State of Punjab Vs. Amarjit Singh & Anr.
EmailAppeal: Civil Appeal No. 1494 of 2011
[Arising out of SLP (C) No. 30709 of 2008]
[Arising out of SLP (C) No. 30709 of 2008]
Petitioner: State of Punjab
Respondent: Amarjit Singh & Anr.
Apeal: Civil Appeal No. 1494 of 2011
[Arising out of SLP (C) No. 30709 of 2008]
[Arising out of SLP (C) No. 30709 of 2008]
Judges: R.V. Raveendran & A.K. Patnaik, JJ.
Date of Judgment: Feb 08, 2011
Appearances:
Appearances
Mr. Kuldip Singh, Mr. K.K. Pandey, Mr. H.S. Sandhu, Advocates for the Appellant(s).
Mr. Arun Nehra, Ms. Shobha, Mr. Mohinder Pal Thakur, Ms. Ridhima Garg, Advocates for the Respondent(s).
Mr. Kuldip Singh, Mr. K.K. Pandey, Mr. H.S. Sandhu, Advocates for the Appellant(s).
Mr. Arun Nehra, Ms. Shobha, Mr. Mohinder Pal Thakur, Ms. Ridhima Garg, Advocates for the Respondent(s).
Head Note:
Land Acquisition
Land Acquisition Act, 1894
Section 23(1A), 23(2), 23 – Additional amount – Payability – Additional amount of solatium – Reference court awarded compensation with statutory benefit under Sections 23(1A), 23(2), 28 – Application for additional amount at 12% p.a., from date of notification (11.11.1993) to date of award (16.6.1994) on market value and solatium. Held, additional amount is not payable on solatium. Mathapathi Basavannewwa’s case [JT 1995 (6) SC 242] and L. Krishnan’s case [JT 1996 (1) SC 660] relied upon with P. Ram Reddy’s [JT 1995 (1) SC 593] case.
Land Acquisition Act, 1894
Section 23(1A), 23(2), 23 – Additional amount – Payability – Additional amount of solatium – Reference court awarded compensation with statutory benefit under Sections 23(1A), 23(2), 28 – Application for additional amount at 12% p.a., from date of notification (11.11.1993) to date of award (16.6.1994) on market value and solatium. Held, additional amount is not payable on solatium. Mathapathi Basavannewwa’s case [JT 1995 (6) SC 242] and L. Krishnan’s case [JT 1996 (1) SC 660] relied upon with P. Ram Reddy’s [JT 1995 (1) SC 593] case.
Held:
While market value and compensation are factors to be assessed and determined by the court, no such judicial exercise is involved in regard to additional amount payable under Section 23(1A) and solatium payable under Section 23(2) as they are statutory benefits payable automatically at the rates specified in those sub-sections, qua the market price. No reasons need be assigned for grant of additional amount or solatium. (Para 4.1)
In Sunder v. Union of India [JT 2001 (8) SC 130], a Constitution Bench of this court held that the terms `sum awarded’ or `amount awarded’ occurring in sections 34 and 28 of the Act would include not only the compensation determined by taking note of the six factors mentioned in Section 23(1) of the Act, but also amounts awarded under the remaining sub-sections of section 23 as well, for the purpose of calculating interest. The words `compensation to be awarded’ used in Section 23(1) of the Act refers to the total of the sums awarded with reference to the six factors enumerated in Section 23(1). On the other hand, the words `amount awarded’ or `sum awarded’ in Sections 28 and 34 of the Act refers to the aggregate of the compensation determined by the court under Section 23(1), the additional amount payable under Section 23(1A) and the solatium payable under Section 23(2) of the Act. (Para 5.3)
The additional amount under Section 23(1A) and solatium under Section 23(2) are both payable only on the market value determined under Section 23(1) of the Act and not on any other amount. Solatium under Section 23(2) is not payable on the additional amount nor additional amount under Section 23(1A) payable on solatium. Solatium and additional amount are also not payable on the damages/expenses that may be awarded under second to sixth factors under Section 23(1) of the Act. (Para 6)
Sections 23(1A), 23(2), 28 – Additional amount – Solatium, if part of market value and hence additional amount payable on it. Held, that solatium is not part of market value. Hence no additional amount is payable on solatium. Ghanshyam (HUF)’s case distinguished. (Para 8)
Sections 23(1A), 23(2), 28 – Income Tax Act, 1961, Sections 45(5)(6) – Solatium, additional amount and interest – If part of compensation for payment of additional amount. Held that they are part of ‘enhanced compensation’ for purposes of Income Tax Act. (Para 8)
Cases Reffered:
1. Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF) [JT 2009 (9) SC 445] (Para 8)
