UNION OF INDIA versus PREMLATA AND OTHERS
[2022] 2 S.C.R. 1001, Supreme Court of India, 2022
Outcome: Disposed off
Segment: Ratio
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[2022] 2 S.C.R. 1001
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UNION OF INDIA
v.
PREMLATA AND OTHERS
(Civil Appeal Nos. 176-177 of 2022)
APRIL 06, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Land Acquisition Act, 1894 – Comparable sales – s.4
notification issued to acquire 45 hectares 89 R land – Land
Acquisition Officer awarded an amount of Rs.1,13,500/- per Hectare
in respect of land bearing survey No. 43/2 and Rs.1,35,000/- per
Hectare for the land bearing survey Nos. 40, 41 and 44 – Reference
court enhanced the compensation at Rs. 6/- per square foot, after
making deduction of 25% towards developmentcharges – High
Court, kept compensation at the same rate but subject to 1/3rd
deduction instead of 25% deduction towards development charges
– On appeal, held: Before reference court, the landowner had relied
upon other sale instances which were discarded by reference Court
as those sale instances were in respect of small plots – Even High
Court agreed with the findings recorded by the reference court with
respect to sale instances – As per the settled position of law, the
sale instances with respect to small plots of land are not comparable
to a large extent of land for the purpose of determining the
compensation – In present case, land acquired is a large area which
is not comparable with the sale instance at all – Further, deduction
of 40% made towards development charges considering that land
acquired is a large extent of area, it is an agricultural land not fully
developed, the
landowner having not filed any exemplar sale deed
relating to large pieces of land sold in acres to prove the market
value of the acquired land and the exemplars relied upon by the
landowner pertained to very small plots which were developed and
converted to non-agricultural use.
Disposing of the appeals, the Court
HELD: 1. The Reference Court enhanced the amount of
compensation determining the market price at Rs. 6/- per square
foot after making deduction of 25% of the same towards
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development charges, relying upon and considering the sale deeds
in respect of plots of land bearing survey No. 42 of village
Borkhedi, vide Ex. 91 to 93. Before the Reference Court, the
landowner relied upon other sale instances at Ex. 50, 51 & 27.
Having considered the fact that all the sale instances were in
respect of small plots, the Reference Court discarded the same.
Even the High Court also agreed with the findings recorded by
the Reference Court with respect to sale instances produced as
Ex. 50, 51 & 27. All the sale instances are with respect to small
plots and even the same instances were of the year 1987. In the
present case, notification under Section 4 of the 1894 Act has
been issued in the year 1992. As per the settled position of law,
small plots/parcels of land cannot offer the same market value as
when a large tract of land is purchased in an open market by a
willing and prudent purchaser. Generally the sale instances with
respect to small plots/parcels of land are not comparable to a
large extent of land for the purpose of determining the
compensation. Therefore, as rightly observed by the Reference
Court as well as the High Court, the sale instances produced at
Ex. 50, 51 & 27 were not comparable at all. [Para 5][1010-E-G]
2. In the present case, a large parcel of land admeasuring
46 Hectares 89 R has been acquired. The sale instances at Ex.
91 to 93 in respect of plots out of land bearing Survey
No. 42 are
with respect to small pieces of land admeasuring 1200 sq. ft. which
were non-agricultural developed plots and even the market price
mentioned in the said sale deeds were on square foot basis. The
acquired land was a barren agricultural land which may have a
non-agricultural potentiality. Therefore, considering the fact that
the sale exemplars/sale deeds produced at Ex. 91 to 93 are in
respect of very small plots of land and were non-agricultural
developed plots and even the same were on the highway and
having the access to the main road, there shall be at least 40%
deduction towards development charges. As such, the High Court
has not assigned any good reason as to why and on what basis, it
considered proper to make deduction towards development
charges at the rate of 33.33% (1/3rd deduction). Therefore,
considering the relevant factors on the appropriate deduction
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towards development charges as per the law laid down by this
Court in the aforesaid decisions, it is found that firstly, the land
acquired in question is a large extent of land (45 Hectares 89 R);
secondly, it was an agricultural land not fully developed; thirdly,
the landowner having not filed any exemplar sale deed relating
to large pieces of land sold in acres to prove the market value of
the acquired land; and fourthly, exemplars relied upon by the
landowner, especially Ex. 91 to 93 pertain to very small plots/
parcels of land and that too, in respect of small plots which were
developed and converted to non-agricultural use and the
distinguishing features noticed in the land in sale deeds, Ex. 91
to 93 are not present in the acquired land, the deduction towards
development charges at 1/3rd as deduced by the High Court can
be said to be on a lower side. Considering the aforesaid facts and
circumstances and the relevant factors, if 40% deduction is
ordered to be made towards development charges, it can be said
to be an appropriate deduction towards development charges in
the facts and circumstances of the case. [Para 7][1013-G-H; 1014-
A-G]
Lal Chand v. Union of India (2009) 15 SCC 769; Union
of India v. Dyagala Devamma (2018) 8 SCC 485 :
[2018] 7 SCR 1118; Mahanti Devi v. Jaiprakash
Associates Ltd. (2019) 5 SCC 163; Viluben Jhalejar
Contractor v. State of Gujarat (2005) 4 SCC 789 :
[2005] 3 SCR 542; Manoj Kumar v. State of Haryana
(2018) 13 SCC 96 :
[2017] 8 SCR 997; Maya Devi
(Dead) through Lrs. V. State of Haryana (2018) 2 SCC
474 : [2018] 1 SCR 225 – relied on.
