vs. State of U.P. & Ors.
1765
amount determined by the Collector under
Section 11 while passing the award is not
paid or deposited on or before taking
possession of the land. It does not extend to
award made by the Collector under Section
28-A of the Act. It is also urged that it is only
the Court which could award interest in case
any reference is made to it under Section 28A(3), as in such an eventuality, it can take
recourse to the powers conferred upon it
under Section 28, but which is not available
to the collector.

4. On the other hand, learned counsel for
the third respondent submitted that the
purpose of inserting Section 28-A was to
ensure award of compensation at uniform rate
to all persons who are deprived of their land
by the State exercising its power of eminent
domain. The object of the said provision
inserted through amendment was to remove
discrimination in grant of award for lands
acquired under the same notification. The
Collector under Section 28-A of the Act is
required to re-determine the compensation
amount on basis of the amount of
compensation awarded by the Court under
Section 18 of the Act. Resultantly, all benefits
which have been given by the Court while
passing the award would also be admissible to
the person invoking Section 28-A of the Act.
The contention that although the Collector
would not have such power, but the Reference
Court while deciding reference under Section
28-A(3) would have such power, would not
advance the object with which Section 28-A
was inserted. Such an interpretation would
also lead to multiplicity of litigations which is
not in public interest and should be avoided.

Analysis

5. The award of the Collector is
made under Section 11 of the Act. Section
11A was inserted in the Act w.e.f. 24.9.1984
and it mandates that award under Section 11
shall be made within a period of two years
from the date of publication of the
declaration, failing which, the acquisition
proceedings would lapse. Section 12
contemplates that as soon as the award is
made, the Collector shall give immediate
notice of his award to the persons interested
as are not present personally or by their
representatives when the award is made.
Section 16 empowers the Collector to take
possession after making award under
Section 11 and whereupon the land vests
absolutely in the Government free from all
encumbrances. Section 17(1) of the Act
empowers the Collector, in cases of
urgency, to take possession on expiration of
fifteen days from the publication of notice
under Section 9(1) of the Act. Such land
shall thereupon vest absolutely in the
Government free from all encumbrances.

6. Section 17(3A) mandates that the
Collector, before taking possession of any
land in exercise of emergency power, shall
ensure payment of 80% of the compensation
for such land as estimated by him to the
persons interested entitled thereto and pay it
to them, unless prevented by some one or
more of the contingencies mentioned in
Section 31(2) of the Act.

7. Any person aggrieved by the award
can seek reference of the dispute relating to
the amount of compensation, the persons to
whom it is payable, or the apportionment of
the compensation amongst the persons
interested, by moving a written application
to the Collector. Such application has to be
made by person present or represented
before the Collector at the time of making of
award, within six weeks from the date of the
Collector's award and, in other cases, within
six weeks of receipt of notice from the
Collector under Section 12(2) or within six
1766 INDIAN LAW REPORTS ALLAHABAD SERIES
months from the date of Collector's award,
whichever period shall first expire.

8. The factors to be considered by the
Court while determining compensation are
provided under Section 23 of the Act. Under
sub-section (1A), the Court shall, in every
case, award an amount calculated @ 12%
per annum on such market value for the
period commencing on or from the date of
publication of notification under Section 4,
sub-section (1) in respect of such land to the
date of award of the Collector or the date of
taking of the possession, whichever is
earlier. In addition to the market value of the
land as provided above, the Court shall, in
every case, award a sum of 30% on such
market value in consideration of the
compulsory nature of the acquisition.
Section 23(1A) which enjoins the Court to
award interest @ 12% per annum on the
market value determined by him under the
forgoing provisions, is extracted below: -

23(1A) In addition to the market
value of the land, as above provided, the
Court shall in every case award an amount
calculated at the rate of twelve per centum
per annum on such market value for the
period commencing on and from the date of
the publication of the notification under
section 4, sub-section (1), in respect of such
land to the date of the award of the Collector
or the date of taking possession of the land,
whichever is earlier.

