Full Judgment Text
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.3332 OF 2001
T.S. Ramachandra Shetty ... Appellant
Versus
Chairman, Karnataka Housing Board
& Another ...
Respondents
WITH
CIVIL APPEAL NOS.3333 AND 3334 OF 2001
J U D G M E N T
Dalveer Bhandari, J.
We are disposing of Civil Appeal Nos.3332 to 3334
of 2001 by this judgment. The facts of these appeals are
identical. For the sake of convenience, the facts are
being taken from Civil Appeal No.3332 of 2001.
Appellant’s land measuring 1 acre 32 guntas in Survey
No.32/1 at Henjagondanahalli village was acquired
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pursuant to the preliminary notification published on
20.5.1997.
The Land Acquisition Officer had granted
compensation at the rate of Rs.17,500/- per acre. The
Reference Court on appeal enhanced the amount from
Rs.17,500/- to Rs.2,17,800/- per acre. This amount was
calculated at the rate of Rs.5/- per square feet. The
Karnataka Housing Board aggrieved by the said
judgment preferred appeal before the High Court of
Karnataka. The Division Bench of the Karnataka High
Court while taking into consideration all the facts
reduced the amount of compensation from Rs.2,17,800/-
to Rs.1,30,680/- per acre. This amount of compensation
has been calculated at the rate of Rs.3/- per square feet.
In the impugned judgment, the High Court has
mentioned that the claimant-appellant herein himself
had purchased the land in question on 24.3.1986 for
Rs.45,000/- which is based on calculation at the rate of
Rs.1.75 per square ft.
3
The preliminary notification under section 4(1) of
the Act was issued a year later i.e. 20.5.1987. The
appellant relied on the sale deeds executed subsequently
and that too for smaller pieces of lands meant for
housing sites being Ex.P.2 and that of 1990. The High
Court in the impugned judgment has rightly observed
that Ex.P.2 cannot be taken into consideration
particularly keeping in view that the sale deed in respect
of this very acquired land which was effected only a year
ago in 1986 itself was available as a ready basis for
determining the market value of the land.
The High Court in the impugned judgment observed
that after giving reasonable deductions towards
development charges, the market rate can be safely taken
as Rs.3/- per square feet since this price was even
suggested for the lands in question even by the
respondent – Housing Board to the claimant-witness.
The High Court granted compensation at the rate of
Rs.3/- per square feet. The compensation in this case
worked out to be Rs.1,30,680/- per acre. The High Court
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also observed that the appellant – land owner will also be
entitled to other statutory benefits and interest as per the
provisions contained under sections 23 and 28 of the Act.
The fact is that this very land was purchased by the
appellant a year ago i.e. on 24.3.1986 for Rs.45,000/-
and for the same land the High Court gave compensation
of Rs.1,30,680/- per acre only after a year. In our
considered opinion, the view which has been taken in the
impugned judgment is in consonance with the settled
legal position. The High Court has taken into
consideration all the relevant facts in granting
compensation. The High Court was fully justified in
giving due weightage to the fact that the sale deed of
1986 in respect of this very acquired land was available
and the same ought to be the basis for determining the
market value of the land.
Learned counsel for the respondent placed reliance
on the case of Bangaru Narasingha Rao Naidu & Ors.
v. Revenue Divisional Officer, Vizianagaram (1980) 1
5
SCC 575. In this case, this Court observed that the best
evidence of the market value of the acquired land is
afforded by transactions of sale in respect of the very
acquired land.
In the case of Special Tehsildar Land
Acquisition, Vishakapatnam v. A. Mangala Gowri
(Smt.) (1991) 4 SCC 218, this Court observed as under:
“The market value postulated in Section 23(1) of the
Act designed to award just and fair compensation
for the lands acquired. The word "market value"
would postulate price of the land prevailing on the
date of the publication of the notification under
Section 4(1).
