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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
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Acts
  • Lands Clauses Consolidation Act, 1845 (8 & 9 Vict. Clause 18).
  • Sections 28 and 35 of the Land Acquisition Act.
  • SECTION 23 LAND ACQUISITION ACT
  • Section 23(2) Land Acquisition Act
  • Section 23(1) of that Act.
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • Lands Clauses Consolidation Act, 1845 (8 & 9 Vict. Clause 18).
  • Sections 28 and 35 of the Land Acquisition Act.
  • SECTION 23 LAND ACQUISITION ACT
  • Section 23(2) Land Acquisition Act
  • Section 23(1) of that Act.
Smart Summary

Judgment Summary — Bhat, J.

Factual and Procedural Background

This set of 19 appeals raised two principal points. The persons interested (the proprietors / owners) objected to the amount of compensation awarded by the learned District Judge, Jammu, contending that greater compensation should have been allowed. The Collector appealed the grant of interest on the compensation on two grounds: (1) that payment of interest is discretionary and should not have been allowed; and (2) that if interest is allowed it should be computed only on the value of the land assessed (market value) and not on the 15% "Jabirana" (solatium).

After hearing, the parties negotiated an amicable settlement on the price of the land. The agreed rates were Rs. 375 per kanal for land in village Gaginan, Tehsil R.S. Pora (appeals Nos. 27, 28, 53, 55 and 56 of 1966) and Rs. 2,000 per kanal for land situate in Ranbir Singh Pora (appeal No. 54 of 1966). At those rates the money payable in the specified appeals was worked out by the Court and listed in the judgment (amounts for appeals 27, 28, 53, 56, 55 and 54 are set out in the opinion).

Legal Issues Presented

  1. Whether payment of interest on compensation under Sections 28 and 35 of the Land Acquisition Act is discretionary or obligatory.
  2. Whether interest, if payable, should be computed on the market value alone or on the full compensation including the statutory 15% "Jabirana" (solatium) provided by Section 23(2) of the Act.

Arguments of the Parties

Owners / Persons Interested

  • The owners objected to the amount of compensation awarded by the District Judge and pursued higher compensation (their grievance being that more compensation should have been allowed).
  • During proceedings the owners and the Collector reached an amicable settlement on the price per kanal for the land in the specified appeals (Rs. 375 and Rs. 2,000 as noted), which the Court recorded and quantified for each appeal.

Collector's Arguments

  • The Collector contended that payment of interest is discretionary and therefore should not have been granted.
  • Alternatively, the Collector argued that if interest is to be paid, it should be calculated only on the assessed market value of the land and not on the 15% "Jabirana" (solatium) since, he submitted, jabirana is not part of 'compensation' for the purpose of interest computation. He relied on Section 23 of the Land Acquisition Act for this proposition.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Collector v. Habib Ullah, AIR 1967 J & K 44 (Full Bench) Establishes that payment of interest under Sections 28 and 35 of the Land Acquisition Act is obligatory and not discretionary. The Court relied on this Full Bench decision to reject the Collector's first contention that interest is discretionary; it concluded that interest must be allowed where applicable.
AIR 1959 Mad 16 Stated that the 15% solatium under Section 23(2) is not integrated with the market value in Section 23(1) and is an additional statutory gift; it disappears only if the statute providing it is withdrawn. The Court noted this authority distinguishes parts (1) and (2) of Section 23 and acknowledges solatium as an addition to market value. The Court observed the Collector's counsel had relied on it but held the authority does not support the Collector's position that interest should exclude solatium.
AIR 1968 Guj 1 (Gujarat High Court) Referenced as supportive authority relevant to the Court's view on solatium and compensation. The Court described this decision as a recent authority that fortified the view that the 15% solatium is to be treated within the meaning of 'compensation' for purposes of interest under Sections 28 and 35.

Court's Reasoning and Analysis

The Court proceeded in stages. First, it recorded the amicable settlement on the price per kanal and worked out the amounts payable in each appeal at the agreed rates. That resolved the owners' challenge to the quantum, insofar as the parties had agreed the figures.

