Legal Heirs of Decree Holder v. State of Kerala and Secretary, Greater Cochin Development Authority

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE P.BHAVADASAN** ## **WEDNESDAY, THE 22ND DAY OF MAY 2013/1ST JYAISHTA 1935** ## **CRP.No. 111 of 2009 ( )** **------------------------** **AGAINST THE ORDER/JUDGMENT IN E.P.NO.78/2001 IN LAR NO.1/1991 OF SUB COURT,KOCHI DATED 21-11-2008** **......** **REVISION PETITIONER(S):LEGAL HEIRS OF DECREE HOLDER:** **---------------------------------------------------------------------------------------------** **1. THAMPI JACOB, S/O.LATE V.A.JACOB, VATTATHARA HOUSE, MUNDAMVELI, KOCHI-5.** **2. LESLIE JACOB, S/O.LATE V.A.JACOB, DO..DO...** **BY ADVS.SRI.K.V.SOHAN SMT.SREEJA SOHAN.K.** ## **RESPONDENT(S):JUDGMENT DEBTORS/RESPONDENTS:** **-------------------------------------------------------------------------------------** **1. STATE OF KERALA, REPRESENTED BY SPECIAL TAHSILDAR (LA) GRATER COCHIN DEVELOPMENT AUTORITY, ERNAKULAM, KOCHI-20.** **2. THE SECRETARY, GREAER COCHIN DEVELOPMENT AUTHORITY, KOCHI-20.** **R2 BY ADV. SRI.S.B.PREMACHANDRA PRABHU** **THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 14/03/2013, THE COURT ON 22/05/2013 PASSED THE FOLLOWING:** **Kss** ## **CRP.NO.111/2009** ## **APPENDIX** ## **PETITIONER'S ANNEXURES:** - **ANNEX.1: COPY OF THE JUDGMENT IN L.A.R.NO.1/1991 ON THE FILE OF THE ADDITIONAL SUBORDINATE JUDGE, KOCHI DTD. 21/07/1994.** - **ANNEX.II: COPY OF THE DECREE IN L.A.R.1/1991 ON THE FILE OF THE ADDITIONAL SUBORDINATE JUDGE, KOCHI, DTD. 21/07/1994.** - **ANNEX.III: COPY OF THE STATEMENT OF BALANCE DUE TO THE DECREE HOLDER SUBMITTED BY THE DECREE HOLDER IN E.P.78/2001, DTD. 28/10/2003.** **ANNEX.IV: COPY OF THE STATEMENT FILED ON BEHALF OF THE JUDGMENT DEBTORS DTD. 10/2/2004.** - **ANNEX.V: COPY OF THE ORDER OF THE PRINCIPAL SUB JUDGE, KOCHI-5 IN E.P.78/2001 IN L.A.R.1/1991, DTD.1/07/2004.** **ANNEX.VI: COPY OF THE JUDGMENT PASSED BY THE HON'BLE HIGH COURT IN WPC.NO.36842/2004 DTD. 25/05/2007.** - **ANNEX.VII: COPY OF THE FRESH STATEMENT OF BALANCE DUE AS PER THE JUDGMENT OF THE SUPREME COURT FILED BY THE DECREE HOLDER DTD. 2/06/2007.** - **ANNEX.VIII: COPY OF THE BALANCE STATEMENT FILED BY THE JUDGMENT DEBTOR, DTD. 16/07/2007.** ## **RESPONDENT'S ANNEXURES: N I L** ## **/TRUE COPY/** ## **P.S.TO JUDGE** **Kss** ## **P. BHAVADASAN, J.** - - - - - - - - - - - - - - - - - - - - - - ## C.R.P. No. 111 of 2009 - - - - - - - - - - - - - - - - - - - - - - Dated this the 22[nd] day of May, 2013. ## **ORDER** This revision is directed against the order dated 21.11.2008 in E.P. No.78 of 2001 in L.A.R. No.1 of 1991 whereby the court below has held that there is an excess deposit of Rs.27,574/- made by the State after appropriating the various payments made by the State towards the amount due to the petitioner. 2. The dispute in this case relates to the two items of payments, namely, Rs.4,45,000/- (Rs.5,00,000/- less tax) on 9.6.2000 by D.D. No.278642 and a sum of Rs.9,84,528/as per Cheque No. 031269 dated 6.4.2002 by the State towards the enhanced land value awarded to the petitioner. 3. The lower court has held that the above two amounts can be appropriated in the manner shown in pages 8 and 9 of the order and after giving credit to these amounts, it is held that the amount deposited is in excess. C.R.P.111/2009. 2 4. It is not in dispute that enhancement was sought for by the petitioner regarding the land value awarded in respect of the land acquired by the State. Substantial benefits were given to him by the Land Acquisition Court. There is no dispute regarding these amounts awarded by court under different heads. 5. The main contention raised by the learned counsel for the revision petitioners is that the two payments alleged to have been made by the State are not in terms of the decisions reported in Prem Nath Kapur v. National Fertilizers Corporation of India Ltd. (1996) 2 SCC 71) and Gurpreet Singh v. Union of India ((2006) 8 SCC 457). 6. First of the contentions is that there is no notice to the decree holder with regard to the payments. Unless notice is given of the deposit, interest continues to run. The other contention is neither of the payments cover a distinct head of the amount awarded and if that be so, the decree C.R.P.111/2009. 3 holder is entitled to appropriate the amount deposited first towards interest and then towards the principal amount. An ancillary contention is also raised that since tax has been paid by the claimant, the State is not entitled to deduct the tax from the amount due to the petitioner. 