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1997 DIGILAW 165 (MP)

NORTHERN COALFIELDS LIMITED, SINGRAULI v. MATA PRASAD

1997-03-31

DIPAK MISRA, S.K.DUBEY

body1997
S. K. DUBEY, J. ( 1 ) THIS is an appeal under Section 20 of the Coal Bearing Areas (Acquisition and Development) Act, 1957 (for short the 'act') against the award dated 25-8-1995 passed in case No. 245/90 by the Tribunal constituted under Section 14 (2) of the Act, at Sidhi. ( 2 ) FACTS giving rise to this appeal are thus : The appellant is a Government Company registered under the Companies Act with its head quarter at Singrauli is a coal mining undertaking established for production and sale of coal. The Central Government issued a notification under Section 4 (1) of the Act dated 4-5-1988 to acquire plot No. 4 of village Mahdeiya along with other property for its acquisition as it appeared to Central Government that coal is likely to be obtained from the land. A notification of declaration of acquisition of the land admeasuring 427 acres approximately or 172. 80 hectares approximately was issued under Section 9 of the Act and published in the official gazette of the Central Government on 10-10-1988. Respondent a lease holder of mining quarry lease of the area of one acre for a period of three years commencing from 8-3-1987 to 7-3-1990 with in option to its renewal was tendered compensation of Rs. 1,49,546. 29/- of his area so acquired, but, the respondent did not consent to receive it because of insufficiency of the amount, hence, made a reference of the dispute under Section 17 (2) of the Act for making an award on the following claims : @@61. htm@@ in addition to the amount of Rs. 8,75,178. 00 the respondent also claimed solatium and interest from the date of issue of notification. ( 3 ) THE appellant denied the claim and submitted that the mining operation of the respondent was not in operation prior to its acquisition. Compensation of Rs. 1,49,546. 29 was tendered to the respondent for the construction of foundation and of building, but, the respondent did not receive the payment, hence, the said amount was deposited which was received by the respondent on 21-9-1990. ( 4 ) THE Tribunal on the pleadings of the parties framed as many as 14 issues. Compensation of Rs. 1,49,546. 29 was tendered to the respondent for the construction of foundation and of building, but, the respondent did not receive the payment, hence, the said amount was deposited which was received by the respondent on 21-9-1990. ( 4 ) THE Tribunal on the pleadings of the parties framed as many as 14 issues. After appraisal of evidence adduced by the parties, the Tribunal recorded a finding that the mining lease for three years was granted to the respondent commencing from 8-3-1987 to 7-3-1990 which contained a clause-15 for its renewal. The tribunal dealt with itemwise claim and held that the respondent purchased the crusher machine for Rs. 2 lacs and for its establishing, the respondent spent in construction of the concrete foundation Rs. 3,60,000/-, for construction of the building Rs. 50,000/-, Rs. 15,000/- in obtaining the electric connection, Rs. 562. 50 expenses in execution of mining lease deed. The claim of Rs. 51,000/- of loss of earning at the rate of Rs. 3,000/- per month for the reminder period of lease, i. e. one year five months, Rs. 75,000/- of subsidy not received from the commerce and Industry Department, Rs. 1 lac of loss suffered because of he left the Government service as he was employed as Sub-Engineer for carrying on crusher business, Rs. 22,616/- of minimum electricity consumption charges for a period of 17 months of which the demand was made vide Ex. P/2 dated 11-7-1989 were disallowed as not permissible u/s. 13 and 14 of the Act. A total compensation of Rs. 6,25,562/- was found payable to the respondent wherein a deduction of Rs. 1,49,546. 36 deposited by the appellant was made. Thus, the Tribunal made an award of Rs. 4,76,015. 65/-, in addition to this, 30 per cent as solatium and interest at the rate of 5 per cent per annum on Rs. 4,76,015. 64/- from 8-11-90 for a period of five years and 4 per cent per annum after a period of five years till payment were also awarded. ( 5 ) SHRI P. S. Nair learned counsel for the appellant contended that Section 13 and 14 of the Act lay down the principles and the manner in which the compensation should be determined and given. Only fair compensation is to be awarded in the dispute if the person interested proves his itemized claim by leading legal evidence. ( 5 ) SHRI P. S. Nair learned counsel for the appellant contended that Section 13 and 14 of the Act lay down the principles and the manner in which the compensation should be determined and given. Only fair compensation is to be awarded in the dispute if the person interested proves his itemized claim by leading legal evidence. Effective cross-examination or non-leading evidence in rebuttal should not weigh the Tribunal in making the award, Award of Rs. 2 lacs of the value of the crusher is illegal as the purchase value of the crusher has not been proved. Besides the crusher so erected ought to have been removed by the claimant which was not removed. Award of solatium of 30 per cent in addition to the amount of compensation determined