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State Of U.P. v. Radhey Shyam
Judgment Summary — R.K. Mahajan, J.
Factual and Procedural Background
The appeals arise from land acquisition proceedings in Village Basai, Mustqil Tahsil, District Agra. One acquisition involved land measuring 3 bighas 13 biswas (plots Nos. 500, 501, 504, 506, 509) acquired for the Shilpa Gram Scheme at the instance of the Managing Director, U.P. State Industrial Development Corporation, Kanpur. Notifications under Sections 4 and 6 of the Land Acquisition Act were issued (dates in the opinion include 14.2.1977 and 15.2.1977). A Special Land Acquisition Officer passed an award on 15.12.1982 at Rs. 6,000 per bigha. The Special Judge (Economic Offences), Agra (Shri Vishnu Dutt Dubey) passed an award on 20.1.1987 awarding compensation at Rs. 15 per square yard (equated to Rs. 41,340 per bigha and Rs. 1,50,891 for the acquired area), solatium at 30% and various interest awards (including 12% per annum for a specified early period and 9% per annum from date(s) of possession until payment).
A separate appeal (First Appeal No. 372 of 1987 arising from L.A. No. 106 of 1983) concerned other plots (Nos. 505, 510, 511, 512, 513) measuring 4 bighas in the same village. The Special Judge awarded compensation at the same rate (Rs. 15 per square yard = Rs. 41,340 per bigha; total Rs. 1,65,360 for the area) and made the same orders on solatium and interest as in the first matter.
The State of U.P. filed appeals challenging the Special Judge's enhancement of compensation and certain findings about the land's potential. Cross-objections were filed by the claimants/respondents. The present opinion disposes of these appeals and related cross-objections.
Legal Issues Presented
- Whether the Special Judge was justified in finding the acquired land had building (abadi) potentiality and in fixing compensation at Rs. 15 per square yard (and whether that finding should be interfered with by this Court).
- Whether earlier judgments/awards fixing land value in the same or nearby village (including awards by Shri S. A. Siddiqui) constitute the best or reliable evidence for determining market value of the acquired land.
- Whether the 12% per annum award under Section 23(1-A) of the Land Acquisition Act (as inserted by the Land Acquisition (Amendment) Act, 1984) is payable from the date of publication of the notification under Section 4 when possession was taken before the insertion of Section 23(1-A).
- Whether the claimants/respondents are entitled to the benefits of the Land Acquisition (Amendment) Act, 1984 in respect of interest and other provisions, given the timings of possession, notification and award.
- What interest rate(s) apply to any enhanced compensation (including the application of Section 28 interest rates where appropriate)?
Arguments of the Parties
Appellant (State of U.P.) — submissions by Learned Standing Counsel
- The Special Judge erred in finding that the land had building potentiality and in fixing Rs. 15 per square yard as market value; that finding was incorrect.
- The Special Judge wrongly relied on proximity to the Taj Mahal, hotels and hospitals; these were not in close proximity and improperly influenced valuation.
- The enhanced compensation was based on surmises and conjectures; the Collector's award (Rs. 5,000 per bigha) was appropriate and in accordance with facts.
- The land was agricultural and could not be equated with abadi/building potential land.
- The 12% interest claimed from the date of notification (under Section 23(1-A)) should apply only where possession and other temporal conditions make it applicable (Standing Counsel argued it should apply in their favor but the Court rejected that submission in context).
- The judgments relied upon by the District Judge relate to land situated 3–4 kilometres away and thus are not the best guide for valuation.
Respondents / Claimants — submissions by their counsel
- Cross-objections attacked the Special Judge's award as inadequate and argued the land is situated near the Taj Mahal and other amenities; thus the compensation should be higher.
- On inspection, the Special Judge found the land located where amenities (water, post office, bus station, main market of Taj Ganj) were within walking distance; that supported higher valuation and building potential.
- Relied on earlier awards (including judgments of Shri S. A. Siddiqui, Xth Additional District Judge, Agra in cases Nos. 62 and 63 of 1981) which fixed rates higher (e.g., Rs. 40 per square yard) and demonstrate a rising trend in local land prices.
