Case: U.P. AWAS EVAM VIKASH PARISHAD Vs. ASHA RAM (D) THR. LRS &amp; ORS

the village where the land is situated and the authority for which the land was acquired to arrive at the market value is produced below. Such table includes the judgments referred to by Mr. Gupta that a sum of Rs.297/- per square yard is the market value of the land acquired. Table 35. The order passed by this Court on 9.11.2017 for fresh determination on the basis of additional documents was based on the judgments pertaining to above-mentioned acquisitions. In terms of the order passed by this Court, no additional evidence was produced before the High Court and the submissions were confined to the material already on record. Such judgments, as discussed above, are later in time except the land situated in Chhalera Khadar, now forming part of Noida, for which notification was published on 19.12.1980. It is pertinent to note that the proximity from Delhi border would not be the determining factor but the distance between the two villages inter se would be relevant as Noida spread over a large area, has different access roads from Delhi and Ghaziabad. However, such distance has not been disclosed. 36. The High Court in Jagdish Chandra & Ors. v. New Okhla Industrial Development Authority, NOIDA & Anr. (First Appeal No. 744 of 2001 decided on 14.12.2007) had determined Rs. 297/- as the market value of the land situated in Chhalera Bangar, now forming part of Noida, intended to be acquired vide notification published under Section 4 of the LA Act on 27.2.1988. The High Court had noted the advantageous location of Noida when it held that: …Valuation of the landed property is enormously rising day by day. The location of the land, as stated, is nearer to developed area of NOIDA. The land is acquired for the purpose of making park. Neither it is required for commercial purpose nor for residential purpose. No question of largeness of the land is available. Therefore, we are not aware what is the basis of deduction. 37. The first notification for acquisition of land in Village Makanpur, the village which is located on both sides of National Highway-24, was published on 26.6.1982, for the land situated on the northern side of the National Highway, that is the notification in question. 38. In Pradeep Kumar, after remand, the High Court awarded Rs.297/- per square yard as the compensation in pursuance of notification dated 15.3.1988 of the land situated in Village Makanpur (Sr. No. 2 in the above table) for the benefit of Noida. This Court in Narendra awarded compensation of Rs.297/- per square yard for the land acquired in Village Makanpur in pursuance of the notification under Section 4 of the LA Act published on 12.9.1986 (Sr. No. 2 in the above table). Such land is in the area of Noida on the southern side of the National Highway. 39. The other villages, subject matter of acquisition i.e. Arthla, Jhandapur, Prahladgarhi, Mahiuddin-Re-Kanawani and Sahibabad are farther away from the National Highway than the land situated in Village Makanpur. Since the Special Land Acquisition Collector as well as the Reference Court has determined uniform compensation for the entire land acquired, therefore, we do not find that the compensation awarded of land situated in Village Makanpur on the basis of notification 4-5 years later is a reasonable yardstick for determining compensation of over 1100 acres of land in the other villages. There is no judicial precedent in respect of land situated in other five villages which are subject matter of the acquisition in the present group of appeals. The orders passed by this Court relied upon are either subsequent to the notification in question and/or for the acquisition for the purpose of planned development of Noida. 40. A compensation of Rs. 297/- per square yard was awarded for land acquired for the purpose of GDA vide notification dated 28.2.1987 and 16.8.1988 (Sr. No. 4 & 5 in the above table). The said acquisition was five years after the acquisition in question. The development activity initiated vide notification dated 26.6.1982 would be relevant to determine the market value on account of acquisition by virtue of the subsequent notification, but time gap of more than five years will not entail the same amount of compensation in respect of the land acquired five years earlier. 41. The compensation determined on the basis of a notification five years later cannot be a yardstick for determining compensation of the land which is subject matter of present acquisition years earlier. Still further, the High Court was not justified in observing that gaps of few years in the notification have been ignored by this Court. In fact, on the contrary, the High Court has failed to note that the date of notification for the acquisition of land for the benefit of Parishad is five years earlier than those in the judgments relied upon by the High Court. 