REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7203 OF 2004

Attar Singh and another …. Appellants

Versus

Union of India and another …. Respondents

WITH

CIVIL APPEAL NOS. 7204 TO 7208 OF 2004

J U D G M E N T

S.B, SINHA, J.

1.Appellants were owners of agricultural lands situated in village

Jharoda Kalan, New Delhi. The subject matter of these appeals is a

Notification dated 14

th

July, 1982 issued by the Union of India expressing

its intention to acquire the land in the said village

2.The Land Acquisition Collector made an award on 10

th

August,

1983 categorizing the acquired lands in three categories, i.e. ‘A’, ‘B’ and

‘C’ and fixed the market value thereof at the rate of Rs.5,800/- per;

Rs.4,800/- per bigha; and Rs.2,400/- per bigha respectively.

3.The awardees not being satisfied with the said award filed

applications for reference before the District Collector. References

having been made, the Reference Court vide its Award dated 22

nd

July,

1987 assessed the fair market value of the acquired land at Rs.9,750/- per

bigha.

4.Still not satisfied, the appellants preferred appeals before the High

Court seeking enhancement of compensation for acquisition of their lands

at the rate of Rs.27,750/- per bigha.

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5.Before the High Court a contention was raised that in a Lok Adalat

Settlement, the market value of similarly situated land was fixed at

Rs.22,000/- per bigha at the instance of the Union of India, pursuant

whereto a Division Bench passed a decree on the said basis.

6.A Division Bench of the High Court by its order dated February

28, 2003, however, on the basis of its earlier decision, assessed the fair

market value at Rs.11,500/- per bigha.

7.Learned counsel appearing on behalf of the appellants submitted

that in a matter of this nature, the High Court having regard to the claim

of the appellants, namely Rs.27,750/- per bigha should have awarded

compensation at least @ Rs.22,000/- which was fixed as the fair market

price for lands similarly situated.

8.The principal question which, therefore, arises for consideration is

as to whether any agreement entered into by and between the holders of

the lands and the Union of India in a Lok Adalat should have formed the

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basis for determination of the amount of compensation in respect of the

lands which are said to be similarly situated.

9.It does not appear that before the High Court, the particulars of the

matter which was settled in the Lok Aalat had been produced. Before us

only an order sheet dated 5

th

November, 1992 passed in R.F.A. No.891 of

1987 has been produced, which reads as under :-

“Before the Lok Adalat, the parties agreed that

the market price of the acquired land is

Rs.22,000/- per bigha. In view of the settlement

made before the Lok Adalat, we fix the market

price of the land at Rs.22,000/- per bigha.

The appellant shall be entitled to increased

compensation under Section 23(1A) of the Land

Acquisition Act, 1894 as amended by 1984 Act.

The appellant shall also be entitled to solatium at

30% per annum and interest at the rate of 9% per

annum for the first year and at the rate of 15%

per annum thereafter till payment. The Supreme

Court has already decided the matter regarding

the payment of interest and, therefore, the

question of award of interest need not await the

decision of the Supreme Court as suggested by

the Lok Adalat.

The appeal is allowed with costs.”

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10.It is now a well settled principle of law that determination of the

market value of the land acquired indisputably would depend upon a

large number of factors including the nature and quality thereof. The

norms which are required to be applied for determination of the market

value of the agricultural land and homestead land are different. In given

cases location of land and in particular, closeness thereof from any road

or high-way would play an important role for determination of the market

value wherefor belting system may in appropriate cases may be resorted

to. The position of the land, particularly in rainy season, existence of any

building etc. also plays an important role. A host of other factors

including development in and around the acquired land and/or the

potentiality of development will also have a bearing on determination of

the fair market value of the land.

11.Determination of the market value of the land may also depend

upon the facts and circumstances of each case, amongst them would be

the amount of consideration mentioned in a deed of sale executed in

respect of similarly situated land near about the date of issuance of

Notification in terms of Section 4(1) of the Act ; in absence of any such

exemplars, the market value can be determined on yield basis or in case

of an orchard on the basis of number of fruit bearing trees.

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12.It is also well settled that for the purpose of determination of price

of acquired land, the courts would be well advised to consider the

positive and negative factors, as has been laid down by this Court in

Viluben Jhalejar Contractor vs. State of Gujarat [(2005) 4 SCC 789], i.e. :

Positive factors Negative factor

(i)Smallness of size (i)Largeness of area

(ii)Proximity to a road (ii)Situation in the interior at a

distance from the road

(iii)Frontage on a road (iii)Narrow strip of land with very

small frontage compared to

depth

(iv)Nearness to developed area(iv)Lower level requiring the

depressed portion to be filled

up

(v)Regular shape (v)Remoteness from developed

locality

(vi)Level vis-à-vis land under

acquisition

(vi)Some special disadvantageous

factors which would deter a

purchaser

(vii)Special value for an owner

of an adjoining property to

whom it may have some

very special advantage.

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13.This Court in Union of India v. Pramod Gupta, [(2005) 12 SCC 1],

on the question of determination of market value opined :-

“24. While determining the amount of

compensation payable in respect of the lands

acquired by the State, the market value therefor

indisputably has to be ascertained. There exist

different modes therefor.

25. The best method, as is well known, would

be the amount which a willing purchaser would

pay to the owner of the land. In absence of any

direct evidence, the court, however, may take

recourse to various other known methods.

Evidences admissible therefor inter alia would

be judgments and awards passed in respect of

acquisitions of lands made in the same village

and/or neighbouring villages. Such a judgment

and award, in the absence of any other evidence

like the deed of sale, report of the expert and

other relevant evidence would have only

evidentiary value.

