Gauhati High Court
LA.App./2/2019 on 1 November, 2025
Page 1 of 37
GAHC010001162016
2025:GAU-AS:14806
IN THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
L.A. Appeal No. 2/2019
1. Sri Alok Bagaria,
S/o Late Prahladrai Bagaria,
Resident of -Beheating Tea Estate,
P.S. Barbaruah,
P.O. & District-Dibrugarh, Assam.
2. Sri Ranjit Bagaria,
S/o Late Prahladrai Bagaria,
Resident of -Beheating Tea Estate,
P.S. Barbaruah,
P.O. & District-Dibrugarh, Assam.
.....Appellants
-Versus-
1. The Collector cum Deputy Commissioner,
Dibrugarh,
District-Dibrugarh, Assam,
Pin-781006.
2. The Brahmaputra Craker And Polymer Limited,
Lepetkata, District-Dibrugarh, Assam,
Rep. By its Managing Director,
LA App. No. 2/2019 Page 1
Page 2 of 37
Pin-781006.
3. The State of Assam,
Rep. By its Chief Secretary To the Government of
Assam, Dispur, Guwahati-781006.
......Respondents
For Appellant(s) 1. Mr. D. Das, Senior Advocate
2. Mr. S. Deka, Advocate
For Respondent(s) 1. Mr. D. Mazumder, Additional Advocate General,
Assam.
2. Ms. D.D. Barman, Additional Senior Government
Advocate.
3. Mr. M. Nath, Senior Counsel, for respondent No. 2.
Date of Judgment 01.11.2025
BEFORE
HON‟BLE MR. JUSTICE MRIDUL KUMAR KALITA
JUDGMENT AND ORDER (CAV)
1. Heard Mr. D. Das, the learned Senior Counsel, assisted by
Mr. S. Deka, the learned counsel for the appellants. Also heard Mr.
D. Mazumder, the learned Additional Advocate General, Assam
assisted by Ms. D.D. Barman, the learned Additional Senior
Government Advocate for the State respondents as well as Mr. M.
Nath, the learned Senior Counsel, assisted by Mr. A. Bhattacharjee,
the learned counsel for the respondent No. 2.
LA App. No. 2/2019 Page 2
2. This appeal under Section 54 of the Land Acquisition Act,
1894 has been preferred by the appellants, impugning the
judgment and order dated 21.03.2016, passed in L.A. Case No.
43/2010, along with order dated 16.05.2016, passed in Misc. (J)
Case No. 16/2016 by the Court of the learned District Judge,
Dibrugarh.
3. The facts relevant for consideration of the instant appeal, are
that the predecessor-in-interest of the appellants, namely, Bhawani
Shankar Bagaria was the absolute owner and possessor of a Tea
Estate, namely, Beheating Tea Estate, which consists of several
bighas of land, including land measuring 152 bighas 4 kathas 4
lechas under Dag No. 3,4,5,6,7,22,23,24,71,68,69,70 and 6/498 of
Patta No. 13/176 OR(R) Grant (B) of village Borpathar Kakoti Gaon
of Mankata Khanikar Mouza. The aforesaid land measuring 152
bighas 4 kathas 4 lechas has been acquired by the respondent No.
1 under the provisions of Land Acquisition Act, 1894 for Gas
Cracker Project at Lepetkata, Dibrugarh. The respondent No. 1, i.e.
the Collector-cum-Deputy Commissioner of Dibrugarh District,
acted as the Land Acquisition Officer and respondent No. 2 is the
requisitioning authority for whom the land has been acquired.
4. The predecessor-in-interest of the appellants, namely,
Bhawani Shankar Bagaria purchased the aforesaid land from the
Upper Assam Tea Company vide registered sale deed No.
2560/1960. It has been alleged that during resettlement operation,
LA App. No. 2/2019 Page 3
the revenue authority fraudulently entered the names of five
numbers of person in respect of few bighas of vacant land of the
aforesaid Tea Estate and issued katchakhatian in their names.
However, on an appeal preferred by the predecessor-in-interest of
the appellants the khatian issued in favour of those five persons
were cancelled holding them to be the encroachers.
5. In the year 1987 the aforesaid five persons along with
seventeen others claimed tenancy khatians in their favour before
the Additional Deputy Commissioner, Dibrugarh by filing a Misc.
Case No. 70/1987, which was dismissed by the learned Additional
Deputy Commissioner, Dibrugarh. Against the said rejection order
the aforementioned twenty-two persons preferred a revenue
appeal before the Assam Board of Revenue. However, the appeal
was also dismissed.
6. In the meanwhile, the Government of Assam proposed to
acquire 228 bighas 2 kathas 18 lechas of land of the aforesaid Tea
Estate for Gas Cracker Project and accordingly, on 16.11.2000, a
notification was issued to that effect under the provision of Land
Acquisition Act, 1894.
7. It is alleged that on coming to know about the proposed
acquisition of the aforesaid land some persons forcefully occupied
few bighas of land of the aforesaid Tea Estate. Thereafter, the
predecessor-in-interest of the present appellants preferred twenty
LA App. No. 2/2019 Page 4
numbers of title suit against the aforesaid encroachers before the
Court of the learned Civil Judge, Dibrugarh seeking declaration of
right, title and interest and permanent injunction. Along with the
aforesaid suits, Misc. Cases were also filed praying for injunction
restraining the authority from disbursing the zirat compensation to
the encroachers. Thereafter, the Court granted temporary
injunction as prayed for, by the predecessor-in-interest of the
present appellants.
