Ali, J.In all these cases, the common point of law that has been referred to the Full Bench is as follows:

whether the amendment in the Jammu and Kashmir Land Acquisition Act introduced by Act No. XXXIV of 1960 in regard to the rata of interest is retrospective or prospective in its effect

2. It is common ground that in all these cases the lands of the Respondents were acquired and the award by the Collector given before coming into force of the aforesaid amendment. It is also common ground that in all these cases, reference to the District Judge for enhancing the compensation was made before the Amending Act No. XXXIV of 1960 was passed. There is also no dispute that the order of the District Judge on the reference made to him was passed some time in the year 1964 that is to say after the afore-mentioned amendment had come into force. The District Judge in all these cases has granted interest at the rate of 6% per annum on the excess of the sum granted under the award of the Collector. u/s 28 of the Land Acquisition Act, as it stood before the amendment the District Judge was required to grant interest at the rate of 6% per annum but this rate of interest was reduced to 4% per annum by virtue of the amendment. The amendment was passed in 1960 and having received the assent of the then Sadar-i-Riyasat was published in the Government gazette on 19th October 1960. The relevant amendment of Section 28 is to be found in Section 7 of the Amending Act which runs as follows:

Amendment of Sections 28 and 35, Act X of 1990. In Sections 28 and 35 of the said Act, for the words and figures "six per centum" and "6 per centum" the words "four per centum" shall be substituted.

A bare perusal of the amendment would clearly show that it does not contain any word or phrase to indicate that the amendment should run retrospectively so as to apply even to pending proceedings before the judgment by the District Judge is given. It was, however, contended by the Advocate General for the State, who is Appellant in all these cases that since the District Judge passed his order enhancing the compensation when the amendment was in force, he should have granted interest not according to law which stood prior to the amendment but according to the amendment itself. In other words, the contention is that the District Judge should have granted interest at the rate of 4% per annum and not at 6% per annum. The Respondents in these cases have contested the argument of the Advocate General on two grounds. In the first place, it was argued before us that as there is nothing to show in the language of the either by way of express enactment or by way of implied intendment that it would be retrospective in character, the amendment must be held to be prospective and would apply only to the proceedings commenced after the or for that matter to the lands which were acquired after the passing of the Amendment.

Secondly, it was contended by the Respondents that the provisions of Section 28 were mandatory and the court had no discretion but a duty to grant interest to the persons whose lands were acquired and, therefore, the Amendment could not have taken away a vested right of these persons unless the was made expressly retrospective in character. We have considered the argument of the learned Counsel for the parties and we are of the opinion that the contention of the learned Counsel for the Respondents must prevail. To begin with, it is well settled that there is no presumption that a law which is passed by the Legislature is retrospective in effect; nor is there any presumption that when a law comes into force, while certain proceedings are pending, it would apply to such proceedings unless the law happens te fall within the ambit of procedural law and changes merely the procedure without touching, existing rights. The Advocate General, however, submitted that in view of the fact that the District Judge had to grant interest only u/s 28 and as .this stage had. not arrived when the amendment came into force, the District Judge should have exercised his discretion u/s 28 in accordance with the law when was in force when he came to give his judgment.

It was further contended by the Advocate General that the amendment in question wag of such a nature that it should have been read in the original statute as if it was written with the same pen and ink. The learned Advocate General relies on the decision of the Supreme Court reported in Shamarao V. Parulekar Vs. The District Magistrate, Thana, Bombay and Others, . We shall take up this contention a little later. The Advocate General further argued that the provisions of Section 28 were purely directory in nature and the court was only given discretion to grant interest and not a duty to do so. It is however manifest that if it is held that the provisions of Section 28 are mandatory and the granting of interest is not a matter of discretion but a question of duty, then undoubtedly the effect of the amendment will be to take away a vested right of the persons whose lands were acquired and the language of the amendment does not justify its being treated to be retrospective in operation. In these circumstances, we would first take up the question as to whether the provisions of Section 28 are mandatory or directory in nature.

