Ex.FA 15/2008 & Cross Objection 66/2008 – Director, Integrated Fisheries Project v Shine Abraham and The State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR WEDNESDAY, THE 6TH AUGUST 2008 / 15TH SRAVANA 1930 Ex.FA.No. 15 OF 2008 & C.O. 66 OF 2008 ---------------------AGAINST THE ORDER IN IA.1383/2006 IN LAR.1367/1988 OF III ADDL.SUB COURT, ERNAKULAM APPELLANT/2ND RESPONDENT IN THE I.A. ----------------------------------------------------- THE DIRECTOR, INTEGRATED FISHERIES PROJECT, FORESHORE ROAD, ERNAKULAM, COCHIN - 16. BY ADV. SRI.MOHAN C.MENON RESPONDENTS: IST RESPONDENT AND APPLICANT IN THE I.A. ----------------------------------------------------- 1. SMT.SHINE ABRAHAM, W/O.T.J.VARGHESE, "SWARGA" THAIPARAMPIL, FACT, ELOOR P.O ERNAKULAM 683 501. (CROSS OBJECTOR) 2. THE STATE OF KERALA, REPRESENTED BY THE DISTRICT COLLECTOR, ERNAKULAM. ADV. SRI.S.SREEKUMAR FOR R1 (CROSS OBJECTOR) GOVERNMENT PLEADER SRI. R. LAKSHMINARAYANAN. THESE EXECUTION FIRST APPEAL & CROSS OBJECTION HAVING BEEN FINALLY HEARD ON 06/08/2008, ALONG WITH EX. FA NO. 16 OF 2008 & CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## P.R. RAMAN & T.R. RAMACHANDRAN NAIR, JJ. = = = = = = = = = = = = = = = = = = = = EX. F.A. Nos. 15/2008, 16/2008, 17/2008, 18/2008,19/2008, 20/2008, 21/2008, 22/2008, 23/2008, 24/2008, 25/2008, 26/2008/ 27/2008, 28/2008, 29/2008, 30/2008, 31/2008, 32/2008, 33/2008, 34/2008 & 35/2008 & Cross Objections 66/2008, 65/2008, 57/2008, 59/2008, 58/2008, 69/2008, 71/2008,50/2008, 64/2008, 55/2008, 39/2008, 68/2008, 72/2008, 67/2008, 60/2008, 63/2008, 61/2008, 62/2008, 25/2008, 70/2008 & 47/2008. = = = = = = = = = = = = = = = = == = = = = = = = = = = = = = = DATED THIS, THE 6TH DAY OF AUGUST, 2008. ## _**J U D G M E N T**_ ## _Raman, J._ The above appeals and cross appeals arise out of a common order passed by the Sub Court, Ernakulam, in a restitution proceeding initiated by the appellants herein by filing separate interlocutory applications in each of the Land Acquisition Reference. Hence we dispose of these appeals and cross objections by this common judgment. 2. Earlier, civil revision petitions were filed before this Court as CRP 197/2006 and connected cases which came up before the learned Single Judge and by order dated 20th March, 2008, the learned Single Judge found that since the revisions are preferred in execution proceedings against the order of the Land Acquisition Court in a restitution proceedings under ## _**EX.F.A. 15/2008 & CON. CASES**_ :2: Section 144 of the Code of Civil Procedure, arising out of the extension of the final judgment, the proper remedy is to file Execution First Appeals and not civil revision petitions. So with liberty to the revision petitioners to file Ex.F.As, the revision petitions were closed. At that time, in some connected matters, appellants had already preferred Execution First Appeals. Pursuant to the order passed by the learned Single Judge closing the civil revision petitions and giving liberty to the appeals, appeals were filed in respect of those orders also. 3. In the application filed before the court below, the appellant contended that they have deposited 50% of the amount as decreed by the Land Acquisition Court which is in excess of the amount legally due as per the final judgment rendered by this Court in the Land Acquisition Appeals. Hence they claimed refund of the excess amount with interest. The court below, by the impugned order, allowed the application and quantified the amount refundable in each case and ordered to refund the amounts with interest at 6% per annum from the date of filing interlocutory applications. Though it was contended by the appellant that he is entitled for the normal rate of interest prevalent at that time and also that he is entitled for such interest from the date of withdrawal of the amount by the respondent, the court below did not allow interest at the market rate; but only allowed ## _**EX.F.A. 15/2008 & CON. CASES**_ :3: interest at the rate of 6% per annum. Further awarding of the interest was only from the date of filing the application and not from the date of withdrawal of the deposited amount. Aggrieved thereby, these appeals are filed. 4. Before going to the contentions raised, we may now state the facts in brief as follows: For the purpose of construction of staff quarters for Integrated Fisheries Project, at Ernakulam, plots of land were acquired by the State belonging to the respondents herein. The Integrated Fisheries Project is a project owned by the Government of India. Notification was issued under the Kerala Land Acquisition Act on 6.10.1984 and 29.10.1984. The Land acquisition awards were eventually passed. Dissatisfied with the amount awarded, claimants preferred reference application and ultimately, the matter was referred to the Sub Court for adjudication. The Sub Court, in the various land acquisition references proceeded to determine the compensation payable and awarded enhancement of compensation. The judgment and decree passed by the court below were subjected to appeal before this Court both by the appellant as also by the respondents. While the appellant contended that the enhancement granted by the court below is unjustified and in excess , respondents claimed more amount by way of compensation. At the time of filing the application, they also sought for ## _**EX.F.A. 15/2008 & CON. CASES**_ :4: stay of execution of the decree. This Court, by an interim order, directed deposit of 50% of the decreed