Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 11
PETITIONER:
FOOD CORPORATION OF INDIA THROUGH ITS DISTRICTMANAGER, FARID
Vs.
RESPONDENT:
MAKHAN SINGH AND ANR. ETC.ETC.
DATE OF JUDGMENT21/04/1992
BENCH:
PUNCHHI, M.M.
BENCH:
PUNCHHI, M.M.
AGRAWAL, S.C. (J)
CITATION:
1992 AIR 1406 1992 SCR (2) 615
1992 SCC (3) 67 JT 1992 (4) 1
1992 SCALE (1)928
ACT:
Land Acquisition Act, 1894 :
Sections 4,6,11,15,18,23,24,25,50 and 54-Land acquisi-
tion for Company (Food Corporation of India)-Award-Reference
court holding company’s reference barred under Section
50(2)-Reference of claimants-Company keen contestant-Compen-
sation enhanced-Appeals by Company-Whether maintainable.
Compensation-Determination of -Factors for considera-
tion.
Constitution of India, 1950:
Article 136-Land-Acquisition of_Award_Reference court
enhancing compensation-High Court upholding enhancement but
on different grounds-Supreme Court-When can interfere and
modify compensation.
HEADNOTE:
The State of Punjab acquired for the Food Corporation
of India (F.C.I.), land measuring a little over 50 acres
situated in the revenue estate of village Danewala near
malout town in District Faridkot. Notifications under sec-
tions 4 and 6 of the Land Acquisition Act, 1894 were issued
on 20.12.1977. The District Collector awarded compensation
at the rate of Rs.30,000 per acre and below, according to
the quality of land. Both, the land owners and the F.C.I.,
moved for reference under section 18 of the Act.
The reference court held the references by the F.C.I.
barred under the proviso to section 50 (2) of the Act. As
regards the references of the land owners, the court relied
on two instances of sale, Ext.A-23 dated 6.6.1979 at the
rate of Rs. 1.20,000 per acre and Ext. A-16 dated 30.6.1981
at the rate of Rs. 2,40,000 per acre. The court considered
the sale Ext-A--23 closer in time and situation to the land
acquired, and fixed the compensation at the uniform rate of
Rs.1,20,000 per acre. It also held that the two
616
sale instances Exts.A-16 and A-23 revealed the average price
of Rs. 1,80,000 per acre and since those transactions took
place after the notification under s.4 1/3 of the average
price was to be deducted towards roads and parks, and thus
market value would again come to Rs.1,20,000 per acre. It
also awarded 30% solatium and statutory interest.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 11
Two sets of appeals one by the claimant for enhancement
of compensation and the other by F.C.I. for reduction of
compensation were filed before the High Court. The Single
judge dismissed all the appeals and affirmed the compensa-
tion awarded by the court below. He concluded that since the
land under sale instance Ext.A-24 at the rate of Rs.1,40,000
had a better access, the compensation for the land acquired
was rightly fixed at the rate of Rs. 1,20,000 per acre.
Consequent Letters Patent Appeals by the F.C.I. and the land
owners were also dismissed by the Division Bench. It relied
on sale instances Ex.A.11 dated 18.12.1978 at the rate of
Rs.96,800 per acre and Ext. A-23 dated 6.6.1979 at the rate
of Rs. 1,20,000 per acre, and upheld the compensation award-
ed by the courts below. The F.C.I. and the claimants further
appealed to this court by special leave.
The land owners, besides challenging the judgments of
the courts below on merits , also raised a preliminary
objection to maintainability of the appeals by F.C.I. It was
contended that in view of proviso to s.50(2) of the Land
Acquisition Act, Which debars the local authority or company
from demanding reference under s.18, the F.C.I. could not
file appeals against the award of the court.
Allowing the appeals of the F.C.I. and dismissing those
of the land owners, this Court.
HELD: 1.1. Food Corporation of India was a keen
contestant before the reference court. Having suffered the
award from the court, it had the right to file an appeal to
the High Court under s.54 of the Land Acquisition Act, 1894.
