KAZI AKILODDIN SUJAODDINversusSTATE OF MAHARASHTRA & ORS.

                       [2013] 7 S.C.R. 382


A                KAZI AKILODDIN. SUJAODDIN
                               v.
              STATE OF MAHARASHTRA & ORS.
                (Civil Appeal No. 5084 of 2013)
                         JULY 03, 2013
B
            [T.S. THAKUR AND SUDHANSU JYOTI
                    MUKHOPADHAYA, JJ.]

       LAND ACQUISITION:
c
       Rental compensation for pre-acquisition period -
  Entitlement to as per award of Land Acquisition Officer or on
  the amount as enhanced by reference court - HELD: During
  the pendency of a reference proceeding or appeal before a
o higher court, rental compensation is to be determined on the
  basis of award passed by Land Acquisition Officer -
  Subsequently, if there is upward revision of amount,
  consequences will follow and re-determination of the rental
  compensation can be made.
E      The respondent-State took possession of the land of
  the appellant on 15.11.1998 for construction of flood
  protection wall for the city of Akola. Notification u/s. 4 of
  the Land Acquisition Act, 1894, was published on
  3.06.1999 followed by Notification u/s. 6 of the Act
F published on 18.11.1999. The Special Land Acquisition
  Officer by his award dated 04.08.2000 determined the
  compensation. The State Government paid to the
  appellant rental compensation for pre-acquisition period
  on the compensation determined by the Land Acquisition
G Officer, whereas the reference court allowed the rental
  compensation to be paid on the award value as
  enhanced by it in the reference case. Since the rental
  compensation as directed by the reference court was not

H                              382
      KAZI AKILODDIN SUJAODDIN v. STATE OF            383
                 MAHARASHTRA
 paid, the appellant filed a writ petition before the High   A
 Court which was allowed on 5.10.2010. However, on the
 review petition filed by the respondents, the High Court
 directed the State Government to deposit rental
 compensation at the rate of 8% of the amount as
 awarded by the reference court and allowed the              B
 appellant to withdraw half of the amount so deposited.

       In the instant appeal, the question for consideration
   before the Court was: Whether ·the High Court was
  justified in directing the State to deposit the rental C
  compensation with the appellate court at the rate of 8%
   per annum on the award value passed by the reference
· ·court for the period of occupation before formal
  acquisition, and in allowing the appellant to withdraw
  only 50% of such rental compensation during the
  pendency of the appeal.                                    D

      Dismissing the appeal, the Court

     HELD: 1.1 The Land Acquisition Act, 1894 does not
 contemplate the payment of any rental compensation. E
 The entitlement of rental compensation is on the basis
 of resolutions and instructions issued by the State of
 Maharashtra from time to time. From the decision of this
 Court, Maimuma Banu* it is clear that during the
 pendency of a reference proceeding or appeal before a
 higher court the rental compensation is to be determined F
 on the basis of award passed by the Land Acquisition
 Officer. Subsequently, if there is upward revision of
 amount, consequences will follow and, if necessary, re-
 determination of the rental compensation can be made
 and after adjustment of the amount paid, if any, balance G
 can be paid. [Para 3 and 18] [385-E-F; 392-E-F]

      *State of Maharashtra and Others vs. Maimuma Banu
 and Others, 2003 Supp. 2 SCR 228 = (2003) (7) sec 448 -
 relied on.                                                  H
    384      SUPREME COURT REPORTS                 [2013] 7 S.C.R.


A        1.3 In the instant case, bott. the State Government
    and the appellant are not satisfied with the award passed
    by the reference court and, therefore, two appeals
    against the said award by both parties are pending
    before the High Court for determination. Giving reference
B · to the decision in Maimuma Banu, it was not open to the
    High Court to direct the authorities to pay rental
    compensation as per•award passed by the reference
    court. Therefore, the order of the High Court recalling the
    order dated 5.10.2010 and directing the State Government
c to deposit with the appellate court rental cdmpensation
    at the rate of 8% of the amount awarded by the reference
    court, allowing the appellant to withdraw the half of the
    amount, calls for no interference. [Para 19] (392-F-H; 393-
    A-B]
D                        Case Law Reference:
      2003 (2) Suppl. SCR 228          relied on         Para 15

        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    5084 of 2013.
E
        From the Judgment and Order dated 15.09.2011 of the
    High Court of Judicature at Bombay, Nagpur Bench, Nagpur
    in M.C.A. No. 774 of 2011 in Writ Petition No. 3883 of 2010.