- Cited Union of India v. Nand Kishore for the proposition that court judgments fixing the value of land in the same village are the best evidence and that recent sales prior to Section 4 notification are the best guide to market value.
- Claimants argued entitlement to benefits under the Land Acquisition (Amendment) Act, 1984 (Act No. 68 of 1984) in respect of enhanced compensation and related reliefs.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Judgments of Shri S. A. Siddiqui, Xth Additional District Judge, Agra (Case Nos. 62 & 63 of 1981, delivered 14.3.1989) | These awards fixed a rate of Rs. 40 per square yard for nearby land; used to show a rising trend in local prices and as a comparative indicator of market value. | The Court allowed these awards to be placed on record and treated them as competent material indicating rising prices; they informed the Court's conclusion that Rs. 15 per sq. yard was too low. |
| Union of India v. Nand Kishore | Principle: judgments of courts fixing value of land in the same village are the best piece of evidence; sales of land in the village shortly before Section 4 notification are the best guide to value. | The respondents relied on this authority to support use of nearby judicial awards and local sales as primary evidence of market value. The Court accepted that such judgments can be the best guide. |
| Special Tahsildar (LA), P.W.D. Schemes, Vijayawada v. M.A. Jabbar (Supreme Court) | Held (as cited) that 12% interest was grantable from the date of publication of notification under Section 4 till date of possession (in the facts of that case). | The opinion notes this decision but distinguishes the present facts regarding the timing of possession and insertion of Section 23(1-A); the Court considered it in assessing whether 12% from date of notification applied here. |
| Jain College Trust and Managing Society v. State of Haryana and Ors. | Observation (as cited): claimants may not be entitled to benefit of Section 23(1-A) when award of 12% per annum from date of publication of notification till date of taking possession is not appropriate under facts. | The Court cited this authority to show that earlier decisions have denied the benefit of Section 23(1-A) where possession was taken before the insertion; it supported the Court's conclusion that 12% from notification was not chargeable in these facts. |
| Union of India v. B. V. Saroja and Ors. | Followed the view in Jain College Trust regarding non-applicability of Section 23(1-A) in similar circumstances. | The Court noted this decision as having followed the same view and relied on the consolidated approach to the non-retrospective applicability of Section 23(1-A) in relevant fact situations. |
Court's Reasoning and Analysis
The Court reviewed the factual matrix, the Special Judge's findings on inspection and market comparators, the parties' submissions, and the judicial authorities relied upon. The reasoning proceeded as follows:
- On valuation: The Court rejected the Standing Counsel's submission that the District Judge wrongly relied on judgments relating to lands 3–4 km away. The Court held that a District Judge may consider the prevailing price of neighboring land within a vicinity of a few kilometres to form an objective opinion on market value and to observe trends.
- The Court noted the Siddiqui awards (fixing Rs. 40 per square yard) as indicative of a rising trend in the locality. Taking into account the situation of the land, the latest awards, and other exemplars relied on by the District Judge, the Court concluded that Rs. 15 per square yard was too low and that the market value could not be less than Rs. 25 per square yard.
- Therefore the Court modified the District Judge's award to increase the compensation rate from Rs. 15 to Rs. 25 per square yard. The Court characterized this adjustment as a reasonable adjudication based on surrounding evidence and permissible "reasonable speculation" when assessing market value in context.
- On the 12% interest under Section 23(1-A): The Court considered the timing of events. Possession had been taken in 1965 (before the insertion of Section 23(1-A)); notifications under Section 4 in the matters appeared earlier than the Amendment's enforcement in 1984. The Court held that Section 23(1-A) is not retrospective and that 12% interest from the date of notification was not payable in these facts. It relied on cited authorities showing that Section 23(1-A) does not necessarily apply where possession predates the insertion.
- On application of the 1984 Amendment: Because the award (as passed by the Special Judge) was made after the enforcement of the Land Acquisition (Amendment) Act, 1984 and because the District Judge enhanced the amount after enforcement, the respondents were held entitled to benefits of the 1984 Act as applicable to awards made in that post-enforcement window.
