RB DEALERS PRIVATE LIMITED versus THE METRO RAILWAY, KOLKATA on 17 July 2019

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SUPREME COURT REPORTS

[2019] 8 S.C.R.

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RB DEALERS PRIVATE LIMITED

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THE METRO RAILWAY, KOLKATA

(Special Leave Petition (Civil) No. 14078 of 2019)

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JULY 17, 2019

[ARUN MISHRA AND M. R. SHAH, JJ.]

Right to Fair Compensation and Transparency in LandAcquisition, Rehabilitization and Resettlement Act, 2013 – s.30 (1)and (3) – Metro Railways (construction of works) Act, 1978 – LandsCowned by petitioner were acquired for the purpose of constructionof the Metro railway – Petitioner claimed compensation under theprovisions of the 2013 Act – The competent authority awardedRs.1,48,29,312 towards the market value and a sum of Rs.6,75,526/- on account of value of structure – However, appellate authorityDenhanced the amount of compensation and awarded a sum ofRs.6,20,52,215/- on account of market value of structure, a furthersum at the rate of 12% p.a. on market value in terms of sub-s. (3)of s.30 of the Act, 2013 and a solatium @ 100% on the totalcompensation i.e. total award of Rs.9,94,18, 980/— – Aggrieved,Metro Railways preferred application u/Art.227 – High Court heldEthat the solatium payable under sub.s.(1) of s.30 has to be calculatedonly on the market value of the land acquired and the assets andnot on the total arrived at upon assessing the market value withadditional 12% p.a. – Consequently, High Court directed to reassessthe total amount payable – On appeal, held: S.28 of the Act providesFfor parameters to be considered by the Collector in determining thecompensation to be awarded for the land acquired, which includesthe market value as determined u/s.26 of the Act and otherparameters, but does not include the amount calculated and payableunder sub-s.(3) of s.30 of the 2013 Act – Also, on fair reading ofthe 2013 Act, namely, ss.26 to 30, the High Court rightly observedGthat solatium amount to be determined and calculated under sub-s.(1) of s.30 of the 2013 Act shall be equivalent to 100% of themarket value determined u/s.26 of the Act plus the value of all assetsattached to the land i.e. the total amount of compensation and shall H

not include an amount calculated at the rate of 12% p.a. on suchmarket value payable under sub-s.(3) of s.30 of the 2013 Act –Thus, Special leave petitions dismissed.

Dismissing the Special Leave Petitions, the Court HELD: Whether the solatium as contemplated under sub-section (1) of Section 30 of the Right to Fair Compensation andTransparency in Land Acquisition, Rehabilitization andResettlement Act, 2013, has to be calculated only on the marketvalue and the assets thereon or the sum total of the market value,the assets and 12% per annum on the market value stipulatedunder sub-section (3) of Section 30 of the 2013 Act?

Conclusion

While considering the aforesaid question, the relevantprovisions of the 2013 Act and the scheme for determination ofthe amount of compensation for the land acquired are requiredto be referred to and considered. The relevant provisions of the2013 Act are Sections 26, 27, 28, 29 and 30. Section 26 of theAct provides for determination of market value of the land by theCollector. Section 27 of the Act provides for determination ofthe amount of compensation and Section 28 of the Act providesthe parameters to be considered by the Collector in determinationof the award. Section 29 of the Act provides for determination ofthe value of things attached to the land or building. Section 30 ofthe Act provides that the Collector having determined the totalcompensation to be paid, shall, to arrive at the final award, imposea “Solatium” amount equivalent to one hundred per cent of thecompensation amount. Sub-section (3) of Section 30 furtherprovides that in addition to the market value of the land providedunder Section 26, the Collector shall, in every case, award theamount calculated at the rate of 12% per annum on such marketvalue for the period commencing on and from the date of thepublication of the notification under sub-section (2) of Section 4,in respect of such land, till the date of the award of the Collectoror the date of taking possession of the land, whichever is earlier.Therefore, on conjoint reading of the aforesaid provisions andthe scheme of the Act, it is to be seen that before the final awardis passed by the Collector, the Collector has to determine the A

