Karnataka
Electricity Board Vs. The State of Karnataka & Ors [2002] Insc 84 (19 February 2002)
M.B.
Shah, B.N. Agrawal & Arijit Pasayat Shah, J.
Leave
granted.
Question
involved in these appeals iswhether award passed by the Land Acquisition
Officer (hereinafter referred to as "LAO") is in conformity with the
agreement between the parties. As such, there is not much difference between
the two but for one or the other reason parties including the LAO have taken
unjustified stand. Hence this litigation.
Appellant
Karnataka Electricity Board challenged the order dated 26.7.2000 passed by the
learned Single Judge rejecting its Writ Petition No.4804 of 1999, before the
Division Bench of the High Court of Karnataka at Bangalore by filing Writ
Appeal Nos.6027-35 of 2000 (LA). Those appeals were dismissed by the impugned
judgment and order dated 10.1.2001. Hence these appeals.
In
Writ Petition No.4804 of 1999, appellant challenged the award dated 27.7.1998
passed by the LAO granting compensation @ Rs.14,250/- per gunta as agreed
between the parties and also directing the appellant to pay solatium as well as
interest on the said amount @ 9% per annum for the first year and @ 15% per
annum for the subsequent years from the date of issue of notification under
Section 4(1). The LAO also directed that compensation amount should be 50% of
the total value as directed by the Member Secretary, Urban Development
Authority, Cauvery as the land was undeveloped area, despite the agreement that
compensation was to be paid for 2/3rd land and 1/3rd was to be deducted on the
ground that it was undeveloped.
The
writ petition was disposed of by the learned Single Judge by holding that there
was not much difference between the amount awarded by the LAO and the amount
payable under the Agreement.
The
Court also held that award was strictly in accordance with the Land Acquisition
Act. The appeals were also dismissed by the Division Bench of the High Court on
the ground that as the appellant was not willing to sign and submit form-D and
had raised certain objections with regard to the payment of solatium, the LAO
was justified in passing the award in accordance with law. The court observed
that appellant even though a statutory body resiled from the agreement and
committed its breach.
For
dealing with the contentions raised in these appeals, we would narrate the
facts in brief. Admittedly, an agreement dated 2nd February, 1995 was entered
into between the appellant and respondent Nos. 2 to 6 (claimants) for
acquisition of 21 acres 14 guntas of land belonging to the claimants, situated
in R.S. No.222 and 226, Haveri Town for the purpose of establishing a 220 K.V.
capacity electricity power station. The said agreement inter alia provides that
(a)
appellant was looking for land in Haveri town for the use of Karnataka
Electricity Board (hereinafter referred to as 'KEB') and to install power
station for public purpose;
(b) appellant
and claimants negotiated for the purpose of acquisition of land and
consideration was fixed by mutual discussion at Rs.14250/- (rupees fourteen
thousand two hundred and fifty only) per gunta;
(c) it
was expressly made clear that the claimants have agreed to receive
consideration @ Rs.14,250/- per gunta only for the 2/3rd area of the scheduled
property and hand over the entire scheduled property to K.E.B.
(d) claimants
have agreed voluntary to accept the considerations as it was a profitable
consideration per gunta and it was fair market value of the property;
(e) appellant
and claimants have agreed to apply to the Land Acquisition Officer, Haveri to
acquire the land and to pay the compensation to the claimants and also to hand
over the land to K.E.B. in the manner prescribed under the Land Acquisition
Act, 1894.
In
pursuance to the aforesaid agreement, parties inter alia covenanted as under: -
(As per the agreement, Ist Party is claimants and 2nd Party is K.E.B.): -
1.
that the first party agreed that the market value of the property of the
schedule property is Rs.14,250/- per gunta and it shall not exceed at any cost
more than Rs.14,250/- per guntas;
2. that
the first party has agreed to receive consideration at a rate of Rs.14,250/-
per gunta only for the 2/3rd area of the schedule property and to hand over the
entire schedule property to the second party;
3. ..
4.
that the first party agreed that he will receive the agreed consideration
amount through land acquisition officer in the manner prescribed by law and
also agree to hand over the possession of the property immediately on execution
of this agreement. Second party may enter into the schedule property to install
the power station according to their requirements or utilise the said property
in any manner as it deems fit;
Similarly,
K.E.B. agreed as under: - 1. ..
2. that
the second party shall pay consideration amount at Rs.14,250/- per gunta of
only 2/3rd area of the schedule property and to take possession of the entire
schedule property;
3. that
the second party shall bear all the incidental expenditure required to acquire
the schedule land;
4. that
the second party agreed to pay to the first party solatium amount to be fixed
by the land acquisition officer.