2. Gurpreet Singh v. Union of India [JT 2006 (3) SC 444] (Para 7.1.)
3. Sunder v. Union of India [JT 2001 (8) SC 130] (Para 5.3.)
4. State of Tamil Nadu v. L. Krishnan [JT 1996 (1) SC 660] (relied upon) (Para 5)
5. Assistant Commissioner, Gadag Sub-Division, Gadag v. Mathapathi Basavannewwa [JT 1995 (6) SC 242] (relied upon) (Para 5)
6. P. Ram Reddy v. Land Acquisition Officer [JT 1995 (1) SC 593] (relied upon) (Para 5.2.)
JUDGEMENT:
R.V. RAVEENDRAN, J.
1. Leave granted. The question raised in this appeal is whether additional amount under Section 23(1A) of the Land Acquisition Act, 1894 (`Act’ for short) is payable on the solatium under Section 23(2) of the Act.
2. In regard to acquisition of land belonging to the respondents, the reference Court by judgment dated 5.3.2001 awarded compensation at the rate of Rs.6,96,000/- per acre alongwith statutory benefits under Section 23(1A), 23(2) and 28 of the Act. The respondents filed an execution application wherein they claimed additional amount of 12% per annum for the period 11.11.1993 to 16.6.1994 (that is from the date of notification under Section 4(1) of the Act till the date of the award) under Section 23(1A) of the Act, not only on the market value of the land, but also on the solatium amount. The said claim was accepted by the Executing Court by order dated 8.5.2008. The revision filed by the appellant was rejected by the High Court on 4.9.2008. The said revisional order of the High Court is challenged in this appeal by special leave.
3. To find an answer to the question arising for consideration, it is necessary to refer to Section 23 of the Act dealing with matters to be considered in determining compensation. The said provision is extracted below:
’23. Matters to be considered in determining compensation:
(1) In determining the amount of compensation to be awarded for land acquired under this Act, the Court shall take into consideration-
first, the market-value of the land at the date of the publication of the notification under section 4, sub-section (1);
secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector’s taking possession thereof;
thirdly, the damage (if any) sustained by the person interested, at the time of the Collector’s taking possession of the land, by reason of severing such land from his other land;
fourthly, the damage (if any) sustained by the person interested, at the time of the Collector’s taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings;
fifthly, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and
sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the declaration under section 6 and the time of the Collector’s taking possession of the land.
(1A) In addition to the market value of the land, as above provided, the Court shall in every case award an amount calculated at the rate of twelve per-centum per annum on such market value for the period commencing on and from the date of the publication of the notification under section 4, sub-section (1), in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier.
Explanation. – In computing the period referred to in this sub-section, any period or periods during which the proceedings for the acquisition of the land were held up on account of any stay or injunction by the order of any Court shall be excluded.
(2) In addition to the market value of the land as above provided, the Court shall in every case award a sum of thirty per centum on such market value, in consideration of the compulsory nature of the acquisition.’
(emphasis supplied)
4. Section 23 of the Act refers to four distinct amounts:
(i) Market value of the land on the date of publication of the notification under Section 4(1) of the Act is first and foremost of the six factors to be taken note of for determining the amount of compensation for the land acquired. It is the major component (and in most cases, the only component) of the compensation determined by the court under Section 23(1) of the Act.
