Holding

Interest is not part of the award and Section 30(2) of the 1984 Amendment Act does not apply to pre‑April‑1982 awards, so the appellants are not entitled to the enhanced rate of interest.

Summary

The appellants challenged the compensation awarded in a land acquisition proceeding that began in 1963, arguing that they were entitled to the enhanced rate of interest introduced by Section 18 of the Land Acquisition (Amendment) Act, 1984. The Collector's award (1968) and the Reference Court's award (1972) were both made before the cut‑off date of 30 April 1982, and the High Court's belt‑wise award was pronounced in 1974. The principal issue was whether interest forms part of the award and whether Section 30(2) of the Amendment Act, which extends enhanced interest and solatium to awards made between 30‑April‑1982 and 24‑Sept‑1984, applies to these earlier awards. The Court held that interest, like solatium, is not part of the award under Sections 11, 23 and 26 of the 1894 Act, and therefore Section 30(2) does not cover the appellants' case. Consequently, the appellants are not entitled to the enhanced 9% (or 15% after one year) interest rate, and equity cannot be invoked to alter the statutory rate. The appeal was allowed in part, but the claim for enhanced interest was dismissed.

Issues considered

Whether interest payable under Section 28 of the Land Acquisition Act forms part of the award.
Whether Section 30(2) of the Land Acquisition (Amendment) Act, 1984 applies to awards made before 30 April 1982.
Whether the enhanced rate of interest under Section 18 of the Amendment Act can be claimed retrospectively or from the date of commencement of the Amendment Act.
Whether principles of equity can be invoked to grant a higher rate of interest than that prescribed by statute.

Legislation cited

Code of Civil Procedure, 1908s. 2(2), s. 2(9)
Land Acquisition Act, 1894s. 11, s. 23, s. 25, s. 26, s. 28
Land Acquisition (Amendment) Act, 1984s. 18, s. 30(2)

Subjects

Land acquisitionCompensationInterestAmendment ActSection 30(2)SolatiumAwardEquityStatutory interpretation

Judgment

J

MIR FAZEELATH HUSSAIN & ORS. A
v.
) SPECIAL DEPUTY COLLECTOR, LAND ACQUISITION,
HYDERABAD

MARCH 23, 1995
B
[KULDIP SINGH, R.M. SAHAI AND B.L. HANSARIA, JJ.)

[And Acquisition Act, 1894-Section 28.
r
Land Acquisition (Amendment) Act, 1984-Sections 18 and 30(2)- C
Applicability of-Award made prior to 30.4.1982-Whether enhanced interest
can be granted.

Land Acquisition Act, 1894-Sections 11, 23and 26-Award-Contents
of-Interest and solatium do not f onn part of the awart.f-Pri.nciples of
Equity-Applicability of-Does not apply in detennining the rate of interest. D

Section 28 of the Land Acquisition Act, 1894 was amended by the
Land Acquisition (Amendment) Act, 1984 and the interest payable under
Section 28 was enhanced. By the same Amendment Act the rate of solatium
payable under Section 23(2) of the main Act was also enhanced. Section E
30(2) of the Amendment Act of 1984 made the enhanced interest and
solatium payable even in respect of awards of the Collector or the Court
made in between 30.4.1982 (the day on which the Amendment Bill was
introduced in the House of People) and 24.9.1984 (the date of commence-
ment of the. Amendment Act),
F
Interpreting Section 30(2) of the Amendment Act of 1984 in so far
as it related to solatium, a Constitution Bench of this Court in the case of
Union of India v. Raghubir Singh, [1989) 2 SCC 754 held that under the
said section the benefit of enhanced solatium extends to case where the
award by the Collector of the Reference court was made between 30.4.1982
and 24.9.1984 or to appeals against such awards which were made between G
30.4.1982 and 24.9.1984, decided by the High Court or this court whether
before or after 24.9.1984.

In the present case, the award of the Collector as well as the
Reference court ~ made prior to 30.4.1982. Even the order of the High H
985
\
986 SUPREME COURT REPORTS [1995) 2 S.C.R.

