Holding

The solatium under Section 23(2) is an integral part of the compensation, and interest under Sections 28 and 34 accrues on the total compensation including solatium.

Summary

The Supreme Court examined whether the solatium amount under Section 23(2) of the Land Acquisition Act, 1894 forms part of the compensation for which interest under Sections 28 and 34 must be paid. The Court noted that the Collector is statutorily obliged to pay the entire amount awarded under Section 23, which includes market value, the 12% per annum addition, the 30% solatium and any other heads. It held that the legislature intended interest to accrue on the aggregate compensation, not merely on the market value, and that splitting the award into components for interest calculation was not contemplated. Consequently, solatium is an integral component of compensation and interest is payable on it. The Court disposed of the appeals, affirming the entitlement to interest on the total compensation.

Issues considered

Whether the solatium under Section 23(2) of the Land Acquisition Act, 1894 is part of the compensation for purposes of interest under Sections 28 and 34.
Whether interest on delayed payment of compensation should be calculated on the aggregate amount including solatium or only on the market value.

Legislation cited

Land Acquisition Act, 1894s. 11, s. 15, s. 16, s. 23(1), s. 23(1-A), s. 23(2), s. 24, s. 26, s. 28, s. 28A, s. 31, s. 34, s. 35, s. 4(3)

Subjects

Land acquisitionCompensationSolatiumInterestSection 23Section 34Statutory compensationCompulsory acquisitionSupreme Court

Judgment

,.

.A SUNDER
.v.
UNION OF INDIA

SEPTEMBJ;:R 19, 2001

B [DR. A.S. ANAND, CJ, K.T. THOMAS; R.C .. LAHOTI, N. SANTOSH '
HEGDE AND S.N.VARIAVA, JJ.J

Land Acquisition Aer, 1894 : Sections 4(3), 23 28, 31 and 34.

Land Acquisition proceeding-Compulsory Land Acquisition-Meaning·
c of-Matters to be considered for determination of compensation for land ·
acquired-'Compensation'-Meaning of-Every award for payment of
compensation includes compensation as de.fined in sub-sections (1), (1-A) and
(2) of Section 23-Solatium is integral part of compensation and interest is
payable mz aggregate amount of compensation which includes solatiunz-'-
D Liability of State to pay interest on solarium discussed-Payment of interest-
Liability ari.5es in case of delay in payment of compensation before taking
possession of land acquired.

Words and Phrases :

E Compensation-:-Meaning of-Jn the context of land acquisition.

The reference was necessitated due to conftict between the decisions
of different Benches of this Court in number of cases. The question as to
whether the State is liable to pay interest on the amot1nt as envisaged
under Section 23(2) of the Land Acquisition Act, 1894 was referred to the
F present Bench of five Judges.

It was conten«!ed by the appellant/claimant that solatium constituted
part of compensation and interest as envisaged. in Sections 28 a~d 34 of the
Act would accrue on the aggregate amount which includes the solatium as
well. . ...
G
It was contended by the respondent that the word 'compensation' is·
used ostensibly in different connotation; that there is a distinction between
compensation awarded for the land acquired under Section 23(1) and
. aggregate compensation which included solatium and actual loss suffered
H by the land owner in the enjoyment of property.and hence real compensation
176
SUNl'.>ER v. U.0.1. 177
is. just equi~alent of it as per Section 23(1) of the Act;_ that interest is A
payable only on the said compensation; that the .law envisaged in sub·
section (2) of Section 23 of the Act cannot form part of compensation as the

-
same is a payment only by way of solace on account of compulsory nature
of acquisition.

