Holding

Loss of earnings after acquisition and expenses arising from shifting to an insecure location are not compensable under clauses fourthly and fifthly of Section 23(1); only reasonable transit expenses are recoverable, and the appeal is dismissed.

Summary

The Supreme Court heard an appeal by Jaspal Singh and another against the Union of India concerning compensation awarded under the Land Acquisition Act, 1894 for land acquired for a cantonment extension in Amritsar. The appellants claimed loss of earnings from their poultry business under clause fourthly of Section 23(1) and transport expenses and costs of relocating to an insecure site under clause fifthly. The Court held that clause fourthly only covers damage sustained at the time of possession and does not allow compensation for loss of business incurred after acquisition, and that clause fifthly is limited to reasonable transit expenses, not compensation for change of business or insecure location. Consequently, the Court found no error in the High Court’s reduction of the award to a modest amount for a short period and dismissed the appeal. The decision reaffirmed the limited scope of compensation components under Section 23(1).

Issues considered

Whether loss of earnings due to displacement after land acquisition can be compensated under clause fourthly of Section 23(1) of the Land Acquisition Act, 1894.
Whether transport and relocation expenses incurred because the claimant had to shift his poultry business to an insecure place are compensable under clause fifthly of Section 23(1).
Whether compensation for loss of business should be determined for the entire period until the claimant re‑establishes his enterprise.

Legislation cited

Land Acquisition Act, 1894s. 11, s. 18, s. 23(1), s. 4(1)

Subjects

Land acquisitionCompensationSection 23Loss of profitPoultry farmResettlementTransport expensesClause fourthlyClause fifthly

Judgment

A JASPAL SINGH AND ANR.
v.
UNION OF INDIA AND ANR.

DECEMBER 18, 1996

B (K. RAMASWAMY AND G.B. PATTANAIK, JJ.]

LandAcquisitionAct, 1894: Section 23(1) Clause Fourthly and Fifthly.

Land Acquisition-Compensation-Principle for detennination of-Ac-
C quisition of large track of land for extension of cantonm.ent in Amrit-
sal"-Compensation for loss of profits to appellant's poultry-The mere fact~
that the claimant was displaced on account of acquisition and could not
remscitate himself by establishing a poultry f ann business anywhere, cannot
be a ground under clause fourthly of Section 23(1) to detennine the compen-
sation on that basis-His loss of earnings till date of resettlement should not
D be detennined in that behalf-Clause fifthly is only consequence of acquisi-
tion of the land by the Collector-Transport charges incurred for the displace-
ment and canying the material due to displacement are required to be
awarded, in addition to the compensation detennined-But the mere fact that
the claimant happened to secure alternative land at afar off place and that
E too said to be an insecure place, cannot be a ground to contend that he is
also entitled to compensation under clause fifthly due to change of business
and setting up of the business in an insecure place.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1741 of
1986.
F
From the Judgment and Order dated 15.11.8~ of the Punjab &
Haryana High Court in L.P. A. No. 1056 of 1985.

Raju Ramachandran and Sudarsh Menon for the Appellants.

G Mrs. Shashi Kiran for C.V.S. Rao for the Respondents.

The following Order of the Court was delivered :
' '
This appeal by special leave arises from the judgment and order,
made on November 15, 1985 by the Punjab & Haryana High Court dis-
H missing in limine LPA No. 1356 by confirming the judgment of the learned
368
JASPALSINGHv. U.O.I. 369

- single Judge dated November 9, 1979 in RFA No. 779/75.

Notification under Section 4(1) of the Land Acquisition Act, 1894 (1
A

of 1894) (for short, the 'Act') was published on July 11, 1977 acquiring a
large track of land including the land in question for extension of ·the
cantonment in Amritsar. The award under Section 11 was made and on
reference under Section 18 of the Act came to be filed in the civil Court
B
on June 15, 1983 which determined the compensation for loss of profits to
the appellant's poultry at Rs. 6,54,637. Since the Assistant Director of
Poultry Farm had notified to the Land acquisition Officer that the rate of
return per bird was at Rs. 1.38 per month and there were 2500 birds in the
poultry farm, the Additional District Judge applying 15 years' multiplier, c
came to determine the above amount. In writ petition, the learned single
Judge of the High Court reversed the said finding and held that the
appellant at best would be entitled to Rs. 31,050 for loss of business for a
reasonable period of 5 and 6 months. That was confirmed by the Division
Bench. Thus this appeal by special leave. This appeal, on behalf of the
D
respondent, seems to have been filed due to which we need not go into
merits to the extent upheld by the High Court.

Shri Raju Ramachandran, learned senior COlll).sel appearing for the
____,_ appellant, contends that under clause fourthly of sub-section (1) of Section
23 of the Act, if the damage sustained by the appellant, at the time of the E
Collector' taking possession of the land, by reason of the acquisition is such
as is injuriously affecting his other property, movable or immovable, in any
other manner or his earnings, the appellant is entitled to the compensation.
Equally, compensation is claimed under clause fifthly, since as a result of
the acquisition, he was made to travel 5 Kms. from the border of the State F
to Pakistan and could secure the lanp in an insecure place as a result of
the search and held to shift his business to other place. Taking all these
factors into consideration, the amount awarded in the award by the civil

- Court cannot be said to be unjustifiable or arbitrary warranting inter-
ference by the High Court. We find no force in the contention.
G
Sub-section (1) of Section 23 itself envisages that in determining the
'. amount of compensation to be awarded for land acquired under the Act,
the Court shall take into consideration the loss of earnings as a component
for the acquisition of the property. The mere fact that the claimant was
displaced on account of acquisition and could not resuscitate himself by H
370 SUPREME COURT REPORTS[1996) SUPP.10 S.C.R.

A establishing a poultry farm business anywhere, cannot be a ground under
clause fourthly of Section 23(1) to determine the compensation on that
basis and his loss of earnings till date of resettlement should not be
determined in that behalf. We find that it is difficult to give such a
construction to clause forthly of Section 23(1). What it contemplates of is
that as a consequence of acquisition, if any damage is sustained by the
B
claimant or interested person at the tiine of Collector's taking possession
of the land injuriously affecting the other property, movable or immovable,
in any other manner or his earning from the property, the Collector is
required to determine the compensation as is available on the date when
the compensation is awarded. The mere fact that after the acquisition, the
c interested person or claimant has quickly rehabilitated himself or set up
business once over, or could not start his business lately would not be a
ground to increase the compensation for the loss of business as a com-
ponent of determination of the compensatio~ on "loss of profit".

Equally, clause fifthly is only consequence of acquisition of the land
D by the Collector. If the person is compelled to change his residence or
place of business by reason of the acquisition, reasonable transit expenses
incidental to such change, in other words, transport charges incurred for
the displacement and carrying the material due to displacement are re-
quired to b~ awarded, in addition to the compensation determined. But _,_,
E the mere fact that the claimant happened to secure alternative land at a
far off place and that too said to be an insecure place, even if it is assumed
to be so, cannot be a ground to contend that he is also entitled to
compensation under clause fifthly due to change of business and setting up
of the business in an insecure place. Under these circumstances, the
learned single Judge perhaps may be right in granting the amount only for
F
a reasonable period of 6 to 7 months on the facts.in this case. We are not
expressing any concluded opinion on it. But it cannot be laid as a principle
of law that loss of business till the Claimant is resuscitated in his business
in securing a place and the expenses incurred in that behalf also should ...
always be a component of the determination of the compensation under.
G Section 23(1).

,-
The appeal is accordingly dismissed. No costs. (

T.N.A. Appeal dismissed.