A Court, by which the High Court had fixed compensation on belt-wise basis,
was pronounced on 24.5.1974. On appeal, this court partly allowed the
appeal but there was difference of opinion between the two Hon'ble Judges
{
as to whether the appellants were entitlt!d to enhanced interest under
Section 18 of the Amending Act of 1984 in view of judgment of this Court
B · in Raghubir Singh 's case. Hence, the matter was referred to a larger Bench.
On behalf of the appellants it was argued that (1) Section 30(2) of
the Amendment Act deals with awards, and interest is not a part of award;
(2) Raghubir Singh's case dealt with payment of solatium and therefore
would not be applicable in cases of payment of interest; and (3) the
C appellants were not claiming enhanced interest retrospectively but from
the date of coming in force of Amendment Act (24.9.1984) and therefore,
Raghubir Singh's case would not.apply.

Answering the reference, this court J..
D HELD : 1. That interest does not form part of award would appear
from a combined reading of Sections 11, 23, and 26 of the Land Acquisition
Act, 1894. The interest visualised by Section 28 of the Land Acquisition Act
is not a part of the compensation, and so, not a part of the award. A ..J..-·
combined reading of the aforesaid s~ctions would show that solatium too
E . is not a part ·of the award inasmuch as sub-section (1) of Section 26 of the
Land Acquisition Act, 1894 specifically states that the award shall specify
the amount awarded under each of the clauses of sub-section (1) of Section
23, whereas solatium is dealt by Sub-section (2) of· Section 23. The
aforesaid being the position, what was stated in Raghubir Singh's case qua
solatium shall apply to interest also. [993-B, E-F]
F
Shree Vijay Cotton & Oils Mills Ltd. v. State of Gujarat, [1991) 1 SCC
262; Union of India v. Raghubir Singh, [1989) 2 SCC 754 and KS.
Paripooran v. State of Kera/a, JT [1994) 6 SC 182, referred to.

G 2. The appellants are not entitled to enhanced rate of interest as
contemplated by Section 18 of the Amendment Act as the increase was
sought to be confined to the awards made between 30.4.1982 and 24.9.1984,
whereas the present award is anterior even to the starting point. [993-H,G)

3. Equity has no role when the question relates to rate of interest.
H Whether the rate of interest should be 6% or 9% is not a matter which
M.F. HUSSAIN v. DY. COLLECTOR [HANSARIA, J.) 987
would require invocation of Court's equitable jurisdiction. The same has A
to be governed by statutory provision. Had present been a case of non-
awarding of any interest, interest may have become payable on equity, for
it is meant to make good the loss suffered by a person due to delayed
payment. (994-C-B]

Kalimpong Land & Building Ltd. v. State of West Bengal, JT (1994] 6 B
SC 102, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 706 of
1975.

From the Judgment and Order dated 24.6.74 of the Andhra Pradesh C
High Court in C.C.C.A. No. 220 of 1972.

K Madhava Reddy, D. Prakash and S. Markandeya with him for the
Appellants.

T.V.S.N. Chari and Nikhil Nayyar for the Respondent. D

The following Judgment of the Court was delivered by
).__ HANSARIA, J. A land acquisition proceeding which was initiated by
issuing notification under Section 4(1) of the Land Acquisition Act, 1894
(hereinafter referred to as 'the Act') on 25.4.1963 has brought the appel- E
lants to this Court as they have felt dis-satisfied with the fixation of a
market value by the Andhra Pradesh High Court, which granted compen-
sation on belt-wise basis. The appeal came up for hearing before a two-
Judge Bench and by judgments dated May 15, 1992 the appeal came to be
allowed in part as indicated in the judgments. The two learned Judges, F
however, differed on the question as to whether the appellants are ·entitled
to interest as enhanced by Section 18 of the Land Acquisition (Amend-
ment) Act, 1984 (for short, 'the Amendment Act'). Kasliwal, J. took the

---- /
view that despite what has been held by the Constitution Bench in the case
of Union of India v. Raghubir Singh, [1989] 2 SCC 754 enhanced rate of
interest as visuallsed in the Amendment Act would .be available to the G
appellants on a harmonious reading of the provisions, if the intention of
the legislature in enhancing the rate of interest is kept in view. Punchhi, J.,
however, was of the opinion that awarding of enhanced rate on the face of
what was held in Raghubir Singh's case would militate against the ratio of
that case and would do violence to the statute. The learned Judges, H
988 SUPREME COURT REPORTS (1995) 2 S.C.R.