Disposing of the matter.;, the Court
B

HELD : 1.1. Section 31 of the Land Acquisition Act, 1894 cast an
obligation on the Collector that after making the award under Section 11, he
shall tender payment of the compensation awarded by him to the persons
entitled to it. This means that law does not relish any delay in making the c
payment once the award is made but in the absence of a legal insistence that
the amount awarded should necessarily be paid before taking possession of
the land, it could happen that there would be some interregnum between
date of taking possession and making payment of awarded sum. Question of
- .... making payment on interest arises only when the compensation is not paid/ D
deposited before the date of taking possession of the land. It is for the
purpose of affording relief to the person entitled to such compensation when
the payment of his money is delayed, provision is made in Section 34 of the
.... Act. Further, when the Court is of the opinion that Collector should have
awarded a larger sum as compensation, the Court has to direct the Collector
E
to pay interest on such excess amount. The rate of interest is at par with the
rate indicated in Section 34. Interest has to accrue as per Sections 34 and 28
of the Act. (183-F-G; 184-A·B·C·G]

1.2. The various definitions of the term "compensation" need not
detract the Courts in fathoming the real import of it when compensation is F
regarded as a statutory obligation. The exercise can be done with the aid of
the provisions in the statutes. So the Court in the context of land acquisition
has to decide as to how the Act has designed the compensation vis-a-vis the
liability to pay interest. No judicial exercise is required to quantify the
sums mentioned in sub-section (l·A) or sub-section 2 of Section 23 because G
the Section itself specifies the percentage to be worked out for the purpose
of adding to the total amount arrived at under sub-sectiou (1). There can
be no doubt that all the three heads specified in the three sub-sections in
Section 23 are the sums to be 'awarded by the Court'. Hence the words
"eYery award under this part" cannot be treated as the word 'award' after
H
178 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A delinking the amounts awarded as per sub-section (1-A) or sub-section (2) .
of Section 23. [185-E; 187-G-H; 188-A-B]
2. What is intended under Section 23(2) is in addition to the market

B
value of the land and in consideration ~f the compulsory nature of the
acquisition. But it cannot be equated with the damage caused on account
of "any disinclination of the person to part with the land acquired". Section
-
24 emphasises that no amount on account of any disinclination of the
person interested to part with the land, shall be granted as compensation.
This aspect is qualitatively different from the' solatium' which the legislatUre
provided in consideration of the compulsory nature of acquisition.
c Compulsory nature of acquisition is to be distinguished from voluntary
sale or transfer. In voluntary sale the owner is free to settle terms of
transfer and choose the buyer as to appoint the point of time for receiving
consideration and parting with the title and possession over the land
whereas in compulsory acquisition the land owner is deprived of the right
of opportunity to negotiate bargain for the sale price. Thus solatium as
D envisaged under Section 23(2) in consideration of the compulsory nature
of the acquisition is not the same as damage on account of the disinclination
to part with land acquired. [188-D-E-F-G-H; 189-A-B]
3. As per provisions contained in Section 34 and 31(1), the Collector is .....
under a legal obligation to pay the compensation awarded by him to the
E
party entitled for it. Further the compensation awarded would include the
total sum arrived at as per Section 23(1), Section 23(1-A) and Section 23(2)
of the Act. Itis inconceivable that solatium amount.attracts only the escalated
rate of interest if the compensation is not paid within one year from the date
of taking possession and there would be no interest on solatium during the
F preceding period as legislative intent in the enactment of Section 23 of the
Act is to reach the aggregate amount as awarded as compensation in the
hands of the person as and when the award is passed at any rate, as soon as
he is deprived of possession of his land. Any delay in making payment of the
sum should enable the party to have interest on the sum till he receives it
G splitting of the compensation into different components for the purpose of '·
payment of interest under Section 34 was not in the contemplation of the . '
!
legislature while enacting this Section. [189-D; E; F-G-H]
G. Venlwtesh v. Special Land Acquisition O.ffi.cer, Affi (1975) Karnataka ·
I
75; B. Ravinder Reddy v. Special Duty Collector, Land Acquisition (Industries)
H Hyderabad, AIR (1981) A.P. 381; State of Haryana v. Smt. Kailashwati & .J
I'
J
SUNDER v. U.0.1. [THOMAS, J.] 179
Ors., AIR (1980) P&H 117 and Hindustan Aeronautics Ltd. v. Munuswamy A
Reddy,.AIR (1993) Karnataka 77, referred to.

