Madhya Pradesh High Court
Indira Sagar Project vs Ramesh on 16 June, 2025
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO.2025:MPHC-IND:14117
1
F.A. No.226 of 2017 & Others
IN THE HIGH COURT OF MADHYA PRADESH
AT I N D O R E
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
FIRST APPEAL No. 226 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
RAMJIWAN AND OTHERS
WITH
FIRST APPEAL No. 228 of 2017
LAND ACQUISITION AND REHABILITATIN OFFICER AND OTHERS
Versus
SATYA NARAYAN AND OTHERS
FIRST APPEAL No. 238 of 2017
INDIRA SAGAR PROJECT AND OTHERS
Versus
OMPRAKASH AND OTHERS
FIRST APPEAL No. 239 of 2017
INDIRA SAGAR PROJECT AND OTHERS
Versus
REWA RAM AND OTHERS
FIRST APPEAL No. 240 of 2017
INDIRA SAGAR PROJECT AND OTHERS
Versus
RAMESH AND OTHERS
FIRST APPEAL No. 298 of 2017
INDIRA SAGAR PROJECT AND OTHERS
Versus
RUGHNATHSINGH AND OTHERS
Signature Not Verified
Signed by: RAVI PRAKASH
Signing time: 16-06-2025
18:59:43
NEUTRAL CITATION NO.2025:MPHC-IND:14117
2
F.A. No.226 of 2017 & Others
FIRST APPEAL No. 299 of 2017
INDIRA SAGAR PROJECT AND OTHERS
Versus
KARANSINGH AND OTHERS
FIRST APPEAL No. 300 of 2017
INDIRA SAGAR PROJECT AND OTHERS
Versus
DASHRATH AND OTHERS
FIRST APPEAL No. 302 of 2017
INDIRA SAGAR PROJECT AND OTHERS
Versus
TULSIRAM AND OTHERS
FIRST APPEAL No. 303 of 2017
INDIRA SAGAR PROJECT AND OTHERS
Versus
NEENA BAI AND OTHERS
FIRST APPEAL No. 455 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
RAMESH CHAND AND OTHERS
FIRST APPEAL No. 456 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
RANCHOD AND OTHERS
FIRST APPEAL No. 457 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
HARI SINGH AND OTHERS
Signature Not Verified
Signed by: RAVI PRAKASH
Signing time: 16-06-2025
18:59:43
NEUTRAL CITATION NO.2025:MPHC-IND:14117
3
F.A. No.226 of 2017 & Others
FIRST APPEAL No. 458 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
POOJA DEVI AND OTHERS
FIRST APPEAL No. 459 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
RANJEET SINGH AND OTHERS
FIRST APPEAL No. 460 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
INDARSINGH AND OTHERS
FIRST APPEAL No. 461 of 2017
LAND ACQUISITION AND REHABILITATON OFFICER AND OTHERS
Versus
MANGILAL AND OTHERS
FIRST APPEAL No. 462 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
SONU AND OTHERS
FIRST APPEAL No. 898 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
RAMESHWAR AND OTHERS
FIRST APPEAL No. 899 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
NARAYAN AND OTHERS
FIRST APPEAL No. 915 of 2017
Signature Not Verified
Signed by: RAVI PRAKASH
Signing time: 16-06-2025
18:59:43
NEUTRAL CITATION NO.2025:MPHC-IND:14117
4
F.A. No.226 of 2017 & Others
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
SARDAR SINGH AND OTHERS
FIRST APPEAL No. 919 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
KISHANLAL AND OTHERS
FIRST APPEAL No. 920 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
RAMVILAS AND OTHERS
FIRST APPEAL No. 947 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
SANTOSH AND OTHERS
FIRST APPEAL No. 948 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
UMMED SINGH AND OTHERS
FIRST APPEAL No. 949 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
LOKESH AND OTHERS
FIRST APPEAL No. 950 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
NARMADA PRASAD AND OTHERS
FIRST APPEAL No. 952 of 2017
Signature Not Verified
Signed by: RAVI PRAKASH
Signing time: 16-06-2025
18:59:43
NEUTRAL CITATION NO.2025:MPHC-IND:14117
5
F.A. No.226 of 2017 & Others
LAND ACQUSITION AND REHABILITATION OFFICER AND OTHERS
Versus
RAMPRASAD AND OTHERS
FIRST APPEAL No. 953 of 2017
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
RAMVILAS AND OTHERS
FIRST APPEAL No. 1376 of 2018
LAND ACQUISITION AND REHABILITATION OFFIDCER INDIRA
SAGAR PROJECT AND OTHERS
Versus
TEJRAM AND OTHERS
FIRST APPEAL No. 1377 of 2018
LAND ACQUISITION AND REHABILITATION OFFICER AND OTHERS
Versus
TIJABAI
FIRST APPEAL No. 2102 of 2019
GENERAL MANAGER (R AND R) NHDC AND OTHERS
Versus
JAGDISH AND OTHERS
FIRST APPEAL No. 2104 of 2019
NHDC AND OTHERS
Versus
BALRAM AND OTHERS
FIRST APPEAL No. 2105 of 2019
GENERAL MANAGER (R AND R) NHDC AND OTHERS
Versus
PREMNARAYAN AND OTHERS
FIRST APPEAL No. 2106 of 2019
GENERAL MANAGER (R AND R) NHDC AND OTHERS
Signature Not Verified
Signed by: RAVI PRAKASH
Signing time: 16-06-2025
18:59:43
NEUTRAL CITATION NO.2025:MPHC-IND:14117
6
F.A. No.226 of 2017 & Others
Versus
RAFIQ AND OTHERS
FIRST APPEAL No. 492 of 2020
NHDC AND OTHERS
Versus
SUNDAR LAL S/O GANGADHAR THROUGH LRS SMT. GULABBAI
AND OTHERS
Appearance:
Shri Romesh Dave, learned counsel for the appellants in all the first appeals.