is illegal. Counsel cited the decisions in M/s. Burrakur Coal Co. Limited v. Union of India, AIR 1961 SC 954 . Union of India v. Sher Singh, (1996) 4 SCC 549 : ( AIR 1996 SC 3343 ) and Modi P. R. v. Collector, Durg 1975 Jab LJ 595 : (AIR 1975 Madh Pra 57 ). ( 6 ) SHRI A. K. Pathak learned counsel for the respondent submitted that the respondent has proved his claim in the dispute by examining himself and AW-2 Bishandas. For establishing crusher the respondent had to take loan from the Bank. The respondent constructed concrete foundation in the area of 25x30x35 feet and a building for establishing and carrying on its business. The measurements of the constructions were made by the representative of the appellant. The calculation of the compensation shown in Ex. D/1 is incorrect. Therefore, the Tribunal rightly awarded the amount of expenses incurred in construction of the concrete foundation and building. Value of the crusher with its fittings was about Rs. 2,50,000/- as is evident from invoices and vouchers which are on record, but the Tribunal awarded only Rs. 2,00,000/ -. The staff of the appellant did not allow the crusher to be removed which as a fact was found by the Tribunal, therefore, the Tribunal rightly awarded the amount of Rs. 2,00,000/- in the said head. Now even if the crusher is allowed to be removed, it will be of no use. 2,00,000/ -. The staff of the appellant did not allow the crusher to be removed which as a fact was found by the Tribunal, therefore, the Tribunal rightly awarded the amount of Rs. 2,00,000/- in the said head. Now even if the crusher is allowed to be removed, it will be of no use. Relying on the decision of the Supreme Court in Narain Das Jain (since deceased) by LRs v. Agra Nagar Mahapalika, Agra (1991) 4 SCC 212 : (1991 AIR SCW 540) it was submitted that solatium and interest thereon must be paid in all cases even if land acquired under any other statute where no specific provision for solatium is made. ( 7 ) WHERE the Central Government acquires any area of the land with its quality and quantity of coal therein and declaration is made to that effect u/s. 9 of the Act the amount of compensation payable under the Act can be fixed by the agreement which is to be paid to the 'person interested' as defined u/s. 2 (d) of the Act that is who claims an interest in compensation to be made on account of the acquisition of rights in or over land. If the compensation is not fixed by agreement u/s. 14 (1) of the Act, the Tribunal constituted u/s. 14 (2) of the Act on a reference is made of the dispute u/s. 17 (2) of the Act, after hearing the dispute has to make an award u/s. 14 (5) of the Act determining the amount of compensation which appears it to be just having regard to the circumstances of the case and under the provisions of the Act with respect to the manner in which the amount of compensation which shall be determined in so far as the said provisions or any of them may be applicable. ( 8 ) SECTION 13 and 14 of the Act deal with the compensation and its determination. Section 15 deals with the award of costs of the Tribunal. Section 15 deals with the award of costs of the Tribunal. Section 16 deals with the award of interest on awards made by the Tribunal. We may usefully reproduce here Section 13 and 14 which are relevant for consideration of the contention raised by the appellant in relation to the determination of compensation and solatium :"13. Section 15 deals with the award of costs of the Tribunal. Section 16 deals with the award of interest on awards made by the Tribunal. We may usefully reproduce here Section 13 and 14 which are relevant for consideration of the contention raised by the appellant in relation to the determination of compensation and solatium :"13. Compensation for prospecting licences ceasing to have effect, rights under mining leases being acquired, etc.- (1) Where a prospecting icence ceases to have effect under Section 5, there shall be paid to the person interested compensation, the amount of which shall be a sum made up of all items of reasonable and bona fide expenditure actually incurred in respect of the land, that is to say,- (i) the expenditure incurred in obtaining the licence; (ii) the expenditure, if any, incurred in respect of the preparation of maps, charts and other documents relating to the land, the collection from the land of cores or other mineral samples and the due analysis thereof and the preparation of any other relevant records or material; (iii) the expenditure, if any, incurred in respect of the construction of roads or other essential works on the land, if such roads or works are in existence and in a usable condition; (iv) the expenditure, if any, incurred in respect of any other operation necessary for prospecting carried out in the land. (2) Where the rights under a mining lease are acquired under this Act, there shall be paid to the person interested compensation, the amount of which shall be a sum made up of the following items, namely.