Judgment:
(Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ or order or direction, more appropriately a writ of Certiorari calling for the records relating to passing of the Award No.1/2011 dated 12-2-2011 and quash the same declaring illegal and also direct to hold section 5A enquiry.)
The Power Grid Corporation of India Limited, Secunderabad, the 3rd respondent herein, proposed to construct a 765/400 K.V. Substation at Orvakal Village, Kurnool. About Acs.80.00 of land was needed. A notification under Section 4(1) of the Land Acquisition Act, 1894 (for short ‘the Act’) was published on 22.07.2010, proposing to acquire the lands of the petitioners herein in different survey numbers of Orvakal Village and Mandal. Having regard to the urgency involved in the matter, enquiry under Section 5-A of the Act was dispensed with, by invoking powers under Section 17(4) of the Act, and the notification under Section 6 of the Act was published. In the award enquiry, the petitioners made a claim of Rs.25,00,000/- per acre. The Land Acquisition Officer, the 1st respondent herein, passed an award, dated 10.02.2011, wherein he determined the market value of the land at the rate of Rs.2,24,000/-, per acre. The petitioners challenge the award.
One of the grounds urged by them is that the 1st respondent himself corresponded with the 3rd respondent indicating that the tentative value of the land, to be paid under Section 17(3-A) of the Act is at the rate of Rs.10 lakhs + solatium and interest and that the 3rd respondent has deposited the amount accordingly. It is also pleaded that the 1st respondent did not take the evidence adduced by the petitioners, into account.
On behalf of respondent Nos.1 and 2, a counter-affidavit is filed. According to them, the procedure prescribed under the Act was strictly followed and that the market value was determined on the basis of the statistics that are available for the lands in the immediate neighbourhood. They further plead that, in case the petitioners are not satisfied with the award, they can avail the remedy under Section 18 of the Act.
The 3rd respondent filed a separate counter-affidavit. The fact that the land was acquired at their instance, is admitted. So far as the quantum of compensation is concerned, the 3rd respondent states that the 1st respondent indicated the tentative market value of the land proposed to be acquired at Rs.10 lakhs per acre and taking into account, a sum of Rs.8,30,12,800/- representing 80% of market value, proportionate solatium, interest and additional market value, was deposited. They further submit that they do not have any objection for the payment of compensation on that basis.
Heard Sri K.Vijaya Kumar Reddy, learned counsel for the petitioners, learned Government Pleader for Revenue, for respondents 1 and 2 and Sri R.Raghunandan, learned counsel for the 3rd respondent.
It is a matter of record that the lands owned by the petitioners aggregating to about Rs.38 acres was acquired for the benefit of the 3rd respondent, by initiating proceedings under the Act. Urgency clause under Section 17(4) of the Act was invoked. The 1st respondent passed an award on 10.02.2011. The grievance of the petitioners is that the compensation awarded by the 1st respondent is totally inadequate and disproportionate.
In the ordinary course of things, the owner of a land acquired by the Government, has to seek remedy under Section 18 of the Act, in case he is not satisfied with the compensation awarded by the Land Acquisition Officer. This case, however, presents certain typical features. It has already been mentioned that the urgency clause was invoked and enquiry under Section 5-A of the Act was dispensed with. Section 17(3-A) of the Act mandates that whenever the enquiry under Section 5-A is dispensed with, the Government, or the agency, for whose benefit the land is acquired, shall be under obligation to deposit 80% of the tentative compensation. It is in this context, that the 1st respondent addressed a letter, dated 07.01.2009, to the 3rd respondent, indicating the tentative value at Rs.10 lakhs, per acre. The total value was fixed at Rs.13 lakhs inclusive of solatium and 80% thereof being Rs.10,40,000/-, per acre, was required to be deposited. Such deposit has, in fact, been made by the 3rd respondent.
The procedure adopted by respondents 1 and 2 in passing the impugned award is opposed to the provisions of the Act. It was only after 80% of the tentative compensation is paid to the owner of the land, that possession could have been taken. The steps for passing the award must follow thereafter. However, respondents 1 and 2 did not ensure that the amount deposited by the 3rd respondent towards 80% of the compensation is paid to the petitioners. In stead, they retained the amount in their account and proceeded to pass the award. In a way, it amounts to temporary misappropriation of the tentative compensation.
Further, a perusal of the award discloses that totally a hyper-technical view was adopted. The letter, dated 07.01.2009, addressed by the 1st respondent, may be by a different incumbent, was totally disregarded. It is on account of such hyper-technical and indifferent attitude that there is any amount of unrest among the owners of the lands that are acquired. In the recent past, the Central Government has also initiated process of replacing the Act and to bring about, a foolproof mechanism to protect the interests of the owners of the land.
Had it been a case where the award was passed in the ordinary course and no exercise was undertaken to indicate the market value at the stage of invoking the urgency clause, this Court would have simply left it to the parties to work out their remedies, or at the most could have set aside the award, leaving it open to the 1st respondent to pass fresh award. However, there exist perfect material and special circumstances that enable this Court to resolve the controversy, in this writ petition itself. In fact, the petitioners, the 3rd respondent and the 1st respondent have given an indication that the dispute can be resolved once for all, by standardizing the compensation.
