{"id":203413,"date":"1998-08-13T00:00:00","date_gmt":"1998-08-12T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/life-insurance-corporation-of-vs-union-of-india-others-on-13-august-1998"},"modified":"2019-04-03T14:37:14","modified_gmt":"2019-04-03T09:07:14","slug":"life-insurance-corporation-of-vs-union-of-india-others-on-13-august-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/life-insurance-corporation-of-vs-union-of-india-others-on-13-august-1998","title":{"rendered":"Life Insurance Corporation Of … vs Union Of India & Others on 13 August, 1998"},"content":{"rendered":"
Delhi High Court<\/div>\n
Life Insurance Corporation Of … vs Union Of India & Others on 13 August, 1998<\/div>\n
Equivalent citations: 1998 VIIAD Delhi 645, 75 (1998) DLT 231, 1998 (47) DRJ 659<\/div>\n
Author: . M Sharma<\/div>\n
Bench: D M Sharma<\/div>\n<\/p>\n
<\/pre>\n
JUDGMENT<\/p>\n
 Dr. M.K. Sharma, J.<\/p>\n
 1.     The  present suit was instituted by the Life Insurance Corporation  of India,  plaintiff  against the defendants for recovery of  Rs.  2,34,555\/-, detailed  calculations and heads of which have been given in paragraph  No. 22 of the plaint. The aforesaid claim of the plaintiff against the  defendant as set out in the plaint is set out below :\n<\/p>\n
      (a)  Interest u\/Sec. 34 of L.A. Act,
\n     1894 @ 6% per annum on the
\n     awarded compensation amount of
\n     Rs.1,22,130\/- from 14.3.68 (the
\n     date of dispossession from the
\n     acquired land) upto 26.4.1982
\n     (the date on which the payment
\n     was made to the plaintiff\/
\n     Corporation) viz. for 14 years
\n     and 44 days:                            1,03,472.55
\n     Less such interest u\/Sec. 34 of
\n     the L.A. Act already awarded by
\n     the L.A.C. for the period
\n     w.e.f. 14.3.68 to 12.1.1969:               6,123.62
\n                                               97,348.93\n<\/p><\/blockquote>\n
     (b)  Interest u\/Sec. 4(3) of the Land
\n     Acquisition (Amendment & Validation)
\n     Act, 1967 @ 6% per annum on
\n     the assessed market value of
\n     Rs.1,06,200\/- from 13.11.1962
\n     upto 26.4.1982 (the date when
\n     the compensation was offered to
\n     the plaintiff\/Corporation) viz.\n<\/p><\/blockquote>\n
     for 19 and 155 days:                    1,23,773.92\n     Less such interest u\/Sec. 4(3) of \n     the Amendment Act, 1967 awarded by \n     the LAC for the period\n     13.11.1962 to 12.1.1969:                  39,296.90\n                                               94,477.02\n                                             1,81,825.95\n     (c)  Interest by way of damages @ 18% per \n     annum on 1,81,825.95 w.e.f. 26.4.82 \n     till 15.12.1983:                          52,729.05\n                                             2,34,555.00 \n \n\n<\/pre>\n
 2.   The  lands  of Sunlight of India Insurance Company  Ltd.  situated  in Village Jhilmil Tahirpur, Delhi in Khasra Nos.1181\/1118\/ 10 etc.  alongwith their  parts were acquired by the defendants under Award No. 2193 which  is Ex.  PW1\/7  dated  13th January,1969. By virtue of Section 7  of  the  Life Insurance Act,1956 all rights, assets and liabilities of all the  Insurance Companies  including that of the Sunlight of India Insurance  Company  Ltd. stood  transferred and vested in the Life Insurance Corporation  of  India, the plaintiff w.e.f. 1st September, 1956. In respect of land measuring  280 bighas  and 7 biswas pertaining to the Sunlight of India Insurance  Company Ltd.  notification  under Section 4 was issued on  13th  November,1959.  In respect  of  the  aforesaid land a notification under Section  6  was  also issued on 7th December,1966. Possession of the aforesaid land was taken  by the Collector on 14th March,1968 and an award being Award No. 2193 was made and  announced  on 13th January,1969. It is stated in the plaint  that  the amount of compensation in terms of the aforesaid award, which is  exhibited as Ex. PW1\/7 was neither tendered for payment to the plaintiff nor deposited in Court by the defendants as required and contemplated under Section 31 of  the  Land Acquisition Act. The plaintiff, however,  filed  a  reference under  Section 18 of the Land Acquisition Act which is registered  as  Land Acquisition  Case No. 643\/69 and titled as LIC Vs. Union of India;  wherein the  reference  court  enhanced the market value from Rs.  4,500\/-  to  Rs. 8,000\/-  per  bigha. Against the aforesaid award passed  by  the  reference court  both the plaintiff as well as the defendants filed appeals  in  this Court which were registered as RFA 7\/81 by Union of India and RFA 476\/79 by the plaintiff.\n<\/p><\/blockquote>\n
