Full Judgment Text
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PETITIONER:
COLLECTOR, RAIGARH
Vs.
RESPONDENT:
DR. HARISINGH THAKUR & ANR. AND VICE VERSA
DATE OF JUDGMENT27/10/1978
BENCH:
SINGH, JASWANT
BENCH:
SINGH, JASWANT
PATHAK, R.S.
SEN, A.P. (J)
CITATION:
1979 AIR 472 1979 SCR (2) 183
1979 SCC (1) 236
CITATOR INFO :
R 1983 SC1190 (11)
ACT:
Land Acquisition Act, 1894 (1 of 1894) Ss. 4, 9, 18, 23
and 24-Agricultural land acquired for doubling railway
track-Payment of compensation-Potential value of such land
as a building site-Reliance on comparative
sales/capitalisation basis for ascertainment of quantum of
compensation.
HEADNOTE:
Agricultural land belonging to the respondents was
acquired by the railways for doubling the railway line,
compensation payable for the acquired land was fixed at Re.
1/6 per sq. ft. But the respondent claimed Re. -/12/- per
sq. ft. On the ground that the land had a great potential
value as a building site. On reference the Additional
District Judge enhanced the rate of compensation to Re. -
/41- per sq. ft. and allowed solatium at 15%. On appeal the
High Court enhanced the compensation to Re. -/8/- per sq.
ft.
on further appeal to this Court it was contended on
behalf of the appellants that the courts below had erred in
treating the land, which was primarily agricultural land, as
abadi land overlooking that it had not been declared as
such.
[Per Jaswant Singh & Pathak, J. Sen, J. dissenting]
Dismissing the appeals.
^
HELD: (1) Taking all the facts into consideration it
cannot be said that the basis on which the Additional
District Judge and the High Court proceeded was wrong or
that the quantum of compensation awarded by the High Court
was in any way excessive or exorbitant. [188 F]
(2) The question as to whether a land has potential
value as a building site or not is primarily one of fact
depending upon several factors such as its condition and
situation, the user to which it is put or is reasonably
capable of being put, its suitability for building purposes,
its proximity to residential, commercial and industrial
areas and educational, cultural or medical institutions,
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existing amenities like water, electricity and drainage and
the possibility of their future extension, whether the
nearby town is a developing or a prospering town with
prospects of development schemes and the presence or absence
of pressure of building activity towards the land acquired
or in the neighbourhood thereof. [ 87F-F]
(3) In the instant case it was clear from the
observations of the Special Land Acquisition officer and the
Addl. District Judge that the land had great potential
value as a building site. Moreover the Spl. Land Acquisition
officer did not lead any evidence worth the name to show the
price of comparable sites but remained content with the
production only of the sale statement prepared by the
Revenue Inspector.. The sale statement consisted mostly of
sales relating to the year 1951 which is not relevant to the
question on hand. Without examining the vendors or vendees,
the sale statement was not admissible in evidence and could
not be relied upon. From the material on record it was clear
that Raigarh was a growing town. Instead of utilising the
land for doubling the railway track
184
the railway had built staff quarters. On three sides of the
land there were pucca buildings and on the fourth side there
was a metalled road. [187G-H 188C-D.
[Per Sen, J.(dissenting)]
1. Upon compulsory acquisition of property, the owner
is entitled to the value of the property in its actual
condition at the time of expropriation with all its
advantages and with all its possibilities, excluding any
advantage due to the carrying out of the claim for the
purpose for which the property is acquired. The value of the
acquired property with all its possibilities had to be
adjudged on the material on record. [191 F, H]
Vyricharla Narayana Gajapatiraju v. Revenue Divisional
officer, Vizagapatnam, 66 IA 104, followed.
2. The market price must be fixed with reference to the
date of the notification under s. 4 irrespective of any
trend, for an increase to the value thereof. The basis for
determination of the market value of the land within s.
23(1)(i) of the Act is the value of the land to the owner.
Only such transactions would be relevant which can fairly be
said to afford a fair criterion of the value of the ,,
property as at the date of the notification. That test is
clearly not fulfilled in l? the present case[192A-B]
3. In a reference under s. 18 of the Act the burden of
providing that the amount of compensation awarded by the
Collector is inadequate lies upon the claimant, and he must
show affirmatively that the Collector had proceeded upon a
wrong basis. The nature and the burden of establishing that
he was wrong, depend on the nature of the enquiry held by
him. When the proceedings before the Collector disclose that
the award was not reasonably supported by the material
before him or when the basis was the application of a
"multiple" which could not be justified on any rational
ground, the burden can be discharged by a slight evidence.
