Holding

Enhanced solatium of 30% applies to awards made between 30 April 1982 and 24 September 1984, and the additional interest under Section 23(1‑A) applies only where no award was made before 30 April 1982, with interest to be fixed at 6% per annum.

Summary

The Hoshiarpur Improvement Trust sought higher compensation benefits after the Land Acquisition (Amendment) Act, 1984 amended the Land Acquisition Act, 1894. The Tribunal had originally awarded 15% solatium and 6% interest, but later modified the award to 30% solatium and 12% interest under Sections 23(2) and 23(1‑A). The Supreme Court examined whether the enhanced solatium and additional interest applied to awards made before, on, or after 30 April 1982. It held that the 30% solatium applies to awards made between 30 April 1982 and 24 September 1984, and that the additional interest under Section 23(1‑A) is available only where no award was made before 30 April 1982, thus excluding the 1979 award but including the awards dated 30 April 1982. The Court also affirmed the validity of interest on excess compensation under Section 28, but reduced the interest rate to 6% per annum. Consequently, the appeal in SL No. 9434/1989 was allowed in part, while the connected appeals were dismissed.

Issues considered

The applicability of the enhanced solatium of 30% under Section 23(2) to awards made between 30 April 1982 and 24 September 1984.
The applicability of the additional interest benefit under Section 23(1‑A) to awards where the Collector had already made an award before 30 April 1982.
The validity of interest on excess compensation under Section 28 as amended.
The appropriate rate of interest (6% vs 12%) to be awarded.

Legislation cited

Land Acquisition Act, 1894s. 23(1-A), s. 23(2), s. 28
Land Acquisition (Amendment) Act, 1984s. 16, s. 30, s. 30(1)(a)
Punjab Town Improvement Act, 1922s. 42

Subjects

Land acquisitionSolatiumInterestAmendment ActTransitional provisionsCompensationSupreme Court

Judgment

HOSHIARPUR IMPROVEMENT TRUST
A v.
PRESIDENT LAND ACQUISITION TRIBUNAL
AND. OTHERS.
~--;....__-

APRIL 19, 1990
B
[KULDIP SINGH AND N.M. KASLIWAL. JJ.]

Land Acquisition Act, 1894 (As amended by Act 68 of J'J34):
Section 23( 1-A)-Additional Benefit of interest @ 12%-Entitlement -.
to--Pendency of acquisition proceedings before Collector on 30th April,
1982 is essential-Benefit is inapplicable to awards made before 30th
C April, 1982. ·~
Section 23(2)-Enhanced solatium @ 30%-Held applicable to
awards made by Collector or Court between 30th April, 1982 and 24th
September, 1984. .:i...
D
The lands of the respondents were acquired for a scheme of the
Appellant-Improvement Trust. The awards for compensation were
made by the Collector on 6th January, 1979 and 30th April, 1982 and
the reference was disposed of by the Land Acquisition Tribunal by its
award dated 28th March, 1983 and 29th August, 1985 by granting
E solatium @ 15% on compensation and interest @ 6% on excess
compensation.

In view of the Land Acquisition (Amendment) Act, 1984 the
landowner.claimants made an application to the Tribanal seeking
enban~ed solatium and interest under the amended provisions of Land
"' Acquisition Act, 1894. The Tribunal allowed the application by grant-
ing higher solatium, additional benefit of interest 1111d interest on excess ~
compensation.

The writ petitions filed by the Appellant-Improvement Trust
against the decision of'tbe Tribunal were dismissed.
G
Hence these appeals by the Improvement Trust.

