[Cites 13, Cited by 0]

Karnataka High Court

Dundappa S/O Veerappa Malladad vs Special Land Acquisition Officer on 25 March, 2026

Author: M.Nagaprasanna

Bench: M.Nagaprasanna

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH

DATED THIS THE 25TH DAY OF MARCH, 2026

BEFORE

THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

WRIT PETITION No.104133 OF 2025 (LA-RES)

C/W

WRIT PETITON No.104127 OF 2025 (LA-RES)

IN WRIT PETITION No.104133 OF 2025

BETWEEN:

1. DUNDAPPA S/O VEERAPPA MALLADAD
AGED ABOUT 55 YEARS
OCC: BUSINESS

2. VISHWANATH S/O VEERAPPA MALLADAD
AGED ABOUT 50 YEARS
OCC: BUSINESS

ALL ARE R/O S.B.MALLADAD BUILDING
NEAR VENKATESH TALKIES
EXTENSION AREA, GADAG.
... PETITIONERS

(BY SMT. ARCHANA A.MAGADUM, ADVOCATE)

AND:

1. SPECIAL LAND ACQUISITION OFFICER
2

KARNATAKA STATE HIGHWAY AUTHORITY
PROJECT, PWD ANNEXE BUILDING
PROJECT IMPLEMENTATION UNIT
1ST FLOOR, K.R.CIRCLE, BENGALURU - 560 001.

2. ASSISTANT COMMISSIONER AND
LAND ACQUISITION OFFICER
KARNATAKA STATE HIGHWAY
DEVELOPMENT PROJECT
UPPER DIVISION-2
LAXMI COMPLEX SADASHIV NAGAR
BELAGAVI - 590 019.
... RESPONDENTS

(BY SMT. GIRIJA S.HIREMATH, HCGP)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE WRIT OF
CERTIORARI QUASHING IMPUGNED ENDORSEMENT VIDE
ANNEXURE - E BEARING NO. Kra.SaAa (BhuSwa)KSHIP/02/
GadagBypass/02/2011-12/116, DATED.07/03/2025 PASSED BY
THE RESPONDENT NO.2.

IN WRIT PETITON No.104127 OF 2025

BETWEEN:

1. JYOTI S.MALLADAD
AGED ABOUT 52 YEARS
OCC: HOUSEWIFE

2. RAHUL S.MALLADAD
AGE ABOUT 29 YEARS
OCC: BUSINESS

3. SACHIN S.MALLADAD
3

AGED ABOUT 27 YEARS
OCC: BUSINESS
ALL ARE R/O S.B.MALLADAD BUILDING
NEAR VENKATESH TALKIES
EXTENSION AREA
GADAG - 582 101.
... PETITIONERS

(BY SMT. ARCHANA A.MAGADUM, ADVOCATE)

AND:

1. SPECIAL LAND ACQUISITON OFFICER
KARNATAKA STATE HIGHWAY AUTHORITY
PROJECT, PWD ANNEXE BUILDING
PROJECT IMPLEMENTATION UNIT
1ST FLOOR, K.R.CIRCLE
BENGALURU - 560 001.

2. ASSISTANT COMMISSIONER AND
LAND ACQUISITION OFFICER
KARNATAKA STATE HIGHWAY
DEVELOPMENT PROJECT
UPPER DIVISION-2
LAXMI COMPLEX SADASHIV NAGAR
BELAGAVI - 590 019.
... RESPONDENTS

(BY SMT. GIRIJA S.HIREMATH, HCGP)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE WRIT OF
CERTIORARI QUASHING IMPUGNED ENDORSEMENT VIDE
ANNEXURE - E BEARING NO. Kra.SaAa (BhuSwa)KSHIP/02/
GadagBypass/01/2011-12/115, DATED.07/03/2025 PASSED BY
THE RESPONDENT NO.2.
4

THESE WRIT PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS, COMING ON FOR PRONOUNCEMENT THIS
DAY, THE COURT MADE THE FOLLOWING:-

CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA

CAV ORDER

Both these petitions rank a common string of relief viz.,

denial of interest on payment of compensation for the period

between the date of agreement between the petitioners and the

Karnataka State Highways Authorities and, till the date of payment

of compensation.

