# M/S PERIYAR & PAREEKANNI RUBBERS LTD v. STATE OF KERALA

- **Citation:** [2015] 11 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 2015-09-14
- **Case number:** Civil Appeal Nos. 7034-7037 of2015
- **Bench:** V. Gopala Gowda, Adarsh Kumar Goel
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-periyar-pareekanni-rubbers-ltd-v-state-of-kerala-30282
- **Pages:** 30

## Headnote

B
Land Acquisition Act, 1894- ss. 23(1A), 28, 34- Land
acquisition - Claim of solatium for the enhanced amount of c
compensation and interest thereof- Interest on solatium -
Date of payment of solatium -Acquisition of rubber estate -
Award passed for solatium and interest on compensation
including solatium - As regards enhanced compensation,
High Court upheld that solatium is payable by State D
Government for the enhanced compensation awarded for the
market value of the entire land, thus, it provided solatium for
that porlion of land value based on the capitalization method
of yielding rubber trees and directed the respondents to
compute balance amount payable under the decree -
E
However, the High Courl awarded the interest on solatium
w.e.f. 19.09.2001, the date of judgment delivered by
Constitution Bench in Sunde r's case instead offrom the date
of their entitlement under the provisions of ss. 23(1 A) and 28
- On appeal, held: In view of difference of opinion between F
two judges, matter referred to larger Bench.
Referring the matter to larger Bench, the Court
PER V. GOPALA GOWDA.J:
G
HELD: 1.1 From the interpretation of provisions of
Sections 11, 15, 23, 24 and 31 of the Land Acquisition
Act, 1894, it is clear that the amount of compensation in
the Collector's Award includes not only the amount H
1
2
SUPREME COURT REPORTS
[2015] 11 S.C.R.
A determined under Section 23(1) of the Land Acquisition
Act, 1894 but also the additional amount of solatium as
stipulated under Section 23(2) and amount payable
under Section 23(1A) of the Act. [Para 21] [15-G-H; 16-A]
B
1.2 The judgment rendered by the Constitution
Bench of this Court in Sunder's case is the binding
precedent on the question of payment of legislative
statutory interest payable on solatium under Sections
23(1A), 28 and 34 of the Act which cannot be deprived to
C the claimant/decree holde·r by the court. As the said
judgment is binding upon the State Government it cannot
contend that it is not liable from the date as provided
under the provisions of the Act. [Para 25] [19-G-H; 20-A]
D
1.3 The Constitution Bench judgment in Sunder's
case is aptly applicable to the fact situation of the instant
case for the reason that the enhanced compensation
includes the solatium @30% as provided under Section
23(2) of the Act. Therefore, the claimant/decree holder is
E entitled for the interest on the solatium component which
is part of the compensation payable by the State
government to the claimant. The Execution Court held
that the claimant/decree holder company is entitled to
claim solatium only in respect of the enhanced
F compensation provided for the land alone which has
been separately fixed, but, not in respect of that portion
of market value of the land based on capitalization
method of the yielding rubber trees for the planted area
which was separately fixed by the Reference C::ourt in
G its Award. The High Court was right in holding that the
claimant is entitled for the interest not only in respect of
the land but also with respect to the trees standing on
the land of which the market value is determined by the
H Reference Court. However, it awarded the interest on
M/S PERIYAR & PJ\REEKANNI RUBBERS LTD. v. STATE
3
er KERALA
solatium from 19.09.2001 and not for the prior period by A
placing reliance on Gurpreet Singh case. [Para 26] [20B-F]
1.4 From the facts of the instant case and in the
light of law laid down on the question of payment of B
interest on solatium by the Constitution Bench in
Sunder's case, it is amply clear that the said case is the
binding precedent. As far as Gurpreet Singh's case is
concerned, the question which arose for its
consideration was only with regard to the rule of C
appropriation in execution of the Award passed under
the provisions of the Act. While answering the said
question of law after referring to the relevant provisions
of the Act, it incidentally made some observation with
regard to the payment of interest on solatium which is D
only

## Text

_Characters 0–39,906 of 52,368. This is a partial read: ask again with offset=39906 for what follows._

[2015] 11 S.C.R. 1
M/S PERIYAR & PAREEKANNI RUBBERS LTD.
A
v.
STATE OF KERALA
(Civil Appeal Nos. 7034-7037 of2015)
SEPTEMBER 14, 2015
[V. GOPALA GOWDA AND ADARSH KUMAR GOEL, JJ.]
B
Land Acquisition Act, 1894- ss. 23(1A), 28, 34- Land
acquisition - Claim of solatium for the enhanced amount of c
compensation and interest thereof- Interest on solatium -
Date of payment of solatium -Acquisition of rubber estate -
Award passed for solatium and interest on compensation
including solatium - As regards enhanced compensation,
High Court upheld that solatium is payable by State D
Government for the enhanced compensation awarded for the
market value of the entire land, thus, it provided solatium for
that porlion of land value based on the capitalization method
of yielding rubber trees and directed the respondents to
compute balance amount payable under the decree -
E
However, the High Courl awarded the interest on solatium
w.e.f. 19.09.2001, the date of judgment delivered by
Constitution Bench in Sunde r's case instead offrom the date
of their entitlement under the provisions of ss. 23(1 A) and 28
- On appeal, held: In view of difference of opinion between F
two judges, matter referred to larger Bench.
