ACQ., Gujarat & ANR Vs. Madhubai Gobarbhai & ANR  INSC 1306 (29
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 204 OF
2000 DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. ... APPELLANTS Versus
With C.A. No. 213/2000, C.A. Nos. 214-219/2000, C.A. Nos. 205-212/2000, C.A. No.
221-324/2000, C.A. No. 325-331/2000, C.A. No. 4090/2000, C.A.
4091/2000, C.A. No. 2973-2978/2001.
appeals involving common questions of law and fact were taken up for hearing
together and are being disposed of by this common judgment.
of Gujarat issued diverse notifications for acquisition of a huge tract of
lands for construction of a dam over a river known as `Thebi'.
sought to be acquired were spread over in three villages, namely, Amreli,
Baxipur and Giriya. Whereas villages Amreli and Baxipur are 2 situated on the
western side of river and within the municipal limit of the town of Amerli;
village Giriya is on the eastern bank thereof and outside the municipal limit
of the said town Amreli.
the headquarters of the District Amreli. It is a well developed town. A
National Highway known as "Amreli - Chittal Road" passes through the
town of Amreli.
residents of the town enjoy the facilities of transportation, hospitals,
schools, colleges, telephone, etc. It is, however, admitted that the entire
development has taken place on the eastern bank of the river and not on the
western bank. The villages situate on the western bank, however, admittedly are
wholly undeveloped. The lands under acquisition are agricultural lands. The
land upon acquisition were to be submerged under water.
Acquisition Officer made three different awards for three different villages.
agricultural lands situate in village Baxipur, which are the subject matters of
judgment and order dated 23.02.1998 passed in F.A. No. 3119/1997 and F.A. No.
3120/1997 and judgment and order dated 4.5.1999 3 passed in F.A. Nos.
6184-6203/1995 and other connected appeals, compensation was awarded at the
rate of Rs.75/- per square meter.
350 land owners, however, only 156 land owners filed applications for reference
before the Collector in terms of Section 18 of the Land Acquisition Act, 1894
(hereinafter referred to as, "the said Act").
Reference Court awarded compensation calculating the market value thereof at
the rate of Rs. 75/- per square meter in respect of lands situate in Baxipur
village (western side of river The bi), Giriya village (eastern side of river
Thebi) and Amreli village (western side of river The bi).
So far as
the lands situate within the Amreli town, which is within the municipal area
and situate on the eastern side of the river comprising of residential and
commercial area which was developed since 1984, are concerned; the Land
Acquisition Officer awarded compensation at the rate of Rs.50/- per square
meter in respect of agricultural lands, but the Reference Court and the High
Court awarded compensation at the rate of Rs.160/- per square meter of land.
For the same area in respect of non- agricultural lands, the Land Acquisition
Officer awarded compensation at the rate of Rs.150/- per square meter whereas
the Reference Court as also the High Court awarded compensation at the rate of
Rs.240/- per square meter.
4 So far
as acquisition of lands which are subject matter of C.A. No. 325-331/2000,
situated in village Giriya are concerned; whereas the Land Acquisition Officer
awarded compensation at the rate of Rs.12/- per square meter in respect of
agricultural lands and Rs. 50/- per square meter in respect of non-agricultural
lands, the Reference Court awarded compensation for both categories of land at
the rate of Rs.400/- per square meter, the High Court, however, while upholding
the said amount of compensation in respect of non-agricultural lands reduced
the amount of compensation to Rs.300/- per square meter for agricultural lands.
by and dissatisfied with the aforementioned judgments, the State of Gujarat is
before us. An appeal has also been filed by some of the claimants owning
non-agricultural lands and raised constructions for use of the same as godown.
deal with the relevant facts and submissions made before us in each group separately.
GROUP - I
With a view to appreciate the rival contentions of the parties, we may notice
heretobelow the number of matters and the other relevant facts for our 5
purpose which are involved in Group -I wherein compensation has been awarded at
the rate of Rs.75/- per square meter Group No. Total C.A. No. F.A. No.
Notificatio Date of matters n Section 4 Judgment dated 1 1 204/2000 3119/1997
5.6.1993 23.2.1998 2 1 213/2000 3120/997 17.9.1992 23.2.1998 3 20 221-240/2000
6184- 15.3.1990 4.5.1999 6203/1995 2 241-242/2000 5289- 15.3.1990 4.5.1999
5290/1996 7 243-249/2000 269- 15.3.1990 4.5.1999 275/1997 11 250-260/2000 910-
15.3.1990 4.5.1999 920/1996 34 261-294/2000 1017- 15.3.1990 4.5.1999 1050/1996
7 295-301/2000 7-13/1997 20.9.1990 4.5.1999 2 302-303/2000 2358- 15.3.1990
4.5.1999 2359/1997 15 304-318/2000 1880- 10.12.1992 4.5.1999 1894/1997 6
319-324/2000 2061- 10.12.1992 4.5.1999 2066/1997 4 1 4090/2000 2546/1997
15.3.1990 4.5.1999 5 1 4091/2000 1166/1997 8.8.1990 4.5.1999 We may, at the
outset, also notice that the Reference Court and High Court refused to take
into consideration a large number of deeds of sale (Exh. 86 to 100) produced by
the State inter alia relying on or on the basis of the decision of this Court
in P. Ram Reddy and Ors. v. Land Acquisition Officer, Hyderabad Urban
Development Authority, Hyderabad and Ors 6 (1995) 2 SCC 305, the same were not
admissible in evidence. As for the purpose of proving the same, neither the
vendor nor the vendee in respect of the said deeds of sale had been examined.
An application for adduction of additional evidence filed before us has been
Shelati, learned Senior Counsel appearing on behalf of the State would submit:
Reference Court and the High Court committed a serious error in not exhibiting
true copies of the Sale Deed (Exhs. 86 to 100) in view of the decision of this
Court in P. Ram Reddy and Ors. v. Land Acquisition Officer, Hyderabad Urban
Development Authority, Hyderabad and Ors. (1995) 2 SCC 305 having been overruled
in Land Acquisition Officer and Mandal Revenue Officer v. V.V. Narasaiah
[(2001) 3 SCC 530] and Cement Corporation of India v. Purya & ors. [(2004)
8 SCC 270]. Cement Corporation has also been followed by this Court in
Ranvirsingh v. Union of India (2005) 12 SCC 59.
Reference Court and the High Court awarded a grossly high value towards
compensation of the acquired lands by misapplying the principle of valuation
and adopting a wrong method of valuation and thus, committed a manifest error.
While making the award, the Reference Court as also the High Court failed to
take into consideration the fact that the lands of village Baxipur being
situated on western bank of river Thebi far from village Amreli as also the
fact that geographic condition of the eastern bank of river Thebi is absolutely
different vis-`-vis the lands situated on the western bank.
the lands situated on the eastern bank are mostly converted into
non-agricultural lands; the lands situated on the western bank of river Thebi
are only agricultural lands and in that view of the matter it is impermissible
in law to compare the lands situated on the western bank of the river with
those on the eastern bank particularly when even no residential premises have
been constructed thereon. The lands situated on the western bank of the river
Thebi having not been converted into non-agriculture land and there being
hardly any scope for any development and furthermore in view of the purpose for
which acquisition has been made, namely, submergence of the land under water,
the Reference Court as also the High Court must be held to have committed a
serious error in comparing the lands with agricultural lands situated on the
western bank with 8 the non-agricultural lands situated on the eastern bank of
the river Thebi.
Land Acquisition Officer having considered the comparable sales of agricultural
lands both on the western bank and eastern bank as also sale of
non-agricultural lands and having awarded compensation at the rate of Rs.350/-
per Are for Jirayat and Rs.500/- per Are for irrigated lands and, thus, having
considered all relevant factors, the same should not have been interfered with
by the Reference Court as well as by the High Court.
being no reliable evidence of comparable instances or to show the actual yield
from the land and, thus, the land holders having not been able to discharge the
burden of proof, the amount of compensation awarded by the Land Acquisition
Officer should be held to have been fair and adequate in view of the decisions
of this Court in Special Land Acquisition Officer vs. Sidappa Tumari [1995
Supp. (2) SC 168 (Para 22).
Reference Court and consequently the High Court without any material on record
awarded compensation at the rate of 9 Rs.75/- per square meter in respect of
agricultural lands which admittedly are situated in an undeveloped area and,
thus, committed a serious error of law.
Reference Court ought not to have disregarded the distance between the
"Amreli - Chittal Road" and the village in question which is 1.5
kilometers to 2 kilometers and, thus, committed a serious error in relying upon
the sale instances being Exhs.35 to 40 which were in respect of the lands
adjacent to "Amreli - Chittal Road" for the purpose of holding that
the amount of compensation awarded by the Land Acquisition Officer was
Ignoring the distance of 1.5 to 2 kilometers (holding it to be of not much
consequence by the High Court) for the purpose of ascertaining the true market
value of the land situated in an undeveloped area was wholly erroneous
particularly in view of the fact that the witnesses examined on behalf of the
respondents categorically stated that there was no likelihood that the said
area would be developed in future.
The High Court furthermore should not have failed to take into consideration
the evidence of Jerambhai Devsinhbhai (Exh. 12) who had categorically admitted
that except Oil Mills there was no other industry in village Amreli and there
was neither any State High Way passing through the said village nor there was
any railway connection. Even witness Bhagvandas had admitted that between the
dam and Pratappura area there were no residential houses. Similarly witness
Bharatbhai K.Mehta had admitted that he had purchased the land for his own
purpose, namely professional and residential purpose.
Reference Court as also the High Court should not have relied upon the
valuation report proved by Bhikhabhai Rami who in no uncertain terms had
admitted that he had not seen any document in respect of surrounding lands and
furthermore had not taken into consideration the deeds of sale mentioned in the
award and moreover there was neither any road facility available nor any
residential house could be traced out and there was no possibility of any
industrial development also on the western side of the river.