 3.   The appeal filed by the plaintiff was allowed and the market value  of the land was further enhanced to Rs.10,000\/- per bigha; whereas the  appeal filed  by the Union of India, one of the defendants, was dismissed on  12th March, 1981. Compensation of the acquired land was paid to the plaintiff on 24th April, 1982.\n<\/p>\n
 4.   In  the light of the aforesaid facts the present suit has been  instituted  by  the plaintiff against the defendants claiming  only  the  amount towards interest as detailed above.\n<\/p>\n
 5.   The  defendants filed their written statement and, therefore,  on  the pleadings of the parties the following issues were framed on 18th  October, 1985:\n<\/p>\n
      1.          Whether the suit has been instituted and the plaint has  been
\n     signed and                         verified by a duly authorised person?                                           OPP\n<\/p><\/blockquote>\n
     2.         Whether the notice dated July 11,1983 under Section 80 of  the
\n     Code of Civil              Procedure was not served on the defendants prior to
\n     the institution of the suit?               If so, to what effect?                                                          OPD\n<\/p><\/blockquote>\n
     3.          Whether the plaintiff has no locus standi to file  the  suit?\n<\/p><\/blockquote>\n
                        OPD\n<\/p><\/blockquote>\n
     4.         Whether the suit for mere interest is not maintainable?                         OPP\n<\/p><\/blockquote>\n
     5.          Whether the plaintiff is entitled to the interest claimed  in
\n     the suit because of the            delayed payment of the amount of  compen-\n<\/p><\/blockquote>\n
     sation awarded by the Land                         Acquisition Collector?                                                          OPP\n     6.         To what amount is the plaintiff entitled?                                               OPP \n     7. Relief?\n \n\n<\/pre>\n
 6.   Evidence  was allowed to be led by filing affidavits, in pursuance  of which the plaintiff has filed its affidavit by way of evidence but none was filed  on  behalf of the defendants although he was allowed  to  argue  the matter.  On subsequent dates none appeared on behalf of the defendants  and on  4th March, 1994 one last opportunity was granted to the  defendants  to argue the matter subject to payment of Rs.1,000\/-. The said amount of  cost was also not paid nor anybody appeared on behalf of the defendants when the matter was listed for arguments and accordingly the Counsel for the  plaintiff was heard and judgment and order was reserved.\n<\/p><\/blockquote>\n
      Issue No. 1:\n<\/p><\/blockquote>\n
      The  authority of the person instituting the present suit and to  sign and  verify  the  pleadings has been indicated and stated on  oath  in  the evidence  adduced  by the plaintiff. Regulation 41 of  the  Life  Insurance Corporation Regulation,1959 made in pursuance of Sub-section (2) of Section 49  of the Life Insurance Act XXXI of 1956 and published in the Gazette  of India  dated  13th February, 1960 empowers the five Zonal Managers  of  the plaintiff  Corporation at its Zonal Offices including Delhi, to  institute, conduct, defend and represent the Corporation in all suits in all Courts of their  respective zones. By virtue of the aforesaid power, the  said  Zonal Managers  were also empowered to delegate any of the authorities  aforesaid to  any of the respective Zonal Offices or any Divisional Office or  Branch Office of the Corporation in their respective zones.\n<\/p><\/blockquote>\n
 7.   Sh.  R. Narayanan was the Zonal Manager of Zonal Office  of  plaintiff Corporation  at  Delhi  from 31st March, 1979 till filing of  the  suit  in December,  1983  and the said Sh. R. Narayanan in exercise  of  the  powers conferred  on him under the aforesaid Regulation No. 41 delegated  the  authority to Sh. G.S. Srivastava, Deputy Zonal Manager, Life Insurance Corporation  of  India, Zonal Office, New Delhi to institute suits,  to  appoint advocates, sign Vakalatnamas and pleadings for and on behalf of the  plaintiff-Corporation.\n<\/p>\n
 8.   In  the light of the aforesaid evidence adduced by the  plaintiff  and there being no denial of the aforesaid fact, the present issue is  answered in favour of the plaintiff and against the defendants holding that the suit has  been instituted and the plaint has been signed and verified by a  duly authorised person.\n<\/p>\n
      Issue No. 2:\n<\/p>\n
