Andhra HC (Pre-Telangana)
Power Grid Corporation Of India Ltd. ... vs Patchukoru Appa Rao And Ors. on 10 November, 2005
Equivalent citations: 2006(1)ALT392
ORDER C.V. Ramulu, J.
1. In this batch of Civil Revision Petitions the short question that falls for consideration is whether the respondent-claimants are entitled for interest on the compensation awarded under Sections 10 and 16 of the Indian Telegraph Act, 1985 read with Section 42 of the Indian Electricity (Supply) Act, 1948?
2. The respondents herein (claimants) filed Original Petitions under Sections 10 and 16 of the Indian Telegraph Act, 1985 read with Section 42 of the Indian Eiectricity (Supply) Act, 1948 seeking enhanced compensation for cutting the coconut trees for laying of power transmission lines through their fields in the year 1991 being aggrieved by the compensation fixed by the authority at Rs. 1,000/- per tree.
3. It was the contention of the respondent-claimants that they are the absolute owners of various extents of land situated at Thimmarajupeta village, Atchutapuram Mandal of Visakhapatnam district. They raised coconut groove in their lands and all the trees were fruit bearing trees and are aged about 12 years. The petitioners herein undertook laying of power transmission lines in between Rajanagaram and Gajuwaka and in execution of the said work, they proposed to lay electrical lines through the fields of the respondents and in the process, the petitioners cut and removed coconut trees in exercise of their powers vested under the Telegraph Act. However, subsequently, the petitioners fixed an amount of Rs. 1,000/- as value of the damage caused in removing each coconut tree and the respondents received the said amount under protest. It was asserted by the respondents herein that from each coconut tree they would get nearly Rs. 500/- per year and for 10 years the usufruct would be Rs. 5,000/- for each tree. Therefore, the respondents estimated the loss in view of the cutting of the coconut trees at Rs. 5,000/-each and sought for payment of compensation. The petitioners herein filed their counter affidavits before the Court below denying the allegations made by the respondents and opposing their claim. After elaborate consideration of the entire evidence on record, the learned District Judge enhanced the compensation to Rs. 1600/-per tree.
4. There is no dispute as to the enhancement of quantum of compensation. However, it is the case of the petitioners that the Court below grossly erred in awarding interest at 9% per annum on the enhanced compensation from the date of petition till the date of realization of the amount. Challenging the awarding of interest by the learned District Judge, this batch of Civil Revision Petitions are filed.
5. Learned counsel for the petitioners contended that in the absence of a statutory provision, no interest could be awarded on the compensation fixed by the authorities or on the enhanced compensation awarded by the Court. The right to interest is a substantive right and unless and until it is contemplated by the enabling Act under which compensation was granted, the question of awarding any interest on the compensation amount does not arise. By invoking Section 34 of the Code of Civil Procedure, no interest can be awarded in such like matters. The Court below has erroneously assumed that the interest as is available in cases arising under the Land Acquisition Act, Motor Vehicles Act and other Acts, can also be awarded to the cases arising under Sections 10 and 16 of the Telegraph Act. These are not the cases where the land is acquired or the respondents are deprived of their possession over the property. The erection of electrical poles may cause some obstruction in the use of the land, but the respondents are not fully deprived of enjoyment of their lands. Therefore, the concept of interest as is available under the Land Acquisition Act or under the Motor Vehicles Act cannot be borrowed into this field, even on amount of enhanced compensation.
6. Learned counsel for the petitioners has drawn attention of the Court to Section 34 of the Land Acquisition Act, Section 171 of the Motor Vehicles Act and Section 7 of the A.P. Provident Fund Act, 1925 and stated that wherever the compensation is sought to be awarded, the interest is also contemplated under the very same Act. Since under the provisions of Telegraph Act, no interest is contemplated, the respondents are not entitled for any interest on the enhanced compensation amount. The District Court assumed for itself as a civil Court and by invoking the power under Section 34 of CPC awarded interest at 9%. In fact, under the Telegraph Act the District Judge is only a persona designata and not a civil Court, therefore, the provisions of CPC are applicable only for certain purposes, such as, summoning of witnesses, production of documents etc. Absolutely, there is no power vested in the District Judge to grant such interest. In this regard, the learned counsel has drawn attention of the Court to the Judgments reported in Laxmichand v. Indore Improvement Trust Charan Singh v. Birla Textiles , India Carbon Ltd. v. State of Assam and K.S.E. Board v. Marthoma Rubber Company .
