REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICITION
CIVIL APPEAL NOS._9198-9202 OF 2010
Dilawar Singh & Ors. etc. ...Appellants
Versus
Union of India & Ors. ...Respondents
With
Civil Appeal Nos. 9203/2010, 9204/2010, 9205-9209/2010
9210-9215/2010, 9216-9217/2010 and 9218-9219/2010
JUDGMENT
T.S. THAKUR, J.
Two questions fall for determination in these appeals
that arise out of orders passed by the High Court of Punjab
& Haryana at Chandigarh. These are –
1) Whether award of solatium and interest is
permissible even in cases where acquisition of
2land is made under Requisitioning and Acquisition
of Immovable Property Act 1952; and
2) Whether the land owners were entitled to
enhancement of compensation beyond Rs.200/-
per marla determined by the learned Single Judge.
The questions arise in the following backdrop.
A large extent of land situate in the outskirts of
Pathankot in the State of Punjab and underlying different
survey numbers was acquired for defence purposes under
the provisions of Requisitioning and Acquisition of
Immovable Property Act, 1952. Failure of the parties to
arrive at an agreement as to the amount of compensation
payable to the expropriated owners of the land in question
led the owners to seek appointment of an Arbitrator for
determination of the amount payable to them. The
Government did not respond to the said request for a long
time which forced the land-owners to approach the High
Court of Punjab and Haryana in a writ petition seeking a
mandamus directing the Government to appoint an
3
Arbitrator. It is only after the said petition was allowed and a
mandamus issued that the Government appointed the
District Judge, Gurdaspur as an Arbitrator, sixteen years
after the lands had been acquired. The Arbitrator recorded
evidence and after hearing the parties came to the
conclusion that the owners were entitled to compensation
that ranged between Rs.50/- per marla (Rs. 1000/- per
kanal) for land relevant to Civil Appeal No.9216-9217/2010
to Rs.200/- per marla for lands relevant to Civil No. 9198-
9202/2010. Solatium @ 30% and interest @ 9% for the first
year and 15% for the subsequent years till payment of the
amount of compensation to them was also held payable to
the landowners. Aggrieved by the said award the Union of
India appealed to the High Court, inter alia, contending that
the Arbitrator was not justified in awarding nor was there
any provision for granting solatium and interest under the
Act aforementioned. The land-owners also challenged the
award made by the Arbitrator by filing cross-objections
before the High Court in which they prayed for enhancement
4
of compensation payable to them to Rs.500/- per marla. By
a common judgment impugned in these appeals the High
Court has dismissed the appeals filed by the Union of India.
The cross-objections filed by the owners were also dismissed
by separate orders unsupported by any reasons for denying
the enhancement prayed for by them. Relying upon the
decision in Jagdish Prasad v. The Competent Authority,
the High Court held that award of compensation @ Rs.150/-
per marla by the Arbitrator was justified on a uniform basis
for all kinds of lands. The High Court overlooked the fact
that in some cases the compensation awarded was Rs.50/-
per marla while in some others the same was awarded @
Rs.200/- per marla. The High Court also noticed that
compensation at the same rate had been granted to owners
of land in village Nalunga which award had been affirmed by
the High Court in LPA 721 of 1987 filed by the Union of India
and decided on 3rd September, 1987.
The High Court also came to the conclusion that award
of solatium and interest was justified having regard to the
5
delay on the part of Government in appointing an Arbitrator.
Reliance was placed by the High Court on the decision of this
Court in Union of India v. Hari Krishan Khosla (Dead)
by LRs. 1993 Supp. (2) SCC 149. The High Court, however,
modified the order to the extent that instead of describing
the amount as solatium and interest the same was described
as compensation for the lands acquired by the Government.
Both the parties have come up in appeal against the above
order. While the appeals filed by the Union of India call in
question the correctness of the view taken by the High Court
in regard to solatium and interest, the cross appeals filed by
the owners assail the correctness of the orders passed by
the High Court whereby cross-objections seeking
enhancement of the amount of compensation to Rs.500/-
per marla have been rejected by non-speaking orders.
