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Land Acquisition Act – Collector awarded at Rs. two lakhs per acre – Trail court enhanced the same to Rs. Nine lakhs and odd – High court reduced the same to Rs. four lakhs and odd – D.B. confirmed the same -claim for applying deduction for developments at 60% – Apex court held that As regards the judgments relied upon by the appellant, the same are distinguishable. In Indumati Chitaley case (supra), it was noticed that the land in question was agricultural land which could not be valued at par with the value of the non-agricultural land as was sought to be claimed on behalf of the appellant. In the said case, unlike the present case, there was no finding that the land had immediate potential for residential/commercial use. In Basant Kumar case (supra), it was observed that while considering an instance of developed land as the basis for determining the value of the agricultural land, one third of the value has to be deducted towards providing amenities like roads, parks, electricity, sewage etc. We have already noted the law laid down by this Court that extent of cut depends on individual fact situations. In Karigowda case (supra), it was observed that the existing potentiality alone has to be taken into consideration while determining the compensation. Remote beneficial factors cannot be made the basis for determining the compensation. It was further observed that comparable sales method is a preferred method over the other methods for determining the compensation.There is no dispute with these propositions but in the facts and circumstances of the case, we are unable to hold that the view taken by the High Court is vitiated by any error of principle propounded in the relied upon judgment or otherwise. We, thus, do not find any ground to interfere with the impugned judgment. The appeals are dismissed with no order as to costs.= CIVIL APPEAL NO.7314-7365 of 2005 UNION OF INDIA ….. APPELLANT VERSUS RAJ KUMAR BAGHAL SINGH (DEAD) TH. LRS. & ORS. ….. RESPONDENTS= 2014 – Sept. Month – http://judis.nic.in/supremecourt/filename=41897

Land Acquisition Act  – Collector awarded at Rs. two lakhs per acre – Trail court enhanced the same to Rs. Nine lakhs and odd – High court reduced the same to Rs. four lakhs and odd   – D.B. confirmed the same -claim for applying deduction for developments at 60% – Apex court held that As regards the judgments relied upon by the appellant,  the  same  are distinguishable. 

 In Indumati Chitaley case (supra),  it  was  noticed  that the land in question was agricultural land which could not be valued at  par with the value of the non-agricultural land as was sought to be  claimed  on behalf of the appellant.   In the said case, unlike the present  case,  there was   no   finding   that   the   land   had   immediate    potential    for residential/commercial use

In Basant Kumar case (supra),  it  was  observed that while considering an instance  of  developed  land  as  the  basis  for determining the value of the agricultural land, one third of the  value  has

to be deducted towards providing amenities like roads,  parks,  electricity,

sewage etc.   We have already noted the law laid  down  by  this  Court  that extent of cut depends on individual  fact  situations.   In  Karigowda  case (supra), it was observed that the existing  potentiality  alone  has  to  be taken  into  consideration  while  determining  the  compensation.    

Remote beneficial  factors  cannot  be  made  the   basis   for   determining   the

compensation.   It was further observed that comparable  sales  method  is  a preferred method over the other methods for  determining  the  compensation.There  is  no  dispute  with  these  propositions  but  in  the  facts   and circumstances of the case, we are unable to hold that the view taken by  the High Court is vitiated by any error of principle propounded  in  the  relied

upon judgment or otherwise. We, thus, do not find  any  ground  to  interfere  with  the  impugned

judgment.   The appeals are dismissed with no order as to costs.=

The

Collector vide award dated 13th August, 1991, assessed the market  value  of

the acquired land at the rate of Rs.2 lakh per acre.

The  Reference  Court

enhanced the amount of compensation to Rs.9,05000/-  per  acre.

A  learned

Single Judge of the High Court reduced the  same  to  Rs.105.80  per  square

yard vide order dated 1st April,  1999,  which  has  been  affirmed  by  the

Division Bench.=

Thus, the Division Bench has upheld the view  of  the  learned  Single

Judge in reducing the compensation from Rs.9,05,000/-  per  acre,  fixed  by

the Reference Court, to Rs.105.80 per  square  yard  fixed  by  the  learned

Single Judge in respect of the  land  covered  by  notification  dated  14th

March,  1989  and  for  the  land  covered  under  notification  dated  16th

September, 1988, the compensation was marginally enhanced  to  Rs.4,54,662/-

per acre.=

In Chimanlal Hargovinddas vs.  Special  Land  Acquisition

Officer, Poona and anr.[4],

this Court summed up the principle as  follows:-

“4. The following factors must be etched on the mental screen:

(1)   …………….

