Interest on compensation for requisitioned property follows deprivation of possession unless clearly excluded by statute.

The settled principle is that interest follows compulsory deprivation of property unless the governing statute clearly excludes it, because interest compensates the owner for being kept out of possession. The Supreme Court applied that rule to requisitioned premises and held that incorporation of Section 23(1) of the Land Acquisition Act, 1894 through Section 5(3) of the Requisitioning and Acquisition of Immovable Property Act, 1952 did not displace the entitlement to interest. It further noted that the compensation remained unpaid until the premises were derequisitioned and returned, and that interest was payable on the unpaid balance for the relevant period at different rates.

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Issues: Whether the appellants were entitled to interest on the compensation awarded for requisitioned premises, and if so, the applicable rate and period.

Analysis: The right to interest on compensation for compulsory deprivation of property was treated as a settled principle, unless the governing statute clearly excludes it. The Court applied the established rule that, when possession is taken and the owner is deprived of the use of the property, interest takes the place of the right to retain possession. The incorporation of Section 23(1) of the Land Acquisition Act, 1894 through Section 5(3) of the Requisitioning and Acquisition of Immovable Property Act, 1952 did not displace that general principle. On the facts, the compensation remained unpaid for the relevant period until the premises were derequisitioned and handed back.

Conclusion: The appellants were held entitled to interest on the unpaid balance of compensation for the period from 7 March 1975 to 31 July 1987, at 6% per annum up to 28 February 1985 and at 12% per annum thereafter up to 31 July 1987, with costs.

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