Hirabai & Ors. Vs.
L.A.O. Cum Asst. Commnr.  INSC 769 (23 September 2010)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 2042-44 OF 2004 Hirabai
& Ors. ....... Appellants Versus L.A.O. cum Asst. Commnr. ..... Respondent
With CIVIL APPEAL NOS. 2045-52 OF 2004 With CIVIL APPEAL NOS. 2053-77 OF 2004
With CIVIL APPEAL NO. 5900 OF 2005
applications seeking for substitution of the legal representatives of the
deceased appellants pending consideration are allowed while condoning delay,
directing substitution of the names of the legal representatives in place of
deceased appellants. The said applications are accordingly disposed of by this
passed an order for substitution of the legal representatives in place of the
deceased appellants, we now proceed to dispose of all these appeals by this
common judgment and order as all these appeals are interconnected and issues
raised and urged are almost identical in nature.
Government of Karnataka issued a preliminary notification under Section 4(1) of
the Land Acquisition Act, 1894 [for short "the Act"] proposing to
acquire lands for the Bhima River Lift Irrigation Project which was published
in the Government Gazette on 08.06.1995 by which the Government proposed to
acquire lands belonging to the appellants herein. The lands proposed to be
acquired consist of both irrigated and dry lands pertaining to Devangaon
Village, Bijapur District. Subsequently, the State Government also issued
declaration under Section 6 of the Act on 2 25.01.1996. Subsequent to the
aforesaid issuance of notification under Section 4(1) followed by the
notification under Section 6 of the Act, the Land Acquisition Officer passed an
award on 14.12.1996 whereby he fixed the compensation and the market value of
the acquired irrigated land at the rate of Rs. 15,000/- per acre and for the
dry lands at Rs. 13,000/- per acre.
by the aforesaid award, reference applications were filed by the claimant -
appellants on the basis of which a reference was made to the reference court.
Before the reference court parties adduced evidences both oral and documentary.
At the conclusion of the trial, the reference court enhanced the compensation
of dry lands from Rs. 13,000/- per acre to Rs. 31,500/- per acre by way of
judgment and order dated 31.01.2000 and so far as the irrigated lands are
concerned, the reference court by way of its judgments and orders dated
08.04.1999 and 13.12.1999 enhanced the compensation of irrigated lands from Rs.
15,000/- per acre to Rs. 45,900/- per acre.
claimants preferred appeals before the High Court of Karnataka and the High
Court by the impugned judgments and orders enhanced the market value for the
irrigated lands and determined the same at the rate of Rs. 75,600/- per acre
and in respect of dry lands the High Court determined the market value at Rs.
38,000/- per acre. Being aggrieved by the aforesaid judgments and orders passed
by the High Court, the present appeals were filed in this Court, in which we
have heard the learned counsel appearing for the parties.
learned counsel appearing for the appellants contended before us that the High
Court was wrong in applying the capitalisation method of valuation for
calculating the market value of both the categories of lands. In order to
strengthen her argument, she had extensively taken us through the judgments and
orders of the High Court, reference court and also the other evidences on
first submission which was advanced before us by the counsel appearing for the
appellants was that the High Court was wrong to hold that appellants have
restricted their 4 claims at Rs. 80,000/- per acre whereas it is shown from
the claim petition filed before the reference court that the claim was made at
Rs. 1,00,000/- per acre, although, appellants paid the court fee only at Rs.
80,000/- per acre for the lands in question. Therefore, on this basis, we find
that there was nothing wrong on the part of the Division Bench of the High
Court mentioning that the prayer of the appellants was to fix the market value
of the acquired land at Rs. 80,000/- per acre.
next contention of the counsel appearing for the appellants is that the High
Court was unjustified to reject the certificate dated 24.02.1996 [Exhibit P-71]
issued by the Assistant Director of Agriculture, Sindgi in respect of
agricultural land in Devangaon Area indicating a standard yield of sugarcane as
60 tonnes per year per acre. She also submitted that the market value of the
irrigated lands in the present case should be decided on the basis of a similar
case in which Rs. 79,000/- was awarded by the Land Acquisition Officer himself for
the sugarcane growing lands by way of a consent award dated 20.10.1997 in
respect of the lands 5 which were acquired under preliminary notification
dated 08.08.1996 at Vadahalli Village in Bagalkot Taluk. Relying on the same,
the counsel for the appellants submitted that even if the claim of the
appellants for fixing the market value of land at Rs. 1,00,000/- per acre is
not accepted by the court, the market value should be fixed on the basis of the
market value fixed for sugarcane growing lands of Vadahalli Village in Bagalkot
Taluk as per the award of Land Acquisition Officer dated 20.10.1997.
