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SUPREME COURT OF INDIA
D/-22- 9-1953
BHAGWATI, IMAM, S.K. DAS AND GOVINDA MENON, JJ.
Uttar Pradesh Government, Appellant
Versus
H.S. Gupta, Respondent.
H.S. Gupta, Appellant
Versus
Uttar Pradesh Government, Respondent.
25th September 1956
Civil Appeals Nos. 186 and 187 of 1955.
Civil Appeal No. 186 of 1955.
Civil Appeal No. 187 of 1955.
(From: first Civil Appeal No. 64 of 1948, D/-22- 9-1953- Allahabad (Lucknow- Bench)).
Advocates appeared
Mr. S. P. Sinha, Senior Advocate, (Mr. C. P. Lal, Advocate, with him) for Appellant (in C. A. No. 186 of 55) and for Respondent (in C. A. No. 187 of 55).
Mr., S.K. Dar, Senior Advocate. (Mr. Jagdish Chandra, Advocate, with him) for Respondent (in C.A. No. 186 of 55) and for Appellant (in C.A. No. 187 of 55).
An Estate situated outside the municipal area of Lucknow was acquired.
The Land Acquisition Officer made an award by which he held that the claim. ant was entitled to get compensation in the sum of Rs 2,88,000/- along with 15 per cent for compulsory acquisition under section 23 (2) of the Land Acquisition Act, as well as damages to the extent of Rs. 350/. per mensem resulting from the diminution of profits from 17.6.1947, i.e. the date of publication of declaration under section 6, till the date of taking over possession of the property, viz. 6th September, 1947. On a reference under Section 18 of the Act the District Judge assessed the market value of the property at Rs. 5,28,413/-. The claimant was held entitled to 15 per cent solatium on account of compulsory nature of acquisition. A sum of Rs. 983/- was also awarded under clause (6) of section 23 of the Act. The claimant was also allowed interest at 6 percent per annum on Rs. 2,76,583/being the excess amount allowed by the District Judge from the 6th September, 1947 to the date of the payment of the excess in Court. Against the decree and judgment of the District Judge, the Government of Uttar Pradesh filed an appeal in the High Court of Judicature. The High Court reduced the compensation allowed by the District Judge. Both Uttar Pradesh Government and the owner of the Estate which was acquired appealed to the Supreme Court.
The gravemen of the complaint in the appeal by the Government of Uttar Pradesh was: The basis adopted by the High Court in fixing 0-14-0 per square foot as compensation is unjustified because the High Court has erred in rejecting the principle of belting. In fixing the value of the land, the High Court has failed to take into consideration the fact that the land falls outside the municipal area and does not enjoy the amenities of water supply, electricity, conservancy and transport which are enjoyed by lands within the municipal area.
It was found that the claimant himself examined as P.W. admitted in cross-examination that “small plots are sold at higher rate than bigger plots and the price paid for bigger plots cannot be compared with the price paid for smaller plots and if the entire Dilkusha Estate is sold, it would fetch one or two annas per square foot less than if it were sold in plots." The learned Judges of the High Court based their decision on this statement by the claimant for reducing the value of the plot to 0-14-0 per square foot.
Held: (1) The High Court had given valid and weighty reasons for adopting the principle that the valuation should be on plot-wise rate though there were certain advantages in computing the value at the block rate where vast area of land was acquired. In the circumstances of the case, the proper .mode of valuation should be on plot-wise basis.
(2) The construction put upon a stray statement like the one in -question should not have weighed with the Judges in reducing the price per square foot. There was no justification on facts of the case for any reduction in the value per square foot. The conditions which appertained to the estate resembled to a considerable extent, those obtained with regard to the scheme of acquisition of another estate in close proximity and it would not be inappropriate to base a conclusion on a comparison of the factual details of that scheme. Having rightly agreed with the District Judge that Rs. 1-2•0 per square foot should be taken as the average rate for valuing the land if the criterion to be adopted was plot wise there was no justification in the Judges of the High Court falling back upon the method of block wise sale, especially when it was clear from the evidence that there was no doubt whatever that there were willing, if not anxious, purchasers for all the plots. The application of the principle that if the land had to be sold in one block consisting of a large area, the rate per square foot likely to he fetched would be smaller than if an equal extent of land was parcelled out into smaller bits and sold to different purchasers, could not reasonably be applied to the circumstances in the present case. The High Court should have concentrated its attention on the price fetched for smaller extent of land similarly situated with the same kind of advantages and drawbacks and then applied that test to the facts in the present case. Viewed in that light, it would be proper to consider the scheme of the other estate as the nearest approach. Land Acquisition Act (1894), S. 34-Interest
On the 8th July, 1948, the Land Acquisition Officer wrote to the District Judge stating that since the question of filing an appeal against the order of the District Judge was under consideration, the additional compensation should not be paid to the claimant till the matter was settled and, therefore, though the amount was in deposit and could have been withdrawn by the claimant on that date, he was not paid the money. Afterwards while the appeal was pending before the High Court, an application was made on the 18th August, 1948, under O. 41, R.5, Civil Procedure Code, for the stay of the delivery of the amount to the claimant and on the 28th August 1948, au ad interim stay order was made by that Court. On the 4th April 1949, the High Court passed the final order that the application could not be granted unless the U.P. Government agreed to pay the claimant interest at the rate of 4 per cent per annum up to the date of payment; on this the Government Advocate undertook to obtain instructions and inform the court within a week what attitude the Government took. On the 12th May 1949, the application for stay was dismissed as not pressed. The result of these proceedings amounted to the deprivation to the claimant of the additional sum awarded to him by the District Judge. This amount was subsequently restored by the Supreme Court.
