Special Land Acquisition Officer v. Russi C. Trombaywalla & others
2004-08-05
S.C.DHARMADHIKARI
body2004
DigiLaw.ai
JUDGMENT - DHARMADHIKARI S.C., J.:-Whether it is permissible for this Court to grant benefits under section 23(2) and section 34 of the Land Acquisition Act, 1894 in favour of claimants, even when claimants do not press their claim for enhanced compensation in a land acquisition reference is the question posed for my answer in this matter. The above question also arises in the context of claimants who by virtue of disability, illness, old age etc. are not able to attend the Court and substantiate their claim for enhanced compensation. The reference are pending for several years in this Court. The claimants, therefore, feel that instead of taking the trouble of proving the case for enhanced compensation by leading evidence, which is difficult to obtain at their age, as well as on account of several other factors, if they get the benefit given by the statute on the amount awarded by the Collector in the award that would suffice their purpose. They, therefore, opt for statutory benefits and not pressed their plea for enhanced compensation. The Court has been awarding these benefits in the facts and circumstances before it by applying the relevant and statutory provisions including those introduced by Amendment Act. This is one such case. 2. The question arises in the backdrop of a practice prevalent in the Reference Court. It was brought to my notice by learned Advocates appearing for claimants in land acquisition references that this Court has been granting the benefits under the abovementioned statutory provisions even when they have been unable to substantiate their claim for enhanced compensation. In some cases, they contend, that claimants have been giving up their claims for enhanced compensation on the basis that S.L.A.O. and acquiring body would grant statutory benefits. They point out that the practice has been prevailing because even Counsel appearing for S.L.A.O. and acquiring body have not objected to the same. 3. When the present reference was placed before me, Shri Rele, learned Advocate appearing for claimants contended that the award in the present case was made on 29th September, 1979 and reference was made in 1983. He invites my attention to consent minutes of order dated 24th April, 1987 whereby 1/3rd increase in the market value was effected. However, Union of India filed special leave petition in the Supreme Court of India. The Supreme Court remanded the matter back on 8th May, 1995.
He invites my attention to consent minutes of order dated 24th April, 1987 whereby 1/3rd increase in the market value was effected. However, Union of India filed special leave petition in the Supreme Court of India. The Supreme Court remanded the matter back on 8th May, 1995. During the pendency of reference, claimant Nos. 1 and 3 expired. He submits that during the pendency of this reference amendments of 1984 to the Land Acquisition Act came into force. He submits that the award grants to the claimants total compensation of Rs. 1,86,648.45 out of which Rs. 90,382/- has been paid as advance compensation. The net amount payable was Rs. 96,266.45. The claimants had in the application under section 18(1) pointed out that they have received compensation of Rs. 1,62,303/- exclusive of 15% solatium according to the award. Claimants pointed out in the application that the compensation ought to have been Rs. 2,85,175/- for land wells, and structures inclusive of solatium. 4. Shri Rele submits that today the position is that the surviving claimant is unable to substantiate his claim made vide this reference. However, he submits that since reference was pending on 24th September, 1984 the claimant is entitled to solatium under section 23(2) of the L.A. Act. He is also entitled to the benefit of proviso to section 28 of L.A. Act. He computes the benefit thus : (i) 15% additional solatium; (ii) In addition interest at 15% under section 28 proviso (9% for the first year since possession was already taken in 1940 as property was requisitioned), 15% balance interest vide the aforesaid proviso be granted; 5. In substance Mr. Rele submits that although, the claimant is unable to substantiate his case by leading evidence independently in support thereof, this Court should dispose of the reference by granting the benefits of the aforesaid nature on the amount awarded by S.L.A.O. He submits that this is permissible in law as well as this has been the consistent practice of this Court. 6. Shri Rajguru, learned Counsel appearing for S.L.A.O. objects to grant of any benefit and disposal of the reference in the manner prayed by Shri Rele. Shri Rajguru submits that the practice followed by this Court is contrary to law.
6. Shri Rajguru, learned Counsel appearing for S.L.A.O. objects to grant of any benefit and disposal of the reference in the manner prayed by Shri Rele. Shri Rajguru submits that the practice followed by this Court is contrary to law. He submits that if the reference is not proceeded with, inasmuch as when, the claim for enhanced compensation is not pressed, then, there is no award of the Reference Court. If there is no award of the Reference Court, then it is not open to grant any benefit on the award of the Special Land Acquisition Officer. In substance, he contends that Reference Court has no jurisdiction, once the claimant does not lead evidence to substantiate his claim for enhanced compensation and the reference stands disposed of in those terms. When such an event occurs, claimant is not entitled to statutory benefits. He submits that there is no award of the Reference Court enhancing compensation, hence, the question of granting any benefits does not arise. Such Rajguru submits that no distinction can be made between an award and additional benefits. In substance, his contention is that when additional compensation is not awarded, there is no jurisdiction to award statutory benefits. 7. He also contends that Amendment Act is applicable only if there is award of Court. If the claimant is not pressing for enhanced compensation, then the order disposing of the reference is not an award within the meaning of section 26 of the L.A. Act. For this reason also the Court has no jurisdiction to award any other benefits or make other orders. He submits that when the claimant has abandoned the claims, then there is no question of Court considering any other prayers. In other words, the claimant has abandoned his claim based upon application under section 18 of the L.A. Act as a whole. 8. Ms. Shastri on the other hand contends that in this case, first payment was made on 31st March, 1973. The entire payment was made on 24th September, 1979 i.e. date of award. Therefore, proviso to section 28 is not attracted. Even otherwise, she submits, the requirements thereof have not been complied with. She places reliance on the decision of the Supreme Court, reported in ( 2004(1) S.C.C. 467 )1. 9.
