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citation codes
Case Number
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Acts
  • provisions of sub-section (2) of section 23 and section 28 of the principal Act, as amended by clause (b) of section 15 and section 18 of this Act
  • sub-section (2) of section 30 of the Amendment Act, the amended provision of section 23 (1-A)
  • SECTION 3 LAND ACQUISITION AMENDMENT AND VALIDATION ACT 1967
  • provisions of sub-section (1-A) of section 23 of the principal Act,
  • LAND ACQUISITION AMENDMENT ACT 1984
  • section 30 (2) of the Amendment Act this provision
  • sec. 4 of the Land Acquisition Act 1894 (the Act)
  • provisions of sub-section (1-A) of section 23
  • section 30 (1) (a) and (b) of the Amendment Act.
  • clause of sec. 23 (1). What sub-section (1-A)
  • section 23 or section 28 or section 34,
  • Section 30 (1) of the Amendment Act
  • section 30 (2) of the Amendment Act
  • sub-section (1-A) of section 23
  • provisions of section 23 (1-A)
  • Amendment Act of 1984.42.
  • section 4, suo-section (1)
  • Amendment Act of 1967
  • section 4 (1)
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
  • provisions of sub-section (2) of section 23 and section 28 of the principal Act, as amended by clause (b) of section 15 and section 18 of this Act
  • sub-section (2) of section 30 of the Amendment Act, the amended provision of section 23 (1-A)
  • SECTION 3 LAND ACQUISITION AMENDMENT AND VALIDATION ACT 1967
  • provisions of sub-section (1-A) of section 23 of the principal Act,
  • LAND ACQUISITION AMENDMENT ACT 1984
  • section 30 (2) of the Amendment Act this provision
  • sec. 4 of the Land Acquisition Act 1894 (the Act)
  • provisions of sub-section (1-A) of section 23
  • section 30 (1) (a) and (b) of the Amendment Act.
  • clause of sec. 23 (1). What sub-section (1-A)
  • section 23 or section 28 or section 34,
  • Section 30 (1) of the Amendment Act
  • section 30 (2) of the Amendment Act
  • sub-section (1-A) of section 23
  • provisions of section 23 (1-A)
  • Amendment Act of 1984.42.
  • section 4, suo-section (1)
  • Amendment Act of 1967
  • section 4 (1)
Smart Summary

Factual and Procedural Background

The appellants owned land in village Dhaka which was compulsorily acquired by the Union of India. A notification under section 4 of the Land Acquisition Act, 1894 was issued on 13-11-1959, followed by an award (Award No. 1557) by the Collector. On a reference under section 18, the Additional District Judge enhanced the compensation amounts for different blocks of land, except for one khasra (No. 613/572/206) where the Collector's valuation was retained. The appellants appealed to this Court seeking further enhancement of compensation, claiming a uniform market value of Rs. 15,000 per bigha for most of their land and Rs. 8,000 per bigha for the khasra in question. The Court was called upon to interpret the provisions of the Land Acquisition (Amendment) Act, 1984 in the context of these appeals.

Legal Issues Presented

  1. Whether the appellants are entitled to enhanced compensation at a uniform rate of Rs. 15,000 per bigha for their land, excluding Khasra No. 613/572/206, for which Rs. 8,000 per bigha is claimed.
  2. Whether the appellants are entitled to solatium at the increased rate of 30% as per the Land Acquisition (Amendment) Act, 1984.
  3. Whether the additional amount of 12% per annum on market value, as provided under section 23(1-A) of the Amendment Act, applies retrospectively to these cases.
  4. Whether solatium is payable on the additional 12% per annum amount awarded under section 23(1-A).
  5. Whether the appellants are entitled to interest under the amended section 28 on the excess compensation awarded over the Collector’s original award, including the enhanced amounts awarded by the Additional District Judge and this Court.
  6. Whether interest under section 4(3) of the Land Acquisition (Amendment and Validation) Act, 1967 is payable on the market value, and if so, whether it overlaps with interest under section 28 of the Act.
  7. The retrospective or prospective application of the amended provisions of the Land Acquisition Act, particularly sections 23(1-A) and 28.

Arguments of the Parties

Appellants' Arguments

  • The appellants claimed compensation at Rs. 15,000 per bigha uniformly for their lands in blocks A, B, and C, relying on a precedent where similar land was valued at Rs. 20,000 per bigha.
  • They contended entitlement to solatium increased to 30% under the 1984 Amendment Act.
  • They claimed the additional 12% per annum on market value from the date of notification under section 4 should apply to their case, despite the notification predating the Amendment Act.
  • The appellants argued for solatium to be payable on the additional 12% per annum amount.
  • They sought interest at the higher rates (9% and 15%) under the amended section 28 on the enhanced compensation awarded by the Additional District Judge and this Court.
  • They also claimed interest under section 4(3) of the 1967 Amendment Act due to the delay between notification and declaration.

