Asha Ram & Another vs U.P.A.E.P. & Others
2015 Latest Caselaw 5487 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Court No. - 34
 

 
Case :- FIRST APPEAL No. - 552 of 2001
 

 
Appellant :- Asha Ram & Another
 
Respondent :- U.P.A.E.P. & Others
 
Counsel for Appellant :- Surendra Tiwari
 
Counsel for Respondent :- Anand Prakash Srivastava
 

 
Hon'ble Sudhir Agarwal,J.

Hon'ble Rakesh Srivastava,J.

1. Heard Shri Pramod Jain, learned Advocate assisted by Shri Surendra Tiwari, learned counsel for appellants and Shri Anand Prakash Srivastava, learned counsel for respondent no.1.

2. This is claimant's appeal under Section 54 of Land Acquisition Act, 1894 (hereinafter referred to as 'Act, 1894') arising from award/judgment dated 23.5.2000 passed by Shri O.P. Goel, VIIIth Additional District Judge, Ghaziabad adjudicating four Land Acquisition References (hereinafter referred to as 'LAR') including LAR No.205 of 1995 (Asha Ram and others) determining market value of acquired land under the provisions of Act, 1894 at the rate of Rs.120/- per square yard for the purposes of payment of compensation to land owners. Besides it has also directed that claimant shall be entitled for 30% solatium, interest at the rate of 12% per anum for the period 26.6.1987 to 27.2.1989 i.e. from the date of acquisition notification under Section 4 (1) of Act, 1894 till the date of award and thereafter 9% for one year and 15% for subsequent period till actual payment is made.

3. Claimant - appellants are aggrieved by the aforesaid determination of market value by Reference Court, and according to them, compensation ought to have been paid at the rate of Rs.200/- per square yard and court below has awarded a much lesser rate, which is highly inadequate, unjust and unreasonable.

4. It appears, that the appeal was presented before Registrar General on 24.04.2003. He admitted appeal, though could have been heard and admitted only by Court after hearing under Order 41 Rule 11 C.P.C. read with Chapter XI Rule 9 of High Court Rules, 1952 (hereinafter referred to as 'Rules, 1952'). The parties have also filed paper book. We therefore, proceed to hear appeal under Order 41 Rule 11 read with Chapter XI Rule 9 of Rules, 1952 to decide it finally.

5. Only point for determination for deciding this appeal is "whether claimants-appellants are entitled for higher determination of market value than Rs. 120/- per square yard or the rate determined by court below is just, valid and needs no interference."

6. Uttar Pradesh Avas Evam Vikas Parishad, Lucknow (hereinafter referred to as 'UPAEVP') is a body constituted under U.P. Avas Evam Vikas Parishad Adhiniyam, 1965 (hereinafter referred to as 'U.P. Act, 1965'). It proposed to acquire certain land in villages Arthla, Jhandapur, Prahladgarhi, Mohiuddinpur Kanavani, Shahibabad and Makanpur for developing residential scheme. At the instance of UPAEVP, State of U.P. initiated acquisition proceedings under Act, 1894 read with U.P. Act, 1965. A notification under Section 4 (1) of Act, 1894 proposing to acquire 1157.895 acres of land in the aforesaid villages was published on 26.06.1982. Notification under Section 6 (1) of Act, 1894 was published on 28.02.1987. Special Land Acquisition Officer (hereinafter referred to as 'SLAO') after considering objections filed by Tenure-holders under Section 9 of Act, 1894 made Award No. 3 of 1987 dated 27.02.1989. It determined marked value at Rs. 50/- per square yard in respect to all the villages though observed that circle rates were Rs. 50/- per square yard in villages Prahladgarhi and Makanpur, Rs. 100/- per square yard in village Arthla, Rs. 150/- per square yard in villages Jhandapur and Shahibabad; and Rs. 20/- per square yard in village Mohiuddinpur Kanavani. The area of land proposed to be acquired in the aforesaid six villages is as under:-

Village Area (in acres)

Arthla

358-93

Jhandapur

36-947

Prahladgarhi

437-379

Makanpur

75-6156

Mohiuddinpur Kanavani

141-97

Shahibabad

107-05

7. Aggrieved by aforesaid determination made by SLAO, land owners/claimants made applications for reference under Section 18 of Act, 1894 to District Judge for determination of market value under Section 23 of Act, 1894. Asha Ram claimant-appellant got four such references made i.e. LAR No.56 of 1995, 205 of 2005, 209 of 1995 and 236 of 1992. All these references were taken together and have been adjudicated by court below vide impugned award/judgment dated 23.5.2000 determining market value of acquired land of claimants-appellants at Rs.120/- per square yard. Appellants Asha Ram and another assailed award/judgment dated 23.5.2000 LAR No.56 of 1995 in First Appeal No.827 of 2000, which has been dismissed by this Court vide judgment dated 28.10.2015.