F       Manish Pitale, Sunil Kumar, Chander Shekhar Ashri for the
    Appellant.

          Madhvi Diwan, Asha Gopalan Nair for the Respondents.

          The Judgment of the Court was delivered by
G
         SUDHANSU JYOTI MUKHOPADHAYA, J. 1. Leave
    granted. The appellant is aggrieved by impugned order dated
    15th September, 2011 passed by the Division Bench of the
    High Court of Bombay, Nagpur Bench, Nagpur in a Review
    Application, MCA No.774/2011. By the impugned order the
H   Division Bench reviewed and recalled the judgment and order
     KAZI AKILODDIN SUJAODDIN v. STATE OF     385
MAHARASHTRA [SUDHANSU JYOTI MUKHOPADHAYA, J.]

dated 5th October, 2010 passed in Writ Petition No.3883/           A
2010(D) filed by the appellant. The High Court further directed
the State of Maharashtra to deposit rental compensation at the
rate of 8% of the amount of Rs.1,07,82,270/- as enhanced and
awarded by t_he Reference Court, in First Appeal No.06/2010,
as the same is pending against the award passed by the             B
Reference Court. The High Court by the impugned order also
allowed the appellant to withdraw only half of the amount
deposited by the State upon furnishing security to the
satisfaction of the Registrar and to keep remaining amount in
FDR of a Nationalised Bank pending the litigation.                 c
     2. The only question involved in this appeal is whether the
High Court of Bombay, Nagpur Bench was justified in directing
the State to deposit the rental compensation with the Appellate
Court at the rate of 8% per annum on the award value passed
by the Reference Court for the period of occupation before         D
formal acquisition, allowing the appellant to withdraw only 50%
of such rental compensation during the pendency of the appeal.

     3. The factual matrix giving rise to this appeal are as
follows:-                                                          E
     The matter relates to payment of rental compensation with
regard to land occupied by State before the formal acquisition.
The Land Acquisition Act, 1894 does not contemplate the
payment of any rental compensation. The entitlement of rental
                                                                   F
compensation is on the basis of resolutions and instructions
issued by the State of Maharashtra from time to time since 7th
February, 1949 including Resolutions dated 2nd May, 1961, 1st
December, 1972, 2nd April, 1979 and 24th March, 1988.

     4. By the aforesaid Resolutions, the State of Maharashtra     G
has empowered the Irrigation and Power Department/Buildings
and. Communication Department Officers to take possession
of lands required for its development works by private
negotiations, wherever possible, as it was apprehended that
the speed of acquisition of lands under the Land Acquisition       H
    386       SUPREME COURT REPORTS                   [2013] 7 S.C.R.


A   Act, 1894(hereinafter referred to as the 'Act'), would not be, in
    view of its procedural requirements, commensurate with the
    speed of work planned by the Department, thus resulting in delay
    in execution of works. It was also indicated that prompt
    payment of such compensation should be done.
B
        5. By Resolution dated 2nd May, 1961 it was decided by
  the State Government that in cases where awards have been
  declared by the Revenue authorities, rental compensation
  should be paid at the rate of 4% per annum on the award value
C for the period of occupation before the formal acquisition plus
  the adjustment which has been paid by the owner of the land
  for that period in respect of that land. Subsequently, by
  Resolution dated 1st December, 1972 while procedure for
  taking possession of the land by private negotiations were
  notified, the determination of rental compensation was
D enhanced to 6-1/2% per cent of the final award value, as
  apparent from the paragraph 6 of the said Resolution quoted
  hereunder:

          "6. Payment of rental compensation: The responsibility of
E         payment of rental compensation of to the title holder of the
          lands taken over by I.& P.D./B & C.D. officers through
          private negotiations rests with 1.&P.D. /B.&C.D. Officers for
          the period from the date on which possession of the land
          is taken over till the date on which the full amount of final
F         Award is paid. Government has now decided that the rental
          compensation payable shall be 6-1/2% of the final award
          value in respect of both Non-Agricultural land and
          Agricultural land. With a view to avoiding any
          inconvenience to the owners of the land who have willingly
          parted with their land and to ensure timely and regular
G
          payments of rental compensation, the following procedure
          should be adopted."