 9.   It is also stated in the evidence adduced by Sh. R.K. Sharma, Administrative  Officer  (Legal)  of the plaintiff-Corporation  that  a  statutory notice under Section 80 CPC was got served upon the defendants and a carbon
\ncopy  of the said notice is also placed on record and exhibited  as  PW1\/1. Thus,  this issue about the service of notice under Section 80 CPC  on  the defendants also stands proved there being no rebuttal evidence.\n<\/p>\n
      Issue No. 3:\n<\/p>\n
 10.  This  issue relates to the locus standi of the plaintiff to  file  the suit.  By  virtue of Section 7 of the Life insurance Corporation  Act,  all rights,  assets  and liabilities of all the Insurance  Companies  including Sunlight  of India Insurance Company Ltd. stood transferred and  vested  in the plaintiff w.e.f. 1st September, 1996. The onus of proving the aforesaid issue was on the defendants. No evidence has been led by the defendants  to prove  and  establish that the plaintiff has no locus standi  to  file  the suit.  On the other hand, in view of the aforesaid provisions of  the  Life Insurance Corporation Act read with the evidence produced in the suit, I am satisfied that the plaintiff has locus standi to file the present suit and, therefore,  this  issue  is also answered in favour of  the  plaintiff  and against the defendants.\n<\/p>\n
      Issue No. 4:\n<\/p>\n
 11.  Onus  of proving this issue was also on the defendants. No  ground  or reason  is  shown by the defendants as to why the present  suit  filed  for recovery of interest is not maintainable. In this connection, reference may be  made  to the provisions of Section 18 of the Land  Acquisition  Act.  A reading of the aforesaid provisions would make it amply clear that the said provisions do not provide for any remedy for enforceability of the award of the Collector. It only authorises a party to claim for a reference to  have higher compensation or to have the market value fixed as per Section 23  of the Act. Therefore, the suit of the present nature would definitely lie and is maintainable in respect of a claim for interest not paid by the  Collector. The present suit has been filed for availing benefits as provided  for under  Section  34 of the Land Acquisition Act. The said  section  provides that when the Collector does not deposit or tender the amount before taking possession  of the land, then he has to pay interest on the amount  awarded by  him.  Therefore, non-payment and\/or refusal of the  Collector  to  make payment towards interest on any account including that of delayed  payment, gives  rise to cause of action and on such cause of action a suit is  maintainable. In coming to the aforesaid decision, I am fortified by a decision of  this  Court in LIC Vs. Union of India and Others;  being  S.No.  574\/82 disposed of on 20th December, 1991.\n<\/p>\n
      This issue is also, therefore, answered in favour of the plaintiff and against the defendants.\n<\/p>\n
      Issue No. 5:\n<\/p>\n
 12.  The  plaintiff  in  the present suit has claimed  interest,  as  shown above,  mainly  on three heads: (i) interest under Section 34 of  the  Land Acquisition Act @ 6% p.a. on the awarded compensation amount; (ii)  payment of  interest under Section 4 (3) of the Land Acquisition Act; and  interest
\nby way of damages.\n<\/p>\n
 13.  In the light of the pleadings of the parties and evidence available on record, I proceed to deal with this issue and give my findings thereon.\n<\/p>\n
 14.  In order to appreciate the claim of the plaintiff, it would be  necessary to extract the provisions of Section 34 of the Land Acquisition Act:\n<\/p>\n
      “Payment  of Interest. – When the amount of such compensation  is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest  thereon at  the rate of (nine per centum) per annum from the time  of  so taking possession until it shall have been so paid or deposited:\n<\/p>\n
      Provided  that  if such compensation or any part thereof  is  not paid  or deposited within a period of one year from the  date  on which  possession is taken, interest at the rate of  fifteen  per centum per annum shall be payable from the date of expiry of  the said  period  of one year on the amount of compensation  or  part thereof  which has not been paid or deposited before the date  of such expiry.”\n<\/p>\n
 15.  Section 31 of the Act provides that if the award is made, the  Collector  shall tender payment of the compensation awarded by him to the  interested person and Sub-section (2) of Section 31 provides that if the  amount is  not received by the interested party, the Collector shall  deposit  the same  in the Court. Thus the statute imposes a responsibility and  duty  on the  Collector to make payment of the compensation awarded by him in  terms of the award to the interested person.\n<\/p>\n
