* THE HON’BLE Ms. JUSTICE G. ROHINI + Writ Petition No. 9929 of 2010 %Date: 02.08.2010 # 1. Rayala Venkataratnam and 19 others. … Petitioners Vs. $ 1. The State of A.P., rep. by the Principal Secretary To Government, I & CAD (PWLA-1) Dept., Secretariat Buildings, Hyderabad and 2 others. … Respondents ! Counsel for the petitioners: Sri A.V. Sivaiah ^ Counsel for the respondents 1 to 3: Govt. Pleader for Land Acquisition <GIST: >HEAD NOTE: ?CASES REFERRED: [1] (2001) 7 SCC 211 2 (1991) 1 SCC 262 3 (2007) 2 SCC 341 THE HON’BLE Ms. JUSTICE G. ROHINI Writ Petition No. 9929 of 2010 Dated: 02.08.2010 Between: 1. Rayala Venkataratnam and 19 others. … Petitioners And 1. The State of A.P., rep. by the Principal Secretary To Government, I & CAD (PWLA-1) Dept., Secretariat Buildings, Hyderabad and 2 others. … Respondents THE HON’BLE Ms. JUSTICE G.ROHINI WRIT PETITION No.9929 of 2010 ORDER: This writ petition is filed seeking a declaration that the action of the respondents in having declined to pay the interest on additional market value and solatium as provided under Section 23 of the Land Acquisition Act, 1894 to the petitioners as arbitrary and illegal. The facts, which are not in dispute, are as under : By notification dated 5.4.1979 published under Section 4 (1) of the Land Acquisition Act, 1894 (for short, ‘the Act’), Ac.24.24 cents of the land belonging to the petitioners situated in Taluvai Village of Jangareddygudem Mandal, West Godavari District was acquired for foreshore submersion of Vengalaraya Sagar Project. After making the enquiry, the Land Acquisition Officer, by award dated 5.6.1985 fixed the market value of the lands acquired at Rs.6,000/- per acre. Being dissatisfied with the quantum of compensation awarded, the petitioner sought reference under Section 18 of the Land Acquisition Act. Accordingly, the matter was referred to the Court of the Senior Civil Judge, Kovvur and by order dated 25.3.2000 in O.P.No.14 of 1991 the compensation was enhanced from Rs.6,000/- to Rs.11,000/- per acre. However it was held that the claimants were not entitled for interest on 12% additional market value and solatium. As against the said order, the petitioners preferred A.S.No.425 of 2001 before this Court. A Division Bench of this Court by judgment dated 13.2.2001 while enhancing the compensation from Rs.11,000/- to Rs.20,000/- per acre, held that the claimants were entitled to all other statutory benefits. Against the said judgment, though the Government preferred S.L.P.No.2091 of 2002, the same was dismissed by the Supreme Court on 20.09.2002. Thereafter a sum of Rs.16,22,419/- was sanctioned by the 1st respondent towards part payment of the compensation payable to the petitioners. So far as the balance is concerned, the proposals submitted by the 2nd respondent were not accepted by the 1st respondent vide Memo dated 22.1.2010 on the ground that it was held by the Civil Court in O.P.No.14 of 1991 that the petitioners were not entitled for interest on 12% additional market value and solatium. Aggrieved by the said action, the present writ petition has been filed. The facts noticed above are not disputed by the respondents. However in the counter-affidavit it is contended that in view of the judgment and decree in O.P.No.14 of 1991, dated 25.3.2000, holding that the petitioners were not entitled to interest on 12% additional market value and solatium, the petitioners were not entitled to receive any further amounts. It is contended that the petitioners did not challenge that portion of the decree in O.P.No.14 of 1991 wherein the interest on 12% additional market value and solatium was expressly rejected. It is also claimed that except the interest on 12% additional market value and solatium as the petitioners were already paid the rest of compensation as per the decree in A.S.No.425 of 2001 dated 13.2.2001 and E.P.No.28 of 2006 filed by the petitioners is pending, the present writ petition is misconceived. I have heard the learned counsel for both the parties. Section 23 (1-A) of the Land Acquisition Act, 1894 provides that in addition to the market value of the land, the Court shall in every case award an amount calculated at the rate of 12% per annum on such market value for the period commencing from the date of the publication of the notification under Section 4 (1) to the date of the award of the Collector or the date of taking possession of the land whichever is earlier. In addition to that as per sub- section (2) of Section 23 the Court shall award a further sum of 30% on such market value in consideration of the compulsory nature of the acquisition. The question as to whether interest is payable on the additional amount payable under Section 23 (1-A) and on the solatium under Section 23 (2) of the Land Acquisition Act has been settled by a larger bench of five judges of the Apex Court in SUNDER v. UNION OF INDIA[1] holding that the interest shall be awarded on the amounts payable under Section 23 (1-A) as well as Section 23 (2) of the Land Acquisition Act. The said decision was rendered on 19.9.2001. In the instant case, O.P.No.14 of 1991 was disposed of by the Court of the Senior Civil Judge, Kovvur on 25.3.2001 i.e., prior to the decision in SUNDER’S case (1 supra) and as per the law governing the field at the relevant point of time, it