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Case Number

F.A.O No. 64 of 1975 with Cross Objection No. 1284-CII of 1975

Advocates

Shri G.S. Grewal
Addl
A.G. (Pb.).

Judges

J.V Gupta, J.

Acts

provisions of Clause (a) of sub-section (4) of Section 8 of the Punjab Act.
Property Act, 1953 (hereinafter referred to as the Act),
Order 41, Rule 22 of the Code of Civil Procedure,
Section 110-D of the Motor Vehicles Act
ARTICLE 31 A CONSTITUTION OF INDIA

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Smart Summary

Comprehensive Summary of the Opinion (J.V. Gupta, J.)

Factual and Procedural Background

Agricultural land measuring 28 Kanals 2 Marlas was requisitioned by the State Government by notifications dated 23 October 1953 and 21 April 1954 for construction of cheap tenements near the Industrial Area of Jullundur. The land was later acquired in April 1963 under the Punjab Requisitioning and Acquisition of Immovable Property Act, 1953 (the Act). Initial compensation was determined at Rs. 42 per Kanal under the Act's provisions. The petitioners were dissatisfied with the compensation and the District Judge, Jullundur, was appointed as Arbitrator under the Act.

The Arbitrator framed issues concerning (inter alia) the claimants' rights in the property, entitlement to compensation, and entitlement to interest. By order dated 13 June 1967 the District Judge (as Arbitrator) refused to enhance compensation and maintained the amount awarded by the Military Officer.

An appeal to the High Court was initially dismissed by a Single Judge on 15 March 1972, but in a subsequent Letters Patent Appeal decided on 8 January 1973 clause (b) of sub-section (4) of Section 8 of the Act was held ultra vires Article 31 of the Constitution; the matter was remanded to the Arbitrator to determine compensation in accordance with clause (a) of sub-section (4) of Section 8.

On remand the Arbitrator, after considering earlier and subsequent evidence, fixed the market value as at the date of acquisition (April 1963) at Rs. 190 per marla and disallowed claims for solatium and interest. The State filed appeals against that order, and the claimants filed cross-objections.

Legal Issues Presented

Whether the compensation awarded to the claimants should be enhanced to reflect the market value of the acquired land (i.e., whether the acquired land had potential for non-agricultural use and so justified a higher valuation).
Whether the cross-objections filed by the claimants in the appeals are maintainable under Order 41, Rule 22 of the Code of Civil Procedure (as contended by the State).
Whether the claimants are entitled to solatium and interest on the compensation awarded under the Act.

Arguments of the Parties

State / Appellants' Arguments

The land was only agricultural land and therefore the Arbitrator erred in valuing it on the basis that it had potential for non-agricultural use (i.e., the higher valuation of Rs. 190 per marla was unjustified).
A preliminary objection that the cross-objections filed by the proprietors are not maintainable under Order 41, Rule 22 of the Code of Civil Procedure; reliance was placed on a Division Bench judgment in F.A.O. No. 85-D of 1965 (decided 17 December 1965) in support of that contention.

Claimants / Respondents' Arguments (Cross-Objectors)

