Andhra HC (Pre-Telangana)
Chilukuri Ramarao And Ors. vs Govt. Of A.P. And Ors. on 16 April, 1998
Equivalent citations: 1998(3)ALD491, 1998(3)ALT110, 1998 A I H C 4078, (1998) 1 LS 629, (1998) 2 LACC 42, (1998) 3 ANDHLD 491, (1998) 3 ANDH LT 110
Author: P. Venkatarama Reddi
Bench: P. Venkatarama Reddi
ORDER
A. Hanumanthu, J
1. This writ appeal has been preferred against the order dated 20-10-1997 passed in W.P. No.21766/96 refusing to grant interest on the delayed payment of interest on the compensation awarded to the petitioners' lands which have been acquired by the Slate.
2. The facts, giving rise for filing of the writ petition have been exhaustively set out in the impugned order. Bereft of the details, the relevant facts are as under:
The lands of the petitioners were sought to be acquired by the State for public purpose compulsorily and the possession thereof was also taken on 15-12-1984. Though initially the said acquisition was objected to by the petitioners, a compromise was arrived at between the petitioners and the State and a compromise Award i.e., Award No.2/89 dated 30-8-1989 was passed under Section 11(2) of the Land Acquisition Act, 1894 (hereinafter called as Act). The compromise provided for the payment of compensation at the rate of Rs.48/- per square yard and 30% solatium. There was no clause providing for payment of interest on the compensation awarded. On 3-9-1989 the State deposited Rs.15,22,160.70 ps. towards the compensation amount and solatium and the same had been withdrawn by the petitioners. As the claim for interest on the compensation amount was refused by the State, the petitioners filed W.P. Nos.4272/90 and 8515/90 claiming interest from the date of taking possession i.e., 15-12-1984. The State resisted both the writ petitions on the ground that the Award was passed on compromise under Section 11(2) of the Act and the provisions under Section 34 of the Act are not applicable. Both the writ petitions were disposed of by a common judgment dated 24-3-1992 directing the State to pay interest on the amount of compensation awarded as per the provisions of the Land Acquisition Act. That order has become final as the appeals preferred were dismissed.
3. The petitioners filed Contempt Case No.55/93 as the respondents failed to deposit the interest as directed in the said writ petitions. The petitioners filed E.P.42/93 claiming a sum of Rs.18,25,439.37 ps. as per the directions in the writ petition Nos.4272/90 and 8515/90. As against that amount claimed in the E.P. and during pendency of Contempt Case, the State deposited in compliance of the directions of this Court Rs.17,73,350-00. But, before that amount was ordered to be withdrawn, the State, through the Revenue Divisional Officer, Narasaraopet, filed E.A.No.501/93. contending that the petitioners are entitled to only for a sum of Rs.9,85,242.65 ps. towards interest and that the State, by mistake, deposited the amount in excess and that the excess amount of Rs.7,88,870-35 should be returned to the Government. A calculation memo was also filed to that effect. The learned Subordinate Judge by his order dated: 24-2-1994 held that the petitioners are entitled to claim interest upto 3-9-1989 i.e., the day on which the entire compensation amount was deposited into Court and the interest payable upto that date worked out to Rs.9,85,442.65 ps. as per the provisions of Section 34 of the Act and that the Government is entitled to get back the excess amount of Rs.7,87,872.35 together with the accrued interest thereon as that amount was kept in fixed deposit, and therefore, allowed the petition. In effect, the learned Sub-Judge disallowed that claim of the petitioners for interest on interest beyond 3-9-1989. Challenging the said order of the Sub-Judge, the petitioners filed the Writ Petition No.8869/94. That writ petition was dismissed by order dated 6-10-1996 upholding the order of the learned Subordinate Judge. Thereafter, the petitioners filed W.P.No.21766/96 to direct the respondents to pay equitable interest on the interest amount due from 3-9-1989 till the date of deposit together with additional market value at 12% from the date of taking over possession of the land. Our learned brother M.H.A. Ansari, J dismissed that petition by his order dated: 20-10-1997 observing that the petitioners have been paid compensation viz., market value and 30% solatium thereon which worked out to Rs.15,22,160.70 and that has been paid to the petitioners on 3-9-1989 as per the compromise Award dated 30-8-1989 and the interest granted by this Court in W.P. Nos.4272/90 and 8515/90 dated: 24-3-1992 was duly calculated from the date of taking possession i.e., 15-12-1984 to 3-9-1989 and that amount worked out to Rs.9,85,442.65 and that the learned Subordinate Judge calculated that amount as payable to the petitioners and the excess amount of Rs.7,87,872.35 which was deposited by the Court in fixed deposit was liable to be paid to the State with interest accrued thereon, and that the petitioner's claim for interest on interest is mis-conceived and the same is liable to be rejected. The learned Judge further held that as the petitioner's claim was disallowed by the order in W.P. No.8869/94, dated 6-10-1996, the same cannot be reagitated in this writ petition on the principles of res judicata. Challenging the said order, the petitioners have come up with this appeal.