(ii) Compensation to be awarded to a person for the acquired land, is to be determined under Section 23(1) of the Act by taking into consideration six factors – (i) the market value of the land, on the date of publication of the notification under section 4(1) of the Act; (ii to iv) damage sustained by the person interested by reason of the taking of any standing crops or trees in the lands, or severing such land from his other land/s, or the acquisition injuriously affecting his other property or earnings; (v) the reasonable expenses incidental to the person interested being compelled to change the residence or place of business as a consequence of acquisition; and (iv) the damage bonafide resulting from diminution of the profits of the land between the time of publication of declaration under section 6 and the time of the Collector’s taking possession of the land.
(iii) Additional amount at the rate of 12% per annum on such market value (for the period commencing on and from the date of publication of notification under Section 4(1) of the Act to date of award of the Collector or the date of taking possession of the land, whichever is earlier).
(iv) Solatium at 30% on such market value, in consideration of the compulsory nature of acquisition.
4.1. While market value and compensation are factors to be assessed and determined by the court, no such judicial exercise is involved in regard to additional amount payable under Section 23(1A) and solatium payable under Section 23(2) as they are statutory benefits payable automatically at the rates specified in those sub-sections, qua the market price. No reasons need be assigned for grant of additional amount or solatium.
5. This court explained the object of granting additional amount under Section 23(1A) of the Act in Assistant Commissioner, Gadag Sub-Division, Gadag v. Mathapathi Basavannewwa [JT 1995 (6) SC 242 : 1995 (6) SCC 355] and in State of Tamil Nadu v. L. Krishnan [JT 1996 (1) SC 660 : 1996 (1) SCC 250]. In Mathapathi Basavannewwa (supra) this court observed:
‘The object of introducing Section 23(1A) is to mitigate the hardship caused to the owner of the land, who has been deprived of the enjoyment of the land by taking possession from him and using it for the public purpose, because of considerable delay in making the award and offering payment thereof. To obviate such hardship, Section 23(1A) was introduced and the Legislature envisaged that the owner of the land is entitled to 12 per cent per annum additional amount on the market value………….’
5.1. In L. Krishnan (supra) this court observed:
‘The provisions in this Sub-section are designed to compensate the owners of the land for the rise in prices during the pendency of the land acquisition proceedings. It is a measure to off-set the effects of inflation and the continuous rise in the values of properties over the last few decades……….’
5.2. In P. Ram Reddy v. Land Acquisition Officer [JT 1995 (1) SC 593 : 1995 (2) SCC 305] this court held that additional amount under Section 23(1A) of the Act was payable only on the market value determined under Section 23(1) of the Act, thereby clearly implying that it was not reckonable on any other amount:
‘The amount awardable under Sub-section (1A) of Section 23 of the LA Act, therefore, would be an amount of 12 per centum per annum on the market value of the land determined under first Clause of Sub-section (1) of Section 23 for the period between the date of publication of Notification under Section 4(1) and to the dale of the award of the Collector or the date of taking possession of the land, whichever is earlier…………….In this context is has to be noted that the amount payable is 12 per centum per annum on the market value in the first Clause of Sub-section (1) of Section 23 of the LA Act. It has also to be noted that solatium under Sub-section (2) is not payable in respect of the amount awardable under Sub-section (1A), in that, Sub-section (2) says that in addition to the market value of the land, as above provided, the Court shall in every case award a sum of thirty per centum on such market value, in consideration of the compulsory nature of the acquisition.’
