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Monday, July 25, 2016

Section 34 of the Land Acquisition Act - whether, after entering into an agreement under the Rules of 1997 and accepting the agreed amount without any protest or demand for further interest, the appellant can claim interest on the ground of Section 34 of the Act for the period that had already lapsed between taking of possession and signing of the agreement/payment of compensation. = analysis of Section 11 as well as Section 23 = Section 23 is for guidance of the court which gets jurisdiction to determine compensation afresh only if there is a protest against the award and the payment is received with protest. This section does not control the determination of just compensation by the Collector under Section 11 which requires the Collector to enquire into objections (if any) on different issues such as measurement and interests of the person claiming compensation and then further requires the collector to make an award which is required to reflect, interalia, “the compensation which in his opinion should be allowed for the land.” But it is more appropriate and relevant to notice sub-section 2 of Section 11 which is as follows: “Notwithstanding anything contained in sub-section (1), if at any stage of the proceedings, the Collector is satisfied that all the persons interested in the land who appeared before him have agreed in writing on the matters to be included in the award of the Collector in the form prescribed by rules made by the appropriate Government, he may, without making further enquiry, make an award according to the terms of such agreement.” This sub-section begins with a non-obstante clause which makes it free of the requirements of sub-section (1) if all the persons interested in the land agree in writing as to what matters should be included in the award of the Collector. Thereupon the Collector is competent to make an award as per agreement without making further enquiry. In view of such clear provision that permits agreement to determine all the matters to be included in the award, all the inclusions and omissions in the consent award must be treated as based upon agreement of the parties and the final amount determined by way of agreement must be taken as a completely just compensation inclusive of the statutory interest payable to the claimant for the concerned land at least on the date of agreement. Since the agreed compensation amount is accepted without protest with a clear stipulation not to claim any additional amount, it has to be deemed that the compensation reflected in the consent award has taken into account all relevant factors including interest till the date of agreement. Moreover the right to seek reference for enhancement itself gets lost by accepting the compensation without protest especially when there is an agreement that the land owner shall not claim any amount in addition to the amount agreed upon as compensation and shall accept the compensation without any protest. In such circumstances agreed amount has to be treated as a just compensation permitting no addition or substitution whatsoever. In other words, not only the remedy under the Act of seeking enhancement is lost but the substantive cause of action also vanishes when the land owner agrees for a consent award and the amount of compensation is accepted without any protest.Equitable considerations also cannot help the appellant because the agreed amount was paid without any delay, on the date of agreement itself. Notably, the award passed on the basis of agreement with the appellant stipulates the amount of compensation at Rs. 329.76 per Sq.Yd. However, in the case of other claimants under the same Notification who had not entered into such agreement, the rate was fixed at Rs. 50.57 per Sq.Yd. with 30% solatium and 12% interest from the date of taking possession. Thus, the agreement with the appellant was a package with regard to the compensation amount voluntarily accepted by the appellant without any demur. The argument of equitable consideration is, therefore, misplaced and ill- advised. In view of aforesaid discussion and particularly in view of judgments of this Court in the case of Daya Shamji Bhai and in Sangappa Dyavappa Biradar, we find no error in the order of the High Court rejecting the claim of the appellant. As a result the appeal must fail. It is therefore dismissed but without costs.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO. 13324 OF 2015


Ranveer Singh                                       …..Appellant

                       Versus

State of U.P. Through Secy. & Ors.              ...Respondents



                               J U D G M E N T

SHIVA KIRTI SINGH, J.

