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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs.            OF 2014 (@ out of SLP (C) Nos.36299-36303/2010)

JAI KRISHAN (D) Thr. LRs.           … APPELLANT

VERSUS

STATE OF UTTARAKHAND & ORS.      … RESPONDENTS

J U D G M E N T

SUDHANSU JYOTI MUKHOPADHAYA, J

Leave granted.

2. These appeals are directed against the judgment and  

order dated 16th July, 2005 passed by the High Court of  

Uttaranchal (now Uttarakhand) at Nainital in first Appeal  

No. 56 of 2001 (Old No.325/1995). By the impugned judgment,  

the Division Bench of the High Court partly allowed the  

appeal preferred by the State of U.P., set aside part of  

the judgment and award dated 23rd March, 1995 passed by the  

Reference Court.

3. The factual matrix of the case is as follows:

A Notification under Section 4 of the Land Acquisition  

Act, 1894 was issued on 14th September, 1977 for the purpose  

of acquiring land measuring 36 acres situated at Glenmire  

Estate, cosycot and cosynook in Mussoorie. The acquisition  

was so made for the purpose of extension of Lal Bahadur  

Shastri  National  Academy  of  Administration,  Mussoorie.

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Thereafter follow up Notification under Section 6 of the  

L.A.Act  was  issued  on  30th January,  1978  which  was  also  

published. The possession of the land was taken over on 3rd  

July,  1986.  The  Special  Land  Acquisition  Officer,  after  

hearing the parties passed the award on 27th November, 1984  

determining the amount of compensation at Rs.4,89,615.75.

4. Col. Jai Krishan (since deceased) represented by Lrs.

(appellant herein)  and Mahesh Chandra- respondent no.8,  

got filed reference  under Section 18 of the L.A. Act.  The  

said reference No. L.A.154 of 1985 heard by the Additional  

District Judge, Dehradun. The aforesaid claimants alleged  

before the Reference Court that considering the fact that  

Mussoorie is a famous tourist place, its land is of immense  

potential value, the market value of the land in question  

is Rs.25 lakh per acre. As such they claimed compensation  

for 36 acres of acquired land. They further claimed that  

the value of the constructed building cannot be assessed  

less  than  Rs.  100/-  per  sq.  feet  and,  therefore,  

considering the plinth area of 3786 sq. feet of Glenmire  

building,  2528  sq.  ft.  of  Cosynook  building  and  other  

construction,  the  valuation  should  be  Rs.6,31,400/-  and  

after  deducting  the  amount  on  account  of  depreciation  

factor the value of building is Rs. 4,73,550/-.  There were  

6990 trees on the aforesaid 36 acres of land. The claimants  

also submitted before the reference court that considering  

the fact that value of the trees which has been assessed @  

Rs.15/- per tree, should have been at least Rs.50/- per  

tree. In reply, the stand of the State of U.P. was that the

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claimants  have  already  claimed  Rs.7,50,000/-  as  

compensation for the acquired land and as such they are not  

entitled to claim any amount more than that. It was further  

pleaded that the land being sloppy and uneven as such it  

cannot  be  assessed  more  than  Rs.5,000/-  per  acre.  The  

respondents  based  their  claim  on  the  basis  of  the  rate  

shown in exemplar sale deed dated 26th December, 1976.

5. The Reference Court after framing necessary issues,  

taking  into  consideration  the  evidence  and  hearing  the  

parties enhanced the amount of compensation of land from  

Rs.1,80,000/-  to  Rs.19,76,000/-  and  that  of  trees  from  

Rs.1,05,155.50  to  Rs.4,00,000/-.  Aggrieved  by  the  order  

passed by the Reference Court the State and Union of India  

preferred the appeal.

6. The Division Bench of Uttarakhand High Court by the  

impugned  judgment  dated  16th July,  2005  applied  the  

principle of Belting area on following presumption:

“No doubt that Mussoorie is an important  tourist place and its land is of immense  potential value but simultaneously it is  also true that the land in Mussoorie is  sloppy and hilly.  As such for assessing a  true  market  value  that  flat  rate,  for  entire  land  of  36  acres,  cannot  be  applied.”

