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1996 Supreme(Online)(SC) 7

SUPREME COURT
*K. Ramaswamy, B. L. Hansaria, Sujata V. Manohar, JJ.
Prem Nath Kapur and Another v. National Fertilizers Corpn. of India Ltd. and Others
Civil Appeal



The right to compensation arises on land vesting with the State, while its quantification may occur later, with interest payable until deposited.

Headnote:(A) Land Acquisition Act, 1894 - Sections 4(1), 18, 23(1), 23(2), 23(1A), 28, 31, 34, 53, 60 - Compensation for land acquisition - Issue of interest on compensation amount and the method of appropriation of amounts awarded and principles laid down - Compensation must also consider severance in determining just compensation - The right to compensation arises upon land vesting with the State, while its quantification may involve delays through hierarchical judicial processes. (Paras 3, 11, 13, 16)

Table of Content
1. compensation quantification and severance of land determine just value. (Para 2)
2. owner can claim compensation adjustments for interest and costs. (Para 3 , 4)
3. liability to pay interest is tied to each relevant section's specifics. (Para 5 , 10)
4. appropriation rights must adhere to distinct components of compensation. (Para 12 , 16)
5. final ruling that appeals were dismissed. (Para 18)

1. Leave granted.

2. Notification under S.4(1) of the Land Acquisition Act, 1894 (for short, "the Act") acquiring large track of land including the land belonging to the appellants, was published on February 5, 1973. On October 9, 1975, the Collector made his award determining compensation @ Rs. 10,080 per acre. On reference under S.18, the Civil Court, by award and decree dated January 2, 1979, confirmed the award of the Collector. In another reference of the cosharers, the District Judge by his award and decree dated January 24, 1980 enhanced the compensation. On further revision, the High Court by order dated May 23, 1983 determined the compensation @ Rs. 24,000 per acre while dismissing the appeal of the respondent-Corporation. On January 9, 1975, after the award was made, the Collector paid the compensation including solatium and interest determined thereon. After the High Court enhanced the compensation in revision, the same was deposited on January 14, 1984. It is not necessary to dilate but suffice it to mention that the appellants by way of revision claimed compensation for damages for severance of other lands from acquired land as provided under clause thirdly of S.23(1). In another revision, the appellants claimed solatium and interest on demands for severance of the lands which was also granted by the High Court. In yet another revision, the High Court enhanced solatium and interest and additional amount under S.23(2), 28 and 23(1A) as amended by Act 68 of 1984. The appellants laid execution, firstly, after appropriating the amount received towards costs, then towards interest on the total compensation and solatium and then for compensation in respect of the lands. Executing Court granted the relief, but the High Court in revisions set aside the order dated March 11, 1987 in Civil Revision No. 3814 of 1986 and directed the Executing Court to dispose of the matter in the light of the law laid down therein. Thus these appeals by special leave. Another Bench of this Court issued notice suo motu on the amounts awarded towards severance charges, interest and solatium thereon and additional benefits under the Amendment Act.

3. Shri Pankaj Kalra, learned Counsel for the appellants contended that the present controversy having been concluded by a recent judgment of this Court in Mathunni Mathai v. Hindustan Organic Chemicals , is no longer res Integra. He further contended that the appellants are entitled to appropriate the costs from the principal amount of compensation, then towards interest on total amount of compensation from the date of taking possession till date of payment as determined by the Collector as well as the High Court. The hierarchy of courts would determine the compensation after considerable delay and the owner or interested person is entitled to be compensated for loss in value of their land. On determination thereof, the State as judgment debtor is liable to restitute the owner with just compensation by way of principal amount and interest accrued thereon. The owner of the land as judgment creditor is entitled to appropriate the principal amount deposited by the Collector, in the first instance, towards costs, then towards interest on total amount and the balance amount and interest accrued thereon is entitled to be recovered in execution. Therefore, the High Court was not right in holding that the appellants were entitled to the interest only from the respective dates of the award of the Collector or the orders of the court. The direction not to appropriate the amount deposited by the Collector fi















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