Dilawar Singh &
Ors. etc. of India & Ors.
Appeal Nos.
9203/2010, 9204/2010, 9205-9209/2010 9210-9215/2010, 9216-9217/2010 and
9218-9219/2010
JUDGMENT
T.S. THAKUR, J.
Two questions fall
for determination in these appeals that arise out of orders passed by the High
Court of Punjab& Haryana at Chandigarh. These are - 1) Whether award of solatium
and interest is permissible even in cases where acquisition of land is made
under Requisitioning and Acquisition of Immovable Property Act 1952; and 2) Whether
the land owners were entitled to enhancement of compensation beyond Rs.200/-per
marla determined by the learned Single Judge. The questions arise in the
following backdrop. A large extent of land situate in the outskirts of Pathankot
in the State of Punjab and underlying different survey numbers was acquired for
defence purposes under the provisions of Requisitioning and Acquisition of
Immovable Property Act, 1952. Failure of the parties to arrive at an agreement
as to the amount of compensation payable to the expropriated owners of the land
in questioned the owners to seek appointment of an Arbitrator for determination
of the amount payable to them. The Government did not respond to the said request
for a longtime which forced the land-owners to approach the High Court of
Punjab and Haryana in a writ petition seeking a mandamus directing the Government
to appoint an Arbitrator. It is only after the said petition was allowed and a mandamus
issued that the Government appointed the District Judge, Gurdaspur as an
Arbitrator, sixteen yearsafter the lands had been acquired. The Arbitrator recorded
evidence and after hearing the parties came to the conclusion that the owners
were entitled to compensation that ranged between Rs.50/- per marla (Rs. 1000/-
perkanal) for land relevant to Civil Appeal No.9216-9217/2010to Rs.200/- per
marla for lands relevant to Civil No. 9198-9202/2010. Solatium @ 30% and
interest @ 9% for the first year and 15% for the subsequent years till payment
of the amount of compensation to them was also held payable to the landowners.
Aggrieved by the said award the Union of India appealed to the High Court,
inter alia, contending that the Arbitrator was not justified in awarding nor
was there any provision for granting solatium and interest under the Act
aforementioned. The land-owners also challenged the award made by the
Arbitrator by filing cross-objections before the High Court in which they
prayed for enhancement of compensation payable to them to Rs.500/- per marla.
Bya common judgment impugned in these appeals the High Court has dismissed the
appeals filed by the Union of India. The cross-objections filed by the owners
were also dismissed by separate orders unsupported by any reasons for denying
the enhancement prayed for by them. Relying upon the decision in Jagdish Prasad
v. The Competent Authority, the High Court held that award of compensation @
Rs.150/-per marla by the Arbitrator was justified on a uniform basis for all
kinds of lands. The High Court overlooked the fact that in some cases the
compensation awarded was Rs.50/-per marla while in some others the same was
awarded @Rs.200/- per marla. The High Court also noticed that compensation at
the same rate had been granted to owners of land in village Nalunga which award
had been affirmed by the High Court in LPA 721 of 1987 filed by the Union of India
and decided on 3rd September, 1987. The High Court also came to the conclusion
that award of solatium and interest was justified having regard to the delay on
the part of Government in appointing an Arbitrator. Reliance was placed by the
High Court on the decision of this Court in Union of India v. Hari Krishan
Khosla (Dead)by LRs. 1993 Supp. (2) SCC 149. The High Court, however, modified
the order to the extent that instead of describing the amount as solatium and
interest the same was described as compensation for the lands acquired by the Government.
Both the parties have come up in appeal against the above order. While the
appeals filed by the Union of India call in question the correctness of the
view taken by the High Court in regard to solatium and interest, the cross
appeals filed by the owners assail the correctness of the orders passed by the High
Court whereby cross-objections seeking enhancement of the amount of
compensation to Rs.500/-per marla have been rejected by non-speaking orders. It
is common ground that the provisions of the Requisitioning and Acquisition of
Immovable Property Act,1952 do not make any provision for the grant of solatium
or interest to the expropriated landowners. The absence of any such provision
in the said Act was in fact made a basis for a challenge to the constitutional
validity of the enactment which was repelled by this Court in Union of India v.
