SUNDER versus UNION OF INDIA

Citation: [2001] SUPP. 3 S.C.R. 176 · Decided: 19-09-2001 · Supreme Court of India · Bench: A.S. ANAND · Disposal: Disposed off

Judgment (excerpt)

. A 
SUNDER 
.v. 
UNION OF INDIA 
SEPTEMBJ;:R 19, 2001 
, . 
B 
[DR. A.S. ANAND, CJ, K.T. THOMAS; R.C .. LAHOTI, N. SANTOSH ' 
c 
D 
HEGDE AND S.N.VARIAVA, JJ.J 
Land Acquisition Aer, 1894 : Sections 4(3), 23 28, 31 and 34. 
Land Acquisition proceeding-Compulsory Land Acquisition-Meaning· 
of-Matters to be considered for determination of compensation for land · 
acquired-'Compensation'-Meaning of-Every award for payment of 
compensation includes compensation as de.fined in sub-sections ( 1 ), ( 1-A) and 
(2) of Section 23-Solatium is integral part of compensation and interest is 
payable mz aggregate amount of compensation which includes solatiunz-'-
Liability of State to pay interest on solarium discussed-Payment of interest-
Liability ari.5es in case of delay in payment of compensation before taking 
possession of land acquired. 
Words and Phrases : 
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Compensation-:-Meaning of-Jn the context of land acquisition. 
F 
G 
The reference was necessitated due to conftict between the decisions 
of different Benches of this Court in number of cases. The question as to 
whether the State is liable to pay interest on the amot1nt as envisaged 
under Section 23(2) of the Land Acquisition Act, 1894 was referred to the 
present Bench of five Judges. 
It was conten«!ed by the appellant/claimant that solatium constituted 
part of compensation and interest as envisaged. in Sections 28 a~d 34 of the 
Act would accrue on the aggregate amount which includes the solatium as 
well. 
. 
It was contended by the respondent that the word 'compensation' is· 
used ostensibly in different connotation; that there is a distinction between 
compensation awarded for the land acquired under Section 23(1) and 
. aggregate compensation which included solatium and actual loss suffered 
H 
by the land owner in the enjoyment of property.and hence real compensation 
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SUNl'.>ER v. U.0.1. 
177 
is. just equi~alent of it as per Section 23(1) of the Act;_ that interest is 
A 
payable only on the said compensation; that the .law envisaged in sub· 
section (2) of Section 23 of the Act cannot form part of compensation as the 
same is a payment only by way of solace on account of compulsory nature 
of acquisition. 
Disposing of the matter.;, the Court 
HELD : 1.1. Section 31 of the Land Acquisition Act, 1894 cast an 
obligation on the Collector that after making the award under Section 11, he 
shall tender payment of the compensation awarded by him to the persons 
entitled to it. This means that law does not relish any delay in making the 
payment once the award is made but in the absence of a legal insistence that 
the amount awarded should necessarily be paid before taking possession of 
the land, it could happen that there would be some interregnum between 
B 
c 
date of taking possession and making payment of awarded sum. Question of 
making payment on interest arises only when the compensation is not paid/ 
D 
deposited before the date of taking possession of the land. It is for the 
purpose of affording relief to the person entitled to such compensation when 
the payment of his money is delayed, provision is made in Section 34 of the 
Act. Further, when the Court is of the opinion that Collector should have 
awarded a larger sum as compensation, the Court has to direct the Collector 
to pay interest on such excess amount. The rate of interest is at par with the 
rate indicated in Section 34. Interest has to accrue as per Sections 34 and 28 
of the Act. (183-F-G; 184-A·B·C·G] 
1.2. The various definitions of the term "compensation" need not 
detract the Courts in fathoming the real import of it when compensation is 
regarded as a statutory obligation. The exercise can be done with the aid of 
the provisions in the statutes. So the Court in the context of land acquisition 
has to decide as to how the Act has designed the compensation vis-a-vis the 
liability to pay interest. No judicial exercise is required to quantify the 
sums mentioned in sub-section (l·A) or sub-section 2 of Section 23 because 
the Section itself specifies the percentage to be worked out for the purpose 
of adding to the total amount arrived at under sub-sectiou (1). There can 
be no doubt that all the three heads specified in the three sub-sections in 
Section 23 are the sums to be 'awarded by the Court'. Hence the words 
"eYery award under this part" cannot be treated as the word 'award' after 
E 
F 
G 
H 
178 
SUPREME COURT REPORTS 
[2001] SUPP. 3 S.C.R. 
A 

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