Om Prakash & Ors Vs. Union of India & Anr  Insc 429 (5 August 2004)
Shivaraj V. Patil & B. N. Srikrishna. with Civil Appeal Nos. 5709 of 2002, 8591-8592 of 2003 and Civil Appeal No.
4986 of 2004 @ SLP (C) No. 21335 of 2002, Civil Appeal No. 4991 of 2004 @ SLP
(C) No. 21342 of 2002, Civil Appeal No. 4990 of 2004 @ SLP (C) No. 23385 of
2002, Civil Appeal No. 4989 of 2004 @ SLP (C) No. 1632 of 2003, Civil Appeal
No. 4987 of 2004 @ SLP (C) No. 12968 of 2003 and Civil Appeal No. 4988 of 2004
@ SLP (C) No. 21343 of 2002 SRIKRISHNA, J.
Leave granted in the special leave petitions.
These appeals are directed against the judgment of the High Court of Delhi
in appeals filed under Section 54 of the Land Acquisition Act, 1894
(hereinafter referred to as the 'Act') for determining the compensation payable
for certain lands acquired under the provisions of the Act.
Villages Bhorgarh, Kureni and Mamurpur are located side by side and the
lands situated in these villages were used for agricultural purposes or purposes
subservient thereto. Under the provisions of Sections 22 and 23 of Delhi Land
Reforms Act, 1954 there were certain restrictions on land usage due to which
the lands could only be used for agriculture, horticulture, animal husbandry
and allied uses. In the master plan the lands were shown in the green belt. By
a Notification dated 8.12.1982, issued by the Government of India, Ministry of
Works and Housing, the Central Government in exercise of its power under
sub-section (2) of Section 11 A modified the master plan for Delhi. The
modifications made were as under:
"(i) The land of an area measuring 21.043 hects. (52 acres) located
near Narela Town and situated on the west of Railway line to Ambala is changed
from 'Agricultural Green Belt' to 'Commercial (Warehousing and storage depots)'
(ii) The land use of an area measuring about 21.043 hects.
(52 acres) located near Village Ghevra and situated on the North of Railway
line to Rohtak is changed from 'Agricultural Green Belt' to 'Commercial
(Warehousing and storage depots)' ".
On 2.6.1983, a notification was issued under Section 4(1) of the Act,
whereby the lands for certain parcels situated within the said area were sought
to be acquired for the public purpose of construction of godowns for the Food
Corporation of India. This was followed by a declaration under Section 6 of the
Act made on 22.7.1983. Further proceedings under the Act ensued and on
5.9.1983, the Land Acquisition Collector made an award in each of the cases.
The Collector categorized the lands falling for acquisition into three blocks,
namely, 'A', 'B' and 'C'. He awarded a compensation of Rs.10,000/- per bigha
for land in Block 'A', Rs. 8,000/- per bigha for land in Block 'B' and Rs.
5,000/- per bigha for land in block 'C'. He also awarded compensation for
wells, trees and structures. Not being satisfied with the compensation awarded
by the Collector, the claimants moved for references under Section 18 of the
Act. The Reference Court by its judgment dated 12.3.1999 enhanced the market
value of the acquired lands to a uniform rate of Rs.36,300/- per bigha as on
the date of the notification under Section 4 of the Act. It also granted other
reliefs available under the Act.
The claimants filed Regular First Appeals under Section 54 of the Act questioning
the correctness of the judgment rendered by the Reference Court. The High Court
assessed the market value of the lands of the claimants at Rs.82,255/- per
bigha. It also directed solatium @ 30% on the enhanced amount of compensation
and interest @ 9% per annum for a period of one year from the date of Collector
taking possession and thereafter @ 15% per annum till payment of compensation
and on additional amount @ 12% on the market value from the date of
notification till the possession. It was also directed that if interest was
held payable on solatium in the case pending before the Supreme Court, such
interest will be paid to the claimants.
In civil appeals Nos. 5708/2002 and 5709/2002, the claimants- appellants
have impugned the judgment of the High Court while the Union of India is in
appeal in civil appeal Nos. 8591-8592/2003 and civil appeals arising out of
S.L.P. Nos. 21335/2002, 21342/2002, 21343/2002, 23385/2002, 1632/2003, and
The only question argued before us was the assessment of the market value of
the acquired lands as on the date of the notification under Section 4 of the
Act. No other issue was canvassed. The High Court has correctly found that the
topography, potentiality and advantages attached to and available to the lands
in the five adjoining villages, namely, Bhorgarh, Kureni, Mamurpur, Narela and
Tikri Khurd were almost the same on the date when the notification under
Section 4 was issued. It also referred to the fact that in its judgment in
R.F.A. 554/92 (Dharambir & Ors. vs. Union of India, decided on 23.9.1996)
the market value of the land had been assessed at Rs.25,000/- per bigha as
against the assessment made by the Reference Court @ Rs.17,500/- per bigha. An
appeal therefrom was carried to this Court and is the subject matter of the
decision of this Court in civil appeal No. 4405/1997 (Union of India vs.