A review of the entire authorities on the question shows that there are two sets of authorities on this point. One class of authorities lay down that Section 28 is discretionary but interest must be allowed by the court unless there are special circumstances to negative this relief. The other class of authorities nave not dealt with the question as to whether provisions of Section 28 are mandatory or directory but have laid down that the person whose property is acquired under the, is entitled as a matter of right to the interest mentioned in the Section. Thus these authorities have impliedly though not specifically held that the provisions of Section 28 are mandatory. In Babu Ram Prasad Vs. The Collector of Aligarh and Another, , Khushal Singh and Others Vs. Secy. of State , Behari Lal Bhargava Vs. Commissioner of Income Tax, and Surendra Nath Biswas and Another Vs. The State of Bihar and Another, it has been held that the provisions of Section 28 are discretionary and the court should allow interest in the absence of special circumstances to the contrary. The basic decision which appears to have gone into this question at some length is reported in Behari Lal Bhargava Vs. Commissioner of Income Tax, .

In this case, their Lordships were considering whether interest granted u/s 28 of the Land Acquisition Act would be liable to income tax or would be a capital receipt within the provisions of the Income Tax Act. Their Lordships held that the said amount would not be assessable to Income Tax and one of the reasons that their Lordships gave was that u/s 28 the awarding of interest was not mandatory but discretionary with the court. This decision appears to have been overruled by the Supreme Court in Dr. Shamlal Narula Vs. Commissioner of Income Tax, Punjab, where their Lordships did not accept the reasons given by the Judges of the Allahabad High Court and held that interest was a right given to the person whose property was acquired as a compensation payable by the State for keeping back the amount payable to the owner, and therefore, distinct from compensation that was granted to a person whose property was acquired. In this connection their Lordships, observed as follows:

As we have pointed out, earlier, as soon as the Collector has taken possession of the land either before or after the award the title absolutely vests in the Government and thereafter the owner of the land so acquired ceases to have any title or right of possession to the land acquired. Under the award he gets compensation or both the rights. Therefore, the interest awarded u/s 28 of the, just like u/s 34 thereof, cannot be compensation or damages for the loss of the right to retain possession but only compensation payable by the State for keeping back the amount payable to the owner. Adverting to the said decision a division bench of the Madras High Court in COMMISSIONER OF INCOME TAX, MADRAS Vs. CT. RM. N. NARAYANAN CHETTIAR., , at p. 477: The Commissioner of Income Tax Vs. CT. RM. N. Narayanan Chettiar, at p. 683 observed with great respect we find ourselves unable to follow the reasoning. Certainly we are not prepared to accept the judgment as a guide to the decision in the present case.

But in a case where title passes to the State, the statutory interest provided thereafter can only be regarded either as representing the profit which the owner of the land might have made if he had the use of the money or the loss he suffered because he had not that use. In no sense of the terms can it be described as damages or compensation for the owners right to retain possession for he has no right to retain possession after possession was taken u/s 16 or Section 17 of the.

Apart from this, two decisions reported in Commissioner of Income Tax Vs. Kameshwar Singh, . and The Commissioner of Income Tax Vs. CT. RM. N. Narayanan Chettiar, have dissented from the view taken by the Allahabad High Court in Behari Lal Bhargava Vs. Commissioner of Income Tax, and in fact doubted the correctness of this decision. In view of these circumstances, the authority of the Allahabad High Court appears to us to have been considerably weakened, and we are not prepared to follow the same and for the same reasons Behari Lal Bhargava Vs. Commissioner of Income Tax, cannot be held to be good law.

3. In other cases, namely those reported in Babu Ram Prasad Vs. The Collector of Aligarh and Another, , and Surendra Nath Biswas and Another Vs. The State of Bihar and Another, the question does not appear to have been gone into minutely and there is no exhaustive discussion of the legal import of the word "May" used in Section 28 of the Land Acquisition Act The other set of the authorities lay down that the owner is entitled to the payment of interest and they impliedly hold that the provisions of Section 28 are mandatory. These cases are Secretary of State Vs. Manmatha Nath Dey and Others, and AIR 1925 91 (Privy Council) and AIR 1933 Sind 21. In AIR 1925 91 (Privy Council) , it may be noticed, that In the case before their Lordships, since the lower Court had not granted interest to the owner, their Lordships characterized this as an important omission in the judgment and, therefore, impliedly held that the owner had a right to receive interest because Section 28 was mandatory and not discretionary. In this connection, their Lordships observed as follows:

A small matter of judgment was the omission of the right to interest to which the Appellant is entitled at the rate of 6 per cent as from the 7th July 1917, when the land was acquired.