Pitambar Hemlal Badgujar (dead) by LRs. v. Sub.
Divisional Officer, Dhule (1996) 7 SCC 554; Land
Acquisition Officer & Sub-Collector, Gadwal v.
Sreelatha Bhoopal (1997) 9 SCC 628 : [1997] 3 SCR
875; Bhagwathula Samanna & Others v. Special
Tahsildar & Land Acquisition Officer, Visakhapatnam,
Municipality, Visakhapatnam (1991) 4 SCC 506 : [1991]
1 Suppl. SCR 172; Trishala Jain v. State of Uttaranchal
(2011) 6 SCC 47 : [2011] 8 SCR 520; Nelson
Fernandes & Others v. Special Land Acquisition Officer,
UNION OF INDIA v. PREMLATA AND OTHERS
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South Goa & Others (2007) 9 SCC 447 : [2007] 3 SCR
563; Raghubans Narain Singh v. Uttar Pradesh
Government through Collector of Bijnor AIR 1967 SC
465 : [1967] 1 SCR 489; Mahesh Dattatray Thirthkar
v. State of Maharashtra (2009) 11 SCC 141 : [2009] 3
SCR 1122; Udho Dass v. State of Haryana (2010) 12
SCC 51 : [2010] 8 SCR 900; Andhra Pradesh Housing
Board v. K. Manohar Reddy (2010) 12 SCC 707 : [2010]
11 SCR 1107 – referred to.
Case Law Reference
(1996) 7 SCC 554
referred to
Para 3.1
[1997] 3 SCR 875
referred to
Para 3.2
(2009) 15 SCC 769
relied on
Para 3.3
[2018] 7 SCR 1118 
relied on
Para 3.3
[1991] 1 Suppl. SCR 172
referred to
Para 4
[2011] 8 SCR 520
referred to
Para 4
[2007] 3 SCR 563
referred to
Para 4.3
[1967] 1 SCR 489
referred to
Para 4.6
[2009] 3 SCR 1122
referred to
Para 4.7
[2010] 8 SCR 900
referred to
Para 4.7
(2019) 5 SCC 163
relied on
Para 5
[2005] 3 SCR 542
relied on
Para 5
[2017] 8 SCR 997
relied on
Para 5
[2018] 1 SCR 225
relied on
Para 6.1
[2010] 11 SCR 1107
referred to
Para 6.1
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 176-
177 of 2022.
From the Judgment and Order dated 10.03.2021 of the High Court
of Judicature at Bombay at Nagpur Bench, Nagpur in First Appeal No.599
of 2019 with Cross Objection No.14 of 2021.
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With
Civil Appeal Nos.178-179 of 2022.
K. M. Nataraj, ASG, Gopal Sankaranarayanan, Sr. Adv., Ms.
Priyanka Das, Apoorva Kurup, Navanjay Mahapatra, Digvijay Dam,
Arvind Kumar Sharma, Rahul Bhangde, Satyajit A. Desai, Ms. Anagha
S. Desai, Satya Kam Sharma, Siddharth Gautam, Himanshu Sharma,
Ms. Shivani Vij, Sachin Patil, Rahul Chitnis, Aaditya A. Pande, Geo Joseph,
Ms. Shwetal Shepal, Advs. for the appearing parties.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 10.03.2021 passed by the High Court of Judicature at
Bombay, Nagpur Bench in First Appeal No. 599 of 2019 and Cross
Objection No. 14 of 2021, by which the High Court has determined the
compensation for the acquired land at the rate of Rs.6/- per square foot,
subject to 1/3rd deduction, both, the acquiring body as well as the original
claimant have preferred the present appeals.
