JUDGMENT

Sudhansu Jyoti Mukhopadhaya, J.:-This appeal has been preferred by the appellant-landlord against the judgment & order dated 6th August, 1999 passed by the Division Bench of the High Court of Karnataka in Writ Appeal No. 8110/1996 whereby the Division Bench rejected the prayer for interest on amount of compensation w.e.f. 1st March, 1974 and thereby affirmed the order passed by the learned Single Judge but held that the appellant-landlord is entitled for interest w.e.f. 1st March, 1984.

2. The appellant was the owner of the land bearing R.S. No. 16/1, measuring 7 acres 21 guntas in village-Examba, Taluka Chikodi, Karnataka. The land in question was vested with the State for grant in favour of the tenant w.e.f. 1st March, 1974 under Section 44 of the Karnataka Land Reforms Act, 1961 as amended by Act No.1 of 1974 (hereinafter referred to as the ‘Act’).

3. The Tehsildar, Chikodi under Section 48A(7) and Section 53 heard the appellant-landlord and the tenant and determined the quantum of amount payable at Rs. 17,244/- vide order dated 28.2.1983. It was held that a sum of Rs. 2,000/- is to be paid as first instalment within 30 days from the date of the receipt of the order and the balance in 19 equated annual instalments with interest @ 5½% as indicated therein. The compensation amount was paid to the appellant in between the years 1983-1985 but without any interest. In this background, the appellant moved in the Court of Special Tehsildar, Chikodi with an application that his 1/3rd share in the house and well situated in RS No. 16/1 of Examba village vested with the State therefore he claimed interest on the compensation amount @ 5½% per annum w.e.f. 1st March, 1974 till the payment of the entire amount. The details of amount of compensation, the amount of interest acquired on the compensation amount, the amount paid to the appellant and the amount as was due to him on 25th May, 1988 were shown in the representation. The appellant claimed a sum of Rs. 19,116.37. The Special Tehsildar, Chikodi vide letter dated 7th June, 1988 rejected his prayer and informed that as per Circular No. RD 171:LRM-86 dated 24.11.1986 interest has to be paid on the amount paid through the National Savings Certificate and, therefore, no interest is payable on the amount received in cash.

4. The order of rejection was challenged by the appellant by filing a writ petition no. 18591/88 before the Karnataka High Court; a prayer was made to direct the respondents to pay interest for delayed payment w.e.f. 1.3.1974. The Circular dated 24.11.1986, was also challenged by the appellant, as the same was referred to reject his claim. The learned Single Judge by his judgment held that no interest is payable towards the amount paid in cash. It was further held that interest @5 ½% is payable, if the compensation amount is paid through National savings certificates. On challenge, the Division Bench of the High Court upheld the order passed by learned Single Judge but held that in the facts and circumstances of the case the appellant is entitled for interest w.e.f. 1st March, 1984.

5. Learned counsel for the appellant contended that the examples cited in Circular dated 24.11.1986 is illegal and contrary to the provisions of the Act and the clarification given therein. He secondly contended that the tenanted lands having vested with the State w.e.f. 1st March, 1974, the owners of the land cannot be deprived of the interest on compensation amount for which they are entitled from the date the principal amount become due. He thirdly contended that once the amount of compensation payable is determined in respect of the delayed payment then the land owner is also entitled to the interest amount even if the principal amount is paid in cash. It was also contended that when Circular dated 24.11.1986 itself makes it clear for investment of the amount which shall carry interest @ 5½%, there is no bar as such either under the Act or the Rules to deprive the land-owner f