Shri Brijendra Gupta & Shri Mohit Matta (through V.C.), learned counsel for
the respondents.
Reserved on : 16th May, 2025
Delivered on : 16th June, 2025
ORDER
Per : Justice Vivek Rusia
Since the controversy involved in these cases is identical in
nature, with the joint request of the parties, these appeal are analogously
heard and being decided by this common order.
01. These appeals arise out of land acquisition proceedings
undertaken under the Land Acquisition Act, 1894 ( now repealed )
(hereinafter referred to as 'the LA Act') for the purpose of the Indira
Sagar Project implemented by Narmada Hydroelectric Development
Corporation (NHDC). The lands situated in Village Rawlas, Tehsil
Khategaon, District Dewas, were acquired due to submergence, and
after the issuance of notifications, compensation was awarded under the
LA Act. Being aggrieved by the lesser amount of compensation awarded
by the Land Acquisition Officer, the respective landowners filed their
references under Section 18 of the LA Act before learned Additional
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
District Judge Khategaon which were decided by judgments passed on
10.03.2017 whereby the compensation awarded has been enhanced. The
present appeals have been preferred by the Land Acquisition Officer and
other acquiring authorities challenging the enhancement of
compensation.
02. These appeals have not been heard on admission years together
because the issue related to court fees paid by the appellants remained in
controversy. The appellants initially paid court fees by way of a franking
machine and filed an application to accept the same as the court fees
paid in these appeals. Vide order dated 30.10.2017, the application was
rejected and thereafter no court fees have been paid in these appeals. In
2024, an application for recalling of order dated 30.10.2017 has been
filed. Thereafter, this Court directed the Taxing Officer to submit a
report on whether such court fees can be accepted or not. The Taxing
Officer submitted a report that at that time there was no rule for payment
of the court fees in the High Court by way of a Special Adhesive Stamp
through the franking machine. Now, the appellants have filed a response
to the aforesaid report to justify that such court fees have rightly been
paid by way of a franking machine. Since these appeals have been
pending since 2017 without even formal admission hence parties have
been directed to argue on merit. If this court finds the appeal worth
admission, then the appropriate direction will be issued for payment of
court fee.
03. For the sake of convenience, facts narrated in F.A. No.226/2017
are being taken into consideration which are as follows:-
3.1. The land of respondent - Ramjivan was acquired for the Indira
Sagar Project. The acquired land comprised Khasra No. 105/1
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
measuring 3.24 hectares, along with an adjoining portion of 1.60
hectares, aggregating to 3.95 acres. A Notification under Section 4(1) of
the L A Act was published in the Official Gazette on 25.01.2013 and
thereafter an award for payment of the compensation was passed by the
Land Acquisition Officer on 31.05.2013 awarding a total compensation
of Rs. 6,03,923/- applying a rate of Rs. 1,52,892/- per acre uniformly for
irrigated and unirrigated lands.
3.2. Feeling aggrieved by the inadequate amount of compensation, the
respondent filed a reference under Section 18 of the Act before the
reference court seeking enhancement on the grounds that the acquired
land had been fully irrigated, fertile, situated adjacent to the Abadi area
and accessible by the Pradhan Mantri Gram Sadak Yojana Road. It was
contended that the Land Acquisition Officer had wrongly relied on
average rent-based rates drawn from historic records of the Harda
command area ignoring prevailing sale transactions of similar lands. In
support, the claimant produced various registered sale deeds relating to
irrigated lands situated in Village Jhundgav and Village Kukravad which
comes in the Harda command area which were sold for Rs. 17,05,500/-,
reflecting a rate of Rs. 5,66,611/- per acre. The appellants opposed the
claim of enhancement in the reference case on the grounds that the
reference is barred by limitation under Section 18(2) and that the award
was based on uniform rates approved by the Divisional Purchase
Committee which were derived from 16 sale deeds. However, the
appellants neither examined any witness nor produced any documentary
evidence like sale deeds in rebuttal.
3.3. The Reference Court framed issues regarding the limitation of the
reference, the correctness of the compensation awarded and the
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
reliability of the exemplar sale deed for determining market value.
Before the Reference Court, the respondent examined himself as PW-1
and produced documentary evidence including the registered sale deed
dated 25.06.2012, revenue records and valuation extracts to substantiate
his claim for enhanced compensation. The appellants supported the
award and submitted that it was duly awarded after considering all the
aspects but did not bring any rebuttal evidence.
