1. This is a reference under section 18, Land Acquisition Act, 1894 (hereinafter referred to as 'the said Act') for the determination of compensation in respect of acquisition of certain lands situated at village Borla, in Kurla, Bombay.
2. The proceedings arise out of the acquisition of a large area of land admeasuring 30 acres 34 gunthas and 4 annas, equivalent to 1,49,344.25 sq. Yards, situated at village Borla in Kurla. Three notifications under section 4 of the said Act declaring the intention to acquire the said lands, were published on 27-11-1958. On 14-10-1960 , an agreement was arrived at between the claimants and the Bombay municipal corporation, being the acquiring body, for whose purposes the aforesaid lands were being acquired under the said Act. The said agreement was arrived at between the claimants as representing their families including certain minors and the Bombay municipal corporation as well as a confirming party. The recitals to the said agreement show that the Improvements committee of the said corporation by its resolutions, dated 8th sept., 1950 and 22nd Dec., 1959 respectively had sanctioned, inter alia, the acquisition of certain lands situated at Borla village, admeasuring about 50 acres and 33 1/4 gunthas i,e, 2,44,813.25 sq. Yards described in the first and second schedules thereto and the said lands were notified under sec. 4 of the said Act for acquisition under notification published in the Bombay Government Gazette (part) dated 27th Nov., 1958. The recitals further show that by the said resolutions, the Improvements committee and the corporation had also agreed to purchase the land situated at Borla village admeasuring 5 acres and 39 gunthas i,e, 28,919 sq. Yds. Or thereabouts which also delineated on a plan annexed to the said agreement. There is a further recital in the agreement which runs as follows :
'And whereas the corporation pursuant to the said resolutions proposed to acquire the said and belonging to the owners at the value of Rs. 4.25 per sq. Yard inclusive of all interests in the land.'
As far as the clauses of the agreement are concerned, clause No.1 records the consent of the owners and the consent of the corporation to the acquisition of land admeasuring 50 acres and 23 gunthas which has been delineated on a plan annexed to the agreement and that the confirming party has confirmed such acquisition. Clause 2 runs as follows :
'It has been agreed between the parties that for the purpose aforesaid the market value of the said property including all interest therein shall be computed at the rate of 4.25 per sq. Yard for the said piece of land under the terms and provisions of the Land Acquisition Act. No extra compensation will be given under the Act for timber or firewood or wells and parties will request the special Land Acquisition officer to pass an award as per the terms and provisions of the Land Acquisition Act for the compensation of the acquisition of the said land as hereinbefore mentioned for the actual area of the land ascertained by a joint survey, ....... ...............'
The rest of the clause is not material for the purpose of this reference. Clause 3 shows that the owners agreed to sell and the corporation agreed to purchase pieces of land admeasuring 5 acres and 39 gunthas which have been there, particularly described in the third and fourth schedules to the agreement at and for the price of Rs.4.25 per sq. Yard. Rest of t he clauses are not material. The possession of the notified land was taken on the same day, namely, 14th oct., 1960. Thereafter, sec. 6 notification was issued and an award was made and declared on 5th Dec., 1970 in respect of the acquired land. The award makes somewhat interesting reading. In dealing with sales of lands between 1957 and 1959, the Land Acquisition officer has pointed out that , in the background which he has referred to, only certain sales which are of the adjoining lands to the lands under acquisition need comparison and the price under these sales ranges from Rs. 5 to 6.60 ps. He has then stated that, taking into account all relevant aspects, the reasonable market value of the lands acquired would be Rs. 5.50 per sq. Yard. He has further stated that the value as agreed upon will have, however, to be paid i,e, Rs. 4.25 per sq. Yard. As far as the question of solatium, which is the only matter regarding which there is controversy in this reference, is concerned, the Land Acquisition officer has stated as follows :
'The owners have claimed 15% solution on the amount which may be awarded to them on the basis of agreed rate between them and the Bombay municipal corporation. It appears that the rate agreed top is inclusive of 15% solatium and, therefore, no solatium can be allowed on the agreed rate i,e, Rs. 4.25 per sq. Yard. This rate is inclusive. Of 15% solatium.'
