2014 Supreme(SC) 761

SUPREME COURT OF INDIA
T.S. Thakur, R. Banumathi, JJ.
MAJ. GEN. KAPIL MEHRA & ORS. – Appellants
Versus
UNION OF INDIA & ANR. – Respondents
CIVIL APPEAL NOS. 2545-2546/2012
Decided on: 17-10-2014

IMPORTANT POINT
Various components of compensation in determining compensation in land acquisition proceedings discussed threadbare.
Section 34 of the Act is mandatory whereas section 28 is discretionary.

Headnote:(a) Land Acquisition Act, 1894 – Section 23 and 28 – Compensation and interest – High Court fixing compensation – DDA filing SLP for reduction in compensation – Appellant contesting – SLP dismissed by reasoned order – Effect – Becoming final against DDA, not appellant – Appellant had no occasion to argue for further enhancement of compensation – Appellant not impeded in pursuing this appeal – Present appeal, held, maintainable. (Para 9)

       (2000) 6 SCC 359; (2011) 4 SCC 602 – Distinguished impliedly

       (b) Land Acquisition Act, 1894 – Section 23 – Market value – Determination – Comparable sale method – With reference to open market sale of comparable land in the neighbourhood, by a willing seller to a willing buyer, on or before the date of preliminary notification. (Para 11 to 14)

       (2005) 4 SCC 789; (2009) 11 SCC 164 – Relied upon

       (c) Land Acquisition Act, 1894 – Section 23 – Compensation – Averaging method – Several sales of similar lands, more or less, at the same time, having marginal variation in prices – Averaging thereof permissible – High Court committing no error. (Para 20)

       (1969) 1 MLJ SC 45; (1994) 5 SCC 734; (2010) 13 SCC 710 – Distinguished impliedly

       (d) Land Acquisition Act, 1894 – Section 23 – Compensation – Freehold vs. leasehold – Market price of freehold land is higher than leasehold land – Instantly sale deeds exmaplers pertaining to leasehold lands – 20% should be added to the arrived price. (Para 24)

       (1996) 3 SCC 594 – Distinguished

       (e) Land Acquisition Act, 1894 – Section 23 – Market price – Competitive bidding at auction sale – Prices are usually higher than normal – Such price should be reduced by 20%. (Para 28)

       (2011) 2 SCC 246; (2007) 7 SCC 609 – Relied upon

       (f) Land Acquisition Act, 1894 – Section 23 – Compensation – Deduction towards development charges – General being deduction of 1/3rd amount of compensation towards development of the land, Courts have allowed a wide range from 20% to 75% – Instantly, having regard to the extent of the land acquired and the development in and around Vasant Kunj area, 35% deduction considered appropriate. (Para 41)

       (2011) 15 SCC 297; (2012) 7 SCC 595; (1991) 4 SCC 218; (1993) 4 SCC 245; (1996) 10 SCC 631; (2009) 4 SCC 395; (2010)12 SCC 707; (2013) 5 SCC 527; (2014) 2 SCC 165; (2011) 15 SCC 297; AIR 2007 SC 740; AIR 2009 SC 1506; (2009) 15 SCC 769; (1996) 9 SCC 640; (2008) 15 SCC 201; (2012) 1 SCC 390 – Relied upon

       (g) Land Acquisition Act, 1894 – Section 28 and 34 – Interest on compensation – As per section 34 interest is payable at the rate of 9% from the date of taking possession until the amount is paid or deposited – In case of delay, section 34 limiting 9% only for one year from taking possession and enhancing the rate to 15% thereafter – In case of enhancement of compensation, Section 28 permitting courts to allow interest on enhanced amount also – Section 34 is mandatory whereas section 28 is discretionary – High Court awarding interest accordingly – No infirmity. (Para 43 to 46 and 49)

       (2009) 8 SCC 412; (2006) 8 SCC 457 – Relied upon

       (h) Interpretation of statue – Land Acquisition Act, 1894, sections 28 and 34 – Use of the word ‘shall’ makes Section 34 mandatory – On the other hand, use of word ‘may’ makes provisions of section 28 discretionary. (Para 45)

       (i) Land Acquisition Act, 1894 – Section 27 r/w section 35, Code of Civil Procedure, 1908 – When a litigant succeeds in part and fails in part, he should receive proportionate costs – Instantly, High Court awarding proportionate cost – No infirmity. (Para 55)

       Facts of the case:

       On 19.2.1997, a fresh notification was issued by the Land and Building Department, Govt. of NCT of Delhi under Sections 4 and 17 of the Land Acquisition Act, 1894 proposing to acquire the land of the appellants measuring 12 Bigha (12096 sq. yards) for development of Vasant Kunj under the planned development scheme of Delhi. Land Acquisition Collector assessed the market value of the land @ Rs.2,05,642.07 paise per bigha (Rs.205/-per sq.yard), adding additional interest @ 12% per annum on the market value of land and the solatium @ 30% on the market value of land and the compensation was fixed @ Rs.37,21,180.05 paise per bigha.

       Aggrieved by the award, the appellants filed Reference Petition under Section 18 of the Act before the Additional District Judge, Delhi. In the reference court, the appellants produced four documents -perpetual lease deeds of residential plots in Vasant Kunj, executed between September 1995 to December 1996 at the rates ranging from Rs.28,719/-to Rs.47,542/-per sq. yard. The reference court held that the lease deeds of auction of a developed plot by a public authority are not a proper guide for determining the fair market value of the acquired lands and reference court discarded the exemplars- lease deeds and rejected the claim of the appellants for enhancement of compensation.

       Aggrieved by the decision of the reference court, appellants filed Land Acquisition Appeal before High Court. The High Court had taken average of the exemplars- and deducted 40% from the average price towards smallness of the area and further deducted one third towards development of land and fixed the market value of the land at Rs.14,974/-per sq. yard. High Court held that the appellants shall be entitled to 30% solatium on the above market value of the land under Section 23(2) of the Act and 12% of the additional amount under Section 23(1-A) of the Act. The High Court further ordered that in terms of Section 28 of the Act on the enhanced market value, the appellants shall be paid interest @ 9% per annum from 19.2.1997 i.e. date of notification under Section 4 of the Act till 18.2.1998 and thereafter @ 15% per annum till the date of deposit of compensation. It was also held that interest shall also be paid on solatium and additional amount. The appellants filed application C.M. No.735/2011 in L.A. Appeal No.149/2007 before the High Court under Sections 152 and 153 read with Section 151 C.P.C. to award Rs.48 lakhs which was paid as court fees and also prayed for award of interest under Section 34 for the enhanced compensation. The application was allowed in part by order dated 13.10.2011, granting proportionate costs to the appellants over and above Rs.20,000/-as awarded in High Court’s judgment dated 24.12.2010.

       Finding of the Court:

       No interference is warranted.

       Result: Appeals dismissed.