8. Disputed land, in this appeal, is in village Arthala. Further details of claimant-appellants' acquired land in dispute is as under: -

Khata Number

Khasra Number

Total Area in Bigha

547 M

1-0-0 (3025.00 square yard)

2-9-0 (7411.00 square yard)

2-0-0 (6050.00 square yard)

547 M

0-12-0 (1815.00 square yard)

1-13-0 (4991.25 square yard)

7-14-00 (23,292.50 square yard)

9. Counsel for appellants, at the outset, admitted that against this very award dated 23.5.2000 arising from LAR No.56 of 1995 First Appeal No.827 of 2000 (Asha Ram and another v. U.P. Awas Evam Vikash Parishad and another) has been decided by this Court vide judgment dated 28.10.2015 and issues raised in this appeal are squarely by the aforesaid judgment. However, Shri Pramod Jain, learned counsel for appellants submitted that he may be allowed to address this Court on the question of deduction so as to urge that land was in a developed area and, therefore, without applying any deduction, market value ought to have been determined on the basis of exemplars relied by appellants. Though it is not proper when appeal has arisen from same award where against judgment has already been rendered by this Court in another appeal and parties are also same, but in interest of justice, we have allowed Shri Jain to advance his submissions so that there may not be a case of denial of justice to claimant-appellants, who have already lost their land pursuant to acquisition proceedings and may have some grievance that there were some other aspects, which may have given some advantage to them, went unnoticed.

10. Shri Jain submitted that disputed acquired land is in the middle of two National Highways i.e. Delhi Nitipas and National Highway - 24. It is near Modern Residential Colony of Ghaziabad Development Authority where rate of land was Rs.800/- per square yard and above. Circle rate determined by Collector for the purposes of stamp duty in village Arthala was Rs.1000/- per square yard. Court below has simply relied upon awards in other matters instead of considering existing development in the area, its effect on appreciation of value of land and also the fact that deduction of more than 25% could not have been applied at all. In support of aforesaid submissions, reliance is placed on decisions in Thakarsibhai Devjibhai and others v. Executive Engineer, Gujarat and another, JT (2001) 3 SC 90 and Dhiraj Singh (DEAD) Through Legal Representatives and others v. State of Haryana and others, 2014 (14) SCC 127. He further contended, when land acquired consists of different plots having different advantages and disadvantages etc., Court must apply belting system. Any determination of uniform rate to all plots, irrespective of above considerations, is illegal, unjust and impermissible in law. Reliance is placed on Udho Dass v. State of Haryana, 2010 (12) SCC 51; Anjani Molu Dessai v. State of Goa and another, (2010) 13 SCC 710; Nelson Fernandes and others v. Special Land Acquisition Officer, South Goa and others, AIR 2007 SC 1414; Bhagwathula Samanna v. Special Tehsildar and Land Acquisition Officer, (1991) 4 SCC 506 and certain other judgments, which we shall discuss hereinafter.

11. Though we find that whatever has been argued is substantially covered by discussion of various authorities in judgment dated 28.10.2015 in First Apeal No.827 of 2000, but for the ends of justice, we again proceed to discuss the authorities, which have been cited by Shri Jain in support of his submissions to find out whether there is anything or some thing, which may turn the scale of justice in a manner different than what has been adjudicated.

12. We may first notice hereat authorities discussed by this Court in its judgment dated 28.10.2015 in First Appeal No.827 of 2000 as contained in paragraphs 14 to 19 and 21 to 31: -

"14. In Jawajee Nagnatham Vs. Revenue Divisional Officer, (1994) 4 SCC 595, this question came up for consideration in the matter arisen from State of Andhra Pradesh. Land owners 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, Apex 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 to the Government to determine market value of the land prevailing in a particular area, i.e., village, block, district or region. It also did not provide, as an statutory obligation, to 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.

