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  • provision of S. 4(3) of the Land Acquisition (Amendment and Validation) Act (1967).
  • S. 4 of the land Acquisition Act
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  • provision of S. 4(3) of the Land Acquisition (Amendment and Validation) Act (1967).
  • S. 4 of the land Acquisition Act
Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

By a notification under S. 4 of the Land Acquisition Act published on 1 May 1973, the State sought to acquire about 70 acres for construction of the Hissar bye-pass on National Highway No. 10. The Collector rendered an award on 24 December 1973, classifying the land into two blocks: 'A' (compensation Rs. 6,480 per acre) and 'B' (Rs. 5,000 per acre). Landowners preferred references which were consolidated and tried by the Additional District Judge, Hissar. The Additional District Judge enhanced compensation to Rs. 9,000 per acre for block 'A' and Rs. 6,000 per acre for block 'B', awarded statutory solatium at 15%, and directed interest at 6% on compensation inclusive of solatium. The State of Haryana preferred eleven regular first appeals (with cross-objections in nine), which were consolidated and heard together because they raised identical issues of law and fact. The court finally addressed the State's appeals and the landowners' cross-objections in a single judgment.

Legal Issues Presented

  1. Whether the Collector's categorisation of the acquired land into two blocks ('A' and 'B') based on proximity to village Sat Rod was justified and sustainable.
  2. What was the correct market value (and thus compensation) of the acquired land per acre as of the date of notification (1 May 1973) — in particular, whether the evidence adduced by the claimants (sale deeds Exhibits P.1 to P.11, notably P.4, P.7 and P.8) established a higher market value.
  3. Whether interest under Section 28 of the Land Acquisition Act is payable on the statutory solatium (15%) in addition to the market value of the land, or whether interest is payable only on market value (as argued by the State relying on Union of India v. Ram Mehar).
  4. Whether a prior judgment of the District Judge, Hissar (Exhibit P.W.1/14) should be followed in assessing market value for the instant acquisition.

Arguments of the Parties

Appellant-State's Arguments (Mr. U. D. Gaur, Advocate General)

  • The classification of the land into two blocks by the Collector (and maintained by the Additional District Judge) was not supported by adequate reasons; the division was arbitrary and should be struck down so that a uniform rate (as in block 'B') be applied.
  • The judgment of the District Judge, Hissar (Exhibit P.W.1/14), which fixed market value at Rs. 5,000 per acre in a similar acquisition a few days earlier, should be followed.
  • Interest under Section 28 should be allowed only on the market value of the land and not on the solatium; reliance was placed on Union of India v. Ram Mehar, AIR 1973 SC 305 to support this contention.

Respondent-Landowners' Arguments

  • The landowners produced a series of sale transactions (Exhibits P.1 to P.11) in the vicinity; in particular Exhibits P.4, P.7 and P.8 were relied upon as proximate in time (30 March 1973) and location to establish a market value of approximately Rs. 12,000 per acre.
  • The claimants contended for enhancement of compensation based on these sale deeds and relied on the bona fides and proximity in time/location of those transactions.
  • Implicitly, the landowners argued that interest should be payable on the total compensation (which includes statutory solatium), consistent with the text of Sections 23 and 28 and relevant case law cited by the court.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Union of India v. Ram Mehar, AIR 1973 SC 305 Construction of the expression "market value" in Section 4(3) of the Land Acquisition (Amendment and Validation) Act (1967); the observation that "market value" did not include solatium and therefore interest under that provision was confined to market value. The court held that Ram Mehar was not directly applicable to defeat the State's contention: Ram Mehar dealt with construction of "market value" in the context of the Amending and Validation Act and did not displace the plain language of Section 28. Moreover, the opinion noted Ram Mehar itself emphasised that solatium is an integral part of "compensation", thus supporting the view that interest under Section 28 is payable on compensation inclusive of solatium.
Gian Dev v. State of Haryana, E.F.A. No. 202 of 1974 (decided 7 Aug 1975) Earlier single-Bench view of this Court on the matter of interest on compensation/solatium (as applied by the present court). The court aligned with and affirmed the view taken in Gian Dev, using it to support the conclusion that interest under Section 28 can be awarded on the compensation inclusive of statutory solatium.

