Holding

The amendment to Sections 25 and 28 of the Land Acquisition Act, 1894 cannot be applied retrospectively; compensation cannot exceed the amount claimed and interest is limited to 6% per annum.

Summary

The Krishi Utpadan Mandi Samiti acquired land under the Land Acquisition Act, 1894 and an award dated 27‑12‑1977 fixed market value at Rs 3 per square yard with 15% solatium and 6% interest. The landowners filed a reference under Section 18, and the High Court on appeal enhanced the compensation to Rs 11 per square yard and awarded interest at 9% (rising to 15% after one year). The Samiti contended that the High Court could not exceed the claim or apply the post‑1984 amendment provisions to a pre‑amendment award. The Supreme Court held that the pre‑amendment Section 25 is substantive and limits compensation to the amount claimed, and that the amendment to Sections 25 and 28 cannot be applied retrospectively. Consequently, the compensation could be enhanced only up to the claim of Rs 10,000 per bigha and interest is limited to 6% per annum. The appeal was allowed, setting aside the High Court’s excess award and interest order, with costs awarded.

Issues considered

Whether the High Court could award compensation exceeding the amount claimed by the landowners under pre‑amendment Section 25 of the Land Acquisition Act.
Whether the High Court could award interest at 9% and 15% under the amended Section 28 for an award made before the 1984 amendment.
Whether Section 25 of the Act is a procedural right or a substantive right for the purpose of applying the amendment retrospectively.

Legislation cited

Land Acquisition Act, 1894s. 25, s. 28
Land Acquisition (Amendment) Act, 1984s. 25, s. 28

Subjects

Land acquisitionCompensationSection 25Section 28Amendment retrospective effectInterest rateProcedural vs substantive right

Judgment

KRISHI UTPADAN MANDI SAMIT! A
v.
KANHAIY A LAL AND ORS.

SEPTEMBER 29, 2000

[A.P. MISRA AND SYED SHAH MOHAMMED QUADRI, JJ.] B

Land Laws:

- Land Acquisition Act, 1894: Sections 25 and 28 (as they stood prior
to amendment by Act 68 of 1984).

Acquisition of /and-Award given, and proceedings concluded, prior
to amendment Act-Benefits of amended provision-Grant of-Held: High
c

Court or Supreme Court cannot grant benefit of amended provisions in
respect of awards given prior to amendment-Compensation also cannot
exceed the amount claimed and interest is limited to 6% per annum-Hence,
D
High Court erred in (i) enhancing the compensation from Rs. 3 per Sq. Yd
to Rs. 11 per Sq. Yd and (ii) granting of interest at 9% per annum to be
increased to 15% if increased amount of compensation is not paid within one
year-However, enhancement of compensation to the extent of Rs. 10,000 per
bigha, valid E
Sectior1 25-Nature of provision-Held, is substantive-Hence,
awarding, curtailing, restricting or adding right to compensation not
retrospective so as to make it applicable to concluded proceedings prior to
amendment.
F
The respondent's lands were acquired by the appellant-Samiti under the
Land Acquisition Act, 1894 and award was made by the Special Land
Acquisition Officer on 27-12-1977. On a reference under Section 18 of the
Act market value @ Rs. 3 per Sq. Yd. was fixed with solatium at 15% and
interest at 6% per annum on 28.2.1981. On appeal, High Court enhanced
the rate of compensation from Rs. 3 per Sq. Yd. to Rs. 11 per Sq. Yd. The G

- appellant-Samiti filed an appeal before the High Court and the respondent-
landowners filed cross-objections.

The High Court enhanced the rate of compensation from Rs. 3 per Sq.
Yd. to Rs. 11 per Sq. Yd. The High Court also granted interest as per amended
H
.....
/
531
532 SUPREME COURT REPORTS [2000] SUPP. 3 S.C.R.

A Section 28 of the Act @ 9% per annum from the date on which possession of
land was taken. The High Court further held that if the exce~s amount was
paid after the expiry of a period of one year the interest would be 15% per
annum. Hence this appeal.