Respondent's Arguments (Union of India)

  • The Union of India contended that the 12% per annum provision under section 23(1-A) applies only to cases where the section 4 notification was issued after the Amendment Act’s commencement date (24-9-1984).
  • The respondent opposed the claim for solatium on the additional 12% per annum amount.
  • The Union argued that the proviso to section 28 (providing 15% interest after one year) is penal in nature and should not be enforced retrospectively.
  • The Government counsel opposed the enhanced compensation and benefits claimed under the Amendment Act, citing the burden on the Consolidated Fund of India.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Gulzari Mal v. Union of India, LPA No. 132 of 1979 Basis for determining just market value compensation for land acquisition The Court relied on this precedent to justify fixing the market value at Rs. 15,000 per bigha for the appellants’ land blocks A, B, and C.
Union of India v. Ram Mehar, AIR 1973 S.C. 305 Distinction between market value and solatium; market value is distinct from compensation The Court held that solatium is payable only on market value and the additional 12% per annum amount is not part of market value but a statutory augmentation of compensation.
Gajapati Raju v. Rev. Divl. Officer, AIR 1930 Privy Council 98 Definition of market value as the price a willing vendor might reasonably expect from a willing purchaser The Court reaffirmed the classical definition of market value to distinguish it from compensation components.
State of U.P v. Joginder Singh, AIR 1963 S.C. 1618 Interpretation of mandatory vs. permissive language in statutes (use of "may") The Court applied this principle to construe the word "may" in section 28 as mandatory in awarding interest on excess compensation.
Collector v. Habib-Ullah-Din, AIR 1967 J & K 44 (FB) Similar principle regarding the mandatory character of statutory provisions Supported the interpretation that the interest provisions under section 28 are mandatory despite the use of "may".

Court's Reasoning and Analysis

The Court began by recognizing the appellants' entitlement to enhanced compensation based on precedent and the principle of just compensation. It fixed the market value at Rs. 15,000 per bigha for most of the land and Rs. 8,000 per bigha for the specific khasra, finding these rates neither extravagant nor unjustified.

Regarding solatium, the Court noted the increase from 15% to 30% by the 1984 Amendment Act and accordingly awarded 30% solatium on the market value. However, it carefully analyzed whether solatium could be awarded on the additional 12% per annum amount introduced by section 23(1-A). The Court held that this additional amount is "in addition to the market value" and does not form part of it, being a statutory augmentation to compensate for inflation and delay rather than a reflection of open market value. It relied on the Supreme Court's ruling in Ram Mehar to emphasize the distinction between market value and compensation components, concluding that solatium is payable only on the market value, not on the additional 12% amount.

The Court also interpreted the transitional and retrospective provisions of section 30 of the Amendment Act, holding that the additional 12% per annum applies to proceedings pending or commenced before the Amendment Act’s commencement date, provided the case is decided thereafter. Thus, the appellants are entitled to this additional amount from the date of notification to the date of award.

On the issue of interest under section 28, the Court analyzed the amended provision awarding 9% interest for the first year and 15% thereafter on the excess compensation (difference between what the Collector awarded and what the Court determines the landowner is entitled to). It rejected the Union of India's argument that the proviso is penal and unworkable, emphasizing that the landowner must be compensated for the delay in payment. The Court held that the interest provisions are mandatory despite the use of "may" in the statute, relying on established principles of statutory interpretation.

The Court further clarified that interest under section 4(3) of the 1967 Amendment Act is applicable due to the delay between notification and declaration, provided it does not overlap with interest under section 28. It also noted that the 1967 Amendment Act has not been repealed by the 1984 Amendment Act.

Overall, the Court emphasized the legislature’s intent behind the Amendment Act: to rectify the inadequacy of compensation under the old law by increasing solatium, interest rates, and adding the 12% per annum amount to protect landowners from inflation and delay. The Court underscored the distinction between market value and compensation, ensuring that compensation is just and reflects real economic conditions.

Holding and Implications

The Court allowed the appeals.