4. Once it is held that solatium provided for under Section 23(2) of

- the Act forms an integral and statutory part of the compensation awarded,
int~rest is payable on the compensation awarded and not merely on the
market value of the land. The provisions of Section 28 in terms warrant B
and authorise the grant of interest on solatium as well. [190-D-E]

State of Haryana v. Smt. Kailashwati & Ors., AIR (1980) P&H 117,
approved.

CIVIL APPELLATE JURISDICTION: Civil Appeal.No. 6271of1998.
c
From the Judgment and Order dated 22. 7 .98 of the Delhi High Court in
R.F.A. No. 390 of 1990.

WITH D
C.A. Nos. 6272, 6273, 6274/98, 1032, 1185, 1186, 1187, 1188, 1189,
1190, 1191, 1192, 1193, 2705/99, 2437 to 2445 of 2000.

Harish N. Salve, Solicitor General, P.P. Malhotra, Rakesh Dwivedi, N.C.
Kochhar, Subodh Markandeya, Sudhir Chandra and Bhaskar Gupta, Sunil
E
Gupta, J.N.S. Tyagi, Manmeet Singh Jamwal, Vivek Vishnoi, Punit D. Tyagi,
C.V. Subba Rao, Ms. Kiran Bhardwaj, R.N. Verma, Ajay Sharma, M.V. Bhaskar,
Sharavan Kumar Sharma, K.C. Kaushik, B.V. Bairam Das, S.W.A. Qadri,
Rekha Pandey, for D.S. Mahra, Dhruv Mehta, Aman Vachhar, Om Prakash, Ms.
Shobha, Ms. Anu Mehta, S.K. Mehta, Tara Chand Sharma, Ms. Neelam Sharma,
Rajeev Sharma, Rupesh Kumar, Ms. Meenakshi Arora, K.C. Jain, Atul Sharma, F
Rishi Agarwal, E.C. Agrawala, Parthapratim Chaudhuri, Sanjeev Bansal, K.S.
Rana, Ms. Geetanjali Mohan, P.N. Gupta, D.B. Vohra, Rajendra Singhvi, Ashok
Kumar Singh, Ms. Chilra Markandeya, Ms. Feroza Bano, Ms. Jyotsna Singh,
Jayant Bhushan, Achintya Divivedi, Ms. Indu Malhotra, Ms. Madhu Sweta,
Ms. Pooja Vij, Sushil Kr. Jain and Ms. Shipra Ghose for the appearing parties. G
The Judgment of the Court was delivered by

THOMAS, J. The question referred to this Bench of five Judges is a
simple one. Is the State liable to pay interest on the amount envisaged under
Section 23(2) of the Land Acquisition Act, 1894 (for short 'the Act')? The sum H
180 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A contemplated in the aforesaid sub-section can conveniently be called "solatium"
as that expression has been ~sed plentifully in almost all land acquisition
proceedings in India. The. reference of the aforesaid question to this larger

B
Bench was necessitated on account of a seeming conflict as between the
decision of a three Judge Bench of this Court in Union o.f India v. Shri Ram
Mehar and Ors. [1973] 1 SCC 109 on the one hand and a few later decisions
of co-equal Benches of this Court on the other hand.
-
The power of grantingi~terest on the sums involved in land acquisition
proceedings is endowed in two provisions of the Act. Section 34 enjoins on the
Collector.to pay interest at two tier rates. For the first stage, from the date of
c taking possession until disbursement of the awarded amount the rate is 9% per
annum. If such disbursement is delayed beyond one year the rate of interest
would escalate to 15% per annum from the date of expiry of the said period
of one year. Section 28 of the Act contains the same postulates and it is
supplementary to the above provision. It empowers the court to direct the
Collector to pay interest at the above two tier rates on the excess sum awarded
D by the court. The real question is whether in calculating the interest, as mentioned
in the said provisions, the amount of solatium envisaged in Section 23(2) of
the Act should be included in or excluded from the sum on which interest is
liable to be paid.