04. After appreciating oral and documentary evidence, learned
Reference Court has recorded the findings as under:
1. The reference is within limitation as notice under Section
12(2) of the LA Act was not duly served on the claimant.
2. The exemplar sale deeds of (Ex.P/14 and Ex.P/15) were
found proximate in time and involving irrigated land in the same
command area.
3. The transaction in Ex.P/14 and Ex.P/15 was held to be
genuine, arms-length, and reflective of prevailing market value.
4. Revenue assessment documents (Ex.P/7 and Ex.P/10) were
held to lack evidentiary value being based on average rent rates.
5. The Land Acquisition Officer's method of valuation was
found arbitrary and not based on actual sale transactions.
6. The market value was redetermined at Rs. 5, 66,611/- per
acre based on Ex.P/14 and Ex.P/15.
7. The claimant has been found entitled to all statutory benefits
under Sections 23(1-A), 23(2), and 28 of the Act.
05. The Learned Reference Court has found that the reliance of Land
Acquisition Officer on rent-based average figures lacked correlation to
actual market value and that no reliable exemplar was cited by the
acquiring body. The exemplar sale deeds of Ex.P/14 and Ex.P/15 was
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
found to be proximate in time, pertaining to irrigated land within the
same command area, and genuinely executed. The learned Court held
that Ex.P/14 and Ex.P/15 represented the best evidence of market value.
Assessment charts Ex.P/7 and P/10 were rejected as they were derived
from historical averages and lacked transparency.
06. Apart from the above conclusion the learned Reference Court by
relying on Apex court judgments in ONGC v/s Sendhabhai Basantram
Patel reported in (2005) 6 SCC 454, Special Land Acquisition Officer
v/s Karigowda reported in (2010) 5 SCC 708 and also on the judgment
of this court in Sitabai v/s The State of Madhya Pradesh reported in
2009 (2) MPHT 442 held that highest bona fide exemplar transactions
should be the basis for valuation.
07. The learned reference Court accordingly re-determined the market
value at Rs. 5, 66,611/- per acre and directed payment at the said rate
along with additional compensation under Section 23(1-A) at 12% per
annum, solatium at 30% under Section 23(2) and interest under Section
28 of the Act at 9% per annum for the first year and 15% per annum
thereafter from the date of possession till payment.The details of
compensation awarded to the land owners/respondents in other appeals
are as under:-
S.N First Khategaon tehsil, Compensatio Compensa
o. Appeal Parties Dewas n awarded tion
No. Area Survey by the L.A.O enhanced
acquired number by the
Reference
Court
FA LAO and 3.95 105/1, Ravlas Rs. 6,03,923/- Rs.
226/201 Ors. V. Acres (Rs. 5,66,611/-
7 Ramjeevan 1,52,892/- per per acre
Acre)
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
1.1 FA L.A.O Vs 16/3 Village
228/201 Satya 1.58 Acre Ravlas Rs. 4,10,667/- Rs.
7 Narayan and (Rs. 2,59,916 5,66,611/-
Ors. per Acre) per acre
1.2 FA Indira Sagar 16/1 Village Rs. 2,70,313/- Rs.
238/201 Project & 1.04 Acre Ravlas (Rs. 5,66,611/-
7 Anr 2,59,916/- per per acre
Vs Acre)
Omprakash
1.3 FA Indira Sagar 110/1 Village
239/201 Project & 3.09 Acre Ravlas Rs. Rs.
7 Anr 10,09,834/- 5,66,611/-
Vs (Rs. per acre
Rewa Ram 3,26,807/- per
Acre)
1.5 FA Indira Sagar 6 Village
298/201 Project & 4.40 Acre Melpipliya Rs. Rs.
7 Anr (4.20 13,35,475/- 5,66,611/-
Vs irrigated, (Rs. 3,03,873 per acre
Rughunath 0.20 per Acre)
Singh unirrigate
d)
1.6 FA Indira Sagar 4/1/1 Village
299/201 Project & 2.72 Acre Melpipliya Rs. 3,36,019 Rs.
7 Anr (Rs. 2,25,516 5,66,611/-
Vs per Acre) per acre
Karan Singh
1.7 FA Indira Sagar 4.77 Acre 146/2 Village Rs. 5,19,984/- Rs.
300/201 Project & Rohanya (4.62Acre = 5,66,611/-
7 Anr Dewas 97,489 per per acre
Vs Acre; 0.15
Dashrath Acre = Rs.
94,956 Per
Acre)
1.8 FA Indira Sagar 4.57 Acre 33/2, 35/1, Rs. 5,14,387/- Rs.
302/201 Project & 35/3, 40/1 5,66,611/-
7 Anr Village per acre
Vs Melpipliya
Tulsiram
1.9 FA Indira Sagar 0.84 Acre 100/2 Village Rs. 7,00,000/- Rs.
303/201 Project & Pokharbujurg (Rs. 5,66,611/-
7 Anr 1,86,188/- per per acre
Vs Acre)
Neena Bai
1.11 FA L.A.O 1.43 Acre 129/1 Village Rs. 4,57,719/- Rs.
456/201 Vs Ravlas (Rs. 5,66,611/-
7 Ranchod 4,01,381 /- per acre
per Acre)
