Saturday 25 October 2014

Guidelines to land acquisition court for grant of costs while deciding land acquisition reference


 The Appellant, party-in-person, contended that they have paid court fees of Rs. 48 lakhs and High Court ignored the mandatory provisions of law in awarding costs and that court fees is an integral part of costs. It was submitted that the impugned order dated 13.10.2011 awarding "grant of proportionate costs" is not in accordance with well settled principle of law. Appellants further contended that being partly successful before the High Court, they cannot be deprived of their claim of entire court fees and the costs.
52. The learned senior Counsel for Respondents submitted that as per the well settled principle, the High Court has awarded proportionate costs and there is no improper exercise of discretion warranting interference by this Court.
53. Section 27 of the Act deals with costs. Section 27 reads as under:
27. Costs: (1) Every such award shall also state the amount of costs incurred in the proceedings under this Part, and by what persons and in what proportions they are to be paid.
(2) When the award of the Collector is not upheld, the costs shall ordinarily be paid by the Collector, unless the court shall be of opinion that the claim of the applicant was so extravagant or that he was so negligent in putting his case before the Collector that some deduction from his costs should be made or that he should pay a part of the Collector's costs.
54. The language of Section 27(1) is clear and very wide and it gives power to the courts to order costs to be paid by what persons and in what proportions they are to be paid. In making order for costs Under Section 27(1), the court may have regard to the provisions of Section 35 Code of Civil Procedure Analysing Sub-section (2) of Section 27, it appears to consist of three parts, viz., (i) When the award of the Collector is not upheld, the costs shall ordinarily be paid by the collector as directed by the Court; (ii) the court is not bound to do so in every case. If the court forms opinion that the claim of the claimant is extravagant or that he was so negligent in putting his case before the Collector, then the court may make a different order as regards costs and (iii) the court may in such cases direct, that some deduction be made from the costs of the claimant or that he should pay a part of the Collector's costs.
55. Ordinarily, when a litigant succeeds in part and fails in part, the equitable order made is that he should receive proportionate costs. When considering the Appellants' claim in C.M. No. 735 of 2011, in exercise of its discretion, the High Court rightly awarded proportionate costs and accordingly directed payment of such proportionate costs of over and above Rs. 20,000/- as originally ordered. Merely because the Appellants claimed compensation at the rate of Rs. 50,000/- per sq. yard, the Respondents cannot be saddled with the liability of paying the entire costs and the court fees paid by the Appellants. There is no improper exercise of discretion by the High Court in awarding proportionate costs and we find no merit in the claim of the Appellants claiming full costs.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 2545-2546/2012
MAJ. GEN. KAPIL MEHRA & ORS.
..Appellants

UNION OF INDIA & ANR.
Dated;October 17, 2014

R. BANUMATHI, J.

These appeals are directed against the impugned
Orders
dated
24.12.2010
and
13.10.2011
passed
by
Delhi High Court in L.A. Appeal No.149/2007 and C.M.
No.735/2011 in L.A. Appeal No.149/2007 respectively by
which High Court awarded compensation at the rate of
Rs.14,974/- per sq. yard for appellants’ land acquired by the
Delhi Development Authority (DDA) for development of Vasant
Page 1
2
Kunj Residential Scheme, Delhi along with interest and
proportionate costs.
2.
Shorn of details of the previous notification in 1983
and the earlier rounds of litigation, background facts in a
nutshell are as follows: On 19.2.1997, a fresh notification was
issued by the Land and Building Department, Govt. of NCT of
Delhi under Sections 4 and 17 of the Land Acquisition Act,
1894 (the Act) proposing to acquire the land of the appellants
measuring 12 Bigha (12096 sq. yards) for development of
Vasant Kunj under the planned development scheme of Delhi.
Land
Acquisition
Collector
(LAC) by award No. 2/98-99
dated 18.9.1998 assessed the market value of the land
@ Rs.2,05,642.07 paise per bigha (Rs.205/-per sq.yard),
adding additional interest @ 12% per annum on the market
value of land and the solatium @ 30% on the market value of
land and the compensation was fixed @ Rs.37,21,180.05 paise
per bigha.
3.
Aggrieved
by
the
award,
the
appellants
filed
Reference Petition under Section 18 of the Act before the
Additional District Judge (LAC), Delhi. In the reference court,
Page 2
3
the
appellants
produced
four
documents
Exs
A7
to
A10-perpetual lease deeds of residential plots in Vasant Kunj,
executed between September 1995 to December 1996 at the
rates ranging from Rs.28,719/- to Rs.47,542/- per sq. yard.
The reference court held that the lease deeds of auction of a
developed plot by a public authority are not a proper guide for
determining the fair market value of the acquired lands and
reference court discarded the exemplars- Exs A7 to A10 lease
deeds
and
rejected
the
claim
of
the
appellants
for
enhancement of compensation.
4.
Aggrieved by the decision of the reference court,
appellants filed Land Acquisition Appeal No.149/2007 before
High Court of Delhi. The High Court had taken average of the
exemplars- Exs A7 to A10 and deducted 40% from the average
price towards smallness of the area and further deducted one
third towards development of land and fixed the market value
of the land at Rs.14,974/- per sq. yard. High Court held that
the appellants shall be entitled to 30% solatium on the above
market value of the land under Section 23(2) of the Act and
12% of the additional amount under Section 23(1-A) of the
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4
Act. The High Court further ordered that in terms of Section
28 of the Act on the enhanced market value, the appellants
shall be paid interest @ 9% per annum from 19.2.1997 i.e.
date of notification under Section 4 of the Act till 18.2.1998
and thereafter @ 15% per annum till the date of deposit of
compensation. It was also held that interest shall also be paid
on solatium and additional amount. The appellants filed
application C.M. No.735/2011 in L.A. Appeal No.149/2007
before the High Court under Sections 152 and 153 read with
Section 151 C.P.C. to award Rs.48 lakhs which was paid as
court fees and also prayed for award of interest under Section
34 for the enhanced compensation. The application was
allowed
in
proportionate
part
by
costs
order
to
the
dated
13.10.2011,
appellants
over
granting
and
above
Rs.20,000/- as awarded in High Court’s judgment dated
24.12.2010. Being aggrieved by the quantum of compensation
and award of proportionate cost, the appellants are before us.
5.