(emphasis supplied)
5.3. In Sunder v. Union of India [JT 2001 (8) SC 130 : 2001 (7) SCC 211], a Constitution Bench of this court held that the terms `sum awarded’ or `amount awarded’ occurring in sections 34 and 28 of the Act would include not only the compensation determined by taking note of the six factors mentioned in Section 23(1) of the Act, but also amounts awarded under the remaining sub-sections of section 23 as well, for the purpose of calculating interest. The words `compensation to be awarded’ used in Section 23(1) of the Act refers to the total of the sums awarded with reference to the six factors enumerated in Section 23(1). On the other hand, the words `amount awarded’ or `sum awarded’ in Sections 28 and 34 of the Act refers to the aggregate of the compensation determined by the court under Section 23(1), the additional amount payable under Section 23(1A) and the solatium payable under Section 23(2) of the Act.
6. Section 23(1) refers to market value of the land on the date of publication of the notification under Section 4(1) of the Act as a relevant factor for determining the amount of compensation to be awarded for land acquired under the Act. Sub-section (2) provides that in addition to the market value of the land determined under Section 23(1), the Court shall, in every case, award a sum of 30% on such market value in consideration of the compulsory nature of acquisition. Sub-section (1A) of Section 23, inserted by Act 68 of 1984 provides that in addition to the market value of the land, as provided under Section 23(1), the Court shall, in every case, award an amount calculated at the rate of 12% per annum on such market value for the period commencing on or from the date of publication of the notification under Section 4(1) in respect of such land to the date of award of the collector or the date of taking possession of the land, whichever is earlier. The additional amount under Section 23(1A) and solatium under Section 23(2) are both payable only on the market value determined under Section 23(1) of the Act and not on any other amount. Solatium under Section 23(2) is not payable on the additional amount nor additional amount under Section 23(1A) payable on solatium. Solatium and additional amount are also not payable on the damages/expenses that may be awarded under second to sixth factors under Section 23(1) of the Act.
7. Thus a person whose land is acquired is entitled to the following amounts under the Act.
(a) Compensation determined under Section 23(1) of the Act (comprising the market value of the land referred to as the first factor and any damages/expenses referred to as the second to sixth factors under the said sub-section).
(b) Solatium at 30% on the market value determined as the first factor under section 23(1) of the Act.
(c) Additional amount at 12% per annum of the market value of the land referred to as the first factor under Section 23(1) of the Act, for the period specified in Section 23(2).
(d) Interest on the aggregate of (a), (b) and (c) above for the period between the date of taking possession to date of payment/deposit at the rate of 9% per annum for the first year and 15% per annum for the remaining period.
7.1. Payments made are to be adjusted and accounted in the manner set out in Gurpreet Singh v. Union of India [JT 2006 (3) SC 444 : 2006 (8) SCC 457].
8. Learned counsel for the respondents placed reliance on the following observations of this Court in Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF) [JT 2009 (9) SC 445 : 2009 (8) SCC 412]:
‘The additional amount payable under Section 23(1A) of the 1894 Act is neither interest nor solatium. It is an additional compensation designed to compensate the owner of the land, for the rise in price during the pendency of the land acquisition proceedings. It is a measure to offset the effect of inflation and the continuous rise in the value of properties. Therefore, the amount payable under Section 23(1A) of the 1894 Act is an additional compensation in respect to the acquisition and has to be reckoned as part of the market value of the land.’
8.1. The learned counsel for respondents submitted that as this court has treated additional amount under Section 23(1A) as part of the market value, additional amount is payable on the solatium. There is no logic in the contention as the decision nowhere holds that solatium is part of market value nor holds that additional amount under Section 23(1A) is payable on the solatium amount. Be that as it may. More importantly, what requires to be noticed is that the entire consideration and analysis in that decision was with reference to the question whether solatium, additional amount and interest are part of `enhanced compensation’ for the purposes of Section 45(5)(b) of the Income Tax Act, 1961. The observations therein should be understood in the context of the provisions of the Income Tax Act. For example the decision also holds that interest payable under Section 28 of the Act is `enhanced compensation’ for the purposes of Section 45(5)(b) of Income Tax Act, which if taken as the interpretation with reference to the Land Acquisition Act, 1894, will be contrary to the constitution bench decision in Sunder (supra). We may also note that the decision clearly holds that additional amount is awardable only against the market value and not solatium:
‘It is clear from reading of Sections 23(1A), 23(2) as also Section 28 of the 1894 Act that additional benefits are available on the market value of the acquired lands under Section 23(1A) and 23(2) whereas Section 28 is available in respect of the entire compensation.’
