Karnataka High Court
The Special Land Acquisition Officer vs Fakirappa Mugubasappa And Ors. on 23 February, 2004
Equivalent citations: ILR2004KAR2371
Author: S. Abdul Nazeer
Bench: S. Abdul Nazeer
JUDGMENT S. Abdul Nazeer, J.
1. Since common questions of law and fact are involved in all these appeals, with the consent of the learned Counsel for the parties, they are heard and disposed of by this Common Judgment.
2. These appeals and cross-objections are filed by the Special Land Acquisition Officer, Malaprabha Project, Saundatti and the claimants respectively being aggrieved by the common judgment and award passed in LAG No.345/2000 and connected matters dated 22.11.2001.
3. The appellant has acquired the lands in question situated in Budihal Village, Bailhongal Taluk, for a public purpose, for the submergence of Malaprabha Project. Preliminary Notification was issued on 31.7.1997 followed by a Final Notification dated 17.9.1998. The Appellant has passed an award on 15.4.2000. Possession of the lands was already taken on 29.8.1985.
4. The Land Acquisition Officer has awarded a compensation of Rs. 25,000/- per acre for the acquired lands. Being dis-satisfed with the award, the claimants filed applications under Section 18(1) of the Land Acquisition Act seeking reference before the Civil Judge, Sr. Dn. Bailhongal. By the judgment and award impugned in these appeals, the Reference Court awarded a compensation of Rs. 50,000/- per acre. The Reference Court awarded interest on the enhanced amount from the date of possession i.e. from 29.8.1985.
5. I have heard the learned Additional Government Advocate for the Appellant and Sri Lokesh Malavalli, learned Counsel for the claimants/cross-objectors.
6. Learned Additional Government Advocate contends that the award of Rs. 50,000/- per acre is excessive and exorbitant more so because the lands are dry lands. He further contends that the award of interest from the date of its possession is contrary to the law declared by the Hon'ble Supreme Court in the case of UNION OF INDIA v. BUDH SINGH AND ORS. He argues that since possession was taken prior to the date of Preliminary Notification, interest is required to be awarded only from the date of Preliminary Notification. He has also placed reliance on the Division Bench decision of this Court in the case of LAND ACQUISITION OFFICER v. VEERABHADRAIAH, for the said proposition.
7. Per contra, learned Counsel for the claimants submits that the award of compensation at Rs. 50,000/- per acre is too low and is contrary to the material on record. Placing reliance on a decision of this Court in the case of SPECIAL LAND ACQUISITION OFFICER v. BASANNAGOUDA SANGAPPAGOUDA AND ORS. he submits that in identical circumstances, this Court has awarded compensation of Rs. 70,000/- per acre. He points out the finding of fact recorded by the Reference Court that the average price of DCH Cotton per quintal during the relevant period is Rs. 2,200/- and the average yield per acre is 6.5 quintal and the gross income per acre comes to Rs. 12,150/-. Even if the lands are treated as dry lands and 40% of the gross income is deducted towards cost of cultivation, the remaining amount comes to Rs. 7,290/-. On application of standard multiplier of 10, the market value comes to Rs. 72,900/-. He submits that the claimants are atleast entitled to Rs. 70,000/- per acre towards compensation. He further argues that since possession of the land was taken much earlier to the date of Preliminary Notification, the claimants are entitled to interest from the date of taking possession. In this connection he relies on decisions of the Hon'ble Supreme Court in the case of PREM NATH KAPUR AND ANR. v. NATIONAL FERTILIZERS CORPORATION OF INDIA LIMITED AND ORS., SIDDAPPA VASAPPA KURI v. SPECIAL LAND ACQUISITION OFFICER and the decisions of this Court in the case of SPECIAL LAND ACQUISITION OFFICER, MALAPRABHA PROJECT IV, RAMDURGA v. SANKAPPA KALLAPPA KALASAD (DECEASED) BY L.R. SPECIAL LAND ACQUISITION OFFICER, MALAPRABHA PROJECT IV, RAMDURGA v. VIRUPAXIGOUDA LINGANAGOUDA PATIL AND ANR., HAL v. MUNISWAMY REDDY and the decision of the Bombay High Court in the case of SACHIDANANDA KAKODKAR v. SPECIAL LAND ACQUISITION OFFICER. He also relies on the decision of this Court in the case of D.V. LAKSHMANA RAO v. STATE OF KARNATAKA for the proposition that if there are two conflicting judgments of the Hon'ble Supreme Court, later will prevail over the earlier.
8. In the light of the rival contentions, the points that arise for consideration are as follows:
i) Whether the determination of compensation by the Reference Court at Rs. 50,000/- per acre is just and proper.
ii) Whether the claimants are entitled for interest from the date of taking possession.
