TaxTMI 
TaxTMI 
2008 (9) TMI 977
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....Mandi Samiti') for whose benefit large area of land situated in three adjoining villages Mundera, Neem Sarai and Chak Maida Patti in Tehsil Chail, District Allahabad were acquired for construction of a Mandi Samiti. Out of these 22 First Appeals, three First Appeals have been filed by the claimants for enhancement of the market rate determined by the Reference Court while the remaining 19 First Appeals have been filed by the Mandi Samiti for reduction of the market rate. The particulars of all the First Appeals are contained in the Schedule to this judgment. The notification under Section 4(1) of the Act for acquisition of land situated in these three villages was issued on 12th January, 1977 and the declaration under Section 6 of the Act was made on 26th January, 1977. The Special Land Acquisition Officer gave the award under Section 11 of the Act in respect of the land acquired in village Mundera on 11th June, 1980 and for the land acquired in villages Neem Sarai and Chak Maida Patti on 10th July, 1981. The Special Land Acquisition Officer determined the market rate of the land for villages Mundera and Chak Maida Patti at a uniform rate @ Rs. 2400/- per bigha while for the....
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.... 42/82 Neem Sarai 10.7.1981 21.10.89 Rs. 20,000/- Per Bigha 30% 9/15% 10. FA 207/96 K.U.M.S. Vs. Mohd. Akram 33/82 Neem Sarai 10.7.1981 30.1.1989 Rs.20,338.98 Per Bigha 30% 9/15%+23 (1-A) 11. FA 126/91 K.U.M.S. Vs. Kafeel Ahmad 32/82 Neem Sarai 10.7.1981 4.11.1987 Rs.20,338.98 Per Bigha 30% 9/15% 12. FA 219/88 Kafeel Ahmad Vs. State of U.P. 32/82 Neem Sarai 10.7.1981 4.11.1987 Rs.20,338.98 Per Bigha 30% 9/15% 13. FA 35/83 Moti Lal Vs. State of U.P. 8/82 Chak Maida Patti 10.7.1981 12.10.82 Rs.20,000/- Per Bigha 15% 6% 14. FA 73/83 K.U.M.S. Vs. Moti Lal 8/82 Chak Maida Patti 10.7.1981 ....
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....of 1990, 392 of 1983 and 391 of 1983 relate to village Mundera. While First Appeal No.1156 of 1990 has been filed by the claimant for enhancement of the market rate determined by the Reference Court @ Rs. 4000/- per bigha, the remaining two First Appeals have been filed by the Mandi Samiti for reduction of the market rate determined by the Reference Court @ Rs. 40/- per sq. meter. The Special Land Acquisition Officer had determined the market rate of the land involved in these three First Appeals @ Rs. 2400/- per bigha. This market rate had been determined by him taking into consideration the sale deed executed on 1st July, 1975 by Pachu in favour of Ram Surat and others for the land situated in Plot No.216 in the same village @ Rs. 3200/- per bigha but since the sale deed was for a small area of land, the Special Land Acquisition Officer made a deduction of 25% and determined the market rate @ Rs. 2400/- per bigha. In First Appeal No.1156 of 1990, which arises out of LA Case No.21 of 1981, the Reference Court considered the two awards given earlier by the Reference Court in respect of the same acquisition. These awards were rendered in LA Case No.8 of 1982 (Moti Lal Vs. Stat....
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....00/- per bigha on the ground that in these two awards the Reference Court had not taken into consideration the circle rate of the land determined by the Collector under the Stamp Act. NEEM SARAI First Appeal Nos. 364 of 1998, 1163 of 1988, 771 of 1989, 212 of 1996, 313 of 1993, 197 of 1996, 207 of 1996, 126 of 1991 and 219 of 1988 relate to land situated in village Neem Sarai. All the aforesaid First Appeals except First Appeal No.219 of 1988, have been filed by the Mandi Samiti for reduction of the market rate of the land determined by the Reference Court. The Reference Court determined the market rate of the land @ Rs. 20,338.98 per bigha in all these First Appeals except First Appeal No.212 of 1996 in which the market rate was determined @ Rs. 10/- per sq. yard. First Appeal No.219 of 1988 has been filed by the claimant for enhancement of the market rate. The Special Land Acquisition Officer in all these cases had determined the market rate of the land by the award dated 10th July, 1981 @ Rs. 20,338.98 per bigha. The Special Land Acquisition Officer noticed that out of the various sale deeds filed by the claimants as well as by the State, the sale deeds mentioned at Ser....
