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2005 DIGILAW 254 (CAL)

LALIT KUMAR NAHATA v. STATE OF WEST BENGAL

2005-04-18

PINAKI CHANDRA GHOSE

body2005
PINAKI CHANDRA GHOSH, J. ( 1 ) THIS application has been filed by the petitioners challenging the order dated 2nd July, 2003. ( 2 ) THE petitioners came before this Court earlier to redress Their grievance. His Lordship M. H. S. Ansari J. disposed of the said writ petition directing the competent authority to treat the writ application as the representation of the petitioners and to dispose of the same after giving a chance of being heard. On 5th May, 2003 the matter was assigned to the deputy Secretary and Ex-Officio Director of Film (here in after referred to as the authority) by the Principal Secretary. Accordingly, a hearing was granted to the petitioners and their learned Advocate on 19th May, 2003 and 16th june, 2003 and thereafter order was passed by the authority. ( 3 ) THE only question arises before the said authority to decide whether the petitioners would receive interest on the amount directed to be paid by the Tribunal by its award published under Section 7 of the Technicians' Studios private Ltd. Act. 1980 (hereinafter referred to as the said Act.) on the following facts. ( 4 ) ON 24th December, 1979, the Government of West Bengal served a notice for acquisition of the Technicians' Studio Private Ltd. (hereinafter referred to as the said company) and on 24th December, 1979 the possession was obtained by a notification dated 10th September, 1980, the State government took over the management of the said company. On May 4, 1983 a notification was issued by the State Authorities acquiring the said company with its assets with effect from 1st May, 1983. For the purpose of adjudication of the compensation under the said Act, the Tribunal was constituted. The said Tribunal thereafter completed the adjudication and an award was published under Section 7 of the said Act. ( 5 ) THE petitioner, from time to time, filed representations and ultimately on 9th January, 2003 filed a writ petition which was disposed of by an order dated 9th April, 2003 and the authority was directed to determine the question that whether the petitioners are entitled to receive the interest on the said compensation awarded by the learned Tribunal. ( 5 ) THE petitioner, from time to time, filed representations and ultimately on 9th January, 2003 filed a writ petition which was disposed of by an order dated 9th April, 2003 and the authority was directed to determine the question that whether the petitioners are entitled to receive the interest on the said compensation awarded by the learned Tribunal. ( 6 ) AFTER hearing the petitioners, a reasoned order has been passed by the said authority whereby it has been held that the petitioners are not entitled to get interest on the ground that the learned Tribunal did not grant any interest since the original share certificates were not produced by the petitioners before the learned Tribunal. Even after the award was published the petitioners could not produce the original share certificates and the reason for non-payment is non-production of share certificates. It has been ordered by the said authority that the payment should be released after production of the share certificates in original. ( 7 ) THE learned Counsel Mr. Gupta appearing on behalf of the petitioner submitted that despite repeated requests and representations made by the petitioners, the compensation amounts were not paid by the State authorities on the ground that the original share certificates were not produced before them. But it is pointed out by Mr. Gupta that the petitioners categorically stated that the original share certificates were readily available and to be produced before receiving the said amount before the authorities. In spite thereof no steps were taken by them to pay the said amount. Hence he submitted that the withholding of the legitimate compensation amount would be evident from the said fact and further the said authority decided the matter without application of mind and passed the order mechanically and in colourable exercise of power without any reasonable basis. Therefore he submitted the order is bad in law and should be set aside. ( 8 ) HE further drew my attention to the records and submitted that the writ petitioners produced all the original certificates and other relevant documents before the authority which would be evident from the minutes of the meeting dated 19th May, 2003 (being annexure P-5 at pages 115 to 117 ). By the said impugned order although the principal amount payable on account of the said shares were directed to pay the petitioners. By the said impugned order although the principal amount payable on account of the said shares were directed to pay the petitioners. But the legitimate claim of interest thereon was arbitrarily rejected by the authority would show the non-application of mind by the said authority. According to him the interest has to be paid in accordance with the provisions of the said Act. And he further drew my attention to Section 8 of the said Act, which is reproduced here under :"for the acquisition of the company the State Government, shall, as soon as possible after the date of the award made by the Tribunal, or, as the case may be, the date of the order of the High Court in the case of an appeal, pay in case to the persons interested in the Company the amount of compensation determined under Section 7 together with interest at the rate of six per centum per annum from the date of the award till the date of payment. " ( 9 ) ACCORDINGLY, he claimed the petitioner to get the said compensation along with the said interest, if not more and he relied upon (2001)7 SCC 211 (Sunder v. Union of India) in support of his contention. He further contended that even the order passed by the learned