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Land acquisition Act – Under sec.51 A no court can discard the comparable registered sale deed merely because no one belongs to the sale deed not examined = ] Court should considered the highest sale value if not discard for any reasons = when acquisition was not for house sites, no deduction can be done for amenities = claimants are entitled interest on solatium also = Since claimed less amount , the apex court fixed compensation as prayed by claimant= Himmat Singh and others ….Appellants versus State of M.P. and another ….Respondents = published in http://judis.nic.in/supremecourt/imgst.aspx?filename=41038

Land acquisition Act – 

Under sec.51 A no court can discard the comparable registered sale deed merely because no one belongs to the sale deed not examined = ]

Court should considered the highest sale value if not discard for any reasons = 

when acquisition was  not for house sites, no deduction can be done for amenities = 

claimants are entitled interest on solatium also =

Since claimed less amount , the apex court fixed compensation as prayed by claimant=

 

Whether the Reference Court and the  High  Court  committed  serious  error  by excluding various sale instances  only  on  the  ground  that  the  contents thereof were not proved by examining the buyer and the  seller. =

 Shri  Lalit

invited the Court’s attention to Section 51-A of the Act and  the  judgments

in Land Acquisition Officer and  Mandal  Revenue  Officer  v.  V.  Narasaiah

(2001) 3 SCC 530, Cement Corporation of India v. Purya (2004) 8 SCC 270  and

Deputy  Collector,  Land  Acquisition,  Gujarat  and  another  v.   Madhubai

Gobarbhai and another (2009) 15 SCC 125 and argued that the  view  expressed

by the Reference Court and approved by the learned Single Judge of the  High

Court on the admissibility and relevance of the  copies  of  the  registered

sale deeds is liable to be overturned.

 

 Since all the sale deeds produced by the  appellants  were  registered

documents  and  authenticity  thereof  had  not  been  questioned   by   the

respondents, the Reference Court and the High Court could not  have  ignored

the provisions of Section 51-A and discarded majority  of  the  sale  deeds.

This issue is no longer res integra and must be answered in  favour  of  the

appellants in view of the judgments in Land Acquisition Officer  and  Mandal

Revenue Officer v. V. Narasaiah (supra),  Cement  Corporation  of  India  v.

Purya (supra) and Deputy Collector, Land Acquisition,  Gujarat  and  another

v. Madhubai Gobarbhai and another (supra).

 

Whether the Reference Court and the High Court committed serious  error  by  not  taking

into consideration the highest value reflected in the  sale  deeds  Exhibits

P4 and P5 for the purpose of determination of compensation. =

 In  support  of

this argument,  Shri  Lalit  relied  upon  the  judgments  in  Rao  Bahadur,

Collector of Madras 1969 1 MLJ 45, State of Punjab v. Hansraj (1994)  5  SCC

734, Anjani Molu Dessai v. State of Goa (2010) 13 SCC 710, Mehrawal  Khewaji

Trust (Registered), Faridkot and  others  v.  State  of  Punjab  and  others

(2012) 5 SCC 432. 

 

“It is clear that when there are several exemplars with  reference  to

      similar lands, it  is  the  general  rule  that  the  highest  of  the

      exemplars, if it is satisfied that it is a bona fide transaction,  has

      to be considered and accepted. When the  land  is  being  compulsorily

      taken away from a person, he is entitled to the  highest  value  which

      similar land in the locality is shown to have fetched in a  bona  fide

      transaction entered into between a willing  purchaser  and  a  willing

      seller near about the time of the acquisition. In our view,  it  seems

      to be  only  fair  that  where  sale  deeds  pertaining  to  different

      transactions are relied on behalf of the Government,  the  transaction

      representing the highest value should be preferred to the rest  unless

      there are strong circumstances justifying a different  course.  It  is

      not desirable to take an average of various sale deeds  placed  before

      the authority/court for fixing fair compensation.”

Whether the  deductions  made  by  the

Reference Court and approved by the High  Court  are  clearly  impermissible

because the land had been acquired for  construction  of  Broad  Gauge  Rail

Line and not for carving out  a  lay  out  for  residential,  industrial  or

commercial purpose which  necessarily  involves  construction  of  road  and

providing of basic amenities like electricity, water and sewerage and  large

area is required to be left out as open spaces.  =

 

In Nelson Fernandes v. Land Acquisition  Officer  this  Court  has

      discussed the question of development charges. That was a  case  where

      the acquisition was for laying a railway line. This Court  found  that

      the land under acquisition was situated in an area which was  adjacent

      to the land already acquired for the same purpose i.e.  for  laying  a

      railway line. In para 29, the Court observed that the Land Acquisition

      Officer, the District Judge and the High Court had  failed  to  notice

      that the purpose of acquisition was for  the  Railways  and  that  the

      purpose is a relevant factor to be taken into consideration for fixing

      the compensation.

Shri  Lalit  also  referred

to documents produced by the appellants showing damage  to  their  land  and

argued that the Reference Court and the High Court committed  serious  error

by not awarding compensation for severance caused  due  to  construction  of

railway line and damage caused due to  digging.   

Whether   the  appellants  are entitled to interest on solatium.=

 

 

 

 

          we would adopt the first mode and hold that  the  appellants

are entitled to compensation at the rate of Rs.8.93 per sq. ft.

 

33.   We may have ordained payment of compensation to the appellants at  the rate of 8.93 per sq. ft. (rounded off to  Rs.9  per  sq.  ft.),  

but  having

regard to the fact that in the claim filed before the Reference Court,  they had limited their claim to Rs.5 per sq. ft. and  no  application  was  filed either  before  the  High  Court  or  this  Court  for  payment  of   higher compensation, we would restrict the enhancement to Rs.5 per sq.ft.