First appellant- Maj. Gen. Kapil Mehra, party in
person, contended that correct reckoning of market value is
the highest price in any sale deed of comparable instance and
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5
the High Court was not justified in averaging the sale prices of
the four perpetual lease deeds, Exs A7 to A10 and the
approach of the High Court in averaging the sale prices of
exemplars is erroneous. He further contended that the
exemplars Exs A7 to A10 relied upon by the appellants are
perpetual lease deeds of residential plots in Vasant Kunj and
what was acquired was freehold lands of the appellants and
the price difference between the ‘leasehold’ and ‘freehold’ was
not kept in view by the High Court for ascertaining the correct
market value. It was submitted that deductions made for
development at one third i.e. 331/3% and 40% for the
smallness of area of exemplars as compared to the largeness of
the acquired lands are very much on the higher side.
6.
The judgment of the High Court was challenged by
DDA in Special Leave Petition (Civil) No.15272/2011 and the
same
was
dismissed
by
the
Order
dated
12.5.2011.
Mr. Amarendra Sharan, learned Senior Counsel appearing for
the respondents submitted that in the Special Leave Petition
(Civil) No.15272/2011, Maj. Gen. Kapil Mehra appeared in
person and the said special leave petition was dismissed by a
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6
speaking order and the said order merges with the High Court
order and the same is binding upon the appellant and in
separate
appeals,
the
appellants
cannot
challenge
the
adequacy of the compensation and the present appeals are not
maintainable. Reliance was placed upon the judgment of this
Court in Kunhayammed and Ors. vs. State of Kerala and Anr.
(2000) 6 SCC 359 and S. Gangadhara Palo vs. Revenue
Divisional Officer and Anr., (2011) 4 SCC 602.
7.
Without
prejudice
to
the
above
contention,
Mr. Amarendra Sharan, learned Senior Counsel appearing for
the respondents submitted that the land acquired is 12 bigha
which is almost 12096 sq. yards
which is thousand times
more than the area of the plots in Exs A7 to A10, that too, in
fully developed commercial area and the sale price of such a
small area cannot be taken as the value for arriving at the
market value of large extent of area. It was submitted that it
is not safe to rely upon the allotment rates/auction rates in
regard to the commercial plots formed by DDA in a developed
layout in determining the market value of the adjoining large
extent of undeveloped land. It was further submitted that in
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7
case
of
Delhi
Development
Authority
or
any
statutory
authority, 40% of the land area is to be deducted for formation
of
roads, drains, parks and common amenities and further
35% deduction ought to have been made towards the cost of
leveling the land, construction of sewerages, laying electricity
lines etc. Learned Senior Counsel submitted that deduction for
development ought to have been made at 70-75% and the High
Court was not justified in making nominal deduction of 33 1/3%
of the area.
8.
We have given our thoughtful consideration to the
submissions and perused the materials on record.
9.
Before we proceed to consider the merits of the
matter, let us first examine the preliminary objections raised
by the respondents as to the maintainability of these appeals.
Of course, Special Leave Petition (Civil) No.15272/2011 filed
by DDA was dismissed on 12.5.2011 by a speaking order. It is
well settled that when a special leave petition is dismissed
with reasons, there is a merger of the judgment of the High
Court in the order of the Supreme Court. Dismissal of special
leave petition filed by DDA only means that this Court felt that
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the quantum of Rs.14,974/- per sq. yard fixed by the High
Court
need not be further reduced. In the special leave
petition, though first appellant appeared and resisted the
same, the first appellant could not have advanced his
arguments seeking enhancement of compensation. Dismissal
of special leave petition has become final as against DDA.
When SLP filed by DDA was heard and disposed of by this
Court (vide Order dated 12.05.2011), the appellants were
pursuing their review petition before the High Court which
came to be dismissed on 13.10.2011. So far as the appellants
are concerned, the order was then res subjudice. Order of this
Court dismissing the special leave petition preferred by DDA,
in our view, is not an impediment to the appellants to pursue
their appeals and we proceed to consider merits of the rival
contentions.
10.
Market Value:
First question that emerges is what
would be the reasonable market value which the acquired
lands are capable of fetching. While fixing the market value of
the acquired land, the Land Acquisition Officer is required to
keep in mind the following factors:- (i) existing geographical
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9
situation of the land; (ii) existing use of the land; (iii) already
available advantages, like proximity to National or State
Highway or road and/or developed area and (iv) market value
of other land situated in the same locality/village/area or
adjacent or very near to the acquired land.
11.
The standard method of determination of the
market value of any acquired land is by the valuer evaluating
the land on the date of valuation publication of notification
under Section 4(1) of the Act, acting as a hypothetical
purchaser willing to purchase the land in open market at the
prevailing price on that day, from a seller willing to sell such
land at a reasonable price. Thus, the market value is
determined with reference to the open market sale of
comparable land in the neighbourhood, by a willing seller to a
willing buyer, on or before the date of preliminary notification,
as that would give a fair indication of the market value.
12.
In Viluben Jhalejar Contractor v. State of Gujarat
(2005) 4 SCC 789, this Court laid down the following
principles for determination of market value of the acquired
land: (SCC pp.796-97, paras 17-20)
Page 9
10
“17. Section 23 of the Act specifies the matters
required to be considered in determining the
compensation; the principal among which is the
determination of the market value of the land on the
date of the publication of the notification under sub-
section (1) of Section 4.
18. One of the principles for determination of the
amount of compensation for acquisition of land would
be the willingness of an informed buyer to offer the
price therefor. It is beyond any cavil that the price of
the land which a willing and informed buyer would
offer would be different in the cases where the owner is
in possession and enjoyment of the property and in
the cases where he is not.
19. Market value is ordinarily the price the property
may fetch in the open market if sold by a willing seller
unaffected by the special needs of a particular
purchase. Where definite material is not forthcoming
either in the shape of sales of similar lands in the
neighbourhood at or about the date of notification
under Section 4(1) or otherwise, other sale instances
as well as other evidences have to be considered.
20. The amount of compensation cannot be
ascertained
with
mathematical
accuracy.
A
comparable instance has to be identified having regard
to the proximity from time angle as well as proximity
from situation angle. For determining the market value
of the land under acquisition, suitable adjustment has
to be made having regard to various positive and
negative factors vis-à-vis the land under acquisition by
placing the two in juxtaposition......”
13.
The courts adopt comparable sales method for
valuation of land while fixing the market value of the acquired
land. Comparable sales method of valuation is preferred rather
than methods of valuation of land such as capitalization of net
income method or expert opinion method, because it furnishes
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the evidence for determination of the market value of the
acquired land at which the willing purchaser would pay for the
acquired land if it had been sold in the open market at the
time of issuance of notification under Section 4 of the Act.
14.
