Full Judgment Text
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PETITIONER:
BALAMMAL & ORS. ETC.
Vs.
RESPONDENT:
STATE OF MADRAS & ORS.ETC.
DATE OF JUDGMENT:
23/04/1968
BENCH:
SHAH, J.C.
BENCH:
SHAH, J.C.
RAMASWAMI, V.
CITATION:
1968 AIR 1425 1969 SCR (1) 90
CITATOR INFO :
F 1973 SC 689 (37)
RF 1980 SC1789 (36)
ACT:
Madras City Improvement Trust Act 16 of 1945--Repealed and
replaced by Act 37 of 1950-Cl. 6(2) of Schedule deleting the
provision for statutory solatium in s. 23(2) of Land
Acquisition Act 1894 whether valid--Whether contravenes,
Art. 14 of Constitution--Compensation on the basis of
market-value of property as on the date of notification
under s.47 of the Act whether "just equivalent".
HEADNOTE:
Under the Madras City Improvement Trust Act 16 of 1945 a
Board of Trustees was created with powers to carry out the
provisions of the Act. Section 73 of the Act provided that
for purpose of acquiring land for the Board under the Land
Acquisition Act, 1894 the latter Act shall be subject to the
modifications specified in the; Schedule.. By cl. 6(2) of
the Schedule the 15% solatium payable under s. 23(2) of the
Land Acquisition Act would not be payable in respect of
certain types of land. Act 16 of 1945 was repealed and
replaced by Madras Act 37 of 1950 and under s. 173(2)
thereof all proceedings taken under the 1945 Act were to be
deemed to have been taken under the new Act. But cl. 6(2)
of.. the Schedule to the 1950 Act deleted s. 23(2) of the
1894 Act and substituted for it a new provision, the result
of which was that under the new Act 15% solatium would not,
be payable to those whose land was acquired. The Board of
Trustees framed two schemes for improvement of the town of
Madras and in pursuance of the schemes notifications under
s. 47 of the 1945 Act (corresponding to a notification under
s. 4(1) of the Land Acquisition Act) were issued in 1948 and
notifications under s. 53 (corresponding to a notification
under s. 6 of the Land Acquisition Act) were issued in 1950.
The Land Acquisition Officer declined to award 15% solatium
to the appellants and after valuing the lands according to
the scheme framed by the Board awarded compensation. The
Chief Judge of the Court of Small Causes Madras to whom
references under s. 18 of the Land Acquisition Act were made
awarded enhanced compensation and also solatium at 15%. The
High Court in appeals filed before it determined the market-
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value of the lands at rates in excess of those fixed by the
Chief Judge but set aside the order awarding 15% solatium on
the market-value. In appeal to this Court against the order
of the High Court among others the following questions arose
for determination : (i) whether the notices under s. 47
having been issued under the Act of 1945, the solatium of
15% provided for under that Act would still be payable
despite the passage of the 1950 Act; (ii) whether cl. 6(2)
of the Schedule to the 1950 Act was ultra vires as violative
of Art. 14; (iii) whether compensation on the basis of
marketvalue as on the date of issue of notification under s.
47 was a ’just equivalent’ of the value of the lands
expropriated when there was a timelag between the issue of
the aforesaid notification and the date on which possession
was taken; (iv) whether the High Court was right in raising
the rates of compensation alone those fixed by the, Chief
Judge.
HELD : (i) Although by cl. 6 of the Schedule to Act 16 of
1945 solatium was awardable to the owners of the land
acquired for the Improvement Trust yet since by s. 173(2) of
Act 37 of 1950 all the proceedings which were commenced
under the Act of 1945 were to be
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deemed to be taken under Act 37 of 1950 compensation
awardable by virtue of cl. 6 of the Schedule to the new Act
read with s. 173(2) of that Act could not include the
statutory solatium. The Legislature has thereby deprived
the owners of the lands of a right to compensation even in
proceedings for acquisition commenced before Act 37 1945.