7. The claim of the petitioner is resisted by the State by saying that the amounts cover the heads specified therein and amounts have been drawn by the decree holder and so the claim cannot subsist. It is also contended that notice of the deposits have been given to the decree holder. It is also specified that the department is bound to deduct tax at source and if the claimant has already paid the tax, he may seek refund. 8. On going through the Land Acquisition Act, it can be seen that the award consists of different heads for payment and the amounts are awarded by the courts under distinct and independent heads. This is a case where C.R.P.111/2009. 4 enhanced compensation has been awarded by the court. In the decision reported in Prem Nath Kapur's case (supra), it has been held that the amounts under Section 23(1), 23(2), 34, 28 and 23(A) of the Land Acquisition Act are distinct, different and independent components. When enhanced compensation is awarded under Section 23(1) of the Land Acquisition Act, be it at any level, it relates back to the date of taking possession. However, interest will be payable on the excess amount and not on the initial amount or in respect of amounts which have been deposited in court with notice to the decree holder. In the said decision, the Apex Court went on to hold that the manner and right of appropriation is indicated in the Land Acquisition Act itself. In the said decision, it has been held as follows: “.....When the deposit is made towards the specified amounts, the claimant/owner is not entitled to deduct from the amount of compensation towards costs, interest, additional C.R.P.111/2009. 5 amount under Section 23(1-A) with interest and then to claim the total balance amount with further interest. ... The ration in Meghraj case is equally inapplicable to the appropriation of debt under the Act. It is seen that by operation of Section 53of the Act, Order 21, Rule 1 being inconsistent with the express provisions contained in Sections 34 and 28, stands excluded. The ratio therein, therefore, is applicable only to a debtor and creditor in an ordinary civil suit governed by the provisions of the CPC. Order 21, Rule 1 being inconsistent with the express provisions contained in Sections 34 and 28 of the Act, it cannot stand extended to the cases covered by the Act. It is unfortunate that these provisions were not brought to the attention of this Court when it decided Mathunni Mathai case, which make all the difference. With due respect to our learned brethren who decided that case, we are, therefore, constrained to observe that Mathunni Mathai Case cannot be taken to have laid down the correct law.” C.R.P.111/2009. 6 ## 9. In the decision reported in Gurpreet Singh's case (supra), it has been held as follows: “49. Though, a decree-holder may have the right to appropriate the payments made by the judgment-debtor, it could only be as provided in the decree if there is provision in that behalf in the decree or, as contemplated by Order 21 Rule 1 of the Code as explained by us above. The Code or the general rules do not contemplate payment of further interest by a judgment-debtor on the portion of the principal he has already paid. His obligation is only to pay interest on the balance principal remaining unpaid as adjudged either by the court of first instance or in the court of appeal. On the pretext that the amount adjudged by the appellate court is the real amount due, the decree-holder cannot claim interest on that part of the principal already paid to him. Of course, as indicated, out of what is paid he can adjust the interest and costs first and the balance towards the principal, if there is a shortfall in deposit. But, beyond that, the decree-holder cannot seek to C.R.P.111/2009. 7 reopen the entire transaction and proceed to recalculate the interest on the whole amount and seek a reappropriation as a whole in the light of the appellate decree. ........ ......... 51. Prem Nath Kapur also indicates that when an award-decree is passed specifying the amounts under different heads like the amount under Section 23(2), the amount under Section 23(1-A) and the interest under Section 28 and the judgment-debtor makes a deposit of specified sums under these different heads, it will amount to the judgment-debtor intimating the decree-holder as to how the sum deposited is to be applied in discharge of the obligation of the judgment-debtor. Once a decree-holder receives the payment of the sums thus deposited, he would be accepting the appropriation made by the judgment-debtor. Once a decree-holder receives the payment of the sums thus deposited, he would be accepting the appropriation made by the judgment-debtor under the award-decree in the scheme of the Land Acquisition Act. This part of the reasoning in Prem C.R.P.111/2009. 