NADIRSHA SHAPURJI PATEL (D) BY LRS. &ORS Vs DEPUTY COLLECTOR & LA
Bench: MUKUNDAKAM SHARMA,ANIL R. DAVE, , ,
Case number: C.A. No.-001058-001060 / 2004
Diary number: 19264 / 2001
Advocates: RUSTOM B. HATHIKHANAWALA Vs
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REPORTABLE IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 1058-1060 OF 2004
NADIRSHA SHAPURJI PATEL (D) BY LRS. & ORS. …. Appellants
Versus
DEPUTY COLLECTOR & LA & ANR. …. Respondents
WITH
CIVIL APPEAL NOS. 1061-1065 OF 2004
WITH
CIVIL APPEAL NOS. 1066-1078 OF 2004
WITH
CIVIL APPEAL NO. 1080 OF 2004
JUDGMENT
Dr. MUKUNDAKAM SHARMA, J.
1. By this common judgment and order we propose to
dispose of all the aforesaid appeals which are connected
and interrelated, as would be indicated from the facts
delineated hereinafter.
2.By issuing a notification under Section 4 of the Land
Acquisition Act, 1894 [hereinafter referred to as “the Act”]
on 21.02.1986, land connected with the present appeals,
situated at Village Mora, Taluka Choriyasi, District Surat
in the State of Gujarat, was proposed to be acquired for a
public purpose, viz., setting up a Gas Based Thermal
Power Project belonging to National Thermal Power
Corporation [for short ‘NTPC’]. Subsequent to the
aforesaid notification, a declaration under Section 6 of the
Act was also issued by the State Government, by issuing a
notification dated 29.04.1986 in respect of the said land.
Possession of the said land was also taken over on
18.06.1986 and an award was passed by the Land
Acquisition Officer, determining market value of the land
and awarding compensation at ` 3.50 per square meter for
the acquired land.
3.Aggrieved by the compensation awarded by the Land
Acquisition Officer, the appellants-claimants filed
applications under Section 18 of the Act seeking reference
to the Court. Consequent to the said prayer, reference was
made to the District Court. The Reference Court allowed
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the parties to present their evidence and on conclusion of
the trial, passed a judgment and order dated 25.07.1997
enhancing the market value of the land and determining
the compensation at ` 20 per square meter for the
acquired land. It is also to be noted at this stage that the
Reference Court further awarded interest at the rate of 9
per cent per annum for the first year of taking over the
possession of the land in the year 1986, and at 15 per
cent thereafter. The Reference Court also passed an order
expressly recording that the interest should not be
calculated on solatium.
4.Aggrieved by the aforesaid judgment and order passed
by the Reference Court, the appellants-claimants filed
appeals before the High Court under Section 54 of the Act
seeking enhancement of compensation. Cross-appeals
were also filed by the beneficiary, viz., NTPC. During the
pendency of the said appeals in the High Court, an
interim order was also passed in Civil Application by
staying payment of the enhanced amount of
compensation. Subsequently, when the appellants-
claimants filed applications, the order of stay was vacated
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and the land owners were permitted to withdraw the
entire amount deposited in Reference Court [inclusive of
cost and interest] without security in full and final
settlement of the claims.
5.The Division Bench of the High Court disposed of the
aforesaid appeals by the impugned common judgment
and order dated 15.09.2000 in which it partly allowed the
First Appeal Nos. 5388-5408 of 1997 filed by the
appellants-claimants and determined the market value of
the acquired land of Village Mora, Taluka Choriyasi,
District Surat on the relevant date, i.e., 21.02.1986, at the
rate of ` 22 per square meter. The High Court, however,
specifically ordered that no interest under Sections 28
and 34 of the Act on additional amount of compensation
received under Section 23(1-A) & Section 23(2) of the Act
would be paid to the claimants. By the same order, the
High Court dismissed the First Appeal Nos. 742-792 of
1998 filed by the respondents.
