Ratti Ram v. Union of India & Anr.
Background
The appellants' land had been acquired under an earlier award, and the Supreme Court had previously fixed the final land value at Rs. 76,550 per Bigha in a related 2004 judgment. The appellants sought statutory interest on this enhanced compensation under Section 28 of the Land Acquisition Act, 1894, but the lower court denied interest for the period during which the compensation reference proceedings had remained stayed, reasoning that the stay had been obtained at the appellants' own instance, so the Government should not bear the interest burden for that delay.
Decision Breakdown
The Supreme Court held that Section 28 of the Act contains no exclusion for any period of stay: the statute only looks to the date of dispossession as the starting point for interest liability, which runs continuously from that date to the date of payment. The Court found it legally unjustified to deny statutory interest merely because reference proceedings happened to be stayed, regardless of at whose instance the stay occurred, since that is not a relevant factor under the statutory scheme. It allowed the appeals, directed that interest be paid for the full period including the stay period (24.04.1997 to 27.09.2001), and ordered the Delhi Development Authority to compute and deposit the amount with the Executing Court within four weeks for disbursement to the appellants.
Lesson Learnt
Statutory interest on enhanced land acquisition compensation runs continuously from the date of dispossession to the date of payment, and cannot be withheld for any intervening period, including a stay of proceedings, unless the statute itself carves out such an exception.