But that is not the case here. [191C-D]
4. In the present case the High Court fell into an
error in overlooking the fact that the acquired land was
agricultural land. It was recorded as a raiyati land. The
land was not recorded as abadi as wrongly assumed by the
High Court. The claimants admitted that the land was
actually under cultivation. The Revenue Inspector stated
that the land was a paddy field and was surrounded by
agricultural lands. That being so the District Judge was
clearly wrong in treating the land to be abadi and
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calculating compensation on the footing of its being a
building site. [189E-190A]
5. Secondly, the land was lying undeveloped and
undiverted. Unless there was a development scheme the land
could not be valued as a building site. At the time of the
notification under s. 4(1) there was no recent building
activity near about the land. The land could be put to
better use provided it was fully developed as a building
site. The claimants were therefore entitled to the valuation
of the land as agricultural land with an additional
allowance for its future potentiality as a building site.
[190H-191B]
6. In fixing the amount of compensation the court has
to take into consideration the prevailing market value of
the land at the date of the notification unders. 4(1) and
such market value has to be determined by reference to the
price which a willing seller might have reasonably expected
for similar property from 1 a willing purchaser. In a
comparable sale the features are: (1) it must be
185
within a reasonable time of the date of notification under
s. 4(1), (2) it should be a bona fide transaction; (3) it
should be a sale of the land acquired or of the land
adjacent to the land acquired and (4) it should possess
similar advantages. [92G-193A]
7. In the instant case-the sale deeds relied upon by
the High Court could not obviously be the basis for the
determination of the market value of the land. These sale
deeds had clearly been brought into existence by the
claimants in quick succession in an attempt to inflate. the
price of the land after they became aware of the proposed
acquisition. The transactions which were examined by the
High Court were apparently fictitious and unreal and are
speculative in nature and could not be taken into account at
all. [193B-C, 193H-194A]
8. On the evidence produced it could not be said that
valuation should be made on the basis of potentiality of the
land as building site. There is complete absence of evidence
of building activity of a substantial nature being carried
on in the neighbourhood of the acquired land at about the
time when the notification was issued. The claimants
themselves did admit that the land was agricultural land.
[195B, 194F-C]
Raghubans Narain Singh v. The U.P. Govt., [1967] 1 SCR
389; N. B. Jeejabhoy v. The District Collector, Thana, C.A.
Nos. 313 to 315 of 1965 decided on Aug 1965: referred to.
9. In the absence of comparable sales, the only other
alternative to adopt is the capitalised value. Compensation
in respect of the agricultural land should be allowed on the
basis of 20 years’ purchases. The capitalisation basis
cannot, however, be accepted in a case where there is no
evidence of the profits yielded from the land. [195C]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal NOS. 64-65
of 1969.
(From the Judgment and Decree dated 1-12-61 of the
Madhya Pradesh High Court in Misc. First Appeal No. 43 of
1959).
S. K. Gambhir for the appellant in CA 64 and Respondent
in CA 65/69.
G . L. Sanghi, K. John and J. Sinha for the respondent
in CA 64 and appellant in CA 65/69.
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The Judgment of Jaswant Singh and R. S. Pathak, JJ. was
delivered by Jaswant Singh, J. A. P. Sen, J. gave a
dissenting opinion.
JASWANT SINGH, J.-These two cross appeals by
certificates of fitness granted by the High Court of Madhya
Pradesh at Jabalpur are directed against the judgment and
decree dated December l, 1961 of the said High Court
dismissing the Misc. (First) Appeal No. 42 of 1959 preferred
by the appellant from the Award dated December 20, 1958 of
the II Additional District Judge, Raigarh in Miscellaneous
Judicial Case No. 59 of 1958 being a reference under section
18 of the Land Acquisition Act, made at the instance of the
appellant in
13- 817SCI/78
186
respect of the Award dated August 23, 1957 of the Land
Acquisition officer, Raigarh.
