01 August 2013
Supreme Court
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DIGAMBER Vs STATE OF MAHARASHTRA .

Bench: G.S. SINGHVI,V. GOPALA GOWDA
Case number: C.A. No.-005346-005346 / 2013
Diary number: 8396 / 2006
Advocates: LAWYER S KNIT & CO Vs ANIL SHRIVASTAV


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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.5346 OF 2013

DIGAMBER & ORS.      .. APPELLANTS                 VS.

STATE OF MAHARASHTRA & ORS.     .. RESPONDENTS

J U D G M E N T

V. Gopala Gowda, J.

Leave has been granted by this Court vide order  

dated 8.7.2013.

2. This appeal is directed against the judgment and  

order  dated  05.10.2005  passed  by  the  High  Court  of

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Judicature of Bombay, Bench at Aurangabad passed in  

First Appeal No. 646 of 1998 whereby the High Court  

set aside the judgment and award dated 02.05.1998 of  

the  learned  Civil  Judge,  Senior  Division,  Nanded  

passed in land acquisition reference case and restored  

the compensation awarded at the rate of Rs.50,000/-  

per hectare by the Special Land Acquisition Officer,  

Nanded  by  allowing  the  appeal  filed  by  the  

respondents.     

3.   It is contended by Ms. Bina Madhavan, the learned  

counsel for the appellants that the impugned judgment  

is  contrary  to  the  legal  evidence  on  record  

particularly Exhs. 20-21 which are the sale deeds of  

the plots covered in the same area that were prior to  

the notification that is before 14.06.1990 which sale  

instances were very well considered by the reference  

court  for  comparison  and  the  finding  of  fact  was  

recorded that the said instances are comparable to the  

acquired land to that of the plots covered in the sale  

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deeds. Therefore, it is contended that the acquired  

land has the similar non agricultural potentiality and  

the State Government  had acquired the said land in  

favour  of  the  Maharashtra  Industrial  Development  

Corporation   (in short ‘the Corporation’)  for the  

purpose of formation of industrial estate and sale of  

the plots for commercial purposes. It is urged by the  

learned counsel that the judgment and award passed by  

the reference court is erroneously set aside by the  

High Court as it has found fault with it in placing  

reliance upon the sale instances and has wrongly re-

determined the market value of the land which findings  

recorded by the High Court in its judgment are not  

only erroneous in law but also suffers from error in  

fact  and  therefore,  the  same  is  liable  to  be  set  

aside.

4. The further legal contention urged by the learned  

counsel for the appellants is that learned reference  

Judge  has  rightly  awarded  the  compensation  of  the  

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acquired  land  after  re-determining  its  market  value  

based  on  legal  evidence  on  record  at  the  rate  of  

Rs.5/- per sq. feet. The documentary evidence produced  

by the appellants are sale deeds marked as Exhs. 22  

and 23 pertaining to years 1991 and 1993 respectively  

and Exhs. 24 and 25 pertaining to the year 1994, ie.  

post acquisition notification period.   That the plots  

covered  in  the  said  sale  instances  are  non  

agricultural plots of Venkateshnagar Layout which are  

comparable to the acquired land is the finding of fact  

recorded by the learned Judge of the reference court  

on proper appreciation of legal evidence on record.  

The same is supported by the decision of this Court in  

the  case  of  The  special  Land  Acquisition  Officer,  

BTDA,  Bagalkot  Vs.  Mohd.  Hanif  Sahbi  Bawa  Sahib1,  

wherein this Court in the aforesaid case has held that  

the reference court can take into consideration the  

plots which are covered in the sale instances which  

were  small  bits  of  land,  if  the  acquired  land  is  

comparable to the land covered in sale deeds and that  1 JT 2002 (3) SC 176

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placing  reliance  on  such  sale  instances  by  the  

reference  court  for  re-determination  of  the  market  

value of the acquired land is permissible in law. It  

is  further  urged  by  the  learned  counsel  that  this  

vital aspect of the matter has been overlooked by the  

learned  Judge  of  the  High  Court  while  passing  the  

impugned  judgment  and  award  by  setting  aside  the  

judgment and award of the reference court and restored  

the  compensation  awarded  by  the  Land  Acquisition  

Officer which is vitiated both on facts and on law.  

Therefore, the same is liable to be set aside and the  

judgment of the reference court must be restored.

