IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR JUDGMENT [PRECEDENT] under [SECTION] of the [ACT], against the order and decree dated 3.12.99 passed by Civil Judge ( Senior Division) Jaipur District Jaipur in [CASE NUMBER] whereby the reference of respondent claimant and others was accepted and amount of compensation was enhanced. Date of Order : September 26 , 2011 PRESENT HONBLE MR. JUSTICE [ENTITY] Mr. [ENTITY], Sr. Advocate with Mr. [ENTITY] for the appellant Mr. [ENTITY] for the respondents. REPORTABLE BY THE COURT :
This misc. appeal has been filed by the appellant under [SECTION] of the [ACT], against the order and decree dated 3.12.99 passed by Civil Judge ( Senior Division) Jaipur District Jaipur in [CASE NUMBER] whereby the reference of respondent claimant and others was accepted and amount of compensation was enhanced.
2. The facts have been set out in the impugned judgment and hence I am not repeating the same here except wherever necessary.
3. Brief facts of the case are that the State of Rajasthan issued a Notification on 30.4.85 under [SECTION] of the [ACT] to the effect that it is necessary to acquire the land measuring 207 bighas and 17 biswas which includes the land of Khasra No. 30 situated in village Damodarpura, Tehsil Bassi for the purpose of laying down 400 KV Electricity Sub Station by National Thermal Power Corporation of India. In pursuance thereof the State of Rajasthan through Department of Energy issued a Notification dated 1.7.85 u/[SECTION] and [SECTION] of the [ACT]. The said Notification was published in [ENTITY] dated 3.7.85. Notices under [SECTION] and [SECTION] of the said Act were also issued. After service of the notice to the affected persons and after public notice of the intention of State Government to take possession of land, the possessions of the part of the land under acquisition was taken on spot on 8.8.85 by the Superintending Engineer (Transmission) [ENTITY] Jaipur. The notices under [SECTION] of the Act was issued to the claimants. The claimants filed their claims before the Land Acquisition Officer. The respondents herein submitted their claim with regard to Khasra No. 29 measuring 8 bighas and 15 biswas. The Land Acquisition Officer gave proper opportunity of hearing to all the parties. The report regarding market value of the land was also called from the concerned Tehsildar. The Land Acquisition Officer on 17.3.86 gave an award. The compensation was ordered to be paid @ 10,000/- per bigha for irrigated land and Rs. 9000/- per bigha for barani land. The compenstion was also fixed for well, structures, trees etc. The claimant non- petitioner submitted an application before the Land Acquisition Officer for making reference against the award dated 17.3.86. Ref. No. 6/87 was filed by [ENTITY] s/o [ENTITY] and others on 26.4.86 The Land Acquisition Officer sent the Reference to the Civil Judge, Jaipur District Jaipur. The Civil Judge, Jaipur District Jaipur registered the reference and gave notice to the concerned parties. The representatives of the Department submitted their replies to the reference on 4.11.95. Issues were framed on 12.7.96. On 3.12.1999 after hearing the parties the Civil Judge Jaipur District passed the award as required by [SECTION] [ACT]. It was held that the claimant is entitled to compensation of the land @ Rs. 13000 per bigha for irrigated land and Rs. 12000 per bigha for barani land. It was also directed that the claimant is entitled to additional compensation @ 12 % from the date of Notification to the date of taking possession under [SECTION] of the [ACT]. Solatium @ 30% was also granted to the claimant. It was also directed that the claimant is entitled to interest @ 9% from the date of taking possession till the end of a year and thereafter up till the date of deposit the amount of compensation in court interest @ 15%. Compension for the trees was also awarded. The claimants were allowed cost of Rs. 2,000/-. In these circumstances against the order of the Civil Judge, the appellant [ENTITY] filed the present appeal.