The entire payment was made on 24th September, 1979 i.e. date of award. Therefore, proviso to section 28 is not attracted. Even otherwise, she submits, the requirements thereof have not been complied with. She places reliance on the decision of the Supreme Court, reported in ( 2004(1) S.C.C. 467 )1. 9. As the issue posed for my consideration touches jurisdiction of this Court, I made it clear that other Advocates interested in addressing this Court were free to do so. In response thereto, Shri Korde, learned Senior Counsel appearing in some other reference contended that the practice prevalent in this Court is not only consistent with the L.A. Act as unamended but even after Amendment Act read with transitional provisions, it is permissible for this Court to grant the benefits. That apart, Shri Korde submits that the basic premise upon which the argument of Shri Rajguru is based is fallicious. He submits that confusion arises because of the word "compensation". He submits that what is contemplated by section 23(2) and section 23(1)(a) is an arithmetical and mechanical process. He submits that a term used in the Act but not defined therein must be construed with reference to its general meaning. Such a meaning must be attributed to this term through out the L.A. Act. In this behalf, he contends that the word "compensation" has not been defined in L.A. Act. He submits that the term "award" also has not been so defined. He submits that to avoid absurdity, it is necessary that some meaning should be given to these terms otherwise, it will have different meanings in the same Act. He submits that the statutory benefits are nothing but element of compensation. He submits that solatium is also nothing but compensation. He submits that various sections appearing in Part III have to be read together and as a consistent whole. So read with other provisions, it is abundantly clear that the Court is not powerless in granting statutory benefits. Instead, the Court makes an award even if it does not enhance compensation at the instance of claimant. The order of the Court disposing of the reference in this manner is nothing but an award of Court.
So read with other provisions, it is abundantly clear that the Court is not powerless in granting statutory benefits. Instead, the Court makes an award even if it does not enhance compensation at the instance of claimant. The order of the Court disposing of the reference in this manner is nothing but an award of Court. That award is one of affirmance or in any event an order not inclining to interfere with the compensation as awarded by S.L.A.O. Hence, at such a stage also it is permissible for the Court to grant benefits on the compensation awarded by S.L.A.O. and that would constitute award of the Court. Hence, there is nothing illegal about the course adopted and practice followed in this Court. 10. For property appreciating these contention reference to relevant statutory provisions is necessary. 11. The L.A. Act, 1894 is an Act to amend the law for the acquisition of land for public purpose and for companies. It was thought necessary to amend the law for acquisition of land needed for public purpose and for companies and for determining the amount for compensation to be made on account of such acquisition and, therefore, this Act was enacted. From a perusal of the definitions appearing in section 3 of the L.A. Act it is clear that two words viz. "AWARD" and "COMPENSATION" have not been defined in the Act. This is with an obvious intention. This aspect will be referred to by me at a subsequent stage. 12. Part II of the L.A. Act deals with acquisition. I am not concerned with provisions pertaining to acquisition. Section 11 which falls in this part and dealing with enquiry into measurement, value and claims and award by the Collector reads as under: "11.
This aspect will be referred to by me at a subsequent stage. 12. Part II of the L.A. Act deals with acquisition. I am not concerned with provisions pertaining to acquisition. Section 11 which falls in this part and dealing with enquiry into measurement, value and claims and award by the Collector reads as under: "11. Enquiry and Award by Collector:---(1) On the day so fixed, or on any other day to which the enquiry has been adjourned, the Collector shall proceed to enquire into 4th objections (if any) which any person interested has stated pursuant to a notice given under section 9 to the measurements made under section 8 and into the value of the land (at the date of the publication of the notification under section 4, sub-section (1) and into the respective interests of the persons claiming the compensation, and shall make an award under his hand of- (i) the true area of the land; (ii) the compensation which in his opinion should be allowed for the land; and (iii) the apportionment of the said compensation among all the persons known or believed to be interested in the land, of whom, or of whose claims, he has information, whether or not they have respectively appeared before him; Provided that no award shall be made by the Collector under this sub-section without the previous approval of the appropriate Government or of such Officer as the appropriate Government may authorise in this behalf; Provided further that it shall be competent for the appropriate Government to direct that the Collector may make such award without such approval in such class of cases as the appropriate Government may specify in this behalf; (2) Notwithstanding anything contained in sub-section (1), if at any stage of the proceedings, the Collector is satisfied that all the persons interested in the land who appeared before him have agreed in writing on the matters to be included in the award of the Collector in the form prescribed by rules made by the appropriate Government, he may, without making further, enquiry, make an award according to the terms of such agreement. (3) The determination of compensation for any land under sub-section (2) shall not in any way affect the determination of compensation in respect of other lands in the same locality or elsewhere in accordance with the other provisions of this Act.