4. The learned Senior Counsel Mr. M. V. Ramana Reddy appearing for the petitioners canvassed the following contentions:
Firstly, the finding in the impugned order that the writ petition 21766/96 is barred by the principles of res judicata in view of the order in W.P. No.8869/94 cannot be sustained.
Secondly, the petitioners are entitled for the additional market value at 12% per annum under Section 23 (1-A) of the Act.
Thirdly, the possession of the petitioners' land was taken on 15-12-1984 and the amount was deposited as per the directions of this Court in W.P. Nos.4272/90 and 8515/90 only on 22-7-1993 and as such, the petitioners are entitled for interest on the total compensation awarded under Section 34 of the Act from the date of taking possession i.e., 15-12-1984 till the date of last deposit of that amount i.e. 22-7-1993.
The learned Government Pleader refuted all these contentions raised by the learned Counsel for the appellants and submitted his arguments in support of the impugned order.
5. Considering the facts and circumstances of the case, we agree with the first contention raised by the learned senior Counsel Sri M. V. Ramana Reddy, appearing for the appellants. Admittedly, W.P. No.8869/94 was filed challenging the order of the learned Subordinate Judge passed in E.A. No.501/93 in E.P.No.42/93 allowing the claim of the State for refund of Rs.7,87,772.35. That finding of the learned Subordinate Judge was challenged in that writ petition. The validity of that order was considered by this Court and that order of the Subordinate Judge was upheld. As seen from that order, the request made by the learned Counsel for the petitioners to enlarge the scope of the writ petition and grant damages or compensation under Article 300-A of the Constitution for the delayed payment was refused on the ground that it was not admissible, while leaving it open to the petitioners to seek any such relief by an independent proceeding. Therefore, the learned Judge in W.P. No.8869/94 did not deal with the claim of the petitioners as claimed in the present writ petition. What was considered therein was only the legality of the order passed by the learned Subordinate Judge in E.P., the scope of enquiry in the E.P. being limited. As such, the present writ petition is not barred by the principles of res judicata.
6. As regards the claim for additional market value at the rate of 12% per annum, it may straightaway be stated that this claim is barred by the principle of constructive res judicata in view of the common order in W.P. Nos.4272/90 and 8515/90, dated 24-3-1992. Those writ petitions were filed by the petitioners against the compromise Award 2/89, dated: 30-8-1989. The petitioners challenged that Award on the ground that no provision was made for payment of statutory interest under Section 34 of the Act. But, the petitioners did not choose to claim statutory benefit of additional market value at 12% per annum. For the first time, they claimed that benefit of additional market value in the subsequent W.P. No.21766/96, therefore, this claim of the petitioners is barred by the principle of constructive res judicata as well as the principle underlying Order II, Rule 2, C.P.C. Our learned brother M.H.A. Ansari, J. also did not consider this claim and it is well settled that the claims which are not considered were deemed to have been rejected.