 16.  It has been stated by Shri R.K. Sharma, who has filed affidavit by way of evidence in the instant case on behalf of the plaintiff\/Corporation that after  the announcement of award on 13th January, 1969, the amount of  compensation  in  terms of the award was neither tendered for payment  to  the plaintiff  nor deposited in Court by the Collector under the provisions  of Section  31(2) of the Land Acquisition Act, in spite of several  approaches made by or on behalf of the plaintiff. It was categorically stated that the plaintiff  did not inform as to when the payment of award of the  compensation amount is going to be made to it. It is also stated that part  payment of the awarded compensation amount was made to the plaintiff by a Collector on 26th April, 1982. Thus, it is dear from the aforesaid evidence on record that  the defendants failed to comply with the aforesaid  statutory  provisions as laid down under Section 31(1) and (2) of the Act.\n<\/p>\n
 17.  In the case of LIC Vs. Union of India (supra) this Court held that the word  ‘tender’ appearing in Section 31 of the Act expresses not merely  the readiness and ability to pay or perform at the time and place but also  the actual  production  of the things to be paid or delivered either.  In  that case, it was further held that if the Collector fails to tender the  amount of compensation awarded to the plaintiff on or before taking possession  of the  land or if he fails to deposit the same in the Court after  the  award was made then, there is clear violation of the provisions of Section 31  of the Act.\n<\/p>\n
 18.  In view of failure on the part of the defendants to lead any  evidence to show that the requirements were followed there appears to be a violation of the provisions of Section 31 of the Act in the present case also.\n<\/p>\n
 19.  In  the present case the plaintiff claims interest on account  of  delayed  payments  from 14th March,1968, the date of dispossession  from  the acquired  land upto 26th April, 1982. The award was made and  published  on 13th January,1969 and possession of the land was taken by the Collector  on 14th  March, 1968. Thus, it is established that possession of the  land  in this  case was taken by the Collector before publication of the  award.  No evidence has been adduced by the defendants nor there is any other evidence to  show  that  the Collector tendered the amount of  compensation  to  the plaintiff  or  deposited the same with the Court, till  26th  April,  1982. Therefore, in my considered opinion, there is a violation of the  statutory revisions  on the part of the defendants in not tendering the  compensation amount  and thus the plaintiff shall be entitled to payment of interest  in terms of the provisions of Section 34 of the Land Acquisition Act.\n<\/p>\n
 20.  In view of my aforesaid findings, this issue is also decided in favour of the plaintiff and against the defendants.\n<\/p>\n
      Issue No. 6:\n<\/p>\n
 21.  Having  thus  decided that the plaintiff is entitled to  interest  the issue that arises for my consideration is as to at what rate and for  which period such interest could be directed to be paid to the plaintiff.\n<\/p>\n
 22.  In  the  light of the evidence adduced by the plaintiff, I  find  that interest  under Section 34 of the Act was awarded by the  Land  Acquisition
\nOfficer for the period from 14th March,1968 to 12th January,1969 i.e.  from the date of taking over possession till the date of making the award. Thus, in my considered opinion, the plaintiff is entitled to payment of  interest under Section 34 of the Land Acquisition Act on account of delayed  payment from the date of the award i.e. from 13th January, 1969 to 26th April, 1982 i.e. the date on which the payment was made to the plaintiff.\n<\/p>\n
 23.  The plaintiff has also claimed interest under Section 4(3) of the Land Acquisition  (Amendment  and Validation) Ordinance,1967 @ 6%  p.a.  on  the assessed  market value of Rs.1,06,200\/- from 13th November, 1962 upto  26th
\nApril, 1982. On perusal of the evidence on record, I find that such  interest  under  Section 4(3) of the Act was awarded by the  Collector  for  the
\nperiod  from  13th November, 1962 to 12th January, 1969.  My  attention  is drawn to a Division Bench decision of this Court in Sant Singh & Others Vs. Union  of  India; reported in 1996 V AD (Delhi) 499  wherein  the  Division Bench of this Court has held that if there be difference of more than three years  between the notifications under Section 4 and Section 6 of the  Land Acquisition  Act,  the appellant would also be entitled to  interest  under Section 4(3) of the Land Acquisition (Amendment & Validation) Act @ 6% p.a. from the date of expiry of three years from the date of Section 4 notification till the date of making payment. I am bound by the ratio of the aforesaid  Division Bench decision of this Court. In the present case  also  the