[p.622 c]
1.2 Limitation on the right of the F.C.I. to ask for a
reference under s.18 only meant that it could not seek
reduction of compensation as awarded by the Collector be-
cause it was an offer by the State. Section.25 is also a
pointer to the effect that compensation can in no event be
less than the amount awarded by the Collector. Conversely,
subject to provisions of s.25, there being no bar for en-
hancement of compensation
617
from the sum awarded by the Collector, the appeals of the
F.C.I in the very nature of things, attacked the amount
awarded by the court over and above the amount awarded by
the Collector. [p.622 D-E]
1.3. In the references sought by the land owners, they
themselves impleaded the F.C.I. and the State of Punjab as
contesting parties. No objection was made before the High
Court with regard to maintainability of appeals referred by
the F.C.I. Besides, in presence of the power of this Court
to permit any person to appeal, as envisaged by Article 136
of the Constitution, the objection cannot be allowed to be
raised for the first time at such a belated stage. [pp. 622
C; F-G]
2.1. This Court as the last court of appeal, will
ordinarily not interfere in an award granting compensation
unless there is something to show not merely that on the
balance of evidence it is possible to reach a different
conclusion, but that the judgement cannot be supported by
reason of a wrong application of principle or because some
important point affecting valuation has been over-looked or
misapplied. Besides, generally speaking, the appellate court
interferes not when the judgement under appeal is not right
but only when it is shown to be wrong. [p. 627 A-B]
The Dollar company, Madras v. Collector of Madras,
[1975] 2 S.C.C.730, relied on.
2.2. In the instant case, important points affecting
valuation had been overlooked or misapplied in arriving at
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 11
and sticking to the rate of compensation at Rs.1,20,000 per
acre which would require a correction.[p.629 C]
2.3. While determining the amount of compensation,
market value of the land on the date of notification under
s.4 must be considered. Court should not treat at par land
situated on the frontage having special advantage and the
land situated in the interior undeveloped area nor should
they compare smaller plots fetching better price with large
tracts of land. Somewhere in the process, where difficulties
crop up, the courts employ the rule of thumb, since
compensation has to be assessed and arms cannot be raised in
despair. [pp. 621 C-E; 627 C]
Periyar and Pareekanni Rubbers Ltd v. State of Kerala,
A.I.R. 1990 S.C. 2192, relied on.
2.4. Out of the three sale instance Exts.A-11, A-16 and
A-23, chosen
618
at one stage or the other by the courts below for considera-
tion none exceeded 1/8 of an acre. These plots are nearer to
Malout town and are facing G.T. Road. [pp. 623 E; 627 D-F]
2.5. Sale Ext.A-16 took place about 3-1/2 year after
the date of notification. It, having been discarded at both
stages before the High Court and being used by the reference
court only as a supporting material to grant compensation at
the rate of Rs.1,20,000 per acre on the basis of sale
Ext.A-23, should be totally ruled out from consideration
because it was too distant in point of time. Having discard-
ed the same, the supporting foundation to maintain sale
price at the rate of Rs.1,20,000 per acre either on the
basis of Ext.A-23 or Ext.A-24, Become shaky and open to
question. [p.628 C-F]
2.6. Sales Ext.A-11 as well as Ext.A-23 took place
after a year and a year and half respectively from the date
of s.4 notification. They are at an advantageous position
being on the G.T. Road as compared to land under acquisition
which has no such access and is of a large area. These sales
have as such no positive role to play. If at all, some role
is due to Ext.A-11, which is closest in point of time, and
distance wise more close to Malout town, and on account of
its situation. It indicates that for a small plot of 1/2
Kanal (1/16th of an acre) at an advantageous position on
G.T.Road the rate was Rs.96,000 per acre a year after the
date of the notification under s.4 [pp.628 F-H; 629 A]
2.7. In the facts and circumstances of the case,
compensation for the land under acquisition must in
comparison get lower than the price at which sale Ext.A-11
took place, but at a figure which does not overlook the rate
as given in award Ext.A-24. The court would now lift the
thumb and put it to reduce the compensation at Rs.80,000 per
acre slicing down 1/6th (roundedly) from the rate reflective
from sale instance Ext.A-11 and 1/3rd from the rate of Rs.