The appellants are entitled to:

  • Market value compensation fixed at Rs. 15,000 per bigha for land in blocks A, B, and C, and Rs. 8,000 per bigha for Khasra No. 613/572/206.
  • An additional amount of 12% per annum on the market value from the date of notification (13-11-1959) to the date of the award (30-3-1963), as provided under section 23(1-A) of the Amendment Act.
  • Solatium at 30% on the market value (not on the additional 12% per annum amount).
  • Interest at 9% per annum for the first year and 15% per annum thereafter on the excess compensation awarded over the Collector’s original award, including enhancements by the Additional District Judge and this Court.
  • Interest under section 4(3) of the 1967 Amendment Act at 6% per annum on the market value, subject to no overlap with section 28 interest.
  • Deduction of any amounts already paid on account of market value, interest, and solatium.
  • Proportionate costs.

The decision does not create new precedent beyond clarifying the retrospective application of the Amendment Act’s provisions and the distinction between market value and compensation components. It reinforces the legislature’s intent to provide just and fair compensation to landowners affected by compulsory acquisition, adjusting for inflation and delay in payment.

    Raghbir Singh (Deceased) Through Legal Representatives & Ors. v. Union Of India, Etc. S

    Avadh Behari, J. (Oral):— For the first time in these two appeals we are called upon to interpret the provisions of the Land Acquisition (Amendment) Act, 1984.

