It is common knowledge that the landowners, whose lands are compulsorily acquired under the Land Acquisition Act 1894, are generally poor & illiterate and out of sheer ignorance & poor advice, they file claims which are lower than the market value of the acquired lands. When the Courts find that the market value of the acquired lands is higher than the compensation claimed, the acquiring bodies/ Government raise a preliminary objection that the Courts cannot award compensation over and above the amounts claimed.

The Acquiring Bodies/ Government refer to Section 25(1) of the Land Acquisition Act 1894 as it existed prior to amendment Act 68 of 1984, which mandates that the Court cannot award higher compensation than the amount claimed. The said section reads as under:

(1) When the applicant has made a claim to compensation, pursuant to any notice given under Section 9, the amount awarded to him by the court shall not exceed the amount so claimed or be less than the amount awarded by the Collector under Section 11.

However, an amendment has come into effect on 24.09.1984 which mandates only that the Court cannot award less than what has been awarded by the Collector. The restriction to award in excess of the claim has been intentionally withdrawn by the legislature. Post amendment the amended Section 25 reads as under:

"Section 25. Amount of compensation awarded by Court not to be lower than the amount awarded by the Collector- The amount of compensation awarded by the Court shall not be less than the amount awarded by the Collector under Section 11."

It would be trite to refer to the Apex Court judgment in Ashok Kumar & Anr. etc. vs State of Haryana, 2016 ALL SCR 778 in Civil Appeal No. 1527/2016 decided on 18 February, 2016. The Court held that Court is duty bound to adjudicate just and fair compensation on the basis of facts, circumstances, evidence & exemplar deeds and in doing so the Court is not bound by claim made by the owner. The Apex Court in Para 7 of the said judgment held thus:

"7. The pre-amended provision put a cap on the maximum; the compensation by court should not be beyond the amount claimed. The amendment in 1984, on the contrary, put a cap on the minimum; compensation cannot be less that what was awarded by the Land Acquisition Collector.

The cap on maximum having been expressly omitted, and the cap that is put is only on minimum, it is clear that the amount of compensation that a court can award is no longer restricted to the amount claimed by the applicant. It is the duty of the Court to award just and fair compensation taking into consideration the true market value and other relevant factors, irrespective of the claim made by the owner."

It would be apposite to refer to the judgment of the Apex Court in Bhag Singh and Others v. Union Territory of Chandigarh (1985) 3 SCC 737, wherein the Apex Court held that in suitable cases the amount higher than claimed may be awarded to the claimant on the basis of the circumstances of the case.The Court observed thus:

"It must be remembered that this was not a dispute between two private citizens where it would be quite just and legitimate to confine the claimant to the claim made by him and not to award him any higher amount than that claimed though even in such a case there may be situations where an amount higher than that claimed can be awarded to the claimant as for instance where an amount is claimed as due at the foot of an account.

Here was a claim made by the appellants against the State Government for compensation for acquisition of their land and under the law, the State was bound to pay to the appellants compensation on the basis of the market value of the land acquired and if according to the judgments of the learned single Judgement and the division Bench, the market value of the land acquired was higher than that awarded by the Land Acquisition Collector or the Additional District Judge, there is no reason why the appellants should have been denied the benefit of payment of the market value so determined. To deny this benefit to the appellants would tantamount to permitting the State Government to acquire the land of the appellants on payment of less than the true market value.

There may be cases where, as for instance, under-agrarian reform legislation, the holder of land may, legitimately, as a matter of social justice with a view to eliminating concentration of land in the hands of a few and bringing about its equitable distribution, be deprived of land which is not being personally cultivated by him or which is in excess of the ceiling area with payment of little compensation or no compensation at all, but where land is acquired under the Land Acquisition Act, 1894, it would not be fair and just to deprive the holder of his land without payment of the true market value when the law, in so many terms, declares that he shall be paid such market value.

The State Government must do what is fair and just to the citizen and should not, as far as possible, except in cases where tax or revenue is received or recovered without protest or where the state Government would otherwise be irretrievably be prejudiced, take up a technical plea to defeat the legitimate and just claim of the citizen."

It would be further relevant to refer to the Apex Court judgment in Krishi Utpadan Mandi Samiti v. Kanhaiya Lal (2000) 7 SCC 756, wherein the Court held that under the amended provisions of Section 25 of the Act, the Court can grant a higher compensation than claimed by the applicant. The Court observed thus:

17. Award being in this case between the dates 30th April, 1982 and 24th September, 1984 and as per the Union of India and Anr. v. Raghubir Singh (Dead) by LRs. etc. (Supra), the amended provisions would be applicable under which there is no restriction that award could only be upto the amount claimed by the claimant. Hence High Court order granting compensation more than what is claimed cannot be said to be illegal or contrary to the provisions of the Act. Hence the review itself, as is confined for the aforesaid reasons, has no merit.