The Reference Court as also the High Court committed a serious error insofar as
they failed to take into consideration that the land owners failed to discharge
their burden to show that the land in question had any potentiality of
Bhatt learned Senior Counsel appearing on behalf of the respondents, on the
other hand, would submit:
upon perusal of the award made by the Land Acquisition Officer itself it would
be evident that the entire area is a developed one and the land owners were
progressive farmers, no infirmity can be said to have been committed in
comparing non-agricultural lands with agricultural lands particularly when in
respect of the lands situated in one area he had granted compensation at the
rate of Rs.50/- per square meter, there was absolutely no reason as to why the
award at the rate of Rs.3.50 per square meter for non-irrigated lands and
Rs.5/- per square meter for the irrigated lands should be awarded.
determining a just and fair amount of compensation, no sole decisive factor
existed and each case was required to be considered on its own merit. However,
12 when such determination can be made upon applying more than one factor, the
appellate court should not have interfered therewith even if another view was
Location of a land although material keeping in view the fact that for all
intent and purpose all the three villages are part of one town, only because a
part of the acquired land is situated at a distance of 1.5 to 2 kilometers, the
sale instances in respect of developed area can be applied subject of course to
such deduction as is applicable in respect thereof.
for acquisition of different parcels of land were issued on diverse dates.
the purpose of acquisition was construction of a dam over river Thebi. The
lands acquired are situated in three villages. Nature of lands acquired was
both agricultural and non-agricultural. Some are situated in the urban area
which were well developed and some were not completely developed and mainly
lands at Baxipur which are non-agricultural lands and situate on the Western
bank of river Thebi, indisputably were agricultural lands. The purpose for
their acquisition was that the said lands would be submerged in water.
also not in dispute that various parts of the village Giriya and Amreli are
within the municipal limits while only a portion of the lands situate in
village Baxipur is within the municipal limit.
parties hereto in support of their respective cases relied upon a large number
of documents including deeds of sale. A large number of witnesses including
some experts were examined in the matters.
noticed hereinbefore the reasonings of the Land Acquisition Collector; the
Reference Judge as also the High Court for arriving at their respective
learned Reference Judge, however, rejected the deeds of sale produced by the
acquiring authority inter alia on the premise that to prove the same neither,
vendor or the vendee thereof had been examined. For the said purpose, it relied
upon a decision of this Court in P. Ram Reddi v.
Acquisition Officer, (Supra). The said decision of this Court, however, has
since been reversed inter alia by a Three Judge Bench of this Court in Land
Acquisition Officer & Mandal Revenue Officer v. V.
[ (2001) 3 SCC 530 ]. Later, a Constitution Bench of this Court 14 in Cement
Corporation of India Ltd. etc. etc. v. Purya and others etc. etc., [ (2004) 8
SCC 270 ], while interpreting Section 51-A of the Act opined that the said
provision seeks to make an exception in regard to proving of sale deeds stating
:- "25. Section 51-A of the Land Acquisition Act seeks to make an
exception to the aforementioned rule.
the acquisition proceedings, sale deeds are required to be brought on record
for the purpose of determining market value payable to the owner of the land
when it is sought to be acquired.
Although by reason of the aforementioned provision the parties are free to
produce original documents and prove the same in accordance with the terms of
the rules of evidence as envisaged under the Indian Evidence Act, the LA Act
provides for an alternative thereto by inserting the said provision in terms
whereof the certified copies which are otherwise secondary evidence may be
brought on record evidencing a transaction. Such transactions in terms of the
aforementioned provision may be accepted in evidence.
of evidence is not a term of art. It has an etymological meaning. It envisages
exercise of judicial mind to the materials on record.
of evidence by a court would be dependent upon the facts of the case and other
relevant factors. A piece of evidence in a given situation may be accepted by a
court of law but in another it may not be.
Section 51-A of the LA Act may be read literally and having regard to the
ordinary meaning which can be attributed to the term "acceptance of
evidence" relating to transaction evidenced by a sale deed, its
admissibility in evidence would be beyond any question. We are not oblivious of
the fact that only by bringing a documentary evidence in the record it is not
automatically brought on the record. For bringing documentary evidence on the
record, the same must not only be admissible but the contents thereof must be
proved in accordance with law. But when the statute enables a court to accept a
sale deed on the records 15 evidencing a transaction, nothing further is
required to be done. The admissibility of a certified copy of sale deed by
itself could not be held to be inadmissible as thereby a secondary evidence has
been brought on record without proving the absence of primary evidence. Even
the vendor or vendee thereof is not required to examine themselves for proving
the contents thereof. This, however, would not mean that the contents of the
transaction as evidenced by the registered sale deed would automatically be
accepted. The legislature advisedly has used the word "may". A
discretion, therefore, has been conferred upon a court to be exercised
judicially i.e. upon taking into consideration the relevant factors.
Ranvir Singh and another v. Union of India, [ (2005) 12 SCC 59 ].
of the aforementioned Constitution Bench decision we allowed an application
filed by the appellant for placing additional documents on record by our order
dated 23.10.2008. We, therefore, are required to take into consideration the
said transactions as well.
question which arises for our consideration is what principles should be
applied for determining the market value of the land. It is now a well settled
principle of law that the determination of the market value of the land
acquired, indisputably would depend upon a large number of factors, nature and
quality of the lands is one of them. The norms which are required to be applied
for determination of the market value of the agricultural land and homestead
land may be different. In given cases 16 location of land and in particular,
closeness thereof from any road or high- way would play an important role for
determination of the market value wherefor belting system may in appropriate
cases have to be resorted to.
position of the land, particularly in rainy season, existence of any building
etc. also plays an important role. A host of other factors including
development in and around the acquired land and/or the potentiality of the
development will have a bearing on determination of the value of the land.
of the market value of the land may also depend upon the facts and
circumstances of each case, amongst them, however, would be the price of land,
amount of consideration mentioned in a deed of sale executed in respect of
similarly situated land near about the date of issuance of Notification under
Section 4(1) of the Act ; in the absence of any such exemplars the market value
can be determined on yield basis or in case of an orchard on the basis of
number of fruit bearing trees. It is also well settled that for price
determination purposes, the courts would be well advised to consider the
positive and negative factors, as has been laid down by this Court in Viluben
Jhalejar Contractor vs. State of Gujarat [(2005) 4 SCC 789], namely :- 17
Positive factors Negative factors (i) Smallness of size (i) Largeness of area
(ii) proximity to a road (ii) situation in the interior at a distance from the
road (iii) frontage on a road (iii) narrow strip of land with very small
frontage compared to depth (iv) Nearness to developed area (iv) lower level
requiring the depressed portion to be filled up (v) regular shape (v)
Remoteness from developed locality (vi) Level vis-`-vis land under (vi) Some
special disadvantageous acquisition factors which would deter a purchaser (vii)
Special value for an owner of an adjoining property to whom it may have some
very special advantage.
Reference Judge as also the High Court had proceeded to determine the market
value inter alia relying upon or on the basis of some deeds of sale ; valuation
report; the circular letter issued by the Collector in regard to premium
payable on conversion of land etc.
Reference Court and the High Court while ignoring the deeds of sale whereupon
reliance was placed by the State, for the reasons stated hereinbefore,
principally relied upon a few deeds of sale. We shall take notice of some of
them, namely, Exhibits 35, 36, 37, 38, 39 and 40.
also be beneficial to consider some of the documents upon which the State
relied upon, they are Exhibits 86, 90 , 91 and 96.
advanced on behalf of the State in respect of the deeds of sale whereupon the
claimants relied are as under.
Exhibit 35 pertain to a non agricultural resident plot ;
thereon is only upto plinth level ; it is situated in a municipal area ; it a
very small plot and that is why it was not comparable.
Exhibit 36 and 37 pertain to a non agricultural residential plots of land. They
are situated by the side of the highway and in the municipal area.
Exhibit 38 relates to a non agricultural residential plot, comes under earthen
dams area. It is outside the municipal area.
Exhibits 39 and 40 relate to non-agricultural residential plots of land. They
touch Amreli-Chittal-Rajkot Highway and are in municipal area.
Bharatbhai, PW-7, purchaser of the land under Exhibit 40, stated that the
purchase of the plot by him was for a special purpose, namely - i.e. for
professional and residential purposes.
Acquisition Officer in his Award noticed the position and place of the land
sought to be acquired in the following words:- "Details of land to be
of survey number 1007 to 1046 as shown at Sr. No.1 to 28 of the statement of
award are cultivable land situated on west of Thebi river far away from Amreli,
near the limits of Baxipur.
land as shown in statement Jirayat dry and Jirayat irrigated, which is black
and fertile giving 2 crops on monsoon and winter.
proposed to be acquired is of old and new sharat. Amreli town is the head
quarter of Amreli District, is a railway station, S.T. Buses are ravaging
throughout the year. The population of Amreli is near about 1,10,000 which
consist mainly of Patel, Bania, Brahmins, Weavers etc who are progressive
farmers. There are industries of oil mills, land weaving etc."
said Award, summary of sales of agricultural lands was prepared, which read:-
20 "Summary of considerable sales of agricultural lands Sales of western
bank Sale of eastern bank Survey Acres Date of Price of Survey Acres Date of
Price of No. sale 1 are No. Sale 1 are 991 3.08 21/5/85 785-25 37/37/2 6.20
6/6/85 307-69 1063 2.38 13/12/85 381-00 29 0.24 23/7/87 1041-66 949 2.28
15/4/87 426.00 33/AB 1.11 2/3/89 3882.35 1063 1.13 3/2/89 754-71 33/AB 1.10
3/3/89 3880.00 Looking to these sales of agricultural lands Rs.350/- for
Jirayat and Rs.5000/- for irrigated lands for 1 Are are seems to be reasonable
for the lands of Western bank of river Thebi. Looking of these sales and the
rise in price of land Rs.2000/- and Rs.3000/- for lands for 1 Are are seems to
be reasonable but the geographical condition of eastern bank is quite different
as most of the land are converted into non- agricultural lands and is either
populated or nearly populated area, is situated on Amreli, Chittal State
highway. Looking to all these factors it is not possible to compare the land of
western bank with land of eastern bank. No lands are converted into
non-agriculture and then is no habitation in the western bank of river Thebi.
Whilst there are many non-agriculture land and habitation increases day by day.
More over many lands of eastern bank are converted into non-agriculture, which
were proposed to be acquired. Hence it seems necessary to discuss about sales
of non-agricultural plotting too as the land of eastern bank are situated on
Amreli, Chittal, Rajkot Highway and nearer to these and a statement of sales of
non-agricultural lands has been taken from the Kasba Talati Amreli which is
appending as statement number K-2 Discussions of these sales are narrated here
attention was further drawn to the fact that admittedly there was no
development on the western side of the river. Our attention has further been
drawn to the evidence of PW-1, Jerambhai, who is one of the claimants. He
admitted that in the village form, which he had produced, it has not been shown
that two crops are grown and that he did not maintain any account or balance
sheet of the receipt of the crop grown. He furthermore accepted that there was
no railway connecting the village with any big city. It was also admitted that
not any State highway passes through Amreli and except oil mills, there were no
claimants examined one of the experts, namely Bhikhubhai as PW-9, who admitted
that he had examined deeds of sale pertaining to residential land only and not
pertaining to agricultural lands. He furthermore admitted that the Land
Acquisition Officer had taken into consideration figures of five years' sale
transactions in his Award. In his deposition he stated:- "(4) I know that
Amreli is backward for Industrial purpose and as per my say Industrial
Development has been started. It is true that on the western side of river
nothing is there. Moreover for the purpose of going towards west side, no road
facility is available. As per my say acquired land is residential purpose land.
I have enquired from the town planning office. It is true that 22 in this area
no residential houses traced out.
year 1972, in Amereli town planning has been endorsed and this fact I know very
well. The facts stated in column no.9 in Exh. 78, which is mentioned
considering sale transaction."
of the State one Ramniklal was examined as DW-1. He was a Deputy Executive
Engineer (Thebi Irrigation). He has not only deposed that the acquired land is
situated outside the Amreli Municipality but according to him they are situated
at a distance of about 1 = km. - 2 km.
Amreli-Chittal road. Whereas the residential area, according to him, was on the
eastern side, on the western side of the river Tebi there was no residence. He
further stated that no State highway is passing through Amreli and also that
railway is not connected with big city.
Kaushik who was examined on behalf of the State as DW-2 and had been serving
the State as a Deputy District Development Officer, in his deposition
admitted:- "I have awarded compensation at the rate of Rs.150/- per sq.
mt. for Agriculture land and which is likely to be developed. The compensation
awarded at the rate of Rs.50/- per sq. mt. has been awarded fully and
compensation at the rate of Rs.150/- per sq. mt. has been calculated after
deducting price of road (way) in the case of not taking possession road, then
in such cases, I have awarded compensation at the rate of Rs.1/- which 23 is
token and deduction of road was being deducted in such case where possession of
road has been handed over. Generally for the purpose of converting land into
not-agriculture purpose, the claimant has to left (sic for leave) 40 to 43%
appears that the High Court had mixed up the Awards made in respect of the
lands situated on the Eastern side of the River with that of the Western Side.
now notice the deeds of sale whereupon the State had relied upon.
is in respect of a deed of sale relating to Survey No.991which is adjacent to
Survey No.103-A in terms whereof only 0.77 per sq. meter of land was determined
as the market value. It was also placed on record that the vendor Lalubhai
Keshavbhai is one of the claimants before us.
it appears from Ext. 90 which is a deed of sale dated 7 th January, 1987 relate
to the land which is adjacent to Survey No.999 K from a perusal whereof it
appears that the market value was Rs.1.85 per sq. mt. The subject matter of the
said deed of sale is the land situated near nana Ankadira village road near to
the acquired land at the western side of the river.
is the deed of sale dated 22nd June, 1989, appertaining to Survey No. 1043 P;
from a perusal whereof it would appear that the market 24 value of the land was
Rs. 2.08 per sq. meter. Ext. 98 is the deed of sale dated 21st April, 1990
which is in respect of Jiyarat land situated on the eastern side of the river
adjoining Amreli municipal area. The market value of the same comes to Rs.8.41
per sq. met. Ext. 99 is a deed of sale dated 27 th September, 1990 appertaining
to Survey No.1047/1 and adjacent to Survey No.1031 & 1046 is Bagayat land,
which is stated to be situated near the acquired land on the western side of
the river and downstream of earthen dam, the market value of which was Rs.2.50
per sq. met. .
Court, however, proceeded on the basis that although the acquired lands were
situated on one side of the river, in view of the fact that entire acquired
land was to be submerged, no justification can be made in regard to the nature
of the land. The High Court held (in our opinion wrongly) that distance of a
few kilo meters from the Amreli town would not matter.
Court furthermore opined that the lands in village Baxipur were also fertile
and thus no discrimination can be made. For the said purpose the High Court
relied upon the Awards made in the earlier case exhibited as Exhibits 68 and 73
in terms whereof compensation @ Rs.75/- per sq. meter was paid.
variation in the price of the land within a few years is a matter of great
significance. It is true that no single factor would be decisive for the
purpose of arriving at the market value of the land. But in a case of this nature
a holistic view is required to be taken. It is, in our opinion, wholly improper
to forget the distinction between the agricultural land and the non
agricultural land. Even in the same area, value of the agricultural land and
the non-agricultural land may be considerably different. For the said purpose,
existence of the road ; railway station ; airport; schools ; colleges ;
etc. play an important role. It is not a case where the developed area and the
undeveloped area or for that matter non agricultural and agricultural lands are
merely divided by a road. It is also not a case where the entire area is known
and treated to be one and the same, although a part of it may be governed by
the Panchyat and the other part comes within a municipal area. It stands
admitted that the acquired lands for all intent and purport is divided into two
parts. The eastern part and only a small part of the western side is within the
municipal area and the other, consisting of agricultural lands, is outside the
municipal area. It furthermore stands admitted that the town has developed only
on eastern side of the river and agricultural lands are situated on the western
side in which there is even no residential house.
26 In a
case of this nature, indisputably different criterion and norms are required to
be adopted for determination of the market value.
learned counsel for the parties have relied upon a large number of decisions.
We may notice some of them This Court in Union of India v. Pramod Gupta, [
(2005) 12 SCC 1 ], on the question of determination of market value opined :-
"24. While determining the amount of compensation payable in respect of
the lands acquired by the State, the market value therefor indisputably has to
be ascertained. There exist different modes therefor.
best method, as is well known, would be the amount which a willing purchaser
would pay to the owner of the land. In absence of any direct evidence, the
court, however, may take recourse to various other known methods. Evidences
admissible therefor inter alia would be judgments and awards passed in respect
of acquisitions of lands made in the same village and/or neighbouring villages.
Such a judgment and award, in the absence of any other evidence like the deed
of sale, report of the expert and other relevant evidence would have only
Therefore, the contention that as the Union of India was a party to the said
awards would not by itself be a ground to invoke the principles of res judicata
and/or estoppel. Despite such awards it may be open to the Union of India to
question the entitlement of the respondent claimants to the amount of
compensation and/or the statutory limitations in respect thereof. It would also
be open to it to raise other contentions relying on or on the basis of other
materials brought on record. It was also open to the appellant to contend that
the 27 lands under acquisition are not similar to the lands in respect whereof
judgments have been delivered.
of the land, the nature thereof, advantages and disadvantages occurring therein
amongst others would be relevant factors for determining the actual market
value of the property although such judgments/awards, if duly brought on
record, as stated hereinbefore, would be admissible in evidence."
further opined :- "36. Yet again in Ras Behari Mandal v. Raja Jagadish
Chandra Deo Dhaubal Deb the Patna High Court reiterated the presumption that
the lessor retains all the rights in mines and quarries. It also noticed the
decision of the House of Lords in Great Western Rly. Co. v. Carpalla United
China Clay Co. Ltd.wherein a grant reserving minerals was held to exclude a
deposit of china clay despite the fact that the same was found near the
also held that:- "8. In V. Hanumantha Reddy v. Land Acquisition Officer
& Mandal R. Officer the law is stated in the following terms: (SCC p. 645,
para 5) "It is now a well-established principle of law that the land
abutting the national highway will fetch far more higher price than the land
Court further opined :- "84. It is also trite to state that the market
value of agricultural land is lower than that of the land suitable for
commercial purposes. (See Om Prakash v. Union of India.) It was further opined :-
28 "87. The courts will also have to take into consideration the enormity
of the financial implication of enhancement in view of the size of the land
acquired for a particular project.".
Singh v. Union of India, [(2005) 12 SCC 59], this Court opined as under :-
"22. Concededly, the High Court in its impugned judgment did not place any
reliance whatsoever upon the sale instances whereupon strong reliance has been
placed by the parties solely on the ground that neither the vendors nor the
vendees thereof had been examined as witnesses. It has also not placed any
reliance upon any other judgment or award filed by the parties. The High Court
while arriving at the said finding evidently took into consideration the law as
it then stood. The correctness of the decisions wherein the aforementioned view
had been taken was doubted and the matter was referred to a larger Bench."
to Cement Corporation (supra), it was opined that the High Court was required
to consider the deeds of sale in their proper perspective for determining the
market value of the acquired land."
Karimbanakkal Sulaiman (Dead) by L.Rs. v. Special Tahsildar for K.A.K.P.I.P.,
[(2004) 13 SCC 643], this Court held:
factors have been taken into consideration by the High Court in fixing the land
the land acquired was agricultural land and it was acquired for the purpose of
an irrigation project. There is nothing on record to show that the land had any
commercial value or future potentialities. We do not think that the land value
29 fixed is too low to be interfered with by this Court."
Viluben Jhalejar Contractor v. State of Gujarat, [(2005) 4 SCC 789], this Court
opined that :- "24. The purpose for which acquisition is made is also a
relevant factor for determining the market value. In Basavva v. Spl. Land
Acquisition Officer deduction to the extent of 65% was made towards development
Kumar v. Union of India, [ (1996) 11 SCC 542 ], this Court has opined that even
if the entire land is of one village all the persons cannot be given same
compensation, stating:- "....It has been firmly settled law by beadroll of
decisions of this Court that the Judge determining the compensation under
Section 23(1) should sit in the armchair of a willing prudent purchaser in an
open market and see whether he would offer the same amount proposed to be fixed
as market value as a willing and prudent buyer for the same or similar land,
i.e., land possessing all the advantageous features and to the same extent.
This test should always be kept in view and answered affirmatively, taking into
consideration all relevant facts and circumstances. If feats of imagination are
allowed to sway, he outsteps his domain of judicial decision and lands in
misconduct amenable to disciplinary law..."
categorically been held that ordinarily the entire village should not be
treated as one unit as `even in the same village, no two lands command the same
market value' as potentially, the fact that land abutting a 30 National Highway
or road would command a higher market value vis-`-vis the land situated at a
location which is not so situated.
development and/or likelihood of development are also the factors which have
been considered to be relevant by this Court in Kanwar Singh v. Union of India,
[(1998) 8 SCC 136 ] observing:- "8. So far as the first argument that the
appellants ought to have been given the same rate of compensation which was
given to the claimants of the adjoining village is concerned, the amount of
compensation for the land acquired depends on the market value of land on the
date immediately before the notification under Section 4 of the Act or when
same land is acquired and offer of compensation is made through an award.
