Full Judgment Text
2023 INSC 940
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. OF 2023
(Arising out of SLP (C) NOS. 30817-30818 OF 2016)
THE CENTRAL WAREHOUSING
CORPORATION …APPELLANT(S)
VERSUS
THAKUR DWARA KALAN
UL-MARUF BARAGLAN
WALA (DEAD) & ORS. …RESPONDENT(S)
J U D G M E N T
VIKRAM NATH, J.
1. Application for substitution is allowed.
2. Leave granted.
3. The present appeals assail the correctness of
common judgment and order of the High Court of
Signature Not Verified
Digitally signed by
SONIA BHASIN
Date: 2023.10.19
18:06:11 IST
Reason:
Punjab & Haryana at Chandigarh dated
SLP (C) No. 30817-30818 of 2016 Page 1 of 16
01.06.2016, whereby the appeal filed by
Respondent No.1 (RFA No. 295 of 2005) was partly
allowed, and the appeals filed by the appellant and
State of Haryana (respondent No.2) (RFA No. 2400
of 2004 and RFA No. 2522 of 2004) were dismissed,
raising the amount of compensation to Rs.493/-
per square yard on the date of notification under
1
Section 4 of the Land Acquisition Act, 1894 . The
basis for the same being cumulative annual
increase at the rate of 15% for a period of 11 years.
The base figure was taken from an order of
Reference Court dated 30.08.2000 relating to
acquisition of land of the same village Naraingarh
of the year 1989, and the period of 11 years being
counted from 1989 to 2000, the year of the
notification dated 10.11.2000 issued under Section
4 of the 1894 Act.
4. Relevant facts for deciding the present appeals are
as follows:
1
In short, ‘1894 Act’
SLP (C) No. 30817-30818 of 2016 Page 2 of 16
i) Notification was issued under Section 4 of the
1894 Act on 10.11.2000 for acquiring land
measuring 80 Kanals, 11 Marlas out of the
revenue estate of Naraingarh, District Ambala
for the benefit of the appellant.
ii) Objections were invited as per the provisions
of the 1894 Act; however, no objections were
filed.
iii) Declaration under Section 6 of the 1894 Act
was issued on 19.03.2001.
iv) The Land Acquisition Collector/Sub
Divisional Officer (Civil) who was duly
authorised to give the award, started the
process on 25.09.2001 by serving notices
under Section 9 of the 1894 Act. After the
parties led evidence and considering material
on record, vide award dated 12.10.2001 the
Land Acquisition Collector determined the
rate of compensation at Rs.3.50 lacs per acre,
which would be equivalent to Rs.2,187.50 Ps.
per Marla and further equivalent to Rs.72.31
per square yard being the market value
SLP (C) No. 30817-30818 of 2016 Page 3 of 16
prevailing on the date of notification under
Section 4 of the 1894 Act.
5. The Land Acquisition Collector considered the
following factors to determine the rate of
compensation:
a) No objections were filed with respect to area
and classification of the land in question.
b) The land owners (respondents) did not put
forth any specific claim with regard to the
market value of the land. The only claim was
that fair and reasonable compensation be
awarded.
c) The acquired land was purely an agricultural
land situated by the side of a link road.
d) Report of the Committee constituted at the
Divisional Level for evaluation under the
chairmanship of Divisional Commissioner had
fixed the market rate of Rs.3,50,000/- per acre
after considering the market rates provided
from the Office of the District Collector,
Ambala.
SLP (C) No. 30817-30818 of 2016 Page 4 of 16
e) The material provided by the local revenue
Patwari regarding sale deeds of similar land
executed within closed proximity on the
material date.
6. The respondent preferred a reference under Section
18 of the 1894 Act on 19.11.2001 seeking
enhancement of compensation primarily for the
following reasons:
(i) The acquired land was Chahi land
(Irrigated land) which was used for
residential purposes, and was situated
within the Abadi near the Naraingarh
District as well as near the sector carved
by Haryana Urban Development
Authority and was also near the
Government College, Naraingarh and
Government Senior Secondary School,
Naraingarh.
(ii) The Market value of the acquired land
was not less than Rs.30 lacs per acre at
the relevant time and therefore the claim
of Rs.35 lacs per acre was made.
SLP (C) No. 30817-30818 of 2016 Page 5 of 16
7. The appellant filed his objections and written
statement in the reference proceedings denying all
the assertions made by the respondent in the
reference.