On behalf of the appellant it was contended that the High Court should
B not have enhanced the compensation over and above what was claimed by the
landowners by applying the amended Sections 25 and 28 of the Act.

On behalf of the respondents it was contended that the compensation
awarded by the Court under Section 25 was only a procedural right and not
C a substantive right and, therefore, the Amending Act would be applicable in
both computing the compensation and the interest as per the Amending Act.

The following questions arose before this Court :-

(1) Whether the High Court could at all have awarded the compensation
D exceeding the claim made by the owners in the reference.

(2) Whether the High Court was right in awarding interest @ 9% and
15% to the respondents-landowners in a case where the award was rendered
on 27.12.1977 and the reference order was also passed on 28.2.1981.

Allowing the appeal and dismissing the petition, the Court
E
HELD : 1.1. Section 25 of the Land Acquisition Act, 1894 before its
substitution by Act 68 of 1984, mandated the court not to award compensation
exceeding the amount so claimed by the landowners and not to be less than
the amount awarded by the Collector. This very clearly limits awarding of
F compensation within the amount claimed; On the facts of the present case it
is not in dispute that the award itself was given on 27.12.1977 and even
pi:-oceedings pursuant to referring order were concluded on 28.2.1981 i.e.
much prior to the aforesaid Amending Act. Thus, on the facts of this case it
is the unamended Section 25 which is applicable and not the amended Section.
In view of this the peripheral limitation on the court awarding the compensation
G would equally apply to the High Court exercising its power as the first appellate
court. Thus, on the facts of this case compensation cannot exceed what is
claimed. [536-G-H; 537-C]

Gobardhan Mahto ,. State of Bihar, [1979) 4 SCC 330, relied on.

H 1.2. High Court committed error in enhancing the compensation from
KRISHI UTPADAN MANDI SAMIT! v. KANHAIY A LAL 533
'
Rs. 3 per Sq. Yd. to Rs. 11 per Sq. Yd. The enhancement could only be to the A
extent the respondents-landowners claimed. It is also not in dispute that the
claim by the landowners was Rs. 10,000 per Bigha. Hence, though the
enhancement to Rs. 11 per Sq. Yd. is not sustainable yet enhancement of
compensation to the exterit of Rs. 10,000 per Bigha is held to be valid. [537-DJ

2.1. The only difference on the structure of Section 28 is, prior to the B
Land Acquisition (Amendment) Act, 1984 (Act No. 68of1984), the interest
rate was 6% instead of 9% and the proviso did not exist If unamended Section
is applicable the rate of interest would only be 6% per annum and further
interest @ 15% per annum as provided though the proviso would not be
applicable. [538-B) C
2.2. The benefit of amended provisions would not apply and cannot be
granted either by the High Court or the Supreme Court in respect of awards
made by the Collector or court prior to 30.4.1982. [538-F]

Union of India v. Raghubir Singh (Dead), [1989) 2 SCC 754 and Jose D
Da Costa v. Bascora Sadasiva Sinai Narcornim, [1976] 2 SCC 917, relied
on.

- Bhag Singh v. Union Territory of Chandigarh, AIR (1985) SC 1576,
held overruled by (1989) 2 sec 754.
E
Union of India v. Zora Singh, [1992) 1 SCC 673, referred to.

3. The question is, whether Section 25 of the Act, would be said to be a
procedural right and not a substantive right. The submission that Section 25
merely refers to how compensation is to be determined and what matters are
to be neglected in determining the compensation in the background, and is F
merely procedural, has to be rejected. Section 25 deals wit~ the amount of
compensation to be awarded by the Court. It mandates the Court that such
compensation shall not be less than the amount awarded by the Collector under
Section 11. Awarding of compensation, curtailing, restricting or adding right
to the compensation can never be said to be procedural. The language of this G
Section clearly reveals, it is substantive in nature, hence it cannot be held to
be retrospective as to make the Amending Act applicable. (539-G-H; 540-A-B]

K.S. Paripoornan v. State of Kera/a, [1994) 5 SCC 593; Jose Da Costa
v. Bascora Sadasiva Sinai Narcornim, [1976) 2 SCC 917 and Mir Fazee/ath
Hussain v. Special Deputy Collector, Land Acquisition, Hyderabad, [1995] 3 H
534 SUPREME COURT REPORTS [2000] SUPP. 3 S.C.R.