15. Another matter from State of U.P. came up for consideration involving the same issue in U.P. Jal Nigam Vs. M/s Kalra Properties (P) Ltd., (1996) 3 SCC 124. The land owners' demand for compensation in regard to land acquired under Act, 1894 on the basis of market value assessed as per circle rate determined by Collector was accepted by High Court but in appeal Judgment was reversed by Supreme Court following its earlier decision in Jawajee Nagnatham (supra). The 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.

16. The issue has again been considered recently 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 the market value were examined. These decisions are Ramesh Chand Bansal Vs. District Magistrate/Collector, (1999) 5 SCC 62 and R Sai Ram Bharathi Vs. J Jayalalitha, (2004) 2 SCC 9. The Court resolved controversy in Lal Chand Vs. Union of India holding, if in a particular case, guideline market values are determined by an Expert Committees constituted under State Stamp Law for following a detailed procedure laid down under the relevant rules and are published in State Gazette, the same may be considered as a relevant material to determine market value. The Court said when guideline market values, 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 the Court further stated as under:-

"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 finalised after inviting objections and published in the gazette. Be that as it may."

17. Following aforesaid decisions and applying the same to the facts of present case, we find that it is no body's case that circle rates fixed by Collector, Ghaziabad do satisfy the requirement as observed in Lal Chand Vs. Union of India so as to form relevant material to be considered for determining market value under Section 23 of Act, 1894. It is, in these circumstances, we have no hesitation in holding that in respect of determination of market value of land acquired in these appeals, circle rates fixed by Collector would not be relevant material to be looked into for determining market value.

18. So far as material placed before SLAO and his award is concerned, we find that the same was not material to be looked into by Reference Court since proceedings before Reference Court are independent and separate. An award by SLAO is like an offer and not to be treated as a judgment of Trial Court. It is well settled, when the land holders are not agreeable to accept the offer made by Land Acquisition Officer, they have a right to approach Collector under section 18 of the Act, 1894, by a written application, for referring the matter to court, for determination of the amount of compensation or if there is any dispute regarding measurement of land for that also. In the present case the references in question were made at the instance of claimants for determining the amount of compensation.

19. In Chimanlal Hargovinddas vs. Special Land Acquisition Officer, (1988) 3 S.C.C 751, the Court has said that a reference is like a suit which is to be treated as an original proceeding. The claimants is in the position of a plaintiff who has to show that the price offered for his land in the Award is inadequate. However, for the said purpose the Court would not consider the material, relied upon by Land Acquisition Officer in Award, unless the same material is produced and proved before the Court. The Reference Court does not sit in appeal over the Award of Land Acquisition Officer. The material used by Land Acquisition Officer is not open to be used by the Court suo motu unless such material is produced by the parties and proved independently before the 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 of Act, 1894. The basic principle which has to be followed by Reference Court for determining market value of land, as if, the valuer i.e. the Court is a hypothetical purchaser, willing to purchase land from the open market and is prepared to pay a reasonable price, as on the crucial day, i.e., date of publication of notification under section 4 of the Act, 1894. The willingness of vendor to sale land on reasonable price shall be presumed. The Court, therefore, would co-relate market value reflated in the most comparable instance which provides the index of market value. Only genuine instances would be taken into account. Sometimes even post-notification instances may be taken into account if they are very proximate, genuine and acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects. Proximity from time angle and from situation angle would be relevant considerations to find out most comparable instances out of the genuine instances. From identified instances which would provide index of market value, price reflected therein may be taken as norm and thereafter to arrive at the true market value of land under acquisition, suitable adjustment by plus and minus factors has to be made. In other words a balance sheet of plus and minus factors may be drawn and the relevant factors may be valuated in terms of price variation as a prudent purchaser would do. The market value of land under acquisition has to be deduced by loading the price reflected in the instances taken for plus factors and unloading for minus factors.

21. The size of the land, therefore, 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. The Court said that in such matters, the factors can be discounted by making deduction by way of an allowance at an appropriate rate ranging between 20% to 50%, to account for land, required to be set apart for carving out road etc. and for plotting out small plots.

22. 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.

23. In V.M. Salgoacar & brother Ltd. vs. Union of India (1995) 2 S.C.C 302 the land acquired by notification dated 06.07.1970 in village Chicalim near Goa Airport belonged to a single owner. The 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 the 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".

