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Judgment
G.F. Couto, J.—This revision application is directed against order dated 21st November, 1988 whereby the learned Distt. Judge,South Goa, substantially dismissed the objections raised by the petitioner in the execution proceedings instituted by the respondents.
Proceedings for acquisition of land had been initiated by the petitioner, inter alia, in respect of a plant of land with an area of 28,351 sq. mts. belonging to the respondents. The Land Acquisition Officer made his award and the respondents being dissatisfied with the compensation awarded to them, filed an application u/s 18 of the Land Acquisition Act to the District Court, Margao. By his award, dated 1st September, 1982, the learned District Judge, Margao, enhanced the compensation to Rs. 9.50 per sq. mt. as well as gave a compensation of Rs. 2 lakhs towards severance of the land. He also awarded 15% on account of solatium. After the award was made, the petitioner did not challenge it and, on the contrary, deposited in the District Court on 20th December, 1983, a sum of Rs. 17,34,198.95-p. This amount was covering not only the principal amount of the compensation, but also the interest thereon.
It appears that somewhere in the year 1985, respondents moved a review application of the said award, dated 1st September, 1982 and the learned District Judge allowed the said review application by his orders dated 1st November, 1985 and therefore, granted to the respondents the benefits under the Land Acquisition Act, 1984 as regards solatium and interest. Later on the respondents moved on application u/s 152, C.P.C. claiming that the benefit of the Section 23(1-A) had not been given to them. By his order dated 31st March, 1986, the learned District Judge allowed the said application.
It appears that the award as awarded by Orders, dated 1st November, 1985 and 31st March 1986 was not satisfied by the petitioner and therefore, execution proceedings were instituted before the District Judge, Margao. During the pendency of the said execution proceedings, a dispute arose in respect of the quantum of the amount due by the petitioner judgment-debtor and the decree-holders/respondents herein submitted under the directions of the executing court, their calculations showing that the balance due was of Rs. 27,61,645.79-p. This amount was challenged by the judgment-debtor on several grounds, namely that the severing charges of Rs. 2 lakhs were not covered under the award dated 31st March, 1986, and therefore, could not have been included in the calculations. The petitioner also challenged the calculations made as regards the interest. The learned Executing Judge held the view that the first objection as regards the severing charges was not justified. He also held that only one of the objections as regards the date from which the interest was due was justified. Therefore, with the aforesaid small modification, he ordered the payment of Rs. 12,34,422.36-p. to the respondents herein.
The petitioner being aggrieved by this order dated 21st November, 1988, approached this Court with the present revision application. The learned Advocate General contended on behalf of the petitioner that a material irregularity and illegality has been committed by the learned District Judge when he ordered the adjustment of the amounts already paid first against the interest and then against the principal amount of the compensation. He urged that the doctrine that when part payments are made, the said part payments are to be adjusted first against the interest and only when the interest is fully paid, against the principal, has no application at all in the facts and circumstances of this case, where the District Judge has passed his award on 1st September, 1982, and the petitioner had not challenged the said award and therefore, fully paid the amount of the compensation and the interest due as per the same award. The further amount that the petitioner was found liable to pay was a result of the amendment of the Land Acquisition Act in 1984. As a result of this amendment, a review of the award dated 1st September, 1982, was sought by the respondents and allowed by order dated 1st November, 1985. The solatium was increased to 30% and interest as per the amended Act was given. Further, the benefit under the newly introduced Section 23(1-A) was also given to the respondents by Order dated 31st March, 1986. No doubt, the benefits of the amended Act are to be given to the respondents from the date on which possession of the acquired land was taken by the petitioner.
However, although the interest as per the amended Act is to be paid from the date of possession of the land was taken by the petitioner, the fact remains that the question of making an adjustment of the amount paid against the interest does not at all arise. In fact, when the review application and the application u/s 152, C.P.C. were allowed, whatever amount had been found due by the petitioner to the respondents had already been paid in the District Court, namely on 20th December, 1983. Nothing was due and the new liability of the petitioner arose only as a result of the amendment to the Land Acquisition Act made in the year 1984. Had this amendment taken place before the passing of the award dated 1st September, 1982, and the benefits thereof been given to the respondents, naturally, and in all probability, the petitioner would have satisfied the decree fully. The learned Advocate General further submitted that the doctrine that the interest should be paid first and then, the principal is merely a normal rule which may not apply in the facts and circumstances of a particular case. In this regard the learned Advocate General invited my attention to the law laid down by the Supreme Court in '' Meghraj and Others Vs. Mst. Bayabai and Others, .