Whether such an offer of compensation represents the market value of the land
on the date of notification under Section 4 of the Act, has to be determined on
the basis of evidence produced before the Court. The claimants have to prove
and demonstrate that the compensation offered by the Collector is not adequate
and the same does not reflect the true market value of the land on the date of
notification under Section 4 of the Act. This could only be done by the
claimants by adducing evidence to the effect that on the relevant date, the
market value of the land in question was such at which the vendor and the
vendee (buyer and seller) were willing to sell or purchase the land. The
consideration in terms of price received for land under bona fide transactions
on the date or preceding the date of notification issued under Section 4 of the
Act generally shows the market value of the acquired land and the market value
of the acquired land to be assessed in terms of those transactions. Sale
instances showing the price fetched for similar land with similar advantages
under bona fide transaction of sale at or near about the issue of notification
under Section 4 of the Act is well recognized to be the appropriate evidence
for determining the market value of the acquired land."
31 It was
opined that the amount of compensation should not be awarded based on the
market value of the land determined for a neighbouring village.
of Maharashtra v. Basantibai Mohanlal Khetan, [(1986) 2 SCC 516] referring to
capitalization method for determining the value of the land, it was opined:
order to appreciate this ground of objection, it is necessary to examine
whether the classification of the land under the Act into the land in municipal
area and the land in rural area for purposes of determining the amount payable
on acquisition is bad. It is not denied that the land in municipal area
commands various advantages which are not available in the case of land in
of the land and particularly the area in which it is situated is indisputably a
relevant factor. We, however, do not mean to suggest that only because the land
is situated within the jurisdiction of a Gram Panchayat by itself would go to
show that the value of the lands sought to be acquired cannot under any circumstance
be compared with the land situate within the jurisdiction of municipality.
There may be a case where the lands situated on one side of the road was within
the Gaon Sabha and the other side within the municipality. It is also not a
case where the area is known as one and the same area although divided by a
road and are under different jurisdictions.
also Satish & Ors. vs. State of U.P. & Ors. [(2009) 9 SCALE 632] and
National Thermal Power Corporation Ltd. vs. Mahesh Dutta & Ors. [(2009) 9
SCALE 591]} It is furthermore beyond any doubt or dispute that building
potentiality of the land acquired would also be a relevant consideration.
the purpose for which the land is sought to be acquired would also assume some
It is on
the aforementioned factual backdrop and legal principles governing grant of
compensation, the market value of the lands situate within Group-1 is required
to be determined.
are purely agricultural lands. There were no buildings;
no residential use; there was no factory. No development had taken place nor
was any development expected in immediate future. The lands were acquired only
for the purpose of submergence. It had thus even no building potentiality.
therefore, are of the opinion that in view of the materials brought on record,
the valuation of the land should be determined at Rs.50/- (Rupees Fifty only)
per square meter.
This batch of appeals (7 in all) relate to the claimants' lands adjoining
villages Giriya, Baxipura and limits of Amreli town and the same are directed
against the common judgment and order dt. 4.5.1999 passed in First Appeal Nos.
989/98 to 995/98 arises out main Land Reference Case No. 1/96 with consolidated
Land Reference Cases Nos. 1/96 and 82/95 to 87/95 (7 in all) main Land
Reference Case being No. 1/96. In these cases, the Notification under Section 4
was published in the daily news paper on 29.11.92 and 30.11.92, the same was
notified in the Gazette on 10.12.92 and was affixed at the concerned places on
14.12.92 followed by Notification under S. 6 published on 18.2.93 in the
Gazette and in the news paper on 20.2.93 and the same was affixed at the
concerned places on 24.2.93.
No. 89 of Village Giriya, lands of 153 land holders were acquired. The Special
Land Acquisition Officer published the Award on 23.2.95 awarding compensation
at the rate of Rs. 12/- per sq. mtr. (Rs.
per Are) for Bagayat land and Rs. 8/- per sq. mtr. (Rs. 800/- per Are) 34 for
Jirayat land and Rs.50/- per sq. mtr. for non-agricultural land. Out of that
153 claimants, 132 claimants have not filed any reference under Section 18 of
the Act and accepted the award of Rs.50/- per sq. mtr. awarded by the Land
Acquisition Officer. Being aggrieved by and dissatisfied with the said Award,
some of the claimants applied for reference of their cases in terms of Section
18 of the Act stating that they are entitled to compensation at the rate of Rs.
1000/per sq. mtr. References thereinto were made by the District Collector.
Reference Court decided all these references by its common order dt. 9.1.98
awarding compensation at the rate of Rs. 400/- per sq.mt. with other benefits.
The amount of compensation in respect of agricultural lands was reduced to
Rs.300/- per square meter by the High Court while making a distinction between
the agricultural lands and non-agricultural lands.
there are 18 cases pending before the Reference Court.
of neghbouring non-agriculture Survey No. 82 of village Giriya there were 23
claimants, 5 of them had not prayed for reference under Section 18 of the Act.
Reference Court awarded Rs.75/- per sq. mtr. to 18 claimants and they accepted
these cases the lands of the claimants are situated adjoining the villages
Giriya, Baxipura and limits of Amreli town. Their lands have also been acquired
for the 'THEBI IRRIGATION PROJECT'. On behalf of the claimants 7 witnesses were
examined and the Department had examined 3 witnesses. The claimants' witness
No. 1 Gunvantbhai Vallabhbhai has stated that the land bearing S. No. 90/1 is
situated on the eastern side of Amreli Rajkot road and land S. No. 89 is also
on the same direction touching the land of S. No. 90/1. According to this
witness, land bearing S. No. 91 is situated on the western side of the road
touching the road side. The lands of S. No. 90/1 and 91 are situated on the
east and west side of the said Amreli- Rajkot Highway respectively and land S.
No. 89 is also on the eastern side touching the land of S.No. 91. The Reference
Court referred to the Map (Exh. 39) and noted that the land bearing S. No. 44
touches on its southern side the land bearing S. No. 91 which is on the western
side of the road and land bearing S. No. 39 touches S. No. 43 being on the same
direction. The land of S. No. 39 pertains to 'Surya Garden' Hotel and for which
the District Collector has ordered to pay premium @ Rs. 300/- per square meter
for conversion thereof for use as non-agricultural purposes from agricultural purposes.
All these three Survey Numbers are in the one line and on the western side of
the Highway. According to the Geographical situation, on the other side of the
road i.e. to say the eastern side of the road, the land 36 bearing S. No. 51 is
just opposite the land of S. No. 39 and on the eastern side the land earmarked
for building an Aerodrome being S. No. 51; while S. No. 44 touches the border
of the Aerodrome land S. No. 51 going towards northern side of S. No. 44. The
land of S. No. 91 is adjacent to it and at the same time on the western side of
S. No. 44 is S. No. 50 and S. No. 49 and the border of land of S. No. 50
touches the land of S. No. 89 to some extent.
lands bearing S. No. 39 and 51 ('Surya Garden" Hotel) and lands of
Aerodrome are situated respectively on the opposite side of the Road. S. No. 43
touches the border of the acquired land of S. No. 91. On the western side of S.
No. 43, there are lands of S. Nos. 41 and 42 and the land of S. No. 38 touches
the southern side of S. No. 41. Thus the Geographical situation of all these
Survey Numbers show that these lands are around the acquired land.
1 Gunvantbhai Vallabhbhai deposed in regard to the particulars of the same
Survey Numbers around the acquired land. He has stated that the award for the
land bearing S. No. 43 is at the rate of Rs. 275/- per sq.mt.. S. No. 43
touches the border of the said Amreli-Rajkot road, which is also clear from the
Map Exh. 39. The land bearing S. No. 40 is, however, on the interior side of
the road for which the amount of compensation awarded is at the rate of Rs.
70/- per sq.mt. According to this 37 witness, some other lands bearing S. Nos.
41, 43/5, 40/4, 43/2 and 43/4 were also acquired and for these lands the Land
Acquisition officer had awarded compensation at the rate of Rs. 150/- per sq.
mt. This witness furthermore stated that the land of S. No. 39 touches the road
and just opposite to the land of the Aerodrome, where the "Surya
Garden" Hotel is situated and for this land the Town Planning Department
had also assessed the value at the rate of Rs. 217/- vide letter dt. 16.10.92.
He also stated that the land of S. No. 39 is a new tenure land and to convert
this land for Non Agriculture purposes the Collector, Amreli fixed the premium of
Rs. 300/- per sq. mtr. by a Circular letter dated 27.11.1992, marked as Exh.
46. According to him, even in cases of some other S. No. viz. S. No. 56, which
is only 300 mts. away from the acquired land by a Registered Sale Deed No. 900
dt. 11.5.92, land was sold out at the rate of Rs. 690/- per sq. mtr. and that
lands being S. Nos. 34 and 40/9, which are about 200 meters from the land in
question i.e. plot Nos. 10, 17, 18, 60 and 6 were also sold out at a high
of the Reference Court was challenged by the appellants before the High Court
mainly on the following grounds:- "(a) The Reference Court ought to have
believed the deposition of D.W. No. 1 examined at Exh. 69, who had passed the
award Exh. 38 because he had taken into consideration sale instances for 5
years and because he had passed the Award Exh. 38 38 looking to the market
value as per the sale instances of village Giriya in the list of the 5 years
sale instances at Exh. 35;
the Reference Court had erred in holding that S. Nos. 90/1 and 91 are likely to
be converted into non agricultural lands;
was argued with reference to the deposition of D.W. No. 2 at Exh. 71 that as
per the copy of the sale deed Exh. 72 the said land admeasuring 1000 sq.mts.
was sold for Rs. 18500/- on 2.11.88, that means at the rate of Rs. 18.5 per sq.
mt. and this price at which the land was purchased by the claimants should be
considered to be the best evidence and that this should form the acid test for
the purpose of determining the rate at which the compensation should be
to geographical situation of the lands and whether the lands are in developed
area or in the vicinity of the developed area, the High Court opined:-
"13.15 We have considered the entire evidence in this case in its entirety
and have also gone through the analysis of the evidence, as has been made by
the Reference Court. It is clearly borne out that the lands acquired in these
cases are of S. No. 91 (in Land Reference Case Nos. 82/95, 83/95 and 84/95), S.
