Jharkhand High Court
Union Of India (Uoi) vs Hari Mahto And Ors. on 16 April, 2002
Author: M.Y. Eqbal
Bench: M.Y. Eqbal, Hari Shankar Prasad
JUDGMENT M.Y. Eqbal, J.
1. These appeals under Clause 10 of the Letters Patent arose out of Judgments dated 31.3.1995, whereby a batch of 30 appeals filed by the Union of India through Central Coalfields Limited. Ranchi have been disposed of. The appellant Union of India has filed a batch of 30 appeals Under Section 20 of the Coal Bearing Area (Acquisition and Development) Act, 1957 challenging the judgment of 1st Additional Judicial Com-missioner-cum-Tribunal, Ranchi in Reference Case Nos. 57 to 88 of 1989.
2. By the impugned judgment, the learned Single Judge allowed the appeals in part and reduced the rate of compensation in respect of the lands acquired under the said Act. The Claimants whose lands have been acquired being aggrieved by the judgment passed by the learned Single Judge, have also filed L.P.A. Nos. 182 to 220 of 1995(R) while the appellant Union of India has filed L.P.A. Nos. 139 to 168 of 1995(R) against that part of the Judgment, whereby the learned Single Judge affirmed the award of interest and solatium besides compensation.
3. Since, the learned Single Judge has narrated entire facts in detail, we need not go to discuss those facts again. Suffice it to state here that in the year 1980 by notification dated 4.2.1980 issued under Section 4 of the said Act, the Central Government intended to acquire 325 Acres of lands of village Lalyo. P.S. Mandu in the district of Hazaribagh. The said notification under Section 4 was published in the Gazette of India dated 1.3.1980. Thereafter, notification under Section 7(1) of the said Act was made on 13.5.1980 and on 22.12.1980 declaration under Section 9(1) of the Act was issued. Thereafter, the Competent Authority appointed under Section 3 of the Act determined the amount of compen-. sation for the acquired lands under Section 13(5) of the Act. The interested persons whose lands were acquired, received their compensation amount under protest. Claimants thereafter preferred claim for higher compen-. sation Under Section 17(2) of the Act before the Tribunal, constituted under Section 14(2) of the said Act, Out of total 30 awards of compensation, two reference cases being Reference case Nos. 67 and 86 of 1989 arose out of one Award and two reference case being Reference Case Nos. 73 and 80 of 1989 arose out of another Award. The claimants protested that the compensation amount fixed by the competent authority was too low and not according to the prevailing market rate. According to the claimants prevailing rate of the lands in the year 19,80 was Rs. 500 to 600/- per decimal. The claimants further case was that the lands were also suitable for construction of building as the area was already developed on account of industrialisation and there was future potentiality.
4. The reference cases were contested by the appellant-Union of India through the Central Coalfields Limited on the ground inter alia that the compensation assessed by the competent authority was quite reasonable. The Additional Judicial Commissioner-cum-Tribunal passed the judgment and Award dated 3.9.92 enhancing the amount of compensation at the flat rate of Rs. 1,20,000/--per acre irrespective of their classification. The valuation of the trees standing on the land in question was assessed and enhanced by three times to the rate fixed by the competent authority under the Act. The Tribunal further held that the claimants are entitled to solatium of 30% and interest at the rate of 9% per annum for the first year and at the rate of 15% per annum for the subsequent years upto the date of payment. Aggrieved by the said judgment of the Tribunal, the appellant- Union of India preferred all the 30 appeals being First Appeals Nos. 18 to 47 of 1993(R).
5. As noticed above, learned Single Judge allowed all the appeals in part and reduced the compensation amount from Rs. 1,20,000/- per acre to Rs. 60,000/- per acre (i.e. from Rs. 1200/- per decimal to Rs. 600/-per decimal). The appellant- Union of India being dis-satisfied with the judgment passed by the learned Single Judge preferred the aforementioned 30 Letters Patent Appeals while the claimants aggrieved by the judgment of the learned Single Judge reducing the amount of compensation, have also preferred Letters Patent Appeals. All these letters Patent Appeals have been heard together and are disposed pf by this common judgment.
