ORDER S.C. Mohapatra, J.
1. This is an appeal under Section 11 of the Requisitioning and Acquisition of Immovable Property Act, 1952 (hereinafter referred to its 'the Act').
2. As vast tract of agricultural land measuring 32 acres 80 decimals belonging to various owners including land of Sumant Prasad, predeceassors-in-interest of appellants were requisitioned under the Defence of India Act, 1952 and rules made thereunder for use and occupation of Indian Military Academy, Dehradun in the year, 1963. While academy was in possession, two notices were published on 22-1-1971 and 3-2:I97I in official Gazette under Section 7 of the Act acquiring 3 acres 94 decimals of land belonging to Sumant Prasad in Khasra Plot no. 250. He was offered compensation of Rupees 40,859-26 paise at the rate of Rs. 10,370.37 per acre. If the land holder would have agreed to accept the same, this litigation would not have seen light of the day. Land holder demanded compensation at the rate of Rs.9,000/- per begha (1 acre = 5 bighas) which brings the rate to Rs. 45,000/ - per acre. Since there was no argument, the dispute was referred to District Judge, appointed as arbitrator under the Act as provided under Section 8(1)(b) of the Act. Parties filed statements before the Arbitrator as provided under Section 8(1)(b) of the Act. In the statement filed by appellants after death of Sumant Prasad, it was claimed that fair amount of compensation would be by treating the land to be homestead whereas collector stated that land is inferior agricultural land and as per prevailing official rate amount offered is the fair compensation.
3. Claimants examined witnesses and proved documents of comtemporaneous transactions of land of similar nature in the vicinity to justify claim. Collector proved documents in support of his statement. Considering the materials on record, arbitrator enhanced the compensation treating acquired land as irrigated land and awarded interest at the rate of 6% per abbyn (sic) Collector has remained satisfied with the award which has become final as against him. Appellants, however, have not been satisfied and have preferred this appeal.
4. Parties relied upon Sections 7 and 8(1) and (3) of the Act in support of their respective contention, since interpretation of those provisions would be necessary for adjudi-
cation of the disputes, they are extracted hereunder:
"7. Power to acquire requisitioned property-
(1) where any property is subject to requsi-tion, the Central Government may, if it is of opinion that it is necessary to acquire the property for a public purpose, at any time, acquire such property by publishing in official Gazette a notice to the effect that the Central Government has decided to acquire the property in pursuance of this sections:
Provided that before issuing such notice, the Central Government shall call upon the owner, or any other person who in the opinion of the Central Government, may be interested in, such property to show cause why the property should not be acquired, and after considering the cause, if any, shown by any person interested in the property and after giving the Parties an opportunity of being heard, the Central Government may pass such orders as it deems fit.
(2) When a notice as aforesaid is published in the official Gazette the requisitioned Property shall, on and from the beginning of the day on which the notice is so published, vest absolutely in the Central Government free from all encumbrances and the period of requisition of such property shall end.
(3) No property shall be acquired under this section except in the following circumstances, namely:--
(a) Where any works have, during the period of requisition, been constructed, on, in or over, the property wholly or Partially at the expenses of the Central Government and the Government decides that the value of or the right to use, such works should be secured or preserved for the purpose of Government, or
(b) Where the costs of restoring the Property to its condition at the time of its requisition would, in the determination of the Central Govt. be excessive and the owner declines to accept release from requisition of the property without payment of compensation for so restoring the property.
(4) Any decision or determination of the Central Govt. under sub-section (3) shall be final and shall not be called in question in any court.
(5) For the purposes of clause (1) of subsection (3) "works" includes building, structures and improvements of every description.
NOTE In case of compulsory acquisition of property to notification under Section 7(2), the party dispossessed is entitled to interest on compensation.
8. Principles and method of determining compensation:
(1) Where any property is requisitioned or acquired under this Act, there shall be paid compensation the amount of which shall be determined in the manner and in accordance with the principles hereinafter set out, that is to say-
(a) Where the amount of compensation can be fixed by agreement, it shall be paid in accordance with such agreement.
