Hon'ble Dinesh Gupta, J.
Plot No. 71 having area 6 bigha 5 biswa 11 biswansi belonging to Shailendra Kumar, plot No. 179 having area 17 biswa belonging to Manzoor Khan and Zahoor Khan, plot No. 29 having area 5 bigha 8 biswa 18 biswansi belonging to Prabhu, plot No. 149 M having area 1 bigha 7 biswa belonging to Sri Ram Snehi situated at Village Nagin Jassi @ Nabipur, district Kanpur Dehat; plot No. 333 having area 18 biswa belonging to Chheda Lal, plot No. 330 having area 10 biswa and plot No. 360 having area 10 biswa belonging to Sri Krishna; plot No. 307 Ka having area 15 biswa 10 biswansi situated at village Jainpur, district Kanpur Dehat; and plot No. 223 having area 18 biswa belonging to Munshi Lal, situated at village Swarooppur, district Kanpur Dehat, were acquired by the appellants for their planned Industrial Development Scheme.
It is not in dispute that the notifications under Section 4 and 6 of the Land Acquisition Act [hereinafter referred to as the "Act"] were issued and the possession of the plots in question were also taken. Thereafter, the Additional District Magistrate (Land Acquisition), Kanpur Nagar passed the award. Not being satisfied with the award so pronounced by the Additional District Magistrate (Land Acquisition), Kanpur Nagar, claimants/ respondents approached the District Judge, Kanpur Dehat by filing separate References under Section 18 of the Act. The District Judge, after hearing the parties and perusing the record, passed the impugned award, whereby the District Judge awarded compensation to the claimants/ respondents @ Rs.1,98,181 per bigha on market value of the acquired land, solatium @ 30% per annum, additional amount of 12% per annum, interest @ 9% from the date of possession and thereafter @15% per annum, till the date of actual payment. Feeling aggrieved, the appellant has filed the above-captioned appeals.
Since common question of facts and law are involved in the aforesaid appeals, as such, with the consent of the learned Counsel for the parties, all the appeals are being decided by a common order.
Heard counsel for the parties and perused the record.
Counsel for the appellants has submitted that exemplars, which were relied upon by the reference Court, were in respect of small chaks of land, whereas the land in question, which was acquired, was big chak of land. His submission is that the nature of land in question on the date of acquisition was purely agricultural and as such, the Land Acquisition Officer, after taking into consideration of building potentiality etc. of the site and its location, had already granted excessive compensation to the claimants/respondents but even then, the Reference Court, without any reliable evidence, erred in enhancing the compensation by the impugned award. Therefore, the impugned award of higher compensation is contrary to Section 23 of the Land Acquisition Act and is liable to be set-aside.
Counsel for the appellants have also stated that the reference Court, while passing the impugned award, had also erred in granting additional interest @ 12% per annum as well as solatium @ 30% to the claimants/respondents.
Per contra, counsel for the respondents/claimants submits that the land in question, which was subjected to land acquisition proceedings, is owned by eight farmers and in each share, the area of land comes to two and half bighas. Therefore, the learned reference Judge, after referring to the factual contention, urged on behalf of the Land Acquisition Officer and the claim of the appellants and placing reliance upon the documentary and oral evidence on record, passed judgment by awarding just and reasonable compensation by re-determining the market value. Thus, there is no illegality and infirmity in the impugned order.
We have carefully examined the factual and legal contentions urged on behalf of the parties and also the findings recorded by the learned reference Judge in the judgment impugned in the above-captioned appeals.
Before going into the merits of the case, it is apt to reproduce Section 23 of the Act, which is as under :
"23 Matters to be considered in determining compensation. -
(1)In determining the amount of compensation to be awarded for land acquired under this Act, the Court shall take into consideration first, the market value of the land at the date of the publication of the notification under section 4, sub-section (1); secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector's taking possession thereof; thirdly, the damage (if any), sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of severing such land from his other land; fourthly, the damage (if any), sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings; fifthly, if, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the declaration under section 6 and the time of the Collector's taking possession of the land.