7. Per contra, the learned counsel for the respondent-claimants strenuously contended that in these cases interest is not granted as a charity, but is granted pending litigation. The District Court is not a persona designata as contended by the learned counsel for the petitioners, but it is a civil Court for all purposes as laid down in Ramachandra Rao v. State of Madras (now A.P.) AIR 1962 A.P. 58 Once the District Court under the provisions of Sections 10 and 16 of the Telegraph Act is a civil Court, it has not committed any error in awarding interest as per the provisions of Section 34 of CPC. Awarding of interest is not a substantive right and it all depends on the circumstances of the case as is observed by this Court in Narayana Dossjee v. Board of Trustees (D.B.). The question of payment of interest would arise only when the compensation is not paid or deposited on or before the date of cutting of the coconut trees. It is equitable that the person, who is deprived of the trees on account of laying of the electrical lines is paid an amount, which law demands to be paid. Any delay thereafter would only be to his detriment. Therefore, there must be a provision to buffet such equity. Insofar as the cases under the Land Acquisition Act and the Motor Vehicles Act are concerned, they are arising out of a statutory right for compensation and interest there on, whereas, in the present cases in the adjudicatory process, the compensation is awarded and, therefore, for the delayed payment, interest is also awarded as contemplated under Section 34 of CPC.
8. I have given my earnest consideration to the respective submissions made by the learned counsel and gone through the entire material made available on record including the impugned Judgment.
9. At the outset, it may be necessary to notice the relevant provisions of law, under which the compensation can be claimed, viz., Section 42 of the Electricity Act and Sections 10 and 16 and also Section 34(3) of the Telegraph Act, which read as under:
The Indian Electricity Act, 1910 Section 42. Powers to Board for placing wires, poles, etc:-
(1) Not with standing anything contained in Sections 12 to 16, 18 and 19 of the Indian Electricity Act, 1910 (9 of 1910), but without prejudice to the requirements of Section 17 of that Act where provision in such behalf is made in a sanctioned scheme, the Board shall have, for the placing of any wires, poles, wall-brackets, stays apparatus and appliances for the transmission and distribution of electricity, or for the transmission of telegraphic or telephonic communications necessary for the proper co-ordination of the works of the Board, all the powers which the telegraph authority possesses under Part III of the Indian Telegraph Act, 1885 (13 of 1885) with regard to a telegraph established or maintained by the Government or to be so established or maintained:
Provided that where a sanctioned scheme does not make such provision as aforesaid, all the provisions of Sections 12 to 19 of the first mentioned Act shall apply to the works of the Board.
(2) A Generating Company may, for the placing of wires, poles, wall-brackets, stays apparatus and appliances for the transmission of electricity, or for the transmission of telegraphic or telephonic communications necessary for the proper co-ordination of the works of the Generating Company, exercise all or any of the powers which the Board may exercise under Sub-section (1) and subject to the conditions referred to therein.
The Indian Telegraph Act, 1885 Section 10.
Power for telegraph authority to place and maintain telegraph lines and posts:- The telegraph authority may, from time to time, place and maintain a telegraph line under, over, along, or across, and posts in or upon, any immovable property:
Provided that-
(a) the telegraph authority shall not exercise the powers conferred by this section except for the purposes of a telegraph established or maintained by the Central Government, or to be so established or maintained;
(b) the Central Government shall not acquire any right other than that of user only in the property under, over, along, across, in or upon which the telegraph authority places any telegraph line or post; and
(c) except as hereinafter provided, the telegraph authority shall not exercise those powers in respect of any property vested in or under the control or management of any local authority, without the permission of that authority; and
(d) in the exercise of the powers conferred by this section, the telegraph authority shall do as little damage as possible, and, when it has exercised those powers in respect of any property other than that referred to in clause (c), shall pay full compensation to all persons interested for any damage sustained by them by reason of the exercise of those powers.
