Holding

Interest on solatium under the Land Acquisition Act is payable from the date of entitlement under Sections 23(1A) and 28, and the observations in Gurpreet Singh are obiter and not binding, making the High Court’s limitation to post‑19 Sept 2001 invalid.

Summary

The appellants, Periyar & Pareekanni Rubbers Ltd., challenged a Kerala High Court order that limited interest on solatium to the period after 19 September 2001, the date of the Sunder judgment. The land had been acquired under the Land Acquisition Act, 1894 and the Reference Court had awarded enhanced compensation including a 30% solatium but did not specify interest on the solatium. The Supreme Court examined whether the High Court could rely on the Gurpreet Singh decision, which merely observed that interest on solatium could be awarded from the Sunder date in pending executions. The Court held that the Constitution Bench decision in Sunder is binding and that interest on solatium must be payable from the date of entitlement under Sections 23(1A) and 28, not only from 19 Sept 2001. Consequently, the portion of the High Court judgment restricting interest was set aside and the State was directed to compute and pay interest from the appropriate date. The civil appeals were allowed.

Issues considered

The applicability of the Sunder v. Union of India judgment on interest payable on solatium under the Land Acquisition Act.
Whether the observations in Gurpreet Singh v. Union of India constitute binding precedent for interest on solatium.
The correct date from which interest on solatium should accrue under Sections 23(1A) and 28 of the Land Acquisition Act.

Legislation cited

Land Acquisition Act, 1894s. 11, s. 15, s. 23, s. 23(1), s. 23(1A), s. 23(2), s. 24, s. 28, s. 31, s. 34

Subjects

Land acquisitionSolatiumStatutory interestCompensationExecution of decreeBinding precedentSunder caseGurpreet Singh caseLarger bench referral

Judgment

[2015] 11 S.C.R. 1

M/S PERIYAR & PAREEKANNI RUBBERS LTD. A
v.
STATE OF KERALA
(Civil Appeal Nos. 7034-7037 of2015)
B
SEPTEMBER 14, 2015
[V. GOPALA GOWDA AND ADARSH KUMAR GOEL, JJ.]
Land Acquisition Act, 1894- ss. 23(1A), 28, 34- Land
acquisition - Claim of solatium for the enhanced amount of c
compensation and interest thereof- Interest on solatium -
Date of payment of solatium -Acquisition of rubber estate -
Award passed for solatium and interest on compensation
including solatium - As regards enhanced compensation,
High Court upheld that solatium is payable by State D
Government for the enhanced compensation awarded for the
market value of the entire land, thus, it provided solatium for
that porlion of land value based on the capitalization method
of yielding rubber trees and directed the respondents to
compute balance amount payable under the decree - E
However, the High Courl awarded the interest on solatium
w.e.f. 19.09.2001, the date of judgment delivered by
Constitution Bench in Sunde r's case instead offrom the date
of their entitlement under the provisions of ss. 23(1 A) and 28
- On appeal, held: In view of difference of opinion between F
two judges, matter referred to larger Bench.

Referring the matter to larger Bench, the Court

PER V. GOPALA GOWDA.J: G
HELD: 1.1 From the interpretation of provisions of
Sections 11, 15, 23, 24 and 31 of the Land Acquisition
Act, 1894, it is clear that the amount of compensation in
the Collector's Award includes not only the amount H
1
2 SUPREME COURT REPORTS [2015] 11 S.C.R.

A determined under Section 23(1) of the Land Acquisition
Act, 1894 but also the additional amount of solatium as
stipulated under Section 23(2) and amount payable
under Section 23(1A) of the Act. [Para 21] [15-G-H; 16-A]

B 1.2 The judgment rendered by the Constitution
Bench of this Court in Sunder's case is the binding
precedent on the question of payment of legislative
statutory interest payable on solatium under Sections
23(1A), 28 and 34 of the Act which cannot be deprived to
C the claimant/decree holde·r by the court. As the said
judgment is binding upon the State Government it cannot
contend that it is not liable from the date as provided
under the provisions of the Act. [Para 25] [19-G-H; 20-A]

D 1.3 The Constitution Bench judgment in Sunder's
case is aptly applicable to the fact situation of the instant
case for the reason that the enhanced compensation
includes the solatium @30% as provided under Section
23(2) of the Act. Therefore, the claimant/decree holder is
E entitled for the interest on the solatium component which
is part of the compensation payable by the State
government to the claimant. The Execution Court held
that the claimant/decree holder company is entitled to
claim solatium only in respect of the enhanced
F compensation provided for the land alone which has
been separately fixed, but, not in respect of that portion
of market value of the land based on capitalization
method of the yielding rubber trees for the planted area
which was separately fixed by the Reference C::ourt in
G its Award. The High Court was right in holding that the
claimant is entitled for the interest not only in respect of
the land but also with respect to the trees standing on
the land of which the market value is determined by the
H Reference Court. However, it awarded the interest on
M/S PERIYAR & PJ\REEKANNI RUBBERS LTD. v. STATE 3
er KERALA
solatium from 19.09.2001 and not for the prior period by A
placing reliance on Gurpreet Singh case. [Para 26] [20-
B-F]

1.4 From the facts of the instant case and in the
light of law laid down on the question of payment of B
interest on solatium by the Constitution Bench in
Sunder's case, it is amply clear that the said case is the
binding precedent. As far as Gurpreet Singh's case is
concerned, the question which arose for its
consideration was only with regard to the rule of C
appropriation in execution of the Award passed under
the provisions of the Act. While answering the said
question of law after referring to the relevant provisions
of the Act, it incidentally made some observation with
regard to the payment of interest on solatium which is D
only an obiter but not the binding precedent as that
question did not fall for consideration before the
Constitution Bench. For the reason that the binding
precedent laid down by the Constitution Bench of this
Court in Sunder's case on the question of payment of E
interest on the solatium to the claimant/decree holder
from the date of entitlement as provided under the
provisions of the Act. [Para 30] [25-H; 26-A-E]

1.5 In view of the reasons assigned with reference F
to Sunder and Gurpreet Singh cases, the impugned
common judgment and order with regard to awarding
interest payable on solatium w.e.f. 19.09.2001 is vitiated
in law. Accordingly, that portion of the impugned
judgment and order is set aside. The responde'nt-State G
Government is directed to pay interest as provided under
Sections 23(1A) and 28 of the Act on the compensation
determined including solatium under Section 23(2) of the
Act. The respondent-State Government is further H
4 SUPREME COURT REPORTS [2015] 11 S.C.R.