[(1A) In addition to the market-value of the land, as above provided, the Court shall in every case award an amount calculated at the rate of twelve per cent per annum on such market value for the period commencing on and from the date of the publication of the notification under Section 4, sub- Section (1), in respect of such land to the date of award to the Collector or the date of taking possession of the land, whichever is earlier." Explanation- In computing the period referred to in this sub-section, any period or periods during which the proceedings for the acquisition of the land were held up on account of any stay or injunction by the order of any Court shall be excluded.]"
In Gurpreet Singh vs. Union of India : (2006) 8 SCC 457, the Apex Court noticed the claim which envisages award of compensation at different stages. In all the stages, it is necessary to take note of the provisions of Sections 23 (1) and 23 (1-A). In Gurpreet Singh (supra), the Apex Court held as under:
"32. In the scheme of the Act, it is seen that the award of compensation is at different stages. The first stage occurs when the award is passed. Obviously, the award takes in all the amounts contemplated by Section 23(1), Section 23(1-A), Section 23(2) and the interest contemplated by Section 34 of the Act. The whole of that amount is paid or deposited by the Collector in [pic]terms of Section 31 of the Act. At this stage, no shortfall in deposit is contemplated, since the Collector has to pay or deposit the amount awarded by him.
If a shortfall is pointed out, it may have to be made up at that stage and the principle of appropriation may apply, though it is difficult to contemplate a partial deposit at that stage. On the deposit by the Collector under Section 31 of the Act, the first stage comes to an end subject to the right of the claimant to notice of the deposit and withdrawal or acceptance of the amount with or without protest.
33.The second stage occurs on a reference under Section 18 of the Act. When the Reference Court awards enhanced compensation, it has necessarily to take note of the enhanced amounts payable under Section 23(1), Section 23(1-A), Section 23(2) and interest on the enhanced amount as provided in Section 28 of the Act and costs in terms of Section 27.
The Collector has the duty to deposit these amounts pursuant to the deemed decree thus passed. This has nothing to do with the earlier deposit made or to be made under and after the award. If the deposit made, falls short of the enhancement decreed, there can arise the question of appropriation at that stage, in relation to the amount enhanced on the reference."
In view of the decision in Gurpreet Singh (Supra), we can safely hold that the claimants were entitled to additional compensation @ 12% per annum as provided under Section 23 (1A) of the Act and as such, the reference Court has rightly awarded the same to the claimants/ respondent and in this aspect of the matter, there is no illegality and infirmity in the impugned award and the plea raised by the appellants to this extent is not sustainable at all.
So far as contention of the appellant that solatium @ 30% awarded by the Reference Court to the claimants are on higher side, we would like to mention here that Section 28 of the L.A. Act deals with interest payable on excess compensation which reads as under:
"28. Collector may be directed to pay interest on excess compensation.- If the sum which, in the opinion of the Court, the Collector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation, the award of the Court may direct that the Collector shall pay interest on such excess at the rate of 67 [nine per centum] per annum from the date on which he took possession of the land to the date of payment of such excess into Court:
[Provided that the award of the Court may also direct that where such excess or any part thereof is paid into Court after the date of expiry of 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 such excess or part thereof which has not been paid into Court before the date of such expiry.]."
In Sunder vs. Union of India : (2001) 7 SCC 211, the Apex Court has held that the interested persons are also interested on amount of solatium. The Apex Court further observed as under:
"15. When the court is of the opinion that the Collector should have awarded a larger sum as compensation the court has to direct the Collector to pay interest on such excess amount. The rate of interest is on a par with the rate indicated in Section 34. This is so provided in Section 28 of the Act."
In Gurpreet Singh (supra), the Apex Court had explained the reasons in this regard, which is as under:
"54. One other question also was sought to be raised and answered by this Bench though not referred to it. Considering that the question arises in various cases pending in courts all over the country, we permitted the counsel to address us on that question. That question is whether in the light of the decision in Sunder (supra) the awardee/decree-holder would be entitled to claim interest on solatium in execution though it is not specifically granted by the decree. It is well settled that an execution court cannot go behind the decree. If, therefore, the claim for interest on solatium had been made and the same has been negatived either expressly or by necessary implication by the judgment or decree of the Reference Court or of the appellate court, the execution court will have necessarily to reject the claim for interest on solatium based on Sunder(Supra) on the ground that the execution court cannot go behind the decree.
