STATE OF MAHARASHTRA AND ORS. versus MAIMUMA BANU AND ORS.

Citation: [2003] SUPP. 2 S.C.R. 228 · Decided: 05-08-2003 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Case Partly allowed

Judgment (excerpt)

A 
B 
ST ATE OF MAHARASHTRA AND ORS. 
v. 
MAIMUMA BANU AND ORS. 
AUGUST 5, 2003 
[S.N. VARIAVA AND ARIJIT PASAYAT, JJ.] 
Land Acquisition Act, 1894-Sections 4 and 6-Land Acquisition by 
private negotiation-Land acquired prior to Notification under Section 4-By 
C Government resolutions payment of rental compensation provided-Writ 
petition claiming payment of rental compensation with interest for the delay 
in payment-High Court directed payment of compensation with interest on 
analogy of other provisions of the Act-On appeal, held: Rental compensation 
not relatable to the Act-Hence High Court's reliance on the provisions to 
grant interest not justified-However, in view of equity, it would be appropriate 
D to pay interest at the rate of 6%. 
Lands of the respondent-land owners were acquired by appellant-
State by private negotiations prior to issuance of notification under Section 
4 of Land Acquisition Act, 1894. Subsequently, notification under Section 
6 was also issued. State Government by several resolutions and instructions 
E provided that where possession of lands were taken by private negotiations 
rental compensation would be paid. Land owners filed writ petition 
making grievance that after taking possession of the land no rental 
compensation was either being paid or there was delay in maldng payment 
They also claimed interest for such delayed payment High Court held that 
F the non-payment of rental compensation within the time amounted to 
deprivation of valuable property without due payment thereof and relying 
on sections 17(3-A), 23(1-A) and 28 of the Act directed the Government 
to pay the rental compensation with interest thereon. 
In appeal to this Court, appellant-State contended that there was 
G no question of granting any interest on the rental compensation as there 
was no entitlement for any rental compensation; and that the reliance by 
High Court on Sections 17(3-A) or 23(1-A) to grant interest by analogy 
was unjustified. 
Partly allowing the appeal, the Court 
fl 
228 
ST A TE v. MAIMUMA BANU 
229 
HELD: 1. The resolutions adopted by the Government were intended A 
to benefit the land owners whose lands were acquired. To avoid 
unnecessary delays in payment urgency for follow up action was indicated 
in the resolutions. To that extent, the land owners are on terra firma. But 
legally the land owners are not entitled to any interest. There is no 
provision either in the resolutions or in the statutes concerned which B 
entitles the land owners to payment of interest. Whatever is statutorily 
payable has been clearly indicated in the Act itself. Section 23(1-A) of the 
Act was introduced by Amendment Act of 1984. Rental compensation is 
not relatable to the Act. The entitlement of the claimants is on the basis. 
of Government's resolutions i.e. on the basis of executive orders. 
[232-G-H; 233-A) C 
2. Appellants are correct in their stand to the extent that the liability 
for rental compensation does not have its source under the Act. Therefore, 
the logic of Sections 17(3-A), 23(1-A), Section 28 of the Act and Section 
34 has no application in law to rental compensation. [233-B) 
3. The possession of land was taken long years back. Thereafter, 
D 
the land owner does not practically possess any right over the land in 
question except to the compensation as statutorily provided for. But it 
would be illogical and improper to turn Nelson's eye to the factual position. 
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 E 
the amount to which a person is entitled is withheld without any legitimate 
excuse. That does not provide a legitimate excuse to the appellan(-; to 
withhold payment of the rental compensation. The amount calculated on 
the basis of award by the Land Acquisition Officer cannot be below the 
amount to be ultimately fixed. If in appeal or the reference proceeding, p 
there is any variation, the same can be duly taken note of as provided in 
law. There is no difficulty as to why the compensation on the basis ofvalue 
determined by the Land Acquisition Officer cannot be paid. If there is 
upward revision of the amount, the consequences will follow and if 
necessary re-determination of the rental compensation can be made and 
after adjustment of the amount paid, if any, balance can be paid. If G 
however, the Land Acquisition Officer's award is maintained then nothing 
f

Excerpt shown. Read the full judgment & AI analysis in Lexace.