S. SHANKARAIAH THR. GPA HOLDER & ORSversusTHE LAND ACQUISITION OFFICER AND REVENUE DIVISIONAL OFFICER PEDDAPALI KARIMNAGAR DIST. & ORS.

                          [2022] 10 S.C.R. 95                               95


        S. SHANKARAIAH THR. GPA HOLDER & ORS                                A
                                   v.
THE LAND ACQUISITION OFFICER AND REVENUE DIVISIONAL
    OFFICER PEDDAPALI KARIMNAGAR DIST. & ORS.
                   (Civil Appeal No. 6821 of 2022)                          B
                        NOVEMBER 09, 2022
          [M. R. SHAH AND KRISHNA MURARI, JJ.]
       Land Acquisition Act, 1894 – Purpose of acquisition of land
relevant factor for determining market value and deduction of
                                                                            C
developmental charges – Deduction of developmental charges, when
not proper – Lands acquired for excavation of coal – Land
Acquisition Officer fixed the market value for the acquired lands –
Not satisfied with the compensation, the original land owners/
claimants sought references – Reference Court fixed the market
value at Rs.30,000/- and Rs.50,000/- per acre with compensation             D
@ Rs.15,000/- per acre towards sub-soil mineral rights – High Court
awarded compensation @ Rs.80,000/- per acre considering the
market value of the land at Rs.1,23,000/- per acre and thereafter
deducting 1/3rd, in addition High Court also awarded Rs.10,000/-
per acre as part of the market value for sub-soil rights – On appeal,
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held: The purpose for which acquisition is made is also a relevant
factor for determining the market value and the purpose for which
the land is acquired must also be taken into consideration – In the
present case, when the acquisition is solely for the purpose of
excavation of coal and the entire land is acquired on the basis of
the estimates of the coal reserve identified and the entire land is to      F
be mined and used and no further developmental activity is required,
the High Court erred in deducting 1/3 rd towards developmental
activities – Further, additional amount of Rs.10,000/- per acre
awarded on account of coal deposits, not interfered with – Thus,
original claimants are entitled to the compensation for the lands
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acquired at Rs.1,23,000/- per acre with other statutory benefits which
may be available under the Act – In addition, also entitled to Rs.10,000/
- per acre as awarded by the High Court on account of coal deposits –
Impugned judgment modified to the aforesaid extent.

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                                   95
96            SUPREME COURT REPORTS                     [2022] 10 S.C.R.


A          Partly allowing the appeals, the Court
            HELD: The purpose for which acquisition is made is also a
     relevant factor for determining the market value and the purpose
     for which the land is acquired must also be taken into
     consideration. Thus, when the acquisition is solely for the purpose
B    of excavation of coal and the entire land is acquired on the basis
     of the estimates of the coal reserve identified and the entire land
     is to be mined and used and no further developmental activity is
     required, in the facts and circumstances of the case, the High
     Court has erred in deducting 1/3rd towards the developmental
     activities. The additional amount awarded by the High Court at
C    Rs.10,000/- per acre on account of coal deposits is not required
     to be interfered with more particularly when the same has been
     confirmed by this Court in as much as the appeals preferred by
     the respondents have been dismissed by this Court. The original
     claimants shall be entitled to the compensation for the lands
D    acquired at Rs.1,23,000/- per acre with other statutory benefits
     which may be available under the provisions of the Act, 1894. In
     addition, the original claimants shall also be entitled to
     Rs.10,000/- per acre as awarded by the High Court on account of
     coal deposits. The impugned common judgment and order passed
     by the High Court is modified to the aforesaid extent. [Paras 6.2,
E    6.3, 7 and 8][100-D; 101-C-E]
           Nelson Fernandes & Ors. v. Special Land Acquisition
           Officer South Goa & Ors. (2007) 9 SCC 447 : [2007]
           3 SCR 563 – relied on.