HariKrishan Khosla 1993 (Supp) 2 SCC 149. This Court pointed out that any
comparison between acquisition made under the Requisitioning and Acquisition of
Immovable Property Act, 1952 with that made under the Land Acquisition Act
would be odious in view of the dissimilarities between the two enactments. That
decision was followed in subsequent pronouncements of this Court in Union of
India v. Chajju Ram 2003 (5) SCC 568 where a similar attack was mounted against
the constitutional validity of Defence of India Act,1971 but repelled by this
Court relying upon the decision in Hari Krishan Khosla. What is noteworthy is
that in both these matters this Court had made a distinction between cases in which
there was inordinate delay in the appointment of an Arbitrator and consequent
delay in the determination of the amount of compensation payable to the owners
and other case where there was no such delay. In paragraph 79 of the judgment
of this Court in Hari KrishanKhosla, this Court observed:
"This is a case
in which for 16 years no arbitrator was appointed. We think it is just and
proper to apply the principle laid down in Harbans Singh Shanni Devi v. Union
of India (Civil Appeal Nos. 470 and 471 of 1985, disposed of by this Court on
February 11, 1985). The Court held as under: "Having regard to the
peculiar facts and circumstances of the present case and particularly in view
of the fact that the appointment of the arbitrator was not made by the Union of
India for a period of 16 years, we think this is a fit case in which solatium
at the rate of 30 per cent of the amount of compensation and interest at the rate
of 9 per cent per annum should be awarded to the appellants. We are making
this order having regard to the fact that the law has in the meanwhile been
amended with a view to providing solatium at the rate of 30 per cent and
interest at the rate of 9 per cent per annum."
Even in Union of
India v. Chajju Ram (supra), this Court noted the delay in the appointment of
an Arbitrator and directed that the amount of interest and solatium paid to the
land owners decades back shall not be recovered fromthe land owners. This Court
observed:
8 "In these
cases also, it is said that the arbitrators have not yet been appointed despite
the demand made in this behalf by the respondents. The amount of solatium at the
rate of 15% per annum and the interest thereupon had been paid in the early eighties
when the Punjab and Haryana High Court declared the said Act ultra vires Article
14 of the Constitution of India. In the peculiar fact situation obtaining in these
cases and inasmuch as the amounts sought to be recovered are small which were
paid to the respondents decades back, we are of the opinion that interest of
justice shall be met if the appellants are directed not to recover the amount
of compensation from the respondents pursuant to or in furtherance of this
judgment. However, we hasten to add that this direction shall not be treated as
a precedent." The above decisions were then followed by this Court in Prabhu
Dayal and Others v. Union of India 1995 (4)SCC 221. That was also a case where
the appointment of Arbitrator was delayed by 22 years. This Court relying upon
the decision in Hari Krishan Khosla and Harbans Singhv. Union of India, C.A.
Nos. 470 & 471 of 1985 disposed of on 11th February 1985, observed:
"It is next
contended that the appellants are entitled to the solatium though in law they are
not entitled but in equity they are entitled to the solatium for the reason
that 9 for 22 years arbitrator was not appointed to determine the market
value. In support they relied upon the judgment of this Court in Union of
India v. Hari Krishan Khosla. Therein this Court relied upon another judgment
in Harbans Singh v. Union of India. In that judgment this Court said that
having regard to the peculiar facts and circumstances of the present case and
in view of the fact that the appointment of the arbitrator was not made by
the Union of India for period of 16 years, this Court considered in equity to
give solatium at the rate of 30 per cent of the amount of compensation and
interest at the rate of 9 per cent per annum should be awarded to the
appellants therein. In this case, the question of appointing the arbitrator
would arise only when the market value offered was rejected by the claimants. The
offer was made and rejected on 13-10- 1961 and the arbitrator came to appoint
on 22-9-1966 after five years. Under these circumstances, the claimants are
entitled to solatium at the rate of 15 per cent on the market value. The appellants
did not challenge the rate of interest granted at 6 per cent. Accordingly
they are also entitled to the interest at the rate of 6 per cent per annum.
The appeals are accordingly allowed. The appellants are entitled to the relief
as stated above. No costs." We may at this stage to refer to a recent
decision ofthis Court in Union of India v. Parmal Singh and Others2009 (1) SCC 618
where the question whether solatiumand interest could be awarded to the
expropriated landowners under the Requisitioning and Acquisition of Immovable
Property Act, 1952 was once again examined. Relying upon the decision of this
Court in Satinder Singhv. Umrao Singh AIR 1961 SC 908, Union of India v. HariKrishan
Khosla (supra) and Union of India v. ChajjuRam 2003 (5) SCC 568 and the English
decision in Swiftand Co. v. Board of Trade 1925 AC 520(HL) and Inglewood Pulp and
Paper Co. v. New Brunswick Electric Power Commission 1928 AC 492, this Courtupheld
the award of interest in favour of the landowners. This Court said:
"When a
property is acquired, and law provides for payment of compensation to be determined
in the manner specified, ordinarily compensation shall have to be paid at the
time of taking possession in pursuance of acquisition. By applying equitable principles,
the courts have always awarded interest on the delayed payment of compensation
in regard to acquisition of any property. When a requisitioned property is acquired,
as possession had already been taken from the landholder, the compensation becomes
payable from the date of acquisition. When a property is requisitioned, the
landowner is compensated for the denial of possession by paying compensation based
on the rent it would have fetched had it not been requisitioned. But once the
property is acquired, the rent is stopped, as compensation based on open market
value becomes payable against acquisition. 11 Therefore, while interest is
payable, it is not awarded from the date of requisition (taking over of
possession) but only from the date of acquisition. This principle has been
recognised and applied by the courts consistently." It is noteworthy that
the High Court of Punjab and Haryana has in Union of India v. Inder Singh and
Anr. inLPA No. 1918 of 1989 and connected matters upheld grant of solatium and
interest in regard to a similar acquisition made in terms of a notification
issued in January 1970.While doing so the High Court placed reliance upon its
decision in Shankar Singh and Others v. Union of India1988 (1) PLR 163 Mr.
