land acquisition, compensation law, claimant rights, Supreme Court
0  21 Aug, 1996
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Union of India and Ors. Vs. Dhanwanti Devi and Ors.

  Supreme Court Of India Civil Appeal /11359/1996
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Case Background

As per case facts, land was acquired for public purposes, specifically defence, under the Jammu & Kashmir Requisition and Acquisition of Immovable Property Act, 1968. Initial compensation was awarded, but ...

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PETITIONER:

UNION OF INDIA & ORS.

Vs.

RESPONDENT:

DHANWANTI DEVI & ORS.

DATE OF JUDGMENT: 21/08/1996

BENCH:

K. RAMASWAMY, S. SAGHIR AHMAD, G.B. PATTANAIK

ACT:

HEADNOTE:

JUDGMENT:

J U D G M E N T

K. Ramaswamy, J.

Application for impleadment allowed.

Leave granted.

This appeal by special leave arises form the judgment

and order dated September 29, 1992 passed by the High Court

of Jammu & Kashmir CIMA No.72 of 1988.

The only question that arises for decision in this

appeal is: whether the respondents are entitled to solatium

and interest under the Jammu & Kashmir Requisition and

Acquisition of Immovable Property Act, 1968 [hereinafter

referred to as the "Act"]?

The facts in nutshell are that land admeasuring 399

kanals and 4 marlas situated in Villages Rampur, Talwal and

Goverdhan Pain was acquired for public purposes, viz.,

defence, by publication of notification under Section 7 of

the Act on his award dated November 3, 1986 awarded

compensation @ Rs.21,000/- in respect of lands situated in

villages Rampur and Talwal and Rs.10.000/- per kanal in

respect of land situated in village Goverdhan Pain with 10%

escalation on accordingly paid but feeling dissatisfied

therewith, the claimants-landowners sought reference under

Section of the Act to the arbitrator who by his award dated

March 8, 1987 enhanced the compensation to Rs.60,000/- per

kanal in respect of lands in villages Rampur and Talwal and

Rs. 40.000/- per kanal in respect of land in village

Goverdhan Pain; he also awarded 15% solatium and 4% interest

per annum on the enhanced compensation. When the High Court,

it by impugned judgment and order dated September 29, 1992

confirmed the same and dismissed the appeal holding that no

discrimination could be made between the owners whose lands

are acquired under the Land Acquisition Act, 1894 and owners

whose lands are acquired under the Act and hence the

arbitrator was justified in awarding solatium and interest

to the land-owner-respondents. Hence this appeal by special

leave.

The admitted position is that prior to the acquisition

properties were under requisition under Section 3 of the

Act. Shri Nambiar, learned senior counsel for the appellant

contended that the Act did not confer power upon the

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arbitrator or the court to award solatium and interest. The

controversy is no longer res integra as a two-Judge,

Udhampur & Ors. [JT 1994 (3) SC 629] has held that the

claimants are not entitled to solatium and interest under

the Act. The ratio in Union of India v. Hari Krishna Khosla

[1993 Supp. (2) SCC 149] was applied wherein the Requisition

and Acquisition of Immovable Property Act, 1952 [for short,

the "Central Act"] similarly did not provide for payment of

solatium and interest. Thus, it is contended, a three-Judge

Bench of this Court had held that the arbitrator and the

court have no power to award solatium and interest on the

enhanced compensation under the Act.

On the other hand, argument of Shri Vaidyanathan,

learned senior counsel for the second respondent, is that

the Act is a measure of appropriation of the private

property of citizens though for public purpose. When the

owner is deprived of his possession and enjoyment of his

property payment of solatium and interest for compulsory

acquisition. In equity, the owner is entitled with interest

in lieu thereof. This Court had held in Satinder Singh &

Ors. v. Amrao Singh & Ors. [(1961) 3 SCC 676] that from the

date of dispossession till the date of receipt of

compensation it is an implied agreement to pay interest on

the value of the property. The right to receive interest is

in place of right to retain possession. Unless the statute

specifically and expressly excludes payment of interest and

solatium the land-holder towards compensation and solatium;

