REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICITION

CIVIL APPEAL NOS._9198-9202 OF 2010

Dilawar Singh & Ors. etc. …Appellants

Versus

Union of India & Ors. …Respondents

With

Civil Appeal Nos. 9203/2010, 9204/2010,  9205-9209/2010 9210-9215/2010, 9216-9217/2010 and 9218-9219/2010

J U D G M E N T

T.S. THAKUR, J.

Two questions fall  for determination in these appeals  

that arise out of orders passed by the High Court of Punjab  

& Haryana at Chandigarh.  These are -  

1) Whether  award  of  solatium  and  interest  is  

permissible  even  in  cases  where  acquisition  of

land is made under Requisitioning and Acquisition  

of Immovable Property Act 1952;  and  

2) Whether  the  land  owners  were  entitled  to  

enhancement  of  compensation  beyond  Rs.200/-  

per marla determined by the learned Single Judge.

The questions arise in the following backdrop.   

A  large  extent  of  land  situate  in  the  outskirts  of  

Pathankot in the State of  Punjab and underlying different  

survey numbers was acquired for defence purposes under  

the  provisions  of  Requisitioning  and  Acquisition  of  

Immovable  Property  Act,  1952.  Failure  of  the  parties  to  

arrive at an agreement as to the amount of compensation  

payable to the expropriated owners of the land in question  

led  the  owners  to  seek  appointment  of  an  Arbitrator  for  

determination  of  the  amount  payable  to  them.  The  

Government did not respond to the said request for a long  

time  which  forced  the  land-owners  to  approach  the  High  

Court  of  Punjab and Haryana in a writ  petition seeking a  

mandamus  directing  the  Government  to  appoint  an  

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Arbitrator. It is only after the said petition was allowed and a  

mandamus  issued  that  the  Government  appointed  the  

District  Judge,  Gurdaspur  as  an  Arbitrator,  sixteen  years  

after the lands had been acquired. The Arbitrator recorded  

evidence  and  after  hearing  the  parties  came  to  the  

conclusion that the owners were entitled to compensation  

that  ranged  between  Rs.50/-  per  marla  (Rs.  1000/-  per  

kanal) for land relevant to Civil Appeal No.9216-9217/2010  

to Rs.200/- per marla for lands relevant to Civil No. 9198-

9202/2010. Solatium @ 30% and interest @ 9% for the first  

year and 15% for the subsequent years till payment of the  

amount of compensation to them was also held payable to  

the landowners. Aggrieved by the said award the Union of  

India appealed to the High Court, inter alia, contending that  

the Arbitrator was not justified in awarding nor was there  

any provision for granting solatium and interest under the  

Act aforementioned.  The land-owners also challenged the  

award  made  by  the  Arbitrator  by  filing  cross-objections  

before the High Court in which they prayed for enhancement  

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of compensation payable to them to Rs.500/- per marla.  By  

a common judgment impugned in these appeals the High  

Court has dismissed the appeals filed by the Union of India.  

The cross-objections filed by the owners were also dismissed  

by separate orders unsupported by any reasons for denying  

the enhancement  prayed for  by  them.  Relying upon the  

decision in Jagdish Prasad v. The Competent Authority,  

the High Court held that award of compensation @ Rs.150/-  

per marla by the Arbitrator was justified on a uniform basis  

for all  kinds of lands.  The High Court overlooked the fact  

that in some cases the compensation awarded was Rs.50/-  

per marla while in some others the same was awarded @  

Rs.200/-  per  marla.   The  High  Court  also  noticed  that  

compensation at the same rate had been granted to owners  

of land in village Nalunga which award had been affirmed by  

the High Court in LPA 721 of 1987 filed by the Union of India  

and decided on 3rd September, 1987.             

The High Court also came to the conclusion that award  

of solatium and interest was justified having regard to the  

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delay on the part of Government in appointing an Arbitrator.  

Reliance was placed by the High Court on the decision of this  

Court in  Union of India v.  Hari Krishan Khosla (Dead)  

by LRs. 1993 Supp. (2) SCC 149. The High Court, however,  

modified the order to the extent that instead of describing  

the amount as solatium and interest the same was described  

as compensation for the lands acquired by the Government.  

