CHIMANLAL KUBERDAS MODI (D) BY LRS.versusGUJARAT INDUSTRIAL DEVELOPMENT CORP. & ORS.

                   [2010] 13 (ADDL.) S.C.R. 722


A          CHIMANLAL KUBERDAS MODI (D) BY LRS.
                                  v.
     GUJARAT INDUSTRIAL DEVELOPMENT CORP. & ORS.
               (Civil Appeal No. 1385 of 2004)
                        OCTOBER 22, 2010
B
      [DR. MUKUNDAKAM SHARMA AND ANIL R. DAVE,
                        JJ.]

        Land Acquisition Act, 1894 - s. 34 - Interest on solatium
C - Land belonging to appellant acquired - Award passed by
    Land Acquisition Collector -Reference application -
    Reference court passed decree - In the decree, the reference
    court made specific reference to payment of interest on
    compensation but did not make any reference to payment of
D   interest on solatium - Appellant filed execution application -
    Claimed interest on solatium in the pending adjudication -
    Executing court permitted recovery of interest on solatium,
    relying upon a Supreme Court judgment in Sunder case,
    which was delivered in the meanwhile - Order set aside by
E   High Court - On appeal, held: Though the execution court
    cannot examine the reasons so as to go behind the decree
    but since in the decree passed, the reference court made a
    specific reference to payment of interest but without any such
    reference to the payment of interest on solatium, it was open
F   to the executing court to apply the ratio of Sunder and declare
    that the compensation awarded includes solatium, and
    consequently, interest on the amount could be directed to be
    deposited in execution - Interest on solatium was claimed by
    the appellant in the pending adjudication, therefore, the
G   executing court was justified to permit recovery of interest on
    solatium from the date of judgment in Sunder, i.e., 19.9.2001
    and not for any prior period.

        The Land Acquisition Officer passed award in a land

H                                722
CHIMANLAL KUBERDAS MODI (D) BY LRS. v. GUJARAT         723
             INDUS. DEV CORPN.

acquisition case. Aggrieved by the award, the appellant       A
filed reference application under Section 18 of the Act.
The reference court enhanced the market value of the
land and further granted a) solatium at the rate of 30%,
b) increase of 12% from the date of publication, as also
c) increase in compensation in terms of Section 23(1A)        B
of the Land Acquisition Act, 1894. The claimants were also
held to be entitled to interest at the rate of 9% and
thereafter at 15% per annum on the entire amount
payable. Consequent thereto, the appellant filed an
execution application for recovery of the balance amount      c
as awarded by the reference court. While the execution
case was pending, the appellant also filed an application
for payment of the amount of interest payable under
Section 34 of the Act, at the rate of 9% for the first year
and 15% thereafter on the amount awarded by the
                                                              0
 reference court under Section 23(1A) and 23(2) of the Act.
The executing court issued warrant for recovery of
 balance amount and further interest from 1.7.2002, relying
on the ratio of the judgment of this Court in the Sunder
case, which was delivered in the meanwhile.
                                                              E
    Aggrieved by the order of the executing court, the
respondent filed a revision petition before the High Court
contending inter a/ia that the reference court did not
award interest on the aggregate amount and therefore,
the executing Court was not justified in awarding an          F
amount under Section 34 of the Act. The respondent
further contended that the ratio of the judgment in
Sunder's Case was not applicable to the facts of the
instant case because on the date when the decree was
passed, interest was not payable on the amount of             G
solatium as also on the amount payable under Section
23 of the Act. The High Court set aside the order passed
by the executing. court.

    In the instant appeal, the appellant submitted that
                                                              H
    724    SUPREME COURT REPORTS [2010) 13 (ADDL.) S.C.R.


A since the execution of the order passed in the reference
  case was pending on the date when the decision in the
  case of Sunder was delivered, the said decision should,
  therefore, have been relied upon as clearly held in
  Gurpreet Singh's case and on the basis of that benefit of
B payment of interest on solatium should have been given
  to the appellant.