The facts giving rise to these appeals are: on an
undertaking given by him to pay full compensation with
interest from the date of possession to the date of payment
of compensation as provided in the Land Acquisition Act,
1894 (hereinafter referred to as ’the Act’) the District
Engineer, South Eastern Railway, Raigarh, took advance
possession on January 17, 1957 of five plots of agricultural
land admeasuring 3.38 acres and another plot of agricultural
land admeasuring 0.14 acres adjoining the railway track
situate in village Darogamuda, Tehsil and District Raigarh,
a suburb of Raigarh belonging to respondents I and 2
respectively for doubling the railway line between Rourkela
and Durg in the South Eastern Railway. Subsequently
Notification dated February 8, 1957 under section 4(1) of
the Act for acquisition of the aforesaid plots of land was
issued and published in the Government Gazette dated
February 15, 1957. This was followed on March 21, 1957 by a
notification under section 6 of the, Act. Although in the r
statements filed by them under section 9(2) of the Act the
respondents claimed compensation at the rate of Rs. 32,670/-
per acre i.e. at the rate of -/12/- per square foot on the
ground that the plots of land in question had a great
potential value as a building site and Rs. 500/- for
improvements and Rs. 100/- as the value of one tree, the
Special Land Acuisition officer, Raigarh by his award dated
August 23, 1957 awarded compensation at the rate of Rs.
3,327/14/- per acre which roughly worked out at -/1/6 per
square foot on the basis of the statement of sales furnished
by A.S.L.R. (L.A.) prepared by Jujhar Singh N.A.W.I. Not
satisfied with the quantum of compensation, the respondents
made an application to the Special Land Acquisition officer
requesting him to refer the matter to the court under
section 18 of the ;1 Act. According to the request of the
respondents, the Special Land . Acquisition officer made the
aforesaid references to the II Additional District Judge,
Raigarh, who by his award dated December 20, 1958 enhanced
the rate of compensation to -/4/- per square foot and
awarded Rs. 36,808/4/- and Rs. 1,524/8/- to respondents l
and 2 respectively as compensation. The Additional District
Judge also allowed the solatium at the rate of 15% amounting
to Rs. 5.521/4/- and Rs. 228/12/- to respondents 1 and 2
respectively. Aggrieved by the said , Award of the II
Additional District Judge, the appellant preferred an
appeal to the High Court of Madhya Pradesh at Jabalpur which
was registered as Miscellaneous (First) Appeal No. 43 of
1959. In the said appeal, the respondents filed cross
objections claiming enhancement of compensation by Rs.
84,518.39 P. The High Court by its
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187
judgment dated December 1, 1961 dismissed the aforesaid
appeal preferred by the appellant but allowed the cross
objections filed by the respondents holding the reasonable
rate of compensation to be -/8/per square foot. Consequently
respondent No. 1 was held entitled to Rs. 73,616-8-O as
compensation and Rs. 11,042-8-0 as solatium and respondent
No. 2 was held entitled to Rs. 3,049-0-0 as compensation and
Rs. 457-8-O as solatium. It is against this judgment of the
High Court that the present appeals are directed.
Appearing for the appellant, Mr. Gambhir while
admitting that in an appeal under Article 136 of the
Constitution, the Court is only concerned with finding out
whether the principles on the basis of which compensation
has been computed for acquisition of land under the Act have
been rightly applied or not and cannot re-appraise the
evidence, has urged that the Additional District Judge and
the High Court have erred in treating the land in question
which was primarily an agricultural land as abadi land
overlooking that it had not been declared as such.
Mr. Sanghi has on the other hand urged that even
according to the findings of the Additional District Judge,
who made the spot inspection, as also of the High Court, it
is abundantly clear that the land in question was Abadi land
and has been rightly treated as such. Mr. Sanghi has further
urged that the said site has great potentialities as
building site.
The question as to whether a land has potential value
of a building site or not is primarily one of fact depending
upon several factors such as its condition and situation,
the user to which it is put or is reasonably capable of
being put, its suitability for building purposes, its
proximity to residential, commercial and industrial areas
and educational, cultural or medical institutions, existing
amenities like water, electricity and drainage and the
possibility of their future extension, whether the nearby
town is a developing, or a prospering town with prospects of
development schemes and the presence or absence of pressure
of building activity towards the land acquired or in the
neighbourhood thereof. the instant case, the fact that the
land in question has a great potential value as a building
site is evident not only from the observations made by the
Special Land Acquisition officer himself in his aforesaid
award to the effect that the land has assumed semi-abadi
site hut also from the following observations made in his
judgment dated December 20, 1958 by the Additional District
Judge who had the advantage of inspecting the site:-
"The land abuts Raigarh town. It is within
Municipal limits and the nazul perimeter extends upto
it. To the east of
188
the plot there are some kutcha buildings inhabited by
respectable persons. To the North is a Municipal road
leading to the railway quarters to the west. To the
west beyond the railway quarters, there is further
habitation‘ and the locality is called "Banglapara"
within Municipal limits. The plot did have a potential
value as a building site and it is further supported by
the fact that the plot has been used by the Railway
authorities for construction of staff quarters thereon
though the land was acquired for doubling the rail way
line."
