ISHWARLAL PREMCHAND SHAH AND ORS.versusSTATE OF GUJARAT AND ORS.

A              ISHWARLAL PREMCHAND SHAH AND ORS.
                                         v.
                       STATE OF GUJARAT AND ORS.

                                MARCH 15, 1996

B               (K. RAMASWAMY AND G.T. NANAVAT!, JJ.]

          Land Acquisition Act, 1894: Sections 4(1), 5-A, 11(2) (As applicable
    in State of Gujarat), 16, 23( 1-A), 23(2) and 28-Fonn NO. 14 presc1ibed
    under Rules.
c          Land Acquisition-Compensation-Solatium and interest-Entitlement
    to-Land acquired for benefit of G.I.D.C.-Agreement betwcm land owners
    and beneficiary-Owners agreeing to accept compensation @ Rs. 22,587 per
    hectare inclusive of solarium and additional benefits payable under the
    Act-Omtention that agrnement not as per Fann No. 14 presoibed under
D   Ru/es-Award passed in tem1s of the agreement-Challenge to the validity of
    award-Claim for solatium, interest and additional benefits-Held in the
    circunistances it cannot be said that the essential requ/renients of section
    11(2) were not complied with-Award passed was not illegal---Fonn No. 14
    would not be relevant in a case where the agreement is between the land-
E   owners and interested pe1wns and beneficiary-in view of the clauses in the
    agreement land-owners held not entitled to the payment by way of solatium,
    interest and additional amount under the provisions of the Act.

          State of Gujarat & Ors. v. Daya Shamji Bhai & Ors., [1995) 5 SCC
    746, applied.
F
         CIVIL APPELLATE JURISDICTION : Civil appeal No. 6896 of
    1996 Etc. Etc.

         From the Judgment and Order dated 10.9.93 of the Gujarat High
    Court in S.C.A. No. 4981 of 1991.
G
          R.F. Nariman, Jatin Jhaveri and H.J. Javeri for the Appellants.

          Dr. N.M. Ghatate, Mrs. H. Wahi, Ms. N. Mukherjee, Ms. Anip
    Sachthey, J.P. Pathak, H. Munshi and C.D. Singh for the Respondents.

H         The following Order of the Court was delivered :
                                      510
             JSHWARLAL PREM CHAND SHAHv. STATE                        511

      Leave granted.                                                        A
      We have heard the counsel on both sides.

       Notification under Section 4(1) of the Land Acquisition Act 1of1894
(for short, the 'Act') was published on August 2, 1984 acquiring the lands
situated in village Sarigam, District Bulsar in Gujarat State for industrial B
purpose. Possession also was taken after dispensing with the enquiry under
Section 5-A. It is not necessary to dilate on the proceedings taken earlier
under Article 226 of the Constitution. Suffice it to state that there was an
agreement between the parties that an award could be made under Section
11(2) of the Act pursuant to which the Land Acquisition Officer on June C
4, 1991 made the award in terms of the agreement. The appellant chal-
lenged the correctness of the award by filing the writ petition which was
dismissed by the High Court by the impugned order dated September 10,
1993. Thus these appeals by special leave.

       This Court by order dated February 28, 1994 issued notice confined D
to the question whether the appellants are entitled to solatium, interest and
additional amount under Sections 23(2), 28 and 23 (1-A) of the Act. The
respondents have filed their counter-affidavit contending that in view of the
agreements entered by the appellants on January 2, 1981 and subsequent
agreement dated March 8, 1985, which have been filed as sample agree- E
ments this Court, the appellants are not entitled to the payment of interest,
solatium and additional amounts under the Act.

       Shri R.F. Nariman, learned senior counsel appearing for the appel-
lants, contended that the award passed by the Collector is not in conformity
with Section 11(2) of the Act in as much as the agreements were not F
executed before the Collector and they were not in the prescribed form.
He drew our attention to Form No. 14, prescribed by the Rules and
submitted that as disclosed by the Form itself, such an agreement has to
be executed by owner of the land in presence of the Land Acquisition
Officer and has to be signed by the Land Acquisition Officer. In the
present case, the agreements executed in 1985 were between the owners of G
the land and GIDC for whose benefit the lands were acquir(d! They were
not signed in presence of the Land Acquisition Officer nor did the Land
Acquisition Officer put his signature thereon. Therefore, the award passed
by the Collector cannot be said to be an award under Section 11(2) of the
Act and, therefore, the appellants are entitled to payment of solatium, H
    512                   SUPREME COURT REPORTS                 (1996] 3 S.C.R.

A interest and additional benefits payable under the Act. We do not find any
    substance in this connection.

