Ivo Agnelo Santimano Fernandes & Ors vs Government Of Goa & Anr

Ivo Agnelo Santimano Fernandes & Ors. ..Appellant(s)

- Versus -

Government of Goa & Anr. ..Respondent(s)

J U D G M E N T

GANGULY, J.

1. Heard counsel for the parties.

2. A notification dated 6.09.1984 under Section 4 of

the Land Acquisition Act, 1894 (hereinafter, `the

Act'), was issued for acquisition of land at

Sanguem, Goa, for the construction of a sports

complex. The concerned dispute relates to land in

Survey Nos. 111/1 and 111/2. The Land Acquisition

1

Collector (hereinafter, `LAC') awarded

compensation at Rs.45/- per sq. meter.

3. Aggrieved, landowners-appellants 1 to 3 and one

Ana Conceicao Antonieta Santimano filed reference

petitions against the order of the LAC under

Section 18 of the Act. The District Judge, South

Goa, passed an award dated 19.08.1992, wherein

the rate of Rs.45/- per sq. meter given by the

LAC was upheld. Additionally, they were held

entitled to severance charges @ 20% p.a. of

Rs.45/- per sq. meter in respect of the non-

acquired portion of 37,731 sq. meters. They were

also granted compensation in respect of a

boundary wall amounting to Rs.31,720/-, and other

statutory benefits. The total sum thus awarded to

them was Rs.8,80,372/-.

4. On 7.3.1996, an order was issued by the Director

of Sports and Youth Affairs, releasing funds to

2

the extent of Rs.8,80,372/-, placing the same at

the disposal of Addl. Dy. Collector, L.A., South,

Margoa, Goa, towards payment of the decretal

order of the District Judge, South Goa, Margoa in

the said land acquisition matter.

5. On 11.3.1996, Ana Conceicao Antonieta Santimano

expired leaving behind a Will dated 19.4.1995

bequeathing the additional compensation payable

by the government, to her son Herbert Santimano

Fernandes (appellant No. 2). The appellants 4, 5

and 6 are the other legal representatives of the

deceased Ana Conceicao Antonieta Santimano.

6. The death of Ana Conceicao Antonieta Santimano

was not intimated to the government. Accordingly,

pursuant to the award, the respondents prepared

two cheques each in the sum of Rs.2,06,436/-

(after deduction of taxes) in favour of the

deceased Ana Conceicao Antonieta Santimano and

appellant 1, and two cheques each in the sum of

3

Rs.2,06,437/- (after deduction of taxes) in the

names of appellants 2 and 3. The Government

addressed a letter dated 1.4.1996 to the deceased

Ana Conceicao Antonieta Santimano and appellants

1 to 3, requesting them to collect their cheques

on 8.4.1996. The appellants 2 and 4 collected

their cheques on 9.4.1996. However, the other two

cheques were not collected by the respective

claimants. On 13.9.1996, the respondents thus

deposited the uncollected cheques in their

Revenue Deposit by way of challan and utilized

the same.

7. The appellants filed an execution application

(No. 3/98) for the recovery of the balance amount

along with interest accrued thereon. In the said

execution application, the appellants raised a

dispute as to apportionment of compensation

within the meaning of Section 31(2) of the Act,

contending that Ana Conceicao Antonieta Santimano

was entitled to Rs.2,83,159.67/- and Ivo Agnelo

4

Santimano Fernandes was entitled to

Rs.2,83,159.67/- as per Survey No.111/1; and Ana

Conceicao Antonieta Santimano was entitled to

Rs.1,57,026.20/- and Herbert Santimano Fernandes

was entitled to Rs.1,57,026.20/- as per Survey

No. 111/2. It was contended that appellant 3

(Nancy Fernnades Viviera Menezes) was not

entitled to receive any sums as no enhancement

was awarded with respect to the area belonging to

her. The interested party, Ivo Agnelo Santimano

Fernandes, was thus entitled to receive a

difference of Rs.58,952/-.

