Holding

Solatium at 15% of the market value is payable on the entire compensation, including the amount awarded by the Tribunal, and attracts statutory interest from the date of dispossession.

Summary

The appellant, N.D. Jain, owned land that was acquired by the Agra Town Improvement Trust under the U.P. Town Improvement Act, 1919. He received only a nominal compensation and no solatium, prompting him to seek a reference before the Nagar Mahapalika Tribunal, which increased the compensation but still denied solatium. The High Court further enhanced compensation and awarded solatium only on the amount it added, rejecting solatium on the Tribunal's award. The Supreme Court examined whether Section 23(2) of the Land Acquisition Act, 1894 mandates a 15% solatium even when the acquisition is under the Town Improvement Act, especially after the earlier exclusion was struck down as violative of Article 14. It held that solatium is a compulsory component of compensation, must be awarded on the entire market value, and attracts statutory interest under Sections 28 and 34 of the Land Acquisition Act. Consequently, the Court allowed the appeal, directing payment of solatium at 15% on the full amount and interest at 6% from the date of possession.

Issues considered

Whether solatium under Section 23(2) of the Land Acquisition Act, 1894 is payable when land is acquired under the U.P. Town Improvement Act, 1919 after the exclusion provision was declared unconstitutional.
Whether the High Court erred in denying solatium on the compensation awarded by the Nagar Mahapalika Tribunal.
Whether solatium forms part of compensation and is liable to statutory interest under Sections 28 and 34 of the Land Acquisition Act.
Whether a claimant must specifically plead solatium in the grounds of appeal for it to be awarded.

Legislation cited

Land Acquisition Act, 1894s. 23(2), s. 28, s. 34
U.P. Town Improvement Act, 1919s. 36(2)
U.P. Town Improvement (Appeals) Act, 1920

Subjects

solatiumland acquisitioncompensationstatutory interestSection 23(2)Article 14procedural pleadingU.P. Town Improvement Act

Judgment

388 SUPREME COURT REPORTS [1991] 1 S.C.R.

A In the result, the Judgment and decree of the High Court are set ~
aside, this appeal is allowed and the suit is dismissed. However, under
the facts and circumstances of the case, we make no orders as to costs.

G.N. Appeal allowed.
NARAIN DAS JAIN (SINCE DECEASED) BY L.RS. :A
V.
AGRA NAGAR MAHAPALIKA, AGRA

FEBRUARY 14, 1991

[K.N. SAIKIA AND MADAN MOHAN PUNCHHI, JJ.] .B

Land Acquisition Act, 1894-Section 23(2)-Solatium-Payment
_,_ ""( of-Necessity for.

U.P. Town Improvement Act, 1919-Section 36(2)-Acquisition
~ of land-Payment of Compensation-Whether arises.
' i c;:
Words and Phrases: 'Solatium'-Meaning of.

Appellant's land was acquired by the Agra Town Improvement
~~-Trust under the provisions of the U.P. Town Improvement Act, 1919.
For the land acquired, the appellant was paid a paltry sum. No solatium
was awarded as none was awardable under the Act. [391B]

The appellant sought a reference before the Nagar Mahapalika
Tribunal. The Tribunal raised the compensation to Rs.1,45,839 and
also awarded interest at the rate of 4-1/2 percent.

Still dissatisfied, the appellant moved the High Court in appeal.
The Nagarpalika also filed a cross appeal against enhancement. The
High Court allowed the appeal of the appellant and further enhanced
the compensation by Rs.48,613 and the rate of interest to 6 percent. On
the amount of Rs.48,613 solatium at the rate of 15% was awarded by the
~ High Court. No solatium was however awarded on the sum of F
I
. Rs.1,45,839 awarded by the Tribunal, on the ground that the appellant
~::::3'. ,,_had not made a grouse or laid any claim to it in his grounds of appeal.
The High Court negatived the contention of the appellant that his claim
to solatium was not based on any demand at his instance but it was
rather a statutory duty of the Court to grant it.

Allowing the app~al, this Court,

HELD: (1) Solatium, as the word goes, is "money comfort"
quantified by the statute, and given as a conciliatory measure for the
compulsory acquisition of the land of the citizen, by a welfare state such
as ours. [392D-E] H

389
390 SUPREME COURT REPORTS [1991) 1 S.C.R.

