Supreme Court Upholds Solatium and Interest for Delayed Compensation Under the Requisitioning Act: Union of India vs. Dr. Asket Singh (2024)

Date of the Judgment: May 01, 2024

Citation: 2024 INSC 409

Judges: Abhay S. Oka, J., Ujjal Bhuyan, J.

Can the government delay compensation for land acquisition for decades without consequences? The Supreme Court of India recently addressed this critical question in a case concerning land acquired under the Requisitioning and Acquisition of Immovable Property Act, 1952. The Court examined whether landowners are entitled to solatium and interest for inordinate delays in receiving compensation, even when the Act itself doesn’t explicitly provide for such remedies. This judgment clarifies the obligations of the acquiring body towards landowners and reinforces the constitutional right to property.

The Supreme Court bench, comprising Justices Abhay S. Oka and Ujjal Bhuyan, delivered the judgment. The judgment was authored by Justice Abhay S. Oka.

Case Background

The respondents in this case were the owners of land acquired by the Ministry of Defence under the Requisitioning and Acquisition of Immovable Property Act, 1952. The acquisition process began with a notice issued on March 26, 1964, which was published in the State Government Gazette on April 3, 1964. Upon publication, the acquired property was legally vested with the government.

The process of determining compensation for the acquired land, as per Section 8 of the 1952 Act, involves either an agreement between the acquiring body and the owners or, failing that, the appointment of an arbitrator by the Central Government. In this case, the government made an offer for compensation only on August 16, 1976, a delay of over 12 years. The landowners rejected this offer, prompting the Land Acquisition Officer to request the appointment of an arbitrator on October 8, 1976. The Additional District Judge, Gurdaspur, was appointed as the Arbitrator. The Arbitrator declared an award on May 8, 1998, nearly 22 years later, determining the market value of the land to be Rs. 150 per Marla.

Timeline

Course of Proceedings

Both the landowners and the government appealed the Arbitrator’s award. The High Court, in its judgment, determined the market value to be Rs. 350 per Marla, based on the valuation of similarly situated lands. Citing previous Supreme Court decisions in Harbans Singh Shanni Devi v. Union of India and Union of India v. Chajju Ram, as followed in Dilawar Singh & Ors. v. Union of India & Ors., the High Court also granted solatium at 30% of the market value and interest on the compensation at 9% and 15% for the delay in completing the arbitral proceedings.

Legal Framework

The case revolves around the interpretation and application of the Requisitioning and Acquisition of Immovable Property Act, 1952, particularly Section 7 which deals with the issuance of the notice for acquisition and Section 8 which deals with compensation. Section 8 of the 1952 Act states:

“8. Compensation.—(1) Where any property is requisitioned under section 3, there shall be paid compensation the amount of which shall be determined in the manner and in accordance with the principles hereinafter set out, that is to say,— (a) where the amount of the compensation can be fixed by agreement, it shall be determined in accordance with such agreement; (b) where no such agreement can be reached, the Central Government shall appoint as arbitrator a person who is or has been or is qualified to be a Judge of a High Court; (c) the Central Government may, in any particular case, nominate a person having expert knowledge as to the nature of the property requisitioned to assist the arbitrator, and where such nomination is made, the person to be compensated may also nominate an assessor for the same purpose; (d) at the commencement of the proceedings before the arbitrator, the Central Government and the person to be compensated shall state what in their respective opinions is a fair amount of compensation; (e) the arbitrator shall, after hearing the parties, make an award determining the amount of compensation which appears to him to be just and specifying the person or persons to whom such compensation shall be paid; and in making the award, the arbitrator shall have regard to the circumstances of each case and the provisions of sub-section (2) so far as they are applicable; (f) where there is any dispute as to the person or persons who are entitled to the compensation, the arbitrator shall decide such dispute and if the arbitrator finds that more persons than one are entitled to compensation, he shall apportion the amount thereof among such persons.”

The judgment also references Article 300A of the Constitution of India, which guarantees the right to property. Although the right to property is no longer a fundamental right, it remains a constitutional right, ensuring that no person shall be deprived of their property save by authority of law.

Arguments

Appellants’ Arguments:

• The appellants argued that the High Court should not have awarded both solatium and interest.
• They contended that the previous cases where solatium and interest were granted involved delays in the appointment of an arbitrator by the Central Government.
• In this case, the delay was primarily in the disposal of the arbitral proceedings, not in the initial appointment of the arbitrator.

