Holding

The interest under Sections 28 and 33 is deemed to be included in the lump‑sum compensation fixed on 7 December 1999; the respondent may claim interest only on that quantified amount from that date until payment.

Summary

The appellant, Chairman, Neyveli Lignite Corp., acquired land under the Land Acquisition Act, 1894 and paid compensation to the respondent, C. Govinda Pada Yachi, as determined by the Collector and later enhanced by a reference court. The High Court directed the appellant to deposit the enhanced amount, allowing the respondent to withdraw 50% without security, while the balance remained in a bank deposit. The Supreme Court, on 7 December 1999, fixed lump‑sum compensation rates inclusive of solatium and interest, thereby crystallising the award. The respondent later claimed interest on the excess amount deposited, invoking Sections 28 and 33 of the Act, and the High Court ordered a partial refund and payment of the balance with interest. The Supreme Court held that the interest contemplated under Sections 28 and 33 was already incorporated in the lump‑sum award and that interest could be claimed only on the quantified amount from 7 December 1999 until actual payment. Consequently, the appeal was allowed, the High Court order set aside, and the respondent was awarded the balance of Rs.21,562.74 plus interest at 15% from the said date.

Issues considered

Whether Sections 28 and 33 of the Land Acquisition Act, 1894 entitle the landowner to interest on the excess amount deposited beyond the lump‑sum compensation awarded.
Whether the interest on solatium and compensation was already included in the Supreme Court's 7 December 1999 lump‑sum award.
Whether the respondent is entitled to interest on the deposited amount from the date of possession or only from the date of the Supreme Court's award.

Legislation cited

Land Acquisition Act, 1894s. 28, s. 33, s. 34

Subjects

Land acquisitionCompensationSolatiumInterestSection 28Section 33Lump sum awardSupreme CourtAppeal

Judgment

CHAIRMAN, NEYVELI LIGNITE CORPN. LTD. A
v.
C. GOVINDA PADA YACHI AND ANR.

APRIL 3, 2006

[B.P. SINGH AND AL TAMAS KABIR, JJ.] B

Land Acquisition Act, 1894-Sections 28 and 33-Acquisition of Land-
Compensation-On litigation quantification of compensation by Supreme
Court-Quantified amount was lump sum inclusive of solatium and interest- C
Landlord's claim, of interest on the excess amount awarded by Supreme court,
from the date the possession of land was taken-Held: The claim of the
landowner not permissible-The claim of interest was included in the lump
sum amount determined by Supreme Court-Interest could be claimed on the
quantified amount only after the date of judgment of Supreme Court till the
date of payment. D
Certain lands were acquired under Land Acquisition Act, 1894.
Dissatisfied with the award of the Collector, respondent No. I filed reference
petition, whereby quantum of compensation was increased. In appeal
thereagainst, High Court had directed the appellant to deposit the enhanced
compensation awarded by the Reference Court with stipulation that 50% of E
such amount could be withdrawn by the landowner without security and the
remaining balance, upon furnishing the security. Respondent No. 1 withdrew
50% of the deposit without security.

In the meantime in similar matters High Court reduced the rate of F
compensation. In appeal thereagainst by respondent No. 1, this court, by its
order dated 7.12.1999 modifying the order of High Court, determined the
rates of compensation which were inclusive of solatium and interest and were
lump sum payments. It also directed to refund the balance 50% of the amount
lying with the Bank, to the appellant.
G
Appellant filed an application before Court of Sub-Judge in terms of
order of this Court claiming payment of Rs. 83,985.26. Respondent No. 1 also
filed an application claiming the balance of the lump sum amount together
with the entire amount of inter~st earned on the deposit. Court directed the
parties to file revised memo of calculation on the basis of orders passed by
701 H
702 SUPREME COURT REPORTS [2006] 3 S.C.R.

A this Court. Respondent No. I filed Revision Petition thereagainst. High Court
directed refund of Rs. 5,224/- only to the appellant against its claim and
directed payment of lump sum amount together with the entire amount of
interest on the deposit. Hence the present appeal.