2. The facts leading to the present appeals in a nutshell are as
under:
That a notification under Section 4 of the Land Acquisition Act,
1894 (hereinafter referred to as the ‘1894 Act’) was issued on 05.11.1992
seeking to acquire 65 Hectares 47 R land situated at Borkhedi Tahsil,
District Nagpur. The said land was sought to be acquired by the Ministry
of Defence for its Research and Development Organization. Acquisition
proceedings in respect of 19 Hectares 79 R of the land were dropped
and the actual land acquired came to about 45
Hectares 89 R. The
dispute is with respect to four pieces of land bearing Survey Nos. 40, 41,
43/2 and 44 owned by the original claimant herein (appellant in Civil
Appeal Nos. 178-179/2022).
2.1 The Land Acquisition Officer vide award dated 09.03.1995
awarded an amount of Rs.1,13,500/- per Hectare in respect of land
bearing survey No. 43/2 and Rs.1,35,000/- per Hectare for the land
bearing survey Nos. 40, 41 and 44. At the instance of the original claimant,
a reference under Section 18 of the 1894 Act was made. The reference
Court under Section 18 of the 1894 Act enhanced the compensation to
Rs. 6/- per square foot, after making deduction of 25% towards
development charges.
UNION OF INDIA v. PREMLATA AND OTHERS
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2.2 Feeling aggrieved and dissatisfied with the order passed by
the Reference Court enhancing the amount of compensation to Rs. 6/-
per square foot, after making deduction of 25%, the acquiring body
preferred an appeal before the High Court being First Appeal No. 716/
1996. By judgment and order dated 21.09.2016, the High Court set aside
the Reference Court’s order and remanded the proceedings for fresh
adjudication on the ground that sufficient opportunity was not provided
to the acquiring body to contest the reference proceedings. That on
remand, the Reference Court vide its judgment and order dated
28.08.2018 in L.A.C. No. 38/1995 enhanced/determined the
compensation at Rs.6/- per square foot, after making deduction of 25%.
2.3 Feeling aggrieved and dissatisfied with the order passed by
the Reference Court, the original claimant filed First Appeal No. 599/
2019 before the High Court with a prayer to enhance the amount of
compensation. The acquiring body also filed Cross Objection No. 14/
2021 challenging the judgment and order passed by the Reference Court
enhancing the amount of compensation at Rs. 6/- per square foot. By
the impugned judgment and order, the High Court has modified the
judgment and order passed by the Reference Court in L.A.C. No. 38/
1995 and has held that the claimant shall be entitled to compensation for
the acquired land at the rate of Rs.6/- per square foot, subject to 1/3rd
deduction
(instead of 25% deduction as per the judgment of the Reference
Court) with all statutory benefits. Consequently, the first appeal preferred
by the original claimant has been dismissed and the cross objection filed
by the acquiring body has been allowed to the aforesaid extent.
2.4 Feeling aggrieved and dissatisfied with the impugned common
judgment and order passed by the High Court dismissing the first appeal
preferred by the original claimant and partly allowing the cross objection
filed by the acquiring body, both, the original claimant as well as the
acquiring body have preferred the present appeals.
3. Shri K.M. Nataraj, learned Additional Solicitor General of India
appearing on behalf of the acquiring body has submitted that the acquiring
body is assailing the impugned judgment and order passed by the High
Court determining the compensation at Rs.6/- per square foot, subject to
1/3rd deduction, primarily on the following grounds:
i)
determination of compensation on square foot basis in
respect of large extent of land is illegal and impermissible;
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ii)
small pieces of land are not comparable to large extent of
land for the purpose of determining compensation; and
iii)
deduction of development charges ought to be fixed in light
of two factors, viz., extent of utilization and cost of
development.
