Full Judgment Text
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PETITIONER:
TEK CHAND (DEAD) BY L.RS. AND ORS.
Vs.
RESPONDENT:
UNION OF INDIA AND ORS. ETC.
DATE OF JUDGMENT31/08/1990
BENCH:
KANIA, M.H.
BENCH:
KANIA, M.H.
SAIKIA, K.N. (J)
RAMASWAMY, K.
CITATION:
1990 SCR Supl. (1) 126 1990 SCC (4) 495
JT 1990 (2) 68 1990 SCALE (2)479
ACT:
Land Acquisition Act, 1894: Section 4--Acquisition of
land-Determining compensation thereof--Relevant factors and
circumstances --High Court placing reliance on circumstances
not relevant--Matter remanded to High Court.
HEADNOTE:
Notification under section 4 of the Land Acquisition
Act, 1894 was issued in respect of the appellant’s lands in
1959 and the lands were acquired. The Land Acquisition
Collector awarded compensation at the rate of Rs.2,000 per
bigha, as also solatium and interest.
The appellants approached the District Court which
enhanced the compensation from Rs.2,000 per bigha to
Rs.4,000/5,000 per bigha. The appellants preferred appeals
before the High Court. Taking into account a comparable sale
in the area few months before the Notification, the High
Court enhanced the compensation to Rs.7,000 per bigha and
also awarded solatium and interest. The plea for higher
compensation on the ground that some developed plots were
sold by a real estate company at a higher rate was negatived
since according to the High Court that company was in a
better position to develop the land and that the potentiali-
ty of the land in its hands was greater.
These appeals, by special leave, are against the said
orders of the High Court.
Allowing the appeals,
HELD: 1. In land acquisition proceedings compensation
has to be fixed on the basis of a hypothetical sale at or
about the time of the notification under section 4 of the
Land Acquisition Act of similar land by a willing seller to
a willing buyer, there being no other factors like urgent
need of money or urgent need of the land for a special
purpose and so on which might depress or augment the price.
In determining this compensation the ability of a particular
party or his lack of ability to develop the land and to
realise its potential, cannot be regarded as a relevant
circumstance. The High Court, therefore, was in error in
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placing great reliance of the aforesaid circumstance in
determining the value of the land for fixing the compensa-
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tion. [128F-H]
2. The appellants have failed to furnish any material on
record of this Court on which this Court could fix the
proper compensation nor have any arguments been advanced in
that regard. In these circumstances, the impugned judgments
and orders are set aside and the appeals remanded to the
High Court for determination of the proper compensation for
the lands acquired in accordance with law. and in the light
of our judgment. [129A-B]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 1334
and 1335 of 1982.
From the Judgment and Order dated 9.11.1979 and 8.5.
1979 of Delhi High Court in L.P.A. No. 192 of 1979 and
R.F.A. No. 245 of 1969.
Sasidharan and P.K. Pillai for the Appellants.
Tapas Ray, A.K. Srivastava and Ms. A. Subhashini for the
Respondents.
The following Order of the Court was delivered:
KANIA, J. Lands comprising a few bighas belonging to the
claimants (appellants) and situated in the area now known as
’Nehru Place’ in Delhi were notified for acquisition by the
Government of India by a Notification dated November 13,
1959, issued under Section 4 of the Land Acquisition Act,
1894. The said lands were duly acquired under the said Act.
In compensation proceedings the Land Acquisition Collector
awarded to the claimants (appellants) compensation at the
rate of Rs.2,000 per bigha and further awarded solatium and
interest as provided by law. In two references under section
18 of the Land Acquisition Act at the instance of the appel-
lants, the Additional District Judge enhanced the compensa-
tion from Rs.2,000 per bigha to Rs.4,000/5,000 per bigha.
From the orders of the Additional District Judge. the appel-
lants filed appeals in Delhi High Court. The Delhi High
Court enhanced the compensation to Rs.7,000 per bigha and
also awarded solatium and interest. Compensation was deter-
mined at the aforesaid rate largely on the footing of a sale
of comparable land by
128
one Puran to the Delhi Finance Company Private Limited
(hereinafter referred to as the DLF Co.’). That sale took
place a few months prior to the date of the Notification and
rate at which the land was sold was Rs.6,000 per bigha. In
view of the period of few months which had gone-by and the
rise in land values, the High Court determined the compensa-
tion at Rs.7,000 per bigha. The claimants strongly relied on
the instances of ’sales of small developed plots by the DLF
Co. and pointed out that it was on the basis of the sales
that the High Court had awarded compensation at the rate of
Rs.11 per sq. yard to the DLF Co. in respect of similar
lands of the said company acquired by the government. This
amount was arrived at by taking the price of developed plots
sold by DLF Co. and deducting therefrom the cost of develop-
ment. It was alleged by the claimants that this land was
contiguous to the land of the claimants acquired as afore-
said and the acquisition was at almost the same time as in
the case of the claimants. It was submitted by them that the
principal reason given by learned District Judge as well as
the High Court for not accepting the instance of the compen-
sation awarded to DLF Co. was not tenable in law. It was
submitted by them that compensation should also have been
awarded to them on the basis of the said instance. The High
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Court has taken the view that the instance of compensation
awarded to DLF Co. was not acceptable mainly because that
company was in a position to develop the land and to realise
its potentiality and had been able to sell certain developed
plots at a very much higher rates. The High Court took the
view that the higher compensation was liable to be awarded
to the DLF Co. because that organisation was in a better
position to develop the land and hence. the potentiality of
the land in its hands was greater.
With respect to learned Judges of the High Court who
delivered the impugned judgment, in our opinion, the view
taken by them cannot be sustained. In land acquisition
proceedings compensation has to be fixed on the basis of a
hypothetical sale at or about the time of the notification
under section 4 of the Land Acquisition Act of similar land
by a willing seller to a willing buyer. there being no other
factors like urgent need of money or urgent need of the land
for a special purpose and so on which might depress or
augment the price. In determining this compensation the
ability of a particular party or his lack of ability to
develop the land and to realise its potential. cannot be
regarded as a relevant circumstances. The High Court. there-
fore, was in error in placing great reliance of the afore-
said circumstances in determining the value of the land for
fixing the compensation.
129
We would have proceeded to determine the compensation
ourselves but for the fact that the appellants have failed
to furnish any material on record of this Court on which we
can fix the proper compensation nor have any arguments been
advanced before us in that regard. In these circumstances,
we set aside the impugned judgments and orders and remand
the appeals to the Delhi High Court for determination of the
proper compensation for the lands acquired in accordance
with law. The appeals are accordingly allowed. There will be
no order as to costs.
G.N. Appeals allowed.
130