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Supreme Court of India

SHANKARRAO BHAGWANTRAO PATIL ETC.versusTHE STATE OF MAHARASHTRA & ORS.

Citation
2021 INSC 501
Decided
20 September 2021
Disposal
Disposed off

Holding

A 50% deduction for development cost is warranted, and compensation must be fixed at Rs.70 per square foot with 9% interest from the date of possession, rendering the High Court's reduction unjustified.

Summary

The appellants' land in Bhoom, Maharashtra, was taken into possession by the State in 1984 and 1992 and later acquired under the Land Acquisition Act, 1894 in 1999. The Reference Court fixed compensation at Rs.70 per square foot after a 20% deduction for development cost, based on a sale exemplar (Exhibit 30) of Rs.137.76 per square foot, while the High Court reduced it to Rs.317 per square meter (Rs.29 per square foot). The Supreme Court examined whether a deduction for development cost was warranted, the relevance of a second exemplar (Exhibit 31), and the entitlement to interest from the date of possession. It held that Exhibit 31 was not a bona‑fide transaction and that a 50% deduction for development cost was appropriate given the rocky, non‑cultivable nature of the land and the State’s use for government quarters. Consequently, the Court restored the compensation to Rs.70 per square foot, ordered interest at 9% per annum from the date of possession, and rejected the High Court’s drastic reduction.

Issues considered

  • Whether a deduction for development cost should be applied and at what percentage when the exemplar sale is of a smaller plot compared to the large acquisition.
  • Whether Exhibit 31 can be considered a valid exemplar for determining market value.
  • What is the appropriate compensation rate for the acquired land.
  • Whether interest on compensation is payable from the date of possession prior to acquisition.
  • Whether the High Court's reduction of compensation to Rs.29 per square foot is legally justified.

Legislation cited

Subjects

Land acquisitionCompensationDeduction for development costReference courtInterest on compensationRocky soilMoorm soilExemplar saleSection 4Section 18Article 142High Court reductionSupreme Court

Judgment

                        [2021] 9 S.C.R. 239                             239


         SHANKARRAO BHAGWANTRAO PATIL ETC.                              A
                                 v.
           THE STATE OF MAHARASHTRA & ORS.
               (Civil Appeal Nos. 5712-5713 of 2021)
                      SEPTEMBER 20, 2021                                B
  [HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ.]
      Land Acquisition Act, 1894 – Compensation – Deduction
towards development cost – Appellants’ land acquired –
Compensation awarded by Land Acquisition Collector – Dissatisfied,
                                                                        C
reference sought – Reference Court awarded compensation at the
rate of Rs.70 per square feet – In appeal, High Court reduced the
compensation to Rs.317/- per square meter (29 per square feet) –
Held: Land in question was rocky and had a moorum soil – Such
land is not cultivable – In the facts of the present case, deduction
towards the development cost at the rate of 50% is warranted –          D
Order of the Reference Court is justified in law – High Court reduced
the compensation drastically without any reasonable basis –
Appellant entitled to a compensation at the rate of Rs.70/- per
square feet from the date of award by the Land Acquisition Collector
with interest as directed – Constitution of India – Art.142.
                                                                        E
      Land Acquisition Act, 1894 – Compensation – Exemplar of a
smaller plot as compared to a larger area – Deductions on account
of – Discussed.
      Disposing of the appeals, the Court
      Held: 1.1 The reliance of the appellant on the Exemplar           F
Exhibit 31 (one of the two sale deeds relied on by the appellant,
the other being Exhibit 30) is absolutely untenable and based on
a false representation. Exhibit 31 is excluded from consideration
inter alia for the reason that the property was sold on 4.9.1996,
but still it continued to be reflected in the name of the vendor        G
and even the permission to raise construction after the sale was
granted to the vendor. Exhibit 30 is part of the same survey
number whereby land was sold at the rate of Rs.137.76 square
feet. In the present case, there is no evidence that the sale
exemplar Exhibit 30 was a part of any developed layout but is an
                                                                        H
                                239
240           SUPREME COURT REPORTS                      [2021] 9 S.C.R.