A directed to compute the same with reference to the
compensation awarded by the Reference Court from the
date when the claimant decree holder is entitled strictly
in accordance with the said provisions of the Act
including the solatium. [Para 30] [26-E-H; 27-A]
B
Sunderv. Union of/ndia (2001) 7 SCC 211: 2001
(3) Suppl. SCR 176 - followed.
Gurpreet Singh v. Union of India (2006) 8 SCC
457: 2006 (7) Suppl. SCR 422 - held
c inapplicable.
Prem Nath Kapur v. National Fertilizers
Corporation. Of India Ltd. (1996) 2 SCC 71: 1995
(5) Suppl. SCR 790; Union of India v. Ram Mehar
D (1973) 1 sec 109: 1973 (2) SCR 120; Mir
Fazeelath Hussain v. Special Deputy Collector,
Land Acquisition (1995) 3 SCC 208: 1995 (2)
SCR 985; Yadavrao P. Pathade v. State of
Maharashtra (1996) 2 SCC 570: 1996 (1) SCR
E 965; Periyar & Pareekanni Rubbers Ltd. v. State
of Kera/a (1991) 4 SCC 195; Sunder v. Union of
India (2000) 10 SCC 470; Kapur Chand Jain &
Ors. v. State Government of H.P. & Ors (1999) 2
SCC 89; State of Gujarat v. Vakhatsinghji
F Vajesinghji Vaghela AIR 1968 SC 1481: 1968
SCR 692; Satinder Singh v. Umrao Singh AIR
1961 SC 908: 1961 SCR 676; H.H.
Maharajadhiraja Madhav Rao Jivaji Rao Scindia
Bahadur & Ors. v. Union of India AIR 1971 SC
G 530: 1971 (3) SCR 9; Director of Settlement v.
M.R. Apparao (2002) 4 SCC 638: 2002 (2) SCR
661; Deena v. Union of India (1983) 4 SCC 645:
1984 (1) SCR 1; CCE v. Ratan Melting & Wire
Industries (2008) 13 SCC: 20!18 (14) SCR 653
H
- referred to.
MIS PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 5
OF KERALA

PER ADARSH KUMAR GOEL. J: !DISSENTING) A

Appellants relied upon*Land Acquisition Officer and
Asstt. Commnr. Vs. Shivappa Maf/appa Jigalurwhich laid
down that the question of payment of interest
subsequent to 19-9-2001 did not arise, whereas the B
counsel for the State submitted that the judgment in
Shivappa's case did not apply to the instant case as the
award dated 19th November, 1992 had attained finality.
The counsel for the State relied upon **Chimanlal
Kuberdas Modi vs. Gujarat Industrial Development Corpn. C
which laid down 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
reference to payment of interest but without any such
reference to the payment of interest on solatium and D
merely payment of interest on compensation is granted,
then it would be open 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 E
execution. That being the legal position as prevailing
today, the observations made in the said judgment in
Gurpreet Singh cannot be ignored and it is ordered
accordingly that compensation awarded includes
solatium and therefore interest ori the said amount shall F
. be paid by the respondent in the pending execution. So
long as judgments relied upon by counsel for the State
stand, the appellant cannot succeed. Any contrary view
can be taken only by a larger Bench. Thus, the matter is G
placed before a Bench of 3-Judges. [Paras 2- 4] [28-F;
29-E-H; 30-A-E]
**Chimanlal Kuberdas Modi vs. Gujarat Industrial
Development Corpn. (2010) 10 SCC 635: 2010
(13) SCR 722; Nadirsha Shapurji Patel vs. H
6 SUPREME COURT REPORTS (2015) 11 S.C.R.

A Collector & LAO (2010) 13 SCC 234: 2010 (15)
SCR 516; Chhanga Singh vs. Union of India
(2012) 5 sec 763: 2012 (4) SCR 27~ - relied
on.

B Gurpre9t Singh VS. Union of India (2006) 8 sec
457: 2006 (7) Suppl. SCR 422; *Land
Acquisition Officer and Asstt. Commnr. vs.
Shivappa Mallappa Jigalur (2010) 12 SCC 387:
2010 (7) SCR 833- referred to.
c Case Law Reference

In the Judgment of Adarsh Kumar Goel, J
1995 (5) Suppl. SCR 790 referred to. Para 11
D 1973 (2) SCR 720 referred to. Para 16
1995 (2) SCR 985 referred to. Para 16
1996 (1) SCR 965 referred to. Para "16
E (1991) 4 sec 195 referred to. Para 17
12000) 10 sec 470 referred to. Para 19
(1999) 2 sec 89 referred to. Para 19
1968 SCR 692 referred to. Para 21
F 1961 SCR 676 referred to. Para 22
2001 (3) Suppl. SCR 176 followed. Para 26, 30
2006 (7) Suppl. SCR 422 held
inapplicable. Para 27
G
1971 (3) SCR 9 referred to. Para 28
2002 (2) SCR 661 referred to. Para 29
1984 (1) SCR 1 referred to. Para 29
H 2008 (14) SCR 653 referred to. Para 29
'MIS PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 7
OF KERALA

In the Judgment of Adarsh Kumar Goel, J A
2006 (7) Suppl. SCR 422 referred to. Para 2
2010 (7) SCR 833 referred to. Para 3, 4
2010 (13 ) . SCR 722 relied on. Para 4
2010 (15) SCR 516 relied on. Para 4 B
2012 (4) SCR 275 relied on. Para 4
CIVILAPPELLATE JURISDICTION: Civil Appeal Nos.
7034-7037 of 2015

From the Judgment and Order dated 07 .04.2010 of the C
High Court of Kerala at Ernakulam in CRP Nos. 196, 199,
205 of2009.

V. Giri, M. P. VinodfortheAppellant.
D
Bina Madhavan for the Respondent.

The Judgments and Order of the Court were delivered
by
E
V; GOPALA GOWDA, J. 1. Leave granted.

2'. These appeals by special leave are directed against
the impugned common judgment and order dated 07 .04.2010
passed by the High Court of Kerala at Ernakulam in Civil
Revision Petition Nos. 196, 199, 205 and 208 of 2009 (filed F
against the order dated 15.10.2008 of the learned Sub-Judge,
Erna~ulam-the Execution Court), wherein the dispute between
the parties related to the claim of solatium for the enhanced
amount of compensation and interest thereon in respect of G
the a,cquired land. The High Court has confirmed that solatium
is pa~able on that portion of land value based on capitalization
method of yielping rubber trees and directed to compute
balance amount payable under the decree, but awarded the
interest on solatium from 19.09.2001, the date when judgment H
8 SUPREME COURT REPORTS (2015) 11 S.C.R.

