Executing courts must reassess compensation calculations with reasoned findings, applying the principles in Gurpreet Singh.

The Gujarat State Industrial Development Corporation (GSIDC), the acquiring body, acquired the respondents’ lands situated at Piraman and Ghadkhol villages, Ankleshwar Taluka, Bharuch District, for expansion of the Ankleshwar Industrial Estate.

The acquisition took place in 1977, and the Land Acquisition Officer awarded compensation at Rs. 250 per Are under Section 11 of the Land Acquisition Act, 1894, by award dated 26 April 1983. On reference, the compensation was enhanced to Rs. 630 per Are, and subsequently, on review, to Rs. 765 per Are.

GSIDC and the claimants filed cross-appeals. By judgment dated 18 March 2002, the Division Bench reduced the compensation to Rs. 685 per Are, while granting the statutory benefits under Sections 23(1A) and 23(2) of the Land Acquisition Act and interest on solatium in accordance with Sunder v. Union of India.

During the proceedings, GSIDC had deposited 25% of the compensation pursuant to an order of the Supreme Court.

The respondents thereafter initiated execution proceedings, alleging a shortfall in the amount deposited.

The Executing Court accepted the claimants’ calculations, relying substantially on Smt. Tribeni Devi v. State of Bihar, and directed GSIDC to pay the claimed amount.

GSIDC challenged those orders in the present revision applications, contending that the deposit should have been adjusted against the principal and that interest should have ceased to accrue on the deposited amount.

Whether the amount deposited by GSIDC pursuant to the Supreme Court’s order was required to be adjusted against the principal compensation or first against accrued interest under the applicable principles governing execution of money decrees.

Whether interest continued to accrue on the compensation amount notwithstanding the deposit of 25% made by GSIDC.

Whether the Executing Court erred by accepting the claimants’ calculations without recording independent and adequate reasons, particularly in light of the Constitution Bench decision in Gurpreet Singh v. Union of India.

The Court considered the statutory benefits payable under Sections 23(1A) and 23(2) of the Land Acquisition Act, 1894, and the entitlement to interest on solatium recognised in Sunder v. Union of India, (2001) 7 SCC 211.

It also considered the principles under Order XXI Rule 1 of the Code of Civil Procedure concerning appropriation of payments made towards an executing decree, including the competing contentions regarding adjustment first towards interest or principal.

The Court held that the controversy had to be reconsidered in accordance with the Constitution Bench judgment in Gurpreet Singh v. Union of India, (2006) 8 SCC 457, which governed the treatment and adjustment of deposits in land-acquisition compensation matters.

The Court further applied the procedural requirement that an Executing Court must give reasons when determining disputed calculations and entitlement.

The High Court found that the Executing Court had merely accepted the claimants’ calculations, primarily on the basis of Tribeni Devi, without independently examining the effect of GSIDC’s 25% deposit, the cessation or continuation of interest, and the proper appropriation of the deposited amount.

The Executing Court had also reasoned that the deposit could not be adjusted towards principal because the claimants had not withdrawn it, but had not adequately analysed the governing legal principles or the actual calculations.

Since the Supreme Court’s decision in Gurpreet Singh had clarified the relevant law during the pendency of the proceedings, and because resolution of the dispute required examination of competing calculations, the High Court declined to decide the merits itself.

It instead directed the Executing Court to reconsider the matter afresh, apply the law declared in Gurpreet Singh, and provide reasoned findings.

The High Court quashed and set aside the impugned orders of the Executing Court and remanded all execution petitions for fresh adjudication.

The parties were permitted to submit fresh calculations and written submissions, and the Executing Court was directed to decide the matters afresh on merits, after considering Gurpreet Singh and recording reasons, preferably by 31 December 2026.

The Court expressly left all rights and contentions open and clarified that it had not adjudicated the merits of the parties’ competing claims.

Rule was made absolute, with no order as to costs.