(3) The determination of compensation for any land under sub-section (2) shall not in any way affect the determination of compensation in respect of other lands in the same locality or elsewhere in accordance with the other provisions of this Act. (4) Notwithstanding anything contained in the Registration Act, 1908 (16 of 1908), no agreement made under sub-section (2) shall be liable to registration under that Act. 13. From a perusal of this provision it is clear that upon enquiry into the objections, if any, which any person interested has raised pursuant to a notice under section 9, the Collector shall make an award under his hand of the true area of the land, the compensation which in his opinion should be allowed for the land and apportionment of the same amongst the persons believed by him to be interested in the land. Sub-sections (2) and (3) of section 11 provide for matters to be included in the award by agreement and provisions for compensation in respect of the land referred in sub-section (2) not affecting determination of compensation in respect of other lands in the same locality or elsewhere. After providing for an outer limit for making an award under section 11(A), section 12 gives finality to the award. Sections 14 and 15 provide for powers to summon and enforce attendance of witnesses and production of documents at an enquiry by the Collector and matters to be considered and neglected for determination of compensation by him. 14. Part III of the L.A. Act deals with reference to Court and procedure thereof. Thereunder, section 18(1) provides for an urgent application being made to the Collector requiring the matter specified therein to be referred by him for determination of the Court. Sub-section (2) of section 18 provides for grounds of which objection is taken to the award. Proviso to sub-section 2 gives a period on limitation for making an application seeking reference. Section 19 deals with Collectors statement to the Court. This provision together with sections 20 and 21 sets out scheme for taking cognisance of the reference and its scope.
Sub-section (2) of section 18 provides for grounds of which objection is taken to the award. Proviso to sub-section 2 gives a period on limitation for making an application seeking reference. Section 19 deals with Collectors statement to the Court. This provision together with sections 20 and 21 sets out scheme for taking cognisance of the reference and its scope. Section 22 and 23 are relevant and read as under : "22 Proceedings to be in open Court:---Every such proceeding shall take place in open Court, and all persons entitled to practice in any Civil Court in the State shall be entitled to appear, plead and act (as the case may be) in such proceedings. "23. Matters to be considered in determining compensation:---(1) In determining the amount of compensation to be awarded for land acquired under this Act, the Court shall take into consideration firstly, the market value of the land at the date of the publication of the (notification under section 4 sub-section (1)); Secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or threes which may be on the land at the time of the Collectors taking possession thereof; thirdly, the damage (if any), sustained by the person interested, at the time of the Collectors taking possession of the land, by reason of severing such land from his other land; fourthly, the damage (if any), sustained by the person interested at the time of the Collectors taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings; fifthly, if in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the declaration under section 6 and the time of the Collectors taking possession of the land.
(1-A) In addition to the market value of the land, as above provided, the Court shall in every case award an amount calculated at the rate of twelve percentum per annum on such market value for the period commencing on and from the date of the publication of the notification under section 4 sub-section (1), in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier. Explanation.-In computing the period referred to in this sub-section, any period or periods during which the proceedings for the acquisition of the land were held up on account of any stay or injunction by the order of any Court shall be excluded. (2) In addition to the market-value of the land, as above provided, the Court, shall in every case award a sum of thirty percentum on such market-value, in consideration of the compulsory nature of the acquisition. 15. A perusal of these sections would indicate that in determining the amount of compensation to be awarded for land acquired under L.A. Act, the Court should take into consideration the matters provided in sub-section (1) of section 23. Section 1-A of section 23 states that in addition to the market value of the land, Court shall in every case award an amount calculated at the rate of 12% p.a. on such market value for the period provided in that sub-section. In addition section 23(2) states that the Court shall in every case award a sum of 30% on such market value that is the market value determined vide section 23(1) in consideration of compulsory nature of acquisition. Thus sum is called solatium. Section 24 provides for matters to be included in determining compensation. Section 25 mandates that amount of compensation awarded by the Court shall not be less than the amount awarded by the Collector under section 11. Section 26 has been relied upon by both the sides together with sections 28 and 34. The provisions of these sections read as under : "28.
Section 25 mandates that amount of compensation awarded by the Court shall not be less than the amount awarded by the Collector under section 11. Section 26 has been relied upon by both the sides together with sections 28 and 34. The provisions of these sections read as under : "28. Collector may be directed to pay interest on excess compensation:---If the sum which, in the opinion of the Court, the Collector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation, the award of the Court may direct that the Collector shall pay interest on such excess at the rate of nine per centum per annum from the date on which he took possession of the land to the date of payment of such excess into Court; Provided that the award of the Court may also direct that where such excess of any part thereof is paid into Court after the date of expiry of a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the amount of such excess or part thereof which has not been paid into Court before the date of such expiry." "34. Payment of Interest.---When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited." Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable 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." 16.
