Padma Uppal Vs. State of Punjab &
Ors  INSC 190 (23 August 1976)
SINGH, JASWANT SINGH, JASWANT RAY, A.N. (CJ)
BEG, M. HAMEEDULLAH
CITATION: 1977 AIR 580 1977 SCR (1) 329 1977
SCC (1) 330
CITATOR INFO :
R 1977 SC1560 (6) F 1984 SC 892 (13) R 1988 SC
580 (6) RF 1992 SC 666 (3)
Land acquisition--Fixing compensation--When
the Supreme Court could interfere.
Procedure--When a Court of appeal can
interfere in the lower court's judgment.
In respect of a vast area of land, partly
urban and partly rural, adjoining each other, acquired by the State Government
the Collector classified a part of it as potential building area and part as
agricultural land and fixed a slightly higher rate of compensation for the
former and a lower rate for the latter. Accepting the classification, the
Senior Sub-Judge to whom the determination of compensation was referred
enhanced the compensation in respect of both classes of land. In appeal, the
High Court further enhanced the compensation of both classes of land. In
further appeal to this Court, it was contended that since the whole of the land
in question formed one consolidation block, the entire area should have been
treated as potential building area and compensation fixed on the basis of the
Dismissing the appeals,
HELD: In an appeal from an award granting
compensation, this Court should not interfere unless there is a wrong
application of any well-settled principle or unless there is something to show
not merely that on the balance of evidence it is possible to reach a different
conclusion but that the judgment cannot be supported by reason of a wrong
application of a. principle or because some important point affecting valuation
has been overlooked or misapplied. There is a prudent condition to which the
appellate power, generally speaking is subject, namely that a court of appeal
interfeares not when the judgment under attack is not right but only when it is
shown to be wrong. [333 F] The Special Land Acquisition Officer, Bangalore
v.T..Adinarayan Setty  Supp. 1 S.C.R. 404. Dattatrayaya Shankarbhat
Ambalgi & Ors. v. The Collector of Sholapur & Anr.  3 S.C.C. 43
and The Dollar Company, Madras v. Collector of Madras  2 S.C.C. 730
In case of acquisition of several plots of
land which constitute one block comprising of agricultural land and potential
building area, the principle of belting has no application. As such the
erstwhile proprietors of the plots cannot be granted compensation for the
agricultural land at the same rate at which compensation is determined in
respect of potential building area which is better situate and possesses far
greater advantages. [332 G] Mirza Nausherwan Khan & Anr. v. The Collector
(Land Acquisition) Hyderabad  1 S.C.C. 238 applied.
CIVIL APPEALS Nos. 2694-2695, 2697-2700 and
Appeals from the Judgment and Order dated
3-1-68 of the Punjab and Haryana High Court in Regular First Appeal Nos. 190-193,
195198/62, 233 and 234/64 and CIVIL APPEALS NOS. 2694-2695, 2697-2700 and
Appeals from the Judgment and Order dated
3-1-68 of the Punjab & Haryana High Court in R.F.A. Nos. 192-193, 195198
330 S.T. Desai (In C. As. 2394-2397 of 1972),
F.S. Nariman (In C As. 2398 to 2402/72, Naunitlal and Miss Lalita Kohli for the
Appellants in C.As. 2394-2403/72 and for Respondents in C.As. 2694-2695,
2697-2700. and 2703-2704/72.
O.P. Sharma for the Appellant in C.As.
2694-2695, 26972700 and 2703-2704/72 and for the Respondents in C.As.
The Judgment of the Court was delivered by
JASWANT SINGH, J.--This batch of 18 appeals Nos. 2394 to 2403 of 1972 and 2694,
2695, 2697 to 2700, 2703 and 2704 of 1972 by certificates granted under Article
133(1)(a) of the Constitution which arise out of acquisition proceedings under
the Land Acquisition Act, 1894 (Act No. 1 of 1894) (hereinafter referred to as
'the Act') and are directed against the common judgment dated January 3, 1969
of the High Court of Punjab and Haryana shall be disposed of by this judgment.