Both the parties have come up in appeal against the above  

order.  While the appeals filed by the Union of India call in  

question the correctness of the view taken by the High Court  

in regard to solatium and interest, the cross appeals filed by  

the owners assail  the correctness of the orders passed by  

the  High  Court  whereby  cross-objections  seeking  

enhancement  of  the amount  of  compensation  to  Rs.500/-  

per marla have been rejected by non-speaking orders.

      It  is  common  ground  that  the  provisions  of  the  

Requisitioning and Acquisition  of  Immovable  Property  Act,  

1952 do not make any provision for the grant of solatium or  

interest to the expropriated landowners.  The absence of any  

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such provision in the said Act was in fact made a basis for a  

challenge  to  the  constitutional  validity  of  the  enactment  

which was repelled by this Court in Union of India v. Hari  

Krishan Khosla 1993 (Supp) 2 SCC 149. This Court pointed  

out  that  any comparison between acquisition made under  

the  Requisitioning  and  Acquisition  of  Immovable  Property  

Act,  1952 with  that  made under  the Land Acquisition Act  

would be odious in view of the dissimilarities between the  

two enactments.  That decision was followed in subsequent  

pronouncements of this Court in Union of India v. Chajju  

Ram 2003 (5) SCC 568 where a similar attack was mounted  

against the constitutional  validity of  Defence of  India Act,  

1971 but repelled by this Court relying upon the decision in  

Hari Krishan Khosla.  What is noteworthy is that  in both  

these matters  this Court had made a distinction between  

cases  in  which  there  was  inordinate  delay  in  the  

appointment of an Arbitrator and consequent delay in the  

determination of the amount of compensation payable to the  

owners and other case where there was no such delay.  In  

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paragraph 79 of the judgment of this Court in Hari Krishan  

Khosla, this Court observed:

“This  is  a  case  in  which  for  16  years  no  arbitrator was appointed. We think it is just  and proper to apply the principle laid down in  Harbans Singh Shanni Devi v. Union of India  (Civil  Appeal  Nos.  470  and  471  of  1985,  disposed  of  by  this  Court  on  February  11,  1985). The Court held as under:

“Having regard to the peculiar facts and  circumstances  of  the  present  case  and  particularly  in  view  of  the  fact  that  the  appointment of the arbitrator was not made  by  the  Union  of  India  for  a  period  of  16  years,  we  think  this  is  a  fit  case  in  which  solatium at  the rate  of  30 per  cent  of  the  amount of compensation and interest at the  rate  of  9  per  cent  per  annum  should  be  awarded  to  the  appellants.  We are  making  this order having regard to the fact that the  law has in the meanwhile been amended with  a view to providing solatium at the rate of 30  per cent and interest at the rate of 9 per cent  per annum.”

Even in  Union of India  v. Chajju Ram (supra), this  

Court noted the delay in the appointment of an Arbitrator  

and directed that the amount of interest and solatium paid  

to the land owners decades back shall not be recovered from  

the land owners.  This Court observed:

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“In  these  cases  also,  it  is  said  that  the  arbitrators  have  not  yet  been  appointed  despite the demand made in this behalf by  the respondents. The amount of solatium at  the rate of 15% per annum and the interest  thereupon  had  been  paid  in  the  early  eighties when the Punjab and Haryana High  Court  declared  the  said  Act  ultra  vires  Article 14 of the Constitution of India.

In the peculiar  fact situation obtaining in  these cases and inasmuch as the amounts  sought  to  be  recovered  are  small  which  were paid to the respondents decades back,  we are of the opinion that interest of justice  shall  be met if  the appellants are directed  not to recover the amount of compensation  from  the  respondents  pursuant  to  or  in  furtherance of this judgment. However, we  hasten to add that this direction shall not be  treated as a precedent.”

      The above decisions were then followed by this Court in  

Prabhu Dayal  and Others  v. Union of  India  1995 (4)  

SCC 221.  That was also a case where the appointment of  

Arbitrator was delayed by 22 years.  This Court relying upon  

the decision in  Hari Krishan Khosla and Harbans Singh  

v. Union of India, C.A. Nos. 470 & 471 of 1985 disposed  

of on 11th February 1985, observed:

“It is next contended that the appellants are  entitled to the solatium though in law they  are  not  entitled  but  in  equity  they  are  entitled to the solatium for the reason that  

