Huda vs Devinder Kaur

V.K. Jhanji, J.—This order of mine shall dispose of Civil Revisions No. 2842, 2843, 1826, 1827, 3273 to 3278, 3280 to 3282 of 2001 as all these revision petitions contain similar question of law and facts. Facts have been taken from Civil Revision No. 2842 of 2001.

Land of Respondent-Devinder Kaur situated in Village Sukhrali Tehsil and District Gurgaon was acquired vide notification No. LAC (P)-NTLA/76-7367 dated 10.12.1976 issued u/s 4 of Land Acquisition Act by Urban Estate Department of Haryana Government. Award No. 11 was pronounced on 5.10.1978. On reference to the Court, amount of compensation was enhanced on 22.7.1980. Regular First Appeal was preferred in this Court wherein amount of compensation was further enhanced along with solatium and interest. Respondent filed an application and got the judgment passed by this Court modified to the extent of grant of solatium at the rate of 30 per cent and interest at the rate of 9 per cent per annum for the first year of acquisition and 15 per cent per annum thereafter. Respondent filed execution applications in 1983 and again in 1986. Application filed in 1983 was dismissed as partly satisfied whereas the one filed in 1986 was got dismissed as withdrawn because the Respondent wanted to take benefit of enhanced rate of solatium and interest. Present application came to be filed on 16.1.2001 wherein Respondent claimed balance due compensation amounting to Rs. 96,942.20.

Upon notice, Petitioner herein filed calculations made by its officials and filed Form-D to show that a sum of Rs. 40,759.55 was deposited by Land Acquisition Collector in the year 1987 and it was withdrawn by the claimant i.e. Respondent herein. The balance amount was deposited by the Petitioner which was released without security by the Additional District Judge. Gurgaon on 3.4.2001.

On 2.5.2001. counsel for Respondent moved an application for release of balance payment as according to her, calculations submitted by Land Acquisition Collector were wrong. It was contended that Land Acquisition Collector has not calculated interest on solatium and the calculation sheet prepared was only in respect of Rs. 2/- which was enhanced by the High Court though it was incumbent upon the Land Acquisition Collector to prepare calculations at the rate of Rs. 19/- per square yard which was awarded by the High Court while setting aside the Award of reference Court who had awarded compensation at the rate of Rs. 17/- per square yard. It was further contended that the Land Acquisition Collector while preparing calculations at the time of Rs. 19/- per square yard, should have granted statutory benefits and then should have deducted the payments already made to the decree-holder, appropriating the same firstly towards costs, interest, additional amount, solatium and lastly towards principal amount. Petitioner herein filed reply to the application denying the averments of the claimant and reiterating that the calculations prepared by it are correct as per law.

Executing Court vide its order dated 10.5.2001 allowed the application holding the claimant i.e. Respondent herein was held entitled to get interest on the amount of solatium and to appropriate the amount already paid or deposited in Court, firstly towards cost, then towards interest, then towards solatium and in the last towards principal amount. Hence the present civil revision by the State of Haryana.

Similarly, in other revision petitions, orders in regard to calculations and appropriation of the amount deposited and also interest on solatium have been passed which are impugned herein.

On perusal of the records of all the civil revisions, I find that three important questions of law arise for adjudication. They are:

(i) Whether the claimants/land owners are entitled to claim interest on solatium ?

(ii) Whether interest is to be calculated on the basis of enhancement order by Reference Court/High Court or the Apex Court i.e. only on the excess amount of compensation or the same has to be calculated after deducting the amount of compensation already paid ?

(iii) Whether claimants/land-owners do have the right to appropriate the amount deposited by the Land Acquisition Collector as per their own discretion or the same has to be paid in view'' of the Scheme of the Act?

Q. No. 1.

Learned Advocate General, Haryana fairly conceded that this question has already been settled by the Hon''ble Apex Court in case titled Sunder v. Union of India and Ors.,1 (2001)129 P.L.R. 860 S.C, wherein Hon''ble Supreme Court has laid down the law that the person entitled to compensation awarded is also entitled to get interest on the aggregate amount including solatium. In view of the law laid down by the Hon''ble Supreme Court, this question stands answered accordingly.

