Full Judgment Text
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CASE NO.:
Appeal (civil) 5785 of 2006
PETITIONER:
Patel Joitaram Kalidas & Ors. \005.Appellants
RESPONDENT:
Spl. Land Acquisition Officer & Anr. .\005Respondents
DATE OF JUDGMENT: 13/12/2006
BENCH:
B.P. Singh & Altamas Kabir
JUDGMENT:
J U D G M E N T
(Arising out of SLP) No.11062-135 OF 2002)
WITH
C.A Nos. 5786 /06 @ SLP(C) Nos.11136-11192 of 2002,
C.A Nos. 5787 /06 @ SLP(C) Nos.11194-11205 of 2002,
C.A Nos. 5788 /06 @ SLP(C) Nos.11206-11225 of 2002,
C.A Nos. 5789 /06 @ SLP(C) Nos.11227-11237 of 2002,
C.A Nos. 5790 /06 @ SLP(C) Nos.11238-11247 of 2002,
C.A Nos. 5791 /06 @ SLP(C) Nos.11248-11260 of 2002,
C.A Nos. 5792 /06 @ SLP(C) Nos.11262-11270 of 2002,
C.A Nos. 5793 /06 @ SLP(C) Nos.11273- 11279 of 2002,
C.A Nos. 5794 /06 @ SLP(C) Nos.11280-11289 of 2002,
C.A Nos. 5795 /06 @ SLP(C) Nos.11291-11299 of 2002,
C.A Nos. 5796 /06 @ SLP(C) Nos.11310-11314 of 2002,
C.A Nos. 5797 /06 @ SLP(C) Nos.11401-11440 of 2002,
C.A Nos. 5798 /06 @ SLP(C) Nos.11369-11387 of 2002,
C.A Nos. 5799 /06 @ SLP(C) Nos.11315-11336 of 2002,
C.A Nos. 5800 /06 @ SLP(C) Nos.11389-11400 of 2002,
C.A Nos. 5801 /06 @ SLP(C) Nos.11358-11368 of 2002,
C.A Nos. 5802 /06 @ SLP(C) Nos.11301-11309 of 2002,
C.A Nos. 5803 /06 @ SLP(C) Nos.11441-11451 of 2002,
C.A Nos. 5804 /06 @ SLP(C) Nos.11338-11355 of 2002,
C.A Nos. 5805 /06 @ SLP(C) Nos.11356-11357 of 2002.
B.P. SINGH, J.
Permission to file SLP granted.
Special Leave granted.
In this batch of appeals the sole question which falls for
consideration is whether the appellants herein are entitled to maintain
an application for special leave before this Court impugning the
judgment and order of the High Court which affirmed the findings of
the Reference Court under Section 18 of the Land Acquisition Act in
appeals preferred by the Special Land Acquisition Officer the
respondent herein. The appellants contend that the High Court ought
to have, even in the appeals preferred by the Special Land Acquisition
Officer, awarded interest on solatium payable under Section 23 (2) of
the Land Acquisition Act. The respondent on the other hand,
contends that the appeals had been preferred before the High Court by
the Special Land Acquisition Officer in which the appellants herein
were the respondents. The appeals preferred by the Special Land
Acquisition Officer having been dismissed by the High Court, the
appellants cannot be said to be parties aggrieved by the judgment and
order of the High Court. Before the High Court they had not even
prayed for grant of interest on solatium and, therefore, they cannot be
permitted to move this Court by way of special leave claiming such
relief. It is not disputed by them that if really such a claim was made
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either before the Collector or before the Reference Court dealing with
the matter under Section 18 of the Land Acquisition Act, having
regard to the law as now settled by a decision of this Court, interest on
solatium was bound to be granted to the appellants.
The few facts which are relevant for the disposal of these
appeals are as follows:-
Five Notifications under Section 4 of the Land Acquisition Act,
1894 (hereinafter referred to as the "Act) was published for
acquisition of lands situated in Village Vekara District Mehsana,
Gujarat. The appellants are the land-owners of the lands sought to be
acquired by the aforesaid Notifications. The Special Land Acquisition
Officer offered compensation @ Rs.24,000/- per hec. (Rs.2.40 per sq.
mtr.) for irrigated lands and Rs.16,000 per. hec. (Rs.1.60 per sq. mtr.)
for non-irrigated lands. The appellants claimed a reference under
Section 18 of the Act and demanded compensation @ Rs.30 per sq.
mtr.. By its judgment and order of April 20, 2000 the Reference
Court under Section 18 of the Land Acquisition Act determined the
market value of the lands of the appellants @ Rs.22 per sq. mtr..
