Gujarat High Court
Western Dedicated Freight Corridor ... vs Original Claimants on 2 July, 2018
Equivalent citations: AIRONLINE 2018 GUJ 44
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/FA/1977/2018 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1977 of 2018
With
R/FIRST APPEAL NO. 1978 of 2018
With
R/FIRST APPEAL NO. 1979 of 2018
With
R/FIRST APPEAL NO. 1980 of 2018
With
R/FIRST APPEAL NO. 1981 of 2018
With
R/FIRST APPEAL NO. 1982 of 2018
With
R/FIRST APPEAL NO. 1983 of 2018
With
R/FIRST APPEAL NO. 1984 of 2018
With
R/FIRST APPEAL NO. 1985 of 2018
With
R/FIRST APPEAL NO. 1986 of 2018
With
R/FIRST APPEAL NO. 1987 of 2018
With
R/FIRST APPEAL NO. 1988 of 2018
With
R/FIRST APPEAL NO. 1989 of 2018
With
R/FIRST APPEAL NO. 1991 of 2018
With
R/FIRST APPEAL NO. 1993 of 2018
With
R/FIRST APPEAL NO. 1996 of 2018
With
R/FIRST APPEAL NO. 1997 of 2018
With
R/FIRST APPEAL NO. 1998 of 2018
With
R/FIRST APPEAL NO. 1999 of 2018
With
R/FIRST APPEAL NO. 2000 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
Page 1 of 17
C/FA/1977/2018 JUDGMENT
and
HONOURABLE MR.JUSTICE B.N. KARIA
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1 Whether Reporters of Local Papers may be allowed to
see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law
as to the interpretation of the Constitution of India or any
order made thereunder ?
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WESTERN DEDICATED FREIGHT CORRIDOR CORPORATION OF INDIA
LTD
Versus
ORIGINAL CLAIMANTS
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Appearance:
MS ARCHANA U AMIN(2462) for the PETITIONER(s) No. 1
for the RESPONDENT(s) No. 1
. for the RESPONDENT(s) No. 1.1,1.2,1.3,1.4
MR.DHAWAN JAYSWAL, AGP for the RESPONDENT(s) No.1 in First Appeal
Nos.1977 to 1987 of 2018
MS.SNUSHA S. JOSHI, AGP for the RESPONDENT(s) No.1 in First Appeal
Nos.1988, 1989, 1991, 1993 and First Appeal Nos.1996 to 2000 of 2018
MR GHANSHYAM AMIN(123) for the RESPONDENT(s) No. 1.1,1.2,1.3,1.4
MR SAURABH G AMIN(2168) for the RESPONDENT(s) No. 1.1,1.2,1.3,1.4
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 02/07/2018
COMMON ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Looking to the controversy involved, we have heard the First Appeals finally at this very stage with the consent of learned advocate Shri Saurabh Amin for the respondentsclaimants. These appeals arise in common background. They arise out of interim Page 2 of 17 C/FA/1977/2018 JUDGMENT awards passed by the arbitrator for acquisition of lands for special railway project. Basic facts are common. Variation is in the villages where the lands are under acquisition and the precise amount of interim compensation awarded by the arbitrator. We may record facts from First Appeal No.1977 of 2018.
2. This appeal is filed by the Western Dedicated Freight Corridor Corporation of India Ltd. (hereinafter to be referred to as 'the Corporation' for short). The appellant Corporation has challenged a judgment dated 18.03.2017 passed by the learned Additional Sessions Judge, Anand, in Misc. Civil Application No.123 of 2016 filed by the Corporation as well as an order dated 30.11.2017 passed in Misc. Civil Application No.1 of 2017.
