COLLECTOR Vs. HABIB-ULLAH-DIN

JUDGEMENT

(1.) IN all these cases, the common point of law that has been referred to the Full Bench is as follows : -

(2.) IT is common ground that in all these cases the lands of the respondents were acquired and the award by the Collector given before coming into force of the aforesaid amendment. It is also common ground that in all these cases, reference to the District Judge for enhancing the compensation was made before the Amending Act No. XXXIV of 1960 was passed There is also no dispute that the order of the District Judge on the reference made to him was passed some time in the year 1964 that is to say after the afore -mentioned amendment had come into force. The District Judge in all these cases has granted interest at the rate of 6% per annum on the excess of the sum granted under the award of the Collector. Under Section 28 of the Land Acquisition Act, as it stood before the amendment the District Judge was required to grant interest at the rate of 6% per annum but this rate of interest was reduced to 4% per annum by virtue of the amendment. The Amendment was passed in I960 and having received the assent of the then Sadar -i -Riyasat was published in the Government gazette on 19th October 1960 The relevant amendment of Section 28 is to be found in section 7 of the Amending Act which runs a follows : -

(3.) A bare perusal of the amendment would clearly show that it does not contain any word or phrase to indicate that the amendment should run retrospectively so as to apply even to pending proceedings before the judgment by the District Judge is given. It was, however, contended by the Advocate General for the State, who is appellant in all these cases that since the District Judge passed his order enhancing the compensation when the amendment was in force, he should have granted interest not according to law which stood prior to the amendment but according to the Amendment itself In other words, the contention is that the District Judge should have granted interest at the rate of 4% per annum and not at 6% per annum. The respondents in these cases have contested the argument of the Advocate General on two grounds. In the first place, it was argued before us that as there is nothing to show in the language of the Act either by way of express enactment or by way of implied intendment that it would be retrospective in character, the amendment must be held to be prospective and would apply only to the proceedings commenced after the Act or for that matter to the lands which were acquired after the passing of the Amendment. Secondly, it was contended by the respondents that the provisions of section 28 were mandatory and the court had no discretion but a duty to grant interest to the persons whose lands were acquired and, therefore, the Amendment could not have taken away a vested right of these persons unless the Act was made expressly retrospective in character. We have considered the argument of the learned counsel for the parties and we are of the opinion that the contention of the learned counsel for the respondents must prevail. To begin with, it is well settled that there is no presumption that a law which is passed by the Legislature is retrospective in effect, nor is there any presumption that when a law comes into force, while certain proceedings are pending, it would apply to such proceedings unless the law happens to fall within the ambit of proctdural law and changes merely the procedure without touching existing rights. The Advocate General, however, submitted that in view of the fact that the District Judge had to grant interest only under section 28 and as this stage bad not arrived when the amendment came into force, the District Judge should have exercised his discretion under section 28 in accordance with the law which was in force when he came to give his judgment. - It was further contended by the Advocate General that the amendment in question was of such a nature that it should have been read in the original statute as if it was written with the same pen and ink. The learned Advocate General relies on the decision of the Supreme Court reported in AIR 1952 Supreme Court, 324. We shall take up this contention little later. The Advocate General further argued that the provisions of section 28 were purely directory in nature and the court was only given a discretion to grant interest and not a duty to do so. It is however manifest that if it is held that the provisions of sections 28 are mandatory and the granting of interest in not a matter of discretion, but a question of duty, then undoubtedly the effect of the Amendment will be to take away a vested right of the persons whose lands were acquired and the language of the Amendment does not justify its being treated to be retrospective in operation. In these circumstances, we would first take up the question as to whether the provisions of section 28 are mandatory or directory in nature. A review of the entire authorities on the question shows that there are two sets of authorities on this point One class of authorities lay down that section 28 is discretionary but interest must be allowed by the court unless there are special circumstances to negative this relief. The other class of authorities have not dealt with the question as to whether provisions of section 28 are mandotary or directory but have laid down that the person whose property is acquired under the Act, is entitled as a matter of right to the interest mentioned in the section. Thus these authorities have impliedly though not specifically held that the provisions of section 28 are mandtory. In 40. Indian Cases. 274, AIR 1931 Allahabad, 394, AIR 1941 Allahabad, 135, and AIR 1962, Patna 406 it has been held that the provisions of section 28 are discretionary and the court should allow interest in the absence of special circumstances to the contrary. The decision which appears to have gone into this question at some length is reported in AIR 1941 Allahabad, 135. In this case, their Lordships were considering whether interest granted under section 28 of the Land Acquisition Act would be liable to Income tax or would be a capital receipt within the provisions of the Income Tax Act. Their Lordships held that the said amount would not be assessable to Income Tax Act and one of the reasons that their Lordships gave was that under section 28 the awarding of interest was not mandatory but discretionary with the court. This decision appears to have been over -ruled by the Supreme Court in AIR 1964 S. C. 1878 where thair Lordships did not accept the reasons given by the Judges of the Allahabad High Court and held that interest was a right given to the person whose property was acquired as a compensation payable to the owner, and therefore, distinct from compensation that was granted to a person whose property was acquired. In this connection there Lordships, observed as follows :*