A     isolated instance of sale. Such sale of a small area as compared to
      the acquisition of 9000 square meters can be taken into
      consideration after a suitable deduction is made on account of
      the development cost. The land in question was rocky and had a
      moorum soil. Such land is not cultivable. Still further, the State
      has taken possession of a part of the land in 1984 and another
B
      part in 1992 as is apparent from the reading of the two awards of
      the Special Land Acquisition Officer. It has also come on record
      that the land, subject matter of the appeals, is similarly situated
      and forms a part of Bhoom Municipal Council. The Bhoom town
      has a small population of 17150. The possession of the land was
C     taken for construction of government quarters and a road. Since
      the use of the land for a government quarter was known, therefore,
      the smaller area was sold keeping in view the intended use of
      the land acquired for the residential purposes. The deduction of
      50% is proper as the sale deed was executed after 11 years of
      possession of rocky land and moorum soil was taken. Therefore,
D
      deduction towards the development cost at the rate of 50% is
      warranted in the facts of the present case. Thus, the compensation
      to be awarded is (137.76/2 = 69 rounded off to Rs.70 per square
      feet) which was the market value assessed by the Reference Court
      as well. [Paras 10, 16][246-A-D; 249-B-F]
E           Meharawal Khewaji Trust v. State of Punjab (2012) 5
            SCC 432 : [2012] 4 SCR 24 – held inapplicable.
            Chimanlal Hargovinddas v. Special Land Acquisition
            Officer, Poona and Anr. (1988) 3 SCC 751 : [1996] 2
            SCR 444; Lal Chand v. Union of India and Anr. (2009)
F           15 SCC 769 : [2009] 13 SCR 622; Kasturi and Ors. v.
            State of Haryana (2003) 1 SCC 354 : [2002] 4 Suppl.
            SCR 117 – relied on.
            1.2 The order of the Reference Court is justified in law
      whereas the High Court has reduced the compensation drastically
G     without any reasonable basis. Therefore, the appellant is entitled
      to a compensation at the rate of Rs.70/- per square feet from
      the date of award by the Land Acquisition Collector. Apart from
      statutory benefits, such compensation has been arrived at
      keeping in view the development activity that has already taken
H
 SHANKARRAO BHAGWANTRAO PATIL ETC. v. THE STATE                       241
           OF MAHARASHTRA & ORS.

place by the virtue of possession of the acquired land delivered      A
to the State. The possession of the land acquired was taken in
the year 1984/ 1992. Instead of remitting the matter to the Land
Acquisition Collector for determination of the compensation for
use and occupation by the State, it is deemed appropriate to decide
this issue in the present appeal itself. There is no evidence that
                                                                      B
such land was being put to use by the landowners even prior to
the taking of possession by the State. But the fact remains that
the possession has been taken without payment of compensation
depriving the landowners of the right to use land. Therefore, the
land owners would be entitled to interest on the amount of
compensation awarded at the rate of 9% per annum from the             C
date of possession which was taken in the year 1984/1992 till the
date of notification under Section 4 of the Land Acquisition Act,
1894 on the amount awarded after acquisition that is the sum of
Rs.70/- per square feet. The appellant shall be entitled to others
statutory benefits on the compensation amount of Rs.70/- per
                                                                      D
square feet from the date of award till realization. [Paras 17-
19][249-F-G; 250-A-E]
      Maya Devi (Dead) Thr. Lrs v. State of Haryana and
      Anr. (2018) 2 SCC 474 : [2018] 1 SCR 225; R.L. Jain
      v. DDA & Ors. (2004) 4 SCC 79 : [2004] 2 SCR 1156;
      Madishetti Bala Ramul v. Land Acquisition Officer               E
      (2007) 9 SCC 650 : [2007] 7 SCR 222; Tahera Khotoon
      & Ors. v. Revenue Divisional Officer/Land Acquisition
      Officer & Ors. (2014) 13 SCC 613; Balwan Singh &
      Ors. v. Land Acquisition Collector & Anr. (2016) 13
      SCC 412 : [2016] 2 SCR 163 – referred to.                       F
                      Case Law Reference
[2012] 4 SCR 24                 held inapplicable    Para 6
[2018] 1 SCR 225                referred to          Para 7
[2004] 2 SCR 1156               referred to          Para 8           G
[2007] 7 SCR 222                referred to          Para 8
[2016] 2 SCR 163                referred to          Para 8
[1996] 2 SCR 444                relied on            Para 12
                                                                      H
242                SUPREME COURT REPORTS                     [2021] 9 S.C.R.


