IVO AGNELO SANTIMANO FERNANDES & ORS.versusGOVERNMENT OF GOA & ANR.

                        [2011] 2 S.C.R. 1142


A       IVO AGNELO SANTIMANO FERNANDES & ORS.
                                  v.
                 GOVERNMENT OF GOA & ANR.
                (CIVIL APPEAL N0.7245 OF 2003)
                        FEBRUARY 23, 2011
B
      [G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.]

        LAND ACQUIAS/TION ACT, 1894:

c         s. 34 read with ss. 28 and 53 - Interest on compensation
    for land acquired -Amount not collected by /and-owners and
    deposited in Revenue account of State and utilized - HELD:
    The Act requires that the amount be deposited in court- Even
    if the amount is not collected by the claimants, State cannot
0   keep it with itself and utilize the same - In such a case, after
    a reasonable period the amount should be deposited in court
    - Interest will be payable to parties as per order of District
    Judge - Code of Civil Procedure, 1908 - 0. 21.r 1.

      In a land acquisition case, the amount of
E compensation as awarded by the reference court was to
  be paid to four land owners. The cheques prepared in the
  name of two land owners were not collected as one of
  them had died in the meanwhile. The amount of the
  uncollected cheques was deposited in the revenue
F account of the State and utilized by the State
  Government. In the execution application filed for
  recovery of the balance amount along with the interest
  accrued thereon, a dispute as to apportionment of
  compensation within the meaning of s. 31(2) of the Land
G Acquisition Act, 1897 arose. The District Judge by order
  dated 29.10.1999 directed that the amount of uncollected
  cheques be paid to appellants 1 and 3 leaving the
  question of interest to be determined subsequently. On

H                                1142
       IVOAGNELO SANTIMANO FERNANDES v.               1143
             GOVERNMENT OF GOA
23.3.2000, fresh cheques were deposited in court. The         A
District Judge, by order dated 18.8.2000, held that as per
the judgment in Prem Nath Kapur's case*, the liability of
the respondents to pay interest subsisted till they had not
deposited the amount in court. Since the respondents
had deposited the amount in their Revenue account and         B
had utilized the same, they were liable to pay interest @
15% on compensation. However, the High Court, in
revision, set aside the judgment of the District Judge
holding that the amount was paid to the appellants but
they did not collect the same. Aggrieved, the land-owners     c
and their heirs filed the appeal.

    Allowing the appeal, the Court

     HELD: 1.1 The Land Acquisition Act, 1897 requires
that the interest be deposited in court, and the same has     D
been upheld in the case of Prem Nath Kapur*. This Court
also held that by operation of s. 53 of the Act, Order 21,
r. 1 CPC, being inconsistent with the express provisions
contained in ss. 34 and 28 of the Act, stood excluded.
[para 18-19) [1150-B]                             ·           E

    *Prem Nath Kapur & Anr. v. National Fertilizers
Corporation of India Ltd. & Ors. 1995 ( 5 ) Suppl. SCR
790 = (1996) 2 sec 71 - relied on

     1.2 In the instant case, the respondents did not F
deposit the amount in court, but in their Revenue account
and utilized the same. Even if the respondent State does
pay the compensation to the claimants directly, and the
same is not collected, it cannot then keep the said
money with itself and utilize the same. In such cases, G .:·
after a reasonable period, if the claimants do not come
forward to collect compensation, then it should be
deposited in court by the State. Allowing the State to keep ·
the compensation with itself and utilizing it cannot
                                                              H
    1144    SUPREME COURT REPORTS                 [2011] 2 S.C.R.

A possibly be permitted being contrary to the provisions of
  the Act and the law laid down in Prem Nath Kapur. The
  judgment of the High Court is clearly erroneous and is
  set side. Accordingly, interest will be payable to the
  parties as per the order of the District Judge dated
s 18.8.2000. [para 19-20) (1150-C-F]
                         Case Law Reference:
        1995 (5) Suppl. SCR 790 relied on                para 9
C       CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    7245 of 2003.

         From the Judgment & Order dated 16.08.2002 of the High
    Court of Bombay at Goa in Civil Revision Application No. 44
    of 2001.
D
        M.S. Ganesh, Nikhil Nayyar, K. Seshachary, Swarpnil
    Verma, T.V.S. Raghzavendra Sreyas for the Appellants.

