Additional Compensation under Section 28-A of Land Acquisition Act 1894

Additional Compensation under Section 28-A of Land Acquisition Act 1894 Case Laws Civil Law Compensation Interpretation - Purposive Construction Interpretation of Statutes Knowledge - Civil Law Laches Land Acquisition Legal Fiction Litigation & Arbitration Non Est Repealed Law Retrospective Solutions - Civil Law Supreme Court Mr. Justice Mian Saqib Nisar in his judgment has decided the issue regarding entitlement of additional compensation under Section 28-A of Land Acquisition Act 1894 in Civil Appeals No. 939 of 2004 etc.

1. These appeals, by leave of the Court, are being disposed of together as the same legal points are involved therein.

2. Civil Appeal No.939 of 2004: The facts in relation to the instant appeal are that the land owned by the appellants was acquired under the Land Acquisition Act, 1894 (the Act) through notifications under Section 4 thereof dated 2.2.1960 and 5.3.1960 respectively. The Land Acquisition Collector (LAC) announced the award on 17.12.1960 which was assailed by the respondents through a reference. The Referee Court enhanced the compensation vide judgment dated 27.8.1970. Being dissatisfied with the increase in compensation, the appellants approached the learned High Court in appeal and further enhancement was accorded to them through judgment dated 26.9.1977; and on their appeal before this Court compensation was yet further increased vide judgment dated 18.2.1987. The appellants then filed an execution petition for recovery of their dues (enhanced compensation) before the learned High Court (which was the executing court) and also for the first time sought additional compensation under Section 28-A of the Act, which reads as under:

“28-A. Additional Compensation.– In addition to the compensation fixed on the basis of market value as prevailing on the date of notification under Section 4, an additional amount of fifteen percent per annum of the compensation so fixed shall be paid from the date of the notification under Section 4 to the date of payment of the compensation.”

The Executing Court vide order dated 31.5.1993 while interpreting the provisions of Section 28-A held that it (section) would not apply to past and closed transactions. In this context the relevant portion of the order reads as:

“It is, therefore, clear that Section 28-A in the Act, introduced through the amendment of 1984 is applicable to pending proceedings so long as it does not inter-act on past and closed transactions. Still, what may, in the present context, be such transaction? It would seems to be just and fair and in line with the spirit of the amendatory law as regards awards, rendered prior to the amendment but pending examination at subsequent levels, to say that to the extent a land-owner had already received compensation antecedent to the amendment, even though under protest, the question of permitting solatium on the amount or amounts already so paid, before the amendment, be treated as a transaction past and no additional payment may accrue following upon the amendment on such disbursement of compensation, duly paid and received. However, where compensation is enhanced and enhanced compensation is not received or paid and, during the time intervening, the amendatory law has appeared on the statutes book any subsequent payment including that already due before the amendment but not paid would carry a further solatium at the rate of 15% per annum from the date of notification upto the date of actual payment of compensation.”

Aggrieved of the above, the appellants filed an appeal before the High Court and the learned Division Bench of the Court held:

“………………………We are inclined to agree with Mr. Sharif that the question of amount of compensation payable from the date of Notification under Section 4 till the entire amount of compensation is determined is a single transaction and additional compensation under Section 28-A would have to be calculated by bifurcating the unpaid amount from that which has already been received by the land owner.

…………………………By incorporating Section 28-A, the legislature apparently intended to compensate such land owners by providing additional compensation and at the same time deter acquiring from delaying payment. However, it cannot be assumed that it permitted a owner to take a premium on the basis of the entire amount of compensation inclusive to amounts already pocketed by him. It may also be noticed that the legislature has not used the expression “final payments” and in a given case there could be several dates of payments of different amounts falling short of the payments to be made upon final determination.

…………………………For the foregoing reasons, we dismiss the Appeal directing the parties that the Appellants were entitled to receive the additional compensation under Section 28-A for the unpaid amount of the compensation from the date of notification under Section 4 of the Act till the final payment of the compensation is made to the Appellants. There will be no orders as to costs.”

Leave in this case was granted vide order dated 28.7.2004 primarily to consider whether:

“…………………………the petitioners would be entitled, in view of the above said provision of law, to claim benefit of additional compensation under the ibid Act on the entire amount of compensation from the date of notification issued under Section 4 of the Land Acquisition Act till final payment of compensation is made to the petitioners or only on the amount of compensation which was not paid upto the time of promulgation of Ordinance No.XXIII of 1984?”.

3. Learned counsel for the appellants has argued that the language of Section 28-A leaves no room for doubt that the additional compensation is payable from the date of notification under Section 4 of the Act till the date of the payment of compensation. He states that to interpret the section in a manner whereby the compensation shall only be payable on the unpaid amount is not a valid construction of the said section; this is tantamount to reading into the provision which cannot be done as the provision is clear and the rule of literal interpretation of statutes should be resorted to rather than looking into the intent of the legislature. He states that the person whose land is acquired is ipso jure entitled to compensation as per the provisions of Section 34 of the Act with regard to interest and thus the additional amount of compensation under Section 28-A is also available to him as a matter of right. He relies on the Construction of Statutes (1940) by Crawford, Government of Sindh and 2 others Vs. Syed Shakir Ali Jafri and 6 others (1996 SCMR 1361), Province of Sindh through Collector of District Dadu and others Vs. Ramzan and others (PLD 2004 SC 512), and Land Acquisition Officer and Assistant Commissioner, Hyderabad Vs. Gul Muhammad through Legal Heirs (PLD 2005 SC 311).

4. Learned Additional Advocate General, Sindh has submitted that the provisions of Section 28-A do not have any retrospective effect. As the award was announced on 17.12.1960 and the appellant had already received a substantial amount of compensation before the enforcement of the said section, therefore, he could not ask for a premium over the amount so received.

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