Diverse views expressed in the matter of payment of interest on solatium

Supreme Court: In the present 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 Court. 

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

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