5. Further, it is contended by her that the learned  

Judge of the High Court has erred in affirming the  

compensation awarded by the Special Land Acquisition  

Officer at Rs. 50,000/- per hectare of the acquired  

land ignoring its potentiality as it is acquired for  

the purpose of formation of industrial estate with a  

view to carve out the plots and allot the same in  

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favour  of  allottees/private  industrial  entrepreneurs  

at commercial rates for construction of the commercial  

and industrial buildings upon such allotted plots.

6. It is further contended that the impugned judgment  

and award of the High Court is otherwise contrary to  

the principles of law laid down by this Court in a  

catena of cases, and, therefore requested this Court  

to award just and reasonable compensation as awarded  

by the reference court.

7. Mrs. Asha Gopalan Nair, the learned counsel for  

respondent Nos. 1 and 2 and Mr.Shyam Divan, learned  

Senior  Counsel   for  respondent  No.3  have  sought  to  

justify the impugned judgment of the High Court, inter  

alia, contending that the learned single Judge of the  

High Court has rightly set aside the impugned judgment  

in the First Appeal after recording valid and cogent  

reasons  for  rejecting  the  finding  recorded  by  the  

reference  court  on  contentious  issues  by  placing  

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reliance  upon  the  pre  and  post  sale  instances  in  

relation to the non residential plots which are not  

comparable  to  the  acquired  land.  Therefore,  it  is  

submitted that the High Court has rightly came to the  

conclusion on proper re-appraisal of evidence and held  

that  the  finding  of  fact  recorded  by  the  reference  

court in placing reliance upon the sale instances is in  

relation to small plots, whereas the land acquired is a  

bigger area. Therefore, the plots covered under sale  

instances are not comparable to the acquired land in  

order to arrive at a conclusion and record finding that  

the acquired land is comparable to the plots referred  

to  supra.  Further,  the  land  of  the  owners  has  not  

acquired  non  agricultural  potentiality  and  re-

determination  of  the  market  value  by  the  learned  

reference  Judge  on  the  basis  of  sale  instances  is  

erroneous and contrary to the judgments of this Court.  

The  High  Court,  in  support  of  its  findings  and  

conclusions has placed reliance upon the judgment of  

this Court reported in Saraswati Devi and others Vs.  

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U.P. Government  & Anr2. and another judgment in Union  

of India Vs. Zila Singh and Ors.3  wherein this court  

after interpretation of Section 23 of Land Acquisition  

Act, 1894 (in short  ‘the L.A. Act), has held that the  

sale price in respect of a small piece of land (one  

bigha  in  that  case)  cannot  be  the  basis  for  

determination of market value  of a vast stretch of  

land  (5484  bighas  in  that  case).   Therefore,  the  

impugned judgment of the High Court in setting aside  

the judgment of the reference court must be accepted by  

this Court and does not call for interference by this  

Court.   Hence, they have prayed for dismissal of this  

appeal.

8. With reference to the above rival legal contentions,  

the following points would arise for consideration of  

this Court:

2   AIR 1992 SC 1620 3(2003) 10 SCC 166

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I. Whether the impugned judgment passed by  

the  High  Court  by  reversing  the  

judgment  and  award  of  the  reference  

court  is  vitiated  on  the  ground  of  

erroneous  finding  and  also  error  in  

law?

II. For  what  award  the  appellants  are  

entitled to in this appeal?

9. The first point is required to be answered in the  

affirmative  in  favour  of  the  appellants  for  the  

following reasons:-

The  State  of  Maharashtra  in  exercise  of  its  

statutory power acquired the lands in favour of the  

Corporation  by  publishing  the  notification  in  the  

government gazette on 7.09.1991, and final notification  

published in the government gazette on 12.07.1992, for  

the  purpose  of  industrial  development  by  the  

Corporation in the State of Maharashtra.  Undisputedly  

the acquisition of land is for non residential purpose  

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as  it  was  required  to  establish  industries  through  

industrial  entrepreneurs  in  the  acquired  land  by  

forming  industrial  estate  and  carving  out  the  

industrial plots by the Corporation, which is purely a  

commercial  purpose.   This  important  aspect  of  the  

matter was required to be kept in mind by the Special  

Land Acquisition Officer at the time of determining the  

market value of the acquired land in exercise of his  

statutory power under Section 11 of the L.A. Act and  

the  Special  Land  Acquisition  Officer  has  awarded  

compensation  at  Rs.  50,000/-  per  hectare  of  the  

acquired land which does not reflect the correct market  

value.