A     [2009] 13 SCR 622                   relied on            Para 14
      [2002] 4 Suppl.SCR 117              relied on            Para 15
            CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.5712-
      5713 of 2021.
B           From the Judgment and Order dated 22.03.2016 of the High Court
      of Judicature at Bombay, Bench at Aurangabad in First Appeal No.1373
      of 2003 and First Appeal No.63 of 2004 and order dated 27.07.2016 in
      Review Application Civil No.81 of 2016 in First Appeal No.1373 of 2003.
                With
C               Civil Appeal Nos.5714-5715 of 2021
           Jayant Bhushan, Sr. Adv., Atul Babasaheb Dakh, Tushar Bhushan,
      Amartya Bhushan, Ketan Paul, Advs. for the Appellants.
             Sachin Patil, Rahul Chitnis, Aaditya A. Pande, Geo Joseph, Advs.
      for the Respondents.
D
                The Judgment of the Court was delivered by
                HEMANT GUPTA, J.
             1. The present appeals are directed against the order dated
      22.03.2016 passed by the High Court of Judicature at Bombay,
E     Aurangabad in the First Appeals filed by the land owners and the State
      determining the compensation of the land acquired at the rate of Rs.317/
      - per squaremeter (29 per squarefeet) apart from the statutory benefits,
      thus reducing the compensation awarded by the learned Reference Court
      on 13.08.2003 at the rate of Rs. 70 per squarefeet.
F            2. The land of the appellants measuring 40R (1R = 100 square
      meters or 1089 square feet) comprising of a land survey no. 220/4/b
      was taken into possession by the State through private negotiations on
      14.09.1984. The market price payable to the landowners was to be settled
      by negotiations but, since the price could not be decided, therefore the
G     land comprising land survey no. 220/4/b admeasuring 40R was intended
      to be acquired vide notification dated 04.02.1999 under Section 4 of The
      Land Acquisition Act, 18941 published in the Maharashtra Government
      Gazette. Such land is the subject matter of Civil Appeals arising out of
      SLP (Civil) Nos. 33471-33472 of 2016.The State also intended to acquire
      1
H         For short the ‘Act’
 SHANKARRAO BHAGWANTRAO PATIL ETC. v. THE STATE                               243
    OF MAHARASHTRA & ORS. [HEMANT GUPTA, J.]