- (i) if the lease was granted after prospecting operations had been carried out in respect of the land under a prospecting licence, the sum of all items of reasonable and bona fide expenditure actually incurred with respect to the matters specified in clauses (i), (ii), (iii) and (iv) of sub-section (1) before the date of the lease :provided that where two or more leases had been granted in relation to any land covered previously by one prospecting licence, only so much of the expenditure aforesaid as bears to the total expenditure the same proportion as the area under the mining lease in respect of which the rights have been acquired bears to the total area covered by the mining leases shall be payable under this clause; (ii) any reasonable and bona fide expenditure of the nature referred to in clauses (i), (ii) and (iii) of sub-section (1) actually incurred in relation to the lease, together with the salami, if any, paid for obtaining the lease; (iii) the expenditure, if any, incurred by way of payment of dead-rent or minimum royalty during any year or years when there was no production of coal; (iv) interest on any such expenditure referred to in clauses (i), (ii) and (iii) as has actually been incurred upto the year in which the rights under the lease are acquired, interest being calculated in the following manner, that is to say, - interest at the rate of five per centum per annum in respect of the expenditure incurred during each calender year for the first five years commencing from the year in which such expenditure was incurred plus interest at the rate of four per centum per annum in respect of each subsequent year after the expiration of the first five years and ending with the year in which the rights under the lease are acquired :provided that the total sum payable under this clause shall not exceed one-half of the total amount referred to in clauses (i), (ii) and (iii), (3) Where the rights under a mining lease acquired under Section 9 relate only to a part of the land covered by the mining lease, the amount of compensation payable shall be such as bears to the total compensation which would have been payable if the rights of the mining lease in respect of the entire land had been acquired the same proportion which the area of the land in respect of which the rights are acquired bears to the total area of the land covered by the mining lease. (4) Where a mining lease ceases to have effect for any period under clause (b) of Section 5, there shall be paid by way of compensation for the period during which the lease so ceased to have effect, a sum equivalent to five per centum of any such expenditure as is referred to in clauses (i) and (iii) of sub-section (2) for each year during which the lease remains suspended. (5) Where any land is acquired under Section 9, there shall be paid compensation to the person interested the amount of which shall be determined after taking into consideration - (a) the market value of the land at the date of the publication of the notification under sub-section (1) of Section 4;explanation.- The value of any minerals lying in the land shall not be taken into consideration in determining the market value of any land; (b) the damage sustainedby the person interested by reason of the taking of any standing crops of trees which may be on the land at the time of the taking possession thereof; (c) the damage, if any, sustained by the person interested, at the time of taking possession of the land, by reason of severing such land from other land; (d) the damage, if any, sustained by the person interested, at the time of taking possession of the land, by reason of the acquisition injuriously affecting his other immovable property in any other manner, or his earnings; (e) if, in consequence of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change; and (f) the damage, if any, bona fide resulting from diminution of the profits of the land between the time of the publication of the notification under sub-section (1) of Section 4 and the time of the publication of the declaration under sub-section (2) of Section 9. (5a) In determining the amount of compensation for any land acquired under Section 9, any increase to the value of the other land of the person interested, likely to accrue from the use to which the land acquired will be put shall not be taken into consideration. (5a) In determining the amount of compensation for any land acquired under Section 9, any increase to the value of the other land of the person interested, likely to accrue from the use to which the land acquired will be put shall not be taken into consideration. (6) Where any operation carried on by or on behalf of the Central Government in the exercise of any powers conferred by this Act causes or is likely to cause damage to the surface of any land or any works thereon and in respect thereof no provision for compensation is made elsewhere in this Act, the competent authority shall pay or tender payment for all such damage, and, in case of dispute as to the sufficiency of the amount so paid or tendered or as to the person to whom it is to be paid or tendered, he shall refer the dispute to the decision of the Tribunal. (7) No compensation under this section in relation to maps, charts and other documents shall be paid unless the person to whom it is payable has delivered to the prescribed authority all the maps, charts and other documents. ""14. Method of determining compensation.