Allahabad High Court
Bulandshahr Khurja Development ... vs Smt. Amir Kuwar And Others on 1 July, 2019
Author: Sudhir Agarwal
Bench: Sudhir Agarwal, Rajeev Misra
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R Court No. - 34 Case :- FIRST APPEAL No. - 264 of 2012 Appellant :- Bulandshahr Khurja Development Authority through Secretary Respondent :- Smt. Amir Kuwar and others Counsel for Appellant :- B. Dayal Counsel for Respondent :- D.K. Mishra,B.B. Paul,B.K. Solanki Connected with Case :- FIRST APPEAL No. - 3 of 2016 Appellant :- Buladshahr Khurja Development Authority Respondent :- Atul Chandra and another Counsel for Appellant :- Bhupeshwar Dayal Counsel for Respondent :- Dushyant Singh,M.C.Singh Hon'ble Sudhir Agarwal,J.
Hon'ble Rajeev Misra,J.
1. Sri B. Dayal, Advocate for appellant in both these appeals and Sri M.C. Singh, Advocate, for respondents in First Appeal No. 3 of 2016.
2. In First Appeal No. 264 of 2012, names of three counsel appear for respondents as shown in the cause list, one of whom namely Sri D.K. Mishra has sought adjournment on the ground of illness, but no reason has been assigned as to why other counsel are not present despite the case having been called in revised. In such circumstances, we find no justification to adjourn this matter and proceed to decide present appeals after hearing above mentioned learned counsel appearing for respective parties.
3. Both these appeals arise from two similar but seperate Awards of Reference Courts under Section 18 of Land Acquisition Act, 1894 (hereinafter referred to as "Act 1894"), and have been filed under section 54 of the said Act. Since they involve common and similar questions of facts and law, therefore, have been heard together and are being decided by this common judgement.
4. Appeal No. 264 of 2012 (hereinafter referred to as 'Appeal-1') is a defendant's appeal arising from judgement and Award dated 10.5.2010 and decree dated 31.5.2010, passed by Sri Sushil Kumar, Additional District and Sessions Judge, Court No.9, Bulandshahr (hereinafter referred to as the 'Reference Court') adjudicating Land Acquisition Reference (hereinafter referred to as 'LAR') No. 184 of 2001 (Smt. Amir kuwar Vs. State of U.P.), determining market value of the acquired land for the purpose of payment of compensation at the rate of Rs. 8,50,000/- per Pakka Bigha (Rs. 281/- per sq-yard) and Rs. 3,54,783/- towards cost of the trees. Reference Court has also awarded other statutory dues like 12% additional compensation, 30% soletium and interest at the rate of 9% for one year from the date of possession and for subsequent period at the rate of 15%.
5. Appeal No. 3 of 2016 (hereinafter referred to as "Appeal-2") is also a defendant's appeal arising from judgement and Award dated 24.9.2015 and decree dated 6.10.2015, passed by Sri Rajat Singh Jain, Additional District Judge, Court No.2, Bulandshahr in LAR No. 1 of 2006, determining market value for the payment of compensation at the rate of Rs. 8,50,000/- per Pakka Bigha (Rs. 281/- per sq-yards) besides other dues like 30% solatium, 12% additional compensation and interest as per various provisions of the Statute. This Award has been delivered following earlier Award dated 10.5.2010, passed in LAR No. 184 of 2001, which is subject of Appeal-1.
Appeal-1
6. Facts in brief giving rise to this appeal are, that, Bulandshahr Khurja Development Authority (hereinafter referred to as "BKDA") is a statutory body constituted under the provisions of U.P. Urban and Planning Development Act, 1973 (hereinafter referred to as "Act 1973") for undertaking development in the area notified under Act 1973 of District Bulandshahr at Khurja. For the purpose of construction of residential and commercial building, BKDA proposed acquisition of land in village Akbarpur. The proposed scheme was named as 'Yamunapuram Avasiya Yojna, first phase'. It proposed acquisition of 61.801 acres (299116.84 sq-yard or 98.88 Bigha) land.
7. A notification dated 20.12.1988 under Section 4 of Act 1894 was published in U.P. Gazette on 20.12.1988. Notification dated 18.1.1989 making declaration under section 6 of Act 1894 was published in U.P. Gazette dated 18.1.1989. Possession of land was taken on 19.5.1989 and Award was published by Special Land Acquisition Officer (hereinafter referred to as "SLAO") on 4.4.1991. The said Award, however, did not include Gatas No. 363 area 5-0-11; 385 area 10-0-11; 375 area 0-4-0 i.e. 3 plots of total area 18-5-2 for the reason that respondent Smt. Amir Kunwar Devi in appeal-1 had filed Writ Petition No. 3317 of 1989, challenging acquisition Notifications and therein, an interim order was passed on 21.2.1989. The said writ petition was dismissed on 4.9.2000. Thereafter, aforesaid land of respondent Smt. Amir Kuwar Devi in Appeal-1 was taken in possession by State and transferred to BKDA on 22.9.2000. S.L.A.O published a supplementary Award dated 10.5.2001, offering compensation to respondents in First Appeals by determining market value for the purpose of compensation of acquired land, at the rate of Rs. 88,000/- per Bigha (i.e. Rs. 29.09 sq-yard).
8. In the award dated 4.4.1991, SLAO found that the part of land which was sold in small area plots to various sale-deeds, shows rates between Rs. 100/- per sq-yard to 420/- per sq-yard. There are some sale-deeds which show rates of Rs. 70/- to 100/- per sq-yard. SLAO ultimately, relied on sale-deeds No. 84 dated 25.11.1987, which relates to Plot No. 386, area 200 sq-yard (167.22 sq-meter) land was sold for consideration of Rs. 2000/- i.e. Rs. 100/- per sq-yard. Since the area of acquired land was much bigger, therefore he applied 25% deduction and determined market value of Rs. 75/- per sq-yard. Then it applied belting system, divided the said rate into two i.e. Rs. 75/- per sq-yard land which is nearer to Highway/G.T. Road and land which was 50 meter and more deep, at Rs. 50/- per sq-yard. In respect of other land which he found was agricultural land applying circle rate, he determined market value of Rs. 88,000/- per Pakka Bigha i.e. Rs. 29.09 per sq-yard for Jungle Auwal Abi and Rs. 56981/- for Jungle Auwal Khaki. In the supplementary award dated 10.5.2001, SLAO has followed earlier award by applying rate of Rs. 88,000 per Pakka Bigha i.e. Rs. 29.09 per sq-yard, which was determined for Jungle Auwal Abi.
9. Respondent in Appeal-1, filed Writ Petition No. 13729 of 2001 (Smt. Amir Kunwar Devi Vs. B.K.D.A. and Others), which was disposed of vide judgement dated 13.4.2001, directing Authority concerned to decide her representation. The order reads as under:
"The present writ petition is disposed of with the direction that it is open to the petitioner to approach the authority concerned for deciding the representation which is said to be pending before him. It is hereby directed that if the representation has not yet been decided, it may be decided in accordance with law very expeditiously.
The writ petition is disposed of with the observations. "
10. The representation was rejected by Vice Chairman, BKDA vide order dated 6.7.2001. Aggrieved by supplementary Award dated 10.5.2001, Smt. Amir kunwar Devi, respondent in Appeal-1, made an application to Collector under Section 18 of Act 1894 requesting to make Reference to District Judge for determination of market value for the purpose of compensation, under section 23 of Act 1894. She claimed compensation at the rate of Rs. 10,000/- per sq-meter and Rs. 75,00,000/- as the cost of 400 mango trees and Rs. 50,000/- compensation in respect of tubewell installed at the acquired land.
11. The appellant contested Reference by filing written statement, raising an objection that there was already a settlement between parties, wherein claimant-respondent, Smt. Amir kunwar Devi, had accepted compensation at the rate of Rs. 49.35 sq-meter. In this regard, agreement was executed on 16.4.2003 and sale-deed was executed on 16.4.2003 for 3001.84 sq-yard land, hence Reference is not maintainable. Reference Court in Appeal-1 formulated five issues, as under :
^^1& D;k Hkwfe v/;kfIr vf/kdkjh }kjk fnuakd 10&05&2001 dks fn;k x;k ,okMZ ux.; gS rFkk okn i= dh /kkjk&8 ds vuqlkj cktk: dher o lfdZy jsV ds dbZ xquk de gS \ 2& D;k ;kpuk i= dh /kkjk&7 ds vuqlkj vf/kxzg.k O;olkf;d mn~ns'; ls fd;k x;k Fkk] ;fn gkW rks izHkko \ 3& D;k okn i= dh /kkjk&9 ds vuqlkj vftZr Hkwfe esa ikS/kksa dh dher rFkk vU; V;wooSy o {kfriwfrZ dh izfrdj vkfn ,okMZ esa ugh fn;k x;k gS] ;fn gkW rks izHkko \ 4& D;k izfrokn i= 28d dh /kkjk&27 ds vuqlkj ;kfpuh dk okni= iks"k.kh; u gksus ds dkj.k [kkfjt gksus ;ksX; gS \ 5& mi'ke \** "1. Whether the Award dated 10.05.2001 passed by the Land Acquisition Officer is null & void; and is many times lesser than the market price and circle rate as alleged in para 8 to the plaint?
2. Whether the acquisition was done for commercial purpose as alleged in para 7 to the plaint? If so, its effect?
3. Whether compensation for the cost of planting, erection of tube-well, etc. in the acquired land has not been awarded as alleged in para 9 to the plaint? If so, its effect?
4. Whether the plaint of the petitioner is liable to be dismissed as being not maintainable as alleged in para 27 to the written statement being 28 Ka?
5. Relief?"
(Enlish Tanslation by Court)
12. Claimant-respondent in Appeal-1, in support of her claim, examined Sri Virendra Singh P.W.1 and herself as P.W.2. Defendant's oral evidence comprised of Sri Hari Singh as D.W.1.
13. Besides oral evidence, claimant-respondent in Appeal-1 filed copy of Award in LAR No. 563 of 1991, Ashok Kumar Vs. State of U.P; 266 of 1992, Kamal Mustafa Vs. State of U.P; 68 of 1992, Tahir Khatoon Vs. State of U.P and also submitted 61 sale-deeds executed between year 1991 to 2003 through List, Paper No. 29-C. Vide List Paper No. 151- C, she filed copies of 6 sale deeds; and vide List Paper No. 163-C, copies of 6 more sale deeds were filed. She also filed copy of Award dated 29.4.1995 in LARs No. 100 of 92, 169 of 92, 195 of 92 and 67 of 1992; copy of judgement dated 7.4.2010, passed by this Court in First Appeal No. 102 of 2000 (BKDA Vs. Ajay Kumar) and First Appeal No. 103 of 2000 (BKDA Vs. Arvind Kumar).
14. Defendant-appellants filed copies of 19 sale-deeds executed between 13.4.1987 to 15.7.1987, Award dated 4.4.1991 given by SLAO and agreement dated 16.4.2003.
15. Reference Court found that SLAO has determined market rate for the purpose of compensation at Rs. 88,000/-per Pakka Bigha (Rs. 29.09 per Sq-yard) for agricultural land, and Rs. 49.35 per sq-yard for abadi land. While answering issue-1, it has held that sale exemplars relied by SLAO are 1 to 2 years earlier to the date of notification under Section 4 of Act 1894 and land in those exemplars situated more than 100 meters away from the main road, while land in dispute was appurtenant to G.T Road, therefore, those exemplars were not valid in respect of land in dispute. Reference Court also rejected three sale-deeds relied by Claimant- respondents, filed along with List Paper No.160-C, on the ground that the same relate to the land which is far away from disputed land and hence not relevant in the matter. Similarly, documents filed as Paper No. 30-C to 60-C were also rejected. Thereafter, Reference Court referred to Awards given in LARs No. 168 of 1992, 169 of 1992, 195 of 1992 and 67 of 1992.
16. In LAR No. 195 of 1992, Plot No. 85, area 68 sq-yrd, was acquired for the same scheme with which the present matter relates. Reference Court determined market value at Rs.400/- per sq-yard, while in other References i.e. LARs No. 168 of 1992, 169 of 1992 and 67 of 1992, market rate was determined at Rs. 350/- per sq-yard. First Appeals No. 102 and 103 of 2010 filed by BKDA, challenging aforesaid determination of market value were dismissed on 7.4.2010.