1.12 FA L.A.O 0.82 Acre 163/1 Village Rs. 1,90,875/- Rs.
457/201 Vs Ravlas 5,66,611/-
7 Hari Singh per acre
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
1.13 FA L.A.O 2.65 Acre 162/1, 165/2/1, Rs. Rs.
458/201 Vs 166/3 Village 10,01,537/- 5,66,611/-
7 Pooja Devi Mirzapur per acre
1.14 FA L.A.O 1.61 Acre 2/1 Village Rs. 3,91,338/- Rs.
459/201 Vs Melpipliya 5,66,611/-
7 Ranjeet per acre
Singh
1.15 FA L.A.O 1.36 Acre 8/1 Village Rs. 2,24,076/- Rs.
460/201 Vs Melpipliya 5,66,611/-
7 Indar Singh per acre
1.16 FA LAO 2 Acre 31/3 Village Rs. 5,50,450/- Rs.
461/201 Vs. Melpipliya 5,66,611/-
7 mangilal per acre
1.17 FA L.A.O 3.02 Acre 35/2, 40/3 Rs. 9,05,450/- Rs.
462/201 Vs Village 5,66,611/-
7 Sonu Melpipliya per acre
1.18 FA LAO v. 1.31 Acre 100/1, 95 Rs. 4,55,716/- Rs.
898/201 Rameshwar Village 6,07,500/-
7 Mirzapur per acre
1.19 FA L.A.O 1.24 Acre 10/1 Village Rs. 2,81,745/- Rs.
899/201 Vs Melpipliya 6,07,500/-
7 Narayan per acre
Singh
1.20 FA L.A.O 0.86 Acre 9/1 Village Rs.
915/201 Vs Melpipliya Rs. 1,94,921/- 6,07,500/-
7 Sardar per acre
Singh
1.21 FA L.A.O 1.09 Acre 73/2, 64/1 Rs. 2,04,705/- Rs.
919/201 Vs Village 6,07,500/-
7 Kishanlal Nayapura per acre
1.22 FA L.A.O 2.23 Acre 65/1, 66/1 Rs. 3,87,511/- Rs.
920/201 Vs Village 6,07,500/-
7 Ramvilas Nayapura per acre
1.23 FA L.A.O 3.53 Acre 68/2 Village Rs. 6,00,528/- Rs.
947/201 Vs Nayapura 6,07,500/-
7 Santosh per acre
1.24 FA L.A.O 4.55 Acre 4/2/1 Village Rs. Rs.
948/201 Vs Melpipliya 10,45,354/- 6,07,500/-
7 Ummed per acre
Singh
1.25 FA L.A.O 1.34 Acre 143/2 and Rs. 1,85,009/- Rs.
949/201 Vs 143/3 Village 6,07,500/-
7 Lokesh Ravlas per acre
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
1.26 FA L.A.O 0.99 Acre 97/1 Village Rs. 1,43,347/- Rs.
950/201 Vs Ravlas 6,07,500/-
7 Narmada per acre
Prasad
1.27 FA L.A.O 0.94 Acre 156/3 Village Rs. 1,98,185/- Rs.
952/201 Vs Mirzapur 6,07,500/-
7 Ramprasad per acre
1.28 FA L.A.O 1.46 Acre 63/1 Village Rs. 3,11,661/- Rs.
953/201 Vs Nayapura 6,07,500/-
7 Ramvilas per acre
1.29 FA L.A.O 1.68 Acre 76/2 Village Rs. 2,88,574/- Rs.
1376/18 Vs Pokharbujurg 4,86,000/-
Tejram per acre
1.30 FA L.A.O 1.48 Acre 77/2 Village Rs. 2,35,682/- Rs.
1377/18 Vs Pokharbujurg 4,86,000/-
Tijabai per acre
1.31 FA NHDC 1.68 Acre 68/4 Village Rs. 3,22,999/- Rs.
2102/19 Vs Nayapura 6,07,500/-
Jagdish per acre
1.32 FA NHDC 1.36 Acre 143/5 Village Rs. 2,01,386/- Rs.
2104/19 vs Ravlas 6,07,500/-
Balram per acre
1.33 FA NHDC 3.88 Acre 16/4 Village Rs. Rs.
2105//19 Vs Ravlas 11,41,026/- 6,07,500/-
Premnaraya per acre
n
1.34 FA NHDC 1.24 Acre 205/2 and Rs. 2,80,071/- Rs.
2106/19 Vs 205/3 Village 6,07,500/-
Rafiq Melpipliya per acre
1.35 FA NHDC 2.55 Acre 92 and 93 Rs. 7,78,545/- Rs.
492/20 Vs Village 6,07,500/-
Sundarlal Tamarkhan per acre
through
LR's
1.36 FA NHDC 2.17 Acre 117/2/4 Village Rs. 3,04,092/- Rs.
493/20 Vs Ravlas 6,07,500/-
Mukesh per acre
SUBMISSION OF APPELLANTS
08. Shri Romesh Dave, learned counsel for the appellants submitted
that the learned Reference Court erred in interfering with the
compensation determined by the Land Acquisition Officer which was
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
fixed in accordance with the prevailing governmental policies and
guidelines framed by the Narmada Valley Development Authority
(NVDA) duly adopted for the Indira Sagar Project.