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Amarket value of the land as provided under Section 26 of the Act.That, thereafter, after determination of the market value of theland as provided under Section 26 of the Act, the Collector hasto determine the amount of compensation as per Section 27 ofthe Act, which includes the market value of the land as well asthe value of all assets attached to the land. Therefore, the amountBof compensation determined shall be including the market valueof the land to be acquired (as per Section 26 of the 2013 Act) andthe value of all assets attached to the land. The determination ofthe value of the things attached to the land or building shall be asper Section 29 of the 2013 Act. Over and above the amount ofCcompensation so determined by the Collector as per Sections26, 27 and 28 of the 2013 Act, at the time of the final award, theCollector has to impose a “solatium” amount equivalent to onehundred per cent of the compensation amount, as per Sections29 and 30 of the 2013 Act. The land owner whose land has been

acquired shall also be entitled to, in addition to the market valueDof the land provided under Section 26 of the Act, an amountcalculated at the rate of 12% per annum on such market value.Therefore, on conjoint reading of the aforesaid provisions andthe scheme of the 2013 Act, the final award declared by theCollector shall be in three parts/components, namely the amountEof compensation (which shall include the market value of the landto be acquired and the value of the assets attached to the land);the solatium determined and payable under sub-section (1) ofSection 30 which shall be equivalent to one hundred per cent ofthe compensation amount (the market value + value of assetsattached to the land) and the amount calculated at the rate ofF12% per annum on such market value (as per sub-section (3) ofSection 30 of the 2013 Act). All the three components would beindependent which shall ultimately form part of the final award.At this stage, it is required to be noted that unlike the marketvalue (as defined under Section 3(u) of the Act), theG“Compensation” is not defined. However, on reading Sections26 and 27 of the Act, it is to be held that the total amount ofcompensation shall be the market value of the land to be acquiredas determined under Section 26 of the Act and the value of assetsattached to the land determined under Section 29 of the Act. It is H

required to be noted that in sub-section (1) of Section 30 of the2013 Act, the word used is “Solatium” amount equivalent to onehundred per cent of the COMPENSATION AMOUNT. It is alsorequired to be noted that unlike Section 23 of the old LandAcquisition Act, 1894, under the 2013 Act, the award of solatiumand the additional amount calculated at the rate of 12% per annumon such market value is provided in the different section. Eventhe solatium payable under the old Land Acquisition Act was atthe rate of 30 per cent on the market value and, in the new 2013Act, the solatium amount is equivalent to one hundred per centof the compensation amount. Therefore, there is a material changein determination of the market value, determination of the amountof compensation, determination of the amount of solatium anddeclaration of the final award. Therefore, on a fair reading of therelevant provisions of the 2013 Act, namely Sections 26 to 30,we are of the opinion that the High Court has rightly observedand held that the solatium amount to be determined and calculatedunder sub-section (1) of Section 30 of the 2013 Act shall beequivalent to 100% of the market value determined under Section26 of the Act plus the value of all assets attached to the land i.e.the total amount of the compensation and shall not include anamount calculated at the rate of 12% per annum on such marketvalue payable under sub-section (3) of Section 30 of the 2013Act. On fair reading of the aforesaid provisions and the schemeof the 2013 Act, this Court is of the opinion that any otherinterpretation would be contrary to the scheme of the 2013 Act.[Para 4] [1149-E-H; 1150-A-H; 1151-A-H]

CIVIL APPELLATE JURISDICTION : Special Leave Petition(Civil) No. 14078 of 2019.

From the Judgment and Order dated 07.02.2019 of the HighCourt at Calcutta in C.O. No. 1895 of 2018.

With

S.L.P.(C) No. 14170 of 2019.

Huzefa Ahmadi,Sr.Adv., Amit P., Ms. Neha Tandon, R. B.Phookan, Shailesh Madiyal, Sujit Bhattacharya, Advs. for the petitioner.

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AThe Judgment of the Court was delivered by

M. R. SHAH, J.

1. The short question which is posed for consideration of this Courtin the present Special Leave Petitions is as to whether the solatium ascontemplated under sub-section (1) of Section 30 of the Right to FairBCompensation and Transparency in Land Acquisition, Rehabilitation andResettlement Act, 2013 (hereinafter referred to as the ‘2013 Act’) hasto be calculated only on the market value and assets or the sum total ofthe market value, the assets and additional 12% per annum on the marketvalue stipulated under sub-section (3) of Section 30 of the 2013 Act?C

2. That the lands owned by the petitioner herein came to be acquiredfor the purpose of construction of the Metro railway. That the said landwas acquired under the provisions of the Metro Railways (Constructionof Works) Act, 1978 (hereinafter referred to as the ‘1978 Act’). That theCentral Government published a notification under Section 10 of the 1978DAct, inter alia, declaring that the said land should be acquired in connectionwith the aforesaid project. That, in the year 2014, the petitioner filed anapplication under Section 13(1) of the 1978 Act, inter alia, praying for thecompensation in respect of the said land and the same was registered asClaim Case No. NGA-32 OF 2014. That, on 05.12.2016, the petitionerfiled an application for amendment of the original claim, inter alia, prayingEfor compensation to be determined under the provisions of the 2013 Act.That the said application for amendment came to be allowed.

