Land Acquisition Act, 1894: ss. 4, 11, 17 – Compensation – Grant of – Large piece of land allotted to DLF, including the scheduled piece of land of the appellant for which, the decree of permanent injunction was in operation – Scheduled piece of land subsequently acquired – High Court determined compensation at the rate of Rs. 1,10,000/- per square meter as per circle rate and also ordered deduction of development charges to the extent of 50% – On appeal, held: Determination of the compensation has to be made by taking into consideration the circle rate which was determined as per the market value – High Court rightly determined compensation at the rate of Rs. 1,10,000/- per square meter as per circle rate – As regards deduction of development charges to the extent of 50% made by High Court, the High Court did not take into consideration all the factors encircling the issue and routinely proceeded with the maximum deduction of 50% development charge – Scheduled piece of land is a costly land, being situated at the centre of development of authority, has commercial use, and even a mall has been constructed on it – Without acquisition, the piece of land belonging to appellant was transferred to DLF and the acquisition was made subsequently – Possession of scheduled piece of land, though taken long back in year 2004-2005, but till date, the appellant has not been paid the compensation and is litigating before courts even up to subsequent rounds – In view thereof, deduction of development charges to the extent of 50% by High Court cannot be sustained – Also, the civil right of appellant is violated in breach of Art. 300-A – In view thereof, respondents directed to compute the amount of compensation by taking the circle rate of Sector -18, i.e., Rs. 1,10,000/-per square meter – Judgment of the High Court directing 50% deduction towards development charge set aside, however, the amount of solatium of 30% is payable – Statutory interest on the amount of compensation to be payable @ 9% from the date of taking over of possession, for a period of one year, thereafter, @ 15% p.a. to be paid, and in addition thereto, 3% penal interest to be paid – Constitution of India – Art. 300A. Compensation – Determination of – Held: Compensation can be determined by taking into consideration the circle rate which has been determined as per the market value – Market value of a property is the price that a willing purchaser would pay to a willing seller for it, taking into account its current condition, all existing advantages, and potential possibilities, while excluding any benefit resulting from the implementation of the scheme for which the property is compulsorily acquired – Thus, the market value is to be determined in the light of price paid by the purchaser of similar land in the neighbourhood of the land in question and in cases, where no records for such transaction/purchase is available, the minimum statutory value in accordance with Stamp Act must be taken as market value for circle rate – In no event, the compensation can be paid at a rate lesser than that of market value as determined for the purpose of payment of stamp duty under Stamp Act. Compensation – Determination of – Deduction of development charges – Quantum of – Held: There is no straight jacket formula to arrive at the quantum of deduction of development charge – It must be assessed based on the facts of the individual case after due consideration of all the factors, the nature of land to be acquired, the extent of area to be acquired, the extent of development in the adjoining land as well as land proposed to be acquired, the commercial potentiality and so on.
Interest: Nature of – Held: Is a consideration paid either for the use of money or forbearance from demanding it after it has fallen due – Interest, whether it is statutory or otherwise, represents the profit, the creditor may have made if he had used the money or from the loss, he may have suffered because he could not use the amount.
Disposing of the appeals, the Court
HELD: 1.1 The determination of the compensation has to be made by taking into consideration the circle rate which has been determined as per the market value. The market value of a property is the price that a willing purchaser would pay to a willing seller for it, taking into account its current condition, all existing advantages, and potential possibilities when led out in the most advantageous manner, while excluding any benefit resulting from the implementation of the scheme for which the property is compulsorily acquired. Therefore, the market value is to be determined in the light of price paid by the purchaser of similar land in the neighbourhood of the land in question and in cases, where no records for such transaction/purchase is available, the minimum statutory value in accordance with Stamp Act must be taken as market value for circle rate. [Para 21][686-B-D]
Bhopendra Singh and Others v. Awas Evam Vikas
Parishad and Others 2005 (2) Uttaranchal Decision,
295 – approved.