[pic](2)   …………….

(3)   …………….

(4)   …………….

(5)   The market value of land under acquisition has to be  determined

as on the crucial date of publication of the notification  under  Section  4

of the Land Acquisition Act (dates of notifications under Sections 6  and  9

are irrelevant).

(6)   The determination has to be made standing on the  date  line  of

valuation (date of publication of notification under Section 4)  as  if  the

valuer is a hypothetical purchaser willing to purchase land  from  the  open

market and is prepared to pay a reasonable price as  on  that  day.  It  has

also to be assumed that the  vendor  is  willing  to  sell  the  land  at  a

reasonable price.

(7)   In doing so by the instances method, the court has to  correlate

the market value reflected in the most comparable  instance  which  provides

the index of market value.

(8)    Only  genuine  instances  have  to  be  taken  into   account.

(Sometimes instances are rigged up in anticipation of acquisition of land.)

(9)   Even post-notification instances can be taken into  account  (1)

if they are very proximate, (2) genuine and (3) the acquisition  itself  has

not motivated the purchaser  to  pay  a  higher  price  on  account  of  the

resultant improvement in development prospects.

(10)  The most comparable instances out of the genuine instances  have

to be identified on the following considerations:

(i)   proximity from time angle,

(ii)  proximity from situation angle.

(11)  Having identified the  instances  which  provide  the  index  of

market [pic]value the price reflected therein may be taken as the  norm  and

the market value of the land under acquisition  may  be  deduced  by  making

suitable adjustments for the plus and minus  factors  vis-à-vis  land  under

acquisition by placing the two in juxtaposition.

(12)  A balance-sheet of plus and minus factors may be drawn for  this

purpose and the  relevant  factors  may  be  evaluated  in  terms  of  price

variation as a prudent purchaser would do.

(13)  The market value of the land under  acquisition  has  thereafter

to be deduced by loading the price reflected in the instance taken  as  norm

for plus factors and unloading it for minus factors.

(14)  The exercise indicated  in  clauses  (11)  to  (13)  has  to  be

undertaken in a common sense manner  as  a  prudent  man  of  the  world  of

business  would  do.  We  may  illustrate  some   such   illustrative   (not

exhaustive) factors:

|Plus factors         |Minus factors        |

|1. smallness of size |1. largeness of area |

|2. proximity to a    |2. situation in the  |

|road                 |interior at a        |

|                     |distance from the    |

|                     |road                 |

|3. frontage on a road|3. narrow strip of   |

|                     |land with very small |

|                     |frontage compared to |

|                     |depth                |

|4. nearness to       |4. lower level       |

|developed area       |requiring the        |

|                     |depressed portion to |

|                     |be filled up         |

|5. regular shape     |5. remoteness from   |

|                     |developed locality   |

|6. level vis-à-vis   |6.  some special     |

|land under           |disadvantageous      |

|acquisition          |factor which would   |

|                     |deter a purchaser    |

|7. special value for |                     |

|an owner of an       |                     |

|adjoining property to|                     |

|whom it may have some|                     |

|very special         |                     |

|advantage            |                     |

(15)  The evaluation of these factors of course depends on  the  facts

of each case. There cannot be any hard and fast or rigid rule. Common  sense

is the  best  and  most  reliable  guide.  For  instance,  take  the  factor

regarding the size. A building plot of land say 500 to 1000 sq. yds.  cannot

be compared with a large tract or block of land of say 10,000  sq.  yds.  or

more. Firstly while a smaller plot is within the  reach  of  many,  a  large

block of land will have to be developed by preparing a lay out, carving  out

roads,  leaving  open  space,  plotting  out  smaller  plots,  waiting   for

purchasers (meanwhile the  invested  money  will  be  blocked  up)  and  the

hazards of an entrepreneur.  The  factor  can  be  discounted  by  making  a

[pic]deduction by way  of  an  allowance  at  an  appropriate  rate  ranging

approximately between 20 per cent  to  50  per  cent  to  account  for  land

required to be set apart for  carving  out  lands  and  plotting  out  small

plots. The discounting will to some extent also depend on whether  it  is  a

rural area or urban area, whether  building  activity  is  picking  up,  and

whether waiting period during which the capital of  the  entrepreneur  would

be locked up, will be longer or shorter and the attendant hazards.