8.1. Shri Dave, learned counsel further submitted that the original
compensation was determined by the LAO by taking into account 16
registered sale deeds of irrigated lands from the Harda Command Area
which had been declared as a comparable command area for purposes of
determining the value of lands submerged due to the Indira Sagar
Project. These sale transactions were compiled and assessed by the
Divisional Purchase Committee which arrived at an average value per
rent rupee based on which the per-acre rates were then derived by
applying the corresponding rent classification of the acquired land.
8.2. Learned counsel further submitted that the rent-based valuation
mechanism was adopted pursuant to Clause 2.2 of the Rehabilitation and
Resettlement Policy dated 31.05.2006 framed by the Narmada Valley
Development Authority which provided that compensation for lands
submerged under the project shall be calculated on the basis of
prevailing rates in nearby command areas. In the instant case, the Land
Acquisition Officer adopted the average market value derived from the
rent-to-price conversion of the sale deeds in the command area and thus
submitted that such determination was not arbitrary but based on
objective material.
8.3. Learned counsel further submitted that the learned Reference
Court has committed a grave error in relying solely on sale deeds (Ex-
P/14 & Ex-P/15) from Village - Jhundgav and Village - Kukravad of
Tehsil - Harda which according to the appellants is not situated in
proximity to the acquired land and was not shown to be similar in
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
quality, location, access and potential. No evidence was led by the
respondent to establish that the said land was comparable in all material
respects to the acquired land before the L.A.O. In the absence of such
comparability, the use of Ex.P/14 and Ex.P/15 as the sole benchmark by
the court is incorrect. Learned counsel further submitted that the Court
also failed to assess whether the said transaction was a bonafide
transaction or an isolated sale involving exceptional circumstances or
inflated consideration.
8.4. Learned counsel further submitted that the Learned Reference
Court failed to consider the fact that the sale deed relied upon by the
claimant was dated 25.06.2012 and pertained to land sold approximately
seven months prior to the notification under Section 4(1) under the act
dated 25.01.2013. In the absence of any evidence of rising price trends,
the Reference Court was not justified in mechanically applying the rate
of Rs. 5, 66,611/- per acre from that transaction to the acquired land.
Learned counsel further submitted that the Court failed to consider that
the average derived by the Divisional Purchase Committee was based on
a statistically broader dataset making it a more reliable determinant of
fair market value.
8.5. Lastly, learned counsel submitted that the learned reference Court
erred in awarding the entire statutory benefits under Sections 23(1-A),
23(2), and 28 of the Act, without any corresponding determination of
entitlement under the relevant provisions, particularly when part
compensation had already been disbursed and received without protest.
Learned counsel thus prayed that the impugned award passed by the
reference court be set aside.
SUBMISSION OF RESPONDENTS
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
09. Learned counsel appearing for the respondents / landowners
supported the award passed by the Reference Court by submitting that
the enhancement of compensation by the learned Additional District
Judge is fully justified in the facts and circumstances of the case.
Learned counsel submitted that the method adopted by the Land
Acquisition Officer was based on the conversion of rent values to arrive
at a market rate that is not acceptable in law.
9.1. Learned counsel further submitted that the land of the respondent
was developed land and compensation based on average rent
classification cannot do justice to him. Learned counsel submitted that
the sale deed as an exemplar of the relevant period was made available
to the court which has rightly been relied upon by the Reference Court.
9.2. Learned counsel submitted that the appellant did not lead any
evidence either oral or documentary to justify that the average rent-to-
value ratio used by the Divisional Purchase Committee is correct to
asses the just and proper compensation. In the absence of such evidence,
the Reference Court was right in accepting the only cogent material
placed by the claimant hence no interference is called for and the appeal
be dismissed.
9.3. Learned counsel finally submitted that now the landowners are
compensated fairly and equitably in terms of the constitutional
guarantee under Article 300-A of the Constitution of India. Learned
counsel thus prayed that the present appeals be dismissed.
APPREICIATION & CONCLUSION
10. Before going into the merit of the case in hand it would be proper
to keep in mind the series of decisions of the apex Court in which the
manner of assessment of just and proper compensation payable to the
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
land owners in the matter of land acquisition has been settled. It is
settled law that when the land owner seeks the reference for
enhancement of compensation, then the burden lies on him to prove his
case by adducing reliable evidence and also to establish that the
compensation offered by the Land Acquisition Officer is inadequate and
the lands are capable of fetching higher market value. In the cases of
Basant Kumar v/s Union of India reported in (1996) 11 SCC 542;
Special Land Acquisition Officeer v/s Karigowda reported in (2010) 5
SCC 708 and Ahemdabad Municipal Corporation v/s Shardaben
reported in (1996) 8 SCC 93, the Apex Court has held that it is for the
land owner to prove his case if he is claiming enhancement of a
compensation granted by the Land Acquisition Officer. It is the duty of
the Court to scrutinize the evidence and apply the test of prudent and
willing purchaser whether he would be willing to purchase in the
market the said very land.
