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2024 DIGILAW 472 (KER)

Director, 'Kila' (Kerala Institute of Local Administration) v. Amina Hydhrose, D/O. Hydrose

2024-04-12

C.JAYACHANDRAN

body2024
JUDGMENT : The common question which surfaces for consideration in these Revision Petitions is as follows: Whether the appellant in a Land Acquisition Appeal -carried from a reference answered in terms of Section 18 of the Land Acquisition Act, 1894 -is entitled to specify the manner of appropriation in respect of a payment made pursuant to an interim order passed in the Land Acquisition Appeal for staying the Award passed by the reference court? 2. In the orders impugned in these Revision Petitions, the learned Additional Sub Judge found that the petitioner herein (second respondent before the Sub Court) has no right to claim appropriation. 3. It requires to be mentioned at the outset that the Land Acquisition Appeals were ultimately dismissed. There is no quarrel before this Court amongst the parties that, if the appropriation as indicated by the judgment debtor in the statement of accounts dated 11.03.2015 is permissible in law, the entire Award amount stands wiped of; whereas, if such appropriation is impermissible, the decree holders are entitled to get the E.P reopened, so as to claim the balance amount due. 4. Heard Sri.P.B.Krishnan, learned counsel for the petitioners, Sri.Vinod Bhat, learned counsel for the first respondent and the learned Government Pleader on behalf of the other respondents. 5. Learned counsel for the petitioners would essentially submit that a Constitution Bench judgment of the Hon'ble Supreme Court in Gurpreet Singh v. Union of India [2006(8) SCC 457] was not correctly followed by the learned Sub Judge. In elaboration, learned counsel would point out that the contents of paragraph no.52 of the said judgment was read in isolation, divorced from the entire gamut of the dictum laid down by the Constitution Bench, which perpetrated the error, resulting in dismissal of the petitioners' claim for appropriation. Learned counsel would point out that the judgment debtor's right of specifying the appropriation when a deposit is made to the court as against the sum awarded in the decree/Award is upheld in paragraph no. 51 of the judgment of the Constitution Bench. Once the decree holder receives the payment of the amount so deposited, he would necessarily be accepting the appropriation made by the judgment debtor. This dictum of the Hon'ble Supreme Court in Prem Nath Kapur v. National Fertilizers Corporation of India Ltd. [1996(2)SCC 71] was upheld by the Constitution Bench. 51 of the judgment of the Constitution Bench. Once the decree holder receives the payment of the amount so deposited, he would necessarily be accepting the appropriation made by the judgment debtor. This dictum of the Hon'ble Supreme Court in Prem Nath Kapur v. National Fertilizers Corporation of India Ltd. [1996(2)SCC 71] was upheld by the Constitution Bench. In paragraph no.53 of the judgment, the Constitution Bench re-iterated such right of the judgment debtor to appropriate the amount deposited, even when there is a short fall at a particular stage. The ratio laid down in Prem Nath Kapur(supra) on the aspect of appropriation was specifically approved by the Constitution Bench, as is decipherable from paragraph 53 of the judgment. In such circumstances, reading and relying upon the contents in paragraph no.52, divorced from the essential dictum laid down by the Constitution Bench, as contained in paragraph nos.51 and 53, is grossly illegal, is the submission made. Learned counsel would hasten to add that the payment made pursuant to an interim order would still retain the character of a part-payment made to the amount covered by the Award/decree, wherefore, the right of the judgment debtor to specify the appropriation of the amount cannot be obliterated, more so when such right is reinforced and reiterated by the Constitution Bench. According to the learned counsel, the impugned order cannot be sustained which negates such right of the judgment debtor, especially when there is no quarrel on facts that the statement of accounts dated 11.03.2015 made by the judgment debtor specifically indicates the appropriation to be made in respect of the payment made pursuant to the interim order of the High Court. 6. Per contra, learned counsel for the first respondent would submit that in the absence of an enabling direction in the interim order, the judgment debtor is not at liberty in law to suggest/indicate any appropriation. Learned counsel would submit that the legal position as regards the right, if any, of the judgment debtor in the matter of appropriation, when a payment is made pursuant to an interim order for staying the Award/decree, is not res integra. Learned counsel would submit that the legal position as regards the right, if any, of the judgment debtor in the matter of appropriation, when a payment is made pursuant to an interim order for staying the Award/decree, is not res integra. The specific situation was dealt with by the Constitution Bench in Gurpreet Singh (Supra) in paragraph no.52, where the Hon'ble Supreme Court held that the amount so paid will be received by the decree holder on the strength of the interim order and that the appropriation will be subject to the decision in the appeal. If such appeal is disposed of in favour of the decree holder, he would be entitled to appropriate the amount received first towards interest, then towards costs and the balance towards principal, as has been clearly held by the Constitution Bench. According to the learned counsel, the impugned order warrants no interference in the revision. 