Research › Search › Judgment

Madhya Pradesh High Court · body

2001 DIGILAW 603 (MP)

Union of India v. Kanti Sharma

2001-08-16

A.K.MISHRA, BHAWANI SINGH

body2001
ORDER (Oral) Singh, C.J. -- 1. Through this appeal, preferred under section 11 of the Requisitioning and Acquisition of Immovable Property Act, 1952 (for short 'Act of 1952'), award of Arbitration appointed by the State by virtue of powers delegated to it under section 17 by the Central Government under section 8(1)(b) of the Act of 1952, has been challenged. By award dated July 9, 1987, the Arbitrator has not only awarded enhanced compensation but also interest on the amount of award. 2. Shortly stated, Smt. Kanti Sharma (claimant), was owner of Khasra No. 280/1, measuring 1.96 acres in village Rajakhedi, Settlement No. 244, Patwari Circle No. 77 (Sagar). Initially, the land was requisitioned for Ministry of Defence, Government of India for public purpose by the competent authority. Thereafter, it has been acquired for the same purpose through Gazette Notification dated 1.11.1971 from the same date. Collector awarded compensation of Rs. 13,328.00-Rs. 6.800.00 per acre. Claimant was not satisfied with this award, therefore, claimed arbitration. Accordingly, respondent No.3 was appointed Arbitrator in the matter by the State Government. The Arbitrator after considering the matter and hearing parties enhanced the compensation to Rs. 2,42,806.00 at the market value - Rs. 3.00 per square foot. The Arbitrator has also awarded interest at the rate of 6% per annum from the date of notification till the award, taking the total amount of compensation to Rs. 4,77,562.70. 3. Smt. Indira Nair, learned counsel for appellant raised two submissions. First submission is that the Arbitrator has awarded higher compensation in this case, though the facts of the case and evidence do not justify it. Second submission is that award of interest is illegal, therefore, the award is liable to be set aside on this ground as well. Shri P.D. Tiwari, learned counsel appearing for the claimant opposes these submissions and submits that facts of the case justify enhancement of compensation and payment of interest. Learned counsel submits that claimant was owner of this piece of land located at a very important place of the town. She has been deprived of the ownership and possession of the land, therefore, the Arbitrator has assessed the market value of the land in accordance with law. Similarly, payment of interest is justified in the facts and circumstances of this case, particularly when the Arbitrator was appointed after a period of 16 years. 4. She has been deprived of the ownership and possession of the land, therefore, the Arbitrator has assessed the market value of the land in accordance with law. Similarly, payment of interest is justified in the facts and circumstances of this case, particularly when the Arbitrator was appointed after a period of 16 years. 4. After giving our consideration to the facts of the case, we find that the claimant possessed this land in the historical town of Sagar in the State of M.P. Defence Establishments are located at this place and the land had been requisitioned and thereafter acquired for the Army and it came in possession of the land many years before the date of notification, as contended by learned counsel for the claimant. Looking to the location of the land and value thereof, the award of compensation by the Land Acquisition Officer was thoroughly unreasonable. Therefore, the Arbitrator has given propel justification for enhancement thereof to the extent stated in the preceding paragraph of this judgment. We fine neither any ground nor any justification to interfere in the compensation award made by Arbitrator in this case, therefore contention raised by Smt. Nair, learned counsel for the appellant is rejected. 5. Having come to the aforesaid conclusion on the question of compensation in this case, we turn to examine the second question whether Arbitrator was justified in awarding interest to the claimant. On this question, Smt. Indira Nair, learned counsel for appellant drew our attention to number of decisions rendered by Apex Court. These decisions are: 1993 Supp. (2) SCC 149 [Union of India v. Hari Krishan Khosla], (1994) 1 SCC 367 [Union of India v. Kolluni Ramaiah and others], (1996) 6 SCC 44 [Union of India and others v. Dhanwanti Devi and others], AIR 1996 SC 3148 [Union of India v. Ajaib Singh and others], AIR 1996 SC 3343 [Union of India and others v. Sher Singh and another] and AIR 1997 SC 2655 [Union of India and another v. Karam Singh and others]. 6. In Hari Krishan Khosla's case (supra) question for determination was whether provisions of section 8 (3) of the Act of 1952 are discriminatory so far as they deny the land owner the amount of solatium and interest thus, these provisions of the Act of 1952 are against the provisions of Art. 14 of the Constitution. 