Explanation.- In computing the
period referred to in this sub-section, any
period or periods during which the
proceedings for the acquisition of the land
were held up on account of any stay or
injunction by the order of any Court shall be
excluded.

9. A combined reading of the aforesaid
provisions shows that the compensation for
land acquired is determined by the Court
taking into consideration the market value of
the land on the date of the publication of the
notification under Section 4, sub-section (1).
In the interval between the date of
publication of notification under Section
4(1) and making of the award, there would
be enhancement in the market value of the
land. The purpose of inserting sub-section
(1A) is to adequately compensate the land
owners for rise in market value during the
said period.

10. Section 25 stipulates that the
amount of compensation awarded by the
Court shall not be less than the amount
awarded by the Collector under Section 11.
The award is declared as per the procedural
requirements stipulated under Section 26
and it is deemed to be a 'decree' within the
meaning of Section 2 Clause (2) and Section
2 Clause (9), respectively, of the Code of
Civil
Procedure,
1908.
Section
27
empowers the Court to award costs incurred
in the proceedings by any person.

11. Section 28 empowers the Court to
award interest on excess amount of
compensation as is determined by him.
Section 28 is as follows:

28. Collector may be directed to
pay interest on excess compensation.- If
the sum which, in the opinion of the Court,
the Collector ought to have awarded as
compensation is in excess of the sum which
the Collector did award as compensation,
the award of the Court may direct that the
collector shall pay interest on such excess at
the rate of nine per centum per annum from
the date on which he took possession of the
land to the date of payment of such excess
into Court:

Provided that the award of the
Court may also direct that where such excess
5 All. Ghaziabad Development Authority Vs. State of U.P. & Ors.
1767
or any part thereof is paid into Court after
the date of expiry of a period of one year
from the date on which possession is taken,
interest at the rate of fifteen per centum per
annum shall be payable from the date of
expiry of the said period of one year on the
amount of such excess or part thereof which
has not been paid into Court before the date
of such expiry.

12. Section 28-A of the Act, which was
invoked by the third respondent in seeking
enhancement of compensation, is extracted
below:

28-A. Re-determination of the
amount of compensation on the basis of
the award of the Court.- (1) Where in an
award under this part, the Court allows to the
applicant any amount of compensation in
excess of the amount awarded by the
Collector under section 11, the persons
interested in all the other land covered by the
same notification under section 4, subsection (1) and who are also aggrieved by
the
award
of
the
Collector
may,
notwithstanding that they had not made an
application to the Collector under section
18, by written application to the Collector
within three months from the date of the
award of the Court require that the amount
of compensation payable to them may be redetermined on the basis of the amount of
compensation awarded by the Court:

Provided that in computing the
period of three months within which an
application to the Collector shall be made
under this sub-section, the day on which the
award was pronounced and the time
requisite for obtaining a copy of the award
shall be excluded.

(2) The Collector shall, on receipt
of an application under sub-section (1),
conduct an inquiry after giving notice to all
the persons interested and giving them a
reasonable opportunity of being heard, and
make an award determining the amount of
compensation payable to the applicants.

(3) Any person who has not
accepted the award under sub-section (2)
may, by written application to the Collector,
require that the matter be referred by the
Collector for the determination of the Court
and the provisions of sections 18 to 28 shall,
so far as may be, apply to such reference as
they apply to a reference under section 18.

13. Section 31 requires the Collector to
ensure payment of the compensation
awarded by him under Section 11 to the
persons entitled thereto according to the
award, unless prevented by one or more of
the contingencies mentioned in the next subsection.

14. Section 32 requires the Collector to
invest the money deposited in respect of
lands belonging to persons incompetent to
alienate in government securities as the
Court shall think fit. In certain other cases
stipulated under Section 33, the same course
has to be followed.

