Full Judgment Text
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PETITIONER:
P.RAM REDDY ETC.
Vs.
RESPONDENT:
LAND ACQUISITION OFFICER HYDERABAD
DATE OF JUDGMENT27/01/1995
BENCH:
VENKATACHALA N. (J)
BENCH:
VENKATACHALA N. (J)
RAMASWAMY, K.
CITATION:
1995 SCC (2) 305 JT 1995 (1) 593
1995 SCALE (1)332
ACT:
HEADNOTE:
JUDGMENT:
VENKATACHALA, J.:
1. Having granted leave to appeal sought for in the above
Special Leave Petitions directed against the common judgment
and decree dated 19.4.1993 rendered in Appeal Nos. 1565 and
2087/91 by the High Court of Andhra Pradesh at Hyderabad and
heard arguments of learned counsel appearing for the
contesting parties in the appeals, we propose to dispose of
all these appeals by this common judgment.
2. Sri P. Ram Reddy, the appellant in appeals arising out
of S.L.P’s. Nos. 1336263/93 and respondent in appeal arising
out of S.L.P. No. 18202/93, to be referred to hereinafter as
’the claimant’, was the owner in possession of dry land of,
as large an extent as, IO acres 17 guntas comprised in
Survey Nos. 48/24 and 48/26 of Katedhan Village lying in the
outskirts of Hyderabad. One acre 25 guntas of land out of 5
acres 22 guntas of land in Survey No. 48/24 and 2 acres 15
guntas of land out of 4 acres 35 guntas of land in Survey
No. 48/26 were the lands included in the total extent of 14
acres and 35 guntas of land proposed to be acquired by
Hyderabad Urban Development Authority -"HUDA" for formation
of inner ring road required to connect Old Karnool Road with
Hyderabad-Bangalore National Highway No.7, under Land
Acquisition Act, 1894 as amended by Act 68 of 1994 -- ’the
L.A. Act’, by a Notification under Section 4(1) thereof,
published in the modes prescribed thereunder, by issuance of
public notice in the locality on 2.9.1985. The acquisition
of the said lands having been completed
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by a declaration made and published under Section 6 of the
LA Act, notice under section 9 was issued to the claimant
calling upon him to make his claim for compensation of the
acquired land before the Land Acquisition Officer of the
HUDA -hereinafter to be referred to as "the LAO". In
response to the said notice, the claimant claimed award of
compensation by the LAO for his acquired lands at the rate
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of Rs. 1 50/- per square yard apart from the statutory
benefits which he was entitled to get under the LA Act. The
LAO, by his award made under Section II of the LA Act,
determined the market value of the claimant’s acquired land
at Rs. 12 per square yard and awarded to him the amount of
compensation together with statutory benefits. Since that
award of the LAO was unacceptable to the claimant, he made
an application to the LAO under Section 18 of the LA Act and
got the application referred to the Court of the Subordinate
Judge, Ranga Reddy District -- "Civil Court", for
determination of the just compensation payable to him. On
that reference registered as A.S. 129/88, the Civil Court
held the inquiry as required by the LA Act and on the basis
of the inquiry so held, determined the market value of the
claimant’s lands at Rs.80 per square yard and accordingly
made an award and decree dated 18.4.1991 together with the
statutory benefits. That award and decree being appealed
against in the High Court by the claimant and the LAO
respectively in A.S. No. 1565/91 and A.S. No.2087/ 91, the
former seeking grant of further enhanced compensation and
the latter seeking reduction in the granted compensation.
Both the appeals being clubbed together and heard by the
Division Bench of the High Court, the market value of the
claimant’s land was reduced to Rs. 32 per square yard with
proportionate reduction in the statutory benefits, by its
common judgment and decree rendered on 19.4.1993. While the
claimant questioned the correctness of the said judgment and
decree of the High Court by filing appeals arising out of
S.L.P’s. Nos. 13362-13363/ 93, the LAO challenged the
correctness of the same judgment and decree by filing appeal
arising out of S.L.P. No. 18202/93, as stated at the outset.
The above stated facts make it clear that the LAO, by his
award (Ex.B-1) fixed the value of the acquired land at Rs.20
per square yard on the basis of the value fetched by sale of
residential building plots at Rs. 20 per square yard under
Sale Deed dated 14.10.1982whereunder 200 square yards of
plot in Survey No.48/13 of Katedhan Village was sold at Rs.
20 per square yard (Ex. B-3); sale deed dated 16.10.1982
whereunder 200 square yards plot in Survey No. 48/14 was
sold at Rs. 20 per square yard (Ex.B-4), and Sale Deed dated
1.2.1983 whereunder 200 square yards plot in Survey No.
48/12 had been sold at Rs.20 per square yard, Ex.B-5.
However, he fixed the market value of the acquired land at
Rs. 12 per square yard by deducting 40% area towards lay-out
losses. He granted statutory benefits also payable for the
acquired land. It also becomes clear from that award that
the sale deeds were seen and the local inspection had been
held by the LAO before making that award.
3. The Civil Court by its judgment and decree, which is
referred to by us earlier, enhanced the market value of the
acquired land to Rs. 80 per square yard relying upon the
amounts of consideration mentioned under sale deeds and gift
deeds (Exs. A-1 to A-5) and also the probable value of
building plots in the locality of the
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acquired lands mentioned in Ex. A6 - the extract of Basic
Valuation Register, after making certain percentage of
deduction out of such amount or value towards what is called
as "lay-out losses".