(16)  Every case must be dealt with on its own  fact  pattern  bearing

in mind all these factors as a prudent purchaser of land in  which  position

the judge must place himself.

(17)   These  are  general  guidelines  to  be  applied  with  understanding

informed with common sense.”

We are not, however, oblivious  of  the  fact  that  normally  one-third

deduction of further amount  of  compensation  has  been  directed  in  some

cases. (See Kasturi v. State of Haryana, (2003) 1 SCC 354, Tejumal  Bhojwani

v.  State  of  U.P.,  (2003)  10  SCC  525,  V.  Hanumantha  Reddy  v.  Land

Acquisition Officer & Mandal R. Officer, (2003) 12  SCC  642,  H.P.  Housing

Board v. Bharat S. Negi, (2004) 2 SCC 184  and  Kiran  Tandon  v.  Allahabad

Development Authority, (2004) 10 SCC 745.)

31. In Registrar, University of Agricultural Sciences5 whereupon  Mr  Ranjit

Kumar placed strong reliance, the Court noticed that if the  acquisition  is

made for agricultural purpose, question of  development  thereof  would  not

arise; but if the sale instance was in respect of  a  small  piece  of  land

whereas the acquisition is for a large piece of land,  although  development

cost may not be deducted, there has to be deduction  for  largeness  of  the

land and also for the fact that these are agricultural lands. In  that  view

of the matter, deduction at the rate of 33%  made  by  the  High  Court  was

upheld. It may not, therefore, be correct to contend, as has been  submitted

by Mr. Ranjit Kumar, that there cannot be different deductions, one for  the

largeness of the land and another for development costs.”

11.   As regards the judgments relied upon by the appellant,  the  same  are

distinguishable.

In Indumati Chitaley case (supra),  it  was  noticed  that

the land in question was agricultural land which could not be valued at  par

with the value of the non-agricultural land as was sought to be  claimed  on

behalf of the appellant.

In the said case, unlike the present  case,  there

was   no   finding   that   the   land   had   immediate    potential    for

residential/commercial use.

In Basant Kumar case (supra),  it  was  observed

that while considering an instance  of  developed  land  as  the  basis  for

determining the value of the agricultural land, one third of the  value  has

to be deducted towards providing amenities like roads,  parks,  electricity,

sewage etc.

We have already noted the law laid  down  by  this  Court  that

extent of cut depends on individual  fact  situations.   

In  Karigowda  case

(supra), it was observed that the existing  potentiality  alone  has  to  be

taken  into  consideration  while  determining  the  compensation.

Remote

beneficial  factors  cannot  be  made  the   basis   for   determining   the

compensation.

It was further observed that comparable  sales  method  is  a

preferred method over the other methods for  determining  the  compensation.

There  is  no  dispute  with  these  propositions  but  in  the  facts   and

circumstances of the case, we are unable to hold that the view taken by  the

High Court is vitiated by any error of principle propounded  in  the  relied

upon judgment or otherwise.

12.   We, thus, do not find  any  ground  to  interfere  with  the  impugned

judgment.

13.   The appeals are dismissed with no order as to costs.

2014 – Sept. Month – http://judis.nic.in/supremecourt/filename=41897

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.7314-7365 of 2005
UNION OF INDIA ….. APPELLANT

VERSUS

RAJ KUMAR BAGHAL SINGH (DEAD)
TH. LRS. & ORS. ….. RESPONDENTS
WITH
Civil Appeal No.77-273 of 2006, Civil Appeal No.613-627 of 2006, Civil
Appeal No.5058 of 2006, Civil Appeal No.4683 of 2006,
Civil Appeal No.4599 of 2006, Civil Appeal No.5059 of 2006,
Civil Appeal No.5237 of 2006, Civil Appeal No.5238 of 2006,
Civil Appeal No.4744 of 2006,
Civil Appeal No…8599 of 2014 @ SLP (C) No.21015 of 2006,
Civil Appeal No…8600 of 2014 @ SLP (C) No.21734 of 2006,
Civil Appeal No.118 of 2007, Civil Appeal No.3181 of 2007 and
Civil Appeal No.870 of 2007.
J U D G M E N T

