1995 (11) TMI 441 - SC - Indian Laws

Clarification on Compensation and Interest under Land Acquisition Act: Supreme Court's Ruling

The Supreme Court addressed the determination of compensation and interest under the Land Acquisition Act, emphasizing the distinct components of ... - Issues Involved:1. Determination of compensation and interest payable u/s 23(1), 23(2), 23(1-A), 28, and 34 of the Land Acquisition Act, 1894.2. Appropriation of compensation amount towards costs, interest, and principal.3. Applicability of the Amendment Act 68 of 1984 to the enhanced compensation.Summary:1. Determination of Compensation and Interest:The Supreme Court addressed the determination of compensation and interest payable under various sections of the Land Acquisition Act, 1894. The Court noted that the compensation includes the market value of the land u/s 23(1), solatium u/s 23(2), and additional amount u/s 23(1-A). Interest on the compensation is payable from the date of taking possession until the date of payment or deposit into the court u/s 34 and 28. The Court emphasized that each component of compensation is distinct and separate, and the liability to pay interest on the excess amount of compensation determined by the Court relates back to the date of taking possession of the land.2. Appropriation of Compensation Amount:The appellants contended that they are entitled to appropriate the compensation amount first towards costs, then towards interest, and finally towards the principal amount. The Supreme Court held that the right to make appropriation is indicated by the award itself, and the claimant is not entitled to deduct from the amount of compensation towards costs, interest, and additional amount u/s 23(1-A) with interest, and then claim the total balance amount with further interest. The Court clarified that the liability to pay interest is only on the excess amount of compensation determined u/s 23(1) and not on the amount already determined by the Land Acquisition Officer or on solatium u/s 23(2) and additional amount u/s 23(1-A).3. Applicability of Amendment Act 68 of 1984:The Court addressed the applicability of the Amendment Act 68 of 1984 to the enhanced compensation. It was held that the power to award additional amount u/s 23(1-A) and solatium u/s 23(2) arises only when the Court or High Court enhances the compensation. The Court noted that the Amendment Act 68 of 1984 could not apply to the enhancement of compensation made in revision in 1984, as held in Union of India v. Raghubir Singh and K.S. Paripoornan [II] v. State of Kerala. The revisional order for payment of additional benefits and enhanced solatium and interest under the Amendment Act was deemed to be in excess of the power or jurisdiction of the High Court.Conclusion:The appeals were dismissed, and the Executing Court was directed to proceed with the execution in accordance with the law declared by the Supreme Court. No costs were awarded.