BHOLA NATH SHARMA THROUGH LRS. vs. UNION OF INDIA THROUGH LAC & ANR.

* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ LA.APP. 109/2013
Reserved on: 25.02.2016
Date of decision: 23.03.2016

BHOLA NATH SHARMA THROUGH LRS..... Appellant
Through: Mr. Dhruv Mehta, Sr. Adv.
with Mr.Aman Vachher, Mr.
Ashutosh Dubey, Mr. Abhishek
Chauhan, Mr.Sagar Mehra,
Ms.Anupama & Mr.Sagar
Mehra, Advs.

versus

UNION OF INDIA THROUGH LAC & ANR...... Respondents
Through: Mr. Sanjay Kumar Pathak,
Ms.K.Kaomudi Pathak, Mr.
Sunil Kumar Jha, Mr.Kushal
Raj Tater, Ms.Shreya Kasera,
Advs. for R-1/UOI.
Mr. Kunal Sharma, Adv. for
DDA.

+ LA.APP. 76/2013
Reserved on: 26.02.2016
Date of decision: 23.03.2016

ANAND PRAKASH & ORS. ..... Appellants
Through: Mr. Vipin K.Singh, Advocate.

versus

UNION OF INDIA & ORS. ...... Respondents
Through: Mr. Sanjay Kumar Pathak,
Ms.K.Kaomudi Pathak, Mr.
Sunil Kumar Jha, Mr.Kushal
Raj Tater, Ms.Shreya Kasera,
Advs. for UOI.
LA APP. Nos.109/2013 & 76/2013 Page 1 of 66

CORAM:
HON'BLE MR. JUSTICE ASHUTOSH KUMAR

ASHUTOSH KUMAR , J.
1. In LA.Appeal No.109/2013, the appellants Bhola Nath Sharma
(deceased) through his legal representative Ms.Radha Sharma and
Mr.Shambhu Nath Sharma have challenged the judgment dated
08.05.2012 passed in LAC No. 283/2011 arising out of Award No.
10/79-80 for the land acquired in village Bahapur whereby the market
value of the land in question, on the date of notification under Section
4 of the Land Acquisition Act (30.06.1978) has been assessed at Rs.
250 per sq. yds. along with interest at the rate of 6% p.a. from the date
of compensation awarded by Land Acquisition Collector and 15% p.a.
solatium on the enhanced amount of compensation, but without any
interest on the same.
2. The appellants in LA.Appeal No.76/2013 have challenged the
judgment dated 08.05.2012 passed in LAC No.285/2011 arising out of
award No.224-86-87 for the land acquired in Village Bahapur
whereby the same market value, compensation and interest as was
done in LAC No. 283/2011 was assessed by the Reference Court. In
case of the appellants in LA Appeal No.76/2013, the date of
notification under Section 4 was 06.06.1978 and the date of
notification under Section 6 of the Act was 28.08.1979.
3. It would be relevant here in this context to mention that against
the award passed in the aforesaid case (LAC No. 285/2011), the
appellants had earlier preferred LA Appeal No.48/2007. On the basis
of submission made by the counsel for the parties, the Delhi High
LA APP. Nos.109/2013 & 76/2013 Page 2 of 66

Court vide order dated 25.01.2011 remanded the case of the appellants
in LA Appeal No.76/2013 to the Reference Court as it was connected
with the case of the appellants in LA Appeal No.109/2013 (Bhola
Nath Sharma through LRs vs. Union of India through LAC and Anr.).
4. The written statement given by the DDA in the case of Bhola
Nath Sharma through LRs vs. Union of India & Anr. and other
evidence were adopted in the aforesaid case (Anand Prakash and Ors
vs. Union of India; LA Appeal No.76/2013).

5. Hence, both the appeals are being taken up together.
6. The appellants have challenged the aforesaid judgment on
grounds of (i) complete non-application of mind; (ii) non
determination of the market value of the land acquired in accordance
with the evolved principles for the same; (iii) exemplars relied upon
by the appellant/claimants not having been taken into account; (iv)
adoption of a wrong/inaccurate approach of calculating the rent of
number of years after the purchase of land, despite their being
evidence of comparable sales and other evidences for computation of
market value; (v) not relying upon the judgment in land acquisition
case of Village Jasola, a neighbouring village where notification was
issued on 15.06.1979 and in the lead case of Ram Chander & Ors vs.
Union of India (RFA No.416/1986) in which the claimants were held
to be entitled to compensation at the rate of Rs.2240/- per sq.yards
along with solatium at the rate of 30% and interest at the rate of 9%
per annum for a period of one year from the date of the collector
taking possession and thereafter at the rate of 15% per annum till the
date of payment along with interest on solatium in view of the
LA APP. Nos.109/2013 & 76/2013 Page 3 of 66

judgment of the Hon'ble Supreme Court in Sunder vs. Union of India,
2001(7) SCC 211 and not even adverting to the judgment passed by
the Delhi High Court in RFA No.65/1981 (the case of the appellant in
the first round of litigation) wherein the claimants were awarded
Rs.2000/- per sq.yard with interest and solatium.
7. It would be necessary to briefly state the facts and
developments which have taken place in this case (Bhola Nath Sharma
through LRs vs. Union of India and Anr.).

8. By notification dated 30.06.78 issued under section 4(1) of the
Land Acquisition Act, 1894 (hereinafter referred to as the 'Act'), the
Lt. Governor of Delhi proposed the acquisition of 70 Bighas and 13
Biswas of land situated at village Bahapur for a public purpose,
namely planned development of Delhi.
9. After considering the objections filed by the land owners, the
Lt. Governor, Delhi issued declaration under Section 6 of the Act,
which was published in the official gazette dated 19.02.79 for
acquisition of 62 Bighas and 1 Biswas of land. In the award of the
Land Acquisition Collector dated 25.06.79, the acquired land was
divided into three separate blocks, numbered as A, B and C and
different market value for each was fixed at Rs.84/- per sq.yard;
Rs.63/- per sq.yard and Rs.42/- per sq. yard respectively.
10. Applications under Section 18 of the Act were filed by
interested persons for referring the matter to the Court for
determination of the amount of compensation. Based upon the
aforesaid applications, the Land Acquisition Collector referred the
LA APP. Nos.109/2013 & 76/2013 Page 4 of 66

matter to the Reference Court, where the case was registered as LAC
No. 2/1980 (Bhola Nath and Anr. vs. UOI).
11. The reference Court, vide judgment dated 27.09.1980, disposed
of the aforementioned case, holding that the claimants were entitled to
compensation at the rate of Rs.175/- per sq. yard with 15% solatium
and 6% interest with effect from 30.06.1978. This was with reference
to Block A of the acquired land. For Blocks B and C, the Reference
Court, in LAC No. 105/1984 (Smt. Narmada Devi and Ors. vs. UOI:
disposed of on 14.05.1984) fixed the market value of the acquired land
at the rate of Rs.129/- per sq.yard and Rs.108/- per sq.yard
respectively.
12. The appellants and others challenged the aforesaid judgment of
the Reference Court vide RFA No.65/1981 and 266/1984.
13. The Division Bench of the Delhi High Court in the aforesaid
first Appeals, returned the verdict that the appellants were entitled to
the compensation at the rate of Rs. 2000/- per sq. yard with 15%
solatium and 6% interest from the date of dispossession. It may be
pointed out here that by virtue of notification dated 03.06.1966 issued
under the Delhi Municipal Corporation Act, the appellants were
dispossessed in the month of January, 1972 only.
14. The challenge to the aforesaid judgment by the UOI and the
Land Acquisition Collector vide SLP (C) No. 1608/1999 failed. The
SLP was dismissed on 12.04.1999 and the review petition No.
1359/1999 was also dismissed on 13.10.1999.
15. The appellants and Smt. Narmada Devi and Ors. had also filed
SLPs which, after notice, were converted into Civil Appeal Nos.
LA APP. Nos.109/2013 & 76/2013 Page 5 of 66

6564/2001 and 6565/2001. Later, the aforesaid civil appeals were
permitted to be withdrawn. However, the cross objections filed by the
Union of India and the Land Acquisition Collector were allowed to
remain pending.
16. Since Delhi Development Authority (respondent No.2) was not
a party to the proceedings either before the Land Acquisition
Collector, or before the Reference Court or before the High Court in
RFA No.65/1981, it preferred a SLP along with condonation petition,
raising the plea that it was at the instance of the DDA that the land in
Village Bahapur was acquired and was transferred to it under Section
22(1) of the Act for planned development of Delhi and the DDA was
asked to release Rs.14,15,82,253/- for payment of compensation,
thereby making DDA an interested person within the meaning of
section 3(b) of the act, entitling it to have an opportunity to participate
in the proceedings before the Land Acquisition Collector and the
Reference Court, as is mandated under Section 50(2) of the Act. It was
averred on behalf of the DDA that it learnt about the judgment of the
Reference Court only in June, 1999 when it was intimated by the Land
Acquisition Collector for release of the claimed amount.
17. The Hon’ble Supreme Court of India allowed the petition by the
DDA; set aside the judgment of the Reference Court as well as that of
the High Court and directed for a fresh determination of the amount of
compensation payable to the appellants herein and remitted the matter
to the Reference Court for deciding the aforesaid references afresh,
after giving opportunities of hearing to the parties, including an
LA APP. Nos.109/2013 & 76/2013 Page 6 of 66