[95 F-G]
(ii) However sub-cl. (2) of cl. 6 of the Schedule to Act 37
of 1950 insofar as it deprived the owners of the lands of
the statutory addition to the market-value of the lands
under s. 23(2) of the Land Acquisition Act is violative of
the equality clause of the Constitution and is on that
account void. An owner of land is ordinarily entitled to
receive the solatium in addition to the market-value, for
compulsory acquisition of his land, if it is acquired under
the Land Acquisition Act but not if it is acquired under the
Madras City Improvement Trust Act. A clear case of
discrimination thus arises. [95H-96-C]
On the above finding the owners of land in the present case
were entitled to receive the statutory solatium under s.
23(2) of the Land Acquisition Act. [98 B-C]
State of West Bengal v. Mrs. Bela Banerjee & Ors. [1954]
S.C.R. 558, State of Madras v. D. Namasiva Mudaliar & Ors.
[1964] 6 S.C.R. 614, P. Vajravelu Mudaliar v. Special Deputy
Collector, Madras & Anr. [1965] 1 S.C,.R. 614, N. B.
Jeejabhoy v. Assistant Collector Thana Prant, Thana, [1965]
1 S.C.R. 636 and Dalchand and Ors. v. Delhi Improvement
Trust (Now Delhi Development Authority) New Delhi, [1966]
Supp. S.C.R. 27, referred to.
(iii) In view of the decision in Vajravelu’s case the
contention that compensation payable on the basis of market-
value as on the date of notification under s. 47 of Act 37
of 1950 was not a ’just equivalent’ could not be accepted.
[101 F]
P. Vajravelu v. Special Deputy Collector, Madras and Anr.,
[1965] I S.C.R. 614, relied on.
(iv) The High Court had committed no error of principle in
fixing the value of the, lands in question, nor had it
failed to apply its mind to any important piece of evidence.
This Court could not therefore interfere with the High
Court’s order in this respect. [100 H]
Nowroji Rustomji Wadia v. Bombay Government, L.R. 52 I.A.
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367, Prag Narain v. Collector of Agra, L.R. 59 I.A. 155,
Narsingh Das v. Secretary of State for India, L.R. 52 I.A.
133 and Special Land Acquisition Officer, Bangalore v. T.
Adinarayan Setty, [1959] Supp. 1 S.C.R. 404, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 489, 513,
514, 645-648, 650, 651, 960-967 and 989-993 of 1965 and 2109
and 2228 of 1966.
Appeals from the judgments and decrees dated November 5.
1953 of the Madras High Court in Civil Appeals Suits Nos.
116 of 1953 etc. etc.
R. Ramamurthy Iyer, T. S. Rangarajan and R. Gopalakrishnan.
for the appellants (in C.As. Nos. 489, 514, 645-647 of 1965
and 2109 and 2228 of 1966) and for respondents (in C.As.
Nos. 513 and 648 of 1965) for respondents Nos. 5 and 6 (in
C.As. Nos.
92
960-962, 967 and 989-993 of 1965) and for respondents Nos.
1 and 4 (in C.A. No. 966 of 1965).
R. Thiagarajan, for the appellants (in C.As. Nos. 650-651 of
1965).
P. Ram Reddy and A. V. V. Nair, for the appellants (in C.As.
Nos. 989-993 of 1965) and for respondent No. 2 (in C.As.
Nos. 960-962, 964 and 967 of 1965).
K. N. Mudaliyar, Advocate-General for the State of Madras
and A. V. Rangam, for the respondents (in C.As. Nos. 489,
514,Respondent No. 1 (in C.A. Nos. 989-993 of 1965) and for
appellants (in C.As. Nos. 513, 648, 960 to 967 of 1965).
The Judgment of the Court was delivered by
Shah,J.In this group of appeals arising out of land
acquisition references, two questions fall to be determined:
(1) Whether the owners are entitled to get
15% solatium in addition to the market value
for compulsory acquisition of the lands; and
(2) Whether the rate at which compensation
has been awarded to the claimants for
compulsory acquisition of the lands is
justified by the evidence.
