Mathunni Mathai vs State of Kerala

P. Shanmugam, J.—Decree holder and the Petitioner in E.P. before the 1st Additional Sub Judge is the revision Petitioner. The executing Court rejected the application for realisation of the balance amount due. The revision is against this order.

Petitioner obtained a decree dated 12th March 1985 before the Sub Court for an enhanced market value of the property acquired from him. The decree was confirmed in appeal, L.A.A. No. 237/85. Besides the High Court ordered that the Petitioner is entitled to the statutory benefit conferred by the Land Acquisition (Amendment) Act, 1984. The matter was taken up before the Supreme Court. The Civil Appeal was dismissed by the judgment, dated 25th April 1995 Mathunni Mathai v. H.O.C. Ltd. 1995 (1) KLT (S.C.).

The Petitioner was awarded an enhanced compensation of Rs. 53,958.26 by the reference Court. The Respondents made two payments, viz. Rs. 78,016.63 and Rs. 87,540 totalling Rs. 1,65,555.63. The Petitioner in the present execution petition, E.P. No. 546/95, claims a further sum of Rs. 72,612.39.

The case of the Petitioner is that he is entitled to appropriate the amount deposited in the Court towards interest, cost, solatium and principal at his choice. It is his further case that the judgment rendered by the Supreme Court is binding on both the parties including the executing Court. According to him, even though the judgment of Mathunni Mathai''s case 1995 (1) KLT 784 (S.C.) was overruled in Prem Nath Kapur and Another Vs. National Fertilizers Corpn. of India Ltd. and Others, the latter decision is not applicable to the Petitioner''s case.

Learned Counsel appearing on behalf of the 2nd Respondent-company had filed objections before the executing Court and reiterated the position that the amount already deposited is in excess of the actual amount due to the decree holder. Learned Government Pleader who appeared on behalf of the State supports the order of the executing Court relying on the latter decision of the Supreme Court.

I have heard the counsel. Paragraph 8 of the present execution petition sets out the details of the amount due which are as follows:

Details of amounts due:

Rs.

Enhanced market value .. 53,958.26

Solatium at 30 per cent .. 16,187.00

Addl. solatium at 15 per cent .. 15,709.97

_____________

Total .. 85,855.23

Interest at 9 per cent from

20-10-1981 till 20-10-1982 .. 7,726.97

Interest at 15 per cent from

20-10-1982 till 15-1-1988 .. 57,390.47

Total cost .. 1,500.00

____________

Total .. 1,62,472.67

Deposit on 15-1-1988 .. 78,015.63

__________

Balance .. 84,457.04

Interest at the rate of 15 per cent

from 15-1-1988 till 3-8-1991 .. 46,011.47

____________

Total .. 1,30,468.51

Payment on 3-8-1991 .. 87,540.00

_____________

Balance .. 42,928.51

Interest thereon from 3-8-1991

till 3-6-1995 at 15 per cent

per annum .. 24,683.39

_________

.. 67,612.39

Cost incurred for the conduct of

civil appeal in the Supreme

Court of India .. 5,000.00

_________

Total .. 72,612.39

_________

A perusal of the claim shows that the Petitioner has worked out interest on solatium and additional solatium. Initially a deposit of Rs. 78,015.63 was made on 15th January 1988. After deducting this amount from the total amount due to the Petitioner, the balance was stated to be Rs. 84,457.04. Again interest was calculated at the rate of 15 per cent for the said amount. The second payment of Rs. 87,540 was made on 3rd August 1991. On the balance amount interest was claimed at the rate of 15 per cent. The executing Court found that even after making two payments and appropriating the said amount the Petitioner is making a claim of Rs. 72,612.39 as on 4th July 1995 with subsequent interest thereon at the rate of 15 per cent per annum. This claim cannot be sustained and it would cause a heavy loss to the Government. The executing Court also found that L.A. Officers without making deposit of the full decree amount to record full satisfaction wilfully or not they will pay only part of the amount which are appropriated towards interest, cost, solatium and additional market value. Thereafter the claim is kept alive to make further claims. According to learned Judge in this case the decree holder is not entitled to get any balance amount as claimed in the execution petition.

