CA 94/2021
1
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No 94 of 2021
(Arising out of SLP (C) No 16857 of 2019)
Tamil Nadu Housing Board Appellant(s)
Versus
Abdul Salam Sarkar (Dead) and Others Respondent(s)
J U D G M E N T
Dr Justice Dhananjaya Y Chandrachud
1 Leave granted.
2 The only question which arises in the present appeal is whether the
respondents are entitled to interest on solatium for the acquisition which
took place under the provisions of the Land Acquisition Act 1894. This issue
turns on an interpretation of the judgment of the Constitution Bench of this
Court in Gurpreet Singh vs Union of India1
(“Gurpreet Singh”).
3 By an order of this Court dated 1 December 2020, the issue was crystallized
by observing that the Court will “examine the question whether (the)
matter is covered by the judgment of this court in the case of Gurpreet
Singh”.
4 In the present case, the reference court by its decision dated 26 July 1990,
allowed for the grant of interest on solatium at the rate of 12% per annum.
5 When the matter was carried in appeal, a Division Bench of the Madras High
1 (2006) 8 SCC 457
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Court by its judgment dated 12 July 2001, issued the following clarification on
the aspect of interest on solatium:
“It is further made clear that the claimants are not entitled
to interest on solatium and additional amount. Further, the
issue regarding grant of interest on solatium is pending
before the Larger Bench of the Hon'ble Supreme Court.
Hence, depending on the outcome of the cross before the
Supreme Court, the claimants are permitted to fill an
appropriate petition before the concerned sub-court.”
6 The Special Leave Petitions against the judgment of the Division Bench were
dismissed on 22 March 2004. The review petition filed by the Revenue
Divisional Officer was also dismissed on 2 August 2006. It is in this
background that we have to assess the tenability of the claim for interest on
solatium based on the decision of the Constitution Bench in Gurpreet Singh
(supra).
7 In paragraph 54 of the judgment in Gurpreet Singh (supra), the above
issue was considered specifically in the context of the earlier decision in
Sunder vs Union of India2
. Dealing with the issue, Justice P K
Balasubramanyan speaking for the Constitution Bench observed thus:
“54….….That question is whether in the light of the
decision in Sunder (2001) 7 SCC 211 : 2001 Supp (3)
SCR 176], the awardee/decree-holder 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 court cannot go behind
the decree. If, therefore, the claim 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 solatium based on
2 (2001) 7 SCC 211
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Sunder [(2001) 7 SCC 211 : 2001 Supp (3) SCR
176] on the ground that the execution court
cannot go behind the decree. But if the 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 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
ofSunder [(2001) 7 SCC 211 : 2001 Supp (3) SCR
176] and say that the compensation awarded
includes solatium and in such an event interest
on the amount could 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 executions and the execution court will
be entitled to permit its recovery from the date of
the judgment in Sunder [(2001) 7 SCC 211 : 2001
Supp (3) SCR 176] (19-9-2001) and not for any prior
period. We also clarify that this will not entail any
reappropriation or fresh appropriation by the decreeholder. This we have 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.”(emphasis
supplied)
8 The test which Gurpreet Singh (supra) mandates is that interest on
solatium would be payable if the reference court has either not referred to it
or has not rejected it expressly or by necessary implication. Moreover, the
claim can only be made in pending execution proceedings. In the present
case, the claim for interest on solatium had not been rejected by the
reference court. In an appeal arising from the decision of the reference
court, the High Court, In its judgment dated 12 July 2001, observed that
since the matter was pending before a larger bench of this Court, the issue
as to whether interest on solatium would be granted would depend on the
CA 94/2021
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outcome of those proceedings and it would be open to the claimants to move
an application before the Sub Court. It was after the judgment of this Court in
Gurpreet Singh (supra), which was delivered on 19 October 2006, that the
respondents moved an application for the grant of interest on solatium. The
High Court by its impugned judgment has come to the conclusion that such
an application was tenable in view of the judgment in Gurpreet Singh
(supra). As a matter of principle, we see no reason to take any other view
since it is in accord to the judgment of the Constitution Bench.
9 The submission which has been urged on behalf of the appellant is that in
the present case, the claim was made in 2008 after the earlier execution
petition was closed and the original award and the enhanced compensation
were deposited and appropriated by the claimant. This, in our view, would
not dis-entitle the claimant for the grant of interest on solatium. The claim
for interest on solatium was not rejected and was expressly kept open by the
High Court in its judgment dated 12 July 2001. The liberty which was granted
by the High Court to institute proceedings before the Sub Court after the
matter was resolved by the larger bench of this Court was the subject matter
of a Special Leave Petition. The judgment of the High Court was affirmed by
the dismissal of the Special Leave Petition. The review petition by the
Revenue Divisional Officer was also dismissed. Hence, inter partes, the
claimants were entitled to apply for the grant of interest on solatium,
particularly having regard to the fact that the claim had not been rejected at
any antecedent stage and had been kept open.
10 In the above view of the matter, we confirm the direction of the High Court to
the effect that the claimants-respondents would be entitled to the payment
CA 94/2021
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of interest on solatium. However, insofar as the exact mathematical
computation is concerned, it would be appropriate to leave it to the reference
court to verify the computations and to pass appropriate orders. Since during
the pendency of these proceedings, a deposit has been made by the
appellant in terms of the interim orders, the amount which has been
deposited will be permitted to be withdrawn by the respondents and shall be
given due credit for in arriving at the final amount which is due and payable.
We also clarify that in terms of the judgment of the Constitution Bench in
Gurpreet Singh (supra), interest on solatium will be payable with effect
from the date of the judgment in Sunder vs Union of India (19 September
2001).
11 The appeal is accordingly disposed of. The costs of Rs 5 lakhs which have
been deposited in this Court in pursuance of this Court’s order, shall also be
disbursed to the claimants.
12 Pending applications, if any, stand disposed of.
………......…...….......………………........J.
[Dr Dhananjaya Y Chandrachud]
………......…...….......………………........J.
[Sanjiv Khanna]
New Delhi;
January 13, 2021
CKB