3. The said Corporation is specially constituted for execution of the work of Dedicated Freight Corridor of the Indian Railways. The Dedicated Freight Corridor would exclusively handle the freight traffic. Understandably to lay down the railway lines and construct the freight corridor, the railway administration would require vast areas of Government Page 3 of 17 C/FA/1977/2018 JUDGMENT as well as public lands. Being a notified special railway project, the acquisition proceedings were undertaken in terms of chapter IVA of the Railways Act, 1989 ('the Act' for short). Private lands of Village:Ruun, Taluka:Sojitra, District:Anand, were compulsorily acquired under the said chapter. Notification under section 20A of the Act was published on 29.05.2009. Subsequent steps were taken by the competent authority. Award was passed on 09.02.2011. Compensation was awarded at the rate of Rs.17.13 per sq.mtrs. The aggrieved land owners approached the arbitrator for enhancement of the compensation. In such reference, since the final award would take considerable time, they requested the arbitrator to pass interim award. Their main contention was that several parcels of Government land of the same village have been acquired by the railway authorities for the same purpose, under the same notification under section 20A. A specially constituted committee (hereinafter to be referred to as 'the committee' for short) assessed the market value of the land for the purpose of transfer of the land from the State Government to the railways. The Page 4 of 17 C/FA/1977/2018 JUDGMENT committee headed by the Collector and Chairman of the Valuation Committee gave a report on 20.10.2014, in which, the market value of the land was assessed at Rs.630/ per sq.mtrs. According to the claimants, the railway administration accepted such valuation, paid the resultant compensation and has also acquired the State land for the purpose of the said project. The Claimants therefore urged the arbitrator to pass an interim award granting compensation on the basis of this assessment of the market value of the land by way of interim measure.
4. The railway administration strongly opposed this prayer contending that the assessment of the market value by the committee constituted for entirely different purpose cannot be automatically adopted in the present case and in any case, there is no occasion to pass an interim award.
5. The arbitrator passed interim award dated 16.05.2016, in which, he awarded additional compensation of Rs.252/ per sq.mtrs by way of interim measure for the lands in question. Such amount would carry solatium at the rate of 60% and Page 5 of 17 C/FA/1977/2018 JUDGMENT interest at the rate of 15% from the date of award passed by the competent authority till actual payment.
6. Appellant filed Misc. Civil Application before the District Court, requesting for setting aside such interim arbitral award. Such application came to be dismissed by the learned Additional District Judge, by the impugned order dated 18.03.2017. The appellant filed Review Petition which also came to be dismissed by order dated 30.11.2017. These orders are therefore challenged in this appeal.
7. Learned counsel Ms.Archana Amin for the appellant Corporation vehemently contended that the arbitrator committed a serious error in passing the interim award and awarding compensation at an exorbitant rate of Rs.252/ per sq.mtrs. She criticized the award on following main grounds:
I. That there was no basis for comparing the market value of the acquired land with the assessment of the value of the Government lands carried out by the committee. Firstly, because this assessment itself is not final. The railway Page 6 of 17 C/FA/1977/2018 JUDGMENT administration has strongly opposed the contents thereof. Secondly, in any case, there is no basis for awarding compensation for private lands at the rate on which intergovernment transactions take place.
II. Awarding solatium at the rate of 60% was not permitted.
III. Interest at the rate of 15% is not statutorily recognized.
8. On the other hand learned counsel Shri Saurabh Amin for the respondentclaimant contended that the committee had determined the market value of the Government land at Rs.630/ per sq.mtrs. The railway administration has accepted such valuation and has paid price at such rate for acquiring lands of the State Government. The railways now cannot offer lower compensation for private lands. The arbitrator has awarded additional compensation only at the rate of Rs.252/ per sq.mtrs. which is barely about 40% of the market value assessed by the committee. Awarding solatium or interest is not impermissible. Page 7 of 17
C/FA/1977/2018 JUDGMENT
9. Before discussing the factual material on record, we may refer to the statutory provisions. Chapter IVA of the Act pertains to land acquisition for a special railway project. Whenever a railway project is recognized and notified as a special railway project, land for execution of such a project would be acquired under the provisions of the said chapter. The said chapter makes provisions for quicker and smoother acquisition of land for special projects as also for compensating land loosers adequately for acquisition of their lands. We are not concerned with initial stages of acquisition where publication of notification of intention of acquisition and other steps before the land is finally acquired. We may straightway refer to section 20F pertaining to determination of amount payable as compensation. Relevant portion of this section reads as under:
Section 20F. Determination of amount payable at compensation "(1) Where any land is acquired under this Act, there shall be paid an amount which shall be determined by an order of the competent authority.