It is apropos to refer to the Apex Court judgment in Bhimasha v. Special Land Acquisition Officer and others (2008) 10 SCC 797, wherein a three Judge bench rejected the contention that a higher compensation than claimed by the owner in his pleadings cannot be awarded by the Court. The Court observed thus:

"Therefore, the appellant's omission to make appropriate claim before the High Court after paying the requisite court fee cannot be castigated as one lacking bona fide. In our view, the High Court should have, after taking note of, the peculiar facts of the case and the market value determined by it, awarded higher compensation to the appellants subject to the condition of paying the balance court fee. This, having not been done, we feel that ends of justice could be met if the impugned order is suitably modified."

An important question arises in this regard which needs to be addressed. How can a Court enhance the compensation higher than the amount claimed as the Court Fee paid by the claimant would become insufficient. In Bhimasha (supra), the Apex Court awarded higher compensation than the claim 'subject to the condition of paying the balance court fee'. Thus once the claimant makes good the deficiency in Court Fee, the claimant shall be entitled to higher compensation.

It would be apposite to refer to Madhya Pradesh High Court judgment in F. A. No.2048 of 2019 in Dilip vs The State Of Madhya Pradesh and another decided on 11 May, 2020, the Court enhanced the compensation with a direction to pay the deficit Court Fee within the stipulated time. The Court held thus:

" It is made clear that the enhanced compensation which is now been directed to pay to the appellants- claimants/landowners who are appellants in these bunch of appeals and the same shall be paid if the appellants - landowners shall deposit the requisite court fees on the aforesaid enhanced amount within 4 months from the date of supply of copy of this order to this Court. It is also made clear that they are entitled for enhanced amount of compensation only after payment of deficit court fees to the High Court. If the deficit court fees is paid within specified time as fixed by this Court, the Registry will issue necessary certificate to them and then only they will be entitled for the enhanced amount of compensation.

In view of the judgment of Hon'ble Apex Court, the findings of Reference Court/Civil Judge (Senior Division), Amravati that though the appellant is entitled for enhanced compensation of Rs.18,91,908, but entitled for Rs.11,00,000/- only because he has paid court fee on Rs.11,00,000/- is illegal and, therefore, liable to be quashed and set aside. Respondents shall pay enhanced compensation of Rs.18,91,908/- alongwith accrued interest and all statutory benefit.
Appellant is directed to pay deficit court fee on Rs.7,91,908/-."

In Ashok Kumar & Anr. etc. vs State of Haryana, 2016 ALL SCR 778 (supra), the Apex Court also dealt with the issue of deficit Court fee while enhancing the compensation higher than the amount claimed. The Court concluded thus:

"We are of the view that when the learned single Judge and the Division Bench took the view that the claimants whose land was acquired by the State of Punjab under the notifications issued under Sections 4 and 6 of the Act, were entitled to enhanced compensation and the case of the appellants stood on the same footing, the appellant should have been given an opportunity of paying up the deficit court fee so that, like other claimants, they could also get enhanced compensation at the same rate as the others.

The learned single Judge and the Division Bench should not have, in our opinion, adopted a technical approach and denied the benefit of enhanced compensation to the appellants merely because they had not initially paid the proper amount of court fee.

We are, therefore, of the view that, in the present case, the Division Bench as well as the learned single Judge should have allowed the appellants to pay up the deficit court fee and awarded to them compensation at the higher rate or rates determined by them.
...........
"Having regard to the factual and legal position obtained above, we are of the considered view that the just and fair compensation in the case of appellants would be Rs. 200/- per square yard. Therefore, these appeals are disposed off fixing the land value at Rs. 200/- per square yard and the appellants shall also be entitled to all the statutory benefits. The amount as above shall be paid and deposited after adjusting the deficit court fee, if any, before the Executing Court within a period of three months from today."

The Apex Court in the case of Chandrashekhar & Ors vs Addl. Special Land Acquisition AIR 2009 SC
3012 enhanced compensation and granted 4 months to deposit the deficit court fee. The Court held thus:

"It is made clear that the enhanced compensation which has now been directed to be paid to the appellants shall be paid if the appellants shall deposit the requisite court fees on the aforesaid enhanced amount within four months from the date of supply of a copy of this order to the courts below."