6. In Hari Krishan Khosla's case (supra) question for determination was whether provisions of section 8 (3) of the Act of 1952 are discriminatory so far as they deny the land owner the amount of solatium and interest thus, these provisions of the Act of 1952 are against the provisions of Art. 14 of the Constitution. In the Act of 1952, there is no provision for payment of solatium and interest though it exists under the Land Acquisition Act. Considering the question, the Apex Court ruled in paragraph 69 of the judgment that: "69. In the result, we hold that the failure to provide solatium 15% or interest at 6% under section 8(3)(a) of the Act does not make it discriminatory." Then, in paragraph 75 of the judgment, the Apex Court has said that: "75. On this basis, it is contended that Article 14 is the basic structure and since section 8 (3)(a) offends that Article it damages or destroys the basic structure of the Constitution. We have already held in answer to Question No. 1 that there is no violation of Article 14. If this be so, the ratio of Jagannath case would squarely apply." Finally, in paragraph 78, it has been said that: "78. In this case, we set aside the award of 15% solatium and 6% interest on enhanced compensation since permissible under this Act. ...." This decision has been followed in Kolluni Ramaiah's case (supra). In paragraph 8 of the judgment, the Court held: "8. We have given our careful consideration to the above arguments. In view of the categoric pronouncement of this Court in Hari Krishan Khosla case, the award granting solatium at the rate of 15% and interest at the rate of 6% under the case of acquisition is clearly bad in law." In Dhanwanti Devi's case (supra) also, the Apex Court has reiterated the view taken by it in Hari Krishan Khosla's case (supra). In paragraph 17 of the judgment, it is said that: "17. All the decisions cited by Mr. Vaidyanathan in support of his contention on solatium were considered in Hari Krishan Khosla case. His repeated attempts failed to persuade us to have that decision referred to a larger Bench of five Judges. We are unable to persuade ourselves to doubt the correctness of the judgment in Hari Krishan Khosla case. All the decisions cited by Mr. Vaidyanathan in support of his contention on solatium were considered in Hari Krishan Khosla case. His repeated attempts failed to persuade us to have that decision referred to a larger Bench of five Judges. We are unable to persuade ourselves to doubt the correctness of the judgment in Hari Krishan Khosla case. All the decisions cited by the counsel were considered in extenso by the Bench in Had Krishan Khosla case. We are, therefore, of the opinion that it is not necessary to re-examine all the decisions once over. We are in respectful agreement with the ratio in Hari Krishan Khosla case. It would be seen that sub-section (2) of section 23 of the Acquisition Act expressly states that solatium is 'in addition' to the compensation as consideration for compulsory nature of acquisition. This distinction was pointed out in catena of decisions including the one referred by a Bench of three Judges in Prem Nath Kapur v. National Fertilizers Corpn. of India Ltd. For parity of reasons, without further discussion it was held that interest also was not payable. We, therefore, respectfully agree with the ratio in Hari Krishan Khosla case that the Act omitted to pay solatium and interest in addition to compensation. The omission by the Legislature, as stated earlier, is deliberate. In Distt. Judge case a Bench of two Judges of this Court had held that the claimant is not entitled to solatium and interest. Accordingly, we hold that the respondents are not entitled to solatium and interest." Then, in paragraph 20, the Court said: "20. Accordingly, we hold that the High Court and the Arbitrator committed manifest grave error of law in awarding solatium and interest on the compensation determined under section 8 of the Act." Similarly, Hari Krishan Khosla's case has been followed in the cases of Ajaib Singh, Sher Singh and Karam Singh (supra). 7. Learned counsel for claimant has submitted that in Hari Krishan Khosla's case (supra), the Apex Court permitted award of solatium at the rate of 30% and interest at the ratio of9% per annum taking into consideration the fact that Arbitrator was not appointed for 16 years to determine the compensation. Similarly, in this case, the State took around 16 years to appoint the Arbitrator. Similarly, in this case, the State took around 16 years to appoint the Arbitrator. The claimant was deprived of the use of compensation ultimately determined in this case, therefore, award of compensation is justified in the facts and circumstances of this case also. Indira Nair, learned counsel for appellant submits that in view of series of decisions on this question, award of interest is not legally permissible. Therefore, it cannot be awarded on any other principle. Further, burden to pay the interest is on Union of India, whereas the appointment of Arbitrator has been made by the State Government, though on authorisation by the Union of India. As such, this liability cannot be fastened on the appellant Union of India. Giving our consideration to this question, we find from various decisions of Apex Court, referred to in the preceding part of judgment that Apex Court has laid down in an unmistakable terms that payment of interest and solatium is not permissible under the Act of 1952. Therefore, the award of interest to the claimant cannot be justified. Consequently, the award of interest by the Arbitrator is liable to be set aside. 8. What emerges out of the aforesaid discussion is that this appeal is allowed. Award passed by the Arbitrator is confirmed to the extent it allows payment for enhancement of compensation and it is set aside so far as the same allows interest to the claimant. Learned counsel for the claimant prays for early payment of compensation. Let the compensation be paid within three months to the claimant after deducting the amount already paid to him. Cost on parties.