Judgment

THOMAS, J.

( 1 ) THE question referred to this Bench of five-Judges is a simple one. Is the State liable to pay interest on the amount envisaged under S. 23 (2) of the Land Acquisition Act, 1894 (for short the Act) ? The sum contemplated in the aforesaid sub-section can conveniently be called "solatium" as that expression has been used plentifully in almost all land acquisition proceedings in India. The reference of the aforesaid question to this larger Bench was necessitated on account of a seeming conflict as between the decision of a three-Judge Bench of this Court in Union of India v. Shri Ram Mehar (1973) 1 SCC 109 : on the one hand and a few later decisions of co-equal Benches of this Court on the other hand. (AIR 1973 SC 305)

( 2 ) THE power of granting interest on the sums involved in land acquisition proceedings is endowed in two provisions of the Act. Section 34 enjoins on the Collector to pay interest at two tier rates. For the first state, from the date of taking possession until disbursement of the awarded amount the rate is 9% per annum. If such disbursement is delayed beyond one year the rate of interest would escalate to 15% per annum from the date of expiry o