In Mathunni Mathai''s case 1995 (1) KLT 784 (S.C.) while deciding the question whether the amount deposited is to be adjusted towards the principal amount due first or against the interest and other charges held that if the judgment-debtor intends that the running of interest should cease then he must intimate in writing and ensure that it is served on the decree holder. In the absence of any intimation as required by Sub-rule (2) and indication of manner of appropriation, the payment could not be deemed to have been appropriated towards principal unless the decree holder admits it to be so. The said ruling of the Supreme Court and the principle underlying were overruled in Prem Nath Kapur and Another Vs. National Fertilizers Corpn. of India Ltd. and Others, . The Supreme Court held that the ratio in Meghraj case (1996) 2 S.C.C. 274 is equally inapplicable to the appropriation of debt under the Land Acquisition Act and the same is applicable only to a debtor and creditor in an ordinary civil suit governed by the provisions of the Code of Civil Procedure. The Supreme Court held that the applicability of CPC to the proceedings under the Act stands excluded u/s 53 of the Land Acquisition Act which shall prevail.

The latter decision of the Supreme Court also held that compensation u/s 23(1), by necessary implication, excludes the liability to pay interest on solatium. So also no solatium is payable on additional amount payable u/s 23(1-A) and no interest is payable on additional amount u/s 23(1-A) on other components except on compensation or excess compensation or part thereof determined u/s 23(1) of the Act. In the latter decision the Supreme Court answered the basic question whether the claimant is entitled to appropriate from the principal amount of compensation determined u/s 23(1) towards costs, and then towards interest payable under either Section 34 or Section 28 or after Amendment Act came into force with effect from 24th September 1984, additional amount u/s 23(1-A) in the following words:

The liability to pay interest ceases on the date on which the deposit into Court is made with the amount of compensation so deposited .... When the deposit is made towards the specified amounts, the claimant/owner is not entitled to deduct from the amount of compensation towards costs, interest, additional amount u/s 23(1-A) with interest and then to claim the total balance amount with further interest.

Their Lordships expressed their reasoning in the following words:

It is clear from the scheme of the Act and the express language used in Sections 23(1) and (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, though made at different levels, the liability to pay interest thereon arises from the date on which the quantification was so made but, as stated earlier, it relates back to the date of taking possession of the land till the date of deposit of interest on such excess compensation into the Court. Equally, when fhe appellate Court u/s 54 further enl ances the compensation, interest is payable on such excess amount determined u/s 23(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 coterminous with the payment of the amount u/s 34 from the date of taking possession till date of payment or deposit or u/s 28 or Section 54 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(1-A).

Thus we hold that the liability to pay interest on the amount of compensation determined u/s 23(1) continues to subsist until it is paid to the owner or interested person or deposited into Court u/s 34 read with Section 31. Equally, the liability to pay interest on the excess amount of compensation determined by the Civil Court u/s 26 over and above the compensation determined by the Collector/Land Acquisition Officer u/s 11 subsists until it is deposited into Court. Proprio vigore in case of further enhancement of the compensation on appeal u/s 54 to the extent of the said enhanced excess amount or part thereof, the liability subsists until it is deposited into Court. The liability to pay interest ceases on the date on which the deposit into Court is made with the amount of compensation so deposited.

(emphasis added)

In this case it is not possible to discern from the facts set out or from the execution petition as to how the quantification has been done. From the provisions of the Land Acquisition Act the award would consist of the following components: (a) the compensation determined u/s 23(1), (b) solatium on the market value determined u/s 23(2), as additional sum for compulsory nature of acquisition, and (c) payment of interest on the amount of compensation u/s 11, on excess or part thereof u/s 26 awarded by Court from the date of taking possession till date of deposit into the Court at the rates specified under the provisions of Sections 34 and 28 respectively, (d) additional amount at 12 per cent per annum u/s 23(1-A) shall be paid or deposited from the date of notification u/s 4(1) till the date of award. The liability to pay interest under Sections 34 and 28 on the amount of compensation or on excess compensation is from the date of the award and the decree. Petitioner has set out the details of the amount due in E.P. No. 546 of 1995 as follows (earlier E.P.):

Details of amount due: Rs. Total market value determined by the Court .. 1,58,691.36 Amount payable u/s 23(1-A) at the rate of 12 per cent per annum from 4-11-1980 till 19-10-1981 .. 18,249.50

Solatium at the rate of 30 per cent on the enhanced market value awarded by the Court .. 16,187.00