amount as a condition for granting stay. That was complied with and amounts were deposited. Final judgments were rendered later, on 22.6.1993 and the enhanced compensation as given by the Land Acquisition Court was reduced. There was a further appeal before the apex court without success and the matter has thus become final. In the final judgment rendered, this Court reduced the market value of the land and re-fixed the same in the case of dry land at Rs.14,000/- per cent and at Rs. 12,000/- per cent in the case of wet land. The claimants were declared entitled to the benefits under Section 23(1A) of the Amended Act for the period from 30.7.1985 to 13.1.1987. They were also held entitled to the benefits under Section 28 of the Amendment Act besides 30% solatium. It was made clear that if the claimants have realised amounts in excess, the appellants can recover the same by due process of law. 5. The claimants, as stated, withdrew the amount deposited before rendering the final judgment and thereafter they did not do anything, possibly because whatever amounts they have received were in excess of what is legally due to them. It was the appellants who then moved by the present applications for restitution. 6. The respondents/ claimants contended that the calculation made by _**EX.F.A. 15/2008 & CON. CASES**_ :5: the appellant is not correct. They denied that there is any excess payment to them. In reply, the appellant reiterated their contention that the amount claimed by them by way of restitution is correct and their calculation statement is also correct. They also filed calculation statement in each case. The respondents also filed calculation statement along with their counter affidavit. There was a dispute as to whether the appellants are entitled for any interest as claimed by them and if so, from which date. The court below therefore, proceeded to consider the points namely, (i) whether the claimants received any excess amount than actually what is legally due to them as per the appellate decree and if so, what is the quantum and (ii) reliefs and costs. 7. Exts.P1 to P5 were marked on the side of the appellant. The court below found that the amounts already withdrawn by the claimants is in excess of what is legally due to them. On this point, there is hardly any dispute by the respondents in these appeals They only dispute the quantum determined by the court below which is found to be in excess of the amount legally due to them. 8. It is not disputed that as against the enhancement of compensation granted by the court below, appeals were preferred before this Court, which ended in reduction of enhancement so made and as a ## _**EX.F.A. 15/2008 & CON. CASES**_ :6: result, the total compensation payable came to be reduced. Though there were further appeals to the apex court, those appeals were dismissed as per order dated 17.12.1993. Thus, the judgment of the High Court became final. It was also observed in the appellate judgment of this Court that if the claimants have realised amounts in excess, certainly the appellants are entitled to recover the same in accordance with law. 9. Pending the appeals, deposits were made before the execution court as shown in Column 12 of the table appended to the order and as found by the court below, large amounts were withdrawn by the claimants. Petitioners would contend that they are entitled for interest at 15% for the excess amount received by the claimants, from the next day of deposit, till the date of the petition. In the calculation statement prepared by the claimants, they have started with the calculation including the amount awarded by the Land Acquisition Officer which was already received by them even before the reference. The court below, following the decision in _**Gurprit Singh V. Union of India**_ (2006 (8) SCC 457), wherein it is held that the appropriation of amount deposited by the State towards the award is to be made at different award stages under the scheme of the Land Acquisition Act, 1984 in respect of successive awards made by the Collector, Reference Court, High Court or Supreme court. It therefore, _**EX.F.A. 15/2008 & CON. CASES**_ :7: found that it was not proper on the part of the respondents/claimants to mix up the amount awarded by the Collector and received by them with the award of the reference court or that of the appellate court. We find that the reference is only for claiming further enhancement over the compensation already awarded by the Land Acquisition Officer. On reference, the court below has awarded enhancement. There was a further appeal to this Court which was allowed and market value of the property reduced. Therefore, as per the decree passed by the reference court as modified by this court, whatever amount is due alone need be looked into since 50% of the amount is towards the decreed amount by the Land Acquisition Court. Therefore, the total amount as ordered by the High court towards enhancement in the land value as also the other statutory benefits referred to above has to be taken together, for the purpose of considering as to what is the excess amount withdrawn by the claimants. If the amount payable to each of the claimant is arrived at and deducted the same from the amount already withdrawn, the balance will be the actual amount refundable by the claimants. The amount now found due as excess is seriously disputed and the claimants have also filed cross appeals. In this connection it was pointed out by the respondents that the court below was not right in disallowing interest on solatium on the ground that the award of the ## _**EX.F.A. 15/2008 & CON. CASES**_ :8: appellate court was before 19.9.2001. Reliance is placed on the decision of the Apex Court in _**Gurprit Singh v. Union of India**_ (2006 (8) SCC 457). 