  10.  Feeling  aggrieved  by  the  said  award  the  

appellants herein sought for reference to the reference  

court by filing claim petition under Section 34 of the  

Maharashtra  Industrial  Development  Act,  1961  for  

enhancement  of  compensation  by  re-determining  the  

market  value.   The  Collector  made  reference  to  the  

reference court by acceding to the request of the land  

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owners for re-determination of the market value of the  

acquired  land.   The  appellants  produced  documentary  

evidence  of  sale  instances  of  the  plots  which  are  

situated in the near proximity of the acquired land and  

the  reference  court  has  examined  their  claim  for  

enhancement of compensation and rightly re-determined  

the market value of their land by placing reliance upon  

the sale instances. The said claim was opposed by the  

respondents by filing their written statement, inter  

alia, contending that compensation awarded by the land  

acquisition officer is as per the sale consideration of  

the  land  covered  in  the  sale  instances  which  are  

situated nearby the acquired land.  The claimants have  

rightly placed strong reliance upon the sale instances  

of  small  plots  which  are  formed  in  the  New  

Venkateshnagar layout.  The sale deed Exh. 21 dated  

17.3.1989  shows that the 120 sq. feet was sold for Rs.  

3500/- and Exhs. 20 and 22 dated 03.11.1989 which plots  

measuring 1200 sq. feet sold for Rs.9000/- i.e. Rs.  

7.50/- per sq. feet.  The aforesaid sale deeds are no  

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doubt prior to the issuance of preliminary notification  

under  Section  4  of  the  L.A.  Act.   The  other  sale  

instance produced by the claimants, Exh. 23 from GRC  

136 shows that plot No.22 about 1500 sq. feet has been  

sold for 18,000/- at the rate of Rs. 12 per sq. feet.  

The  sale  deed  is  dated  31.05.1993  i.e.  three  years  

later  from  the  date  of  issuance  of  preliminary  

notification under Section 4 of the L.A. Act.  Another  

sale deed Exh. 14 is in respect of G.No.605 wherein  

plot No. 8 measuring 45 x 14 sq. feet was sold for Rs.  

35,000/- on 21.12.1994.   The appellants also produced  

the sale deed dated 16.02.1990 at Exh. 33 showing that  

plot No. 34 and 35 admeasuring 60 x 30 feet situated at  

Venkateshnagar  Layout  was  sold  for  Rs.  11,000/-.  

Another sale deed Exh. 34 shows that one plot No. 13  

measuring 40 x 30 feet was sold for Rs. 9,000/- on  

02.11.1991  which  are  all  after  the  preliminary  

notification  under  Section  4  of  the  L.A.  Act.  The  

learned  reference  Judge  has  rightly  placed  reliance  

upon the said sale instances for comparison and held  

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that  the  acquired  land  is  comparable  to  the  plots  

covered in the sale deeds referred to supra, as it has  

acquired non-agricultural potentiality and the acquired  

land is situated in the near proximity to the plots  

covered in the sale deeds.  

11.  The  learned  Judge  of  the  reference  court  has  

referred to the notes of inspection of the site made by  

the Assistant Collector and Land Acquisition Officer on  

21.11.1990, wherein they have stated that the acquired  

land is situated adjacent to Bhokar and on the eastern  

side of Bhokar Umri Road i.e. towards southern side of  

Bhokar  -  Bhainsa  Road,  and  population  of  Bhokar  is  

about  12000.   It  is  further  stated  that  there  are  

various facilities in the said area like school and  

college.  Bhokar is connected by Railway and State Road  

Transport.  The learned reference Judge after referring  

to the factual contention urged on behalf of the Land  

Acquisition Officer and the claim of the appellants and  

placing reliance upon the documentary and oral evidence  

on  record,  passed  judgment  by  awarding  just  and  

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reasonable  compensation  by  re-determining  the  market  

value.  The land G.No.133 is acquired for the purpose  

of  Mini  MIDC  i.e.  for  non  agricultural  purpose  and  

further with reference to Map. 4, the acquired land is  

on Nanded Bhokar – Bhainsa Highway.  Further, on the  

basis of receipts produced at Exhs. 17 and 18, the  

claimant No. 2 Ashok Narayan Kondalwar has converted  

his share of land from G.No. 123 into non-agricultural  

purpose.   To  substantiate  this  fact  the  claimants  

produced the certificate issued by the Talathi, which  

is marked as Exh. 19. The learned reference Judge has  

also taken note of the fact that there is no evidence  

to prove that the acquired land was converted for non  

agricultural purpose prior to 14.06.1990.  From Exhs.  

