2008 INSC 0124
                                    SUPREME COURT OF INDIA

                                            Ram Narayan Gupta

                                                      Vs.

                                                 State of M.P

                                            C.A.No.520 of 2008

                                    (Ashok Bhan and Aftab Alam,JJ.)

                                                 18.01.2008

                                                   ORDER

[Arising out of S.L.P.(C)No.18158 of 2005]

1. Leave granted.

2. This appeal has been filed by the claimant-landholder. Land Acquisition Officer (LAO)
awarded compensation at the rate of Rs.3000/- per bigha. In addition, solatium @ 10% and
interest @ 6% p.a. was also awarded by the LAO. On reference, the Reference Court
determined the potential value of the land at the rate of Rs.1/- per sq.ft. and accordingly
determined the value of the land at Rs.85,500/- . Out of the said amount, 40% of the amount,
viz., Rs.34200/- was deducted towards development charges. Thus, an amount of Rs.51,300/-
came to be awarded as compensation. However, the Reference Court, instead of granting
solatium at the rate of 30% and statutory interest, maintained the solatium and interest
granted by the LAO. Appellant-claimant filed an appeal before the High Court in which he
did not challenge the amount of compensation awarded. Only challenge was for enhancement
of solatium and C.A.No.520/08 .... (Contd.) interest. Appellant claimed solatium at the rate of
30% and interest at the rate of 15% p.a. The High Court partly allowed the appeal and
increased the solatium @ 30% but maintained the interest @ 6% p.a. Claimant, being
aggrieved, has filed this appeal for enhancement of interest. Counsel for the appellant
submitted that the courts have erred in granting interest at the rate of 6% p.a. There is no
reason for not awarding interest at the rate provided under the Statute. That there was no
discretion with the court to award interest at a rate lower than what was provided under the
Statute.

3. We agree with the contention raised by the counsel for the appellant and accordingly,
modify the judgment of the High Court and direct that the appellant be paid statutory interest
at the rate of 9% p.a. for the first year and thereafter at the rate of 15% p.a. The appeal is
allowed accordingly.

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