24. 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 the 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".

25. We may also notice at this stage that 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 relied on the rates on which development authorities used to offer allotment of developed plots cropped 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. The statutory authorities including development authorities used to offer rates with reference to economic capacity of the buyer 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 the 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.

26. 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.

27. In Lal Chand Vs. Union of India and another, (2009) 15 SCC 769, Court noticed that this 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 vary depending upon relevant factors. With reference to exemplars of transfer of land between private parties, Court would also look into the intrinsic evidence, i.e., the exemplar sale deed where the sale deed 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 the factors constituting intrinsic evidence of a distress sale.

28. In Lal Chand Vs. Union of India (supra), the 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, 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, at a distance of one or two kilometers. But, the same may not be the position 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.

29. Normally, the 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.

30. 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. The Court determined rate of compensation relying on sale deed dated 11.7.1959, i.e., a document executed after almost three and half years after the date of acquisition notification. Supreme Court upheld reliance of such document observing that 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 the Court said as under:-

"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."

31. We need not go into a catena of other decisions rendered in the last several decades since we have benefit of a recent Division Bench decision of this Court in First Appeal No. 454/2003 and other connected matters, Meerut Development Authority through Its Secretary vs. Basheshwar Dayal (since deceased) Through His L.Rs and another decided on 01.08.2013 wherein the legal principles settled by Apex Court in various judgments, relevant for determination of market value have been crystallized as under:

(i) Function of the Court in awarding compensation under the Act is to ascertain the market value of the land on the date of the notification under Section 4(1),

(ii) The method for determination of market value may be :

(a) Opinion of experts,

(b) the price paid within a reasonable time in bona fide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages,

(c) a number of years purchase of the actual or immediately prospective profits of the land acquired.

(Ref. (1994) 4 SCC 595 para 5 Jawajee Nagnatham Vs. Revenue Divisional Officer & others)

(iii) While fixing the market value of the acquired land, comparable sales method of valuation is preferred than other methods of valuation of land such as capitalisation of net income method or expert opinion method. Comparable sales method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issue of notification under Section 4 of the Act. However, comparable sales method of valuation of land for fixing the market value of the acquired land is not always conclusive but subject to the following factors:-

(a) Sale must be a genuine transaction,

(b) the sale deed must have been executed at the time proximate to the date of issue of notification under Section 4 of the Act,

(c) the land covered by the sale must be in the vicinity of the acquired land,

(d) the land covered by the sales must be similar to the acquired land

(e) the size of plot of the land covered by the sales be comparable to the land acquired.

(f) if there is dissimilarity in regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is open to the Court to proportionately reduce the compensation for acquired land.

(iv) The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-a-vis the land under acquisition which are as under : -

Positive factors

Negative factors

(i) Smallness of size

(i) Largeness of area

(ii) Proximity to a road.

(ii) Situation in the interior at a distance from the road.

(iii) Frontage on a road.

(iii) Narrow strip of land with very small frontage compared to depth.

(iv) Nearness to developed area.

(iv) Lower level requiring the depressed portion to be filled up.

(v) Regular shape.

(v) Lower level requiring the depressed portion to be filled up.

(vi) Level vis-a-vis land under acquisition.

(vi) Some special disadvantageous factor which would deter a purchaser.

(vii) Special value for an owner of an adjoining property to whom it may have some very special advantage.

(v) For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality.

(vi) Deduction not to be done when land holders have been deprived of their holding 15 to 20 years back and have not been paid any amount.

(vii) In fixing market value of the acquired land, which is undeveloped or 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. ( Ref. (2011) 8 SCC page 9, Valliyammal and another Vs. Special Tahsildar Land Acquisition and another , paras 13, 14, 15, 16, 17, 18 and 19).

(viii) When there are several exemplars with Reference to similar lands, it is the general rule that the highest of the exemplars, if it is satisfied, that it is a bona fide transaction has to be considered and accepted. When the land is being compulsorily taken away from a person, he is entitled to the highest value which similar land in the locality shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition.(Ref. (2012) 5 SCC 432, Mehrawal Khewaji Trust (Registered), Faridkot and others Vs. State of Punjab and others).