7. The claimants also claimed 12% additional compensation  

u/s 23(1A) of the L.A. Act, which the Court below had not  

granted. The claimants also claimed that they were entitled  

to  receive  a  sum  of  Rs.  7,01,875/-  towards  Fuel  

value/Timber value of the tree standing on the acquired  

land as approved by the retired Forest Ranger. They also

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pleaded that the compensation having been paid after more  

than one year from the date on which possession was taken,  

they are entitled for interest @ 15% per annum as provided  

under proviso to Section 28 of the L.A. Act.  Such claim  

was made by the appellant and another by means of cross-

objections.  However, the High Court without deliberating  

on such issues as raised in the cross objections passed the  

impugned judgment.  In the circumstances, the appellant and  

another preferred Review Petition No. 87 of 2005 before the  

High Court with a petition for condonation of delay.

8. The impugned judgment was delivered on 16th July, 2005  

and a review petition was filed on 15th September, 2005 i.e.  

after  30  days  delay.   The  appellant  and  another  took  

specific plea that their lawyer used to come from Allahabad  

to  Nainital  who  when  came  to  know  about  the  judgment,  

applied for the certified copy of it on 4th August, 2005  

which was delivered on 9th August, 2005. Thereafter sometime  

was  taken  to  file  the  review  petition.  The  High  Court  

dismissed the petition for condonation of delay and review  

petition on the ground of non-prosecution. The restoration  

petition filed by the appellant was also dismissed.  

9. Learned counsel for the appellants submitted that the  

High Court wrongly applied the principle of belting area.  

The 36 acres of land is adjacent to the Lal Bahadur Shastri  

National  Academy  of  Administration.  Mussoorie  and  is  

located  at  tourist  spot.  He  further  contended  that  the  

appellants  were  entitled  for  12%  additional  compensation  

u/s 23(1A) in addition 15% solatium u/s 28 of the L.A.Act

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in view of delayed payment of compensation after more than  

one  year.  The  stand  of  the  learned  counsel  for  the  

respondent-State is that the High Court rightly applied the  

principle  of  belting  area  as  the  land  is  sloppy  and  

uneven.

10. As  noticed  above,  the  High  Court  noticed  that  

Mussoorie is an important tourist place and it is the land  

of  immense  potential  value.  But  without  any  basis  or  

pleadings,  the  High  Court  presumed  that  total  land  in  

Mussoorie  is  sloppy  and  hilly.   The  High  Court  though  

noticed the exemplar sale-deed dated 31.3.1977 (paper no.  

17-C)  which  shows  the  market  value  of  the  land  at  Rs.  

54,896/- per acre and the said sale-deed pertains to the  

land nearer to the Lal Bahadur Sastri National Academy.  

But without any basis, the High Court observed as under:

“We  are  of  the  view  that  the  rate  mentioned  in  this  sale-deed  cannot  be  applied  as  exemplar  for  entire  land  acquired. Value of the land cannot be said  to be same for all the 36 acres acquired as  part of the land would be nearer to it and  part of it would be a far.”

The aforesaid observation made by the Division Bench  

of  the High  Court is  not based  on any  evidence but  on  

presumption and surmises.  It cannot be a ground that the  

Mussoorie is a hilly place and therefore the principle of  

Belting area is to be applied.  It was not the case of the  

State of U.P. that in all land acquisition proceedings in  

Mussoorie the principle of Belting area is applied. In this  

background on mere presumption it was not open to the High  

Court to apply principle of belting area for determination

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of compensation.  The High Court has also accepted that the  

market value of the land in question is Rs. 54,896/- per  

acre  as  decided  by  the  Reference  Court;  therefore  in  

absence of any pleading on the part of State of U.P. it was  

not  open  for  the  High  Court  to  apply  the  principle  of  

belting area.

11. It has not been disputed that the site of new town of  

the  acquired  land  is  almost  at  the  same  elevation  as  

Mussoorie as it has been developed as a Hill resort and has  

immense potential value. It is adjacent to the Lal Bahadur  

Shastri National Academy, which is the beneficiary of such  

acquisition.

