Full Judgment Text
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PETITIONER:
YADAVRAO P. PATHADE (DEAD) BY LRS. ETC.
Vs.
RESPONDENT:
STATE OF MAHARASHTRA
DATE OF JUDGMENT: 25/01/1996
BENCH:
K. RAMASWAMY, S. SAGHIR AHMED, G.B. PATTANAIK
ACT:
HEADNOTE:
JUDGMENT:
WITH
CIVIL APPEAL NOS.2873-75,2876-2911,2913 2912 &2914/96
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(Arising out of SLP (C) Nos.15861-63, 15865-99, 16381,
18455 of 1993 and SLP (C) No.3747 /96 [CC-22430])
O R D E R
Leave granted.
The only question is: whether the appellants are
entitled to payment of interest on solatium payable
under Section 23(2) of the Land Acquisition Act (Act 1
of 1894) (for short, ’the Act’). The additional amount
was awarded by the reference Court on December 15, 1979
enhancing the compensation. The High Court by its
judgment dated 4.12.1995 has further enhanced the
compensation to Rs.42,056-15. The appellants claimed
interest on solatium of Rs,6308-42 which was disallowed
by the High Court. The interest on solatium was
calculated from 1.1.1967 to 31.12.1971. The appellants
placed reliance on a judgment of this Court in Periyar
and Pareekanni Rubbers Ltd. vs. State of Kerala (AIR
1990 SC 2192) contending that interest on solatium is a
part of the component under Section 23(1) of the Act
and that, therefore, they are entitled to payment of
the interest. The High Court, therefore, was not right
in refusing interest on solatium. To appreciate the
contention it is necessary to look to the provisions of
the Act.
Section 28 gives power to the Court to award
interest when the Court enhances the compensation in
excess of amount awarded by the Collector at the rate
specified therein, namely, preceding the Amendment Act
68 of 1984, at 6% per annum under the Central Act or at
the rates as per the appropriate Act amended by the
local amendments to the Act. After the Amendment Act
coming into force w.e.f. September 24, 1984 the
claimants would be entitled to interest at 9% p.a. for
one year from the date of taking possession and on
expiry thereof, at 15% p.a. till the date of the
deposit into the Court.
Section 23(1) envisages that in determination of
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compensation to be awarded for the land acquired under
the Act, the Court shall take into consideration the
respective criteria laid in Clauses (1) to (6)
applicable to the given facts of the case. Therefore,
the Court is empowered under Section 23(1) to determine
compensation to be awarded to the claimant.
Section 23(2) provides that "in addition" to the
market value of the land as above provided, the Court
shall in every case award a sum at 15% preceding the
Amendment Act and after the Amendment Act, 30% p.a. on
such market value in consideration of the compulsory
nature of the acquisition. The legislature, therefore,
made a distinction between compensation under Section
23(1) and the additional amount on such market value as
solatium in consideration of compulsory nature of
acquisition. In other words, Section 28 does not
comprehend payment of interest on solatium when it
expressly mentions payment of interest on compensation
under Section 28 referable to Section 23(1) of the Act.
Thus the High Court was right in not awarding interest
on solatium. Similar view was taken by this Court after
Periar’s case (supra) by a three-Judge Bench in Prem
Nath Kapur & Anr. etc. v. National Fertilizers
Corporation of India Ltd. & Ors. (C.A.11398/95 etc.)
decided on November 29, 1995.
It is true that in Periyar’s case this Court had
held that interest on solatium is part of the component
under Section 23(1). Unfortunately, neither the
provisions were considered nor the distinction of the
above provisions had been brought to the notice of this
Court at that time. Therefore, mistaken view was taken
to hold that interest on solatium is part of the
component of compensation under Section 23(1) of the
Act. It is needless to mention that under Section 28
the claimants will be entitled to the interest on
enhanced compensation from the date of the award of the
Court under Section 26 and on appeal under Section 54
on the respective compensation, if enhanced, till date
of deposit in the Court. Therefore, the State is
required to deposit the balance of interest on the
enhanced compensation till date of deposit into the
Court.
The appeals are accordingly disposed of but, in
the circumstances, without costs..