Referring the matter to larger Bench, the Court
PER V. GOPALA GOWDA.J:
G
HELD: 1.1 From the interpretation of provisions of
Sections 11, 15, 23, 24 and 31 of the Land Acquisition
Act, 1894, it is clear that the amount of compensation in
the Collector's Award includes not only the amount H
1
2
SUPREME COURT REPORTS
[2015] 11 S.C.R.
A determined under Section 23(1) of the Land Acquisition
Act, 1894 but also the additional amount of solatium as
stipulated under Section 23(2) and amount payable
under Section 23(1A) of the Act. [Para 21] [15-G-H; 16-A]
B
1.2 The judgment rendered by the Constitution
Bench of this Court in Sunder's case is the binding
precedent on the question of payment of legislative
statutory interest payable on solatium under Sections
23(1A), 28 and 34 of the Act which cannot be deprived to
C the claimant/decree holde·r by the court. As the said
judgment is binding upon the State Government it cannot
contend that it is not liable from the date as provided
under the provisions of the Act. [Para 25] [19-G-H; 20-A]
D
1.3 The Constitution Bench judgment in Sunder's
case is aptly applicable to the fact situation of the instant
case for the reason that the enhanced compensation
includes the solatium @30% as provided under Section
23(2) of the Act. Therefore, the claimant/decree holder is
E entitled for the interest on the solatium component which
is part of the compensation payable by the State
government to the claimant. The Execution Court held
that the claimant/decree holder company is entitled to
claim solatium only in respect of the enhanced
F compensation provided for the land alone which has
been separately fixed, but, not in respect of that portion
of market value of the land based on capitalization
method of the yielding rubber trees for the planted area
which was separately fixed by the Reference C::ourt in
G its Award. The High Court was right in holding that the
claimant is entitled for the interest not only in respect of
the land but also with respect to the trees standing on
the land of which the market value is determined by the
H Reference Court. However, it awarded the interest on
M/S PERIYAR & PJ\REEKANNI RUBBERS LTD. v. STATE
3
er KERALA
solatium from 19.09.2001 and not for the prior period by A
placing reliance on Gurpreet Singh case. [Para 26] [20B-F]
1.4 From the facts of the instant case and in the
light of law laid down on the question of payment of B
interest on solatium by the Constitution Bench in
Sunder's case, it is amply clear that the said case is the
binding precedent. As far as Gurpreet Singh's case is
concerned, the question which arose for its
consideration was only with regard to the rule of C
appropriation in execution of the Award passed under
the provisions of the Act. While answering the said
question of law after referring to the relevant provisions
of the Act, it incidentally made some observation with
regard to the payment of interest on solatium which is D
only an obiter but not the binding precedent as that
question did not fall for consideration before the
Constitution Bench. For the reason that the binding
precedent laid down by the Constitution Bench of this
Court in Sunder's case on the question of payment of E
interest on the solatium to the claimant/decree holder
from the date of entitlement as provided under the
provisions of the Act. [Para 30] [25-H; 26-A-E]
1.5 In view of the reasons assigned with reference F
to Sunder and Gurpreet Singh cases, the impugned
common judgment and order with regard to awarding
interest payable on solatium w.e.f. 19.09.2001 is vitiated
in law. Accordingly, that portion of the impugned
judgment and order is set aside. The responde'nt-State G
Government is directed to pay interest as provided under
Sections 23(1A) and 28 of the Act on the compensation
determined including solatium under Section 23(2) of the
Act. The respondent-State Government is further H
4
SUPREME COURT REPORTS
[2015] 11 S.C.R.
A directed to compute the same with reference to the
compensation awarded by the Reference Court from the
date when the claimant decree holder is entitled strictly
in accordance with the said provisions of the Act
B
c
D
E
F
G
H
including the solatium. [Para 30] [26-E-H; 27-A]
Sunderv. Union of/ndia (2001) 7 SCC 211: 2001
(3) Suppl. SCR 176 - followed.
Gurpreet Singh v. Union of India (2006) 8 SCC
457:
2006 (7) Suppl. SCR 422 - held
inapplicable.
Prem Nath Kapur v. National Fertilizers
Corporation. Of India Ltd. (1996) 2 SCC 71: 1995
(5) Suppl. SCR 790; Union of India v. Ram Mehar
(1973) 1 sec 109: 1973 (2) SCR 120; Mir
Fazeelath Hussain v. Special Deputy Collector,
Land Acquisition (1995) 3 SCC 208: 1995 (2)
SCR 985; Yadavrao P. Pathade v. State of
Maharashtra (1996) 2 SCC 570: 1996 (1) SCR
965; Periyar & Pareekanni Rubbers Ltd. v. State
of Kera/a (1991) 4 SCC 195; Sunder v. Union of
India (2000) 10 SCC 470; Kapur Chand Jain &
Ors. v. State Government of H.P. & Ors (1999) 2
SCC 89; State of Gujarat v. Vakhatsinghji
Vajesinghji Vaghela AIR 1968 SC 1481: 1968
SCR 692; Satinder Singh v. Umrao Singh AIR
1961 SC 908: 1961
SCR
676; H.H.
