Shashikant Bansal V/S Gwalior Improvement Trust/Gwalior Development Authority July 26, 2010

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9525 OF 2003

Shashikant Bansal ........Appellant
Versus
Gwalior Improvement Trust/
Gwalior Development Authority .......Respondent


With
CIVIL APPEAL NO. 9529 OF 2003

Gwalior Improvement Trust/
Gwalior Development Authority .....Appellant

Versus

Shashikant Bansal .......Respondent




JUDGMENT


G.S. Singhvi, J.


1. These appeals are directed against judgment dated 14.12.2000 of the

Division Bench of Madhya Pradesh High Court whereby the appeal filed by

Shashikant Bansal (hereinafter referred to as `the appellant') under Section




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147 of the Madhya Pradesh Town Improvement Trust Act, 1960 (for short,

`the Act') was partly allowed and market value of the land acquired by

Gwalior Improvement Trust/Gwalior Development Authority (hereinafter

referred to as `the respondent') was fixed at the rate of Rs.1.50 per square

feet minus 25% development cost and the appellant's claim for payment of

interest on solatium was rejected.



2. The appellant's land comprised in Khasra Nos. 48 to 53, 60 to 63 and

65 to 67 measuring 16.04 Bighas situated in Keshobaagh, Gwalior was

acquired for execution of the residential scheme framed by the respondent.

The appellant was offered a sum of Rs.1,98,975/- as compensation for the

land, house and wells existing over the land but he did not accept the same.

Therefore, a reference was made under Section 72(3) of the Act to the Joint

Tribunal of All Town Improvement Trusts of Madhya Pradesh (for short,

`the Tribunal'). The Tribunal considered the rival pleadings and evidence

and passed award dated 14.7.1992, the relevant portion of which reads thus:


"We direct that the development authority Gwalior the
successor in office of Gwalior Improvement Trust do pay
Rs.12000/- per bigha as compensation for the acquired land,
Rs.40,000/- per well i.e. Rs. 80,000/- for two wells. Rs.
50,000/- for the house on the land, Rs.30,000/- for the standing
trees and plants on the land, Rs.50,000/- for the boundary wall,
Rs.3500/- for pipes and angles, Rs.5000/- for the standing
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sugarcane crop, Rs.15000/- for the amount spent in leveling the
land, Rs.5000/- for the loss of pump house and water tank
(house) and Rs.4000/- for tin shed. The development authority,
Gwalior shall also pay 6% interest on the above amount from
30.7.76 and 16% solatium on the above amount."


3. Feeling dissatisfied with the market value fixed by the Tribunal, the

appellant preferred an appeal under Section 147 of the Act. The Division

Bench of the High Court partly allowed the appeal and fixed the market

value of the land at the rate of Rs.1.50 per square feet but ordered deduction

of development cost at the rate of 25%. The Division Bench rejected the

appellant's claim for award of interest on solatium by relying upon the

judgment of this Court in Yadavrao P. Pathade v. State of Maharashtra

(1996) 2 SCC 570.



4. Shri R.P. Gupta, learned senior counsel appearing for the appellant

argued that the direction given by the High Court for payment of

compensation to the appellant at the rate of Rs.1.50 per square feet after

deducting 25% development cost is not only unjustified, but is legally

unsustainable because in an identical case of Narayan Prasad v. Nagar

Sudhar Nyas and others (First Appeal No. 3 of 1993 decided on

30.8.2000), the market value of the land was fixed at Rs. 1.50 per square feet

without any deduction. Learned senior counsel extensively referred to the
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evidence adduced by the parties before the Tribunal and argued that the

High Court committed an error by directing deduction of 25% towards

development cost ignoring that the land had already been developed by the

appellant. He made a pointed reference to the statements of PWs. 1, 2 and 3,

who were examined by the appellant and documents marked Exts. P1 to p17

to show that the appellant had already leveled the land, constructed

boundary wall, tube wells, tin sheds, power house and had planted large

number of fruit bearing trees and submitted that in the absence of any contra

evidence, there was no legal basis for applying the rule of 25% deduction

towards the development cost. Learned senior counsel also relied upon the

amendments made in the Land Acquisition Act, 1894 (for short, `the 1894

Act') by Amendment Act No. 68 of 1984, the judgments of this Court in

Balammal v. State of Madras AIR 1968 SC 1425, Nagpur Improvement

Trust and another v. Vithal Rao and others AIR 1973 SC 689,

Maharashtra State Road Transport Corporation v. State of

Maharashtra (2003) 4 SCC 200 and argued that even though the

appellant's land was acquired under the State Act, he is entitled to the

benefit of the amendment made in the 1894 Act. Learned senior counsel

further argued that in view of the Constitution Bench judgment in Sunder v.

Union of India (2001) 7 SCC 211 by which the judgment in Yadavrao P.
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Pathade v. State of Maharashtra (supra) was overruled, the appellant is

entitled to the interest on the amount of solatium.



5. Ms. Indu Malhotra, learned senior counsel appearing for the

respondent fairly admitted that in the case of Narayan Prasad, which is

identical to the appellant's case, the High Court had fixed the market value

of the acquired land at Rs.1.50 per square feet without 25% deduction

towards development cost and that C.A. No. 9526/2006 filed by the

respondent against the judgment of the High Court has been dismissed today

on the ground of smallness of the amount, but argued that the impugned

judgment cannot be said to be vitiated by any error of law because the

deduction of 25% towards development cost was necessary because the

respondent had to spend substantial amount in providing amenities

necessary for a housing scheme. On the issue of the appellant's entitlement

to get interest on solatium, Ms. Malhotra conceded that such benefit will be

admissible to him in the light of the judgment of the Constitution Bench in

Sunder v. Union of India (supra).



6. We have considered the respective arguments/submissions. In our

view, the Division Bench of the High Court did not commit any error by
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fixing the market value of the acquired land at the rate of Rs.1.50 per square

feet, but the deduction of 25% towards development cost was totally

uncalled for and unjustified. While the appellant had adduced oral as well as

documentary evidence to show that he had already developed the land by

leveling the same, constructing boundary wall, tube wells, power house, tin

sheds and fixing the pipes and angles and also by planting large number of

fruit bearing trees, the respondent did not adduce any evidence to disprove

the same or that any particular amount was to be spent for the purpose of

making improvements. Therefore, the deduction of 25% towards

development cost is legally unsustainable.



7. The question whether the appellant is entitled to interest on solatium

must be answered in his favour in view of the judgment of the Constitution

Bench in Sunder v. Union of India (supra) and another judgment in

Virender Singh v. Union of India (2003) 10 SCC 86. We may also observe

that in view of the law laid down in Balammal v. State of Madras (supra),

Nagpur Improvement Trust and another v. Vithal Rao and others

(supra) and Maharashtra State Road Transport Corporation v. State of

Maharashtra (supra), the appellant is entitled to the benefits which are
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admissible to a person whose land is acquired under the 1894 Act including

interest on solatium.



8. In the result, Civil Appeal No.9525 of 2003 is allowed and Civil

Appeal No.9529 of 2003 is dismissed. The respondent is directed to pay

enhanced compensation to the appellant in terms of the judgment of the

High Court without making any deduction. The appellant shall also be

entitled to interest on solatium. The amount payable to the appellant in

terms of this judgment should be paid within a period of 2 months from the

date of receipt/production of copy of this judgment.




.............................J.
[G.S. Singhvi]



..............................J.
[Asok Kumar Ganguly]
New Delhi
July 26, 2010