(b) Where no such agreement can be reached, the Central Govt. shall appoint as arbitrator a person, who is, or has been or is qualified for appointment as, a Judge of a High Court.
(c) The Central Govt. May, in any Particular case, nominate a person having expert knowledge as to the nature of the property -- requisitioned or acquired to assist the arbitrator and where such nomination is made an assessor for the same purposes:
(d) at the commencement of the proceedings before the Central Government and the person to be compensated shall state what in their respective opinions is a fair amount of compensation;
(e) the arbitrator shall, after hearing the dispute make an award determined the amount of compensation which appears to him to be just and specifying the person or persons to whom such compensation shall be paid, and in making the award, he shall have regard to the circumstances of each case and the provisions of sub-sections (2) and (3), so far as they are applicable.
(f) where there is any dispute as to the person or persons, who are entitled to the compensation, the arbitrator shall decide such dispute and if the arbitrator finds that more persons than one are entitled to compensation, he shall apportion the amount thereof amongst such persons;
(g) nothing in the Arbitration Act. 1940 (10 of 1940) shall apply to arbitrations under this Section.
(3) The compensation payable for the acquisition of any property under Section 7 shall be the price which the requisitioned property would have fetched in the open market, if it had remained in the same condition as it was at the time of requisitioning and been sold on the date of acquisition.
NOTES Sub-section (3) of Section 8 of the Act leaves no choice to the arbitrator as to which of the two modes of assessing the compensation he is to accept. The words of subsection (3) are mandatory and compel the arbitrator to accept only the small figure arrived at after assessment on the two modes of valuation. The basis provided by clause (b) has nothing to do with just equivalent of the land on the date of acquisition nor is there any principle for such a basis. Therefore, clause (3)(b) cannot be said to satisfy requirements of Art. 31(2) of the Constitution.
The value of the land will be the value on the date or which possession of the requisitioned premises was taken. The best evidence to prove the value of the land would be the evidence of genuine sale affected at about the time of requisition either in respect of the same land or of land similarity situated with similar advantages. The award of costs is the discretion of arbitrator."
5-- Perusal of the aforesaid provisions makes it clear that they are self contained in matter of acquisition of determination of compensation payable to the person, whose, land is acquired. A comparision of the provisions with the provisions of the Land Acquisition Act reveals that they are imperi materia. A few illustrations would clarify the position. They are as follows:--
THE ACT LAND ACQUISITION ACT
(a) Requisitioned land is to be acquired for public purpose S. 7(1)
(a) Land is to be acquired for public purpose -S. 4(1)
(b) Notice is published in official Gazette.
(b) Notification is published in official Gazette
(c) Owner is given opportunity to show cause why the land shall not be acquired and objector is given opportunity of being heard.
(c) Person intended can object to the acquisition of land and objector is given opportunity of being heard.
(d) Land, vests absolutely free from all encumbrances on publication of notice under S. 7(1) and S. 7(2)
(c) Land vests absolutely free from all encumbrances on the collector making award under S. 16.
There are also other similarities under both the statutes.
They are as follows:
THE ACT LAND ACQUISITION ACT
(i) When there is no agreement to the amount of compensation Arbitrator is appointed to determine the compensation -(a) to (c) S. 8(1).
(i) When compensation offered is claimed to be low, reference is made to Court to determine the compensation S. 19
(ii) Arbitrator makes an award after hearing parties S.
8(1)(e)
(ii) Court makes an award S. 26.
(iii) Apportionment of amount of compensation is to be determined by arbitrator S. 8(1)(f)
(iii) Apportionment of compensation is determined by court S. 30.
(iv) Compensation is to be the selling price of land on date of notice under Section 7(1) on the condition it was requisitioned earlier S. 8(3).
(iv) Market value is to be the prevailing rate on the date of publication of notification under Section 4(1) S. 23(1)(a).