A therefore, while allowing the appeal in part and setting aside the judgment
of the High Court to the extent indicated in the judgments, requested che
Hon'ble Chief Justice to constitute a larger bench to resolve the disagree-
ment with regard to the rate of interest as, though the controversy is short,
the.same is likely to affect large number of cases. Hence, this appeal has
B come up for hearing by this bench.

2. The provisions of the Act which are relevant for our purpose are
Sections 11, 23, 25, 26 and 28, which may be noted at the threshold:
(
"11. Enquiry and award by Collector. -
1
c (1) On the day so fixed, or on any other day to which the enquiry
has been adjourned, the Collector shall proceed to enquire into
the objections (if any) which any person interested has stated
pursuant to a notice given under Section 9 to the measurements
made under Section 8, and into the value of the land at the date
D of the publication of the notification under Section 4, sub-section
(1), and into the respective interests of the persons claiming the
compensation and shall make an award under his hand of -

(i) the true area of the land;

E (ii) the. compensation which in his opinion should be allowed
for the land; and

(iii) . the appointment of the said compensation among all the
persons known or believed to be interested in the land, of
whom, or of whose claims, he has information, whether or
F not they have respectively appeared before him:

G 23. Matters to be considered in detennining compensation. - (1) In
determitling the amount of compensation to be awarded for land
acquired under this Act, the Court shall take into consideration --

first, the market-value of the land at the date of the publication
H of the notification under Section 4, sub-section (1);
M.F. HUSSAIN v. DY. COLLECTOR [HANSARIA, J.) 989
secondly, the damage sustained by the person interested, by reason A.
of the taking of any standing crops of trees which may be
on the land at the time of the Collector's taking possession
thereof;

thirdly, the damage (if any) sustained by the person interested, at
the time of the Collector's taking possession of the land, B
by person of severing such land from his other land;

fourthly, the damage (if any) sustained by the person interested, at
the time of the Collector's taking possession of the land,
'\ T by reason of the acquisition injuriously affecting his other
property, movable or immovable, in any other manner, or
c
his earnings;

fifthly, if, in consequence of the acquisition of the land by the
Collector, the person interested is compelled to change
his residence or place of business, the reasonable expenses D
(if any) incidental to such change; and

sixthly, the damage (if any) bona fide resulting from diminution
of the profits of the land between the time of the publi-
cation of the declaration under Section 6 and the time of
the Collector's taking possession of the land. E
(1-A) In addition to the market-value of the land, as above
provided, the Court shall in every case award an amount calculated
at the rate of twelve per centum per annum on such market-value
for the period commencing on and from the date of the publication
of the notification under Section 4, sub-section (1), in respect of F
such land to the date of the award of the Collector or the date of
r'- taking possession of the land, whichever is earlier.

Explanation.-- In computing the period refer.red to in this,
sub-section, any period or periods. during which the proceedings G
for the acquisition of the land were held up on account of any stay
or injunction by the order of any court shall be excluded.

(2) In addition to the market-value of the land, as above provided,
the Court shall in every case award a sum of thirty per centum on
such market-value, in consideration of the compulsory nature of H
990 SUPREME COURT REPORTS (1995) 2 S.C.R.

A the acquisition.

25. Amount of compensation by Cowt not to be lower than the -{'
amount awarded by the Collector. - The amount of compensation
awarded by the Court shall not be less than the amount awarded
by Collector under Section 11.
B
26. Fann of awards~ - (1) Every award under this Part shall
be in writing signed by the Judge, and shall specify the amount
awarded under clause first of sub-section (1) of Section 23, and
also the amounts (if any) respectively awarded under each of the
other clauses of the same. sub-section, together with the grounds
c of awarding each of the said amounts.

(2) Every such award shall be deemed to be a decree and the
statement of the grounds of every such award a judgme,nt within
the meaning of Section 2, clause (2), and Section 2, clause (9),
D respectively, of the Code of Civil Procedure, 1908 (5 of 1908).

