Land Acquisition Act = Advance possession payment of compensation like rents as fixed by LAO - enhanced by District court under sec.18 reference = pending appeal interim orders to deposit half of the compensation is legal = whether the High Court of Bombay, Nagpur Bench was justified in directing the State to deposit the rental compensation with the Appellate Court at the rate of 8% per annum on the award value passed by the Reference Court for the period of occupation before formal acquisition, allowing the appellant to withdraw only 50% of such rental compensation during the pendency of the appeal. = It is not in dispute that in most of the cases the rental compensation has not been paid. If that factual position continues, it clearly is a case where the amount to which a person is entitled is withheld without any legitimate excuse. The learned counsel for the appellants strenuously urged that in most of the cases the proceedings have not yet attained finality and are pending either before the Reference Court or in appeal. That does not provide a legitimate excuse to the appellants to withhold payment of the rental compensation. The amount calculated on the basis of award by the Land Acquisition Officer cannot be below than the amount to be ultimately fixed. If in appeal or the reference proceeding, there is any variation, the same can be duly taken note of as provided in law. There is no difficulty and we find none as to why the compensation on the basis of value determined by the Land Acquisition Officer cannot be paid. If there is upward revision of the amount, the consequences will follow and if necessary, redetermination of the rental compensation can be made and after adjustment of the amount paid, if any, balance can be paid. If, however, the Land Acquisition Officer's award is maintained then nothing further may be required to be done. In either event, payment of the rental compensation expeditiously would be an appropriate step. Looking at the problem from another perspective, one thing is clear that authorities have clearly ignored the sense of urgency highlighted in the various resolutions.”- For the reason aforesaid, if the High Court recalled the order dated 5th October, 2010 and directed the State Government to deposit rental compensation at the rate of 8% of the amount awarded by the Reference Court with the appellate Court, allowing the appellant to withdraw the half of the amount, no interference is called for. However, this order will not stand in the way of appellant to claim proportionate higher rental compensation, if the order of the Reference Court is upheld or further enhancement of compensation is made by the Appellate Court. 20. We find no merit in this appeal. It is, accordingly, dismissed with observations as made above. No costs.

published in http://judis.nic.in/supremecourt/imgs1.aspx?filename=40514
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.    5084              OF 2013
(arising out of SLP(C)No.31318  of 2011)
KAZI AKILODDIN SUJAODDIN           … APPELLANT
Versus
STATE OF MAHARASHTRA & ORS.          … RESPONDENTS
J U D G M E N T
SUDHANSU JYOTI MUKHOPADHAYA, J.
Leave granted.  The appellant is aggrieved by impugned
order   dated   15th  September,   2011   passed   by   the   Division
Bench of the High Court of Bombay, Nagpur Bench, Nagpur in
a   Review   Application,   MCA   No.774/2011.   By   the   impugned
order the Division Bench reviewed and recalled the judgment
and order dated 5th  October, 2010  passed in Writ Petition
No.3883/2010(D)   filed   by   the   appellant.   The   High   Court
further directed the State of Maharashtra to deposit rental
compensation   at   the   rate   of   8%   of   the   amount   of
Rs.1,07,82,270/­ as enhanced and awarded by the Reference
Court,   in   First   Appeal       No.06/2010,     as   the   same   isPage 2
2
pending   against   the   award   passed   by   the   Reference   Court.
The   High   Court   by   the   impugned   order   also   allowed   the
appellant to withdraw only half of the amount deposited by
the State upon furnishing security to the satisfaction of
the   Registrar   and   to   keep   remaining   amount   in   FDR   of   a
Nationalised Bank pending the litigation.
2. The only question involved in this appeal is 
whether
the   High   Court   of   Bombay,   Nagpur   Bench   was   justified   in directing the State to deposit the rental compensation with the Appellate Court at the rate of 8%   per annum on the
award value passed by the Reference Court for the period of
occupation   before   formal   acquisition,   allowing   the
appellant to withdraw only 50% of such rental compensation
during the pendency of the appeal.  