8. However, subsequently, the aforesaid land acquisition
Notification dated 16.11.2000, was dropped by the respondent No.
1 as the Reliance Industries Limited had declined to start the Gas
Cracker Project.
9. Thereafter, in the year 2006, the Assam Industrial
Development Corporation (AIDC) took the project. Accordingly, the
land measuring 152 bighas 4 kathas 4 lechas of the Beheating Tea
Estate covered by Dag No. 3, 4, 5,6,7,22,23,24,71,68,69,70 and
6/498 of Patta No. 13/176 OR(R) Grant (B) of village Borpathar
Kakoti Gaon of Mankata Khanikar Mouza was acquired for the Gas
Cracker Project at Lepetkata, Dibrugarh. Accordingly, LA Case No.-
12/2006 was registered. Thereafter, Notification under Section 4
(1) of the Land Acquisition Act, 1894 was issued by the
Government vide No. RLA114/2006 dated 06.07.2006.
LA App. No. 2/2019 Page 5
10. During zirat remuneration, some families were found
encroaching few bighas of land and out of those encroachers six
families were residing in the dwelling houses thereof.
11. Thereafter, Notification under Section 6 of the Land
Acquisition Act, 1894 was issued and on 23.03.2007, the award
was notified awarding compensation to the appellants as well as
thirty numbers of trespassers. In pursuant to the aforesaid award
the possession of the land was taken over by the respondent No.
1.
12. The appellants, in the meanwhile, came to know that they
were awarded zirat compensation for tea bushes, shade trees and
staff quarters to the tune of Rs. 85,77,898/- for an area of land
measuring 116 bighas 2 kathas and 9 lechas. On the other hand,
zirat compensation to the tune of Rs. 1,66,11,698/-was paid to the
encroachers for an area of land covering 36 bighas 1 katha 15
lechas which was in their occupation. It is stated by the appellants,
that out of the said amount, only Rs.14,72,611/- was paid to the
encroachers as value of the structures.
13. Further, while awarding compensation, the respondent No. 1
calculated the value of the land at the rate of Rs. 1,00,000/-per
bigha of land and accordingly, awarded Rs. 1,58,84,000/- for land
measuring 152 bighas 4 kathas 4 lechas. The said amount has
been accepted by the appellants under protest. In the meanwhile,
the appellants filed applications in the twenty numbers of title suits
LA App. No. 2/2019 Page 6
filed by them praying for vacating the injunction order for payment
of compensation against zirat value to the encroachers. Thereafter,
the compensation assessed for the encroachers as well as the
appellants were disbursed to them.
14. After receiving the surface/zirat compensation, the
encroachers filed petitions before the respondent No. 1 demanding
full value of their encroached land on the plea that the said land
remained under their possession since long. Thereafter, on the
basis of a detailed report regarding encroachment of the land by
the encroachers submitted by the respondent No. 1 to the
Government, the Government, by order dated 30.05.2007, advised
to invoke Rule 116 of Assam Land and Revenue Regulation, 1886
for cancellation of tea garden land, which is not under tea
cultivation. Accordingly, notices were issued to the predecessor-in-
interest of the present appellants asking them to submit reply on
or before 19.06.2007. Thereafter, the predecessor-in-interest of
the present appellants preferred a writ petition, i.e. WP (C) No.
2868/2007 challenging the order, by which notices were issued to
the predecessor-in-interest of the present appellants.
15. In the said writ petition, by order dated 18.06.2007, the
Court stayed the order dated 30.05.2007 as well as notice dated
04.06.2007 issued to the predecessor-in-interest of the present
appellants. Ultimately, the aforesaid order dated 30.05.2007 and
LA App. No. 2/2019 Page 7
04.06.2007, issued by the Government were set aside in the
aforesaid writ petition.
16. Thereafter, on 30.08.2007, the appellants filed an
application before the respondent No. 1 demanding payment of full
land value of the acquired land to them. However, on being unable
to decide as to whom the full land value is to be paid, the
respondent No. 1, referred the matter to the learned District
Judge, Dibrugarh under Section 30 of the Land Acquisition Act,
1894 for apportioned of land value. Accordingly, Misc. (L.A.) Case
No. 204/2007 was registered.
17. However, the learned District Judge, Dibrugarh, by order
dated 10.06.2008, held that the respondent No. 1 had acted
beyond his jurisdiction by referring the matter for apportionment
and return the reference to the respondent No. 1 for taking
necessary steps as per law. Thereafter, the respondent No. 1
directed to release the land value to the appellants, which they
accepted under protest. Thereafter, being aggrieved by
compensation assessed by the respondent No. 1 on different
counts, the predecessor-in-interest of the present appellants
prayed for enhancement of zirat (surface) compensation as well as
land compensation.
18. On this, the matter was referred under Section 18 of the
Land Acquisition Act, 1894 to the learned District Judge, Dibrugarh
LA App. No. 2/2019 Page 8
and, accordingly, L.A. Case No. 43/2010 was registered and
following issues for determination were framed by the Court:-
(i) "Whether the petitioner is entitled to get
compensation of Rs.6,40,000/- as per market value
for his land measuring 1 bigha 2 kathas?"
(ii) "Whether the appellants are entitled to get
compensation and other damages as prayed for?"
(iii) "To what other relief the appellants are entitled to?"