In Union of India v. Shri Ram Mehar and Ors. (supra) the three Judge
E
Bench considered the scope of the expression "market value" in Section 4(3)
of the Land Acquisition (Amendment and Validation) Act, 1967. By the said
Amendment Act certain changes were effected in the principal Act. Section
4(3) of the Amendment Act provided that simple interest shall be paid at the
rate of 6% per annum "on the market value of such land as determined under
F Section 23 of the principal Act" from the date of expiry of three years to the
date of notification under Section 4(1) of the principal Act. Learned Judges
held that solatium cannot form part of the market value of the land. It was also
held that "market value" is only one of the components to be reckoned in the
determination of the amount of compensation. The following observations
G made by the Bench is highlighted to be the ratio of the decision:

"If market value and compensation were intended 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
H Section 23( 1) and that consists (a) of the market value of the land and

I
'
SUNDER v. U.0.1. [THOMAS, J.] 181
(b) the sum of 15% on such market value which is stated to be the A
consideration for the compulsory nature of the acquisition. Market
value is there.fore only one of the components in the determination of
the. a;nount of compensation. If the Legislature has used the word
'market value' in Section 4(3) of the Amending Act of 1967 it must
be hel9 that it was done deliberately and what was intended was that
B
interest should be payable on the market value of the land and not on
the amou.nt of compensation otherwise there was no reason why the
Parliament should not have employed the word 'compensation' in the
aforesaid provision of the Amending Act."

That decision was followed by a two Judge Bench of this Court in c
Periyar & Pareekanni Rubbers Ltd. v. State of Kera/a, (1991] 4 SCC 195.
Learned Judges (L.M. Sharma, J, as he then was, and K. Ramaswamy, J) in the
concluding part of that decision said as follows:

"Therefore, we have no hesitation to hold that Section 25(3)
contemplates payment of interests on solatium to re-compensate the 0
owner of the land for loss of user of the land from the date of taking
possession till date of payment into court. The word compensation has
been advisedly used by the legislature. Accordingly we hold that the
appellant is entitled to interest on solatium."

The turn of the tide in the reverse direction commenced when a three E
Judge Bench adopted the contrary view in Mir Fazeelath Hussain & Ors. v.
Special Deputy Collector, (1995] 3 SCC 208 wherein learned Judges held that
solatium is not a part of the award and hence interest is not claimable thereon.
We may point out that the decision of the three Judge Bench in Union of India
v. Shri Ram Mehar and Ors. (supra) was not referred to in Mir Fazeelath F
Hussain, presumably because it would not have been brought to the notice of
the learned Judges. Another three Judge Bench in Prem Nath Kapur & Am: v.
National Fertilizers Corporation of India Ltd. & Ors., (1996] 2 SCC 71, while
considering the question whether an awardee is entitled to appropriate amount
of compensation first towards cost and then towards interest etc., made the
observation that "the liability to pay interest is only on the excess amount of
G
compensation determined under Section 23( 1) and not on the amount already
determined by the Land Acquisition Officer under Section 11 and paid to the
party or deposited into the court or determined under Section 26 or Section 54
and deposited into the court or on solatium under Section 23(2) and the
additional amount under Section 23(1-A)". But the question whether solatium H
182 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A is part of the compensation did not positively arise in the said decision nor has
it been gone into by the learned Judges.

However, such a question has been considered directly by another three
Judge Bench (K. Ramaswamy, S. Saghir Ahmad and G.B. Pattanaik, JJ) in
Yadavrao P. Pathade v. State of Maharashtra, [1996] 2 SCC 570. Learned
B Judges made a reference to the observation of the two Judge Bench in Periyar
& Pareekanni Rubbers Ltd. (supra) to the effect that solatium is the component
forming the compensation mentioned in Section 23 of the Act and hence
interest would accrue on it. Nonetheless learned Judges dissented from the
view in Periyar & Pareekanni Rubbers Ltd. by stating that "unfortunately
c neither the provisions of the Act were considered nor the distinction of the
provisions had been brought to the notice of the court at that time." The Bench
referred to Section 23(1) of the Act and laid emphasis on the words "in addition
to the market value" in sub-section (2) of Section 23. Hence it was held thus:

"The legislature, therefore, made a distinction between compensation .;.
D under Section 23(1) and the additional amount on such market value
as solatium in consideration of compulsory nature of acquisition. In
other words, Section 28 does not comprehend payment of interest on
solatium when it expressly mentions payment of interest on
compensation under Section 28 referable to Section 23(1) of the Act."
E
The Bench upheld the view of the High Court that there is no legal
warrant for awarding interest on solatium.