- (1) Where the amount of any compensation payable under this Act can be fixed by agreement, it shall be paid in accordance with such agreement. (2) Where no such agreement can be reached, the Central Government shall constitute a Tribunal consisting of a person who is or has been or is qualified to be a Judge of a High Court for the purpose of determining the amount. (3) The Central Government may in any particular case nominate a person having expert knowledge in mining to assist the Tribunal, and where such nomination is made, the person or persons interested may also nominate any other person for the same purpose. (4) At the commencement of the proceedings before the Tribunal the Central Government and the person interested shall state what in their respective opinions is a fair amount of compensation. (4) At the commencement of the proceedings before the Tribunal the Central Government and the person interested shall state what in their respective opinions is a fair amount of compensation. (5) The Tribunal shall, after hearing the dispute make an award determining the amount of compensation which appears to it to be just and specify the person or persons to whom the compensation shall be paid; and in making the award the Tribunal shall have regard to the circumstances of each case and to the foregoing provisions of this Act with respect to the manner in which the amount of compensation shall be determined in so far as the said provisions or any of them may be applicable. (6) Where there is a dispute as to the person or persons entitled to compensation and the Tribunal finds that more persons than one are entitled to compensation, it shall opportion the amount thereof among such persons and in such manner as it thinks fit. (7) Nothing in the Arbitration Act, 1940, shall apply to any proceedings under this mention. (8) The Tribunal, in the proceedings before it, shall have all the powers which a civil Court has while trying a suit under the Code of Civil Procedure, 1908, in respect of the following matters, namely :- (i) summoning and enforcing the attendance of any person and examining him on oath; (ii) requiring the discovery and production of any document; (iii) reception of evidence on affidavits; (iv) requisitioning any public record from any Court or office; and (v) issuing commissions for examination of witnesses. ( 9 ) A reading of the provisions of Section 13 (1) shows that it deals with a case of the claimant who has not acquired a mining lease but holds only a prospecting licence, which ceases to have effect upon issuance of a notification u/s. 4 of the Act, he is entitled to claim from the Government the amount of the expenditure actually incurred by him over obtaining the licence and prospecting due as the notified area would bear to the total area covered by the prospecting operations. Section 13 (2) deals with a case of a claimant whose rights under a mining lease are acquired, such claimant would be entitled u/s. 13 (2) the compensation amount which is to be calculated of the items enumerated in this sub-section. Section 13 (2) deals with a case of a claimant whose rights under a mining lease are acquired, such claimant would be entitled u/s. 13 (2) the compensation amount which is to be calculated of the items enumerated in this sub-section. Section 13 (3) deals with the procedure adopted where the rights under a mining lease acquired u/s. 9 relate only to a part of the land covered by the mining lease. Section 13 (4) deals with compensation to be paid where a mining lease ceases to have effect for any period under Clause (b) of Section 5. Section 13 (5) provides that where any land is acquired under S. 9 the principles to be followed in computing the compensation. Section 13 (5a) lays down that any increase likely to accrue of the other land of the person interested from the use to which land acquired will be put shall not be taken into consideration. Section 13 (6) provides for payment of damages shown to the surface of any land or any works thereon and in respect thereof no provision for compensation is made elsewhere in the Act. Section 13 (7) deals with maps, charts and other documents. Section 14 of the Act deals with the method of claiming a fair amount of compensation and of making of the award of the just compensation by the Tribunal u/s. 14 (5) of the Act. Thus, it is clear from the provisions of Section 13 and 14 that the Act specifies the principles on which and the manner in which the compensation should be determined and given. See - M/s. Burrakur Coal Co. Limited, ( AIR 1961 SC 954 ) (supra ). ( 10 ) FROM a bare reading of Section 13 (2) and Section 14 it is clear that no provision has been made to award solatium in addition to determined compensation payable, therefore, the Tribunal constituted under the Act had no jurisdiction to award solatium. A Division Bench of this Court in Tata Iron Steel Co. Calcutta v. Union of India, 1977 MPLJ 744 after referring to Section 13 and its scheme following a decision of Patna High Court in East India Coal Co. A Division Bench of this Court in Tata Iron Steel Co. Calcutta v. Union of India, 1977 MPLJ 744 after referring to Section 13 and its scheme following a decision of Patna High Court in East India Coal Co. Ltd v. The Union of India, (AIR 1974 Patna 48) has observed that a claim