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Prabhu Dayal And Others v. Union Of India .
Factual and Procedural Background
The appellants own a 3/4th share in various parcels of land (Khasra Nos. 1012/341, 1011/594, 1334/1009/594 – totalling 62.01 bighas) situated in Sadhora Khurd, Delhi. The land was first requisitioned for defence purposes under the Defence of India Rules and formally acquired on 15-05-1945. On 30-10-1961 the Collector offered compensation ranging from 0.38 to 0.92 paise per square yard with 6 % interest (15-05-1945 to 14-01-1962). The offer was rejected, triggering the appointment of an arbitrator under Section 23(2) of the Requisitioning and Acquisition of Immovable Property Act, 1952.
The arbitrator, by award dated 13-05-1968, fixed the market value at Rs 5 per square yard with 6 % interest. Dissatisfied, the appellants appealed. A Single Judge of the High Court (05-11-1971) increased the rate to Rs 6 per square yard relying on Exhibit P-7 (a 1941 award for adjoining land). The Division Bench affirmed this decision, prompting the present appeals to the Supreme Court. A separate appeal concerning Khasra No. 662/364 (22.9 bighas) was dismissed in line with an earlier order dated 24-10-1983 refusing leave in similar matters.
Legal Issues Presented
- Whether, in light of rising land values and the location of the property, the appellants are entitled to compensation exceeding Rs 6 per square yard.
- Whether, despite the absence of statutory entitlement, the appellants should receive solatium because of delay (five years) in appointing the arbitrator.
Arguments of the Parties
Appellants’ Arguments
- The High Court acknowledged continuous price escalation in Delhi since 1939 and the advantageous location of the land on main roads; nonetheless it erroneously limited compensation to Rs 6 per square yard.
- Given the five-year delay in appointing the arbitrator, equity demands payment of solatium, relying on Union of India v. Hari Krishan Khosla and Harbans Singh v. Union of India.
Respondents’ Arguments
The opinion does not contain a detailed account of the respondents’ legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Union of India v. Hari Krishan Khosla, 1993 Supp (2) SCC 149 | Equitable award of solatium and enhanced interest where there was extraordinary delay in appointing an arbitrator. | Used as persuasive authority to justify granting solatium, though at a reduced rate (15 %) because the delay here was five years, not sixteen. |
| Harbans Singh v. Union of India, Civil Appeals Nos. 470 & 471 of 1985 (SC) | Granted 30 % solatium and 9 % interest owing to a sixteen-year delay in arbitration, despite no statutory right. | Cited to support an equitable, non-statutory grant of solatium; the Court distinguished the shorter delay in the present case and awarded 15 %. |
Court's Reasoning and Analysis
1. Market value: Both the Single Judge and Division Bench accepted that land prices in Delhi rose steadily from 1939 onwards. Exhibit P-7 (a 1941 award of Rs 6 per square yard for adjoining land acquired to widen Rohtak Road) demonstrated comparable value. The Supreme Court noted that by 1945 two additional roads existed, giving the appellants’ land development potential. Estimating an incremental rise to Rs 8 per square yard between 1941-1945, the Court fixed the base value at Rs 8 per square yard. Accounting for one-third deduction towards development expenses, the final rate was set at Rs 7.50 per square yard.
2. Solatium: Although the governing statute does not mandate solatium, the Court invoked equitable principles in light of precedents where long delays warranted such relief. Here, the delay in appointing an arbitrator was five years (1961-1966). Balancing equity with the lesser delay, the Court awarded solatium at 15 % of the compensation, rejecting the appellants’ plea for 30 %.
3. Interest: The appellants did not challenge the 6 % rate fixed below; the Court therefore left the rate undisturbed.
Holding and Implications
ALLOWED IN PART; compensation enhanced to Rs 7.50 per square yard, solatium granted at 15 %, and interest confirmed at 6 % per annum. The appeal concerning Khasra No. 662/364 was dismissed. No order as to costs.
Implications: The decision affords higher compensation and equitable solatium to the appellants without altering statutory provisions, and reiterates that equitable relief may be tempered by the extent of delay. It does not establish a new legal standard but applies existing equitable principles to the specific facts.
