Appeals challenging only solatium, additional compensation or interest in land acquisition cases still attract ad valorem court fee, Supreme Court rules

The respondents’ land was acquired under the Land Acquisition Act, 1894 for rehabilitation of Tehri Dam oustees.

Although compensation had been settled through negotiation, the respondents sought a reference under Section 18, claiming statutory benefits and alleging that compensation had not been awarded for the entire acquired area.

The Reference Court rejected the claim concerning the additional 1.75 acres but awarded the statutory additional amount under Section 23(1-A), solatium under Section 23(2), and interest under Sections 28 and 34 of the Act.

The appellant challenged only the award of these statutory benefits in an appeal under Section 54 of the Act and paid a fixed court fee of Rs. 10, contending that the market value and basic compensation were not under challenge.

The High Court directed the appellant to pay ad valorem court fee on the decretal amount of Rs. 2,34,03,602.05.

Section 8 of the Court Fees Act, 1870 requires ad valorem court fee on an appeal relating to compensation, calculated according to the difference between the amount awarded and the amount claimed by the appellant.

Sections 23(1-A) and 23(2) of the Land Acquisition Act, 1894 make the additional amount and solatium mandatory components of compensation, while Section 28 provides for statutory interest on excess compensation.

Under Section 26(2) of the Land Acquisition Act, a Reference Court’s award is deemed to be a decree under the Code of Civil Procedure.

Sunder v. Union of India, (2001) 7 SCC 211, and Narain Das Jain v. Agra Nagar Mahapalika, (1991) 4 SCC 212, establish that solatium, the additional amount and statutory interest constitute integral components of compensation.

Indore Development Authority v. Tarak Singh, (1995) Supp (3) SCC 257, holds that an appeal seeking to avoid or reduce compensation awarded by the Reference Court attracts ad valorem court fee under Section 8.

Fiscal statutes must be strictly construed, and no exemption from the statutory court-fee requirement may be implied in the absence of an express legislative provision.

The Court held that the statutory benefits awarded by the Reference Court were not independent or collateral claims but formed part of the composite compensation determined under Section 23 of the Land Acquisition Act.

Since the award was deemed to be a decree under Section 26(2), the appellant’s challenge to the deletion of the additional amount, solatium and interest was, in substance, a challenge seeking reduction or modification of the decretal compensation.

The character of the appeal did not change merely because the appellant accepted the market value and disputed only particular components of the award.

Applying Indore Development Authority, the Court concluded that Section 8 of the Court Fees Act covered the appeal and required ad valorem court fee on the amount sought to be excluded from the award.

The absence of any applicable Uttarakhand amendment excluding statutory benefits from Section 8 further precluded payment of a fixed fee.

An appeal under Section 54 seeking their reduction or exclusion is an appeal relating to compensation and attracts ad valorem court fee under Section 8 of the Court Fees Act, 1870; a fixed court fee of Rs. 10 was impermissible.

The Civil Appeal was dismissed, and the High Court was directed to proceed with the appellant’s first appeal after the deficit court fee deposited pursuant to this Court’s interim order was transferred to it.

No order as to costs was made.