denial thereof would amount to unjust enrichment by the

State depriving the land-holder of his land as well as right

to receive compensation for the intervening period. The

denial also is arbitrary and most unjust. In the State of

Jammu & Kashmir, the right to property is still a

fundamental right; hence, deprivation of the property

without payment of solatium and interest violates an

individual's fundamental right to property and, therefore,

it would be arbitrary offending Article 14 of the

Constitution. When an acquisition under Land Acquisition

Act, 1894 is resorted to, the claimant-owner is entitled to

solatium under Section 23 [2], interest under Section 34 and

28 and additional amount under Section 23 [1-A]. The denial

of payment of solatium and interest, therefore, is

discriminatory violating Article 14 of the Constitution. The

very concept of market value is a price which is agreed upon

by a willing purchaser as consideration for purchase of the

property from a willing seller. Compulsory purchase is a

hypothetical sale. Based on the above premises, it is

contended, a purchaser on taking possession of the property

has to pay the entire consideration forthwith but the

quantification of compensation under the "Acquisition Act,

1894 [for short, the "Acquisition Act"] takes place at

hierarchical stages. Until quantification is done, the

claimant-owner is entitled to interest for the interregnum

between the date of taking possession and the date of

determination and deposit of the compensation so determined.

Applying the above principles, this Court repeatedly has

held that payment of solatium and interest is an integral

part of the compensation. In support thereof, Shri

Vaidyanathan placed reliance on the ratio decidendi in R.B.

Lala Narsingh Das vs. Secy. of State for India [AIR 1925 PC

91 at 92], Raghubans Narain Singh v. The Uttar Pradesh

Government through Collector of Bijnor [(1967) 2 SCR 489 at

497], Prithvi Raj Taneja v. State of Madhya Pradesh & Ors.

[(1977) 2 SCR 682 at 684-85], Birminghan City Corporation.

v. West Midland Baptis [Trust] Association (Incorporated]

[1969 (682 at 684-85], Birminghan City Corporation. v. West

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Midland Baptis [Trust] Association [Trust] Association

(Incorporated] [1969 (3) All ER 172], Commissioner of Sales

Tax, J&K & ors. v. pine chemicals Led. & Ors. [(1995) 1 SCC

58], Prabhu Dayal & Ors. v. Union of India [(1995) Supp 4

SCC 2211, Yanamadala Co-operative Labour Contract Society

Ltd., v. Assistant Director of Mines & Geology, Guntur [AIR

1984 AP 271], Periyar & Pareekanni Rubbers Ltd.. v. State of

Kerala [(1991) 4 SCC 195], Nagpur Improvement Trust & Anr.

v. Vithal Rao & Ors. [(1973) 1 SCC 500), P.C. Goswami v.

Collector of Darrang [(1982) 1 SCC 439], State of Kerala &

Ors. v. T.M. Peter & Ors. [(1980) 3 SCC 554]. He further

contended that in Union of India v. Hari Kishan Khosla

[(1993) Supp 2 SCC 149] a three-Judge Bench did not consider

the ration in Satinder Singh's case [supra] which is a

decision of co-ordinate Bench of three Judges. There is no

ratio in Hari Kishan Khosla's case; it is only a conclusion.

A conclusion does not constitute precedent. If it is

considered to be ratio, it is inconsistent with the ratio in

Satinder Singh's case does not have the effect of being

over-ruled in Hari Kishan Khosla's case. It is per se per

incuriam. If a co-ordinate Bench disagrees with the view of

an earlier co-ordinate Bench disagrees with the view of an

earlier co-ordinate Bench, the only course open to the

former is to refer the matter to the larger Bench.

Therefore, the decision in Hari Kishan Khosla's case

requires reconsideration by a Constitution Bench.

Having considered and given anxious consideration to

the respective contentions, the question arises: whether the

respondents are entitled to solatium and interest under the

Act? It is not necessary to Burden the judgment with copious

references made by Shri Vaidyanathan. Suffice it to state

that the State exercising the power of eminent domain is

empowered to acquire, for public purposes, the property of

citizen. The compensation for the acquired property is

determined according to the principles laid down in the Act

under which the property came to be acquired. It is true

that by process of compulsory acquisition, the owner is

deprived of his possession and enjoyment and in lieu thereof

compensation be awarded as per the principles laid down in

the Act. The determination of the compensation is done at

hierarchical stages as per law.

Before adverting to and considering whither solatium

and interest would be payable under the Act, at the outset,

we will dispose of the objection raised by Shri Vaidyanathan

that Hari Kishan Khosla's case is not a binding precedent

nor does it operate as ratio decidendi to be followed as a

precedent and per se per incuriam. It is not everything said

by a Judge who giving judgment that constitutes a precedent.

