TMI Blog2015 (7) TMI 1354X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Sections 11, 18 and 30 of the L.A. Act would clearly mandate that both the state government and the KIADB are liable, jointly or severally, to pay the compensation to the owners or interested persons of the acquired land. The market value of the acquired land is required to be determined by the Reference Court by applying the provisions of Section 18 of the L.A. Act, after passing an award as provided Under Section 11 and notifying the same to the landowners or interested persons Under Section 12(2) of the L.A. Act if the owners are not satisfied with either the compensation awarded by the Deputy Commissioner or with regard to the area of acquisition of land. The land acquired shall be disposed off by the KIADB by inviting applications from the eligible applicants, notifying the availability of land, prescribing the manner of such disposal and fixing the last date for submitting applications and giving such particulars as it may consider absolutely necessary by publishing it in the newspapers having wide circulation in and outside the state of Karnataka - From a careful reading of the clauses of the lease agreement along with the provision Section 32(2) of the KIAD Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on agricultural and commercial purpose - Further, the land which has been covered under notification in 1988 is also adjacent to the residential sites which were formed. The land owners in that case produced the sale deeds of the year 1986 and 1988 respectively, which was 2 years and 2 months earlier respectively to the notification issued in the year 1988 and some of which were two to three years earlier. Considering the fact that acquisition of the land was made in the year 1981, it would be just and proper to fix the compensation calculated at ₹ 1,92,000/- per acre, with all statutory benefits such as solatium at 30% as provided Under Section 23(2) and statutorily payable interest Under Sections 23(1-A) and 28 of the L.A. Act, from the date of taking possession of the land till the date of payment. The Appellants are also entitled to costs throughout as provided Under Section 27 of the L.A. Act - The Respondents are directed to pay the compensation to the Appellants-landowners as directed above, within eight weeks from the date of the receipt of the copy of this judgment and award after proper computation in the above terms. Appeal disposed off. - Civil Appeal No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and reasonable compensation, after having lost their land in the acquisition proceedings at the instance of the Karnataka Industrial Areas Development Board (in short 'KIADB') which was their only source of income and livelihood, which right to livelihood is a fundamental right guaranteed Under Article 21 of the Constitution of India as held by this Court Constitution Bench in the case of Olga Tellis and Ors. v. Bombay Municipal Corporation and Ors. (1985) 3 SCC 545. The matter has been pending before the courts for more than three decades. The Appellant-landowners have been crying for justice for enforcement of their legitimate right of getting just and reasonable compensation under the Land Acquisition Act, 1894 (for short the L.A. Act ). The land in the instant case has been acquired by the State Government of Karnataka in exercise of its power of eminent domain Under Section 28 of the Karnataka Industrial Areas Development Act, 1966 (in short 'the KIAD Act') at the instance of KIADB. The said acquisition of land had been done by the State Government for the purpose of establishment of industries in the land vide notifications Under Section 28(1) and 28(4) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the same in favour of the Company as per the provisions of the KIAD Act and relevant provisions of the Karnataka Industrial Areas Development Board Regulations, 1969 (hereinafter the KIADB Regulations ). The Appellants received the compensation under protest and made an application on 20.06.1982 to the Special Deputy Commissioner to make reference of the award to the Reference Court for enhancement of compensation Under Section 18(1) of the L.A. Act. The reference application filed by the Appellants before the Deputy Commissioner Under Section 18(3) of the Act dated 12.4.1991 was numbered as Misc. Petition No. 101 of 1991. The Special Deputy Commissioner, vide supplementary awards dated 30.12.1992 and 02.01.1993 granted solatium at the rate of 30% in view of the provisions under the Land Acquisition (Amendment) Act (No. 68 of 1984). The reference papers were sent by the Land Acquisition Officer to Principal Civil Judge (Sr. Divn.), Gulbarga, was registered as LAC No. 943 of 1997. The learned judge refused to condone the delay of the application filed by the Appellants Under Section 18(3) of the L.A. Act on the ground that the date of first application had been interpolated. A C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n part and enhanced the compensation awarded initially from ₹ 1,700/- per acre of land to ₹ 1,37,000/- per acre of land after re-determination of the market value of the land and awarded the other statutory benefits payable to the owners under the provisions of the L.A. Act vide order dated 29.09.2012 passed in LAC No. 943 of 1997. 