land admeasuring 30R and 20R comprising of Survey Number 212/b                A
and 220/4 vide the above said notification as well. The possession of
such land was taken on 21.10.1992. Such land is the subject matter of
Civil Appeals arising out of SLP (Civil) Nos.33876-33877 of 2016. The
other statutory requirements were completed and two separate awards
were announced. The learned Special Land Acquisition Collector
                                                                              B
determined market value considering the two sale instances both dated
24.04.1997 forming a part of the land comprising of Survey No. 220 of
an area of 92 square meters sold for a sum of Rs. 3500/-. The first
award was announced on 26.03.2002in respect of the land admeasuring
40R. The learned Special Land Acquisition Collector awarded a sum of
Rs.232/- per squaremeter. The second award was announced by the               C
Land Acquisition Collector on 6.4.2002 awarding a compensation of
Rs.217/- per squaremeter for 1390 squaremeters of land out of Survey
No. 220/4 and Rs.168/- per square meters comprising of Survey No.
212/1/b, whereas in respect of the land admeasuring 100 square meters
out of Survey No. 212/1/b, a compensation of Rs. 179/- per square meter
                                                                              D
was granted.
       3. The land owners dissatisfied with the amount of compensation,
sought reference under Section 18 of the Act claiming compensation at
the rate of Rs. 150/-per square feet for the entire land measuring 90R. It
has also come on record that the land, subject matter of the appeals, is
similarly situated and forms a part of Bhoom Municipal Council. The           E
population of Bhoom Municipal Council is 17510and the land is described
in the revenue record as barren land. PW 1 – Shankarrao had admitted
that the land was rocky and moorum (powdered rock) soil.
       4. The land owners relied upon two sale deeds, i.e. Exhibit 30
dated 05.04.1995 whereby the landfalling under Survey No. 220 was             F
sold for a sum of Rs. 3,00,051/- in pursuance of an agreement to sell
dated 02.11.1994. A sum of Rs. 1,00,000/- was to be paid before 1.11.1995.
The Reference Court calculated the rate of the sale price, it was recorded
to be Rs. 137.76 per square feet. The rate has not been disputed before
the High Court or even before this Court. The land owners relied upon         G
another sale deed i.e. Exhibit 31 dated 04.09.1996 whereby the land
measuring 49.5 x 16.5 feet(816. 75 square feet) was sold for a sum of
Rs.1,90,000/-that is Rs. 232.50 per square feet. Such property is described
as Municipal Council New Property Number 1480 and 1480/1. The
learned Reference Court arrived at the compensation of Rs.70/- per
                                                                              H
244                SUPREME COURT REPORTS                         [2021] 9 S.C.R.


A     square feet of the land acquired after deducting 20% of the price
      mentioned in Exhibit 30 and 31 on account of development charges.
             5. However, the High Court in further appeals filed by the State
      and the land owners dismissed the appeal of the land owners for
      enhancement but reduced the compensation to Rs.317/-square meter
B     (29 per squarefeet). The High Court found that the sale instances are in
      respect of the land but in fact the houses were constructed thereon
      therefore, the sale deed includes the cost of construction of the house,
      such cost has to be reduced. The High Court also held that since the
      acquisition is of a large area of 9000 square meters, therefore, the suitable
      development charges are required to be deducted as the sale instances
C     pertain to the smaller area. After discussing the evidence, the High Court
      redetermined the compensation as mentioned above.
              6. Before this Court, Mr. Jayant Bhushan, learned Senior Advocate
      on behalf of the land owners argued that as per Exhibit 30, a plot
      measuring 66 x 33 feet (2178 square feet/ 202 square meter) was sold
D     at the rate of Rs.137.76 per square feet. Another sale instance Exhibit
      31, a plot measuring 815.75 square feet was sold at the rate of Rs.232.62
      per square feet. The land, subject matter of the sale instance Exhibit 30
      and 31 are close to the acquired land inasmuch as the land in Exhibit 31
      is just 150 feet from the acquired land. It is argued that the sale instances
E     are of an open land. Therefore, the finding of the High Court that the
      land had houses is not supported by evidence as the permission for
      construction was granted only in the year 1997 after the acquisition of
      sale deed dated 1996. The learned counsel further argued that in view
      of the judgment of this Court in Meharawal Khewaji Trust v. State of
      Punjab2, the highest rates from the sale exemplar is to be taken, therefore,
F     Exhibit 31 is a more suitable exemplar which is required to be madethe
      basis for determination of compensation.
             7. The learned counsel for the appellant also relied upon the
      judgment of this Court reported as Maya Devi (Dead) Thr. Lrs v.
      State of Haryana and Anr.3 that 33% deduction could be made for
G     large lands being acquired when the exemplar is for a smaller area.
      Thus, with Exhibit 31 having the sale price of Rs.232/- per squarefeet
      and 33% deduction is made, the rate would come out to be Rs.160 per

      2
          (2012) 5 SCC 432
      3
H         (2018) 2 SCC 474
    SHANKARRAO BHAGWANTRAO PATIL ETC. v. THE STATE                               245
       OF MAHARASHTRA & ORS. [HEMANT GUPTA, J.]