Maharajadhiraja Madhav Rao Jivaji Rao Scindia
Bahadur & Ors. v. Union of India AIR 1971 SC
530: 1971 (3) SCR 9; Director of Settlement v.
M.R. Apparao (2002) 4 SCC 638: 2002 (2) SCR
661; Deena v. Union of India (1983) 4 SCC 645:
1984 (1) SCR 1; CCE v. Ratan Melting & Wire
Industries (2008) 13 SCC: 20!18 (14) SCR 653
- referred to.
MIS PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE
5
OF KERALA
PER ADARSH KUMAR GOEL. J: !DISSENTING)
A
Appellants relied upon* Land Acquisition Officer and
Asstt. Commnr. Vs. Shivappa Maf/appa Jigalurwhich laid
down that the question of payment of interest
subsequent to 19-9-2001 did not arise, whereas the B
counsel for the State submitted that the judgment in
Shivappa's case did not apply to the instant case as the
award dated 19th November, 1992 had attained finality.
The counsel for the State relied upon **Chimanlal
Kuberdas Modi vs. Gujarat Industrial Development Corpn. C
which laid down that the execution court cannot examine·
the reasons so as to go behind the decree but if in the
award passed, the Reference Court makes a specific
reference to payment of interest but without any such
reference to the payment of interest on solatium and D
merely payment of interest on compensation is granted,
then it would be open to the executing court to apply
the ratio of Sunder and declare that the compensation
awarded includes solatium, and consequently, interest
on the amount could be directed to be deposited in E
execution. That being the legal position as prevailing
today, the observations made in the said judgment in
Gurpreet Singh cannot be ignored and it is ordered
accordingly that compensation awarded includes
solatium and therefore interest ori the said amount shall F
. be paid by the respondent in the pending execution. So
long as judgments relied upon by counsel for the State
stand, the appellant cannot succeed. Any contrary view
can be taken only by a larger Bench. Thus, the matter is G
placed before a Bench of 3-Judges. [Paras 2- 4] [28-F;
29-E-H; 30-A-E]
**Chimanlal Kuberdas Modi vs. Gujarat Industrial
Development Corpn. (2010) 10 SCC 635: 2010
(13) SCR 722; Nadirsha Shapurji Patel vs.
H
6
SUPREME COURT REPORTS
(2015) 11 S.C.R.
A
Collector & LAO (2010) 13 SCC 234: 2010 (15)
SCR 516; Chhanga Singh vs. Union of India
(2012) 5 sec 763: 2012 (4) SCR 27~ - relied
on.
B
Gurpre9t Singh VS. Union of India (2006) 8 sec
457: 2006 (7) Suppl. SCR 422; *Land
Acquisition Officer and Asstt. Commnr. vs.
Shivappa Mallappa Jigalur (2010) 12 SCC 387:
2010 (7) SCR 833- referred to.
c
Case Law Reference
In the Judgment of Adarsh Kumar Goel, J
1995 (5) Suppl. SCR 790
D 1973 (2) SCR 720
1995 (2) SCR 985
1996 (1) SCR 965
E (1991) 4 sec 195
12000) 10 sec 470
(1999) 2 sec 89
1968 SCR 692
F 1961 SCR 676
2001 (3) Suppl. SCR 176
referred to.
Para 11
referred to.
Para 16
referred to.
Para 16
referred to.
Para "16
referred to.
Para 17
referred to.
Para 19
referred to.
Para 19
referred to.
Para 21
referred to.
Para 22
followed.
Para 26, 30
2006 (7) Suppl. SCR 422
held
G 1971 (3) SCR 9
2002 (2) SCR 661
1984 (1) SCR 1
H 2008 (14) SCR 653
inapplicable. Para 27
referred to.
referred to.
referred to.
referred to.
Para 28
Para 29
Para 29
Para 29
'MIS PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE
7
OF KERALA
In the Judgment of Adarsh Kumar Goel, J
A
2006 (7) Suppl. SCR 422
referred to.
Para 2
2010 (7) SCR 833
referred to.
Para 3, 4
2010 (13 ) . SCR 722
relied on.
Para 4
2010 (15) SCR 516
relied on.
Para 4
B
2012 (4) SCR 275
relied on.
Para 4
CIVILAPPELLATE JURISDICTION: Civil Appeal Nos.
7034-7037 of 2015
From the Judgment and Order dated 07 .04.2010 of the C
High Court of Kerala at Ernakulam in CRP Nos. 196, 199,
205 of2009.
by
V. Giri, M. P. VinodfortheAppellant.
Bina Madhavan for the Respondent.
The Judgments and Order of the Court were delivered
V; GOPALA GOWDA, J. 1. Leave granted.
2'. These appeals by special leave are directed against
D
E
the impugned common judgment and order dated 07 .04.2010
passed by the High Court of Kerala at Ernakulam in Civil
Revision Petition Nos. 196, 199, 205 and 208 of 2009 (filed
F
against the order dated 15.10.2008 of the learned Sub-Judge,
Erna~ulam-the Execution Court), wherein the dispute between
the parties related to the claim of solatium for the enhanced
amount of compensation and interest thereon in respect of G
the a,cquired land. The High Court has confirmed that solatium
is pa~able on that portion of land value based on capitalization
method of yielping rubber trees and directed to compute
balance amount payable under the decree, but awarded the
interest on solatium from 19.09.2001, the date when judgment H
8
SUPREME COURT REPORTS
(2015) 11 S.C.R.