In the light of the above divergent views even as between Benches of
co-equal strength Mr. Sunil Gupta and the rest of the learned counsel .who
F argued for the claimants endeavoured to sustain the view that solatium is part
of the compensation. According to them the interest envisaged in Section 28
as well as Section 34 of the Act would accrue on the aggregate amount which
envelopes the. solatium as well. The opposite view was projected by Shri Harish
N. Salve, learned Solicitor General of India and Shri Rakesh Dwivedi, learned
Senior Advocate for one of the instrumentalities which may have to bear the
G
burden if the plea of the claimant is upheld.

Shri Harish N. Salve, learned Solicitor General submitted that since the
expression "compensation" has not been defined in the Act, but was used in
different places in different contexts it could contain more than one meaning.
H He cited Section 35 of the Act as. an example (which contains the provisions
SUNDER v. U.0.1. [THOMAS, J.] 183
for procuring occupation of waste or arable lands for temporary use) wherein A
the word "compensation" is used ostensibly in a different connotation. He
further submitted that there is distinction between the compensation awarded
for the land acquired as indicated in Section 23(1) of the Act and the aggregate
compensation which comprises the former plus the solatium and the additional
amount payable under sub-section (1-A) thereof. The two sums in the latter
category are payable merely as consequential to the determination of the
B
compensation mentioned in the first sub-section, according to learned Solicitor
General. Alternatively he contended that the actual loss sustained by the
landowner is the enjoyment of the property and hence the real compensation
is the just equivalent of it which represents only the amount covered by the
different clauses incorporated in the first sub-section of Section 23 of the Act. c
In that view also, according to the Solicitor General, the interest need be
payable only on the said compensation.

Mr. Rakesh Dwivedi, learned senior counsel while suppqrting the
arguments of the Solicitor General invited our attention to .Section 15 and
Section 26(1) of the Act to contend that the real compensation which is D
r countable for the purpose of interest cannot encompass the solatium.

· ·Shri Sunil Gupta, learned counsel who argued for the claimants in this
appeal laid emphasis to the title words of Section 23 i.e. "Matters to be
considered for determining compensation". He contended tha~ the entire section
is intended to contain different heads for determining the total amount of E

'
compensation and the person interested to whom the said amount is payable,
when he is deprived of the possession of the land, must get the said compensation
and hence interest thereon shall accrue till payment of it without delinking any
sum therefrom.

Section 11 of the Act enjoins on the Collector the statutory duty to F
conduct an inquiry into the value of the land on the date of publication of the
notification under Section 4(1) of .the Act and to make an award for the
"compensation" which in his opinion should be allowed for the land. Section
31 of the Act casts obligation on the Collector that after making the award
under Section 11 he shall tender payment of "the compensation awarded by G
him" to the persons entitled to it according to the award .. This means that law
does not relish any delay in making the payment once the award is made. Thus,
making the award shall normally follow payment of compensation as
expeditiously as possible.

Section 16 empowers the Collector to take possession of the land after H
184 SUPREME COURT REPORTS . (2001] SUPP. 3 S.C.R .
A making the award under Section 11. When possession is so taken the land shall
vest absolutely in the Government free from all encumbrances. This is the
statutory operation which is clearly envisaged in Section 16 itself. But i~ the
absence of a legal insistence that the amount awarded should necessarily b~
paid before taking possession of t 1·~ land it could happen, perhaps quite often,
that there would be some interregnum between the date of talcing possession
B
and malcing payment of the awarded sum.