opportunity to the DDA to adduce evidence for the purposes of
determining the amount of compensation.
18. The Referee Court was further directed not to be influenced by
the observations contained in the judgment of the High Court as well
as the Supreme Court. Considering the case to be an old one, the
Reference Court was directed to decide the matter within a period of 9
months from the date of receipt of the judgment of the Supreme Court.
By way of abundant precaution, the Supreme Court also directed that
in case the amount of enhanced compensation determined by the
Reference Court had been paid to the appellant or their predecessors,
they would not be required to refund the same.
19. The cross objections in CA No.6564 & 6565/2001, referred to
above were also disposed of as having become infructuous.
20. After the remand, the appellants asked for and were permitted to
adopt the evidence which had been adduced in the first round of
litigation. The DDA, after inspection of records, asked for Shambhu
Nath (AW-4) and Munni Lal Bajaj (AW-7) to be summoned for being
cross examined. The afore-cited witnesses were cross examined by the
DDA and the Union of India adopted such cross-examination of the
aforesaid witnesses.
21. The DDA led two witnesses in defence namely Sri Raj Singh
and Sri Arun Kumar Vashishth as R2/W1 and R2/W2 respectively.
22. Before analyzing the evidence adduced on behalf of the parties
and the judgment of the Reference Court, it would be necessary here
in this context to refer to the relevant part of the award of the Land
Acquisition Collector and the reasoning assigned by him for
LA APP. Nos.109/2013 & 76/2013 Page 7 of 66

determining the market value of the land acquired and the
compensation to which the claimants were found to be entitled to. The
relevant portion of the award is quoted below:
" In fixing the market value of the land in a
particular village sale deeds of the
preceeding 5 years and preceeding awards
in the same village or vicinity are taken into
consideration for purpose of guidance. The
record reveals that there is no mutation
sanctioned in the village Bahapur from 1972
to 1979. Besides, no award has been
announced except the latest Award No.2059
which pertained to notification under
Section 4 dated 13.11.1959. The date of
notification in the present award is
30.6.1978. The difference between these two
notifications is about 19 years and so above
quoted award is not relevant for our
purpose. Therefore, that the scope of award
and sale deeds as a serving guideline for
determining the market value for this award
is seemingly ruled out because the market
value of the land under acquisition to be
ascertained is the value of the land in its
actual condition on the date of notification
with all its advantages and potentialities.
Documents referred at Sr.No.1 to 3 in
the title "Documentary Evidence" cannot be
referred to as these lands are close to
Mathura Road and Friends Colony and
therefore away from the land in question.
The land in question is nearer to the Kalka
Ext.Colony and Kalka Temple as compared
to the area mentioned at Sr.No.1 to 3 of the
documentary evidence also to the industrial
area. Considering all those facts there
remains only the booklet issued by
LA APP. Nos.109/2013 & 76/2013 Page 8 of 66

Government of India entitled "Information
for the guidance of lease Holders" which
can be depended with as a guideline for
determining the market value. In the said
booklet, Kalkaji i.e. Village Bahapur is on
page No.16 at Sr.No.64. The rate as given at
the booklet is R.160/- per sq.yd for residence
and Rs.150/- per sq.yd for commercial
purpose valued sometime in 1965. My spot
visit dated 14.5.1979 has ruled out the
possibility of the area being the commercial
one because of the reasons given above and
also its comparative nearness of the Kalkaji
Ext. colony than the industrial area. The
record also reveals that the said land is in
Government possession since 1972 prior to
the enactment of Urban Ceiling Act.
For the purpose of this award the
whole area is divided into three groups.
Group A, B & C. Group A comprises of 29
Bighas 1 Biswas pertaining to
Kh.No.1773/1200/559/1/1 & Group B
comprises of Kh.No.1610/1195/558 min &
1611/1195/558/2 total area measuring 18
bighas 5 biswas & Group C consists of
Kh.No.1612/1195 & 542 min (13-15) & less
than biswas respectively. There is built up
area in Kh.No.1773/1200/559/1/1 &
1611/1195/558/2. The land of these khasra
numbers is acquired under the present
award and since the built up structure is
prior to the date of notification u/s 4 the
award for the structure will be drawn
separately after valuation report for those
structure is received from Asstt.Engineer
(Valuation). Block A consists of level Pahar
land. The rate of Rs.60/- per sq.yd
prescribed by the Government of India,
LA APP. Nos.109/2013 & 76/2013 Page 9 of 66

Ministry of Works, Housing and Supply in
that booklet is in respect of developed land
for the year 1965 and as such some margin
will have to be given before arriving at the
market value of the land under acquisition.
After deducting 20% on account of
development charges and allowing interest
@ 6% w.e.f. 1.1.66 to 30.6.78 I assess the
compensation at Rs.84/- per sq.yd for the
land placed in Block A. Land in Block B is
not level and is full of stones and some
gaddles and will have to be filled up in
order to make it a level land. Lot of
expenditure will have to be incurred in
making it a level land. In respect of this land
I consider that 40% on account of
development charges be deducted from the
rate of Rs.60/- per sq.yd fixed for the
development land. After allowing the
increase @ 6% I assess the compensation at
Rs.63/- per sq.yd in respect of the land
placed in Block-B. Land placed in Block C
is sloppy & Khal land. In respect of this land
also heavy investment will have to be made
to level and develop the land and to bring it
upto the level of Block-A & B. I, therefore,
consider that 60% development charges will
have to be incurred and after allowing
interest of 6% w.e.f. 1.1.86 to 30.6.78 I
assess the compensation at Rs.42/- per sq.yd
for the land placed in Block-C. The rate of
Rs.60/- is for the year 1965. Therefore,
allowance will have to be made for the
increase in prices of the land as the land
under acquisition was notified u/s 4 of the
L.A Act on 30.6.1978.
TREES
LA APP. Nos.109/2013 & 76/2013 Page 10 of 66

There are some very small trees of natural
growth here and there in the land pertaining
to Block-C of this award but neither the
revenue record show their existence nor
anybody had made any claim for these trees.
Therefore, no compensation has been
assessed for them.
STRUCTURE
There are some structures existing on
Kh.No.1773/1200/559/1/1 and
1611/1195/558/2 which according to
revenue record exist at the time of
notification u/s 4 of the L.A Act. A letter for
valuation of the structure is being written to
the Asstt.Engineer (Valuation) and when the
valuation report for the said structure is
received a supplementary award will be
given in respect of the structure only.
15% SOLATION
15% solatium will be payable over and
above the market value of the land so
assessed.
APPORTIONMENT
Compensation will be paid to the interested
persons on the basis of the latest entries in
the revenue record. In case of dispute, which
may not be settled as per the provisions of
L.A Act the matter will be referred to the
Court of A.D.J. for adjudication u/s 30-31 of
the L.A.Act.

LAND REVENUE DEDUCTION

The land under acquisition is assessed
at Rs.6.93 N.P. as land revenue which will
be deducted from the Khalsa Rent Roll of the
Village from the date of taking over
possession of the land.
LA APP. Nos.109/2013 & 76/2013 Page 11 of 66


SUMMARY OF THE AWARD
The award is summarized as under:-

(Rupees Forty Nine Lac Five Thousand Five Hundred
Fifty Nine and Paisa Thirty one only)"


23. Now, a brief look at the evidence adduced on behalf of the
parties and its analysis by the Reference Court would be necessary to
test whether the market value arrived at as well as the computation of
the entitlement of compensation to the appellants by the Reference
Court is justifiable or requires alterations.
24. Mr.T.C.Narang, Assistant in the DDA (AW-1) deposed that plot
Nos.71 to 84, 43 & 98 were auctioned by the DDA on 28.01.1977.
Plot No.43 was auctioned for 2,09,52,000/- to M/s.Ansal Properties
and Industries Pvt. Ltd (area 1011-7141 sq.mts). Plot No.98,
approximately of the same area was auctioned/sold for
LA APP. Nos.109/2013 & 76/2013 Page 12 of 66

Rs.1,93,01,000/- to M/s.Skippers Towers Pvt. Ltd. However, it was
stated by AW-1 that he did not have any personal knowledge of the
auction nor was aware of the potentialities of the plots which had been
auctioned. However, it was further deposed that the plots were in the
developed area for multi storied buildings which were duly approved
by the DDA.
25. The Reference Court did not consider the aforesaid sale prices
for the reason that those plots of land which were auctioned/sold in
1977 were not comparable to the land acquired as the aforesaid
auction sales were in Nehru Place which had a high commercial value.
26. Mala Singh, Patwari Revenue, Delhi (AW-2) proved ak-shijra,
(village map) (Exh.AW-2/1) and stated that it had been prepared by
her from the original. The portion inside the red line was Nehru Place
and though the distance was not written in the original but it was
mentioned in the red ink on the copy of the same. The measurements
were made at the spot and only thereafter the distance according to the
measurement was mentioned. In cross examination, PW-2 confessed
of her not being entitled to make any entry in red ink, strictly as per
rules. The aforesaid measurement was made at the instance of the
claimant. No application was received for taking any measurement at
the spot.
27. Yad Ram, Naib Tehsildar (AW-3) has proved the chief data
(AW-3/1) and stated that the acquired land is about 1000 to 1500
yards away from Nehru Place. On inspection of the spot, he found an
existing water tank.
LA APP. Nos.109/2013 & 76/2013 Page 13 of 66

28. Shambhu Nath, appellant No.2, AW-4; claimant and one of the
witnesses who was cross examined by DDA categorically stated that
the acquired land was situated 300 yards away from Nehru Place
Complex and was in close vicinity of old and new Chirag Delhi road.
Adjacent Chirag Delhi road was an industrially developed area and a
water tank existed there. Even in the cross examination, AW-4 has
admitted that Nehru Place is a commercial area and Kalkaji Colony
which is a developed area is about 1000 sq.yards from Bahapur, the
village where the land was acquired. In the cross examination of AW-
4 by the DDA, AW-4 stated that the land in question was a rocky land.
A water treatment plant had existed over 17 bighas and 1 biswas of
land since 1972. No permission had been taken from him nor by the
MCD or Delhi Jal Board for the construction of the water treatment
plant and nothing was paid to him also in lieu of his being displaced
from the aforesaid area. In the same khasra, in 2 bighas of land two
godowns of NCERT existed before 1972. AW-4 however, was not
aware whether the land in question had been reserved as a green area.
Out of the remaining area where water treatment plant was
constructed, there were staff quarters for the employees of Delhi Jal
Board. It was admitted that the area of Nehru Place was earmarked as
commercial as per the master plan. It was submitted by him that
Greater Kailash-II is approximately 1 km from the land in question but
forms part of the same revenue estate. The suggestion that the rates of
land in Greater Kailash-II are not comparable to the acquired land was
denied.
LA APP. Nos.109/2013 & 76/2013 Page 14 of 66