15. The payment of interest by the
Collector on the amount of compensation
awarded by him is regulated by Section 34
which stipulates as follows: -

34. Payment of interest. - When
the amount of such compensation is not paid
or deposited on or before taking possession
of the land, the Collector shall pay the
amount awarded with interest thereon at the
rate of nine per centum per annum from the
time of so taking possession until it shall
have been so paid or deposited:

Provided
that
if
such
compensation or any part thereof is not paid
or deposited within a period of one year
from the date on which possession is taken,
1768 INDIAN LAW REPORTS ALLAHABAD SERIES
interest at the rate of fifteen per centum per
annum shall be payable from the date or
expiry of the said period of one year on the
amount of compensation or part thereof
which has not been paid or deposited before
the date of such expiry.

16. Section 34 was amended by Act
No. 68 of 1984 w.e.f. 24.9.1982 and the rate
of interest was increased from 6% to 9% per
annum for the first year and by inserting a
proviso, the rate of interest has been further
enhanced to 15% per annum beyond one
year from the date on which possession is
taken. By the same Act, similar amendments
were made in Section 28 prescribing the
same rates of interest.

17. The scheme of the Act reveals that
both the Court and the Collector are invested
with the power to award interest. The power
of the Collector to award interest, as noted
above, is contained in Section 34 of the Act.
He is enjoined with the duty to award
interest on the compensation amount
determined by him under Section 11, if it is
not paid or deposited on or before taking
possession of the land. The rate of interest is
9% for the first year and 15% beyond one
year from the date on which possession is
taken until it shall have been so paid or
deposited.

18. In case the Court enhances the
compensation, it is invested with power to
award interest on enhanced amount by
virtue of Section 28. A conjoint reading of
Section 28 and 34 reveals that the intent of
the legislature is to ensure award of interest
for the entire period starting from the date of
dispossession until the amount is deposited
in the Court or paid to the person entitled.
The award of interest on the amount
originally awarded by the Collector under
Section 11 is taken care of by Section 34 by
investing the power with the Collector who
at that stage is in seisin over the matter. The
power to award interest on the excess sum
of compensation awarded in a reference by
a Court is conferred on the Court before
whom only such an eventuality may arise.
There was no occasion to confer such a
power on the Collector, before whom such
situation would never arise.

19. Thus, there are two mandates of the
legislature. First, to award interest on the
compensation amount to the land owners
without any break, except for the period
during which any delay had occurred on
account of stay of proceedings. Second, the
rate of interest should be 9% for the first
year from the date of dispossession and 15%
for the subsequent period.

20. The object of inserting Section 28A by Act No. 68 of 1984 w.e.f. 24.9.1984
was to do away with inequality in payment
of compensation to land owners covered by
the same notification. The purpose of grant
of interest is to compensate an unpaid land
owner
who had
been deprived
of
possession of his land in pursuance of the
power of compulsory acquisition by the
State Government. The liability to pay
interest
is
incurred
on
the
date
Government takes possession, or in other
words, the tenure holder is dispossessed.
The rationale behind the same is plain and
simple. The dispossession of the owner of
the land by the State Government in
exercise of its power of eminent domain,
deprives him of the usufructs and benefits
accruing to him from the acquired land.
While the compensation determined is the
value of land, in case compensation is not
paid before depriving him of his land, the
interest is recompense for depriving a
person
of
the
income
from
his
property/compensation amount.
5 All. Ghaziabad Development Authority Vs. State of U.P. & Ors.
1769

21. The Supreme Court, in Union of
India and Another vs. Pushpavathi and
Others1, held that the liability of the State
to pay interest on the compensation amount
is statutory in character and can be claimed
at any stage of the proceedings under the
Act. The award of interest is not bound by
rules of procedure and limitation. The
remedy of reference under Sections 18 is
limited to the measurement of the land or to
the amount of compensation or as to the
person(s) to whom the compensation is
payable
and
lastly,
regarding
the
apportionment of compensation amongst the
persons
interested
in
claiming
compensation. The simpliciter dispute
relating to non-award of interest is not
capable of being referred by the Collector to
the Civil Court under Section 18 of the Act
as payment of interest is statutory in
character and once the conditions specified
under the statute are fulfilled, it acquires a
mandatory character. The relevant extract
from the said judgment in relation to the
statutory character of the interest payable
under the Act is as follows: -

