Lila Ghosh Vs. The State of West Bengal
 Insc 573 (18
N. Variava & H. K. Sema. Variava, J.
Appeal (civil) 7097-7098 of 2000
two Appeals are against the judgment dated 16th March, 2000.
stated the facts are as follows:
appears that in the concerned premises there was a film studio. The owner had
obtained a decree of eviction against the studio. The Appeals against that
decree were dismissed all the way to this Court.
execution proceedings were filed to evict the film studio. At that stage, in
order to help the film studio, the State Government on 24th December, 1979 requisitioned the property and took
possession thereof. The requisition was challenged by filing Writ Petition No.
850 of 1980. On 28th February,
1980 a settlement was
arrived at between the State Government and the owner. It was agreed that this
property would be acquired by the State Government. A sum of Rs.11,00,000/- was
paid by the Government in advance of acquisition.
4 Notification was issued in July, 1982. However, it was only published in the
locality on 5th of August, 1983. Thus for our purposes the relevant date would
be 5th August, 1983. As the Government was not taking
any further steps, a Writ Petition was filed.
On 22nd May, 1985 the declaration under Section 6 was
issued. An Award came to be passed on 16th September, 1986. In this Award, the price of land
was fixed at Rs.10,940/- per cottah and for the structures a sum of
Rs.5,65,726/- was awarded. Solatium at the rate of 30% was also awarded. So was
additional compensation awarded at the rate of 12% from 5/8/1983 to the date of Award.
being satisfied the claimants filed a Reference under Section 18. Neither party
led any evidence of any sale instances. Both the parties relied upon the
judgment dated 30th
May, 1983 in L.A. Case
No.16/1975 which was in respect of acquisition of an adjoining property
belonging to the Golf Club. The Reference Court valued the property in various ways, one of which was to
take the value as given in the judgment dated 30th May, 1983 for that portion of the acquired land which was farthest
from the road. Thereafter applying the belting method the value was arrived at
on the following basis:
Belt area 42.94 Kt.@ 10,360 p.k. @ 4,44,858.40p 3/8th-3rd Belt area 6.68 Kt. @
7,770 P.K. @ 51,903.60p 1/2-2nd Belt area recess 6.68 Kt.@ 10,360 @ 71,276.00p
2/3rd-2nd Belt area 41.30 Kt. @ 13,813.33 P.K.@5,70,490.52 1st Belt area 23.68
Kt.@ 20,720 P.K. @ 4,90,649.60p ________________ ____________________ Total:
121.48 Kts. Rs.16,29,178.92p" The Reference Court then took into account
the fact that the earlier acquisition was in respect of Notification dated 8th
February, 1975 and gave an appreciation of 10% per annum for 9-1/2 years. The Reference Court also gave an appreciation of 10%
for potentiality and further 10% for largeness. The Reference Court thus arrived at the figure of Rs.
31,300/- per cottah. The Reference
Court then proceeded
to value the land in various other methods. It then took an average of the
figures arrived at by calculating in different figures and arrived at a figure
of Rs. 27,000/- per cottach. The Reference Court also increased the value of the structure to Rs. 9,04,360/-.
The Reference Court granted interest with effect from 24th December, 1979.
not being satisfied, the claimants filed an Appeal in the High Court. The
Respondents filed cross-objections in the High Court. The High Court by the
impugned Judgment fixed the value of the land at Rs.31,300/- per cottah. The
High Court has held that Reference
Court having fixed
compensation on basis of earlier judgment could not have proceeded to compute
compensation on any other basis. The High Court held that the belting method
was correct. The High Court directed that interest was payble from 8th December, 1986.
Salve submitted that the Appeal of the State was not maintainable in as much as
they had not challenged the belting method or the valuation fixed by the
Reference Court. He pointed out that in the impugned Judgment it was mentioned
that the Appellants had not pressed the cross appeal. On the other hand, Mr. Rohtagi
submitted that the statement in the impugned Appeal to the effect that the
cross Appeal was not pressed was erroneous. He submitted that this was clear
from the fact that at the instance of the State the date from which interest
was payable had been altered. In our view, it is not necessary to go into this
controversy. In our view, even in the Appeal filed by the claimants the State
can always challenge valuation. We have therefore heard the parties on merits.
contended, on behalf of the Appellants, that this was a compact block of land
which had been acquired for the purposes of a film studio. It was submitted
that there was no necessity to use the belting method. It was submitted that
the price of the entire land should be one. That the belting method is not the
correct method to be applied, in such a case, was not seriously disputed by Mr.
counsels however differed on what the compensation should be.
of the opinion that this was not a fit case for application of the belting
method. The acquisition was of land on which a film studio stood. The
acquisition was for the purposes of the film studio.