10. In the said decision the Apex Court, in para 54 of its judgment considered the question whether in the light of _**Sunder's**_ case ((2001) 7 SCC 211) the awardee/decree-holder would be entitled to claim interest on solatium in execution though it is not specifically granted by the decree. It was held that if the award of reference court or of the appellate court does not specifically refer to the question of interest on solatium or in cases where claim had not been made and rejected either expressly or impliedly by the Reference Court or the appellate court and merely interest on compensation is awarded, _then it would be open_ to the execution court to apply the ratio of _**Sunder's case**_ (supra) and say that the compensation awarded includes solatium and in such an event interest on the amount could be directed to be deposited in execution. Otherwise not. It was also clarified that such interest on solatium can be claimed only in pending executions and not in closed executions and the execution court will be entitled to permit its recovery from the date of the judgment in _**Sunder's**_ case (19.9.2001) and not for any prior period. This will not entail any reappropriation or fresh appropriation by the decree holder. Now let us turn to the operative portion of this court's judgment in the Land Acquisition _**EX.F.A. 15/2008 & CON. CASES**_ :9: Appeal. It is held :- "We hold that the claimants are entitled to the benefits under Section 28 of the Amended Act. We make it clear that the claimants are entitled to 30% solatium. . . . . . .. . .. . . . ..." Hence even as per the final decree passed, the claimants are entitled for the interest under Section 28 of the Amended Act. Therefore, the court below went wrong in disallowing interest. We hold that the claimants are entitled for interest on solatium with effect from 19.9.2001 and the benefits under Section 23(1-A) of the Act. The finding of the court below on this point is set aside and the Cross Appeals allowed to this extent. 11. Resultantly, we direct the court below to re-calculate the amount due to each of the claimants. But the claimants have admitted as per the statement filed certain amounts which are admittedly drawn by them in excess. Therefore, we direct that in each of the cases, the admitted excess amount has to be deposited within a period of one month from today, along with interest to be fixed by this court. 12. As regards the interest payable, the court below has proceeded on the basis that the appellants will be entitled for interest only from the date of filing the petition. If amounts have been drawn in excess of what is legally due, necessarily restitution has to be made on the date of withdrawal and not ## _**EX.F.A. 15/2008 & CON. CASES**_ :10: the date on which the application is filed. Since admittedly, the present applications are filed well within time, there is no reason to hold that by way of restitution, benefit of interest will be confined only from the date of application. As a matter of fact, whole of amounts deposited would have continued to be in deposit if the claimants did not withdraw the amount. Necessarily such withdrawal is at the risk of the claimants to re-deposit the same in case it is found to be in excess of what is legally due to them. Having withdrawn the amounts in excess, it cannot be said that they are not liable to pay interest from the date of such withdrawal. At any rate, when this Court disposed of the appeals, nothing prevented the claimants from redepositing the amount based on their own calculation. But they did not choose to do so and it is only when the appellant preferred an application for restitution that they came to say that they are not liable to pay interest. We find that since what is sought for is a restitution, if any amount is withdrawn in excess, claimants are liable to pay interest. 13. The above view we took is fortified by the decisions of the apex court in the following cases:- In _**Binayak v. Ramesh**_ ( 1966 SCR 24) it was held as follows: The principle of the doctrine of restitution is that on the reversal of a decree the law imposes an obligation on the party to the suit who received the _**EX.F.A. 15/2008 & CON. CASES**_ :11: benefit of the erroneous decree to make restitution to the other party for what he has lost. The Court in making restitution is bound to restore the parties so far as they can be restored to the same position they were in at the time when the Court by its erroneous action had _**displaced them from."**_ In _**South Eastern Coalfields Ltd. V. State of M.P.