1

(AFR)

Reserved on 05.07.2019

Delivered on 18.09.2019

Court No. - 34

Case :- FIRST APPEAL No. - 13 of 2016

Appellant :- Bulandhshahr Khurja Development Authority

Respondent :- Hamid Ali Since Deceased And 6 Ors.

Counsel for Appellant :- Bhupeshwar Dayal,B. Dayal

Counsel for Respondent :- Bijendra Kr. Mishra,Bijendra Kumar

Mishra,Pankaj Agarwal

Hon'ble Sudhir Agarwal, J.

Hon'ble Rajeev Misra, J.

(Delivered by Hon'ble Sudhir Agarwal, J.)

1.This is a defendant's appeal filed by Bulandhshahr Khurja

Development Authority (hereinafter referred to as “BKDA”') under

Section 54 of Land Acquisition Act, 1894 (hereinafter referred to as

“Act, 1894”) being aggrieved by judgment and award dated

06.10.2015 passed by Sri Rajat Singh Jain, Additional District Judge,

Court No.2, Bulandshahar in Land Acquisition Reference (hereinafter

referred to as “LAR”) No. 4 of 2010 determining market value of

acquired land, for the purpose of payment of compensation, at the rate

of Rs. 1920/- per square metre. Besides, it has also directed that Land-

Owners will be entitled for 30 per cent solatium, 12 per cent

additional compensation and interest at the rate of 9 per cent for one

year on the entire amount of compensation from the date of

possession and thereafter at the rate of 15 per cent per annum from

one year after date of possession till actual payment. It has also

directed for payment of cost under Section 27 of Act, 1894 by Special

Land Acquisition Officer, Bulandasahar (hereinafter referred to as

“SLAO”).

2.Facts in brief, giving rise to this appeal, are that BKDA is a

statutory authority constituted under Section 4 U.P. Urban Planning

and Development Act 1973 (hereinafter referred to as “U.P. Act,

1973”). It was constituted for planned development of the area

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notified in Bulandshahar and Khurja, under U.P. Act, 1973. BKDA

proposed to develop a residential colony and for this purpose,

proposed to acquire 52.361 hectare of land at Khurja, District

Bulandshahar. Accepting their proposal, State Government published

notification under Section 4 (1) read with Section 17 of Act, 1894 on

08.10.2004 in U.P. Gazette (Extraordinary). Notice was also

published in daily newspapers “Amar Ujala”, and “Dainik Jagran” on

12.10.2004. A public notice was also issued on 18.10.2004.

Thereafter, declaration under Section 6(1) read with Section 17 of

Act, 1894 was issued vide Notification dated 17.10.2005, published in

U.P. Gazette (Extraordinary) on the same day. In the local newspapers

“Dainik Jagran” and “Peedit Manav”, notice was published on

28.10.2005 and 01.11.2005 respectively. It was locally announced on

22.11.2005. Possession of acquired land was taken on 30.12.2005 and

25.08.2006.

3.Acquired land included holding of claimant-Tenure Holders,

Hamid Ali (now deceased and substituted by his legal heirs) and

Zahid Ali, sons of Hussain Ali, being Gata No. 914 area 8080 meters

(0.808 Hectare) who are respondent in this appeal.

4.SLAO declared award dated 29.07.2008. It considered that land

comprising of various Gatas falls in two categories, i.e., those which

comes within Municipal limit of Khurja City and those which are

outside the Municipal limit of Khurja. However, for the purpose of

compensation since entire land was in continuity and contiguous,

single market rate was determined at Rs. 178.92 per square metre.

This rate was determined by SLAO relying on a sale-deed exemplar

No. 259 dated 13.01.2004 whereby 404.40 sq. meter of Gata No. 909

was sold by Krishna Kumari S/o Nihal Singh in favour of Akash,

Vikash, Prakash (minor sons of Brijesh under the guardianship of

Dattra Pal Singh maternal grandfather) at the rate of Rs. 238.57 per

square metre. Since from the same Gata, 0.733 hectare land was also

acquired in the acquisition in question, he applied 25 per cent

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deduction and thereafter, determined market value of entire acquired

land at Rs. 178.92 per square metre.

5.Aggrieved by the aforesaid award dated 29.07.2008 passed by

SLAO, Land-Owners-respondents made an application under Section

18 of Act, 1894 before Collector for making reference to District

Judge, Bulandshahar for determining market value by taking into

consideration factors enumerated in Section 23 of Act, 1894.

Claimant- Land-Owners stated that acquired land is lying in an area

which is extremely developed and has potential of development as

commercial land. It is situated on Delhi-Kanpur Highway and

adjacent to it is Khurja Railway Station. A big Commercial Centre,

Nursing Home, several shops and residential colonies are also

existing. Number of factories are existing and the area is in vicinity of

District Gautam Budh Nagar where number of national and

international level factories are existing. The acquired land is at a

distance of about 40 minutes travel on road from Delhi and within

National Capital Region. A number of sale deeds of relevant period

were cited showing that the land was sold in the area of acquired land

at much higher rate going to the extent of Rs. 8,000/- per square yard.

Collector made reference to District Judge and it was registered as

LAR No. 4 of 2010.

6.Defendants 1 and 2, i.e., State of U.P. and SLAO, filed their

common written statements stating that Railway Station is about 6

kilometres from acquired land and from Noida and Greater Noida i.e.

District Gautambudh Nagar it is about 60 kilometres; Industrial area

Secundarabad is about 40 kilometres from acquired land and

otherwise facts stated in the reference were also incorrect; the

buildings and other constructions referred to in para 14 of Reference

are several kilometers away from acquired land; institution like petrol

pump etc. are existing and all such buildings are more than two

kilometers away from acquired land. It is said that SLAO has rightly

determined market value.

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7.Appellant, i.e., BKDA, who was impleaded as defendant-3, in

the aforesaid Reference, filed separate written statement but therein

also the basic facts stated are similar, as pleaded in the written

statement of respondents-1 and 2, therefore, we are not repeating the

same.

8.Reference came up for adjudication in the Court of Additional

District Judge, Court No. 2, Bulandshahar. It framed following six

issues on the basis of pleadings of the parties:

(1) Whether the compensation awarded to applicants is

inadequate?

(2) Whether applicants are entitled to get compensation at the

rate of Rs.70,000/- per square metre?

(3) Whether Reference is time barred?

(4) Whether Reference is maintainable in the light of statement

made in para 35 and 36 of written statement?

(5) Any other relief?

(6) How much land of petitioners was acquired?

9.Oral evidence adduced by claimant-land owners comprised of

the deposition of Sami Ahmad Khan as PW-1 and Ajay Kumar Tomar

as PW-2 and on behalf of defendants, Anil Kumar Singh, Suits Clerk

was examined as DW-1, Harendra Kumar, Land Acquisition Amin

was examined as DW-2 and R.P. Singh, Assistant Engineer was

examined as DW-3.

10.Documentary evidence adduced by Land-Owners, besides

others, included certified copy of the map (Paper No. 34C1); certified

copy of circle rates (Paper No. 35C1); certified copies of sale dated

05.02.2003 (Paper No. 36C1); sale deed dated 26.03.2002 (Paper No.

37C1); sale dated 27.03.2002 (Paper No.38C1); sale deed dated

27.03.2002 (Paper No. 39C1); sale deed dated 31.10.2003 (Paper No.

40C1); sale deed dated 21.01.2004 (Paper No. 41C1); sale deed dated

14.06.2004 (Paper No. 42C1); sale deed dated 15.01.2004 (Paper No.

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43C1) and certified copy of order dated 16.01.2015 passed by this

Court in Writ Petition No. 38 of 2015.

11.On behalf of State of U.P., in documentary evidence, a copy of

CC Form (Paper No. 67C1) showing payment of Rs. 17,80,561/- to

the Land-Owners on 09.04.2009 was filed.

12.Appellant, i.e., defendant-3, filed documentary evidence which

comprised of photocopy of CC Form 8C2 and minutes of meeting

dated 17.01.2009 of BKDA (Paper No. 96C2), list of payments of

tenure holders (Paper No. 97C1) and (Paper No. 98C1).

13.The aforesaid Reference has been decided by Reference Court

vide judgment and award dated 06.10.2015. Adjudicating Issue-3, on

the question, whether reference is time barred; it has answered the

same in negative and against defendants.

14. Issue-4 has been answered in affirmative and against the

defendants holding that Reference is maintainable and there is no

impediment if one of the Land-Owners sold his land before initiation

of proceedings by SLAO.

15.Issue-6, which related to the dispute of area acquired, was

answered by holding that only 0.808 hectare of land of Gata No. 914

has been acquired and claimant-land owners are entitled to receive

compensation for unsold portion of acquired land, i.e., 5961.5 square

metre.

16.Then, Issues-1 and 2 were taken together. It held that SLAO

considered sale-deed in respect of the Plot No. 909 which is situated

far away from Grand-Trunk Road and there was no proper approach

for the said land. On the contrary, acquired land in dispute is situated

on National Highway No. 91, i.e., Grand Trunk Road touching

National Highway. Therefore, SLAO relied on a document which

relates to a land totally dissimilar to the acquired land in question.

Thereafter, Reference Court relied on the sale-deeds filed as Papers

No. 37C1, 38C1 and 39C1 and took a view that aggregate market

value for the land adjacent to main road would be Rs. 2800/- per

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square metre. After applying deduction on account of largeness of

area to the extent of 30 per cent it would come to Rs.1960/-. Hence it

determined market value at the rate of Rs. 1960/- per square metre.

Having said so in para 65, Reference Court, however, in para 69 of

judgment has observed that claimants Land-Owners are entitled for

compensation at the rate of Rs. 1920/- per square metre and the same

has been maintained in the operative part of the order. Therefore,

though the finding was recorded in Para-65 that actual market value of

the land comes to Rs. 1960/- per square meter, in the penultimate

paragraph 69, and in the order and award, it has been mentioned Rs.

1920/- per square meter. Reference Court, therefore, answered the

Reference by holding market value for the purpose of compensation at

Rs. 1920/- per square meter. It is this determination of market value,

whereby appellant, BKDA is aggrieved and has filed the present

appeal.

17.We have heard Sri B. Dayal, learned counsel for appellant and

Sri Pankaj Agarwal, learned counsel for respondents.

18.Learned counsel for appellant contended that sale-deed

exemplars relied by Reference Court relate to very small piece of land

and such exemplars could not have shown true market value of a land

which was many times larger in area. The contention is that sale-deed

exemplars relied by Reference Court were not relevant for the purpose

of determining market value of land in question and relevant

exemplars, which were cited by appellant, have been rejected

illegally. It is further contended that some of the Land-Owners

accepted compensation at a much lower rate and that being so, it was

not open to respondents-Land-Owners to claim higher market value

and Reference Court has committed manifest error in failing to

consider this aspect of the matter. The situation of land is that major

part of land is inside and away from National Highway. The plot was

rectangular in shape and a small part formed frontage while major part

was inside and away from National Highway. Therefore, land which

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was away from National Highway could not have fetched the same

price as that which is adjacent to National Highway and this aspect

has also not been considered by Reference Court.

19.It is next submitted that in a multiparty settlement arrived

between defendants and Land-Owners, compensation as awarded by

SLAO was increased to Rs. 498/- per square meter which was

accepted and a number of Land-Owners got compensation received at

the same rate. That being so, it was not open to Reference Court to

determine much higher rate of compensation in the case in hand. The

sole exemplar relied by SLAO was in respect of the same plot which

was subject matter of acquisition in the present acquisition also and,

therefore, Reference Court committed manifest error in holding that

land of Gata No. 914 was at a much distance from the acquired land

and not relevant to determine market value.

20.Learned counsel for claimants-respondents, on the contrary,

submitted that Reference Court has awarded just and equitable

compensation and, in fact, contrary to findings, has given a lesser rate

of compensation in the operative part hence the same does not require

any interference. He defended the judgment and award dated

06.10.2015 for the reasons stated therein and reiterated the same

submissions.

21.In the light of rival submissions, as noticed above, we have now

to examine the only point for determination, “whether market value

determined by Reference Court is just, adequate and actual or it is

excessive and on a higher side which requires reduction”.

