Holding

The Court upheld the market value fixation, the 30% solatium, and the 9%/15% interest on excess compensation, but held that the 12% per annum interest under Section 23(1‑A) does not apply to pre‑1984 acquisitions.

Summary

The S.A. Jain College Trust and Managing Society acquired land belonging to a private owner for a college playground under the Land Acquisition Act, 1894. The original award in 1970 paid Rs 12,000 per acre with 15% solatium and 6% interest. Subsequent proceedings enhanced compensation to Rs 8 per square yard, added a 30% solatium, 12% interest on market value from notification to possession under Section 23(1‑A) of the 1984 Amendment, and interest of 9%/15% on excess compensation. The Supreme Court held that the market value fixation at Rs 8 per square yard and the 30% solatium were reasonable, and the 9%/15% interest on excess compensation was justified, but the 12% per annum interest under Section 23(1‑A) could not be awarded because the acquisition occurred before the 1984 Amendment came into force. Consequently, that portion of the award was struck out and the rest affirmed.

Issues considered

Whether the market value of the acquired land should be fixed at Rs 8 per square yard.
Whether a solatium of 30% of market value is permissible under the Land Acquisition (Amendment) Act, 1984.
Whether interest at 12% per annum from the date of notification to possession under Section 23(1‑A) of the 1984 Amendment applies to acquisitions that commenced before the amendment.
Whether the interest rates of 9% for the first year and 15% thereafter on excess compensation are justified.

Legislation cited

Land Acquisition Act, 1894s. 23(1-A), s. 4, s. 6
Land Acquisition (Amendment) Act, 1984

Subjects

Land acquisitionCompensationMarket valueSolatiumInterestSection 23(1-A)Amendment Act 1984Supreme CourtPartial relief

Judgment

A S.A. JAIN COLLEGE TRUST AND MANAGING SOCIETY
v.
THE STATE OF HARYANA AND ANR.

FEBRUARY 24, 1995

B (J.S. VERMA AND K.S. PARIPOORNAN, JJ.)

Land Acquisition Act, 1894 :

Ss. 4, 6, 23( 1-A)-Compensation-Award of-Market value of Ian~
C Determination of-Solatiwn and interesH:leld justified-Acquisition '-i
proceedings started as early 15.5.68, the award of the Collector was on 29.2. 70
and possession of the land was taken thereafter--All events happened long
before the Land Acquisition (Amendment) Act of 1984-Hence claimant not
entitled to the benefit of S.23( 1-A).

D The appellant Society is running educational and charitable institu-
tions. The Society acquired certain land belonging to the second respon-
dent for providing a playground to one of its Colleges. Compensation was
awarded to the second respondent @ Rs. 12,000 per acre anc! Rs. 1000 as
price of well apart from 15% solatium and 6% interest from date of
notification to date of award.
E
The Reference Court awarded enhanced compensation @ Re. 1 per
·sq. yard for the entire land and further interest @ 6% from date of
notification till the additional amount was paid to the claimant.

On appeal, the High Court enhanced the compensation @ Rs. 8 per
F sq. yard, 30% of the market value as solatium along with 12% of such
market value from date of notification till taking possession and interest
at 9% for the first year and at 15% till payment of compensation. The
Division Bench declined to interfere. Hence this appeal.

G Partly allowing the appeal, this Court

HELD : 1. The land acquired possessed all characteristics of a
potential building site for both residential as also commercial or industrial.
purposes and it was near to other buildings and establishments. Consider-
ing the totality of the circumstances and other relevant particulars, the
H Single Judge noticed that the rate of land in the locality had gone up to
316
-l \

SAJAINCOL1EGE1RUST v. STAIB 317

Rs. 9 per sq. yard in 1967 and has still gone up to Rs. 11 per sq. yard in A
1970 and 1971, and fixed the market value for the land acqiuired at Rs. 8
per sq. yard. Considering the importance of the locality, the potential of
the land, and the user to which it can be put, the fixation of the market
value of the land acquired at Rs. 8 per sq. yard is reasonable and the
Division Bench in appeal did not rightly interfere with the above deter- B
mination. [319-C-E]

2.1. The Land Acquisition (Amendment) Act, 1984 (Act No. 68 of
1984) became law on 24th September, 1984. The appeal filed by the claimant
I
",J/
was pending before the Single Judge of the High Court on the day when the
1 Amendment Act came inlo> force and he delivered the Judgment on C
25.10.1985. So the award of 30% solatium on the market value of the land
acquired is justified. Similarly the award of interest on excess compensa-
tion fixed by the Court at the rate of 9% for the first year from the date of
taking possession, and thereafter at 15% till the date of payment of the
compensation for the land acquired, is equally justified. But the amount of
12% per annum awarded on the market value from the date of publication D
of the Notification under section 4 of the Act till the date of taking posses-
sion of the land, awarded as per section 23(1-A), is not legally justified. In
this case, the proceedings for land acquisition commenced as early as
15.5.1968 and the award was made by the Collector on 29.2.1970, and the
possession of the land was taken immediately thereafter. All such events E
happened long before the Land Acquisition (Amendment) Act of 1984. In
such cases the claimants are not entitled to the benefit under section 23
(l·A) of the Land Acquisition (Amendment) Act (Amendment Act 68 of
1984). [319-F-H, 320·A·B]

2.2. Accordingly, the' claimant is not entitled to the benefit of section F
23(1-A) of the Act award of an amount calculated at the rate of 12% per
annum on the market value from the date •of publication of the notification
under section 4 of the Act till the date of taking possession of the land.
Subject to this modification, the decision of the courts below are affirmed.
£320-CJ G
Union of India v. B. V. Saroja and Anr., (1995) 1 Scale ~09, relied on.

