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C.A.No.13324 of 2015  

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 13324 OF 2015

Ranveer Singh        …..Appellant   

Versus

State of U.P. Through Secy. & Ors.              ...Respondents  

J U D G M E N T

SHIVA KIRTI SINGH, J.

1. This  appeal  arising  out  of  special  leave  has  been

preferred  by  the  original  writ  petitioner  whose  land  was

acquired by the authorities of the State of Uttar Pradesh under

the  provisions  of   Land  Acquisitions  Act,  1894  (hereinafter

referred  as  ‘the  Act’)  on  the  basis  of  an  agreement  for

compensation dated 27.2.2003  followed by instant payment of

such  compensation.  The  appellant  subsequently  claimed

interest under Section 34 of the Act from the date 15.2.2001

when admittedly the possession of the land was taken over by

the State Authorities and till 27.2.2003, the date of payment.

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The claim was rejected by the concerned District Magistrate of

Gautam  Budh  Nagar  vide  an  order  dated  6.8.2005  passed

pursuant  to  order  of  High  Court  dated  12.04.2005  in

appellant’s earlier writ petition No.38951 of 2002.  That claim

again  made  through  subsequent  writ  petition  bearing  No.

60992 of 2005 has been rejected on merits by the judgment

and order under appeal passed by the Division Bench of the

High Court of Judicature at Allahabad on 22.5.2014.

2. There  is  no  material  dispute  over  facts  and  hence  it

would suffice to notice that as per pleadings of  the parties,

appellant’s land in Plot No. 203, area 30 bigha 12 biswa and

plot  No.  209,  area  1  biswa  in  village  Parthala,  Khanjarpur

District Gautam Budh Nagar (U.P.)  was acquired by issuing

notification  under  Section  4  read  with  Section  17  dated

1.6.2000 and a declaration under Section 6 dated 30.12.2000

of the Act. The possession of the land was taken on 15.2.2001.

After  taking  possession,  proceedings  for  determination  of

payment  of  compensation  on  the  basis  of  agreement  was

initiated.   On  account  of  information  received  by  the

Additional District Magistrate Land Acquisition Noida, Gautam

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Budh Nagar from DGC (Civil) that appellant had land in excess

of the ceiling limit, inquiries and opinion for entering into an

agreement  became  necessary.  Ultimately  on  7.2.2003  it

became  clear  that  appellant  had  no  land  in  excess  of  the

ceiling  area  and  that  cleared  the  path  for  signing  the

agreement  on  27.2.2003  for  payment  of  compensation  in

terms  of  agreement  as  per  Uttar  Pradesh  Land  Acquisition

(Determination of Compensation and Declaration of Award by

Agreement) Rules, 1997 (hereinafter referred to as the “Rules

of  1997”).  As  agreed,  the  entire  compensation  of

Rs.1,37,58,350/- was paid on the same date.  The appellant

accepted the said amount without any demur or protest.  At

that  time  the  earlier  writ  petition  No.38951  of  2002  for

claiming compensation was pending.  Claim for interest under

Section  34  was  subsequently  added  in  that  writ  petition

through an amendment. The writ petition was disposed of with

liberty to the petitioner to file a representation and as noticed

earlier the same was rejected by the District Magistrate by a

speaking order dated 6.8.2005.

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3. In  the  aforesaid  facts  the  sole  issue  for  determination

remains as to whether, after entering into an agreement under

the Rules of 1997 and accepting the agreed amount without

any protest or demand for further interest, the appellant can

claim interest on the ground of Section 34 of the Act for the

period that had already lapsed between taking of possession

and  signing  of  the  agreement/payment  of  compensation.

Section 34 of the Land Acquisition Act, 1894 reads as under:-

   “  34. Payment of interest - When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of [nine per centum] per annum from the time of so taking possession until it shall have been so paid or deposited:  

[Provided  that  if  such  compensation  or  any  part thereof is not paid or deposited within a period of one  year  from  the  date  on  which  possession  is taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the  said  period  of  one  year  on  the  amount  of compensation or part  thereof  which has not  been paid or deposited before the date of such expiry.]”  