While the first group of ten appeals Nos.
2394 to 2403 of 1972 are by the erstwhile
proprietors of land claiming enhancement of the compensation awarded to them by
the High Court, the rest of the eight appeals are by the State of Punjab
challenging the quantum of compensation as enhanced by the High Court.
It appears that a vast area of land measuring
832 kanals and 2 marlas (i.e. 416050 sq. yds) situate in Amritsar (Urban) and
village Tungbala, Amritsar was acquired by the Government of Punjab for a
public purpose viz. the expansion of the existing Medical College and allied
institutions in the city of Amritsar. Whereas the notification under section 4
of the Act in respect of the aforesaid area was issued on March 18, 1959, the notification
under section 6 of the Act wag issued on July 4, 1959. The Collector, Amritsar,
classified the aforesaid area for fixation of compensation into two categories
viz. the potential building area and the agricultural land. The Collector
categorised 60 kanals and 18 marlas (i.e. 30450 sq. yds). which abutted on the
circular Road and Majitha Road as potential building area and the remaining 771
kanals and 4 marlas as agricultural land and by his order dated December 2,
1959 awarded Re. 1/per sq. yd. as compensation for the potential building area
and Re. -/'6/per sq. yd. for agricultural land. Dissatisfied with the award,
the erstwhile proprietors approached the Collector requesting him to make,
references to the Senior SubJudge, Amritsar under section 18 of the Act. The
Senior Sub-Judge made a spot inspection for the purpose of appraisal of the
evidence adduced before him and by his judgment and award dated June 9, 1962
accepted the classification made by the Collector but enhanced the compensation
of the agricultural land to Re. 1/per sq. yd. and of the potential building
area to Rs. 1.50 per sq. yd. On appeal, the High Court after taking into
consideration some transactions of sales in the locality proximate in point of
time to the date of the publication of the notification under section 4(1) of
the Act, the opinion of the valuers regarding the trend of the prices of land
in the locality and the situation and potentialities of the land in question by
its aforesaid judgment and decree dated January 3, 1968 awarded Rs. 3/per sq.
yd. for the agricultural land and Rs. 4.50 per sq. yd. for 331 the potential
building area. It is against this judgment and decree that the present appeals,
as already stated have been preferred.
At the hearing of these appeals, counsel for
the appellants in the first set of ten appeals have, in the first instance,
urged that as the plots of land in question formed one consolidated block, the
entire area thereof should have been treated as potential building area and
compensation awarded accordingly. It has been next contended by counsel for the
appellants particularly in appeals Nos. 2402 and 2403 of 1972 that the High
Court has erred in overlooking the evidential value furnished by (i) the award
made by the Collector, Amritsar fixing Rs. 4/12/per sq. yd. as compensation for
the land measuring 28.75 acres in Amritsar (Urban) and 32.04 acres in village
Tungbala, Urban which was sought to be acquired in February, 1947, and
notification under section 4( 1 ) of the Act in respect whereof was published
on February 22, 1947, (ii) the price paid by the appellants in purchasing some
of the plots in question in October, 1946 and January, 1947 and (iii) the
transactions of sale of the land in the locality made in 1958-59which
conclusively established that the market value of the land in question was much
higher than that awarded by the High Court. On the other hand, it has been
contended by counsel for the State of Punjab and Collector, Amritsar that the
material on record did not warrant the enhancement by the High Court of the
compensation awarded to the erstwhile properties by the Senior Subordinate
Judge, Amritsar; that the High Court could not justifiably ignore the fact that
for 25 kanals and 10 marlas of land which lay in close proximity to the plots
of land in question and .was acquired by the State in May, 1956, the market'
value was assessed at Rs. 25/per maria i.e., Re. 1/per sq. yd.; and that in any
event, the High Court acted illegally in awarding compensation in excess of Rs.
4/per sq. yd. claimed by the respondents in the second set of six appeals Nos.
2694, 2695 and 2697 to 2700 of 1972.
