http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 2  

PETITIONER: YADAVRAO P. PATHADE (DEAD) BY LRS. ETC.

       Vs.

RESPONDENT: STATE OF MAHARASHTRA

DATE OF JUDGMENT:       25/01/1996

BENCH: K. RAMASWAMY, S. SAGHIR AHMED, G.B. PATTANAIK

ACT:

HEADNOTE:

JUDGMENT:                          WITH  CIVIL APPEAL NOS.2873-75,2876-2911,2913 2912 &2914/96  ----------------------------------------------------- (Arising out of SLP (C) Nos.15861-63, 15865-99, 16381,    18455 of 1993 and SLP (C) No.3747 /96 [CC-22430])                        O R D E R      Leave granted.      The only  question is:  whether the appellants are entitled to  payment of  interest on  solatium  payable under Section  23(2) of the Land Acquisition Act (Act 1 of 1894)  (for short, ’the Act’). The additional amount was awarded by the reference Court on December 15, 1979 enhancing the  compensation.  The  High  Court  by  its judgment  dated  4.12.1995  has  further  enhanced  the compensation to  Rs.42,056-15. The  appellants  claimed interest on solatium of Rs,6308-42 which was disallowed by  the  High  Court.  The  interest  on  solatium  was calculated from  1.1.1967 to 31.12.1971. The appellants placed reliance  on a judgment of this Court in Periyar and Pareekanni  Rubbers Ltd.  vs. State  of Kerala (AIR 1990 SC 2192) contending that interest on solatium is a part of  the component  under Section  23(1) of the Act and that,  therefore, they  are entitled  to payment of the interest.  The High Court, therefore, was not right in refusing  interest on  solatium. To  appreciate  the contention it is necessary to look to the provisions of the Act.      Section 28  gives power  to  the  Court  to  award interest when  the Court  enhances the  compensation in excess of  amount awarded  by the Collector at the rate specified therein,  namely, preceding the Amendment Act 68 of 1984, at 6% per annum under the Central Act or at the rates  as per  the appropriate  Act amended  by the local amendments  to the  Act. After  the Amendment Act coming  into   force  w.e.f.  September  24,  1984  the claimants would  be entitled to interest at 9% p.a. for one year  from the  date of  taking possession  and  on expiry thereof,  at 15%  p.a.  till  the  date  of  the deposit into the Court.      Section 23(1)  envisages that  in determination of

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

compensation to  be awarded for the land acquired under the Act,  the Court  shall take  into consideration the respective  criteria   laid  in   Clauses  (1)  to  (6) applicable to  the given  facts of the case. Therefore, the Court is empowered under Section 23(1) to determine compensation to be awarded to the claimant.      Section 23(2)  provides that  "in addition" to the market value  of the  land as above provided, the Court shall in  every case  award a  sum at 15% preceding the Amendment Act  and after the Amendment Act, 30% p.a. on such market  value in  consideration of  the compulsory nature of  the acquisition. The legislature, therefore, made a  distinction between  compensation under Section 23(1) and the additional amount on such market value as solatium  in  consideration  of  compulsory  nature  of acquisition.  In  other  words,  Section  28  does  not comprehend payment  of interest  on  solatium  when  it expressly mentions  payment of interest on compensation under Section 28 referable to Section 23(1) of the Act. Thus the  High Court was right in not awarding interest on solatium. Similar view was taken by this Court after Periar’s case  (supra) by  a three-Judge  Bench in Prem Nath  Kapur   &  Anr.   etc.  v.  National  Fertilizers Corporation of  India Ltd.  & Ors.  (C.A.11398/95 etc.) decided on November 29, 1995.      It is  true that  in Periyar’s case this Court had held that interest on solatium is part of the component under  Section   23(1).  Unfortunately,   neither   the provisions were  considered nor  the distinction of the above provisions had been brought to the notice of this Court at  that time. Therefore, mistaken view was taken to hold  that interest  on  solatium  is  part  of  the component of  compensation under  Section 23(1)  of the Act. It  is needless  to mention  that under Section 28 the claimants  will be  entitled  to  the  interest  on enhanced compensation from the date of the award of the Court under  Section 26  and on appeal under Section 54 on the  respective compensation, if enhanced, till date of deposit  in  the  Court.  Therefore,  the  State  is required to  deposit the  balance of  interest  on  the enhanced compensation  till date  of deposit  into  the Court.      The appeals  are accordingly  disposed of  but, in the circumstances, without costs..