a compact block of land which was acquired for a specific purpose. The land was
not acquired for development into small plots where the value of plots near the
road would have a higher value whilst those further away may have a lesser
value. In such cases where a compact block is acquired the belting method would
not be the correct method.
next question is what is the value which has to be fixed for the land? As
stated above neither party filed any sale instances.
the parties only relied upon the Judgment in Land Acquisition Case No. 61 of
1975. According to the claimants the Judgment dated 30th May, 1983 in L. A. Case No. 61 of 1975 fixes compensation at
Rs.12,950/- per cottah, whereas according to the State the Judgment fixes
compensation at Rs. 10.360/-. To resolve this controversy, one would have to
look at that judgment.
judgment was in respect of an acquisition of a very large plot of land
admeasuring 17 bighas, 11 cottahs, 12 chittaks and 7 sq. ft. The land then
acquired belonged to the Tollygunge Golf Club which held 343 bighas, 7 cottahs
and 12 chittaks. A reading of the Judgment dated 30th May, 1983 in L. A. Case
No. 61 of 1975 shows that the land then acquired was situated in a developed
residential cum commercial area. That land was adjoining the land with which we
are concerned. Thus the surrounding area would be the same.
Judgment shows that that land had a road frontage of 2775 ft. on Deshpran Sasmal Road and a frontage of 845 ft. on Baburam Ghosh Road. The judgment sets out that Deshpran Sasmal Road had a width of 120-130 ft. road,
whereas Baburam Ghosh
Road was a less wide
road. The present land has a frontage of only 170 ft. on Baburam Ghosh Road. In the earlier case sale instances
had been filed. The Court considered those sale instances and after averaging
the price of those sale instances concluded that the value was Rs. 11,260/- per
cottah. The Court then added 37-1/2 % for a wider road frontage. While so
adding the Court again clarified that this was because it had a large frontage
on the 120-130 ft. wide Deshpran
Sasmal Road and also
on the less wide Baburam
the fact that the present land only has a frontage on Baburam Ghosh Road, which is a less wide road,
obviously an appreciation of 37-1/2% cannot be given. Also as stated above the
present acquisition is of a compact block of land for an existing film studio.
Therefore a road frontage does not have so much value in such a case. In our
view, at the most an appreciation of 5% can be given for frontage in the
present case. In the earlier judgment the Court then applied a depreciation of
22-1/2 % for undeveloped condition of the land and for larger size and
irregularity of shape.
deducting 22-1/2% from 37-1/2% the Court calculated net appreciation to be 15%.
The price of 11,260/- was therefore increased to Rs.12,950/-. This is the
figure which according to the claimants is value fixed in the earlier judgment.
In the earlier case, the Court then applied a co-efficient of 0.8% as the
acquired land was a small piece out of a large tract of land and calculated the
value at Rs. 10,360/- per cottah. This value was arrived at by multiplying Rs. 12,950/-
by 0.8%. According to the State this is the value fixed in the earlier
out hereinabove by averaging the price of the sale instances the value arrived
at was Rs.11,260/-. In our view, this is the price fixed in the earlier
judgment. The additions and deductions are due to the peculiar nature of that
land which do not apply in this case. As stated above in this case there is no
frontage on a very wide road and therefore only 5% appreciation can be given
for road frontage. However, even the land now acquired is a large piece of
land. There must therefore be some deduction for largeness. The price of Rs.11,260/-
is fixed on basis of sale instances of small plots of land. It is well known
that a large piece of land would never fetch the same price as a small piece of
land. In our view, for largeness a depreciation of 5% can be given. Giving the
above appreciation and depreciation the price remains at Rs.11,260/- per cottah.
The earlier acquisition was of the year 1974. Normally Courts give an
appreciation of 10% per annum. Therefore for the 9-1/2 years there must be an
appreciation at 95%. Thus to the figure of Rs.11,260/- a sum of Rs. 10,697/-
will have to be added. This would bring the value to Rs. 21,957/- per cottah.
submitted that the Court must also take into account the potentiality. It was
submitted that the Reference
Court and the High
Court have both given 10% towards potentiality and this must be maintained. We
are unable to accept that submission. It is to be seen that in arriving at the
figure of Rs.11,260/- potentiality had already been taken into consideration.
This is clear from the Judgment dated 3rd May, 1983 in L. A. Case No. 61 of 1975
wherein it has been observed as follows:
the potentialities have already been taken care of in determining the average
market price on the basis of the comparable units situated in a newly developed
post residential locality." Thus the Reference Court and High Court both fell into error in giving a 10%
increase for potentiality. Once potentiality has been taken care of no question
arises of giving an additional percentage towards potentiality.
next submitted that there must be a 10% appreciation for largeness. It was
pointed out that both the Reference Court
and the High Court has given this appreciation. We are unable to understand the
submission or the rationale of the Reference Court and the High Court in giving an appreciation of 10% for
largeness. The normal rule is that if a plot is large, then there must be
depreciation for largeness.
already stated hereinabove large plots always fetch less than small plots.