F          Basavva v. Spl. Land Acquisition Officer, (1996) 9 SCC
           640 : [1996] 3 SCR 500 – referred to.
                           Case Law Reference
     [2007] 3 SCR 563                  relied on               Para 3.1
     [1996] 3 SCR 500                  referred to             Para 6.2
G
           CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6821
     of 2022.
           From the Judgment and Order dated 06.12.2013 of the High Court
     of Judicature of Andhra Pradesh at Hyderabad in Appeal Suit No. 1634
H    of 2001 in O.P. No. 76 of 1988.
   S. SHANKARAIAH THR. GPA HOLDER v. THE LAND ACQUISITION                     97
         OFFICER AND RDO PEDDAPALI KARIMNAGAR DIST.


      With                                                                    A
      Civil Appeal Nos. 6823, 6824 and 6825 of 2022.
      A. Mariarputham, Sr. Adv., Sridhar Potaraju, Ms. Sindoora VNL,
Ms. Shiwani Tushir, Rajat Srivastava, P. Parmeswaran, Anurag Dayal
Mathur, Ms. Anuradha Arputham, Sharan Thakur, Shantanu Singh,
Siddharth Thakur, Ravi Sehgal, Dr. Sushil Balwada, S. Udaya Kumar             B
Sagar, P. Venkat Reddy, Prashant Kr. Tyagi, P. Srinivas Reddy for
M/s. Venkat Palwai Law Associates, Advs. for the appearing parties.
      The Judgment of the Court was delivered by
      M. R. SHAH, J.                                                          C
       1. Feeling aggrieved and dissatisfied with the impugned common
judgment and order dated 06.12.2013 passed by the High Court of Andhra
Pradesh at Hyderabad in respective first appeals No. 1634 of 2001 and
other allied appeals, the original land owners/claimants have preferred
the present appeals seeking enhancement of the amount of compensation         D
for the lands acquired.
       2. Large extent of land in different survey number in Adrial Village
of Manthani Mandal, Karimnagar District came to be acquired by the
State Government for the benefit of Singareni Collieries Company
Limited. The lands were acquired for the purposes of excavation of
                                                                              E
coal. Notification under Section 4(1) of the Land Acquisition Act, 1894
(hereinafter referred to as ‘the Act, 1894’) came to be issued on
13.05.1985. Declaration under Section 6 of the Act 1894 was issued on
31.07.1985. The Land Acquisition Officer passed the awards in the year
1987, fixing the market value for the acquired lands at Rs.7,000/- per
acre for Category 1 – Dry Lands under Cultivation and at Rs.6000/- per        F
acre for Category 2 – Dry Lands Left Fallow. Not satisfied with the
compensation awarded by the Land Acquisition Officer, the land owners
sought references under Section 18 of the Act, 1894. The land owners
claimed the compensation at Rs.2 lakhs per acre. The Reference Court
fixed the market value at Rs.30,000/- per acre and Rs.50,000/- per acre.
                                                                              G
The Reference Court also awarded the compensation @ Rs.15,000/-
per acre towards sub-soil mineral rights. By the impugned common
judgment and order the High Court has determined and awarded the
compensation @ Rs.80,000/- per acre considering the market value of
the land Rs.1,23,000/- per acre and thereafter deducting 1/3rd. The High
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98             SUPREME COURT REPORTS                           [2022] 10 S.C.R.


A    Court has also in addition awarded Rs.10,000/- per acre as part of the
     market value for sub-soil rights.
           2.1 Feeling aggrieved and dissatisfied with the impugned common
     judgment and order passed by the High Court determining and awarding
     the compensation at Rs.80,000/- per acre and Rs.10,000/- per acre for
B    sub-soil rights on account of the coal deposits, the original claimants –
     land owners have preferred the present appeals.
            2.2 At the outset, it is required to be noted that against the very
     impugned common judgment and order the beneficiary – Singareni
     Collieries Company Limited approached this Court by way of special
C    leave petitions which have been dismissed. The review applications are
     also dismissed. Therefore, the short question which is posed for
     consideration before this Court is whether the amount of compensation
     determined/awarded by the High Court is required to be enhanced in the
     appeals preferred by the original claimants/land owners?