Allowing the appeal in part (C.A. No. 1894 of 1990) and dis-
missing the connected appeals, this Court, _,,
H HELD: 1. The benefit of higher solatium @ 341% under secti9n

526
H.l.T. v.. LAND ACQUISITION 527

23(2) of the Land Acquisition Act, 1894 is applicable to cases of awards
made by the Collector or the Court between 30th April, 1982 and 24th
A•
September, 1984. In the. instant case since the awards were made bet-
ween the aforesaid dates the claimants have been rightly held entitled to
enhanced solatinm. [530EJ

Union of India v. Raghubir Singh, [1989] 2 SCC 754! followed. B

2. Section 30(1)(a) of the Land Acquisition (AmeDdment) Act,
1984 clearly provides that the additional amount of interest provided
under Section 23(1-A) of the Land• Acquisition Act, 1894.shall be applic-
able to acquisition proceedings pending before the Collector as on 30tb
April, 1982 in which he has not made the award before that date. If the
Collector has made the award before that date then additional amount c
cannot be awarded. [531E]

2.1 The claimant in the Appeal (No. 1894 of 1990) is not entitled
to additional benefit of interest under Section 23(1-A) because the
award in this case was made long before 30th April, 1982. But the D
claimant in the connected appeals are entitled to this benefit since in
their cases the awards were made on 30th April, 1982 itself. l531F; 532A]

Union of India v. Raghubir Singh, [1989] 2 SCC 745, explained
-.I.. and held inapplicable.
E
Union of India v. Filip Tiago De Gama, J. T. 1989 4 S.C. 529,
followed.

3. The award uf interest on excess compensation is valid since the
.claimants were entitled to the same under section 211 as it stood
amended by the Amending Act. [530F] F

4. The order of the High Court and the Land Acquisition Tn'bunal
in Civil Appeal No. 1894 of 1990 is therefore modified, only to the
extent that interest shall be allowed at the rate of 6% per annum instead
of 12% per annum. The other additional benefits granted by the Tri-
bunal shall remain in tact. [532B-C] G

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
-...-. 1894, 1895 & 1896 of 1990.
'
From the Judgment and Order dated 9.2.1989 of the Punjab &
HaryanaHighCourtinCivilW.P.Nos.1778, 1776& 1777of1989. H
528 SUPREME COURT REPORTS U990) 2 S.C.R.

A Balbir Singh Wasu, N.S. Das Bablfor the Appellant.

Har Dev Singh and Ms. Madhu Moolchandani for the .,_,.___~
Respondents.

The Judgment of the Court was delivered by
B
KASLIWAL, J. Special leave granted.

All these petitions by Special leave are disposed of by one single
order as identical questions of law are involved and they are directed

-
against the similar order of the High Court dated 9th February, 1989.
c
Short controversy raised in these cases is regarding the grant of
benefits under amended Sections 23(1-A), 23(2) and 28 of the Land
Acquisition Act, 1894 as amended by the Land Acquisition (Amend-
ment) Act, 1984 (hereinafter referred to as the Amending Act). The
D President Land Acquisition Tribunal, Hoshiarpur (District Court)
initially granted solatium at 15% on the compensation and interest at
6% per annum on the additional amount of compensation till the date
of payment. The claimants submitted an application for modification
of the award as regards solatium and interest in view of the Amending
Act which came into force on 24th September, 1984. The Land
Acquisition Tribunal granted benefit of the Amending Act and
E modified the award by passing the following operative order which is
subject matter of challenge in Special Leave Petition No. 9434 of 1989.
Similar orders have been passed in other two cases also.

"Accordingly, I modify the award to the extent that
solatium shall be payable at the rate of 30% instead of 15%
F granted earlier. Similarly, interest at the rate of 12% per
annum is granted from the date of notification under Sec-
tion 42 of the Punjab Town Improvement Act, 1922, till the
date of award of the Collector, the date of possession of the
land which ever is earlier. Further interest is awarded at the
rate of 9% per annum on the enhanced amount from the
G date of delivery of possession till the expiry of one year.
Thereafter interest is awarded at the rate of 15% per
annum from the date of expiry of period of one year till
payment. The applicant shall be entitled to recover the
solatium and interest as per the modification indica\ed
above".
H
H.J.T. v. LAND ACQUISITION [KASLIWAJ., J.] 529

Aggrieved against the above order, the Hoshiarpur Improve·
A
ment Trust has come before this Court.