In other case of the Madras High Court, reported in AIR 1926 Mad 1016 , their Lordships clearly observed that the question was not tree from difficulty but left the question as to whether the provisions of Section 28 of the said Act were directory or mandatory open. This is the state of the authorities that have been cited before us on the point.

4. In order to appreciate the true import of the provisions of Section 28, it will be necessary to analyze the scheme and the object of the itself. A perusal of the provisions of the Land Acquisition Act would show that after the necessary notifications Under Sections 5 and 6 have been issued by the Collector, notice to interested persons is given Under Sections 7 and 9 respectively. Section 10 empowers the Collector to call for statement from interested persons. Section 11 empowers the Collector to hold an enquiry into the objections filed by the persons interested regarding various matters. Section 12 then empowers the Collector to give an Award which is made final and conclusive subject, however, to the reference u/s 18 of the. Section 15 lays down that the Collector for determining the amount of compensation shall be guided by the provisions of Sections 23 and 24 of the Act, which lay down various standards which have to be considered and which have to be neglected in determining compensation.

It may be noticed that both the Court mentioned in Section 18 for the purpose of reference and the Collector have to take into consideration the very same factors and standards in order to determine the compensation. Thus it would appear that the power of the Collector and that of the Court to whom the reference is to be made u/s 18 are the same regarding the fixing of compensation. u/s 26 the award is to be given by the Judge which has the force of a decree. Section 35 lays down that where the amount of compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest at the rate of 6% per annum from the date of possession until the date of payment. It would be seen, therefore, that the language of Section 35 is clearly mandatory in nature and imposes a duty on the Collector to pay interest on the amount which has been detained by him (the Collector). Furthermore, Sub-clause 2 of Section 23 enjoins on the Court that sum of 15% as solatium (Jabrana) should be paid on the market value of the compensation awarded. Section 28 runs thus:

If the sum, which in the opinion of the Court the Collector ought to have awarded as compensation, is in excess of the sum, which the Collector did award as compensation the award of the Court may direct that the Collector shall pay interest on such excess at the rate of six per centum per annum from the date on which he took possession of the land to the date of payment of such excess into Court.

4-A. An analysis of the provisions of Section 28 quoted above would clearly show that the context in which the word "may" has been used shows that it is coupled with an obligation and must, therefore, be construed to have a mandatory force. Again the very fact, that the District Judge has to grant interest at a particular rate namely 6% and no more and no less, clearly shows that the Legislature intended to make it compulsory on the Court to grant interest at a particular rate and particular rate alone. Indeed, if the intention of the Legislature was that the power given to the Court u/s 28 was purely discretionary, then he would have been also given a discretion to give such interest as he thought proper. This circumstance taken along with other circumstances to be mentioned hereafter, shows that the word "May" appearing in Section 28 has a mandatory force.

5. Furthermore, the words following "may direct" and "the Collector shall pay interest" clearly show that the Legislature intended that the provisions of Section 28 were to be of a mandatory nature and the Section, therefore, conferred a statutory right on the owner of the property to receive interest at the rate mentioned in Section 28. Before going further we may state the well settled principles of interpretation of Statutes. It is well settled that the use of the word "May" in a statutory provision would not by itself show that the provision is directory in nature. In some cases the Legislature may use the word "May" as a matter of pure conventional courtesy and yet intend a mandatory force. In order, therefore, to interpret the legal import of the word "May" we have to consider various factors namely, the object and the scheme of the, the context and the background against which the words have been used, the purpose and the advantages sought to be achieved by the use of this word and the like.

It is equally well settled that where the word "May" involves a discretion coupled with are obligation or where it confers a positive benefit to a general class of subjects in a Utility Act, or where the Court advances a remedy and suppresses the mischief or where giving the word a directory significance would defeat the very object of the, the word "May" should be interpreted to convey a mandatory force. In State of Uttar Pradesh Vs. Jogendra Singh, , their Lordships of the Supreme Court clearly held that where the word "May" indicated, a discretion coupled with an obligation, it should be given a mandatory force. In this connection, their Lordships of the Supreme Court, observed, as follows :

The question for our decision is whether like the word "may" in Rule 4(1) which confers the discretion on the Governor, the word "may" in Sub-rule (2) confers the discretion on him or does the word "may" in Sub-rule (2) really mean "shall" or "must" There is no doubt that the word "may" generally does not mean "must" or "shall". But it is well settled that the word "may" is capable of meaning "must" or "shall" in the light of the context. It is also clear that where a discretion is conferred upon a public authority coupled with an obligation, the word "may" which denotes discretion should be construed to mean a command.