But if the award of the Reference Court or that of the appellate court does not specifically refer to the question of interest on solatium or in cases where claim had not been made and rejected either expressly or impliedly by the Reference Court or the appellate court, and merely interest on compensation is awarded, then it would be open to the execution court to apply the ratio of Sunder(supra) and say that the compensation awarded includes solatium and in such an event interest on the amount could be directed to be deposited in execution. Otherwise, not. We also clarify that such interest on solatium can be claimed only in pending executions and not in closed executions and the execution court will be entitled to permit its recovery from the date of the judgment in Sunder (Supra)(19-9-2001) and not for any prior period. We also clarify that this will not entail any reappropriation or fresh appropriation by the decree-holder. This we have indicated by way of clarification also in exercise of our power under Articles 141 and 142 of the Constitution of India with a view to avoid multiplicity of litigation on this question."
The aforesaid principle has also been followed by the Apex Court in Chhanga Singh and Another vs. Union of India and Another (2012) 5 SCC 763.
For the aforesaid legal proposition of law, we are of the opinion that the reference Court has rightly awarded solatium @ 30% while passing the impugned award. Therefore, the plea raised by the appellants in this regard is also not sustainable.
So far as plea of the appellant that reference court erred in enhancing the compensation, it is well settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, uses to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like water, electricity, possibility of their further extension, whether near about town is developing or has prospect of development have to be taken into consideration.
From perusal of the impugned award, it reflects that the Reference Court, while enhancing the compensation, had taken into consideration the sale deed executed in the locality and on placing reliance upon the sale deed (paper No. 53C), which was executed in between the issue of notification under Sections 4 and 6 of the L.A. Act, the Reference Court came to the conclusion that claimants are entitled to get Rs.1,98,181/- as compensation.
In Administrator General of West Bengal v. Collector, Varanasi : [1988] 2 SCR 1025 referring to earlier decisions has held that prices fetched for small plots cannot form basis for valuation of large tracts of land as the two are not comparable properties. Para 12 of the said judgment reads as under :--
"It is trite proposition that prices fetched for small plots cannot form safe bases for valuation of large tracts of land as the two are not comparable properties. (See Collector of Lakhimpur v. B.C. Dutta AIR 1971 SC 2015 : Mirza Naushervan Khan v. Collector (Land Acquisition), Hyderabad: [1975] 2 SCR 184 : Padma Uppal v. State of Punjab : [1977] 1 SCR 329): Smt. Kaushlya Devi Bogra v. Land Acquisition Officer, Aurangabad : [1984] 2 SCR 900. The principle that evidence of market value of sales of small, developed plots is not a safe guide in valuing large extents of land has to be understood in its property perspective. The principle requires that prices fetched for small developed plots cannot directly be adopted in valuing large extents. However, if it is shown that the large extent to be valued does not admit of and is ripe for use for building purposes; that building lots that could be laid out on the land would be good selling propositions and that valuation on the basis of the method of hypothetical lay out could with justification be adopted, then in valuing such small laid out sites the valuation indicated by sale of comparable small sites in the area at or about the time of the notification would be relevant. In such a case, necessary deductions for the extent of land required for the formation of roads and other civil amenities; expenses or development of the sites by laying out roads, drains, sewers, water and electricity lines, and the interest of the cut lays for the period of deferment of the realization of the price; the profits on the venture etc. are to be made. In Sahib Singh Kalha v. Amritsar Improvement Trust: AIR 1982 SC 940, this Court indicated that deductions for land required for roads and other developmental expenses can, together, come up to as much as 53 per cent. But the prices fetched for small plots cannot directly be applied in the case of large areas, for the reason that the former reflects the 'retail' price of the land the latter the 'wholesale' price."
