(Prayer: Civil Revision Petition under Article 227 of the Constitution of India against the order made in E.P.No.12 of 2010 in L.A.O.P.No.23 of 1994 dated 28.04.2015 on the file of the VI Assistant Judge, City Civil Court, Chennai.)
1. Challenging the order passed in E.P.No.12 of 2010 in L.A.O.P.No.23 of 1994 on the file of the VI Assistant Judge, City Civil Court, Chennai, the 2nd Judgment Debtor has filed the above Civil Revision Petition.
2. Heard Mr.S.T.S.Murthi, learned Additional Advocate General for the petitioner and Mr.R.Sivaraman, learned counsel for the 1st respondent.
3. The learned Additional Advocate General appearing for the petitioner submitted that the calculation adopted by the Executing Court is erroneous and that the Executing Court ought not have awarded interest on solatium as held by the Division Bench in the unreported judgment made in C.R.P.(NPD).Nos.617 to 623 of 2007 dated 28.11.2014, wherein the Division Bench of this Court held as follows:
20. The claim of the respondents that the amount could be paid even prior to the date of Sunder's case (19.09.2001) owning to pendency of Execution Petitions would certainly give a cause of action to claim interest from the date of decree. For the sake of argument, if the aforesaid submissions are taken into account, then the consequences on the interest on solatium will be a far-reaching one, having serious effect on the State exchequer. Therefore, the respondents' claim of pendency of Execution Proceedings could not be a factor to be reckoned in the instant case. Thus, in our considered opinion, taking note of the facts and circumstances of the case and by applying the true interpretation made by the Constitution Bench of the Hon'ble Supreme Court, finding that the claim of the respondents is not well founded, we are of the view that interest on solatium has to be applied only from the date of Sunder's case, viz., 19.09.2001 and not otherwise.
Further, the learned Additional Advocate General submitted that the Executing Court should have apportioned the amount awarded, first towards principal and then towards the interest.
4. Countering the submissions made by the learned Additional Advocate General, Mr.R.Sivaraman, learned counsel appearing for the 1st respondent submitted that the Executing Court has rightly calculated the interest and directed the Judgment Debtors to deposit the balance amount of Rs.36,75,129/-. Further, the learned counsel submitted that since the Reference Court had awarded interest on solatium, the claimant is entitled to claim interest on solatium. The learned counsel also submitted that the amount deposited by the Judgment Debtors should be first apportioned towards the interest and thereafter, to the principal.
5. In support of his contention, the learned counsel relied upon the following judgments:
(i) (2006) 8 Supreme Court Cases 457 [Gurpreet Singh Vs. Union of India] wherein the Constitution Bench of the Hon'ble Supreme Court of India has held as follows:
53. Thus, on the whole, we are satisfied that the essential ratio in the Prem Nath Kapur V. National Fertilizers Corporation of India Ltd., (1996) 2 SCC 71 : 1995 Supp (5) SCR 790 on appropriation being at different stages is justified though if at a particular stage there is a shortfall, the awardee-decree-holder would be entitled to appropriate the same on the general principle of appropriation, first towards interest, then towards costs and then towards the principal, unless, of course, the deposit is indicated to be towards specified heads by the judgment-debtor while making the deposit intimating the decree-holder of his intention. We, thus, approve the ratio of Prem Nath Kapur V. National Fertilizers Corporation of India Ltd., (1996) 2 SCC 71 : 1995 Supp (5) SCR 790 on the aspect of appropriation.
54. One other question also was sought to be raised and answered by this Bench though not referred to it. Considering that the question arises in various cases pending in Courts all over the country, we permitted counsel to address us on that question. That question is whether in the light of the decision in Sunder Vs. Union of India, (2001) 7 SCC 211 : 2001 Supp (3) SCR 176, the awardee/decree-holder would be entitled to claim interest on solatium in execution though it is not specifically granted by the decree. It is well settled that an execution court cannot go behind the decree. If, therefore, the claim for interest on solatium had been made and the same has been negatived either expressly or by necessary implication by the judgment or decree of the reference court or of the appellate court, the execution court will have necessarily to reject the claim for interest on solatium based on Sunder Vs. Union of India, (2001) 7 SCC 211 : 2001 Supp (3) SCR 176 on the ground that the execution court cannot go behind the decree. But if the award of the reference court or that of the appellate court does not specifically refer to the question of interest on solatium or in cases where claim had not been made and rejected either expressly or impliedly by the reference court or the appellate court, and merely interest on compensation is awarded, then it would be open to the execution court to apply the ratio of Sunder Vs. Union of India, (2001) 7 SCC 211 : 2001 Supp (3) SCR 176 and say that the compensation awarded includes solatium and in such an event interest on the amount could be directed to be deposited in execution. Otherwise, not, We also clarify that such interest on solatium can be claimed only in pending executions and not in closed executions and the execution court will be entitled to permit its recovery from the date of the judgment in Sunder Vs. Union of India, (2001) 7 SCC 211: 2001 Supp (3) SCR 176 (19.9.2001) and not for any prior period. We also clarify that this will not entail any reappropriation or fresh appropriation by the decree-holder. This we have indicated by way of clarification also in exercise of our power under Articles 141 and 142 of the Constitution of India with a view to avoid multiplicity of litigation on this question.
