Interest Payable On Solatium Under Land Acquisition Act Is 9% For First Year & 15% For Subsequent Years: Karnataka High Court
The Karnataka High Court recently held that in cases of land acquisition where payment of compensation is pending, interest to be paid on compensation amount for the first year is to be at the rate of 9% per annum and subsequently, it is to be at the rate of 15%."I am of the considered opinion that in cases of acquisition interest for the first year is 9% p.a. and subsequent thereto it is...
The Karnataka High Court recently held that in cases of land acquisition where payment of compensation is pending, interest to be paid on compensation amount for the first year is to be at the rate of 9% per annum and subsequently, it is to be at the rate of 15%.
"I am of the considered opinion that in cases of acquisition interest for the first year is 9% p.a. and subsequent thereto it is 15%. The same principle would also apply to solatium and it is only for the first year, interest at 9% as stated in the decision in Gurupreeth Singh's case would apply and thereafter interest would have to be calculated at 15% p.a."
The order was passed in a petition filed by Gas Turbine Research Establishment Defense Unit through its Defence Estate Officer, questioning the order of Execution Court, rejecting the calculation made by it for payment of compensation.
The establishment had also sought to set aside the arrest warrant issued against it.
Case Details:
The establishment had acquired the land of one MK Rafiq Saheb in Bangalore under Section 4(1) of the Land Acquisition Act, 1894 back in 1994. The compensation amount was disputed by the land owner and after a series of litigation, the compensation was enhanced by the High Court to Rs. 35,17,470/-.The same was confirmed by the Supreme Court.
The legal heirs of the land owner filed an execution petition in 2011, claiming that an amount of Rs.79,65,500/- was due and payable.
The petitioner herein filed a statement of objections contending that in terms of the decision of the Apex Court in Gurupreeth Singh v Union of India, (2006) 8 SCC 457, the petitioner has made payment of all amounts that were due.
In view thereof, the Registrar, City Civil Court directed the office to calculate the amounts due and payable by the petitioners in terms of the above decision. The office of the Court filed a memo of calculation in January 2021, indicating that an amount of Rs. 96,91,024/- was due and payable.
Though the Petitioner filed objections to this memo of calculation, the trial Court accepted the memo and directed the petitioners to make payment of the monies.
The petitioners not having made payment of the monies, arrest notice came to be issued.
Findings:
A single judge bench of Justice Suraj Govindaraj went through the statement of objections filed by the Petitioner before the execution court and found that the same does not indicate the methodology of calculation at all.
"The Petitioner has only stated that at the time of execution petition, the decree holder deposited Rs.79,65,500/- and therefore, the petitioners having deposited Rs.38,44,096/- on 10.01.2005 and a sum of Rs.47,37,095/- on 17.10.2012, the total deposited amount being Rs.85,81,091/-, there is an excess amount which has been deposited and or received by the decree holders. While doing so, there is no reference made by the petitioners to the interest payable in terms of the decision of the Apex Court in Gurupreeth Singh's case on the solatium. Reference of monies which have been deposited is only as regards that order in C.A. No.1086/2006 without reference to the interest which is liable to be paid on solatium."
It added,
"In the above circumstances, I am of the considered opinion that the manner in which the objections to memo of calculation is filed is very convoluted and not expected of an authority like the petitioner, who is represented by an Estate officer."
The bench remarked that the manner in which the objections to memo of calculation were filed by the Petitioner, without taking into consideration the interest liable to be paid on the solatium in terms of the decision of the Apex Court in Gurupreeth Singh's case, does not behold the petitioner and leaves much to be desired on the conduct of the petitioner.
At this juncture, Assistant Solicitor General Shanthi Bhushan conceded that there is a mistake which has occurred before the trial Court in the calculation which has been filed and he submitted that the Petitioner would comply with the directions issued by the Apex Court in Gurupreeth Singh's case and make payment of the interest on the solatium calculated at 9% from 19.09.2001, i.e. the date of decision in Gurupreeth Singh's case.
In response, the bench set aside the arrest notice and directed the execution court to consider the amounts payable by the petitioner in accordance with the decision of the Apex Court in Gurupreeth Singh's case, calculating the interest on solatium at 9% for one year from *19.09.2001 and post the said one year calculate interest at the rate of 15% p.a.
It also said once the calculation is made known by the Execution Court, the petitioner would be required to make payment of those monies within a period of four weeks.
Case Title: GAS TURBINE RESEARCH ESTABLISHMENT DEFENSE UNIT THE DEFENCE ESTATE OFFICER v. NAZIMA SALIQ & Others
Case No: WRIT PETITION NO. 10625 OF 2022
Citation: 2022 LiveLaw (Kar) 339
Date of Order: 27TH DAY OF JUNE, 2022