M/S Periyar & Pareekanni Rubbers Ltd. v. State of Kerala

Judgment

distinguished from a ratio decidendi is an observation

sec by the Court on a legal question suggested •in a case before it but not arising in such manner as to require a decision. Such a? obiter may not have a binding precedent as the observation was unnecessary for the decision pronounced, but even though an obiter may not have a binding effect as a precedent, but it cannot be denied that it is of considerable weight. ... "

.. , . . ' [Emphasis supplied]

The decision of this Courfi n the case of Deena v. Union of lndia¹⁴ is also p~rtaining to the· extension of ratio of a decision to cases involving identical situations, be it factual or legal, but the same should not be mechanically applied to the facts of a case, the relevant para 1.!5 reads thus:

' "15 .... It is permissible to extend the ratio of a decision to cases involving identical situations. factual and legal. but care must be taken to see that this is not done mechanically, that is. without a cl~e examination of the rationale of the decision which is cited as a precedent. Human mind, trained even in the strict discipline of law, is not averse to taking th~ easy course of relying on decisions which have become famous and applying their ratio to supposedly identical situations .... "

I (emphasis supplied)

The binding effect of judgment of this Court vis-a-vis State· and Central Government circulais is considered in the case of CCE v. Ratan Melting & Wire lridustries¹⁵ wherein it is held

, thatthe law laid down by this Court is the law of the land. The law so laid down is binding on all 'Courts/Tribunals and bodies and that the circulars issued @y the State or the Central Government cannot prevail over the la":' laid down by this Court.

30. From the facts of the present case and in the light of law laid down on the question of payment of interest on solatium

by the Constitution Bench in Sunder's case, it is amply clear that the said case is the binding precedent. As far as Gurpreet Singh's case is concerned, the question which arose for its consideration was only with regard to the rule of appropriation in execution of the Award passed under the provisions of the

Act. While answering the said question of law after refmring to the relevant provisions of the Act, at paragraph 54, it has incidental!y made some observation with regard to the payment of interest on solatium which is only an obiter but not the binding precedent as that question did not fall for

consideration before the Constitution Bench. Therefore, in yiew of the foregoing reasons, I hold that there is no need to advert to the other judgments upon which reliance was placed by the learned counsel for both the parties. For the reason that the binding precedent laid down by the Constitution Bench ofthis Court in Sunder's case on the question of payment of interest on the solatium to the claimimt/decree holder from the date of entitlement as provided under the provisions of the Act. ·Accordingly, I pass the following order:-

a) In view of the aforesaid reasons assigned by me with reference to Sundera1nd Gurpreet Singh cases (supra), I am of the view that the impugned common judgment and order with regard to awarding interest payable on solatium w.e.f. 19.09.2001 is vitiated in law. Accordingly, that portion of the impugned judgment and order is hereby set aside.

b) The civil appeals a•re aHowed. The respondent-State Government is directed to pay interest as provided under Sections 23(1A) and of the Act on the compensation ~~8 determined includi,ng 11olatium underSection 23(2) of the Act. The respondemt-state Government is further directed to compute the same with reference to the compensation awarded by the Hefereince Court from the date when the claimant decree holder is entitled strictly in accordance with the abovesaid provisions of the Act including the . solatium and pay to the appellant within 8 weeks from the date of receipt of copy of this judgment. No order as . to costs.

ADARSH KUMAR GOEL, J. 1. I have perused the proposed judgment prepared by my learned brother V. Gopala Gowda, J. I am in respectful disagreement with the same. Th~ facts have been broadly mentioned in the judgment of Gopa[a Gowda, J. and need not be repeated.

2. The award of the Reference Court is dated 19¹ November, 1992 which did not expressly award interest on solatium. In the impugned order, the High Court restricted the interest on solatium to the period post 19th September, 2001, following the Constitution Bench judgment of this Court in Gurpreet Singh vs. Union of lndia¹ directing as follows :

"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 [(2001) 7 sec 211], the awardeeldecree-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

sec 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 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 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."

2. Learned counsel for the appellants relied upon Land

Acquisition Officer and Asstt. Commnr. Vs. Shivappa

Ma/Jappa Jigalur laying down as follows :

"13. Coming now to the stipulatio_n that any interest on solatium can only be granted for the period subsequent to 19-9-2001, the date of the decision in Sunder, it is evident that this again, is a limitation on the power of the execution court. The direction is actually referable to those cases in which the award of the Reference Court or the appellate court being silent, it is left open to the execution court to give direction for the deposit of

interest on solatium. In such cases, the Reference Court can ask for interest only for the period subsequent to 19-9-2001. The direction in no way circumscribes the power of the court dealing with the main proceeding relating to enhancement of the compensation.

14. The matter can be looked at from another angle. The appeal being the continuation of the original proceeding, in the facts of the cases in this sub-group, there can be no question ofa ccrual ofi nterest only after the date of the decision in Sunder. At this stage, it may be recalled that the civil court had awarded solatium @ 30% and interest @ 9% for the first year and @ 15% from second year onwards till the date of realisation. The States appeal against the judgment of the civil court was dismissed. Thus, the direction for payment of ' solatium with interest at the rates indicated had become final. The High Court enhanced the rate of compensation. This would inevitably lead to an increase in the amount of solatium and consequently in the amount of interest on the unpaid amount of solatium. Thus, looked at from any point of view, the question of payment of interest subsequent to 19-9-2001 does not arise." ·

3. On the other hand, learned counsel for the State submitted that the judgment iri Shivappa (supra) does not apply to the present case as the award dated 191h November, 1992 has attained finality. She also relied upon Chimanlal Kuberdas Modi vs. Gujarat Industrial Development Corpn.³ laying down as follows :

"15. It is no doubt true that the execution court cannot examine the reasons so as to go behind the decree but if in the award passed, the Reference Court makes

a specific reference to payment of interest but without ³ c²⁰¹ oi¹⁰ sec eas

any such reference to the payment of interest on solatium and merely payment of interest on compensation is granted, then it would be open to the executing court to apply the ratio of Sunder and declare that the compensation awarded includes solatium, and consequently, interest on the amount could be directed ,.

to be deposited irJ execution. That being the legal position as prevailing today, we cannot ignore the observations made in para 54 of the aforesaid judgment in Gurpreet Singh and we order accordingly that compensation awarded includes solatium and therefore interest on the said amount shall be paid by the respondent in the pending execution."

To the same effect, she also relied upon Nadirsha

Shapurji Patel vs. Collector & LAO' and Chhanga Singh vs. Union oflndia⁵

•

4. · So long as judgments relied upon by learned counsel for the State stand, the appellant cannot succeed. Any

contrary view can be taken only by a larger Bench. It will thus be appropriate that the matter is placed before a Bench of 3- Judges.

COMMON ORDER

In view of divergence of opinion in terms of separate judgments pronounced by us in these appeals today, the Registry is directed to place the papers before Hon'ble the Chief Justice of India for appeals being assigned to an appropriate Bench.

Matter referred to larger bench.

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