While taking comparable sales method of valuation
of land for fixing the market value of the acquired land, there
are certain factors which are required to be satisfied and only
on fulfillment of those factors, the compensation can be
awarded according to the value of the land stated in the sale
deeds. In Karnataka Urban Water Supply and Drainage Board
and Ors. v. K.S. Gangadharappa & Anr., (2009) 11 SCC 164,
factors which merit consideration as comparable sales are,
interalia, laid down as under:-
“It can be broadly stated that the element
of
speculation
is reduced to minimum if the underlying
principles of fixation of market value with reference to
comparable sales are made:
(i)
(ii)
(iii)
(iv)
when sale is within a reasonable time of
the date of notification under Section
4(1);
It should be a bona fide transaction;
It should be of the land acquired or of the
land adjacent to the land acquired; and
It should possess similar advantages.
It is only when these factors are present, it can merit a
consideration as a comparable case (See Special Land
Acquisition Officer v. T. Adinarayan Setty (AIR 1959 SC 429)
Page 11
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These aspects have been highlighted in Ravinder Narain v.
Union of India (2003) 4 SCC 481.”
15.
Appellants have produced Exs A7 to A10-four
perpetual lease deeds of residential plots in Pocket C of Vasant
Kunj Area between September 1995 to December 1996, the
details of which are as under:
Exh. Plot Size Sale Price
     No. (Sq.Mtr.) (Rs.)
A-7 
A-8 
A-9 
A-10 
16.
Sale Date 22.09.95 59C 218 5,75,05,000/-
          02.02.96 5C 220 96,55,000/-
          02.02.96 8C 231 1,01,61,000/-
          10.12.96 13C 242 1,37,60,000/-
Rate
(Rs. per
sq.yd.)
28,719/-
36,695/-
36,779/-
47,542/-
Exs A7 to A10 are lease deeds of small plots
executed by DDA. Plots in the above lease deeds are in the
same vicinity of the acquired land and High Court had taken
the same as comparable sales. The size of the plots covered in
the exemplars are smaller. If there is a dissimilarity in regard
to the area, it is open to the court to make proper deduction
towards smallness of area. We find no error in the approach
of the High Court taking Exs A7 to A10 as comparable sales
for fixation of market value.
17.
The High Court has taken average of sale price of
Exs A7 to A10 and deducted 40% towards smallness of the
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13
plot taken for comparison, further deducted one third towards
development. Though we may finally affirm the rate fixed by
the High Court, for the reasons stated infra we fix the market
value in accordance with the well settled principles laid down
by this Court.
18.
Determination of Market Value on the basis of
average price paid under sale transactions: For ascertaining
the fair market value of the acquired land, High Court adopted
the ‘average method’ by averaging the sale price of Exs A-7 to
A-10 and calculated the rate at Rs.37,433.75 paise per sq.
yard. The appellants contend that when land is being
compulsorily taken away, the landholder is entitled to claim
the highest value which similar land in the locality is shown to
have fetched in a bonafide transaction and High Court was not
justified in averaging the sale prices of four perpetual lease
deeds. Appellants placed reliance upon the judgments of this
Court in M. Vijayalakshmamma Rao Bahadur vs. Collector
(1969) 1 MLJ SC 45 and State of Punjab and Anr. vs. Hans Raj
(D) by Lrs. And Ors., (1994) 5 SCC 734. In Hans Raj case
(supra) it was held as under:
Page 13
14
“4. Having given our anxious consideration to the
respective contentions, we are of the considered view
that the learned Single Judge of the High Court
committed a grave error in working out average price
paid under the sale transactions to determine the
market value of the acquired land on that basis. As
the method of averaging the prices fetched by sales of
different lands of different kinds at different times, for
fixing the market value of the acquired land, if
followed, could bring about a figure of price which may
not at all be regarded as the price to be fetched by sale
of acquired land. One should not have, ordinarily
recourse to such method. It is well settled that genuine
and bona fide sale transactions in respect of the land
under acquisition or in its absence the bona fide sale
transactions proximate to the point of acquisition of
the lands situated in
the neighbourhood of the
acquired lands possessing similar value or utility
taken place between a willing vendee and the willing
vendor which could be expected to reflect the true
value, as agreed between reasonable prudent persons
acting in the normal market conditions are the real
basis to determine the market value.”
19.
Referring to Hans Raj’s case in Anjani Molu Dessai
vs. State of Goa And Anr., (2010) 13 SCC 710, this Court held
as under:-
“20. The legal position is that even where there are
several exemplars with reference to similar lands,
usually the highest of the exemplars, which is a
bonafide transaction, will be considered.
Where
however there are several sales of similar lands whose
prices range in a narrow bandwidth, the average
thereof can be taken, as representing the market
price. But where the values disclosed in respect of two
sales are markedly different, it can only lead to an
inference that they are with reference to dissimilar
lands or that the lower value sales is on account of
undervaluation or other price depressing reasons.
Consequently, averaging cannot be resorted to. We
may refer to two decisions of this Court in this behalf.”
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20.
Where the lands acquired are of different type and
different locations, averaging is not permissible.
But where
there are several sales of similar lands, more or less, at the
same time, whose prices have marginal variation, averaging
thereof is permissible. For the purpose of fixation of fair and
reasonable market value of any type of land, abnormally high
value or abnormally low value sales should be carefully
discarded.
If the number of sale deeds of the same locality
and the same period with short intervals are available, the
average price of the available number of sale deeds shall be
considered as a fair and reasonable market price.
Ultimately,
it is in the interest of justice for the land losers to be awarded
fair compensation. All attempts should be taken to award fair
compensation to the extent possible on the basis of their
accessibility to different kinds of roads, locational advantages
etc.
Four perpetual lease deeds A-7 to A-10 relied upon by
the appellants are of the same locality – Vasant Kunj
Residential Scheme and relate to the period ranging from
September 1995 to December 1996, but they are just prior to
Section 4(1) notification.
In our view, the High Court was
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justified in taking the average of the said four exemplars and
approach adopted by the High Court in averaging the sale
prices of Exs A7 to A10 cannot be said to be perverse.
21.
Freehold vis-a-vis Leasehold Price - Market Value:
Contention of the appellants is that Exs A7 to A10 relate to
long term perpetual leasehold deeds and what was acquired
was appellants’ freehold property and freehold property has
higher value than the leasehold plot and suitable addition
should have been made.
The appellant contends that
the
terms stipulated in perpetual leasehold are extremely stringent
and in such cases, no sale is permitted without the permission
of DDA and there are many other uncomfortable clauses in
the terms of the perpetual lease deeds and all these ‘stringent
conditions’
increase the gap between ‘freehold’ price and
‘leasehold’ price. It is submitted that market value of ‘freehold
property’ is much higher than the value of ‘leasehold property’
and this was not taken into consideration by the High Court.
22.