4. It was argued by Mr. [ENTITY], Sr. Advocate that the Civil Judge has failed to properly appreciate the provisions of [SECTION], and [SECTION] of the [ACT]. It is the duty of the Collector under [SECTION] to tender payment of compensation to the interested persons according to award. Under [SECTION] it is only when the amount of compensation is not paid or deposited before taking possession Collector is to pay amount awarded with interest. There is no provision in law by which the Civil Judge could have asked the appellant to pay the amount of compensation and interest once the amount in accordance with the award has been deposited with the LAO. The burden to prove the issues 1 and 2 was on the claimants and they have not produced any evidence to prove any of these issues. The claimants have failed to produce any evidence under [SECTION] of the Act to show that the market value of the land is Rs. 13,000 per bigha and Rs. 12,000 per bigha for irrigated and barani land. The Civil Judge has committed serious error of law in granting interest on the additional amount of solatium. The amended provisions of [SECTION] of the [ACT] does not comprehend payment of interest on solatium. Interest under [SECTION] cannot be granted on additional amount payable to claimant under [SECTION] of the Act. [SECTION] of the Act only speaks of awarding an amount at a specified rate mentioned therein on market value and does not use the term compensation. No interest can be paid on the payment payable under [SECTION]. The Civil Judge in a similar reference by one [ENTITY] awarded compensation at the rate of Rs. 10,000/- and Rs. 9,000 per bigha for all the land, but the Civil Judge has now in the present case fixed the rate of land as Rs. 13000 and Rs. 12000. The Civil Judge has committed serious error in granting interest @ 9 % from the date of taking possession and 15% thereafter till the deposit of compensation in court. The Civil Judge has not properly considered and gave finding on issues 3, 4, 5 and 6. The Civil Judge has committed error in granting cost of Rs. 2,000/-.
5. Mr. [ENTITY], learned counsel appearing on behalf of the claimant respondents has argued that the Civil Judge after considering the points raised by the claimants determined compensation looking to the land in nearby area and market value of the land. The judgment passed by the Civil Judge is just and proper and does not call for any interference in the appeal filed by the [ENTITY]. He has placed reliance on [PRECEDENT].
6. Before proceeding further it would be necessary to have a look at the provisions of the Act and the important decisions of the Apex Court relating to the arguments raised by the parties.
In [PRECEDENT] the three-Judge Bench of the Apex Court considered the scope of the expression market value in [SECTION] of the [ACT]. By the said Amendment Act certain changes were effected in the principal Act. [SECTION] of the Amendment Act provided that simple interest shall be paid at the rate of 6% per annum on the market value of such land, as determined under [SECTION] of the Principal Act from the date of expiry of three years to the date of notification under [SECTION] of the principal Act. The Apex Court held that solatium cannot form part of the market value of the land. It was also held that market value is only one of the components to be reckoned with in the determination of the amount of compensation. In [PRECEDENT] the Apex Court in para 7 observed as under :
If market value and compensation were intended by the legislature to have the same meaning it is difficult to comprehend why the word compensation in [SECTION] and [SECTION] and not market value was used. The key to the meaning of the word compensation is to be found in [SECTION] and that consists (a) of the market value of the land, and (b) the sum of 15% on such market value which is stated to be the consideration for the compulsory nature of the acquisition. Market value is therefore only one of the components in the determination of the amount of compensation. If the legislature has used the word market value in [SECTION] of the [ACT] it must be held that it was done deliberately and what was intended was that interest should be payable on the market value of the land and not on the amount of compensation otherwise there was no reason why Parliament should not have employed the word compensation in the aforesaid provision of the amending Act. (emphasis supplied) The decision of Apex Court in [PRECEDENT] was followed by a two-Judge Bench of the Apex Court in [PRECEDENT] Learned Judges ([ENTITY], J., as he then was, and [ENTITY], J.) in the concluding part of that decision said as follows: (SCC p. 211, para 24) Therefore, we have no hesitation to hold that [SECTION] contemplates payment of interests on solatium to re-compensate the owner of the land for loss of user of the land from the date of taking possession till date of payment into court. The word compensation has been advisedly used by the legislature. Accordingly we hold that the appellant is entitled to interest on solatium.
The turn of the tide in the reverse direction commenced when a three-Judge Bench of the Apex Court adopted the contrary view in [ENTITY]n v. Special Dy. Collector (1995) 3 SCC 208 wherein the Apex Court held that solatium is not a part of the award and hence interest is not claimable thereon. The decision of the three-Judge Bench of the Apex Court in [PRECEDENT] (supra) was not referred to in [ENTITY] (supra) presumably because it would not have been brought to the notice of the Apex Court. Another three-Judge Bench of the Apex Court in [PRECEDENT] while considering the question whether an awardee is entitled to appropriate amount of compensation first towards cost and then towards interest etc., the Apex Court made the following observations :
The liability to pay interest is only on the excess amount of compensation determined under [SECTION] and not on the amount already determined by the Land Acquisition Officer under [SECTION] and paid to the party or deposited into the court or determined under [SECTION] or [SECTION] and deposited into the court or on solatium under [SECTION] and additional amount under [SECTION].