The Legislature of the Province of Madras enacted the Madras
,City Improvement Trust Act 16 of 1945, to provide, inter
alia. for improvement and expansion of the City of Madras by
opening up congested areas. Under s. 3 of the Act a Board
of Trustees. with power to carry out the provisions of the
Act, is to be constituted. The Board is empowered by the
Act to frame a scheme to be called "Town Expansion Scheme",
and to notify the scheme and also to publish it in the
Government Gazette. After considering the objections raised
by persons affected by the scheme tile Government may
sanction the improvement scheme with or with ,out
modifications and announce the fact by notification.
Publication of the notification is conclusive evidence that
the scheme has been duly framed and sanctioned. The Board
shall then proceed with the execution of the scheme. The
Board is by virtue of s. 71 authorised, with the previous
sanction of the Government, to acquire land under the
provisions of the Land Acquisition Act. 1894, for carrying
out any of the purposes of the Act. Section 72 authorises
the Government to constitute a Tribunal for performing the
functions of the Court in reference to the acquisition ,of
land for the Board under the Land Acquisition Act, 1894. By
s.73 it is provided
"For the purpose of acquiring land for the Board under the
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Land Acquisition Act, 1894-
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(a) the said Act shall be subjected to the modications
specified in the Schedule; and
(b) .......................................
The Schedule to the Act provided for modifications in the
Land Acquisition Act, 1894, for certain specific purposes.
By cl. 6(2) of the Schedule the acquiring authority is not
liable to pay the additional 15% of the market value under
s. 23(2) of the Land Acquisition Act "where the land
acquired is situated in an area which is declared by the
Provincial Government to be a congested or slum area and the
land is not in the actual possession of the owner". It may
suffice to state that the land in the cases out of which
these appeals arise did not fall within the proviso and in
addition to the market value fifteen per cent, on the
market-value in consideration of the compulsory nature of
the acquisition was payable for acquisition of land made
under Act 16 of 1945.
Madras Act 16 of 1945 was repealed and was replaced by
Madras Act 37 of 1950. The scheme of the new Act remained.
with some modifications, substantially the same as the
scheme of the repealed Act. By s. 173(2) it was provided
that :
"Notwithstanding such repeal, all action
taken, all notifications published, all rules
and orders issued and all things done under
that Act (Act 16 of 1945) shall be deemed to
have been taken, published, issued and done
under this Act, and may be continued
thereunder."
All the proceedings commenced under Act 16 of 1945 were
therefore to be deemed to have been taken under Act 37 of
1950. An important change, however, was made in the
Schedule to Act 37 of 1950 which modified the provisions of
the Land Acquisition Act, 1894, in its application to the
acquisition of lands under that Act. By cl. 6(2) of the
Schedule it was provided that sub-s. (2) of s. 23 shall be
omitted, and in lieu thereof the following sub-section shall
be deemed to have been substituted. namely
"(2) For the purpose of clause first of sub-
section
(1) of this section-
(a) if the market value of the land has been
increased or decreased owing to the land
falling within or near to the alignment of a
projected public street, so much of the
increase or decrease as may be due to such
cause shall be disregarded;
(b) if any person, otherwise than in
accordance with the provisions of this Act,
erects, re-erects,
94
adds to, or alters any wall or building so as
to make the same project into the street
alingment or beyond the building line
prescribed by any scheme made under this Act,
then, any increase in the market value
resulting from such erection, re-erection,
addition or alteration shall be disregarded."
By that amendment persons whose lands were compulsorily ac-
quired under the Madras City Improvement Trust Act 37 of
1950 were deprived of the right to the solatium which would
be awarded if the lands were acquired under the Land
Acquisition Act.
