HARIDWAR DEVELOPMENT AUTHORITYversusRAGHUBIR SINGH

                     [201 OJ 2 S.C.R. 201


         HARIDWAR DEVELOPMENT AUTHORITY                           A
                              v.
                     RAGHUBIR SINGH
           (Civil Appeal No. 1150-1167 of 2010)
                     JANUARY 29, 2010.
                                                                  B
 [R.V. RAVEENDRAN AND K.S. RADHAKRISHNAN, JJ.]

     Land Acquisition Act, 1894:

     s. 23 - Land ·acquisition - Compensation - Belting           c
method - HELD: In the instant case acquisition relates to a
comparatively small extent of village land measuring about
38 bighas of compact contiguous land - The view of High
Court that compensation should be awarded at an uniform rate
does not call for interference - Guidelines for belting method,   0
laid down.

       s. 23 - Compensation - Enhancement on the basis of
  sale exemplar - HELD: Compensation awarded on the basis
. of the sale exemplar of more than one year prior to date of
 preliminary notification, increased by 12%.                      E

      s. 23 - Compensation - Deduction towards development
 cost - HELD: 25% deduction adopted by Collector, need no
.alteration.
                                                                  F
     ss. 34 and 28 - Interest - HELD: In regard to
compensation that is offered by Land Acquisition Collector,
interest is payable u/s 34 - With re.spect to increase in
.compensation allowed by reference court or appellate court,
interest is awarded uls 28 - Sections 34 and 28 do not
duplicate the award of interest, but ·together cover the entire   G
amount of compensation awarded - Awarding interest on
enhanced amount is the normal rule - Refusal to interest
should be by assigning special/specific reasons.
                             201                                  H




                                     ·'-'   .......   ~.
    202       SUPREME COURT REPORTS                 [2010] 2 S.C.R.


A        Lal Chanel vs. Union of India 2009 SCR 622 = 2009 (15)
    SCC 769 and Sardar Jogendra Singh vs. State of UP 2008
    (17) sec 133, referred to.

                             Case Law Reference:
B         2009 SCR 622              referred to           para 9
          2008 (17) sec 133         referred to           para 10
        CIVIL APPELLATE JURISDICTION :-Civil Appeal
    Nos.1150-1167 of 2010.
c
         From the Judgment & Order dated 22.6.2005 of the High
    Court of Uttaranchal at Nainital in Appeal Nos. 75, 76, 84, 87,
    88, 90-92, '20, 68-74, 77-78 of 2003.

                                  WITH
D
     C.A. Nos. 1168-69, 1170, 1171-1178, 1179-1184, 1185-1195
    ·of 2010.
                         .                            .
       . A. K. Ganguly, Vinay Garg, Jyoti Sharma for the Appellant.
E       Lakshmi Raman Singh, Neelam Singh, Durga, Udita
    Singh, Prashant Chaudhary, Vishwajit Singh, Veera Kaul Singh,
    Siddharth Sengar, Abhindra Maheshwari, Pankaj Singh, Vinay
    Garg, Nagendra Singh, Vishwa Pal Singh, Sunil Kumar Singh,
    Mukti Singh, P.N. Gupta for the Respondents.
F
          The Order of the Court was delivered by

                                 ORDER

       R.V.RAVEENDRAN, J. 1. Leave granted. Heard the
G parties.

       2. The first batch of appeals is filed by the Haridwar
  Development Authority ('the Authority', for short), the beneficiary
  of an acquisition. The connected appeals are filed by the
H claimants-landowners whose lands measuring 38.6.8 Bighas
     HARIDWAR DEVELOPMENT AUTHORITY v.                           203
     RAGHUBIR SINGH [R.V. RAVEENDRAN, J.]
(8,45,174 sq.ft.) in village Jwalapur, Tehsil and District Haridwar,     A
were acquired for planned development of a housing colony,
under preliminary notification dated 7.12.1991 and final
notification dated 16.5.1992. As the ranks of parties in the
appeals and counter-appeals vary, the appellant in the first
batch (who is the second respondent in other appeals) will be            B
referred to as the "Authority". The respondents in the first batch
(who are the appellants in the other appeals) are referred to
as the "claimants".

      3. The Land Acquisition Collector made an award dated
9.5.1994. He divided the acquired lands into three belts and             C
awarded compensation at the rate of Rs.26.25 per sq.ft. for the
lands falling in the first belt, Rs.17.50 per sq.ft. for lands falling
in second belt and Rs.13.12 per sq.ft. for the lands falling in
the third belt. The Reference Court however limited the division
of the acquired lands into only two categories, that is lands            D
falling within 500 metres from the National Highway and lands
falling beyond 500 metres from the National Highway. In regard
to the first category, it awarded compensation at the rate of
Rs.26.25 per sq.ft. and for the second category Rs.17.50 per
sq.ft. Feeling aggrieved, both sides filed appeals. The High             E
Court awarded a uniform rate of Rs.26.25 per sq.ft. for all the
acquired lands and rejected the belting system adopted by the
collector and the categorization adopted by the Reference
Court. The High Court also confirmed that claimants will be
entitled to all statutory benefits, that is additional amount under      F
section 23(1A), solatium under section 23(2) and interest under
section 28 of the Land Acquisition Act, 1894 ('Ac' for short).