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....mant for enhancement of the market rate determined by the Reference Court @ Rs. 20,000/- per bigha, all the other First Appeals have been filed by the Mandi Samiti for reduction of the market rate determined by the Reference Court @ Rs. 20,000/- per bigha, Rs. 15,000/- per bigha and Rs. 10,000/- per bigha. The Special Land Acquisition Officer had determined the market rate of the land @ Rs. 2400/- per bigha in respect of the land covered by all the aforesaid First Appeals. In First Appeal Nos. 35 of 1983, 73 of 1983, 74 of 1983, 383 of 1983, 389 of 1983, 390 of 1983, 178 of 1984 and 179 of 1984, the Reference Court determined the market rate of the land @ Rs. 20,000/- per bigha. In determining the aforesaid rate of Rs. 20,000/- per bigha the Reference Court relied upon the exemplar sale deed executed on 17th February, 1976 in which the market rate of the land was Rs. 2040/- per biswa or Rs. 40,800/- per bigha and after making deduction for the largeness of the area of the land under acquisition viz-a-viz the land covered by the sale deed, the Reference Court determined the market rate of the land @ Rs. 20,000/- per bigha. In First Appeal No.393 of 1983, the Reference Court de....
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.... Learned counsel appearing for the claimants submitted that the Reference Court committed no error in determining the market rate of the land @ Rs. 40/- per sq. meter on the basis of the circle rate determined by the Collector under the Stamp Act and in any case the claimants were entitled to the statutory benefits under Amendment Act No.68 of 1984. In some of the First Appeals filed by the claimants, learned counsel have also claimed amount towards the acquisition of tube wells and trees. The dispute, therefore, between the claimants and the Mandi Samiti in all these First Appeals basically relates to three issues namely the determination of the market rate of the land, the statutory benefits available to the claimants under Sections 23 (1-A), 23(2) and 28 of the Act, and in some of the Appeals the amount for acquisition of trees and tube-wells. DETERMINATION OF MARKET RATE As would be noticed, the Reference Court determined the market rate of the land at different rates. Sri B.D. Mandhyan learned Senior Counsel appearing for the Mandi Samiti has submitted that in seven cases the Reference Court determined the market rate of the land situated in village Neem Sarai @ R....
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....e Court had correctly determined the market rate of the land @ Rs. 40/- per square metre or Rs. 10/- per sq. yards because this will take care of the submissions made on behalf of the Mandi Samiti in First Appeal No. 391 of 1983, First Appeal No. 392 of 1983 and First Appeal No. 212 of 1996 as well as the submissions advanced on behalf of the claimants for enhancement of the market rate to Rs. 40/- per square metre. This determination has been made by the Reference Court in L.A. Case No. 20 of 1981, L.A. Case No. 22 of 1981 and L.A. Case No. 169 of 1982 giving rise to First Appeal No. 392 of 1983, First Appeal No. 391 of 1983 and First Appeal No. 212 of 1996 respectively. The awards in L.A. Case No. 20 of 1981 (Baij Nath Vs. State of U.P.) and L.A. Case No. 22 of 1981 (Ram Narain Vs. State of U.P.) were made on the same date i.e. 31st May, 1983 while the award in L.A. Case No. 169 of 1982 was made subsequently on 18th March, 1988. In L.A. Case No. 20 of 1981 and L.A. Case No. 22 of 1981 identical reason has been given by the Reference Court for determining the market rate of the land @ Rs. 40/- per square metre and the same is as follows:- "The claimant has also filed a ce....
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....nsel for the State cannot be accepted for the above reason." In the subsequent award made by the Reference Court on 18th March, 1988 in L.A. Case No. 169 of 1982, the same logic has been applied but the rate has been reduced to Rs. 10/- per square yard because of the location of the plot. Sri B.D. Mandhyan learned Senior Counsel appearing for the Mandi Samiti submitted that the market rate of the land under the Act cannot be determined on the basis of the circle rate determined under the Stamp Act or the Rules framed thereunder. On the other hand Sri. K.K. Dubey learned counsel appearing for the claimants in First Appeal No. 391 of 1983 and First Appeal No. 392 of 1983 has defended the determination of the market rate given by the Reference Court on the basis of the circle rate and has also contended that the Reference Court has not determined the market rate solely on the basis of the circle rate but has taken into consideration the entire evidence on the record. Sri O.P. Srivastava learned counsel for the appellant in First Appeal No. 1156 of 1990 has also contended that the market rate of the land which has been determined by the Reference Court @ Rs. 4,000/- per bigha sho....
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....n Stamp Act, 1899. In exercise thereof all the State Legislature including the Legislature of A.P. amended the Act and enacted Section 47-A empowering the registering officer to levy stamp duty on instruments of conveyance, etc, if the registering officer has reason to believe that the market value of the property, covered by the conveyance, exchange, gift, release of right or settlement, has not been truly set forth in the instruments, he may refuse registering such instrument and refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon. On receipt of such opinion, he may call upon the vendor as per the rules prescribed, to pay the additional duty thereon. If the vendor is dissatisfied, he has been given the right to file an appeal and further getting reference made to the High Court for decision in that behalf. Section 47-A would thus clearly show that the exercise of the power thereunder is with reference to a particular land covered by the instrument brought for registration. When he has reasons to believe it to be undervalued, he should get verified whether the market value was truly reflected in the instrument ....
