/2022 INSC 0969/
REPORTABLE     
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6821 OF 2022
S. Shankaraiah Thr. GPA Holder & Ors.              …Appellants
Versus
The Land Acquisition Officer 
and Revenue Divisional Officer
Peddapali Karimnagar Dist. & Ors.           …Respondents
with
CIVIL APPEAL NO. 6823 OF 2022
with
CIVIL APPEAL NO. 6824 OF 2022
with
CIVIL APPEAL NO. 6825 OF 2022
J U D G M E N T
M.R. SHAH, J.
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1. Feeling   aggrieved   and   dissatisfied   with   the   impugned
common   judgment   and   order   dated   06.12.2013   passed   by   the
High Court of Andhra Pradesh at Hyderabad in respective first
appeals No. 1634 of 2001 and other allied appeals, the original
land   owners/claimants   have   preferred   the   present   appeals
seeking   enhancement   of   the   amount   of   compensation   for   the
lands acquired.
2. Large   extent   of   land   in   different   survey   number   in   Adrial
Village   of   Manthani   Mandal,   Karimnagar   District   came   to   be
acquired   by   the   State   Government   for   the   benefit   of   Singareni
Collieries   Company   Limited.     The   lands   were   acquired   for   the
purposes of excavation of coal.   Notification under Section 4(1)
of the Land Acquisition Act, 1894 (hereinafter referred to as ‘the
Act,   1894’)   came   to   be   issued   on   13.05.1985.     Declaration
under   Section   6   of   the   Act   1894   was   issued   on   31.07.1985.
The   Land   Acquisition   Officer   passed   the   awards   in   the   year
1987,   fixing   the   market   value   for   the   acquired   lands   at
Rs.7,000/­   per   acre   for   Category   1   –   Dry   Lands   under
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Cultivation   and   at   Rs.6000/­   per   acre   for   Category   2   –   Dry
Lands   Left   Fallow.     Not   satisfied   with   the   compensation
awarded   by   the   Land   Acquisition   Officer,   the   land   owners
sought references under Section 18 of the Act, 1894.   The land
owners claimed the compensation at Rs.2 lakhs per  acre.   The
Reference Court fixed 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   sub­soil
mineral rights.   By the impugned common judgment and order
the High Court has determined and awarded the compensation
@   Rs.80,000/­   per   acre   considering   the   market   value   of   the
land   Rs.1,23,000/­   per   acre   and   thereafter   deducting   1/3 rd
.
The   High   Court   has   also   in   addition   awarded   Rs.10,000/­   per
acre as part of the market value for sub­soil rights.  
2.1 Feeling   aggrieved   and   dissatisfied   with   the   impugned
common   judgment   and   order   passed   by   the   High   Court
determining   and   awarding   the   compensation   at   Rs.80,000/­
per   acre   and   Rs.10,000/­   per   acre   for   sub­soil   rights   on
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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
very   impugned   common   judgment   and   order   the   beneficiary   –
Singareni Collieries Company Limited approached this Court by
way of special leave petitions which have been dismissed.   The
review   applications   are   also   dismissed.     Therefore,   the   short
question   which   is   posed   for   consideration   before   this   Court   is
whether the amount of compensation determined / awarded by
the   High   Court   is   required   to   be   enhanced   in   the   appeals
preferred by the original claimants/land owners?
3. Learned   Counsel   appearing   on   behalf   of   the   appellants
has   submitted   that   while   determining/awarding   the
compensation the Hon’ble High Court has not appreciated that
the   petitioners   were   the   absolute   owners   of   the   land   including
the sub­soil minerals and were not merely tenure holders.  It is
submitted   that   therefore   while   determining   the   amount   of
compensation for the land acquired claim for sub­soil minerals
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rights was also required to be considered.   It is submitted that
in   the   impugned   judgment   and   order   the   Hon’ble   High   Court
has   also   specifically   given   the   findings   that   the   nature   of
deposits existing on the surface or the sub­soil of a land would
play   an   important   role   and   if   there   are   any   deposits   of   rare
minerals   or   precious   stones,   that   would   add   to   the   market
value of the land.  It is submitted that though the Hon’ble High
Court   has   observed   that   it   is   not   proper   for   the   Land
Acquisition   Officer   or   the   Civil   Court   to   separately   award   the
compensation   towards   sub­soil   mineral   rights,   thereafter   it   is
observed that it is permissible to take the fact or into account,
while determining the market value.