 

34.   We agree with Shri Lalit that in view of the law laid down  in  Sunder

v. Union of India (2001) 7 SCC  211,  Chimanlal  Kuberdas  Modi  v.  Gujarat

Industrial Development Corporation (2010)  10  SCC  635,  Nadirsha  Shapurji

Patel v. Collector and LAO (2010) 13  SCC  234,  R.  Saragapani  v.  Special

Tahsildar, Karur – Dindigul Broadguage Line (2011) 14  SCC  177  and  Bharat

Heavy Electricals Limited v. R.S. Avtar Singh and Company (2013) 1 SCC  243,

the appellants are entitled to interest on solatium.

 

35.   So far as the appellants’ plea for award of damages caused on  account

of removal of fencing of Sant  Farm,  loss  of  earning  due  to  damage  to

crops/farming operation and destruction of well  existing  on  the  land  is

concerned, we do not consider it necessary to deal  with  the  same  because

the issue is being dealt with in C.A. No.1248 of 2007.

 

36.   In the result, the appeal is allowed, the impugned  judgment  and  the

award of the Reference Court are set aside  and  it  is  declared  that  the

appellants are entitled to compensation at the rate of Rs.5 per sq.ft.  with

other statutory benefits.  They shall also be entitled to  interest  on  the

element of solatium.             

NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1247 OF 2007
Himmat Singh and others ….Appellants

versus

State of M.P. and another
….Respondents

 

J U D G M E N T

G.S. SINGHVI, J.
1. Feeling dissatisfied with the meagre enhancement granted by the
learned Single Judge of the Madhya Pradesh High Court in the amount of
compensation determined by II Additional District Judge, Shivpuri
(hereinafter described as, ‘the Reference Court’), the appellants have
filed this appeal.

2. By notification dated 28.5.1987 issued under Section 4(1) of the Land
Acquisition Act, 1894 (for short, ‘the Act’), which was published on
12.6.1987, the Government of Madhya Pradesh acquired the appellants’ land
measuring 3.627 hectares comprised in Survey Nos.2, 10, 20, 22, 46, 48 and
166 of Village Jagatpur, Tehsil Kolaras, District Shivpuri for construction
of Broad Gauge Rail Line by the Central Railway. Another parcel of land
measuring 0.951 hectares comprised in Survey No.18, of which the appellants
were the occupancy tenants, was also acquired by the same notification. The
possession of the acquired land was taken on 30.11.1987. The Land
Acquisition Officer passed an award dated 26.8.1989 and held that for the
land measuring 3.627 hectares, the appellants are entitled to total
compensation of Rs.16,419 with solatium of Rs.4,926 and interest amounting
to Rs.985. For the land comprised in Survey No.18, no compensation was
awarded to the appellants. Instead, compensation was paid to respondent
Nos.3 and 4, namely, Jagdish Narayan s/o Mool Chand and Chandra Mohan s/o
Ram Dayal, whose names were recorded in the revenue records.

3. The appellants did not feel satisfied and filed applications under
Section 18 of the Act for determination of the amount of compensation by
the Court. They also filed an application under Section 30 of the Act and
pleaded that respondent Nos.3 and 4 are not entitled to receive any
compensation. Thereupon, the Collector made a reference to District Judge,
Shivpuri. The latter assigned the cases to the Reference Court. The
reference applications filed by the appellants were registered as Civil
Miscellaneous Case No.3/1991 and 13/1998 respectively and the application
filed under Section 30 was registered as Civil Miscellaneous Suit
No.12/1998.

4. In Civil Miscellaneous Case No.3/1991, the appellants prayed for
award of compensation at the rate of Rs.5 per square yard. They pleaded
that the acquired land has good development potential and the Land
Acquisition Officer committed serious error by treating the same as
agricultural land. The appellants also claimed compensation of Rs.18 lacs
by alleging that due to laying of railway line, their lands were bifurcated
and its value was considerably diminished. They further alleged that the
authorities of Central Railway had illegally taken possession of their
land and the earth was dug out from an area measuring 6 hectares rendering
the entire land unfit for cultivation.

5. The respondents contested the claim petition and pleaded that the
Land Acquisition Officer did not commit any illegality by fixing market
value of the acquired land by relying upon the sale deeds relating to
agricultural lands.

6. On the pleadings of the parties, the Reference Court framed the
following issues:

“(i) Whether compensation determined by the Land Acquisition Officer
is insufficient and improper and contrary to the provisions of Section
23 of the Land Acquisition Act?

(ii) Whether the petitioners are entitled to higher compensation? If
yes, to what extent?

(iii) Relief and costs.”

 