A by the Constitution Bench in the case of Sunder v. Union of
lndia 1 was delivered by this Court and not for the prior period.
The legality and validity of the impugned judgment and order
is seriously challenged urging various legal contentions as the
appellant is aggrieved by the denial of the interest payable on
B the component of solatium under Sections 23(1A), 23(2) read
with Sections 28 and 34 of the Land Acquisition Act, 1894 (for
short "the Act"). The solatium being the component of
compensation payable to the claimanUdecree holder, the
restriction upon its payment by the High Court placing reliance
C upon another subsequent Constitution Bench judgment of this
Court in the case of Gurpreet Singh v. Union of lndia 2 is
hereby challenged.

3. The brieffacts of the case are stated hereunder:-
D
Various portions of rubber estate of the appellant situated
in village Kuttamangalam was acquired by the State
Government in exercise of its eminent domain power pursuant
to the notification dated 10.10.1978 issued under Section 4(1)
E of the Act for the purpose of Periyar Valley Irrigation Project.

4. In 1980 and 1981 Awards were passed by the Land
Acquisition Officer awarding compensation, on the market
value of land which were partly based on capitalization method
F of the yielding rubber trees for the planted area and partly
based on the value of bare land on which there were no yielding
rubber plantation. Awards included solatium and interest on
compensation including solatium.

G 5. Being dissatisfied with the compensation, the appellant
filed Land Acquisition Reference (LAR) Nos. 425, 42",7, 428,
429, 432, 434, 435, 456, 458 and 463 of 1988 before the
Court of 111 Additional Sub-Judge, Ernakulam (the R1~feirence
Court) under Section 18 of the Act.
H 1 (2001) 1 sec 211
2 c2006) a sec 457
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 9
OF KERALA [V. GOPALAGOWDA, J.]

6. The Reference Court after perusal of the record, by A
its common judgment, passed an Award on 19.11.1992 by
enhancing the compensation partly based on capitalization
method ofthe yielding rubber trees for the planted area and
partly based on the value of bare land on which there were no
rubber trees. The Reference Court held that the claimant is B
entitled to get 30% solatium, 12% additional market value from
the date of the notification i.e., 10.10.1978 till the date of Award
passed against it and they are also entitled to get 9% interest
for the first one year from the date of dispossession and
thereafter at 15% till realization of the compensation awarded C
in favour of the claimant/decree holder.

7. In some of the abovesaid LARs, payments were made
by respondent-State in full and final settlement of the enhanced
compensation, solatium and. interest on compensation D
including solatium. With respect to the remaining cases, the
appellantfiled Execution Petition Nos. 152, 147, 146, 149 and
145 of 1996 before the Execution Court for execution of the
Award/decree passed by the Reference Court.
E
8. The Execution Court on 15.10.2008 passed an order
fixing balance amount payable by the State government after
excluding solatium on that portion of the market value of the
acquired land based on capitalization method of the yielding
rubber trees for the planted area. F
9. Being aggrieved by the said order of the Execution
Court, the. appellant filed Civil Revision Petition (CRP) Nos.
196, 199, 201, 205 and 208 of 2009 before the High Court of
Kera la. G

10. The High Court on 07.04.2010 passed the common
impugned judgment and order in the said CRPs confirming
that the solatium is payable by the state government for the
enhanced compensation awarded for the market value of the H
10 SUPREME COURT REPORTS [2015] 11 S.C.R.

A entire land. Thus, it provided solatium for that portion of land
the value of which was based on the capitalization method of
yielding rubber trees and directed the respondents to compute
balance amount payable under the decree. However, the High
Court awarded the interest on solatium w.e.f. 19.09.2001, the
B date of judgment delivered by Constitution Bench in Sunder's
case (supra) instead offrom the date of their entitlement under
the provisions of Sections 23(1A) and 28 of the Act. Hence,
these appeals are filed by the appellant urging various grounds.

C 11. Mr. V. Giri, learned senior counsel on behalf of the
appellant contended that the Awards in the instant case were
passed in 1980 and 1981 and the Reference Court judgment
and Award was passed in 1992, the time when there was no
dispute regarding the payment of interest on solatium. It is only
D in 1995 when this Court passed a judgment in the case of
Prem Nath Kapur v. National Fertilizers Corporation. Of
India Ltd. 3 which barred the payment of interest on solatium.
But the decision in Prem Nath Kapur's case was
subsequently reversed in Sunder's (supra) case. Therefore,
E there was no justification and reason for the High Court to
restrict the payment of interest on solatium prior to 19.09.2001
by applying the observations made at paragraph 54 in the case
of Gurpreet Singh (supra).

F 12. The learned senior counsel has further contended
that the respondent-State has already settled few cases
covered by the Reference Court judgment by paying the full
compensation, solatium and interest on compensation
including solatium without any dispute. It shows that there was
G no dispute between the parties as to the payment of interest
on solatium by the respondents. Before the Execution Court,
the dispute raised by the respondent-State was as to the
amount of land value on which solatium was to be computed.
H '(1996) 2 sec 71
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 11
OF KERALA [V. GOPALA GOWDA, J.]

13. On the other hand, Ms. Bina Madhavan, learned A
counsel on behalf of the respondent-State government sought
to justify the impugned common judgment and order by placing
strong reliance upon paragraph 54 of Gurpreet Sing h's case
(supra), which is extracted in the reasoning portion of this
judgment. B

14. She further contended that the interest on solatium
can be claimed only in pending execution cases and not in the
closed cases and the execution courts are entitled to permit
its recovery by the claimant/decree holder from 19.09.2001 C
i.e., from the date of judgment in Sunder's case and not for
any prior period.