It is common ground that the provisions of the
Requisitioning and Acquisition of Immovable Property Act,
1952 do not make any provision for the grant of solatium or
interest to the expropriated landowners. The absence of any
6
such provision in the said Act was in fact made a basis for a
challenge to the constitutional validity of the enactment
which was repelled by this Court in Union of India v. Hari
Krishan Khosla 1993 (Supp) 2 SCC 149. This Court pointed
out that any comparison between acquisition made under
the Requisitioning and Acquisition of Immovable Property
Act, 1952 with that made under the Land Acquisition Act
would be odious in view of the dissimilarities between the
two enactments. That decision was followed in subsequent
pronouncements of this Court in Union of India v. Chajju
Ram 2003 (5) SCC 568 where a similar attack was mounted
against the constitutional validity of Defence of India Act,
1971 but repelled by this Court relying upon the decision in
Hari Krishan Khosla. What is noteworthy is that in both
these matters this Court had made a distinction between
cases in which there was inordinate delay in the
appointment of an Arbitrator and consequent delay in the
determination of the amount of compensation payable to the
owners and other case where there was no such delay. In
7
paragraph 79 of the judgment of this Court in Hari Krishan
Khosla, this Court observed:
“This is a case in which for 16 years no
arbitrator was appointed. We think it is just
and proper to apply the principle laid down in
Harbans Singh Shanni Devi v. Union of India
(Civil Appeal Nos. 470 and 471 of 1985,
disposed of by this Court on February 11,
1985). The Court held as under:
“Having regard to the peculiar facts and
circumstances of the present case and
particularly in view of the fact that the
appointment of the arbitrator was not made
by the Union of India for a period of 16
years, we think this is a fit case in which
solatium at the rate of 30 per cent of the
amount of compensation and interest at the
rate of 9 per cent per annum should be
awarded to the appellants. We are making
this order having regard to the fact that the
law has in the meanwhile been amended with
a view to providing solatium at the rate of 30
per cent and interest at the rate of 9 per cent
per annum.”
Even in Union of India v. Chajju Ram (supra), this
Court noted the delay in the appointment of an Arbitrator
and directed that the amount of interest and solatium paid
to the land owners decades back shall not be recovered from
the land owners. This Court observed:
8
“In these cases also, it is said that the
arbitrators have not yet been appointed
despite the demand made in this behalf by
the respondents. The amount of solatium at
the rate of 15% per annum and the interest
thereupon had been paid in the early
eighties when the Punjab and Haryana High
Court declared the said Act ultra vires
Article 14 of the Constitution of India.
In the peculiar fact situation obtaining in
these cases and inasmuch as the amounts
sought to be recovered are small which
were paid to the respondents decades back,
we are of the opinion that interest of justice
shall be met if the appellants are directed
not to recover the amount of compensation
from the respondents pursuant to or in
furtherance of this judgment. However, we
hasten to add that this direction shall not be
treated as a precedent.”
The above decisions were then followed by this Court in
Prabhu Dayal and Others v. Union of India 1995 (4)
SCC 221. That was also a case where the appointment of
Arbitrator was delayed by 22 years. This Court relying upon
the decision in Hari Krishan Khosla and Harbans Singh
v. Union of India, C.A. Nos. 470 & 471 of 1985 disposed
of on 11th February 1985, observed:
“It is next contended that the appellants are
entitled to the solatium though in law they
are not entitled but in equity they are
entitled to the solatium for the reason that
9for 22 years arbitrator was not appointed to
determine the market value. In support they
relied upon the judgment of this Court in
Union of India v. Hari Krishan Khosla. Therein
this Court relied upon another judgment in
Harbans Singh v. Union of India. In that
judgment this Court said that having regard
to the peculiar facts and circumstances of the
present case and in view of the fact that the
appointment of the arbitrator was not made
by the Union of India for period of 16 years,
this Court considered in equity to give
solatium at the rate of 30 per cent of the
amount of compensation and interest at the
rate of 9 per cent per annum should be
awarded to the appellants therein. In this
case, the question of appointing the
arbitrator would arise only when the market
value offered was rejected by the claimants.
The offer was made and rejected on 13-10-
1961 and the arbitrator came to appoint on
22-9-1966 after five years. Under these
circumstances, the claimants are entitled to
solatium at the rate of 15 per cent on the
market value. The appellants did not
challenge the rate of interest granted at 6
per cent. Accordingly they are also entitled to
the interest at the rate of 6 per cent per
annum. The appeals are accordingly allowed.
The appellants are entitled to the relief as
stated above. No costs.”
We may at this stage to refer to a recent decision of
this Court in Union of India v. Parmal Singh and Others
2009 (1) SCC 618 where the question whether solatium
and interest could be awarded to the expropriated land
owners under the Requisitioning and Acquisition of
10
Immovable Property Act, 1952 was once again examined.
Relying upon the decision of this Court in Satinder Singh
v. Umrao Singh AIR 1961 SC 908, Union of India v. Hari
Krishan Khosla (supra) and Union of India v. Chajju
Ram 2003 (5) SCC 568 and the English decision in Swift
and Co. v. Board of Trade 1925 AC 520(HL) and
Inglewood Pulp and Paper Co. v. New Brunswick
Electric Power Commission 1928 AC 492, this Court
upheld the award of interest in favour of the landowners.
This Court said:
“When a property is acquired, and law
provides for payment of compensation to be
determined in the manner specified,
ordinarily compensation shall have to be paid
at the time of taking possession in pursuance
of acquisition. By applying equitable
principles, the courts have always awarded
interest on the delayed payment of
compensation in regard to acquisition of any
property. When a requisitioned property is
acquired, as possession had already been
taken from the landholder, the compensation
becomes payable from the date of
acquisition. When a property is requisitioned,
the landowner is compensated for the denial
of possession by paying compensation based
on the rent it would have fetched had it not
been requisitioned. But once the property is
acquired, the rent is stopped, as
compensation based on open market value
becomes payable against acquisition.