In K. Vasundara Devi v. Revenue Divisional Officer (IAO) : AIR 1995 SC 2481, the Apex Court reiterated that when genuine and reliable sale deeds of small extents were considered to determine market value, the same will not form sole basis to determine market value of large tracts of land. Sufficient deduction should be made to arrive at a just and fair market value of large tracts of land.
In Special Land Acquisition Officer, Bangalore v. V.T. Velu and Ors. [1996] 1 SCR 566, the Apex Court has held that at least 1/3 of the land acquired is to be set apart for road purpose, developmental purpose and other civic amenities. It is also observed, "the mere fact that there is a connection road to the land, by itself is not a correct principle of law in refusing to deduct towards development charges".
In U.P. Jal Nigam, Lucknow through its Chairman and Anr. v. Kalra Properties (P) Ltd. Lucknow and Ors. [1996] 1 SCR 683, the Apex Court has stated thus:-
"Therefore, it should be determined only on the basis of yardage. If the principle of determination of compensation on yardage basis is adopted, it is equally settled law that at least 1/3rd of the land required should be deducted towards developmental purposes, namely, providing roads, electricity, drainage facilities and other betterment development."
In U.P. Avas Evam Vikas Parishad v. Jainul Islam and Anr. [1998] 1 SCR 254, the Apex Court upheld the deduction of 1/3 of the price towards cost of development for the housing scheme involving construction of roads and other amenities.
It is well-settled that in respect of agricultural land or developed land which has potential value for housing or commercial purposes, normally 1/3 amount of compensation has to be deducted out of the amount of compensation payable on the acquired land subject to certain variations depending on its nature, location, extent of expenditure involved for development and the area required for roads and other civic amenities to develop the land so as to make the plots for the residential or commercial purposes. A land may be plain or uneven, the soil of the land may be soft or hard bearing on the foundation for the purpose of making construction; may be the land is situated in the midst of a developed area all around but that land may have a hillock or may be low-lying or may be having deep ditches. So the amount of expenses that may be incurred in developing the area also varies. A claimant who claims that his land is fully developed and nothing more is required to be done for developmental purposes, must show on the basis of evidence that it is such a land and it is so located. In the absence of such evidence, merely saying that area adjoining his land is developed area, is not enough particularly when the extent of the acquired land is large and even if a small portion of the land is abutting the main road in the developed area, does not give the land character of a developed area. However, in cases of some land where there are certain advantages by virtue of the developed area around, may help in reducing the percentage of but to be applied, as the development charges required may be less on that account. There may be various factual factors which may have to be taken into consideration while applying the cut in payment of compensation towards development charges may be in some cases it is more than 1/3 and in some cases less than 1/3. It must be remembered that there is difference between a developed area and an area having potential value, which is yet to be developed. The fact that an area is developed or adjacent to a developed area will not ipso facto make every laid situated in the area also developed to be valued as a building site or plot, particularly when vast tracts are acquired, as in this case, for development purpose.
In the instant case, land in question, which was subjected to the acquisition proceedings, was large chunk of land but it comprises of eight co-sharers/farmers and on equal distribution among them in each share, area comes to two and half bighas, which could not be said to be a large chunk of land.
On facts and in the light of the legal position emerging from the various decisions referred to above, we are of the considered opinion that ends of justice would secure, if approximately 10% on the awarded compensation be deducted. That being so, we can now safely hold that awarded amount i.e. 1,98,181/- is on higher side because the reference court had not taken into consideration that the large area of chak land was acquired while re-determining the compensation though the land in question, which was acquired, appears to be small. Thus, we are of the considered opinion that the claimants are entitled to get Rs.1,80,000/- per bigha.
For the reasons aforesaid, the impugned judgment and award is modified to the extent that the claimants are entitled to get compensation Rs.1,80,000/- per bigha, instead of Rs.1,98,181 per bigha. However, the claimants are entitled for solatium, interest and other payments as directed by the Reference Court in the impugned order. The amount of compensation already paid to the claimants shall be deducted from the admissible amount.
All the aforesaid First Appeals are allowed partly. Under the facts and circumstances of the case, there is no order as to costs.
Order Date : 7.10.2014 Ajit/-