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Puran v. State Of Haryana

Punjab & Haryana High Court
Sep 23, 1985
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Structured Summary of the Opinion: Regular First Appeals Nos. 488–492 & 977–980 of 1984

Factual and Procedural Background

The judgment disposes of nine Regular First Appeals (Nos. 488–492 and 977–980 of 1984) brought by landowner-claimants concerning the same acquisition proceeded from a notification under Section 4 of the Land Acquisition Act, 1894 dated November 4, 1977. The land (revenue estate of Atmadpur) was acquired for development into Sector 30 of Faridabad Township. The Collector treated the land as agricultural and awarded compensation at rates between Rs. 20,000 and Rs. 30,000 per acre. The claimants sought references under Section 18; the Land Acquisition Court (District Judge, Faridabad) awarded compensation at Rs. 18 per square yard plus statutory solatium and interest (15% and 6% respectively). The claimants appealed to the appellate Court (these Regular First Appeals).

The Land Acquisition Court had relied on earlier awards (Exhibits P.11, P.13, P.15, P.17, P.19, P.21, P.22, P.24 and P.26) relating to acquisition for Sector 29 in the adjoining village Mawai, where market value had been fixed at Rs. 18 per square yard in connection with an acquisition notified on October 1, 1973. The appellants challenged the adequacy of the award and sought higher compensation for reasons including an asserted upward trend in land prices during the roughly four-year interval between the two acquisitions.

Legal Issues Presented

  1. Whether the market value awarded by the Land Acquisition Court (Rs. 18 per sq. yd.) should be increased to reflect the general rise in land prices between the prior awards (Oct. 1, 1973) and the present acquisition (notification dated Nov. 4, 1977), and if so, by what amount.
  2. Whether the appellants are entitled to solatium and interest as provided under the amended Sections 23(2) and 28 of the Land Acquisition Act (i.e., whether those amendments apply to these proceedings).
  3. Whether the additional amount at the rate of 12% per annum on market value introduced by section 23(1-A) (by Act No. 68 of 1984) is payable in these cases despite the Collector having made awards prior to April 30, 1982, given the transitional provision in Section 30(1) of the Amendment Act.
  4. How Section 30(1) of the Land Acquisition (Amendment) Act, 1984 governs the applicability of Section 23(1-A) — whether it limits that provision only to proceedings before the Collector or extends it to reference/appellate proceedings (Land Acquisition Court and appellate courts).

Arguments of the Parties

Appellants' Arguments

  • The Land Acquisition Court erred in not taking judicial notice of the general upward trend in land prices near developing towns and in failing to compensate for the four-year time lag (1973 to 1977) between the prior awards and the present acquisition.
  • As a consequence of the passage of time, they should receive an enhanced market value (the Court refers to the established practice of allowing an increase at the rate of Re. 1 per sq. yd. per year in similar situations).
  • The appellants claimed entitlement to enhanced solatium and interest under the amended Sections 23(2) and 28 of the Act and also claimed entitlement to the additional 12% per annum specified in newly inserted Section 23(1-A) (Act No. 68 of 1984).

Respondents' Arguments

  • The respondents did not dispute the lower Court's use of the earlier awards for Rs. 18 per sq. yd. but contended against allowing the appellants' claims under Section 23(1-A) on the basis of the transitional provisions (Section 30(1) of the Amendment Act). They argued that Section 23(1-A) applies only where no award had been made by the Collector before April 30, 1982 (the date of introduction of the Amendment Bill), and thus it would not apply where the Collector had already made an award (as in these cases).
  • Learned counsel for the respondents had nothing contrary to submit regarding the Court's reliance on prior decisions for permitting a time-based increase in market value.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
R.F.A. No. 586 of 1981 — Raghbir Singh and others v. The State of Haryana and others (judgment dated Nov. 30, 1984) Authority for allowing an increase in market value in acquisitions for Faridabad township in similar circumstances, specifically permitting an increase at the rate of Re. 1 per sq. yd. per year to account for rise in market value over time. The Court relied on this earlier judgment to justify increasing the market value from Rs. 18 to Rs. 22 per sq. yd. (a four-year lapse adjustment of Re. 1 per sq. yd. per year).
Civil Appeal No. 1519–23 of 1985 — Bhag Singh v. Union Territory of Chandigarh (decided Aug. 14, 1984; reported AIR 1985 SC 1576) Held that the amended Section 23(2) and Section 28 are applicable to proceedings relating to compensation pending on April 30, 1982 or filed subsequent to that date; thus solatium and interest under those amended provisions are applicable in such proceedings. The Court treated the Supreme Court pronouncement as binding and held that solatium and interest must be allowed to the appellants under the amended Sections 23(2) and 28.