Court's Reasoning and Analysis

The court proceeded by analysing the factual record and the legal contentions raised:

  1. Classification of land into two blocks:
    • The Collector gave only a passing observation that part of the land was "nearer to village Sat Rod" and drew a line creating 'A' and 'B' blocks. The court found this to be an inadequate and arbitrary basis, particularly because the land acquired formed a long strip for a highway (not a compact block), and proximity to the village could not be the sole criterion for divergent valuation over that stretch.
    • The Additional District Judge did not address this point in his reasoning (apparently because the parties did not raise it), but on reviewing site plans and the layout the court concluded the classification could not be sustained and land must be evaluated uniformly. The court reserved determination of the precise uniform market value to subsequent analysis of sale evidence.
  2. Relevance of the District Judge's earlier judgment (Exhibit P.W.1/14):
    • The Additional District Judge had considered Exhibit P.W.1/14 but rejected following it because, in that earlier case, the claimant had not produced satisfactory evidence of market price over Rs. 5,000 per acre, whereas in the present case the claimants produced multiple sale deeds from 1973 and other years. The present court agreed with the Additional District Judge's reasoning and rejected the State's contention that Exhibit P.W.1/14 should be followed.
  3. Whether interest is payable on solatium:
    • The State relied on Ram Mehar to argue interest could be awarded only on market value and not on solatium. The court carefully examined Ram Mehar and observed that it construed "market value" under Section 4(3) of the Amending and Validation Act (1967) and held that "market value" did not include solatium in that context.
    • However, the court noted that Ram Mehar itself emphasised that solatium (the additional 15%) is an integral part of "compensation" under Section 23(1)/(2). Given that Section 28 speaks in terms of "compensation" or "sum equivalent thereto" and not merely "market value", the court concluded that interest under Section 28 is payable on the whole compensation, which includes statutory solatium.
    • The court found its view consistent with the earlier single-Bench judgment in Gian Dev v. State of Haryana and thus held interest may be awarded on compensation inclusive of solatium at the prescribed rate.
  4. Determination of market value:
    • The court reviewed the documentary sales evidence. It noted that several sale deeds relied upon by the landowners were proximate in time to the notification date (Exhibits P.4, P.7 and P.8 dated 30 March 1973) and were not seriously disputed as bona fide or relevant in location.
    • The Additional District Judge had himself recorded that the market value, on record evidence, was between Rs. 11,851.85 and Rs. 12,000 per acre, and that adjacent land showed values of Rs. 12,307 per acre (on 21 Jan 1972) and higher thereafter. Yet the Additional District Judge then fixed Rs. 9,000 and Rs. 6,000 for the two blocks without giving reasons for the downward adjustment. The court could not sustain that unexplained slashing of values.
    • Given: (a) the proximity in time (about a month prior to the notification) of the three admissible sale deeds P.4, P.7 and P.8, (b) their location relative to the acquired land, and (c) the Additional District Judge's own factual finding that the indicated range was around Rs. 11,851.85–12,000, the court concluded the fair market value to be the round figure of Rs. 12,000 per acre and that the land should be compensated uniformly at that rate.
  5. Final disposition of appeals and cross-objections:
    • The court found no merit in any other arguments advanced on behalf of the State and dismissed all eleven regular first appeals without any order as to costs.
    • All cross-objections preferred by landowners were allowed in respect of compensation; the court enhanced compensation to Rs. 12,000 per acre uniformly, awarded statutory solatium of 15%, interest at 6% on the enhanced amount inclusive of solatium from the date of taking possession, and directed that landowner-claimants would be entitled to their costs.

Holding and Implications

Core Ruling: The State's eleven regular first appeals are dismissed; the landowners' cross-objections are allowed.

Direct consequences for the parties (as ordered by the court):

  • Compensation to the landowner-claimants is fixed at a uniform rate of Rs. 12,000 per acre for the acquired land.
  • Landowners are entitled to statutory solatium at the rate of 15% on that compensation.
  • Interest at the rate of 6% is to be paid on the enhanced amount (compensation inclusive of the solatium) from the date of taking possession.
  • Landowner-claimants are awarded their costs.
  • The State's appeals were dismissed without any order as to costs.

Broader legal implication stated or relied upon in the opinion:

The opinion explains and applies the principle that "solatium" provided under Section 23(2) forms an integral part of "compensation" and, because Section 28 authorises interest on "compensation" (or the sum equivalent thereto), interest can be awarded on the compensation inclusive of solatium. The court relied on earlier authority (Ram Mehar and Gian Dev) in interpreting these statutory terms, and invoked the plain language of Sections 23 and 28 to reach its conclusion.