      The question which, therefore, arose for
  consideration in the instant appeal was whether the
C appellant was entitled to payment of interest under
  Section 34 of the Land Acquisition Act, 1894 on the
  solatium (on the compensation paid) in terms of the
  Sunder case and further explained in the Gurpreet Singh
  case.

D         Allowing the appeal, the Court

        HELD:1. A bare perusal of the decree passed by the
  reference court indicates that in addition to the amount
  shown as compensation towards market value, solatium
E at the rate of 30% and increase of compensation at the
  rate of 12% per annum are also shown in the
  compensation schedule attached to the decree. The
  amount awarded in terms of the interest at the rate of 9%
  per annum which is shown to be included in the decree
  is, for reasons unclear, not indicated in the said schedule,
F but is specifically mentioned in the decree itself. Since a
  direction is made for payment of interest at the rate of 9%
  per annum and thereafter at 15% per annum in the
  decree, the appellant cannot be denied the benefit of the
  Interest on market value, which also includes solatium
G and for that purpose the decisions in the case of Sunder
  and Gurpreet Singh would become relevant. [Para 13)
  [729-F-H; 730-A]

      Sunder v. Union of India (2001) 7 SCC 211 and Gurpreet
H Singh v. Union of India (2006) 8 SCC 457 - relied on.
CHIMANLAL KUBERDAS MODI (D) BY LRS. v. GUJARAT            725
             INDUS. DEV. CORPN.

     2. Though .the execution court cannot examine the           A
reasons so as to go behind the decree but if in the award
passed, the reference court makes a specific reference
to payment of interest but without any such reference to
the payment of interest on solatium and merely payment
of interest on compensation is granted, then it would be         B
open to the executing court to apply the ratio of Sunders
case and declare that the compensation awarded
includes solatium and, consequently, interest on the
amount could be directed to be deposited in execution.
That being the legal position as prevailing today, one           c
cannot ignore the observations made in the judgment in
Gurpreet Singh and it is ordered accordingly that
compensation awarded includes solatium and, therefore,
interest on the said amount shall be paid by the
respondent in the pending execution. The ratio of the            0
aforesaid decision is also applicable in view of the fact
that such interest on solatium is claimed by the appellant
in the pending adjudication and, therefore, the executing
court was justified to permit recovery of interest on
solatium from the date of judgment in Sunder's case, i.e.,       E
19.9.2001 and not for any prior period. [Paras 16, 17] [732-
C-F]
                     Case Law Reference:
    (2001 > 1 sec 211         relied on            Para 1
                                                                 F
    (2006) s sec 457          relied on            Para 1
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1385 of 2004.

     From the Judgment & Order 20.02.2003 of the High Court      G
of Gujarat at Ahmadabad in Civil Revision Application No. 1148
of 2002.
                            WITH
Civil Appeal No. 1386 of 2004.                                   H
    726    SUPREME COURT REPORTS (2010] 13 (ADDL.) S.C.R.

A         Vibha Datta Makhija for the Appellants.

        Mohit Paul, Anip Sachthey, Hemantika Wahi, Renuka
    Shau for the Respondents.