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The Board of Trustees framed two schemes for improvement ,of
the town of Madras-"the Mandavalli Scheme" and "the Mowbrays
Road Scheme". For the Mandavalli Scheme a notification
under s. 47 of Act 16 of 1945 which operates as a
notification under s. 4(1) of the Land Acquisition Act,
1894, was issued on August 24, 1948. A notification under
s. 53 which is effective ,is a notification under s. 6 of
the Land Acquisition Act was issued on May 23, 1950, and the
Land Acquisition Officer made his award of compensation on
November 22, 1951. Under that scheme 14000 "grounds" (each
ground is equal to 2400 sq. ft.) of land were notified for
acquisition. For the Nowbrays Road Scheme which was to
cover 689 grounds, the notification under s. 47 of the Act
of 1945 was issued on October 26, 1948, the notification
under s. 53 was issued on May 23, 1950, and the award was
made on April 17, 1952. The notifications under ss. 47 and
53 in respect of the two schemes published in exercise of
the powers under Act 16 of 1945 and all actions and proceed-
ings taken thereunder were by virtue of s. 173(2) of Act 37
of 1950 to be deemed to have been issued, and taken under
the repealing Act.
The Land Acquisition Officer declined to award 15% solatium
to the owners of the lands. He valued the lands according
to a scheme of classification of lands to which we will
presently refer, and determined the compensation awardable
to the owners on that basis. References were then made at
the instance of the owners under s. 18 of the Land
Acquisition Act to the Chief Judge of the Court of Small
Causes, Madras, for enhanced compensation. The Chief Judge
awarded enhanced compensation and in addition thereto
awarded 15% solatium on the market value of the land.
Against the awards made by the Chief Judge. appeals were
preferred by the State of Madras and by the owners of the
lands. The High Court modified the awards made by the Chief
Judge and determined the market value of the lands at rates
in excess of the rates at which the Chief Judge had awarded
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compensation, but set aside the order awarding 15% solatium
on the market value. Against the awards made by the High
Court, these appeals are preferred by the State and by the
owners of the lands. In appeals Nos. 513, 648 and 960-967
of 1965 filed by the State, modification in the rates of
market value made by the High Court for determining the
compensation has been challenged. In Appeals Nos. 489, 514,
645-647, 650-651, 989-993 of 1965 and 2109 and 2228 of 1966
filed by the owners of the lands the claimants have claimed
15% solatium which has been denied to them by the High Court
and have also claimed additional compensation.
We may first deal with the claim of the owners to be awarded
solatium at the rate of 15% on the market-value of the
lands. If the lands of the owners were notified for
acquisition under the Land Acquisition Act, the acquiring
authority was bound to award in addition to the market-value
of the land a sum of fifteen per centum on the "market-value
in consideration of be compulsory nature of the acquisition"
vide s. 23 (2) of the Land Acquisition Act. But since the
lands were notified for acquisition for the purpose of Town
Expansion Scheme, it is claimed that the owners were, by
virtue of Act 37 of 1950, deprived of the right to
additional compensation. It was urged by counsel for the
owners of the lands that proceedings for acquisition were
commenced by the issue of notification under ss. 47 & 53 of
Act 16 of 1945, and the owners acquired a vested right to
compensation inclusive of 15% solatium, and that right could
not be taken away by repeal of the Act and enactment of a
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new Act when proceedings for assessment of compensation were
pending before the Land Acquisition Officer. It is true
that by cl. 6 of the Schedule to Act 16 of 1945 solatium was
awardable to the owners of the lands acquired for the
Improvement Trusts, but since by s. 173(2) of Act 37 of 1950
all the proceedings which were commenced under the Act of
1945 were to be deemed to be taken tinder Act 37 of 1950,
compensation awardable by virtue of cl. 6 of he Schedule to
the new Act read with S. 173(2) of that Act could not
include the statutory solatium. The Legislature has thereby
deprived the owners of the lands of a right to compensation
even in proceedings for acquisition commenced before Act 37
of 1945.
But, in our judgment, counsel for the owners is right in
contending that sub-cl. (2) of cl. 6 of the Schedule to Act
37 of 1950, insofar as it deprived the owners of the lands
of the statutory addition to the market-value of the lands
under S. 23(2) of the Land Acquisition Act is violative of
the equality clause of the Constitution, and is on that
account void. If the State had acquired the land,, for
improvement of the town under the Land Acquisition Act, the
acquiring authority was bound to award in addition to
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the market-value 1501,, statutory under s. 23(2) of the Land
Acquisition Act. But by acquiring the lands under the Land
Acquisition Act as modified by the Schedule to the Madras
City Improvement Trust Act 37 of 1950 for the Improvement
Trust which also is a public purpose, the owners are, it is
claimed, deprived of the right to that statutory addition.
