Excess compensation under one land acquisition award may be adjusted against liability under another award.

The Union Territory acquired the respondent’s land under awards dated 05.03.2003 and 29.03.2004.

It alleged that, while disbursing compensation under the first award, an excess payment of ₹37,23,863 was made to the respondent, and that this amount was adjusted on 05.05.2013 against the compensation payable under the second award.

The respondent subsequently filed an Execution Application on 31.01.2020 seeking release of the amount adjusted against the second award.

The Executing Court directed the petitioner to pay ₹37,23,863 with interest, while permitting recovery only if the petitioner later traced records showing that a recovery notice had been issued for the alleged excess payment.

The Union Territory challenged that order under Articles 226/227 of the Constitution.

Whether the Executing Court was justified in directing payment of the compensation amount under the second award despite the petitioner’s assertion that the amount had already been adjusted against an excess payment made under the first award.

Whether the respondent was entitled to initiate fresh execution to claim compensation under the second award unless the petitioner established that the alleged excess payment under the first award had in fact been received by him.

Whether the petitioner’s adjustment of the alleged excess payment, in the absence of a separately traced recovery notice or complete official records, could be sustained at the execution stage.

The Court exercised supervisory jurisdiction under Articles 226 and 227 of the Constitution to examine the legality of the Executing Court’s order.

It applied the principle that execution proceedings must give effect to the actual payment and adjustment of decretal or awarded amounts, particularly where public money is involved.

The Court also referred to Section 34 of the Land Acquisition Act, 1894, under which interest is payable on compensation awarded under the Act.

Although no judicial precedent was cited, the Court recognised that an alleged excess payment may ordinarily require appropriate recovery proceedings; however, where two awards exist, adjustment against an outstanding liability may be considered if the payment and adjustment are established from the record.

The Court found, prima facie, that the respondent had received excess compensation under the first award and that the amount had been adjusted against the liability arising from the second award in 2013.

The respondent’s silence between the adjustment in 2013 and the filing of the Execution Application in 2020 was treated as indicating awareness of, and implied acquiescence in, the adjustment.

However, because the petitioner’s records were incomplete and the respondent disputed having actually received the excess amount, the Court did not finally determine the factual dispute.

It held that the respondent should be permitted to file a fresh Execution Application and prove that he had not received the alleged excess payment.

In that event, the petitioner would be required to produce the complete payment and treasury records supporting the alleged excess payment and adjustment.

The respondent was permitted to file a fresh Execution Application asserting that he had not received the alleged excess payment under the first award.

If he establishes that fact, he would be entitled to compensation under the second award together with interest under Section 34 of the Land Acquisition Act, 1894.

In any such proceedings, the petitioner must produce the complete record concerning the alleged excess payment and its adjustment.

Pending miscellaneous applications, if any, were disposed of.