"29. There are two sections, which
deal with the payment of interest, namely,
Section 28 and Section 34. So far as Section
28 is concerned, it deals with the payment of
interest
on
excess
compensation.
It
empowers the Civil Court to award interest
on the excess amount awarded over and
above the amount by the Collector. It
empowers the Court to direct the Collector
to pay interest at the rate of 9% p.a. on such
excess amount awarded by the Court from
the date on which the Collector took
possession of the land to the date of payment
of such excess amount into Court. The
proviso to Section 28 further enables the
Court to award interest on such excess
amount if the conditions specified in the
proviso are fulfilled in any acquisition
proceedings in relation to the land.

30. So far as Section 34 is
concerned, it deals with another mode of
payment of interest to the landowners. It
provides that if compensation is not paid or
deposited on or before taking possession of
the land, the Collector shall pay interest at
the rate of 9% per annum from the time of
so taking possession until it shall have been
so paid or deposited. Proviso to this section,
however, empowers the Collector to pay
interest at the rate of 15% p.a., if the
conditions specified therein are fulfilled in
any acquisition case.

31. Section 28-A provides for redetermination
of
the
amount
of
compensation on the basis of the award of
the Court. It enables the landowners to
approach the Collector to re-determine the
amount of compensation payable to them on
the basis of the award passed by the Court in
the cases of other persons alike them whose
lands were also acquired under the same
notification
of
Section
4
and
who
approached the Court for re-determination
of the amount of compensation payable to
them whereas other landowners did not
approach the Court along with them. Such
landowners are given a right to make an
application within 3 months from the date of
such award of the Court to the Collector and
claim therein the same compensation which
was awarded to other landowners by the
Court. Sub-section(2) of Section 28-A
empowers the Collector to conduct an
inquiry and make an award determining the
amount of compensation payable to such
landowners. Sub-section(3) of Section 28-A
empowers the landowners to approach the
Collector to refer his/their case to the Court
in case he/they is/are aggrieved by the award
passed by the Collector under sub-section(2)
of Section 28-A of the Act.
1770 INDIAN LAW REPORTS ALLAHABAD SERIES

36. A dispute relating to nonaward of interest payable to the landowners
under Section 28 or/and Section 34 of the
Act is not specified under Section 18 and
hence it is not capable of being referred by
the Collector to the Civil Court under
Section 18 of the Act. It is also for the reason
that payment of interest is statutory in
character
and
being
statutory,
it
is
mandatory for payment once conditions
specified under Section 28 or/and 34 are
fulfilled."

22. The Supreme Court in the said
judgment relied on its previous judgment in
Shree Vijay Cotton & Oil Mills Ltd. vs.
State of Gujarat2. For ready reference, the
same is extracted below: -

"16. There is inherent evidence in
the wording of Sections 28 and 34 to show
that the framers of the Act intended to assure
the payment of interest to the person whose
land was acquired and it was not the
intention to subject the said payment to
procedural hazards. Section 34 lays down
that "the Collector shall pay the amount
awarded with interest at 6 per cent per
annum....". The legislative mandate is clear.
It is a directive to the collector to pay the
interest in a given circumstance. Section 34
nowhere says that the interest amount is to
be included in the award-decree as prepared
under Section 23(1) read with Section 26 of
the Act. Similarly Section 28 provides "the
award of the court may direct that the
Collector shall pay interest". Here also the
award under Section 23(1) read with Section
26 has been kept distinct from the payment
of interest under the section. The interest to
be paid under Section 34 and also under
Section 28 is of different character than the
compensation amount under Section 23(1)
of the Act. Whereas the interest, if payable
under the Act, can be claimed at any stage
of the proceedings under the Act, the
amount of compensation under Section
23(1) which is an award-decree under
Section 26, is subject to the rules of
Procedure and Limitation. The rules of
procedure are hand-maiden of justice. The
procedural hassle cannot come in the way of
substantive rights of citizens under the Act."

