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CASE NO.: Appeal (civil)  1876 of 2006

PETITIONER: The Chairman, Neyveli Lignite Corpn.Ltd

RESPONDENT: C. Govinda Padayachi & Anr

DATE OF JUDGMENT: 03/04/2006

BENCH: B.P. Singh & Altamas Kabir

JUDGMENT: J U D G M E N T (Arising out of SLP ) No.1821 of 2005)

ALTAMAS KABIR, J.         Leave granted.         Between  1975 and  1978, certain  lands in the district   of Cuddalore in the State of Tamil Nadu were notified for  acquisition under Section 4 (1) of the Land Acquisition Act,  1894 (hereinafter referred to as ’the  Act’ ) for the purpose of   expansion  of the mines  belonging to the appellant herein.  In  such notification, 0.22 acres of house sites and 0.78 acres of  manavary dry lands, belonging to the respondent No.1 herein,  were acquired.  The Land Acquisition Collector awarded  compensation of Rs.4,370.61 to the respondent No.1 at the  rate of Rs.6,250/- per acre for house sites and Rs.3,200/- per  acre in respect of  manavary dry lands, excluding solatium   and interest.         Dissatisfied with the award of the Collector, the  respondent No.1 filed a reference petition, being  L.A.O.P.No.279/1982, before the Sub-Judge, Cuddalore, on  20th August, 1984.  The Reference Court by its award  increased the quantum of compensation to Rs.50,000/- per  acre for house sites and Rs.40,000/- per acre  for  manavary  dry lands, excluding  solatium and interest.           Being aggrieved by the order passed  on reference by the  Sub-Judge, Cuddalore, the Special Tahsildar (Land   Acquisition), in his capacity as the appropriate authority, filed  an appeal before the High Court of Judicature at Madras    on  26th February, 1985, being A.S. No.190/1985.  By way of an  interim order, the High Court directed the  appellant herein to  deposit the enhanced compensation  awarded by the Reference  Court with the stipulation  that 50 per cent of  such amount   could be withdrawn by the land owner without security and  the remaining balance could be withdrawn upon furnishing  security.         Pursuant to the aforesaid direction of the High Court, the  appellant herein deposited  a sum of  Rs.53,573.30 in court on   8th April, 1985.  The respondent No.1 withdrew  50 per cent of  the deposit,  i.e. Rs.26,786.65, without furnishing security,  but did not withdraw the balance by furnishing security.   Accordingly, the balance 50 per cent of the deposited amount  was directed by the court to be kept in a bank in a short-term  fixed deposit. In the meantime, in a batch of similar matters,  including A.S.No.190/1985, the High Court reduced the rate  of compensation  for house sites from Rs.50,000/- per acre to  Rs.20,000/- per acre and for the manavary dry lands from  Rs.40,000/- per acre to Rs.15,000/- per acre, excluding  solatium and interest.

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       The respondent No.1 and other land owners filed special  leave petitions in this Court against the judgment of the High  Court, being Civil Appeal No.6977-7002/1999, wherein the  following order was passed by this Court on 7th December,  1999 :-

"After hearing learned counsel for the parties and  with a view to give  quietus to this litigation in the  present set of cases, it appears appropriate to us, in  order to do complete justice between the parties, to  direct as follows:-

(1)      That in modification of the orders of the  High Court, the compensation shall be  payable to the land holders in these  cases  at the following rates:-

Wetlands                        Rs.94,000/- per acre Irrigated Dry land     Rs.82,000/- per acre Dry land                        Rs.47,000/- per acre Cashew Thope            Rs.85,000/- per acre House Sites             Rs.73,000/- per acre.

These amounts are inclusive  of solatium  and  interest and are lump-sum payments.  The  rates fixed  by us above are confined to the  present set of cases.

(2).    That no previously  settled cases shall be  re-opened on the basis of the rates fixed by us  as above.

(3)     In cases where the land holders have  withdrawn from the bank out of the 50 %  deposit and are required  to refund some  amount on the basis of the amounts as fixed  by us above, the Corporation shall recover that  amount by 12 equal installments of one and a  half  month each.  Similarly, if any additional  amount, under our above  directions, is to be  paid to the landholders, it shall be done within  three months from the date of this order.