8. The District Judge, South Goa, by order dated

29.10.1999, directed that the amount of

Rs.2,06,436/- each for which the cheques had been

drawn, be paid to the appellants 1 and 3, leaving

the question of interest to be determined

subsequently. Thus, on 23.3.2000, fresh cheques

for an amount of Rs.60,000/- in the name of Ivo

Agnelo Santimano Fernandes and for Rs.3,52,873/-

5 in the name of Herbert Santimano Fernandes were

issued by the respondents and deposited in court.

9. The District Judge, South Goa, by way of order

dated 18.8.2000, held that there was a dispute as

to apportionment of compensation, and in light of

the judgment in the case of Prem Nath Kapur &

Anr. v. National Fertilizers Corporation of India

Ltd. & Ors., reported in (1996) 2 SCC 71, held

that the liability of the respondents to pay

interest subsisted till the respondents had not

deposited the amount in the court. Since, the

respondents had deposited the amount of

compensation in their Revenue account and had

utilized the same instead of depositing it in

Court, the respondents were liable to pay

interest @ 15% p.a. on compensation. The relevant

portion of that determination reads as follows:

"The decree holders have not contested the

figures mentioned in the reply Exh. 20

dated 15.7.2000 filed by the judgment

debtors, which show that an amount of

Rs.8,80,372/- was due and payable to them

6

upto 31.3.1996. Decree holders nos. 1 and

2 would be therefore, entitled to receive

further interest at the rate of 15% from

1.4.1996 to 8.4.1996 on the said sums of

Rs.2,06,436/- and Rs.2,06,437/-

respectively. Likewise, decree holder no.

1 would also be entitled to receive

further interest at the rate of 15% on

Rs.60,000/- from 1.4.1996 to 7.1.2000 and

decree holder no. 2 would also be entitled

to receive further interest at the rate of

15% on Rs.3,52,872/- from 1.4.1996 to

7.1.2000. Judgment debtors are hereby

directed to pay the same to the said

decree holders nos. 1 and 2 respectively."

10. Aggrieved by that order of the District Judge,

South Goa passed in the execution proceeding, the

respondents preferred a revision before the High

Court of Bombay at Goa.

11. Before the High Court it was contended by counsel

for the respondents that a bare perusal of

Sections 28 and 34 of the Act read with Order XXI

Rule I of the CPC would clearly indicate that the

State was not liable to pay any additional

interest except for the period from 1.4.1996 to

8.4.1996. The respondents further contended that

7

as far as the State was concerned, they had

actually tendered and paid the money to the

original claimants by drawing four cheques for

the amount mentioned therein with regard to the

four original claimants by cheques dated

29.3.1996 and also by communicating a letter

dated 1.4.1996 that the claimants ought to come

and collect their respective amounts payable

under the cheques on 8.4.1996; and once the State

prepared the cheques and kept them ready to be

collected, there was no duty cast on the State to

deposit the same in court unless and until the

State was informed that Ana Conceicao Antonieta

Santimano could not claim the amount and she had

bequeathed her amount to Herbert. The respondents

contended that an ex facie reading of Sections 28

and 34 of the Act and Order XXI Rule 1 of CPC

make it clear that the claimants could not insist

on the State depositing the amount only in court

and it cannot be contended that State was not

entitled to pay the said amount directly to the

8

claimants.

12. On the other hand, the counsel for the appellants

urged that Sections 28 and 34 of the Act make it

abundantly clear that the interest could be paid

only in Court, otherwise liability on the State

to pay interest would continue. As per Section 53

of the Act, the provisions of Order XXI Rule 1 of

CPC could not come in the way of the contention

of the appellants in as much as the said

provision was inconsistent with the provisions of

the Act and thus, the bar with regard to grant of

interest as provided under Order XXI Rule 1 of

CPC would not apply in the instant case. Learned

counsel for the appellants relied on, inter alia,

on the decision of this Court in the case of Prem

Nath Kapur (supra).