Question of payment of interest would arise only when the compensation
is not paid or deposited on or before the date of talcing possession of the land.
It is inequitable that the person who is deprived of the possession of the land,
c on account of acquisition proceedings is not given the amount which law
demands to be paid to him, any delay thereafter would only be to his detriment.
There must be a provision to buffet such iniquity. It is for the purpose of
affording relief to the person who is entitled to such compensation when the
payment of his money is delayed that the provision is made in Section 34 of
the Act. That section is extracted below:
D
"34. Payment of Interest.- 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 nine per centum per annum from the time of so talcing possession
until it shall have been so paid or deposited.
E
Provided that if such compensation or any .part thereof is not paid
or deposited within a period of one year from the date on which
possession is taken, interest at the rate of fifteen per centum per annum
shall be payable from the date of expiry of the said period of one year
.F on the amount of compensation or part thereof which has not been paid
or deposited before the date of such expiry."

When the court is of opinion that Collector should have awarded a larger
sum as compensation the court has to direct the Collector to pay interest on
such excess amount. The rate of interest is on a par with the rate indicated in
G Section 34. This is so provided in Section 28 of the Act which is extracted
below:

"If the sum which, in the opinion of the court, the Collector ought to
have awarded as compensation is in excess of the sum which the
Collector did award as compensation, the award of the Court may
H direct that the Collector shall pay interest on such excess at the rate of
SUNDER v. U.0.1. [THOMAS, J.] 185
nine per centum per annum from the date on which he took possession A
of the land to the date of payment of such excess into court.

Provided that the award of the Court may also direct that where such
excess or any part thereof is paid into Court after the date of expiry
of a period of one year from the date on which possession is taken,
interest at the rate of fifteen per centum per annum shall be payable B
from the date of expiry of the said period of one year on the amount
of such excess or part thereof which has not been paid into Court
before the date of such expiry."

Thus interest has to accrue as per Section 34 and Section 28 of the Act
on the compensation awarded, whether it is as per the award initially passed
c
by the Collector or by the Court later. What is meant by "the compensation"
awarded? Both sides cited different definitions for the word "compensation"
as contained in different lexicographya. In "Words and Phrases" (Permanent
Edn.) different connotations of the word "compensation" have been delineated.
One of them relates to the law of eminent domain, where compensation means D
recompense in value, a quid pro quo, and must be in money. Another is relating
to the property taken for public use. Then it is the fair market value at the time
of taking it. From the Constitutional perspective the word 'compen:;ation' for
the property taken was understood as the just equivalent of the value of the
property. But when compensation is regarded as a statutory obligation the E
afore-cited definitions need not detract the courts in fathoming the real import
of it. The exercise can be done with the aid of the provisions in the statutes.
So what the Court, in the context of land acquisition, has to decide is how the
Act has designed the compensation vis-a-vis the liability to pay interest. In this
context we have to read Section 23 of the Act. It is extracted below:
F
"23. Matters to be considered in detennining compensation. - (1) In
determining the amount of compensation to be ·awarded for land
acquired under this Act, the court shall take into consideration-

first, the market vaI.ue of the land at the date of the publication of
the notification under section 4, sub-section ( 1),
G

secondly, the damage sustained by the person interested, by·reason
of the taking of any standing crops or trees which may ~e on the land
at the time of the Collector's taking possession thereof;
H
186 SUPREME COURT REPORTS (2001] SUPP. 3 S.C.R.
A thirdly, the damage (if any), sustained by the person interested, at
the time of the Collector's talcing possession of the land, by reason of
severing such land from his other land;

fourthly, the damage (if any), sustained by the.person interested,
at the time of the Collector's taking possession of the land, by reason
B of the acquisition injuriously affecting his other property, m9vable or
immovable, in any other manner, or his earnings;

fifthly, if, in consequence of the acquisHion of the land by the
Collector, the person interested is compelled to change his residence
c or place of Qusiness, the reasonable expenses (if any) incidental to such
change; and

sixthly, the damage (if any) bona fide resulting from diminution
of the profits of the land between the time of the publication of the
declaration under Section 6 and the time of the Collector's taking
D possession of the land.

(IA) In addition to the market value of the land above provided,
the Court shall in every case award an amount calculated at the rate
of twelve per centum per annum on such market value for the period
E commencing on and from the date of the publication of the notification
under section 4, sub-section ( 1), ·in respect of such land to the date of
the award of the Collector or the date of taking possession of the land,
whichever is earlier.