appearing for the respondent, however, supported the impugned judgments and
orders and relying on the same submitted that the said orders do not call for
any interference by this Court.
the present case we are concerned with the acquisition of irrigated lands and
dry lands. By issuing the aforesaid preliminary notification issued under
Section 4(1), lands of the appellants were acquired. Having carefully
scrutinized the judgment of the Division Bench of the High Court, we find that
the High Court has examined the issue of 6 determining fair and just market
value of the lands from various angles.
drew the attention of the High Court to a certified copy of the sale deed
relating to sale of one acre of land in Sy. No. 109/2 [Exhibit P-26] of
Kallahalli Village situated at a distance of 3 kilometers from the acquired
lands. The said sale deed indicates that the aforesaid land was sold at the
rate of Rs. 75,000/- per acre on 05.07.1994 which is about one year prior to
the date of the preliminary notification in the present case. The encumbrance
certificate relating to Sy. No. 1/5 of Kallahalli Village, which shows that the
said land measuring 1 acre 25 guntas was sold for a consideration of Rs. 1,
15,000/- per acre and was marked as Ex. P-27, was also produced before the High
Court by the appellants.
aforesaid documents, filed on behalf of the appellants to justify their claim at
Rs. 1,00,000/- per acre, were not accepted by the High Court as the aforesaid
lands covered by the said sale deeds were lands which were situated at a
distance of 2 to 3 kilometers from the acquired lands. There 7 is no definite
evidence to indicate the nature and quality of the said land, and hence there
is nothing on record to show their comparability with the acquired lands. We
are of the considered opinion that the High Court rightly kept the said sale
deeds out of its consideration for lands situated about 2 to 3 kilometers away,
which could not be said to be comparable lands with that of the acquired lands.
There was no other direct documentary evidence which could prove and establish
or act as a guide in determining the market value of the acquired lands.
Therefore, the High Court fell back upon the capitalisation method of valuation
for the acquired lands and in that process it relied upon the extract of the
Fully Revised Estimate of Area, Production & Average yield of Commercial
Crops in Karnataka for 1995-96 published by the Directorate of Economics and
Statistics. According to the Division Bench of the High Court the said document
was the safe guide to determine the market value of the acquired lands on the
basis of capitalisation method.
High Court considered the said document of Directorate of Economics and
Statistics and found therefrom that during 8 1995-96, the relevant year in
which the notification for acquisition of the land in the present case was
issued, the average yield of sugarcane per hectare was 90 tonnes for the State
of Karnataka and the average yield per hectare for Bijapur District was 106
tonnes and, therefore, according to the Division Bench average yield per acre
was 36.422 tonnes [rounded off to 36 tonnes] for Karnataka and 42.89 tonnes for
was no dispute with regard to the fact that price of jaggery at the relevant
time was Rs. 700/- per quintal and on the basis thereof and after making
calculation, the High Court came to the finding that the market value on the
capitalisation method would come to Rs. 75,600/- for the acquired sugarcane
growing irrigated lands. The calculations on the basis of which the aforesaid
figure was arrived at by the High Court in its judgment are stated at para 18
which reads as follows: - "18. .............. It is well-settled and
recognized that one ton of sugarcane will yield one quintal of jaggery. If Rs.
700/- is the price of jaggery per quintal, 40% has to be deducted towards 9
cost of conversion of sugarcane into jaggery, overheads, profit of dealer, and
The balance will be
Rs. 420/-. Out of it, 50% will have to be deducted towards cost of cultivation.
Therefore, net realization will be Rs. 210/- per tonne of sugarcane. For 36
tonnes the realization will be Rs. 7,560/-. Thus the value of net yield will be
Rs. 7,560/-. Thus the value of net yield will be Rs. 7,560/- per acre after
expenses. By applying the multiplier of 10, for capitalisation, the market
value will be Rs. 75,600/-."
aforesaid calculation made by the Division Bench of the High Court was
challenged before us by the counsel appearing for the appellants contending
inter alia that the aforesaid document on which reliance was placed by the High
Court, although issued by a Government Department, the same should not have
been accepted as it was not produced in the evidence. It was also submitted by
her that reliance instead should have been placed on the certificate produced
by her dated 24.02.1996 issued by the Assistant Director of Agriculture, Sindgi
giving particulars of the yield in respect of the lands in Devangaon Village
indicating standard yield of sugarcane as 60 tonnes per year per acre. Relying
on the said document, it was submitted by her that 10 as one tonne of
sugarcane could yield about a quintal of jaggery and hence the yield of jaggery
would be 60 quintals of jaggery which is of the value of Rs. 42,000/- and if 50
% was deducted towards cost of cultivation, the net yield was Rs. 21,000/- and
by capitalizing it with the multiplier factor of 10, the market value would be
Rs. 2,10,000/- per acre.
