STATE OF HIMACHAL PRADESH AND ORS. versus SHRI DHARAM DAS

Citation: [1995] SUPP. 3 S.C.R. 74 · Decided: 25-08-1995 · Supreme Court of India · Bench: K. RAMASWAMY, B.L. HANSARIA · Disposal: Appeal(s) allowed

Judgment (excerpt)

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B 
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STATE OF HIMACHAL PRADESH AND ORS. 
v. 
SHRI DHARAM DAS 
AUGUST 25, 1995 
[K. RAMASWAMY AND B.L. HANSARIA, JJ.) 
Land Acquisition Act, 1894: Sections 23(1-A), 28 and 31. 
Land Acquisiti01t-Compensation-Award of benefits under Section 
23( 1-A)-Held Valid-Additional award of interest on equitable grounds 
@12% from the date of taking possession of land till date of payment of 
compensation-Held not pennissible. 
Interest-Power of Cowt to award-Provision for payment of interest in 
the statute-Court has no power to award interest on equitable grounds in 
D 
addition to the statut01y rates prescribed. 
E 
In these land acquisition proceedings the High Court awarded to the 
claimants statutory benefits under section23(1-A) of the Land Acquisition 
Act, 1894. In addition the High Court also granted interest on equitable 
grounds @ 12% per annum from the date of taking possession of land till 
the date of payment of compensation. Against the judgment of High Court, 
State preferred appeal to this Court. 
Allowing the appeal, this Court 
F 
HELD: 1. The finding-of the High Court that the claimants would 
be entitled to payment of interest @ 12% on equitable grounds from the 
date of taking possession till date of deposit under section 12 in addition 
to the statutory rates of interest and 12% additional amount under section 
23(1-A) for the same period is clearly illegal. The order of the High Court 
G to the extent of granting 12% interest from the date of taking possession, 
namely, October, 1972 till date of deposit, namely March, 1987, is illegal 
and is accordingly set aside. But the direction to pay additional amount 
under section 23(1-A) from the date of taking possession till date of 
making the award is valid and needs no interference. [78-B-C] 
H 
2. When the statue deals with payment of interest to the claimants 
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STATE v. DHARAMDAS 
75 
either under section 31 or section 28 of the Land Acquisition Act, the Court A 
has no power to award interest in a manner other than the one in which 
the statute prescribes payment. Apart from section 31 and proviso to 
section 28 there is no other provision under the Act empowering the Court 
to award interest on equitable grounds, in addition to statutory rates of 
interest prescribed under the Act. Equitable consideration has no role to 
play in determination of the compensation and the manner of awarding 
interest as enjoined under the Act. The Act is to be administered in the 
manner laid in the Act and in no other way. As a concomitance, the equity 
jurisdiction of the Court is taken out and the Act enjoins the Court to 
grant interest as per the statutory rates specified in the Act. [77-E-H; 78-A] 
Mir Fazeelath Hussain & Ors. v. Special Deputy Collector, Land Ac-
quisition, Hyderabad, [1995] 3 SCC 208 and Kalimpong Land & Building 
Ltd. v. State of West Bengal, [1994] 6 SCC 720, relied on. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8030 of 
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1995. 
I) 
From the Judgment and Order dated 9.7.87 of the Himachal Pradesh 
High Court in Contempt Petition (C) No. 40 of 1987. 
Himinder Lal and Naresh K. Sharma for the Appellants. 
The following Order of the Court was delivered : 
Leave granted. 
E 
Though notice has been served on the respondent on May 23, 1995, 
none is appearing either through counsel or in person. Notification under F 
Section 4(1) of the Land Acquisition Act, 1894 (for short, 'the Act') was 
published on February 27, 1986 and the Collector passed the award on 
March 29, 1987. Dissatisfied therewith, the respondent had filed C.W.P. 
No 125/86 and the High Court by its order dated July 23, 1986 held that: 
"On the amount of compensation payable to the petitioner in G 
respect of land, interest at the rate of 12 per cent per annum shall 
be paid from the date of the taking over of possession till the date 
of payment of interim compensation and of final compensation, if 
there is enhancement. The· interest payable accordingly is in the 
nature of an equitable compensation and such interest will be in H 
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SUPREM~ COURT REPORTS [1995] SUPP. 3 S.C.R. 
addition to the compensation, solatium and interest at the statutory 
rate which will be paid to the petitioner under the law in respect 
of land, whether awarded by the Collector or enhanced by the 
Court, and such interest will not be taken into consideration in any 
Proceeding under the Act while awarding the statutory compen-
sation." 
Following that direction the

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