          The Judgment of the Court was delivered by
B
         DR. MUKUNDAKAM SHARMA, J. 1. The only issue
    which arises for our consideration in these appeals is whether
    or not the appellant would be entitled to payment of interest
    under Section 34 of the Land Acquisition Act, 1894 on the
c   solatium on the compensation paid in terms of the decision of
    the case in Sunder Vs. Union of India reported in (2001) 7
    sec 211 and further explained in the case of Gurpreet Singh
    Vs. Union of India reported in (2006) 8 SCC 457.
       2. The land belonging to the appellant was acquired by
D issuing a notification under Section 4 and 6 of the Land
  Acquisition Act, 1894 (hereinafter referred to as "the Act"). A
  notification was issued on 4.10.1973 for the beneficiary,
  namely, Respondent No. 1 under Section 4 of the Act.
  Thereafter another notification under Section 6 of the Act was
E issued by the competent authority on 4.11.1976. The Land
  Acquisition Officer passed an Award in the land acquisition
  case wherein he determined the market value of the land at Rs.
  1.28 per sq. meter. Possession of the land was also taken over
  by the Land Acquisition Officer on the date of the passing of
F the Award. Pursuant to the aforesaid Award, the appellant was
  paid an amount of Rs. 73, 191.09.
       3. Being aggrieved by the Award dated 22.9.1986,
  determining the market value of the land at Rs. 1.28 per sq.
  meter, the appellant filed two references under Section 18 of
G the Act. During the pendency of the aforesaid reference before
  the Reference Court, the respondent paid a further sum of Rs.
  1,18,557.08 towards the balance compensation for the land.
      4. By a judgment and order dated 26.2.1999, the
H Reference Court disposed of the case, determining the market
  CHIMANLAL KUBERDAS MODI (D) BY LRS. v. GUJARAT 727
  INDUS. DEV. CORPN. [DR. MUKUNDAKAM SHARMA, J.]
 value of the land at Rs. 30 per sq. meter. While disposing of     A
 the said case, the following decree was passed by the
 Reference Court.
       1.   The reference cases are hereby partly allowed and
            the Respondents are hereby ordered to pay Rs.
            28.72 Ps. over and above Rs. 1.28 Ps. Per Sq. Mtr.     B
            already awarded by the Land Acquisition Officer for
            the acquired lands.
       2.   The claimants be also paid the solatium at the rate
            of 30% and interest at the rate of 9% per annum till   c
            one year after the possession of the acquired lands
            was taken by the Government, and if the amount is
            not paid within one year, the claimants is entitled
            to the interest at the rate of 15% per annum
            thereafter till the entire amount is deposited.
                                                                   D
       3.   The claimants are also entitled to get increase of
            12% from the date of publication of notification u/s
            4 i.e. dated November 15, 1973 to the date of
            award i.e. September 22, 1986, passed by the
            Land Acquisition Officer, as provided u/s 23 (1A)      E
            of the Land Acquisition Act.
            *******     ********        ********        *******
      5. In terms of the aforesaid decree passed, a Schedule
 was also attached to the said judgment in which compensation      F
 payable to the appellant to the extent of market value of the
 land, solatium at the rate of 30% on the amount calculated and
 increase at the rate of 12 % per annum on the market value
 under Section 23(1A) was calculated.
       6. Consequent thereto, the appellant filed an execution     G
· application for recovery of the balance amount as awarded by
  the Reference Court. During the pendency of the aforesaid
  execution application, the respondent paid an amount as part
  payment of the dues payable by the respondent to the
  appellant. While. the said execution case was pending, the       H
    728   SUPREME COURT REPORTS [2010] 13 (ADDL.) S.C.R.


A appellant also filed an application for payment of the amount
  of interest payable under Section 34 of the Act, at the rate of
  9% for the first year and 15% thereafter on the amount awarded
  by the Reference Court under Section 23(1A) and 23(2) of the
  Act. As against the said prayer of the appellant, the respondents
B filed objection. The said objection was heard by the executing
  court, and by an order dated 9.9.2002, the executing court
  rejected the objection filed by the respondent No. 1 herein and
  issued a warrant for recovery of balance amount and further
  interest from 1.7.2002, relying on the ratio of the judgment of
c this Court in Sunder Vs. Union of India (supra).
       7. Being aggrieved by the aforesaid order passed by the
  executing court, the respondent filed a revision petition before
  the Gujarat High Court contending inter alia that the Reference
  Court did not award interest on the aggregate amount and
D therefore, the executing Court was not justified in awarding an
  amount under the aforesaid head of Sec;tion 34 of the Act. It
  was also contended that the ratio of the judgment in Sunder
  (supra) is not applicable to the facts of the present case
  because on the date when the decree was passed, interest
E was not payable on the amount of solatium as also on the
  amount payable under Section 23 of the Act.
        8. By a judgment and order passed on 20.2.2003, the High
  Court upheld the aforesaid contentions and allowed the appeal
  filed by the respondent and set aside the order passed by the
F executing court on 9.9.2002.
        9. Being aggrieved by the aforesaid order, the appellants
  filed the present Special Leave Petition in which leave was
  granted and on which we have heard the learned counsel
G appearing for the parties.
        1O. The learned counsel appearing for the appellant
  reiterated the same submissions that the decisions in the cases
  of Sunder (supra) and Gurpreet Singh (supra) are clearly
  applicable to the facts and circumstances of the present case.
H She also submitted that since the execution of the order passed
 CHIMANLAL KUBERDAS MODI (D) BY LRS. v. GUJARAT 729
 INDUS. DEV. CORPN. [DR. MUKUNDAKAM SHARMA, J.]