A
by the Constitution Bench in the case of Sunder v. Union of
lndia1 was delivered by this Court and not for the prior period.
The legality and validity of the impugned judgment and order
is seriously challenged urging various legal contentions as the
appellant is aggrieved by the denial of the interest payable on
B the component of solatium under Sections 23(1A), 23(2) read
with Sections 28 and 34 of the Land Acquisition Act, 1894 (for
short "the Act"). The solatium being the component of
compensation payable to the claimanUdecree holder, the
restriction upon its payment by the High Court placing reliance
C upon another subsequent Constitution Bench judgment of this
Court in the case of Gurpreet Singh v. Union of lndia2 is
hereby challenged.
D
3. The brieffacts of the case are stated hereunder:-
Various portions of rubber estate of the appellant situated
in village Kuttamangalam was acquired by the State
Government in exercise of its eminent domain power pursuant
to the notification dated 10.10.1978 issued under Section 4(1)
E of the Act for the purpose of Periyar Valley Irrigation Project.
4. In 1980 and 1981 Awards were passed by the Land
Acquisition Officer awarding compensation, on the market
value of land which were partly based on capitalization method
F of the yielding rubber trees for the planted area and partly
based on the value of bare land on which there were no yielding
rubber plantation. Awards included solatium and interest on
compensation including solatium.
G
5. Being dissatisfied with the compensation, the appellant
filed Land Acquisition Reference (LAR) Nos. 425, 42",7, 428,
429, 432, 434, 435, 456, 458 and 463 of 1988 before the
Court of 111 Additional Sub-Judge, Ernakulam (the R1~feirence
Court) under Section 18 of the Act.
H
1 (2001) 1 sec 211
2 c2006) a sec 457
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE
9
OF KERALA [V. GOPALAGOWDA, J.]
6. The Reference Court after perusal of the record, by A
its common judgment, passed an Award on 19.11.1992 by
enhancing the compensation partly based on capitalization
method ofthe yielding rubber trees for the planted area and
partly based on the value of bare land on which there were no
rubber trees. The Reference Court held that the claimant is B
entitled to get 30% solatium, 12% additional market value from
the date of the notification i.e., 10.10.1978 till the date of Award
passed against it and they are also entitled to get 9% interest
for the first one year from the date of dispossession and
thereafter at 15% till realization of the compensation awarded C
in favour of the claimant/decree holder.
7. In some of the abovesaid LARs, payments were made
by respondent-State in full and final settlement of the enhanced
compensation, solatium and. interest on compensation D
including solatium. With respect to the remaining cases, the
appellantfiled Execution Petition Nos. 152, 147, 146, 149 and
145 of 1996 before the Execution Court for execution of the
Award/decree passed by the Reference Court.
8. The Execution Court on 15.10.2008 passed an order
fixing balance amount payable by the State government after
excluding solatium on that portion of the market value of the
acquired land based on capitalization method of the yielding
rubber trees for the planted area.
9. Being aggrieved by the said order of the Execution
Court, the. appellant filed Civil Revision Petition (CRP) Nos.
196, 199, 201, 205 and 208 of 2009 before the High Court of
Kera la.
E
F
G
10. The High Court on 07.04.2010 passed the common
impugned judgment and order in the said CRPs confirming
that the solatium is payable by the state government for the
enhanced compensation awarded for the market value of the
H
10
SUPREME COURT REPORTS
[2015] 11 S.C.R.
A
entire land. Thus, it provided solatium for that portion of land
the value of which was based on the capitalization method of
yielding rubber trees and directed the respondents to compute
balance amount payable under the decree. However, the High
Court awarded the interest on solatium w.e.f. 19.09.2001, the
B date of judgment delivered by Constitution Bench in Sunder's
case (supra) instead offrom the date of their entitlement under
the provisions of Sections 23(1A) and 28 of the Act. Hence,
these appeals are filed by the appellant urging various grounds.
C
11. Mr. V. Giri, learned senior counsel on behalf of the
appellant contended that the Awards in the instant case were
passed in 1980 and 1981 and the Reference Court judgment
and Award was passed in 1992, the time when there was no
dispute regarding the payment of interest on solatium. It is only
D in 1995 when this Court passed a judgment in the case of
Prem Nath Kapur v. National Fertilizers Corporation. Of
India Ltd. 3 which barred the payment of interest on solatium.
But the decision in Prem Nath Kapur's case was
subsequently reversed in Sunder's (supra) case. Therefore,
E there was no justification and reason for the High Court to
restrict the payment of interest on solatium prior to 19.09.2001
by applying the observations made at paragraph 54 in the case
of Gurpreet Singh (supra).
F
12. The learned senior counsel has further contended
that the respondent-State has already settled few cases
covered by the Reference Court judgment by paying the full
compensation, solatium and interest on compensation
including solatium without any dispute. It shows that there was
G no dispute between the parties as to the payment of interest
on solatium by the respondents. Before the Execution Court,
the dispute raised by the respondent-State was as to the
amount of land value on which solatium was to be computed.
H '(1996) 2 sec 71
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE
11
OF KERALA [V. GOPALA GOWDA, J.]