22.Before examining the aforesaid issue on merits, it would be

appropriate to have a bird's eye view of relevant legal principles

settled in last several decades, which are to be applied when 'market

value' of a land acquired forcibly under the provisions of Act, 1894

has to be determined by Court in a Reference made under Section 18

of the said Act.

23. In Chimanlal Hargovinddas vs. Special Land Acquisition

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Officer (1988) 3 SCC 751, Court has said that a reference is like a

suit which is to be treated as an original proceeding. Claimant is in the

position of a plaintiff who has to show that price offered for his land

in the Award is inadequate. However, for the said purpose, Court

would not consider the material, relied upon by Land Acquisition

Officer in Award, unless some material is produced and proved before

Court.

24. Thus, Reference Court does not sit in appeal over the Award of

Land Acquisition Officer. Material used by Land Acquisition Officer

is not open to be used by Court suo motu unless such material is

produced by the parties and proved independently before Reference

Court. Determination of market value has to be made as per market

rate, prevailing on the date of publication of notification under section

4 (1) of Act, 1894.

Circle Rate- Relevance:

25.As we have noticed that circle rates were also relied before

Reference Court. In law circle rates are irrelevant and ought not to

have been considered. In the matters where circle rates are relied and

referred such an approach has been castigated, condemned and

disapproved by Courts time and again.

26. In Jawajee Nagnatham v. Revenue Divisional Officer, (1994)

4 SCC 595, this question came up for consideration in the matter

arisen from State of Andhra Pradesh. The landowners appealed

against order of Reference Court before Andhra Pradesh High Court

claiming higher compensation on the basis of “Basic Valuation

Register” maintained by Revenue authorities under Stamp Act, 1899.

The claim of Land-Owners failed in High Court, which held that such

Register had no evidenciary value on statutory basis. In appeal,

Supreme Court held that Basic Valuation Register was maintained for

the purpose of collecting stamp duty under Section 47-A of Stamp

Act, 1899 as amended in State of Andhra Pradesh. It did not confer,

expressly, any power upon Government to determine market value of

land prevailing in a particular area, i.e., village, block, district or

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region. It also did not provide a statutory obligation upon Revenue

authorities to maintain Basic Valuation Register for levy of stamp

duty in regard to instruments presented for registration. Therefore,

there existed no statutory provision or rule providing for maintaining

such valuation register. In the circumstances, such register prepared

and maintained for the purpose of collecting stamp duty had no

statutory force or basis and cannot form a valid criteria to determine

market value of land acquired under Act, 1894. This decision was

followed in Land Acquisition Officer Vs. Jasti Rohini, 1995 (1)

SCC 717.

27. Another matter from State of U.P. came up for consideration

involving same issue in U.P. Jal Nigam Vs. M/s Kalra Properties

(P) Ltd., (1996) 3 SCC 124. Landowners' demanded compensation in

regard to land acquired under Act, 1894 on the basis of market value

assessed as per circle rate determined by Collector. It was accepted by

High Court, but in appeal, judgment was reversed by Supreme Court

following its earlier decision in Jawajee Nagnatham (supra). Court

held that market value under Section 23 of Act, 1894 cannot be

determined on circle rates determined by Collector for the purpose of

stamp duty under Stamp Act, 1899. This view was reiterated in Krishi

Utpadan Mandi Samiti Vs. Bipin Kumar, (2004) 2 SCC 283.

28. The issue was again considered by a larger Bench in Lal

Chand Vs. Union of India and another (2009) 15 SCC 769 wherein

two Judgments of Apex Court taking a view that circle rates may be

considered, as prima facie basis, for the purpose of ascertaining

market value, were examined. These decisions are Ramesh Chand

Bansal v. District Magistrate/Collector, (1999) 5 SCC 62 and R

Sai Ram Bharathi v. J Jayalalitha, (2004) 2 SCC 9. Court resolved

controversy, holding, if in a particular case, guidelines for market

values are determined by an Expert Committee constituted under State

Stamp Law, following a detailed procedure laid down under the

relevant rules and are published in State Gazette, same may be

considered as a relevant material to determine 'market value'. Court

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said, when guidelines of market value, i.e., minimum rates for

registration of properties, are so evaluated and determined by Expert

Committees, as per statutory procedure, there is no reason why such

rates should not be a relevant piece of evidence for determination of

market value. Having said so, in para 44, Court further said:-

"44. One of the recognised methods for determination of

market value is with reference to the opinion of experts. The

estimation of market value by such statutorily constituted

Expert Committees, as expert evidence can, therefore, form

the basis for determining the market value in land acquisition

cases, as a relevant piece of evidence. It will be however

open to either party to place evidence to dislodge the

presumption that may flow from such guideline market value.

We, however, hasten to add that the guideline market value

can be a relevant piece of evidence only if they are assessed

by statutorily appointed Expert Committees, in accordance

with the prescribed assessment procedure (either streetwise,

or roadwise, or areawise, or villagewise) and finalized after

inviting objections and published in the gazette. Be that as it

may."

(emphasis added)

29. It is thus evident that for the purposes of determining market

value circle rate fixed by Collector for the purposes of stamp duty

would not be a relevant material unless such determination is under a

statutory obligation and after following the prescribed procedure.

Other Principles relevant for determining market value:

30.For determining market value of acquired land, in the last

several decades, Courts have considered the matter time and again and

laid down certain principles which includes; (i) Court should proceed

as hypothetical purchaser willing to purchase land from open market

and prepared to pay a reasonable price on the scheduled date, i.e., the

date of publication of notification under Section 4 of Act 1894, (ii)

willingness of Vendor to sell the land on reasonable price shall be

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presumed, (iii) relevant material, which may help the Court to find out

reasonable price would include sale deeds, if any, executed in the

close proximity of the relevant date which is genuine and shows a

voluntary and open transaction between the parties. Where land

subject matter of exemplar sale deed is smaller or larger but the

document otherwise is credible and genuine, suitable adjustment by

applying plus and minus factors and also appropriate deduction can be

made by the Court.

31.A burden, however, to establish as to what is the reasonable and

adequate market value and that the offer made by Collector is

inadequate, is on the Land Owners at whose instance Reference has

been made to District Judge under Section 18 of Act, 1894.

32. The size of land would constitute an important factor to

determine market value. It cannot be doubted that small size plot may

attract a large number of persons being within their reach which will

not be possible in respect of large block of land wherein incumbent

will have to incur extra liability in preparing a lay out and carving out

roads, leaving open space, plotting out smaller plots, waiting for

purchasers etc. Courts have said that in such matters, factors can be

discounted by making deduction by way of an allowance at an

appropriate rate ranging between 20% to 75%, to account for land,

required to be set apart for carving out road etc. and for plotting out

small plots.

33.The concept of smaller and larger plots should be looked into

not only from the angle as to what area has been acquired, but also the

number of land holders and size of their plots. When we talk of

concept of prudent seller and prudent buyer, we cannot ignore the fact

that in the category of prudent seller, the individual land holder will

come. It is the area of his holding which will be relevant for him and

not that of actual, total and collective large area, which is sought to be

acquired.

34. In Kausalya Devi Bogra and others v. Land Acquisition

Officer, Aurangabad and another, (1984) 2 SCC 324, about 150

12

acres of land was acquired. Owners of acquired land were in two

groups, i.e. Kaushalya Devi Bogra and Syed Yusufuddin Syed

Ziauddin. First group, i.e. Kaushalya Devi Bogra owned 74 acres,

while Yusuffuddin owned about 15 acres of land. In these facts of the

case, where almost 60% of total acquired land was owned by two sets

of owners and exemplar of smaller property was relied, Court said that

"when large tracts are acquired, the transaction in respect of small

properties do not offer a proper guideline. In certain other cases, for

determining market value of a large property on the basis of a sale

transaction for smaller property, a deduction should be given.

35. In Bhagwathula Samnna and others v. Special Tehsildar

and Land Acquisition Officer, Visakhapatnam Municipality

(1991) 4 SCC 506, High Court applied deduction of 33.3% observing,

when large extent of land was acquired under housing scheme and

exemplar is of small land, reasonable deduction can be made.

Following the decision in Tribeni Devi v. Collector, Ranchi, AIR

1972 SC 1417, it was argued that High Court wrongly applied

deduction; acquired land was fully developed and eminently suitable

for being used as house sites and, therefore, there was no justification

for making any deduction. The land was acquired for formation of

road, High Court applied deduction on the ground that expenses have

to be incurred for development, which was not justified. Aforesaid

submission was considered by Supreme Court in the light of facts of

that case. In para 7 and 11, Court said: -

"7. In awarding compensation in acquisition proceedings,

the Court has necessarily to determine the market value of

the land as on the date of the relevant notification. It is useful

to consider the value paid for similar land at the material

time under genuine transactions. The market value

envisages the price which a willing purchaser may pay under

bona fide transfer to a willing seller. The land value can

differ depending upon the extent and nature of the land sold.

A fully developed small plot in an important locality may

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fetch a higher value than a larger area in an undeveloped

condition and situated in a remote locality. By comparing

the price shown in the transactions all variables have to be

taken into consideration. The transaction in regard to

smaller property cannot, therefore, be taken as a real basis

for fixing the compensation for larger tracts of property. In

fixing the market value of a large property on the basis of a

sale transaction for smaller property, generally a deduction

is given taking into consideration the expenses required for

development of the larger tract to make smaller plots within

that area in order to compare with the small plots dealt with

under the sale transaction.

11.The principle of deduction in the land value covered by

the comparable sale is thus adopted in order to arrive at the

market value of the acquired land. In applying the principle it

is necessary to consider all relevant facts. It is not the extent

of the area covered under the acquisition, the only relevant

factor. Even in the vast area there may be land which is fully

developed having all amenities and situated in an

advantageous position. If smaller area within the large tract

is already and suitable for building purposes and have in its

vicinity roads, drainage, electricity, communications etc. then

the principle of deduction simply for the reasons that it is

part of the large tract acquired, may not be justified."

(emphasis added)

36. Court further held that proposition that large area of land cannot

possibly fetch a price at the same rate at which small plots are sold is

not absolute proposition and in given circumstances it would be

permissible to take into account price fetched by small plots of land. If

larger tract of land, because of advantageous position, is capable of

being used for the purpose for which smaller plots are used and is also

situated in a developed area with little or no requirement of further

development, the principle of deduction of value for the purposes of

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comparison is not warranted. Having said so, Court in para 13 held as

under: -

"13. With regard to the nature of the plots involved in these

two cases, it has been satisfactorily shown on the evidence on

record that the land has facilities of road and other

amenities and is adjacent to a developed colony and in such

circumstances it is possible to utilize the entire area in

question as house sites. In respect of the land acquired for

the road, the same advantages are available and it did not

require any further development. We are, therefore, of the

view that the High Court has erred in applying the principle

of deduction and reducing the fair market value of land

from Rs.10/- pr square yard to Rs.6.50 paise pr square yard.

In our opinion, no such deduction is justified in the facts and

circumstances of these cases."

(emphasis added)

37. In V.M. Salgoacar & brother Ltd. vs. Union of India (1995)

2 S.C.C 302, land acquired by notification dated 06.07.1970 in village

Chicalim near Goa Airport belonged to a single owner. Court

observed, when land is sold out in smaller plots, there may be a rising

trend in the market, of fetching higher price in comparison to the plot

which are much higher in size. Having said so Court further said:

" though the small plots ipso facto may not form the basis

per se to determine the compensation, they would provide

foundation for determining the market value. On its basis,

giving proper deduction, the market value ought to be

determined".

(emphasis added)

38. Again in Shakuntalabai (Smt.) and others vs. State of

Maharashtra, 1996 (2) S.C.C 152, 20 acres of land in Akola town

was sought to be acquired by notification published on 11.08.1965

under section 4(1) of Act, 1894 which was also owned by a single

person. It is in this context, Court said:

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"the Reference Court committed manifest error in

determining compensation on the basis of sq. ft. when land of

an extent of 20 acres is offered for sale in an open market,

no willing and prudent purchaser would come forward to

purchase that vast extent of land on sq. ft. basis. Therefore,

the Reference Court has to consider valuation sitting on the

armchair of a willing prudent hypothetical vendee and to put

a question to itself whether in given circumstances, he would

agree to purchase the land on sq. ft. basis. No feat of

imagination is necessary to reach the conclusion. The answer

is obviously "no".