However, it did not award interest on the amounts payable under
Section 23 (1A) and Section 23(2) of the Land Acquisition Act,
namely, on the amount payable by way of additional amount and
solatium. The Reference Court following the judgment of this Court
in Prem Nath Kapoor & Anr. Vs. National Fertilizers Corporation of
India Ltd. & Ors. (1996) 2 SCC 71 held that no interest was payable
in respect of amounts envisaged by Section 23 (1A) and 23 (2) of the
Act.
Aggrieved by the judgment and order of the Reference Court
enhancing the compensation payable to the appellants, the Special
Land Acquisition Officer preferred First Appeal Nos.1320 to 1395 of
2001 before the High Court of Gujarat at Ahmedabad which came to
be disposed of by the judgment and order of the High Court dated
September 19, 2001. The High Court found no reason to interfere
with the determination of compensation by the Reference Court and
accordingly dismissed the appeals.
The instant special leave petitions have been filed by the
claimants contending that the High Court ought to have awarded
interest on the amounts payable under Section 23(1A) and 23(2) of the
Act. It is their case that the interest payable on these amounts must be
incorporated in the decree of the Court even if no prayer is made for it
because the Act obliges the Collector to pay such interest on the
amount determined by the Collector or the Court. For awarding such
interest no exercise of judicial discretion is called for. Only an
arithmetical exercise has to be undertaken to calculate the interest
payable. They, therefore, submit that the High Court ought to have
passed an order awarding interest to the appellants on the amounts
payable under Section 23 (1A) and 23 (2) of the Act even if no formal
claim was made before it by the claimant.
To appreciate the submission of the appellants it is necessary to
notice a few other facts.
The question as to whether interest is payable on the additional
amount payable under Section 23 (1A) and on solatium under Section
23 (2) of the Act came up for consideration before this Court in Union
of India Vs. Shri Ram Mehar and Ors. (1973) 1 SCC 109. This Court
held that "market value" is only one of the components to be reckoned
with in the determination of the amount of compensation. Solatium
did not form part of the "market value" of the land. Thus the word
"compensation" in Section 23 (1) of the Act consists of the "market
value" of the land and the solatium which is the consideration for the
compulsory nature of the acquisition. Following the principle laid
down in Ram Mehar, a two Judge Bench of this Court in Periyar and
Pareekanni Rubbers Ltd. Vs. State of Kerala (1991) 4 SCC 195
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affirmed the view that the claimant is entitled to interest on solatium
under the Act.
However, in Mir Fazeelath Hussain and Ors. Vs. Special
Deputy Collector, Land Acquisition, Hyderabad (1995) 3 SCC 208, a
three Judge Bench of this Court held that solatium is not a part of the
award and hence interest is not claimable thereon. The same view
was reiterated in Prem Nath Kapoor (supra) and later in Yadavrao P.
Pathade (D) by Lrs.& Ors. Vs. State of Maharashtra (1996) 2 SCC
570 the same was reiterated by a three Judge Bench of this Court.
On account of the conflict of decisions of this Court of co-equal
benches the matter was ultimately referred to a larger bench of five
Judges and the matter has since been settled by a decision of this
Court rendered by a Bench consisting of five Judges in Sunder Vs.
Union of India (2001) 7 SCC 211. The judgment of the Supreme
Court was delivered on September 19, 2001.
It is a co-incidence that the impugned common judgment of the
High Court in the instant case was also pronounced on September 19,
2001, the same day on which judgment of the larger Bench of the
Supreme Court in Sunder’s case was pronounced holding that interest
was payable on the amount envisaged by Section 23 (1A) as well as
23 (2) of the Act.
