THE STATE OF ORISSA Vs. BANDMALI BABU

JUDGEMENT

(1.) THIS is a appeal by the State of Orissa against a portion of the award of the Arbitrator, Hirakud Land Organization, fixing the compensation payable to the Respondent Bandmali Babu in respect of (i) 9.23 acres of Bhogra lands and (ii) some mohul and mango trees that were acquired by the State in connection with the Hirakud Dam Project. The relevant facts have been fully set out in the main judgment of this Court in M.A. No. 165 of 1957.

(2.) SO far as Bhogra lands are concerned the learned Arbitrator estimated the compensation in accordance with the market value and refused to give weight to the first proviso to clause (e) of Sub -section (1) of Section 7 of Orissa Act XVIII of 1948, on the ground that the said proviso was ultra vires as held by a Division Bench of this Court in State of Orissa v. Bharat Chandra : A.I.R. 1955 Ori 97. The learned Advocate -General contended that the aforesaid Division Bench decision required reconsideration in view of the amendment made to the Constitution by the Constitution (Fourth Amendment) Act 1955. This question was fully discussed by another Division Bench of this Court in State of Orissa v. Satyabadi, I.L.R. 1960 Cutt 48 in which the above contention of the Advocate -General was rejected and it was held that the first proviso to clause (e) of Sub -section (1) of Section 7 of the Act was in any case invalid and not saved by the Fourth Amendment to the Constitution, and that the Division Bench decision of this Court in State of Orissa v. Bharat Chandra : A.I.R. 1955 Ori 97 still continues to be good law. Hence I see absolutely no reason to interfere with the award of the Arbitrator as regards the compensation payable for the Bhogra lands.

(3.) I may now deal with an important question raised by the learned Advocate General as regards award of interest. The Arbitrator directed that interest at 6 percent per annum should be paid from the date of taking over possession till the date of actual payment after deducting the interim payment, if any. The learned Advocate -General contended that the Respondent was not entitled to any interest prior to the date of commencement of the litigation before the Arbitrator. Re relied on the well known decision of the Privy Council in B.N. Rly Co. v. Ruttamji Ramji, A.I.R. 1938 P.C. 67 to the effect that interest prior to the commencement of litigation is not a matter of discretion with the Court, but depends upon the substantive law on the subject. According to the learned Advocate General there was no law, nor was there any agreement between the parties for payment of interest from the date of taking over possession.