7. In support of the claim, appellant No.1 – Himmat Singh examined
himself as PW-1 and produced a number of documents including sale deeds
marked as Exhibits P1 to P12. He stated that on the date of acquisition,
the land was fully developed for agricultural purposes; that there were
several Government offices / establishments and residential premises near
the acquired land. PW-1 further stated that there are metalled roads of the
PWD on the North and South of the acquired land and that 90% of the
Government offices of Kolaras Sub-Division are situated at Jagatpur, which
was on Agra-Mumbai National Highway. Still further, PW-1 stated that he
and his brothers have a farmhouse known as ‘Sant Farm’ at Jagatpur. In the
cross-examination, PW-1 admitted that the acquired land does not fall
within Kolaras Municipality and that he had never sold his land prior to
the disputed acquisition. PW-1 denied the suggestion that in the
application filed by him, value of the land was shown as Rs.50,000 per
hectare. The second witness examined by the appellants, namely, Rajender
Kumar Srivastava stated that distance between the Dak Bungalow and the
railway station is about one kilometer and Agra-Bombay Road is at a
distance of about one furlong from the Dak Bungalow. He also stated that
water, electricity and scavenging facilities have been provided by
Municipal Committee, Jagatpur. In cross-examination, Shri Srivastava
admitted that Jagatpur has been divided into two parts, one of which comes
under the Municipal Committee and the other is in the village and that the
Municipal Committee does not provide any facility to the area falling
outside its jurisdiction. Another witness examined by the appellants was
Damodar Prasad. In cross-examination, he admitted that large number of
Government offices of Kolaras come under the jurisdiction of the Municipal
Committee and that a specific notification had been issued for inclusion of
Sant Farm within the jurisdiction of the Municipal Committee. Rishabh Chand
(PW-5) stated that he had sold land measuring 825 sq. ft. for Rs.9,000 and
market value of that land is Rs.6,600 per hectare. In cross-examination, PW-
5 gave out that his land was not fit for agricultural purposes and that the
same can be utilised for building construction.

8. On behalf of the respondents, seven witnesses were examined. Ram
Niwas Sharma (DW-1) stated that Kolaras, Gayatri Colony and Sant Farm come
within the jurisdiction of Kolaras Municipal Committee. In cross-
examination, DW-1 admitted that large number of Government offices of
Kolaras are situated in Village Jagatpur. Gaya Prasad (DW-3) stated that
Jagatpur and Kolaras are abutting each other; that there were several
Government offices, Court buildings and Advocates’ offices and that there
were metalled roads on the North and South of the acquired land and a
private colony has been constructed in the vicinity. Dharmender (DW-7) made
general statement about the nature of the acquired land.

9. After analysing the evidence produced before it, the Reference Court
decided the matter vide judgment dated 23.12.1999 and held that the Land
Acquisition Officer committed an error by fixing market value on the
assumption that the acquired land could be used only for agricultural
purposes. In the opinion of the Reference Court, the determination made by
the Land Acquisition Officer was unfair, arbitrary and contrary to the
provisions of Section 23(1) of the Land Acquisition Act. The Reference
Court then referred to the judgments of this Court in Chiman Lal v. Special
Execution Officer, Poona AIR 1988 SC 1652, M/s. Printer House Pvt. Ltd. v.
Siyedan AIR 1995 SC 1160, Shivamma v. Assistant Commissioner and Land
Acquisition Officer AIR 1996 SC 2886 and held that only three sale deeds
marked as Exhibits P7 to P9 can be taken into consideration for the purpose
of determination of compensation. The Reference Court held that value of
the acquired land cannot be less than Rs.3 per sq. ft. The Reference Court
made 25% deduction towards development charges and 25% towards cost of
development. In this manner, the rate of compensation was reduced from Rs.3
to Rs.1.5 per sq. ft. The Reference Court made further deduction of 50% on
the ground that the sale instances relied upon by the appellants were in
respect of very small parcels of land as compared to the acquired land and
held that the appellants are entitled to Rs.3,08,295 as market value for
3.627 hectares land, an additional amount at the rate of 12% per annum from
12.6.1987 to 30.11.1987, i.e., the date on which possession was taken along
with interest at the rate of 9% for a period of one year from 1.12.1987 and
thereafter at the rate of 15% per annum. The Reference Court also
determined the shares of the private respondents.

10. By another judgment dated 11.8.2000, the Reference Court disposed of
Civil Miscellaneous Suit No.12/1998, registered on the basis of application
filed by the appellants under Section 30 of the Act and Civil Miscellaneous
Suit No.13/1998 registered on the basis of application filed under Section
18 of the Act in respect of land measuring 0.951 hectare comprised in
Survey No.18.

11. After considering the pleadings of the parties, the Reference Court
framed the following issues:

“(i) Whether compensation determined by the Land Acquisition Officer,
Shivpuri, is insufficient and improper and contrary to the provisions
of Section 23 of the Land Acquisition Act?
(ii) Whether the petitioners are entitled to higher compensation? If
yes, to what extent?
(iii) Whether the application for reference made by the petitioners is
within limitation?

(iv) Relief and Costs.
Additional Issue:
(v) Whether petitioners are in cultivatory possession of the acquired
lands and hence the owners of the lands under law and therefore
entitled to receive amount of compensation?”
The Reference Court took cognizance of the oral and documentary evidence
produced by the parties and held that being legal heirs of Sant Singh and
farmers in occupation the appellants are owners of the lands. The Reference
Court noted that at the time of entering his name in Panch Sala Khasra
(Exhibit P4), Chandra Mohan (respondent No.4 therein) was only 5 years old
and held that he could not be treated as farmer in occupation for the
purpose of being treated as a person entitled to receive the amount of
compensation. The Reference Court then considered the question whether the
compensation awarded by the Land Acquisition Officer was insufficient and
answered the same in affirmative. For arriving at this conclusion, the
Reference Court assigned the following reasons:

“Now what is to be seen is ‘Whether future potentiality of
construction of buildings existed in the lands acquired?’ Petitioners
have examined Himmat Singh (P.W.1) who has stated that the date on
which the lands were acquired, it was fully developed for agricultural
purposes and there were several government offices e.g. Tehsil, S.D.O.
Office, B.D.O. Office, Forest Department, Residence of Civil Judge,
Sub-Jail, Silk Industry Center, Rest House, Hospitals etc., near the
acquired lands and all of the above are residential houses wherein
Doctors and Advocates are also living. Apart from this, there is a
metalled road of P.W.D. on the south of the lands towards Village Rai
and on the north there is a metalled road of P.W.D. going towards
Village Mohara. On the south there is an ancient temple on which a
huge fair is celebrated every year. More than 90% of the Government
Offices of the Kolaras Sub Division are situated in Jagatpur and
Jagatpur is situated near the Agra-Mumbai National Highway and a
metalled road goes upto Sant Farm from this Agra-Mumbai National
Highway. These statements of the witness have not been challenged
during his cross examination.
Apart from him, another witness of the petitioner namely Rishabh Chand
(P.W.2) in his statement has stated that he is an Ex-M.L.A. and
Chairman of Kolaras. The entire development of Kolaras is presently
towards Jagatpur side. Sant Farm is only 1/2 Km. from the A.B. Road
and there are Quarters of Jail employees, Indira Colony and Residence
of the Judge, Quarters and houses of the Railway employees near the
farm. The entire development activities of Jagatpur is taking place
towards Sant Farm. Patwari has also stated that Jagatpur and Kolaras
are abutting each other. There are several government offices,
Advocates’ offices, Court buildings in Jagatpur. Residence of the
Judge is adjoining Sant Farm. College too is very near to it and there
is a large habitation around Sant Farm. There is a road and habitation
on the north of Sant Farm and on the south there is a temple and
several persons of Kolaras are visiting this temple. On the south is a
metalled road of P.W.D. going towards village Rai and on the east of
the Sant Farm there are several government houses. A Private colony
has been constructed on Survey nos. 161 and 163. Hence it is clear
from the above that the acquired lands are close to the residential
lands and bore potential of construction of buildings at the time of
acquisition. In the circumstances it is clear that the determination
of compensation of these lands by treating them as agricultural lands
is unfair, arbitrary and insufficient and also contrary to the
provisions of Section 23[1] of the Land Acquisition Act. Resultantly,
Issue no.l is hereby decided in affirmative i.e. Yes.”

The Reference Court relied upon sale deeds Exhibits P7 to P9 and concluded
that market value of the acquired land is Rs.3 per sq. ft. The Reference
Court then applied various deductions and held that the appellants are
entitled to compensation of Rs.80,240/- for land measuring 1,69,805 sq. ft.
and by adding 12% per annum from 12.6.1987 up to the date of taking lawful
possession, i.e., 30.11.1987, the appellants are entitled to Rs.4,493.
The Reference Court also awarded solatium at the rate of 30% of the market
value in terms of Section 23(2) of the Act and declared that the appellants
are entitled to total compensation of Rs.1,08,904 with interest at the rate
of 9% per annum for the first year and 15% per annum for the remaining
period till the date of actual payment. However, Civil Miscellaneous Suit
No.13/1998 registered on the basis of reference made by the Collector under
Section 18 was held to be barred by time.

12. The appellants and Union of India challenged the judgments of the
Reference Court by filing appeals under Section 54 of the Act. The learned
Single Judge referred to the oral and documentary evidence produced by the
parties and held that the Reference Court did not commit any error by
holding that market value of the acquired land cannot be more than Rs.6 per
sq. ft. The learned Judge made various deductions and held that market
value of the acquired land would be Re.1 per sq.ft. The appeals were
accordingly disposed of by declaring that the appellants are entitled to
compensation for the land acquired vide notification dated 28.5.1987 at the
rate of Re.1 per sq. ft with other statutory benefits like solatium and
interest.

13. Shri U. U. Lalit, learned senior counsel for the appellants argued
that the Reference Court and the High Court committed serious error by
excluding various sale instances only on the ground that the contents
thereof were not proved by examining the buyer and the seller. Shri Lalit
invited the Court’s attention to Section 51-A of the Act and the judgments
in Land Acquisition Officer and Mandal Revenue Officer v. V. Narasaiah
(2001) 3 SCC 530, Cement Corporation of India v. Purya (2004) 8 SCC 270 and
Deputy Collector, Land Acquisition, Gujarat and another v. Madhubai
Gobarbhai and another (2009) 15 SCC 125 and argued that the view expressed
by the Reference Court and approved by the learned Single Judge of the High
Court on the admissibility and relevance of the copies of the registered
sale deeds is liable to be overturned. Shri Lalit further argued that the
Reference Court and the High Court committed serious error by not taking
into consideration the highest value reflected in the sale deeds Exhibits
P4 and P5 for the purpose of determination of compensation. In support of
this argument, Shri Lalit relied upon the judgments in Rao Bahadur,
Collector of Madras 1969 1 MLJ 45, State of Punjab v. Hansraj (1994) 5 SCC
734, Anjani Molu Dessai v. State of Goa (2010) 13 SCC 710, Mehrawal Khewaji
Trust (Registered), Faridkot and others v. State of Punjab and others
(2012) 5 SCC 432. Shri Lalit then argued that the deductions made by the
Reference Court and approved by the High Court are clearly impermissible
because the land had been acquired for construction of Broad Gauge Rail
Line and not for carving out a lay out for residential, industrial or
commercial purpose which necessarily involves construction of road and
providing of basic amenities like electricity, water and sewerage and large
area is required to be left out as open spaces. Shri Lalit also referred
to documents produced by the appellants showing damage to their land and
argued that the Reference Court and the High Court committed serious error
by not awarding compensation for severance caused due to construction of
railway line and damage caused due to digging. In the end, Shri Lalit
relied upon the judgments of this Court in Sunder v. Union of India (2001)
7 SCC 211 and R. Saragapani v. Special Tahsildar, Karur – Dindigul
Broadguage Line (2011) 14 SCC 177 and argued that the appellants are
entitled to interest on solatium.