(2) The importance of the award of solatium cannot be under- - '
A mined by any procedural blocades. It follows automatically the market I
value of the land acquired, as a shadow would to a man. It springs up
spontaneously as a part of the statutory growth on the determination
.and emergence of market value of the land acquired. That it falls to be
awarded by the Court "in every case" leaves no discretion :with the
B court in not awarding it in some cases and awarding in others. [393A-B]

Om Prakash v. State of Uttar Pradesh, [1974] 2 S.C.C. 731, refer- y - -
red to.

(3) Solatium in the scheme of section 23(2) of the Land AcquiBition
c
Act is part of the compensation and sections 28 and 34 of the said Act pro-
vide for payment of interest on the amount of compensation. [394H-395A] --
Periyar & Pareekanni Rubbers Ltd. v. State of Kerala, A.I.R. ~
1990 S.C. 2192, referred to. "r'

D (4) Solatium being part of compensation must fetch statutory
interest from the date of dispossession of the land owner till date of
payment. [395D]

Dr. Shamlal Narula v. Commissioner of Income Tax Punjab,
[1964] 7 SCR 668, referred to. ~
E
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2327
of 1977.

From the Judgment and Order dated 23.5.1975 of the Allahabad
High Court in First Appeal No. 302 of 1966.
F
K.C. Jain and H.K. Puri for the Appellants.

A.P.S. Chauhan, Roopendra Singh and A.S. Pundir for the
Respondent.

G The Judgment of the Court was delivered by

PUNCHHI, J. This appeal by special leave is directed against r-.
\.._ ~-r
the common judgment and order of the Devision Bench of the
Allahabad High Court dated May 23, 1975.

H The appellant herein (since deceased and represented by Legal
N.D. JAIN.v. AGRA NAGAR MAHAPALIKA [PUNCHHI, J.] 391

r Representatives) was the owner of 48613 sq. yards of land in village
Ghatwasan, Teh. Sadar, Dist. Agra. The same was acquired by the
A

Agra Town Improvement Trust under the provisions of the U .P. Town
Improvement Act, 1919. Notification under section 36(2) of the
aforesaid Act, which is analogous to section 4 of the Land Acquisition
Act, 1894 was issued on 29-7-1950 and the acquisition proceedings
culminated by an award of the Land Acquisition Collector, followed B
by taking possession of the land from the appellant on 11-3-1953. For
'~ the land acquired, the appellant was paid a partly sum of Rs.1344-2
annas & 6 paise as compensation. No solatium was awarded as none
was awardable under the U.P. Town Improvement Act, 1919.

Feeling dissatisfied the appellant sought a reference under
section 18 of the Land Acquisition Act before the Nagar Mahapalika c
Tribunal, a creature of the U.P. Town Improvement Act, 1919. The
appellant asserted before the Tribunal that he should have been
allowed a rate of Rs.8 per sq. yard for the acquired land. The Tribunal
partly· accepted the claim of the apellant by its order dated 5-11-1965
raising compensation to the rate of Rs.3 per sq. yard and thus held the D
appellant entitled to a total sum of Rs. l,45,889 inclusive of the sum of
about Rs.1344 already received by him. The Tribunal also awarded
interest on the amount due at the rate of 4" 1/2 percent per annum with
effect from 11-3-1953, the date of taking possession of the land till its
payment.
E
Still dissatisfied, the appellant moved the High Court of Allaha-
bad in appeal; a forum provided under the U.P. Town Improvement
(Appeals) Act, 1920, but on grounds analogous to section 100 CPC.
Correspondingly the Nagar Mahapalika also filed a cross appeal
against enhancement. The Tribunal disposed of both the appeals by a
_ .... common judgment. The appellant was awared enhanced compensa- F
·~-tion at the rate of Rs.4 per sq. yard. Consequently an additional sum of
Rs.48613 was held due to him. The High Court also changed the rate
of interest from 4-1/2 percent per annum to 6 percent per annum,
correcting the error committed by the Tribunal. The claim of the
appellant to solatium at the rate of 15 per cent on the sum awarded
uptill the Tribunal's level was rejected as the appellant had•not G
claimed the same before the Tribunal and had not made a grouse
--. ~- thereof in his memorandum of appeal before the High Court. So on
the sum of Rs.1,45,839 assessed as market value by the Tribunal, no
solatium was awarded. On the amount of Rs.48,613 enhanced by the
High Court, solatium at the rate of 15 per cent was awarded by the
High Court, and interest thereon was also awarded from 11-3-1953, H
392 SUPREME COURT REPORTS [1991] 1 S.C.R.