Tribunal published the said award on 22nd November, 1993 whereas the acquisition was made in the year 1980. There was a delay of 13 years almost and the petitioners are entitled to get the interest at 18 per cent per annum which has been fixed by the hon'ble Supreme Court reported in (2001)7 SCC 211 (supra ). He further contended if the petitioners defaulted in producing the said original certificates then the Tribunal could have held that the compensation amount also could not be awarded in favour of the petitioners. Thereafter the petitioners were able to establish their rights before the Tribunal as share holders and the tribunal for such reason granted compensation in favour of the petitioners. The share certificates were very much available with the petitioners since the same was released by the Income Tax Authorities and the petitioner duly placed the same for payment of the said compensation money, awarded in their favour. The petitioners had suffered in this matter and had to file the writ petition to get the principal amount of compensation. ( 10 ) MR. The petitioners had suffered in this matter and had to file the writ petition to get the principal amount of compensation. ( 10 ) MR. Gupta also relied upon AIR 1985 SC 356 (State of Kerala and ors. v. M. Padnabhan Nair), AIR 1990 SC 185 (Life Insurance Coporation of india and Anr. v. Gagadhar Vishwanath Ranade (Dead) by LRs. ,), (2001)7 SCC 211 (Sunder v. Union of India), (2003)7 SCC 448 (State of Maharashtra and ors. v. Maimuma Banu and Ors.) and contended that the writ petitioner are entitled to get the interest on the said compensation money as awarded by the said Tribunal being a sum Rs. 7,45,821/- and the authorities must be directed to pay the amount along with the interest to the petitioner forthwith. ( 11 ) THE learned Counsel appearing on behalf of the respondents state authorities contended before me that under Section 7 of the said Act. The award has been published by the learned Tribunal on November 23, 1993 and the petitioners were entitled to get the compensation as it would be evident from the award published by the said learned Tribunal. The learned tribunal specifically directed the share holders to produce the original share certificates at the time of payment of compensation and the same was the criteria for them to receive the compensation. He further submitted that a lawful transferee would also get that compensation proportionately on production of the share certificates. It is submitted that the share certificates could not be produced at that point of time but subsequently the petitioners only produce the same at the time of hearing which took place before the authority as directed by this Hon'ble Court. No interest was granted by the learned Tribunal and the said award has not been challenged by the petitioners. On 2nd July, 2003 the said authority (Deputy Secretary Ex-Officio Director of film) passed a reaspned order and made it clear that payment should be released immediately after production of share certificates in original with a further direction for issuance of account payee cheque. Till date the petitioners did not surrender the share certificates or receive the amount. Assuming, but not admitting, he submitted that even if the petitioner is entitled to get the interest would not exceed the rate so provided under the said Act. Till date the petitioners did not surrender the share certificates or receive the amount. Assuming, but not admitting, he submitted that even if the petitioner is entitled to get the interest would not exceed the rate so provided under the said Act. ( 12 ) AFTER considering the facts and circumstances of this case and after hearing the learned Counsel for the parties it is an admitted a fact that at the time of the publishing the award the petitioner could not produce their share certificates in original before the said learned Tribunal. It is also a fact that it has been specifically stated by the said Tribunal that the payment should be made upon the share certificates are being produced by the petitioners and/or the share holder only to find out whether they are entitled to receive the compensation amount awarded by the Tribunal. In the instant case it is also a fact that such award was published by the Tribunal long after 13 years that is the acquisition took place in 1980 and the award was published only on 22nd November, 1993. Therefore, till date there is no reason or ground to contend on behalf of the respondents that the petitioners are not entitled to get any compensation amount. It has been held in State of maharashtra and Ors. v. Maimumma Banu and Ors. (supra) where the Supreme court has held that there was no statutory obligation yet for an equitable grounds, direction for payment of interest @ 6% per annum on the rental compensation award to be [paid to the persons whose lands were acquired under the Land Acquisition Act, 1984. It appears in the facts and circumstances of the case the petitioners had to file the writ application claiming interest, since no rental compensation has been paid and furthermore there was an unusual delay without any legitimate excuse in publishing the award. The court cannot shut its eyes for such delay. It was the duty of the Learned tribunal at that point of time also to award the interest from the date of the said award until the payments are being made to the petitioners under Section 8 of the said Act. The court cannot shut its eyes for such delay. It was the duty of the Learned tribunal at that point of time also to award the interest from the date of the said award until the payments are being made to the petitioners under Section 8 of the said Act. It further appears that the petitioners had to come before this Court since despite requests no payment was made by the respondent authorities and on 9th April, 2004, this Hon'ble Court had to