(emphasis added)

39. In order to determine market value when exemplars are

adduced, normally it is found that exemplars of small land, and that

too, in developed area after plotting and development are relied.

Sometimes a single exemplar is available and sometimes more than

that. It is not the number of exemplars which is important and would

determine the question whether burden has been discharged by

Claimants that offer of compensation made by Collector is inadequate

and he is entitled to higher compensation but it is the genuity,

authenticity and creditworthiness of the documents. If the document is

found most suitable and appropriate for determining compensation in

respect of acquired land, even a single instance/exemplar cited by

Land Owner may be relied and it can be said that Claimant-Land

Owner has succeeded in discharging his burden.

40. In Gafar vs. Moradabad Development Authority, 2007 (7)

SCC 614, Court observed that burden is on Claimants to establish that

amount awarded to them by Collector is inadequate. That burden has

to be discharged by Claimants and only if initial burden in that behalf

is discharged, the burden would shift to State to justify the

compensation offered by SLAO.

41. Further, when there are more than one exemplar, one, which

provides highest rate, has to be followed. In Satish Vs. State of U.P.,

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2009 (14) SCC 758, Court after relying on its earlier decision in

Viluben Jhalenjar Contractor (Dead) by Lrs. Vs. State of Gujarat,

2005 (4) SCC 789, said :

"...when comparable exemplars are brought on record, the

one carrying the highest market value amongst them may be

followed."

(emphasis added)

Deductions:

42. Whenever the area of acquired land is larger than the area of

land which is subject matter of the exemplar and smaller in size,

Courts have held the same admissible subject to appropriate

deduction.

43. In Basavva (Smt.) and others Vs. Special Land Acquisition

Officer and others, (1996) 9 SCC 640, notification under Section

4(1) of Act, 1894 proposing to acquire 194 acres of land for industrial

development near Dharwad was published on 30.10.1981. Collector

made award dated 22.8.1985 offering compensation at the rate

between Rs. 8,000/- to Rs.8,080/-, which was enhanced by Reference

Court vide award dated 11.10.1988 to Rs.1.72/- per square foot

(Rs.74,953/- per acre). On appeal High Court reduced compensation

to Rs.56,000/- per acre. The appeal preferred by State Government

against High Court's judgment was dismissed. In the appeals preferred

by landowners, it was contended on behalf of landowners that

deduction towards development upto 53% was reasonable but High

Court in applying 65% deduction has erred in law. Court observed,

while determining compensation, at first instance, it has to be seen

whether sales relating to smaller pieces of land are genuine and

reliable; and, whether they are in respect of comparable land. If it is

found that sales are genuine and reliable and lands have comparable

features, sufficient deduction should be made to arrive at a just and

fair market value of large tracts of land. The time lag for real

development and waiting period for development are also relevant for

determination of just and comparable compensation. For deduction of

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development charges, nature of development, conditions and nature of

land, the land required to be set apart under building rules for roads,

sewerage, electricity, parks, water etc. and all other relevant

circumstances involved are to be considered.

44. The above principles were also laid down in D. Vasundara

Devi Vs. Revenue Divisional Officer, (1995) 5 SCC 426 which was

relied by Court in Basavva (Smt.) & Others Vs. Special Land

Acquisition Officer and others (supra). It then found that exemplar

sale deed was dependable but in respect of a small plot of land

situated at a distance of more than 1 k.m; land in area is not developed

and there is no development towards that area and it would take years

for development in those land though land was capable of user for

non-agricultural purpose. It is in this background, Court applied 53%

deduction for development. It further held that since long time would

be taken for development and for that purpose additional 12%

deduction was allowed making total deduction as 65%.

45. In Land Acquisition Officer, Kammarapally Village Vs.

Nookala Rajamallu and others, AIR 2004 SC 1031, Court said as

under :

"It has been held that the deduction can be made where the

land is acquired for residential and commercial purpose with

regard to roads and civic amenities, expenses of development

of the sites by laying out roads, drains, sewers, water and

electricity lines, and the interest on the outlays for the period

of deferment of the realization of the price, the profits on the

venture etc. So far as this Court is concerned, it has

discarded the deduction policy on various grounds. One of

the grounds is that if the State or its authority acquires the

land for the purpose of selling it to the ultimate purchasers

upon making available facilities, they normally recover the

price inclusive of common facilities, therefore, a

Government or its authority cannot be doubly benefited

either by deductions from the payment of compensation in

18

one hand and by collections of price of such development

from the ultimate purchasers on the other hand. It also to

be seen that no law prescribes deduction in paying

compensation. It is to be remembered that deduction is an

exception not the rule."

(emphasis added)

46. In Udho Dass Vs. State of Haryana and Ors. 2010 (12) SCC

51, by notification dated 17.5.1990, 162.5 acres of land in village Patti

Musalmanan was sought to be acquired for the purposes of housing

project in Sonepat (Haryana). Collector determined compensation at

the rate of Rs.Two Lacs per acre, but it was enhanced by Additional

District Judge on reference under Section 18 of Act, 1894 to Rs.125/-

per square yard for the land behind E.C.E. Factory, situated away, and

on the left side of the Sonepat Bahalgarh road, and Rs.150/- per

square yard on the right side abutting the road. Reference Court held

that land on the left side did not abut the road and it had therefore less

potential value vis-a-vis land on the right side, which touched the

road. In appeal High Court enhanced compensation from Rs.125/- to

Rs.135/- and from Rs.150/- to Rs.160/-. Land owner came in appeal

before Supreme Court claiming compensation at Rs.200/- per square

yard. Court, as a matter of fact, found that even compensation, which

was determined by Collector or Reference Court was not paid to

Land-Owners immediately, but payment spread over for two decades.

Court said if compensation payment continued over a period of almost

20 years, potential of land acquired from Land-Owners must also be

adjudged keeping in view development in the area, spread over the

period of 20 years if evidence so permits and cannot be limited to near

future alone. Court observed that this broad principle would be

applicable where possession of land has been taken pursuant to

proceedings under an acquiring Act and not to those cases where land

is already in possession of Government and is subsequently acquired.

Court also observed that in case where compensation is based

exclusively on sale instances, it creates some time a disadvantageous

19

position to Land-Owners, whose land is forcibly acquired. There is

wide spread tendency to undervalue sale prices. Circle rates

determined by Collector only marginally corrected the anomaly, as

these rates are also abnormally low and do not reflect true value.

These things cause serious disadvantage to Land-Owners, since they

have no control over price on which some other Land-Owners sell

their property, which is often the basis for compensation payable to

Land-Owners, whose land are forcibly acquired. Court also held that

there cannot be application of belting system in that case. Normally,

land along side the road has more value vis-à-vis the land away from,

but that would have been the case where agricultural land, which have

no potential for urbanization or commercialization had been acquired

and in such a case, belting system is permissible.

47. In Udho Dass (supra) Court held that land was acquired in

1990. It had great potential and had been completely urbanized as

huge residential complexes, industrial area and estates, huge education

city have come up in the last 10 or 15 years. It further held as under: -

"Moreover, insofar as land which is to be used for

residential purposes is concerned, a plot away from the

main road is often of more value as the noise and the air

pollution alongside the arterial roads is almost unbearable.

It also significant that the land of Jamalpur Kalan was

touching the rear side of the ECE factory and the High Court

had granted compensation of Rs.250/- per square yard for

the acquisition of the year 1992. We have also seen the site

plan to satisfy ourselves and find that the land acquired

from Jamalpur Kalan and the present land share a common

boundary behind the ECE factory. The belting system in the

facts of the present case would thus not be permissible."

(emphasis added)

48. In Anjani Molu Desai v. State of Goa and another, (2010) 13

SCC 710, a very large tract comprising 3,65,375 square meter of land

in Balli village, Quepem Taulak, Goa was acquired for the purposes

20

of Konkan Railway for laying down broad gauge line. Acquisition

notification was issued on 30.7.1991. Appellant Anjani Molu Desai

owned 60,343 square meter of land in Survey No.45/1, 45/5, 45/6,

51/1 and 51/2. Collector awarded compensation at the rate of Rs.12/-

per square meters for orchard lands and Rs.6/- per square meter for

paddy lands. Reference Court and High Court affirmed said valuation

by rejecting Reference and Appeal. Collector determined market

value relying upon two exemplars and taking an average thereof. First

exemplar sale deed dated 30.8.1989 relates to 2055 square meters of

land situated at the distance of 200 meter away from acquired land

and sold at the rate of Rs.43.80 per square meters. Collector deducted

45% from sale price towards "development cost" i.e. for providing

approach road and open spaces, expenses relating to development

work, conversion charge etc. This reduced price to Rs.24/- per square

meter. Since sale deed was of August, 1989 and acquisition

commenced in 1991, thus there being gap of 20 months, Collector

provided an increase at the rate of 14.5% per annum and thus, arrived

at Rs.32.24 per square meter. Exemplar sale deed dated 30.1.1990

relates to sale of 7600 square meters of land at a distance of one

kilometer from acquired land sold at Rs.3/- per square meter. Here

also, there was a gap was of 18 months, thus 14.5% increase was

allowed, which made sale price to Rs.3.82 per square meter. Collector

then averaged two rates derived from two sale deeds and determined

Rs.18/- per square meter (Rs.32.24 + Rs.3.82÷2). This method

adopted by Collector was not approved by Supreme Court. It was

held, where there are more than one exemplar, which could be

considered for determining market value, the one providing higher

rate should be accepted and followed. It is only in exceptional cases

where there are several sales of similar land, whose prices range in a

narrow bandwidth, the average can be taken as representing market

value. But where values disclosed in respect of two sales are markedly

different, it can only lead to an inference that they are with reference

to dissimilar land or that lower value sale is on account of under

21

valuation or other price depressing reasons. In respect of orchard land,

therefore, Court followed exemplar sale deed dated 30.8.1989

providing sale price at Rs.43.80 per square meter and applying

appreciation of 14.5% and odd per annum, Court determined market

value at Rs.57.50 and to that extent claim of appellant Anjani Molu

Dessai was upheld. Here also proposition laid down by Apex Court is

not exceptional but on the facts of the case.

49. In Nelson Fernandes and others v. Special Land Acquisition

Officer, South Goa and others, AIR 2007 SC 1414, land was

acquired for new broad gauge line of Konkan Railway. Acquisition

notification under Section 4 Act, 1894 was issued in August, 1994.

SLAO made award of Rs.4/- per square meter. In Reference, District

and Sessions Judge relying on two sale deeds dated 13.12.1993

enhanced compensation at the rate of Rs.192/- per square meter. Sale

price in exemplar sale deed was Rs.449/- per square meter. Land-

Owners as well as acquiring body both preferred appeals. Land

owner's appeal was rejected while acquiring body's appeal was

allowed to the extent that market value was reduced to Rs.38/- per

square meter. Supreme Court found that compensation awarded by

High Court by rejecting valuer report is not based on cogent material

and not supported by cogent reasons. The injury, which land owner,

was likely to sustain due to loss of his future earning from selling land

as also damage already suffered due to diminution of profit of land

between time of publication of notice and time taken by Collector in

possession was not considered. Since land was acquired for the

purposes of laying down railway line, no development was to be done.

There existed civil amenities like, school, police station, water supply,

bank, electricity, highway, transport, petrol pump, industries,

telecommunication and other business. Hence it determined

compensation at the rate of Rs.250/- per square meter, but then

applied 20% deduction, which brings rate at Rs.200/- per square

meter.

50. In Special Land Acquisition Office v. Karigowdo and others,

22

2010 (5) SCC 708, total acquired land was 146 acres and 7 guntas. It

was owned by 419 Claimants-land owners, whose area varied from 2

to 48 guntas. Acquired land situated in village Sanaba, Chinakavali

Hobli, Pandavapura. These land got submerged in 1993 under

backwaters of Tonnur tank due to construction of Hemavathi Dam.

