KARNATAKA ELECTRICITY BOARD versus THE STATE OF KARNATAKA AND ORS.

Citation: [2002] 1 S.C.R. 1118 · Decided: 19-02-2002 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
KARNATAKA ELECTRICITY BOARD 
V. 
THE STATE OF KARNATAKA AND ORS. 
.. 
FEBRUARY 19, 2002 
B 
[M.B. SHAH, B.N. AGRAWAL AND ARIJIT PASAYAT, JJ.] 
land Acquisition Act, 1894: Sections 2(1 /), 4(/j, 5A, 6 and 23 (2). 
c 
land Acquisition-Agreement between Electricity Board and claimant-
landowners-Provision for consideration of land and solatium-Award passed 
by land Acquisition officer not on the basis of Agreement between the parties 
Award passed by Land Acquisition Officer modified. 
Under an agreement, entered between the Appellant-Board and 
D respondent-landowners, the Board agreed to pay consideration@ Rs. 14, 250 
per gunta only for 2/3rd of the schedule property and the claimants agreed 
to hand over the entire schedule property to the Board. The Board also agreed 
to pay to the claimants solatium amount to be fixed by the Land Acquisition 
officer. By its award dated 27.7.1998, which was not on the basis of agreement 
produced before it, the Land Acquisition Officer granted compensation @ 
E Rs. 14,250 per gunta in respect of one half area of the schedule property. It 
also directed the appellants to pay solatium as well as interest on the said 
amount@ 9% per annum for the first year and@ 15% per annum for the 
subsequent years from the date of issue of Notification under Section 4(1 ). 
The Appellant-Board filed a writ petition before the Karnataka High Court 
F 
which was dismissed by a Single Judge holding that (i) there was not much 
difference between the amount awarded by the Land Acquisition Officer and 
.. 
the amount payable under the agreement; (ii) the award was strictly in 
accordance with the Land Acquisition Act. The appeals were also dismissed 
by the Division Bench of the High Court on the ground that as the appellant 
was not willing to sign and submit Form-D and had raised certain objections 
G with regard to the payment of solatium, the Land Acquisition Officer was 
justified in passing the award in accordance with law. Hence these appeals. 
Allowing the appeals and modifying the award, the Court 
0 
HELD: I. There was a written agreement between the parties, which 
H 
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KARNA TAKA ELECTRICITY BOARD v. ST A TE 
1119 
was produced before the Land Acquisition Officer end he was bound to pess A 
award in accordance with the agreement. Grouting of interest, solatium and 
additional amount would depend upon contract between the parties. 
(1123-G-H) 
State of Gujarat and Ors. v. Daya Shamji Bhai and Ors., [1995) 5 SCC 
746; Ishwarlal Premchand Shah and Ors. v. State o/Gujarat and Ors., (1996) 4 B 
SCC 174 and Abdul Aziz Abdul Razak and Anr. v. Municipal Corpn. o/Greater 
Bombay and Anr., (1996) 8 SCC 126, referred to. 
2. Solatium amount is required to be fixed under Section 23(2) of the 
Land Acquisition Act@30%. After agreeing to pay the solatium, It was totally 
unreasonable on the part of the officers of the Appellant-Board to contend C 
that they were not bound to pay the solatium as there was no compulsory 
acquisition. Secondly, the Land Acquisition Officer also took an unjustified 
stand that appellant should sign the Form of agreement as prescribed under 
the rules even though the agreement signed by both the parties was produced 
before him imd at the request of parties, the land acquisition proceedings were 
initiated. Form-D prescribed under Rule 108 of the Rules framed by the State D 
Government under the Land Acquisition Act only contemplates the signatures 
of the land owners i.e. claimants and that of an officer authorised under Article 
299 of the Constitution of India on behalf of and under the direction of the 
Governor of Karnataka. It also prescribes indemnity bond which is required 
to be executed by the claimants. It nowhere provides that the person for whose E 
benefit the property is acquired, should sign the said form. Thirdly, the 
claimants took unjustified stand that they were entitled to recover interest 
on the amount as provided under Section 23(1(a). [ 1123-C-FJ 
3. The difference in the compensation awarded by the Land Acquisition 
Officer and the agreement is not much. However, as the appellant had agreed F 
to pay consideration amount for 2/3rd area of the schedule property, it was 
not open to the Land Acquisition Officer to award compensation for one half 
area of the schedule property. Further, as the appellant had agreed to pay to 
the claimants solatium amount to be fixed by the Land Acquisition Officer, 
therefore, award granting solatmm canno

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