42. In respect of land situated on northern side of National Highway, the land was acquired vide notifications dated 28.2.1987 and 12.9.1986 in the case of Narendra and Kashi; and on 16.8.1988 in the case of Jai Prakash. Whereas, on the southern side of National Highway for the benefit of Noida, the land of Village Makanpur became subject matter of acquisition vide notification dated 10.3.1988 in the case of Pradeep Kumar and on 15.3.1988 in the case of Charan Kaur. 43. For the land situated on the northern side of the National Highway for the benefit of the Parishad, the acquisition has attained finality with the dismissal of SLP (Civil) No. 4636 of 2016 on 28.3.2016. The compensation assessed in the other aforementioned cases is subsequent to the date of notification, therefore, none of the orders are determinative of the amount of compensation. Hence, the market value as determined by the High Court cannot be sustained either on the basis of the sale deeds, or on the strength of judicial orders. There is no justification of enhancement of compensation awarded by the Reference Court i.e. Rs.120/- per square yard.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In the present set of appeals, we are not dealing with the acquisition of land intended to be acquired by way of a notification under Section 4 of the LA Act dated 28.2.1987. Mr. Singh in the written submissions has submitted that the possession was taken over by the GDA on 14.6.1988 and 29.6.1988 which was based upon development work taken place from 1982 onwards. We do not find such facts emanate from the orders passed by the Special Land Acquisition Officer, the Reference Court and the order of the High Court. The land acquired by the GDA is not part of determination of the compensation in the present set of appeals.21. A three Judge Bench of this Court Smt. Tribeni Devi & Ors. v. Collector of Ranchi and Vice Versa, (1972) 1 SCC 480 indicated methods of valuation to be adopted to ascertain the market value of land on the date of the notification under Section 4(1) as: (i) opinion of experts, (ii) the price paid within a reasonable time in bona fide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages; and (iii) a number of years purchase of the actual or immediately prospective profits of the lands acquired.22. This Court Gujarat Industrial Development Corpn. v. Narottambhai Morarbhai & Anr., (1996) 11 SCC 159     held that the acid test which the court should always adopt in determining the market value in matters of compulsory acquisition is to eschew feats of imagination and sit in the armchair of a prudent willing purchaser. It was held as under:6. No prudent purchaser would purchase large extent of land on the basis of sale of a small extent of land in the open market. The acid test the court should always adopt in determining market value in the matter of compulsory acquisition would be to eschew feats of imagination, sit in the armchair of a prudent willing purchaser, it should consider whether the willing vendee would offer the rate at which the trial court proposes to determine the compensation. Taking these facts into consideration, we are of the view that the reasonable and adequate compensation for the lands would be at a net rate of Rs 22 per sq. mtr., after giving deduction of 1/3rd of the amount towards developmental charges. Therefore, the claimants would be entitled to the compensation @ Rs 22 per sq. mtr. They are also entitled to the statutory benefits on the enhanced compensation.23. This Court Land Acquisition Officer v. B. Vijender Reddy & Ors., (2001) 10 SCC 669     has also held that in fixation of rate of compensation under the Land Acquisition Act, there is always some element of guesswork but that has to spring from the totality of evidence, the pattern of rate, the pattern of escalation and escalation of price in the years preceding and succeeding the notification under Section 4 of the LA Act. The Court has held that:13. The first question we proceed to consider is, whether the High Court was right to enhance the rate from the rate recorded in Exhibits A-1 and A-2 by Rs 10,000 per acre per year for three years. It is true, in the fixation of rate of compensation under the Land Acquisition Act, there is always some element of guesswork. But that has to be based on some foundation. It must spring from the totality of evidence, the pattern of rate, the pattern of escalation and escalation of price in the years preceding and succeeding Section 4 notification etc. In other words, the guesswork could reasonably be inferable from it. It is always possible to assess the rate within this realm. In the present case, we find there are three exemplars i.e. Exhibits A-1 and A-2 which are three years preceding the date of notification and Exhibit A-3 which is of the same point of time when Section 4 notification was issued.25. This Court General Manager, Oil and Natural Gas