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2007 Supreme(SC) 515

SUPREME COURT OF INDIA
C.K. THAKKER & LOKESHWAR SINGH PANTA
SPECIAL DEPUTY COLLECTOR (LAND ACQUISITION), GENERAL, HYDERABAD - PETITIONER
Versus
B. CHANDRA REDDY & ORS - RESPONDENT
Appeal (civil) 6063-6064 of 2000
Decided on 16/04/2007

The Court held that it will not exercise discretionary jurisdiction under Article 136 to set aside an arbitral award granting solatium and interest if such award has attained finality and the public authority failed to comply, emphasizing equity in favor of the claimants.

Headnote:(A) Requisitioning and Acquisition of Immovable Property Act, 1952 - Sections 8 and 11 - Land Acquisition Act, 1894 - Constitution of India - Articles 14 and 136 - Compensation for land acquisition - Award of solatium and interest by Arbitrator - Whether solatium and interest can be granted under the 1952 Act when not expressly provided - General principle that the act of taking possession of immovable property implies an agreement to pay interest unless the statute indicates otherwise - Discretionary jurisdiction under Article 136 of the Constitution should not be exercised to interfere with an award that has attained finality, particularly where the public authority failed to comply with the award and equity favors the claimants. (Paras 15-18, 24-26)

(B) Exercise of discretionary power - In cases where a public authority ignores a final arbitral award and the claimants are forced to approach the court for execution, interference with the orders of the High Court is not warranted if the award was not challenged in the appropriate forum. (Paras 24-26)

Facts of the case:
Land-owners rejected the compensation offered by the competent authority for land requisitioned for defense purposes. An Arbitrator subsequently awarded a higher compensation amount, including solatium and interest. The appellant failed to pay the awarded amount, leading the claimants to approach the High Court. The High Court directed the appellant to comply with the award. This direction was upheld by a Division Bench of the High Court, which dismissed the appellant's appeal on the grounds of delay and merits.

Findings of Court:
The Court found that the award passed by the Arbitrator had attained finality as it was never challenged by the land acquisition officer. While the legality of granting solatium and interest under the 1952 Act was debated, the court decided that equity favored the claimants who had been deprived of their compensation for years.

Issues: Whether the Arbitrator under the Requisitioning and Acquisition of Immovable Property Act, 1952 has the jurisdiction to grant solatium and interest and whether the appellate court should interfere with a final award under Article 136 of the Constitution.

Ratio Decidendi: The Court ruled that when an arbitral award has attained finality and a public authority fails to comply with it, it is not a fit case to exercise discretionary jurisdiction under Article 136 of the Constitution to set aside the payment of solatium and interest, as the equity of the situation justifies the award.

Result: Appeals dismissed with costs.

Legal Category Hierarchy

  • administrative law
    • land acquisition
      • compensation
    • requisitioning of immovable property
  • constitutional law
    • supreme court jurisdiction
      • article 136
    • fundamental rights
      • right to equality
  • practice and procedure
    • arbitration
    • writ jurisdiction
    • appeals

JUDGMENT

C.K. THAKKER, J.

Present appeals are filed against the judgment and order passed by the Division Bench of the High Court of Andhra Pradesh on April 12, 1999 in Writ Appeal M.P. No. 1001 of 1995 and W.A.S.R. No. 38345 of 1995 by which it confirmed the order passed by the learned Single Judge on January 27, 1995 in Writ Petition No.12016 of 1993 directing the appellant herein to comply with the award passed by an Arbitrator appointed under the Requisitioning and Acquisition of Immovable Property Act of 1952 (hereinafter referred to as "the Act"). The facts giving rise to the present appeals are that the respondents-claimants were the owners of the land bearing Survey No 83 admeasuring 12 acres and 5 gunthas and Survey No. 86/2 admeasuring 12 acres and 30 guntas, situated at Devarayamzal Village, Medchal Mandal, Rangareddy District of Andhra Pradesh. The land was initially requisitioned for defence purpose, i.e. for the purpose of extension of rifle range of Hakimpet Airfield, EMC Centre, Secunderabad. The Competent Authority thereafter initiated proceedings for acquisition of land and by an award dated February 6, 1978, offered compensation to the respondents-land-owners at the rate of Rs. 4000/- per acre. The respondents-land-owners did not accept the amount of compensation as offered by the Competent Authority under the Act and the case was referred to an Arbitrator under the Act. Arbitration Case No. 1 of 1988 was registered. The parties were granted an opportunity to adduce evidence and finally by an award dated November 13, 1991, the learned Arbitrator awarded an amount of Rs. 9000/- per acre to the land-owners. Over and above the amount of compensation, the Arbitrator also awarded solatium @ 30% per annum and interest @ 6% per annum. The amount was not paid by the appellant to the claimants. The claimants, in the circumstances, were constrained to approach the High Court by filing Writ Petition No. 12016 of 1993 for issuing appropriate directions to the authorities to pay the amount awarded by the Arbitrator. By an order dated January 27, 1995, a Single Judge of the High Court issued necessary directions as prayed by the claimants and ordered the authorities to pay the amount within sixty days. Writ Appeal filed by the appellant before the Division Bench of the High Court was dismissed on the ground of delay as also on merits. The said decision has been challenged by the appellant in this Court.On February 14, 2000, when the matter was placed for admission - hearing, a two-Judge Bench issued notice limited to solatium and interest and the following order was passed "Issue notice on SLP restricted to solatium and interest. Notice will also issue on application for condonation of delay. Ld. counsel is permitted to file a copy of grounds of appeal in the CMA which is pending in the High Court. There is no stay in respect of the other amount covered by the award.

"On October 9, 2000, leave was granted. The matter was placed for final hearing before us on January 23, 2007. We heard the matter for some time and passed the following order We have heard learned counsel for the parties for some time. It was stated by learned counsel for the appellant that aggrieved by the Award passed by the Arbitrator under Section 8 of the Requisitioning & Acquisition of Immovable Property Act, 1952 (hereinafter referred to as the act), the appellant has preferred an appeal under Section 11 of the said Act and it is pending in the High Court of Andhra Pradesh at Hyderabad. He prays for some time so as to enable him to produce a copy of the Memorandum of Appeal as well as the latest status of the said appeal. Two weeks time is granted for the purpose. List the appeals thereafter." As per our direction, the Registry placed the matter on Board on February 13, 2007. We observed on that day that on January 23, 2007, when the matter was called out for final hearing, a statement was made that an appeal was filed against the award













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