Allowing the appeal, the Court
B
HELD: I. It cannot be said that in view of Sections 28 and 33 of Land
Acquisition Act, 1894 in addition to compensation as quantified by this Court
earlier, respondent No. 1 was also entitled to interest on the excess amount
as awarded by this Court from the date on which the possession of the lands
C was taken till the payment of such excess amount into court. By order dated
7th December, 1999, this Court while fixing a lump sum amount as
compensation, took into consideration not only the value of the land acquired
but solatium and interest as well. The interest that could have been claimed
under Sections 28 and 33 of the Act were, in fact, included in the lump sum
amount till 7th December, 1999, and interest can be claimed by respondent
D No. 1 on the quantified amount only after 7th December, 1999 till the date of
payment. 1707-8-C; 707-E-FI

2. High Court misconstrued its earlier order directing the appellant to
deposit the enhanced compensation awarded by the Reference Court and
permitting the land owners to withdraw 50 per cent of such amount without
E security and the remaining 50 per cent upon furnishing of security. High Court
appears to have missed sight of the fact that when the direction was given in
earlier order to the appellant herein to deposit the enhanced amount of
compensation, the award was yet to be finalized and that the award was
ultimately finalized on 7th December, 1999 by this court and that respondent
F No. 1 would, therefore, be entitled to compensation in terms of the amount
as quantified on 7th December, 1999. In the light of the order passed by this
Court on 7th December 1999, quantifying the compensation amount to include
solatium and interest, the provisions of Sections 28 and 33 of the Act would
no long<!r be attracted. [707-G-H; 708-A-B)

G Sunder v. Union of India, (2001) 7 sec 211, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1876 of2006.

From the Judgment and Order dated 27. l 0.2004 of the High Court of
Madras in C.R. No. 1406/2004.
H
CHAIRMAN, NEYVELILIGNITECORPN. LTD.1•. C.GOVINDAPADAYACIIl[KABIR,J.] 703
V.R. Reddy, K.R. Sasiprabhu and M.K. Sreegosh for the Appellant. A
K.V. Viswanathan, B. Raghunath and Ms. V. Mohana for the
Respondent.

The Judgment of the Court was delivered by

ALTAMAS KABIR, J. Leave granted. B
Between 1975 and 1978, certain lands in the district of Cuddalore in
the State of Tamil Nadu were notified for acquisition under Section 4 (1) of
the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act' ) for the
purpose of expansion of the mines belonging to the appellant herein. In such
notification, 0.22 acres of house sites and 0.78 acres of manavary dry lands, C
belonging to the respondent No. I herein, were acquired. The Land Acquisition
Collector awarded compensation of Rs.4,370.61 to the respondent No. 1 at
the rate of Rs.6,250/- per acre for house sites and Rs. 3,200/- per acre in
respect of manavary dry lands, excluding solatium and interest.

Dissatisfied with the award of the Collector, the respondent No. 1 filed D
a reference petition, being L.A.O.P.No.27911982, before the Sub-Judge,
Cuddalore, on 20th August, 1984. The Reference Court by its award increased
the quantum of compensation to Rs.50,000/- per acre for house sites and Rs:
40,000 per acre for manavary dry lands, excluding solatium and interest.

Being aggrieved by the order passed on reference by the Sub-Judge,
E
Cuddalore, the Special Tahsildar (Land Acquisition), in his capacity as the
appropriate authority, filed an appeal before the High Court of Judicature at
Madras on 26th February, 1985, being A.S. No. 190/1985. By way of an
interim order, the High Court directed the appellant herein to deposit the
enhanced compensation awarded by the Reference Court with the stipulation F
that 50 per cent of such amount cou Id be withdrawn by the land owner
without security and the remaining balance could be withdrawn upon
furnishing security.

Pur~uant to the aforesaid direction of the High Court, the appellant
herein deposited a sum of Rs.53,573.30 in court on 8th April, 1985. The G
.respondent No. 1 withdrew 50 per cent of the deposit, i.e. Rs.26, 786.65, without
furnishing security, but did not withdraw the balance by furnishing security.
Accordingly, the balance 50 per cent of the deposited amount was directed
by the court to be kept in a bank in a short-tem1 fixed deposit In the meantime,
in a batch of similar matters, including A.S.No.19011985, the High Court H
704 SUPREME COURT REPORTS 12006) 3 S.C.R.

A reduced the rate of compensation for house sites from Rs.50,000 per acre to
Rs.20,000 per acre and for the manavary dry lands from Rs.40.000 per acre
to Rs. 15,000 per acre, excluding solatium and interest.

The respondent No. I and other land owners filed special leave petitions
in this Court against the judgment of the High Court, being Civil Appeal
B No.6977-7002/1999, wherein the following order was passed by this Court
on 7th December, 1999 :-

"After hearing learned counsel for the parties and with a view to
give quietus to this litigation in the present set of cases, it appears
appropriate to us, in order to do complete justice between the parties,
c to direct as follows:-

(I) That in modification of the orders of the High Court, the
compensation shall be payable to the land holders in these cases
at the following rates:-

[) Wetlands Rs. 94,000 per acre
Irrigated Dry land Rs. 82,000 per acre
Dry land Rs. 47,000 per acre
Cashew Thope Rs. 85,000 per acre
House Sites Rs. 73,000 per acre.
These amounts are inclusive of solatium and interest and are lump- ·->
E sum payments. The rates fixed by us above are confined to the
present set of cases.

