Holding

Compensation is to be fixed at Rs 30 per square yard for all the acquired lands, with enhanced solatium and interest under Sections 23(1‑A), 23(2) and 28, because the lands on the main road and adjoining developed area have higher potential value.

Summary

The Supreme Court examined compensation for land acquired under the Land Acquisition Act, 1894 where possession was taken in 1986 and an award was made in 1990. The High Court had relied on a prior judgment (Ex A‑2) to fix compensation at Rs 22 per square yard after adjusting for time lag, dismissing the claimants' appeals. The claimants argued that other earlier cases (Ex A‑3, A‑4, A‑5) with higher rates should be considered. The Court held that those cases were not comparable because the lands were distant, but it recognized that lands on the main road and adjoining developed areas warranted a higher rate, noting the acquisition officer’s own distinction of Rs 7,500 versus Rs 15,000 per acre. Consequently, the Court fixed a uniform market value of Rs 30 per square yard for all the lands and awarded the claimants enhanced solatium, interest, and additional amounts under Sections 23(1‑A), 23(2) and 28 of the Act. Some appeals were dismissed while others were allowed.

Issues considered

Whether compensation for the acquired land should be determined by reference to earlier comparable awards, considering the time lag between notifications.
Whether judgments in Ex A‑3, Ex A‑4 and Ex A‑5 are applicable for fixing compensation in the present case.
Whether lands situated on a main road and adjoining a developed area merit a higher compensation rate.
How Sections 23(1‑A), 23(2) and 28 of the Land Acquisition Act, 1894 apply to the award of solatium, interest and additional compensation.

Legislation cited

Land Acquisition Act, 1894s. 18, s. 23(1-A), s. 23(2), s. 28, s. 4, s. 6

Subjects

Land acquisitionCompensation valuationTime lag adjustmentSolatiumInterest on compensationPublic purposeDevelopment valueLand Acquisition Act 1894

Judgment

SMT. GOWRAMMA ETC. A
v.
LAO-CUM-MANDAL REVENUE OFFICER PARTI
RANGAREDDY DISTRICT

MARCH 22, 1996
B
[K. RAMASWAMY AND G.B. PATIANAIK, JJ.)

it Land Acquisition Ac4 1894 :

S.4, 6, 23(1A), 23(2), 28-Acquisition of Land-Possession of land C
taken on 5.6.1986-Award by Land Acquisition Officer made on
25.5.1991J-Compensation determined on the basis of compensation given for
lands acquired under an earlier notification, keeping in view the time lag
between the two notifications-Held valid-For the land situated on the main
road and aifutting developed area higher compensation determined-Keeping
in view the potential value of the /and-Claimants entitled to benefit u/s. D
)• 23(1-A), 23(2) and 28.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 7033-34
of 1996 Etc.

From the Judgment and Order dated 8.9.93 of the Andhra Pradesh E
High Court in AS. Nos. 2030 and 2597 of 1992.

R. Venugopal Reddy, S. Vijay Kumar, Ms. Rani Chhabra, G.
Seshagiri Rao and Mohan Rao for the Appellants.

G. Prabhakar for the Respondents. F

· The following Order of the Court was delivered :
(
· Leave granted

Notification under Section 4(1) of the Land Acquisition Act, 1894 G
(for short, the 'Act') was published on August 29, 1989 acquiring an extent
of 9 acres 25 guntas of land in Pargi Town, Ranga Reddy District in the
State of Andhra Pradesh for public purpose, namely, to provide house sites
to the weaker sections. Possession of the land was taken on June 5, 1986
pursuant to an earlier notification which had lapsed for failure to pass the H
823
,----
824 SUPREME COURT REPORTS [1996] 3 S.C.R.