6.The appellants-claimants being aggrieved by the
aforesaid judgment and order passed by the High Court,
filed Special Leave Petitions in this Court in which notices
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were originally issued but subsequently, the delay in filing
the Special Leave Petition Nos. 21068-21070 of 2001 was
condoned and leave was granted. So far as the other
connected Special Leave Petitions were concerned, in
those petitions also, leave was granted and accordingly all
the petitions have been now registered as appeals.
7.We heard learned counsel appearing for the parties
when the matters were placed before us for hearing their
respective arguments. We also perused the entire records
of the case with the assistance of the counsel appearing
for the parties to which reference shall be made during
the course of our discussion and findings recorded by us.
8.The Chief Project Manager [GTPP], Delhi, made a
proposal on 16.12.1985 to the State Government for
acquiring lands situated at the Village Mora, Taluka
Choriyasi, District Surat for the purpose of Gas Base
Thermal Power Project for NTPC. The said proposal was
scrutinized by the State Government and upon being
satisfied by the same, a preliminary notification to acquire
lands of the appellants-claimants was issued under
Section 4(1) of the Act which was published in the
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Government Gazette on 21.02.1986. The Deputy
Collector, Choriyasi was appointed as Land Acquisition
Officer for the aforesaid acquisition proceeding, who after
following usual procedure under Section 5 of the Act,
forwarded his report to the State Government as
contemplated by Section 5A(2) of the Act. Consequent
thereto, the State Government issued a declaration under
Section 6 of the Act which was published in the
Government Gazette on 29.04.1986. The appellants-
claimants thereafter appeared before the Land Acquisition
Officer and claimed compensation at the rate of ` 1,50,000
per acre. The Land Acquisition Officer, after considering
the records, passed his award dated 18.01.1988 by
dividing the acquired lands into three categories and
determining market value of the land in the following
manner: -
• Acquired lands situated at North of Surat-Hazira State Highway at the rate of ` 35,000 per hectare, i.e., ` 3.50 per square meter.
• Acquired lands situated towards South of Surat-Hazira State Highway at the rate of ` 32,000 per hectare, i.e., `3.20 per square meter.
• Acquired lands situated towards interior South of Surat-Hazira State Highway at the rate of ` 30,000 per hectare, i.e., ` 3 per square meter.
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The Land Acquisition Officer by his award determined the
market value of Kharab land, admeasuring 30 acre at the
rate of 36 square meter at the rate ` 1 per square meter.
9.As stated hereinbefore, reference cases were filed which
were registered as Land References Case Nos. 118-168 of
1988. All the said land reference cases were consolidated
and the parties led common evidences in the Reference
Case No. 140 of 1988. Reference Court enhanced the
market value of the land and determined the same at the
rate of ` 20 per square meter. The Reference Court also
ordered that additional compensation shall be paid to the
complainants with solatium at the rate of 30 per cent per
annum on the aforesaid enhanced compensation and also
held that the claimants would be entitled to get 12 per
cent additional market value from the date of the
notification under Section 4 of the Act, i.e., from
21.02.1986 till 16.06.1986. The claimants were also held
to be entitled to get the interest at the rate of 9 per cent
per annum for the first year of taking over of possession of
the land in the year 1986 and at the rate of 15 per cent
per annum thereafter, excluding the amount of solatium
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till the realization of the amount by the claimants. In the
said judgment, specific orders were made by the Reference
Court that no amount of interest shall be calculated on
the amount of solatium. Since some of the lands were
admittedly of new tenure lands, 5 per cent of the amount
of award was deducted for the new tenure lands.
10.Appeals were filed by both the appellants and the
respondents before the High Court. So far as the appeals
of the appellants-claimants are concerned, their appeals
were partly allowed by enhancing the market value of the
land and determining the same at the rate of ` 22 per
square meter. But the High Court did not grant interest
under Section 28 and 34 on additional amount of
compensation under Sections 23(1-A) and 23(2) of the Act
and held further that no interest shall also be paid on
solatium whereas the appeals filed by the NTPC were
dismissed in entirety.
11.The present appeals are registered as against the
aforesaid judgment and order of the High Court. Learned
counsel appearing on behalf of the appellants-claimants
primarily raised two issues during the course of hearing.