It is also not disputed that the Special Land
Acquisition officer did not lead any evidence worth the name
to show the price of the comparable sites in question and
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remained content with the production only of the sale
statement made by Jujhar Singh, N.A.W.I. Now the sale
statement consisted mostly of sales relating to the year
1951 which is not relevant for the question in hand.
Moreover, the sale statement by it self without examining
either the vendors or the vendees or the persons attesting
the sale deeds is not admissible in evidence and can not be
relied upon. The sale deed dated December 14, 1956 in favour
of Dr. Das for 4,800 square feet of land out of contigious
Khasra No. 256 in lieu of Rs. 2,000/- i.e., at approximately
6 1/2 annas per square foot (which has been relied upon by
the Additional District Judge and the High Court) could be
taken as a safe guide for determine nation of the
compensation. From the material adduced in the case, it
appears that Raigarh is a growing town, that instead of
utilising the land for doubling the railway track, the
railway has built staff quarters thereon, that on three
sides of the acquired land, there already existed pucca
buildings and on the fourth side, there is a metalled road.
It is also in evidence that some lawyers have put up some
constructions near the sites in question. Taking all the
facts into consideration. it cannot be said that the basis
on which the Additional District Judge and the High Court
proceeded is wrong or that the quantum of compensation
awarded by the High Court is in any way excessive or
exorbitant.
As neither the interest nor compensation on account of
severance was claimed in the High Court either by Dr.
Harisingh Thakur or by Tikam Singh Thakur, we do not think
they can justifiably put up claims in that behalf. Mr.
Sanghi appearing on their behalf has fairly stated that he
would not like to press his cross appeal.
In the result, we do not find any merit in either of
the aforesaid appeals. W.- would accordingly dismiss them
with costs.
SEN J.-I have had the advantage-of reading the judgment
by my learned brother Jaswant Singh. Since the appeal
involves an important
189
question affecting valuation which has been overlooked by
the High Court, I would like to say a few words of my own.
Normally, this Court does not interfere in appeal with
the valuation by the High Court in land acquisition cases,
unless the judgment cannot be supported, as it stands,
either by reason of a wrong application of principles or
because some important point in evidence has been overlooked
or mis-applied: The Special Land Acquisition officer,
Bangalore v. Adinarayan Setty(1).
With respect, I venture to say that the judgment of the
High Court cannot be supported by reason of a wrong
application of principles. It overlooked the fact that there
was no discernible basis on which the Additional District
Judge could have changed the mode of valuation adopted by
the Special Land Acquisition officer treating the land
acquired to be agricultural land and in awarding
compensation upon the basis as if it were a building site.
Indeed, there was no atempt on their part to determine the
’’intrinsic character of the land", namely, whether the land
acquired should be classified as agricultural land or not.
In the present case, the High Court obviously fell into
an error in overlooking the, fact that the acquired land
situate in village Darogamuda, admeasuring 3.52 acres, was,
on the 8th February, 1957 i.e. On the date of the issue of
the notification under s. 4(1) of the Act, agricultural
land. It was recorded as a raiyati land belonging to the two
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claimants, Dr. Harisingh Thakur and his brother Vikram Singh
Thakur who were ex-gaontiyas of village Darogamuda. The land
was not recorded as abadi as wrongly assumed by the High
Court. Perhaps it was misled by the mis-description of the
land as abadi in the reference made by the Collector under
s. 18(1).
This is an admitted position between the parties. In
response to the notice of admissions and denials of
documents served by the claimants, the Collector admitted
panchsala khasra for the years 1952-53 to 1953-54 and
kistbandi khatouni for the years 1952-53 and 1953-54. The
claimant Dr. Harisingh Thakur, AW1 admits during his
crossexamination that till the month of December 1956, the
lands were actually under his cultivation and he had reaped
the crops before delivering possession of the same on the
17th January, 1957 to the District Engineer, South-Eastern
Railway. He further admits that throughout the land was
under cultivation i.e. from the time,- of his forefathers.