4. When that award and decree of the Civil Court was
challenged in the High Court,it was found by the High Court
that Exs. A-1 to A-5, the Sale Deeds and Gift Deeds were
unreliable and could not be acted upon by it for the reasons
it gave in that regard. It also refused to place any
reliance on Ex.A-6, the Basic Valuation Register extract, on
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its view that it was not safe to determine the market value
of lands acquired under the LA Act on the value found in
Basic Valuation Register. However, it found that the value
of Rs.20 per square yard, on which the LAO had determined
the market value of the acquired lands, was on the lower
side for determining the market value of that land.
Consequently, it increased the value of Rs.20 per square
yard relied upon by the LAO by another Rs.20 per square
yard. Thereafter, the High Court deducted 20% towards lay-
out losses out of Rs.40 per square yard and determined the
market value of the acquired lands at Rs.32 per square yard.
Therefore, it rendered its judgment and decree in the
appeals by reducing the market value of the acquired lands
from Rs.80 per square yard awarded by the Civil Court to
Rs.32 per square yard of the claimant’s acquired land of 4
acres and 3 guntas and granted in addition 30% solatium on
the market value, 12% additional amount on such market value
from the date of the notification i.e. 24.7.1985 till the
date of the award i.e. 14.7.1988 and interest on the
enhanced amount of compensation under Section 28 of the LA
Act.
5. Shri P.P. Rao, learned Senior Counsel, who appeared
before us for the claimant, raised several contentions
against the correctness of the judgment and decree of the
High Court. He contended, firstly, that the High Court had
failed to take into consideration the very statement of the
LAO made in his award that the acquired land had high
potentiality for developing into a Housing Colony, in
determining its market value of the acquired land and that
non-consideration had resulted in reducing the market value
of the acquired lands instead of enhancing their market
value; secondly, when the Civil Court had determined the
market value of the acquired land of the claimant at Rs.80
per square yard on the basis of amounts of consideration of
building plots mentioned under Exs. A-1 to A-3 (Sale Deeds)
and Exs. A2, A-4 and A-5 (Gift Deeds) and Ex. A-6, Basic
Valuation Register extract, it should not have rejected Exs.
A-1 to A-6 themselves as unreliable documentary evidence for
fixing the market value of the acquired land; thirdly, when
the Civil Court had determined the market value of the
acquired land of the claimant at Rs.80 per square yard on
the basis of the amounts of consideration mentioned in Exs.
A-1 and A-3 (Sale Deeds) and Exs. A-2, A-4 and A-5 (Gift
Deeds), and Ex. A-6 (Basic Valuation Register extract), the
High Court should not have rejected Exs. A-1 to A-6
themselves as unreliable documentary evidence for fixing the
market value of the acquired land, particularly, when
nothing damaging was elicited in the cross-examination of
the witnesses who had spoken about those documents;
fourthly, when the High Court had held that the Sale Deeds,
Exs. B-3 to B-5, the Certified copies of the Sale Deeds
produced in evidence on behalf of the LAO had not been
proved
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by examination of the witnesses connected with them, it
could not have determined the market value of the acquired
land on the basis of the value of land fixed by the LAO at
the rate of Rs.20 per square yard particularly when that
rate was referable to value of the plots of land sold under
Ex. B-3 to B-5, marked in evidence under section 51 of the
LA Act; fifthly, when the High Court had doubled the value
of plots fetched under Ex. B-3 to B-5 for arriving at the
correct market value of the acquired land, it could not have
determined the market value of the acquired land at Rs.32
per square yard, by deducting 20% out of it towards lay-out
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losses; and lastly, that the High Court had committed an
error in not granting the amount calculated at the rate of
12% per annum payable under section 23(1A) of the LA Act on
the market value of the acquired land from the date of the
preliminary Notification till the date of taking possession
of the lands.
6. Shri G. Prabhakar, the learned counsel, who appeared
before us for the LAO, while refuting the contentions raised
for the claimant, submitted that although the High Court had
held that the Sale Deeds, Ex. B-3 to B-5 had not been
proved by examination of witnesses connected with them, the
High Court could not be found fault with, for fixing the
market value of the acquired land on the basis of the award
of the LAO based on Exs. B-3 to B-5 when the claimant’s
evidence adduced in disproof of that award had not been
accepted by it (the High Court). It was further submitted
by him that the High Court could not have doubled the rate
of Rs. 20 per square yard fixed as the value of the acquired
land by the LAO when it had not adverted to the basis on
which the value was so doubled. The High Court, it was also
submitted by him, was not right in granting the amount in
addition to the market value under Section 23 (IA) of the LA
Act, in the manner in which it had done. It was lastly
submitted by him that the market value of the acquired land
determined by the High Court calls to be reduced to the
level of the market value of such land determined by the LAO
and such market value should form the basis for grant of
statutory benefits under the L.A. Act.
7. In view of the aforesaid contentions and submissions of
learned counsel for the contesting parties, the questions
which require to be considered and answered in deciding the
appeals, could be formulated thus :
(1) Whether the building potentiality of a
land acquired under the LA Act requires to be
taken into consideration in determining
its market value, and if so, how has that to
be done ?
(2) Whether the value of building plots as
found in the Basic Valuation Register
maintained under the Stamp Act or its Rules,
could form the basis for determination of the
market value of lands acquired under the LA
Act ?