An owner of land is ordinarily entitled to receive the
solarium in addition to the market-value, for compulsory
acquisition of his land, if it is acquired under the Land
Acquisition Act, but not if it is acquired under the Madras
City Improvement Trust Act. A clear case of discrimination
which infringes the guarantee of equal protection of the law
arises, and the provision which is more prejudicial to the
owners of the lands which are compulsorily acquired must on
the decisions of this Court, be- deemed invalid.
In The State of West Bengal v. Mrs. Bela Banerjee and
others(1) the West Bengal Land Development and Planning Act
21 of 1948 passed primarily for the settlement of immigrants
who had migrated into West Bengal provided for compulsory
acquisition of land for public purposes, but the amount of
compensation was not to exceed the market value of the land
on December 31 , 1946. It was held by this Court that the
provision fixing the market-value of the land on December
31, 1946, as the ceiling on compensation without reference
to the value of the land at the time of acquisition, was
arbitrary and could not be regarded as due compliance in
letter and spirit with the requirements of Art. 31 (2) of
the Constitution.
In State of Madras v. D. Namasivya Mudaliar and others 2
,his Court struck down the Madras Lignite (Acquisition of
Land) Act 11 of 1953, which provided, inter alia, that
compensation for acquisition of lignite bearing lands under
the Land Acquisition Act shall be assessed on the market-
value of the land prevailing on August 28, 1947, and not on
the date on which the notification was issued under s. 4(1)
of the Land Acquisition Act.
In P. Vajravelu Mudaliar v. Special Deputy Collector Madras
and Another(3), it was held that the Land Acquisition
(Madras Amendment) Act, 1961, which inter alia, provided
that for the compulsory acquisition of land, the owner will
be entitled to the market-value of the land at the date of
the publication of the notification under s. 4 sub-s. (1) of
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the Land Acquisition Act or in amount equal to the average
market-value of the land during the five years immediately
preceding such date, whichever is less, and also that he
shall be entitled to solatium at the rate of "five per
centum", was pro tanto void as infringing Art. 14 of the
Constitution. This Court observed that discrimination
between
(1) [1954] S.C.R. 558. (2) [1964] 6 S.C.R. 614.
(3) [1965] 1 S.C.R. 614.
97
persons whose lands were acquired for housing schemes and
those whose lands were acquired for other public purposes
was not sustained on the principle of any reasonable
classification founded on intelligible differentia which had
a rational relation to the object sought to be achieved.
In N. B. Jeejeebhoy v. Assistant Collector, Thana Prant,
Thana(1), this Court struck down as violative of Art. 14 of
the Constitution a provision made by the Land Acquisition
(Bombay Amendment) Act, 1948, which enjoined the acquiring
authority to assess compensation for the lands compulsorily
acquired for the purpose of "a housing scheme’ in the State
of Bombay at the market rate prevailing not on the date of
the issue of the notification under S. 4 of the Land
Acquisition Act, 1894, but on January 1, 1948.
Compensation awardable for compulsory acquisition of pro-
perty must be a just equivalent of the value of the land of
which a person is deprived. When compensation payable to
the owner is to be based on the market value prevailing on
different dates, according as it is awardable under the Land
Acquisition Act or tinder some special provision, or when
the compensation awardable to the owners of the lands, under
the Land Acquisition Act is reduced by a special provision
unless the distinction is supported by any rational
classification having reasonable relation to tile subject
matter or to the object sought to be achieved by the special
provision and is founded on some intelligible differentia,
the special provision must be held void, as infringing the
guarantee tinder Art. 14.