8 Nath Kapur is, of course, also based on the reasoning that there is some inconsistency in Order 21 Rule 1 of the Code and the scheme of the Act. Prem Nath Kapur also indicates that when the decree itself specifies the amount payable under different heads (the decree has to do so under Section 26 of the Act) and amounts are deposited towards those different heads, the appropriation would be on the basis of the direction under the decree which must be taken to be one for crediting the various sums paid under particular heads. On the scheme of the Act, especially the wordings of Section 34 and Section 28 of the Act, it is not possible to say that the said approach made in Prem Nath Kapur is erroneous or is unreasonable or is not (sic) a line of approach that is not warranted. Therefore, when the judgment-debtor State makes a deposit along with the calculation appropriating distinct sums towards various heads of compensation as awarded by the Reference Court or by the appellate court in the appellate decree, and the amount is received by the decree-holder, the decree-holder must be taken to be not entitled to C.R.P.111/2009. 9 seek an appropriation as if the judgment-debtor has not made any intimation and that he is entitled to appropriate at his violation. Considering the scheme of compensation under the Act in the context of the specific nature of the items specifically referred to in Section 23 of the Act, we are of the view that the approach adopted in Prem Nath Kapur is justified. A reappropriation by seeking to reopen the satisfaction already rendered might result in interest being made payable even on that part of the principal amount that had already been deposited and received by the decree-holder and that would be in the realm of unjust enrichment.” With regard to the interest payable, it was held as follows: “52. What is to happen when a part of the amount awarded by the Reference Court or by the appellate court is deposited pursuant to an interim order of the appellate court or of the further appellate court and the awardee is given the liberty to withdraw that amount? In such a case, the amount would be received by the decree-holder on C.R.P.111/2009. 10 the strength of the interim order and the appropriation will be subject to the decision in the appeal or the further appeal and the direction, if any, contained therein. In such a case, if the appeal is disposed of in his favour, the decree-holder would be entitled to appropriate the amount already received by him pursuant to the interim order first towards costs and the balance towards principal as on date of the withdrawal of the amount and claim interest on the balance amount of enhanced compensation by levying execution. But on the part appropriated towards principal, the interest would cease from the date on which the amount is received by the awardee. Of course, if while passing the interim order, the court has indicated as to how the deposited amount is to be appropriated, that direction will prevail and the appropriation could only be done on the basis of that direction.” Conclusions are drawn in paragraph 53 which reads as follows: C.R.P.111/2009. 11 “54. One other question also was sought to be raised and answered by this Bench though not referred to it. Considering that the question arises in various cases pending in courts all over the country, we permitted the counsel to address us on that question. That question is whether in the light of the decision in Sunder, the awardee/decree-holder would be entitled to claim interest on solatium in execution though it is not specifically granted by the decree. It is well settled that an execution court cannot go behind the decree. If, therefore, the claim for interest on solatium had been made and the same has been negatived either expressly or by necessary implication by the judgment or decree of the Reference Court or of the appellate court, the execution court will have necessarily to reject the claim for interest on solatium based on Sunder on the ground that the execution court cannot go behind the decree. But if the award of the Reference Court or that of the appellate court does not specifically refer to the question of interest on solatium or in cases where claim had not been C.R.P.111/2009. 12 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 or Sunder 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. We also clarify 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 (19.9.2001) and not for any prior period. We also clarify that this will not entail any reappropriation or fresh appropriation by the decree-holder. This we have indicated by way of clarification also in exercise of our power under Articles 141 and 142 of the Constitution of India with a view to avoid multiplicity of litigation on this question.” 