DY. CHIEF ENGINEER (CONSTRUCTION) WESTERN RAILWAY vs SANGADIA RAMESHBHAI MOTIYABHAI

C/FA/2074/2019 JUDGMENT DATED: 03/11/2026
(GJHC240774212018)
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2074 of 2019

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE DIVYESH A. JOSHI

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Approved for Reporting Yes No
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DY. CHIEF ENGINEER (CONSTRUCTION) WESTERN RAILWAY
Versus
SANGADIA RAMESHBHAI MOTIYABHAI & ORS.
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Appearance:
MR ANAL S SHAH(3988) for the Appellant(s) No. 1
KURVEN K DESAI(7786) for the Defendant(s) No. 1
MS.DILBUR CONTRACTOR(6388) for the Defendant(s) No. 1
MR. MAYANK CHAVDA, AGP for the Defendant(s) No. 2,3
VIDIT S SHARMA(7365) for the Defendant(s) No. 1
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CORAM: HONOURABLE MR. JUSTICE DIVYESH A. JOSHI

Date : 03/11/2026

ORAL JUDGMENT
1) By way of filing the present appeal under Section 54 of the
Land Acquisition Act, 1894, read with Section 96 of the Code of
Civil Procedure, the appellant has challenged the legality, validity
and propriety of the judgment and award dated 04.07.2018
passed by the learned Principal Senior Civil Judge, Dahod, in
Reference Case No. 42 of 2011, whereby the Reference Court
partly allowed the reference and awarded compensation at the
rate of Rs. 348/- per square meters, along with proportionate
costs, interest and other statutory benefits.
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2) The case of the appellant herein is the original respondent
whereas respondents are the original claimants. Necessary facts
for adjudication of the issue involved in the matter are discussed
herein under:
2.1) The original claimants are the landowners affected by the
acquisition of their agricultural land situated at village Gamla, Tal.
& Dist. Dahod. The State Government had issued Notification
under Section 4 of the Act came to be published on 18.05.2009
declaring the intention of acquisition of land specified in the
schedule for public purpose for construction of new Railway Line
between the Dahod and Indor (MP). The said Notification was
followed by Notification under Section 6 of the Act which was
published on 27.07.2009. The interested persons, mainly affected
landowners, were served with the notice under Section 9(3)(4) of
the Act by the Special Land Acquisition Officer seeking objection
from them. At the end of the proceedings, the Special Land
Acquisition Officer had determined the amount of compensation
at the rate of Rs. 11/- per square meters for the acquired lands by
passing appropriate orders under Section 11 of the Act. The
original claimant being aggrieved and dissatisfied with the
aforesaid amount of compensation as determined by the Special
Land Acquisition Officer had preferred application on 11.08.2010
within the prescribed period of limitation which was forwarded
to the Reference Court and which ultimately culminated into
Reference Case Nos. 5 of 2011 to 22 of 2011. All the aforesaid
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cases were heard together and decided by the learned Judge by
common impugned judgment and award dated 04.07.2018. The
learned Principal Senior Civil Judge, Dahod, vide the impugned
judgment and award, partly allowed the claim petition and
awarded proportionate costs along with all consequential
benefits. Hence, the present appeal has been preferred by the
Railways under Section 54 of the Act.
3) Heard learned advocate Mr. Anal S. Shah for the appellant,
learned advocate Mr. Vidit S. Sharma for Defendant No. 1 and
learned AGP Mr. Mayank Chavda for Defendant Nos. 2 and 3.
4) Learned advocate Mr. Anal S. Shah for the appellant –
Railway Administration has, at the outset, invited our attention to
the reasons assigned by the Reference Court. According to
learned advocate, the Reference Court has not undertaken any
independent exercise to determine the correct market value but
has rather chose to refer and rely upon the judgment passed by
the Reference Court in Land Reference Case No. 89 of 1990,
which pertains to acquisition of land situated in Dahod Town
which is a different village. Learned advocate has placed on
record the comparative chart of the details of the aforesaid case,
as well as list of evidence produced by the claimants in the
present matter. He has further pointed out that so far as the
acquisition of land of LAR Case No. 89 of 1990 was concerned,
the same was altogether for a different public purpose as
compared to the present acquisitions the said lands have been
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acquired for construction of new railway line between Dahod and
Indore (MP). He further submits that in fact the Reference case
upon which reliance has been placed by the Reference Court,
wherein Notification under Section 4 had been issued by the
competent authority, wayback in the year 1988 whereas in the
present case, Notification had been issued on 18.05.2009. He
further submits that the Special Land Acquisition Officer had
determined the market value in the aforesaid cases at the rate of
Rs. 25/- per square meters., which was enhanced to Rs. 95/- per
square meters by the Reference Court. He has fairly pointed out
that the aforesaid order of the Reference Court was not taken in
appeal. He has submitted that in the case of acquisition of land
situated at village Punsari, which was acquired for the different
public purpose for construction of State Sales Tax Check Post.