19. The appellants as petitioners adduced evidence and
exhibited several documents to prove that the market value of land
is much higher than the value awarded to them by the respondent
No. 1, by the award dated 23.03.2007.
20. Thereafter, after considering the materials before it, as well
as the submissions made by the learned counsel for both sides,
the Court of the learned District Judge, Dibrugarh, by judgment
and order dated 21.03.2016, passed in L.A. Case No.43/2010,
enhanced the compensation at the rate of Rs. 3,00,000/- per bigha
(including the zirat) for land measuring 152 bighas 4 kathas 4
lechas and as the compensation in respect of zirat was already
paid to the appellants, it directed to pay the enhanced amount
after deducting the compensation in respect of zirat which has
been already paid.
LA App. No. 2/2019 Page 9
21. The Reference Court also directed to pay an amount of Rs.
1,40,000/- for land measuring 1 bigha 2 kathas of severed land at
the rate of 1/3rd of the rate at which compensation was awarded
for per bigha of land. It also awarded interest under Section 28 of
the Land Acquisition Act, 1894 at the rate of 9% per annum on the
amount of compensation awarded by the Court less the
compensation for zirat which has already been paid, i.e. in excess
of amount awarded as compensation by the collector w.e.f. the
date of taking possession upto 1 year and thereafter, at the rate of
15 % per annum till payment into Court and the interest portion of
the payment already paid to the claimant is to be accordingly
adjusted.
22. By the impugned judgment, the Reference Court also
awarded the interest under Section 34 at the rate of 9% on the
compensation awarded by the collector not paid at the time of
taking possession w.e.f. date of taking possession upto 1 year and
thereafter, at the rate of 15% per annum till date of payment after
adjusting payment made towards interest if any.
23. Thereafter, the present appellants taking a plea of some
arithmetical error in computation of amount of compensation to be
paid to the appellants as well as taking the plea of non-payment of
solatium at the rate of 30% in terms of Section 23(2) of the Land
Acquisition Act, 1894, preferred a review application under Order
LA App. No. 2/2019 Page 10
47 Rule 1 read with Section 151 of the Code of Civil Procedure,
1908 against the judgment dated 21.03.2016. The said review
application was registered as Misc. (J) Case No. 16/2016.
Thereafter, the Reference Court by order dated 16.05.2016,
passed in Misc. (J) Case No. 16/2016 was pleased to review the
impugned judgment and order dated 21.03.2016 by rectifying the
errors which were point out by the petitioners.
24. Mr. D. Das, the learned Senior Counsel for the appellants has
submitted that in pursuant to the impugned judgment dated
21.03.2016 passed in L.A. Case No. 43/2010, as well as the
impugned order dated 16.05.2016 passed in Misc. (J) Case
No.16/2016, the appellants are entitled to following amounts: -
Sl.No. Particulars Amount
1. For 152B-4K-04L of = Rs.4,58,52,000/-
land @ Rs.3 Lakh per
Bigha
2. For 1/3rd of 1B-2K of = Rs. 1,40,000/-
severed land @Rs. 3
Lakh per bigha
3. Total = Rs.4,59,92,000/-
4. For Solatium u/s 23(2) = Rs. 1,37,97,600/-
@30% on Rs.
4,59,92,000/-
LA App. No. 2/2019 Page 11
5. For statutory interest = Rs. 55,19,040/-
u/s 23(1A)@12% on
Rs. 4,59,92,000/-
6. Total = Rs. 6,53,08,640/-
7. Less the Zirat Amount = Rs.85,77,898/-
already paid
8. Total = 5,67,30,742/-
9. Less Land value = Rs. 2,17,03,280/-
already paid
10. Balance amount of = Rs. 3,50,27,462/-
compensation
awarded but to be
paid
11. Interest u/s 34 @ 9% = Rs.10,22,135/-
on Rs. 2,17,03,280/-
w.e.f. 01/03/2008 to
28/02/2008 (191
days)
12. Interest u/s 28 on Rs.
3.50,27,462/-
13. @9% w.e.f. = Rs. 31,52,471/-
01/03/2008 to
28/02/2009 (1 year)
14. @15% = Rs. 3,67,78,835/-
w.e.f.01/03/2009 to
28/02/2016 (7 year)
LA App. No. 2/2019 Page 12
15. @15% = Rs. 17,51,373/-
w.e.f.01/03/2016 to
30.06.2016 (4
months)
16. Cost awarded u/s 27 = Rs. 5000/-
of the Act 1894
17. Grand total = Rs. 7,77,37,276/-
25. Mr. D. Das, the learned Senior Counsel for the appellants has
submitted that though by the impugned judgment dated
21.03.2016 read with Order dated 16.05.2016, passed in review
application, the Reference Court had partially enhanced the land
value of the acquired land from Rs. 1,00,000/- per bigha to Rs.
3,00,000/-per bigha. However, it had clubbed both the
zirat/surface compensation as well as compensation against value
of the land which is against the law. He submits that the
compensation against zirat and land are two different components
which cannot be clubbed together and both heads must be
calculated separately.
26. The learned Senior Counsel for the appellants has submitted
that while assessing the market value of the acquired land, the
Reference Court failed to take into consideration Exhibit-44, 45, 46
and 47 in its true perspective, in as much as by Exhibit-47, the
claimant's/appellants sold a contiguous plot of land to the then
LA App. No. 2/2019 Page 13
Registrar, Dibrugarh University, in which the value of the sold land
was shown to be Rs.6,00,000/-per bigha.