A award. The Land Acquisition Officer in his award dated May 25, 1990
determined the compensation @ Rs. 7,500 per acre in respect of some
lands and Rs. 15,000 per acre in respect of other lands and, in addition,
granted Rs. 5,000 for well. On reference under Section 18, the Subordinate
Judge, Vikarabad in his award and decree dated February 12, 1992 deter-
B mined the compensation at Rs. 36 per sq. yd. He determined the value of
the well at Rs. 18,100. Both the State as well as the claimants filed appeals
in the High Court. In three different sets of appeals, the different Division
Benches followed the judgment of a learned single Judge of that Court in
Ex. A-2 in which Rs. 11 per sq. yd. was determined as compensation after
deductions and the same was proportionately increased to Rs. 22 per sq.
C yd. due to time lag. Accordingly appeals of the State were allowed and that
of the claimants were dismissed in AS. Nos. 2030/92 & AS. No. 2597/92
dated 8.9.93 and another judgment in A.S. No. 2024/92, 2028/92, 1662 &
1663/93 & AS. Nos. 2029/92 & 2598/92 dated 16.9.93. Thus these appeals
by special leave.
D
Shri 'R. Venugopal Reddy, the learned senior counsel appearing for
the appellants contended that the reasoning adopted by the Division
Benches of the High Court is not correct in law. According to the learned
c~unsel, the lands covered in the judgments under Ex. A-3, Ex. A-4 and
Ex. A-5, in addition to Ex. A-2 also offer comparable basis for determina-
E lion of the compensation. The notifications therein were issued during
period from 1976 to 1982. The different higher rates of compensation have
been granted by the High Court in the appeals. The Division Bench,
therefore, was not right in relying upon Ex. A-2 alone as a basis and
reducing the compensation to Rs.,22 per sq. yd. He has placed before us
F the site plan marked in the case as Ex. Acl. From a perusal of the site plan,
it is seen that the lands bearing ~urvey No. 18 is adjacent to the lands
bearing Survey Nos. 24/2 which ar~ the subject matter of the acquisition
under Ex. A-2. The notification under Ex. A-2 was dated 13.4.1979. A
learned single judge of the High Court, after taking into consideration the
situation of the lands and the development, reduced the compensation to
G 50% of the compensation towards developmental charges and determined
the compensation at Rs. 11 per sq. yd. That order has become final.
Therefore,.,the Division Bench has rightly placed reliance upon that judg-
ment and in view of the time lag between the date of the notification under
Ex. A-2 and the date of the notification in these cases has proportionately
H increased the compensation and fixed the market value at the rate of Rs.
GOWRAMMAv. LAO-CUM-MANDALREVENUEOFFICER 825

22 per sq. yd. after due deductions. Th~ lands under Ex. A-3 and Ex. A-4 A
are situated far away from the lands covered in Survey No. 18. Therefore,
th~ High Court was right in not placing reliance on· those judgments.
Therefore, we find that there is no justification for further increase in
respect of the lands covered in first set of appeals. But with regard to the
lands in Survey No. 271/2, 272/2 and 276/2 we find that there is no B
justification in awarding the same compensation .it Rs. 22 per square yard.
It is seen that these lands are situated on the main road and in developed
area. Though-Mr.· R. Venugopal Reddy, the .learned senior counsel
repeatedly placed reliance on the judgment of the courts in relation to Ex.
A-3 and Ex. A-4, we do not find that· they do offer. any comparable basis
to determine the compensation. But one important factor to be taken note C
of is that the Land Acquisition Officer himself made a distinction between
· the lands covered in Survey Nos. 18 & 20. While granting compensation @
Rs. 7,500, .he
. I
had granted double the rate to these lands, namely, Rs.
.
15,000
.
per acre. In' other words, he had taken the potential value of these lands
. '
into consideration. It is seen that. though there wa< not much development D
except partial development iri the neighbourhood, these lands having been
situated on the main road and abutting the developed area, on the facts
and circumstances, we think that there should be a uniform rate of Rs. 30
per sq. yd.

Accordingly, the appeals and S.L.P; (C) Nos. 14244-14245 & 14686- E
14687/94 are dismissed and appeals and S.L.P. {C) Nos. 16244-16247/94 are
allowed and the market value is determined at Rs. 30 sq. yd. in respect of
all the lands. The claimants are entitled to the benefits under Sections 28,
23(2) and 23(1-A) of the Act of the enhanced solatium; interest and
additional amount @ 9% p.a. for one year and @ 15% p.a. thereafter, from F
the date of taking possession till date of the award. No costs..

R.P.- Appeal Nos. 7033-34/96, 6952-53 are
. dismis~ed and Appeal Nos. 6948-51196
allowed .

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