THE HON’BLE SRI JUSTICE V.ESWARAIAH & THE HON'BLE MR JUSTICE NOUSHAD ALI <+ APPEAL SUIT No.2864 of 1999 % MONDAY, THE THIRTIETH DAY OF AUGUST TWO THOUSAND AND TEN # Smt.Osuri Venkata Subbamma (died) and 4 others ….Appellants Versus $ The Land Acquisition Officer and Mandal Revenue Officer, Kakinada, East Godavari District …..Respondent ! Counsel for the Appellant : Dantu Srinivas ^ Counsel for the respondents : GP for Land Acquisition < Gist : > Head Note: ? Cases Referred: 1. 2001(5) ALT 51 (SC) 2. (2006) 8 SCC 457 3. 2005(6) SCJ 658 4. 2010(3) ALD (SC) 5. AIR 1980 P&H 117 6. 2006(5) ALT 24 (SC) 7. 1987(1) ALT 137 IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD MONDAY, THE THIRTIETH DAY OF AUGUST TWO THOUSAND AND TEN PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH & THE HON'BLE MR JUSTICE NOUSHAD ALI A.S. No.2864 of 1999 Between: Smt.Osuri Venkata Subbamma (died) and 4 others ..... APPELLANTS AND The Land Acquisition Officer and Mandal Revenue Officer, Kakinada, East Godavari District .....RESPONDENT The Court made the following: THE HON'BLE SRI JUSTICE V.ESWARAIAH & THE HON'BLE SRI JUSTICE NOUSHAD ALI A.S. No.2864 of 1999 JUDGMENT: (per Hon’ble Sri Justice V.Eswaraiah) This is an appeal filed by the appellants/claimants aggrieved by the order of the learned Principal Senior Civil Judge, Kakinada dated 06.08.1999 in O.P.54/1991. 2. It is stated that an extent of Ac.3.12 cents of land situated in Suryaraopet village of Kakinada town was notified for acquisition. Pursuant to the draft notification issued under Sec. 4(1) of the Land Acquisition Act, 1894 (hereinafter referred to as “the Act”) dated 05.02.1977, only Ac.2.83 cents of land situated in Sy.Nos.123/1 and 123/2A of Suryaraopet village, Kakinada town was acquired by the Government for the purpose of providing house sites to the weaker sections. The Land Acquisition Officer passed award No.1/78, dated 03.07.1978 awarding compensation @Rs.20,000/- per acre. The claimants received the compensation under protest and requested the Land Acquisition Officer to refer the matter under Sec.18 of the Act to the competent Civil Court. On reference being made, the reference Court took the reference as O.P.No.54/1991 and after taking into consideration the evidence adduced before it, enhanced the compensation from Rs.20,000/- to Rs.21,000/-. The reference Court also granted solatium @15% on the enhanced compensation. However, the Court below held that the claimants are not entitled to interest on solatium as per the amended provisions of the Act, but they are entitled to interest @6% p.a. from the date of taking possession till the date of payment of enhanced compensation of Rs.1,000/-. Aggrieved by the same, the present appeal is filed. 3. Though the learned counsel appearing for the claimants made an attempt and urged for enhancement of compensation higher than the amount what was granted by the reference Court, during the course of arguments he has confined his arguments only for grant of statutory benefits under the amended provisions of the Act. 4. The learned counsel appearing for the respondent resisted the said contention contending that the notification issued under Sec.4(1) of the Act was dated 05.12.1977 and the reference Court disposed of the O.P. on 06.08.1999 and hence the claimants are not entitled to the benefits of the amended statutory provisions prior to the date of judgments of the Hon’ble Supreme Court of India in the cases of Sunder v Union of India[1] and Gurpreet Singh v. Union of India[2]. It is stated that the Bill was introduced for amendment of the Act on 30.08.1982, however, the amendment came into force with effect from 24.09.1984. 5. On the other hand, the learned counsel appearing for the appellants/claimants submits that the claimants are entitled for the statutory benefits from the date of notification issued under Sec.4(1) of the Act, as held by the Hon’ble Supreme Court of India in the cases of R.P.Singh v. Union of India[3] and Sagunthala (dead) through LRs. V. Special Tahsildar (L.A)[4]. 6. The undisputed facts are that the lands of the claimants to an extent of Ac.2.83 cents situated in Suryaraopet of Kakinada Town were acquired by the Government for the purpose of providing house sites to the weaker sections, pursuant to the notification issued under Sec.4(1) of the Act published in the Gazette on 05.02.1977. The Land Acquisition Officer after taking into account the relevant sale statistics, passed award dated 03.07.1978 fixing the market value of the acquired land @Rs.20,000/- per acre. On reference being made, the reference Court taking into consideration the oral and documentary evidence adduced by both the parties, enhanced the compensation from Rs.20,000/- to Rs.21,000/- but held that the claimants are not entitled to the benefits of the amended Act. 7. Now the question that arises for consideration is whether the claimants are entitled to additional market value, solatium and interest on the enhanced compensation as per the amended provisions of Secs.23(1-A), 23(2) and 28 of the Act. 8. Under Sec.23 of the Act, the Court shall take into consideration firstly the market value of the land as on the date of publication of the notification under Sec.4(1) of the Act in determining the amount of compensation to be awarded for the land acquired. In addition to the market value of the land as on the date of notification, under Sec.23(1-A) of the Act, the Court shall in every case award an amount calculated at the rate of twelve percent per annum on such market value from the date of publication of notification under Sec.4(1). In addition to the twelve percent additional market value of the land, under Sec.23(2) of the Act, the Court shall also in every case award a sum of thirty percent on such market value in consideration of the compulsory nature of acquisition, which is popularly known as ‘solatium’. It is not specified in the amended Act from which date the amendment was came into force. Whenever any section is substituted, it relates back to the original section, if the meaning of the substitution is otherwise indicated. 