A SMT. SHAKUNTALABAf AND ORS.

STATE OF MAHARASflTRA

NOVEMBER 23, 1995

[K. RAMASWAMY AND B.L. HANSARIA, JJ.]

Land Acquisition Act, 1894:

Land Acquisition-Compensation-Principles for detennination-Ad- C mission of claimant as to market value for acquired land-Need to travel beyond the acquired land is obviated-Owner himself purchasing land under acquisition-Price mentioned in saledeed-Relevance of.

The respondent-Sate acquired 20 acres of land belonging to the appellants for which compensation was awarded by the Land Acquisition D Officer. The Reference Court took into account two sale-deeds in respect of lands which were adjacent to te acquired land and enhanced the compensation. On further appeal, the High Court set aside the award and decree of the Reference Court and confirmed that of the Land Acquisition Officer.

E In appeal to this Court, it was contended for the appellant that the High Court has committed illegality in omitting to consider the value mentioned in the two sale-deeds for the lands adjacent to the acquired lands.

Dismissing the appeal, this Court F HELD : 1. The High Court had not committed any manifest error of. law or omitted to apply any correct principle of law. If there is evidence or admission on behalf of the claimant as to the market value commanded by the acquired land itself, the need to travel beyond the boundary of the acquired land is obviated. The need to take into consideration the value of G the lands adjacent to the acquired land or near about the area which possessed same potentiality to work out the prices fetched therein for determination of market value of the acquired land would arise only when there is no evidence of the value of the acquired land. In a case where ' evidence of the value of the acquired land itself is available on record, it H is unnecessary to travel beyond that evidence and consider the market 618

value prevailing in the adjacent lands. Since the appellant himself had A purchased the acquired lands in 1957, the High Court was right in its view to consider the very same evidence to determine the compensation to the acquired land. It s not a fit case for interference under Article 136 of the Constitution. [621-C-F; 622-E]

2. The Reference Court blissfully overlooked the admission of the owner on the surmise that it is an estimate made by the claimant and the evidence of the sale deeds being prevailing prices, it acted thereon and determined the compensation. The approach of the Reference Court is clearly illegal. The Reference Court committed manifest error in determining the compensation on sq. ft. basis. When lands to the extent of 20 acres are offered for sale in an open market, no willing and the prudent purchaser would come forward to purchase that vast extent of land on sq. ft. basis. [621-G-H; 622-A-B]

State of M.P. v. Santabi & Ors. CA No. 2844/84 and Salgoankar v.

Union of India, CA No. 3800/89 decided on 11.1.1990 by Supreme Court; D referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3557 of 1984.

From the Judgment and Order dated 25/28.7.80 of the Bombay High E Court in F.A. No. 183 of 1973.

V.A. Mohta, S.V. Deshpande and Pramit Saxena for the Appellants.

V.N. Ganpule, M.N. Shroff and Ms. Reema Bhandari, for the Respondent No. 2.

S.M. Jadhav for A.S. Bhasme for the Respondent.

The following Order of the Court was delivered :

Notification under section 4(1) of the Land Acquisition Act, 1894 G (for short, 'the Act') acquiring an extent of 20 acres of land in Survey No. 24/2 situated in Akola town for construction of the houses to weaker sections and middle income group people, was published in the State

Gazette on August 11, 1965. The Land Acquisition Officer in his award dated March 26, 1971 determined the market value of the front portion of H

620 SUPREME COURTREPOR'tS [1995] SUPP. 5 S.C.R.

A land admeasuring 4 acres 18 gunthas at Rs. 5,500 per acre and for the rest of 15 acres and 32 gunthas at 4,500 per acres. Dissatisfied therewith, the appellant sought reference under section 18 of the Act and the Senior Civil Judge in his award and decree dated September 26, 1972 enhanced the compensation in respect of the lands in the front portion at Rs. 1.25 per B sq. ft. and to the rest of the land at Rs. 1 per sq.ft. He also deducted Rs.

3,000 per acre towards development charges and 30% land was left over for roads etc. On appeal by the State and also on cross appeal by the appellant, by judgment and decree dated July 28, 1980 the Division Bench of the Bombay High Court set aside the award and decree of the Reference Court and confirmed that of the Land Acquisition Officer. Thus this appeal C by special leave.

It is true, as noted by the Reference Court and also accepted by the High Court, that the lands are situated in a developing area surrounded by roads on three sides and the lands had potential value for development for D building purposes. Shri Mohta, learned senior counsel for the appellant, contended that the High Court totally omitted to consider Exh. 38, a sale deed dated May 14, 1964, in respect of lands of an extent of 5392 sq. ft. for a consideration of Rs. 4,000 as spoken by PW-6, the son of the vendee and Ex.44 dated February 8, 1964 of an extent of 6950 sq. ft. for consideration of Rs. 5,000 as spoken by PW-8, the clerk of the vendee who was E formerly an advocate and also was an ex- M.P. These two documents having been executed 18 months preceding the date of the acquisition and the Reference Court having accepted them to be reflective of having had the same potentialities, since the lands are situated adjacent to the acquired land, they would establish comparable value. The High Court F committed obvious illegality in not considering this material evidence.