1,20,000 as deduced from award Ext.A-24, because of the poor
locale, disadvantageous position and lack of contiguity to
the expansion of Malout town due to the obstructing railway
line. Compensation at the rate of Rs.80,000 per acre would
be just and fair. [p. 629 D-E]
3.1. The purpose of the Land Acquisition Act is to
empower the Government to acquire land only for public
purposes or for a company, and, where it is for a company,
the acquisition is subject to provisions of Part-VII. The
Act is neither a tool in the hands of the government to
deprive any person of his land without payment of its
market value,
619
solatium at the prescribed rate and statutory interest,
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 11
nor a bonanza to a land owner whose land has been acquired,
permiting him to get a fanciful inflated price.[p.621 A-B]
3.2 It is the bounden duty of the court while
ascertaining compensation to see that it is just, not merely
to the individual whose property is taken, but to the public
which is to pay for it, even if it be a public corporation
set up for public needs. [p.621 E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1711-
1737 of 1992.
From the Judgment and Orders dated 1.4.91 of the Punjab
and Haryana High Court in L.P.A Nos. 122, 137,136, 134, 223,
221, 220, 220-A, 219, 218, 214 of 1989, 929/90, 131, 130,
121, 135, 128, 133, 129, 127, 139, 125, 138, 123, 132, 126
and 124 of 1989.
G.L. Sanghi and Y.P. Rao for the Appellants.
Rajinder Sachhar, A. Mariarputham and Mrs. Aruna Mathur for
the Respondents.
The judgment of the Court was delivered by
PUNCHHI, J. In this batch of 87 matters,19 are special leave
petitions preferred by the Food Corporation of India through
its District Manager, Faridkot, Punjab, and the remaining by
some claimant-land-owners against the Food Corporation of
India. The dispute is about the correct assessment of the
market value of the land acquired by the state of Punjab for
the Food Corporation of India. Notice was issued to the
contesting parties indicating to them that the matter may
finally be disposed of at the notice stage itself Therefore
these have been heard in full.On behalf of the Food Corpora-
tion of India, Mr. G.L. Sanghi, Sr. Advocate has been heard
and Mr. Rajinder Sachar, Sr. Advocate for the claimant
land-owners. Special leave is granted in all these matters.
Land measuring 400 Kanals 12 Marlas (a little over 50
acres) situated in the revenue estate of village Danewala,
Tehsil Mukstar, District Faridkot,Punjab, was acquired for
construction of food grain godowns. Notifications under
Section 4 and 6 were issued simultaneously on the same day,
that is, 20th December, 1977. The District Collector of
Faridkot on January
620
31,1984 awarded compensation for the acquired land
differentiating between Nehri lands and Barani lands at the
rate of Rs.30,000 per acre and below. Being not satisfied,
the claimant-land-owners moved the Collector, Faridkot, for
references under Section 18 of the Act for enhancement of
compensation. Two references were filed by the Food Corpora-
tion of India as well for reduction. The Additional District
Judge on receipt of the references went into the matter and
held the references by the Food Corporation of India barred
under the Proviso to sub-section(2) of Section 50 of the
Act. In the other references, the Food Corporation of India
as well as State of Punjab were arrayed by the
claimant-land-owners themselves as respondents. The Addi-
tional District Judge after examining the matter awarded a
uniform rate of Rs. 1,20,000 per acre for the land acquired,
vide his award dated on 13.6.86. Since the matter was pend-
ing in the Court of the Additional District Judge when the
Land Acquisition(Amendment) Act, 1984, came into force,
solatium at the rate of 30% was ordered to be paid on the
market value of the land. The claimants were also held
entitled to interest at the rate of 12% per annum from the
date of Notification under Section 4 of the Act to the date
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 11
of the Award of the Collector or from the date of taking
possession whichever is earlier,and from the date of taking
possession till one year thereafter at the rate of 9% per
annum and in the rate of 15% per annum from the date of
expiry of one year from the date of taking of possession
till payment.