Dharambir & Ors). While allowing the appeal of the State Government, this
Court held that Rs.16,750/- per bigha was the fair market value of all categories
of land situate at village Mamurpur as on the date of the notification under
Section 4 of the Act, i.e., on 30.10.1963.
While the claimants-appellants urged that after the notification issued on
8.12.1982 the lands in question had acquired great commercial potentiality and
that this fact had been lost sight of by the High Court in assessing the fair
market value as on the date of the notification under Section 4 of the Act, the
learned counsel for the Union of India contends that, despite the change in the
master plan, there was hardly any change in the land use between 8.12.1982 and
2.6.1983 when the notification under Section 4 of the Act was issued. The land
had been continued to be used for agricultural and allied purposes and there
was no commercial exploitation of the land at all despite it being allowed as a
result of change in the master plan.
Interestingly, a perusal of the appeal memorandum of the Union of India
shows that, even according to the Union of India the ascertainment of the fair
market value of the lands in question should have proceeded on the basis of
Rs.16,750/- per bigha as on 30.10.1963 with 12% escalation per year. If this
method is adopted, according to the Union of India, the fair market value of
the land as on the date of the notification under Section 4 of the Act would
come to Rs.56,112/- per bigha. [See ground (e) in the appeals arising out of
SLP) Nos. 21335/2002, 21343/2002, 23385/2002, and 12968/2003, and ground (d) in
the appeal arising out of SLP) No.1632/2003 and civil appeal
Nos.8591-8592/2003] The High Court noticed that the Government had not filed
appeals in most of the cases except a few and further that even the
claimants-appellants had not produced any evidence in support of their case for
increase in the amount of compensation. Apart from urging that there was
increase in the potentiality of the land in question, no material was placed
before the Reference Courts to show as to what would have been the market value
of the lands in question as on the date of the notification under Section 4 of
the Act, had the property been sold for the purpose of construction of a
warehouse or godown.
In the circumstances, the High Court was justified in working out the fair
market value of the lands in question on the basis of Rs.16,750/- per bigha as
on 30.10.1963. The High Court noticed that in several judgments of this Court
escalation at different and varying rates i.e. 6% per annum from 1959 to 1965,
@ 10% per annum for every year from 1966 to 1973 and @ 12% per annum from 1975 had
been considered to be reasonable increase to arrive at the fair market value,
assuming that the pace of escalation during this period was normal for the
entire period from 1959 onwards. Since no material was placed on record to show
that there was any abnormality during the period, the High Court applied the
same principle to the facts and circumstances before it, and accepted increase
of 10% every year progressively from 1963 to 1973 and thereafter @ 12% every
year progressively upto the date of acquisition. The High Court noticed in the
judgment that if escalation is allowed on this basis, the fair market value
would be Rs.1,28,889/- per bigha. In case progressive increase is allowed @ 10%
for the entire period, the amount will work out to Rs.1,08,397/- per bigha.
Allowing appreciation @ 12% for every year, not cumulatively, but at a flat
rate of 12% per annum from 1963 to 1983, the amount would work out to
Rs.56,112/- per bigha. The High Court in its judgment under appeal pointed out
that the market value of Rs.16,750/- per bigha fixed in the case of Dharambir
& Ors. vs. Union of India was not in respect of commercial land but only of
agricultural land. That the market value of agricultural land is much lower
than that of land suitable for commercial purposes, is trite.
After having worked out the market value of the lands on various bases and
keeping in view the fact that between 8.12.1982 and 2.6.1983, the lands in
question had at least some commercial potentiality, the High Court decided that
the fair market value of all categories of lands situated in the villages in
question as on the date of acquisition should be fixed at Rs.82,255/- per
Having heard the learned counsel and perused the judgment, we find it
difficult to disagree with the exercise carried out by the High Court. We think
that the High Court was justified in assessing the market value at a higher
rate on account of some increased potentiality of the lands. If at all, the
High Court has erred on the safer side in fixing the market value at
Rs.82,255/- per bigha. In the circumstances, we are unable to accept the
contention advanced by the claimants-appellants and the Union of India in their
respective appeals. Taking an overall view of the matter, we are satisfied that
the judgment of the High Court requires no interference under Article 136 of
the Constitution of India.
In the result, we dismiss all the appeals. However, in the circumstances,
there shall be no order as to costs.