        Niranjana Singh, Prema Singh for the Respondents.

E       The Judgment of the Court was delivered by

        GANGULY, J. 1. Heard counsel for the parties.

         2. A notification dated 6.09.1984 under Section 4 of the
    Land Acquisition Act, 1894 (hereinafter, 'the Act'), was issued
F   for acquisition of land at Sanguem, Goa, for the construction
    of a sports complex. The concerned dispute relates to land in
    Survey Nos. 111/1 and 111/2. The Land Acquisition Collector
    (hereinafter, 'LAC') awarded compensation at Rs.45/- per sq.
    meter.
G
         3. Aggrieved, landowners-appellants 1 to 3 and one Ana
    Conceicao Antonieta Santimano filed reference petitions
    against the order of the LAC under Section 18 of the Act. The
    District Judge, South Goa, passed an award dated 19.08.1992,
H
     IVO AGNELO SANTI MANO FERNANDES v.     1145
 GOVERNMENT OF GOA [ASOK KUMAR GANGULY, J.)

wherein the rate of Rs.45/- per sq. meter given by the LAC was A
upheld. Additionally, they were held entitled to severance
charges @ 20% p.a. of Rs.45/- per sq. meter in respect of the
non-acquired portion of 37, 731 sq, meters. They were also
granted compensation in respect of a boundary wall amounting
                                                                1
to Rs.31,720/-, and other statutory benefits. The total sum thus B
awarded to them was Rs.8,80,372/-.

     4. On 7.3.1996, an order was issued by the Director of
Sports and Youth Affairs, releasing funds to the extent of
Rs.8,80,372/-, placing the same at the disposal of Addi. Dy.       C
Colle~tor, L.A., South, Margoa, Goa, towards payment of the
decretal order of the District Judge, South Goa, Margoa in the
said land acquisition matter.

     5. On 11.3.1996, Ana Conceicao Antonieta Santimano
expired leaving behind a Will dated 19.4.1995 bequeathing the      D
additional compensation payable by the government, to her son
Herbert Santimano Fernandes (appellant No. 2). The
appellants 4, 5 and 6 are the other legal representatives of the
deceased Ana Conceicao Antonieta Santimano.
                                                                   E
     6. The death of Ana Conceicao Antonieta Santimano was
not intimated to the government. Accordingly, pursuant to the
award, the respondents prepared two cheques each in the sum
of Rs.2,06,436/- (after deduction of taxes) in favour of the
deceased Ana Conceicao Antonieta Santimano and appellant           F
1, and two cheques each in the sum of Rs.2,06,437/- (after
deduction of taxes) in the names of appellants 2 and 3. The
Government addressed a letter dated 1.4.1996 to the
deceased Ana Conceicao Antonieta Santimano and
appellants 1 to 3, requesting them to collect their cheques on
8.4.1996. The appellants 2 and 4 collected their cheques on        G
9.4.1996. However, the other two cheques were not collected
by the respective claimants. On 13.9.1996, the respondents
thus deposited the uncollected cheques in their Revenue
Deposit by way of challan and utilized the same.
                                                                   H
    1146    SUPREME COURT REPORTS                  [2011] 2 S.C.R.