29. SC Sharma, Clerk Land & Development Office (AW-5) and
Harbhajan Lal, LDC, DDA (AW-6) submitted that the schedule of
rates (AW-5/1) had been issued by the DDA but under what
circumstances the schedule or rates were prepared were not known to
both of them.
30. Munni Lal Bajaj (AW-7), another witness who was cross
examined by DDA has deposed that he owned two bighas of land in
the area which was acquired and over which he constructed four
godowns in the years 1966, 1968, 1972 and 1973. The aforesaid
godowns were rented out to NCERT and he received Rs. 3258/- per
month as monthly rental for all the godowns. AW-7 admitted the
existence of a factory at a distance of 50 yards from his land and
existence of other factories at about 1-1.5 furlong from his land. He
also admitted of a water overhead tank through with water was
supplied to Lajpat Nagar, Kalkaji etc. He was also not aware whether
the area was a green area in the master plan and stated that the
godowns were assessed to house tax.
31. The Reference Court with respect to the aforesaid evidence has
inferred that if the godowns over 200 sq.yards of land were fetching a
monthly rental from a Government body to the tune of Rs.3258.80/-,
its multiplication by 16 years of rental value would be a safe method
of assessing the market value of the property. If that method of
computation is used, then the market value of the property would
come to Rs.625689.60 for one bigha of land and after deducting 50%
of developmental charges, it would come to Rs.3,12,844.80/-. The
Reference Court thereafter went on to state that if Rs.1,00,000/- and
LA APP. Nos.109/2013 & 76/2013 Page 15 of 66

odd is considered to be the value of the construction of the godown,
then the value of land comes to Rs.2,00,000/- per bigha, thus giving
the value of the land at Rs.200/- per sq.yards. If 12½% is deducted out
of this amount as price of land to be left for passages etc, then the
value comes to Rs.175 per sq.yard.
32. Raghunath, LDC, DDA (AW-8) had brought the original lease
deeds which were executed on behalf of the DDA (copies of which are
exhibits AW-8/1 to AW-8/5). However, he has stated that he has no
personal knowledge about those lease deeds and he has not even seen
Nehru Place.
33. A.D.Chhabra, LDC in the office of Sub Registrar (AW-9) also
claimed to have brought the lease deeds referred to above.
34. Anand Prakash, LDC, Municipal Corporation of Delhi (AW-10)
stated that there is a water tank in Kalkaji, maintained by the
Corporation but he would not know the khasra number where the
water tank is situated. The water tank was stated to be very near
Kalkaji temple. The Municipal Corporation of Delhi, for supplying
water to Kalkaji and Gobindpuri took usual charges.
35. On behalf of the Union of India, Radhey Mohan Lal, Assistant
Director of Development and Control Wing, New Delhi (RW-1) and
Narinder Nath Seth, Tehsildar Land and Building Department (RW-2)
offered their evidence. RW-1 deposed that the acquired land was
meant for district parks, playgrounds and open space and the land fell
under the green area. In the cross examination, he has stated that the
land was surveyed by the surveyor only two days ago before giving
his evidence. He also admitted of existence of a publication division
LA APP. Nos.109/2013 & 76/2013 Page 16 of 66

of NCERT and a water tank over the acquired land. The rest of the
land was hilly area. RW-1 did not have any personal knowledge
whether there was another factory in the vicinity or that the godowns
of AW-7 were rented out to a Government organization.
36. RW-2 who had surveyed the plot on instructions deposed that
towards the north of the land there is an industrial area and old Chirag
Delhi road is on the left side of the road which is about 100 yards
away. The existence of water tank and residential quarters have not
been denied. He has proved the copy of his report Exh.RW-2/1.
37. The DDA, as stated earlier, examined two of the witnesses on
its behalf. Sh.Raj Singh, Land Management branch, (R2W1) stated
that the area in question was 29 bighas and 5 biswas. In an area of
about 2 bighas and 2 biswas, godowns were constructed and a water
treatment plant of Delhi Jal Board existed over approximately 17
bighas and 1 biswas of land. The remaining area of 10 bighas was
stated to have been converted into a district park, however, the
boundaries of the khasra were not demarcated and he was not aware as
to whether the land use had been changed in Delhi. Mr.Arun Kumar
Vashisht, R2W2 testified before the Reference Court that
identification of khasra is not done by the planning department but by
the land department as per the master plan. The master plan of Delhi,
it was stated, does not specify any khasra number.
38. The following exemplars with regard to lease of land at Nehru
Place were produced in evidence on behalf of the appellant:-

LA APP. Nos.109/2013 & 76/2013 Page 17 of 66

39. The learned Reference Court, with respect to the aforestated
evidence was of the opinion that such evidences would not be relevant
as the land acquired cannot be equated with Nehru Place complex. The
relevant portion of the judgment of the Reference Court on the
aforesaid issue is as hereunder:-
"…..Which by no stretch of
imagination can be equated with the land in
dispute. The land comprised in Nehru Place
complex has been ear-marked for one of the
biggest markets in Asia and with a provision
of multi-storey buildings and with
arrangements for providing all facilities in
that area needed for multi storey buildings.
The trend of the market value of the
leasehold rights sold in Nehru Place
Complex has been ear-marked for one of the
biggest markets in Asia and with a provision
of multi-storey buildings and with
arrangements for providing all facilities in
that area needed for multi storey buildings.
The trend of the market value of the
leasehold rights sold in Nehru Complex
makes it abundantly clear that as the area
comprised within Nehru Place complex is
gaining more importance the market value
of lease hold rights is leaping many folds. In
LA APP. Nos.109/2013 & 76/2013 Page 18 of 66

1973, the plots in Nehru Place complex were
sold from about Rs. 1125/- about to Rs.
3,000/- per sq. meter. In 1977, those were
sold for near about Rs. 20,000/- per sq.
meter and as per newspapers reports in
1980, the same have been sold at about Rs.
50,000/- per sq. meter. It does not mean that
the market value of the land, may be for
residential or commercial purposes has
increased by such proportions in the locality
as in the Nehru Place Complex. The sale
deed of Greater Kailash -II produced by the
claimant itself shows that the land in dispute
cannot be equated with the land of Nehru
Place. The land sold in Greater Kailash-II
of which sale deed has been produced on
record, was sold in December, 1978 at Rs.
1200/- per sq. yard. That land was of shops
in a commercial area and is hardly about a
mile even less from Nehru Place. The market
value cannot fluctuate to such an extent as is
evident from the documents. It merely shows
that Nehru Place had its own special
importance as far back as 1973, the prices
of lease-hold right were varying between Rs.
1175/- to Rs. 3,000/- per sq. meter and in
1977 it was about Rs. 20,000/- per sq. meter
and in 1980 it is about Rs. 50,000/- per sq.
meters. Thus it is clear that this land cannot
by no stretch of imagination be equated with
the land of Nehru Place Complex."


40. Exhibit AW-5/1 is the schedule of market rate issued by the
Ministry of Works and Housing, Land Development Office in 1976
effective from 01.04.1979 to 31.03.1981. It has been clarified that the
rates fixed by the Government are meant for specific purposes namely
LA APP. Nos.109/2013 & 76/2013 Page 19 of 66

calculation of various charges on account of unearned increase,
temporary or permanent change of purpose and regularization of
misuse/unauthorized construction in a leasehold property under the
control of the office. As an introductory, it was made clear that the
rates may not be the market rates of the land. The Reference Court has
taken the view that the value of land for residential purposes at item
no.11 of group 5 namely Kalkaji has been fixed at Rs.400/- per
sq.yard for residential purposes and Rs.800/- per sq.yard for
commercial purposes.
41. The Reference Court has computed the market value on the
basis of the aforesaid booklet after necessary deductions at Rs.250/-
per sq.yard:-
" 48. The third piece of evidence is
booklet issued by the Ministry. Though the
booklet which has been issued in 1976 as is
apparent from the fact that number of
notification is mentioned L &
DO/5/2/76/CDM yet value applicable was
from 01.04.1979 to 31.03.1981. The value of
land for residential purposes at item no. 11
of Group 5 is mentioned at Rs. 400/- per sq.
yard about residential land and Rs. 800/-
per sq. yard about commercial land. That
value is of leasehold rights. If value of
ownership right is considered to be 25
percent more, then the value come to Rs.
500/- per sq. yard. If 50 percent is deducted
out of it considering the fact that the value is
of smaller plots and it includes development
charges as also the fact that the land in the
present case was of green belt, the value
comes to Rs. 250/- per sq. yard."
LA APP. Nos.109/2013 & 76/2013 Page 20 of 66


42. Exhibit AW-3/1 is the chief data of the acquired land. The
relevant portion of which is as hereunder:-
"These are the proceedings for
determination of compensation U/s of the
land Acquisition Act. The land under
acquisition is situated in village Bahapur
and was put under notification U/s 4 of the
land acquisition Act Notification
No.F.9(13)/76-L&B dated 30-6-78 for a
public purpose namely for the planned
development of Delhi. After considering
objections U/s.5-A the Delhi Administration
issued a declaration U/s.6 of the Land
Acquisition Act for the acquisition of an
area measuring 62 bighas 1 biswas vide
notification No.F.9(13)/76-L&B/Vol/ii dated
19-2-1979. In pursuance of the aforesaid
notification notice U/s 9 & 10 of the LA Act
were issued to all the interested persons in
the land under acquisition and the claims
filed by them are discussed under a separate
heading "compensation claims". True and
correct Area.

