Union of India vs V.T. Velu

Huluvadi G. Ramesh, J.—The Union of India by its Secretary to Defence Ministry is before the Court seeking to quash the order passed by the Court below on 13-9-2007 - Annexure-M in Ex. Case No. 1623 of 1999 and to dismiss the same. Heard the Counsel representing the parties.

The question is with regard to awarding interest by the Reference Court/the Appellate Court on solatium in respect of the land acquired. In the case on hand, the Reference Court finally passed an award during June 1982. Thereafter, matter was taken in appeal for enhancement. The Trial Court finalized the matter during August 1991. It appears, thereafter the State has taken up the matter in appeal to the Apex Court where while modifying the compensation awarded which was fixed at Rs. 5/- per sq. ft., it has fixed the value at Rs. 1.50 lakhs per acre. According to the petitioner-Estate Officer, the award though includes solatium on the market value at 30% but as laid down in the case of Sunder Vs. Union of India, , entitlement for interest on solatium whether it is claimed or otherwise, interest is awarded or not, claimant is entitled for interest from the cut of date fixed in Sunder''s case and not beyond. However, according to the respondent''s Counsel, already the Reference Court had awarded interest even on solatium as on the date of award, as such award is passed including interest on solatium for which claimant is entitled from the date of award. To contend now that claimants are not entitled for interest on solatium for the period prior to the decision in Sunder''s case is untenable.

Counsel for the petitioner has referred to Sunder''s case wherein the Constitution Bench of the Apex Court has dealt with reference to the compensation awarded in respect of a land acquisition case and on the liability to pay interest on solatium on account of compulsory acquisition as per Sections 23(2), 27 and 34 of the Land Acquisition Act, 1894, fixing interest to be paid at 9% on solatium for the first year and thereafter, at 15% p.a. subsequently. It is submitted, Sunder''s case clarified the position as to payment of solatium i.e., with regard to interest on the compensation awarded and that compensation includes solatium to be paid from the cut of date fixed i.e., from the date of rendering judgment in the said case on 19-9-2001. Also taking me through para. 44 of the judgment in the case of Gurpreet Singh Vs. Union of India (UOI), , which is subsequently rendered by the Constitution Bench, it is submitted, it is clarified that interest on solatium can be claimed only in pending executions and not in closed executions and the Execution Court will be entitled to permit its recovery from the date of judgment in Sunder''s case i.e., 19-9-2001 and not for any prior period. It is also further clarified that this will not entail the decree-holder to any re-appropriation or fresh appropriation. Accordingly, it is contended that claimants are not entitled for interest on solatium from the date of decree and it is rather from the date of clarification issued in Sunder''s case on 19-9-2001.

Learned Counsel has also relied upon an unreported judgment of this Court in W.P. No. 50679 of 2012 decided on 4-9-2013 in respect of the same petitioner wherein the learned Single Judge of this Court referring to Sunder''s case as well as Gurpreet Singh''s case, opined that the Apex Court has clarified that interest at 9% on solatium is payable but landowners are not entitled for interest on solatium prior to the judgment in Sunder''s case i.e., 19-9-2001. Accordingly, it is contended, as a matter of clarification, the Apex Court itself has held that interest on solatium could only be from the date of judgment in Sunder''s case and not earlier to that.

However, Counsel for respondents 2 to 4 referring to the judgment of the Apex Court in Mehrawal Khewaji Trust (Regd.), Faridkot and Others Vs. State of Punjab and Others, , contended that interest has to be granted on aggregate value of compensation including solatium and additional market value. It is also held in para. 18 of the said judgment that claimants would be entitled for interest on solatium and additional market value if the award of the Reference Court or that of the Appellate Court does not specifically refer to the question of interest on solatium and additional market value or where the claim had not been rejected either expressly or impliedly.

It appears even the subsequent judgment of the Supreme Court in Mehrawal Khewaji Trust''s case referred above clarifies the position for entitlement of interest on solatium and additional market value but what is noted is, nothing has been stated as to the cut of date fixed in Sunder''s case to seek interest on solatium. In this regard, there is no further interpretation made in Mehrawal Khewaji Trust''s case.

However, in the case of Chhanga Singh and Another Vs. Union of India (UOI) and Another, , referring to Sunder''s case as also Gurpreet Singh''s case, the Apex Court has observed that as per Sunder''s case, the Execution Court will be entitled to permit recovery of interest on solatium from the date of judgment in Sunder''s case and not for any prior period i.e., 19-9-2001 and this position has been clarified in exercise of power under Articles 141 and 142 of the Constitution of India, with a view to avoid multiplicity of litigation on this question.

Thus, as clarified by the Constitution Bench, the market value includes compensation awarded on the land plus solatium plus additional market value. However, so far as payment of interest on solatium is concerned, it is to be from the date of rendering judgment in Sunder''s case on 19-9-2001. In that view of the matter, the contention of the respondents that they are entitled for interest on solatium as awarded by the Reference Court i.e., from the date of award of the Reference Court or Appellate Court is untenable. Claimants would be entitled for interest on solatium from 19-9-2001 onwards and the same has to be calculated and paid by the petitioner. Petitioner is directed to submit calculation for payment of interest on solatium as per the judgment rendered in Sunder''s case to the Execution Court within a month from the date of receipt of this order and to deposit the compensation within three months. It is needless to say that respondents are entitled for notice on such statement of calculation/payment.

Petition is disposed of.