The special Land Acquisition officer, on the basis of this conclusion, rejected the claim of the claimants for solatium on the amount awarded to them. It may be mentioned here that the total compensation awarded by the special Land Acquisition officer was Rupees 6,34,713.10 ps. Exclusive of solatium, regarding which the claim of the claimants was negatived as aforesaid.
3. In the reference before me, the only claim made by the claimants is that in addition to the compensation which has been awarded to them, they are entitled to the solatium at 15% as provided under sub-section (2) of S. 23 of the said Act. It was urged by Mr. Bhat that the agreement between the claimants and the acquiring body, namely, the Bombay municipal corporation, only pertained to what was the fair market value of the land acquired and in addition to the said market value, the special Land Acquisition officer was bound to award solatium to the claimants at the statutory rate of 15%. It was submitted by him in the alternative, that the aforesaid agreement could not, in law, be regarded as binding on the special land Acqusition officer in fixing the compensation for the land acquired and it could, at best, only furnish good evidence as to what was the market value of the said land. It is submitted by Mr. Bhat that the agreement showed that the fair market value was Rs. 4.25 per sq. Yard and in addition to this, the special Land Acquisition officer was bound to award solatium at 15%. It was, on the other hand, contended by Mr. Kanuga, the learned Government pleader that under the agreement, the claimants had given up their claim for solatium and agreed to accept Rs. 4.25 per sq. Yard as the compensation for the acquisition of the said land, and in view of this , the special Land Acquisition officer was justified in awarding the compensation to them only at the rate of Rs. 4.25 per sq. Yard and rejecting the claim of the claimants to solatium. In order to appreciate these contentions, certain provisions of the Act and certain decisions have to be taken note of .Section 4 of the said Act deals with the publication of a notification declaring that the land in any locality is needed or is likely to be needed for any public purpose. Section 6 deals with the declaration of intended acquisition. Section 11 deals with the making of an award and provides for the inquiry into the measurements, value and claims and award by the collector. Section 23 deals with the matters to be taken into consideration in the determination of compensation by the collector. A perusal of clause 1 of sub-section (1) of S. 23 shows that the market value of the land at the date of the publication of the notification under sec. 4, sub-section (1) is one of the factors which goes into the determination of the compensation payable to the claimants, whose land has been acquired. Sub-section (2) of section 23 runs as follows :
In addition to the market value of the land as above provided the court shall in every case award a sum of fifteen per cent on such market value in consideration of the compulsory nature of the acquisition.'
4. In M. Samiullah v. Collector of Alligarh , the judicial committee of the privy council held that the Land Acquisition officer, in awarding the amount of compensation under S. 11 is performing a statutory duty, a duty the exercise of which in cases where land is to be acquired for a public purpose, concerns the public, since it affects the expenditure of public money. In assessing compensation, he is bound to exercise his own judgment as to the correct basis of valuation and his judgment cannot be controlled by an agreement between the parties interested. This principle laid down by the privy council has been cited with approval by the supreme court in Mathura prosad v. State of west Bengal, : AIR1971SC465 (see para 18 of the report) The supreme court, in this decision, after approving the aforesaid principle, has held that an agreement formally reached between the acquiring authority and the claimant agreeing to a certain amount to be paid as compensation for the land acquired is good evidence of the market value of the land. The correct position would thus be that an agreement such as the one before me, although it cannot be regarded as binding upon the Land Acquisition officer in determining the compensation for the land acquired, can be regarded as good evidence of the market value of the land acquired at the relevant time.
5. I next come to the case of surendra Nath v. State of Bihar, AIR 1962 pat 406, one Indian Alluminium production company on 20-2-1944, entered into an agreement with the claimants to purchase several acres of land in the Ranchi District. The interest of that company passed to the Indian Alluminium company which repudiated the agreement and requested the Government for the acquisition of the said land.
A notification under S. 4 of the said Act was issued in August 1944 and the land ultimately was acquired. It was held by a Division Bench of the patna High court that the prior private agreement, in respect of the land proposed to be acquired, between the parties, should carry more weight in determining the market value of the land under section 23 of the said Act than a value calculated somewhat arbitrarily on the basis of the deeds of transfer in respect of pieces of land which show highly varying sale rates. The Division Bench further held that the court is bound to allow the statuary compensation of fifteen per cent on the market value of the land under S. 23(2) of the l.A. Act, in consideration of the compulsory nature of the acquisition.