10. Going by the above decisions, if the judgment debtor deposits whole or any amount covering a distinct head C.R.P.111/2009. 13 after notice to decree holder, or, on deposit, the decree holder withdraws the same, the question of appropriation by decree holder first towards interest and then towards principal does not arise. However, the judgment debtor, while depositing the amount, should specify the head to be covered by such payment. 11. The decree holder in the instant case has a grievance that the two amounts which have already been referred to were deposited without notice to the decree holder and also that the deposit does not specify the head sought to be covered by the payments. From the deposits made, it is not possible to say to which head the payment was intended to be covered by those deposits. 12. One may refer to Annexures IX and X produced along with the revision petition. In Annexure IX there seems to be an insertion that the amount should be adjusted towards the principal amount. In Annexure X, it is stated that the C.R.P.111/2009. 14 amount may pleased to be adjusted towards the principal amount and solatium. Annexure IX does not specify the head towards which the payment is to be made. Even assuming that there is notice, since there is no specific mention of the heads towards which the amount is to be appropriated, obviously, the payment made as per Annexure IX does not meet the requirements of the principle laid down in the two decisions. 13. As already noticed, each of the heads for payment constitute a distinct and separate component and in order to be an effective deposit, the deposit must specify the component and that deposit must wipe off the entire amount awarded for that component. Merely saying that it may be adjusted towards principal amount and solatium etc. will not satisfy the requirements. So, the appropriation made by the lower court with reference to the two amounts is not in terms of the principle laid down in the two decisions referred to above. C.R.P.111/2009. 15 14. At the risk of repetition, both the deposits covered by Annexures IX and X did not specify the heads and also they did not cover the entire amounts under any of the heads of components of the award. As far as the amount covered by Annexure X is concerned, there is nothing to show that notice has been given. The mode of appropriation of amounts mentioned therein is defective. As what is stated is only that the amount will be adjusted towards the principal decree amount and solatium. There is nothing to show that the amount so deposited covers the entire heads taking in the principal amount and solatium. That being the nature of deposits, the principle laid down in the above decisions apply and that the decree holder is entitled to appropriate the amount first towards interest and then towards principal amount. The court below was not justified in holding otherwise. C.R.P.111/2009. 16 15. As far as the question regarding the tax deduction is concerned, it is true that in the decision reported in Hindustan Coca Cola Beverages (P) Ltd. v. Commissioner of Income Tax ((2007) 8 SCC 463), it has been held that once it has been shown that the amount has been paid, there can be a tax deduction at source. But the principle is confined to the facts of the case and it is well settled that in cases of land acquisition, the State is bound to deduct tax at source. If there is double payment, it is for the claimant to seek repayment of the same. 16. If the mode of appropriation shown by the court below in its order is not accepted, then it follows that the statement filed by the decree holder before the court below showing the amount due to him will have to be accepted. The decree holder has also filed a statement before this court showing the balance amount due to him. There cannot be of C.R.P.111/2009. 17 much dispute that if as a matter of fact the two deposits made mention of cannot be appropriated as intended by the State, the amount shown in the statement filed by the decree holder is correct. In the result, this petition is allowed, the impugned order is set aside and the matter is remanded to the lower court to determine the actual amount due in terms of the decision in the C.R.P. and in lieu of the statement filed by the revision petitioner. Parties shall appear before the court below on or before 5.6.2013. The lower court may make every endeavour to dispose of the matter as expeditiously as possible. P. BHAVADASAN, JUDGE sb.