12. For the reason aforesaid, the part of the impugned  

judgment dated 16th July, 2005 passed by the High Court in  

so for as it relates to the valuation of land is set aside  

and the award passed by the Revisional Court under Section  

18 is upheld.

13. The  provisions  of  Section  23(1A)  of  the  L.A.  Act  

mandate as follows:

“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

first, 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 trees which may be on the  land at the time of the Collector's taking  possession thereof;

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and 23(1-A). In Gurpreet Singh (supra) this Court held as  

under:

“32. In the scheme of the Act, it is  seen that the award of compensation is at  different stages. The first stage occurs  when the award is passed. Obviously, the  award  takes  in  all  the  amounts  contemplated  by  Section  23(1),  Section  23(1-A),  Section  23(2)  and  the  interest  contemplated by Section 34 of the Act. The  whole of that amount is paid or deposited  by the Collector in terms of Section 31 of  the Act. At this stage, no shortfall in  deposit  is  contemplated,  since  the  Collector has to pay or deposit the amount  awarded by him. If a shortfall is pointed  out, it may have to be made up at that  stage and the principle of appropriation  may  apply,  though  it  is  difficult  to  contemplate  a  partial  deposit  at  that  stage.  On  the  deposit  by  the  Collector  under  Section  31  of  the  Act,  the  first  stage comes to an end subject to the right  of the claimant to notice of the deposit  and withdrawal or acceptance of the amount  with or without protest.

33. The  second  stage  occurs  on  a  reference  under  Section  18  of  the  Act.  When the Reference Court awards enhanced  compensation, it has necessarily to take  note of the enhanced amounts payable under  Section  23(1),  Section  23(1-A),  Section  23(2) and interest on the enhanced amount  as provided in Section 28 of the Act and  costs  in  terms  of  Section  27.  The  Collector  has  the  duty  to  deposit  these  amounts pursuant to the deemed decree thus  passed. This has nothing to do with the  earlier deposit made or to be made under  and after the award. If the deposit made,  falls  short  of  the  enhancement  decreed,  there  can  arise  the  question  of  appropriation at that stage, in relation  to the amount enhanced on the reference.”

In view of the decision in Gurpreet Singh(Supra), we  

hold  that  the  claimants  are  entitled   to  additional  

compensation @ 12% per annum as provided u/s 23(1A) of the  

L.A. Act.

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15. Section 28 of the L.A. Act deals with interest payable  

on excess compensation which reads 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 67 [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 or 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.].”

16. In  Sunder vs. Union of India, (2001) 7 SCC 211 this  

Court held that the interested persons are also interested  

on amount of solatium. The Court further observed as under:

“15. When the court is of the opinion that  the 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 rate indicated in Section 34. This  is so provided in Section 28 of the Act. x x  x x x x”  

In Gurpreet Singh (supra) the reasons in this regard  

was explained as under:

“54. One other question also was sought  to  be  raised  and  answered  by  this  Bench  though not referred to it. Considering that

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the  question  arises  in  various  cases  pending in courts all over the country, we  permitted the counsel to address us on that  question. That question is whether in the  light of the decision in  Sunder(supra) the  awardee/decree-holder would be entitled to  claim  interest  on  solatium  in  execution  though  it  is  not  specifically  granted  by  the  decree.  It  is  well  settled  that  an  execution  court  cannot  go  behind  the  decree.  If,  therefore,  the  claim  for  interest on solatium had been made and the  same has been negatived either expressly or  by necessary implication by the judgment or  decree  of  the  Reference  Court  or  of  the  appellate court, the execution court will  have  necessarily  to  reject  the  claim  for  interest on solatium based on Sunder(Supra)  on  the  ground  that  the  execution  court  cannot  go  behind  the  decree.  But  if  the  award of the Reference Court or that of the  appellate court does not specifically refer  to the question of interest on solatium or  in cases where claim had not been made and  rejected either expressly or impliedly by  the Reference Court or the appellate court,  and  merely  interest  on  compensation  is  awarded,  then  it  would  be  open  to  the  execution  court  to  apply  the  ratio  of  Sunder(supra) and say that the compensation  awarded  includes  solatium  and  in  such  an  event  interest  on  the  amount  could  be  directed  to  be  deposited  in  execution.  Otherwise, not. We also clarify that such  interest on solatium can be claimed only in  pending  executions  and  not  in  closed  executions and the execution court will be  entitled  to  permit  its  recovery  from  the  date of the judgment in  Sunder (Supra)(19- 9-2001) and not for any prior period. We  also clarify that this will not entail any  reappropriation  or  fresh  appropriation  by  the decree-holder. This we have indicated  by way of clarification also in exercise of  our power under Articles 141 and 142 of the  Constitution of India with a view to avoid  multiplicity  of  litigation  on  this  question.”