in the reference case was pending on the date when the              A
decision in the case of Sunder (supra) was delivered, the said
decision should, therefore, have been relied upon as clearly
held in Gurpreet Singh's case (supra) and on the basis of that
benefit of payment of interest on solatium should have been
given to the appellant.                                             B
     11. Learned counsel appearing for the respondent,
however, refuted the aforesaid submissions by contending that
the decisions in the case of Sunder (supra) as also of Gurpreet
Singh (supra) are not applicable to the facts and circumstances
of the present case.                                                C
      12. Having regard to the aforesaid submissions and
having gone through the cited decisions, we have scrutinized
the records before us. The decree passed by the Reference
Court has been extracted hereinbefore. The Reference Court
                                                                    D
in the decree has allowed the prayer for compensation towards
the market value of the land as also solatium at the rate of 30%
and also granted increase of 12% from the date of publication,
as also an increase in compensation in terms of Section
23(1A) of the Act.
                                                                    E
     13. The claimants were also held to be entitled to interest
at the rate of 9% and thereafter at 15% per annum on the entire
amount payable. In the decree, it was also mentioned that the
claimants would be entitled to get compensation as stated in
the schedule attached therein. The schedule is attached with        F
the decree. A bare perusal of the same indicates that in addition
to the amount shown as compensation towards market value,
solatium at the rate of 30% and increase of compensation at
the rate of 12% per annum are also shown in the said schedule.
The amount awarded in terms of the interest at the rate of 9%       G
per annum which is shown to be included in the decree is, for
reasons unclear, not indicated in the said schedule, but is
specifically mentioned in the decree itself. Since a direction is
made for payment of interest at the rate of 9% per annum and
thereafter at 15% per annum in the decree, the appellant cannot
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    730     SUPREME COURT REPORTS [2010] 13 (ADDL.) S.C.R.


A be denied the benefit of the interest on market value, which also
  includes solatium and for that purpose the decisions in the case
  of Sunder (supra) and Gurpreet Singh (supra) would become
  relevant.
      14. In the case of Sunder (supra), this Court in paragraph
B 23 has stated thus:-
          "23 ........ We make it clear that the compensation awarded
          would include not only the total sum arrived at as per sub-
          section (1) of Section 23 but the remaining sub-sections
c         thereof as well. It is thus clear from Section 34 that the
          expression "awarded amount" would mean the amount of
          compensation worked out in accordance with the
          provisions contained in Section 23, including all the sub-
          sections thereof."
D         In paragraph 24, the Court further held as follows:-
          "24. The proviso to Section 34 of the Act makes the
          position further clear. The proviso says that "if such
          compensation" is not paid within one year from the date
          of taking possession of the land, interest shall stand
E         escalated to 15% per annum from the date of expiry of the
          said period of one year "on the amount of compensation
          or part thereof which has not been paid or deposited
          before the date of such expiry". It is inconceivable that the
          solatium amount would attract only the escalated rate of
F         interest from the expiry of one year and that there would
          be no interest on solatium during the preceding period.
          What the legislature intended was to make the aggregate
          amount under Section 23 of the Act to reach the hands of
          the person as and when the award is passed, at any rate
G         as soon as he is deprived of the possession of his land.
          Any delay in making payment of the said sum should
          enable the party to have interest on the said sum until he
          receives the payment. Splitting up the compensation into
          different components for the purpose of payment of interest
H
CHIMANLAL KUBERDAS MODI (D) BY LRS. v. GUJARAT                 731
INDUS. DEV. CORPN. [DR. MUKUNDAKAM SHARMA, J.]