Re.Point No. (i)
9. The Reference Court has mainly relied on Ex.P.2 Yield Certificate, Ex.P.3 Price List issued by APMC, Bailhongal, Ex.P.4 copy of the judgment in LAC No. 105/1994, Ex.P.5 copy of the judgment in LACA No. 155/1995 for determination of the market value. The Reference Court upon consideration of the material on record has come to a conclusion that the claimants were growing DCH Cotton on the said land. Material on record also shows that in the acquired lands there were no open wells and bore-wells and all the acquired lands are dry lands and rain fed lands. As per Ex.P.2, yield of DCH Cotton for the year 1996-1997 is 6.527 quintals per acre. Preliminary Notification is dated 31.7.1997. The claimants have not produced yield certificate for the relevant year 199/-98. The Reference Court has adopted yield certificate Ex.P.2 for the year 199/-98. The Reference Court records a finding that the average price of DCH Cotton per quintal during the relevant period is Rs. 2,200/-. The average price of DCH Cotton if multiplied by a minimum yield per acre 6.5 quintal the gross income per acre comes to Rs. 12,150/- and 40% of the gross income is required to be deducted towards cost of cultivation. The balance comes to Rs. 7,290/-. By applying the standard multiplier of 10, the market value comes to Rs. 72,900/-. The claimants have restricted their claim to Rs. 70,000/- in the Cross-Objections.
10. Learned Counsel for the claimants has relied on a decision of this Court in the case of SPECIAL LAND ACQUISITION OFFICER v. BASANAGOUDA SANGAPPAGOUDA, KHUSLAPUR AND ORS., (Supra) and submits that this Court has awarded a compensation of Rs. 70,000/- for the lands which were similarly situated. In Basanagouda's case, Preliminary Notification was issued on 18.9.1997 i.e. about 1 and 1/2 months prior to the date issue of similar Notification in this case. The lands are acquired for Malaprabha Project situated at Bailhongal Taluk. Similar documents have been relied on by the claimants before the Reference Court seeking determination of compensation. After consideration of the material on record, this Court has awarded a compensation of Rs. 70,000/- per acre.
11. It is fairly well settled that in the matters relating to Land Acquisition, the judgment of a Court in regard to similar lands or properties would be a relevant piece of evidence. It is, to be noted that an element of guesswork is inherent in most of the cases involving determination of the market value of the acquired land. Needless to say that the previous awards in respect of similarly situated lands is a safe-guide for determination of compensation. Having regard to the material on record. I am of the view that the claimants are also entitled for compensation of Rs. 70,000/- per acre.
Re. Point No. (ii).
12. There is no dispute that possession of the land was taken earlier to the date of preliminary Notification. The question therefore to be considered is whether the claimants are entitled to interest under Section 34 of the Land Acquisition Act from the date of Preliminary Notification or from the date of taking possession. In Budh Singh's case , similar question arose for consideration. In the said case, possession of the land was taken on 15.3.1963. The High Court awarded interest at 18% p.a. from the date of possession i.e. from 15.3.1963 till 15.11.1984, preceding the date on which the notification under Section 4(1) was published. The Hon'ble Supreme Court held that payment of interest under the Act is squarely covered by the provisions of the Act. It is further held that the parameter for initiation of the proceedings is the publication of the notification under Section 4(1) of the Act in the State Gazette or in an appropriate case in District Gazette as per the local amendments. But the condition precedent is publication of the notification under Section 4(1) in the appropriate gazette and that would give legitimacy to the State to take possession of the land in accordance with the provisions of the Act. The relevant portion reads as under:
"5. The other provision relevant for this purpose is Section 28 of the Act, which empowers the reference Court or the High Court for awarding interest on the enhanced compensation from the date of taking possession till date of payment as referred to here-in-before. Thus, it could be seen that the statute covers the entire field of operation of the liability of the State to make payment of interest and entitlement thereof by the owner when land has been taken over and possession in consequence thereof, the land owner was deprived of the enjoyment thereof. Thus, it could be seen that the Court has no power to impose any condition to pay interest in excess of the rate and manner prescribed by the statute as well as for a period anterior to the publication of Section 4(1) of the Act in the State Gazette or in an appropriate case in District Gazette as per the local amendments. But the condition precedent is publication of the notification under Section 4(1) in the appropriate gazette. That would give legitimacy to the State to take possession of the land in accordance with the provisions of the Act. Any possession otherwise would not be considered to be possession taken under the Act. In fact, a situation has been envisaged under Section 48(2) of the Act, namely, that when proceedings under the Act were initiated and in the midstream the proceedings were dropped, the owner who has been deprived of the enjoyment of the property, the statute prescribes the remedy of determination of the amount of compensation due to the owner for the damages suffered by the owner in consequence of the notice of the proceedings under the Act. The statute also imposes liability on the State to reimburse the costs incurred by the owner to defend the proceedings under the Act. The Act is a self contained code and common law principles of justice, equity and good conscience cannot be extended in awarding interest, contrary to the provisions of the statute."