3.1 It is vehemently submitted by Shri K.M. Nataraj, learned ASG
that in the present case, the acquisition proceedings were in respect of a
large extent of land admeasuring around 45 Hectares 89 R. It is submitted
that therefore, both, the Reference Court and the High Court have grossly
erred in determining the compensation on square foot basis. It is submitted
that even the land in question was a barren agricultural land. It is submitted
that therefore the determination of compensation on square foot basis in
respect of large extent of land is impermissible. Heavy reliance is placed
on the decision of this Court in the case of Pitambar Hemlal Badgujar
(dead) by LRs. V. Sub. Divisional Officer, Dhule, reported in (1996)
7 SCC 554 (para 4).
3.2 It is further contended by the learned ASG that even both, the
Reference Court and the High Court have erred in relying upon the sale
instances which were in respect of individual plots of land being much
smaller in comparison to the land acquired. It is submitted that it is well
settled that small plots of land fetch much higher market value as opposed
to when large extent of land is purchased. It is submitted that therefore
the sale instances in respect of small
plots/parcels of land could not have
been relied upon while determining the compensation in respect of a
large extent of land. Reliance is placed upon the decision of this Court in
the case of Land Acquisition Officer & Sub-Collector, Gadwal v.
Sreelatha Bhoopal, reported in (1997) 9 SCC 628.
3.3 It is further contended by learned ASG that even otherwise,
the High Court has erred in deducting only 33% towards development
charges. It was elaborated that while determining the deduction on
development charges, two factors are required to be considered, i.e., (i)
area required to be utilized for development works; and (ii) cost of the
development works. It is submitted that up to 40% of the area may be
utilized for development works and the cost of providing various amenities
may be up to 35% of the value of the plot. That in light of the aforesaid
principles and keeping the aforesaid two factors in mind, the deduction
of 33% granted by the High Court is not reasonable and ought to have
been higher in view of the effect of the aforesaid factors, especially
UNION OF INDIA v. PREMLATA AND OTHERS
[M. R. SHAH, J.]
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when the land was barren agricultural land. Reliance is placed upon the
decision of this Court in the case of Lal Chand v. Union of India,
reported in (2009) 15 SCC 769 as well as decision of this Court in the
case of Union of India v. Dyagala Devamma, reported in (2018) 8
SCC 485.
3.4 Making the above submissions and relying upon the aforesaid
decisions, it is prayed to allow the appeals preferred by the acquiring
body and dismiss the appeals preferred by the original claimant.
4. Shri Gopal Sankaranarayanan, learned Senior Advocate
appearing on behalf of the original claimant has vehemently submitted
that in the present case, both, the Reference Court as well as the High
Court have concurrently determined the market value of the land in
question at Rs.6/- per square foot by considering the potential of the
acquired land. It is submitted that the basis for both the courts below to
grant the same rate of compensation is that the adjacent land bearing
survey No. 42 admeasuring 6.25 Hectares was converted into layout
and plots therein were sold at Rs. 7/- per square foot on 12.03.1992, i.e.,
eight months prior to Section 4 notification dated 05.11.1992. That
therefore, both, the Reference Court and the High Court have rightly
relied upon the sale deeds of plots sold from survey No. 42 (Ex. 91, 92
and 93). Relying upon the decisions of this Court in the cases of
Bhagwathula Samanna & Others v. Special Tahsildar & Land
Acquisition Officer, Visakhapatnam, Municipality, Visakhapatnam
reported in (1991) 4 SCC 506 and Trishala Jain v. State of
Uttaranchal, reported in (2011) 6 SCC 47, it is submitted that sale
examples of small plots can form basis for determination of compensation
of a large extent of land.
4.1 It is further contended by learned counsel appearing on behalf
of the original claimant that though the sale deeds of adjacent land (Ex.
91, 92 and 93) were eight months prior to Section 4 notification, by which
the plots were sold at Rs.7/- per square foot, the courts below have still
granted compensation only at the rate of Rs. 6/- per square foot on the
premise that the adjacent land bearing survey No. 42 has a better location.
It is submitted that this reasoning of the courts below is incorrect as can
be seen from Ex. 55. It is urged that even considering the sale instances
of the adjacent land bearing survey No. 42 only, the claimant shall be
entitled to at least Rs.8/- per square foot by giving a rise of approximately
15% for the period from 12.03.1992 to 05.11.1992.
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4.2 Now insofar as deduction towards development charges is
concerned, it is vehemently submitted by learned counsel appearing on
behalf of the original claimant that the layout map at Ex. 90 of the land
bearing survey No. 42 showed that only 15% of the land was lost in
carving a layout. It is submitted that the expert valuer had also given a
deduction of 25%. Therefore, the Reference Court granted deduction
of 25% which ought not to have been increased by the High Court to
33%.
