Case Note & Summary
The Supreme Court of India, in an appeal by the Union of India against Ajaib Singh and others, considered whether an arbitrator under the Requisitioning and Acquisition of Immovable Property Act, 1952 could award solatium and interest absent statutory provision or special circumstances. Land measuring 26.08321 acres in village Daulatpur, Tehsil Pathankot, District Gurdaspur was acquired under the Act by notification dated 30 October 1969. The Special Land Acquisition Collector awarded compensation at Rs.60 per Marla, which was paid and accepted without protest by the respondents. Approximately eight years later, the respondents raised a dispute regarding quantum and sought reference to an arbitrator. On 30 March 1987, the Additional District Judge, Gurdaspur, acting as arbitrator, awarded compensation at Rs.500 per Marla along with solatium at 30% and interest at 9% per annum for the first year from date of acquisition (31.10.1969) and 15% per annum for subsequent years. The Union of India challenged this award in the High Court of Punjab and Haryana, but the Single Judge dismissed the appeal on 30 July 1987, and the Division Bench dismissed further appeals on 5 April 1990. Special Leave Petitions were filed in the Supreme Court on 21 December 1990, with notice issued only on the question of solatium and interest. The core legal issue was whether the arbitrator's grant of solatium and interest was permissible under the Requisitioning and Acquisition of Immovable Property Act, 1952, given that the Act does not contain provisions for such payments, unlike the Land Acquisition Act. The appellants argued that solatium and interest were not statutorily provided and could not be awarded absent special circumstances; they contended the Government was not at fault for any delay, as the respondents accepted compensation without dispute and had not demanded appointment of an arbitrator. The respondents relied on Union of India v. Hari Krishan Khosla, (1992) 2 SCALE 621, in support of the award. The Court analyzed the provisions and precedents, noting that the Requisitioning and Acquisition of Immovable Property Act, 1952 does not provide for solatium and interest, but such awards have been made in the interest of justice in certain cases. It observed that in Hari Krishan Khosla, awards of solatium and interest were set aside where there was no delay, but upheld where no arbitrator was appointed for sixteen years. In the present case, the respondents failed to establish any delay on the part of the Government in appointing an arbitrator or any protest regarding the compensation amount. There was no evidence that they had earlier disputed the quantum or demanded appointment of an arbitrator; compensation was accepted, and the respondents did not prove it was accepted under protest. Therefore, the arbitrator erred in awarding solatium and interest without determining the existence of a dispute or failure by the Government to refer the matter. The Supreme Court partly allowed the appeals, setting aside the order relating to payment of solatium and interest, with no order as to costs.
Headnote
A) Land Acquisition - Requisitioning and Acquisition of Immovable Property Act, 1952 - Solatium and Interest - No statutory provision for solatium and interest under the Act - Unlike the Land Acquisition Act, the Requisitioning and Acquisition of Immovable Property Act, 1952 does not provide for payment of solatium and interest; such awards can be justified only in interest of justice in special circumstances such as undue delay by the Government in appointing an arbitrator or acceptance of compensation under protest. In the present case, no such circumstances were established. Held that the arbitrator erred in awarding solatium at 30% and interest at 9% for first year and 15% thereafter, and the order relating to solatium and interest was set aside (Paras 1-3). B) Land Acquisition - Requisitioning and Acquisition of Immovable Property Act, 1952 - Reference of Dispute and Delay - Section 8(1)(b) - Burden on claimant to establish dispute and demand for arbitrator - The respondents accepted compensation without protest and failed to show any prior demand for appointment of arbitrator or dispute regarding quantum; the Government was not responsible for delay. Held that without such proof, the award of solatium and interest could not be sustained (Paras 1-3).
Issue of Consideration
Whether the arbitrator under the Requisitioning and Acquisition of Immovable Property Act, 1952 was justified in awarding solatium at 30% and interest at 9% for first year and 15% thereafter in absence of statutory provision and special circumstances such as delay by the Government or protest by claimants.
Final Decision
Appeals partly allowed; order relating to payment of solatium and interest set aside; no order as to costs.
Law Points
- Under Requisitioning and Acquisition of Immovable Property Act
- 1952 there is no statutory provision for solatium and interest
- solatium and interest may be awarded in interest of justice only in special circumstances such as delay in appointing arbitrator or acceptance of compensation under protest
- burden lies on claimant to establish dispute and demand for arbitrator
- absent such circumstances award of solatium and interest is illegal
