On 9th November 2022, the Supreme Court in a Division Bench comprising of Justice M.R. Shah and Justice Krishna Murari observed that 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. (S. Shankaraiah Thr. GPA Holder & Ors. Vs. The Land Acquisition Officer and Revenue Divisional Officer Peddapali Karimnagar Dist. & Ors.)
Facts of the Case:
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 for excavation of coal. Notification under Section 4(1) of the Land Acquisition Act, 1894 was issued on 13.05.1985 and 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 acre for Category 2 – Dry Lands Left Fallow. Not satisfied by the same, 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. 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 Court has also in addition awarded Rs.10,000/- per acre as part of the market value for sub-soil rights. Feeling aggrieved by the order HC determining compensation at Rs.80,000/- per acre and Rs.10,000/- per acre for sub-soil rights on account of the coal deposits, present appeal was filed by the land owners. The beneficiary also filed SLP’s and review applications which were dismissed.
Contentions of the Appellants:
The counsel for the appellants submitted that “the HC while determining compensation has not appreciated that the petitioners were the absolute owners of the land including the sub-soil minerals and were not merely tenure holders. The HC 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 value of the land.
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. Since entire land is to be mined, there is no wastage of land on account of and developmental activities, such as roads, sewage lines, parks etc. which are required to be carved out in industrial/commercial/housing layouts. 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.” The case of Nelson Fernandes & Ors. Vs. Special Land Acquisition Officer South Goa & Ors. was relied upon.
Contentions of the Respondents:
The counsel for the respondents 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 required to be interfered with by this Hon’ble Court. 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 reasonable deduction towards the development, which is not required to be interfered with.”
Observations and Judgment of the Court:
The hon’ble court observed that “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, parks etc. In that view of the matter, there is no development required and therefore 1/3rd deduction is not warranted at all. 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 required, we are of the opinion that in the facts and circumstances of the case, the High Court has erred in deducting 1/3rd towards the developmental activities.
The 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 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.” Hence, the appeal was partly allowed.
Case: S. Shankaraiah Thr. GPA Holder & Ors. Vs. The Land Acquisition Officer and Revenue Divisional Officer Peddapali Karimnagar Dist. & Ors.
Citation: Civil Appeal No. 6821 Of 2022 With Civil Appeal No. 6823 Of 202, Civil Appeal No. 6824 Of 2022, And Civil Appeal No. 6825 Of 2022
Bench: Justice M.R. Shah and Justice Krishna Murari
Date: November 09, 2022.
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