2. Heard Smt. Archana A. Magadum, learned counsel

appearing for the petitioners and Smt. Girija S. Hiremath, learned

High Court Government Pleader appearing for the respondents.

3. For the sake of convenience, the facts obtaining in Writ

Petition No.104133 of 2025 would be narrated:

3.1. The petitioners are the joint owners of non-agricultural

land in R.S.No.128/3B situate at Gadag measuring 2 acres 20
5

guntas. A notification comes to be issued under Section 15 of the

Karnataka Highways Act, 1964 (hereinafter referred to as 'the Act'

for short) notifying the lands of the petitioners to an extent of

16 guntas 08 annas out of 2 acres 20 guntas. The

1st respondent/Special Land Acquisition Officer acquires the notified

land and the Chief Project Officer of the Project Implementation

Unit of the Karnataka State Highways Development Project fixes

the market value of the acquired land at ₹874/- per sq. ft. The

market value of the petitioner's land is subsequently enhanced to

₹1,093/- per sq. ft. on the score that it is a commercial land. In

furtherance of the notification under Section 15 of the Act, the

petitioners enter into an agreement with the Land Acquisition

Officer accepting the market value so determined on 18-11-2014.

Three years thereafter, a notification comes to be issued under

Section 19 of the Act. The petitioner's land which was found to be

acquired as 16 guntas 8 annas out of 2 acres 20 guntas was now

reduced to 10 guntas and the remaining 6 guntas 8 annas is shown

as Government road. Pursuant to the said notification under Section

19 of the Act, on 26-08-2019, an award is passed for the land

acquired through the preliminary and the amended notification
6

maintaining the acquisition as found in the notification under

Section 19.

3.2. On 30-08-2019, the 1st respondent/Special Land

Acquisition Officer deposits the award amount to the bank account

of the petitioners only to the extent of 10 guntas out of 16 guntas

8 annas. The petitioners then submit a representation seeking

compensation for the remaining extent, as it was acquired pursuant

to the notification under Section 15 and the land was neither usable

by the petitioners nor salable, as agreement was entered into

accepting the market price on 18-11-2014. When the

representation went unheeded, the petitioners were before the

Court in two writ petitions viz., W.P.No.147609 of 2020 c/w 147610

of 2020 seeking a direction to re-determine the compensation. The

writ petitions come to be disposed of by a common order dated

11-01-2024 directing the respondents to re-determine the

compensation, taking into account the revised market value of the

subject land, which at that point in time was ₹1093/- per sq. ft. as

against ₹874/- per sq. ft. determined in the year 2014.
7

3.3. A consent award comes to be passed on 06-06-2024

pursuant to the direction issued by the coordinate Bench of this

Court and accordingly, the difference in compensation amount of

₹3,97,66,603/- was directed to be paid to the petitioners. The

petitioners now claim that they are entitled for interest on such

delayed payment, from the date of agreement till the date of grant

of compensation. An endorsement comes to be issued rejecting the

claim of these petitioners on the score that there was no warrant of

grant of interest and more so as claimed by them. It is this that is

called in question in the cases at hand.

4. Learned counsel Smt. Archana A. Magadum appearing for

the petitioners would vehemently contend that the respondents

have taken possession of the land in the year 2014 itself, pursuant

to execution of the agreement. The land is not with the petitioners.

It is in possession of Highway Authorities. If it is in the possession

of Highway Authorities, they are bound to pay interest from the

date the Authorities entered into agreements. She would seek to

place reliance upon judgments rendered by the Apex Court and a

Division Bench of this Court.
8

5. Per contra, the submission of the learned High Court

Government Pleader appearing for the respondents is one-fold that

compensation was not paid by them on their own volition or as they

are not entitled in law. It was paid only pursuant to the directions

issued by the coordinate Bench of this Court. Therefore, there is no

warrant of grant of any interest that too, at 15% per annum, that is

claimed by the petitioners.