13. On the other hand, Ms. Bina Madhavan, learned A
counsel on behalf of the respondent-State government sought
to justify the impugned common judgment and order by placing
strong reliance upon paragraph 54 of Gurpreet Sing h's case
(supra), which is extracted in the reasoning portion of this
judgment.
B
14. She further contended that the interest on solatium
can be claimed only in pending execution cases and not in the
closed cases and the execution courts are entitled to permit
its recovery by the claimant/decree holder from 19.09.2001
C
i.e., from the date of judgment in Sunder's case and not for
any prior period.
15. With reference to the aforesaid rival legal
submissions urged by the learned counsel on behalf of the D
parties, this Court is required to examine the correctness of
the impugned common judgment order passed in the aforesaid
CRPs by the High Court in restricting the payment of statutory
interest payable on the solatium component by placing reliance
upon the cases of Sunder and Gurpreet Singh (supra). In
E
this connection, this Court is required to find out as to whether
the payment of interest on solatium is the legislative statutory
right conferred upon the land loser/claimant recognised by the
Constitution Bench in Sunder's case. The High Court in the
light of observations made in Gurpreet Singh's case (supra)
F
at paragraph 54 has fixed the date of payment of interest
payable on the solatium to the claimant/decree holder with
effect from 19.09.2001. The correctness of the same is also
required to be examined by this Court.
16. For the aforesaid purpose, it would be necessary to
refer to the question of law as referred to in Sunder's case
(supra) wherein this Court deals with the conflicting decisions
rendered on one hand in Union of India v. Ram Mehar (three
'(1973) 1 sec 109
G
H
'
12
SUPREME COURT REPORTS
[2015) 11 S.C.R.
A
Judge Bench) and on the other, in later decisions of co-equal
Benches of this Court viz., Mir Fazeelath Hussain v. Special
Deputy Collector, Land Acquisition5, Prem Nath Kapur
(supra) and Yadavrao P. Pathade v. State of Maharai;htra6•
B
17. lnthecaseofUnionoflndiav. RamMehar(supra)
this Court after examining the scope of the expression "market
value" in Section 4(3) of the Land Acquisition (Amendment
and Validation) Act, 1967, held that solatium cannot form part
of the market value of the land, ratherthe "market value" is only
C one of the components to be reckoned with in the determination
of the amount of compensation. The relevant para 7 of the
decision reads thus :
"7 ..... If market value and compensation were intended
0
by the legislature to have the same meaning it is difficult
to comprehend why the word "compensation" in Section
28 and 34 and not "market value" was used. The key to
the meaning of the word "compensation" is to be found
in Section 23(1) and that consists (a) of the market value
E
of the land and (b) the sum of 15% on such market value
which is stated to be the consideration for the compulsory
nature of the acquisition. Market value is therefore only
one of the components in the determination of the amount
of compensation. If the Legislature has used the word
F
"market value" in Section 4(3) of the Amending Act of
1967 it must be held that it was done deliberately and
what was intended was that interest should be payable
on the market value of the land and not on the amount of
compensation otherwise there was no reason why the
G
Parliament should not have employed the word
"compensation" in the aforesaid provision of the
Amending Act."
H
5 (1995) 3 sec 20s
• (1996) 2 sec 570
(emphasis supplied)

14
A
B
c
D
E
F
.G
H
SUPREME COURT REPORTS
[2015] 11 S.C.R.
Prem Nath Kapurv. National Fertilizers Corpn. of India
Ltd. and Yadavrao P. Pathade v. State of Maharashtra
on the other. The later three-Judge Bench judgments have
taken the view that solatium is not a part of compensation.
However, in none of the later three-Judge Bench
judgments the earlier view of the three-Judge Bench
judgment in the case of Union of India v. Ram Mehar
that solatium is a part of compensation, has been noticed
or considered. Consequently, in our view, this matter
requires to be decided by a Constitution/larger Bench of
this Court. We, therefore, direct that the papers may be
placed before Hon'ble the Chief Justice of India for
placing the appeals arising out of these proceedings for
final disposal before an appropriate Constitution/larger
Bench of this Court.
Prior to Sunder's Case (two Judge Bench), similar
reference was made in Kapur Chand Jain & Ors. v. State
Government of H.P. & Ors9 , the relevant paras of which read
thus:-
"3. Learned counsel for the petitioners invited our
attention to a three-Judge Bench judgment of this Court
in Union of India v. Ram Mehar and also later two
decisions of two-Judge Benches of this Court in Periyar
and Pareekanni Rubbers Ltd. v. State of Kera/a and
Narain Das Jain v. Agra Nagar Mahapalika. REilying on
these judgments, he submitted that for applicability of
Section 28 of the Land Acquisition Act, 1894 solatium
has to be considered as a component of compensation
and interest could be paid thereon; and that the High Court
has wrongly not granted interest on solatium. However,
there is another three-Judge Bench judgment of this Court
in Prem N.ath Kapur v. National Fertilizers Corpn. of
India Ltd. wherein a contrary view is taken and it has
• (1999) 2 sec 89
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE
15
OF KERALA [V. GOPALAGOWDA, J.]
been held, that no interest is payable on solatium under A
Section 23(2) or on additional amount payable under .