The land was measured on the spot by
the Land Acquisition Field Staff alongwith
representative of the requiring department
and the available area found at the spot is
as under:-

Field No. Area Kind of soil

542 min Less than biswas Banjar Qadium
1611/1195/
558/2 1-1 G.M.Dharamshala
1612/1195/ 13-5 G.M.Pahar
LA APP. Nos.109/2013 & 76/2013 Page 21 of 66

1610/1195/
5581/4 min 1804 G.M.Pahar
(According
to Jamabandi)
1773/1200/
559/1/1 29-1 G.M.Pahar
____
62-1
Classification The land is situated
of the area approximate 100 yds. of
G.M.Dharamshala 1-1 Kalka Temple and
G.M.Pahar 61-0 Kalka Temple is
Situated of V-Bahapur
Banjar Qadium
Less than biswas
_____
62-1

1. As per revenue record the kind of land of
Kh.no.1610/1195/558 is G.M.Dharamshala.
But there is not Dharamshala on
Kh.No.1610/1195/558.


2. As per Kh.Girdwari for the year 1972 to
1978 Kh.No.1612/1195/558 &
1773/1200/559/1/1 entry is ownership in the
name of Sarkar Dolatmadar and in
possession of land and building ownership
entry is wrong. The record is prepared
according to Jamabandi."


43. Exhibit PX2 is the sale deed dated 23.12.1978 by one S.K.Sood
of a commercial plot in Greater Kailash-II, an area of village Bahapur.
The sale is at Rs.1200/- per sq.yard. The Reference Court is of the
opinion that if a residential property can fetch half the value of the sale
LA APP. Nos.109/2013 & 76/2013 Page 22 of 66

rd
price, then the value would come to Rs.600 per sq.yards. If 1/3 of the
value is deducted considering that the land was a small piece of land
then the value of land comes to Rs.400/- per sq.yard. If 50% of the
aforesaid amount is considered to be taken out for developmental
charges then the value would come to Rs.200/- per sq.yards.
44. The Trial Court at para 47 has held as under:-
" 47. Next piece of evidence is sale deed of
commercial plot in Greater Kailash Part-II.
That sale is of Rs. 1,200/- per sq. yard. If it
is considered that residential property can
fetch half of the value, then the value comes
to Rs. 600/- per sq. yards. If 1/3rd of the
value is deducted considering that the land
was smaller piece of land, then the value
comes to Rs. 400/- per sq. yard. Out of 50
percent is considered to be development
charges, then the value comes to Rs. 200/-
per sq. yards."

45. Exhibit PX3 is the Gazette notification dated 03.06.1966
declaring that the revenue estate of Bahapur is not included in the rural
area and ceases to be so.
46. AW-6/1 is the statement of commercial plots auctioned by DDA
in Nehru Place.
"Statement of Commercial plots, auctioned by DDA in Nehru
Place

LA APP. Nos.109/2013 & 76/2013 Page 23 of 66

47. The materials which have been relied upon by the DDA are:-
i) Exhibit RW-2/1
ii) Some judgments have also been relied upon by the DDA
wherein the market value with respect to plot which was
notified on 13.11.1959 in the revenue estate of Bahapur
has been assessed at Rs.2000/- per bigha (market value of
Gair Mumkin Dharamshala) and Rs.800/- per bigha for
Gair Mumkin Pahar. The Reference Court held the
market value to be Rs.4000/- per bigha instead of
Rs.2000/- per bigha.
iii) Another judgment with respect to the same date of
notification for the revenue estate of Bahapur where the
market value of Block C was fixed at Rs.6800/- per
bigha.
iv) Exhibit R-3, the judgment passed in LAC No.334/2010
wherein the market value of Block C has been computed
at Rs.2000/- per bigha.

LA APP. Nos.109/2013 & 76/2013 Page 24 of 66

48. Exhibit RW-2/1 is the copy of the report of Narinder Nath Seth
of the Land and Building department who has given the location of the
plot and has stated about the entire land being a rocky place, the report
inter-alia states that there is no greenery in and around the place and if
the potential value of an under-developed land is taken into
consideration the same would not fetch more than Rs.10/- per
sq.metre.
49. The sum and substance of the argument on behalf of the
appellants before the Reference Court was that the location of the land
is adjacent to Nehru Place at a distance of 300 yards and is located
opposite to Okhla Industrial Estate; the nearest factory is at a distance
of 50 yards from the acquired land; the adjoining areas are Kalkaji
Extn. Residential colony and Kalkaji Temple; there are two public
roads on two sides of the land; the nature and character of the land has
been characterized as leveled pahari land; availability of a water
treatment plant with residential quarters over 17 bighas of land; two
godowns of NCERT, a Government organization over 2 bighas of land
fetching reasonably good amount per month as rental; the area being
commercial is just opposite to Nehru Place and Okhla Industrial area;
the area could also be taken as residential as it is near to Kalkaji Extn.
Colony.
50. Additionally, it was submitted on behalf of the appellants before
the Reference Court that not only the character of the land but its
future potential would also be a relevant indicator and a piece of
evidence in determining the market value. That multi storied buildings
could come up in the acquired land is also not to be lost sight of and
LA APP. Nos.109/2013 & 76/2013 Page 25 of 66

assessment, per force is required to be made on the basis of
hypothetical building schemes for the purposes of judging the
price/market value of the land in question. It was suggested to the
Reference Court that if at all the acquired land did not have the level
of development as that of Nehru Place, 10 to 25% could reasonably be
deducted towards the cost of development. The highest of the
exemplars submitted by the appellants, it was urged had to be taken
into account and was required to be given a primacy. The appellants
completely rejected the evidence offered especially Exhibit RW-2/1 as
inadmissible. The witness who appeared on behalf of DDA was not an
expert that his opinion could have had no fault. The contention of the
DDA that the land acquired fell in the green area has not been
supported by any document or cogent and positive evidence regarding
the same. What the Land Acquisition Collector lost sight of was that
the Nehru Place was extended by 20 acres which also originally was
not green belt and that the user of the land had been changed by the
Government before acquisition or else water treatment plant would not
have been constructed over major portion of the acquired land.
51. The Union of India (respondent No.1) made a fervent plea that
the sale deeds could not have been taken as correct exemplars as
neither the vendor nor the vendee were examined to prove those
documents; AW-8, the LDC of the DDA did not have any personal
knowledge of the contents of the sale deeds and ignorance was
expressed by other witnesses including AW-1 about the potentiality or
quality of land. It was submitted that the sale deed of the land of
LA APP. Nos.109/2013 & 76/2013 Page 26 of 66

Greater Kailash-II was not helpful as it related to a completely
developed plot whereas the land acquired was admittedly a hilly tract.
52. Similarly, the DDA (respondent No.2) came up before the
Reference Court with the plan that there is no dispute regarding the
nature and character of land as being Gair Mumkin Pahar and had no
similarity to the leased/sold properties of Nehru Place. The deposition
of the witnesses offered on behalf of the appellants were assailed on
the ground that the same do not make out any special case for the
appellants to have a market value of the land acquired enhanced any
further. A great stress was laid on the fact that the area of the land
acquired was under green cover and, therefore, the potential of the
land and the same becoming commercial in future was out of question.
53. The reference court framed the two issues namely
1. What was the market value of the acquired as on
the date of issuance of notification u/s 4 of the LA
Act, and
2. To what enhancement in compensation, if any, are
the petitioners entitled.

54. With respect to issue No.1, the Reference Court held that the
market value of the land in question is Rs.250/- per sq.yard.
"50. Petitioners have only led emphasis on
adducing the evidence pertaining to the
market value of the acquired land in
question. No evidence has been led with
regard to clause secondly, thirdly, fourthly,
fifthly and sixthly the petitioners are failed
to show before this court that the land in
question was having standing crops/ trees if
any or the petitioners suffer very losses on
account of severance from such land or due
LA APP. Nos.109/2013 & 76/2013 Page 27 of 66

to acquisition of the land in question.
Property of the petitioners movable or
immovable was injuriously affected or
because of the acquired land in question the
petitioners were compelled to change his
residence or place of business incidental to
such change. However, on the other hand,
Ld. counsel for DDA has highlighted the
submission of the petitioners that the
acquired land was an abundant land and
was a rocky land. It was not an agricultural
land and even no activities was carried on
by the petitioners before the acquisition of
the land by the government even till date the
land in question is developed as a
government park in few part of the land and
approximately 17 bigha of land is used by
DJB which is not a commercial activity
rather it is a public utility.

55. As per provisions under section 23 of Land
Acquisition Act, 1894 in determining the amount of
compensation to be awarded for land acquired
under this act there are number of criteria. The
first criteria under section 23 is the market value
of land at the date of publication of the notification
under section 4 sub section 1 of LA Act to which
the petitioners have led extensive evidence but as
regards the other provisions are concerned which
are the damage sustained by the person interested
by reason of the taking of any standing crops or
trees which may be on the land at the time of the
Collector’s taking possession, the damage
sustained by the person by reason of severing such
land from his other land, the damage sustained by
the person interested by reason of the acquisition
injuriously affecting his other property, the
interested persons are compelled to change their
LA APP. Nos.109/2013 & 76/2013 Page 28 of 66

residence or place of business incidental to the
acquisition, the damage resulting from diminution
of the profits of the land between the time of the
publication under section 6 and the time of the
Collector’s taking possession of the land. No
evidence has been led by the petitioners on
account of these factors. Hence, I hold the market
value of the land in question on the date of
notification under section 4 of LA Act i.e.
30.06.1978 as Rs. 250/- per sq. yards. Issue no. 1
is decided accordingly. "
(Emphasis provided)


56. With reference to issue no.2, the Reference Court held:-
ISSUE NO. 2

To what enhancement in compensation, if
any, are the petitioners entitled?

52.The petitioners are entitled to balance
amount of compensation @ Rs. 250/- per sq.
yards in respect of the acquired land in
question as per admitted statement under
section 19 of LA Act in this case.