Subramanium, learned Solicitor General fairly conceded that no appeal has been preferred
by the Union of India against the decision in Shankar Singh’s case (supra) or
that delivered in Union of India v. Inder Singh and Anr (supra). In that view
of the matter therefore and having regard to the fact that there was an
inordinate delay of 16 years in the appointment of an Arbitrator in the present
cases, we have no hesitation in holding that the principle laid down by this
Court in the decisions referred to above would entitle the land owners to the
benefit of solatium and interest especially when the owners who have lost land
in similar circumstances and for the same purpose have been given such a
benefit.
That brings us to
the question whether the land-owners are entitled to claim any enhancement in
the amount of compensation determined in these cases. In Union of India etc. v.
Inder Singh and Anr. (LPA No.1918 of 1989) and connected matters to which we
have referred earlier the High Court has upheld the enhancement of compensation
toRs.350/- per marla. The High Court was in that case dealingwith a similar
question arising out of the very same acquisition process. Relying upon its
decision in ShankerSingh and Ors. v. Union of India 1988 (1) PLR 163, a Single
Bench of the High Court in Inder Singh's case(supra) enhanced the compensation
payable to the land-owners to Rs.350/- per marla. Five appeals were preferred
before the Division Bench against the said order out of which two appeals were
dismissed by separate orders of the Court while the third was dismissed for
non-prosecution. The result was that out of five appeals challenging the order
passed by the Single Judge awards in favour of the land-owners in the case of
three dismissed appeals attained finality entitling the land-owners respondents
in those appeals to compensation@ Rs.350/- per marla. The refusal of a similar
relief in theremaining cases was not, therefore, considered just and equitable
when there were no distinguishing features to justify such a refusal. The High
Court also found that the decision in Shanker Singh' case (supra) was squarely
applicable in the case before it on account of the proximity of the
acquisitions in point of time. The notification in Shanker Singh' case (supra)
was issued on 6th March, 1970whereas that in Inder Singh' case (supra) was
issued on 9thJanuary, 1970. The amount of compensation determined in Shanker
Singh's case (supra) was therefore found by the High Court to be relevant for
award of compensation in Inder Singh's case (supra) also In the present batch
of cases except the case the notification for acquisition was issued in
February 1970which is proximate in point of time to those issued in the Shanker
Singh and Inder Singh's cases (supra). The notification in Union of India v.
Mohinder Singh (Civil Appeal No. 9204/2010) was issued on 12.5.1964 and
published on 12.6.1964. That apart the lands in question were all acquired for
the very same purpose and are situated on the outskirts of a growing town like
Pathankot. The growing non-agriculture potential of such lands is also not in
serious dispute. The High Court has failed to notice all these aspects
apparently because the decisions in ShankerSingh's case and that delivered in
Inder Singh's case(supra) were handed down subsequent to the impugned order.
Suffice it to say that on the material available before us we see no reason why
the amount of compensation payable to the landowners appellants in these appeals
should also not be enhanced to Rs.350/- per marla with proportionate benefits
towards solatium and interest as awarded by the Arbitrator and upheld by the
High Court in those cases and in similar other cases to which we have referred
in the earlier part of this order. In so far as Mohinder Singh's case (supra)
is concerned, the appeal has been filed by the Union of India against grant ofsolatium
and interest. No appeal has been filed by the owners in that case for
enhancement of the amount of compensation. Even otherwise in the absence of any
cogent evidence to justify any such enhancement, there is no room for directing
payment of a large amount of compensation. In the result, we allow Civil
Appeals Nos.9198-9202/2010 and Civil Appeals Nos.9218-9219/2010 filed by the
owners and modify the award made by the Arbitrator to the extent that instead
of Rs.200/- per marla, the owners shall be entitled to 350/- per marla towards
compensation with proportionate benefits like solatium and interest on the said
amount. The appellants-owners shall also be entitled to proportionate costs in
this Court and the Courts below.
Civil Appeals Nos.9203/2010,
9204/2010, 9205-9209/2010, 9210-9215/2010 and 9216-9217/2010 filed by Union of
India, however, fail and are dismissed leaving the parties to bear their own
costs in these appeals.
.................................J.(MARKANDEY
KATJU)
.................................J.(T.S. THAKUR)
New
Delhi
October
26, 2010
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