MEHRAWAL KHEWAJI TRUST(REGD) FARIDT&ORS. Vs STATE OF PUNJAB .
Bench: P. SATHASIVAM,J. CHELAMESWAR
Case number: C.A. No.-004005-004005 / 2012
Diary number: 24315 / 2009
Advocates: SHOBHA Vs
JAGJIT SINGH CHHABRA
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4005 OF 2012 (Arising out of SLP (C) No. 26866 of 2009
Mehrawal Khewaji Trust (Regd.), Faridkot & Ors. .... Appellant (s)
Versus
State of Punjab & Ors. .... Respondent(s)
J U D G M E N T
P. Sathasivam, J.
1) Leave granted.
2) This appeal is directed against the final judgment and
order dated 06.01.2009 passed by the High Court of Punjab
and Haryana at Chandigarh in R.F.A. No. 998 of 1988 (O&M)
along with seven other appeals by which the High Court
declined to interfere with the order dated 11.02.1988 of the
Additional District Judge, Faridkot in L.R. No. 20 of 1984.
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3) Brief facts:
(a) Colonel Sir Harindar Singh, since deceased, was the
former ruler of the State of Faridkot. In 1979, 259 Kanals and
16 Marlas (33 acres) of land owned by him had been acquired
by the Punjab Government for extension of existing Grain
Market at Faridkot vide Notification No. 14(68)M-iv-78/17315
dated 22.12.1979 under Section 4 of the Land Acquisition
Act,1894 (hereinafter referred to as “the Act”) which was
published in the Punjab Government Gazette. Notification
under Section 6 of the Act was issued on 19.02.1982. The
award by the Collector was announced on 02.10.1982 and
possession of the land was also taken on that day. The
Collector awarded compensation at the rate of Rs.15,000/- per
acre for Nehri land, Rs.10,000/- per acre for Barani land and
Rs.25,000/- per acre for Banjar Kadim land and Ghair
Mumkin land. The total compensation awarded including
solatium at 15% was Rs.4,85,202.86/-.
(b) Aggrieved by the award passed by the Collector, on
27.10.1982, the appellants filed an application for reference
under Section 18 of the Act. The Additional District Judge,
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Faridkot, by order dated 11.02.1988 in L.R. No. 20 of 1984
disposed of the reference by enhancing the compensation to
Rs.1,00,000/- per acre.
(c) Against the aforesaid order, the appellants preferred
R.F.A. No.998 of 1988 before the High Court. The High Court,
by the impugned common order and judgment dated
06.01.2009, declined to interfere with the order passed by the
Additional District Judge and did not enhance the
compensation as claimed by the appellants.
(d) Aggrieved by the order passed by the High Court, the
appellants have filed this appeal by way of special leave before
this Court.
4) Heard Mr. Dhruv Mehta, learned senior counsel for the
appellants, Mr. Vivek Goyal, learned Additional Advocate
General for the State of Punjab and Mr. T.S. Doabia, learned
senior counsel for respondent No.2.
5) The only point for consideration in this appeal is whether
the appellants have made out a case for higher compensation
as claimed.
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6) The materials placed before the Land Acquisition
Collector and the Reference Court show that the land is of
great potential value inasmuch as the same being strategically
located at a commercial hub abutting main roads and
surrounded by commercial building including that of Canal
Colony, Godowns of Food Corporation of India, private and
Government Residential Colonies, Red Cross Bhawan,
Government Medical College, existing Grain Market and
Godown of Warehousing Corporation. It was also pointed out
that one pocket of the land known as “Tikoni” is having main
roads on three sides.
7) In support of their claim for higher compensation, the
appellants have relied upon various sale deeds in the reference
under Section 18 of the Act. It was further seen that the
Reference Court discarded all the sale instances related to
area less than one kanal and proceeded to consider other sale
instances. It was pointed out that the State of Punjab did not
challenge the said criteria adopted by the Reference Court. By
pointing out the same, it was argued on the side of the
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appellants that the exemplars for sale of one kanal or more are
available to be relied upon.
