VLJAY COTION AND OIL MILLS (P) LTD. versus STATE OF GUJARAT

Citation: [1990] SUPP. 3 S.C.R. 447 · Decided: 06-12-1990 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Appeal(s) allowed

Judgment (excerpt)

VlJAY COTION AND OIL MILLS (P) LTD. 
V, 
STATE OF GUJARAT 
DECEMBER 6, 1990 
[KULDIP StNGH AND N.M. KASLIWAL, JJ.] 
Land Acquisition Act, 1894--Section 6(1), 23 & 26-Costs and 
inierest can be awarded 6y higher courts if not awarded by lower court. 
The appellant owned land in Kutch District and the Government 
A 
B 
of Gujarat took its possession on a specific understanding that in C 
exchange the Government would give Iii It land of equal value but the 
GoverDIDellt resiled aild issued a notification under section 6(1) of the 
Lalld Acquisition Act, 1894 straightaway declaring that the land in 
question was needed for public purpose. The collector awarded 
Rs.5,075/44 np as compel!Slition. At the instance ilf the appellant, a 
reference to the Court was made Under Section 18 of the Act and the D 
bistrict Judge deterniiiied the compensation at the rate of Rs.3 per sq. 
yard on the basis of the market value of the iand on the date of the 
notlfieatlon and paid sillatium and intere8t from that date. The State 
preferred an appeal against the award of the District Judge before the 
lligb Court but the appellant did not appeal against that part of the 
award which went agatnst him but rued Cross-objection5 wbicb being E 
time-barred were dismissed; lo the Cross-objections the appellant bad 
inter dlia clalined tnterest from November 19, 1949 the date when the 
land in question was taken over by the Government and not from 
Febrtiary l; 1955; the date when the notification under the Land Acqui-
sition Act was issued. The High Colirt riiied that the compensation 
i:Oiild only be ileterinined on ihe bashi of the market value of the land on F 
the date oftbe notificaiion issued un8et 4(i) of the Land Acquisition Act 
and since such a notification had not beeri issued tn the case, it was not 
possible to detertnine the amount Of ciitnpel!Slition payable to the appel-
lant. The clalinant appellant appealed to this Court on the strength oi'a 
certificate and this court beta that the notification dated February 1, 
1955 issued iiriiler Section Ii of the Act could be treated as a composite G 
notification both under Section 4(1) a!i also under Section 6(1) of the Act 
and the district Judge could lawfully award the market value of the 
land; SO holding, the Ciliirt remanded tbe matter to the High Court for 
disposal on merit. The High Court on i'enland reduced the price of the 
acquired land froin Rs.3 per sq. yard to 1.35 sq, yard and rejected the 
daiiri of the cialniant to tnterest from November 19, 1949 instead of H 
447 
448 
SUPREME COURT REPORTS 
(1990] Supp. 3 S.C.R. 
A 
February 1, 1955, as the Cross-objections failed by it were treated to be 
time-barred. Hence this appeal raising both the contentions re: .price 
of the land and the award of interest., w.e.f. Feb. 1, 1955. 
Partly allowing the appeal this Court; 
B 
HELD: ( 1) On a reference under Section 18 of the Act the parties 
. i 
go to trial before the Court primarily on the issue of determination of 
c 
D 
E 
F 
G 
market value of the land. So far as award of interest is concerned it is 
never an issue between the parties. Once the conditions under Section 
28 or Section 34 of the Act are satisfied the award of interest is conse-
quential and automatic. [454G-H] 
(2) The payment of interest is not dependent on any claim by the 
person whose land has been acquired. There can be no controversy or 
any lis between the parties regarding payment of interest. When once 
the provision of section 34 are attracted it is obligatory for the collector 
to pay the interest. If he fails to do so the same can be claimed from the 
Court in proceedings under section 18 of the Act or even from the 
appellate court/courts thereafter. [455B] 
Reading section 23 with section 26 of the Act, it is clear that the 
award, which is deemed to be a decree, is the sum total of conclusions 
reached by the courts in determining compensation under Section 23 on 
appreciation of the evidence between the parties. The costs under 
Section 27 and the interest under Section 28 and 34 are added to the 
compensation amount to make it a consolidated award. The costs and 
interest under the Act if not awarded by the lower court can always be 
awarded by the higher courts in any proceedings under the Act and to 
any party entitled to the same under the Act. [455D-E] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3(N) 
of 1972. 
Appeal by Certificate from the Judgment and Decree dated 9/ 
10.2.70 of t

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