A         7. The appellants filed an execution application (No. 3/98}
    for the recovery of the balance amount along with interest
    accrued thereon. In the said execution application, the
    appellants raised a dispute as to apportionment of
    compensation within the meaning of Section 31(2} of the Act,
B   contending that Ana Conceicao Antonieta Santimano was
    entitled to Rs.2,83, 159.67/- and lvo Agnelo Santimano
    Fernandes was entitled to Rs.2,83, 159.67/- as per Survey
    No.111/1; and Ana Conceicao Antonieta Santimano was
    entitled to Rs.1,57,026.20/- and Herbert Santimano Fernandes
c   was entitled to Rs.1,57,026.20/- as per Survey No. 111/2. It
    was contended that appellant 3 (Nancy Fernnades Viviera
    Menezes} was not entitled to receive any sums as no
    enhancement was awarded with respect to the area belonging
    to her. The interested party, lvo Agnelo Santimano Fernandes,
    was thus entitled to receive a difference of Rs.58,952/-.
0
         8. The District Judge, South Goa, by order dated
    29.10.1999, directed that the amount of Rs.2,06,436/- each for
    which the cheques had been drawn, be paid to the appellants
    1 and 3, leaving the question of interest to be determined
E   subsequently. Thus, on 23.3.2000, fresh cheques for an amount
    of Rs.60,000/- in the name of lvo Agnelo Santimano Fernandes
    and for Rs.3,52,873/- in the name of Herbert Santimano
    Fernandes were issued by the respondents and deposited in
    court.
F
          9. The District Judge, South Goa, by way of order dated 1
    18.8.2000, held that there was a dispute as to apportionment
    of compensation, and in light of the judgment in the case of
    Prem Nath Kapur & Anr. v. National Fertilizers Corporation
G   of India Ltd. & Ors.., reported in (1996) 2 SCC 71, held that
    the liability of the respondents to pay interest subsisted till the
    respondents had not deposited the amount in the court. Since,
    the respondents had deposited the amount of compensation
    in their Revenue account and had utilized the same instead of
H   depositing it in Court, the respondents were liable to pay
      IVOAGNELO SANTIMANO FERNANDES v.       1147
  GOVERNMENT OF GOA [ASOK KUMAR GANGULY, J.]

 interest@ 15% p.a. on compensation. The relevant portion of          A
 that determination reads as follows:

     "The decree holders have not contested the figures
     mentioned in the reply Exh. 20 dated 15.7.2000 filed by
     the judgment debtors, which show that an amount of
                                                                      B.
     Rs.8,80,372/- was due arid payable to them upto
     31.3.1996. Decree holders nos. 1 and 2 would be
     therefore, entitled to receive further interest at the rate of
     15% from 1.4.1996 to 8.4.1996 on the said sums of
     Rs.2,06,436/- and Rs.2,06,437/- respectively. Likewise,          C
     decree holder no. 1 would also be entitled to receive further
     interest at the rate of 15% on Rs.60,000/- from 1.4.1996
     to 7.1.2000 and decree holder no. 2 would also be entitled
     to receive further interest at the rate of 15% on
     Rs.3,52,872/- from 1.4.1996 to 7 .1.2000. Judgment
     debtors are hereby directed to pay the same to the said          D
     decree holders nos. 1 and 2 respectively.•

      10. Aggrieved by that order of the. District Judge, South
 Goa passed· in the execution proceeding, the respondents
 preferred a revision before the High Court of Bombay at Goa.· E

       11. Before the High Court it was contended by counsel for
. the respondents that a bare perusal of Sections 28 and 34 of
  the Act read with Order XXI Rule I of the CPC would clearly
  indicate that the State was not liable to pay any additional F
  interest except for the period from 1.4.1996 to 8.4.1996. The
  respondents further contended that as far as the State was ·
  concerned, they had actually tendered and paid the money to
  the original claimants by drawing four cheques for the amount
  mentioned therein with regard to the four original claimants by
  cheques dated 29.3.1996 and also by communicating a letter G
  dated 1.4.1996 that the claimants ought to come and collect
  their respective amounts payable under the cheques on
  8.4.1996; and once the State prepared the cheques and kept
  them ready to be collected, there was no duty cast on the State
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   1148     SUPREME COURT REPORTS                  [2011] 2 S.C.R.

A to deposit the same in court unless and until the State was
  informed that Ana Conceicao Antonieta Santimano could not
  claim the amount and she had bequeathed her amount to
  Herbert. The respondents contended that an ex facie reading
  of Sections 28 and 34 of the Act and Order XXI Rule 1 of CPC
B make it clear that the claimants could not insist on the State
  depositing the amount only in court and it cannot be contended
  that State was not entitled to pay the said amount directly to
  the claimants.

        12. On the other hand, the counsel for the appellants urged
C that Sections 28 and 34 of the Act make it abundantly clear that
  the interest could be paid only in Court, otherwise liability on
  the State to pay interest would continue. As per Section 53 of
  the Act, the provisions of Order XXI Rule 1 of CPC could not
  come in the way of the contention of the appellants in as much
D as the said provision was inconsistent with the provisions of
  the Act and thus, the bar with regard to grant of interest as
  provided under Order XXI Rule 1 of CPC would not apply in
  the instant case. Learned counsel for the appellants relied on,
  inter alia, on the decision of this Court in the case of Prem Nath
E Kapur (supra).