          6. By the subsequent Resolution dated 2nd April, 1979 the
          State Government decided to increase the percentage
H         from 6-1/2% to 8% for working out the :;imount for payment
     KAZI AKILODDIN SUJAODDIN v. STATE OF     387
MAHARASHTRA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
    of rental compensation, which reads as follows:                A

             "GOVERNMENT OF MAHARASHTRA
                      Irrigation Department,
              Resolution No.IND.1078/1014/IMG-(3)
                 Sachivalaya, Bombay 400032,                       B
                     Dated 2nd April, 1979.

    Read: Government Resolution, Irrigation and Power
    Department, No.IPM. 1069/20083/1(5), dated 1st
    December, 1972
                                                                   c
    Resolution: The question of raising the percentage of rental
    compensation admissible to the title holders of the lands
    during the period from the date of taking over the
    possession of their lands by private negotiations till the
    payment of final award was under the consideration of          D
    Government for some time past. Government is now
    pleased to increase the percentage from 6-1/2% to 8%
    laid down for working out the amount for payment of rental
    compensation in paras 6 and 7 of Government Resolution,
    Irrigation and Power Department, No.IPM.1069/20083-1(5),
                                                                   E
    dated 1st December, 1972 with effect from 1st January,
    1979."

     7. The State Government by its Resolution dated 24th
March, 1988 directed the authorities to pay rental compensation
on time else the amount is payable towards interest. The           F
relevant portion of the said Resolution is quoted hereunder:

    "3. It has come to the notice of the Government that the
    directions given in the aforesaid Government Resolutions
    are not being followed properly. As a result, the land         G
    owners are facing harassment and inconvenience. Due to
    the delay in sending proposal for acquisition of lands where
    possession has been taken through private negotiations,
    the amounts payable towards interest and rental
    compensation have increased.
                                                                   H
    388      SUPREME COURT REPORTS                  [2013] 7 S.C.R.

A         4. In view of the amendment of the Land Acquisition Act,
          1894 and the time limits specified for the acquisition of
          land as also in view of Section 4(1) of the Act and the
          increase in the amount of solatium from 15% to 30%,
          special attention is required to be given to the completion
B         of process of acquisition quickly."

       8. The respondent-State required the land of the appellant
  for construction of flood protection wall for the city of Akola and
  after negotiations the appellant handed over the possession of
  his land on 15th November, 1998 to the State. Subsequently,
C Notification under Section 4 of the Land Acquisition Act, 1894,
  was published on 3rd June, 1999 in respect of said land,
  followed by Notification under Section 6 of the Act published
  on 18th November, 1999. The Special Land Acquisition Officer
  by his award dated 4th August, 2000 determined the
D compensation at the rate of Rs.5,61,000/- per hectare and
  awarded total compensation of Rs.9,45, 173/- in favour of
  appellant.

       9. Aggrieved by the award, the appellant filed an
E application under Section 18 of the Act which on reference
  registered as LAC No.140/2000 in the Court of District Judge,
  Akola. During the pendency of the said reference case, the
  appellant received a sum of Rs.59,998/- on 7th August. 2001
  towards rental compensation. The amount was calculated at the
F rate of 8% of the compensation awarded by the Land
  Acquisition Officer. The Reference Court by its award dated 2nd
  August, 2008 allowed the application and enhanced the rental
  compensation @ 8% per annum on Rs.1,07,82,270/- with
  interest at the rate of 9% from 12th October, 2000 to 11th
  October, 2001 that is for one year and interest at the rate of
G 15% per annum, thereafter, till the date of actual payment.