Main difference between provisions of both the statutes is that in the Land Acquisition Act various provisions have been made under Section 23(1A) and (2) for compensation and solatium and under Sections 28 and 34 for interest whereas under the Act there is no such provision.
7. In back ground of the aforesaid legal position it is to be examined.
(i) Whether compensation as determined by the Arbitrator is just.
(ii) Whether appellants are entitled to solatium added to the compensation determined.
(iii) Whether interest at the rate of 6% per annum as directed by the Arbitrator to be paid is just.
8. Section 8{3) of the Act extracted earlier is clear in language that compensation shall be the price which the requisition property would have fetched in open market if it would have remained in the same condition as on the date of requisition and on the date of notice of acquisition, Therefore where there is no agreement, arbitrator is required to find out the nature and condition of the land on the date if it would have been sold in open market on the date of acquisition. In other words, price which the land would fetch when offered for sale to a seller not being obliged to sell and price which would have been paid by a bona fide, purchaser for the land if he would purchased the same on the date of notice of acquisition, would be the compensation to be paid by the land owner. Such a price is to be determined by the arbitrator. Same is also the principle under the Land Acquisition Act which provides under Section 23(1)(a) that market value of the acquired property on the date of publication of notification under Section 4(1) of the said Act is to be paid. In one case the date when there is proposal for compulsory acquisition is the material date and in the other case under the Act, the date when notice under Section 7(1) of the Act was published acquiring the land. Technical difference in the meaning of 'price' and 'value' would be of no avail. In fixing price in open market arbitrator has to take into account potential value on the basis of its expected user in the near future when such user is certainty or a proximate possibility. Price of land in the vicinity having a similar advantages received by other sellers in transaction contem-poranceous to the date of notice under Section 7(1) of the Act, would be a surer test determination price in open market. But it is always to be remembered that a bona fide purchaser would be willing to pay a higher price of a small strip of land and the same would not be rate applicable to a vast tract of land which would be much lessor. Normally, contemporaneous transaction for vast tract of land are not available. In such circumstances, land in or near urban area having potentiality of being used for building purposes are made to small plots by hypothical building project and leaving out areas necessary for preparing those plots, price in open market is fixed taking into consideration rates at which small plots were sold near about the date of acquisition. In AIR 1957 SC 202 (H.S. Gupta v. U.P. State) it was observed that market value should be determined in a most lucrea-tive advantageous way in which a land holder can dispose of the same. In AIR 1982 SC 940 (Brig Sahib Singh Kalha v. Amritsar Improvement Trust) relying upon its earlier decision reported in AIR 1972 SC 1417 (Tribeni Devi v. Collector, Ranchi) it was observed (at p. 941 of AIR):
"It is well settled principle of valuation that where there is a large area of undeveloped land under acquisition, provision has to be made for providing the minimum amenities of their life such as water connection, Well laid out roads, drainage facility, electric connec-
tion etc. The process necessarily involved deduction of the cost of factors required to bring the under developed land on a par with developed land. An extent of 20 per cent of total land acquired is normally taken as a reasonable deduction for the space required for roads. This is a part from the costs of laying road themselves and the cost of providing other amenities like electricity, water, underground drainage etc."
So observing, it was held that deduction of 33% in one case and 20% in one case were not arbitrary and unreasonable. Thus, deduction being the principle, percentage of such deduction would depend upon facts and circumstances available from material in each case. However, unless clear evidence is available either to deduct lessor area or larger area, normal deduction, according to us should be l/3rd of the total area acquired as was deducted in AIR 1972 SC 1417 (supra).
9. In the present case land was requisitioned in the year 1963. By that time, as found by the Arbitrator, acquired land was irrigated agricultural land. It is at a short distance from urban, area being very close to Dehradun town. This finding is not seriously assailed by either party. Grievance of appellants is that being at a short distance from Dehradun, land in dispute had Potentiality of being used as homestead of irrigated agricultural land is only payable to appellants (sic).
