1998 Supreme(Pat) 227

PATNA HIGH COURT
M.Y.Eqbal, J.
Union Of India
Versus
Kashinath Mahto
Appeal from Original Order No. 135 of 1996 ;
Decided On : MARCH 17, 1998

The Tribunal erred in awarding additional compensation @ 12% on the market value of the acquired land from the date of notification by applying the provisions of the Land Acquisition Act, 1894, as the payment of such additional compensation is neither provided under the Act nor ever offered by the appellant or calculated by the competent authority.

Headnote:

COAL BEARING AREAS (ACQUISITION AND DEVELOPMENT) ACT, 1957 - COMPENSATION - ADDITIONAL COMPENSATION AND INTEREST - VALIDITY - LAND ACQUISITION ACT, 1894 - APPLICABILITY - MARKET VALUE OF LAND - DETERMINATION - FACTORS TO BE CONSIDERED.

Fact of the Case:

The Central Government acquired land under the Coal Bearing Areas (Acquisition and Development) Act, 1957 (the Act). The Tribunal enhanced the compensation payable to the claimants-respondents for the acquired land. The appellant, the Central Government, challenged the Tribunal's award.

Finding of the Court:

1. The Tribunal erred in awarding additional compensation @ 12% on the market value of the acquired land from the date of notification by applying the provisions of the Land Acquisition Act, 1894, as the payment of such additional compensation is neither provided under the Act nor ever offered by the appellant or calculated by the competent authority. 2. The Tribunal correctly held that the rate fixed by the competent authority on the basis of a letter from the Commissioner, South Chotanagpur Division, Ranchi, was not valid for determining compensation. 3. The Tribunal failed to consider the sale deeds (Exts. E and E/1) of the year 1984, which showed that the market rate of land in the same village was Rs. 40,000.00 per acre in 1984. 4. The Tribunal erred in determining the valuation of the acquired land at a flat rate of Rs. 90,000.00 per acre without deducting a reasonable amount for developmental expenses.

Issues: 1. Whether the Tribunal erred in awarding additional compensation @ 12% on the market value of the acquired land from the date of notification by applying the provisions of the Land Acquisition Act, 1894? 2. Whether the Tribunal erred in holding that the rate fixed by the competent authority on the basis of a letter from the Commissioner, South Chotanagpur Division, Ranchi, was not valid for determining compensation? 3. Whether the Tribunal erred in failing to consider the sale deeds (Exts. E and E/1) of the year 1984, which showed that the market rate of land in the same village was Rs. 40,000.00 per acre in 1984? 4. Whether the Tribunal erred in determining the valuation of the acquired land at a flat rate of Rs. 90,000.00 per acre without deducting a reasonable amount for developmental expenses?

Ratio Decidendi: 1. The Act does not provide for payment of additional compensation and interest on the amount of compensation. The Tribunal erred in awarding additional compensation @ 12% on the market value of the acquired land from the date of notification by applying the provisions of the Land Acquisition Act, 1894, as the payment of such additional compensation is neither provided under the Act nor ever offered by the appellant or calculated by the competent authority. 2. The different authority has no role to fix the valuation. The Tribunal correctly held that the rate fixed by the competent authority on the basis of a letter from the Commissioner, South Chotanagpur Division, Ranchi, was not valid for determining compensation. 3. The market value of the lands means what the willing purchaser would pay to a willing seller for the property having regard to the advantage available to the land and the development activities which may be going on in the vicinity and potentiality of the land and such consideration must be confined to the date of notification. The Tribunal erred in failing to consider the sale deeds (Exts. E and E/1) of the year 1984, which showed that the market rate of land in the same village was Rs. 40,000.00 per acre in 1984. 4. The Tribunal erred in determining the valuation of the acquired land at a flat rate of Rs. 90,000.00 per acre without deducting a reasonable amount for developmental expenses.

Final Decision: The appeals were allowed in part. The Tribunal's award was modified to reduce the compensation payable to the claimants-respondents from Rs. 72,000.00 to Rs. 54,000.00 per acre, subject to deduction of 40% on account of developmental expenses. The claimants-respondents were also entitled to additional compensation of 30% on the valuation of the land and interest @ 9% per annum for the first year and 15% per annum for the subsequent years till the payment.