Section 16: Exercise of powers conferred by Section 10, and disputes as to compensation, in case of property other than that of a local authority:-
(1) If the exercise of the powers mentioned in Section 10 in respect of property referred to in clause (d) of that section is resisted or obstructed, the District Magistrate may, in his discretion, order that the telegraph authority shall be permitted to exercise them.
(2) If, after the making of an order under Sub-section (1), any person resists the exercise of those powers, or, having control over the property, does not give all facilities for their being exercised, he shall be deemed to have committed an offence under Section 188 of the Indian Penal code, 1860 (45 of 1860).
(3) If any dispute arises concerning the sufficiency of the compensation to be paid under Section 10, clause (d), it shall, on application for that purpose by either of the disputing parties to the District Judge within whose jurisdiction the property is situate, be determined by him.
(4) If any dispute arises as to the person entitled to receive compensation, or as to the proportions in which the persons interested are entitled to share in it, the telegraph authority may pay into the court of the District Judge such amount as he deems sufficient or, where all he disputing parties have in writing admitted the amount tendered to be sufficient or the amount has been determined under Sub-section (3), the amount; and the District Judge, after giving notice to the parties and hearing such of them as desire to be heard, shall determine the persons entitled to receive the compensation or, as the case may be, the proportions in which the persons interested are entitled to share in it.
(5) Every determination of a dispute by a District Judge under Sub-section (3), or Sub-section (4) shall be final:
Provided that nothing in this sub-section shall affect the right of any person to recover by suit the whole or any part of any compensation paid by the telegraph authority, from the person who has received the same.
Section 34: Application of Act to Presidency-towns:-
(1)and(2)....
(3) The fee in respect of an application to the Chief Judge of a Presidency Court of Small Causes under Sub-section (3) of Section 16 shall be the same as would be payable under the Court-fees Act, 1870 (7 of 1870), in respect of such an application to a District Judge beyond the limits of a Presidency-town, and fees for summonses and other processes in proceedings before the Chief Judge under Sub-section (3) or Sub-section (4) of that section shall be payable according to the scale set forth in the Fourth Schedule to the Presidency Small Causes Courts Act, 1882 (15 of 1882).
10. Section 42 of the Electricity Act contemplates that the Board for the placing of any wires, poles, wall brackets, stays apparatus and appliances of the transmission and distribution of electricity or for transmission of telegraphic and telephonic communication necessary for the proper coordination of the works of the Board shall have all powers which the Telegraph authority possesses under Part III of the Indian Telegraph Act, 1885. Section 10(d) of the Telegraph Act contemplates that the telegraph authority shall do as little damage as possible and when it has exercised powers in respect of any property other than that referred to in clause (c), shall pay full compensation to all persons interested for any damage sustained by them by reason of the exercise of those powers. Section 16(3) of the Act contemplates that if any dispute arises concerning the sufficiency of compensation to be paid under Section 10(d), on application for that purpose by either of the disputing parties to the District Judge, within whose jurisdiction, the property is situated, shall determine the compensation.