(3) Whether the value of land mentioned in
an instance of sale or an instance of gift
claimed to compare with the acquired land
warrants acceptance as the correct value of
such land merely because the witnesses who
will have given evidence as regards them, on
behalf of the claimants had not been cross-
examined or effectively crossexamined on
behalf of the L.A.O.?
(4) Whether the value fetched by sale of a
small extent of land can be made the basis for
determination of the
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market value of a large extent of the acquired
land ?
(5) Will it not be open to a Court which
rejects the evidence adduced by the claimant
in support of his claim for enhanced
compensation for his acquired land made in a
reference under section 18 of the LA Act, to
rely upon the contents of the award of the LAO
made under section 11 thereof to enhance the
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compensation awardable for such land ? If the
LAO’s award is based on value fetched under
sale deeds on their perusal as contained in
the registers maintained under the
Registration Act, has he to prove those sale
deeds in Court for sustaining his award ?
(6) What is the amount which could be
awarded under section 23 (1-A) of the LA Act,
in addition to the market value of the
acquired land ?
(7) Does the market value in respect of
which solatium is awardable under section
23(2) of the LA Act include the amount payable
under section 23 (1-A) of the LA Act ?
(8) What is the amount of compensation
awardable for the lands of the claimant
acquired under the LA Act which could be
regarded as just and reasonable?
8. We shall now proceed to consider and answer the said
questions seriatum.
Re: Question (1)
9. Building Potentiality of acquired land Market value of
land acquired under the LA Act is the main component of the
amount of compensation awardable for such land under section
23(1) of the LA Act. The market value of such land must
relate to the last of the dates of publication of
Notification or giving of public notice of substance of such
Notification according to section 4(1) of the LA Act. Such
market value of the acquired land cannot only be its value
with reference to the actual use to which it was put on the
relevant date envisaged under section 4(1) of the LA Act,
but ought to be its value with reference to the better use
to which it is reasonably capable of being put in the
immediate or near future. Possibility of the acquired land
put to certain use on the date envisaged under section 4(1)
of the LA Act, of becoming available for better use in the
immediate or near future, is regarded as its potentiality.
It is for this reason that the market value of the acquired
land when has to be determined with reference to the date
envisaged under section 4(1) of the LA Act, the same has to
be done not merely with reference to the use to which it was
put on such date, but also on the possibility of it becoming
available in the immediate or near future for better use,
i.e., on its potentiality. When the acquired land has the
potentiality of being used for building purposes in the
immediate or near future it is such potentiality which is
regarded as building potentiality of the acquired land.
Therefore, if the acquired land has the building po-
tentiality, its value, like the value of any other
potentiality of the land should necessarily be taken into
account for determining the market value of such land.
Therefore, when a land with building potentiality is
acquired, the price which its willing seller could
reasonably expect to obtain from its willing purchaser with
reference to the date envisaged under section 4(1) of the LA
Act, ought to necessarily include, that portion of the price
of the land attributable to its building potentiality. Such
price of the acquired land then
601
becomes its market value envisaged under section 23(1) of
the LA Act. If that be the market value of the acquired
land with building potentiality, which acquired land could
be regarded to have a building potentiality and how the
market value of such acquired land with such building
potentiality requires to be measured or determined are
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matters which remain for our consideration now.
10. An acquired land could be regarded as that which has a
building potentiality, if such land although was used on the
relevant date envisaged under section 4(1) of the LA Act for
agricultural or horticultural or other like purposes or was
on that date even barren or waste, had the possibility of
being used immediately or in the near future as land for
putting up residential, commercial, industrial or other
buildings. However, the fact that the acquired land had
been acquired for building purposes, cannot be sufficient
circumstance to regard it as a land with building poten-
tiality, in that, under clause (4) of section 24 of the LA
Act that any increase to the value of land likely to accrue
from the use to which it will be put when acquired, is
required to be excluded. Therefore, wherever, there is a
possibility of the acquired land not used for building
purposes on the relevant date envisaged under Section 4(1)
of the LA Act, of being used for putting up buildings either
immediately or in the near future but not in the distant
future, then such acquired land would be regarded as that
which has a building potentiality. Even so, when can it be
said that there is the possibility of the acquired land
being used in the immediate or near future for putting up
buildings, would be the real question. Such possibility of
user of the acquired land for building purposes can never be
wholly a matter of conjecture or surmise or guess. On the
other hand, it should be a matter of inference to be drawn
based on appreciation of material placed on record to
establish such possibility. Material so placed on record or
made available must necessarily relate to the matters such
as :
(i) the situation of the acquired land
vis-a-vis, the city of the town or village
which had been growing in size because of its
commercial, industrial, educational, religious
or any other kind of importance or because of
its explosive population;
(ii) the suitability of the acquired land for
putting up the buildings, be they residential,
commercial or industrial, as the case may be;
(iii) possibility of obtaining water and elec-
tric supply for occupants of buildings to be
put up on that land;
(iv) absence of statutory impediments or the
like for using the acquired land for building
purposes;
(v) existence of highways, public roads,
layouts of building plots or developed resi-
dential extensions in the vicinity or close
proximity of the acquired land;
(vi) benefits or advantages of educational
institutions, health care centres, or the like
in the surrounding areas of the acquired land
which may become available to the occupiers of
buildings, if built on the acquired land; and
(vii) lands around the acquired land or the
acquired land itself being in demand for
building purposes, to specify a few.