The said property was situated in Punsari village and acquiring
proceedings have been carried out by the authority concerned in
the year 1988 and there was a huge gap of 20 years. It is
submitted that it is settled law that applying annual increase was
therefore, highly unsafe. He has further pointed out that a copy
of the said judgment and award passed in LAR Case Nos. 226 of
2004 to 230 of 2004 dated 19.04.2006 for the adjoining village
Punsari, Tal: Dahod was produced by the original claimants at
Exh. 17. The said judgment and award had been assailed by
preferring an appeal before this Court and the said appeal had
been dismissed by the judgment dated 09.01.2014 and had
confirmed the enhanced compensation awarded by the
Reference Court at the rate of Rs. 175/- per square meters in
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respect of land of the adjoining village Punsari. By referring to
the aforesaid facts, learned counsel has emphasized on the fact
that the learned Judge committed serious error in not
appreciating the fact that the earlier award was passed based on
the award passed in the case of acquisition of land situated
within the limits of Dahod Town whereas the lands which are
situated in the interior part of the Dahod precisely within the
limits of village Gamla the said lands were abutting on the State
National Highway. He has further submitted that as such no
reason has been assigned by the Reference Court by comparing
nature and potentiality of the lands which are altogether situated
in different villages. In such circumstances, the judgment passed
in the aforesaid Land Reference Case could not be treated as a
comparable instance for the purpose of determination of market
value of the lands acquired in the present case. He has heavily
placed reliance upon the principles of law laid down by the
Hon’ble Supreme Court in various judgments as under:
(1) Kanwar Singh and others reported in (1998) 8 SCC 136.
(2) General Manager Oil and Natural Gas Corporation
Limited vs. Rameshbhai Jivanbhai Patel and Another reported
in (2008) 14 SCC 745.
(3) Lal Chand vs. Union of India and Another reported in
(2009) 15 SCC 769.
The principles of law laid down in the aforesaid judgments
are squarely applicable to the facts of the present case.
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Therefore, the impugned order passed by the authority
concerned is required to be modified by reducing the amount of
additional compensation awarded by the Reference Court.
5) Learned advocate Mr. Vidit S. Sharma for the respondents-
original claimants has strongly disputed the aforesaid
submissions of the appellant counsel. He had relied upon a
recent decision of the Hon'ble Supreme Court in the case of The
Central Warehousing Corporation Vs. Thakur Dwarka Kalan Ul-
Marruf Barglan Wala (dead) & ors., neutral citation 2023 INSC
940. It was pointed out that the Court had after analyzing various
decisions on issue including the judgment of Rameshbhai
Jivanbhai (supra) had considered 8% annual increase with
cumulative effect, even in the case where there was huge gap of
11 years whereas in the present case the reference court has
simply applied 10% rise as against the proved market value of
previous award. Mr. Sharma had also relied upon decision of this
court in the case of Executive Engineer (Construction) vs.
Shantaben W/O Naginbhai Patel, First Appeal No. 3053 of 2017
and allied matters order dated 08.02.2024. Learned counsel has
placed on record the chart of cumulative annual increase, if
applied in the facts of the case while applying legal principles
would yield even higher market value as compared to what has
been awarded by the Reference Court. He has therefore
submitted that the market value determined by the Reference
Court calls for no interference in the present appeals and has
therefore prayed for dismissal of the appeals. The learned
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advocate has further submitted that, in fact, relying upon the
aforesaid decision, the Reference Court has also determined the
compensation in respect of the village Jalat. The said decision
was also challenged by the Railway authorities by preferring
appeals before this Court, which appeals have also been
dismissed by the Division Bench of this Court. A copy of the said
order has been tendered across the bar, which is directed to be
taken on record.
5.1) He has strenuously submitted that the boundary of village
Gamla touches village Jalat and both the villages are situated
adjacent to each other. Therefore, the same benefits are required
to be extended in favour of the opponents-original claimants. He
has, therefore, submitted that the order passed by the Reference
Court is just, fair, reasonable and legal, and is based upon sound
principles of law, and does not require any interference by this
Court in the present proceedings. He has further urged that the
awarded amount be released and disbursed, as the original
claimants are small and marginal farmers belonging to a tribal
area, whose lands have been acquired and who have been
awaiting compensation for a long time. Therefore, there is no
merit in the present appeal.
