Prem Nath Kapur v. National Fertilizers Corporation of India Ltd. (1996) 2 SCC 71; Kapur Chand & Ors.

[201 O] 13 (ADDL.) S.C.R. 154 RADHA MUDALIYAR v. SPL. TAHASILDAR (LAND ACQ.), T.N.H. BOARD (Civil Appeal No. 5616 of 2004 etc.) OCTOBER 8, 2010 [DR. MUKUNDAKAM SHARMA AND SWATANTER KUMAR, JJ.] Land Acquisition Act, 1894: s. 23 - Compensation - Basis for determination - Held: Comparable sale instances are the best piece of evidence for the purpose of determining the compensation - Even transactions of the adjacent areas and closest sale instances to the date of the notification are best evidence - In case of increasing trend in value of land, the claimants are entitled to the benefit of increase for the intervening period - Annual increase of 10% to 15% is normally allowed by the court where the record reflects increasing trend in the sale price of the land - In the instant case, 10% is allowed because of the short intervening period between the execution of the sale deed and issuance of notification uls.

4. A B c D E F different aspects - s.23 - Deduction - Applicability of, while determining compensation - Held: The deduction can be applied for If the size of the plot of comparable sale is vety small and the same has to be taken into consideration for non-availability of other evidence and the land acquired is a large chunk of land, then some deduction on that score is applicable - Deduction on account of expenses of G development of the sites could vary from 20% to 70% depending on the nature of the land, its situation, the purpose and stage of development - In the instant case, agricultural land was acquired to carty out the development scheme for setting up export processing zone - The development H 154 RADHA MUDALIYAR v. SPL. TAHASILDAR (LAND ACQ.), T.N.H. BOARD 155 purpose, being in public interest, is bound to result in A utilization of part of the land for the purposes of roads, by-links, water and electricity lines and other infrastructural amenities of the project- In the facts and circumstances of the case, deduction of 30% is applied. ss.

23(/-A), 23(2) and 34, proviso - Consequential 8 benefits, solatium and interest - Held: The claimants are entitled to solatium as well as the interest on the aggregate amount including solatium, at the rate specified in proviso to s. 34 - Solatium is in consideration of compulsory nature of acquisition - The compulsory nature of acquisition is to be C distinguished from voluntary sale or transfer - In the latter, there is a willing buyer and seller - In the case of acquisition, it is compulsory and deprives the owner of an opportunity to negotiate and bargain the sale price of its land as it will entirely depend on the Collector or the court to determine the amount D of compensation in accordance with the provisions of the Act. E On 23.1.1985, a Notification under Section 4 of the Land Acquisition Act, 1894 was issued by the Industries Department of the State of Tamil Nadu to acquire land in furtherance of the scheme sanctioned by the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) and a total of 261.42 acres of land was acquired for setting up the Madras Export Processing Zone (MEPZ).

The land acquisition officer awarded compensation @ Rs. 145 per cent for an extent of 64 cents and Rs. 110 for 6.42 acres of another kind of land and also awarded compensation at different rates for the superstructures raised by the claimants-appellants on their respective lands. The possession of the land was taken. The appellants received the compensation under protest. G They filed applications for reference under Section 18 of the Act. The reference court enhanced the compensation payable to the claimants to Rs. 3,600/- per cent as agricultural land by relying upon Exhibits A4 and A5. On F H 156 SUPREME COURT REPORTS [2010] 13 (AOOL.) S.C.R. A appeal, the High Court reduced the compensation payable holding that the market value of the acquired lands would be Rs. 2,018/- per cent by adopting the value as per Ex.A4, i.e. Rs. 3,363/-and making a deduction of 40% towards development charges. B In the instant appeals, it was contended for the appellants that the High Court did not appreciate the evidence on record in its correct perspective and appl.ied deduction of 40% which, in the facts and circumstances of the case, was not called for; and the appellants were C not awarded solatium and interest in accordance with law. Partly allowing the appeals, the Court 0 HELD: 1.