6. Mr. Devi Prasad, learned senior Counsel appearing for the appellant-Union of India assailed the impugned judgment passed by the learned Single Judge as being contrary to the settled principle of law. According to the learned Counsel, the learned Single Judge should not have accepted the flat rate irrespective of class of lands inasmuch as fixation of rate of compensation by the Tribunal is not only against the provisions of Coal Bearing Area (Acquisition and Development) Act, 1957 but also against the provisions of Land Acquisition Act, 1989, (Land Acquisition Act, 1894). Learned Counsel further submitted that the learned Single Judge has erred in rejecting classification of lands and fixing the valuation without taking into consideration that the provisions of Land Acquisition Act is not applicable in the matter of calculation of compensation. Learned Counsel further submitted that the learned Single Judge has erred in law in not appreciating the case of the appellant that interest and solatium are not payable under the Coal Bearing Act. Learned Counsel relied upon two decisions of the Supreme Court in the case of Union of India v. Hari Kishan Khosla. (1993) 2 Suppl. SCC 149 and in the case Union of India v. Dhanwanti Devi and Ors.. (1996) 6 SCC 44.
7. Mr. V. Shivnath, learned Counsel appearing on behalf of the claimants/appellants on the other hand submitted that the amount of compensation assessed by the Tribunal was perfectly legal and justified and in no case it should have been reduced by the learned Single Judge. Learned Counsel further submitted that sufficient evidence has come on the record in support of the fact that the land in question falls within the industrial belt and the land has been acquired for construction of quarters for the employees of the C.C. Ltd. which has started workshop in the said village Laiyo. Learned Counsel further submitted that the learned Single Judge. without disputing the finding of the Tribunal that the lands acquired at village Ichakdih were similar to that of the lands of village Laiyo and the judgment given in the case of Ichakdih village was best piece of evidence for the purpose of determining the compensation, has recorded his finding without any basis.
8. From perusal of the impugned Judgment, it appears that learned Single Judge discussed the entire evidence both oral and documentary adduced by the parties and recorded a finding that the determination of compensation by the Tribunal at a flat rate of Rs. 1200/- per decimal was not justified. Learned Single Judge also took notice of the fact that the competent authority while determining the amount of compensation under Section 13(5) of the Act considered different classification of lands as well as the prevailing market rate on the basis of transaction vide Ext. E and E/1, which had taken place just before and after the date of Notification under Section 4(1) of the Act. According to the prevailing market rate the price in the year 1980 was Rs. 500/- to Rs. 600/- per decimal. The Tribunal on the other hand relied upon the two transactions (Exhibits 2 and 2/A) which took place after Notification under Section 4 of the Act. By the said transactions, a very small area were transferred showing the rate in the higher side. Learned Single Judge therefore rightly held that the price fetched for small piece of land cannot be a criteria to determine the value of large area of lands acquired. Learned Single Judge further rightly held that the rate of compensation fixed in respect of the lands acquired in different village namely, Ichakdih cannot be the basis for determination of compensation in respect of the lands in village Laiyo.
9. It is well settled that the market value of the lands means what the willing purchaser would pay to a willing seller for the property having regard to the advantage available to the land and the development activities which may be going on in the vicinity and potentiality of the land and such consideration must be confined to the date of notification. In the case of Land Acquisition Officer v. Justi Rohini, (1995) 1 SCC 717 : (1995) AIR SCW 823, the Apex Court held as under (Para 11 of AIR):
"In fixing the market value on the basis of its potentiality for use for building purposes, it must be established by evidence aliunde that the potential purpose must exist as on the date of acquisition by other possible purchaser in the market conditions, prevailing as on the date of the notification. Existence of constructed house or construction activity in the other similar lands in the locality for the purpose contended for or of purchase for such purposes as on the date of proposed acquisition prima facie indicates that there is demand for and the possibility of the immediate user of the land and it is a reasonable possibility to infer that the ac-
quired lands also are possessed of potential value. Therefore, the existence of demand for and a market at the time of acquisition for potential use must be established as a fact from reliable and acceptable evidence to show' that if the acquired land has been thrown into the market, others would have brought if for the special purposes or for building activity which would show the demand for and a market to purchase the land possessed of potential value for the purpose of building activity at that time. On proof thereof the land must not be valued as though it has already been built up but the possibility to use for building purpose existing as on the date of notification must be taken into consideration. The question whether the land has potential value as a building site or not is primarily one of the fact depending upon diverse factors as to its conditions the use to which it is put or is reasonable capable of being put and its suitability for building purpose its proximity to residential, commercial or industrial area existence of educational, cultural industrial or commercial institutions, existence of amenities like water, electricity, drainage and the possibility of future extension in that are. the existence of or prospects of building activities towards the acquired land or in the neighbourhood thereof are the relevant facts to be taken into consideration in evaluating the market value on the basis of potential use of the land. It is true that an element of guess, in an estimate, would have a play in determining the market value. But the present value alone falls to be determined and feats of imagination should not run riot or travel beyond its manifest limits nor be an arbitrary or whim of the Court in determing the compensation or the fixation of the market value. The existing condition, the demand of the land in the neighbourhood and other related and relevant facts should be taken into consideration in determining the compensation on the basis of potential value of the land."