4.3 It is further submitted that, as such, since the deduction for
adjacent land bearing survey No. 42 was only 15%, the same deduction
should have been granted by both the courts below. It is submitted that
further, since the land in question was acquired for construction of a
Research & Development Project of the Union of India and the
landowner was required to litigate for more than 28 years, no deduction
should have been granted by both the courts below. In support of the
above, reliance is placed on the decision of this Court in the case of
Nelson Fernandes & Others v. Special Land Acquisition Officer,
South Goa & Others, reported in (2007) 9 SCC 447(Paragraphs
29 & 30). Relying upon the above decision, it is submitted that the purpose
for acquisition is a relevant factor for determining the extent of deduction.
4.4 It is further submitted by learned Senior Advocate appearing
on behalf of the original claimant that in fact the claimant had relied
upon the sale instances (Ex.
91, 92 and 93) in respect of the land bearing
survey No. 42 to show the non-agricultural potential. It is submitted that
as such there was considerable undervaluation in the sale instances at
Ex. 91 to 93. Relying upon the sale instances at Ex. 39, 40, 41 and 47, it
is submitted that there is undervaluation and even between two times to
four times in the sale instances of the same village Borkhedi.
4.5 It is also submitted that the land bearing survey No. 20 of the
same village at Borkhedi was sold at Rs. 15/- per square foot on 5.6.1987,
i.e., five years prior to Section 4 notification dated 05.11.1992. It is
submitted that therefore the value of the acquired land at Rs. 7/- per
square foot in 1992 clearly shows a substantial undervaluation in the
sale instances at Ex. 91 to 93.
4.6 It is further submitted that the claimants also examined the
prospective purchasers at Ex. 59, 63 and 65 to prove that the valuation
of the land would be in the range of Rs. 28 to Rs. 40 per square foot.
UNION OF INDIA v. PREMLATA AND OTHERS
[M. R. SHAH, J.]
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That these offers were relevant pieces of evidence in view of the decision
of this Court in the case of Raghubans Narain Singh v. Uttar Pradesh
Government through Collector of Bijnor, reported in AIR 1967 SC
465 (paragraph 6).
4.7 It is further submitted that even the claimant also heavily relied
upon the expert valuer’s report at Ex. 56 who has valued the subject
land at Rs. 35/- per square foot. That the credentials of the expert valuers
have been admitted by the defence witness no.2 as expert valuer is a
retired government personnel and is more competent to value the acquired
land. Relying upon the decisions of this Court in the cases of Mahesh
Dattatray Thirthkar v. State of Maharashtra, reported in (2009) 11
SCC 141 and Udho Dass v. State of Haryana, reported in (2010)
12 SCC 51, it is urged that the valuation report of the expert should
normally be accepted.
4.8 Making the above submissions and relying upon the aforesaid
decisions, it is prayed to determine the compensation at Rs. 35/- per
square foot for the acquired land and to modify the impugned judgment
and order passed by the High Court accordingly.
5. We have heard learned counsel for the respective parties at
length.
At the outset, it is required to be noted that the Reference Court
enhanced the amount of compensation determining the market price at
Rs. 6/- per square foot after making deduction of 25% of the same
towards development charges, relying
upon and considering the sale
deeds in respect of plots of land bearing survey No. 42 of village Borkhedi,
vide Ex. 91 to 93. It is also noted that before the Reference Court, the
landowner relied upon other sale instances at Ex. 50, 51 & 27. Having
considered the fact that all the sale instances were in respect of small
plots, the Reference Court discarded the same. Even the High Court
has also agreed with the findings recorded by the Reference Court with
respect to sale instances produced as Ex. 50, 51 & 27. We are in complete
agreement with the view taken by the Reference Court as well as the
High Court regarding the sale instances produced as Ex. 50, 51 & 27.
All the sale instances are with respect to small plots and even the same
instances were of the year 1987. In the present case, notification under
Section 4 of the 1894 Act has been issued in the year 1992. As per the
settled position of law, small plots/parcels of land cannot offer the same
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market value as when a large tract of land is purchased in an open
market by a willing and prudent purchaser. As per the settled position of
law, generally the sale instances with respect to small plots/parcels of
land are not comparable to a large extent of land for the purpose of
determining the compensation. In the case of Mahanti Devi v.
