Trust (Regd.), Faridkot & Ors. Vs. State of Punjab & Ors.
[Civil Appeal No.
4005 of 2012 Arising out of SLP (C) No. 26866 of 2009]
J U D G M E N T
P. Sathasivam, J.
appeal is directed against the final judgment and order dated06.01.2009 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,
Farid kot in L.R. No. 20 of 1984.
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 on19.02.1982.
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 solatiumat 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, Faridkot, by order dated 11.02.1988 in L.R.No. 20 of 1984 disposed of
the reference by enhancing the compensation toRs.1,00,000/- per acre.
c. Against the aforesaid
order, the appellants preferred R.F.A. No.998of 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.
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.
only point for consideration in this appeal is whether the appellants have made
out a case for higher compensation as claimed.
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 threesides.
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
appellants that the exemplars for sale of one kanal or more are available to be
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.
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.
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
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
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.
1 kanal = 605 sq.
1 marla = 30.25 sq.
pointed out above, the Reference Court failed to take note of the highest exemplar,
namely, the sale transaction under Ext.A-61 dated22.07.1977. In this regard, it
is useful 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.”
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 neighbor hood of the acquired lands are the real basis to
determine the market value.
Court in Anjani Molu Dessai vs. State of Goa and Another,(2010) 13 SCC 710,
after relying upon the earlier decisions of this Courtin M. Vijayalakshmamma
Rao Bahadur (supra) and Hansraj (supra) held in para20 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.”
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 various sale deeds placed before the
authority/court for fixing fair compensation.
on the above principles, the market value as per Ext.A-61 dated22.07.1977 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-61are nearer to the lands of the
appellants under acquisition. This Court has time and again granted 10% to 15%
increase per annum. In Ranjit Singhvs. 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 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.
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 in as much 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 dated22.07.1977 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 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.
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 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) 8SCC 457. Based on the
earlier Constitution Bench decision in Sunder(supra), the present Constitution
Bench held that the claimants would been titled 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 entitled to interest on solatium and additional market value as held in the
above referred two Constitution Bench judgments.
the light of the above discussion, the appellants have made out acase for
enhancement of compensation. Accordingly, the same is fixed atRs.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.