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for 22 years arbitrator was not appointed to  determine the market value. In support they  relied  upon  the  judgment  of  this  Court  in  Union of India v. Hari Krishan Khosla. Therein  this  Court  relied  upon another  judgment  in  Harbans  Singh  v.  Union  of  India.  In  that  judgment this Court said that having regard  to the peculiar facts and circumstances of the  present case and in view of the fact that the  appointment of the arbitrator was not made  by the Union of India for period of 16 years,  this  Court  considered  in  equity  to  give  solatium at  the rate  of  30 per  cent  of  the  amount of compensation and interest at the  rate  of  9  per  cent  per  annum  should  be  awarded  to  the  appellants  therein.  In  this  case,  the  question  of  appointing  the  arbitrator would arise only when the market  value offered was rejected by the claimants.  The offer was made and rejected on 13-10- 1961 and the arbitrator came to appoint on  22-9-1966  after  five  years.  Under  these  circumstances, the claimants are entitled to  solatium at  the rate of  15 per cent on the  market  value.  The  appellants  did  not  challenge  the  rate  of  interest  granted  at  6  per cent. Accordingly they are also entitled to  the  interest  at  the  rate  of  6  per  cent  per  annum. The appeals are accordingly allowed.  The  appellants  are  entitled  to  the  relief  as  stated above. No costs.”

We may at this stage to refer to a recent decision of  

this Court in Union of India v. Parmal Singh and Others  

2009 (1) SCC  618 where the question  whether solatium  

and  interest  could  be  awarded  to  the  expropriated  land  

owners  under  the   Requisitioning  and  Acquisition  of  

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Immovable Property Act,  1952 was once again examined.  

Relying upon the decision of this Court in  Satinder Singh  

v. Umrao Singh AIR 1961 SC 908, Union of India v. Hari  

Krishan  Khosla  (supra)  and  Union  of  India  v. Chajju  

Ram 2003 (5) SCC 568 and the English decision in  Swift  

and  Co.  v. Board  of  Trade  1925  AC  520(HL)  and  

Inglewood  Pulp  and  Paper  Co.  v. New  Brunswick  

Electric  Power  Commission  1928  AC  492,  this  Court  

upheld the award of interest in favour of the landowners.  

This Court said:

“When  a  property  is  acquired,  and  law  provides for payment of compensation to be  determined  in  the  manner  specified,  ordinarily compensation shall have to be paid  at the time of taking possession in pursuance  of  acquisition.  By  applying  equitable  principles,  the  courts  have  always  awarded  interest  on  the  delayed  payment  of  compensation in regard to acquisition of any  property.  When  a  requisitioned  property  is  acquired,  as  possession  had  already  been  taken from the landholder, the compensation  becomes  payable  from  the  date  of  acquisition. When a property is requisitioned,  the landowner is compensated for the denial  of possession by paying compensation based  on the rent it would have fetched had it not  been requisitioned. But once the property is  acquired,  the  rent  is  stopped,  as  compensation  based  on  open  market  value  becomes  payable  against  acquisition.  

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Therefore, while interest is payable, it is not  awarded from the date of requisition (taking  over of possession) but only from the date of  acquisition.  This  principle  has  been  recognised  and  applied  by  the  courts  consistently.”

It  is  noteworthy  that the  High  Court  of  Punjab  and  

Haryana has in Union of India v. Inder Singh and Anr. in  

LPA No. 1918 of 1989 and connected matters upheld grant  

of  solatium and interest  in  regard to a similar  acquisition  

made in  terms of   a  notification  issued in  January  1970.  

While  doing  so  the  High  Court  placed  reliance  upon  its  

decision in Shankar Singh and Others v. Union of India  

1988  (1)  PLR  163  Mr.  Subramanium,  learned  Solicitor  

General fairly conceded that no appeal has been preferred  

by  the  Union  of  India  against  the  decision  in  Shankar  

Singh’s  case (supra) or that delivered in Union of India v.  

Inder Singh and Anr (supra).  In that view of the matter  

therefore and having regard to the fact that there was an  

inordinate  delay  of  16  years  in  the  appointment  of  an  

Arbitrator  in  the present  cases,  we have  no  hesitation  in  

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holding  that  the  principle  laid  down  by  this  Court  in  the  

decisions referred to above would entitle the land owners to  

the  benefit  of  solatium  and  interest  especially  when  the  

owners who have lost land in similar circumstances and for  

the same purpose have been given such a benefit.   