9. In view of the above, the appeal is allowed, the orders of the High Court and the Executing Court, in so far as they hold that additional amount under Section 23(1A) is payable on solatium, are set aside. It is declared that additional amount under Section 23(1A) is awardable only on the market value determined under the first factor of Section 23(1) of the Act and cannot be calculated on the solatium payable under Section 23(2) of the Act.
1. Leave granted. The question raised in this appeal is whether additional amount under Section 23(1A) of the Land Acquisition Act, 1894 (`Act’ for short) is payable on the solatium under Section 23(2) of the Act.
2. In regard to acquisition of land belonging to the respondents, the reference Court by judgment dated 5.3.2001 awarded compensation at the rate of Rs.6,96,000/- per acre alongwith statutory benefits under Section 23(1A), 23(2) and 28 of the Act. The respondents filed an execution application wherein they claimed additional amount of 12% per annum for the period 11.11.1993 to 16.6.1994 (that is from the date of notification under Section 4(1) of the Act till the date of the award) under Section 23(1A) of the Act, not only on the market value of the land, but also on the solatium amount. The said claim was accepted by the Executing Court by order dated 8.5.2008. The revision filed by the appellant was rejected by the High Court on 4.9.2008. The said revisional order of the High Court is challenged in this appeal by special leave.
3. To find an answer to the question arising for consideration, it is necessary to refer to Section 23 of the Act dealing with matters to be considered in determining compensation. The said provision is extracted below:
’23. Matters to be considered in determining compensation:
(1) In determining the amount of compensation to be awarded for land acquired under this Act, the Court shall take into consideration-
first, the market-value of the land at the date of the publication of the notification under section 4, sub-section (1);
secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector’s taking possession thereof;
thirdly, the damage (if any) sustained by the person interested, at the time of the Collector’s taking possession of the land, by reason of severing such land from his other land;
fourthly, the damage (if any) sustained by the person interested, at the time of the Collector’s taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings;
fifthly, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and
sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the declaration under section 6 and the time of the Collector’s taking possession of the land.
(1A) In addition to the market value of the land, as above provided, the Court shall in every case award an amount calculated at the rate of twelve per-centum per annum on such market value for the period commencing on and from the date of the publication of the notification under section 4, sub-section (1), in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier.
Explanation. – In computing the period referred to in this sub-section, any period or periods during which the proceedings for the acquisition of the land were held up on account of any stay or injunction by the order of any Court shall be excluded.
(2) In addition to the market value of the land as above provided, the Court shall in every case award a sum of thirty per centum on such market value, in consideration of the compulsory nature of the acquisition.’
(emphasis supplied)
4. Section 23 of the Act refers to four distinct amounts:
(i) Market value of the land on the date of publication of the notification under Section 4(1) of the Act is first and foremost of the six factors to be taken note of for determining the amount of compensation for the land acquired. It is the major component (and in most cases, the only component) of the compensation determined by the court under Section 23(1) of the Act.
(ii) Compensation to be awarded to a person for the acquired land, is to be determined under Section 23(1) of the Act by taking into consideration six factors – (i) the market value of the land, on the date of publication of the notification under section 4(1) of the Act; (ii to iv) damage sustained by the person interested by reason of the taking of any standing crops or trees in the lands, or severing such land from his other land/s, or the acquisition injuriously affecting his other property or earnings; (v) the reasonable expenses incidental to the person interested being compelled to change the residence or place of business as a consequence of acquisition; and (iv) the damage bonafide resulting from diminution of the profits of the land between the time of publication of declaration under section 6 and the time of the Collector’s taking possession of the land.