But the question whether solatium is part of the compensation did not positively arise in the said decision nor has it been gone into by the Apex Court. Such a question has been considered directly by another three-Judge Bench ([ENTITY], [ENTITY] and [ENTITY], JJ.) of the Apex Court in [PRECEDENT]. The Apex Court made a reference to the observation of the Apex Court in two-Judge Bench in [PRECEDENT] to the effect that solatium is the component forming the compensation mentioned in [SECTION] of the Act and hence interest would accrue on it. Nonetheless, the Apex Court dissented from the view in [PRECEDENT] by stating that unfortunately, neither the provisions (of the Act) were considered nor the distinction of the above provisions had been brought to the notice of the Apex Court at that time. The Apex Court referred to [SECTION] of the Act and laid emphasis on the words in addition to the market value in [SECTION]. The Apex Court in [PRECEDENT] held as under :
The legislature, therefore, made a distinction between compensation under [SECTION] and the additional amount on such market value as solatium in consideration of compulsory nature of acquisition. In other words, [SECTION] does not comprehend payment of interest on solatium when it expressly mentions payment of interest on compensation under [SECTION] referable to [SECTION] of the Act.
[SECTION] of the Act enjoins on the Collector the statutory duty to conduct an enquiry into the value of the land on the date of publication of the notification under [SECTION] of the Act and to make an award for the compensation which in his opinion should be allowed for the land. [SECTION] of the Act casts an obligation on the Collector that after making the award under [SECTION], he shall tender payment of the compensation awarded by him to the persons entitled to it according to the award. This means that law does not relish any delay in making the payment once the award is made. Thus, making the award shall normally follow payment of compensation as expeditiously as possible.
[SECTION] empowers the Collector to take possession of the land after making the award under [SECTION]. When possession is so taken the land shall vest absolutely in the Government free from all encumbrances. This is the statutory operation which is clearly envisaged in [SECTION] itself. But in the absence of a legal insistence that the amount awarded should necessarily be paid before taking possession of the land, it could happen, perhaps quite often, that there would be some interregnum between the date of taking possession and making payment of the awarded sum.
Question of payment of interest would arise only when the compensation is not paid or deposited on or before the date of taking possession of the land. It is inequitable that the person who is deprived of the possession of the land on account of acquisition proceedings is not given the amount which law demands to be paid to him; any delay thereafter would only be to his detriment. There must be a provision to buffet such iniquity. It is for the purpose of affording relief to the person who is entitled to such compensation when the payment of his money is delayed that the provision is made in [SECTION] of the Act. [SECTION] of the Act is extracted below:
[SECTION]. Payment of interest.When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited:
Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is 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 compensation or part thereof which has not been paid or deposited before the date of such expiry.
When the court is of the opinion that the Collector should have awarded a larger sum as compensation the court has to direct the Collector to pay interest on such excess amount. The rate of interest is on a par with the rate indicated in [SECTION]. This is so provided in [SECTION] of the Act which is extracted below:
28. 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 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 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 Apex Court in [PRECEDENT], held as under :
16. Thus interest has to accrue as per [SECTION] and [SECTION] of the Act on the compensation awarded, whether it is as per the award initially passed by the Collector or by the court later. What is meant by the compensation awarded? Both sides cited different definitions for the word compensation as contained in different lexicographics. In Words and Phrases (Permanent Edn.) different connotations of the word compensation have been delineated. One of them relates to the law of eminent domain, where compensation means recompense in value, a quid pro quo, and must be in money. Another is relating to the property taken for public use. Then it is the fair market value at the time of taking it. From the constitutional perspective the word compensation for the property taken was understood as the just equivalent of the value of the property. But when compensation is regarded as a statutory obligation the aforecited definitions need not detract the courts in fathoming the real import of it. The exercise can be done with the aid of the provisions in the statutes. So what the court, in the context of land acquisition, has to decide is how the Act has designed the compensation vis vis the liability to pay interest. In this context we have to read [SECTION] of the Act. It is extracted below:
23. Matters to be considered in determining compensation.(1) In determining the amount of compensation to be awarded for land acquired under this Act, the court shall take into consideration first, the market value of the land at the date of the publication of the notification under Section 4 sub-section (1);
secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector's taking possession thereof;
thirdly, the damage (if any) sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of severing such land from his other land;
fourthly, the damage (if any) sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings;
fifthly, if, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the declaration under [SECTION] and the time of the Collector's taking possession of the land.
