Interest on solatium, when not expressly awarded, is payable only from 19 September 2001.

The respondents’ land was acquired under the Land Acquisition Act, 1894, pursuant to an award dated 16.11.1994. The land was subsequently transferred to Haryana State Industrial and Infrastructure Development Corporation Limited (“HSIIDC”) on 23.12.2000.

The Reference Court enhanced the compensation by award dated 30.11.2000, and the landowners’ Regular First Appeals were allowed by the High Court on 05.07.2011. The High Court enhanced the compensation to ₹210 per square yard and granted statutory benefits under Sections 23(1-A), 23(2) and 28 of the 1894 Act, including interest.

The landowners thereafter sought interest on solatium from the date of the original award, i.e., 16.11.1994. The executing court, by order dated 16.08.2023, held that they were entitled to such interest even for the period preceding 19.09.2001.

HSIIDC challenged that order under Article 227 of the Constitution, accepting its liability to pay interest on solatium but contending that such interest could commence only from 19.09.2001, the date of the Supreme Court’s judgment in Sunder v. Union of India.

1. Whether the executing court could grant interest on solatium when the appellate judgment awarded interest and statutory benefits but did not expressly deal with interest on solatium?

2. Whether interest on solatium was payable from the date of the original award, 16.11.1994, or only from 19.09.2001, the date of the judgment in Sunder v. Union of India?

Under Sunder v. Union of India, solatium forms part of “compensation” under Section 23 of the Land Acquisition Act, 1894, and consequently attracts interest under Sections 34 and 28; however, Sunder did not specify the temporal commencement of such interest.

Gurpreet Singh v. Union of India clarified that an executing court may award interest on solatium where the decree neither expressly nor impliedly rejects it, but such interest is recoverable only in pending executions and ordinarily from 19.09.2001, not for any prior period.

An executing court cannot go behind the decree.

The decisions in Land Acquisition Officer v. Shivappa Mallappa Jigalur and Bhanushankar Oghadbhai Mehta v. Gujarat Industrial Development Corporation Ltd. recognise that interest on solatium may follow where the operative decree grants the relevant benefit, but they do not authorise an award contrary to the limitation clarified in Gurpreet Singh.

The Court also distinguished automatic interest under Section 34 from discretionary interest under Section 28.

The High Court found that its appellate order dated 05.07.2011 enhanced compensation and granted statutory benefits under Sections 23(1-A), 23(2) and 28, but did not specifically direct payment of interest on solatium from the date of the original award.

Since interest on solatium had not been expressly or impliedly denied, the executing court was competent to apply Sunder and recognise the landowners’ entitlement to such interest.

Nevertheless, under the binding clarification in Gurpreet Singh, that entitlement could operate only from 19.09.2001.

The fact that the appeals were decided in 2011 did not justify granting interest for the period before 19.09.2001; doing so would create inconsistent treatment between similarly situated landowners depending merely on the date of appellate adjudication.

The Court therefore held that the executing court had correctly recognised the entitlement in principle but erred in granting interest from 16.11.1994.

However, such interest was payable only from 19.09.2001, and not from the date of the original award dated 16.11.1994.

Accordingly, the executing court’s order dated 16.08.2023 was set aside, and the connected revision petitions were disposed of on the same terms.