Delhi High Court
Jugal Kishore Shah vs Union Of India & Anr on 30 April, 2016
Author: Ashutosh Kumar
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ LA.APP. 966/2010
Reserved on: 26.02.2016
Date of decision: 30.03.2016
JUGAL KISHORE SHAH ..... Appellant
Through: Appellant in person
versus
UNION OF INDIA & ANR ..... Respondents
Through: Mr. Sanjay Kumar Pathak, Ms.
K. Kadmudi Pathak, Mr. Sunil
Kumar Jha, Mr. Kushal Raj
Tater & Ms.Shreya Kasera,
Advs. for UOI
Mr.Kunal Sharma, Adv. for
DDA.
+ LA.APP. 992/2010
VINOD K SHARMA & ORS ..... Appellants
Through: Mr. Sanjeev Sindhwani, Sr.
Adv. with Ms. Maldeep Sidhu,
Ms. Shifalika Dalmia & Mr.
Vanshdeep Dalmia, Advs.
versus
UOI & ORS ..... Respondents
Through: Mr. Sanjay Kumar Pathak, Ms.
K. Kadmudi Pathak, Mr. Sunil
Kumar Jha, Mr. Kushal Raj
Tater & Ms.Shreya Kasera,
Advs. for UOI
CORAM:
HON'BLE MR. JUSTICE ASHUTOSH KUMAR
LA APP. Nos.966/2010 & 992/2010 Page 1 of 44
ASHUTOSH KUMAR , J.
1. The appellants in both the appeals have challenged the judgment
dated 23.07.2010 passed in LAC No. 63/2008 by the Additional District
Judge, South II, Delhi arising out of Award No. 20/1989-90 for the land
acquired in village Kalu Sarai whereby the market value of the land in
question on the date of notification under Section 4 of the Land Acquisition
Act, 1894 (herein after called the Act) i.e. 30.09.1987, has been assessed at
the rate of Rs. 5000/- per sq. yard along with all statutory benefits including
solatium at the rate of 30% on the market value, and additional amount at
the rate of 12% per annum on the market value from the date of notification
to the date of possession or award, whichever is earlier as well as interest on
the enhanced compensation at the rate of 9% per annum from the date of
award or dispossession whichever is earlier till expiry of one year and
thereafter at the rate of 15% per annum till the payment are made.
2. The land in question belonged to M/s Birla Cotton Spinning and
Weaving Mills Ltd., a public limited company (hereinafter called the
company). The company had purchased the land bearing Khasra Nos.
485/116 (3-10), 477/117 (5-14), 478/117 (0-5) and 118(5-17), total area
measuring 15 Bighas and 6 Biswas, situated in the revenue estate of Village
Kalu Sarai, New Delhi, for the purposes of providing housing facilities to
its employees. The aforesaid land, after its purchase, was mutated in the
name of the company in the year 1951. The land abuts on Aurbindo Marg
and two important benchmarks of the area are Azad Apartments and The
Mother's International School. The area in question is also very close to
Qutab Institutional Area.
3. A brief account of the developments which have taken place in this
case regarding the land in question is necessary to understand and
appreciate the contentions of the parties.
4. A general notification for acquisition of land, including the acquired
land was issued under Section 4 of the Act on 13.11.1959, which was
followed by a notification under Section 6 of the Act. The aforesaid
notifications were quashed by the Delhi High Court vide its judgment dated
19.05.1972 and the aforesaid judgment of the High Court was approved,
affirmed and upheld by the Supreme Court in civil appeal no. 761/1973,
preferred by the UOI vide judgment dated 13.11.1986.
5. After the above notification for acquisition of land was set aside, the
company carved out small plots in the aforesaid land, roughly measuring
about 330 sq. yards each, and transferred such parcels of smaller plots to it's
individual employees by executing sale deeds in their names, after
obtaining proper permission from the concerned authorities. The sale deeds
were executed for the purposes of construction of individual houses with
common areas which were also carved out for roads, parks and other
amenities of a civil life. Mutation with respect to each transaction was
sanctioned in the individual names of the purchasers.
6. Thus, the purchasers who are the claimants (appellants before this
Court) came in possession of their specified share of the land.
7. After some time, respondent no.1 i.e. UOI, again issued a
notification under section 4 and thereafter under Section 6 of the Act on
30.09.1987 & 19.10.1987 respectively. This notification was also
challenged whereby out of the area of 15 Bighas and 6 Biswas, 4 Bighas
and 16 Biswas of land were, later, released from acquisition by the order of
the Hon'ble Supreme Court, leaving behind a total area of 10 Bighas and 10
Biswas only.
8. The appellants processed their claim petitions for their respective
shares, each one claiming Rs 12,000/- per sq. yard as compensation for the
acquired land.
9. The Land Acquisition Collector, vide Award No. 20/89-90 dated
16.10.1989 fixed the market rate at the rate of 78,000/- per Bigha, thus
fixing an amount of slightly less than Rs. 78/- per sq. yard to the
claimant/appellants.
10. While assessing the market value of the acquired land, the LAC held
that the sale deeds/agreements relating to the plots falling in Hauz Khas,
South Extension (Part I and II) and Greater Kailash etc., furnished by the
claimants were of land measuring between 200 sq. yards and 925 sq. yards
which were sold for prices ranging between Rs.25 Lakhs to Rs.1.25 Crores.
However, the LAC observed, the consideration amount included the cost of
structure also and it was not possible to bifurcate the cost of the structure
from the cost of the land. The LAC was also of the opinion that the sale
deeds/agreements, adduced as evidence, were of posh and developed
colonies with higher potential in terms of amenities and the prospects and
the colonies in which such sale had taken place were at some distance from
the acquired land. The exemplars which were placed before the LAC were
also stated to be post notification. The land acquired, in the opinion of the
collector, was still undeveloped, barren and not divided into plots and roads,
as was claimed. The sale exemplars were therefore totally discarded by the
LAC.
11. Further, the LAC, in order to arrive at a reasonable market value,
directed the field staff to check up the revenue record to find out whether
any sale had been executed in the vicinity of the land in question during the
period of notification under Section 4 of the Act. No sale was reported to
have taken place during that period. Alternatively, the previous awards with
respect to land of the same village was also checked up. Out of the 5
awards, 3 awards related to the notification of the year 1959, one of the year
1960 and the other of 1962. The LAC, on the basis of the aforesaid awards
held as follows:
"To arrive at a reasonable value of the land, the field staff was
directed to consult the revenue record to find out whether any
sale deed has been executed in the vicinity of the land during
the period of notification under section 4. No sale deed is
reported to have been taken place during this period. Thus the
previous Awards, which were announced in this village from
time to time, were consulted.
Out of the five awards, three awards relate to the material date
i.e. the date of notification under section 4 which is
13.11.1959. One award relates to 18.8.60 and other is that of
25.2.62. The rates awarded by the Land Acquisition Collector
in Award No. 1251 were Rs. 4000/- per bigha but the High
Court was pleased to enhance the compensation to Rs. 17,000/-
per bigha. No Letter Patent Appeal is reported to have been
filed against the order of the High Court. Thus, the market
value of the land acquired in village Kalu Sarai was Rs.