14. Shri R. K. Khanna, learned Additional Solicitor General appearing for
the Union of India supported the impugned judgment and argued that the
appellants are not entitled to further enhancement in the compensation
determined by the High Court. Shri Khanna argued that the sale instances
produced by the appellants were in respect of very small parcels of land
and the same could not supply basis for fixing market value of big chunks
of land measuring 3.627 hectares and 0.951 hectare. He further argued that
the deductions made by the Reference Court and the High Court in lieu of
the cost of development and other charges are legally correct and the High
Court did not commit any error by fixing market value of the acquired land
for the purpose of determination of the compensation payable to the
appellants.

15. In support of his arguments, Shri Khanna relied upon the judgments in
Land Acquiring Body, Ahmedabad v. Ramprasad H. Maharaj (2007) 15 SCC 593,
Mahesh Dattatray Thirthkar v. State of Maharashtra (2009) 11 SCC 141,
Sabhia Mohammad Yusuf Abdul Hamid Mulla (dead) by Lrs. and others v.
Special Land Acquisition Officer and others (2012) 7 SCC 595, Bhagwathula
Samanna and others v. Special Tahsildar and Land Acquisition Officer,
Visakhapatnam Municipality, Visakhapatnam (1991) 4 SCC 506, V. Hanumantha
Reddy (dead) by Lrs. v. Land Acquisition officer and Mandal R. Officer
(2003) 12 SCC 642, Valliyammal and another v. Special Tahsildar (Land
Acquisition) and another (2011) 8 SCC 91 and K. S. Shivdevamma v. Assistant
Collector AIR 1996 SC 2886.

16. Before considering the respective arguments, we may notice the
principles laid down by this Court for determination of market value of the
acquired land. In Shaji Kuriakose v. Indian Oil Corpn. Ltd. (2001) 7 SCC
650, this Court held:

“It is no doubt true that courts adopt comparable sales method of
valuation of land while fixing the market value of the acquired land.
While fixing the market value of the acquired land, comparable sales
method of valuation is preferred than other methods of valuation of
land such as capitalisation of net income method or expert opinion
method. Comparable sales method of valuation is preferred because it
furnishes the evidence for determination of the market value of the
acquired land at which a willing purchaser would pay for the acquired
land if it had been sold in the open market at the time of issue of
notification under Section 4 of the Act. However, comparable sales
method of valuation of land for fixing the market value of the
acquired land is not always conclusive. There are certain factors
which are required to be fulfilled and on fulfilment of those factors
the compensation can be awarded, according to the value of the land
reflected in the sales. The factors laid down inter alia are: (1) the
sale must be a genuine transaction, (2) that the sale deed must have
been executed at the time proximate to the date of issue of
notification under Section 4 of the Act, (3) that the land covered by
the sale must be in the vicinity of the acquired land, (4) that the
land covered by the sales must be similar to the acquired land, and
(5) that the size of plot of the land covered by the sales be
comparable to the land acquired. If all these factors are satisfied,
then there is no reason why the sale value of the land covered by the
sales be not given for the acquired land. However, if there is a
dissimilarity in regard to locality, shape, site or nature of land
between land covered by sales and land acquired, it is open to the
court to proportionately reduce the compensation for acquired land
than what is reflected in the sales depending upon the disadvantages
attached with the acquired land.”

