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Damages to the standing crop +The question relating to the value of larger extent of agricultural land, if required to be determined with reference to price fixed for small residential plot, = “When the value of a large extent of agricultural land has to be determined with reference to the price fetched by sale of a small residential plot, it is necessary to make an appropriate deduction towards the development cost, to arrive at the value of the large tract of land. The deduction towards development cost may vary from 20% to 75% depending upon various factors. Even if the acquired lands have situational advantages, the minimum deduction from the market value of a small residential plot, to arrive at the market value of a larger agricultural land, in the usual course, will be in the range of 20% to 25%. In this case, the Collector has himself adopted a 25% deduction which has been affirmed by the Reference Court and the High Court. We, therefore, do not propose to alter it.” Therefore, it is clear that mere reliance made by a Court on sale deeds of smaller residential area for determination of market value of larger agricultural area, the same will not render the determination illegal until and unless it is shown that the determination was not proper. 20. In the instant case, the average value of the sale­deeds relied upon by the Reference Court (Ext.1 and Ext.1/b) was Rs. 401/­ at the time of acquisition. Therefore, as the sale­deeds were in relation to smaller plots, the deduction of 37% was made by the Reference Court and thereafter, by allowing appropriate 10% increase in the value of the land from the date of the sale deeds upto the date of Notification under Section 4 of the Act, the Reference Court arrived at a figure of Rs.250/­ per decimal. The High Court while arriving at figure of Rs. 100/­ per decimal considered only the fact that the sale deeds relied upon were in relation to smaller plots and those sale deeds(Ext.1 and Ext.1/b) were related to homestead land and hence fixed Rs. 10,000/­ per acre as compensation. It completely failed to consider the increase in price of land and the deduction made by the 9Page 10 High Court is nearly 75% which is not in accordance with law. we have no other alternative but to set aside the order passed by the High Court and restore the award passed by the Reference Court.-The respondents are directed to pay the appellant the compensation in terms of the award passed by the Reference Court after adjusting the amount already paid within three months. There shall be no separate order as to costs.

published in http://judis.nic.in/supremecourt/filename=40470

Page 1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.5311 OF 2012
(arising out of SLP(C)No.34284 of 2011)
AHSANUL HODA  … APPELLANT
Versus
STATE OF BIHAR     … RESPONDENT
J U D G M E N T
SUDHANSU JYOTI MUKHOPADHAYA, J.
This   appeal   has   been   filed   by   the   claimant­
appellant against the judgment and order of the Patna
High   Court   dated   10.2.2011   by   which   the   High   Court
reduced   the   compensation   awarded   to   the   claimant,   by
fixing the lower market rate of the land in question
and   set   aside   the   part   of   the   order   passed   by   the
Reference Court granting Rs.10,000/­ towards damages of
standing crops.
2.   Certain lands in  Mauja Mothabari, Thana Katoria,
Pargana   Sarohi,   District   Bhagalpur   (now   Banka)   were
acquired   for   the   construction   of   the   Orni­reservoir.
Land   measuring   3.54   acres   of   Khata   No.111,   Khasra
No.2925 of same village belonging to the appellant was
also acquired. The Collector by an award order dated
16.10.1984 fixed the compensation of Rs.6513.60 for the
1Page 2
entire land based on market rate at Rs.16 per decimal.
No   amount   was   awarded   towards   damages   of   standing
crops.
3. The  Reference   Court  to   which   the   claims   of   the
land   owners   for   higher   compensation   were   referred,
determined the market value as Rs. 250/­ per decimal
i.e. Rs. 25,000/­ per acre.  The Reference Court based
its decision on two sale transactions submitted by the
claimant   dated   25.11.1980   and   16.10.1975   (Ext.1   and
Ext.1/b) relating to sale of plots in the neighbouring
area.   Considering the fact that the sale deeds were
related to small extent of land of nearby village and
the acquisition was related to a larger extent,   the
Reference   Court     was   of   the   view   that   certain
percentage   could   be   deducted   while   determining   the
value of the land in question. However, as sale deeds
were   of   the   earlier   period,     after   such   deduction,
appropriate increase in the value of the land from the
date of the sale deed to the date of the Notification
under   Section   4     of   the   Land   Acquisition   Act,   1894
(hereinafter referred to as ‘the Act’) was made.