17,000/- per bigha as on 13.11.1959; the date of notification
under section 4 in the above Award. The land in the present
case is situated at a distance of about 200 sq. yards from the
land acquired in the above awards. Thus, this award will help
us to a great extent to assess the market value of the land. The
date of notification in the present case is 30.9.87 and there is a
difference of about 27 years and 332 days between these two
dates of notifications.
There is no denying the fact that the prices of the land have
appreciated by the passage of time. To arrive at a reasonable
market value of the land, we may add 12% per annum as an
additional amount in the shape of interest on Rs. 17,000/- per
bigha for the period 1959 to 1897. The amount so calculated
comes to Rs. 56,935/- per bigha. Thus by adding amount of Rs.
56,935/- in the value of Rs. 17,000/- per bigha as awarded by
the High Court on 13.11.1959, the total amount comes to Rs.
73,935/- or say Rs. 74,000/- per bigha.
Before arriving at any final conclusion, it may be pointed out
that the claimants have also filed a copy of the sale deed dated
26.7.74 executed by M/s Birla Cotton And Spinning & Weaving
mills Ltd. in favour of one Sh. Laxman Pd. Mittal. According to
this sale deed, the plot measuring 400 sq. yds. out of the land
under acquisition was sold for Rs. 12,000/- i.e. @Rs. 30,000/-
per bigha as on 26.7.74. In para 6(i) under the terms and
conditions between the vendor and the purchaser in the sale
deed - under the "caption" "The Vendor covenants with the
Purchaser". It is inter alia stated that "in case of breach of
this condition, the purchaser shall sell the land to other
employee/officer of the Vendor as may be nominated by the
Vendor at a price calculated on the basis of the purchase price
together with simple interest @12% per annum". In other
words the matter of fixing the price of land at a later date is
itself laid down in the said sale deed though in different
circumstances. However, the land is being acquired by the
Government at public expense and in that case the claimants
would be more benefited, as on the purchase price of the plot
besides the interest @12% they will also be entitled to solatium
@30% and 12% additional amount as admissible under the
provisions of the Land Acquisition Act.
The claimants have not filed any solid document or any sale
deed to show the prices prevailing in the proximity of the land
under acquisition on the date of notification under section 4. In
the absence of any other relevant document, we may adopt the
principle laid down in sale deed of the land involved for fixing
the market value by adding element of interest @12% per
annum on Rs. 30,000/- being purchase price of the plot. The
amount of interest for the period from 27.7.74 (date of sale
deed) to 30.9.87 (date of notification u/s 4 in the present case)
comes to Rs. 47,400/-. After adding this amount to on the
purchase price of the land, it comes to Rs 77,400/- i.e 78,000/-
per bigha.
It will be seen from the above that if we calculate the market
value of the land on the basis of the previous award, it comes
to Rs. 74,000/- per bigha whereas on the basis of the sale deed
of the plot of this very land, it comes to Rs. 78,000/- per bigha.
Out of these two proportions, the latter is more justifiable. In
view of the above, a sum of Rs. 78,000 per bigha is determined
and I award the same accordingly."
12. Thus the LAC rejected the exemplars submitted by the claimant and
based his award upon, inter alia, a sale deed 26.07.1974 wherein the market
value of the land in question was ascertained at Rs.30,000/- per Bigha
(Rs.30 per sq. yard). Upon adding a simple interest of 12% per annum, the
market value on the date of notification, was assessed at Rs.78,000 per
bigha (Rs. 78 per sq. yard).
13. The aforesaid award was challenged before the ADJ, South-II, Delhi,
vide LAC No. 63/2008. The Reference Court assessed the market value of
the land in question at the rate of Rs.5,000/- per sq. yards and awarded the
enhanced compensation on such terms along with all statutory interest
including solatium and statutory interest.
14. The reference court, after detailing the factual background and the
pleadings of the parties framed the following issues:
(i) "What was the market value of the acquired land as on the
date of notification under Section 4 of the Act?
(ii) To what enhancement compensation, if any, are the
petitioners entitled?
(iii) Whether the petitioners are also entitled to cost for structure
boundary wall etc. if any existing on the acquired land?
(iv) Relief."
15. Before the Reference Court, the sole appellant in LA (A) 966/2010,
namely Jugal Kishore Sah and the first appellant in LA(A) No. 992/12010
namely Vinod Kumar, examined themselves as PW1 and PW2. On behalf
of the respondents, only one witness namely Amit Kumar Yadav, Patwari
of Village Kalu Sarai, SDM Office, Hauz Khas, New Delhi, was examined
as DW1.
16. Jugal Kishore Shah PW1/ appellant in LA(A) No. 966/2010 averred
that the acquired land was located in a thickly populated are of South Delhi
which, according to the master plan of 1962, was earmarked for residential
use.
17. The affidavit furnished by him contained reference of an affidavit of
Mr. Sharda Prasad, Commissioner Land Disposal, DDA dated 04.03.1999
which was filed in Supreme Court in Contempt Petition No. 470/1998
arising out of CA No. 4579/1995 wherein it was admitted that the land use
was residential as per the master plan. The affidavit of PW1 also contained
the reference of another affidavit dated 22.11.1995 by one Mr. P.C. Jain,
Additional Commissioner, DDA, wherein it was stated that the land fell in
Malviya Nagar zone as per the approved zonal development plan and the
acquired land was located opposite IIT, on Mehrauli Road between Azad
Apartment and The Mother's International School.
18. In his oral deposition before the reference court he stated that the
Mother's International School is situated about 10 -15 ft. away and that
Green Park and Hauz Khas colonies are situated at a distance of 1 Km
whereas Safdarjung is at a distance of 1.5 Kms from the land in question.
Green Park and Hauz Khas have been stated to be situated on the opposite
side.
19. The suggestions regarding the land being agricultural was denied.
20. Vinod Kumar, one of the appellants in LA(A) 992/2010 (PW2)
reiterated the claim that the acquired land is surrounded by posh residential
colonies. There is a special reference in his deposition about the acquired
land being adjacent to Azad Apartments, Sarvodaya Vihar, a residential
multistoried building at a distance of about 500 sq. yards. The acquired land
is in the vicinity of nearby posh residential colonies of Green Park, Hauz
Khas, Panchsheel Enclave, Safrdajung Enclave, Qutab Institutional Area. It
was also affirmed by PW.2 in his evidence that the acquired land was
residential as per the master plan of Delhi, 1962, and that opposite the road,
IIT campus had been operational since 1964-65. The Azad Apartments
were also, as stated, constructed in the year 1970-71.
21. The following documents were exhibited on behalf of the
claimants/appellants:
S.No Exhibit Documents
1 Affidavit of Sharda Prasad dated 04.03.1999
2 Affidavit of Sharda Prasad dated 27.08.1999
3 Affidavit of P.C. Jain dated 22.11.1995 with
annexures.
4 Sale Deed dated 04.07.1988 pertaining to property
bearing C-46, South Extension - II (wherein market
value was arrived at Rs. 17,092/- per sq. yard.)
5 Affidavit of Sharda Prasad dated 23.04.2001
6 Sale Deed dated 18.03.1988 pertaining to R-19,
Hauz Khas Enclave (wherein market value was
arrived at Rs. 10,097/- per sq. yard.)