28. Collector may be directed to pay interest on excess compen-
sation. - If the sum which, in the opinion of the Court, the
Collector ought to have awarded as compensation is in excess of
the sum which the Collector did award as compensation, the award
E of the Court may direct that the Collector shall pay interest on
such excess at the rate of nine per centum 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
F such excess or any part,thereof is paid into Court after the date
of 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
G paid into Court before the date of such expiry.

We may also note Section 18 of the Amendment Act which brought
out amendment in Section 28 of the principal Act, which reads as below :

H "18.Amendment of Section 28. - In Section 28 of the principal Act,-
M.F. HUSSAIN v. DY. COLLECTOR [HANSARIA, J.) 991
(a) for the words "six per centum", the words ·"nine per centum" A
shall.be substituted;

(b) the following proviso shall be inserted at the end, namely :-

"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 B
of 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
T on the amount of such excess or part thereof which has not been
..... paid into Court before the date of such expiry." C
3. The aforesaid shows that the rate of interest was increased from
6 per centum to 9 which would become 15 after expiry of the period
mentioned in the proviso to the Amendment Act. The question for deter-
mination is whether advantage of the increased in rate of interest would be
available to the appellants. To decide this we have to keep in mind the D
following dates:

(i) Date of Collector's award : 10.6.1968;

(ii) Date of taking over of possession: 24.6.1968
E
(iii) Date of Reference Court's award : 30.8.1972;

(iv) Date of the decision of the High Court : 24.6.1974; and

(v) Date of this Court's aforesaid judgments : 15.5.1992
F
,.- -< 4. The answer to the controversy lies mainly in finding out as to
whether the appellants' case is covered by Section 30(2) of the Amendment
Act which reads as below:

"30(2) The provisions of sub-section (2) of Section 23 and Section
28 of the principal Act, as amended by clause (b) of Section 15 G
and Section 18 of this Act respectively, shall apply, and shall be
1- deemed to have applied, also td;- and in relation to, any award
made by the Collector or Court or to any order passed by the High
Court or Supreme Court in appeal against any such award under
the provisions of the principal Act after the 30th day of April, 1982 H
992 SUPREME COURT REPORTS [1995] 2 S.C.R.

A [the date of introduction of the Land Acquisition (Amendment)
Bill, 1982, in the House of the People) and before the commence-
ment of this Act." (Emphasis supplied).

5. As to what is the reach and extent of the aforesaid section came
to be examined by the Constitution Bench in Raghubir Singh 's case. Para
B 32 of that judgment is relevant for our purpose, according to which the
expression "any such award" in the section referred to awards made by the
coµector or Court between April 30, 1982 and September 24, 1984 (which
is the date of commencement of the Amendment Act); or the appeal
against such awards decided by the High Court and the Supreme Court,
C whether the decisions are rendered before September 24, 1984 or after that
date. In the present case the award of the Collector as well as of the Court
being before April 30, 1982, on the ratio of Raghubir Singh's case benefit
of amended section 28 is not available to the appellants. However, it
deserves to be noted thctt Raghubir Singh's case dealt with the question of
payment of solatium as enhanced by the Amendment Act. The real point
D for consideration, therefore, is whether what was stated by Raghubir
Singh's bench regarding solatium would apply to interest as well; and this
is the point of difference between the two learned Judges who iteard the
appeal earlier. May we state that the view taken by the Raghubir Singh's
Bench has been endorsed by the Constitution Bench in KS. Paripooman
E v. State of Kerala, JT (1994] 6 SC 182 (see paras 58, 59, 102, 106 and 107).

6. Shri Madhav Reddy, learned Sr. Advocate appearing for the
appellants, has submitted that as appellants are not claiming enhanced
interest retrospectively but from the · date of coming into force of the
F ~ending Act (September 24, 1984) what was stated in Raghubir Sing/Vs
case has no application, we find no force in this submission inasmuch as
enhanced interest as contemplated by section 18 of the Amending Act
cannot be claimed even from the date of coming into force of the Amend-
ing Act de hors what has been stated in sub-section (2) of Section 30. This
is for the reason that the Amending Act has made available the enhanced
G rate only to those cases mentioned in sub-section (2) of Section 30. The
Court has no power to enlarge the scope of this sub-section. That would
be either "violence to the statute" as put by Punchhi, J ., or an act of
legislation by us, which as a court we cannot undertake.