(ix) In view of Section 51A of the Act certified copy of sale deed is admissible in evidence, even the vendor or vendee thereof is not required to examine themselves for proving the contents thereof. This, however, would not mean that contents of the transaction as evidenced by the registered sale deed would automatically be accepted. The legislature advisedly has used the word 'may'. A discretion, therefore, has been conferred upon a Court to be exercised judicially, i.e., upon taking into consideration the relevant factors. Only because a document is admissible in evidence, the same by itself would not mean that the contents thereof stand proved. Having regard to the other materials brought on record, the Court may not accept the evidence contained in a deed of sale. (Ref. (2004) 8 SCC 270 para 28 and 38, Cement Corpn. Of India Ltd. Vs. Purya and others).

(x) While fixing the market value of the acquired land, the Land Acquisition Collector is required to keep in mind the following factors : -

(a) Existing geographical situation of the land.

(b) Existing use of the land.

(c) Already available advantages, like proximity to National or State Highway or road and/ or developed area,

(d) Market value of other land situated in the same locality/ village/ area or adjacent or very near the acquired land.

(xi) Section 23(1) of the Act lays down what the Court has to take into consideration while Section 24 lays down what the Court shall not take into consideration and have to be neglected. The main object of the enquiry before the Court is to determine the market value of the land acquired. The market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when led out in most advantageous manner excluding any advantage due to carrying out of the scheme for which the property is compulsorily acquired. The determination of market value is the prediction of an economic event viz. a price outcome of hypothetical sale expressed in terms of probabilities. For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality.

(xii) The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like water, electricity, possibility of their further extension, whether near about town is developing.

(xiii) In fixing market value of the acquired land, which is undeveloped or 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. Deduction of "development cost" is the concept used to derive the "wholesale price" of a large undeveloped land with Reference to the "retail price" of a small developed plot. The difference between the value of a small developed plot and the value of a large undeveloped land is the "development cost". (Ref. (2012) 7 SCC 595 paras 16, 17, 18, 21 and 22, Sabhia Mohammed Yusuf Abdul Hamid Mulla (dead) and others).

13. Besides, there are some further authorities on the subject, which may also be referred hereat.

14. In Valliyammal and another v. Special Tahsildar (Land Acquisition) and another, (2011) 8 SCC 91 the Court has looked into various earlier judgments laying down guiding principles for determination of market value of acquired land. The Court has observed that comparable sales method of valuation is preferred since it furnishes the 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 led out in its most advantageous manner. The Court stated that when undeveloped or underdeveloped land is acquired 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.

15. In Bhule Ram v. Union of India and another, JT 2014 (5) SC 110 the 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 the court must act reluctantly to venture too far in this direction. The factors such as the nature and position of the 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 and size and shape of the land, the rise of depression in the value of the land in the locality consequent to the 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 the Act does not provide for "just terms" or "just compensation", but the 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.. The 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 the Labour Laws. Having said so, the 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)

16. In Bhupal Singh and others v. State of Haryana, (2015) 5 SCC 801 while the above principles laid down in various cases were reiterated, the Court in para 18 of the judgment said: -

"Law on the question as to how the court is required to determined 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."

17. It is also reaffirmed that where an exemplar relates to small piece of developed land and is sought to be relied to determine market value on large tract of undeveloped acquired land, deduction can be applied ranging between 20% to 75%. The Court in para 20 of the judgment relied upon its decision in Chandrashekar v. Land Acquisition Officer, (2012) 1 SCC 390 stating that the deduction has two components, one is development and another with respect to the size of the area. The earlier 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. Thus, with respect to escalation of price where exemplar is much earlier in point of time, the 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.

18. Now, we propose to discuss the authorities cited by Shri Jain in support of his contentions.

19. 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 case where almost 60% of total acquired 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.

20. In Bhagwathula Samnna and others v. Special Tehsildar and Land Acquisition Officer, Visakhapatnam Municipality (supra), 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 before Apex Court 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."

21. 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."

22. In Udho Dass (supra), by notification dated 17.5.1990, 162.5 acres of land in village Patti Musalmanan was sought to 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 in that case 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.

23. The 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 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 forcible 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.

24. In Udho Dass (supra) Court held that land was acquired in 1990. It had great potential and had been completely urbanized as huge residential obligation, 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."