7 Order dated 12.12.1995 passed by the Supreme
Court in CA No. 4579/95.
8 Order dated 07.04.1997 passed by the Supreme
Court in Cont. Petition No. 209/97 in CA No.
4579/95.
9 Px1 Sale Deed dated 24.09.1986 pertaining to E-62
Greater Kailash - I (wherein market value was
arrived at Rs. 7,553/- per sq. yard)
10 Px2 Sale Deed dated 24.04.1987 pertaining to M-39 GK
- II. (wherein market value was arrived at Rs.
7,200/- per sq. yard) The said plot was constructed
upon.
11 Px3 Sale Deed dated 25.08.1986 pertaining to E-48, GK
-II. (wherein market value was arrived at Rs.
4,720/- per sq. yard)
12 Px4 Sale Deed dated 12.09.1986 pertaining to M-10 GK
- II. (wherein market value was arrived at Rs.
13,846/- per sq. yard)
13 Px5 Sale Deed dated 28.11.1986 pertaining to U-I, Green
Park Extension. (wherein market value was arrived
at Rs. 1,711/- per sq. yard)
14 Px6 Sale Deed dated 27.11.1986 pertaining to C-146,
Sarvodaya Enclave. (wherein market value was
arrived at Rs. 2,077/- per sq. yard)
15 Px7 Sale Deed dated August 1986 pertaining to N-24,
Panchsheel Enclave. (wherein market value was
arrived at Rs. 5,000/- per sq. yard)
16 Px8 Sale Deed dated 19.03.1987 pertaining to L-2,
Green Park. (wherein market value was arrived at
Rs. 6,475/- per sq. yard)
22. Amit Kumar Yadav, Patwari of Village Kalu Sarai, SDM Office,
Hauz Khas, New Delhi (DW1) proved the Aks Sizra (Village Map) of
Village Kalu Sarai. In regard to the location of the said land, he stated
before the reference court that in North of the acquired land is the boundary
of Village Kharera and Shapur Jat, whereas the southern portion of the
acquired land touches the boundary of Village Adhchini and Begumpur.
According to him the western side of the plot is flanked by the boundary of
Village Jiya Sarai and Village Sarai Shahjee touches the eastern portion of
the land. The land, according the DW1, falls on the main road as per the
Ask Izra (Ex.DW.1/1) and the lands of Khasra 116 & 117 of Village Kalu
Sarai falls on Aurobindo Marg. The aforesaid witness on behalf of the
respondents has also admitted that the area is very near to GK, Sarvapriya
Vihar, Masjid Moth and Sheikh Sarai.
23. No Exemplars were, however, cited by the defence witness.
24. The following documents were exhibited on behalf of the
defendants:
S.No Documents
1 Aks Sizra of Village Kalu Sarai
2 Sale Deed dated 24.07.1974 executed by M/s Birla
Cotton Spinning and Weaving Mills Ltd. in favour of
Jugal Kishore (wherein plot was purchased at the rate of
Rs. 30/sq. yard).
25. The reference court on the basis of the evidence adduced on behalf
of the parties, oral and documentary, came to the following conclusion:
i The land use of the area was residential as per the master plan of
Delhi, 1962, and as per zonal development plan, the land was
earmarked for setting up of institutions.
ii The claimants/appellants had to pay Rs. 7970/- per sq. meter for
their own land, which was released from acquisition by the Apex
Court, the location of land was opposite IIT and adjacent to Azad
Apartments and The Mother's International School.
iii No agricultural land existed in the entire vicinity and the entire
land was never used for agricultural purposes since it purchase in
1951 and had been plotted for the purposes of residential colony.
iv The surrounding areas were colonised and developed with parks
and street lights etc. by the local authorities in accordance with the
master plan.
26. The reference court also took note of the fact that the Delhi High
Court, in case of an acquisition pursuant to notification dated 12.10.1983 of
the land situated in Yusuf Sarai, a nearby locality, has assessed the amount
of compensation to the land owner at the rate of Rs.12,500 per sq. yard.
(Mahanth Atma Ram, RFA No.204/1999)
27. The manner of calculation of the market value as well as the amount
to which the appellant would be entitled to, is set out in the following
paragraphs of the judgment of the reference court.
"25. There is in no manner of doubt that the land in question,
much prior to notification under Section 4(1) of the Act, had a
great potential not only as a site for residential buildings to
which it was nearly put to sue as per the Master Plan, but also
for Commercial and Institutional development, which aspect has
to be taken note of by a reference Court.
26. The tentacles of development have transgressed the
borders of Delhi and spread to the National Capital Region.
Though rates of land of different colonies differ, there is a basic
yardstick that can be applied. Prices or market value of land
situated within a few kilometers of each other in a fully
developed city, (as Delhi was in 1987) would still be comparable
and not be substantially different. The amount of compensation
cannot be ascertained with mathematical accuracy. To come to
any conclusion, I would also be guided by the market values
assessed by the Hon‟ble High Court of Delhi for lands acquired
in different localities of South Delhi keeping the period of
notification in mind.
27. In the matter of Krishna Yachendra Bahadurvaru vs. The
Special Land Acquisition Officer, City Improvement Trust
Board, Bangalore & Ors. Reported in AIR 1979 SC 869, the
Apex Court has held that the process of determination of market
value in any case must depend largely on evaluation of any
imponderables and hence it must necessarily be to some extent a
matter of conjecture or guess work.
28. In Mahant Atmaram‟s case (Supra), the Hon‟ble High Court
has adjudicated the market value of the land in Yusuf Sarai at
Rs.12,500/- per sq. yard as on 12.10.1983. The location of land
in the present reference is not very far from the land in Yusuf
Sarai. Market value of land acquired in Jasola as on 15.06.1979
was determined at Rs.2,240/- per sq. yard for land situated in
Jasola. The location and development of the land under the
present reference was at a better pedestal.
29. There has been a steep rise in the land prices in Delhi due to
spiraling demand and paucity of availability. The Courts have
been granting progressive capitalization over the market values
adjudicated at different times. Even this falls short of the reality,
but for the purpose of adjudication mere judicial notice is not
enough and a firm basis is required to come to some conclusion.
30. Keeping in view the various parameters such as location of
the acquired land in reference, its potential, the existence of
some of the better know posh and developed colonies of South
Delhi surrounding it, the market value of land acquired in Yusuf
Sarai in 1983, it would be equitable to award a just
compensation of Rs.5,000/- per sq. yard to the petitioners for
their land compulsorily acquired by the respondents in 1987.
This difference in valuation of the land in Yusuf acquired in 1983
with the land under reference acquired in 1987 is due to the
possibility that the former land have been smaller in size or
placed in a better commercially viable location.
Issue no.1 is decided as the market value of the acquired land
being adjudicated at Rs.5,000/- per sq. yard as on the date of
notification."
28. With respect to issue no.2 (as to what enhancement of compensation
would the claimants be entitled to), the reference court was of the opinion
that the claimants were entitled to the balance compensation of Rs. 4922/-
per sq. yard. The issue with respect to assessment of cost for structure,
boundary wall etc. was decided against the claimants for the paucity of
evidence in that regard. Thus what was decided by the reference court was
that the claimants were entitled to receive compensation in terms of market
value determined at the rate of Rs. 5000 per sq. yard with all statutory
benefits including solatium at the rate of 30% and an additional amount of
12% per annum on the market value, as provided under section 23(1A),
from the date of notification till the date of possession whichever is earlier.
