Court Orders Opposite Parties to Pay 6% Interest on Property Possession Date

The court allowed the writ petition and ordered the opposite parties to pay simple interest at 6% from the date of possession of the property until the date of payment.

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Issues:
Claim for interest on property purchase by Central Government under Section 269-UD(1) of the Income Tax Act, 1961.

Analysis:
The petitioners sought interest on the purchase of their property by the Central Government under Section 269-UD(1) of the Income Tax Act, 1961. The petitioners were lessees of a land and owners of a building on the property. The Government initiated proceedings under Section 269-UD, which were challenged by the petitioners. The matter was disposed of in light of a Supreme Court decision upholding the validity of Section 269-UD. The petitioners then claimed interest on the amount due from the Government. The petitioner's counsel argued for interest based on judgments from the Supreme Court and Karnataka High Court in similar cases.

During the proceedings, the petitioner's counsel submitted that they no longer contested the compensation amount but sought interest at 20% from a specific date. The opposing counsel argued that due to the pending writ petition, the Government could not become the owner of the property in question. The court considered the arguments from both parties and reviewed the material on record.

Based on the Supreme Court's rulings in similar cases, the court held that if an owner is compelled to sell their property, they should not be penalized by receiving only the price. The court emphasized that interest could be awarded if equity demanded it. In this case, the court found that the Government had derived undue advantage from the property for several years while its value appreciated. Consequently, the petitioners suffered losses, warranting compensation. Therefore, the court directed the Government to pay simple interest at 6% from the date of possession of the property until the date of payment.

In conclusion, the court allowed the writ petition and ordered the opposite parties to pay the specified interest. No costs were awarded in this judgment, which was delivered on 14.12.2009.

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