8) The Reference Court has taken into consideration three
sale exemplars which are Ext.A-48, Ext. A-52 and Ext.A-61. It
is the grievance of the appellants that in the place of relying
upon the highest exemplars, the Reference Court erroneously
determined the market price of the appellants land by
averaging the prices of all the three exemplars and thereby
awarded a compensation of Rs. 1 lakh per acre. The High
Court upheld the said order of the Reference Court.
9) The appellants are aggrieved on two aspects, firstly the
highest exemplar, namely, Ext. A-61 should have been relied
upon in the place of averaging the prices and secondly, the
Reference Court did not grant interest on solatium.
10) The Reference Court held the following three sale
transactions relied upon by the appellants as relevant for
determination of the market value of the land in dispute:
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_____________________________________________________________ Sale Deed Date Area Price
(K-M) (Rs.K-M) (Rs./acre) _____________________________________________________________
Ex. A-48 29.05.1979 3-4 31,000 77,500 Ex.A-52 20.03.1978 1-5.25 19,000 1,21,600 Ex.A-61 22.07.1977 1-3 20,000 1,39,130 _____________________________________________________________
Considering all these transactions including other references,
the Reference Court disposed of the matter by a common order
whereby the compensation was enhanced to Rs.1,00,000/- per
acre.
11) Since the measurements of the land under acquisition
are in kanals and marlas in the State of Punjab, the
conversion of these units in acres and square yards is being
set out as under:
20 marlas = 1 kanal 8 kanals = 1 acre 160 marlas = 1 acre 1 acre = 4840 sq. yds. 1 kanal = 605 sq. yds. 1 marla = 30.25 sq. yds.
12) As pointed out above, the Reference Court failed to take
note of the highest exemplar, namely, the sale transaction
under Ext.A-61 dated 22.07.1977. In this regard, it is useful
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to refer the decision of this Court in Sri Rani M.
Vijayalakshmamma Rao Bahadur, Ranee of Vuyyur vs.
Collector of Madras, (1969) 1 MLJ 45 (SC). In this case, this
Court has held thus:
“… where sale deeds pertaining to different transactions are relied on behalf of the Government, that representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course. In any case we see no reason why an average of two sale deeds should have been taken in this case.”
13) In State of Punjab and Another vs. Hansraj (Dead) by
LRS. Sohan Singh and Others, (1994) 5 SCC 734, this Court
has held that method of working out the ‘average price’ paid
under different sale transactions is not proper and that one
should not have, ordinarily recourse to such method. This
Court further held that the bona fide sale transactions
proximate to the point of acquisition of the lands situated in
the neighbourhood of the acquired lands are the real basis to
determine the market value.
14) This Court in Anjani Molu Dessai vs. State of Goa
and Another, (2010) 13 SCC 710, after relying upon the
earlier decisions of this Court in M. Vijayalakshmamma Rao
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Bahadur (supra) and Hansraj (supra) held in para 20 as
under:
“20. The legal position is that even where there are several exemplars with reference to similar lands, usually the highest of the exemplars, which is a bona fide transaction, will be considered.”
Again, in para 23, it was held that “the averaging of the prices
under the two sale deeds was not justified.”
15) It is clear that when there are several exemplars with
reference to similar lands, it is the general rule that the
highest of the exemplars, if it is satisfied, that it is a bona fide
transaction has to be considered and accepted. When the
land is being compulsorily taken away from a person, he is
entitled to the highest value which similar land in the locality
is shown to have fetched in a bona fide transaction entered
into between a willing purchaser and a willing seller near
about the time of the acquisition. In our view, it seems to be
only fair that where sale deeds pertaining to different
transactions are relied on behalf of the Government, the
transaction representing the highest value should be preferred
to the rest unless there are strong circumstances justifying a
different course. It is not desirable to take an average of
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various sale deeds placed before the authority/court for fixing
fair compensation.