10. Three sale transactions between the period of requisition and acquisition, which have been filed as exemplers, are relevant for being considered. They are Exts. 10, 11 and 12. Land under these documents are under the acquired land. Transaction under Ext. 10 is dated 4-6-1968. Though it is a transaction made three years before, it indicates price prevailing in open market for small strip of land in 1968. Under Ext. 10 for 8 decimals of land consideration was Rs. 2,400/-. Thus, rate per acre comes to Rs. 30,000/-. Ext. 12 is dated 14-1-1971. As per this document, 5 decimals of land was sold for Rs. 2,500/-bringing the rate of Rs. 50,000/ - per acre. Ext. II is a document dated 29-10-1971 eight months after the date of notice under Section 7(1) of the Act. As per transaction under this document, 11 decimals of land were sold for Rs. 3,500/- bringing the rate to slightly higher than Rs. 31,000/- per acre. It is not that all transactions subsequent to acquisition are to be completely ignored, where arbitrator form a judicial opinion that the transaction has been influenced by the acquisition, the same would not be relied upon. Otherwise to ascertain the existing rate, the document would be material. From the three sale deeds relied upon as exemplers by appellants that the average rate of land having similar advantages to the acquired land is Rs. 30,000/- per acre when sold in small strips of 8 decimals to 11 decimals. Under Ext. 12 land is hardly 5 decimals for which the purchaser might have been willing to pay at a higher rate of Rs. 50,000/- per acre.
11. Exts. 10 and 11 indicate that rate for small strip of land measuring 8 decimals to 11 decimals were sold at a rate of approximately Rs. 30,000/-per acre. When with a difference of 3 to 6 decimals, price falls by Rs. 20,000/ -per acre, it is reasonable to hold that for an area of about 4 acre, a bona fide purchaser would not be willing to pay at the rate of Rs. 30,000/- per acre. It would be much less. Arbitrator has found the rate to be about Rs. 15,247/- per acre treating the same to be irrigated land. This has been accepted by Collector to be reasonable since he has not challenged the same. Arbitrator has not taken into consideration the potentiality of the land although he accepted evidence of P.W. 1 Harmair Singh that acquired land is situated at a distance of 4 miles from clock tower in Dehradun city and lies within cantonment limit. It is levelled and lies about two furlongs from Dehradun, Chakrata Road, post and Telegraph office, educational institution up to High School and Intermediate Amtabh Textiles Mills are at distance of about half a mile Forest Research Institute and Colleges are within a mile. Main buildings of Indian Military Academy is hardly three furlongs away Panditwari Market is hardly six furlongs away. There is a bus stand in Panditwari itself. Arbitrator came to conclusion that the acquired land was a potential plot, meaning that it was the potentiality of being used as homestead. Any person having some experience and knowledge about land would not have hesitation to come to a conclusion that a land near urban area having potentiality of homestead would have higher rate in open market than irrigated land in that area which has no potentiality of being used as homestead. On this short ground determination of compensation treating the acquired land to be irrigated land is vulnerable.
12. Where there is no material to determine the price in open market of a vast tract of homestead land though materials are available for small strips of land having similar advantages in the vicinity the price given for vast area of land acquired for building projects can be adopted since the vast tract is to be converted to small strips for that purpose. For so converting, normally, it is to be considered that roads lanes, space for park and for other amenities arc to be left out. Collector in his statement before arbitrator claimed that in developing the land for housing purposes, huge expenditure was involved and a major part of land was likely to be wasted for construction of roads, parks, electricity and water lines etc. which are essential for housing colony and in this case expenditure would be much more because it is agricultural land. However, no acceptable evidence was brought to record to give the arbitrator an idea of the land to be left out or expenditure that would be involved though collector could have adduced such evidence. In that view, following AIR 1972 SC 1417 (supra) it will be reasonable to exclude 1/3rd of the compensation. Accordingly, in this case price in open market in respect of small strips of land being Rs. 30,000/ - per acre calculating price at that rate for entire 3 acres 94 decimals 1/3rd is to be deducted. In other words, price can be determined at Rs. 20,000/- per acre. Thus, appellants are entitled to Rs. 78,800/- in place of Rs. 52,047.06 paise awarded by Arbitrator.