    under Section 34 was not in the contemplation of the               A
    legislature when that section was framed or enacted."
    15. The aforesaid decision of Sunder (supra) came to be
considered once again by this Court in the case of Gurpreet
Singh (supra) and in paragraph 54 of the said judgment, this
Court held thus:                                                       B

       "54. One other question also was sought to be raised and
       answered by this Bench though not referred to it.
       Considering that the question arises in various cases
       pending in courts all over the country, we permitted the        c
       counsel to address us on that question. That question is
       whether in the light of the decision in Sunder, the awardee/
       decree-holder would be entitled to claim interest on
       solatium in execution though it is not specifically granted
       by the decree. It is well settled that an execution court
                                                                       0
       cannot go behind the decree. If, therefore, the claim for
       interest on solatium had been made and the same has
       been negatived either expressly or by necessary
       implication by the judgment or decree of the Reference
       Court or of the appellate court, the execution court will
       have necessarily to reject the claim for interest on solatium   E
       based on Sunder on the ground that the execution court
       cannot go behind the decree. But if the award of the
       Reference Court or that of the appellate court does not
       specifically refer to the question of interest on solatium or
       in cases where claim had not been made and rejected             F
       either expressly or impliedly by the Reference Court or the
       appellate court, and merely interest on compensation is
       awarded, then it would be open to the execution court to
       apply the ratio of Sunder and say that the compensation
       awarded includes solatium and in such an event interest         G
       on the amount could be directed to be deposited in
       execution. Otherwise, not. We also clarify that such interest
       on solatium can be claimed only in pending executions
       and not in closed executions and the execution court will
  .,._ be entitled to permit its recovery from the date of the         H
    732      SUPREME COURT REPORTS [2010] 13 (ADDL.) S.C.R.


A         judgment in Sunder (19-9-2001) and not for any prior
          period. We also clarify that this will not entail any
          reappropriation or fresh appropriation by the decree-
          holder. This we have indicated by way of clarification also
          in exercise of our power under Articles 141 and 142 of the
B         Constitution of India with a view to avoid multiplicity of
          litigation on this question."
         16. It is no doubt true that the execution court cannot
    examine the reasons so as to go behind the decree but if in
    the Award passed, the Reference Court makes a specific
C   reference to payment of interest but without any such reference
    to the payment of interest on solatium and merely payment of
    interest on compensation is granted, then it would be open to
    the executing court to apply the ratio of Sunder (supra) and
    declare that the compensation awarded includes solatium, and
D   consequently, interest on the amount could be directed to be
    deposited in execution. That being the legal position as
    prevailing today, we cannot ignore the observations made in
    paragraph 54 of the aforesaid judgment in Gurpreet Singh
    (supra) and we order accordingly that compensation awarded
E   includes solatium and therefore interest on the said amount
    shall be paid by the respondent in the pending execution.
         17. In our considered opinion, the ratio of the aforesaid
    decision is also applicable in view of the fact that such interest
    on solatium is claimed by the appellant herein in the pending
F   adjudication and therefore, we observe that the executing court
    was justified to permit recovery of interest on solatium from the
    date of judgment in Sunder (supra), i.e., 19.9.2001 and not for
    any prior period.
G        18. Having held thus and allowing the appeals filed by the
    appellants to the aforesaid extent, we leave the parties to bear
    their own costs.

    B.B.B.                                          Appeal allowed.