Under the second proviso to Section 20F(2) of the Railways Act, 1989, what is a land owner entitled to when there is delay in making the award?
Coram: Justice Hima Kohli · Justice Ahsanuddin Amanullah
Railways Act, 1989 — s.20F(2), second proviso — Land acquisition — Additional compensation for delay — Parity of treatment — Railways Act, 1989 — s.20F(2), second proviso — Delay in award — Additional compensation — Held: Where the award is delayed beyond one year, the second proviso to Section 20F(2) entitles the land owner to additional compensation of not less than 5% of the award value for every month of delay. This flows directly from the statute and this Court's earlier order. (¶3, 12) Railways Act, 1989 — s.20F — Two-month payment window not a cap on delay — No relegation to arbitration — Held further: The two months set by the High Court was merely the time to pay, not a ceiling on the delay compensable. As this Court's earlier order was clear and needed no interpretation, relegating the claimant to arbitration under Section 20F(1) was erroneous. (¶11, 12) Railways Act, 1989 — s.20F(2) — Parity — Similarly situated claimant — Appeal allowed — Held further: Having paid a similarly situated owner for 66 months of delay, the authority could not confine the appellant to two months. He is entitled to additional compensation over 84 months at not less than 5% per month with 7% interest; appeal allowed. (¶9, 13)
Under the second proviso to Section 20F(2) of the Railways Act, 1989, what is a land owner entitled to when there is delay in making the award?
Where the award is delayed beyond one year, the land owner is entitled to additional compensation for the delay at a rate of not less than 5% of the value of the award for each month of delay. This entitlement was affirmed by the Supreme Court's earlier order in the same acquisition.
Does a court's direction to make payment 'within two months' cap the number of months of delay for which additional compensation under the Railways Act, 1989 can be claimed?
No. The two-month period fixed by the High Court was only the time within which payment was to be made; it was not a direction confining additional compensation to two months of delay. The authority erred in limiting the delayed-payment compensation to two months on that basis.
Where the entitlement to additional compensation is already clear, should the claimant be relegated to arbitration under Section 20F(1) of the Railways Act, 1989 to have it determined?
No. Since the Supreme Court's earlier order had already clarified the manner in which compensation for the delay was to be calculated and paid, there was no reason to relegate the appellant to arbitration; the High Court erred in doing so.
Can an acquiring authority pay one similarly situated land owner additional compensation for a longer delay while confining another to a much shorter period?
No. Having paid a similarly situated owner, Kamla Devi, additional compensation at 5% per month for 66 months of delay under the same award, the authority could not arbitrarily confine the appellant to only two months; he could not be treated differently.
What relief did the Supreme Court grant?
The appeal was allowed. The appellant was held entitled to additional compensation for the left-out land at not less than 5% of the award value over 84 months, with the two months already paid to be adjusted, the balance released within eight weeks, and 7% simple interest on the outstanding amount from the date it fell due.
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Leave granted.
The present appeal is directed against the order dated 31 st August, 2017, passed by the Division Bench of the High Court of Judicature at Allahabad whereby, the Writ Petition filed by the appellant herein praying inter alia for issuing directions to the respondents to pay additional compensation for the entire land area, subject matter of the Notification dated 12th December, 2008, issued under Section 20(E)(1) of the Indian Railways Act[^1], 1989, at the rate higher than 5% per month and further pay interest @ 18% per annum for delay in payment from 30 th March, 2011, i.e. the date on which this Court had passed an order in Civil Appeal No. 2794 of 2011 2 titled “Dedicated Freight Nirmala Negi Corridor Corporation of India Vs. Subodh Singh”, till the actual date of payment 1 in respect of the award dated 08th February, 2010.
It is submitted on behalf of the appellant that the respondents had acquired land in Village Kakrahi, Tehsil and District Auriya, Uttar Pradesh vide Notifications dated 10th June, 2008 and 16th December, 2008 issued under Section 20(E)(1) of the Act. An award was declared on 08th February, 2010 only in respect of the land that the respondents required. As a result, a parcel of land admeasuring 0.0624 Hectare was left out. Aggrieved by the said action, the appellant filed a Writ Petition 3 before the High Court for quashing the award dated 08 th February, 2010, which was allowed vide order dated 12th May, 2010. Challenging the said order, the respondents filed a Petition for Special Leave to Appeal 4 before this Court, which was allowed vide judgment dated 30th March, 2011 holding inter alia that the acquisition in question had not lapsed and having regard to the second proviso to section 20F(2) of the Act, the land owners would be entitled to an additional compensation for the delay in making the payment in terms of the award dated 08 th February, 2010, at a rate not less than 5% of the value of the award for each month of delay.
Pursuant to the aforesaid order, the respondent no.2 issued a certificate in respect of the entire parcel of land in terms of the Notification dated 12 th December, 2008, again leaving an area of 0.0624 Hectare as free from acquisition proceedings. Being aggrieved by the said decision, the appellant filed another petition 5 before the 3 Writ C. No. 14945/2010 5 Writ C. No. 63467/2011 2 High Court, which was allowed vide order dated 20th September, 2016 and the respondents were directed to provide compensation to the appellant for 0.0624 Hectare of land along with additional compensation within a period of two months.