No. 89 (in Land Reference Cases Nos. 85/95, 86/95 and 87/95) and S. No. 90/1
(in Land Reference Case No. 1/96). So far as the geographical situation of
these lands and as to whether these lands are in developed area or in the
vicinity of the developed area is concerned, we find that the evidence, which
has come from both the sides, is not at much variance inasmuch as the 39 lands
are on the eastern or western side of the Amreli-Rajkot Highway and also as per
the Map Exh. 39. The lands of various S. Nos. , to which the reference has been
made herein-above, are all situated in a developed area and the same are around
the acquired land. If the lands of various S. Nos. around the acquired land are
developed, there is no reason to say that the acquired lands are not comparable
with the lands of various S. Nos. such as S. Nos. 38, 39, 40, 41, 42, 43, 44,
49, 50, 51 and 56. The situation of 'Surya Garden Hotel' in S. No. 39 and the
existence of godowns for Scoters and residential premises between the acquired
lands of the claimants and the 'Surya Garden Hotel' is also established.
Similarly the situation of the Cement Factory between the lands of S. Nos. 39
and 91 is also made out. The deposition with regard to the municipality
pavilion, land of Aerodrome, houses etc. on the eastern side of the road alongwith
residential houses also cannot be disbelieved. Thus in absence of any effective
and specific cross- examination with regard to the development of the area in
question, it cannot be disbelieved that the lands around the acquired lands are
developed area. In the judgment itself at page 20 the Reference Court has
recorded as under:- "There is no cross-examination with respect to the
development of area and therefore there is nothing to disbelieve the say of the
witness that the area nearby acquired lands are not developed."
appears that the word "not" before the word 'developed" is a
mistake typographical or otherwise and on that basis no argument could be built
up to say that the lands nearby the acquired lands are not developed.
depositions with regard to the acquired lands that it has wells, pacca houses
and the trees, the details of which have been mentioned 40 hereinabove, has
remained untrammeled in the cross-examination of P.W.No. 1. All these details
do add to the quality of the acquired land for the purpose of fixing the rate
at which the compensation is to be given. The case that lands of S. No. 89,
which have been acquired, are non agricultural lands and the acquired lands of
S. Nos. 90/1 and 91 are likely to be converted as non agricultural land has
also remained intact. Even D.W. No. 1, who has been claimed as a star witness
on behalf of the Department by the appellants, has admitted that lands of S.
Nos. 90/1 and 91 are likely to be converted into non agricultural lands. The lands
of both these S. Nos. 90 and 90/1 are also surrounded by non agricultural lands
and are in posh locality near Amreli township. Even if a land is not a non
agricultural land, if the same is surrounded by non agricultural lands and the
same is likely to be converted into non agricultural land as per the say of the
Land Acquisition Officer himself, it is certainly an important and relevant
factor for the purpose of fixing the rate at which the compensation is to be
awarded at par or with close proximity with the rate in respect of non
agricultural land. D.W. No. 2, who was examined by the Department, has also
admitted that going further towards Amreli town, there are godowns, show room
of Bajaj Scooter, Jalaram Commercial Complex, Meghnath commercial Centre, and
Surya Garden Hotel etc. He has also admitted that area around this land are
most developed and posh area of Amreli City and further that the lands of S. Nos.
90 and 91 are situated near the above S. No. 43. D.W. No. 3, who was examined
at Exh. 73 by the Department, had sold out the land bearing S. No. 35 - a part
of Village Giriya on 2.10.90 to one Vithalbhai Bhanjibhai. This witness in the
cross- examination has admitted that lands of S. No. 89, 90 and 91 of the
claimants are situated near Amreli-Rajkot road and that it is surrounded by the
41 residential houses, godowns etc. This witness has also stated that it is
adjacent to posh area and this area is a developed one.
to the determination of the amount of compensation by the Reference Court, the
High Court inter alia opining that the rate at which the compensation was
granted by the Land Acquisition Officer i.e. at the rate of Rs. 12/- per sq.mt.
for Bagayat land Rs. 8/- per sq.mt. for Jarayat land Rs. 50/- per sq. mt. for
non agricultural land is wholly inadequate and upon discussing the materials
brought on record in respect of some of the acquired lands vis-`-vis the
locations of lands for which deeds of sale have been executed held as under:
the claimants shall be entitled to compensation to be paid at the rate of Rs.
400/- per sq.mt. as decided by the Reference Court in case of lands of S. No.
89 (in Land Reference Cases Nos. 85/95, 86/95 and 87/95) i.e. non agricultural
lands, the concerned claimants shall only be entitled to the compensation at
the rate of Rs. 300/- per sq.mt. instead of Rs. 400/- per sq.mt. as ordered by
the Reference Court with regard to the land of S. No. 90/1 (in Land Reference
Case No. 1/96) and that of S. No. 91 (in Land Reference Cases Nos. 82/95, 83/95
and 84/95), which are likely to be converted to non agricultural lands."
Shelati would submit:
the Reference Court as also the High Court committed a serious error insofar as
they failed to take 42 into consideration that the deeds of sale whereupon
reliance has been placed by the claimants although parts of Survey Nos. 34 and
40/9 being Plot Nos. 17 and 18 were sold at the rate of Rs. 129/- per square
meter by reason of a deed of sale dated 28.7.1988, were in respect of a
residential plot and a small piece of land, it being situated within Amreli
city and within the municipal limit; being situated in a highly developed area,
the same was not comparable with the lands in question, namely, Survey Nos. 89,
90/1 and 91 which are situated at a distance of 1.5 kilometers therefrom.
Although from index it would appear that by reason of a deed of sale dated
16.1.1991, One Navnitbhai Kakubhai Ganatra who was a claimant in C.A. No. 244/
2000 sold the land to one Shri Chunilal Ranchhodbhai Parmar in respect of part
of plot No. 17 appertaining Survey Nos. 34 and 40/9 involving 138 square meters
area of land for a sum of Rs.55,200/-, i.e., at the rate of Rs.400/- per square
meter, but the same could not have been relied upon on the self same grounds.
The deed of sale dated 43 16.1.1991 executed by Navnitbhai Kakubhai Ganatra
being one of the claimants being in C.A. No.244/2000 in favour of Shri
Ashokbhai Nathabhai Parmar in respect of only 143 square meters of land in Plot
No. 17 for a sum of Rs.57,200/- , i.e., at the rate of Rs.400/- per square
meter could not have been relied upon for the self same reasons.
reliance could have been placed on the deeds of sale dated 28.12.1992 and
11.5.1992 concerning Survey Nos.
40/9 being Plot No. 6 and Survey No. 56/57 comprising area of 328 square meter
and 59.42 square meter respectively which were sold for a sum of Rs.2,30,000/-,
i.e., at the rate of Rs.701.21 per square meter and Rs.40,000/-, i.e., at the
rate of Rs.673.17 per square meter respectively. No reliance could also have
been placed thereupon for the added reasons that the said deeds of sale were
executed subsequent to the date of notification.
44 iv. No
reliance could have also been placed on the deeds of sale dated 27.10.1988 and
18.1.1991 in respect of Survey No. 36/1 being Plot No. 8 and Survey No. 34 and
40/9 being Plot No. 10 comprising area of 592.5 sq. meter and 361 sq. meter
respectively which were sold for a sum of Rs 83, 500, i.e., at the rate of Rs
140.92 per sq meter and Rs 150000, i.e., at the rate of Rs 415. 51 per sq meter
reliance furthermore could have been placed on the deed of sale dated 27.2.1989
and 28.5.1990 in respect of Survey Nos. 89 being Plot No. 26 and 39 and Survey
No. 82 being Plot No. 12 comprising area of 240 sq meter and 484 sq meter
respectively which was sold for a sum of Rs 4400, that is, at the rate of
Rs18.33 per sq meter and Rs 12000 respectively, that is, at the rate of Rs.
28.4 per sq meter; the price variation being apparent on the face of the said
deeds of sale; the fair market value should have been determined on the basis
of the said deeds of sale dated 27.2.1989, 28.5.1990 and 23.10.1990 by adding
the market value at the rate of 5% per year 45 which should be a fair market
value. Market value of the agricultural lands by no standard could have been
compared with the market value of the non-agricultural lands.
Manish Singhvi, learned counsel appearing on behalf of the respondents, on the
other hand, urged:
lands in question being situated by the side of Amreli- Rajkot Highway which is
a developed area and being on the eastern side of river `Thebi', this Court may
not interfere with the impugned judgment.
concurrent findings of fact having been arrived at by the Reference Court as
also the High Court, the impugned judgment is unassailable particularly in view
of the fact that the deeds of sale in respect of the same area are available.
nature of the lands although were agriculture but they being situated within a
developed area and having great potentiality of being converted into a
non-agricultural land, the guiding principle for determining the market value
thereof, namely, that a willing purchaser would pay to a willing seller 46 for
a property having due regard to its existing condition, with all its existing
advantages, and its potential probability, should be and has rightly been
deeds of sale relied upon by the State being dated 2.11.1988, 27.2.1989,
4.4.1989 and 20.4.1989 could not have been relied upon inasmuch as admittedly
they were grossly undervalued and the Collector had issued notices upon them.
Collector himself having fixed the prices of the land at Rs.125/-/ per square
meter, the State should not be permitted to raise any contention contrary
thereto or inconsistent therewith.
deeds of sale, in any event, having been executed four years prior to issuance
of the Notification under Section 4(1) of the Land Acquisition Act should not
be relied upon.
findings of fact arrived at by the learned Reference court as also the High
court relying on or on the basis of Exhibits 30, 51 and 53 showing the value of
the land to be Rs.400/-, Rs.701/- and Rs.673 per square meter, no case has been
made out for interference with the impugned judgment.
the deed of sale dated 27.10.1988 (Exhibit 55) shows the value of the land as
Rs.140/- per square meter and the other 47 deeds of sale which were marked as
Exhibits 57, 58 and 60 having been executed on 18.1.1991, 11.10.1991 and
05.01.1991 i.e. being two years prior to the issuance of a notification and the
consideration thereof being calculated at the rate of Rs.415/, Rs.425/- and
Rs.292/- per square meter, the impugned judgment should not be interfered with.
D.W.3- Nandlal Trikamjibhai examined on behalf of the State in his deposition
having clearly stated that the lands which were the subject matter of Exhibit
74 were situated only four kilometers away from the acquired land of the
claimants and, thus, the amount of consideration should not be treated to be a
sale instance for the purpose of determining the value of the acquired land
being survey Nos. 89, 90/1 and 91, which were surrounded by residential houses,
godowns, etc. and also very near to the posh area of the town.