In M.B. Gopala Krishna & Ors. vs. Special Deputy
Collector, Land Acquisition, (1996) 3 SCC 594, as relied upon
by the appellants, it was held as under:-
Page 16
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“It is further contended by Shri Mudgal that value of
the land does not get pegged down on account of the land
being in occupation of a tenant and the circumstances in
this behalf
taken into account by the High Court, is
irrelevant. We find no force in the contention. A freehold
land and one burdened with encumbrances do make a big
difference in attracting willing buyers. A freehold land
normally commands higher compensation while the land
burdened with encumbrances secures lesser price. The fact
of a tenant in occupation would be an encumbrance and no
willing purchaser would willingly offer the same price as
would be offered for a freehold land.
Under those
circumstances, the High Court would be right in its
conclusion that the land burdened with encumbrances
takes lesser price than the freehold land. The encumbrances
would operate as a disabling factor to peg down the price
when we compare the same with freehold land.”
The above observations were made in the aforesaid decision
while upholding the compensation that was payable to the
landlord without reference to the tenant’s rights. The above
principle
will
apply
only
where
a
property
subject
to
encumbrances is to be sold to a private purchaser or is
acquired subject to the tenancy.
23.
‘Freehold land’ and ‘leasehold land’ are conceptually
different. If a property subject to a lease and in the possession
of a lessee is offered for sale by the owner to a prospective
private purchaser, the purchaser being aware that on
purchase he will get only title and not possession and that the
sale in his favour will be subject to encumbrance namely, the
lease, he will offer a price taking note of the encumbrances.
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Naturally, such a price would be less than the price of a
property without any encumbrance.
But when a land is
acquired free from encumbrances, the market value of the
same will certainly be higher.
24.
Exs A7 to A10 are the perpetual lease deeds relating
to the period from September 1995 to December 1996 and to
get the perpetual lease deeds converted as freehold, the holder
of perpetual leasehold has to pay further amount to DDA.
Having regard to the period of Exs A7 to A10 and the date of
issuance of Section 4 notification dated 19.2.1997, in our
view, addition of 20% is to be added for arriving at the value
of ‘freehold’ property.
Adding 20% to Rs.37,433.75 per sq.
yard which comes to Rs.7,486.75, the value is calculated at
Rs.44,920.50 rounded off to Rs. 44,921/- per sq. yard.
25.
Deduction Towards Competitive Bidding:
Exs A7 to
A10 exemplars are perpetual lease deeds of commercial plots
auctioned in Vasant Kunj area. Learned senior counsel for the
respondents contended that this
can never
auctioned commercial site
be equated to the value of large extent
of
agricultural land like the land acquired in the present case
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and those plots auctioned are developed plots on which the
Government had spent a considerable amount.
It is
contended that the auction prices of commercial plots in
exemplars are not true index of a fair market value of the land
at the relevant time because elements of speculation and
unfair competition in such auctions and suitable deduction
ought to have been made for competitive bidding.
26.
While
considering
the
competition
involved
in
auction sales of commercial/residential plots and observing
that the element of competition in auction sales make them
unsafe guides for determining the market value of the
acquired lands, in Executive Engineer, Karnataka Housing
Board v. Land Acquisition Officer, Gadag And Ors., (2011) 2
SCC 246 paras 6 & 7, this Court held as under:-
“6. But auction-sales stand on a different footing.
When purchasers start bidding for a property in an auction,
an element of competition enters into the auction. Human
ego, and desire to do better and excel over other competitors,
leads to competitive bidding, each trying
to outbid the
others. Thus in a well advertised open auction-sale, where a
large number of bidders participate, there is always a
tendency for the price of the auctioned property to go up
considerably. On the other hand, where the auction-sale is
by banks or financial institutions, courts etc. to recover
dues, there is an element of distress, a cloud regarding title,
and a chance of litigation, which have the effect
of
dampening the enthusiasm of bidders and making them
cautious, thereby depressing the price. There is therefore
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every likelihood of auction price being either higher or lower
than the real market price, depending upon the nature of
sale. As a result, courts are wary of relying upon auction-
sale
transactions when other regular traditional sale
transactions are available while determining the market
value of the acquired land. This Court in Raj Kumar v.
Haryana State (2007) 7 SCC 609 observed that the element
of competition in auction-sales makes them unsafe guides
for determining the market value.
7.
But where an open auction-sale is the only
comparable sale transaction available (on account of
proximity in situation and proximity in time to the acquired
land), the court may have to, with caution, rely upon the
price disclosed by such auction-sales, by providing an
appropriate deduction or cut to offset the competitive hike
in value. In this case, the Reference Court and the High
Court, after referring to the evidence relating to other sale
transactions, found them to be inapplicable as they related
to far away properties. Therefore we are left with only the
auction-sale transactions. On the facts and circumstances,
we are of the view that a deduction or cut of 20% in the
auction price disclosed by the relied upon auction
transaction towards the factor of “competitive price hike”
would enable us to arrive at the fair market price.”
(Underlining added)
27.
The above principle was reiterated in Raj Kumar
And Ors. v. Haryana State And Ors., (2007) 7 SCC 609 where
in para 16, this Court has held as under:-
“16. All the relevant aspects have been taken into
consideration and we do not find any error in principle
committed by the High Court justifying our interference in
appeal. An argument was raised that the prices of lands
fetched in auction had been ignored on the basis that prices
fetched in auction-sales cannot form the basis. It was
submitted that there was no general rule that such prices
cannot be adopted.
On considering the relevant facts
disclosed, it cannot be said that the High Court has
committed any error in discarding those auction-sales while
determining the compensation payable. The element of
competition in auction-sales does not make them safe
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guides. Similarly, the argument that when a compact piece
of land is acquired there cannot be adoption of separate
rates, cannot be accepted in the light of the decision of this
Court in Union of India vs. Mangatu Ram (1997) 6 SCC 59.
That case related to acquisition of lands in the vicinity of the
present properties. The ratio of that decision also supports
the distinction made by the Awarding Officer and the High
Court in the matter of fixing the land value for the lands in
Satrod Khurd and Satrod Khas.”
28.
The general rule that the sale prices of the
comparable sales should be relied upon for calculating the
market value will not apply when the sale transactions relied
upon are auction sales. As per the decision in Karnataka
Housing Board’s case (2011) 2 SCC 246, in our view, 20%
deduction is to be made for competitive bidding.
Deducting
20% i.e. Rs.8,984/- from Rs.44,921/-, balance arrived at
Rs.35,937/- per sq. yard is fixed as the value for the acquired
land.
29.
Deduction
Towards
the
Development: The High
Court has deducted 40% from the average price to equalize the
factor of the market value of a small plot of land as compared
to large area of land acquired and the figure works out to
Rs.22,460.25.