In fact, Jujhar Singh NAW1, Assistant Superintendent Land
Records, who was at the relevant time a Revenue Inspector,
states that the,. land
(1) [1959] Supp. (1) S.C.R. 404.
190
acquired was a paddy field and was surrounded by
agricultural lands. That being so, the District Judge, was
clearly wrong in treating the land to be abadi and
calculating compensation on the footing of its being a
building site.
In awarding compensation at a flat rate of Rs. 3,327.87
P. per acre, the Special Land Acquisition officer took
notice of the fact that the land is situate in village
Darogamuda, a suburb of Raigarh, which is a town of great
commercial importance, though beyond its nazul perimeter. He
also took notice of the fact that the land abuts the railway
track and there were agricultural fields on two sides. On
the other two sides, there existed kutcha hutments of
backward classes and a few railway buildings. The award of
compensation at the rate of Rs. 3,327.87 P. per acre was
based on average of sales of lands in recent years as
prepared by Jujhar Singh, Revenue Inspector NAW 1. The
Special Land Acquisition officer accordingly observed:
"The average value based on the above noted sales
comes to Rs. 3,327/14/- per acre and in my opinion it
truly re presents the average market value of lands in
this predominantly agricultural locality which has
assumed semi-abadi site value due to the constructions
of houses mostly by low class people besides a few
buildings of Railway Department. It is for this reason
that the average value per acre comes to as much as Rs.
3,327/14/- per acre else the lands in question would
have fetched lower price, available in respect of
agricultural lands to which class they really belong
and stand assessed as such till today."
While it is no doubt true, as my learned brother Jaswant
Singh has rightly observed, that the statement of average of
sales, prepared by Jujhar Singh NAW 1, was not admissible in
evidence unless the Collector proved the transactions in
question, upon which it was based, there is no denying the
fact that the acquired land was nothing but agricultural
land and the mode of valuation had necessarily to be upon
that basis.
Now, if the purpose for which the land was acquired,
i.e., for the construction of staff quarters in connection
with the doubling of the railway line by the South-Eastern
Railway, has no bearing on the question of valuation, the
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future possibilities of the land, which admittedly was
agricultural land, lying in the vicinity of Raigarh if
applied to the most lucrative use, having regard to its the
then condition, was very little as a building site. The land
was lying undeveloped and undiverted. Unless there was a
development scheme, the land could not
191
be valued as a building site. The land could, however, be
put to that use if there was such development scheme. At
the time of the notification under s. 4(1), there was no
recent building activity near about the land, which was
either under cultivation or lying desolate. But as l have
already said, the land could be put to a better use provided
it was fully developed as a building site. The claimants
were, therefore, entitled to the evaluation of the land as
agricultural land with an additional allowance being made
for its future potentiality as a building site. I just
cannot imagine what could be the utility of the acquired
land on a building site, looking to its proximity to the
railway track. It would, indeed, be very little.
In a reference under 9. 18 of the Act, the burden of
proving that the amount of compensation awarded by the
Collector is inadequate lies upon the claimant, and he must
show affirmatively that the Collector had proceeded upon a
wrong basis. The nature and the burden of establishing that
he was wrong, depend on the nature of the enquiry held by
him. When the proceedings before the Collector disclose that
the award was not reasonably supported by the material
before him, or when the basis was the application of a
’multiple’ which could not be justified on any rational
ground, the burden can be discharged by a slight evidence.
But that is not the case here. The claimants have led no
trustworthy evidence. It is equally well-settled that where
the claimant leads no evidence to show that the conclusions
reached in the award were inadequate, or, that it offered
unsatisfactory compensation, the award has to be confirmed.
Upon a compulsory acquisition of property, the owner is
entitled to the value of the property in its actual
condition, at the time of expropriation, with all its
advantages and with all its possibilities, excluding any
advantage due to the carrying out of the claim for the
purpose for which the property is acquired. In Vyricharla
Narayana Gajapatjiraju v. Revenue Divisional Officer
Vizagapatnam(1) the Privy Council state:
"For the land is not to be valued merely by
reference to the use to which it is being put at the
time at which the value has to be determined.... but
also by reference to the uses to which it is reasonably
capable of being put in the future. It is possibilities
of the land and not its realized possibilities that
must be taken into consideration."
The value of the acquired property, with all its
possibilities has to be ll adjudged on the material on
record.
