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PETITIONER: ISHWARLAL PREMCHAND SHAH & ORS. ETC. ETC.

       Vs.

RESPONDENT: STATE OF GUJARAT & ORS.

DATE OF JUDGMENT:       15/03/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. NANAVATI G.T. (J)

CITATION:  1996 AIR 1616            1996 SCC  (4) 174  JT 1996 (4)   208        1996 SCALE  (3)495

ACT:

HEADNOTE:

JUDGMENT:                             with              CIVIL APPEAL NOS. 6897-99 OF 1996.  (Arising out of SLP (C) Nos.19041/94, 19043/94, 19049/94).                          O R D E R      Leave granted.      We have heard the counsel on both sides.      Notification under Section 4(1) of the Land Acquisition Act 1 of 1894 (for short, the ’Act’) was published on August 2, 1984  acquiring the  lands situated  in village  Sarigam, District Bulsar  in Gujarat  State for  industrial  purpose. Possession also  was taken after dispensing with the enquiry under Section  5-A. It  is not  necessary to  dilate on  the proceedings  taken   earlier  under   Article  226   of  the Constitution.  Suffice   it  to  state  that  there  was  an agreement between  the parties  that an  award could be made under Section  11(2) of  the Act  pursuant to which the Land Acquisition Officer  on June 4, 1991 made the award in terms of the  agreement. The  appellant challenged the correctness of the award by filing the writ petition which was dismissed by the  High Court by the impugned order dated September 10, 1993. Thus these appeals by special leave.      This Court  by order  dated February  28,  1994  issued notice confined  to the  question whether the appellants are entitled to  solatium, interest  and additional amount under Sections 23(2),  28 and 23 [1-A] of the Act. The respondents have filed  their counter-affidavit  contending that in view of the  agreements entered  by the  appellants on January 2, 1981 and  subsequent agreement  dated March  8, 1985,  which have been  filed as sample agreements before this Court, the appellants are  not entitled  to the  payment  of  interest, solatium and additional amounts under the Act.      Shri R.F. Nariman, learned senior counsel appearing for the   appellants,  contended that  the award  passed by  the Collector is not in conformity with Section 11(2) of the Act in as  much as  the agreements  were not executed before the

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Collector and  they were not in the prescribed form. He drew our attention  to Form  No.14, prescribed  by the  Rules and submitted that  as desclosed  by the  Form itself,  such  an agreement has  to be  executed by  the owner  of the land in presence of  the Land  Acquisition Officer  and  has  to  be signed by the Land Acquisition Officer. In the present case, the agreements  executed in  1985 were between the owners of the land and GIDC for whose benefit the lands were acquired. They were  not signed  in presence  of the  Land Acquisition Officer  nor  did  the  Land  Acquisition  Officer  put  his signature  thereon.  Therefore,  the  award  passed  by  the Collector cannot be said to be an award under Section 11 (2) of the  Act and,  therefore, the  appellants are entitled to payment  of   solatium,  interest  and  additional  benefits payable under  the Act. We do not find any substance in this connection.      In this  case, the  agreements were  between the owners and the GIDC for whose benefit the lands were acquired. Even before the  notification under  Section 4  was  issued,  the owners and  the GIDC  had entered  into an agreement whereby the owners had agreed to part with possession of their lands so as to enable GIDC to establish Udyog Nagar thereon. Under the  said  agreements,  the  GIDC  was  permitted  to  enjoy continuous possession  of those  lands till  the process  of acquisition  under  the  Land  Acquisition  Act  was  to  be completed. While  entering into these agreements, the owners had agreed  to accept  compensation @  Rs.6,100/- per  acre. Thereafter, Section  4, notification was published on August 2, 1984.  While the proceedings were pending before the Land Acquisition Officer,  the owners  and GIDC again in the year 1985  entered   into  separate  agreements,  whereunder  the Corporation agreed  to pay  and the  owners agreed to accept compensation @ Rs.22,857/- per hectare inclusive of solatium and  additional   benefits  payable  under  the  Act.  These agreements duly  signed were presented before the Collector. On being  satisfied about  the voluntary  nature of the said agreements, the  Collector passed an award in terms of those agreements. Under  these circumstances,  it cannot  be  said that the  essential requirements of sub-section 2 of Section 11, as  applicable in the State of Gujarat, was not complied with. Moreover,  Form No.14 as such would not be relevant in a case  where  the  agreement  is  between  the  owners  and interested persons  on the  one hand  and the body for which the land  is being  acquired on  the other  hand. Form No.14 would apply  to a  case where  the owners  and  the  persons interested in  the land  appear  before  the  Collector  and express their  willingness to  accept an  agreed  amount  as compensation. In such cases, the agreement is required to be executed in  the  prescribed  Form  No.14.  Therefore,  even though in  the present  case the  agreements were not in the prescribed form,  there being  no prescribed form for a case like this, the award cannot be said to be illegal or void.      The owners  have agreed  in 1985 as      under:      "This agreement  is being  done  in      pursuance of  the consent agreement      that  has   been  arrived   at   on      27.12.1980 between  Shri Hitendra @      Gautam  Prem  Shankar  Oza  of  the      first   part    and   the   Gujarat      Industrial Development  Corporation      of the  second part since the price      of the  land that  has  been  given      under the  said agreement  has been      fixed at Rs.22,857/- (Rupees twenth