7. Learned Government Pleader would endorse the submissions made on behalf of the petitioners. 8. Having bestowed my attention to the arguments addressed by the learned counsel for the parties, this Court can only endorse the submissions made by the learned counsel for the first respondent. 9. For a correct appreciation, it is necessary to have a glance on the matter referred to the Constitution Bench and the circumstances warranting such reference. In Premnath Kapoor (supra), a three judges bench of the Hon'ble Supreme Court held that the expression 'compensation' under Section 23(1) of the Land Acquisition Act, 1894 excludes solatium and that no interest is payable on solatium or on the additional amount under Section 23(1A) of the Act. Premnath Kapoor(supra) also held that the claimant is not entitled to any appropriation of the amount deposited by the judgment debtor and that the right to make appropriation is there in the Award itself, by necessary implication. That part of Premnath Kapoor(supra) which held that compensation excludes solatium and that no interest is payable on solatium was overruled by a Constitution Bench of the Hon'ble Supreme Court in Sundar v. Union of India [ 2001(7) SCC 211 ]. However, the second aspect of Prem Nath Kapur, which dealt with appropriation, was not overruled in Sundar (supra). When Gurpreet Singh came up for consideration, the learned judges doubted the correctness of that dictum as well and sought for re-consideration of the same by a Constitution Bench. However, the second aspect of Prem Nath Kapur, which dealt with appropriation, was not overruled in Sundar (supra). When Gurpreet Singh came up for consideration, the learned judges doubted the correctness of that dictum as well and sought for re-consideration of the same by a Constitution Bench. It is accordingly that the matter was posted before the Constitution Bench. Thus, the rule of appropriation in execution of money decrees in general, and the rule in the case of an Award/decree under the Land Acquisition Act in particular, were considered by the Constitution Bench. In paragraph no.7, the specific question regarding the rule of appropriation in case of part-payments being effected, is seen posed for consideration. After considering various judgments on the point, as also the statutory provisions, especially Sections 59 to 61 of the Contract Act, Order 21 Rule 1, Order 24 Rule 3 etc. and also the peculiar scheme of the Land Acquisition Act, the Constitution Bench concluded its findings in paragraph nos.49, 50, 51, 52, 53 and 54 of the judgment. In paragraph no.49, it was held that the right of appropriation of a decree holder on the payments made by the judgment debtor could only be as provided in the decree, if there is provision in that behalf in the decree; or as contemplated by Order 21 Rule 1 of the Code of Civil Procedure as explained by the Constitution Bench. In paragraph 50, the Constitution Bench deviated slightly from the reasoning in Prem Nath Kapur(supra) to hold that even going by Order 21 Rule 1, the legal position will be as envisaged in Prem Nath Kapur(supra). 10. The important discussion is contained in paragraph 51, wherein the Constitution Bench took note of the dictum laid down in Prem Nath Kapur(supra) that, when an Award/decree is passed specifying the amounts under different heads and the judgment debtor makes a deposit of specified sums under these heads, the same will amount to an intimation being made by the judgment debtor to the decree holder as to how the sum deposited is to be applied in discharge of the obligation of the judgment debtor. Prem Nath Kapur also held that once a decree holder receives payment of the sums thus deposited, he would also be accepting the appropriation made by the judgment debtor. Prem Nath Kapur also held that once a decree holder receives payment of the sums thus deposited, he would also be accepting the appropriation made by the judgment debtor. The Constitution Bench held that going by the scheme of the Act, it cannot be said that the approach made in Prem Nath Kapur(supra) is erroneous or unreasonable. Thereafter the constitution bench reiterated the legal position thus: “Therefore, when the judgment debtor State makes a deposit along with the calculation appropriating distinct sums towards various heads of compensation as awarded by the Reference Court or by the appellate court in the appellate decree, and the amount is received by the decree holder, the decree-holder must be taken to be not entitled to seek an appropriation as if the judgment debtor has not made any intimation and that he is entitled to appropriate at his volition. Considering the scheme of compensation under the Act in the context of the specific nature of the items specifically referred to in S.23 of the Act, we are of the view that the approach adopted in Prem Nath Kapur is justified.” 