CIVIL APPELLATE JURISDICTION: Civil Appeal No; 3078 of
1995.
'I

From the Judgment and Order dated 9.5.86 of the Punjab & Har~aqa H
318 SUPREME COURT REPORTS [1995) 2 S.C.R.

A High Court in LP.A. No. 139 of 1986.
H.M. Singh for the Appellant.

Mahabir Singh for the Respondents.

B The Judgment of the Court was delivered by

PARIPOORNAN, J. Leave granted.

2. This appeal is filed against the Judgment dated 9:5:1986, of the
Division Bench of the High Court of Punjab & Haryana, in L.P.A. No. 139
. C of 1986 and C.M. No. 903 of 1986, affirming the Judgment of the Single
Judge rendered in R.F.A. 390175 dated 25.10.1985 regarding the award of
compensation made under Land Acquisition Act. The appellant - Society
is running educational and charitable institutions in the State of Haryana.
For providing a playground to one of its colleges, the appellant - Society
D got acquired 7 bighas of land belonging to the second respondent in this
appeal (original claimant in the land acquisition proceedings), under the
Land Acquisition Act, 1894, hereinafter referred to as 'the Act'. Notifica-
tions under section 4 of the Act were issued on 15.05.1968, and 11.06.1968.
The notification under section 6 was issued on 13.8.1969. By an award
qated 29.9.1970, compensation was awarded to the second respondent - the
E land owner, at the rate of Rs. 12000 per acre and Rs. 1000 as: price of well
apart from 15% solatium and 6% interest, from the date ·of Notification up
to the date of award.

3. In the reference to court at the instance of the appellant as well --
I

F as the third respondent, the Addi. District Judge, by judgment dated
30.12.1974, awarded the enhanced compensation at the rate of Re. 1 per
sq. yard for the entire land and further interest at the rate of 6% per annum
under section 4 of the Act from the date of Notification till the additional
amount was paid to the claimant. In the appeal filed by the claimant before
the High Court of Punjab and Haryana in R.F.A. No. 390 of 1975, a learned
G Single Judge of that court by Judgment dated 25.10.1985 enhanced the
compensation for the land acquired at the rate of Rs. 8 per sq. yard. The ,'I
learned Single Judge also awarded 30% of the market value of the land
acquired as solatium, along with 12% of such market value from the date
of Notification under section 4 of the Act till the date of taking possession
H of the land and interest at the rate of 9% per annum for the first year and
_) \

S.AJAINCOLLEGElRUST v. STA1E[PARIPOORNAN,J.] 319

thereafter at the rate of 15% till the date of payment of compensation for A
the land acquired. It is against the aforesaid Judgment the petitioner/ap-
( pellant filed LPA No. 139 of 1986 before the Division Bench, wherein the
award of compensation was not interfered with.

4. We heard counsel for the appellant Sri H.M. Singh and also the B
counsel for the respondents Sri Mahabir Singh. The main grievance of
counsel for the appellant was that the Division Bench was in error in
declining to consider the issue of enhancemnent of compensation and the
resultant benefits awarded by the learned Single Judge. We find from a
close perusal of the Judgment of the District Judge and also the learned
Single Judge, that the land acquired possessed all characteristics of a C
potential building site for both residential as also commercial or industrial
purposes and it was near to other buildings and establishments. Consider-
ing the totality of the circumstances and other relevant particulars, the
learned Single Judge noticed that the rate of land in the locality had gone
up to Rs. 9 per sq. yard in 1967 and has still gone up to Rs. 11 per sq. yard D
in 1970 and 1971. In the circumstances, the learned Single Judge fixed the
market value for the land acquired at Rs. 8 per sq. yard. We are of the
view that considering the importance of the locality, the potential of the
land, and the user to which it can be put, the fixation of the market value
of the land acquired at Rs. 8 per sq. yard is reasonable and the Division
Bench in appeal did not rightly interfere with the above determination. We E
hold that the fixation of the market value of the land acquired at Rs. 8 per
sq. yard is reasonable and proper.

5. The Land Acquisition (Amendment) Act, 1984 (Act No. 68 of
/ ' 1984) became law on 24th September, 1984. The appeal filed by the F
claimant was pending before the learned Single Judge of the High Court
on the date when the Amendment Act came into force. The learned Single
Judge delivered the Judgment on 25.10.1985. So the award of 30% solatium
on the market value of the land acquired is justified. Similarly the award
of interest on excess compensation fixed)>y the Court at tlie rate of 9% for G
the first year from the date of taking possession, and thereafter at 15% till
the date of payment of the compensation for the land acquired, is equally
justified. But we are of the view that the amount of 12% per annum
awarded on the market value from the date of publication of the Notifica-
tion under section 4 of the Act till the date of taking possession of the land,
awarded as per section 23(1-A), is not legally justified. In this case, the H
320 SUPREME COURT REPORTS [1995] 2 S'1C.R.

, A proceedings for land acquisition commenced as early as 15.5.1968 and the
award was made by the Collector on 29.2.1970, and the possession of the
land was taken immediately thereafter. All such events happened long
before the Land Acquisition (Amendment) Act of 1984. In such cases the
claimants are not entitled to the benefit under section 23(1-A) of the Land
Acquisition (Amendment) Act (Amendment Act 68 of 1984). This view is
B fortified by the decision of this Court in Union of India v. B. V. Saroja &
Anr., (1995) 1 SCALE 309.

6. In the result, we hold that the claimant is not entitled to the benefit
of section 23 (1-A) of the Act - award of an amount calculated at the rate r
C of 12% per annum on the market value from the date of publication of the --y
notification under section 4 of the Act till the date of taking possession of
the land. Subject to this modification, the decisions of the courts below are
affirmed. There shall be no order as to costs in this appeal.

G.N. Appeal partly allowed.

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