13. Next important question is whether appellant shall be entitled to solatium on the price of the land determined under the Act. Section 8(3) of the Act provides that compensation shall be the price of the land . It docs not include solatium. Thus, appellant would have been entitled solatium on the market value of land if it would have been acquired under the Land Acquisition Act and there is no provision in this Act like Section 23(2) of the Land Acquisition Act. But it is to be noted that there is no specific exclusion. Compensation is just equivalent of what a land owner lost. Though inadequacy of compensation cannot be justiciable to strike down a law (sic), where there is discrimination, provision of the law providing for the discrimination against the person is to be struck down. This principle was laid down by Supreme Court in various decisions following which it was held in the decision of Supreme Court reported in AIR 1968 SC 1425 (Balammal v. State of Madras) that deprivation of statutory right to solatium at the rate of 15% on the market value is discriminatory violative of Art. 14 of Constitution. In the statute invoked in the said case owners of land acquired for the purposes of the statute were specifically deprived of statutory right to solatium of 15% though land was acquired under the Land Acquisition Act. Similar Provision in the Nagpur Improvement Trust Act was held to be unconstitutional in the decision reported in AIR 1973 SC 689 (Nagpur Improvement Trust v. Vithal Rao).
14. If in this case the market value would have been determined under the Land Acquisition Act, there would not have been any difficulty to award solatium also because land was acquired for a public purpose and could have been acquired under the Land Acquisition Act also. But, the Act is self contained and does not breath a word about solatium. Receipt of solatium is a statutory right and is not a right automatically following from compulsory acquisition. Adequacy of compensation payable for acquisition on under a statute is not justiciable. Discriminatory' character is only assailable. Under the Act, only requisitioned land can be compul-sorily acquired. For requisition, a land owner is paid compensation. Alt requisitioned land also cannot be acquired. Where the precondition as provided under Section 7(3) of the Act are satisfied, requisitioned land can be acquired. Thus, it is a classification by itself. In this view, when statute does not provide for solatium, appellants are not entitled to the same.
15. It is true that Supreme Court in the decision reported in AIR 1992 SC 1620 (Smt, Saraswati Devi v. U.P. Government) while considering compulsory acquisition to which U.P. Municipalities Act, 1916 and U.P. Town Improvement Act, 1919 modifying the provision of Land Acquisition Act as regards payment of solatium applies, observed (at p 1622 of AIR):
"Under the prevailing law, the claimants have not been given any solatium and the Government had taken possession of the acquired land on 11th August, 1953 and 30th June, 1954."
However, entitlement to solatium was not under consideration and the previous larger Bench decision were not considered. However, for reasons already given, we have held that there is reasonable clarification and absence of provision for solatium is not discriminatory. Therefore, the decisions of the Supreme Court are distinguishable. Appellants are not entitled to solatium as provided under the Land Acquisition Act.
16. As regards payment of interest, Arbitrator has directed payment of interest at the rate of 6% per annum which has become final. For the reasons, we refuse solatium interest at the rates as provided under "the Land Acquisition Act would not be applicable.
17. In conclusion.
(i) Appellants are entitled to compensation of Rs.78,800/- (Rupees Seventy Eight thousand Eight hundred) or 3 acres 94 deci mals of land acquired at the rate of Rs. 20,000/- per acre, which Price they would have fetched in open market on the date of acquisition.
(ii) Appellants are not entitled to solatium.
(iii) Appellants are entitled to interest at, the rate of 6% per annum on the amount of compensation from 1-3-1971 till date of Payment on the enhanced amount as determined by us.
18. In result, appeal is allowed in part. There shall be no order as to costs in this appeal.
19. Appeal allowed.