squarefeet. Therefore, the amount claimed by the land owners i.e. at             A
the rate of Rs.150/- per square feet should have been awarded.
       8. It is also argued that since the possession was taken in the year
1984/ 1992 though the notification under Section 4 of the Act was
published in the year 1999, therefore, an interest on the amount of
compensation awarded from the date of possession should have been                B
granted. The reliance is placed upon judgments of this Court reported as
R.L. Jain v. DDA & Ors. 4, Madishetti Bala Ramul v. Land
Acquisition Officer 5 , Tahera Khotoon & Ors. v. Revenue
Divisional Officer/Land Acquisition Officer & Ors6., Balwan Singh
& Ors. v. Land Acquisition Collector & Anr.7. It is thus argued that
the order of the High Court to remit the matter to the Collector for             C
determination of the compensation from the date of possession till the
date of notification is clearly erroneous and the land owners would remain
further deprived of the value of the acquisition of land.
        9. On the other hand, Mr. Sachin Patil, learned counsel for the
State argued that houses were constructed on the land in question which          D
is evident from the Tax Assessment Register for the period 1983-84 till
1.1.97 (Annexure A-3) filed by the appellant with additional documents
showing the assignment of House property number. In fact, the sale
deed itself is of Municipal Council Property No. 1186/1 (New No. 1481/
1). Still further, the permission to construct relied upon by the appellant      E
is dated 28.1.1997 which was granted to the vendor, though the land
stood sold to the appellant on 4.9.1996. Thus, the entire story of the land
being an open land is not true. It is argued that the land, subject to the
sale exemplar is a very small area as against the large track of acquired
land measuring almost 2 acres. The sale exemplars relied upon by the
appellants are of the smaller area. Therefore, the deduction of atleast          F
50% is required to be made towards the land required for development
works apart from the deduction on account of the value of the house
constructed. It is argued that the sale exemplars Exhibit 30 and 31
respectively are not relevant since they are not a part of the land which
is the subject matter of the acquisition. In fact, the sale exemplars referred   G
to the Reference Court are in respect of the land acquired. Therefore,
the said sale instances become the most relevant exemplars.
4
  (2004) 4 SCC 79
5
  (2007) 9 SCC 650
6
  (2014) 13 SCC 613
7
  (2016) 13 SCC 412                                                              H
246               SUPREME COURT REPORTS                          [2021] 9 S.C.R.


A            10. We have heard the learned counsel for the parties.We find
      that the Exemplar Exhibit 30 is in respect of Survey No. 220 of a sale
      deed executed on 05.04.1995. Exemplar 31 is not a part of Survey No.
      220 but has been assigned Municipal Council New Property No. 1480
      and 1481/1, because the land is situated close to the acquired land. The
      argument that the construction was raised in pursuance of the permission
B
      granted on 28.01.1997, therefore, the finding of the High Court that the
      house was already constructed is not tenable. We find that the reliance
      of the appellant on the Exemplar Exhibit 31 is absolutely untenable and
      based on a false representation. A perusal of the permission dated
      28.01.1997shows that it was granted to Govind Rajaram Bhagwat for
C     the construction of a house on Plot No. 1480/1, vendor. Such property
      had already been sold on 04.09.1996. Still further, the house tax
      assessment register produced by the appellant shows that the property
      was assessed to house tax in the name of Govind Rajaram Bhagwat
      from the year 1983-1984 till 01.01.1997. Therefore, such land had a
      house constructed thereon, which was assessed to House Tax as well.
D
      The commencement certificate is not reliable since it is granted to the
      vendor of the purchaser. Therefore, Exhibit 31 is excluded from
      consideration.
             11. Thus, the judgment of this Court in Mehrawal Khewaji Trust
      is of no help to the appellant inasmuch as the best exemplar Exhibit 31
E     referred to by the appellant has been found to be a non-bonafide
      transaction. In the absence of such an exemplar, only Exhibit 30 remains
      to be examined in which, the plot of land, of the same survey number
      was sold at the rate of Rs. 137.76 per square feet.
            12. The question of deductions on account of an exemplar of a
F     smaller plot as compared to a larger area under acquisition has come up
      for consideration before this Court in Chimanlal Hargovinddas v.
      Special Land Acquisition Officer, Poona and Anr.8. This Court held
      as under:
               “8. …….The first two grounds are devoid of merit. It is common
G              knowledge that when a large block of land is required to be valued,
               appropriate deduction has to be made for setting aside land for
               carving out roads, leaving open spaces, and plotting out smaller
               plots suitable for construction of buildings. The extent of the area
               required to be set apart in this connection has to be assessed by
      8
H         (1988) 3 SCC 751
    SHANKARRAO BHAGWANTRAO PATIL ETC. v. THE STATE                             247
       OF MAHARASHTRA & ORS. [HEMANT GUPTA, J.]