The only thing in a Judge's decision binding a party is the

principle upon which the case is decided and for this reason

it is important to analyse a decision and isolate from it

the ratio decidendi. According to the well settled theory of

precedents, every decision contain three basic postulates -

[i] findings of material facts, is the inference which the

Judge draws from the direct, or perceptible facts; [ii]

statements of the principles of law applicable to the legal

problems disclosed by the facts; and [iii] judgment based

on the combined effect of the above. A decision is only an

authority for what it actually decides. What is of the

essence in decision is its ratio and not every observation

found therein not what logically follows from the various

observations made in the judgment. Every judgment must be

read as applicable to the particular facts proved, since the

generality of the expressions which may be found there is

not intended to be exposition of the whole law, but governed

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and qualified by the particular facts of the case in which

such expressions are to be found. It would, therefore, be

not profitable to extract a sentence here and there from the

judgment and to build upon it because the essence of the

decision is its ratio and not every observation found

therein. The enunciation of the reason or principle on which

a question before a court has been decided is alone binding

between the parties to it, but it, is the abstract ratio

decidendi, ascertained on a consideration of the judgment in

relation to the subject matter of the decision, which alone

has the force of law and which, when it is clear what it

was, is binding. It is only the principle laid down in the

judgment that is binding law under Article 141 of the

Constitution. A deliberate judicial decision arrived at

after hearing an argument on a question which arises in the

case or is put in issue may constitute a precedent, no

matter for what reason, and the precedent by long

recognition may mature into rule of stare decisis. It is the

rule deductible from the application of law to the facts and

circumstances of the case which constitutes its ratio

decidendi.

Therefore, in order to understand and appreciate the

binding force of a decision is always necessary to see what

were the facts in the case in which the decision was given

and what was the point which had to be decided. No judgment

can be read as if it is a statute. A word or a clause or a

sentence in the judgment cannot be regarded as a full

exposition of law. Law cannot afford to be static and

therefore, Judges are to employ an intelligent in the use of

precedents. It would, therefore, be necessary to see whether

Hari Kishan Khosla's case would form a binding precedent.

Therein, admittedly the question that had arisen and was

decided by the Bench of three Judges was whether solatium

and interest are payable to an owner whose land was acquired

under the provisions of the Central Act? On consideration of

the facts, the relevant provisions in the Central Act and

the previous precedents bearing on the topic the Court had

held that solatium and interest are not a part of

compensation. It is a facet of the principle in the statute.

The Central Act omitted to provide for payment of solatium

and interest since preceding the acquisition the property

was under was under requisition during which period

compensation was under requisition during which period

compensation was paid to the owner. The position obtained

and enjoyed by the Government during the period of

requisition continued after acquisition. The same principle

was applied without further elaboration on entitlement to

payment of interest of an owner. It is true that the

decisions relied on by Shri Vaidyanathan on the principle of

payment of interest as part of compensation in respect of

land acquired were brought to the attention of this Court

for discussion. What would be considered a little later.

Suffice it to say for the present that the finding that

solatium and interest are not payable for the lands acquired

under the Central Act as part of compensation is a binding

precedent. Obviously, therefore, this Court followed the

ratio therein in District Judge, Udhampur case [supra]. The

contention, therefore, that Hari Kishan Khosla's case cannot

be treated as a binding precedent since therein there is no

ratio but a conclusion without discussion, is not tenable

and devoid of force. In that view, it is not necessary to

discuss in extenso the effect of the decisions cited by Shri

Vaidyanathan. Equally, the contention of Shri Vaidyanathan

that the ratio in Hari Kishan Khosla's case is in conflict

with the ratio in Satinder Singh's case which was neither

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distinguished nor overruled and that the decision of a co-

ordinate Bench cannot have the effect of overruling decision

of another co-ordinate Bench, cannot be given countenance.

The effect of the ratio in Satinder Singh's case will be

considered a little later; suffice it to state that there is

no conflict in the ratio of these two cases if the facts in

Satinder Singh's case are closely analysed and the principle

laid down therein is understood in its proper perspective.

Therefore, Hari Kishan Khosla's case cannot be held to be

per incuriam not has it the effect of overruling the ratio

decidendi of Satinder Singh`s case.