A sec 20s, referred to.
4. On the facts of the present case interest admissible to the respondent-
claimant would only be 6% as per unamended provision. Thus, the High Court
granting interest@ 9% and 15% under the proviso of the amended Section
cannot be sustained. Accordingly, that part of the High Court order which
B enhanced the compensation to the respondent-claimant over and above what
was claimed is set aside as well as the award of compensation with reference
to the interest at 9% and 15% respectively. Inten.;;t admissible to the
claimant would be 6%. (540-E]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 13293of1996.
c
From the Judgment and Order dated 15.4.93 of the Allahabad High Court
in F.A. No. 250of1981.

WITH

D Review Petition (C) No. 33 of 1995

(Under Order 40 Rule l of the Supreme Court Rules Read with Article
• 137 of the Constitution of India)

IN
E Special Leave Petition (C) No. 12623of1993

From the Judgment and Order dated 15.4.93 of the Allahabad High Court
in F.A. No. 386of1983.

E.C. Agrawala for the Appellant/Petitioner.
F
S.N. Bhat for the Respondents.

The Judgment of the Court was delivered by

MISRA, J. This appeal raises two questions:
G
(A) Whether the High Court could at all have awarded the compensation
exceeding the claim made by the owners in the reference. The claim being Rs.
10,000 per Bigha while the High Court awarded @ Rs. 11 per sq. yd.

(B) Whether the High Court was right in awarding interest @ 9% and
H 15% to the respondent-land owners in a case where the award was rendered
KRIS HI UTPADAN MANDI SAMITI v. KANHAIYA LAL [MISRA, J.] 535
on 27.12.77 and the reference order was also passed on 28.2.1981. A
In order to appreciate the controversy we are hereunder giving essential
matrix of facts. The appellant desiring to establish mandi and its office complex,
sent the proposal to the Special Land Acquisition Officer in which acquisition
of certain compact land falling in villages, namely, Sangrampur and Kasba
Khair both in Tehsil and Pargana District, Aligarh. Accordingly a notification B
under Section 4(1) of the Land Acquisition Act was published on 28.5.1976.
Invoking the urgency clause under Section 17(1) possession of the land was
taken on 28.8.1976. Award was made by the said Special Land Acquisition
Officer on 27.12.1977. By this he awarded the market value of the land, as
agricultural land @Rs. SI 59 per acre, having 'Parata' rate of Rs. 4.43 per acre. C
The respondent-land owner preferred reference under Section 18 which
concluded by an award dated 28.2. I 981 under which market value @ Rs. 3 per
square yard was fixed with solatium at I 5% and interest at 6% per annum.
Aggrieved by this the appellant filed an appeal in the High Court for restoration
of the order passed by the Special Land Acquisition Officer while respondent-
land owner preferred cross-objection for further enhancement of the D
'compensation. The appellant raised three questions before the High Court:

(1) The reference application moved by the respondent-land owners
was beyond the period of limitation.

(2) The reference application moved under Section 18 of the Act was E
non-maintainable as several persons, having separate and distinct
interest, had joined together therein.

(3) The market value determined by the Special Land Acquisition
Officer was just and adequate and the reference court ought not to
have enhanced compensation. F
As against this respondent-land owners in their cross-objections sought
for a higher rate of market value and assailed the impugned order on the
ground that the assessment of market value was on much lower side. The
High Court on the first question raised, held that the reference was filed
within the period of limitation and on second question held that the reference G
was not incompetent because of several persons having joined. On third
question read with cross-objections of the respondent-land owners enhanced
the rate of compensation from Rs. 3 per square yard to Rs. I I per square yard.

Now, we proceed to take up the questions raised by the appellant.
Submission with reference to the first question is, in view of the Section 25 H
536 SUPREME COURT REPORTS [2000] SUPP. 3 S.C.R.

A as it stood then, the High Court should not have enhanced the compensation
over and above what is claimed by the land owners.