(iii) Additional amount at the rate of 12% per annum on such market value (for the period commencing on and from the date of publication of notification under Section 4(1) of the Act to date of award of the Collector or the date of taking possession of the land, whichever is earlier).
(iv) Solatium at 30% on such market value, in consideration of the compulsory nature of acquisition.
4.1. While market value and compensation are factors to be assessed and determined by the court, no such judicial exercise is involved in regard to additional amount payable under Section 23(1A) and solatium payable under Section 23(2) as they are statutory benefits payable automatically at the rates specified in those sub-sections, qua the market price. No reasons need be assigned for grant of additional amount or solatium.
5. This court explained the object of granting additional amount under Section 23(1A) of the Act in Assistant Commissioner, Gadag Sub-Division, Gadag v. Mathapathi Basavannewwa [JT 1995 (6) SC 242 : 1995 (6) SCC 355] and in State of Tamil Nadu v. L. Krishnan [JT 1996 (1) SC 660 : 1996 (1) SCC 250]. In Mathapathi Basavannewwa (supra) this court observed:
‘The object of introducing Section 23(1A) is to mitigate the hardship caused to the owner of the land, who has been deprived of the enjoyment of the land by taking possession from him and using it for the public purpose, because of considerable delay in making the award and offering payment thereof. To obviate such hardship, Section 23(1A) was introduced and the Legislature envisaged that the owner of the land is entitled to 12 per cent per annum additional amount on the market value………….’
5.1. In L. Krishnan (supra) this court observed:
‘The provisions in this Sub-section are designed to compensate the owners of the land for the rise in prices during the pendency of the land acquisition proceedings. It is a measure to off-set the effects of inflation and the continuous rise in the values of properties over the last few decades……….’
5.2. In P. Ram Reddy v. Land Acquisition Officer [JT 1995 (1) SC 593 : 1995 (2) SCC 305] this court held that additional amount under Section 23(1A) of the Act was payable only on the market value determined under Section 23(1) of the Act, thereby clearly implying that it was not reckonable on any other amount:
‘The amount awardable under Sub-section (1A) of Section 23 of the LA Act, therefore, would be an amount of 12 per centum per annum on the market value of the land determined under first Clause of Sub-section (1) of Section 23 for the period between the date of publication of Notification under Section 4(1) and to the dale of the award of the Collector or the date of taking possession of the land, whichever is earlier…………….In this context is has to be noted that the amount payable is 12 per centum per annum on the market value in the first Clause of Sub-section (1) of Section 23 of the LA Act. It has also to be noted that solatium under Sub-section (2) is not payable in respect of the amount awardable under Sub-section (1A), in that, Sub-section (2) says that in addition to the market value of the land, as above provided, the Court shall in every case award a sum of thirty per centum on such market value, in consideration of the compulsory nature of the acquisition.’
(emphasis supplied)
5.3. In Sunder v. Union of India [JT 2001 (8) SC 130 : 2001 (7) SCC 211], a Constitution Bench of this court held that the terms `sum awarded’ or `amount awarded’ occurring in sections 34 and 28 of the Act would include not only the compensation determined by taking note of the six factors mentioned in Section 23(1) of the Act, but also amounts awarded under the remaining sub-sections of section 23 as well, for the purpose of calculating interest. The words `compensation to be awarded’ used in Section 23(1) of the Act refers to the total of the sums awarded with reference to the six factors enumerated in Section 23(1). On the other hand, the words `amount awarded’ or `sum awarded’ in Sections 28 and 34 of the Act refers to the aggregate of the compensation determined by the court under Section 23(1), the additional amount payable under Section 23(1A) and the solatium payable under Section 23(2) of the Act.