H 7. Let it, therefore, be seen whether, despite what was stated in
M.F. HUSSAIN v. DY. COLLECTOR (HANSARIA, J.] 993

Raglmbir Singh 's case qua solatium, enhanced interest can be claimed by A
the appellants. This aspect is being examined by us because interest is not
a part of the award and section 30(2) of the Amendment Act deals with
awards. That interesc does not form of award would appear from a com-
bined reading of Sections 11, 23 and 26 of the Act Section 11, which enjoins
the Collector to make an award, requires him to specify: (i) the true area
of the land; (ii) the compensation which in his opinion should be allowed
B
for the land; and (iii) the apportionment of the said compensation. Section
23 deals with the matters to be considered in determining the compensa-
tion. Sub-section (1) requires six aspects to be taken note of which are
subject matters of six clauses of that sub-section. Sub-section (2) of Section
23 has provided for payment collo-quially known as solatium. Section 26, c
which is on the subject of form of awards, states that every award shall
specify the amount awarded under clause first of sub- section (1) of Section
23, and also the amounts, if any, awarded under each of the other clauses
of the same sub-section. Sub- section (2) of this section states that every
such award shall be deemed to be a decree.
D
8. The aforesaid clearly shows that the interest visualised by section
28 of the Act is not a part of the compensation, and so, not a part of award.
This has also been the view expressed by a two-Judge bench of this Court,
to which one of us (Kuldip Singh, J) was a party, in Shree Vijay Cotton &
Oils Mills Ltd. v. State of Gujarat, (1991) 1 SCC 262. (See para 15). A E
combined reading of aforesaid sections would show that solatium too is not
a part of the award inasmuch as sub-section (1) of Section 26 specifically
states that the award shaII specify the amount awarded under each of the
clauses of sub-section (1) of Section 23, whereas solatium is dealt by
sub-section (2) of Section 23.
F
;----·
r 9. The aforesaid being the position, we have to hold that what was
stated in Raghubir Singh's case qua solatium shall apply to interest also.
Enhanced interest is not demanded by a harmonious reading of relevant
provisions, as opined by Kasliwal, J., because the "intention of the legisla-
ture" about which the learned Judge spoke, really shows the contrary, G
according to us, as the increase was sought to be confined (for reasons
which need no examination) to the awards made between the dates noted
above, whereas the present award is anterior to the starting point. We are,
therefore, in agreement with the view taken by Punchhi, J. and state that
the appellants are not entitled to enhanced rate of interest as contemplated H
994 SUPREME COURT REPORTS . (1995) 2 S.C.R.

A by section 18 of the Amendment Act.
10. It has also been submitted by Shri Madhava Reddy that higher
rate of interest may be ordered to do equity between the parties. We are
unable to concede, as, had present been a case of non-awarding of any
interest, we would have done so, because, interest in such cases may
B become payable on equity, for it is meant to make good ~he loss suffered
by a person due to delayed payment. This view has been reiterated recently
by this Court in Kalimpong Land & Building Ltd. v. State of West Bengal,
IT (1994) 6 SC 102, in which payment of interest was ordered, even when
acquisition was under Requisitioning and Acquisitioning of Immovable
C Property Act, 1952, which statute has made no specific provision, unlike
the Act at hand, for payment of interest. But equity has no role when the
question relates to rate of interest. Whether the rate of interest should be
.6% or 9% is not a matter which would require invocation of Court's
equitable jurisdiction. The. same has to be governed by statutory provision.
Had the rate of interest been too low, we could have perhaps on equity
D granted some relief. But 6% has been the rate for a very long period insofar
as the Act is concerned as the enhancement came only in 1984 whereas
the Act is of 1894. So, we are not satisfied if equity demands granting of
relief in question.

E 11. This is our answer to the point referred to this bench. The appeal
.may now be placed for final disposal before an appropriate bench.

B.K.M. Reference answered.