Corporation Limited v. Rameshbhai Jivanbhai Patel & Anr., (2008) 14 SCC 745     has delineated the following factors responsible for increase in land prices such as situation of the land, nature of development in surrounding area, availability of land for development in the area, and demand for the land in the area. It was held:16. Much more unsafe is the recent trend to determine the market value of acquired lands with reference to future sale transactions or acquisitions. To illustrate, if the market value of a land acquired in 1992 has to be determined and if there are no sale transactions/acquisitions of 1991 or 1992 (prior to the date of preliminary notification), the statistics relating to sales/acquisitions in future, say of the years 1994-1995 or 1995- 1996 are taken as the base price and the market value in 1992 is worked back by making deductions at the rate of 10% to 15% per annum. How far is this safe? One of the fundamental principles of valuation is that the transactions subsequent to the acquisition should be ignored for determining the market value of acquired lands, as the very acquisition and the consequential development would accelerate the overall development of the surrounding areas resulting in a sudden or steep spurt in the prices. Let us illustrate. Let us assume there was no development activity in a particular area. The appreciation in market price in such area would be slow and minimal. But if some lands in that area are acquired for a residential/commercial/industrial layout, there will be all round development and improvement in the infrastructure/amenities/facilities in the next one or two years, as a result of which the surrounding lands will become more valuable. Even if there is no actual improvement in infrastructure, the potential and possibility of improvement on account of the proposed residential/commercial/industrial layout will result in a higher rate of escalation in prices. As a result, if the annual increase in market value was around 10% per annum before the acquisition, the annual increase of market value of lands in the areas neighbouring the acquired land, will become much more, say 20% to 30%, or even more on account of the development/proposed development. Therefore, if the percentage to be added with reference to previous acquisitions/sale transactions is 10% per annum, the percentage to be deducted to arrive at a market value with reference to future acquisitions/sale transactions should not be 10% per annum, but much more. The percentage of standard increase becomes unreliable. Courts should, therefore, avoid determination of market value with reference to subsequent/future transactions. Even if it becomes inevitable, there should be greater caution in applying the prices fetched for transactions in future. Be that as it may.26. The relationship between the market value of land and its potentiality has also been discussed by this Court Atma Singh (Dead) through LRs & Ors. v. State of Haryana & Anr., (2008) 2 SCC 568 wherein it was observed that-4. … The market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when led out in most advantageous manner excluding any advantage due to carrying out of the scheme for which the property is compulsorily acquired. In considering market value disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded. The guiding star would be the conduct of hypothetical willing vendor who would offer the land and a purchaser in normal human conduct would be willing to buy as a prudent man in normal market conditions but not an anxious dealing at arms length nor facade of sale nor fictitious sale brought about in quick succession or otherwise to inflate the market value. The determination of market value is the prediction of an economic event viz. a price outcome of hypothetical sale expressed in terms of probabilities….5. For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like water, electricity, possibility of their further extension, whether near about town is developing or has prospect of development have to be taken into consideration…28. The land forming the subject matter of the present appeals was acquired in pursuance of notification under Section 28 of the Act published on 26.6.1982. Therefore, firstly, the attempt to determine the market value should be based on the sale instances, which are proximate to both the date of notification under Section 28 of the Act and to the land sought to be acquired. The land owners have relied upon seven sale instances in respect of villages of which the land was acquired. Out of such seven sale instances, two are almost four years later than the publication of notification under Section 28 of the Act, and thus cannot be taken into consideration in terms of the Section 24 of the LA Act.29. The potentiality of the acquired land is one of the primary factors to be taken into consideration to determine the market value