State of Kerala, Rep. by The Chief Secretary to Government v. C. S. Lakshmanan
2005-12-13
RAJEEV GUPTA, S.SIRI JAGAN
body2005
DigiLaw.ai
Judgment :- S. Siri Jagan, J. This appeal at the instance of the State is directed against the judgment of the learned Single Judge in O.P.No.12094 of 1993. The matter relates to compensation under the Land Acquisition Act. The facts necessary for disposal of this appeal are as follows. 2. Certain properties belonging to the respondents were acquired for a public purpose by the State. Invoking the urgency provisions under Section 17 of the Land Acquisition Act, advance possession of the land was taken by the state on 5-12-1991. Under clause (a) of sub-section (3A) of Section 17 of the Land Acquisition Act, whenever advance possession is taken by the State invoking the special powers under section 17 in cases of urgency, the collector was bound to tender payment of 80% of the compensation for such land as estimated by him to the persons interested entitled thereto. It is alleging that such amount was not paid that the original petition was filed by the respondents. 3. There was a dispute as to whether the amount was so tendered by the Collector to the respondents. Ultimately, pursuant to interim orders passed by the learned Single Judge in the original petition, the amount was deposited in court and the respondents withdrew the same on 18-1-1994. Finding that there was default on the part of the state to pay the amount as enjoined by law, the learned Single Judge directed the State to pay interest on the said amount to the respondents at the rate of 9% for the period from 5-12-1991 to 4-12-1992 and at the rate of 15% for the subsequent years till 18-1-1994. In addition, the learned single Judge also directed the State to pay interest at the rate of 15% p.a. on such interest amount payable for the period from 5-12-1991 to 18-1-1994. This judgment is under challenge in this writ appeal. 4. We heard the learned Government Pleader as also the learned counsel for the respondents. 5. Before going into the contentions on merits, we have to dispose of a preliminary objection raised by the learned counsel for the respondents. Counsel for the respondents would submit that this court had, in C.M.P.No.3163/1999 filed by the state for condoning the delay in filing the appeal, passed an order dated 24-7-2000.
5. Before going into the contentions on merits, we have to dispose of a preliminary objection raised by the learned counsel for the respondents. Counsel for the respondents would submit that this court had, in C.M.P.No.3163/1999 filed by the state for condoning the delay in filing the appeal, passed an order dated 24-7-2000. By the said order, the delay was condoned on condition that the appellant deposited the entire amount as directed in the impugned judgment within two months, before the Land Acquisitions Court. Counsel for the respondents would submit that since the appellant had not complied with the order, the appeal itself is liable to dismissed for such non-compliance. From the records of the case, we see that the appellant had filed C.M.P.No.21/2001 for extension of time to deposit the amount as ordered by this court and the same was allowed on 3-1-2001. We also find a statement filed on behalf of the appellant dated 9-4-2002 annexing a calculation sheet showing the amounts due to the 1st respondent as per the impugned judgment in the original petition. As per the said statement, the amount as calculated by them has been deposited by the appellant. We also find that the 1st respondent had filed C.M.P.No.147/2002 praying for vacating the order dated 24.7.2000 which was originally dismiss for non-prosecution on 22.10.2002 against which 1st respondent had filed C.M.P.No.7419/2002 on which no orders were passed. Since there is a dispute regarding the amount to be deposited, we do not think that the appeal should be dismissed for non-compliance of the order dated 24-7-2002. We hold that the deposit made by the appellant would be treated as sufficient compliance of the order dated 24-7-2002. However, it would be open to the 1st respondent to challenge the correctness of the amounts in execution proceedings before the court below. 6. In so far as the question of payment of compensation which had to be deposited by the state as per Section 17 (3A) (a), we do not think that the state could seriously challenge the finding of the learned single judge. It is in evidence that the respondents had earlier filed O.P.No.712/1992 before this court.
6. In so far as the question of payment of compensation which had to be deposited by the state as per Section 17 (3A) (a), we do not think that the state could seriously challenge the finding of the learned single judge. It is in evidence that the respondents had earlier filed O.P.No.712/1992 before this court. The contention of the state was that they had, in fact, offered the amount to the respondents immediately after taking possessing on 5-12-1991 and the same could not be paid since the respondents failed to produce the title deeds relating to the property, which was disbelieved by this court in that judgment. The contention that subsequently the amount was deposited before the court was also disbelieved by the learned single judge, in the impugned judgment, on the ground that the amount deposited by the learned Single Judge, in the impugned judgment, on the ground that the amount deposited by the Land Acquisition Officer was returned by the court as no details were given regarding the case in respect of which the amount had to be credited. The amount was ultimately deposited only pursuant to order of the learned single Judge in the present Original Petition and the respondents withdrew the same on 18-1-1994. In view of the above findings the state cannot now contend that they are not liable to pay interest on the amount of compensation for the period from 5-12-1991 to 18-1-1994. That point is held against the appellant. 7. However, the State has got another contention that the direction to pay interest at the rate of 15% on the interest amount found due as above is unsustainable, since interest on interest is not payable on compensation amount. Learned counsel for the respondents would contend that the interest itself is an amount payable by the state which has not been paid and, therefore, the respondents are entitled to interest on that amount also. In support of this contention, learned counsel for the respondents relied upon the decision of the Supreme Court in Union of India Vs. Justice S.S. Sandhawalia (Retd.) and others, (1994) 2 SCC 240, wherein, in paragraph 4, the Supreme Court held as Follows: “4.