27. The learned Senior Counsel for the appellants has submitted
that this evidence of comparable sale instance of a contiguous plot
of land clearly establishes that the market value of the acquired
land was much higher than what has been awarded to the
appellants. He further submits that while assessing the market
value of the acquired land, the potentiality of the acquired land
was also not taken into consideration in its proper perspective.
28. He submits that the acquired land is nearest to National
Highway No. 37 and is in the proximity of Borbaruah, a fast-
growing satellite township near Dibrugarh University, the industrial
estate and railway junction connecting Bogibeel bridge from
Dibrugarh and Moran side is also nearby. He submits that these
factors were not taken into consideration by the Reference Court.
29. The learned Senior Counsel for the appellants further
submits that by the impugned award, an amount of Rs.
85,77,898/-was awarded to the appellants as the value for zirat for
land measuring 116 bighas 2 kathas 9 lechas, whereas to the
encroachers over land measuring 36 bighas 1 katha 15 lechas, a
much higher amount, i.e. Rs. 1,66,11,698/- was awarded at the
rate of Rs.4,56,993/-per bigha.
LA App. No. 2/2019 Page 14
30. He submits that even computing at the rate for which the
value of zirat was given to the encroachers, i.e. at the rate of Rs.
4,56,993/- per bigha of land, the appellants are entitled to zirat
compensation of Rs.5,32,35,122/- instead of Rs.85,77,898/-.
31. The learned Senior Counsel for the appellants has also
submitted that the appellants were paid compensation for tea
bushes at the rate of Rs. 39.33 per tea bush, whereas, this Court
in the case of Socklating Tea Co. Limited paid the compensation
for tea bushes at the rate of Rs. 150/- per tea bush and Rs. 800/-
per shade trees.
32. The learned Senior Counsel submitted that the appellants
had 1,55,229 numbers of tea bushes, 762 numbers of matured
shade trees, 23 rolls of fencing, 50 numbers of fencing posts and 9
culverts and, according, to him the appellants are entitled to
Rs.2,32,84,350/-as compensation for tea bushes and also entitled
to Rs.6,09,600/- for shade trees.
33. The learned Senior Counsel for the appellants has also
submitted that the Reference Court had also erred in granting
compensation for severed land measuring 1 bigha 2 kathas @ 1/3rd
of the rate assessed by it for the other land. He submits that after
acquisition of the remaining land, the severed land measuring
about 1 bigha 2 katas has become useless for the appellants and,
therefore, they ought to have been given compensation
LA App. No. 2/2019 Page 15
@equivalent to the rate at which the acquired land is valued and
not at 1/3rd of the said rate.
34. The learned Senior Counsel for the appellants has also
submitted that that the Reference Court also failed to take into
consideration the fact that production of tea has been reduced
considerably resulting into a huge financial loss to the appellants
which ought to have been compensated under Section
23(1)fourthly of the Land Acquisition Act, 1894, however, the
Reference Court did not do so.
35. In support of his submissions the learned Senior Counsel for
the appellants has cited following rulings:-
(1) "Chimanlal Hargovinddas Vs. The Special Land Acquisition
Officer, Pune" reported in "(1988)3 SCC 751;"
(2) "Besco Limited Vs. State of Haryana & Ors." reported in "2023 0
Supreme SC 785;"
(3) "Director Urban Local Bodies & Anr. Vs. Hans Raj & Ors."
reported in "2023 0 Supreme J & K 184;"
(4) "Rezia Khatun Bibi & Ors. Vs. The State of Assam" reported in
"MANU/GH/0588/2015;"
(5) "Assam Electricity Board Vs. On death of Jethua Miki, His Son"
reported in "2004 3GLR 73;"
(6) "Land Acquisition Officer, Eluru & Ors. Vs. Jasti Rohini & Ors.,"
reported in "(1995)1 SCC 717;"
LA App. No. 2/2019 Page 16
(7) "Sujoy Chowdhury & Ors. Vs. Chief Executive Office, Agartala
Municipal Corporation & Ors." reported in" MANU/TR / 0035/202
1;"
(8) "Himmat Singh & Ors. Vs. State of M.P. & Ors." reported in
"(2014) 14 SCC 466;"
(9) "Periyar and Pareekanni Rubbers Ltd. Vs. State of Kerala"
reported in "(1991) 4 SCC 195;"
(10) "Major General Kapil Mehra And Others Vs. Union of India And
Another" reported in "(2015) 2 SCC 262;"
(11) "Assam Plywood Limited Vs. Officers & Ors." reported in
"(2018 )4 GLT 681;"
(12) "Mehta Ravindrarai Ajitrai (Deceased) by Lrs and Ors. Vs.
State of Gujarat" reported in "(1989)4 SCC 250;"
(13) "State of UP Vs. Jitendra Kumar & Ors." reported in "AIR 1982
SC 876;"
(14) "Special Land Acquisition Officer and Ors. Vs. Siddappa Omanna
Tumari and Ors." reported in "1995 Supp 2 SCC 168."
36. On the other hand, Mr. D. Mazumder, the learned Additional
Advocate General, Assam appearing for the State respondent has
submitted that the Reference Court has correctly assessed the
compensation to be given to the appellants as well as the
encroachers on the basis of well-settled principles and the
evidence available on record.