13. The High Court opined that acceptance of such an

argument may lead to absurdity in the sense that

the claimant could very well collect the excess

9

amount directly from the State and after a few

years may turn around and say that the amount was

not deposited in the Reference Court and claim

interest thereon. Further, with respect to the

contention of the appellants regarding

prohibition in Section 53 of the Act in invoking

Order XXI Rule 1 of CPC, it was rejected on the

ground that there was no inconsistency between

the proviso to Order XXI Rule 1 of CPC and

Sections 28 and 34 of the Act. Accordingly, the

High Court held that the amount was duly paid to

the appellants but they did not come to collect

the same. Therefore, in the aforesaid facts and

circumstances, the judgment of the District Court

dated 18.8.2000 could not be sustained and was

set aside by way of impugned judgment of the High

Court dated 16.8.2002.

14. Aggrieved by the said order of the High Court,

the appellants filed the present appeal.

10 15. During the pendency of the appeal, the wife of

Ivo Agnelo Santimano Fernandes by the name of

Celina de Conceicao Socorro Josefina Barbosa

Fernandes alias Celina Barbosa Fernandes

(appellant 5) passed away on 6.11.2003. An

application was filed for substitution for

bringing on record the legal representatives of

appellant 5 and the same was allowed by an order

dated 12.7.2004. Accordingly, the legal heirs of

appellant 5 were brought on record.

16.We have heard the parties and perused the

materials on record as well as the relevant

provisions of the Act.

17. In the case of Prem Nath Kapur (supra), a three-

Judge Bench of this Court considered the question

as to when the liability of the State to pay

interest ceases. The relevant portion of the

judgment reads as follows:

11 "13. Thus we hold that the liability to

pay interest on the amount of compensation

determined under section 23(1) continues

to subsist until it is paid to the owner

or interested person or deposited into

court under section 34 read with section

31. Equally, the liability to pay interest

on the excess amount of compensation

determined by the Civil Court under

section 26 over and above the compensation

determined by the Collector/Land

Acquisition Officer under section 11

subsists until it is deposited into court.

Proprio vigore in case of further

enhancement of the compensation on appeal

under section 54 to the extent of the said

enhanced excess amount or part thereof,

the liability subsists until it is

deposited into court. The liability to pay

interest ceases on the date on which the

deposit into court is made with the amount

of compensation so deposited."

(Emphasis added)

18. This Court also held that by operation of Section

53 of the Act, Order XXI Rule 1 of CPC, being

inconsistent with the express provisions

contained in Sections 34 and 28 of the Act, stood

excluded.

19. In the light of the abovesaid principle, we are

of the view that the contentions of the

12

respondents cannot be accepted. The Act requires

that the interest be deposited in court, and the

same has been upheld in the case of Prem Nath

Kapur (supra). In the present case, the

respondents did not deposit the amount in court,

but in their Revenue account and utilized the

same. Even if the respondent State does pay the

compensation to the claimants directly, and the

same is not collected, the respondent State

cannot then keep the said money with itself and

utilize it. In such cases, after a reasonable

period, if the claimants do not come forward to

collect compensation, then it should be deposited

in court by the State. Allowing the State to keep

the compensation with itself and utilizing it

cannot possibly be permitted being contrary to

the provisions of the Act and the law laid down

in Prem Nath Kapur (supra). Hence, the judgment

of the High Court is clearly erroneous and

deserves to be set side.

13 20. Accordingly, the appeal is allowed and interest

will be payable to the parties as per the order

of the District Judge dated 18.8.2000. Such

payment be released within a period of six weeks

from date.

21.No order as to costs.

.......................J.

(G.S. SINGHVI)

.......................J.

(ASOK KUMAR GANGULY)

New Delhi

February 23, 2011

14