12. Aggrieved by the said judgment and order of Reference Court passed in LAC No. 943 of 1997, the Appellants preferred MFA No. 32157 of 2012 before the Karnataka High Court, Gulbarga Bench. The State Government, through KIADB belatedly preferred MFA 30702 of 2013 before the High Court after the dismissal of the above Miscellaneous appeal of the Appellants seeking for enhancement. The learned single Judge of the High Court held that the Reference Court while fixing the market value of the acquired land had taken into consideration the fact that it has got the Non-Agricultural (NA) potential and had also deducted charges towards the waiting period as well as development charges at the rate of 30% and had re-determined the market value of the acquired land at ₹ 1,37,000/- per acre. Therefore, the learned single Judge of the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n proceedings in the case were pending as on 30.04.1982 in respect of the lands as no award had been passed by the Special Deputy Commissioner on or before 30.04.1982. The learned single judge further held that the Special Deputy Commissioner was justified in passing a supplementary award, awarding benefits under the above said provisions of the L.A. Act. Hence, it was concluded by the learned single judge that the Company cannot have any grievance as against the supplementary awards and dismissed the Writ Petition. 16. Being aggrieved, the Company filed Writ Appeal No. 4321 of 1998 before the Division Bench of the Karnataka High Court for setting aside the order of dismissal dated 17.06.1998 passed in the writ petition by the learned single judge. The learned Division Bench allowed the appeal of the Company and set aside the supplementary awards dated 30.12.1992 and 02.01.1993 of the Special Deputy Commissioner by judgment and order dated 29.05.2000 holding that since the Appellants had entered into an agreement with the State Government and KIADB as well as the Company as regards the compensation, the initial award had attained finality and thus, the Special Deputy Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the case of Ballarpur Industries Ltd. and KIADB v. Civil Judge (ILR) 1987 KAR 3445 in support of the contention that the lessee/allottee need not be a party to the proceedings either before the Land Acquisition Collector or before the Reference Court as provided Under Section 20(c) of the L.A. Act, 1894. 19. Referring to the Review Petition and the appeal filed by the State of Karnataka, represented by KIADB before the High Court, it is further contended by the learned senior Counsel on behalf of the Appellants that at the relevant point of time when the matter was decided in MFA of the Appellant/owners by the High Court at the instance of the land owners, no appeal was filed by the KIADB questioning the correctness of the re-determination of the market value of the acquired land and the award passed by the Reference Court, which has been confirmed by the High Court holding that the market value of the land of the owners at ₹ 1,37,000 per acre. The same could not have been interfered with by the High Court in the writ petition as the Company is not entitled to challenge the award by filing writ petition. The belated MFA filed by the KIADB was rightly dismissed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of allotment and lease deed executed by it when the law on this aspect is clear with regard to the right of the Company as it is an allottee and therefore, the Writ Petition filed by it questioning the correctness of award passed by the Reference Court is not maintainable in law and the order of remand passed by the High Court in exercise of its extraordinary, discretionary and supervisory jurisdiction Under Articles 226 and 227 of the Constitution of India, is void ab initio in law as the Writ Petition proceedings before the High Court are not at all maintainable in law. Further, the order of remand passed by the High Court without even deciding the legal right of the Company which was claimed by it stating that it is a beneficiary even though it is admittedly a lessee of the acquired land, which was allotted in its favour by the KIADB on the market value of the acquired land as per the provisions of the KIAD Act and Regulations. The letter dated 07.04.1982 relied upon by the state government clearly shows that the KIADB had intimated the Indian Rayon Corporation Ltd., that the land to an approximate extent of 971.07 acres has been decided to be allotted in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cations issued by the state government Under Sections 28(1) 28(4) of the KIAD Act would clearly show that the land is acquired by the state government not in favour of any particular Company but for KIADB for establishing industries in the industrial area as notified by the state government Under Section 3 of the KIAD Act. Therefore, there is no specific role of the Company to take part in the proceedings either before the Land Acquisition Officer or the Reference Court for the purpose of determining just and reasonable compensation of the land payable to the land owners. 23. Further, the learned senior Counsel has vehemently contended that the High Court committed an error in law by applying the law laid down by this Court in the case of DDA v. Bhola Nath Sharma (2011) 2 SCC 54, to the facts of the case on hand. In that case, the acquisition of the land covered was at the instance of the DDA, and the DDA was asked to pay the compensation amount determined in respect of the acquisition of the land in favour of the Respondent-landowners therein. In the facts of the present case, the acquisition of land was not at the instance of the Company but at the instance of the KIADB whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf of the Respondents-KIADB contended that the High Court having set aside the award passed by the Reference Court on the ground that the Company has claimed to be the beneficiary of the acquired land is neither a party in the reference proceedings nor heard and therefore, the Reference Court must decide the matter afresh as directed by the High Court in the order of remand passed by it with regard to the compensation of the acquired land to be awarded after hearing all the interested parties including the Company. Further, it is urged that the High Court has erred in holding that compensation awarded by the Reference Court in favour of the land owners is just and proper. 