C.R.Nagaraja Shetty Vs.
Spl.Land Acq. Officer & Estate Officer.& ANR  INSC 400 (24
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.1173 OF 2009 (Arising out
of SLP (C) No. 8378 of 2008) C.R. Nagaraja Shetty .... Appellant Versus Special
Land Acquisition Officer and Estate Officer & Anr. .... Respondents
V.S. SIRPURKAR, J.
present appeal has a slightly chequered history. Land acquisition proceedings
were initiated in respect of the land, bearing Survey No. 4 of Beratana
Agrahara Village, Begur Hobli, Bangalore South Taluk, measuring 35 guntas,
belonging to the appellant. Section 4 Notification dated 29.11.1990 was
published on 20.12.1990. After Section 5-A enquiry, declaration under Section 6
of the Land Acquisition Act (hereinafter referred to as `the Act') was
published on 18.6.1992. In the award proceedings dated 9.12.1994, the
compensation was determined at 2 Rs.10/- per square feet. An application for
enhancement under Section 18 of the Act was filed by the appellant and
Reference Court partly allowed the Reference and enhanced the compensation to
Rs.27.50 per square feet.
The appellant was
also held to be entitled to solatium at 30% of the market value and for
additional amount at 12% p.a. under Section 23(1-A) of the Act. The Reference
Court accepted that this was non-agricultural land and was situated adjacent to
the Highway and thus, it had potential for being used for commercial purpose.
The public purpose for which the land was acquired, was for widening of the
by the judgment of the Reference Court, an appeal was filed before the High
Court. The High Court set aside the order of the Reference Court, enhancing the
compensation and strangely enough held that the Reference Court had erred in
enhancing the compensation.
Aggrieved by the
judgment of the High Court, the appellant filed a Special Leave Petition, being
SLP (Civil) No. 8575 of 2006 before this Court. This Court, by its order dated
26.2.2007, set aside the judgment and remanded the matter to the High Court to
consider the appeal afresh. Accordingly, the High Court heard the matter again
and partly allowed the appeal, enhancing the compensation amount at Rs.75/- per
square feet. However, the High Court deducted Rs.25/- per square feet for
The High Court also
did not award the compensation towards yielding coconut trees, barbed fencing
wire etc. Aggrieved by that order, the appellant, now, has come before us by
way of the present appeal.
Learned Counsel appearing on behalf of the appellant urged that considering
that this land was on the outskirts of Bangalore City and had the great
commercial potential, the High Court was bound to give enhanced compensation,
at least at the rate of Rs.100/- per square feet. It was pointed out that the
acquired land was on the National Highway and as such, had the potential for
commercial purposes. The Learned Counsel further, by way of his second
submission, urged that the High Court, at any rate, should not have deducted
Rs.25/- per square feet, so as to limit the compensation to Rs.50/- per square
feet. The Learned Counsel pointed out that such deduction for development
charges was completely unjustified, particularly, because there could be no
development in the small piece of land. The Learned Counsel relied upon the judgment
reported in 2007 (9) SCC 447.
against this, the Learned Counsel appearing on behalf of the respondent,
supported the impugned judgment and contended that in fact, the High Court had
given much more compensation than what was actually deserved by the appellant.
High Court has increased the compensation from Rs.27.50/- per square feet to
Rs.75/- per square feet. In the impugned judgment, the High Court observed that
the concerned land was abutting the National Highway and was within 15 kilometers
from Bangalore City Corporation limit and further that all-round development
has taken place as industries have come up thereby. In this, the High Court
relied upon a Division Bench judgment passed by the same High Court, wherein,
it was found that the value of the nearby land was Rs.62.50/- per square feet.
The High Court ultimately held that since the said land referred to in the
earlier judgment passed by it was 25-30 kilometers away from Bangalore Bus
Station, the present land would deserve a better rate than the one given in the
earlier judgment, since it was only 15 kilometers away from the Bus Station.
Accordingly, the High Court recorded a finding that the rate of Rs.75/- per
square feet would be a proper rate. We are satisfied with this finding of the
High Court, as the Learned Counsel has not been able to show anything from the
record to hold that the concerned land would deserve a higher price than the
one awarded by the High Court. We are generally satisfied with the finding of
the High Court and would choose to confirm the same. Thus, we hold that the
High Court was right in awarding the rate of Rs.75/- per square feet for the
leaves us with the other question of deduction ordered by the High Court.
High Court has directed the deduction of Rs.25/- per square feet.
Unfortunately, the High Court has not discussed the reason for this deduction
of Rs.25/- per square feet nor has the High Court relied on any piece of
evidence for that purpose. It is true that where the lands are acquired for
public purpose like setting up of industries or setting up of housing colonies
or other such allied purposes, the acquiring body would be entitled to deduct
some amount from the payable compensation on account of development charges,
however, it has to be established by 5 positive evidence that such development
charges are justified. The evidence must come for the need of development
contemplated and the possible expenditure for such development. We do not find
any such discussion in the order of the High Court. As if this is not
sufficient, when we see the judgment of the Principal Civil Judge (Sr.
Division), Bangalore, Rural District, Bangalore in Reference proceedings, we
find that there is no deduction ordered for the so-called development charges.
We are, therefore, not in a position to understand as to from where such
development charges sprang up. 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
widening of the National Highway. There would, therefore, be no question of any
such development or any costs therefor.
Officer, South Goa and Others in 2007(9) SCC 447, 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 Railway line. In paragraph 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 Railways and
that the purpose is a relevant factor to be taken into consideration for fixing
the 6 compensation. The Court relied on judgment in Viluben Jhalejar was 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. Further, in paragraph 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
The Court made a
reference to two other cases, viz., Hasanali 334 respectively, where, the
deduction by way development charges, was held permissible. 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 feet out of the ordered
compensation at the rate of Rs.75/- per square feet. We set aside the 7
judgment to that extent. The claimant would, therefore, be entitled to the
compensation at the rate of Rs.75/- per square feet with all the statutory
benefits like solatium under Section 23(2), 12% interest under Section 23 (1-A)
on the enhanced market value and interest at 9% and 15% as provided under
Section 34 of the Act for one year and the rest of the period from the date of
taking possession till the date of payment of the compensation awarded in
favour of the claimant. With this, we partly allow the appeal and modify the
order of the High Court.