pass an order to decide the matter in respect of interest. It appears that from the reminders and representations being dated 14th May, 1994, 11th January, 1996, 23rd september, 1997, 28th November, 1998, 18th June, 1998 and 15th January, 2001, the petitioners specifically reminded the authorities to pay the amount and also informed the authorities that the original share certificates were available with them but no steps have been taken by the authorities. Furthermore, it would be evident from the letters that the petitioners claimed interest by their letters dated 15th January, 2001 and 11th January, 1996 @ 18% per annum and further it would be evident from the letter dated February 28, 2002 the petitioners specifically through their learned Advocate-on-Record claimed the said compensation money along with interest @ 18% per annum accrued thereon and which was duly received by the authorities on 1st March, 2002 without taking into account all the said letters which was produced before me is only the receipt for under postal certificate and although it has been stated in the letter an "upc/registered" but no registered acknowledgment card has been produced by the petitioners excepting last letter of demand dated 28th February, 2002 which was served upon all the respondents and was received on 1st March, 2002 which would be evident from the said letter and the acknowledgment. And accordingly in my opinion on the equitable ground the petitioner is entitled to claim interest on the said compensation money form the date of the possession of the properties of the company till the date of the award and further at least from 1st March, 2002, if not earlier and furthermore no reply has been received by the petitioners denying such claim of the petitioners at any point of time and no records have been produced by the respondent authorities before me to show that they took steps to pay the compensation money to the petitioners as claimed by them or demanded by them. Accordingly following the decisions of the Hon'ble apex Court reported in (2003)7 SCC 448 (supra) and further the decision of the Hon'ble Supreme Court (2001 )7 SC 211, where the Hon'ble Supreme court held as follows :"14. Question of payment of interest would arise only when the compensation is not paid or deposited on or before the date of taking possession of the land. It is inequitable that the person who is deprived of the possession of the land on account of acquisition proceedings is not given the amount which law demands to be paid to him; any delay thereafter would only be to his detriment. There must be a provision to buffet such iniquity. It is for the purpose of affording relief to the person who is entitled to such compensation when the payment of his money is delayed that the provision is made in Section 34 of the Act. That section is extracted below : "34. Payment of interest.-When the amount of such compensation is not paid or deposited on or before taking possession of the land, the collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited : provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate. of fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry. of fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry. " ( 13 ) SIMILARLY, in the instant case in addition to the equitable grounds section 8 specifically envisages that the respondents are duty bound to pay interest on any delay of payment of the compensation amount from the date of the award till the date of the payment. Therefore, in my opinion the authority was wrong in holding that the petitioners are not entitled to get any interest on the said compensation amount. It further appears to me that the said authority has failed to apply his mind in the facts and circumstances of the case and should have allowed the petitioners the interest on the compensation money. Accordingly in my opinion the said part of the order is set aside and in my opinion the petitioner is entitled to get the interest on the said compensation amounts @ 6% per annum from the date of the possession taken by the State authorities under the said Act and which is admittedly by possession was taken on 24th December, 1979 and the assets of the company was acquired by a notification on May 1,1983. Therefore, following the principle laid down by the Hon'ble Supreme Court I have to hold that delay in making such payment has been made only to the detriment of the rights of the petitioners and as such I allow this writ petition holding that the petitioners are entitled to have the interests on the compensation money. Hence, I direct the authorities to pay the said compensation amount along with an interest @ 6% per annum for the date of the possession of the company, i. e. May 1, 1983 until such payments are being made. The petitioners are also directed to deposit the said certificates with the respondent authorities simultaneously at the time of receiving of the payments. It appears to me that the petitioners at the time of hearing before the Tribunal was prevented by a sufficient cause to produce share certificates in original, since the same were seized by the income Tax Authorities and subsequently, produce the same. It appears to me that the petitioners at the time of hearing before the Tribunal was prevented by a sufficient cause to produce share certificates in original, since the same were seized by the income Tax Authorities and subsequently, produce the same. Therefore, it is clear even before the Learned Tribunal and there was no doubt in the mind of the Tribunal that the petitioners were the rightful claimant. Therefore, at that point of time also there was no dispute in respect of the title and right of the petitioners. Hence they were also directed to receive the money on production of the share certificates. ( 14 ) FOR the reasons stated herein above this writ application is allowed.