Gokul Narayan vs Urban Improvement Trust and Another

K.C. Agrawal, C.J.—This revision has been preferred by Gokul Narayan Arora, whose land was acquired under the Rajasthan Urban Improvement Trust Act, 1959 for construction of a road by means of a notification u/s 52(1) of the said Act issued on 12-8-1965 The possession of the land was taken by the State Government on 22nd June 1965. Proceeding for determination of compensation was thereafter initiated u/s 53 of the Rajasthan Urban Improvement Trust Act, 1959 (hereinafter referred to as the Act). On 30th June 1976, the Additional Collector, Jodhpur determined the market value of the land at Rs. 67,276.82 and for the house which was standing on the land acquired at Rs. 3423.00. The Addl. Collector Jodhpur also held that interest would be payable on the quantum of compensation determined w.e.f. 22nd June 1965, i.e., the date of vesting of the property in the State of Rajasthan till the date of payment.

Against this judgment of the Addl. Collector, two appeals were filed-one by the State and the other by the claimant-Gokul Narayan. On 27-1-1978, the compensation was raised by Rs. 2 per sq. ft. The petitioner thereafter filed a revision in the High Court, which was allowed and the case was remanded with the direction that the compensation be determined afresh. Upon redetermination, the petitioner was awarded compensation at the rate of Rs. 11.50 per sq. ft. He was still not satisfied, therefore, he filed revision no. 158 of 1986 in this court.

In the revision, this court considered the effect of Rajasthan Urban Improvement (Amendment) Ordinance, 1987. In this ordinace, Section 60-A was inserted in the principal Act which makes transitory provisions for pending matters relaing to acquisition of land. Sub-sections (2) and (6) of Section 60-A are as under:

(2) the amount of compensation or interest or that payable for any other reason shall in a matter pending on the date of commencement, be payable under and in accordance with the provisions of the Land Acquisition Act and the money paid prior to the date of commencement shall be deducted from or adjusted against the said amount.

(6) An appeal filed u/s 54 or Section 56 or a dispute referred u/s 55 or Section 59 and pending on the date of commencement shall be decided having regard to the provisions of the Land Acquisition Act.

The revision was allowed and the District Judge was directed to decide the appeal in accordance with the principal laid down in Bhag Singh and Others Vs. Union Territory of Chandigarh through the land acquisition collector, Chandigarh,

By the time, the appeal came up for hearing before the District Judge in pursuance of the remand order, the Supreme Court in Union of India (UOI) and Another Vs. Raghubir Singh (Dead) by Lrs. Etc., over-ruled Bhag Singh (Supra) according to which compensation had to be redetermined as per direction of the Supreme Court. The relevant observations of the Supreme Court are quoted below:

In the result we overrule the statement of the law laid down in State of Punjab Vs. Mohinder Singh and Another, and Bhag Singh and Others Vs. Union Territory of Chandigarh through the land acquisition collector, Chandigarh, and prefer instead the interpretation of Section 30 (2) of the Amendment, Act rendered in K. Kamalajammanniavaru (Dead) by Lrs. Vs. Special Land Acquisition Officer,

The District Judge noted the fact of Bhag Singh (Supra) having been over-ruled in accordance with which, the High Court directed him to decide the appeal. In the appeal, the appellant (present petitioner) raised two contentions, one of which was that the solatium should have been awarded to him at the rate of 30 percent per annum instead of 15 and also that interest u/s 28 should have been 12 percent. In Bhag Singh''s case (Supra), the Supreme Court held that amended Land Acquisition Act applied to all acquisitions pending. This, however, was over-ruled by the Supreme Court by holding:-

The appeal to the High Court or the Supreme court, in which the benefit of the enhanced solatium is to be given, is confined to an appeal against an award of the Collector or of the court rendered between 30th April 1982 (date of introduction of bill) and 24 Sept. 1984 (date of its passing.)

Before the District Judge, the argument of the petitioner was that he was entitled to adjust the interest which had been paid by way of compensation. The petitioner submitted that he was entitled to adjust the sum of Rs. 1,18,760 paid on 7-3-77 and sum of Rs. 1,23,000 paid on 10-12-87 towards interest and the amount which is deducted by way of interest would again to payable by the Slate of Rajasthan towards compensation to them This plea was negatived by the District Judge. Against the rejection of the plea of adjustment of interest out of the compensation, the present revision has been filed.

From what I have noted above, it appears to me that the decision in Bhag Singh (Supra) having been over-ruled by the Supreme Court by its decisions rendered in Raghuvir Singh (Supra), the petitioner was not entitled to solatium at the rate of 30 percent and interest at the rate of 12 percent. This is in addition to the ground that the principle of adjustment enshrined in Section 60 of the Contract Act does not apply to the proceeding under the Land Acquisition Act. Section 60 of the Contract Act lays down the right of a creditor to adjust the amount paid by the debtor towards the interest on the principal amount due from the latter and the principle behind this section does not apply to a case other than one where the parties are debtors and creditors. In such a case, the debtor is liable to pay the interest as well as the principal and if he does not specify that the amount paid by him be adjusted towards principal, the creditor has a right to adjust it towards interest due and that such an adjustment is valid in law. The case of interest payable u/s 28 of the Land Acquisition Act does not fall in at par with the liability of the debtor to pay principal to the creditor. Section 28 is discretionary with the court and that it can awarded by the Land Acqusition Officer and that which is found due by the Addl. District Judge in reference. It does not incorporate the principle on which Section 60 of the Contract Act is founded. Apart from the fact that awarding of interest is not compulsory for the court dealing with the compensation, there is no provision under the Land Acquisition Act, which justifies appropriation or adjustment of a part of the amount paid as compensation towards the interest. Each claim is separate from the other. Compensation is paid for the land acquired in accordance with the market value whereas interest is payable u/s 28 on the excess sum which is awarded. The rights of a person, whose land is acquired under the Land Acquisition Act, is distinct and cannot be mingled or compared with the rights of a creditor.

learned Counsel for the petitioner argued that two sums of money, i.e. Rs. 1,18,760 paid 7-3-1977 and Rs. 1,23,000 paid on 10-12-1987 should have been adjusted towards interest but the District Judge did not allow him to do so and held that the amount paid towards compensation could not be adjusted towards interest. In support of his contention, he relied on the decisions in Beninson and Ors. v. Shiber AIR 1946 PC 145 Meka Venkatadri Appa Rao Bahadur Zamindar Garu and Ors. v. Raja Parthasarathy Appa Rao Bahadur Zamindar Garu 1922 PC 233 and Orientel Insurance Co., Ltd. v. Smt. Harku Devi and Ors. 4 1990 CCR 682.

The decisions given in the above cases are distinguishable and are not applicable to the controversy in question.

Furthermore, in a revision u/s 115 of the Code of Civil Procedure, the jurisdiction of this Court is confined only to the correction of an order where the court below has acted illegally or with material irregularity or has refused to exercise jurisdiction vested in it. In the present case, at the most it can be said that the court below acted erroneously in law but an erroneous decision on a question of fact or law does not warrant and justify interference u/s 115 of the Code of Civil Procedure.

In view of what has been discussed above, the revision has no force and it deserves to be dismissed.

Consequently, the revision is dismissed with costs.