SAMRAJYA LAXMI Vs. K GOVINDA RAO

JUDGEMENT

(1.) While in the contempt case, the complaint is that the order dated 10-3-1992 ssed by this Court in W.A. No.1661/87 has not been complied with and that an amount of Rs.8,92,046-12 as claimed by the petitioners as due and payable to them in view of the above judgment is not paid within the stipulated time and even after long lapse of the same, rendering the contemnors for action for contempt, the contemnors hae filed a petition for clarification in W.A.M.P. No.1460/93 stating that the calculation made by the petitioners in the contempt case is wrong and erroneous and sought to clarify the order dated 10-3-1992 refuting the claim that the amount as claimed by the petitioners in contempt case as baseless. For clarity, we refer the petitioners in contempt case as writ appellants and the contemnors as respondents.

(2.) We have perused the calculation memo filed both by the writ appellants and the respondents. The writ appellants have filed a fresh calculation memo dated 23-7-1993 claiming the amount due and payable as Rs.4,82,907-75 ps. by giving credit to the payment of Rs.4,47,993-00 made by the respondents on 29-12-1992. The respondents have filed a calculation memo admitting the amount due and payable to the writ appellants only of Rs.27,183-00.

(3.) The award was passed in two phases; one barely for market value, additional compensation and solatium amounting to Rs.4,43,155-70 ps. and the latter one for Rs.7,97,631-50 ps. Out of the amount of Rs.7,97,631-50 ps., the compensation component is Rs.4,43,155-70 ps. while the interest component is Rs.3,54,475-80 ps. The interest component is calculated for the period from 6-6-1980 to 5-6-1981 at the rate of 9% per annum being the first year and at the rate of 15% per annum from 6-6-1981 to 28-2-1986. It is needless to mention that this interest component is calculated on the principal compensation amount of Rs.4,43,155-75 ps. which includes market value under Section 23(1), additional compensation at the rate of 12% on the market value under Section 23(1-A) and solatium at 30% under Section 23(2) of the Land Acquisition Act, 1894, as amended by Central Act 68 of 1984. But the said amount of Rs.7,97,631-50 ps. was not paid in entirety as awarded. An amount of Rs.4,50,000/- was paid on 29-2-1988. In fact, as on that date, the amount due and payable was Rs.9,30,578-20 ps., the break-up figures of which are as mentioned below: Market value, additional compensation and 30% solatium Rs. 4,43,155-70 Interest @ 9% per annum from 6-6-1980 to 5-6-1981 Rs. 39,884-00 Interest @ 15% per annum from 6-6-81 to 21-2-88 Rs. 4,47,538-50 Total Rs. 9,30,578-20 Deducting market value of Rs.4,43,155-70 ps. from this, the interest which was payable as on that date i.e., 29-2-1988 was Rs.4,87,422-50 ps. From this date onwards, we assume jurisdiction in equity. As is evident from the calculation submitted by the writ appellants, interest @ 15% is claimed on the amount inclusive of 15% interest. If that is permitted, it amounts to compound interest. Payment of such compound interest is impermissible under law. The Land Acquisition Act contemplates payment of interest at the specified rates as mentioned above, but does not contemplate payment of interest on interest. It is not a loan from any financial institution to add-up interest into principal at quarterly rests or yearly rests, as the case may be and then again levy interest. What the Act contemplates is the payment of interest @ 9% for the first year and @ 15% for the subsequent years on the delayed payment of compensation. It is beyond pale of any doubt that while the award was passed on 3-10-1986, the compensation amount was paid only on 29-2-1988. Even as on the date of passing of the award, Rs.7,97,631-50 ps. was payable. That having not been paid, only a partial amount of Rs.4,50,000/- was paid on 29-2-1988 on which date the amount due and payable was Rs.9,30,578-20 ps. as clearly mentioned above with break-up figures. Out of this, credit has to be given firstly to the compensation component of Rs.4,43,155-70 ps. and the balance of Rs.6,844-30 ps. has to be adjusted towards interest. As on 29-2-1988, the accrued interest was Rs.4,87,422-50 ps. Deducting, Rs.6,844-30 ps. the outstaidning amount of Rs.4,80,578-20 ps. as on 29-2-1988 is purely towards interest. But, according to the calculation of the writ appellants 15% is added on this not only upto 29-12-1992 on which date not only an amount of Rs.4,47,993-00 was paid to them, but also on the further some again added 15% upto 31-7-1993 by filing an additional memo of calculation. The respondents deny the said claim and in fact, firstly, they pleaded that excess amount was paid, but later, memo of calculation was filed admitting the amount payable as Rs.27,183-00. We have to say that memo of calculations filed by either parties are not correctly prepared. There is no proper basis for such calculation. As the law does not contemplate payment of interest on interest and as on 29-2-1988, the amount of Rs.4,80,578-20 paise was outstanding towards payment of interest, we have to consider what is the equitable interest which can be levied against the respondents, out of this amount of Rs.4,80,578-20 ps., Rs.4,47,993-00 was paid to the writ appellants on 29-12-1992 i.e., after four years and 10 months. We are not traversing beyond 29-12-1992 for the obvious reason that there was a genuine dispute with regard to payment of interest as while the writ appellants insisting on payment of interest on interest, the respondents were disputing the said payment and we concur with the plea of the respondents that payment of interest on interest is impermissible under the Land Acquisition Act. Interest is always computed only on the compensation component and when the payment is made, firstly, it has to be adjusted towards compensation component. In that view of the matter, we have to consider what would be the proper interest which can be levied on late payment of the outstanding interest of Rs.4,80,578-20 ps. for a period of 4 years and 10 months i.e., from 29-2-1988 to 29-12-1992. Similar question arose in Chandra Bansi Singh vs. State of Bihar. In that case, the Supreme Court held that, under the regular proceedings under the Land Acquisition Act, whatever amounts are specified can only be awarded, but not extraneous claims and that extraneous claims can be allowed only by way of equitable remedy. In the said case, while the specified amounts were ordered in the regular appeal arising out of land acquisition proceedings, in a writ petition under Article 32 of the Constitution of India, equitable remedy was granted awarding 71/2% interest for the delay in taking possession. Taking the said judicial precedent as a guiding factor, we will now consider what would be the qui table interest which can be awarded in the instant case. In the case decided by the Supreme Court as on that date, there was no remedy provided under the Land Acquisition Act for the delay in taking the possession after issuance of Section 4(1) notification. As such, the Supreme Court deemed fit to award equitable interest quantifying the same at 7% as additional compensation. As equitable interest is being awarded on the interest component of the compensation, we deem 4% interest on the same would be fair and reasonable, in the peculiar facts and circumstances of this case. 4% on the amount of Rs.4,80,578-20 ps. for a period of 4 years and 10 months i.e., from 29-2-1988 to 29-12-1992 will come to Rs.92,912/- and the total would be Rs.5,73,490-20 ps., rounded off to Rs.5,73,490/-. Deducting the amount of Rs.4,47,993-00 which was paid on 29-12-1992, the amount due and payable by the respondents comes to Rs.1,25,497/-. We are refraining ourselves from adding any further interest from 29-12-1992 till this-day as there was a genuine dispute entertained by the respondents with regard to quantum of the amount claimed by the writ appellants. This amount of Rs.1,25,497/- shall be paid by the respondents to the writ appellants on or before 30-4-1994.