Statutory Interest Under Section 28 Land Acquisition Act Cannot Be Denied For Delay In Filing Amendment Application: 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 ruling dated 12 October 2026, held that a landowner’s statutory entitlement to interest on enhanced compensation under the Land Acquisition Act, 1894, cannot be curtailed or denied on the ground of delay in seeking an amendment to the claim.

A bench of Justice Shail Jain observed that the "statutory incident" of interest is intrinsically linked to the compensation itself and cannot be withheld even if the application for amendment of the claim is filed after an interval, provided the appeals were instituted within the limitation period.

Clarifying Scope Of Review Jurisdiction

The dispute arose from review petitions filed by M/s Sylvania & Laxman Ltd., challenging an earlier order of the Court dated 10 April 2026. While the Court had previously allowed the appellants’ applications under Order VI Rule 17 of the CPC to amend their compensation claims, it had imposed a condition denying statutory interest for the period between the filing of the appeals and the filing of the amendment applications. The appellants contended that this condition was contrary to the settled law regarding mandatory interest under Section 28 of the Land Acquisition Act.

The primary question before the Court was whether the discretionary condition imposed in an interlocutory order, which denied interest for a specific period, constituted an "error apparent on the face of the record" justifying a review. The Court was further required to determine whether the failure to consider binding precedents of the Supreme Court at the time of the initial order warranted a reconsideration of the interest-denial condition in the interest of justice.

Binding Precedents And Statutory Mandate

The Court noted that the initial order was passed without the benefit of the Supreme Court’s rulings in Ratti Ram v. Union of India and Koli Nanji Bhuta v. State of Gujarat. In Ratti Ram, the Supreme Court had clarified that the Land Acquisition Act contemplates no exclusion of any period for the payment of interest, as the liability to pay interest commences from the date of dispossession. Furthermore, in Koli Nanji Bhuta, the Apex Court specifically rejected the contention that interest on enhanced compensation could be denied due to delays in filing the appeal or the amendment application.

Court Rejects Discretionary Limitation On Interest

Applying these principles, the High Court held that the interval taken by the petitioner to file the amendment application—which was prompted by a subsequent judgment of a coordinate bench—did not justify depriving them of their statutory right to interest. The bench reasoned that if statutory interest could not be withheld even in cases where the appeal itself was filed belatedly, it was legally untenable to withhold interest where the appeals were filed in time and the only delay was in the amendment process.

"The principle laid down in these decisions thus applies with greater force to the present case," the Court observed, emphasizing that interest serves as a component of the true market value of the acquired land.

Finding merit in the review petitions, the Court set aside the restrictive condition imposed in paragraph 41 of the original order. The Court directed that the amendment applications be allowed unconditionally, thereby enabling the appellants to claim statutory interest on the enhanced compensation, if awarded, in accordance with the law. By rectifying this condition, the Court ensured that the claimants were not penalized for the timeline of their procedural applications, aligning the interim order with the mandate of the Land Acquisition Act.

Date of Decision: 12 October 2026