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Sc: Govt to pay interest for 43 years to farmers of Ghaziabad

The Supreme Court has held that the Union Government is liable to pay interest on the compensation awarded for the land acquired under the Defence of India Act, 1962.

A Bench comprising Justice R V Raveendran and Lokeshwar Singh Panta has directed the Centre to pay interest of over 43 years at the rate of 6% per annum to the farmers of Mola village in Ghaziabad District of UP.

The land of the farmers was acquired in 1965 and the rate at that time was between Rs 2400 to Rs 3625 per Bigha.

The arbitrators vide award dated March 16, 1979 awarded the compensation at the rate Rs 2.60 per sq yard with 6% interest from the date of acquisition till date of deposit of compensation.

The Allahabad High Court in its order dated April 1, 1991 increased the compensation to Rs 3.60 per sq yard along with uniform interest of 6% per annum.

The Union Government challenged the part of the High Court order related to award of interest on the compensation amount.

The stand of the Centre was that no interest is liable to be paid on the land acquired under the Defence of India Act.

While dismissing a number of appeals filed by the Union Government the apex court noted that in this case the acquisition is of the year 1965. Though more than four decades have elapsed, the land owners are yet to get the compensation in entirety.

It is also relevant to note that when the arbitrator awarded the interest it was not challenged by the appellant.

It accepted the award of interest only when the High Court increased the amount of compensation in the appeal filed by the land owners, the appellant chose to challenge, not the increase in compensation but the award of interest. Be that as it may.

‘For the reasons aforesaid we uphold the award of interest as 6% per annum on the compensation amount. The appeals are therefore dismissed,’ the court said.


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