ORDER
L. Narasimha Reddy, J.
1. Late Rai Chander Mohan Lal, father of the petitioners herein, was the pattedar of Ac. 10-20 guntas of land in Sy.Nos. 58, 59 and 60 of old Yousufguda Village, Bapunagar, situated within the limits of Municipal Corporation of Hyderabad, the 1st respondent herein. According to the Town Survey, it is in Ward No. 7, Block 1. The 1st respondent published a notification in the Gazette dated 10-9-1987 under Section 3(1) of the A.P. Slum Improvement (Acquisition of Lands) Act 1956 (for short ‘the Act’), declaring the said land as slum. This was followed by a notice calling upon the owner of the land to show-cause as to why it should not be acquired. The objections raised on behalf of the father of the petitioners did not appeal to the 1st respondent- Ultimately, a notification under Sub-section (2) of Section 3 of the Act was published in the Gazette dated 21-2-1988. Thereby the land in the said survey numbers admeasuring an extent of 49322 sq.yards stood vested in the Government. The father of the petitioners died on 2-12-1995. The complaint of the petitioners is that though about 1 1/2 decade has elapsed, they have not been paid compensation as provided for under the Act.
2. Separate counter-affidavits are filed by the respondents. All the respondents admit the factum of the land of the petitioners having been notified, acquired and vested in the Government, under the provisions of the Act. So far as the payment of compensation is concerned, no definite plea as such is taken by any of the respondents. On behalf of Respondent No. 1, it is contended that except exercising the power to issue notifications under the delegated authority, he did not incur any liability under the Act. The 3rd respondent contends that the land has since been developed and that the Government of A.P., had issued Memo dated 11-2-1997, approving a list of 387 slums in the twin cities of Hyderabad and Secunderabad, for deletion. He claims to have submitted proposals to the District Collector, the 2nd respondent, for fixing the market value and payment of the compensation. Proposals are said to be under consideration. The 2nd respondent has not taken any definite stand in the matter.
3. Learned Counsel for the petitioners submits that once the land has been acquired under the Act and stood vested in the Government, the respondents are under obligation to pay the compensation as provided for under the Act. He submits that non-payment of compensation amounts to unlawful assumption of the possession of the land by the respondents.
4. Learned Standing Counsel for Respondents 1 and 3 submits that the 1st respondent acted only on the basis of delegation of powers made by the Government of Andhra Pradesh and that they are not under obligation to pay the compensation. He relies upon Section 4 of the Act and submits that the obligation to pay compensation rests with the Government, inasmuch the land, which was vested in the Government, has not been transferred to the Municipal Corporation. Learned Government Pleader for Land Acquisition submits that since the land was acquired for the benefit of Municipal Corporation, the latter is under obligation to pay the compensation.
5. It is a matter of record that the land of the petitioners in the said survey numbers was initially declared as slum through a notification under Section 3(1) of the Act. Section 3(2) of the Act provides for calling upon the owner of the land to show cause as to why the land declared as slum should not be acquired. Such a notice was issued to the father of the petitioners. Objections were submitted. Not being satisfied with the same, the 1st respondent proceeded to publish a notification acquiring the land. Thereby the land vested absolutely in the State Government under Section 3(3). Section 3(4) empowers the Government to authorise any authority or officer to exercise all or any of the powers under the Act. The Government is said to have authorised the 1st respondent to exercise the power of issuing notifications under Sub-sections (1) and (2).
6. Where the land of any person is acquired through the notification issued under Section 3, he is vested with the right to be paid the compensation under Section 5 of the Act. Section 6 prescribes the procedure and basis for determination of the compensation. It is not in dispute that the land of the petitioners was acquired. The controversy is only as to payment of compensation. Though the notification under Section 3(2) was issued way back on 21-4-1988, compensation had not been paid so far. Failure of the respondents to pay the compensation constitutes an act of gross arbitrariness. The respondents exhibited great enthusiasm in publishing notifications under Section 3, which resulted in divesting the petitioners of their title and possession of the land. They did not exhibit even a fraction of that enthusiasm in payment of compensation. It is not as if the Act provides for payment of market value. The compensation provided for under Section 6 does not represent the market value of the land. The respondents appear to have gained an impression that their duty ends with the acquisition of the land.
7. While Respondents 1 and 3 submit that the obligation to pay the compensation rests with the 2nd respondent, who represents the Government, the latter contends that the 1st respondent has to pay the compensation since the land was situated within the limits of Municipal Corporation. In this context, Section 4 of the Act becomes relevant. As observed earlier, on publication of a notification in Section 3(3), the land stands vested in the “Government”. Sub-section (1) of Section 4 leaves it open to the Government either to hold the land under its control or to transfer it to the Municipal Council or Municipal Corporation. It is only when such land is “transferred”, that it shall vest in the Municipal Council or Municipal Corporation, Sub-section (2) thereof mandates that where the land is transferred under Sub-section (1) to the Municipal Corporation or Municipal Council, it shall be the liability of such local authority to pay the compensation in its entirety or in such proportion as may be fixed by Government. Sub-section (3) directs that where the land continues to be under the control of the Government, it can undertake clearance or improvement of the slum and the compensation shall be borne by the person to whom the land is allotted in such proportion as may be prescribed. The obligation for the 1st respondent to pay compensation would arise, if only the land was transferred in its favour. There is nothing on record to disclose that the Government has transferred the land in favour of the 1st respondent. Nothing short of transferring the land in favour of the Corporation would obligate it to pay the compensation. In the absence of such a transfer, the obligation squarely rests on the Government to pay the compensation,
8. The 3rd respondent has categorically pleaded in his counter- affidavit that he has addressed many fetters to the 2nd respondent-the District Collector to arrange for compensation. This Court takes serious exception to the inaction on the part of the 2nd respondent in making requisite funds available to the 3rd respondent for payment of compensation to the petitioners. The acts of Respondents 1 and 2 in acquiring the land and the omission of the 2nd respondent in paying the compensation have virtually amounted to confiscation of the property of the petitioners contrary to law. The same cannot be countenanced.
9. Under the Land Acquisition Act, the delay in passing the award has been taken care of by providing interest under Section 34 and additional market value under Sub-section 1A of Section 23 of that Act. Section 9 of the present Act provides for payment of interest at the rate of 4% p.a. Such a low rate of interest is provided on an assumption that the authorities who are under obligation to pay the compensation would act without avoidable delay. The compensation provided for under the Act itself is meagre. In number of cases, the Supreme Court took judicial notice of the geometrical proportion in which the cost of the land, particularly in the urban areas, has been increasing. The respondents cannot be permitted to take advantage of their own delay, nor the petitioners can be made to suffer for the inaction on the part of the respondents.
10. Hence, the writ petition is allowed, directing that Respondents Nos. 1 and 3 shall take necessary steps for payment of compensation to the petitioners, within a period of 2 months from the date of receipt of a copy of this order. The compensation determined by Respondent 3 shall carry interest at the rate of 4% for a period of one year from the date of vesting of the land in the Government, viz., 21-4-1988 and at the rate of 15% p.a. till the date of payment of the amount. The 2nd respondent shall make necessary funds available within the time stipulated above. No costs.