Full Judgment Text
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PETITIONER:
GULZARA SINGH AND ORS., ETC.
Vs.
RESPONDENT:
STATE OF PUNJAB AND ORS.
DATE OF JUDGMENT11/05/1993
BENCH:
RAMASWAMY, K.
BENCH:
RAMASWAMY, K.
SAHAI, R.M. (J)
CITATION:
1993 SCR (3) 645 1993 SCC (4) 245
JT 1993 (3) 668 1993 SCALE (2)808
ACT:
Land Acquisition Act, 1984: Section 23(1)--Acidetest for
Market Value of acquired land--Relevance of Sale deeds
mutation entries, Average price, Margin for wholesale price
of large extent, Deduction for development charges.
HEADNOTE:
Notification under section 4 for acquisition of 89 Acres 4
Kanals and 12 Marlas of land in a village in Punjab,
published on January 27, 1978. Appellants claimed
compensation Rs. 30,000 per Bigha i.e. Rs. 1500 per Biswa,
on the ground that 15 Biswas of land situated near the
acquired land had been sold on July 12,1977, for Rs. 24,000
which works out to Rs. 1600 per Biswa. Land Acquisition
Collector classified the acquired land In 6 blocks and
awarded Market Value ranging between Rs. 30,000 to Rs, 6000
per acre. In reference under Section 18, the District Judge
disagreed with classification. The learned Judge, relying
on sale deeds dated September 4,1972, June 14, 1976,
February 23, 1977 and July 15, 1977, all for small extents,
awarded compensation @ Rs. 800 for the rest of land, besides
solatium and interest. Appeals filed in the High Court by
State of Punjab and by one batch of claimants. Another
batch of claimants filed cross objections. The learned
Single Judge allowed appeals filed by the State and
dismissed appeals and cross-objections of the claimants.
Market Value was determined, on working out average price on
the basis of sale deeds dated September 4,1972 and June 14,
1976 filed by claimants and mutation entries dated August
31, 1977 and October 4,1977 filed by the State. Belting was
carved at depth of 100 Ft. from main road and deduction of
1/3rd was made towards development charges. Consequently
market value determined @ Rs. 750 per Biswa for land
abutting main road and @ Rs. 500 per Biswa for the rest of
land. Judgment and order of the learned Single Judge was
confirmed by Division Bench.
Claimants, by special leave petition filed appeals for
higher compensation. This court determined market value at
Rs. 1000 per Biswa and allowing the appeals to that extent,
HELD It is settled law that to determine market value of the
land, the sales of land under requisition if any or the
sales in the neighborhood lands,
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that possessed of same or similar features or fertility or
other advantageous features would furnish basis to fix just
and fair market value. (649-E)
The price for which the willing vender would offer the land
and willing vendee would agree to purchase it, as a prudent
man in normal market conditions, as on date of notification
or near about the date, is acid test to fix market value.
Sales and purchases of land at throw away price at arms
length or depressed sales or facade of sales made in quick
succession to inflate market value do not offer any basis to
determine just Market Value. (649-F)
In order to adjudge, whether sales are bonafide, whether
consideration mentioned in the deed was infect and really
passed, whether the lands covered by sale deeds and relied
on possessed of same or similar potentialities or
fertilities or advantageous features would be brought out on
record only by examination of the vendor or the vendee or if
neither of them is available, the attesting witness, who has
personal knowledge of the bargain and passing of
consideration. Hence it is mandatory. (650-A)
Periyar & Pareekanni Rubbers Ltd. v. State of Kerala: [1991]
4 SCC 195.
Sale deeds of small extents being retail price do not offer
comparable basis to fix compensation, when large block is
acquired. If sale transactions relate to the lands under
acquisition and if found to be genuine and bonafide
transactions, then it may be considered but reasonable
margin must be given in fixing wholesale price. (650-E)
Collector of Lakhimpur v. Bhuban Chandra Dutta AIR 1971 SC
2015; Mirza Nausherwoan Khan & Another v. Collector (Land
Acquisition) Hyderabad [1975] 2 SCR 184; Ram Rattan & Others
v. State of Uttar Pradesh [1977] 2 SCR. 184; Smt. Kaushalya
Devi Bogra & Others v. Land Acquisition Officer, Aurangabad
JUDGMENT:
Others [1977] 1 SCR 329; Administrator General of West
Bengal v. Collector Varanasi AIR 1988 SC 943 and Special
Tehsildar Land Acquisition v. A Mangal Gowri [1991] 4 SCC
218.