6) Having heard the learned advocates appearing for the
respective parties and having considered the material available
on record, before delving into the issues involved in the present
matter, certain factual aspects are required to be placed on
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record.
6.1) The acquiring body has acquired the lands belonging to the
original claimants for a public purpose, namely, construction of a
new railway line between Dahod and Indore (M.P.). In this regard,
the Notification under Section 4 of the Act came to be published
on 18.05.2009, followed by the Notification under Section 6 of
the Act on 27.07.2009. The Special Land Acquisition Officer, after
considering the material available on record, determined the
market value of the acquired lands at the rate of Rs. 11/- per
square meter under Section 11 of the Act. Being aggrieved and
dissatisfied with the meagre amount of compensation
determined by the Special Land Acquisition Officer, the original
claimants preferred reference applications under Section 18 of
the Act, raising various grounds for enhancement of the amount
of compensation. The said applications, along with the relevant
documents, were thereafter forwarded to the Reference Court
for adjudication.
6.2) After considering the material available on record, the
Reference Court partly allowed the references and determined
the market value of the acquired lands at the rate of Rs. 348/- per
square meter, along with proportionate costs, interest and other
statutory benefits. The Reference Court further directed
payment of interest at the rate of 9% per annum from the date
of taking possession or the date of the award, for the initial
period of one year and thereafter at the rate of 15% per annum
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till realisation.
6.3) It is an admitted position of fact that, while determining the
market value of the acquired lands, the Reference Court has
placed considerable reliance upon the judgment and award
passed in Land Reference Case Nos. 226 of 2004 to 230 of 2004
dated 19.04.2006, pertaining to the lands situated in village
Punsari. In the said proceedings, the Reference Court had
determined the market value of the acquired lands at Rs. 199.50
per square meter and awarded enhanced compensation at the
rate of Rs. 175/- per square meter. The said judgment and award
came to be challenged before this Court and the appeals
preferred by the acquiring body were dismissed vide judgment
dated 09.01.2014, thereby confirming the enhanced
compensation awarded by the Reference Court.
6.4) It is required to be noted that the Notification under
Section 4 of the Act in the aforesaid proceedings pertaining to
village Punsari was issued on 16.07.1999. Thus, there was a
considerable time gap of nearly 10 years between the said
Notification and the Notification issued in the present acquisition
proceedings on 18.05.2009. It further appears from the material
available on record that the villages Gamla and Punsari are
situated in close proximity to each other. The geographical
location of both villages is such that they are situated in the
adjoining area. The distance between the two villages is
approximately 2.5 to 3 kilometres. Having regard to the
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geographical location and the surrounding area, it appears that
the lands situated in both villages possess similar characteristics
and potentiality. The surrounding area is also a developing area.
In this regard, it is a well-settled principle of law that an earlier
award passed by the Reference Court in respect of lands situated
in the same village or an adjoining village, which has attained
finality, can be relied upon as a relevant piece of evidence for
determining the market value of similar lands acquired
subsequently.
6.5) The aforesaid principle has also been recognised in the case
of General Manager Oil and Natural Gas Corporation Limited
vs. Rameshbhai Jivanbhai Patel reported in (2008) 14 SCC 745
and Another wherein it has been held that an earlier award
relating to lands situated in the same village or an adjoining
village can be considered as a relevant piece of evidence for
determining the market value of similar lands acquired
subsequently. Applying the aforesaid principle of law to the facts
of the present case, it appears that the Reference Court has
adopted the same approach while determining the market value
of the lands situated in village Gamla. The Reference Court has
considered the earlier award pertaining to the adjoining village
and, after taking into consideration the relevant factors,
determined the market value of the acquired lands.
6.6) Learned advocate appearing for the original claimants has
also brought to the notice of this Court that in fact, the lands
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situated in village Gamla and village Jalat are adjoining each
other and their boundaries touch each other. It is further pointed
out that for the purpose of construction of the railway line
between Dahod and Indore, the lands situated in seven different
villages, namely, Dahod Kasba, Dungarpur, Mandavav, Jalat,
Vanbhori, Gamla and Chandvana, were acquired by the acquiring
authority by issuing Notifications under Section 4 of the Act. All
the aforesaid villages are situated within a distance of
approximately 2 to 2.5 kilometres from each other. So far as the
land reference applications pertaining to villages Jalat, Gamla
and Punsari are concerned, it is submitted that while determining
the market value of the acquired lands, the Reference Court had
relied upon the earlier award passed in respect of village Punsari.
