Sections 27 and 28 of the Land Acquisition Act 1894

Sections 27 and 28 dealt with financial consequences of a Court reference under the Land Acquisition Act, 1894. Section 27 governed the costs of proceedings and their allocation. Section 28 empowered the Court, where it found that the Collector should have awarded more compensation, to direct interest on the excess amount at the statutory rates.

Historical law: This article explains the central statutory position immediately before the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 came into force on 1 January 2014. Section 114 of the 2013 Act repealed the Land Acquisition Act, 1894 subject to savings. Application of the former Act to an acquisition or pending proceeding therefore depends on the applicable transitional and saving provisions.

Section 27 - Costs of Court proceedings

Meaning: Section 27 required the Court's award to deal expressly with the costs incurred in proceedings under the relevant Part of the 1894 Act. It also regulated who should bear those costs when the Collector's award was not upheld.

Section 27(1) - Award to state costs and how they are paid

Every such award was required to state:

The amount of costs: The award had to identify the costs incurred in the proceedings under that Part of the Act.

The persons liable: It had to state by what persons the costs were to be paid.

The proportions: Where responsibility was divided, the award had to state the proportions in which the persons concerned were to bear those costs.

Section 27(2) - Costs when the Collector's award is not upheld

When the Collector's award was not upheld, the ordinary rule under Section 27(2) was that the costs would be paid by the Collector. The Court, however, could depart from that ordinary position where it considered the applicant's conduct justified doing so.

Extravagant claim: If the applicant's claim was so extravagant that a deduction from costs was justified, the Court could make an appropriate costs order.

Negligence before the Collector: If the applicant had been so negligent in putting the case before the Collector that a deduction was warranted, the Court could reduce the applicant's costs.

Collector's costs: In an appropriate case, the Court could require the applicant to pay part of the Collector's costs.

Effect: Section 27(2) established an ordinary costs consequence when the Collector's award was not upheld, while preserving judicial discretion where the applicant's claim or conduct justified a different allocation.

Section 28 - Interest on excess compensation

Section 28 applied where the Court concluded that the compensation the Collector ought to have awarded exceeded the amount the Collector actually awarded. The Court's award could then direct the Collector to pay interest on that excess compensation.

Excess compensation in this context means the difference between the compensation which, in the Court's opinion, ought to have been awarded and the compensation actually awarded by the Collector.

Interest rates under Section 28

9% per annumInterest on the excess could be directed from the date on which the Collector took possession of the land to the date the excess was paid into Court.

15% per annumWhere the excess, or part of it, was paid into Court after one year from the date possession was taken, the Court could direct 15 percent per annum from expiry of that one-year period on the unpaid excess or unpaid part.

The enhanced 15 percent rate therefore concerned the portion of excess compensation that remained unpaid into Court after expiry of one year from the date possession was taken.

Timeline: The statutory starting point for Section 28 interest was possession. For the first year the relevant rate was 9 percent per annum; after expiry of one year, the proviso permitted 15 percent per annum on the excess amount or part that had not been paid into Court before that date.

How Sections 27 and 28 fitted into the Court award

Provision	Function under the 1894 Act
Section 26	Prescribed the form of the Court's award and required the relevant compensation amounts and grounds to be specified.
Section 27	Required the award to state the costs of the proceedings and determine who would pay them and in what proportions.
Section 28	Allowed the Court to direct statutory interest where the compensation that ought to have been awarded exceeded the Collector's award.
Section 28A	Provided, subject to its statutory conditions, for re-determination of compensation for certain other persons interested on the basis of a Court award.

Section 28 interest and Section 34 interest were distinct provisions

Section 28 dealt specifically with interest on the excess compensation resulting from the Court's determination. Section 34 separately dealt with interest where compensation was not paid or deposited on or before the Collector took possession. The provisions therefore operated in different statutory settings even though the pre-2014 central Act used corresponding 9 percent and 15 percent rate structures.

Position after the 2013 Act

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 came into force on 1 January 2014 and established the replacement central framework for acquisition, compensation, rehabilitation and resettlement. Section 114 repealed the Land Acquisition Act, 1894 subject to savings. Sections 27 and 28 discussed on this page accordingly describe the earlier central regime, and their application to an individual acquisition depends on the procedural history and applicable saving or transitional provisions.