6. I have given my anxious consideration to the submissions

made by the respective learned counsel and have perused the

material on record.

7. The afore-narrated facts, dates and link in the chain of

events are all a matter of record. It would suffice if the averments

in the petitions are noted from the date of entering into an

agreement after the notification under Section 15 of the Act. The

agreement reads as follows:

"ನಷ
ನಷ ಭ ಪ ಬಂಧ ಪತ

ಸ ಎರಡು ಾ ರದ ಹ ಾಲ ೇ ಇಸ , ನವಂಬರ !ಾ"ೆ 18 ೇ ಾಂಕ ರಂದು ಗದಗ
%&ಾ' ಗದಗ (ಾಲೂಕ ಗದಗ "ೋಬ* ಗದಗ +ಾ ಮದ-' .ಾಸ.ಾ/ರುವ 1) 0 ೕ ದುಂಡಪ1 2) 0 ೕ
9

ಶ3 ಾಥ ತಂ5ೆ ೕರಪ1 ಮ&ಾ'ಡದ 6ೆಡೂ78 ಸ3 9ನ ಸವ ಸ3ಮ7ದ !ಾ-ೕಕ ಾದ ಾನು (ಇನು:
ವ;.ಾಟು5ಾರರು, ಅನು>ೋಗ5ಾರರು ಒಳ+ೊಂಡಂ(ೆ) ಾನು ಕ ಾ ಟಕ ಸAಾ ರದ Bಾಜ7Dಾಲರ
ಆFಾನು ಾರ ಇವರ ಪರ ಸ"ಾಯಕ ಆಯುಕ9ರು (ಭೂ ಾ3) ಕ ಾ ಟಕ Bಾಜ7 "ೆ5ಾHI ಅJವೃ L Mೕಜ ೆ
Nೆಳ+ಾ (ಇವರ ಕOೇIಯ ಉತ9BಾQAಾರರು ಮತು9 ವ;.ಾಟು5ಾರರು) ಇವI+ೆ ಒಪ1ಂದದ ಪ Aಾರ
ಬBೆದುAೊಟ ನಷ ಭ ಪ ಬಂಧ ಪತ ದ "ಾಗೂ ಒಪ1ಂದದ ಕBಾರು ಪತ ದ ಕ ಮ ಏ ೆಂದBೆ ಕ ಾ ಟಕ
Bಾಜ7 "ೆ5ಾHI AಾS5ೆ 1964 ರ ಕಲಂ 15 ರನ3ಯ Aೆಳಕಂಡ 6ೆಡೂ78ನ-' ನಮೂ Tರುವ
TUBಾTUಯನು: ಕ ಾ ಟಕ Bಾಜ7 ಪತ ದ >ಾಗ III ಪVಟ ಸಂWೆ7 431 ರ-' ಪ ಕಟ+ೊಂ\ರುವ ಸAಾ ರದ
ಅQಸೂಚ ೆ ಸಂWೆ7 &ೋ.ಇ.62ಇಎ^ 2011 Nೆಂಗಳ_ರು/ ಾಂಕ: 24-04-2011 ರನ3ಯ
ಭೂ ಾ3Qೕನ ಪ\TAೊಂ\ದುH Aಾ`Hಯ ಕಲಂ 19 ರ\ ಾಂಕ: 24-04-2011 ರಂ(ೆ aೂೕಷbೆಯನು:
"ೊರ\TದುH ಅದರಂ(ೆ ನನ+ೆ ೋcೕd eಾIfಾ/ರುತ95ೆ. ಸAಾ ರವV ಾ3Qೕನಪ\TAೊಂಡ ಈ
ಜhೕiನ !ಾ-ೕಕತ3 ಹಕು ಮತು9 ಾ3QೕನvÉ ನನ:-'ರುತ95ೆ,ೆ ನನ: "ೊರತು ಈ ಜhೕiನ jೕ&ೆ NೇgÉ
fಾIಗೂ fಾವV5ೇ Iೕ ಯ ಹಕು ಇರುವV ಲ'. ಈ ಭೂhಯ !ಾ-ೕಕ ಾದ ನನ+ೆ/ನಮ+ೆ
ನನ+ೆ ನಮ+ೆ
ಭೂಪI"ಾರ
ಭೂಪI"ಾರ ಸಂ5ಾಯ.ಾ/ರುತ95ೆ.ೆ