To the same effect is an earlier decision of the Supreme Court reported in State of U.P. Vs. Manbodhan Lal Srivastava, . In AIR 1940 Lab. 266, it was observed as follows :

The question whether mandatory enactments ought to be construed to be directory only or obligatory, depends upon the general scope and object of the Statute to be construed and these are the guides upon "which a court can decide whether the provisions are directory or imperative. It is thus that the intention of the Legislature can be determined. The use of the word "shall" does not necessarily imply that a particular provision is imperative. In (1877) 2 CPD 562 at p. 566, also reported in 46 LJCP 541 at p.i543, Lord Campbell Lord Chancellor, remarked that the distinction between statutes creating public duties and those conferring private rights is that in general the provisions of the former are directory and of the latter imperative and that in the absence of an express provision the intention of the Legislature is to be ascertained by weighing the consequences of holding a statute to be directory or imperative.

Again in Kanwar Singh Vs. Delhi Administration, , their Lordships observed as follows:

It is the duty of the court in construing a statute to give effect to the intention of the Legislature. If therefore, giving a literal meaning to a word used by the draftsman particularly in a penal statute would defeat the object of the Legislature which is to suppress a mischief the court can depart from the dictionary meaning or even the popular meaning of the word and instead give it a meaning winch will "advance the remedy and suppress the mischief.

In the instant case, an analysis of the scheme of the Land Acquisition Act, clearly shows that the Legislature intended to confer three-fold benefit to the owner whose properties were acquired under this Act. .

(i) Payment of compensation for the property acquired according to the market value as set forth in Section 23(1) of the.

(ii) The payment of solatium (Jabrana) asi set forth in Section 23(2).

(iii) The payment of interest for the detention of the compensation with the Collector as stipulated in Section 35 of the.

6. It would thus appear that the has made a marked distinction between these three different kinds of rights which are given to the owner and which are clearly incorporated in the Statute. It may further be noticed that Section 35, makes it incumbent on the Collector to pay interest at a particular rate on the amount of compensation which is kept back with him. It is also clear that the Legislature has not made the award of the Collector absolutely final but it is subject to a right of review by way of reference to the Court. We have already indicated above, that the court to whom the case is referred while determining the compensation awarded by the Collector has to consider the very facts namely the standards mentioned in Sections 28 and 24 of the Act, which the Collector has to keep in mind in determining the compensation.

Thus the Legislature gives equal powers both to the Collector and the court in respect of granting of compensation. Furthermore, the award of the Collector is open to review by the court on a reference being made to it both on questions of fuel and law. In those circumstances, therefore, it is unreasonable to infer that the court would not possess the same powers and the same obligations for awarding interest to the owner as the Collector. To accept the argument of the Advocate General and also of the authorities following the Allahabad view, would amount to saying that whereas the Collector who otherwise exercises the same powers as the court in granting compensation and whose award is subject to review by the District Judge has been enjoined to grant interest yet the court which is a higher authority than him, has been merely left with a discretion to award interest. In other words, the right given to the owner by Section 28 is curtailed to some extent. This, in our opinion, would introduce an element of inconsistency and such an interpretation would defeat the very object of the and cannot be justified either on principle or on law.

The object of the in imposing a duty on the Collector to pay interest is based on the correctness of his award and if his award is found to be incorrect on a point of fact or on a point of law, by the court, to whom reference is made, how could the Legislature have intended that the court when correcting the award of the collector should not have the duty but only a discretion to award interest on that part of the award which is found to be incorrect and therefore modified. Indeed, if this is so, the position would be that while the grants a statutory right to the owner to approach the court by way of a reference in order to challenge the correctness of the award, his right is curtailed by giving the court merely a discretion to award Interest when the Collector performing identical functions has been enjoined as a matter of duty to pay interest on the compensation. Thus if the word "may" is interpreted to have a directory force only it would lead to a most anomalous result which is never intended by the Legislature in framing Acts of this nature.