The District Judge should have relied on Exhibit P-1 (sale deed dated 24 July 1961) which related to land of 1 Kanal 6 Marlas sold for Rs. 65,000 (average Rs. 250 per marla) rather than only on Exhibit P-3 (sale deed dated 19 May 1962 for 1 Kanal 1 Marla sold for Rs. 4,000 — average Rs. 190.50 per marla).
From the site plan (Exhibit P-5) the plot in Exhibit P-1 also adjoins the acquired land, and therefore its higher sale price reflects the market value prevailing for the acquired land; the Arbitrator should have allowed compensation on that basis (Rs. 250 per marla).
The cross-objections are maintainable, with reliance on a number of authorities (including Union of India v. Virsa Singh; Major Triloki Nath Bhargava v. Smt. Jaswant Kaur; Smt. Shanti Devi and others v. General Manager, Haryana Roadways) to show that in appeals of this character cross-objections can be entertained.
Claimants sought solatium and interest relying on the Full Bench decision in Hari Krishan Khosla v. The Union of India which, under the Act, recognised entitlement to solatium and interest.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
F.A.O. No. 85-D of 1965 (Division Bench judgment, 17 December 1965)	Relied upon by the State in support of the contention that Order 41, Rule 22 CPC is not applicable to these proceedings (i.e., to oppose maintainability of cross-objections).	The Court noted the State relied on this decision but held the State's preliminary objection had no force in view of other authorities; the Division Bench decision was not treated as decisive against maintainability.
Union Of India v. Virsa Singh — 1979 81 PLR 340	Cited by respondents in support of their position regarding cross-objections (the opinion lists this authority among those relied upon by respondents).	The Court recorded that respondents relied on this authority in support of maintainability of cross-objections; the Court found the preliminary objection of the State to be without force (in combination with other authorities).
Major Triloki Nath Bhargava v. Smt. Jaswant Kaur — 1975 77 PLR 242	Authority for the proposition that cross-objections are maintainable by a respondent in an appeal under Section 110-D of the Motor Vehicles Act (quoted and applied analogously).	The Court applied the ratio that cross-objections can be maintained, finding the State's objection to be without force in light of this authority.
Smt. Shanti Devi & Others v. General Manager, Haryana Roadways, Ambala — 1971 73 PLR 543 (Full Bench)	Held that when the High Court hears appeals under Section 110-D of the Motor Vehicles Act it acts as a Court and the proceeding, though resembling arbitration at inception, does not retain arbitration character on appeal.	The Court stated that the ratio of this Full Bench judgment is fully applicable to the present case and used it to reject the contention that cross-objections were not maintainable.
Shri Radhey Sham v. The State of Haryana — 1980 P.L.J. 77 (Division Bench)	Discussed the principle that a claimant is entitled to market value on the basis of sale deeds fetching the highest value prevailing in the market (citing the Supreme Court decision in Shri Rani M. Vijaylakshmamma Rao Bahadur Ranne of Vuyyur v. Collector of Madras).	The Court relied on this observation to conclude that respondents were entitled to the market value based on the higher sale-deed (Exhibit P-1) and thus increased compensation to Rs. 250 per marla.
Shri Rani M. Vijaylakshmamma Rao Bahadur Ranne of Vuyyur v. Collector of Madras — 1969 1 M.L.J. 45 (Supreme Court)	Supreme Court decision relied upon (via other authorities) for the principle that highest market sale-deeds may determine market value.	The Court referenced this Supreme Court decision indirectly (through Shri Radhey Sham) as part of the basis for awarding market value on the highest sale-deed.
Punjab State v. Mohinder Singh — LPA No. 110 of 1977 (decided 12 April 1979)	Decision of this Court referenced alongside Shri Rani M. Vijaylakshmamma Rao for the proposition on using sale-deeds fetching highest values to determine market value.	The Court cited this authority as supporting the conclusion that the claimants were entitled to market value on the basis of the sale-deed fetching the highest value (Exhibit P-1).
Hari Krishan Khosla v. The Union of India — 1974 76 PLR 658 (Full Bench)	Full Bench decision under the same Act holding petitioners are entitled to solatium at 15% per annum and interest at 6% per annum on the amount of compensation.	The Court applied this Full Bench ruling and held respondents are entitled to solatium at 15% per annum and interest at 6% per annum on the compensation awarded.

Court's Reasoning and Analysis

The Court proceeded through a stepwise analysis grounded on evidence, the remand direction, and prior authorities explicitly cited in the opinion:

On the nature and potential of the acquired land: The Court rejected the State's contention that the land was merely agricultural. It relied on the two notifications (1953 and 1954) which showed the land was requisitioned for construction of cheap tenements near the Industrial Area of Jullundur. The Court treated that fact as sufficient to conclude the land had potential for use other than agriculture, supporting the Arbitrator's conclusion that market value should reflect broader potential uses.
On the maintainability of cross-objections: The Court considered the State's preliminary objection under Order 41, Rule 22 CPC and found it unsustainable in light of binding and persuasive authorities. The Court relied on Full Bench and Division Bench decisions (notably Smt. Shanti Devi and Major Triloki Nath Bhargava) holding that High Court appeals of certain proceedings operate as court proceedings and that cross-objections are maintainable. On this basis the Court held the State's objection to be without force.
On valuation (market value per marla): The Arbitrator had fixed Rs. 190 per marla based on Exhibit P-3. The Court scrutinised the sale deeds on record and the site plan (Exhibit P-5) and observed that Exhibit P-1 (sale deed dated 24 July 1961 for 1 Kanal 6 Marlas sold for Rs. 65,000 — average Rs. 250 per marla) also adjoined the acquired land. The State could not explain why the higher average price in Exhibit P-1 should not have been allowed. Applying the principle (as discussed in Shri Radhey Sham and the Supreme Court authority cited therein) that the claimant is entitled to market value on the basis of sale-deeds fetching the highest prevailing price, the Court enhanced compensation to Rs. 250 per marla.
On solatium and interest: The Court applied the Full Bench decision in Hari Krishan Khosla which under the same Act held that petitioners are entitled to solatium at 15% per annum and interest at 6% per annum. Accordingly, the Court held the respondents entitled to solatium and interest at those rates on the compensation awarded.
Resulting modification: On the combined application of factual findings (notifications and site plan), valuation principles from precedents, and the Full Bench ruling on solatium and interest, the Court modified the Arbitrator's order to award compensation at Rs. 250 per marla together with solatium at 15% p.a. and interest at 6% p.a.

Holding and Implications

Core Ruling: The appeals filed by the State were found to be without force on the principal issues; the cross-objections filed by the claimants were accepted, and the Arbitrator's (District Judge's) order was modified to award higher compensation.

Direct Disposition (as expressed in the opinion): The respondents (claimants) are entitled to compensation at the rate of Rs. 250 per marla (market value as at April 1963), together with solatium at 15% per annum and interest at 6% per annum on the amount of compensation.

Consequences for the Parties: The immediate effect is that the claimants recover a higher monetary award (enhanced from Rs. 190 to Rs. 250 per marla) plus solatium and interest; the State's appeals seeking to upset the enhancement were rejected.

The opinion applies existing authorities (including a Full Bench decision) to the facts and does not purport to lay down a new legal principle beyond applying cited precedents to modify the award in these proceedings.

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The State Of Punjab v. Smt. Lila Wati .

J.V Gupta, J.:— This order will dispose F.A O. s. Nos. 64, 65, 66, 67, 68, 69 and 70 of 1975, alongwith the cross-objections filed in all the appeals as all of them arise out of the same judgment.

2. By two separate notifications, dated 23rd October, 1953 and 21st April, 1954, the agricultural land measuring 28 Kanals 2 Marlas, was requisitioned by the State Government for the construction of cheap tenements near the Industrial Area of Jullundur. The requisitioned land was situated on the road lea???ing to Sod???l. Subsequently, the said land was acquisitioned in April, 1963, under the Punjab Requisitioning and Acquisition of Immovable Property Act, 1953 (hereinafter referred to as the Act), and the compensation was determined at the rate Rs. 42/- per Kanal by virtue of the provisions contained in sub-section (4) (a) of Section 8 of the Act, according to which the compensation had to be paid at the market value or twice the price ???hich the requisitioned property would have fetched in the open market if it had been sold on the date of requisition, whichever is less. Since the petitioners were not satisfied with the compensation awarded by the State Government on the basis of compensation allowed by the Military Officer, District Judge, Jullundur was appointed as the Arbitrator under the provisions of the Act. The following issues were framed for the determination of the dispute between the parties:—

1. At the time of the acquisition what was the right, title or interest of each claimant or set of claimants as the case may be, in the acquired property or in any part thereof?

2. Whether and, if so, what amount each claimant or set of-claimants is separately entitled to get in consequence of the acquisition of this property?

