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TMI Blog2004 (11) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 2,340 per are. On a request made by the decree holder, the Land Acquisition Officer referred the matter to the Subordinate Judge's Court, Thiruvananthapuram, for considering the claim put forward by the claimants for enhancement of compensation. The case was numbered as LAR No. 120 of 1993. The learned Sub Judge passed a judgment and decree on 9th March, 1994, fixing the land value @ ₹ 10,000 per are. The total land value was fixed as ₹ 11,12,800. From that amount, an amount of ₹ 2,60,395.20 already paid by the Land Acquisition Officer in terms of the award was deducted. The enhanced land value awarded was fixed as ₹ 8,52,404.80. The learned Sub Judge found that the decree holder is entitled to get 30 per cent solatium. It was also found that the decree holder is entitled to get interest @ 12 per cent per annum on the enhanced amount from 14th May, 1985 till 31st March, 1986. It was further found that for one year from the date of taking possession, i.e., on 4th Feb., 1986, the decree holder is entitled to get interest @ 9 per cent and from 4th Feb., 1987, the decree holder is entitled to get interest @ 15 per cent per annum and also proportionat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2002, and the attempt of the State is to challenge that order also in this Civil Revision Petition, which cannot be allowed. It is argued that the order dt. 19th Oct., 2002, fixing the amount due had already become final and conclusive and that decision will operate as res judicata. 5. Sri Mohan C. Menon, the Senior Government Pleader, has argued that the amount fixed by the executing Court on 19th Oct., 2002, is only an interim order in a pending execution petition and in view of the amendment to s. 115 of the CPC, it is not necessary to file any Civil Revision Petition against the order dt. 19th Oct., 2002, as the same is only an interim order. It is argued that the judgment debtor is entitled to challenge that order also in this revision petition. It is argued that the petitioner has filed EA 572 of 2002 to review the order fixing the amount due to the decree holder and attaching the property. It cannot be said that the order passed on 19th Oct., 2002, has become final and conclusive so as to operate as res judicata. 6. There was dispute regarding the amount payable to the decree holders. A perusal of the records shows that the decree holder as well as the judgment debto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Acquisition Act. The land value was enhanced to ₹ 10,000 per are. The operative portion of the decree reads as follows : xx xx xx the enhanced land value comes to ₹ 8,52,404.80 rounded to ₹ 8,52,405; the claimant is entitled to get 30 per cent solatium; he is also entitled to get additional increase @ 12 per cent per annum from the date of notification on 14th May, 1985, till the date of award on 31st March, 1986; for one year from the date of possession on 4th Feb., 1986, 9 per cent interest will be given; from 4th Feb., 1987, onwards till realisation the claimant is entitled to get interest @ 15 per cent per annum; And he is also entitled to get proportionate cost . In this case the Land Acquisition Officer had paid the amount due under the award. On 17th Jan., 1996, the State had deposited an amount of ₹ 13,64,228 towards the decree debt and deducted an amount of ₹ 84,783 towards the income-tax payable by the decree holder at source. So, on 17th Jan., 1996, the State had deposited an amount of ₹ 14,49,011. On 15th Feb., 2000, the State had deposited an amount of ₹ 9,68,905 to be paid to the decr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he land to the date of payment of such excess into Court : Provided that the award of the Court may also direct that where such excess or any part thereof is paid into Court after the date of expiry of a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the amount of such excess or part thereof which has not been paid into Court before the date of such expiry . So, the compensation determined by the reference Court consists of the following components : (i) Market value of the land acquired as on the date of notification. (ii) Interest of 12 per cent per annum awarded on the land value awarded by the Land Acquisition Officer from the date of s. 4(1) notification till the date of award or taking possession of the land, whichever is earlier. (iii) Solatium as provided under sub-s. (2) of s. 23. (iv) Interest on the amount awarded by the Court in excess of the amount fixed by the Collector. (v) Interest on the solatium in case the same is awarded in the decree. 11. In this connection, the provision of s. 3 of the Land A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. So, that decision is not an authority to hold that the claimant is entitled to interest on the 12 per cent interest awarded under s. 23(1A). 14. In Mir Fazeelath Hussain Ors. vs. Special Dy. Collector (1995) 3 SCC 208, the apex Court held that the solatium is not part of the award and no interest is claimable thereon. The principle laid down in that decision was overruled by a Constitution Bench of the Supreme Court consisting of five Judges in Sunder Ors. vs. Union of India (supra) in which it was held that solatium is also part of the award and interest is payable on that amount. After the pronouncement of the decision in Sunder's case (supra), the parties are entitled to get interest on solatium also. But, the executing Court shall consider whether the decree in a given case allows the decree holder to claim interest on solatium. It is well-settled position of law that the parties to the case are governed by the terms of the decree. If the claim for interest on solatium was not allowed, the claimant cannot claim interest on solatium. That position was clarified in the decision in K.R. Amrith Raj vs. The Special Tahsildar 2002 (2) KLJ 151. 