Full Judgment Text
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CASE NO.:
Appeal (civil) 9205-07 of 2003
Special Leave Petition (civil) 7407-09 of 2003
PETITIONER:
The Land Acquisition Officer, Nizamabad, District, Andhra Pradesh
RESPONDENT:
Nookala Rajamallu and Ors.
DATE OF JUDGMENT: 21/11/2003
BENCH:
DORAISWAMY RAJU & ARIJIT PASAYAT.
JUDGMENT:
J U D G M E N T
ARIJIT PASAYAT,J
Leave granted.
Lands of the respondents (hereinafter referred to as the
’claimants’) measuring 11.33 acres situated in Kammarpally village,
Nizamabad District were acquired by the Government for providing house
sites to weaker sections of people. The Notification under Section 4(1)
of the Land Acquisition Act, 1894 (for short the ’Act) was gazetted on
4.6.1988. The claimants owned small extent of lands situated in
different survey numbers. The Land Acquisition Officer (in short the
’LAO’) passed an award fixing the market value of the acquired land at
Rs.12,325 per acre. Not accepting the compensation awarded by the LAO
claimants sought for reference under Section 18 of the Act for
enhancement. The Reference Court after considering the evidence, both
oral and documentary, awarded compensation at the rate of Rs.10/- per
sq. yard besides awarding the statutory benefits available. Before the
Reference Court, several instances of sales were pressed into by the
claimants. Ex.B/2 dated 18.6.1986 was for an extent of land measuring
170 sq.yards. The Ex.B/3 related to an award of the year 1981 whereunder
Rs.9/- was awarded as compensation per square yard. Ex.B/4 is the sale
deed dated 23.1.1988 where extent of land was 162 square yards, and the
rate of consideration was Rs.82/- per sq. yard. Ex.B/5 is in respect of
sale deed of 9.9.1985 where the extent of land was 127.5 square yards,
and the sale consideration was Rs.109/- per sq. yard. Claimants being
still not satisfied with the enhanced compensation filed an appeal
before the Andhra Pradesh High Court. A Division Bench of the said Court
by the impugned judgment held that the market value payable to the
claimants was to be taken at Rs.55/- per sq. yard.
Taking into account the extent of land covered by the exemplar
sale deeds and the award made in respect of acquisition during the year
1981 the High Court was of the view that the instances of sales were
comparable sales in respect of the lands under acquisition. Focusing of
the sale consideration of the instance covered by Ex.B/4, and making
1/3rd deduction for development, the value was fixed at Rs.54/- per sq.
yard. As there was time gap of five months between Ex. B/4 and the
notification, the escalation was taken to be Rs.1/- per sq. yard.
Accordingly, the rate of Rs.55/- per sq. yard was fixed and the
statutory entitlements were also directed to be paid.
Learned counsel for the appellant submitted that the High Court
did not take note of the relevant aspects like the extent of land
covered by the Exhibits, and the proximity between the dates of sales
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and the date of acquisition, and more importantly the fixation of rates
per square yard in respect of acquisition in 1981. According to him, had
these factors been considered, the rate could not have been as high as
fixed by the High Court.
Per contra, Mrs. K. Amreshwari, learned senior counsel appearing
for the respondents-claimants submitted that the High Court has adopted
a right approach in fixing the rates. The instances of sales related to
lands which were situated at a close proximity to the acquired land. The
instance of award cited by the appellant related to an interior small
village and did not have the advantages which the acquired lands have.
Where large area is the subject matter of acquisition, rate at
which small plots are sold cannot be said to be a safe criteria.
Reference in this context may be made to few decisions of this Court in
The Collector of Lakhimpur v. Bhuban Chandra Dutta (AIR 1971 SC 2015),
Prithvi Raj Taneja (dead) by Lrs. v. The State of Madhya Pradesh and
Anr. (AIR 1977 SC 1560) and Smt. Kausalya Devi Bogra and Ors. etc. v.
Land Acquisition Officer, Aurangabad and Anr. (AIR 1984 SC 892).
It cannot, however, be laid down as an absolute proposition that
the rates fixed for the small plots cannot be the basis for fixation of
the rate. For example, where there is no other material it may in
appropriate cases be open to the adjudicating Court to make comparison
of the prices paid for small plots of land. However, in such cases
necessary deductions/adjustments have to be made while determining the
prices.