ಸ"ಾಯಕ ಆಯುಕ9ರು Aೆ0k Nೆಂಗಳ_ರು/Nೆಳ+ಾಂ
Nೆಂಗಳ_ರು Nೆಳ+ಾಂ ರವರು ಕ ಾ ಟಕ Bಾಜ7 "ೆ5ಾHI ಅJವೃ L Mೕಜ ೆ
ಅJವೃ ಪ
L \ಸುವ ಉ5ೆHೕಶAಾ / ಭೂ ಾ3Qೕನಪ\TAೊಂ\ರುವ ಸದI ಜhೕiನ-'ರುವ ಮರ !ಾ-
Nಾ§ÄÛ ಪI"ಾರ ಧನ ರೂ ____________ ಗಳನು: ನಷ ಭ !ಾ\ ಪ ಬಂಧ ಪತ
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ಾನು ಾವV ಒ^1ರು(ೆ9ೕ ೆ/.ೆ
ೆ .ೆ.
.ೆ

ಸAಾ ರ ಾ3Qೕನಪ\TAೊಂಡ ಈ 6ೆಡೂ78 ಜhೕiನ ಹm +ೆ ಅಥ.ಾ ;(ಾಸm9+ೆ
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rಬಲಗು ರೂ_________________
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ಬದL ಾ/ರು(ೆ9ೕ ೆ.ೆ

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ನಷ .ಾಗದಂ(ೆ Aಾನೂನು Iೕತ7 ಈ ನಷ ಭIಸು(ೆ9ೕ ೆ ಮತು9 ಸAಾ ರAಾ ಗ-ೕ/
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10

Dಾವ TರುವVದು ಕಂಡುಬಂದ-' ಾನು ಪlೆದ ಸದI ಪI"ಾರದ ಹಣವನು: ಬ\u ಮತು9 ಇತBೇ ಶುಲ
ೇIT "ೆಚುvವI rಬಲಗನು: ಮರು Dಾವ ಸು(ೆ9ೕ ೆ. ತ^1ದH-' ಸದI ಇತBೇ rಬಲಗನು: ನನ:-'
ಉ* ರುವ TUBಾT9ಯ jೕ&ೆ ಕ ಮ Aೈ+ೊಂಡ ಭೂ ಕಂ5ಾಯ Nಾmಯಂ(ೆ ಪIಗyT ವಸೂ- !ಾಡಲು
ಾನು ಒ^1ರು(ೆ9ೕ ೆ.

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{ಾರದ-' ಮೂಲ ಭೂ!ಾ-ೕಕರ ಕುಟುಂಬದ ಸದಸ7Iಂದ ಅಥ.ಾ ಇತBೆ ವ7m9ಗ*ಂದ fಾವV5ೇ
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Dಾವ ಸುವ ಪ m `ಯ-' fಾವV5ೇ 5ೋಷಗ*ದH-' ಅQAಾIಗಳn ಅಂತಹ ಸi:.ೇಶದ-'
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ಪIಹITAೊಡುವVದರ eೊ(ೆ+ೆ ಸAಾ ರ ಂದ iಧ Iಸಲ1ಡುವ >ಾಗಶಃ ಅಥ.ಾ ಪt ಪI"ಾರಧನ
ಸAಾ ರAೆ Dಾವ ಸು(ೆ9ೕ ೆ.

