http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4  

PETITIONER: RAM PIARI & ANR. ETC.

       Vs.

RESPONDENT: LAND ACQUISITION COLLECTOR, SOLAN& ORS.

DATE OF JUDGMENT:       12/03/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. VENKATASWAMI K. (J)

CITATION:  JT 1996 (3)   758        1996 SCALE  (3)246

ACT:

HEADNOTE:

JUDGMENT:                             WITH           CIVIL APPEAL NO. 5242-44, 5241 OF 1996. (Arising out of SLP (C) Nos.19947-49, 18644 and 18646 of 1995.)                             AND     CIVIL APPEAL NOS. 6173, 6807, 6825-35 AND 8274-83 OF                           OF 1995                          O R D E R      Leave granted  in SLP (C) Nos.18543-45, 19947-49, 18644 and 18646 of 1995      Notification  under   Section   4(i.)   of   the   Land Acquisition Act, 1894 (for short, the ’Act) was published on 3.9.1973 acquiring  863 bighas  of land situated in villages Gumma, Kamli,  Dangyar and  Ambota in Parwanoo township. The award  under  Section  11  was  made  by  the  Collector  on 14.7.1977. He  determined the  compensation at varying rates between Rs.14,195/-  per bigha  and Rs.  500/- per bigha for lands classified  into seven  categories. On reference under Section 18,  the District  Judge, Solan  by award and decree dated  15.5.1991   uniformly  awarded  compensation  at  the uniform rate  of Rs.14,195/-  per  bigha.  In  Civil  Appeal Nos.8274-83 of  1985, acquisition  was made  in 1976 but the lands were  left out  from 1973 notification. On November 9, 1978, the  Land Acquisition  Collector awarded  compensation similar to  compensation  awarded  form  1973  acquisitions. Taking into  consideration the trend in appreciation of land prices, the  District Judge  vide award  dated May  23, 1991 awarded common  price for  all  categories  of  land,  i.e., Rs.24,000/- per  bigha. On  appeal by  the State  and  cross appeals by  the claimants,  the High  Court by  judgment and order dated 4.5.1995 reduced the compensation to the uniform rate  of   Rs.7,100/-  per   bigha.  Dissatisfied  with  the reduction, the claimants have filed these appeals by special leave.      This Court  issued notice  dated 28.8.1995  Confined to the correctness  of the order of the High Court with respect

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4  

to first  two categories  of lands,  namely, Kuhal  land for which  the   Land  Acquisition  Officer  awarded  a  sum  of Rs.14,195/- per  bigha and  Kuhal land  for which  a sum  of Rs.9,425/- has  been awarded.  In earlier  cases, notice was not confined  to the  above aspects  but leave  was granted. Thus  all  these  appeals  have  been  posted  together  for disposal.      Shri Ashok  Chhabra and Shri R.K. Jain, learned counsel appearing for  the appellants  raised three-fold contention. Firstly, that the High Court has committed manifest error in reducing the compensation to 1 and 2 category lands, namely, Kuhal and Kuhal lands for which the Land Acquisition Officer had offered  compensation at  the rate  of  Rs.14,195/-  and Rs.9,425/- per  bigha respectively  which is  an  offer  and under Section  25 of  the Act,  the High Court cannot reduce the  compensation   less  than   what  was  offered  by  the Collector. Secondly,  it is  contended that  in view  of the finding recorded  by the  District Judge and the High Court, namely, that  the lands are possessed of potential value for building purposes,  50% reduction  of compensation resulting in uniform  rate of Rs.7,100/- per bigha is not correct. The claimants are  entitled to  higher compensation.  It is also contended  that   deduction  of  50%  towards  developmental charges is  not correct  on the facts in this case since the finding of  the  High  Court  is  that  all  the  lands  are possessed of  same potentialities.  Thirdly, it is contended by Shri  Jain, learned  senior counsel  that after the award was made  by the  reference Court  under Section 26, notices were issued  to the  purchasers to  pay revised price on the basis of  the enhanced  market  value.  When  the  same  was questioned the  High Court  dismissed the  same.  Therefore, when the  beneficiary was  seeking to  avail  of  the  award passed by  the Court  and sought  to  recover  the  enhanced compensation from  the beneficiaries,  nothing prevented the State to have the compensation paid to the land owners whose land has  been acquired. Shri Parbhakar Rao, learned counsel for the respondent resisted all the contentions.      The first  question, therefore,  is: whether  the  High Court was  justified in reducing the compensation in respect of Kuhal  and Katuhal  lands classified  by the Collector to Rs.14,195/- and  Rs.95425/- per  bigha respectively. Section 25 of  the Act  says that the amount of compensation awarded by the  Court shall  not be  less than the amount awarded by the Collector  under Section  11. It is settled has that the award made  by the  Collector is  an offer  made by  him  on behalf of  the Government  and the  State is  bound  by  the offer. While  on reference  under Section  18 or  on  appeal against the  enhanced compensation  under  Section  54,  the Court cannot  reduce the  compensation less  than the  offer made by  the Collector.  Therefore,  The  High  Court  while fixing the  uniform rate  of compensation to all the lands @ Rs.7100/- per  bigha committed  error of law in reducing the compensation to  the lands classified by the Collector to be Kuhal and Katuhal lands for which compensation @ Rs.14,195/- and Rs.9,425/-  per bigha respectively was offered. The High Court, therefore, in that perspective has committed error of law in  reducing the  compensation in  respect of  the above lands. Accordingly)  the award  of the Collector is restored in respect  of the  lands classified  by him  as  Kuhal  and Katuhal lands.      The next  question is:  whether  all  other  lands  are possessed of same potentialities for awarding uniform market value in  respect of all the lands. No doubt, the High Court found that  all  the  lands  are  acquired  for  the  common purpose, namely,  commercial purpose.  But it has recorded a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4  