4. The respondent preferred an appeal before the High
Court.    The High Court disposed of the said appeal by
impugned   judgment   dated   10.2.2011.   The     High   Court
2Page 3
modified   the   judgment   of   the   Reference   Court   with
regard to the market value by reducing the market rate
from Rs.250/­ per decimal to Rs.100/­ per decimal and
set   aside   the   part   of     the   order   whereby   sum   of
Rs.10,000/­ was granted by the Tribunal as damages of
standing crops.
5. During the pendency of the appeal before the High
Court   and   after   23   years   of   the   acquisition,   the
appellant received a sum of Rs. 5,69,531/­ on  4.7.2007
as per determination of  the Reference Court and paid a
sum   of   Rs   56,953/­   towards   tax.       The   effect   of
impugned judgment passed by the High Court is that the
claimant has to refund part of the amount received by
the claimant as compensation.
6. The   questions   that   arise   for   our   consideration
are:
(i)  Whether   the   market   value   as   fixed   by   the
Tribunal   is   excessive   as   contended   by   the
State of Bihar;
(ii)  Whether the Tribunal rightly compensated
the claimant for damages of standing crops.
7. The High Court by its impugned judgment modified
the compensation and set aside the part of the   order
3Page 4
relating to compensation   for standing crops on three
counts, namely;   (a) The sale deeds dated 25.11.1980
(Ext.1)   and   16.10.1975   (Ext.1/b)     related   to   smaller
area of  25 and  6 ½ decimals of land respectively; (b)
Aforesaid sale deeds do not relate to agricultural land
but  homestead land as  in the boundary of one of the
sale­deed ‘Masjid’ and ‘road’   is shown; (c)   OP­W­1,
Shri Ratneshwar Pd. Singh has stated that there was no
crop   standing   on   the     land   at   the   time   of   the
possession.
8. Learned   counsel   for   the   appellant   assailed   the
judgment   passed   by   the     High   Court   on   the   following
grounds:
(i) In  the  absence  of  any  other   evidence  except
the   sale   deeds   (Ext.1   and   Ext.1/b),     the
determination of market value is not based on any
evidence but on mere presumption and surmises.
(ii) The   High   Court   wrongly   relied   on   the
statement of OP­W­1, Ratneshwar   Pd. Singh,   who
was posted elsewhere at the time of   acquisition
of the land.   On the other hand,   the Reference
Court   decided   the   quantum   of   payment   towards
damages of standing crops on the basis of evidence
on record.
4Page 5
9. Learned counsel for the State justified the order
passed by the High Court.   It was contended that the
compensation   with   regard   to   larger   area   cannot   be
determined   on   the   basis   of   sale   deeds   related   to
smaller area.   As the sale deeds at Ext.1 and Ext.1/b
related   to   homestead   land   having   shown   ‘road’   or
‘masjid’ in the boundary,   no comparison can be made
with the agricultural land acquired for other purpose.
10. Before the Reference Court claimant produced seven
witnesses, AW­1 to AW­7 and three sale deeds, Ext.1,
Ext.1/a   and   Ext.1/b.     On   behalf   of   the   State,   one
witness OP­W­1, Ratneshwar Pd. Singh, an assistant to
the   Land   Acquisition   Officer,   Medium   Irrigation
Project,   Bhagalpur   and   the   two   valuation   Khatiyans,
Ext. A and A/1 were produced.
11. AW­6,   the   claimant,   himself   in   his   deposition
stated that 3.54 acres of his land acquired is ‘three
fasla’   (produced   three   crops   in   an   area)   and   was
irrigated  from the Orni river.  At the time of taking
possession by State,  potato, wheat and sugar­cane were
standing crops which were damaged causing a loss of Rs.
10,000/­ to Rs.12,000/­.   The market value of the land
at the time of acquisition was between Rs. 50,000/­ to
Rs. 60,000/­ per acre.  Similar statements were made by
5Page 6
other witnesses i.e. AW­1 to AW­5.  They supported the
claim of the claimant.
