Case Note & Summary
The State of Maharashtra appealed against the judgment and award of the 3rd Joint Civil Judge (Sr.Dn.), Akola in L.A.C. No. 80/1998 dated 02/02/2011, which enhanced compensation for land acquired from the respondent. The respondent, Savatram Ramprasad Mills, owned plot no. 39, Sheet No.27A at Akola, out of which 320 sq.mtrs. were acquired for construction of a bridge on river Morna. The acquisition was initiated by a notification under Section 4(1) of the Land Acquisition Act, 1894 published on 26/06/1997, followed by a Section 6 notification on 18/08/1997. Prior to these notifications, the Collector had proposed to purchase the land at Rs.2,320 per sq.mtr. by letter dated 11/12/1996. The respondent replied on 17/12/1996 offering to sell at the ready reckoner rate of Rs.4,640 per sq.mtr. The Collector accepted this rate on 01/01/1997. The respondent then informed the Collector on 04/01/1997 that the sale would be executed after obtaining no objection from its Head Office. In March 1997, possession of the land was delivered to the appellant. Despite these facts, the Special Land Acquisition Officer (SLAO) awarded compensation at only Rs.260 per sq.mtr. The respondent brought the prior agreement to the notice of the SLAO by letters dated 31/07/1997 and 09/10/1997, but the SLAO ignored them. The Reference Court enhanced compensation to Rs.4,640 per sq.mtr. based on the prior agreement. The High Court held that the prior correspondence and delivery of possession before the Section 4(1) notification indicated that the acquisition was not under the Act but a negotiated sale. Therefore, the respondent was not entitled to compensation under the Act. The appeal was allowed, setting aside the Reference Court's award and restoring the SLAO's award of Rs.260 per sq.mtr.
Headnote
A) Land Acquisition - Compensation - Prior Agreement - Section 4(1) and Section 6 of the Land Acquisition Act, 1894 - The respondent owner agreed to sell land at Rs.4,640 per sq.mtr. and delivered possession before the Section 4(1) notification. The SLAO awarded only Rs.260 per sq.mtr. The Reference Court enhanced compensation to Rs.4,640 per sq.mtr. Held that the prior agreement and delivery of possession before notification indicate that the acquisition was not under the Act but a negotiated sale, and the respondent is not entitled to compensation under the Act. The appeal is allowed, and the award of the Reference Court is set aside. (Paras 2-10)
Issue of Consideration
Whether the respondent is entitled to compensation at the rate of Rs.4,640 per sq.mtr. based on prior correspondence and agreement, or whether the compensation should be limited to the amount awarded by the SLAO at Rs.260 per sq.mtr.
Final Decision
The appeal is allowed. The judgment and award of the Reference Court dated 02/02/2011 in L.A.C. No. 80/1998 are set aside. The award of the SLAO granting compensation at Rs.260 per sq.mtr. is restored. No order as to costs.
Law Points
- Land Acquisition
- Compensation
- Prior Agreement
- Section 4(1) Notification
- Section 6 Notification
- Ready Reckoner Rate
- Possession Delivery
- Estoppel
Case Details
2017 LawText (BOM) (08) 205
First Appeal No. 1093/2012
Dr. Smt. Shalini Phansalkar-Joshi, J.
Shri M.A. Kadu, AGP for appellants; Shri A.S. Mahadia, counsel for respondent
The State of Maharashtra, Through the Collector, Akola, represented by Special Land Acquisition Officer, Akola, and The Executive Engineer, Akola, Patbhandhare Vibhag, (Saravazonik), Akola
Savatram Ramprasad Mills, Akola, A Unit for National Textile Corporation (M.N.) Ltd., Subsidiary of National Textile Corporation, A Government of India Undertaking through its General Manager, Wajirchand Mulkraj Kakkar
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Nature of Litigation
First Appeal against judgment and award in Land Acquisition Case enhancing compensation.
Remedy Sought
Appellants (State) sought to set aside the Reference Court's award enhancing compensation from Rs.260 to Rs.4,640 per sq.mtr.
Filing Reason
The SLAO awarded paltry compensation of Rs.260 per sq.mtr. despite prior agreement to pay Rs.4,640 per sq.mtr. and delivery of possession before notification.
Previous Decisions
The Reference Court (3rd Joint Civil Judge, Sr.Dn., Akola) in L.A.C. No. 80/1998 on 02/02/2011 enhanced compensation to Rs.4,640 per sq.mtr.
Issues
Whether the respondent is entitled to compensation at the rate of Rs.4,640 per sq.mtr. based on prior correspondence and agreement?
Whether the acquisition was under the Land Acquisition Act or a negotiated sale?
Submissions/Arguments
Appellants argued that the prior agreement and delivery of possession before Section 4(1) notification indicated a negotiated sale, not acquisition under the Act, and thus the respondent is not entitled to compensation under the Act.
Respondent argued that despite the prior agreement, the acquisition proceeded under the Act, and they are entitled to compensation at the agreed rate.
Ratio Decidendi
When possession of land is delivered and price agreed upon before the issuance of notification under Section 4(1) of the Land Acquisition Act, the acquisition is not under the Act but a negotiated sale, and the claimant is not entitled to compensation under the Act. The Reference Court erred in enhancing compensation based on the prior agreement.
Judgment Excerpts
Prior to that, the Collector, Akola had sent a letter to the respondent on 11/12/1996 giving a proposal for the purchase of the said land at the rate of Rs.2,320/ per sq.mtr..
Respondent herein had sent a reply to the said letter on 17/12/1996 showing his readiness to sell the said piece of the land to the Collector at the ready reckoner price of Rs.4,640/ per sq.mtr..
By his letter dt. 01/01/1997, the Collector, Akola accepted the said rate of Rs.4,640/ per sq.mtr..
In March1997, on demand of appellant, possession of the said land was delivered by the respondent to the appellant.
However, the SLAO by his award, granted paltry compensation at the rate of Rs.260/ per sq.mtr.
Procedural History
The SLAO passed an award granting compensation at Rs.260 per sq.mtr. The respondent sought reference under Section 18 of the Act. The Reference Court (3rd Joint Civil Judge, Sr.Dn., Akola) in L.A.C. No. 80/1998 on 02/02/2011 enhanced compensation to Rs.4,640 per sq.mtr. The State filed First Appeal No. 1093/2012 before the Bombay High Court, Nagpur Bench, which was allowed on 03/08/2017.
Acts & Sections
- Land Acquisition Act, 1894: Section 4(1), Section 6