    2. These are the facts. The land of the appellants situated in village Dhaka was compulsorily acquired by the respondent, Union of India. Notification under sec. 4 of the Land Acquisition Act 1894 (the Act) was issued on 13-11-59. In due course the Collector made the award (Award No. 1557). On a reference under section 18 of the Act the Additional District Judge enhanced the compensation in this manner:
    (i) For block A land he raised the compensation from Rs. 4,500 per bigha as determined by the Collector to Rs. 8,000 per bigha.
    (ii) For block B land he enhanced the compensation from Rs. 3,200 to Rs. 6,000 per bigha.
    (iii) As regards block C land the compensation was increased from 2,500 to Rs. 4,000 per bigha.
    (iv) There was one Khasra No. 613/572/206 which was in block C. For that he did not make any enhancement. He retained the valuation of the Collector which he had fixed at Rs. 2,500 per bigha.
    3. From the orders of the Additional District Judge dated 10-6-68 the appellants appeal to this Court. They claim in these two appeals enhancement of compensation. They claim that market value of their entire land be fixed uniformly at Rs. 15,000 per bigha except for Khasra No. 613/572/206 for which they claim at the rate of Rs. 8,000 per bigha.
    4.The appellants mainly rely on a judgment of the division bench in Gulzari Mal v. Union of India, LPA No. 132 of 1979 decided on 6-8-1984 (1) by Prakash Narain C.J and B.N Kirpal J. In that case the land owners were awarded compensation at the rate of Rs. 20,000 per bigha for their land in block A. Basing himself on this, appellants' counsel submits that it will be just to award compensation at the uniform rate of Rs. 15,000 per bigha for all the lands of the appellants excluding Khasra No. 613/572/206. He says that in any event the judge himself had made the distinction between classes of A, B, C lands by making a difference of Rs. 2,000 in each of the three blocks. If class A is Rs. 20,000 per bigha, he argues, class B and C lands can well be Rs. 15,000 per bigha on the basis of distinction made by the judge. We find force in this contention. We, therefore, hold that it is just and fair to fix the market value at Rs. 15,000 per bigha for the appellants' land in blocks A, B and C as claimed by them. For Khasra No. 613/572/206 the claim is limited to Rs. 8,000 per bigha which we think is also in no way extravagant. We determine the market value of this Khasra at the rate of Rs. 8,000 per bigha.
    5. In appeal RFA 113 of 1968 the entire claim is for Rs. 3,65,217.39 P. on account of market value of the land acquired. The market value will in no case exceed this amount. In RFA 114 of 1968 the total amount of the market value of the land asked for is Rs. 33,000. The appellants in that appeal will not be entitled to more than this amount on account of market value of their land.
    6. In addition to the market value of the land so determined above, the appellants will also be entitled to 30 per cent on the market value on account of solatium. By the Land Acquisition (Amendment) Act, 1984 (Amendment Act) which received the assent of the President on 24-9-1984, solatium has been increased by section 23 (2) from 15 per cent to 30 per cent. Therefore, we have awarded 30 per cent “in consideration of the compulsory nature of the acquisition” popularly known as solatium.
    7. The Amendment Act has given several benefits to the land owner whose land is taken. One such benefit is embodied in section 23 (1-a). This newly added sub-section (1-A) reads as under:
    “ (1-A) In addition to the market value of the land as above provided, the Court shall in every case award an amount calculated at the rate of twelve per centum per annum on such market value for the period commencing on and from the date of the publication of the notification under section 4, suo-section (1) in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier.
    8. According to sub-section (1-A) “in addition to the market value of the land” the land owners will be entitled to an amount at the rate of 12 per cent per annum on the market value for the period commencing on and from the date of the publication of the notification under section 4 (1) to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier. In the present case the notification was made on 13-11-1959. The award was made on 30-3-1963. So the additional amount of 12 per cent per annum on the market value of the land determined above will be payable to the land owners from 13-11-1959 to 30-3-1963.
    9. Counsel for the Union of India submits that the land owners are not entitled to the additional amount of 12 per cent per annum because, on her submission, this provision will apply only to cases where section 4 notification is issued after 24-9-84 the date on which the Amendment Act received the assent of the President. We do not agree. Section 30 (1) of the Amendment Act deals with “transitional provisions”. It says:
    “30 (1). The provisions of sub-section (1-A) of section 23 of the principal Act, as inserted by clause (a) of section 15 of this act, shall apply and shall be deemed to have applied, also to, and in relation to,
    (a) every proceeding for the acquisition of any land under the principal Act pending on the 30th day of April, 1982 the date of introduction of the Land Acquisition (Amendment) Bill, 1982, in the House of the People, in which no award has been made by the Collector before that date;
    (b) every proceeding for the acquisition of any land under the principal Act commenced after that date, whether or not an award has been made by the Collector before the commencement of this Act.
    (2) The provisions of sub-section (2) of section 23 and section 28 of the principal Act, as amended by clause (b) of section 15 and section 18 of this Act respectively, shall apply, and shall be deemed top have applied, also to, and in relation to, any award made by the Collector or Court or to any order passed by the High Court or Supreme Court in appeal against any such award under the provisions of the principal Act after the 30th day of April 1982 the date of introduction of the Land Acquisition (Amendment) Bill, 1982 in the House of the People and before, the commencement of this Act.”
