IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1385 of 2004                                         

Chimanlal Kuberdas Modi (D) by Lrs……………………Appellant

Versus

Gujarat Industrial Development Corp. & Ors….....Respondents

WITH

CIVIL APPEAL NO. 1386 of 2004

JUDGMENT

Dr. Mukundakam Sharma, J.

1. The only issue which arises for our consideration in this  

appeal  is whether or not the appellant  would be entitled to  

payment of interest under Section 34 of the Land Acquisition  

Act, 1894 on the solatium on the compensation paid in terms  

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of  the  decision  of  the  case  in  Sunder  Vs.  Union  of  India  

reported in  (2001) 7 SCC 211 and further explained in the  

case of Gurpreet Singh Vs. Union of India reported in (2006)  

8 SCC 457.     

2. The  land  belonging  to  the  appellant  was  acquired  by  

issuing  a  notification  under  Section  4  and  6  of  the  Land  

Acquisition Act, 1894 (hereinafter referred to as “the Act”).    A  

notification  was  issued  on  4.10.1973  for  the  beneficiary,  

namely,  Respondent  No.  1  under  Section  4  of  the  Act.  

Thereafter another notification under Section 6 of the Act was  

issued by the competent authority on 4.11.1976.   The Land  

Acquisition Officer passed an Award in the land acquisition  

case wherein he determined the market value of the land at  

`1.28 per sq. meter.    Possession of the land was also taken  

over by the Land Acquisition Officer on the date of the passing  

of the Award.   Pursuant to the aforesaid Award, the appellant  

was paid an amount of ` 73,191.09.

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3. Being  aggrieved  by  the  Award  dated  22.9.1986,  

determining the market  value  of  the  land at  ` 1.28 per  sq.  

meter, the appellant filed two references under Section 18 of  

the Act. During the pendency of the aforesaid reference before  

the Reference Court, the respondent paid a further sum of  `  

1,18,557.08 towards the balance compensation for the land.

4. By a judgment and order dated 26.2.1999, the Reference  

Court disposed of the case, determining the market value of  

the land at  ` 30 per sq. meter.  While disposing of the said  

case, the following decree was passed by the Reference Court.

1. The reference cases are hereby partly allowed and  the Respondents are hereby ordered to pay ` 28.72  Ps. over and above  ` 1.28 Ps. Per Sq. Mtr. already  awarded  by  the  Land  Acquisition  Officer  for  the  acquired lands.

2. The claimants be also paid the solatium at the rate  of 30% and interest at the rate of 9% per annum till  one year after the possession of the acquired lands  was taken by the Government, and if the amount is  not paid within one year, the claimants is entitled to  the interest at the rate of 15% per annum thereafter  till the entire amount is deposited.

3. The claimants  are  also  entitled  to  get  increase  of  12% from the date of publication of notification u/s  4 i.e. dated November 15, 1973 to the date of award  i.e.  September  22,  1986,  passed  by  the  Land  

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Acquisition Officer, as provided u/s 23 (1A) of the  Land Acquisition Act.

******* ******** ******** *******

5. In terms of the aforesaid decree passed, a Schedule was  

also  attached  to  the  said  judgment  in  which  compensation  

payable to the appellant to the extent of market value of the  

land, solatium at the rate of 30% on the amount calculated  

and increase at the rate of 12 % per annum on the market  

value under Section 23(1A) was calculated.

6. Consequent  thereto,  the  appellant  filed  an  execution  

application for recovery of the balance amount as awarded by  

the Reference Court.   During the pendency of the aforesaid  

execution application, the respondent paid an amount as part  

payment  of  the  dues  payable  by  the  respondent  to  the  

appellant.  While  the  said  execution  case  was  pending,  the  

appellant also filed an application for payment of the amount  

of interest payable under Section 34 of the Act, at the rate of  

9%  for  the  first  year  and  15%  thereafter  on  the  amount  

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awarded  by  the  Reference  Court  under  Section  23(1A)  and  

23(2) of the Act.  As against the said prayer of the appellant,  

the respondents filed objection.  The said objection was heard  

by the executing court, and by an order dated 9.9.2002, the  

executing court rejected the objection filed by the respondent  

No.  1  herein  and  issued  a  warrant  for  recovery  of  balance  

amount  and  further  interest  from  1.7.2002,  relying  on  the  

ratio of the judgment of this Court in  Sunder Vs. Union of  

India (supra).