3.1. It   is   further   submitted   by   learned   counsel   appearing   on
behalf   of   the   land   owners/claimants   that   even   otherwise   the
acquisition was solely for the purpose of excavation of the coal
and   there   was   no   other   purpose   for   the   acquisition   and   the
entire   acquired   land   is   being   excavated   on   the   basis   of   the
estimates   of   the   coal   reserves   identified   therein,   the   Hon’ble
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High   Court   has   erred   in   deducting   1/3 rd
  towards   the
development.  It is submitted that since the entire land is to be
mined,   there   is   no   wastage   of   land   on   account   of   any
developmental activities, such as roads, sewage lines, parks etc.
which   are   required   to   be   carved   out   in
industrial/commercial/housing   layouts.     It   is   submitted   that
therefore,   the   deduction   from   the   compensation   determined
may not be permissible in absence of any justification for such
deduction as the entire land is having coal reserves.  Reliance is
placed   upon   the   decision   of   this   Court   in   the   case   of   Nelson
Fernandes   &   Ors.   versus   Special   Land   Acquisition   Officer
South Goa & Ors.  reported in (2007) 9 SCC 447.
4. Shri A. Mariarputham, learned Senior Advocate appearing
on   behalf   of   the   respondents   while   opposing   the   present
appeals   has   submitted   that   the   amount   determined   by   the
Hon’ble   High   Court   which   includes   Rs.10,000/­   per   acre
towards   the   coal   deposits,   the   same   is   not   required   to   be
interfered with by this Hon’ble Court.
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4.1 Now   so   far   as   1/3 rd
  deduction   made   by   the   Hon’ble   High
Court   from   Rs.1,23,000/­   per   acre   it   is   submitted   that   as   per
the   settled   position   of   law   there   shall   be   an   appropriate
deduction   towards   the   development   and   therefore   1/3 rd
deduction   can   be   said   to   be   just   and   reasonable   deduction
towards the development, which is not required to be interfered
with.
Making   above   submissions,   it   is   prayed   to   dismiss   the
present appeals by further submitting that as such the appeals
preferred   by   the   respondents   ­   Singareni   Collieries   Company
Ltd.   &   Ors.   have   been   dismissed   by   this   Court   and   the
judgment   and   order   passed   by   this   Hon’ble   High   Court   has
been confirmed by this Court.
5. Heard   learned   counsel   appearing   on   behalf   of   the
respective parties at length.
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6. By   the   impugned   common   judgment   and   order   the   High
Court has determined and awarded Rs.80,000/­ per acre.   The
High Court has also granted/awarded Rs.10,000/­ for sub­soil
rights   on   account   of   coal   deposits.     Feeling   aggrieved   and
dissatisfied   with   the   impugned   common   judgment   and   order
passed   by   the   High   Court,   the   original   claimants/land   owners
have preferred the present appeals seeking enhancement of the
amount of compensation.
6.1 At the outset, it is required to be noted that so far as the
appeals   preferred   by   the   respondents   ­   Singareni   Collieries
Company   Ltd.   &   Ors.,   the   same   have   been   dismissed   by   this
Court.
6.2 While   determining   and   awarding   the   compensation   at
Rs.80,000/­ per acre the High Court has considered the market
value   of   the   land   in   question   at   Rs.1,23,000/­.     However,
thereafter has deducted 1/3 rd
 towards the development charges
etc.   and   thereafter   has   awarded   the   actual   amount   of
compensation at Rs.80,000/­ per acre.   It is the case on behalf
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of   the   claimants/land   owners   that   the   lands   in   question   have
been acquired for the benefit of the mining company/ Singareni
Collieries   Company   Ltd.   which   is   to   be   used   for   excavation   of
coal.    The  coal is  already  existed in  the  lands acquired.   Since
the  entire land  is to  be mined and the coal is to  be excavated,
there   is   no   wastage   of   land   on   account   of   any   developmental
activities such as roads, sewage lines, parks etc.  In that view of
the   matter,   there   is   no   development   required   and   therefore
1/3 rd
  deduction   is   not   warranted   at   all.     Identical   question
came   to   be   considered   by   this   Court   in   the   case   of   Nelson
Fernandes   (supra)   and   after   taking   into   consideration   the
earlier   decision   of   this   Court   in   the   case   of   Basavva   vs.   Spl.