Taking the question of entitlement to interest as a

first question, as vehemently argued by vaidyanathan,

broadly speaking. The act of taking possession of immovable

properties generally implies an agreement to pay interest on

its consideration for deferred payment. In a court of

equity, when the seller parts with possession of immovable

property, the purchaser becomes its owner while the seller

receives money as consideration in lieu of the property. The

seller, therefore, is entitled to claim interest in place of

his retaining possession of the property till date of

payment. On this premise, claim for interest is sought

against the State when it exercises its power of eminent

domain and acquires the property of a citizen or public

purpose. This principle was extended in equity to

recompensate the owner for deprivation of his possession and

enjoyment thereof in accordance with law. It was, therefore,

held in equity that the owner is entitled to interest on the

principal amount of award from the date of taking possession

unless the statute under which the land was acquired

expresses its contrary intention. It is on this premise that

the right to receive interest takes the place of right to

retain possession and its enjoyment. It is equally settled

law that equity operates where statute does not occupy the

field. Conversely, when the statute occupies the field the

equity yields place to the statute.

The question, therefore, is whether the Act expresses

any intention to exclude payment of interest and solatium in

respect of the property acquired thereunder? It is not in

dispute that the property was initially under requisition

whereunder possession thereof was taken from the

respondents. During the period of requisition the

respondents received compensation. The quantum thereof was

sought to be put in issue but since that question was

neither relevant nor in issue in the courts below, we desist

from going into that aspect. Under section 7(1) of the Act.

where property is subject to requisition, if the Government

is of the opinion that it is necessary to acquire the

property for a public purpose, it is empowered tho acquire

such property by making publication to that effect in the

State Gazette. Preceding thereto, a prior notice of show

cause should be given to the owner claimants as to why the

property should not be acquired; their objections, if any,

should be considered after giving an opportunity and before

deciding the same. Such an order in substance is like a

declaration under section 6 of the Acquisition Act after

enquiry under Section 5-a . By operation of sub section(2),

the property comes to an end. Sub section(3) enumerates the

circumstances in which the property cannot be acquired.

Section 8 prescribes principles on which compensation shall

be determined and given to the owner, in the manner and in

accordance with the principles set out therein. Clause (a)

thereof gives right to fix compensation by an agreement

between the Government and the owner indication thus: "where

the compensation can be fixed by agreement. it shall be

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given in accordance with such agreement". Clause(b) gives

alternative mode to the government and provides that in the

absence of such an agreement reached between the owner and

the government, "the Government shall appoint as arbitrator,

a person, who is a District Judge or Additional District

Judge". Clause (c) provides assistance to the arbitrator in

the form of a person to be nominated by the Government who

has expert knowledge as to the nature of the property

acquired, to assist the arbitrator as assessor in

determining compensation. The principle of determination of

compensation found in Clause(e), the arbitrator shall, after

hearing the disputes, obviously wherein Government is party,

make an award determining the amount of compensation which

appears to him to be "just" and specify the person or

persons to whom such compensation shall be paid. In making

the award, the arbitrator shall have regard to the

circumstances of each case and the provisions of sub

sections (2) deals with payment of compensation for the

property requisitioned. Sub section (3) contemplates

compensation payable for the property acquired under Section

7. It envisages that the compensation payable "shall, in the

absence of an agreement, be the price which the

requisitioned property would have fetched in open market, if

it had remained in the same condition as it was at the time

of its requisition and been sold on the date of

acquisition".

It would thus be seen that in determining compensation

in respect of the acquired property, which is the subject

matter of prior requisition and was in possession of the

Government, the principle for determination of compensation

is as per the bi-lateral agreement between the owner and the

Government. Where it was not effectuated and no agreement

was reached, the arbitrator is empowered tho determine the

compensation which the requisitioned property would have

fetched in open market, if it had remained in the same

condition as it was at the time of its requisition but the

prevailing price should be as on the date of acquisition.

Had it been sold in the open market to a willing purchaser

by a willing vendor, the price offered by a willing

purchaser in the open market would be the yardstick. The

arbitrator, therefore, is kept in the arm chair of a willing

purchaser and should consider the circumstances attending

the requisitioned property. Had it remained with the owner

in the same condition as it was at the time of its

requisition and if it were to be sold on the date of

acquisition in that condition, the price a willing purchaser

would offer would be just and fair compensation under the

Act. The Acquisition Act provides for payment of interest

under Section 34 by the Land Acquisition Officer and by the

Court under Section 23. Similarly, Section 23(2) provides

for payment of solatium, in addition to compensation, in

consideration of compulsory acquisition. The presumptive

evidence furnishes that the Jammu & kashmir Legislature was

aware of the above provisions and principles of

determination of the compensation under the Acquisition Act.