In order to decide the controversy, it would be necessary to
mention some important dates in each of the above cases.

In Special Leave Petition No. 9434 of 1989 the award was given B
by the Land Acquisition Collector on 6th January, 1979. On a refe-
rence the award was given by the President Land Acquisition Tri-
bunal, Hoshiarpur on 28th March, 1983. The award was modified by
the President Land Acquisition Tribunal by order dated 29th August,
1988. The High Court dismissed the Writ Petition filed by the
Improvement Trust on 9th February, 1989.
c
In Special Leave Petition No. 9521of1989 the award was given
by the Land Acquisition Collector on 30th April, 1982. On a reference
the award was given by the President L~nd Acquisition Tribunal,
Hoshiarpur on 29th August, 1985. The President Lano Acquisition
Tribunal modified the award by order dated 29th August, 1988. The D
Writ Petition filed by the Improvement Trust was dismissed by the
High Court on 9th February, 1989.

In Special Leave Petitiion No. 10130 of 1989 the award was given
by the Land Acquisition Collector on 30th April, 1982. On a reference
the award was given by the President Land Acquisition Tribunal, E
Hoshiarpur on 29th August, 1985. The award was modified by the
President Land Acquisition Tribunal by order dated 14th September,
1988. Writ Petition filed by the Improvement Trust was dismissed by
the High Court on 9th February, 1989.

Learned Counsel appearing on behalf of the Improvement Trust F
contended that no benefit could have b~en given under Section
23(1-A) which was inserted by the Amendjng Act. It was contended
that in a recent decision given by this Court iJl. Union of India & Ors, v.
Mr. Filip Tiago De Gama of Vedem Vasco De Gama, IT 1989 4 SC 529
it has been held that the additional amount under Sec. 23(1-A) can
only be allowed in those cases where proceedings for the acquisition of G
any land under the Principal Act were pending on the 30th day of
April, 1982 (the date of introduction of the .l.,and Acquisition (Amend-
ment) Bill 1982 in the House of People), in which no award has been
made by the Collector before that date. If the Collector has made the
.award before that date then, the additional amount cannot be
awarded. Thus it was contended that the additional benefit of interest H
530 SUPREME COURT REPORTS [1990) 2 S.C.R.

at the rate of 12% per annum from the date of notification till the
A award made by the Collector or the date of taking over possession
which ever is earlier, is liable to be set aside. · -. >--·--

In order to appreciate the argument advanced by the Learned
counsel appearing for the Improvement Trust, it would be necessary 'to
B give a background of some important events and decisions having a
bearing on the question. The Land Acquisition Act, 1894 (hereinafter
referred to as the Principal Act) was sought to be amended and in this
regard on 30th April, 1982, the Land Acquisition (Amendment) Bill,
1982 was introduced in Parliament. On 24th September, 1984 it
became law as the Land Acquisition (Amendment) Act, 68 of 1984,
when it received assent of the President. Before the amendment, Sec-
C tion 23(2) of the Principal Act provided for solatium at 15% on the
market value, in consideration of the compulsory nature of the acquisi-
tion. After amendment by Act 68 of 1984 solatium was raised to 30%
on the market value under Section 23(2). A Constitution Bench in
Union of India & Another v. Raghubir Singh (dead) by L.rs. etc.,
D [ 1989] 2 SCC 754, overruled; Bhag Singh v. Union Territory of
Chandigarh, [1985) 3 SCC 737 and State of Punjab v. Mohinder Singh,
[ 1986] 1 sec 365 held that the higher solatium at the rate of 30%
would be given in cases of awards made by the Collector or the Court
between 30th April, 1982 and 24th September, 1934. In the cases
before us the claimants have been rightly held entitled to solatium at
E 30% applying the ratio in the case of Union of India & Ors. v.
Raghubir Singh, (supra).