Collector himself having fixed the conversion rate from agricultural land to
non-agricultural land at Rs.300/- per square meter, it would wholly be incorrect
to contend that the same did not offer any indicia in regard to the value of
the land for the 48 enhancement of right in property from agricultural to non-
the agricultural lands adjoin Chittal Road whereas the non-agricultural lands
Reference Court while passing its award, inter alia, opined:
a days, nobody would allow to keep a wooden cabin in one square meter area in
one's land on rental basis for Rs.8/- to Rs.12/- per sq. mtr. while in these Land
Reference Cases, the Land Acquisition Officer has acquired whole lands
permanently from the land owners/claimants by paying compensation of Rs.8/- and
Rs.12/- per sq. mtr."
this period, one cup tea cost is minimum Rs.3/- and that too in the road side
opinion, the said observations were wholly irrelevant as it is now well settled
that the Reference Court should sit in the arm chair of a willing and prudent
purchaser and put a question to himself as to whether he would offer the same
price sought to be awarded for the said land. We may notice that a portion of
land bearing Survey No. 89 was converted into non- agricultural use and the
sale transaction of a portion thereof would show that 1000 sq. mtr. Of land
were purchased for Rs.18,000/- by a deed of sale 49 executed on 2.8.1988 in
terms whereof the value of the land came to Rs.18/- per sq. mtr. We will advert
to the question as to whether the same ought not to be relied upon as the land
under the said deed of sale not only was converted into non-agricultural land
but even developed as well and all other activities were being carried out by
dividing the same into plot a little later.
admitted that subsequently an agreement of sale was entered into in respect of
those plots of land wherefor the market value was fixed at Rs.300/- per sq.
mtr. It, however, appears that no agreement for sale was produced before the
Reference Court. It was urged that the said purported agreement for sale would
not be relevant for Survey Nos. 90/1 and 91 as the same were agricultural
furthermore place on record the evidence of Deputy Collector, Mr. Mansuri
wherein he stated, "Disputed lands are situated at a distance of 4 Kms.
away from the residential area of Amreli." According to the said witness
he, having considered the four instances of sale which had taken place in
village Giriya, had made his award.
Reference Court as also the High Court, however, proceeded on the premise that
as the Collector of the District himself determined the market value of Survey
No. 39 in terms whereof a sum of Rs.300/- per sq.
by way of premium (which is said to have been reduced at a later stage to
Rs.100/- per sq. mtr.) was fixed.
wholly irrelevant is the question.
A part of
Survey No. 89 was non-agricultural in nature but indisputably Survey Nos. 90/1
and 91 were agricultural lands. The value of agricultural lands could not have
been compared with the value of non- agricultural lands; only because some
witnesses contended that there was a potentiality of the said lands becoming
for the purpose of determination of the market value of the lands in question,
notice certain sale transactions.
of a deed of sale dated 28.7.1988 (Exhibit 48) Survey Nos. 34 and 40/9 (Plot
No. 17 & 18) admeasuring an area of 739.21 sq. mtr. was sold for a
consideration of Rs.96,000/- at the rate of Rs.129/- per sq. mtr. It is,
however, admitted that the land in question consists of residential plots and
is a small piece of land within the municipal limit of Amreli city, being
situate at a distance of about 1.5 kms. from the acquired land. The deed of
sale dated 16.1.1991 (Exhibit 30) shows that 143 sq. mtr. of land in Plot No. 17
was sold for a sum of Rs.57,200/-, that is, at the rate of Rs.400/- per sq. mtr.
It is said to be not only a residential plot, but also a small piece of land 51
situate in village Amreli city in a highly developed area; the acquired land
being about 1.5 kms. away therefrom.
of sale subsequent to the date of notification had also been brought on record
being Exhibits 51 and 53 in respect of Survey Nos. 34, 40/9 and 56/57 at the
rate of Rs.701.21 per sq. mtr. and Rs.673.17 per sq. mtr. respectively. The
lands in question are said to be 2 kms. away from the acquired land. A deed of
sale dated 27.10.1988 (Exhibit 55), however, show that plot No. 8 to Survey No.
36/1 admeasuring 592.50 sq. mt. was sold at a price of Rs.83,500/-, i.e., at
the rate of Rs.140.92 per square meter. The said land is said to be situated in
a fully developed residential area of Amreli City and is about 2 kms. away from
the acquired agricultural land of Survey No. 90/1, 90/2 and 91 of Village
Giriya. By reason of another deed of sale dated 18.1.1991, 361.00 sq. mtr. of
land in Survey Nos. 34 & 40/9 Plot No. 10 was sold for a sum of Rs.
1,50,000/-, i.e., Rs.415.51 per sq. mtr. Two other deeds of sale being Exhibits
58 and 60 being dated 11.10.1991 and 5.1.1991 which were in respect of Survey
Nos. 34, 40/9 Plot No. 60 Survey No. 41 Plot No. 14 was sold at the rate of Rs.
425.69 per sq. mtr. and Rs.292.30 per sq. mtr. for a sum of Rs.85,000/- and
also notice the deeds of sale whereupon reliance has been placed by the State,
the details whereof are as under:
Sale Vendor Vendee Revenue Area Sale Rate/ Type No. Deed Survey Deed Sq. of No.
& No. Amount mt. Land Date (Rs.) (Rs.) 1. 258 P.O.A. of Tulsidas S.No.89
240 4400/- 18- Non 27.2.89 Shambhu Ambalal Plot No. Sq. 33 Agri Vallabh
Lathigara 26 & 39 mt.
P.O.A. of Chandreshkumar S.No. 89 480 8800/- 18- Non 4.4.89 Shambhu Mansukhlal
Plot No. Sq. 33 Agri.
Zinzuvadiya 35, 36, mt. Kabariya 45 & 46 Siddik Habib Nagani
Jayeshkumar Chandrikaben S.No.89 300.6 7000/- 23- Non 20.4.89 Durlabhji
Jashvantray Plot 2 Sq. 28 Agri. Mavani, Kothiya No.1 mt. Amreli
P.O.A. of Hiteshkumar S.No.89 538 9500/- 17- Non 3.6.89 Shambhu Hiralal Plot
No. Sq. 66 Agri Vallabh Zinzuvadiya 89, 58, mt. Kabariya, 71 Shri Siddikbhai
Habibbhai Nagani 5. 955 Mrs. Dalsukh Hiraji 23/2 1-61- 22500/- 1-39 Agri. 20.6.89
Diwaliben Jogani Plot 88 Ha. Babubhai Rokad
P.O.A. of Revatiben S. No.82 484 12000/- 24- Non 28.5.90 Ismail Haribhai
Solanki Plot No. Sq. 79 Agri. Jusabbhai 12 mt. Motiwala etc. 6 Persons Ikbal 7.
1212 Ismail Karshan Damji S.No.82 704 20000/- 28- Non 15.6.90 Jusabbhai
Pithadiya Plot No. Sq. 40 Agri Motiwala 5&6 Mt. etc.
53 8. 715
Asagarali Labhuben 22/2, 1-53- 191510/- 8-05 Agri. 13.4.92 Inayatali Kanaji
Khanesa 23/1 P 78 Saiyad 0-83- 97 2-37- 75 Ha. 9. 1348 Shambhu Pankajbhai
S.No.89, 1016 18500/- 18- Non 3.11.88 Vallabh Mansukhbhai 10 Plots Sq. 20 Agri
Kabariya Zinzuvadiya Plot No. Mt. 178 to 187 10. 2235 Bhanabhai Bhanabhai 35/P
3-67- 14000/- 00- Agri.
Naranbhai Naranbhai 04 38 Limbasiya Limbasiya (Ha) P.O.A. of Vithalbhai Shivlal
Bhanjibhai Bhanjibhai Limbasiya Limbasiya The price variation and the market
value shown is the two different categories of the land relied upon by the
claimants and the State in the aforementioned chart is significant. The price
variation between agricultural land and non-agricultural land almost during the
same period also is of some significance.
It is furthermore
of some interest to note that within a short period of time, the price of the
land had shot up and that too immediately after the process of acquisition of
land had started. It is furthermore important to note 54 that there existed a
significant price variation even in regard to the lands situated on Survey No.
89. which appears to be a very big plot.
cannot be any doubt or dispute whatsoever that different potentiality of land
in different villages and even in different parts of the same village would be
existing. It was therefore not proper for the High Court to treat all types of
lands situated even in different villages as pertaining to a comparable
category . This Court in certain case even has deprecated the practice of
awarding compensation on the basis of an award made in a neighbouring land.
Singh & ors. vs. Union of India [(1998) 8 SCC 136] "If we go by the
compensation awarded to claimants of adjoining village it would not lead to the
correct assessment of market value of the land acquired in the village
Rangpuri. For example village 'A' adjoins village 'B', village B adjoins
village 'C, village 'C adjoins village 'D', so on and so form and in that
process the entire Delhi would be covered."
Basant Kumar (supra)] It is, however, also true that the court is bound to take
into consideration the potentiality of the land.
N.B. Jeejabhoy v. The District Collector Thana C. A. Nos. 313 to 315 of 1965
decided on August 30, 1965, this Court held:
vendor willing to sell his land at the market value will take into
consideration a particular potentiality or special adaptability of the land in
fixing the price. It is not the fancy or the obsession of the vendor that
enters the market value, but the objective factor namely, whether the said
potentiality can be turned to account within a reasonably near future.........
The question therefore turns upon the facts of each case. In the context of
building potentiality many questions will have to be asked and answered :
whether there is pressure on the land for building activity, whether the acquired
land is suitable for building purposes, whether the extension of the said
activity is towards the land acquired, what is the pace of the progress and how
far the said activity has extended and within what time, whether buildings have
been put up on lands purchased for building purposes, what is the distance
between the built-in-land and the land acquired and similar other questions
will have to be answered. It is the overall picture drawn on the said relevant
circumstances that affords the solution."
Narain Singh v. The Uttar Pradesh Government Through Collector of Bijnor [1967
(1) SCR 489], this Court held:
value on the basis of which compensation is payable under s. 23 of the Act
means the price that a willing purchaser would pay to a willing seller for a
property having due regard to its existing condition, with all its existing
advantages, and its potential possibilities when laid out in its most
advantageous manner, excluding any 56 advantage due to the carrying out of the
scheme for the purposes for which the property is compulsorily acquired."