...
...
Page 8 of 17
C/FA/1977/2018 JUDGMENT (6) If the amount determined by the competent authority under subsection (1) or as the case may be subsection (3) is not acceptable to either of the parties, the amount shall, on an application by either of the parties, be determined by the arbitrator to be appointed by the Central Government in such manner as may be prescribed.
(7) Subject to the provisions of this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to every arbitration under this Act.
(8) The competent authority or the arbitrator while determining the amount of compensation under subsection (1) or subsection (6), as the case may be, shall take into consideration--
(a) the market value of the land on the date of publication of the notification under section 20A;
(b) the damage, if any sustained by the person interested at the time of taking possession of the land, by reason of the severing of such land from other land;
(c) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the acquisition injuriously affecting his other immovable property in any manner, or his earnings;
(d) if, in consequences of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change.
(9) In addition to the marketvalue of the land as above provided, the competent authority or the arbitrator, as the case may be, shall in every case award a sum of sixty per centum on Page 9 of 17 C/FA/1977/2018 JUDGMENT such marketvalue, in consideration of the compulsory nature of the acquisition."
10. Perusal of this section would show that for acquisition of the land, compensation would be paid as determined by the competent authority. If the amount so determined is not acceptable to the either parties which would mean the land looser or the railway administration, the issue would be referred for the arbitrator for his determination. Subsection (8) of section 20F provides broad legislative guidelines for determining the market value of the land either by the competent authority or by the arbitrator. Clause (a) whereof provides that while determining the compensation, the said authorities would take into consideration the market value of the land on the date of publication of the notification under section 20A. Subsection (9) of section 20F provides for awarding solatium at the rate of sixty percent of the market value looking to the compulsory nature of the acquisition.
11. Section 20G pertains to criterion for determination of market value of land. Subsection (1) thereof provides that the competent authority Page 10 of 17 C/FA/1977/2018 JUDGMENT shall adopt the following criteria in assessing and determining the market value viz; (i) the minimum land value, if any, specified in the Indian Stamp Act for the registration of the sale deeds in the area, where the land is situated; or (ii) the average of the sale price for similar type of land situated in the village or vicinity, ascertained from not less than fifty per cent of the sale deeds registered during the preceding three years, where higher price has been paid. In plain terms thus, the minimum land value prescribed for the purpose of stamp duty collection for the registration of sale deed would be an important consideration.
12. Section 20H of the Act pertains to deposit and payment of amount. Subsection (5) thereof provides that where the amount determined under section 20F by the arbitrator is in excess of the amount determined by the competent authority, the arbitrator may award interest at nine per cent per annum on such excess amount from the date of taking possession under section 20I till the date of actual deposit thereof.
13. We have to deal with interim award of the Page 11 of 17 C/FA/1977/2018 JUDGMENT arbitrator and the decisions of the Civil Court in not interfering with such interim award, in background of such statutory provisions. While doing so, we would also be conscious of the limited scope of the First Appeal against the order of the Civil Court refusing to set aside an arbitral award. The statutory provisions would show that the proceedings before the arbitrator would be governed by the provisions of the Arbitration and Conciliation Act, 1996, which recognizes the authority of an arbitrator to pass an interim award. In fact, the present interim award is not questioned before us on the ground of competence or the jurisdiction of the arbitrator to pass such an award. We have noticed that the land owners, the aggrieved persons had placed the report of the valuation committee dated 20.10.2014 assessing market value of the government land at Rs.630/ per sq.mtrs. This committee was specially constituted for assessing the market value of the State Government land which was required for the purpose of the Dedicated Freight Corridor. The notification under section 20A was common for the Government as well as the private land under Page 12 of 17 C/FA/1977/2018 JUDGMENT acquisition. The short question is therefore, was it open for the arbitrator to be influenced if not fully guided by such assessment and whether he committed a serious error in awarding interim compensation on the basis of such assessment. We have perused the report of the committee. The report records that the market value of the land as on the date of the report was assessed by the Anand Town Planner at Rs.627/ per sq.mtrs. The committee took into account the jantri rates fixed by the Government and other relevant materials besides the said report of the Town Planner to arrive at a figure of Rs.630/ of market value of the land. The report is somewhat silent on, as on which date such market value of Rs.630/ per sq.mtrs. was obtained viz. whether the date of report or the date of notification under section 20A of the Act. Be that as it may, under protest, the railway administration has paid to the State Government compensation for acquiring State land for the project in question. It may be, as argued by Ms.Amin for the appellant, that the request of the railways is to transfer the State Government land at a lower rate as is done in the State of Rajasthan or at no cost as is Page 13 of 17 C/FA/1977/2018 JUDGMENT done by the State of Haryana. The private negotiations between the two government agencies for transfer of the land from one Government to another Government by itself cannot determine the true market value of the land in question. Even if therefore, there is a proposal for reducing the market value of the State Government land transferred to the railway administration, that by itself, would not determine the compensation payable to the private land owners. The computation of the market value arrived by the specially constituted committee cannot be summarily brushed aside.