3. The factual matrix giving rise to this appeal are as
follows:­
The   matter   relates   to   payment   of   rental   compensation
with   regard   to   land   occupied   by   State   before   the   formal acquisition.     
The   Land   Acquisition   Act,   1894   does   not
contemplate   the   payment   of   any   rental   compensation.  
 The
entitlement   of   rental   compensation   is   on   the   basis   of
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resolutions   and   instructions   issued   by   the   State   of
Maharashtra   from   time   to   time   since   7th  February,   1949
including   Resolutions   dated   2nd  May,   1961,   1st  December,
1972,  2nd April, 1979 and 24th March, 1988.
4. By the aforesaid Resolutions, the State of Maharashtra
has empowered the Irrigation and Power Department/Buildings
and Communication Department Officers to take possession of
lands   required   for   its   development   works   by   private
negotiations, wherever possible, as it was apprehended that
the   speed   of   acquisition   of   lands   under   the   Land
Acquisition   Act,   1894(hereinafter   referred   to   as   the
'Act'),   would   not   be,   in   view   of   its   procedural
requirements, commensurate with   the speed of work planned
by the Department, thus resulting in delay in execution of
works.   It was also indicated that prompt payment of such
compensation should be done.
5. By Resolution dated 2nd May, 1961 it was decided by the
State   Government   that   in   cases   where   awards   have   been
declared   by   the   Revenue   authorities,   rental   compensation
should be paid at the rate of 4% per annum on the award
value   for   the   period   of   occupation   before   the   formal
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acquisition plus the adjustment which has been paid by the
owner of the land for that period in respect of that land.
Subsequently, by Resolution dated 1st   December, 1972 while
procedure   for   taking   possession   of   the   land   by   private
negotiations   were   notified,   the   determination   of   rental
compensation   was   enhanced   to         6­1/2%   per   cent   of   the
final award value, as apparent from the paragraph 6 of the
said Resolution quoted hereunder:
“6 .Payment   of   rental   compensation:   The
responsibility   of   payment   of   rental
compensation of to  the title holder of  the
lands   taken   over   by   I.&   P.D./B   &   C.D.
officers   through   private   negotiations   rests
with   I.&P.D.   /B.&C.D.   Officers   for   the
period from the date on which possession of
the   land   is   taken   over   till   the   date   on
which   the   full   amount   of   final   Award   is
paid.   Government has now decided that  the
rental compensation payable shall be       6­
1/2% of the final award value in respect of
both   Non­Agricultural   land   and   Agricultural
land.   With   a   view   to   avoiding   any
inconvenience to the owners of the land who
have willingly parted   with their land  and
to   ensure   timely   and   regular   payments   of
rental compensation, the following procedure
should be adopted.”
6. By the subsequent Resolution dated 2nd  April, 1979 the
State Government decided to increase the percentage from 6­Page 5
5
1/2%     to   8%   for   working   out   the   amount   for   payment   of
rental compensation, which reads as follows:
“GOVERNMENT OF MAHARASHTRA
Irrigation Department,
Resolution No.IND.1078/1014/IMG­(3)
Sachivalaya, Bombay 400032,
Dated 2nd April, 1979.
Read: Government   Resolution,   Irrigation
and   Power   Department,   No.IPM.
1069/20083/I(5), dated Ist December, 1972
Resolution:   The   question   of   raising   the
percentage of rental compensation admissible
to the title holders of the lands during the
period   from   the   date   of   taking   over   the
possession   of   their   lands   by   private
negotiations till the payment of final award
was   under   the   consideration   of   Government
for   some   time   past.   Government   is   now
pleased   to   increase   the   percentage   from   6­
1/2%   to   8%   laid   down   for   working   out   the
amount for payment of rental compensation in
paras   6   and   7   of   Government   Resolution,
Irrigation   and   Power   Department,
No.IPM.1069/20083­I(5),   dated   Ist   December,
1972 with effect from Ist January, 1979.”
