2005 (4) TMI 650 - SC - Indian Laws

Summary

Issues Involved:
1. Determination of Market Value of Acquired Lands
2. Deduction for Development Charges
3. Entitlement to Interest on Solatium

Detailed Analysis:

1. Determination of Market Value of Acquired Lands:
The Government of Gujarat issued a notification for the acquisition of lands in Santrampur town due to submergence from Kadana Dam. The Land Acquisition Officer initially offered compensation ranging from Rs. 35/- to Rs. 60/- per square meter. The claimants sought higher compensation, which led to a series of appeals and references. The Reference Court initially determined the market value at Rs. 225/- per square meter, but upon remand, it was adjusted to Rs. 200/- per square meter based on a deed of sale dated 15th December 1978 (Ex. 145). The High Court later adjusted the compensation to Rs. 180/- per square meter for large areas and Rs. 200/- per square meter for smaller areas.

2. Deduction for Development Charges:
The Reference Court and the High Court both recognized the need to deduct development charges from the market value. The Reference Court deducted 33% for development charges, while the High Court made deductions of 33% for large areas and 25% for smaller areas. The Supreme Court noted that while determining compensation, factors such as the need for roads, electricity, and drainage must be considered, leading to deductions ranging from 20% to 50%. The Court highlighted that the area under acquisition was not fully developed and had limited facilities, thus justifying the deductions.

3. Entitlement to Interest on Solatium:
The High Court initially denied interest on solatium based on the decision in Prem Nath Kapur v. National Fertilizers Corporation of India Limited. However, the Supreme Court overruled this decision, citing the Constitution Bench judgment in Sunder v. Union of India, which affirmed that claimants are entitled to interest on solatium. The Court emphasized that the legislative intent was to ensure that the aggregate compensation amount, including solatium, reaches the claimant without undue delay, and any delay should attract interest.

Conclusion:
The Supreme Court concluded that the compensation should be determined at Rs. 160/- per square meter for large plots and Rs. 175/- per square meter for small plots. Additionally, the claimants were entitled to interest on solatium, aligning with the judgment in Sunder v. Union of India. The appeals were disposed of with these directions, and no costs were awarded.