The opinion does not elaborate on any new, broader precedent beyond applying and aligning with the reasoning in the earlier cited decisions; the immediate effect is the enhanced monetary award and ancillary payments to the claimants in these consolidated matters.

Order accordingly.

    State Of Haryana v. Kailashwati And Ors

    1. This set of eleven regular first appeals--all preferred by the State of Haryana (with cross-objections in nine) admittedly give rise to identical issues of law and fact and are, therefore, being disposed of by thus single judgment.

    2. By a notification under S. 4 of the land Acquisition Act published in the Government Gazette on the 1st of May, 1973, an area of 70 acres in all was sought to be acquired for the public purpose of the construction of the Hissar bye-pass on National Highway No. 10 connecting Delhi, Hissar, Sirsa and Fazilka. In this acquisition proceedings, that followed, the Collector rendered his award on the 24th of Dec. 1973, wherein he classified the land into two blocks on the basis of its proximity or otherwise from the village of Sat Rod and awarded compensation at the rate of' Rs 6480)per acre for the land falling in 'A' block and at the rate of Rs. 5000/ per acre for the remaining land in 'B' block. Feeling dissatisfied with the compensation awarded the landowners preferred a number of references which were all consolidated for trial by the learned Additional District Judge, Hissar. The solitary issue framed therein on merits was with regard to the compensation to be awarded to the landholders and it is the common case that in this set of appeals also this very question is the only one which fails for determination.

    3. On behalf of the landowner-claimants as many as 11 instances of sale transactions in the vicinity Exhibits P. 1 to P. 11 were brought on record. In rebuttal the respondent-State relied on copies of registered sale deeds and mutations R. W. 1/2 to R. W. 1/13 being instances of transfers of land in the adjoining areas. Apart from these oral testimony of witnesses was also adduced. The learned Additional District Judge on a consideration of the whole record enhanced the compensation in block 'A' to Rs. 9000/- and that of block 'B' to Rupees 6000/- per acre Apart from awarding the statutory solatium at the rate of 15 per cent he also directed that interest at the rate of 6 per cent be paid to the landowners on the compensation inclusive of this solatium.

    4. Mr. U. D. Gaur, learned Advocate General for the State of Haryana had been rather lukewarm in pressing the State Appeals. The first challenge raised was with regard to the categorisation of land into two blocks. Counsel contended with plausibility and cogency that no adequate reason had been given for the creation of two belts either the Collector or by the learned Additional District Judge. It was, therefore, submitted that this classification be struck down and the land be assessed at the uniform rate as given in block 'B'.

    5. There is some merit in the aforesaid argument though no benefit therefrom accrues to the appellant-State. The only fragmentary reason given by the Collector for creating two blocks is the passing observation that part of the land was nearer to village Sat Rod and the rest was away therefrom. On that basis he seems to have drawn an arbitrary line and awarded compensation at relatively disparate rates for the two categories. What particularly calls for attention herein is that the land was not being. acquired in a compact squarish or rectangular block but in the shape of a long strip for the purpose of a Highway stretched out to skirt the town of Hissar over a long distance, In such a situation the relatively narrow strip of land which fell for acquisition over a long distance cannot possibly be evaluated on the basis of its mere proximity to village Sat Rod. The Collector gave no adequate reason and what is significant is that the learned Additional District Judge did not even remotely advert to this aspect apparently because neither of the parties seemed to have raised the issue. Having seen the site plans and the lay-out of the bye-pass and the relatively distant location therefrom of the village abadi it appears to us that the classification on this arbitrary basis cannot possibly be sustained. It is, therefore, held that the land must be evaluated at a uniform basis but what that is will have to be determined hereinafter in the discussion for its market value.