11. The material to be so placed on record or made
available in respect of the
602
said matters and the like, cannot have the needed
evidentiary value for concluding that the acquired land
being used for building purposes in the immediate or near
future unless the same is supported by reliable documentary
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evidence, as far as the circumstances permit. When once a
conclusion is reached that there was the possibility of the
acquired land being used for putting up buildings in the
immediate or near future, such conclusion would be suf-
ficient to hold that the acquired land had a building
potentiality and proceed to determine its market value
taking into account the increase in price attributable to
such building potentiality.
12. Then, comes the question of determining the market value
of the acquired land with building potentiality. Undoubt-
edly such market value of the acquired land with building
potentiality comprises of the market value of the land
having regard to the use to which it was put on the relevant
date envisaged under Section 4(1) of the LA Act plus the
increase in that market value because of the possibility of
the acquired land being used for putting up buildings, in
the immediate or near future. If there is any other land
with building potentiality similar to the acquired land
which had been sold for a price obtained by a willing seller
from a willing purchaser, such price could be taken to be
the market value of the acquired land, in that, it would
have comprised of the market value of the land as was being
actually used plus increase in price attributable to its
building potentiality. If the prices fetched by sale of
similar land with building potentiality in the neighbourhood
or vicinity of the acquired lands with building
potentiality, as on the relevant date envisaged under
Section 4(1) of the LA Act, are unavailable, it becomes
necessary to find out whether any building plots laid out in
a land similar to the acquired land had been sold by a
willing seller to a willing buyer on or near about the
relevant date under Section 4(1) when the acquired land had
been proposed for acquisition and then to find out what
would be the price which the acquired land would have
fetched if had been sold by making it into building plots
similar to those sold. In other words, an hypothetical lay-
out of building plots in the acquired land similar to that
of the layout of building plots actually made in the other
similar land, has to be prepared, and the price fetched by
sale of building plots in the lay-out actually made should
form the basis for fixing the total price of the acquired
land with building potentiality, to be got if plots similar
to other plots had been made in the latter land and sold by
taking into account plus factors and minus factors involved
in the process.
13.Prices fetched by sales of building plots which may
become available could be of building plots in either a
fully developed layout of building plots or in an un-
developed layout of building plots, situated in the vicinity
of the acquired land with building potentiality. If the
market value of the acquired land with building potentiality
has to be fixed on. the basis of the evidence of the said
prices, the first thing required to be done is to prepare a
hypothetical layout of building plots of the acquired land
itself Then, how much of land out of the acquired land
becomes available to be made into plots similar to those in
the developed layout of building plots or in the undeveloped
layout of building plots has to be found out. If the
building plots which so become available were to be sold at
the prices at which the
603
building plots in the developed layout of building plots or
undeveloped layout of building plots could have been sold on
the date envisaged in section 4(1) of the Act, what would be
the total amount of such prices which could have been ob-
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tained has to be seen. Then, what could have been the
losses suffered or expenses incurred for getting such total
amount has to be found out. The market value of the
acquired land with building potentiality, can then be
regarded as the total amount of the prices of sales of all
the building plots envisaged in the hypothetical layout of
building plots in the acquired land minus the losses which
could have been suffered or expenses which could have been
incurred in making the hypothetical layout of building plots
in the acquired land on par with the developed layout of
building plots or the undeveloped layout of building plots,
as the case may be. If losses to be suffered or expenses to
be incurred for making a layout of building plots in the
acquired land with building potentiality for purposes of
selling such building plots at the prices to be fetched by
similar building plots in the developed layout of building
plots or in the undeveloped layout of building plots are to
be found out, the losses which might have been suffered or
expenses which might have been incurred by the owners of the
lands of either of a developed layout of building plots or
of an undeveloped layout of building plots, in making such
lay outs, could prove to be the best evidence. The evidence
of losses suffered or expenses incurred in having made a
layout of building plots may relate to lands lost for laying
roads, drains, sewerages, parks etc., costs incurred in the
making of roads, drains, sewerages, providing water supply,
electric supply, losses on investments and paying of
conversion charges, development charges etc. in a developed
layout or an undeveloped layout in which building plots had
been laid and sold and which sales form the basis for
determining the market value of the acquired land. If
evidence to be adduced in the said regard is of public
authorities or local boards or private developers who will
have formed such layouts of building plots in the lands in
the neighbourhood of the acquired land and sold them, it
could be of great value. No difficulty arises when all the
materials needed to determine the market value of the
acquired land with building potentiality on the basis of a
hypothetical layout of building plots to be formed in
respect of it is made available to the Court, so as to
enable it to find out the possible market value of the
acquired land with reference to the price to be fetched by
sale of building plots to be made in such land. But, owners
of the acquired land with building potentiality, rarely
produce all the material or evidence needed for the Court to
determine the market value of the acquired land with
building potentiality on the basis of a hypothetical layout
of building plots to be thought of by the Court in respect
of such land, although they rely on the price fetched by
sale of plots in a developed layout or an undeveloped layout
for determining the market value of their lands with
building potentiality in the vicinity of such layout. It is
where, the Court may have to inevitably fix the market value
of the acquired land with building potentiality on the basis
of the prices got in the sale transactions relating to the
building plots in a developed or an undeveloped layout,
relied upon by the owners of the land, if such transactions
are found to be genuine. A simple method, therefore, is
evolved by courts in determining the market
604
value of the acquired land with building potentiality with
reference to the retail price to be fetched by sale of plots
in a fully developed layout as on the date of publication of
Notification under section 4(1) of the Act In Bombay
Improvement Trust v. Marwanji Manekji Mistry reported in AIR
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1926 Bombay 420, the said method is referred to by Macleod,
C.J. as that where the wholesale price of the acquired land
with building potentiality could be fixed at one-third to
one-half of the retail price fetched by sale of building
plots in a developed layout of building plots, depending
upon the nature of development taken place in such layout.