4. The appellant relied heavily upon the aforesaid provision

of law to support his claim for interest.  In addition, learned

senior counsel has raised a plea based on equity that there is

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no good reason why the appellant should not be compensated

for loss of possession when there is a considerable delay in

entering into agreement and payment of compensation.  It has

been further urged that the District Magistrate has erred in

rejecting  the  representation  of  the  appellant.  On  the  other

hand,  learned counsel  for  the respondent  has  defended the

judgment of the High Court by submitting that it suffers from

no  error  of  fact  or  law.   He  pointed  out  that  as  per  the

agreement, the appellant accepted to receive the consolidated

amount which included components of additional amount at

the rate of 12% and solatium at the rate of 30% contemplated

under  various  sub-sections  of  Section  23  of  the  Act  and

thereafter in the same agreement, as an owner he agreed that

he  shall  not  claim  any  amount  in  addition  to  the  amount

agreed upon as disclosed in the agreement as compensation

and accepted the amount without any protest.  The relevant

clause 3 in the agreement is as follows:   

“Clause 3.- That the owner and the interested party shall  not  claim  any  amount  in  addition  to  the amount agreed upon as aforesaid as compensation and accept it without any protest.”

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5. It  has  been also  urged by  the  learned counsel  for  the

State  that  the  appellant  was  free  to  take  benefit  of  all

provisions of  the  Act  including  Section 34 by opting for  an

usual  award under  Section 11(1)  of  the  Act  but  instead he

chose  to  accept  the  expeditious  route  of  entering  into  an

agreement  and getting  the  payment  immediately  as per  the

Rules of  1997. Thereafter,  as per agreement he is  debarred

from  claiming  any  further  amount  or  to  raise  any  protest

before  any  forum  on  any  basis,  including  on  account  of

interest.  

6. Learned  senior  counsel  for  the  appellant  has  placed

reliance upon the judgment in the case of Shree Vijay Cotton

& Oil Mills Ltd. vs. State of Gujarat1, particularly Paragraph

14 thereof.  In paragraph 14 this court pointed out the failure

of the high Court in not appreciating the mandatory provisions

of  Section  34  of  the  Act.   That  was  a  case  of  ordinary

acquisition  as  per  provisions of  the  Act  wherein  amount  of

compensation was determined in regular manner and not by

any  agreement.   Further,  there  was  no  resort  to  urgency

1  1991 (1) SCC 262

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clause in terms of Section 17 of the Act nor there was any

issue as to entitlement of interest under Section 34.  The claim

had been wrongly denied by the District Judge on a reference

under Section 18 and the High Court also rejected the same

by dismissing the cross objections as barred by limitation and

on principle of res judicata.  This Court, in the facts of that

case held that the land owner was entitled for interest as per

mandatory provisions of Section 34 of the Act. But the defence

in the present case is entirely different and is not affected by

the aforesaid judgment.

7. On  behalf  of  the  respondent-State  reliance  has  been

placed upon the following two judgments (1) State of Gujarat

and Ors. Vs. Daya Shamji Bhai and Ors.2 and (2)  State of

Karnataka  and Anr. vs. Sangappa Dyavappa Biradar and

Ors. 3.

8. In Daya Shamji Bhai after the notification for acquisition

under Section 4(1), the land owners agreed in writing to accept

the compensation determined by the Land Acquisition Officer

along with 25% enhancement.  With such consent they also

2  1995 (5) SCC 746 3  2005(4) SCC 264

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agreed that they will not go to any court under Section 18 of