Order
1. The appellants are owners of 3/4th share in Khasra Nos. 1012/341(3-16). 1011/594(1-13), 1334/1009/594(62.01) bighas situated in Sadhora Khurd, Delhi. Initially, the lands were requisitioned under Defence of India Rules for defence purpose. On 15-5-1945, a notification was issued under Defence of India Rules acquiring the lands. The Collector by his proceedings dated 30-10-1961 offered at the rate of 0.38 paisa to 0.92 paisa per square yard with interest at the rate of 6 per cent payable between 15-5-1945 to 14-1-1962. The offer was rejected as a consequence in exercise of the power under Section 23(2) of the Requisitioning and Acquisition of Immovable Property, Act, 1952 for short the Act, the arbitrator was appointed on 22-9-1966. On inquiry, the arbitrator awarded by his award dated 13-5-1968 at the rate of Rs 5 per square yard and also awarded interest at the rate of 6 per cent. Dissatisfied therewith, the appellants carried the matter in appeal. The learned Single Judge by judgment dated 5-11-1971 relying upon Ex. P-7 and award dated 3-5-1941 in which the market value was determined at the rate of Rs 6 per square yard enhanced the market value at the rate of Rs 6 per square yard. The appellants filed appeal before the Division Bench. The Division Bench confirmed the award of the learned Single Judge and dismissed the appeals. Thus these appeals by special leave of this Court.
2. Though the appeals have been filed against the lands covered in Khasra Nos. 662/364 to an extent of 22.9 bighas, they are situated far away from the lands referred to earlier. This Court in similar circumstances refused leave and dismissed the Special Leave Petitions Nos. 4589-99 etc. of 1981 by order dated 24-10-1983. Therefore, the lands in Khasra Nos. 662/364 stand on the same footing. Accordingly the appeal arises against Khasra Nos. 662/364 also stands dismissed.
3. Mr U.R Lalit, learned Senior Counsel for the appellants has contended that the learned Single Judge and the Division Bench had noted that there is an upward rise in the prices in Delhi from 1939 onwards and that the lands are situated on the main roads but, however, rejected the claim of the appellants for increasing the market value on the grounds that the lands are interior to the Rohtak Road and therefore the rise in price as set-off to the situation is clearly erroneous in law. We find force in the contention. It is admitted that Ex. P-7 is an award in respect of the lands notified in 1941 for widening the Rohtak Road and award was made at the rate of Rs 6 per square yard. The lands in these Khasra numbers are situated nearabout the Rohtak Road and in between two roads were laid between 1941 to 1945. Thus it could be seen that by the date of notification there existed facilities of roads as access to the lands. Ex. P-7 award lands were acquired for widening the Rohtak Road since the lands in acquisition are also situated between the roads subsequently laid they acquired potency for future development. In view of the finding by both the learned Single Judge and also the Division Bench that there was a constant rise in prices, we consider that the rise in prices could be around Rs 6 to Rs 8 between 1941-45. Accordingly, the appellants are entitled to the enhancement of the market value at the rate of Rs 8 per square yard. The State did not file appeal against enhancement to Rs 6 per square yard. Since we found that the lands had potential value for housing purpose 1/3 should be deducted towards developmental charges so that appellants are entitled to Rs 7.50 per square yard.
4. It is next contended that the appellants are entitled to the solatium though in law they are not entitled but in equity they are entitled to the solatium for the reason that for 22 years arbitrator was not appointed to determine the market value. In support they relied upon the judgment of this Court in Union of India v. Hari Krishan Khosla 1993 Supp (2) SCC 149. Therein this Court relied upon another judgment in Harbans Singh v. Union of India C.As Nos. 470 and 471 of 1985. In that judgment this Court said that having regard to the peculiar facts and circumstances of the present case and in view of the fact that the appointment of the arbitrator was not made by the Union of India for period of 16 years, this Court considered in equity to give solatium at the rate of 30 per cent of the amount of compensation and interest at the rate of 9 per cent per annum should be awarded to the appellants therein. In this case, the question of appointing the arbitrator would arise only when the market value offered was rejected by the claimants. The offer was made and rejected on 13-10-1961 and the arbitrator came to appoint on 22-9-1966 after five years. Under these circumstances, the claimants are entitled to solatium at the rate of 15 per cent on the market value. The appellants did not challenge the rate of interest granted at 6 per cent. Accordingly they are also entitled to the interest at the rate of 6 per cent per annum. The appeals are accordingly allowed. The appellants are entitled to the relief as stated above. No costs.
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ANNEXURE
(Before P.N Bhagwati, Amarendra Nath Sen and Ranganath Misra, JJ.)
HARBANS SINGH, SHANI DEVI AND OTHERS . . Appellants;
Versus
UNION OF INDIA AND OTHERS . . Respondents.
Civil Appeals Nos. 470 and 471 of 1985, decided on February 11, 1985
Order
Having regard to the peculiar facts and circumstances of the present case and particularly in view of the fact that the appointment of the arbitrator was not made by the Union of India for a period of over 16 years, we think this is a fit case in which solatium at the rate of 30 per cent of the amount of compensation and interest at the rate of 9 per cent per annum should be awarded to the appellants. We are making this order having regard to the fact that the law has in the meanwhile been amended with a view to providing solatium at the rate of 30 per cent and interest at the rate of 9 per cent per annum. The appeal is accordingly disposed of but with no orders as to costs.
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