(2) In addition to the market-value of the land, as above provided,
F the court shall in every case award a sum of thirty per centum on such
market-value, in consideration of the compulsory nature of the
acquisition."

Mr. Rakesh Dwivedi, learned senior counsel while contending that the
sum envisaged in sub-section (2) cannot form part of the compensation, as the
G
same is a payment only by way of solace on account of the compulsory nature
of the acquisition, sought to seek assistance from Section 15 of the Act. It reads
thus:

"In determining the amount of compensation, the Collector shall be
H guided by the provisions contained in sections 23 and 24."
SUNDER v. U.0.1. [THOMAS, J.] 187
Section 24 of the Act consists of a catalogue of matters which shall not A
be taken into account while determining compensation. The title of the section
is "Matters to be neglected in determining compensation". The key words are
"but the court shall not take into consideration" the matters enumerated
thereunder. The argument is that whatever items have been mentioned therein
even if included in the award would not partake of the character of compensation
B
as the legislature has imposed a ban against reckoning them to be so treated.
Any amount paid on account of "any disinclination of the person interested to
part with the land acquired" (vide clause "secondly" in Section 24) would thus
be kept outside the ambit of the compensation for land, and those excluded
items, even if payable, have different shades or character, according to the
counsel. In further support of the said contention reference was made to Section c
26 of the Act which reads as follows:

"26. Forni of Awards. - (1) Every award under this Part shall be in
writing signed by the Judge, and shall specify the amount awarded
under clause first of sub-section (1) of section 23, and also the amounts
(if any) respectively awarded under each of the other clauses of the D
same sub-section, together with the grounds of awarding each of the
said amounts.

(2) Every such award shall be deemed to be a decree and the statement
of the grounds of every such award a judgment within the meaning of
E
section 2, clause (2) and section 2, clause (9 ), respectively, of the Code
ofCivil Procedure, 1908."

Section 26 does not say that the award would contain only the amounts
granted under sub-section (1) of Section 23. The special mention of that sub-
section in Section 26 is only for the purpose of directing that the grounds or F
reasons for awarding the amount under each of the clauses in the sub-section
shall be specified in the award. It is unnecessary to mention any reason or
ground in any award as to why the sums indicated in sub-section (1-A) and sub-
section (2) of Section 23 of the Act were granted, because they are only the
sequels or concomitant adjuncts of the determination of the total amount
indicated in sub-section (1). No judicial exercise is required to quantify the G
sums mentioned in sub-section (1-A) or sub-section (2) because the section
itself specifies the percentage to be worked out for the purpose of adding to
the total amount arrived at under sub-section (1). Otherwise Section 26 is not
intended to show that the compensation awarded would be bereft of the additional
amount and the solatium envisaged under sub-section (1-A) or sub-section (2). H
188 SUPREME COURT REPORTS (2001) SUPP. 3 S.C.R.
A This caq be clearly discerned from the commencing words of Section 26 itself.
They are: "Every award under this Part shall be in writing signed by the Judge".
What is referred to therein is Part III of the Act which comprises of a fasciculus
of twelve provisions starting with Section 18 and ending with Section 28A of
the Act. There can be no doubt that all the three heads ~pecified in ihe three
sub-sections in Section 23 are the sums to be "awarded by the court". Hence
B
the words "every award under this Part" cannot be treated as the award after
delinking the amounts awarded under sub-section (1-A) or sub-section (2) of
Section 23.

We may now see whether exclusion of the factor "any disinclination of
c the person interested to part. with the land acquired" from being considered as
part of the compensation indicated in Section.24 of the Act would be of any
aid for excluding solatium from the purview of interest accrual process. No
doubt what is intended under Section 23(2) is additional to the market value
of the land and "in consideration of the compulsory nature of the acquisition".
But it cannot be equated with any damage caused on account of "any \ -
D disinclination of the person to part with the land acquired."