15. With reference to the aforesaid rival legal
submissions urged by the learned counsel on behalf of the D
parties, this Court is required to examine the correctness of
the impugned common judgment order passed in the aforesaid
CRPs by the High Court in restricting the payment of statutory
interest payable on the solatium component by placing reliance
upon the cases of Sunder and Gurpreet Singh (supra). In E
this connection, this Court is required to find out as to whether
the payment of interest on solatium is the legislative statutory
right conferred upon the land loser/claimant recognised by the
Constitution Bench in Sunder's case. The High Court in the
light of observations made in Gurpreet Singh's case (supra) F
at paragraph 54 has fixed the date of payment of interest
payable on the solatium to the claimant/decree holder with
effect from 19.09.2001. The correctness of the same is also
required to be examined by this Court.
G
16. For the aforesaid purpose, it would be necessary to
refer to the question of law as referred to in Sunder's case
(supra) wherein this Court deals with the conflicting decisions
rendered on one hand in Union of India v. Ram Mehar (three
'(1973) 1 sec 109 H
'

12 SUPREME COURT REPORTS [2015) 11 S.C.R.

A Judge Bench) and on the other, in later decisions of co-equal
Benches of this Court viz., Mir Fazeelath Hussain v. Special
Deputy Collector, Land Acquisition 5, Prem Nath Kapur
(supra) and Yadavrao P. Pathade v. State of Maharai;htra6 •

B 17. lnthecaseofUnionoflndiav. RamMehar(supra)
this Court after examining the scope of the expression "market
value" in Section 4(3) of the Land Acquisition (Amendment
and Validation) Act, 1967, held that solatium cannot form part
of the market value of the land, ratherthe "market value" is only
C one of the components to be reckoned with in the determination
of the amount of compensation. The relevant para 7 of the
decision reads thus :

"7 ..... If market value and compensation were intended
0 by the legislature to have the same meaning it is difficult
to comprehend why the word "compensation" in Section
28 and 34 and not "market value" was used. The key to
the meaning of the word "compensation" is to be found
in Section 23(1) and that consists (a) of the market value
E of the land and (b) the sum of 15% on such market value
which is stated to be the consideration for the compulsory
nature of the acquisition. Market value is therefore only
one of the components in the determination of the amount
of compensation. If the Legislature has used the word
F "market value" in Section 4(3) of the Amending Act of
1967 it must be held that it was done deliberately and
what was intended was that interest should be payable
on the market value of the land and not on the amount of
compensation otherwise there was no reason why the
G Parliament should not have employed the word
"compensation" in the aforesaid provision of the
Amending Act."
(emphasis supplied)
H 5 (1995) 3sec 20s
• (1996) 2sec 570
14 SUPREME COURT REPORTS [2015] 11 S.C.R.

A Prem Nath Kapurv. National Fertilizers Corpn. of India
Ltd. and Yadavrao P. Pathade v. State of Maharashtra
on the other. The later three-Judge Bench judgments have
taken the view that solatium is not a part of compensation.
However, in none of the later three-Judge Bench
B judgments the earlier view of the three-Judge Bench
judgment in the case of Union of India v. Ram Mehar
that solatium is a part of compensation, has been noticed
or considered. Consequently, in our view, this matter
requires to be decided by a Constitution/larger Bench of
c this Court. We, therefore, direct that the papers may be
placed before Hon'ble the Chief Justice of India for
placing the appeals arising out of these proceedings for
final disposal before an appropriate Constitution/larger
Bench of this Court.
D
Prior to Sunder's Case (two Judge Bench), similar
reference was made in Kapur Chand Jain & Ors. v. State
Government of H.P. & Ors9 , the relevant paras of which read
thus:-
E
"3. Learned counsel for the petitioners invited our
attention to a three-Judge Bench judgment of this Court
in Union of India v. Ram Mehar and also later two
decisions of two-Judge Benches of this Court in Periyar
F and Pareekanni Rubbers Ltd. v. State of Kera/a and
Narain Das Jain v. Agra Nagar Mahapalika. REilying on
these judgments, he submitted that for applicability of
Section 28 of the Land Acquisition Act, 1894 solatium
has to be considered as a component of compensation
.G and interest could be paid thereon; and that the High Court
has wrongly not granted interest on solatium. However,
there is another three-Judge Bench judgment of this Court
in Prem N.ath Kapur v. National Fertilizers Corpn. of
India Ltd. wherein a contrary view is taken and it has
H
• (1999) 2 sec 89
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 15
OF KERALA [V. GOPALAGOWDA, J.]

been held, that no interest is payable on solatium under A
Section 23(2) or on additional amount payable under .
Section 23(1-A). For coming to that conclusion, the
Bench of three learned Judges relied upon another
decision of this Court in P. Ram Reddy v. Land
,, Acquisition Officer. B
4. In view of this conflict of decisions and also in view of
the further fact that the three-Judge Bench of this Court
in Prem Nath Kapur had no opportunity to refer to the
earlier decision of a three-Judge Bench in Ram Mehar c
we direct that these special leave petitions be placed
a
for decision before th_ree-Judge Bench of this Court.
The office may obtain suitable orders from the Hori'ble
Chief Justice." ~
D
20. The question of reference to Constitution Bench in
Sunder's case (supra) reads thus:-
•c
"Is the State liable to pay interest on the amount envisaged
under Section 23(2) of the Land Acquisition Act, 1894?"
E
In other words, the question was whether for the purpose
of Section 28 read with Section 34 of the Act, solatium is a
part of compensation. The answer was in affirmation to the
reference question by the Constitution Bench. By answering
the said question it laid down the .law with regard to the question F
of payment of interest.