It is relevant to quote the then existing Section 25 under the aforesaid
Act which is quoted hereunder: ·

B "25. Rules as to amount of compensation-

(l) When the applicant has made a claim to compensation, pursuant
to any notice given under Section 9, the amount awarded to him by
the Court shall not exceed the amount so claimed or be less than the
amount awarded by the Collector under Section 11.
c
(2) When the applicant has refused to make such claim or has omitted
sufficient reason (to be allowed by the judge) to make such claim, the
amount awarded by the Court shall in no case exceed the amount
awarded by the Collector.

D (3) When the applicant has omitted for a sufficient reason (to be
<tilowed by the judge) to make such claim, the amount awarded to him· /
by the Court shaII not be less than, and may exceed, the amount
awarded by the Collector." {Emphasis supplied}

The aforesaid Section 25 was substituted by Act No. 68 of 1984 which
E is recorded hereunder:

"25. Amount of compensation by Court not to be lower than the
amount awarded by the Collector-The amount of compensation
awarded by the Court shaII not be less than the amount awarded by
the Collector under Section 11."
F
Section 25 before its substitution by Act 68 of 1984, mandated the court
not to award compensation exceeding the amount so claimed by the land
owners and not to be less than the z.rnount awarded by the Collector. This
very clearly limits awarding of compensation within the amount claimed. On
G the facts of the present case it is not in dispute the award itself was given
on 27.12.1977 and even proceeding pursuant to referring order, was concluded
on 28.2.1981, i.e., much prior to the aforesaid Amending Act. Thus, on the
facts of this case it is unamended Section 25 to be applicable and not the
amended section. In view of this the peripheral limitation on the court awarding
the compensation, would equally apply to the High Court exercising its power
H as the first appellate court. The case of Gobardhan Mahto. v. State of Bihar,
KRISHI UTPADAN MANDI SAMITI v. KANHAIYA LAL [MISRA, J.] 537
[1979] 4 SCC 330, was also a case in which unamended Section 25 was A
applicable. The Court held:

"The short answer to this contention is to be found in the
provisions of Section 25 of the Land Acquisition Act. By sub-section
I of that section, when an applicant makes a claim to compensation
pursuant to a notice given to him under Section 9 the amount B
awarded to him by the court shall not exceed the amount so claimed.
By sub-section 2 of Section 25, when the applicant has refused to
make such claim or has omitted without sufficient reason to make such
claim, the amount awarded by the court shall in no case exceed the
amount awarded by the Collector." C
Thus, on the facts of this case compensation cannot exceed what is
claimed.

Hence we have no hesitation to conclude that the High Court committed
error in enhancing the compensation from Rs. 3 per square yard to Rs. 11 per D
square yard. The enhancement could only be to the extent the respondent-
land owners claimed. It is also not in dispute that the claim by the land-
owners was Rs. 10,000 per Bigha. Hence, though the enhancement to Rs. 11
per square yard is not sustainable yet enhancement to the extent of Rs. 10,000
per Bigha is held to be valid.

With reference to the next question raised, awarding of interest @ 9%
E
and 12% respectively, the first question arises, whether on the facts of the
present case, amended or unamended Section 28 would be applicable in
granting the interest? The present Section 28 as it stands now is quoted
hereunder:

"28. Collector may be directed to pay interest on excess compensation
F
-If the sum which, in the opinion of the court, the Collector ought
to have awarded as compensation is in excess of the sum which the
Collector did award as compensation, the award of the Court may
direct that the Collector shall pay interest on such excess at the rate
of nine per centum per annum from the date on which he took G
possession of the land to the date of payment of such excess into
court.

Provided that the award of the Court may also direct that where
such excess or any part thereof is paid into Court after the date of
expiry of a period of one year from the date on which possession is H
538 SUPREME COURT REPORTS [2000] SUPP. 3 S.C.R.

