Abhay
Singh Surana & Ors Vs. Secretary Ministry of Communication & Ors [1987]
INSC 221 (19 August 1987)
MUKHARJI,
SABYASACHI (J) MUKHARJI, SABYASACHI (J) OZA, G.L. (J)
CITATION:
1987 AIR 2177 1987 SCR (3)1045 1987 SCC (4) 273 JT 1987 (3) 444 1987 SCALE
(2)400
ACT:
Interest
on the amount awarded by Arbitrator for requisition of premises under
Requisitioning and Acquisition of Immovable Property Act, 1952--Entitlement of.
HEADNOTE:
This
appeal by special leave was confined solely to the question of entitlement of
interest on the amount awarded by the Arbitrator for the requisition of the
premises under the Requisitioning and Acquisition of Immovable Property Act,
1952.
Disposing
of the appeal, the Court,
HELD:
The principles upon which the compensation on this aspect is payable are by now
well-settled. This Court reiterated the principles in Satinder Singh and Ors.
v. Amrao Singh and Ors., [1961] 3 SCR 676 at 694; National Insurance Co. Ltd.
Calcutta v. Life Insurance Corporation of India-[1963] Supp. 2 SCR 971 at 992
and Hirachand Kothari (dead) through Lrs. v. State of Rajasthan & Anr.,
[1985] Suppl.1 SCR 644 at 655. [1046F; 1048C] In the light of the aforesaid decisions,
the Court was of the opinion that the appellants herein were entitled to the
interest for the period from March 1975 to the 31st July, 1987, when the
principal amount of compensation had been paid and/or when the premises in
question had been derequisitioned and handed back to the owner, on the amount
awarded. The Court was of the opinion that for the period from March 7, 1975 to
February 28, 1985 being the date on which the judgment of the High Court was
pronounced in this case, the appellants were entitled to the interest on the
amount awarded at the rate of 6 per cent per annum, and for the period from
August 8, 1985 to July 31, 1987--for that period only--at the rate of 12 per
cent per annum. The interest would be payable only on the balance amount which
remained to be paid to the appellants i.e. the amount due minus what had been
paid from the respective dates. The Court directed that the amount be paid by
the respondents within three months from the date of this judgment, and that in
case there was any difficulty in calculating the amount, the 1046 parties would
be at liberty to apply to the High Court.
[1048C-H]
Satinder Singh & Ors. v. Amrao Singh & Ors., [1961] 3 S.C.R. 676;
National Insurance Co. Ltd. Calcutta v. Life Insurance Corporation of India,
[1963] Supp. 2 S.C.R. 971 at 992; Hirachand Kothari (dead) through Lrs. v.
State of Rajasthan & Ors., [1985] Supp. 1 S.C.R. 644 and Inglewood Pulp and
Paper Co. Ltd. v. New Burnswick Electric Power Commission, A.I.R. 1928 Privy
Council 287, referred to.
Civil
Appellate Jurisdiction: Civil Appeal No. 859 of 1987.
Shankar
Ghosh and L.P.Aggarwal for the Appellants From the Judgment and order dated
8.8. 1985 of the Calcutta High Court in Appeal No. 329 of 1982.
V.C.
Mahajan, B. Parthasarhti and C.V. Subba Rao for the Respondents.
