Land Acquisition Act | Interest On Solatium Payable Only From September 19, 2001, Even If Appellate Court Order Passed Later: Punjab & Haryana High Court

"The Apex Court in Gurpreet Singh (supra) imposed cut-off date i.e. 19.09.2001. The said date is applicable to every case where landowner is entitled to interest on additional compensation and solatium." Punjab and Haryana High Court, in a judgment, held that interest on solatium under the Land Acquisition Act, 1894, is payable only from the date of the Supreme Court’s judgment in Sunder v. Union of India—being September 19, 2001—irrespective of whether the appellate court’s order enhancing compensation was passed after that date.

A bench of Justice Jagmohan Bansal observed that allowing interest for the period prior to this date simply because an appeal was adjudicated later would lead to discrimination, as the cut-off date was intended to crystallize and confine the period of liability.

The respondent landowners’ property was acquired under the 1894 Act, with the Reference Court enhancing compensation in 2000. Subsequently, in 2011, the High Court allowed the landowners' appeals, further enhancing compensation and granting statutory benefits under Sections 23(1A), 23(2), and 28 of the 1894 Act. In the ensuing execution proceedings, the Executing Court held that the landowners were entitled to interest on solatium from the date of the original award in 1994. The Haryana State Industrial and Infrastructure Development Corporation Limited (HSIIDC) challenged this, contending that interest on solatium is legally restricted to the period starting from September 19, 2001.

The core issue before the court was whether, in the absence of a specific direction in an appellate order granting interest on solatium, the Executing Court can award such interest for the period prior to September 19, 2001. The court further examined whether the "sunrise clause" established in Gurpreet Singh v. Union of India regarding the cut-off date for interest on solatium applies universally, or if it is restricted to cases where execution proceedings were pending on that specific date.

The court began by reiterating the settled position that solatium forms an integral part of compensation. Following the decision in Sunder v. Union of India, it is established that the "awarded amount" under Section 34 of the 1894 Act includes solatium, thereby triggering a liability for interest. However, the court emphasized that while interest on solatium is an automatic consequence, the date from which this interest commences is strictly governed by the clarification provided in Gurpreet Singh.

Clarifying the Applicability of Gurpreet Singh

The bench observed that the Supreme Court in Gurpreet Singh clearly intended to avoid the re-opening of closed cases while providing a uniform threshold for pending executions. The court noted that where an appellate order does not specifically adjudicate the question of interest on solatium, the Executing Court is empowered to apply the ratio of Sunder. However, this power does not override the temporal limitation set by the Apex Court.

Court Rules on Temporal Limitation

"The Apex Court in Gurpreet Singh (supra) has clarified that interest on solatium can be claimed from the date of judgment in Sunder (supra) and not for any prior period," the court observed. It rejected the landowners' argument that because their appeal was decided after 2001, they should be entitled to interest from the date of the award. The court reasoned that granting interest for the period prior to 2001 would create an arbitrary distinction between landowners based solely on the date their appeals were adjudicated.

"It would amount to discrimination if interest on solatium is granted for the period prior to 19.09.2001 on the ground that appeal was adjudicated after aforesaid date and denied on the ground that appeal was adjudicated prior to 19.09.2001."

Addressing Precedential Arguments

The respondents had relied on Shivappa Mallappa Jigalur and Bhanushankar Oghadbhai Mehta to argue for interest from the date of the award. The court distinguished these, noting that in those cases, the specific directions given by the courts in main proceedings were distinct. In the present case, the High Court’s 2011 appellate order had granted statutory benefits generally but had not specifically mandated interest on solatium for the pre-2001 period. Consequently, the Executing Court lacked the authority to expand the scope of the appellate decree beyond the established cut-off date of September 19, 2001.

Finding merit in the petitioner's revision, the High Court set aside the impugned orders of the Executing Court. The bench concluded that while the landowners are entitled to interest on solatium as per the ratio of Sunder, the liability of the HSIIDC is strictly limited to the period commencing from September 19, 2001, effectively barring claims for the period prior to the Supreme Court's pronouncement.

Date of Decision: 01 September 2026