On the basis of the market value determined in the said
proceedings, the Reference Court had determined the
compensation payable to the original claimants whose lands
were situated in the adjoining villages.
6.7) It is further required to be noted that the acquiring body,
being aggrieved by the awards passed by the Reference Court in
respect of the aforesaid villages, had preferred appeals before
this Court. Since the pecuniary value of the compensation
involved in the said matters was beyond the jurisdiction of the
learned Single Judge, the matters came to be placed before the
Division Bench of this Court. The said group of appeals, being
First Appeal No. 3633 of 2017 and allied matters, came to be
decided by the Division Bench of this Court vide judgment dated
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30.07.2024.
6.8) At this juncture, I would like to rely upon and refer to the
observations made by the Division Bench of this Court while
deciding the aforesaid group of appeals. The relevant
observations, particularly those made in paragraphs 7 to 20 of
the said judgment, are required to be referred to and reproduced
hereinbelow:
“7. Looking at the arguments canvassed by the learned counsel for
the railways, more particularly the observations of Hon'ble Supreme
Court made in case of Rameshbhai Jivanbhai Patel, (supra), the
question arises for this court in the present appeals is as to whether
the reference court committed any error in applying methodology of
applying 10% rise annually on the proved market value in the
previous award of the lands of adjoining village.
8. The methodology of applying 10% increase annually on the proved
market value in acquisition proceedings of adjoining villages is a
recognized mode. With a view to arrive at a correct market value of
the acquired land with reference to the date of publication of Section
4 notification, in the case of Special Land Acquisition Officer,
BTDA, Bagalkote v. Mohd. Hanief Sahib Bawa Sahib, (2002) 3 SCC
688 : AIR 2002 SC 1558 , the Hon’ble Supreme Court also worked out
the market value of the acquired land by taking into consideration
the price fixed under an old comparable sale transaction as the base
value and after granting appreciation at the rate of 10% per annum
on every subsequent year.
9. To appreciate the controversy involved in the present appeal,
before delving into the issue, appropriate would be to set out
relevant paragraph Nos. 13 to 16 of the judgment in Rameshbhai
Jivanbhai Patel (supra), which has been heavily relied upon by
learned counsel for the appellant Railway. The emphasis has been
made by referring to following observations of the Hon’ble Supreme
Court:
“13. Primarily, the increase in land prices depends on four factors -
situation of the land, nature of development in surrounding area,
availability of land for development in the area, and the demand
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for land in the area. In rural areas unless there is any prospect of
development in the vicinity, increase in prices would be slow,
steady and gradual, without any sudden spurts or jumps. On the
other hand, in urban or semi-urban areas, where the development
is faster, where the demand for land is high and where there is
construction activity all around, the escalation in market price is
at a much higher rate, as compared to rural areas. In some
pockets in big cities, due to rapid development and high demand
for land, the escalations in prices have touched even 30% to 50%
or more per year, during the nineties.
14. On the other extreme, in remote rural areas where there was
no chance of any development and hardly any buyers, the prices
stagnated for years or rose marginally at a nominal rate of 1% or
2% per annum. There is thus a significant difference in increases
in market value of lands in urban/semi-urban areas and increases
in market value of lands in the rural areas. Therefore if the
increase in market value in urban/semi-urban areas is about 10%
to 15% per annum, the corresponding increases in rural areas
would at best be only around half of it, that is about 5% to 7.5%
per annum. This rule of thumb refers to the general trend in the
nineties, to be adopted in the absence of clear and specific
evidence relating to increase in prices. Where there are special
reasons for applying a higher rate of increase, or any specific
evidence relating to the actual increase in prices, then the
increase to be applied would depend upon the same.
15. Normally, recourse is taken to the mode of determining the
market value by providing appropriate escalation over the proved
market value of nearby lands in previous years (as evidenced by
sale transactions or acquisition), where there is no evidence of
any contemporaneous sale transactions or acquisitions of
comparable lands in the neighbourhood. The said method is
reasonably safe where the relied-on-sale
transactions/acquisitions precedes the subject acquisition by only
a few years, that is upto four to five years. Beyond that it may be
unsafe, even if it relates to a neighbouring land. What may be a
reliable standard if the gap is only a few years, may become
unsafe and unreliable standard where the gap is larger. For
example, for determining the market value of a land acquired in
1992, adopting the annual increase method with reference to a
sale or acquisition in 1970 or 1980 may have many pitfalls. This is
because, over the course of years, the ‘rate’ of annual increase
may itself undergo drastic change apart from the likelihood of
occurrence of varying periods of stagnation in prices or sudden
spurts in prices affecting the very standard of increase.