- On interest under Section 28 and post-award delay: The Court modified the lower court's interest directions in light of the enhanced compensation. It directed that respondents are entitled to 9% interest on the excess amount from the date of possession till the date of payment, and if payment is not made within one year, then 15% thereafter.
Holding and Implications
Core ruling: The appeals were partly allowed and the cross-objections were allowed to the extent set out below.
The specific operative outcomes ordered by the Court (as drawn from the opinion) are:
- Compensation increased: The Court modified the compensation rate awarded by the District Judge from Rs. 15 per square yard to Rs. 25 per square yard.
- 12% interest from date of notification: The Court held that 12% per annum from the date of notification under Section 4 (under Section 23(1-A)) is not payable in these matters because Section 23(1-A) is not retrospective where possession was taken before the insertion; accordingly that relief was disallowed.
- Application of 1984 Amendment: Because the Special Judge's award was made after the enforcement of the Land Acquisition (Amendment) Act, 1984 and the District Judge enhanced the amount after enforcement, the respondents were held entitled to benefits of that Amendment as regards interest and related provisions.
- Interest on excess amount: The respondents shall receive 9% interest on the excess amount (resulting from the enhancement) from the date of possession until payment; if payment is not made within one year then interest at 15% will apply thereafter.
- Appeal outcome: The State's appeal was allowed only to the extent of disallowing 12% interest from the date of notification; otherwise the District Judge's enhancement was modified upward and cross-objections allowed. The opinion concludes with the result stated as the appeal being partly allowed and the cross-objection allowed.
Implications: The direct effects on the parties are (1) an increased per-square-yard compensation rate (to Rs. 25), (2) denial of the claim to 12% interest from the date of notification because of non-retrospective application of the 1984 Amendment where possession predated the amendment, and (3) entitlement to interest on the enhanced component at 9% (and 15% after one year of delay). The opinion does not announce or claim to set a broader new precedent beyond the application of cited authorities to these facts.
R.K. MAHAJAN, J.
(1) THE judgment in this appeal will also dispose of, State of U. P. through Collector, Agra v. Smt. Sushila devi
(2) THIS appeal has arisen from the following facts. The land measuring 3 Bighas 13 biswas consisting of plot Nos. 500, 501,. 504, 506, 509 situated in village Basai, Mustqil tahsil and District Agra was acquired for shipla Gram Scheme at the instance of Managing Director, U. P. State Industrial Development Corporation, Kanpur. Notification under Sections 4 and 6 of the Land Acquisition act (here in after referred to as the Act) was issued on 14. 2. 1997 and 15. 2. 1977. The award was passed by Special Land Acquisition officer on 15. 12. 1982 @ Rs. 6,000/- per bigha. The Special Judge (Economic Offences), agra Shri Vishnu Dutt Dubey passed the award on 20. 1. 1987 awarding compensation @ Rs. 15/- per square yard = Rs. 41,340/-per Bigha which comes to Rs. 1,50,891/- for the area acquired. The Special Judge also awarded solatium @ 30% and interest @ 12% per annum w. e. f. 14. 2. 1977 to 28. 3. 1977. . and interest @ 9% per annum from the date of possession i. e. 28. 3. 1977 till the date of payment and further interest @ 9% per annum from the date of possession i. e. 28. 3. 1997 till the date of final payment.
(3) ANOTHER appeal also relates to the same District Agra and the Land Acquisition 1. First Appeal No. 372 of 1987. Officer in L. A. No. 106 of 1983 with respect to plot Nos. 505, 510, 511; 512, 513 measuring 4 Bigha situated in the same village as referred to above passed the award. The date of notifications under Sections 4 and 6 of the act are same. The Special Judge (Economic offences), Agra allowed the compensation @ rs. 15/- per square yard = Rs. 41,340/- per bigha which comes to Rs. 1,65,360/- for the area acquired and regarding the interest and solatium he has passed the same order as passed in the earlier part of this judgment.
