1990 (12) TMI 319 - SC - Indian Laws

Summary

Issues Involved:
1. Determination of compensation for the acquired land.
2. Entitlement to interest on the compensation amount from the date of possession.

Summary:

1. Determination of Compensation:
- Background: The Government of Kutch took possession of land owned by Vijay Cotton & Oil Mills Ltd. on November 19, 1949, and later issued a notification u/s 6(1) of the Land Acquisition Act, 1894 on February 1, 1955, declaring the land needed for public purpose.
- District Judge's Award: The District Judge awarded compensation based on the market value of Rs. 3 per square yard, along with 15% solatium and 6% interest from February 1, 1955.
- High Court's Decision: The High Court reduced the compensation to Rs. 1.35 per square yard, ruling out the District Judge's inspection note and adjusting for the size difference between the comparable plots and the acquired land.
- Supreme Court's Stance: The Supreme Court did not interfere with the High Court's determination of Rs. 1.35 per square yard, acknowledging the High Court's discretion in assessing the market value.

2. Entitlement to Interest:
- Claimant's Argument: The claimant sought interest from November 19, 1949, the date of possession, rather than from February 1, 1955.
- High Court's Rejection: The High Court rejected the claim for interest from November 19, 1949, due to the claimant's cross-objections being time-barred.
- Supreme Court's Analysis: The Supreme Court disagreed with the High Court's interpretation, emphasizing the mandatory nature of Section 34 of the Act, which requires the Collector to pay interest from the date of possession.
- Final Judgment: The Supreme Court held that the claimant was entitled to interest from November 19, 1949, to February 1, 1955, and further 6% interest from February 1, 1955, until the date of payment. The procedural dismissal of cross-objections was deemed irrelevant.

Conclusion:
The Supreme Court partly allowed the appeal, setting aside the High Court's judgment on the interest issue and directing the payment of interest from the date of possession. The appeal was allowed with no order as to costs.