The claimant is not entitled to any amount over and above the amount due to him under the provisions of the Land Acquisition Act, and the interest received by the State Government on the deposit made in the nationalized bank is State property.

Headnote:
Land Acquisition Act - Interest on Deposit - Order XXI Rule 1 CPC
Fact of the Case:

The case involved a dispute over the interest accrued on the amount deposited by the State Government in a nationalized bank during the pendency of a land acquisition appeal.
Finding of the Court:

The court held that the claimant was not entitled to any amount over and above the amount due to him under the provisions of the Land Acquisition Act. The court also emphasized that the interest received by the State Government on the deposit made in the nationalized bank is State property for which the claimant cannot lay any claim.
Issues: The main issue was whether the claimant was entitled to the interest accrued on the amount deposited in a nationalized bank during the pendency of the land acquisition appeal.
Ratio Decidendi: The court ruled that the claimant was not entitled to any amount over and above the amount due to him under the provisions of the Land Acquisition Act. The court also clarified that the interest received by the State Government on the deposit made in the nationalized bank is State property for which the claimant cannot lay any claim.
Final Decision: The court allowed both the appeals and set aside the judgment of the learned single Judge. The contempt case was dismissed, and the claimant was advised to take up the matter of interest on solatium before the appropriate authority.

Judgment :-

Radhakrishnan, J.

Both these appeals and contempt case arise out of the judgment in OP. 19470 of 2000. Original petition was preferred by the first respondent in WA. 2706 of 2000 for a writ of mandamus directing the State and others to release an amount of Rs.5,51,785/- together with bank interest from 29-6-1999 and also for a writ of certiorari to quash Exts.P11 and P12 letters. Learned single Judge allowed the writ petition and directed the State Government to release the amount claimed by the writ petitioner.

2. State Government initiated proceedings under the Kerala Land Acquisition Act for acquiring 103 acres of land for the purpose of Cochin Export Processing Zone, which is an instrumentality of the Government of India, Ministry of Commerce. Proceedings were initiated against various land owners including the writ petitioner. Award No.3786 dated 25-2-1986 was passed by the land acquisition officer in favour of the claimants in the instant case for acquisition of 87.33 ares of land at the rate of Rs.11,000/- per are. Dissatisfied by the amount awarded by the Land Acquisition Officer first claimant filed an application under Section 18 if the Land Acquisition Act seeking reference to the Sub Court, Ernakulam. Reference was numbered as LAR. No.440 of 1988. Sub court, Ernakulam enhanced the land value at the rate of Rs.21,004/- per are. State of Kerala aggrieved by the judgment filed LAA. No.833 of 1994 before this court. State also filed various other connected appeals before this Court.

3. Government of India, requisitioning authority, during the pendency of the appeals, released money to the State Government in order to meet generally the demands for compensation and other expenses. Money released by the Government of India was in the custody of the land acquisition department without accruing any interest. Claimants however, would get interest as per the provisions of the Land Acquisition Act. To meet a portion of the interest that is likely to accrue during the pendency of the appeal and also for other purposes it was felt that rather than keeping the money in the locker in the Treasury the amount released by the Government of India be put in a nationalized bank so as to bear maximum interest. State as such cannot deposit the money in a nationalized bank without getting special direction from the Government of India or direction from the court. State Government in consultation with the advocate General thought that it would be appropriate that a direction be obtained from the High Court to put the money in a nationalized bank so that, interests of State could be safeguarded. State of Kerala then filed CMP. 2425/95 in LAA. 833 of 1994 before this Court seeking permission of the court to deposit the amount in a nationalized bank. A Division Bench of this court of which one of us, K.S. Radhakrishnan, J. was a party, passed the following order on 23-6-1995;

“Government offers to deposit Rs.28,47,544/-. We permit the Government Pleader to put this amount in Fixed Deposit with a Nationalized Bank for such period as to accrue the maximum rate of interest. Until further orders are passed, no amount shall be withdrawn by the claimants.”

State Government deposited the amount in the Union Bank of India so as to accrue maximum interest. Land acquisition appeal 833 of 1994 was later heard and partly allowed reducing the land value awarded by the Sub Court, Ernakulam to Rs.17,297/- per are instead of Rs.21,001/- per are originally awarded by the land acquisition court.

4. State Government later passed an order dated 4-5-1999 according sanction for making payment of an amount of Rs.23,06,024/- for full satisfaction of the decree in LAR. 440 of 1988 of Sub Court, Ernakulam to the claimants. For releasing the said amount claimants filed application before the land acquisition officer. Government later found that petitioner is not entitled to get an amount of Rs.23,06,624/- but only an amount of Rs.17,54,839/- and therefore release

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Judicial Analysis