Physical possession of land was taken between October, 1996 to

December, 1999, while acquisition notification under Section 4 (1) of

Act, 1894 was issued on 4.4.2002. Crops standing on land were

damaged. SLAO determined market value at Rs.90,460/- per acre for

wet land and Rs.37,200/- per acre for dry land. On Reference,

compensation was enhanced to Rs.2,92,500/- per acre for wet land

(garden land), Rs.1,46,250/- for dry land (lightly irrigated) and

Rs.1,20,000/- for dry land (without mulberry crop). In appeal by

Land-Owners, High Court enhanced compensation to Rs.5,00,000/-

per acre for wet/garden land and Rs.2,53,750/- per acre for dry land.

State, therefore, came in appeal before Supreme Court. Dispute arose

before Court was for computation of compensation payable to

Claimants and quantum thereof. Argument advanced by State was that

method adopted by Reference Court as well as High Court was

impermissible in law. Court cannot take into consideration

commercial activity, which may result from, and be indirectly

incidental to agricultural activity, particularly, when both of them are

carried on independent of each other. In that case there were no sale

instances from village Sanaba prior to 2002. The exemplars of

adjoining villages were produced before Court. After looking into

statutory provisions of Act, 1894, Court said (1) provision of Section

23 are mandatory; and (2) it is for Claimants to ascertain as a matter

of fact - location, potential and quality of land for establishing its fair

market value. It is for Claimant to show that, what is contemplated

under conditions attached thereto has been satisfied. It is also for

Claimants to show that to award compensation payable under

statutory provisions, they have brought on record evidence to satisfy

criterion and conditions required to be fulfilled for such a claim. Court

23

has to determine compensation strictly in accordance with the

provisions of Sections 23 and 24 of Act, 1894. Potentiality of land

should be on the date of acquisition i.e. existing potentiality. Further,

potentiality has to be directly relatable to capacity of acquired land to

produce agricultural products, or its market value relatable to method

of compensation. If there exist crops, trees or fruit bearing trees, the

same can be taken into consideration, but extent of benefit cannot go

to the extent that fruits grown in agricultural land would be converted

into processed food like jam or any other eatable products. This

extension of loss of benefits amounts to remote factors, which is not

permitted to take into consideration. Court thus held that

compensation determined by Reference Court and High Court was not

justified. State appeal was partly allowed and Court provided for

compensation at Rs.2,30,000/- per acre for wet/garden land and

Rs.1,53,400/- per acre for dry land.

51. In Mohinder Singh and others v. State of Haryana, (2014) 8

SCC 897, by notification dated 2.12.1982, 327.52 acres in village

Patti Jhambra, Shahabad in District Kurushetra (State of Haryana) was

acquired for development and utilization of land for residential,

commercial, industrial purposes etc. Notification under Section 6 was

issued on 4.7.1984 in relation to 178.62 acres, and ultimate possession

of only 90.07 acres was taken. Collector made award at different rates

per acre depending upon quality of soil/land. Reference Court

awarded uniform compensation at Rs.2,66,400/- per acre. State

preferred appeal whereupon High Court reduced compensation to

Rs.1,83,080/- per acre. Land Owner preferred intra court appeal and

Division Bench determined market value at Rs.2,19,696/- per acre.

Land-Owners further went in appeal before Supreme Court, which set

aside judgment of High Court and restored award passed by Reference

Court determining Rs.2,66,400/- per acre as market value. While

restoring award of Reference Court, Supreme Court observed that

40% deduction applied by High Court was not justified. Since land

was within developed Municipal limit, therefore, deduction of 25%

24

applied by Reference Court was justified.

52. In Union of India v. Raj Kumar Baghal Singh (dead)

through legal representatives and others, (2014) 10 SCC 422,

72.9375 acres of land in village Bir Kheri Gujran, District Patiala in

State of Punjab was acquired vide notification dated 14.3.1989.

Collector made award of Rs.Two Lacs per acre. Reference Court

enhanced amount of compensation to Rs.9,05,000/- per acre. In

appeal, a Single Judge of High Court reduced compensation to

Rs.105.80 per square yard and it was confirmed by Division Bench

also. Union of India preferred appeal, which was dismissed. Court

held that there is no rule of thumb for deduction at a particular rate. It

varies and depends on individual case. In para 11 Court said "the

extent of cut depends on individual fact situation”.

53. Deduction for development is different than deduction

permissible in respect of largeness of area vis-a-vis exemplar of small

piece of land. Many times, Land Owners rely on the rates on which

development authorities offer allotment of developed plots carved out

by them in residential or industrial area. Such rates apparently cannot

form basis for compensation for acquisition of undeveloped lands for

reasons more than one. The market value in respect of large tract of

undeveloped agricultural land in a rural area has to be determined in

the context of a land similarly situated whereas allotment rates of

development authorities are with reference to small plots and in a

developed lay out falling within urban or semi-urban area. Statutory

authorities including development authorities used to offer rates with

reference to economic capacity of buyers like economic Weaker

Sections, Low Income Group, Middle Income Group, Higher Income

Group etc. Therefore, rates determined by such authorities are not

uniform. The market value of acquired land cannot depend upon

economic status of land loser and conversely on the economic status

of the body at whose instance, land is acquired. Further, normally,

land acquired is a freehold land whereas allotment rates determined by

development authorities etc. constitute initial premium payable on

25

allotment of plots on leasehold basis. However, where an exemplar of

small piece of land is relied, in absence of any other relevant material,

Court may determine market value in the light of evidence relating to

sale price of small developed plots. In such cases, deduction varying

from 20% to 75% is liable to apply depending upon nature of

development of lay out in which exemplar plot is situated.

54. In Shaji Kuriakose and another Vs. Indian Oil Corporation

Ltd. and others, (2001) 7 SCC 650, a large tract of land in village

Manakunnam, District Cochin was proposed to be acquired for setting

up a bottling plant by Indian Oil Corporation and notification under

Section 4 (1) was issued on 23.08.1990. Acquired land included 7.13

acres of land of Claimant/Land Owner-Shaji Kuriakose. Collector

vide award dated 05.05.1992 offered compensation at Rs. 1,225/- per

acre i.e. Rs. 500 per cent which was enhanced to Rs.7,000/- per Cent

by Reference Court. High Court reduced compensation to Rs.4,000/-

per Cent for wet land and Rs.6,500/- for dry land. Appeal preferred by

Claimants before Supreme Court failed. Court found that land which

was sold vide exemplar sale deed was not similarly placed with

acquired land inasmuch as there was no access to acquired land, there

existed only an internal mud road which belonged to one of the

Claimants, whose land was acquired, the land covered by exemplar

sale deed was a dry land, whereas acquired land was mostly wet land.

After acquisition, acquired land has to be reclaimed and a lot of

amount would be spent for filling it. The exemplar sale deed related to

a small piece of land while acquired land was quite large. Sale for

smaller plot fetches more consideration than larger or bigger piece of

land. Considering all these facts, Court found that determination made

by High Court was justified and dismissed appeal.

55. In Kasturi and others Vs. State of Haryana, (2003) 1 SCC

354, 84.31 acres of land in State of Haryana was proposed to be

acquired for development of residential and commercial area at Sector

13 and 23, Bhiwani, by publishing notification under Section 4 on

04.04.1986. Collector made award dated 10.11.1987 and 31.03.1988

26

determining compensation at Rs.57,500/- per acre and Rs.55,200/- per

acre which comes to around Rs. 11.81 per square yard. Reference

Court enhanced compensation to Rs.125/- per square yard. Land

Owners as well as State, both preferred appeal in High Court.

Landowners sought compensation at Rs.500/- per square yard while

State appealed for restoration of Collector's award. High Court

reduced compensation to Rs.79.98 per square yard applying 20%

deduction towards development charges. It partly allowed appeal of

State but dismissed appeals preferred by Claimants/Land-Owners.

Division Bench confirmed judgment of Single Judge hence matter

was taken to Supreme Court by Claimants/ Land-Owners. It was

contended that High Court erred in applying deduction of 20%

towards development charges and also by not enhancing

compensation to Rs.500/- per square yard as claimed by landowners.

Supreme Court found that land acquired comprised a large area and

was not developed though has potential for residential and

commercial purposes. For its development roads were to be laid,

provision for drainage was to be made and certain area was to be

earmarked for other civic amenities. The acquired land is not a small

plot located in such a way that no other development was required at

all and it could be utilized as it is, being a developed building site. In

respect of agricultural land or undeveloped land which has potential

value for housing or commercial purposes, normally 33% amount was

processed for deduction subject to variations depending upon nature

of land, location, extent of expenditure involved for development and

area required for roads and other civic amenities to develop land so as

to make plots for residential or commercial purposes. Whether land is

plain or uneven, soil of land is soft or hard having bearing on

foundation for the purpose of making construction; whether land is

situated in the midst of a developed area all around or may have a

hillock or may be low lying or may be having deep ditches, are all

relevant considerations since that would have consequences in the

amount to be spent for development. Court relied on various decisions

27

and thereafter upheld deduction of 20% towards development and

dismissed appeal of Land Owners.

56. In Lal Chand Vs. Union of India (supra), Court noticed that

deduction for development constitutes two components- one is with

reference to area required to be utilized for development work and

second is the cost of development work. It further held that deduction

for development in respect of residential plot may be higher while not

so where it is an industrial plot. Similarly, if acquired land is in a

semi-developed urban area or in any undeveloped rural area, then

deduction for development may be much less and vary from 25 to 40

percent since some basic infrastructure will already be available. The

percentage is only indicative and may vary depending upon relevant

factors. With reference to exemplars of transfer of land between

private parties, Court would also look into intrinsic evidence, i.e., the

exemplar sale deed where it recites financial difficulties of vendor and

urgent need to find money as a reason for sale or other similar factors,

like litigation or existence of some other dispute. These are all factors

constituting intrinsic evidence of a distress sale.

57. In Lal Chand Vs. Union of India (supra), Court also

observed, if acquisition is in regard to a large area of agricultural land

in a village and exemplar sale deed is also in respect of an agricultural

land in the same village, i.e. it may be possible to rely upon the sale

deed as prima facie evidence of prevailing market value even if such

land is at the other end of village, i.e. at a distance of one or two

kilometers. But, the same may not be appropriate where acquisition

relates to plots in a town or city where every locality or road has a

different value. A distance of about a kilometer may not make a

difference for the purpose of market value in a rural area but even a

distance of 50 meters may make a huge difference in market value in

urban properties. Thus, distance between two properties, the nature

and situation of property, proximity to the village or a road and

several other factors may all be relevant in determining market value.

58. In Valliyammal & others Vs. Special Land Acquisition, 2011

28

(8) JT 442, Court has looked into various earlier judgments laying

down guiding principles for determination of market value of acquired

land. Court has observed that comparable sales method of valuation is

preferred since it furnishes evidence for determination of market value

of acquired land at which a willing purchaser would pay for acquired

land if it had been sold in open market at the time of acquisition.

However, this method is not always conclusive and there are certain

factors, which are required to be fulfilled and on fulfillment of those

factors, compensation can be determined. Such factors are (a) sale

must be a genuine transaction; (b) sale deed must have been executed

at the time, proximate to the date of issue of notification under Section

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

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

size of plot of the land covered by the sales be comparable to the land

acquired. If there is dissimilarity in regard to locality, shape and size

or nature of land, court can proportionately reduce compensation

depending upon disadvantages attached with the acquired land.

Further, for determining market value, potentiality of acquired land

should also be taken into consideration. The "potentiality" means,

capacity or possibility for changing or developing into state of

actuality. It is well settled that market value of property has to be

determined having due regard to its existing condition, with all its

existing advantages and its potential possibility when let out in its

most advantageous manner. Court also said, when undeveloped or

underdeveloped land is acquired and the exemplar is in respect to

developed land, detection towards deduction can be made. Normally,

such deduction is 1/3, but it is not a hard and fast rule.