Thus, when it becomes inevitable for the Court to fix the
market value of the acquired land with building potentiality
on the basis of the price fetched by sale of a building plot
in a developed layout of building plots in the vicinity, it
must, in our view, fix the wholesale market value of the
acquired land with building potentiality at one-third to
one-half of the retail price got by genuine sales of plots
in a developed layout in the vicinity, by deducting two-
thirds to onehalf out of the retail prices of plots, as
losses or expenses involved in having made the land where
the plots are formed as developed, according to the degree
of development. For instance, if the retail price of plot
is Rs. 12/- per square yard, the wholesale price of the
acquired land with building potentiality could be fixed at
rupees varying between Rs.4/- and Rs.6/- depending upon the
nature of development found in the layout of the plot sold
in retail. Coming to fixation of the wholesale price of the
acquired land with building potentiality on the basis of
retail price of a building plot sold out of an undeveloped
layout of building plots, such wholesale price ought to be
fixed by deducting at least one-third of the retail price of
the building plot in such layout, because such would be the
least loss to be suffered in forming a layout of building
plots in the acquired land with building potentiality, after
leaving out land for roads, drains etc. by obtaining the
needed permissions from public authorities for making such
layout. Therefore, the wholesale price of the acquired land
could be fixed at Rs.8/- per square yard if the price
fetched or to be fetched by sale of building plot in an un-
developed layout is Rs. 12/-. However, in either of the
said cases whether it be the determination of the market
value of the acquired land with building potentiality with
reference to the price fetched by sale of plots in a well
developed layout in the neighbourhood or whether it be the
determination of the market value of the acquired land with
building potentiality with reference to the price fetched by
sale of building plots in an undeveloped layout of building
plots in the neighbourhood, it becomes inevitable for the
Court to find out what will be the price fetched or to be
fetched by the sales of plots in the layouts, relied upon by
any of the parties with reference to the price which the
plots could have fetched if sold on the date of the
publication of the preliminary notification under Section
4(1) of the Act. Further, where no evidence of price
fetched by the sales of the plots in layouts of building
plots in the neighbourhood of the acquired lands becomes
available, then what could be done is to find out the market
value of the acquired land with reference to the relevant
date of publication under Section 4(1) of the LA Act,
according to the actual use to which it was put and increase
its value by a small percentage having regard to the degree
of its building potentiality ascertained on the basis of
evidence
605
to be made available in that regard. A small percentage
increase to be given shall not exceed 1/5th of the market
value of the land found out according to its actual user
since resort to the method of giving increased value for
such building potentiality arises only when there is no
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evidence of sales of building plots in the neighbourhood of
the acquired land indicating that there was no immediate de-
mand, as such, for building plots even if formed in the
acquired land.
14. Hence, whether the acquired land has building
potentiality or not, while has to be decided upon reference
to the material to be placed on record or made available by
the parties concerned, the market value of the acquired land
with building potentiality, is also required to be deter-
mined with reference to the material to be placed on record
or made available in that regard by the parties concerned
and not solely on surmises, conjectures or pure guess.
Re: Question (2)
15. Value of building plots found in the Basic Valuation
Register The value of building plots mentioned in the Basic
Valuation Register can be of no assistance in determining
the market value of the land acquired under the LA Act is no
longer res Integra. In Jawajee Nagnatham Vs. Revenue
Divisional Officer, Adilabad, A.P. and Others [(1 994) 4 SCC
595], it is ruled by this Court that the value of lands men-
tioned in the Basic Valuation Register prepared and
maintained for the purpose of collecting stamp duty since
lacks statutory base, the same cannot form the foundation to
determine the market value of the lands acquired under the
LA Act by observing thus:
"It is, therefore, clear that the Basic Valu-
ation Register prepared and maintained for the
purpose of collecting stamp duty has no
statutory base or force. It cannot form a
foundation to determine the market value
mentioned thereunder in instrument brought for
registration. Equally it would not be a basis
to determine the market value under Section 23
of the Act, of the lands acquired in that area
or town or the locality or the taluk etc."
16. Therefore, the value of building plots as found in the
Basic Valuation Register maintained under the Stamp Act
cannot form the basis for determining the market value of
the lands acquired under the LA Act.