Therefore there is no question of appreciation for largeness.
next submitted that there must be a 10% appreciation on account of the fact
that a Metro Railway Station is a stone throw away from this land. It must be
noted that the Metro Railway Station has come up on the land in respect of
which the judgment dated 30th
May, 1983 was given.
Apart from the fact that Metro Railway Station has come up everything else
namely shops, hospital, T.V. center, residential cum commercial area remains
the same as in respect of earlier acquisition. Even earlier there was a Tram
Terminal and Bus Stop close by. The mere fact that the Metro Railway Station
has come up would therefore not necessitate giving any appreciation on that
next submitted that in the earlier judgment there was a deduction of 20% and
this deduction should be added back. As we have not deducted 20% no question
arises of adding back the same.
we hold that compensation payable is at the rate of Rs. 21,957/- per cottah.
The claimant would also be entitled to all statutory benefits available to them
under the Act.
next question which arises is from what date interest is payable. On behalf of
the claimants it was argued that possession was taken as far back as on 24th
December, 1975. Reliance was placed on Section 34 of the Land Acquisition Act.
It was submitted that interest has to be paid from the date of taking
possession. It was pointed out that the Reference Court had directed payment of
interest from the date of taking possession. However, the High Court has
directed payment of interest only from 8th December, 1986. In support of this
submission, reliance was placed on the case of Shree Vijay Cotton & Oil
Mills Ltd. vs. State of Gujarat reported in 1991(1) SCC 262. In this case the
possession had been taken much prior to the acquisition proceedings. This Court
directed payment of interest under Sections 28 and 34 from the date of taking
possession. It was submitted that this authority clearly lays down that the
interest must be paid from the date of actual possession.
other hand Mr. Rohtagi submitted that interest is payable under Section 34,
only provided compensation is payable and the same is not paid or deposited. He
submitted that compensation can only be paid after an award is made. He
submitted that interest can only run from the date of the Award. He further
submitted that under the Consent Terms dated 28th February, 1980 the claimant
had been paid a sum of Rs.11,00,000/- in advance even before the acquisition
proceedings started. He pointed out that another sum of Rs.11,00,000/- was also
paid to them on 21st
May, 1986. He pointed
out that this was also before the Award was made. He pointed out that another
sum of Rs.7,45,266/- was paid under the orders of the Court on 18th July, 1986. He pointed out that before the
Award was passed, a sum of Rs.29,45,266/- was already paid to the claimants.
submitted that therefore this was a case where the claimant had already
received a very large amount prior to the Award being made.
submitted that if these amounts are taken into consideration, then it would be
found that no interest would be payable under Section 34.
also pointed out that pursuant to the orders of this Court, a further sum of
Rs.70,00,000/- was paid on 3rd July, 1977 and a sum of Rs.52,00,000/- was
deposited in Court. He further pointed out that another sum of Rs.60,00,000/-
has already been deposited in this Court on 13th December, 2002. He submitted that the State must get credit for all
these amounts and that there can be no interest on the amounts paid or
deposited from the dates on which they were so paid or deposited. On behalf of
the claimants it was fairly conceded that on the amounts paid or deposited,
interest would not run.
though the authority in Shree Vijay Cotton & Oil Mills Ltd.
to support the claimants, it is to be seen that apart from mentioning Sections
28 and 34, no reasons have been given to justify the award of interest from a
date prior to commencement of acquisition proceedings. A plain reading of
Section 34 shows that interest is payable only if the compensation, which is
payable, is not paid or deposited before taking possession. The question of
payment or deposit of compensation will not arise if there is no acquisition
proceeding. In case where possession is taken prior to acquisition proceedings
a party may have a right to claim compensation or interest. But such a claim
would not be either under Section 34 or Section 28. In our view interest under
these Sections can only start running from the date the compensation is
payable. Normally this would be from the date of the Award. Of course, there
may be cases under Section 17 where by invoking urgency clause possession has
been taken before the acquisition proceedings are initiated. In such cases,
compensation, under the Land Acquisition Act, would be payable by virtue of the
provisions of Section 17. As in cases under Section 17 compensation is payable
interest may run from the date possession was taken. However, this case does
not fall into this category.
view of the above, we hold that the valuation would be a sum of Rs.21,957 per cottah.
The claimants would also be entitled to solatium at the rate of 30% and further
entitled to additional compensation at the rate of 12% from 5th August, 1983 to 16th September, 1986. If after giving credit for the amounts paid or
deposited, it is found that compensation payable has not been paid or deposited
then interest thereon, either under Section 28 or 34 will be payable from that
date of the Award i.e. 16th September, 1986 till payment.
Appeals stand disposed of accordingly. There will be no order as to costs.