Land Acq. Officer, Andhra Pradesh Vs. Nookala Rajamallu & Ors  Insc
586 (21 November 2003)
Raju & Arijit Pasayat. Arijit Pasayat,J
Special Leave Petition (civil) 7407-09 of 2003
of the respondents (hereinafter referred to as the 'claimants') measuring 11.33
acres situated in Kammarpally village, Nizamabad District were acquired by the
Government for providing house sites to weaker sections of people. The
Notification under Section 4(1) of the Land Acquisition Act, 1894 (for short
the 'Act) was gazetted on 4.6.1988. The claimants owned small extent of lands
situated in different survey numbers. The Land Acquisition Officer (in short
the 'LAO') passed an award fixing the market value of the acquired land at
Rs.12,325 per acre. Not accepting the compensation awarded by the LAO claimants
sought for reference under Section 18 of the Act for enhancement. The Reference Court after considering the evidence,
both oral and documentary, awarded compensation at the rate of Rs.10/- per sq.
yard besides awarding the statutory benefits available. Before the Reference Court, several instances of sales were
pressed into by the claimants. Ex.B/2 dated 18.6.1986 was for an extent of land
measuring 170 sq.yards. The Ex.B/3 related to an award of the year 1981 whereunder
Rs.9/- was awarded as compensation per square yard. Ex.B/4 is the sale deed
dated 23.1.1988 where extent of land was 162 square yards, and the rate of
consideration was Rs.82/- per sq. yard. Ex.B/5 is in respect of sale deed of
9.9.1985 where the extent of land was 127.5 square yards, and the sale
consideration was Rs.109/- per sq. yard. Claimants being still not satisfied
with the enhanced compensation filed an appeal before the Andhra Pradesh High
Court. A Division Bench of the said Court by the impugned judgment held that
the market value payable to the claimants was to be taken at Rs.55/- per sq.
into account the extent of land covered by the exemplar sale deeds and the
award made in respect of acquisition during the year 1981 the High Court was of
the view that the instances of sales were comparable sales in respect of the
lands under acquisition. Focusing of the sale consideration of the instance
covered by Ex.B/4, and making 1/3rd deduction for development, the value was
fixed at Rs.54/- per sq. yard. As there was time gap of five months between Ex.
B/4 and the notification, the escalation was taken to be Rs.1/- per sq. yard.
the rate of Rs.55/- per sq. yard was fixed and the statutory entitlements were
also directed to be paid.
counsel for the appellant submitted that the High Court did not take note of
the relevant aspects like the extent of land covered by the Exhibits, and the
proximity between the dates of sales and the date of acquisition, and more
importantly the fixation of rates per square yard in respect of acquisition in
1981. According to him, had these factors been considered, the rate could not
have been as high as fixed by the High Court.
contra, Mrs. K. Amreshwari, learned senior counsel appearing for the
respondents-claimants submitted that the High Court has adopted a right
approach in fixing the rates. The instances of sales related to lands which
were situated at a close proximity to the acquired land. The instance of award
cited by the appellant related to an interior small village and did not have
the advantages which the acquired lands have.
large area is the subject matter of acquisition, rate at which small plots are
sold cannot be said to be a safe criteria.
in this context may be made to few 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.
case of Suresh Kumar v. Town Improvement Trust, Bhopal (AIR 1989 SC 1222) 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 willing purchaser. While 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.
23 of the Act enumerates the matters to be considered in determining
compensation. The first criteria 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. Value 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.
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;
it should possess similar advantages.
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
evidence of record shows that the acquired lands were agricultural lands.
Obviously, their valuation would differ to a considerable extent from the land
used for house sites. In such a case, necessary deductions for the extent of
land acquired for the formation of roads and other civic amenities, expenses of
development of the sites by laying out roads, drains, sewers, water and
electricity lines, and the interest on the outlays for the period of deferment
of the realization of the price, the profits on the venture etc. are to be
made. (See Administrator General of West Bengal v. Collector, Varanasi (1988 (2) SCC 150). In Brig. Sahib
Singh Kalha and Ors. v. Amritsar Improvement Trust and Ors. (1982
(1) SCC 419) the deduction for such development was taken as 53%.
K.S. Shivadevamma and Ors. v. Assistant Commissioner and Land Acquisition
Officer and Anr. (1996 (2) SCC 62) this Court held as follows:
is then contended that 53% is not automatic but depends upon the nature of the
development and the stage of development. We are inclined to agree with the
learned counsel that the extent of deduction depends upon development need in
each case. Under the Building Rules 53% of land is required to be left out.
This Court has laid as a general rule that for laying the roads and other
amenities 33-1/3% is required to be deducted. Where the development has already
taken place, appropriate deduction needs to be made. In this case, we do not
find any development had taken place as on that date. When we are determining
compensation under Section 23(1), as on the date of notification under Section
4(1), we have to consider the situation of the land development, if already
made, and other relevant facts as on that date. No doubt, the land possessed
potential value, but no development had taken place as on the date. In view of
the obligation on the part of the owner to hand over the land to the City
Improvement Trust for roads and for other amenities and his requirement to
expend money for laying the roads, water supply mains, electricity etc., the
deduction of 53% and further deduction towards development charges @33- 1/3%,
ordered by the High Court, was not illegal".
applying the principles of law as set out in various decisions referred to
above to the facts of the case we feel that deduction at the rate of 53% from
the value indicated in Ex.B/4 would bring the rate per square yard to be around
Rs.40/-. The rate is accordingly fixed. The claimants shall be entitled to
compensation at the rate of Rs.40/- per sq. yard along with statutory
entitlements including interest on solatium. The appeals are allowed to the
aforesaid extent. Costs made easy.