(2). That no previously settled cases shall be re-opened on the basis
of the rates fixed by us as above.

F (3) In cases where the land holders have withdrawn from the bank
out of the 50 % deposit and are required to refund some amount on
the basis of the amounts as fixed by us above, the Corporation shall
recover that amount by 12 equal installments of one and a half
month each. Similarly, if any additional amount, under our above

-
directions, is to be paid to the landholders, it shall be done within
G three months from the date of this order.

(4) In the event, the amount of 50 % is still lying with the banks and
a refund is required to be made to the Corporation by the landholders,
that refund may be obtained out of the 50 % amount of bank deposit.

H With the aforesaid directions all the claims arising out of the 89
CHAIRMAN, NEYVELILIGNITECORPN. LID.1•. C.GOVINDA PADAYAC!fl [KABIR,!.] 705

appeal listed before us shall stand disposed of in full and final A
settlement."

As per the aforesaid order, the respondent No. I who had already received
a sum of Rs.4,370.61 under the order of the Collector and a further sum of
Rs.26,786.65 being 50 per cent of the deposit without furnishing security,
aggregating a sum of Rs.31,157.26, was entitled to receive a further a sum B
of Rs.21,562.74 towards full and final settlement of his claim.

In keeping with the aforesaid order of this Court, the appellant herein
arranged for the remittance to the court of a sum of Rs.1,05,548 representing
the amount of deposit lying with the bank, together with the interest earned
thereon. The appellant filed LA. No.8/2001 in L.A.O.P.No.279/1982, along C
with a memo of calculation, before the court of Sub-Judge, Cuddalore, claiming
payment of Rs.83,985.26 in terms of the orders of this Court dated 7th
December, 1999. The respondent No. I also filed an application, being
LA.No. I 04/2002, wherein he claimed the balance of the lump sum amount,
namely, 21,562.74 together with the entire amount of interest earned on the D
deposit, being Rs.80,000. According to the respondent No. I, the amount to
be refunded to the appellant herein was only Rs.5,223.91 and not Rs.83,985.26
as claimed by it. The said petition of the respondent No. I was taken up for
consideration by the Sub-Judge, Cuddalore, on 17th June, 2004 and a direction
was given to the parties to file revised memo of calculation on the basis of
the orders passed by this Court on 7th December, 1999. E
Aggrieved by the said or<ler, respondent No. I filed a Revision Petition,
being C.R.P.No. 1406/2004, against the order of the Sub-Judge, Cuddalore,
dated 17th June, 2004, before the High Court of Judicature at Madras under
Article 227 of the Constitution. The High Court by its order dated 27th
October, 2004, directed refund of a sum of Rs.5,224 only to the appellant as
F
against its claim of Rs.82,980.82 and also directed payment of Rs.1,00,324
to the respondent No. I.

This appeal is directed against the aforesaid judgment of the High
Court dated 27th October, 2004.
G
On behalf of the appellant it was urged by Mr. Reddy, learned senior
advocate, that the claim of the respondent No. I and the order passed there
upon by the High Court was not sustainable in view of the specific order
passed by this Court on 7th December, 1999, while disposing of the earlier
batch of appeals that the amounts as quantified in respect of the different H
706 Sl'PREME COURT REPORTS 12006] 3 S.C.R.

A categories of land were lump sum payments which included solatium and
interest. In other words, the amount of compensation payable, which included
solatium and interest, was quantified and crystallized by the order of 7th
December, 1999. The respondent No. I would, therefore, be entitled to the ,-
compensation as was quantified on that date as far as his lands were concerned
and in the event there was further delay in payment of the compensation
B amount, the said respondent could at best claim interest on the compensation
amount as quantified after 7th December, 1999.