    6. The other argument of Mr. Gaur was that the learned Additional District Judge had wrongly ignored Exhibit P.W. 1/14 which was rendered by the District Judge, Hissar, with regard to a similar acquisition only a few days earlier of another area. In adverting to this aspect of the case the learned Additional District Judge has observed as follows in para-20 of his judgment:--

    "The learned Government Pleader has, also drawn my attention towards the judgment dated 20-2-1978 passed by the leamed District Judge, Hissar, according to which the market value of the acquired land was held to be Rs. 5,000/per acre. I regret my inability to agree with the learned Government Pleader that the said judgment Exhibit P.W. 1/14 may be followed. In para No. 8 of the said judgment the learned District Judge has clearly observed that the claimant had not brought on record satisfactory evidence in support of his assertion that the market price of acquired land was more than Rs. 5,000/- per acre. Whereas, in the case in hand the claimants have brought on record as many as 8 sale deeds of the pear 1973, pertaining to the months of March, July and December. Besides this they have also brought a sale deed dated 21-1-1972. and two sale deeds pertaining to October and November 1975. Therefore, the evidence in this case cannot be treated at par to that which led in the case before the learned District Judge in which judgment Exhibit P.W..1/14 was passed"

    It is unnecessary to traverse the same line of reasoning over again and it suffices to say that we agree entirely with the learned Additional District Judge and for the aforesaid reasons reject the contention on behalf of the appellant-State.

    7. Lastly Mr. Gaur had argued that the learned Additional District Judge had erred in granting interest on the amount of solatium as well in terms. He relied on Union of India v. Ram Mehar AIR 1973 SC 305 to contend that interest could be allowed only on the market value of the land and not on solatium as well.

    8. Now a close perusal of Ram Mehar's case (supra) would make it manifest that the argument of the learned Advocate-General, Haryana is not well conceived. In the said judgment what fell for construction before their Lordships was the provision of S. 4(3) of the Land Acquisition (Amendment and Validation) Act (1967). Grover, J., speaking for the Bench made it clear at the very outset that the sole point for determination was with regard to the true meaning and construction of the expression 'market value' employed in the aforesaid provision. Therefore, it is manifest that what was construed in the said judgment was the term 'market value' as used in the Amending and Validation Act. It was in that particular context that their Lordships observed that market value did not include within it the amount of solatium and therefore the rate of interest prescribed by Section 4(3) was confined to the market value of land alone. Ram Meher's case therefore, is of no aid whatsoever to the appellant-State.

    9. Indeed an in depth examination of the observations in Ram Mehar's case boomerang and go directly in aid to the stand taken by the respondents-landowners. Their Lordships made it clear in no uncertain terms that solatium was an integral part of the compensation awarded to a landowner. It was observed as follows:--

    "..............The additional amount of 15% certainly forms part of the amount of compensation because under Section 23 the compensation is to consist of what is provided for in sub-section (1) and the additional amount of 15% on the market value of the land acquired. But compensation and market value are distinct expressions and have been used as such in the Acquisition Act.......:"

    And again:--

    "....If market value and compensation were intended by the legislature to have the same meaning it is difficult to comprehend why the word "compensation" in Sections 28 and 34 and not "market value" was used. The key to s the meaning of the word "compensation" is to be found in Section 23(1) and that consists (a) of the market va1ue of the land and (b) the sum of 15% on such I market value which is stated to be the consideration for the compulsory nature of the acquisition. Market value is there-fore only one of the components in the determination of the amount of compensation........."

    10. Once it is held as it inevitably must be that the solatium provided for under Section 23(2) of the Act forms an integral and statutory part of the compensation awarded to a landowner, then from the plain terms of Section 28 of the Act, it would be evident that the interest is payable on the compensation awarded and not merely on the market value of the land. Indeed the language of S. 28 does not even remotely refer to market value alone and in terms talks of compensation or the sum equivalent thereto. The interest awardable under Section 28 therefore would include within its ambit both the market value and the statutory solatium. It would be thus evident that the provisions of section 28 in terms warrant and authorise the grant of interest of solatium as well.

    11. The view we are inclined to take is in accord with the earlier single Bench judgment of this Court in Gian Dev v. State of Haryana, E F. A No. 202 of l974 decided on August 7, l975. In this view of the matter it is unnecessary to elaborate further. It suffices to say that we also affirm the of the learned single Judge therein.

    12. No other argument bas been raised on behalf of the Appellant-State end finding no merit therein, we dismiss all the eleven Regu1ar First Appeal without any order as to costs.

    13. Adverting now to the cross-objections Preferred by the landowners it appears that Mr. Ram Rang the learned counsel for the claimants is on firm ground in contending that his clients are patently entitled to the enhancement of the compensation granted. Our attention is pointedly drawn to Exhibits P 1 to P. 11 which were proved on the record to show the relatively higher prevailing market value at the material time of the notification. It also calls for notice that the learned Additional District Judge did advert to and appears to have relied on these instances without in any way doubting their authenticity. Even if some of the sale instances which pertained to a period of time long after the notification and which have rightly to be excluded there consideration there yet remain Exhibits P. 4, P. 7 and P. 8 about whose relevancy and validity there appears to be no manner of doubt. These may best be tabulated as under:--

    6 Details of the documents Date of sale Khasra Number of Rect. No. and its area sold Sale price Per area Sale price in rupees.