2.1 That by an order dated 16.12.2016, the competent authoritydisposed of the aforesaid claim case awarding Rs.1,48,29,312/- towardsthe market value and a sum of Rs.6,75,526/- within two months from theFdate of the order on account of value of structure.

2.2 That, on 11.01.2017, the petitioner preferred an appeal underSection 13(3) of the 1978 Act before the Appellate Authority, which wasregistered as Claim Appeal No. 1 of 2017. That, by an order dated28.02.2018, the Appellate Authority allowed the appeal and enhancedGthe amount of compensation and held that the petitioner is entitled to geta sum of Rs.6,20,52,215/- on account of market value of the land and afurther sum of Rs.6,75,526/- on account of value of structure. TheAppellate Authority also held that the petitioner shall be entitled to afurther sum at the rate of 12% per annum on market value in terms ofsub-section (3) of Section 30 of the 2013 Act and also held that theH

petitioner is entitled to get solatium @ 100% on the total compensationi.e. Rs.6,20,52,215/- (market value) + Rs.6,75,526/- (on account of valueof structure) + Rs.3,66,91,239/- (further sum at the rate of 12% perannum on market value in terms of sub-section (3) of Section 30 of the2013 Act) = Rs.9,94,18,980/-.

2.3 That, being aggrieved and dissatisfied with the order passedby the Appellate Authority dated 28.02.2018, the respondent preferredan application under Article 227 of the Constitution of India before theHigh Court of Calcutta, being C.O. No. 1895 of 2018. That, by theimpugned judgment and order dated 07.02.2019, the High Court haspartly allowed the said revision application and has held that the solatiumpayable under sub-section (1) of Section 30 of the 2013 Act has to becalculated only on the market value of the land acquired and the assetsthereon and not on the total arrived at upon assessing the market valuewith additional 12% per annum thereon (further sum payable under sub-section (3) of Section 30 of the 2013 Act). Consequently, the HighCourt has directed to reassess the total amount payable to the petitioner.

2.4 Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court holding and directing to determineand to pay the solatium payable under sub-section (1) of Section 30 ofthe 2013 Act on the market value of the land acquired and the assetsthereon and excluding the further sum at the rate of 12% per annumpayable under sub-section (3) of Section 30 of the 2013 Act, the originalowner-the petitioner herein has preferred the present Special LeavePetitions.

2.5 Therefore, the short question which is posed for considerationof this Court is as to whether the solatium payable under sub-section (1)of Section 30 of the 2013 Act has to be calculated only on the marketvalue of the land acquired and the assets thereon or on the total arrivedat upon adding the additional 12% per annum on the market value?

3. Shri Huzefa Ahmadi, learned Senior Advocate appearing onbehalf of the petitioner -original land owner-original claimant hasvehemently submitted that the High Court has committed a grave errorin holding that the solatium payable under sub-section (1) of Section 30of the 2013 Act has to be calculated only on the market value of theland acquired and the assets thereon, and not on the total arrived at uponadding further sum of 12% per annum on market value.

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A3.1 It is vehemently submitted by the learned Senior Counselappearing on behalf of the petitioner that the impugned judgment andorder passed by the High Court holding that the solatium has to becalculated only on the market value arrived at and the assets thereonand not on the total arrived at adding the further sum of 12% per annumon market value, is against the scheme of the 2013 Act for awarding theBcompensation for the land acquired.

3.2 It is further submitted by the learned Senior Counsel appearingon behalf of the petitioner that the amount of solatium stipulated undersub-section (1) of Section 30 of the 2013 Act, which is to the amountequivalent to 100% of the compensation amount, shall include additionalC12% per annum on the market value stipulated under sub-section (3) ofSection 30 of the 2013 Act.

3.3 It is submitted by the learned Senior Counsel appearing onbehalf of the petitioner that, as per the scheme of the 2013 Act, Section26 of the Act refers to the manner in which the market value as definedDin Section 3(u) has to be determined by the Collector. Section 27 of theAct refers to the determination of the amount of compensation to bepaid to the land owner by including all assets attached to the land. It issubmitted that Section 28 provides the parameters to be considered bythe Collector for determining the amount of the compensation to beEawarded for the land acquired. It is submitted that the expression“compensation” has to be defined in the Act and would therefore takeinto its fold any amount statutorily due and payable to a person whoseland stands acquired under the Act.