17. Reference Court also examined difference in aforesaid References and the present one, inasmuch as area of land involved in aforesaid References was very small while in the present case, total area was more than 15 Pakka Bigha, which is a very bigger plot. Consequently, it followed the principle of deduction towards largeness of area and found that in the Awards, wherein appeals were dismissed, land was about 5 Pakka bigha and more, and its value comes to Rs. 10,50,000/- per Bigha; since in the case in hand it is thrice bigger, it held appropriate to allow 10 % deduction per Bigha and therefore, deducting Rs. 2,00,000/- lump sum, it determined market value at Rs. 8,50,000/- per Bigha (i.e. Rs. 281/- per sq yard).
18. Reference Court has also stated that during course of argument, counsel for B.K.D.A. admitted that tenure holders have already been paid compensation at the rate of Rs. 300/- per sq-yard. Issue-1 was answered accordingly, determining market rate at the rate of Rs. 8,50,000/- per Pakka Bigha (i.e. Rs. 281 per sqr-yard).
19. Issue 2 was also answered in favour of Claimant-respondent. Issue-3, since in the Award dated 10.5.2001, no compensation was awarded in respect of trees and tubewell, hence it was answered in favour of Claimant-respondent holding that she was entitled for compensation in respect of standing trees and it determined compensation of Rs. 3,54,783/- on this count.
20. Answering issue-4, Reference Court found that alleged agreement was confined only in respect of 3001.83 sq-yard land and not the remaining one, therefore, for remaining land, said agreement was not relevant, particularly when it was clearly stated that Reference pending in Reference Court, only to the extent of area of land for which settlement was entered into, would not be pressed. Issue-5 was also answered in negative and thereafter Reference has been answered as stated above.
21. Appeal-2 also relates to the same acquisition proceedings arising from notifications dated 20.12.1988 issued under section 4 of Act 1894 and 18.1.1989 issued under section 6 of Act 1894.
22. Claimant-respondent, Sri Atul Chandra and Smt. Vibha Chand, are owners of Khata No. 132 Gata No. 358 area 3-9-0 and Gata No. 384 area 4-16-10. Possession of aforesaid land was also belated due to writ petition filed by Claimant-respondent before this Court and ultimately, possession was taken on 22.5.2000. Award was made by SLAO on 7.7.2005, offering compensation at the rate of Rs.88,000/- per Bigha i.e. Rs. 29.09 per sq-yard. Aggrieved thereby, Claimant-respondents made application under section 18 for Reference to District Judge for determining market value under section 25 of Act, 1894, claiming compensation at the rate of Rs. 5,000/- per sqr. mtr. Here also Reference Court formulated five issues, as under:
"1. Whether the compensation, awarded to the petitioners for their acquired land is insufficient?
2. Whether the acquired land is of residential and commercial potentiality?"
3. Whether the petition is barred by principles of estoppels and acquiescence?
4. Whether the reference is time barred?
5. Relief?
23. Issue -3 and 4 were answered in negative. Answering issue-1, Reference Court also followed the same reasonings as were followed by Reference Court in its Award dated 10.5.2010, passed in LAR. No. 184 of 2001 and determined market value at the rate of Rs. 8,50,000/- per Pakka Bigha ( i.e. Rs. 281/- per sqr yard) for the purpose of compensation.
Contentions in these Appeals
24. Learned counsel appearing for appellants has confined his challenge to the awards in question only to the extent of market value of acquired land determined at the rate of Rs. 8,50,000/- Bigha (i.e. Rs. 281/- per sq-yard). He submits that determination of market value by Reference Court is imaginary, highly excessive, unreal and beyond the rates prevailing in the area at the time of issue of notification under Section 4 of Act 1894. He also contended that relevant exemplars have been ignored, findings are based on exemplars, which pertained to very small land and should not have been treated to be a valid exemplars; percentage of deduction applied towards largeness of area is almost negligible, and deduction ought to have been applied to a larger extent, and thus the awards are liable to be set aside.
25. Per contra, learned counsel appearing for claimant-respondents submitted that acquired land is in highly developed area, appurtenant to Highway i.e. G.T. Road and had great potential of development; mere fact that it was used for agricultural purpose has no relevance for the reason that near-by area was already developed as Abadi, having all amenities and facilities; land was being sold in small plots at a much higher rates than what has been Awarded by Reference Court, therefore, no interference is called for. Lastly, he submitted that poor farmers have lost their source of livelihood i.e. agricultural land pursuant to acquisition in question as long back as in December, 1988 and after more than 31 years, are still engaged in litigation and that too only to get appropriate consideration of land, which has been snatched away forcibly by acquisition by State without paying compensation at market value and still they are reeling in hope of getting appropriate market value which for all practical purposes has already lost much substance for the reason that whatever amount now they will get, would not be sufficient to enable them to purchase another land, since cost of land has multiplied several hundred times, particularly, due to extraordinary development in the vicinity of BKDA area and sky rocketing prices of land. Now alternative land to respondents has become a dream, which cannot be achieved. Therefore, State on the one hand had taken away their land and on the other has failed to pay adequate compensation at par with the market value and lastly by engaging claimant-respondent in litigation for last three decades, it has virtually rendered respondents totally landless and also without any source of earning livelihood. It is also said that how and in what manner respondents had met their expenses and managed litigation expenses, is something which only respondents know and even if payment is now made to respondents as per rates determined by Reference Court, it would be virtually negligible part of actual market value of the land acquired by BKDA, which it can fetch now. He, therefore, submitted that it is not a fit case in which Court should interfere, particularly when substantial justice has been done and Reference Court has made its Award on the basis of relevant material placed before it.
26. It is not in dispute that determination of market value is to be made with reference to date when notification under Section 4 of Act 1894 was issued and in the present case, the relevant date would be 20.12.1988.
27. From the rival submissions advanced on behalf of both the sides, in our opinion, following points for determination have arisen:
(i) Whether Reference Court has rightly determined market rate of Rs. 8,50,000.- i.e. Rs. 281/- per square meter of entire acquired land irrespective of area of individual plots of Land Owners, their location and other relevant factors?
(ii) Whether Reference Court ought to have considered the question of determination of market value, with reference to entire area of acquired land, its location/situation and other developmental advantages/ disadvantage vis-a-vis relevant exemplars or it should be vis-a-vis different plots of different Land Owners?
(iii) Where area of acquired land is very large and from main G.T. Road land goes in deep to the extent of more than 500 meters, whether 'Belting System' ought to have been applied and Court below has erred in law by not applying 'Belting System'.
(iv) Whether Court below has rightly followed exemplar sale-deed and awards in other LARs, relating to same acquisition proceedings has erred in law in rejecting exemplar sale-deeds, relied by appellants and placed in evidence?
(v) Whether Reference Court has considered/ rejected relevant exemplars or has followed exemplar(s), which was/were not valid and inapplicable in the case in hand and its findings is based on irrelevant material?
28. All the aforesaid issues are interrelated, therefore, we are considering the same together.
29. Before examining the aforesaid issues on merits, it would be appropriate to have a bird eye view of relevant legal principles settled in last several decades, which are to be applied when market value of a land acquired, forcibly, under the provisions of Act, 1894 has to be determined by Court in a Reference made under Section 18 of the said Act.
30. In the light of rival submissions, as noticed above, we have now to examine the only point for determination, "whether market value determined by Reference Court is just, adequate and actual or it is excessive and on a higher side which requires reduction".
31. Before examining the aforesaid issue on merits, it would be appropriate to have a bird's eye view of relevant legal principles settled in last several decades, which are to be applied when 'market value' of a land acquired forcibly under the provisions of Act, 1894 has to be determined by Court in a Reference made under Section 18 of the said Act.
32. In Chimanlal Hargovinddas vs. Special Land Acquisition Officer (1988) 3 SCC 751, Court has said that a reference is like a suit which is to be treated as an original proceeding. Claimant is in the position of a plaintiff who has to show that price offered for his land in the Award is inadequate. However, for the said purpose, Court would not consider the material, relied upon by Land Acquisition Officer in Award, unless some material is produced and proved before Court.
33. Thus, Reference Court does not sit in appeal over the Award of Land Acquisition Officer. Material used by Land Acquisition Officer is not open to be used by Court suo motu unless such material is produced by the parties and proved independently before Reference Court. Determination of market value has to be made as per market rate, prevailing on the date of publication of notification under section 4 (1) of Act, 1894.
Circle Rate- Relevance:
34. As we have noticed that circle rates were also relied before Reference Court. In law circle rates are irrelevant and ought not to have been considered. In the matters where circle rates are relied and referred such an approach has been castigated, condemned and disapproved by Courts time and again.
35. In Jawajee Nagnatham v. Revenue Divisional Officer, (1994) 4 SCC 595, this question came up for consideration in the matter arisen from State of Andhra Pradesh. The landowners appealed against order of Reference Court before Andhra Pradesh High Court claiming higher compensation on the basis of "Basic Valuation Register" maintained by Revenue authorities under Stamp Act, 1899. The claim of Land-Owners failed in High Court, which held that such Register had no evidenciary value on statutory basis. In appeal, Supreme Court held that Basic Valuation Register was maintained for the purpose of collecting stamp duty under Section 47-A of Stamp Act, 1899 as amended in State of Andhra Pradesh. It did not confer, expressly, any power upon Government to determine market value of land prevailing in a particular area, i.e., village, block, district or region. It also did not provide a statutory obligation upon Revenue authorities to maintain Basic Valuation Register for levy of stamp duty in regard to instruments presented for registration. Therefore, there existed no statutory provision or rule providing for maintaining such valuation register. In the circumstances, such register prepared and maintained for the purpose of collecting stamp duty had no statutory force or basis and cannot form a valid criteria to determine market value of land acquired under Act, 1894. This decision was followed in Land Acquisition Officer Vs. Jasti Rohini, 1995 (1) SCC 717.
36. Another matter from State of U.P. came up for consideration involving same issue in U.P. Jal Nigam Vs. M/s Kalra Properties (P) Ltd., (1996) 3 SCC 124. Landowners' demanded compensation in regard to land acquired under Act, 1894 on the basis of market value assessed as per circle rate determined by Collector. It was accepted by High Court, but in appeal, judgment was reversed by Supreme Court following its earlier decision in Jawajee Nagnatham (supra). Court held that market value under Section 23 of Act, 1894 cannot be determined on circle rates determined by Collector for the purpose of stamp duty under Stamp Act, 1899. This view was reiterated in Krishi Utpadan Mandi Samiti Vs. Bipin Kumar, (2004) 2 SCC 283.
37. The issue was again considered by a larger Bench in Lal Chand Vs. Union of India and another (2009) 15 SCC 769 wherein two Judgments of Apex Court taking a view that circle rates may be considered, as prima facie basis, for the purpose of ascertaining market value, were examined. These decisions are Ramesh Chand Bansal v. District Magistrate/Collector, (1999) 5 SCC 62 and R Sai Ram Bharathi v. J Jayalalitha, (2004) 2 SCC 9. Court resolved controversy, holding, if in a particular case, guidelines for market values are determined by an Expert Committee constituted under State Stamp Law, following a detailed procedure laid down under the relevant rules and are published in State Gazette, same may be considered as a relevant material to determine 'market value'. Court said, when guidelines of market value, i.e., minimum rates for registration of properties, are so evaluated and determined by Expert Committees, as per statutory procedure, there is no reason why such rates should not be a relevant piece of evidence for determination of market value. Having said so, in para 44, Court further said:-
"44. One of the recognised methods for determination of market value is with reference to the opinion of experts. The estimation of market value by such statutorily constituted Expert Committees, as expert evidence can, therefore, form the basis for determining the market value in land acquisition cases, as a relevant piece of evidence. It will be however open to either party to place evidence to dislodge the presumption that may flow from such guideline market value. We, however, hasten to add that the guideline market value can be a relevant piece of evidence only if they are assessed by statutorily appointed Expert Committees, in accordance with the prescribed assessment procedure (either streetwise, or roadwise, or areawise, or villagewise) and finalized after inviting objections and published in the gazette. Be that as it may."
