IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD PRESENT : : HONOURABLE SRI JUSTICE B.PRAKASH RAO AND HONOURABLE SRI JUSTICE P.DURGA PRASAD L.A.A.S.NO.453 OF 2005 Date:27.04.2011 Between:- The Singareni Collieries Company Limited .. Appellant. A N D Nadipalli Hanumantha Rao and another. .. Respondents. The Court made the following: JUDGMENT: (per the Hon’ble Sri Justice P.Durga Prasad) This is an appeal filed under Section 54 of Land Acquisition Act, 1894 against the Order passed in O.P.No.83 of 2000 by the Senior Civil Judge, Peddapalli on 08.09.2004. The appellant herein is the 2nd respondent in the said O.P. and the beneficiary of the land acquired by the 1st respondent therein and he is questioning the awarding of compensation of Rs.40,000/- per acre by the lower Court. The claimant in the said O.P. has filed the cross objections for enhancement of the compensation to Rs.10,00,000/- per acre for the lands acquired by the 1st respondent therein. The Land Acquisition Officer-cum-Special Deputy Collector, Godavarikhani has made reference under Section 18 of the Land Acquisition Act for fixation of the market value of Ac.4.32 guntas situated in Jangaon village of Ramagundam Mandal of Karimnagar District acquired by them for Singareni Collieries. The Land Acquisition Officer issued a draft notification under Section 4 (1) of the Land Acquisition Act on 30.09.1996 and after following the procedure prescribed passed an award granting of Rs.9,500/- per acre. Not satisfied with the compensation granted by the Land Acquisition Officer, the claimants have made an application for reference to the Court and accordingly a reference was made under Section 18 of the Land Acquisition Act before the Senior Civil Judge, Peddapalli. The claimants have filed their claim statements pleading that the Land Acquisition Officer has acquired the land to the extent of 01.39 guntas out of Survey No.787/C and Ac.2.33 guntas out of Survey No.839/A, situated at Jangaon Village of Ramagundam Mandal for Construction of sand dumping yard and intake well road of Singareni Collieries Company Limited, Godavarikhani and passed an award on 31.07.2000 awarding compensation of Rs.9,500/- per acre. According to the claimants, the acquired lands are situated within the distance of one K.M. from the bus-stand of Godavarikhani and Mancherial city is having Associated Cement Company, Indaram Coal Mines, Fertiliser City and NTPC., Power Station etc., are situated within the vicinity of the acquired lands. The acquired lands are being located adjacent to the residential locality of the Jangaon village and the acquired lands are potential for house sites and the real estate dealer at Godavarikhani i.e. E.Narasaiah and others have intended to purchase the acquired lands for lay out and sale as ‘house-sites’ and they have offered Rs.25,000/- per gunta for the acquired lands, but due to the acquisition, the said proposal could not be materialized. The acquired lands are very fertile lands situated on the bank of Godavari river and they are rising commercial crops like sun-flower, cotton, groundnut and pulses and used to get a net income of Rs.25,000/- and above per annum per acre. The contents of the award and the sale documents cited in the award also supports the claim of Rs.10,00,000/- per acre as compensation but the Land Acquisition Officer has selected only the sale deed of 1983 which suited his mind to support his award at lower rate. Hence, they are entitled for Rs.10,00,000/- per acre for the acquired land and Rs.20,000/- per acre towards sub-soil mineral rights. Counter was filed by the respondents stating that the Land Acquisition Officer has awarded just and reasonable compensation. The categorization of the acquired land is dry as per revenue records and also as per spot inspection. The lands in Survey No.389/A are falling in high flood level of River Godavari and are not suitable for construction of houses. Godavarikhani bus-stand is 3 K.Ms away from the acquired lands. River Godavari is about 1.5 K.Ms from the acquired land and there is no source of water to the acquired lands and no commercial crops like cotton, sunflower, groundnut, pulses etc., cannot be raised in the said land and also denied deriving of income of Rs.25,000/- per acre by the claimants. The sale document adopted by the Land Acquisition Officer for fixing the value of the acquired lands is proper and justifiable. In support of the claim of the claimants, the 1st claimant examined himself as P.W.1 and also examined P.Ws.2 to 4 on his behalf and got marked Exs.A.1 to A.3. On behalf of the respondent company, R.Ws.1 to 3 were examined and Exs.B.1 to B.3 were marked. The lower Court by taking into consideration of Ex.A.2 sale deed, under which, One acre of land was sold for Rs.96,000/- per acre and after giving deduction, granted Rs.40,000/- per acre for the acquired land. Aggrieved by the said enhancement of the compensation from Rs.9,500/- to Rs.40,000/- per acre, the beneficiary i.e. Singareni Collieries Company Limited has filed the present appeal and the claimant has filed cross objections for enhancement of the compensation to Rs.10,00,000/- per acre. The points that arise for consideration are: (1) What is the just compensation payable to the claimant for the acquired lands? (2) Whether the claimant is entitled to the interest prior to issuance of the 4 (1) notification? P O I N T No.1: On behalf of the claimants, Exs.A.1 to A.3 were marked. Ex.A.1 is the sale deed dated 16.08.1983, under which 0.15 guntas was sold for Rs.45,375/- and the said land is in Survey No.589 of Jangaon Village. Ex.A.2 is the sale deed dated 13.05.1985, under which 0.10 guntas was sold for