the Act. Accordingly the land owners were paid in terms of the

agreement. In spite of such agreement the land owners sought

a reference to which the State objected.  The reference court

rejected the contention of  the State on the ground that the

agreements were not registered under the Registration Act and

the land owners could not contract out from statute. In the

background facts noted above this Court held in favour of the

State that the agreement was permitted under sub-section 2 of

Section 11 which gives right to the parties to enter into an

agreement to receive compensation under Section 11 in terms

of the contract. Such contract was held to be conclusive and

binding on the parties and therefore the land owners were not

entitled  to  seek  any  reference  for  enhancement  of  the

compensation.  It  was  clarified  that  when  compensation  is

received under protest only then Section 18 gets attracted. In

paragraph 8 of the report the issue of awarding interest and

statutory benefits was also decided against the land owners in

following terms:-

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“8. The  question  of  awarding  interest  and statutory benefits arises when the civil court finds that  the amount  of  compensation awarded to  the landowners by the Collector is not adequate and the prevailing market value is higher than the market value  determined  by  the  Land  Acquisition  Officer under  Section  23(1).  For  entitlement  to  solatium under Section 23(2)  “in addition to”  market  value the court shall award solatium. Under Section 28, if the court gets power to award interest, when court opines  that  the  Collector  “ought  to  have  awarded compensation  in  excess  of  the  sum  which  the Collector did award (sic) the compensation”. In other words,  valid  reference  under  Section  18  confers jurisdiction on the civil  court to consider whether the compensation awarded by the Collector is just and fair. Thereafter, when it finds that the Collector ought  to  have  awarded  higher  compensation,  the civil  court  gets  jurisdiction  to  award  statutory benefits  on higher  compensation from the date of taking  possession  only.  In  view  of  the  specific contract  made  by  the  respondents  in  terms  of Section  11(2),  they  are  not  entitled  to  seek  a reference. Consequently, the civil court is devoid of jurisdiction to go into the adequacy of compensation awarded by the Collector or prevailing market value as on the date of notification under Section 4(1) to determine  the  compensation  under  Section  23(1) and to grant statutory benefits.” (emphasis added)

9. In  Sangappa  Dyavappa  Biradar  reliance  was  placed

upon  Daya  Shamji  Bhai  and  the  same  principles  were

reiterated by holding that an application for reference to civil

court is  maintainable only if  there is non-acceptance of  the

award by the awardee. Once parties agree to the compensation

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payable and consent award is passed, the same would bind

the parties unless it is set aside in appropriate proceedings by

a court of competent jurisdiction. The consent award accepted

without  protest  extinguishes  the  legal  right  to  maintain  a

reference for enhancement of compensation, more so when the

land owners agreed not to seek any enhancement. In that case

also the land owners had agreed that they would not approach

any court for enhancement of compensation and had received

the amount of compensation in terms of the consent award in

full satisfaction of their claim. After being unsuccessful before

the  reference  court  and  in  writ  petition  before  the  Single

Judge, the land owners got relief by the Division Bench of the

High Court on the ground that in any event they could not be

deprived  of  their  statutory  right  of  obtaining  solatium  and

interest  in  terms of  the  Act.  The High Court’s  direction for

payment  on the  basis  of  such statutory  provisions  was  set

aside by this Court by holding that applications under Section

18 were not maintainable. The land owners having accepted

the award, were estopped from maintaining the applications.

This  Court  further  held  that  the  High  Court  also  had  no

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jurisdiction under Article 226 to substitute the consent award

by  directing  payment  of  statutory  solatium and  interest.  It

flows from this judgment that by virtue of the agreement, right

to receive solatium and interest can be waived. Further, when

the land owners agreed that they would not seek enhancement

of compensation by claiming any amount in addition to the

amount agreed upon and that they would accept the agreed

amount without any protest, the High Court could not have

substituted the award by permitting further enhancement on

any ground.

10. The main thrust of arguments advanced on the behalf of

the appellant, particularly to get rid of the difficulty in his way

on account of  the aforesaid two judgments is that the land

owner  agreed  not  to  claim  any  amount  beyond  the  agreed

amount as compensation and therefore the appellant is free to

claim any further amount as interest under Section 34 of the

Act because such interest is not and cannot be included as a

component  of  compensation  which  is  determined  by  the

Collector under Section 11 of the Act while making the award.

Further submission on behalf of the appellant is that various

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matters  which  require  consideration  in  determining

compensation by court  under  Section 23 of  the Act  do not

include  interest  contemplated  by  the  Section  34  of  the  Act

which  is  payable  when  the  compensation  is  not  paid  or

deposited on or before taking the possession to the land.