was held that the claimants/petitioners herein were not entitled for the interest on the additional market value and the solatium. The judgment of this Court in A.S.No.425 of 2001, dated 13.2.2001 was also rendered prior to the decision in SUNDER’S case (1 supra) and while enhancing the compensation from Rs.11,000/- to Rs.20,000/- per acre it was held that the appellants/petitioners herein were entitled to all other statutory benefits. Having regard to the judgment and decree of the Reference Court wherein it was expressly held that the petitioners were not entitled for interest on 12% additional market value and the solatium, it is contended by the respondents that the petitioners were not entitled for interest on 12% additional market value and solatium. It is also contended that though the petitioners preferred an appeal against the order of the Reference Court for further enhancement of the market value they did not challenge that portion of the decree whereby the Reference Court rejected interest on 12% additional market value and solatium and therefore the decision in SUNDER’S case (1 supra) was not applicable. I do not find any substance in the above contention in view of the settled principles of law that the award of interest is consequential and automatic once the conditions under Section 28 which provides for awarding interest by the Court on excess compensation and Section 34 which provides for payment of interest by the Collector when the amount of compensation is not paid before taking possession of the land are satisfied. In SHREE VIJAY COTTON & OIL MILLS LIMITED v. STATE OF GUJARAT[2] it was held by the Supreme Court that the payment of interest was not dependent on any claim by the person whose land was acquired and there could not be any controversy or lis between the parties regarding payment of interest. While expressing that it was not necessary for the claimant to have filed separate appeal/cross objections before the High Court for the purpose of claiming interest under Section 28 or Section 34 of the Land Acquisition Act, it was further explained as under: “There is inherent evidence in the wording of Sections 28 and 34 to show that the framers of the Act intended to assure the payment of interest to the person whose land was acquired and it was not the intention to subject the said payment to procedural hazards. Section 34 lays down that "the Collector shall pay the amount awarded with interest at 6 per cent per annum”. The legislative mandate is clear. It is a directive to the collector to pay the interest in a given circumstance. Section 34 nowhere says that the interest amount is to be included in the award-decree as prepared under Section 23 (1) read with Section 26 of the Act. Similarly Section 28 provides ‘the award of the court may direct that the Collector shall pay interest’. Here also the award under Section 23 (1) read with Section 26 has been kept distinct from the payment of interest under the section. The interest to be paid under Section 34 and also under Section 28 is of different character than the compensation amount under Section 23 (1) of the Act. Whereas the interest, if payable under the Act, can be claimed at any stage of the proceedings under the Act, the amount of compensation under Section 23 (1) which is an award-decree under Section 26, is subject to the rules of procedure and limitation. The rules of procedure are handmaiden of justice. The procedural hassle cannot come in the way of substantive rights of citizens under the Act.” The ratio laid down in SHREE VIJAY COTTON & OIL MILLS LIMITED’S case (2 supra) has been reiterated in a later decision in PATEL JOITARAM KALIDAS v. SPL. LAND ACQUISITION OFFICER[3] holding that grant of interest on the additional amount payable under Section 23 (1-A) and solatium payable under Section 23 (2) of the Land Acquisition Act was consequential and automatic and involved only arithmetical calculation and not application of judicial mind or exercise of judicial discretion. In the light of the ratio laid down in the above decisions the petitioners herein are entitled to interest on the amounts payable towards additional market value under Section 23 (1-A) and the solatium payable under Section 23 (2) of the Land Acquisition Act notwithstanding the fact that the same was rejected by the Reference Court. As a matter of fact the legal position with regard to payment of interest on the above amounts has been clarified only 19.9.2001 in SUNDER’S case (1 supra) after the judgments and decrees passed by the Reference Court as well as this Court in O.P.No.14 of 1991 and A.S.No.425 of 2001 respectively. Hence there cannot be any objection for payment of the interest on the above said amounts awarded to the petitioner. Accordingly, the Writ Petition is allowed with a direction to the respondents to release the balance amount to which the petitioners are entitled to towards the interest on additional market value under Section 23 (1-A) and the solatium under Section 23 (2) of the Land Acquisition Act, 1894 as expeditiously as possible preferably within a period of eight weeks from the date of receipt of this order. No costs. ____________ G. ROHINI, J. Dt. 02.08.2010 Note:- LR copy to be marked. (B/O) gbs [1] (2001) 7 SCC 211 [2] (1991) 1 SCC 262 [3] (2007) 2 SCC 341