        In this case, the agreements were between the owners and the GIDC
  for whose benefit the lands were acquired. Even before the notification
  under Section 4 WdS issued, the owners and the GIDC had entered into an
B agreement whereby the owners had agreed to part with possession of their
  lands so as to enable GIDC to establish Udyog Nagar thereon. Under the
  said agreements, the GIDC was permitted to enjoy continuous possession
  of those lands till the process of acquisition under the Land Acquisition
  Act was to be completed. While entering into these agreements, the owners
C had agreed to accept compensation @ Rs. 6,100 per acre. Thereafter,
  Section 4, notification was published on August 2, 1984. While the proceed-
  ings were pending before the Land Acquisition Officer, the owners and
  GIDC again in the year 1985 entered into separate agreements,
  whereunder the Corporation agreed to pay and the owners agreed to
D accept compensation @ Rs. 22, 857 per hectare inclusive of solatium and
  additional benefits payable under the Act. These agreements d nly signed
  were presented before the Collector. On being satisfied about the voluntary
  nature of the said agreements, the Collector passed an award in terms of
  those agreements. Under these circumstances, it cannot be said that the
  essential requirements of sub-section (2) of Section 11, as applicable in the
E State of Gujarat, was not complied with. Moreover, Form No. 14 as such
  would not be relevant in a case where the agreement is between the owners
  and interested persons on the one hand and the body for which the land
  is being acquired on the other hand. Form No. 14 would apply to a case
  where the owners and the persons interested in the land appear before the
  Collector and express their willingness to accept an agreed amount as
F
  compensation. In such cases, the agreement is required to be executed in
  the prescribed Form No. 14. Therefore, even though in the present case
  the agreements were not in the prescribed form, there being no prescribed
  form for a case like this, the award cannot be said to be illegal or void.

G            The owners have agreed in 1985 as under :
             H   ,
             "This agreement is being done in pursuance of the consent agree-
             ment that has been arrived at on 27,12,1980 between Shri Hitendra
             @ Gautam Prem Shankar Oza of the first part and the Gujarat
H            Industrial Development Corporation of the second part since the
j
                  ISHWARLAL PREMCHAND SHAH v. STATE                          513

             price of the land that has been given under the said agreement has A
             been fixed at . Rs. 22,857 (Rupees twenty two thousand eight
             hundred fifty seven only) per hectare inclusive of solatium and
             additional land compensation by way of its consent price. This
             agreement is thus being done for that limited purpose. The date
             of possession and other terms and conditions mentioned in the B
             agreement done on 27.12.80 shall remain the same."

          It is true that on determination of compensation under sub-section
    (1) for the land acquired, Section 23(2) enjoins to award, in addition to the
    market value, 30% solatium in consideration of compulsory nature of
    acquisition. Equally, the Parliament having taken notice of the inordinate      C
    delay in making the award by the Land Acquisition Officer from the date
    of notification published under Section 4(1) till passing the award under
    Section 11, to off-set the price pegged during the interregnum, Section
    23(1-A) was introduced to award an amount calculated@ 12% per annum
    on such market value, in addition to the market value of the land, for the      D
    period commencing on and from the date of the publication of Section 4(1)
    notification to the date of award of the Collector or date of taking posses-
    sion of the land whichever is earlier. Under Section 28, interest was
    directed to be paid on the excess compensation at the rate specified therein
    from the date of taking possession of the land to the date of deposit into
    court of such excess compensation. These three components are in addition       E
    to the compensation determined under Sub-section (1) of Section 23. They
    intended to operate in different perspectives. One for compulsory acquisi'
    tion, the other for the delay on the part of the Land Acquisition Officer in
    making the award and the third one for deprivation of the enjoyment of
    the land from the date of taking possession till determination of the           F
    compensation. The 3 components are in addition to the determination of
    market value under sub-section ( 1) of Section 23. They are not integral to
    determination of compensation under sub-section (1) of Section 23 but in
    addition to, for the circumstances enumerated hereinbefore. In a private
    sale between a willing vendor and a willing vendee, parties would arrive at
    consensus to pay and receive consolidated consideration which would form        G
    the market value of the land conveyed to the vendee. For public pnrpose,
    compulsory acquisition under the Act gives absolute title under Section 16
    free from all encumbrances. Determination of the compensation would be
    done under Section 23(1) on the basis of market value prevailing as on the
    date of the publication of the notification under Section 4(1). It would,       H
    514                   SUPREME COURT REPORTS                    [1996] 3 S.C.R.

A therefore, be open to the parties to enter into a contract under Section
    11(2), without the necessity to determine compensation under Section
    23(1) and would receive market value at the rates incorporated in the
    contract signed under Section 11(2) in which event the award need not be
    in Form 14.

B         This Court in State of Gujarat & Ors. v. Daya Shamji Bhai & Ors.,
    [1995] 5 SCC 746 had considered the similar contentions and held that once
    the parties have agreed under Section 11(2) of the Act, the Land Acquisi-
    tion Officer has power nnder Section 11(2) to pass the award in terms
    thereof and that the award need not contain payment of interest, solatium
C and additional amount unless it is also part of the contract between the
    parties. The same ratio applies to the facts in this case. In view of the above
    clauses in the agreements the appellants are not entitled to the payment of
    additional amounts by way of solatium, interest and additional amount
    under the provisions of the Act.

D        The appeals are accordingly dismissed, but in the circumstances,
    without costs.

    T.NA.                                                     Appeals dismissed.