K. Malla Reddy and Others Vs. the Land Acquisition Officer and Others - Court Judgment

Excerpt:

.....therefore, the insured and the insurer have no escape but to discharge the said award as directed. undisputedly, in this case as deduced for proved facts, the vehicle in question was not properly maintained by the owner and despite faulty brake system, the claimant had undertaken the hazardous journey to his peril at the behest of and at the instruction of the owner. the owner is therefore, tortfeasor. section 168: [v. gopala gowda & jawad rahim, jj] insurers limit of liability - held, it is well settled that the liability of the insurance company for payment of compensation can be statutory or contractual. is for the insurance company to show that the insurance policy was a statutory policy and not a contractual policy to restrict its liability. that issue was neither raised before the tribunal nor is raised in this appeal requiring decision. thus, if at all the insurer has any valid ground to restrict its liability, it can proceed against the insured but firstly it has to discharge the award as required under section 149 (1) of the act. where the owner/insured has failed to maintain the vehicle as per prescribed safety standards and has caused the claimant to drive the..........as other plea advanced by mr, narender reddy, counsel for the appellants complaining about the non-grant of interest under s. 34 of the land acquisition act is concerned, that cannot be a question for consideration in these proceedings. suffice it to say that possession has been taken over by the first respondent on 20-12-1989 and that shall be reckoned as the date for payment of interest under s. 34 of the land acquisition act. but the computation of interest and grant thereof is the issue which has to be raised before a competent civil court to which a reference under s. 18 will be made by the first respondent herein.6. this writ appeal is ordered accordingly. 7. order accordingly.

Judgment:

ORDER

B. Subhashan Reddy, J.

1.This Court passed the order dt. 28-4-1992 on the premise that the amount determined by the Land Acquisition Officer concerned in this case made deposit in a Bank by way of term deposit and as such we directed that the interest which may have accrued on the said determined amount be paid to the appellants herein.

2. Now it is brought to our notice that the determined amount was not deposited into any Bank, but was deposited only in a current account partly and partly in S. B. Account. It is pertinent to mention here that so far as current Account is concerned, if does not attract any interest whereas the S.B. Account attracts only five per cent interest.

3. Having heard the counsel on either side, we are of the considered view that there is gross negligence on the part of the Land Acquisition Officer herein in not taking appropriate steps in depositing the amount in a Bank at least in a term deposit or complying with the mandatory provisions contained in S. 31 of the Land Acquisition Act by depositing the amount into Court. It is needless to mention that had the Land Acquisition Officer made reference as contemplated under Ss. 30 and 31 of the Land Acquisition Act, the Civil Court concerned would have deposited the awarded amount by way of a term deposit, carrying a minimum of 8% interest per annum, even if it was for one year at that relevant point of time. In this connection, a judgment of Supreme Court in Chandra Bansi Singh v. Stale of Bihar, : [1985]1SCR579 is relevant for consideration. In the said case the Supreme Court had awarded the interest at the rate of 7 1/2 per cent per annum for the laches of the authorities concerned in taking possession for a period of1 1/2 years. The said amount of interest was awarded dehors the provisions of the Land Acquisition Act on equity.

4. Following the said Judgment, we also direct the first respondent herein to pay the Writ Appellants herein the interest at the rate of 8% per annum which is a normal interest payable by any Bank for even one ypar's termsdeposit. While computing the same the date reckoned is the date of service of S. 12(2) Notice to the date of Payment. Further any interest which is accrued on S.B. Account shall be set off, 'while' calculating the same as indicated above in this order.

5. In so far as other plea advanced by Mr, Narender Reddy, Counsel for the appellants complaining about the non-grant of interest under S. 34 of the Land Acquisition Act is concerned, that cannot be a question for consideration in these proceedings. Suffice it to say that possession has been taken over by the first respondent on 20-12-1989 and that shall be reckoned as the date for Payment of interest under S. 34 of the Land Acquisition Act. But the computation of interest and grant thereof is the issue which has to be raised before a competent Civil Court to which a reference under S. 18 will be made by the first respondent herein.

6. This Writ Appeal is ordered accordingly.

7. Order accordingly.