27. It is further contended by the learned senior Counsel on behalf of the Respondents that the Reference Court has not taken into account and considered the sales statistics of the similar lands during the relevant period to that of acquired land which were produced at the time of re-determination of the market value of the land. The High Court has erred in not noticing the fact that the amount of compensation awarded by the Reference Court is 1000 times more than the value indicated in the sales statistics. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that any land should be acquired for the purpose specified in the notification issued Under Section 28(1) of the KIAD Act, and after such orders passed by the State government as per Section 28(3) of the KIAD Act are passed, the state government shall issue the declaration notification in the official Gazette to that effect as per Section 28(4) of the KIAD Act declaring the land mentioned in the notification Under Section 28(1) of the Act to be acquired in favour of the KIADB for the purpose of industrial development by it. 31. As can be seen from the facts of the case on hand, in the notification Under Section 28(1) of the KIAD Act, the purpose specified by the State Government for acquisition of the land of the Appellants and other land owners is for establishment of industries by the KIADB. Further, it should also be remembered that in terms of the Act, the ownership of the land after acquisition by publication of the notification Under Section 28(4) of the KIAD Act shall absolutely vest in the State Government Under Section 28(5) of the Act and the same will be free from all encumbrances. 32. The State Government thereafter may by issuing notice in writing, order any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o frame Rules after previous publication by way of notification. 35. Further, Section 41 of the KIAD Act confers power upon the KIADB by notification to make Regulations consistent with the Act and the rules made thereunder to carry out the purposes of the Act with the previous approval of the State Government. Section 41(2)(b) of the KIAD Act is most relevant for the purpose of this case, which states that the KIADB can frame Regulations laying down the terms and conditions under which it may dispose of the land acquired in its favour by the State Government under the provisions of Section 28(1) and (4) of the KIAD Act. 36. Further, it is also important in this case to refer to the relevant provisions under the KIADB Regulations. Regulation 4 under Chapter II of the KIADB Regulations prescribes the form of application to be filed and submitted by the applicant for the allotment of land or shed in an Industrial Area. It also provides that the application shall be made to the Executive Member of the KIADB in the prescribed form (Form-I) obtained from it in duplicate along with an earnest money. This proviso was inserted by notification dated 13.09.2002, w.e.f. 03.10.2002. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the KIADB to grant extension of time for complying with the terms of the notice issued Under Regulation 10(c) with or without payment of interest at nine per cent on the sums payable to the KIADB in terms of the said notice for the extended period. 41. The aforesaid provisions of the KIAD Act and KIADB Regulations make it abundantly clear that the acquisition of the agricultural land in the notified Industrial Area vide notifications issued Under Section 28(1) and (4) of the KIAD Act, empowers the State Government to acquire the land for the purpose of industrial development by the KIADB after the acquired land possession is transferred in its favour by the State Government. 42. Sections 29 and 30 of the KIAD Act read with Sections 11, 18 and 30 of the L.A. Act would clearly mandate that both the state government and the KIADB are liable, jointly or severally, to pay the compensation to the owners or interested persons of the acquired land. The market value of the acquired land is required to be determined by the Reference Court by applying the provisions of Section 18 of the L.A. Act, after passing an award as provided Under Section 11 and notifying the same to the landow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of land known as Sy. Nos. 306, Sy. Nos. 306/9/1, 306/10/J of Malkhed (J) village Sedam Taluk and Sy. Nos. 323/1, 324/1, 325/1 of Diggaon village Chittapur Taluk District Gulbarga containing by admeasurements 27 acres 21 Guntas or thereabouts and more fully described in the first schedule hereunder written and delineated on the plan annexed hereto and thereon surrounded by a red colour boundary line together with the buildings and erections now or at any time hereafter standing and being thereon and together with all rights, easements and appurtenances thereto belonging except and reserving unto the lessor all mines and minerals in and under the said land, or any, part thereof to hold the land and premises hereinbefore expressed to be there by demised (hereinafter referred to as the 'demised premises') unto the lessee for the terms of 21 years computed the 31st day of March, 2005 unless the lease is determined earlier Under Clause - 4 hereof PAYING therefore yearly, during the said term unto the lessor at the office of the Executive Member or as otherwise required the yearly rent of Rule 100/- the said rent to be paid over a period of 21 years without any deductions whatso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly clear that the said agreement is executed by the KIADB in favour of the Company after allotment of land was made in favour of the Company as provided Under Regulation 10(a) and (c) of the KIADB Regulations respectively by following the procedure of inviting applications and submission of the applications by the interested parties along with the required deposits towards the cost of the land. Further, Clauses 5(a) and (b) of the lease agreement referred to supra, would clearly state that the premium indicated in Clause (1) of the lease agreement represents the tentative cost of the land and in the event of the lessor incurring payment of amounts to the land owners over and above the awards made by the acquiring authority by virtue of the award passed by the competent court of law or in view of the provisions of the L.A. Act in respect of demised premises or any part thereof, the same shall be met by the lessee within one month from the date of receipt of the communication signed by the Executive Member or any other officer authorised by the lessor. Clause 5(b) also makes similar provision to that effect between the lessor and the lessee. 