-:: ಒಪ1ಂದದ ಕBಾರು ಪತ ::-

ಈ ಾ3Qೕನ ಪ\TAೊಂಡ ಜhೕi+ೆ ಸAಾ ರವV (Aೆ0k) ಪI"ಾರ ಸಂ5ಾಯ
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ಪlೆಯಲು ಾನು ಒ^1ರು(ೆ9ೕ ೆ.

ಈ ಒಪ1ಂದದ ಷರ 9ನ ಪ Aಾರ ನನ+ೆ ರೂ. ----------------------- ಪI"ಾರ !ಾತ ಸAಾ ರ ಂದ
(Aೆ0k) ಸಂzÁಯ.ಾ/ರುತ9.ೆ.

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ಅವVಗಳ jೕ&ೆ ನನ+ಾಗ-ೕ ಅಥ.ಾ ನನ: ಕುಟುಂಬದವI+ಾಗ-ೕ fಾವV5ೇ ಹಕು ಾಮ7 ರುವV ಲ'
.ೆಂದು ಪ !ಾyೕಕIಸು(ೆ9ೕ ೆ.
11

ಾ3Qೕನಪ\TAೊಂಡ ಜhೕiನ !ಾ-ೕಕತ3ದ ಬ+ೆ€ fಾವV5ೇ ತಕBಾರುಗಳn ಬಂದ-' ಅವVಗಳನು:
£Á£ÉÃ ¸ÀéAvÀ .ೆಚv ಂದ ಪIಹITAೊಡು(ೆ9ೕ ೆ "ಾಗೂ ಸಂದ>ಾ ನು ಾರ ಈಗ T3ೕಕIಸ&ಾದ
ಪI"ಾರದ rತ9 ರೂ.---------------- ಗಳನು: ಮರುDಾವ ಸಲು Nಾದ7ಸ9 ಾ/ರು(ೆ9ೕ ೆ.

-:: ಚಕು ಬಂ ::-

+ಾ ಮ: ಗದಗ "ೋಬ*: ಗದಗ (ಾಲೂ'ಕು: ಗದಗ %&ೆ': ಗದಗ

ಸ.ೆ ನಂ. : 128/3ಬ ಾ3Qೕನ ಪlೆದುAೊಂ\ರುವ T9ೕಣ : 16 ಗುಂ. 08 ಆuÉ

ಪtವ Aೆ : ಸ.ೇ ನಂ. 128/4 ಪ0vಮAೆ : ಸ.ೇ ನಂ. 128/3ಅ

ಉತ9ರAೆ : !ಾi3ಯವರ Dಾ'ಟ ದ•ಣ : ಮು5ೇನಗು\ ಇವರ ಜhೕನು,

MlÄÖ
ಕ. ಸ.ೆ (ೋಟ+ಾIAೆ/ಅರಣ7 (ೋಟ+ಾIAೆ/ಅರಣ7 ಕಟ ಡಗಳ ಕಟ ಡಗಳ
rಬಲಗು
ನಂ. ನಂಬರ ಮರಗಳ ಸಂWೆ7 ಮರಗಳ !ೌಲ7 ಸಂWೆ7 !ೌಲ7

jೕಲ ಂಡ ಕBಾIನ iಬಂಧ ೆಗಳನು: ಓ T, Aೇ*, ಒ^1 ಆತƒಸಂ(ೋಷ ಂದ Aೆಳಕಂಡ
ಾ•5ಾರರುಗಳ ಸಮ„ಮ ಸ; !ಾ\ರು(ೆ9ೕ ೆ/.ೆ.

ಾ•ಗಳn :

1. 1. ಸ;/-

2. 2. ಸ;/-

ಭೂ!ಾ-ೕಕರು

ಭೂ!ಾ-ೕಕರು "ಾಗೂ ಾ•ಗಳn ನನ: ಸಮ„ಮ ಸ; !ಾ\ರು(ಾ9Bೆ.