Land   Acquisition   Officer ,   (1996)   9   SCC   640,   in   which   this
Court has held that the purpose for which acquisition is made
is   also   a   relevant   factor   for   determining   the   market   value   and
the purpose for which the land is acquired must also be taken
into   consideration,   thereafter   in   paragraph   29   it   is   observed
and held as under:
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“29.   Both   the   Special   Land   Acquisition   Officer,   the
District   Judge   and   of   the   High   Court   have   failed   to
notice   that   the   purpose   of   acquisition   is   for   Railways
and   that   the   purpose   is   a   relevant   factor   to   be   taken
into   consideration   for   fixing   the   compensation.   In   this
context,   we   may   usefully   refer   the   judgment   of   this
Court   in   Viluben   Jhalejar   Contractor   v.   State   of
Gujarat   [(2005) 4 SCC 789 : JT (2005) 4 SC 282] . This
Court   held   that   the   purpose   for   which   the   land   is
acquired must also be taken into consideration in fixing
the   market   value   and   the   deduction   of   development
charges.   In   the   above   case,   the   lands   were   acquired
because   they   were   submerged   under   water   of   a   dam.
Owners   claimed   compensation   of   Rs   40   per   sq  ft.   LAO
awarded compensation ranging from Rs 35 to Rs 60 per
sq   m.   Reference   Court   fixed   the   market   value   of   the
land   at   Rs   200   per   sq   m   and   after   deduction   of
development   charges,   determined   the   compensation   @
Rs   134   per   sq   m.   In   arriving   at   the   compensation,
Reference   Court   placed   reliance   on   the   comparative
sale of a piece of land measuring 46.30 sq m @ Rs 270
per   sq   m.   On   appeal,   the   High   Court   awarded
compensation   of   Rs   180   per   sq   m   in   respect   of   large
plots  and   Rs  200   per   sq m   in  respect  of   smaller   plots.
On further appeal, this Court held that since the lands
were acquired for being submerged in water of dam and
had no potential value and the sale instance relied was
a   small   plot   measuring   46.30   sq   m   whereas   the
acquisition   in   the   present   case   was   in   respect   of   large
area,   interest   of   justice   would   be   subserved   by
awarding   compensation   of   Rs   160   per   sq   m   in   respect
of   larger   plots   and   Rs   175   per   sq   m   for   smaller   plots.
In   Basavva   v.   Spl.   Land   Acquisition   Officer   [(1996)   9
SCC 640 : JT (1996) 5 SC 580] this Court held that the
purpose for which acquisition is made is also a relevant
factor for determining the market value.”
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6.3. Applying the law laid down by this Court in the aforesaid
decision   to   the   facts   of   the   case   on   hand   and   when   the
acquisition   is   solely   for   the   purpose   of   excavation   of   coal   and
the entire land is acquired on the basis of the estimates of the
coal   reserve   identified   and   the   entire   land   is   to   be   mined   and
used  and  no   further  developmental   activity  is  required,  we are
of the opinion that in the facts and circumstances of the case,
the   High   Court   has   erred   in   deducting   1/3 rd
  towards   the
developmental   activities.     The   additional   amount   awarded   by
the   High   Court   at   Rs.10,000/­   per   acre   on   account   of   coal
deposits is not required to be interfered with more particularly
when the same has been confirmed by this Court in as much as
the   appeals  preferred  by  the  respondents  have  been  dismissed
by this Court.
7. In   view   of   the   above   and   for   the   reason   stated   above,
present   appeals   succeed   in   part.     It   is   held   that   the   original
claimants   shall   be   entitled   to   the   compensation   for   the   lands
acquired at Rs.1,23,000/­ per acre with other statutory benefits
which  may   be  available  under   the  provisions   of  the  Act,   1894.
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In   addition,   the   original   claimants   shall   also   be   entitled   to
Rs.10,000/­ per acre as awarded by the High Court on account
of coal deposits.
The impugned common judgment and order passed by the
High Court 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 no order as to costs.
…………………………..J.
        (M. R. SHAH)
…………………………...J.
       (KRISHNA MURARI)
New Delhi;
November 9, 2022.
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