6. Section 23(1) refers to market value of the land on the date of publication of the notification under Section 4(1) of the Act as a relevant factor for determining the amount of compensation to be awarded for land acquired under the Act. Sub-section (2) provides that in addition to the market value of the land determined under Section 23(1), the Court shall, in every case, award a sum of 30% on such market value in consideration of the compulsory nature of acquisition. Sub-section (1A) of Section 23, inserted by Act 68 of 1984 provides that in addition to the market value of the land, as provided under Section 23(1), the Court shall, in every case, award an amount calculated at the rate of 12% per annum on such market value for the period commencing on or from the date of publication of the notification under Section 4(1) in respect of such land to the date of award of the collector or the date of taking possession of the land, whichever is earlier. The additional amount under Section 23(1A) and solatium under Section 23(2) are both payable only on the market value determined under Section 23(1) of the Act and not on any other amount. Solatium under Section 23(2) is not payable on the additional amount nor additional amount under Section 23(1A) payable on solatium. Solatium and additional amount are also not payable on the damages/expenses that may be awarded under second to sixth factors under Section 23(1) of the Act.
7. Thus a person whose land is acquired is entitled to the following amounts under the Act.
(a) Compensation determined under Section 23(1) of the Act (comprising the market value of the land referred to as the first factor and any damages/expenses referred to as the second to sixth factors under the said sub-section).
(b) Solatium at 30% on the market value determined as the first factor under section 23(1) of the Act.
(c) Additional amount at 12% per annum of the market value of the land referred to as the first factor under Section 23(1) of the Act, for the period specified in Section 23(2).
(d) Interest on the aggregate of (a), (b) and (c) above for the period between the date of taking possession to date of payment/deposit at the rate of 9% per annum for the first year and 15% per annum for the remaining period.
7.1. Payments made are to be adjusted and accounted in the manner set out in Gurpreet Singh v. Union of India [JT 2006 (3) SC 444 : 2006 (8) SCC 457].
8. Learned counsel for the respondents placed reliance on the following observations of this Court in Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF) [JT 2009 (9) SC 445 : 2009 (8) SCC 412]:
‘The additional amount payable under Section 23(1A) of the 1894 Act is neither interest nor solatium. It is an additional compensation designed to compensate the owner of the land, for the rise in price during the pendency of the land acquisition proceedings. It is a measure to offset the effect of inflation and the continuous rise in the value of properties. Therefore, the amount payable under Section 23(1A) of the 1894 Act is an additional compensation in respect to the acquisition and has to be reckoned as part of the market value of the land.’
8.1. The learned counsel for respondents submitted that as this court has treated additional amount under Section 23(1A) as part of the market value, additional amount is payable on the solatium. There is no logic in the contention as the decision nowhere holds that solatium is part of market value nor holds that additional amount under Section 23(1A) is payable on the solatium amount. Be that as it may. More importantly, what requires to be noticed is that the entire consideration and analysis in that decision was with reference to the question whether solatium, additional amount and interest are part of `enhanced compensation’ for the purposes of Section 45(5)(b) of the Income Tax Act, 1961. The observations therein should be understood in the context of the provisions of the Income Tax Act. For example the decision also holds that interest payable under Section 28 of the Act is `enhanced compensation’ for the purposes of Section 45(5)(b) of Income Tax Act, which if taken as the interpretation with reference to the Land Acquisition Act, 1894, will be contrary to the constitution bench decision in Sunder (supra). We may also note that the decision clearly holds that additional amount is awardable only against the market value and not solatium:
‘It is clear from reading of Sections 23(1A), 23(2) as also Section 28 of the 1894 Act that additional benefits are available on the market value of the acquired lands under Section 23(1A) and 23(2) whereas Section 28 is available in respect of the entire compensation.’
9. In view of the above, the appeal is allowed, the orders of the High Court and the Executing Court, in so far as they hold that additional amount under Section 23(1A) is payable on solatium, are set aside. It is declared that additional amount under Section 23(1A) is awardable only on the market value determined under the first factor of Section 23(1) of the Act and cannot be calculated on the solatium payable under Section 23(2) of the Act.