11. Coming to the cases on hand, there is no dispute as to fixing of compensation by the authorities under the Telegraph Act, filing applications before the District Judge, raising a dispute as to sufficiency of compensation to be paid under Section 10(d) and the District Court enhancing the compensation from Rs. 1,000/- to Rs. 1,600/- per tree per year. While enhancing the compensation, the District Court also granted interest thereon at 9% per annum. There is no dispute as to payment of compensation as fixed by the District Judge. The only question now requires -to be considered, as noted above, is awarding of interest on the enhanced compensation by the District Judge. Once the enhancement of compensation as fixed by the District Court is not in dispute, the compensation fixed must be deemed to be a compensation as fixed by the authorities as on the date of such fixation earlier. Therefore, the respondent-claimants are entitled for such compensation as on the date when it was originally fixed under Section 10(d) of the Telegraph Act. In other words, this would lead to an irresistible inference that the respondent-claimants are entitled for just and proper compensation of Rs. 1,600/- per tree per annum and not Rs. 1,000/- as fixed by the authorities. The Court below has awarded interest on the enhanced compensation from the date of Original Petition till the date of realization. Once the respondent-claimants are denied payment of their rightful compensation, in view of the decision made by the Court below it cannot be said that they are not entitled for interest thereon for the delay caused by the authorities in payment of compensation. The delay is caused in view of wrong decision made by the authorities resulting in a dispute concerning the sufficiency of compensation.
In Laxmichand's case (1 supra), the Apex Court held as under:
14. It is true that there is no provision for awarding interest unlike under the Land Acquisition Act, 1894 (see Sections 28 and 34 of that Act). It is, however, submitted on behalf of the respondents that there is no bar under the Act against awarding interest by the Tribunal even though there is no enabling express provision to that effect under the Act. It is stated that the Tribunal under Section 78 exercises powers for summoning witnesses and enforcing attendance etc. in the same manner as provided in the case of civil courts under the Code of Civil Procedure. Under Section 147 an appeal from the Tribunal lies to the High Court in cases where the value of the claim exceeds Rs. 500/-and in any other case to the District Judge. It is, therefore, submitted that the Tribunal is empowered even as a civil court to award interest under Section 34 of the Civil Procedure Code. However, authorises the court to award interest from the date of the suit to the date of the decree and thereafter to the date of payment Section 34 therefore, would not come to the aid of the Tribunal to award interest from the date of delivery of possession of the land to the date of determination of compensation.
The said case arose under a different context. It was submitted before the Court that the Tribunal is empowered even as a civil Court to award interest under Section 34 of CPC. In those circumstances, the Supreme Court held that Section 34 of CPC, however, authorizes the Court to award interest from the date of the suit to the date of decree and thereafter till the date of payment. Section 34, therefore, would not come to the aid of the Tribunal to award interest from the date of delivery of possession of the land to the date of determination of compensation. This decision has no relevance to the facts of the present case. In these cases, neither the interest on compensation is awarded from the date of possession nor from the date when the damage was caused nor from the date of payment of amount as fixed by the authorities. The interest is awarded only on the enhanced compensation from the date of petition till the date of realization, since there is delay in payment of sufficient compensation by the authorities to the respondent-claimants.
12. In Charan Singh's case (2 supra), it was held by the Supreme Court as under:
4. There was no provision in the Act for payment of interest when the same was quantified by the controlling authority and before the Collector was approached for its realisation. In fact, it is on the acceptance of the position that there was a lacuna in the law that Act 22 of 1987 brought about the incorporation of Sub-section (3-A) in Section 7. That provision has prospective application.
In the said case the Apex Court held that there was no provision in the Act for payment of interest when the same was quantified by the controlling authority and before the Collector was approached for realization. There sufficiency of the compensation/ damages was not in question. Therefore, in the circumstances of that case and as per the provisions applicable under that particular Act, it was held that for the purpose of granting interest, the provisions of Interest Act and Section 34 of CPC are not of any help. It was also held that the appellant therein was not entitled to interest on the amount of gratuity found due to him. This case also has no direct application to the facts of the instant cases.
13. In Indian Carbon Ltd. case (3 supra), it was observed by the Apex Court thus:
13. Now, the words "charging or payment of interest" in Section 9(2) occur in what may be called the latter part thereof. Section 9(2) authorises the sales tax authorities of a State to assess, reassess, collect and enforce payment of the Central sales tax payable by a dealer as if it was payable under the State Act; this is the first part of Section 9(2). By the second part there of, these authorities are empowered to exercise the powers they have under the State Act and the provisions of the State Act, including provisions relating to charging and payment of interest, apply accordingly. Having regard to what has been said in the case of Khemka & Co. (1) it must be held that the substantive law that the States sales tax authorities must apply is the Central Act. In such application, for procedural purposes alone, the provisions of the State Act are available. The provision relating to interest in the latter part of Section 9(2) can be employed by the States' sales tax authorities only if the Central Act makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent. There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax the States' sales tax authorities cannot, for the purpose of collecting and enforcing payment of Central sales tax, charge interest thereon.