The appeals of the Food Corporation of India and the
state of Punjab on the one hand and appeals of the claimant-
land-owners on the other, respectively asking for reduction
and enhancement of compensation, were dismissed by a common
judgment by a learned Single Judge of the Punjab and Haryana
High Court on August 16,1988. The assessment at the rate of
Rs.1,20,000 per acre was affirmed but on a different reason-
ing than the one adopted by the Additional District Judge.
Likewise, Letters Patent Appeals by the respective parties
to a Division bench of the High Court were dismissed main-
taining the measure of compensation at the rate of
Rs.1,20,000 per acre, still on a different reasoning than
the one adopted by the learned Single Judge or the Addition-
al District Judge. Since the reasoning has differed from
court to court, we became inclined to examine the issue over
again and come to a decision regarding the rate of compensa-
tion which would be just and equitable in the circumstances,
as well as meeting the requirements of law.
621
The purpose of Land Acquisition Act is to empower the
Government to acquire land only for public purposes or for a
company, and, where it is for a company, the acquisition is
subject to the provisions of Part VII. Public purposes being
such diverse in nature the Governments of the time have been
undertaking large scale acquisitions to promote and achieve
the common good. The Act is neither a tool in the hands of
the Government to deprive any person his land without pay-
ment of its market value, solatium at the prescribed rate
and statutory interest, nor a bonanza to a land owner whose
land has been acquired, permitting him to get a fanciful
inflated price. The Act therefore provides a machinery to
determine the market value of the land as existing on the
date of the notification under Section 4 of the Act. Section
15 of the Act mandates that in determining the amount of
compensation, the Collector shall be guided by the provision
as contained in Sections 23 and 24. Section 23 contains a
list of positives to be taken into account by the court
determining compensation. The first requirement is that the
court must take into consideration the market value of the
land on the date of the publication of the Notification
under sub- section (1) of Section 4 of the Act. This is the
reason why courts have looked for comparable sales of lands
at or close to the date of the Notification under Section
4(1) of the Act to discover a basis towards determining
compensation. Somewhere in the process, where difficulties
crop up, the courts employ the rule of thumb, since compen-
sation has to be assessed and arms cannot be raised in
despair. It is the bounden duty of the court while ascer-
taining compensation to see that it is just, not merely to
the individual whose property is taken, but to the public
which is to pay for it; even if it be a public corporation
set up for public needs.
Before we enter into the merits of the case it would be
necessary to meet a preliminary objection raised by Mr.
Sachar as to the maintainability of the appeals by the
F.C.I. The proviso to sub-section (2) of Section 50 was
pressed into service, which was employed by the Additional
District Judge to reject the two references under section 18
of the Act sought by the F.C.I It was asserted by Mr. Sachar
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 11
that when the said provision debars the local authority or
company from demanding reference under section 18, it logi-
cally follows that it cannot file an appeal against the
Award of the Court. The Award of the Court was made on
13.6.86 under the amended provisions of the Act. Section 54
provides for appeals in proceedings before court. It says
that subject to the provisions of the Code of Civil proce-
dure 1908, applicable to appeals from original decrees,
622
and notwithstanding anything to the contrary in any
enactment for the time being in force, an appeal shall only
lie in any proceedings under this Act to the High Court from
the Award, or from any part of the Award of the court and
from any decree of the High Court passed on such appeal as
aforesaid an appeal shall lie to the Supreme Court subject
to the provisions contained in Section 110 of the Code of
Civil Procedure, 1908 and in Order 45 thereof. Mr. Sachar
had no quarrel with the proposition that an appeal could lie
under Section 54 at the instance of the state of Punjab or
one of its officers. The objection is to the maintainability
of the appeals by the F.C.I. for whose purpose the land was
acquired. We are not inclined to agree with Mr. Sachhar for
three reasons. In the first place, it is evident that in the
references sought the claimant-land-owners themselves had
impleaded the F.C.I. and the state of Punjab as contesting
Parties. Before the Additional District Judge, the F.C.I.
was a keen contestant. Having suffered the Award from the
Additional District Judge after a grim battle it had the
right to file an appeal under Section 54 to the High Court.