RELIEF

53. Petitioners are entitled to interest @ 6
% p.a. from the date of notification under
section 4 and till the date of compensation
awarded by LAC. Petitioners are also
entitled to 15% p.a. solatium on the
enhanced amount of compensation, the case
being prior to the amendment of the LA Act
in the year 1984. No interest on solatium [in
the light of the judgment in RFA No.
387/1991 titled as Ramphool & Ors. vs.
UOI].
LA APP. Nos.109/2013 & 76/2013 Page 29 of 66

54. Reference is answered vide the above
award. Statement under Section 19 of the
L.A. Act be annexed to the award. Copy be
sent to the Land Acquisition Collector
concerned for information and necessary
compliance within a week from the date of
this order. As the acquired land has been
placed at the disposal of respondent no. 2 as
the ultimate beneficiary, the liability of the
respondents would be joint and several. No
orders as to costs."


57. Mr.Dhruv Mehta, learned senior advocate assailed the aforesaid
judgment of the Reference Court on the ground that it did not
appreciate the location and potential of the land and the five lease
deeds namely Exh.AW-8/1 to 8/5 actually gave a good guide for
coming to the market value of the acquired land. The lease deeds were
executed by the respondent No.2, the DDA, in favour of the lessees
and the plots were of an area ranging from 334 sq.mtr. to 740 sq.mtr.
The dates of the lease deeds, their respective area and the rate at which
premium was paid for acquisition should have been relied upon by the
Trial Court. All the exemplars pertained to the year 1973 whereas the
crucial date for the purposes of fixation of market value is 30.06.1978
i.e. the date of issuance of notification under Section 4 of the Act. It
was submitted that in the year 1973, the average of the five exemplars
referred to above came to Rs.2067/- per sq.mtr. and, therefore, on the
date of notification, interest of the claimants/appellants would have
been sub-served if an escalation at reasonable rates per annum could
have been super added to the aforesaid average of the exemplars.
LA APP. Nos.109/2013 & 76/2013 Page 30 of 66

58. It was further submitted that the acquired land has been
urbanized in 1966 for which there was sufficient evidence in the form
of existence of water treatment plant, godowns of NCERT, residential
quarters and factories etc on the acquired land and near the vicinity.
There was no reason for the Reference Court not to have assessed the
market value of the acquired land at commercial rate.
59. What was very seriously argued was that the lands in village
Jasola were acquired vide notification issued on 15.06.1979 in which
the lead case of Ram Chander & Ors vs. Union of India (RFA
No.416/1986) was decided on 19.10.2001. Another notification with
respect to land in Jasola was issued on 12.05.1986 in which the case of
Sri Naim Singh vs. UOI (RFA No. 667/98) was decided on
18.11.2004 by the Delhi High Court. In the aforesaid two cases, the
Delhi High Court relied upon the judgment passed in Bhola Nath
Sharma (the case of the appellant in the first round of litigation, RFA
No.65/1981) in which the market value of Rs.2000/- which was fixed
by the Delhi High Court with respect to land acquired in the revenue
estate of Bahapur was relied upon, thus, lending finality to the correct
determination of the market value of the land in question. It is
submitted that the reference of the Delhi High Court judgment with
respect to acquisition of land of village Jasola should have been taken
into consideration by the Reference Court as it was most relevant for
the purposes of determination of the market value of the acquired
land.
60. The further challenge to the aforesaid judgment was on the
ground that the Reference Court did not award statutory benefits under
LA APP. Nos.109/2013 & 76/2013 Page 31 of 66

Section 23(2) & Section 28 of the Act in accordance with the law laid
down in the case of Sunder vs. Union of India, 2001(7) SCC 211 and
Union of India vs. Raghubir Singh wherein it was specified that the
land owner is entitled to an interest under Section 28 at the rate of 9%
per annum for the first year from the taking over of the possession or
the date of award whichever is earlier and 15% thereafter till the
making of the payment of enhanced compensation in the matters
which are decided after 30.04.1982. Mr.Dhruv Mehta, learned senior
advocate thus submitted that it would have been only fair on the part
of the Reference Court to have seen the line of reasoning given by the
Delhi High Court for assessing the market value of the land in
question on the date of notification and that the argument of the
respondents that there was a direction by the Supreme Court of not
being influenced by any judgment of the High Court or Supreme
Court justifying the Reference Court in not at all adverting to the
aforesaid judgment of the Delhi High Court was absolutely untenable
and unjustified. There was no reason to get influenced by any of the
observations in the aforesaid judgment but it could have given a good
guiding light to the Reference Court to have decided the issue in
accordance with law.
61. Mr.S.K.Pathak, learned advocate for the Union of India and
Mr.Kunal Sharma, learned advocate for the DDA (respondent No.3)
have supported the reasoning given by the Reference Court for
coming to the market value of the land in question.
62. Now in order to appreciate the contentions of the parties for
fixing the market rate of the acquired land, it is necessary to refer to
LA APP. Nos.109/2013 & 76/2013 Page 32 of 66

the provisions of Sections 23 & 24 of the Land Acquisition Act, 1984
as also the case laws with regard to the principles on which the market
value of the acquired land is to be assessed for the purposes of
determination of the compensation to be granted to the claimants/land
owners.
63. Section 23 of the Land Acquisition Act, 1894 deals with matters
to be considered in determining compensation:-
“ 23. Matters to be considered in
determining compensation -(1) In
determining the amount of compensation to
be awarded for land acquired under this
Act, the court shall take into consideration-
first, the market value of the land at the
date of the publication of the notification
Under Section 4 , Sub-section (1).
secondly, the damage sustained by the
person interested, by reason of the taking of
any standing crops or trees which may be on
the land at the time of the Collector's taking
possession thereof;
thirdly, the damage (if any, sustained by the
person interested , at the time of the
Collector's taking possession of the land, by
reason of severing such land from his other
land;
fourthly, the damage (if any), sustained by
the person interested, at the time of the
Collector's taking possession of the land, by
reason of the acquisition injuriously
affecting his other property, movable or
LA APP. Nos.109/2013 & 76/2013 Page 33 of 66

immovable, in any other manner, or his
earnings;
fifthly, if, in consequence of the acquisition
of the land by the Collector, the person
interested is compelled to change his
residence or place of business, the
reasonable expenses (if any) incidental to
such change; and
sixthly, the damage (if any) bona fide
resulting from diminution of the profits of
the land between the time of the publication
of the declaration Under Section 6 and the
time of the Collector's taking possession of
the land.
(1A) In addition to the market value of the
land above provided, the Court shall in
every case award an amount calculated at
the rate of twelve per centum per annum on
such market value for the period
commencing on and from the date of the
publication of the notification Under
Section 4 , Sub-section (1), in respect of such
lend to the date of the award of the
Collector or the date of taking possession of
the land, whichever is earlier.
Explanation- In computing the period
referred to in this sub-section, any period or
periods during which the proceedings for
the acquisition of the land were held up on
account of any stay or injunction by the
order of any court shall be excluded.
(2) In addition to the market-value of the
land, as above provided the court shall in
every case award a sum of thirty per centum
LA APP. Nos.109/2013 & 76/2013 Page 34 of 66

on such market-value, in consideration of
the compulsory nature of the acquisition.”
64. Section 24 of Land Acquisition Act, 1894 with regard to the
matters to be neglected in determining the compensation:-
“ 24. Matters to be neglected in determining
compensation. - But the Court shall not take
into consideration-first, the degree of
urgency which has led to the acquisition;

secondly, any disinclination of the person
interested to part with the land acquired;

thirdly, any damage sustained by him which,
if caused by a private person, would not
render such person liable to a suit;

fourthly, any damage which is likely to be
caused to the land acquired, after the date of
the publication of the declaration under
section 6, by or in consequence of the use to
which it be put;

fifthly, any increase to the value of the land
acquired likely to accrue from the use to
which it will be put when acquired;

sixthly, any increase to the value of the other
land of the person interested likely to accrue
from the use to which the land acquired, will
be put;

seventhly, any outlay or improvements on,
or disposal of, the land acquired,
commenced, made or effected without the
sanction of the Collector after the date of the
publication of the [notification under section
4, subsection(1); [or]
LA APP. Nos.109/2013 & 76/2013 Page 35 of 66


eighthly, any increase to the value of the
land on account of its being put to any use
which is forbidden by law or opposed to
public policy.”

65. The law with respect to calculation of the market value of the
acquired land and the compensation to be given to the landlords is
well established. Section 23 of the Act clearly lays downs the
principles.

66. Market value of the land means what a willing purchaser would
pay to a willing seller for the property having regard to the advantages
available to the land and the development activities which may be
going on in the vicinity and the potentiality of the land.
67. While fixing the market value of the acquired land, what are
required to be kept in mind are the geographical situation of the land;
the existing use of the land and the location as well as other
advantages appurtenant to the land. The market value of the other land
situated in the same locality or adjacent locality would also be an
important factor for determination of the reasonable market value of
the acquired land.
68. In Viluben Jhalejar Contractor vs. State of Gujarat , (2005) 4
SCC 789, the Supreme Court laid down the following principles for
determination of market value of the acquired land:-
17. Section 23 of the Act specifies the
matters required to be considered in
determining the compensation; the principal
among which is the determination of the
market value of the land on the date of the
LA APP. Nos.109/2013 & 76/2013 Page 36 of 66

LA APP. Nos.109/2013 & 76/2013 Page 37 of 66

Positive factors Negative factors
(i) smallness of size (i) largeness of area
(ii) proximity to a
road
(ii) situation in the interior at
a distance from the road
(iii) frontage on a
road
(iii) narrow strip of land with
very small frontage compared
to depth
(iv) nearness to
developed area
(iv) lower level requiring the
depressed portion to be filled
up
(v) regular shape (v) remoteness from developed
locality
(vi) level vis-a-vis
land under acquisition

for determining the market value of the land as aforesaid method is
more preferable than computing the valuation of the land on the basis
of capitalization of net income method or by taking expert opinion.
The reason for the same is that a willing purchaser would always pay
the same price which was fetched of other land with same
geographical location and advantage.