7. The State Government by its Resolution dated 24th March,
1988 directed the authorities to pay rental compensation on
time   else   the   amount   is   payable   towards   interest.   The
relevant   portion   of   the   said   Resolution   is   quoted
hereunder:
“3. It   has   come   to   the   notice   of   the
Government  that the directions given in the
aforesaid   Government   Resolutions   are   not
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being   followed   properly.   As   a   result,   the
land   owners   are   facing   harassment   and
inconvenience.   Due   to   the   delay   in   sending
proposal   for   acquisition   of   lands   where
possession   has   been   taken   through   private
negotiations,   the   amounts   payable   towards
interest   and   rental   compensation   have
increased.
4. In   view   of   the   amendment   of   the   Land
Acquisition   Act,   1894   and   the   time   limits
specified for the acquisition of land as also
in view of Section 4(1) of the Act and the
increase in the amount of solatium from 15%
to 30%, special attention is required to be
given   to   the   completion   of   process   of
acquisition quickly.” 
8. The respondent­State required the land of the appellant
for construction of flood protection wall for the city of
Akola and after negotiations the appellant handed over the
possession of his land on 15th November, 1998 to the State.
Subsequently,   Notification   under   Section   4   of   the   Land
Acquisition Act,  1894,  was published on 3rd  June,  1999 in
respect   of   said   land,   followed   by   Notification   under
Section 6 of the Act published on 18th  November, 1999. The
Special   Land   Acquisition   Officer   by   his   award   dated   4th
August,   2000   determined   the   compensation   at   the   rate   of
Rs.5,61,000/­ per hectare and awarded total compensation of
Rs.9,45,173/­ in favour of  appellant.
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9. Aggrieved   by   the   award,   the   appellant   filed   an
application under Section 18 of the Act which on reference
registered   as   LAC   No.140/2000   in   the   Court   of   District
Judge,   Akola.   During   the   pendency   of   the   said   reference
case,   the   appellant   received   a   sum   of   Rs.59,998/­   on   7th
August,   2001   towards   rental   compensation.   The   amount   was
calculated at the rate of 8% of the compensation awarded by
the Land Acquisition Officer.   The Reference Court by its
award   dated   2nd  August,   2008   allowed   the   application   and
enhanced   the   rental   compensation   @   8%   per   annum   on
Rs.1,07,82,270/­ with interest at the rate of 9% from 12th
October, 2000 to 11th October, 2001 that is for one year and
interest at the rate of   15% per annum, thereafter, till
the date of actual payment. 
10. Aggrieved   by   the   enhancement,   the   State   Government
preferred First Appeal No.06/2009 before the High Court of
Bombay. In the said appeal, the High Court passed interim
order   on   28th  January,   2009   staying   operation,
implementation   and   execution   of   the   order   passed   by   the
Reference Court on the condition of depositing 50% of the
amount   granted   by   the   Reference  Court.    The  First   Appeal
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No.06/2009 is still pending before the High Court for its
decision.
11. The appellant was also not happy with the award passed
by   the   Reference   Court,   therefore,   he   preferred   First
Appeal No.1210/2008, which is also pending before the High
Court.
12. During   the   pendency   of   the   appeals,   the   appellant
applied   to   the   3rd  respondent   for   grant   of   rental
compensation on the basis of enhanced compensation awarded
by the Reference Court by its order dated 2nd August, 2008.