The F.C.I. may not have had the right to ask a reference
under section 18 but this only meant that it could not seek
reduction of the compensation as awarded by the Collector
because the award was an offer by the State through the
Collector. Section 25 too is also a pointer to that effect
that the amount of Award by the Collector is kept sacrosanct
and compensation can in no event be less than the one award-
ed by the Collector. Conversely, subject to the provisions
of Section 25, there is no bar for enhancement of compensa-
tion from the sum awarded by the Collector. And when there
is no such bar the appeals of the F.C.I. in the very nature
of things attack the amount awarded by the court over and
above the amount awarded by the Collector. In the second
place, such an objection was not raised at any stage in the
proceedings before the Courts below. No effort was made the
claimant-land-owners to get struck off the F.C.I. as party
in the proceedings before the Additional District Judge. No
objection was made either before the learned Single Judge or
before the Division Bench of the High Court with regard to
the maintainability of the appeals preferred at those two
stage by the F.C.I. The objection now at such a belated
stage cannot be allowed to be raised for the first time in
the Supreme Court, whatever be its merit. In the third
place, this court in its discretion under Article 136 of the
Constitution, has wide powers to permit any person to appeal
from any judgment, decree, determination, sentence or order
in any cause or matter passed or made by any Court or Tribu-
nal in the territory of India.
623
The objection raised in either event does not appeal to
as and we accordingly reject it.
As has been said earlier the land acquired is large
area of a little over 50 acres which is within the municipal
area of Malout Town, though in the revenue estate of village
Danewala. It abuts the railway line on one side across which
is the revenue estate of Malout. One and a half years earli-
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 11
er about 70 acres of land was acquired by the State of
Punjab vide notification dated 30.6.76 on the other side of
the railway line for setting up a grain market. That land
abuted the G.T. Road on one side. There is a tendency of
extension of urbanisation from Malout towards village Dane-
wala. Evidence has been led to show that on the G.T. Road,
shops have been constructed, petrol pumps, factories, work-
shops and godowns have come up. Evidence has also been led
to show that there is demand of land for commercial and
residential purpose on the G.T.Road and near about. The land
has been found by the High Court to be neither touching nor
being accessible from the G.T. Road. It was shown in the
revenue papers to be used for agricultural purposes. From
these particulars the courts below have come to the conclu-
sion that land had potential of urbanisation. We have no
reason to differ from such view.
Before the Additional District Judge, the
claimant-land-owners produced copies of the sale deeds
Ex.A-6 to A-23 to support their claim which were tabulated
by the learned Judge in his Award. These are 18 in number.
Significantly, none of these sales exceeded one Kanal of
land. A Kanal is 1/8th of an acre. Rather in the 18 in-
stances only 2 sales were of one kanal each and those were
Ex.A-16 and A-23 which appealed, in one form or the other,
to the courts below. The others were of areas less than even
half a kanal or even lesser. Apart from the sizes of the
plots sold, the first five sales were within the period
starting from 30.3.77 to 16.11.77. The remaining sales were
from 18.12.78 to 11.7.84 The instant acquisition being of
20.12.77 the only sale prior to that date which could be
relevant in point of time was of 1-1/2 Marla of land (1-1/13
of a Kanal) on 16.11.77 disclosing at its price per acre at
Rs. 15,78,560. This instance was rightly rejected by the
Additional District Judge. The sale next in point of time,
but after 20.12.77, was A-11 dated 20.12.78, and even though
the area sold was less than one kanal the price revealed was
Rs.96,800 per acre. This sale for whatever reason, was
overlooked by the Additional District Judge. Besides he
rejected all the sale instances provided by the State show-
ing market rate
624
far far below than what was claimed by the claimants. He,
however, fell for two later sales Ex.A-16 and Ex.A-23 by
adopting the following reasoning:-
"So, in these cases, I am inclined to follow the trans-
actions relating to at least one Kanal of land, thus, the
relevant transactions are covered by the copies Exs. A-16
and A-23 Vide sale deed Ex.A-16, one Kanal of land was sold
for Rs. 30,000 on 30.6.1981 and vide sale deed Ex.A-23, one
Kanal of land was sold for Rs.15,000 on 6.6.79, vide Ex.A-
23,the land sold comprised in Khasra No.359 which is quite
close to the acquired land. The Notification under Section 4
of the Act was issued on 20.12.77 so the transaction dated
6.6.1979 reveals a proper and appropriate data for determin-
ing the market value of the acquired land. This transaction
gives the market value of the land at the rate of
Rs.1,20,000 per acre. The other transaction covered by Ex.A-
16 is dated 30.6.81 and it reveals the price at the rate of
Rs.2,40,000 per acre. The learned counsel for the respondent
rightly submitted that this, transaction took place much
after the Notification of acquisition and, thus, it cannot
provide appropriate data for determining the market value of
the acquired land. The only relevant transaction relating to
at least one kanal of land is dated 6.6.1979 which gives the
market value of Rs.1,20,000 per acre. This transaction, to
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 11
my mind, gives the just and adequate criteria for determin-
ing the market value of the acquired land.