ಸ"ಾಯಕ ಆಯುಕ9ರು (ಭೂ ಾ3Qೕನ)
ಕ ಾ ಟಕ Bಾಜ7 "ೆ5ಾHI ಅJವೃ L Mೕಜ ೆ,
12

Nೆಳ+ಾ ಉಪ >ಾಗ ನಂ.-2,
Nೆಳ+ಾ ."
(Emphasis added)

The agreement is entered into on 18-11-2014 to an extent of

16 guntas 8 annas. The agreement delivers possession to the hands

of the Highways Authorities. What remained was issuance of

notification under Section 19 of the Act. Section 19 notification is

issued on 20-05-2017 cutting short extent of land that was sought

to be acquired in the notification under Section 15 of the Act and

the agreement entered into between the parties. This short

acquisition of land again became the fulcrum of the award. The

petitioners then represent seeking compensation for the leftover

land of 6 guntas 8 annas. The representations were not considered.

Therefore, the petitioners were before this Court in the afore-noted

petitions.

8. A coordinate Bench of this Court disposed of the petitions

with a direction to re-determine the compensation, taking note of

the land acquired or sought to be acquired in terms of the

agreement. The coordinate Bench in terms of its order dated
13

11-01-2024 disposed the two writ petitions - Writ Petition Nos.

147609 of 2020 c/w 147610 of 2020 by the following order:

".... .... ....

9. The sale deed at Annexure-A and the record of rights
annexed to the petition indicated that the petitioners have
purchased an extent of 2 acres 20 guntas of land in
R.S.Nos.128/3A and 128/3B respectively. The sale deed further
indicated that on the western eastern portion of the land, 50
feet width road is left for providing access to the adjacent land.
The panchanama annexed to the petition indicated that the
petitioners have established ginning factory on the subject land
and the subject lands have been treated as commercial lands.
However, based on the communication issued by the
project Co-Ordinator, an extent of 6 guntas each
belonging to the petitioners has been treated as
Government road only on the ground that the said extent
of land was utilized for the purpose of providing access of
adjacent land. The extent of 6 guntas each was utilized
for providing access road to their respective lands, and
the extent of land utilized for providing access is not for
the public at large. It is also not disputed that the said
extent of land utilized for providing access to adjacent
lands belongs to the petitioner. In the absence of any
material to establish that the said extent of land vested
with the Government or belongs to Government, the
determination of the compensation by taking the extent
of land as 10 guntas instead of 16 guntas 8 acres is
arbitrary and discriminatory.

10. Initially the price fixation committee had
determined the market value in respect of the subject
land at Rs.874/- per square feet by treating it as
commercial land. Thereafter the market value was
revised by the price fixation committee on 20.08.2014 at
annexure-D at Rs.1,093/- square feet. The respondents
under the impugned award without considering the
revised market value has determined the compensation
at Rs.874/- instead of Rs.1,093/-. Therefore, the
impugned modified notification dated 20.05.2017 issued
14

under Section 19 of the Act and the award dated
26.08.2019 passed by respondent No.1 are not
sustainable in law and the same requires to be quashed.
Accordingly, I proceed to pass the following:

ORDER

     (i)     The petitions are allowed.

     (ii)    The   impugned      modified   notification   dated
             20.05.2017       bearing     No.LOE/29/EAP/2012,
             Bengaluru issued under Section 19 of the

Karnataka State Highways Act, 1964 by the subject land acquisition Northern Karnataka State Highways Authority i.e. respondent No.1 and also award dated 26.08.2019 bearing No.S.A(Bhuswa)/KSHP-II/27-A&B passed by respondent No.1 are hereby quashed.

(iii) Respondent No.1 to re-determine the compensation payable to the petitioners by taking into account the revised market value of the subject land of Rs.1,093/- per square feet as per the office order dated 20.08.2014 issued by the Chief Project Officer/respondent No.3 at Annexure D to an extent of 16 guntas 8 annas each in land bearing R.S.No.128/3A and R.S.No.128/3B, and pass an award afresh.

iv) The said exercise shall be concluded within a period of three months from the date of receipt of the certified copy of this order.

(v) The amount of compensation received under the impugned award shall be adjusted towards the enhanced compensation payable to the petitioners."

