UNION OF INDIA versus BUDH SINGH AND ORS.

Citation: [1995] SUPP. 2 S.C.R. 384 · Decided: 27-07-1995 · Supreme Court of India · Bench: K. RAMASWAMY, K.S. PARIPOORNAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
UNION OF INDIA 
v. 
BUDH SINGH AND ORS. 
JULY 27, 1995 
B 
[K. RAMASWAMY AND K.S. PARIPOORNAN, JJ.) 
Land Acquisition Act, 1894: Sections 4( 1), 28, "34 and 48(2) 
Land Acquisition-cqmpensation-lnterest-Possession of land taken 
C prior to notification under section 4( 1 )-Power of Court to award interest for 
period prior to publication of notification-Award of interest@l8% from the 
date of taking possession held not justified-Held Court has no power to 
award interest in excess of the rate prescribed by Act-Principles of justice 
equity and good conscience cannot be extended for awarding interest contraty 
to the Principles of Act. 
D 
E 
F 
G 
The land belonging to the respondents-was taken over by the Punjab 
Armed Police on March IS, 1963 for construction of its headquarters for 
which compensation was also paid. On a suit filed by the respondent-land· 
owners State's possession of land was declared illegal on the ground that 
the acquisition was not under Land Acquisition Act, 1894 and the respon· 
dents were directed to refund the compensation. The State's appeal as well 
. as second appeal was dismissed. Thereafter a notification under section 
4(1) was published on November 16, 1984 and the compensation award was 
also passed. In execution the High Court ordered that in case of default 
of payment within stipulated time 18% interest should be paid to the 
respondents from the date the possession of land was taken over. In appeal 
to this Court on the question whether the respondent-landowners are 
entitled to interest at 18% per annum from March 15, 1963, the date on 
which possession was initially taken, till November 16, 1984, preceding the 
date on which the notification under section 4(1) was published: 
Allowing the appeal, this Court 
HELD : 1. The High Court was clearly in error in directing payment 
of interest at 18% per annum and that too, from the date of taking 
possession. The respondents are entitled to interest @9% per annum on 
H enhanced compensation from 16th October, 1984. [389·8] 
384 
u.u.i. v. BUDH SINGH 
385 
2. The payment of interest under the Land Acquisition Act is square-
A 
ly covered by the provisions of the Act. The statute covers the entire field 
of operation of the liability of the State to make payment of interest and 
entitlement thereof by the owner when land has been taken over and 
possession in consequence thereof, the landowner was deprived of the 
enjoyment thereof. The Court has no power to impose any condition to pay B 
interest in excess of the rate and manner prescribed by the statute as well 
as for a period anterior to the publication of section 4(1) notification under 
the Act. The parameter for initiation of the proceedings is the publication 
of the notification under section 4(1) of the Act in the State Gazette or in 
an appropriate case in District Gazette as per the local amendments. But 
the condition precedent is publication of the notification under section C 
4(1) in the appropriate gazette. That would give legitimacy to the State to 
take possession of the land in accordance with the provisions of the Act. 
Any possession otherwise would not be considered to be possession taken 
under the Act. [386-G; 387-F-H; 388-A] 
Va/labhdas Naranji v. Development Officer Bandra, Indian Appeals 
Vol. LVI, 259 and The Revenue Divisional Officer, Trichinopoly v. 
Venkatarama Ayyar & Anr., ILR 49 Mad. 433 = AIR (1936) Mad. 199, 
distinguished. 
D 
State of Punjab v. Smt. Raminder Kaur, (1988) LACC 610, referred to. E 
3. The Land Acquisition Act is a self-contained code and common 
law principles of justice, equity and good conscience cannot be extended 
in awarding interest, contrary to the provisions of the statute. [388-C] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No.7413 of 
1995. 
From the Judgment and Order dated 21.7.93 of the Punjab & 
Haryana High Court in C.R. No. 3389 of 1990. 
A. Jayaram, P. Parmeswaran and Y.P. Mahajan for the Appellants. 
Rajeev Dawan, K.R. Nagaraja, R. Santhana Krishnan and Mrs. B. 
Rajani for the Respondents. 
The following Order of the Court was delivered : 
F 
G 
H 
386 
SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R. 
A 
Leave granted. 
B 
c 
This appeal by special leave arises from the order of the High Court 
of Punjab & Haryana dated July 21, 1993 made in Civil Revision No. 
3389/90. The facts are that possession of land measuring 81 kanals 3 marlas 
10 acres and 1 kanals 3 marlas was taken over by the Punjab Armed Police 
o

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