12. Kanhaiya Lall Ghosh, A.W.7, a deed writer proved
sale   deeds   Ext.   1   dated   25.11.1980,   Ext.   1/a     dated
6.10.1980   and   Ext.1/b     dated   16.10.1975.     He   stated
that he was the deed writer of Exts.1, 1/a and 1/b.  By
Ext.1/a,   Bibi   Rahana   Sultana   and   others   sold   70
decimals   of   land   for   consideration   of   Rs.7,000/­   on
6.10.1980.  By Ext.1/b  dated 16.10.1975, Seikh Janual
and others sold 6 ½  decimals of land for consideration
of Rs. 1500/­ .
13. Ratneshwar   Pd.   Singh,   OP­W­1   deposed   before   the
Reference   that   the   land   of   the   appellant   measuring
3.54 acres had  been acquired by the State vide  L.A.
Case   No.   76/81­82   and     department   paid   Rs.   5664/­
towards   value   of   the   land   and   Rs.   849.60     as
additional compensation; a sum of Rs. 6513.60 in total
was paid as compensation.  He specifically stated that
he   was   not   posted   at   the   time   of   acquisition   and
whatever he stated is based on the official record.
14. Ext. A and Ext. A/1,  valuation Khatiayan  mainly
contains Khata No.,   Khesra No., area   acquired, rate
per   acre,   value   of   the   land   determined   and     other
statutory benefits provided to one or other claimant.
6Page 7
Those Exts. A and A/1  do not show anything about the
market value of any land of the village or the nearby
village.
15. The   Reference   Court,     based   on   the   sale   deeds
Ext.1   and   Ext.1/b   and   considering     the   evidence   on
record,   determined the market value at Rs.250/­ per
decimal and allowed a sum of Rs.10,000/­ towards damage
of standing crops.
16. This  Court in number of cases has taken judicial
notice of the fact that there is a steady increase in
the market value of the  land and has also adopted the
procedure   for   determining   the   increased   market   value
and relied upon  the transaction at  a given rate per
year.
17. In  General   Manager,   Oil   and   Natural   Gas
Corporation Limited vs. Rameshbhai Jilvanbhai Patel and
Another  reported in (2008) 14  SCC 745,    this Court
observed   that   in   the   absence   of   other   acceptable
evidence, a cumulative increase of 10 to 15 per cent
is permissible with reference to acquisitions in  1990.
In the decades preceding 1990s, the quantum of increase
was considered to be less than 10 per cent per annum.
18. This Court in Sardar Joginder Singh vs. State of
Uttar Pradesh and Another (2008) 17 SCC 133,   noticed
7Page 8
that the said case related to acquisition in  the year
1979   and   relying     upon     the     award   related   to   an
acquisition of  1969 observed that the general increase
between 1969­79 can be taken to be around 8­10 per cent
per   annum.     If   this   increase   is   calculated
cumulatively, the total increase in 10 years would be
around 100 per cent.
19.   The   question   relating   to   the   value   of   larger
extent   of   agricultural   land,   if   required   to   be
determined   with   reference   to   price   fixed   for   small
residential   plot,   came   for   consideration   before   this
Court   in  Haridwar   Development   Authority   Vs.   Raghubir
singh and Others (2010)11 SCC 581.   In the said case,
this Court held as follows:
“When the value of a large extent of agricultural
land has to be determined with reference to the
price   fetched   by   sale   of   a   small   residential
plot,   it   is   necessary   to     make   an   appropriate
deduction towards the development cost, to arrive
at the value of the large   tract of land.   The
deduction towards development cost may vary from
20% to 75% depending upon various factors.   Even
if   the   acquired   lands   have   situational
advantages,     the   minimum   deduction   from   the
market   value   of   a   small   residential   plot,   to
arrive   at   the   market   value   of   a   larger
agricultural land,  in the  usual course, will be
in the range of 20% to 25%.   In this case,   the
Collector   has   himself   adopted   a   25%   deduction
which   has   been   affirmed   by   the   Reference   Court
and   the   High   Court.     We,     therefore,   do   not
propose to alter it.”
8Page 9
Therefore, it is clear that mere reliance made by
a Court on sale deeds of smaller residential area for
determination   of   market   value   of   larger   agricultural
area,     the   same   will   not render   the   determination
illegal   until   and   unless   it   is   shown   that   the
determination was not proper.