Court's Reasoning and Analysis

The Court's analysis proceeded in distinct steps closely tied to the statutory framework and earlier authorities:

  1. On the market value question the Court accepted the Land Acquisition Court's reliance on earlier awards for adjoining village Mawai that had fixed market value at Rs. 18 per sq. yd. for acquisitions notified on Oct. 1, 1973. The appellate Court nonetheless found merit in the appellants' contention about general rise in land prices and relied on earlier decisions (notably Raghbir Singh) that, in comparable circumstances, permitted an upward adjustment at Re. 1 per sq. yd. per year. Applying that principle to the four-year interval, the Court increased market value to Rs. 22 per sq. yd.
  2. On entitlement to solatium and interest under amended Sections 23(2) and 28, the Court observed that the Supreme Court in Bhag Singh had held these amended provisions applicable to proceedings pending on April 30, 1982 or filed after that date. In view of that authoritative pronouncement, the appellate Court concluded that the appellants are entitled to solatium and interest under the amended provisions.
  3. On the applicability of Section 23(1-A) (the additional 12% per annum) and the respondents' reliance on Section 30(1) of the Amendment Act, the Court engaged in statutory interpretation:
    • The Court read Section 30(1) as governing the applicability of Section 23(1-A) specifically to proceedings before the Collector (i.e., acquisition proceedings before the Collector), not to reference proceedings before the Land Acquisition Court or to appellate proceedings.
    • The Court explained that acquisition proceedings, in its view, terminate with the passing of the award by the Collector or taking of possession; subsequent reference proceedings under Section 18 are independent proceedings akin to a trial of a suit under the Civil Procedure Code and are limited to four specified points (measurement, amount of compensation, persons entitled, and apportionment).
    • Hence, Section 30(1)'s temporal restriction (relating to awards made before April 30, 1982) applies to proceedings before the Collector only and does not prevent courts in reference or appeal proceedings from awarding the amount envisaged by Section 23(1-A).
  4. On interest rates to be applied, the Court directed payment of interest at 9% per annum for the first year from the date of taking possession and thereafter at 15% until payment of the enhanced compensation, in addition to solatium at 30% and the 12% per annum amount under Section 23(1-A).
  5. The Court found no substantive contrary submission from the respondents' counsel on the market-value increase or on application of the amended Sections 23(2) and 28; the respondents' primary contested point related to the reach of Section 30(1) vis-à-vis Section 23(1-A), which the Court rejected for the reasons above.

Holding and Implications

CORE RULING: The nine Regular First Appeals are disposed of by modifying the compensation awarded. The appellate Court directed that:

  • Market value is fixed at Rs. 22 per square yard (increased from Rs. 18 per sq. yd. on account of the four-year lapse and the recognized upward trend in land prices).
  • The appellants are entitled to the additional amount under Section 23(1-A) of the Land Acquisition Act (i.e., 12% per annum on the market value for the relevant period as specified in that sub-section).
  • Solatium at 30% of the market value is to be paid (in light of the amended Section 23(2)).
  • Interest is to be allowed at 9% per annum for the first year from the date of taking possession and at 15% per annum thereafter until payment of the enhanced amount of compensation (in line with amended Section 28 as applied by the Court).
  • The appellants are entitled to proportionate costs of their appeals.

Implications drawn within the judgment (as applied by the Court):

  • The Court interpreted Section 30(1) of the Land Acquisition (Amendment) Act, 1984 as regulating the applicability of Section 23(1-A) to proceedings before the Collector (i.e., acquisition proceedings) and not to subsequent reference or appellate proceedings; therefore courts hearing references or appeals must apply Section 23(1-A) where appropriate.
  • The decision applies established principles (including judicial recognition of rising land prices near developing towns and the Supreme Court's pronouncement in Bhag Singh) to the facts of these appeals; the opinion does not state that it is creating a novel precedent beyond those interpretive conclusions.

Order: The Court concluded with the direction "Order accordingly." The modifications and payments described above constitute the Court's final disposition of the nine appeals.

Show all summary ...