On 19th November, 2016, the respondents prepared a bank draft for a sum of ₹ 2,74,56,000/- (Rupees Two Crores Seventy Four Lakh Fifty Six Thousand) stating that the same was in respect of the compensation payable to the appellant in terms of the order passed by the High Court on 20 th September, 2016. While calculating the additional compensation, the respondent no.2 confined the same to a period of two months for the delayed period.
Aggrieved by the compensation offered by the respondents limiting the delay to only two months, the appellant approached the High Court by filing yet another petition6 claiming that he was entitled to compensation for a period of 84 months, which would come to Rs.10,23,28,000/- (Rupees Ten Crores Twenty Three Lakh and Twenty Eight Thousand), on which the impugned order dated 31 st August, 2017, has been passed observing that the appellant ought to approach the Arbitrator for determining the additional compensation, by invoking Section 20F (1) of the Act.
It is submitted on behalf of the appellant that the respondents have adopted a pick and choose policy in the instant case. While they have paid additional compensation for a period of delay of 66 months to one Smt. Kamla Devi & Ors., who were similarly situated persons like the appellant and their land was also acquired 6 Writ C No. 39875/2017 3 under the very same award, in the case of the appellant the respondents have arbitrarily confined the payment towards the delay only to two months, instead of 84 months.
We have perused the record and heard the arguments advanced by learned counsel for the parties.
At the outset, we may note that the order dated 18 th September, 2017, passed by the Competent Authority refers to an order dated 19 th July, 2017, passed by the High Court in a Writ Petition7 filed by Kamla Devi and others and goes on to record that after completion of formalities of publication, some portion of the land admeasuring 0.0890 Hectare had been left out, as the same was not required for the subject project. Subsequently, another award 8 was declared in respect of the left out area and additional compensation was paid to the land owners @ 5% per month of the award for a period of 66 months, i.e. from 19 th April, 2012 to 12th September, 2017. In the light of the above, the appellant herein is justified in arguing that he cannot be treated differently and in his case, the respondents ought not to have confined the delayed payment on the awarded amount for the left out portion of land to only two months.
The aforesaid submission is disputed by learned counsel for the respondents on a plea that no such direction was issued either by this Court or the High Court permitting compensation for the delayed period beyond two months, for which 7 WP No. 65267 of 2012 8 Award No. 1/2011-12, dated 19 April, 2012 th 4 reliance is sought to be placed on the order dated 20 th September, 2016 passed by the High Court.
The aforesaid submission is taken note of only to be turned down. The period of two months referred to by the High Court in its order dated 20 th September, 2016 was only for making payment of the amount. Not that any direction was issued to the respondents to confine the payment of additional compensation only to a period of two months. In fact, the order passed by this Court on 30 th March, 2011 is crystal clear and needs no interpretation. Highlighting certain anomalies noticed in Chapter IV A of the Act, particularly Section 20F, this Court referred to the proviso to Section 20F (2) and observed as follows:
“12. (iii) The second proviso to section 20F (2) requires payment of additional compensation for the delay in making of the award, at the rate of not less than five percent of the value of award, for each month of delay. This vests unguided discretion in the competent authority or the Arbitrator to award additional compensation at any higher rate and gives room for unnecessary litigation at the instance of “entitled persons” claiming higher percentages as additional compensation. It is necessary to consider whether specifying a fixed monthly rate of increase would serve the ends of justice better instead of indicating a minimum rate per month. xxxx xxxx xxxx “13. In view of our finding that the acquisition has not lapsed, we allow this appeal, set aside the judgment of the High Court, and dismiss the challenge to the acquisition. It is however made clear that in view of the delay in making the award beyond one year, the first respondent shall be entitled to additional compensation as provided under the second proviso to section 20F (2) of the Act. Parties to bear their respective costs.” 12. It is apparent from the above that the appellant would be entitled to additional compensation for the delay in making the award @ not less than 5% of the value of the award for each month’s delay. In our opinion, there was no reason for the High 5 Court to have relegated the appellant to initiate any arbitration proceedings for determining the additional compensation when the order passed by this Court had clarified the manner in which compensation would be calculated and paid for the delay in making the award for the left out parcel of land. 13. In view of the above discussion, the present appeal succeeds. The appellant is held entitled to additional compensation for the left out portion of land at least @ 5% of the value of the award for a period spreading over 84 months. Needless to state that the amount already paid by the respondents towards the delay, i.e., for a period of two months, shall be duly adjusted. The remaining amount shall be released by the respondents within eight weeks from today. Besides the aforesaid amount, the appellant shall also be entitled to simple interest on the outstanding amount calculated @ 7% per annum from the date the said amount became due and payable, till the same is realized. 14. The appeal is allowed on the above terms while leaving the parties to bear their own expenses. .....…...........…………………......J. [HIMA KOHLI] ..................……………………...J. [AHSANUDDIN AMANULLAH] NEW DELHI MAY 16, 2024 PS 6
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