Case: Dadu Yogendrenath Singh and Others Vs. Collector, Seoni

It arises out of theseappellants were owners of 7.35 acres of land being a part of Khasra No. 47/1 in the area of village Manglipeth District Seoni, Madhya Pradesh. On November 4, 1963, a notification under s. 4 read with Sub-s. (1) of s. 17 ofthe Land Acquisition Act, 1894 (to be hereinafter referred to as the Act) was published in the Government Gazette stating that this land was needed by the State Government for implementation of Seoni Water Supply Scheme. The declaration under s. 6 of the Act was published on December 18, 1963, and notices under s. 9 of the Act were issued by the Collector on December 28, 1963. In response to that notice, the appellants filed a claim that they were willing to accept compensation in respect of this land at the rate of Rs.1500/- per ac re, "as the lands adjoining this land and situated in a lesser advantageous position are sold at this rate". The Collector made his award on August 17, 1964, whereby he awarded compensation for this land at the rate of Rs.450/- per acre. The total amount awarded for this piece of land after adding solatium at the rate of 15%, was Rs.2, 904/-. He also awarded interest at the rate of 4% from September 19, 1964, on which date, the Collector had taken over possession of thewith the Collectors award, the appellants made an application under s. 18 of the Act for reference to the District Court for enhancement of the compensation. The Collector accordingly made a reference. The Additional District Judge, Seoni, who heard the reference, enhanced the compensation to Rs.11, 000/- per acre. In this way, after adding solatium, he awarded to the appellants, herein, a total amount of Rs.80, 850/- together with interest at the rate of 6%.Against that judgment, dated May 2, 1967, of the Additional District Judge, an appeal was preferred by the Collector, to the High Court. The High Court accepted the appeal, set aside the award of the Additional District Judge and restored that of the Collector. The High Court however, granted a certificate under Art; 133 of the Constitution.

Court's reasoning:
On merits, we find, in agreement with the High Court, that the District Judge was palpably wrong inasmuch as he awarded compensation at a rate far higher than what had been claimed by the appellants themselves, pursuant to the notice under s. 9 of the Act. The learned Additional District Judge acted contrary to the legislative mandate contained in s. 25 (1) of the Act, according to which, the Court "shall not award" compensation to an applicant in excess of the amount claimed by him pursuant to any notice under s.our opinion, there is evidence on the record which unmistakably shows that from the view-point of a willing purchaser, at the relevant time, this land had potential value as building sites. Firstly, it was admitted even by Gokul Prasad who was examined by the Respondents as their Witness No. 1, that in front of the land in question there are buildings which are being used as the off ice of the Range Officer and as residential quarters for the employees of that Department. Adjoining the Range Office is the house of Dewan Najaf Ali in which the Additional District Judge was residing. The witness further admitted that the land in dispute abutts on Seoni-Chhindwaracircumstance unerringly indicates that the land in question was suitable for being used as building sites, and had for that purpose, a potential value substantially in excess of Rs.500/- per acre. The High Court has not at all discussed thisis difficult to accept the argument advanced on behalf of the respondent that the appellant had paid Rs.500/- per acre as diversion charges for the adjacent land, merely as speculative business in the hope of making money in the remote future. No prudent person would make such an investment if there was no reasonable chance of a good return over that investment in the present, or immediate future. In our opinion this circumstance coupled with the other facts, namely, that the land-in question is within the Municipal limits and is located just on the edge of an inhabited locality of the town, having other buildings in the immediate vicinity, was sufficient to establish its potential value as buildinghas been extracted above are broad guidelines and not immutable absolutes. The essence of the whole thing is in the sentence which has been underlined. It shows that in the ultimate analysis, the question, whether or not a land has potential value as building site, is primarily one of fact. in the present case, the circumstance that the appellants had voluntarily paid Rs.500/- per acre as diversion charges, for laying out the adjoining land into plots as building sites, was of a clinching character, and taken in conjunction with the other facts, noticed above, conclusively showed that its potential value as building sites was much more than the rate of Rs.450/- per acre awarded by the Collector and the High Court.In their application dated 17-10-1964, under s. 18 of the Act, the appellants stated that similar land in the immediate vicinity had been sold at the rate of Rs.1, 250/- per acre and another plot at t he rate of Rs.1, 350/- per acre. These lands are close to the area for which they had paid the diversion charges at the rate of Rs.500/- per acre. They filed a map also, showing the location of those lands. On an over all view, after taking into account the potential value of the land, we think it will be reasonable to award compensation to the appellants at the rate of Rs.1, 250/- per acre with interest at 6% per annum t ill payment, from the date on which the possession was taken over by the Collector. The appellants shall also be entitled to solatium at 15% on the compensation amount awarded for the land.