Compulsory acquisition compensation: reliable comparable sales govern market value, and interest extends to solatium as part of excess compensation.

In compulsory acquisition, market value is fixed as of the notification date on the basis of reliable comparable sales or other cogent material, and unsuitable sales data such as small, dissimilar, or remote lands may be disregarded. On the record, the claimants did not prove a higher value, but the court accepted the Advocate General's concession and enhanced compensation partly, fixing the rate at Rs. 18 per cent for non-wet lands while maintaining the Collector's award for wet lands. The claim for severance charges and injurious affection failed because actual damage and expenditure were not proved. Interest was held payable on solatium as part of the excess compensation awarded.

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Issues: (i) Whether the market value of the acquired lands required interference and enhancement on the basis of the evidence of comparable sales and other material on record; (ii) Whether the claim for severance charges and compensation for alleged injurious effect on the remaining estate was established; (iii) Whether interest was payable on solatium under the governing land acquisition provision.

Issue (i): Whether the market value of the acquired lands required interference and enhancement on the basis of the evidence of comparable sales and other material on record.

Analysis: Compensation in compulsory acquisition is to be determined by reference to the market value prevailing on the date of notification, applying the standard of a hypothetical willing vendor and willing purchaser. Comparable sales of recent date, bona fide in character, and relating to the acquired land or nearby lands with similar advantages are the best evidence. Small plots, irrigated lands, or lands situated far away from the acquired property are ordinarily unsafe guides for large tracts. On the evidence, the sales relied on by the claimants were either too small, dissimilar in character, or too remote in situation to furnish a reliable basis. However, the record contained a concession by the Advocate General that the market value could be fixed at a specified rate, and that statement was accepted as a reliable basis for determination where the claimants had failed to establish a higher value by acceptable evidence.

Conclusion: The market value was enhanced in part, and was fixed at Rs. 18 per cent for lands other than wet lands, while the Collector's award of Rs. 30 per cent for wet lands was maintained.

Issue (ii): Whether the claim for severance charges and compensation for alleged injurious effect on the remaining estate was established.

Analysis: Severance or injurious affection requires proof of actual damage caused by acquisition and of expenditure incurred or loss suffered on that account. The materials on record did not establish that the appellant had spent money on retaining walls, culverts, bridges, pathways, or other protective works, nor that the acquisition had caused measurable injury to the remaining land. The estate continued to use the internal road, and the alleged water stagnation was not shown to be a new or compensable consequence of acquisition. The burden of proving such additional loss was not discharged.

Conclusion: The claim for severance charges and injurious affection was rejected.

Issue (iii): Whether interest was payable on solatium under the governing land acquisition provision.

Analysis: The relevant provision authorised interest on the excess compensation determined by the court from the date of taking possession to the date of payment. Compensation includes solatium as an element of recompense for compulsory deprivation of land. The provision was construed to cover interest on the entire excess compensation awarded by the court, including solatium, so as to fully recompense the owner for loss of use of the land during the relevant period.

Conclusion: Interest on solatium was held payable.

Final Conclusion: The appeals succeeded only to the extent of enhancement of compensation and grant of interest on solatium, while the rejection of severance compensation and other disallowed claims was upheld.

Ratio Decidendi: In compulsory acquisition, market value must be fixed on the basis of reliable comparable sales or other cogent material as of the notification date, and where the statute authorises interest on excess compensation, that interest extends to solatium as part of the compensation awarded by the court.

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