1.2 The order passed by District Magistrate, notifying the circle rate to be Rs. 1,10,000/- per sq. mt. as applicable on commercial properties, residential properties etc., situated in Noida is on record. Further, the nature of acquired land is also not in dispute for the reason that, NOIDA while contesting the Suit filed by appellant seeking permanent injunction, itself admitted that the land has been determined for use of commercial purposes and hence, it is a valuable land. This fact is also fortified by the Revenue Inspector’s report, submitted in compliance of interim order passed by High Court in Writ Petition No. 75152 of 2005. By the said report, it is apparent that, on spot the land of Khasra No. 422 and 427 was converted into a part of Sector 18, for which demarcation is not possible because of absence of any fixed identification points for demarcation since the land is fully developed. Thus, NOIDA cannot turn around to say in this case that the land is either agricultural or at best residential. [Para 22][686-E-H]
1.3 With regard to determination of the compensation in the instant case, the judgment of Bhopendra Singh’s case, wherein the circle rate showing market value assessed by the Collector for the purpose of registration of instrument of sale was made valid. The said judgment was not interfered with by this Court thereafter. In the case of the land owner itself, the High Court by order dated 10.12.2009 passed in Writ Petition No. 75152 of 2005, directed the Special Land Acquisition Officer to determine the compensation according to the law as laid down in judgment rendered in Bhopendra Singh’s case, which is sustained by this Court. Therefore, the issue of basis of determination of compensation has been settled inter--party and also un-interfered by this Court. Now, on the said issue, relying upon the judgment of Anil Kumar Srivastava’s case cannot be interfered with in this case. In no event, the compensation can be paid at a rate lesser than that of market value as determined for the purpose of payment of stamp duty under Stamp Act. [Para 25][689-G-H; 690A-B]
1.4 The land in dispute was not only designated for commercial use, rather it was also declared to be part of industrial development plan area. After development, even a mall has been constructed on it. The High Court in the impugned order has rightly determined payment of compensation at the rate of Rs. 1,10,000/- per square meter as per circle rate. The findings of High Court for grant of compensation with rate Rs. 1,10,000/per sq. Mt is upheld. [Para 26][690-B-D]
1.5 With regard to deduction of development charges to the extent of 50% made by High Court, there is no straight jacket formula to arrive at the quantum of deduction of development charge and same must be assessed based on the facts of the individual case after due consideration of all the factors which might affect such quantum. The High Court did not take into consideration all the factors encircling the issue and routinely proceeded with the maximum deduction of 50% development charge. On perusal of the impugned judgment, it is clear that the High Court has inter-alia highlighted the glaring mischiefs played by NOIDA in the whole acquisition proceedings but at the same time, it has failed to accord a substantial reason for maximum deduction of development charges. It is not for the first time that NOIDA is in cross-roads before this Court for playing hand-inglove with large developers. [Para 27][690-D-G]
1.6 It is uncontroverted from the material available on record that, the scheduled piece of land was allotted by NOIDA to respondent no. 7 in absence of formal acquisition, whereafter, the said scheduled land was developed in the line of commercial hub and even a mall was constructed on it. Hence, the quantum of deduction of development charges should have been evaluated by High Court from the contextual perspective of all the relevant factors, which clearly has not been done in the instant case. [Para 28][690-G-H; 691-A]
1.7 The general factors that are to be taken into consideration for deciding the quantum of deduction of development charges, majorly include the nature of land to be acquired, the extent of area to be acquired, the extent of development in the adjoining land as well as land proposed to be acquired, the commercial potentiality and so on. Therefore, deduction of development charge in the instant case should have been made while considering the said factors. However, it is made clear that this observation is being made in peculiar facts of the instant case and not in general. [Para 29][693-F-G]