37. The learned Additional Advocate General has submitted that
the Reference Court rightly declined to rely on the rate at which
LA App. No. 2/2019 Page 17
the claimant had sold his plot of land to one, Mr. K.K. Deka, by
Exhibit-47 on 25.01.2007, as it is apparent that sale was made
after the Notification under Section 4 of the Land Acquisition Act,
1894 which was issued on 11.07.2006 in respect of the acquired
land.
38. He submits that the Reference Court also is correct in
rejecting the rate projected for by the Exhibit-47 as it was the
claimant himself, who has as a vendor sold land contiguous to the
acquired land only with a view to inflating the market price of land
of that area.
39. The learned Additional Advocate General has also submitted
that the Reference Court was correct in relying on Exhibit-44,
which is a communication from Joint Secretary to the Government
of Assam Revenue and Disaster Management Department, by
which, it granted approval for sale of a plot of land of the
Beheating Tea Estate at a valuation of Rs. 3,00,000/- per bigha.
40. The learned Additional Advocate General has also submitted
that the PW-5, during his cross-examination has confirmed that
the aforesaid valuation of land at the rate of Rs. 3,00,000/- per
bigha was still standing when the PW-5 was examined.
41. He submits that the Reference Court was correct in not
granting additional amount as value of standing bushes, shade
tree, structures, etc. as zirat compensation payable to the claimant
LA App. No. 2/2019 Page 18
as the same was included in the value of the land assessed by the
collector. He, therefore, submits that the Reference Court has
rightly assessed the rate of compensation of the acquired land at
Rs.3,00,000/- per bigha minus the zirat compensation already paid
for. In support of his submission, the learned Additional Advocate
General, Assam has cited a ruling of the Apex Court in the case of
"General Manager, ONGC Vs. Ramesh Bhai Jivan Bhai Patel & Ano."
reported in "(2008) 14 SCC 745."
42. The learned Additional Advocate General has also submitted
that the compensation for severed land of 1 bigha, 2 kathas
@1/3rd rate of the compensation assessed for acquired land has
been correctly made by the Reference Court as the appellants
continue to remain the owners of the said plot of land and they
can also alienate the said land for consideration or otherwise use it
in any manner. He, therefore, submits that the Reference Court
was correct in ascertaining the compensation amount for severed
land @1/3rd of rate for the remaining acquired land.
43. As regards assessment of rate of compensation for the zirat,
the learned Additional Advocate General has submitted that the
Reference Court has correctly not interfered with the assessment
made by the collector based on prevailing Government rates for
compensation for tea bushes as well as other assets, trees and
crops damaged. He submits that in respect of tea bushes, the rate
of compensation differs according to the age of the tea bushes and
LA App. No. 2/2019 Page 19
the assessment for loss of zirat was correctly made based on the
prevailing rates at that point of time. In support of his submission,
he has produced the original records pertaining to the assessment
of compensation for zirats in respect of the acquired land. The
learned Additional Advocate General accordingly submits that the
Reference Court has correctly assessed the compensation for the
acquired land and has done so based on settled principles of law
and the evidence available on record. He, therefore, submits that
the impugned judgment and award do not warrant any
interference by this Court.
44. I have considered the submissions made by the learned
counsel for both sides and have gone through the materials
available on record. I have also gone through the records on the
basis of which assessment for zirat compensation was made by the
collector of the Dibrugarh District, which was requisitioned in
connection of with this Land Acquisition Appeal. I have also gone
through the rulings cited by the learned counsel for both sides in
support of their submissions.
45. In this appeal, the following points may be formulated for
determination-
(a) "Whether the Reference Court was correct in assessing
the market value of the acquired land @ Rs. 3,00,000/-
per bigha?"
LA App. No. 2/2019 Page 20
(b) "Whether the Reference Court was right in assessing
the compensation amount for the severed land of 1
bigha 2 kathas @1/3rd value of the rate at which the
acquired land was assessed?"
(c) "Whether the Reference Court was correct in awarding
zirat compensation of Rs. 85,77,898/- only to the
appellants?"
(d) "Whether the Reference Court was correct in deducting
the zirat value which was already paid to the appellants
from the enhanced value of the acquired land assessed
by it while paying compensation for land acquired by
the respondent No.1?"
46. Let us discuss the first point for determination, i.e., as to
whether the enhanced value of the land acquired by respondent
No.1 has been correctly assessed by the Reference Court or not.
47. As regards how to assess reasonable market value of the
acquired land, the Apex Court of India has observed as follows in
the case of "Major General Kapil Mehra And Others Vs. Union of
India And Another"(supra):-
10. The first question that emergesis,
what would be the reasonable market value
which the acquired lands are capable of
fetching. While fixing the market value of the
LA App. No. 2/2019 Page 21
acquired land, the land acquisition officer is
required to keep in mind the following factors:
(i) existing geographical situation of the land;
(ii) existing use of the land; (iii) already
available advantages, like proximity to
National or State Highway or road and/or
developed area; and (iv) market value of other
land situated in the same locality/village/area
or adjacent or very near to the acquired land.
11. The standard method of
determination of the market value of any
acquired land is by the valuer evaluating the
land on the date of valuation publication of
notification under Section 4(1) of the Act,
acting as a hypothetical purchaser willing to
purchase the land in open market at the
prevailing price on that day, from a seller
willing to sell such land at a reasonable price.