11
Therefore, while interest is payable, it is not
awarded from the date of requisition (taking
over of possession) but only from the date of
acquisition. This principle has been
recognised and applied by the courts
consistently.”
It is noteworthy that the High Court of Punjab and
Haryana has in Union of India v. Inder Singh and Anr. in
LPA No. 1918 of 1989 and connected matters upheld grant
of solatium and interest in regard to a similar acquisition
made in terms of a notification issued in January 1970.
While doing so the High Court placed reliance upon its
decision in Shankar Singh and Others v. Union of India
1988 (1) PLR 163 Mr. Subramanium, learned Solicitor
General fairly conceded that no appeal has been preferred
by the Union of India against the decision in Shankar
Singh’s case (supra) or that delivered in Union of India v.
Inder Singh and Anr (supra). In that view of the matter
therefore and having regard to the fact that there was an
inordinate delay of 16 years in the appointment of an
Arbitrator in the present cases, we have no hesitation in
12
holding that the principle laid down by this Court in the
decisions referred to above would entitle the land owners to
the benefit of solatium and interest especially when the
owners who have lost land in similar circumstances and for
the same purpose have been given such a benefit.
That brings us to the question whether the land-owners
are entitled to claim any enhancement in the amount of
compensation determined in these cases. In Union of India
etc. v. Inder Singh and Anr. (LPA No.1918 of 1989) and
connected matters to which we have referred earlier the
High Court has upheld the enhancement of compensation to
Rs.350/- per marla. The High Court was in that case dealing
with a similar question arising out of the very same
acquisition process. Relying upon its decision in Shanker
Singh and Ors. v. Union of India 1988 (1) PLR 163, a
Single Bench of the High Court in Inder Singh’s case
(supra) enhanced the compensation payable to the land-
owners to Rs.350/- per marla. Five appeals were preferred
before the Division Bench against the said order out of which
13
two appeals were dismissed by separate orders of the Court
while the third was dismissed for non-prosecution. The result
was that out of five appeals challenging the order passed by
the Single Judge awards in favour of the land-owners in the
case of three dismissed appeals attained finality entitling the
land-owners respondents in those appeals to compensation
@ Rs.350/- per marla. The refusal of a similar relief in the
remaining cases was not, therefore, considered just and
equitable when there were no distinguishing features to
justify such a refusal. The High Court also found that the
decision in Shanker Singh’ case (supra) was squarely
applicable in the case before it on account of the proximity
of the acquisitions in point of time. The notification in
Shanker Singh’ case (supra) was issued on 6th March, 1970
whereas that in Inder Singh’ case (supra) was issued on 9th
January, 1970. The amount of compensation determined in
Shanker Singh’s case (supra) was therefore found by the
High Court to be relevant for award of compensation in
Inder Singh’s case (supra) also.
14
In the present batch of cases except the case the
notification for acquisition was issued in February 1970
which is proximate in point of time to those issued in the
Shanker Singh and Inder Singh’s cases (supra). The
notification in Union of India v. Mohinder Singh (Civil
Appeal No. 9204/2010) was issued on 12.5.1964 and
published on 12.6.1964. That apart the lands in question
were all acquired for the very same purpose and are situated
on the outskirts of a growing town like Pathankot. The
growing non-agriculture potential of such lands is also not in
serious dispute. The High Court has failed to notice all these
aspects apparently because the decisions in Shanker
Singh’s case and that delivered in Inder Singh’s case
(supra) were handed down subsequent to the impugned
order. Suffice it to say that on the material available before
us we see no reason why the amount of compensation
payable to the landowners appellants in these appeals
should also not be enhanced to Rs.350/- per marla with
proportionate benefits towards solatium and interest as
15
awarded by the Arbitrator and upheld by the High Court in
those cases and in similar other cases to which we have
referred in the earlier part of this order. In so far as
Mohinder Singh’s case (supra) is concerned, the appeal
has been filed by the Union of India against grant of
solatium and interest. No appeal has been filed by the
owners in that case for enhancement of the amount of
compensation. Even otherwise in the absence of any cogent
evidence to justify any such enhancement, there is no room
for directing payment of a large amount of compensation.
In the result, we allow Civil Appeals Nos.9198-9202/
2010 and Civil Appeals Nos.9218-9219/2010 filed by the
owners and modify the award made by the Arbitrator to the
extent that instead of Rs.200/- per marla, the owners shall
be entitled to 350/- per marla towards compensation with
proportionate benefits like solatium and interest on the said
amount. The appellants-owners shall also be entitled to
proportionate costs in this Court and the Courts below.
16
Civil Appeals Nos.9203/2010, 9204/2010, 9205-
9209/2010, 9210-9215/2010 and 9216-9217/2010 filed by
Union of India, however, fail and are dismissed leaving the
parties to bear their own costs in these appeals.
……………………………J.
(MARKANDEY KATJU)
……………………………J.
(T.S. THAKUR)
New Delhi
October 26, 2010