Court in the first instance has to determine as to which of
the sale deeds are relevant, proximate in point of time and
offer comparable base to
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determine market value. The after average price has to be
worked out and the contention that highest value should be
fixed cannot he accepted. (651-D)
State of Madras v. A.M. Ranjan & Another [1976] 3 SCR 356;
Collector of Lakhimpur v. Bhuban Chandra Dutta AIR 1971 SC
2015; Sint. Kaushalva Devi Bogra & Others v. Land
Acquisition Officer, Aurangabad & Another [1984] 2 SCR 900
and Administrator General of West Bangal v. Collector,
Varanasi AIR 1988 SC 943.
The Principle of belting is perfectly legal and
unexceptionable, as the lands abutting the main road up to a
specified depth depending on factual material on record,
would fetch higher market value than lands situated in
interior area. (652-A)
If the acquired land is undeveloped, deduction of at least
1/ 3rd, is necessary towards development charges. (652-F)
Brig. Sahib Singh Kalha & Others v. Amritsar Improvement
Trust & Others [1982] 1 SCC 419; Administrator General of
West Bengal v. Collector Varanasi AIR 1988 SC 943; Special
Tehsildar, Land Acquisition v. A. Mangal Gowri [1991] 4 SCC
218; and Bhagwathula Swamnanna & Others v. Special Tehsildar
Land Acquisition Visakhapatnam [1991] 4 SCC 506. (535-D-E)
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&
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8670 of 1983.
From the JudGment and Order dated 3. 9. 1982 of the Punjab
and Haryana HiGh Court in ReGular First Appeal No. 1 105 of
198 1.
WITH
C.A. Nos. 8634 to 86-58/83 and 8660-62/83, 8665 to 8669/83
and 8671-72/ 83
Prem Prasad Juneja and R.S. Sodhi for the Appellants.
H.M. Singh for G.K. Bansal for the Respondents.
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The Judgment of the Court was delivered by
K. RAMASWAMY, J. The common questions of law arose for
decision in these appeals. Hence they are disposed of
together. Notification under s. 4 (1) of the Land
Acquisition Act 1 of 1984 was published in the Punjab State
Gazette on January 27, 1978 acquiring 89 acres 4 canals and
12 marlas of land situated in Dhuri village for public
purpose, namely to set up new Mandi Township. The.
appellants claimed at the rate of Rs. 30.000 per Bighabut
Land Acquisition Officer after classifying the lands into
six blocks A to F, awarded market value ranging between Rs.
30,000 to Rs. 6,000 acre. On reference under s. 18 of the
Act, the District Judge, Sangrur in his judgment dated May
13, 1981 disagreed with the classification and found that
all the lands are possessed of the same quality. Relying on
sale-deeds, Ex. p-3 dated September4,1972, p-5 dated June
14,1976, p-2 dated February 23, 1977 and p-4 dated July 15,
1977, all small extents, he calculated at an average of Rs.
1300 per Biswa and awarded to the lands belonging to Jaswant
Kaur Baldev Singh and Gurdev Singh at the rate of Rs. 1,000
per Biswael finding that their lands are abutting Abadi
(village) and for the rest awarded at the rate of Rs. 800
per Biswa with statutory solatium at 15% and interest of 6%
per annum on enhanced compensation. Dissatisfied therewith
the State filed the appeals and against disallowed claims,
the claimants in one batch filed appeals and in another
batch filed cross-objections. The learned Single Judge
relied on Ex. p3 and p-5 filed by the claimants and Ex. R-4
and R-6 filed by the State as comparable instances and
calculated the average which worked out at Rs. 750 per
Biswa. He found that the lands are possessed of potential
value for further building purposes. Therefore, he carved
out belting at a depth of 100 ft. from the main road to
those lands, deducted 1/3rd towards developmental charges
and awarded the market value at the rate of Rs. 750 to the
land situated abutting to the main road to the depth of 100
ft. and for the balance lands at the rate of Rs.500 per
Biswa. The State appeals were allowed and of the claimants
and cross objection were dismissed. The Division Bench
confirmed the judgment of the learned Single Judge. The
claimants filed these appeals by special leave. In the
first batch no witness has been examined, but in the second
batch witnesses were said to have been examined in proof of
these documents but their evidence was not made part of the
record. Equally of the sale deeds.
It is seen that the documents in the second batch p- top-1
include those filed in the first batch. Ex. p-5 is dated
Sept. 4, 1972, in which 20 Biswas of land was sold for Ice
Factory. It was situated in the town itself. The price
fetched therein was Rs. 20,000 Therefore, it worked out at
the rate of Rs. 1,000 per Biswa. Ex. p10 is dated August
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25, 1975, 7 Biswas of land in Dhaula village was sold for
Rs.
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75,000 which works out at rate of Rs. 1071 per Biswa. Ex.
p-7 is dated June 14,. 1976,3 Bighas 16 Biswas of land
situated at Dhularoad side was sold for Rs. 4,500 which
works out at the rate of Rs. 1285 per Biswa. Ex.p-8 dated
June 15, 1977 is for 4 Biswas of land at Dhula road sold for
Rs. 4,000 which works out at Rs. 1,000 per Biswa. Ex. p-4
is dated Feb. 23, 1977,3 Biswas of land in the heart of the
town Dhuri was sold for Rs. 6,000 which works out to Rs.
2,000 per Biswa. Ex. p-6 is dated may 18,1977, one Bigha7
Biswas were sold for Rs. 1,000, which works out to Rs. 370
per Biswa. This land is away from the town and also from
the acquired land. Ex. p-9 is dated July 12, 1977, 15
Biswas of land were sold for Rs. 24,000 working out at the
rate of Rs. 1,600 per Biswa. Based thereon it was contended
that Ex. p-9 fetches the highest market value and is nearer
to the date of notification and would offer comparable
price. The High Court ought to-have fixed market value at
that rate. The High Court committed illegality in relying
on two sale-deeds of the claimants and two mutation entries
on behalf of the state in working out the average.
Therefore, fixation of the market value is illegal. The
mutations are not admissible as neither sale deeds were
filed not any body connected with them are examined.
The question, therefore, is whether these sale transactions
would reflect the prevailing market value of the land of the
total extent of 90 acres. It is seen that in the first
batch no-one was examined to prove the documents. In the
second batch though witnesses were said to have been
examined, the evidence is not on record. Neither the
reference court nor the High Court discussed the evidence
and no finding was given. So we do not have the advantage
of any findings in that behalf. The state filed 5 mutation
entries which were marked. The sale entries Ex.R-6 is of
October 4,1977 and Ex. R-5 of November 13, 1977. The rates
of lands in Saledeeds executed between March 7, 1977 to
November 13, 1977, i.e. R-2 on 7.3.77, R-3 on 8.6.77, R-4 on
31.8.77 and R-5 on 30.11.77 work out between Rs. 83 to Rs.
450 per Biswa. It is settled law that to determine the
market value of the land under s. 23(1) of the Act the sales
of the land under requisition, if any, or the sales in the
neighbourhood lands that possessed of same or similar
potentialities or fertility or other advantageous features
would furnish basis to determine just and fair market value
on the premise of hypothetical willing vendor and willing
vendee. The willing vendor who would offer the land and
willing vendee who would agree to purchase the land as a
prudent man in normal market conditions as on the date of
the notification or near about the date of the notification
is the acid test. It is also settled law that the sale and
purchase of lands at a throw away price at arm’s length or
depressed sales or fecal of sales brought into existence in
quick succession to inflate the market value would not offer
any basis to determine just market value. In order to
adjudge whether sales are bonafide sales between willing
vendor and
650
willing vendee and whether the consideration mentioned in
deed was, in fact and really passed on under transaction’.