 
17. In Viluben Jhalejar Contractor v. State of Gujarat (2005) 4 SCC 789,
this Court elaborately considered the matter and culled out the following
principles:
“One of the principles for determination of the amount of compensation
for acquisition of land would be the willingness of an informed buyer
to offer the price therefor. It is beyond any cavil that the price of
the land which a willing and informed buyer would offer would be
different in the cases where the owner is in possession and enjoyment
of the property and in the cases where he is not.
Market value is ordinarily the price the property may fetch in the
open market if sold by a willing seller unaffected by the special
needs of a particular purchase. Where definite material is not
forthcoming either in the shape of sales of similar lands in the
neighbourhood at or about the date of notification under Section 4(1)
or otherwise, other sale instances as well as other evidences have to
be considered.
The amount of compensation cannot be ascertained with mathematical
accuracy. A comparable instance has to be identified having regard to
the proximity from time angle as well as proximity from situation
angle. For determining the market value of the land under acquisition,
suitable adjustment has to be made having regard to various positive
and negative factors vis-à-vis the land under acquisition by placing
the two in juxtaposition. The positive and negative factors are as
under:
Positive factors Negative factors
(i) smallness of size (i) largeness of area
(ii) proximity to a road (ii) situation in the interior at
a distance from the road
(iii) frontage on a road (iii) narrow strip of land with
very small frontage compared to depth
(iv) nearness to developed area (iv) lower level requiring the
depressed portion to be filled up
(v) regular shape (v) remoteness from developed
locality
(vi) level vis-à-vis land under (vi) some special disadvantageous
acquisition factors which would deter a
purchaser
(vii) special value for an owner of
an adjoining property to whom it
may have some very special advantage
Whereas a smaller plot may be within the reach of many, a large block
of land will have to be developed preparing a layout plan, carving out
roads, leaving open spaces, plotting out smaller plots, waiting for
purchasers and the hazards of an entrepreneur. Such development
charges may range between 20% and 50% of the total price.”
18. In Atma Singh v. State of Haryana (2008) 2 SCC 568, the Court held:
“In order to determine the compensation which the tenure-holders are
entitled to get for their land which has been acquired, the main
question to be considered is what is the market value of the land.
Section 23(1) of the Act lays down what the court has to take into
consideration while Section 24 lays down what the court shall not take
into consideration and have to be neglected. The main object of the
enquiry before the court is to determine the market value of the land
acquired. The expression ‘market value’ has been the subject-matter of
consideration by this Court in several cases. The market value is the
price that a willing purchaser would pay to a willing seller for the
property having due regard to its existing condition with all its
existing advantages and its potential possibilities when led out in
most advantageous manner excluding any advantage due to carrying out
of the scheme for which the property is compulsorily acquired. In
considering market value disinclination of the vendor to part with his
land and the urgent necessity of the purchaser to buy should be
disregarded. The guiding star would be the conduct of hypothetical
willing vendor who would offer the land and a purchaser in normal
human conduct would be willing to buy as a prudent man in normal
market conditions but not an anxious dealing at arm’s length nor
facade of sale nor fictitious sale brought about in quick succession
or otherwise to inflate the market value. The determination of market
value is the prediction of an economic event viz. a price outcome of
hypothetical sale expressed in terms of probabilities. See Kamta
Prasad Singh v. State of Bihar (1976) 3 SCC 772, Prithvi Raj Taneja v.
State of M.P. (1977) 1 SCC 684, Administrator General of W.B. v.
Collector (1988) 2 SCC 150 and Periyar Pareekanni Rubbers Ltd. v.
State of Kerala (1991) 4 SCC 195.
For ascertaining the market value of the land, the potentiality of the
acquired land should also be taken into consideration. Potentiality
means capacity or possibility for changing or developing into state of
actuality. It is well settled that market value of a property has to
be determined having due regard to its existing condition with all its
existing advantages and its potential possibility when led out in its
most advantageous manner. The question whether a land has potential
value or not, is primarily one of fact depending upon its condition,
situation, user to which it is put or is reasonably capable of being
put and proximity to residential, commercial or industrial areas or
institutions. The existing amenities like water, electricity,
possibility of their further extension, whether near about a town is
developing or has prospect of development have to be taken into
consideration. See Collector v. Dr. Harisingh Thakur (1979) 1 SCC 236,
Raghubans Narain Singh v. U.P. Govt. AIR 1967 SC 465 and Administrator
General of W.B. v. Collector (1988) 2 SCC 150. It has been held in
Kausalya Devi Bogra v. Land Acquisition Officer (1984) 2 SCC 324 and
Suresh Kumar v. Town Improvement Trust (1989) 2 SCC 329 that failing
to consider potential value of the acquired land is an error of
principle.”

 
19. We shall now deal with the question whether the Reference Court was
legally entitled to discard the sale deeds Exhibits P1 to P6 and P10 to P12
and whether the market value could have been determined only on the basis
of Exhibits P7 to P9 and also whether the learned Single Judge of the High
Court was right in relying upon Exhibits P1 and P7 to P9 for recording a
finding that the Reference Court had correctly treated market value of the
acquired land as Rs.6 per sq. ft. for the purpose of determining the amount
of compensation.

20. Admittedly, the appellants had produced as many as 12 sale deeds, the
details of which (as contained in the written note filed by learned counsel
for the appellants on 27.11.2013) are given below:

|“Exhibi|Date |Area |Total |Rate |
|t No. | | |consideratio| |
| | | |n | |
|P1 |10.07.1986 |2000 Sqft |6000/- |Rs.3.00/- |
|P2 |13.10.1992 |1168 Sqft |47,000/- |Rs.40.02/- |
|P3 |25.02.1986 |600 Sqft |5000/- |Rs.8.33/- |
|P4 |10.02.1984 |112 Sqft |2000/- |Rs.17.86/- |
|P5 |24.08.1984 |112 Sqft |2000/- |Rs. 17.86/- |
|P6 |19.01.1987 |1200 Sqft |9600/- |Rs.8.00/- |
|P7 |08.07.1986 |1980 Sqft |16,000/- |Rs.8.08/- |
|P8 |13.08.1986 |1980 Sqft |16,000/- |Rs.8.08/- |
|P9 |08.08.1986 |825 Sqft |6,600/- |Rs.8.00/- |
|P10 |17.02.1992 |900 Sqft |49,500/- |Rs.55.00/- |
|P11 |19.01.1987 |1200 Sqft |9600/- |Rs.8.00/- |
|P12 |25.02.1986 |53928 Sqft|0.51 |Re.0.09 |
| | | |hectares |(Being an |
| | | | |example rural |
| | | | |agricultural |
| | | | |land beyond |
| | | | |Jagatpur cited |
| | | | |as a contrast |
| | | | |example)” |

21. Since all the sale deeds produced by the appellants were registered
documents and authenticity thereof had not been questioned by the
respondents, the Reference Court and the High Court could not have ignored
the provisions of Section 51-A and discarded majority of the sale deeds.
This issue is no longer res integra and must be answered in favour of the
appellants in view of the judgments in Land Acquisition Officer and Mandal
Revenue Officer v. V. Narasaiah (supra), Cement Corporation of India v.
Purya (supra) and Deputy Collector, Land Acquisition, Gujarat and another
v. Madhubai Gobarbhai and another (supra).