ADARSH KUMAR GOEL, J.
1. Leave granted in SLPs.
2. These appeals have been preferred against the judgment of the Punjab
& Haryana High Court in a group of matters involving the issue of
determination of compensation for the land acquired by the appellant-Union
of India in two sets of acquisition.
2. One of the notifications under Section 4 of the Land Acquisition Act,
1894 (for short “the Act”), in question, was issued on 14th March, 1989 to
acquire 72.9375 acres of land in villages Bir Kheri Gujran, District
Patiala, for development of military cantonment at Patiala in Punjab. The
Collector vide award dated 13th August, 1991, assessed the market value of
the acquired land at the rate of Rs.2 lakh per acre. The Reference Court
enhanced the amount of compensation to Rs.9,05000/- per acre. A learned
Single Judge of the High Court reduced the same to Rs.105.80 per square
yard vide order dated 1st April, 1999, which has been affirmed by the
Division Bench.
3. In the other set of acquisition, covered by notification under
Section 4 of the Act dated 16th September, 1988, for the land measuring
498.03, the Collector vide award dated 27th March, 1991, awarded
compensation at the rate of Rs.2 lakh per acre for the land in villages
Kheri Gujran and Bir Kheri Gujran and for the land in villages Sher Majra,
Haji Majra and Pasiana at the rate of Rs.1,50,000/- per acre. The Reference
Court vide award dated 6th April, 1998 enhanced the
compensation to Rs.2,75,000/- per acre for the land in villages Kheri
Gujran and Bir Kheri Gujran. In respect of land in the revenue estate of
village Haji Majra, for the land upto 500 meters on Patiala Sangrur Road,
compensation was awarded at the same rate but for the rest of the land
compensation was awarded at Rs.2,33,750/- per acre. For villages Pasiana
and Sher Majra, the rate awarded was the same as for village Haji Majra.
On further appeal, the learned Single Judge of the High Court enhanced the
amount of compensation to Rs.4,48,159/- per acre which has been affirmed by
the Division Bench with slight modification by way of enhancement.
4. Thus, the Division Bench has upheld the view of the learned Single
Judge in reducing the compensation from Rs.9,05,000/- per acre, fixed by
the Reference Court, to Rs.105.80 per square yard fixed by the learned
Single Judge in respect of the land covered by notification dated 14th
March, 1989 and for the land covered under notification dated 16th
September, 1988, the compensation was marginally enhanced to Rs.4,54,662/-
per acre.
5. Aggrieved by the judgment of the Division Bench, the Union of India
has preferred these appeals. However, the land owners have accepted the
compensation awarded by the Division Bench.
6. We have heard learned counsel for the parties.
7. Learned counsel for the appellant-Union of India submitted that
enhancement of compensation beyond the award of the Collector by the
Reference Court and the High Court was not justified as the sale
transactions relied upon by the land owners could not be the basis for
fixation of compensation. The said instances were of land nearer to the
city which land, being better located, had higher value. It is for this
reason that in respect of the land covered by notification dated 14th
March, 1989, rate of compensation fixed by the Reference Court was reduced
by the High Court. Plea that for taking into small instances cut of 60%
should be applied was wrongly disregarded. Thus, methodology followed by
the High Court was not appropriate. Reliance has been placed on law laid
down in Basant Kumar and ors. vs. Union of India and Ors.[1], Smt. Indumati
Chitaley vs. Union of India and Anr.[2] and Special Land Acquisition
Officer vs. Karigowda and Ors.[3]. It was further submitted that the sale
transactions Exp. P-21 and P-22 have been wrongly relied upon ignoring the
objection of the appellant and on that basis the Division Bench erred in
enhancing the compensation to Rs.4,54,662/- per acre in respect of the
acquisition covered by notification dated 16th September, 1988.
8. On the other hand, learned Counsel for the land owners supported the
view taken in the impugned judgment. It was pointed out that the land was
located adjacent to the municipal limits near Golf Course and residential
area. Its distance was 3 kms. from Phagwara Chowk. The land had potential
value for development into residential and commercial area.
9. We have considered the rival submissions. Before considering the
merits of the rival contentions, we consider it appropriate to refer to the
discussion on the issue by the High Court which is as follows:-
“In the present case, situation is altogether different. While deciding
issue regarding cut, referred to above, argument of counsel for the Union
of India that cut imposed is required to be enhanced is also liable to be
rejected. In view of situation the land under acquisition, as referred to
above, cut imposed to the extent of 20% was perfectly justified. Counsel
for the Union of India has tried to support his argument by citing various
judgments but no benefit of those judgments can be extended to Union of
India because at the time when matter was argued before Additional District
Judge, no serious dispute was raised by Union of India regarding potential
value of the land under acquisition. No evidence was led to show that the
land acquired had no potential for developing it into residential or
commercial area. Argument to impose higher cut was rightly rejected by the
learned Single Judge, after taking note of evidence on record.

