Pre-emptive purchase and interest on deposit: interest burden deleted where purchaser was never put in possession

Where a pre-emptive purchase order was set aside for failure to deal with valuation objections as required by law, the purchaser could not be burdened with interest on the discounted consideration for the entire intervening period. The Court held that, since the purchaser had not been put in possession and the delay was not solely attributable to the purchaser, a direction to deposit the principal amount with interest at 15% per annum was inequitable and unsustainable. The interest component was therefore deleted, while the remand for fresh consideration and the direction to deposit principal only were maintained.

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Issues: Whether the condition directing the purchaser to deposit the discounted consideration with interest at 15% per annum, while the matter was remitted for fresh consideration after setting aside the pre-emptive purchase order, was sustainable.

Analysis: The impugned pre-emptive purchase order had been set aside because the authority had not dealt with the objections to valuation in the manner required by law. The purchaser had not been put in possession, and the delay in the final outcome could not be attributed solely to the purchaser so as to justify an interest burden for the entire intervening period. The Court distinguished the authority relied upon by the Revenue and preferred the view that where the purchaser lawfully challenges an invalid acquisition and does not enjoy the property, interest on the amount directed to be deposited is inequitable. The conditional direction to pay interest at 15% per annum was therefore found unsustainable.

Conclusion: The condition requiring payment of interest at 15% per annum was set aside. The matter was remitted for fresh decision with directions for deposit of the principal amount only and for consequential reliefs as ordered.

Final Conclusion: The appeal succeeded to the limited extent of deleting the interest component, while the remand and the protective directions regarding reconsideration of the pre-emptive purchase were maintained.

Ratio Decidendi: Where a pre-emptive purchase order is set aside and the purchaser has not been put in possession of the property, the purchaser cannot ordinarily be compelled to pay interest on the amount directed to be deposited for the period during which the invalid acquisition remained operative.

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