Section 34 and 35 of Land Acquisition Act 1894: Interest and Temporary Occupation
Section 34 of the Land Acquisition Act, 1894 dealt with interest where compensation was not paid or deposited before possession was taken. Section 35 governed temporary occupation and use of waste or arable land for a public purpose or for a Company, subject to the statutory conditions.
- Section 34 - interest on unpaid or undeposited compensation
- 9 percent and 15 percent interest rates
- Section 35 - temporary occupation of waste or arable land
- Notice and compensation for temporary occupation
- Reference to Court where compensation is disputed
- Important legal terms and related provisions
Section 34: payment of interest
Section 34 applied when compensation was not paid or deposited on or before the Collector took possession of the acquired land. In that situation, the Collector was required to pay the amount awarded together with statutory interest from the time possession was taken until the compensation was paid or deposited.
Basic rule
If compensation was not paid or deposited on or before possession, interest was payable at 9 percent per annum from the date possession was taken until payment or deposit, subject to the enhanced rate applicable after one year.
Interest rates under Section 34
| Period of delay | Statutory rate | Amount on which interest applied |
|---|---|---|
| From taking possession up to expiry of one year | 9 percent per annum | The compensation awarded and remaining unpaid or undeposited. |
| After expiry of one year from taking possession | 15 percent per annum | The compensation, or part of it, that remained unpaid or undeposited when the one-year period expired. |
The proviso to Section 34 provided that where compensation or any part of it remained unpaid or undeposited for more than one year from the date possession was taken, interest at 15 percent per annum became payable from expiry of that one-year period on the amount that remained unpaid or undeposited.
The provision linked the interest liability to taking possession without payment or deposit of compensation. The relevant dates were therefore important for determining when interest began and whether the enhanced 15 percent rate became applicable.
Section 35: temporary occupation of waste or arable land
Section 35 dealt with temporary occupation and use rather than permanent acquisition. Subject to Part VII of the Act, where the appropriate Government considered that temporary occupation and use of waste or arable land were needed for a public purpose or for a Company, it could direct the Collector to procure such occupation and use.
Maximum period of temporary occupation
The term fixed under Section 35(1) could not exceed three years from commencement of the occupation. The provision therefore authorized temporary use for a limited statutory period rather than permanent acquisition of the land under Section 35.
Section 35(2): notice and compensation
After receiving the Government's direction, the Collector was required to give written notice to the persons interested in the land stating the purpose for which it was needed. Compensation was payable for the temporary occupation and use and for materials, if any, taken from the land.
The compensation could be agreed as a gross sum or as monthly or other periodical payments. The agreement between the Collector and the persons interested was required to be in writing.
| Requirement | Section 35 position |
|---|---|
| Type of land | Waste or arable land. |
| Purpose | Public purpose or use for a Company, subject to Part VII. |
| Authority | The appropriate Government could direct the Collector to procure occupation and use. |
| Maximum term | Not more than three years from commencement of occupation. |
| Notice | Written notice to persons interested stating the purpose for which the land was needed. |
| Compensation | Gross sum, monthly payment or another periodical payment agreed in writing. |
Section 35(3): dispute about compensation or apportionment
If the Collector and the persons interested differed about the sufficiency of compensation or its apportionment, Section 35(3) required the Collector to refer the difference to the decision of the Court.
The reference mechanism covered both the amount or sufficiency of compensation for temporary occupation and a disagreement about how that compensation should be apportioned among persons interested.
Important legal terms and related provisions
Compensation: Under Section 34, the relevant amount was the compensation awarded but not paid or deposited before possession. Section 35 separately contemplated compensation for temporary occupation and use and for materials taken from the land.
Possession: For Section 34, the date on which possession was taken was material because statutory interest ran from that point when compensation had not already been paid or deposited.
Waste or arable land: Section 35 specifically applied to temporary occupation and use of waste or arable land within the conditions stated in that section.
Persons interested: Section 3(b) broadly included persons claiming an interest in compensation to be made on account of acquisition of land and included persons interested in an easement affecting the land.
Appropriate Government: The expression was defined by Section 3(ee) of the 1894 Act and its application depended on the acquisition concerned and the statutory definition then in force.
Company: The expression was governed by the definition in Section 3(e) and the special provisions of Part VII of the Act.
Court: The expression was defined in Section 3(d), subject to the statutory text and any applicable local amendments.
Relationship with Sections 31 to 33
Section 31 governed payment or deposit of compensation after an award. Sections 32 and 33 dealt with investment of money deposited in Court. Section 34 then imposed interest where compensation had not been paid or deposited on or before possession was taken.
Legal position after the 2013 land acquisition law
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 repealed the Land Acquisition Act, 1894 through Section 114. Earlier acquisitions and proceedings may require consideration of the transitional and saving provisions of the 2013 Act, Section 6 of the General Clauses Act, 1897, applicable amendments and judicial decisions. The legal position in an individual matter depends on the facts and procedural stage of the acquisition.
This article explains the statutory framework under the Land Acquisition Act, 1894 before implementation of the 2013 Act. It is general legal information and not advice for a particular land acquisition matter.