Over and above the aforesaid amount, the reference court made provision
for statutory interest at the rate which is provided in the Act.
29. The appellants have challenged the judgment of the Reference
Court primarily on the ground that though the Reference Court
accepted the contentions of the appellants on law and facts but
without describing any mechanism for arriving at the market value of
the land in question, computed it at the rate of Rs.5,000/- per sq. yard
and awarded compensation in terms of the aforesaid assessed market
value.
30. The appellants are aggrieved by the fact that low market value
was assessed and no reason has been assigned which would suggest
any mechanism or mode for the Reference Court to have arrived at the
said figure regarding the market value of the acquired land.
31. The further contention of the appellants is that the respondents
did not lead any evidence with respect to either the price of acquired
land, building potentiality or the lack of it as also whether any
development was required over the aforesaid land permitting any
reasonable deductions. The respondents also did not lead any evidence
with respect to non-plotting of the land in question individually with
respect to the appellants.
32. The contentions of the appellants, on summing up, are as
hereunder:
i. They are entitled to the highest value which a similar land in the
locality has fetched in a bonafide transaction entered into
between a willing purchaser and a willing buyer near or about
the time of acquisition.
ii. The sale deed dated 04.07.1988 (Ex.PW.1/8) which is the
highest exemplar with respect to the plot of 509 sq. yards
bearing no. C-46, South Extension Part-II and which fetched a
price of Rs.17,092/-per sq. yard ought to have been used as the
correct reference.
iii. Since the sole witness on behalf of the defendant (DW.1) did
not give any evidence regarding the price/value of the land nor
any exemplars were put forth, there was no reason for the
Reference Court not to have accepted the highest exemplar, if it
was found to be bonafide.
iv. The respondents, it has been urged, did not cross-examine the
two witnesses on behalf of the appellants with respect to sale
price and thus the exemplars which were exhibited and duly
proved were the only material before the Reference Court to
have decided the reference.
v. The appellants have further claimed that after accepting the sale
exemplar (Ex.PW.1/8), which is the sale deed dated 04.07.1988
describing a price of 509 sq. yards at the rate of Rs.17,092/- per
sq. yard, no deductions are required to be made as the land was
fully developed and had all the amenities before the acquisition,
not requiring any additional expenditure for its development.
33. Additionally, it has been argued that the building potentiality
has always had a positive incremental effect on the market value of the
acquired land in as much as the true market value is to be ascertained
with reference to the better use to which the land could reasonably be
capable of being put to in the immediate or near future.
34. The respondents have also assailed the judgment of the
Reference Court by filing cross objections under Order 41 Rule 22 of
the CPC. The challenge to the impugned judgment on their behalf is
on the ground that the compensation awarded by the Land Acquisition
Collector vide Award No.20/1989-90 at that rate of Rs.78/- per sq.
yard was based on sound reasoning and did not warrant any
interference by the Reference Court. The enhancement in
compensation from Rs.78/- per sq. yard to Rs.5,000/- per sq. yard
overlooked material evidence especially the fact that the appellants
had themselves purchased the land in question at Rs.30 per sq. yard in
the year 1974. Thus, even if an increase at the rate of 12% per annum
is added on that value of land from 1974 to 1987 (the year of
notification), the same would come to approximately Rs.77 per sq.
yard, which is roughly the assessment of the Collector regarding the
market value of the land.
35. The respondents have further assailed the judgment of the
Reference Court by arguing that for assessment of the market value of
the land in question, the Reference Court was first required to assess
the price paid by the purchaser for the said land and similar land
situated in the adjoining area i.e. Village Mehrauli. They have relied
upon the judgment of the Delhi High Court in Nand Kishore vs.
Union of India: 73 (1998) DLT 108, wherein village Mehrauli, and an
adjoining village was acquired vide notification dated 21.11.1978, for
which the market value was assessed at the rate of Rs.30,000/- per
bigha which is approximately Rs.30 per sq. yard. This had to be taken
as a reference point, it has been argued, and not with respect to sale of
lands in areas like South Extension, Hauz Khas, Safdarjung
Development Area, etc. The contention of the respondents is that the
land in question was not in a developed stage as there was no layout
plan. In that view of the matter, the advantage potentialities of the area
was not comparable with the area of developed and posh localities.
36. It now, therefore, has fallen upon this Court to determine
whether the Reference Court was justified and was correct in fixing
the market value of the land in question at Rs.5,000/- per sq. yard on
the basis of the evidence adduced and whether the Reference Court
had any mechanism in mind so as to come to a valuation/price of the
acquired land.
37. To this effect, it might be necessary to refer first to the relevant
statutory provisions of the Land Acquisition Act, 1894 and the
development of law with regard to the assessment of market value of
the land and whether any deductions are required to be made and if so,
when and to what extent.
38. Now in order to appreciate the contentions of the parties for
fixing the market rate of the acquired land, it would first be necessary
to refer to the provisions of Sections 23 & 24 of the Land Acquisition
Act, 1894 as also the case laws with regard to the principles on which
the market value of the acquired land is to be assessed for the purposes
of determination of the compensation to be granted to the
claimants/land owners.
39. Section 23 of the Land Acquisition Act, 1894 deals with matters
to be considered in determining compensation:-
"23. Matters to be considered in
determining compensation -(1) In
determining the amount of compensation to
be awarded for land acquired under this
Act, the court shall take into consideration-
first, the market value of the land at the
date of the publication of the notification
Under Section 4, Sub-section (1).
secondly, the damage sustained by the
person interested, by reason of the taking of
any standing crops or trees which may be on
the land at the time of the Collector's taking
possession thereof;
thirdly, the damage (if any, sustained by the
person interested , at the time of the
Collector's taking possession of the land, by
reason of severing such land from his other
land;
fourthly, the damage (if any), sustained by
the person interested, at the time of the
Collector's taking possession of the land, by
reason of the acquisition injuriously
affecting his other property, movable or
immovable, in any other manner, or his
earnings;
fifthly, if, in consequence of the acquisition
of the land by the Collector, the person
interested is compelled to change his
residence or place of business, the
reasonable expenses (if any) incidental to
such change; and
sixthly, the damage (if any) bona fide
resulting from diminution of the profits of
the land between the time of the publication
of the declaration Under Section 6 and the
time of the Collector's taking possession of
the land.
(1A) In addition to the market value of the
land above provided, the Court shall in
every case award an amount calculated at
the rate of twelve per centum per annum on
such market value for the period
commencing on and from the date of the
publication of the notification Under
Section 4, Sub-section (1), in respect of such
lend to the date of the award of the
Collector or the date of taking possession of
the land, whichever is earlier.
Explanation- In computing the period
referred to in this sub-section, any period or
periods during which the proceedings for
the acquisition of the land were held up on
account of any stay or injunction by the
order of any court shall be excluded.
(2) In addition to the market-value of the
land, as above provided the court shall in
every case award a sum of thirty per centum
on such market-value, in consideration of
the compulsory nature of the acquisition."
