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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2705 OF 2010
[Arising out of Special Leave Petition (C) No.29135/2008]
G. Prema ... Appellant
Vs.
The Special Tahsildar, Tirupattur ... Respondent
WITH
CIVIL APPEAL NO. 2707 OF 2010
[Arising out of Special Leave Petition (C) No.30599/2008]
K. Alliammal .... Appellant
Vs.
The Special Tahsildar, Tirupattur ...Respondent
JUDGMENT
R. V. RAVEENDRAN, J.
Leave granted.
Survey Nos.59/3 and 59/1 of Jolarpettai village, Tirupattur Taluk,
measuring 1.43 acres and 5.07 acres belonging to the respective appellant in
the two appeals (along with another 0.27 acre) were acquired for the
purpose of providing house sites for weaker sections, in pursuance of
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preliminary notification dated 7.6.1989. The Land Acquisition Officer
determined the compensation for the said agricultural lands at Rs.30,000/-
per acre by his award dated 22.4.1992.
2. The Reference Court by its judgment and award dated 11.9.1995
increased the compensation to Rs.4,17,600/- per acre. It relied on a sale deed
Ex. A1 dated 23.12.1988 relating to sale of a plot of land measuring 2520 sq.
ft. in nearby Survey No.65/3 for a sale consideration of Rs.30,870/- which
works out to Rs.12.25 per sq.ft. or Rs.533,610/- per acre. The Reference
Court however took the market value under Ex. A1 as Rs.12 sq.ft. or
Rs.5220/- per cent and after deducting 1/4th (Rs.1044/-) thereof towards the
cost of development, arrived at the market value of the acquired land at
Rs.4,176/- per cent or Rs.4,17,600/- per acre.
3. Feeling aggrieved, the State filed appeals before the High Court. The High
Court was of the view that it would be more appropriate to rely upon Ex. A2
dated 11.8.1986 which related to a sale of a land which was also the subject
matter of the same acquisition. Under Ex.A2, one of the appellants (Prema)
had sold land measuring 15 cents in Sy. No.59/3 for Rs.18,750/- which
worked out to Rs.1,250 per cent or Rs.125,000/- per acre. As the sale was of
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the year 1986 and the preliminary notification was of the year 1989, the
High Court provided an increase of 10% per year, that is Rs.375/- for three
years, and arrived at the market value as Rs.1,625/- per cent or Rs.162,500/-
per acre. As a consequence, the High Court allowed the appeals in part and
reduced the compensation from Rs.4,17,600/- to Rs.1,62,500/- per acre. The
said judgment is under challenge in this case.
4. The appellants contended that the High Court committed an error in
relying on Ex. A2 as it was nearly 3 years prior to the acquisition and there
was a steep increase in the value of land during that period. They contended
that Ex. A1 relating to Survey No.65/3 which was a nearby land, was more
appropriate for determining compensation as it was a sale on 23.12.1988,
much nearer to the date of acquisition. They contended that the
compensation awarded by the Reference Court ought not to have been
interfered by the High Court. Alternatively, they contended that even if
Ex. A2 had to be relied on, the price thereunder should have been increased
cumulatively at least by 30% per annum. On the other hand, learned counsel
for the respondent – state submitted that when a sale deed executed by one of
the claimants relating to an acquired land was available, the High Court was
justified in taking note of that transaction (Ex. A2 dated 11.8.1986) in
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preference to Ex. A1 dated 23.12.1988 which related to a land farther away.
It was also submitted that while Ex. A2 relied on by the High Court relates
to 15 cents of land whereas Ex. A1 relied on by the Reference Court was in
regard to a small plot of developed land measuring hardly 2 cents that is
2520 sq.ft. and therefore Ex. A2 dated 11.8.1986 was rightly preferred
instead of Ex. A1 dated 23.12.1988. The respondent also contended that the
increase in value per year was rightly taken as 10% and that being the
standard increase, should not be interfered with.
5. We are of the view that both the sale deeds are relevant. Ex. A1 is
nearer in time and the plot though small was also near to the acquired lands.
Ex. A2 relates to a part of the acquired lands nearly three years prior to the
preliminary notification. We therefore propose to rely upon both the sale
transactions by making appropriate adjustments.
6. Ex. A1 dated 23.12.1988 as noticed above, is in regard to a small
developed land measuring 2520 sq.ft. which works out to Rs.12.25 per sq.ft.
That the acquired lands are situated on the outskirts of Jolarpettai surrounded
by developed areas (Jolarpettai is one of the main Railway Junctions under
Southern Railway). The land was acquired for making housing sites for
weaker sections which also shows their potential for development. However,
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as what has been acquired is a larger tract of land and Ex. A1 related to a
very small piece of land, we are of the view that a deduction of 60% towards
development cost (that is deduction towards land to be set apart for roads,
drains, parks etc., and the cost of development), would be appropriate. On
deducting the 60% towards the development cost from Rs.533,610/- per acre
(which is the value reflected by Ex. A1 dated 23.12.1988), the market value
for a larger tract of land would be Rs.213,440/- per acre. If we take Ex. A2
dated 11.8.1986 as the basis, as there is a gap of three years between the date
of Ex. A2 and the date of preliminary notification, we have to work out the
market price in 1989, by providing appropriate yearly increase. This Court in
Sardar Joginder Singh v. State of U.P. [2008 (17) SCC 133] has held that in
urban areas or lands with potential for development, a cumulative increase
of 10% to 15% would be appropriate. We are of the view that having regard
to the situation and potential, providing a cumulative increase of 12% for 3
years over the base rate of Rs.1250/- disclosed by Ex.A2 dated 11.8.1986
would be appropriate. If so done, the market price would work out to be
Rs.1,756/- per cent or Rs.175,600/- per acre. By averaging the two prices,
we get a market value of Rs.194,520/- (rounded off to Rs.195,000/-) per
acre. We accordingly increase the value of land from Rs.162,500 to
Rs.195,000/- per acre.
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7. We find that while the High Court awarded an additional amount at
12% per annum from the date of preliminary notification till the date of
passing of award or delivery of possession whichever was earlier and
solatium at 30% under section 23(2), it awarded interest only on the
compensation plus additional amount. In regard to interest on the solatium
amount, the High Court stated that as the matter was pending before the
Supreme Court, depending upon the outcome, the claimants will be entitled
to claim the amount before the Reference Court. This Court has
subsequently held that interest is payable on the solatium also.
8. In view of the above we allow these appeals in part as follows :
(a) The compensation for the land is increased from Rs.162,500 per
acre to Rs.195,000 per acre.
(b) The compensation awarded in regard to well and the structure is
not disturbed.
(c) The appellants will be entitled to additional amount @ 12% per
annum on the market value from the date of notification under
section 4(1) of the LA Act till the date of award of the Collector,
7and solatium at 30% of the market value and interest on the
aggregate including solatium @ 9% per annum for one year from
the date of taking possession and 15% per annum thereafter till the
deposit.
(d) The respondent is permitted to draw back any amount deposited in
excess of what is due as aforesaid. If the appellants have drawn
any amount in excess of what is due to them, the respondent shall
be entitled to recover the same.
(e) Parties to bear their respective costs.
……………………..J.
(R V Raveendran)
New Delhi; .........................J.
March 23, 2010. (K S Radhakrishnan)