    10. The critical words in this section are “also to” used in sub-section (1). This shows that firstly this provision of additional amount made in section 23 (1-a) will also apply and shall he deemed to have applied to every proceeding which was pending on 30-4-1982 and in which no award had been made by the Collector before that date. Secondly this provision will also apply to every proceeding for acquisition of the land which was commenced after 30-4-1982, whether or not an award has been made by the Collector before 24-9-1984. This provision applies to cases falling within the two cut-off dates — 30-4-1982 and 24-9-1984. But if a case is decided after 24-9-1984, after the Amendment Act has become the law of the land, the Courts are bound to give effect to the provisions of sub-section (1-A) of section 23 which means that the land owner “in addition to the market value of the land” will also be entitled to 12 per cent per annum on such market value. This is exactly the case here. We must apply the law of the land and award 12 per cent per annum on the market value from 13-11-1959 the date of section 4 notification till 30-3-1963 the date of the award. The word “also” is a copulative carrying on the sense that though the law enacted will apply to future cases, it will also apply to past in given cases.
    The position comes to this. section 23 (1-a) is prospective in character and will apply to all cases which are decided after 24-9-1984. It is made retrospective only in two contingencies specified in section 30 (1) (a) and (b) of the Amendment Act. As regards the period preceding 24-9-1984 it will not be applicable to a case other than a case falling within (a) and (b).
    11. By sub-section (2) of section 30 of the Amendment Act, the amended provision of section 23 (1-A) has not been made retrospective except in the above two cases. This means to an award of the Collector or Court or to any order passed by the High Court or Supreme Court in appeal between 30-4-1982 and 24-9-1984 the provisions of section 23 (1-A) shall not apply. The landowner shall not get the additional amount of 12 per cent even though his case was decided between 30-4-1982 and 24-9-1984 unless his case falls within section 30 (1) (a) or (b).
    12. Counsel for the land owners submits that the appellants are entitled to solatium on this additional amount of 12 per cent per annum which we have awarded them above. In our opinion, the land owners are not entitled to solatium on this additional amount. Under section 23 (2) as amended solatium is payable on the “market value of the land”. The question is whether the additional amount of 12 per cent per annum provided in sub-section (1-A) of section 23 forms part of the market value or not. If it is a part of this market value then, of course, the land owners are entitled to solatium. But if not, then solatium cannot be awarded on the additional amount of 12 per cent per annum.
    13. In our opinion the additional amount is not a part of the market value. Our reasons are two. In the first place it is specifically said in sub-section (1-A) of section 23 that 12 per cent is “in addition to the market value of the land”. The same phraseology is used when it speaks of “12 per cent per annum on such market value”. The market value is determined under the first clause of sec. 23 (1). What sub-section (1-A) says in this. First determine the market value of the land on the date of the publication of the notification under sec. 4 (1) of the Act. Then award an additional amount of 12 per cent per annum on the market value of the land so arrived at by the court. Though calculated on the market value 12 per cent does not merge in the market value. It remains outside it. Because it is unrelated to the open market. It is an artificial augmentation of compensation. 12 per cent is a species of compensation.
    14. Secondly in Union of India v. Ram Mehar, AIR 1973 S.C 305 (2) the Supreme Court held that compensation consists of market value plus solatium. These are two distinct expressions. The first clause of section 23 (1) deals with the market value. Section 23 (2) as amended deals with solatium. It says:
    “In addition to the market value of the land, as above provided, the Court shall in every case award a sum of Thirty per centum on such market value, in Consideration of the compulsory nature of the acquisition.”
    15. The real question is: What is the meaning of the expression ‘market value’ as used in the first clause of section 23 (1). In Ram Mehar the Supreme Court said:
    “It seems to us that the term “market value” has acquired a definite connotation by judicial decisions. Any addition to the value of the land to the owner whose land is compulsorily acquired which addition is the result of such factors as are unrelated to the open market cannot be regarded as a part of the market value, (p. 309).
    16. Throughout the Act the legislature has maintained a distinction between the ‘market value’ and ‘compensation’. Market value is the price which a willing vendor might reasonably expect to obtain from a willing purchaser, as the Privy Council said in Gajapati Raju v. Rev. Divl. Officer, AIR 1930 Privy Council 98 (3). The term ‘compensation’ is the genus of which market value is a species. This is clear from section 23 itself which says in sub-section (1) that in determining the amount of compensation to be awarded for land the court shall take into consideration the matters mentioned therein. This distinction is further apparent from sections 17, 25, 28, and 28-A of the Act as amended where again and again the Legislature rises the word ‘compensation’ in contradistinction to the market value.
    17. Therefore there is a clear distinction between ‘market value’ and ‘compensation’. “Market value is, therefore, only one of the components in the determination of the amount of compensation”. (Ram Mehar p. 309).
    18. We cannot hold that 12 per cent forms part of the market value. The additional amount of 12 per cent is a statutory creation. It is a statutory increase. A sort of statutory allowance to the land owner. It is not related to open market. Nor it is a benefit arising out of “land” (Section 3-A). The additional amount of 12 per cent is certainly a part of the compensation and the land owner is entitled to interest on this amount also under section 28 of the Act as amended. But it is in no sense a part of the market value. Solatium which is awarded on “the market value of the land” under section 23 (2) cannot be awarded on the additional amount of 12 per cent per annum. It is an artificial increase in compensation. To boost the compensation the legislature has given an additional amount of 12 per cent. 12 per cent goes to increase the compensation and not the market value. Ram Mehar in our opinion is a complete answer to the land owner's claim to solatium on 12 per cent.
