Interest on interest is not permissible under the Land Acquisition Act.

B. SUBHASHAN REDDY, J.

( 1 ) WHILE in the contempt case, the complaint is that the order dated 10-3-1992 ssed by this Court in W. A. No. 1661/87 has not been complied with and that an amount of Rs. 8,92,046-12 as claimed by the petitioners as due and payable to them in view of the above judgment is not paid within the stipulated time and even after long lapse of the same, rendering the contemnors for action for contempt, the contemnors hae filed a petition for clarification in W. A. M. P. No. 1460/93 stating that the calculation made by the petitioners in the contempt case is wrong and erroneous and sought to clarify the order dated 10-3-1992 refuting the claim that the amount as claimed by the petitioners in contempt case as baseless. For clarity, we refer the petitioners in contempt case as writ appellants and the contemnors as respondents.

( 2 ) WE have perused the calculation memo filed both by the writ appellants and the respondents. The writ appellants have filed a fresh calculation memo dated 23-7-1993 claiming the amount due and payable as Rs. 4,82,907-75 ps. by giving credit to the payment of Rs. 4,47,993-00 made by the respondents on 29-12-1992. The respondents have filed a calculation memo admitting the amount due and payable to the writ appellants only of Rs. 27,183-00.

( 3 ) THE award was passed in two phases; one barely for market value, additional compensation and solatium amounting to Rs. 4,43,155-70 ps. and the latter one for Rs. 7,97,631-50 ps. Out of the amount of Rs. 7,97,631-50 ps. , the compensation component is Rs. 4,43,155-70 ps. while the interest component is Rs. 3,54,475-80 ps. The interest component is calculated for the period from 6-6-1980 to 5-6-1981 at the rate of 9% per annum being the first year and at the rate of 15% per annum from 6-6-1981 to 28-2-1986. It is needless to mention that this interest component is calculated on the principal compensation amount of Rs. 4,43,155-75 ps. which includes market value under Section 23 (1), additional compensation at the rate of 12% on the market value under Section 23 (1-A) and solatium at 30% under Section 23 (2) of the Land Acquisition Act, 1894, as amended by Central Act 68 of 1984. But the said amount of Rs. 7,97,631-50 ps. was not paid in entirety as awarded. An amount of Rs. 4,50,000/- was paid on 29-2-1988. In fact, as on that date, the amount due and payable was Rs. 9,30,578-20 ps. , the break-up figures of which are as mentioned below: market value, additional compensation and 30% solatium rs. 4,43,155-70 interest @ 9% per annum from 6-6-1980 to 5-6-1981 rs. 39,884-00 interest @ 15% per annum from 6-6-81 to 21-2-88 rs. 4,47,538-50 total rs. 9,30,578-20 deducting market value of Rs. 4,43,155-70 ps. from this, the interest which was payable as on that date i. e. , 29-2-1988 was Rs. 4,87,422-50 ps. From this date onwards, we assume jurisdiction in equity. As is evident from the calculation submitted by the writ appellants, interest @ 15% is claimed on the amount inclusive of 15% interest. If that is permitted, it amounts to compound interest. Payment of such compound interest is impermissible under law. The Land Acquisition Act contemplates payment of interest at the specified rates as mentioned above, but does not contemplate payment of interest on interest. It is not a loan from any financial institution to add-up interest into principal at quarterly rests or yearly rests, as the case may be and then again levy interest. What the Act contemplates is the payment of interest @ 9% for the first year and @ 15% for the subsequent years on the delayed payment of compensation. It is beyond pale of any doubt that while the award was passed on 3-10-1986, the compensation amount was paid only on 29-2-1988. Even as on the date of passing of the award, Rs. 7,97,631-50 ps. was payable. That having not been paid, only a partial amount of Rs. 4,50,000/- was paid on 29-2-1988 on which date the amount due and payable was Rs. 9,30,578-20 ps. as clearly mentioned

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