14. Having said that, it cannot be disputed that such computation requires a closer scrutiny. As noted, as against the market value of the land in the opinion of the town planner being Rs.627/ per sq.mtrs. on the date of the report, the Committee has assessed the value of the land at Rs.630/ per sq.mtrs. (presumably as on the date of notification under section 20A of the Act). This is a grey area which requires further examination. Further, any such assessment cannot in absence of a binding provision on the railway administration be the sole Page 14 of 17 C/FA/1977/2018 JUDGMENT consideration. The parameters laid down under the statute for ascertaining the market value would have to be applied in light of the evidences that may be brought on record. One of the considerations as noted which flows from subsection (1) of section 20G is the minimum land value specified for calculation of stamp duty for registration of sale deed which is popularly known as jantri rates. The report of the committee dated 20.10.2014 records that the Government published jantri rates ranged from Rs.61 per sq.mtrs. to Rs.310/ per sq.mtrs. depending on the category of land. This is very significant.
15. The arbitrator in his interim award, has awarded additional compensation at the rate of Rs.252/ per sq.mtrs. by taking the basis of the report of the committee dated 20.10.2014. It is not clear to us how this adjustment is made from the rate of Rs.630/ of the committee to additional Rs.262/ awarded by the arbitrator. Being interim award in nature and looking to the far reaching effect such award may have in the process of computation and awarding compensation to the claimants, we would like to trade somewhat cautiously. Eventually if the final award Page 15 of 17 C/FA/1977/2018 JUDGMENT in any manner is lower than the interim compensation awarded by the arbitrator, serious question of recovery of the Government monies would arise. Some adjustment would therefore be necessary.
16. Before giving final directions, we would dispose of the two consequential contentions. Solatium at the rate of sixty percent is statutorily recognized and mandated. If the basic assessment of the excess compensation is correct, the awarding solatium at the prescribed rate cannot be faulted. Interest at the rate of 15% awarded by the arbitrator does not bear out any statutory support. As noted, interest prescribed under subsection (5) of section 20H is 9% per annum from the date of taking possession till actual payment. The arbitrator therefore committed an error in awarding higher interest, that too without any discussion.
17. Under the circumstances, First Appeals are disposed of with following directions:
I. The appellant Corporation shall deposit the entire amount of additional compensation awarded by the arbitrator under interim awards with solatium as Page 16 of 17 C/FA/1977/2018 JUDGMENT directed but simple interest at the rate of 9% per annum from the date of taking possession till actual deposit before the concerned District Courts, latest by 30.10.2018.
II. It would be open for the claimants to withdraw 50% thereof which withdrawal shall be subject to the final award that the arbitrator may pass. III. Remaining 50% shall be invested in any nationalized bank in cumulative Fixed Deposit initially for a period of one year, to be renewed from time to time till passing of the final award by the arbitrator. Interim award of the arbitrator stands modified to this extent.
18. The orders of the Civil Court also stand merged in this order.
19. All First Appeals are disposed of accordingly.
(AKIL KURESHI, J) (B.N. KARIA, J) ANKIT SHAH Page 17 of 17