The judgment of this Court in Dalchand and others v. Delhi
Improvement Trust (New Delhi Development Authority) New
Delhi (2) , on which reliance, was placed by the Advocate-
General has no application to that principle. In Dalchand’s
case ( 2 ) under the U.P. Town Improvement Act 8 of 1908 as
extended to the territory of Delhi, (he Delhi Improvement
Trust brought into force a scheme for industrial development
under which lands were acquired. The Trust paid
compensation based on the market value, but without the
statutory solatium. It was observed in that case, that if
the land had been acquired under the, Land Acquisition Act
the claimants would have been entitled to statutory
solatium, but not when they were acquired for the Delhi
Improvement Trust. In Dalchand’s case (2) the validity of
the Act was not open to challenge. The notification for
acquisition of ’and was issued many years before the date of
the commencement of the Constitution and the land had vested
in the Trust also before the commencement of the
Constitution. No question of deprivation of a fundamental
right of equality could
(1) [1965] 1 S.C.R.636.
(2) [1966] Supp.S.C.R.27.
98
therefore be set up in that case and this Court held that
the claimants were not entitled to plead that if the land
had been acquired under the Land Acquisition Act, they might
have become entitled to a statutory solatium in addition to
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the market-value, whereas under the U.P. Town Improvement
Act they were not so entitled.
We, therefore, hold that el. 6 sub-cl. (2) of the Schedule
read with S. 73 of Madras Act 37 of 1950 which deprives the
owners of the statutory right to solatium at the rate of 15%
on the market-value of the lands is invalid, and the owners
of the lands are entitled to the statutory solatium under S.
23(2) of the Land Acquisition Act in consideration of
compulsory acquisition of their lands.
We may now turn to the argument that rates at which com-
pensation was awarded to the owners of the lands was not
justified by ’the evidence. Two schemes were framed by the
Board of Trustees-(1) Mandavalli Scheme; and (2) Mowbrays
Road Scheme. The Land Acquisition Officer classified the
lands in the Mandavalli Scheme into two groups-’the
developed group’ and ’the undeveloped group’. He designated
small sites requiring no further improvement and which were
ready for being built upon as ’developed lands’ and the rest
as ’undeveloped lands’ and fixed the market value of the
developed lands at Rs. 1,550 per ground. In determining the
value of undeveloped lands he reduced an amount of Rs. 500
per ground being the estimated proportionate share of the
cost for setting apart land for roads and for providing
amenities and fixed the market value at Rs. 1,050 per
ground. Further adjustments were made in that rate for
lands 1 individual cases in the light of their situation.
The Chief Judge adopted the classification made by the Land
Acquisition Officer, and assessed the land value of
developed plots at Rs. 2,000 ground. For arriving at the
value for undeveloped lands, he reduced the value by Rs. 500
per ground for roads and cost of development and awarded
compensation at the rate of Rs. 1,500 per around. The High
Court also accepted the grouping of the lands into two broad
groups as adopted by the Chief Judge and the Land Ac-
quisition Officer, and further sub-divided the developed
plots into "nice desirable plots exceeding one ground and
below three grounds, and facing well-known, convenient and
already formed roads" and "standard developed plots". The
former were Group K-A lands which were valued at Rs. 2,250
per ground, and the latter which were called Group I-B lands
were valued at Rs. 2,000 per ground. In the view of the
High Court a reduction of Rs. 400 per ground for the value
of standard developed lands was adequate to meet the
expenses for providing amenities. The basic value of
undeveloped plots was assessed at Rs. 1,600 per ground.
Having regard. however, to the superior situation of some of
the
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undeveloped plots they grouped them into Group 2-A and
awarded compensation at the rate of Rs. 1,750 per ground,
and for one plot which in view of its "desirable situation"
was awarded the rate of Rs. 1,850 per ground. The remaining
lands which were called Group 2-B lands were awarded
compensation at the rate of Rs. 1,600 per ground.
The Mowbrays Road Scheme plots were classified by the Land
Acquisition Officer into four groups Group I-A, I-B, I-C and
Group-II. For groups I-A, I-B, and I-C lands the determined
the basic rate of compensation per ground at Rs. 2,500, Rs.