8. After considering the material on record, the
Reference Court/ Additional District Judge, Ambala
allowed the reference and determined the market
value at Rs.6,310/- per Marla equivalent to
Rs.208.59/- per square yard by taking into account
12% (simple/flat) increase per annum for 11 years
from 1989 to 2000. Reliance was placed upon a
judgment dated 30.08.2000 of the Reference Court
pertaining to acquisition of land in the year 1989 of
the same village (Naraingarh), wherein the
Reference Court had fixed the rate at Rs.2720/- per
Marla equivalent to Rs.89.91 per square yard.
9. Aggrieved with the enhancement by the Reference
Court, both the parties appealed before the High
Court. The said appeals came to be decided by the
SLP (C) No. 30817-30818 of 2016 Page 6 of 16
common impugned order of the High Court as
already mentioned in the opening paragraph.
10. The High Court granted an annual increase at the
rate of 15% on cumulative basis for a period of 11
years, relying upon the judgment of this Court in
the case of General Manager, Oil and Natural Gas
Corporation Limited vs. Rameshbhai Jivanbhai
2
Patel and Another . While entertaining the special
leave petition, this Court vide interim order dated
11.11.2016 granted stay subject to condition that
the appellant would deposit 50% of the
compensation as determined by the High Court. In
compliance to the same, the appellant deposited
Rs.2,54,46,007/- on 04.01.2017 which was
subsequently allowed to be withdrawn by the
respondent vide order dated 12.04.2017. The said
amount has since been withdrawn.
11. The appellant further pointed out that it has
actually paid a total amount of Rs.3,72,01,551/- to
2
(2008) 14 SCC 745
SLP (C) No. 30817-30818 of 2016 Page 7 of 16
the respondent. The breakup of which is as follows:
(i) Rs.49,71,728/- was paid at the time of award; (ii)
under interim order of the High Court, further
amount of Rs.65,69,816/- along with TDS of
Rs.2,14,000/- was paid; and (iii) further
Rs.2,54,46,007/- was deposited and paid as
directed by this Court.
12. We have heard learned senior counsels for the
parties and have also perused the material on
record.
13. The core question to be decided in the present
appeals is as to what would be a fair and just
compensation so as to do justice between the
parties that is to say that land owners may get a fair
and reasonable amount of compensation for losing
their land, and at the same time balancing the State
exchequer by not awarding an amount which may
be in excess of the market value so as not to put an
additional burden on the appellant which is a State
entity.
SLP (C) No. 30817-30818 of 2016 Page 8 of 16
14. It is an admitted position that there is no material
in the form of exemplars of the relevant time that is
the date of the notification under Section 4 of the
1894 Act so as to facilitate determination of the
market value. Whatever sale deeds have been
referred by the appellant, cannot be taken as
exemplars to determine the market value for which
the reasons given by the High Court are reasonable
and we have no reason to interfere with the same.
Thus, we have to fall back upon the order of the
Reference Court dated 30.08.2000 which related to
an acquisition of the year 1989. This Reference
Court order of 30.08.2000 has been relied upon by
the Reference Court and the High Court in the
present case. The question to be determined would
be as to at what rate the annual increase be
applied? The Reference Court applied 12% flat rate
increase, whereas High Court applied 15%
cumulative.
15. The law on the point of annual increase whether on
cumulative basis or non-cumulative basis and the
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rate of annual increase to be applied are thus to be
considered. Based upon the same a balance and
equitable compensation needs to be determined in
the present case.
16. The following cases have been relied upon by the
parties with respect to determining the just
compensation.
i) General Manager, Oil and Natural Gas
Corporation Limited vs. Rameshbhai
Jivanbhai Patel and Another (supra),
ii) Ashrafi and Others Vs. State of Haryana
3
and Others ,
4
iii) Narbadi Devi & Ors. Vs. State of Haryana ,
iv) Ramrao Shankar Tapase vs. Maharashtra
Industrial Development Corporation and
5
Others ,
v) State of Haryana and Another vs. Subhash
6
Chander and Others
3
(2013) 5 SCC 527
4
SLP(c)Nos.20531-20565 of 2014, (22.08.2014- Order)
5
(2022) 7 SCC 563
6
(2023) 5 SCC 435
SLP (C) No. 30817-30818 of 2016 Page 10 of 16
17. The case which was referred to by the High Court
was Rameshbhai Jivanbhai Patel (supra). It no
doubt referred to determining compensation on the
basis of annual increase with cumulative effect, but
at the same time it had put a caution that such
annual increase can be taken only for 4-5 years as
beyond that it would be unsafe to uniformly apply
the same rate for increase and that too with
cumulative effect. Paragraph 15 of the said
judgment may be reproduced here which mentions
the reasons where the gap is of several years, such
standards may not be reliable rather the same
maybe unsafe.
