Statutory interest on delayed acquisition compensation is payable when compensation is not paid or deposited before possession

Statutory interest became payable where acquisition compensation under the Land Acquisition Act, 1894 was not duly paid or deposited before possession was taken, because Sections 31 and 34 impose a tender-or-deposit obligation and trigger interest on default. The landowner's enforceable claim for that interest lay against the State, while any separate liability of the Trust under its arrangement with the Government was not decided. The Court also left open the issue of enhanced interest under the 1984 amendment for determination by the Executing Court, and upheld the direction to quantify the amount there.

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Issues: Whether interest was payable on the acquisition compensation for failure to pay or deposit it in time, and whether the High Court was justified in directing the Executing Court to determine the amount.

Analysis: Section 31 of the Land Acquisition Act, 1894 requires the Collector to tender payment of compensation awarded and, where payment cannot be made, to deposit the amount in Court. Section 34 provides for interest where compensation payable under Section 31 is not paid or deposited before possession is taken. On the facts found, the compensation had not been duly paid or deposited in time, and the landowner's entitlement to interest therefore arose. The Court also clarified that, as between the landowner and the acquiring authority, the enforceable obligation lay against the State, while the question of the Trust's liability under its arrangement with the Government was not decided. The question whether enhanced interest under the 1984 amendment was payable was left open for the Executing Court.

Conclusion: The landowner was entitled to interest, and the direction to the Executing Court to determine the amount was upheld. The appeal failed insofar as it challenged that entitlement.

Final Conclusion: The judgment confirms that statutory interest follows delayed payment or deposit of acquisition compensation, while leaving open any distinct inter se liability of the acquiring body and the applicability of enhanced interest.

Ratio Decidendi: Where compensation under the Land Acquisition Act, 1894 is not paid or deposited before possession is taken, interest under Section 34 becomes payable, and the landowner's enforceable claim lies against the State.

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