High Court has also deducted one third
towards development cost and determined the market value of
the acquired land at Rs.14,974/- per sq. yard.
Page 21
22
30.
Appellants contend that the rate of deduction as
applied by the High Court was highly excessive as the
acquired lands are situated in the area already developed and
have all potential for development.
It is submitted that the
Court repeatedly held that in assessing the compensation
payable in respect of lands which had the potential for
housing or commercial purposes, normally 20% of the
assessed value of the land is deducted, depending on the
nature of the land, its location, extent of expenditure involved
for development and the land required for roads and other
civic amenities etc. and while so, thumb rule of 33 1/3% or
one third cut on development cost cannot be used in a
situation
when
the
exact
development
cost
has
been
established through evidence. The appellants rely upon the
documents issued by Executive Engineer (Annexure P-5) to
contend that the cost of development of Vasant Kunj is only
Rs.330/- per Sq. Yard.
31.
Mr. Amarendra Sharan, learned Senior Counsel
appearing for the respondents contended that in forming a lay
out
by
Delhi
Development
Authority
or
any
statutory
Page 22
23
authority, 40% of the land area is to be deducted for formation
of roads, drains, parks and other civic amenities and further
35% is to be deducted towards development cost for forming
the lay out, levelling the road, construction of drainage and
erection of electricity lines etc. It was submitted that deduction
for development on both the components worked out to 70-
75% and the High Court was not justified in making standard
deduction of one third.
It was further submitted that if a
suitable deduction is made, the compensation awarded by the
High Court seems to be excessive and prayer for suitable
reduction of the award is made.
32.
While
making
one
third
deduction
towards
development cost, the learned single Judge did not keep in
view
the
two
essential
components
of
deduction
for
development. Deduction for development consists of two
components:- firstly, appropriate deduction to be made
towards the area required to be utilized for roads, drains and
common facilities like parks etc.; secondly, further deduction
to be made towards the cost of development, that is cost of
levelling the land, cost of laying roads and drains, erection of
Page 23
24
electrical poles and water lines etc. For deduction of
development towards land and development charges, the
nature of development, conditions and nature of the land, the
land required to be set apart under the
Building Rules for
roads, sewerage, electricity, parks, water supply etc. and other
relevant
circumstances
involved
are
required
to
be
considered.
33.
In Haryana State Agricultural Market Board And
Anr. vs. Krishan Kumar And Ors., (2011) 15 SCC 297, it was
held as under:
“10. It is now well settled that if the value of small
developed plots should be the basis, appropriate deductions
will have to be made therefrom towards the area to be used
for roads, drains, and common facilities like park, open
space, etc. Thereafter, further deduction will have to be
made towards the cost of development, that is, the cost of
leveling the land, cost of laying roads and drains, and the
cost of drawing electrical, water and sewer lines.”
34.
Consistent view taken by this Court is that one
third deduction is made towards the area to be used for roads,
drains, and other facilities, subject to certain variations
depending upon its nature, location, extent and development
around the area. Further, appropriate deduction needs to be
made for development cost, laying roads, erection of electricity
Page 24
25
lines depending upon the location of the acquired land and the
development that has taken place around the area.
35.
Reiterating the rule of one third deduction towards
development, in Sabhia Mohammed Yusuf Abdul Hamid Mulla
(Dead) by Lrs. and Ors. vs. Special Land Acquisition Officer
and Ors., (2012) 7 SCC 595, this Court in paragraph 19 held
as under:-
“19. In fixing the market value of the acquired land,
which is undeveloped or underdeveloped, the courts have
generally approved deduction of 1/3 rd of the market value
towards development cost except when no development is
required to be made for implementation of the public
purpose for which land in acquired. In Kasturi vs. State of
Haryana (2003) 1 SCC 354) the Court held: (SCC pp. 359-
60, para 7)
“7... It is well settled that in respect of agricultural
land or undeveloped land which has potential value
for housing or commercial purposes, normally 1/3 rd
amount of compensation has to be deducted out of
the amount
of compensation
payable
on the
acquired land subject to certain variations depending
on its nature, location, extent of expenditure involved
for development and the area required for road and
other civic amenities to develop the land so as to
make the plots for residential or commercial
purposes. A land may be plain or uneven, the soil of
the land may be soft
or hard bearing
on the
foundation for the purpose of making construction;
may be the land is situated in the midst of a
developed area all around but that land may have a
hillock or may be low-lying or may be having deep
ditches. So the amount of expenses that may be
incurred in developing
the area also varies.
A
claimant who claims that his land is fully developed
and nothing more is required to be done for
developmental purposes, must show on the basis of
evidence that it is such a land and it is so located. In
Page 25
26
the absence of such evidence, merely saying that the
area adjoining his land is a developed area, is not
enough, particularly when the extent of the acquired
land is large and even if a small portion of the land is
abutting the main road in the developed area, does not
give the land the character or a developed area. In
84 acres of land acquired even if one portion on one
sides abuts the main road, the remaining large area
where planned development is required, needs laying
of internal roads, drainage, sewer, water, electricity
lines, providing civic amenities, etc. However, in cases
of some land where there are certain advantages by
virtue of the developed area around, it may help in
reducing the percentage of cut to be applied, as the
developmental charges required may be less on that
account. There may be various factual factors which
may have to be taken into consideration while applying
the cut in payment of compensation towards
developmental charges, may be in some cases it is
more than 1/3rd and in some cases less than 1/3rd. It
must be remembered that there is difference between a
developed area and an area having potential value,
which is yet to be developed. The fact that an area is
developed or adjacent to a developed area will not
ipso facto make every land situated in the area also
developed to be valued as a building site or plot,
particularly when vast tracts are acquired, as in this
case, for development purpose.” (emphasis supplied)
The rule of 1/3rd deduction was reiterated in Tejumal
Bhojwani v. State of U.P. ((2003)10 SCC 525, V. Hanumantha
Reddy v. Land Acquisition Officer, (2003) 12 SCC 642, H.P.
Housing Board v. Bharat S. Negi (2004) 2 SCC 184 and
Kiran Tandon v. Allahabad Development Authority. (2004)10
SCC 745”
36.
While determining the market value of the acquired
land, normally one third deduction i.e. 331/3% towards
development charges is allowed. One third deduction towards
development
was
allowed
in
Special
Tehsildar,
L.A.
Vishakapatnam vs. Smt.A. Mangala Gowri, (1991) 4 SCC 218;
Page 26
27
Gulzara Singh & Ors. vs. State of Punjab & Ors., (1993) 4 SCC
245; Santosh Kumari & Ors. vs. State of Haryana, (1996) 10
SCC 631; Revenue Divisional Officer-cum-LAO vs. Shaik Azam
Saheb etc., (2009) 4 SCC 395; A.P. Housing Board vs. K.