Re: Question (3):
17. Non cross-examination or ineffective cross-examination
of witnesses for the claimant Oral evidence is generally
adduced in the enquiry held by Court for determination of
the compensation payable for lands acquired under the LA
Act. Such oral evidence, generally, comprises of either of
the claimants or their witnesses examined in support of the
claims of claimants for grant of enhanced compensation,
which in its very nature, would be referable to matters of
situation of the acquired lands, their surroundings, their
value or the like. Several statements would be made by such
claimants or their witnesses when they are examined-in-chief
in Court, on matters that may bear on the market value of
acquired lands. If the witnesses who make such statements
arc not subjected to cross-examination or effective cross-
examination or no contrary evidence is adduced, is the Court
obliged to accept such state-
606
ments to be true in determining the market value of the
acquired lands ? It is, no doubt true, that whenever oral
evidence is adduced by parties on certain matters in
controversy, it may become difficult for Court to overlook
such evidence, if it is not shown by effective cross-
examination of such witnesses who have given such evidence
or by adducing contra-evidence, that the oral evidence was
unreliable or the witnesses themselves are not credit
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worthy. But, in land acquisition references before Civil
Courts, when witnesses give oral evidence in support of the
claims of claimants for higher compensation the ineffective
cross-examination of such witnesses, is not an uncommon
feature if regard is had to the manner in which claims for
enhanced compensation in land acquisition cases are defended
in courts on behalf of the State. Indeed, when a question
arose before this Court whether the Court is bound to accept
the statements of witnesses only because they have not been
effectively cross-examined or evidence in rebuttal has not
been adduced, it was observed by this Court in Chaturbhuj
Pande and Others v. Collector, Raigarh, [AIR 1969 S.C. 255],
thus :
"It is true that the witnesses examined on
behalf of the appellants have not been
effectively cross-examined. It is also true
that the Collector had not adduced any
evidence in rebuttal; but that does not mean
that the court is bound to accept their
evidence. The Judges are not computers.....
they are bound to call into aid their
experience of life and test the evidence on
the basis of probabilities."
18.Hence, we are unable to think that whenever the
statements made by claimants’ witnesses in courts are not
got over on behalf of the Collector or the LAO by subjecting
the witnesses to effective crossexamination or by not
adducing evidence in rebuttal, the courts are obligated to
accept such statements of witnesses as true, if tested on
the basis of probabilities, become unreliable. If the
courts were to accept such statements of witnesses as true
merely because they are not subjected to cross-examination
or effective cross-exam nation or because evidence in
rebuttal thereof has not been adduced, it would amount to
doling out public money to the claimants far in excess of
their legitimate entitlement for just compensation payable
for their lands. If such situation is prevented by courts
dealing with claims for compensation by testing the
statements of witnesses for claimants on the basis of
probabilities, the Court will have performed the duty justly
expected of them. Hence, no Court which tests the oral evi-
dence of the claimants on the touch-stone of probabilities
calling into aid, its experience of life, men and matters
and find such evidence to be untrustworthy, the same cannot
be found fault with.
Re: Question (4)
19. Market Value of large extents of acquired lands vis-a-
vis value fetched by small extents - It is a matter of
common knowledge that the large extents of lands if arc to
be sold, they cannot fetch the value which may be fetched by
sale of small extents of land. It is for that reason the
courts do not ordinarily accept the value fetched by small
extents as the basis for determination of the value of large
extents of acquired lands. In fact, where the small extent
of land sold is in significant when compared with large
extent of land acquired, the market value of large extent of
acquired lands shall not be determined
607
on the basis of value fetched by sale of infinitesimally
small extent of land. But, in exceptional cases when small
extent of land sold for a price as compared with the
acquired large extent of land, the market value of which is
required to be determined is not so insignificant, the Court
depending upon the possibility of the large extent of land
of the claimant being sold as a small extent of land as that
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already sold for a price the market value of the large
extent could be fixed on the basis of the price fetched by
sale of small extent. Even then, how far the price fetched
by sale of small extents can be made the basis for
determining the market value of large extents must
necessarily depend on the fact situation including that as
to why the purchase was made, in each case, which has come
on its record. However, when the value fetched by small
extents, are of building plots, in a building lay-out formed
of a large plot, it has to be seen whether the large
acquired land if is laid out into small building plots and
sold, whether they could fetch the price fetched by sale of
small building plots in the already formed building lay-out.
Then, the market value of the acquired land has to be
determined with reference to the value fetched by sale of
small plots by making allowances for various factors, such
as; loss of land required out of the acquired land to be
used for roads, drains, parks, the expenditure involved in
forming the layout waiting involved in sale of plots and
several other factors which will necessarily reduce the
wholesale price of the acquired land. Thus, how far the
value fetched by sale of small extents of lands could form
the basis for determining the market value of the acquired
land has to inevitably depend upon the allowances to be made
for factors which distinguish the acquired land from the
plots of land sold and the sale value of which is relied
upon as the basis for determining the market value of the
acquired land.
Re: Question (5) :
20. Section 51-A of the Land Acquisition Act 7 Section
51 -A of the LA Act reads thus :
"51-A. Acceptance of certified copy as
evidence. In any proceeding under this Act, a
certified copy of a document registered under
the Registration Act, 1908 (16 of 1908),
including a copy given under Section 57 of
that Act, may be accepted as evidence of the
transaction recorded in such document."
21.Certified copy of a document registered under the
Registration Act, 1908, but for the above provision could
have been only secondary evidence which could have been
accepted by the court when primary evidence relating to the
original documents were shown to be unavailable. Section 5
1-A of the LA Act, as seen therefrom, is enacted to enable
the parties in land acquisition cases, to produce certified
copies of documents, to get over the difficulty of parties,
in that, persons in possession of the original documents
would not be ready to put them in courts, for when once they
are put in Court, they cannot be sure, when they could take
their return from Court. However, the mere fact that a
certified copy of the document is accepted as evidence of
the transaction recorded in such document does not dispense
with the need for a party relying upon the certified copies
of such documents produced in court in examining witnesses
connected with documents to establish their genuineness and
the truth of their contents.