1. This judgment disposes of nine Regular First Appeals Nos. 488 to 492 and 977 to 980 of 1984 preferred by the landowners claimants as these pertain to the same acquisition proceedings initiated by the State Government with the publication of a notification under S. 4 of the Land Acquisition Act, 1894 (for short, the Act) on Nov. 4, 1977. The land of the claimants is located in the revenue estate of Atmadpur and has been acquired to develop it into a residential area, i.e., Sector 30 of Faridabad Township. The Land Acquisition Collector treating it to be a purely agricultural land for determining its market value, awarded compensation at the rates varying from Rs. 20000/- to Rs. 30000/- per acre. As the claimants did not feel satisfied with the adequacy of this compensation, they sought respective reference under S. 18 of the Act and as a result thereof the Land Acquisition Court (District Judge, Faridabad) has allowed compensation at the rate of Rs. 18/- per square yard besides the statutory solatium and interest at 15% and 6% respectively. The claimants are still not satisfied with the award of the lower Court and have preferred these appeals.

2. For recording its above noted conclusion the lower Court has primarily relied upon various awards, such as, Exhibits P. 11, P. 13, P. 15, P. 17, P. 19, P.21 P. 22, P. 24 and P. 26, pronounced by it earlier for the acquisition of land in the adjoining village Mawai, for the same purpose, i.e. development of Section (Sector) 29 of the Township. The revenue estate of Atmadpur admittedly adjoins the lands of village Mawai. Vide all these awards which pertain to the acquisition effected in pursuance of a notification published under S. 4 of the Act on Oct. 1, 1973, the market value of that land was determined at Rs. 18/- per square yard. Following those awards the Court has awarded similar compensation in these cases. The learned counsel for the appellants is not in a position to find any fault with this approach of the lower Court. He, however, contends that the Court committed an error in not noticing the general upward trend in the prices of lands nearabout or around the developing towns and has wrongly disallowed the claim of the appellants for a higher rate of compensation on account of the time lag of about four years between the two acquisitions dated Oct. 1, 1973 and the present notification dated Nov. 4, 1977. This claim of the appellants has been turned down by the lower Court with the observation that the petitioners before him had "failed to show whether there was any rise in price after 1973 and if so to what extent". I find merit in the above noted submission of the learned counsel. By now it is well recognised that rise in prices of lands nearabout the developing towns is almost a continuous and unending phenomenon and the Court while determining the market value of the acquired lands have been taking judicial notice of it. There are number of judgments of the Court while determining the market value of the acquired lands have been taking judicial notice of it. There are number of judgments of this Court pertaining to the acquisition of land for Faridabad town itself wherein in similar situation rise in the market value of the acquired land at the rate of Re. 1/- per square yard per year has been allowed. A reference in this regard can be made to an earlier judgment of mine in R.F.A. No. 586 of 1981 (Raghbir Singh and others v. The State of Haryana and others) decided on November 30, 1984, vide which judgment the market value of the land acquired for the development of Section (Sector) 8 of this very complex was determined. In the light of that I am satisfied that the market value of the appellants' land had to be determined at Rs. 22/- per square yard, i.e., on account of the lapse of four years between the two acquisitions, i.e., the one to which the above noted awards relate and the present acquisition effected in pursuance of a notification under S. 4 of the Act published on Nov. 4, 1977. The learned counsel for the respondent authorities has nothing contrary to submit.

3. The next contention of the learned counsel for the appellants which of course has been seriously debated by the two sides is that the claimants besides being entitled to solatium and interest at the rate of 30% and 15% respectively in the light of the amended provisions of Ss. 23(2) and 28 of the Act, are also entitled to an additional amount at the rate of 12% per annum on the above noted market value in view of the newly added provisions of sub-section (1-A) to S. 23 of the Act, vide Act. No. 68 of 1984. This latter-mentioned sub-section reads as follows:--

"(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 S. 4, sub-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.

Explanation:--In computing the period referred to in this sub-section, any period or periods during which the proceedings for the acquisition of the land were held up on account of any stay or injunction by the order of any Court shall be excluded."

So far as the claim of the appellants for the enhancement of solatium and interest in the light of the provisions of Ss. 23(2) and 28 of the Act is concerned, the matter has squarely been settled by their Lordships of the Supreme Court in Civil Appeal No. 1519-23 of 1985 (Bhag Singh v. Union Territory of Chandigarh) decided on August 14, 1984 (reported in AIR 1985 SC 1576), wherein it has been held that:--

"It is therefore clear that under S. 30, sub-section (2), the provisions of the amended S. 23, sub-section (2) and S. 28 are made applicable to all proceedings relating to compensation pending on 30th April 1982 or filed subsequent to that date, whether before the Collector or before the Court or the High Court or the Supreme Court, even if they have finally terminated before the enactment of the Amendment Act."