From a perusal of section 26, it is clear that award of the Court under the part in which section 26 falls shall be in writing signed by the Judge and shall specify the amount awarded under clause first of sub-section (1) of section 23 and also the amount (if any) respectively awarded under each of the other clauses of the same sub-section together with grounds of awarding each of the said amounts. Such an award of the Court shall be deemed to be a decree and the statement of the ground of every such award a judgment within the meaning of this provision under Code of Civil Procedure, 1908. Section 28 provides for payment of interest on excess compensation, whereas section 34 provides for payment of interest when the amount of compensation is not paid or deposited on or before taking possession of the land by the Collector at the rate of 9% p.a. 17. The correctness of the submissions of Shri Rajguru will have to be tested in the light of these provisions and interpretation placed upon them in decisions of the Supreme Court. Shri Rajguru, invites my attention to judgments of the Supreme Court reported in i) (Union of India v. S.S. Ranade)2, J.T. 1995(2) S.C. 582; ii) (State of Kerala v. Betty Mani1)3, 1995 Supp(2) S.C.C. 706; iii) (State of Maharashtra v. Maroti Laxman)4, J.T. 1996(5) S.C. 73; iv) (Prem Nath Kapur v. National Fertilizers Corporation of India Ltd)5, 1996(2) S.C.C. 71 ; v) (State of Assam v. Jitendra Kumar Senapati)6, A.I.R. 1981 S.C. 969; and a decision of this Court reported in vi) (Mangilal Jawanmal v. Spl. Land Acquisition Officer (I),Thana)7, A.I.R. 1978 Bom. 325. 18. According to Shri Rajguru in these judgments, the Supreme Court has settled the principle that if the Court does not proceed with the reference then it does not make any award and once it does not make any award on the reference, then it has no jurisdiction to grant any benefits much less the benefits such as solatium and interest. Shri Rajguru contends that from these decisions it is apparent that only when the Court enhances the compensation that it gets the necessary authority, power and jurisdiction to award or grant other benefits but when it declines to do so, the question of their grant does not arise. 19.
Shri Rajguru contends that from these decisions it is apparent that only when the Court enhances the compensation that it gets the necessary authority, power and jurisdiction to award or grant other benefits but when it declines to do so, the question of their grant does not arise. 19. Both Shri Rajguru as well as Shri Korde have placed strong reliance upon a Constitution Bench decision of the Supreme Court reported in (Sunder v. Union of India)8, A.I.R. 2001 S.C. 3516. Shri Korde submits that this decision is a complete answer to the submissions of Shri Rajguru canvassed before me. Therefore, a detailed reference is necessary to this decision. 20. The issue before the Supreme Court in the Constitution Bench decision was whether the State is liable to pay interest on the amount envisaged under section 23(2) of the L.A. Act. The Supreme Court proceeded on the basis that sum is called solatium. The Supreme Court was considering the above question in the light of the conflict in two decisions rendered by there member benches of the same. The Supreme Court has observed that power of granting interest on the sums involved in the land acquisition proceedings is endowned in two provisions of the Act. In this context, this is what is observed by the Supreme Court in paras 2 to 6. "2. The power of granting interest on the sums involved in land acquisition proceedings is endowed in two provisions of the Act. Section 34 enjoins on the Collector to pay interest at two tier rates. For the first state, from the date of taking possession until disbursement of the awarded amount the rate is 9% per annum. If such disbursement is delayed beyond one year the rate of interest would escalate to 15% per annum from the date of expiry of the said period of one year. Section 28 of the Act contains the same postulates and it is supplementary to the above provision. It empowers the Court to direct the Collector to pay interest at the above two tier rates on the excess sum awarded by the Court. The real question is whether in calculating the interest, as mentioned in the said provisions, the amount of solatium envisaged in section 23(2) of the Act should be included in or excluded from the sum on which interest is liable to be paid." "3.
The real question is whether in calculating the interest, as mentioned in the said provisions, the amount of solatium envisaged in section 23(2) of the Act should be included in or excluded from the sum on which interest is liable to be paid." "3. In (Union of India v. Shri Ram Mehar)9, A.I.R. 1973 S.C. 305 (supra) the three Judge Bench considered the scope of the expression "market value" in section 4(3) of the Land Acquisition (Amendment and Validation) Act, 1967. By the said Amendment Act certain changes were effected in the principal Act. Section 4(3) of the Amendment Act provided that simple interest shall be paid at the rate of 6% per annum "on the market value of such land as determined under section 23 of the Principal Act" from the date of expiry of three years to the date of notification under section 4(1) of the Principal Act. Learned Judges held that solatium cannot from part of the market value of the land. It was also held that "market value" is only one of the components to be reckoned in the determination of the amount of compensation. The following observations made by the Bench is highlighted to be the ratio of the decision : "If market value and compensation were intended by the Legislature to have the same meaning it is difficult to comprehend why the word "compensation" in sections 28 and 34 and not "market value" was used. The key to the meaning of the word "compensation" is to be found in section 23(1) and that consists (a) of the market value of the land, and (b) the sum of 15% on such market value which is stated to be the consideration for the compulsory nature of the acquisition. Market value is, therefore, only one of the components in the determination of the amount of compensation. If the legislature has used the word "market value" in section 4(3) of the Amending Act of 1967 it must be held that it was done deliberately and what was intended was that interest should be payable on the market value of the land and not on the amount of compensation otherwise there was no reason why the Parliament should not have employed the word "compensation" in the aforesaid provision of the Amending Act." "4.