Another important issue that arises is that can the Court enhance compensation when there is appeal of the Government/acquiring body pending but there is no cross appeal of the claimant. It would be relevant to refer to Order 41 Rule 33 C.P.C. The rule 33 of CPC is reproduced thus:

33. Power Of Court Of Appeal
The Appellate Court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection and may, where there have been decrees in cross-suits or where two or more decrees are passed in one suit, be exercised in respect of all or any of the decrees, although an appeal may not have been filed against such decrees:
Provided that the Appellate Court shall not make any order under section 35A, in pursuance of any objection on which the Court from whose decree the appeal is preferred has omitted or refused to made such order.''

It would be appropriate to refer to the judgment of the Apex Court in Pralhad & others vs. State of Maharashtra & another 2010 (1) SCC 458 wherein the power of the Court under Order 41 Rule 33 C.P.C. has been laid as follows:

18. The provision of Order 41 Rule 33 CPC is clearly an enabling provision, whereby the appellate Court is empowered to pass any decree or make any order which ought to have been passed or made, and to pass or make such further or other decree or order as the case may require. Therefore, the power is very wide and in this enabling provision, the crucial words are that the appellate court is empowered to pass any order which ought to have been made as the case may require.

The expression "order ought to have been made" would obviously mean an order which justice of the case requires to be made. This is made clear from the expression used in the said Rule by saying "the court may pass such further or other order as the case may require. This expression "case" would mean the justice of the case. Of course, this power cannot be exercised ignoring a legal interdict or a prohibition clamped by law.

21. In the instant case, the right of the land owner to receive the benefit under Section 23(1-A) of the Principal act is legally permissible in view of the majority decision in Paripoornanm. Therefore, the law declared by this Court in Paripoornan is binding on the High Court under Article 141 of the Constitution and the High Court is bound to follow the same, especially when an application has been made by the landowner under Order 41 Rule 33 CPC."

Reference to the case of the Madras High Court in The Land Acquisition Officer Cum vs Ramaswamy in Second Appeals No.484 and 485 of 2004 and CMP. Nos.3790 and 3791 of 2004 decided on 4 June, 2012 wherein the Court held thus:

"19. As per the dictum laid down by the Honourable Apex Court if the respondents are legally entitled to such enhanced compensation, it could be awarded even without cross appeal or any separate appeal. For that, we have to refer to other two judgments of the Honourable Apex Court reported in A.I.R. 1985 SC 1576 (Bhag Singh and others v. Union Territory of Chandigarh) and A.I.R. 1988 SC 1652 (Chimanlal v. special Land Acquisition Officer, Poona) also.

20. The Judgment of the Hon'ble Apex Court in Bhimasha v. Special Land Acquisition officer and another reported in (2008) 10 Supreme Court Cases 797 would also guide us to the effect that under Section 23 of the Land Acquisition Act, 1894, the party, who is claiming an enhanced compensation, was not bound by the quantum claimed by him and if the market value of the said land was found to be more than the rate claimed by the claimant, it should have been awarded as higher compensation subject to the payment of balance Court fee. "

It is settled legal position that with the object of awarding just and fair compensation, the appellate Court could grant higher compensation on cross appeals filed by the acquiring body/Government. It would be relevant to refer to Dondapati Narayana Reddy vs. Duggireddy Venkatanarayana Reddy (2001) 8 SCC 115 wherein the Apex Court held thus:

"Rules governing pleadings and leading of evidence have been incorporated to advance the interests of justice and to avoid multiplicity of litigation. ........the defendant-appellant has a right to seek the amendment of his written statement incorporating the plea sought to be introduced by way of proposed amendment. Such a prayer cannot be denied on hypertechnical grounds.

The amendment should, generally, be allowed unless it is shown that permitting the amendment would be unjust and results in prejudice against the opposite side which cannot be compensated by costs or would deprive him of a right which has accrued to him with the lapse of time. Amendment may also be refused, if such a prayer made separately, is shown to be barred by time."

Thus, it is no longer Res Integra that the Courts are duty bound to award 'Just & Fair' compensation and they can legally award Higher Compensation than claimed by the erstwhile Land owner on the basis of the surrounding facts, circumstances and evidence on record, subject to payment of deficit Court Fee, even where there is no appeal/cross appeal of the claimant.

Written By: Inder Chand Jain
Email: [email protected], Ph no: 8279945021