“15. Normally, recourse is taken to the mode of
determining the market value by providing
appropriate escalation over the proved market value
of nearby lands in previous years (as evidenced by
sale transactions or acquisitions), where there is no
evidence of any contemporaneous sale transactions
or acquisitions of comparable lands in the
neighbourhood. The said method is reasonably safe
where the relied-on sale transactions/acquisitions
precede the subject acquisition by only a few years,
that is, up to four to five years. Beyond that it may
be unsafe, even if it relates to a neighbouring land.
What may be a reliable standard if the gap is of only
a few years, may become unsafe and unreliable
standard where the gap is larger. For example, for
SLP (C) No. 30817-30818 of 2016 Page 11 of 16
determining the market value of a land acquired in
1992, adopting the annual increase method with
reference to a sale or acquisition in 1970 or 1980
may have many pitfalls. This is because, over the
course of years, the “rate” of annual increase may
itself undergo drastic change apart from the
likelihood of occurrence of varying periods of
stagnation in prices or sudden spurts in prices
affecting the very standard of increase.”
18. In the said case, after laying down the caution, this
Court awarded cumulative annual increase at the
rate of 7.5% for a period of five years.
19. In the case of Ashrafi and others (supra), this
Court amongst many issues, considered the issue
of applying annual increase cumulatively for
determining just compensation. It also considered
the law laid down in the case of Rameshbhai
Jivanbhai Patel (supra) and many other
judgments on the said point. It applied formula of
12% annual increase cumulatively for a period of
five years. The base rate being of the year 1987
whereas the acquisition in question being of 1993.
20. We will also refer to order dated 22.08.2014 in the
case of Narbadi Devi & others (supra) which relied
SLP (C) No. 30817-30818 of 2016 Page 12 of 16
upon the judgment in the case of Ashrafi & others
( supra ) and accepted the annual increase of 12%
cumulatively. The High Court in the said case had
although followed the dictum in the judgment of
Ashrafi & others (supra) , however, the annual
increase of 12% was granted at a flat rate by the
High Court and not cumulatively. This Court
accordingly had modified the order of the High
Court to the aforesaid extent that 12% annual
increase would be cumulative.
21. Recently, in the year 2022, this Court in the case of
Ramrao Shankar Tapase (supra) citing the
judgment in the case of Rameshbhai Jivanbhai
Patel (supra) and other similar matters, awarded
annual increase cumulatively at the rate of 12% for
a period of three years. The High Court in the said
case had applied annual increase cumulatively at
the rate of 10%.
22. The latest judgment is of 2023 in the case of
Subhash Chander (supra)
. In this case, the Court
SLP (C) No. 30817-30818 of 2016 Page 13 of 16
held that rate of annual increase could vary from
8% to 15% per year. However, considering the facts
of the said case, this Court had awarded 10%
annual increase cumulatively for a period of two
years only.
23. From the above, we notice that the consistent view
taken by this Court for awarding annual increase to
determine the just compensation varies from case
to case and the period to be applied is a major factor
to be considered. In the present case, the period is
11 years which is pretty large as compared to the
time period considered in the cases referred to
above.
24. Taking an overall view in the matter and the
consistent view of this Court, the fair and
reasonable compensation in the present case would
be best determined if we apply 8% annual increase
with cumulative effect. This is for the reason that
the gap is huge i.e. 11 years. For shorter period of
3-5 years, it could have been 10% or 12%. But in
SLP (C) No. 30817-30818 of 2016 Page 14 of 16
no case 15% would be justified for a period of 11
years as awarded by the High Court in the
impugned order. In the present case, given the 11
years gap, 8% would be considered just and proper.
25. On rough assessment, the compensation would be
equivalent to compensation awarded by the
Reference Court. The High Court fell in error in
enhancing the compensation by applying the
cumulative annual increase of 15%.
26. In view of the above, the appeals are allowed. The
impugned judgment and order of the High Court
dated 01.06.2016 is set aside. The Land Acquisition
Collector to calculate the compensation at the rate
as determined above.
27. According to the appellant, an amount of
Rs.3,72,01,551/- had already been deposited and
also disbursed to the respondents. In case, after the
final calculation, the Land Acquisition Collector
finds that any additional amount has been paid to
the respondents, the same be recovered in
SLP (C) No. 30817-30818 of 2016 Page 15 of 16
accordance with the law, however, if the final
calculation requires some additional amount to be
paid to the respondents, the same to be paid within
two months from the date of receipt of this
judgment.
28. There shall be no order as to costs.
29. Pending applications, if any, are disposed of.
……………………………………J.
(VIKRAM NATH)
……………………………………J.
(AHSANUDDIN AMANULLAH)
NEW DELHI
OCTOBER 19, 2023
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