Q. No. 2.

Learned Advocate General, Haryana contended that Executing Courts while ordering calculations to be made on the basis of enhanced compensation for the purpose of interest are committing illegalities because the amount already paid on account of compensation has to be deducted while making calculations for payment of the excess compensation ordered by the Reference Court/High Court or Apex Court. He further contended that interest ceases to accrue on the payment already made and as such total enhanced amount cannot be taken as the basis for making payment of the interest. He further contended that Executing Courts are allowing to adjust the amount already paid towards interest which is totally illegal. In this regard, he placed reliance upon Devinder Nath Kataria v. Haryana State through LAC (P), Panchkula," 1993 PLJ 716 and Improvement Trust, Jind v. Mohinder Kumar, 1990 PLJ 205.

On the other hand. Mr. A.K. Chopra. Senior Advocate contended that once the Reference Court/High Court or Apex Court has held that the compensation awarded by the Collector is inadequate and that is ordered to be enhanced at the rate so determined by the Courts on the basis of valuation brought before them which was found prevalent in the area where land was acquired. Land Acquisition Collector is duty bound to re-calculate the entire amount afresh and not to prepare the calculations on the basis of only enhanced amount of compensation after deducting the compensation already paid.

Mr. Shailendra Jain, Advocate appearing on behalf of some of the Respondents in connected revisions, contended that once the amount of compensation has been enhanced either by the Reference Court or by High Court or Supreme Court, amount of compensation has to be determined in view of Section 23 of Land Acquisition Act which provides that the market value of the land at the date of publication of notification u/s 4 shall be taken into consideration for the purpose of grant of compensation. He contends that once the Court finds that the compensation granted by the Collector is inadequate and it enhances further the price of land so determined, calculations have to be made afresh on the basis of the price determined by the Court from the date of notification u/s 4 and not on the enhanced amount alone.

After hearing the Learned Counsel, 1 find that argument arised by Advocate General, Haryana carries substance.

The expression interest in its wide sense is the return or compensation for the use and retention of another''s money. In its narrow sense, it means the amount which has contracted to pay for the use of borrowed money. Under the Land. Acquisition Act, a specific provision has been made u/s 28 of Land Acquisition Act, 1894 which empowers the Court to direct the Collector to pay interest on excess compensation. The said section reads thus:

lf the sum which, in the opinion of the Court, the Collector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation, the Award of the Court may direct that the Collector shall pay interest on such excess at the rate of (nine per centum) per annum from the date on which he took possession of the land to the date of payment of such excess into Court:

Provided that the Award of the Court may also direct that where such excess or any part there of is paid into Court after the date of expiry of the period of one year from the date on which possession is taken, interest at the rate of fifteen percentum per annum shall be payable from the date of expiry of the said period of one year on the amount of such excess or part thereof which has not been paid into Court before the date of such expiry.

It is clear from the reading of above quoted Section that the Scheme of the Act itself provides that the interest in cases of enhancement has to be paid on ''such excess" meaning thereby that interest has to be calculated only on the amount which Court has enhanced excluding the amount awarded by the Collector if already paid. The manner of calculating interest in such a case came up for consideration before a Division Bench of Delhi High Court in case Union of India v. Harbans Lal Jain, ILR (1977) Del 330 wherein it was held ;-

On a plain reading of the Section, in our opinion, interest is payable only on the excess amount awarded by the Court. This means that if the High Court and Supreme Court further increases the compensation, interest will be payable respectively on the excess amounts awarded by the High Court and the Supreme Court. It will be wholly incorrect way of calculating the interest by first fixing the market value on the basis of rate ultimately fixed by the Supreme Court and then working out six per cent interest on the compensation for the entire period from the date of possession. This would not be only unjust but an incorrect way of calculating interest. If no amount has been paid by the Land Acquisition Collector till the final decision by the High Court of Supreme Court, then, of course, the calculation as sought to be made by Harbans Lal Jain would be justified. If. however, payments have been made, as in this case, from time to time as and when each successive Court enhanced the compensation then to pay-interest even on amounts already in the hand of party concerned, in the present case Harbans Lal Jain, would be inequitable and incorrect.