So far as the award of interest at the rate of 9% for the first year
from the date of taking possession and 15% for the subsequent years is
concerned, the claimants have been rightly held entitled to the same
F under Section 28 as stood amended by the Amending Act.

Now, the only controversy which remains to be considered is
with regard to the additional benefit allowed by way of rate of interest
at 12% per annum from the date of notification issued under Section
42 of the Punjab Town Improvement Act, 1922, till the date of award
G of the Collector or the date of possession of the land which ever is
earlier. It is important to note that in the case of Uniun of India v.
Raghubir Singh, (supra) the above question was neither called for
consideration nor decided. In Union of India & Ors. v. Mr. Filip Tiago
De Gama of Vedem Vasco De Gama, (supra) the above question
directly came up for consideration before this Court. It was held that
H the above benefit has been provided under the amended Sections
23( 1-A) & 23(2).
H.!.T. v. LAND ACQUISITION IKASLIWAL, J.} 531

The Legislature has given new starting point for operation
of Section 23(1-A) for certain cases and it would be A
__ _.....__~

determind from Section 3U(l)(a) & (b) of the Transitional
Provisions which read as follows: ·

Section 30: Transitional Provisions:
B
(1) The provision of Sub-section (1-A) of Section 23 of the
Principal Act, as inserted by clause (a) of Section 16 of this Act,
~ shall apply, and shall be deemed to have applied, also to, and in
relation to:
~
(a) every proceeding for the acquisition of any land under the
Principal Act pending on the 30th day of April, 1982 (the date of c
introduction of th-e 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 D
principal Act commenced after that date, whether or not an
award has been made by the Collector before the date of com-
mencement of this Act".

It was observed in the above case that Section 30(l)(a) provides
that additional amount provided under Sec. 23(l)(a) shall be applic- E
able to acquisition proceedings pending before the C~llector as on
30th April, 1982 in which he has not made the award before that date.
If the Collector has made the award before that date then that addi-
tional amount cannot be awarded. We agree with the view taken in the
above case. Thus applying the above principle in the cases in hand
..>-- before us it would be clear that in Special Leave Petition No. 9434 of F
1989 the award was made by the Land Acquisition Collector on 6th
'
)...
January, 1979 i.e. Jong before 30th April, 1982 and as such the clai-
I
mant in the above case is not entitled to the benefit of Section 23(1-A)
as inserted in the Principle Act by the Amending Act. So far as the
other two Special Leave Petitions, namely, 9521/89 and 10130/89 are
concerned, the awards have been made by the Land Acquisition Col- G
Jector on 30th April, 1982 itself but not before that date. Section 30 the
Transitional Provisions clearly provide that the provisions of Sub-
,
section (1-A) of Section 23 of the Principle Act, as inserted by Clause
~
(a) of Section 16 of this Act shall apply to every proceeding for the
acquisition of any land under the Principle Act pending on 30th day of
April, 1982 in which no award has been made by the Collector before H
532 SUPREME COURT REPORTS [1990] 2 S.C.R.

A that date. In the above two cases the award has not been made by the
Collector before 30th day of April, 1982 but made on 30th April, 1982
itself and as such the claimants in these two cases become entitled to
the benefit of Section 23(1-A). - ----·--
As a result of the above discussion the civil appeals in S.L.P. (C)
B Nos. 9521of1989 & 10130 of 1989 stand dismissed. So far as appeal in
Special Leave Petition No. 9434 of 1989 is concerned, it is allowed in
part and the order of the High Court as well as that of the President
Land Acquisition Tribunal is modified only to the extent that interest
shall be allowed at the rate of 6% per annum instead of 12% per
annum from the date of Notification under Section 42 of the Punjab
c Town Improvement Act, till the date of award of the Collector or the
date of possession of the land which ever is earlier. So far as other
additional benefits granted by the President Land Acquisition Tri-
bunal are concerned, the same would remain in-tact. In the facts and
circumstances of the case there would be no order as to costs.

T.N.A. Appeal allowed partly.