6. Keeping in mind the principles laid down in the aforesaid decisions, it appears to me quite clear that the spl. Land Acquisition officer has definitely proceeded on an unwarranted basis in determining the compensation in respect of the acquisition of the land in question. It seems to be the settled legal position that an agreement, such as the one before, me although it furnishes good evidence of the market value of the said land, should not be regarded as binding on the special Land Acquisition officer in the determination of the market value. Curiously enough, in the present case, notwithstanding the said agreement, the special Land Acquisition officer has considered other sale instances and held that, taking into account all relevant aspects, the reasonable market value of the said land would be Rs. 5.50 per sq. Yard; but, thereafter, he went on to hold that the value as agreed would have to be paid, namely, Rs. 4.25 per sq. Yd. It may be pointed out that once he came to the conclusion that the market value of the said land was Rs. 5.50 per sq. Yard, one fails to see how he could then hold that the value which would have to be paid was Rs. 4.25 per sq. Yard. The award is, therefore, clearly erroneous. However, in the present case, the dispute is very narrow, because the claimants have not claimed any highest value claimants have not claimed any higher value than Rs. 4.25per sq. Yard in respect of the land in question , but merely claimed 15% solarium on the amount awarded to them. The question then is that, even if the agreement is to be regarded as best evidence of the market value of the land, what is market value as stated in the said agreement. In this connection, clause 2, the material portion of which I have already set out earlier, clearly shows that the market value of the aside land including all interests therein has been computed at Rs. 4.25 per sq. Yard. It is true that in the earlier recitals to which I have referred to Rs. 4.25 per sq. Yard has been stated to be the value of the said land inclusive of all interests. Specific provisions of clause 2 of the said agreement leave no doubt that the value which was referred to in the recitals was intended to be 'the market value inclusive of all interests in the said land'. It is beyond dispute that a claim to solatium cannot be regarded as an interest in the land at all. In view of this, the submission of Mr. Kanuga that the figure of Rs. 4.25 per sq. Yard included solatium, must be rejected. If that were intended, there was no reason to use the expression 'market value' in clause 2 of the said agreement, which deals with the question of price. It could easily have been said that the compensation would be computed in respect of the said land at Rs. 4.25 per sq. Yard or it could have been made clear that by the term 'market value', what was meant was the market value inclusive of the claim to solatium. No such thing has been done in the present agreement. Hence the term 'market value' can be regarded as no more than the fair market value exclusive of solatium. It was next contended by Mr.Kanuga that under the agreement the claimants have waived their claim to solatium and hence they are not entitled to claim the same in this reference. In my view, this contention also must fail. As I have already pointed out, there is nothing in the agreement to show that the question of solatium was one of the items dealt with in the agreement at all. There is nothing, in view, in the said agreement which, on a correct construction thereof, can amount to giving up or waiving the claim of solatium.
7. In the result the claimants succeed in the reference. It is common ground that the figure payable to the claimants by way of solatium would be Rs. 95, 667/- if they are held entitled to solatium.
8. There will, therefore, be an order directing the special Land Acquisition officer to pay to the claimants a sum of Rs. 95, 667/- as solatium.
9. The next question which has to be considered is whether the claimants are entitled to interest at 4 per cent per annum as claimed by them and from what date. Section 34 of the said Act states that interest is to be awarded at 4 per cent per annum from the time of taking possession of the land aquired, until it shall have been so paid or deposited. In the present case, the possession was handed over by the claimants to the Bombay municipal corporation even before the award was made. It is not in dispute before me that, normally speaking, possession would would have been taken by the special Land Acquisition officer only after the award was made. The taking of possession referred to in sec. 23 must be construed as he taking of possession by the authorities refereed to therein. In these circumstances, I direct the special Land Acquisition officer to pay to the claimants the interest at 4 per cent per annum on the amount of solatium from 5-12-1970. Being the date of the award, until payment or realisation whichever is earlier.
10. The special Land Acquisition officer to pay to the claimants costs of the reference. The fees of the claimants' advocates to be calculated in accordance with R. 606 of the High Court Rules (Original side) irrespective of any work which might have been done in the reference prior to 1st Jan., 1977. Costs to be on the basis of one advocate.
11. Order accordingly.