This question also came up for consideration before this Court in Improvement Trust, Jind case (supra) wherein Hon''ble J.V. Gupta, the then Acting Chief Justice held that when once the principal amount as determined by the Tribunal, on reference, was deposited, further interest thereon will cease. The view taken in Improvement Trust''s case was approved by Division Bench of this Court in Devinder Nath Kataria''s case (supra) wherein it was held that once the principal amount, as determined by the Tribunal or on reference, was deposited, further interest thereon will cease.

In Prem Nath Kapur''s case (supra), the question of interest payable on excess amount again came under scrutiny and their Lordships of the Supreme Court held that the liability to pay interest is only on the excess amount of compensation determined u/s 23(1) and not on the amount already determined by the Land Acquisition Officer u/s 11 and paid to the party or deposited into the Court or determined u/s 26 or Section 5 and deposited into the Court.

In view of the law laid down by this Court in Devinder Nath Kataria''s case and Improvement Trust, Jind (supra) and Apex Court in Prem Nath Kapur''s case (Supra), it is clear that while preparing the calculations on the basis of enhanced amount of compensation ordered by the Reference Court or High Court/Apex Court, principal amount if any deposited earlier shall stand deducted and the interest would be calculated only on the excess amount awarded by the Court and not on the entire amount so held by the Court as price of the land because interest on the principal amount already deposited ceases to accrue and that part of claim having been received by the land-owner stands satisfied which cannot be re-opened for giving benefit of the interest.

It. therefore, found that the amount earlier paid cannot be adjusted towards the interest because that was paid towards the compensation by the Collector as determined by him or by the Court and in case amount is further enhanced by the Reference Court or the High Court/Supreme Court, in that situation claimant could not be allowed to turn around and to say that the amount received earlier will be adjusted towards interest and not towards the principal amount of compensation.

This question stands answered accordingly.

Q. No. 3

This question was hotly contested by counsel for the parties.

Learned Advocate General, Haryana argued that the method of appropriation being adopted by the Courts in ordering that the amount deposited by the Land Acquisition Collector shall be firstly adjusted towards costs, then interest, then towards solatium and in the last towards principal amount, is wholly erroneous. In this regard, he placed reliance on Prem Nath Kapur and Another Vs. National Fertilizers Corpn. of India Ltd. and Others, . He further contended that the Executing Court has wrongly relied upon the cases titled Mathunni Mathai v. Hindustan Organic Chemical , (1999)111 P.L.R. 596 (S.C), M/s. Industrial Credit and Development Syndicate Now Called I.C.D.S. Ltd. Vs. Smt. Smithaben H. Patel and Others, and judgment of this Court in case titled Bank of India Vs. Delhi Faridabad Textiles Pvt. Ltd. and Others, to hold that decree-holders are entitled to appropriate the payment already made by the judgment debtor firstly towards interest and costs and thereafter the principal amount. He further contended that the judgments relied upon pertain to civil litigation between the parties and none of the judgments is relating to Land Acquisition Act whereas judgment in Prem Nath Kapur''s case (supra) which clearly clinches the issue, has been overlooked by the Executing Court without giving any reason.

On the other hand, Mr. Shailendra Jain, Advocate appearing on behalf of the Respondents in connected Revision Petitions No. 1826 and 1827 of 2001 contended that the law laid down in Prem Nath Kapur''s case (supra) is not a good law. He further contends that execution has to be carried out as per provisions of the CPC and for that the provisions of Order XXI Rule 1, CPC are applicable to the land acquisition cases. He further contended that when the Land Acquisition Collector deposits the amount of compensation without giving his own appropriation as to the mode of payment as required u/s 59 of the Contract Act, decree-holder/claimant becomes entitled to appropriate the amount in view of Section 60 of the Contract Act. He also contended that in case the amount is deposited without being appropriated, claimant/decree-holder is always at liberty to refuse the acceptance of payment. He contended that in execution of decrees relating to payments, genera! principle of payments as enshrined in the CPC that first the amount deposited has to be adjusted towards costs, then interest and then principal, is applicable. In this regard, he placed reliance upon Mathunni Mathai''s case (supra) and contended that the law laid down by the Apex Court in this case is the correct law and the Executing Courts have not committed any illegality in ordering the payment by following the general principle of law in regard to payment of debts. In this regard, he also placed reliance on Manohar Lal and Ors. v. State of Haryana,9 1986 PLJ 86. He further contended that Section 53 of Land Acquisition Act provides that CPC shall apply to the proceedings before Court save in so far as any provision may be inconsistent with any thing contained in this Act and this Act, no mode of payment of execution of Award passed by Court has provided. Therefore, provisions contained in CPC being consistent, shall be applicable in regard to application of general principle of payments of debts as provided under Order XXI Rule 1 of Code of Civil Procedure.