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16. Much more unsafe is the recent trend to determine the
market value of acquired lands with reference to future sale
transactions or acquisitions. To illustrate, if the market value of a
land acquired in 1992 has to be determined and if there are no
sale transactions/acquisitions of 1991 or 1992 (prior to the date
of preliminary notification), the statistics relating to
sales/acquisitions in future, say of the years 1994-1995 or 1995-
1996 are taken as the base price and the market value in 1992 is
worked back by making deductions at the rate of 10% to 15% per
annum. How far is this safe? One of the fundamental principles of
valuation is that the transactions subsequent to the acquisition
should be ignored for determining the market value of acquired
lands, as the very acquisition and the consequential development
would accelerate the overall development of the surrounding
areas resulting in a sudden or steep spurt in the prices. Let us
illustrate. Let us assume there was no development activity in a
particular area. The appreciation in market price in such area
would be slow and minimal. But if some lands in that area are
acquired for a residential/commercial/industrial layout, there will
be all round development and improvement in the infrastructure/
amenities/facilities in the next one or two years, as a result of
which the surrounding lands will become more valuable. Even if
there is no actual improvement in infrastructure, the potential
and possibility of improvement on account of the proposed
residential/commercial/industrial layout will result in a higher
rate of escalation in prices. As a result, if the annual increase in
market value was around 10% per annum before the acquisition,
the annual increase of market value of lands in the areas
neighbouring the acquired land, will become much more, say 20%
to 30%, or even more on account of the development/proposed
development. Therefore, if the percentage to be added with
reference to previous acquisitions/sale transactions is 10% per
annum, the percentage to be deducted to arrive at a market value
with reference to future acquisitions/sale transactions should not
be 10% per annum, but much more. The percentage of standard
increase becomes unreliable. Courts should therefore avoid
determination of market value with reference to
subsequent/future transactions. Even if it becomes inevitable,
there should be greater caution in applying the prices fetched for
transactions in future. Be that as it may.”(Emphasis supplied)
10. Indisputably, there is no evidence of any comparable sale
transaction of the relevant time of the land available in the
neighborhood. In such circumstances, we have to look for the proved
market value of the land of the adjoining village: Punsari. It is on
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record that with a view to acquire nearby land in the year 1999, a
notification under Section 4 was issued on 16.07.1999, which
culminated in passing of an award. The market value fixed by the
Collector was assailed in reference before the Reference Court, at
Dahod whereby by award dated 09.01.2014 passed in LAR No. 226 of
2004, enhanced and fixed the market value of the acquired land at
Rs. 199.50 ps. per sq. mtrs. There is, thus, a gap of almost ten years.
In view of the observations made by the Supreme Court in paragraph
No. 15 of the Ramesh Bhai Jivianbhai Patel (supra), the mode of
determining the market value on the basis of annual increase from
10 to 15% with cumulative effect would be applicable in a case
where the proved market rate relied on precedes the subject
acquisition by only a few years i.e. upto 4 to 5 years and beyond that
it may not be safe even if the proved market value is in relation to a
nearby land.
11. Thus, reading the aforesaid observations, there is no straight
jacket formula to consider 10% rise annually in each and every case
where the base value of acquired land of adjoining village is proved
and there is a gap of a few years between two notifications.
Essentially surrounding circumstances are equally required to be
taken into consideration to apply annual rise on the proved market
value. We have the benefit of a recent decision of the Hon’ble
Supreme Court, as pointed out by the learned Counsel for the
respondent, the issue has been considered by the Hon'ble Supreme
Court in the case of Central Warehousing Corporation Ltd., (supra). In
the aforesaid decision the Hon'ble Supreme Court after considering
the earlier views rendered, held that to determine just and fair
compensation in cases where comparable sales of the nearby land
are not available, it would be safe to provide increase at market
value of the acquired land @ 8 to 15% and that, too, with cumulative
effect. While holding so strong reliance was placed on the relevant
observations it’s earlier decision in Rameshbhai Jivanbhai Patel
(supra). For our benefit, we would like to refer to the relevant
observations of the Hon’ble Supreme Court in the case of Central
Warehousing Corporation (supra) and are reproduced hereunder:—
“15. The law on the point of annual increase whether on
cumulative basis or non-cumulative basis and the rate of annual
increase to be applied are thus to be considered. Based upon the
same, a balance and equitable compensation needs to be
determined in the present case.