(emphasis added)
38. It is thus evident that for the purposes of determining market value circle rate fixed by Collector for the purposes of stamp duty would not be a relevant material unless such determination is under a statutory obligation and after following the prescribed procedure.
Other Principles relevant for determining market value:
39. For determining market value of acquired land, in the last several decades, Courts have considered the matter time and again and laid down certain principles which includes; (i) Court should proceed as hypothetical purchaser willing to purchase land from open market and prepared to pay a reasonable price on the scheduled date, i.e., the date of publication of notification under Section 4 of Act 1894, (ii) willingness of Vendor to sell the land on reasonable price shall be presumed, (iii) relevant material, which may help the Court to find out reasonable price would include sale deeds, if any, executed in the close proximity of the relevant date which is genuine and shows a voluntary and open transaction between the parties. Where land subject matter of exemplar sale deed is smaller or larger but the document otherwise is credible and genuine, suitable adjustment by applying plus and minus factors and also appropriate deduction can be made by the Court.
40. A burden, however, to establish as to what is the reasonable and adequate market value and that the offer made by Collector is inadequate, is on the Land Owners at whose instance Reference has been made to District Judge under Section 18 of Act, 1894.
41. The size of land would constitute an important factor to determine market value. It cannot be doubted that small size plot may attract a large number of persons being within their reach which will not be possible in respect of large block of land wherein incumbent will have to incur extra liability in preparing a lay out and carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers etc. Courts have said that in such matters, factors can be discounted by making deduction by way of an allowance at an appropriate rate ranging between 20% to 75%, to account for land, required to be set apart for carving out road etc. and for plotting out small plots.
42. The concept of smaller and larger plots should be looked into not only from the angle as to what area has been acquired, but also the number of land holders and size of their plots. When we talk of concept of prudent seller and prudent buyer, we cannot ignore the fact that in the category of prudent seller, the individual land holder will come. It is the area of his holding which will be relevant for him and not that of actual, total and collective large area, which is sought to be acquired.
43. In Kausalya Devi Bogra and others v. Land Acquisition Officer, Aurangabad and another, (1984) 2 SCC 324, about 150 acres of land was acquired. Owners of acquired land were in two groups, i.e. Kaushalya Devi Bogra and Syed Yusufuddin Syed Ziauddin. First group, i.e. Kaushalya Devi Bogra owned 74 acres, while Yusuffuddin owned about 15 acres of land. In these facts of the case, where almost 60% of total acquired land was owned by two sets of owners and exemplar of smaller property was relied, Court said that "when large tracts are acquired, the transaction in respect of small properties do not offer a proper guideline. In certain other cases, for determining market value of a large property on the basis of a sale transaction for smaller property, a deduction should be given.
44. In Bhagwathula Samnna and others v. Special Tehsildar and Land Acquisition Officer, Visakhapatnam Municipality (1991) 4 SCC 506, High Court applied deduction of 33.3% observing, when large extent of land was acquired under housing scheme and exemplar is of small land, reasonable deduction can be made. Following the decision in Tribeni Devi v. Collector, Ranchi, AIR 1972 SC 1417, it was argued that High Court wrongly applied deduction; acquired land was fully developed and eminently suitable for being used as house sites and, therefore, there was no justification for making any deduction. The land was acquired for formation of road, High Court applied deduction on the ground that expenses have to be incurred for development, which was not justified. Aforesaid submission was considered by Supreme Court in the light of facts of that case. In para 7 and 11, Court said: -
"7. In awarding compensation in acquisition proceedings, the Court has necessarily to determine the market value of the land as on the date of the relevant notification. It is useful to consider the value paid for similar land at the material time under genuine transactions. The market value envisages the price which a willing purchaser may pay under bona fide transfer to a willing seller. The land value can differ depending upon the extent and nature of the land sold. A fully developed small plot in an important locality may fetch a higher value than a larger area in an undeveloped condition and situated in a remote locality. By comparing the price shown in the transactions all variables have to be taken into consideration. The transaction in regard to smaller property cannot, therefore, be taken as a real basis for fixing the compensation for larger tracts of property. In fixing the market value of a large property on the basis of a sale transaction for smaller property, generally a deduction is given taking into consideration the expenses required for development of the larger tract to make smaller plots within that area in order to compare with the small plots dealt with under the sale transaction.
11. The principle of deduction in the land value covered by the comparable sale is thus adopted in order to arrive at the market value of the acquired land. In applying the principle it is necessary to consider all relevant facts. It is not the extent of the area covered under the acquisition, the only relevant factor. Even in the vast area there may be land which is fully developed having all amenities and situated in an advantageous position. If smaller area within the large tract is already and suitable for building purposes and have in its vicinity roads, drainage, electricity, communications etc. then the principle of deduction simply for the reasons that it is part of the large tract acquired, may not be justified."
(emphasis added)
45. Court further held that proposition that large area of land cannot possibly fetch a price at the same rate at which small plots are sold is not absolute proposition and in given circumstances it would be permissible to take into account price fetched by small plots of land. If larger tract of land, because of advantageous position, is capable of being used for the purpose for which smaller plots are used and is also situated in a developed area with little or no requirement of further development, the principle of deduction of value for the purposes of comparison is not warranted. Having said so, Court in para 13 held as under: -
"13. With regard to the nature of the plots involved in these two cases, it has been satisfactorily shown on the evidence on record that the land has facilities of road and other amenities and is adjacent to a developed colony and in such circumstances it is possible to utilize the entire area in question as house sites. In respect of the land acquired for the road, the same advantages are available and it did not require any further development. We are, therefore, of the view that the High Court has erred in applying the principle of deduction and reducing the fair market value of land from Rs.10/- pr square yard to Rs.6.50 paise pr square yard. In our opinion, no such deduction is justified in the facts and circumstances of these cases."
(emphasis added)
46. In V.M. Salgoacar & brother Ltd. vs. Union of India (1995) 2 S.C.C 302, land acquired by notification dated 06.07.1970 in village Chicalim near Goa Airport belonged to a single owner. Court observed, when land is sold out in smaller plots, there may be a rising trend in the market, of fetching higher price in comparison to the plot which are much higher in size. Having said so Court further said:
" though the small plots ipso facto may not form the basis per se to determine the compensation, they would provide foundation for determining the market value. On its basis, giving proper deduction, the market value ought to be determined".
(emphasis added)
47. Again in Shakuntalabai (Smt.) and others vs. State of Maharashtra, 1996 (2) S.C.C 152, 20 acres of land in Akola town was sought to be acquired by notification published on 11.08.1965 under section 4(1) of Act, 1894 which was also owned by a single person. It is in this context, Court said:
"the Reference Court committed manifest error in determining compensation on the basis of sq. ft. when land of an extent of 20 acres is offered for sale in an open market, no willing and prudent purchaser would come forward to purchase that vast extent of land on sq. ft. basis. Therefore, the Reference Court has to consider valuation sitting on the armchair of a willing prudent hypothetical vendee and to put a question to itself whether in given circumstances, he would agree to purchase the land on sq. ft. basis. No feat of imagination is necessary to reach the conclusion. The answer is obviously "no".
(emphasis added)
48. In order to determine market value when exemplars are adduced, normally it is found that exemplars of small land, and that too, in developed area after plotting and development are relied. Sometimes a single exemplar is available and sometimes more than that. It is not the number of exemplars which is important and would determine the question whether burden has been discharged by Claimants that offer of compensation made by Collector is inadequate and he is entitled to higher compensation but it is the genuity, authenticity and creditworthiness of the documents. If the document is found most suitable and appropriate for determining compensation in respect of acquired land, even a single instance/exemplar cited by Land Owner may be relied and it can be said that Claimant-Land Owner has succeeded in discharging his burden.
49. In Gafar vs. Moradabad Development Authority, 2007 (7) SCC 614, Court observed that burden is on Claimants to establish that amount awarded to them by Collector is inadequate. That burden has to be discharged by Claimants and only if initial burden in that behalf is discharged, the burden would shift to State to justify the compensation offered by SLAO.
50. Further, when there are more than one exemplar, one, which provides highest rate, has to be followed. In Satish Vs. State of U.P., 2009 (14) SCC 758, Court after relying on its earlier decision in Viluben Jhalenjar Contractor (Dead) by Lrs. Vs. State of Gujarat, 2005 (4) SCC 789, said :
"...when comparable exemplars are brought on record, the one carrying the highest market value amongst them may be followed."
(emphasis added) Deductions:
51. Whenever the area of acquired land is larger than the area of land which is subject matter of the exemplar and smaller in size, Courts have held the same admissible subject to appropriate deduction.
52. In Basavva (Smt.) and others Vs. Special Land Acquisition Officer and others, (1996) 9 SCC 640, notification under Section 4(1) of Act, 1894 proposing to acquire 194 acres of land for industrial development near Dharwad was published on 30.10.1981. Collector made award dated 22.8.1985 offering compensation at the rate between Rs. 8,000/- to Rs.8,080/-, which was enhanced by Reference Court vide award dated 11.10.1988 to Rs.1.72/- per square foot (Rs.74,953/- per acre). On appeal High Court reduced compensation to Rs.56,000/- per acre. The appeal preferred by State Government against High Court's judgment was dismissed. In the appeals preferred by landowners, it was contended on behalf of landowners that deduction towards development upto 53% was reasonable but High Court in applying 65% deduction has erred in law. Court observed, while determining compensation, at first instance, it has to be seen whether sales relating to smaller pieces of land are genuine and reliable; and, whether they are in respect of comparable land. If it is found that sales are genuine and reliable and lands have comparable features, sufficient deduction should be made to arrive at a just and fair market value of large tracts of land. The time lag for real development and waiting period for development are also relevant for determination of just and comparable compensation. For deduction of development charges, nature of development, conditions and nature of land, the land required to be set apart under building rules for roads, sewerage, electricity, parks, water etc. and all other relevant circumstances involved are to be considered.
53. The above principles were also laid down in D. Vasundara Devi Vs. Revenue Divisional Officer, (1995) 5 SCC 426 which was relied by Court in Basavva (Smt.) & Others Vs. Special Land Acquisition Officer and others (supra). It then found that exemplar sale deed was dependable but in respect of a small plot of land situated at a distance of more than 1 k.m; land in area is not developed and there is no development towards that area and it would take years for development in those land though land was capable of user for non-agricultural purpose. It is in this background, Court applied 53% deduction for development. It further held that since long time would be taken for development and for that purpose additional 12% deduction was allowed making total deduction as 65%.
54. In Land Acquisition Officer, Kammarapally Village Vs. Nookala Rajamallu and others, AIR 2004 SC 1031, Court said as under :
"It has been held that the deduction can be made where the land is acquired for residential and commercial purpose with regard to roads and civic amenities, expenses of development of the sites by laying out roads, drains, sewers, water and electricity lines, and the interest on the outlays for the period of deferment of the realization of the price, the profits on the venture etc. So far as this Court is concerned, it has discarded the deduction policy on various grounds. One of the grounds is that if the State or its authority acquires the land for the purpose of selling it to the ultimate purchasers upon making available facilities, they normally recover the price inclusive of common facilities, therefore, a Government or its authority cannot be doubly benefited either by deductions from the payment of compensation in one hand and by collections of price of such development from the ultimate purchasers on the other hand. It also to be seen that no law prescribes deduction in paying compensation. It is to be remembered that deduction is an exception not the rule."