Mr. A.K. Chopra. Senior Advocate appearing on behalf of the Respondent in this civil revision while accepting the argument raised by Mr. Shaailendra Jain, Advocate, contended that general rule of appropriation of payments towards decretal amount is applicable in execution of Land Acquisition Awards. In this regard, he placed reliance upon M/s. Industrial Credit & Development Syndicate now called M/s. Industrial Credit and Development Syndicate Now Called I.C.D.S. Ltd. Vs. Smt. Smithaben H. Patel and Others, He further contended that the manner envisaged under Sections 59 to 61 of the Contract Act is applicable in regard to making of payment and a debtor cannot take refuge of these Sections in cases where he does not appropriate the amount deposited by him for satisfaction of a decree.

Mr. Ashok Aggarwal, Senior Advocate accepted the arguments raised by Mr. Shailendra Jain, Advocate and Mr. A.K. Chopra, Senior Advocate in his case.

Section 31 of Land Acquisition act, 1894 deals with the payment of compensation or deposit of the same in Court. The provisions contained in the said Section are as under:

(1) On making an Award u/s 11, the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the Award and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next Sub-section.

(2) If they shall not consent to receive it, or if there be no person competent to alienate the land or if there be any dispute as to the title to receive the compensation, or as to apportionment of it. the Collector shall deposit the amount of compensation in the Court to which reference u/s 18 would be submitted.

Provided that any person admitted to be interested may receive such payment under protest as to the sufficiency of amount:

Provided also that no person who has received the amount otherwise than under protest shall be entitled to make any application u/s 18:

Provided also that nothing herein contained shall affect the liability of any person who may receive the whole or any part of any compensation awarded under this Act, to pay the same to the person lawfully entitled thereto.

x. xx xxx xxx . xxx

Section 34 of Land Acquisition Act provides payment of interest. The said section reads thus:

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 9 per centum per annum from the time of so talking possession until it shall have been so paid or deposited:

Provided that if such compensation or any part thereof not paid or deposited within a period of one year from the date on which possession is taken, interest at the. rate of 15 per cent per annum shall be payable from the date of expiry of 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.

In addition to it, Section 28 of the Act empowers the Court to issue direction to the Collector to pay interest on excess compensation.

Section 27 empowers the Court to award costs incurred in the proceedings before the Courts.

A reading of Sections 31 and 34 of the Act clearly shows the distinction between the term compensation and interest. The two terms compensation'' and ''interest'' are separately used in the Act. Both of them contemplate different situations and are based on different considerations. Compensation is based on the market value of the land at the time of ''interest'' is provided for the relief to the land-owner from whose possession the land is acquired but compensation is paid after taking possession.

The scheme of the Act is that first the Collector has to pay compensation and then the other reliefs which are mandatory "under the Act like interest and costs. Section 31 clearly provides that the Collector shall pay or deposit the compensation. It nowhere provides that it shall also make the payment of interest while paying compensation or depositing the same in Court. As per the Scheme of the Act, interest has to be calculated after the entire compensation has been paid or deposited in Court, taking into consideration the delay in making the payment and applying the rate of interest thereon. Section 34 which provides for payment of interest does not provide specifically that as and when any amount is deposited by the Collector, firstly that would be adjusted towards the interest having accrued on the unpaid compensation. It provides that the Collector shall pay the amount awarded with interest until it shall have been so paid or deposited meaning thereby that the interest has to be paid after calculating the same on the delay having occurred in payment of the compensation.