    . Ex. P. 4 Sale deed Regd. No. 3318 Mutation No. 905 vendor Madan Lal son of Karam Chand 30-3-73 Regd. on 30-3-73. 121/14(8-0)=8 Kanals tibba. . tibba 16 (8.0) Rs. 12,000/- Rs. 12000/-

    7 Ex. P. 7 Sale deed Regd. No 3819 Mutation No. 4761 vendor Ram Chand son of Lal Chand. 30-3-73 Regd. on 30-3-73 121/14(8-0)=8 Kanals tibba Rs. 12000/- Rs. 12000/-

    8. Ex P. 8 Sale deed Regd. No 3820 Mutation No. 4760 vendor Lal Chand. -do- 121/24 & 25(16-0) and 132/9/1 (2-18) Rs. 28000/- Rs.11,851.85 It deserves highlighting that the learned Additional District Judge had excluded from consideration the sale instances proved on the record by the respondent-State for valid considerations which have not been at all challenged by the learned Advocate General, Haryana, and he did not indeed press for their acceptance. That being so, one is inevitably left to assess the market value on the acceptable sale instances P. 4, P. 7 and P. 8 noticed above. All these three instances of sale on the 30th of March, 1973, are barely a month or more prior to the material date of acquisition on the 1st day of May, 1973. Their proximity in time is thus self-evident. They pertained to sizable area of land and the bona fides of the transactions are not even remotely in dispute. A reference to the site plan would show that they are not at all far removed by way of location and indeed' from that angle also provide a fair standard of comparable land. Inevitably one has to conclude that the fair market value indicated therefrom comes to the round figure of Rs. 12,000/- per acre. As has been noticed earlier there is no justification for the two blocks created by the Collector and maintained by the Additional District Judge. Land has, therefore, to be compensated at a uniform rate and the aforesaid market value appears to be the true assessment thereof.

    14. It deserves recalling that the learned Additional District Judge after adverting to the sale instances of the landowner claimants had held as follows:--

    "23. From the close scrutiny of the above evidence brought by the parties on record, it is clear that whereas the respondent-State has not brought any satisfactory evidence in support of their assertion that the market price of e acquired land was not more than Rupees 5,000/- per acre, the petitioners, have proved by reasonable and convincing documentary evidence that the market value of the acquired land and those lying in its locality and vicinity was, on or near about the date of publication of the notification under Section 4 of the Act, was between Rs. 11,851.85 end Rupees 12,000/- per acre. They have also proved that the market value of the land situated adjacently to the acquired land was Rs. 12,307/- per acre even on 21-1t972, that is about l 1/4 years prior to the acquisition and that it had shot up to Rs. 15,360.66 per acre on 5-11-1975, i.e.; after about 2 1/4. years of the acquisition.

    24. After taking all the above documentary and oral evidence into consideration, I am of the view that the compensation for 'A' grade land at the rate of Rs. 9.000/- Per acre and for 'B' grade land at the rate of Rs. 8,000/- per acre shall be the market value. Issue No. 1, is, therefore, decided accordingly."

    "It is evident from the above that the learned Additional District Judge had himself come to the finding that the average price indicated was above Rupees 12,000//- even prior to the date of acquisition and further that it had risen sharply by nearly Rs. 4,000/- within two years thereof. Nevertheless without giving the least reason in the following paragraph he slashed this evaluation to a sum of Rs. 9,000/- and further maintaining the 'B' block to a rate of Rupees 6,000/- only. We are unable to sustain this finding and indeed the learned Advocate General; Haryana, could also advance no cogent argument to explain the patent disparity.

    15. For the aforesaid reasons all the cross-objections are hereby allowed. Compensation to the landowner-claimants is awarded at the uniform rate of Rs. 12,000/- per acre. They will also be entitled to solatium at the statutory rate of 15 per cent and interest on the enhanced amount at the rate of 6 per cent from the date of taking possession including the solatium thereof. The landowner-claimants would also be entitled to their costs.

    16. Order accordingly.

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    State Of Haryana v. Kailashwati And Ors
    (Sep 11, 1979)