Allowed

Rama Bewa v. Zone Officer,L.a

Orissa HC5 Sept 2024LAA/12/2010

Case brief

AI extract

What is this about?

Held that interest on enhanced compensation under Section 28 of the Land Acquisition Act, 1894, is mandatory. Modified below judgment to grant 9% interest from possession date and 15% interest thereafter until actual payment, despite delay in restoration proceedings.

What did the court decide?

Judgment modified to grant 9% interest from possession date and 15% interest thereafter until actual payment. Appellants to receive further interest within three months.

Rama Bewa Vs Zone Officer,L.a — Land Acquisition | Orissa HC (2024)

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IN THE HIGH COURT OF ORISSA, CUTTACK

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L.A.A. No.12 of 2010

Rama Bewa & others

....... Appellants

-Versus-

The Zone Officer, L.A.(I), U.I.I.P. Project, Kusumkhunti, Kalahandi ....... Respondent

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For Appellants : Mr. A. Acharya, Advocate For Respondent : Mr. B. Panigrahi, Addl. Standing Counsel

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CORAM: JUSTICE SANJAY KUMAR MISHRA

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Date of Hearing & Judgment: 05.09.2024

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S.K. MISHRA, J.

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1. This Appeal has been preferred by the Appellants, being aggrieved by Judgment dated 04.11.2009 passed by the Civil Judge (Senior Division) in Misc. Judicial Case No.15 of 2002, vide which the Court below restricted interest on the determined compensation up to 20.07.2004, at the rate of 9% per annum, though the Referral Case is of the year, 2002 and was disposed of on 4^th November, 2009.

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2. The factual matrix, which led to the filing of this Appeal, is that by virtue of Notification dated 22.05.1989 and declaration dated 12.12.1989 under the Land Acquisition Act, 1894, shortly, hereinafter, ‘the Act, 1894’, the lands of the present Appellants were acquired for construction of Canal of U.I.I.P. An area of Ac.5.89 dec. of land under Khata No.76 belonging to the Appellants was acquired for the said purpose vide L.A. Case No.15/89. The Land Acquisition Officer, shortly, “L.A.O.”, awarded a sum of Rs.47,957/- in favour of the awardees. After receipt of the awarded amount, the Appellants, who are the land owners, filed a protest petition before the L.A.O. to refer the matter to the Civil Court U/s.18 of the Act, 1894.

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3. After the reference was made, the case was registered as M.J.C. No.15 of 2002 before the Civil Judge (Senior Division), Dharamgarh. Though the Referral Court, after taking into consideration evidence on record, vide the impugned Judgment dated 04.11.2009, assessed the market value of the acquired land @ 700/- per decimal and directed the Respondent to pay the compensation in respect of the acquired land at the said rate, along with benefits under Section 23(1-a), 23(2), but ordered for payment of 9% interest per annum under section 28 of the amended Act, 1894 restricting the same up to 20.07.2004.

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Hence, being aggrieved by the said judgment dated 04.11.2009 passed by Referral Court, the present Appeal has been preferred with a prayer to grant all statutory benefits in terms of Section 28 of the Act, 1894, by modifying the award passed by the Referral Court in M.J.C No.15 of 2002.

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4. This Appeal has been preferred basically on the grounds that the land of the Appellants was acquired in the year 1989 and the Reference Case was registered in the year 2002, which was disposed of on 20.07.2004 rejecting the application for time moved by the learned Counsel for the Petitioners (before the Court below) thereby confirming the award passed by the LAO. However, a Petition under Order 9 Rule 9, read with Section 151 CPC being moved on 24.12.2005, the said Petition was allowed by the Court below vide order dated 09.04.2009, being satisfied with the reasons indicated in the application. Hence, while passing the impugned judgment, the Court below was not justified to restrict awarding of interest @ 9% per annum till 20^th July, 2004 i.e. the date on which the said case stood disposed of before restoration.

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5. A further ground has been taken in the Memorandum of Appeal that granting of interest under Section 28 of the Act, 1894 is mandatory and not discretionary and the law is well

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settled that though the word ‘may’ has been used in the proviso to Section 28 of the Act,1894, it has to construed as ‘shall’ and therefore, the claimants would be entitled to interest at the rate of 9% on enhanced compensation for one year and thereafter

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@15% till date of deposit of the compensation in the Court, as held by the Supreme Court in Manipur Tea Co. Pvt. Ltd. Vs. Collector of Hailakandi , reported in AIR 1997 SC 1779.

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6. Learned Counsel for the Appellants, reiterating the grounds agitated in the Memorandum of Appeal, so also drawing attention of this Court to the order dated 09.04.2009 passed in M.J.C No.75 of 2005, submitted that the Appellants, who were the Petitioners before the Court below, sought for time to adduce further evidence. However, the Court below, on 20^th July 2004, due to default in leading further evidence, disposed of the case and confirmed the award of the L.A. Collector. But subsequently, after taking evidence, relying on the judgment of this Court dated 27.02.1998, passed in Civil Revision No.87 of 1998, the referral Court allowed the said restoration application vide order dated 09.04.2009, assigning sufficient reasons to recall the said order dated 20.07.2004.