Payment of compensation alongwith interest and costs has to be made as per Scheme of the Act which is specifically provided in Sections 31, 34 and 28 of Land Acquisition Act. Argument raised by Learned Counsel for Respondents that Collector is required to appropriate the amount so deposited in view of Section 59 of the Contract Act and in case he does not do so. then the claimant has the right to get the same appropriated in view of Section 60 of the Contract Act and in that eventuality, payment of the amount due has to be made as per mode provided under Order XXI Rule, CPC for paying money under decree is not tenable because Section 53 of Land Acquisition Act provides that CPC shall be applicable to all proceedings before the Court under this Act save in so far as they may be inconsistent with any thing contained in hat.

Applicability of the provisions of CPC to the Land Acquisition Act was examined by the Supreme Court in Prem Nath Kapur''s case (supra) wherein it was held as under:

Section 53 specifically envisages that to the extent of any inconsistency in the provisions of the Act, the applicability of CPC to the proceedings under the Act stands excluded and the provisions of the Act shall prevail.

Provisions of Section 31 specifically provide for making payment of deposit in Court amount of compensation and in that Section, it is no where provided that the Collector has to appropriate the amount at the time of deposit whereas on the other hand, Order XXI Rule i clearly provides that debtor has to appropriate the amount at the time of deposit. Thus, it is clear from the reading of aforesaid two provisions that both are inconsistent with each other. It being so, provision of CPC shall not be applicable in view of Section 53 of the Act to the cases of Land Acquisition Act. Since the provisions of CPC are not applicable and Section 31 provides mode of payment of compensation, claimant/land-owner cannot take benefit of Section 60 of the Contract Act in regard to appropriation of amount deposited by the Collector at his discretion.

Hon''ble Supreme Court in Prem Nath Kapur''s case (supra) also examined the law laid down in Mathunni Mathai''s case (supra) and has held that the said case cannot be taken to have laid down the correct law. The basic question arisen in the present revisions, whether the claimants are entitled to appropriate from the principal amount of compensation determined u/s 23(1) towards costs and then towards interest payable u/s 34 or 24 or then additional amount was considered by the Hon''ble Supreme Court in this case and it was held as under: -

It is clear from the Scheme of the Act and the express language used in Sections 23(1) & (2), 34 and 28 and now Section 23(1-A) of the Act that each component is a distinct and separate one. When compensation is determined u/s 23(1), its quantification, through made at different levels, the liability to pay interest therein arises from the date on which the quantification was so made but, as stated earlier, it relates back to (he date of taking possession of the land till the date of deposit of interest on such excess compensation into the Court. Equally, when the appellate Court u/s 54 further enhances the compensation, interest is payable on such excess amount determined u/s 3(1). In other words, the liability to pay interest arises as and when the compensation is further enhanced and liability to pay interest would be co-terminus with the payment of the amount u/s 34 from the date of taking possession till the date of deposit of such excess amount into the court. The liability to pay interest is only on the excess amount of compensation determined u/s 23(1) and not on the amount already determined by the Land Acquisition Officer u/s 11 and paid to the party or deposited into the court or determined u/s 26 or Section 54 and deposited into the court or on solatium u/s 23(2) and additional amount u/s 23(I-A). xxx xxx xxx xxx xxx

Equally, the right to make appropriation is indicated by necessary implication, by the award itself as the award or decree clearly mentions each of the items. When the deposit is made towards the specified amounts, the claimant-owner is not entitled to deduct from the amount of compensation towards Section 23(1-A) with interest and then to claim the total balance amount with further interest.

In view of the law laid down by Hon''ble Supreme Court in above referred to case, orders under revisions are not sustainable so far as these provide for making appropriation to be adjusted towards principal amount because case law relied upon by the Executing Court do not hold the field. Claimants have no right to appropriate the amount which is deposited strictly in accordance with the Award firstly towards compensation and then the other benefits accruing out of the compensation or to be paid.