(Emphasis supplied)

The coordinate Bench holds that the remainder extent of land i.e., 6

guntas each belonging to these petitions in both these cases has

been treated as Government road only on the ground that the said

extent of land was utilized for the purpose of providing access to

adjacent lands. The extent of land that is utilized for private use

between the two owners of land is not for the use of public at large.

Therefore, the determination that the land left out was Government

road, is contrary to the facts. The said finding has become final.

There is re-determination of the compensation by the Authorities.

The re-determination results in payment of remainder of the

compensation. The petitioners now seek interest for the delayed

payment of compensation through their representations. One such

representations reads as follows:

"Sub: Amount of interest from the date of Possession/Agreement to the acquired land in R.S.No. 128/3B measuring 16 guntas and 8 annas of Gadag.

Sir,

That the above land owned by the applicant was acquired by the Award No: S.A.(Bhuswa)/KSHIP-II/27- A&B/GadagBypass-01/2011 dated 26/08/2019. Thereafter, the award amount of Rs. 2,67,99,165/- dated: 6/08/2019. But no interest has been paid for delayed payment of award amount. Hence, the applicant requests you to pay the interest on the said amount from date of possession or date of agreement i.e., 18/11/2014 till the date of payment 30/08/2019.

The applicant states that, as per the order in Writ Petition No. 147610/2020 dated: 11/01/2024 passed by the Hon'ble High Court of Karnataka, Dharwad Bench, a sum of Rs.3,57,89,943/- was paid deducting 10% towards income tax, which is not permissible in law. The applicant is entitled to the entire amount of Rs. 3,97,66,603/- including interest for the delayed payment i.e., from date of taking possession/agreement to date of payment realisation i.e., 18/11/2014 to 17/12/2024.

The applicant is entitled for the interest from the date of possession/agreement till the date of realisation of compensation as held in Writ Appeal No. 1940/2004(LA) between The Commissioner Rehabilitation & Settlement Upper Krishna Project Bagalkot and Another vs. Jayashree A. Kotti and Others & in case of Suresh D. Bankapur and others vs. State of Karnataka and others, Civil Appeal Nos. 2380-2383/2017 dated: 30/01/2018 the Hon'ble Supreme Court by taking into consideration the facts has granted damages at 15% p.a. on amount of compensation from the date of taking possession till the amount was paid. Copies of the order are produced herewith. Kindly consider the representation within a period of one month or at earliest."

(Emphasis added)

In the said representation, reliance is placed upon the judgment

rendered by the Apex Court in the case of SURESH D. BANKAPUR

v. STATE OF KARNATAKA - Civil Appeal No.2380 of 2017,

decided on 30-01-2018 and that of a Division Bench of this Court in

THE COMMISSIONER, REHABILITATION AND RESETTLEMENT

v. JAYASHREE A. KOTTI reported in 2007 SCC OnLine Kar 67.

8.1. The Apex Court in SURESH D.BANKAPUR v. STATE OF

KARNATAKA supra considers the fact where possession is taken

three years prior to the payment of compensation and exercising its

power under Article 142 of the Constitution of India, grants interest

on delayed payment of compensation as follows:

".... .... ....

4. It is also not in dispute that possession had been taken earlier, approximately three years before, whereas agreement had been entered into in the year 2010. As a matter of fact, though the appellants cannot be said to be entitled to solatium and interest in view of the agreement that had been entered into, but since the possession had been taken at an earlier point of time, they would be entitled for damages for the interregnum period, i.e., from the date of taking decision till the date when the amount was paid to them under the agreement.

5. This Court, in the case of Revenue Divisional Officer, Kurnool Dist. Vs. M. Ramakrishna Reddy (D) By LRs., reported in 2011 (11) SCC 648, has laid down that though interest was not payable but damages can be measured and awarded in such cases. Thus, in the instant cases, we deem it appropriate to exercise our inherent power under Article 142 of the Constitution of India to grant damages @15% per annum on the amount of compensation from the date the possession was taken till the amount was paid."

