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PETITIONER: STATE OF HIMACHAL PRADESH & ORS.

       Vs.

RESPONDENT: SHRI DHARAM DAS

DATE OF JUDGMENT25/08/1995

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. HANSARIA B.L. (J)

CITATION:  1996 AIR  127            1995 SCC  (5) 683  JT 1995 (6)   519        1995 SCALE  (5)220

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R Leave granted.      Though notice  has been served on the respondent on May 23, 1995,  none is  appearing either  through counsel  or in person.  Notification   under  Section   4(1)  of  the  Land Acquisition Act,  1894 [for  short, ‘the Act’] was published on February  27, 1986  and the Collector passed the award on March 29,  1987. Dissatisfied  therewith, the respondent had filed C.W.P. No.125/86 and the High Court by its order dated July 23, 1986 held that :      "On the  amount of  compensation payable      to the  petitioner in  respect of  land,      interest at  the rate of 12 per cent per      annum shall be paid from the date of the      taking over  of possession till the date      of payment  of interim  compensation and      of  final   compensation,  if  there  is      enhancement.   The    interest   payable      accordingly  is  in  the  nature  of  an      equitable compensation and such interest      will be in addition to the compensation,      solatium and  interest at  the statutory      rate  which   will  be   paid   to   the      petitioner under  the law  in respect of      land, whether  awarded by  the Collector      or  enhanced  by  the  Court,  and  such      interest  will   not   be   taken   into      consideration in  any  proceeding  under      the Act  while  awarding  the  statutory      compensation." Following that direction the award has been made thus:      "Accordingly,  the  award  was announced by the Land      Acquisition Collector and the respondent was paid as      under :-      (a) Compensation for  the   land       Rs.1750.00

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    (b) Interest @  12%  on  Rs.1750      (from Oct. 1972 to 31.3.87)      in the  nature of  equitable compensation  as per order      dated 23.7.1986 of Hon’ble High Court. Rs.3045.00      (c) Amount awarded @ 12% from Oct. 1972 to March 1987      u/s.23(1-A)  of  the      Land Acquisition Act.                  Rs.3045.00      (d) Solatium @ 30%                     Rs. 525.00                                         -----------------                                             Rs.8365.00                                         -----------------" A reading  thereof clearly indicates that advance possession was taken  in 1972,  though notification under s.4(1) of the Act was  published on  February  19,  1986.  The  Court  has awarded under  s.23(1A) additional amount at 12% p.a. of the compensation from  October  19,  1972  to  March  1987.  The question, therefore,  is whether  the Court  is empowered to award 12%  interest, in  addition to benefits under s.23(1A) of the  Act as  amended under  Amendment Act 68 of 1984. The controversy is  no longer  res integra. It is settled law by catena of  decisions of this Court. In Mir Fazeelath Hussain &  Ors.  v.  Special  Deputy  Collector,  Land  Acquisition, Hyderabad [(1995)  3 SCC  208], a  bench of  three Judges to which one  of us  B.L. Hansaria, J. was a member, dealt with the power  of the  Court  to  grant  interest  on  equitable consideration and held thus :      "10. It  has also been submitted by Shri      Madhava  Reddy   that  higher   rate  of      interest may  be ordered  to  do  equity      between the  parties. We  are unable  to      procede, as,  had present been a case of      rewarding of any interest, we would have      so, because,  interest in such cases may      become payable  on  equity,  for  it  is      meant to  make good the loss suffered by      a person  due to  delayed payment.  This      view has  been  reiterated  recently  by      this Court  in Kalimpong Land & Building      Ltd. v.  State of  West Bengal [1994 (6)      SCC 720],  in which  payment of interest      was ordered,  even when  acquisition was      under Requisitioning  and Acquisition of      Immovable  Property   Act,  1952,  which      statute has  made no specific provision,      unlike the  Act at  hand, for payment of      interest. But  equity has  no role  when      the  question   relates   to   rate   of      interest. Whether  the rate  of interest      should be 6% or 9% is not a matter which      would  require   invocation  of  court’s      equitable jurisdiction.  The same has to      be governed  by statutory provision. Had      the rate  of interest  been too  low, we      could have  perhaps  on  equity  granted      some relief.  But 6%  has been  the rate      for a  very long  period insofar  as the      Act is concerned as the enhancement came      only in 1984 whereas the Act is of 1894.      So,  we  are  not  satisfied  if  equiry      demands granting of relief in question." Similar view  was taken  by this Court in several decisions. It is  settled legal  position that  when the  statute deals with payment  of interest to the claimants either under s.31 or s.28 of the Act, the Court has no power to award interest in a  manner  other  than  the  one  in  which  the  statute

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prescribes payment. It is seen that in a case where decision has been taken exercising the urgency power under s.17(4) of the Act and the award was made subsequent to the taking over possession, obviously  the claimant  would  be  entitled  to payment of  interest under  s.31 from  the  date  of  taking possession till  the amount  is deposited  pursuant  to  the award of  the Collector  under s.11.  On reference,  if  the compensation is  enhanced, under  s.28 of  the Act  and  the proviso thereto the claimants would be entitled to the rates of  interest   specified  therein.   Apart  from  these  two provisions, there  is  no  other  provision  under  the  Act empowering the Court to award interest on equitable grounds, in addition  to statutory rates of interest prescribed under the Act.  Equitable consideration  has no  role to  play  in determination of the compensation and the manner of awarding interest as  enjoined under  the  Act.  The  Act  is  to  be administered in  the manner  laid in the Act and in no other way. As a concomitance, the equity jurisdiction of the Court is taken out and the Act enjoins the Court to grant interest as per the statutory rates specified in the Act.      Thus, we  hold that  the finding of the High Court that the claimants would be entitled to payment of interest @ 12% on equitable grounds from the date of taking possession till date of  deposit under  s.12 in  addition to  the  statutory rates of  interest and  12% additional amount under s.23(1A) for the same period is clearly illegal.      The appeal  is accordingly allowed and the order of the High Court  to the  extent of granting 12% interest from the date of  taking possession,  namely, October, 1972 till date of  deposit,   namely,  March,   1987,  is  illegal  and  is accordingly set  aside. But  the direction to pay additional amount under  s.23(1A) from  the date  of taking  possession till date  of  making  the  award  is  valid  and  needs  do interference as the claimants did not challenge the validity of the  notification under  s.4(1) and  the possession taken must be referable to it. No costs.