7. Being  aggrieved  by  the  aforesaid  order  passed  by  the  

executing court, the respondent filed a revision petition before  

the  Gujarat  High  Court  contending  inter  alia that  the  

Reference  Court  did  not  award  interest  on  the  aggregate  

amount and therefore, the executing Court was not justified in  

awarding an amount under the aforesaid head of Section 34 of  

the Act.  It was also contended that the ratio of the judgment  

in Sunder (supra) is not applicable to the facts of the present  

case because on the date when the decree was passed, interest  

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was not payable  on the amount of  solatium as also on the  

amount payable under Section 23 of the Act.

8. By a judgment and order passed on 20.2.2003, the High  

Court upheld the aforesaid contentions and allowed the appeal  

filed by the respondent and set aside the order passed by the  

executing court on 9.9.2002.

9. Being  aggrieved  by  the  aforesaid  order,  the  appellants  

filed  the  present  Special  Leave  Petition  in  which  leave  was  

granted  and  on  which  we  have  heard  the  learned  counsel  

appearing for the parties.

10. The  learned  counsel  appearing  for  the  appellant  

reiterated  the  same  submissions  that  the  decisions  in  the  

cases  of  Sunder  (supra) and  Gurpreet  Singh  (supra) are  

clearly  applicable  to  the  facts  and  circumstances  of  the  

present case.  She also submitted that since the execution of  

the order passed in the reference case was pending on the date  

when the decision in the case of Sunder (supra) was delivered,  

the said decision should, therefore, have been relied upon as  

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clearly  held  in  Gurpreet  Singh’s  case  (supra) and  on  the  

basis of that benefit of payment of interest on solatium should  

have been given to the appellant.

11. Learned counsel appearing for the respondent, however,  

refuted  the  aforesaid  submissions  by  contending  that  the  

decisions in the case of  Sunder (supra) as also of  Gurpreet  

Singh  (supra) are  not  applicable  to  the  facts  and  

circumstances of the present case.

12. Having regard to the aforesaid submissions and having  

gone  through  the  cited  decisions,  we  have  scrutinized  the  

records before us.   The decree passed by the Reference Court  

has been extracted hereinbefore.   The Reference Court in the  

decree has allowed the prayer for compensation towards the  

market value of the land as also solatium at the rate of 30%  

and also granted increase of 12% from the date of publication,  

as also an increase in compensation in terms of Section 23(1A)  

of the Act.     

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13. The claimants were also held to be entitled to interest at  

the rate of 9% and thereafter at 15% per annum on the entire  

amount payable.   In the decree, it was also mentioned that  

the claimants would be entitled to get compensation as stated  

in  the  schedule  attached  therein.  The  schedule  is  attached  

with the decree.  A bare perusal of the same indicates that in  

addition  to  the  amount  shown  as  compensation  towards  

market  value,  solatium at  the  rate  of  30% and  increase  of  

compensation at the rate of 12% per annum are also shown in  

the  said  schedule.   The  amount  awarded  in  terms  of  the  

interest at the rate of 9% per annum which is shown to be  

included in the decree is, for reasons unclear, not indicated in  

the said schedule, but is specifically mentioned in the decree  

itself.   Since a direction is made for payment of interest at the  

rate of 9% per annum and thereafter at 15% per annum in the  

decree,  the  appellant  cannot  be  denied  the  benefit  of  the  

interest on market value, which also includes solatium and for  

that purpose the decisions in the case of Sunder (supra) and  

Gurpreet Singh (supra) would become relevant.

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14. In the case of Sunder (supra), this Court in paragraph 23  

has stated thus:-

“23.   …….We  make  it  clear  that  the  compensation awarded would include not only  the total sum arrived at as per sub-section (1)   of  Section 23 but the remaining sub-sections  thereof as well. It is thus clear from Section 34  that the expression “awarded amount” would   mean the amount of compensation worked out  in accordance with the provisions contained in  Section  23,  including  all  the  sub-sections  thereof.”

