Case Note & Summary
The dispute involved the requisition and subsequent acquisition of lands belonging to the respondents in village Mola Agri by the Central Government under the Defence of India Act, 1962. The lands were requisitioned in 1963 and acquired in 1965, with compensation determined by the Special Land Acquisition Officer in 1966. Dissatisfied with the compensation, the respondents sought arbitration, leading to awards in 1979 and 1986, which were challenged in the Allahabad High Court. The High Court increased the compensation but modified the interest awarded. The Union of India appealed against the High Court's order, specifically contesting the award of interest at 6% per annum. The court examined whether interest could be awarded despite the Act's silence on the matter. It noted that previous judgments upheld the validity of the Act's provisions, which did not include interest or solatium, but also recognized that courts could award interest on equitable grounds for delayed payments. The court concluded that interest was justified due to the significant delay in compensation payment and upheld the High Court's decision to award interest at 6% per annum from the date of acquisition. The appeals were dismissed, affirming the award of interest.
Headnote
A) Land Acquisition - Award of Interest - Interest on Compensation - Defence of India Act, 1962, Section 36, 37 - The court upheld the award of interest at 6% per annum on compensation for requisitioned property acquired under the Defence of India Act, 1962, despite the absence of statutory provisions for interest, citing equitable grounds due to significant delays in payment. Held that interest is payable from the date of acquisition, not requisition (Paras 11-12).
Issue of Consideration
Whether the award of interest by the High Court on the compensation for acquisition of requisitioned property under the Defence of India Act, 1962 is impermissible.
Final Decision
The Supreme Court upheld the award of interest at 6% per annum on the compensation amount, dismissing the appeals of the Union of India.
Law Points
- Interest on compensation
- equitable grounds
- delay in payment
- Defence of India Act
- 1962
- compensation determination