26. Therefore, the contention that as the Union

of India was a party to the said awards would

not by itself be a ground to invoke the

principles of res judicata and/or estoppel.

Despite such awards it may be open to the

Union of India to question the entitlement of the

respondent claimants to the amount of

compensation and/or the statutory limitations in

respect thereof. It would also be open to it to

raise other contentions relying on or on the

basis of other materials brought on record. It

was also open to the appellant to contend that

the lands under acquisition are not similar to the

lands in respect whereof judgments have been

delivered. The area of the land, the nature

thereof, advantages and disadvantages

occurring therein amongst others would be

relevant factors for determining the actual

market value of the property although such

judgments/awards, if duly brought on record, as

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stated hereinbefore, would be admissible in

evidence.”

It was furthermore opined :-

“36. Yet again in Ras Behari Mandal v. Raja

Jagadish Chandra Deo Dhaubal Deb the Patna

High Court reiterated the presumption that the

lessor retains all the rights in mines and

quarries. It also noticed the decision of the

House of Lords in Great Western Rly. Co. v.

Carpalla United China Clay Co. Ltd.wherein a

grant reserving minerals was held to exclude a

deposit of china clay despite the fact that the

same was found near the surface.”

It was also held that:-

“8. In V. Hanumantha Reddy v. Land

Acquisition Officer & Mandal R. Officer the

law is stated in the following terms:

“It is now a well-established principle of

law that the land abutting the national

highway will fetch far more higher price

than the land lying interior.”

This Court furthermore opined :-

“84. It is also trite to state that the market value

of agricultural land is lower than that of the land

suitable for commercial purposes. (See Om

Prakash v. Union of India.)

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It was observed :-

“87. The courts will also have to take into

consideration the enormity of the financial

implication of enhancement in view of the size

of the land acquired for a particular project.”

In Ranvir Singh v. Union of India, [(2005) 12 SCC 59], this

Court held as under :-

“22. Concededly, the High Court in its

impugned judgment did not place any reliance

whatsoever upon the sale instances whereupon

strong reliance has been placed by the parties

solely on the ground that neither the vendors

nor the vendees thereof had been examined as

witnesses. It has also not placed any reliance

upon any other judgment or award filed by the

parties. The High Court while arriving at the

said finding evidently took into consideration

the law as it then stood. The correctness of the

decisions wherein the aforementioned view had

been taken was doubted and the matter was

referred to a larger Bench.”

Referring to Cement Corporation (supra), it was opined that the

High Court was required to consider the deeds of sale in their proper

perspective for determining the market value of the acquired land.

In Karimbanakkal Sulaiman (Dead) by L.Rs. v. Special Tahsildar

for K.A.K.P.I.P., [(2004) 13 SCC 643], this Court held:

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“These factors have been taken into

consideration by the High Court in fixing the

land value. Moreover, the land acquired was

agricultural land and it was acquired for the

purpose of an irrigation project. There is

nothing on record to show that the land had any

commercial value or future potentialities. We

do not think that the land value fixed is too low

to be interfered with by this Court.”

In Viluben Jhalejar Contractor v. State of Gujarat, [(2005) 4 SCC

789], this Court opined :-

“24. The purpose for which acquisition is made

is also a relevant factor for determining the

market value. In Basavva v. Spl. Land

Acquisition Officer deduction to the extent of

65% was made towards development charges.”

In Basant Kumar v. Union of India, [ (1996) 11 SCC 542 ], this

Court held that even if the entire land is of one village one standard for

determining the market value should not be applied, stating:-

“….It has been firmly settled law by beadroll of

decisions of this Court that the Judge determining

the compensation under Section 23(1) should sit

in the armchair of a willing prudent purchaser in

an open market and see whether he would offer

the same amount proposed to be fixed as market

value as a willing and prudent buyer for the same

or similar land, i.e., land possessing all the

advantageous features and to the same extent.

This test should always be kept in view and

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answered affirmatively, taking into consideration

all relevant facts and circumstances. If feats of

imagination are allowed to sway, he outsteps his

domain of judicial decision and lands in

misconduct amenable to disciplinary law...”

14.On what basis the aforementioned settlement in the Lok Adalat

was arrived at is not known. Details of the land with regard to location,

nature, advantages and dis-advantages pertaining thereto are absent. In

absence of any detailed particulars showing the similarity of the land

and/or the respective advantages and dis-advantages pertaining thereto, in

our opinion, the said settlement had rightly not been made the basis for

determining the market value of the land.

15.The High Court, thus, was required to determine the fair market

value of the land on the basis of the legal principles laid down by this

Court in the decisions referred to heretobefore. No contention has been/

could be raised that the High Court in passing the impugned judgment

failed to take into consideration the well settled legal principles.

16.There is another aspect of the matter which cannot also be lost

sight of. The High Court based its decision on its earlier common

judgment arising out of the same notification. The lead judgment was

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delivered in the case of Jia Ram and others vs. Union of India, - R.F.A.

No. 500 of 1987.

We have not been informed whether any appeal has been preferred

against that judgment and if so, what was the result thereof. In absence

of that information, we are of the opinion that the appellants should not

be treated differently from Jia Ram (supra) who might not have preferred

any appeal and have accepted the judgment of the High Court.

17.For the reasons stated above, there is no merit in these appeals.

The same are dismissed accordingly. No costs.

………………………………..J.

[ S.B. Sinha ]

……………………………

…..J.

[ Cyriac Joseph ]

New Delhi

August 4, 2009

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