Case: Haryana State Indusl.Devt.Corp.Ltd Vs. Udal &amp; Ors.Etc.Etc

3. In furtherance of the policy decision taken by it to establish Industrial Model Township at Manesar (hereinafter described as IMT Manesar), District Gurgaon, the Government of Haryana acquired large tracts of land under the Land Acquisition Act, 1894 (for short, the Act). ForI of IMT, Manesar, over 700 acres of land was acquired. By notification dated 30.04.1994 issued under Section 4 of the Act, which was followed by declaration dated 30.09.1995 issued under Section 6, 256 acres 3 kanals and 17 marlas land of village Manesar was acquired. By another notification dated 15.11.1994 issued under Section 4 of the Act, which was followed by Section 6 declaration dated 10.11.1995, 490 acres 3 kanals 17 marlas land situated in villages Manesar, Naharpur Kasan, Khoh and Kasan was acquired, 1380 kanals 16 marlas land situated in villages Kasan, Bas Kusla, Naharpur Kasan and Manesar was acquired vide notification dated 6.3.2002 issued under Section 4 of the Act which was followed by Section 6 declaration dated 15.11.2002. Another notification was issued on 7.3.2002 under Section 4 of the Act for the acquisition of 595 acres 5 kanals 12 marlas land situated in villages Kasan, Bas Kusla, Bas Haria and Dhana forI of IMT, Manesar. The declaration under Section 6 was issued on 25.11.2002, 567 acres 4 kanals 3 marlas land was acquired vide notification dated 26.2.2002 issued under Section 4 of the Act and for, 965 acres 5 kanals 18 marlas land was acquired vide notification dated 17.9.2004 issued under Section 4 of the Act6. Since the issue arising in these appeals relates to the quantum of compensation payable in lieu of the acquisitions made forI and III of IMT, Manesar, we do not consider it necessary to take cognizance of the facts relating to other acquisitions but would make a reference to the events leading to the judgment of this Court in Haryana State Industrial Development Corporation v. Pran Sukh and others (2010) 11 SCC 175 , and the orders passed in the review applications filed by HSIIDC7. For the acquisition made vide notification dated 30.4.1994, the Land Acquisition Collector passed award dated 28.3.1997 whereby he fixed market value of the acquired land at the rate of Rs.3,67,400 per acre. On a reference made at the instance of the landowners, the Reference Court divided the acquired land into two blocks, i.e., A and B. For the land falling in Block A, i.e., land situated 500 yards from National Highway 8, the Reference Court determined the compensation at the rate of Rs.6,51,994.13 per acre. For the remaining land categorized as Block B, market value was fixed at the rate of Rs.3,91,196.97 per acre8. For the acquisition made vide notification dated 15.11.1994, the Land Acquisition Collector passed award dated 3.4.1997 and fixed market value at the rate of Rs.4,13,600 per acre. The Reference Court fixed market value of the acquired land by dividing the same into two blocks. Block A comprised of the land falling within 500 yards of National Highway 8 and market value thereof was fixed at Rs.6,89,333. The remaining land was included in Block B and market value thereof was not increased9. The appeals filed by the landowners in relation to the first acquisition were disposed of by the learned Single Judge of the Punjab and Haryana High Court vide judgment dated 5.9.2008 and the amount of compensation was determined at the rate of Rs.12,00,000 per acre. The appeals filed by the landowners covered by notification dated 15.11.1994 were disposed of by the learned Single Judge by enhancing the amount of compensation to Rs.15,00,000 per acre for the entire acquired land10. The appeals arising out of the special leave petitions filed by HSIIDC and the landowners against the judgments of the High Court were disposed of by this Court vide judgment dated 17.08.2010 titled Haryana State Industrial Development Corporation vs. Pran Sukh and others (supra) and the amount of compensation payable to the landowners was enhanced to Rs.20,00,000 per acre for the entire acquired land with a stipulation that they shall be entitled to all statutory benefits. Paragraphs 22 to 26 of that judgment, which contain the reasons for granting enhanced compensation to the landowners, are reproduced below:22. In our view, the learned Single Judge did not commit any error by relying upon sale transaction, Ext.for the purpose of fixing market value of the acquired land. Undisputedly, that sale transaction was between two corporate entities and the entire sale price was paid through bank drafts. It is also not in dispute that the land which wasis situated at Village Naharpur Kasan and is adjacent to the acquired land. The Corporation and the State Government did not adduce any evidence to prove that the land sold vide Ext.was overvalued with an oblique motive of helping the landowners to claim higher compensation. Therefore, we do not find any justification to discard or ignore sale deed, Ext.. The refusal of the learned Single Judge to rely upon other sale transactions in which sale price of the land was shown as Rs. 7 lakhs per acre also does not suffer from any legal infirmity because it is well known that transactions involving transfer of properties are usually undervalued with a view to avoid payment of the requisite stamp duty and registration charges23. However, we agree with the learned counsel for the landowners that the High Court should not have imposed cut of 1/4th in one batch of appeals and 20% cut in the other batch of appeals qua the average sale price reflected by Ext.only on the ground that the area of the land acquired by the State Government was too large as compared to 12 acres of land for which sale deed, Ext.24. In