20. In   the   instant   case,   the   average   value   of   the
sale­deeds   relied   upon   by   the   Reference   Court   (Ext.1
and Ext.1/b) was Rs. 401/­ at the time of acquisition.
Therefore,   as   the   sale­deeds   were   in   relation   to
smaller plots,   the deduction of 37% was made by the
Reference   Court   and     thereafter,   by   allowing
appropriate 10% increase in the value of the land from
the   date   of   the   sale   deeds   upto   the   date   of
Notification under Section 4 of the Act,  the Reference
Court   arrived     at   a   figure   of   Rs.250/­   per   decimal.
The High Court while arriving at figure of Rs. 100/­
per   decimal   considered   only   the   fact   that   the   sale
deeds relied upon were in relation to smaller plots and
those   sale   deeds(Ext.1   and   Ext.1/b)   were   related   to
homestead land and hence fixed Rs. 10,000/­ per acre as
compensation.     It completely failed to consider the
increase in price of land and the deduction made by the
9Page 10
High   Court   is   nearly   75%   which   is   not   in   accordance
with law.
As Ext.1 and Ext.1/b which were related to smaller
area,     were   the   only   sale   deeds   available   for
comparison, the same were relied upon by the Reference
Court,   but   the   High   Court   erred   completely   in
disregarding the said sale­deeds and thus arrived at a
finding   of   Rs.100/­   per   decimal   as     market   value   on
mere presumption and surmises.   There was no evidence
on record to arrive at this value and, even if it was a
case of deduction, the High Court has not  given  any
reason in support of the same.
21. The   High   Court   also   committed   error     in   holding
that   the   sale   deeds   (Ext.1   and   Ext.1/b)   relate   to
homestead   land,   on   the   ground   that   a   ‘road’   and   a
‘masjid’  has been shown in the boundary  of one of the
exhibits.   From   the   copies   of   Ext.1   and   Ext.   1/b   on
record (Annexure P­12 Colly), we find no citation in
Ext.1 showing the land as homestead land.  On the other
hand   Ext.1/b   specifically   cites   that   the   land   is   an
agricultural land for which the annual revenue rent of
Rs.25 is payable.
22. The High Court disregarded the evidence adduced by
the   claimants   in   its   entirety   without   any   reason;
10Page 11
however,   it   relied   on   evidence   of   an   officer   of   the
State (OP­W­1) Ratneshwar Pd. Singh and set aside the
compensation in relation to the standing crops.   The
Reference Court has clearly recorded in its order that
the said State Officer was not posted in that area at
the time of acquisition and his knowledge was limited
to the official record.   The record was silent as to
the standing crops.     The Khatiyans (Ext.A and Ext.­
A/1)   were   also   not   relating   to   standing   crops.     The
fact   that   the   Collector   had   not   allowed   any   amount
towards   damage   of   standing   crops   and   that   no   such
amount is mentioned in the Khatiyan  does not mean that
no   standing   crop   was   there   at   the   time   of   taking
possession   of   the   land.     On   the   contrary,     the
witnesses   AW­1   to   AW­5   appeared   and   supported   the
statement   of   claimant   that   at   the   time   of   the
possession,   standing   crops   were   there   which   were
damaged causing loss to the extent of Rs.10,000 to Rs.
12,000/­.     During   their   cross   examination   the
respondents   could   not   extract   any   other   material
evidence against the claimants.
23. In view of the finding as recorded above, we have
no other alternative but to set aside the order passed
by the High Court and restore the award passed by the
11Page 12
Reference   Court.   The   impugned   judgment   passed   by   the
High Court is accordingly set aside and the appeal is
allowed.     The   respondents   are   directed   to   pay   the
appellant the compensation in terms of the award passed
by   the   Reference     Court     after   adjusting   the   amount
already paid within three months.   There shall be no
separate order as to costs.
……………………………………………………….J.
(G.S. SINGHVI )
……………………………………………………….J.
(SUDHANSU JYOTI MUKHOPADHAYA)
NEW DELHI,
JULY 1 , 2013.
12

 

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