That decision was followed by a two Judge Bench of this Court in (Periyar and Pareekanni Rubbers Ltd. v. State of Kerala)10, 1991(1) S.C.C. 195. Learned Judges (L.M. Sharma. J., as he then was, and K. Ramaswamy, J) in the concluding part of that decision said as follows : "Therefore, we have no hesitation to hold that section 25(3) contemplates payment of interests on solatium to re compensate the owner of the land for loss of user of the land from the date of taking possession till date of payment into Court. The word compensation has been advisedly used by the Legislature. Accordingly we hold that the appellant is entitled to interest on solatium." "5. The turn of the tide in the reverse direction commenced when a three Judge Bench adopted the contrary view in the Land Acquisition Officer under section 11 and paid to the party or deposited into the Court or determined under section 26 of section 54 and deposited into the Court or on solatium under section 23(2) and the additional amount under section 23(1-A). But the question whether solatium is part of the compensation did not positively arise in the said decision nor has it been gone into by the learned Judges." "6. However, such a question has been considered directly by another three Judge Bench (K. Ramaswamy, S. Saghir Ahmad and G.B. Pattanaik, JJ.) in (Yadavrao P. Pathade v. State of Maharashtra)11, 1996(2) S.C.C. 570 . Learned Judges made a reference to the observation of the two Judge Bench in Periyar and Pareekanni Rubbers Ltd. (supra) to the effect that solatium is the component forming the compensation mentioned in section 23 of the Act and hence interest would accrue on it. Nonetheless learned Judges dissented from the view in Periyar and Pareekanni Rubbers Ltd. By stating that "unfortunately neither the provisions of the Act were considered nor the distinction of the provisions had been brought to the notice of the Court at that time." The Bench referred to section 23(1) of the Act and laid emphasis on the words "in addition to the market value" in sub-section (2) of section 23. Hence it was held thus : The Legislature, therefore, made a distinction between compensation under section 23(1) and the additional amount on such market value as solatium in consideration of compulsory nature of acquisition.
Hence it was held thus : The Legislature, therefore, made a distinction between compensation under section 23(1) and the additional amount on such market value as solatium in consideration of compulsory nature of acquisition. In other words, section 28 does not comprehend payment of interest on solatium when it expressly mentions payment of interest on compensation under section 28 refeable to section 23(2) of the Act." 21. These observations were in the context of the law laid down in two Judges and three Judges decision of the Supreme Court to which a reference has been made therein. Thereafter, the Supreme Court proceeded to consider the question before it in the light of rival submissions. After referring to the scheme of the L.A. Act, this is what is observed by the Supreme Court in paras 12 to 16 of this decision : "12. Section 11 of the Act enjoins on the Collector the statutory duty to conduct an inquiry into the value of the land on the date of publication of the notification under section 4(1) of the Act and to make an award for the "compensation" which in his opinion should be allowed for the land. Section 31 of the Act casts obligation on the Collector that after making the award under section 11 he shall tender payment of "the compensation awarded by him" to the persons entitled to it according to the award. This means that law does not relish any delay in making the payment once the award is made. Thus, making the award shall normally follow payment of compensation as expenditiously as possible." 13. Section 16 empowers the Collector to take possession of the land after making the award under section 11. When possession is so taken the land shall vest absolutely in the Government free from all encumbrances. This is the statutory operation which is clearly envisaged in section 16 itself. But in the absence of a legal insistence that the amount awarded should necessarily be paid before taking possession of the land it could happen, perhaps quite often, that there would be some interregnum between the date of taking possession and making payment of the awarded sum. 14. Question of payment of interest would arise only when the compensation is not paid or deposited on or before the date of taking possession of the land.
14. Question of payment of interest would arise only when the compensation is not paid or deposited on or before the date of taking possession of the land. It is inequitable that the person who is deprived of the possession of the land, on account of acquisition proceedings is not given the amount which law demands to be paid to him, any delay thereafter would only be to his detriment. There must be a provision to buffet such inequity. It is for the purpose of affording relief to the person who is entitled to such compensation when the payment of his money is delayed that the provision is made in section 34 of the Act. 15. When the Court is of opinion that Collector should have awarded a larger sum as compensation the Court has to direct the Collector to pay interest on such excess amount. The rate of interest is on a par with the ate indicated in section 34. This is so provided in section 28 of the Act which is extracted below : ... ... ... ... 16. Thus interest has to accure as per sections 34 and 28 of the Act on the compensation awarded, whether it is as per the award initially passed by the Collector or by the Court later. What is meant by "the compensation" awarded? Both sides cited different definitions for the word "compensation" as contained in different lexicographys. In "Words and Phrases" (Permanent Edn.) different connotations of the word "compensation" have been delineated. One of them relates to the law of eminent domain. 22. In this decision the Supreme Court has made specific reference to sections 24 and 26 and observed that section 26 does not say that the award would contain only the amounts granted under section 23(1). The special mention of sub-section (1) in section 26 is only for the purpose of directing that the ground or reasons for awarding the amount under each of the Clause of sub-section shall be specified in the award. Paras 19 to 22 of the Constitution Bench decision are relevant for the purpose of interpretation of sections 23, 26 and 28. The same are reproduced below : 19. Section 26 does not say that the award would contain only the amounts granted under sub-section (1) of section 23.