1.    This appeal arising out of special leave has  been  preferred  by  the
original writ petitioner whose land was acquired by the authorities  of  the
State of Uttar Pradesh under the provisions of  Land Acquisitions Act,  1894
(hereinafter referred as ‘the  Act’)  on  the  basis  of  an  agreement  for
compensation  dated  27.2.2003   followed  by  instant   payment   of   such
compensation. The appellant subsequently claimed interest under  Section  34
of the Act from the date 15.2.2001 when admittedly  the  possession  of  the
land was taken over by the State Authorities and till  27.2.2003,  the  date
of payment.  The claim was rejected by the concerned District Magistrate  of
Gautam Budh Nagar vide an order dated 6.8.2005 passed pursuant to  order  of
High Court dated 12.04.2005 in appellant’s earlier  writ  petition  No.38951
of 2002.  That claim again made through  subsequent  writ  petition  bearing
No. 60992 of 2005 has been rejected on merits  by  the  judgment  and  order
under appeal passed by the Division Bench of the High  Court  of  Judicature
at Allahabad on 22.5.2014.
2.    There is no material dispute over facts and hence it would suffice  to
notice that as per pleadings of the parties, appellant’s land  in  Plot  No.
203, area 30 bigha 12 biswa and plot  No.  209,  area  1  biswa  in  village
Parthala, Khanjarpur District Gautam  Budh  Nagar  (U.P.)  was  acquired  by
issuing notification under Section 4 read with  Section  17  dated  1.6.2000
and a  declaration  under  Section  6  dated  30.12.2000  of  the  Act.  The
possession of the land was taken  on  15.2.2001.  After  taking  possession,
proceedings for determination of payment of compensation  on  the  basis  of
agreement  was  initiated.   On  account  of  information  received  by  the
Additional District Magistrate Land Acquisition  Noida,  Gautam  Budh  Nagar
from DGC (Civil) that appellant had land in excess  of  the  ceiling  limit,
inquiries and opinion for  entering  into  an  agreement  became  necessary.
Ultimately on 7.2.2003 it became clear that appellant had no land in  excess
of the ceiling area and that cleared the path for signing the  agreement  on
27.2.2003 for payment of compensation in terms of  agreement  as  per  Uttar
Pradesh Land Acquisition (Determination of Compensation and  Declaration  of
Award by Agreement) Rules, 1997 (hereinafter referred to as  the  “Rules  of
1997”). As agreed, the entire compensation of Rs.1,37,58,350/- was  paid  on
the same date.  The appellant accepted the said amount without any demur  or
protest.  At that time the  earlier  writ  petition  No.38951  of  2002  for
claiming compensation was pending.  Claim for interest under Section 34  was
subsequently added in that writ petition  through  an  amendment.  The  writ
petition  was  disposed  of  with  liberty  to  the  petitioner  to  file  a
representation and as noticed earlier the same was rejected by the  District
Magistrate by a speaking order dated 6.8.2005.
3.    In the aforesaid facts the sole issue for determination remains as  to
whether, after entering into an  agreement  under  the  Rules  of  1997  and
accepting the agreed amount  without  any  protest  or  demand  for  further
interest, the appellant can claim interest on the ground of  Section  34  of
the Act for the period that had already lapsed between taking of  possession
and signing of the agreement/payment of compensation.   Section  34  of  the
Land Acquisition Act, 1894 reads as under:-
    “ 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, 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 compensation or part thereof which has not been paid or  deposited
before the date of such expiry.]”

4.    The appellant relied heavily upon the aforesaid provision  of  law  to
support his claim for interest.  In addition,  learned  senior  counsel  has
raised a plea based  on  equity  that  there  is  no  good  reason  why  the
appellant should not be compensated for loss of possession when there  is  a
considerable delay in entering into agreement and payment  of  compensation.
It has been  further  urged  that  the  District  Magistrate  has  erred  in
rejecting the representation of the appellant. On the  other  hand,  learned
counsel for the respondent has defended the judgment of the  High  Court  by
submitting that it suffers from no error of fact or  law.   He  pointed  out
that  as  per  the  agreement,  the  appellant  accepted  to   receive   the
consolidated amount which included components of additional  amount  at  the
rate of 12% and solatium at the rate of 30% contemplated under various  sub-
sections of Section 23 of the Act and thereafter in the same  agreement,  as
an owner he agreed that he shall not claim any amount  in  addition  to  the
amount agreed upon  as  disclosed  in  the  agreement  as  compensation  and
accepted the amount without any protest.   The  relevant  clause  3  in  the
agreement is as follows:
“Clause 3.- That the owner and the interested  party  shall  not  claim  any
amount in addition to the amount agreed upon as  aforesaid  as  compensation
and accept it without any protest.”