48. From a careful reading of the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove conditions of the lease agreement, neither the KIADB nor the Company can contend that the acquisition of the land involved in these proceedings is in favour of the lessee Company. Therefore, the Company is neither a beneficiary nor an interested person as claimed by them in terms of Section 2(11) of the KIAD Act or Under Section 3(b) of the L.A. Act as per which, person interested includes all persons claiming an interest in compensation to be made on account of the acquisition of land under the KIAD Act and that a person shall be deemed to be interested in the land if he is interested in an easement affecting the land. It is necessary to examine Section 3(b) read with Section 9 of the L.A. Act, which deals with notice to persons interested and Section 11, which deals with enquiry and award to be passed by the Deputy Commissioner/Land Acquisition Officer. 51. A careful reading of the aforesaid provisions of the L.A. Act, KIAD Act and the KIADB Regulations would clearly go to show that the Company is neither a beneficiary, nor an interested person in the land as on the date of acquisition of the land, as the land was acquired by the state government in favour of KIADB who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Estate' have been clearly defined Under Sub-sections (5), (6) and (7) of Section 2 of the KIAD Act which reads thus: (5) Development with its grammatical variations means the carrying out of levelling, digging, building, engineering, quarrying or other operations in, on, over or under land, or the making of any material change in any building or land, and includes re-development; and 'to develop' shall be construed accordingly; (6) Industrial area means any area declared to be an industrial area by the State Government by notification which is to be developed and where industries are to be accommodated; and industrial infrastructure facilities and amenities are to be provided and includes an industrial estate; (7) Industrial estate means any site selected by the State Government where factories and other buildings are built for use by any industries or class of industries. 56. Reliance has also been placed by the learned senior Counsel upon Sections 3(b), 9 and 20(b) of the L.A. Act, which provisions deal with service of notice to all persons interested in the possession of the acquired land except such (if any) of them as have consented without protest to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the learned senior Counsel on behalf of the KIADB and the Company, is misplaced as none of the said judgments relied upon are applicable to the fact situation in the present case for the reason that those cases dealt with reference to the acquisition of land under the provisions of the L.A. Act, either in favour of the Company or Development Authorities, whereas in the case on hand, the acquisition proceedings have been initiated under the KIAD Act for industrial development by the KIADB. Further the original acquisition record in respect of the acquired land involved in the proceedings by the learned standing counsel on behalf of the State of Karnataka as per our directions issued vide our orders dated 17.11.2014 and 24.3.2015, do not disclose the fact that the acquisition of lands covered in the acquisition notifications are in favour of the Company. Thus, the acquisition of land in favour of the KIADB is abundantly clear from the preliminary and final notifications issued by the state government and thereafter following the procedure Under Sub-sections (6) and (7) of Section 28 of the KIAD Act, it took possession of the acquired land from the owners who were in possession o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the appeals of the owners. 60. Further, the learned single Judge of the High Court has further committed an error in law in not appreciating Section 54 of the L.A. Act, which provision provides the right to appeal to the land owners, or state government and beneficiaries of the acquired land but not to the Company which is the lessee. When the company does not have the right to file an appeal against the award it also has no right to file a writ petition. The KIADB has filed the belated appeal after disposal of the appeal filed by the Appellants by the High Court and against which award it has filed the present appeal questioning the correctness of the same and prayed for enhancement of compensation and the said appeal is being disposed of by this common judgment after adverting to the rival legal contentions urged on behalf of the parties. The High Court has rightly dismissed the belated appeal filed by the KIADB. 