In the face of this authoritative pronouncement neither the learned counsel for the respondents has anything to submit nor is there escape from the conclusion that the solatium and interest have to be allowed to the appellants in the light of the amended provisions of Ss. 23(2) and 28 of the Act.

4. With regard to the other claim in the light of sub-section (1-A) of S. 23, learned counsel for the respondents vehemently contends that in view of sub-section (1) of S. 30 of the Land Acquisition (Amendment) Act, 1984, i.e., Act No. 68 of 1984, the additional amount at the rate of 12% of the market value of the acquired land can only be allowed in cases where no award has been made by the Land Acquisition Collector prior to the 30th day of April, 1982, i.e., the date when the Amendment Bill was introduced in the House of the People. In order to appreciate the stand of the learned counsel, a detailed reference to S. 30(1) of this Act is necessary and the same is reproduced as under:--

"30. Transitional provisions:--

(1). The provisions of sub-section (1-A) of S. 23 of the principal Act, as inserted by Clause (a) of S. 15 of this Act,. shall apply, and shall be deemed to have applied, also to, and in relation to:--

(a) every proceedings 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 date of commencement of this Act."

The learned Counsel contends that this sub-section governs the applicability of sub-section (1A) of S. 23 of the Act and since in the instant cases not only the notification under S. 4 of the Act was published prior to April 30, 1982 but even the award had been made by the Collector earlier to that, the provisions of S. 23(1-A) cannot be availed of by the appellants. To me this argument appears to be an argument of confusion. To my mind sub-section (1) of S. 30 only governs the applicability of S. 23(1-A) to the proceedings before the Collector and not before the Land Acquisition Court or the appellate Court. The words "every proceeding for the acquisition of any land under the principal Act" occurring in clauses (a) and (b) of sub-section (1) of S. 30 have only reference to the proceedings before the Collector and not to the proceedings in a reference or in appeal against the judgment of the Land Acquisition Court. To my mind, acquisition proceedings terminate or come to an end with the passing of the award or the taking of the possession of the acquired land by the Collector under the Act. In terms of S. 16 of the Act, the moment the Collector takes possession of the acquired land after making an award under S. 11 of the Act, the same comes to vest absolutely in the Government and the acquisition proceedings come to an end. The land stands acquired. The subsequent proceedings as a result of the reference under S. 18 of the Act are independent proceedings and are in the nature of trial of a suit under the Civil P.C. The scope of these proceedings--may be before the Land Acquisition Court or the Appellate Court--is limited only to the four points indicated in the section, i.e., (i) to the measurement of land; (ii) the amount of compensation; (iii) the persons to whom it is payable and (iv) the apportionment of the compensation among the persons interested, and cannot be extended to other issues, such as, validity of the notification issued for the acquisition or want of jurisdiction in making the award. Therefore, what sub-section (1) of S. 30 of Act. No. 68 of 1984 ordains is that in those acquisition proceedings before the Collector which were either pending on the 30th day of April, 1982 and in which proceedings no award had been made by the Collector before that date or such proceedings which have been commenced after that date whether or not an award had been made by the Collector, prior to the commencement of the Act w.e.f. 24-9-1984, the additional amount in terms of sub-section (1-A) of S. 23 of the Act is to be awarded by the Collector. So far as the proceedings in Court--may be as a result of the reference under S. 18 of the Act or at the appellate stage--are concerned, the mandate of sub-section (1-A) is that the Court shall in every case award an amount calculated at the rate of twelve per centum per annum of such market value (i.e., the market value fixed under sub-section (1) of S. 23) for the period commencing on and from the date of the publication of the notification under S. 4, sub-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". I thus see no merit in the contention of the learned counsel for the respondents that the additional amount as envisaged by S. 23(1-A) is not to be awarded to the appellants as the award in the instant cases had been pronounced on Aug. 28, 1981.

5. The net result of the above discussion is that besides the payment of market value of the acquired land at the rate of Rs. 22/- per square yard, the appellants would also be paid the additional amount under S. 23(1-A) of the Act as indicated above along with solatium at 30% of the market value and interest at the rate of 9% per annum for the first year from the date of taking possession of the acquired land from them and at the rate of 15% for the subsequent period till the date of payment of the enhanced amount of compensation. they would also have the proportionate costs of their appeals.

6. Order accordingly.