Thus, the market value is determined with
reference to the open market sale of
comparable land in the neighbourhood, by a
willing seller to a willing buyer, on or before
the date of preliminary notification, as that
would give a fair indication of the market
value.
12. In Viluben Jhalejar Contractor v. State of
Gujarat [(2005) 4 SCC 789] , this Court laid
down the following principles for
determination of market value of the acquired
land : (SCC pp. 796-97, paras 17-20)
LA App. No. 2/2019 Page 22
"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
evidenceshave 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."
13. The courts adopt comparable sales method
for valuation of land while fixing the market
LA App. No. 2/2019 Page 23
value of the acquired land. Comparable sales
method of valuation is preferred rather than
methods of valuation of land such as
capitalisation of net income method or expert
opinion method, because it furnishes the
evidence for determination of the market
value of the acquired land at which the willing
purchaser would pay for the acquired land if it
had been sold in the open market at the time
of issuance of notification under Section 4 of
the Act.
14. While taking comparable sales method of
valuation of land for fixing the market value of
the acquired land, there are certain factors
which are required to be satisfied and only on
fulfilment of those factors, the compensation
can be awarded according to the value of the
land stated in the sale deeds. In Karnataka
Urban Water Supply and Drainage
Board v. K.S. Gangadharappa [(2009) 11 SCC
164 : (2009) 4 SCC (Civ) 483] , factors which
merit consideration as comparable sales are,
inter alia, laid down as under : (SCC p. 168,
para 8)
"8. „16. "9. It can be broadly stated that the
element of speculation is reduced to minimum
if the underlying principles of fixation of
market value with reference to comparable
sales are made:
(i) when sale is within a reasonable time of
the date of issuance of notification under
Section 4(1);
(ii) it should be a bona fide transaction;
(iii) it should be of the land acquired or of the
land adjacent to the land acquired; and
(iv) it should possess similar advantages.
LA App. No. 2/2019 Page 24
10. It is only when these factors are present,
it can merit a consideration as a comparable
case (see Land Acquisition Officer v. T.
Adinarayan Setty [AIR 1959 SC 429] .)"
These aspects have been highlighted
in Ravinder Narain v. Union of India [(2003) 4
SCC 481], SCC p. 484, paras 9-10. [Ed. : As
observed in LDA v. Krishna Gopal Lahoti,
(2008) 1 SCC 554, pp. 557-58, para16 :
(2008) 1 SCC (Civ) 352.] "
48. In the instant case, the preliminary notification under Section
4 (1) of the Land Acquisition Act, 1894 was published on 8th of July
2006 whereas the sale deed (Exhibit-47) on which the appellants
are relying for an enhanced rate of compensation was executed on
25.01.2007. The Reference Court while adopting comparable sale
method for assessing the value of the acquired land, examined the
post Notification sale deed (Exihibit-47) relied upon by the
appellants on three settled principles of law, i.e., (1) the sale deed
has to be very approximate for the date of Notification, (2) it has
to be genuine, (3) the acquisition itself has not motivated the
purchaser to pay a higher price on account of resultant
improvement in development prospects. In the instant case, the
Reference Court has observed that since the appellant was himself
the vendor of the sale deed which he is relying on to get an
enhanced rate of compensation for the acquired land, it cannot be
ruled out that the purchaser was motivated at the time of its
execution itself to pay a higher price. The reasoning given by the
Reference Court for not relying on Exhibit-47 may not be regarded
LA App. No. 2/2019 Page 25
as arbitrary rather it appeared to be justified in as much as no
other sale deed except the one executed by the appellant himself
was produced before the Reference Court to justify valuation of
the acquired land at the escalated price suggested by the
appellant.
49. One aspect which the Reference Court did not take into
consideration, though, it would have resulted into same conclusion
arrived at by the Reference Court is the fact that when the sale
deed which the appellants were relying is executed not on a date
which is not very proximate to the date of issuance of Notification
under Section 4 of the Act, it must be shown before the Court by
reliable evidence that there was no appreciation of value of land
during the period of issue of Notification under Section 4 of the Act
and the date of transaction of sale which is sought to be relied
upon for the purpose of expression of market value of the acquired
land.
50. In this regard the Apex Court has observed in the case of
"Karan Singh and Others Vs. Union of India" reported in "(1997)8
SCC 186" as follows: -
"5. Before we advert to the argument
raised on behalf of the appellants, it has to
be borne in mind while deciding these
appeals, this Court is not required to
reappraise the evidences which were
considered by the courts below. But what
concerns us is whether correct or legal
principles were applied in arriving at the
market value of the acquired land in
LA App. No. 2/2019 Page 26
awarding compensation to the claimants.