5.    It has been also urged by the learned counsel for the State  that  the
appellant was free to take benefit of all provisions of  the  Act  including
Section 34 by opting for an usual award under Section 11(1) of the  Act  but
instead he chose to  accept  the  expeditious  route  of  entering  into  an
agreement and getting the payment immediately as  per  the  Rules  of  1997.
Thereafter, as per agreement  he  is  debarred  from  claiming  any  further
amount or to raise any protest before any forum on any basis,  including  on
account of interest.
6.    Learned senior counsel for the appellant has placed reliance upon  the
judgment in the case of Shree Vijay Cotton & Oil Mills  Ltd.  vs.  State  of
Gujarat[1], particularly Paragraph 14 thereof.  In paragraph 14  this  court
pointed out the failure of the high Court in not appreciating the  mandatory
provisions of  Section  34  of  the  Act.   That  was  a  case  of  ordinary
acquisition as per provisions of the Act wherein amount of compensation  was
determined in regular manner and not by any agreement.  Further,  there  was
no resort to urgency clause in terms of Section 17 of the Act nor there  was
any issue as to entitlement of interest under Section  34.   The  claim  had
been wrongly denied by the District Judge on a reference  under  Section  18
and  the  High  Court  also  rejected  the  same  by  dismissing  the  cross
objections as barred by limitation and on principle of res  judicata.   This
Court, in the facts of that case held that the land owner was  entitled  for
interest as per mandatory provisions of Section  34  of  the  Act.  But  the
defence in the present case is entirely different and  is  not  affected  by
the aforesaid judgment.
7.    On behalf of the respondent-State reliance has been  placed  upon  the
following two judgments (1) State of Gujarat and Ors. Vs. Daya  Shamji  Bhai
and Ors.[2] and (2) State of  Karnataka   and  Anr.  vs.  Sangappa  Dyavappa
Biradar and Ors. [3].
8.    In Daya Shamji Bhai  after  the  notification  for  acquisition  under
Section 4(1), the land owners agreed in writing to accept  the  compensation
determined by the Land Acquisition Officer along with 25% enhancement.  With
such consent they also agreed that they will  not  go  to  any  court  under
Section 18 of the Act. Accordingly the land owners were  paid  in  terms  of
the agreement.  In  spite  of  such  agreement  the  land  owners  sought  a
reference to which the State objected.  The  reference  court  rejected  the
contention of  the  State  on  the  ground  that  the  agreements  were  not
registered under  the  Registration  Act  and  the  land  owners  could  not
contract out from statute. In the background facts noted  above  this  Court
held in favour of the State that the  agreement  was  permitted  under  sub-
section 2 of Section 11 which gives right to the parties to  enter  into  an
agreement  to  receive  compensation  under  Section  11  in  terms  of  the
contract. Such contract was  held  to  be  conclusive  and  binding  on  the
parties and therefore  the  land  owners  were  not  entitled  to  seek  any
reference for enhancement of the compensation. It was  clarified  that  when
compensation is received under protest only then Section 18 gets  attracted.
In paragraph 8 of the report the issue of awarding  interest  and  statutory
benefits was also decided against the land owners in following terms:-