(1) 66. I.A. 104.
192
The market price must be fixed with reference to the
date of the. notification under s. 4 irrespective of any
trend, if any, for an increase in the value thereof. The
basis for determination of the market value of tel land
within s. 23 (1) (i) of the Act is the value of the land to
the owner. Only such transactions would be relevant which
can fairly be said to afford a fair criterion of the value
of the property as at the date of the notification. That
test is clearly not fulfilled in the present case.
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Clause fifthly in s. 24 interdicts the court from
considering any prospective increase in value due to
acquisition. Market value of the land acquired has to be
fixed with reference to the date of notification under s. 4
(1) . In Vyricharla Narayana Gajapatiraju v. Revenue
Divisional Officer, Vizagapatam (supra) the Privy Council
observed that where the owner is a person who could turn the
potentiality of the land into account, it is immaterial that
the utilization of the same potentiality is also the purpose
for which the land is acquired. The Underlying principle is
that a speculative rise in price of land due to acquisition
should not be an element which should enter into
computation. Sometimes the prices shown in sale deeds
executed subsequent in point of time are not the actual
prices paid. The sales may be. unreal and may not reflect
the true value of the land. There always elapses a certain
interval between the time when the intention to acquire Ea
certain land first becomes known and the actual notification
under s. 4(1) is issued. Here though the notification under
s. 4(1) was issued on 8th February, 1957, but the claimants
had, in fact, delivered the possession to the District
Engineer, South-Eastern Railway on the 17th January, 1957,
and were indeed, as it appears from the evidence, aware of
the fact that the land was being acquired by the South-
Eastern Railway much earlier, i.e., in December, 1956. In
view of this, the prospective rise in value, if any, has to
be kept out of consideration.
the principles to determine the quantum of compensation
are contained in s. 23(1) of the Act. The court in fixing
the amount has to take into consideration the prevailing
market value of the land at The date of the notification
under s. 4(1) and the said market value has to be determined
by reference to the price which a willing seller might have
reasonably expected for similar property from a willing
purchaser. The underlying principle of fixing the market
value with reference to comparable sales is to reduce the
element of speculation. In a comparable sale, the features
are: (i) it must be within a reasonable time of the date of
notification under s. 4.(1); (ii) it should be a bona fide
transaction; (iii) it should be a sale of the land acquired
or of the land adjacent to the acquired; and (iv) it should
possess
193
similar advantages. Before such instances of sales can be
considered there must be material evidence either by the
production of the sale deeds or by examining the parties to
the deeds or persons having knowledge of the sales, to prove
that the transactions are genuine.
In the light of these principles, the three sale deeds
relied upon by the High Court, Ext. P-14, Ext. P-15 and
Ext.P-17, pertaining to the small portions of the acquired
land executed by the claimants, could not obviously be the
basis for the determination of the market value of the land.
These sale deeds had clearly been brought into existence by
the claimants in quick succession, in an attempt to inflate
the price of the land, after they became aware of the
proposed acquisition. Of these, the land covered by the sale
deed Ext.P-14, dated 14th December, 1956 executed by Tikam
Singh Thakur, i.e., just a month before the delivery of the
possession, shows a sale of a plot measuring 4,800 sq.ft. to
Dr. Dhirendra Chandra Das, AW 2, for a price of Rs. 2,000/-.
The rate works out to about 42P per sq. ft. It evidently
could not afford a fair criterion of the value of the
property on the date of the notification under s. 4(1). Dr.
Das admits that he is in Railway service and when he
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purchased the land he knew that it was being acquired by the
South-Eastern Railway. No doubt Dr. Das is a willing friend
of Dr. Harisingh Thakur prepared to lend a helping hand but,
by no stretch of imagination, could he be treated to be a
willing purchaser. in the true sense of the term. Though Dr.
Das asserts that he had purchased the land for building a
house, he admits that he did not construct upon it because
he would have been required to invest considerable money for
levelling the land making it fit to be utilised as a
building site. This transaction indubitably does not appear
to be a real sale and could not furnish any guide for
determination of the true market value.