The
Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This appeal by
special leave is confined solely to the question of interest. In other words,
the entitlement of interest on the amount awarded by Arbitrator for the
requisition of the premises under the Requisitioning and Acquisition of
Immovable Property Act 1952 is the issue. The principles upon which the
compensation on this aspect is payable are by now well settled. In Satinder
Singh & Ors. v. Amrao Singh & Ors., [1961] 3 SCR 676 this Court
reiterated the principles at page 694 of the report as follows:
"In
Inglewood Pulp and Paper Co. Ltd. v. New Burnswick Electric Power Commission
[1928] A.C. 429 it was held by the Privy Council that "upon the
expropriation of land under statutory power, whether for the purpose of private
gain or of good to the public at large, the owner is entitled to interest upon
the principal sum awarded from the date when possession was taken, unless the
statute clearly shows a contrary intention. ": Dealing with the argument
that the expropriation with which the Privy Council was concerned was not
effected for private gain, but for the good of the public at large, it observed
"but for all that, the owner is 1047 deprived of his property in this case
as much as in the other, and the rule has long been accepted in the
interpretation of statutes that they are not to be held to deprive individuals
of property without compensation unless the intention to do so is made quite
clear. The right to receive the interest takes the place of the right to retain
possession and is within the rule". It would thus be noticed that the
claim for interest proceeds on the assumption that when the owner of immovable
property loses possession of it, he is entitled to claim interest in place of
right to retain possession. The question which we have to consider is whether
the application of this rule is intended to be excluded by the Act of 1948, and
as we have already observed, the mere fact that section 5(3) of the Act makes
s. 23(1) of the Land Acquisition Act, 1894 applicable we cannot reasonably
infer that the Act intends to exclude the application of this general rule in
the matter of the payment of interest. That is the view which the Punjab High
Court has taken in Surjan Singh v. The East Punjab Government, (AIR 1957 Punj.
265) and we think rightly." The same principle was reaffirmed not in the
context of Acquisition of Immovable Property, which Mr. Mahajan, learned
counsel for the respondents tried to make a point before us, was highlighted in
National Insurance Co. Ltd.
Calcutta
v. Life Insurance Corporation of India, [1963] Supp. 2 SCR 971. at 992 where
speaking for the court Mr. Justice Hidayatullah, as learned Chief Justice of
India then was observed:
"The
reason of the rule was stated a long time ago by Lord St. Leonard L.C. Birch v.
Joy, [1852] III H.L.C. 565:10 E.R. 222 as follows:
"The
parties change characters, the property remains at law just where it was, the
purchaser has the money in his pocket, and the seller still has the estate
vested in him; but they exchange characters in a Court of Equity, the seller
becomes the owner of the money and the purchaser becomes the owner of the
estate." On entering possession the purchaser becomes entitled to the
rents but if he has not paid the price, interest in equity is deemed payable by
him on the purchase price which 1048 belongs to the seller. This principle was
applied by the House of Lords in cases of compulsory purchases. In Swift &
Co. v. Board of Trade, [1925] A.C. 520 Viscount Cave L.C.
gave
the reason that the practice rests upon the principle that the taking of
possession is an implied agreement to pay interest which was stated by Sir
William Grant M.R. in Fludyer v. Cocker, [1805] 33 E.R. 10. This principle was
further extended by the Privy Council to the compulsory taking over of a
business as a going concern in International Railway Co. v. Niagara Parks
Commission, [1944] A.C. 328.
It
was noted by Justice Hidayatullah that this principle has also been accepted by
this Court in Satinder Singh v. Amrao Singh (supra). The principle stated was
followed in Hirachand Kothari (dead) through Lrs. v. State of Rajasthan &
Anr., [1985] Suppl. 1 SCR 644 where this court noted the principle at page 655
of the report.
In
the light of the aforesaid decision we are of the opinion that the appellants
herein are entitled to the interest for the period from March 1975 to 31st
July, 1987 when principal amount of compensation had been paid and or when the
premises in question had been de-requisitioned and handed back to the owner, on
the amount awarded. As to how the interest would vary, but the right of
interest was well averred and also should have been considered in the light of
the observations of Privy Council in Inglewood Pulp and Paper Co. Ltd. v. New
Burnswick Electric Power Commission, AIR 1928 Privy Council 287. We are of the
opinion that from the period from March 7, 1975 to February 28, 1985 being the
date on which the judgment of the High Court was pronounced in this case the
appellants are entitled to the interest on the amount awarded at the rate of 6%
per annum and from the period from August 87 1985 to July 31, 1987 and for that
period only at the rate of 12% per annum. Interest will be payable only on the
balance amount which remained to be payable to the appellants i.e. the amount
due minus what has been paid from the respective dates. The appellants are
entitled to the costs of this appeal.
The
amount is directed to be paid within three months from this date by the
respondents. In case, there is any difficulty in calculating the amount, the
parties will be at liberty to apply to the High Court of Calcutta. The
appellants are entitled to costs of this appeal. The appeal is thus disposed
of.
S.L.
Appeal disposed of.
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