16. The following cases have been relied upon by the parties with
respect to determining the just compensation.
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i) General Manager, Oil and Natural Gas Corporation Limited v.
Rameshbhai Jivanbhai Patel (supra),
ii) Ashrafi v. State of Haryana, (2013) 5 SCC 527
iii) Narbadi Devi v. State of Haryana,
iv) Ramrao Shankar Tapase v. Maharashtra Industrial
Development Corporation,
v) State of Haryana v. Subhash Chander, (2023) 5 SCC 435
17. The case which was referred to by the High Court was
Rameshbhai Jivanbhai Patel (supra). It no doubt referred to
determining compensation on the basis of annual increase with
cumulative effect, but at the same time it had put a caution that
such annual increase can be taken only for 4-5 years as beyond
that it would be unsafe to uniformly apply the same rate for
increase and that too with cumulative effect. Paragraph 15 of the
said judgment may be reproduced here which mentions the
reasons where the gap is of several years, such standards may not
be reliable rather the same may be unsafe.
“15. Normally, recourse is taken to the mode of determining
the market value by providing appropriate escalation over the
proved market value of nearby lands in previous years (as
evidenced by sale transactions or acquisitions), where there is
no evidence of any contemporaneous sale transactions or
acquisitions of comparable lands in the neighbourhood. The
said method is reasonably safe where the relied-on sale
transactions/acquisitions precede the subject acquisition by
only a few years, that is, up to four to five years. Beyond that
it may be unsafe, even if it relates to a neighbouring land.
What may be a reliable standard if the gap is of only a few
years, may become an unsafe and unreliable standard where
the gap is larger. For example, for determining the market
value of a land acquired in 1992, adopting the annual increase
method with reference to a sale or acquisition in 1970 or 1980
may have many pitfalls. This is because, over the course of
years, the “rate” of annual increase may itself undergo drastic
change apart from the likelihood of occurrence of varying
periods of stagnation in prices or sudden spurts in prices
affecting the very standard of increase.”
18. In the said case, after laying down the caution, this Court
awarded cumulative annual increase at the rate of 7.5% for a
period of five years.
19. In the case of Ashrafi (supra), this Court amongst many issues,
considered the issue of applying annual increase cumulatively for
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determining just compensation. It also considered the law laid
down in the case of Rameshbhai Jivanbhai Patel (supra) and
many other judgments on the said point. It applied formula of
12% annual increase cumulatively for a period of five years. The
base rate being of the year 1987 whereas the acquisition in
question being of 1993.
20. We will also refer to order dated 22.08.2014 in the case of
Narbadi Devi (supra) which relied upon the judgment in the case
of Ashrafi (supra) and accepted the annual increase of 12%
cumulatively. The High Court in the said case had although
followed the dictum in the judgment of Ashrafi (supra), however,
the annual increase of 12% was granted at a flat rate by the High
Court and not cumulatively. This Court accordingly had modified
the order of the High Court to the aforesaid extent that 12%
annual increase would be cumulative.
21. Recently, in the year 2022, this Court in the case of Ramrao
Shankar Tapase (supra) citing the judgment in the case of
Rameshbhai Jivanbhai Patel (supra) and other similar matters,
awarded annual increase cumulatively at the rate of 12% for a
period of three years. The High Court in the said case had applied
annual increase cumulatively at the rate of 10%.
22. The latest judgment is of 2023 in the case of Subhash Chander
(supra). In this case, the Court held that rate of annual increase
could vary from 8% to 15% per year. However, considering the
facts of the said case, this Court had awarded 10% annual
increase cumulatively for a period of two years only.
23. From the above, we notice that the consistent view taken by
this Court for awarding annual increase to determine the just
compensation varies from case to case and the period to be
applied is a major factor to be considered. In the present case, the
period is 11 years which is pretty large as compared to the time
period considered in the cases referred to above.”
24. Taking an overall view in the matter and the consistent view
of this Court, the fair and reasonable compensation in the present
case would be best determined if we apply 8% annual increase
with cumulative effect. This is for the reason that the gap is huge
i.e. 11 years. For shorter period of 3-5 years, it could have been
10% or 12%. But in no case 15% would be justified for a period of
11 years as awarded by the High Court in the impugned order. In
the present case, given the 11 years gap, 8% would be considered
just and proper.”