21. From the interpretation of provisions of Sections 11,
15, 23, 24 and 31 of the Act and after placing reliance upon
the decision of this Court in State of Gujarat v. Vakhatsinghji G
Vajesinghji Vaghela 10 , it is clear that the amount of
compensation in the Collector's Award includes not only the
. amount determined under Section 23(1) of the Act but also
the additional amount of solatium as stipulated under Section
10 AIR 1968 SC 1481
H
~~~-------.. ~
0

16 SUPREM E COURT REPORTS · [2015] 11 S.C.R: .
I . ' ~' ,-< ' • . ' ·. I', -
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 17
I
OF KERALA [V. GO PALA GOWDA, J.]
!
A 23(2) of the Act. The relevant paragraph 9 of the said case
reads thus: 1 makes the reading of Section 34 read along with Section 31 A
I I!
I
" • ·
.'
~9: ....... The collector has to make an; award of
·
necessary. Section 31 of the Act provides for the payment of
compensation or deposit of the same in Court. Section 31 (1)
I
compensation under. Section 11 and having regard to says "On making an Award under Section 11; the Collector
I
8 Sec. 15 in determining the amount of compensation, he shall tender payment of the compensation awarded by him to
is guided by the provisions of Section 23 and 24. Section the persons interested. entitled thereto according to the B
23 (1) requires an aware! of the markefvalue of the land. Award ..... ~ Further, Section 28 of the Act provides for the
Section 23 (2) requires an additional award of a sum of direction which may be made to the Collector to pay the interest
,< "I ' - --1 · - • · .
fifteen percentl.lm on such market value, in consideration
I ,
on excess compensation. It says "If the sum which, in the opinion
c
I, -

of the. compulsory nature of acquisition.,
. .. ." · · o(ihe' 'court, the Collector ought to I have awarded as
,. - .. .
compensation is in excess of the sum which the Collector did C
22. Further, from the reading of Sections 28 a_nd 34 of
award as compensation ..... " Thus, it is clear from Section 34
the Act, it is clear that the 'purpose of interest' is to compensate
read with Section 31 and the term "sum" under Section 28 of ·
an unpaid landowner who, on the one hand has been deprived
D of the possession of his land in pursuance of compulsory the Act that the Award includes not onl{the sum as is
detemiined under Section 23(1) of theAct b_ut also the amounts
acquisition by the State Government in exercise of its eminent D
domain power and on the other hand, has also been kept out payable' under Section 23(1A) and Section 23(2). The same II
1

of the use of the money due to him for.the acquisition by not has· been held· by the Constitution Bench of this Court in 11

i:
being paid the money, :in full or in part, in lieii taking of: Sunder'$ case, the relevant paragraph 23 of which reads thus:
•,:; ii (i; ; ; .' • •' ! ·, '' ' ' t ', • • • ' I

E · possession. Reliance is placed on the decision of this Court . "23 .. , '.We make it clear that the compensation awarded
in the ease of Satinder Singh v. Umrao Singh 11 at paragraph ~
f1
.. , would include not only the total sum arrived at as per sub- E '11!
,,

19,. whiCti reads thus: " ·r ·" .· <'
I '
section (1) of Section 23 but the remaining sub-sections
,,,, t t. ·: _ -.,

a ••·

, . "19•.. : ... When claim for payment of interest is made.
., I " ... '"' ' i.,,. ·
. .,, thereof a~ well. It is thus. clear from Section 34 that the l'i
expression "awarded amount" would mean the amount II
F by a person.whose· irrirnovabJi;, property has been•
acquired compulsorily he is riot making claill). for
.•. .of cornpensation worked out in accordance with the H
:•• ' .• provisions contained in. Section 23; including allI the sub- F
damages properly or technically so called; he is basing .. . . .
, sectionst~ereof." ,:,,,,u .. ,, ·.. , , --· 1
his claim on the general rule that if he is deprived of his
land he should be put in possession of compensation 24. After adverting tci'Sections 34, 28, 23(1); 23(1A),
G "immediately; if not, in lieu of possession taken.by 23(2), 24, 26 and 31 of the Act; the Constitution Bench in
compulsory acquisition interest should be p~d to h!m Sunder's.case (supra) answered the question regarding G
on the said amount of compensation .... " .· · · · payment of interest oh solatium in affirmation holding that
;, . \ ·-" ~- , _. '· ._.,:, . ,·,·.~'--·- •, . ··--r
Section 26 of the Act does not say that the Award would contain
. 23.'. Section 34 of the Act provides for the payment of
interest on "amount of such compensation". The word "such". only the amounts granted under Section 23 (1) of the Act. It
H . was further held that there can be no doubt that all the three
" AIR 1961SC908
heads
.. .specifie"d
.. ln the three sub-sections of Section 23 of the H
~~~-------.. ~
0

16 SUPREM E COURT REPORTS · [2015] 11 S.C.R: .
I . ' ~' ,-< ' • . ' ·. I', -
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 17
I
OF KERALA [V. GO PALA GOWDA, J.]
!
A 23(2) of the Act. The relevant paragraph 9 of the said case
reads thus: 1 makes the reading of Section 34 read along with Section 31 A
I I!
I
" • ·
.'
~9: ....... The collector has to make an; award of
·
necessary. Section 31 of the Act provides for the payment of
compensation or deposit of the same in Court. Section 31 (1)
I
compensation under. Section 11 and having regard to says "On making an Award under Section 11; the Collector
I
8 Sec. 15 in determining the amount of compensation, he shall tender payment of the compensation awarded by him to
is guided by the provisions of Section 23 and 24. Section the persons interested. entitled thereto according to the B
23 (1) requires an aware! of the markefvalue of the land. Award ..... ~ Further, Section 28 of the Act provides for the
Section 23 (2) requires an additional award of a sum of direction which may be made to the Collector to pay the interest
,< "I ' - --1 · - • · .
fifteen percentl.lm on such market value, in consideration
I ,
on excess compensation. It says "If the sum which, in the opinion
c
I, -

of the. compulsory nature of acquisition.,
. .. ." · · o(ihe' 'court, the Collector ought to I have awarded as
,. - .. .
compensation is in excess of the sum which the Collector did C
22. Further, from the reading of Sections 28 a_nd 34 of
award as compensation ..... " Thus, it is clear from Section 34
the Act, it is clear that the 'purpose of interest' is to compensate
read with Section 31 and the term "sum" under Section 28 of ·
an unpaid landowner who, on the one hand has been deprived
D of the possession of his land in pursuance of compulsory the Act that the Award includes not onl{the sum as is
detemiined under Section 23(1) of theAct b_ut also the amounts
acquisition by the State Government in exercise of its eminent D
domain power and on the other hand, has also been kept out payable' under Section 23(1A) and Section 23(2). The same II
1

of the use of the money due to him for.the acquisition by not has· been held· by the Constitution Bench of this Court in 11

i:
being paid the money, :in full or in part, in lieii taking of: Sunder'$ case, the relevant paragraph 23 of which reads thus:
•,:; ii (i; ; ; .' • •' ! ·, '' ' ' t ', • • • ' I

E · possession. Reliance is placed on the decision of this Court . "23 .. , '.We make it clear that the compensation awarded
in the ease of Satinder Singh v. Umrao Singh 11 at paragraph ~
f1
.. , would include not only the total sum arrived at as per sub- E '11!
,,

