Union Of India vs Virendra Mahto And Anr
2025 Latest Caselaw 7103 Jhar

Jharkhand High Court

Union Of India vs Virendra Mahto And Anr on 21 November, 2025

Author: Anubha Rawat Choudhary

Bench: Anubha Rawat Choudhary

 IN THE HIGH COURT OF JHARKHAND AT RANCHI

                    F.A. No. 367 of 2018

Union of India                             ...     ...    Appellant
                          Versus
Virendra Mahto and Anr.             ...        ...       Respondents

                          With

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CORAM :HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

---

For the Appellant-UOI : Mr. Prashant Pallav, ASGI : Mr. Abhijeet Kumar Singh, CGC : Mr. Parth Jalan, Advocate [in F.A. No. 367 of 2018]

For Appellants(claimants): Mr. S. K. Tripathi, Senior Advocate : Mr. Mitul Kumar, Advocate : Mr. Anand, Advocate : Mr. B.N. Dey, Advocate : Mr. S. K. Dey, Advocate : Mr. Rishabh Srivastava, Advocate : Mr. B. R. Rochan, Advocate [in F.A. No. 192 of 2014 and analogous cases except F.A. No. 367 of 2018]

For the State : Mr. Om Prakash Tiwari, GP-III : Mr. Krishna Kr. Bhatt, AC to SC-I : Mr. Suresh Kumar, SC (L&C)II [FA No.468/2018 & FA No.484/2018]

For the Respondents : Mr. S. K. Tripathi, Senior Advocate : Mr. Mitul Kumar, Advocate : Mr. Anand, Advocate : Mr. B.N. Dey, Advocate : Mr. S. K. Dey, Advocate : Mr. Rishabh Srivastava, Advocate : Mr. B. R. Rochan, Advocate [in F.A. No. 367 of 2018]

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28/21.11.2025

1. The learned counsel for the appellant-Union of India, while referring to the background in which the learned Arbitrator was appointed, submitted that the subject matter of the instant appeal was requisitioned by the Defence of India way back in 1941-42 and that while the Defence of India was in possession of the property, the land was acquired in the year 1971-72.

2. Arising out of acquisition of land, compensation was determined and 80% of the land loosers were paid the compensation by the year 1975, but they accepted it without registering any protest.

3. He has further submitted that the land loosers who were aggrieved by the compensation, approached the Hon'ble Patna High Court by filing writ petitions being CWJC No.1590 of 1991, 2257 of 1991 and 2252 of 1991 and that the State of Bihar appointed an Arbitrator vide Notification dated 18.12.1992 to adjudicate the claim of those persons only who had approached the Hon'ble High

Court in the aforesaid batch of writ petitions. He has further submitted that the aforesaid notification was modified vide notification dated 05.06.1993 wherein all the landloosers, irrespective of those who have approached the High Court or not, could get their claim of compensation adjudicated. The said Notification dated 05.06.1993 was challenged before the Hon'ble Patna High Court by the Union of India in CWJC No.8131 of 1993, and during the pendency of the writ petition, the Notification dated 05.06.1993, encompassing all the landloosers, was cancelled. Subsequently, another Notification dated 18.11.1993 was issued, restricting the arbitration only with respect to those who had initially approached the Hon'ble High Court.

4. The said notification dated 18.11.1993 was challenged in writ petition being CWJC No.2273 of 1994, wherein the landloosers sought to challenge the notification on the basis of discrimination. The said writ petition was dismissed by this Court by order dated 10.01.2008. The order passed in CWJC No.2273 of 1994 was challenged before the Hon'ble Supreme Court in Civil Appeal No.7152 of 2012. Thereafter, the Hon'ble Supreme Court was pleased to direct appointment of Arbitrator and the Hon'ble Supreme Court have clearly observed that they have not expressed any view on the merit or demerit of the case. Consequent to the judgement passed by the Hon'ble Supreme Court, a fresh Notification dated 23.02.2013 was issued with respect to all the landloosers appointing the learned Arbitrator, whose award is under challenge before this Court.

5. The learned counsel appearing on behalf of the claimants has submitted that the sequence of events have not been correctly and completely mentioned by the learned counsel for the Union of India.

6. The learned counsel for the claimants submits that pursuant to order passed in CWJC No.1590 of 1991/2257 of 1991 / 2252 of 1991, a retired judge was appointed as an Arbitrator for the writ petitioners in those cases on 18.12.1982. However, the District

Land Acquisition Officer, Ranchi vide letter dated 03.03.1993 had requested the State Government to appoint an Arbitrator for all the landloosers with respect to the property involved in the present case. He has submitted that this was followed by issuance of a Notification dated 05.06.1993 by the Government of Bihar wherein the all the landloosers were covered for the purposes of arbitration.

7. However, the Union of India challenged the said notification dated 05.06.1993 in CWJC No.8131 of 1993 and in the said writ petition, a stay order was granted by the High Court and during the pendency of the writ petition being CWJC No.8131 of 1993, the District Land Acquisition Officer again wrote a letter stating that the inclusion of name of 753 persons for the purposes of arbitration was against the provision of law. Consequently, another notification dated 18.11.1993 was issued whereby the notification dated 05.06.1993 enlarging the scope of arbitration for all the landloosers was cancelled.