A taken, interest at the rate of fifteen per centum per annum shall be
payable from the date of expiry of the said period of one year on the
amount of such excess or part thereof which has not been paid into
Court before the date of such expiry. "

The only difference on the structure of Section 28 is, prior to the Land
B Acquisition (Amendment) Act, 1984 [Act No. 68of1984], the interest rate was
6% instead of 9% and the proviso did not exist. If unamended section is
applicable the rate of interest would only be 6% per annum and further
interest @ 15% per annum as provided through the proviso would not be
applicable. We may refer here that the High Court granted interest as per
C amended section @ 9% per annum from the date on which possession of land
was taken to the date of payment of such excess amount in Court. It further
held, if this excess amount is paid after the expiry of a period of one year the
interest admissible to land owners would be @ 15% per annum. The High
Court relied on the cases of this Court in Bhag Singh & Ors. v. •Union
Territory of Chandigarh, AIR (1985) SC 1576, and in Union of India & Anr.
D v. Raghubir Singh, (Dead) by Lrs. etc., [1989] 2 SCC 754. It further held, in
view of the decision in Union of India & Anr. v. Zora Singh & Ors., [ 1992]
1 SCC 673, the appellant is not entitled to the additional benefit under Section
23(1-A).

In Union of India & Anr. v. Raghubir Singh (Dead) by Lrs. etc., [1989]
E 2 sec 754, this Court was considering Sections 30(2) and 15 whether claimant
was entitled for the increase in solatium to 30% which was enhanced from
15% through the aforesaid Amending Act. It was held that this amending
provision would only be applicable to the awards given by the Collector or
Court between 30th April, 1982 and 24th September, 1984. The benefit of
F amended provisions would not apply and cannot be granted either by the
High Court or the Supreme Court in respect of awards made by the Collector
or court prior to 30th April, 1982. This decision overruled Bhag Singh (Supra)
which was relied by the High Court. It held:

"Para 32 ...... .It seems to us that the learned Judges in that case missed
the significance of the word ·such' in the collocation 'any such
G
award' in Section 30(2). Due significance must be attached to that
word, and to our mind it must necessarily intend that the appeal to
the High Court or the Supreme Court, in which the benefit of the
enhanced solatium is to be given, mll'St be confined to an appeal
against an award of the Collector or of the Court rendered between
H April 30, 1982 and September 24, 1984.

''
KRISHI UTPADAN MANDI SAMITI v. KANHAIYA LAL [MISRA, J.] 539
Para 34 ....... The word 'or' is used with reference to the stage at which A
the proceeding rests at the time when the benefit under Section 30(2)
is sought to be .extended. If the proceeding has terminated with the
award of the Collector or of the Court made between the aforesaid two
dates, the benefit of Section 30(2) will be applied to such award made
between the aforesaid two dates. If the proceeding has passed to the B
stage of appeal before the High Court or the Supreme Court, it is at
that stage when the benefit of Section 30(2) will be applied. But in
every case, the award of the Collector or of the Court must have been
made between April 30, 1982 and September 24, 1984."

Learned counsel for the respondent made attempt to submit that the C
compensation awarded by the Court under Section 25 is only procedural right
and not substantive right hence the aforesaid Amending Act would be
applicable in both computing the compensation and the interest as per the
Amending Act. He relied in K.S. Paripoornan v. State of Kera/a and Ors.,
[1994] 5 sec 593.

"64. A statute dealing with substantive rights differs from a statute
D
which relates to procedure or evidence or is declaratory in nature
inasmuch as while a statute dealing with substantive rights is prima
facie prospective unless it is expressly or by necessary implication
made to have retrospective effect, a statute concerned mainly with
matters of procedure or evidence or which is declaratory in nature has E
to be construed as retrospective unless there is a clear indication that
such was not the intention of the legislature. A statute is regarded as
retrospective if it operates on cases or facts coming into existence
before its commencement in the sense that it affects, even if for the
future only, the character or consequences of transactions previously F
entered into or of other past conduct."