It was submitted that the claim of the said respondent No. I for payment
of interest on the sum quantified by the order of this Court in terms of
C Section 28 of the Act was misconceived and the High Court had also
misconstrued the purport of the order passed by this Court on 7th December,
1999. Mr. Reddy submitted that the respondent No.I who was entitled to a
total compensation amount of Rs.53,573.30 and had already received a sum
of Rs.3I,157 .26 from the same, was entitled to receive the balance amount
of Rs. 21,562.74 and interest thereupon from the date of this Court's order
D dated 7th December, 1999 till the date of actual payment at the rate of
interest to be decided by this Court. It was submitted further that the amount
which was deposited by the appellant in court pursuant to the direction given
by the High Court did not represent the awarded ,um but security for the
same since the award had not attained finality. It was submitted that it was
E only on 7th December, 1999 that the awarded sum stood quantified by virtue
of the orders passed by this Court in the earlier batch of appeals and
accordingly the respondent No. I could have no claim to the amount as
deposited and his claim would have to be confined to the amount as quantified
by this Court which included not only the value of the lands acquired, but
solatium and interest as well.
F
The stand taken on behalf of the appellant was strongly opposed on
behalf of respondent No. I mainly on the ground that by virtue of the order
passed by the High Court, the respondent No. I was not only entitled to
receive 50 per cent of the amount deposited in court by the appellant without
furnishing security, but that the said respondent was also entitled to withdraw
G the balance 50 per cent upon furnishing security. It was contended that the
respondent No. I had acquired a right to the remaining 50 per cent of the
amount deposited by virtue of the said order of the High Court and that had
he withdrawn the said amount upon furnishing security in 1985, he could
-
have enjoyed the benefits of the said amount as had been done by various
H other similarly placed individuals.
CHAIRMAN, NEYVELI LIGNITECORPN. LTD.'" C. GOVINDA PADAYACHI [KABIR,_).] 707

It was submitted that it is well-settled that any amount which accrues A
to deposits made pursuant to the orders of the court are to be paid to the
persons entitled to such deposits.

Mr. Viswanathan, learned advocate, who appeared for the respondent
No. I, referred to Section 28 of the Act to bolster the claim of the respondent
No. I that in addition to the compensation as quantified by this Court earlier, B
the respondent No. I was also entitled to interest on the excess amount as
awarded by this Court from the date on which the possession of the lands was
taken till the payment of such excess amount into court. Reference was also
made to Section 33 of the said Act on account of the fact that the appellant
had been directed to deposit in court the amount determined as compensation C
by _the Reference Court which amount had been invested and had earned
interest while the matter was pending.

In this regard, reference was made to the Constitution Bench decision
of this Court in the case of Sunder v. Union of India, [2001] 7 SCC 211,
wherein on an interpretation of Sections 28 and 34 of the aforesaid Act, it D
was held that interest was also payable on solatium and that the amount of
the award in Section 34 means the aggregate amount of compensation
calculated in accordance with the provisions of all the Sub-sections of Section
23 which includes solatium.

Having considered the submissions made on behalf of the respective E
parties, we are unable to accept the submissions advanced on behalf of
respondent No. I on account of the fact that by order dated 7th December,
1999, this Court while fixing a lump sum amount as compensation, took into
consideration not only the value of the land acquired but solatium and interest
as well. The interest that could have been claimed under Sections 28 and 33
F
of the above Act were, in fact, included in the lump sum amount till 7th
December, 1999, and interest can be claimed by the respondent No.I on the
quantified amount only after 7th December, 1999 till the date of payment.

In our view, the High Court misconstrued its earlier order in A.S.N.190/
1985 directing the appellant to deposit the enhanced compensation awarded G
by the Reference Court and permitting the land owners to withdraw 50 per
cent of such amount without security and the remaining 50 per cent upon
furnishing of security. While passing its order on 27th October, 2004, the
High Court appears to have missed sight of the fact that when the direction
was given in A.S.No.190/1985 to the appellant herein to deposit the enhanced
H
708 SliPREME COURT REPORTS [2006[ 3 S.C.R.

A amount of compensation, the award was yet to be finalized and that the --
award was ultimately finalized on 7th December, 1999 by this Court and that
the respondent No. I would, therefore, be entitled to compensation in terms
of the amount as quantified on 7th December, 1999. In our view. in the light
of the order passed by this Court on 7th December, 1999, quantifying the
B compensation amount to include solatium and interest, the provisions of
Sections 28 and 33 of the above Act would no longer be attracted and the
respondent No. I would only be entitled to interest on the delayed payment
of the quantified amount on and from 7th December, 1999 till the date of
actual payment.

C In that view of the matter, the appeal succeeds and is allowed. The
order of the High Court impugned in the appeal is set aside and it is directed
that out of the sum of Rs. l ,05,548/- remitted to the court below by the bank,
the respondent No. I will be entitled to receive a sum of Rs.21.562. 74. being
the balance amount of the total compensation payable in terms of the
compensation quantified by this Court's Order dated 7th December, 1999,
D together with interest thereupon calculated at the rate of 15 per cent from 7th
December, 1999, till the date of payment of the balance amount of the award.
Having regard to the fact that the lands were acquired between 1975 and
1978, such payment should be made expeditiously, but positively within a
period of six months from the date of the communication of this judgment.
E The amount left over after payment of the aforesaid sums are to be paid to
the appellant.

There will be no order as to costs.

K.K.T. Appeal allowed.

-