In cases where the land is acquired in accordance with the ordinary procedure, viz., by publishing a notification under Section 4(1), conducting enquiry under Section 5-A, and publishing the declaration under Section 6 of the Act, the freedom of a Land Acquisition Officer to fix the market value of the acquired land, under Section 12, is relatively unbridled. Where, however, the urgency clause is invoked, and enquiry under Section 5-A is dispensed with, such freedom is substantially restricted. The reason is that, in matters of that nature, the State is under obligation to pay 80% of the tentative compensation to the citizen, under Section 17(3-A) of the Act, before the possession of the land is taken. It is thereafter, that award is passed under Section 12 of the Act.
The Land Acquisition Officer would be required to apply his mind while determining the tentative compensation at the initial stage itself, so that 80% thereof is worked out, and is paid to the owner of the land. The detailed award to be passed under Section 12 of the Act, must be an extension of the exercise, taken up under Section 17 (3-A). A fair exercise will be the one, in which the market value fixed in the award under Section 12 of the Act is not less than the one, that is taken into account, while complying with Section 17 (3-A). If the compensation in the award passed under Section 12 is less than the one, offered under Section 17 (3-A) of the Act, a serious anomaly comes into existence, and the exercise undertaken by the Land Acquisition Officer at either stage, would tend to become dubious, if not imperfect and arbitrary.
The case on hand presents an example to understand the anomaly. The 2nd respondent addressed letter, dated 07.01.2009, to the 3rd respondent, indicating the market value of the land at Rs.10 lakhs per acre, and requiring the 3rd respondent to deposit the amount for compliance with Section 17 (3-A) of the Act, and accordingly, the amount was deposited. The relevant portion of the letter reads:
“In this regard, I am to inform that the land acquisition proposals have been submitted to the Collector, Kurnool. Funds are required for the payment of land compensation to the land owners of Orvakal Village to be placed before the Land Acquisition Officer. Therefore, necessary fund is worked out approximately as follows.
1. Rate per acre @ Rs.10,00,000/-
2. 30% Solatium Rs. 3,00,000/-
3. Total Rs.13,00,000/-
4. Total Extent 79.82 Rs.13,00,000*79.82=10,37,66,000/-
5. 80% land compensation on the total amount = 10,37,66,000 *80% = 8,30,12,800/-“
The said amount was deposited by the 3rd respondent. In the award passed under Section 12 of the Act, the market value was fixed at Rs.2,24,000/-, per acre. The 2nd respondent did not pay the amount of 80% of the market value to the petitioners. Had it been paid, the result of the award would have been that the petitioners would have been required to refund almost 3/4th of the amount received by them. This only shows the lopsided approach, and the arbitrary manner in which the award was passed.
In all fairness, the 3rd respondent has offered to pay the compensation at the rate, that was indicated to it, for compliance with Section 17 (3-A) of the Act. The relevant paragraph in the counter-affidavit reads,
“Adverting to the averments made in paragraphs 10 and 11 of the affidavit, it is true that the third respondent has deposited land acquisition cost @ Rs.8,30,12,800/- towards the cost of Acs.77-82 cents @ Rs.10 Lakhs per acre plus 30% solatium. As the possession of the entire land is with third respondent and as the works at the same site are in full swing the question of interfering with the activities of other persons would not arise. Hence, the allegation that the respondents are preventing the petitioners from raising crops is untenable. It may also be submitted that the petitioners herein had sought to interfere with the possession of the third respondent over the land resulting in filing of suit bearing O.S.No.223/12 and 225/12 on the file of Junior Civil Judge Court, Kurnool. It is submitted that an interim injunction has been granted by the Court against the petitioners herein and the persons acting through or under them.”
This Court is of the view that the payment of compensation @ Rs.10 lakhs per acre with 30% solatium would meet the ends of justice. Since much time did not intervene between the initiation of proceedings and deposit of the amount, the denial of the additional market value and interest would not adversely effect the interest of the petitioners. On the other hand, the compensation, almost at five times more than what was determined by the 2nd respondent in his award, would be available to the petitioners. This balancing act would give quietus to the matter and the 3rd respondent would be in a position to carry out its work without any hindrance.
Hence, the writ petition is allowed directing that,
a) the 1st respondent shall forthwith pay the compensation @ Rs.10,40,000/-, per acre, inclusive of the market value and all statutory benefits, towards 80% of the compensation in deposit with him, to the petitioners, within 15 days from today;
b) The 3rd respondent shall deposit the balance of 20% of the compensation with the 1st respondent within four weeks from today, and the former shall pay the same to the respective petitioners, within 15 days thereafter; and
c) the award, dated 10.02.2011, shall stand modified to the extent indicated above, and that the petitioners shall not have any further claim against the respondents, including the right to seek reference to civil Court.
The miscellaneous petition filed in this writ petition also stands disposed of.
There shall be no order as to costs.