Furthermore, the right to interest on the amount of compensation which is kept back by the Collector is an inherent common law right of an owner and has been clearly recognized by Section 35 of theitself and, therefore, the Legislature could not have intended that this right should be curtailed by the court by conferring on him only a discretion to grant interest. In these circumstances therefore, we are clearly of the opinion that the word "may" used in Section 28 does not invest a mere discretion in the court but imposes a duty on it to pay interest at the rate mentioned in the Section and must, therefore, be held to have a mandatory force.

7. In this view of the matter, it is manifest that u/s 28 as it stood before the amendment the owner had a vested right to receive interest from the court at the rate of 6% per annum on the excess of the sum awarded by the Collector as found by the court. Such a vested right could not be taken away, curtailed, or impaired by the amendment unless there were strong words in the amendment to indicate that it was to apply retrospectively. A perusal of the amendment, as already indicated above does not show that it is intended to operate retrospectively so as to apply to pending proceedings before the Amendment came into force and thus interfere with the existing rights of the owner. We might further indicate that in Dr. Shamlal Narula Vs. Commissioner of Income Tax, Punjab, , referred to above, their Lordships of the Supreme Court, clearly held that the right to receive interest was a statutory right conferred by the Land Acquisition Act and their Lordships have equated Section 28 and Section 35 (Section 34 of the Indian Act) although in Section 28 the word is "may" and in Section 35 the word is "shall". Thus their Lordships have impliedly held that the provisions of Section 28 are also as mandatory as Section 35 (34 of the Indian Act). Apart from these facts, it would appear that the Supreme Court had an occasion to discuss the nature of the right of the owner to receive interest on compensation awarded to him when the amount of compensation is kept back. In Satinder Singh and Others Vs. Amrao Singh and Others, it appears that the property of the owner was acquired under the Land Acquisition Act but, while the proceedings were pending, the was amended by the East Punjab Requisition of Immovable Property (Temporary Powers) Act which while applying Section 23 of the Land Acquisition Act, did not in terms apply Section 28 of thewhich, entitled the owner to receive interest on the amount of compensation paid by the Collector. The High Court refused to grant interest to the owner on the ground that the Amending Act did not confer the power to grant interest inasmuch as Section 28 was not applied.

Their Lordships of the Supreme Court did not agree with the view taken by the Punjab High Court and held that the owner was entitled to interest as a matter of right and Section 28 must be deemed to have been incorporated in the new Act, if the had applied the provisions of Section 23 of the Land Acquisition Act. In this connection, their Lordships of the Supreme Court held as follows:

That takes us to the question of interest which has been urged before us by all the three claimants alike. The argument is that the amount of compensation should carry a reasonable rate of interest from the date of acquisition when the claimants lost possession of their properties. This argument has been rejected by the High Court principally on the ground that the relevant Act of 1948 makes no provision for payment of interest and omission to make such a provision amounts in law to an intention not to award interest in regard to the compensation amount determined under it. In support of this conclusion the High Court has referred to the fact that Section 5(e) of thespecifically makes applicable the provisions of Section 23(1) of the Land Acquisition Act of 1894, and that it is said, inevitably leads to the inference that Sections 28 and 34 of thewhich deal with the payment of interest are not intended to apply to the proceedings under it. In our opinion, this conclusion is not well founded. It would be legitimate to hold that by the application of Section 23(1) in terms the provisions of Section 23(2) are by necessary implication excluded. If the Legislature has provided that only one part of Section 23 should be applied it would be reasonable to hold that the other part of Section 23 was not intended to be applied; but we do not see how it would be reasonable to hold that by the application of Section 23(1) the principles underlying the provisions of Sections 28 and 34 are also excluded.

Stated broadly the act of taking possession of immovable property generally implies an agreement to pay interest on the value of the property and it is on this principle that a claim for interest is made against the State. This question has been considered on several occasions and the general principle on which contention is raised by the claimants has been upheld. In Swift and Co. v. Board of Trade, (1925) AC 520, at p. 532, It has been held by the House of Lords that:

On a contract for the sale and purchase of land it is the practice of the Court of Chancery to require the purchaser to pay interest on its purchase money from the date when he took or might safely have taken, possession of the land.

