UNION OF INDIA AND ORS.versusAJAIB SINGH AND ORS.

                         UNION OF INDIA AND ORS.                                   A
                                       v.
                             AJAIB SINGH AND ORS.

                              SEPTEMBER 20, 1995

                [A.M. AHMADI, CJ. AND SUHAS C. SEN, J.]                            B

          Requisitioning and Acquisition of Immovable Property Act, 1952 :

          Compensation-Enhancement of-Award of Solatium and interest by
    Arbitrato1~Validity of
                                                                                   c
          In respect of certain land acquired, the competent authority awarded
    compensation @Rs. 60 per Marla. After a long lapse of time, the question
    of compensation was referred to an arbitrator, who enhanced the compen-
    sation to a flat rate of Rs. 300 per Marla and awarded solatium @30% per
    annum and interest @ 9% per annum for the first year and thereafter @          D
    15% per annum for the subsequent years from the date of possession of
'   the property.

          Against the award, Government preferred appeals to the High Court.
    Single Judge as well as the Division Bench dismissed the appeals. Hence
    these appeals.                                                                 E
          Partly allowing the appeals, this Court

          HELD : 1. The arbitrator was in error in allowing solatium and
    interest without coming to a decision as to the existence of any dispute
    and the failure of the Government to refer the matter to an arbitrator. The    F
    order relating to payment of solatium and interest is set aside. [835-A)

          2. It has not been established on behalf of the respondent that there
    was any delay in the appointment of arbitrator on the part of the appellant.
    There is nothing to show that the respondents had demanded appointment
    of arbitrator or had disputed the amount of compensation paid by the           G
    Special Land Acquisition Collector. It is true that arbitrator was ultimate-
    ly appointed at. the instance of the respondent. But there is nothing to
    indicate that the respondents had earlier disputed the amount of compen-
    sation or had demanded appointment of arbitrator. There is no dispute
    that the compensation was accepted. It is for the respondents to establish     H
                                        831
    832                  SUPREME COURT REPORTS [1995) SUPP. 3 S.C.R.

A   that it was accepted under protest. These facts have not been established
    by the respondents. (834-E-F]

          3. There had been no delay on the part of the Government in
    referring the matter to an arbitrator. It has not been stated by the
    respondents that they had demanded appointment of an arbitrator, when
B   they found that the compensation amount was inadequate. No letter or any
    other document has been annexed to the writ petition or produced before
    this Court in support of the case of the respondents. (834-G-HJ

          CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 8435-36
    of 1995.
c
         From the Judgment and Order dated 5.4.90 of the Punjab & Haryana
    High Court in L.P.A. No. 250-251 of 1990.

          N.N. Goswamy, W.A. Qadri and C.V.S. Rao for the Appellants.
D
          R.C. Pathak for the Respondent Nos. 2-5.
                                                                                 {
          The Judgment of the Court was delivered by

          SEN, J. Special leave granted.
E
          This is a case of acquisition of land under the Requisitioning and
    Acquisition of Immovable Property Act, 1952. The short question that falls
    for determination is whether the arbitrator had erred in enhancing the
    amount of compensation to the flat rate of Rs. 300 per Marla and awarding
    solatium @30% per annum and interest @9% per annum for the first year
F   and thereafter 15% per annum for the subsequent years from the date of       ,
    possession of the property.

          Land measuring 26.08321 acres in village Daulatpur, Tehsil
    Pathankot, District Gurdaspur was acquired under the Requisitioning and
G   acquisition of Immovable Property Act, 1952 by the Special Land Acquisi-
    tion Collector by a notification issued on 30th October, 1969. The com-
    petent authority awarded compensation for the acquired land @ Rs. 60 per
    Marla. After a long lapse of time, the question of compensation was
    referred to an arbitrator.

H         Mr. Goswami, on behalf of the appellants, has argued that there was
                    U.0.1. v. ATAIB SINGH [SEN,J.]                 833

no dispute as to the quantum of compensation between the respondents A
and the appellants and the compensation was actually paid to the respon-
dents and the respondents duly accepted the compensation without any
protest. Under Rule 9 of the Requisitioning and Acquisition of Immovable
Property Rules, 1953, the competent authority can pay compensation only
after entering into an agreement in Form-K. Mr. Goswami has contended
                                                                         B
that in the instant case, compensation was paid. There was no dispute as
to the quantum of compensation. An agreement in Form-K was entered
into with the respondents before payment of the compensation.