8.2. A Division Bench of this Court in THE COMMISSIONER,

REHABILITATION AND RESETTLEMENT v. JAYASHREE A.

KOTTI supra which also determines an identical circumstance holds

as follows:

".... .... ....

4. On perusal of the records made available and especially the noting of the learned Single Judge that it was the Government Advocate himself who did not dispute the entitlement of the respondents as to the interest from the date of award, in the absence of date of taking possession and as held by the Apex Court in the case of State of Madras v. K.N. ShanmughaMudaliar, we find that the learned Single Judge was justified in awarding the interest from the date of award. It is to be noted that much reliance is placed on the circular dated 5.11.2003. This circular is only an internal correspondence for the sake of convenience of the Government officials. This will not replace the mandatory provisions of law under the Land Acquisition Act. The question of the date to be fixed for calculating the interest is either the starting point i.e., from the date of actual possession or from the date of award. Since no date of actual taking possession is available, the only alternate is to grant interest from the date of award. As noted above, the circular is of no use to the appellant as this is not based on any provision of law or rational basis. Since the circular has no basis of law, we cannot consider it. Hence even on reconsideration of the entire material we do not find any illegality in the impugned judgment passed by the learned Single Judge. As such, the appeal stands dismissed."

9. The payment of interest under the Land Acquisition Act,

1894 is dealt with under Section 34 which reads as follows:

"34. Payment of interest. - When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited:

Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date or expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry."

(Emphasis supplied at each instance)

Section 34 mandates that when the amount of such compensation

is not paid or deposited on or before taking possession of the land,

the Collector shall pay the amount awarded with interest thereon at

9% per annum then. If the compensation is not paid within one

year from the date of the award, the interest payable would be at

the rate of 15% per annum from the date of expiry of one year.

10. The issue now would be, whether possession of the

petitioners' land was taken or otherwise. The agreement is quoted

supra. The land is notified under Section 15 of the Act on

13-11-2012 and the market value of the property was determined.

The agreement is later entered into. They were commercial lands.

Therefore, market value was fixed at ₹1,093/- per sq. ft. It

remained the same till the notification under Section 19 of the Act.

The erroneous determination of 6 guntas 8 annas of land is

corrected by the order of the coordinate Bench. This is accepted by

the respondents and it becomes final. Compensation is also paid.

Therefore, the respondents cannot escape payment of interest on

payment of delayed compensation. The order of the coordinate

Bench undoubtedly would date back to the error in the notification

under Section 19 dated 20-05-2017. The date 20-05-2017 is

relatable to 13-11-2012 and agreement dated 18-11-2014.

Therefore, the petitioners' land was stripped of from their

possession and made no use of land to the extent of 6 guntas and 8

annas. The petitioners thus become entitled to interest, not at 15%

per annum but at 6% per annum, from the date they entered into

agreement including 6 guntas and 8 annas till the date

compensation was paid i.e., 17-12-2024.

11. The reason on which the respondents seek to place

reliance that compensation was paid only pursuant to the order

passed by the coordinate Bench and, therefore the petitioners are

not entitled to interest is repelled, as the coordinate Bench

corrected the error and the correction dates back to the date of

commission of error which is 20-05-2017 and the agreement dated

18-11-2014 had taken away possession of land of the petitioner. In

the light of the aforesaid facts, technical enough they are to the

case at hand, the petitioners become entitled to the aforesaid

interest.

12. For the aforesaid reasons, the following:

ORDER

(i) Writ Petitions are allowed in part.

(ii) The endorsements dated 07-03-2025 in both the cases stand quashed.

(iii) The petitioners are declared entitled to interest for delayed payment of compensation from the date of taking possession of land till the date of payment, which

would be from 18-11-2014 to 17-12-2024, in terms of Section 34 of the Land Acquisition Act, 1894.

Ordered accordingly.

SD/-

(M.NAGAPRASANNA) JUDGE

bkp CT:SS