         the court having regard to the shape, size and situation of the       A
         concerned block of land etc. There cannot be any hard and fast
         rule as to how much deduction should be made to account for this
         factor. It is essentially a question of fact depending on the facts
         and circumstances of each case. It does not involve drawing upon
         any principle of law.
                                                                               B
                   xxx                      xxx                       xxx
         12. In the result appellant must be awarded compensation at
         Rs 7000 per acre subject to deduction or allowance of 25 per cent
         to account for land required to be set apart for roads, open spaces
         etc. In other words appellant will be entitled to be paid             C
         compensation for 13 acres 7 gunthas comprised in Survey No. 85
         at Rs 5250 per acre (Rs 7000 less 25 per cent i.e. less 1750 = Rs
         5250) in place of the lesser sum awarded by the High Court.
         Appeal must be partly allowed to this extent accordingly.”
      13. In the aforesaid case, reliance of the landowners was on an          D
exemplar which reflected the sale price of Rs. 20,000/- per acre which
was situated on the Ganeshkhand Road as against Rs. 7,000/- per acre
assessed by the High Court. The Court noticed that the unloading was
Rs. 13,000/- per acre which works out at 65%.
       14. In the judgment reported as Lal Chand v. Union of India             E
and Anr.9, this Court held that deduction for development is to be made
to arrive at the market value of large tracts of undeveloped agricultural
land (with potential for development) the deduction varies from 20% to
75% of the price of such developed plots. This Court held as under:
         “13. The percentage of “deduction for development” to be made         F
         to arrive at the market value of large tracts of undeveloped
         agricultural land (with potential for development), with reference
         to the sale price of small developed plots, varies between 20% to
         75% of the price of such developed plots, the percentage depending
         upon the nature of development of the layout in which the exemplar
         plots are situated.                                                   G
         14. The “deduction for development” consists of two components.
         The first is with reference to the area required to be utilised for
         developmental works and the second is the cost of the development

9
    (2009) 15 SCC 769                                                          H
248                SUPREME COURT REPORTS                            [2021] 9 S.C.R.


A              works. For example, if a residential layout is formed by DDA or
               similar statutory authority, it may utilise around 40% of the land
               area in the layout, for roads, drains, parks, playgrounds and civic
               amenities (community facilities), etc.
               15. The development authority will also incur considerable
B              expenditure for development of undeveloped land into a developed
               layout, which includes the cost of levelling the land, cost of
               providing roads, underground drainage and sewage facilities, laying
               water lines, electricity lines and developing parks and civil
               amenities, which would be about 35% of the value of the developed
               plot. The two factors taken together would be the “deduction for
C              development” and can account for as much as 75% of the cost of
               the developed plot.
                          xxx              xxx                xxx
               22. Some of the layouts formed by the statutory development
D              authorities may have large areas earmarked for water/sewage
               treatment plants, water tanks, electrical substations, etc. in addition
               to the usual areas earmarked for roads, drains, parks, playgrounds
               and community/civic amenities. The purpose of the aforesaid
               examples is only to show that the “deduction for development”
               factor is a variable percentage and the range of percentage itself
E              being very wide from 20% to 75%.”
             15. This Court in the judgment reported as Kasturi and Ors. v.
      State of Haryana10, held that there may be various factual factors which
      may have to be taken into consideration while applying the cut in payment
      of compensation towards developmental charges, maybe in some cases
F     it is more than 1/3rd and in some cases less than 1/3rd. This Court held
      as under:
               “7 ……..However, in cases of some land where there are certain
               advantages by virtue of the developed area around, it may help in
               reducing the percentage of cut to be applied, as the developmental
G              charges required may be less on that account. There may be
               various factual factors which may have to be taken into
               consideration while applying the cut in payment of compensation
               towards developmental charges, maybe in some cases it is more
               than 1/3rd and in some cases less than 1/3rd. It must be
      10
H          (2003) 1 SCC 354
 SHANKARRAO BHAGWANTRAO PATIL ETC. v. THE STATE                                    249
    OF MAHARASHTRA & ORS. [HEMANT GUPTA, J.]