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    two  thousand   eight  hundred  and      fifty  seven   only)  per   hectare      inclusive    of     solatium    and      additional land compensation by way      of   its    consent   price.   This      agreement is  thus being  done  for      that limited  purpose. The  date of      possession  and   other  terms  and      conditions   mentioned    in    the      agreement done  on  27.12.80  shall      remain the same."      It is  true that on determination of compensation under sub-section (i) for the land acquired, Section 23(2) enjoins to award,  in addition  to the market value, 30% solatium in consideration of  compulsory nature of acquisition. Equally, the Parliament  having taken  notice of the inordinate delay in making the award by the Land Acquisition Officer from the date of  notification  published  under  Section  4(1)  till passing the  award under  Section 11,  to offset  the  price peggad  during   the  interregnum,   Section   23(1-A)   was introduced to  award an amount calculated @ 12% per annum on such market  value, in  addition to  the market value of the land, for  the period commencing on and from the date of the publication of  Section 4(1)  notification to  the  date  of award of  the Collector  or date of taking possession of the land whichever  is earlier.  Under Section  28, interest was directed to  be paid  on the excess compensation at the rate specified therein  from the date of taking possession of the land to  the date  of deposit  into  court  of  such  excess compensation. These  three components are in addition to the compensation determined under sub-section (1) of Section 23. They intended  to operate in different perspectives. One for compulsory acquisition,  the other for the delay on the part of the  Land Acquisition Officer in making the award and the third one  for deprivation of the enjoyment of the land from the date  of taking  possession till  determination  of  the compensation. The  3  components  are  in  addition  to  the determination of  market  value  under  sub-section  (1)  of Section 23.  They  are  not  integral  to  determination  of compensation under  sub-section (1)  of Section  23  but  in addition to,  for the circumstances enumerated hereinbefore. In a  private sale  between a  willing vendor  and a willing vendee, parties would arrive at consensus to pay and receive consolidated consideration which would form the market value of the  land conveyed  to the  vendee. For  public  purpose, compulsory acquisition  under the  Act gives  absolute title under Section  16 free  from all encumbrances. Determination of the compensation would be done under Section 23(1) on the basis of  market value  prevailing as  on the  date  of  the publication of  the  notification  under  Section  4(1).  It would, therefore,  be open  to the  parties to  enter into a contract under  Section  11(2),  without  the  necessity  to determine compansation under Section 23(1) and would receive market value  at the  rates  incorporated  in  the  contract signed under  Section 11  (2) in  which event the award need not be in Form 14.      This Court  in State  of Gujarat  & Ors. v. Daya Shamji Bhai &  Ors. [(1995)  5 SCC  746] had considered the similar contentions and held that once the parties have agreed under Section 11(2)  of the  Act, the Land Acquisition Officer has power under Section 11(2) to pass the award in terms thereof and that  the award  need not  contain payment  of interest, solatium and additional amount unless it is also part of the contract between  the parties. The same ratio applies to the facts in  this case.  In view  of the  above clauses  in the

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agreements the appellants are not entitled to the payment of additional  amounts   by  way   of  solatium,  interest  and additional amount under the provisions of the Act.      The appeals  are  accordingly  dismissed,  but  in  the circumstances, without costs.