         10. Aggrieved by the enhancement, the State Government
    preferred First Appeal No.06/2009 before the High Court of
    Bombay. In the said appeal, the High Court passed interim
H
     KAZI AKILODDIN SUJAODDIN v. STATE OF     389
MAHARASHTRA [SUDHANSU JYOTI MUKHOPADHAYA, J.]

order on 28th January, 2009 staying operation, implementation       A
and execution of the order passed by the Reference Court on
the condition of depositing 50% of the amount granted by the
Reference Court. The First Appeal No.06/2009 is still pending
before the High Court for its decision.
                                                                    B
    11. The appellant was also not happy with the award
passed by the Reference Court, therefore, he preferred First
Appeal No.1210/2008, which is also pending before the High
Court.

      12. During the pendency of the appeals, the appellant         C
applied to the 3rd respondent for grant of rental compensation
on the basis of enhanced compensation awarded by the
Reference Court by its order dated 2nd August, 2008. As no
reply was received by the appellant he filed a Writ Petition
No.2763/2009 before the High Court of Bombay, Bench at              D
Nagpur. The said writ petition was disposed of on 6th July, 2009
recording the statement of the Assistant Government Pleader
that the application of the appellant would be decided on merits
at the earliest. Thereafter, the 3rd respondent on consideration
of the said application, by his letter dated 5th October, 2009      E
rejected the prayer on the ground that the order of Reference
Court was under challenge before the High Court. Against the
order of rejection the appellant preferred Writ Petition No.3883/
2010, before the High Court of Bombay, Bench at Nagpur. In
the said case, the Special Land Acquisition Officer, 4th            F
respondent filed an affidavit assailing the order passed by
Reference Court. According to the appellant, there is no
statement made in the said reply that the appellant was not
entitled for enhanced rental compensation on the basis of
compensation awarded by the Reference Court. The High Court         G
allowed the said writ petition by order dated 5th October, 2010
referring to the decision of this Court in State of Maharashtra
and Others vs. Maimuma Banu and Others, (2003) 7 SCC
448. As the Division Bench ordered to pay enhanced rental
compensation to the appellant as per award passed by the
                                                                    H
    390       SUPREME COURT REPORTS                  [2013) 7 S.C.R.


A   Reference Court, the respondents filed a review petition for
    recalling the order dated 5th October, 2010. It was submitted
    that the order was passed by the High Court on wrong
    interpretation of decision in Maimuma Banu (supra) and that
    there is an error apparent on the face of the record.
B
         13. On notice and hearing the parties, the High Court
    passed the impugned order dated 15th September, 2011,
    recalling its earlier order dated 5th October, 2010. The following
    direction has been issued in place of earlier order:
c         "In the result, the judgment and order dated 5/10/2010 is
          reviewed and set aside. Instead we direct the State of
          Maharashtra to deposit as rental compensation 8% of the
          amount of Rs.1,07,82,270/-, in First Appeal No.6/2010,
          which is the compensation as enhanced by the Reference
D         Court in this Court for the period from 15/11/1998 i.e. the
          date of taking possession till the date of the award i.e. 4/
          8/2000. The original petitioner Kazi Akiloddin Sujaoddin
          may withdraw the half amount deposited by the State upon
          furnishing security to the satisfaction of the Registrar. The
E         remaining amount shall be kept in F.D.R. of a nationalized
          bank pending the litigation.

          6. Four weeks time is granted to deposit the above said
          amount.

F         7. Order accordingly."

       14. Learned counsel for the appellant contended that the
  appellant is entitled for the enhanced rental compensation
  proportionate to the increase in compensation awarded by the
G Reference Court. As per the policy of the respondent-State, the
  claimant is entitled to rental compensation at the rate of 8% of
  the amount of compensation awarded to the claimant for
  acquisition of his land. Circulars issued by the State do not limit
  the rental compensation to 8% of the amount awarded by the
H Land Acquisition Officer. The resolutions do not stipulate that
     KAZI AKILODDIN SUJAODDIN v. STATE OF     391
MAHARASHTRA [SUDHANSU JYOTI MUKHOPADHAYA, J.]

the rental compensation should not be enhanced proportionate                  A
to the enhancement of compensation awarded by the
Reference Court or higher courts.