3. Whether the claimants are entitled to get any sum or compensation for compulsory acquisition?

4. Whether and, if so, what amounts are the claimants entitled to get as interest by way of compensation?

3. The learned District Judge by his order dated 13th June, 1967, refused to enhance the amount of compensation and maintained the amount as allowed by the Military Officer.

4. There was an appeal to the High Court against the said order dated 13th June, 1967. Though the learned Single Judge dismissed the same on 15th March, 1972 but in Letters Patent Appeal, which was decided on 8th January, 1973, clause (b) of Sub-sec. (4) of Section 8 of the Act, was held to be ultra vires of Article 31 of the Constitution of India and the following order was then passed:—

“We, therefore, accept this appeal, set aside the order of the Arbitrator and remand the case back to him for determination of the compensation in accordance with the provisions of Clause (a) of sub-section (4) of Section 8 of the Punjab Act. In as much as this point was not raised before the learned Single Judge, although in a decision of the Supreme Court was available. We make no order as to costs.”

5. On remand, an opportunity was given to the parties for leading evidence and consequently, issue No. 2 was determined afresh by taking note of the evidence, which was recorded before the order of remand and the one recorded subsequently After discussing the evidence produced by the parties, the learned District Judge fixed the market value of the acquired land on the date of acquisition, i.e in April, 1963, under Clause (a) of sub-section (4) of Section of the Act, as being Rs. 190/- per marla. Consequently, i??? was held that all the petitioners are entitled to recover compensation at that rate. The claim for solatlum and interest on the amount awarded was disallowed on the ground, that “I am of the view that the petitioners cannot re-open this point, after a judgment against them has been given by the Hon'ble Single Judge. On the same reasoning I do not want to award any interest to the petitioners on the compensation which is liable to be enhanced at the market value which [have fixed.” Feeling aggrieved against this order of the District Judge, acting as Arbitrator under the Act, the State has filed the said appeals; where as the claimants have filed the cross-objections.

6. The learned counsel for the State contended that the land was only agricultural land, and, therefore, the Arbitrator has wrongly allowed the compensation at the rate of Rs. 190/- per Mar???a, taking into consideration that the acquired land was such which could be used for purposes other than agriculture. After hearing the learned counsel for the appellants and going through the evidence, I do not find any force in the appeals filed by the State. Apart from the other evidence, in the two notifications issued in the years 1953 and 1954, the 1and in dispute was requisitioned by the State Government for the construction of cheap tenements near the Industrial Area of Jullundur. This itself is sufficient to hold that the acquired land had the potentiality being used for purposes other than agriculture and it has been rightly held so by the Arbitrator.

7. As regards the cross-objectiods file??? on behalf of the proprietiors, a preliminary objection has been raised on behalf of the State, that the same are not maintainable under Order 41, Rule 22 of the Code of Civil Procedure, as the same is not applicable to these proceeding. In support of his contention, he has relided upon a Division Bench Judgment of this Court in F.A.O No. 85-D of 19???6, decided on 17th December, 1965. On the other hand, the learned counsel for the respondents has relied upon Union Of India… v. Virsa Singh…. . 1979 81 PLR 340. Major Triloki Nath Bhargava v. Smt. Jaswant Kaur . 1975 77 PLR 242. and Smt. Shanti Devi and othars v. General Manager, Haryana Roadways, Ambala . 1971 73 PLR 543. In Smt. Shanti Devi's case (supra), a full Bench judgment of this Court, it has been held therein that the High Court while hearing appeals under Section 110-D of the Motor Vehicles Act, would act as a Court and that a proceeding even if at its inception has a semblance of an arbitration proceedings, would not retain its character as such in appeal. In my opinion, the ratio of this judgment is fully applicable to the present case. In Major Triloki Nath Bhargava's case (supra) which was again a case under the Motor Vehicles Act i??? was held that the crass-objections are maintainable at the hands of a respondent in an appeal under Section 110-D of the Motor Vehicles Act to the High Court. In para 4 thereof, the matter has been fully discussed and ultimately it has been held that “Consequently, the cross-objections filed by the claimant respondent in response to the appeal of the owner and the insurer of the Vehicles were maintainable, and the objection of Mr. Suri against the maintainability of the same is without force and is repelled” In view of these judgments of this Court, the preliminary objection of the learned counsel for the State has no force.