70. In Karnataka Urban Water Supply and Drainage Board vs.
K.S.Gangadharappa & Ors , (2009) 11 SCC 164, the Supreme Court
held that when sale is within a reasonable time of the date of
LA APP. Nos.109/2013 & 76/2013 Page 38 of 66

notification under Section 4(1); it is a bona fide transaction and the
sale is of the land adjacent to the land acquired having similar
advantages, it remarkably reduces the element of speculation in
fixation of market value of the land with reference to comparable
sales.
71. Similar view was taken by the Supreme Court in Land
Acquisition Officer vs. T.Adinarayan Setty , AIR 1959 SC 429 and
Ravinder Narain vs. Union of India , (2003) 4 SCC 481.

72. In Mahabir Prasad Santuka and Ors. vs. Collector, Cuttack
and Ors. (1987) 1 SCC 587, the Supreme Court took into account the
evidence on record and found that the land in dispute was adjacent to
the industrial area which included number of factories and came to the
conclusion that it had the potential of future course as factory or
building site. It was held by the Supreme Court in Mahabir Prasad
Santuka and Ors. (Supra) at para 6 as follows:-
“6. The High Court further held that since
the appellants had purchased the land at the
rate of Rs. 100 per acre in the year 1956,
they were not entitled, in any event, to
compensation more than Rs. 7,500 per acre,
this view is untenable. There is evidence on
record to show that the land which was
purchased in the year 1956 had no
potentiality at that stage, as Industrial acre
had not developed near the land. After the
setting up industrial area of Charbatiya the
price of the land situate in its vicinity had
increased tremendously. It is a matter of
common knowledge that price of land near
the vicinity of industrial area is bound to
rise. Admittedly the appellants' land is
LA APP. Nos.109/2013 & 76/2013 Page 39 of 66

situate near the industrial area, therefore its
value had increased and the High Court
committed error in ignoring this aspect by
determining the compensation. Plot No. 177
is a big plot having various sub-plots which
are owned by different persons. The
appellants are owners of Plots Nos. 177/16,
177/16-A, 177/17 and 177/17-A. The land
contained in other sub-plot Nos. 177/19,
177/10 and 177/7 was also acquired and the
compensation in respect thereof was
determined by High Court uniformly at the
rate of Rs. 15,000 per acre. There are five
judgments of the High Court on record in
respect of various sub-plots of Plot No. 177.
On a perusal of those judgments, it is
evident the High Court has awarded
compensation at the rate of Rs. 15,000 per
acre for the land which is quite adjacent to
the appellants land. The High Court has
observed in its Judgment in First Appeal No.
173 of 1971 connected with First Appeal No.
174 of 1971, Collector, Cuttack v.
Karunakar Mohanty, decided on October
21, 1975, that the Advocate General
appearing on behalf of the State conceded
that in view of the decision of the High
Court in respect of the similar land in the
vicinity it was not possible on his part to
question the valuation of the acquired land
as fixed by the Subordinate Judge at the rate
of Rs. 15,000 per acre. In that case plot No.
177/13 was the subject matter of the
acquisition. We have also perused a copy of
the map which is on record. We find that the
appellant's land is quite adjacent to those
plots which were the subject matter of the
decision in the appeals decided by the High
LA APP. Nos.109/2013 & 76/2013 Page 40 of 66

that there was no reason for the land owners to be paid at a low rate as
it would have created an unfair circumstance against the landlords in
the event of their being denied fair compensation which has been
awarded to the other claimants in respect of adjacent land.
74. The market value of the land is to be determined with reference
to the above market sale of comparable land in the neighbourhood by
a willing seller to a willing buyer on or before the date of notification
LA APP. Nos.109/2013 & 76/2013 Page 41 of 66

for acquisition. This is because such sale exemplars give a fair
indication of the market value of the land.
75. A “willing seller” is a person who is not acting under any
pressure to sell his property (in distress sale), he knows the advantages
and disadvantages of his property and sells the same after ascertaining
the prevailing market prices at fair and reasonable value.
Correspondingly a willing purchaser is a person who has a choice in
the matter of purchase of different properties and out of the choice, he,
voluntarily decides to buy a particular property by assessing its
advantages and disadvantages and the prevailing market value thereof.
76. Another issue which has gained general acceptance is that the
sale transactions under the registered sale deeds are to be assumed as
normal sales by a willing seller to a willing purchaser. However, in the
absence of such registered sale deeds, even auction sales, which stand
on a different footing, can be accepted if they are the only comparable
sale transactions available in terms of proximity in situation and
proximity in time to the acquired land.
77. The Supreme Court in Raj Kumar v. Haryana State , (2007) 7
SCC 609 has observed that the element of computation in an auction
sale makes them unsafe guides for determining the market value.
However, in Executive Engineer, Karnataka Housing Board vs.
Land Acquisition Officer, Gadag & Ors , (2011) 2 SCC 246, the
Supreme Court held as hereunder:-
“7. But where an open auction sale is the
only comparable sale transaction available
(on account of proximity in situation and
proximity in time to the acquired land), the
LA APP. Nos.109/2013 & 76/2013 Page 42 of 66

of any comparable sale exemplars, there was no difficulty in accepting
auction sales as well but with appropriate deductions which would
offset the competitive hike in valuation.
79. In Executive Engineer, Karnataka Housing Board (Supra), the
Supreme Court, taking into consideration the existence of gap of three
years between the relevant date for determination of compensation and
sale exemplars and taking into account that the acquired lands were
within the municipal limits with considerable development potential,
gave 10% increase per annum for three years for assessing the market
value on the concerned date.
80. With respect to the issue regarding compensation for acquisition
of a large piece of land on the basis of sale instances relating to
smaller pieces of land, the law is very clear that it would always not be
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an absolute rule that sale instances relating to small pieces of land are
unsafe guides and cannot be considered. Under certain circumstances
sale deeds of small pieces of land could be used for determining the
value of acquired land which is comparatively large in area.
81. In Land Acquisition Officer vs. Nookala Rajamallu , (2003) 12
SCC 334, it has been held:-
“6. Where large area is the subject-matter
of acquisition, rate at which small plots are
sold cannot be said to be a safe criterion.
Reference in this context may be made to
few decisions of this Court in Collector of
Lakhimour v. Bhuban Chandra Dutta
MANU/SC/0597/1971 : AIR 1971 SC
2015, Prithvi Raj Taneja v. State of M.P.
MANU/SC/0281/1977 :AIR 1977 SC 1560
and Kausalya Devi Bogra v. Land
Acquisition Officer MANU/SC/0241/1984 :
AIR 1984 SC 892.
7. 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.”
82. In Bhagwathula Samanna vs. Tehsildar and Land Acquisition
Officer , (1991) 4 SCC 506, it was held:-
13. The proposition that large area of land
cannot possibly fetch a price at the same
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385, the Supreme Court held as under:-

and Ors , (1996) 9 SCC 640, the Supreme Court gave a direction that
the Courts have to consider whether sales relating to smaller pieces of
lands are genuine and reliable and whether they are in respect of
comparable lands. In case said requirements are met, sufficient
deductions should be made to arrive at the just and fair market value
LA APP. Nos.109/2013 & 76/2013 Page 45 of 66

of large tracts of land. The time lag for real development and the
waiting period for development are also relevant consideration for
determination of just and adequate compensation. Each case depends
upon its own facts. In Basavva (Supra), the Supreme Court, on such
principle made a total deduction of 65% in determining the
compensation.
85. It is true that in normal course it would be an extremely difficult
proposition to look for sale instances of large tracts of land as they are
very few in number. More often than not similar plots are sold and
purchased and it would be rather harsh for the Courts to ask from the
claimants, sale instances of lands which are comparable in size to the
acquired land. The aforesaid principles of using, as an exemplar, sale
instances of small tracts of land with necessary deductions was
approved by the Supreme Court in the case of Special Land
Acquisition Officer and Anr. vs. M.K. Rafiq Saheb in (2011) 7 SCC
714.
86. A question arose as to what course is required to be adopted in
case several relevant exemplars are available before the Courts. The
Supreme Court in M.Vijayalakshmamma Rao Bahadur vs. Collector ,
(1969) 1 MLJ 45 and State of Punjab vs. Hansraj , (1994) 5 SCC 734
held that averaging the prices fetched by sales by different lands of
different kinds at different times may not lead to the correct result
regarding the market value of the land in question. Such method ought
not to be adopted regularly.
87. In Anjani Molu Dessai vs. State of Goa , (2010) 13 SCC 710
the Supreme Court held as under:-
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M.Vijayalakshmamma Rao Bahadur (Supra) and State of Punjab vs.
Hansraj (Supra).
89. If there are several exemplars with reference to smaller lands,
the safest proposition is to adopt the highest of the exemplars if it
appears to be a bonafide transaction. This principle is in accord with
the element of fairness in grant of compensation as a land owner is
entitled to the highest valuation of the land which a smaller located
land in the vicinity has fetched.

90. True it is that many a times it is not desirable to take the
average of the various sales deeds, but when the prices differ
diametrically, the average of the sale prices also could be taken for
determining the market value.
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91. What is of utmost importance is that justice to the land losers in
cases of compulsory acquisition be handed over. All attempts are
required to be taken to award fair compensation to the extent possible
on the basis of various factors and the assessment/methods of
assessment would vary with the facts of each and every acquisition.
92. It is really relevant, in case of acceptance of a sale instance of a
bonafide nature, to determine the percentage of hike, the percentage of
deductions, interests, solatium and interest on solatium.