11. In the case of Hookiyar Singh v/s Special Land Acquisition
Officer reported in (1996) 3 SCC 766, it has been held that the Court
must not indulge in the feats of imagination but consider the very fact
that the prudent purchaser in open market is ready to purchase the said
land at the rate claimed by the claimants. The Apex Court in the case of
G. Narayan Rao v/s Land Acquisition Officer reported in (1996) 10
SCC 607 held that the claimant must establish that at the time of the
date of notification under Section 4of the LA Act, any buyer or
purchaser was available. A similar view has been taken in the case of
State of U.P. v/s Ram Kumari Devi reported in (1996) 8 SCC 577. In
the case of Gujarat Industiral Department v/s Narottambhai
Morarbhai reported in (1996) 11 SCC 159, the apex Court observed
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
that the criteria and rate for the sale of small pieces of land and big
areas of land are always different. The small plots are easily saleable at
a higher rate; whereas the large area of the plots does not get the higher
rates. Therefore, while assessing the compensation the Court must keep
in the mind area of the land under acquisition.
12. For payment of just and proper compensation and to arrive fair
market value of agricultural land various facts and circumstances of the
case are liable to be considered by the Court. The Court must exercise
its discretion by adopting different methods; like (a) the Sales statistics
method; (b) the Capitalisation of net income method; and (c) the
Agricultural yield basis method. The Supreme Court in the case of
Special Karigowda (supra) has held as under:-
"70. To examine what method could be adopted for determining
the market value of land and criticism of the method adopted by the
Land Acquisition Collector, by the courts, that the same is not in
accordance with law, we must notice various methods which are
normally adopted by the Courts for determining the fair market
value of the land and which of the method can be more properly
applied in the facts and circumstances of this case.
71. Sections 23 and 24 of the Act spell out the have and have
nots, applicable to the scheme of awarding compensation by the
Collector but do not describe the methodology which should be
adopted by the courts in determining the fair market value of the
land at the relevant time. By development of law, the courts have
adopted different methods for computing the compensation payable
to the land owners depending upon the facts and circumstances of
the case. The Courts have been exercising their discretion by
adopting different methods, inter alia the following methods have a
larger acceptance in law :
(a) Sales Statistics Method : In applying this method, it has been
stated that, sales must be genuine and bonafide, should have been
executed at the time proximate to the date of notification under
Section 4 of the Act, the land covered by the sale must be in the
vicinity of the acquired land and the land should be comparable to
the acquired land. The land covered under the sale instance should
have similar potential and occasion as that of the acquired land
{Faridabad Gas Power Project, N.T.P.C. Ltd. & Ors. v. Om
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
Prakash & Ors. [2009 (4) SCC 719], Shaji Kuriakose & Anr. v.
Indian Oil Corp. Ltd. & Ors. [AIR 2001 SC 3341], Ravinder
Narain & Anr. v. Union of India [2003 (4) SCC 481]}.
(b) Capitalization of Net Income Method : This method has also
been applied by the courts. In this method of determination of
market value, capitalization of net income method or expert
opinion method has been applied. {Union of India & Anr. v. Smt.
Shanti Devi & Ors. [1983 (4) SCC 542], Executive Director v.
Sarat Chandra Bisoi & Anr. [2000 (6) SCC 326], Nelson
Fernandes & Ors. V. Special Land Acquisition Officer, South Goa
& Ors. (supra).
(c) Agriculture Yield Basis Method : Agricultural yield of the
acquired land with reference to revenue records and keeping in
mind the potential and nature of the land - wet (irrigated), dry and
barren (banjar).
72. Normally, where the compensation is awarded on
agricultural yield or capitalization method basis, the principle of
multiplier is also applied for final determination. These are broadly
the methods which are applied by the courts with further reduction
on account of development charges. In some cases, depending upon
the peculiar facts, this Court has accepted the principle of granting
compound increase at the rate of 10% to 15% of the fair market
value determined in accordance with law to avoid any unfair loss
to the claimants suffering from compulsive acquisition. However,
this consideration should squarely fall within the parameters of
Section 23while taking care that the negative mandate contained in
Section 24 of the Act is not offended. How one or any of the
principles afore-stated is to be applied by the courts, would depend
on the facts and circumstances of a given case.
75. It is a settled principle of law that lands of adjacent villages
can be made the basis for determining the fair market value of the
acquired land. This principle of law is qualified by -: 10:- First
Appeal No.131 of 1999. clear dictum of this Court itself that
whenever direct evidence i.e. instances of the same villages are
available, then it is most desirable that the court should consider
that evidence. But where such evidence is not available court can
safely rely upon the sales statistics of adjoining lands provided the
instances are comparable and the potentiality and location of the
land is somewhat similar. The evidence tendered in relation to the
land of the adjacent villages would be a relevant piece of evidence
for such determination. Once it is shown that situation and
potential of the land in two different villages are the same then they
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
could be awarded similar compensation or such other
compensation as would be just and fair.
76. The cases of acquisition are not unknown to our legal system
where lands of a number of villages are acquired for the same
public purpose or different schemes but on the commonality of
purpose and unite development. The parties are expected to place
documentary evidence on record that price of the land of adjoining
village has an increasing trend and the court may adopt such a
price as the same is not impermissible. Where there is commonality
of purpose and common development, compensation based on
statistical data of adjacent villages was held to be proper. Usefully,
reference can be made to the judgments of this Court to the cases of
Kanwar Singh & Ors. v. Union of India [JT 1998 (7) SC 397] and
Union of India v. Bal Ram & Anr. [AIR 2004 SC 3981].