of the land. Potentiality refers to the capacity or possibility for changing or developing into the state of actuality. The market value of a property has to be determined while having due regard to its existing conditions with all the existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not primarily depends upon its condition, situation, use to which it is put or its reasonable capability of being put and also its proximity to residential, commercial or industrial areas/institutions. The existing amenities like water, electricity as well as the possibility of their further extension, for instance whether near about town is developing or has prospects of development have to be taken into consideration. It also depends upon the connectivity and the overall development of the area.30. The record in the present matter does not suggest that there were large scale development activities. The evidence is rather of sale of small areas. There is nothing on record as to when the industrial units were set up and what was the cost of land. Furthermore, there are no sale instances of land situated in Village Makanpur prior to date of notification i.e. 26.6.1982. The sale instances produced by the land owners pertain to Village Sahibabad and Jhandapur which are at a distance of about 3.5 kms from Delhi border. This Court Mohammad Raofuddin v. Land Acquisition Officer, (2009) 14 SCC 367     while dealing with comparable sale instances has held that-14. Thus, comparable sale instances of similar lands in the neighbourhood at or about the date of notification under Section 4(1) of the Act are the best guide for determination of the market value of the land to arrive at a fair estimate of the amount of compensation payable to a landowner. Nevertheless, while ascertaining compensation, it is the duty of the Court to see that the compensation so determined is just and fair not merely to the individual whose property has been acquired but also to the public which is to pay for it.31. The sale instances of a smaller area have to be considered while keeping in view the principle that where a large area is the subject matter of acquisition, suitable deduction is required to be made as no prudent purchaser would purchase large extent of land on the basis of sale of a small extent in the open market. The Court thus has to consider whether the willing vendee would offer the rate at which the trial court proposes to determine the compensation. This Court has even provided for 50% deduction for development charges on the price mentioned in the sale deed.Himmat Singh & Ors. v. State of Madhya Pradesh & Anr., (2013) 16 SCC 392.  32. The land owners have not produced any other sale deed or award of compensation on account of acquisition of land in the northern side of National Highway-24 prior to notification in question. It could thus lead to an inference that there were not many sale transactions prior to the notification in question. Some industries might have set up their units keeping in view the proximity to Delhi but details regarding when such units were set up and at what price, these units purchased the land have not been brought on record. As mentioned earlier, the market value has to be determined on the basis of what a purchaser is willing to pay on the date of notification. It cannot be as per any rule of thumb without any reference to the prevalent market value on the date of acquisition on record.33. The Reference Court had applied 1/3rd deduction in respect of land situated in Village Sahibabad on the sale price of Rs.180/- per square meters of land measuring 130 square meters vide sale deed dated 26.12.1980 whereas the deduction of 40% deduction in respect of land situated in Village Jhandapur on the sale price of Rs.200/- per square meters of land measuring 50 square yards vide sale deed dated 5.5.1982 in view of the fact that the area sold was very small. The High Court has affirmed such deduction. Thus, we are of the view that the same is reasonable and adequate deduction. Therefore, the market value determined at Rs.120/- per square yard is the appropriate market value on the basis of comparable sale instances.35. The order passed by this Court on 9.11.2017 for fresh determination on the basis of additional documents was based on the judgments pertaining to above-mentioned acquisitions. In terms of the order passed by this Court, no additional evidence was produced before the High Court and the submissions were confined to the material already on record. Such judgments, as discussed above, are later in time except the land situated in Chhalera Khadar, now forming part of Noida, for which notification was published on 19.12.1980. It is pertinent to note that the proximity from Delhi border would not be the determining factor but the distance between the two villages inter se would be relevant as Noida spread over a large area, has different access roads