Condonation of appellate delay does not bar interest absent an express judicial denial.

The State of Haryana acquired the respondents’ land under Sections 4 and 6 of the Land Acquisition Act, 1894, through notifications dated 16 January 2007 and 12 April 2007.

The Land Acquisition Collector awarded compensation at ₹16,00,000 per acre. On appeal, the High Court enhanced the compensation to ₹29,00,400 per acre and directed payment of all statutory benefits under the Act.

The Supreme Court subsequently reduced the market value to ₹25,00,000 per acre on 5 September 2017.

During the Supreme Court proceedings, Arawali Power Company deposited 25% of the differential amount pursuant to the interim order dated 11 November 2016, and later deposited the balance amount with statutory benefits and interest.

The landowners withdrew the amounts.

In execution proceedings, disputes arose regarding: (i) whether interest was payable for the period of delay in filing the appeals before the High Court; and (ii) whether the amounts deposited pursuant to the Supreme Court’s interim order were to be appropriated first towards interest or according to the specific heads mentioned in the calculation sheets.

The Executing Court denied interest for the 626-day period during which the appeals had been delayed and appropriated the interim deposit primarily towards interest. Both the beneficiary agency and the landowners challenged aspects of that determination before the High Court.

1. Whether the landowners were entitled to interest for the period during which there was delay in filing their appeals before the High Court?

2. Whether the amounts deposited by Arawali Power Company pursuant to the Supreme Court’s interim order were correctly appropriated by the Executing Court first towards interest and thereafter towards compensation?

The Court applied the statutory scheme of the Land Acquisition Act, 1894, particularly the provisions concerning statutory compensation, solatium, additional compensation and interest under Sections 23, 28 and 34.

It held that an appellate order granting “all statutory benefits” ordinarily includes the statutory interest payable under the Act unless interest for a particular period has expressly been excluded.

The Court further applied the doctrine of merger and the principle that an executing court cannot travel beyond or modify the decree.

On appropriation, the Court relied principally on Gurpreet Singh v. Union of India, 2008 (2) RCR (Civil) 207, especially paragraphs 51–53.

Under that principle, a part-payment made pursuant to an interim appellate order is ordinarily appropriated first towards interest and then towards principal; however, where the judgment-debtor deposits specified amounts under distinct heads and intimates that appropriation to the decree-holder, the specified appropriation governs.

The Court also relied on Prem Nath Kapur v. National Fertilizers Corporation of India Ltd., (1996) 2 SCC 71, as approved in Gurpreet Singh, holding that an accepted deposit made under specified heads cannot subsequently be re-appropriated at the decree-holder’s choice.

On the first issue, the Court held that the order condoning delay dated 10 February 2014 did not impose any condition excluding interest for the delayed period.

The subsequent final judgment enhanced compensation and expressly granted all statutory benefits, which included interest under the Land Acquisition Act.

That order merged into the Supreme Court’s final order, and neither the High Court nor the Supreme Court had excluded interest for the period of delay.

Since Arawali Power Company had not challenged the grant of interest before the Supreme Court, the Executing Court could not subsequently deny interest for 626 days.

On the second issue, the Court found that Arawali had submitted calculation sheets allocating the deposited sums under distinct heads, including market value, additional compensation, solatium and interest.

The landowners signed those calculation sheets and accepted the payments.

This constituted sufficient intimation of the intended appropriation under Gurpreet Singh; a separate Form-D notice from the Collector was unnecessary in the circumstances.

Therefore, the interim deposits could not be re-appropriated entirely towards the subsequently determined interest liability, as that would result in unjust enrichment.

The Court answered the second issue in favour of Arawali Power Company and against the landowners, holding that the interim deposits had to be appropriated according to the specified heads set out in the calculation sheets, rather than first towards the entire interest liability.

The connected civil revisions and the clarification application were accordingly disposed of in terms of these findings, and all pending applications were also disposed of.