In the case of Suresh Kumar v. Town Improvement Trust, Bhopal
(AIR 1989 SC 1222) in a case under the Madhya Pradesh Town Improvement
Trust Act, 1960 this Court held that the rates paid for small parcels of
land do not provide a useful guide for determining the market value of
the land acquired. While determining the market value of the land
acquired it has to be correctly determined and paid so that there is
neither unjust enrichment on the part of the acquirer nor undue
deprivation on the part of the owner. It is an accepted principle as
laid down in the case of Vyricherla Narayana Gajapatiraju v. Revenue
Divisional Officer, Vizagapatam (AIR 1939 P.C. 98) that the compensation
must be determined by reference to the price which a willing vendor
might reasonably expect to receive from the willing purchaser. While
considering the market value disinclination of the vendor to part with
his land and the urgent necessity of the purchaser to buy it must alike
be disregarded. Neither must be considered as acting under any
compulsion. The value of the land is not to be estimated as its value to
the purchaser. But similarly this does not mean that the fact that some
particular purchaser might desire the land more than others is to be
disregarded. The wish of a particular purchaser, though not his
compulsion may always be taken into consideration for what it is worth.
Section 23 of the Act enumerates the matters to be considered in
determining compensation. The first criteria to be taken into
consideration is the market value of the land on the date of the
publication of the notification under Section 4(1). Similarly, Section
24 of the Act enumerates the matters which the Court shall not take into
consideration in determining the compensation. A safeguard is provided
in Section 25 of the Act that the amount of compensation to be awarded
by the Court shall not be less than the amount awarded by the Collector
under Section 11. Value of the potentiality is to be determined on such
materials as are available and without indulgence in any fits of
imagination. Impracticability of determining the potential value is writ
large in almost all cases. There is bound to be some amount of guess
work involved while determining the potentiality.
It can be broadly stated that the element of speculation is
reduced to minimum if the underlying principles of fixation of market
value with reference to comparable sales are made:
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(i) when sale is within a reasonable time of the
date of notification under Section 4(1);
(ii) it should be a bona fide transaction;
(iii)it should be of the land acquired or of the land
adjacent to the land acquired; and
(iv) it should possess similar advantages.
It is only when these factors are present, it can merit a
consideration as a comparable case (See The Special Land Acquisition
Officer, Bangalore v. T. Adinarayan Setty (AIR 1959 SC 429).
The evidence of record shows that the acquired lands were
agricultural lands. Obviously, their valuation would differ to a
considerable extent from the land used for house sites. In such a case,
necessary deductions for the extent of land acquired for the formation
of roads and other civic amenities, expenses of development of the sites
by laying out roads, drains, sewers, water and electricity lines, and
the interest on the outlays for the period of deferment of the
realization of the price, the profits on the venture etc. are to be
made. (See Administrator General of West Bengal v. Collector, Varanasi
(1988 (2) SCC 150). In Brig. Sahib Singh Kalha and Ors. v. Amritsar
Improvement Trust and Ors. (1982 (1) SCC 419) the deduction for such
development was taken as 53%.
In K.S. Shivadevamma and Ors. v. Assistant Commissioner and Land
Acquisition Officer and Anr. (1996 (2) SCC 62) this Court held as
follows:
"it is then contended that 53% is not automatic but
depends upon the nature of the development and the
stage of development. We are inclined to agree with
the learned counsel that the extent of deduction
depends upon development need in each case. Under the
Building Rules 53% of land is required to be left
out. This Court has laid as a general rule that for
laying the roads and other amenities 33-1/3% is
required to be deducted. Where the development has
already taken place, appropriate deduction needs to
be made. In this case, we do not find any development
had taken place as on that date. When we are
determining compensation under Section 23(1), as on
the date of notification under Section 4(1), we have
to consider the situation of the land development, if
already made, and other relevant facts as on that
date. No doubt, the land possessed potential value,
but no development had taken place as on the date. In
view of the obligation on the part of the owner to
hand over the land to the City Improvement Trust for
roads and for other amenities and his requirement to
expend money for laying the roads, water supply
mains, electricity etc., the deduction of 53% and
further deduction towards development charges @33-
1/3%, ordered by the High Court, was not illegal".
On applying the principles of law as set out in various decisions
referred to above to the facts of the case we feel that deduction at the
rate of 53% from the value indicated in Ex.B/4 would bring the rate per
square yard to be around Rs.40/-. The rate is accordingly fixed. The
claimants shall be entitled to compensation at the rate of Rs.40/- per
sq. yard along with statutory entitlements including interest on
solatium. The appeals are allowed to the aforesaid extent. Costs made
easy.
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