3.4 It is submitted by Shri Ahmadi appearing on behalf of theFpetitioner that sub-section (1) of Section 30 of the 2013 Act provides,inter alia, that the solatium amount is equivalent to 100% of thecompensation amount. It is submitted that sub-section (3) of Section 30of the 2013 Act expressly provides that the Collector shall award inaddition to the market value of the land under Section 26, an amountcalculated at the rate of 12% per annum on such market value. It isGsubmitted that said amount at the rate of 12% is yet another kind ofcompensation which is payable to the land owner in lieu of the compulsoryacquisition. It is submitted that, therefore, while construing/consideringthe “total compensation” under sub-section (1) of Section 30 of the 2013Act, the sum payable at the rate of 12% per annum under sub-sectionH(3) of Section 30 of the 2013 Act is required to be included. It is submitted that the sum payable under sub-section (3) of Section 30 of the 2013 Actshall be a part of the award while determining and paying andcompensation for the land acquired. It is submitted that as 2013 Act is abeneficiary Act, a liberal interpretation should be adopted in favour ofthe land owners whose land has been compulsory acquired.

3.5 It is further submitted by the learned Senior Advocate appearingon behalf of the petitioner that even sub-section (3) of Section 69 of theAct also provides that solatium shall be 100% over the “totalcompensation” amount. It is submitted that, therefore, a beneficialconstruction of sub-section (3) of Section 69 would illustrate the legislativeintent which is that solatium under sub-section (1) of Section 30 wouldbe the aggregate of 100% of the market value determined under Section26, the asset value determined under Section 27 of the Act and 12% ofthe market value determined under sub-section (3) of Section 30 of the2013 Act. He submitted that any interpretation contrary to the above,would be contrary to the Statement of Objects and Reasons of the 2013Act.

3.6 Making the above submissions, it is prayed to allow the presentSpecial Leave Petitions.

4. We have heard the learned counsel appearing on behalf of thepetitioner at length. As observed hereinabove, the short question posedfor consideration of this Court in the present Special Leave Petitions isas to whether the solatium as contemplated under sub-section (1) ofSection 30 of the 2013 Act, has to be calculated only on the marketvalue and the assets thereon or the sum total of the market value, theassets and 12% per annum on the market value stipulated under sub-section (3) of Section 30 of the 2013 Act? While considering the aforesaidquestion, the relevant provisions of the 2013 Act and the scheme fordetermination of the amount of compensation for the land acquired arerequired to be referred to and considered. The relevant provisions ofthe 2013 Act are Sections 26, 27, 28, 29 and 30. Section 26 of the Actprovides for determination of market value of the land by the Collector.Section 27 of the Act provides for determination of the amount ofcompensation and Section 28 of the Act provides the parameters to beconsidered by the Collector in determination of the award. Section 29of the Act provides for determination of the value of things attached tothe land or building. Section 30 of the Act provides that the Collectorhaving determined the total compensation to be paid, shall, to arrive at A

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Athe final award, impose a “Solatium” amount equivalent to one hundredper cent of the compensation amount. Sub-section (3) of Section 30further provides that in addition to the market value of the land providedunder Section 26, the Collector shall, in every case, award the amountcalculated at the rate of 12% per annum on such market value for theperiod commencing on and from the date of the publication of theBnotification under sub-section (2) of Section 4, in respect of such land,till the date of the award of the Collector or the date of taking possessionof the land, whichever is earlier. Therefore, on conjoint reading of theaforesaid provisions and the scheme of the Act, it is to be seen thatbefore the final award is passed by the Collector, the Collector has toCdetermine the market value of the land as provided under Section 26 ofthe Act. That, thereafter, after determination of the market value of theland as provided under Section 26 of the Act, the Collector has todetermine the amount of compensation as per Section 27 of the Act,which includes the market value of the land as well as the value of all

assets attached to the land. Therefore, the amount of compensationDdetermined shall be including the market value of the land to be acquired(as per Section 26 of the 2013 Act) and the value of all assets attachedto the land. The determination of the value of the things attached to theland or building shall be as per Section 29 of the 2013 Act. Over andabove the amount of compensation so determined by the Collector asEper Sections 26, 27 and 28 of the 2013 Act, at the time of the finalaward, the Collector has to impose a “solatium” amount equivalent toone hundred per cent of the compensation amount, as per Sections 29and 30 of the 2013 Act. The land owner whose land has been acquiredshall also be entitled to, in addition to the market value of the land providedunder Section 26 of the Act, an amount calculated at the rate of 12% perFannum on such market value. Therefore, on conjoint reading of theaforesaid provisions and the scheme of the 2013 Act, the final awarddeclared by the Collector shall be in three parts/components, namely theamount of compensation (which shall include the market value of theland to be acquired and the value of the assets attached to the land); theGsolatium determined and payable under sub-section (1) of Section 30which shall be equivalent to one hundred per cent of the compensationamount (the market value + value of assets attached to the land) and theamount calculated at the rate of 12% per annum on such market value(as per sub-section (3) of Section 30 of the 2013 Act). All the three H