Jaiprakash Associates Ltd., reported in (2019) 5 SCC 163, after
following the decision of this Court in the case of Viluben Jhalejar
Contractor v. State of Gujarat, reported in (2005) 4 SCC 789, it is
held that in case of acquisition of large tracts of land and the exemplars
are of small portion of land, there shall be a suitable deduction towards
development costs.
In the case of Manoj Kumar v. State of Haryana, reported in
(2018) 13 SCC 96, this Court had an occasion to consider the deductions
required to be made when considering transactions pertaining to small
developed plots, for determining compensation of large areas and it is
held that when a large area is acquired, two kinds of deductions have to
be made, i.e., (i) for development, and (ii) in case of exemplar transaction
is a small area, the deduction is required to be made to arrive at the
value of large tract.
5.1 In the present case, the sale instance at Ex. 50 was with
respect to plot admeasuring 135 Square Meters. Similarly, the sale
instance at Ex. 51 was with respect to plot admeasuring 135 Square
Meters. Even the sale instance at Ex. 27 was with
respect to 1500 sq.
ft. It is also to be noted that even in respect of sale instance at Ex. 50
dated 5.6.1987, the price determined was Rs.10.34/- per square foot
and so far as the sale instance at Ex. 51 dated 10.09.1987 is concerned,
the price determined was at Rs. 3/- per square foot. In the present case,
the land acquired is a large area, i.e., 45 Hectares 89 R. Therefore, as
rightly observed and held by the Reference Court as well as the High
Court, the sale instances produced at Ex. 50, 51 & 27 are not comparable
at all. We are in complete agreement with the view taken by the
Reference Court as well as the High Court discarding Ex. 50, 51 & 27.
6. Now the next issue is with respect to sale instances at Ex. 91
to 93 in respect of plots out of land bearing Survey No. 42, which can be
said to be comparable and/or nearer to comparable sale instances as
land bearing Survey No. 42 was adjacent to the acquired land. As per
the sale deeds, Ex. 91 to 93, the plots were sold at Rs.7/- per square
foot. However, considering the fact that survey No. 42 was having direct
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access to main road and was closer to Chandrapur – Nagpur N.H. 7
than the acquired land, the Reference Court determined the market price
at Rs. 6/- per square foot and determined the compensation after
deducting 25% towards development charges. The High Court has
enhanced the deduction from 25 % to 1/3rd, i.e., 33.33%.
Thus, both, the Reference Court as well as the High Court have
heavily relied upon Ex. 91 to 93 with respect to plots out of land bearing
Survey No. 42 and determined the market price. It is true that as a
general rule, the compensation shall not be determined on square foot
basis (see Pitambar Hemlal Badgujar (d) by Lrs. (supra)). However,
at the same time, in a given case, the Court may determine the
compensation on square foot basis after making a reasonable deduction
towards development charges, in case there are no other sale instances
available.
6.1 What should be reasonable deduction towards development
charges has been considered by this Court in the cases of Lal Chand
(supra) and Dyagala Devamma (supra).
As held by this Court in the case of Lal Chand (supra), the
percentage of “deduction for development” to be made to arrive at the
market value of large tracts of undeveloped agricultural land (with
potential for development), with reference to the sale price of small
developed plots, varies between 20% to 75% of the price of such
developed plots, the percentage depending upon the nature of
development of the layout in which the exemplar plots are situated. The
decision in the case of Lal Chand (supra) has been subsequently followed
by this Court in the case of Maya Devi (Dead) through Lrs. V. State of
Haryana, reported in (2018) 2 SCC 474 as well as in the case of
Andhra Pradesh Housing Board v. K. Manohar Reddy, reported in
(2010) 12 SCC 707.
6.2 In the case of Dyagala Devamma (supra), while quashing
and setting aside the judgment and order of the High Court making
deduction towards development charges at 25% in place of 50% as was
deducted by the Reference Court, in paragraphs 19 & 20, it is observed
and held as under:
“19. In addition to these principles, this Court in several cases
have laid down that while determining the true market value of
the acquired land especially when the acquired land is a large
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chunk of undeveloped land, it is just and reasonable to make
appropriate deduction towards expenses for development of
acquired land. It has also been consistently held that at what
percentage the deduction should be made varies from 10% to
86% and, therefore, the deduction should be made keeping in mind
the nature of the land, area under acquisition, whether the land is
developed or not and, if so, to what extent, the purpose of
acquisition, etc. It has also been held that while determining the
market value of the large chunk of land, the value of smaller pieces
of land can be taken into consideration after making proper
deduction in the value of lands especially when sale deeds of
larger parcel of land are not available. This Court has also laid
down that the court should also take into consideration the
potentiality of the acquired land apart from other relevant
considerations. This Court has also recognised that the courts
can always apply reasonable amount of guesswork to balance
the equities in order to fix a just and fair market value in terms of
parameters specified under Section 23 of the Act. (See Trishala
Jain v. State of Uttaranchal [Trishala Jain v. State of
Uttaranchal, (2011) 6 SCC 47 : (2011) 3 SCC (Civ) 178] and
Vithal Rao v. LAO [Vithal Rao v. LAO, (2017) 8 SCC 558 : (2017)