As no reply was received by the appellant he filed a Writ
Petition   No.2763/2009   before   the   High   Court   of   Bombay,
Bench at Nagpur.  The said writ petition was disposed of on
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th  July,   2009   recording   the   statement   of   the   Assistant
Government   Pleader   that   the   application   of   the   appellant
would   be   decided   on  merits   at   the   earliest.     Thereafter,
the 3rd respondent on consideration of the said application,
by his letter dated 5th October, 2009 rejected the prayer on
the   ground   that   the   order   of   Reference   Court   was   under
challenge   before   the   High   Court.   Against   the   order   of
rejection   the   appellant   preferred   Writ   Petition
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No.3883/2010,   before   the   High   Court   of   Bombay,   Bench   at
Nagpur.   In   the   said   case,   the   Special   Land   Acquisition
Officer,   4th  respondent   filed   an   affidavit   assailing   the
order   passed   by   Reference   Court.   According   to   the
appellant,   there   is   no   statement   made   in   the   said   reply
that   the   appellant   was   not   entitled   for   enhanced   rental
compensation   on   the   basis   of   compensation   awarded   by   the
Reference   Court.     The   High   Court   allowed   the   said   writ
petition by order dated 5th  October, 2010 referring to the
decision of this Court in  State of Maharashtra and others
vs.   Maimuma   Banu   and   others,   (2003)   7   SCC   448.  As   the
Division Bench ordered to pay enhanced rental compensation
to   the   appellant   as   per   award   passed   by   the   Reference
Court,   the   respondents   filed   a   review   petition   for
recalling   the   order   dated   5th  October,   2010.     It   was
submitted that the order was passed by the High Court on
wrong   interpretation   of   decision   in  Maimuma   Banu   (supra)
and   that   there   is   an   error   apparent   on   the   face   of   the
record.
13. On   notice   and   hearing   the   parties,   the   High   Court
passed   the   impugned   order   dated   15th  September,   2011,Page 10
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recalling   its   earlier   order   dated   5th  October,   2010.   The
following   direction   has   been   issued   in   place   of   earlier
order:
“In the result, the judgment and order dated
5/10/2010 is reviewed and set aside. Instead
we   direct   the   State   of   Maharashtra   to
deposit   as   rental   compensation   8%   of   the
amount of Rs.1,07,82,270/­, in First Appeal
No.6/2010,   which   is   the   compensation   as
enhanced   by   the   Reference   Court   in   this
Court   for   the   period   from   15/11/1998   i.e.
the date of taking possession till the date
of   the   award   i.e.   4/8/2000.   The   original
petitioner   Kazi   Akiloddin   Sujaoddin   may
withdraw   the   half   amount   deposited   by   the
State   upon   furnishing   security   to   the
satisfaction of the Registrar. The remaining
amount   shall   be   kept   in   F.D.R.   of   a
nationalized bank pending the litigation.
6. Four   weeks   time   is   granted   to   deposit
the above said amount.
7. Order accordingly.”
14. Learned   counsel   for   the   appellant   contended   that   the
appellant is entitled for the enhanced rental compensation
proportionate   to   the   increase   in   compensation   awarded   by
the Reference Court. As per the policy of the respondent­
State, the claimant is entitled to rental compensation at
the rate of 8% of the amount of compensation awarded to the
claimant for acquisition of his land.  Circulars issued by
the State do not limit the rental compensation to 8% of thePage 11
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amount   awarded   by   the   Land   Acquisition   Officer.   The
resolutions do not stipulate that the rental compensation
should not be enhanced proportionate to the enhancement of
compensation   awarded   by   the   Reference   Court   or   higher
courts.
15. Learned   counsel   for   the   appellant   further   contended
that   the   High   Court   committed   a   grave   error   in   deciding
against the appellant by   reviewing its own order on the
basis of judgment of this Court in State of Maharashtra and
others vs. Maimuma Banu and others, (2003) (7) SCC 448.
16.   Per   contra,   according   to   the   respondents,   the
Reference   Court   enhanced   the   compensation   exorbitantly.
Therefore,   the   State   Government   was   left   with   no   other
option   but   to   challenge   the   award   by   filing   the   first
appeal, registered as First Appeal No.06/2009.