This prinoiple has been recognized ever since the decision in Birch v. joy, (1852) 8 HLC 585. In his speech Viscount Cave L.C. added that:

This practice rests upon the view that the act of taking possession JS an implied agreement to pay interest.

and he points out that the said rule has been extended to cases of compulsory purchase under the Lands Clauses Consolidation Act, 1845.

It would thus be noticed that the claim for interest proceeds on the assumption that when the owner of immovable property loses possession of it he is entitled to claim interest to place or right to retain possession. The question which we have, to consider is whether the application of this rule is intended to be excluded by the of 1948 and as we have already observed, the mere fact that Section 5(3) of themakes Section 23(1) of the Land Acquisition Act of 1894, applicable, we cannot reasonably infer that the intends to exclude the application of this general rule in the matter of the payment of interest. That is the view which the Punjab High Court has taken in Surjan Singh Vs. The East Punjab Government, , and we think rightly.

We must accordingly hold that the High Court was in error in rejecting the claimants case for the payment of interest on compensation amount, and so we direct that the said amount should carry interest at 4% per annum from the date when Respondent 2 took possession of the claimants lands to the date on which it deposited or paid the amount of compensation to them."

Furthermore in that case, their Lordships while affirming the decision reported in AIR 1957 Punj 209(FB), clearly held that the compensation would have to be granted in accordance with the that was, in force when the land was acquired, namely the Land Acquisition Act, and not the new Punjab Act In this connection, their Lordships observed as follows:

It has been held by a Full Bench of the Punjab High Court in Harindar Singh Vs. The State of Punjab, that compensation for property acquired under the Land Acquisition Act, 1894 or under the Punjab Act of 1948 must be paid in accordance with the principles set out in those Acts and not in accordance with the principles set out in the later Act of 1953. This position is not disputed by either party in the present proceedings....

In Harindar Singh Vs. The State of Punjab, , a Full Bench of that Court clearly held that a right to compensation for property actually taken for public use is clearly a vested right and this right accrues when the property is acquired by the State. In this connection, their Lordships observed as follows:

This is particularly so when a statute impairs vested rights or the legality of past transactions or the obligations of contract. Such rights cannot be taken away by implication. In order to, take, away the right, observed Lord Watson in Western Counties Rly Co. v. Windsor and Annapolis Rlv Co., (1882) 7 AC 178, at p. 189, it is not sufficient to show that the thing sanctioned by the, if done will of sheer physical necessity put an end to the right, it must also be shown that the Legislature have authorized the thing to be done at all events and irrespective of its possible interference with existing rights ....

It is well known that a right to continue a duty instituted suit is a vested right that it cannot be taken away except by a clear indication to that effect, AIR 1943 24 (Federal Court) at p. 27 and that where a statute is passed while an action is pending strong words are necessary to alter the vested rights of any litigant as they stood at the time oft the commencement of the action, AIR 1952 P&H 103 (FB) at p. 105 It is equally clear that when the law is altered during the pendency of an action the rights of the parties are decided according to the law as it existed when the action was begun, unless the new statute shows a clear intention to vary such rights (Maxwell on Interpretation of Statutes p. 221). The, Court is not to see whether there is an express. provision permitting the continuance or pending proceedings but whether there is any clear indication against the continuance of pending proceedings to their normal termination AIR 1943 24 (Federal Court) at p. 27.

8. Their Lordships in coming to this conclusion relied upon several authorities of the Privy Council and the Federal Court.

9. To the same effect is an earlier decision of the Punjab High Court reported in AIR 1952, P&H 103(FB).

10. In view of our finding that Section 28 is mandatory and confers a statutory right on the owner of the property to receive interest on the amount of compensation kept back by the collector, it follows that this right accrues the moment when the Collector has taken possession of the property and has made the award. In the instant case, both the award was made and the lands were acquired before the passing of the Amending Act. In these circumstances, therefore the Amending Act would not apply to the present proceedings. We are further fortified in our view by a decision of the Privy Council which appears to be directly in point.