a matter like the present one, it cannot be ignored that the land was acquired for setting up an industrial model township at Manesar and after developing the land, the Corporation was bound to sell the plots at a much higher price to the existing or prospective industrial entrepreneurs. In this scenario, the learned Single Judges committed an error by applying 1/4th or 20% cut on market value determined for the purpose of payment of compensation to the landowners25. This approach is in consonance with the law laid down in Subh Ram v. State of Haryana (2010) 1 SCC 444 , the relevant portions of which are extracted below:16. Therefore, when deduction is made from the value of a small residential plot towards the development cost, to arrive at the value of a large tract of agricultural or undeveloped land with development potential, the deduction has nothing to do with the purpose for which the land is acquired. The deduction is with reference to the price of the small residential plot, to work back the value of the large tract of undeveloped land. On the other hand, where the value of acquired agricultural land is determined with reference to the sale price of a neighbouring agricultural land, no deduction need be made towards development cost17. It is no doubt true that this Court in some decisions has observed that purpose of acquisition will also be relevant. But it is made in a different context. The Land Acquisition Collectors in some cases adopt belting methods for valuation of land, with reference to a focal point, that is, either with reference to the distance from the main road, or distance from a developed area. Lands that adjoin a developed area or a main road are given a higher value than a land farther away from the road or the developed area. The Land Acquisition Collectors also award different compensation depending upon whether the acquired land is a dry land or wet/irrigated land18. When different categories of lands (or lands with different situational advantages) are acquired for the same purpose, say for forming of a residential layout, courts have sometimes felt that determination of their value with reference to previous status or situation should be avoided and a uniform rate of compensation should be awarded for all lands acquired under the same notification26. For the reasons stated above, the appeals filed by the Corporation are dismissed and those filed by the landowners are allowed with the direction that the Corporation shall pay market value of the entire acquired land at the rate of Rs. 20 lakhs per acre with all statutory benefits.

Court's reasoning:
33. We also find merit in the argument of the learned counsel for the landowners that while fixing market value of the acquired land the learned Single Judge committed serious error by not considering an important piece of evidence, i.e., Exhibit PW9/A dated 23.11.1999 vide which HSIIDC had allotted land to M/s. Honda Motorcycles and Scooters India (Private) Limited at the rate of Rs.1254.18 per square yard. Although, this document was produced before the Reference Court but the same was not taken into consideration while determining the amount of compensation. The same error has been repeated in the impugned judgment. If this document is taken into consideration, then market value of the acquired land would come to Rs.60,69,360 per acre. By making deduction of 50% towards development cost and granting annual increase of 12/15% (cumulative), market value of the land will be much higher than Rs.37,40,000 per acre34. In view of the above conclusions, we do not consider it necessary to deal with the other points argued by learned counsel for the parties/intervenors and feel that ends of justice will be served by setting aside the impugned judgment and remitting the matters to the High Court for fresh disposal of the appeals and cross objections filed by the parties subject to the rider that the State Government/HSIIDC shall pay the balance of Rs.37,40,000 to the landowners along with other statutory benefits29. A careful scrutiny of the impugned judgment shows that while determining the amount of compensation payable to the landowners other than M/s. Kohli Holdings Private Limited, the learned Single Judge did make a reference to Exhibit P38 (paragraph 30) but did not rely upon the same for the purpose of determination of the amount of compensation. Instead of adopting a holistic approach and examining the documents produced before the Reference Court, the learned Single Judge simply referred to the judgment of this Court in Pran Sukhs case, granted a flat increase of 12% for the time gap of about 7 years and 3 months between the two acquisitions, i.e., 1994 and 2002 determined market value at the rate of Rs.37,40,000 per acre. In the case of M/s. Kohli Holdings Private Limited, the learned Single Judge squarely relied upon Exhibit P38 for the purpose of fixing market value of the acquired land, granted an increase at a flat rate of 15% per annum on the price of land specified in Exhibit P38 with an addition of 30% on account of special locational advantage and held that the particular landowner is entitled to compensation at the rate of Rs.2119 per square yard (Rs.1,02,55,960 per acre). However, no discernible reason has been given for granting the benefit of annual increase at different rates to M/s. Kohli Holdings Private Limited on the one hand and the remaining landowners on the other. Therefore, we find merit in the argument of the learned counsel for the remaining landowners that their clients have been subjected to discrimination in the matter of grant of annual increase30. The other error committed by the learned Single Judge is that he granted annual increase at a flat rate of 12/15%.