whether the lands covered by sale-deeds and relied on,
possessed of same or similar potentialities or fertilities
or advantageous features would be brought on record only by
examining the vendor or the vendee or if neither of them is
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available, the attesting witness who has personal knowledge
of the bargain and passing of the consideration are
mandatory. Vide Periyar & Pareekanni Rubbers Ltd. v. State
of Kerala [1991] 4 SCC 195 wherein this court surveyed the
entire case Law in that respect. Since none has been
examined in the first batch the sale transactions referred
to either by the state or by the claimants cannot be relied
upon. In the second batch since the evidence has not been
referred to by the courts below nor discussed by them nor we
have the advantage to go through the same, we cannot rely on
the same to further enhance the market value. Therefore, we
are left with no option. but to reject those sale-deeds.
Moreover, except Ex. p-9 all other sale-deeds are of very
small extents. This court consistently has taken the view
in Collecior of Lakhimpur v. Bhuban Chandra Dutta AIR 1971
SC 2015 Mirza Naushery voan Khan & Anr. v. Collector (Land
Acquisition). Hyderbad [1975] 2 SCR 184; Rain Rattan & Ors.
v. State of U. P. [1977] 2 SCR 184 Smt.Kaushalya Devi Bogra
& Ors.v.Land Acquisition officer, Aurangabad & Anr. [1984] 2
SCR 900; Padma. Uppal v. State of Punjab & Ors. [1977] 1
SCR 329, Administrator General of West Bengal v. Collector.
Varanasi AIR 1988 SC 943 and Special Tehsildar, Land
Acquisition v. A. Mangala Glowri [1991]4 SCC 218 that sale
deeds of small extents being retail price do not offer
comparable basis to fix compensation when large block of
land is acquired. To an intending bonafide purchaser if
such block of 90 acre is offered for sale, would he agree to
purchase at retail price or far less value? Under no
circumstance he would agree to purchase at retail prices
mentioned above. In view of the settled legal position the
saledeeds, sought to be relied upon, do not give us any
basis to determine the market value. Every endeavour would
be made to fix fair and reasonable market value. If sale
transactions relate to the lands under acquisition and if
found to be genuine and bonafide transaction between willing
vendor and vendee then it may be considered but reasonable
margin must be given in fixing whole sale price. Therefore,
all the documents except p-9 are rejected.
The next contention is that the sale-deed Ex. p-9 by which
15 Biswas were sold for Rs. 24,000 which works out at the
rate of Rs. 1,600 per Biswa and whether this hiohest price
should be given to the appellants. As stated earlier we
have no evidence before us as to under what circumstances
this document came to be executed and what is the distance
between the lands and for what purpose the land was sold and
what is the
651
comparable nature of the land, fertility and potentialities
of the land, etc. The contention relying on state of
Madras v.A.M.Ranjan & Anr. [1976] 3SCR35 that highest value
should be fixed cannot be accepted in view of the consistent
late. view of this court. In Collector of lakhimppur’s case
(supra), this court accepted the principle of average, but
however, rejected the small extent of the lands arid
enhancement based on the average at Rs. 15,000 per Bigha was
reduced to Rs. 10.000 per Bicha. In Smt. Kausalya Devi’s
case (supra), this court noted that large extent of land in
the developed Aurangabad town was acquired for Medical
College, accepted the principle of average worked out by the
reference court, varying between Rs. 2.25 to Rs. 5.00 per
sq. yard and this court ultimately fixed the market value at
the rate of Rs. 1.50 per sq. yard. In Administrator General
of West Bengal’s case (supra) this court upheld rejection of
the small plots of lands and accepted two sale-deeds of
large extent working out the average rate at Rs. 500 per
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Decimal and ultimately reference court fixed the market
value at the rate of Rs. 200 per Decimal. It is, therefore,
clear that the court in the first instance has to determine
as to which of the sale deeds are relevant, proximate in
point of time and offer comparable base to determine market
value. Thereafter the average price has to be worked out.