     4. Neither the Reference Court nor the High Court
increased the base 'rate' of compensation affived at by the
Collector, that is Rs.26/25 .. While the collector divided the           G
acquired lands into three belts and reduced the rates for lands
in the second and third belts (interior lands), the Reference
Court restricted the division of the acquired land into two belts
and adopted the rates fixed by the Collector for the first and
                                                                         H



                                         (
    204          SUPREME COURT REPORTS              [2010] 2 S.C.R..


A second belts. The High Court treated all the acquired lands
  uniformly and awarded the same compensation for all lands by
  adopting the base rate of Rs.26/25 fixed by the Collector. The
  Authority challenges the award on the following two grounds:
  (i) The High Court ought to have retained the three belt
B categorisation adopted by the collector instead of awarding a
  uniform rate for all the lands. (ii) The High Court ought not to
  have awarded interest under section 28 of the Act, when the
  Reference Court had not awarded any interest under the said
  section. On the other hand, the claimants in their appeals have
c contended that the compensation awarded was low and the
  Reference Court and High Court ought to have increased the
  compensation to at least Rs.40/00 per sq.ft. They also contend
  that the High Court was justified in awarding compensation at
  a uniform rate for all the acquired lands and in awarding interest
  under section 28 of the Act.
0
         5. On the contentions urged, the following questions arise
    for consideration :

          (i)      Whether the High Court ought to have adopted the
E                  belt method for award of compensation?

          (ii)     Whether the compensation awarded requires to be
                   increased?

          (iii)    Whether the award of interest under section 28 of
F                  the Act is not sustainable?

    Re : Questioo (i)

       6. The question whether the acquired lands have to be
  valued uniformly at the same rate, or whether different areas in
G the acquired lands have to be v~lued at different rates, depends
  upon the extent of the land acquired, the location, proximity to
  an access road/Main Road/Highway or to a City/TownNillage,
  and other relevant circumstances. We may illustrate :

H      · (A). When a small and compact extent of land is acquired
      HARIDWAR DEVELOPMENT AUTHORITY v.                      205
      RAGHUBIR SINGH [R.V. RAVEENDRAN, J.]
     and the entire area is similarly situated, it will be          A
     appropriate to value the acquired land at a single uniform
     rate ..

      (B). If a large tract of land is acquired with some lands
      facing a main road or a national highway and other lands      B
      being in the interior, the normal procedure is to value the
     fands adjacent to the main road at a higher rate and the
      interior lands which do not have road access, at a lesser
      rate.

     (C) Where a very large tract of land on the outskirts of a     C
     town is acquired, one end of the acquired lands adjoining
     the town boundary, the other end being two to three
     kilometres away, obviously, the rate that is adopted for the
     land nearest to the town cannot be adopted for the land
     which is farther away from the town. In such a situation,      D
     what is known as a belting method is adopted and the belt
     or strip adjacent to the town boundary will be given the
     highest price, the remotest belt will be awarded the lowest
     rate, the belts/strips of lands falling in between, will be
   . awarded gradually reducing rates from the highest to the       E
     lowest.

    (D) Where a very large tract of land with a radius of one
    to two kilometres is acquired, but the ~ntire land acquired
    is far away from any town or"City limits, without any special
    Main road access, then it is logical to award the entire
                                                                    F
    land, one uniform rate. The fact that the distance between
    one point to another point in the acquired lands, may be
    as much as two to three kilometres may not make any
    difference.
                                                                    G
     7. The acquisition with which we are concerned relates to
a comparatively small extent of village land measuring about
38 big has of compact tontiguous land. The High Court was of
the view that the size and situation did not warrant any belting
and all lands deserved the same rate of compensation. The           H
    206      SUPREME COURT REPORTS                    [2010] 2 S.C.R.


A Authority has not placed any material to show that any area was
  less advantageously situated. Therefore the view of the High
  Court that compensation should be awarded at an uniform rate
  does not call for interference.

8 Re : Question (ii)
       8. The collector has referred to several sale transactions
  but relied upon only one document, that is sale deed dated
  19.12.1990 relating to an extent of 11,550 sq. ft. of land sold
  for Rs.4,04,250/-, which works out to a price of Rs.35 per sq.ft.
C The collector deducted 25% from the/said price, as the relied
  upon sale transaction related to a small extent of 11,550 sq.ft.
  and the acquired area was a larger extent 8,45, 174 sq.ft. By
  making such deduction, he arrived at the rate as Rs.26.25 per
  sq. ft. The Reference Court and the High Court have also
D adopted the said sale transaction and valuation.