·the date of taking possession till its payment. The appeal of the Nagar
A Mahapalika was -diSmissed. The appellant alone who is before us has i
challenged the common judgment of the High Court.

No dispute herein has been raised to any further increase in the
market value of the land. The -claim vehemently put forth is with
B regard to the solatium of 15 per cent on the market value of the land
and which claim, partly has been negatived by the High Court . It is not
disputed that if the claim is valid, the rate of solatium would be 15 per
cent of the m~rket value. Though a faint attempt was made to raise
. claim to solatium at the rate of 30 per cent and interest to 9 per cent
per annum in terms of the amendments made in the Land Acquisition
c Act, 1894 by means of Act No. 68 of 1984, but such claim was
abandoned in the next breath. So we ~re thus coricemed only to the
claim of solatium which has been declined by the High Court.
-
Section 23(2) of Land Acquisition Act, as it then was, provided
that in addition to the market value of the land, as provided in sub-
D section (1) of section 23, the court shall in every case award a sum of
rupees fifteen per centum on such market value in consideration of the
compulsory nature of acquisition. Solatium, as the word goes, is
"money comfort", quantified by the statute; and given as a conciliatory
measure for the compulsory acquisition of the land of the citizen, by a
welfare state such as ours. The concern for such a citizen was voiced by
E the Law Commission of India in its Report submitted in 1957 on the
Need for Reform in the Land Acquisition by observing as follows:

"We are not also in favour of omitting Section 23(2) so as
to exclude solatium of 15% for the compulsory nature of
the acquisition. It is not enough for a person to get the
F market value of the land as compensation in order to place . ~
himself in a position similar to that. which he could· have--/ -
occupied had there been no acquisition; he may have to
spend a considerable further amount for putting himself in
the same position as before ..... As pointed out by Fitz-
gerald the community has no right to enrich itself by deli-
G berately taking away the property of any of its members in
such circumstances without providing adequate compensa-
tion for it. This principle has been in force in India ever :>----_,.
since the Act of 1870. The Select Committee which
examined the Bill of 1883 did not think it necessary to omit
the provision but on the- other hand transferred it to Sec-
-H tion 23."
N.D. JAIN v. AGRA NAGAR MAHAPALIKA [PUNCHHI, J.] 393

t-- The importance of the award of solatium cannot be undermined 1

A
by any procedural blocades. It follows automatically the market value
of the land acquired, as a shadow would to a man. It springs up1
spontaneously as a part of the statutory growth on the determination
and emergence of market value of the land acquired. It follows as a,
matter of course without any impediment. That it falls to be awarded I
by the Court "in every case" leaves no di~cretion with the court in not B
awarding it in some cases and awarding in others. Since the award of 1
" -- ---<- solatium is in consideration of the compulsory nature of acquisition, it '
is a hanging mandate for the court to award and supply the omission at
any stage where the Court gets occasion to amend or rectify. This is the 1

- )- spirit of the provision, wherever made.

It is pertinent to note here that the claim of the appellant to
solatium was not entertainable before the Land Acquisition Collector,
C
-
1

~- taking proceedings of the acquisition under the U.P. Town Improve-
ment Act in the absence of a provision allowing it. Rather the amend-
ments and modifications set out in the schedule attached to the U .P.
Town Improvement Act made read that way. The payment of solatium ID
as awardable under section 23(2) of the Land Acquisition Act was
specifically not made applicable to the land acquired under the U.P.
Town Improvement Act. Such amendment to the schedule, however,
being violative qf Article 14 of the Constitution was struck down by
.<.._ ~ this Court on 14-12-1973 in Om Prakash &Anotherv. StateofU.P. and
Others, [ 1974] 2 SCC 731. This Court took the view that if the govern-
ment could acquire land for a Mahapalika or other local body by resort
either to the Land Acquisition Act or the U .P. Town Improvement
Act, it would in the former case have to pay solatium and in the latter
case not at all and which would lead to discrimination, and conse-
q uentialy granted relief of solatium to the land owner whose land was
_, acquired. On the law laid down by this Court, the High Court rightly F
~took the view that since the amendments made to the schedule to the I
Town Improvement Act had gone out of the way of the appellant, the
compensation due to him would have to be assessed in accordance with
the provisions of section 23 of the Land Acquisition Act. Holding so,
the High Court awarded solatium on the amount enhanced by it and
for that part rightly. :a
~--------'.,- The denial of the solatium to the appellant on.the sum awarded
by the Tribunal is based on the reasoning that firstly the Collector had
not awarded solatium and the appellant while taking the matter to the
Tribunal had not raised such claim. Secondly after the order of the 1