When a land is compulsorily acquired, what
is basically required to be done for awarding
compensation is to arrive at the market
value of the land on the date of the
notification under Section 4 of the Act. The
market value of a piece of land for
determining compensation under Section 23
of the Act would be the price at which the
vendor and the vendee (buyer and seller) are
willing to sell or purchase the land. The
consideration in terms of price received for
land under bona fide transaction on the date
of notification issued under Section 4 of the
Act or a few days before or after the issue of
notification under Section 4 of the Act
generally shows the market value of the
acquired land and the market value of the
acquired land has to be assessed in terms of
those transactions. The sale of land on or
about the issue of notification under Section
4 of the Act is stated to be the best piece of
evidence for determining the market value of
the acquired land. Often evidence on
transaction of sale of land on or a few days
before the notification under Section 4 is not
available. In the absence of such evidence
contemporaneous transactions in respect of
lands which had similar advantages and
disadvantages would be a good piece of
evidence for determining the market value of
the acquired land. In case the same is not
also available, the other transaction of land
having similar advantages nearer to the date
of notification under Section 4 of the Act
would guide in determination of the market
value of acquired land. In the present case,
in the absence of evidence of any transaction
or sale of land on the date of issue of
notification under Section 4 of the Act, the
Court would be justified in relying upon the
transaction of sale of land having similar
advantages nearer to the notification issued
LA App. No. 2/2019 Page 27
under Section 4 of the Act which can be
taken as a guide for determining the market
value of the acquired land and compensation
to be awarded to the claimants. Thus the
transaction of sale of land after the issue of
notification under Section 4 of the Act can
guide the court in fixing the market value of
the acquired lands under certain conditions.
In the case of Administrator General of
W.B. v. Collector [(1988) 2 SCC 150 : AIR
1988 SC 943] it was held thus: (SCC p. 158,
para 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."
6. It is, therefore, no longer in doubt
that in the absence of any evidence of sale of
land on the date of issue of notification
under Section 4 of the Act, under certain
conditions the post-notification transactions
of sales of land can be relied upon in
determining the market value of the
acquired land. One of the conditions being
that it must be shown before the Court by
reliable evidence that there was no
appreciation of the value of land during the
period of issue of notification under Section
4 of the Act and the date of transaction of
sale which is sought to be relied upon for the
purposes of fixing the market value of the
acquired land. It has also to be borne in
mind that if the claimant relies on any post-
notification transaction, the burden is upon
LA App. No. 2/2019 Page 28
him to show that the price of the land
remained static and there was no upward
rise in the price of the land during the period
of issue of notification under Section 4 of the
Act and the date of transaction of sale. In
the present case what we find is that
excepting filing of Exts. A-8, A-9, A-10, A-12
and A-13, no effort was made by the
claimants to establish before the Court that
there was no upward rise in the price or
increase in the price of land in Village Gharoli
and NOIDA during the period between the
issue of notification under Section 4 and date
of execution of the exhibits sought to be
relied upon."
51. From the observation of the Apex Court made in the
aforesaid judgment, there remains no doubt that in case if the
appellants relies on any post notification transaction, the burden is
upon them to show that the price of land remain static and there
was no upward rise in the price of land during the period of
issuance of notification under Section 4 of the Act and the date of
the transaction of the sale, however, in the present case, we do
not find any material on record produced by the appellants to
establish before the Reference Court that there was no upward
rise in prices or increase in price of the land, rather Exhibit-44
shows that the sale permission for sale of a plot of land of the
appellant's Tea Estate was approved at a valuation of Rs.
3,00,000/-per bigha. This Court is of the considered opinion that
the Reference Court has also rightly declined to rely on Exhibit-43,
as same was not proved in accordance with law. The reasoning
LA App. No. 2/2019 Page 29
given by the Reference Court, in the considered opinion of this
Court cannot be faulted on any count.
52. In the instant case, except for the Exhibit-47, no other sale
deed has been exhibited by the appellants to show that what the
rate of the acquired land was at the time of issuance of
Notification under Section 4 of the Act. The Exhibit-47 was also
executed in the year 2007, in the month of January, i.e. about six
months after the date of Notification under Section 4 of the Act.
There is no effort on the part of the appellants to establish before
the Reference Court that there was no upward rise of prices for
increase of price of acquired land during the period between the
issue of Notification under Section 4 and the date of exhibition of
Exhibit-47, of which the appellant was himself the vendor. Under
such circumstances, this Court is of considered opinion that the
Reference Court was correct in assessing the market value of the
acquired land at the rate of Rs. 3,00,000/- per bigha on the basis
of Exhibit-47 exhibited by the appellants themselves. The
aforementioned first point for determination is, accordingly,
decided in affirmative against the appellants.
53. As regards the second point for determination as to whether
the Reference Court was right in assessing the compensation of for
the severed land at the rate of 1/3rd of the value of the rate
assessed for the acquired land, it appears that the plea of the
appellants is that the said land has become useless for them,
LA App. No. 2/2019 Page 30
therefore, they are entitled to compensation at the rate equivalent
to the rate at which the acquired land has been valued. However,
the Reference Court has justified the rate assessed by it on the
ground that the appellants continue to remain as owners of the
severed land and they are free to alienate the severed land for
consideration or put the same for some other use. Merely, because
the severed land may not be used for the purpose for which it was
used earlier, i.e., tea cultivation, it is illogical to conclude that the
said land has lost its entire value. A plot of land measuring 24 feet
in breadth and 830 feet in length may not be regarded as totally
useless for any purpose. The reasoning given by the Reference
Court does not appear to be unjustified on any count as in spite of
the fact that the said land remains under the ownership of the
appellants, only for the reason, that it may not be put to same use
as it was used earlier before acquisition of the acquired land, does
not becomes totally valueless. This Court is, therefore, of the
considered opinion that the value of the severed land assessed by
the Reference Court may not be regarded as arbitrary and without
any justification. This Court, therefore, is not inclined to interfere
in the valuation of the severed land assessed by the Reference
Court.
54. Now, let us discuss the third point for determination as to
whether the Reference Court was correct in awarding the zirat
compensation of Rs. 85,77,898/- only to the appellants.
