IN THE HIGH COURT OF JUDICATURE AT PATNA FA No. 943 of 1980 THE STATE OF BIHAR VERSUS 1.(a) JHAGRU SINGH (b) MEGHAN SINGH (c) SHATRUGHAN SINGH, All sons of deceased sole Respondent, Jogi Bhagat, resident of Nandlal Chaudhary, P.S. Alamganj, District- Patna. WITH FA No. 969 of 1980 THE STATE OF BIHAR VERSUS JAGDISH SINGH WITH FA No. 974 of 1980 THE STATE OF BIHAR VERSUS DWARIKA YADAV WITH FA No. 987 of 1980 THE STATE OF BIHAR VERSUS KASHI GOPE & ORS. WITH FA No. 1005 of 1980 THE STATE OF BIHAR VERSUS BHOLA YADAV & ORS. WITH FA No. 1007 of 1980 THE STATE OF BIHAR VERSUS SIDHESHWAR PRASAD WITH FA No. 1015 of 1980 THE STATE OF BIHAR VERSUS SMT. LAXMAN DEVI WITH FA No. 1024 of 1980 THE STATE OF BIHAR - 2 - VERSUS CHHATU GOPE WITH FA No. 1055 of 1980 THE STATE OF BIHAR VERSUS MADHUSUDAN PRASAD WITH FA No. 1063 of 1980 THE STATE OF BIHAR VERSUS MITHU RAI WITH FA No. 1066 of 1980 THE STATE OF BIHAR VERSUS CHAND SINGH & ORS. ------------ For the appellants: Mr. P. Tekriwal, G.A.-I Mr. Anil Kr. Jha, G.A-II, Mr. Sanjay Kr. No. 1, G.P.-XIV. For the respondents: Mrs. Sheela Sharma, Advocate. -------- PRESENT : THE HON’BLE THE CHIEF JUSTICE J U D G M E N T (30.04.2010) Dipak Misra, C.J.- In this batch of appeals preferred under Section 54 of the Land Acquisition Act, 1894, (for short `the Act’), the assail is to the award dated 11.4.1980 passed in Land Acquisition Case No. 475/79 and other connected matters by the Special Land Acquisition Judge- I, Patna, (hereinafter referred to as `the reference court’). - 3 - 2. The facts which are essential to be stated at that notifications were issued for the purpose of acquisition of land situate in Village Bahadurpur, P.S.-Patna City Thana No. 10, Distt. Patna belonging to various land owners. The matters were taken up by the Land Acquisition Officer, who eventually passed the award on 29.6.1977 awarding a sum of Rs. 1,28,000/- per acre and Rs.63,903/- per acre for two different sets of lands.. 3. Being dissatisfied with the said award, the land owners-claimants filed an application under Section 18 of the Land Acquisition Act, 1894 (hereinafter referred to as `the Act’) for reference of the same to the Civil Court and, accordingly, the cases were referred and eventually have been adjudicated by the reference court. 4. Before the reference court, it was contended that the valuation of the land should be Rs. 3,20,000/- per acre, and the amount awarded by the Land Acquisition Collector is grossly low, being 1,28,000/- per acre and Rs.63,903/- per acre for two different sets of lands, as detailed in the award. 5. It was put forth before the reference court that - 4 - the Collector had not considered the rates mentioned in the sale deeds which were pressed into service while claiming the compensation; that he had relied upon the different sale deeds and illegally discarded the same which were in proximity of time to the issue of notification; that the situation of the land has been totally ignored by the Land Acquisition Officer. 6. The claimants in order to prove their cases adduced oral evidence as well as tendered certain sale deeds in evidence. The reference court upon perusal of the oral evidence and the sale deeds which were contemporaneous in nature came to hold that the valuation of the land per acre would be Rs. 1,28,000/- and Rs.1,28,000/- for the lands in question and, accordingly, determined the compensation. 7. I have heard Mr. P. Tekriwal, learned Government Advocate-I, Mr. Anil Kumar Jha, learned Government Advocate-II and Mr. Sanjay Kumar No.1, learned Government Pleader-XIV for the appellants and Mrs. Sheela Sharma, learned counsel for the respondents. 8. Before I proceed to deal with the rivalised - 5 - contentions raised at the Bar, I think it apt to refer to certain pronouncements which ought to be kept in mind while dealing with a case for grant of compensation pertaining to acquisition of land. 9. In Ahmedabad Municipal Corporation and others Vs. Shardaben and others, (1996) 8 SCC 93 the Apex Court expressed the view that burden is always on the claimants to prove by adducing reliable evidence that the compensation offered by the Land Acquisition officer is inadequate and the lands are capable of fetching higher market value. It is the duty of the court to closely scrutinize the evidence, apply the test of a prudent and willing purchaser, i.e., whether he would be willing to purchase in open and normal market conditions of the acquired land and then to determine the just and adequate compensation. 