Tribunal_ fhe appellant when taking the matter to the High Court in H
394 SUPREME COURT REPORTS [1991] 1 S.C.R.

appeal, had not made a grouse and laid claim to it in his grounds of
A
appeal. The High Court, it appears was even then prepared to grant
solatium to the appellant and offered the appellant to seek amendment
of the grounds of appeal but the appellant declined to do so asserting
that his claim to solatium was not bas~d on any demand at his instance
but was rather a statutory duty of the Court to grant it, as otherwise,
B the mandate of section 23.(2) would fail. The High Court negatived
such contention.

We do not appreciate the distinction made by the High Court in
this regard. The appellant had all the same not pleaded for grant of
solatium in the grounds of appeal before the High Court while claim-
c ing enhanced compensation, and yet the High Court felt that it was
under the statutory duty to grant solatium on the amount enhanced by
it. The High Court did not shut out the claim of the appellant on the
ground that he had not asked for it specifically in the grounds of ~
apppeal. If that is so, the legal error which was otherwise patent
needed to be rectified by the High Court in favour of the appellant;
D more so when there was a cross appeal of the Nagar Mahapalika
before it and resort could be had to the provisions of Order 41 Rule 33
C.P.C. Additionally, the claim to solatium arose in this regard on the
basis of Om Prakash's case (supra) on 14-12-1973 by which the provi-
sions of the U .P. Town Improvement Act whereunder solatium was
withheld were struck dqwn, and on that date the appeal of the appel- ,~- _,,.i.
E lant against the order of the Tribunal dated 5-11-1965 was pending
before the High Court. The claim to solatiun surfaced and compulsory
acquistition of the land but also on the law on the subject being
declared by this Court in Om Prakash's case (supra). We are thus of
the view that the High Court should have measured the claim of the
appellant to solatium on the sum awarded by the Tribunal with the
F same yardstick as to the sum awarded by it and modified in decree__/-.__
accordingly. We have thus no hesitation in upsetting the judgment and ·
order of the High Court in this regard and award to the appellant
solatium at the rate of 15% on the entire market value of the land,
which would include a sum of Rs.1,45,839 left out by the Tribunal and
the High Court. The appellant further shall be entitled to the interest
G at the rate of 6% per annum from 11-3-1953, the date of taking posses-
sion, till the date of payment of the sum due as solatium. The appeal
sh ail stand allowed accordingly. ~

Before parting with the judgment, we need to clarify that
solatium in the scheme of section 23(2) of the Land Acquisition Act is
H part of the compensation and section 28 and 34 of the said Act nm-
N.D. JAIN v. AGRA NAGAR MAHAPALlKA [PUNCHHI, J.] 395

..._ vided payment of interest on the amount of compensation. This Court A
r recently in Periyar and Pareekanni Rubbers Ltd. v. State of Kera/a,
AIR 1990 SC 2192 has ruled that compensation is recompense or rep-
aration to the loss caused to the owner of the land and that payment of
interest on solatium is to recompensate the owner of the land the loss
of user of the land from the date of taking possession till date of
B
payment into Court. Therein the land owner was held entitled to
interest on solatium. Attention, however, may be invited to Dr. Sham-
--<:Zal Narula v. Commissioner of Income-tax Punjab, {1964] 7 SCR 668.
The quality of the sum paid as interest was held somewhat different. It
was ruled therein that the statutory interest paid under the Act is
~ interest paid for the delayed payment of compensation amount and in

-- no event can that be described as compensation for owner's right to
retain possession, for he has no right to retain possession after posses-
sion was taken under sections 16 and 17 of the Act. The quality of the
c

receipt of interest can be left by us here, whether it be a recompense
~for the loss of user of land or is a sum paid for the delayed payment of
compensation. Solatium being part of compensation must fetch statut-
D
ory interest from the date of dispossession of the land owner till date of
payment.

Accordingly, we allow this appeal and direct that the appellant
shall .also be paid solatium at the rate of 15% on the left out amount of
.. , .....(Rs.1,45,839 and interest at the rate of 6% per annum thereon from
E
i 1-3-1953, the date of taking possession till date of payment, and that
too with costs.

R.S.S. Appeal allowed.