    19. The truth is that the time honoured test of' market value laid down in the Act of 1894 was proving inadequate in awarding just compensation. By awarding an additional amount of 12 per cent per annum on the market value the legislature is trying to cope with a situation complicated by inflation. The ravages of inflation reduced the compensation awarded on the old formula of 1894 to a mere pittance. It had no relation to reality. In 1984 the legislature has awarded an additional amount of 12 per cent per annum and other benefits to bridge the yawning gulf between prices prevailing 20 years ago when section 4 notification was issued and now when compensation is to be paid after the decision of the reference or appeal. The extra amount of 12 per cent per annum the legislature has given to the land owner to compensate him against the rising prices. This is the avowed policy of the legislature as declared in the statement of Objects and Reasons appended to the Amendment Act.
    20. The legislature is taking into consideration the chance in the value of money. Over the last fifteen years or so there has been a spectacular decline in the purchasing power of the rupee. Now 12 per cent is an extra amount in the quantification of total compensation. It is a bounty of the legislature. It is given to reduce the owner's loss of land. If it shows any thing it is this. That the law of compensation stood in need of correction and addition by the legislature. To the complaints of the land owners which were growing louder and louder the legislature gave a sympathetic ear. With a view to increase the compensation the Amendment Act was passed. The Amendment Act gives more money to the expropriated owner. The object is to alleviate his pain and suffering which compulsory acquisition inflicts upon him.
    21. Market value is the primary measure of compensation. Market is a real thing. People buy and sell in the market. Prices in the market rise and fall according to the law of demand and supply. In the market place “money talks”. The solution is not to be arrived at by the court holding an imaginary auction. So the legislature in the Amendment Act has left the concept of market value untouched. It has not distorted it. What it has done is this. It has pushed up the compensation by awarding more solatium, higher rates of interest, and an artificial addition of a fixed numerical figure. These three are components of compensation.
    22. We, therefore, hold that the land owners are not entitled to solatium of 30 per cent on the additional amount of 12 per cent per annum because it forms no part of the market value.
    23. Now we come to interest. The Amendment Act has provided for interest in section 28 as amended. The amended section reads as under:
    “Collector may be directed to pay interest on excess compensation —
    If the sum which, in the opinion of the Court, the Collector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation the award of the Court may direct that the Collector shall pay interest on such excess at the rate of nine per centum per annum from the date on which he took possession of the land to the date of payment of such excess into Court.
    Provided that the award of the Court may also direct that where such excess or any part thereof is paid into court after the date of expiry of a period of one year from the date on which possession is taken interest at the rate of fifteen per centum shall be payable from the date of expiry of the said period of one year on the amount of such excess or part thereof which has not been paid into Court before the date of such expiry.”
    24. A plain reading of the section shows that the land owners are entitled to 9 per cent per annum interest from the date on which the Collector took possession of the land to the date of payment.
    25. There was a considerable debate before us with regard to the proviso. The proviso says that the award of the court may also direct that where such excess compensation is paid into Court after the date of expiry of a period of one year from the date on which possession is taken, interest at the rate of 15 per cent per annum shall be payable by the Collector from the date of taking possession till payment. The main controversy is whether section 28 is retrospective or prospective. By section 30 (2) of the Amendment Act this provision has been clearly made retrospective. The legislature had imported a fiction. It is a deeming provision. Section 30 we have quoted in an earlier part of this judgment.
    26. On a reading of section 30 (2) of the Amendment Act it is clear to us that section 28 as amended is retrospective in character and would also be applicable to cases in which (1) the award is made by the Collector, or (2) by the Court of the district judge, or (3) to any order passed by the High Court, or (4) Supreme Court after 30-4-1982 when the Amendment. Bill was introduced in the House of the People and before the commencement of the Amendment Act, that is, 24-9-1984. These are two cut-off dates. If there is an award by the Collector or any enhancement ordered either by the district court or the High Court or the Supreme Court the amended provisions of section 28 shall apply provided the case falls within these two cut-off dates. To that limited extent it is retrospective. Otherwise it is prospective. Generally laws are intended to be prospective only. To alleviate harsh and unfair consequences of past transactions the statutes are sometimes made retrospective without injury to vested rights. The retrospective operation is mainly curative.
    27. Counsel for the Union of India says that this interpretation is not correct because it will make the proviso to the amended section 28 wholly unworkable. This argument is based on a misconception that the Collector is being asked to pay interest at the rate of 15 per cent even though the excess compensation was not known to him. And if the excess compensation is not known to him, so runs the arguments, how can he deposit the excess within one year from the date of taking possession. It is said that the proviso is penal in nature and therefore it ought not to be enforced. We do not agree with this submission.