10. In the case of Periyar and Parce-kanni Rubbers Ltd. v. State of Kerala.
(1991) 4 SCC 194, the Apex Court while considering a similar question observed :
Therefore, it is the paramount duty of the Land Acquisition Judge/Authority to keep before him always the even scales to adopt pragmatic approach without indulging in 'facts of imagination' and assess the market value which is reasonably capable to fetch reasonable market value. What is fair and reasonable market value is always a question of fact depending on the nature of the evidence, circumstances and probabilities in each case. The guiding star would be the conduct of a hypothetical willing vendor would offer the lands and a willing purchaser in normal human conduct would be willing to buy as a prudent man in normal market conditions as on the date of the notification under Section 4(1) but not an anxious buyer dealing at arm's length nor facade of sale or fictitious sales brought about in quick succession or otherwise to inflate the market value."
11. Their Lordship further observed :
"In the light of these principles, the further contention that having rejected the documents produced by the State, the High Court ought to have relied upon the documents produced by the appellant as comparable sale and would have confirmed the compensation awarded by the Civil Court does not impress us as well founded. It is well settled law that the amount awarded by the Land Acquisition Collector forms an offer and that it is for the claimants to adduce relevant and material evidence to establish that the acquired lands are capable of fetching higher market value and the amount offered by the Land Acquisition Collector was inadequate and he proceeded on a wrong premise or principle."
12. Similarly, in the case of Mehta Ravindraral Ajit Rai and Ors. v. State of Gujarat. (1989) 4 SCC 250, their lordship observed :
"There is however, nothing in the evidence to show that there was any sharp or speculative rise in the price of the land after the acquisition and this has been noticed by the High Court. It appears that under these circumstances the High Court was not justified in not taking this instance into account at all as it has done on the ground that it was a post acquisition sale and could not be regarded as a comparable instance at all. The market value of a piece of property for purposes of Section 23 of the Land Acquisition Act is stated to be the price at which the property changes hands from a willing seller to a willing but not too anxious a buyer, dealing at arm's length. Prices-fetched for similar land with similar advantages and potentialities under bona fide transaction of sale at or about the time of the preliminary notification are the usual and. indeed the best evidence of market value."
13. As noticed above, learned Single Judge has rightly relied upon the Ext. E and E/l by which transaction of sale and purchase took place just before and after the Notification under Section 4 of the Act and these documents show thai the prevailing market rate of the land in question in the year 1980 was Rs. 500/- to Rs. 600/- per decimal. We, therefore, do not find any justification either to enhance or reduce the rate of compensation so determined by the learned Single Judge.
