Telangana High Court

The Special Deputy Collector vs Srinivas Reddy on 25 April, 2025

Author: Abhinand Kumar Shavili

Bench: Abhinand Kumar Shavili

      HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI
                          AND
       HON'BLE SMT. JUSTICE TIRUMALA DEVI EADA

                      L.A.A.S.No.703 of 2007

JUDGMENT:

(per Hon'ble Smt. Justice Tirumala Devi Eada)

This appeal, under Section 54 of the Land Acquisition Act,

1894, (for short 'the Act') is preferred by the Special Deputy

Collector, L.A.Cum Loc Unit, SRSP, Pochampad, aggrieved by the

order and decree dated 22.08.2006 passed in O.P.No.421 of 2002

by the learned District Judge at Nizamabad (hereinafter referred

to as 'the reference Court').

2. For convenience and clarity, the parties herein are referred

to as they were arrayed before the reference Court.

3. The facts of the case in brief are that the Government has

acquired house sites, structures etc., in Ummeda Village of

Nandipet Mandal, Nizamabad District for Pochampad Project. A

draft notification under Section 4(1) of the Act was published in

A.P.Gazette on 27.10.1977. The Land Acquisition Officer has

passed the award on 23.03.1978.

4. The case of the claimants is that they are residents of

Ummeda village of Nandipet Mandal and the house sites,

structures, drinking water wells etc., situated in Ummeda village AKS,J & ETD,J LAAS No.703_2007

were acquired by the Land Acquisition Officer and that

dissatisfied with the meager amount of compensation, some

people from their village filed protest application under Section 18

of Act and the matter was referred to the Court of Additional

District Judge, Nzamabad in O.P.No.212 of 1990 and that after

due enquiry, the Additional District Judge, Nizamabad has

enhanced the compensation and also has awarded solatium and

interest on the enhanced amount vide judgment and decree dated

30.09.1994. Aggrieved by the said award, the Land Acquisition

Officer has preferred an appeal in A.S.No.1902 of 1995 which was

dismissed by the High Court on 26.12.1997.

5. The claimants in the present case who have not availed to

file protest application under Section 18 of the Act have

approached the Land Acquisition Officer under Section 28-A and

requested him to re-determine the compensation for their

acquired properties, in terms of the above said order of the

Additional District Judge, Nizamabad. Finally, the Land

Acquisition Officer has passed an award No.41/98-99 dated

18.01.1999 withholding the payment of interest on solatium,

which is illegal and contrary to law and that the Land Acquisition

Officer has arbitrarily calculated the interest on the enhanced

compensation only up to 28.09.1998 though he passed the award AKS,J & ETD,J LAAS No.703_2007

on 18.01.1999 and that the cheques were honoured by the bank

on 16.03.1999 and thus, the Land Acquisition Officer ought to

have calculated the interest up to 16.03.1999. Thus, their

application was referred to the District Judge, Nizamabad.

6. The reference Court has framed the following issues for

adjudication:

"1. Whether the claimants are entitled for payment of interest on solatium?

2. Whether the claimants are entitled for payment of interest both on market value and solatium from 23.03.1978 to 22.03.1979 for one year at the rate of 9% and from 23.03.1979 to 16.03.1999 at the rate of 15% per annum but not upto 28.09.1998 as contended by the Land Acquisition Officer?

3. Whether the claimants are entitled to payment of equitable interest at the rate of 18% on the accumulated interest in order to set off the loss and compensate on the ground of equity and justice from 17.3.1999 to till date?"

7. At the time of trial, PW1 was examined and Exs.A1 and A2

were marked on behalf of the claimants and on behalf of the

respondents, RW1 was examined and Ex.B1 was marked.

8. Based on the evidence on record, the reference Court has

ordered to pay the interest on solatium as per the orders in

O.P.No.212 of 1990 and also directed to calculate and pay the

interest on the market value and solatium up to 16.03.1999, the

date on which the cheques were honoured by the S.B.H @15% per AKS,J & ETD,J LAAS No.703_2007

annum as per the L.A.Act and further directed to pay interest

@12% per annum on the accumulated interest by way of equitable

interest from 17.03.1999 till the payment. Aggrieved by the said

award, the appeal is preferred by the Special Deputy Collector,

L.A.Cum Loc Unit, SRSP, Pochampad.

9. Heard the submissions of learned Government Pleader for

the appellant and Sri S.Niranjan Reddy, learned counsel for the

respondents.

10. The learned Government Pleader has submitted that the

order and decree of the reference Court is contrary to law and

weight of evidence and further argued that the reference Court

has made an error in awarding equitable interest from 17.03.1999

till the date of payment @12% per annum. He further argued that

the reference Court failed to take notice of the principles laid

down by the Hon'ble Supreme Court saying that equitable interest

cannot be granted in such cases and that granting interest on

interest is against any legal principle. He therefore, prayed to set

aside the orders passed by the reference Court.

11. The learned respondents counsel, on the other hand, has

submitted that the claimants have suffered a lot due to the delay

made in payments and that they suffered loss for none of their AKS,J & ETD,J LAAS No.703_2007

wrongs and that they are very much entitled to the interest as

awarded by the reference Court.

