- (1.)The only point involved in these cluster of appeals is whether the High Court of Bombay was justified in directing payment of interest on rental compensation awarded to persons whose lands were acquired under the Land Acquisition Act, 1894 (in short the 'Act').
(2.)Factual matrix giving rise to these appeals is almost undisputed except that the dates in regard to the Notifications issued under Ss. 4 and 6 of the Act are different. Lands of the respondents were acquired by the appellant-State by private negotiations and accordingly possession was taken prior to issuance of Notification under S. 4 of the Act. Subsequently, Notification under S. 6 of the Act was also issued. The Land Acquisition Officer fixed the compensation payable and the statutory entitlements. The State of Maharashtra by several resolutions and instructions contained in Circulars dated 1-12-1972, 17-9-1977, 2-4-1979 and 24-3-1988 provided for rental compensation payable to title holders of lands. The resolutions in question, inter alia, provided that where possession of lands is taken by private negotiations a certain percentage of the estimated value of the land was to be paid as rental compensation. It was also indicated that prompt payment of such compensation should be done.
(3.)The land owners approached the High Court by filing writ petitions making a grievance that after taking possession of the land no rental compensation was either being paid, or, there was abnormal and unusual delay in making payment thereof. They claim interest for such delayed payment. The High Court by impugned judgment held that the non-payment of rental compensation within the time prescriptions indicated in the resolutions amounted to deprivation of valuable property without due payment therefor. It was directed that State authorities have to pay the compensation and interest thereon at the rates prescribed in the Government resolution dated 24th March, 1988 and the payment was to be released as expeditiously as possible but in no case beyond the period of six months from the date of judgment by the Collector concerned. It was held that land owners will be entitled to raise demand of rental compensation as well as the interest thereon before the Collector when the award under S. 11 of the Act is passed or before the Reference Court, as the case may be. In case the concerned owner has not been paid 80% of the compensation as calculated by the Collector while taking possession of the land without issuing notice under S. 4(1) of the Act, the Government was directed to review its policy for higher rate of rental compensation as well as interest thereon in the light of provisions contained in Ss. 17(3-A), 23(1-A) and 28 of the Act. The rate of interest was stipulated to be 12% on the rental compensation amount. The High Court with reference to various resolutions noted above accepted the prayer and directed as noted above.