“8. The question of awarding interest and  statutory  benefits  arises  when
the civil court finds  that  the  amount  of  compensation  awarded  to  the
landowners by the Collector is not adequate and the prevailing market  value
is higher than the market value determined by the Land  Acquisition  Officer
under Section 23(1). For entitlement to solatium  under  Section  23(2)  “in
addition to” market value the court shall award solatium. Under Section  28,
if the court gets power to  award  interest,  when  court  opines  that  the
Collector “ought to have awarded compensation in excess  of  the  sum  which
the Collector did award (sic)  the  compensation”.  In  other  words,  valid
reference under Section 18  confers  jurisdiction  on  the  civil  court  to
consider whether the compensation awarded  by  the  Collector  is  just  and
fair. Thereafter, when it finds that the Collector  ought  to  have  awarded
higher compensation, the civil court gets jurisdiction  to  award  statutory
benefits on higher compensation from the date of taking possession only.  In
view of the specific contract made by the respondents in  terms  of  Section
11(2), they are not entitled to seek a reference.  Consequently,  the  civil
court is devoid of jurisdiction to go  into  the  adequacy  of  compensation
awarded by the Collector or prevailing  market  value  as  on  the  date  of
notification under Section 4(1) to determine the compensation under  Section
23(1) and to grant statutory benefits.” (emphasis added)

9.    In Sangappa Dyavappa Biradar reliance  was  placed  upon  Daya  Shamji
Bhai and the same principles were reiterated by holding that an  application
for reference  to  civil  court  is  maintainable  only  if  there  is  non-
acceptance of  the   award  by  the  awardee.  Once  parties  agree  to  the
compensation payable and consent award is passed, the same  would  bind  the
parties unless it is set aside in appropriate  proceedings  by  a  court  of
competent  jurisdiction.  The  consent  award   accepted   without   protest
extinguishes the legal right to maintain  a  reference  for  enhancement  of
compensation,  more  so  when  the  land  owners  agreed  not  to  seek  any
enhancement. In that case also the land owners had agreed  that  they  would
not approach any court for enhancement of compensation and had received  the
amount of compensation in terms of the consent award  in  full  satisfaction
of their claim. After being unsuccessful before the reference court  and  in
writ petition before the Single Judge, the land owners  got  relief  by  the
Division Bench of the High Court on the ground that in any event they  could
not be deprived of their statutory right of obtaining solatium and  interest
in terms of the Act. The High Court’s direction for payment on the basis  of
such statutory provisions was set  aside  by  this  Court  by  holding  that
applications under Section 18 were not maintainable. The land owners  having
accepted the award, were estopped from maintaining  the  applications.  This
Court further held that the  High  Court  also  had  no  jurisdiction  under
Article 226  to  substitute  the  consent  award  by  directing  payment  of
statutory solatium and interest. It flows from this judgment that by  virtue
of the agreement, right to receive solatium  and  interest  can  be  waived.
Further, when the land owners agreed that they would  not  seek  enhancement
of compensation by claiming any amount in  addition  to  the  amount  agreed
upon and that they would accept the agreed amount without any  protest,  the
High Court could not  have  substituted  the  award  by  permitting  further
enhancement on any ground.
10.   The main thrust of arguments advanced on the behalf of the  appellant,
particularly to get rid of the difficulty in  his  way  on  account  of  the
aforesaid two judgments is that the land  owner  agreed  not  to  claim  any
amount beyond the agreed amount as compensation and therefore the  appellant
is free to claim any further amount as interest under Section 34 of the  Act
because such interest is not and  cannot  be  included  as  a  component  of
compensation which is determined by the Collector under Section  11  of  the
Act while making the award. Further submission on behalf  of  the  appellant
is  that  various  matters  which  require  consideration   in   determining
compensation by court under Section 23 of the Act do  not  include  interest
contemplated by the Section  34  of  the  Act  which  is  payable  when  the
compensation is not paid or deposited on or before taking the possession  to
the land.
11.   On its face the aforesaid contentions appears to be attractive but  on
a closer analysis of Section 11 as well as Section 23 it is  found  to  have
no merits. Section 23 is for guidance of the court which  gets  jurisdiction
to determine compensation afresh only if there  is  a  protest  against  the
award and the payment is  received  with  protest.  This  section  does  not
control the determination  of  just  compensation  by  the  Collector  under
Section 11 which requires the Collector to enquire into objections (if  any)
on different  issues  such  as  measurement  and  interests  of  the  person
claiming compensation and then further requires the  collector  to  make  an
award which is required to reflect, interalia, “the  compensation  which  in
his opinion should be allowed for the land.” But it is more appropriate  and
relevant to notice sub-section 2 of Section 11 which is as follows:
      “Notwithstanding anything contained in  sub-section  (1),  if  at  any
stage of the proceedings, the Collector is satisfied that  all  the  persons
interested in the land who appeared before him have  agreed  in  writing  on
the matters to be included in  the  award  of  the  Collector  in  the  form
prescribed by rules made by the  appropriate  Government,  he  may,  without
making further enquiry, make  an  award  according  to  the  terms  of  such
agreement.”

