TAMIL NADU HOUSING BOARD versus ABDUL SALAM SARKAR (DEAD) AND OTHERS
[2021] 1 S.C.R. 662, Supreme Court of India, 2021
Outcome: Disposed off
Segment: Facts
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TAMIL NADU HOUSING BOARD
v.
ABDUL SALAM SARKAR (DEAD) AND OTHERS
(Civil Appeal No 94 of 2021)
JANUARY 13, 2021
[DR DHANANJAYA Y CHANDRACHUD AND
SANJIV KHANNA, JJ.]
Land Acquisition Act, 1894 – Acquisition of land – Interest
on solatium – Entitlement to – Interpretation of Constitution Bench
judgment in Gurpreet Singh case – Direction of High Court to the
effect that claimants-respondents would be entitled to move an
application for interest on solatium in view of the judgment in
Gurpeet Singh Case– Held: Justified – On facts, claim for interest
on solatium had not been rejected by the reference court – High
Court had held that the issue as to whether interest on solatium
would be granted would depend on the outcome of the proceedings
pending before Supreme Court in Gurpreet Singh case – Liberty was
thus granted by the High Court to institute proceedings before the
Sub Court after the matter was resolved in Gurpreet Singh case –
Gurpreet Singh case mandates a test that interest on solatium would
be payable if the reference court has either not referred to it or has
not rejected it expressly or by necessary implication, and the claim
can only be made in pending execution proceedings. – Hence, on
facts, inter parties, respondents entitled to apply for grant of interest
on solatium, though the earlier execution petition was closed  since
their claim had not been rejected at any antecedent stage
and had
been kept open – Reference court to verify the computations and to
pass appropriate orders – In terms of the judgment in Gurpreet Singh
case, interest on solatium payable w.e.f date of judgment in Sunder
vs Union of India (19 September 2001).
Disposing the appeal, the Court
HELD:1.1. Gurpreet Singh case mandates a test that
interest on solatium would be payable if the reference court has
either not referred to it or has not rejected it expressly or by
necessary implication. Moreover the claim can only be made in
pending execution proceedings [Para 8][666-B-C]
1.2. In the present case, the claim for interest on solatium
had not been rejected by the reference court. In appeal arising
from decision of reference court, the High Court observed that
since the matter was pending before a larger bench of the Supreme
Court in Gurpreet Singh case, the issue as to whether interest on
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solatium would be granted would depend on the outcome of those
proceedings and it would be open to the claimants to move an
application before the Sub Court. The liberty which was granted
by the High Court to institute proceedings before the Sub Court
after the matter was resolved by Supreme Court in Gurpreet Singh
case was the subject matter of a Special Leave Petition. The
judgment of the High Court was affirmed by the dismissal of the
Special Leave Petition. The review petition by the Revenue
Divisional Officer was also dismissed. It was only after the
judgment of the Court in Gurpreet Singh, that the respondents
moved an application for the grant of interest on solatium. Hence,
inter parties, the claimants were entitled to apply for the grant of
interest on solatium, particularly having regard to the fact that
the claim had not been rejected at any antecedent stage and had
been kept open. As a matter of principle, no reason to take any
other view since it is in accord to the judgment in Gurpreet Singh
case.  [Para 8 & 9][666-B-F; 666-G-H; 667-A]
2.1 The submission of the appellant is that the claim was
made in 2008 after the earlier  execution petition was closed and
the original award and enhanced compensation were deposited
and appropriated by the claimant. The claim for interest on
solatium was not rejected and was expressly kept open by
the High Court in its judgment dated 12 July 2001. [Para 9]
[666-F-G]
2.2 The direction of the High Court to the
effect that the
claimants-respondents would be entitled to the payment of
interest on solatium is confirmed. Insofar as the exact
mathematical computation is concerned, it would be appropriate
to leave it to the reference court to verify the computations and
to pass appropriate orders. It is clarified that in terms of the
judgment of the Constitution Bench in Gurpreet Singh case,
interest on solatium will be payable with effect from the date of
the judgment in Sunder vs Union of India (19 September 2001).
[Para 10][667-B-D]
Gurpreet Singh v Union of India (2006) 8 SCC 457:
[2006] 7 Suppl.  SCR
422 – followed.
Sunder v Union of India (2001) 7 SCC 211: [2001] 3
Suppl.
SCR 176 –
referred to
Case Law Reference
[2006] 7 Suppl. SCR 422
followed
Para 2
[2001] 3 Suppl. SCR 176
referred to
Para 7
TAMIL NADU HOUSING BOARD v. ABDUL SALAM SARKAR
(DEAD)
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CIVIL APPELLATE JURISDICTION :  Civil Appeal No. 94 of
2021.
From the Judgment and Order dated 01.10.2018 of the High Court
of Judicature at Madras C.R.P. (NPD) No. 3909 of 2011.
C. Paramasivam, M. Yogesh Kanna, Raja Rajeshwaran S, Aditya
Chadha, Advs. for the appellant.
K. Karunakaran, S. Gowthaman, Advs. for the respondents.
The  Judgment of the Court was delivered by
DR. DHANANJAYA Y CHANDRACHUD, J.
1. Leave granted.
2. The only question which arises in the present appeal is whether
the respondents are entitled to interest on solatium for the acquisition
which took place under the provisions of the Land Acquisition Act 1894.
This issue turns on an interpretation of the judgment of the Constitution
Bench of this Court in Gurpreet Singh vs Union of India1 (“Gurpreet
Singh”).