93. In Haryana State Agricultural Market Board vs. Krishan Kumar,
(2011) 15 SCC 297, the Supreme Court reiterated the proposition that
if the value of small developed plots should be the basis, appropriate
deductions will have to be made towards the area to be used for roads,
drains and common facilities like park, open space etc. Thereafter,
further deduction will have to be made towards the cost of
development, that is, the cost of leveling the land, cost of laying roads
and drains, and the cost of drawing electrical, water and sewer lines.
94. Consistent view taken by this Court is that one-third deduction
is made towards the above heads is justifiable. Reiterating the rule of
rd
1/3 deductions towards development, the Supreme Court in Sabhia
Mohammed Yusuf Abdul Hamid Mulla vs. Land Acquisition
Officer , (2012) 7 SCC 595 held that in fixing the market value of the
acquired land which is undeveloped or under developed, the general
rd
approved deduction is to the extent of 1/3 of the market value.
95. In Kasturi vs. State of Haryana , (2003) 1 SCC 354, the
Supreme Court has held:-
LA APP. Nos.109/2013 & 76/2013 Page 48 of 66

7. It is not debated that the sale transaction
covered by Ext. P-7 relates to a small plot
and the land in question acquired is about
84 acres. This land comprising of a large
area is not developed although it has
potential value for residential and
commercial purposes. In order to develop
this land, roads were to be laid, provision
for drainage was to be made and certain
area was to be earmarked for other civic
amenities. Thus, after leaving the area in the
land required for the purposes mentioned
above, plots were to be made for residential
and commercial purposes by incurring
expenditure for other developmental works,
such as providing electricity, water etc. The
acquired land is not a small plot located in
such a way that no other development was
required at all and it could be utilized as it
is as a developed building site. It is well
settled that in respect of agricultural land or
undeveloped land which has potential value
for housing or commercial purposes,
normally 1/3rd amount of compensation has
to be deducted out of the amount of
compensation payable on the acquired land
subject to certain variations depending on
its nature, location, extent of expenditure
involved for development and the area
required for roads and other civic amenities
to develop the land so as to make the plots
for residential or commercial purposes. A
land may be plain or uneven, the soil of the
land may be soft or hard bearing on the
foundation for the purpose of making
construction; maybe the land is situated in
the midst of a developed area all around but
that land may have a hillock or may be low-
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lying or may be having deep ditches. So the
amount of expenses that may be incurred in
developing the area also varies. A claimant
who claims that his land is fully developed
and nothing more is required to be done for
developmental purposes, must show on the
basis of evidence that it is such a land and it
is so located. In the absence of such
evidence, merely saying that the area
adjoining his land is a developed area, is
not enough particularly when the extent of
the acquired land is large and even if a
small portion of the land is abutting the
main road in the developed area, does not
give the land the character of a developed
area. In 84 acres of land acquired even if
one portion on one side abuts the main road,
the remaining large area where planned
development is required, needs laying of
internal roads, drainage, sewer, water,
electricity lines, providing civic amenities
etc. However, in cases of some land where
there are certain advantages by virtue of the
developed area around, it may help in
reducing the percentage of cut to be applied,
as the developmental charges required may
be less on that account. There may be
various factual factors which may have to be
taken into consideration while applying the
cut in payment of compensation towards
developmental charges, maybe in some
cases it is more than 1/3rd and in some
cases less than 1/3rd. It must be
remembered that there is difference between
a developed area and an area having
potential value, which is yet to be developed.
The fact that an area is developed or
adjacent to a developed area will not ipso
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96. Thus the determination of the market value is prediction of an
economic event namely a price outcome of hypothetical sale
expressed in terms of probabilities.
97. In order to sum up the principles, the positive factors with
respect to the acquired land would be:- (i) smallness of size; (ii)
proximity to a road; (iii) frontage on a road; (iv) nearness to developed
area; (v) regular shape; (vi) leveled land etc. The aspects which would
reduce the market value of an acquired land would be (a) largeness of
the area; (b) distance from the road; (c) small or narrow frontage; (d)
unleveled land; (e) remoteness from the developed locality and (f) all
other issues over which a purchaser would be reluctant to acquire the
land.
98. The normal proposition is with regard to acceptance of the
market value on the basis of the highest exemplar, but where there are
several sales of smaller lands and prices range in a narrow bandwidth,
the average thereof can be taken as representing the market price. If
the values disclosed with respect to two lands vary substantially, it
would lead to the inference that either the lands are of dissimilar
nature or that the lesser value transaction is because of certain other
unfathomable factors. As a general rule if the sale instances are of the
same location, averaging is permissible.
LA APP. Nos.109/2013 & 76/2013 Page 51 of 66

99. With respect to the deductions towards development charges,
rd
the law seems to have been crystallized to deducting 1/3 in case of
undeveloped or under-developed areas but lesser deductions whether
not or less developed is required to be made for implementation of the
public purpose for which the land is acquired. If the acquired land is
having certain other advantages, for instance its nearness to developed
area, it could well be taken into consideration for reducing the
percentage of cut to be applied. The developmental charges in such
cases would be lesser on that account. What is not to be lost sight of is
that there is a difference between a developed area and an area having
a potential value which is yet to be developed. An area which is
developed or adjacent to a developed area would not necessarily make
it qualify for lesser deductions. The percentage of deductions for
development is to be calculated to arrive at the market value of the
land in question.
100. Another area where there has been, by now a unanimity of
opinion is the interest which is to be paid to the land owner. The
relevant statutory provisions of Sections 28 & 34 of the Land
Acquisition Act, 1894 are:-
“28 Collector may be directed to pay
interest on excess compensation . - If the
sum which, in the opinion of the Court, the
Collector ought to have awarded as
compensation is in excess of the sum which
the Collector did award as compensation,
the award of the Court may direct that the
Collector shall pay interest on such excess

at the rate of [nine per centum] per annum
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101. Thus the Land Acquisition Act, 1894 provides for payment of
interest to the claimants either under Section 34 or under Section 28 of
the Act. Section 34 of the Act enjoins upon the Collector to pay
LA APP. Nos.109/2013 & 76/2013 Page 53 of 66

interest on the amount of compensation at the rate of 9% per annum
from the date of taking possession until the amount is paid or
deposited. The proviso to Section 34 makes it very clear that if the
compensation amount is not paid or deposited within a period of one
year from the date of taking over possession, interest shall be payable
at the rate of 15% from the date of expiry of the period of one year on
the amount of compensation or part thereof which has not been paid or
deposited before the date of such expiry.

102. The interest which is paid under Section 28 of the Act is on the
awarded sum which is in excess of what the Collector has awarded as
compensation. This also has to be paid at the rate of 9% per annum for
the first year of taking possession and 15% per annum thereafter if the
amount of compensation was not paid or deposited within a period of
one year or deposited thereafter.
103. Though unlike under Section 34 where payment of interest is
mandatory, the award of interest under Section 28 is discretionary but
such discretion has to be exercised with proper care and
circumspection and in a judicious manner. While Section 34 of the
Act is couched in mandatory terms which are evident from the use of
the word “shall”, in Section 28 there is a use of the word “may” but
this does not give an uncontrolled power in the hand of the Court.
104. For quite some time there was a dispute with regard to the
liability of the State to pay interest on the amount envisaged under
Section 23(2) of the Land Acquisition Act which is ordinarily referred
to as solatium.
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105. The Constitution Bench in Sunder vs. Union of India , (2001) 7
SCC 211, relying upon the various decisions of the High Courts
especially the decision rendered in Punjab & Haryana High Court in
State of Haryana vs. Smt.Kailashwati and Ors , AIR 1980 P&H 117
held that the interest awardable under Section 28 would include within
its ambit both the market value and the statutory solatium. Thus a
person who is entitled to compensation awarded is also entitled to get
interest on the aggregate amount including solatium. The aforesaid
position of the Constitution Bench in Sunder (Supra) was further
clarified by a subsequent Constitution Bench judgment in Gurpreet
Singh vs. Union of India , (2006) 8 SCC 457.
106. In Gurpreet Singh (Supra), the Supreme Court held as
hereunder:-
“ 32. In the scheme of the Act, it is seen that
the award of compensation is at different
stages. The first stage occurs when the
award is passed. Obviously, the award takes
in all the amounts contemplated by Section
23(1), Section 23(1-A), Section 23(2) and
the interest contemplated by Section 34 of
the Act. The whole of that amount is paid or
deposited by the Collector in terms of
Section 31 of the Act. At this stage, no
shortfall in deposit is contemplated, since
the Collector has to pay or deposit the
amount awarded by him. If a shortfall is
pointed out, it may have to be made up at
that stage and the principle of appropriation
may apply, though it is difficult to
contemplate a partial deposit at that stage.
On the deposit by the Collector under
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34. The third stage occurs, when in appeal,
the High Court enhances the compensation
as indicated already. That enhanced
compensation would also bear interest on
the enhanced portion of the compensation,
when Section 28 is applied. The enhanced
amount thus calculated will have to be
deposited in addition to the amount awarded
by the Reference Court if it had not already
been deposited.

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107. After having seen the development of law with respect to
determination of market value of land for the purposes of grant of
compensation to the landowner and various statutory interests, we
proceed ahead to analyze the facts of this case for determining the
market value and whether the appellants are entitled to enhanced
compensation and if so to what extent as well as the rate of interest
which the claimant is required to be paid.
108. The evidence adduced on behalf of the parties clearly make out
that the land acquired is adjacent to one of the most prestigious
commercial centers of Delhi i.e. Nehru Place. The Reference Court
has also more or less accepted the proposition advanced on behalf of
the appellants that the acquired land is very near to the Nehru Place
commercial complex and is also situated very near to the well known
Kalkaji temple.
109. The report of the tehsildar of the area (Exh.RW-2/1) describes
the boundaries of the land. In the north of the acquired land is the
parking place of Kalkaji Temple and Okhla Industrial Area whereas
the south portion of the land is vacant. Nehru Place is at a distance of
300 mts. To the east of the land is Kalkaji Temple and there is vacant
land till the ring road in the west of the acquired land.
110. The evidences further reflect that a water tank was constructed
over the land prior to 1972. The presence of NCERT godowns,
residential quarters of Delhi Jal Board appurtenant to the water
treatment plant has not been disputed. The categorical assertion of the
witnesses on behalf of the appellants which has not been seriously
LA APP. Nos.109/2013 & 76/2013 Page 57 of 66