59. In Bhule Ram v. Union of India and another, JT 2014 (5) SC

110, Court in para 7 has observed that valuation of immovable

property is not an exact science, nor it can be determined like

algebraic problem, as it bounds in uncertainties and no strait-jacket

formula can be laid down for arriving at exact market value of the

land. There is always a room for conjecture, and thus court must act

29

reluctantly to venture too far in this direction. The factors such as the

nature and position of land to be acquired, adaptability and

advantages, the purpose for which the land can be used in the most

lucrative way, injurious affect resulting in damages to other

properties, its potential value, the locality, situation, size and shape of

the land, the rise of depression in the value of land in the locality

consequent to acquisition etc., are relevant factors to be considered. It

further said that value, which has to be assessed, is the value to the

owner, who parts with his property, and not the value to the new

owner, who takes it over. Fair and reasonable compensation means the

price of a willing buyer, which is to be paid to the willing seller.

Though Act does not provide for "just terms" or "just compensation",

but 'market value' is to be assessed taking into consideration the use to

which it is being put on acquisition and whether the land has unusual

or unique features or potentialities. Court then also considered as to

what is the concept of "guess work" and observed that it is not

unknown to various fields of law as it applies in the cases relating to

insurance, taxation, compensation under the Motor Vehicle Act as

well as under Labour Laws. Having said so, Court further said: -

"The court has a discretion applying the guess work to the

facts of the given case but is is not unfettered and has to be

reasonable having connection to the facts on record adduced

by the parties by way of evidence. The court further held as

under: -

"'Guess' as understood in its common parlance is an

estimate without any specific information while

"calculations" are always made with reference to specific

data. "Guesstimate" is an estimate based on a mixture

of guesswork and calculations and it is a process in

itself. At the same time "guess" cannot be treated

synonymous to "conjecture". "Guess" by itself may be a

statement or result based on unknown factors while

"conjecture" is made with a very slight amount of

30

knowledge, which is just sufficient to incline the scale of

probability. "Guesstimate" is with higher certainty than

more "guess" or a "conjecture" per se." (para 8)

(emphasis added)

60. In Bhupal Singh and others v. State of Haryana, (2015) 5

SCC 801, while above principles laid down in various cases were

reiterated, Court in para 18 of judgment, said: -

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

determine the fair market value of the acquired land is fairly

well settled by several decisions of this Court and remains no

more res integra. This Court has, inter alia, held that when

the acquired land is a large chunk of undeveloped land

having potential and was acquired for residential purpose

then while determining the fair market value of the lands on

the date of acquisition, the appropriate deductions are also

required to be made."

(emphasis added)

61.It is also reaffirmed that when an exemplar relates to small

piece of developed land and is sought to be relied to determine market

value of large tract of undeveloped acquired land, deduction can be

applied ranging between 20% to 75%. Court in para 20 of judgment

relied upon its decision in Chandrashekhar Vs. L.A. Officer, (2012)

1 SCC 390 stating that deduction has two components, one is

"development" and another with respect to the "size of the area".

Percentage of deduction was restricted in Subh Ram v. State of

Haryana, (2010) 1 SCC 444 stating that deduction of both

components should be around 1/3 each in its entirety, which would

roughly come to 67% of component of sale consideration of exemplar

sale transaction.

62. With respect to escalation of price where relied on exemplar is

of much earlier in point of time, Court in K. Devakimma and others

v. Tirumala Tirupati Devasthanam and another, 2015 (111) ALR

241 said that recourse can be taken in appropriate cases to the mode of

31

determining market value by providing appropriate escalation over the

proved market value of nearby land in previous years where there is

no evidence of any contemporaneous sale transaction or acquisition of

comparable lands in neighbourhood. The percentage of escalation

may vary from case to case so also the extent of years to determine the

rates.

63. In Chandrashekhar Versus Land Acquisition Officer

(supra), for residential layout issued by Gulbarga Development

Authority, acquisition proceedings were initiated by publishing

Notification dated 13.5.1982 under Section 4 of Act, 1894, proposing

to acquire 144 acres of land in villages Rajapur (71 acres) and

Badepur (73 acres). The land of Claimants-appellants measured 8

acres, 4 guntas in village Badepur and in connected appeal it

measured 7 acres, 7 guntas. Collector made award determining

compensation at Rs.4100/- per acre for land in village Badepur and

Rs.13,500/- for land in village Rajapur. Reference Court enhanced

compensation to Rs.1,46,000/- per acre in place of Rs.4100/- per acre

for land in village Badepur. On appeal, High Court remanded matter,

whereafter Reference Court determined compensation at

Rs.1,45,000/- per acre vide order dated 21.12.2002. High Court

reduced compensation in appeal at Rs. 65,000/-. The view taken by

High Court was upheld by Supreme Court by dismissing appeal of

Land Owners. The issue raised before Court was the extent of

deduction to be applied while determining market. It would be

interesting to notice review of various cases by Supreme Court

demonstrating that deduction applied has varied in all cases.

(a) In Brig. Sahib Singh Kalha Vs. Amritsar

Improvement Trust, (1982) 1 SCC 419, Court said where a

large area of undeveloped land is acquired, provision has to

be made for providing minimum amenities of town-life.

Accordingly, deduction of 20 percent of total acquired land

should be made for land over which infrastructure has to be

made (space for roads etc.). Besides, cause of raising

32

infrastructure like roads, electricity, water, underground

drainage, etc. is also to be considered and for this purposes

deduction would range from 20% to 33%. Thus, in all Court

upheld deductions between 40% and 53%.

(b) In Administrator General of West Bengal Vs.

Collector, Varanasi, (1988) 2 SCC 150, Court upheld

deduction of 40%.

(c) In Chimanlal Hargovinddas Vs. Special Land

Acquisition Officer, Poona and another (supra), Court

upheld deduction between 20% to 50%.

(d) In Land Acquisition Officer Revenue Divisional

Officer, Chottor vs. L. Kamalamma (Smt.) Dead by and

others, (1998) 2 SCC 385, Court upheld deduction of 40% as

development cost.

(e) In Kasturi and others vs. State of Haryana (supra),

1/3rd deduction was upheld on development, clarifying that

deduction can be more or less of 1/3rd depending upon facts

of the case.

(f) In Land Acquisition Officer vs. Nookala Rajamallu

and others, (2003) 12 SCC 334, Court upheld 53%

deduction.

(g) In V. Hanumantha Reddy (Dead) Versus Land

Acquisition Officer, (2003) 12 SCC 642, Court upheld 37%

deduction towards development.

(h) In Viluben Jhalejar Contractor Versus State of

Gujarat, (2005) 4 SCC 789, Court observed that deduction

of 20 to 50% towards development is permissible.

(i) In Atma Singh Versus State of Haryana and

another, (2008)2 SCC 568, 20% deduction towards largeness

of area was applied.

(j) In Subh Ram and others Vs. State of Haryana and

others, (supra), Court observed that where valuation of a

large area of agricultural or undeveloped land has to be

33

determined on the basis of sale price of a small developed

plot, standard deductions would be 1/3rd towards

infrastructural space and 1/3 towards infrastructural

developmental cost, i.e. 2/3rd % i.e. 67%.

(k) In Andhra Pradesh Housing Board Versus K.

Manohar Reddy and others, (2010) 12 SCC 707, it was

observed that deductions on account of development could

vary between 20% to 75%.

(l) In Special Land Acquisition Officer and another

Versus M.K. Rafiq Sahib, (2011) 7 SCC 714, Court was

upheld 60% deduction.

64.In this background of authorities, Court in Chandrashekhar

Versus Land Acquisition Officer (supra), observed that quantum of

deduction towards development is on account of two components. In

this regard it said in para 19.1 and 19.2 as under :

“ 19.1. Firstly, space/area which would have to be left out,

for providing indispensable amenities like formation of roads

and adjoining pavements, laying of sewers and rain/flood

water drains, overhead water tanks and water lines, water

and effluent treatment plants, electricity sub-stations,

electricity lines and street lights, telecommunication towers

etc. Besides the aforesaid, land has also to be kept apart for

parks, gardens and playgrounds. Additionally, development

includes provision of civic amenities like educational

institutions, dispensaries and hospitals, police stations, petrol

pumps etc. This "first component", may conveniently be

referred to as deductions for keeping aside area/space for

providing developmental infrastructure.

19.2 Secondly, deduction has to be made for the

expenditure/expense which is likely to be incurred in

providing and raising the infrastructure and civic amenities

referred to above, including costs for levelling hillocks and

filling up low lying lands and ditches, plotting out smaller

34

plots and the like. This "second component" may

conveniently be referred to as deductions for developmental

expenditure /expense.”

(emphasis added)

65.Having said so Court in para 23 said:-

“23. Having given our thoughtful consideration to the

analysis of the legal position referred to in the foregoing two

paragraphs, we are of the view that there is no discrepancy

on the issue, in the recent judgments of this Court. In our

view, for the "first component" under the head of

"development", deduction of 33-1/3 percent can be made.

Likewise, for the "second component" under the head of

"development" a further deduction of 33-1/3 percent can

additionally be made. The facts and circumstances of each

case would determine the actual component of deduction, for

each of the two components. Yet under the head of

"development", the applied deduction should not exceed 67

percent. That should be treated as the upper benchmark.

This would mean, that even if deduction under one or the

other of the two components exceeds 33-1/3 percent, the two

components under the head of "development" put together,

should not exceed the upper benchmark.”

(emphasis added)

66.The above principles have further been followed and reiterated

in Atma Singh Versus State of Haryana and another (supra),

Nirmal Singh Vs. State of Haryana, (2015) 2 SCC 160 and Major

General Kapil Mehra and others Vs. Union Of India and another

(2015) 2 SCC 262.

67.Decision of this Court in Power Grid Corporation Vs. State

of U.P. and Others, (2019) 1 ADJ 753 also reiterates the said

principles.

68.In Sabhia Mohammed Yusuf Abdul Hamid Mulla (d) by

35

LRS and others vs. Special Land Acquisition Officer and others

(2012) 7 SCC 595 Reference Court, while determining market value

observed that though land was agricultural but had non-agricultural

potential and determined market value. High Court made a deduction

of 15% towards development charges.

69.Referring to an earlier decision in Viluben Jhalejar

Contractor vs. State of Gujrat, (2005) 4 SCC 789, Court in Sabhia

Mohammed Yusuf Abdul Hamid Mulla (supra) said that

development charges may range between 20% to 50% of the total

price. Court further observed:

"in fixing market value of the acquired land which is

undeveloped and under-developed the courts have generally

approved deduction of 1/3rd of the market value towards

development cost except when no development is required to

be made for implementation of the public purpose for which

land is acquired." (emphasis added)

70.Above authorities and several others have been considered in

Major General Kapil Mehra Vs. Union of India and another

(supra), and Court has observed that while fixing market value of

acquired land, Land Acquisition Collector is required to keep in mind

the following factors:-

(i)Existing geographical situation of land.

(ii)Existing use of land.

(iii)Already available advantages, like proximity to

National or State Highway or road and/ or developed area,

(iv)Market value of other land situated in the same

locality/ village/ area or adjacent or very near the acquired

land.

71.Court has further said that market value is determined with

reference to the market sale of comparable land in the neighbourhood

by a willing seller to a willing buyer on or before the date of

preliminary notification i.e. under Section 4(1) of 1894 Act, as that

would give a fair indication of market value.

72.With respect to factors of comparable sales, Court in Major

36

General Kapil Mehra Vs. Union of India and another (supra) has

referred to its earlier decision in Urban Water Supply and Drainage

Board and Others Versus K.S. Gangadharappa and another,

(2009) 11 SCC 164, and has observed that element of speculation is

reduced to minimum if underlying principles of fixation of market

value with reference to comparable sales are satisfied, i.e.,(i) when

sale is within a reasonable time of the date 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.

73.Where there are several exemplars showing different rates, it

has been said that averaging is not permissible, if land acquired are of

different types and situated in different locations. But where there are

several sales of similar land, more or less, at the same time, prices

whereof have marginal variation, averaging thereof is permissible. It

is further held that for the purpose of fixation of fair and reasonable

market value of any type of land, abnormally highvalue or abnormally

low value sales should be carefully discarded. If number of sale deeds

of the same locality and of same period with short intervals are

available, average price of available number of sale deeds shall be

considered as a fair and reasonable market price. Ultimately, it is in

the interest of justice that land losers are awarded fair compensation.

All attempts should be made to award fair compensation to the extent

possible on the basis of accessibility to different kinds of roads,

locational advantages etc.