Counsel for the respondents contend that there is no reason why
the appellants should be permitted to make a claim before this Court
which they had not made before the High Court. Their claim for grant
of interest on these amounts was negatived by the Reference Court
relying upon the earlier judgment of this Court in Prem Nath
Kapoor’s case. The appellants did not appeal against that part of the
order of the Reference Court and, therefore, they have given up their
right to claim interest on the additional amount and the solatium
payable under Section 23 of the Act.
The appellants on the other hand, contend that at the time when
the reference under Section 18 was decided by the Court, the
judgment in Prem Nath Kapoor held the field and, therefore, in the
teeth of that judgment of the Supreme Court it was not considered
advisable to appeal against that part of the order. Even so, they could
have made such a claim before the High Court when the appeal
preferred by the Special Land Acquisition Officer was being heard by
it. Unfortunately, even till then the judgment of the Supreme Court in
Sunder’s case had not been pronounced. It is only accidental that the
impugned common judgment and order of the High Court and the
judgment in Sunder’s case were pronounced on the same day and,
therefore, it was only after the disposal of the appeals by the High
Court that the appellants could, on the strength of the decision in
Sunder’s case, claim interest on these amounts. It is for this reason
that they have invoked the special jurisdiction of this Court under
Article 136 of the Constitution of India.
The appellants heavily relied on the observations made in Shree
Vijay Cotton & Oil Mills Ltd. Vs. State of Gujarat (1991) 1 SCC 262.
That was a case where Government took possession of certain lands
under an arrangement with the owners on November 19, 1949. It
raised structure on the aforesaid land but did not give land in
exchange to the owners thereof. On February 1, 1955 a Notification
under Section 6 (1) of the Act was issued declaring that the land was
needed for public purpose. The Collector awarded Rs.5075.44 as
compensation. The land-owner asked for a reference under Section
18 of the Act. The Court decided the reference under Section 18 and
found that the claimant was entitled to compensation on the basis of
market value of the land on the date of Notification under Section 6 of
the Act. It accordingly awarded compensation @ Rs.3 per sq. yard
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as also solatium @ 15 per cent and interest @ 6 per cent from
February 1, 1955. The award of the Court was challenged by the
State which preferred an appeal before the High Court. The High
Court held that the relevant date for determining the compensation
based on determining the market value of the land was the date of the
Notification under Section 4 (1) of the Act and since no such
Notification was issued it was not possible to determine the amount of
compensation payable under the Act. The claimants came to this
Court after obtaining certificate from the High Court and finally this
Court allowed the appeal and remanded the matter to the High Court
holding that the Notification under Section 6 of the Act be treated as a
composite Notification under Section 4(1) and Section 6 (1) of the Act
and, therefore, the Court could lawfully award the market value of the
land on that day. The High Court thereafter accepted the appeal
preferred by the State and reduced the price of acquired land from
Rs.3 per sq. yard to Rs.1.35 per sq. yard, however rejecting the claim
of the claimant to interest from November 19, 1949 instead of
February 1, 1955. The claimants therefore, preferred an appeal in
which the aforesaid judgment was rendered.
This Court noticed that the State had filed an appeal before the
High Court against the award of compensation @ Rs.3 per sq. yard
but the appellant/claimant did not file any appeal against that part of
the award which went against it and restricted the amount of interest
from February 1, 1955 instead of November 19, 1949. The appellant
filed cross objections but they were dismissed as barred by time. The
High Court on interpretation of Section 23(1), 26, 27 and 28
concluded that the interest payable to the claimants has to be a part of
the award \026 decree alongwith the compensation amount and as such is
subject to rules of procedure and limitation. Thus, the cross
objections of the claimants having been rejected as time barred, it
could not claim interest in appeal preferred by State. The High Court
also found that the relief was barred by reason of the principle of res-
judicata.
After noticing the findings of the High Court this Court held
that on a reference under Section 18 of the Act the parties go to trial
primarily for the determination of market value of the land. So far as
award of interest is concerned, it is never an issue between the parties.