The
agreement was signed by both the parties on 2nd February, 1995. On the basis of the said agreement
and on the joint request of the parties, the State Government issued the
Notification under Section 4 of the Land Acquisition Act on 08.9.1995, Enquiry
under Section 5A of the Act was held and Section 6 Notification was issued on
26.9.1996. Before that, appellant was directed to deposit a sum of
Rs.57,62,402/- by letter dated 3.5.1996 on the basis of agreed amount and hence
on 4.7.1996 appellant deposited the same by demand draft dated 29.6.1996.
In the
present case, the dispute arises mainly because of unjustified stand taken by
the parties including the LAO in not passing an award on the basis of the
written agreement which was produced before him. Firstly, it was unjustified
stand taken by the officers of the appellant that claimants were not entitled
to solatium.
As
quoted above, it was specifically mentioned in the covenant that the appellant
had agreed to pay to the claimants solatium amount to be fixed by the LAO. Solatium
amount is required to be fixed under Section 23(2) of the Land Acquisition Act
@ 30%. After agreeing to pay the solatium, it was totally unreasonable on the
part of the officers of the appellant to contend that they were not bound to
pay the solatium as there was no compulsory acquisition.
Secondly,
the LAO also took an unjustified stand that appellant should sign the Form of
agreement as prescribed under the rules (as provided under sub-section (2) of
Section 11 of the Land Acquisition Act), even though the agreement signed by
both the parties was produced before him and at the request of parties, the
land acquisition proceedings were initiated. The learned Additional Solicitor
General has produced before us the Form-D prescribed under Rule 10B of the
Rules framed by the State Government under the Land Acquisition Act. The said
form only contemplates the signatures of the land owners i.e. claimants and
that of an officer authorised under Article 299 of the Constitution of India on
behalf of and under the direction of the Governor of Karnataka. The Form also
prescribed indemnity bond which is required to be executed by the claimants.
This prescribed Form nowhere provides that the person for whose benefit the
property is acquired, should sign the said form. Thirdly, it is also to be
stated that the claimants took unjustified stand that they were entitled to
recover interest on the amount as provided under Section 23(1)(a).
In our
view, the learned Additional Solicitor General rightly contended that
undisputedly there was a written agreement between the parties, which was
produced before the LAO and the LAO was bound to pass award in accordance with
the agreement. Law on this subject is settled. Granting of interest, solatium
and additional amount would depend upon contract between the parties. {Re:
State of Gujarat and others vs. Daya Shamji Bhai and others [(1995) 5 SCC 746];
Ishwarlal Premchand Shah and others vs. State of Gujarat and others [(1996) 4
SCC 174]; Abdul Aziz Abdul Razak and another vs. Municipal Corporation of
Greater Bombay and another [(1996) 8 SCC 126]}.
We
also agree with the learned Single Judge that the difference in the compensation
awarded by the LAO and the agreement is not much. Further, as the appellant had
agreed to pay to the claimants solatium amount to be fixed by the LAO,
therefore, award granting solatium cannot be said to be, in any way, illegal or
erroneous.
However,
as there is no specific agreement on payment of interest in the facts of the
present case, the award passed by the LAO granting the same cannot be
justified. Further, as the appellant had agreed to pay consideration amount at
the rate of Rs.14,250/- per gunta for 2/3rd area of the schedule property, it
was not open to the LAO to award compensation for one half area of the schedule
property.
In
this view of the matter, award passed by the LAO requires to be modified
accordingly. It is ordered that the claimants shall be paid compensation at the
agreed rate of Rs.14,250/- per gunta for 2/3rd area of the schedule property
and not 50% thereof. As directed by the LAO, claimant also would be entitled to
get 30% of solatium and on the said amount of solatium they would be entitled
to have interest in view of the decision rendered by the Constitution Bench of
this Court in Sunder vs. Union of India [(2001) 7 SCC 211]. However, the award
directing that the appellant shall pay interest @ 9% per annum for the first year
and @ 15% per annum for the subsequent years from the date of issue of notice
under Section 4(1) of the Land Acquisition Act on the amount of compensation is
set aside.
The
appeals stand allowed accordingly. There shall be no order as to costs
all-throughout.
J.
(M.B.
SHAH) J.
(B.N.
AGRAWAL) ....J.
(ARIJIT
PASAYAT) February 19,
2002.
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