19,. whiCti reads thus: " ·r ·" .· <'
I '
section (1) of Section 23 but the remaining sub-sections
,,,, t t. ·: _ -.,

a ••·

, . "19•.. : ... When claim for payment of interest is made.
., I " ... '"' ' i.,,. ·
. .,, thereof a~ well. It is thus. clear from Section 34 that the l'i
expression "awarded amount" would mean the amount II
F by a person.whose· irrirnovabJi;, property has been•
acquired compulsorily he is riot making claill). for
.•. .of cornpensation worked out in accordance with the H
:•• ' .• provisions contained in. Section 23; including allI the sub- F
damages properly or technically so called; he is basing .. . . .
, sectionst~ereof." ,:,,,,u .. ,, ·.. , , --· 1
his claim on the general rule that if he is deprived of his
land he should be put in possession of compensation 24. After adverting tci'Sections 34, 28, 23(1); 23(1A),
G "immediately; if not, in lieu of possession taken.by 23(2), 24, 26 and 31 of the Act; the Constitution Bench in
compulsory acquisition interest should be p~d to h!m Sunder's.case (supra) answered the question regarding G
on the said amount of compensation .... " .· · · · payment of interest oh solatium in affirmation holding that
;, . \ ·-" ~- , _. '· ._.,:, . ,·,·.~'--·- •, . ··--r
Section 26 of the Act does not say that the Award would contain
. 23.'. Section 34 of the Act provides for the payment of
interest on "amount of such compensation". The word "such". only the amounts granted under Section 23 (1) of the Act. It
H . was further held that there can be no doubt that all the three
" AIR 1961SC908
heads
.. .specifie"d
.. ln the three sub-sections of Section 23 of the H
18 SUPREME COURT REPORTS [2015) 11 S.C.R.

A Act are the sums to be awarded by the court. The words "every
award under this Part" in Section 26(1) of the Act cannot be
treated as the Award after delinking the amounts awarded
under sub-Section (1A) or sub-Section (2) of Section 23 of
the Act. Further in paragraphs 20, 21 and 23 in Sunder's case
B (supra), the Constitution Bench has held as under-
"20 ... whether exclusion of the factor" any disinclination
of the person interested to part with the land acquired"
from being considered as part of the compensation
c indicated in Section 24 of the Act would be of any aid for
excluding solatium from the purview of interest accrual
process .... "
"21. It is apposite in this context to point out that during
the enquiry contemplated under Section 11 of the Act
D the Collector has to consider the objections which any
person interested has stated pursuant to the notice given
to him. It may be possible that a person so interested
would advance objections for highlighting his
disinclination to part with the land acquired on account
E of a variety of grounds, such as sentimental or religious
or psychological or traditional etc. Secti1Jn 24
emphasises that no amount on account of any
disinclination of the person interested to part with the land
shall be granted as compensation. That aspect is
F
qualitatively different from the solatium which the
legislature wanted to provide "in consideration of the
compulsory nature of the acquisition."
xxx xxx xxx
G 23. In deciding the question as to what amount would
bear interest under Section 34 of the Act, a peep into
Section 31(1) of the Act would be advantageous. That
sub-section says:-
31. (1) On making an award under Section 11, the
H Collector shall tender payment of the compensation
MIS PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 19
OF KEP.ALA [V. GOPALAGOWDA, J.]

awarded by him to the persons interested entitled A
thereto according to the award, and shall pay itto them
unless prevented by some one or more of the
contingencies mentioned in the next sub-section ...... "
Further, in the said case, after adverting to Section 34 of B
the Act, this Court held thus:-

"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 C
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 D
inconceivable that the solatium amount would attract only
the escalated rate of 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 E
Act to reach the hands of the perspn as and when the
award is passed, at any rate 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. F
Splitting up the compensation into different components
for the purpose of payme.rit of interest under Section 34
was not in the contemplation of the legislature when that
section was framed or enacted."
G
25. The judgment rendered by the Constitution Bench
of this Court in Sunder's case (supra) is the binding precedent
on the question of payment.of legislative statutory interest
payable on solatium under Sections 23(1A), 28 and 34 of the
Act which cannot be deprived to the claimanUdecree holder H
20 SUPREME COURT REPORTS [2015] 11 S.C.R.

A by the court. As the said judgment is binding upon the State
Government it cannot contend that it is not liable from the date
as provided under the provisions of the Act.

2fi. The Constitution Bench judgment in Sunder''s case
B (supra) is aptly applicable to the fact situation of the present
case for the reason that the enhanced compensation includes
the solatium @ 30% as provided under Section 23(2) of the
Act. Therefore, the claimanVdecree holder is entitled for the
interest on the solatium component which is part of the
C compensation payable by the State government to the
claimant. The Execution Court held that the claimanVdecree
holder company is entitled to claim solatium only in respect of
the enhanced compensation provided for the land alone which
has been separately fixed, but, not in respect of that portion of
D market value of the land based on capitalization method of the
yielding rubber trees for the planted area which was separately
fixed by the Reference Court in itsAward. The High Court was
right in holding that the claimant is entitled for the interest not
only in respect of the land but also with respect to thE~ trees
E standing on the land of which the market value is determined
by the Reference Court. However, it awarded the interest on
solatiuni from 19.09.2001 and not for the prior period by placing
reliance on Gurpreet Singh case (supra), the relevant
F paragraph 54 of which is extracted hereunder:-

"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
G counsel to address us on that question. That question is
whether in the light of the decision in Sunder, the
awardee/decreecholder 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
H
M/S PERIYAR & PP.~EEKANNI RUBBERS LTD. v. STATE 21
OF KERALA [V. GOPALA GOWDA, J.]

court cannot go behind the decree. If, therefore, the claim A
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 B
solatium based on Sunder on the ground that the
execution court cannot go behind the decree. But ifthe
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 C
and rejected 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
0
and say that the compensation awarded includes
solatium and in such an event interest on the amount oould
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 E
executions and the execution court will be entitled to
permit its recovery from the date of the 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 F
indicated by way of clarification also in exercise of our
power under Articles 141 and 142 of the Constitution of
India with a view to avoid multiplicity of litigation on this
question." '
G
27. The decision of this Court in Gurpreet Singh's Case
(supra), upon which the strong reliance is placed by learned
counsel on behalf of respondent, is totally inapplicable to the
fact situation of the instant case forthe reason thatthe question
that arose in the said case was distinct, which reads thus:- H
22 SUPREME COURT R~PORTS [2015] 11 S.C.R.

A "What is the rule of appropriation in execution of money
decrees? Is the rule the same in the case of an award-
decree under the Land Acquisition Act or, is there
anything in the Land Acquisition Act, 1894 as amended
by the Land Acquisition (Amendment) Act (68 of 1984)
B making that rule inapplicable or not wholly applicable?"

