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SUPREME COURT OF INDIA
R.V. RAVEENDRAN, A.K. PATNIK, JJ.
Revenue Divisional Officer, Kurnool – Petitioner
Versus
M. Ramakrishna Reddy (D) by LRs. – Respondent
Civil Appeal No. 10362 of 2010
Decided On : 08-12-2010
Land Acquisition Act, 1894 - Section 4 – Claim of compensation – Acquisition of Land - Acquitted - Appeal by appellant challenging quantum as being excessive was dismissed by High Court impugned judgment is challenge in this appeal by special leave - Only question that therefore arises for consideration is whether compensation determined at for acres and cents of land is excessive – Held, In case where landowner is dispossessed prior to issuance of preliminary notification Section Act Government merely takes possession of land but title thereof continues to vest with landowner - It is fully open for landowner to recover possession of his land by taking appropriate legal proceedings - He is therefore only entitled to get rent or damages for use and occupation for period Government retains possession of property - Where possession is taken prior to issuance of preliminary notification in our opinion it will be just and equitable that Collector may also determine rent or damages for use property to which landowner is entitled while determining compensation amount payable to landowner for acquisition of the property - Provisions of Section support to such course of action - For delayed payment of such amount appropriate interest at prevailing bank rate may be awarded - Above position is reiterated in Karaganda supra - It is clear that even if land owner may not be entitled to interest from date of possession but only from date of preliminary notification he will be entitled to compensation for wrongful use and occupation from date of actual dispossession till date of notification Section Act - In this case there is already clear finding that loss of income per year acquired lands - Therefore instead of relegating parties for further enquiry in regard to damages for wrongful use and occupation from date of dispossession to date of preliminary notification court proceed to determine same at annum for period from which is rounded to five years with interest at per annum from date of payment – Appeal allowed
ORDER :
1. Leave granted. Heard.
2. Respondents were the owners of a sweet lime orchard measuring 4 acres 38 cents situated in Survey No. 395/3A and 395/4A in Singanapalle village, Owk Mandal, Kurnool District in Andhra Pradesh. The said lands, alongwith surrounding lands (in all 58 acres 30 cents) were acquired for construction of a percolation tank. Possession was taken on 8.6.1988. However, the preliminary notification under Section 4(1) of the Land Acquisition Act, 1894 (‘Act’ for short) was issued only on 27.8.1993. The Land Acquisition Officer, by award dated 30.6.1994, offered compensation at the rate of 2 Rs. 16,000/- per acre. The reference Court determined the market value of the entire extent of 4 acres 38 guntas as Rs. 12,28,500/- by capitalisation of yield method. It awarded the said sum as compensation with additional market value at 12% per annum on such market value from the date of notification under Section 4(1) of the Act till date of award or possession whichever was earlier, 30% solatium on the market value and interest at 9% per annum from date of possession for a period of one year and thereafter at 15% per annum till date of payment on the aggregate of compensation, additional market value and solatium.
3. The appeal by the appellant, challenging the quantum, as being excessive, was dismissed by the High Court by the impugned judgment dated 19.3.2009. The said judgment is under challenge in this appeal by special leave. The only question that, therefore, arises for consideration is whether the compensation determined at Rs. 12,28,500/- for 4 acres and 38 cents of land is excessive.
4. In the year 1987, the claimants had filed a writ petition for stopping construction of a percolation tank, alleging that there were 350 sweet lime trees in their land and that the construction of the percolation tank would destroy their sweet lime 3 garden. The Land Acquisition Officer submitted a report dated 1.2.1991 to the Collector confirming the existence of 350 sweet lime trees in the claimants land on 8.6.1988 when possession was taken and the destruction of all those trees due to stagnation of water on construction of the percolation tank. They filed a subsequent writ petition (WP No. 8665/1992) seeking a direction for payment of compensation for the land and 350 sweet lime trees, as they were dispossessed, without there being any acquisition. The High Court of Andhra Pradesh directed the State Government to pay compensation at the earliest in respect of the land and 350 sweet lime trees. It is thereafter that the acquisition proceedings were initiated, by issuing a notification dated 27.8.1993 under Section 4(1) of the Act. The Land Acquisition Officer, while making the award, did not value the land as a sweet lime orchard. He ignored the sweet lime trees in the land and valued it as bare land at Rs. 16,000/- per acre (Rs. 70,080/- for the entire land). The Reference Court, after referring to the factual background and the evidence, adopted the yield capitalisation method, to arrive at the compensation. It held that the net annual income realised by the respondents was Rs. 270/- per sweet lime tree per annum or in all Rs. 94,500/- from the entire orchard with 350 trees. It adopted the multiplier of 13 and arrived at the compensation for the acquired land 4 with the sweet lime trees as 94500 x 13 = Rs. 12,28,500/- (that is Rs. 280,479/45 per acre).
5. In this appeal, the State is aggrieved by the multiplier of 13 adopted by the Reference Court. It is pointed out that though the High Court had found the multiplier of 13 to be on the higher side, it failed to interfere with the judgment of the Reference Court. Mr. I. Venkatanarayana, learned senior counsel for the appellant submitted that the appropriate multiplier should be 8, but under no circumstances it should be more than 10. On the other hand, Mr. R. Venkataramani, learned senior counsel appearing for the respondent relied upon the decision of this Court in Union of
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