Before dealing with the rival contentions
advanced by counsel for the parties, it will be appropriate to refer to the law
bearing on the matter. The measure of compensation to be awarded to the owners
of immovable property acquired by the State is enshrined in section 23(1) of
the Act which is designed to award just and fair compensation for the
acquisition. According to this provision, compensation 13.
as to be awarded on the basis of the market
value prevalent on the date of the publication of the notification under
section 4(1) of the Act. The connotation of the expression 'market value' has
been explained time and again by this Court. In Khaja Mizuddin v. State of
Andhra Pradesh(1), it was laid down as follows :-"Under section 23(1) of
the Act, in determining the amount of compensation. the court shall take into
consideration the market value of the land at the date of publication of the
notification under section 4(1 ) thereof. Decided cases have laid down that the
said market rate must be determined 1) C.A. 176 of 1962 decided on April 10,
332 by reference to the price which a willing
vendor might reasonably expect to obtain from a willing purchaser. For
ascertaining the market rate the court can rely upon such transactions which
would afford a guide to fix the price. Price paid for a land acquired within a
reasonable time from the date of acquisition of the land in question would
certainly be the best piece of evidence. Price paid for a land possessing
advantages similar to those of the land acquired in or about the time of
notification will also supply the data for assessment of compensation."
Bearing in mind the above principles, let us now deal with the contentions
raised by counsel for the erstwhile owners of the plots of land in question.
The contention of counsel for the appellants that compensation should have been
awarded treating the entire land as potential building area is devoid of
substance. It is true that the land in question constitutes one block but it
cannot be overlooked that the entire area thereof is not similarly situate and
does not possess the same or similar advantages and benefits. The Senior Subordinate
Judge (who had the advantage of spot inspection.) as also the High Court have
after careful analysis of the evidence observed that it is only the portion of
the area which adjoins the Majitha Road opposite to which is situate the Sacred
Heart Convent which lies close to Gopalnagar and a portion of the land on the
Circular Road opposite to which there are buildings that can reasonably be
regarded as a potential building area and the remaining area which extends far
beyond the alignment of the Sacred Heart Convent and does not possess the same
advantages cannot be treated at par with the former category of the land. It
has also been concurrently found by the Courts below that apart from the fact
that the land which falls within the second category is situate in the rear
away from habitation, it suffers from two other drawbacks in that it is not
accessible from either side of the two roads and there are no roads therein.
The erstwhile proprietors cannot, therefore, be justifiably granted
compensation for the agricultural land at the rate determined in respect of the
potential building area which possesses far greater advantages. We are
fortified in this view by a decision of this Court in Mirza Nausherwan Khan &
Anr. v. The Collector (Land Acquisition) Hyderabad(1) where Krishna lyer, J who
spoke for the Bench said :-"It is true that the Court has adopted a higher
value for a strip 50 feet wide adjoining the road, based on the principle of
belting. There is no doubt that when we deal with value of an extensive plot of
land in a city the strip that adjoins an important road will have a higher
value than what is in the rear, for obvious reasons of potential user or
commercial exploitation." We cannot also accede to the contention of
counsel for the appellants in appeals Nos. 2402 and 2403 of 1972 that they
should have at least been granted compensation for the potential buildings area
at Rs. 4/12/the rate fixed by the Collector, Amritsar for 28.75 acres in Amritsar
(Urban) and 32.04 acres in village Tungbala, Amritsar (1) [19751 1 S.C.C. 238.
333 sought to be acquired by the State in
February, 1947 as the proceedings for acquisition of the said area were dropped
and the proximity in point of time to the notification under section 4 (1 ) of
the Act which is a material factor is lacking.
The contention advanced on behalf of the
appellants in the aforesaid two appeals that the compensation awarded to them
could not be fixed below the price paid by them for some of the plots in
question in 1943, 1946 and 1947 has also no force. It cannot be ignored that
.Amritsar having come near the border as a result of the partition of the
sub-continent, the prices of land situate therein fell considerably soon after
the partition and kept on maintaining a low level for more than a decade.
The contention of counsel for the appellants
.in the aforesaid two appeals that they should have at least been awarded
compensation for the potential building area at the rate prevalent in Gopalnagar
in 195859 cannot also be acceded to. A glance at the chart of the acquisitions
which appears at page 85 of the Paper Book shows that the sales were of very
small plots of land. In seven transactions out of eight to which our attention
has been invited, the land acquired was below 200 sq. yds and in the eighth
transaction, it was 250 sq. yds. It is also well settled that in determining
compensation the value fetched for small plots of land cannot be applied to the
lands covering a very large extent and that the large area of land cannot
possibly fetch a price at the same rate at which small plots are sold.
(See Collector of Lakhimpur v. Bhuban Chandra
All the three contentions advanced on behalf
of the claimants of compensation, therefore, fail.
Let us now deal with the second set of the
aforesaid eight appeals preferred by the State of Punjab. While doing so, it
would be well to recall that it is well established that in an appeal from an
award granting compensation, this Court should not interfere unless there is a
wrong application of any well settled principle or unless there is something to
show not merely that on the balance of evidence it is possible to reach a
different conclusion but that the judgment cannot be supported by reason of a
wrong application of a principle or because some important point affecting
valuation has been overlooked or misapplied. Moreover, there is a prudent
condition to which the appellate power, generally speaking, is subject. A court
of appeal interferes not when the judgment under attack is not right but only
when it is shown to be wrong. (See The Special Land Acquisition Officer,
Bangalore v. T. Adinarayan Setty(2) Dattatrayaya Shankarbhat Ambalgi & Ors.
v. The Collector of Sholapur & Anr.(3) and The Dollar Company, Madras v.
Collector of Madras(4).
The first contention advanced on behalf of
the State that the erstwhile owners of the land in question could not be given
compensation higher than that assessed for the acquisition made by the State
for the construction of Hygiene and Vaccine Institute is devoid of force.
(1) A.I.R. 1971 S.C. 2015 (2)  Supp. 1
(3)  3 S.C.C. 43. (4)  2 S.C.C.
334 Whereas the notification under section
4(1) of the Act with regard to that acquisition was published on May 17, 1956,
the notification under the said provision or the Act in respect of the instant
acquisition was published on March 18, 1959 when the market value of the land
in the locality had risen very high. The ratio of compensation assessed for the
former acquisition cannot, therefore, serve as a safe guide for determination
of compensation for the acquisition in question. Similarly, the consideration
paid by Smt.
Balwant Kaur to Shri Girdbari Lal in March,
1957 for the purchase of land cannot also serve as a safe guide as this
transaction also took place in March, 1957 i.e., nearly two years before the
publication of the aforesaid notification in respect of the present
acquisition. The High Court was, in our opinion, perfectly justified on the
basis of the material before it in fixing compensation at Rs. 4.50 per sq. yd.
for the potential building area and Rs. 3.00 for the agricultural area in
respect of the plots of land involved in appeals Nos. 2402 and 2403 of 1972.
The High Court, however, was wrong in overlooking an important point affecting
compensation payable to the erstwhile owners of the potential building area
involved in appeals Nos. 2694, 2695 and 2697 to 2700 of 1972. The said
claimants having claimed compensation only at the rate of Rs. 4.00 per sq. yd.
in the first appeals filed by them in the High Court, they could not have been
awarded compensation exceeding that rate.
Thus the said appeals filed by the State
cannot but be allowed to the extent to which the compensation awarded to the
claimants in respect of the potential building area acquired exceeds Rs. 4.00
per sq. yd.
In the result, appeals Nos. 2394 to 2403 of
1972 and 2703 and 2704 of 1972 fail and are hereby dismissed with costs
(limited to one hearing fee) and appeals Nos. 2694, 2695 and 2697 to 2700 of
1972 are allowed with costs (limited to one hearing fee) to the extent
P.B.R. Appeals partly allowed.