Paras 19 to 22 of the Constitution Bench decision are relevant for the purpose of interpretation of sections 23, 26 and 28. The same are reproduced below : 19. Section 26 does not say that the award would contain only the amounts granted under sub-section (1) of section 23. The special mention of that sub-section in section 26 is only for the purpose of directing that the grounds or reasons for awarding the amount under each of the Clauses in the sub-section (Mir Fazeelath Hussain v. Special Deputy Collector)12, 1995(3) S.C.C. 208 ; wherein learned Judges held that solatium is not a part of the award and hence interest is not claimable thereon. We may point out that the decision of the three Judge Bench in Union of India v. Shri Ram Mehar (supra) was not referred to in Mir Fazeelath Hussain, presumably because it would not have been brought to the notice of the learned Judges. Another three Judge Bench in Prem Nath Kapur v. National Fertilizers Corporation of India Ltd., 1996(2) S.C.C. 71 , while considering the question whether an awarded is entitled to appropriates amount of compensation first towards cost and then towards interest etc., made the observation that "the liability to pay interest is only on the excess amount of compensation determined under section 23(1) and not on the amount already determined by shall be specified in the award. It is unnecessary to mention any reason or ground in any award as to why the sums indicated in sub-section shall be specified in the award. It is unnecessary to mention any reason or ground in any award as to why the sums indicated in sub-section 1-A and sub-section (2) of section 23 of the Act were granted, because they are only the sequels or concomitant adjuncts of the determination of the total amount indicated in sub-section (1). No judicial exercise is required to quantify the sums mentioned in sub-section (1-A) or section (2) because the section itself specifies the percentage to the worked out for the purpose of adding to the total amount arrived at under sub-section (1). Otherwise section 26 is not intended to show that the compensation awarded would be bereft of the additional amount and the solatium envisaged under sub-section (1-A) or sub-section (2).
Otherwise section 26 is not intended to show that the compensation awarded would be bereft of the additional amount and the solatium envisaged under sub-section (1-A) or sub-section (2). This can be clearly discerned from the commencing words of section 26 itself, they are: Every award under this part shall be in writing signed by the Judge." What is referred to therein is part III of the Act which comprises of a fasciculus of twelve provisions starting with section 18 and ending with section 28-A of the Act. There can be no doubt that all the three heads specified in the three sub-sections in section 23 are the sums to be "awarded by the Court". Hence the words "every award under this part" cannot be treated as the award after delinking the amounts awarded under sub-section (1-A) or sub-section (2) of section 23. 20. We may now see whether exclusion of the factor "any disinclination of the person interested to part with the land acquried" from being considered as part of the compensation indicated in section 24 of the Act would be of any aid for excluding solatium from the purview of interest accrual process. No doubt what is intended under section 23(2) is additional to the market value of the land and "In consideration of the compulsory nature of the acquisition". But it cannot be equated with any damage caused on account of any disinclination of the person to part with the land acquired." 21. It is apposite in this context to point out that during the enquiry contemplated under section 11 of the Act the Collector has to consider the objections which any person interested has stated pursuant to the notice given to him. It may be possible that a person so interested would advance objections for highlighting their disinclination to part with the land acquired on account of a variety of grounds, such as sentimental or religious of psychological or traditional etc. Section 24 emphasises that no amount on account of any disinclination of the person interested to part with the land shall be granted as compensation. That aspect is qualitatively different from the solatium which the legislature wanted to provide "in consideration of the compulsory nature of the acquisition" 22.
Section 24 emphasises that no amount on account of any disinclination of the person interested to part with the land shall be granted as compensation. That aspect is qualitatively different from the solatium which the legislature wanted to provide "in consideration of the compulsory nature of the acquisition" 22. Compulsory nature of acquisition is to be distinguished from voluntary sale or transfer, in the latter, the landowner has the widest advantage in finding out a would be buyer and in negotiating with him regarding the sale price. Even in such negotiations or haggling normally no landowner would bargain for any amount in consideration of his disinclination to part with the land. The mere fact that he is negotiating for sale of the land would show that he is willing to part with the land. The owner is free to settle terms of transfer and choose the buyer as also to appoint the point of time when he would be receiving consideration and parting with his title and possession over the land. But in the compulsory acquisition the landowner is deprived of the right and opportunity to negotiate and bargain for the sale price. It depends on what the Collector or the Court fixes as per the provisions of the Act. The solatium envisaged in sub-section (2) "in consideration of the compulsory nature of the acquisition" is thus not the same as damages on account of the disinclination to part with the land acquired." 23. Thereafter, the Supreme Court proceeded to decide the issue of what amount would bear interest under section 34 of the Act. In para 23 of this decision it held that expression "Awarded amount" appearing in section 34 would mean amount of compensation worked out in accordance with the provisions contained in section 23 including all the sub-sections thereof. In pare 24, the Supreme Court considered the proviso to section 34. It held that it is inconceivable that the solatium amount would attract only escalated rate of interest on the expiry of one year and there will be no interest on solatium during the preceding period. According to this decision, the Legislature intended that aggregate amount under section 23 should reach the hands of the person as and when the award is passed or at any rate as soon as he is deprived of possession of his land.