disputed by the evidence offered on behalf of the respondents is
location of a factory at a distance of 50 yards.
111. The Reference Court has clearly held on the basis of the
evidence that the land in question could not have been reserved for
being used as green belt or else such structures would not have been
there. The Reference Court also clearly spells out that on the date of
notification, the potentiality of the land is to be seen and not the
possible user of such land in future. If this was the line of reasoning of
the Reference Court, this Court is at a loss to understand as to why the
Reference Court was not prepared to accept the sale instances of the
neighbouring area which were prior in time to the notification.
112. It further appears that all modern facilities including road,
electricity and water is available in the area. This could be inferred
from the presence of the water treatment plant, residential quarters as
well as the factory. The presence of Okhla Industrial Area across the
road makes the acquired land commercial and developed. There is an
admission of the witnesses regarding two roads on either side of the
area acquired.
113. The nature of land is stated to be leveled and rocky. Such lands
are always most suited for multi storied buildings. The rocky but
leveled land in the vicinity of Nehru Place complex leaves no scope
for excluding the sale instances which have been offered by the
appellants as relevant exemplars for determining the market value.
114. The principle of determining the market value by keeping in
mind and entering into the shoes of a willing buyer or a willing
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purchaser has been applied uniformly without any departure for a very
long time. The potentiality has to be seen on the day of the notification
and which would include the positive or the negative factors regarding
the assessment of the market value. The acquired land has an
additional unique advantage of largeness. Such lands are most suitable
for any further development and use.
115. The sale instances given by the appellants are all of Nehru Place
and the area ranges from 334 sq.mts to 741 sq.mts. Thus the sale
instances are roughly of the same period which is prior to the
notification under Section 4 of the Act in the present case and there is
no substantial or diametrical divergence in the rates. The position of
law with respect to the sale exemplars have been noted. It is always
not necessary to insist for sale instances of the same size of land which
is acquired. Had it not been true, there was no necessity of reducing
the price to per sq.yard or per sq.mtr. The sale instances have the
endorsement and approval of the DDA (respondent No.2).
116. The logic of the Reference Court that the sale exemplars of the
Nehru Place cannot be taken into account as Nehru Place has a distinct
position in the commercial world is highly distorted and without any
substance. The grounds on which the sale exemplars have been
discarded by the Reference Court appears to be specious and
meretricious.
117. Admittedly, the distance between the acquired land and Nehru
Place is 300 sq.mtrs. There is no reason why the sale instances
available before the Trial Court could not have provided a good guide
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for determination of the market value. If at all, Nehru Place has a
distinct advantage of being highly developed commercial complex, the
same could have been accounted for by providing for deductions after
taking out the average of the sale exemplars. The contention of the
appellants that the non examination of either the vendor or the vendee
of the aforesaid sale instances renders those sale instances to be
inadmissible in evidence is being noted only to be rejected.
118. The evidence with regard to Exh.AW-1/1 is regarding lease
deed for larger tract of land. The same cannot be accepted as
comparable sale. Similarly, the instance regarding sale of shop in
Greater Kailash-II is also not acceptable because of the distance from
the acquired land. The sale instances namely Exh.AW-8/1 to AW-8/5
are of the year 1973, roughly about five years before the notification.
119. The determination of the market value by this Court in RFA
No.65/1981 vide judgment dated 21.08.1988 appears to me to be the
safest guide to arrive at a fair conclusion. In RFA No.65/1981,
referred to above, the average of the sale exemplars Exh.AW-8/1 to
AW-8/5 were taken to calculate the average rate per sq.yard, which
came to Rs.1880/- per sq.yard. Adding 12% annual increment
thereupon for a period of five years i.e. from 1973 to 1978, the date of
notification, the average rate came to approximately Rs.2900/- per
sq.yard.
120. The Division Bench of the Delhi High Court, referred to above
deducted 30% as development cost as well as the cost of land to be
spared for the purposes of roads, parks and other facilities. After the
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aforesaid deduction the price arrived at by the Court was
approximately Rs.2000/- per sq.yards on the date of the notification.
121. This Court is of the opinion that the deduction of 30% is
reasonable and fair, for the reason that the sale instances which have
been relied upon are of an extremely developed area of Nehru Place.
Further deductions are not required to be done as a factory exists
nearby which pre-supposes the area to be fairly developed. The small
sale instances for small tracts of land do not create any impediment for
this Court to arrive at a reasonable conclusion.
122. It has been submitted that the compensation to the landlord
requires interest to be paid from the date of actual dispossession from
the land in dispute. The appellants were dispossessed from 1972
though the notification under Section 4 of the Act came only on
30.06.1978. It appears that the appellants were dispossessed for the
purposes of construction of water treatment plant and residential
quarters of Delhi Jal Board. This fact has not been disputed and thus it
can be taken into account that the dispossession is from the year 1972.
123. Now the question arises whether the appellants are entitled to
payment of interest since the date of their dispossession which is prior
to the notification under Section 4(1) of the Act.
124. The Land Acquisition Act is a complete code in itself dealing
with acquisition of land, taking possession of the same and paying
compensation to the land owner. After the notification under Section
4(1) of the Act, a proper survey is made. Thereafter the interested
persons have the right to object to the acquisition. Thereafter a
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declaration under Section 6 of the Act is made and published in the
Official Gazette. It is at this stage that the Collector issues notice to
the interested persons under Section 9(1) of the Act intimating them
that the Government intends to take possession of the land. An award
is made by the Collector under Section 11 of the Act regarding
compensation which would be allowed for the land. Section 16 of the
Act provides that when a Collector has made an award under Section
11, he may take possession of the land which will thereafter vest in the
Government. The stages provided in the Act reflect that possession of
the land can be taken only after the award is made under Section 11 of
the Act. In urgent situations, an exception has been carved out under
Section 17. Whenever, an appropriate Government so directs, the
Collector without having made any award, may, on the expiry of 15
days from the publication of the notice mentioned in Section 9(1), take
possession of any land needed for a public purpose and such land shall
thereupon vest in the Government without any encumbrance. The
urgency which is taken care of by Section 17(1) of the Act requires a
notification under Section 9(1) of the Act. Such notification also
cannot be issued prior to the publication of notification under Section
4(1) and 6 of the Act. Thus any possession prior to the issuance of
notification under Section 4(1) is without any sanction of law. It is
precisely for this reason that the Act requires the determination of the
market value of the land on the date of publication of notification
under Section 4(1) of the Act for the purposes of grant of
compensation.
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125. The relevant provisions with regard to payment of interest
namely Section 34 of the Act makes it very clear that the interest shall
be paid at the rate of 9% per annum from the time of taking possession
until paid or deposited.
126. The Supreme Court in R.L.Jain vs. DDA , (2004) 4 SCC 79 at
para 12 held as under:-
“12. The expression “the Collector shall pay
the amount awarded with interest thereon at
the rate of nine per centum per annum from
the time of so taking possession until it shall
have been so paid or deposited” should not
be read in isolation divorced from its
context. The words “such compensation”
and “so taking possession” are important
and have to be given meaning in the light of
other provisions of the Act. “Such
compensation” would mean the
compensation determined in accordance
with other provisions of the Act, namely,
Sections 11 and 15 of the Act which by
virtue of Section 23(1) mean market value of
the land on the date of notification under
Section 4(1) and other amounts like
statutory sum under sub-section (1-A) and
solatium under sub-section (2) of Section 23.
The heading of Part II of the Act is
“Acquisition” and there is a sub-heading
“Taking Possession” which contains
Sections 16 and 17 of the Act. The words
“so taking possession” would therefore
mean taking possession in accordance with
Section 16 or 17 of the Act. These are the
only two sections in the Act which
specifically deal with the subject of taking
possession of the acquired land. Clearly, the
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127. In the aforesaid case namely R.L.Jain (Supra), land had been
acquired only after the preliminary notification was issued on
09.09.1992 as earlier acquisition proceedings were declared null and
void in the suit instituted by the land owner and consequently, he was
not entitled to compensation or interest thereupon for the anterior
period.
128. In R.L.Jain (Supra), the Bench, however, noted that where
possession is taken prior to the issuance of notification, it would be
just and equitable that the Collector may also determine the rent or
damages for use of the property to which the land owner is entitled
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while determining the compensation amount payable to the land
owner for the acquisition of the property.
129. It may be noted here that no effort was made by the land owner
to claim any damages for use and occupation of the land or to get the
rent for the same.
130. Strictly speaking, interest is payable since the date of
dispossession after the notification under Section 4(1) of the Act.
However, taking into consideration that appellants are surely to be
compensated for the number of years for which they were
dispossessed prior to the notification, I deem it expedient to award
interest at the rate of 6% per annum from the date of dispossession in
the year 1972 till the date of notification under Section 4(1) of the Act.
This would take care of the damages to which the appellant, in the
opinion of this Court, would be entitled to.
131. The appellants would further be entitled to interest at the rate of
9% per annum for one year from the date of notification and 15% per
annum after the expiry of one year till the payment.
132. The appellants shall also be entitled to all other statutory
benefits, including solatium at the rate of 30% per annum and interest
over solatium in terms of the judgment delivered in Sunder vs. Union
of India, 2001(7) SCC 211 and Gurpreet Singh vs. Union of India,
(2006) 8 SCC 457.
133. Thus, the market value of the acquired land is fixed at
Rs.2,000/- per sq. yard as on 30.06.1978 and 06.06.1978 (dates of
notification under Section 4 of the Act for Bhola Nath Sharma through
LA APP. Nos.109/2013 & 76/2013 Page 65 of 66

LRs and Anand Prakash and Ors. respectively) and the appellants in
both the cases are entitled to be compensated on that basis.
134. As noted above, the appellants in LA Appeal No.109/2013 shall
be paid interest at the rate of 6% per annum from the date of
dispossession in 1972 till the date of notification.
135. The appellants in both the appeals will be entitled to interest at
the rate of 9% per annum for one year from the respective dates of
notification and thereafter at the rate of 15% per annum till payment
along with statutory solatium at the rate of 30% per annum with
interest.
136. The appeals are disposed of in terms of the above.


ASHUTOSH KUMAR, J
MARCH 23, 2016
k
LA APP. Nos.109/2013 & 76/2013 Page 66 of 66