3. By an order of this Court dated 1 December 2020, the issue
was crystallized by observing that the Court will “examine the question
whether (the) matter is covered by the judgment of this court in the case
of Gurpreet Singh”.
4. In the present case, the reference court by its decision dated
26 July 1990, allowed for the grant of interest on solatium at the rate of
12% per annum.
5. When the matter was carried in appeal, a Division Bench of
the Madras High Court by its judgment dated 12 July 2001, issued the
following clarification on the aspect of interest on solatium:
“It is further made clear that the claimants are not entitled to
interest on
solatium and additional amount. Further, the issue
regarding grant of interest on solatium is pending before the Larger
Bench of the Hon’ble Supreme Court. Hence, depending on the
outcome of the cross before the Supreme Court, the claimants
are permitted to fill an appropriate petition before the concerned
sub-court.”
1(2006) 8 SCC 457
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6. The Special Leave Petitions against the judgment of the Division
Bench were dismissed on 22 March 2004. The review petition filed by
the Revenue Divisional Officer was also dismissed on 2 August 2006. It
is in this background that we have to assess the tenability of the claim
for interest on solatium based on the decision of the Constitution Bench
in Gurpreet Singh (supra).
7. In paragraph 54 of the judgment in Gurpreet Singh (supra),
the above issue was considered specifically in the context of the earlier
decision in Sunder vs Union of India2. Dealing with the issue, Justice
P K Balasubramanyan speaking for the Constitution Bench observed
thus:
“54….….That question is whether in the light of the decision in
Sunder (2001) 7 SCC 211 : 2001 Supp (3) SCR 176], the awardee/
decree-holder 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 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 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 [(2001) 7 SCC 211 : 2001 Supp
(3) SCR 176] on the ground that the execution court cannot
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
appellate court, and merely interest on compensation is
awarded, then it would be open to the execution court to
apply the ratio of Sunder [(2001) 7 SCC 211 : 2001 Supp (3)
SCR 176] 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.
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
2 (2001) 7 SCC 211
TAMIL NADU HOUSING BOARD v. ABDUL SALAM SARKAR
(DEAD) [DR. JUSTICE DHANANJAYA Y CHANDRACHUD]
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recovery from the date of the judgment in Sunder [(2001) 7
SCC 211 : 2001 Supp (3) SCR 176] (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 of our
power under Articles 141 and 142 of the Constitution of India
with a view to avoid multiplicity of litigation on this
question.”(emphasis supplied)
8. The test which Gurpreet Singh (supra) mandates is that
interest on solatium would be payable if the reference court has either
not referred to it or has not rejected it expressly or by necessary
implication. Moreover, the claim can only be made in pending execution
proceedings. In the present case, the claim for interest on solatium had
not been rejected by the reference court. In an appeal arising from the
decision of the reference court, the High Court, In its judgment dated 12
July 2001, observed that since the matter was pending before a larger
bench of this Court, the issue as to whether interest on solatium would
be granted would depend on the outcome of those proceedings and it
would be open to the claimants to move an application before the Sub
Court. It was after the judgment of this Court in Gurpreet Singh (supra),
which was delivered on 19 October 2006, that the respondents moved
an application for the grant of interest on solatium. The High Court by
its
impugned judgment has come to the conclusion that such an application
was tenable in view of the judgment in Gurpreet Singh (supra). As a
matter of principle, we see no reason to take any other view since it is in
accord to the judgment of the Constitution Bench.
9. The submission which has been urged on behalf of the appellant
is that in the present case, the claim was made in 2008 after the earlier
execution petition was closed and the original award and the enhanced
compensation were deposited and appropriated by the claimant. This, in
our view, would not dis-entitle the claimant for the grant of interest on
solatium. The claim for interest on solatium was not rejected and was
expressly kept open by the High Court in its judgment dated 12 July
2001. The liberty which was granted by the High Court to institute
proceedings before the Sub Court after the matter was resolved by the
larger bench of this Court was the subject matter of a Special Leave
Petition. The judgment of the High Court was affirmed by the dismissal
of the Special Leave Petition. The review petition by the Revenue
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TAMIL NADU HOUSING BOARD v. ABDUL SALAM SARKAR
(DEAD) [DR. JUSTICE DHANANJAYA Y CHANDRACHUD]
Bibhuti Bhushan Bose
Appeal disposed of.
Divisional Officer was also dismissed. Hence, inter partes, the claimants
were entitled to apply for the grant of interest on solatium, particularly
having regard to the fact that the claim had not been rejected at any
antecedent stage and had been kept open.
10. In the above view of the matter, we confirm the direction of
the High Court to the effect that the claimants-respondents would be
entitled to the payment of interest on solatium. However, insofar as the
exact mathematical computation is concerned, it would be appropriate
to leave it to the reference court to verify the computations and to pass
appropriate orders. Since during the pendency of these proceedings, a
deposit has been made by the appellant in terms of the interim orders,
the amount which has been deposited will be permitted to be withdrawn
by the respondents and shall be given due credit for in arriving at the
final amount which is due and payable. We also clarify that in terms of
the judgment of the Constitution Bench in Gurpreet Singh (supra),
interest on solatium will be payable with effect from the date of the
judgment in Sunder vs Union of India (19 September 2001).
11. The appeal is accordingly disposed of. The costs of Rs 5 lakhs
which have been deposited in this Court in pursuance of this Court’s
order, shall also be disbursed to the claimants.
12. Pending applications, if any, stand disposed of.