Case Note & Summary
The litigation arose from land acquisition proceedings under the Land Acquisition Act, 1894, where a large extent of 180 acres in revenue estate of Bhatinda was acquired via notification dated October 16, 1970, and award made on March 24, 1978. The claimant, who ran a poultry farm on the acquired land, sought compensation for the land and for loss of business. The Additional District Judge awarded Rs.10 per square yard for the land, which was affirmed by the High Court as enhancement was not pressed. The only surviving issue in the claimant's appeal was whether he was entitled to compensation for loss of business. The reference court found that the claimant remained in possession until April 26, 1977 and continued disposing of poultry birds even at the time of giving evidence, thus he suffered no loss of earnings. The High Court erroneously directed payment of compensation for one year for business dislocation at Rs.1 per month per bird for 12,000 birds, but the Supreme Court did not disturb this finding because the State did not appeal against it. On the State's connected appeal, the Supreme Court held that the Land Acquisition (Amendment) Act, 1984, which granted solatium under Section 23(2), additional amount under Section 23(1-A), and enhanced interest under Section 28 proviso, had no application because the Collector's award was made on March 24, 1978, before the Amendment Act. Consequently, the additional amounts granted were set aside, while the District Judge's award of solatium at 15% on enhanced compensation and interest at 6% from the date of taking possession till date of deposit was upheld. The claimant's appeal was dismissed and the State's appeal was allowed without costs.
Headnote
A) Land Acquisition - Compensation for Loss of Earnings - Section 23(1) fourthly, Land Acquisition Act, 1894 - Damages for loss of earnings must be assessed as on date of taking possession - Claimant remained in possession until April 26, 1977 and continued poultry business, thus suffered no loss of earnings - Held that claimant not entitled to further compensation for loss of business (Paras 1-2).
B) Land Acquisition - Applicability of Amendment Act, 1984 - Sections 23(2), 23(1-A), 28 proviso, Land Acquisition (Amendment) Act, 1984 - Benefits of solatium, additional amount and enhanced interest apply prospectively - Collector's award dated March 24, 1978 predated Amendment Act 68 of 1984, hence additional amounts granted stood set aside - Held that District Judge's award of solatium at 15% on enhanced compensation and interest at 6% from date of taking possession till date of deposit upheld (Paras 2-3).
Issue of Consideration
Whether claimant is entitled to compensation for loss of business under clause fourthly of Section 23(1) of Land Acquisition Act, 1894; whether benefits of Land Acquisition (Amendment) Act, 1984 apply when Collector's award was made on March 24, 1978
Final Decision
Claimant's appeal dismissed; State's appeal allowed. The claimant was not entitled to further compensation for loss of business because he remained in possession until April 26, 1977, continued his business, and did not suffer any loss of earnings. The High Court's direction of one-year compensation for dislocation at Rs.1 per month per bird for 12,000 birds was found illegal but not disturbed because the State did not appeal on that point. Additional amounts granted under Amendment Act 68 of 1984 were set aside; instead, the District Judge's award of solatium at 15% on enhanced compensation and interest at 6% per annum from the date of taking possession till date of deposit was upheld. No costs.
Law Points
- Compensation for loss of earnings under Section 23(1) fourthly requires proof of actual loss at the time of taking possession
- no compensation if possession and business continued without loss
- Land Acquisition (Amendment) Act
- 1984 benefits do not apply to awards made before its commencement
Case Details
1996 LawText (SC) (08) 73
Not mentioned (main appeal); Civil Appeal No. 3724 of 1990 (connected State appeal)
K. Ramaswamy, G.B. Pattanaik
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Nature of Litigation
Appeals against compensation awarded for land acquired under Land Acquisition Act, 1894, including claim for loss of business from poultry farm and State appeal against additional benefits under Land Acquisition (Amendment) Act, 1984.
Remedy Sought
Claimant sought compensation for land and loss of business; State sought to set aside additional amounts (solatium under Section 23(2), additional amount under Section 23(1-A), enhanced interest under Section 28 proviso) granted under Amendment Act 68 of 1984.
Filing Reason
Claimant alleged loss of business of poultry farm due to acquisition; State challenged applicability of Amendment Act 68 of 1984 benefits because Collector's award dated March 24, 1978 predated the Amendment Act.
Previous Decisions
Additional District Judge awarded Rs.10 per square yard for land, affirmed by High Court as enhancement not pressed; reference court found no loss of earnings because claimant continued possession until April 26, 1977 and business; High Court directed one-year dislocation compensation at Rs.1 per month per bird for 12,000 birds, which Supreme Court found illegal but did not disturb.
Issues
Whether claimant is entitled to compensation for loss of business under clause fourthly of Section 23(1), Land Acquisition Act, 1894
Whether benefits of Land Acquisition (Amendment) Act, 1984 (solatium under Section 23(2), additional amount under Section 23(1-A), enhanced interest under Section 28 proviso) apply when Collector's award was made on March 24, 1978
Submissions/Arguments
Claimant argued he was entitled to compensation for loss of business on account of acquisition of poultry farm
State argued that Amendment Act 68 of 1984 benefits were not applicable because the Collector's award was made on March 24, 1978, before the Amendment Act
Ratio Decidendi
Under clause fourthly of Section 23(1) of the Land Acquisition Act, 1894, compensation for loss of earnings is payable only if actual loss is sustained at the time of taking possession. If the claimant continues in possession and carries on business without loss, no compensation for loss of business is payable. The Land Acquisition (Amendment) Act, 1984, which enhanced solatium, additional amount, and interest, applies prospectively and does not apply to awards made before its commencement; hence an award made on March 24, 1978 attracts only the pre-amendment rates of solatium and interest.
Judgment Excerpts
The yardstick, therefore, is the compensation for the loss of business as on the date of taking possession.
Having illegally remained in possession and carried on the business he did not suffer any loss in earnings. On the other hand, he had reaped the benefits. So he is not entitled to get further compensation.
the Amendment Act 68 of 1984 granting solatium u/s 23(2), additional amount at 12% per annum from the date of the notification till date of award or taking possession, whichever is earlier under Section 23(1-A) and enhanced interest under Section 28 proviso clearly has no application.
Procedural History
Notification under Section 4(1) of Land Acquisition Act, 1894 published on October 16, 1970 acquiring 180 acres in revenue estate of Bhatinda; award made under Section 11 on March 24, 1978; Additional District Judge awarded Rs.10 per square yard for land and considered loss of business claim, finding no loss due to continued possession and business; High Court affirmed land compensation and directed one-year dislocation compensation; claimant appealed to Supreme Court for loss of business; State filed connected appeal against additional benefits under Amendment Act 68 of 1984; Supreme Court dismissed claimant's appeal and allowed State's appeal, setting aside additional amounts and upholding original solatium and interest.
Acts & Sections
- Land Acquisition Act, 1894: Section 4(1), Section 11, Section 23(1), Section 23(2), Section 23(1-A), Section 28 proviso
- Land Acquisition (Amendment) Act, 1984:
