of Uttar Pradesh Vs. Smt. Ram Kumari Devi  INSC
265 (15 February 1996)
K.Ramaswamy, K.G.B. Pattanaik (J)
JT 1996 (3) 380 1996 SCALE (2)627
APPEAL NOS. 3815-16 OF 1996 (Arising out of SLP (C) Nos.12146/95 and 16059/95) AND CIVIL APPEAL NO. 3817 OF 1996 [Arising out of SLP
(C) No.11256 of 1995]
O R D E
heard learned counsel on both sides.
under Section 4(1) of the Land Acquisition Act 1 of 1894 (for short, the 'Act')
was published on September
14, 1985 acquiring
13.75 acres for setting up the Government Degree College at Lalitpur, State of U.P.
The Land Acquisition Officer in his award dated September 1, 1988 made under Section 11 of the Act determined the
compensation at the rate of Rs. 11,887.78 per acre. On reference under section
18 of the Act, the District Judge by his award and decree dated April 21, 1990 determined the compensation at the
rate of Rs.5/- per sq. ft. On appeal by the appellants, the High Court reduced
the compensation to Rs.3.30 per sq. ft. by judgment and decree dated November 16, 1994 in First Appeal No.603/93 etc. Thus
these appeals by special leave.
contended by Shri A.B. Rohtagi, learned senior counsel for the appellants that
the whole approach adopted by the High Court and the reference Court is clearly
illegal and erroneous. When 13.75 acres of land was acquired for public
purpose, would a reasonable prudent purchaser offer to purchase the land at the
square foot basis is the question posed and rightly posed by the learned
counsel for the appellant. The reference Court relied on three sale deeds
Ex.A2, A3 and A1. Ex.A2 relates to an extent of 60'x20' of land sold by the
claimant himself on October
18, 1984 for a sum of
Rs.6,000/- which worked out at the rate of Rs.5/- per sq. ft. He also sold an
extent of land of 40'x40' ft. for a sum of Rs.8,000/- under Ex.A3 on January 19, 1983.
sq. ft. was sold for a sum of Rs.8,000/- on January 18, 1983 under Ex.A1. The reference Court relied upon these sale
deeds and also the rates prescribed by the local administration for the purpose
of stamp duty at Rs.8/- per sq. ft. for the road margins and Rs.5/- per sq. ft.
for the interior land. Relying thereon, the reference Court determined the
compensation at Rs.5/- per sq. ft. The High court while accepting the same,
deducted 1/3rd towards developmental charges and determined the compensation at
Rs.3.30 per sq. ft.
seen that small pieces of land of an extent of 60'x20', 40'x40' and 1600 sq.
ft. were sold by the claimants, obviously on coming to know of the proposed
acquisition. It is common knowledge that acquisition proposal would be made at
an earlier point of time and finalization of acquisition would take long time.
In the process, on becoming aware of the acquisition, obviously, these sale
deeds have been brought into existence to inflates the market value. It is laid
down by this Court which is well settled principle that it is the duty of the
court to assess reasonable compensation. Burden is on the owner to prove the
prevailing market value. On adduction of evidence by the parties, the acid test
which the Court has to adopt is that the court has to sit in the armchair of a
prudent purchaser, eschew feats of imagination and consider whether a
reasonable prudent purchaser in the open market would offer the same price
which the Court is intending to fix the market value in respect of the acquired
land. Since it is a compulsory acquisition, it is but the solemn duty of the
Court to assess reasonable compensation so as to allow the same to the owner of
the land whose property has been acquired by compulsory acquisition and also to
avoid needless burden on public exchequer. No feats of imagination would
require to bog the mind that when 13.75 acres of land was offered for sale in
an open market, no prudent man would have credulity to purchase that land on
sq. ft. basis. The High Court as well as the District Judge have committed a grave
error in not applying the above acid test while considering the case. They
merely proceeded by accepting the sale deeds which were obviously brought into
existence to inflate the market value and determined the compensation on the
price settled by them. Thus, we hold that both the Courts have applied a wrong
principle of law in determining the compensation.
question then is: what would be the reasonable market value? In the synopsis of
the case, the appellants themselves have indicated and the counsel has
reiterated that they are agreeable to pay at the rate of Rs.30,000/- per acre.
In view of their admission, the market value is determined at Rs.30,000/- per
claimants are entitled to statutory solatium under Section 23  and interest
under Section 28 till date of deposit of compensation amount and also
additional amount under section 23(1-A) on enhanced compensation of the
appeals of the State are accordingly allowed.
3817 OF 1996 ------------------- [@ SLP (C) No.11256 of 1995]
appeal being a cross-appeal by the claimant for further enhancement of compensation,
is dismissed. No costs.