    28. The wordings of the section are clear. The theory of section 28 is that the excess compensation awarded by the district court or the High Court or the Supreme Court is in fact a sum which the Collector “ought to have awarded as compensation” and as such was payable at the date of the taking of the possession. Though determined in future by the courts the “excess compensation” relates back to the date of taking possession of the owner's land. And it ought to be so. The Government cannot take the land as well as keep compensation with it. The taker of the land must pay interest on compensation for the delay. Therefore the legislature has gone to the aid of the land owner and has made its intention quite clear by opening the section with the words: “If the sum which in the opinion of the court the collector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation”. Therefore if there is an excess between the amount awarded by the Collector and as determined by the Court on reference under section 18 or on appeal by the High Court or on a further appeal by the Supreme Court, then such excess compensation shall carry interest not from the date when the excess is determined but from the date the Collector took possession of the owner's land. That interest is 9 per cent for the first year. After the expiry of the first year it is 15 per cent till the date of payment.
    29. We do not agree that the section is penal. The object is to pay just compensation to the land owner. This again is stated clearly in the Objects and Reasons. It is stated there that the compensation hitherto paid to the land owners was “unrealistic and iniquitous”. To compensate the land owner the interest rate has been increased in the first instance from 6 per cent to 9 per cent and in the second place to 15 per cent after the expiry of one year from the date of the taking of possession.
    30. Nor do we agree that the section is unworkable. We do not think that it is because of his default that the Collector is being asked to pay 15 per cent interest. He is being asked to pay 15 per cent because from the “ought” figure of compensation the land owner was kept out for so long.
    31. It is obvious that there will always be a lapse of time between the taking of possession of the land and the payment of compensation. Frequently the land owner will have to wait for a considerable time until Just compensation is determined and paid. What the land owner has therefore lost by the late receipt of the compensation, “excess” as it is called, is only that element of modern interest rates which truly represent the “use value” of money. These years of delay are truly years of deprivation when the land owner was kept out of land and out of compensation money.
    32. Though section 28 uses the word ‘may’ both in the main section and the proviso, it is mandatory. It means ‘shall’. Sometimes the legislature uses the word ‘may’ out of deference to the high status of the authority on whom the power and the obligation are intended to be conferred and imposed (State of U.P v. Joginder Singh, AIR 1963 S.C 1618 (4) (Sec also Collector v. Habib-Ullah-Din AIR 1967 J & K 44 (FB) (5). Therefore the rates of interest, namely, 9 per cent and 15 per cent per annum, are compulsory for the court to award. In 1894 when the Act was passed the rate of interest was 6 per cent per annum. In 1984 when the Amendment Act was passed the legislature has given power to the Collector and the Court to award 9 per cent per annum for one year and 15 per cent per annum thereafter till payment. (See section 34 as amended). The span of time remains the same. But now, under the amended law, it is broken into two parts: (1) for one year from the date of dispossession — 5 per cent per annum. (2) After the expiry of one year — 15 per cent per annum till payment, to maintain the symmetry of the section the modern draftsman has added a proviso to the old section. Out of respect to the Court he has used the same word ‘may’ in the proviso as was done in the main section of 1894. The principles are the same but the measuring rods are different. We are now given a new set of set squares and foot rules to measure compensation.
    33. Throughout the Amendment Act, whether it is section 23 or section 28 or section 34, one thing is conspicuous. The legislature is conscious that the expropriated owner has had a rough deal. He was being paid less compensation. He should have more, the legislature felt. A repentant legislature, spurred into activity, is trying to be just. It is giving with both hands. To those who had less more shall be given. This is the pith and substance of the Amendment Act. As is stated in the Objects and Reasons when the individual's land is taken he is very often deprived of his means of livelihood. He can well says: “You take my life when you do take the means whereby I live” Shakespeare — Merchant of Venice IV. (i). Compulsory acquisition inflicts pain and suffering, as the Objects say. The Amendment Act is the product of the felt necessity “to restructure the legislative framework for acquisition of land”. It has righted the wrong of “unrealistic scale of compensation” by making three substantial changes. One 30 per cent solatium in place of 15 per cent. Second by awarding an additional amount of 12 per cent p.a on the market value. Third by increasing the rate of interest from 6 per cent to 9 per cent and 15 per cent p.a
    34. The Government counsel opposed the demands of the land owners under the Amendment Act. We cannot appreciate the Government stand. The executive cannot deny to the expropriated owners what the legislature has given in the Amendment Act, even though it may mean a heavy burden en the Consolidated Fund of India. Those who are guardians of the public purse have decided to give more. Why grudge them just compensation when the legislature has done away with “unrealistic and iniquitous” compensation. The Objects state that the individual who is deprived of his property rights in land need to be adequately compensated for the loss keeping in view the sacrifice he makes for the larger interests of community. As the Supreme Court has said that community has no right to enrich itself by deliberately taking away the property of any of its members without providing adequate compensation for it. (Ram Mehar (supra) at p. 309).