Mahabir Prasad Santuka and Ors. v. Collector, Cuttack and Ors [(1987) 1 SCC
587]} So far as deeds of sale pertaining to the years 1988 and 1989 are
concerned, the same were executed more than three years prior to the date of
acquisition. However, in respect of the deeds of sale pertaining to Survey No.
89, in view of the under-valuation of the lands sold, the Collector fixed the
same at the rate of Rs.125/- per sq. mtr. Furthermore, the Collector himself
has fixed the premium of Rs.300/- per sq. mtr. for conversion from agricultural
land to non-agricultural land. Although the same by itself would not be a safe
criterion for determining the market value, we are of the opinion that both of
them may form the basis for arriving at a reasonable conclusion.
aforementioned purpose, this Court must keep in mind that the distance of the
lands sought to be acquired apart from other factors from the Highway also
plays an important role. Evidence has been brought on record to show that some
lands, which are the subject matter of the sale deeds on which reliance has
been placed by the claimants, are situated at a distance of 15 to 4 kms from
the Highway. In that view of the matter, it would, in our opinion, be safe to
arrive at the market value as on the date of acquisition for the
non-agricultural lands at Rs.250/- per sq. mtr.
So far as
the agricultural lands are concerned, even if they had the potentiality of
being converted into a non-agricultural lands as on the date of notification,
they were agricultural lands albeit in a developed area. The valuation thereof
may be determined at 50% of the developed land that is, at Rs. 125/- per sq.
In this batch of cases, notification under Section 4 of the Act was issued in
the daily newspaper on 2.2.1990 and was published in the Gazette on 15.3.1990.
They were said to have been affixed at or near the lands in question on
1.8.1990. On the lands under acquisition, indisputably godowns were also
constructed. A declaration under Section 6 of the Act was issued on 18.6.1991
and published in the Official Gazette on 11.7.1991.
details of the cases falling in Group-III are as under:
Total C.A. No. F.A. No. Notificatio Date of matters n Section 4 Judgment dated
7 8 205-212/2000 410- 15.3.1990 4.5.1999 417/1998 8 6 214-219/2000 2073-
15.3.1990 4.5.1999 2078/1998 58 An award was made by the Land Acquisition
Collector on 23.7.1993.
herein being aggrieved by and dissatisfied with the quantum of compensation
made in the said awards filed applications for reference before the Collector
to the District Court, Amreli claiming a sum of Rs.500/- per square meter for
agricultural lands and Rs.600/- to Rs.750/- for non- agricultural lands as also
additional amount of compensation, the details thereof are as under:
Survey Type of Area Comp. Comp. Comp. Comp.
in awarded claimed decreed Decreed Sqm. by in by by Guj.
Lower Lower High Rs. sqm Court Court Court Sq./sqm. Rs.Sqm Rs.Sqm 1 2 3 4 5 6 7
8 410/98 44/1 Agri 57445 50 500 160 160 411/98 43/5A-1 Agri. 21 Godown 412/98
43/5A-1 Non- 541 150 500 240 240 Agri.
38/2 Agri 4992 150 500 160 160 414/98 40/4A Non- 4994 150 600 240 240 Agri 415/98
43/2 Non- 9407 150 500 240 240 Agri 416/98 43/2 Non- 236 150 500 240 240 Agri
417/98 43/3 Non- 632 150 500 240 240 Agri 2073/98 42/1p Agri 32104 50 600 160
160 43/1p 2074/98 43/2 Non- 5407 150 600 240 240 Agri 2075/98 38/1 Agri 13717
50 600 160 160 59 2076/98 43/5A-1 Non- 307 150 600 240 240 Agri.
43/5A-1 Non- 216 150 600 240 240 Agri.
43/5A-1 Non- 216 150 600 240 240 Agri.
Mahendrakumar Nathalal Adatiya said to be the power of attorney holder of the
claimants deposed twice before the Reference Judge.
depositions was marked as Exhibit 20 and Exhibit 31. In his deposition, he
inter alia stated that the lands under acquisition are on Amreli-Rajkot Highway
known as Chaital Road. In the said town, there is a Railway Station, Civil
Hospital, S.T. Depot, Airdrome, Colleges, and market yard, etc. According to
him, there was a possibility of further development. The said lands were on the
eastern side of the river and the area in question had further been developing.
According to the said witness, moreover apart from a large number of houses
constructed by various societies; there is an Eye Hospital, High School and
other Hospitals situated near the lands in question. It was furthermore stated
that on the other side of the land in question, one Survey No 43/5 was
converted into non-agricultural tenancy and in the years 1983-1984, commercial
complexes were constructed for conversion from agricultural land to
non-agricultural land. The Collector fixed premium at the rate of Rs.300/- per square
meter in respect of lands which was adjoining Survey No. 43/5 and Survey No.44.
According to him, 60 the prevailing market rate at the relevant time was
Rs.600/- to 800/- per square meter.
from the claimants, some tenants of the godowns examined themselves being
witness No.3 and witness No.4. Several other witnesses including an expert
Jivanbhai Pragjibhai Savliya (Witness No.7) was also examined.
of the State, Shri Kaushik Maganlal (D.W.1) Deputy Collector who passed the
award was examined.
Balubhai V. Savliya (D.W.2), a vendor proved a deed of sale which was marked as
Exhibit 83, whereby and whereunder he had sold 5 bighas of land in 1985 for a
consideration of Rs.10,000/-. The State furthermore examined one Nandlal
Trikamjibhai (D.W.3). He had purchased some land near the dam site at a price
of Rs.150/- per square meter.
Court on the basis of the materials brought on record awarded compensation at
the rate of Rs.160/- to Rs.240/- per square meter.
So far as
the value of the godowns are concerned, the yearly rent was found to be
Rs.1,04,000/- whereas the Reference Court applied the 61 multiplier of 20, the
High Court by reason of its impugned judgment has applied the multiplier of 10.
parties have preferred appeals thereagainst.
appeals have been preferred by the parties hereto before this Court also.
Shelati, the learned Senior Counsel appearing on behalf of the appellant, would
the Reference Court wrongly proceeded on the premise that all acquired lands
are situated by the side of Amreli - Rajkot Highway despite the fact that
Exhibit 39 (map) clearly shows that Survey Nos. 43/5A-1, 38/2, 40/4A did not about
ii. The market
rate fixed by the Collector at Rs.300/- per square meter for converting
agricultural land to non- agricultural land in respect of Survey No. 39 could
not have been taken into consideration for the purpose of determining the
market value of the land as by reason thereof the restrictions imposed in a
covenant had been 62 removed by enlarging the ambit of the property right over
reliance could have been placed on the deeds of sale dated 20.9.1990, 16.1.1991
and 16.1.1991 in respect of Survey Nos. 34 and 40/9 comprising of an area of
240 square meter, 143 square meter and 143 square meter respectively and sold
for a sum of Rs.1,20,000/-, i.e., at the rate of Rs.487.80 per square meter, a
sum of Rs.57,200/-, i.e., at the rate of Rs.400/- per square meter and Rs.
55,000/-, i.e., at the rate of Rs.400/- per square meter respectively as the
sale instances being Exhibit 58, 60 and 61 were not comparable, as (1) the
lands under sale were small pieces of land;
were situated in highly developed area of Amreli City;
were within the territorial limit of municipality;
lands were situated 1.5 to 2.5 kilometers away from the acquired lands; and (5)
the deeds of sale having been executed after the issuance of notification, no
reliance could have been placed thereupon.
The deeds of sale dated 21.5.1985 and 26.10.1988 in respect of Survey No. 991
measuring 1-30-51 square meter and 323 .12 square meter respectively which were
sold for a sum of Rs 10,000, i.e., at the rate of Rs 0.77 per square meter and
Rs 45,000, i.e., at the rate of Rs.139.26 per square meter respectively is
demonstrative of the fact that there is a huge disparity.
Godowns having been constructed for the purpose of avoiding payment of octroi
duty itself goes to show that the value of the land within the municipal area
would be higher.
evidence of Dr. Bharat Kantilal Mehta who had purchased the lands having stated
that he had purchased the lands for professional and residential purpose and having
taken a firm decision to purchase the land only in that area and, thus, the
same being of some personal value to him could not be a comparable instance.
potentiality of the land in a municipal area must be held to be higher than the
potentiality of the land in a rural area and, thus, the Reference Court as also
the High 64 Court committed a serious error in relying upon the sale instances
which were in respect of the lands situate within the municipal area.
High Court and the Reference Court committed a serious error insofar as they
failed to take into consideration that the sale instances whereupon reliance
had been placed by the State, viz. Exhibit 83 and Exhibit 85, namely, the deeds
of sale dated 21.5.1985 and 26.10.1988 wherefrom it would appear that whereas
in the year 1985 the market value was Rs.0.77 per Are, in the year 1988 the
rate was Rs.139.26 ps. per Are. Both the deeds of sale involving small plots of
land and being situated at a distance of 0.75 kilometer from the acquired land
and, thus, should have been taken into consideration.
ix. As it
was categorically stated by Mahendrakumar, the power of attorney holder,
"we could not earn such type of rental income if the godowns were situated
within the municipality area because the godowns were being constructed outside
the octroi naka", and similarly H.N. Chandarana having stated that the
godowns being 65 situated outside octroi naka, he had hired the same to save
octroi duty; and the godowns having been constructed to evade payment of levy
of octroi, it did not reflect the true market value thereof.
x. In any
event, the cost of the construction of the godowns should have been considered
for determining the market value. Provision for expenses incurred like taxes,
labour charges, maintenance of the godown and salary payable to the watchman
having not been taken into consideration while determining the actual rental
income derived by the claimants, the impugned judgment should be suitably
any view of the matter, once the market value was determined on the basis of
the income thereof, no separate compensation could have been granted towards
the value of the land.
Kr. Gupta and Mr. Dinesh Dwivedi, learned Senior Counsel appearing on behalf of
the claimants - respondents, on the other hand, urged:
66 i. The
last publication of notification having been made on 1.8.1990, the deeds of
sale which were executed in September 1990 and a few months thereafter had
rightly been relied upon by the courts below being contemporaneous documents.