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The first submission of the counsel appearing for the
parties concerned the market value of the land as
determined by the courts below. According to them, in
terms of the documentary as also oral evidence on record,
the market value of the land should have been determined
at least at the rate of ` 33 per square meter. The next
contention of the counsel appearing for the appellants-
claimants was regarding entitlement of appellants to
payment of interest on additional amount of
compensation and solatium.
12.Let us first deal with the first issue which relates to
determination of the fair and reasonable market value of
the land. In order to appreciate the rival contentions of
the parties, as to whether the market value of the land
should be determined at ` 33 per square meter as
submitted by the counsel appearing for the appellants-
claimants or whether it should be determined at ` 22 per
square meter as held by the High Court, we have perused
various documentary evidence placed on record by the
parties. The appellants produced various sale instances
which were considered by the High Court as Exhibits 102-
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121 relating to Village Kawas. The said sale instances
were relied upon by the appellants and they were
executed between the years 1985-1988. The sale
instances evidenced in Exhibits 102, 103 and 104 were
found to have been executed prior to the date of issuance
of the notification under Section 4 of the Act, but at the
same time it must not be ignored that when the aforesaid
three sale instances took place, notification for the
establishment of the aforesaid Gas Project was already in
existence (which was issued in the year 1984). Therefore,
the aforesaid sale instances also cannot be said to be a
very safe guide for determining the market value of the
land. Besides, the said sale instances also relate to a very
small tract of land admeasuring only 58 square meter to
60 square meter. The said plots also concern non-
agricultural land. From the evidence adduced, it is also
established that the vendor in the aforesaid sale instances
had first converted agricultural lands into non-
agricultural lands and divided them into small plots with
a view to earn profits and sell the said plots to different
persons. Consequently, the aforesaid sale deeds cannot be
said to be a safe guide for the purpose of determination of
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the market value of the present lands. Therefore, we are of
the opinion that the High Court was justified in keeping
the said sale deeds out of its consideration.
13.The appellants have also placed reliance on sale deed
Exhibit No. 263 which was in respect of land admeasuring
750 square feet for a consideration of Rs. 9,999/-. The
evidence adduced indicates that the vendee of the said
sale deed was in dire need of accommodation and,
therefore, he purchased the same. That being the
consideration and since the said land is also a small piece
of land, the High Court and the Reference Court rightly
did not took the same into consideration.
14.Similarly, in so far as the sale deed Exhibit No. 144 is
concerned, the same relates to agricultural land of Survey
No. 523 admesauring 2 acre and 11 guntas situated at
village Ichhapore, which is a different village altogether.
The said sale deed also relates to a plot of land which was
adjacent to the vendees’ own agricultural land and the
agreement to sale was also not registered and produced
before the Reference Court. Besides, vendor and the
vendee in the said/same case are related to each other
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and, therefore, the aforesaid sale deed also could not have
been accepted by the High Court as reliable evidence on
the issue of determination of the market value of the land.
The Village Icchapore was also at a distance of two
kilometers from the acquired lands. There is no other
evidence in the nature of any sale deed from the same
Village Mora wherein the acquired land was situated. The
High Court held that the aforesaid sale price of Exhibit
No. 144 cannot be said to be the market value for the
acquired land for various reasons, viz., it was situated in a
different Village, and it relates to small portion of land
(since no prudent purchaser would have purchased large
extent of lands on the basis of sale of small land in open
market). The High Court, however, held that a deduction
of minimum 1/3rd from the price fixed for the lands
covered in Exhibit No. 144 towards development charges
might be applied to ascertain the market value of the
present acquired lands. The High Court also held that
Exhibit No. 144 has been executed 9 months after
issuance of the notification under Section 4 of the Act.
Having held thus, the High Court after applying the
formula for deduction of 1/3rd amount from the rate
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mentioned in Exhibit No. 144, i.e., ` 33 per square meter,
the High Court determined the market value of the
acquired land at ` 22 per square meter.
15.We may at this stage also add that the said figure of `
22 per square meter is the amount determined as market
value for lands of adjacent village Kawas by this Court in
Civil Appeal Nos. 11924-11934 of 1996 with respect of the
acquisition made by issuing notification under Section 4
of the Act on 15.12.1986.