from another angle, the market value of the ac-
quired land can be determined by taking into con-
sideration the two transactions i.e. Exs.A-16 and
A-23 of one Kanal each as those two transactions
took place after the Notification for acquisition
and they reveal the average price of Rs. 1,80,000
per acre. Since these transactions took place after
the Notification under section 4 of the Act, so one
third of the average price is to be deducted to-
wards the road and parks and, thus, after deducting
1/3rd price, its market value again comes to
Rs.1,20,000 per acre".
When asked to give Rs. 1,40,000 per acre as
compensation as was given for the land acquired for the
grain market in Mandi Malout in the
625
earlier year the learned Additional District Judge
observed as follows:-
"........the land acquired for the new Grain Market
was towards Malout town from the railway line. So
that very compensation cannot be appropriately
awarded for the acquired land in question, though
never the less that amount of compensation can be
taken in mind while guessing the market value of
the acquired land. Since Rs. 1,40,000 per acre was
awarded for the acquired land for the new grain
market vide copy Ex.A-24, the land in question has
equally the potential value and is at a little
distance from the G.T.Road and is very close to the
railway line and within the municipal limits of
Malout, but it being situated across the railway
line, the proper yardstick to determine the market
value of this land is the transactions Exs.A-16 and
A-23, which reveal the market value to be Rs.
1,20,000 per acre, as observed above. The land
covered by those transactions is quite close to the
acquired land".
On that premises, the Additional District Judge
determined the market value of the land at Rs. 1,20,000 per
acre.
Before the learned Single Judge in the High Court in
appeal,the claimant-land-owners abandoned reliance on Exs.A-
16 and A-23. The learned Singh Judge then observed as
follow:-
" The primary submission of the learned counsel for
the claimant appellant while conceding that the
sale instances Ex.A-16 and A-23, as relied upon by
lower court, were not very relevant for the purpose
of determining the market value of the acquired
land, is that the sale instances Exs.A-6 to A-10
provide the best possible material to answer to
question posted in the earlier part of the judg-
ment".
The claimants failed to convince the learned single
judge to rely upon the sale instances Exs.A-6 to A-10. With
regard to award, Ex.A-24 the learned judge observed as
follows:
"It is not in dispute that the land covered by
Ex.A-24 (in the light of Exhibit A-1) lies along
with Abohar Dabwali road and a railway line inter-
venes the two blocks of land, i.e., one
626
covered by Ex.A-24 and the presently acquired land. Thus
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 11
apparently the land covered by Ex.A-24 had a better access
and better potential than the suit land. It appears that on
this account the lower court did not treat the two lands at
par and thus assessed the market value of the suit land at
Rs.1,20,000 instead of Rs.1,40,000 per acre. Mr. Garg.
however, is at pains to urge that this cut deserves to be
increased further or, in other words, the price of the suit
land be reduced to about Rs.93,000 per acre by applying a
cut of about 33% on the rate determined vide Ex.A-24, That
does not appear to be justified. The lower court has al-
ready, as pointed out above, reduced the rate by Rs. 20,000
per acre".
It is in this manner that the rate of Rs.1,20,000 was
stuck to.
