IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2705 OF 2010 [Arising out of Special Leave Petition (C) No.29135/2008]

G. Prema … Appellant

Vs.

The Special Tahsildar, Tirupattur … Respondent WITH

CIVIL APPEAL NO. 2707 OF  2010 [Arising out of Special Leave Petition (C) No.30599/2008]

K. Alliammal …. Appellant

Vs.

The Special Tahsildar, Tirupattur …Respondent

J U D G M E N T

R. V. RAVEENDRAN,  J.

Leave granted.

Survey  Nos.59/3  and  59/1  of  Jolarpettai  village,  Tirupattur  Taluk,  

measuring 1.43 acres and 5.07 acres belonging to the respective appellant in  

the  two  appeals  (along  with  another  0.27  acre)  were  acquired   for  the  

purpose  of  providing  house  sites  for  weaker  sections,  in  pursuance  of  

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preliminary  notification  dated  7.6.1989.  The  Land  Acquisition  Officer  

determined the compensation for the said agricultural lands at Rs.30,000/-  

per acre by his award dated 22.4.1992.  

2. The  Reference  Court  by  its  judgment  and  award  dated  11.9.1995  

increased the compensation to Rs.4,17,600/- per acre. It relied on a sale deed  

Ex. A1 dated 23.12.1988 relating to sale of a plot of land measuring 2520 sq.  

ft. in  nearby Survey No.65/3 for a sale consideration of Rs.30,870/- which  

works out  to Rs.12.25 per sq.ft.  or Rs.533,610/- per acre.  The Reference  

Court  however  took  the  market  value  under  Ex.  A1  as  Rs.12  sq.ft.  or  

Rs.5220/- per cent and after deducting 1/4th (Rs.1044/-) thereof towards the  

cost  of  development,  arrived  at  the  market  value of  the acquired land at  

Rs.4,176/- per cent or Rs.4,17,600/- per acre.  

3. Feeling aggrieved, the State filed appeals before the High Court. The High  

Court was of the view that it would be more appropriate to rely upon Ex. A2  

dated 11.8.1986 which related to a sale of a land which was also the subject  

matter of the same acquisition. Under Ex.A2, one of the appellants (Prema)  

had  sold  land  measuring  15  cents  in  Sy.  No.59/3  for  Rs.18,750/-  which  

worked out to Rs.1,250 per cent or Rs.125,000/- per acre. As the sale was of  

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the year  1986 and the preliminary notification was of the year 1989, the  

High Court provided an increase of 10% per year, that is Rs.375/- for three  

years, and arrived at the market value as Rs.1,625/- per cent or Rs.162,500/-  

per acre. As a consequence, the High Court allowed the appeals in part and  

reduced the compensation from Rs.4,17,600/- to Rs.1,62,500/- per acre. The  

said judgment is under challenge in this case.

4. The appellants contended that the High Court committed an error in  

relying on Ex. A2 as it was nearly 3 years prior to the acquisition and there  

was a steep increase in the value of land during that period. They contended  

that Ex. A1 relating to Survey No.65/3 which was a nearby land, was more  

appropriate for determining compensation as it  was a sale on 23.12.1988,  

much  nearer  to  the  date  of  acquisition.  They  contended  that  the  

compensation  awarded  by  the  Reference  Court  ought  not  to  have  been  

interfered  by  the  High  Court.  Alternatively,  they  contended  that  even  if  

Ex. A2 had to be relied on, the price thereunder should have been increased  

cumulatively at least by 30% per annum. On the other hand, learned counsel  

for the respondent - state submitted that when a sale deed executed by one of  

the claimants relating to an acquired land was available, the High Court was  

justified  in  taking  note  of  that  transaction  (Ex.  A2  dated  11.8.1986)  in  

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preference to Ex. A1 dated 23.12.1988 which related to a land farther away.  

