S. SHANKARAIAH THR. GPA HOLDER & ORS versus THE LAND ACQUISITION OFFICER AND REVENUE DIVISIONAL OFFICER PEDDAPALI KARIMNAGAR DIST. & ORS. on 9 November 2022

1. Feeling aggrieved and dissatisfied with the impugned commonjudgment and order dated 06.12.2013 passed by the High Court of AndhraPradesh at Hyderabad in respective first appeals No. 1634 of 2001 andother allied appeals, the original land owners/claimants have preferredthe present appeals seeking enhancement of the amount of compensationfor the lands acquired.

2. Large extent of land in different survey number in Adrial Villageof Manthani Mandal, Karimnagar District came to be acquired by theState Government for the benefit of Singareni Collieries CompanyLimited. The lands were acquired for the purposes of excavation ofcoal. Notification under Section 4(1) of the Land Acquisition Act, 1894(hereinafter referred to as ‘the Act, 1894’) came to be issued on13.05.1985. Declaration under Section 6 of the Act 1894 was issued on31.07.1985. The Land Acquisition Officer passed the awards in the year1987, fixing the market value for the acquired lands at Rs.7,000/- peracre for Category 1 – Dry Lands under Cultivation and at Rs.6000/- peracre for Category 2 – Dry Lands Left Fallow. Not satisfied with thecompensation awarded by the Land Acquisition Officer, the land ownerssought references under Section 18 of the Act, 1894. The land ownersclaimed the compensation at Rs.2 lakhs per acre. The Reference Courtfixed the market value at Rs.30,000/- per acre and Rs.50,000/- per acre.The Reference Court also awarded the compensation @ Rs.15,000/-per acre towards sub-soil mineral rights. By the impugned commonjudgment and order the High Court has determined and awarded thecompensation @ Rs.80,000/- per acre considering the market value ofthe land Rs.1,23,000/- per acre and thereafter deducting 1/3[rd]. The High A

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ACourt has also in addition awarded Rs.10,000/- per acre as part of themarket value for sub-soil rights.

2.1 Feeling aggrieved and dissatisfied with the impugned commonjudgment and order passed by the High Court determining and awardingthe compensation at Rs.80,000/- per acre and Rs.10,000/- per acre forBsub-soil rights on account of the coal deposits, the original claimants –land owners have preferred the present appeals.

2.2 At the outset, it is required to be noted that against the veryimpugned common judgment and order the beneficiary – SingareniCollieries Company Limited approached this Court by way of specialCleave petitions which have been dismissed. The review applications arealso dismissed. Therefore, the short question which is posed forconsideration before this Court is whether the amount of compensationdetermined/awarded by the High Court is required to be enhanced in theappeals preferred by the original claimants/land owners?

D3. Learned Counsel appearing on behalf of the appellants hassubmitted that while determining/awarding the compensation the Hon’bleHigh Court has not appreciated that the petitioners were the absoluteowners of the land including the sub-soil minerals and were not merelytenure holders. It is submitted that therefore while determining the amountof compensation for the land acquired claim for sub-soil minerals rightsEwas also required to be considered. It is submitted that in the impugnedjudgment and order the Hon’ble High Court has also specifically giventhe findings that the nature of deposits existing on the surface or thesub-soil of a land would play an important role and if there are anydeposits of rare minerals or precious stones, that would add to the marketFvalue of the land. It is submitted that though the Hon’ble High Court hasobserved that it is not proper for the Land Acquisition Officer or theCivil Court to separately award the compensation towards sub-soil mineralrights, thereafter it is observed that it is permissible to take the fact orinto account, while determining the market value.

G3.1. It is further submitted by learned counsel appearing on behalfof the land owners/claimants that even otherwise the acquisition wassolely for the purpose of excavation of the coal and there was no otherpurpose for the acquisition and the entire acquired land is being excavatedon the basis of the estimates of the coal reserves identified therein, theHon’ble High Court has erred in deducting 1/3[rd] towards the development.HIt is submitted that since the entire land is to be mined, there is no wastage

S. SHANKARAIAH THR. GPA HOLDER v. THE LAND ACQUISITIONOFFICER AND RDO PEDDAPALI KARIMNAGAR DIST. [M. R. SHAH, J.]

of land on account of any developmental activities, such as roads, sewagelines, parks etc. which are required to be carved out in industrial/commercial/housing layouts. It is submitted that therefore, the deductionfrom the compensation determined may not be permissible in absenceof any justification for such deduction as the entire land is having coalreserves. Reliance is placed upon the decision of this Court in the caseof Nelson Fernandes & Ors. versus Special Land AcquisitionOfficer South Goa & Ors. reported in (2007) 9 SCC 447.

4. Shri A. Mariarputham, learned Senior Advocate appearing onbehalf of the respondents while opposing the present appeals hassubmitted that the amount determined by the Hon’ble High Court whichincludes Rs.10,000/- per acre towards the coal deposits, the same is notrequired to be interfered with by this Hon’ble Court.

4.1 Now so far as 1/3[rd] deduction made by the Hon’ble HighCourt from Rs.1,23,000/- per acre it is submitted that as per the settledposition of law there shall be an appropriate deduction towards thedevelopment and therefore 1/3[rd] deduction can be said to be just andreasonable deduction towards the development, which is not required tobe interfered with.