It is apposite in this context to point out that during the enquiry
contemplated under Section 11 of the Act 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 ~ould advance objections
E
for highlighting their disinclination to part with the land acquired on account
of a variety of grounds, such as sentimental or religious or psychological or
traditional etc. Section 24 emphasises that no amount on account of any
disfoclination of the person interested to part with the land shall be granted as
compensation. That aspect is qualitatively different from the solatium which
F the legislature wanted to provide "in consideration of the compulsory nature
of the acquisition".

Compulsory nature of acquisition is to be distinguished from voluntary
sale or transfer. In the latter, the landowner has the widest advantage in finding
out a would-be buyer and in negotiating with him regarding the sale price. Even
G in such negotiations or haggling normally no landowner would bargain for any
amount in consideration of his disinclination to part with the land. The mere
fact that he is negotiating for sale of the land would show that he is willing to
part wit11 the land. The owner .is free to settle terms of transfer and choose the
buyer as. also to appoint the point of time when he would be· receiving
H consideration and parting with his title and possession over the land. But in the
SUNDER v. U.0.1. [THOMAS, J.] 189
compulsory acquisition the landowner is deprived of the right and opportunity A
to negotiate and bargain for the sale price. It depends on what the Collector or
the Court fixes as per the provisions of the Act. The solatium envisaged in sub-
section (2) "in consideration of the compulsory nature of the acquisition" is
l_ thus not the same as damages on account of the disinclination to part with the
I

B

l
land acquired.

In deciding the question as to what amount would bear interest under
Section 34 of the Act a peep into Section 31 ( l) of the Act would be advantageous.
That sub-section says: "On making an award under section l l, the Collector
shall tender payment of the c_ompensation awarded by him to the persons
interested entitled thereto according to the award, and shall pay it to _1hem C
unless prevented by some one or more of the contingencies mentioned in the
next sub-section." The remaining sub-sections in that provision only deal with
the contingencies in which the Collector has to deposit the amount instead of
paying it to the party concerned. It is the legal obligation of the Collector to
pay "the compensation awarded by him" to the party entitled thereto. We make D
it clear that the compensation awarded would include not only the total sum
arrived at as per sub-section (l) of Section 23 but the remaining sub-sections
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. E

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 escalated to 15% per
annum from the date of expiry of the said period of one year "on the amount F
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 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 G
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. Splitting up the compensation into different
components for the purpose of payment of interest under Section 34 was not
in the contemplation of the legislature when that section was framed or enacted. H
190 SUPREME COURT REPORTS [2001) SUPP. 3 S.C.R.
A We may also point out that different High Courts have taken the same
view in the following decisions:

G. Venkatesh v. Special land Acquisition Officer, AIR (1975) Karnataka
95), B. Ravinder Reddy v. Special Deputy Collector, Land Acquisition
(Industries), Hyderabad, AIR (1981) A.P. 381, State of Haryana v. Smt.
B Kailashwati & Ors., AIR ( 1980) P & H 117 and Hindustan Aeronautics Ltd.
v. Muniswamy Reddy, AIR (1993) Karnataka 77.

We think it useful to quote the reasoning advanced by Chief Justice S.S.
Sandhawalia of the Division Bench of the Punjab and Haryana High Court in
State of Haryana v. Smt. Kailashwati and Ors. (supra).
c
"Once it is held as it inevitably must be that the solatium provided for
under Section 23(2) of the Act forms an integral a~d statutory part of
the compensation awarded to a landowner, then from the plain terms
of section 28 of the act, it would be evident that the interest is payable
D on the compensation awarded and not merely on the market value of
the land. Indeed the language of S.28 does not even remotely refer to
market value alone and in terms talks of compensation or the sum
equivalent thereto. The interest awardable under Section 28 therefore
would include within its ambit both the market value and the statutory
solatium. It would be thus evident that the provisions of Section 28 in
E terms warrant and authorise the grant of interest on solatium as well."

In olir view the aforesaid statement of law is in accord with the sound
principle of interpretation. Hence the person entitled to the compensation
awarded is also entitled to get interest on the aggregate amount including
F solatium. The reference is answered accordingly.

S.K.S. Appeals disposed of.

, I