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7. Learned Counsel for the Appellants further submitted that in view of the provisions under Section 28 of the Act, 1894,

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so also order passed in M.J.C No.75 of 2005, the Court below was not justified to restrict interest up to 20.07.2004, though the alleged conduct of the Appellants/Petitioners, failing to adduce evidence, was prior to the said date and the Court below took about 5 years to deal with and dispose of M.J.C No.75 of 2005 for restoration of the M.J.C No.15 of 2002, which was ultimately restored on 09.04.2009 and such delay cannot be attributed to the Appellants/Petitioners.

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8. To substantiate his submission, learned Counsel for the Appellants, in addition to the Judgment in Manipur Tea Co. Pvt. Ltd. (supra), relying on the judgment in Ratti Ram Vs. Union of India and another , reported in (2016) 11 SCC 110, submitted that in view of the statutory provisions under Section 28 of the Act, 1894, the Referral Court should not have refused to grant interest for a considerable period and the impugned judgment deserves interference by directing the authority concerned to pay interest and all other benefits in terms of Section 28 of the Act, 1894.

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9. Per contra, Mr. Panigrahi, learned ASC for the State submitted that the conduct of the Appellants, who are the Petitioners before the Court below, justifies restricting the interest, as ordered vide the impugned judgment. The State

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should not be burdened with interest for delay and latches on the part of the Appellants/Petitioners, who failed to adduce evidence in time, for which the Court below was being compelled to close the evidence and drop the Referral Petition, thereby confirmed the award passed by the L.A.O. However, the application for restoration being filed much thereafter, even though the Court below was kind enough to consider the same and restore the said application and awarded the compensation, was justified to observe that the Appellants are entitled to the enhanced compensation with 9% interest till 20.07.2004 only and the impugned judgment being legal and justified, needs no interference.

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10. In view of the arguments advanced by the learned Counsel for the parties, it would be apt to extract below Paragraph Nos.4 to 7 of the order dated 09.04.2009 passed by the Referral Court in M.J.C No.75 of 2005, vide which the M.J.C. Case No.15 of 2002 stood restored.

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“4. It is now to be seen if there was sufficient cause for the petition not to attend the Court on the date fixed i.e. on 20.07.2004. The petitioner has examined two witnesses including himself as P.W.1. The evidence of P.Ws.1 and 2 so also the petition of the Petitioner would reveal on 20.07.2004 due to his default his case has been disposed of having confirmed the award of the L.A. Collector. No doubt there

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was inordinate delay in filing the restoration petition.

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5. The learned counsel for the Petitioner submits in the absence of the petitioner the reference petition cannot be disposed of exparte and that order has to be recalled U/s. 151 C.P.C. In support of his submission he has filed the Xerox copy of the certified copy of the order in Civil Revision No.87/98 of the Hon’ble High Court of Orissa dtd. 27.2.1998.

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6. Perused the citation. The Hon’ble court has observed:

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“A party does not gain by remaining exparte in a proceeding where his interest is likely to be affected by exparte adjudication. The suggestion that the default was intentional hardly stands to reason. It is to be further noted here that a land acquisition reference cannot be dismissed for non-appearance of claimant under Order 9, Rule 8 C.P.C. Consequently, an application under Order 9, Rule 9 C.P.C. is not maintainable. The order of dismissal for default being impermissible, such an order can be recalled under section 151 C.P.C.

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7. In view of the aforesaid observation of the Hon’ble Court the exparte confirmation of award dtd.20.7.2004 is liable to be recalled. Hence ordered.

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ORDER

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The order dtd. 20.7.2004 in M.J.C. 15/2002 is recalled and that M.J.C. be restored to file. The application of the petitioner is accordingly disposed of.”

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(Emphasis Supplied)

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11. From the said order passed by the Referral Court so

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also from the order dated 20.07.2004, vide which the proceeding

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was disposed of, it is well revealed that on 20.07.2004, the Advocate for the Petitioners prayed for time. But the Court below was not inclined to allow further time because of taking several adjournments. After rejecting the said Petition, on the very same day, it was ordered to take up the matter at 2.00 P.M. and the Petitioner was directed to get ready by 2.00 P.M. Thereafter, the matter was taken up at 2.00 P.M. and the Petitioner was found absent on call. Instead of closing the evidence from the side of the Petitioners (Present Appellants) and posting the matter for evidence from the side of the State-Opposite Parties, the Court below confirmed the award passed by the L.A.O. and disposed of the said proceeding. However, the Court below, on filing of an application for restoration, allowed the said Petition giving reasons to order so, referring to the order dated 27.02.1998 of this Court passed in Civil Revision No.87 of 1998.