He also referred to Jose Da Costa & Anr. v. Basc~ra Sadasiva Sinai
Narcornim & Ors., [1976] 2 SCC 917. In para 31 it held that procedural right
is declaratory in nature and is restrictive in operation while substantive right
is prospective unless the legislature intends otherwise is well settled. The G
question is, whether Section 25 of the Act, would be said to be procedural
right and not substantive right. In support, submission is, looking to the
scheme of the Act the preceding Sections 23 and 24 merely refers how
compensation to be determined and what matters to be neglected in determining
compensation in the background, Section 25 is merely procedural. We have
.
no. hesitation to reject such a submission. Section 25 deals with amount of H
540 SUPREME COURT REPORTS [2000] SUPP. 3 S.C.R.

A compensation to be awarded by the Court. It mandates the Court that such
compensation shall not be Jess than the amount awarded by the Collector
under Section 11. Awarding of compensation, curtailing, restricting or adding
right to the compensation can never be said to be procedural. The language
of this section clearly reveals, it is substantive in nature, hence it cannot be
B held to be retrospective as to make the Amending Act applicable. In fact, this
second question, regarding granting of interest, with reference to the
applicability of the Amending Act, this Court has considered it in Mir
Fazeelath Hussain and Ors. v. Special Deputy Collector, Land Acquisition,.
Hyderabad, [1995] 3 SCC 208. This Court held, awards made by Collector and
Reference Court prior to 30.4. I 982 but amount of compensation enhanced by
C the Supreme Court in appeal Jong after the period of 30.4.1982 to 24.9.1984.
The claimant is entitled to interest on enhanced amount of compensation at
the old rate of 6 per cent only. It further held, interest under Section 28 and
solatium under Section 23(2) are not parts of the award hence what was stated
in Raghubir Singh case, solatium would equally apply to the interest also.

D Accordingly, we hold on the facts of the present case interest admissible
to the respondent-claimant would only be 6% as per unamended provision.
Thus the High Court granting interest @ 9% and I 5% under the proviso of
the amended section cannot be sustained. Accordingly, we set aside that part
of the High Court order which enhanced the compensation to respondent-
£ claimant over and above what is claimed and also set aside award of
compensation with reference to the interest at 9% and 15% respectively.
Interest admissible to the claimant would be 6%. Accordingly, the present
appeal succeeds and is allowed. The impugned order of the High Court to the
aforesaid extent is set aside. However, on the facts and circumstances of the
case, costs on the parties.
F
REVIEW PETITION (C) NO. 33 OF 1995
JN SPECIAL LEAVE PETITION (C) NO. 12623 OF 1993:

The case of the petitioner while filing review petition is that the
G petitioner's advocate was under the impression that one bigha of land
comprised.of 1000 square yards and, therefore, what was granted by the High
Court, was not beyond the claim made by the land-owners. It is only in
connection with another special leave petition relating to the land in the same
village, it transpired that one bigha of land comprised of 2756 square yards.
In view of this the petitioner submits that the claim of the. respondent is only
H Rs. I 5,000 per pucca b!gha, i.e., Rs. 5.45 per square yard, therefore, the High

\
KRISHI UTPADAN MANDI SAMIT! v. KANHAIYALAL[MISRA,J.] 541

Court has no jurisdiction to award @ Rs. 9 per square yard. We have A
considered this submission. We do not find any merit in this review petition.
\

Award being in this case between the dates 30th April, 1982 and 24th
September, 1984 and as per the Union of India & Anr. v. Raghubir Singh
(Dead) by Lrs. etc., (Supra), the amended provisions would be applicaQle
under which there is no restriction that award could only be upto the amount B
claimed by the claimant. Hence High Court order granting compensation more
than what is claimed cannot be said to be illegal or contrary to the provisions
of the Act. Hence the review itself, as is confined for the aforesaid reasons,
has no merit.

The faint submission was also made that example relied by the High C
Court for enhancing the compensation being agreement to sale should not
have been relied. Firstly, we would not like to enter into this question as
scope of review was not to re-assess or re-appraise the evidence which was
considered by the High Court and finally dismissed by this Court. Even
otherwise while fixing the market value, in totality of circumstances if any rate D
is specified in a document, namely, agreement to sale, that could not be said
to be either inadmissible or if considered makes the fixation of valuation
illegal. Hence we do not find any merit in this review petition. Accordingly
the same is dismissed.

v.s.s. Appeal allowed and petition dismissed.