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CASE NO.:

Appeal (civil) 3190-3192 of 2000

PETITIONER:

SHAJI KURIAKOSE AND ANR.

RESPONDENT:

INDIAN OIL CORPN. LTD. AND ORS.

DATE OF JUDGMENT: 14/08/2001

BENCH:

V.N. KHARE & B.N. AGRAWAL

JUDGMENT:

JUDGMENT

2001 Supp(1) SCR 573

The Judgment of the Court was delivered by

V.N. KHARE, J. A large track of land in the village Manakunnam in the

district of Cochin was sought to be acquired for setting up a bottling

plant by the respondent - Indian Oil Corporation Ltd. A notification under

Section 4 of the Land Acquisition Act (hereinafter referred to as the

'Act') was issued on 23.8.1990 which was followed by issue of notification

under Section 6 of the Act on 22.2.1991. The appellants' land measuring

7.13 acres is covered by the aforesaid notifications. The Collector on

5.5.1992 gave an award and offered compensation to the claimants @ Rs. 1225

per acre Rs. 500 per cent. The claimants sought reference for enhancement

of the compensation. The Additional Sub-Judge, Ernakulam enhanced the

compensation to @ Rs. 7000 per cent. Aggrieved, the respondents filed

appeals before the High Court. The High Court was of the view that the

compensation awarded by the reference court was on higher side and,

therefore, reduced the compensation to @ Rs. 4000 per cent for the wet land

and Rs. 6500 for dry land. In that view of the matter, the appeals filed by

the respondents were allowed. The cross-objections filed by the claimants

were rejected by the High Court. Aggrieved, the claimants have preferred

these appeals against the judgment of the High Court.

Mr. Mathai M. Paikeday, learned senior counsel appearing for the appellants

urged that the High Court having proceeded to give compensation for the

acquired land on the basis of Comparable Sales Method of valuation of land,

it was not open to the High Court to fix the rate of compensation less than

the market value of the land covered by Ex. A-4. Learned counsel relied

upon a decision of this Court in Printers House Pvt. Ltd. v. Mst. Saiyadan

(deceased) by LRs. and Ors., [1994] 2 SCC 133. The second submission of the

learned counsel is that once the appellants herein opted and agreed for

accepting compensation for their acquired land on the basis of Comparable

Sales Method of valuation of land, it was not open to the High Court to fix

the rate of compensation of the acquired land on the basis of the valuation

of the land on the capitalisation assessment of the land. Shri D.A. Dave,

learned senior counsel, however, argued that the principle adopted by the

High Court in lowering the compensation for acquired land than what was the

value of land contained in Ex. A-4, is based on relevant considerations and

these appeals do not require any interference and deserve to be dismissed.

It is no doubt true that courts adopt Comparable Sales Method of valuation

of land while fixing the market value of the acquired land. While fixing

the market value of the acquired land, Comparable Sales Method of valuation

is preferred than other methods of valuation of land such as Capitalisation

of Net Income Method or Expert Opinion Method. Comparable Sales Method of

valuation is preferred because it furnishes the evidence for determination

of the market value of the acquired land at which a willing purchaser would

pay for the acquired land if it has been sold in open market at the time of

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issue of notification under Section 4 of the Act. However, Comparable Sales

Method of valuation of land for fixing the market value of the acquired

land is not always conclusive. There are certain factors which are required

to be fulfilled and on fulfilment of those factors the compensation

can be awarded, according to the value the land reflected in the sales. The

factors laid down" inter alia are : (1) the sale must be a genuine

transaction, that (2) the sale deed must have been executed at the time

proximate to the date of issue of notification under Section 4 of the Act,

that (3) the land covered by the sales must be in the vicinity of the

acquired land, that (4) the land covered by the sale must be similar to the

acquired land and that (5) the size of plot of the land covered by the

sales be comparable to the land acquired. If all these factors are

satisfied, then there is no reason why the sale value of the land covered

by the sales be not given for the acquired land. However, if there is a

dissimilarity in regard to locality shape, site or nature

of land between land covered by sales and land acquired, it is open to

Court to proportionately reduce the compensation for acquired land than

what is reflected in the sales depending upon the disadvantages attached

with the acquired land. In the present case, what we find is that the first

two factors are satisfied. The sale transaction covered by the sale Ex. A-4

is genuine, inasmuch as sale was executed in proximity to the date of

notification under Section 4 of the Act. However, there is a difference in

the similarity in the land acquired and the land covered by Ex. A-4. The

land covered by Ex. A-4 is situated at Kottayam and Ernakulam, PWD Road,

whereas the acquired land is situated at a distance of 3 furlong from the

main road. There is no access to the acquired land and there exists only an

internal mud road which belonged to one of the claimants, whose land has

also been acquired. Further, the land covered by Ex. A-4 is a dry land and

whereas the acquired land is a wet land. After acquisition, the acquired

land has to be re-claimed and a lot of amount would be spent for filling

the land. Moreover, the land covered by Ex. A-4 relates to a small piece of

land which do not reflect the true market value of the acquired land. It is

often seen that a sale for a smaller plot of land fetches

more consideration than larger or bigger piece of land. For all these

reasons, the High Court was fully justified in lowering the rate of

compensation that what was the market value of the land covered by Ex. A-4.

We therefore, do not find any infirmity in the judgment of the High Court.

So far as the second argument is concerned, the High Court has granted

compensation on the basis of Comparable Sales Method of valuation of land

and the reference regarding Capitalisation Method of valuation of the land

was only by way of illustration. We, therefore, do not find any merit in

this submission.

For the aforesaid reasons, the appeals fail and are accordingly dismissed.

There shall be no order as to costs.