The aforesaid principle has also been followed by this  

Court in Chhanga Singh and Another vs. Union of India and  

Another (2012) 5 SCC 763.

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17. The Reference Court awarded enhanced compensation but  

such amount was deposited in the Court after the date of  

expiry of period of one year. In the circumstances, we hold  

that the appellants are also entitled to interest @ 15% per  

annum under proviso to Section 28 of the L.A. Act.   

18. The High Court failed to notice that the provisions of  

Section  23(1A)  of  the  L.A.  Act  are  mandatory  and  the  

claimants-appellants  are  entitled  to  12%  enhanced  

compensation for the period commencing from the date of  

publication of Notification under Section 4 of the L.A.  

Act.  The  High  Court  also  failed  to  appreciate  that  the  

appellants  are  entitled  to  interest  @  15%  per  annum  as  

contemplated under proviso to Section 28 of the L.A. Act as  

the compensation was paid after the expiry of period of one  

year.

19. The  High  Court  instead  of  dismissing  the  review  

petition ought to have condoned the delay, reason of which  

was sufficiently explained by appellant and ought to have  

allowed  the  revision  application  in  favour  of  the  

appellant.

20. In view of the findings recorded above, we set aside  

the part of the impugned judgment dated 16th July, 2005 so  

far as it relates to payment of compensation for the land,  

uphold  the  award  passed  by  the  Reference  Court  to  the  

extent  above  and  direct  the  respondents  to  pay  12%  

enhanced  compensation  in  terms  of  Section  23(1A)  and  

another 15%  interest in terms of proviso to Section 28 of  

the L.A. Act as ordered above within three months..

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21. The  appeals  are  allowed  with  the  aforesaid  

observations and directions.  There shall be no order as to  

costs.

…………………………………………J.                 (SUDHANSU JYOTI MUKHOPADHAYA)

…………………………………………J.

(DIPAK MISRA)   

NEW DELHI,

JULY 01, 2014.

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ITEM NO.1G               COURT NO.6                 SECTION X (For Judgment)

              S U P R E M E  C O U R T  O F  I N D I A                           RECORD OF PROCEEDINGS Civil Appeal No(s). …............/2014 (@SLP (C) No 36299-36303/2010

JAI KRISHAN(D) TR.LRS.                             Appellant(s)

                               VERSUS

STATE OF UTTARAKHAND & ORS.                        Respondent(s)

Date : 01/07/2014 These appeals were called on for pronouncement  of Judgment today.

For Appellant(s) Mr. Mohit D. Ram ,Adv.

For Respondent(s) Mrs. Anil Katiyar ,Adv.                          Mr. Saurabh Trivedi ,Adv.                          Mr. Rahul Narayan ,Adv.

Hon'ble  Mr.  Justice  Sudhansu  Jyoti  Mukhopadhaya  pronounced  the reportable judgment of the Bench comprising His Lordship and  Hon'ble Mr. Justice Dipak Misra.

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The appeals are allowed in terms of the signed reportable  judgment.

(MEENAKSHI KOHLI)                               (USHA SHARMA)   COURT MASTER                                   COURT MASTER  

[Signed reportable judgment is placed on the file]