Sections 71 and 72 of Land Acquisition Act 2013: Costs and Interest on Excess Compensation
Sections 71 and 72 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 deal with costs of proceedings before the Land Acquisition, Rehabilitation and Resettlement Authority and interest where the Authority determines that the Collector should have awarded a higher amount of compensation.
Section 71 - Costs
Every award must state the amount of costs incurred in the proceeding under the relevant Chapter and identify the persons by whom, and the proportions in which, those costs are to be paid.
When the Collector's award is not upheld
Where the Collector's award is not upheld, the costs are ordinarily to be paid by the Collector. Section 71(2), however, gives the Authority discretion where it considers that the applicant's claim was so extravagant, or the applicant was so negligent in presenting the case before the Collector, that a deduction should be made from the applicant's costs or that the applicant should pay part of the Collector's costs.
Section 72 - Interest on excess compensation
If the compensation which, in the Authority's opinion, the Collector ought to have awarded exceeds the compensation actually awarded by the Collector, the Authority may direct payment of interest on that excess amount.
Interest at 9 percent per annum
The Authority may direct the Collector to pay interest on the excess compensation at nine percent per annum from the date on which possession of the land was taken until the date on which the excess is paid into the Authority.
Interest at 15 percent after one year
The proviso to Section 72 permits the Authority to direct that, where the excess compensation or any part of it is paid into the Authority after expiry of one year from the date possession was taken, interest at fifteen percent per annum is payable from expiry of that one-year period on the amount of the excess, or part of it, that had not been paid into the Authority before that date.
Interest structure under Section 72
| Period | Rate | Amount on which interest applies |
|---|---|---|
| From the date possession is taken up to the applicable first-year period | 9 percent per annum | Excess compensation determined by the Authority. |
| After expiry of one year from possession | 15 percent per annum | Excess compensation, or the relevant part, not paid into the Authority before expiry of that year. |
Meaning of excess compensation
For Section 72, the relevant excess is the difference between the compensation that the Authority considers the Collector ought to have awarded and the compensation the Collector actually awarded. The interest direction therefore follows an enhancement of compensation by the Authority.
Relationship with Sections 69 and 70
Section 69 governs determination of compensation by the Authority, including the statutory compensation parameters, additional amount and solatium. Section 70 prescribes the form and legal effect of the Authority's award. Sections 71 and 72 then address costs and interest on the enhanced or excess compensation.
Authority under the 2013 Act
Section 51 provides for the appropriate Government to establish one or more Land Acquisition, Rehabilitation and Resettlement Authorities for exercising the jurisdiction, powers and authority conferred by the Act. References to the "Authority" in Sections 71 and 72 concern this statutory adjudicatory forum.
Sections 71 and 72 at a glance
- The award must state the costs of the proceeding and how those costs are to be borne.
- If the Collector's award is not upheld, the Collector ordinarily bears the costs, subject to the qualification in Section 71(2).
- Where the Authority finds that higher compensation should have been awarded, it may direct interest on the excess.
- The initial statutory interest rate under Section 72 is nine percent per annum.
- For qualifying unpaid excess after one year from possession, the proviso permits interest at fifteen percent per annum from expiry of that one-year period.