608
Therefore, the certified copies of registered documents,
though accepted as evidence of transactions recorded in such
documents, the court is not bound to act upon the contents
of those documents unless persons connected with such
documents give evidence in court as regards them and such
evidence is accepted by the Court as true. But, when the
LAO or the Collector has made his award, based on the
contents of documents, as found in the registers kept under
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the Registration Act and produces registration copies of
such documents in support of his award in Court, they could
be regarded acceptable as evidence by Court given in support
of the award unless it is shown by contra-evidence on behalf
of the claimants that such documents could not have been
relied upon by the Collector or LAO in making the award. It
would be so for the reason that when the LAO produces in
court Registration (certified) copies of those documents
which he had made the basis for determining the market
value, that would be only to support his award and not to
establish something independent of the award. If that be
so, when such documents are produced on behalf of the LAO in
court, they cannot be rejected on the ground that the wit-
nesses associated with those documents cannot be examined by
the LAO, inasmuch , even without producing such documents he
can rely upon the award made by him to show that he had
looked into those documents and he had determined the market
value on their basis. Hence, the mere fact that witnesses
associated with such certified copies of documents produced
as evidence in court were not examined on behalf of the LAO
will not in any way affect the award of the LAO, if he has
determined the market value of the acquired land having
perused those documents as found in the Registers kept under
the Registration Act or their certified copies, before
determining the market value of those lands on the basis of
such documents.
Re: Questions (6) and (7):
22. Section 23 (1-A) of the Land Acquisition Act Section
23 (1-A) of the LA Act reads thus :
"23 (1-A). in addition to the market-value of
the land, as 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 land 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. "
23. -It is clear from a reading of the above section that
in addition to the market value of the land awardable for
the acquired land under first clause of sub-section (1) of
section 23, the Court shall in every case award an amount
calculated at the tee 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(1) of
the LA Act, in respect of such land to the date of the award
of the Collector or the date of taking possession of the
land, whichever is earlier. Explanation, merely
609
disentitles the claimant for the amount during the period
referred to in the subsection, that is, the proceedings for
the acquisition of the land were held up by any stay or
injunction by the order of any court. The amount awardable
under sub-section (1-A) of section 23 of the LA Act, there-
fore, would be an amount of 12 per centum per annum on the
market value of the land determined under first clause of
sub-section (1) of section 23 for the period between the
date of publication of Notification under section 4(1)
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(i.e., the last of the dates of such publication and the
giving of such public notice) and to the date of the award
of the Collector or the date of taking possession of the
land, whichever is earlier.
24. In this context it has to be noted that the amount
payable is 12 per centum per annum on the market value in
the first clause of sub-section (1) of section 23 of the LA
Act. It has also to be noted that solatium under sub-
section (2) is not payable in respect of the amount
awardable under sub-section (1-A), in that, sub-section (2)
says that 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 on such market-value, in consideration of
the compulsory nature of the acquisition.
25. Since the amount payable under sub-section (1-A) of
section 23 as well as the solatium payable under sub-section
(2) are in addition to the market value of the land, as
above provided, they necessarilY refer to the market value
of the land award able in the first clause of sub-section (1
of section 23 of the LA Act.
Re: Question (8) :
26. Market value of the lands of the claimant The High
Court has refused to act upon documents. Exs. A-1 to A-6
relied upon on behalf of the claimant for obtaining enhanced
compensation for his acquired land. Ex. A-1 is a certified
copy of Sale Deed dated 16.2.1985. It was sought to be
proved by examination of PW2 the purchaser under that
document. The amount of consideration passed under that
document, though was mentioned as Rs.60,000/- for 250.80 sq.
yards of land sold thereunder, it had been said that that
amount had been paid before the witnesses. The High Court
has refused to believe the evidence as to passing of
consideration of Rs.60,000/- under that document. Whether
the consideration mentioned in a document, like sale deed
did pass from the buyer to the seller of land, being a
matter of pure appreciation of evidence and when the High
Court in appreciation of such evidence has refused to accept
that evidence and rejected the document, we find it
difficult to interfere with such finding of fact recorded by
the High Court and take a contrary view in the matter.
27. Similar is the view taken by the High Court in respect
of Sale Deed dated 26.7.1985, Ex. A-3, in proof of which
the vendor has been examined. Here again, the High Court
has rejected the sale deed by refusing to accept the oral
evidence adduced. Here also there is no justification for
us to take a view in the matter contrary to the view taken
by the High Court in the matter. Insofar as documents Exs.
A-2, A-4 and A-5 are concerned, those are gift deeds of
different dates. The claimant sought to rely upon the
amounts mentioned in them as the value of lands for purposes
of registration of documents, as those which could be taken
for purposes of
610
determining the market value of the acquired land in the
vicinity. The High Court took the view that the parties to
the gift deeds, when were near relatives, as father and
daughter or husband and wife, consideration mentioned in
them as the value of land which is solely for the purpose of
registration cannot represent the real market value of any
of those lands and hence cannot form the basis for
determination of the market value of the acquired land.