74.‘Freehold land’ and ‘leasehold land’, both these terms are

conceptually different. If a property, subject to lease and in possession

of a lessee, is offered for sale by an owner to a prospective private

purchaser, the purchaser being aware that on purchase he will get only

title and not possession and that the sale in his favour will be subject

to encumbrance namely, the lease, he will offer a price taking note of

the encumbrances. Naturally, such a price would be less than the price

37

of a property without any encumbrance. But when a land is acquired

free from encumbrances, market value of the same will certainly be

higher.

75.In Urban Water Supply and Drainage Board (supra), Court

also considered deductions towards competitive bidding and

development. In paragraph no. 39, Court said :

“We have referred to various decisions of this Court on

deduction towards development to stress upon the point that

deduction towards development depends upon the nature and

location of the acquired land. The deduction includes

components of land required to be set apart under the

building rules for roads, sewage, electricity, parks and other

common facilities and also deduction towards development

charges like laying of roads, construction of sewerage.”

76.Thus, having gone through the aforesaid decisions, we find that

no absolute principle or Rule of Thumb has been laid down in any of

the authorities as to how much deduction should be made. The

substance of all the decisions is that deduction should be applied

where undeveloped and under-developed land is acquired and it can

vary from 10% to 70%, depending upon various factors of each case.

Similarly, if area of land exemplar is very small, appropriate

deduction can be made.

77. Normally, Courts have held that exemplars should be such

which are before the date of notification under Section 4(1) of Act,

1894 but an exemplar sale deed of a subsequent period of date of

acquisition notification is not completely ruled out to be relevant

document provided circumstances to justify the same are available.

78.In State of U.P. Vs. Major Jitendra Kumar and others, AIR

1982 SC 876, notification under Section 4 was published on 6.1.1948.

Court determined rate of compensation relying on a sale deed dated

11.7.1951, i.e., a document executed after almost three and half years

after the date of acquisition notification. Court upheld reliance on

38

such document, observing, if there is no material to show that there

was any fluctuation in market rate between the date of acquisition and

the date of concerned sale deed, such document may be considered as

a relevant material in absence of any other apt evidence. This view

was followed in a subsequent decision, i.e., Administrator General

of West Bengal Vs. Collector, Varanasi, AIR 1998 SC 943, where it

is held:

"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."

(emphasis added)

79.In certain cases, where nature, extent, size, surrounding and

location of acquired land greatly varies, Courts have applied “belting

system” for determination of market rate of acquired land. It is applied

in appropriate cases when different parcels of land with different

survey numbers belong to different owners and having different

locations are acquired. Such chunk cannot be taken as a compact

block. In Bijender and others Vs. State of Haryana and others

(2018) 11 SCC 180, Court in para 34 of judgment said:

“The acquired land comprises of more than around 300

acres or so and is thus a very large in chunk. The acquired

land belonged to several landowners and obviously so being

so large in volume. One side of the acquired land is abutting

the road. The land has surrounding with some kind of

activities in nearby areas and this shows that the acquired

land has some potential.”

39

80.In Belting System, acquired land is usually divided in two or

three belts depending upon the facts of each case. Appreciating this

aspect in para 35 of judgment in Bijender and others Vs. State of

Haryana and others (supra), Court said:

“The market value of the front belt abutting the main road is

taken to fetch maximum value whereas the second belt fetches

two third or so of the rate determined in relation to the first

belt and the third belt, if considered proper to carve out,

fetches half or so of the maximum. It is again depending upon

facts of each case.”

81.In para 49 of judgment, Court further said:

“49. It is also held that the value of the smaller plots, which

is always on the higher side, is usually not taken into

consideration for determining the large block of the land.

One of the reasons being that the substantial area of the large

block is used for development of sites like laying out the

roads, drains sewers, water and electricity lines and several

civic amenities and to provide these facilities, lot of time is

consumed. The deduction is, therefore, made, which ranges

from 20% to 50% or in appropriate cases even more.”

82.In Trishala Jain and another Vs. State of Uttranchal and

another, (2011) 6 SCC 47, for the purposes of construction of

Government Polytechnic Institute at Dehradun, notification under

Section 4 was published on 30

th

January, 1992, proposing to acquire

12.85 acres of land situated in village Sewala Kalan, Pargana

Kendriya Doon, District Dehradun. The area of land belonging to

Claimants-Land Owner, Trishala Jain and others, was 4.58 acres and

3.031 acres respectively. Collector offered compensation applying

“belting system,” for first belt at Rs.9,78,223.40 per acre, second belt

at Rs. 6,52,482.27 per acre and third belt at Rs. 4,39,362.70 per acre.

Reference Court held 'belting system' applied by Collector improper

observing that entire land having been acquired for one purpose, there

was no justification for application of 'belting system'. Relying on two

40

exemplar sale deeds dated 26.11.1991 and 17.11.1991 it awarded

compensation at Rs. 5,12,000/- per bigha after applying 20%

deduction to gross market value of Rs.6,40,000/- per bigha. In appeal,

High Court upheld view taken by Reference Court that there was no

justification for applying “belting system” but raised deduction from

20% to 33.33% and hence determined market value at Rs. 4,26,667/-

per bigha. The aforesaid deduction was applied on account of

“development charges”. Appeal was taken to Supreme Court by

Claimants/Land-Owners. Four questions formulated by Supreme

Court are as under:

“I. Whether or not the 'belting system' ought to have been

applied for determination of fair market value of the acquired

land?

II. What should be the just and fair market value of the

acquired land on the date of issuance of notification under

Section of the Act?

III. Whether in the facts and circumstances of the present

case there ought to be any deduction after determining the

fair market value of the land?

IV. What compensation and benefits are the claimants

entitled to?”

83.Court upheld the view taken by courts below that application of

“belting system” was unjustified since land as a whole was similarly

placed and surrounded by developed areas and proposed to be used

for one purpose, i.e., construction of Government Polytechnic

Institute. Court then also held that deduction towards development is

justified in certain circumstances but how much deduction is to be

applied, will depend upon individual facts of the case. In para 39 of

judgment, Court said:

“39.The law with regard to applying the principle of

deduction to the determined market value of the acquired

land is quite consistent, though, of course, the extent of

deduction has varied very widely depending on the facts and

41

circumstances of a given case. In other words, it is not

possible to state precisely the exact deduction which could be

made uniformly applicable to all the cases. Normally the rule

stated by this Court consistently, in its different judgments, is

that deduction is to be applied on account of carrying out

development activities like providing roads or civic

amenities such as electricity, water etc. when the land has

been acquired for construction of residential, commercial

or institutional projects. It shall also be applied where the

sale instances (exemplars) relate to smaller pieces of land

and in comparison the acquisition relates to a large tract of

land.”

(emphasis added)

84.Further in paras 41 and 44 of judgment, Court said:

“41.The cases where the acquired land itself is fully

developed and has all essential amenities, before

acquisition, for the purpose for which it is acquired

requiring no additional expenditure for its development, falls

under the purview of cases of `no deduction'. Furthermore,

where the evidence led by the parties is of such instances

where the compensation paid is comparable, i.e. exemplar

lands have all the features comparable to the proposed

acquired land, including that of size, is another category of

cases where principle of `no deduction' may be applied.

These may be the cases where least or no deduction could be

made. Such cases are exceptional and/or rare as normally

the lands which are proposed to be acquired for

development purposes would be agricultural lands and/or

semi or haphazardly developed lands at the time of issuance

of notification under Section 4(1) of the Act, which is the

relevant time to be taken into consideration for all purposes

and intents for determining the market value of the land in

question.”

42

“44.It is thus evident from the above enunciated principle

that the acquired land has to be more or less developed land

as its developed surrounding areas, with all amenities and

facilities and is fit to be used for the purpose for which it is

acquired without any further expenditure, before such land

could be considered for no deduction. Similarly the sale

instances even of smaller plots could be considered for

determining the market value of a larger chunk of land

with some deduction unless, there was comparability in

potential, utilisation, amenities and infrastructure with

hardly any distinction. On such principles each case would

have to be considered on its own merits.”

(emphasis added)

85.In Union of India and others Vs. Mangatu Ram (1997) 6

SCC 59, a Three-Judge Bench of Supreme Court considered the

question, when 'belting system' should be applied and held that when

a large extent of land under acquisition comprises of lands of several

persons and some lands are abutting the main road and some lands are

in the interior, the same would not have the uniform rate of market

value. Reasonable demarcation/classification should be made before

determination of the compensation. Upholding the 'belting system' to

be applied in that case, Court said that lands situated around 500 yards

from the main road should be classified as 'A' class land irrespective

of the quality of the land and uniform rate of compensation should be

applied to the same and remaining should be placed in category 'B'

and applied another but lesser rate. Therein an argument was made

that if different rates are applied, it will violate fundamental right of

equality enshrined under Article 14. Rejecting it, Court said:

“It is equally settled law that Article 14 has no application

vis-a-vis determination of the compensation for the obvious

reason that it is hardly possible that all the lands are equal

in all respects; they differ from one another and bear

different features, e.g., nature, quality and character;

43

therefore, all the lands do not command the same market

value when they are sold to a willing purchaser by a willing

vendor in the open market.”

86.Court further held:

“ … the doctrine of equality in the matter of payment of

compensation under Article 14 is inapplicable.”

87.In Wazir and others State of Haryana, (2019) 3 SCJ 506

(SC), a very large chunk of land i.e. about 1500 acres spreading in

several villages, namely, Kasan, Bas Kusla, Naharpur Kasan,

Manesar, Bas Haria and Dhana, Tehsil and District Gurgaon was

acquired by publishing Notifications under Section 4(1) of Act, 1894

on 06.03.2002, 07.03.2002 and 26.02.2002. Declarations under

Section 6 were published on 15.11.2002, 25.11.2002 and 18.11.2002.

Sub-Divisional Officer (Compensation)-cum-Land Acquisition

Collector (hereinafter referred to as “LAO”) found market value of

land different in different villages and made award offering

compensation on various rates ranging from Rs. 3,60,000/- per acre to

10 lakhs per acre. The land in village Manesar was offered highest

rate of compensation of Rs.10 lakhs per acre while in Villages Kasan

and Naharpur Kasan, Rs.7,50,000/- and 7,20,000/- per acre

respectively were offered while in Villages Bas Kusla, Bas Haria and

Dhana, market value was determined at Rs.3,60,000/- per acre.

Dissatisfied with said award of LAO, Land-Owners sought Reference

under Section 18 of Act, 1894. When matter was pending, in another

matter where Notification under Section 4(1) was published on

15.11.1994 acquiring land in Villages Manesar, Naharpur Kasan,

Khoh and Kasan, Supreme Court in Harayana State Industrial

Development Corporation Vs. Pran Sukh and Ors., (2010) 11 SCC

175 determined market value at Rs.20 lakhs per acre. Relying thereon,

Reference Court vide judgment and award dated 30.11.2010,

determined market value at Rs.37,40,230/- per acre by allowing

annual increase of 12 per cent per annum. High Court affirmed the

aforesaid rate whereafter matter went in appeals to Supreme Court in

44

Harayana State Industrial Development Corporation Vs. Udal

and Another, (2013) 14 SCC 506. Supreme Court allowed appeals

and remanded matter to High Court observing that flat enhancement

of 12 per cent per annum was not justified. High Court in its turn vide

judgment dated 06.10.2015 remanded matter to Reference Court for

fresh disposal. In appeal, this judgment of High Court was set aside

and matter was again remanded to High Court. Again it was decided

by High Court by applying cumulative enhancement at the rate of 12

to 15 per cent per annum over base rate of Rs.20 lakhs per acre but

thereafter applying an over all rate deduction of 10 to 20 per cent.

Market rate determined by High Court in fact came to Rs.41.40 lakhs

for land acquired in Villages Naharpur Kasan, Kasan, Bas Haria, Bas

Kusla and Dhana. However, in respect of land acquired in Village

Manesar, it applied 50 per cent enhancement and determined market

value at the rate of Rs.62.10 lakhs per acre. This judgment when came

up for consideration before Supreme Court in Wazir and others

State of Haryana (supra), it was held that annual appreciation of

rates depends on various factors. There is no hard and fast rule as to

how much appreciation will apply and there cannot be any uniformity

in this regard since it depends upon different factors. Court found that

different appreciation was allowed from time to time in different cases

as under:-

(i)10 per cent per annum appreciation was allowed in Ranjit

Singh Vs. Union Territory of Chandigarh, (1992) 4 SCC

659; Land Acquisition Officer and Revenue Divisional

Officer Vs. Ramanjulu, (2005) 9 SCC 594.

