Lucknow Development Authority Vs. Krishna Gopal Lahoti and Ors  Insc
1112 (2 November 2007)
Arijit Pasayat & Lokeshwar Singh Panta
APPEAL NO. 5112 OF 2007 (Arising out of SLP (C) No.12446 of 2005) Dr. ARIJIT
Challenge in this appeal is to the judgment of a Division Bench of the Allahabad
High Court, Lucknow Bench dismissing the appeal filed by the appellant under
Section 54 of the Land Acquisition Act, 1894 (in short the 'Act') read with
Section 96 of the Code of Civil Procedure, 1908 (in short 'CPC').
the First Appeal challenge was to the award dated 18.2.1998 passed by the
Presiding Officer, Nagar Mahapalika Tribunal, Lucknow in a reference under
Section 18 of the Act in land case No.746 of 1991 titled Krishna Gopal Lahoti
v. State of U.P.
factual background in a nutshell is as follows:
large area of land measuring 194 bigha 19 biswa 14 biswansi and 14 kachwansi
situated in village Purania and Mahibullapur was sought to be acquired by appellant-
Lucknow Development Authority under the housing and development scheme known as
"Timber Nagar Avasiya Yojana". Khasra plot No.379 measuring 8 bigha,
and Khasra plot No.394 measuring 2 bigha, 8 biswa 15 biswansi situated at
village Mahibullapur and belonging to the claimants Krishna Gopal Lahoti, Sharad
Kumar Lahoti, Sunil Kumar Lahoti and Sudhir Kumar Lahoti were also acquired
under the said scheme. The relevant notification under Section 4 was issued on
26.3.1986. The notification under Section 6 of the Act was published on
28.5.1986. The possession of the acquired land was taken on 17.12.1986 and
Award under Section 11 of the Act was made on 27.5.1988 by the Special Land
Acquisition Officer. The Special Land Acquisition Officer in his Award under Section
11 of the Act determined the market value of the land in question at the rate
of Rs.2.20 per sq. ft.
Aggrieved by the aforesaid Award, reference under Section 18 was preferred by
the land owners, inter alia, stating that adjoining to the land in question,
there is Lucknow- Sitapur Highway and nearby the acquired land there are number
of colonies such as Aliganj Colony, Kapurthala Complex, P & T Colony, Arif
Complex, Public Service Commission and Office of Geological Survey of India.
According to the landowners, the land in question has great potential value and
the market value as determined by the Special Land Acquisition Officer is quite
inadequate. The market value of the land at the rate of Rs.60/- per sq.ft. was
claimed by the respondents besides statutory benefit under Act 68 of 1984.
Lucknow Development Authority and the State
of U.P. filed written statements
separately. It was stated that the compensation as determined and awarded by
the Special Land Acquisition Officer is quite adequate and the claimants are
not entitled to the benefits of the provisions of Act 68 of 1984. It was stated
that claim petition is barred by time. It is also barred by the provisions of
the Urban Land Ceiling Act, 1976 (in short 'ULC' Act) and by the provisions of
Section 31 of the Act.
Both the parties led oral and documentary evidence.
learned Tribunal could not find any substance in the pleas raised by the
appellants regarding claim being barred under various heads as alleged in the
written statements and all the issues were decided in negative against the
Tribunal further found that the claimants are entitled to the benefit of
provisions of Act of 68 of 1984 and on the basis of the evidence on record, the
Tribunal determined the market value of the land at Rs.6/- per sq. ft. and
accordingly compensation was awarded by the impugned Award.
Against the Award, the First Appeal was filed before the High Court. Primarily,
it was contended before the High Court that the Tribunal had not properly
evaluated the evidence on record and wrongly placed reliance on a sale deed
relating to a small piece of land. It was also submitted that without any
proper appreciation of materials on record the compensation was enhanced.
Stand of the respondents before the High Court was that there was no illegality
in the Award passed by the reference court. It was submitted that the land was
situated near densely populated area having great potential value and the
appellate authority is selling the same land at the rate of Rs.300/- per sq.
ft. The reference court on the basis of oral and documentary evidence has
awarded compensation at the rate of Rs.6/- per sq. ft. along with other
benefits as provided under the Act. The High Court found that the claimants had
filed number of sale deeds of varying rates ranging between Rs.10/- per sq. ft.
to Rs.5/- per sq. ft. but the sale deed relating to the plot No.166 situated at
Mahibullahpur was relied upon by the Tribunal and the reasons for enhancing the
compensation were assigned which according to the High Court did not call for
any interference. The High Court did not find any substance in the plea of the
appellant that the sale deed (Ex.C-38) was unduly relied upon by the Tribunal.
It was pointed out that the sale deed is related to a very small piece of land
as against the large area of more than 10 bighas involved in the present case.
The High Court referred to certain decisions of this Court to hold that while
determining the market value of the land, the potentiality of the land is a
very material consideration and several factors like location of the land, its
surroundings, available facilities thereon in the vicinity, nature of the land
have to be taken into account. The High Court also found that there was no
similarity between the land which was the subject matter of dispute in land
acquisition case No.204 of 1992 where the rate fixed was Rs.1.85 per sq. ft.
The High Court further found that two sale deeds (Ga 26 and Ga 27) reflected
that the rate was Rs.3/- per sq. ft.
instances were referred to in holding that the market value is much higher.
After granting deduction of 25% on account of expenses to be incurred towards
plotting and development charges, the rate was fixed at Rs.6/- per sq. ft.
the High Court did not find any substance in the stand that the deduction
should be at least 40% and not 25% as done. Accordingly, appeal as noted above
support of the appeal, learned counsel for the appellant re-iterated the stand
taken before the High Court.
response, learned counsel for the respondents submitted that three sale deeds
namely, C-38, 39 and 40 clearly show that rate is much higher. It was pointed
out that this Court has depending on the facts of the case, allowed deductions
ranging between 20% to 33%. That cannot be a hard and fast rule and in fact it
would depend upon various factors.
Where large area is the subject matter of acquisition, rate at which small
plots are sold cannot be said to be a safe criteria. Reference in this context
may be made to three decisions of this Court in The Collector of Lakhimpur v. Bhuban
Chandra Dutta (AIR 1971 SC 2015), Prithvi Raj Taneja (dead) by Lrs. v. The
State of Madhya Pradesh and Anr. (AIR 1977 SC 1560) and Smt.
Kausalya Devi Bogra and Ors. etc. v. Land Acquisition Officer, Aurangabad and Anr. (AIR 1984 SC 892).
cannot, however, be laid down as an absolute proposition that the rates fixed
for the small plots cannot be the basis for fixation of the rate. For example,
where there is no other material it may in appropriate cases be open to the
adjudicating Court to make comparison of the prices paid for small plots of
land. However, in such cases necessary deductions/adjustments have to be made
while determining the prices.
the case of Suresh Kumar v. Town Improvement Trust, Bhopal (1989 (1) SVLR (C)
399) in a case under the Madhya Pradesh Town Improvement Trust Act, 1960 this
Court held that the rates paid for small parcels of land do not provide a
useful guide for determining the market value of the land acquired. While
determining the market value of the land acquired it has to be correctly
determined and paid so that there is neither unjust enrichment on the part of
the acquirer nor undue deprivation on the part of the owner. It is an accepted
principle as laid down in the case of Vyricherla Narayana Gajapatiraju v.