12. Based on the above rival contentions, this Court frames the

following points for consideration:

1. Whether the claimants are entitled to interest @12% per annum on the accumulated interest from 17.03.1999 till the date of payment?

2. Whether the order and decree of the reference Court need any interference?

3. To what relief?

13. POINT NO.1:

a) The grievance of the appellant in the present case is that

the reference Court has granted interest @12% on the

accumulated interest from 17.03.1999 till the date of payment.

b) The case of the claimants is that they suffered a lot due to

the delayed payment made to them and that the Land Acquisition

Officer has calculated interest for one year @9% from 23.03.1978

to 22.03.1979 and 15% from 23.03.1979 to 28.09.1998 on the

enhanced amount excluding solatium. Thus, the claimants were

aggrieved by the Land Acquisition Officer Award for not awarding

interest on solatium.

AKS,J & ETD,J LAAS No.703_2007

c) It is pertinent to take note of the fact that in O.P.No.212 of

1990 filed under Section 18 of the Act arising out of the same

acquisition, the reference Court has enhanced the compensation

and has awarded interest on the enhanced amount and solatium.

d) The present case arises out of the other claimants who

sought redetermination of compensation under Section 28A of the

Act, thus, the reference Court ought to have taken into

consideration the award passed in O.P.No.212 of 1990 and should

have passed the award in similar lines wherein the decree has

provided for payment of interest on the enhanced amount and

solatium. But it nowhere specified to grant interest on interest.

e) The reference Court has referred to Sunder v. Union of

India 1, wherein it was held that solatium forms part of

compensation payable to the land owners, hence, interest is

payable on the amount of solatium also. If the reference Court

has awarded interest on solatium, that could have been sufficient.

f) But in the present case, the reference Court has also

awarded interest on accumulated interest. Admittedly, there is a

delay in payment of compensation, when the acquisition has

2001 (2) LACC 341 AKS,J & ETD,J LAAS No.703_2007

taken place in the year 1977, the present reference was made in

the year 2002.

g) The reference Court has observed that if a pleading and

averment is not denied by the opposite party, it can be taken as

an admission and further held that the categorical admissions of

RW1 with regard to the delay in making payment show that there

is inaction on part of the Land Acquisition Officer and thus, went

ahead in awarding the interest on accumulated interest.

h) The relevant provisions under Section 28 and 28A of the Act

are extracted hereunder for the sake of reference:

"28. Collector may be directed to pay interest on excess compensation. - If the sum, which the Collector did award as compensation, the award of the Court may direct that the collector shall pay interest on such excess at the rate of [nine per centum] per annum from the date on which he took possession 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 or 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 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.

28A. Re-determination of the amount of compensation on the basis of the award of the Court. - (1) where in an award under this part, the court allows to the applicant any amount of compensation in excess of the amount awarded by the collector under section 11, the persons interested in all the other land covered by the same notification under section 4, sub- section (1) and who are also aggrieved by the award of the Collector may, notwithstanding that they had not made an application to the Collector under section 18, by written application to the Collector within three months from the date of the award of the Court require that the amount of compensation payable to them may be re-determined on the basis of the amount of compensation awarded by the court:

Provided that in computing the period of three months within which an application to the Collector shall be made under this sub-section, the day on which the award was pronounced and the time requisite for obtaining a copy of the award shall be excluded.

AKS,J & ETD,J LAAS No.703_2007

(2) The Collector shall, on receipt of an application under sub-section (1), conduct an inquiry after giving notice to all the persons interested and giving them a reasonable opportunity of being heard, and make an award determining the amount of compensation payable to the applicants.

(3) Any person who has not accepted the award under sub-section (2) may, by written application to the Collector, required that the matter be referred by the Collector for the determination of the Court and the provisions of sections 18 to 28 shall, so far as may be, apply to such reference as they apply to a reference under section 18."

i) It is nowhere mentioned in the Act that interest shall be

again calculated on the accumulated interest to workout equitable

interest. Just because RW1 has not denied the plea of the

claimants, it does not mean to say that the reference Court should

take it as an admission by the Land Acquisition Officer to grant

interest on interest. Thus, granting of interest @ 12% per annum

on the accumulated interest awarded by the reference Court is not

tenable in the eye of law. Hence, it is opined that the order of the

reference Court to the extent of granting interest @ 12% per

annum on the accumulated interest from 17.03.1999 till the date

of payment, is liable to be set aside, while confirming the

remaining part of the award. Point No.1 is answered accordingly.

14. POINT NO.2:

In view of the reasoned finding arrived at Point No.1, it is

held that the order and decree of the reference Court needs to be

modified only with regard to the payment of interest on interest.

AKS,J & ETD,J LAAS No.703_2007

15. POINT NO.3:

In the result, the appeal is partly allowed setting aside the

order and decree dated 22.08.2006 passed in O.P.No.421 of 2002

by the learned District Judge at Nizamabad to the extent of

granting interest @ 12% per annum on the accumulated interest

from 17.03.1999 till the date of payment, while confirming the

remaining part of the award. No costs.