16.The quality of acquired land is established from the
evidence on record, wherein it is stated that no
agricultural operations were carried out in the said land
and that only grass, which was used as fodder for cattle,
was grown in the said land. It could not be established by
the appellants-claimants that there was any crop of
wheat, cotton and jowar on the acquired lands. The only
evidence that has come to light is that some of the
claimants were carrying on the business of milk
distribution and they were keeping cattle and were
raiIsing grass on acquired land for providing fodder to the
cattle. The witnesses examined on behalf of the
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respondents, however, clearly stated that the acquired
lands were badly damaged due to flood waters as the
same were situated in low-lying area and having an
uneven level. Reliance was also placed on survey report
Exhibit No. 285 on behalf of the respondents which
indicates and describes the acquired lands as badly
damaged lands due to flooding of the river Tapti and the
entry of sea water. Paragraph 3.3 of the aforesaid survey
report also indicates that a number of nullhas existing in
the area get slightly topped due to tidal effect and as the
acquired land used to be flooded with water from the sea,
therefore, it was also not possible to raise any agricultural
crop except for growing grass in the said land. Another
witness, viz., Vimalchandra Jeshmal Kotari, examined on
behalf of the respondent, also deposed that acquired land
was uneven and water had stagnated on the same. He
also deposed that when he first visited the acquired land
in July, 1986 he even found it very difficult to walk on
certain portions of the land. He has clearly stated in his
evidence that the acquired land was low level land and
water from sea use to enter the land at the time of tide
and, therefore, water had stagnated on acquired lands.
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His evidence also establishes the fact that said leveling
work was required to be done in the acquired land and
that a total amount of ` 76,86,280 was spent only for
leveling the land. He also deposed that because of the
presence of sulphates and nitrates in the soil of acquired
lands, special precautions were required to be taken while
erecting the foundation of the project. It is well-
established that the expenditure was incurred solely by
the respondents in leveling the lands. The respondents
also too took special care in erecting the foundation of
thermal power station which was established there due to
availability of water, electricity and HPJ Gas pipeline.
17.Having considered the aforesaid evidence on record,
we are of the opinion that the market value of the
acquired land as determined by the High Court is just and
reasonable and the same could be accepted as reasonable
compensation for the land which was acquired by the
State Government for establishment of the aforesaid
thermal project. Therefore, the contentions of the counsel
appearing for the appellants for increase in the market
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value of the land are found to be without any basis and
the same are rejected.
18.On the second issue which was raised regarding the
payment of interest on solatium and additional amount of
compensation, reliance was placed by the counsel
appearing for the parties in the case of Sunder v. Union
of India reported at (2001) 7 SCC 211; Gurpreet Singh
v. Union of India reported at (2006) 8 SCC 457 and
Land Acquisition Officer & Asstt. Commissioner & Anr
v. Shivappa Mallappa Jigalur & Ors reported at JT 2010
(7) SC 475.
19.In the case of Sunder (supra), this Court in paragraph
23 has stated thus:-
“23….We make it clear that the compensation awarded would include not only the total sum arrived at as per sub- section (1) of Section 23 but the remaining sub-sections thereof as well. It is thus clear from Section 34 that the expression “awarded amount” would mean the amount of compensation worked out in accordance with the provisions contained in Section 23, including all the sub-sections thereof.”
In paragraph 24, the Court further held as follows:-
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“24. The proviso to Section 34 of the Act makes the position further clear. The proviso says that “if such compensation” is not paid within one year from the date of taking possession of the land, interest shall stand escalated to 15% per annum from the date of expiry of the said period of one year “on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry”. It is inconceivable that the solatium amount would attract only the escalated rate of interest from the expiry of one year and that there would be no interest on solatium during the preceding period. What the legislature intended was to make the aggregate amount under Section 23 of the Act to reach the hands of the person as and when the award is passed, at any rate as soon as he is deprived of the possession of his land. Any delay in making payment of the said sum should enable the party to have interest on the said sum until he receives the payment. Splitting up the compensation into different components for the purpose of payment of interest under Section 34 was not in the contemplation of the legislature when that section was framed or enacted.”