(4) THE State of U. P. feeling aggrieved has filed appeals in both cases. The grounds of objection in both the cases are almost same. It is submitted by the learned Standing counsel that the Special Judge has committed an error in giving a finding that the land has a potentiality of building and as such the price is fixed Rs. 15/- per square yard. The finding of the lower court has also been attacked on the ground that the Taj Mahal and other hotels and hospitals are not in close proximity and this factor has influenced the mind of the court wrongly in assessing the market value. It is also submitted that the fin'ding of the special Judge in enhancing the compensations is illegal and based on surmises and conjectures and the compensation awarded by the Collector i. e. Rs. 5,000/- per Bigha was in accordance with the facts. It is also submitted that the land in dispute is agricultural land and could not have been compared with the Abadi potentiality i. e. (land having building potentiality). The cross objections have been filed by the claimants-respondents and has attacked the finding of the Special judge who awarded compensation @ Rs. 15/ per square yard. The main ground of attack is that land is admittedly situated, near Taj mahal and other hotels. It is also submitted that on inspection by the Special Judge the land is situated at a place where all the amenities like water, Post Office, Bus Station, Main market of Taj Ganj are situated within walking distance and as such the. prices should have been granted at higher rate and the price of the wall should have been granted @ Rs. 20,000/- in other words the compensation has been described as inadequate and the learned counsel for the respondent further. submits that claimants are entitled to get all the benefits of newly amended Act i. e. Act no. 68 of 1984.
(5) LEARNED counsel for the respondent also moved an application for placing on record judgment of Shri S. A. Siddiqui, H. J. S. , xth Additional District Judge, Agra in case nos. 62 and 63 of 1981 delivered on 14. 3. 1989. 1 allow these awards to be placed on record for the purpose of arriving at the just decision for determination of the market value after hearing the arguments in this case. They are marked 'x' and 'y'. Both these awards/judgments the rate of per square yard was- fixed at Rs. 40/ -. Notification under section 4 of the Act was issued on 1. 6. 1977. Notification are approximate to the land acquired in the appeal.
(6) THE learned counsel for the respondent only raised two submissions in the appeal. He has relied upon these awards and has cited judgment reported in, Union. pf India v. Nand Kishore supporting his submission that if judgments of the court fixing value of land in same village is the best piece of evidence. It was further laid down in the judgment that sale of land of the very village in question fifteen days prior to Section 4 notification also afford best guide to the value of land. In other words his submissions are that since the land covered in the award is in the proximity of the land under reference in appeal the judgments are the best guide to determine the market value. It is admitted fact. It need not be repeated that the District Judge found after inspection that the land has a building potentiality and it is situated at a distance of one kilometre from Taj Mahal and other famous places i. e. Central Jalma Institute for Leprosy, inauguration of which was done by Dr. Zakir hussain, President of India on 30. 1. 1967. There is also facility of civic amenities. The government also acquired land considering it for Shilpa Gram and the said purpose shows that it has a potentiality of commercial value and is fit for building and residential purposes. The District Judge after elaborate discussion and relying on earlier judgments of District judge which relate to Paper No. 16-C which fixed the price at Rs. 10/- per square yard. Notification was dated 6. 6,1977 and award was passed. on 20. 5. 1981. He also discussed paper No. 17-C. The market price of the land of the same vicinity was Rs. 7. 50 per square yard on 22. 5. 1963. After discussion he came to the conclusion that there is rising trend in the prices and the prices cannot be less than rs. 15/- 'per square yard equivalent to Rs. 41,340/- per Bigha. He also took into consideration the potentially of land.
(7) LEARNED Standing Counsel submitted that the judgments are not best guide and award given by the Collector is reasonable. He further submitted that the judgments relied upon by the District Judge relate to the land situated 3 to 4 kms. away from the plots in question. He has also submitted that the judgments cited by way of additional evidence are also not best guide.