LA App. No. 2/2019 Page 31
55. The main contention of the appellants while agitating the
quantum of compensation awarded to them against zirat is that
the compensation for zirat over 116 bighas 2 kathas 9 lechas of
land was assessed at Rs. 85,77,898/- only, whereas, the zirat
compensation to the encroacher for a much lesser area of land
measuring 36 bighas 1 katha 15 lechas was assessed at Rs.
1,66,11,698/- which comes to Rs. 4,56,993/- per bigha of land.
56. The zirat compensation is assessed mainly on the basis of
the damage caused to the standing crops, fruit bearing trees, non-
fruit bearing trees, any other structure of improvement (like
culvert, sheds, well) which were there in the acquired land. The
said assessment depends upon the number of zirats which
suffered damage due to land acquisition, hence, the quantum of
compensation regarding zirat may not depend upon the area of
acquired land but on the basis of the numbers of standing crops,
trees, structures etc. which got damaged due to land acquisition.
57. In the instant case, on perusal of the original record of
assessment of zirat compensation made in connection with land of
the appellants which has been acquired shows that the tea bushes
which were more than 14 years of age, were assessed at the rate
of Rs. 39.93 whereas, tea bushes of five years of age were
assessed at the rate of Rs. 43.44. Similarly, the shade trees of
different species were assessed at the rate of Rs. 2665/- per big
LA App. No. 2/2019 Page 32
sirish tree, Rs. 160/- per small sirish tree, Rs. 2665/- per big azar
tree, Rs. 293/- per big firewood tree, Rs. 18/- per small firewood
tree, as well as Rs. 180/- per unit of fencing roll and iron post. The
rates at which zirat compensation was assessed conformed to the
rate proposed for zirat compensation of the affected land due to
land acquisition for the proposed gas cracker project. It also
appears that number of zirats in the land acquired which was
under the possession of encroachers is much more than the
acquired land of the appellants as per the assessment record
produced by the State respondent. Hence, the plea that for larger
area of acquired land, the appellants ought to have got more zirat
compensation is not based on materials on record and does not
merit consideration. This point for determination is, accordingly,
decided against the appellants.
58. As regards the fourth and final point for determination, i.e.,
as to whether the Reference Court was correct in deducting the
zirat value which was already paid to the appellants from the
enhanced value of the acquired land assessed by it while paying
compensation for land acquired by the respondent No.1, it appears
that the Reference Court while assessing the value of the acquired
land observed that the sale value of the land would naturally
include value of all standing trees, shade trees, unless the
evidence is led to show that the acquired land is a vacant plot of
land and, therefore, the Reference Court, though increased the
LA App. No. 2/2019 Page 33
valuation of acquired land to Rs. 3,00,000/- per bigha from Rs.
1,00,000/- per bigha, however, it directed that no additional
amount for standing bushes, shade trees, structures etc. would be
payable to the appellants at zirat compensation, therefore, the
amount of zirat compensation of Rs.85,77,898/-only, which was
already paid to the appellants, was directed to be deducted from
the total compensation assessed against the market value of the
acquired land.
59. This Court, is, unable to persuade itself with the reasoning of
the Reference Court in deducting the already paid compensation
against zirat component from the market value of the land
assessed by respondent No. 1. Section 23 of the Land Acquisition
Act, 1894 provides as follows: -
"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 Collectors taking possession thereof;
LA App. No. 2/2019 Page 34
thirdly, the damage (if any) sustained by the
person interested, at the time of the Collectors
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 Collectors
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 Collectors taking
possession of the land.
[(1-A) In addition to the market value of the land,
as above provided, the Court shall in every case
award an amount calculated at the rate of twelve
per centum per annum on such market value for
the period commencing on and from the date of the
publication of the notification under section 4, sub-
section (1), in respect of such land to the date of
the award of the Collector or the date of taking
possession of the land, whichever is earlier.
LA App. No. 2/2019 Page 35
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 compulsory nature of the
acquisition."
60. On perusal of the aforesaid provision, it appears that as per
Section 23 (1) of the Land Acquisition Act, 1894 the heads of
compensation against market value of land and damage to zirat
are shown separately under "first" and "secondly" respectively of
Section 23(1) of the Land Acquisition Act, 1894 which leaves no
ambiguity regarding the fact that the law suffered due to
component of zirat must be assessed separately from the market
value of the land itself. Hence, the compensation assessed against
the damage caused to zirat cannot be deducted from the
compensation assessed against the market value of the land at the
date of notification under Section 4 of the Act. Therefore, the
impugned judgment and award of the Reference Court, to the
extent of it deducting the zirat compensation of Rs. 85,77,898/-
only already paid to the appellants from the total compensation for
the acquired land at the market value of Rs. 3,00,000/- per bigha
LA App. No. 2/2019 Page 36
is found to be contrary to the statutory provision and accordingly
hereby set aside.
61. The appellants are, therefore, entitled to the amount which
was deducted as zirat compensation from the total compensation
against the market value of the acquired land in pursuant to the
impugned judgment and order, along with the interests thereon at
the rates prescribed by the Land Acquisition Act, 1894.
62. In view of the above discussions and reasons, the instant
appeal is partly allowed to the extent as indicated in the foregoing
paragraphs.
63. Send back the records which were requisitioned in
connection with this case along with a copy of this judgment.
JUDGE
Comparing Assistant
LA App. No. 2/2019 Page 37