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12. In view of the aforesaid legal position clarified by the Hon’ble
Supreme Court in Central Warehousing Corporation (supra), it is now
trite law that where gap between the subject acquisition and the
transaction that proves market value is more than five years, it is not
safe to award increase in the market value of the acquired land
@15%, that too, with cumulative effect. It would, thus, depend on
the facts and circumstances of the case and would be further
reduced depending upon the length of gap between the two
situations.
13. Having applied the aforesaid principles in the facts of the case on
hand, in order to determine just and fair compensation, the Court is
thus required to take into consideration the relevant factors as
indicated in Section 23 of the Act. The Four factors, that is, (i)
situation/location of the land, (ii) nature of development in the
surrounding area, (iii) availability of land for development in the
area, and (iv) the demand for land in the area. Keeping the aforesaid
factors in mind and, in the absence of any concrete evidence on
record, in particular, availability of comparable sale deeds of the land
in the area executed during the relevant period when Section 4
notification was issued, We are persuaded to follow one of the
methodology adopted by the Courts viz. to take the proved market
value of the nearby land in previous years as the base value and then
determine market value by considering 10% annual increase.
14. From a reading of the testimony of the respondent claimant at
EXH. 13, following facts be said to have been proved:—
a) That the acquired lands are situated in village Jalat which is
situated in the limits of Taluka and District Dahod.
b) That the exemplar of Land reference award dated 31.03.2014,
passed by the Reference Court, Dahod in LAR No. 223/2004 and
224/2004 of acquired lands of Dahod (kasba) determines the
market of such acquired lands of Dahod (kasba) at the rate of Rs.
200 per sq. mrts.
c) Also, exemplar of Land reference award dated19.04.2006
passed by the Reference Court, Dahod in adjoining village:
Punsari, determines award of Rs. 200 per sq. mrts.
d) The Village Jalat is situated near the Taluka as well as the
headquarters of District Dahod. It is hardly 3 to 4 Kms. away from
the city of Dahod and around 6 km from headquarters of District
Dahod. It is admitted that village Punsari is adjoining village
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Jalat.
e) Though the witness has been unable to clarify the particulars
of national highway which he claims to pass through, the fact
remains that Dahod Indore National Highway passes through
village Jalat and it connects to headquarter Dahod.
15. The aforesaid evidence gets corroboration from the Map
produced on record at EXH. 30. The award dated 19.04.2006 in
respect of lands acquired from village Punsari, passed by the
reference Court, Dahod in the LAR No. 226 of 2004 to 230 of 2004 is
also placed on record at EXH. 31. It is, thus, evident from the reading
of the aforesaid award that the land of village: Punsari is situated in
the sim of Dahod, which was acquired for the purpose of a sales tax
check post and is situated on Dahod Indore Highway. Again, in the
said reference case, the Court has relied upon previous awards
passed in Land reference case No. 89 of 1990 which was in respect of
lands acquired in the outskirts of Dahod Town.
16. As against the aforesaid evidence of the claimants, except for
oral evidence no cogent material has been brought on record by the
respondents namely the Special Land acquisition office nor the
acquiring body- railways. The respondent have though placed on
record the report of District Land Pricing committee, however, the
same has not been proved through his witness. The Deputy Collector
who has been examined as witness is not even aware about the
situation of lands acquired.
17. Upon overall appreciation of the evidence placed for
consideration, the only comparable exemplar which has been
brought on record is the award dated 19.04.2006 passed by the
Reference Court, Dahod in LAR No. 226 of 2004 in case of acquisition
of land in village: Punsari. It is an undisputed fact that section 4
notification was issued 18.05.2009 and the market value was
determined as Rs. 199.50 ps. per sq. mrts. It is true that the market
value in the said case was determined again on the basis of an award
dated 03.08.2002 passed by the Reference Court, Dahod in LAR No.
89 of 1990 which pertained to acquisition of lands situated in Dahod
town, by applying a 10% rise annually from the date of notification
in the previous year.
18. In the instant case, there is admittedly a gap of nine years and
ten months and, therefore, having regard to the guidelines laid down
in the aforesaid judgments and also the special factors existing in the
instant case, the enhancement to the market rate of acquired land @
8% with cumulative effect could have been applied then the actual
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market value which would have arrived been comes to more than
what is awarded by the impugned award. We would like to reproduce
the calculation to have a fair idea about market value which would
have arrived at Rs. 425.36 ps. instead of Rs. 389 per sq. mrts. viz. by
applying cumulative annual increase at the rate of 8% instead of
simple 10% rise annually.
