Indian Kanoon - Search engine for Indian Law

"...when comparable exemplars are brought on record, the one carrying the highest market value amongst them may be followed."

(emphasis added) Deductions:

42. 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.

43. 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.

55. 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.

(emphasis added)

66. 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.

67. Decision of this Court in Power Grid Corporation Vs. State of U.P. and Others, (2019) 1 ADJ 753 also reiterates the said principles.

68. 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.

75. 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."