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CASE NO.: Appeal (civil)  520 of 2008

PETITIONER: Ram Narayan Gupta

RESPONDENT: State of M.P.

DATE OF JUDGMENT: 18/01/2008

BENCH: ASHOK BHAN & AFTAB ALAM

JUDGMENT: JUDGMENT

O R D E R

CIVIL APPEAL NO.520 OF 2008 [Arising out of S.L.P.(C)No.18158 of 2005]

       Leave granted.         This appeal has been filed by the claimant-landholder.         Land Acquisition Officer (LAO) awarded compensation at the rate of Rs.3000/- per  bigha. In addition, solatium @ 10%  and interest @ 6% p.a. was also awarded by the  LAO.  On reference, the Reference Court determined the potential value of the land at the  rate of Rs.1/- per sq.ft. and accordingly determined the value of the land at Rs.85,500/- .  Out of the said amount, 40% of the amount, viz., Rs.34200/- was deducted towards  development charges.  Thus, an amount of Rs.51,300/- came to be awarded as  compensation.  However, the Reference Court, instead of granting solatium at the rate of  30% and statutory interest, maintained the solatium and interest granted by the LAO.          Appellant-claimant filed an appeal before the High Court  in which he did not challe nge  the amount of compensation awarded.  Only  challenge was  for  enhancement  of solatium  and  

C.A.No.520/08 .... (Contd.) - 2 - interest.  Appellant claimed solatium at the rate of 30% and interest at the rate of 15%  p.a.  The High Court partly allowed the appeal and increased the solatium @ 30% but  maintained the interest @ 6% p.a.         Claimant, being aggrieved, has filed this appeal for enhancement of interest.         Counsel for the appellant submitted that the courts have erred in granting interest  at  the rate of 6% p.a.  There is no reason for not awarding interest at the rate provided under   the Statute.  That there was no discretion with the court to award interest at a rate lower  than what was provided under the Statute.          We agree with the contention raised by the counsel for the appellant and accordingly ,  modify the judgment of the High Court and direct that the appellant be paid statutory  interest at the rate of 9% p.a. for the first year and thereafter at the rate of 15% p.a.         The appeal is allowed accordingly.