Case Note & Summary
The Supreme Court considered an appeal by special leave against an order dated April 5, 1990 of the Division Bench of the Punjab and Haryana High Court in LPA No.444/90. The dispute arose from acquisition of land belonging to the respondents and others, measuring 50.55 acres in village Behar, Tehsil Pathankot, which was requisitioned and subsequently acquired for defence purposes under the Requisition and Acquisition of Immovable Property Act, 1952. The Land Acquisition Officer initially determined compensation at Rs.201 per canal. However, on an application under Section 8 of the Act, the arbitrator by award dated December 6, 1986 determined compensation at Rs.1,000 per canal and also awarded solatium at 30% and interest at 9% per annum for one year from the date of taking possession and at 15% thereafter till the date of deposit. The Union of India challenged this award before the High Court. The learned single Judge dismissed the appeal, and the Division Bench affirmed the dismissal, leading to the present special leave petition. The only question before the Supreme Court was whether the respondents were entitled to the payment of solatium and interest awarded by the arbitrator. The appellants relied on the earlier decision of this Court in Union of India v. Hari Kishan Khosla (1993 Supp. 2 SCC 149), which held that claimants are not entitled to solatium and interest because the Act does not provide for such payments. The respondents argued that the Act provides for determination of just compensation and that all three components form part of such just compensation. The Court rejected this contention, holding that determination of just compensation is with reference to the value of the land acquired under the Act. Since solatium and interest are in addition to the compensation determined under the Act, the arbitrator is devoid of jurisdiction to award them. The Court also noted that during the pendency of the appeal, an order was passed on March 25, 1996 directing the appellants to produce the record of K-Form, and a letter dated December 19, 1995 was placed before the Court stating that the respondents had not received the amount under protest nor made any application for appointment of arbitrator within the stipulated period. However, the Court declined to go into the question of appointment of arbitrator as that order had become final. Consequently, the Supreme Court allowed the appeal to the extent of setting aside the award of solatium and interest, while upholding the determination of compensation at Rs.1,000 per canal. No order as to costs was made.
Headnote
A) Land Acquisition - Compensation - Solatium and Interest Not Payable Under Requisition and Acquisition of Immovable Property Act, 1952 - Section 8 - The arbitrator determined compensation at Rs.1,000 per canal and also awarded solatium at 30% and interest at 9% for one year and 15% thereafter. The Supreme Court held that the Act does not provide for solatium and interest, which are in addition to the value of land, and therefore the arbitrator lacked jurisdiction to award them. The High Court's order upholding solatium and interest was set aside while compensation at Rs.1,000 per canal was upheld. Held that the arbitrator is devoid of jurisdiction to award solatium and interest (Paras Not mentioned).
Issue of Consideration
Whether respondents are entitled to solatium and interest awarded by arbitrator under Requisition and Acquisition of Immovable Property Act, 1952.
Final Decision
Appeal allowed to the extent of awarding solatium and interest; compensation determined at Rs.1,000 per canal upheld. No costs.
Law Points
- Arbitrator under Requisition and Acquisition of Immovable Property Act
- 1952 lacks jurisdiction to award solatium and interest
- just compensation determination relates only to value of land
- solatium and interest are additional components not provided by Act
- High Court erred in upholding such award.