(emphasis added)
55. In Udho Dass Vs. State of Haryana and Ors. 2010 (12) SCC 51, by notification dated 17.5.1990, 162.5 acres of land in village Patti Musalmanan was sought to be acquired for the purposes of housing project in Sonepat (Haryana). Collector determined compensation at the rate of Rs.Two Lacs per acre, but it was enhanced by Additional District Judge on reference under Section 18 of Act, 1894 to Rs.125/- per square yard for the land behind E.C.E. Factory, situated away, and on the left side of the Sonepat Bahalgarh road, and Rs.150/- per square yard on the right side abutting the road. Reference Court held that land on the left side did not abut the road and it had therefore less potential value vis-a-vis land on the right side, which touched the road. In appeal High Court enhanced compensation from Rs.125/- to Rs.135/- and from Rs.150/- to Rs.160/-. Land owner came in appeal before Supreme Court claiming compensation at Rs.200/- per square yard. Court, as a matter of fact, found that even compensation, which was determined by Collector or Reference Court was not paid to Land-Owners immediately, but payment spread over for two decades. Court said if compensation payment continued over a period of almost 20 years, potential of land acquired from Land-Owners must also be adjudged keeping in view development in the area, spread over the period of 20 years if evidence so permits and cannot be limited to near future alone. Court observed that this broad principle would be applicable where possession of land has been taken pursuant to proceedings under an acquiring Act and not to those cases where land is already in possession of Government and is subsequently acquired. Court also observed that in case where compensation is based exclusively on sale instances, it creates some time a disadvantageous position to Land-Owners, whose land is forcibly acquired. There is wide spread tendency to undervalue sale prices. Circle rates determined by Collector only marginally corrected the anomaly, as these rates are also abnormally low and do not reflect true value. These things cause serious disadvantage to Land-Owners, since they have no control over price on which some other Land-Owners sell their property, which is often the basis for compensation payable to Land-Owners, whose land are forcibly acquired. Court also held that there cannot be application of belting system in that case. Normally, land along side the road has more value vis-à-vis the land away from, but that would have been the case where agricultural land, which have no potential for urbanization or commercialization had been acquired and in such a case, belting system is permissible.
56. In Udho Dass (supra) Court held that land was acquired in 1990. It had great potential and had been completely urbanized as huge residential complexes, industrial area and estates, huge education city have come up in the last 10 or 15 years. It further held as under: -
"Moreover, insofar as land which is to be used for residential purposes is concerned, a plot away from the main road is often of more value as the noise and the air pollution alongside the arterial roads is almost unbearable. It also significant that the land of Jamalpur Kalan was touching the rear side of the ECE factory and the High Court had granted compensation of Rs.250/- per square yard for the acquisition of the year 1992. We have also seen the site plan to satisfy ourselves and find that the land acquired from Jamalpur Kalan and the present land share a common boundary behind the ECE factory. The belting system in the facts of the present case would thus not be permissible."
(emphasis added)
57. In Anjani Molu Desai v. State of Goa and another, (2010) 13 SCC 710, a very large tract comprising 3,65,375 square meter of land in Balli village, Quepem Taulak, Goa was acquired for the purposes of Konkan Railway for laying down broad gauge line. Acquisition notification was issued on 30.7.1991. Appellant Anjani Molu Desai owned 60,343 square meter of land in Survey No.45/1, 45/5, 45/6, 51/1 and 51/2. Collector awarded compensation at the rate of Rs.12/- per square meters for orchard lands and Rs.6/- per square meter for paddy lands. Reference Court and High Court affirmed said valuation by rejecting Reference and Appeal. Collector determined market value relying upon two exemplars and taking an average thereof. First exemplar sale deed dated 30.8.1989 relates to 2055 square meters of land situated at the distance of 200 meter away from acquired land and sold at the rate of Rs.43.80 per square meters. Collector deducted 45% from sale price towards "development cost" i.e. for providing approach road and open spaces, expenses relating to development work, conversion charge etc. This reduced price to Rs.24/- per square meter. Since sale deed was of August, 1989 and acquisition commenced in 1991, thus there being gap of 20 months, Collector provided an increase at the rate of 14.5% per annum and thus, arrived at Rs.32.24 per square meter. Exemplar sale deed dated 30.1.1990 relates to sale of 7600 square meters of land at a distance of one kilometer from acquired land sold at Rs.3/- per square meter. Here also, there was a gap was of 18 months, thus 14.5% increase was allowed, which made sale price to Rs.3.82 per square meter. Collector then averaged two rates derived from two sale deeds and determined Rs.18/- per square meter (Rs.32.24 + Rs.3.82÷2). This method adopted by Collector was not approved by Supreme Court. It was held, where there are more than one exemplar, which could be considered for determining market value, the one providing higher rate should be accepted and followed. It is only in exceptional cases where there are several sales of similar land, whose prices range in a narrow bandwidth, the average can be taken as representing market value. But where values disclosed in respect of two sales are markedly different, it can only lead to an inference that they are with reference to dissimilar land or that lower value sale is on account of under valuation or other price depressing reasons. In respect of orchard land, therefore, Court followed exemplar sale deed dated 30.8.1989 providing sale price at Rs.43.80 per square meter and applying appreciation of 14.5% and odd per annum, Court determined market value at Rs.57.50 and to that extent claim of appellant Anjani Molu Dessai was upheld. Here also proposition laid down by Apex Court is not exceptional but on the facts of the case.
58. In Nelson Fernandes and others v. Special Land Acquisition Officer, South Goa and others, AIR 2007 SC 1414, land was acquired for new broad gauge line of Konkan Railway. Acquisition notification under Section 4 Act, 1894 was issued in August, 1994. SLAO made award of Rs.4/- per square meter. In Reference, District and Sessions Judge relying on two sale deeds dated 13.12.1993 enhanced compensation at the rate of Rs.192/- per square meter. Sale price in exemplar sale deed was Rs.449/- per square meter. Land-Owners as well as acquiring body both preferred appeals. Land owner's appeal was rejected while acquiring body's appeal was allowed to the extent that market value was reduced to Rs.38/- per square meter. Supreme Court found that compensation awarded by High Court by rejecting valuer report is not based on cogent material and not supported by cogent reasons. The injury, which land owner, was likely to sustain due to loss of his future earning from selling land as also damage already suffered due to diminution of profit of land between time of publication of notice and time taken by Collector in possession was not considered. Since land was acquired for the purposes of laying down railway line, no development was to be done. There existed civil amenities like, school, police station, water supply, bank, electricity, highway, transport, petrol pump, industries, telecommunication and other business. Hence it determined compensation at the rate of Rs.250/- per square meter, but then applied 20% deduction, which brings rate at Rs.200/- per square meter.
59. In Special Land Acquisition Office v. Karigowdo and others, 2010 (5) SCC 708, total acquired land was 146 acres and 7 guntas. It was owned by 419 Claimants-land owners, whose area varied from 2 to 48 guntas. Acquired land situated in village Sanaba, Chinakavali Hobli, Pandavapura. These land got submerged in 1993 under backwaters of Tonnur tank due to construction of Hemavathi Dam. Physical possession of land was taken between October, 1996 to December, 1999, while acquisition notification under Section 4 (1) of Act, 1894 was issued on 4.4.2002. Crops standing on land were damaged. SLAO determined market value at Rs.90,460/- per acre for wet land and Rs.37,200/- per acre for dry land. On Reference, compensation was enhanced to Rs.2,92,500/- per acre for wet land (garden land), Rs.1,46,250/- for dry land (lightly irrigated) and Rs.1,20,000/- for dry land (without mulberry crop). In appeal by Land-Owners, High Court enhanced compensation to Rs.5,00,000/- per acre for wet/garden land and Rs.2,53,750/- per acre for dry land. State, therefore, came in appeal before Supreme Court. Dispute arose before Court was for computation of compensation payable to Claimants and quantum thereof. Argument advanced by State was that method adopted by Reference Court as well as High Court was impermissible in law. Court cannot take into consideration commercial activity, which may result from, and be indirectly incidental to agricultural activity, particularly, when both of them are carried on independent of each other. In that case there were no sale instances from village Sanaba prior to 2002. The exemplars of adjoining villages were produced before Court. After looking into statutory provisions of Act, 1894, Court said (1) provision of Section 23 are mandatory; and (2) it is for Claimants to ascertain as a matter of fact - location, potential and quality of land for establishing its fair market value. It is for Claimant to show that, what is contemplated under conditions attached thereto has been satisfied. It is also for Claimants to show that to award compensation payable under statutory provisions, they have brought on record evidence to satisfy criterion and conditions required to be fulfilled for such a claim. Court has to determine compensation strictly in accordance with the provisions of Sections 23 and 24 of Act, 1894. Potentiality of land should be on the date of acquisition i.e. existing potentiality. Further, potentiality has to be directly relatable to capacity of acquired land to produce agricultural products, or its market value relatable to method of compensation. If there exist crops, trees or fruit bearing trees, the same can be taken into consideration, but extent of benefit cannot go to the extent that fruits grown in agricultural land would be converted into processed food like jam or any other eatable products. This extension of loss of benefits amounts to remote factors, which is not permitted to take into consideration. Court thus held that compensation determined by Reference Court and High Court was not justified. State appeal was partly allowed and Court provided for compensation at Rs.2,30,000/- per acre for wet/garden land and Rs.1,53,400/- per acre for dry land.
60. In Mohinder Singh and others v. State of Haryana, (2014) 8 SCC 897, by notification dated 2.12.1982, 327.52 acres in village Patti Jhambra, Shahabad in District Kurushetra (State of Haryana) was acquired for development and utilization of land for residential, commercial, industrial purposes etc. Notification under Section 6 was issued on 4.7.1984 in relation to 178.62 acres, and ultimate possession of only 90.07 acres was taken. Collector made award at different rates per acre depending upon quality of soil/land. Reference Court awarded uniform compensation at Rs.2,66,400/- per acre. State preferred appeal whereupon High Court reduced compensation to Rs.1,83,080/- per acre. Land Owner preferred intra court appeal and Division Bench determined market value at Rs.2,19,696/- per acre. Land-Owners further went in appeal before Supreme Court, which set aside judgment of High Court and restored award passed by Reference Court determining Rs.2,66,400/- per acre as market value. While restoring award of Reference Court, Supreme Court observed that 40% deduction applied by High Court was not justified. Since land was within developed Municipal limit, therefore, deduction of 25% applied by Reference Court was justified.
61. In Union of India v. Raj Kumar Baghal Singh (dead) through legal representatives and others, (2014) 10 SCC 422, 72.9375 acres of land in village Bir Kheri Gujran, District Patiala in State of Punjab was acquired vide notification dated 14.3.1989. Collector made award of Rs.Two Lacs per acre. Reference Court enhanced amount of compensation to Rs.9,05,000/- per acre. In appeal, a Single Judge of High Court reduced compensation to Rs.105.80 per square yard and it was confirmed by Division Bench also. Union of India preferred appeal, which was dismissed. Court held that there is no rule of thumb for deduction at a particular rate. It varies and depends on individual case. In para 11 Court said "the extent of cut depends on individual fact situation".
62. Deduction for development is different than deduction permissible in respect of largeness of area vis-a-vis exemplar of small piece of land. Many times, Land Owners rely on the rates on which development authorities offer allotment of developed plots carved out by them in residential or industrial area. Such rates apparently cannot form basis for compensation for acquisition of undeveloped lands for reasons more than one. The market value in respect of large tract of undeveloped agricultural land in a rural area has to be determined in the context of a land similarly situated whereas allotment rates of development authorities are with reference to small plots and in a developed lay out falling within urban or semi-urban area. Statutory authorities including development authorities used to offer rates with reference to economic capacity of buyers like economic Weaker Sections, Low Income Group, Middle Income Group, Higher Income Group etc. Therefore, rates determined by such authorities are not uniform. The market value of acquired land cannot depend upon economic status of land loser and conversely on the economic status of the body at whose instance, land is acquired. Further, normally, land acquired is a freehold land whereas allotment rates determined by development authorities etc. constitute initial premium payable on allotment of plots on leasehold basis. However, where an exemplar of small piece of land is relied, in absence of any other relevant material, Court may determine market value in the light of evidence relating to sale price of small developed plots. In such cases, deduction varying from 20% to 75% is liable to apply depending upon nature of development of lay out in which exemplar plot is situated.