       remembered that there is difference between a developed area                A
       and an area having potential value, which is yet to be developed.
       The fact that an area is developed or adjacent to a developed
       area will not ipso facto make every land situated in the area also
       developed to be valued as a building site or plot, particularly when
       vast tracts are acquired, as in this case, for development purpose.”
                                                                                   B
       16. Exhibit 30 is part of the same survey number whereby land
was sold at the rate of Rs.137.76 square feet. In the present case, there
is no evidence that the sale exemplar Exhibit 30 was a part of any
developed layout but is an isolated instance of sale. Such sale of a small
area as compared to the acquisition of 9000 square meters can be taken
into consideration after a suitable deduction is made on account of the            C
development cost. The land in question was rocky and had a moorum
soil. Such land is not cultivable. Still further, the State has taken possession
of a part of the land in 1984 and another part in 1992 as is apparent from
the reading of the two awards of the Special Land Acquisition Officer.
The Bhoom town has a small population of 17150. The possession of the              D
land was taken for construction of government quarters and a road.
Since the use of the land for a government quarter was known, therefore,
the smaller area was sold keeping in view the intended use of the land
acquired for the residential purposes. The deduction of 50% is proper as
the sale deed was executed after 11 years of possession of rocky land
and moorum soil was taken. Therefore, we find that deduction towards               E
the development cost at the rate of 50% is warranted in the facts of the
present case. Thus, the compensation to be awarded is (137.76/2= 69
rounded off to Rs.70 per square feet) which was the market value
assessed by the Reference Court as well.
       17. We find that the order of the learned Reference Court is justified      F
in law whereas the High Court has reduced the compensation drastically
without any reasonable basis. Therefore, we find that the appellant is
entitled to a compensation at the rate of Rs.70/- per square feet from
the date of award by the Land Acquisition Collector. Apart from statutory
benefits, such compensation has been arrived at keeping in view the                G
development activity that has already taken place by the virtue of
possession of the acquired land delivered to the State.
      18. The possession of the land acquired was taken in the year
1984/ 1992. The land owners have claimed interest from 1984/1992 when
the possession was taken, whereas the acquisition is in the year 1999. In          H
250             SUPREME COURT REPORTS                            [2021] 9 S.C.R.


A     respect of the argument for determination of amount of compensation
      from the date possession was taken by the State till the date of notification
      under Section 4 of the Act, judgments relied upon by the appellant have
      been referred to in para 8 above. A perusal of the said judgments shows
      that grant of payment of interest for the pre-acquisition period is in the
      nature of an order passed under Article 142 of the Constitution to do
B
      substantial justice. Keeping in view the aforesaid judgments, we find
      that instead of remitting the matter to the Land Acquisition Collector for
      determination of the compensation for use and occupation by the State,
      we deem it appropriate to decide this issue in the present appeal itself.
             19. There is no evidence that such land was being put to use by
C     the landowners even prior to the taking of possession by the State. But
      the fact remains that the possession has been taken without payment of
      compensation depriving the landowners of the right to use land. Therefore,
      the land owners would be entitled to interest on the amount of
      compensation awarded at the rate of 9% per annum from the date of
D     possession which was taken in the year1984/1992 till the date of
      notification under Section 4 of the Act on the amount awarded after
      acquisition that is the sum of Rs.70/- per square feet. The appellant shall
      be entitled to others statutory benefits on the compensation amount of
      Rs.70/- per square feet from the date of award till realization. With the
      above said directions, the appeals are disposed of.
E

      Divya Pandey                                               Appeals disposed of.




F




G




H


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