23. Once it is established that the
legislative intent is to ensure award of
interest on the compensation amount from
date of dispossession until it is paid or
deposited, it inheres in an award envisaged
under Section 28-A(1) that an affected
person taking recourse to such provision,
inserted with the sole object of ensuring
equality, cannot be deprived of the interest.
The mere fact that no separate provision has
been made under Section 28-A would not
denude the Collector of the power to award
interest which he automatically derives on
the strength of the award which forms the
foundation of the proceedings.

24. If the situation is viewed in the
context of the argument advanced on behalf
of the petitioner that interest could be
awarded by Court only in reference under
Section 28-A(3) as Section 28 has been
specifically made applicable for Court only,
it would be self-defeating and paradoxical.
The legislature never countenanced a
situation where the Collector would not
have power to award interest on the
compensation amount re-determined by him
under Section 28-A and for getting the said
relief, a person should approach the Court
by invoking Section 28-A(3) of the Act.

25. A Three-Judge Bench of Supreme
Court in Union of India and Another vs.
Pradeep Kumari and Others3 held that at
the stage of proceedings under Section 28A, the Collector would act under Section 34
5 All. Arun Kumar Vs. State of U.P. & Ors.
1771
in awarding interest on the additional
amount of compensation awarded by him.
Para 13 of the Law Report is quoted below:
-

"Shri
Goswamy
has
next
contended that while re-determining the
amount of compensation under Section 28A it is not permissible for the Collector to
award interest on the additional amount of
compensation awarded by him for the
reason that under Section 28 of the Act only
the court can direct payment of interest on
the excess amount awarded as compensation
and no such power is conferred on the
Collector and, therefore, interest cannot be
awarded by the Collector on the additional
amount of compensation determined under
Section 28-A. It is no doubt true that under
Section 28 only the court can direct payment
of interest on the excess amount awarded as
compensation and the Collector is not
competent to award interest on the
additional amount of compensation under
the said provision. But sub-section (2) of
Section 28-A provides that after an
application has been submitted under subsection (1) of Section 28-A the Collector
after conducting an inquiry makes an award
determining the amount of compensation
payable to the applicants and under subsection (3) of Section 28-A any person who
has not accepted the award under subsection (2) may move the Collector
requiring that the matter be referred for
determination to the court and the provisions
of Sections 18 to 28 have been made
applicable to such reference. This would
show that after an application has been
submitted under Section 28-A(l) for redetermination
of
the
amount
of
compensation the process of such redetermination results in making of an award
by the Collector and a person not accepting
the said award can move the Collector to
refer
the
matter
to
the
Court
for
determination
and
such
reference
is
governed by Sections 18 to 28. If that is so,
Section 34 of the Act would be applicable to
the award that is made by the Collector
under sub-section (2) of Section 28-A and it
would be permissible for him to award
interest under Section 34 on the additional
amount of compensation awarded by him.
The second contention urged by Shri
Goswamy is, therefore, rejected."

26. In our opinion, viewed from any
angle, the irresistible conclusion is that the
Collector shall have full power to award
interest on the enhanced compensation
amount awarded by him under Section 28-A
of the Act.

27. In view of the foregoing
discussions, the contention on behalf of the
petitioner does not merit acceptance and,
consequently, the writ petition is dismissed.

28. No order as to costs.
----------
(2024) 5 ILRA 1771
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 08.05.2024

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.

Writ - C No. 18495 of 2021

Arun Kumar ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Mr. S.K. Tyagi, Advocate

Counsel for the Respondents:
Mr. Rishi Kumar, Addl. Chief Standing
Counsel