40 and 41, it is clear that the possession of this land  

was taken on 19.6.1995 and prior to that date claimant  

No. 2 Ashok Narayan Kondalwar had converted his share  

of  land  into  non  agricultural  purpose.  The  learned  

Judge did not consider the said documentary evidence  

and erroneously held that they are not helpful to the  

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appellants.  However,  he  has  rightly  placed  reliance  

upon  the  sale  instances  on  record  and  come  to  the  

correct conclusion and held that there is tendency for  

price of the land to increase in the locality and found  

fault  with  the  Land  Acquisition  Officer  in  not  

determining the market value of the acquired land at  

the rate of Rs. 5/- per sq. feet after deducting 40%  

area of the acquired land which is used for the purpose  

of development.  Therefore, the appellants are entitled  

for compensation as awarded by the learned Judge of the  

reference court.

 

12. The learned reference Judge has recorded a finding  

of fact stating that the acquired land is having non  

agricultural potentiality as it has been acquired for  

MIDC  for  the  purpose  of  industrial  development  and  

further, it is an admitted fact that no crops were  

raised by the appellants upon the land.  The claim of  

the  appellants  was  partly  allowed  by  the  reference  

Judge  holding  that  they  are  entitled  for  enhanced  

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compensation at the rate of Rs. 5/- per sq. feet as  

per  the  calculations  made  in  the  judgment  of  the  

reference court.  

13.  Accordingly, the reference Judge has rightly re-

determined the market value of the acquired land and  

awarded all statutory benefits like 30% solatium and  

interest and additional compound interest from August,  

1993  to  6th March,  1995.   Statutory  interest  under  

Section  38  of  the  L.A.  Act  was  given,  on  enhanced  

compensation  from  19.06.1995  to  18.06.1996  and  

thereafter  @  15%  from  19.06.1996  till  the  date  of  

realization of the amount by the appellants.

14.   We have carefully examined the factual and legal  

contentions urged on behalf of the parties and also  

the findings recorded by the learned reference Judge  

in the judgment impugned in the First Appeal filed by  

the respondents before the High Court. The reference  

court  has  rightly  placed  reliance  upon  the  sale  

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instances  for  comparison  with  that  of  the  acquired  

land  after  satisfying  the  fact  that  it  has  also  

acquired non-agricultural potentiality. The subsequent  

sale deeds in relation to the residential plots of New  

Venkateshnagar  Layout,  which  were  sold  after  the  

preliminary notification was issued in relation to the  

acquired land, the learned reference Judge has noticed  

the same and held that there is  a trend of escalation  

of the price of land situated in the proximity of the  

acquired land. The said finding of fact is erroneously  

set aside by the High Court, holding that the learned  

reference  Judge  has  erroneously  applied  the  sale  

instances  of  the  small  residential  plots  of  New  

Venkateshnagar  Layout  to  the  land  acquired  by  the  

State government in favour of the M.I.D.C. The Land  

Acquisition Officer while determining the market value  

has considered the acquired land as agricultural land  

and awarded inadequate compensation in favour of the  

appellants.   

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15. We have carefully examined the factual and legal  

contentions urged on behalf of the respondents keeping  

in  view the  decision of  this Court  in the  case of  

Sabhia Mohammed Yusuf Abdul Hamid Mulla  Vs.  Special Land  

Acquisition  Officer4,   wherein   this  Court  after  

interpreting Section 23 of the L.A. Act, 1894, referred  

to the various legal principles laid down by the Bombay  

High  Court  and  this   Court  regarding  the  relevant  

criteria  to  be  followed  by  the  Land  Acquisition  

Collector and Courts for determination of the market  

value of the land acquired for public purpose.  At  

paragraph 5 of the above referred judgment, there is a  

reference to the Bombay High Court’s judgment rendered  

in  the  case  of  Nama  Padu  Huddar  Vs.  State  of  

Maharashtra5,   the  relevant  extracted  portion  is  

reproduced below:

“Judicial note can be taken of the fact  that  the  industrial  growth  in  and  around  Bombay has started with rapid stride from the  year 1965 onwards. In fact, the growth is by  leaps  and  bounds  in  the  magnitude  of  industries as well as number of industries  

4   (2012) 7 SCC 595 5  1994 BCJ 316

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and  virtually  all  the  industries  of  the  country  are  represented  on  the  industrial  estates scattered on this highway. It is also  an admitted position that on this highway on  all sides the facility of electric supply is  available as also of abundant water supply.  In  the  area  in  question  it  is  also  an  admitted  position  that  all  the  lands  have  suitable access roads to Zila Parishad and  State Highway including lands which are the  farthest from the highway.”

16. Further, in para 7 of Sabhia Mohammed Yusuf Abdul  

Hamid  Mulla’s  judgment, reference  is  made  to  the  

judgments in Shashikant Krishanji v. Land Acquisition  

Officer6 and Nama Padu Huddar v. State of Maharashtra  

(supra),  relevant  portion  of  which  is  extracted  

below:-  

“The land involved in the reference in hand  and the land involved in State of Maharashtra  v.  Ramchandra  Damodar  Koli7 are  virtually  identical situated in the same area bearing  similar  topographical  and  physical  characteristics  covered  by  the  same  Notification dated 3-2-1970, when the nearby  land  of  the  land  under  reference  fetched  market value @ Rs 25 per square metre. On the  date of notification, certainly the land under  reference will fetch the same market value.”

6 1993 BCJ  27 7 (1997) 2 Mah. LR 325

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17. Also paras 16 and 17 from Sabhia Mohammed Yusuf  

Abdul Hamid Mulla (supra) are quoted hereunder:   

“16. We  have  considered  the  respective  arguments and carefully perused the record.  It  is  settled  law  that  while  fixing  the  market value of the acquired land, the Land  Acquisition Collector is required to keep in  mind the following factors:

(i)  Existing  geographical  situation  of  the land.

(ii) Existing use of the land. (iii) Already available advantages, like  proximity to National or State Highway  or road and/or developed area. (iv) Market value of other land situated  in  the  same  locality/village/area  or  adjacent or very near the acquired land.

17. In Viluben Jhalejar Contractor v. State  of Gujarat8 this Court laid down the following  principles for determination of market value  of the acquired land: (SCC pp. 796-97)

“17.  Section  23  of  the  Act  specifies  the matters required to be considered in  determining  the  compensation;  the  principal  among  which  is  the  determination of the market value of the  land on the date of the publication of  the notification under sub-section (1) of  Section 4.

18.  One  of  the  principles  for  determination  of  the  amount  of  compensation  for  acquisition  of  land  

8 (2005) 4 SCC 789

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would be the willingness of an informed  buyer to offer the price therefor. It is  beyond any cavil that the price of the  land which a willing and informed buyer  would  offer  would  be  different  in  the  cases  where  the  owner  is  in  possession  and enjoyment of the property and in the  cases where he is not.

19.  Market  value  is  ordinarily  the  price the property may fetch in the open  market  if  sold  by  a  willing  seller  unaffected  by  the  special  needs  of  a  particular  purchase.  Where  definite  material is not forthcoming either in the  shape of sales of similar lands in the  neighbourhood  at  or  about  the  date  of  notification  under  Section  4(1)  or  otherwise, other sale instances as well  as  other  evidences  have  to  be  considered.”

18. Further, it would be worthwhile to refer to the  

portion which is extracted from  Atma Singh Vs. State  

of Haryana9  which para is referred to at para 18 in  

Sabhia Mohammed Yusuf Abdul Hamid Mulla’s case (supra)  which reads thus:

“5. For ascertaining the market value of the  land, the potentiality of the acquired land  should  also  be  taken  into  consideration.  Potentiality  means  capacity  or  possibility  for  changing  or  developing  into  state  of  actuality.  It  is  well  settled  that  market  value  of  a  property  has  to  be  determined  

9  (2008) 2 SCC 568

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having due regard to its existing condition  with  all  its  existing  advantages  and  its  potential  possibility  when  led  out  in  its  most  advantageous  manner.  The  question  whether a land has potential value or not, is  primarily  one  of  fact  depending  upon  its  condition, situation, uses to which it is put  or is reasonably capable of being put and  proximity  to  residential,  commercial  or  industrial  areas  or  institutions.  The  existing amenities like water, electricity,  possibility  of  their  further  extension,  whether nearabout town is developing or has  prospect of development have to be taken into  consideration.”