       However, there is no averment in the pleading that an agreement in
Form-K was entered into by and between the competent authority and the C
respondents. But, there is no dispute that eight years after compensation
was paid, the writ-petitioners raised the dispute as to the quantum of
compensation and made an application for referring the dispute to the
arbitrator. On 30th March, 1987, the Additional District Judge, Gurdaspur,
as arbitrator awarded compensation at flat rate of Rs. 300 per Marla. The D
arbitrator also awarded solatium @30% and interest @ 9% per annum for
the first year from the date of acquisition. i.e., 31.10.1969 and 15% per
annum for the subsequent years till the amounts were realised.

      Aggrieved by this award, the Government preferred appeals to the
High Court of Punjab and Haryana. The appeals were dismissed by a         E
Single Judge of the High Court on 30th July, 1987. Further appeals were
filed before the Division Bench of the High Court. Those appeals were
dismissed on 5th April, 1990.

       These Special Leave Petitions were moved in this Court on 21st F
December, 1990. The dispute before this Court is not about the quantum
of the compensation fixed by the Additional District Judge as arbitrator on
30th March, 1987. Notice was issued only on the question of solatium and
interest. Mr. Goswami, on behalf of the appellants, has contended that
there is no basis for granting solatium at 30% and interest at 9% for the
first year and 15% for the subsequent years. He has pointed out that the G
Government was not at fault in this case for the delay in appointment of
the arbitrator. Since the compensation amount fixed by the Special Land
Acquisition Collector had been accepted without any dispute, there was no
scope for referring any dispute to an arbitrator under Section 8(1)(b) of
the Act. Therefore, the Government should not be held responsible for the H
    834                   SUPREME COURT REPORTS [1995] SUPP. 3 S.C.R.

A delay in the instant case.                                                         f   I




           The contention on behalf of the appellant will have to be upheld in
    the facts of this case. Unlike the Land Acquisition Act, there is no
    provision in the Requisitioning and Acquisition of Immovable Property Act
    for payment of solatium and interest. Solatium and interest have been
B   awarded in the interest of justice in certain cases. But in the absence of
    special circumstances, such award of interest and solatium cannot be
    justified under the provisions of the Requisitioning and Acquisition of
    Immovable Property Act.

C         On behalf of the respondents, Mr. R.C. Pathak has drawn our
    attention to a judgment of this Court in the case of Union of India v. Hari
    Krishan Khosla, (1992) 2 SC No. 621. This was also a case under Requisi-
    tioning and Acquisition of Immovable Property Act, 1952. The ultimate
    decision in this case goes against the contention of Mr. Pathak. In S.L.P.
D   (C) No. 1780/1991, the award of 15% solatium and 6% interest on en-
    hanced compensation was set aside. In C.A. No. 4688-94/1989 and C.A.
    No. 2674-85/1989, award of solatium and interest was upheld because no
    arbitrator was appointed for a period of sixteen years.

          In the instant case, it has not been established on behalf of the
E   respondents that there was any delay in the appointment of arbitrator on
    the part of the appellant. There is nothing to show that the respondents
    had demanded appointment of arbitrator or had disputed the amount of
    compensation paid by the Special Land Acquisition Collector. It is true
    that arbitrator was ultimately appointed at the instance of the respondent.
F   But there is nothing to indicate that the respondents had earlier disputed
    the amount of compensation or had demanded appointment of arbitrator.
    There is no dispute that the compensation was accepted. It is for the
    respondents to establish that it was accepted under protest. These facts
    have not been established by the respondents.

G          It is true, in the instant case, there had been no delay on the part of
    the Government in referring the matter to an arbitrator. It has not been
    stated by the respondents that they had demanded appointment of an
    arbitrator, when they found that the compensation amount was inadequate.
    No letter or any other document has been annexed to the writ petition or
H   produced before this Court in support of the case of the respondents.
                      U.0.1. v. AJAIB SINGH [SEN, J.]                    835

      Therefore, we are of the view that in the facts of this case, the         A
arbitrator was in error in allowing solatium and interest without coming to
a decision as to the existence of any dispute and the failure of the Govern-
ment to refer the matter to an arbitrator. The appeals, therefore, are partly
allowed. The order relating to payment of solatium and interest is set aside.
There wi. · t....,, no order as to costs.
                                                                                B
G.N.                                                Appeals partly allowed.