D           3. Learned Counsel appearing on behalf of the appellants has
     submitted that while determining/awarding the compensation the Hon’ble
     High Court has not appreciated that the petitioners were the absolute
     owners of the land including the sub-soil minerals and were not merely
     tenure holders. It is submitted that therefore while determining the amount
     of compensation for the land acquired claim for sub-soil minerals rights
E    was also required to be considered. It is submitted that in the impugned
     judgment and order the Hon’ble High Court has also specifically given
     the findings that the nature of deposits existing on the surface or the
     sub-soil of a land would play an important role and if there are any
     deposits of rare minerals or precious stones, that would add to the market
F    value of the land. It is submitted that though the Hon’ble High Court has
     observed that it is not proper for the Land Acquisition Officer or the
     Civil Court to separately award the compensation towards sub-soil mineral
     rights, thereafter it is observed that it is permissible to take the fact or
     into account, while determining the market value.

G            3.1. It is further submitted by learned counsel appearing on behalf
     of the land owners/claimants that even otherwise the acquisition was
     solely for the purpose of excavation of the coal and there was no other
     purpose for the acquisition and the entire acquired land is being excavated
     on the basis of the estimates of the coal reserves identified therein, the
     Hon’ble High Court has erred in deducting 1/3rd towards the development.
H    It is submitted that since the entire land is to be mined, there is no wastage
  S. SHANKARAIAH THR. GPA HOLDER v. THE LAND ACQUISITION                    99
 OFFICER AND RDO PEDDAPALI KARIMNAGAR DIST. [M. R. SHAH, J.]


of land on account of any developmental activities, such as roads, sewage   A
lines, parks etc. which are required to be carved out in industrial/
commercial/housing layouts. It is submitted that therefore, the deduction
from the compensation determined may not be permissible in absence
of any justification for such deduction as the entire land is having coal
reserves. Reliance is placed upon the decision of this Court in the case
                                                                            B
of Nelson Fernandes & Ors. versus Special Land Acquisition
Officer South Goa & Ors. reported in (2007) 9 SCC 447.
      4. Shri A. Mariarputham, learned Senior Advocate appearing on
behalf of the respondents while opposing the present appeals has
submitted that the amount determined by the Hon’ble High Court which
includes Rs.10,000/- per acre towards the coal deposits, the same is not    C
required to be interfered with by this Hon’ble Court.
       4.1 Now so far as 1/3rd deduction made by the Hon’ble High
Court from Rs.1,23,000/- per acre it is submitted that as per the settled
position of law there shall be an appropriate deduction towards the
development and therefore 1/3rd deduction can be said to be just and        D
reasonable deduction towards the development, which is not required to
be interfered with.
      Making above submissions, it is prayed to dismiss the present
appeals by further submitting that as such the appeals preferred by the
respondents - Singareni Collieries Company Ltd. & Ors. have been            E
dismissed by this Court and the judgment and order passed by this Hon’ble
High Court has been confirmed by this Court.
       5. Heard learned counsel appearing on behalf of the respective
parties at length.
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       6. By the impugned common judgment and order the High Court
has determined and awarded Rs.80,000/- per acre. The High Court has
also granted/awarded Rs.10,000/- for sub-soil rights on account of coal
deposits. Feeling aggrieved and dissatisfied with the impugned common
judgment and order passed by the High Court, the original claimants/
land owners have preferred the present appeals seeking enhancement          G
of the amount of compensation.
      6.1 At the outset, it is required to be noted that so far as the
appeals preferred by the respondents - Singareni Collieries Company
Ltd. & Ors., the same have been dismissed by this Court.
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100             SUPREME COURT REPORTS                          [2022] 10 S.C.R.


