P V G RAJU GARU Vs. STATE OF ANDHRA PRADESH
LAWS(SC)-1990-1-43
SUPREME COURT OF INDIA (FROM: ANDHRA PRADESH)
Decided on January 24,1990

P.V.G.RAJU GARU Appellant
VERSUS
STATE OF ANDHARA PRADESH Respondents

JUDGEMENT

Sawant, J. - (1.)The present appeals arise out of the proceedings for the determination of the claims of the creditors and directions to pay them on the abolition of the Estates of the Vizianagaram and taking over of the same by the State Government under the Andhra Pradesh (Andhra Area) Estate (Abolition and Conversion into Ryotwari) Act, 1948 (hereinafter referred to as the Act).
(2.)Under the provisions of the said Act, on 7-9-1949 the Gosha hospital at Vizianagaram which was till then manned by the hereditary landlord and zamindar of the impartible Estate of Vizianagaram (hereinafter referred to as the Estate) was handed over to the State. The late Maharani Appalakondayamba otherwise popularly known as "Rani of Rewa" had executed a Will on 14-12-1911 creating a permanent endowment of a sum of Rs. 1,00,000/- for the maintenance of the said hospital. This amount was kept in deposit with the Estate. Since the Government had taken over the hospital by its Application No. TOP 123/58 to the Estates Abolition Tribunal and Distt. Judge, Vishakhapatnam, the Government claimed the recovery of the said amount with interest at the rate of 6% per annum and also claimed a priority over the other creditors. The Tribunal by its order dated 15-12-62 allowed the claim for the amount, but rejected the claim for priority. The Tribunal also directed the payment of Rs. 36,695/- to the Government out of the total amount of compensation which was then deposited with it. The Government filed an appeal against the said Order being STA No. 1/ 64 in the High Court, but the same was dismissed. It appears that subsequently, another sum of compensation being Rs. 11,78,581.09 was deposited, and lence the Government filed another application, viz. TOP 5/69 for payment of the balance of Rs. 63,305 with interest thereon at the rate of 6% per annum from 1-7-49 till the date of payment. In this application, the appellant did not dispute the Government's claim for Rs. 63.305 / - but contended that no interest on the sum of Rupees one lakh or on any part thereof was payable since according to him the Tribunal had rejected the claim for interest by its earlier Order of 15-12-62 in TOP 123/58. The Tribunal accepted the appellant's contention and held that the claim for interest was rejected earlier and disallowed the same. Against the said Order, the Government preferred an appeal to the High Court being STA 1/ 71.
(3.)The late Rani of Rewa by her same Will had also deposited another sum of Rupees one lakh with the Estate with the direction that the interest thereon should be utilised in feeding Telugu Brahmin students studying advanced Sanskrit Literature and Shastras at Banaras. The said fund will hereinafter be referred to as the Banaras Charities Fund. It appears that sufficient number of Telugu Brahmin students were not available and hence the Executor of the Will had applied for utilisation of the said amount for the Gosha Hospital, and in that application, the High Court had directed that out of the accumulated surplus interest of Rs. 47,897/- in the said Banaras Charities Fund, a sum of Rs.30,000/- be capitalised and deposited with the Estate and the interest thereon at the rate of 3% per annum be utilised to meet the recurring annual expenditure of the Gosha Hospital. After the abolition of the Estate, the Government filed before the Tribunal a claim application being TOP No. 124/58 for recovery of the said sum of Rs. 30,000/- with interest at the rate of 6% per annum. The Government also claimed priority over the other creditors for the said amount as well. The Tribunal by its same order of 15-12-62 allowed the Government's claim for the amount, but rejected the claim for priority. The Tribunal also directed that a sum of Rs. 11,008.50 be paid to the Government from out of the amount of compensation which was then deposited. Against the said order, the Government preferred an appeal to the High Court being STA No. 2/ 64 which was dismissed. On the subsequent deposit of further compensation, the Government preferred another application being TOP 6/69, for the balance of Rs. 18,991.50 and for interest thereon at the rate of 6% per annum from 1-7-49 till the date of payment. The appellant did not dispute the claim for the payment of the balance amount of Rs. 10,991.50, but resisted the claim for interest, firstly on the ground that there was no provision for payment of interest in the Act and secondly on the ground which was urged in the other appeal, viz. that in TOP 124/ 58 it was rejected by the Tribunal earlier. The Tribunal accepted the appellant's contention and disallowed the claim for interest. Against the said order, the Government preferred an appeal to the High Court being STA No. 3/71.
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