63. In Shaji Kuriakose and another Vs. Indian Oil Corporation Ltd. and others, (2001) 7 SCC 650, a large tract of land in village Manakunnam, District Cochin was proposed to be acquired for setting up a bottling plant by Indian Oil Corporation and notification under Section 4 (1) was issued on 23.08.1990. Acquired land included 7.13 acres of land of Claimant/Land Owner-Shaji Kuriakose. Collector vide award dated 05.05.1992 offered compensation at Rs. 1,225/- per acre i.e. Rs. 500 per cent which was enhanced to Rs.7,000/- per Cent by Reference Court. High Court reduced compensation to Rs.4,000/- per Cent for wet land and Rs.6,500/- for dry land. Appeal preferred by Claimants before Supreme Court failed. Court found that land which was sold vide exemplar sale deed was not similarly placed with acquired land inasmuch as there was no access to acquired land, there existed only an internal mud road which belonged to one of the Claimants, whose land was acquired, the land covered by exemplar sale deed was a dry land, whereas acquired land was mostly wet land. After acquisition, acquired land has to be reclaimed and a lot of amount would be spent for filling it. The exemplar sale deed related to a small piece of land while acquired land was quite large. Sale for smaller plot fetches more consideration than larger or bigger piece of land. Considering all these facts, Court found that determination made by High Court was justified and dismissed appeal.
64. In Kasturi and others Vs. State of Haryana, (2003) 1 SCC 354, 84.31 acres of land in State of Haryana was proposed to be acquired for development of residential and commercial area at Sector 13 and 23, Bhiwani, by publishing notification under Section 4 on 04.04.1986. Collector made award dated 10.11.1987 and 31.03.1988 determining compensation at Rs.57,500/- per acre and Rs.55,200/- per acre which comes to around Rs. 11.81 per square yard. Reference Court enhanced compensation to Rs.125/- per square yard. Land Owners as well as State, both preferred appeal in High Court. Landowners sought compensation at Rs.500/- per square yard while State appealed for restoration of Collector's award. High Court reduced compensation to Rs.79.98 per square yard applying 20% deduction towards development charges. It partly allowed appeal of State but dismissed appeals preferred by Claimants/Land-Owners. Division Bench confirmed judgment of Single Judge hence matter was taken to Supreme Court by Claimants/ Land-Owners. It was contended that High Court erred in applying deduction of 20% towards development charges and also by not enhancing compensation to Rs.500/- per square yard as claimed by landowners. Supreme Court found that land acquired comprised a large area and was not developed though has potential for residential and commercial purposes. For its development roads were to be laid, provision for drainage was to be made and certain area was to be earmarked for other civic amenities. 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, being a developed building site. In respect of agricultural land or undeveloped land which has potential value for housing or commercial purposes, normally 33% amount was processed for deduction subject to variations depending upon nature of land, location, extent of expenditure involved for development and area required for roads and other civic amenities to develop land so as to make plots for residential or commercial purposes. Whether land is plain or uneven, soil of land is soft or hard having bearing on foundation for the purpose of making construction; whether land is situated in the midst of a developed area all around or may have a hillock or may be low lying or may be having deep ditches, are all relevant considerations since that would have consequences in the amount to be spent for development. Court relied on various decisions and thereafter upheld deduction of 20% towards development and dismissed appeal of Land Owners.
65. In Lal Chand Vs. Union of India (supra), Court noticed that deduction for development constitutes two components- one is with reference to area required to be utilized for development work and second is the cost of development work. It further held that deduction for development in respect of residential plot may be higher while not so where it is an industrial plot. Similarly, if acquired land is in a semi-developed urban area or in any undeveloped rural area, then deduction for development may be much less and vary from 25 to 40 percent since some basic infrastructure will already be available. The percentage is only indicative and may vary depending upon relevant factors. With reference to exemplars of transfer of land between private parties, Court would also look into intrinsic evidence, i.e., the exemplar sale deed where it recites financial difficulties of vendor and urgent need to find money as a reason for sale or other similar factors, like litigation or existence of some other dispute. These are all factors constituting intrinsic evidence of a distress sale.
66. In Lal Chand Vs. Union of India (supra), Court also observed, if acquisition is in regard to a large area of agricultural land in a village and exemplar sale deed is also in respect of an agricultural land in the same village, i.e. it may be possible to rely upon the sale deed as prima facie evidence of prevailing market value even if such land is at the other end of village, i.e. at a distance of one or two kilometers. But, the same may not be appropriate where acquisition relates to plots in a town or city where every locality or road has a different value. A distance of about a kilometer may not make a difference for the purpose of market value in a rural area but even a distance of 50 meters may make a huge difference in market value in urban properties. Thus, distance between two properties, the nature and situation of property, proximity to the village or a road and several other factors may all be relevant in determining market value.
67. In Valliyammal & others Vs. Special Land Acquisition, 2011 (8) JT 442, Court has looked into various earlier judgments laying down guiding principles for determination of market value of acquired land. Court has observed that comparable sales method of valuation is preferred since it furnishes evidence for determination of market value of acquired land at which a willing purchaser would pay for acquired land if it had been sold in open market at the time of acquisition. However, this method is not always conclusive and there are certain factors, which are required to be fulfilled and on fulfillment of those factors, compensation can be determined. Such factors are (a) sale must be a genuine transaction; (b) sale deed must have been executed at the time, proximate to the date of issue of notification under Section 4; (c) land covered by the sale must be in the vicinity of acquired land; (d) land covered by the sales must be similar to acquired land; and (e) size of plot of the land covered by the sales be comparable to the land acquired. If there is dissimilarity in regard to locality, shape and size or nature of land, court can proportionately reduce compensation depending upon disadvantages attached with the acquired land. Further, for determining market value, potentiality of acquired land should also be taken into consideration. The "potentiality" means, capacity or possibility for changing or developing into state of actuality. It is well settled that market value of property has to be determined having due regard to its existing condition, with all its existing advantages and its potential possibility when let out in its most advantageous manner. Court also said, when undeveloped or underdeveloped land is acquired and the exemplar is in respect to developed land, detection towards deduction can be made. Normally, such deduction is 1/3, but it is not a hard and fast rule.
68. In Bhule Ram v. Union of India and another, JT 2014 (5) SC 110, Court in para 7 has observed that valuation of immovable property is not an exact science, nor it can be determined like algebraic problem, as it bounds in uncertainties and no strait-jacket formula can be laid down for arriving at exact market value of the land. There is always a room for conjecture, and thus court must act reluctantly to venture too far in this direction. The factors such as the nature and position of land to be acquired, adaptability and advantages, the purpose for which the land can be used in the most lucrative way, injurious affect resulting in damages to other properties, its potential value, the locality, situation, size and shape of the land, the rise of depression in the value of land in the locality consequent to acquisition etc., are relevant factors to be considered. It further said that value, which has to be assessed, is the value to the owner, who parts with his property, and not the value to the new owner, who takes it over. Fair and reasonable compensation means the price of a willing buyer, which is to be paid to the willing seller. Though Act does not provide for "just terms" or "just compensation", but 'market value' is to be assessed taking into consideration the use to which it is being put on acquisition and whether the land has unusual or unique features or potentialities. Court then also considered as to what is the concept of "guess work" and observed that it is not unknown to various fields of law as it applies in the cases relating to insurance, taxation, compensation under the Motor Vehicle Act as well as under Labour Laws. Having said so, Court further said: -
"The court has a discretion applying the guess work to the facts of the given case but is is not unfettered and has to be reasonable having connection to the facts on record adduced by the parties by way of evidence. The court further held as under: -
"'Guess' as understood in its common parlance is an estimate without any specific information while "calculations" are always made with reference to specific data. "Guesstimate" is an estimate based on a mixture of guesswork and calculations and it is a process in itself. At the same time "guess" cannot be treated synonymous to "conjecture". "Guess" by itself may be a statement or result based on unknown factors while "conjecture" is made with a very slight amount of knowledge, which is just sufficient to incline the scale of probability. "Guesstimate" is with higher certainty than more "guess" or a "conjecture" per se." (para 8) (emphasis added)
69. In Bhupal Singh and others v. State of Haryana, (2015) 5 SCC 801, while above principles laid down in various cases were reiterated, Court in para 18 of judgment, said: -
"Law on the question as to how the court is required to determine the fair market value of the acquired land is fairly well settled by several decisions of this Court and remains no more res integra. This Court has, inter alia, held that when the acquired land is a large chunk of undeveloped land having potential and was acquired for residential purpose then while determining the fair market value of the lands on the date of acquisition, the appropriate deductions are also required to be made."
(emphasis added)
70. It is also reaffirmed that when an exemplar relates to small piece of developed land and is sought to be relied to determine market value of large tract of undeveloped acquired land, deduction can be applied ranging between 20% to 75%. Court in para 20 of judgment relied upon its decision in Chandrashekhar Vs. L.A. Officer, (2012) 1 SCC 390 stating that deduction has two components, one is "development" and another with respect to the "size of the area". Percentage of deduction was restricted in Subh Ram v. State of Haryana, (2010) 1 SCC 444 stating that deduction of both components should be around 1/3 each in its entirety, which would roughly come to 67% of component of sale consideration of exemplar sale transaction.
71. With respect to escalation of price where relied on exemplar is of much earlier in point of time, Court in K. Devakimma and others v. Tirumala Tirupati Devasthanam and another, 2015 (111) ALR 241 said that recourse can be taken in appropriate cases to the mode of determining market value by providing appropriate escalation over the proved market value of nearby land in previous years where there is no evidence of any contemporaneous sale transaction or acquisition of comparable lands in neighbourhood. The percentage of escalation may vary from case to case so also the extent of years to determine the rates.
72. In Chandrashekhar Versus Land Acquisition Officer (supra), for residential layout issued by Gulbarga Development Authority, acquisition proceedings were initiated by publishing Notification dated 13.5.1982 under Section 4 of Act, 1894, proposing to acquire 144 acres of land in villages Rajapur (71 acres) and Badepur (73 acres). The land of Claimants-appellants measured 8 acres, 4 guntas in village Badepur and in connected appeal it measured 7 acres, 7 guntas. Collector made award determining compensation at Rs.4100/- per acre for land in village Badepur and Rs.13,500/- for land in village Rajapur. Reference Court enhanced compensation to Rs.1,46,000/- per acre in place of Rs.4100/- per acre for land in village Badepur. On appeal, High Court remanded matter, whereafter Reference Court determined compensation at Rs.1,45,000/- per acre vide order dated 21.12.2002. High Court reduced compensation in appeal at Rs. 65,000/-. The view taken by High Court was upheld by Supreme Court by dismissing appeal of Land Owners. The issue raised before Court was the extent of deduction to be applied while determining market. It would be interesting to notice review of various cases by Supreme Court demonstrating that deduction applied has varied in all cases.
(a) In Brig. Sahib Singh Kalha Vs. Amritsar Improvement Trust, (1982) 1 SCC 419, Court said where a large area of undeveloped land is acquired, provision has to be made for providing minimum amenities of town-life. Accordingly, deduction of 20 percent of total acquired land should be made for land over which infrastructure has to be made (space for roads etc.). Besides, cause of raising infrastructure like roads, electricity, water, underground drainage, etc. is also to be considered and for this purposes deduction would range from 20% to 33%. Thus, in all Court upheld deductions between 40% and 53%.
(b) In Administrator General of West Bengal Vs. Collector, Varanasi, (1988) 2 SCC 150, Court upheld deduction of 40%.
(c) In Chimanlal Hargovinddas Vs. Special Land Acquisition Officer, Poona and another (supra), Court upheld deduction between 20% to 50%.
(d) In Land Acquisition Officer Revenue Divisional Officer, Chottor vs. L. Kamalamma (Smt.) Dead by and others, (1998) 2 SCC 385, Court upheld deduction of 40% as development cost.
(e) In Kasturi and others vs. State of Haryana (supra), 1/3rd deduction was upheld on development, clarifying that deduction can be more or less of 1/3rd depending upon facts of the case.
(f) In Land Acquisition Officer vs. Nookala Rajamallu and others, (2003) 12 SCC 334, Court upheld 53% deduction.
(g) In V. Hanumantha Reddy (Dead) Versus Land Acquisition Officer, (2003) 12 SCC 642, Court upheld 37% deduction towards development.
(h) In Viluben Jhalejar Contractor Versus State of Gujarat, (2005) 4 SCC 789, Court observed that deduction of 20 to 50% towards development is permissible.
(i) In Atma Singh Versus State of Haryana and another, (2008)2 SCC 568, 20% deduction towards largeness of area was applied.
(j) In Subh Ram and others Vs. State of Haryana and others, (supra), Court observed that where valuation of a large area of agricultural or undeveloped land has to be determined on the basis of sale price of a small developed plot, standard deductions would be 1/3rd towards infrastructural space and 1/3 towards infrastructural developmental cost, i.e. 2/3rd % i.e. 67%.