40. Section 24 of Land Acquisition Act, 1894 with regard to the
matters to be neglected in determining the compensation:-
"24. Matters to be neglected in determining
compensation. - But the Court shall not take
into consideration-first, the degree of
urgency which has led to the acquisition;
secondly, any disinclination of the person
interested to part with the land acquired;
thirdly, any damage sustained by him which,
if caused by a private person, would not
render such person liable to a suit;
fourthly, any damage which is likely to be
caused to the land acquired, after the date of
the publication of the declaration under
section 6, by or in consequence of the use to
which it be put;
fifthly, any increase to the value of the land
acquired likely to accrue from the use to
which it will be put when acquired;
sixthly, any increase to the value of the other
land of the person interested likely to accrue
from the use to which the land acquired, will
be put;
seventhly, any outlay or improvements on,
or disposal of, the land acquired,
commenced, made or effected without the
sanction of the Collector after the date of the
publication of the [notification under section
4, subsection(1); [or]
eighthly, any increase to the value of the
land on account of its being put to any use
which is forbidden by law or opposed to
public policy."
41. The law with respect to calculation of the market value of the
acquired land and the compensation to be given to the land owners is
well established. Section 23 of the Act clearly lays down the
principles.
42. Market value of the land means what a willing purchaser would
pay to a willing seller for the property having regard to the advantages
available to the land and the development activities which may be
going on in the vicinity and the potentiality of the land.
43. While fixing the market value of the acquired land, what are
required to be kept in mind are the geographical situation of the land;
the existing use of the land and the location as well as other
advantages appurtenant to the land. The market value of the other land
situated in the same locality or adjacent locality would also be an
important factor for determination of the reasonable market value of
the acquired land.
44. In Viluben Jhalejar Contractor vs. State of Gujarat, (2005) 4
SCC 789, the Supreme Court laid down the following principles for
determination of market value of the acquired land:-
17. Section 23 of the Act specifies the
matters required to be considered in
determining the compensation; the principal
among which is the determination of the
market value of the land on the date of the
publication of the notification under sub-
section (1) of Section 4.
18. One of the principles for determination
of the amount of compensation for
acquisition of land would be the willingness
of an informed buyer to offer the price
therefor. It is beyond any cavil that the price
of the land which a willing and informed
buyer would offer would be different in the
cases where the owner is in possession and
enjoyment of the property and in the cases
where he is not.
19. Market value is ordinarily the price the
property may fetch in the open market if sold
by a willing seller unaffected by the special
needs of a particular purchase. Where
definite material is not forthcoming either in
the shape of sales of similar lands in the
neighbourhood at or about the date of
notification under Section 4(1) or otherwise,
other sale instances as well as other
evidences have to be considered.
20. 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-à-
vis the land under acquisition by placing the
two in juxtaposition. The positive and
negative factors are as under:
Positive factors Negative factors
(i) smallness of size (i) largeness of area
(ii) proximity to a (ii) situation in the interior at
road a distance from the road
(iii) frontage on a (iii) narrow strip of land with
road very small frontage compared
to depth
(iv) nearness to (iv) lower level requiring the
developed area depressed portion to be filled
up
(v) regular shape (v) remoteness from developed
locality
(vi) level vis-a-vis (vi) some special
land under acquisition disadvantageous factors which
would deter a purchaser
(vii) special value for
an owner of an
adjoining property to
whom it may have
some very special
advantage
45. It has been the practice to adopt the comparable sales method
for determining the market value of the land as aforesaid method is
more preferable than computing the valuation of the land on the basis
of capitalization of net income method or by taking expert opinion.
The reason for the same is that a willing purchaser would always pay
the same price which was fetched of other land with same
geographical location and advantage.
46. In Karnataka Urban Water Supply and Drainage Board vs.
K.S.Gangadharappa & Ors, (2009) 11 SCC 164, the Supreme Court
held that when sale is within a reasonable time of the date of
notification under Section 4(1); it is a bona fide transaction and the
sale is of the land adjacent to the land acquired having similar
advantages, it remarkably reduces the element of speculation in
fixation of market value of the land with reference to comparable
sales.
47. Similar view was taken by the Supreme Court in Land
Acquisition Officer vs. T.Adinarayan Setty, AIR 1959 SC 429 and
Ravinder Narain vs. Union of India, (2003) 4 SCC 481.
48. In Mahabir Prasad Santuka and Ors. vs. Collector, Cuttack
and Ors. (1987) 1 SCC 587, the Supreme Court took into account the
evidence on record and found that the land in dispute was adjacent to
the industrial area which included number of factories and came to the
conclusion that it had the potential of future course as factory or
building site. It was held by the Supreme Court in Mahabir Prasad
Santuka and Ors. (Supra) at para 6 as follows:-
"6. The High Court further held that since
the appellants had purchased the land at the
rate of Rs. 100 per acre in the year 1956,
they were not entitled, in any event, to
compensation more than Rs. 7,500 per acre,
this view is untenable. There is evidence on
record to show that the land which was
purchased in the year 1956 had no
potentiality at that stage, as Industrial acre
had not developed near the land. After the
setting up industrial area of Charbatiya the
price of the land situate in its vicinity had
increased tremendously. It is a matter of
common knowledge that price of land near
the vicinity of industrial area is bound to
rise. Admittedly the appellants' land is
situate near the industrial area, therefore its
value had increased and the High Court
committed error in ignoring this aspect by
is a big plot having various sub-plots which
are owned by different persons. The
appellants are owners of Plots Nos. 177/16,
177/16-A, 177/17 and 177/17-A. The land
contained in other sub-plot Nos. 177/19,
177/10 and 177/7 was also acquired and the
compensation in respect thereof was
determined by High Court uniformly at the
rate of Rs. 15,000 per acre. There are five
judgments of the High Court on record in
respect of various sub-plots of Plot No. 177.
On a perusal of those judgments, it is
evident the High Court has awarded
compensation at the rate of Rs. 15,000 per
acre for the land which is quite adjacent to
the appellants land. The High Court has
observed in its Judgment in First Appeal No.
173 of 1971 connected with First Appeal No.
174 of 1971, Collector, Cuttack v.
Karunakar Mohanty, decided on October
21, 1975, that the Advocate General
appearing on behalf of the State conceded
that in view of the decision of the High
Court in respect of the similar land in the
vicinity it was not possible on his part to
question the valuation of the acquired land
as fixed by the Subordinate Judge at the rate
of Rs. 15,000 per acre. In that case plot No.
177/13 was the subject matter of the
acquisition. We have also perused a copy of
the map which is on record. We find that the
appellant's land is quite adjacent to those
plots which were the subject matter of the
decision in the appeals decided by the High
Court where compensation has been
awarded at the rate of Rs. 15,000 per acre.
In the circumstances there is no valid reason
to award compensation to the appellant at a
reduced rate specially so when the
respondents have failed to point out any
material difference in the situation,
topography, lay out of the appellants' land
with that of the adjacent land in respect of
which compensation has been awarded at
the rate of Rs. 15,000 per acre. If the
impugned order of the High Court under
appeal is upheld an anomalous position
would arise inasmuch as the appellants will
be denied that amount of compensation
which has been awarded to other claimants
in respect of similar adjacent land. We are
therefore of the opinion that the High Court
committed error in interfering with the order
of the Subordinate Judge and in determining
the compensation at the rate of Rs. 7,500 per
acre. We hold that the appellants are
entitled to compensation at the rate of Rs.
