NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  2290          OF 2010 [Arising out of SLP (C) No. 12328 of 2009]

Union of India & Others .. Appellant (s)

Versus

Seneth Munda & Others .. Respondent(s)

J U D G M E N T

Dalveer Bhandari, J.

1. Leave granted.

2. We have heard the learned counsel for the parties.

3. This appeal is directed against the judgment and order  

dated  2.4.2009 passed  by  the  High  Court  of  Jharkhand at  

Ranchi in Contempt Case (Civil) No. 815 of 2007, whereby the  

appellants have been directed to pay the interest at the rate of  

12% per annum on the awarded amount from 22.6.2003 to

25.11.2006.   The  said  amount  was  directed  to  be  paid  by  

30.5.2009.

4. Brief facts necessary for the disposal of this appeal are  

recapitulated as under:

5. In  the  year  1986,  the  Union  of  India  after  paying  

compensation acquired the land belonging to the respondents  

for construction of a Camp for military operation, under the  

Requisition and Acquisition of Immovable Property Act, 1952  

(“RAIP Act”).  The land owners, respondents herein, raised a  

dispute over the amount of compensation and an arbitrator  

was  appointed.   The  Arbitral  Tribunal  passed  an  award  in  

favour of the respondents directing the Union of India to pay  

compensation at the rate of Rs.2000/- per decimal of land and  

solatium at the rate of 20% and interest at the rate of 9% per  

annum on the balance amount payable to the respondents.  

The Arbitral Tribunal further directed that the amount payable  

to  the  respondents  shall  be  paid  within  a  period  of  three  

months from the date of passing the award, failing which the  

Union of India shall have to pay interest at the rate of 12% per  

annum.

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6. The  High  Court  by  its  order  dated  27.4.2007,  while  

upholding the award of the Arbitral Tribunal, reduced the post  

award interest from 12% to 9% per annum. The High Court,  

however,  directed  that  if  the  amount  is  not  paid  within  a  

period  of  three  months  from  the  date  of  the  order,  the  

respondents will become entitled to post award interest at the  

rate of 12% per annum.  The limit of three months to execute  

the award was extended by the High Court  by another two  

months.

7. Aggrieved by the  order  dated  27.4.2007 passed by the  

High Court,  the Union of India filed a special  leave petition  

before  this  Court,  which  was  dismissed  on  the  ground  of  

delay.

8. The  respondents  filed  a  Contempt  Petition  before  the  

High  Court  of  Jharkhand  at  Ranchi,  alleging  that  the  

appellants have not complied with the award passed by the  

Arbitral Tribunal and upheld by the High Court vide its order  

dated 27.4.2007. The High Court by the impugned order has  

directed the appellants Union of India to calculate and pay the  

interest  at  the  rate  of  12%  per  annum  from  22.6.2003  to  

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25.11.2006 on the amount of Rs.1,37,98,860.08.  Aggrieved by  

the aforesaid order passed by the High Court in the contempt  

petition,  the Union of  India has filed this  appeal  by special  

leave.

9. Learned  counsel  for  the  respondents  submits  that  the  

respondents  are  entitled  to  interest  at  the  rate  of  12% per  

annum on  the  awarded  amount,  solatium and  also  on  the  

amount  of  interest  as  directed  by  the  High  court  as  the  

appellants  have  failed  to  make  payment  within  the  time  

granted by the High Court.

10. Learned  counsel  for  the  appellants  submits  that  the  

respondents are entitled to the awarded amount and solatium  

with  interest  at  the  rate  of  9%  per  annum.   She  further  

submits  that  the  whole  amount  has  been  paid  by  the  

appellants and a copy of the compliance report was filed before  

the High Court.

11. This Court in Union of India v.  Chajju Ram (dead) by  

L.Rs. & Others (2003) 5 SCC 568, has clearly laid down that  

the land owners under the Land Acquisition Act vis-à-vis the  

RAIP Act or the Defence of India Act, are not similarly situated  

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and solatium and interest on the amount of compensation are  

not legally sustainable.

12. We are of the considered view that payment of interest at  

the rate of 12% per annum from 22.6.2003 to 25.11.2006 on  

the amount of Rs,1,37,98,860.08 tantamounts to payment of  

interest on interest, which is not permissible under the RAIP  

Act.   Consequently,  the  impugned  order  of  the  High  Court  

dated  2.4.2009  is  set  aside,  which  allowed  the  contempt  

petition filed by the respondents before the High Court. This  

appeal is accordingly allowed and disposed of.   In the facts  

and circumstances of this case, we direct the parties to bear  

their respective costs.

….…………………………………….J. [ DALVEER BHANDARI ]

      …………………………………………J.   [ A. K. PATNAIK ]

New Delhi, March 10, 2010.

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