Manohar Reddy, (2010)12 SCC 707; Ashrafi & Ors. vs. State
of Haryana & Ors., (2013) 5 SCC 527 and Kashmir Singh vs.
State of Haryana & Ors., (2014) 2 SCC 165.
37.
Depending on nature and location of the acquired
land, extent of land required to be set apart and expenses
involved for development, 30% to 50% deduction towards
development was allowed in Haryana State Agricultural Market
Board and Anr. vs. Krishan Kumar and Ors. (2011) 15 SCC
297; Deputy Director Land Acquisition vs. Malla Atchinaidua
And Ors. AIR 2007 SC 740; Mummidi Apparao (Dead by LR) vs.
Nagarjuna Fertilizers & Chemical Ltd., AIR 2009 SC 1506; and
Lal Chand vs. Union of India and Anr. (2009) 15 SCC 769.
38. In few other cases, deduction of more than 50% was
upheld. In the facts and circumstances of the case in
Basavva (Smt.) And Ors. v. Spl. Land Acquisition Officer And
Ors.,
(1996) 9 SCC 640, this Court upheld the
Page 27
28
deduction of 65%. In Kanta Devi & Ors. vs. State of Haryana
And Anr., (2008) 15 SCC 201, deduction
of 60% towards
development charges was held to be legal. This Court in Subh
Ram & Ors. vs. State of Haryana & Anr., (2010) 1 SCC 444,
held that deduction of
67% amount was not improper.
Similarly, in Chandrasekhar (dead) by L.Rs. and Ors. vs. LAO
& Anr., (2012) 1 SCC 390, deduction of 70% was upheld.
39.
We have referred to various decisions of this Court
on deduction towards development to stress upon the point
that deduction towards development depends upon the nature
and location of the acquired land. The deduction includes
components of land required to be set apart under the
building rules for roads, sewage, electricity, parks and other
common facilities and also deduction towards development
charges like laying of roads, construction of sewerage.
40.
Rule of one third deduction towards development
appears to be the general rule.
But so far as Delhi
Development Authority is concerned, or similar statutory
authorities, where well planned layouts are put in place,
larger land area may be utilized
for forming layout, roads,
Page 28
29
parks and other common amenities. Percentage of deduction
for development of land to be made in DDA or similar
statutory authorities with reference to various types of layout
was succinctly considered by this Court in Lal Chand vs.
Union of India & Anr. (2009) 15 SCC 769 and observing that
the deduction towards the development range from 20% to
75% of the price of the plots, in paras 13 to 22, this Court held
as under:-
“13. The percentage of “deduction for development” to
be made to arrive at the market value of large tracts of
undeveloped agricultural
land (with potential
for
development), with reference to the sale price of small
developed plots, varies between 20% to 75% of the price of
such developed plots, the percentage depending upon the
nature of development of the layout in which the exemplar
plots are situated.
14. The “deduction for development” consists of two
components. The first is with reference to the area required
to be utilized for developmental works and the second is the
cost of the development works. For example, if a residential
layout is formed by DDA or similar statutory authority, it
may utilize around 40% of the land area in the layout, for
roads, drains, parks, playgrounds and civic amenities
(community facilities), etc.
15. The development authority will also incur
considerable expenditure for development of undeveloped
land into a developed layout, which includes the cost of
leveling the land, cost of providing roads, underground
drainage and sewage facilities, laying water lines, electricity
lines and developing parks ands civil amenities, which would
be about 35% of the value of the developed plot. The two
factors taken together would be the “deduction for
development” and can account for as much as 75% of the
cost of the developed plot.
Page 29
30
16. On the other hand, if the residential plot is in an
unauthorized private residential layout, the percentage of
“deduction for development” may be far less. This is because
in an unauthorized layout, usually no land will be set apart
for parks, playgrounds and community facilities. Even if any
land is set apart, it is likely to be minimal. The roads and
drains will also be narrower, just adequate for movement
of vehicles. The amount spent on development work would
also be comparatively less and minimal. Thus the deduction
on account of the two factors in respect of plots in
unauthorized layouts, would be only about 20% plus 20% in
all 40% as against 75% in regard to DDA plots.
17. The “deduction for development” with reference
to prices of plots in authorized private residential layouts
may range between 50% to 65% depending upon the
standards and quality of the layout.
18. The position with reference to industrial layouts
will be different. As the industrial plots will be large (say of
the size of one or two acres or more as contrasted with the
size of residential plots measuring 100 sq. m to 200 sq m),
and as there will be very limited civic amenities and no
playgrounds, the area to be set apart for development (for
roads, parks, playgrounds and civic amenities) will be far
less; and the cost to be incurred for development will also
be marginally less, with the result the deduction to be made
from the cost of an industrial plot may range only between
45% to 55% as contrasted from 65% to 75% for residential
plots.
19. If the acquired land is in a semi-developed
urban area, and not an undeveloped rural area, then the
deduction for development may be as much less, that is, as
little as 25% to 40%, as some basic infrastructure will
already be available. (Note: The percentages mentioned above
are tentative standards and subject to proof to the contrary.
20. Therefore the deduction for the “development
factor” to be made with reference to the price of a small plot
in a developed layout, to arrive at the cost of undeveloped
land, will be far more than the deduction with reference to
the price of a small plot in an unauthorized private layout
or an industrial layout. It is also well known that the
development cost incurred by statutory agencies is much
higher than the cost incurred by private developers, having
regard to higher overheads and expenditure.
Page 30
31
21. Even among the layouts formed by DDA, the
percentage of land utilized for roads, civic amenities, parks
and playgrounds may vary with reference to the nature of
layout-whether it is residential , residential-cum-commercial
or industrial; and even among residential layouts, the
percentage will differ having regard to the size of the plots,
width of the roads, extent of community facilities, parks and
playgrounds provided.
22. Some of the layouts formed by the statutory
development authorities may have large areas earmarked for
water/sewage treatment
plants, water tanks, electrical
substations, etc. in addition to the usual areas earmarked
for roads, drains, parks playgrounds and community/civic
amenities. The purpose of the aforesaid examples is only to
show that the “deduction for development” factor is a
variable percentage and the range of percentage itself being
very wide from 20% to 75%.”
Lal Chand’s case deals with acquisition of lands by DDA under
the Rohini Residential Housing Scheme where 40% deduction
was made towards the land area to be utilized for laying down
of roads, drains etc.
