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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5311 OF 2012 (arising out of SLP(C)No.34284 of 2011)

AHSANUL HODA     … APPELLANT

Versus

STATE OF BIHAR     … RESPONDENT

J U D G M E N T

SUDHANSU JYOTI MUKHOPADHAYA, J.

This appeal has been filed by the claimant­

appellant against the judgment and order of the Patna  

High Court dated 10.2.2011 by which the High Court  

reduced the compensation awarded to the claimant, by  

fixing the lower market rate of the land in question  

and set aside the part of the order passed by the  

Reference Court granting Rs.10,000/­ towards damages of  

standing crops.  

2.  Certain lands in Mauja Mothabari, Thana Katoria,  

Pargana Sarohi, District Bhagalpur (now Banka) were  

acquired for the construction of the Orni­reservoir.  

Land measuring 3.54 acres of Khata No.111, Khasra  

No.2925 of same village belonging to the appellant was  

also acquired. The Collector by an award order dated  

16.10.1984 fixed the compensation of Rs.6513.60 for the  1

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entire land based on market rate at Rs.16 per decimal.  

No amount was awarded towards damages of standing  

crops.

3. The  Reference Court  to which the claims of the  

land owners for higher compensation were referred,  

determined the market value as Rs. 250/­ per decimal  

i.e. Rs. 25,000/­ per acre.  The Reference Court based  

its decision on two sale transactions submitted by the  

claimant dated 25.11.1980 and 16.10.1975 (Ext.1 and  

Ext.1/b) relating to sale of plots in the neighbouring  

area.   Considering the fact that the sale deeds were  

related to small extent of land of nearby village and  

the acquisition was related to a larger extent,   the  

Reference Court   was of the view that certain  

percentage could be deducted while determining the  

value of the land in question. However, as sale deeds  

were of the earlier period,   after such deduction,  

appropriate increase in the value of the land from the  

date of the sale deed to the date of the Notification  

under Section 4   of the Land Acquisition Act, 1894  

(hereinafter referred to as ‘the Act’) was made.

4. The respondent preferred an appeal before the High  

Court.    The High Court disposed of the said appeal by  

impugned judgment dated 10.2.2011. The   High Court  

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modified the judgment of the Reference Court with  

regard to the market value by reducing the market rate  

from Rs.250/­ per decimal to Rs.100/­ per decimal and  

set aside the part of   the order whereby sum of  

Rs.10,000/­ was granted by the Tribunal as damages of  

standing crops.

5. During the pendency of the appeal before the High  

Court and after 23 years of the acquisition, the  

appellant received a sum of Rs. 5,69,531/­ on  4.7.2007  

as per determination of  the Reference Court and paid a  

sum of Rs 56,953/­ towards tax.   The effect of  

impugned judgment passed by the High Court is that the  

claimant has to refund part of the amount received by  

the claimant as compensation.  

6. The questions that arise for our consideration  

are:

(i)  Whether the market value as fixed by the  

Tribunal is excessive as contended by the  

State of Bihar;

(ii)  Whether the Tribunal rightly compensated  

the claimant for damages of standing crops.

7. The High Court by its impugned judgment modified  

the compensation and set aside the part of the  order  

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relating to compensation  for standing crops on three  

counts, namely;   (a) The sale deeds dated 25.11.1980  

(Ext.1) and 16.10.1975 (Ext.1/b)   related to smaller  

area of  25 and  6 ½ decimals of land respectively; (b)  

Aforesaid sale deeds do not relate to agricultural land  

but  homestead land as  in the boundary of one of the  

sale­deed ‘Masjid’ and ‘road’  is shown; (c)  OP­W­1,  

Shri Ratneshwar Pd. Singh has stated that there was no  

crop standing on the   land at the time of the  

possession.  

8. Learned counsel for the appellant assailed the  

judgment passed by the   High Court on the following  

grounds:

(i) In the absence of any other evidence except  

the sale deeds (Ext.1 and Ext.1/b),   the  

determination of market value is not based on any  

evidence but on mere presumption and surmises.   

(ii) The High Court wrongly relied on the  

statement of OP­W­1, Ratneshwar   Pd. Singh,   who  

was posted elsewhere at the time of   acquisition  

of the land.   On the other hand,   the Reference  

Court decided the quantum of payment towards  

damages of standing crops on the basis of evidence  

on record.   

