Case: State of Mysore Vs. T. Digambar Rao

to 85 per cent (excluding 15 per cent solatium) and directing that the ex gratia payment be deferred in respect of buildings until the colonisation scheme was finalised.6. The Special Deputy Collector, No. 2 Tungabhadra Project (hereinafter referred to as the Land Acquisition Officer) made an award on November 30, 1950 fixing the compensation payable to the respondent at Rs. 50, 811-11-7. The respondent applied for a reference under Section 18 of the Act and the case was referred to the Sub-Judge, Bellary, on the question of compensation. He enhanced the compensation by Rs. 42, 347-13-11. Against that order, the Land Acquisition Officer filed an appeal in the High Court of Mysore. The High Court fixed the compensation payable to the respondent at Rs. 61, 255-10-0. After the decision of the High Court, the respondent made an application to the Government of Mysore for payment of ex gratia amount. The Government, by its letter dated February 9, 1962, rejected the application stating that his claim was untenable. It was to quash this order that the respondent filed the aforesaid writ petition.7. The High Court held that the respondent was entitled to ex gratia payment of 85 per cent on the compensation as fixed by it.8. The appellant, the State of Mysore, contended that the Madras Government undertook no legal liability to make ex gratia payment by the aforesaid orders and, therefore, no liability could devolve upon the successor State and that the quantum of ex gratia payment ordered to be given by the High Court was contrary to the terms of the order passed by the Government of Madras in that behalf.9. As regards the first contention, it was argued for the appellant that the orders, even though passed by the Governor of Madras, were administrative in character and did not create justiciable right in the respondent and that even if the orders could be construed as implying a promise to make the payment, it was not supported by consideration.10. Section 66 of the Andhra State Act, 1953, provides, in substance, that the liability in connection with the Tungabhadra Project incurred by the Government of Madras will pass on to the successor State and therefore, if the orders passed by the Madras Government created a legal liability on the Government of Madras to make the ex gratia payment and a corresponding right in the respondent.11. The appellant did not file any return before the High Court. The argument of the appellant before the High Court was that the liability of the Madras Government did not devolve upon the appellant and not that there was no liability upon the Government of Madras by virtue of these orders. It may be noted that the notification under Section 4(1) of the Act was published in 1941 and there was phenomenal rise in the market value of the lands thereafter. As already stated, it was only in 1949 that the Government published the notification under Section 6 of the Act. If the appellant had filed a return stating that the order to make the ex gratia payment did not create any liability upon the Government, the respondent could have shown how the payment, though termed ex gratia, created legal liability, as the Government of Madras undertook the liability in consideration of the forbearance of the respondent to resort to court for quashing the notification under Section 4(1) of the Act. The respondent submitted that as he was denied the opportunity to show that the Government of Madras promised to make the ex gratia payment in consideration of his forbearing to resort to civil court for quashing the notification under Section 4(1), the appellant should not be permitted to urge the plea at this stage. We think that there is great force in this contention and accept it.12. We feel no doubt that if the Madras Government was liable to make the ex gratia payment, that liability devolved on the appellant under Section 66 of the Andhra State Act, 1953.13. The second contention of the appellant was that the ex gratia payment should be computed only on the basis of the compensation fixed by the Land Acquisition Officer in his award and even if the civil court were to increase the compensation amount, the ex gratia payment should not exceed 85 per cent of the 1941 valuation and that no such amount need be paid at all where the court awards an amount either equal to or in excess of 1941 valuation plus 15 per cent solatium and 85 per cent ex gratia.14. The High Court was of the view that when the court, on reference, enhanced the compensation, the ex gratia, payment has to be made on the basis of the enhanced compensation and not on the basis of the amount of compensation fixed by the Land Acquisition Officer in his award and that no other reading of the order May 12, 1948 is permissible. This, in our opinion, is not correct. That order seems to us to make sense only if we read it as importing liability to make ex gratia payment of 85 per cent of the market value of the land as fixed by the Land Acquisition Officer in his award and that no ex gratia amount need be paid at all where the court awards an amount either equal to or in excess of 1941 valuation plus 15 per cent solatium and 85 per cent ex gratia on the 1941 valuation of the Land Acquisition Officer.15. The market value of the lands in question in 1941 as fixed by the Land Acquisition Officer in his award is Rs. 50, 811-11-7. The ex gratia payment should not exceed 85 per cent of this amount and that comes to Rs. 43, 191. Out of this amount, we have to deduct the compensation awarded in excess (over and above that awarded by the Land Acquisition Officer) by the High Court which is Rs. 10, 443 (i.e. Rs. 61, 255-10-0 minus Rs. 50, 811-11-7).

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]14. The High Court was of the view that when the court, on reference, enhanced the compensation, the ex gratia, payment has to be made on the basis of the enhanced compensation and not on the basis of the amount of compensation fixed by the Land Acquisition Officer in his award and that no other reading of the order May 12, 1948 is permissible. This, in our opinion, is not correct. That order seems to us to make sense only if we read it as importing liability to make ex gratia payment of 85 per cent of the market value of the land as fixed by the Land Acquisition Officer in his award and that no ex gratia amount need be paid at all where the court awards an amount either equal to or in excess of 1941 valuation plus 15 per cent solatium and 85 per cent ex gratia on the 1941 valuation of the Land Acquisition Officer.15. The market value of the lands in question in 1941 as fixed by the Land Acquisition Officer in his award is Rs. 50,The ex gratia payment should not exceed 85 per cent of this amount and that comes to Rs. 43, 191. Out of this amount, we have to deduct the compensation awarded in excess (over and above that awarded by the Land Acquisition Officer) by the High Court which is Rs. 10, 443 (i.e. Rs. 61,minus Rs. 50,