LexRAGHUBANS NARAIN SINGH versus THE UITAR PRADESH GOVERNMENT THROUGH COLLECTOR OF BIJNOR
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A B c D E F G H RAGHUBANS NARAIN SINGH v. THE UITAR PRADESH GOVERNMENT THROUGH COLLECTOR OF BIJNOR September 23, 1966 (K. N. WANCHOO, J.M. SHELAT, AND G. K. MITTER, JJ.] Land Acquisition Act, 1894, Ss. 11, 18, 23 and 28-Compensation for land acquired-based on an earlier offer to purchase the ./ami- evidence relating to such offer not challenged as not genuine or bona- fide-whether proper basis for compensation-Valuation based on 'market value'--or on income from land-when appropriate--Court exercising discretion to pay interest under s. 28--whether can award interert at a rate less tha7_1 6 per cent. For the purpose of building a school hostel, a piece of grove land belonging to the appellant and situated just outside the town of Nehtaur, in U.P., was notified for acquisition under s. 4 of the Land Acquisition Act, 1894, in December 1945 and possession was taken from the appel- lant on July 4, 194 7. The Collector in his award under s. 11 of the Act fixed the total compensation-which included compensation for the trees on the ]and, for the land it,elf and the 15 per cent solatium-at Rs. 2,218. In a reference under s. 18 made at the instance of the appellant to the District Judge, both the appellant and the Government led oral evidence and also adduced evidence of certain specimen sales to C8tablish the proper value of the land. A Deputy Collector, who had recently retired, gave evidence for the appellant to the effect that during 1945 he had offered to purchase the land in question for Rs. 18,000 with a view to build a residential house. for himself so that he could live there after his retirement; but that the offer was not accepted as the appellant want- ed Rs. 24,000. Evidence was also led about the state of development of the area in which the land was situated; and of the fact that the income from the land at the time was approximately Rs. 700 per annum, with the prO'spect of its increasing to Rs. 1,200 per annum _when all the trees that had been planted started bearing fruit. The District Judge discarded the evidence of specimen iales produced by both sides as 'being of no assistance for determining the compensa- tion payable for L'ie land. But he accepted the evidence of the offer made by the Deputy Collector as genuine and bona fide and on that basis asoessed the value of the land at Rs. 18,000. Adding to that the solatium of 15 per cent, he awarded Rs. 20, 700 as compensation. He also held that the appellant was entitled to interest under s. 28 but allowed interest only -at 3 per cent on the ground that since the· acquisition was for an educational institution, interest at that rate wa~ proper. In an appeal against this decision the High Court took the view that it was not· possible to say whether the offer made by the Deputy Collec- tor was a genuine one or not. Having rejected also the evidence of the. specimen sales the High Cour;t determined compensation for the land at Rs. 13,000 by estimating the anriual income from the land at Rs. 650 and multiplying it by 20. After adding the solati\Jlll of 15 per cent, the total compensation was fixed at Rs. 15,000. The High Court rejected the 490 SUPREME COURT REPORTS [1967] I s.c.R. appellant's contention that he was entitled to interest at the rate of 6 per cent on two grounds,. viz., ( 1) that the question as to the rate of inter<6t was not specifically raised in his cross objections; and (2) that s. 28 was discretionary; therefore the District Judge could award interest at any rate up to 6 per cent. In the appeal to this Court it was also contended on behalf of the appellant that the High Court judgment suffered from an infirmity in that it failed to take into account the potential value of the land as a building site in viey,· of the evidence as to the town's recent development. HELD : The judgment and order of the District Judge by which he fited the compensation at Rs. 20, 700 must be restored and interest on the excess amount of Rs. 18,482 paid to the appellant at the rate of 6 per cent per annum from July 4, 1947 up to the ume· of payment. [498 BJ 11tc evidence on record did not constilute an ascertainable trend of development of the town in the direction of the acquired land or of any acti't'e building activity nea-rby. Compensation could not therefore be determined on the basis of the potentialities of the land as a building site. South Eastern Rail Co. v. L.C.C.,
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