2,400 and Rs. 2,000 respectively, and on the footing that
these three groups were undeveloped plots he reduced the
rate by Rs. 800 per ground for expenses of laying out roads
and providing other amenities. He valued the Group-II lands
at Rs. 1,600 and reduced it by 25% for expenses for laying
out roads and providing other amenities. The Chief Judge
substantially adopted the same classification. He
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designated the lands as Group 1, Group 11, Group III and
Group IV. After considering the situation of the lands, the
Chief Judge estimated the basic compensation for Group I at
the rate of Rs. 2,400, for Group 11 at Rs. 2,300 and for
Group III at Rs. 1,900 and declined to make any deduction
for development on the footing that lands were developed
lands and no expenditure was required to be incurred and no
deduction had to be made. For the interior lands forming
Group he estimated the basic price at Rs. 1,900 per ground
and made a deduction of Rs. 550 per ground for providing
amenities and for meeting the expenses incidental to the
development of their lands. In the view of the High Court
the rate of compensation per around should be respectively
Rs. 2,500, Rs. 2,400 and Rs. 2,250 for lands in Groups I, II
and III. For Group IV the High Court assessed compensation
at the rate of Rs. 1,630 per ground. In arriving at that
valuation they took into consideration the situation of the
land, the stage of development the lands bad reached, the
size of the plots and the estimated cost of raising the
level of the land and providing other amenities which would
make them similar to developed lands.
On behalf of the State it is urged that the High Court erred
in increasing the value of the lands in the Mowbrays Road
Scheme and that the, High Court should have maintained the
order of the Chief Judge relating to those lands. On behalf
of the owners of the lands it is urged, especially for the
lands in the Mandavalli Scheme, that there were transactions
of sale proximate in time to the date on which the
notification under S. 47 of Act 16 of 1945 was issued, which
disclosed a rate of market-value varying between Rs. 2,000
and Rs. 3,000 per ground, and the Chief Judge and the High
Court were not justified in accepting the lowest rate as
determinative of the market-value of the lands in the
neighbour-
100
hood. But the instances relied upon by the owners are of
sales of very. small pieces of land approximately of one-
half of a ground or less, and we do not think that the High
Court has committed any error of principle in rejecting the
higher rates furnished by instances of sale of tiny pieces
of land. Again no evidence was led before the Chief Judge
that the sale transactions reflected the Current rate of
market value of lands in the locality, and that the prices
paid were not affected by special considerations.
In Nowroji Rustomji Wadia v. Bombay Government(1), the
Judicial Committee held that in appeals involving the
valuation of property, the Judicial Committee will not
entertain an appeal as to the value of property compulsorily
acquired, except upon questions of principle, including
errors in appreciating or applying the rules of evidence, or
the judicial methods of weighing evidence.
In Prag Narain v. Collector of Agra(2), the Judicial Com-
mittee observed that "it is well settled that this Board
will not review the decree of an Indian Appellate Court
merely upon questions of value", and reiterated the
observations made in Narsingh Das v. Secretary of State for
India(2) that the Board will not interfere with judgments of
the Courts in India as to matters involving valuation of
property and similar questions where knowledge of the
circumstances and of the district may have an important
bearing on the conclusion reached, unless there is something
to show, not merely that on the balance of evidence -it
would be possible to reach a different conclusion, but that
the judgment cannot be supported as it stands, either by
reason of a wrong application of principle or because some
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important point in the evidence has been overlooked or
misapplied.
This Court has adopted a similar approach in appeals which
raise disputes relating to valuation of lands compulsorily
acquired. In The Special Land Acquisition Officer, Bangalore
v. T. Adinarayan Setty (1). S. K. Das, J., speaking for the
Court observed
"We are content to proceed in this case on the
footing that we should not interfere unless
there is something to show, not merely that on
the balance of evidence it is possible to
reach a different conclusion, but that the
judgment cannot be supported by reason of a
wrong application of principle or because some
important point affecting valuation has been
overlooked or misapplied."
The learned Advocate-General appearing on behalf of the
State of Madras has not invited our attention to any such
error of,
(1) L.R. 52 I.A. 367.