14. Next question falls for consideration as to whether the learned Single Judge was correct in law in holding that the amount of solatium and interest granted by the Tribunal was justified. For better appreciation. I would first like to refer paragraph 25 of the judgment passed by the Tribunal, which is quoted herein below :
"Ext. G/5 and Ext. 11 (both are same) show that the amount of compensation payable under C.B.A. Act is much less as compared to the entitlement under the L.A. Act, therefore (a) solatium in addition to market value of the land at the rate of 30% of the market value for all acquisitions made under C.B.A. Act, (b) an interest at the rate of 9% per annum for the first year and 15% per annum for the subsequent years on the amount of compensation including solatium so calculated for payment to the land owner should be paid. In addition to that the Coal Companies will pay an additional amount to compensate for escalation is cost of the land at the rate of 12% per annum of the market value of the land in cases of all acquisitions made under the C.B.A. Act where notification under Section 9(i) of the said Act is issued on or after 30.4.1982 on perusal of awards (Ext. 9 series) it appears that C.C.L. granted to some of the claimants (Ext. D. 9/G. 9/C. 9/F, 9/g as for instance) solatium at the rate of 30% and interest at the rate of 9% for the first year and 15% for the subsequent years but to some of the claimants it has not granted either solatium or interest (Ext. 9/e. 9/c, 9/m, 9/n etc, for instance). No explanation has been given by the opposite party for this discissination."
15. it is therefore, clear that by Ext. 11 which is letter dated 12.5.1989 issued by the Joint Secretary to the Government of India addressed to the Chairman, Coal India Ltd., the Central Government admitted that the amount of compensation determined under the said Act is much less as compared to the compensation awarded under the Land Acquisition Act. The Central Government therefore taking into consideration the amended provisions of the Land Acquisition Act has decided to pay additional compensation. The relevant portion of the letter dated 12.5.89 is quoted herein below :
"The Department of Rural Development (Ministry of Agriculture) Government of India have been putting pressure on us ever after the aforesaid amendments were carried out in the L.A. Act in 1894 to effect corresponding amendment in the Coal Bearing Areas (Acquisition & Development) Act, 1957 also so that all the disparities between the two Acts inasmuch as they relate to payment of compensation were removed and land loosers were not put to any discrimination. The Central Government has since taken a decision in principle to amend the C.B.A. Act in line with the Land Acquisition Act and necessary consultation in this regard are already on with the concern ministries of the Government of India. It will however, will take some time before the proposed amendments are inacted after completion of all formalities. Till then decisions already exist to pay :
(a) Solatium in addition to market value of the land at the rate of 30% of the market value or all acquisitions made under the C.B.A. Act,
(b) An interest at the rate of 9% per annum for the first year and 15% per annum for the subsequent years on the amount of compensation including solatium so calculated for payment of the land owner."
16. The Competent Authority while making reference to the Tribunal has also shown calculation of aforesaid amount on different heads besides compensation. This was done by the competent authority on the advise of the Central Government. It appears that when the matter was referred to the Tribunal, the appellant-Union of India did not question on calculation of payment of solatium and interest to the claimant-respondent rather appellant opposed the enhancement of compensation only. In the case of Union of India v. Dhanwanti Devi, (supra), following the earlier decision of Union of India v. Hari Kishan Khosla, (1993) AIR SCW 105. their Lordship held when the Act does not provide for payment of solatium and the interest on the amount of compensation then the same cannot be paid. Their Lordship observed :
"All the decisions cited by Mr. Vaidyanathan in support of his contention on solatium were considered in Hari Krishan Khosla case (1993 AIR SCW 105). His repeated attempts failed to persuade us to have that decision referred to a larger Bench of five Judges. We are unable to persuade ourselves to doubt the correctness of the judgments in Hari Krishan Khosla case. All the, decisions cited by the Counsel were considered in extenso by the Bench in Hari Krishan Khosla case. We are, therefore of the opinion that it is not necessary to re-examine all the decisions once over. We are in respectful agreement with the ratio in Hari Krishan Khosla case. It would be seen that Sub-section (2) of Section 23 of the Land Acquisition Act. expressly states that the solatium is "in addition to the compensation as considered for compulsory nature of acquisition. The distinction....was pointed out in a catena of decisions including the one referred by a Bench of three Judges in Prem Nath Kapur v. National Fertilizer Corpn. of India Ltd., 1996 (2) SCC 71. For parity of reasons, without further discussions it was held that interest also was not payable. We. therefore, respectfully agree with the ratio in Hari Krishan Khosla case that the Act omitted to pay solatium and interest, in addition to compensation. The commission by the Legis-
lature, as stated earlier, is deliberate. In Distt. Judge case a Bench of two Judges of this Court had held that the claimant is not entitled to solatium and interest. Accordingly, we hold that the respondents are not entitled to solatium and interest."