It would be seen that this court has taken consistent view
of working out average and further deductions have been made
in fixing just and fair market value when large chunk of the
land was acquired. We respectfully agree and adhere to the
principle and we find no compelling reason to divert the
stream or arrest the consistence.
The question then is whether the reduction of the market
value by the learned Single Judge is warranted on facts and
under law. In his judoment the learned Judge found that the
acquired lands are situated between railway line on the one
side and link road going from Dhuri to Sarona on the other
side. On the third side it is surrounded by the in habited
area of Dhuri town.A small portion in Khasra No. 2585 was
abutting the Dhola road and the rest of the acquired land is
just behind the inhabited area. While acquiring these lands
the Govt. have excluded the built up area.
He also found that there is tendency of extension of Abadi
village towards acquired lands. Therefore, he found that
the lands arepossessed of "Potential value for being housed
for urban purpose in the near future and, therefore, had to
be valued as such"
Thus we have the evidence that the lands are possessed of
potential value for being used for building purposes. In
fact, the acquisition itself is for construction of Mandi
Township. The principle of belting is perfectly legal and
unexception-
652
ble as the lands abutting the main road upto a specified
depth, depending on actual material on record, would fetch
higher market rate than the lands situated a interior area.
However, on facts of this case the belting is not warranted
for the reason that as seen on three sides there exist roads
and abutting the village. As per the plan as found by the
High Court there exists a road cutting across the acquired
lands. Therefore, there is not only access on three sides
but also to interior lands. Thus in our view belting and
fixation of differential rates of value is not justified.
The next question is what would be the reasonable and just
market value the lands were likely to fetch. In view of the
fact that there is no evidence available and since the High
Court found that the lands are possessed of potential value
the rate of Rs. 1,000 per Biswa as awarded by civil court to
the lands abutting abadi and the lands upto a depth of 100
ft is upheld. In view of the preceding finding we hold that
the fixation of uniform rate of Rs. 1,000 per Biswa is
legal.
It is seen that this acquired land of 90 acres is
undoubtedly undeveloped area and necessarily requires
development by laying the roads, parks, drainage, lighting
and other civic amenities. In Brig. Sahib Singh Kalha &
Ors. v. Amritsar Improvement Trust & Ors. [1982] 1 SCC 419
and Administrator General of West, Bengal’s case (supra)
this court deducted 53% of the undeveloped lands towards
developmental charges while fixing market value at decimal
rate etc. towards amenities. In Special Tehsildar Land
Acquisition, Vishakapatnam’s case,(supra) this court made
deduction at 1/3rd. The appellant placed reliance on
Bhagwathula Swamnana & Ors. v. Special Tahsildar Land
Acquisition. Visakhapatnam [1991] 4 SCC 506 where this
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court did not deduct any land towards developmental charges.
But in that case it was found that the lands acquired are
situated in fully developed area. On those circumstances
this court did not deduct any land towards developmental
charges. It is seen that the consistent view of this court
now is that deduction of at least 1/3rd is necessary towards
developmental charges. Therefore, we uphold deduction of
1/3rd towards development charges from the market value and
determine the market value at Rs. 670 per Biswa. The
learned judge while deducting 1/3rd fixed market value at
Rs. 759 of frontage lands and Rs. 500 to interior land. Rs.
750 is obvious mistake, but the state did not take any
action to have itch corrected not filed appeals. Fixation
of Rs. 750 per Biswa of lands from road upto a depth of 100
ft. became final. So we cannot interfere or correct it in
claimants appeal. But for the rest of the lands we award
Rs. 670 per Biswa. with solatium at 15% and interest at 6%
on the enhanced market value from the date of taking
possession till date of payment.
653
The appeals are accordingly allowed to the above extent. In
the circum stances parties are directed to bear their own
costs.
I.S.G.
Appeal allowed
654