Rs.24,200/- , and the said land is in Survey No.647 of Jangaon Village. Under Ex.A.3 sale deed dated 20.12.1985, 0.10 guntas was sold for Rs.46,000/-, which is in Survey NO.663 Jangaon village. Exs.A.1 and A.3 were not proved by the claimants as none of the parties to the said documents were examined before the lower Court. In order to prove Ex.A.2, the claimants have examined P.Ws.2 and 3, who are the vendor and purchaser of the said land under the said document. Therefore, the lower Court has found that the transaction under Ex.A.2 is a genuine transaction and relied upon said transaction and arrived at the compensation. The appellant’s counsel has pleaded that the land covered by Ex.A.2 is in the developed area in the Jangaon village and whereas the acquired land is dry land located far away from the land covered by Ex.A.2 and therefore, the same cannot be taken as comparative sale for fixing the compensation for the acquired land. The appellant’s counsel has further pleaded that the Land Acquisition Officer has rightly relied upon Ex.B.2 sale transaction, under which Ac.1.00 of land was sold at Rs.7,000/-, which is in Survey No.396 and according to him the said land is at a distance of 1.5 K.M from the acquired land. The appellant’s counsel in support of his contention relied upon the evidence of R.Ws.1 to 3. R.W.1 is the Special Deputy Tahasildar of Godavarikhani and he is only giving evidence basing on the record available with him in respect of the award passed on 31.07.2000. According to him, the sale deed relied upon by the claimants are falling in Residential, commercial and thickly populated areas of Laxminagar and Addaguntapalli locality of Godavarikhani town, whereas the lands acquired were agricultural lands in Janagoan village and there was no residential activity or any other activity. As such, the Land Acquisition Officer has rightly discarded the said documents. In the cross-examination, he admitted that half of the Jangeon village converted as Godavarikhani and Godavarikhani situated in the Revenue village of Jangeon, and that Ramagundam Special Grade Municipal Office situated in Jangeon village. I-Town police station, Traffic police station, Excise police station, D.S.P. Office are situated in Jangeon village. Godavarikhani Bus-stand and Bus-Depot are situated in Jangeon village. He admitted that Godavarikhani is not revenue village and that Rajeev state High- way passes through the Jangeon village lands. R.W.2 is the Estates Officer of the Singareni Colleries Company Limited and he has only inspected acquired lands and the land relied upon by the Land Acquisition Officer and claimants. R.W.3 is the Deputy Superintending Survey Officer of RG-1 Area of the Singareni Collieries company limited. According to him, he surveyed the lands and prepared rough sketch, which is marked as Ex.B.3. The appellant’s counsel basing on Ex.B.3 has pleaded that the acquired lands are far away from the lands covered under Ex.A.2, as such the sale cannot be taken as comparable sale for fixing market value for the acquired lands. Ex.B.3 is only the rough sketch prepared by R.W.3, but it shows the location of the land covered by Ex.A.2 and the acquired lands and the sale transaction relied upon by the Land Acquisition Officer. In the present case, the draft notification was issued on 30.09.1996 for acquiring the land in Survey No.839/A and 787/c of Jangoan village. The Land Acquisition Officer relied upon by the sale transaction covered by Ex.B.2 dated 16.06.1983, which is Survey No.396 under which AC.1.00 of land was sold at Rs.7,000/- and by adding Rs.2,500/- as increase in the rate from 1983, awarded Rs.9,500/-. Whereas the land covered by Ex.A.2 is in Survey No.647 of Jangaon village, under which 0.10 guntas of land was sold at Rs.24,200/- on 13.05.1985 and the said document was proved by P.Ws.2 and 3. As per the evidence of P.Ws.1 to 3, it is evident that the land acquired are within Jangaon village and the lands covered by Ex.A.2 is also within Jangaon village. Ex.B.3 rough sketch prepared by R.W.3 shows the location of the said lands and admittedly the land covered under Ex.A.2 is near the residential area and whereas acquired land is a dry land, is far away from the said land covered by Ex.A.2. Moreover, the land covered by Ex.B.2 is also at a distance of 2.5 K.Ms from the acquired land. Moreover, as per Ex.B.1 award there are other sale transactions prior to 4 (1) notification in Jangaon village, but the Land Acquisition Officer has taken into consideration of the sale transaction dated 16.06.1983 under which one acre was sold for Rs.7,000/- and added Rs.2,500/- towards escalation in the price from the date of sale transaction till the date of 4 (1) notification. Admittedly, the acquired lands are near the Godavari river as admitted by P.Ws.1 to 3, which is at a distance of 1.5 K.Ms from Godavari river and the land covered under Ex.A.2 is adjacent to the residential locality of Jangaon village, and as admitted by P.Ws.1 to 3 the Jangaon village is Grade-I Municipality and it is developed area and the acquired lands are in the said village, as such the lower Court has rightly taken into consideration of Ex.A.2 and after giving deduction of more than 50% arrived at the market value of Rs.40,000/- per acre. In a decision rendered in “CHATURBHUJA MODI AND OTHERS v. STATE OF ORISSA AND ANOTHER”[1], wherein the Apex Court held that while determining the market value of land, on the basis of comparable sale deeds, deductions to be made when large tracts required to valued with regard to small plots and appropriate deduction has to be made for making allowance for the loss of the acquired land required to be used for internal