11. Then, the specific issue as to how a payment, if deposited pursuant to an interim order of the appellate court, is liable to be dealt with, is seen addressed in paragraph no.52, which is extracted hereunder: “What is to happen when a part of the amount awarded by the Reference Court or by the appellate court is deposited pursuant to an interim order of the appellate court or of the further appellate court and the awardee is given the liberty to withdraw that amount? In such a case, the amount would be received by the decree holder on the strength of the interim order and the appropriation will be subject to the decision in the appeal or the further appeal and the direction, if any contained therein. In such a case, if the appeal is disposed of in his favour, the decree holder would be entitled to appropriate the amount already received by him pursuant to the interim order first towards interest then towards costs and the balance towards principal as on date of the withdrawal of the amount and claim interest on the balance amount of enhanced compensation by levying execution. But on the part appropriated towards the principal, the interest would cease from the date on which the amount is received by the awardee. Of course, if while passing the interim order, the court has indicated as to how the deposited amount is to be appropriated, that direction will prevail and the appropriation could only be done on the basis of that direction.” 12. Again in paragraph no.53, the Constitution Bench specifically upheld Premnath Kapoor (supra) on the aspect of appropriation in the following words: “Thus, on the whole, we are satisfied that the essential ratio in Prem Nath Kapur on appropriation being at different stages is justified though if at a particular stage there is a shortfall, the awardee-decree-holder would be entitled to appropriate the same on the general principle of appropriation, first towards interest, then towards costs and then towards the principal, unless, of course, the deposit is indicated to be towards specified heads by the judgment debtor while making the deposit intimating the decree holder of his intention. We, thus, approve the ratio of Prem Nath Kapur on the aspect of appropriation.” 13. It could thus be seen that the hallmark of the dictum laid down by the Constitution Bench of the Hon'ble Supreme Court is that the right of the judgment debtor in the context of appropriation -when amounts are paid in satisfaction of a decree, no matter whether such amounts are paid in complete discharge of the decree debt or in cases where there is a short fall – is upheld. The argument advanced by the learned counsel for the petitioners that, a payment made pursuant to an interim order of an appellate court, though as a pre-condition to obtain a stay of operation of the impugned judgment, nevertheless retains the character of a part payment of the decree debt, when viewed from a broader conspectus is also prima facie quite attractive. Proprio vigore, it could possibly be argued that so long as such payment tantamounts to part payment of the decree debt, the right of the judgment debtor in the matter of appropriation cannot be held to be obliterated or forfeited. Proprio vigore, it could possibly be argued that so long as such payment tantamounts to part payment of the decree debt, the right of the judgment debtor in the matter of appropriation cannot be held to be obliterated or forfeited. However, in as much as the specific issue has been dealt with by the Constitution Bench and has been answered in favour of the decree holder recognising his right to appropriate such payments first towards interest, then towards costs and the balance only towards principal, the said arguments of the learned counsel for the petitioner are no more germane for consideration. Two aspects assume significance in this context. The first is that a payment made pursuant to an interim order of the court is not voluntary in nature. The voluntary character of the payment, though in the context of Sections 59 to 61 of the Contract Act, gained the attention of the Full Bench of the Lahore High Court in Jia Ram v. Sulakhan Mal [AIR 1941 LAH 386], which judgment was taken stock of by the Constitution Bench in Gurpreet Singh (supra) (See paragraph no.22). The second aspect is again with respect to the nature and character of a payment made pursuant to an interim order by an appellate court. The constitution bench clarified the same in paragraph no.51 that “the amount would be received by the decree holder on the strength of the interim order and the appropriation will be subject to the decision in the appeal.” Based on the outcome of the appeal, the Supreme Court held that the decree holder would be entitled to appropriate the money as indicated above, the relevant findings of which are again extracted here below: “In such a case, if the appeal is disposed of in his favour, the decree holder would be entitled to appropriate the amount already received by him pursuant to the interim order first towards interest, then towards costs and the balance towards principal as on the date of withdrawal of the amount …..” 14. It could thus be seen that a distinction is seen drawn in respect of payments made pursuant to interim order, firstly by specifying that the appropriation will be subject to the decision in the appeal and then, by holding that if the appeal is in favour of the decree holder, he would be entitled to appropriate the payment in the manner indicated above. 15. In view of the above authoritative pronouncement by a Constitution Bench of the Hon'ble Supreme Court specifically dealing with the issue at hand, this Court cannot, but follow the said dictum. In the circumstances, this Court finds little merit in the instant Revision Petitions. As already indicated, there is no quarrel before this Court amongst the parties that if the appropriation as sought to be made by the petitioners/judgment debtors are to be eschewed, reopening the E.P by virtue of the impugned orders would not suffer from any illegality or infirmity, warranting any interference in the instant Revision Petitions. Resultantly, all Revision Petitions would stand dismissed.