(ii) 2002 (2) L.W.39 [Sunder Vs. Union of India] wherein the Constitution Bench of the Hon'ble Supreme Court of India held as follows:
In deciding the question as to what amount would bear interest under Section 34 of the Act a peep into Section 31(1) of the Act would be advantageous. That sub-section says: "On making an award under section 11, the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award, and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next sub-section." The remaining sub-sections in that provision only deal with the contingencies in which the Collector has to deposit the amount instead of paying it to the party concerned. It is the legal obligation of the Collector to pay "the compensation awarded by him" to the party entitled thereto. We make it clear that the compensation awarded would include not only the total sum arrived at as per sub-section (1) of Section 23 but the remaining sub-sections thereof as well. It is thus clear from Section 34 that the expression "awarded amount" would mean the amount of compensation worked out in accordance with the provisions contained in Sec.23, including all the sub-sections thereof.
The proviso to Section 34 of the Act makes the position further clear. The proviso says that "if such compensation" is not paid within one year from the date of taking possession of the land, interest shall stand escalated to 15% per annum from the date of expiry of the said period of one year "on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry". It is inconceivable that the solatium amount would attract only the escalated rate of interest from the expiry of one year and that there would be no interest on solatium during the preceding period. What the legislature intended was to make the aggregate amount under Section 23 of the Act to reach the hands of the person as and when the award is passed, at any rate as soon as he is deprived of the possession of his land. Any delay in making payment of the said sum should enable the party to have interest on the said sum until he receives the payment. Splitting up the compensation into different components for the purpose of payment of interest under Section 34 was not in the contemplation of the legislature when that section was framed or enacted.
We may also point out that different High Courts have taken the same view in the following decisions:
G. Venkatesh vs. Special Land Acquisition Officer (AIR 1975 Karnataka 95), B. Ravinder Reddy vs. Special Deputy Collector, Land Acquisition (Industries), Hyderabad (AIR 1981 A.P. 381),State of Haryana vs. Smt. Kailashwati and ors. (AIR 1980 P and H 117) and Hindustan Aeronautics Ltd. vs. Muniswamy Reddy (AIR 1993 Karnataka 77) We think it useful to quote the reasoning advanced by Chief Justice S.S. Sandhawalia of the Division Bench of the Punjab and Haryana High Court in State of Haryana vs. Smt. Kailashwati and ors. (AIR 1980 P and H 117).
"Once it is held as it inevitably must be that the solatium provided for under Section 23(2) of the Act forms an integral and statutory part of the compensation awarded to a landowner, then from the plain terms of Section 28 of the act, it would be evident that the interest is payable on the compensation awarded and not merely on the market value of the land. Indeed the language of S.28 does not even remotely refer to market value alone and in terms talks of compensation or the sum equivalent thereto. The interest awardable under Section 28 therefore would include within its ambit both the market value and the statutory solatium. It would be thus evident that the provisions of Section 28 in terms warrant and authorise the grant of interest on solatium as well."
In our view the aforesaid statement of law is in accord with the sound principle of interpretation. Hence the person entitled to the compensation awarded is also entitled to get interest on the aggregate amount including solatium. The reference is answered accordingly.
(iii) 2014 (3) CTC 35 [V.Kala Bharathi and Others Vs. Oriental Insurance Co Ltd., Br. Chitoor] wherein the Hon'ble Supreme Court held that if a decree contains a Clause, specifying the manner in which the money deposited to be appropriated, then the appropriation shall be made in that direction and in the absence of such specific direction, the amount deposited shall be appropriated first towards interest, then towards cost and subsequently, towards principal due under the decree. In the case of the amount deposited false short of decree amount, the Decree Holder is entitled to appropriate first towards interest and towards cost and thereafter, towards principal.