Mr. Alvares, the learned Counsel appearing for the respondents, joined issue and submitted that the orders dated 1st November, 1985 and 31st March 1986, have a retrospective effect and therefore, the decree dated 1st September, 1982, had to be read as amended by the aforesaid orders. Therefore, the compensation the respondents were entitled to under the said award was the compensation with the benefits accrued to them by virtue of the Amendment Act. The petitioner has paid the amount awarded initially by the District Court when the amendment to the Land Acquisition Act had not been passed. They also paid interest on that amount, but obviously, since by virtue of the amendment the principal amount of the compensation was enhanced, the amount paid has to be adjusted first, as rightly held by the District Judge, against the interest and only after that against the principal amount of the compensation. This being so, according to the learned Counsel, no case was made out for interference.
It flows crystal clear from the above submissions made by the learned Advocate General and counsel for the respondents, that the parties are not at issue as regards some relevant facts. They indeed agree that when the learned District Judge passed his award dated 1st September, 1982, all the benefits available to the respondents under the law prevailling at that time were given to them. They agree that the said award became final since neither of the parties challenged it in higher courts and further that the petitioner deposited on 20th December, 1983, a sum of Rs. 17,34,194.95-p. in full and complete satisfaction of the aforesaid award and decree. It is also common ground that after the amendment of the Land Acquisition Act, an application for review was moved and later on, an application u/s 152, C.P.C. This application was allowed by the learned District Judge by his Orders dated 1st November, 1985, and 31st March, 1986, and consequently, benefits of the amended Act were given to the petitioner. Now, the petitioner does not dispute that the said benefits are to be given to the respondents from the date the possession of the acquired land was taken by the petitioner. The dispute is only whether in the circumstances of this case where the whole amount of compensation and interest as awarded initially by the award dated 1st September, 1982, had been satisfied by the petitioner, the learned District Judge was correct in holding that the said amount paid ought to be adjusted against the enhanced amount of the compensation and interest resulting from the benefits under the amended Act. Both the parties placed reliance in support of their submissions on the decision of the Supreme Court in Meghraj v. Mst. Dayabai (supra). It will be therefore, advantageous to advert to the aforesaid authority of the Supreme Court, In that case, the counsel for the appellant has contended that in ''Venkatadri Appa Row v. Parthasarathi Appa Row 48 Ind App 150 : AIR 1972 PC 233 there was no specific appropriation by the debtor, whereas in the case before the Court there was a specific direction by the debtor. The Court dealing with the said contention observed that the normal rule is that in the case of a debt due with interest, any payment made by debtor is in the first instance to be applied towards the satisfaction of interest and thereafter to the principal. It was further observed that it was for the mortgagors to plead and prove an agreement that the amounts which were deposited in the Court by the mortgagors were accepted by the mortgagees subject to a condition imposed by the mortgagors. The Court observed that in that case there was no evidence which was supporting the contention raised by the counsel. It can therefore be seen that the doctrine that in cases of part payment, such part payment is to be adjusted first against the interest and thereafter against the principal, is merely a general rule that can be departed from in a given case. In the present case, such departure is imposed by the context of the circumstances, which clearly show that at no stage there existed a case of a part payment of a debt. As already mentioned, after the award was made by the District Judge on 1st September, 1982, the petitioner deposited within reasonable time in Court, the full amount of the compensation awarded to the respondents. The further liability arose out of the subsequent amendment of the statute. In no manner it can be said therefore, that the non-payment of the amounts which were found to be due to the respondents by Orders dated 1st November, 1985 and 31st March, 1986, was due to any fault of the petitioner. This being the case, manifestly the question of adjusting the payment done by the petitioner on 20th December, 1983, against the total of the compensation and interest due to the respondents after the amendment of the Act does not arise. The learned District Judge therefore, was wrong in holding differently in his impugned Order.
The calculation of the benefits under the amended Act is to be made from the date of possession of the acquired land was taken by the petitioner. Thereafter the amounts already paid are to be deducted and the balance arrived at is to be paid by the petitioner to the respondents. It is made clear that the amount deposited in the District Court on 20th December, 1983 is against the compensation including the severance.
The result is that this revision application is allowed and the impugned Order dated 21st November, 1988 is quashed inasmuch as the adjustment of the amounts paid against the interest had been ordered. There will be no costs in the circumstances of the case.