7. As regards the third contention i.e., claim for interest from the date of taking over possession i.e., 15-12-1984 till the date of last deposit i.e., 22-7-1993 on the total compensation of Rs.15,22,160.70 ps (compensation plus 30% solatium) we are unable to agree. In this connection, it is useful to refer to the relief that has been granted to these petitioners in the common order in W.P. Nos.4272/90 and 8515/90, dated: 24-3-1992 and it reads as under:
"In the result, both the writ petitions are allowed and there shall be a direction issued to the respondents to pay the petitioners interest on the amount of compensation awarded as per the provisions of Land Acquisition Act:". Thus, the petitioners herein are entitled for interest as per the provisions under Land Acquisition Act. The payment of interest under the Act is squarely covered by the provisions of the Act. Sections 28 and 34 of the Act relate to the payment of interest. The provisions under Section 28 are not applicable to the present case. The provisions under Section 34 of the Act alone are applicable and it reads as follows:
" Payment of interest : When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited :
Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of fifteen per cent per annum shall be payable 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 clear from this Section that the liability to pay interest on the amount of compensation continues to subsist until it is paid to the owner or interested persons or deposited into Court. The liability to pay interest ceases on the date on which the compensation is deposited into" Court. In other words, the liability to pay interest is co-terminous with the payment of the compensation amount under Section 34 from the date of taking possession till the date of payment or deposit into Court. Further, Section 34 fastens liability to pay interest only on the amount of compensation awarded.
8. In the instant case, what is demanded by the appellants herein is interest on interest which is not available for them under the Act. It is not disputed that under the Award the total compensation together with solatium awarded comes to Rs.15,22,160.65 and this amount was deposited into Court on 3-9-1989. It is also not disputed that the possession of the acquired lands was taken on 15-12-1984. The State did not deposit interest from the date of taking possession till the date of deposit of compensation into Court for the reason that there was no provision for payment of interest in the consent Award. But, as per the directions of this Court in WP.Nos.4272/90 and 8515/90 dated 24-3-1992, the appellants are entitled for interest under Section 34 of the Act. Therefore, as per the provisions under Section 34, the petitioners are entitled for interest at the rate of 9% per annum from 15-12-1984 to 14-12-1985 (for the first year) on Rs.15,22,160.70 ps. under Section 34 of the Act. As the compensation amount was not deposited within one year, the petitioners are entitled for future interest on the compensation amount of Rs.15,22,160.70 at 15% per annum under the proviso to Section 34 from 15-12-1985 to 3-9-1989 i.e., the date on which the compensation amount was deposited into Court. The learned Subordinate Judge, as seen from his order, has rightly calculated the total interest payable to the petitioners at Rs.9,85,442.65 (1,36,994.45 + 8,48,448.20). But, as seen from the particulars of the amount shown in E.P.42/93 filed by the petitioners as mentioned in the order of the Subordinate Judge in E.A.No.5/93, the petitioners claimed future interest from 15-12-1985 to the date of filing of the E.P. i.e., 7-4-1993 on the entire compensation amount of Rs.15,22,160.70 at 15% per annum which comes to Rs. 16,69,301-00. Besides this, they have also claimed a sum of Rs.1,36,994.45 towards interest at 9% per annum from 15-12-1984 to 14-12-1985. Thus, according to the petitioners, the total interest payable comes to Rs. 18,06,295.45. Obviously, this calculation of interest is fallacious. The petitioners cannot claim interest on the compensation amount of Rs. 15,22160.70 beyond 3-9-1989 as the same was deposited into Court on that day. Hence, the interest which was payable as on that day i.e., 3-9-1989, as assessed by the Subordinate Judge was only Rs.9,85,442.65 and not Rs.18,06,295.45 as claimed in the Execution Petition. It is no doubt true that the State had deposited Rs. 17,73,350.00 on 27-3-1993 towards the interest in pursuance of the directions in the Writ Petitions 4272 and 8515 of 1990, dated 24-3-1992. Obviously, the State deposited in excess of the amount for which the petitioners are entitled. Therefore, the learned Subordinate Judge rightly held that the State is entitled for refund of the excess amount of Rs.7,87,872.35 together with the interest accrued thereon as the same was, kept in fixed deposit.
9. It is also contended by the learned Counsel for the appellants that the State deposited the amount towards interest only on 27-3-1993 and therefore, the petitioners are entitled for interest on the accumulated interest as on 3-9-1989. We are of the view that no provision is made in the Act to pay interest beyond the date of deposit of compensation into Court or to pay interest on interest which amounts to payment of compound interest. A Division Bench of this Court in B. Samrajya Lakshmi and another v. K. Govinda Rao L.A.O. and Deputy Director of Social Welfare, Guntur and another, also had taken the same view earlier. It is observed thus:
''Payment of compound interest is impermissible under law. The Land Acquisition Act contemplates payment of interest at the specified rate, but does not contemplate payment of interest on interest. It is not loan from any financial institution to add up interest into principal with quarterly rest, or annual rests as the case may be and again then levy interest."