The acid test that for determining the market
value of the land, the price which a willing vendor
might reasonably expect to obtain from a willing
purchaser would form the basis to fix the market
value. For ascertaining the market rate, the Court
can rely upon such transactions which would offer
a reasonable basis to fix the price. The price paid in
sale or purchase of the land acquired within a
reasonable time from the date of the acquisition of
the land in question would be the best piece of
evidence. In its absence the price paid for a land
possessing similar advantages to the land in the
neighbourhood of the land acquired in or about the
time of the notification would supply the data to
assess the market value. But exclusion of bona fide
and genuine sale transactions in respect of the
same land under acquisition and to place reliance
on the award of some other land is obviously illegal.
6
In the case of Periyar and Pareekanni Rubbers
Ltd. v. State of Kerala (1991) 4 SCC 195, in para 10,
this Court observed as under:
“10. ..When the Courts are called upon to fix the
market value of the land in compulsory acquisition,
the best evidence of the value of property is the sale
of the acquired land to which the claimant himself
is a party, in its absence the sales of the
neighbouring lands. In proof of the sale transaction,
the relationship of the parties to the transaction,
the market conditions, the terms of the sale and the
date of the sale are to be looked into. These features
would be established by examining either the
vendor or vendee and if they are not available, the
attesting witnesses who have personal knowledge of
the transaction etc. The original sale deed or
certified copy thereof should be tendered as
evidence. The underlying principle to fix a fair
market value with reference to comparable sales is
to reduce the element of speculation. In a
comparable sale the features are: (1) it must be
within a reasonable time of the date of the
notification; (2) it should be a bona fide transaction;
(3) it should be a sale of the land acquired or land
adjacent to the land acquired and (4) it should
possess similar advantages. These should be
established by adduction of material evidence by
examining as stated above the parties to the sale or
persons having personal knowledge of the sale
transactions. The proof also would focus on the fact
whether the transactions are genuine and bona fide
transactions.”
Learned counsel for the respondent also placed
reliance on Printers House Pvt. Ltd. v. Cold Storage
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and Food Products and Ors. (1994) 2 SCC 133. He
drew our attention to paragraph 7 of this judgment
which deals with the similar proposition that the sale
price of the acquired land is an important factor for
determining the compensation.
Reliance has also been placed on the case of
Ranvir Singh and Another v. Union of India (2005) 12
SCC 59. In this case, the Court reiterated the well
settled principle that the sale deeds pertaining to the
portion of lands which are subject to acquisition would
be the most relevant piece of evidence for assessing the
market value of the acquired lands.
The facts of the case of The Dollar Company,
Madras v. Collector of Madras (1975) 2 SCC 730 are
identical to the facts of the instant case. Relevant
portion of paragraphs 5 and 6 read as under:
“In determining the market value the main criterion
is what a willing purchaser would pay a willing
vendor. Ordinarily a party will be entitled to get the
amount that he actually and willingly paid for a
particular property, provided the transaction be
bona fide and entered into with due regard to the
prevalent market conditions and is proximate in
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time to the relevant date under Section 23. The
best evidence of the value of property is the sale of
the very property to which the claimant is a party.
If the sale is of a recent date, then all that need
normally be proved is that the sale was between a
willing purchaser and a willing seller, that there has
not been any appreciable rise or fall since and that
nothing has been done on the land during the short
interval to raise its value. But if the sale was long
ago, may be the Court would examine more recent
sales of comparable lands as throwing better light
on current land value. Such lands should be close
by and not a mile-and-half away as one of the
examples pressed here was. So, an actual
transaction with respect to the specific land of
recent date is a guide-book that courts may not
neglect when called upon to pin the precise
compensation. ”
Similarly, in the instant case, only an year ago, the
appellant himself purchased this very piece of land for
Rs.45,000/- and after an year, the State has given
compensation of Rs.1,30,680/-, which cannot be said to
be inadequate by any stretch of imagination. The
Reference Court was not justified in enhancing the
amount of compensation to Rs.2,17,800/-. There is no
basis whatsoever. In our considered opinion, the view
which has been taken by the High Court in the
impugned judgment is based on settled legal position of
law, as indicated in some of the cases noted above. No
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interference is called for. These appeals being devoid of
merits are accordingly dismissed, leaving the parties to
bear their own costs.
…….……………………J.
(Dalveer Bhandari)
.…………………….. J.
(H.S. Bedi)
New Delhi;
January 22, 2009.