      That brings us to the question whether the land-owners  

are  entitled  to  claim any  enhancement  in  the  amount  of  

compensation determined in these cases. In Union of India  

etc. v.  Inder Singh and Anr. (LPA No.1918 of 1989) and  

connected  matters  to  which  we  have  referred  earlier  the  

High Court has upheld the enhancement of compensation to  

Rs.350/- per marla.  The High Court was in that case dealing  

with  a  similar  question  arising  out  of  the  very  same  

acquisition process.  Relying upon its decision in  Shanker  

Singh and Ors. v.  Union of India 1988 (1) PLR 163, a  

Single  Bench  of  the  High  Court  in  Inder  Singh’s  case  

(supra)  enhanced  the  compensation  payable  to  the  land-

owners to Rs.350/- per marla.  Five appeals were preferred  

before the Division Bench against the said order out of which  

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two appeals were dismissed by separate orders of the Court  

while the third was dismissed for non-prosecution. The result  

was that out of five appeals challenging the order passed by  

the Single Judge awards in favour of the land-owners in the  

case of three dismissed appeals attained finality entitling the  

land-owners respondents in those appeals to compensation  

@ Rs.350/- per marla. The refusal of a similar relief in the  

remaining  cases  was  not,  therefore,  considered  just  and  

equitable  when  there  were  no  distinguishing  features  to  

justify such a refusal.  The High Court also found that the  

decision  in  Shanker  Singh’ case  (supra)  was  squarely  

applicable in the case before it on account of the proximity  

of  the  acquisitions  in  point  of  time.  The  notification  in  

Shanker Singh’ case (supra) was issued on 6th March, 1970  

whereas that in Inder Singh’ case (supra) was issued on 9th  

January, 1970.  The amount of compensation determined in  

Shanker Singh’s case (supra) was therefore found by the  

High  Court  to  be  relevant  for  award  of  compensation  in  

Inder Singh’s case (supra) also.  

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      In the present batch of cases except the case the  

notification  for  acquisition  was  issued  in  February  1970  

which is proximate in point of time to those issued in the  

Shanker  Singh and  Inder  Singh’s cases  (supra).  The  

notification in  Union of India  v. Mohinder Singh (Civil  

Appeal  No.  9204/2010) was  issued  on  12.5.1964  and  

published on 12.6.1964.  That  apart  the  lands  in  question  

were all acquired for the very same purpose and are situated  

on  the  outskirts  of  a  growing  town  like  Pathankot.   The  

growing non-agriculture potential of such lands is also not in  

serious dispute.  The High Court has failed to notice all these  

aspects  apparently  because  the  decisions  in  Shanker  

Singh’s  case  and  that  delivered  in  Inder  Singh’s case  

(supra)  were  handed  down  subsequent  to  the  impugned  

order. Suffice it to say that on the material available before  

us  we  see  no  reason  why  the  amount  of  compensation  

payable  to  the  landowners  appellants  in  these  appeals  

should  also  not  be  enhanced  to  Rs.350/-  per  marla  with  

proportionate  benefits  towards  solatium  and  interest  as  

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awarded by the Arbitrator and upheld by the High Court in  

those cases and in  similar  other  cases to which we have  

referred  in  the  earlier  part  of  this  order.  In  so  far  as  

Mohinder Singh’s  case (supra)  is  concerned,  the appeal  

has  been  filed  by  the  Union  of  India  against  grant  of  

solatium  and  interest.   No  appeal  has  been  filed  by  the  

owners  in  that  case  for  enhancement  of  the  amount  of  

compensation. Even otherwise in the absence of any cogent  

evidence to justify any such enhancement, there is no room  

for directing payment of a large amount of compensation.   

      In the result, we allow Civil Appeals Nos.9198-9202/  

2010  and  Civil  Appeals  Nos.9218-9219/2010  filed  by  the  

owners and modify the award made by the Arbitrator to the  

extent that instead of Rs.200/- per marla, the owners shall  

be entitled to 350/- per marla towards compensation with  

proportionate benefits like solatium and interest on the said  

amount.  The  appellants-owners  shall  also  be  entitled  to  

proportionate costs in this Court and the Courts below.  

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Civil  Appeals  Nos.9203/2010,  9204/2010,  9205-

9209/2010, 9210-9215/2010 and 9216-9217/2010 filed by  

Union of India, however, fail and are dismissed leaving the  

parties to bear their own costs in these appeals.  

……………………………J. (MARKANDEY KATJU)

……………………………J. (T.S. THAKUR)

New Delhi October 26, 2010

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