Turning to the Collector's objections in relation to interest, the Court addressed the two parts of that argument separately.

On the contention that interest is discretionary, the Court relied on the Full Bench decision in Collector v. Habib Ullah (AIR 1967 J & K 44 (FB)). After considering various authorities in that case the Full Bench had concluded that payment of interest under Sections 28 and 35 of the Land Acquisition Act was obligatory and could not be denied to a person whose land had been acquired. The present Court treated that decision as decisive to reject the Collector's submission that interest is discretionary.

On the second contention — that interest should not be paid on the 15% jabirana (solatium) — the Court examined Section 23 of the Land Acquisition Act which, as the judgment explains, has two parts. The Court quoted the second part (Section 23(2)) which provides for an award of 15% on the market value "in consideration of the compulsory nature of the acquisition." The Court observed the head-note "Matters to be considered in determining compensation" and held that both parts of Section 23 must be read together when determining "compensation."

The Court analyzed the legal meaning of "compensation" (including dictionary and Wharton's Law Lexicon definitions cited in the opinion) and concluded that the 15% jabirana is included within the term 'compensation' as used in the Act. The Court therefore held that interest under Sections 28 and 35 is payable on the total compensation, which includes the statutory 15% solatium.

In discussing the authority AIR 1959 Mad 16, the Court acknowledged that that decision draws a distinction between Section 23(1) and Section 23(2) — treating the solatium as an addition and not integrated with market value — but concluded that this did not support excluding the solatium from the scope of 'compensation' for purposes of computing interest. The Court further noted that its view was fortified by the recent Gujarat High Court authority reported as AIR 1968 Guj 1.

After applying these legal principles, the Court worked out the amounts of compensation payable with interest in the respective appeals and awarded interest at the rate specified in the judgment on the amounts standing unpaid.

Holding and Implications

The Collector's appeals are dismissed; interest under Sections 28 and 35 of the Land Acquisition Act is obligatory and is payable on the full compensation, including the statutory 15% "Jabirana" (solatium).

Direct consequences recorded in the judgment:

  • The Court quantified the amounts payable to various owners at the agreed rates (the judgment lists the amounts for appeals Nos. 27, 28, 53, 55, 56 and 54 of 1966).
  • In all cases, appellants (owners) are entitled to a further interest at the rate of 4% per annum from the date of the judgment on the amount of compensation standing unpaid until the whole amount is liquidated.
  • The Collector's appeals (challenging the grant of interest and its computation) were dismissed.
  • The parties were directed to bear their own costs.

The opinion does not state that it is creating a new precedent; it relied on existing Full Bench and High Court authorities in reaching its conclusions.

Orders accordingly. S.M. Fazl Ali, C.J., agreed.

    Kuldip Raj And Others v. State Of Jammu & Kashmir And Others

    Bhat, J.:— In these 19 appeals two points arise for consideration. The proprietors or, in legal language, the persons interested have objected to the amount of compensation. Their grievance is that more compensation should have been allowed to them than has been actually given by the learned District Judge Jammu. The appeal of the Collector is with respect to the grant of interest. His objection is two fold, one that interest is discretionary and should not have been allowed and secondly that if any interest is allowed, it should be allowed only on the value of the land assessed and not on the 15% Jabirana i.e, solatium also.

    2. After hearing the parties, the parties took time to arrive at an amicable settlement about the price of the land to be paid to the owners. Ultimately they came to an agreement that Rs. 375/- per kanal should be paid as compensation for the land in village Gaginan Tehsil R.S Pora (i.e in appeals Nos. 27, 28, 53, 55 and 56 of 1966) and Rs. 2,000/- per kanal for the land situate in Ranbir Singh Pora (i.e in appeal No. 54 of 1966). The amount of money payable to various owners in the different appeals at this rate as the price of the land comes to:—

