K S E B Vs. MARANCHI MATHA

JUDGEMENT

(1.) The common question referred to the Division Bench is whether the claimants are entitled to get interest on compensation in respect of the trees cut and removed from their properties without having any contractual obligation. When the matter was argued before us, the question was limited to the date from which interest has to be calculated, i.e., whether interest is to be paid from the date of cutting of trees or from the date on which the application for compensation was made or from the date on which compensation was awarded. Therefore, there is no dispute before us that interest is payable on the compensation for trees cut and removed. In some of the revisions, compensation was awarded for the trees cut and interest at different rates is awarded from the date of petition till the date of payment and in some others Kerala State Electricity Board has challenged the award and rate of interest. According to the persons who have filed the revisions challenging the sufficiency of compensation, interest should have awarded from the date of cutting and not from the date of petition. There is also controversy as to what exactly is the percentage of interest to be awarded. But it is not in dispute that there cannot be any uniform percentage in all cases as it will depend on the rate of interest prevalent at the time from which interest is to be calculated.

(2.) Even in cases where there is no express or implied contract for payment of interest, interest can be awarded on equitable grounds as held by the Supreme Court in Ghaziabad Development Authority v. Union of India, 2000 6 SCC 113. That was a case where the court found that there was unreasonable delay on the part of a Public Development Authority for handing over developed plots for construction of apartments and/or flats for occupation by allottees. It was held that though there was a specific term in the brochure that no interest would be payable to claimant in case he was to withdraw his offer or surrender it, it was held that such term would apply only in case the claimant was responsible for creating circumstances resulting in necessity of refund. The Supreme Court granted interest on equitable grounds.

(3.) A Division Bench of this Court in State of Kerala v. Chellappan Pillai,1961 KerLJ 488 has held that interest for any period anterior to the date of the suit can be awarded only if there is an agreement for the payment of interest at a fixed rate, or it is payable by the usage of trade having the force of law, or under the provision of any substantive law entitling the plaintiff to recover interest. That was case where the claim was based on Section 70 of the Indian Contract Act. The Division Bench held that there was no justification for the award of interest from the date earlier than the date of suit.