In Letters patent Appeal, the Division bench in varia-
tion of both the reasoning of the courts below observed as
follows:
"On a consideration of the matter, we are of the
view that there is no scope for interference in
these appeals. The Land Acquisition Court in para 6
of its award has tabulated the instances and a look
at the same shows that decision of the learned
Single Judge is well based. Acquisition was made in
December, 1977 whereas instances A-11 and A-23
dated 18.12.1978 and 6.6.1979 show that the price
fetched was Rs.96,800 per acre and Rs.1,20,000 per
acre respectively".
Instance A-11, though of a small area, revealed the
price at the rate of Rs.96,800 per acre, was closer to the
date of the Notification having taken place a year thereaf-
ter, but earlier than sales A-16 and A-23. Yet the Division
Bench fell for maintaining the market price at Rs.1,20,000
by observing as follows:-
"Moreover, there was another acquisition slightly
earlier to the present acquisition for the new
grain market for which compensation was awarded by
the Court at the rate of Rs. 1,40,000 per acre.
That land was situated on Abohar Dabwali road and
had higher potential as compared to the land in
question which is not assessable by road. Accord-
ingly, the value at Rs.1,20,000 per acre for the
land in dispute has been cor-
627
rectly assessed by the Land Acquisition Court and
upheld by the learned Single judge",
This court as the last Court of appeal, will ordinarily
not interfere in an award granting compensation unless there
is something to show not merely that on the balance of
evidence it is possible to reach a different conclusion,but
that the judgment cannot be supported by reason of a wrong
application of principle or because some important point
affecting valuation has been overlooked or misapplied.
Besides, generally speaking, the appellate court interferes
not when the judgment under appeal is not right but only
when it is shown to be wrong. See in this connection, The
Dollar Company, Madras v. Collector of Madras,[1975] 2 SCC
730. Added there to are other rules of prudence that the
courts do not treat at par land situated on the frontage
having special advantage and the land situated in the inte-
rior undeveloped area, or to compare smaller plots fetching
better price with large tracts of land. See in this connec-
tion Periyar and Pareekanni Rubbers Ltd. v. State of Kerala,
A.I.R. 1990 S.C. 2192.
Bearing these principles in mind, we now proceed to
examine the matter. Learned counsel for the claimant-land-
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 11
owners placed before us a plan showing the topography of the
area. We had the advantage of using it without objection
from learned counsel of the F.C.I. It is evident that if one
comes from Malout towards village Danewala on the G.T. Road,
one has first to pass the railway crossing and then go some
distance to reach the plot which is subject -matter of sale
Ex.A-11, facing G.T.Road. Then one has to go further down to
reach plot of land covered by sale instance EX. A-16 facing
the G.T.Road on the other side. At a short distance further
down is the plot of land covered by sale instance Ex.A-23
again facing the G.T.Road, almost opposite to land of sale
instance Ex.A-16. There are the only instances which have
been chosen at one stage or the other for consideration.
Before crossing the railway line lies the large chunk of
land which was acquired for constructing a grain market for
Malout Mandi having considerable frontage on the G.T.Road It
is evidently close to the DAV College. Besides it surrounds
the office of the Market Committee. As observed by the
learned Single Judge of the High Court the grain market land
covered by award Ex.A-24 had a better access and better
potential than the land under acquisition. Obviously the two
lands could not be treated at par as the market value of the
instant land cannot be the same. So far there can be no
dispute. Amongst the three sale instances figuring in the
discussion, sale Ex.A-11 is the closest in point of
628
time having taken place on 18.12.78(about a year after
the date of notification under Section 4 of the Act) and
distance wise closest from the land acquired for grain
market, Malout. This discloses the rate of Rs.96,800 per-
acre, even though the area involved is less than half a
kanal. Only a plot, sizeable though, intervenes between this
plot and the land under acquisition . This sale instance
engaged the attention of Letters Patent Bench of the High
Court and not by any of the two courts below. The next in
point of time is sale instance Ex.A-23 showing the rate of
Rs.1,20,000 per acre but the land sold was only one Kanal.