It is a well settled principle of law that comparable sale instances, subject to their satisfying the basic ingredients of law, are the best piece of evidence to be considered by the court for the purpose of determining the compensation. Even awards and transactions of the adjacent areas have been treated as E best evidence. Of course, such instances must be comparable and legally admissible in evidence. Three sale instances were produced and proved by the claimant. Of course, the area, stated in those sale instances, was comparatively much smaller in size than the acquired land. The land, subject matter of Exhibit A4 admeasuring approximately S.S cents was sold for a sum of Rs.18,500/- and the rate came to Rs. 3,363/- per cent. Exhibits A1 and AS again were the sale instances from the same revenue estate and were quite close to the date G of notification under Section 4. Exhibit A1 was dated 7.11.1984 while Exhibit AS was dated 15.6.1984.

1.

While determining compensation, the deduction can be applied for different aspects. If the size of the plot is very small and the same has to be taken into consideration for non-availability of other evidence and the land acquired is a large chunk of land, then it would G H 158 SUPREME COURT REPORTS [2010] 13 (ADDL.) S.C.R. 0 B A be advisable to apply some deduction on that score. In the instant case, the land was acquired, which apparently was an agricultural land at the time of acquisition, to carry out the development scheme for the MEPZ sanctioned by the SIPCOT. The development purpose, being in public interest, is bound to result in utilization of part of the land for the purposes of roads, by-links, water and electricity lines and other infrastructural amenities of the project. This Court, depending on the facts and circumstances of the case, has taken the view that deduction on account c of expenses of development of the sites could vary from 20% to 70% depending on the nature of the land, its situation, the purpose and stage of development.

1.

Having examined the facts and circumstances of the evidence on record, rule of F the case and approximately 113rd deduction can be fairly applied to the instant case. The land certainly has potential and even the sale instances show that the land from the revenue estate of the same village was sold as plots and a number of facilities, were available in the vicinity. Examining the G cumulative effect of the evidence on record in relation to location, potential and similarity of land, the deduction of more than 30% would be prejudicial to the interest of the claimants whose lands have been acquired by the State in exercise of its power of eminent domain. It is a H 160 SUPREME COURT REPORTS [2010) 13 (ADDL.) S.C.R. A compulsory acquisition and it is expected of the State to be just and fair and award the compensation to the claimants which satisfies mandate of law contained in the provisions of Section 23 of the Act. Therefore, applying 30% deduction to the value indicated in Exhibit A1 (deduction being made both on account of size of the plot and development charges), the claimants would be entitled to receive compensation at the rate of Rs. 2,800/ - per cent for the acquired land and consequential benefits in terms of s. 23(1-A). [Para 16 and 19] [176-B-G; 8 C 178-D] Kasturi & Ors. v. State of Haryana (2003) 1 SCC 354 - referred to. 0

2. The claimants are entitled to solatium as well as the interest on the awarded amount. The court has to keep in mind that the compulsory nature of acquisition is to be distinguished from voluntary sale or transfer. In the latter, there is a willing buy~r and seller. In the case of acquisition, it is compulsory and deprives the owner of an opportunity to negotiate and bargain the sale price E of its land as it will entirely depend on what the Collector or the court determines as the amount of compensation in accordance with the provisions of the Act. The solatium envisaged in sub-section (2) of Section 23 is "in consideration of the compulsory nature of acquisition". F Thus, the solatium is not the same as damages on account of the landowner's disinclination to part with the land acquired. If such compensation as determined in terms of Section 23 of the Act is not paid within one year from the date of taking possession of the land, then in G terms of proviso to Section 34 interest shall stand escalated to 15% per annum from the date of the 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. The person H entitled to the compensation awarded is also entitled to ~ RADHA MUDALIYAR v. SPL. TAHASILDAR (LAND 161 ACQ.), T.N.H. BOARD get interest on the aggregate amount including solatium. A In any case, there can be no doubt in law that the claimants are entitled to the solatium and the interest thereupon at the rate specified in proviso to Section 34 of the Act for the relevant period. Even in this regard, the judgment of the High Court, therefore, cannot be B sustained. [Paras 17, 18) [177-A-H; 178-A-C) Sunder v. Union of India (2001) 7 SCC 211 - relied on.