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Amount deposited towards compensation will be deducted towards interest-LA Act, 1894 : Madras HC



The Special Tahsildar, Adi Dravidar Welfare and Land Acquisition Department, Collectorate, Trichy Vs A.Natesan Pillai (Died) and Ors. 27.08.2020

In the matter of C.R.P.(MD)No.2020 of 2019 and C.M.P.(MD)No.10402 of 2019, before The Madurai Bench of Madras High Court, the Coram consisting of The Hon'ble Justice S.S.Sundar has reiterated that the amount deposited towards compensation will be deducted towards interest. The petitioners in the present case approached the High Court under Section 115 of the Civil Procedure Code, 1908 by filing a Civil Revision Petition to set aside the order in E.P.No.183 of 2000 dated 23.09.2019 in L.A.O.P.No.1 of 1997 on the file of the first Additional Sub Court, Trichirappalli.

The property of the respondents has been acquired under Section 4(1) of the Land Acquisition Act, 1894, through a notification dated 24.09.1992 and petitioner was liable to pay an amount of Rs.23,48,040/- including solatium and additional compensation in terms of Section 23(1A) of the Act and interest on the same from the date of taking possession and the rate of interest being Rs.9% for the first year and 15% thereafter.

The High Court referred to the judgments in Prem Nath Kapur's case and Gurpreet Singh case,

In Prem Nath Kapur's case reported in 1996 (2) SCC 71 has held that the liability to pay interest is only on the excess amount of compensation determined under Section 23(1) and not on the amount already determined by the Land Acquisition Officer under Section 11 and paid to the party or deposited into the Court.(Para 5)
The Constitutional Bench of the Hon'ble Supreme Court in Gurpreet Singh case reported in 2006 (8) SCC 457 has categorically held that the amount deposited by the Land Acquisition Officer pursuant to the enhancement has to be adjusted first towards interest, then towards costs, and thereafter, towards principal.(Para 5)

The court has observed that,

The law of the land should prevail and the petitioner's attitude shows that they are not really to protect the interest of the State but to prolong the misery of the litigants just by being adamant on something which is against the well settled proposition of law.(Para 6)

The court has finally dismissed the petition with cost and directed that to avoid attachment of movables, the petitioner shall deposit a sum of Rs.60,45,353/- along with interest at 15% per annum on the sum of Rs.23,48,040/- for the period from 01.09.2020 within twelve weeks from the date of receipt of this order.

Lalitha Sarvani.A


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C.R.P.(MD)No.2020 of 2019
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