(ii)15 per cent per annum escalation was accepted in Krishi

Utpadan Mandi Samiti Vs. Bipin Kumar, (2004) 2 SCC

283.

88.Considering above authorities, Supreme Court held that

increase in land prices depends on four factors: (i) situation of land;

(ii) nature of development in surrounding area; (iii) availability of

45

land for development in area; and (iv) demand for land in area. In

rural areas, unless there is any prospect of development in the vicinity,

increase in prices would be slow, steady and gradual, without any

sudden spurts or jumps. Contrary thereto, in urban and semi-urban

areas, where development is faster, demand for land is high and

construction activities are going on all around, escalation in market

price would be at a much higher rate as comparing to rural areas. In

some pockets in big cities, due to rapid development and high demand

for land, escalations in prices had touched even 30 per cent to 50 per

cent or more, per year, during nineties. Similarly, in remote rural

areas, where there was no chance of any development and hardly any

buyers, prices stagnated for years and rose marginally at a nominal

rate of 1 or 2 per cent per annum. Thus there is a significant difference

in increase of market value of land in urban/semi-urban areas vis-a-vis

rural areas. Court said, if increase in market value in urban/semi-

urban areas is about 10 to 15 per cent per annum, corresponding

increases in rural areas would, at the best, be only around half of it,

i.e. 5 to 7 per cent. If, there is any special reason for applying higher

rate of increase that may be considered in the light of special facts

and evidence brought before Court in this regard. Consequently,

Supreme Court held that 7.5 per cent per annum appreciation would

be sufficient and reasonable to determine market value of acquired

land. Then, Court also considered that acquired land, though relates to

common acquisition proceedings, but situate in different villages. It

was also evident that valuation was different in different villages and

it gives rise to another question “whether two sets of villages ought to

be given different treatment or be clubbed and put at the same level

for the purpose of payment of compensation for land acquired under

Act, 1894”. After considering sale exemplars and other evidence,

Court held that market value of land acquired in Villages Bas Kusla,

Bas Haria and Dhana, should be same i.e. Rs.28.77 lakhs per acre, for

Villages Naharpur Kasan and Kasan, market value was determined at

Rs.37.54 lakhs per acre and for Village Manesar, it was determined at

46

Rs.56.31 lakhs per acre.

89.The market value determined by Reference Court in the case in

hand, thus has to be examined in the light of aforesaid facts and

exposition of law.

90.As already said, defendants did not file any sale deed exemplar

before Reference Court. State of U.P.-defendants 1 and 2 filed only a

copy of CC Form (Paper No. 67C1) showing payment of

Rs.17,80,561/- to Land-Owners on 02.04.2009. Appellant, who was

impleaded as defendant 3 before Reference Court, also filed a copy of

CC Form and a list of payments made to Tenure Holders and also

minutes of meeting of BKDA held on 17.01.2009. These were the

documents showing that on some agreement between Land-Owners

and BKDA, payment of compensation was made. No exemplar was

cited by appellant before Reference Court. An attempt was made on

behalf of appellant to show that since compensation at the rate of

Rs.498/- per square meter was accepted by 72 farmers out of 130

whose land were acquired and 22 farmers including respondents-

Land-Owners have also received compensation awarded by SLAO,

therefore, now they neither can dispute rate nor claim for higher rate

of compensation. Reference Court while deciding Issue 4, has

observed that during pendency of Reference, if compensation has

been received by Land-Owners, it will not defeat their right to get

determination of appropriate market value and Reference will not

become bad. There are various reasons for acceptance of

compensation by Land-Owners. Many times when possession of land

is taken away by State, it means the only source of livelihood is taken

away and Land-Owners would find it extremely difficult to sustain

themselves and their family what to talk of contesting litigation. In

such circumstances, he/they is/are forced by circumstances to

compromise with whatever amount he/they can get at the earliest,

which is necessary for their survival. Sometimes some Land-Owners

find it difficult to engage themselves in long drawn litigation hence

47

surrender themselves for compromise. There may be various reasons.

All these facts will not go against Respondent/Land-Owners.

However, if compensation was paid during pendency of Reference

since dispute was already raised by them and once Reference is made,

Land-Owners are entitled to have reference decided by determination

of market value as per Section 23 of Act, 1894.

91.Now, we go to other evidence which comprised of oral

evidence adduced by parties and documentary evidence adduced by

Claimant-Land-Owners.

92.Hence, we would first like to refer to oral evidence adduced by

appellant in Court below. Anil Kumar Singh, Suit Clerk of

Bulandshahar Development Authority, has deposed as D.W.-1. In

examination-in-chief, he has filed his affidavit stating that award was

made in Kalindi Kunj Awasiya Yojna in respect of acquisition of

52.661 hectares of land and determining market value at Rs.298/- per

square meter and the said determination was in accordance with law.

In cross examination, he said that he used to sit in the office of

Bulandshahar Development Authority and has never seen acquired

land. He also stated that whatever he has said in Paragraph 2 of the

affidavit with regard to award and determination of market value, he

has no idea about it and has no idea about determination of market

value. He has made statement only on the basis of award of SLAO.

His evidence therefore is totally irrelevant for the purpose of

determining market value as to what should be market value of land in

question.

93.Second defendant's witness is Harendra Kumar, Amin, Land

Acquisition working in the office of SLAO, Bulandshahar, who was

examined as D.W.-2. He said that in Khata No.1005/1069, Gata

No.914, which has total area of 0.808 hectare i.e. 8080 square meters,

only 5961.50 square meters land was acquired and 2118.50 square

meters land was excluded vide acquisition Notifications dated

08.02.2004 published under Section 4 and 07.10.2005 published under

48

Section 6 of Act, 1894. SLAO vide award dated 29.7.2008 determined

market value at Rs.178.92 per square meter. Claimants' demand of

compensation at the rate of Rs.50,000 to 70,000/- is not justified as it

is highly excessive. In acquired land, a village market used to be held

every month. Acquired land is not recorded in Revenue records as

'Abadi'. Exemplars cited by Claimants-Land-Owners are in respect of

small pieces of residential land. He lastly said that award given by

SLAO determines appropriate and correct market value. In cross

examination, however he said that it is true that in Gata No.914 (area

0.808 hectare) land has been acquired and it is correct that 2118.50

square meter of land has also been acquired. He has seen acquired

land but was not aware that a cattle market is also held in disputed

land. He was not posted in area when Notification under Section 4 of

Act, 1894 was published but has joined there only in July, 2007. He

has seen acquired land for the first time in 2008. He however,

admitted that land is abutting Grand Trunk Road. However, he was

not aware as to what was the circle rate of land abutting Grand Trunk

Road when land was acquired.

94.The third and last witness produced by defendant-appellant is

R.P. Singh, Assistant Engineer, BKDA, who was examined as D.W.-

3. He also filed affidavit in examination-in-chief and stated that area

of land of Claimants/Land-Owners i.e. respondents, is 5961.50 square

meter since claimants-respondents had already sold 2118.50 square

meters land before acquisition. Land when developed results in

sparing 40 to 50 per cent of land for the purpose of Roads, Parks,

Sewerages, Over Head Tanks etc. An agreement was entered between

BKDA and representatives of Farmers in Board's meeting dated

17.01.2009 and it was agreed that compensation shall be paid at

Rs.498/- per square meter. Total 130 Land-Owners' land was acquired

out of which 72 have entered into agreement and 22 have already

received compensation which included Claimant-Respondents also. In

cross examination, however he said that whatever compensation has

49

been received by Hamid Ali i.e. respondent no.1 (now deceased and

substituted by legal heirs), was from the office of SLAO. Besides,

Hamid Ali has not executed any agreement or settlement with BKDA.

He specifically stated that Hamid Ali has not received any

compensation from BKDA except what he has received from office of

SLAO. He also admitted that entire area of 0.808 hectare of Gata

No.914 has been acquired though admittedly Hamid Ali and Zahid Ali

had already sold 2118.50 square meters of land before acquisition but

entire land of Gata No.914 has been acquired. Award has been made

by SLAO in respect to aforesaid Gata number for entire area 0.808

hectare in the name of Hamid Ali. He said that as per record, acquired

land was uneven and forest though he has never seen acquired land

before 01.08.2012. He was not aware of the date on which Hamid Ali

received compensation from the office of SLAO. Acquired land does

not touch Grand Trunk Road and there is no Inter College in the

vicinity. Bharat Vikas Parishad Girls Inter College is at distance but

he cannot give actual distance. On the North-East side of acquired

land, there is a school adjacent to it and on North-West side, there is

Grand Trunk. Road. On disputed land, cattle market is never held

though it is held on two other lands which are also acquired and in

vicinity of such land, near main road, there is a Petrol Pump and Bus

Stand at a distance from acquired land.

95.Both these witness, D.W.-2 and D.W.3- have no idea of

development activities, whether existed or not, near acquired land at

the time of acquisition as they were not present at that time and had

come to join their offices subsequently. D.W.-2 joined in July, 2007

and D.W.-3 joined on 01.08.2012.

96.Now, we come to evidence adduced by Claimants/Land-

Owners i.e. defendants. Statement of P.W.-1 is placed on paper-book.

Since Hamid Ali had died when reference was pending, respondent

no.1/1, Sami Ahmad Khan has been examined as P.W.-1. In

examination-in-chief, he has said that land in Gata No.914 was

50

declared non agricultural under Section 143 of U.P. Zamindari

Abolition and Land Reforms Act, 1950 (hereinafter referred to as

“Act, 1950”). There used to be held cattle market and village market.

In evidence, he adduced Khatauni and Revenue maps as Paper

Nos.33C and 34C. Acquired land comes within National Capital

Region which has been declared under National Capital Region

Planning Board Act, 1985 (hereinafter referred to as “Act, 1985”). It

is situated on Grand Trunk Road which has now been declared as

National Highway-91. Acquired land is near industrial estate wherein

government offices and government officials' residence are also

existing. A number of Crockeries and Autoware factories are situated

near acquired land. Well known Potteries like Jagdish Udyog, VJP

Pottery, Dadu Pottery, Blue Art Pottery etc. are existing near acquired

land. On the opposite side of acquired land, Tehsil office and

residence of Tehsildar and Nayab Tehsildar are existing. Further, even

Sub-Treasury Office and office and residence of Deputy Collector are

also existing in front of acquired land. Similarly, office and residence

of Deputy Superintendent of Police is also in front of acquired land.

At a distance of 50 meters, Krishi Utpadan Mandi Samiti and its

office is situated. Several shops, tractor agencies, transport agencies,

residential colonies are also there. Vinayak Hotel and Anchal

Marriage Home are at about 150 meters from acquired land. P.W.D.

office is near acquired land. Zenith Public School and Bharat Vikas

Parishad Girls Inter College are about 100 meters away from acquired

land. A Polytechnic College is near acquired land. A famous Nav

Durga Shakti Temple is about 500 meters from acquired land and

within 200 meters, there is a Fire Station. Some land from Gata

No.914 has been sold by Claimants-respondents to different persons

for commercial purposes prior to acquisition notifications were issued.

97.Besides, details of sale deed exemplars cited by

Claimants/Land-Owners, are placed in the form of chart as under:-

Sl.Date of saleVendorVendeePlot No.Area (inRate (in Paper

51

No. deed square

meter)

square

meter)

No.

1 02/05/03Sami

Ahmad

Khan

Amar

Singh

914 16.734184/-36C

226.03.2003Hamid

Ali and

Zahid

Ali

Smt.

Lajjo

Devi

914 16.733586/-37C

327.03.2002Hamid

Ali and

Zahid

Ali

Smt.

Anita

Sharma

914 16.733586/-38C

427.03.2002Hamid

Ali and

Zahid

Ali

Smt.