(4)     In the event, the amount of 50 % is  still  lying with the banks and a refund is required   to be made to the Corporation by the  landholders, that refund may be obtained out  of the 50 % amount of  bank deposit.  

With the aforesaid directions all the claims  arising out of the 89 appeal listed before us shall  stand disposed of in full and final settlement."

As per the aforesaid order, the respondent No.1  who had  already  received a sum of Rs.4,370.61  under the order of the  Collector and a further  sum of  Rs.26,786.65 being 50 per  cent of the deposit without furnishing security,  aggregating a  sum of Rs.31,157.26, was entitled to receive a further a sum  of  Rs.21,562.74  towards full and final settlement of  his  claim. In keeping with the aforesaid order of this Court, the  appellant herein  arranged  for the remittance  to the court of   a sum of Rs.1,05,548/- representing the amount of deposit  lying with the  bank, together with the interest earned thereon.  

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The appellant filed I.A. No.8/2001 in L.A.O.P.No.279/1982,  along with a memo of calculation, before the court of Sub- Judge, Cuddalore, claiming  payment of Rs.83,985.26 in terms  of the orders of this Court dated 7th December, 1999.   The  respondent No.1 also filed an application, being  I.A.No.104/2002, wherein he claimed  the balance of the lump  sum amount, namely, 21,562.74 together with the entire  amount  of interest earned  on  the deposit,  being   Rs.80,000/-.  According  to the respondent No.1, the amount  to  be refunded  to the appellant herein was only Rs.5,223.91  and not Rs.83,985.26 as claimed by it.  The said petition of  the respondent No.1 was taken up for consideration by the  Sub-Judge, Cuddalore, on 17th June, 2004 and a direction  was  given to the parties to file revised memo of calculation on  the basis of  the orders passed by this Court on 7th  December,1999.   Aggrieved by the said order, respondent No.1 filed a  Revision Petition, being C.R.P.No. 1406/2004, against the  order of the Sub-Judge, Cuddalore, dated 17th June, 2004,  before the High Court of Judicature at Madras under Article  227 of the Constitution.  The High Court by its order  dated  27th October, 2004, directed refund  of a sum of Rs.5,224/-  only to the appellant as against its claim  of Rs.82,980.82 and  also directed payment of Rs.1,00,324/- to the respondent  No.1.   This appeal is directed  against the aforesaid judgment of  the High Court dated 27th October, 2004. On behalf of the  appellant it was urged by  Mr. Reddy,  learned senior advocate, that the claim of the respondent No.1  and the order passed there upon by the High Court was  not  sustainable  in view of the specific  order passed by this Court  on 7th December, 1999, while disposing of the earlier batch of  appeals that the amounts as quantified in respect of the  different categories of land were lump sum  payments which  included solatium and interest.  In other words, the amount of  compensation payable, which included solatium and interest,  was quantified and crystallized by the order of 7th December,  1999.  The respondent No.1 would, therefore, be entitled to the  compensation as was quantified on that date as far as  his  lands were concerned and in the event there was further delay  in payment of the compensation amount,  the said respondent  could at best  claim interest on the compensation amount as  quantified after 7th December, 1999. It was submitted that the claim of the said respondent  No.1 for payment of interest on the sum quantified by the  order of this Court in terms of Section 28 of the Act was  misconceived and the High Court had  also misconstrued the  purport of the order passed by this Court on 7th December,  1999.  Mr. Reddy submitted that the respondent No.1  who  was entitled to a total compensation  amount of Rs.53,573.30  and had already received a sum of Rs.31,157.26 from the  same, was entitled  to receive the balance amount of  Rs.  21,562.74 and interest thereupon from the date of this   Court’s  order dated 7th December, 1999 till the date of actual  payment at the rate of interest to be decided by this Court.  It  was submitted further that the amount which was deposited  by the appellant in court pursuant to the direction given by  the  High Court did not represent the awarded sum   but  security for the same since  the award had not attained  finality.  It was  submitted that it was only on 7th December,  1999 that the  awarded sum  stood quantified by virtue of  the  orders  passed by this Court in the earlier  batch of appeals  and accordingly the respondent No.1 could have  no claim to  the amount as deposited  and his claim would have to be  confined to the amount as quantified by this Court which