      15. Learned counsel for the appellant further contended
that the High Court com.mitted a grave error in deciding against
                                                                              8
the appellant by reviewing its own order on the basis of
judgment of this Court in State of Maharashtra and Others vs.
Maimuma Banu and Others, (2003) (7) SCC 448.

     16. Per contra, according to the respondents, the
Reference Court enhanced the compensation exorbitantly.                       C
Therefore, the State Government was left with no other option
but to challenge the award by filing the first appeal, registered
as First Appeal No.06/2009.

      17. In Maimuma Banu (supra)., this Court noticed that the               0
 State of Maharashtra by its resolutions and instructions,
 contained in the circulars dated 1st December, 1972, 17th
 September, 1977, 2nd April, 1979 and 24th March, 1988
,provided for rental compensation, payable to the title-holders
 of the lands. Apart from those resolutions, the provisions of the            E
 Land Acquisition Act, 1894 do not contemplate payment of any
 rental compensation. In the said case of Maimuma Banu
 (supra) the Court decided the question relating to the 'payment
 of interest on rental compensation'awarded to the persons
 whose lands were acquired under the Land Acquisition Act,
 1894; this Court in the said case also held as follows:                      F

            "9 ............. lt is not in dispute that in most of the cases
     the rental compensation has not been paid. If that factual
     position continues, it clearly is a case where the amount
     to which a person is entitled is withheld without any                    G
     legitimate excuse. The learned counsel for the appellants
     strenuously urged that in most of the cases the
     proceedings have not yet attained finality and are pending
     either before the Reference Court or in appeal. That does
     not provide a legitimate excuse to the appellants to                     H
    392      SUPREME COURT REPORTS                   [2013) 7 S.C.R.


A         withhold payment of the rental compensation. The
          amount calculated on the basis of award by the Land
          Acquisition Officer cannot be below than the amount
          to be ultimately fixed. If in appeal or the reference
          proceeding, there is any variation, the same can be
B         duly taken note of as provided in law. There is no
          difficulty and we find none as to why the
          compensation on the basis of value determined by
          the Land Acquisition Officer cannot be paid. If there
          is upward revision of the amount, the consequences
c         will follow and if necessary, redetermination of the
          rental compensation can be made and after
          adjustment of the amount paid, if any, balance can
          be paid. If, however, the Land Acquisition Officer's
          award is maintained then nothing further may be
          reqi.;ired to be done. In either event, payment of the
D
          rental compensation expeditiously would be an
          a~propriate step. Looking at the problem from another
          perspective, one thing is clear that authorities have clearly
          ignored the sense of urgency highlighted in the various
          resolutions."
E
        18. From the aforesaid decision of this Court, it is clear
  that during the pendency of a reference proceeding or appeal
  before a Higher Court the rental compensation is to be
  determined on the basis of award passed by the Land
F Acquisition Officer. Subsequently, if there is upward revision of
  amount, consequences will follow and if necessary, re-
  determination of the rental compensation can be made and
  after adjustment of the amount paid, if any, balance can be paid.

       19. In the present case, we find that the State Government
G along with the appellant is not satisfied with the award passed
  by the Reference Court and hence, two appeals against the
  said award by both parties are pending before the High Court
  of Bombay, Nagpur Bench for determination. Giving reference
  to the decision in Maimuma Banu (supra) it was not open to
H
     KAZI AKILODDIN SUJAODDIN v. STATE OF     393
MAHARASHTRA [SUDHANSU JYOTI MUKHOPADHAYA, J.]

the High Court to direct the authorities to pay rental A
compensation as per award passed by the Reference Court.
For the reason aforesaid, if the High Court recalled the order
dated 5th October, 2010 and directed the State Government
to deposit rental compensation at the rate of 8% of the amount
awarded by the Reference Court with the appellate Court, B
allowing the appellant to withdraw the half of the amount, no
interference is called for. However, this order will not stand in
the way of appellant to claim proportionate higher rental
compensation, if the order of the Reference Court is upheld or
further enhancement of compensation is made by the Appellate C
Court.

    -20. We find no merit in this appeal. It is, accordingly,
dismissed with observations as made above. No costs.

R.P.                                      Appeal dismissed.     D