Revenue Divisional Officer, Vizagapatam
(AIR 1939 P.C. 98) that the compensation must be determined by reference to the
price which a willing vendor might reasonably expect to receive from the
considering the market value, disinclination of the vendor to part with his
land and the urgent necessity of the purchaser to buy it must alike be disregarded,
neither must be considered as acting under any compulsion. The value of the
land is not to be estimated as its value to the purchaser. But similarly this
does not mean that the fact that some particular purchaser might desire the
land more than others is to be disregarded. The wish of a particular purchaser,
though not his compulsion may always be taken into consideration for what it is
worth. Section 23 of the Act enumerates the matters to be considered in
determining compensation. The first criterion to be taken into consideration is
the market value of the land on the date of the publication of the notification
under Section 4(1). Similarly, Section 24 of the Act enumerates the matters
which the Court shall not take into consideration in determining the
compensation. A safeguard is provided in Section 25 of the Act that the amount
of compensation to be awarded by the Court shall not be less than the amount
awarded by the Collector under Section 11.
of the potentiality is to be determined on such materials as are available and
without indulgence in any fits of imagination. Impracticability of determining
the potential value is writ large in almost all cases. There is bound to be
some amount of guess work involved while determining the potentiality.
can be broadly stated that the element of speculation is reduced to minimum if
the underlying principles of fixation of market value with reference to
comparable sales are made:
sale is within a reasonable time of the date of notification under Section
should be a bona fide transaction;
should be of the land acquired or of the land adjacent to the land acquired;
and (iv) it should possess similar advantages.
is only when these factors are present, it can merit a consideration as a
comparable case (See The Special Land Acquisition Officer, Bangalore v. T. Adinarayan Setty (AIR 1959 SC
These aspects have been highlighted in Ravinder Narain and Anr. V. Union of India (2003 (4) SCC 481)
deduction to be made towards development charges cannot be proved in any
strait-jacket formula. It would depend upon the facts of each case.
is well settled that in respect of agricultural land or undeveloped land which
has potential value for housing or commercial purposes, normally 1/3rd amount
of compensation has to be deducted out of the amount of compensation payable on
the acquired land subject to certain variations depending on its nature,
location, extent of expenditure involved for development and the area required
for roads and other civic amenities to develop the land so as to make the plots
for residential or commercial purposes. A land may be plain or uneven, the soil
of the land may be soft or hard bearing on the foundation for the purpose of
making construction; may be the land is situated in the midst of a developed
area all around but that land may have a hillock or may be low-lying or may be
having deep ditches. So the amount of expenses that may be incurred in
developing the area also varies. A claimant who claims that his land is fully
developed and nothing more is required to be done for developmental purposes,
must show on the basis of evidence that it is such a land and it is so located.
In the absence of such evidence, merely saying that the area adjoining his land
is a developed area, is not enough particularly when the extent of the acquired
land is large and even if a small portion of the land is abutting the main road
in the developed area, does not give the land the character of a developed
area. In 84 acres of land acquired even if one portion on one side abuts the
main road, the remaining large area where planned development is required,
needs laying of internal roads, drainage, sewer, water, electricity lines,
providing civil amenities etc. However, in cases of some land where there are
certain advantages by virtue of the developed area around, it may help in
reducing the percentage of cut to be applied, as the developmental charges
required may be less on that account. There may be various factual factors
which may have to be taken into consideration while applying the cut in payment
of compensation towards developmental charges, maybe in some cases it is more
than 1/3rd and in some cases less than 1/3rd.
must be remembered that there is difference between a developed area and an
area having potential value, which is yet to be developed. The fact that an
area is developed or adjacent to a developed area will not ipso facto make
every land situated in the area also developed to be valued as a building site
or plot, particularly, when vast tracts are acquired, as in this case, for
The aforesaid aspects were highlighted in Kasturi and Ors. v. State of Haryana (2003 (1) SCC 354)
reference may also be made to what has been stated in Kiran Tandon v. Allahabad
Development Authority and Anr. (2004 (10) SCC 745), State of West Bengal v. Kedarnath Rajgarhia Charitable
Trust Estate (2004 (12) SCC 425) and V. Hanumantha Reddy (dead) by Lrs. V. Land
Acquisition Officer & Mandal R. Officer (2003 (12) SCC 642).
Keeping in view the general principles and the factual scenario as evident from
the materials brought on record, we sustain the market value fixed (i.e. Rs.8/-
sq.ft.) but instead of 25% development charges one-third has to be deducted.
The entitlements shall be worked out on that basis.
The appeal is allowed to the aforesaid extent with no order as to costs.