(3) L.R. 52 I.A, 133.
(2) L.R. 59 I.A. 155.
(4) [1959] Supp. 1 S.C.R. 404.
101
principle or non-application of mind to any important piece
of evidence which may have a bearing on the valuation. The
learned Advocates appearing on behalf of the owners of the
lands also have not been able to invite our attention to any
such error in the judgment of the High Court.
Mr. P. Rama Reddy appearing on behalf of respondents in
Appeals Nos. 960-962, 964 and 967 and the appellants in
Appeals Nos. 989-993 of 1965 raised a special argument which
we may now consider. Counsel contended that the provisions
of the Land Acquisition Act which are made applicable by S.
73 read with the Schedule to the Madras City Improvement
Trust Act and which require the market-value to be awarded
to the owners of the land as on the date on which the
notification under s. 47 of the Act is issued deprive the
owner of the true compensation which is a just equivalent of
the value of the lands expropriated. Counsel says that in
all cases after the notification is issued, there is a
considerable time-lag and the title to the land is ex-
tinguished only when the land vests absolutely in the
Government under S. 16 of the Land Acquisition Act free from
all encumbrances. He says that whereas the compensation
payable is the market value prevailing on the date of the
issue of the notification under S. 4 of the Lana Acquisition
Act the title of the owners to the land is extinguished on
the date on which possession is taken, and on that account
compensation is determined with reference to a date which in
some cases may be years before the date on which the title
is extinguished. Counsel invited our attention to the
observations made by Subha Rao, J., in Vajravelu Mudaliar’s
case(1) that under Art. 31 (2) a person whose land was
acquired was entitled to compensation i.e. a "just
equivalent" of the land of which he was deprived. He
contended that if the just equivalent of the land is to be
awarded, it must be based on the market value of the land on
the date on which the title is extinguished and not the
market value at some date anterior thereto. But in P.
Vajravelu Mudaliar’s case(1) it was decided that the law
which determines the market value as at the date of the
notification under s. 4(1) of the Land Acquisition Act does
not offend Art. 31(2) of the Constitution.
Mr. Thiagarajan appearing on behalf of the appellants in
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Appeals Nos. 650 & 651 of 1954 contended that no adequate
compensation was awarded to the owners in respect of charges
for severance. Counsel submitted that a part of the
compound of a cinema Theatre was acquired compulsorily and
that deprived the owner of the land of the facility of
providing additional amenities to the patrons of the theatre
and also of making constructions on the land expanding the
business, and on that account the owners were entitled to
compensation either under "Thirdly" or
(1) [1965] 1 S.C.R. 614.
102
"Fourthly" or "Sixthly" of S. 23(1) of the Land Acquisition
Act. Under these clauses the damage sustained by the person
interested by reason of severing such land from his other
land, or by reason of the acquisition injuriously affecting
his other property movable or immovable in any other manner,
or his earnings, or the damage bona fide resulting from
diminution of the profits of the land between the time of
the publication of the declaration under s. 6 and the time
of the Collectors taking possession of the land may be
awarded to the owners. But there is no evidence on the
record to which our attention was invited which supported
the case of the appellants to compensation under any of the
clauses. There is nothing to prove that the owners had
sustained any loss by reason of the severance of the land
from ,their other lands, nor is there any evidence to prove
that by reason of the acquisition the remaining lands were
injuriously affected or the earnings of the owners were
affected, nor is there any evidence to show that there was
any damage resulting from diminution of the profits of the
land between the time of the publication of the declaration
and the time of taking possession of the land. The High
Court has awarded Rs. 2,500 as compensation for severance,
and we see no reason to interfere with that order.
The appeals filed by the State therefore fail and are
dismissed with costs. The appeals filed by the owners are
allowed 15% solatium under s. 23 (2) of the Land Acquisition
Act on the market-value of the land in addition to the
compensation awarded to them. Appellants in each of these
appeals will be entitled to their costs in this Court.
Parties appearing through the same counsel will be entitled
to one hearing fee only.
G.C. Appeals Allowed.
103