       13. The High Court opined that acceptance of such an
  argument may lead to absurdity in the sense that the claimant
  could very well collect the excess amount directly from the State
F and after a few years may turn around and say that the amount
  was not deposited in the Reference Court and claim interest
  thereon. Further, with respect to the contention of the appellants
  regarding prohibition in Section 53 of the Act in invoking Order
  XXI Rule 1 of CPC, it was rejected on the ground that there
G was no inconsistency between the proviso to Order XXI Rule
  1 of CPC and Sections 28 and 34 of the Act. Accordingly, the
  High Court held that the amount was duly paid to the appellants
  but they did not come to collect the same. Therefore, in the
  aforesaid facts and circumstances, the judgment of the District
  Court dated 18.8.2000 could not be sustained and was set
H
     IVO AGNELO SANTI MANO FERNANDES v.     1149
 GOVERNMENT OF GOA [ASOK KUMAR GANGULY, J.]
aside by way of impugned judgment of the High Court dated             A
16.8.2002.

    14. Aggrieved by the said order of the High Court, the
appellants filed the present appeal.

     15. During the pendency of the appeal, the wife of lvo B
Agnelo Santimano Fernandes by the name of Celina de
Conceicao Socorro Josefina Barbosa Fernandes alias Celina
Barbosa Fernandes (appellant 5) passed away on 6.11.2003.
An application was filed for substitution for bringing on record
the legal representatives of appellant 5 and the same was C
allowed by an order dated 12.7.2004. Accordingly, the legal
heirs of appellant 5 were brought on record.

     16. We have heard the parties and perused the materials
on record as well as the relevant provisions of the Act.
                                                                      D
      17. In the case of Prem Nath Kapur(supra), a three-Judge
Bench of this Court considered the question as to when the
liability of the State to pay interest ceases. The relevant portion
of.the judgment reads as follows:
                                                                   E
     "13. Thus we hold that the liability to pay interest on the
     amount of compensation determined under section 23(1)
     continues to subsist until it is paid to the owner or
     interested person or deposited into court under section 34
     read with section 31. Equally, the liability to pay interest F
     on the excess amount of compensation determined by
     the Civil Court under section 26 over and above the
     compensation determined by the Collector/Land
     Acquisition Officer under section 11 subsists until it is
     deposited into court. Proprio vigore in case of further G
     enhancement of the compensation on appeal under
     section 54 to the extent of the said enhanced excess
     amount or part thereof, the liability subsists until it is
     deposited into court. The liability to pay interest ceases on
     the date on which the deposit into court is made with the H
    1150      SUPREME COURT REPORTS                [2011] 2 S.C.R.

A          amount of compensation so deposited."

                                                (Emphasis added}
       18. This Court also held that by operation of Section 53
  of the Act, Order XXI Rule 1 of CPC, being inconsistent with
B the express provisions contained in Sections 34 and 28 of the
  Act, stood excluded.

         19. In the light of the abovesaid principle, we are of the
  view that the contentions of the respondents cannot be
c accepted. The Act requires that the interest be deposited in
  court, and the same has been upheld in the case of Prem Nath
  Kapur (supra}. In the present case, the respondents did not
  deposit the amount in court, but in their Revenue account and
  utilized the same. Even if the respondent State does pay the
0 compensation      to the claimants directly, and the same is not
  collected, the respondent State cannot then keep the said
  money with itself and utilize it. In such cases, after a reasonable
  period, if the claimants do not come forward to collect
  compensation, then it should be deposited in court by the State.
  Allowing the State to keep the compensation with itself and
E utilizing it cannot possibly be permitted being contrary to the
  provisions of the Act and the law laid down in Prem Nath Kapur
  (supra}. Hence, the judgment of the High Court is clearly
  erroneous and deserves to be set side.
F        20. Accordingly, the appeal is allowed and interest will be
    payable to the parties as per the order of the District Judge
    dated 18.8.2000. Such payment be released within a period
    of six weeks from date.

G
           21. No order as to costs.

    R.P.                                           Appeal allowed.