10. In Hookiyar Singh and others Vs. Special Land Acquisition Officer, Moradabad and another, (1996) 3 SCC 766 their Lordships expressed the view that the Court must not indulge in feats of imagination but, sit in the armchair of a prudent purchaser and put a question - 6 - to itself whether as a prudent purchaser it would offer the same price in the open market as is to be determined. 11. In State of U.P. and others Vs. Ram Kumari Devi (Smt.) and others, (1996) 8 SCC 577 the Supreme Court ruled that when 13.75 acres of land was offered for sale in an open market, no prudent man would have credulity to purchase the land on square foot basis. Similar view was taken in the case of Gujarat Industrial Development Corporation Vs. Narrottambhai Morarbhai and another, (1996) 11 SCC 159. 12. Yet, in another decision rendered in the case of G. Narayan Vs. Land Acquisition Officer, (1996) 10 SCC 607 it was ruled that it must be established, as a fact, that the potential purpose does exist on the date of notification, the prevailing conditions in the market, the existence of the construction of building activities in the neighbourhood and that other lands in the adjacent neighbourhood possessed similar conditions. 13. In Kanwar Singh and others Vs. Union of India, (1998) 8 SCC 136 it has been expressed that the amount of compensation for the land acquired depends on - 7 - the market value of the land on the date immediately before the notification under Section 4 of the Act or when same land is acquired and offer of compensation is made through an award. In the aforesaid case it was ruled that the consideration in terms of price received for land under bonafide transactions on the date or preceding the date of notification issued under Section 4 of the Act generally shows the market value of the acquired land and the market value of the acquired land is to be assessed in terms of those transactions. For attracting the conception of future potentiality of the land, location of the land cannot be ignored as has been held in the case of Hasan Ali Walimchand (dead) by LRs Vs. State of Maharashtra, (1998) 2 SCC 388. 14. In this context I may refer with profit to the decision rendered in the case of Land Acquisition Officer Revenue Divisional Officer, Chitor Vs. L. Kamalamma (Smt.) dead by LRs and others K. Krishnamachari and others, (1998) 2 SCC 385 wherein it has been held that when no sales of comparable land are available where large chunks of land had been sold, even land transaction - 8 - in respect of smaller extent of land could be taken note of as indicating the price that it may fetch in respect of large tracts of land by making appropriate deductions such as for development of the land by providing enough space for roads, sewage, drains, expenses involved in formation of a layout, lump sum payment as also the waiting period required for selling the sites. 15. In Kasturi and others Vs. State of Haryana, (2003) 1 SCC 354 it has been opined that there is a difference between a developed area and an area having potential value, which is yet to be developed and 20% deduction towards development charge as against the normal 1/3rd from the amount of compensation would be regarded as justified. 16. In the case of Ahad Brothers Vs. State of M.P. and another, (2005) 1 SCC 545 the Apex Court has expressed the view as under: - “13. The Reference Court as well as the High Court both have concurrently held that the land acquired, though was an agricultural land, was not being used for agricultural purpose as on the date of issuing Section 4 (1) notification and it had potentialities for the purpose of - 9 - creating building sites. The Reference Court was right in determining the market value of the land acquired @ Rs.2/- per sq. ft. but it committed an error in not giving any deduction towards developmental charges. In our view, having regard to the location and