That case was a case where there was no statutory provision available under the Central Sales Tax for levying interest, but by invoking the provision under Section 9(2) of the State Act, interest was sought to be levied. Therefore, it was held that such tax can be levied only when the taxing statute makes a substantive provision in that behalf and not otherwise. This case also has no relevance to the facts of these cases.
14. However, much reliance has been placed on the Judgment in K.S.E. Board case (4 supra), which arose under Sections 10 and 16 of the Telegraph Act. There the main question was as to assessment of compensation payable to the owners. While adopting capitalization method for the purpose of assessment, the rate of interest was considered - if 5% return would be a reasonable return and the trees would normally be expected to yield, say for 25 years and more, what is paid as compensation must yield the annual return at 5% which would be equivalent of what the owner of the trees would have obtained had those trees continued to stand in the property for 25 years, but since the trees would cease to yield income at the end of 25 years, the amount paid as compensation must exhaust itself by the end of that period. In other words, it will be as if the amount of income is received only for a period of 25 years. In that event, the determination should be as if an annuity for 25 years is provided for. What amount invested to-day will yield annuity for a specified period will have to be computed. The present value of recurring payments for a specified number of years will have to be worked out. Therefore, it was held that it would be safe to adopt the return on a fixed deposit for the usual period of 63 months as reasonably anticipated return on a long term basis on a safe and prudent investment. The rate of interest on such deposits prevalent for the respective years can be adopted as reasonable rate. However, the question as to payment of interest on the compensation amount as fixed under Section 16(d) of the Telegraph Act did not arise therein. Therefore, all the judgments referred to by the learned counsel for the petitioners are not applicable to the facts of these cases.
15. In fact, as laid down in Ramachandra Rao's case (5 supra) under Section 16 of the Telegraph Act, the exercise of powers by the District Judge are as a Court and not in capacity of persona designata Further, it was held:
... Thus, it is manifest that the determination of civil rights of the kind being normally the duty of the civil courts, the Act has for its object and purpose getting disputes as to the sufficiency of compensation determined finally by the principal court of original jurisdiction without much expense to the parties. The language of the section on its proper construction also makes it clear that reference to the District Judge therein is in no other capacity than that of a Civil Court. As a matter of fact, in sub-clause (4) of the same section, there is a reference to the court of the District Judge. It is reasonably clear that reference to the District Judge is in no manner apart from his capacity as a civil court of principal Jurisdiction. It may further be noted that the Act provides for payment of court fee and issue of process in its Section 34. This is a further indication that the ordinary machinery of a court of civil jurisdiction was being made available for the settlement of dispute...
It was also held that on a true construction of the provisions of the Telegraph Act, it is abundantly clear that the intention of the Act was to obtain determination of civil rights of the kind by a civil Court, the use of expressions the District Judge' or 'a District Judge,' who are presiding Officers of the District Courts, does not militate against any inference as to their being used as synonym for the District Court and such Officers on that account cannot be said to have been selected to exercise the power of a persona designata. Therefore, it is a civil Court for all purposes.
