1972 (1) TMI 104 - SC - Indian Laws

Summary

Issues Involved:
1. Determination of the market value of the property as on the date of Section 4 notification.
2. Appropriateness of the compensation awarded for severance.
3. Justification for the addition of potential value to the market value.
4. Validity of the 15% solatium under Section 23(2) of the Land Acquisition Act.
5. Interest on the enhanced compensation.

Detailed Analysis:

1. Determination of the Market Value of the Property:
The primary issue was the determination of the market value of the property as on the date of the Section 4 notification. The High Court adopted the price in the sale deed Ex-C-1 executed by the Ranchi Club Ltd., in favor of the President of India, as the basis for determining the market value. The objections against this method were rejected, and the High Court adopted twice the price charged for the land in Ex-C-1, adding Rs. 7,060 per acre as the difference between tenure rights and leasehold rights, ultimately awarding Rs. 90,000 per acre. However, the Supreme Court found that the High Court was not justified in adopting Ex-C-1 as it was farther away from the land acquired and recognized that there was no definite data for the additions made. The Supreme Court instead considered Ex-10 and Ex-11, which were in respect of lands situated in the vicinity. The annual rental value of the land acquired was not considered a proper method of computation as the rent was fixed in 1944 and did not reflect the value at the time of the Section 4 notification. The Supreme Court concluded that Rs. 1,35,000 per acre was a reasonable rate for compensation.

2. Appropriateness of the Compensation Awarded for Severance:
The Judicial Commissioner had awarded 5% compensation for severance of the land from the claimant's other portion that remained after acquisition. The High Court disallowed this compensation, reasoning that there was an entrance to the back portion of the land left with the owners and no evidence of depreciation in value. The Supreme Court disagreed, stating that when a portion of the land is left out, there is a diminution in value for which compensation must be allowed. The 5% severance compensation awarded by the Judicial Commissioner was deemed reasonable.

3. Justification for the Addition of Potential Value to the Market Value:
The High Court had added 10% on the market value of the land awarded by the Land Acquisition Court for the increase in the potentialities of the land. The Supreme Court held that the High Court was not justified in giving 10% towards potential value because this element is inherent in the fixation of the market value and could not be assessed separately.

4. Validity of the 15% Solatium under Section 23(2) of the Land Acquisition Act:
The High Court had awarded 15% solatium on the market value under Section 23(2) of the Act. This aspect was not contested, and the Supreme Court upheld the 15% solatium as per the statutory provision.

5. Interest on the Enhanced Compensation:
The High Court had decreed interest at 6% per annum on the amount of enhanced compensation from the date of taking possession. The Supreme Court upheld this interest rate and directed that the claimants be entitled to interest at 6% from the date of taking possession.

Conclusion:
The Supreme Court allowed the appeals of the claimants to the extent of the variation and dismissed those by the Government with costs. The claimants were entitled to compensation at the rate of Rs. 1,35,000 per acre for 4.65 acres, 5% severance, 15% solatium on the market value, and interest at 6% from the date of taking possession. The claimants were also entitled to proportionate costs on the difference between the amounts decreed and those now awarded.