surroundings of the acquired land, as already indicated above, it would be just and appropriate to deduct 30% towards developmental charges out of the amount of compensation payable to the appellant @ Rs.2/ per sq. ft. 14. In view of what is stated above, the impugned judgment and order cannot be sustained. The impugned judgment is modified awarding the compensation to the appellant as owner of the land acquired @ Rs.2/ per sq. ft. after deducting 30% of the market value of the land calculated on the basis of Rs.2/ per sq. ft. The appellant is also entitled to all the statutory benefits on the amount of compensation so determined. The appeal is disposed of accordingly. No costs.” 17. Recently in Sharadamma Vs. Special Land Acquisition Officer and another, 2007 AIR SCW 1109 a two-judge bench of the Apex Court taking note of the - 10 - fact that the acquired land was surrounded by factories and there was industrial potentiality and the land acquired was adjoining the national highway and better located fixed the compensation at the rate of Rs.20/- per square yard. 18. In Land Acquisition Officer A.P. Vs. Kamandana Ramakrishna Rao and another, 2007 AIR SCW 1745 the Apex Court while dealing with the issue of compensation determined on yield basis observed that the Court is not precluded from taking into consideration factors such as potentiality and utility of land. 19. In this batch of cases, as is evident, the Land Acquisition Collector has awarded Rs. 1,28,000/- and Rs.63,903/- per acre for two different sets of lands regard being had to the situation of the lands. It is submitted by the learned counsel for the respondents that the situation of the lands is in total proximity and, therefore, the distinction made by the Deputy Collector Land Reforms is absolutely incorrect. It is canvassed by the learned counsel for the respondents with immense vehemence that the reference court has rightly fixed the quantum at Rs. 1,60,000/- and Rs.1,28,000/- per acre after adverting to the - 11 - factual scenario in entirety and has awarded the compensation keeping in view the concept of parity. 20. Be it noted, some of the claimants have filed cross-objections for enhancement of compensation. The question that arises for consideration whether the amount of compensation awarded by the reference court is inadequate in the obtaining factual scenario or there should be revision on the basis of the appeals preferred by the State or enhancement of the award amount on the basis of cross appeals filed by the respondents. 21. To appreciate the same, I have bestowed my anxious consideration and perused the award passed by the reference court and the evidence brought on record. On a scrutiny of the materials on record, it is manifest that the claimants had examined a number of witnesses, certain sale deeds have been exhibited, the witnesses have deposed with regard to the situation of the land, the potential utility, rising trend of price, the effect of economic concept in view, etc. 22. The learned counsel appearing for the State submitted that the reference court has erred in law by - 12 - placing reliance on the sale deeds pertaining to small tract of land. However, the learned reference court keeping in view a uniform facet has determined the price of the land at Rs. 1,60,000/- per acre and Rs.1,28,000/- per acre for the aforesaid lands. 23. The learned counsel appearing for the respondents in support of the cross-objections has submitted that the reference court should have awarded Rs. 3,20,000/- per acre regard being had that he had arrived at that figure on the foundation as mentioned above. The aforesaid submission at first blush appears to be attractive, but on a deeper scrutiny, it appears that the learned reference judge has taken into consideration the totality of the facts and circumstances of the case and has fixed the amount of Rs. 1,60,000/- per acre and Rs.1,28,000/- per acre for two different sets of lands. Hence, there is no error in the said determination. 24. In the result, the appeals filed by the State as well as the cross-objections are dismissed without any order as to costs. Patna High Court. The 30th April, 2010. NAFR (Pawan) ( Dipak Misra, C.J. )