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....prima facie determination of rate of the area concerned only to give guidance to the registering authority to test prima facie whether the instrument has properly described the value of the property. The circle rate under this rule is neither final for the authority nor to one subjected to pay the stamp duty. So far sub-sections (1) and (2) are concerned they are very limited in their application as they only direct the registering authority to refer to the Collector for determination in case the property is undervalued in such instrument. The circle rate does not take away the right of such person to show that the property in question is correctly valued as he gets an opportunity in case of undervaluation to prove it before the Collector after reference is made. This also marks the dividing line for the exercise of power between the registering authority and the Collector. In case the valuation in the instrument is same as recorded in the circle rate or is truly described it could be registered by the registering authority but in case it is undervalued in terms of sub-section (1) or sub-section (2), it has to be referred to and decided by he Collector. Thus, the circle rate, as af....
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....ification under Section 4(1) of the Act. In Raghuvans Narain Singh v. the U.P. Government AIR 1967 SC 465, the Supreme Court explained what 'market value' meant by stating it to be "the price that a willing purchaser would pay to a willing seller having due regard to its existing condition, with all its existing advantages and its potential possibilities when laid down in its most advantageous manner, excluding any advantage due to the carrying out of the scheme for the purposes for which the property is compulsorily acquired." Similar view was also expressed by the Supreme Court in Thakur Kanta Prasad Singh (dead) by LRs. Vs. State of Bihar, AIR 1976 SC 2219. In Ravindra Narain Vs. Union of India, AIR 2003 SC 1987, the Supreme Court explained the approach to be adopted for determining the 'market value' of the acquired land: "While determining the market value of the land acquired, it has to be correctly determined and paid so that there is neither unjust enrichment on the part of the acquirer nor undue deprivation on the part of the owner. The price which a willing vendor might reasonably expect to receive from the willing purchaser must be taken into con....
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.... Samiti states that the same rate may be determined for the land situated in all the three villages. Learned counsel appearing the claimants have also stated that there is no such marked difference in the quality of the land in these three villages so as to call for a different determination of the market rate. In fact, it would be seen that in L.A. Case No. 20 of 1981, L.A. Case No.21 of 1981 and L.A. Case No. 22 of 1981 which relate to land of village Mundera the claimants themselves had relied upon the award given in L.A. Case No. 8 of 1982 in respect of land situated in village Chak Maida Patti, wherein the market rate was determined @ Rs. 20,000/- per bigha. Thus, in all these three First Appeals namely First Appeal No. 1156 of 1990, First Appeal No.392 of 1983 and First Appeal No. 391 of 1983 the market rate can be determined @ Rs. 20,338.98/- per bigha which is the higher of the two rates and and to which, as stated earlier, learned Senior Counsel for the Mandi Samiti has no objection. In First Appeal No.1156 of 1990 Sri O.P. Srivastava learned counsel appearing for the claimant has also claimed an amount towards the acquisition of Well. Sri B.D. Mandhyan learned Senio....
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....e orchard. In the remaining First Appeals filed by the Mandi Samiti the claim for reduction of the market rate of the land cannot be sustained. It also needs to be mentioned that such determination of the market rate of the land takes care of the submission of Sri B.D. Mandhyan, learned Senior Counsel for the Mandi Samiti about non impleadment of the Mandi Samiti in the References. STATUTORY BENEFITS The last issue that remains to be addressed is about the statutory benefits under the Land Acquisition Amendment Act No.68 of 1984 by which Section 23(1-A) was inserted and the rate of solatium under Section 23(2) and the rate of interest under Section 28 were enhanced. The amended Sections 23(1-A), 23(2) and 28 are as follows:- 23(1-A). In addition to the market value of the land, as above provided, the Court shall in every case award an amount calculated at the rate of twelve per centum per annum on such market-value for the period commencing on and from the date of the publication of the notification under Section 4, sub-section (1), in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier. Ex....
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....ly, shall apply, and shall be deemed to have applied, also to, and in relation, to any award made by the Collector or court or to any order passed by the High court or Supreme Court in appeal against any such award under the provisions of the principal Act after the 30th day of April, 1982 [the date of introduction of the Land Acquisition (Amendment) Bill, 1982, in the House of the People] and before the commencement of this Act." The aforesaid provisions have come up for interpretation before the Supreme Court in a number of decisions. A Constitution Bench of the Supreme Court in Union of India Anr. Vs. Raghubir Singh (dead) by LRs. etc., AIR 1989 SC 1933 examined Section 30 of the aforesaid Transitional provision contained in Amendment Act No.68 of 1984 for the purpose of payment of solatium at the amended higher rate and observed:- "................ In other words S. 30(2) of the Amendment Act extends the benefits of the enhanced solatium to cases where the award by the Collector or by the Court is made between 30 April, 1982 and 24 September, 1984 or to appeals against such awards decided by the High Court and the Supreme Court whether the decisions of the High Court o....