15,000 per acre as determined by the
learned Subordinate Judge."
49. The Supreme Court in the aforesaid case took note of the fact
that there was no reason for the land owners to be paid at a low rate as
it would have created an unfair circumstance against the land owners
in the event of their being denied fair compensation which has been
awarded to the other claimants in respect of adjacent land.
50. The market value of the land is to be determined with reference
to the above market sale of comparable land in the neighbourhood by
a willing seller to a willing buyer on or before the date of notification
for acquisition. This is because such sale exemplars give a fair
indication of the market value of the land.
51. A "willing seller" is a person who is not acting under any
pressure to sell his property (in distress sale), he knows the advantages
and disadvantages of his property and sells the same after ascertaining
the prevailing market prices at fair and reasonable value.
Correspondingly a willing purchaser is a person who has a choice in
the matter of purchase of different properties and out of the choice, he,
voluntarily decides to buy a particular property by assessing its
advantages and disadvantages and the prevailing market value thereof.
52. Another issue which has gained general acceptance is that the
sale transactions under the registered sale deeds are to be assumed as
normal sales by a willing seller to a willing purchaser. However, in the
absence of such registered sale deeds, even auction sales, which stand
on a different footing, can be accepted if they are the only comparable
sale transactions available in terms of proximity in situation and
proximity in time to the acquired land.
53. The Supreme Court in Raj Kumar v. Haryana State, (2007) 7
SCC 609 has observed that the element of computation in an auction
sale makes them unsafe guides for determining the market value.
However, in Executive Engineer, Karnataka Housing Board vs.
Land Acquisition Officer, Gadag & Ors, (2011) 2 SCC 246, the
Supreme Court held as hereunder:-
"7. But where an open auction sale is the
only comparable sale transaction available
(on account of proximity in situation and
proximity in time to the acquired land), the
court may have to, with caution, rely upon
the price disclosed by such auction sales, by
providing an appropriate deduction or cut to
off-set the competitive-hike in value. In this
case, the Reference Court and High Court,
after referring to the evidence relating to
other sale transactions, found them to be
inapplicable as they related to far away
properties. Therefore we are left with only
the auction sale transactions. On the facts
and circumstances, we are of the view that a
deduction or cut of 20% in the auction price
disclosed by the relied upon auction
transaction towards the factor of
`competitive - price hike' would enable us to
arrive at the fair market price."
54. Thus what the Supreme Court cautioned was that in the absence
of any comparable sale exemplars, there was no difficulty in accepting
auction sales as well but with appropriate deductions which would
offset the competitive hike in valuation.
55. In Executive Engineer, Karnataka Housing Board (Supra), the
Supreme Court, taking into consideration the existence of gap of three
years between the relevant date for determination of compensation and
sale exemplars and taking into account that the acquired lands were
within the municipal limits with considerable development potential,
gave 10% increase per annum for three years for assessing the market
value on the concerned date.
56. With respect to the issue regarding compensation for acquisition
of a large piece of land on the basis of sale instances relating to
smaller pieces of land, the law is very clear that it would always not be
an absolute rule that sale instances relating to small pieces of land are
unsafe guides and cannot be considered. Under certain circumstances
sale deeds of small pieces of land could be used for determining the
value of acquired land which is comparatively large in area.
57. In Land Acquisition Officer vs. Nookala Rajamallu, (2003) 12
SCC 334, it has been held:-
"6. Where large area is the subject-matter
of acquisition, rate at which small plots are
sold cannot be said to be a safe criterion.
Reference in this context may be made to
few decisions of this Court in Collector of
Lakhimour v. Bhuban Chandra Dutta
MANU/SC/0597/1971: AIR 1971 SC
2015, Prithvi Raj Taneja v. State of M.P.
MANU/SC/0281/1977:AIR 1977 SC 1560
and Kausalya Devi Bogra v. Land
Acquisition Officer MANU/SC/0241/1984:
AIR 1984 SC 892.
7. It cannot, however, be laid down as an
absolute proposition that the rates fixed for
the small plots cannot be the basis for
fixation of the rate. For example, where
there is no other material, it may in
appropriate cases be open to the
adjudicating Court to make comparison of
the prices paid for small plots of land.
However, in such cases necessary
deductions/adjustments have to be made
while determining the prices."
58. In Bhagwathula Samanna vs. Tehsildar and Land Acquisition
Officer, (1991) 4 SCC 506, it was held:-
13. The 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 the price fetched by the
small plots of land. If the larger tract of land
because of advantageous position is capable
of being used for the purpose for which the
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 the value for
purpose of comparison is not warranted....
59. In Land Acquisition Officer vs. L.Kamalamma, (1998) 2 SCC
385, the Supreme Court held as under:-
"...when no sales of comparable land was
available where large chunks of land had
been sold, even land transactions in respect
of smaller extent of land could be taken note
of as indicating the price that it may fetch in
respect of large tracts of land by making
appropriate deductions such as for
development of the land by providing
enough space for roads, sewers, drains,
expenses involved in formation of a lay out,
lump sum payment as also the waiting
period required for selling the sites that
would be formed."
60. In Smt.Basavva and Ors vs. Special Land Acquisition Officer
and Ors, (1996) 9 SCC 640, the Supreme Court gave a direction that
the Courts have to consider whether sales relating to smaller pieces of
lands are genuine and reliable and whether they are in respect of
comparable lands. In case said requirements are met, sufficient
deductions should be made to arrive at the just and fair market value
of large tracts of land. The time lag for real development and the
waiting period for development are also relevant consideration for
determination of just and adequate compensation. Each case depends
upon its own facts. In Basavva (Supra), the Supreme Court, on such
principle made a total deduction of 65% in determining the
compensation.
61. It is true that in normal course it would be an extremely difficult
proposition to look for sale instances of large tracts of land as they are
very few in number. More often than not similar plots are sold and
purchased and it would be rather harsh for the Courts to ask from the
claimants, sale instances of lands which are comparable in size to the
acquired land. The aforesaid principles of using, as an exemplar, sale
instances of small tracts of land with necessary deductions was
approved by the Supreme Court in the case of Special Land
Acquisition Officer and Anr. vs. M.K. Rafiq Saheb in (2011) 7 SCC
714.
62. A question arose as to what course is required to be adopted in
case several relevant exemplars are available before the Courts. The
Supreme Court in M.Vijayalakshmamma Rao Bahadur vs. Collector,
(1969) 1 MLJ 45 and State of Punjab vs. Hansraj, (1994) 5 SCC 734
held that averaging the prices fetched by sales by different lands of
different kinds at different times may not lead to the correct result
regarding the market value of the land in question. Such method ought
not to be adopted regularly.
63. In Anjani Molu Dessai vs. State of Goa, (2010) 13 SCC 710
the Supreme Court held as under:-
"20. The legal position is that even where
there are several exemplars with reference
to similar lands, usually the highest of the
exemplars, which is a bona fide transaction,
will be considered. Where however there are
several sales of similar lands whose prices
range in a narrow bandwidth, the average
thereof can be taken, as representing the
market price. But where the values disclosed
in respect of two sales are markedly
different, it can only lead to an inference
that they are with reference to dissimilar
lands or that the lower value sale is on
account of undervaluation or other price
depressing reasons. Consequently,
averaging cannot be resorted to. We may
refer to two decisions of this Court in this
behalf."