finding that as on the date of the acquisition the lands are agricultural lands,  they require  development. Under  those circumstances, on the date of the acquisition, the lands did not possess  of the  potential value  for building  purposes though  notification  was  issued  for  commercial  purpose. However, the  High Court  has committed error in determining developmental charges  @ 50%.  It is seen that the lands are abutting the  hill slopes  and the  national highway, though used as  agricultural lands.  This Court  has considered the entire case law in a latest judgment in K Vasundara Devi vs. Revenue Divisional Officer (LAO) [(1995) 5 SCC 426] and held that the  Court will  be justified in deducting market value between 33-1/3%  and 60%  of the compensation based upon the facts in each case. On the facts of this case, we are of the opinion that  deduction of  33-1/3% would  meet the  ends of justice.      The deduction  of 1/3rd share as directed by this Court would not be applicable to the Kuhal and Katuhal lands which were offered by the Collector. Since that was only an offer, it did  not bind  the parties;  hence no  deduction in  that behalf could  be made  from  the  said  offer.  Under  those circumstances, we are of the considered view that 33-1/3% of the market  value would  be deducted  towards  developmental charges.      No doubt.  Shri Ashok  Chhabra, learned  counsel placed reliance on  the sale  deeds which  are marked  in the  case right from  1970 to  1978 and reflected varied prices, it is seen that  the lands are situated in four villages. They are not contiguous  to each  other but are situated at different spots wherever  it is  feasible to construct township. Under these circumstances,  it would  be difficult on the facts in this case,  to  pin  point  a  particular  sale  deed  which reflects the proximate potentiality or the similarity of the land under  acquisition. Moreover, all the sale deeds are of small extents varying from 1/2 bigha to 8 bighas in one sale deed. The  High  Court,  therefore,  was  right  in  placing reliance not on all the sale-deeds but on the maximum amount awarded by  the collector  to be the basis for determination of the  compensation. Based  thereon,  the  High  Court  has reduced 50% towards developmental charges and determined the compensation at  Rs.7,100/- per  bigha. The basis adopted by the High  Court cannot  be said  to be vitiated by any wrong principle of  law. Therefore,  the market value of the lands of the respondents including Kutuhal lands, i.e., items 2 to 7 of  classification made  by the  Land Acquisition Officer, should be determined @ Rs.14,195/- per bigha after deduction 33-1/3% towards  developmental  charges  to  arrive  at  the market value;  the balance  amount would be the market value which would be just and adequate compensation.      In  fact,   in  this  case  obviously  the  development authority accepted the award of the Court, acted upon it and issued notice to the purchasers calling upon them to pay the compensation on  the basis  of  the  enhanced  market  value determined by the District Judge. On the facts of this case, we think  that the development authority having accepted the award, though  the State  carried the  matter in appeal, has succeeded upon  principle of  law. The development authority is directed  to recover  the amount  and pay  the amount  so recovered at  the  rate  determined  by  the  Court  to  the respective land  owners. We  direct that  this direction may not be treated to be a precedent. On the facts of this case, we think  that the  above direction  would meet  the ends of justice. The  appellants  are  not  entitled  to  additional amount under  Section 23(1-A). They are entitled to solatium @ 30%  and interest  @ 94% per annum from the date of taking

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4  

possession for  one year  and thereafter  @ 15% per annum on the enhanced  compensation till the date of its deposit into the Court      The appeals are disposed of accordingly. No costs.