15. The next question a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppearing for the respondent has argued that if the IT Department has got any claim, it is for them to take appropriate action for recovery and the Land Acquisition Officer has no authority to deduct any amount towards income-tax. It is further argued that if as a matter of fact any amount is to be paid to the IT Department, the State ought to have raised a contention regarding that claim before the passing of the judgment and decree and necessary provisions ought to have been made in the decree itself. It is argued that in fact the action of the Land Acquisition Officer deducting amounts towards income-tax violating the order of the executing Court to deposit the entire amount in the Court is nothing but contempt of Court and he is liable to be proceeded under the provisions of Contempt of Courts Act. 18. It is true that there is no provision in the decree and judgment passed in this case which allows the Land Acquisition Officer to deduct any amount towards income-tax at source. Neither the Land Acquisition Officer nor the IT Department had made any claim before the executing Court that amount is to be deducted towards the income-tax. Can the Land Acquisition Officer deduct inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2003-2004, dt. 23rd March, 2004, issued by the Chief CIT, Kochi, to the District Collector, Ernakulam. The learned Government Pleader has made available a Circular No. LR 82/4726/2000, dt. 26th June, 2000, issued by the Commissioner of Land Revenue, Thiruvananthapuram, to the District Collectors and Land Acquisition Officers of Kerala as to how the amounts due under the decree in a land acquisition case have to be calculated. In that circular also it is stated that income-tax is to be deducted at source. 22. Sec. 194A of the IT Act deals with interest. Sec. 194A reads as follows: 194A. (1) Any person, not being an individual or a HUF, who is responsible for paying to a resident any income by way of interest other than income by way of interest on securities shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force. (2) xx xx xx (3) The provisions of sub-s. (1) shall not apply' (i) where the amount of such income or, as the case may be, the aggregate of the amounts of such inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax thereon : Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount to such payments to a resident during the financial year does not exceed one hundred thousand rupees. Explanation. 'For the purposes of this section,' (i) agricultural and means agricultural land in India including lands situate in any area referred to in items (a) and (b) of sub-cl. (iii) of cl. (14) of s. 2; (ii) immovable property means any land (other than agricultural land or any building or part of a building . So, if the aggregate amount exceeds rupees one hundred thousand and the land acquired is not an agricultural land, a statutory duty is cast upon the Land Acquisition Officer to deduct tax at source on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Acquisition Officer has to deduct the tax at source. The principles laid down in Baldeep Singh's case (supra) were followed in Kranti Kumar Saxena, In re (2002) 178 CTR (MP) 455, and held that the Court is not liable to deposit the tax by challan or issue TDS in Form No. 25A and the real person responsible for paying income-tax on interest is the Land Acquisition Officer or Collector who has the money in his possession. So, in every case, whether the acquisition is for the Central Government, State Government or other agencies, it is the duty of the Land Acquisition Officer to deduct the income-tax due to the IT Department from the amount of compensation and interest in accordance with the provisions of s. 194A or 194LA, as the case may be. 27. Of course, if in a particular case the claimant is not liable to pay income-tax or if he is entitled to pay tax at lower rates, he will have to produce necessary tax deduction certificate from the Land Acquisition Officer and claim such benefit before the competent authority under the IT Act. It is well-settled position of law that whenever any authority deduct income-tax at source, he is bound to issue a tax deduction certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount deposited shall be adjusted towards principal first. It was held that unless the decree holder was informed that the amount deposited shall be adjusted towards principal first and the balance towards interest and cost and the decree holder agrees to such a suggestion, the judgment debtor is not entitled to raise a contention that the amount deposited shall be adjusted towards principal first. 31. In I.C.D.S. case (supra) also, the apex Court after interpreting the provisions of Order XXI, r. 1(2) held as follows : The general rule of appropriation of payments towards a decretal amount is that such an amount is to be adjusted, firstly, strictly in accordance with the directions contained in the decree and in the absence of such direction, adjustments be made, firstly, in payment of interest and costs and thereafter in payment of the principal amount. Such a principle is, however, subject to one exception, i.e., that the parties may agree to the adjustment of the payment in any other manner despite the decree . 32. But, the principles laid down in the abovestated decisions have no application to the decree passed in a land acquisition case. In Prem Nath Kapur vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Land Acquisition Act and the same is applicable only to a debtor and creditor in an ordinary civil suit governed by the provisions of the CPC. The Supreme Court held that the applicability of CPC to the proceedings under the Act stands excluded under s. 53 of the Land Acquisition Act which shall prevail. When the deposit is made towards the specified amounts, the claimant/owner is not entitled to deduct from the amount of compensation towards cost, interest, additional amount under s. 23(1A) with interest and then to claim the total balance amount with further interest . So, the law regarding adjustment of the decree amount deposited by the State in execution of a decree passed in a land acquisition reference is clear and settled. The decree holder shall calculate the various amounts due to him under ss. 23(1), 23(1A), 23(2) and 28 of the Act. They are the following : (i) The amount of compensation awarded by the Land Acquisition Officer. (ii) Simple interest payable on the amount awarded under s. 23(1A) of the Act. (iii) Solatium due under s. 23(2) of the Act. (iv) Simple interest payable on the additional compensation on account of delayed payment as provided un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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