from Delhi and Ghaziabad. However, such distance has not been disclosed.36. The High Court in Jagdish Chandra & Ors. v. New Okhla Industrial Development Authority, NOIDA & Anr. (First Appeal No. 744 of 2001 decided on 14.12.2007) had determined Rs. 297/- as the market value of the land situated in Chhalera Bangar, now forming part of Noida, intended to be acquired vide notification published under Section 4 of the LA Act on 27.2.1988. The High Court had noted the advantageous location of Noida when it held that:…Valuation of the landed property is enormously rising day by day. The location of the land, as stated, is nearer to developed area of NOIDA. The land is acquired for the purpose of making park. Neither it is required for commercial purpose nor for residential purpose. No question of largeness of the land is available. Therefore, we are not aware what is the basis of deduction.37. The first notification for acquisition of land in Village Makanpur, the village which is located on both sides of National Highway-24, was published on 26.6.1982, for the land situated on the northern side of the National Highway, that is the notification in question.38. In Pradeep Kumar, after remand, the High Court awarded Rs.297/- per square yard as the compensation in pursuance of notification dated 15.3.1988 of the land situated in Village Makanpur (Sr. No. 2 in the above table) for the benefit of Noida. This Court in Narendra awarded compensation of Rs.297/- per square yard for the land acquired in Village Makanpur in pursuance of the notification under Section 4 of the LA Act published on 12.9.1986 (Sr. No. 2 in the above table). Such land is in the area of Noida on the southern side of the National Highway.39. The other villages, subject matter of acquisition i.e. Arthla, Jhandapur, Prahladgarhi, Mahiuddin-Re-Kanawani and Sahibabad are farther away from the National Highway than the land situated in Village Makanpur. Since the Special Land Acquisition Collector as well as the Reference Court has determined uniform compensation for the entire land acquired, therefore, we do not find that the compensation awarded of land situated in Village Makanpur on the basis of notification 4-5 years later is a reasonable yardstick for determining compensation of over 1100 acres of land in the other villages. There is no judicial precedent in respect of land situated in other five villages which are subject matter of the acquisition in the present group of appeals. The orders passed by this Court relied upon are either subsequent to the notification in question and/or for the acquisition for the purpose of planned development of Noida.40. A compensation of Rs. 297/- per square yard was awarded for land acquired for the purpose of GDA vide notification dated 28.2.1987 and 16.8.1988 (Sr. No. 4 & 5 in the above table). The said acquisition was five years after the acquisition in question. The development activity initiated vide notification dated 26.6.1982 would be relevant to determine the market value on account of acquisition by virtue of the subsequent notification, but time gap of more than five years will not entail the same amount of compensation in respect of the land acquired five years earlier.41. The compensation determined on the basis of a notification five years later cannot be a yardstick for determining compensation of the land which is subject matter of present acquisition years earlier. Still further, the High Court was not justified in observing that gaps of few years in the notification have been ignored by this Court. In fact, on the contrary, the High Court has failed to note that the date of notification for the acquisition of land for the benefit of Parishad is five years earlier than those in the judgments relied upon by the High Court.42. In respect of land situated on northern side of National Highway, the land was acquired vide notifications dated 28.2.1987 and 12.9.1986 in the case of Narendra and Kashi; and on 16.8.1988 in the case of Jai Prakash. Whereas, on the southern side of National Highway for the benefit of Noida, the land of Village Makanpur became subject matter of acquisition vide notification dated 10.3.1988 in the case of Pradeep Kumar and on 15.3.1988 in the case of Charan Kaur.43. For the land situated on the northern side of the National Highway for the benefit of the Parishad, the acquisition has attained finality with the dismissal of SLP (Civil) No. 4636 of 2016 on 28.3.2016. The compensation assessed in the other aforementioned cases is subsequent to the date of notification, therefore, none of the orders are determinative of the amount of compensation. Hence, the market value as determined by the High Court cannot be sustained either on the basis of the sale deeds, or on the strength of judicial orders. There is no justification of enhancement of compensation awarded by the Reference Court i.e. Rs.120/- per square yard.