In AIR 1928 PC 128 , where the facts were that a piece of land was acquired by the Municipal Council of Sydney in June 1924 and on that date the rate of interest payable under the law was 4% . On 17-9-1964, the law was amended and the rate was enhanced to 6% and the law was declared to be applicable to compensation for lands acquired by the Municipal Council. Their Lordships held that the rate had to be granted in accordance with the law which was in force when the land was acquired and observed as follows:

The learned judges of the Supreme Court of New South Wales agreed in rejecting this contention and held that the Respondent was entitled to succeed. The main ground for their reasoning turned on the ambit and scope of Section 17.

"It cannot be contended, said the Chief Justice, and it is not contended that it is retrospective in its operation so as to affect the rate at which interest was payable before it came into operation but the question is whether the direction that interest thereafter is to be at the rate of 6 per cent per annum applies only to subsequent acquisition of land, or applies as well to prior acquisition of land, the compensation for which was still unpaid when it came into force. The words used are perfectly general-What is spoken of is the rate or interest payable on compensation for land acquired by the Council. No distinction is made between land acquired before the and that acquired after and to give effect to the contention of the Municipal Council it would be necessary to substitute for the wide and general word "acquired" some such word as to be acquired" or "hereafter acquired." I can find nothing in the section to Justify the imposition of any such limitation and there is no rule or presumption which requires that the word should be so limited in its meaning.

The learned Chief Justice goes on to say that it is plain that the purpose of the section was to bring up the rate of interest from one which was too low to 6 per cent, the lower rate being inadequate to the ruling rate of interest. Their Lordships find themselves in full agreement with the conclusion thus expressed.

On 6th June 1924, the entire title to the piece, of land hi question was acquired by and became vested in the Appellants who became then betided to compensation. On 17th September 1924, the new standard rate of interest was declared to be applicable to the compensation for all land acquired. Their Lordships think that these words are unambiguous. They give a title to the higher rate of interest as from 17th September and apply subsequently to the passing of the which contains this fresh provision to compensation for land acquired prior thereto, not with standing that the was assented to later. Accordingly between 6th June and 17th September the rate will remain 4 per cent and after that is 6 per cent.

There is another recent decision of the Punjab High Court reported in AIR 1966, Punj 230, which also supports the view that the amendment would not apply to proceedings pending at the time when the amendment came into force. In this case Falshaw C.J. observed as follows:

The acquisition proceedings took place and the reference is made to the Court of the District Judge u/s 18 of the Land Acquisition Act as applied to Pepsu and was to: be decided in accordance with those provisions. The mere fact that enhancement of compensation was made until some years later by a learned Judge of this Court appears to me to be wholly immaterial. Under the terms of Section 28, the right to interest on any enhanced compensation clearly dates back to the date on which the Collector took possession of the land and in my opinion the rate of interest must be in accordance with the law in force at that time.

Lastly it was contended by the learned Advocate General on basis of Shamarao V. Parulekar Vs. The District Magistrate, Thana, Bombay and Others, that the words in the amendment should be read in the original statute the moment the amendment is passed. There is no quarrel with the proposition enunciated by the Supreme Court in the aforesaid case. In the present case, however, this doctrine does not apply in view of our clear finding that if the amendment is held to be of a retrospective nature, it curtails the vested right of the owner to receive interest on the compensation awarded to him at a higher rate, according to the which was in force when the proceedings were started. Moreover, the facts of the case before the Supreme Court are clearly distinguishable from the facts of the present case because the grant of interest is not a matter of form but one of substance.

11. On a consideration of the authorities mentioned above, we are clearly of the opinion that the provisions of Section 28 of the Land Acquisition Act are mandatory, and we accordingly record our respectful dissent with the authorities taking a contrary view. We hold therefore the Amendment does not apply to proceedings which were pending before coming into force of the; nor would it apply to the lands which had been acquired before the Amendment was passed.

12. For these reasons, therefore, we would answer the question of law, referred to us in the affirmative and hold that the amendment in Section 28 by virtue of Act No. XXXIV of 1960 is prospective in character and would not apply to the proceedings out of which the cases before us arise, and that the rate of interest to be awarded in the cases should be at the rate of six percent per annum that is to say in accordance with the provisions of Section 28, as it stood before the amendment.

The cases will now go back to the Division Bench for hearing in accordance with law.

Wazir, C.J.

13. I agree.

Bhat, J.

14. I agree.