Yet, the Legislature departed from those principles;

instead, it set down under the Act its own principles to

determine the compensation. The Act did not expressly

provide for payment of interest and solatium as components

of compensation under the Act.

The question, therefore, emerges: whether it is

necessary for the State Legislature to expressly specify

that interest or solatium shall not be payable for the lands

or property acquired under Section 7(1) of the Act. Sub

silentio is eloquent. It would further be seen that Section

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8 of the Central Act equally does not provide for payment of

solatium and interest. The act was passed in the year 1968

while the Central Act was passed in 1952 . It would,

therefore, be reasonable to conclude that the State

Legislature was cognizant to the express provisions for

payment of interest and solatium available in the

Acquisition act. The Act omitted similar provisions for

payment of interest and solatium as part or component of

compensation, obviously to fall in line with the Central

Act.

In satinder singh's case [supra] East Punjab

Acquisition and Requisition of Immovable Property(Temporary)

Powers Act, 1948 did not provide for any principle on which

the compensation in respect of the property acquired

thereunder was to be determined. Section 5(e) of that Act

makes Section 23(1) of the Land Acquisition Act, 1894

specifically applicable for determination of compensation.

Contention raised therein was that sections 23(2), 28 and 34

by necessary implication stood excluded. Considering the

said contention, the general principle of law as regards the

right to interest on the compensation of immovable property

was discussed and it was held that when possession of

immovable property is taken form an owner, there is a

general implied agreement to pay interest on the value of

the property. On this premise, the claim for interest was

made against the state. Accordingly. it was held that

Sections 28 and 34 providing for payment of interest and

Sections 23(2) for payment of solatium. were not excluded.

The ratio, therefore, must be understood in the light of the

facts found there n . Thus considered, we find that the

ratio in Harikishan Khosla's case and in Satinder Singh's

case are not in mutual conflict nor the former has the

effect of overruling the latter. the difficulty arises in

understanding the ratio in proper perspective.

In National Insurance co. Ltd., Calcutta vs. Life

Insurance Corporation of India [1963 Supp.(2) SCR 9711 the

business of insurance carried on by the appellant was

nationalised under Life Insurance Corporation Act, 1956 and

stood vested in the Life Insurance Corporation of India on

and from September 1, 1956, The appointed day. The dispute

between the parties related to the compensation payable to

the appellant corporation of n such vesting and one of the

issues was whether interest was payable on such

compensation. There was no express provision for payment of

interest as the life insurance business vested in the life

Insurance corporation. The Tribunal had held that it had no

jurisdiction to award interest since there was no express

provision in the act. It was conceded during the hearing in

this Court that the corporation agreed to pay interest

awardable but the dispute was about the rate of interest,

the amount on which it is payable and the date from which it

should be given. Considering the contentions in that

background, this Court had held that the property remained

just where it was. The purchaser has the money in his pocket

and the seller has the estate vested in him but the

character changes in a court of equity; the seller becomes

the owner of the money and the purchaser becomes the owner f

the estate. On entering possession, the purchaser becomes

entitled to the rent but if he has not paid the price,

interest in equity is payable by him on the purchase price

which belongs to the seller. On this principle, this court

referred with approval the ratio in satinder Singh's case.

In this background, it would be seen that there is no

dispute as regards the principle of law on the right to

receive interest on the value of the property from the date

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of taking possession by the purchaser from the seller when

the purchase price was not paid. The question whether the

land holder would be entitled to interest when the Act

omitted payment thereof did not arise therein since the Life

Insurance Corporation had agreed to pay interest on the

value of the life insurance business of the appellant

therein which vested in the Life Insurance corporation,

Therefore, the ration in this case is also of little

assistance to the facts in this case. The facts in Prabhu

Dayal & ors. vs. Union of India [1995 Supp. (4) 221] were

that the property of the appellants was acquired under the

Central Act but the appellants received the compensation

under protest. The arbitrator was not appointed for a long

period by the Government as enjoined under Section 8 of that

Act to determine the market value. In Harbans Singh Shanni

Devi V Union of India [Civil] Appeal Nos 470-71 of 1985]

decided on February 11. 1985 which was followed in

Harikishan Khosla's case, solatium and interest were awarded

to the claimants. The question which arose for decision in

these cases was as to the laches on the part of the Union of

India in appointing an arbitrator to determine compensation

and whether the owner was disentitled to interest and

solatium. This court applied the principle of equity and

directed payment of solatium and interest to recompensate

loss of enjoyment of the money payable towards compensation.

