G.M., Oil & Natural Gas Corporation Ltd vs Rameshbhai Jivanbhai Patel & Anr

(ii) Ex. 16 - relating to acquisition of lands at Chalasana village at a distance of 4 Kms. from Ijapura village under preliminary notification dated 31.7.1986, wherein compensation at the rate of Rs.10 per sq.m was awarded.

The Land Acquisition Officer did not choose to adduce any evidence nor produce the sale deeds referred to in his award in support of the market value arrived at by him at Rs.2.10 per sq. m.

4. The Reference Court allowed the claim in part by Judgment and Award dated 7.10.1999. It determined the market value of the acquired lands at Rs.17.10 per sq.m based on the said two awards - Ex. 15 relating to the neighbouring Santhal village and Ex. 16 relating to Chalsana village. It found that under the said awards Rs.10 per sq. m. has been awarded for acquisitions in the year 1986 and 1987. As the acquisition in the cases on hand was on 15.9.1992, it increased the value cumulatively at the rate of 10% per annum and arrived at a value of Rs.19.10 per sq.m by treating the gap between the relied-on-acquisitions and the present acquisition as six and half years. Thereafter, it reduced Rs.2/- per sq. m. therefrom for the distance factor (distance between Ijapura and the other two villages) to arrive at the market value as Rs.17.10 per sq.m. The Reference Court also awarded additional compensation under section 23(1A) and solatium under section 23(2) of the Act. It awarded interest under section 28 of the Act at 9% PA for a period of one year from the date 4 of taking possession and 15% per annum thereafter, on the actual compensation amount, and not on the additional amount under section 23(1A) or the solatium under section 23(2) of the Act.

454). We are therefore of the view that in the absence of any evidence relating to sale transactions or acquisitions relating to the village of Ijapura itself, and having regard to the evidence relating to proximity 7 of Santhal lands, Ex.15 offered a reasonable basis for determining the market value of the acquired lands in Ijapura. In view of Ex.15 relating to neighbouring Santhal, Ex.16 relating to Chalsana loses relevance.

14. In this case, the acquisition was in a rural area. There was no evidence of any out-of-ordinary developments or increases in prices in the area. We are of the view that providing an escalation of 7.5% 1 3 per annum over the 1987 price under Ex.15, would be sufficient and appropriate to arrive at the market value of acquired lands. Whether the increase should be at a cumulative rate or a flat rate?

15. The increase in market value is calculated with reference to the market value during the immediate preceding year. When market value is sought to be ascertained with reference to a transaction which took place some years before the acquisition, the method adopted is to calculate the year to year increase. As the percentage of increase is always with reference to the previous year's market value, the appropriate method is to calculate the increase cumulatively and not applying a flat rate. The difference between the two methods is shown by the following illustration (with reference to a 10% increase over a basic price of Rs.10/- per sq.m):

5 For what period, the increase should be calculated?

What should be the market value of the acquired land? 1 6

18. By applying a cumulative rate of escalation of 7.5% over the market price of Rs.10 per sq.m in 1987, we find that the market value in the year 1992 was Rs.14.35. The Reference Court and High Court had deducted Rs.2/- towards distance factor. As the lands are similarly situated and are in adjoining villages, it will be sufficient to deduct Rs.1.35 per sq.m. instead of Rs.2/-. We accordingly determine the market value as Rs.13/- per sq. m.

Interest :

Conclusion :

20. We accordingly allow these appeals in part and make the following modification to the award made by the Reference Court confirmed by the High Court: The claimants/respondents will be entitled to compensation at the rate of Rs.13/- per sq. m. with additional amount under section 23(1A) and solatium under section 23(2) as awarded. The respondents-claimants will be entitled to interest at the rates awarded by the reference court (9% per annum for one year and 15 per cent per annum thereafter) on the total compensation amount including additional amount under section 23 (1A) and solatium under section 23(2). Parties to bear their respective costs.