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9. Learned counsel for the State justified the order  

passed by the High Court.   It was contended that the  

compensation with regard to larger area cannot be  

determined on the basis of sale deeds related to  

smaller area.  As the sale deeds at Ext.1 and Ext.1/b  

related to homestead land having shown ‘road’ or  

‘masjid’ in the boundary,   no comparison can be made  

with the agricultural land acquired for other purpose.  

10. Before the Reference Court claimant produced seven  

witnesses, AW­1 to AW­7 and three sale deeds, Ext.1,  

Ext.1/a and Ext.1/b.   On behalf of the State, one  

witness OP­W­1, Ratneshwar Pd. Singh, an assistant to  

the Land Acquisition Officer, Medium Irrigation  

Project, Bhagalpur and the two valuation Khatiyans,  

Ext. A and A/1 were produced.  

11. AW­6, the claimant, himself in his deposition  

stated that 3.54 acres of his land acquired is ‘three  

fasla’ (produced three crops in an area) and was  

irrigated  from the Orni river.  At the time of taking  

possession by State,  potato, wheat and sugar­cane were  

standing crops which were damaged causing a loss of Rs.  

10,000/­ to Rs.12,000/­.   The market value of the land  

at the time of acquisition was between Rs. 50,000/­ to  

Rs. 60,000/­ per acre.  Similar statements were made by  

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other witnesses i.e. AW­1 to AW­5.  They supported the  

claim of the claimant.   

12. Kanhaiya Lall Ghosh, A.W.7, a deed writer proved  

sale deeds Ext. 1 dated 25.11.1980, Ext. 1/a   dated  

6.10.1980 and Ext.1/b   dated 16.10.1975.   He stated  

that he was the deed writer of Exts.1, 1/a and 1/b.  By  

Ext.1/a, Bibi Rahana Sultana and others sold 70  

decimals  of  land  for  consideration of  Rs.7,000/­  on  

6.10.1980.  By Ext.1/b  dated 16.10.1975, Seikh Janual  

and others sold 6 ½  decimals of land for consideration  

of Rs. 1500/­ .

13. Ratneshwar  Pd. Singh,  OP­W­1  deposed before  the  

Reference that the land of the appellant measuring  

3.54 acres had  been acquired by the State vide  L.A.  

Case No. 76/81­82 and   department paid Rs. 5664/­  

towards value of the land and Rs. 849.60   as  

additional compensation; a sum of Rs. 6513.60 in total  

was paid as compensation.  He specifically stated that  

he was not posted at the time of acquisition and  

whatever he stated is based on the official record.     

14. Ext. A and Ext. A/1,  valuation Khatiayan  mainly  

contains Khata No.,  Khesra No., area  acquired, rate  

per acre, value of the land determined and   other  

statutory benefits provided to one or other claimant.  

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Those Exts. A and A/1  do not show anything about the  

market value of any land of the village or the nearby  

village.  

15. The Reference Court,   based on the sale deeds  

Ext.1 and Ext.1/b and considering   the evidence on  

record,   determined the market value at Rs.250/­ per  

decimal and allowed a sum of Rs.10,000/­ towards damage  

of standing crops.   

16. This  Court in number of cases has taken judicial  

notice of the fact that there is a steady increase in  

the market value of the  land and has also adopted the  

procedure for determining the increased market value  

and relied upon  the transaction at  a given rate per  

year.

17. In  General Manager, Oil and Natural Gas  

Corporation Limited vs. Rameshbhai Jilvanbhai Patel and  

Another  reported in  (2008) 14 SCC 745,     this Court  

observed that in the absence of other acceptable  

evidence, a cumulative increase of   10 to 15 per cent  

is permissible with reference to acquisitions in  1990.  

In the decades preceding 1990s, the quantum of increase  

was considered to be less than 10 per cent per annum.   

18. This Court in Sardar Joginder Singh vs. State of  

Uttar Pradesh and Another (2008) 17 SCC 133,   noticed  7

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that the said case related to acquisition in  the year  

1979 and relying   upon   the   award related to an  

acquisition of  1969 observed that the general increase  

between 1969­79 can be taken to be around 8­10 per cent  

per annum.   If this increase is calculated  

cumulatively, the total increase in 10 years would be  

around 100 per cent.   

