Andhra Pradesh High Court – Amravati
Siram Kiran Naidu vs State Of Andhra Pradesh on 6 March, 2025
RC,J
I.A.No.2 of 2023 in W.P.No.6684 of 2018
1
APHC010150272018
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3332]
(Special Original Jurisdiction)
PRESENT:THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI
I.A.No. 2 of 2023 in WRIT PETITION NO: 6684/2018
Between:
Siram Kiran Naidu ...PETITIONER
AND
State Of Andhra Pradesh and Others ...RESPONDENT(S)
Counsel for the Petitioner:
1. P RAMA SHARANA SHARMA
Counsel for the Respondent(S):
1. GP FOR MCPL ADMN URBAN DEV (TG)
2. V SURYA KIRAN KUMAR (SC FOR VMRDA and MUDA)
3. GP FOR LAND ACQUISITION (AP)
4. GP FOR REVENUE (TG)
DATE:06.03.2025
ORDER
The Writ Petitioner in Writ Petition No.6684/2018 filed this petition
seeking to review the judgment dated 10.03.2023 passed in the said writ
petition to the extent of adding the word “compounding” before the words
“interest per annum” in para 34 of the judgment.
RC,J
I.A.No.2 of 2023 in W.P.No.6684 of 2018
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2. Heard Sri P.Rama Sharana Sharma, learned counsel for the petitioner
and the learned Standing Counsel for Visakhapatnam Urban Development
Authority and the learned Assistant Government Pleader for Revenue.
3. Sri P.Rama Sharana Sharma, learned counsel, while reiterating the
grounds of review would contend that in para-34 of the order, this Court
directed the authorities to pay interest at 15% per annum on the award
amount of Rs.7,82,612-56 ps., which is capable of giving two interpretations
viz., simple interest/compound interest. The learned counsel would further
contend that whenever any amount is deposited in Bank, interest will be
added to the principal every year and then interest will be calculated and
hence it will be called per annum and therefore, the words “per annum” used
in para 34 of the order would certainly indicate that compound interest is
granted. Further, the property which was acquired by Government in the year
1982 is worth hundred crores as of now and therefore compound interest only
will meet the ends of justice. Accordingly prayed to review the orders passed
by this Court on 10.03.2023 in W.P.No.6684/2018 and add the words
“compounding” before the words “interest per annum” occurring at para-34 of
the order.
4. Whereas, the learned counsel for respondents vehemently opposed
the contentions raised by the learned counsel for the petitioner and
contended that interest, unless otherwise specified, refers to simple interest
RC,J
I.A.No.2 of 2023 in W.P.No.6684 of 2018
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and that interest is payable only on principal amount and not on any accrued
interest. A reading of the orders sought to be reviewed leaves no doubt
regarding granting of simple interest. The review petition lacking merits
deserves dismissal. Accordingly, prayed to dismiss the petition.
5. Perused the orders passed by this Court in Writ Petition No.6684 of
2018 and considered the submissions made by learned counsel for the
parties.
6. This Court, took note of the facts and concomitant circumstances of
the case and having observed that the Government by its actions of
withdrawing the land from acquisition almost thrice had created a sense of
legitimate expectation in the mind of the petitioner and thereby prevented
him from withdrawing the amount and therefore, awarding interest on the
deposited amount would place him in the position if he had withdrawn the
amount and utilized it for purchase of alternate property; had granted interest
at 15% per annum as per Section 34 of Act,1894.
7. It is the specific contention of the learned counsel for the petitioner
that the use of the words “per annum” would indicate that what was granted
is “compounding interest”.
8. The Interest Act, 1978 vide sub-section (3) of Section 3 specifically
lays down that nothing in Section 3 which permits the court to award interest
RC,J
I.A.No.2 of 2023 in W.P.No.6684 of 2018
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shall empower the court to award interest upon interest. It means that
ordinarily the courts are not entitled to award interest upon interest unless
specifically provided either under any statute or under the terms and
conditions of the contract.
9. Section 34 CPC provides that where the decree is for payment of
money, the court may order interest at such rate as the court deems
reasonable to be paid on the principal sum adjudged. Again, the reading of
the aforesaid sub-section (1) of Section 34CPC would reveal that the interest
is payable on the principal sum adjudged and not on interest part of the
award.
10. In State of Haryana v. S.L. Arora & Co. (2010) 3 SCC 690 :
(2010) 1 SCC (Civ) 823] , it was observed that interest, unless otherwise
specified, refers to simple interest and that interest is payable only on
principal amount and not on any accrued interest. It was further held that the
compound interest can be awarded if there is a specific provision under the
statute or in the contract for compounding of interest but no general
discretion lies with the courts or tribunals to award compound interest or
interest upon interest.
11. In the light of the above legal provisions, it is evident that ordinarily
courts are not supposed to grant interest on interest except where it has been
specifically provided under the statute. There is no dispute as to the power of
RC,J
I.A.No.2 of 2023 in W.P.No.6684 of 2018
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the courts to award interest on interest or compound interest in a given case
subject to the power conferred under the statutes but where no such power is
conferred ordinarily, the courts do not award interest on interest.
12. Neither the Land Acquisition Act, 1894 Act specifically empowers
the court to award interest upon interest or compound interest nor there is
any other provision which provides for grant of compound interest or interest
upon interest. Even Section 34 CPC is silent in this regard whereas sub-
section (3) of Section 3 of the Interest Act specifically prohibits the same.
13. The order sought to be reviewed clearly says that interest at 15%
per annum was awarded as per Section 34 of 1984 Act. In view of the
observations made in the decision in State of Haryana v. S.L. Arora & Co.
(supra 1) and further since the Land Acquisition Act, 1894 nowhere states
that compound interest can be awarded, the words referred to in para-34 of
the order, by no stretch of imagination would be taken to mean that
compound interest is awarded. Further, 15% per annum would mean that
Rs.15/- would have to be paid towards interest on Rs.100/- per year. The
contention raised by the learned counsel for the petitioner that the words ‘per
annum’ denotes granting of compound interest is misconceived and
unsustainable.
RC,J
I.A.No.2 of 2023 in W.P.No.6684 of 2018
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14. In view of the above, there are no merits in this review petition and
the same deserves dismissal.
15. Accordingly, the petition is dismissed. There shall be no order as to
costs.
Pending miscellaneous petitions, if any, shall stand closed.
____________________________________
JUSTICE RAVI CHEEMALAPATI
RR
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