Argument of counsel for the Union of India that since the land was
situated at a distance of 1 to 1-1/2 kms of municipal limits, as such,
higher cut be imposed, is not justified, in view of evidence on record. It
had come in evidence that the land under acquisition was situated next to
the municipal limits and was situated very near to golf course. In view of
this, no case is made out for further cut as prayed for.

In the present case, learned Single Judge has rightly placed reliance
to award compensation upon sale instance Ex. P-21 and Ex.P-22. While
determining compensation, reliance has also been placed on statements PW 4,
P27, PW10. It had come on record that land subject matter of sale
instance, referred to above, was situated within a distance of 20 killas or
less from the land under acquisition. Sale deed Ex. P23 was rightly
ignored as it pertained to constructed house and there was no evidence on
record to show that what was the value of land underneath the constructed
portion of the house. Under these circumstances, this Court is of the
opinion that award of compensation @ Rs.105.80 paisa per square yard to the
claimants by the learned Single Judge was perfectly justified.”

10. It is well settled in determining compensation for acquired land,
price paid in a bona fide transaction of sale by a willing seller to a
willing buyer is adopted subject to such transaction being adjacent to
acquired land, proximate to the date of acquisition and possessing similar
advantages. Of course, there are other well known methods of valuation
like opinion of experts and yield method. In absence of any evidence of a
similar transaction, it is permissible to take into account transaction of
nearest land around the date of notification under Section 4 of the Act by
making a suitable allowance. There can be no fixed criteria as to what
would be the suitable addition or subtraction from the value of the relied
upon transaction. In Chimanlal Hargovinddas vs. Special Land Acquisition
Officer, Poona and anr.[4], this Court summed up the principle as follows:-

“4. The following factors must be etched on the mental screen:

(1) …………….
[pic](2) …………….
(3) …………….
(4) …………….

(5) The market value of land under acquisition has to be determined
as on the crucial date of publication of the notification under Section 4
of the Land Acquisition Act (dates of notifications under Sections 6 and 9
are irrelevant).
(6) The determination has to be made standing on the date line of
valuation (date of publication of notification under Section 4) as if the
valuer is a hypothetical purchaser willing to purchase land from the open
market and is prepared to pay a reasonable price as on that day. It has
also to be assumed that the vendor is willing to sell the land at a
reasonable price.
(7) In doing so by the instances method, the court has to correlate
the market value reflected in the most comparable instance which provides
the index of market value.
(8) Only genuine instances have to be taken into account.
(Sometimes instances are rigged up in anticipation of acquisition of land.)
(9) Even post-notification instances can be taken into account (1)
if they are very proximate, (2) genuine and (3) the acquisition itself has
not motivated the purchaser to pay a higher price on account of the
resultant improvement in development prospects.
(10) The most comparable instances out of the genuine instances have
to be identified on the following considerations:
(i) proximity from time angle,
(ii) proximity from situation angle.
(11) Having identified the instances which provide the index of
market [pic]value the price reflected therein may be taken as the norm and
the market value of the land under acquisition may be deduced by making
suitable adjustments for the plus and minus factors vis-à-vis land under
acquisition by placing the two in juxtaposition.
(12) A balance-sheet of plus and minus factors may be drawn for this
purpose and the relevant factors may be evaluated in terms of price
variation as a prudent purchaser would do.
(13) The market value of the land under acquisition has thereafter
to be deduced by loading the price reflected in the instance taken as norm
for plus factors and unloading it for minus factors.
(14) The exercise indicated in clauses (11) to (13) has to be
undertaken in a common sense manner as a prudent man of the world of
business would do. We may illustrate some such illustrative (not
exhaustive) factors:

|Plus factors |Minus factors |
|1. smallness of size |1. largeness of area |
|2. proximity to a |2. situation in the |
|road |interior at a |
| |distance from the |
| |road |
|3. frontage on a road|3. narrow strip of |
| |land with very small |
| |frontage compared to |
| |depth |
|4. nearness to |4. lower level |
|developed area |requiring the |
| |depressed portion to |
| |be filled up |
|5. regular shape |5. remoteness from |
| |developed locality |
|6. level vis-à-vis |6. some special |
|land under |disadvantageous |
|acquisition |factor which would |
| |deter a purchaser |
|7. special value for | |
|an owner of an | |
|adjoining property to| |
|whom it may have some| |
|very special | |
|advantage | |
(15) The evaluation of these factors of course depends on the facts
of each case. There cannot be any hard and fast or rigid rule. Common sense
is the best and most reliable guide. For instance, take the factor
regarding the size. A building plot of land say 500 to 1000 sq. yds. cannot
be compared with a large tract or block of land of say 10,000 sq. yds. or
more. Firstly while a smaller plot is within the reach of many, a large
block of land will have to be developed by preparing a lay out, carving out
roads, leaving open space, plotting out smaller plots, waiting for
purchasers (meanwhile the invested money will be blocked up) and the
hazards of an entrepreneur. The factor can be discounted by making a
[pic]deduction by way of an allowance at an appropriate rate ranging
approximately between 20 per cent to 50 per cent to account for land
required to be set apart for carving out lands and plotting out small
plots. The discounting will to some extent also depend on whether it is a
rural area or urban area, whether building activity is picking up, and
whether waiting period during which the capital of the entrepreneur would
be locked up, will be longer or shorter and the attendant hazards.
(16) Every case must be dealt with on its own fact pattern bearing
in mind all these factors as a prudent purchaser of land in which position
the judge must place himself.
(17) These are general guidelines to be applied with understanding
informed with common sense.”

Again in Viluben Jhalejar Contractor (D) by LRs. vs. State of Gujarat [5],
it was observed:-

“24. The purpose for which acquisition is made is also a relevant factor
for determining the market value. In Basavva v. Spl. Land Acquisition
Officer, (1996) 6 SCC 640, deduction to the extent of 65% was made towards
development charges.

25. In Bhagwathula Samanna, (1991) 4 SCC 506, it has been held: (SCC pp.
510-11, para 11)

“11. The principle of deduction in the land value covered by the comparable
sale is thus adopted in order to arrive at the market value of the acquired
land. In applying the principle it is necessary to consider all relevant
facts. It is not the extent of the area covered under the acquisition which
is the only relevant factor. Even in the vast area there may be land which
is fully developed having all amenities and situated in an advantageous
position. If smaller area within the large tract is already developed and
suitable for building purposes and have in its vicinity roads, drainage,
electricity, communications, etc. then the principle of deduction simply
for the reason that it is part of the large tract acquired, may not be
justified.”

26. In L. Kamalamma, (1998) 2 SCC 385, this Court held: (SCC p. 387, para
6)
“Ext. B-30 is a sale deed dated 9-8-1976, the transaction having taken
place prior to eight months from the issue of the preliminary notification
for acquisition of land in the present case. Having found that the piece of
land referred in Ext. B-30 is situated very close to the lands that are
acquired under the notification in question the Reference Court and the
High Court relied upon the said document and, in our view, rightly. Further
when no sales of comparable land were available where large chunks of land
had been sold, even land transactions in respect of smaller extent of land
could be taken note of as indicating the price that it may fetch in respect
of large tracts of land by making appropriate deductions such as for
development of the land by providing enough space for roads, sewers,
drains, expenses involved in formation of a layout, lump sum payment as
also the waiting period required for selling the sites that would be
formed.”