for solatium is permissible only to such claimant where no acquisition is made u/s. 9 of the Act, and notification u/s. 4 ceases to have effect in accordance with provisions of Section 7 (2) on expiry of three years from the date thereof. If, however, within three years a declaration of acquisition is made u/s. 9, then there is no question of effect of notification ceasing of efect under Section 5 (b) coming to an end. A claimant whose mining lease is acquired is entitled to compensation only as calculated by Section 13 (2 ). He cannot claim over and above that compensation any solatium u/s. 13 (4) of the Act. ( 11 ) IT is also well settled that in the absence of any provision for payment of solatium in addition to determined compensation payable in a statute the solatium cannot be granted. See cases under Requisitioning and Acquisitioning of Immovable property Act, 1957. Union of India v. Sher Singh (1996) 4 SCC 549 : ( AIR 1996 SC 3343 ) Union of India v. Hari Krishan Khosla (dead) by L. R. 1993 Supp (2) SCC 149 : (1993 AIR SCW 105) Union of India v. Ajaib Singh, AIR 1996 SC 3148 . Therefore, it is abundantly clear that the Tribunal illegally awarded 30 per cent solatium which cannot be allowed to the respondent. ( 12 ) RESPONDENT's reliance on decision in Naravandas Jain (1991 AIR SCW 540) (supra) of the Supreme Court is of no help as that is not a case under the Act. The Supreme Court while considering the case of the land acquisition, considered the provisions of Section 36 and 56 and the schedule of U. P. Town Improvement Act 1990 which adopted the provisions of the Land Acquisition Act 1894. The Supreme Court after referring to the decision in Omprakash v. State of U. P. (1974) 1 SCC 628 : ( AIR 1974 SC 1202 ) observed in para 8 thus :"8. The Supreme Court after referring to the decision in Omprakash v. State of U. P. (1974) 1 SCC 628 : ( AIR 1974 SC 1202 ) observed in para 8 thus :"8. It is pertinent to note here that the claim of the appellant to solatium was not entertainable before the Land Acquisition Collector, taking proceedings of the acquisition under the U. P. Town Improvement Act in the absence of a provision allowing it. Rather the amendments and modifications set out in the schedule attached to the U. P. Town Improvement Act read that way. The payment of solatium as awardable under Section 23 (2) of the Land Acquisition Act was specifically not made applicable to the land acquired under the U. P. Town Improvement Act. Such amendment to the schedule, however, being violative of Article 14 of the Constitution was struck down by this Court on December 14, 1973 in Om Prakash v. State of U. P. (supra ). This Court took the view that if the government could acquired land for a Mahapalika or other local body by resort either to the Land Acquisition Act or the U. P. Town Improvement Act, it would in the former case have to pay solatium and in the later case not at all and which would lead to discrimination, and consequentially granted relief of solatium to the land owner whose land was acquired. On the law laid down by this Court, the High Court rightly took the view that since the amendments made to the schedule to the Town Improvement Act had gone out of the way of the appellant, the compensation due to him would have to be assessed in accordance with the providions of Section 23 of the Land Acquisition Act. Holding so, the High Court awarded solatium on the amount enhanced by it and for that part rightly. " ( 13 ) COMING to the determination of the amount of compensation of items of claims : that is construction of concrete foundation for installing and establishing the stone crusher, construction of building, installation expenses incurred in electricity connection and execution of quarry lease-deed, the award of the Tribunal is based on the evidence adduced by the respondent which remains un-rebutted. Besides, the measurements were made by the respresentatives of the appellant of the concrete foundation and that measurements are on record of which the value was estimated of the construction by the representatives/employees of the appellant, carbon copy of which is Ex. P/1. Then how the amount was reduced from Rs. 3,60,000/- to Rs. 1,14,000/- has not been explained nor any evidence has been led to rebut the claim. Therefore, the award of compensation for the two constructions cannot be said to be without any material. As to the value of the crusher the Tribunal awarded Rs. 2 lacs on the evidence of respondent. Photo copy of purchase documents are also on record. Submission of learned counsel for appellant that its value cannot be more than Rs. 50,000/- is without any material. The fact that now the crusher has lost its value, the respondent can also not be directed to remove, the machinery of the crusher. The appellant would be free to realize the sale proceeds by the sale of stone crusher machine and its fittings of which the compensation has been awarded. ( 14 ) AS an upshot of above, the appeal is partly allowed while maintaining the award of Rs. 4,76,015. 64 and interest thereon as awarded by the Tribunal, the award of 30 per cent of the solatium in addition to Rs. 4,76,015. 64 is set aside. In the circumstances, parties to bear their own costs. Appeal partly allowed. .