9. In the instant case, the land acquisition proceedings have not been finalised or closed. When the matters are pending, it cannot be said that the claimants are not entitled to the benefits of the amended provisions. Of course, in the cases which have already been disposed of before the amendment and even if EPs are not pending, it can be said that the claimants are not entitled to the benefits of the amended provisions. 10. In so far as determining the market value as on the notification issued under Sec.4(1), fixing the market value of the land and additional market value @12% p.a. under Sec.23(1-A) and @30% solatium under Sec.23(2) shall be considered by the Land Acquisition Officer as well as by the Court. But in so far as the interest is concerned, under Sec.34 of the Act, the Land Acquisition Officer shall pay the interest @9% per annum on the enhanced compensation for a period of one year from the date of taking possession of the land and thereafter @15% per annum after expiry of one year. On reference, if the Court enhances the amount of compensation, under Sec.28 of the Act, the Reference Court shall direct the Collector to pay the interest @9% p.a. on the enhanced compensation from the date on which the possession of the land was taken till the date of payment of such excess amount into the Court, and if such amount is not paid within one year, the Court shall also be entitled to direct the Collector to pay the interest @15% p.a. on the enhanced compensation amount from the date of expiry of one year. Thus, the claimants are also entitled to interest @9% p.a. on the enhanced compensation from the date of taking possession of the said land for a period of one year and thereafter @15% p.a. In the instant case, no doubt issuing of the notification under Sec.4(1) and passing of award is prior to the amendment Act 68/1984 which came into force w.e.f.24.09.1984. Admittedly the reference was made pursuant to the applications of the claimants dated 14.08.1978 and 18.08.1987 and the same was pending on the file of the Reference Court. 11. Had the reference not been pending and the claimants received the compensation, the question of entitlement of the additional market value @12% and solatium @30% on the enhanced compensation and the interest thereon would not have arisen. But as admittedly the matter was pending and the reference Court disposed of the matter on 06.08.1999. In the absence of any prospective application of the substituted sections, we are of the opinion that the claimants are entitled for the benefit of the provisions of Sec.23(1-A), 23(2) as well as Sec.28 under the amended Act 68/1984. 12. In Sunder v. Union of India (1 supra) the question that was referred to the Five Bench of the Apex Court is whether the State is liable to pay interest on the amount envisaged under Sec.23(2) of the Act. The Hon’ble Supreme Court answered the said question holding that the claimants are entitled to compensation and get interest on the aggregate amount including the solatium. A Division Bench of Punjab and Haryana High Court in the case of State of Haryana v. Kailashwalti[5] made the following statement of law in regard to the sound principles of interpretation. “Once it is held as it inevitably must be that the solatium provided for under Section 23(2) of the Act forms as integral and 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 on the compensation awarded and not merely on the market value of the land. Indeed the language of Section 28 does not even remotely refer to equivalent thereto. The interest awarded 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 terms warrant and authorise the grant of interest on solatium as well.” Thus, in view of the aforesaid judgment, the Hon’ble Supreme Court of India held that the claimants are entitled to interest under Sec.28 on the market value, 15% additional market value and 30% solatium on the enhanced compensation amount. 13. The learned Government Pleader appearing for the respondent submits that nowhere it was stated by the Hon’ble Supreme Court in the above said case as to whether the additional market value, solatium and interest are liable to be paid in respect of the notification issued prior to the amendment and as there were conflicting judgments by various High Courts with regard to the entitlement of the additional market value, solatium and interest, the another Five Judges Bench of the Hon’ble Supreme Court of India in the case of Gurupreet Singh v. Union of India (2 supra) clarified that such interest on solatium can be claimed only in pending executions and not in closed executions and execution court will be entitled to permit its recovery from the date of the judgment in Sunder v. Union of India (1 supra) (19.01.2001) and not for any prior period. 