development such as construction of roads, drains, sewers, open spaces and the expenditure involved in providing other amenities like water, electricity etc. The extent of area required to be set apart has to be assessed by the Court having regard to the shape, size and situation of the concerned block of land. The Supreme Court has taken of the rate fixed by the High Court at Rs.3,00,000/- per acre, as against Rs.5,50,200/- per acre shown in Ex.X.1 involving sale of a small piece of land measuring Ac.0.070 cents and held the said fixation of the compensation for the land acquired is just and proper. In another decision rendered in “A.P.HOUSING BOARD v. K.MANOHAR REDDY AND OTHERS”[2]. Wherein the Apex Court held that appropriate deduction towards development charges ranges from 20% to 75% can be made befitting the situation, location and the nature of the land in arriving at the compensation for the acquired land. In the present case, as observed above, the acquired lands are far away from the lands covered by Ex.A.2 and also the sale transaction relied upon by the Land Acquisition Officer and the lower Court has rightly fixed the compensation of Rs.40,000/- even though the said transaction covered under Ex.A.2 is at Rs.96,000/- per acre. Thus, the said findings of the lower Court does not warrant any interference by this Court. The contention of the respondents’ counsel is that the compensation for the acquired lands to be fixed at Rs.10,00,000/- cannot be accepted in view of the reasons stated above and therefore, the claimants are not entitled for any enhancement of the compensation as claimed by them. P O I N T No.2: The appellant’s counsel has questioned awarding of interest at 9% per annum from the date of taking possession for a period of one year and thereafter at the rate of 15 % per annum on the enhanced compensation amount, solatium and additional market value till the enhanced compensation amount is paid or deposited into court, on the ground that the claimants are not entitled for any interest for the period prior to issuance of the draft notification. As per the award the draft notification was issued on 30.09.1996, whereas the possession was taken in the year 1963. The appellant’s counsel has relied upon a decision rendered in “R.L.Jain (died) by LRS. V. DDA and Others”[3]. Wherein it was held that the words “such compensation” and “so taking possession” are important and have to be given meaning in the light of other provisions of the Act. “Such compensation” would mean the compensation determined in accordance with other provisiosn of the Act, namely, Sections 11 and 15 of the Act which by virtue of Section 23 (1) mean market value of the land on the date of notification under Section 4 (1) and other amounts like statutory sum under sub-section (1-A) and solatium under sub- section (2) of Section 23. The heading of Part II of the Act is “Acquisition” and there is a sub-heading “Taking Possession” which contains Sections 16 and 17 of the Act. The words “so taking possession” would therefore mean taking possession in accordance with Section 16 or 17 of the Act. There are the only two sections in the Act which specifically deal with the subject of taking possession of the acquired land. Clearly, the stage for taking possession under the aforesaid provisions would be reached only after publication of the notification under Sections 4 (1) and 9 (1) of the Act. If possession is taken prior to the issuance of the notification under Section 4 (1) it would not be in accordance with Section 16 or 17 and will be without any authority of law and consequently cannot be recognized for the purpose of the Act. It is also further observed that in a case where the landowner is dispossessed prior to the issuance of preliminary notification under Section 4 (1) of the Act the Government merely takes possession of the land but the title thereof continues to vest with the landowner. It is fully open for the landowner to recover the possession of his land by taking appropriate legal proceedings. He is therefore only entitled to get rent or damages for use and occupation for the period the Government retains possession of the property. Where possession is taken prior to the issuance of the preliminary notification, in our opinion, it will be just and equitable that the Collector may also determine the rent or damages for use of the property to which the landowner is entitled while determining the compensation amount payable to the landowner for the acquisition of the property. The provisions of Section 48 of the Act lend support to such a course of action. For delayed payment of such amount appropriate interest at prevailing bank rate may be awarded. Therefore, in view of the observations made in the above said decision, claimants are not entitled for interest for taking possession of the land prior to 4 (1) notification, but they are only entitled for rent and damages to be fixed by the Collector concerned. In the result, the appeal filed by the Singareni Collieries Company Limited is partly allowed by setting aside the interest awarded by the lower Court for the period prior to issuance of 4 (1) notification, for taking possession of the said land. However, the claimants are entitled for rent and damages for taking possession of the land prior to issuance of notification, which is to be determined by the Collector and the claimants are entitled to take appropriate steps in that regard. The cross objections of the claimant is dismissed. No costs. _____________________ B.PRAKASH RAO, J _____________________ P.DURGA PRASAD,J 27th April, 2011 KSP [1] 2011 (1) ALD 13 (SC) [2] 2011 (1) ALD 117 (SC) [3] (2004) 4 Supreme Court Cases 79