2011 (2) TMI 1398 - SC - Indian Laws

Supreme Court: Additional amount under Land Acquisition Act payable on market value only

The Supreme Court clarified that the additional amount under Section 23(1A) of the Land Acquisition Act, 1894 is payable only on the market value ... Whether additional amount under Section 23(1A) of the Land Acquisition Act, 1894 (`Act' for short) is payable on the solatium under Section 23(2) of the Act? Issues:- Interpretation of additional amount under Section 23(1A) of the Land Acquisition Act, 1894 regarding its applicability on solatium under Section 23(2).Analysis:1. The case involved a question of whether the additional amount under Section 23(1A) of the Land Acquisition Act, 1894 is payable on the solatium under Section 23(2) of the Act. The respondents claimed an additional amount of 12% per annum on the market value of the land and the solatium amount, which was accepted by the Executing Court and upheld by the High Court. The issue was challenged in the Supreme Court.2. Section 23 of the Act outlines the factors to be considered in determining compensation for acquired land. The market value of the land at the date of notification under Section 4(1) is a crucial component. Compensation includes factors such as damage to standing crops, severance of land, injurious effects on other property, relocation expenses, and loss of profits. Additionally, Section 23(1A) mandates an additional amount of 12% per annum on the market value from the date of notification to the award date. Solatium at 30% is also awarded on the market value.3. The Supreme Court clarified that the additional amount under Section 23(1A) is payable only on the market value determined under Section 23(1) and not on any other amount. Solatium under Section 23(2) is not payable on the additional amount, and vice versa. The Court emphasized that these statutory benefits are automatically payable at specified rates, and no reasons need to be given for their grant.4. Previous judgments, such as Mathapathi Basavannewwa and L. Krishnan, highlighted the purpose of the additional amount under Section 23(1A) to compensate for delays and inflation during the acquisition process. The Court in P. Ram Reddy v. Land Acquisition Officer clarified that the additional amount is only payable on the market value determined under Section 23(1). The ruling in Sunder v. Union of India established that interest calculations include compensation, additional amount, and solatium awarded under Section 23.5. The Court held that the additional amounts payable to a landowner under the Act include compensation under Section 23(1), solatium under Section 23(2), and the additional amount under Section 23(1A. Interest is also awarded on the aggregate of these amounts for the period between possession and payment. The Court's decision in Gurpreet Singh v. Union of India provides guidance on adjusting and accounting for these payments.6. Ultimately, the Supreme Court allowed the appeal, setting aside the lower courts' decisions that the additional amount under Section 23(1A) is payable on solatium. It clarified that the additional amount is only awardable on the market value determined under Section 23(1) and cannot be calculated on the solatium payable under Section 23(2) of the Act.