of Maharashtra Vs. Digamber Bhimashankar Tandale &
Ors  INSC 183 (2
K.Ramaswamy, K.G.B. Pattanaik (J)
1996 SCC (2) 583 JT 1996 (2) 528 1996 SCALE (2)271
APPEAL NOs. 3377-79 of 1996 (Arising out of SLP (C) Nos. 327-29/95) AND CIVIL
APPEAL NO. 3380-82 OF 1996 [Special Leave Petition (C) NO. 4152-54 of 1996]
O R D
have heard the counsel on both sides. The notification under section 4(1) of
the Land Acquisition Act was published in the State Gazette on July 14, 1977 acquiring 12.50 acres of land for
extension of the Thermal Power Station at Parali Vaidyanath Municipality. The Land Acquisition Officer in his award dated 20.9.1978
determined the compensation at Rs.3,000/- per acre, namely, 72.5 per Area. On
reference, the Additional District Judge by his award and decree dated April 27, 1987 enhanced the compensation at Rs.5/-
per Sq. ft. On appeal, the High Court while confirming the said determination,
reduced l/3rd of the amount towards development charges. Thus these appeals by
special leave by the State 35 well as by the Electricity Board and also by the
claimants against the deduction of 1/3rd amount. Thus these appeals are heard
only question is: what will be the just and adequate compensation to which the
lands are capable to fetch in open market? It is settled law that the
determination of compensation on sq. ft. basis is an illegal principle followed
by the courts. The reference Court on feats of imagination has done it. When
12.50 acres of land is sought to be acquired, no reasonable prudent purchaser
would come forward to purchase the land on the sq. ft. basis. It would be
incredulous to believe such a purchase.
the premise on which the reference Court and the High Court had proceeded to
determine the compensation is obviously illegal. It is not in dispute that as
on the date of the notification, the lands were agricultural lands though
situated within the municipal limits. It is also in evidence that the lands
were converted for non agricultural purpose. But as on the date of
notification, there was no development in that area. The oral evidence was
adduced in which it was shown that upto a distance of 3/4th km. to the lands
there was development. Some illegal constructions were made on the lands. Under
those circumstances, as on the date of the notification there was no potential
value to the lands though converted into non-agricultural lands. The
determination of the compensation on the basis of the potential value is also
reference Court has relied upon several sale deeds dated 14.1.1976, Exs.48, 49
and 50 of a small extent of land sold on sq. ft. basis and on that premise the
Court had determined the compensation. It is settled law that when a large
extent of land is acquired, the sales of small pieces of land though genuine,
cannot be relied upon as the basis to determine the compensation. Accordingly,
they are excluded. Having excluded those documents, there is no other
acceptable evidence to determine compensation on the basis of sq. yd. or sq. mtr.
Accordingly, it is not capable to determine the compensation on sq. yd. or sq. mt.
basis since the lands are not possessed of potential value as building site as
on the date of notification.
question then is what would be the just, fair and adequate compensation the
lands can fetch? In the facts and circumstances and in view of the statement
made by the Land Acquisition Officer that the lands are abutting the Thermal
Power Station, the possibility of extension for building purpose can also be
easily ruled out. However, the compensation for the lands situated near the
Thermal Power Station can be fixed at Rs.40,000/- per acre.
the appeals of the State as well as the Electricity Board are allowed and that
of the claimants is dismissed. The claimants are entitled only to payment of solatium
and interest under the Act as amended by Act 68 of 1984. They are entitled to
interest at 9% per annum for one year on enhanced compensation from the date of
taking possession and thereafter at 15% till the date of deposit.
are also entitled to payment of solatium at 30% on the enhanced compensation.
However, they are not entitled to payment of additional amount under section
23(1-A) of the Land Acquisition Act. No costs.
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