Holding

The agreement’s wording was interpreted as a full relinquishment of any further claims, including interest, so the respondents were not entitled to interest under Section 34.

Summary

The State of Assam acquired 7.60 acres of land at Lawsohtun, Shillong under the Land Acquisition Act, 1894. The owners negotiated a reduced compensation of Rs 4,41,202.45, signing an agreement on 24 February 1969 that they would accept this amount and make no further claim for compensation if payment was made by 31 March 1969. The amount was paid on 26 March 1969, after which the owners sought interest under Section 34 of the Act for the period from possession (30 March 1967) to payment. The High Court held that the agreement covered only the compensation amount and ordered payment of interest. On appeal, the Supreme Court examined whether the phrase “make no further claim in regard to compensation” also relinquished the right to interest. It concluded that the parties used the phrase in a broader sense, meaning full satisfaction of their claim, and that the agreement expressly conditioned the relinquishment of any future interest claims. Consequently, the respondents were not entitled to interest and the High Court’s order was set aside.

Issues considered

Whether the clause ‘make no further claim in regard to compensation’ in the 24 February 1969 agreement bars the respondents from claiming interest under Section 34 of the Land Acquisition Act, 1894.

Legislation cited

Land Acquisition Act, 1894s. 23, s. 34, s. 4

Subjects

land acquisitioncompensationinterestSection 34agreement interpretationrelinquishment of claimsstatutory construction

Judgment

850

A STATE OF ASSAM
v•
.llTENDRA KUMAR SENAPATI & OTHERS
February 17, 1981
B [S. MURTAZA FAZAL ALI AND A. D. KosHAL, JJ.]

Land Acquisition Act, 1894, sections 23 and 34-Agreen1ent between the
parties reduced in writing to accept a specified sun1 by a specified date two •
years after the land acquisition-Whether the words "would not n1ake any
further claini in regard to con1p·n1.1·atio11" li·ou.ld exclude further clain1s of
interests under the Act.
c Accepting the State appeal, negativing the clnirn for interest and disn1issing
the original writ petition, the Court,
HELD : The expression "would not make nny further claim in regard to
compensation" in the agreement dated the 24th February, 1969 was clearly
used by the petitioners-respondents not in the sense in which it is used in
sections 23 and 34 of the Land Acq_uisition Act but more comprehensively
D meaning reimbursement in full satisfaction of their claim in respect of the
acquisition. The condition attached by then1 to the relinquishment of their
claim was that the agreed amount must be paid to them before 31st March
1969, which agreement would sho\V that by the acceptance of the quantified
sum of Ro;;. 4,41,202.45 they condoned the delay in payment and also relin-
quished all future claims to interest. If it were otherwise, the respondents would
have expressly reserved their right to claim interest under section 34 of the
E Act. [853 A-B, D-fl
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1947 of
1970.
From the Judgment and Order dated 17.3.1970 of the Gauhati
High Conrt in Civil Rule No. 1151/69.
F ·s. N. Chowdhary for the Appellant.
D. N. Mukherjee for Respondent No. 2.
V. S. Desai, B. P.'Maheshwmi andS11resh Sethi and Miss Asha Jain~-._
for the Respondent.
The Judgme\1t of the Court was delivered by
G
KosHAL, J. This is an appeal by certificate granted under sub-
clause (a) of clause ( 1) of article 133 of the Constitution of India
by the High Conrt of Assam and Nagaland against its judgment dated
17th March, 1970 accepting a petition under article 226 of the •
Constitution of India which arose in the circumstances that follow. '
H Land measuring 7.60 acres and situated at Lawshtnn, Bishnupur,
Shillong, belonged to the 5 respondents when a notification und·~r sec- •,
tion 4 of the Land Acquisition Act (hereinafter referred to as the
ASSAM v. JITENDER KUMAR (Koshal, !.) 851

Act) was published in respect thereof on 27th March 1967. Three A
days later the possession of the land was taken over by the Collector,
United Khasi and Jaintia Hills, Shillong. Proceedings for the award
of compensation to the respondents were pending when negotiations
took place between the Chief Secretary to the Government of Assam
and two of !he respondents who agreed to the reduction of the cost of
acquisition of the land from Rs. 6,17,683.50 to Rs. 4,63,262.57 (in- B
• clusive of cost of establishment and contingency amounting to Rs .
22,060.12). Thereafter the Under Secretary to the Go¥ernment of
Assam in the Home and Political/Department wrote to respondent
No. 2 a letter dated 21st February, 1969 detailing the agreement arriv-
ed at between the Chief Secretary and the respondents and requesti'ng
them- c
"to please submit immediately a wiitten document signed
by all the co-sharers of the land to the effect that yourself
and all other co-sharers are agreeable to accept the L. A. cost
of Rs. 4,41,202.45 for land at Bishnupur and that you and
D
your co-sharers will make no further claim for the land thus
acquired by Government."

