Sun. Jan 24th, 2021

Matter relating to payment of interest on solatium referred to larger bench

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Supreme Court: Deciding the case where the dispute
arose relating to the claim of solatium for the enhanced amount of compensation and interest in
respect of the acquired land, the Division Bench of V. Gopala Gowda and A.K.
Goel, JJ., gave divergent views on
whether the payment of compensation under the Land Acquisition Act, 1894 for
the solatium should be from the date of acquisition or from date of
pronouncement of the Constitution Bench decision in Sunder v. Union of India, (2001) 7 SCC 211. According to the observations made
by V. Gopala Gowda, J., Sunder case is a binding precedent on the question of payment of interest on
solatium. However A.K. Goel, J. expressed his disagreement over the
observations made by Gowda, J. and relying on Para
54 of Gurpreet Singh v. Union
of India, (2006) 8 SCC
457, observed that
the Kerala High Court restricted the interest on solatium to the period post
19.09.2001,  i.e. the date when decision
in the Sunder case was delivered.

In the present case the decision of the Kerala High Court was challenged
whereby the High Court confirmed that solatium is payable on that portion of land value
based on capitalization method of yielding rubber trees and directed to compute
balance amount payable under the decree but awarded the interest on solatium from
19.09.2001. The appellants were denied the interest payable on solatium under
Sections 23(1A), 23(2) read with Sections 28 and 34 of the Land Acquisition
Act, 1894. The counsel for the appellant V. Giri contended that the High Court
was not justified to restrict payment of interest on solatium prior to
19.09.2001 by applying Para 54 of Gurpreet Singh case. Counsel
for the respondent, Bina Madhavan sought to justify the stand taken by the High

In view of the divergent opinions expressed by the judges
in the present case, it was deemed appropriate that the matter be placed before
a 3- Judge Bench of the Supreme Court. [M/s Periyar & Pareekanni Rubbers
Ltd v. State of Kerala,
2015 SCC OnLine
SC 813, decided on 14.09.2015] 
Source: Legal news India

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