61. Therefore, the appeal filed by KIADB questioning the order of remand passed in the Writ Petition and Review Petition is liable to be set aside. The appeal has been filed by the KIADB as it is aggrieved of the findings and certain observation recorded against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the said sale-deeds referred to above were sold two to three years earlier. The High Court held that taking the average of the prices of different sites situated at different places and sold at different points of time is not permissible in law. The High Court took the value of the plot as would be the most beneficial to the claimant which was ₹ 7.5/- per sq. ft for land carved out of Sy. No. 389 and at ₹ 13/- per sq. ft for the land carved out of Sy. No. 414/2. The High Court enhanced the compensation accordingly, after deduction of 10% towards escalation charges. The Reference Court in the present case after taking the aforesaid criteria of developmental charges, de-escalation charges and waiting period charges, awarded the compensation at ₹ 7.5/- per sq. ft. in relation to the land of the Appellants in the present case. The compensation was fixed at ₹ 7.5 x 43,560 sq. ft. which came to ₹ 3,26,700/- after giving the necessary deduction towards developmental charges was made at the rate of 25% and 5% towards waiting period and expenses for conversion i.e. 30%, which came to ₹ 98,000/- deducted from ₹ 3,26,700/-. This was determined as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . No. 414/2, by relying on the village map. Hence, it is contended by the learned Solicitor General that the same could not have been taken by the Reference Court as the criteria to re-determine the market value of the land of the Appellants in the award passed in respect of the land covered in the notification of 1988. Therefore, it is submitted that the enhancement of compensation sought by the Appellants is without any basis, hence they are not entitled for the same and prayed for the dismissal of the appeal. 67. It is further contended by the learned senior Counsel on behalf of the KIADB that on the basis of the sale statistics, the sale deeds produced in this appeal along with counter statements after collecting the same from the Sub-Registrar's office in relation to the lands which are sold nearby to the acquired land should be applied for the purpose of re-determination of the market value of the acquired land. It is contended that if the said sale-deeds are taken into consideration, the Appellants are not even entitled to the compensation of ₹ 1,37,000/- awarded by the Reference Court, which award is affirmed in the MFA filed by the Appellant landowners. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ₹ 7.5/- per sq. ft of land bearing Sy. No. 389 covered in award passed in MFA No. 3796 of 2005 and Cross Objection No. 213 of 2005 after giving deduction towards the developmental charges, de-escalation and conversion charges. The same method should be applied in the case on hand. 72. Further, the High Court ought to have taken into consideration the relevant fact that though the final notification for the land covered in MFA No. 3796 of 2005 and Cross Objection No. 213 of 2005 was in the year 1988, it was for the industrial development and the said land was also leased in favour of the allottee Company by the KIADB to be used for the industrial development. The land along with the other lands covered in 1981 notification was also acquired by the State Government for the purpose of the industrial development and allotted to the Company for the development of the industrial estate. Therefore, apart from the fact that there was a gap of 7 years in which the lands of the Appellants were notified for acquisition to the land covered in MFA No. 3796 of 2005 and Cross Objection No. 213 of 2005, it is an admitted fact that there is similarity in the nature of the land and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erals from the land, which are used as a raw material for the purpose of manufacturing cement and also for development of infrastructure of its factory. Therefore, the enhancement of compensation at ₹ 1,92,000/- per acre as per the calculation below would be just and reasonable. CALCULATION i. Per sq ft = ₹ 7.5/- ii. Per acre = ₹ 7.5 X 43,560 square feet= ₹ 3,26,700/- per acre. iii. Incidental and other charges @ 10%= ₹ 32,670/- iv. After the above deduction = ₹ 2,94,030/- v. De-escalation charges = 5% for 7 years (5% x 7 x 2,94,030/- = ₹ 1,02,910/- per acre (rounded off) vi. Compensation = ₹ 2,94,030/- (-) ₹ 1,02,910/- = ₹ 1,91,120/- vii. Final Compensation= ₹ 1,92,000/- (rounded off) 74. It would be relevant to state here that compensation of market value has to be determined notwithstanding the fact that the date of the notification issued Under Section 28(1) of the KIAD Act has not been taken into consideration, but the criteria for determination of market value of the land put to uses to which it is reasonably capable of being put to in the future shall be considered by the Court, as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s potentialities. In such a case the arbitrator in determining its value will have no market value to guide him, and he will have to ascertain as best he may from the materials before him, what a willing vendor might reasonably expect to obtain from a willing purchaser, for the land in that particular position and with those particular potentialities. For it has been established by numerous authorities that the land is not to be valued merely by reference to the use to which it is being put at the time at which its value has to be determined [that time under the Indian Act being the date of the notification Under Section 4(1)], but also by reference to the uses to which it is reasonably capable of being put in the future. (Emphasis laid by this Court) The above position of law laid down by the Privy Council has been reiterated by this Court in a catena of cases. In view of the same, we are of the considered view that the market value of the land covered in MFA No. 3796 of 2005 and Cross Objection No. 213 of 2005 has to be applied to the land of the Appellants in the present case for the reason that in both the notifications as the required land has been put to use for the ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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