Once, the conditions under Section 28 or Section 34 of the Act are
satisfied the award of interest is consequential and automatic. This
Court went on to observe:-
"The High Court while appreciating the point in issue
did not consider the mandatory provisions of Section
34 of the Act. The said section specifically provides
that when the amount of compensation is not paid on
or before taking possession of the land the Collector
shall pay interest at 6 per cent per annum from the
date of taking over possession. The payment of
interest is not dependent on any claim by the person
whose land has been acquired. There can be no
controversy or any lis between the parties regarding
payment of interest. When once the provision of
Section 34 are attracted it is obligatory for the
Collector to pay the interest. If he fails to do so the
same can be claimed from the court in proceedings
under Section 18 of the Act or even from the appellate
court/courts thereafter".
This Court also observed:-
"There is inherent evidence in the wording of Sections
28 and 34 to show that the framers of the Act intended to
assure the payment of interest to the person whose land
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was acquired and it was not the intention to subject the
said payment to procedural hazards. Section 34 lays
down that "the Collector shall pay the amount awarded
with interest at 6 per cent per annum\005.." The legislative
mandate is clear. It is a directive to the collector to pay
the interest in a given circumstance. Section 34 nowhere
says that the interest amount is to be included in the
award-decree as prepared under Section 23(1) read with
Section 26 of the Act. Similarly Section 28 provides "the
award of the court may direct that the Collector shall pay
interest". Here also the award under Section 23(1) read
with Section 26 has been kept distinct from the payment
of interest under the section. The interest to be paid
under Section 34 and also under Section 28 is of different
character than the compensation amount under Section
23(1) of the Act. Whereas the interest, if payable under
the Act, can be claimed at any stage of the proceedings
under the Act, the amount of compensation under Section
23(1) which is an award-decree under Section 26, is
subject to the rules of Procedure and Limitation. The
rules of procedure are hand-maiden of justice. The
procedural hassle cannot come in the way of substantive
rights of citizens under the Act.
We do not, therefore, agree with the reasoning and
the findings reached by the High Court. We are of the
opinion that it was not necessary for the appellant-
claimant to have filed separate appeal/cross-objections
before the High Court for the purposes of claiming
interest under Section 28 or Section 34 of the Act. He
could claim the interest in the State appeal. The fact, that
he filed cross-objections which were dismissed as time
barred, is wholly irrelevant".
Learned counsel appearing on behalf of the respondents
submitted that in terms of the judgment in Shree Vijay Cotton even if
the claimants had right to claim interest at any stage, they ought to
have made such a claim before the High Court at any time before the
disposal of the appeals. Though, it was not necessary to make such a
claim in any particular form, and neither the rules of procedure nor the
rigors of limitation inhibited the right of the claimants to claim
interest, the least that was expected of them was to make a claim in
some form or the other, which they have failed to do. In such a case,
it would not be appropriate for this Court to exercise its discretion
under Article 136 of the Constitution of India to grant relief to the
appellants.
Having regard to the submissions urged on behalf of the
respondents we could have remitted the matter to the High Court to
give an opportunity to the claimants to make a claim of interest before
the High Court. That however, would only be a formality because
having regard to the law laid down in Sunder, the High Court is bound
to award the interest on the additional amount payable under Section
23(1A) and solatium payable under Section 23 (2) of the Act.
Moreover, grant of interest on these amounts is consequential and
automatic and involves only arithmetical calculation and not
application of judicial mind or exercise of judicial discretion. It is no
doubt true that the appellants ought to have made such a claim before
the High Court, even in the appeals preferred by the State. But in
fairness to the appellants it must be conceded that during the
pendency of the appeals before the High Court the law as laid down in
Prem Nath Kapoor held the field and, therefore, it would have been
futile for them to claim interest. The claimants could have filed such
an application before the High Court if the judgment in Sunder was
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pronounced when the appeals were pending before the High Court.
Unfortunately, they could not do so because the judgment in Sunder
and the impugned judgment in the appeals preferred by the State
before the High Court were pronounced on the same day. Having
regard to these facts, peculiar to this case, we are persuaded to allow
the appeals preferred by the appellants as a special case in the interest
of justice. Accordingly, we hold that the appellants are entitled to
interest on the amounts payable to them under Section 23 (1A) and
Section 23 (2) of the Land Acquisition Act. We direct the Collector to
calculate the interest payable and pay the same to the appellants
without further delay. These appeals are accordingly allowed. No
order as to costs.