         9. The claimants do not dispute the appropriateness of the
    said sale transaction taken as the basis for determination of
    compensation. Their grievance is that no deduction or cut
E   should have been effected in the price disclosed by the sale
    deed, for arriving at the market value, in view of the following
    factors: (i) that the acquired lands were near to the main Bye-
    pass Road and had road access on two sides; (ii) that many
    residential houses had already come up in the surrounding
F   areas, and the entire area was already fast developing; and (iii)
    that the acquired land had the potential to be used an urban
    residential area. When the value of a large extent of agricultural
    land has to be determined with reference to the price fetched
    by sale of a small residential plot, it is necessary to make an
    appropriate deduction towards the development cost, to arrive
G   at the value of the large tract of land. The deduction towards
    development cost may vary from 20% to 75% depending upon
    various factors (see : Lal Chand vs. Union of India - 2009 (15)
    SCC 769). Even if the acquired lands have situational
    advantages, the minimum deduction from the market value of
H   a small presidential plot, to arrive at the market value of a larger
      HARIDWAR DEVELOPMENT AUTHORITY v.                       207
      RAGHUBIR SINGH [R.V. RAVEENDRAN, J.]
agricultural land, is in the usual course, will be in the range of   A
20% to 25%. In this case, the Collector has himself adopted a
25% deduction which has been affirmed by the Reference Court
and High Court. We therefore do not propose to alter it.

     10. Only one grievance of the claimants remains to be
                                                                     8
addressed. The claimants pointed out that the relied upon sale
transaction is dated 19.12.1990, whereas the notification under
section 4(1) of the Act in this case was of 7.12.1991; and as
there is a gap of nearly one year, an appropriate increase in
the market value should have been provided keeping in view
the steady increase in prices. It is well settled that an increase   C
in market value by about 10% to 12% per year can be provided,
in regard to lands situated near urban areas having potential
for non-agricultural development. (See : Sardar Jogendra Singh
vs. State of UP - 2008 (17) SCC 133).
                                                                     D
     11. we gre therefore of the view that the value arrived at
by the Collector, and accepted by the Reference Court and the
High Court requires to be increased by 12% in view of the fact
that the preliminary notification was one year after the relied
upon sale transaction. Accordingly by increasing the value of        E
Rs.26/25 by 12%, we arrive at the market value as on
7.12.1991 as Rs.29/40, rounded off to Rs.29/50 per ~q.ft.

Re : Question (iii)

     12. The Authority points out that the Land Acquisition          F
Collector had awarded interest under section 34 of the Act, but
the Reference Court did not award any interest under section
28 of the Act. It is contended that when the Reference Court
chose not to award any interest, the High court erred in
awarding interest under section 28 of the Act, in addition to the    G
interest awarded by the Collector under section 34 of the Act.

      13. The collector awarded interest under section 34 of the
Act, on the compensation offered, at the rate of 9% per annum
for a period of one year from the date of taking possession and
                                                                     H
    208     SUPREME COURT REPORTS                  [2010] 2 S.C.R.


A· thereafter at the rate of 15% per annum. The reference court
   did not specifically award any interest, because it did not
   'increase' the market value, but merely reclassified the acquired
   land into two categories instead of three categories and ·
   adopted the first and second rates awarded by the collector for
B the two categories. However the High Court deleted the belting/
   categorisation and awarded a uniform rate of Rs.26.25 per sq.ft.
   Therefore, there was in fact an increase in the compensation
   awarded for lands which were earlier classified by the Collector
   as second and third belt lands. Therefore, interest under section
C 28 of the Act had to be granted. The scheme of the Act is that
   in regard to compensation amount, interest is payable at the
   rate of 9% per annum for a period of one year from the date of
   taking possession and thereafter at 15% per annum until
   deposit is made. In regard to the compensation that is offered
   by the Land Acquisition Collector, the interest is payable under
0
   section 34 of the Act. In regard to the increase in such
   compensation, which is awarded by the Reference Court or any
   appellate court, such interest is awarded under section 28 of
   the Act. Sections 34 a.nd 28 of the Act. do not duplicate the
   award of interest, but together cover the entire amount of
E compensation awarded. The award of interest on the enhanced
   amount under section 28 of the Act is the normal rule. The
   refusal of interest should be by assigning special or spe12ific
   reasons. The contention of the Authority that the High Cdtirt
   ought not to have awarded interest under section 28 is therefore
F untenable.
        14. In view of the above, the appeals filed by the Authority
  are dismissed. The appeals filed by the claimants - landowners
  are allowed and the compensation is increased from Rs.26.25
G per sq.ft. to Rs.29.50 per sq.ft. We reiterate that the claimants
  will be entitled to all tlie statutory benefits, that is additional
  amount under section 23(1A), solatium under section 23(2) and
  interest under section 28 of the Act. Parties to bear their
  respective costs.

H R.P.                                       Appeals disposed of.