22. Notwithstanding the above conclusion, we are of the view that
Exhibits P2 and P10 cannot be relied upon for determination of the amount
of compensation because the same were executed after the issue of
notification under Section 4. The remaining sale deeds show that different
parcels of land were sold between 10.2.1984 and 19.1.1987. The highest
value for which the land was sold was Rs.17.86 per sq. ft and the lowest
was Rs.3 per sq. ft. In Anjani Molu Dessai v. State of Goa (supra), a two
Judge Bench considered the methodology which should be followed for fixing
market value of the acquired land where large number of sale instances are
produced by the parties, referred to the earlier judgments in M.
Vijayalakshmamma Rao Bahadur v. Collector (1969) 1 MLJ 45, State of Punjab
v. Hans Raj (1994) 5 SCC 734 and held:

“The legal position is that even where there are several exemplars
with reference to similar lands, usually the highest of the exemplars,
which is a bona fide transaction, will be considered. Where however
there are several sales of similar lands whose prices range in a
narrow bandwidth, the average thereof can be taken, as representing
the market price. But where the values disclosed in respect of two
sales are markedly different, it can only lead to an inference that
they are with reference to dissimilar lands or that the lower value
sale is on account of undervaluation or other price depressing
reasons. Consequently, averaging cannot be resorted to.”

 

23. In Mehrawal Khewaji Trust (Registered), Faridkot and others v. State
of Punjab and others (supra), another two Judge Bench re-stated the law in
the following words:

“It is clear that when there are several exemplars with reference to
similar lands, it is the general rule that the highest of the
exemplars, if it is satisfied that it is a bona fide transaction, has
to be considered and accepted. When the land is being compulsorily
taken away from a person, he is entitled to the highest value which
similar land in the locality is shown to have fetched in a bona fide
transaction entered into between a willing purchaser and a willing
seller near about the time of the acquisition. In our view, it seems
to be only fair that where sale deeds pertaining to different
transactions are relied on behalf of the Government, the transaction
representing the highest value should be preferred to the rest unless
there are strong circumstances justifying a different course. It is
not desirable to take an average of various sale deeds placed before
the authority/court for fixing fair compensation.”

 

 

24. The same view was reiterated in Chindha Fakira Patil v. The Special
Land Acquisition officer, Jalgaon 2011 (12) SCALE 321.
25. It was neither the pleaded case of the respondents nor any evidence
was produced by them before the Reference Court to prove that the sale
transactions Exhibits P4 and P5 were not genuine or that the vendor and
vendee had colluded to inflate value of the land with oblique motive. It is
also not the case of the respondents that the lands specified in other
exhibits was sold at the rate of Rs.8.33, Rs.8.08 or Rs.8 per sq. ft. with
ulterior motive to get higher compensation in the subsequent acquisitions.
Therefore, we can safely rely upon Exhibits P4 and P5 for determining the
amount of compensation. Even if those sale deeds are kept aside, one can
rely upon Exhibits P3, P7 and P8 for recording a finding that market value
of the acquired land cannot be less than anything between Rs.8 and Rs.8.33
per sq. ft. If the rule of averaging is applied, then market value of the
acquired land would be anything between Rs.9 and Rs.10 per sq. ft.

26. The next issue which merits consideration is whether the Reference
Court and the High Court had correctly made deductions in the name of
development charges/cost of development. The Reference Court made three-
tier deduction. In the first place, 25% was deducted in the name of
leaving out portions of the acquired land for the purpose of laying roads,
drains, sewer line, parks, electricity line etc. Thereafter, 25% deduction
was made towards expenses for development work. Finally, 50% deduction was
made because of smallness of the plots sold vide Exhibits P1 to P12. The
learned Single Judge of the High Court approved the deduction and
determined market value of the acquired land at the rate of Re.1 per sq.
ft.

27. The approach adopted by the Reference Court and the High Court in
making deductions towards the cost of development / development charges
from the market value determined on the basis of the sale deeds produced by
the appellants was clearly wrong. The respondents had not even suggested
that the development envisaged by the Reference Court, i.e., laying of
roads, drains, sewer lines, parks, electricity lines etc. or any other
development work was required to be undertaken for laying the Railway line.
Therefore, 25% deduction made by the Reference Court and approved by the
High Court under two different heads is legally unsustainable.

28. In Nelson Fernandes and others v. Special Land Acquisition
Officer, South Goa and others (2007) 9 SCC 447, this Court considered the
question whether any deduction could be made towards development cost where
the land is acquired for laying railway line and answered the same in
negative. In that case, the appellant had challenged the judgments of the
Reference Court and the Division Bench of the High Court fixing market
value of the acquired land and contended that no deduction could be made
because the land had been acquired for laying railway line. This Court
reversed the judgments of the Reference Court and the High Court and
observed:

“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. 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 this Court held that the
purpose for which acquisition is made is also a relevant factor for
determining the market value.
30. We are not, however, oblivious of the fact that normally 1/3rd
deduction of further amount of compensation has been directed in some
cases. However, the purpose for which the land is acquired must also
be taken into consideration. In the instant case, the land was
acquired for the construction of new BG line for the Konkan Railways.
This Court in Hasanali Khanbhai & Sons v. State of Gujarat and Land
Acquisition Officer v. Nookala Rajamallu had noticed that where lands
are acquired for specific purposes, deduction by way of development
charges is permissible. In the instant case, acquisition is for laying
a railway line. Therefore, the question of development thereof would
not arise. Therefore, the order passed by the High Court is liable to
be set aside and in view of the availability of basic civic amenities
such as school, bank, police station, water supply, electricity,
highway, transport, post, petrol pump, industry, telecommunication and
other businesses, the claim of compensation should reasonably be fixed
@ Rs 250 per sq m with the deduction of 20%. The appellant shall be
entitled to all other statutory benefits such as solatium, interest,
etc. etc. The appellants also will be entitled to compensation for the
trees standing on the said land in a sum of Rs.59,192 as fixed. IA No.
1 of 2006 for substitution is ordered as prayed for.”