8. This was followed by another writ petition being CWJC No.2273 of 1994 in which 20 persons in representative capacity, representing all the landloosers, challenged the order of withdrawal dated 18.11.1993. The said writ petition was dismissed vide order dated 10.01.2008. Against the order passed in CWJC No.2273 of 1994, SLP No.20729 of 2008 was filed before the Hon'ble Supreme Court wherein the leave was granted and it was converted into Civil Appeal No.7152 of 2012. The said SLP was decided vide judgement dated 25.09.2012 and the order of the High Court refusing to extend the benefit of arbitration to all the landloosers was set aside.

9. The learned counsel has submitted that the order of the High Court did not survive for any purpose whatsoever as the judgement had merged with the judgement passed by the Hon'ble Supreme Court. He has also submitted that the order of the High Court cannot be looked into for any purpose whatsoever including the reasons of dismissal of the writ petition by the High Court.

10. The learned counsel for the claimants has submitted that once the terms of reference was made, the learned Arbitrator had no option but the decide the fair compensation, which was payable to the claimants.

11. He has further submitted that in absence of the agreement in Form - K as contemplated under the Act and the Rule indicating due acceptance of the compensation without any protest and without any further claim, merely because the claimants have received the compensation amount, the same cannot lead to a conclusion that the entire process with respect to the payment of compensation was complete.

12. The learned counsel has also submitted that the authorities were also under an obligation to take out certain processes and inform the Union of India with regard to completion of the payment of compensation so that appropriate steps could be taken, but in the present case, no such completion process has been placed on record. He has submitted that in absence of the agreement, it cannot be said that the claimants had agreed to accept the compensation amount as offered to them.

13. The learned counsel has also submitted that there is no provision under the Act and the Rules by which the claimants could invoke for arbitration. The arbitrator is required to be suo moto appointed by the Union of India, once the agreement is not reached. He has submitted that under such circumstances, the claimants have no option but the move the High Court under writ jurisdiction for appointment of arbitrator. He has also submitted that since no agreement was available on record in Form - K, the State Government had rightly issued the notification for the purposes of adjudication of claim of all the land loosers.

14. The learned counsel for the claimants has submitted that once the process of payment of compensation was not complete, the judgement passed by Hon'ble Supreme Court in the case of Union of India and Others Vs. Munsha and Ors. reported in 1995 Supp. (4) SCC 660 was not applicable. Consequently, the subsequent

judgement following this judgement passed in the case of Union of India Vs. Satyawati and Ors. reported in (1996) 7 SCC 740 was also not applicable. The learned counsel has submitted that the judgement of Dayal Singh and others Vs. Union of India and Ors. reported in (2003) 2 SCC 593 is not applicable inasmuch as in the said case, the parties had entered into the agreement in the required form and there was a concluded contract between the parties.

15. Learned counsel for the claimants has referred to the judgment passed by the Hon'ble Supreme Court reported in (2010) 3 SCC 673 (Union of India versus Seneth Munda and Others) and has submitted that the said judgment cannot be read in the manner to exclude interest on the component of interest which stood crystalized on the date of Award. He has submitted that the learned Arbitrator has rightly awarded the post award interest also, by including all the three components i.e. the awarded amount, the solatium and the interest component, and therefore, the post award interest would carry interest on all the three components after the cut-off date as stipulated by the learned Arbitrator.

16. The learned counsel has also submitted that the award passed by the learned Arbitrator is essentially a money decree which has to be paid within the stipulated time and the interest component till the date of the Award partakes the character of principle amount, and therefore, the post award interest will run on all the three components i.e. the award, solatium and interest component accrued till the date of the award as the claimants were entitled for payment immediately after the award. Having not paid, the delayed payment interest at the rate of 15% with default clause was given by the learned Arbitrator and the same does not call for any interference by this Court.

17. He has placed the aforesaid judgment of Seneth Munda (supra) in full and has submitted that the arbitral award was passed with awarded amount and solatium and interest @ 9% per annum on the balance amount payable to the claimants with a default clause that if the amount is not paid, the rate of interest would be

12% per annum. He further submits that the High Court interfered with the award of the Arbitral tribunal only to the extent of reducing the post awarded interest from 12% to 9% with a default clause that if the amount is not paid within three months, then the post award interest would carry interest @ 12% per annum. The High Court has also extended the period for payment but the same was not honoured by the Union of India and in the contempt proceeding there was a direction to pay interest @ 12% from 22.06.2003 ( appears to be the date of award) till 25.11.2006 (appears to be the date of payment) and the quantified amount on which the interest was to be paid @ 12% from 22.06.2003 to 25.11.2006 to a sum of Rs. 1,37,98,860.08. The claimants before the Hon'ble Supreme Court had contended that 12% interest was payable on the awarded amount, solatium and also the amount of interest. However, the Hon'ble Supreme Court ultimately held that payment of 12 % interest on the entire aforesaid amount from 22.06.2003 to 25.11.2006 would tantamount to payment of interest on interest which was not permissible under the Act and consequently the order of the High Court in the contempt jurisdiction was set aside.

18. It is not in dispute that the property involved in this case is relating to ward no. 4 falling in Ranchi Municipal Area. Exhibit-4 relates to ward nos. 5 and 6-Doranda and Exhibit 12 relates to ward no. 3.

19. Written arguments have been filed by both the parties which have been fully placed during the course of hearing.

20. Arguments concluded.

21. Post these cases for dictation of judgement in open Court on 24.11.2025 at 2.15 pm.

(Anubha Rawat Choudhary, J.) 21.11.2025 Saurav/Binit/Mukul