Acquisition Officer & Anr. Vs. M.K. Rafiq Saheb
J U D G M E N T
issue involved in the present case is whether the quantum of compensation awarded
by the High Court in a land acquisition dispute is excessive or not.
notification was published under section 4(1) of the Land Acquisition Act, 1894
(hereinafter referred to as `the Act') on 17.7.1994 for the acquisition of the respondents
land measuring 34 guntas in Sy. No. 6/2 of Binnamangala Mahavartha Kaval, K.R.
Puram, Bangalore South Taluk.
Special Land Acquisition Officer (hereinafter referred to as `SLAO') passed an
award on 26.9.1995 granting compensation at Rs.1,30,000/- per acre along with statutory
benefits. The SLAO concluded that the lands were agricultural and no sale transactions
relating to the same were available. Sale transactions were available in respect
of non-agricultural lands but they could not be adopted for determining the valuation
of agricultural land. Therefore, the SLAO chose to rely on acquisition
proceedings in respect of lands in the vicinity for determining land value. Accordingly,
it was found that in the neighbouring villages of Benniganahalli, B. Narayanapura
and Kaggadasapura villages, land had been acquired in favour of DRDO complex where
the government had approved awards fixing land value at Rs.1,30,000/-. The said
valuation was thus adopted by the SLAO in the instant case.
of the land was taken on 11.4.1996.
by the award of the SLAO, the respondent filed a reference under section 18 of the
Act for enhancement of compensation.
Reference Court, vide judgment dated 28.5.1999, enhanced compensation to Rs.4,00,000/-
per acre and also awarded statutory benefits. The Reference Court concluded that
based on the evidence on record, it could not be said that the land in question
was agricultural land for all practical purposes since it was situated by the side
of a residential locality and was in the midst of a highly developed industrial
locality. Thus, it held that though the land remained agricultural land on the records,
it was not an agricultural land for all practical purposes and no agricultural activities
could be carried out on it. The Court did not rely upon sale deeds Exhibit P3, P4,
P5, P6, P7 and P8. Exhibit P7 and P8 were not relied upon as the parties to the
transaction had not been examined. Ex. P3 and P4 were corner sites, were not within
vicinity of the acquired land and were sold in a public auction, and thus also held
not reliable. The respondent had also produced Ex. P9, which was a gazette notification
dated 20.1.1997 issued by the Revenue Secretariat, fixing the market value of
the immovable property coming under the jurisdiction of several Sub-Registrar's
office situated in Bangalore, for the purpose of collecting stamp duty. The Reference
Court discarded the same on the reasoning that the Court did not know what was
the basis of determination of market value for the purpose of collecting stamp duty
in respect of immovable properties by the Sub Registrar.
the Reference Court proceeded to determine the market value of land on the basis
of compensation awarded in the judgment and award dated 13.8.1998 made by the Reference
Court in respect of land in the neighbouring villages of Kaggadasapura and Mahadevapura,
pursuant to the preliminary notification dated 28.7.1988. In the said villages,
about 110 acres of land had been acquired and market value was fixed at Rs.2,48,000/-
per acre. The difference between dates of preliminary notifications in the
abovesaid villages and in the instant case was 5 years and 15 days. Accordingly,
the Reference Court gave a 10% enhancement for each year in respect of lands acquired
in and around Bangalore city, relying on the judgment in J. Narayan v. Land Acquisition
Officer, (1980) 2 KLJ 441, by which land value came to Rs.3,73,000/- per acre. However,
the Reference Court found that the land had more potentiality and was situated in
the midst of a heavy industrial area and in the immediate vicinity of an already
developed residential locality. It was also in the vicinity of a road known as
Old Madras road as well as the road leading to the airport. Hence, the Reference
Court was of the opinion that the respondent was entitled to a higher market value
than Rs.3,73,000/- per acre. Thus, the Reference Court held that Rs.4,00,000/- per
acre would be reasonable and fair market value in the instant case.
respondent, still dissatisfied with the compensation awarded, filed an appeal before
the High Court of Karnataka. The appellant also filed cross-objections under
Order 41, Rule 22 of CPC.
High Court, by way of impugned judgment dated 17.6.2004, enhanced the compensation
to Rs.35,17,470/- per acre and also awarded all other statutory benefits.
High Court accepted the finding of the Reference Court that the land in question
was fit to be utilized as a non-agricultural site as it was fully supported by evidence
on record. The High Court agreed with the Reference Court that the land had ceased
to be agricultural land and was fit to be used as a housing site or an
High Court then went onto determination of quantum of compensation. It concurred
with the Reference Court in rejecting Ex. P7, P8 and P9, stating that they could
not be relied upon as they related to transactions which had happened after the
issuance of the preliminary notification. Since other sale transactions were available,
which had taken place within reasonable time prior to the issuance of the section
4(1) notification, post-dated sale transactions could not be considered. The High
Court also concurred in rejecting Ex. P3 and P4 on ground that these sale transactions
related to corner sites sold at a public auction. Corner sites fetched much
more than other sites and when sold at a public auction, the price depended upon
the whims and fancies of the bidders. Thus, Ex. P3 and P4 could not be relied
upon to determine market value. Ex. P6 related to the sale of a site with a building
and thus it was not accepted. The High Court was of the opinion that Ex. P5 could
be used to determine market value. Ex. P5 was a sale deed dated 23.4.1993 of the
market value of a site measuring around 30' X 40' fixed at Rs.2,50,000/-, which
worked out to Rs.182/- per square feet. The High Court also deducted 50% of the
market value shown in Ex. P5 towards developmental charges, and market value of
the acquired land was computed at Rs.95/- per sq. ft.
aggrieved by the enhancement in compensation granted by the High Court, the appellant
approached this court by filing this appeal.
point that arises for consideration before us is whether High Court has correctly
enhanced compensation? Two related questions have to be answered to determine
the same. a. Whether the land is agricultural land or has it ceased to be so? b.
Whether Ex. P5, which relates to sale instance of a small piece of
non-agricultural land, can be used to determine the market value of land?
appellant has challenged the finding of the High Court that the land ceased to be
agricultural land. It contended that the land was agricultural land, as was clearly
seen from the records and no conversion charges were paid to convert it into non-agricultural
reject this contention of the appellant. That the land has ceased to be agricultural
land and is capable of being used as a residential or industrial site is a concurrent
finding of fact by both the Courts below and is amply supported by the evidence
on record. We uphold the same. The appellant did not file any appeal impugning the
finding of the Reference Court that the land could not be treated as agricultural
land. Not having done so, it is not open to the appellant to question the finding
of the High Court that the land is not agricultural land.
also, we are of the opinion that in light of the fact that the land was
situated by the side of a residential locality and was in the midst of a highly
developed industrial locality, the acquired land was capable of being used for non-agricultural
purposes and should be considered as non-agricultural land in determination of compensation.
We find support in this reasoning from the judgment of this court in Anjani Molu
Dessai v. State of Goa and Anr. reported in (2010)
SCC 710. The relevant portion of the said judgment is set out below: "5. The
High Court has also referred to the situation of the property and has noted that
the acquired lands are in a village where all basic amenities like primary health
centre, high school, post office were available within a distance of 500 meters.
It can therefore be safely concluded that the acquired lands are not undeveloped
rural land, but can be urbanisable land situated near a developed semi-urban village
with access to all infrastructure facilities."
find that the High Court relied on Ex. P5 to determine the market value of compensation.
It appears that the said sale instance relates to a small residential site
measuring 30' X 43' (125.309 sq. mts). The acquired land in question measures
34 guntas. The Reference Court rejected Ex. P5 in determining market value of land
since it found that the land covered by Ex. P5 was at a distance of 2 kms from the
acquired land. We are of the opinion that the Reference Court erred in
rejecting Ex. P-5 in determining compensation for the acquired land.
judgment of the High Court is well reasoned and well considered. We find no perversity
in its reasoning. The only issue is that Ex. P-5, which was relied upon by the High
Court, relates to a small piece of land, whereas the acquisition is of a larger
piece of land. It is not an absolute rule that when the acquired land is a large
tract of land, sale instances relating to smaller pieces of land cannot be considered.
There are certain circumstances when sale deeds of small pieces of land can be
used to determine the value of acquired land which is comparatively large in area,
as can be seen from the judicial pronouncements mentioned hereunder.
has been held in the case of Land Acquisition Officer, Kammarapally Village, Nizamabad
District, Andhra Pradeshv. Nookala Rajamallu and Ors. reported in (2003) 12 SCC
334 that: "6. Where large area is the subject-matter of acquisition, rate at
which small plots are sold cannot be said to be a safe criterion. Reference in this
context may be made to few decisions of this Court in Collector of Lakhimour v.
Bhuban Chandra Dutta: AIR 1971 SC 2015, Prithvi Raj Taneja v. State of M.P. AIR
1977 SC 1560 and Kausalya Devi Bogra v. Land Acquisition Officer AIR 1984 SC
892. 7. It 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 case of Bhagwathula Samanna and Ors. v. Special Tahsildar and Land Acquisition
Officer, reported in (1991) 4 SCC 506, it was held: "13. The proposition that
large area of land cannot possibly fetch a price at the same rate at which
small plots are sold is not absolute proposition and in given circumstances it would
be permissible to take into account the price fetched by the small plots of land.
If the larger tract of land because of advantageous position is capable of being
used for the purpose for which the smaller plots are used and is also situated in
a developed area with little or no requirement of further development, the
principle of deduction of the value for purpose of comparison is not warranted..."
Land Acquisition Officer, Revenue Divisional Officer, Chittoor v. Smt. L. Kamalamma
(dead) by Lrs. and others, AIR 1998 SC 781, this Court held as under:- "...when
no sales of comparable land was 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 lay out, lump sum payment as also the waiting period required for selling
the sites that would be formed."
it has also been held in the case of Smt. Basavva and Ors. v. Special Land Acquisition
Officer and Ors, reported in AIR 1996 SC 3168, that the court has to consider
whether sales relating to smaller pieces of land are genuine and reliable and whether
they are in respect of comparable lands. In case the said requirements are met,
sufficient deduction should be made to arrive at a just and fair market value
of large tracks of land. Further, the court stated that the time lag for real development
and the waiting period for development were also relevant factors to be considered
in determining compensation. The court added that each case depended upon its
own facts. In the said case, based on the particular facts and circumstances, this
court made a total deduction of 65% in determination of compensation.
may also be noticed that in the normal course of events, it is hardly possible for
a claimant to produce sale instances of large tracks of land. The sale of land containing
large tracks are generally very far and few. Normally, the sale instances would
relate to small pieces of land. This limitation of sale transaction cannot operate
to the disadvantage of the claimants. Thus, the Court should look into sale instances
of smaller pieces of land while applying reasonable element of deduction.
the present case, the land acquired is 34 guntas and the notification under section
4 of the Act was issued on 17.7.1994. We have already held that for the purposes
of determining compensation, the acquired land should be considered to be non-agricultural
land. Ex. P-5 is a sale deed for sale of a non-agricultural land dated 23.4.1993.
The land covered by the sale deed is about 2 kms. away from the acquired land.
contrast, the Reference Court relied upon the compensation awarded for
acquisition of land in the neighbouring villages, which had occurred 5 years prior
to the present acquisition. We are of the opinion that market value of the land
acquired in the present case is much better reflected by exemplar Ex. P-5, which
relates to sale of land just 2 kms. away from the acquired land and is just a little
over a year before the issuance of the section 4 notification in the present case.
All other sale deeds presented before this Court could be relied upon and were rightly
rejected by both the Reference Court and the High Court for the reasons given
we are of the opinion that the sale deed Ex. P-5 was rightly relied upon by the
High Court in determining compensation.
High Court made a 50% deduction since the sale instance Ex. P-5 related to a
smaller piece of land. We are of the considered view that the said deduction
should be increased to 60%, which we find fair, just and reasonable in the
the judgment of the High Court is modified to the extent of the abovementioned deduction.
All other findings of the High Court are sustained.
appeal is thus dismissed with the aforesaid modification. 30. No order as to
(ASOK KUMAR GANGULY)