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included not only the value of the lands acquired, but  solatium  and interest as well.   The stand taken on behalf of the appellant was strongly  opposed  on behalf of respondent No.1 mainly on the ground  that by virtue  of the order passed by the High Court, the  respondent No.1 was not only entitled to receive 50 per cent of  the amount deposited in court by the appellant without  furnishing security, but that the said respondent was  also  entitled to withdraw the balance 50 per cent upon furnishing  security.  It was contended that the respondent No.1 had  acquired a right to the remaining 50 per cent of the amount  deposited by virtue of the said order of the High Court and  that  had he withdrawn the said amount upon furnishing   security in 1985, he  could have  enjoyed the benefits of the  said  amount as had been done by various other  similarly  placed individuals.   It was submitted that it is  well-settled that any amount  which accrues to deposits made pursuant to the orders of the  court are to be paid to the persons entitled to such  deposits. Mr. Viswanathan, learned advocate, who appeared for the  respondent No.1, referred to Section 28 of the Act to bolster  the claim of  the respondent  No.1 that in addition to the  compensation as quantified by this Court earlier, the  respondent No.1 was also entitled to interest on the excess  amount  as awarded by this Court from the date on which the  possession of the lands  was  taken  till the payment of such  excess amount into  court.  Reference was also  made to  Section  33 of  the said Act on  account of the fact that the  appellant had been directed to deposit in court the amount  determined as compensation by the Reference Court which  amount had been invested  and had earned interest while the  matter was pending. In this regard,  reference was made to  the Constitution  Bench decision of this Court  in  the case of Sunder vs. Union  of India,  (2001) 7 SCC 211, wherein on   an interpretation of  Sections 28 and 34 of the aforesaid  Act, it was held that  interest was also payable on solatium and  that the amount of  the award  in Section 34 means the aggregate amount of  compensation calculated in accordance  with the provisions of   all the Sub-sections of Section 23  which includes solatium. Having considered  the submissions made on behalf of  the respective parties, we are unable  to accept the  submissions advanced on behalf of respondent No.1 on  account of the fact that by order dated  7th December, 1999,  this Court while fixing a   lump sum amount as compensation,  took into consideration not only  the value of the land acquired  but  solatium and interest as well.  The interest that could  have been claimed under Sections 28 and 33  of the above Act  were, in fact, included in the lump sum amount till 7th  December, 1999, and interest can be claimed by the  respondent No.1 on the quantified amount only after 7th  December, 1999 till the date of payment. In our view,  the High Court  misconstrued its earlier  order in A.S.N.190/1985 directing the  appellant  to deposit  the enhanced compensation awarded by the  Reference Court  and permitting  the land owners  to withdraw  50 per cent of  such amount without security and the remaining 50 per cent  upon furnishing  of security.  While passing its  order on 27th  October, 2004, the High Court appears to have missed sight of  the fact that when the direction was given in A.S.No.190/1985  to the appellant herein to deposit the enhanced amount of  compensation,  the  award was yet to be finalized  and that the  award was ultimately  finalized  on 7th December, 1999 by this  Court and that the respondent  No.1 would, therefore, be  entitled to compensation in terms of the amount as quantified

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on 7th December, 1999.  In our view,  in the light of the order  passed by this Court on 7th December, 1999,  quantifying  the  compensation  amount to include  solatium  and interest, the  provisions of Sections 28 and 33 of the above Act would no  longer be attracted and the  respondent No.1 would only be  entitled  to interest on the delayed payment of the quantified  amount on and from 7th December, 1999 till the date of actual  payment. In that view of  the matter, the appeal succeeds and is  allowed.  The order of the High Court impugned in the appeal  is set  aside  and it is directed that out of the sum  of Rs.  1,05,548/- remitted to the court below by the bank, the  respondent No.1 will be entitled to receive a sum of  Rs.21,562.74, being the balance amount of the total  compensation  payable in terms of the compensation  quantified by this Court’s Order dated 7th December, 1999,  together with interest thereupon calculated at the rate of 15  per cent from 7th December, 1999, till the date of payment of  the balance amount of the award.  Having regard to the fact  that the lands were acquired  between 1975 and 1978, such  payment should be made expeditiously, but positively within a   period of six  months from the date of the communication of  this judgment.  The amount left over  after  payment of  the  aforesaid sums are to be paid to the appellant.

There will be no order as to costs.