Malprabha Reservoir Project Compensation Dispute: Supreme Court Judgement

In the case of the Malprabha Reservoir Project compensation dispute, the appellant-claimant has challenged the judgement and order dated 17.02.2016 regarding the compensation amount awarded for their property acquisition. The dispute arose between the landowners and the Government of Karnataka, concerning the valuation of land affected by the dam construction. Let’s delve into the details of the Supreme Court’s judgement on this significant land acquisition and compensation case.


  • A dam was constructed in Belgaum across the Malprabha river under Malprabha Reservoir Project by the Government of Karnataka.
  • The award passed on 23.7.2009 was Rs.56,672 per acre, while a claim for compensation at the rate of Rs.5,00,000 per acre was sought on 1.9.2009.
  • Misc. Second Appeal was filed in the High Court due to the awarded compensation.
  • Notification under section 4 of the Land Acquisition Act was issued on 7.6.2007, with a subsequent declaration under section 6 on 15.12.2007.
  • Interest under section 34 of the Act was awarded from 23.07.2009 onwards.
  • The original height of the dam was 2074.5 feet, later raised without a proper survey of the lands that would be submerged.
  • In 1991, water entered lands not acquired when the full reservoir breached.
  • An amount of Rs.2,70,000 per acre was initially awarded by the Senior Civil Judge, subsequently enhanced to Rs.3,00,000 per acre by the High Court of Karnataka, Circuit Bench at Dharwad in 2016.
  • The appellant-claimant filed this appeal against the judgment and order dated 17.02.2016.
  • High Court ordered payment of interest from the date of award, i.e. 23.7.2009, not from the date of notification under section 4 or w.e.f. 1991.
  • High Court awarded compensation at the rate of Rs.3,00,000/- per acre.
  • District Court reduced the compensation to Rs.2,25,000/- per acre using the capitalization method.

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  • Interest has been awarded from the date of the award.
  • The appellant claimed possession of the land in cultivation with evidence of an open well and borewell during an inspection in 2008.
  • The appellant argued for compensation from 1991 when the area allegedly came under submergence until the date of notification under section 4.
  • The senior counsel for the appellant disputed the 1991 submergence claim and presented documents from 1993 to 2005 showing cultivation on the disputed land.
  • An inquest conducted in 2009 showed crops of sugarcane, wheat, jwar, and cotton on the land.

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  • In cases where the landowner is dispossessed before the issuance of preliminary notification under Section 4(1) of the Act, the title of the land continues to vest with the landowner.
  • The landowner is entitled to recover possession of the land through legal proceedings and receive rent or damages for the Government’s use and occupation of the property.
  • The Collector should determine the rent or damages payable to the landowner while calculating the compensation amount for the property acquisition.
  • Interest at prevailing bank rate may be awarded for delayed payment of the compensation amount.
  • Interest under section 34 or section 28 can start only from the date possession is taken.
  • In certain cases, interest may run from the date possession was taken, but this is not applicable in cases falling under a specific category.
  • It is open for the landowner to recover possession of the land through legal proceedings if dispossessed prior to the issuance of the preliminary notification.
  • In such cases, no interference is called for by the Court.
  • Interest under Section 34 is payable from the date of the award, not prior to the Section 4 notification.
  • Claimants can only receive interest from the date compensation is payable.
  • Possession taken earlier to the publication of Section 4 notification does not allow for interest to be granted before the notification.
  • Landowners can claim rent or damages for the period of submergence or possession loss before the notification under Section 4.
  • The land vests in the State only after the issuance of notification under Section 4 and the culmination of acquisition proceedings into an award.
  • The decision in R.L. Jain’s case is binding and clarifies the timing of when interest becomes payable.
  • Claims for interest under Sections 28 and 34 must be justified with reasons, not just citing the sections.
  • It is essential to establish the date of possession or submergence when determining compensation or interest.
  • Compensation must be paid or deposited within one year from the date possession is taken.
  • If compensation is not paid within one year, 15% per annum interest is payable from the expiry of the one-year period.
  • Section 34 of the Act states that if compensation is not paid before taking possession, the Collector must pay the amount with 9% per annum interest until paid or deposited.

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  • The Collector is directed to examine whether the area in question came under submergence in 1991.
  • The determination of damages to be paid from 1991 till the date of notification under section 4 is crucial.
  • If the area was submerged, the appellant is entitled to interest under Section 34 from the date of notification under Section 4 until the award.
  • Interest under Section 34 can be claimed from the date of notification under section 4, if the submergence occurred before that date.
  • The Collector must make this determination within six months after hearing all parties and relevant evidence.


Case Number: C.A. No.-000475-000475 / 2020

Click here to read/download original judgement

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