According to this decision, the Legislature intended that aggregate amount under section 23 should reach the hands of the person as and when the award is passed or at any rate as soon as he is deprived of 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 payment. The Legislature has not split up compensation into different components for the purpose of payment of interest under section 34. Thereafter, the Supreme Court has made a reference to decisions of various High Courts in the field and in para 27 quoted with approval the observations of the Division Bench of Punjab and Haryana High Court, reported in (A.I.R. 1980 Punjab Haryana 117)13. The conclusion of their Supreme Court in this decision is that person entitled to compensation awarded is also entitled to get interest on the aggregate amount include solatium. It, therefore, answered the question posed before it accordingly. 24. To my mind, upon noticing the judgment of the Constitution Bench of the Supreme Court it becomes at once clear that there is no substance in the contention that there is no substance in the contention that the Court does not make an award when it refuses to enhance the compensation. The basic fallacy in this submission is that the Court under section 18 of the Act is required to go into the validity and correctness of the award as if it is sitting in appeal or judgment over it. The nature of the proceedings commenced vide section 18 is by now absolutely clear. The Court does not act as a Court of appeal. What the Court is required to do is to determine the compensation. While doing so, the Court does not find out as to whether the SLAO/Collector has erred in determining the compensation by the award. The Court applies its mind to the matters which are required to be taken note of and determine compensation. When the Court does not enhance compensation, it does not mean that it makes no award. On the other hand, a combined reading of the provisions of Part II would demonstrate that while disposing of the reference without enhancing the compensation, the Court specifies the amount awarded under Clause First of section 23(1).
When the Court does not enhance compensation, it does not mean that it makes no award. On the other hand, a combined reading of the provisions of Part II would demonstrate that while disposing of the reference without enhancing the compensation, the Court specifies the amount awarded under Clause First of section 23(1). It may be that this amount is the same as that determined by the Collector. This is because the Court cannot reduce anything which is awarded by the Collector as compensation. Once, the word "compensation" as explained in the Constitution Bench decision is noted, then the order of the Court on the reference is nothing but its award. Once the Court upon reference being forwarded and registered is bound to decide it, in the light of provisions in Part III of the L.A. Act, then, it is clear that this order partakes the character of award. 25. The above aspect becomes further clear if one peruses the decision of the Supreme Court reported in (Khazan Singh (dead) by L.Rs. v. Union of India)14, 2002(Supp. 2) Bom.C.R. (S.C.)834 . In this decision, the issue before the Supreme Court was whether a reference Court can dismiss a reference forwarded to it in default of appearance by claimants. Negativing the contention that it could do so, this is what is observed by the Supreme Court : "6. Section 18 of the Act empowers a person interested in the land to move by a written application to the Collector requiring that the matter is referred for determination of the Court, whether his objection be to the measurement of the land, the amount of compensation, the person to whom it is payable, or the apportionment of the compensation among the persons interested. If the application for reference is in order the Collector is bound to make a reference of it to the Court. Section 20 of the Act enjoins on the Court to "proceed to determine the objection". The Court shall after holding such inquiry as may be necessary pass an award. Section 26 of the Act reads thus : 26.
If the application for reference is in order the Collector is bound to make a reference of it to the Court. Section 20 of the Act enjoins on the Court to "proceed to determine the objection". The Court shall after holding such inquiry as may be necessary pass an award. Section 26 of the Act reads thus : 26. Form of awards:---(1) Every award under this part shall be in writing signed by the Judge, and shall specify the amount awarded under clause first of sub-section (1) of section 23 and also the amounts (if any) respectively awarded under each of the other clauses of the same sub-section, together with the grounds of awarding each of the said amounts. (2) Every such award shall be deemed to be a decree and the statement of the grounds of every such award a judgment within the meaning of section 2, Clause (2) and section Clause (9), respectively of the Code of Civil Procedure, 1908" 7. The provisions above subsumed would thus make it clear that the Civil Court has to pass an award in answer to the reference made by the Collector under section 18 of the Act. If any party to whom notice has been served by the Civil Court did not participate in the inquiry it would only be at his risk because an award would be passed perhaps to the detriment of the concerned party. But non-participation of any party would not confer jurisdiction on the Civil Court to dismiss the reference for default." 26. Therefore, I am unable to accept the submissions of Shri Rajguru that the Court does not have jurisdiction to award solatium and interest while disposing of a reference without enhancing the compensation. 27. There is another way of looking at this aspect. Section 11 read with section 23 and 24 and 25 would go to show that the amounts to be awarded under section 23(2) are in addition to the market value of the land. The market value of the land on the date of publication of notification under section 4(1) is the basis for compensation which the Collector allows for the land. The Collector is obliged to consider the provisions of section 23 and 24 while determining the amount of compensation. The Court, can award compensation in excess of the sum which the Collector awards as compensation.