Market value of the land in terms of Section 23 of the Land Acquisition Act
being required to be determined as on date of issuance of the notification, the
same would connote nearness and not a date prior to issuance of the
lands acquired being situated on the eastern side of the river and just outside
the Amreli town, the Reference Court as also the High Court committed a serious
error in deducting 50% from the market value of the land situated in a
map on which reliance has been placed by the State of Gujarat would itself show
that the area in question is a highly developed one and the same were situated
near the Aerodrome, School, Hotel, a large number of housing societies, and in
that view of the matter, there was absolutely no reason as to why the sale
instances whereupon reliance has been placed by the claimants should not have
been considered to be the 67 determinative factor for fixation of the amount of
Godowns having been constructed on non-agricultural lands and for the purpose
of proving the rental income therefrom not only Mahendrakumar was examined in
two reference cases as P.W. 1 and P.W.3 but also two tenants, namely, Harshad
Nathalal Chanarana (P.W.3) and Paresh Dinkarbhai Davda (P.W. 4) who proved the
advantages of such godowns, there was no reason as to why the multiplier of ten
should have been used although ordinarily a multiplier of 25 is applied.
value of the godowns was required to be determined keeping in view the loss of
earning therefrom in terms of the `fourthly' appended to Section 23 of the Act.
6 - Navnitbhai Kakubhai Ganatra, who was the vendor in respect of Exhibits 60
and 61, relating to Survey Nos. 34 and 40/9 having been proved, the sale deed
which was executed within a period of six months from the date of publication
of the notification under Section 4(1) of the Act, there was no reason as to
why the same could not have formed the basis for determining the market value.
Even Jivanbhai Pragjibhai Savliya (P.W. 7) has proved the assessment report and
map to show that Survey No. 43/5A was adjacent to the godown. The lands under
acquisition being small plots, the contention of the State of Gujarat that the
deeds of sale being Exhibits 58, 60 and 61 could not have been relied upon must
be held to be incorrect.
Reference Court as also the High Court having arrived at a categorical finding
that most of the contemporaneous sale- deeds relied upon by the respondents
were in the vicinity of the acquired lands, there is no reason as to why a
different view should be taken by this Court.
for acquisition of the said lands was issued on 15.3.1990.
under acquisition appertain to Survey Nos. 44/1, 43/5A-1, 38/2, 40/4A, 43/2,
43/3, 42/1p, 43/1p, 38/1, 38/2. Whereas Survey Nos. 44/1, 38/2, 42/1p, 43/1p
and 38/1 are agricultural lands; other Survey Nos. including Survey No. 43/5A-1
are non-agricultural lands.
On a part
of Survey No. 43/5A-1, 21 godowns have been constructed wherefor separate
amount of compensation has been awarded. The claimants in support of their
claim had relied upon the deeds of sale dated 69 20.9.1990 marked as Exhibit 58.
The deeds of sale which were executed on behalf of the State are dated
21.5.1985 and 26.10.1988.
Reference Court as also the High Court determined the amount of compensation at
the rate of Rs.240/- per square meter for non-agricultural lands and deducted
one-third therefrom, i.e., Rs.160/- towards compensation for agricultural
lands. In arriving at the said figure, the Reference Court proceeded on the
basis that the market value of the land situated in the municipal area was
Rs.485/- per square meter at the time of acquisition, and, thus, the lands in
question being outside the municipal area, the market value thereof should be
deducted by 50%, i.e., Rs.240/- per square meter. As indicated hereinbefore,
for determining the value of agricultural land further one-third has been
place on record that even before the High Court, the claimants had preferred
cross objections, which were rejected on the premise that requisite amount of
court fee had not been paid.
Administrator General of West Bengal v. Collector, Varanasi [AIR 1988 SC 943],
this Court held:
determination of market-value of a piece land with potentialities for urban use
is an intricate exercise which calls for collection and collation of diverse
economic criteria. The market-value of a 70 piece of property, for purposes of
Section 23 of the Act, is stated to be the price at which the property changes
hands from a willing seller to a willing, but not too anxious a buyer, dealing
at arms length.
determination of market-value, as one author put it, is the prediction of an
economic event, viz, the price-outcome of a hypothetical sale, expressed in
terms of probabilities. Prices fetched for similar lands with similar
advantages and potentialities under bonafide transactions of sale at or about
the time of the preliminary notification are the usual;
indeed the best, evidences of market-value.
methods of valuation are resorted to if the evidence of sale of similar lands
is not available."
of Punjab and Anr. vs. Hans Raj (Dead) by Lrs. Sohan Singh and Ors., this Court
the method of averaging the prices fetched by sales of different lands of
different kinds at different times, for fixing the market value of the acquired
land, if followed, could bring about a figure of price which may not at all be
regarded as the price to be fetched by sale of acquired land.
should not have, ordinarily recourse to such method. It is well settled that
genuine and bona fide sale transactions in respect of the land under
acquisition or in its absence the bona fide sale transactions proximate to the
point of acquisition of the lands situated in the neighbourhood of the acquired
lands possessing similar value or utility taken place between a willing vendee and
the willing vendor which could be expected to reflect the true value, as agreed
between reasonable prudent persons acting in the normal market conditions are
the real basis to determine the market value."
Keeping in view the ratio laid down in the aforementioned decisions as also the
materials placed on record, we are of the opinion that the amount of
compensation for the lands acquired in this matter arrived at by the High
Court, that is, Rs.240/- per sq. mtr. for non-agricultural land and Rs.160/- sq.
agricultural land does not warrant any interference on our part. The High
Court, in this regard, has adopted the correct approach particularly in view of
the fact that the lands in question are not only situated within a developed
area but being situated near Aerodrome, Schools, Hospitals, etc.
market value thereof could not have been determined at a lesser rate.
shall deal with the question of the amount payable for acquisition of 21
godowns and the land on which they stand in Survey No. 43/5A-1. Out of the
total area of 4250 mtrs of land, 2972 sq. mtrs. is agricultural land and 1278
sq. mtrs. is non-agricultural land on which the godowns have been constructed.
Commercial complexes were constructed on it in the year 1984.
have constructed 6 big godowns and 15 small godowns.
amount of rent of the godowns has been brought on record.
have claimed compensation under various Heads, namely, 72 price of the land,
loss suffered due to recovery of rent for 2 years of godowns, loss for
construction for deep-well, watchman quarter, etc.
the principal questions, as indicated hereinbefore, raised on behalf of the
State is that the valuation of the land cannot be determined indirectly twice
over, one on the basis of the value of the land and the other on the basis of
the rental income. Matter would, however, be different where only there is a
construction on a land which is used for residential or other purposes.
Kumar Tandon & Ors. vs. State of U.P. [(1997) 2 SCC 161], this Court held:
is well-settled law that when land and building are acquired by a notification,
the claimant is not entitled to separate valuation of the building and the
land. They are entitled to compensation on either of the two methods but not
both. If the building is assessed, it is settled law that the measure of
assessment be based on either the rent received from the property with suitable
multiplier or the value of the building is the proper method of
We are in
agreement with the view that for extent of land on which the godowns stand,
separate compensation need not be paid when compensation with respect to rental
income is being paid for the godowns.
High Court by reason of the impugned judgment has granted compensation inter
alia applying the multiplier of 10 over the annual income. The approach of the
High Court is correct.
Airports Authority of India v. Satyagopal Roy and Ors.
it was held that:
It is settled law that in evaluating the market value of the acquired property,
namely, land and building or the land with fruit-bearing trees standing
thereon, value of both is to be determined not as separate units but as one
unit. Therefore, it would be open to the Land Acquisition Officer or the Court
either to assess the land with all its advantages and fix the market value
thereof on the basis of comparable sale instances. In case where comparable
sale instances are not available and where there is reliable and acceptable
evidence on record of the annual income, market value could be assessed and
determined on the basis of net annual income multiplied by appropriate
multiplier for its capitalization."
Assistant Commissioner-cum-Land Acquisition Officer, Bellary vs. S.T. Pompanna
Setty [(2005) 9 SCC 662], this Court has held:
From the above cases, it is clear that normally in the cases where compensation
is awarded on yield basis, multiplier of 10 is considered proper and
appropriate. In the case on hand, multiplier of 15 has been applied which is on
the higher side...."
74 It was
an agricultural land.
Addl. Special Land Acquisition Officer vs. Yamanappa Basalingappa Chalwadi
[(1994) 3 SCC 323]} In State of Kerala vs. P.P. Hassan Koya [AIR 1968 SC 1201],
the method which was generally resorted to in determining the value of the land
with buildings especially those used for business purposes, was the method of
capitalization of return actually received or which might reasonably be
received from the land and the buildings. Whereas the Reference Judge had
multiplied the annual income by 35 times, the High Court had reduced it to 33
1/3 times. The view of the High Court was upheld.
Special Land Acquisition Officer, Kalinadai (Hydro-Electric) Project, Dandali,
Uttra Kannada District v. Vasant Gundu Bale [1995 Supp (4) SCC 649] it was held
Sri Veerappa, the learned Counsel for the State, has contended that the High
Court committed grave error of law in recording a finding that lands were
possessed of potential value for building purposes. We find no force in the
contention. It is seen that when 7,800 lineaments were constructed in the
project area, it would be clear that a township had come into existence. It is
an admitted fact that the land under acquisition is about the township. It is
also an admitted fact that in Ext. A-12 sanction was obtained on September 13,
1973 for conversion of agricultural lands into urban lands of the layout 75 and
sale of plots which could not take place due to the fact that mud was dumped on
the sanction came to be cancelled by the Assistant Commissioner. Be that as it
may, the High Court on the basis of the rental value had determined
compensation at the rale of Rs. 1200 per acre applying the multiplier of 15 and
arrived at the net income at Rs. 18,000 per acre. It is now settled law that
the uniform rate of multiplier of 10 is being applied for the lands acquired
even in the State of Karnataka. Even acceding the multiplier of 12 as held by
this Court in Special Land Acquisition Officer, Davangree v. P. Veerabhadarappa
and Ors. ( 1984 ) 2 SCC 120, the claimant cannot get more than Rs. 14,000 per
keeping in view the ratio of the above mentioned decisions and the facts of the
present case, we modify the decision of the High Court to the extent of
excluding the payment of separate amount of compensation for the 1278 sq. mtrs.
of non-agricultural land in which the 21 Godowns have been constructed would be
calculated on the rental value. In other words, whereas the market value of the
land would be determined at Rs.240/- per square feet, the lands on which the
godowns have been constructed, the amount of compensation shall be calculated
at the rental value thereof by following the method adopted by the High Court.
For the said purpose, the matter is remitted to the Land Acquisition Officer.
appeals are disposed of with the aforementioned observations and directions. In
the facts and circumstances of the case, there shall be no order as to costs.
.....................................J. [S.B. Sinha]
.....................................J. [Cyriac Joseph]
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