Case: Sagunthala(Dead) Thr. Lrs Vs. Special Tahsildar (L.A.)

2. Facts relevant to the present dispute are that an extent of 196 acres of lands were acquired for the purpose of expansion of Tamil Nadu Magnesite Limited, a State owned company. Various notifications under Section 4 (1) of the Land Acquisition Act, 1894 (hereinafter referred to as "the Act") were issued in the month of February, March and May 19843. In connection with giving compensation for that acquisition, the Land Acquisition Officer had fixed the market value at the rate of Rs.18,000/- per acre for irrigated dry land and Rs.15,000/- per acre for unirrigated dry land in Award Nos. 1 to 9 and 11 of 19864. As the claimants felt aggrieved by and dissatisfied with the awards, they asked for reference under Section 18 of the Act. The Reference Court, i.e. the Court of Subordinate Judge Salem, after considering the documentary and oral evidence, treated the lands as potential house sites and fixed the market value at Rs.1,75,000/- per acre5. The case as put forward by the claimants before the Reference Court and this Court was that the compensation was not fixed by the Collector on a proper basis and the acquired land is potential house site and the valuation ought to have been done on that basis. It was also their submission that relevant sale deeds were ignored while fixing up the value and the data sale deed selected by the Officer was absolutely unreliable. It was urged that in several cases, the Officer did not award compensation for well, cement channel and for the super structures and trees. While in some of the cases the Land Acquisition Officer had not awarded interest for the lands which are taken possession in advance from the land owners. Neither was the compensation paid for the change of residence and place of avocation6. Per contra, the respondents urged that the Land Acquisition Officer had fixed the value after verifying the records of nearby land owners on such transactions and after verifying all the aspects. It was further submitted that the value fixed by the Land Acquisition Officer is correct and the value claimed by the claimants is very high and there was no objection by the owners for those lands at the time of acquisition. So there is no necessity for enhancement of compensation. It was urged that the documents relied upon by the claimants are in no way relevant for fixing the higher values7. The Reference Court taking into account the admission of R.W. 2 that there are number of buildings on the land acquired and the plots of land which are occupied by the building are to be treated as house sites, held that the classification of lands into irrigated and unirrigated lands made by the Land Acquisition Officer was unreasonable and erroneous. The Reference Court held that the Officer should have taken into consideration the proximity of lands acquired to the other residential colonies, the factories and that the lands itself was used as housing plots8. The Reference Court fixed Rs. 1,75,000/- per acre as the amount taking note of the fact that although the lands acquired are situated in different survey numbers but they are adjacent to each other and are acquired as one block for the same purpose9. The High Court vide its judgment dated 23.01.2001 passed in Appeal Suit Nos. 134 to 143 of 1997 and C.M.P No. 16081 of 2000 in Cross Objection Sr. No. 14276 of 1997 while setting aside the order of Reference Court took into consideration the fact that plots of lands acquired were agricultural lands initially and continued to be so till they were acquired. The High Court relied on the fact that the claimants in their representation before the Land Acquisition Officer have claimed different amounts and majority of them claimed compensation only at the rate of Rs. One Lakh per acre. The High Court held that the Reference Court had given no reason at all for awarding compensation higher than what had been claimed. The High Court after taking into note the existence of 2 housing colonies held that it could not be concluded that the vast extent of land acquired in the case would also become a housing colony on its own and was of the view that there was no sufficient material to establish that the lands in dispute could be converted into a housing site in near future10. It was held that lands in question were valuable agricultural lands where horticulture and other crops were raised and they were garden lands, sufficiently irrigated. The market value was fixed at Rs.75,000/- per acre uniformly for all the lands involved in the above acquisition. The award of interest on solatium and on additional grounds was held to be contrary to the principles laid down by the Apex Court11. The claimant(s)/appellant(s) being aggrieved by the aforesaid order of the High Court approached this Court

Court's reasoning:
40. For the reasons above, the judgment of the High Court is set aside and the order of the Reference Court is upheld. So far as the claim of the appellant(s) for solatium, interest and other benefits under the statute is concerned, we direct that the same should be governed by the principles laid down in Sunder v. Union of India, (2001) 7 SCC 211 , and the principles laid down in para 26, page 231 of the judgment be followed. Para 26 of the judgment in Sunder (supra) is set out below:"Once it is held as it inevitably must be that the solatium provided for under Section 23(2) of the Act forms an integral and statutory part of the compensation awarded to a landowner, then from the plain terms of Section 28 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 28 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 28 therefore would include within its ambit both the market value and the statutory solatium. It would be thus evident that the provisions of Section 28 in terms warrant and authorise the grant of interest on solatium as well."