\nnotification  under  Section  4 was issued on  13th  November,1959  whereas notification  under  Section 6 was issued on 7th December, 1966,  time  lag being more than three years. Thus, in the light of the aforesaid  decision,
\nthe plaintiff is also entitled to interest on that account from the date of expiry  of three years of the date of Section 4 notification till the  date of making the payment i.e. from 13th November, 1962, the date of expiry  of three years from the date of Section 4 notification till 26th April,  1982, the date when the compensation was paid to the plaintiff.\n<\/p>\n
 24.  In view of my aforesaid findings and having arrived at the  conclusion that  the  plaintiff is entitled to interest under Section 34 of  the  Land Acquisition Act on account of delayed payment and in terms of Section 4 (3)
\nof  the  Land Acquisition (Amendment and  Validation)  Ordinance,1967,  the further  point  that I am left with to decide in the suit is at  what  rate such interest is to be paid by the defendants to the plaintiff.\n<\/p>\n
 25.  On  perusal  of the evidence on record it is  manifest  that  interest under  Section 4 (3) of Land Acquisition (Amendment and  Validation)  Ordinance,  1967  was paid by the Collector from 13th November,  1962  to  12th January, 1969. Under such circumstances, the plaintiff, becomes entitled to be paid on that account from 13th January, 1969 to 26th April, 1982.\n<\/p>\n
 26.  Counsel  appearing  for  the plaintiff submitted before  me  that  the facts,  circumstances and issues arising for decision in the  present  suit are  similar  and therefore, covered by the ratio of the decision  of  this Court  in  the  cases of LIC Vs. Union of India (supra) and  Sant  Singh  & Others Vs. Union of India (supra). Thus, following the ratio of the  aforesaid decisions, I am of the considered opinion that it would be  reasonable if the plaintiff is granted interest on the awarded amount @ 6% p.a. w.e.f. 13th  January, 1969 to 26th April, 1982 on account of delayed payment.  The plaintiff shall also be entitled to interest under Section 4(3) of the Land Acquisition  (Amendment  and Validation) Ordinance, 1967 @ 6% p.a.  on  the assessed  market  value of Rs.1,06,200\/- from 13th January,  1969  to  26th
\nApril, 1982.\n<\/p>\n
 27.  In  the  aforesaid  case of LIC Vs. Union of India  (supra)  no  other interest by way of damages and\/or by way of pendente lite and future interest  was  granted. Counsel for the plaintiff specifically stated  that  the issues  arising in the present suit are squarely covered by  the  decisions given by this Court in the case of LIC Vs. Union of India (supra) and  Sant Singh  &  Others Vs. Union of India (supra). Thus, the claim  for  interest made by the plaintiff in the present suit by way of damages @ 18% p.a. from 25th April, 1982 till 5th December, 1983, the date of filing of the suit as also the claim for pendente lite and future interest stands rejected.\n<\/p>\n
 28.  In view of my aforesaid discussion, I hereby pass a decree with  costs in favour of the plaintiff and against the defendants directing the defendants to pay interest under Section 34 of the Land Acquisition Act @ 6% p.a. from 13th January, 1969 till 24th April, 1982 and interest under Section  4(3) of the Land Acquisition (Amendment & Validation) Act, 1967 @ 6% p.a. on the assessed market value of Rs.1,06,200\/- from 13th January, 1969 to  26th April, 1982. Decree be prepared accordingly.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court Life Insurance Corporation Of … vs Union Of India & Others on 13 August, 1998 Equivalent citations: 1998 VIIAD Delhi 645, 75 (1998) DLT 231, 1998 (47) DRJ 659 Author: . M Sharma Bench: D M Sharma JUDGMENT Dr. M.K. Sharma, J. 1. The present suit was instituted by the Life Insurance […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-203413","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nLife Insurance Corporation Of ... vs Union Of India & Others on 13 August, 1998 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/life-insurance-corporation-of-vs-union-of-india-others-on-13-august-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Life Insurance Corporation Of ... vs Union Of India & Others on 13 August, 1998 - 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