64. The two decisions referred to in the aforesaid judgment are
M.Vijayalakshmamma Rao Bahadur (Supra) and State of Punjab vs.
Hansraj (Supra).
65. If there are several exemplars with reference to smaller lands,
the safest proposition is to adopt the highest of the exemplars if it
appears to be a bonafide transaction. This principle is in accord with
the element of fairness in grant of compensation as a land owner is
entitled to the highest valuation of the land which a similarly located
land in the vicinity has fetched.
66. Keeping the aforesaid legal position in mind, I proceed to
analyze the evidence adduced on behalf of the appellants.
67. What is not in dispute is that the acquired land was a residential,
non-agricultural land falling on what is known today as Aurbindo
Marg. There cannot be any gainsaying that the surrounding areas are
well-developed and well-colonized with all the amenities.
68. Jugal Kishore Shah, PW.1, has categorically stated that Green
Park and Hauz Khas colonies are situated at a distance of 1 km.
whereas Safdarjung is at a distance of 1.5 km. from the land in
question.
69. Similarly, Vinod Kumar, PW.2, has also stated about residential
multi storeyed buildings at a distance of about 500 sq. yards from the
acquired land. The Qutub Institutional Area is also situated very close
and near to the land in question. The presence of IIT Campus since
1964-65 and the construction of Azad Apartments in the
neighbourhood of the land acquired in the year 1970-71, speak
volumes about the geographical location of the land, and its potential.
70. DW.1, the sole witness on behalf of the defendant, has also
ratified that the land is adjacent and very near to areas like Greater
Kailash, Sarvpriya Vihar, Masjid Moth and Sheikh Sarai.
71. The appellants have furnished, as evidence, various sale deeds
of the land sold in the surrounding area at around the same time when
the notification for the present acquisition had been issued.
72. For brief reference, a chart of the sale deed (exemplars) which
has been exhibited by the appellants is being reproduced:
Exhibit Property Area Date of Sale Sale Sale
No. No. (Sq Deed Amount Amount/Sq
yrds) (Rs.) yrds (Rs.)
Px1 E-62, Greater 556 24.09.1986 42,00,000/- 7,553/-
Kailash Part- (ATS-
I 03.09.1986)
Px2 M-39, 250 24.04.1987 18,00,000/- 7,200/-
Greater (Basement
Kailash Part- and GF)
I
Px3 E-48, Greater 250 Aug.,1986 11,80,000/- 4,720/-
Kailash Part-
II
Px4 M-10, 195 12.09.1986 27,00,000/- 13,846/-
Greater (ATS-
Kailash Part- 16.05.1986)
II
Px5 U-1, Green 555 28.11.1986 9,50,000/- 1,711/-
Park Extn. (ATS-
26.09.1986)
Px6 C-146, 400 27.11.1986 8,31,000/- 2,077/-
Sarvodaya (Leasehold)
Enclave
Px7 N-24, 800 August, 1986 40,00,000/- 5,000/-
Panchsheel
Enclave
Px8 L-2, Green 471 19.03.1987 30,50,000/- 6,475/-
Park (ATS-
09.06.1986)
PW1/8 C-46, South 509 04.07.1988 87,00,000/- 17,092/-
(Ex.PW1/A) Ex., Part-II -ATS
dt.04.02.1988
-Part
payment
made on
23.01.1988
PW1/9 R-19, Hauz 515 18.03.1988 52,00,000/- 10,097/-
Khas
Enclave
73. It has to be borne in mind that the date of notification is
30.09.1987. The sale deed, Ex.PW.1/8, which is actually Ex.PW.1/A,
is the sale price of 509 sq. yards of land in South Extension Part-II at
the rate of Rs.17,092/- per sq. yard. The aforesaid sale took place on
04.07.1988 which is after the date of notification i.e. 30.09.1987
though it has been claimed by the appellants that the agreement to sell
the aforesaid property was made on 04.02.1988 and part payment was
made on 23.01.1988 and therefore, this sale instance was only four
months later than the date of notification. Similarly, the exemplar,
Ex.PW.1/9 which is the sale deed with regard to the sale of 515 sq.
yards of property in Hauz Khas Enclave, fetching a price at the rate of
10,097/- is of the year 1988, which again, is a post notification sale
(18.03.1988). Thus, both the exemplars which are sale instances in
nearby areas are post notification instances.
74. The law with regard to acceptance of post notification sale deed
as an exemplar is very clear. In Administrator General of W.B. vs.
Collector, Varanasi: (1988) 2 SCC 150, the Hon'ble Supreme Court
has held as hereunder:
"13. ... 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. This Court in State of
U.P. v. Major Jitendra Kumar [(1982) 2 SCC 382]
observed:
„3. ... It is true that the sale deed, Ext. 21 upon which the
High Court has relied is of a date three years later than
the notification under Section 4 but no material was
produced before the court to suggest that there was any
fluctuation in the market rate at Meerut from 1948
onwards till 1951 and if so to what extent. In the absence
of any material showing any fluctuation in the market rate
the High Court thought it fit to rely upon Ext. 21 under
which the Housing Society itself had purchased land in the
neighbourhood of the land in dispute. On the whole we are
not satisfied that any error was committed by the High
Court in relying upon the sale deed, Ext. 21.‟
But this principle could be appealed to only where there is
evidence to the effect that there was no upward surge in
the prices in the interregnum. The burden of establishing
this would be squarely on the party relying on such
subsequent transaction." (emphasis supplied)
75. As a result of the acquisition, the market value of the adjacent
land is expected to go up and therefore the aforesaid exemplars which
are post notification transactions would not be sound criteria for
determining and assessing the value of the acquired land. The
appellants have not adduced any evidence to show that the market
value of the land shown in the exemplars (Ex.PW.1/A and Ex.PW.1/9)
have not increased after the notification. Thus the aforesaid exemplars
are not being considered for the assessment of the market value.
76. From amongst the exemplars exhibited as Ex.PX.1 to Ex.PX.8,
Ex.PX.5 is with respect to the sale of a plot of 555 sq. yards in Green
Park Extension on 28.11.1986 for a price at the rate of Rs.1,711/- per
sq. yd. Ex.PX.6 is the sale deed with regard to the plot in the same
area i.e. Green Park, the plot having a size of 400 sq. yard for a price
at the rate of Rs.2,077/- per sq. yd. Ex.PX.7 and Ex.PX.8 are sale
deeds with respect to the plots falling in Panchsheel Enclave and
Green Park, prior to the date of notification at the rates of Rs.5,000/-
and Rs.6,475/- per sq. yards respectively.
77. Ex.PX.1, Ex.PX.2 and Ex.PX.3 are instances with respect to the
sale of varying sizes of plots in Greater Kailash colony, Part-I. All the
aforesaid sale deeds are prior to the date of notification for prices
varying between Rs.7,553/- to Rs.4,720/- per sq. yd.
