A LANDOWNER IS ENTITLED TO INTEREST FROM THE DAY OF DEPRIVATION OF POSSESSION - SC

The Top Court held that it is a well-settled law that when a person's land is acquired, he should be immediately paid compensation. If such compensation is not paid, the person would be entitled to interest from the date he was deprived of the possession.

The Division Bench of Justices AM Khanwilkar and CT Ravikumar was hearing an appeal against an order of the Bombay High Court. Before the Apex Court, the issue involved was about the liability to pay interest and the date of commencement of interest.

The case was first moved to the reference court and then the Bombay HC. The reference court ordered that the interest should be paid from April 1997 when possession was taken until March 1998 for the first year at the rate of 9% per annum and thereafter at the rate of 15% per annum till the date of payment, September 2004. Later, the HC overturned this decision of the Reference Court.

The SC held that the issue was already settled in 2004 in Jain v. DDA case, where it was ruled that the person whose land is acquired will be entitled to interest from the day on which land was acquired. Thus, the appellant in the instant case would be entitled to interest from the date on which he was deprived of the land - April 4, 1997.

Author: Papiha Ghoshal