19. The question relating to the value of larger  

extent of agricultural land, if required to be  

determined with reference to price fixed for small  

residential plot, came for consideration before this  

Court in  Haridwar Development Authority Vs. Raghubir  

singh and Others (2010)11 SCC 581.   In the said case,  

this Court held as follows:

“When the value of a large extent of agricultural  land has to be determined with reference to the  price fetched by sale of a small residential  plot, it is necessary to   make an appropriate  deduction towards the development cost, to arrive  at the value of the large   tract of land.   The  deduction towards development cost may vary from  20% to 75% depending upon various factors.  Even  if the acquired lands have situational  advantages,   the minimum deduction from the  market value of a small residential plot, to  arrive at the market value of a larger  agricultural land,  in the  usual course, will be  in the range of 20% to 25%.  In this case,  the  Collector has himself adopted a 25% deduction  which has been affirmed by the Reference Court  and the High Court.   We,   therefore, do not  propose to alter it.”

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Therefore, it is clear that mere reliance made by  

a Court on sale deeds of smaller residential area for  

determination of market value of larger agricultural  

area,   the same will not  render the determination  

illegal until and unless it is shown that the  

determination was not proper.

20. In the instant case, the average value of the  

sale­deeds relied upon by the Reference Court (Ext.1  

and Ext.1/b) was Rs. 401/­ at the time of acquisition.  

Therefore, as the sale­deeds were in relation to  

smaller plots,   the deduction of 37% was made by the  

Reference Court and   thereafter, by allowing  

appropriate 10% increase in the value of the land from  

the date of the sale deeds upto the date of  

Notification under Section 4 of the Act,  the Reference  

Court arrived   at a figure of Rs.250/­ per decimal.  

The High Court while arriving at figure of Rs. 100/­  

per decimal considered only the fact that the sale  

deeds relied upon were in relation to smaller plots and  

those  sale  deeds(Ext.1  and Ext.1/b)  were  related  to  

homestead land and hence fixed Rs. 10,000/­ per acre as  

compensation.   It completely failed to consider the  

increase in price of land and the deduction made by the  

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High Court is nearly 75% which is not in accordance  

with law.

As Ext.1 and Ext.1/b which were related to smaller  

area,   were the only sale deeds available for  

comparison, the same were relied upon by the Reference  

Court, but the High Court erred completely in  

disregarding the said sale­deeds and thus arrived at a  

finding of Rs.100/­ per decimal as   market value on  

mere presumption and surmises.  There was no evidence  

on record to arrive at this value and, even if it was a  

case of deduction, the High Court has not  given  any  

reason in support of the same.  

21. The High Court also committed error   in holding  

that the sale deeds (Ext.1 and Ext.1/b) relate to  

homestead land, on the ground that a ‘road’ and a  

‘masjid’  has been shown in the boundary  of one of the  

exhibits. From the copies of Ext.1 and Ext. 1/b on  

record (Annexure P­12 Colly), we find no citation in  

Ext.1 showing the land as homestead land.  On the other  

hand Ext.1/b specifically cites that the land is an  

agricultural land for which the annual revenue rent of  

Rs.25 is payable.  

22. The High Court disregarded the evidence adduced by  

the claimants in its entirety without any reason;  

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however, it relied on evidence of an officer of the  

State (OP­W­1) Ratneshwar Pd. Singh and set aside the  

compensation in relation to the standing crops.   The  

Reference Court has clearly recorded in its order that  

the said State Officer was not posted in that area at  

the time of acquisition and his knowledge was limited  

to the official record.   The record was silent as to  

the standing crops.   The Khatiyans (Ext.A and Ext.­

A/1) were also not relating to standing crops.   The  

fact that the Collector had not allowed any amount  

towards damage of standing crops and that no such  

amount is mentioned in the Khatiyan  does not mean that  

no standing crop was there at the time of taking  

possession of the land.   On the contrary,   the  

witnesses AW­1 to AW­5 appeared and supported the  

statement of claimant that at the time of the  

possession, standing crops were there which were  

damaged causing loss to the extent of Rs.10,000 to Rs.  

12,000/­.   During their cross examination the  

respondents could not extract any other material  

evidence against the claimants.

23. In view of the finding as recorded above, we have  

no other alternative but to set aside the order passed  

by the High Court and restore the award passed by the  

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Reference Court. The impugned judgment passed by the  

High Court is accordingly set aside and the appeal is  

allowed.   The respondents are directed to pay the  

appellant the compensation in terms of the award passed  

by the Reference   Court   after adjusting the amount  

already paid within three months.   There shall be no  

separate order as to costs.   

………………………….........…………………….J.                        (G.S. SINGHVI )

….........…………………………………………….J.                        (SUDHANSU JYOTI MUKHOPADHAYA)

NEW DELHI, JULY 1 , 2013.

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