77. In this regard we may also make a reference to the judgment
of this Court in the case of Kanwar Singh & Ors. v. Union of India
[AIR 1999 SC 317], where sale instance of the adjacent villages
were taken into consideration for the purpose of determining the
fair market value of the land in question and their comparability,
potential and acquisition for the same purpose was hardly in
dispute. It was not only permissible but even more practical for the
courts to take into consideration the sale statistics of the adjacent
villages for determining the fair market value of the acquired
land."
13. The Apex Court in the case of Kanwar Singh vs. Union of India
reported in (1998) 8 SCC 136 held that the amount of compensation for
the land acquired depends on the market value of land on the date
immediately before the notification under Section 4 of the Act or when
same land is acquired and offer of compensation is made through an
award. The market value has to be determined on the basis of evidence
produced before the Court. It was further held that the consideration in
terms of the price received for land under bona fide transactions on the
date or preceding the date of notification issued under Section 4 of the
Act generally shows the market value of the acquired land and the
market value of the acquired land to be assessed in terms of those
transactions.
14. In the case of Hansali Walichand v/s State of Maharashtra
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
reported in (1998) 2 SCC 388, hon held that the land having future
potential on account of its location can not be ignored and realised
potential is not the sole pivotal factor. In this regard it is noteworthy to
refer to the decision rendered in the case of Land Acquisition Officer,
Revenue Divisional Officer v/s L. Kamalamma reported in (1998) 2
SCC 385, where it has been held that when no sales of comparable land
was available where large chunks of land had been sold, even land
transactions in respect of the small 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 the formation of a layout, lump sum payment as also the waiting
period required for selling the sites that would be formed.
15. In the continuation of the decision rendered in the case of Union
of India v/s Mangat (Dead) by L.Rs. & Others reported in (2000) 10
SCC 609 is also liable to be referred, wherein Para 8 is as under:-
"8. Even if one were to disregard the quality of the land, i.e.,
irrigated, semi-irrigated or barren, one can not be oblivious of the
fact that the market value of land which abuts on the national
highway would be much more than the land which is away from it.
A price of the land which is landlocked and which is farther away
from the national highway can not be the same as that which abuts
on the national highway. The formula which had been applied by
the High Court, however, seems to indicate that the price of the
entire land irrespective of the location of different parcels of land is
the same. The formula which was applied by the learned Single
Judge of the High Court is obviously incorrect."
16. In this regard it would be profitable to rely on the decision
rendered in the case of Kasturi v/s State of Haryana reported in (2003)
1 SCC 354, wherein it was held when there is a difference between a
developed area and an area having potential value though yet to be
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
developed cut 20% towards development charges as against the normal
1/3rd, from the amount of compensation was treated to be justified in
the facts and circumstances of the case.
17. In the case of Chimanlal Hargovinddas v/s Special Land
Acquisition Officer, Poona & Another reported in (1988) 3 SCC 751,
the Supreme Court of India dealt with the question as to how the Court
should determine the valuation of the lands under acquisition and what
broad principle of law relating to the acquisition of land under the Act
should be kept in consideration to determine the proper market value of
the acquired land. In Para 4 of the judgment, as many as 17 principles,
are reproduced below for perusal:-
4. The following factors must be etched on the mental screen:
(1) A reference under Section 18 of the Land Acquisition Act is
not an appeal against the award and the court cannot take into
account the material relied upon by the Land Acquisition Officer in
his award unless the same material is produced and proved before
the court.
(2) So also the award of the Land Acquisition Officer is not to be
treated as a judgment of the trial court open or exposed to
challenge before the court hearing the reference. It is merely an
offer made by the Land Acquisition Officer and the material
utilised by him for making his valuation cannot be utilised by the
court unless produced and proved before it. It is not the function of
the court to sit in appeal against the award, approve or disapprove
its reasoning, or correct its error or affirm, modify or reverse the
conclusion reached by the Land Acquisition Officer, as if it were an
appellate court.
(3) The court has to treat the reference as an original
proceeding before it and determine the market value afresh on the
basis of the material produced before it.
(4) The claimant is in the position of a plaintiff who has to show
that the price offered for his land in the award is inadequate on the
basis of the materials produced in the court. Of course, the
materials placed and proved by the other side can also be taken
into account for this purpose.
(5) The market value of land under acquisition has to be
determined as on the crucial date of publication of the notification
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
under Section 4 of the Land Acquisition Act (dates of notifications
under Sections 6 and 9 are irrelevant).
(6) The determination has to be made standing on the date line
of valuation (date of publication of notification under Section 4) as
if the valuer is a hypothetical purchaser willing to purchase land
from the open market and is prepared to pay a reasonable price as
on that day. It has also to be assumed that the vendor is willing to
sell the land at a reasonable price.
(7) In doing so by the instances method, the court has to
correlate the market value reflected in the most comparable
instance which provides the index of market value.
