TMI Blog2008 (11) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... (now district Ghaziabad) were requisitioned by the Central Government in 1963 under section 29 of the Defence of India Act, 1962 (for short the `Act'). The said requisitioned lands were subsequently acquired under section 36 of the Act in the year 1965. The Special Land Acquisition officer, Meerut, determined the compensation payable to the respondents in the year 1966 (varying between Rs.2400 and Rs.3625 per bigha by adopting belting method of valuation). Not being satisfied with the compensation determined by him, the respondents sought reference to arbitration under section 37(2) of the Act, for determination of proper compensation. The Central Government appointed different Arbitrators to decide their claims. In one arbitration, an award dated 16.3.1979, was made awarding compensation at the rate of Rs.2.60 per sq.yd with interest at 6% per annum from the date of acquisition till date of deposit. In another arbitration, an award dated 8.9.1986 was made awarding compensation at Rs.2.60 per sq. yd. with solatium at the rate of 30% and interest at 9% per annum on the additional amount from the date of acquisition till date of payment. Not being satisfied with the compensation, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for consideration is whether award of interest by the High Court on the compensation for acquisition of requisitioned property under Defence of India Act, 1962 is impermissible. 5. Section 36 of the Act provides for the manner of acquisition of requisitioned property. Section 37 of the Act deals with determination of compensation for acquisition of requisitioned property. Sub-section (1) thereof which is relevant is extracted below : 37. (1) The compensation payable for the acquisition of any property under section 36 shall be - (a) the price which the requisitioned property would have fetched in the open market if it had remained in the same condition as it was at the time of requisitioning and been sold on the date of acquisition, or (b) twice the price which the requisitioned property would have fetched in the open market if it had been sold on the date of the requisition, whichever is less. Sub-section (2) of section 37 provides for reference of applications for enhancement of compensation filed by a persons interested, to an Arbitrator appointed by the Central Government. Sections 36 and 37 of the Act correspond to sections 30 and 31 of Defence of India Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ari Krishan Khosla and Chajju Ram, the question considered was whether the provisions relating to acquisition of requisitioned land under the provisions of the RAIP Act and DI Act of 1971, were invalid for not providing for payment of solatium and interest, similar to the LA Act. In neither of those two cases, this Court considered whether interest could be awarded or not, on belated payment of compensation amount for acquisitions under the relevant Acts, on equitable grounds. In fact, in both Hari Krishan Khosla and Chajju Ram, this court after upholding the validity of provisions relating to acquisition and determination of compensation, directed the Union of India not to recover back the interest which had already been paid to the land owners. This direction was on equitable grounds. In Prabhu Dayal and Girdhari, this Court awarded interest on equitable grounds, though the RAIP Act did not contain any provision for award of interest. 9. When a property is acquired, and law provides for payment of compensation to be determined in the manner specified, ordinarily compensation shall have to be paid at the time of taking possession in pursuance of acquisition. By applying equitabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le property has been acquired by the State and the State has taken possession of it. Thus they have been deprived of the right to receive the income from the property and there is a time lag between the taking of the possession by the State and the payment of compensation by it to the claimants. During this period they have been deprived of the income of the property and they have not been able to receive interest from the amount of compensation. Stated broadly the act of taking possession of immovable property generally implies an agreement to pay interest on the value of the property and it is on this principle that a claim for interest is made against the State. This question has been considered on several occasions and the general principle on which the contention is raised by the claimants has been upheld. In Swift and Co. v. Board of Trade, (1925) A C 520 at p. 532, it has been held by the House of Lords that on a contract for the sale and purchase of land it is the practice of the Court of Chancery to require the purchaser to pay interest on his purchase money from the date when he took, or might safely have taken, possession of the land. (18) In Inglewood Pulp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave just referred. [emphasis supplied] Proviso to section 1 of Interest Act, 1839 and section 4(1) of Interest Act, 1978 also recognize and preserve the power of court to grant interest in such circumstances. 11. In this case the acquisition is of the year 1965. Though more than four decades have elapsed, the land owners are yet to get the compensation in entirety. It is also relevant to note that when the Arbitrator awarded interest, it was not challenged by the appellant. It accepted the award of interest. Only when the High Court increased the amount of compensation in the appeals filed by the landowners, the appellant chose to challenge, not the increase in compensation, but the award of interest. Be that as it may. 12. For the reasons aforesaid, we uphold the award of interest at 6% per annum on the compensation amount. The appeals are therefore dismissed. C.A. Nos.332-336/2008 and CA Nos.354 to 359/2008 These appeals involve the same issue. Following the decision in C.A. Nos.2319-2327/2001, these appeals are dismissed. SLP (C) Nos. 4505-4506/2008, SLP (C) Nos. 4632-4636/2008), SLP (C) No. 4637/2008, SLP (C) Nos. 7110-7112/2008, SLP (C) Nos.9132- 9145/2008, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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