Making above submissions, it is prayed to dismiss the presentappeals by further submitting that as such the appeals preferred by therespondents - Singareni Collieries Company Ltd. & Ors. have beendismissed by this Court and the judgment and order passed by this Hon’bleHigh Court has been confirmed by this Court.

5. Heard learned counsel appearing on behalf of the respectiveparties at length.

6. By the impugned common judgment and order the High Courthas determined and awarded Rs.80,000/- per acre. The High Court hasalso granted/awarded Rs.10,000/- for sub-soil rights on account of coaldeposits. Feeling aggrieved and dissatisfied with the impugned commonjudgment and order passed by the High Court, the original claimants/land owners have preferred the present appeals seeking enhancementof the amount of compensation.

6.1 At the outset, it is required to be noted that so far as theappeals preferred by the respondents - Singareni Collieries CompanyLtd. & Ors., the same have been dismissed by this Court.

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A6.2 While determining and awarding the compensation atRs.80,000/- per acre the High Court has considered the market value ofthe land in question at Rs.1,23,000/-. However, thereafter has deducted1/3[rd] towards the development charges etc. and thereafter has awardedthe actual amount of compensation at Rs.80,000/- per acre. It is thecase on behalf of the claimants/land owners that the lands in questionBhave been acquired for the benefit of the mining company/SingareniCollieries Company Ltd. which is to be used for excavation of coal. Thecoal is already existed in the lands acquired. Since the entire land is to bemined and the coal is to be excavated, there is no wastage of land onaccount of any developmental activities such as roads, sewage lines,Cparks etc. In that view of the matter, there is no development requiredand therefore 1/3[rd] deduction is not warranted at all. Identical questioncame to be considered by this Court in the case of Nelson Fernandes(supra) and after taking into consideration the earlier decision of thisCourt in the case of Basavva vs. Spl. Land Acquisition Officer, (1996)9 SCC 640, in which this Court has held that the purpose for whichDacquisition is made is also a relevant factor for determining the marketvalue and the purpose for which the land is acquired must also be takeninto consideration, thereafter in paragraph 29 it is observed and held asunder:

“29. Both the Special Land Acquisition Officer, the District JudgeEand of the High Court have failed to notice that the purpose ofacquisition is for Railways and that the purpose is a relevant factorto be taken into consideration for fixing the compensation. In thiscontext, we may usefully refer the judgment of this Courtin Viluben Jhalejar Contractor v. State of Gujarat [(2005) 4FSCC 789 : JT (2005) 4 SC 282] . This Court held that the purposefor which the land is acquired must also be taken into considerationin fixing the market value and the deduction of developmentcharges. In the above case, the lands were acquired becausethey were submerged under water of a dam. Owners claimedcompensation of Rs 40 per sq ft. LAO awarded compensationGranging from Rs 35 to Rs 60 per sq m. Reference Court fixed themarket value of the land at Rs 200 per sq m and after deductionof development charges, determined the compensation @ Rs 134per sq m. In arriving at the compensation, Reference Court placedreliance on the comparative sale of a piece of land measuringH46.30 sq m @ Rs 270 per sq m. On appeal, the High Court awarded

S. SHANKARAIAH THR. GPA HOLDER v. THE LAND ACQUISITIONOFFICER AND RDO PEDDAPALI KARIMNAGAR DIST. [M. R. SHAH, J.]

compensation of Rs 180 per sq m in respect of large plots andRs 200 per sq m in respect of smaller plots. On further appeal,this Court held that since the lands were acquired for beingsubmerged in water of dam and had no potential value and thesale instance relied was a small plot measuring 46.30 sq m whereasthe acquisition in the present case was in respect of large area,interest of justice would be subserved by awarding compensationof Rs 160 per sq m in respect of larger plots and Rs 175 per sq mfor smaller plots. In Basavva v. Spl. Land Acquisition Officer[(1996) 9 SCC 640 : JT (1996) 5 SC 580] this Court held that thepurpose for which acquisition is made is also a relevant factor fordetermining the market value.”

6.3. Applying the law laid down by this Court in the aforesaiddecision to the facts of the case on hand and when the acquisition issolely for the purpose of excavation of coal and the entire land is acquiredon the basis of the estimates of the coal reserve identified and the entireland is to be mined and used and no further developmental activity isrequired, we are of the opinion that in the facts and circumstances of thecase, the High Court has erred in deducting 1/3[rd] towards thedevelopmental activities. The additional amount awarded by the HighCourt at Rs.10,000/- per acre on account of coal deposits is not requiredto be interfered with more particularly when the same has been confirmedby this Court in as much as the appeals preferred by the respondentshave been dismissed by this Court.

7. In view of the above and for the reason stated above, presentappeals succeed in part. It is held that the original claimants shall beentitled to the compensation for the lands acquired at Rs.1,23,000/- peracre with other statutory benefits which may be available under theprovisions of the Act, 1894. In addition, the original claimants shall alsobe entitled to Rs.10,000/- per acre as awarded by the High Court onaccount of coal deposits.

The impugned common judgment and order passed by the HighCourt is hereby modified to the aforesaid extent.

Present appeals are partly allowed to the aforesaid extent.However, in the facts and circumstances of the case there shall be noorder as to costs.

Divya Pandey(Assisted by : Roopanshi Virang, LCRA)

Appeals partly allowed.

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