 

29. In C.R. Nagaraja Shetty v. Special Land Acquisition Officer and
Estate Officer and another (2009) 11 SCC 75, the Court referred to the
judgment in Nelson Fernandes and others v. Special Land Acquisition
Officer, South Goa and others (supra) and observed:

“15. The learned counsel appearing on behalf of the respondents was
also unable to point out any such evidence regarding the proposed
development. We cannot ignore the fact that the land is acquired only
for the widening of the national highway. There would, therefore, be
no question of any such development or any costs therefor.
16. In Nelson Fernandes v. Land Acquisition Officer this Court has
discussed the question of development charges. That was a case where
the acquisition was for laying a railway line. This Court found that
the land under acquisition was situated in an area which was adjacent
to the land already acquired for the same purpose i.e. for laying a
railway line. In para 29, the Court observed that the Land Acquisition
Officer, the District Judge and the High Court had failed to notice
that the purpose of acquisition was for the Railways and that the
purpose is a relevant factor to be taken into consideration for fixing
the compensation.
17. The Court in Nelson Fernandes relied on Viluben Jhalejar
Contractor v. State of Gujarat where it was held that:
“29. … 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.”
Further, in para 30, the Court specifically referred to the deduction
for the development charges and observed:
“30. We are not, however, oblivious of the fact that normally
1/3rd deduction of further amount of compensation has been
directed in some cases. However, the purpose for which the land
is acquired must also be taken into consideration. In the
instant case, the land was acquired for the construction of new
BG line for the Konkan Railways. … In the instant case,
acquisition is for laying a railway line. Therefore, the
question of development thereof would not arise.”
The Court made a reference to two other cases viz. Hasanali Khanbhai &
Sons v. State of Gujarat and Land Acquisition Officer v. Nookala
Rajamallu where the deduction by way of development charges was held
permissible.
18. The situation is no different in the present case. All that the
acquiring body has to achieve is to widen the national highway. There
is no further question of any development. We again, even at the cost
of repetition, reiterate that no evidence was shown before us in
support of the plea of the proposed development. We, therefore, hold
that the High Court has erred in directing the deduction on account of
the developmental charges at the rate of Rs 25 per square foot out of
the ordered compensation at the rate of Rs 75 per square foot. We set
aside the judgment to that extent.”

 

30. However, keeping in view the smallness of the plots which were sold
by Exhibits P1, P3 to P8, P11 and P12, we would approve the deduction of
50% for the purpose of determining compensation payable for 3.627 hectares
comprised in Survey Nos.2, 10, 20, 22, 46, 48 and 106 and 0.951 hectare
comprised in Survey No.18.

31. The issue which remains to be considered relates to the amount of
compensation payable to the appellants. For this purpose, we shall make
calculation by adopting the following modes:

i) If sale deeds Exhibits P4 and P5 are relied upon and 50%
deduction is made on account of smallness of the land sold by
these exhibits, the amount of compensation would come to Rs.8.93
per sq. ft., and

ii) If sale deeds Exhibits P3, P6 to P9 and P11 are taken into
consideration and 50% deduction is made due to smallness of the
plots, the appellants would be entitled to compensation at the
rate of Rs.4.04 per sq. ft.

32. However, keeping in view the proposition laid down in M.
Vijayalakshmamma Rao Bahadur v. Collector (supra), State of Punjab v. Hans
Raj (supra), Anjani Molu Dessai v. State of Goa (supra) and Mehrawal
Khewaji Trust (Registered), Faridkot and others v. State of Punjab and
others (supra), we would adopt the first mode and hold that the appellants
are entitled to compensation at the rate of Rs.8.93 per sq. ft.

33. We may have ordained payment of compensation to the appellants at the
rate of 8.93 per sq. ft. (rounded off to Rs.9 per sq. ft.), but having
regard to the fact that in the claim filed before the Reference Court, they
had limited their claim to Rs.5 per sq. ft. and no application was filed
either before the High Court or this Court for payment of higher
compensation, we would restrict the enhancement to Rs.5 per sq.ft.

34. We agree with Shri Lalit that in view of the law laid down in Sunder
v. Union of India (2001) 7 SCC 211, Chimanlal Kuberdas Modi v. Gujarat
Industrial Development Corporation (2010) 10 SCC 635, Nadirsha Shapurji
Patel v. Collector and LAO (2010) 13 SCC 234, R. Saragapani v. Special
Tahsildar, Karur – Dindigul Broadguage Line (2011) 14 SCC 177 and Bharat
Heavy Electricals Limited v. R.S. Avtar Singh and Company (2013) 1 SCC 243,
the appellants are entitled to interest on solatium.

35. So far as the appellants’ plea for award of damages caused on account
of removal of fencing of Sant Farm, loss of earning due to damage to
crops/farming operation and destruction of well existing on the land is
concerned, we do not consider it necessary to deal with the same because
the issue is being dealt with in C.A. No.1248 of 2007.

36. In the result, the appeal is allowed, the impugned judgment and the
award of the Reference Court are set aside and it is declared that the
appellants are entitled to compensation at the rate of Rs.5 per sq.ft. with
other statutory benefits. They shall also be entitled to interest on the
element of solatium.

37. The respondents are directed to pay the amount of enhanced
compensation and other statutory benefits including solatium and interest
to the appellants within a period of six months from today.
………………………………………..J.
(G.S. SINGHVI)

 

………………………………………..J.
(SHIVA KIRTI SINGH)

 

………………………………………..J.
(C. NAGAPPAN)
New Delhi;
November 29, 2013.

 

———————–
25

 

 

 

 

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