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IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.2187  OF 2013 (@ SPECIAL LEAVE PETITION(CIVIL)NO. 17615 OF 2008)  

SUBHASH CHANDER & ORS.                    APPELLANTS

VERSUS

STATE OF HARYANA & ANR.                   RESPONDENTS

WITH

CIVIL APPEAL NO.2188 OF 2013 @S.L.P.(C)NO.17622 OF 2008 CIVIL APPEAL NO.2189 OF 2013 @S.L.P.(C)NO.17621 OF 2008 CIVIL APPEAL NO.2190 OF 2013 @S.L.P.(C)NO.17625 OF 2008 CIVIL APPEAL NO.2191 OF 2013 @S.L.P.(C)NO.17623 OF 2008 CIVIL APPEAL NO.2192 OF 2013 @S.L.P.(C)NO.17733 OF 2008 CIVIL APPEAL NO.2193 OF 2013 @S.L.P.(C)NO.21265 OF 2009

AND WITH

CIVIL APPEAL NO.2194 OF 2013 @S.L.P.(C)NO.22374 OF 2009

O R D E R

1. Delay  in  filing  applications  for  substitution  is  

condoned.

2. Applications for substitution are allowed.

3. Permission  to  file  Special  Leave  Petitions  is  

granted.

4. Delay in filing the S.L.Ps is condoned.

5. Leave is granted in all the Special Leave Petitions.

6. These  Civil  Appeals  filed  by  the  land-owners  are  

disposed of by this common judgment and order, since

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the issues involved are one and the same.

7. The  facts  in  these  appeals  are  as  under:  The  

respondent-State had acquired lands in and around the  

Municipal limits of Karnal, Haryana, for the purpose  

of development of an urban estate. The first phase of  

such acquisition of lands under Section 4 of the Land  

Acquisition Act, 1894 (for short “the Act”) had taken  

place some time in the year 1973 and 1977.  The lands  

so acquired were later renamed as Sectors 13 and 14.  

The  Land  Acquisition  Collector  by  award  dated  

23.11.1973 had awarded compensation of    Rs.270/-  

per biswa (Rs.5.40 per square yard, (for short “per  

sq.  yard”)  for  whole  of  the  land,  besides  Ghair  

Mumkin rasta) and Rs.135/- per biswa (Rs.2.70 per sq.  

yard for Ghair Mumkin rasta).  The compensation so  

awarded was further enhanced by the Reference Court.  

On  further  appeal  by  the  land-owners  therein,  the  

High  Court  in  the  case  of  Jatinder  Singh  vs.  The  

State of Haryana and ors. (R.F.A. No. 1655 of 1979  

dated  17.07.1980)  had  enhanced  the  compensation  at  

the  rate  of  Rs.22/-  per  sq.  yard.  The  lands  in  

dispute which are re-christened as Sector 6, 3, 9 and  

7, was acquired under Section 4 of the Act by issuing  

successive  notifications  dated  04.06.1980,  

13.03.1981, 22.06.1982 and 05.07.1982, respectively.  

On  completion  of  the  acquisition  proceedings  under

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the  Act,  the  Land  Acquisition  Collector  determined  

the compensation at Rs.28,512/- per acre for Chahi  

Nehri  Land,  Rs.22,080/-  per  acre  for  Barani  Land,  

Rs.14,200/-  per  acre  for  Banjar  Qadim  Land  and  

Rs.13,440/- per acre for Ghair Mumkin Land acquired  

under notification dated 04.06.1980; at Rs.80,000/-  

per  acre  for  Chahi/Nehri  Land  and  Rs.50,000/-  per  

acre  for  Ghair  Mumkin  Land  acquired  under  

notification dated 13.03.1981; and at Rs.86,000/- per  

acre  in  respect  of  land  acquired  under  both  the  

notifications dated 22.06.1982 and 05.07.1982.

8.  Aggrieved by the determination of the compensation  

by  the  Land  Acquisition  Collector,  the  land-owners  

had sought reference of the matter to the Civil Court  

under Section 18 of the Act for determining the fair  

and just compensation for the lands acquired. Upon  

such reference, the Reference Court had enhanced the  

rate of compensation in respect of lands in Sectors  

6,  3,  9  and  7  to  Rs.20/-,  Rs.33/-,  Rs.35/-  and  

Rs.35/-  per  sq.  yard,  respectively.  Being  

dissatisfied  with  the  compensation  so  awarded,  

several land-owners had filed appeals before the High  

Court seeking enhanced compensation. The respondent-

State had also appealed against the aforesaid award  

seeking reduction of the compensation so determined.