I am afraid, the other two sale deeds, Ext.P-15 dated
19th December, 1956 and Ext.P-17 dated 21st February, 1957
executed by Dr. Harisingh Thakur, by which he sold 300 sq.
ft. Of the acquired land to Jhallu Dani, AW 13 for Rs. 150/-
and 280 sq. ft to Baido, AW 15, for Rs. 200/- were, in fact,
fictitious sales effected by him after delivery of
possession to the South-Eastern Railway. The transactions
speak for themselves. Indeed, Ext. P-17 was executed by him
after issue of the notification under s.4(1). The first sale
was effected by the claimants to show the price of the land
to be 50P per sq. ft. They were evidently not satisfied by
this and, therefore, brought the other sale deed into
existence, a few days after the notification, showing the
rate to be about 72P per sq. ft. It is needless to stress
that such fictitious and unreal transactions which are but
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speculative in nature could not be taken into account by the
High Court at all.
In Raghubans Narain Singh v. The Uttar Pradesh
Government (1) this Court quoted with approval the following
passage from one of its earlier decision in N. B. Jeajabhoy
v. The District Collector, Thana,(2) where it was said:
"the question therefore turns upon the facts of
each case. In the context of building potentiality many
questions will have to be asked and answered: whether
there is pres sure on the land for building activity,
whether the acquired land is suitable for building
purpose, whether the extension of the said activity is
towards the land acquired, what is the pace of the
progress and how far the said activity has ex tended
and within what time, whether buildings have been put
up on the lands purchased for building purposes, what
is the distance between the built in land and the land
acquired and similar other questions will have to be
answered. It is the overall picture drawn on the said
relevant circumstances that affords the solution."
In Raghubans Narain Singh’s case (supra) there was
evidence to the effect that there was a school building near
the acquired land, that the land abutted on the road and
that some houses had been built on the opposite side of the
road. It was nevertheless held by this Court that all this
did not constitute evidence of building potentiality. It was
pointed out that there should be evidence, on the record,
’of building activity of a substantial nature, being carried
on in the neighbourhood of the acquired land, at about the
time when the notification was issued’.
There is complete absence of such evidence in this
case. It is beyond doubt that the acquired land was
agricultural land, and had not been diverted for non-
agricultural purposes. Indeed, the claimant, Dr. Harisingh
Thakur had himself admitted the land to be agricultural
land. The land is on the outskirts of Raigarh town but that
itself does not show that the land had a potential value for
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11
building purposes. It was for the claimants to show that
at the relevant time there was a tendency of the town to
develop in that direction and that prior to the acquisition
new buildings had been constructed in the neighbourhood.
Topography of the acquired land which abuts the railway
track is given by Jujhar Singh, NAW 1, the then Revenue
Inspector, who states that actually paddy used to be grown
on the land. To the north of this land, there was
cultivation. Beyond it, there was a 10 ft.
(1) [1967] I S.C.R. 489.
(2) C.A. Nos. 313 to 315 of 1965 decided on August 30,
1965.
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broad pucca road. About three furlongs way from the land was
the house of Ambalal. About one and a quarter miles away
there was a skin godown. In the east, there were small huts.
Beyond them, in the east, at a distance of about half a
furlong, there was the house of Jairamvalji. In the west,
about a furlong away, there was an old bungalow. At about
the same distance, there is the burial ground. In between
and all around, there were agricultural fields. That is the
total evidence of the case. On this evidence it cannot be
said that valuation should be made on the basis of the
potentiality of the land as building site.
In the absence of comparable sales, the only other
alternative to adopt is the capitalised value. Compensation
in respect of the agricultural land should be allowed on the
basis of 20 years’ purchase. The capitalisation basis
cannot, however, be accepted in a case where, as in the
instant case there is no evidence of the profits yielded
from the land.
I would, therefore, for these reasons allow the appeal
of the State of Madhya Pradesh.
It is with reluctance that I have written this separate
opinion. There has never been a public undertaking in this
country Governmental, Municipal, city or industrial, but
that the land-holder has generally secured anything from
four to forty times as much for the land as its agricultural
price, i.e., many times its real value. This result
unfortunately springs from a general tendency of District
Judges in hearing a reference under s.18 of the Land
Acquisition Act, 1894, to assume that purely agricultural
lands, merely by their proximity to a city or town, become
endowed with ’special adaptability’ as a building site.
While it is not suggested that unfairly low value should be
offered, on the other hand the temptation to over-generosity
must be equally resisted. Such generosity at the public
expense reacts against the development and against the
prosperity of the country and imposes an unnecessary burden
on the taxpayer.
Per Curiam
In accordance with the opinion of the majority, the
appeals are dismissed with casts.
N.V.K. Appeals dismissed.
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