we consider the aforesaid submission in the light of the records we find that
at least in two respects there is agreement between the parties, i.e., to the
extent of sale price of jaggery being Rs. 700/- per quintal and that for
capitalizing the market value the multiplying factor should be 10.
aforesaid certificate dated 24.02.1996 was shown to have been issued by the
Assistant Director of Agriculture, Sindgi but Assistant Director himself was
not examined nor anybody from his office was examined to indicate as to under
what circumstances the aforesaid certificate was issued and what is the basis
of giving such a certificate and also to show what is the method of calculation
to arrive at the aforesaid 11 statistics. The said document was produced by
the appellants very casually and without there being any further evidence in
support of the aforesaid contents of the certificate. It is not safe to rely on
such a certificate, shown to have been issued by a Government officer without
the author of the said certificate being produced for testing the veracity of
the certificate and the contents thereof.
was also placed by the counsel appearing for the appellants on the consent
award which however again was not accepted by the High Court and rightly so, we
feel, because the same was a consent award which cannot be said to be binding
on the parties hereto. Therefore, there was no valid document in the instant
case wherefrom it can safely be deduced as to what the exact market price of
the land in question could be. Therefore, there was no other option but to fall
back upon the capitalisation method of valuation as there is no other safe and
reliable evidence available on record. While calculating market value of the
land on the basis of such capitalisation method of valuation, the High Court
relied on the aforesaid Government document published by the Directorate of
Economics and Statistics which was also pertaining to the relevant year in
question, i.e., 1995-96. According to the said document which was accepted as a
reliable document, average yield per acre was 36.422 tonnes [rounded off to 36
tonnes] for Karnataka and 42.89 tonnes for Bijapur District. The High Court
accepted the main statistics for arriving at the market value of the land. On
going through the format and method of calculation as appearing from paragraphs
16 and 18 of the judgment and order of the Division Bench of the High Court, we
do not find any reason to interfere with the same as the said calculation is
found to be just and appropriate. Without any disputing material on record, we
do not see as to why we should not accept the deduction of 40 per cent towards
cost of conversion of sugarcane into jaggery and if that is accepted the
remaining basis of the calculation is found to be appropriate, as even
according to the appellants, 50 per cent could be deducted towards cost of
cultivation which was also the submission of the counsel appearing for the
appellant as appearing from paragraph 7 of the judgment itself.
decided thus, with regard to the determination of market value of the irrigated
lands, we now focus our attention to the determination of the market value for
the dry lands which was fixed by the High Court at Rs. 38,000/- per acre. There
again, the High Court relied upon the earlier decision of the Division Bench in
respect of the land of the same village which was also acquired for the same
purpose by the same notification. The aforesaid decision on which reliance was
placed by the High Court in its judgment is also placed on record and on going
through the same we find that the aforesaid decision to fix the market value of
the land at Rs. 38,000/- was arrived at on the ground that the market value of
the irrigated lands would be taken as about one-and- half times of the value of
dry lands. After making 25% deduction from the market value fixed for the
sugarcane growing irrigated lands, the Division Bench of the High Court arrived
at a finding that the market value of the other irrigated land would be around
Rs. 57000/-per acre, and consequent thereto, the High Court fixed the amount of
Rs. 38,000/- per acre for the dry land taking notice of one and 14 half time
calculation. The aforesaid calculation given by the High Court could not be
assailed by the counsel appearing for the appellants by giving any other
we have agreed with the findings of the Division Bench of the High Court to fix
the market value of the sugarcane growing irrigated lands at Rs. 75,600/- per
acre, necessarily, for the dry land the market value shall have to be held to
be fixed at Rs. 38,000/- per acre, by following the aforesaid criteria which is
ordinarily accepted and followed and also to be rational.
that view of the matter we do not find any reasonable ground to interfere with
the decisions of the High Court for fixing the market value of sugarcane
growing irrigated lands at Rs. 75,600/- and at Rs. 38,000/- for the dry lands.
We, therefore, find no merit in these appeals which are dismissed, but we leave
the parties to bear their own costs.
[Dr. Mukundakam Sharma]
.......................................J. [Anil R. Dave]