13. After consideration of the relevant provisions of the Land Acquisition Act, the Hon'ble Supreme Court has directed payment of interest at 9% p.a on enhanced compensation from 16.10.1984. The Supreme Court has further held as follows:
"Thus considered, we are of the opinion, that the High Court was clearly in error in directing payment of interest at 18% per annum and that too, from the date of taking possession. The respondents are entitled to interest at 9% per annum on enhanced compensation from 16.10.1984. The appeal is accordingly allowed. However, since the period of limitation for filing and suit for damages from use and occupation by the Stage from 15.3.1963 to 15.11.1984 is barred, though legally we cannot give any direction for payment, it is open to the appropriate Government to consider the same to do the needful to the claimants. No costs."
14. A Division Bench of this Court in Veerabhadraiah's case (MFA No. 4672/2001 disposed of on 2.7.2003) has taken a similar view following the decision of the Supreme Court in Budh Singh's case. The relevant portion is as follows:
"The Reference Court has awarded interest at the rate of 9% p.a. for one year from the date of taking possession (27.3.1986) and thereafter at the rate of 15%. p.a. When the compensation is determined with reference to the date of Preliminary notification and not with reference to date of taking possession of the land, obviously, interest cannot be worked out from the date of taking possession. The matter is now covered by the decision of the Supreme Court in Union of India v. Budh Singh , wherein the Supreme Court held that Court has no jurisdiction to award interest for any period anterior to notification under Section 4(1) of the Act. Hence, the direction of the Reference Court for payment of interest from the date of taking possession of the land is liable to be set aside."
(Emphasis supplied)
15. Placing reliance on the decision of the Supreme Court in Prem Nath Kapur's case, learned Counsel for the claimants submit that the claimants are entitled to interest under Section 34 of the LA Act from the date of possession. He further submits that since this decision is rendered by a Larger Bench, it will prevail over Budh Singh's case. In Prem Nath Kapur's case, this point did not directly arose for consideration. The question that arose for consideration is at para- 4 which is as follows:-
"The question, therefore, is when does the liability of the State to pay interest cease? Whether the owner of the land is entitled to appropriate from the amount deposited towards costs and then towards interest and then principal amount and again interest on total amount?"
In that context, the Apex Court held that the claimants are entitled to interest from the date of possession.
16. In Siddappa's case the point for consideration was payment of additional compensation. It is held that if possession of the land is taken prior to the publication of Section 4(1) notification, owner is entitled to additional compensation only from the date of Section 4(1) notification and not from the date of taking over possession. It is further held that the starting point for the purpose of calculating the amount to be awarded under Section 23(1)(a) at the rate of 12% p.a. on the market value is the date of publication of Section 4(1) notification and the preliminary point for that purpose is either the date of award or the date of taking possession whichever is earlier.
17. In HAL's case a Division Bench of this Court has taken a view that interest under Section 34 has to be awarded from the date of taking possession in consideration of deprivation of right to possession. Similar view has been taken by a learned Single Judge of this Court in Sangappa Kallappa's case (1997 (2) KLJ 371) and in Virupaxigouda Linganagouda Patil's case (1997 (2) KLJ 453), Even in the case Sachhidananda Kakodkar's case, Bombay High Court placing reliance on the Division Bench decision of our High Court in HAL's case held that interest is payable from the date of taking possession of the land and not from the date of issuance of Section 4(1) notification.
18. Learned Counsel for the claimant's placing reliance on D.V. Lakshmana Rao's (2001 (4) KLJ 185) case submits that in the light of the conflicting judgments of the Supreme Court, the decisions in Prem Nath Kapur case and Siddappa's case, have to be followed since the said decisions are rendered by a Larger Bench of the Hon'ble Supreme Court. It is true that whenever there are conflicting judgments, the later will prevail over the earlier. In Lakshmana Rao's case, this Court has held that if there are two conflicting judgments of the Supreme Court with equal number of Judges, the later will prevail over the earlier but where the earlier judgment is of a larger bench and the later judgment is of a smaller bench, then the decision of the larger bench will be binding. In this case, such a situation does not arise for consideration. In Budh Singh case, the point for consideration was when possession is taken prior to the date of 4(1) notification, whether interest is payable from the date of taking possession. The Hon'ble Supreme Court has also held that issuance of notification under Section 4(1) in appropriate gazette would give legitimacy to the State to take possession and any possession taken otherwise would not be considered to be a possession taken under the Act. The Division Bench of this Court in Veerabhadraiah's case has also taken a similar view. The decisions of the Apex Court in Prem Nath Kapur's, case and Siddapa's case are not applicable to the facts of this case. In the light of the decision of the Supreme Court in Budh Singh's case which is directly on the point followed by the recent decision of the Division Bench in Veerabhadraiah's case, I am of the view that the claimants are entitled to interest only from the date of issuance of 4(1) notification. I answer the point accordingly.
19. In the light of the above discussion, the appeals and cross-objections are disposed of in the following terms:
i) The market value of the land is determined at Rs.70,000/- per acre.
ii) The claimants are entitled to interest from the date of Preliminary Notification along with all other statutory benefits and also interest on solatium.
iii) The claimants are entitled to proportionate costs.