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12. In Manipur Tea Co. Pvt. Ltd. (supra), the Supreme Court held as follows:-

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“12. It is then contended that by operation of the proviso to Section 28 of the Act, the claimants would be entitled to interest for one year from the date of taking possession @ 9% per annum and for the balance period @ 15% per annum on the enhanced compensation. We find force in the contention.

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13. It is sought to be contended for respondents that the reference Court and the

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High Court have proceeded on the principle that the Court has discretion to award interest @ 15% or less and on facts, the Court found that 9% would be reasonable rate of interest. We find that the approach adopted by the reference Court and High Court is not correct since the statute has given measure of assessment of interest for the first year @ 9% from the date of taking possession and on expiry thereof @) 15% till date of deposit into Court on the enhanced compensation. It is a legislative principle that the claimant would be entitled to the rate of interest for the said period.

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14. Under these circumstances, though the word ‘may’ has been used in proviso to Section 28 of the Act, it has to be construed as “shall” and, therefore, the claimants would be entitled to interest at the rate of 9% on enhanced compensation for one year and thereafter @ 15% till date of deposit in the Court.”

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(Emphasis Supplied)

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In Ratti Ram (supra), where further proceeding

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before the Referral Court was stayed at the instance of the Appellant from 24.04.1997 to 27.9.2001, the Supreme Court held as follows:-

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“ 2. Once the land value is fixed by the Court, it refers to the value of the land as per the award passed by the Collector. That should carry all eligible statutory benefits. It appears that in the case before us, statutory benefits have been denied for a short period on the ground that the proceedings initiated at the instance of the appellants, remained stayed before the Reference Court. To quote from para 4 of the impugned judgment [Ratti Ram v. Union of India, 2011 SCC OnLine Del 3090] : (Ratti Ram case [Ratti Ram v. Union of India, 2011 SCC OnLine Del 3090] , SCC OnLine Del)

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“The learned counsel for the appellant, however, had submitted that the learned trial court was not justified in

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declining the relief of interest on the enhanced compensation for the period during which the reference proceedings had remained stayed sine die and that relief at least should be given by this Court. However, this prayer of the appellant cannot be accepted since he himself had got his reference proceedings before the trial court stayed sine die and the Government cannot be burdened with the liability of interest for the delay in disposal of the reference proceedings caused by the appellant himself.”

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3. We fail to understand how the appellants could be denied the statutory benefits available under the Land Acquisition Act, 1894 (hereinafter referred to as “the Act”) in respect of the value of this land fixed, merely because there was a period of stay operating, may be in a proceeding at the instance of the appellants. Those are not relevant considerations or factors at all for the purpose of grant of statutory benefits available to a person, whose land has been acquired in terms of Section 28 of the Act. Section 28 reads as under:

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“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:

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Provided that the award of the Court may also direct that where such excess 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

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thereof which has not been paid into court before the date of such expiry.”

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(Emphasis Supplied)

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13. In view of the facts detailed above so also the conduct of

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the referral Court, legal provisions under Section 28 of the Act, 1894, and the settled position of law, this Court is of the view that the referral Court was not justified to order for restricting the interest on the enhanced compensation @ 9% per annum till 20.07.2004 and such observation made in the impugned judgment deserves interference, being contrary to the statute and settled position of law.

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14. This Court is also of the view that in absence of any specific provision under the L.A. Act, 1894 for reduction of rate of interest under special circumstances, contrary to what has been provided under Section 28 of the Act,1894, the award passed in M.J.C. No.15 of 2002, restricting the interest up to 20.07.2004, @ 9% per annum, is bad.

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15. Accordingly, the judgment dated 04.11.2009 passed in M.J.C. Case No.15 of 2002 is modified to the extent that the Appellants, who are the Petitioners before the Court below, shall be entitled to interest @ 9% per annum on the differential excess amount from the date on which the possession of the land was

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taken and after expiry of one year from the said date, interest @ 15% per annum to be paid to the Appellants till the date of actual payment made to the Appellants/Petitioners.

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16. It is made clear that if the Appellants (Petitioners before the Court below) have already been paid the compensation amount in terms of the impugned judgment, along with 9% interest till 20.07.2004, further interest as per the observation made above be calculated and paid to the Appellants/Petitioners within three months from the date of production of the certified copy of this order.

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17. With the said observation, the Appeal stands allowed and disposed of.

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….…..….……………

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S.K. Mishra, J.

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Orissa High Court, Cuttack. Dated, 5^th September, 2024/Monalisa

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Signature Not Verified

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Digitally Signed Signed by: MONALISA SWAIN Reason: Authentication Location: High Court of Odisha Date: 12-Sep-2024 17:28:40