    35. At the end we make it clear that the land owners will also be entitled to 30 per cent on account of solatium on the market value as determined by the Collector and the additional district judge on reference. This means that there shall be a further payment of 15 per cent per annum on account of solatium because 15 per cent has already been paid to them under the orders of the Collector and the Additional District Judge.
    36. Counsel claims that the land owners are also entitled to interest under the amended section 28 on the sum enhanced by the Additional District Judge. This prayer too is opposed by the counsel for the Union of India. So we must turn to section 28 once again to see whether the claim is correct or not. We have quoted this section above. The important words of the section are: “If the sum which, in the opinion of the Court, the Collector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation”, the court may direct the Collector to pay interest at the rate of 9 per cent for the period of one year from the date of taking possession and thereafter at the rate of 15 per cent till payment.
    37. In plain language it means this. Anything over and above the Collector's award is “excess compensation”. The theory underlying section 28 is evident from the opening words we have quoted. Interest has to be awarded on “excess compensation”. How do we find the excess ? The formula is this. See what is given by the Collector. Then see what is given by the Courts on reference and appeal. The difference of these two figures is the “excess compensation”. The critical words of the section are ‘ought’ and ‘did’. In short the excess is the difference of ‘ought’ and ‘did’. What the Collector “ought to have awarded as compensation” and what he “did award as compensation” are the two figures with which section 28 is concerned. Find out what is the difference between ‘ought’ and ‘did’. You get the excess. The ethical ‘ought’ legally expresses the amount of compensation to which the land owner is finally found to be entitled on reference or appeal. This determination takes years, it is true. The judicial process is tardy and time consuming. The is why there is always a gap between what the Collector did award and what he ought to have awarded.
    38. Market value can be only one. It is determined by the Collector in the first instance and redetermined by the Courts on reference and appeals. The old section 25 has been abrogated. The amended section 25 says: “The amount of compensation awarded by the Court shall not be less than amount awarded by the Collector under section 11”. This will rarely happen. So virtually there is now no limitation on the Court's power to award adequate compensation. The restrictions of old section 25 have been abolished. Case law on old section 25 is now obsolete and can be safely consigned to the legal waste paper basket.
    39. If the Collector, for example, gives Rs. 5/- per sq. yard and by way of enhancement, whether it is by the district judge's court or by this court or by the Supreme Court, the land owner is awarded Rs. 15/- per sq. yard then obviously the excess is Rs. 10/- per sq. yard. The section is quite clear. It says: Give to the land owner interest on the excess compensation. This excess of Rs. 10/- will carry interest in terms of the amended section 28.
    40. Now prior to the Amendment Act the Court of the Additional District Judge had awarded to the land owners interest at the rate of 6 per cent per annum as was the law in force at that time. Now the land owners will be entitled to 9 per cent per annum and 15 per cent per annum in terms of the amendment on the excess compensation awarded by the Additional District Judge. So we hold the interest which he has already awarded, namely 6 per cent per annum will be deducted and the balance shall be paid.
    41. The land owners also claim interest under section 4 (3) of the Land Acquisition (Amendment and Validation) Act, 1967. We find that there is a difference of more than 3 years between section 4 notification (13-11-1959) and section 6 declaration (22-11-1962) of the Act. The land owners shall therefore be entitled to interest at the rate of 6 per cent per annum on the market value provided there is no overlapping between section 28 of the Act and section 4 (3) of the Amendment Act, 1967. We are of opinion that the land owners shall be entitled to interest under the Amendment Act of 1967 also because the Amendment Act of 1967 has not been repealed by the Amendment Act of 1984.
    42. The appellants will be entitled to proportionate costs.
    Conclusion
    43. In conclusion we make the following order: —
    1. The appellants will be entitled to the market value of the land at the rate of Rs. 15,000/- per bigha for their land in blocks A, B and C and at the rate of Rs. 8000/- per bigha for the land in Khasra No. 613/572/206. In Appeal No. 113/68 the total amount of the market value will in no case exceed Rs. 3,65,217.39 p. In Appeal No. 134/68 the total amount of the market value will not exceed Rs. 33,000/-
    2. Besides this market value the appellants will be entitled to an additional amount calculated at the rate of 12 per cent per annum from the date of notification under sec. 4, that is, 13-11-1959, the date of the award, that is, 30-3-1963 on the entire market value, that is, the market value as assessed by the Collector and increased by the Additional District Judge and further increased now by this court.
    3. The appellants will also be entitled to solatium at the rate of 30 per cent on the market value as determined under clause (1) above.
    4. The appellants will also be entitled to interest at the rate of 9 per cent per annum from the date of dispossession till the expiry of one year from that date and thereafter till the date of payment at 15 per cent per annum on the amount enhanced by the Additional District Judge and this court.
    5. The appellants will also be entitled to interest under section 4 (3) of the Land Acquisition (Amendment and Validation) Act, 1967 at the rate) of 6 per cent per annum on the market value provided there is no overlapping between section 28 of the Act and section 4 (3) of the Amendment Act, 1967.
    6. Whatever has already been paid on account of market value, interest and solatium shall be deducted.
    7. The appellants will be entitled to proportionate costs.
    Appeal allowed.
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    Raghbir Singh (Deceased) Through Legal Representatives & Ors. v. Union Of India, Etc. S
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