Before parting with this judgment, I am constrained to say that Mr. Ramindra Jain, Additional District Judge. Gurgaon should not have decided the matter involved in Civil Revision No. 2842, 2843 of 2001 because his own land and that of his family situated in District Hisar (which is subject matter in Civil Revisions No. 3273 to 3278. 3280 to 3282 of 2001) was also acquired and he was seeking the same relief which he himself adjudicated upon from the Courts at Hissar. Not only this, though he noticed the judgment in Prem Nath Kapur''s case (supra) in his order, yet without giving any reason, over-looked the same deliberately and granted the relief to the claimants while relying upon the judgments which stood dissented/over-ruled by the Apex Court in Prem Nath Kapur''s case (supra). Such an attitude by a Presiding Officer is most undesirable. Presiding Officers of Subordinate Judiciary are duty bound to obey the law laid down by the High Court or Apex Court and are not supposed to settle the matter by taking into consideration their own interest, rather they should refrain from doing so.

On 20.10.2000, Mr. Shailendra Jain, Advocate appearing on behalf of Respondents in C.R. No. 1826 and 1827 of 2001 moved an application seeking permission of the Court to place on record copies of various orders passed by the Executing Courts in other similar cases whereby appropriation by discretion of the claimants was allowed and upheld by this Court in revision petitions. He also sought to place on record copy of order of this Court in Civil Revision No. 3782 of 2000 bearing title State of Haryana and Ors. v. Dalip passed by R.L. Anand, J. on 17.1.2001 upholding the orders of Executing Court allowing the claimant to appropriate the amount at his discretion. In the application, it is pleaded that though in the grounds of revision, copy whereof also placed on record, Prem Nath Kapur''s case (supra) was mentioned but that was not relied upon by this Court. Though it is not appropriate to take on record documents in a case in which judgment has been reserved, yet I think it proper to deal with the plea raised by the Learned Counsel on the basis of order of this Court passed in Civil Revision No. 3782 of 2000 and also various orders of the Executing Courts. Neither in the order of this Court in Civil Revision No. 3782 of 2000, applicability of Prem Nath Kapur''s case (supra) has been discussed nor the Executing Courts though made a reference to the said judgment, gave conclusion as to how the law laid down in Prem Nath Kapur''s case (supra) is not applicable. I may hasten to add here that the law laid down by Hon''ble Supreme Court is the law of land and binding on all Courts in India. Any judgment which holds the field rendered by the Hon''ble Supreme Court cannot be over-looked without going into its applicability to the facts of the case. In the cases in hand, judgment rendered by the Hon''ble Supreme Court has direct bearing and thus the orders of Executing Courts as also the order of this Court in Civil Revision No. 3782 of 2000 do not carry any weight to persuade me not to follow the judgment in Prem Nath Kapoor''s case (supra). Mr. Shailendra Jain, Advocate has also placed on record copy of order passed in SLP (Civil) No. 20139-20140/97 to plead that matter regarding payment of interest on solatium and additional amount has been referred to larger Bench of the Apex Court. In this regard, it is only to be stated that this issue has already been settled by the Constitutional Bench of the Supreme Court in Sunder''s case (supra). Thus, no significance to the order passed in the SLP can be attached.

Accordingly this question is answered in favour of the Petitioner and against the Respondents.

In view of above discussion and the law laid down by Hon''ble Supreme Court in Prem Nath Kapur''s case and Sunder''s case (supra), present civil revisions are allowed, orders impugned herein set aside. The Executing Courts are directed to disburse the amount of compensation in the following manner:

(i) That the claimants shall be entitled to interest on solatium in view of law laid down by Hon''ble Supreme Court in Sunder''s case (supra). (ii) That the interest shall be calculated only on the excess amount of compensation determined u/s 23(1) and not on the amount already determined by the Land Acquisition Officer u/s 11 and paid to the party or deposited into the Court or determined u/s 26 or Section 54 and deposited into the Court. The amount already paid, in so case, shall be adjusted towards the interest accrued on excess compensation.

(iii) That the claimants shall not be allowed to appropriate the amount deposited by the Collector at their discretion and appropriation and payment shall be made strictly in view of the law laid down by Hon''ble Supreme Court in Prem Nath Kapur''s case (supra)

There shall, however, be no order as to costs.