78. The highest price is in the list of exemplars is Ex.PX.4 which is
the sale price of 195 sq. yards in Greater Kailash Part-II for a price at
the rate of Rs.13,846/- per sq. yd.
79. Thus, out of the aforesaid sale exemplars, the highest priced
sale deed is Ex.PX.4 referred to above. It may also be noted that with
respect to the property sold in Greater Kailash Part-II, there are two
sale instances i.e. Ex.PX.3 & Ex.PX.4 which were sold roughly in the
same period but the price difference is rather high. Thus Ex.PX.3 is
not being relied upon, as for huge difference in the price, an inference
can be drawn that the location of the land of the aforesaid exemplar
was different from the land of Ex.PX.4.
80. The normal proposition with regard to acceptance of the market
value is on the basis of the highest exemplar. Under certain
circumstances when there are several instances of sales of smaller
lands and prices range in a narrow band-width, an average of the
aforesaid prices can also be taken as representing the correct market
value. However, in the present case, the properties in various
instances fetched different prices in the same area at around the same
time and the price difference between each one of them is fairly high.
Thus, it would not be a safe proposition to take out the average of the
prices of Ex.PX.1 to Ex.PX.4. Be it noted that the purpose of
averaging is only to avoid any miscalculation or taking of any wrong
reference.
81. This Court, therefore, is of the opinion that Ex.PX.4 would
serve as the safest reference because the sale price indicated therein is
the highest with respect to sale in a neighbouring area, a year prior to
the notification in the present case. To bring it at par with the market
price on the date of the notification, if 12% is added to the price
(Rs.13,846/-), the figure comes to Rs.15,464.32/- per sq. yd.
82. Once having assessed the correct reference for computing the
market value, what would be of importance is to find out and
determine the percentage of deductions for development, which would
be required to be applied in the present case.
83. The principles of deductions from the determined market value
of the acquired land are more or less well-settled. Though, as a
judicial precedent, there have been deductions ranging from as low as
10% to as high as 80% but such deductions are predicated on certain
set of principles regarding the same. Broadly speaking, the following
principles operate in the aforestated field:
a. It is not possible to precisely formulate the percentage of
deductions and it would depend upon the facts of each case.
b. Deductions are to be made to account for developmental
activities like building of roads and providing of civic
amenities such as electricity and water.
c. Deductions are required to be made where sale instances
(exemplars) relate to smaller pieces of land compared to the
larger tract of land under acquisition. Deductions are to
account for wastage of land as well.
84. In Land Acquisition Officer vs. Nookala Rajamalu, (2003) 12
SCC 334, the Supreme Court clearly observed that it would be
advisable to apply some deductions on account of exemplars of plots
of smaller size which are relied upon by way of an evidence by the
parties.
85. However, this is not the normal rule and it is not feasible to
predict with exactitude the percentage of deductions which would be
required in a particular case as it is dependent on number of variables.
If an acquired land is already fully developed, having all the amenities
before the acquisition, one can infer that such land would not require
any further expenditure for its development. But for arriving at such a
conclusion viz, that no developmental activity is required to be carried
out, the same has to be proved by leading evidence by the party who
claims or advances the proposition of no deductions. Normally, such
instances are very rare as some developmental activity is bound to
take place after acquisition. Thus the extent of deduction differs in
various cases and the same has to be assessed on the basis of many
facts and circumstances, some of which has been listed above. The
facts of each case/acquisition would be peculiarly different and no
specific mechanism could be formulated. However, the
general/normal rule which has been consistently followed by the
courts is that 1/3rd deductions are made, keeping in mind the
requirement of developmental activities like roads, civic amenities etc.
as also for wastage of land. If the acquired land is a semi-developed
urban area and not an un-developed rural area, the deductions for
development may be as much less i.e. ranging from 10% to 20%
because some basic infrastructure will already be available.
86. From the evidence adduced, namely the depositions of the two
witnesses on behalf of the appellants and one on behalf of the
defendant, what has come to the fore is that the land in question had
earlier been purchased by the company and was later carved out into
small plots after making provisions for roads and other amenities. It
has also come in evidence that all the neighboring areas of the
acquired land are fully developed. There is no evidence to the
contrary on behalf of the respondents.
87. There is no reason for this Court to believe that the quality and
the geographical location of the land would, in any view, be different
from the neighbourhood lands. The fact that IIT Campus lay across
the road and one of the multi storeyed buildings would only be as
distant as 50 sq. yards, are evidences for the land in question being a
fairly developed one. But it cannot be denied that some developmental
activities would definitely be required and that must be accounted for.
88. From the evidence on record, what transpires is that the land in
question was already carved out into smaller plots after making
provisions for civic amenities, roads, etc. by the company.
89. Thus, taking that evidence into account, deduction of 20% from
the market rate assessed would be appropriate for the purposes of
developmental work which includes some of the components of
development, viz. (a) the area required for developmental work; (b)
the cost of development work and (c) wastage of land, etc.
90. If 20% is deducted from Rs.15,464.32/-, the figure would come
to Rs.12,371.456/-.
91. Since fixing compensation with exactitude or with mathematical
accuracy is neither required nor is feasible, therefore, some guesswork
is bound to take place. Calculations are made with reference to a
specific data. The Courts have formulated a concept of "guesstimate"
which is basically an estimate based on a mixture of guess work and
calculations which is a process in itself and does not remain merely a
simple guess work or conjecture. The "guesstimate" provides higher
degree of certainty than simple guess work or conjecture.
92. Thus, keeping in mind that there was an enhancement of
compensation by the Court, with respect to a land acquired in Yusuf
Sarai in the year 1994 at the rate of Rs.12,500/- (Mahanth Atma Ram,
RFA No.204/1999), it would only be fair to round off the figure to
arrive at the price of Rs.12,370/- per sq. yard.
93. The grounds raised in the cross-objection by the respondents are
not tenable and worth acceptance as the mechanism suggested for
coming to the correct market value, viz. adding increment at the rate
of 12% per annum on the price paid by the claimant/appellants for the
same land in the year 1974 at the rate of Rs.30 per sq. yd., is fraught
with serious lacuna and inconsistencies. Such suggested
mechanism/mode does not account for the passage of 13 years in
between the year of purchase and the year of notification for
acquisition and the growth in the value and potentiality of the land
with such geographical location. The rate of growth and development
far surpasses the suggested increment of 12% per annum. The future
potentiality of the land is also to be accounted for.
94. The appeal is, ergo, allowed on the following terms:
a. The appellants shall be entitled to compensation at the rate of
Rs.12,370/- per sq. yd.
b. They would be entitled to solatium at the rate of 30% with
interest.
c. The appellants shall be entitled to 12% per annum on the market
value as additional amount from the date of notification till the
date of possession or award, whichever is earlier, in terms of
section 23(1A) of Land Acquisition Act.
d. They will get interest on the enhanced compensation at the rate
of 9% per annum from the date of award or dispossession
whichever is earlier for one year and thereafter, at the rate of
15% per annum till payment.
95. The cross objection is dismissed.
96. The appeals are disposed of in terms of the above.
CM Appln.7734/2011 in LA.APP.992/2010
1. In view of the petition having been allowed, the application has
become infructuous.
2. The application is disposed of accordingly.
ASHUTOSH KUMAR, J
MARCH 30, 2016/ab