Further deduction of 35% of the value of
the developed plot towards cost of levelling the land, cost of
providing roads, underground drainage, laying down water
lines, electricity lines was made.
41.
In the instant case, having regard to the extent of
the land acquired and the development in and around Vasant
Kunj area, in our view, it is appropriate to make 35%
deduction towards utilization of the land area in the layout for
roads, drains, parks, playgrounds and civic amenities. So far
Page 31
32
as the expenditure for development of the large extent of land
into a developed area by construction of proper roads,
underground drainage, sewerage and erection of electricity
lines, it is appropriate to make further deduction of 25%,
though 35% of the value was deducted in Lal Chand case
(supra) towards development charges. Two components taken
together, the total deduction to be made would be 60%.
60% of Rs.35,937/- works out to Rs.21,562/- and deducting
the same, the value of the land would be Rs.14,375/- per sq.
yard. What was awarded by the High Court was Rs.14,974/-
per sq. yard. Since the SLP (Civil) No.15272/2011 filed by
DDA was dismissed by this Court on 12.5.2011 and the sale
has become final as against the appellants, we are not inclined
to further reduce the value of the acquired land from
Rs.14,974/- per sq. yard as determined by the High Court and
the compensation awarded by the High Court at Rs.14974/-
per sq. yard is maintained.
42.
INTEREST: Contention of the appellants is that on the
enhanced
compensation,
the
mandatory
interest
Section 34 of the Act has not been awarded to them.
under
Placing
Page 32
33
reliance upon Commissioner of Income Tax, Faridabad vs.
Ghanshyam (HUF), (2009) 8 SCC 412, it is contended that the
impugned judgment is silent on granting statutory interest
under Section 34 of the Land Acquisition Act and the
appellants pray for award of interest on the enhanced
compensation. The appellants filed C.M. No.735/2011 before
the High Court seeking review for payment of interest which
according to the appellants was omitted to be included and the
said application was dismissed by the High Court.
43.
Land Acquisition Act, 1894, provides for payment of
interest to the claimants either under Section 34 or under
Section 28 of the Act. Section 34 of the Act fastens liability on
the Collector to pay interest on the amount of compensation to
be worked out in accordance with provisions of Section 23(1)
and the sub-section thereof, at the rate of 9% per annum from
the date of taking possession until the amount is paid or
deposited. As per proviso to Section 34, if the compensation
amount or any part thereof is not paid or deposited within a
period of one year from the date of taking over possession,
interest shall be payable at the rate of 15% per annum from
Page 33
34
the date of expiry of the said period of one year on the amount
of compensation or part thereof which has not been paid or
deposited before the date of such expiry.
44.
Section 28 empowers the courts, if it was
enhancing the compensation awarded by the Collector, to
award interest on the sum in excess of what the Collector had
awarded as compensation. Both in terms of Section 34 and
Section 28, interest at 9% per annum is payable for the first
year of taking possession and 15% per annum thereafter, if
the amount of compensation was not paid or deposited within
a period of one year or deposited thereafter.
45.
Award of interest under Section 34 is mandatory in
as much the word used in the Section is ‘shall’. The scheme of
the Act and the express provisions thereof establish that the
interest payable under Section 34 is statutory. The claim for
interest under Section 28 of the Act proceeds on the basis that
due compensation not having been paid, the claimant should
be allowed interest on the enhanced compensation amount.
The award of interest under Section 28 is discretionary power
vested in the Court and it has to be exercised in a judicious
Page 34
35
manner and not arbitrarily.
The use of the word “may” in
Section 28 does not confer any arbitrary discretion on the
Court to disallow interest for no valid or proper reasons.
Normally,
Court
awards
interest
if
it
enhances
the
compensation in excess of the amount awarded by the
Collector, unless there are exceptional circumstances.
46.
A Constitution Bench of this Court in Gurpreet
Singh vs. Union of India, (2006) 8 SCC 457, considering the
scope of Section 34 and Section 28 of the Act, has held as
under:-
“44. Section 34 of the Act fastens liability on the
Collector to pay interest on the amount of compensation
determined under Section 23(1) with interest from the date
of taking possession till date of payment or deposit into the
court to which reference under Section 18 would be made.
On determination of the excess amount of compensation,
Section 28 empowers the court, if it was enhancing the
compensation awarded by the Collector, to award interest on
the sum in excess of what the Collector had awarded as
compensation. The award of the court may also direct the
Collector to pay interest on such excess or part thereof from
the date on which he took possession of the land to the date
of payment of such excess into court at the rates specified
thereunder. The Court stated: [Prem Nath Kapur vs. National
Fertilizers Corporation of India Ltd., (1996) 2 SCC 71, SCC p.
77, para 10]
“In other words, Sections 34 and 28 fasten
the liability on the State to pay interest on the
amount
of
compensation
or
on
excess
compensation under Section 28 from the date of
the award and decree but the liability to pay
interest on the excess amount of compensation
determined by the Court relates back to the date of
Page 35
36
taking possession of the land to the date of the
payment of such excess ‘into the court’.”
45. The Court concluded: (Prem Nath Kapur case, SCC
p. 78, para 12)
“12. It is clear from the scheme of the Act and the
express language used in Sections 23(1) and (2), 34
and 28 and now Section 23(1-A) of the Act that
each component is a distinct and separate one.
When compensation is determined under Section
23(1), its quantification, though made at different
levels, the liability to pay interest thereon arises
from the date on which the quantification was so
made but, as stated earlier, it relates back to the
date of taking possession of the land till the date of
deposit of interest on such excess compensation
into the court. ... The liability to pay interest is only
on the excess amount of compensation determined
under Section 23(1) and not on the amount already
determined by the Land Acquisition Officer under
Section 11 and paid to the party or deposited into
the court or determined under Section 26 or
Section 54 and deposited into the court or on
solatium under Section 23(2) and additional
amount under Section 23(1-A).”
47.
In the scheme of the Act, considering the different
stages at which interest is payable on the compensation
amount/enhanced compensation, the Constitution Bench of
this Court in Gurpreet Singh’s case further held as under:-
“32. In the scheme of the Act, it is seen that
the award of compensation is at different stages. The
first stage occurs when the award is passed.
Obviously, the award takes in all the amounts
contemplated by Section 23(1), Section 23(1-A),
Section 23(2) and the interest contemplated by Section
34 of the Act. The whole of that amount is paid or
deposited by the Collector in terms of Section 31 of the
Act.
At this stage, no shortfall in deposit is
contemplated, since the Collector has to pay or deposit
the amount awarded by him. If a shortfall is pointed
out, it may have to be made up at that stage and the
Page 36
37
principle of appropriation may apply, though it is
difficult to contemplate a partial deposit at that stage.