16) Based on the above principles, the market value as per
Ext.A-61 dated 22.07.1977 was Rs. 1,39,130.43 per acre
(approx. Rs.1.40 lakhs per acre). The said sale deed was two
and a half years prior in time than Section 4(1) notification
dated 22.12.1979. There is no reason to eschew the above sale
transaction. It is also pointed out that the lands covered under
Ext.A-61 are nearer to the lands of the appellants under
acquisition. This Court has time and again granted 10% to
15% increase per annum. In Ranjit Singh vs. Union
Territory of Chandigarh (1992) 3 SCC 659, this Court
applied the rule of 10% yearly increase for award of higher
compensation. In Delhi Development Authority vs. Bali
Ram Sharma & Ors. (2004) 6 SCC 533, this Court considered
a batch of appeals and applied the rule of annual increase for
grant of higher compensation. In ONGC Ltd. vs. Rameshbhai
Jivanbhai Patel (2008) 14 SCC 745, this Court held that
where the acquired land is in urban/semi-urban areas,
increase can be to the tune of 10% to 15% per annum and if
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the acquired land is situated in rural areas, increase can be
between 5% to 7.5% per annum. In Union of India vs.
Harpat Singh & Ors. (2009) 14 SCC 375, this Court applied
the rule of 10% increase per annum. Based on the above
principle, we fix the annual increase at 12% per annum and
with that rate of increase, the market value of the appellants’
land would come to Rs.1,82,000 per acre as on the date of
notification.
17) Though the Reference Court relied on the sale
transaction covered under Ex. A-48 dated 29.05.1979 and
fixed compensation @ Rs.1 lakh per acre inasmuch as under
Ex. A-61 dated 22.07.1977, i.e., even two and a half years
prior to notification under Section 4(1) of the Act, the adjacent
lands have fetched higher price and in the light of the
principles laid down in the above decisions, we are of the view
that exemplar Ex.A-61 dated 22.07.1977 is quite reasonable
and acceptable. However, as rightly pointed out by the
learned counsel for Respondent No.2 and considering the fact
that the area of land under Ex. A-61 dated 22.07.1977 is a
smaller one, it is but proper that appropriate deduction should
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be made for the same. In Trishala Jain & Anr. vs. State of
Uttaranchal & Anr., 2011 (6) SCC 47, this Court has held
that the value of sale of small pieces of land can be taken into
consideration for determining the value of large tract of land
but with a rider that the Court while taking such instances
into consideration has to make a reasonable deduction
keeping in view of other attendant circumstances. Similar
view has been expressed in State of Madhya Pradesh &
Ors. vs. Kashiram (dead) by L.Rs. & Ors., 2010 (14) SCC
506 and Prabhakar Raghunath Patil & Ors. vs. State of
Maharashtra, 2010 (13) SCC 107. In view of the same, it
would be just and reasonable to allow deduction @ 20%. By
applying the above method, the market value for the acquired
land is fixed at Rs.1,82,000/- minus Rs.36,400/- (towards
20% deduction) equivalent to Rs.1,45,600/- rounded at
Rs.1,45,000/- per acre which is quite fair, reasonable and
acceptable.
18) The other grievance of the appellants is that interest on
solatium and additional market value was not granted. This
aspect has been considered and answered by the Constitution
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Bench in the case of Sunder vs. Union of India, (2001) 7 SCC
211. While considering various decisions of the High Courts
and approving the decision of the Punjab and Haryana High
Court rendered in State of Haryana vs. Kailashwati, AIR
1980 P&H 117, this Court held that the interest awardable
under Section 28 would include within its ambit both the
market value and the statutory solatium. In view of the same,
it is clear that the person entitled to the compensation
awarded is also entitled to get interest on the aggregate
amount including solatium. The above position has been
further clarified by a subsequent Constitution Bench
judgment in Gurpreet Singh vs. Union of India, (2006) 8
SCC 457. Based on the earlier Constitution Bench decision in
Sunder (supra), the present Constitution Bench held that the
claimants would be entitled for interest on solatium and
additional market value if the award of the Reference Court or
that of the appellate Court does not specifically refer to the
question of interest on solatium and additional market value
or where the claim had not been rejected either expressly or
impliedly. In view of the same, we hold that the appellants are
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entitled to interest on solatium and additional market value as
held in the above referred two Constitution Bench judgments.
19) In the light of the above discussion, the appellants have
made out a case for enhancement of compensation.
Accordingly, the same is fixed at Rs.1,45,000/- per acre with
all other statutory benefits including interest on solatium and
additional market value. The appeal is allowed to the extent
mentioned above. No order as to costs.
...…………….…………………………J. (P. SATHASIVAM)
.…....…………………………………J. (J. CHELAMESWAR)
NEW DELHI; APRIL 27, 2012.
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