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PETITIONER: ABHAY SINGH SURANA & ORS

       Vs.

RESPONDENT: SECRETARY MINISTRY OF COMMUNICATION & ORS.

DATE OF JUDGMENT19/08/1987

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) OZA, G.L. (J)

CITATION:  1987 AIR 2177            1987 SCR  (3)1045  1987 SCC  (4) 273        JT 1987 (3)   444  1987 SCALE  (2)400

ACT:     Interest on the amount awarded by Arbitrator for  requi- sition  of premises under Requisitioning and Acquisition  of Immovable Property Act, 1952--Entitlement of.

HEADNOTE:     This appeal by special leave was confined solely to  the question of entitlement of interest on the amount awarded by the Arbitrator for the requisition of the premises under the Requisitioning  and Acquisition of Immovable  Property  Act, 1952. Disposing of the appeal, the Court,     HELD: The principles upon which the compensation on this aspect is payable are by now well-settled. This Court  reit- erated  the principles in Satinder Singh and Ors.  v.  Amrao Singh and Ors., [1961] 3 SCR 676 at 694; National  Insurance Co.  Ltd. Calcutta v. Life Insurance Corporation of  India-- [1963]  Supp. 2 SCR 971 at 992 and Hirachand Kothari  (dead) through  Lrs. v. State of Rajasthan & Anr.,  [1985]  Suppl.1 SCR 644 at 655. [1046F; 1048C]     In  the light of the aforesaid decisions, the Court  was of  the opinion that the appellants herein were entitled  to the  interest  for the period from March 1975  to  the  31st July,  1987, when the principal amount of  compensation  had been paid and/or when the premises in question had been  de- requisitioned  and handed back to the owner, on  the  amount awarded.  The Court was of the opinion that for  the  period from  March 7, 1975 to February 28, 1985 being the  date  on which the judgment of the High Court was pronounced in  this case,  the appellants were entitled to the interest  on  the amount awarded at the rate of 6 per cent per annum, and  for the  period from August 8, 1985 to July 31,  1987--for  that period  only--at  the  rate of 12 per cent  per  annum.  The interest  would be payable only on the balance amount  which remained  to be paid to the appellants i.e. the  amount  due minus  what  had been paid from the  respective  dates.  The Court  directed that the amount be paid by  the  respondents within three months from the date of this judgment, and that in case there was any difficulty in calculating the  amount, the 1046

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parties  would  be at liberty to apply to  the  High  Court. [1048C-H]     Satinder  Singh & Ors. v. Amrao Singh & Ors.,  [1961]  3 S.C.R.  676;  National Insurance Co. Ltd. Calcutta  v.  Life Insurance Corporation of India, [1963] Supp. 2 S.C.R. 971 at 992;  Hirachand  Kothari  (dead) through Lrs.  v.  State  of Rajasthan  & Ors., [1985] Supp. 1 S.C.R. 644  and  Inglewood Pulp  and  Paper Co. Ltd. v. New  Burnswick  Electric  Power Commission, A.I.R. 1928 Privy Council 287, referred tO.

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No.  859  of 1987.      Shankar Ghosh and L.P.Aggarwal for the Appellants     From  the  Judgment  and order dated 8.8.  1985  of  the Calcutta High Court in Appeal No. 329 of 1982.     V.C. Mahajan, B. Parthasarhti and C.V. Subba Rao for the Respondents. The Judgment of the Court was delivered by     SABYASACHI MUKHARJI, J. This appeal by special leave  is confined solely to the question of interest. In other words, the  entitlement of interest on the amount awarded by  Arbi- trator for the requisition of the premises under the  Requi- sitioning and Acquisition of Immovable Property Act 1952  is the  issue.  The principles upon which the  compensation  on this aspect is payable are by now well settled. In  Satinder Singh  & Ors. v. Amrao Singh & Ors., [1961] 3 SCR  676  this Court reiterated the principles at page 694 of the report as follows:               "In  Inglewood Pulp and Paper Co. Ltd. v.  New               Burnswick  Electric  Power  Commission  [1928]               A.C. 429 it was held by the Privy Council that               "upon the expropriation of land under statuto-               ry  power, whether for the purpose of  private               gain  or of good to the public at  large,  the               owner is entitled to interest upon the princi-               pal sum awarded from the date when  possession               was taken, unless the statute clearly shows  a               contrary intention. ": Dealing with the  argu-               ment  that  the expropriation with  which  the               Privy  Council was concerned was not  effected               for  private  gain, but for the  good  of  the               public  at  large, it observed  "but  for  all               that, the owner is               1047               deprived of his property in this case as  much               as  in the other, and the rule has  long  been               accepted  in  the interpretation  of  statutes               that they are not to be held to deprive  indi-               viduals   of  property  without   compensation               unless  the intention to do so is  made  quite               clear. The right to receive the interest               takes the place of the right to retain posses-               sion and is within the rule". It would thus be               noticed  that the claim for interest  proceeds               on  the  assumption  that when  the  owner  of               immovable property loses possession of it,  he               is  entitled  to claim interest  in  place  of               right to retain possession. The question which               we have to consider is whether the application               of this rule is intended to be excluded by the               Act of 1948, and as we have already  observed,               the  mere  fact that section 5(3) of  the  Act