On the deposit by the Collector under Section 31 of the
Act, the first stage comes to an end subject to the right
of the claimant to notice of the deposit and withdrawal
or acceptance of the amount with or without protest.
33. The second stage occurs on a reference under
Section 18 of the Act. When the Reference Court
awards enhanced compensation, it has necessarily to
take note of the enhanced amounts payable under
Section 23(1), Section 23(1-A), Section 23(2) and
interest on the enhanced amount as provided in
Section 28 of the Act and costs in terms of Section 27.
The Collector has the duty to deposit these amounts
pursuant to the deemed decree thus passed. This has
nothing to do with the earlier deposit made or to be
made under and after the award. If the deposit made,
falls short of the enhancement decreed, there can arise
the question of appropriation at that stage, in relation
to the amount enhanced on the reference.
34. The third stage occurs, when in appeal, the High
Court enhances the compensation as indicated
already. That enhanced compensation would also
bear interest on the enhanced portion of the
compensation, when Section 28 is applied.
The
enhanced amount thus calculated will have to be
deposited in addition to the amount awarded by the
Reference Court if it had not already been deposited.
35. The fourth stage may be when the Supreme
Court enhances the compensation and at that stage
too, the same rule would apply.”
48.
By going through the judgment of reference court as
well as the High Court, we find that the appellants were
awarded interest in terms of Section 34 and Section 28 of the
Act.
Section 4(1) notification was issued on 19.02.1997. The
reference court has not enhanced the compensation amount;
Page 37
38
but has only confirmed the award passed by the Collector.
However, while dismissing the reference, reference court held
that the appellant shall be entitled to get interest in terms of
the provisions of the Act for the period from 19.02.1997 till
the date of payment, meaning thereby that the statutory
interest in terms of Section 34 of the Act is payable.
49.
When the High Court enhanced the compensation,
the High Court held that the appellants shall be paid interest
in terms of Section 28 of the Act. On the enhanced
compensation, High Court ordered payment of interest at the
rate of 9% from 19.02.1997 to 18.2.1998 and thereafter at the
rate of 15% per annum till the date of payment. The relevant
portion of the judgment of the High Court reads as under:-
“On the enhanced market value, the appellant
shall be paid interest under Section 28 of the Act @ 9%
per annum from 19.02.1997, the date of issuance of
Section 4 notification for the first year ending on
18.02.1998 and thereafter, @ 15% per annum till the
date of tender of compensation. Interest shall also be
paid on the solatium and the additional amount in
view of the judgment of the Supreme Court in the case
of Sunder Vs. UOI reported as 93(2001) DLT 569 (SC).”
Since the statutory interest under Section 34 and also the
interest in terms of Section 28 of Act had been awarded to the
Page 38
39
appellants, we find no merit in the grievance of the appellants
as to the payment of interest.
50.
COSTS:
By its judgment dated 24.12.2010, the High
Court enhanced the compensation at the rate of Rs.14,974/-
per sq. yard, but the High Court had then awarded only
costs of Rs.20,000/-.
Thereafter, the appellants filed C.M.
No. 735/2011, interalia, contending that they ought to have
been awarded entire costs at the rate of Rs. 50,000/- per sq.
yard, enhanced compensation as claimed by the claimants.
Appellants also claimed that the entire court fees of Rs.48
lakhs affixed on the memo of appeal be included in the costs.
High Court rejected the plea of the appellants for inclusion of
the entire court fees and costs at the rate of enhanced
compensation for the acquired land at Rs.50,000/- per sq.
yard as claimed by the appellants. But the High Court
modified its order by awarding proportionate costs in favour of
the appellants over and above the sum of Rs.20,000/-.
51.
The appellant, party-in-person, contended that they
have paid court fees of Rs.48 lakhs and High Court ignored
the mandatory provisions of law in awarding costs and that
Page 39
40
court fees is an integral part of costs. It was submitted that
the impugned order dated 13.10.2011 awarding “grant of
proportionate costs” is not in accordance with well settled
principle of law. Appellants further contended that being
partly successful before the High Court, they cannot be
deprived of their claim of entire court fees and the costs.
52.
The
learned
Senior
Counsel
for
respondents
submitted that as per the well settled principle, the High Court
has awarded proportionate costs and there is no improper
exercise of discretion warranting interference by this Court.
53.
Section 27 of the Act deals with costs. Section 27
reads as under:
“27. Costs:- (1) Every such award shall also
state the amount of costs incurred in the proceedings
under this Part, and by what persons and in what
proportions they are to be paid.
(2)
When the award of the Collector is not
upheld, the costs shall ordinarily be paid by the
Collector, unless the court shall be of opinion that the
claim of the applicant was so extravagant or that he
was so negligent in putting his case before the
Collector that some deduction from his costs should
be made or that he should pay a part of the Collector’s
costs.”
54.
The language of Section 27(1) is clear and very wide
and it gives power to the courts to order costs to be paid by
what persons and in what proportions they are to be paid. In
Page 40
41
making order for costs under Section 27(1), the court may
have regard to the provisions of Section 35 C.P.C. Analysing
sub-section (2) of Section 27, it appears to consist of three
parts, viz., (i) When the award of the Collector is not upheld,
the costs shall ordinarily be paid by the collector as directed
by the Court; (ii) the court is not bound to do so in every case.
If the court forms opinion that the claim of the claimant is
extravagant or that he was so negligent in putting his case
before the Collector, then the court may make a different order
as regards costs and (iii) the court may in such cases direct,
that some deduction be made from the costs of the claimant or
that he should pay a part of the Collector’s costs.
55.
Ordinarily, when a litigant succeeds in part and
fails in part, the equitable order made is that he should receive
proportionate costs. When considering the appellants’ claim
in C.M. No. 735 of 2011, in exercise of its discretion, the High
Court rightly awarded proportionate costs and accordingly
directed payment of such proportionate costs of over and
above Rs.20,000/- as originally ordered. Merely because the
appellants claimed compensation at the rate of Rs.50,000/-
Page 41
42
per sq.yard, the respondents cannot be saddled with the
liability of paying the entire costs and the court fees paid by
the appellants. There is no improper exercise of discretion by
the High Court in awarding proportionate costs and we find no
merit in the claim of the appellants claiming full costs.
56.
We may incidentally refer to the statement of
learned Senior Counsel for the respondents that compensation
amount of about Rs.40 crores has already been paid to the
appellants.
57.
We, therefore, do not find any merit in these appeals
and the appeals are dismissed accordingly. Parties are to bear
their respective costs.
................................J
(T.S. Thakur)
................................J
(R. Banumathi)
New Delhi;
October 17, 2014

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