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IN THE HIGH COURT OF ALLAHABAD
K. C. AGRAWAL, G. B. SINGH
NAGAR MAHAPALIKA, AGRA - Appellant
Versus
LAJPAT RAI KAPOOR - Respondents
FIRST APPEAL 228 Of 1974
Decided On : 03/15/1985
LAND ACQUISITION - COMPENSATION - LOSS OF EARNINGS - CLAIMANT ENTITLED TO COMPENSATION FOR LOSS OF EARNINGS DUE TO ACQUISITION OF LAND USED FOR COLD STORAGE - TRIBUNAL ERRED IN MULTIPLYING ANNUAL PROFIT BY 21 INSTEAD OF 20 FOR CAPITALIZED VALUE - SOLATIUM NOT PAYABLE AS CLAIM WAS MADE UNDER CLAUSE (FOURTHLY) OF SECTION 23(1) OF THE LAND ACQUISITION ACT - INTEREST @ 6% PER ANNUM AWARDED.
Fact of the Case:
The claimant, Lajpat Rai Kapoor, owned a cold storage and ice factory on a long-term lease. The Nagar Mahapalika, Agra, acquired 637 square yards of land adjacent to the cold storage for a town improvement scheme. The claimant claimed compensation for loss of earnings due to the acquisition, alleging that the capacity of the cold storage had been reduced by half.
Finding of the Court:
The Tribunal held that the claimant was entitled to compensation for loss of earnings, but erred in multiplying the annual profit by 21 instead of 20 for capitalized value. The Tribunal also erred in applying sub-section (2) of Section 23 of the Land Acquisition Act, which provides for solatium, as it is only applicable to cases covered by clause (fourthly) (first?) of sub-section (1) of Section 23. The claimant was not entitled to solatium as his claim was made under clause (fourthly).
Issues: 1. Whether the claimant was entitled to compensation for loss of earnings due to the acquisition of land used for cold storage. 2. Whether the Tribunal erred in multiplying the annual profit by 21 instead of 20 for capitalized value. 3. Whether the claimant was entitled to solatium under sub-section (2) of Section 23 of the Land Acquisition Act.
Ratio Decidendi: 1. The claimant was entitled to compensation for loss of earnings as the acquisition of land injuriously affected his business of cold storage, causing a reduction in its capacity. 2. The Tribunal erred in multiplying the annual profit by 21 instead of 20 for capitalized value as the multiple to be applied for finding out the capitalized value should have been 20. 3. The claimant was not entitled to solatium under sub-section (2) of Section 23 of the Land Acquisition Act as it is only applicable to cases covered by clause (fourthly) (first?) of sub-section (1) of Section 23, and the claimant's claim was made under clause (fourthly).
Final Decision: The judgment of the Tribunal was modified to the extent that the amount of compensation awarded to the claimant was determined at Rs. 75,000/- minus the amount already received by him under the award given by the Land Acquisition Officer. The claimant was not entitled to solatium, but was entitled to interest @ 6% per annum on the amount awarded. The parties were directed to bear their own costs.
( 1 ) THESE two appeals have been preferred against the judgment of the Presiding Officer, Nagar Mahapalika Tribunal, Agra, delivered in Land Acquisition Case No. 98 of 1961. First Appeal No. 228 of 1974 has been filed by the Nagar Mahapalika, Agra, whereas the connected First Appeal No. 391 of 1974 is that of Lajpat Rai Kapoor (hereinafter referred to as the claimant ).
( 2 ) THE brief facts are these. A notification under S. 36 of the Town Improvement Act III of 1919 was published in the U. P. Gazette on 27-6-1953. This publication of the notification is equivalent to sub-sec. (1) of S. 4 of the Land Acquisition Act. This was followed by another notification dt. 13-8-1955 under S. 42 (1) of U. P. Town Improvement Act. This notification is equivalent to S. 6 of the Land Acquisition Act. The State Government sanctioned the acquisition as required by U. P. Town Improvement Act and the Scheme.
( 3 ) UPON the proceedings up to the stage of S. 42 (1) being over, notices under S. 9 of the Land Acquisition Act were issued by the Special Land Acquisition Officer. In pursuance, a large nuumber of claims were preferred. One of them was by the claimant, who was the owner of M/s. Gulab Ice and Cold Storage. Upon the notifications referred to above, 637 square yards of land of the aforesaid claimant was notified for acquisition. His plots were 44, 45 and 48 of Chak 1, Sawad Sahar in district Agra. These plots were obtained by the claimant on a long term lease taken by him for the purpose of constructing cold storage and ice factory. He actually constructed a factory known as Gulab Ice and Cold Storage before acquisition. Adjacent to the cold storage, the claimant had 1350 square yards of land. Out of this 1350 square yards, 637 square yards of land had been acquired. The claimant alleged that the entire land, measuring 1350 square yards, was being used by him for the purposes of his cold storage, which had the capacity of 5000 Maunds of potatoes. As a result of acquisition of 637 square yards, the claimant suffered great loss. Processing of potatoes and other necessary ancillary steps before and after storing the same in the cold storage were greatly affected. The claimant alleged that as a result of acquisition of 637 square yards of land, the capacity of storing potatoes in the cold storage had been reduced to 50 per cent. The claimant alleged in the claim filed in response to the notice under S. 9 of the Land Acquisition Act that his loss could be estimated at Rs. 2,60,000/- being the capitalised value of the loss of Rs. 13,000/-annually on account of the reduced capacity of the cold storage. He further claimed 15% statutory compensation under S. 23 (2) of the Land Acquisition Act.
( 4 ) BEFORE the Special Land Acquisition Officer, an objection was filed on behalf of the Nagar Mahapalika claiming that the compensation on account of loss alleged to have been suffered by the claimant was much too excessive, and further that the claimant was not entitled to 15% solatium or statutory compensation inasmuch as to the claim sub-sec. (2) of S. 23 did not apply. The claimant produced himself, S. N. Bhargava, agricultural expert, and Gulab Singh. He also filed some documentary evidence.
( 5 ) AFTER considering the evidence, the Land Acquisition Officer held that the claimant had since not filed any evidence of income which he was making before acquisition and any proof of loss suffered by him on account of acquisition of 637 square yards of land, the compensation claimed by the claimant could not be given to him. The view of the Land Acquisition Officer was that in the absence of evidence, the income from the cold storage could be fixed at Rs. 2500/- per annum. After multiplying Rs. 2500/- by 21 years, which was the remaining period for which the claimant could enjoy the lease of the land, the Land Acquisition Officer found that the total compensation to which the claimant could be held entitled to was Rs. 26,250/ -. This was w
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