(8) Only genuine instances have to be taken into account.
(Sometimes instances are rigged up in anticipation of acquisition of
land.)
(9) Even post-notification instances can be taken into account
(1) if they are very proximate, (2) genuine and (3) the acquisition
itself has not motivated the purchaser to pay a higher price on
account of the resultant improvement in development prospects.
(10) The most comparable instances out of the genuine instances
have to be identified on the following considerations:
(i) proximity from time angle,
(ii) proximity from situation angle.
(11) Having identified the instances which provide the index of
market value the price reflected therein may be taken as the norm
and the market value of the land under acquisition may be deduced
by making suitable adjustments for the plus and minus factors vis-
à-vis land under acquisition by placing the two in juxtaposition.
(12) A balance-sheet of plus and minus factors may be drawn for
this purpose and the relevant factors may be evaluated in terms of
price variation as a prudent purchaser would do.
(13) The market value of the land under acquisition has thereafter
to be deduced by loading the price reflected in the instance taken
as norm for plus factors and unloading it for minus factors.
(14) The exercise indicated in clauses (11) to (13) has to be
undertaken in a common sense manner as a prudent man of the
world of business would do. We may illustrate some such
illustrative (not exhaustive) factors:
Plus factor Minus factor
1. smallness of size. 1. largeness of area
2. proximity to a road 2. situation in the interior at a
distances from the Road .
3. frontage on a road 3. narrow strip of land with very
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
small frontage compared to death.
4. nearness to developed area 4. lower level requiring the
depressed portion to be filled up
5. regular shape 5. remoteness from developed
locality
6. level vis-a-vis land 6. some special under acquisition.
Disadvantageous factor which
would deter a purch.
(15) The evaluation of these factors of course depends on the
facts of each case. There cannot be any hard and fast or rigid rule.
Common sense is the best and most reliable guide. For instance,
take the factor regarding the size. A building plot of land say 500 to
1000 sq. yds. cannot be compared with a large tract or block of
land of say 10,000 sq. yds. or more. Firstly while a smaller plot is
within the reach of many, a large block of land will have to be
developed by preparing a lay out, carving out roads, leaving open
space, plotting out smaller plots, waiting for purchasers
(meanwhile the invested money will be blocked up) and the hazards
of an entrepreneur. The factor can be discounted by making a
deduction by way of an allowance at an appropriate rate ranging
approximately between 20 per cent to 50 per cent to account for
land required to be set apart for carving out lands and plotting out
small plots. The discounting will to some extent also depend on
whether it is a rural area or urban area, whether building activity
is picking up, and whether waiting period during which the capital
of the entrepreneur would be locked up, will be longer or shorter
and the attendant hazards.
(16) Every case must be dealt with on its own fact pattern bearing
in mind all these factors as a prudent purchaser of land in which
position the judge must place himself.
(17) These are general guidelines to be applied with
understanding informed with common sense.
18. In this matter learned Reference Court has examined the sale deed
produced by the respondent and found that it was executed at the time of
issuance of Notification under Section 4 of the LA Act and in rebuttal
the appellant did not produce any sale deed therefore, the Court rightly
took into consideration. The land acquisition officer wrongly assessed
the compensation on the basis of guidelines whereas as held by the
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
Supreme Court of India the sale deeds should be taken into
consideration hence no interference is liable to be made with the
impugned order passed by the learned Additional District Judge which
is based on the sale deed produced by the respondent.
19. The calculation of the compensation by the Land Acquisition
Officer was based on the conversion of rent values to arrive at a market
rate which is inherently flawed, outdated and violative of the principles
laid down under Section 23 of the Land Acquisition Act, 1894 and alien
to the law laid down by the Apex Court. The land under acquisition was
not remote or underdeveloped and the valuation based merely on
average rent classification did not reflect the potential or real market
value of the property. The most proximate, genuine and comparable sale
deed was made available to the court by the respondents against which
no rebuttal evidence was brought by the appellants and thus was rightly
relied upon by the Reference Court.
20. The acquiring body i.e. appellant had failed to lead any evidence
before the Reference Court to justify the compensation awarded under
the original award. No documents were produced to demonstrate that the
average rent-to-value ratio used by the Divisional Purchase Committee
was rational or in accordance with actual market conditions. In the
absence of such evidence, the Reference Court was right in accepting
the only cogent material placed by the claimant.
21. The enhancement is thus not only lawful but necessary to ensure
that the landowner who is a poor farmer/ agriculturist is compensated
fairly and equitably in terms of the constitutional guarantee under
Article 300-A of the Constitution of India.
22. In view of the foregoing discussion, all the appeals being devoid
NEUTRAL CITATION NO.2025:MPHC-IND:14117
F.A. No.226 of 2017 & Others
of any merit, deserve to be and are hereby dismissed. The court fee paid
through the franking machine by the appellant be treated to be paid,
registry is directed to take necessary steps if required to take the court
fee on record of this appeal.
Let a copy of this order be kept in the record of other first appeals.
Records of the reference Court be sent back.
The amount of compensation if not paid due to the pendency of
these appeals be paid to the respondents forthwith.
No order as to costs.
(VIVEK RUSIA)
JUDGE
Ravi