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             makes  s. 23(1) of the Land  Acquisition  Act,               1894  applicable  we cannot  reasonably  infer               that  the Act intends to exclude the  applica-               tion of this general rule in the matter of the               payment  of interest. That is the  view  which               the  Punjab  High Court has  taken  in  Surjan               Singh v. The East Punjab Government, (AIR 1957               Punj. 265) and we think rightly."     The same principle was reaffirmed not in the context  of Acquisition  of  Immovable  Property,  which  Mr.   Mahajan, learned  counsel for the respondents tried to make  a  point before  us, was highlighted in National Insurance  Co.  Ltd. Calcutta  v.  Life Insurance Corporation  of  India,  [1963] Supp.  2  SCR 971. at 992 where speaking for the  court  Mr. Justice Hidayatullah, as learned Chief Justice of India then was observed:               "The reason of the rule was stated a long time               ago  by  Lord St. Leonard L.C. Birch  v.  Joy,               [1852] III H.L.C. 565:10 E.R. 222 as follows:               "The  parties change characters, the  property               remains at law just where it was, the purchas-               er has the money in his pocket, and the seller               still  has the estate vested in him; but  they               exchange characters in a Court of Equity,  the               seller becomes the owner of the money and  the               purchaser becomes the owner of the estate."               On  entering possession the purchaser  becomes               entitled  to the rents but if he has not  paid               the  price, interest in equity is deemed  pay-               able by him on the purchase price which               1048               belongs  to  the seller.  This  principle  was               applied  by  the House of Lords  in  cases  of               compulsory purchases. In Swift & Co. v.  Board               of  Trade, [1925] A.C. 520 Viscount Cave  L.C.               gave  the reason that the practice rests  upon               the principle that the taking of possession is               an implied agreement to pay interest which was               stated by Sir William Grant M.R. in Fludyer v.               Cocker, [1805] 33 E.R. 10. This principle  was               further  extended by the Privy Council to  the               compulsory  taking  over of a  business  as  a               going concern in International Railway Co.  v.               Niagara Parks Commission, [1944] A.C. 328.     It was noted by Justice Hidayatullah that this principle has  also been accepted by this Court in Satinder  Singh  v. Amrao  Singh (supra). The principle stated was  followed  in Hirachand Kothari (dead) through Lrs. v. State of  Rajasthan &  Anr., [1985] Suppl. 1 SCR 644 where this court noted  the principle at page 655 of the report.     In  the  light of the aforesaid decision we are  of  the opinion  that  the  appellants herein are  entitled  to  the interest  for the period from March 1975 to 31st July,  1987 when  principal amount of compensation had been paid and  or when the premises in question had been de-requisitioned  and handed  back to the owner, on the amount awarded. As to  how the interest would vary, but the right of interest was  well avered and also should have been considered in the light  of the  observations  of Privy Council in  Inglewood  Pulp  and Paper  Co. Ltd. v. New Burnswick Electric Power  Commission, AIR 1928 Privy Council 287. We are of the opinion that  from the period from March 7, 1975 to February 28, 1985 being the date on which the judgment of the High Court was  pronounced in this case the appellants are entitled to the interest  on the amount awarded at the rate of 6% per annum and from  the

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period  from  August 87 1985 to July 31, 1987 and  for  that period  only at the rate of 12% per annum. Interest will  be payable  only  on the balance amount which  remained  to  be payable to the appellants i.e. the amount due minus what has been  paid  from the respective dates.  The  appellants  are entitled to the costs of this appeal.     The  amount is directed to be paid within  three  months from  this  date by the respondents. In case, there  is  any difficulty in calculating the amount, the parties will be at liberty  to apply to the High Court of Calcutta. The  appel- lants  are entitled to costs of this appeal. The  appeal  is thus disposed of. S.L.                                           Appeal   dis- posed of. 1049