Rantana

Devi

914 16.733586/-39C

531.10.2003Hamid

Ali

Kamal

Singh

Chauhan

880 25.273561/-40C

621.01.2004Hamid

Ali

Smt.

Mahrani

Devi

880 25.273561/-41C

714.06.2004Hamid

Ali

Munna

Lal

880 25.273561/-42C

815.01.2004Hamid

Ali

Balbeer

Singh

Brijendr

a Singh

880 25.273961/-43C

98.P.W.-1 also said that at the time of execution of aforesaid sale

deeds, prescribed circle rate determined by Collector, Bulandshahar,

was Rs.9,000/- per square meter. Copy of circle rate was filed as

Paper No.35C. Compensation was received by Hamid Ali under

protest. He claimed compensation at Rs.70,000/- per square meter. In

cross examination, P.W.-1 admitted that Hamid Ali received

compensation from the office of SLAO under protest. Gata No.914

was Abadi since declaration under Section 143 of Act, 1950 was

already made. Land was outside municipal area. He did not enter into

any settlement with BKDA. Acquired land is about 30 Kilometres

from boundary of District Gautam Budh Nagar and 35 to 40

Kilometres from Sikandarbad, 5 Kilometres from Khurja Station and

5 Kilometres from Yagyadutt Medical College.

52

99.Reference Court on the basis of evidence on record, has found

that area near acquired land, was well developed at the time of

acquisition; it was being used for non agricultural purposes; land was

declared non agricultural under Section 143 of Act, 1950 in the year

1984; had great potential for development of residential purpose; there

was abadi at Khurja Town in vicinity; Layout plan was already

submitted to BKDA; more than 2 years prior to Notification under

Section 4 of Act, 1894, Land-Owners of acquired land, had started

selling plots for residential and commercial purposes at a much higher

rate; with regard to shape of land, acquired land is rectangular and

frontage is lesser than depth of acquired land.

100.We find that entire Plot No.914 was acquired besides other

plots, numbers whereof are given on Paper No.10A which is copy of

award dated 29.7.2008 of SLAO. Out of this entire land, Respondents-

Land-Owners have sold some part of land to various other parties who

also filed their objections and details are given in award of SLAO as

under:-

“ xkVk la[;k 914 %

iz'uxr izdj.k esa xkVk la[;k 914 ls 0-808 gsDVs;j Hkwfe dk

LFkk;h :i ls vtZu fd;k tk jgk gSA mDr xkVk la0 914 ls fodzhr

gqbZ Hkwfe ds laca/ak esa fuEu vkifRr dk;kZy; esa izkIr gqbZ]

ftuesa cSukesa dh Nk;k izfr;ka layXu dj izfrdj dh ekax dh xbZ gS%

fodzhr jdckcSukek fnukad

1&lrsUnziky flag iq= ju flag137-31 oxZ ehVj 11&10&2002

2&Å"kk nsoh iRuh rstiky flag83-64 oxZ ehVj04&01&2002

3&lq'khy dqekj 'kekZ] vfer dqekj

iq=x.k gjukjk;.k132-30 oxZehVj25&02&2002

4&losZ'k nsoh iRuh iwju flag125-46 oxZehVj 25&07&2001

5&iq"ik nsoh iRuh lrsUnziky flag137-31 oxZehVj11&10&2002

6&jkts'k dqekj iq= juohj flag154-91 oxZehVj18&07&2003

7⪫ dqekj iq= juohj flag126 oxZehVj21&02&2003

8&fueZyknsoh iRuh ';kSnku flag209-11 oxZ ehVj05&04&2003

xkVk la[;k 914 ls v/;kfIr Hkwfe ds ckcr mDr vkifRrdrkZvksa us

cSukeksa dh Nk;k izfr layXu dj izfrdj fn;s tkus dh ekax dh gSA lkFk gh

Hkwfe dks Hkkofud {kerk dh n'kkZrs gq, izfrdj dh ekax dh x;h gSA dqN

53

vkifRrdrkZvksa us Hkwfe dks vtZu ls eqDr fd;s tkus dk mYys[k fd;k x;k

gSA iz'uxr izdj.k esa /kkjk&17 dk izkfo/kku ykxw gksus ds dkj.k v/;kfIr

fudk; dks fu;ekuqlkj Hkwfe dk dCtk fn;k tk pqdk gSA vr% Hkwfe dks vtZu

eqDr fd;s tkus dk iz'u ugha mBrk gSA v/;kfIr Hkwfe dk izfrdj fu;ekuqlkj

Hkwfe dh {kerkuqlkj cktkjh nj ij ns; gSA fodz; dh x;h mDr Hkwfe ls

lacaf/kr dzsrkx.k ,oa fodzsrkx.k dh lquokbZ izfrdj Hkqxrku ds le; djrs

gq, fodzsrkx.k ls 'kiFk i= vkfn ysus ds mijkUr iw.kZ laUrqf"V dh n'kk esa

Hkwfe dk izfrdj fu;ekuqlkj Hkqxrku fd;k tk;sxkA” (emphasis added)

“Gata No. 914

In the case-in-question, 0.0808 hectares of land, out of

Gata No. 914, is being permanently acquired. The following

objections have been received in the office regarding the land sold

out of the said Gata No. 914; wherein compensation has been

sought by enclosing the photocopies of the sale-deeds.

Sold Area Date of Sale-

Deed

1.Satendra Pal Singh s/o

Rann Singh

137.31 Sq. Mtrs.11.10.2002

2.Usha Devi w/o Tejpal

Singh

83.64 Sq. Mtrs.04.01.2002

3.Sushil Kumar Sharma,

Amit Kumar sons of

Harnarayan

132.30 Sq. Mtrs.25.02.2002

4.Sarvesh Devi w/o Pooran

Singh

125.46 Sq. Mtrs.25.07.2001

5.Pushpa Devi w/o

Satendra Pal Singh

137.31 Sq. Mtrs.11.10.2002

6.Rajesh Kumar s/o

Ranveer Singh

154.91 Sq. Mtrs.18.07.2003

7.Sanjay Kumar s/o

Ranveer Singh

126 Sq. Mtrs. 21.02.2003

8.Nirmala Devi w/o

Shyaudan Singh

209.11 Sq. Mtrs.05.04.2003

By enclosing the photocopies of the sale deeds, the said objectors

have sought compensation for the land acquired out of Gata No.

914. Along with this, compensation for the land has been sought

by showing its building capabilities. Some objectors have asked

for the release of the land from acquisition. In the case-in-

question, on the provisions of section 17 being applicable, the

possession of the land has been as per rules given to the

acquiring body. Hence, there arises no question for releasing the

54

land from acquisition. The compensation of the land so acquired

is payable as per rules at the market rate as per the capacity of

the land. The compensation for land shall be paid as per rules by

hearing at the time of payment the concerned buyers and sellers

related to the said sold land and on being satisfied consequent

upon acceptance of affidavits etc. from the sellers.” (English

translation by Court)

101.Since sale deeds were executed in respect of other purchaser

between 25.07.2001 to 18.07.2003 and area of land transferred to

vendors between aforesaid period vary from 83.64 square meters to

209.11 square meters; rates on which land was sold, also varied from

Rs.3,500/- and odd per square meters to Rs.4184/- per square meter.

Therefore, these Land-Owners/purchasers were also entitled for

payment of compensation at the rate which should not have been

lower than the rate on which they have purchased land in question.

However, those purchasers are not before us, therefore, we have to

examine claim of respondents only who were initially owners of entire

land of Gata No.914 area 0.808 hectare out of which, as per their own

admission, 2118.50 square meter land was sold and 5961.50 square

meter land remained with them and rate of compensation has to be

examined in respect of aforesaid land.

102.Sale deed exemplars relied by Reference Court are in respect of

very small size of land but this is also evident that land in question

was already being sold as commercial plots and that too, 2 to 3 years

before acquisition Notification under Section 4(1) was issued.

Therefore, value of land was apparently quite high. Also looking to

the facts that it was not agricultural land but an Abadi, having been

declared as long back as in 1984 under Section 143 of Act, 1950 and

that the land was abutting Grant Trunk Road i.e. National Highway-

91, though its shape being rectangular larger size inside but that will

not make any difference since potentiality of land in its entirety

cannot be doubted, its rates had to be determined accordingly.

55

103.Looking at the area of land for which compensation was

claimed by Claimants-Respondents and exemplars i.e. Paper Nos.37C,

38C and 39C, which were executed in March, 2002, Court below has

found that there was an appreciation of market value by 16 per cent

per annum but it is only one sale deed which is in the rate of

Rs.4184.13 and is dated 05.02.2003 but there is another sale deed

dated 21.01.2004 wherein rate is Rs.3561/- per square meter. This

shows that there was no appreciation in value of land inasmuch as in

2002 also land was sold at the rate of Rs.3500/- and odd per square

meter and in 2004 also, land was sold at the rate of Rs.3500/- and odd

per square meter. Sale deed dated 15.01.2004 (Paper No.43C1) is in

respect of 25.27 square meter and the rate was Rs.3961/- per square

meter while 5 months thereafter, another sale deed was executed on

14.06.2004 whereby same size of land i.e. 25.27 square meter was

sold at the rate of Rs.3561/- per square meter i.e. a little bit lesser rate.

Reference Court, therefore in observing that there was 16 per cent

increase in market value within a span of one year has erred in law

and this finding shows that documents in question have not been

examined properly. In our view, three years sale deeds show that

small size of land, were sold for commercial purposes and rate was

broadly more than Rs.3500/- per square meter but there was no

substantial increase in the said rate and individual sale deeds with

higher rates may be on account of individual requirement of vendee.

The same can be treated to be a sale deed exemplar founded on

different facts and reasons and not a sole guiding factor. We,

therefore, find it appropriate to hold that market rate of small size land

up to the time of Notification issued under Section 4 (1) of Act, 1894

i.e. 08.10.2004 was about Rs.3561/- which by rounding off would

come to Rs.3600/- per square meter.

104.The aforesaid rate is in respect of land, size whereof is less than

26 square meter. Area of acquired land for which compensation has to

be determined is more than 5900 square meter, in our view, at least 60

56

per cent deduction towards largeness of area would be justified. If we

would have any sale deed exemplar of larger size, available for

corresponding period, the same could have been better exemplar, but

in absence of any such exemplar, and particularly when appellant did

not place any exemplar before Reference Court and document filed

before SLAO, cannot be looked into either by Reference Court or by

this Court since the same were not relied as evidence before Court

below, we hold that sale deed exemplar relied by Court below is valid.

Excluding appreciation, in our view, appropriate market rate would be

Rs.3600/- per square meter. Considering huge area of acquired land of

Respondents/Land-Owners, in our view, a larger deduction is needed,

hence we apply 60 per cent deduction. This bring us to the rate of land

at Rs.1440/- per square meter.

105.Further, Reference Court has observed that rate of land abutting

National Highway, cannot be equated with land which is on inner

side. In our view, it would not be appropriate to apply belting system

in this case though this aspect is also relevant for determination of

market value but here the distance is not much, hence a uniform rate

would be proper. However, looking to facts that area facing National

Highway is lesser and more land is inside and also there are some

plots behind plots which are adjacent to Grand Trunk Road but

distance is not much, hence application of “Belting System” would

not be justified.

106. In our view, it would be appropriate to make a further 10 per cent

deduction from rate of land obtained after 60 per cent deduction on

account of largeness of area already applied. This will bring market

value of acquired land at Rs.1296/- per square meter and on rounding

off, we make it Rs.1300/- per square meter. Judgment of Reference

Court under appeal therefore is liable to be modified in respect of

market value of acquired land on which compensation must be paid to

Respondents/Land-Owners.

107.In the result, we allow this appeal partly and modify judgment

and award dated 06.10.2015 passed by Sri Rajat Singh Jain,

Additional District Judge, Court No.2, Bulandshahar in LAR No. 4 of

2010 to the extent that market value of acquired land of Claimants/

57

Land-Owners, for the purpose of payment of compensation, shall be

taken as Rs.1300/- per square meter. Other statutory dues i.e.

solatium, interest etc. as awarded by Reference Court, are maintained.

108.Cost made easy.

Dt. 18.09.2019

Vivek Kr.