It took place on 6.6.79 about 1x1/2years later than the date
of Section 4 notification. This sale instance engaged the
attention of the Additional District Judge and the letters
Patent Bench but was dropped from consideration by the
learned Single judge on the concession of the
claimant-land-owners. Lastly in point of time is sale in-
stance Ex.A-16 of 30.6.81 involving one kanal of land, the
rate being Rs.2,40,000 per acre. In point of situation, plot
covered under Ex.A-16 is almost opposite to plot covered by
sale Ex.A-23 but slightly towards Malout town. Ex.A-16 took
place two year after sale Ex.A-23 and as such was about
3x1/2 years after the date of the notification. Sale Ex.A-16
appealed to the Additional District Judge only as a support-
ing material to grant compensation at the rate of
RS.1,20,000 per acre on the basis of sale Ex.A-23. Sale
Ex.A-16 neither appealed to the learned Single Judge nor to
the Letters Patent Bench. Sale Ex.A-16 having been discarded
by the learned Single Judge as well as by the Letters Patent
Bench of the High Court and the Additional District Judge
too having used it only in a limited way, as disclosed in
his reasoning. We feel that sale Ex.A-16 should be totally
ruled out from consideration because it was too distant in
point of time having taken place 3-1/2 years after the date
of notification. Having discarded the same the supporting
foundation to maintain sale price at the rate of Rs.1,20,000
per acre either on the basis of sale instance Ex.A-23 or on
the basis of award Ex.A-24 become shaky and open to ques-
tion.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11
Now we have seen sales Ex.A-11 as well as Ex.A-23 are
of very small areas and have taken place a year and a year
and half respectively from the date of section 4 notifica-
tion. Evidently they are at an advantageous position being
on the G.T. Road as compared to the land under acquisition
which has no access to the G.T.Road and is of a large area.
These sales have as such no positive role to play. If at
all, some role is due to sale Ex.A-11, which is closest in
point of time, and distance wise more close to Malout town,
and on account of its situation. This tells us that for a
small plot at an advantageous position on the G.T. Road the
rate was Rs. 96,000 per acre
629
a year after the date of the notification under Saction
4. The land under acquisition cannot fetch on any reasoning
the same price as fixed in sale Ex.A-11, because comparably
the area acquired is large, almost 800 times than the land
sold vide Ex.A-11. So the land acquired has to fetch a price
lesser than the price of Rs.96,800 per acre. At this stage,
it would be relevant to mention that in the grounds of
appeal before the High Court,the Food Corporation of India
disclosed its willingness to pay a sum of Rs.80,000 per acre
for the land acquired. In the same strand the learned coun-
sel appearing for the F.C.I had projected before the learned
Single Judge that there should be a further cut to reduce
the compensation from Rs.1,20,000 per acre to about 93,000
per acre. These statements by themselves are no concessions
and are at best indications of vacillation to find the
correct market value. On such statements public purses
cannot be allowed to open their mouths. Having regard to
these conflicting claims we get to the view that important
points affecting valuation had been overlooked or misapplied
in arriving at and sticking to the rate of compensation at
Rs.1,20,000, Which would require a correction from us. We
feel that in the facts and circumstances of the case the
compensation must in comparison get lower than the price at
which sale Ex.A-11 took place, but at a figure which does
not overlook the rate as given in award Ex.A-24. Now we lift
our thumb and put it to reduce the compensation to Rs.80,000
per acre slicing down 1/6th (roundedly ) from the rate re-
flective from sale instance Ex.A-11 and 1/3rd from the rate
of Rs. 1,20,000, as deduced from award Ex.A-24, because of
the poor locale, disadvantageous position and lack of conti-
guity to the expansion of Malout town due to the obstructing
railway line. In our opinion, compensation at the rate of
Rs. 80,000 per acre is just and fair in the circumstances,
and we hold so.
Accordingly, the appeals of the Food Corporation of
India are allowed, the judgment and decrees of the High
Court as well as Award of the Additional District Judge are
modified to the extent aforementioned; other conditions of
solatium and interest subsisting. The appellant F.C.I.shall
have its proportionate costs. The appeals of the claimant-
land-owners appellants are dismissed but with no order as
to costs.
R.P.
Appeals of F.C.I. Allowed and land owners dismissed