A             6.2 While determining and awarding the compensation at
      Rs.80,000/- per acre the High Court has considered the market value of
      the land in question at Rs.1,23,000/-. However, thereafter has deducted
      1/3rd towards the development charges etc. and thereafter has awarded
      the actual amount of compensation at Rs.80,000/- per acre. It is the
      case on behalf of the claimants/land owners that the lands in question
B
      have been acquired for the benefit of the mining company/Singareni
      Collieries Company Ltd. which is to be used for excavation of coal. The
      coal is already existed in the lands acquired. Since the entire land is to be
      mined and the coal is to be excavated, there is no wastage of land on
      account of any developmental activities such as roads, sewage lines,
C     parks etc. In that view of the matter, there is no development required
      and therefore 1/3rd deduction is not warranted at all. Identical question
      came to be considered by this Court in the case of Nelson Fernandes
      (supra) and after taking into consideration the earlier decision of this
      Court in the case of Basavva vs. Spl. Land Acquisition Officer, (1996)
      9 SCC 640, in which this Court has held that the purpose for which
D
      acquisition is made is also a relevant factor for determining the market
      value and the purpose for which the land is acquired must also be taken
      into consideration, thereafter in paragraph 29 it is observed and held as
      under:
            “29. Both the Special Land Acquisition Officer, the District Judge
E           and of the High Court have failed to notice that the purpose of
            acquisition is for Railways and that the purpose is a relevant factor
            to be taken into consideration for fixing the compensation. In this
            context, we may usefully refer the judgment of this Court
            in Viluben Jhalejar Contractor v. State of Gujarat [(2005) 4
F           SCC 789 : JT (2005) 4 SC 282] . This Court held that the purpose
            for which the land is acquired must also be taken into consideration
            in fixing the market value and the deduction of development
            charges. In the above case, the lands were acquired because
            they were submerged under water of a dam. Owners claimed
            compensation of Rs 40 per sq ft. LAO awarded compensation
G           ranging from Rs 35 to Rs 60 per sq m. Reference Court fixed the
            market value of the land at Rs 200 per sq m and after deduction
            of development charges, determined the compensation @ Rs 134
            per sq m. In arriving at the compensation, Reference Court placed
            reliance on the comparative sale of a piece of land measuring
H           46.30 sq m @ Rs 270 per sq m. On appeal, the High Court awarded
   S. SHANKARAIAH THR. GPA HOLDER v. THE LAND ACQUISITION                        101
  OFFICER AND RDO PEDDAPALI KARIMNAGAR DIST. [M. R. SHAH, J.]


        compensation of Rs 180 per sq m in respect of large plots and            A
        Rs 200 per sq m in respect of smaller plots. On further appeal,
        this Court held that since the lands were acquired for being
        submerged in water of dam and had no potential value and the
        sale instance relied was a small plot measuring 46.30 sq m whereas
        the acquisition in the present case was in respect of large area,
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        interest of justice would be subserved by awarding compensation
        of Rs 160 per sq m in respect of larger plots and Rs 175 per sq m
        for smaller plots. In Basavva v. Spl. Land Acquisition Officer
        [(1996) 9 SCC 640 : JT (1996) 5 SC 580] this Court held that the
        purpose for which acquisition is made is also a relevant factor for
        determining the market value.”                                           C
        6.3. Applying the law laid down by this Court in the aforesaid
decision to the facts of the case on hand and when the acquisition is
solely for the purpose of excavation of coal and the entire land is acquired
on the basis of the estimates of the coal reserve identified and the entire
land is to be mined and used and no further developmental activity is            D
required, we are of the opinion that in the facts and circumstances of the
case, the High Court has erred in deducting 1/3 rd towards the
developmental activities. The additional amount awarded by the High
Court at Rs.10,000/- per acre on account of coal deposits is not required
to be interfered with more particularly when the same has been confirmed
by this Court in as much as the appeals preferred by the respondents             E
have been dismissed by this Court.
        7. In view of the above and for the reason stated above, present
appeals succeed in part. It is held that the original claimants shall be
entitled to the compensation for the lands acquired at Rs.1,23,000/- per
acre with other statutory benefits which may be available under the              F
provisions of the Act, 1894. In addition, the original claimants shall also
be entitled to Rs.10,000/- per acre as awarded by the High Court on
account of coal deposits.
        The impugned common judgment and order passed by the High
Court is hereby modified to the aforesaid extent.
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        Present appeals are partly allowed to the aforesaid extent.
However, in the facts and circumstances of the case there shall be no
order as to costs.

Divya Pandey                                           Appeals partly allowed.
(Assisted by : Roopanshi Virang, LCRA)                                           H