In paragraph 24, the Court further held as follows:-

“24.  The  proviso  to  Section  34  of  the  Act   makes the position further clear.  The proviso  says that  “if  such compensation” is not paid   within  one  year  from  the  date  of  taking  possession  of  the  land,  interest  shall  stand  escalated to 15% per annum from the date of   expiry of the said period of one year “on the  amount of compensation or part thereof which  has not been paid or deposited before the date   of  such  expiry”.  It  is  inconceivable  that  the  solatium  amount  would  attract  only  the   escalated  rate  of  interest  from the  expiry  of  one year and that there would be no interest   on solatium during the preceding period. What   the  legislature  intended  was  to  make  the  aggregate amount under Section 23 of the Act   to reach the hands of the person as and when  the award is passed, at any rate as soon as   he is deprived of the possession of his land.   Any delay in making payment of the said sum  should enable the party to have interest on the   

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said  sum  until  he  receives  the  payment.   Splitting  up  the  compensation  into  different  components  for  the  purpose  of  payment  of   interest  under  Section  34  was  not  in  the   contemplation  of  the  legislature  when  that   section was framed or enacted.”

15. The aforesaid decision of Sunder (supra) came to be  

considered  once  again  by  this  Court  in  the  case  of  

Gurpreet Singh (supra) and in paragraph 54 of the said  

judgment, this Court held thus:

“54. One other question also was sought to be  raised  and  answered  by  this  Bench  though  not referred to it. Considering that the question  arises in various cases pending in courts all   over the country, we permitted the counsel to  address us on that question. That question is   whether in the light of the decision in Sunder,   the awardee/decree-holder would be entitled  to  claim  interest  on  solatium  in  execution  though  it  is  not  specifically  granted  by  the  decree.  It  is  well  settled  that  an  execution  court  cannot  go  behind  the  decree.  If,   therefore,  the  claim  for  interest  on  solatium  had  been  made  and  the  same  has  been  negatived  either  expressly  or  by  necessary   implication  by the  judgment or decree of  the   Reference Court or of the appellate court, the   execution court will have necessarily to reject   the  claim  for  interest  on  solatium  based  on  Sunder on the ground that the execution court  cannot go behind the decree. But if the award   of the Reference Court or that of the appellate   court does not specifically refer to the question  of interest on solatium or in cases where claim  had  not  been  made  and  rejected  either   expressly or impliedly by the Reference Court  or the appellate court, and merely interest on  compensation  is  awarded,  then  it  would  be  open to the execution court to apply the ratio of   

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Sunder  and  say  that  the  compensation  awarded  includes  solatium  and  in  such  an  event interest on the amount could be directed  to  be deposited in execution.  Otherwise,  not.   We also clarify that such interest on solatium  can be claimed only in pending executions and  not  in  closed  executions  and  the  execution   court  will  be  entitled  to  permit  its  recovery  from the date of the judgment in Sunder (19-9- 2001)  and not for any prior period. We also  clarify  that  this  will  not  entail  any  reappropriation or fresh appropriation  by the   decree-holder. This we have indicated by way   of  clarification  also  in  exercise  of  our  power  under Articles 141 and 142 of the Constitution   of  India  with  a  view to  avoid  multiplicity  of  litigation on this question.”

16. It  is  no  doubt  true  that  the  execution  court  cannot  

examine the reasons so as to go behind the decree but if in the  

Award passed, the Reference Court makes a specific reference  

to payment of interest but without any such reference to the  

payment  of  interest  on  solatium  and  merely  payment  of  

interest on compensation is granted, then it would be open to  

the executing court to apply the ratio of  Sunder (supra) and  

declare that the compensation awarded includes solatium, and  

consequently, interest on the amount could be directed to be  

deposited  in  execution.  That  being  the  legal  position  as  

prevailing today, we cannot ignore the observations made in  

paragraph 54 of  the aforesaid judgment in  Gurpreet Singh  

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(supra) and we order accordingly that compensation awarded  

includes solatium and therefore interest on the said amount  

shall be paid by the respondent in the pending execution.

17. In  our  considered  opinion,  the  ratio  of  the  aforesaid  

decision is also applicable in view of the fact that such interest  

on solatium is claimed by the appellant herein in the pending  

adjudication  and  therefore,  we  observe  that  the  executing  

court was justified to permit recovery of interest on solatium  

from the date of judgment in  Sunder (supra), i.e., 19.9.2001  

and not for any prior period.

18. Having held  thus and allowing the  appeal  filed by the  

appellant to the aforesaid extent, we leave the parties to bear  

their own costs.  

 .................................……J.                      [Dr. Mukundakam Sharma]

                                                 ..................………………..J.  [Anil R. Dave]

New Delhi, October 22, 2010.

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