1.8 As per the stand taken by NOIDA, the scheduled piece of land is a costly land, being situated at the centre of development of authority and has commercial use. On spot, the demarcation was not possible because the land was fully developed. In the backdrop, without acquisition, the piece of land belonging to appellant was transferred to respondent no. 7. The acquisition was made subsequently in view of the observations made by the District Court confirming the decree of permanent injunction for the said piece of land. At the time of taking over of possession, the amount of compensation was not made and now, the appellant is running from pillar to post to receive the adequate compensation. Even after settling the dispute for payment of compensation at the circle rate of Rs. 1,10,000/- inter--party in the previous round of litigation, the NOIDA in its own volition neither determined the compensation nor paid to the appellant. The possession of scheduled piece of land, though taken long back in year 2004--2005, but till date, the appellant has not been able to reap the fruits of compensation and kept litigating before courts even up to subsequent rounds. Thus, deduction made to extent of 50% in by High Court cannot be sustained. [Para 30][694-A-D]
1.9 The compensation at the circle rate of Rs. 1,10,000/per sq. meter be payable to the appellant. On perusal, it is clear that if amount of compensation is not paid or deposited on or before taking possession of the land, interest @ 9% p.a. leviable from the time of taking of possession until it shall have been so paid or deposited. It further provides that if the amount of compensation has not been paid or deposited within one year, the interest would be payable @ 15% p.a. on expiry of the period of one year. On facts, the land was given initially in the year 2003 to respondent No.7 and the acquisition was made subsequently. The additional award was passed on 31.1.2011 after a delay of five years from the date of taking over of possession. The amount was deposited in the year 2017 by a delay of approximately 14 years. In the peculiar facts of this case, the civil right of appellant is violated in breach of Article 300-A of the Constitution of India. Such action of the NOIDA clearly amounts to constitutional tort. [Para 31][694-D-H; 695-A-C]
1.10 In addition to the statutorily paid interest, the additional amount of penal interest must be paid in place of shifting the date for determination of the amount of compensation or to determine the compensation as per 2013 Act. The nature of interest is essentially a consideration paid either for the use of money or forbearance from demanding it after it has fallen due. Interest, whether it is statutory or otherwise, represents the profit, the creditor may have made if he had used the money or from the loss, he may have suffered because he could not use the amount. Therefore, the amount of compensation be payable along with statutory interest, as directed by the High Court and 3% penal interest, in the peculiar facts and circumstances of the case. [Para 32][696-C-F]
1.11 The respondents are directed to compute the amount of compensation by taking the circle rate of Sector -18, i.e., Rs. 1,10,000/- per square meter; that the judgment of the High Court directing 50% deduction towards development charge is set aside; that the respondents are directed not to make any deduction towards the development charge while computing/calculating the amount of compensation as per circle rate; that as directed by the High Court, the amount of solatium of 30% in terms of Section 23(2) of 1894 Act is also payable; that the statutory interest on the amount of compensation to be payable @ 9% from the date of taking over of possession, i.e., February, 2005 for a period of one year, thereafter, @ 15% p.a. be paid as per the proviso of Section 34 of the Land Acquisition Act, 1894; and that in addition to the said statutory interest, 3% penal interest is further directed to be paid in the peculiar facts of this case. [Para 33][696-G-H; 697-A-C]
Indore Development Authority v. Manohar Lal & Ors. (2020) 8 SCC 129 : [2020] 3 SCR 1; Anil Kumar
Srivastava v. State of U.P. (2004) 8 SCC 671 : [2004] 3 Suppl. SCR 675; R. Unnikrishnan and Another v. V. K. Mahanudevan and Others (2014) 4 SCC 434 : [2014]
1 SCR 350; Bhagwathula Samanna v. Special Tahsildar and Land Acquisition Officer (1991) 4 SCC 506 : [1991]
1 Suppl. SCR 172; Trishala Jain v. State of Uttaranchal (2011) 6 SCC 47 : [2011] 8 SCR 520; Kasturi and Ors. v. State of Haryana (2003) 1 SCC 354 : [2002] 4 Suppl. SCR 117; Kalyani (Dead) Through Lrs. & Ors. v. Sulthan Bathery Municipality & Ors. Civil Appeal No. 3189 of 2022 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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