11. On  its  face  the  aforesaid  contentions  appears  to  be

attractive but on a closer analysis  of  Section 11 as well  as

Section 23 it  is  found to  have  no merits.  Section 23 is  for

guidance  of  the  court  which  gets  jurisdiction  to  determine

compensation  afresh  only  if  there  is  a  protest  against  the

award and the payment is received with protest. This section

does not control the determination of just compensation by the

Collector  under  Section  11  which  requires  the  Collector  to

enquire  into  objections  (if  any)  on  different  issues  such  as

measurement  and  interests  of  the  person  claiming

compensation and then further requires the collector to make

an  award  which  is  required  to  reflect,  interalia,  “the

compensation which in his opinion should be allowed for the

land.”  But  it  is  more  appropriate  and  relevant  to  notice

sub-section 2 of Section 11 which is as follows:

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“Notwithstanding  anything  contained  in sub-section (1), if at any stage of the proceedings, the Collector is satisfied that all the persons interested in the  land  who  appeared  before  him have  agreed  in writing on the matters to be included in the award of the Collector in the form prescribed by rules made by the  appropriate  Government,  he  may,  without making further enquiry, make an award according to the terms of such agreement.”

This  sub-section  begins  with  a  non-obstante  clause

which makes it free of the requirements of sub-section (1) if all

the persons interested in the land agree in writing as to what

matters  should  be  included  in  the  award  of  the  Collector.

Thereupon the Collector is competent to make an award as per

agreement without  making further  enquiry.  In view of  such

clear  provision that  permits  agreement  to  determine all  the

matters to be included in the award, all  the inclusions and

omissions  in  the  consent  award  must  be  treated  as  based

upon  agreement  of  the  parties  and  the  final  amount

determined  by  way  of  agreement  must  be  taken  as  a

completely  just  compensation  inclusive  of  the  statutory

interest payable to the claimant for the concerned land at least

on  the  date  of  agreement.  Since  the  agreed  compensation

amount  is  accepted without  protest  with a clear stipulation

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not to claim any additional amount, it has to be deemed that

the compensation reflected in the consent  award has taken

into account all relevant factors including interest till the date

of  agreement.  Moreover  the  right  to  seek  reference  for

enhancement  itself  gets  lost  by  accepting  the  compensation

without protest especially when there is an agreement that the

land  owner  shall  not  claim any  amount  in  addition  to  the

amount  agreed upon as compensation and shall  accept the

compensation  without  any  protest.  In  such  circumstances

agreed  amount  has  to  be  treated  as  a  just  compensation

permitting  no  addition  or  substitution  whatsoever.  In  other

words,  not  only  the  remedy  under  the  Act  of  seeking

enhancement is lost but the substantive cause of action also

vanishes when the land owner agrees for a consent award and

the amount of compensation is accepted without any protest.  

12. Equitable considerations also cannot help the appellant

because the agreed amount was paid without any delay, on

the date of agreement itself. Notably, the award passed on the

basis of agreement with the appellant stipulates the amount of

compensation at Rs. 329.76 per Sq.Yd. However, in the case of

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other  claimants  under  the  same  Notification  who  had  not

entered into such agreement, the rate was fixed at Rs. 50.57

per Sq.Yd. with 30% solatium and 12% interest from the date

of taking possession. Thus, the agreement with the appellant

was  a  package  with  regard  to  the  compensation  amount

voluntarily accepted by the appellant without any demur. The

argument  of  equitable  consideration is,  therefore,  misplaced

and ill-advised.

13. In view of aforesaid discussion and particularly in view of

judgments of this Court in the case of Daya Shamji Bhai and

in Sangappa Dyavappa Biradar, we find no error in the order

of the High Court rejecting the claim of the appellant.  As a

result  the  appeal  must  fail.  It  is  therefore  dismissed  but

without costs.

      ………………………………..…….J.

     [SHIVA KIRTI SINGH]

       ………………………………….…..J.

                [A.M. KHANWILKAR] New Delhi. July 22, 2016.

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