17. There is no dispute that there is no provision under the said Act for payment of solatium and interest on the amount of compensation. The question, therefore, arose whether the decision aforesaid will apply in the facts and circumstances of the present case. Before coming to the facts of the instant case, I must take help of the guidelines laid down by the Apex Court in the case of Dhan-wanti Devi, 1996 AIR SCW 4020 (supra) in the matter of applying ratio decided by the higher Courts. The Apex Court held as under :
"it is not everything said by a Judge while giving judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well settled theory of precedents, every decision contains three basic postulates-(i) findings of material facts, directed and inferential. An inferential finding of fact is the inference which the Judge draws from the direct or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment bases on the combined effect of the above. A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in the judgment. Every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which may be found there, is not intended to be exposition of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found.
Therefore, in order to understand and appreciate the binding force of a decision it is always necessary to see what were the facts in the case in which the decision was given and what was the point which had to be decided. No Judgment can be read as if it is a statute. A word or a clause or a sentence in the judgment can not be regarded as a full exposition of law. Law cannot afford to be static and, therefore. Judges are to employ an intelligent technique in the use of precedents."
18. In the case of Narain Das Jain v. Agra Nagar Mahapalika, Agra, (1991) 4 5CC 212, the fact of the case was that some land was acquired by the Agra Town Improvement Trust under the provisions of U.P. Town Improvement Act, 1919. The acquisition proceeding was initiated under the said culminated in an award followed by taking possession of the land. The compensation was awarded but no solatium was awarded as none was awardable under the said Act. The matter ultimately came to the Supreme Court where their Lordship held :
"The importance of the award of solatium cannot be undermined by any procedural blockades. It follows automatically the market value of the land acquired, as a shadow would to a man. It springs up spontaneously as a part of the statutory growth on the determination and emergence of market value of the land acquired. It follows as a matter of course without any impediment. That it falls to be awarded by the Court "in every case" leaves no discretion with the Court in not awarding it in some cases and awarding in others. Since the award of solatium is in consideration of the compulsory nature of acquisition, it is a hanging mandate for the Court to award and supply the omission at any stage where the Court gets occasion to amend or rectify. This is the spirit of the provision, wherever made."
19. As noticed above, in the instant case, notification under Sections 4 and 9 of the Coal Bearing Act was issued in the year 1980 and thereafter the authority under the Act determined the Compensation for the acquired land to be paid to the claimant. From the records, it appears that besides compensation amount additional compensation at the rate of 18% on such amount and interest were also calculated. The competent authority while making reference to the Tribunal has also shown calculation of said amount on different heads. This was done by the Competent Authority on the advise of the Central Government. It further appears from the judgment of the Tribunal that the appel-
lant- Central Coalfields Ltd. granted solatium of 30% and interest at the rate of 9% per annum for the first year and 15% for subsequent years to many of the claimants. In support of that, claimants proved several exhibits and these facts have not been controverted by the appellants Union of India. A bench of Patna High Court in the case of Union of India v. Kashinath Mahto and others, AIR 1998 Pat 100, considered exactly a similar question arose with regard to payment of interest and solatium for the land acquired under the Coal Bearing Area (Acquisition & Development) Act. It was held :
"It is therefore, evident that the competent authority acting on the said letter, determined the compensation and also calculated 30% additional 'compensation and interest at the rate of 9% per annum for the first year and 15% per annum for the subsequent years. As per calculation the appellant paid the said amount and some of the claimants received the same on protest And then the matter was preferred to the Tribunal. As stated above, the appellant has not questioned the payment of the aforementioned additional compensation and interest before the Tribunal when the matter was heard on reference. It is, therefore, evident that since the very beginning, the competent, authority and the appellant were aware about the letter of the Central Government and accepting the said decision, they calculated the additional compensation and interest and in fact, the same have been paid to some of the claimants. In such a situation, in my opinion, now the appellant can not be allowed to turn back and say that the same is not payable for the reason that payment of such amount is not proved under the said Act."
20. Taking into consideration, the entire facts of the case and the discussions made above, we are therefore of the definite view that the learned Single Judge has rightly upheld the judgment of the Tribunal on the question of payment of interest and solatium to the claimants.
21. For the reasons aforesaid, we do not find any merit in all these appeals, which are accordingly dismissed.