The issue in the said question was examined and
answered by the Constitution Bench with reference to Prem
Nath Kapur's case (supra) regarding the rule of appropriation
c in execution of money decrees. The examination of Sections
23(1 ), 23(1A), 23(2), 28, 31, 34 and 11 of the Act was made in
this regard.

28. At paragraph 54 of Gurpreet Singh's case, certain
0 observations are made regarding the payment of int19rest on
solatium. The interest on solatium can be awarded at execution
stage if the Reference Court or the Appellate Court cloes not
specifically refer to the question of interest on solatium ior cases
wherein claim had not been made and rejected either expressly
E or impliedly by the Reference Court or the Appellate Court and
merely interest on compensation is awarded. But where the
Reference Court or appellate court has negatived the same ·
eith'er expressly or by implication then such interest on solatium
cannot be awarded as it is a well settled rule of law that the
F execution court cannot go behind the decree. Another point
which is clearly made in the said judgment is that the interest
on solatium can be claimed only in pending execution cases
and not in closed execution cases, recoverable from the date
of the judgmentin Sunder's case i.e., 19.09.2001 and notfor
G any prior period. It is also held in this case that this will not
entail any appropriation or reappropriation by the claimant/
decree holder. But, it is noteworthy that this was not the question
which was referred to the Court for consideration in the said
case. Therefore, it is merely an observation of the court which
H
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 23
OF KERALA [V. GOPALAGOWDA, J.]

cannot be applied as binding precedent in the instant case A
with regard to the entitlement of statutory interest payable under
Sections 23(1A), 28 and 34 of the Act on the solatium. If
applied, it would be contrary to the doctrine of stare decisis. In
this regard, it is necessary to advert to the Constitution Bench
(11 Judge Bench) judgment of this Court in H.H. B
Maharajadhiraja Madhav Rao Jivaji Rao Scindia Bahadur
& Ors. v. Union of lndia 12, wherein at paragraph 138, it is
held that it is not proper to regard a word, a clause or a sentence
occurring in a judgment of the Supreme Court, divorced from
its context, as containing a full exposition of the law on a C
question when the question did not even fall to be answered in
that judgment. The relevant portion of the paragraph reads as
under:-

"138 ... The question as to the jurisdiction of the Courts D
to entertain a claim for payment of Privy Purse did not
fall to be determined in·Nawab Usman Ali Khan case.
The only question raised was whether the Privy Purse
was riot capable of attachment in execution of the decree
of a Civil Court, because of the specific exemption of E
political pensions under Section 60(1 )(g) of the Code of
Civil Procedure. In Kunvar Shri Vir Rajendra Singh's
case, the Court did not express any opinion that Article
366(22) was a provision relating to a covenant within the
meaning of Article 363. In tliat case the petitioner who F
was not recognised as a Ruler by the President
abandoned at the hearing of his petition his claim to the
Privy Purse payable to the Ruler of Dholpur, and pressed
· his claim by succession under the Hindu Law to the G
Private property of the former Ruler. The Court was not
called upon to decide and did not decide that Article
366(22) was a provision relating to a covenant within the
meaning of Article 363. It is difficult to regard a word, a
12 AIR 1971SC530 H
24 SUPREME COURT REPORTS [2015] 11 S.C.R.

A clause or a sentence occurring in a judgment of this Court.
divorced from its context. as containing a full exposition
of the law on a question when the question did not fall to
be answered in that judgment."
[Emphasis supplied]
B
The said view has been followed and reiterated
subsequently by this Court in a catena of cases regarding the
distinction between ratio of a case and obiter dicta.

c 29. In the case of Director of Settlement v. M.R.
Apparao13 , this Court extensively elaborated upon the principle
of binding precedent. The relevant para 7 is reproduced
hereunder:
"? ... Article 141 of the Constitution unequivocally
D
indicates that the law declared by the Supreme Court
shall be binding on all co1;1rts within the territory of India.
The aforesaid Article empowers the Supreme Court to
declare the law. It is. therefore. an essential function of
the Court to interpret a legislation. The statements of the
E
Court on matters other than law like facts may have no
binding force as the facts of two cases may not be similar.
But what is binding is the ratio of the decision and not
any finding of facts. It is the principle found out upon a
F reading of a judgment as a whole. in the light of the
questions before the Court that forms the ratio and not
any particular word or sentence. To determine whether a
decision has "declared law" it cannot be said to be a law
when a point is disposed of on concession and what is
G binding is the principle underlying a decision. A judgment
of the Court has to be read in the context of questions
which arose for consideration in the case in which the
judgment was delivered. An "obiter dictum" as
distinguished from a ratio decidendi is an observation
H
13
(2002) 4 sec 638
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 25
OF KERALA [V. GOPALAGOWDA, J.]

by the Court on a legal question suggested •in a case A
before it but not arising in such manner as to require a
decision. Such a? obiter may not have a binding
precedent as the observation was unnecessary for the
decision pronounced, but even though an obiter may not
have a binding effect as a precedent, but it cannot be B
denied that it is of considerable weight. ... "
.. , . . ' [Emphasis supplied]
The decision of this Courfin the case of Deena v. Union
of lndia 14 is also p~rtaining to the· extension of ratio of a C
decision to cases involving identical situations, be it factual or
legal, but the same should not be mechanically applied to the
facts of a case, the relevant para 1.!5 reads thus:
'
"15 .... It is permissible to extend the ratio of a decision
0
to cases involving identical situations. factual and legal.
but care must be taken to see that this is not done
mechanically, that is. without a cl~e examination of the
rationale of the decision which is cited as a precedent.
Human mind, trained even in the strict discipline of law, E
is not averse to taking th~ easy course of relying on
decisions which have become famous and applying their
ratio to supposedly identical situations .... "
I (emphasis supplied) F
The binding effect of judgment of this Court vis-a-vis State·
and Central Government circulais is considered in the case of
CCE v. Ratan Melting & Wire lridustries 15 , wherein it is held
thatthe law laid down by this Court is the law of the land. The
law so laid down is binding on all 'Courts/Tribunals and bodies G
and that the circulars issued @y the State or the Central
Government cannot prevail over the la":' laid down by this Court.

30. From the facts of the present case and in the light of
law laid down on the question of payment of interest on solatium H
14 (1983) 4 sec 645 15 (2008) 13 $cc 1
26 SUPREME COURT REPORTS [2015) 11 S.C.R.