In support of this contention, learned counsel for the respondents relied upon the decision of the Supreme Court in Union of India Vs. Justice S.S. Sandhawalia (Retd.) and others, (1994) 2 SCC 240, wherein, in paragraph 4, the Supreme Court held as Follows: “4. From the foregoing discussion, it becomes clear that the Union of India contested the writ petition in the High Court only in regard to the entitlement of the cash equivalent of the Section 22-B of the 1954 Act and the cash benefit claimed for failure of the State of Bihar to provide the original petitioner with a staff car. The Union Government had conceded the demand for the grant of rupees one lakh by way of death-cum-retirement gratuity and had paid the balance of Rs.51,000 to the original petitioner. Since this payment was delayed by a year or so, the original petition claim interest on the balance amount at 12% per annum, which ha been rightly allowed by the High Court. Once it is established that an amount legally due to a party was not paid to it, the party responsible for withholding the same must pay interest a rate considered reasonable by the court. Therefore, we do not see any reason to interfere with the High court’s order directing payment of interest at 12% per annum on the balance of the death-cum-retirement gratuity which was delayed by almost a year. We uphold this part of the High Court’s order.” We do not think that this decision is of any help to the case of the respondents. That decision does not specifically deal with the question as to whether interest on interest can be claimed, at any rate in the context of compensation payable under the Land Acquisition Act. 8. Counsel for the respondents has cited before us another decision also in support of his contention, that of Sunder Vs. Union of India, (2001) 7 SCC 211 which, according to him, supports his case that he is entitled to interest on the interest amount also. He took us through paragraph 24 of the judgment, which runs as follows: “24. The proviso to Section 34 of the Act makes the position further clear.
Union of India, (2001) 7 SCC 211 which, according to him, supports his case that he is entitled to interest on the interest amount also. He took us through paragraph 24 of the judgment, which runs as follows: “24. The proviso to Section 34 of the Act makes the position further clear. The proviso says that “if such compensation” is not paid within one year from the date of taking position of the land, interest shall stand escalated to 15% per annum 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. “It is inconceivable that the solatium amount would attract only the escalated rate of interest from the expiry of one year and that there would be no interest on solatium during the preceding period. What the legislature intended was to make the aggregate amount under Section 23 of the Act to reach the hands of the person as and when the award is passed, at any rate as soon as he is deprived of the possession of his land. Any delay in making payment of the said sum should enable the party to have interest on the said sum until he receives the payment. Splitting up the compensation into different components for the purpose of payment of interest under section 34 was not in the contemplation of the legislature when that section was framed or enacted.” We do not think that this judgment supports the proposition that interest is payable on the interest element of the compensation. It only speaks about interest on the solatium part also of the compensation amount. As such, this decision is also of no help to the 1st respondent in his submissions. 9. We need not delve deep into this question, since there is a decision exactly on the same point under the Land acquisition Act decided by the supreme Court in the decision of State of Punjab and others Vs. Mohinder Singh Randhawa and another, AIR 1992 SC 473. In paragraph 6 of that judgment, the Supreme Court held as follows: “6. Similarly in calculating interest under section 34 of the Act, for the first year 9 per cent and for subsequent years 15 per cent is payable on the amount awarded as compensation.
Mohinder Singh Randhawa and another, AIR 1992 SC 473. In paragraph 6 of that judgment, the Supreme Court held as follows: “6. Similarly in calculating interest under section 34 of the Act, for the first year 9 per cent and for subsequent years 15 per cent is payable on the amount awarded as compensation. Interest runs on the sum payable as compensation excluding the interest component. Thus, when interest for the 2nd year of default is to be calculated at 15 per cent, the interest of 9 per cent for the amount would not be added to the compensation for calculating the interest.” This decision is in authority binding on us in respect of the issue now raised by the State. Going by the said decision, there is absolutely no room for any doubt that under the Land Acquisition Act, interest on the interest amount payable under section 34 of the Act is not payable at all. 10. In that view, the direction in paragraph 12 of the impugned judgment of the learned Single Judge directing payment of interest at the rate of 15% per annum on the interest amount payable for the period from 5-12-1991 to 18-1-1994 is unsustainable and is liable to be set aside. We do so. Accordingly, the appeal is party allowed to the above extent. There will not be any order as to costs.