TMI Blog2001 (9) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Collector to pay interest at two tier rates. For the first stage, from the date of taking possession until disbursement of the awarded amount the rate is 9% per annum. If such disbursement is delayed beyond one year the rate of interest would escalate to 15% per annum from the date of expiry of the said period of one year. Section 28 of the Act contains the same postulates and it is supplementary to the above provision. It empowers the court to direct the Collector to pay interest at the above two tier rates on the excess sum awarded by the court. The real question is whether in calculating the interest, as mentioned in the said provisions, the amount of solatium envisaged in Section 23(2) of the Act should be included in or excluded from the sum on which interest is liable to be paid. In Union of India vs. Shri Ram Mehar and ors. (supra) the three Judge Bench considered the scope of the expression market value in Section 4(3) of the Land Acquisition (Amendment and Validation) Act, 1967. By the said Amendment Act certain changes were effected in the principal Act. Section 4(3) of the Amendment Act provided that simple interest shall be paid at the rate of 6% per annum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the award and hence interest is not claimable thereon. We may point out that the decision of the three Judge Bench in Union of India vs. Shri Ram Mehar and ors. (supra) was not referred to in Mir Fazeelath Hussain, presumably because it would not have been brought to the notice of the learned Judges. Another three Judge Bench in Prem Nath Kapur anr. vs. National Fertilizers Corporation of India Ltd. ors. {1996 (2) SCC 71}, while considering the question whether an awardee is entitled to appropriate amount of compensation first towards cost and then towards interest etc., made the observation that the liability to pay interest is only on the excess amount of compensation determined under Section 23(1) and not on the amount already determined by the Land Acquisition Officer under Section 11 and paid to the party or deposited into the court or determined under Section 26 or Section 54 and deposited into the court or on solatium under Section 23(2) and the additional amount under Section 23(1-A) . But the question whether solatium is part of the compensation did not positively arise in the said decision nor has it been gone into by the learned Judges. However, such a questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rable lands for temporary use) wherein the word compensation is used ostensibly in a different connotation. He further submitted that there is distinction between the compensation awarded for the land acquired as indicated in Section 23(1) of the Act and the aggregate compensation which comprises the former plus the solatium and the additional amount payable under sub-section (1-A) thereof. The two sums in the latter category are payable merely as consequential to the determination of the compensation mentioned in the first sub-section, according to learned Solicitor General. Alternatively he contended that the actual loss sustained by the landowner is the enjoyment of the property and hence the real compensation is the just equivalent of it which represents only the amount covered by the different clauses incorporated in the first sub-section of Section 23 of the Act. In that view also, according to the Solicitor General, the interest need be payable only on the said compensation. Mr. Rakesh Dwivedi, learned senior counsel while supporting the arguments of the Solicitor General invited our attention to Section 15 and Section 26(1) of the Act to contend that the real compensat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person who is entitled to such compensation when the payment of his money is delayed that the provision is made in Section 34 of the Act. That section is extracted below: 34. Payment of Interest.- 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 nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited. Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the 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. When the court is of opinion that Collector should have awarded a larger sum as compensation the court has to direct the Collector to pay interest on such excess amount. The rate of interest is on a par with the rate indicated in Section 34. This is so provided in Section 28 of the Act which is extract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the land at the date of the publication of the notification under section 4, sub-section (1), secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector s taking possession thereof; thirdly, the damage (if any, sustained by the person interested, at the time of the Collector s taking possession of the land, by reason of severing such land from his other land; fourthly, the damage (if any), sustained by the person interested, at the time of the Collector s taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings; fifthly, if, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the declaration under Section 6 and the time of the Collector s taking possession of the land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awarding each of the said amounts. (2) Every such award shall be deemed to be a decree and the statement of the grounds of every such award a judgment within the meaning of section 2, clause (2) and section 2, clause (9), respectively, of the Code of Civil Procedure, 1908. Section 26 does not say that the award would contain only the amounts granted under sub-section (1) of Section 23. The special mention of that sub-section in Section 26 is only for the purpose of directing that the grounds or reasons for awarding the amount under each of the clauses in the sub-section shall be specified in the award. It is unnecessary to mention any reason or ground in any award as to why the sums indicated in sub-section (1-A) and sub-section (2) of Section 23 of the Act were granted, because they are only the sequels or concomitant adjuncts of the determination of the total amount indicated in sub-section (1). No judicial exercise is required to quantify the sums mentioned in sub-section (1-A) or subsection (2) because the section itself specifies the percentage to be worked out for the purpose of adding to the total amount arrived at under sub-section (1). Otherwise Section 26 is not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price. Even in such negotiations or haggling normally no landowner would bargain for any amount in consideration of his disinclination to part with the land. The mere fact that he is negotiating for sale of the land would show that he is willing to part with the land. The owner is free to settle terms of transfer and choose the buyer as also to appoint the point of time when he would be receiving consideration and parting with his title and possession over the land. But in the compulsory acquisition the landowner is deprived of the right and opportunity to negotiate and bargain for the sale price. It depends on what the Collector or the Court fixes as per the provisions of the Act. The solatium envisaged in sub-section (2) in consideration of the compulsory nature of the acquisition is thus not the same as damages on account of the disinclination to part with the land acquired. In deciding the question as to what amount would bear interest under Section 34 of the Act a peep into Section 31(1) of the Act would be advantageous. That sub-section says: On making an award under section 11, the Collector shall tender payment of the compensation awarded by him to the persons intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nautics Ltd. vs. Muniswamy Reddy (AIR 1993 Karnataka 77) We think it useful to quote the reasoning advanced by Chief Justice S.S. Sandhawalia of the Division Bench of the Punjab and Haryana High Court in State of Haryana vs. Smt. Kailashwati and ors. (supra). Once it is held as it inevitably must be that the solatium provided for under Section 23(2) of the Act forms an integral and statutory part of the compensation awarded to a landowner, then from the plain terms of section 28 of the act, it would be evident that the interest is payable on the compensation awarded and not merely on the market value of the land. Indeed the language of S.28 does not even remotely refer to market value alone and in terms talks of compensation or the sum equivalent thereto. The interest awardable under Section 28 therefore would include within its ambit both the market value and the statutory solatium. It would be thus evident that the provisions of Section 28 in terms warrant and authorise the grant of interest on solatium as well. In our view the aforesaid statement of law is in accord with the sound principle of interpretation. Hence the person entitled to the compensation awarded is also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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