The respondents lost no time in sending their reply which was
dated 24th February 1969 ankd in which they stated that the delay in
payment had caused to them great hardship and that they had agreed E
to reduce !he cost of the acquisition in the course of their discussion
with the Chief Secretary whom they had urged "at the same time that
the payment should be made immediately." The reply was signed by
all the five respondents and was accompanied by an agreement (also
signed by all of them), the text of which may be set out in extense :
F
"We, all !he co-shares interested in the land acquisition
case for constrnction of quarters for Special Branch Staff of
Police Department at Lawsohtun, Bishnupur, Shillong, here-
by agree in response to the Government Letter No. 356/
66155 dated the 21st February, 1969 to accept the land
acquisition cost of Rs. 4,41,202.45P (Rupees four lakhs forty G
one thousand two hundred and two and forty five paise only)
• subject to Government making payment within the 31st
' March, 1969 for our land measuring more or less 7.60 acres
at Lawsohtun, Bish'nupur, Shillong.

•
' H
"We further agree that we will make no further claim
in regard to compensation for the same land provided actual
852 SUPREME COURT REPORT~ [1981] 2 S.C.R.

A payment is received within the above period of 31st March,
1969."
The agreement between the parties was reduced by the Collector
to an award dated the 25th March 1969 and on the very next day the
sum of Rs. 4,41,202.45 was paid to the respondents.
B
On 31st March 1969 the respondents made an application to the
Oiief Secretary claiming interest at the rate of 12t per cent per anuum •
on the amount last mentioned. As there was no response from the
Chief Secretary, the respondents applied to the Collector on 7th July,
1969 requesting him to pay interest on the amount awarded at the
c rate of 6% per annum for the period from 30th March 1967 to 26th
March 1969 under section 34 of the Act which runs thus :
"When the amount of such compensation is not paid or
deposited on or before taking possession of the land, the
collector shall pay the amount awarded with interest thereon
at the rate of six per cent per annum from the time of so
D taking possession until it shall have been so paid or deposited."
The Collector informed the respondents by a letter dated 31st
July 1969 that no action was necessary "at this stage". It was then
that the respondents knocked at the door of the High Court.
E 2. The High Court was of the opinion that the agreement between
the parties covered only the amount of "compensation" as described
in the various sections of the Act including sections 23 and 34 and that
interest had to be paid on such compensation by reason of the statu-
tory requirement enacted in that behalf by section 34. The High
Court, therefore, accepted the petition filed before it and held that the
F Collector was bound to pay to the respondents interest on the amount
covered by the award at the rate of 6 per cent per annum from 30th
March 1967 (being the date on which the possession of the land was ·----x_
taken over by the Collector) to the date of payment, i.e., 26th March
1969. It directed the Collector to dispose of the petition dated the
7th July 1969 made to him by the respondents in accordance with law.
G
3. The short point requiring determination by us is whether the
agreement arrived at between the parties in February 1969 embraced
only the "compensation" within the meaning of that term as used in •
the. Act or covered also the payment of interest under section 34 there- '
of. Having heard learned counsel for the parties we are of the opinion
H that the interpretation placed on the agreement by the High Court can-
not be sustained and that the respondents are not entitled to any in- ,
terest on the sum already paid to them.
ASSAM v. JITENDER KUMAR (Koshal, !.) 853

l 4. Although it is true that in the agreement dated the 24th A
February 1969 which the respondents signed and sent to the Govern-
ment along with their letter of that date they stated that they would not
make any furher claim in regard to "compensation", but that expres-
sion, in our opinion, was clearly used by them not in the sense in
which it is used in sections 23 and 34 of the Act but more comprehen-
sively, mea'ning re-imbursement in full satisfaction of their claim in B
• respect of the acquisition. That this was so was made clear in the
letter addresed to them by the Under Secretary in which he expressly
stated that-

'
"you and your co-sharern will make no further claim for
the land thus acquired by the Government." c
The Under Secretary did not use the word "compensation" in his
letter nor did the respondents use it in their reply in which, on the other
hand, they made a grouse of the hardship which the delay in payment
bad caused to them and brought it to the pointed attention of the under
Secretary that immediate payment was an essential part of the bar-
gain. In the agreement signed by them (as pointed out above) they D
no doubt used the word "compensation" but they added that they
... would make no further claim in regard to it if actual payment was
received by them before the 31st March, 1969. The condition thus
attached by them to the agreement would show that by the acceptance
of the quantified sum of Rs. 4,41,202.45 they condoned the delay in
E
payment and also relinquished all future claims to interest. If it were
otherwise, there is no reason why the respondents would not have
expressly reserved their right to claim interest under section 34 of the
Act. The tenor of the two letters coupled with the agreement leads to
no other conclusiOn.
4. In the result the appeal succeeds and is accepted. The judg- F
ment of the High Court is set aside and the respondents' petition
decided by it is dismissed but with no order as to costs.

S.R. Appeal allowed.
G

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