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9. The learned Single Judge of the High Court in the  

aforesaid  Appeal  No.  882  of  1983  and  connected  

matters  has  determined  the  rate  of  compensation  

payable  to  the  lands  acquired  under  different  

notifications as under:

   “In  absence  of  sufficient  material  of  comparable  rates,  the  market  price  can  be  determined  by  periodical  increase  formula  approved  by  the  Apex  Court  in  the  case  of  Sahaswan,  District  Badaun  (supra).   If  the  formula approved by the Apex Court in Shaswan,  District  Baduan (supra)  is to  be applied  with  1973 year as the base, the market value of the  land in the year 1980 comes to Rs.58.45/-, in the  year 1981 comes to Rs.66.21/- and in the year  1982 comes to Rs.76.21/-.  The land being big  chunk,  1/3rd of  the  development  purposes,  for  roads, parks and public utilities.  Therefore,  the rate per square yard comes to Rs.39.17/- as  on the date of notification dated 4.6.1980 and  Rs.44.37/-  per  square  as  on  the  date  of  notification  dated  13.3.1981  and  at  Rs.51.07/-  per square yard as on the dates of notifications  dated 22.6.1982 and 5.7.1982.  Accordingly, the  market  price  of  the  land  under  different  acquisition notifications is assessed at Rs.39/-  per square yard in respect to land acquired for  Sector  6  (represented  by  notification  dated  4.6.1980) and Rs.44/- for Sector 3 (represented  by  the  notification  dated  22.6.1982  and  5.7.1982).  These appeals are accordingly allowed  with  costs  and  respondents  are  directed  to  calculate the compensation for the acquired land  at  the  above  rates.   The  appellants  are  also  entitled to solatium and interest as determined  by the Reference Court on the amount determined  herein.”

10. The aforesaid conclusion is reached by the learned  

Single Judge keeping in view the judgment and order  

passed in RFA No. 1655 of 1979 dated 17.07.1980 and

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accordingly has enhanced compensation payable at the  

rate  of  15%  per  annum  from  the  date  of  last  

acquisition  in  the  same  area  in  the  light  of  

observations of this Court in  Krishi Utpadan Mandi  

Samiti v. Bipin Kumar,  (2004) 2 SCC 283. However,  

1/3rd of the price is deducted as development cost  

and,  accordingly,  the  market  price  of  lands  was  

assessed at Rs.39/- per sq. yard for Sector 6; at  

Rs.44/- per sq. yard for Sector 3; and at Rs.51/- per  

sq. yard for both Sectors 7 and 9. The land-owners  

were also awarded solatium and interest.

11. Being aggrieved by the judgment and order so passed  

by  the  learned  Single  Judge,  the  land-owners  are  

before us in these appeals.

12. We have heard Shri V.K. Jhanji and     Shri P.N.  

Misra,  learned  senior  counsel  appearing  for  the  

appellants and Shri Tarjit Singh, learned counsel for  

the State.

13. Shri Jhanji and Shri Misra would contend that the  

learned Single Judge while determining the just and  

fair compensation payable to the land owners ought  

not  to  have  deducted  1/3rd price  towards  the  

development  costs,  after  taking  into  consideration  

the base price of the lands acquired at Rs.22/- per  

sq.  yard  in  consonance  with  the  price  of  lands

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acquired earlier which are renamed as Sectors 13 and  

14. They would submit that such deduction in the name  

of costs for developing roads, parks and other public  

utilities is contrary to the base price fixed in the  

case  of  Jatinder  Singh’s  case  (supra).  In  aid  of  

their  submission,  the  learned  counsel  have  relied  

upon several judgments of this Court, reference to  

which, in our opinion, may not be necessary for the  

purpose of disposal of these appeals.

14. Per contra, learned counsel appearing for the State  

would justify the impugned judgment and order passed  

by the High Court.

15. We have carefully perused the impugned judgment and  

order including the awards of the Courts below. We  

have also appreciated the arguments advanced by the  

parties to the lis.  