(1-A) In addition to the market value of the land, as above provided, the court shall in every case award an amount calculated at the rate of twelve per centum per annum on such market value for the period commencing on and from the date of the publication of the notification under Section 4 sub-section (1), in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier.
* * * (2) In addition to the market value of the land, as above provided, the court shall in every case award a sum of thirty per centum on such market value, in consideration of the compulsory nature of the acquisition.
The Apex Court In [PRECEDENT] further held in paras 18 to 27 as under:
18. [SECTION] of the Act consists of a catalogue of matters which shall not be taken into account while determining compensation. The title of the section is Matters to be neglected in determining compensation. The key words are but the court shall not take into consideration the matters enumerated thereunder. The argument is that whatever items have been mentioned therein, even if included in the award would not partake of the character of compensation as the legislature has imposed a ban against reckoning them to be so treated. Any amount paid on account of any disinclination of the person interested to part with the land acquired (vide clause secondly in [SECTION]) would thus be kept outside the ambit of the compensation for land, and those excluded items, even if payable, have different shades or character, according to the counsel. In further support of the said contention reference was made to [SECTION] of the Act which reads as follows:
26. Form of awards.(1) Every award under this Part shall be in writing signed by the Judge, and shall specify the amount awarded under [SECTION], and also the amounts (if any) respectively awarded under each of the other clauses of the same sub-section, together with the grounds of awarding each of the said amounts.
(2) Every such award shall be deemed to be a decree and the statement of the grounds of every such award a judgment within the meaning of Section 2 clause (2) and Section 2 clause (9), respectively, of the [ACT].
19. [SECTION] does not say that the award would contain only the amounts granted under [SECTION]. The special mention of that sub-section in [SECTION] is only for the purpose of directing that the grounds or reasons for awarding the amount under each of the clauses in the sub-section shall be specified in the award. It is unnecessary to mention any reason or ground in any award as to why the sums indicated in [SECTION] and [SECTION] of the Act were granted, because they are only the sequels or concomitant adjuncts of the determination of the total amount indicated in sub-section (1). No judicial exercise is required to quantify the sums mentioned in [SECTION] or sub-section (2) because the section itself specifies the percentage to be worked out for the purpose of adding to the total amount arrived at under sub-section (1). Otherwise [SECTION] is not intended to show that the compensation awarded would be bereft of the additional amount and the solatium envisaged under [SECTION] or sub-section (2). This can be clearly discerned from the commencing words of [SECTION] itself. They are: Every award under this Part shall be in writing signed by the Judge. What is referred to therein is [SECTION] of the Act which comprises of a fasciculus of twelve provisions starting with [SECTION] and ending with [SECTION] of the Act. There can be no doubt that all the three heads specified in the three sub-sections in [SECTION] are the sums to be awarded by the court. Hence the words every award under this Part cannot be treated as the award after delinking the amounts awarded under [SECTION] or [SECTION].
20. We may now see whether exclusion of the factor any disinclination of the person interested to part with the land acquired from being considered as part of the compensation indicated in [SECTION] of the Act would be of any aid for excluding solatium from the purview of interest accrual process. No doubt what is intended under [SECTION] is additional to the market value of the land and in consideration of the compulsory nature of the acquisition. But it cannot be equated with any damage caused on account of any disinclination of the person to part with the land acquired.
21. It is apposite in this context to point out that during the enquiry contemplated under [SECTION] of the Act the Collector has to consider the objections which any person interested has stated pursuant to the notice given to him. It may be possible that a person so interested would advance objections for highlighting his disinclination to part with the land acquired on account of a variety of grounds, such as sentimental or religious or psychological or traditional etc. [SECTION] emphasises that no amount on account of any disinclination of the person interested to part with the land shall be granted as compensation. That aspect is qualitatively different from the solatium which the legislature wanted to provide in consideration of the compulsory nature of the acquisition.
22. Compulsory nature of acquisition is to be distinguished from voluntary sale or transfer. In the latter, the landowner has the widest advantage in finding out a would-be buyer and in negotiating with him regarding the sale price. Even in such negotiations or haggling, normally no landowner would bargain for any amount in consideration of his disinclination to part with the land. The mere fact that he is negotiating for sale of the land would show that he is willing to part with the land. The owner is free to settle terms of transfer and choose the buyer as also to appoint the point of time when he would be receiving consideration and parting with his title and possession over the land. But in the compulsory acquisition the landowner is deprived of the right and opportunity to negotiate and bargain for the sale price. It depends on what the Collector or the court fixes as per the provisions of the Act. The solatium envisaged in sub-section (2) in consideration of the compulsory nature of the acquisition is thus not the same as damages on account of the disinclination to part with the land acquired.