(k) In Andhra Pradesh Housing Board Versus K. Manohar Reddy and others, (2010) 12 SCC 707, it was observed that deductions on account of development could vary between 20% to 75%.
(l) In Special Land Acquisition Officer and another Versus M.K. Rafiq Sahib, (2011) 7 SCC 714, Court was upheld 60% deduction.
73. In this background of authorities, Court in Chandrashekhar Versus Land Acquisition Officer (supra), observed that quantum of deduction towards development is on account of two components. In this regard it said in para 19.1 and 19.2 as under :
" 19.1. Firstly, space/area which would have to be left out, for providing indispensable amenities like formation of roads and adjoining pavements, laying of sewers and rain/flood water drains, overhead water tanks and water lines, water and effluent treatment plants, electricity sub-stations, electricity lines and street lights, telecommunication towers etc. Besides the aforesaid, land has also to be kept apart for parks, gardens and playgrounds. Additionally, development includes provision of civic amenities like educational institutions, dispensaries and hospitals, police stations, petrol pumps etc. This "first component", may conveniently be referred to as deductions for keeping aside area/space for providing developmental infrastructure.
19.2 Secondly, deduction has to be made for the expenditure/expense which is likely to be incurred in providing and raising the infrastructure and civic amenities referred to above, including costs for levelling hillocks and filling up low lying lands and ditches, plotting out smaller plots and the like. This "second component" may conveniently be referred to as deductions for developmental expenditure /expense."
(emphasis added)
74. Having said so Court in para 23 said:-
"23. Having given our thoughtful consideration to the analysis of the legal position referred to in the foregoing two paragraphs, we are of the view that there is no discrepancy on the issue, in the recent judgments of this Court. In our view, for the "first component" under the head of "development", deduction of 33-1/3 percent can be made. Likewise, for the "second component" under the head of "development" a further deduction of 33-1/3 percent can additionally be made. The facts and circumstances of each case would determine the actual component of deduction, for each of the two components. Yet under the head of "development", the applied deduction should not exceed 67 percent. That should be treated as the upper benchmark. This would mean, that even if deduction under one or the other of the two components exceeds 33-1/3 percent, the two components under the head of "development" put together, should not exceed the upper benchmark."
(emphasis added)
75. The above principles have further been followed and reiterated in Atma Singh Versus State of Haryana and another (supra), Nirmal Singh Vs. State of Haryana, (2015) 2 SCC 160 and Major General Kapil Mehra and others Vs. Union Of India and another (2015) 2 SCC 262.
76. Decision of this Court in Power Grid Corporation Vs. State of U.P. and Others, (2019) 1 ADJ 753 also reiterates the said principles.
77. In Sabhia Mohammed Yusuf Abdul Hamid Mulla (d) by LRS and others vs. Special Land Acquisition Officer and others (2012) 7 SCC 595 Reference Court, while determining market value observed that though land was agricultural but had non-agricultural potential and determined market value. High Court made a deduction of 15% towards development charges.
78. Referring to an earlier decision in Viluben Jhalejar Contractor vs. State of Gujrat, (2005) 4 SCC 789, Court in Sabhia Mohammed Yusuf Abdul Hamid Mulla (supra) said that development charges may range between 20% to 50% of the total price. Court further observed:
"in fixing market value of the acquired land which is undeveloped and under-developed the courts have generally approved deduction of 1/3rd of the market value towards development cost except when no development is required to be made for implementation of the public purpose for which land is acquired." (emphasis added)
79. Above authorities and several others have been considered in Major General Kapil Mehra Vs. Union of India and another (supra), and Court has observed that while fixing market value of acquired land, Land Acquisition Collector is required to keep in mind the following factors:-
(i) Existing geographical situation of land.
(ii) Existing use of land.
(iii) Already available advantages, like proximity to National or State Highway or road and/ or developed area,
(iv) Market value of other land situated in the same locality/ village/ area or adjacent or very near the acquired land.
80. Court has further said that market value is determined with reference to the market sale of comparable land in the neighbourhood by a willing seller to a willing buyer on or before the date of preliminary notification i.e. under Section 4(1) of 1894 Act, as that would give a fair indication of market value.
81. With respect to factors of comparable sales, Court in Major General Kapil Mehra Vs. Union of India and another (supra) has referred to its earlier decision in Urban Water Supply and Drainage Board and Others Versus K.S. Gangadharappa and another, (2009) 11 SCC 164, and has observed that element of speculation is reduced to minimum if underlying principles of fixation of market value with reference to comparable sales are satisfied, i.e.,(i) when sale is within a reasonable time of the date of notification under Section 4(1); (ii) it should be a bona fide transaction; (iii)) it should be of the land acquired or of the land adjacent to the land acquired; and (iv) It should possess similar advantages.
82. Where there are several exemplars showing different rates, it has been said that averaging is not permissible, if land acquired are of different types and situated in different locations. But where there are several sales of similar land, more or less, at the same time, prices whereof have marginal variation, averaging thereof is permissible. It is further held that for the purpose of fixation of fair and reasonable market value of any type of land, abnormally highvalue or abnormally low value sales should be carefully discarded. If number of sale deeds of the same locality and of same period with short intervals are available, average price of available number of sale deeds shall be considered as a fair and reasonable market price. Ultimately, it is in the interest of justice that land losers are awarded fair compensation. All attempts should be made to award fair compensation to the extent possible on the basis of accessibility to different kinds of roads, locational advantages etc.
83. ''Freehold land' and ''leasehold land', both these terms are conceptually different. If a property, subject to lease and in possession of a lessee, is offered for sale by an owner to a prospective private purchaser, the purchaser being aware that on purchase he will get only title and not possession and that the sale in his favour will be subject to encumbrance namely, the lease, he will offer a price taking note of the encumbrances. Naturally, such a price would be less than the price of a property without any encumbrance. But when a land is acquired free from encumbrances, market value of the same will certainly be higher.
84. In Urban Water Supply and Drainage Board (supra), Court also considered deductions towards competitive bidding and development. In paragraph no. 39, Court said :
"We have referred to various decisions of this Court on deduction towards development to stress upon the point that deduction towards development depends upon the nature and location of the acquired land. The deduction includes components of land required to be set apart under the building rules for roads, sewage, electricity, parks and other common facilities and also deduction towards development charges like laying of roads, construction of sewerage."
85. Thus, having gone through the aforesaid decisions, we find that no absolute principle or Rule of Thumb has been laid down in any of the authorities as to how much deduction should be made. The substance of all the decisions is that deduction should be applied where undeveloped and under-developed land is acquired and it can vary from 10% to 70%, depending upon various factors of each case. Similarly, if area of land exemplar is very small, appropriate deduction can be made.
86. Normally, Courts have held that exemplars should be such which are before the date of notification under Section 4(1) of Act, 1894 but an exemplar sale deed of a subsequent period of date of acquisition notification is not completely ruled out to be relevant document provided circumstances to justify the same are available.
87. In State of U.P. Vs. Major Jitendra Kumar and others, AIR 1982 SC 876, notification under Section 4 was published on 6.1.1948. Court determined rate of compensation relying on a sale deed dated 11.7.1951, i.e., a document executed after almost three and half years after the date of acquisition notification. Court upheld reliance on such document, observing, if there is no material to show that there was any fluctuation in market rate between the date of acquisition and the date of concerned sale deed, such document may be considered as a relevant material in absence of any other apt evidence. This view was followed in a subsequent decision, i.e., Administrator General of West Bengal Vs. Collector, Varanasi, AIR 1998 SC 943, where it is held:
"Such subsequent transactions which are not proximate in point of time to the acquisition can be taken into account for purposes of determining whether as on the date of acquisition there was an upward trend in the prices of land in the area. Further under certain circumstances where it is shown that the market was stable and there were no fluctuations in the prices between the date of the preliminary notification and the date of such subsequent transaction, the transaction could also be relied upon to ascertain the market value."
(emphasis added)
88. In certain cases, where nature, extent, size, surrounding and location of acquired land greatly varies, Courts have applied "belting system" for determination of market rate of acquired land. It is applied in appropriate cases when different parcels of land with different survey numbers belong to different owners and having different locations are acquired. Such chunk cannot be taken as a compact block. In Bijender and others Vs. State of Haryana and others (2018) 11 SCC 180, Court in para 34 of judgment said:
"The acquired land comprises of more than around 300 acres or so and is thus a very large in chunk. The acquired land belonged to several landowners and obviously so being so large in volume. One side of the acquired land is abutting the road. The land has surrounding with some kind of activities in nearby areas and this shows that the acquired land has some potential."
89. In Belting System, acquired land is usually divided in two or three belts depending upon the facts of each case. Appreciating this aspect in para 35 of judgment in Bijender and others Vs. State of Haryana and others (supra), Court said:
"The market value of the front belt abutting the main road is taken to fetch maximum value whereas the second belt fetches two third or so of the rate determined in relation to the first belt and the third belt, if considered proper to carve out, fetches half or so of the maximum. It is again depending upon facts of each case."
90. In para 49 of judgment, Court further said:
"49. It is also held that the value of the smaller plots, which is always on the higher side, is usually not taken into consideration for determining the large block of the land. One of the reasons being that the substantial area of the large block is used for development of sites like laying out the roads, drains sewers, water and electricity lines and several civic amenities and to provide these facilities, lot of time is consumed. The deduction is, therefore, made, which ranges from 20% to 50% or in appropriate cases even more."
91. In Trishala Jain and another Vs. State of Uttranchal and another, (2011) 6 SCC 47, for the purposes of construction of Government Polytechnic Institute at Dehradun, notification under Section 4 was published on 30th January, 1992, proposing to acquire 12.85 acres of land situated in village Sewala Kalan, Pargana Kendriya Doon, District Dehradun. The area of land belonging to Claimants-Land Owner, Trishala Jain and others, was 4.58 acres and 3.031 acres respectively. Collector offered compensation applying "belting system," for first belt at Rs.9,78,223.40 per acre, second belt at Rs. 6,52,482.27 per acre and third belt at Rs. 4,39,362.70 per acre. Reference Court held 'belting system' applied by Collector improper observing that entire land having been acquired for one purpose, there was no justification for application of 'belting system'. Relying on two exemplar sale deeds dated 26.11.1991 and 17.11.1991 it awarded compensation at Rs. 5,12,000/- per bigha after applying 20% deduction to gross market value of Rs.6,40,000/- per bigha. In appeal, High Court upheld view taken by Reference Court that there was no justification for applying "belting system" but raised deduction from 20% to 33.33% and hence determined market value at Rs. 4,26,667/- per bigha. The aforesaid deduction was applied on account of "development charges". Appeal was taken to Supreme Court by Claimants/Land-Owners. Four questions formulated by Supreme Court are as under:
"I. Whether or not the 'belting system' ought to have been applied for determination of fair market value of the acquired land?
II. What should be the just and fair market value of the acquired land on the date of issuance of notification under Section of the Act?
III. Whether in the facts and circumstances of the present case there ought to be any deduction after determining the fair market value of the land?
IV. What compensation and benefits are the claimants entitled to?"
92. Court upheld the view taken by courts below that application of "belting system" was unjustified since land as a whole was similarly placed and surrounded by developed areas and proposed to be used for one purpose, i.e., construction of Government Polytechnic Institute. Court then also held that deduction towards development is justified in certain circumstances but how much deduction is to be applied, will depend upon individual facts of the case. In para 39 of judgment, Court said:
"39. The law with regard to applying the principle of deduction to the determined market value of the acquired land is quite consistent, though, of course, the extent of deduction has varied very widely depending on the facts and circumstances of a given case. In other words, it is not possible to state precisely the exact deduction which could be made uniformly applicable to all the cases. Normally the rule stated by this Court consistently, in its different judgments, is that deduction is to be applied on account of carrying out development activities like providing roads or civic amenities such as electricity, water etc. when the land has been acquired for construction of residential, commercial or institutional projects. It shall also be applied where the sale instances (exemplars) relate to smaller pieces of land and in comparison the acquisition relates to a large tract of land." (emphasis added)
93. Further in paras 41 and 44 of judgment, Court said:
"41. The cases where the acquired land itself is fully developed and has all essential amenities, before acquisition, for the purpose for which it is acquired requiring no additional expenditure for its development, falls under the purview of cases of `no deduction'. Furthermore, where the evidence led by the parties is of such instances where the compensation paid is comparable, i.e. exemplar lands have all the features comparable to the proposed acquired land, including that of size, is another category of cases where principle of `no deduction' may be applied. These may be the cases where least or no deduction could be made. Such cases are exceptional and/or rare as normally the lands which are proposed to be acquired for development purposes would be agricultural lands and/or semi or haphazardly developed lands at the time of issuance of notification under Section 4(1) of the Act, which is the relevant time to be taken into consideration for all purposes and intents for determining the market value of the land in question."
