Interest on solatium is permissible, but calculating interest on that interest is against legal principles.

JUDGMENT :

Tirumala Devi Eada, J.

This appeal, under Section 54 of the LAND ACQUISITION ACT , 1894, (for short ‘the Act’) is preferred by the Special Deputy Collector, L.A.Cum Loc Unit, SRSP, Pochampad, aggrieved by the order and decree dated 27.06.2008 passed in O.P.No.1619 of 2004 by the learned District Judge at Nizamabad (hereinafter referred to as ‘the reference Court’).

2. For convenience and clarity, the parties herein are referred to as they were arrayed before the reference Court.

3. The facts of the case in brief are that the Government has acquired house sites, structures etc., in Donkeshwar Village of Nandipet Mandal, Nizamabad District for Pochampad Project. A draft notification under Section 4(1) of the Act was published in A.P.Gazette on 13.06.1974.

4. The case of the claimants is that they are residents of Donkeshwar village of Nandipet Mandal and the house sites, structures, drinking water wells etc., situated in Donkeshwar village were acquired by the Land Acquisition Officer and that dissatisfied with the meager amount of compensation, some people from their village filed protest application under Section 18 of Act and the matter was referred to the Court of Additional District Judge, Nzamabad in O.P.No.216 of 1990 and that after due enquiry, the Additional District Judge, Nizamabad has enhanced the compensation and also has awarded solatium and interest on the enhanced amount vide judgment and decree dated 31.12.1993. Aggrieved by the said award, the Land Acquisition Officer has preferred an appeal in A.S.No.343 of 1994 which was dismissed by the High Court on 15.09.1999.

5. The claimants in the present case who have not availed to file protest application under Section 18 of the Act have approached the Land Acquisition Officer under Section 28 -A and requested him to re-determine the compensation for their acquired properties, in terms of the above said order of the Additional District Judge, Nizamabad. Finally, the Land Acquisition Officer has passed an award No.C2/1912/99 dated 10.10.2003 calculating the interest @ 6% p.a. from 11.04.1975 to 30.04.1982 and @9% p.a. from 01.05.1982 to 30.04.1983 and thereafter from 01.05.1983 to 10.09.2003 on market value, which is illegal and contrary to law and that the Land Acquisition Officer has arbitrarily calculated the interest on the market value, that is the lesser interest only up to 10.09.2003 though he passed the award on 10.10.2003 and that the cheques were honoured by the bank on 08.01.2004 and thus, the Land Acquisition Officer ought to have calculated the interest from 11.04.1975 to 10.04.1976 @ 9% per annum and @ 15% per annum from 11.04.1976 to 08.01.2004 and not up to 10.09.2003. Thus, their application was referred to the District Judge, Nizamabad.

6. The reference Court has framed the following issues for adjudication:

“1. Whether the claimants are entitled for payment of interest on solatium?

2. Whether the claimants are entitled for payment of interest both on market value and solatium from 11.04.1975 to 08.01.2004 and further interest @ 12% on different total amount payable as equitable interest?”

7. At the time of trial, PW1 was examined and Exs.A1 to A5 were marked on behalf of the claimants and on behalf of the respondents, RW1 was examined and Ex.B1 was marked.

8. Based on the evidence on record, the reference Court has ordered to pay the interest on solatium as per the orders in O.P.No.216 of 1990 and also directed to calculate and pay the interest on the market value and solatium from 11.04.1975 to 08.01.2004 and further interest @ 12% per annum on total amount payable as equitable interest. Aggrieved by the said award, the appeal is preferred by the Special Deputy