Section 23(1-A). For coming to that conclusion, the
Bench of three learned Judges relied upon another
decision of this Court in P. Ram Reddy v. Land
Acquisition Officer.
B
,,
4. In view of this conflict of decisions and also in view of
the further fact that the three-Judge Bench of this Court
in Prem Nath Kapur had no opportunity to refer to the
earlier decision of a three-Judge Bench in Ram Mehar c
we direct that these special leave petitions be placed
for decision before a th_ree-Judge Bench of this Court.
The office may obtain suitable orders from the Hori'ble
Chief Justice." ~
20. The question of reference to Constitution Bench in
Sunder's case (supra) reads thus:-
•c
"Is the State liable to pay interest on the amount envisaged
under Section 23(2) of the Land Acquisition Act, 1894 ?"
In other words, the question was whether for the purpose
of Section 28 read with Section 34 of the Act, solatium is a
part of compensation. The answer was in affirmation to the
reference question by the Constitution Bench. By answering
D
E
the said question it laid down the .law with regard to the question
F
of payment of interest.
21. From the interpretation of provisions of Sections 11,
15, 23, 24 and 31 of the Act and after placing reliance upon
the decision of this Court in State of Gujarat v. Vakhatsinghji G
Vajesinghji Vaghela 10, it is clear that the amount of
compensation in the Collector's Award includes not only the
. amount determined under Section 23(1) of the Act but also
the additional amount of solatium as stipulated under Section
10 AIR 1968 SC 1481
H
! I
I
I
16
SUPREM
0
E COURT REPORTS
· [2015] 11 S.C.R: .
I
. '
~' ,-< ' • .
'
·. I', -
A 23(2) of the Act. The relevant paragraph 9 of the said case
reads thus:
1
" •
·
·
8
c
. '
~9: ....... The collector has to make an; award of
compensation under. Section 11 and having regard to
Sec. 15 in determining the amount of compensation, he
is guided by the provisions of Section 23 and 24. Section
23 (1) requires an aware! of the markefvalue of the land.
Section 23 (2) requires an additional award of a sum of
fifteen percentl.lm on such market value, in consideration
I,
-
I
,
of the compulsory nature of acquisition., .. ." · ·
.
.
,. -
.. .
22. Further, from the reading of Sections 28 a_nd 34 of
the Act, it is clear that the 'purpose of interest' is to compensate
an unpaid landowner who, on the one hand has been deprived
D of the possession of his land in pursuance of compulsory
acquisition by the State Government in exercise of its eminent
domain power and on the other hand, has also been kept out
of the use of the money due to him for.the acquisition by not
being paid the money, :in full or in part, in lieii of: taking
E · possession. Reliance is placed on the decision of this Court .
in the ease of Satinder Singh v. Umrao Singh11 at paragraph
~
F
G
19, whiCti reads thus:
"
·r ·" .· <'
.
I '
,,,,
t t. ·:
_ -.,
••·
., I
"
...
'"' '
i.,,. ·
, . "19 •.. : ... When a claim for payment of interest is made.
by a person.whose· irrirnovabJi;, property has been•
acquired compulsorily he is riot making claill). for
damages properly or technically so called; he is basing
his claim on the general rule that if he is deprived of his
land he should be put in possession of compensation
"immediately; if not, in lieu of possession taken.by
compulsory acquisition interest should be p~d to h!m
on the said amount of compensation .... " . · · · ·
;,
.
\
·-"
~-
,
_. '· ._.,:,
. ,·,·.~'--·- •,
. ··--r
. 23.'. Section 34 of the Act provides for the payment of
interest on "amount of such compensation". The word "such".
H
.
" AIR 1961SC908
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE
17
OF KERALA [V. GO PALA GOWDA, J.]
makes the reading of Section 34 read along with Section 31
A
necessary. Section 31 of the Act provides for the payment of
compensation or deposit of the same in Court. Section 31 ( 1)
says "On making an Award under Section 11; the Collector
shall tender payment of the compensation awarded by him to
the persons interested. entitled thereto according to the B
Award ..... ~ Further, Section 28 of the Act provides for the
direction which may be made to the Collector to pay the interest
, < "I
'
-
--1 ·
-
•
·
.
on excess compensation. It says "If the sum which, in the opinion
o(ihe' 'court, the Collector ought to I have awarded as
compensation is in excess of the sum which the Collector did C
award as compensation ..... " Thus, it is clear from Section 34
read with Section 31 and the term "sum" under Section 28 of ·
the Act that the Award includes not onl{the sum as is
detemiined under Section 23(1) of theAct b_ut also the amounts
payable' under Section 23(1A) and Section 23(2). The same
has· been held· by the Constitution Bench of this Court in
Sunder'$ case, the relevant paragraph 23 of which reads thus:
•,:;
ii (i; ; ; .' • •' ! ·,
''
'
' t ', •
•
•
'
I
"23 .. , '.We make it clear that the compensation awarded
.. , would include not only the total sum arrived at as per subsection (1) of Section 23 but the remaining sub-sections
. . , , thereof a~ well. It is thus. clear from Section 34 that the
expression "awarded amount" would mean the amount
.•. . of cornpensation worked out in accordance with the
: ' .• provisions contained in Section 23; including all the sub-
••
..
.
.
.
.
I
, sectionst~ereof." ,:,,,,u .. ,, ·..