(8) I am unable to agree, with the submissions of the learned Standing Counsel, as his arguments are fallacious. The District Judge has only relied upon the judgments showing the trend of rising prices in the vicinity of three to four kilometres and he certainly can take into consideration the prevailing price of neighboring land to form his objective opinion. The latest award of Shri Siddiqui also give sufficient indication that the' prices are rising and he fixed price @ Rs. 40/- per square yard. ' Taking into consideration the situation of the land and the latest award and exemplar relied upon by the District Judge, I am of the view that the price by all means cannot be less than rs. 25/- per square yard. Even if it is considered a little away from the cantonment area. While assuming the market value the Judge can indulge into reasonable speculation adjudging the compensation of the land and taking all the circumstances into consideration I, fix price of Rs. 25/- per square yard and modify the award of the District Judge of this extent. I see no force in the submission of the learned Standing Counsel for the appellant and reject the same and' accept the submission of' the learned counsel for the claimant/respondent partly and increase the compensation @ Rs. 25/- per square yard.
(9) THE submission regarding rate of interest @ 12% from the date of issuing notice or taking possession whichever is earlier advanced by the learned Standing Counsel is rejected. I am afraid to agree with his submission, Section 23 (1-A) of the Act has been introduced which reads as under :
"23. (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 cent per annum on such market: value for the period commencing on and from the date of the publication of the notification under Section 4, subsection (1), in respect of such land of the date of the award of the Collector or the date of taking possession of the land, whichever is earlier."
(10) IN this case the possession was taken in the year 1965 i. e. before the insertion of section 23 (1-A) of the Act and notification under Section 4 of the Act was issued on" 6. 3. 1980 and the award was passed on 13. 9. 1987 and in the facts and circumstances the Hon'ble Supreme Court in, Special tehsildar (LA), Special Tahsildar (La), P.W.D Schemes, Vijayawada v. M.A Jabbar. has granted 12% interest i. e. from the date of publication of notification under Section 4 of the Act till the date of possession. Possession has already been taken before the Amending Act has come into force.
(11) IT may be mentioned that interest is given generally after the possession is taken and before payment of compensation is made as it is done to make good the loss suffered by a -person. As long as the possession is with the claimants ordinarily interest is not given. In Jain College Trust and Managing Society v. State of Haryana and Ors. 4, it was observed at page 76
"we-are of the view that the claimant is not entitled to the benefit of Section 23- (1-A) of the Act. Award of an amount calculated at the rate of 12% per annum on the market value from the date of publication of the notification under Section 4 of the Act till the date of taking possession of the land. Subject to this modification, the decisions of the courts below are affirmed."This view has also been followed by the decision of court in Union of India v. B. V. Saroja and Ors. . The submission of the learned Counsel for the appellant is not justified. Ruling cited by him is not applicable to the facts of the present case. I am not inclined to interfere regarding the compensation regarding wall. I, therefore, for the reasons recorded modify the award of the District judge to the extent that instead of Rs. 15/-per square yard the price is now fixed at Rs. 25/- per square yard taking into consideration the circumstances mentioned earlier. Since the award has been passed after the enforcement of Land Acquisition (Amendment) Act, 1984 and the amount has been enhanced by the District Judge after the enforcement of the Act so the respondent would be entitled to get the benefit of the provisions of this Act, Regarding payment of interest under section 28 of the. act, respondent would be entitled to get 9% interest on the excess amount from the date of possession till the date of payment and if the payment is not made within one year and then 15% afterwards. The lower court finding regarding payment of interest is modified in the light of grant of excess compensation.
(12) THE appeal of the State is allowed to the extent that rate of 12% interest from the date of notification is not payable as the Land acquisition (Amendment) Act, 68 of 1984 is not retrospective as the notification was issued much before the enforcement of the Act, as discussed above. However, the award was made on 15. 12. 1982 and this date is protected by the Legislature regarding award made between 30. 4. 1982 till the enforcement of the Act which came into force from 24. 9. 1984 under the Land Acquisition (Amendment) Act, 1984. The District Judge has made award a'fter this and the provisions of the Land Acquisition (Amendment) Act, 1984 will apply regarding interest etc. The appeal of the respondent of the cross-objection is allowed. : appeal partly. allowed. Cross objection allowed.
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