25. The exposition of law we find, has been noticed in judgment dated 23.5.2000 in First Appeal No.827 of 2000. We, therefore, do not find that aforesaid decision, in any manner, helps appellant in the case in hand.

26. 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 meter 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 meter. 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 from 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 sale of 7600 square meters of land at the distance of one kilometer from acquired land sale at Rs.3/- per square meter. Here also, gap was of 18 months, thus 14.5% increase was allowed, which made sale price at 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 exemplars, 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 depends on the facts of individual cases.

27. In Nelson Fernandes and others v. Special Land Acquisition Officer, South Goa and others (supra), 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.

28. 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 owners, whose area vary from 2 to 48 guntas. Acquired land was 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/- petitioner 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/- pr acre for dry land. State, therefore, came in appeal before Apex Court. Dispute rose before Court was for computation of compensation payable to claimants and quantum thereof. Argument advanced by State is 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.

29. In this 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 claimant 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 is any existing crops or 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 jam or any other eatable products. This extension of loss of benefits amounts to remote factors, which is not permitted to take into consideration. The 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.

30. 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 taken was found only 90.07 acres. 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. Stated 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 the 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.

31. In Union of India v. Raj Kumar Baghal Singh (deal) 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, 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 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".

32. Similarly, in Thakarsibhai Devjibhai and others v. Executive Engineer, Gujarat and another (supra) and Dhiraj Singh (DEAD) Through Legal Representatives and others v. State of Haryana and others (supra) despite repeated query learned counsel for appellant could not show any proposition that in no case deduction of more than 25% can be applied.

33. Various authorities relied by counsel for appellant lay down certain principles of law, which we have already discussed broadly in our judgment dated 28.10.2015 passed in First Appeal No.827 of 2000. No distinction in principle, which we have discussed in aforesaid judgment, could be pointed by referring aforesaid authorities. The suggestion that there cannot be any deduction whatsoever or that deduction should be made at a particular rate and not beyond that is also not verified by any authorities.

34. The facts relating to acquired land have already been discussed in details in judgment dated 28.10.2015 and nothing could be shown therein to be contrary to the principles laid down in various authorities referred to hereinabove.

35. We, therefore, find that decision of this Court in First Appeal No.827 of 2000 is based on sound principles and exposition of law and no further benefit can be given to appellant on the basis of authorities as cited in this appeal. These general principles we have already taken care and the facts of present case do not require any otherwise views. We have already said in judgment dated 28.10.2015 passed in First Appeal No.827 of 2000 as under: -

"34. We have seen that in such circumstances courts have held that deduction with respect to development, even if would not apply, still deduction with respect to largeness of area will have to apply. The percentage of such deduction depending upon the difference in area, vary from 20 to 75 percent. If we apply minimum deduction of 20 percent in respect to the rate at which land was transferred by the aforesaid two sale deeds of 1982 the market value would come to Rs. 120/- & Rs. 160/- per square yard respectively. Though considering extremely small area covered by the aforesaid sale deeds deduction of at least 40 to 50 percent would be justified, and in that case market value will stand reduced much below to Rs. 120/- per square yard which has already been awarded by court below.

35. Realizing the situation, learned counsel for appellants after some argument could not dispute that it would be appropriate for this court not to interfere with the award in question so as to cause any prejudice to the appellants."

36. In view of above, we answer the aforesaid question against appellant and held that appellants are not entitled for any further enhancement of market value then what has been determined by Reference Court vide award, impugned in this appeal, since rate determined therein are just and valid, and warrants no interference.

37. In the result, appeal fails being devoid of merit. Dismissed with cost.

Order Date :- 16.12.2015

Anupam

Case :- FIRST APPEAL No. - 552 of 2001

Appellant :- Asha Ram & Another

Respondent :- U.P.A.E.P. & Others

Counsel for Appellant :- Surendra Tiwari

Counsel for Respondent :- Anand Prakash Srivastava

Hon'ble Sudhir Agarwal,J.

Hon'ble Rakesh Srivastava,J.

Re : Civil Misc. Substitution Application No.281881 of 2006

Heard Shri Pramod Jain learned Advocate assisted by Shri Surendra Tiwari, learned counsel for appellants and Shri Anand Prakash Srivastava, learned counsel for respondents.

Allowed. Let necessary substitution be carried out during the course of day.

Order Date :- 16.12.2015

Anupam