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components would be independent which shall ultimately form part ofthe final award. At this stage, it is required to be noted that unlike themarket value (as defined under Section 3(u) of the Act), the“Compensation” is not defined. However, on reading Sections 26 and27 of the Act, it is to be held that the total amount of compensation shallbe the market value of the land to be acquired as determined underSection 26 of the Act and the value of assets attached to the landdetermined under Section 29 of the Act. It is required to be noted thatin sub-section (1) of Section 30 of the 2013 Act, the word used is“Solatium” amount equivalent to one hundred per cent of theCOMPENSATION AMOUNT. At this stage, it is required to benoted that Section 28 of the Act provides for parameters to be consideredby the Collector in determining the compensation to be awarded for theland acquired, which includes the market value as determined underSection 26 of the Act and other parameters, but does not include theamount calculated and payable under sub-section (3) of Section 30 ofthe 2013 Act. It is also required to be noted that unlike Section 23 ofthe old Land Acquisition Act, 1894, under the 2013 Act, the award ofsolatium and the additional amount calculated at the rate of 12% perannum on such market value is provided in the different section. Eventhe solatium payable under the old Land Acquisition Act was at the rateof 30 per cent on the market value and, in the new 2013 Act, the solatiumamount is equivalent to one hundred per cent of the compensation amount.Therefore, there is a material change in determination of the marketvalue, determination of the amount of compensation, determination ofthe amount of solatium and declaration of the final award. Therefore,on a fair reading of the relevant provisions of the 2013 Act, namelySections 26 to 30, we are of the opinion that the High Court has rightlyobserved and held that the solatium amount to be determined andcalculated under sub-section (1) of Section 30 of the 2013 Act shall beequivalent to 100% of the market value determined under Section 26 ofthe Act plus the value of all assets attached to the land i.e. the totalamount of the compensation and shall not include an amount calculatedat the rate of 12% per annum on such market value payable under sub-section (3) of Section 30 of the 2013 Act. On fair reading of the aforesaidprovisions and the scheme of the 2013 Act, we are of the opinion thatany other interpretation would be contrary to the scheme of the 2013Act.

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A4.1 Insofar as the reliance placed by the learned counsel for thepetitioner upon Section 69 of the 2013 Act is concerned, it is required tobe noted that Section 69 of the Act provides for the determination of theaward/final award, which shall include the amount of compensationdetermined as per Sections 26, 27, 28 and 29 of the 2013 Act; theadditional amount calculated at the rate of 12% per annum on suchBmarket value determined and payable under sub-section (1) of Section30 of the 2013 Act and solatium at the rate of one hundred per cent overthe total compensation amount determined and payable under sub-section(3) of Section 30 of the 2013 Act. Determination of the final awardwhich shall be including the aforesaid three components, shall be differentCthan that of the determination of amount of compensation. The amountof compensation is one part of the final award. Therefore, the submissionon behalf of the petitioner relying upon Section 69 of the 2013 Act thatthe solatium amount equivalent to one hundred per cent of thecompensation amount includes the amount calculated at the rate of 12%

on such market value (as per sub-section (3) of Section 30 of the 2013DAct) has no substance and cannot be accepted. What is provided undersub-section (1) of Section 30 of the 2013 Act is the “compensationamount” and not the total amount payable as per the final award. Thetotal amount of compensation payable would be only that amountcompensation determined as per Sections 26 to 29 of the 2013 Act.E5. In view of the above and for the reasons stated above, it is heldthat the solatium as contemplated under sub-section (1) of Section 30 ofthe 2013 Act has to be calculated only on the market value plus thevalue of the assets attached to the land i.e. total compensation amountas determined as per Sections 26, 27 and 28 of the 2013 Act which shall Fnot include the additional amount at the rate of 12% per annum on suchmarket value as payable under sub-Section (3) of Section 30 of the 2013Act. We are in complete agreement with the view taken by the HighCourt. Both these Special Leave Petitions fail and deserve to be dismissedand are accordingly dismissed.

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Ankit Gyan

SLPs dismissed.

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