http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

PETITIONER: UNION OF INDIA & ORS.

       Vs.

RESPONDENT: AJAIB SINGH & ORS.

DATE OF JUDGMENT20/09/1995

BENCH: SUHAS C. SEN

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T SEN, J.      Special leave granted.      This is  a  case  of  acquisition  of  land  under  the Requisitioning and  Acquisition of  Immovable Property  Act, 1952. The  short question  that falls  for determination  is whether the  arbitrator had erred in enhancing the amount of compensation to  the flat  rate of  Rs.300/- per  parla  and awarding solatium  @ 30%  per annum  and interest  @ 9%  per annum for  the first  year and  thereafter 15% per annum for the subsequent  years from  the date  of possession  of  the property.      Land measuring  26.08321 acres  in  village  Daulatpur, Tehsil Pathankot,  District Gurdaspur was acquired under the Requisitioning and  Acquisition of  I movable  Property Act, 1952  by   the  Special  Land  Acquisition  Collector  by  a notification issued  on 30th  October, 1969.  The  competent authority awarded  compensation  for  the  acquired  land  @ Rs.60/- per  Marla. After a long lapse of time, the question of compensation was referred to an arbitrator.      Mr. Goswami,  on behalf  of the  appellants, has argued that there  was no dispute as to the quantum of compensation between  the   respondents  and   the  appellants   and  the compensation was  actually paid  to the  respondents and the respondents  duly  accepted  the  compensation  without  any protest. Under  Rule 9 of the Requisitioning and Acquisition of Immovable  Property Rules,  1953, the competent authority can pay  compensation only  after entering into an agreement in Form-K.  Mr. Goswami  has contended  that in  the instant case, compensation  was paid. There was no dispute as to the quantum of  compensation. An agreement in Form-K was entered into  with   the   respondents   before   payment   of   the compensation.      However, there  is no  averment in the pleading that an agreement in  Form-K was  entered into  by and  between  the competent authority  and the  respondents. But,  there is no dispute that  eight years  after compensation  was paid, the writ-petitioners raised  the dispute  as to  the quantum  of compensation and  made  an  application  for  referring  the dispute  to   the  arbitrator.  On  30th  March,  1987,  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

Additional District  Judge, Gurdaspur, as arbitrator awarded compensation  at  flat  rate  of  Rs.500/-  per  Marla.  The arbitrator also awarded solatium @ 30% and interest @ 9% per annum for the first year from the date of acquisition. i.e., 31.10.1969 and  15% per  annum for the subsequent years till the amounts were realised.      Aggrieved  by  this  award,  the  Government  preferred appeals to the High Court of Punjab and Haryana. The appeals were dismissed  by a  Single Judge of the High Court on 30th July, 1987.  Further appeals  were filed before the Division Bench of the High Court. Those appeals were dismissed on 5th April, 1990.      These Special  Leave Petitions were moved in this Court on 21st December, 1990. The dispute before this Court is not about  the   quantum  of   the  compensation  fixed  by  the Additional District Judge as arbitrator on 30th March, 1987. Notice was  issued only  on the  question  of  solatium  and interest. Mr.  Goswami, on  behalf of  the  appellants,  has contended that  there is  no basis  for granting solatium at 30% and  interest at  9% for  the first year and 15% for the subsequent years. He has pointed out that the Government was not at  fault in  this case  for the delay in appointment of the arbitrator.  Since the  compensation amount fixed by the Special Land Acquisition Collector had been accepted without any dispute, there was no scope for referring any dispute to an arbitrator under Section S (1) (b) of the Act. Therefore, the Government  should not be held responsible for the delay in the instant case.      The contention  on behalf of the appellant will have to be upheld  in the  facts  of  this  case.  Unlike  the  Land Acquisition Act, there is no provision in the Requisitioning and Acquisition  of Immovable  Property Act  for payment  of solatium and  interest.  Solatium  and  interest  have  been awarded in  the interest of justice in certain cases. But in the absence of special circumstances, such award of interest and solatium cannot be justified under the provisions of the Requisitioning and Acquisition of Immovable Property Act.      On behalf of the respondents, Mr. R.C. Pathak has drawn our attention  to a  judgment of  this Court  in the case of Union of India v. Hari Krishan Khosla, (1992 (2) SCALE 621). This  was   also  a   case  under   the  Requisitioning  and Acquisition of  Immovable Property  Act, 1952.  The ultimate decision in  this case  goes against  the contention  of Mr. Pathak. In  S.L.E. (C)  No.  1780/1991,  the  award  of  15% solatium and  6% interest  on enhanced  compensation was set aside. In  C.A. No.4688-94/1989  and C.A.  No. 2674-85/1989, award  of  solatium  and  interest  was  upheld  because  no arbitrator was appointed for a period of sixteen years.      In the  instant case,  it has  not been  established on behalf of  the respondent  that there  was any  delay in the appointment of  arbitrator on  the part  of  the  appellant. There is  nothing to  show that the respondents had demanded appointment of  arbitrator or  had disputed  the  amount  of compensation paid by the special Land Acquisition Collector. It is  true that  arbitrator was ultimately appointed at the instance of the respondent. But there is nothing to indicate that the  respondents had  earlier disputed  the  amount  of compensation or  had  demanded  appointment  of  arbitrator. There is  no dispute  that the compensation was accepted. It is for  the respondents  to establish  that it  was accepted under protest.  These facts have not been established by the respondents.      It is  true, in  the instant  case, there  had been  no delay on  the part of the Government in referring the matter to an  arbitrator. It has not been stated by the respondents

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

that they  had demanded  appointment of  an arbitrator, when they found  that the  compensation amount was inadequate. No letter or  any other  document has  been annexed to the writ petition or  produced before  this Court  in support  of the case of the respondents.      Therefore, we are of the view that in the facts of this case, the  arbitrator was  in error in allowing solatium and interest without coming to a decision as to the existence of any dispute  and the  failure of the Government to refer the matter to  an arbitrator. The appeals, therefore, are partly allowed. The  order relating  to  payment  of  solatium  and interest is set aside. There will be no order as to costs.