Addl. solatium of 15 per cent on the amounts already given by the Land Acquisition Officer .. 15,709.97

Enhanced market value award by the Court .. 53,958.26 _________________

Total excess thus payable to the decree holder .. 1,04,104.73

Rs. Interest thereon for one year from 21-10-1981 till 21-10-1982 @ 9 per cent per annum .. 9,369.42 Interest thereon from 21-10-1982 till 5-4-1988 @ 15 per cent per annum .. 85,235.71

Total .. 1,98,709.86 Payment of 5-4-1988 .. 78,015.63 ______________

Balance .. 1,20,694.23 Interest thereon from 5-4-1988 till 5-11-1989 @ 15 per cent per annum .. 28,719.32 ______________

.. 1,49,413.55 Cost decreed .. 500.00 Execution cost allowable .. 359.00 ________________

Total .. 1,50,272.55 _________________

The Petitioner has added to the enhanced compensation of Rs. 53,958.26 awarded by the Court interest at 12 per cent u/s 23(1-A) solatium at the rate of 30 per cent, and at the rate of 15 per cent, totalling Rs. 1,04,104.73. Thereafter claimed interest on this amount at 9 per cent and 15 per cent i.e. Rs. 9,369.42 and Rs. 85,235.71 totalling Rs. 94,605.13. After deducting the deposit of Rs. 78,015.63 further interest at 15 per cent claimed on Rs. 1,20,694.23. Thus the claim of interest on 12 per cent and solatium is not permissible under law. This E.P. was closed. Even in the present E.P. the same error is committed. The quantification has to be made at different levels and different periods.

The Supreme Court in Prem Nath Kapur and Another Vs. National Fertilizers Corpn. of India Ltd. and Others, referred above categorically held that "when the deposit is made towards the specified amounts, the claimant/ owner is not entitled to deduct from the amount of compensation towards costs, interest, additional amount u/s 23(1-A) with interest and then to claim the total balance amount with further interest". The Petitioner has precisely made such a claim. Section 3(1) of the K.L.R. Act is dated 4th November 1980. The Awarding Officer determined the compensation of Rs. 1,04,733.10. The 2nd Additional Sub Judge in L.A.R. 120/82 dated 12th March 1985 granted additional compensation of Rs. 53,958.26 with 15 per cent solatium and 4 per cent interest from 21st October 1981 and proportionate cost. This was confirmed in L.A.A. No. 237/85 dated 27th August 1986. However High Court allowed additional amount at 12 per cent on the market value from the date of publication of Section 4(1) notification to the date of award, 30 per cent solatium (excluding the 12 per cent additional amount) plus 9 per cent and 15 per cent on the excess amount awarded. In the first E.P. 546/95 interest on 12 per cent additional amount has been calculated. In the present E.P. though that was omitted interest on solatium had been calculated.

Apart from the fact that Petitioner cannot claim interest on solatium, cannot also appropriate towards interest and cost. If the amount calculated towards additional amount and solatium is excluded the payment is more than sufficient to meet the awarded amount. Hence the finding that there is excess execution is correct.

In Vasudev Dhanjibhai Modi Vs. Rajabhai Abdul Rehman and Others, the Supreme Court held that when the decree is made by a Court which has no inherent jurisdiction to make it, objection as to its validity may be raised in an execution proceeding if the objection appears on the face of the record. In Bhavan Vaja and Others Vs. Solanki Hanuji Khodaji Mansang and Another, the Supreme Court held that it is true that an executing Court cannot go behind the decree under execution. But that does not mean that it has no duty to find out the true effect of that decree. Applying the ratio the Petitioner who seeks to execute the decree of the Sub Court dated 12th March 1985 and the High Court on 28th July 1986 and seeks to appropriate towards interest and cost on solatium the executing Court is entitled and bound to follow the decision of the latter Supreme Court. As per the law declared the effect of the latter decision is that provisions of Section 53 shall prevail over CPC and that the liability to pay interest ceases on the date on which the deposit into Court is made. The Supreme Court also held that there is no liability to pay interest on solatium and additional solatium. Thus the executing Court is bound to apply the principles and the law laid down by the Supreme Court in reference to interest on solatium and manner of appropriation. I do not find any illegality in the said order. Hence the revision petitition fails and it is dismissed.