RAM KRTSHAN AGARWAL Vs. STATE OF UTTAR PRADESH
LAWS(ALL)-1980-3-31
HIGH COURT OF ALLAHABAD
Decided on March 14,1980

RAM KRTSHAN AGARWAL Appellant
VERSUS
STATE OF UTTAR PRADESH Respondents


Referred Judgements :-

LAXMAN PRASAD V. THE SECRETARY OF STATE [REFERRED TO]


JUDGEMENT

B. N. Sapru, J. - (1.)The appellants were the owners of premises No. 133/170, Pathupurwa, Kanpur. It was a big ahata measuring about 5570 square yards in which there were a large number of tenants. Notices under Section 36 (1) of the Town Improvement Act were published in the Gazette on 17th, 24th and 31st of January, 1920 in respect of the property in dispute, Subse quently on 7-11-1921 a notice under Section 42 (1) of the U. P. Town Improvement Act was served on the appellant. Then, after a long delay, a notice under Section 9 of the Land Acquisition Act dated 23rd November, 1955 was served on the appellant. The compensation proceedings started before the Special Land Acquisition Officer who gave an award on 3-10-1961. The total amount of compensation awarded by the Special Land Acquisition Officer was Rs. 16,113. 25 p. He had calculated the cost of structures at Rs, 12532/- and of the land at Rs. 3481. 25 p. The value of the property was calcula ted at half of the annual income from the property during the quinquennium from 1958 to 1963, It is necessary to add here that when the notices under Section 36 (1) and 42 (1) were issued the land was outside the Municipal Limits and hence there was no municipal assessment of the property. The appellants were aggrieved by the amount of compensation awarded to them. They applied for a reference which was accordingly made. The matter came up before the Nagar Mahapalika Tribunal, Kanpur. The appellants claimed that the property in dispute was situated in the city of Kanpur in a locality near the Railway Station and was only at a short distance from the Hamirpur Road. Some big mills existed in the area from a very long time. It was also urged that the land Acquisition Officer while accepting the annual valuation of the ahata in the year 1920 at Rs. 2911: 50 p. had erred in applying the multiplier of 51/2 times. The applicants claim that the multiplier 16 2/3 should have been applied in capitalizing the value of the property. If such a multiplier had been applied the value of the property will come to Rs. 48525/ -. The appellants also claimed compensation for damages for the period of acquisition, which according to them came to ten per cent of the amount of compensation amounting to Rs. 4504: 37. It was also urged that the appellants were entitled to a solatium at the rate of fifteen per cent on the value of the property acquired. In this way the appellant claimed a total amount of Rs. 5978: 93 p, instead of Rs. 16013: 25 p. awarded as compensation. The appellant also claimed interest at the rate of six per cent on the amount of compensation/awarded from the date possession was taken from him. The State filed a written statement in which it was asserted that the land in question lay outside the Municipal Limits when the notifications under Section 36 (1) and 42 (1) of the U. P. Town Improvement Act were issued. It was asserted that at that time there was no development in the area and the land had no commercial importance, and was a slum. There were no modern facilities there. It was also placed that the annual value of the property had been wrongly calculated by the Special Land Acquisition Officer who had determined it to be half of the annual value of 1958-63. It should, accord ing to the State have been only one fourth. The multiplier of 51/2 applied by the land Acquisition Officer was asserted to be proper. It was pleaded that the appellant was not entitled to any damages for delayed acquisition as he had been in possession of the property for a long time. In the end it was pleaded that the compensation was reasonable and the reference should be dismissed. The Nagar Mahapalika Tribunal, hereinafter referred to as the Tribunal, was of the opinion that one of the methods for determining the market value of the property, is to determine its annual rental value on the date of the preli minary notification, and then to capitalise the said value by a suitable multi plier. The only complete rental assessment on the record was of the year 1958-63. The Land Acquisition Officer held that the annual rental value of the property for the year 1920 should be taken as half of the rental value in 1958-63. The Tribunal was of the view that it should be one fourth. Under Section 25 (1) of the Land Acquisition Act it is provided that where the applicant has made a claim to compensation pursuant to any notice given under Section 9, the amount awarded to him by the Court shall not exceed the amount so claimed by less than the amount awarded by the Collec tor under Section 11. The necessary consequence is that it is not open to the Court under the unamended Section 25 (1) to reduce the amount of compensa tion. Inherent in this legislative amendment is the intention of the Legisla ture that where the Land Acquisition Officer has adopted a particular mode of calculation, the mode of calculation should not be altered to the prejudice of the claimant so as to reduce the amount of compensation. The Learned Standing Counsel appearing for the respondent has urged in view of the Land Acquisition (U. P. Amendment) Act No. 22 of 1954), the words "or be less than the amount awarded by the Collector under Section 11" have been deleted. He submits that in view of the amendment it is competent for the Court to reduce the amount of compensation and, hence also to alter the mode of calculation adopted by the Collector to the detriment of the claimant. While amending Section 25 (1) of the Land Acquisition Act the Land Acquisition (U. P. Amendment) Act No- 22 of 1958) also amended Section 18 in its application to Uttar Pradesh. It provided for the addition of sub-sections (3) and (4) to Section 18 of the Land Acquisition Act. Sub-section (3) and (4) which were added, run as follows: " (3) Without prejudice to the provisions of sub-section (1) the Land Reforms Commissioner may, where he considers the amount of compen sation allowed by the award under Section 11 to be excessive, require the Collector that the matter be referred by him to the Court for deter mination of the amount of compensation. "explanation.-In any case of land under Chapter VII the requisition under this sub-section may be made by the Land Reforms Commissioner at the request of the Company on its undertaking to pay all the cost consequent upon such requisition. " (4) The requisition shall state the grounds on which objection to the award is taken and shall be made within six months from the date of the award. " By introducing sub-section (3) to Section 18, the U. P. Amendment Act No. XXII of 1954, permitted the Land Reform Commissioner to ask for a reference under Section 18 where he considered the amount of compensation awarded under Section 11 to be excessive. As the reference was being permitted at the instance of the Land Reforms Commissioner under Section 18 of the Land Acquisition Act, it became necessary to delete the phrase "or be less than the amounts awarded by the Collector under Section 11 or sub-section (1) of section 25. " If the phrase had continued in Section 25 (1) it would not have been possible for the Court on a reference by the Land Reform's Commissioner under the provisions of Section 18 (3) of the Land Acquisition as introduced by Uttar Pradesh to have reduced the amount of compensation. There is another significant feature that Section 25 (3) of the Land Acquisition Act has not been amended by the U. P. Legislature while amend ing sub-section (3) of Section 35 of the Land Acquisition act runs as follows; "when the applicant has omitted for sufficient reason (to be allowed by the Judge) to make such claim, the amount awarded to him by the Court shall not be less than and may exceed the amount awarded by the Collector. " Thus, where there has been a delay in the making of a claim for sufficient reason, the Court cannot award an amount of compensation less than that awarded under Section 11 of the Act. The consequence of accepting the argument of the learned counsel would be that where there is no delay in the making of a claim the Court can, while awarding compensation may award an amount lesser than the amount deter mined under Section 11, but not a case where there has been a delay which has been sufficiently explained, the Court cannot award a lesser amount of compensation. Thus reading the U. P. amendment introduced by the Land Acquisition (U. P Amendment) Act No. 22 of 1954, it is clear that the only effect of the deletion of some words from Section 25 (1) of the Land Acquisi tion Act is that where there is a reference made by the Land Reforms Commis sioner under Section 18 (3) of the Land Acquisition Act, the Court may award a compensation which is less than the amount of compensation deter mined under Section 11 of the Act. The argument of the Learned Standing Counsel therefore, cannot be accepted. In the case of Laxman Prasad v. The Secretary of State (A. I. R. 1921 All. 42), it was held that in view of the growing importance of Kanpur about the year 1920, the multiplier for determining the value of property should be 20. The Division Bench in that case did not qualify its decision by saying that multiplier of it should only be applied to certain categories of constructions. The gross annual rental value of the property in the years 1958 to 1963 was Rs. 5823/ -. The deductions in respect of house and water tax, one month's rent for repair and collection charges of six month's rent comes to Rs. 1562: 51 p. , which can be rounded off to Rs. 4260/ -. If the annual value of the property in 1920 was half this amount, it would come to Rs. 2137/ -. Applying the multiplier of 16 2/3, which according to the appellant was the proper multiplier the value of the property comes to Rs. 35,500/ -. Thus, the appellant would be entitled to additional amount of Rs. 27,750/- under this head. However, as the appel lant has valued the appeal at only Rs. 19,405; 81 p. , he cannot be awarded anything over and above this amount. In the result, the appeal is allowed. The amount of compensation awarded to the appellant is enhanced by Rs. 19,405; 81 p. The appellant will be entitled to interest on this amount at the rate of Rs. 6 per cent per annum from the date when possession was taken till the date of payment or deposit in Court. The appellant will also be entitled to a solatium of this amount at the rate of 15 per cent. The appellant is also entitled to his cost. .
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