A by the Constitution Bench in Sunder's case, it is amply clear
that the said case is the binding precedent. As far as Gurpreet
Singh's case is concerned, the question which arose for its
consideration was only with regard to the rule of appropriation
in execution of the Award passed under the provisions of the
B Act. While answering the said question of law after refmring to
the relevant provisions of the Act, at paragraph 54, it has
incidental!y made some observation with regard to the
payment of interest on solatium which is only an obiter but not
the binding precedent as that question did not fall for
C consideration before the Constitution Bench. Therefore, in yiew
of the foregoing reasons, I hold that there is no need to advert
to the other judgments upon which reliance was placed by the
learned counsel for both the parties. For the reason that the
binding precedent laid down by the Constitution Bench ofthis
0
Court in Sunder's case on the question of payment of interest
on the solatium to the claimimt/decree holder from the date of
entitlement as provided under the provisions of the Act.
·Accordingly, I pass the following order:-
E a) In view of the aforesaid reasons assigned by me with
reference to Sundera1nd Gurpreet Singh cases (supra),
I am of the view that the impugned common judgment
and order with regard to awarding interest payable on
solatium w.e.f. 19.09.2001 is vitiated in law. Accordingly,
F
that portion of the impugned judgment and order is
hereby set aside.

b) The civil appeals a•re aHowed. The respondent-State
Government is directed to pay interest as provided under
G Sections 23(1A) and ~~8 of the Act on the compensation
determined includi,ng 11olatium underSection 23(2) of the
Act. The respondemt-state Government is further directed
to compute the same with reference to the compensation
awarded by the Hefereince Court from the date when the
H
claimant decree holder is entitled strictly in accordance
,'j
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 27
OFKERALA

with the abovesaid provisions of the Act including the A
.solatium and pay to the appellant within 8 weeks from
the date of receipt of copy of this judgment. No order as
. to costs.

ADARSH KUMAR GOEL, J. 1. I have perused the B
proposed judgment prepared by my learned brother V. Gopala
Gowda, J. I am in respectful disagreement with the same.
Th~ facts have been broadly mentioned in the judgment of
Gopa[a Gowda, J. and need not be repeated.
c
2. The award of the Reference Court is dated 191h
November, 1992 which did not expressly award interest on
solatium. In the impugned order, the High Court restricted the
interest on solatium to the period post 19th September, 2001,
following the Constitution Bench judgment of this Court in o
Gurpreet Singh vs. Union of lndia 1 directing as follows :
"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 E
pending in courts all over the country, we permitted the
counsel to address us on that question. That question
is whether in the light of the decision in Sunder [(2001)
7 sec 211], the awardeeldecree-holder would be
entitled to claim interest on solatium in execution though F
it is not specifically granted by the decree. It is well
settled that an execution court 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 G
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 based on
Sunder on the ground that the execution court cannot
1 (2oos) a sec 457 H
28 SUPREME COURT REPORTS (2015] 11 S.C.R.

A 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 either
expressly or impliedly by the Reference Court or the
B 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 on the amount could be directed to
c 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 judgment in
D
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
E of our power under Articles 141 and 142 of the
Constitution of India with a view to avoid multiplicity of
litigation on this question."
2. Learned counsel for the appellants relied upon Land
Acquisition Officer and Asstt. Commnr. Vs. Shivappa
F Ma/Jappa Jigalur laying down as follows :
"13. Coming now to the stipulatio_n that any interest on
solatium can only be granted for the period subsequent
to 19-9-2001, the date of the decision in Sunder, it is
G evident that this again, is a limitation on the power of
the execution court. The direction is actually referable
to those cases in which the award of the Reference Court
or the appellate court being silent, it is left open to the
execution court to give direction for the deposit of
H 2 c2010) 12 sec 387
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE 29
OF KERALA [ADARSH KUMAR GOEL, J.]

interest on solatium. In such cases, the Reference Court A
can ask for interest only for the period subsequent to
19-9-2001. The direction in no way circumscribes the
power of the court dealing with the main proceeding
relating to enhancement of the compensation.
B
14. The matter can be looked at from another angle.
The appeal being the continuation of the original
proceeding, in the facts of the cases in this sub-group,
there can be no question of accrual of interest only after
the date of the decision in Sunder. At this stage, it may c
be recalled that the civil court had awarded solatium @
30% and interest @ 9% for the first year and @ 15%
from second year onwards till the date of realisation.
The States appeal against the judgment of the civil court
was dismissed. Thus, the direction for payment of D '
solatium with interest at the rates indicated had become
final. The High Court enhanced the rate of
compensation. This would inevitably lead to an increase
in the amount of solatium and consequently in the
amount of interest on the unpaid amount of solatium. E
Thus, looked at from any point of view, the question of
payment of interest subsequent to 19-9-2001 does not
arise." ·

3. On the other hand, learned counsel for the State F
submitted that the judgment iri Shivappa (supra) does not
apply to the present case as the award dated 191h November,
1992 has attained finality. She also relied upon Chimanlal
Kuberdas Modi vs. Gujarat Industrial Development
Corpn. 3 laying down as follows : G

"15. 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 reference to payment of interest but without H
3
c201 oi 10 sec eas
30 SUPREME COURT REPORTS [2015] 11 S.C.R.

A 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 and declare
that the compensation awarded includes solatium, and
B consequently, interest on the amount could be,. directed
to be deposited irJ execution. That being the legal
position as prevailing today, we cannot ignore the
observations made in para 54 of the aforesaidjudgment
in Gurpreet Singh and we order accordingly that
c compensation awarded includes solatium and therefore
interest on the said amount shall be paid by the
respondent in the pending execution."
To the same effect, she also relied upon Nadirsha
D Shapurji Patel vs. Collector & LAO' and Chhanga Singh
vs. Union oflndia 5•
4. · So long as judgments relied upon by learned
counsel for the State stand, the appellant cannot succeed. Any
E contrary view can be taken only by a larger Bench. It will thus
be appropriate that the matter is placed before a Bench of 3-
Judges.

COMMON ORDER
F In view of divergence of opinion in terms of separate
judgments pronounced by us in these appeals today, the
Registry is directed to place the papers before Hon'ble the
Chief Justice of India for appeals being assigned to an
G appropriate Bench.

Nidhi Jain Matter referred to larger bench.

• (2010) 13 sec 234
s (2012) 5 sec 763