16.07.1999 199.50
16.7.2000 215.46
16.7.2001 232.70
16.7.2002 251.31
16.7.2003 271.42
16.7.2004 293.16
16.7.2005 316.58
16.7.2006 341.91
16.7.2007 369.26
16.7.2008 398.80
16.7.2009 425.36 10 months
19. However, since the acquiring body is in appeal and not the
claimants, we resist to not to consider any prayer for enhancement
of award in absence of any cross objections or cross appeals. On
overall appreciation of the case, we find no good reason to interfere
with the impugned judgment and award. According to us, the
reference court has passed just and fair compensation which meet
the ends of justice. The special factors which existed in this case as
discussed earlier draws us to infer that the lands are situated in the
vicinity of a developed area and have potential to develop in near
future. We also take judicial notice of the fact that with the
existence of the nearby National Highway connecting to Dahod City
as well as proximity with the headquarter of District Dahod, are
sufficient factors to arrive at conclusion that the subject lands
acquired are situated in a developing area which is likely to fetch
steep rise in the market value of land in the future period.
20. For the foregoing reasons, we do not find any merits in the
submissions made by learned counsel for the appellant - Railways
and the appeals are therefore not entertained and are hereby
dismissed. The Reference Court is directed to release and disburse the
award amount as lying in the fixed deposit receipts in favour of the
respective claimants within a period of eight weeks from the date of
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receipt of certified copy of this order, after due verification and
through account payee cheques. Interim relief stands vacated.”
It is an admitted position of fact that the acquiring body
had challenged the aforesaid judgment and award before the
Division Bench of this Court. However, the judgment delivered by
the Division Bench has attained finality. It is further required to
be noted that the amount of compensation determined in the
aforesaid proceedings has also been complied with by the
acquiring body by making payment to the concerned original
claimants.
7) Having regard to the geographical location of village Gamla,
which is situated adjacent to village Jalat, and considering the
fact that the Reference Court has determined the market value
of the acquired lands by adopting the same principles of law, this
Court finds that there is no substantial difference in the nature
and potentiality of the lands involved in the aforesaid
proceedings. The award passed by the Reference Court in respect
of village Jalat has also been examined by this Court and the
same has been confirmed in the aforesaid group of appeals
decided by the Division Bench.
8) I have also verified the record and proceedings and after
consideration of the material available on record, I am of the
opinion that the judgment and award passed by the Reference
Court are just, fair, reasonable and legal and do not call for any
interference. It is required to be noted that while deciding the
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aforesaid first appeals, the Division Bench of this Court had also
prepared a comparative chart by taking into consideration the
Notifications issued under Section 4 of the Act on 16.07.1999 and
18.05.2009. On the basis of the comparative chart and the annual
increase considered therein, the market value of the acquired
lands, as on the date of the subsequent Notification, was worked
out at Rs. 425.36/- per square meter.
8.1) It is also pertinent to note that the acquiring body had
challenged the awards passed by the Reference Court by
preferring appeals, whereas the original claimants had not
preferred any cross-appeals seeking further enhancement of the
amount of compensation. Therefore, the Division Bench, while
examining the appeals preferred by the acquiring body, had
considered the material available on record and the comparative
market value of the acquired lands.
8.2) Having considered the aforesaid aspects, I do not find any
reason to interfere with the impugned judgment and award
passed by the Reference Court. I am of the considered view that
the Reference Court has passed a just, fair, reasonable and legal
award of compensation, which meets the ends of justice. The
special factors prevailing in the present case, as discussed
hereinabove, also lead this Court to infer that the acquired lands
are situated in the vicinity of a developed area and have
considerable potential for future development. The availability of
a National Highway in close proximity to the acquired lands,
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connecting the area with Dahod city, as well as the surrounding
development, are relevant factors which cannot be overlooked
while determining the market value of the acquired lands. The
aforesaid circumstances are sufficient to arrive at the conclusion
that the acquired lands are situated in a developing area and
possess considerable potential for future development. Such
potentiality is also a relevant consideration while determining
the market value of the lands acquired by the acquiring body.
9) For the foregoing reasons and having regard to the overall
facts and circumstances of the case, the settled principles of law
and the material available on record, I do not find any merit in the
present appeals. The judgment and award passed by the
Reference Court do not warrant any interference by this Court.
Accordingly, the present appeal stands dismissed.
The Office is directed to send back Record and proceedings
to the concerned Tribunal forthwith.
(DIVYESH A. JOSHI,J)
GARVITA

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