    In appeal No. 27 of 1966 = Rs. 25,818.75

    In appeal No. 28 of 1966 = Rs. 12.918.75

    In appeal No. 53 of 1966 = Rs. 10.462.50

    In appeal No. 56 of 1966 = Rs. 11,306.25

    In appeal No. 55 of 1966 = Rs. 20,587.50

    In appeal No. 54 of 1966 = Rs. 15,100.00

    3. So that concludes one part of the appeals i.e the appeals of the owners. The argument of the learned counsel for the Collector is composed of two parts: one that payment of interest is discretionary; but this argument of his is refuted and the matter concluded by a Full Bench decision of this Court, Collector v. Habib Ullah AIR 1967 J & K 44 (FB). In that case after considering various authorities the court came to the conclusion that payment of interest under Sections 28 and 35 of the Act was obligatory and it could not be denied to a person whose land had been acquired.

    4. For the proposition that Interest should not be paid on 15% jabirana (solatium), the argument of the learned counsel for the Collector is that Jabirana is not part of compensation and interest is payable only on compensation. He has referred us to Section 23 of the Land Acquisition Act. This section consists of two parts: Part (1) states:—

    “In determining the amount of compensation to be awarded for land acquired under the Act, the Court shall take into consideration—

    5. six things, which are mentioned therein.

    6. According to him this is the compensation that has to be paid and interest is to be computed only on this amount. But we are afraid that this argument of the learned counsel for the Collector is not correct. As already stated this section consists of two parts. The opening words of the first part have already been quoted but the second part reads like this:—

    “(2) In addition to the market value of the land as above provided, the Court shall in every case award a sum of fifteen per centum on such market value in consideration of the compulsory nature of the acquisition.”

    7. The head-note of the section is “Matters to be considered in determining compensation”, which obviously means that not only the first part but both parts of this section have to be read together in determining the compensation. The compensation that the owner or other person who is deprived of his property is to get is the first market value then other things contained in part (1) of the section plus 15% as solatium (Jabirana) which is given to him to compensate him for the acquisition of his property against his wishes. The learned counsel for the Collector has referred us to AIR 1959 Mad 16 but we are afraid he has not read the authority properly because that authority clearly says that:—

    “The Solatium under Section 23(2) Land Acquisition Act cannot be considered to be an integral part of Section 23(1) of that Act. The 15 per cent solatium is not integrated with the market value but is a gift or addition provided under the statute. The claim to it will disappear when the statute providing for it is withdrawn.”

    8. So this authority clearly makes the distinction between parts (1) and (2) of Section 23 of the Act. Obviously the solatium is not a part of the market value of the land but is an additional amount granted to the owners as I said earlier, to compensate them for the loss caused to them.

    9. The dictionary meaning of the word “compensation” is “something that constitutes an equivalent or recompense; something that makes good a lack; something that makes up for a loss; something that relieves, equalizes or neutralizes”. Similarly the word has been defined in Whartion's Law Lexicon as ‘making things equivalent; satisfying or making amends; also that equivalent in money which is paid to the owners or occupiers of land taken or injuriously affected for public purposes and under Act of Parliament i.e the Lands Clauses Consolidation Act, 1845 (8 & 9 Vict. Clause 18)’. Therefore, on a plain construction and simple reading of Section 23 of the Act, it is clear that 15 per cent of Jabirana (solatium) is included in the word ‘compensation’, and interest is to be paid on this amount under Sections 28 and 35 of the Land Acquisition Act. In this view of ours, we are further fortified by a recent authority of the Gujarat High Court reported as AIR 1968 Guj 1.

    10. (In paragraphs 6 to 8, the Judgment works out the amounts of compensation payable to the various owners with interest the judgment then proceeds:)

    11. In all the cases, the appellants will be entitled to a further interest at the rate of 4% per annum from today on the amount of compensation standing unpaid till the whole amount is liquidated. The appeals filed by the Collector stand dismissed. But the parties are left to bear their own costs.

    12. S.M Fazl Ali, C.J:— I agree.

    TVN/D.V.C

    13. Orders accordingly.

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    Kuldip Raj And Others v. State Of Jammu & Kashmir And Others
    (May 2, 1968)