16. Further, the Apex Court in Kerala State Electricity Board v. T.P. Kunhaliumma held as under:
20. The provisions in the Telegraph Act which contemplate determination by the District Judge of payment of compensation payable under Section 10 of the Act indicate that the District Judges acts judicially as a court. Where by statutes, matters are referred for determination by a Court of Record with no further provision the necessary implication is that the court will determine the matters as a Court. (See: National Telephone Co. Ltd. v. The Postmaster-General 1913 AC 546). In the present case the statute makes the reference to the District Judge as the Presiding Judge of the District Court. In many statutes reference is made to the District Judge under this particular title while the intention is to refer to the Court of the District Judge. The Telegraph Act in Section 16 contains intrinsic evidence that the District Judge is mentioned there as the court of the District Judge. Section 16(4) of the Telegraph Act requires payment into the court of the District Judge such amount as the telegraph authority deems sufficient if any dispute arises as to the persons entitled to receive compensation. Again, in Section 34 of the Telegraph Act reference is made to payment of court-fees and issue of processes both of which suggest that the ordinary machinery of a court of civil jurisdiction is being made available for the settlement of these disputes. Section 3(15) of the General Clauses Act states that the District Judge in any Act of the Central Legislature means the Judge of a principal civil court of original jurisdiction, other than the High Court in the exercise of its original civil jurisdiction, unless there is anything repugnant in the context. In the Telegraph Act there is nothing in the context to suggest that the reference to the District Judge is not intended as a reference to the District Court, which seems to be the meaning implied by the definition applicable thereto. The District Judge under the Telegraph Act acts as a civil court in dealing with applications under Section 16 of the Telegraph Act.
(emphasis supplied)
17. In Narayana Dossjee's case (6 supra) it was held by a division Bench of this Court that Section 34 of C.P.C. confers jurisdiction on the Court to award interest at such rate as the Court deems reasonable from the date of the suit to the date of the decree with further reasonable interest on the aggregate sum till the date of payment. The combined effect of definition of "mesne profits' and the provisions of Section 34 of CPC may be stated thus:
interest payable under the definition of 'mesne profits' is a substantive right, whereas the interest payable under Section 34 is a matter of procedure. A person claiming mesne profits, therefore, will be entitled to interest on the mesne profits upto the date of the plaint as part of the mesne profits. The interest payable thereafter till the date of payment and its rate is within the discretionary regulation of the Court.
18. Therefore, the District judge while acting as a civil Court in its discretion may while drawing some inference from other Acts where the interest was made a statutory provision, can award the interest at 9% per annum and the same cannot be said to be either arbitrary or illegal. It also cannot be construed that the District Judge while sitting as a civil Court cannot invoke the provisions of Section 34 CPC for the purpose of granting interest on the enhanced rate of compensation from the date of petition till the date of realization. The payment of interest would arise when the compensation is not paid. In these cases, admittedly, there was a dispute as to sufficiency of the compensation. Therefore the dispute was raised before the learned District Judge, who decided the compensation to be Rs. 1,6007- per tree per annum. Thus, it must be deemed that the authority had illegally withheld Rs. 600/- per tree per annum till the date of realization and as such granting of interest on that amount can neither be said to be unwarranted, arbitrary nor it can be said that in the absence of a statutory provision for awarding interest, awarding such interest by the District Court is illegal or without jurisdiction. The matter has been taken up by the District Judge, who acted as a principal court of original civil jurisdiction and decided the matter and in his discretion by invoking Section 34 of CPC, granted interest at 9%. May be, the District Judge has also drawn analogy as to interest as available under the other Acts, but that itself will not make awarding of interest illegal. In the capacity of a civil Court and acting as a District Judge, the provisions of Section 34 CPC were invoked and interest was awarded. Therefore, the argument advanced by the learned counsel for the petitioners that in the absence of there being a statutory provision for awarding interest the impugned Order passed by the District Judge awarding interest is arbitrary and illegal, cannot be countenanced. The learned District Judge has not committed any error in awarding interest on the enhanced compensation from the date of petition till the date of realization. The respondents are entitled for such interest even in the absence of a statutory provision as to awarding of interest. The interest awarded in these cases is for the delay caused in payment of sufficient compensation. Therefore, the learned District Judge sitting as a civil Court has rightly awarded interest on enhanced compensation. As such, the Civil Revision Petitions are devoid of merits and liable to be dismissed.
19. Accordingly, the Civil Revision Petitions are dismissed. No order as to costs.