Respondents’ Arguments:

• The respondents argued that the High Court’s decision to grant solatium and interest was correct.
• They highlighted that the entire compensation amount was received only about 7 years prior to the judgment.
• They emphasized the inordinate delay in the entire process, from the initial acquisition to the final payment of compensation.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in this judgment. However, the core issue that the court addressed was:

• Whether the High Court was correct in granting solatium and interest to the landowners considering the delay in the payment of compensation under the Requisitioning and Acquisition of Immovable Property Act, 1952.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

• Harbans Singh Shanni Devi v. Union of India, Civil Appeal No.470-471 of 1985, Supreme Court of India: This case established the principle of granting solatium and interest in cases of inordinate delay in the appointment of an arbitrator.
• Union of India v. Chajju Ram, (2003) 5 SCC 568, Supreme Court of India: This case reiterated the principle that solatium and interest can be granted for delays in compensation under the Requisitioning and Acquisition Act.
• Dilawar Singh & Ors. v. Union of India & Ors., (2010) 14 SCC 357, Supreme Court of India: This case followed the principles laid down in Harbans Singh Shanni Devi and Chajju Ram, highlighting the distinction between delays in appointing an arbitrator and delays in the arbitral process.
• Union of India v. Hari Krishan Khosla, 1993 Supp (2) SCC 149, Supreme Court of India: This case upheld the validity of the Requisitioning and Acquisition Act, 1952, against the challenge that it did not provide for solatium and interest.
• Section 8 of the Requisitioning and Acquisition of Immovable Property Act, 1952: This section deals with the determination of compensation for acquired property.
• Article 300A of the Constitution of India: This article guarantees the right to property.

Judgment

How each authority was viewed by the Court?

• The Court relied on Harbans Singh Shanni Devi v. Union of India [CITATION], Union of India v. Chajju Ram [CITATION], and Dilawar Singh & Ors. v. Union of India & Ors. [CITATION] to emphasize that solatium and interest are applicable in cases of inordinate delay in payment of compensation.
• The Court distinguished Union of India v. Hari Krishan Khosla [CITATION], noting that while the Act does not explicitly provide for solatium and interest, these can be granted in cases of significant delay.
• The Court interpreted Section 8 of the Requisitioning and Acquisition of Immovable Property Act, 1952, to include the requirement that compensation must be paid within a reasonable time from the date of vesting.
• The Court highlighted that the delay in payment of compensation violated the landowners’ rights under Article 300A of the Constitution of India.

What weighed in the mind of the Court?

The Supreme Court was primarily influenced by the inordinate delay in the payment of compensation to the landowners. The Court emphasized that the delay of more than 12 years in offering compensation was solely attributable to the Central Government. The Court also noted that the landowners were deprived of their property for an extended period without receiving timely compensation, which is a violation of their constitutional rights.

The Court’s reasoning was heavily influenced by the factual circumstances of the case, particularly the extensive delay in offering and paying compensation. The legal principles of timely compensation and the protection of property rights under Article 300A of the Constitution also played a significant role.

Logical Reasoning:

The Court rejected the argument that the delay was solely in the arbitral proceedings, emphasizing that the initial delay in offering compensation was the responsibility of the Central Government. The Court stated, “We must record here that this delay of more than 12 years is attributable solely to the Central Government.” The Court also highlighted that “The requirement of making payment of compensation within a reasonable time from the date of vesting must be read into the 1952 Act.” The Court further observed, “In fact, such a long delay of 12 years even in offering compensation will attract arbitrariness which is prohibited by Article 14 of the Constitution of India.”

Key Takeaways

• Landowners are entitled to solatium and interest for inordinate delays in receiving compensation for acquired land, even if the relevant Act does not explicitly provide for it.
• The government must ensure timely payment of compensation from the date of vesting of the property.
• Inordinate delays in offering or paying compensation can be deemed arbitrary and a violation of Article 14 and Article 300A of the Constitution of India.
• The requirement of making payment of compensation within a reasonable time from the date of vesting must be read into the Requisitioning and Acquisition of Immovable Property Act, 1952.

Directions

The Supreme Court did not issue any specific directions in this judgment. However, the dismissal of the appeal implies that the High Court’s order to grant solatium and interest stands.

Specific Amendments Analysis

There were no specific amendments discussed in this judgment.

Development of Law

The ratio decidendi of this case is that even in the absence of explicit provisions in the Requisitioning and Acquisition of Immovable Property Act, 1952, solatium and interest must be granted to landowners for inordinate delays in the payment of compensation. This judgment reinforces the principle that the right to property, though not a fundamental right, is a constitutional right, and that the government must act fairly and reasonably in matters of land acquisition and compensation. This case also clarifies that the delay in offering compensation, and not just the delay in the arbitral proceedings, is a ground for granting solatium and interest.

Conclusion

In Union of India & Anr. vs. Dr. Asket Singh & Ors., the Supreme Court upheld the High Court’s decision to grant solatium and interest to landowners for the inordinate delay in receiving compensation under the Requisitioning and Acquisition of Immovable Property Act, 1952. The Court emphasized that the government must ensure timely payment of compensation and that delays of more than 12 years are arbitrary and violate the constitutional rights of landowners. This judgment reinforces the principle that the right to property, though not a fundamental right, is a constitutional right, and that the government must act fairly and reasonably in matters of land acquisition and compensation.