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....der the correctness of the decision in Union of India v. Zora Singh (1992) 1 SCC 673 (decided by a bench of three Judges). In Zora Singh case this Court has held that the payment of additional amount payable @ 12% per annum on the market value under sub-section (1-A) inserted in Section 23 of the Land Acquisition Act, 1894 (hereinafter referred to as ''the principal Act') by the Land Acquisition (Amendment) Act, 1984 (hereinafter referred to as ''the amending Act') is to be ordered in every case where the reference was pending before the reference Court on the date of commencement of the amending Act even though the award of the Collector was made prior to 30-4-1982." ....................................... For the reasons aforementioned it must be concluded that in respect of acquisition proceedings initiated prior to date of commencement of the amending Act the payment of the additional amount payable under Section 23(1-A) of the Act will be restricted to matters referred to in clauses (a) and (b) of sub-section(1) of Section 30 of the amending Act. Zora Singh insofar as it holds that the said amount is payable in all cases where the reference was pe....
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....82, the claimant would be entitled to all the benefits under the Amending Act 68 of 1984. (iii) If the award of the Collector is before 30-4-1982 but the award of the Reference Court is after 30-4-1982, the claimant would be entitled to the benefits under Section 23(2) and Section 28 of the Act as amended by the Amending Act 68 of 1984, but would not be entitled to the benefit under Section 23(1-A) of the Act added by Amending Act 68 of 1984. However, recently in Smt. Leelawati Agarwal Vs. State of Jharkhand & Anr., 2008 AIR SCW 2723 the Supreme Court has referred the matter to a larger Bench to consider the correctness of the view expressed in paragraph 4 in Paripurnan II's case (supra) that a restricted interpretation should not be given, in the face of what was stated in paragraph 34 of Raghubir Singh's case (supra). In this case the award of the Collector was made on 6.4.1972 and the Reference Court gave the award on 30.9.1985. The High Court, in view of the decision of the Supreme Court in K.S. Paripurnan (I), denied the benefit under Section 23(1-A), 23(2) and Section 28. It was urged before the Supreme Court by the claimant that in view of the decisions of the ....
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....ted as time barred. The Supreme Court did not agree with the reasoning of the High Court and observed that it was not necessary for the claimants to have filed separate Appeals/Cross-objections for the purposes of claiming interest under Section 28 or 34 of the Act and the claimant could claim interest in the State Appeal. It was also observed that the dismissal of the Cross-Objections as being barred by time was wholly irrelevant. This issue was also examined by the Supreme Court in Shri Narain Das Jain (since deceased) by Lrs. Vs. The Agra Nagar Mahapalika, Agra, JT 1991 (1) SC 461 and the relevant observations are as follows:- "The importance of the award of solatium cannot be undermined by any procedural blocades. It follows automatically the market value of the land acquired, as a shadow would to a man. It springs up spontaneously as a part of the statutory growth on the determination and emergence of market value of the land acquired. It follows as a matter of course without any impediment. That it falls to be awarded by the Court "in every case" leaves no discretion with the Court in not awarding it in some cases and awarding in others. Since the award of solatium is i....
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....lating the solatium and interest under Sections 23(2) and 28 of the Act. The claimant(s) would, however, not be entitled to the benefit of Section 23(1-A) of the Act. First Appeal No.391 of 1983 is allowed to the extent that the market rate of the land is reduced to Rs. 20,338.98/- per bigha. The claimant(s) would also be entitled to the benefit of Amending Act 68 of 1984 for calculating the solatium and interest under Sections 23(2) and 28 of the Act. The claimant(s) would, however, not be entitled to the benefit of Section 23(1-A) of the Act. First Appeal No.364 of 1998, First Appeal No.1163 of 1988, First Appeal No.771 of 1989, First Appeal No.313 of 1993, First Appeal No.197 of 1996 and First Appeal No.126 of 1991 are dismissed. First Appeal No.207 of 1996 is allowed to the extent that the claimant(s) would not be entitled to the benefit of Section 23(1-A) of the Act. First Appeal No. 212 of 1996 is allowed to the extent that the market rate of the land is reduced to Rs. 20,338.98 per bigha. First Appeal No.219 of 1988 is allowed to the extent that the claimant(s) would be entitled for the amount of Rs. 10,000/- for the acquisition of tubewell and Rs. 5000/- for ....