THE STATE OF GUJARAT AND ANR. ETC.versusDEVRAJBHAL CHHAGANBHAL AND ORS. ETC.
- Citation
- 1996 INSC 853
- Decided
- 8 August 1996
- Disposal
- Appeal(s) allowed
Holding
Parties bound by a Section 11(2) compensation agreement are not entitled to statutory benefits under Amendment Act 68 of 1984 and must receive interest as stipulated in the agreement.
Summary
The State of Gujarat appealed against a compensation agreement entered into under Section 11(2) of the Land Acquisition Act, 1894, which fixed compensation at Rs. 140 per guntha, an additional 20% for land development, a 15% solatium and interest at 4.5% as of the agreement date. The issue was whether the parties could claim the enhanced interest rates provided by Amendment Act 68 of 1984, which amended Section 28 of the Act. Relying on State of Gujarat v. Daya Shamji Bhai (1995) 5 SCC 746, the Supreme Court held that parties bound by a Section 11(2) agreement are limited to the terms they have expressly agreed upon and cannot invoke statutory benefits not contemplated in the contract. Consequently, the claimants were entitled only to the agreed 4.5% interest, not the higher rates under the amendment. The Court allowed the appeal, dismissed the review petition, and confirmed the original order, awarding costs.
Issues considered
- Whether parties who entered into a compensation agreement under Section 11(2) of the Land Acquisition Act, 1894 are entitled to the benefit of the enhanced interest rates under Amendment Act 68 of 1984.
Legislation cited
- Amendment Act 68 of 1984
- Land Acquisition Act, 1894s. 11(2), s. 28
Subjects
Judgment
THE STATE OF GUJARAT AND ANR. ETC. A
v.
DEVRAJBHAl CHHAGANBHAl AND ORS. ETC.
AUGUST 8, 1996
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.] B
Land Acquisition Act, 1894:
S.JJ(2}-Compensatioll ill tenns of agreement-La/Id owners havillg
agreed to payment of compensation at the rate of R,. 140 per guntha besides
the additional compensation at the rate of 20% on accoum of development
c
of land, solatiwn at the rate of 15% and interest prevailing 011 the date of
agreement-Held, are not entitled to benefits available u!lder Amendment Act
68 of 1984.
State of Gujarat & o,,. v. Daya Shamji Bhai & Ors., [1995] 5 SCC D
746, relied on.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2754 of
1987 Etc.
From the Judgment and Order dated 21.7.86 of the Gujarat High E
Court in S.C.A. No. 5916 of 1983.
S. Hazarika, N. Mukherjee and H. Wahi for the Appellants.
Jatin .lhaveri and H.J. Jhaveri for the Respondents.
The following Order of the Court was delivered :
F
Leave granted in SLP.
The only question that arises in these cases is : whether the respon-
dents, having agreed under Section 11(2) of the Land Acquisition Act, 1894 G
(for short, the 'Act') to payment of the compensation in terms of the
agreement @ Rs. 140 per guntha besides the additional compensation at
the rate of 20% on account of development of the land and solatium @
15% and interest prevailing as on that date, were entitled to claim the
benefit under the Amendment Act 68 of 1984? This Court in State of
Gujarat & Ors. v. Daya Shamji Bhai & Ors., [1995] 5 SCC 746 considered H
409
410 SUPREME COURT REPORTS (1996] SUPP. 4 S.C.R.
A the question elaborately and held that the parties having ent.ered into the
agreement under Section 11(2) were bound by the agreement: and thereby,
they were not. entitled to any benefit other than what was agreed upon.
Therefore, the High Court was not right in the impugned order passed in
the review petition ,in allowing the enhancement under the Amendment
Act. It is sought to be contended by the learned counsel for the respon-
B dents that under 16 of the agreement since there is no agreement as regards
the rate of interest, the claimants are entitled to statutory rate of interest
under Section 28 as amended in Act 68 of 1984. We do not appreciate the
contention to be correct. Partieshaving agreed to the payment of interest
on the date of the contract, the rate of interest admittedly payable being
c 4-1/2%, they are entitled to interest at 4-1/2% and nol to the enhanced
rates under proviso to Section 28 of the Act, as amended by Act 68 of 1984.
The appeals are allowed and order in the review petition stands
dismissed Lut original order stands confirmed. No. costs.
R.P. Appeals allowed.
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