(iv) (2010) 12 Supreme Court Cases 387 [Land Acquisition Officer and Assistant Commissioner and another Vs. Shivappa Mallappa Jigalur and others] wherein the Hon'ble Supreme Court of India held as follows:
11. We are unable to accept the submission and in our view the decision in Gurpreet Singh Vs. Union of India (2006) 8 Supreme Court Cases 457 has no application to the facts of the present cases. In paragraph 54 of the decision in Gurpreet Singh's case, the Court was considering the scope of execution proceedings and the limitations of the execution court. The three lines relied upon by Mr. Hegde must be read and understood in the context of what is said earlier. The Court clearly said that the execution court could not go beyond the decree. In the event, the claim of interest was rejected expressly or by necessary implication in the decree, it would not be permissible for the execution court to grant interest relying upon the decision in [Sunder vs Union of India] 2002 (2) L.W.39 . But, even then the Court went on to clarify that if the award of the reference court or the appellate court was silent on the issue of solatium and interest then it would be open to the execution court to apply the ratio of [Sunder vs Union of India] 2002 (2) L.W.39 and say that the compensation awarded would include solatium and in such an event interest on the amount could be directed to be deposited in execution. The decision in Gurpreet Singh Vs. Union of India (2006) 8 Supreme Court Cases 457, thus, actually enlarged the scope of execution proceeding, in a certain way, on the basis of the decision in [Sunder vs Union of India] 2002 (2) L.W.39.
(v) 2014 (5) CTC 11 [K.G.Krishnamoorthi and others Vs. The Sub-Collector, Pollachi rep by Tahsildar, Udumalpet and another] wherein this Court held as follows:
16. Thus, it is evident from the Constitutional Bench decision of the Honorable Supreme Court and the decision rendered in Bharat Heavy Electricals Limited Vs. R.S.Avtar Singh and Company, 2013 (1) SCC 243, whenever amount is deposited interest has to be first adjusted and only thereafter, the balance amount has to be given credit to towards the principal amount.
6. As per the ratio laid down in the judgments reported in (2006) 8 Supreme Court Cases 457 [Gurpreet Singh Vs. Union of India] and 2014 (3) CTC 35 [V.Kala Bharathi and Others Vs. Oriental Insurance Co Ltd., Br. Chitoor], it is clear that the amount deposited by the Judgment Debtors, in the absence of specific direction, shall be appropriated, first towards the interest, then towards cost and subsequently, towards principal due under the Award. In the case on hand, the Decree Holders have appropriated the amount deposited by the Judgment Debtors, first towards interest and then towards the principal amount. The Executing Court also approved the calculation made by the Decree Holder.
7. Since the calculation made by the Decree Holder is in line with the pronouncement of the judgment of the Hon'ble Supreme Court of India, I do not find any error in the order passed by the Executing Court with regard to the apportionment of the amount deposited by the Judgment Debtors. The said issue is covered by the ratios laid down by the Hon'ble Supreme Court of India as well as by this Court.
8. The next issue that arises for consideration is with regard to the claim of interest on solatium. As per the ratio laid down in (2006) 8 Supreme Court Cases 457 [Gurpreet Singh Vs. Union of India] and in (2010) 12 Supreme Court Cases 387 [Land Acquisition Officer and Assistant Commissioner and another Vs. Shivappa Mallappa Jigalur and others], when the Reference Court had not awarded interest on solatium, in that case, the claimant can claim interest only from the date of judgment of Sunder Vs. Union of India, 2002 (2) L.W.39 (i.e.) 19.09.2001. If the Reference Court or the Appellate Court awards interest on solatium to the claimant, in that case, the claimant is entitled to claim interest without any cut off date.
9. In the case on hand, the Reference Court had awarded interest on solatium, which was also confirmed by the Division Bench of this Court in A.S.No.179 of 1999 dated 28.10.2002. When the Reference Court had awarded interest on solatium, the claimant is entitled to claim interest without any cut off date as per the judgment of the Hon'ble Supreme Court of India.
10. In these circumstances, the ratio laid down by this Court in C.R.P.(NPD).Nos.617 to 623 of 2007 is not applicable to the present case.
11. Before the Executing Court, the Decree Holder/claimant claimed interest on solatium in accordance with the judgment of the Hon'ble Supreme Court of India. In these circumstances, I am of the considered view that the calculation made by the 1st respondent/claimant is in accordance with the judgments relied upon by the learned counsel for the 1st respondent. The Executing Court has rightly allowed the Execution Petition and directed the Judgment Debtors to deposit the balance amount as per the calculation made by the Decree Holder.
12. In these circumstances, I do not find any error or irregularity in the order passed by the Executing Court. The Civil Revision Petition is devoid of merits and is liable to be dismissed. Accordingly, the Civil Revision Petition is dismissed. No costs. Consequently, the connected miscellaneous petition is closed.