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Case Reviews, The Law

G. Prema v. SPL.Tahsildar, Tirupattur [2010] INSC 216

The instant case deals with the issue that whether the appellant is entitled to an increase in the amount of value of the land on the market value from the date of notification under section 4(1) of the LA Act till the date of award of the Collector? 

By: Harshal Kumar, Semester III, Year II B.A.L.L.B (Hons.), National Law University, Delhi.

Case Note:

Property – Acquisition – Compensation – Present appeal filed against order whereby High Court hold that value of land decided by Reference Court on basis of sale deed would be more appropriate because sale deed related to sale of land which was also subject matter of same acquisition – Held, acquired lands are situated on outskirts surrounded by developed areas – Land was acquired for making housing sites for weaker sections which also shows their potential for development – Deduction of 60 per cent towards development cost would be appropriate – If consider sale deed as basis, as there is gap of three years – Having regard to situation and potential, providing cumulative increase of 12 per cent for 3 years over base disclosed by sale deed would be appropriate – High Court awarded additional amount at 12 per cent and solatium at 30 per cent which is proper – Hence, appeals allowed in part as compensation for land is increased, compensation awarded in regard to well and structure is not disturbed and Respondent permitted to draw back any amount deposited in excess

Facts

  • Survey Nos. 59/3 and 59/1 of the village of Jolarpettai, Tirupattur Taluk, measuring 1,43 acres and 5,07 acres belonging to the respective appellant in both appeals (along with another 0,27 acre) were acquired to provide house sites for poorer parts, according to a preliminary notification dated 7 June 1989.
  • The Court of Reference increased the compensation to Rs.4,17,600/- per acre by its judgment and award dated 11.9.1995. It relied on a sale deed Ex. A1 dated 23.12.1988 concerning the sale of a 2520 sq. plot of land. Ft. in nearby Survey No.65/3 for Rs.30,870/- which works at Rs.12.25 per sq.ft. Or Rs.533,610/- for every acre. The Court of Reference took market value under Ex, however. A1 as sq.ft rs.12. Or the market value of the acquired land at Rs.4,176/- percent or Rs.4,17,600/- per acre, after deducting 1/4th (Rs.1044/-) from it in respect of the cost of development. The State, feeling aggrieved, appealed to the High Court.

Issues:

Whether the Appellant be entitled to an increase in the amount of value of the land on the market value from the date of notification under section 4(1) of the LA Act till the date of award of the Collector? 

Rules:

Land Acquisition Act, 1894 [repealed] – Section 23(2), Land Acquisition Act, 1894 [repealed] – Section 4(1)

Procedural History:

The High Court was of the view that relying on Ex would be more appropriate. A2 dated 11.8.1986 referring to the sale of land which was also the subject of the same acquisition. Under Ex. A2, one of the appellants (Prema) had sold 15 cents of land at Sy. For Rs.18,750/- No.59/3 which worked at Rs.1,250 percent or Rs.125,000/- per acre. Since the sale was from the year 1986 and the preliminary notification was from the year 1989, the High Court provided an increase of 10 percent per year, that is to say, Rs.375/- for three years, and reached the market value of Rs.1,625/- percent or Rs.162,500/- per acre. Consequently, the High Court has partially allowed the appeals and reduced the compensation from Rs.4,17,600/- to Rs.1,62,500/- per acre.

Arguments:

Appellants: 

  • The appellants contended that the High Court committed an error in relying on Ex. A2 as it was nearly 3 years before the acquisition and there was a steep increase in the value of land during that period.

They contended that Ex. A1 relating to Survey No. 65/3 which was a nearby land, was more appropriate for determining compensation as it was a sale on 23.12.1988, much nearer to the date of acquisition.

  • They contended that the compensation awarded by the Reference Court ought not to have been interfered with by the High Court.

Alternatively, they contended that even if Ex. A2 had to be relied on, the price thereunder should have been increased cumulatively at least by 30% per annum. 

Respondent: 

  • Learned Counsel for the respondent – state submitted that when a sale deed executed by one of the claimants relating to an acquired land was available, the High Court was justified in taking note of that transaction (Ex. A2 dated 11.8.1986) in preference to Ex. A1 dated 23.12.1988 which related to land farther away. 
  • While Ex. A2 relied on by the High Court relates to 15 cents of land whereas Ex. A1 relied on by the Reference Court was regarding a small plot of developed land measuring hardly 2 cents that are 2520 sq.ft. and therefore Ex. A2 dated 11.8.1986 was rightly preferred instead of Ex. A1 dated 23.12.1988. 
  • The respondent also contended that the increase in value per year was rightly taken as 10% and that is the standard increase, should not be interfered with.

Decision:

Land compensation is increased from Rs.162,500 per acre to Rs.195,000 per hectare. Compensation granted in respect of well and structure shall not be disturbed. The appellants shall be entitled to an additional amount @ 12% per annum on the market value from the date of notification under section 4(1) of the LA Act until the date of the collector’s award and to a solatium amount of 30% of the market value and the aggregate interest including solatium @ 9% per annum for one year from the date of taking possession and 15% per annum there. The respondent is allowed to withhold any amount deposited exceeding what is due as stated above. The respondent shall be entitled to recover the same if the appellants have drawn any amount exceeding what is due to them. Parties to bear the costs incurred.

Precedents

  1. Sardar Joginder Singh v. State of U.P. 2008 (17) SCC 133

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