GODAVARI SUGAR MILLS LTD. versus THE STATE OF MAHARASHTRA & ORS.

Citation: [2011] 2 S.C.R. 180 · Decided: 20-01-2011 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Case Partly allowed
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Judgment (excerpt)

A 
B 
[2011] 2 S.C.R. 180 
GODAVARI SUGAR MILLS LTD. 
V. 
THE STATE OF MAHARASHTRA & ORS. 
(Civil Appeal No.819 of 2011) 
JANUARY 20, 2011 
[R.V. R"\VEENDRAN AND A.K. PATNAIK, JJ.] 
Constitution of India, 1950: Article 226 - Scope of -
Acquisition of land - Writ petition seeking declaration that total 
C uompensation including interest for acquisition @ 3% per 
annum was unjust and unreasonable and seeking mandamus 
to pay the compensation with interest at 9% per annum from 
the date of surrender of possession to date of actual payment 
- Maintainability of - Held: Writ petition is of a public law 
o character as it related to the public law functions on the part 
of the state government and its officers, and therefore 
maintainable. 
Maharashtra Agricultural Lands (Ceiling on Holdings) 
E Act, 1961: s.26- Award of interest@ 3% per annum on the 
compensation - Held: s. 26 contemplates the payment of 
compensation with interest at 3% per annum in annual 
instalments spread over a period of 20 years or at the end of 
20 years - Rate of interest can be only at 3% per annum for 
a period of 20 years from the date of taking possession - s. 26 
F is silent about the rate of interest payable, if the compensation 
is not paid within 20 years - For the period beyond 20 years, 
the said provision regarding interest will cease to apply and 
the general equitable principles relating to interest will apply; 
and interest can be awarded at any reasonable rate, ii, the 
G discretion of the court - In the instant case, interest @ 6% per 
annum, beyond 20 years found to be appropriate. 
The appellant was the owner of large extent of 
sugarcane land. A Notification was issued on 15.6.1961 
H 
180 
GODAVARI SUGAR MILLS LTD. v. STATE OF 
181 
MAHARASHTRA & ORS. 
under Section 21 of the Maharashtra Agricultural Lands 
A 
(Ceiling on Holdings) Act, 1961 declaring that the 
appellant held surplus agricultural land. The possession 
of surplus land was thereafter taken. On 13.11.1978, the 
appellant submitted its claim in regard to the said land 
with interest @ 9% per annum. On 13.12.2001, B 
proceedings for determination of compensation were 
commenced and award was made on 30.3.2005 with 
interest @ 3% per annum. Aggrieved by the interest rate, 
the appellant filed writ petition. The High Court dismissed 
the writ petition on the ground that since the prayer was c 
made only for payment of money by way of interest, the 
writ petition was not entertainable. 
The questions which arose for consideration in the 
instant appeal was whether the writ petition -was· for 
"recovery of money" and therefore not maintainable; and 
D 
whether the authority was justified in awarding interest 
@ 3% per annum only on the compensation payable 
under Sect!on 25 of the Act. 
Partly allowing the appeal, the Court 
HELD: 1.1. The wri~ petition was for a declaration that 
E 
the Notice dated 30.3.2005 informing the appellant that 
total compensation including interest for acquisition of 
12127.4 acres of land as Rs.88,77,538/- was unjust and 
arbitrary and discriminatory insofar as it offered interest F 
only at the rate of 3% per annum on the compensation 
amount and for a mandamus to pay the compensation 
with interest at 9% per annum from the date of surrender 
of possession to date of actual payment. The writ petition 
was of a public law character as it related to the public G 
law functions on the part of the state government and its 
officers, and, therefore, maintainable. [Para 6) [187-G-H; 
188-A-B, E] 
Suganmal v. State of MP • AIR 1965 SC 1740; UP 
H 
182 
SUPREME COURT REPORTS 
[2011] 2 S.C.R. 
. 
A Pollution Control Board v. Kanoria Industrial Ltd. 2001 (2) 
SCC 549; ABL International Ltd v. Export Cr.edit Guarantee 
Corporation of India Ltd. 2004 (3) SCC 553 .., referred to. 
1.2. Normally a petition under Article 226 of the 
8 Constitution of India will not be entertained to enforce a 
civil liability arising out of a breach of a contract or a tort 
to pay an amount of money due to the claimants. The 
aggrieved party will have to agitate the question in a civil 
suit. But an order for payment of money may be made in 
C a writ proceeding, in enforcement of statutory functions 
of the State or its officers. [Para 7(i)] [189-8-C] 
Burmah Construction Co. v. State of Orissa (1962) Supp 
1 SCR 242 - relied on. 
D 
1.3. If a right has been infringed - whether a 
fundamental right or a statutory right - and the aggrieved 
party comes to the court for e
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