**_ ((2003) 8 SCC 648) the apex court held as follows: " The principle of restitution has been statutorily recognised in Section 144 of the Code of Civil Procedure, 1908. Section 144 CPC speaks not only of a decree being varied, reversed, set aside or modified but also includes an order on a par with a decree. The scope of the provision is wide enough so as to include therein almost all the kinds of variation, reversal, setting aside or modification of a decree or order. The interim order passed by the court merges into a final decision. The validity of an interim order, passed in favour of a party, stands reversed in the event of a final decision going against the party successful at the interim stage. Unless otherwise ordered by the court, the successful party at the end would be justified with all expediency in demanding compensation and being placed in the same situation in which it would have been if the interim order would not have been passed against it. The successful party can demand (a) the delivery of benefit earned by the opposite party under the interim order of the court, or (b) to make restitution for what it has lost; and it is the duty of the court to do so unless it feels that in the facts and on the circumstances of the case, the restitution far from meeting the ends of justice, would rather defeat the same. Undoing the effect of an interim order by resorting to principles of restitution is an obligation of the party, who has gained by the interim order of the court, so as to wipe out the effect of the interim _**EX.F.A. 15/2008 & CON. CASES**_ :12: order passed which, in view of the reasoning adopted by the court at the stage of final decision, the court earlier would not or ought not to have passed. There is nothing wrong in an effort being made to restore the parties to the same position in which they would have been if the interim order would not have existed. Section 144 CPC is not the fountain source of restitution, it is rather a statutory recognition of a pre-existing rule of justice, equity and fair play. That is why it is often held that even away from Section 144 the court has inherent jurisdiction to order restitution so as to do complete justice between the parties." In _**Kartar Singh v. State of Punjab**_ ((1995) 4 SCC 101) the apex court held thus: "The restitution is consequential to the variation or reversal of the decree or on its being modified or set aside. The condition precedent for restitution, therefore, is that the decree of the trial court must be reversed or varied in appeal or otherwise. The word "consequentially" lays emphasis on the obligation on the party to the suit or proceedings which received the benefit of the erroneous decree to make restitution to the other party for what he has lost. The court, therefore, is bound to restore the parties, as far as they can be, to the same position were at the time when the court by its erroneous action had displaced them from it. Equally where a sum of money was recovered in execution by a decree which was subsequently reversed or varied, the judgment - debtor is entitled to get back not only the sum recovered but also the _interest thereon_ or damages or compensation for the period that the amount had been retained by him. The owner or the person interested in the land when recovered the _**EX.F.A. 15/2008 & CON. CASES**_ :13: compensation under the award and decree which was reversed, varied or modified on appeal, the court is empowered under Section 144 CPC to restitute the amount to the State with interest or quantified damages or by way of compensation. Granting of interest or damages or compensation is consequential to the variation, reversal or setting aside of the enhanced compensation under Section 23(1) and computation of statutory interest under Section 28 on enhanced compensation and interest on solatium if paid as per the decree or order of the court. The State is entitled to restitution of the benefit accrued to the owner in the original decree. Direction to restitute the amount with interest is within the powers conferred on the court under Section 144 of the Code." 14. The next question is what is the rate of interest payable. Though the appellants would contend that they are entitled for 15% interest, no materials are placed before us to calculate the rate of interest and what was the prevailing rate of interest for deposits. If the appellants were put back in the same position had the amount continued in deposit, it cannot be said that they will be entitled for any interest on the amount which continued to be in deposit in the court since it would have been in a dead account. At the same time, the respondents herein cannot be heard to contend that they are not liable to pay any interest because they have made an unlawful enrichment by withdrawing the excess amount. Therefore, we consider it appropriate that a reasonable rate of interest has to be paid, though at the _**EX.F.A. 15/2008 & CON. CASES**_ :14: appellate stage. The Reserve Bank rate prevailing for the period in question for the deposits cannot be straight away accepted without proper proof for the same. However, we find that the court below allowed only 6% interest which is far minimum. On an overall consideration, we think, in the factual situation, that the appellants are entitled for interest at the rate of 8% on the excess amount from the date of withdrawal till the date of repayment. The admitted excess amount withdrawn as per the statement filed, along with 8% interest from the date of withdrawal shall be deposited/paid within a period of one month. The court below will work about the balance amount after giving a opportunity to both sides. 15. The appeals and cross appeals are disposed of accordingly. The parties are directed to bear their respective costs in these appeals. Even though the appellants pressed for cost in the court below also which was not allowed, we find that in the matter of cost the court below has exercised its discretion and we do not want to interfere with the same. P.R. RAMAN, (JUDGE) knc/- T.R. RAMACHANDRAN NAIR, (JUDGE)