Statutory Interest Under Land Acquisition Act Cannot Be Denied For Delay In Seeking Amendment To Claim: Delhi High Court

"The Hon’ble Supreme Court has consistently held that interest under Section 28 of the Land Acquisition Act, 1894 is a statutory incident of enhanced compensation." Delhi High Court, in a significant ruling dated October 12, 2026, held that statutory interest on enhanced compensation in land acquisition cases cannot be denied to a claimant on the ground of delay in filing an application for amendment of the claim.

A bench of Justice Shail Jain, while allowing the review petitions filed by M/s Sylvania & Laxman Ltd., emphasized that since interest is a statutory incident of compensation, there is no legal basis to exclude any specific period from its computation, even if the amendment application was filed belatedly.

The appellant-company had previously approached the High Court seeking amendments to their appeals to claim higher compensation for acquired lands. While the Court allowed the amendments under Order 6 Rule 17 of the CPC, it had imposed a condition in its order dated April 10, 2026, denying the appellant interest on the enhanced amount for the period spanning between the filing of the appeals and the filing of the amendment applications. The appellant sought a review of this condition, relying on precedents regarding the mandatory nature of statutory interest.

The primary question before the court was whether it was legally permissible to impose a condition disentitling a claimant to statutory interest on enhanced compensation for the period of delay in moving an amendment application. The court was also tasked with determining whether the failure to consider binding Supreme Court precedents at the time of the original order constituted an "error apparent on the face of the record" warranting a review.

Scope of Review Jurisdiction Clarified

The court noted that while the power of review is limited and cannot be an "appeal in disguise," it is not strictly confined to the discovery of new evidence. The expression "any other sufficient reason" under Order 47 Rule 1 of the CPC allows the court to reconsider its findings when binding authorities, which were not previously brought to its notice, indicate that a condition imposed is contrary to law.

Statutory Interest as a Right

The court observed that the Land Acquisition Act, 1894, specifically under Section 28, does not provide for the exclusion of any period for the payment of interest. The liability to pay interest is linked solely to the date of dispossession and is a statutory incident of the enhanced compensation awarded.

"The Act contemplates no exclusion of any period on whatever account under Section 28 of the Act. The only reference is to the date of dispossession."

Precedents Applied to Deny Discretionary Cut-offs

The High Court relied on the Supreme Court’s decision in Ratti Ram v. Union of India, which held that there is no scope for excluding any period from the calculation of interest. Furthermore, the court cited Koli Nanji Bhuta v. State of Gujarat, where the Supreme Court rejected a similar contention that interest should be denied for periods where the appeal or the amendment application was filed belatedly.

No Justification for Withholding Interest

The court reasoned that if statutory interest cannot be withheld even in cases where the appeal itself was filed with a delay, there is no justification for withholding it when the appeals were instituted in time and only the amendment application faced a lapse. The bench noted that while the timing of an amendment is a relevant consideration for allowing the amendment itself, it does not empower the court to deprive the landowner of statutory interest.

"The principle laid down in these decisions thus applies with greater force to the present case."

Finding merit in the review petitions, the court set aside the restrictive condition originally imposed in paragraph 41 of the order dated April 10, 2026. The bench clarified that the applicants are entitled to claim statutory interest on the enhanced compensation, if awarded, in accordance with the law, without any exclusion for the period taken to move the amendment applications.

Date of Decision: 12 October 2026