"44. It is thus evident from the above enunciated principle that the acquired land has to be more or less developed land as its developed surrounding areas, with all amenities and facilities and is fit to be used for the purpose for which it is acquired without any further expenditure, before such land could be considered for no deduction. Similarly the sale instances even of smaller plots could be considered for determining the market value of a larger chunk of land with some deduction unless, there was comparability in potential, utilisation, amenities and infrastructure with hardly any distinction. On such principles each case would have to be considered on its own merits." (emphasis added)
94. In Union of India and others Vs. Mangatu Ram (1997) 6 SCC 59, a Three-Judge Bench of Supreme Court considered the question, when 'belting system' should be applied and held that when a large extent of land under acquisition comprises of lands of several persons and some lands are abutting the main road and some lands are in the interior, the same would not have the uniform rate of market value. Reasonable demarcation/classification should be made before determination of the compensation. Upholding the 'belting system' to be applied in that case, Court said that lands situated around 500 yards from the main road should be classified as 'A' class land irrespective of the quality of the land and uniform rate of compensation should be applied to the same and remaining should be placed in category 'B' and applied another but lesser rate. Therein an argument was made that if different rates are applied, it will violate fundamental right of equality enshrined under Article 14. Rejecting it, Court said:
"It is equally settled law that Article 14 has no application vis-a-vis determination of the compensation for the obvious reason that it is hardly possible that all the lands are equal in all respects; they differ from one another and bear different features, e.g., nature, quality and character; therefore, all the lands do not command the same market value when they are sold to a willing purchaser by a willing vendor in the open market."
95. Court further held:
" ... the doctrine of equality in the matter of payment of compensation under Article 14 is inapplicable."
96. In Wazir and others State of Haryana, (2019) 3 SCJ 506 (SC), a very large chunk of land i.e. about 1500 acres spreading in several villages, namely, Kasan, Bas Kusla, Naharpur Kasan, Manesar, Bas Haria and Dhana, Tehsil and District Gurgaon was acquired by publishing Notifications under Section 4(1) of Act, 1894 on 06.03.2002, 07.03.2002 and 26.02.2002. Declarations under Section 6 were published on 15.11.2002, 25.11.2002 and 18.11.2002. Sub-Divisional Officer (Compensation)-cum-Land Acquisition Collector (hereinafter referred to as "LAO") found market value of land different in different villages and made award offering compensation on various rates ranging from Rs. 3,60,000/- per acre to 10 lakhs per acre. The land in village Manesar was offered highest rate of compensation of Rs.10 lakhs per acre while in Villages Kasan and Naharpur Kasan, Rs.7,50,000/- and 7,20,000/- per acre respectively were offered while in Villages Bas Kusla, Bas Haria and Dhana, market value was determined at Rs.3,60,000/- per acre. Dissatisfied with said award of LAO, Land-Owners sought Reference under Section 18 of Act, 1894. When matter was pending, in another matter where Notification under Section 4(1) was published on 15.11.1994 acquiring land in Villages Manesar, Naharpur Kasan, Khoh and Kasan, Supreme Court in Harayana State Industrial Development Corporation Vs. Pran Sukh and Ors., (2010) 11 SCC 175 determined market value at Rs.20 lakhs per acre. Relying thereon, Reference Court vide judgment and award dated 30.11.2010, determined market value at Rs.37,40,230/- per acre by allowing annual increase of 12 per cent per annum. High Court affirmed the aforesaid rate whereafter matter went in appeals to Supreme Court in Harayana State Industrial Development Corporation Vs. Udal and Another, (2013) 14 SCC 506. Supreme Court allowed appeals and remanded matter to High Court observing that flat enhancement of 12 per cent per annum was not justified. High Court in its turn vide judgment dated 06.10.2015 remanded matter to Reference Court for fresh disposal. In appeal, this judgment of High Court was set aside and matter was again remanded to High Court. Again it was decided by High Court by applying cumulative enhancement at the rate of 12 to 15 per cent per annum over base rate of Rs.20 lakhs per acre but thereafter applying an over all rate deduction of 10 to 20 per cent. Market rate determined by High Court in fact came to Rs.41.40 lakhs for land acquired in Villages Naharpur Kasan, Kasan, Bas Haria, Bas Kusla and Dhana. However, in respect of land acquired in Village Manesar, it applied 50 per cent enhancement and determined market value at the rate of Rs.62.10 lakhs per acre. This judgment when came up for consideration before Supreme Court in Wazir and others State of Haryana (supra), it was held that annual appreciation of rates depends on various factors. There is no hard and fast rule as to how much appreciation will apply and there cannot be any uniformity in this regard since it depends upon different factors. Court found that different appreciation was allowed from time to time in different cases as under:-
(i) 10 per cent per annum appreciation was allowed in Ranjit Singh Vs. Union Territory of Chandigarh, (1992) 4 SCC 659; Land Acquisition Officer and Revenue Divisional Officer Vs. Ramanjulu, (2005) 9 SCC 594.
(ii) 15 per cent per annum escalation was accepted in Krishi Utpadan Mandi Samiti Vs. Bipin Kumar, (2004) 2 SCC 283.
97. Considering above authorities, Supreme Court held that increase in land prices depends on four factors: (i) situation of land; (ii) nature of development in surrounding area; (iii) availability of land for development in area; and (iv) demand for land in area. In rural areas, unless there is any prospect of development in the vicinity, increase in prices would be slow, steady and gradual, without any sudden spurts or jumps. Contrary thereto, in urban and semi-urban areas, where development is faster, demand for land is high and construction activities are going on all around, escalation in market price would be at a much higher rate as comparing to rural areas. In some pockets in big cities, due to rapid development and high demand for land, escalations in prices had touched even 30 per cent to 50 per cent or more, per year, during nineties. Similarly, in remote rural areas, where there was no chance of any development and hardly any buyers, prices stagnated for years and rose marginally at a nominal rate of 1 or 2 per cent per annum. Thus there is a significant difference in increase of market value of land in urban/semi-urban areas vis-a-vis rural areas. Court said, if increase in market value in urban/semi-urban areas is about 10 to 15 per cent per annum, corresponding increases in rural areas would, at the best, be only around half of it, i.e. 5 to 7 per cent. If, there is any special reason for applying higher rate of increase that may be considered in the light of special facts and evidence brought before Court in this regard. Consequently, Supreme Court held that 7.5 per cent per annum appreciation would be sufficient and reasonable to determine market value of acquired land. Then, Court also considered that acquired land, though relates to common acquisition proceedings, but situate in different villages. It was also evident that valuation was different in different villages and it gives rise to another question "whether two sets of villages ought to be given different treatment or be clubbed and put at the same level for the purpose of payment of compensation for land acquired under Act, 1894". After considering sale exemplars and other evidence, Court held that market value of land acquired in Villages Bas Kusla, Bas Haria and Dhana, should be same i.e. Rs.28.77 lakhs per acre, for Villages Naharpur Kasan and Kasan, market value was determined at Rs.37.54 lakhs per acre and for Village Manesar, it was determined at Rs.56.31 lakhs per acre.
98. The market value determined by Reference Court in the case in hand, thus has to be examined in the light of aforesaid facts and exposition of law.
99. Now in the light of above exposition of law we proceed to examine question as to whether market value determined by Reference Court is just adequate and fair market value or excessive.
100. Apparently, area of land acquired vide notification dated 20.12.1988 issued under section 4 and 18.1.1989 issued under section 6 of Act 1894, is 61-801 acre of land (98-17-13 Bigha) i.e. 2,50,101.472 sq-metres. Entire area of land sought to be acquired, belong to more than 150 Tenure Holders/Land owners, having different plot numbers and areas and some of them are as under:
Serial No. Plot Number Area(in Sq-meter) Name of Owner/Tenure Holder 1 352 Raghuraj Singh 2 352 4679.17 Smt. Raghuveer Kaur and Sri Shivraj Singh 3 372 11103.52 Smt. Tahira Khatoor 4 382 7113.60 Smt. Maya Devi 5 371 6177.74 Chandan Singh 6 376 Raghuraj Singh 7 367, 368, 369 Ajay Kumar 8 370 10913.85 Arvind Singh 9 383 8473.10 Anand Swarup 10 374 5690.89 Virendra Chandra, Gopal Chandra, Arvind Kumar, Ajay Kumar 11 384 Ram Kishan Gupta And Smt. Asha Gupta 12 382 Smt. Kamla Devi 13 358 , 384 5754.10 (358) and 8599.56 (384) Salil Chandra, Praveen Chandra, Sarad Chandra 14 384 142287.97 Jaipal Chand 15 374 Gopal Chandra 16 210 12023.42 Mohd. Yusuf Ali 17 385 25362.38 Smt. Amir Kunwar 18 375 505.58 Smt. Amir Kunwar 19 363 13348.75 Smt. Amir Kunwar
101. Besides above, there is a Plot No. 386 in which there are 104 owners and area of land owned by them ranges from 550 to 2000 sq-yard. 15 owners owned 101 to 200 sq-yard; 15 from 201 to 300 sq-yard; 13 from 301 to 400 sq-yard and 11 from 401 to 500 sq-yard and so on. The fact is only one tenure holder has 2,000 sq-yard and rest have below 700 sq-yard.
102. From award dated 4.4.1991 at Paper No.144 (C-2), it is also evident that entire acquired land was not agricultural but some of it was declared 'Abadi' under section 143 of U.P. Zamindari Abolition and Land Reforms Act, 1950 (hereinafter referred to as "Act 1950") or some was within Municipal Limit of Nagar Palika.
103. Plot No. 372, area 4-7-16 owned by Smt. Tahira Khatoon to the extent of 50% was within Municipal Limit. Similarly Plot No. 383 area 3-7-0, owned by Anand Swaroop was within Municipal Limit of Bulandshahr. Plot No. 374, area 2-5-0, owned by Virendra Chand and others was declared as Abadi under Section 143 of Act 1951. Plot No. 384, area 4-2-0 was declared Abadi under section 143 by the Competent Authority by order dated 20.12.1988. Plot No. 374, area 3 Bigha owned by Gopal Chandra was also declared Abadi under section 143 of Act 1951.
104. It is also evident from the aforesaid award that substantial land is within the municipal limit of Bulandshahr. With regard to development in the area and location of the land owned by claimant-respondent, D.W.1 Hari Singh has admitted that part of land is appurtenant to Delhi-Kanpur National Highway; Police Chauki is established in front of the said land and on another land adjacent, there is already construction where a motel is running. There is road crossing about 500 meters from acquired land where substation/city shops are existing. On the other side of acquired land, there is PWD Guest House at a distance of about 500 meters and after said guest house, there is a market and Nursing Home.
105. Grievance of appellant is that he had placed reliance on 19 sale-deeds before Reference Court but the same have been rejected and much higher market rate has been determined. These sale-deeds are paper No.77-C (1)/(2) to 142 (C-2) and details of these exemplars are given in the form of chart as hereunder:
Sr. No. Date of sale-deed Vendor Vendee Plot No. Area (in sq-meter) Rate (in sq-metr) Paper No.