27. In Administrator General of W.B. v. Collector, (1988) 2 SCC 150,
deduction to the extent of 53% was allowed.

28. In K.S. Shivadevamma v. Asstt. Commr. and Land Acquisition Officer,
(1996) 2 SCC 62, it was held: (SCC p. 65, para 10)

“10. It is then contended that 53% is not automatic but depends upon the
nature of the development and the stage of development. We are inclined to
agree with the learned counsel that the extent of deduction depends upon
development need in each case. Under the Building Rules 53% of land is
required to be left out. This Court has laid as a general rule that for
laying the roads and other amenities 33-1/3% is required to be deducted.
Where the development has already taken place, [pic]appropriate deduction
needs to be made. In this case, we do not find any development had taken
place as on that date. When we are determining compensation under Section
23(1), as on the date of notification under Section 4(1), we have to
consider the situation of the land development, if already made, and other
relevant facts as on that date. No doubt, the land possessed potential
value, but no development had taken place as on the date. In view of the
obligation on the part of the owner to hand over the land to the City
Improvement Trust for roads and for other amenities and his requirement to
expend money for laying the roads, water supply mains, electricity etc.,
the deduction of 53% and further deduction towards development charges @ 33-
1/3%, as ordered by the High Court, was not illegal.”

29. In Hasanali Khanbhai & Sons v. State of Gujarat (1995) 5 SCC 422 and
Land Acquisition Officer v. Nookala Rajamallu, (2003) 12 SCC 334 : (2003)
10 Scale 307, it has been noticed that where lands are acquired for
specific purposes deduction by way of development charges is permissible.

30. We are not, however, oblivious of the fact that normally one-third
deduction of further amount of compensation has been directed in some
cases. (See Kasturi v. State of Haryana, (2003) 1 SCC 354, Tejumal Bhojwani
v. State of U.P., (2003) 10 SCC 525, V. Hanumantha Reddy v. Land
Acquisition Officer & Mandal R. Officer, (2003) 12 SCC 642, H.P. Housing
Board v. Bharat S. Negi, (2004) 2 SCC 184 and Kiran Tandon v. Allahabad
Development Authority, (2004) 10 SCC 745.)

31. In Registrar, University of Agricultural Sciences5 whereupon Mr Ranjit
Kumar placed strong reliance, the Court noticed that if the acquisition is
made for agricultural purpose, question of development thereof would not
arise; but if the sale instance was in respect of a small piece of land
whereas the acquisition is for a large piece of land, although development
cost may not be deducted, there has to be deduction for largeness of the
land and also for the fact that these are agricultural lands. In that view
of the matter, deduction at the rate of 33% made by the High Court was
upheld. It may not, therefore, be correct to contend, as has been submitted
by Mr. Ranjit Kumar, that there cannot be different deductions, one for the
largeness of the land and another for development costs.”
11. As regards the judgments relied upon by the appellant, the same are
distinguishable. In Indumati Chitaley case (supra), it was noticed that
the land in question was agricultural land which could not be valued at par
with the value of the non-agricultural land as was sought to be claimed on
behalf of the appellant. In the said case, unlike the present case, there
was no finding that the land had immediate potential for
residential/commercial use. In Basant Kumar case (supra), it was observed
that while considering an instance of developed land as the basis for
determining the value of the agricultural land, one third of the value has
to be deducted towards providing amenities like roads, parks, electricity,
sewage etc. We have already noted the law laid down by this Court that
extent of cut depends on individual fact situations. In Karigowda case
(supra), it was observed that the existing potentiality alone has to be
taken into consideration while determining the compensation. Remote
beneficial factors cannot be made the basis for determining the
compensation. It was further observed that comparable sales method is a
preferred method over the other methods for determining the compensation.
There is no dispute with these propositions but in the facts and
circumstances of the case, we are unable to hold that the view taken by the
High Court is vitiated by any error of principle propounded in the relied
upon judgment or otherwise.
12. We, thus, do not find any ground to interfere with the impugned
judgment.
13. The appeals are dismissed with no order as to costs.
….…………………………….J.
[ V. GOPALA GOWDA ]

….……………………………..J.
NEW DELHI [ ADARSH KUMAR GOEL ]
September 9, 2014

———————–
[1] (1996) 11 SCC 542
[2] (1995) Suppl. 4 SCC 219
[3] (2010) 5 SCC 708
[4] (1988) 3 SCC 751
[5] (2005) 4 SCC 789

———————–
13

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