Consequently, High Court rejected the gifts deeds as
unhelpful for determination of the market value of the
acquired land. When rejection by the High Court of the gift
deeds is made on the basis of appreciation of evidence
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available before it, there can be no justification for us to
interfere with such rejection. The other document on which
reliance was placed by the claimant was Ex. A-6, which is
an extract of the Basic Valuation Register. As we have al-
ready held following an earlier judgment of this Court that
Basic Valuation Register extracts cannot be of any
assistance in determination of market value of an acquired
land, the rejection by the High Court of Ex. A-6, the basic
register extract, on its view, that on its basis the market
value of the acquired land cannot be determined, it is
difficult for us to hold that the High Court was unjustified
in rejecting Ex A-6 as that which cannot form the basis for
determination of the market value of the acquired land.
Thus, the said documents which were made the bask for
determination of the market value of the acquired land by
the civil court were rejected by the High Court on
reappraisal made by it of the oral evidence adduced in
respect those documents by taking into consideration the
relevant factors to which we have already referred, such
rejection, cannot be found fault with. However, what the
High Court has done in determining the market value of the
acquired land is to double the amount of the market value
disclosed in the sale deeds referred to in that award and on
that basis to fix the market value of the acquired land
after giving deduction of 20 per cent out of it towards
allowance of lay-out and then fix the market value of the
acquired land at Rs.32/- per sq. yard.
28. No doubt, as pointed out on behalf of the LAO, no
specific reason is given by the High Court in its judgment
as to why it doubled the amount of Rs.20/- per square yard,
the value fetched by sale deeds (Exhibits B-2, B-3 and B-4)
for fixing the market value of the acquired land. But, then
whether the award of the LAO himself lends support for such
doubling of the value of plots of land sold under the sale
deeds, Exhibits B-2, B-3 and B-4, for determining the market
value of acquired lands which were notified under Section
4(1) of the Act a few years thereafter, requires to be seen.
The award of the LAO (Ex. B-1) insofar, it concerns the
question reads thus:
"The land under acquisition is located between
the National Highway No. 7 and Old Kurnool
road and the proposed ring road connects these
two roads. The lands are also located near
Shivarampally railway station and in close
proximity to Katedan Industrial Estate and
fall within the newly formed Rajendranagar
Municipality. The area is fast developing and
there is much demand for residential house
plots particularly after developing the N.G.Os
colony at Mylardevally and Madhuban
residential complex of HUDA in the
neighbouring area. The area is also served
with all modem amenities like power, transport
,
telephone etc., with high potentiality for
developing housing colonies."
611
29.Therefore, when the LAO himself has stated as above of
the fast development of the area where the acquired lands
and adjoining building plots sold at Rs. 20 per square yard
were situated and the rush of people for purchase of
residential building plots in that area, ;he High Court
cannot be said to have gone wrong in stating that the
building plots sold under Exhibits B-2, B-3 and B-4 if had
been sold at the time of acquisition concerned, could have
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fetched double the rate of Rs.20/per square yard. Even so,
the High Court, in our view, could not have fixed the
wholesale price of acquired lands of the claimant at Rs.32/-
per square yard by deducting only 20% of Rs.40/- per square
yard fixed as the retail value of building plots in the
undeveloped layout of building plots formed in the land
adjacent to the acquired lands as on the date when they were
notified for acquisition under Section 4(1) of the Act. As
we have pointed out earlier whenever the wholesale price of
the acquired land with building potentiality is required to
be determined on the basis of prices of retail sales of
building plots in an undeveloped layout of building plots in
the vicinity of the acquired lands, at least one-third of
the retail price to be got by sale of plots in an unde-
veloped layout of building plots had to be deducted to
arrive at the wholesale price of the acquired lands with
building potentiality since the entire acquired land cannot
be sold as building plots, and some expense will have been
incurred by the owners of lands in laying it into building
plots and selling them even though they might not have spent
any amount on development of the layout.
30.When considered in the above perspective, the wholesale
price of the entire acquired lands of the claimant could be
fixed at Rs.27/- per square yard, that is, Rs.40/- per
square yard retail price to be got by sale of plots in the
undeveloped layout minus one-third of it to be deducted for
making of layout. Thus, the market value of the entire land
of the claimant would be Rs. 27/- per square yard and it has
to be determined accordingly.
31. In the result, we determine the market value of the
claimant’s acquired land of 4 acres 3 guntas i.e. 19723
square yards at Rs.27/- per square yard and that would be
Rs.5,32,521/-. The claimant would be entitled to get
solatium at the rate of 30 per cent on that market value of
the land. In addition to the market value of the land of
Rs.5,32,521/-, the claimant would be entitled to get an
amount at the rate of 12 per cent per annum thereon from the
date of publication of Notification under section 4(1) of
the LA Act, i.e., 2.9.1985 till the date of the award, i.e.,
14.7.1988. Again, the claimant would be entitled to get
interest on the enhanced compensation at the rate of 9 per
cent per annum from the date on which he gave the possession
of the land to the date of payment of such excess amount.
However, if such amount has not been paid by the expiry of
the period of one year from the date when possession was
taken, enhanced compensation would be payable at the rate of
15 per cent per annum from the date of the expiry of the
period of one year till the excess amount was paid to the
claimant or paid into court.
32. We, accordingly, allow Civil Appeal arising out of
S.L.P (C) No. 18202 of 1993 partly and dismiss Civil
Appeals arising out of S.L.P. (C) Nos. 13362-63 of 1993.
However, we make no order as to coos.
613