The Collector is obliged to consider the provisions of section 23 and 24 while determining the amount of compensation. The Court, can award compensation in excess of the sum which the Collector awards as compensation. If the Court does not accept the claimants case of market value being more than at the rate awarded by the Collector that does not mean that the Court does not determine the amount of compensation. The Court does not find any basis to alter the market value of the land fixed at a particular rate by the Collector. However, if the submissions of Shri Rajguru are to be accepted, then merely because the Court does not do so, it will mean that the Court should ignore the mandate of section 23(2) of the Act. That mandate being clear, the Court in every case must award in addition to the market value a sum of 30% on the same as consideration of compulsory nature of acquisition. When the Court is of opinion that Collector should have awarded a larger sum as compensation, the Court has to direct the Collector to pay interest on such excess amount. However, that payment has not to be confused with the payment of solatium, envisaged by section 23(2). That sum, according to the Supreme Court, is not the same as damages on account of disinclination to part with the land acquired but a consideration of compulsory nature of acquisition. On such, sum, interest can be awarded. It is clear that the amount contemplated by section 23(2) is nothing but an amount of compensation. That solatium is part of compensation is clear from the statement of law to be found in the decision of the Division Bench of Punjab and Haryana High Court which has been approved by the Supreme Court in the Constitution Bench decision (supra). Therefore, it is clear that the Court has jurisdiction to award or direct payment of solatium and interest even if, the Court is not awarding anything in excess of or is not enhancing the compensation as determined by the SLAO/Collector in the award. 28. Considering the above, it is clear that the submission of Shri Rajguru are without any force. Insofar as the decisions cited by Shri Rajguru are concerned, therein, the Supreme Court judgment of the Constitution Bench could not have been considered.
28. Considering the above, it is clear that the submission of Shri Rajguru are without any force. Insofar as the decisions cited by Shri Rajguru are concerned, therein, the Supreme Court judgment of the Constitution Bench could not have been considered. These decisions are prior to the judgment of the Supreme Court (Constitution Bench). Suffice it to state that the Constitution Bench decision (delibered by a Bench of five Judges) of the Supreme Court and subsequent in point of time would have to be followed in preference to the decision of lesser number of Judges. Some of the decisions may not be good law in view of the pronouncement of the Constitution Bench. 29. On the other hand, there is much substance in the contention of Shri Korde. The contentions are based upon the scheme of the L.A. Act as interpreted by the Supreme Court. 30. In the view that I have taken it is not necessary for me to make a detailed reference to other decisions of the Supreme Court brought to my notice by Shri Korde. These decisions interpret the provisions of the Amendment Act of 1984 in the light of the transitional provisions. Shri Rajguru has not seriously disputed before me the issue of applicability of the provisions of Amendment Act to the instant award. That is because in the present case, the award was declared on 21st September, 1979. A reference to this Court was made in 1983. By consent minutes of the order dated 24th April, 1987 the reference was disposed of. The Supreme Court remanded the matter upon a special leave petition preferred by Union of India back to this Court on 8th May, 1995. Since the reference was pending on 24th September, 1984 the entitlement of the claimant before me to solatium is not disputed. Suffice it to state that the purpose of the amendment is to bring on par awards for purposes of payment of higher solatium delivered prior to 24th September, 1984 and thereafter. In the instant case, the reference being pending, it is clear that the claimant is entitled to solatium and interest on the same in accordance with section 23(2) and section 28. 31. In this light, the reference by Shri Korde to a decision of the Supreme Court in the case of (Manipur Tea Co.
In the instant case, the reference being pending, it is clear that the claimant is entitled to solatium and interest on the same in accordance with section 23(2) and section 28. 31. In this light, the reference by Shri Korde to a decision of the Supreme Court in the case of (Manipur Tea Co. Pvt. Ltd. v. Collector of Hailakandi)15, reported in A.I.R. 1997 S.C. 1779 is appropriate. The Supreme Court in this decision held that though the word "may" is used in proviso to section 28 of the L.A. Act, it has to be construed as "shall" and, therefore, the claimants before the Supreme Court were held entitled for interest at 9% for enhanced compensation for one year and thereafter at 15% till the date of deposit in Court. Obviously this does not mean that when the compensation is not enhanced, the proviso would not be construed as mandatory. The proviso is mandatory and the benefit thereof ought to be given by the Court is what is held by the Supreme Court. Insofar as the submissions of Ms. Shastri is concerned, section 28 is clear. Even otherwise it is difficult to accept the contention of Ms. Shastri. The Supreme Court in A.I.R. 2001 S.C. 3516 (supra) in para 16 has considered this aspect. Even otherwise, decision brought to my notice by Ms. Shastri reported in 2004(1) S.C.C. 467 also reiterates that the legal position about solatium and interest. The interest on solatium contemplated by section 23(2) in this case would be in accordance with law laid down in these decisions. Before concluding, I must appreciate the efforts taken by Shri Korde, learned Senior Counsel appearing as amicus curaie. His assistance was sought because there are several claimants coming forward with such request. I am very much thankful to him. 32. In the result following order : (a) Depending upon the facts and applicability of the statutory provisions to individual cases, it is held that claimants would be entitled to solatium and interest, even if they do not press or substantiate their claim for enhanced compensation. (b) In the present case, claimants shall be entitled to claim 15% additional solatium/benefit under section 23(2) and interest under section 28 at the rate of 9% p.a. for the first year from the date of taking possession and at the rate of 15% for the period thereafter till payment.
(b) In the present case, claimants shall be entitled to claim 15% additional solatium/benefit under section 23(2) and interest under section 28 at the rate of 9% p.a. for the first year from the date of taking possession and at the rate of 15% for the period thereafter till payment. (c) The payment after taking into account the aforesaid sums should be made by the SLAO to the claimants within a period of eight weeks from the date of receipt of the copy of this order. (d) Reference is disposed of accordingly. (e) All concerned to act on an authenticated copy of this order. Reference answered positively. -----