Therefore, the judgment and decree of the High Court is vitiated by error of law.

Though, initially, we were inclined to accept the contention of Shri Mohta, on perusal of evidence on record, we find it difficult to give G acceptence to the contention. It is an admitted fact that the claimant as PW-9 admitted in the cross-examination that in the year 1957 he purchased the very same entire 20 acres of land for Rs. 10,000. He claimed to be a protected tenant but the High Court did not accept the status as protected tenant since no documentary evidence in proof thereof was filed. Be it as H it may, the fact remains that he admitted that in 1957, he purchased the

...

self-same 20 acres of land for Rs. 10,000. In other words, he estimated the A value of the same land in 1957 taking all potentiality at 10,000. He also stated in the cross-examination that the market value of the lands had increased ten times from 1957 to 1965. In other words, according to his estimate the acquired land commands market value in 1965 for a total consideration of around Rs. 1 lakh. The Land Acquisition Officer considered the evidence and ultimately determined the market value at Rs. 5,500 and Rs. 4,500 to the different portions of the land. On belting by average it worked out at a total consideration of Rs. 1 lakh.

The question, therefore, is whether the High Court has committed any manifest error of law or had applied any wrong principle of law in C determining the compensation and whether its failure to consider Ex.38 and 44 does make any difference. Having given our consideration to the contention of Shri Mohta, We think that the High Court had not committed any manifest error of law omitted to apply any correct principle of law. It is seen that if there is evidence or admission on behalf of the claimants as to the market value commanded by the acquired land itself, the need to travel beyond the boundary of the acquired land is obviated. The need to take into consideration the value of the lands adjascent to the acquired land or nearabout the area which possessed same potentiality to work out

the prices fetched therein for determination of market value of the acquired land would arise only when there is no evidence of the value of the E acquired land. In a case where evidence of the value of the acquired land itself is available on record, it is unnecessary to travel beyond that evidence

and consider the market value prevailing in the adjacent lands. As stated earlier, though Ex.38 and 44 might command different market value to the land situated in approved lay-outs, since the appellant himself had purchased the self-same acquired lands in 1957 at Rs. 10,000 for the entire 20 acres of land, the High. Court was right in its view to consider the very same evidence to determine the compensatin to the acquired land. On the assessment of the increase in the value by 10 times, the High Court had accepted that assessment of the appellant himself as PW-9 and upheld the award of the Land Acquisition Collector since it reflects the same price as granted in the award under Section 11.

It is seen that the Reference Court blissfully overlooked the admission of the ownu surmise that it is an estimate made by the claimant and the evidence of the sale deeds under ex. 38 and 44 being prevailing prices, it acted thereon and determined the compensation. The approach of the H

622 SUPREf~E COURT REPORTS [1995] SUPP. 5 S.C.R.

A Reference Court is clearly illegal and that of the High Court is quite correct and it was the only way in which the market value could be determined on the face of the evidence on record. The Reference Court committed manifest error in determining the compensation on the basis of sq. ft. When lands of an extent of 20 acres are offered for sale in an open

market, no willing and prudent purchaser would come forward to purchase that vast extent of land on sq. ft. basis. Therefore, the Refernce Court has to consider the valuation sitting on the arm chair of a willing prudent hypothetical vendee and to put a question to itself whether in given circumstances, he would agree to purchase the land on sq. ft. basis. No feats of imagination is necessary to reach the conclusion. The answer is obviously no. This aspect of the matter was totally ignored by the Reference Court and mechanically accepted the two sale deeds to enhance the compensation at a value of nearly Rs. 35,000 per acre. In State of M.P. v.

Santabai & Ors., C.A. No. 2844/.84 and Salgoankar v. Union of India, C.A.

No. 3800/89 decided on 11.1.1990, this Court had accepted the principle that when the owner himself has purchased the land under acquisition, the D consideration mentioned in the sale deed would form the basis to determine the market value. Though the High Court has relied on the sale deeds under Ex.65 and 66 relating to the lands in Nityanand Nagar Colony, it is also necessary to go into that aspect of the matter in the view we have stated above.

Considered from this perspective, we think that it is not a fit case for our interference under Article 136 of the Constitution. In view of the fact that the appellant has withdrawn the amount deposited pursuant to the award of the Reference Court, since the award of the Collector now stands confirmed, respondent No. 2 is entitled to recover the same from the appellant. The appellant is given six months' time for depositing the same with the same, interest as was awarded by the Reference Court.

The appeal is accordingly dismissed but, in the circumstances, without costs.

T.N.A.

Appeal dismissed.