, , --· 1
D
E
F
24. After adverting tci'Sections 34, 28, 23(1); 23(1A),
23(2), 24, 26 and 31 of the Act; the Constitution Bench in
Sunder's.case (supra) answered the question regarding G
payment of interest oh solatium in affirmation holding that
Section 26 of the Act does not say that the Award would contain
only the amounts granted under Section 23 (1) of the Act. It
was further held that there can be no doubt that all the three
heads specifie"d ln the three sub-sections of Section 23 of the H
..
. ..
18
SUPREME COURT REPORTS
[2015) 11 S.C.R.
A
Act are the sums to be awarded by the court. The words "every
award under this Part" in Section 26(1) of the Act cannot be
treated as the Award after delinking the amounts awarded
under sub-Section (1A) or sub-Section (2) of Section 23 of
the Act. Further in paragraphs 20, 21 and 23 in Sunder's case
B (supra), the Constitution Bench has held as underc
D
E
F
G
H
"20 ... whether exclusion of the factor" any disinclination
of the person interested to part with the land acquired"
from being considered as part of the compensation
indicated in Section 24 of the Act would be of any aid for
excluding solatium from the purview of interest accrual
process .... "
"21. It is apposite in this context to point out that during
the enquiry contemplated under Section 11 of the Act
the Collector has to consider the objections which any
person interested has stated pursuant to the notice given
to him. It may be possible that a person so interested
would advance objections for highlighting his
disinclination to part with the land acquired on account
of a variety of grounds, such as sentimental or religious
or psychological or traditional etc. Secti1Jn 24
emphasises that no amount on account of any
disinclination of the person interested to part with the land
shall be granted as compensation. That aspect is
qualitatively different from the solatium which the
legislature wanted to provide "in consideration of the
compulsory nature of the acquisition."
xxx
xxx
xxx
23. In deciding the question as to what amount would
bear interest under Section 34 of the Act, a peep into
Section 31(1) of the Act would be advantageous. That
sub-section says:-
31. (1) On making an award under Section 11, the
Collector shall tender payment of the compensation
MIS PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE
19
OF KEP.ALA [V. GOPALAGOWDA, J.]
awarded by him to the persons interested entitled A
thereto according to the award, and shall pay itto them
unless prevented by some one or more of the
contingencies mentioned in the next sub-section ...... "
Further, in the said case, after adverting to Section 34 of B
the Act, this Court held thus:-
"24. The proviso to Section 34 of the Act makes the
position further clear. The proviso says that "if such
compensation" is not paid within one year from the date
of taking possession of the land, interest shall stand C
escalated to 15% per annum 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 D
inconceivable that the solatium amount would attract only
the escalated rate of interest from the expiry of one year
and that there would be no interest on solatium during
the preceding period. What the legislature intended was
to make the aggregate amount under Section 23 of the
E
Act to reach the hands of the perspn as and when the
award is passed, at any rate as soon as he is deprived
of the possession of his land. Any delay in making
payment of the said sum should enable the party to have
interest on the said sum until he receives the payment.
F
Splitting up the compensation into different components
for the purpose of payme.rit of interest under Section 34
was not in the contemplation of the legislature when that
section was framed or enacted."
25. The judgment rendered by the Constitution Bench
of this Court in Sunder's case (supra) is the binding precedent
G
on the question of payment.of legislative statutory interest
payable on solatium under Sections 23(1A), 28 and 34 of the
Act which cannot be deprived to the claimanUdecree holder H
20
SUPREME COURT REPORTS
[2015] 11 S.C.R.
A
by the court. As the said judgment is binding upon the State
Government it cannot contend that it is not liable from the date
as provided under the provisions of the Act.
2fi. The Constitution Bench judgment in Sunder''s case
B (supra) is aptly applicable to the fact situation of the present
case for the reason that the enhanced compensation includes
the solatium @ 30% as provided under Section 23(2) of the
Act. Therefore, the claimanVdecree holder is entitled for the
interest on the solatium component which is part of the
C compensation payable by the State government to the
claimant. The Execution Court held that the claimanVdecree
holder company is entitled to claim solatium only in respect of
the enhanced compensation provided for the land alone which
has been separately fixed, but, not in respect of that portion of
D market value of the land based on capitalization method of the
yielding rubber trees for the planted area which was separately
fixed by the Reference Court in itsAward. The High Court was
right in holding that the claimant is entitled for the interest not
only in respect of the land but also with respect to thE~ trees
E standing on the land of which the market value is determined
by the Reference Court. However, it awarded the interest on
solatiuni from 19.09.2001 and not for the prior period by placing
reliance on Gurpreet Singh case (supra), the relevant
F paragraph 54 of which is extracted hereunder:-
G
H
"54. One other question also was sought to be raised
and answered by this Bench though not referred to it.