1. 16.4.2003 BKDA Smt. Amir Kuwar Devi 385 2509.90 209.02/-77 C 1/2
2. 13.4.1984 Chandrapal Datt Sharma M/s Sudhir Kumar Rana
---
----
-----
124 C2
3. 13.4.1987 Chandrapal Dat Sharma Aruna Devi 386 167.22 137.54/-
125 C2
4. 13.4.1987 Chandrapal Datt Sharma Dinesh Kumar Sharma 383 167.22 137.54/-
126 C2
5. 13.4.1987 Chandrapal Datt Sharma Dinesh Kumar Sharma 383 178.3 84.12/-
127 C2
6. 13.4.1987 Chandrapal Datt Sharma Dinesh Kumar Sharma 386 178.3 84.12/-
128 C2
7. 13.4.1987 Chandrapal Datt Sharma Parvez Alam 386 334.45 83.71/-
129 C2
8. 13.4.1987 Chandrapal Datt Sharma Smt. Laxmi Palival 386 178.3 131.27/-
130 C2
9. 11.5.1987 Dinesh Kumar Sharma Smt. Raisa Khanam 386 171.40 81.68/-
132 C2
10. 11.5.1987 Dinesh Kumar Sharma Smt. Lila Krishna 311 167.34 83.66/-
131 C2
11. 11.5.1987 Dinesh Kumar Smt. Bina 386 356.19 84.22/-
133 C2
12. 11.5.1987 Dinesh Kumar Sharma Harendra Pal Gupta 386 83.61 83.72/-
134 C2
13. 15.7.1987 Anil Kumar and Akhilesh Kumar Shanti Devi 386 236.62 84.52/-
135 C2
14. 18.5.1987 Anil Kumar Tulsiram 386 211.54 70.90/-
136 C2
15. 13.4.1987 Chandrapal Datt Sharma Kamal Singh 386 125.41 83.72/-
137 C2
16. 13.4.1987 Chandrapal Datt Sharma Smt. Mamta Paliwali 386 376.25 84.38/-
138 C2
17. 15.6.1987 Dinesh Kumar Sharma Om Prakash Jindal 386 254.18 82.61/-
139 C2
18. 11.5.1987 Dinesh Kumar Sharma Maheshwari Devi 386 91.97 76.11/-
140 C2
19. 11.5.1987 Chandrapal Datt Sharms Dr. Prabhat Kumar 386 173.07 129.42/-
141 C2
20. 13.4.1987 Dinesh Kumar Sharma Salimuddin 386 267.56 83.71/-
142 C2
106. The aforesaid sale exemplars are all of the period from 13.4.1987 to 15.7.1987. After plotting of Plots No. 386, 383 and 311, land was sold by respective owner to various persons. From description of boundaries given, it is evident that entire land shown in Plots was surrounded by plots of other persons and distance of plot sold from the Government Road was more than 100 meters. Thus at the time of sale of above plots, they had no excess directly since all the plots were surrounded by plots of private parties and distance of plots was more than 100 meters from the Government Road. Most land has been sold to Power of Attorney Holders and found part of share of owner. All these sale-deeds were executed about more than 1 and ½ years from the date of acquisition notification under section 4 of Act 1894, issued for acquisition of land which is subject matter of dispute in present appeals. In fact, as admitted by appellants even the proposal for acquisition was initiated on 10.6.1988, as is evident from Paper No. 143 (c) (2), which is part of paper book.
107. Moreover, sale deed exemplars relied by claimant respondent i.e. dated 6.9.1986, 29.12.1986 and 10.4.1988 have also been rejected by Reference Court, observing that they relate to land situate much far from acquired land and therefore, not relevant to determine market value in present case. In the sale-deed, [Paper Nos. 161 (c) and 163 (c), the land was situate at G.T. Road Bulandshahr and in third sale- deed i.e. Paper No. 162 (c)] land situated in Civil Lines, Bulandshahr, which is much far of old city. The claimant respondent also placed reliance on sale-deed Paper Nos. 32 (c) to 31 (c) which relate to the period subsequent to date of notification under section 4 (1) of Act 1894 and same has also been rejected by Reference Court.
108. Thereafter, Court below refers to market value already determined in respect of acquisition, subject matter of adjudication before Court earlier. Paper No. 30 (c)/1 is copy of judgement and award dated 26.11.1991, passed by Sri Vijay Singh, IV Additional District Judge, District, Bulandshahr deciding 38 LARs, collectively i.e. LAR Nos. 563 to 589 of 1991; 612 to 622 of 1991 which relate to land owners whose land fell in the category of first and second belting for which market rate was determined by SLAO vide award dated 4.4.1991, as Rs. 75 per sq-yard and Rs. 50 per sq-yard. The Reference Court therein determined market value at Rs. 400/- per sq-yard. Another award on record is Paper No. 31 (c)/1 dated 27.10.1995, passed by Sri V.K. Jain, District Judge, Bulandshahr in L.AR. Nos. 266 and 267 of 1992 but it was in respect of different acquisition proceedings, whereby land of Village Chandpur, Pargana Baran, District Bulandshahr was acquired for construction of Delhi Kanpur Road by U.P. Public Works Department. Notification therein under Section 4, was published on 11.3.1989 and declaration was made on 3.10.1989, possession was taken on 6.9.1990 and SLAO gave an award on 13.12.1991. Reference Court determined market value in that case at Rs. 390/- per sq-yard.
109. Reference Court instead of relying upon aforesaid awards, has placed reliance on the awards rendered in LARs No. 168 of 1992, 169 of 1992 and 195 of 1992 and 67 of 1992, wherein, Reference Court had determined two rates i.e. Rs. 400/- per sq-yard and 350/- per sq-yard. In LAR No. 195 of 1992, land owner whose land was acquired had purchased about 68 sq-yard of land for residential purposes and therefore, compensation for him was determined at Rs. 400/- per sq-yard while in respect of other land owners, it was determined at Rs. 350/- per sq-yard. Award in aforesaid LARs was challenged by BKDA in First Appeals No. 102 of 2000 and 103 of 2000, which were dismissed on 7.4.2010. Counsel for BKDA also admitted before Reference Court during the course of argument that land owners were already paid compensation at the rate of Rs. 300/- per sq-yard. This part of statement mentioned in award is reproduced as under:
" बहस के दौरान प्राधिकरण के विद्वान अधिवक्ता ने यह स्वीकार किया है कि अंकन तीन सौ रुपए प्रति वर्ग गज की दर से भुगतान भी काश्तवारों को किया गया है।"
"Learned counsel for the Authority, during the arguments, admitted that even payment has been made to the Kashkaars (cultivators) at the rate of three hundred rupees per square yard."
(English translation by Court)
110. Keeping the aforesaid awards as a guiding factor, Reference Court in the present case, found that market value determined was in respect of land which was less than 5 Bigha pukhta and per Bigha it comes to Rs. 50,000/- . Therefore, after deducting Rs. 1 lakh for every additional 5 Bigha, which comes to Rs. 2 Lakhs in the case in hand, market value was determined as Rs. 8,50,000 per Pakka Bigha (Rs. 281/- per sq-yard) and on that basis award has been given. Reference Court has followed earlier award and also statement of counsel for BKDA that compensation at the rate of Rs. 300/- per sq-yard has already been paid for the land, deeper from main road and belting system was also applied, inasmuch as for the land nearer to G.T. Road, rates of Rs. 75/- per sq-yard and for interior one Rs. 50- per sq-yard. For other land treating it as agricultural, different rates have been applied. Determination of market value and deduction as to the size of land has to be applied and has been applied as per the area of land of individual land owner and not entire chunk which was acquired and belong to large number of land owners.
111. We, therefore answer first question by holding that Reference Court has rightly determined market value by considering area of individual land owners, their location and other relevant factors and determination of market value at Rs. 8,50,000 per Bigha (Rs. 281/- sq-yard) is absolutely justified.
112. Question no.2 is answered by holding that determination of market value has to be considered taking into account area of concerned land owner and not the entire area of acquisition by State, otherwise, the consent of notional sale by individual vendor to prospective vendee will become illusory and meaningless.
113. In respect of question no.3 we find that belting system has already been applied by Reference Court in respect of distance of land from G.T.Road or National Highway, also keeping in view size and nature of land. Therefore, we do not find any infirmity in the manner rates have been determined. Therefore, principle of law about application of belting system wherever attracted cannot be disputed. Further in the present case, same has been applied and warrants no interference.
114. Question No.4 is answered by holding that Reference Court has rightly followed earlier awards in other LARs particularly when there was admission on the part of appellant's counsel that compensation was paid at the rate of Rs. 300/- per sq-yard to various land owners.
115. Question no.5 is answered by holding that Reference Court has rightly rejected various sale-deeds relied by appellants in the case in hand.
116. At this stage, we may also refer the alleged compromise Paper No. 76 (c) dated 16.4.2003 which is not a compromise for payment of compensation of acquired land. In fact it is a lease deed executed by BKDA in favour of Smt. Amir Kunwar Devi staing that her land in village Akbarpur i.e. Gata No. 363 area 5-0-11; 385 area 10-0-11 total 15.52 Bigha was acquired. The acquisition notification under section 4 of Act 1894 was published on 20.4.1988 under section 6 of Act 1894 was published on 18.8.1989 and compensation at the rate of Rs. 49.35 per sq-yard pursuant to the award of SLAO was deposited in the office of SLAO. Due to interim order passed by Court on 4.10.2001, in Writ Petition No. 32851 of 2001, BKDA was not able to proceed with the development work on the acquired land and therefore, from Gata No. 385 it agreed to lease out 3001.84 sq-yard land i.e. 2509.90 sq-meter. Therefore, on payment of Rs. 1,48,140 as compensation deposited by BKDA in SLAO's office, acquisition cost of Rs. 14814/- and further payment of Rs. 115/- per sq-meter towards development charges and further payment of free hold charges, land was allotted on lease to Smt. Amir Kunwar. Thus, it is not an agreement for the purpose of payment of compensation but a compromise executed by BKDA with Amir Kunwar in different circumstances since it was not able to proceed with development activities of acquired land. The aforesaid document therefore, is wholly irrelevant for the purpose of determining market value of acquired land in the case in hand and that has rightly been rejected by Reference Court.
117. In view of above discussions, we do not find any manifest error in both the judgements as well as awards of Reference Court. Since the points for determinations have rightly been answered against appellants, we do not find any merit in these appeals.
118. Both are accordingly dismissed with cost.
Order Date :- 1.7.2019 Arshad Court No. - 34 Civil Misc. Additional Application No. Nil of 2019 In Case :- FIRST APPEAL No. - 264 of 2012 Appellant :- Bulandshahr Khurja Development Authority through Secretary Respondent :- Smt. Amir Kuwar and others Counsel for Appellant :- B. Dayal Counsel for Respondent :- D.K. Mishra,B.B. Paul,B.K. Solanki Hon'ble Sudhir Agarwal,J.
Hon'ble Rajeev Misra,J.
1. This is an application under Order 41 Rule 27 of Civil Procedure Code (hereinafter referred to as 'C.P.C.') for taking on record, some additional evidence. According to learned counsel for appellants certain additional evidence by means of the present application is sought to be brought on record as the same has been made available to him after the Award which is under challenge. Accordingly the same is being brought on record of the present appeal.
2. Having gone through the application, we find that firstly no reason has been given in the entire application, justifying admission of additional evidence at the stage of appeal. The conditions precedent for allowing the application for accepting additional evidence are enumerated under Order 41 Rule 27 C.P.C. which reads as under:
Rule 27. Production of additional evidence in Appellate Court (1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the Appellate Court. But if-
(a) The Court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted, or (aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed, or]
(b) the Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause, the Appellate Court may allow such evidence or document to be produced or witness to be examined.
(2) Whenever additional evidence is allowed to be produced by an Appellate Court, the Court shall record the reason for its admission."
3. However of the reasons assigned in application for taking on record additional evidence are in conformity with provisions of Order 41 Rule 27 C.P.C. Further, the documents which are requested to be taken as additional evidence includes photocopy of judgement of Supreme Court, list of appeals prepared by the learned counsel, photocopy of Award dated 31.5.2017 and certified copy of two Awards given by the Court below in Reference No. 614 of 1991 and 613 of 1991 itself. Except for certified copy of Awards as detailed above, none other documents are admissible in evidence. Therefore, these documents cannot be accepted as additional evidence. Two Awards as detailed above, are accepted on record of present first appeals by way of additional evidence and same shall be considered while deciding the appeal.
Order Date :- 1.7.2019 Arshad