8. The learned counsel for the respondents in their cross-objections, has vehemently contended that the learned District Judge, though has referred to a sale-deed Exhibit P-1, dated 24th July, 1961, relating to the land measuring 1 Kanal, 6 Marlas, sold for Rs. 65,000/-, the average price of which comes to Rs. 250/- per marla, but has placed reliance on Exhibit P-3 only, a sale deed, dated 19th May, 1962, relating to land measuring 1 Kanal 1 Marla, sold for Rs. 4,000/-, the average of which comes to Rs. 190.50 Paise per marla. The location of there plots sold by Exhibits P-1 and P-3, is clear from the Site-Plan, Exhibit P-5, which also shows the acquired land itself. The learned District Judge has observed that the land pertaining to Sale-Deed, Exhibit P-3, adjoins the acquired land and the situation of both the lands is such that it is difficult to hold that their value was different. The learned counsel for the claimants contended that the land, subject-matter of Exhibit P-1, also adjoins the acquired land and since the average of that land comes to Rs. 2???0/- per Marla, the same should have been allowed by the learned District Judge to them. I find force in this contention. From the plan, Exhibit P-5, it is quite apparent that the land of Exhibit P. 1, also adjoins the acquired land, though on the opposite side. The learned counsel for the State was unable to point out that why the average price of this land, which is the subject-matter of Exhibit P-1 should not have been allowed to the claimants. In Shri Radhey Sham v. The State of Haryana . 1980 P.L.J 77., a Division Bench judgment of this Court, it has been observed, that “As regards the instances, Exhibits R-2, R-3 and R-10, the claimant would be justified in saying, in view of the Supreme decision, in Shri Rani M. Vijaylakshmamma Rao Bahadur Ranne of Vuyyur v. The Collector of Madras . 1969 1 M.L.J 45., and a decision of this Court in Punjab State v. Mohinder Singh . LPA No. 110 of 1977. decided on April 12, 1979, that he is entitled to the market value on the basis of sale deeds fetching the highest value, pre???ailing in the market.” So keeping in view the said observation, the respondents are entitled to market value on the basis of sale-deed, Exhibit P-1, fet???hing the highest value prevailing in the market at the relevant time which was Rs. 250/- per marla Consequently, the amounts of compensation is enhanced from Rs. 190/- per marla. to Rs. 2???0/- per Marla and the respondents will be entitled to recover the amount of compensation at that rate.

9. Aa regards the claim to the solatium and the interest, which has not been allowed by the learned District Judge, the matter has been settled by a Full Bench of this Court in Hari Krishan Khosla v. The Union of India . 1974 76 PLR 658., under this very Act. It has been held therein, that “the petitioners are entitled to claim and receive from the Central Government solatium at 15 per cent per annum on the amount of compensation allowed to them for their land which has been acquired by the Government, and also interest at six percent per annum on he amount of compensation.” Consequently, in view of this judgment of the Full Bench, it is held that the respondents are entitled to claim and receive solatium at 1??? percent per annum on the amount of compensation allowed to them for their land by this Court and also interest at 6 percent per annum on the amount of compeosation.

10. For the reasons recorded above, the appeals fails whereas the cross-objections are accepted and the order of the Aribitrator, i.e the District Judge, is modified to the extent that the respondents will be entitled to the compensation at the rate of Rs. ???50/- per Marla along with solatium at 15% per annum and the interest at the rate of 6 per cent.

H.L.S

Appeal allowed.

The State Of Punjab v. Smt. Lila Wati .

Comprehensive Summary of the Opinion (J.V. Gupta, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

State / Appellants' Arguments

Claimants / Respondents' Arguments (Cross-Objectors)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

The State Of Punjab v. Smt. Lila Wati .

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