Considering that the question arises in various cases
pending in courts all over the country, we permitted the
counsel to address us on that question. That question is
whether in the light of the decision in Sunder, the
awardee/decreecholder would be entitled to claim
interest on solatium in execution though it is not specifically
granted by the decree. It is well settled that an execution
M/S PERIYAR & PP.~EEKANNI RUBBERS LTD. v. STATE
21
OF KERALA [V. GOPALA GOWDA, J.]
court cannot go behind the decree. If, therefore, the claim A
for interest on solatium had been made and the same
has been negatived either expressly or by necessary
implication by the judgment or decree of the Reference
Court or of the appellate court, the execution court will
have necessarily to reject the claim for interest on
B
solatium based on Sunder on the ground that the
execution court cannot go behind the decree. But ifthe
award of the Reference Court or that of the appellate
court does not specifically refer to the question of interest
on solatium or in cases where claim had not been made C
and rejected either expressly or impliedly by the
Reference Court or the appellate court, and merely
interest on compensation is awarded, then it would be
open to the execution court to apply the ratio of Sunder 0
and say that the compensation awarded includes
solatium and in such an event interest on the amount oould
be directed to be deposited in execution. Otherwise, not.
We also clarify that such interest on solatium can be
claimed only in pending executions and not in closed
E
executions and the execution court will be entitled to
permit its recovery from the date of the judgment in
Sunder(19-9-2001) and not for any prior period. We also
clarify that this will not entail any reappropriation or fresh
appropriation by the decree-holder. This we have F
indicated by way of clarification also in exercise of our
power under Articles 141 and 142 of the Constitution of
India with a view to avoid multiplicity of litigation on this
question."
'
27. The decision of this Court in Gurpreet Singh's Case
(supra), upon which the strong reliance is placed by learned
counsel on behalf of respondent, is totally inapplicable to the
fact situation of the instant case forthe reason thatthe question
G
that arose in the said case was distinct, which reads thus:-
H
22
SUPREME COURT R~PORTS
[2015] 11 S.C.R.
A
"What is the rule of appropriation in execution of money
decrees? Is the rule the same in the case of an awarddecree under the Land Acquisition Act or, is there
anything in the Land Acquisition Act, 1894 as amended
by the Land Acquisition (Amendment) Act (68 of 1984)
B
making that rule inapplicable or not wholly applicable?"
The issue in the said question was examined and
answered by the Constitution Bench with reference to Prem
Nath Kapur's case (supra) regarding the rule of appropriation
c in execution of money decrees. The examination of Sections
23(1 ), 23(1A), 23(2), 28, 31, 34 and 11 of the Act was made in
this regard.
28. At paragraph 54 of Gurpreet Singh's case, certain
0
observations are made regarding the payment of int19rest on
solatium. The interest on solatium can be awarded at execution
stage if the Reference Court or the Appellate Court cloes not
specifically refer to the question of interest on solatium ior cases
wherein claim had not been made and rejected either expressly
E or impliedly by the Reference Court or the Appellate Court and
merely interest on compensation is awarded. But where the
Reference Court or appellate court has negatived the same ·
eith'er expressly or by implication then such interest on solatium
cannot be awarded as it is a well settled rule of law that the
F execution court cannot go behind the decree. Another point
which is clearly made in the said judgment is that the interest
on solatium can be claimed only in pending execution cases
and not in closed execution cases, recoverable from the date
of the judgmentin Sunder's case i.e., 19.09.2001 and notfor
G any prior period. It is also held in this case that this will not
entail any appropriation or reappropriation by the claimant/
decree holder. But, it is noteworthy that this was not the question
which was referred to the Court for consideration in the said
case. Therefore, it is merely an observation of the court which
H
M/S PERIYAR & PAREEKANNI RUBBERS LTD. v. STATE
23
OF KERALA [V. GOPALAGOWDA, J.]
cannot be applied as binding precedent in the instant case A
with regard to the entitlement of statutory interest payable under
Sections 23(1A), 28 and 34 of the Act on the solatium. If
applied, it would be contrary to the doctrine of stare decisis. In
this regard, it is necessary to advert to the Constitution Bench
(11 Judge Bench) judgment of this Court in H.H. B
Maharajadhiraja Madhav Rao Jivaji Rao Scindia Bahadur
& Ors. v. Union of lndia12, wherein at paragraph 138, it is
held that it is not proper to regard a word, a clause or a sentence
occurring in a judgment of the Supreme Court, divorced from
its context, as containing a full exposition of the law on a C
question when the question did not even fall to be answered in
that judgment. The relevant portion of the paragraph reads as
under:-
"138 ... The question as to the jurisdiction of the Courts D
to entertain a claim for payment of Privy Purse did not
fall to be determined in·Nawab Usman Ali Khan case.
The only question raised was whether the Privy Purse
was riot capable of attachment in execution of the decree
of a Civil Court, because of the specific exemption of E
political pensions under Section 60(1 )(g) of the Code of
Civil Procedure. In Kunvar Shri Vir Rajendra Singh's
case, the Court did not express any opinion that Article
366(22) was a provision relating to a covenant within the
meaning of Article 363. In tliat case the petitioner who F
was not recognised as a Ruler by the President
abandoned at the hearing of his petition his claim to the
Privy Purse payable to the Ruler of Dholpur, and pressed
· his claim by succession under the Hindu Law to the G
Private property of the former Ruler. The Court was not
called upon to decide and did not decide that Article
366(22) was a provision relating to a covenant within the
meaning of Article 363. It is difficult to regard a word, a
12AIR 1971SC530
H
24
A
B
SUPREME COURT REPORTS
[2015] 11 S.C.R.
clause or a sentence occurring in a judgment of this Court.
divorced from its context.