Nadirsha Shapurji Patel (D) By Lrs. &Ors vs Deputy Collector & La & Anr

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

I 2 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

I 3 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

I 4 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

I 5 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: -

7 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.

7 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.

7 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.

I 6 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

I 7 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.

I 8 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-

I 9 121 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

I 10 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

I 11 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

I 12 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

I 13 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.

I 14 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

I 15 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:-

I 16 "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

I 17 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."

I 18 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,

I 19 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

I 20 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

I 21 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.

I 22