It was also submitted that while Ex. A2 relied on by the High Court relates  

to 15 cents of land whereas Ex. A1 relied on by the Reference Court was in  

regard to a small plot of developed land measuring hardly 2 cents that is  

2520  sq.ft.  and  therefore  Ex.  A2  dated  11.8.1986  was  rightly  preferred  

instead of Ex. A1 dated 23.12.1988. The respondent also contended that the  

increase  in  value  per  year  was  rightly  taken  as  10% and  that  being  the  

standard increase, should not be interfered with.

5. We are of the view that both the sale deeds are relevant. Ex. A1 is  

nearer in time and the plot though small was also near to the acquired lands.  

Ex. A2 relates to a part of the acquired lands nearly three years prior to the  

preliminary notification. We therefore propose to rely upon both the sale  

transactions by making appropriate adjustments.  

6. Ex.  A1 dated 23.12.1988 as noticed above,  is  in regard to a small  

developed land measuring 2520 sq.ft. which works out to Rs.12.25 per sq.ft.  

That the acquired lands are situated on the outskirts of Jolarpettai surrounded  

by developed areas (Jolarpettai is one of the main Railway Junctions under  

Southern  Railway).  The  land  was  acquired  for  making  housing  sites  for  

weaker sections which also shows their potential for development. However,  

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as what has been acquired is a larger tract of land and Ex. A1 related to a  

very small piece of land, we are of the view that a deduction of 60% towards  

development cost (that is deduction towards land to be set apart for roads,  

drains, parks etc., and the cost of development), would be appropriate. On  

deducting the 60% towards the development cost from Rs.533,610/- per acre  

(which is the value reflected by Ex. A1 dated 23.12.1988), the market value  

for a larger tract of land would be Rs.213,440/- per acre. If we take Ex. A2  

dated 11.8.1986 as the basis, as there is a gap of three years between the date  

of Ex. A2 and the date of preliminary notification, we have to work out the  

market price in 1989, by providing appropriate yearly increase. This Court in  

Sardar Joginder Singh v. State of U.P. [2008 (17) SCC 133] has held that in  

urban areas or lands with potential for development, a cumulative increase  

of 10% to 15% would be appropriate.  We are of the view that having regard  

to the situation and potential, providing a cumulative increase of 12% for 3  

years over the base rate of Rs.1250/- disclosed by Ex.A2 dated 11.8.1986  

would be appropriate.  If so done, the market price would work out to be  

Rs.1,756/- per cent or Rs.175,600/- per acre. By averaging the two prices,  

we get  a market  value of Rs.194,520/-  (rounded off to Rs.195,000/-) per  

acre.  We  accordingly  increase  the  value  of  land  from  Rs.162,500  to  

Rs.195,000/- per acre.

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7. We find that while the High Court awarded an additional amount at  

12% per annum from the date of  preliminary notification till  the date of  

passing  of  award  or  delivery  of  possession  whichever  was  earlier  and  

solatium  at  30%  under  section  23(2),  it  awarded  interest  only  on  the  

compensation plus additional amount. In regard to interest on the solatium  

amount, the High Court stated that as the matter was pending before the  

Supreme Court, depending upon the outcome, the claimants will be entitled  

to  claim  the  amount  before  the  Reference  Court.  This  Court  has  

subsequently held that interest is payable on the solatium also.  

8. In view of the above we allow these appeals in part as follows :

(a) The compensation for the land is increased from Rs.162,500 per  

acre to Rs.195,000 per acre.  

(b) The compensation awarded in regard to well and the structure is  

not disturbed.  

(c) The appellants will be entitled to additional amount @ 12% per  

annum on the market  value from the  date  of  notification under  

section 4(1) of the LA Act till the date of award of the Collector,  

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and  solatium  at  30%  of  the  market  value  and  interest  on  the  

aggregate including solatium @ 9% per annum for one year from  

the date of taking possession and 15% per annum thereafter till the  

deposit.  

(d) The respondent is permitted to draw back any amount deposited in  

excess of what is due as aforesaid. If the appellants have drawn  

any amount in excess of what is due to them, the respondent shall  

be entitled to recover the same.  

(e) Parties to bear their respective costs.

……………………..J. (R V Raveendran)

New Delhi; …………………….J. March  23, 2010. (K S Radhakrishnan)  

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