1996 (8) TMI 146 - SC - Indian Laws

whether the respondents are entitled to solatium and interest under the Jammu & Kashmir Requisition and Acquisition of Immovable Property Act, 1968 hereinafter referred to as the Act ?

Summary

Issues Involved:
1. Entitlement to Solatium and Interest under the Jammu & Kashmir Requisition and Acquisition of Immovable Property Act, 1968.
2. Binding Precedent and Ratio Decidendi.
3. Equity and Statutory Provisions.
4. Fundamental Right to Property and Article 14 of the Constitution.
5. Concept of Unjust Enrichment by the State.

Issue-wise Detailed Analysis:

1. Entitlement to Solatium and Interest under the Jammu & Kashmir Requisition and Acquisition of Immovable Property Act, 1968:
The primary issue was whether the respondents were entitled to solatium and interest under the Act. The High Court had confirmed the arbitrator's award of solatium and interest, holding that no discrimination could be made between owners whose lands were acquired under the Land Acquisition Act, 1894, and those under the Act. The Supreme Court, however, noted that the Act did not confer power upon the arbitrator or the court to award solatium and interest. The Court referred to previous judgments, including Union of India v. Hari Krishna Khosla, which held that solatium and interest were not payable under similar requisition and acquisition acts. Consequently, the Supreme Court concluded that the respondents were not entitled to solatium and interest under the Act.

2. Binding Precedent and Ratio Decidendi:
The Court addressed the argument that the decision in Hari Krishna Khosla's case was not a binding precedent. It clarified that a decision is binding for its ratio decidendi, which is the principle of law applied to the facts of the case. The Court emphasized that the ratio in Hari Krishna Khosla's case, which held that solatium and interest are not part of compensation under the Central Act, was binding. The Court rejected the contention that Hari Krishna Khosla's case was per incuriam or that it conflicted with the ratio in Satinder Singh's case.

3. Equity and Statutory Provisions:
The Court discussed the principle that taking possession of immovable property generally implies an agreement to pay interest on its consideration for deferred payment. However, it noted that equity operates where the statute does not occupy the field. Since the Act did not expressly provide for payment of interest and solatium, the Court held that equity principles could not override the statutory provisions. The Court highlighted that the Act deliberately omitted provisions for solatium and interest, aligning with the Central Act's approach.

4. Fundamental Right to Property and Article 14 of the Constitution:
The respondents argued that the denial of solatium and interest violated their fundamental right to property under the Jammu & Kashmir Constitution and was discriminatory under Article 14 of the Indian Constitution. The Court referred to the decision in Hari Krishna Khosla's case, which had rejected similar contentions. The Court reiterated that the omission to pay solatium and interest was not violative of Article 14 and did not constitute arbitrary action.

5. Concept of Unjust Enrichment by the State:
The respondents contended that the denial of solatium and interest resulted in unjust enrichment of the State. The Court rejected this argument, explaining that public money is expended for public purposes in accordance with the Constitution. The concept of unjust enrichment did not apply as the State did not retain benefits unjustly. The Court emphasized that the legislative policy to omit solatium and interest was deliberate and did not constitute unjust enrichment.

Conclusion:
The Supreme Court allowed the appeal, setting aside the award of solatium and interest on the compensation determined under Section 8 of the Act. The compensation awarded was upheld, but without solatium and interest, and no costs were imposed.