17. In  Maimuma   Banu   (supra)  this   Court   noticed   that   the
State of Maharashtra by   its resolutions and instructions,
contained   in the circulars dated 1st  December, 1972, 17th
September,   1977,   2nd  April,   1979   and   24th  March,   1988
provided   for   rental   compensation,   payable   to   the   title­Page 12
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holders  of   the   lands.     Apart   from   those  resolutions,   the
provisions   of   the   Land   Acquisition   Act,   1894     do   not
contemplate   payment   of   any   rental   compensation.     In   the
said   case   of  Maimuma   Banu   (supra)  the   Court   decided   the
question   relating   to   the   ‘payment   of   interest   on   rental
compensation’awarded   to   the   persons   whose   lands   were
acquired under the Land Acquisition Act, 1894; this Court
in the said case also held as follows:
“9.............It   is   not   in   dispute   that
in most of the cases the rental compensation
has not been paid. 
If that factual position
continues,   it   clearly   is   a   case   where   the
amount   to   which   a   person   is   entitled   is
withheld without any legitimate excuse.
 The
learned   counsel   for   the   appellants
strenuously urged that in most of the cases
the   proceedings   have   not   yet   attained
finality   and   are   pending   either   before   the
Reference Court or in appeal.  
That does not
provide   a   legitimate   excuse   to   the
appellants to withhold payment of the rental
compensation.   
The   amount   calculated   on   the
basis   of   award   by   the   Land   Acquisition
Officer cannot be below than the  amount to
be   ultimately   fixed.   
If   in   appeal   or   the
reference   proceeding,   there   is   any
variation,  the same can be  duly taken note
of   as   provided   in   law.   
There   is   no
difficulty   and   we   find   none   as   to   why   the
compensation   on   the   basis   of   value
determined   by   the   Land   Acquisition   Officer
cannot be paid. 
If there is upward revision
of the amount, the consequences will follow
and   if   necessary,   redetermination   of   the
rental   compensation   can   be   made   and   after
adjustment   of   the   amount   paid,   if   any,
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balance can be  paid.  
If, however, the Land
Acquisition   Officer's   award   is   maintained
then nothing  further may  be required  to be
done. In either event, payment of the rental
compensation   expeditiously   would   be   an
appropriate   step.  
Looking   at   the   problem
from another perspective, one thing is clear
that   authorities   have   clearly   ignored   the
sense of urgency highlighted in the various
resolutions.”
18. From the aforesaid decision of this Court,
it is clear
that   during   the   pendency   of   a   reference   proceeding   or
appeal before a Higher Court the rental compensation is to
be     determined   on   the   basis   of   award   passed   by   the   Land Acquisition   Officer.   Subsequently,   if   there   is   upward revision   of   amount,   consequences   will   follow   and   if necessary ,re­determination   of   the   rental
compensation can be made and after adjustment of the amount
paid, if any, balance can be paid. 
19. In the present case, we find that the State Government
along   with   the   appellant   is  not  satisfied   with   the   award
passed   by   the   Reference   Court   and   hence,   two   appeals
against the said award by both parties are pending before
the High Court of Bombay, Nagpur Bench for determination.
Giving reference to the decision in Maimuma Banu (supra) it
was not open to the High Court to direct the authorities to
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pay   rental   compensation   as   per   award   passed   by   the
Reference   Court.   
For   the   reason   aforesaid,   if   the   High
Court   recalled   the   order   dated   5th  October,   2010   and
directed   the   State   Government   to   deposit   rental
compensation at the rate of 8% of the amount awarded by the
Reference   Court   with   the   appellate   Court,   allowing   the
appellant   to   withdraw   the   half   of   the   amount,   no
interference is called for.   
However, this order will not
stand in the way of appellant to claim proportionate higher
rental compensation, if the order of the Reference Court is
upheld   or   further   enhancement   of   compensation   is   made   by the Appellate Court.
20.   We find no merit in this appeal. It is, accordingly,
dismissed with observations as made above. No costs.
………..……………………………………………..J.
( T.S. THAKUR )
...……………………………………………………….J.
NEW DELHI,            ( SUDHANSU JYOTI MUKHOPADHAYA)
JULY 3,  2013.