Therefore, the petitioners' claim for interest on interest from 3-9-1989 or to pay interest beyond the date of deposit of compensation into Court cannot be accepted.
10. The learned Counsel for the petitioners next contends that if not as interest, this Court being a Court of Equity, can grant equitable interest as there is substantial delay in depositing the interest into Court inspite of the directions of this Court in W.P. Nos. 4272 and 8515 of 1990. We see force in this contention. In the instant case, the petitioners are deprived of the possession and enjoyment of the acquired lands with effect from 15-12-1984. Of course, the compensation amount was deposited on 3-9-1989, but the State failed to deposit statutory interest on the compensation amount. Hence, the petitioners were forced to approach this Court for directions to pay interest by filing W.P. Nos. 4272 and 8515 of 1990 and the said two writ petitions were allowed on 24-3-1992. But, inspite of the said directions given by this Court on 24-3-1992, the State failed to pay or deposit the interest within a reasonable time. The State deposited that amount only when the petitioners initiated Contempt Proceedings. The interest amount was deposited only on 27-3-1993. Thus, there is a long gap of one year and 7 months to comply with the directions of this Court in depositing the interest. No explanation is forthcoming for the said delay in depositing the accumulated interest as per the directions of this Court. Hence, if not as of right under the provisions of the Land Acquisition Act, the petitioners are entitled for some compensation for the late deposit of accumulated interest of Rs.9,85,442/-from 1-5-1992 (i.e., after the expiry of one month from the date of judgment) upto 22-7-1993 (the date of deposit of interest as per the directions of this Court. In Chandra Bansi Singh v. State of Bihar and Batch, ), while considering a similar question, the three Judge Bench of the Apex Court held that under the regular proceedings under Land Acquisition Act, whatever the amounts specified can only be awarded but not extraneous claims and that extraneous claims can be allowed only by way of equitable remedy. In para 16 of the judgment, it is observed thus:
"So far as the delay, is concerned, the appellants have undoubtedly a case for paymcnt of some compensation in equity though not under law and as this Court is not only a Court of law but also a Court of equity as well, it will be impossible for us to deny this relief to the appellants. After taking into consideration the various shades and aspects of the case, we are clearly of the opinion that apart from the compensation which may be awarded by the Collector or enhanced by the Judge or a higher Court, the appellants should get an equitable compensation in the form of interest calculated at the rate of 7 1/2% per cent per annum for two years on the value of the land owned by each land owner. This equitable compensation has been awarded in the special facts of this case, and will not be the subject-matter of appeal, if any, under the Act on the amount of compensation."
In R.F. Charitable Trust Hyderabad Rep. by its Trustee v. Special Deputy Collector, Land Acquisition and others, Himayatnagar, (1991 (1) ALT 581), Division Bench of this Court (of which one of us Justice PVRR-J was one of the member) also took the view that the claimants are entitled to additional compensation in the form of equitable interest for the delayed payment of the amount and that additional amount was quantified at Rs. 5,00,000-00 calculating interest at 10% on the amount already paid as compensation.
11. In V. Samrajya Lakshmi and another v. Govinda Rao LAO and Dy. Director of Social Welfare, Guntur and another, (supra) the Division Bench of this Court also while dealing with a similar question granted interest at 4% towards the additional compensation for the late deposit of the compensation amount awarded. Taking the said judicial precedents as a guiding factor, and considering the fact that there was inordinate delay on the part of the State in depositing the amount towards interest as per the directions of this Court, we feel that interests of justice and equity will be met if an additional amount equivalent to interest at 12% per annum on the amount of Rs.9,85,442/-from 1-5-1992 to 22-7-1993 is granted to the appellants. Accordingly, we grant the same. We direct that this amount shall be paid by the respondents to the appellants herein within a period of 3 months from this day.
12. Accordingly the writ appeal is disposed of with the said direction. No costs.