2011 (2) TMI 1352 - SC - Indian Laws

Whether the Land Acquisition Act, 1894 requires that the interest be deposited in court? Whether recovery of the balance amount along with interest accrued thereon?

Summary

Issues:
1. Dispute over compensation for land acquisition at Sanguem, Goa.
2. Dispute regarding apportionment of compensation.
3. Liability of the State to pay interest on compensation.
4. Interpretation of Sections 28 and 34 of the Land Acquisition Act, 1894.

Detailed Analysis:
1. The dispute arose from a notification for land acquisition for a sports complex in Goa. The Land Acquisition Collector awarded compensation at Rs. 45 per sq. meter. The landowners filed reference petitions, leading to an award upholding the compensation rate, along with additional benefits totaling Rs. 8,80,372. Funds were released by the Director of Sports and Youth Affairs for payment. After the death of a claimant, a dispute arose regarding the distribution of compensation among legal representatives.

2. The issue of apportionment of compensation was raised during an execution application. The District Judge directed payment to certain claimants, leading to the issuance of fresh cheques. A subsequent order highlighted a dispute over apportionment, citing the liability of the respondents to pay interest until the amount was deposited in court. The judgment referenced the case of Prem Nath Kapur v. National Fertilizers Corporation of India Ltd., emphasizing the need for interest payment until the compensation was deposited in court.

3. The High Court considered the State's liability to pay interest on compensation. The respondents argued that they had tendered the amount to claimants directly, while the appellants contended that interest could only be paid in court as per the Land Acquisition Act. The High Court set aside the District Court's order, stating that the amount was paid to the appellants but remained uncollected. The appellants challenged this decision, leading to the present appeal.

4. The Supreme Court analyzed the provisions of the Land Acquisition Act and the CPC. Referring to the case of Prem Nath Kapur, the Court emphasized that interest must be deposited in court, rejecting the argument that the State could directly pay claimants. The Court held that the State's failure to deposit the amount in court and utilizing it was contrary to the Act. The judgment of the High Court was deemed erroneous, and interest was ordered to be paid to the parties as per the District Judge's order.

Overall, the Supreme Court allowed the appeal, emphasizing the requirement for interest to be deposited in court as per the Land Acquisition Act, setting aside the High Court's decision and ordering interest payment within a specified period.