4 SCC (Civ) 155] .)
20. Keeping in mind the aforementioned principles, when we take
note of the facts of the case at hand, we find that firstly, the land
acquired in
question is a large chunk of land (101 ac. approx.);
secondly, it is not fully developed; thirdly, the respondents
(landowners) have not filed any exemplar sale deed relating to
large pieces of land sold in acres to prove the market value of the
acquired land; fourthly, exemplar relied on by the respondents,
especially Ext. P-18 pertains to very small pieces of land (19
guntas); fifthly, the three distinguishing features noticed in the land
in sale deed (Ext. P-18) are not present in the acquired land.”
7. Applying the law laid down by this Court on the deduction to be
made towards development charges while determining the compensation
to the facts of the case on hand, it is required to be noted that in the
present case a large parcel of land admeasuring 46 Hectares 89 R has
been acquired. The sale instances at Ex. 91 to 93 in respect of plots out
of land bearing Survey No. 42 are with respect to small pieces of land
UNION OF INDIA v. PREMLATA AND OTHERS
[M. R. SHAH, J.]
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SUPREME COURT REPORTS
[2022] 2 S.C.R.
admeasuring 1200 sq. ft. which were non-agricultural developed plots
and even the market price mentioned in the said sale deeds were on
square foot basis. In the present case, the acquired land is a barren
agricultural land which may have a non- agricultural potentiality.
Therefore, considering the fact that the sale exemplars/sale deeds
produced at Ex. 91 to 93 are in respect of very small plots of land and
were non-agricultural developed plots and even the same were on the
highway and having the access to the main road, we are of the opinion
that there shall be at least 40% deduction towards development charges.
As such, the High Court has not assigned any good reason as to why
and on what basis, it considered proper to make deduction towards
development charges at the rate of 33.33% (1/3rd deduction). The High
Court has not at all considered the relevant factors while making an
appropriate deduction towards development charges. Therefore,
considering the relevant factors on the appropriate deduction towards
development charges as per the law laid down by this Court in the
aforesaid decisions, and when we take note of the facts of the case on
hand, we find that firstly, the land acquired in question is a large extent
of land (45 Hectares 89 R); secondly, it was an agricultural land not fully
developed; thirdly, the landowner having not filed any exemplar sale
deed relating to large pieces of land sold in acres to
prove the market
value of the acquired land; and fourthly, exemplars relied upon by the
landowner, especially Ex. 91 to 93 pertain to very small plots/parcels of
land and that too, in respect of small plots which were developed and
converted to non-agricultural use and the distinguishing features noticed
in the land in sale deeds, Ex. 91 to 93 are not present in the acquired
land, we are of the firm view that the deduction towards development
charges at 1/3rd as deduced by the High Court can be said to be on a
lower side. Considering the aforesaid facts and circumstances and the
relevant factors, we are of the opinion that if 40% deduction is ordered
to be made towards development charges, it can be said to be an
appropriate deduction towards development charges in the facts and
circumstances of the case.
8. In view of the above and for the reasons stated above, Civil
Appeal Nos. 176-177 of 2022 are hereby partly allowed. The impugned
common judgment and order passed by the High Court in First Appeal
No. 599/2019 and Cross Objection No. 14/2021 is modified and it is
directed that the original claimant shall be entitled to the compensation
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for the acquired land at the rate of Rs.6/- per square foot, subject to
40% deduction towards development charges, with all statutory benefits.
Consequently, Civil Appeal Nos. 178-179/2022 preferred by the original
landowner stand dismissed. There shall be no order as to costs.
Devika Gujral
Appeals disposed of.
UNION OF INDIA v. PREMLATA AND OTHERS
[M. R. SHAH, J.]