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Issues: (i) Whether the Government could withdraw from the land acquisition under Section 52 of the Kerala Land Acquisition Act after possession had been surrendered and the land had vested in the Government; (ii) Whether the appellants were entitled to interest at 12% on the compensation amount or only at 6%.
Issue (i): Whether the Government could withdraw from the land acquisition under Section 52 of the Kerala Land Acquisition Act after possession had been surrendered and the land had vested in the Government.
Analysis: Section 52 permits withdrawal only where possession has not been taken. The landowners had surrendered possession, the acquisition proceeded thereafter, and the award recorded vesting of the land in the Government free from encumbrances. Once possession had already been obtained and the land had vested in the State for the housing scheme, withdrawal could not be justified by treating the earlier surrender as outside the acquisition process. The later withdrawal notification was therefore inconsistent with the statutory scheme governing acquisition and vesting.
Conclusion: The withdrawal notification was invalid, and the appellants were not entitled to rely on Section 52 to terminate the acquisition.
Issue (ii): Whether the appellants were entitled to interest at 12% on the compensation amount or only at 6%.
Analysis: The award had granted interest, but the higher rate claimed was not accepted. The Court limited the relief to a lower rate on the awarded compensation from the date of the award until realisation.
Conclusion: Interest was confined to 6% per annum.
Final Conclusion: The appeal failed, the withdrawal notification was held unsustainable, and the compensation awarded under the acquisition remained payable with interest at 6% per annum.
Ratio Decidendi: Where possession of acquired land has already been taken and the land has vested in the Government, the State cannot withdraw from the acquisition under the provision permitting withdrawal only before possession is taken.
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