Court allows interest on enhanced compensation at 6% from possession date. Deductions upheld for development costs. Special leave petitions dismissed.

The court in this case held that interest should be allowed on the enhanced compensation amount at a rate of 6% per annum from the date of possession of the land. Additionally, deductions of 33% and 20% towards development costs were upheld based on the principle that undeveloped land requires amenities to match developed lands. The Tribunal's decision on these deductions was deemed reasonable. The special leave petitions were dismissed, with a directive to pay interest on the enhanced compensation amount at 6% per annum. No costs were awarded.

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Issues involved: Whether interest should be allowed on the enhanced amount of compensation and whether the deduction made in determining the amount of compensation was justified.

Interest on enhanced compensation: The judgment of Krishna Iyer, J. in Shiv Kumar and Anr. v. State of Punjab and Ors. concluded that interest should be allowed on the enhanced amount of compensation. The court directed that interest at the rate of 6 per cent per annum shall be payable on both the amount of compensation and the enhanced portion from the date of taking possession of the land.

Deduction in compensation: The acquired land was classified into two belts, 'A' and 'B', with a portion abutting roads classified as belt 'A' and the remaining as belt 'B. The High Court upheld a deduction of 33 per cent in one case and 20 per cent in the other towards the cost of development. This deduction was based on the principle that undeveloped land under acquisition requires provision for amenities like roads, drainage, lighting, and other facilities to bring it on par with developed lands. The Tribunal's decision to apply these deductions was considered reasonable and not arbitrary, given the undeveloped nature of the acquired area and the 'belting' principle applied.

Conclusion: The special leave petitions were dismissed, with a direction to pay interest at 6 per cent per annum on the enhanced compensation amount. No costs were awarded in this matter.

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