23. In deciding the question as to what amount would bear interest under [SECTION] of the Act, a peep into [SECTION] of the Act would be advantageous. That sub-section says:
31. (1) On making an award under [SECTION], the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award, and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next sub-section.
The remaining sub-sections in that provision only deal with the contingencies in which the Collector has to deposit the amount instead of paying it to the party concerned. It is the legal obligation of the Collector to pay the compensation awarded by him to the party entitled thereto. We make it clear that the compensation awarded would include not only the total sum arrived at as per [SECTION] but the remaining sub-sections thereof as well. It is thus clear from [SECTION] that the expression awarded amount would mean the amount of compensation worked out in accordance with the provisions contained in [SECTION], including all the sub-sections thereof.
24. The [SECTION] of the Act makes the position further clear. The proviso says that if such compensation is not paid within one year from the date of taking possession of the land, interest shall stand escalated to 15% per annum from the date of expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry. It is inconceivable that the solatium amount would attract only the escalated rate of interest from the expiry of one year and that there would be no interest on solatium during the preceding period. What the legislature intended was to make the aggregate amount under [SECTION] of the Act to reach the hands of the person as and when the award is passed, at any rate as soon as he is deprived of the possession of his land. Any delay in making payment of the said sum should enable the party to have interest on the said sum until he receives the payment. Splitting up the compensation into different components for the purpose of payment of interest under [SECTION] was not in the contemplation of the legislature when that section was framed or enacted.
25. We may also point out that different High Courts have taken the same view in the following decisions: [PRECEDENT], [PRECEDENT], [PRECEDENT] and [PRECEDENT].
26. We think it useful to quote the reasoning advanced by Chief Justice [ENTITY] of the Division Bench of the Punjab and Haryana High Court in [PRECEDENT] held thus :
Once it is held as it inevitably must be that the solatium provided for under [SECTION] of the Act forms an integral and statutory part of the compensation awarded to a landowner, then from the plain terms of [SECTION] of the Act, it would be evident that the interest is payable on the compensation awarded and not merely on the market value of the land. Indeed the language of [SECTION] does not even remotely refer to market value alone and in terms talks of compensation or the sum equivalent thereto. The interest awardable under [SECTION] therefore would include within its ambit both the market value and the statutory solatium. It would be thus evident that the provisions of [SECTION] in terms warrant and authorise the grant of interest on solatium as well.
27. In our view the aforesaid statement of law is in accord with the sound principles of interpretation. Hence the person entitled to the compensation awarded is also entitled to get interest on the aggregate amount including solatium. The reference is answered accordingly.
7. Now I may consider the judgment of the Civil Judge dated 3.12.1999 in relation to market value of the land. The Civil Judge held as under :
, , ? 1/87 . . . . . . : 15-20 25 : ? 4(1 )
8. The Civil Judge looking to the over all circumstances determined the market value of the irrigated land as Rs. 13,000/- per bigha and for barani land as Rs. 12,000/- per bigha. This market value determined by the Civil Judge looking to the over all circumstances cannot be said to be perverse. I am in agreement with the findings arrived at by the Civil Judge in relation to market value of the land. The Civil Judge rightly rejected the claim of the claimant in relation to structures, trees etc. standing on the land in question. I am also in agreement with the findings arrived at by the Civil Judge on this point.
9. The other arguments raised by the learned counsel for the appellant are covered by the decision of the Apex Court in [PRECEDENT], and now there is no need to make any further comments as per the law laid down by the Apex Court. Thus the arguments of the learned counsel for the appellant being devoid of merit stand rejected. The findings of the Civil Judge are based on the basis of the rulings of the Apex Court mentioned above and hence stand confirmed.
10. For the reasons mentioned above, this misc. appeal filed by the appellant stands rejected. The order and decree dated 3.12.99 passed by Civil Judge ( Senior Division) Jaipur District Jaipur in [CASE NUMBER] stands confirmed. The stay applications also stand rejected. The interim stay if any granted by this court stands vacated. The record of the case if received may be sent back to the Civil Judge (Senior Division) Jaipur District, Jaipur. The parties are directed to bear their own costs.
([ENTITY] )J. OPPareek/ All corrections made in the judgment/order have been incorporated in the judgment/ order being emailed (O P Pareek) PS-cum JW