      This sub-section begins with a  non-obstante  clause  which  makes  it
free of the requirements of sub-section (1) if all  the  persons  interested
in the land agree in writing as to what matters should be  included  in  the
award of the Collector. Thereupon the Collector  is  competent  to  make  an
award as per agreement without making  further  enquiry.  In  view  of  such
clear provision that permits agreement to determine all the  matters  to  be
included in the award, all the  inclusions  and  omissions  in  the  consent
award must be treated as based upon agreement of the parties and  the  final
amount determined by way of agreement must be taken  as  a  completely  just
compensation inclusive of the statutory interest  payable  to  the  claimant
for the concerned land at least on the date of agreement. Since  the  agreed
compensation amount is accepted without protest  with  a  clear  stipulation
not  to  claim  any  additional  amount,  it  has  to  be  deemed  that  the
compensation reflected in the consent  award  has  taken  into  account  all
relevant factors including interest till the  date  of  agreement.  Moreover
the right to seek reference for enhancement itself gets  lost  by  accepting
the compensation without protest especially when there is an agreement  that
the land owner shall not claim any amount in addition to the  amount  agreed
upon as compensation and shall accept the compensation without any  protest.
In  such  circumstances  agreed  amount  has  to  be  treated  as   a   just
compensation permitting no addition or  substitution  whatsoever.  In  other
words, not only the remedy under the Act of seeking enhancement is lost  but
the substantive cause of action also vanishes when  the  land  owner  agrees
for a consent award and the amount of compensation is accepted  without  any
protest.
12.   Equitable considerations also cannot help the  appellant  because  the
agreed amount was paid without any delay, on the date of  agreement  itself.
Notably, the award passed on the  basis  of  agreement  with  the  appellant
stipulates the amount of compensation at Rs. 329.76 per Sq.Yd.  However,  in
the case of other claimants under the same Notification who had not  entered
into such agreement, the rate was fixed at Rs. 50.57  per  Sq.Yd.  with  30%
solatium and 12% interest from the date  of  taking  possession.  Thus,  the
agreement with the appellant was a package with regard to  the  compensation
amount  voluntarily  accepted  by  the  appellant  without  any  demur.  The
argument of  equitable  consideration  is,  therefore,  misplaced  and  ill-
advised.
13.   In view of aforesaid discussion and particularly in view of  judgments
of this Court in the case of Daya  Shamji  Bhai  and  in  Sangappa  Dyavappa
Biradar, we find no error in the order  of  the  High  Court  rejecting  the
claim of the appellant. As a result the appeal must fail.  It  is  therefore
dismissed but without costs.

………………………………..…….J.
                       [SHIVA KIRTI SINGH]


………………………………….…..J.
                             [A.M. KHANWILKAR]
New Delhi.
July 22, 2016.


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[1]     1991 (1) SCC 262
[2]     1995 (5) SCC 746
[3]     2005(4) SCC 264

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