16. We  notice  that  the  learned  Single  Judge,  while  

enhancing  the  compensation  has  followed  the  

quantification of compensation of the adjacent lands  

at  the  rate  of  Rs.22/-  per  sq.  yard  previously  

determined by the High Court for lands acquired by  

the respondent-State in the year 1973 and 1977. The  

said  rate  pertains  to  the  lands  later  named  as

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Sectors  13  and  14,  which  are  situated  across  the  

lands in lis herein. The learned Single Judge, after  

keeping the base price at Rs.22/- per sq. yard has  

enhanced  the  compensation  at  the  rate  of  15%  per  

annum for the lands acquired vide notifications dated  

04.06.1980,  13.03.1981,  22.06.1982  and  05.07.1982  

later named as Sectors 6, 3, 9 and 7, respectively.  

While  doing  so,  he  has  deducted  1/3rd of  the  said  

price towards costs borne by the respondent-State in  

development  of  such  lands  as  commercial  and  

residential areas.  

17. In our view, since the learned Single Judge has  

fixed  the  base  price  in  consonance  with  the  

compensation awarded for lands previously acquired in  

the  year  1973  and  1977  and  calculated  the  market  

value with an increase at the rate of 15% per annum  

from  1973  till  the  issuance  of  respective  

notifications  dated  04.06.1980,  13.03.1981,  

22.06.1982 and 05.07.1982 following the observation  

made by this Court in Krishi Utpadan case (supra), in  

our considered opinion, ought not to have made any  

deduction towards the development costs.   

18. In view of the above, while modifying the order  

passed by the learned Single Judge, we direct the  

Reference Court to determine the market value of the

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lands acquired and re-christened as Sectors 3, 6, 7  

and  9  at  the  rate  of  Rs.58.45/-  for  the  lands  

acquired under 1980 notification, at Rs.66.21/- for  

the  lands  acquired  under  1981  notification  and  

Rs.76.21/- per sq. yard for the lands acquired under  

1982 notification without deducting 1/3rd of the price  

towards development costs.

19. Shri  Jhanji, learned  counsel for  the appellants,  

would raise another contention insofar as the non-

payment of interest on the solatium amount awarded by  

the High Court.  He would submit that the learned  

Single  Judge,  while  determining  the  compensation  

payable to the appellants ought to have directed the  

Reference Court to award appropriate interest on the  

solatium  amount.   To  buttress  his  contention  he  

refers  to  the  Constitution  Bench  decision  of  this  

Court in the case of Sunder v. Union of India, (2001)  

7 SCC 211, wherein the Court while considering the  

scope and extent of solatium under the provisions of  

the Act has observed in respect of interest accruing  

on such solatium and stated at paragraph 24 as under:

“    The proviso to Section 34 of the Act makes the  position further clear. The proviso says that “If  such compensation” is not paid within one year from  the date of taking possession of the land, interest  shall stand escalated to 15% per annum 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

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such expiry”. It is inconceivable that the solatium  amount  would  attract  only  the  escalated  rate  of  interest from the expiry of one year and that there  would  be  no  interest  on  solatium  during  the  preceding period.  What the legislature intended  was to make the aggregate amount under Section 23  of the Act to reach the hands of the person as and  when the award is passed, at any rate as soon as he  is  deprived  of  the  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  the  payment.  Splitting  up  the  compensation  into  different  components  for  the  purpose of payment of interest under Section 34 was  not in the contemplation of the legislature when  that section was framed or enacted.”

20. The learned Single Judge, in the impugned judgment and  

order, has not awarded interest on the solatium amount.  

We are of the opinion that in view of the Constitution  

Bench decision of this Court, the learned Judge ought to  

have granted interest on the solatium amount.   

21. In  view  of  the  above  discussion,  we  allow  these  

appeals, modify the order passed by the learned Single  

Judge and remit these appeals to the Reference Court to  

re-determine the compensation payable to the land owners  

in the light of the judgment and order passed by us in  

these appeals. We further direct the Reference Court to  

complete  this  exercise  as  early  as  possible,  at  any  

rate, within an outer limit of six months.

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Ordered Accordingly.

.......................J.

(H.L. DATTU)

.......................J.

(DIPAK MISRA)

NEW DELHI;

FEBRUARY 19, 2013.