Held: In these circumstances the claimant was entitled to interest on additional amount awarded to him at the rate of 6 per cent as provided by the Land Acquisition Act from the 8th July 1948 till the 12th May 1949.
Judgement
GOVINDA MENON, J. - These two appeals arises out of the acquisition of "Dilkusha" Estate, situated outside the city of Lucknow. The State of Uttar Pradesh is the Appellant in Appeal No. 186 of 1955, whereas the claimant H.S. Gupta is the appellant in appeal No. 187 of 1955.
2. On the 3rd September 1947, the Land Acquisition Officer, Lucknow, made an award by which he held that the claimant was entitled to get compensation in the sum of Rs. 2,88,000 along with 15 per cent, for compulsory acquisition under S. 3(2) of the Land Acquisition Act, as well as damages to the extent of Rs.350 per mensem resulting from the diminution of profits from 17-6-1947, i.e., the date of publication of declaration, under S.6, till the date of taking over possession of the property, viz. 6th September 1947. Not being satisfied with the award, at the instance of the claimant a reference was made to the District Judge of Lucknow under S.18 of the Land Acquisition Act and the learned District Judge, after an exhaustive consideration of the various points arising, came to the conclusion that as the net saleable area came to 4,09,952 square foot. Valuing the same at Rs. 1-2-0- per square foot, the compensation due to the claimant on that footing would be Rs 4,61,196. The bungalow on the site, as well as other structures were separately valued with the result that the total market-value of the property came to Rs.5,28,413. The claimant was held entitled to 15 percent. seltium in account of compulsory nature of acquisition and together with that the compensation under cl.(1) of S.23 of the Land Acquisition Act came to Rs.6,07.675. A sum of Rs.983 was also awarded under cl.(6)of S.23. The claimant was also allowed interest at 6 percent per annum of Rs. 2,76,583 being the excess amount allowed by the District Judge from the 6th September 1917 to the date of payment of the excess in Court. Against the decree and judgement of the District Judge of Lucknow, the Government of Uttar Pradesh filed an appeal in the High Court of Judicature, at Allahabad, Lucknow Branch, Lucknow, and the learned Judges (Agarwala and Hari Shankar JJ.) by their judgement dated the 22nd September 1953, reduced the compensation allowed by the District Judge. The present appeals are the outcome of the decision of the Allahabad High Court.
3. It is convenient to deal with the points arising in both the appeals together.
4. The gravamen of the complaint in the appeal by the Government of Uttar Pradesh is that the basis adopted by the High Court in fixing 0- 14-0 per square foot as compensation in unjustified because the High Court has erred in rejecting the principal of belting. It is also argued that in fixing the value of the land, the High Court has failed to take into consideration the fact that the land falls outside the Municipal area and does not enjoy the amenities of water supply, electricity, conservancy and transport which are enjoyed by the lands within the municipal area. It is further argued that the claimant had purchased the property as late as September, 1941, for a sum of Rs. 72,000 and, therefore, hardly five years had elapsed since that date before the notification under S. 6 of the Land Acquisition Act was made.
5. Apart from stating that the decision of the High Court is incorrect, there is nothing positive in the grounds of appeal by the U.P. Government to indicate the amount which the claimant is entitled to or the basis on which the valuation ought to have proceeded. Before us Mr. S.P. Sinha contended that the High Court should have set aside the decision of the District Judge and resorted the award of the Land Acquisition Officer. The claimant in his appeal memorandum disputed the principal adopted by the High Court in the valuation and asserted that the High Court should have held that the market value of the land should be not less than Rs.2 per square foot. Minor contentions were also raised with regard to not allowing sum of Rs. 6,179 as compensation
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