14. The Hon’ble Supreme Court of India framed the following questions for consideration in the case of Gurpreet Singh v Union of India (2 supra). “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) making that rule inapplicable or not wholly applicable? These are the questions that arise for consideration in these petitions for special leave to appeal.” The Honourable Supreme Court of India answered the said questions in Paragraph No.52 of the judgment as follows:- “What is to happen when a part of the amount awarded by the Reference Court or by the appellate court is deposited pursuant to an interim order of the appellate court or of the further appellate court and the awardee is given the liberty to withdraw that amount? In such a case, the amount would be received by the decree-holder on the strength of the interim order and the appropriation will be subject to the decision in the appeal or the further appeal and the direction, if any, contained therein. In such a case, if the appeal is disposed of in his favour, the decree- holder would be entitled to appropriate the amount already received by him pursuant to the interim order first towards interest then towards costs and the balance towards principal as on the date of the withdrawal of the amount and claim interest on the balance amount of enhanced compensation by levying execution. But on the part appropriated towards the principal, the interest would cease from the date on which the amount is received by the awardee. Of course, if while passing the interim order, the court has indicated as to how the deposited amount is to be appropriated, that direction will prevail and the appropriation could only be done on the basis of that direction.” 15. While answering the method and manner of the payment of interest on the compensation amount, the Honourable Supreme Court of India also considered the entitlement of the claimant to claim interest on solatium in execution though it was not specifically granted by a decree. If the Reference Court or the Appellate Court negatived to grant interest on solatium, execution court will have to necessarily reject the claim for interest on solatium on the ground that the Execution Court cannot go beyond 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 the claimant had not been made 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 v. Union of India (1 supra) and say that the compensation awarded includes solatium and in such an event interest on the amount could be directed to be deposited in execution, otherwise not. The Apex Court further clarified that such interest on solatium can be claimed only in pending executions and not in closed executions and the Execution Court would be entitled to permit its recovery from the date of judgment in Sunder v. Union of India (1 supra) (19.09.2001) and not for any prior period. 16. We are of the opinion that the said judgment of the Hon’ble Supreme Court of India is not relevant to reject the claim of the claimants in relation to additional market value, solatium and interest on the compensation amount, as the payment of compensation pursuant to the acquisition of land is pending on the file of the Reference Court, and aggrieved by the order of the Reference Court, this appeal is filed. 17. The learned counsel appearing for the appellants/claimants submits that the Hon’ble Supreme Court of India in the case of R.P.Singh v Union of India (3 supra) wherein the land was acquired pursuant to the notification issued under Sec.4(1) of the Act published in 1961 and 1963, the claimants were awarded solatium @ 30% on the entire compensation amount and interest for a period of one year @ 9% from the date of taking possession and thereafter @15% till the payment is made. The Hon’ble Supreme Court of India held that the claimants are entitled to solatium @30% on the entire amount of compensation along with statutory interest payable after the amendment of the Act. Thus, it is stated that the aforesaid judgment is applicable to the facts of the present case. 18. The learned counsel for the appellants/claimants further relied on another judgment of a Division Bench of the Hon’ble Supreme Court of India in the case of State of Punjab v. Harchal Singh (dead) through LRs[6] wherein the land acquired pursuant to the notification under Sec.4(1) of the Act is on 04.02.1981 and award passed on 22.12.1983, the Hon’ble Supreme Court made it clear that the claimants are entitled to all other statutory benefits under the amended provisions of the Act, as contemplated under Secs.23(1-A), 23(2) and 28 of the Act. In fact, the same view was taken by the Full Bench of this Court in the case of Spl.Dy.Collector vs. venkata Seshamma[7] holding that the amendment Act 68/1984 is applicable to all pending cases before the authorities and Courts irrespective of the fact when the Sec.4(1) notification was published or when the award was passed. In the recent judgment of the Hon’ble Supreme Court of India in the case of Sagunthala (Dead) through LRs v. Special Tahsildar (L.A) (4 supra) where the notification was issued prior to the amendment Act, the Hon’ble Supreme Court of India held that the claimant therein is entitled for solatium, interest and other benefits under the statute. 19. In view of the ratio laid down by the Hon’ble Supreme Court of India in the above referred judgments, we are of the opinion that the appellants/claimants are entitled for the benefits under the amended provisions of Sec.23(1-A), 23(2) as well as Sec.28 of the Act. Accordingly, the appellants/claimants are entitled to additional market value @15% and solatium @30% on the enhanced compensation amount of Rs.21,000/- per acre, and interest @9% p.a. from the date of taking possession for a period of one year in respect of the unpaid amount, and if the amount is not paid within one year, the claimants would also be entitled to interest @15% p.a. after expiry of one year till the date of payment, as per the amended provisions of the Act. We are not inclined to interfere with the quantum of compensation as awarded by the Reference Court. 20. The Appeal is accordingly allowed in part, to the extent as indicated above. No order as to costs. ____________________ V.ESWARAIAH,J ________________ NOUSHAD ALI,J Dated: 30.08.2010 Dsr [1] 2001(5) ALT 51 (SC) [2] (2006) 8 SCC 457 [3] 2005(6) SCJ 658 [4] 2010(3) ALD (SC) [5] AIR 1980 P&H 117 [6] 2006(5) ALT 24 (SC) [7] 1987(1) ALT 137