The ratio, therefore, is of no avail to the appellants.

All the decisions cited by Mr. Vaidyanathan in support

of his contention on solatium were considered in Harikishan

Khosla's case. His repeated attempts failed to persuade us

to have that decision referred to a larger Bench of five

Judges, we are unable to persuade ourselves to doubt the

correctness of the judgment in Harikishan Khosla's case. All

the decisions cited by the counsel were considered in

extenso bu the Bench in Hari Krishna Khosla's case we are,

therefore, of the opinion that it is not necessary to

reexamine all the decisions once over,. We are in respectful

agreement with the ratio in Harikishan Khosla's case. It

would be seen that sub section(2) of Section 23 of the

Acquisition Act expressly states that solatium is "in

addition" to the compensation as consideration for

compulsory nature of acquisition. This distinction was

pointed out n catena of decisions including the one referred

by a Bench of three Judges in Prem Nath Kapur & Anr. v.

National Fertilizers Corporation of India Ltd. &

ors.[(1996)2 SCC 71] . For parity of reasons, without

further discussion it was held that interest also was not

payable. We, therefore, respectfully agree with the ratio in

Harikishan khosla's case that the Act omitted to pay

solatium and interest , in addition to compensation. The

omission by the legislature, as stated earlier, is

deliberate. In district Judge Udhampur's case, a Bench of

two judges of this court had held that the claimant is not

entitled to solatium and interest. Accordingly, we hold that

the respondents are not entitled to solatium and interest.

It is then contended by Mr. Vaidyanathan that citizens

in jammu & Kashmir have fundamental right to property under

the J & K constitution. The State Act was not incorporated

in Schedule IX of the Constitution. The omission to pay

solatium and interest is unconstitutional, arbitrary

offending Article 14 of the constitution. The similar

contention raised in Harikishan Khosla's case was considered

and rejected. It was held that it is not violative of

Article 14. We are in respectful agreement with the same.

The Act is not violative of even Article 31 of the

constitution as application to Jammu & Kashmir.

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The contention that the denial of solatium and interest

in respect of the property acquired under the Act would be

an unjust enrichment of the State, is devoid of substance.

The public money is credited to the Consolidated Fund which

is expended in accordance with the Appropriation Bill passed

by the Parliament or the State legislature in accordance

with the provisions of the Constitution. The amount

collected would be expended for the purposes of

appropriation and for implementation of the Directive

principles of the state policy and the law made by the

appropriate legislature or the executive policy in

furtherance thereof . Therefore, the non-payment of solatium

and interest does not independently get into the coffers of

the public exchequer nor does the State enrich itself. The

public money is expended only for public purpose. The

concept of unjust enrichment by the state is alien to and in

derogation of the constitutional scheme and public policy.

The general principal is that one should not be permitted to

unjustly enrich himself at the expense of other. Unjust

enrichment of a person occurs when he has and retains money

or benefits which injustice and equity belongs to another.

Three elements must be established in order to sustain a

claim based on unjust enrichment, the benefit conferred upon

the defendant by the plaintiff; appreciation of knowledge by

the defendant of the benefit under such circumstances as to

make it inequitable for the defendant to retain the benefit

without payment of its value. These principles specifically

absent in the case of omission by a statute, are made by the

competent Legislature to award interest or solatium, in

addition to compensation. So it cannot be to characterised

as unjust enrichment where such action does not involve

violation of law or is not opposed to public policy either

directly or indirectly when the statute prescribes the

principle for payment of compensation and omits as its

policy to provide for the payment of interest and solatium

as component of compensation. It is the legislative public

policy to provide for acquisition of the private property

for a public purpose. The state pays compensation for the

acquired land in accordance with the principle laid down in

the statute. It would, therefore, be illogical to contend

that by legislative omission to pay solatium and interest

the State enriches itself unjustly at the expense of the

private person. The contention, therefore, is unsustainable

in law.

Accordingly, we hold that the High court and the

arbitrator committed manifest grave error of law in

awarding solatium and interest on the compensation

determined under Section 8 of the Act.

The appeal is accordingly allowed. The award of

solatium and interest on the compensation awarded stands set

aside. The compensation stands upheld, but, in the

circumstances, without costs.

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