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[Land acquisition] Delay in compensation would entitle owner to interest from date of deprivation of possession: Supreme Court

If such compensation is not paid immediately, then the person whose land is acquired would be entitled to interest from the date on which he was deprived of the possession, a Division Bench of Justices AM Khanwilkar and CT Ravikumar held.

“It is well-settled that the normal rule is that if on account of acquisition of land a person is deprived of possession of his property, he should be paid compensation immediately and if the same is not paid to him forthwith, he would be entitled to interest on the compensation amount from the date of taking possession of the land till the date of payment,” the judgment said.

The Court was hearing an appeal against an order of the Bombay High Court which had overturned the direction issued by the reference court. Before the top Court, the limited issue involved was about the liability to pay interest and whether it commences from the date of taking possession or only from the date of award.

In the instant case, the reference court had ordered that the interest was to be paid from April 1997 when possession was taken until March 1998 for the first year at the rate of 9 per cent per annum and thereafter at the rate of 15 per cent per annum from April 1998 till the date of payment, September 2004. Later, the Bombay High Court had overturned this decision of the Reference Court.

This direction was overturned by the Bombay High Court.

The Supreme Court held that the issue is settled by its 2004 judgment in RL Jain v. DDA in which it was ruled that the person whose land is acquired will be entitled to interest from the day on which land was acquired.

Thus, the appellant in the present case would be entitled to interest fro the date on which he was deprived of the possession of the land – April 4, 1997.

Consequently, the direction in this regard by the reference court was restored.

Advocate-on-Record Sudhansu Palo, advocates Shankar Chilage and Mrityunjai Singh appeared for the appellant.

Advocates-on-Record Uday B Dube and Sachin Patil, advocates Rahul Chitnis, Aditya Pande, Geo Joseph and Shweta Shepal appeared for the respondent.

Source: Barandbench

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