20.The aforesaid decision came for consideration before
this Court in the case of Gurpreet Singh case [supra] and
in paragraph 54 of the said judgment the Constitutional
Bench of this Court held thus: -
“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, the awardee/decree- holder would be entitled to claim interest on
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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 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 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 (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."
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21.Subsequent to the aforesaid Constitutional Bench
decision of this Court, a Division Bench of this Court in
Land Acquisition Officer & Asstt. Commissioner & Anr
v. Shivappa Mallappa Jigalur & Ors [supra] after
referring to the aforesaid decisions held and observed as
follows in paragraph 13:-
“13. The decision in Gurpreet Singh, thus, actually enlarged the scope of execution proceeding, in a certain way, on the basis of the decision in Sunder. Coming now to the passage specially relied upon by Mr. Hegde, we do not have the slightest doubt that the reference to "closed executions" does not mean cases in which the main proceeding arising from the landowner's claim for enhanced compensation remains pending before the civil court or at the appellate stage. It may sometimes happen, as illustrated by this case that the award of the Collector or the decree of the civil court is put to execution and payments are made in terms of the award or the decree of the civil court and in that sense the award or the decree is satisfied. Nevertheless, an appeal against the award or the decree of the civil court may still remain pending either before the High Court or even before this Court. In appeal, the superior court may enhance the compensation which would lead to enhancement of solatium and consequently the interest on the additional amounts of compensation and solatium. In such a situation, the landowner/claimant would be bound to go back to the execution court for realisation of the additional amounts in terms of the modified decree. In such cases,
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the execution proceedings cannot be deemed to be closed and neither was it the intent of the observations in paragraph 54 of the decision in Gurpreet Singh.
22.However, in the present appeals, the impugned
judgment and order against which these appeals are filed
would reveal that the prayer for payment of interest on
solatium was specifically made and the same was
rejected by the High Court. But in so far as the market
value of the land is concerned, the High Court passed an
order of enhancement and the said enhanced amount
came to be deposited by the Respondents after passing of
the order in the case of Sunder [supra]. Being aggrieved
by the said judgment and order of fixation of market
value of the land as also against the rejection of the
prayer for payment of interest on solatium, these appeals
have been filed. Three of such appeals were barred by
limitation but by express orders passed by this Court,
the delay in filing the said three appeals was condoned.
We have not been shown any conclusive proof to come to
the decision that the execution cases were closed. On
the other hand, the enhanced amount was deposited by
the Respondent after the date of decision in Sunder and
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since the present appeals were entertained by this court,
and in the facts and circumstances of the present
appeals, we would hold that the appellants herein be
provided with the benefit of the decision laid down by the
Constitutional Bench as stated, particularly in paragraph
54 of Gurpreet Singh case [supra]. We have passed the
order for payment of interest on solatium also, taking
into consideration the view of the High Court for rejection
of the claim for interest on solatium holding that no such
interest is payable in terms of the decision of the
Supreme Court in the case of State of Maharashtra vs.
Maharau Srawan Hatkar, reported in Judgment Today
1995 (2) S.C. 583. Subsequent to the aforesaid decision
this Court has rendered the verdict in Sunder (supra)
and the Constitution Bench decision in Gurpreet Singh
(supra), carving out an exception by making the claimant
entitled to interest on solatium on certain conditions.
23. Considering the factors in toto, and in the peculiar facts
and circumstances of the present appeals, we direct for the
payment of interest on solatium to the appellants herein in
terms of the decision of the Constitution Bench in Gurpreet
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Singh [supra] i.e., from the date of the Judgment in Sunder
[supra] from September 19, 2001 to the date of deposit of the
entire amount in the execution court.
24. Accordingly, appeals stand disposed of in terms of the
discussion and observations made hereinabove, but we leave
the parties to bear their own costs.
............................................J [Dr. Mukundakam Sharma ]
............................................J [ Anil R. Dave ]
New Delhi, November 19, 2010.
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