19. In para 22 of  Sabhia Mohammed Yusuf Abdul Hamid  

Mulla’s case (supra), the judgment of this Court in  Land Acquisition Officer Vs. L. Kamalamma10 is referred  

to  and  the  relevant  portion  of  which  is  extracted  

hereunder:  

 “7. … When a land is acquired which has the  

potentiality of being developed into an urban  land, merely because some portion of it abuts  the  main  road,  higher  rate  of  compensation  should be paid while in respect of the lands  on the interior side it should be at lower  rate  may  not  stand  to  reason  because  when  sites are formed those abutting the main road  may  have  its  advantages  as  well  as  disadvantages. Many a discerning customer may  prefer to stay in the interior and far away  

10   (1998) 2 SCC 385

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from the main road and may be willing to pay a  reasonably  higher  price  for  that  site.  One  cannot rely on the mere possibility so as to  indulge  in  a  meticulous  exercise  of  classification of the land as was done by the  Land Acquisition Officer when the entire land  was  acquired  in  one  block  and  therefore  classification  of  the  same  into  different  categories does not stand to reason.”

20.  Para 18 of this Court's judgment in the case of  

Faridabad  Gas  Power  Project,  NTPC  Ltd.,etc  Vs.  Om  

Prakash & Ors., etc11, is extracted thus:

“18. On the facts and circumstances of the  matters before us and difference in quality  and potentiality of the lands acquired, we are  of the view that market value of the acquired  lands  for  NTPC  when  compared  to  the  lands  acquired  for  Sector-II  Faridabad,  should  be  reduced by at least one-fifth (20%).”

21. It would be worthwhile to refer to the judgment of  

Privy Council decided on 23.02.1939 in the decision  

reported  in  Vyricherla  Narayana  Gajapatiraju  Vs.  

Revenue Divisional Officer12  wherein at para 24 it  

reads as under:

“24.  It  was  then  claimed  on  the  appellant’s behalf that the spring could but  

11            (2009)  4  SCC   719 12  AIR 1939 PC 98

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for its acquisition, have been used by him as  a source of water supply either to the Harbour  Authority or to the oil companies and others  residing  or  carrying  on  business  in  the  harbour area; and the appellant claimed to be  compensated  upon  this  footing.   After  a  lengthy hearing before him in the course of  which many questions of law and fact not now  in  issue  were  discussed,  the  learned  Judge  made his award.  He found as a fact, and the  fact cannot be disputed, that the water of the  spring was on 13th February, 1928 capable of  being  used  as  a  source  of  water  supply  to  persons outside the plaintiff’s land.  He also  found that the only possible buyers of the  water at that date were the Harbour authority  itself and the oil companies and labour camps  that might be established as a result of the  development  of  the  Harbour  and  stated  that  this fact would be taken into consideration in  fixing the amount of compensation.  But after  considering the authorities on the subject, he  came to the conclusion as a matter of law that  the value to a vendor of a potentiality of his  land can be assessed even though there are no  other possible purchasers beyond the acquiring  authority.  Other principles of law stated by  him for his guidance in making his award were  that it was the contingent possibility of the  user that had to be taken as the basis of  valuation and not the realized possibility and  that the use to which the acquiring authority  had actually put the property could be taken  as a strong piece of evidence to show that the  property acquired could be put to such use by  the owner at the date of acquisition.”

          (Emphasis supplied)

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22.  The  judgment  of  Bombay  High  Court  extracted  in  

Sabhia Mohammed Yusuf Abdul Hamid Mulla’s case (supra),  and  the  principles  laid  down  by  this  Court  would  

clearly go to show that the relevant consideration for  

determination of market value of the acquired land is  

virtually identical. The nearby land of the land under  

reference  fetched  market  value  of  Rs.25/-  per  sq.  

metre. In the judgment referred to supra it is held  

that judicial notice can be taken of the fact that the  

industrial growth in and around Bombay has started with  

rapid strides from the year 1965 onwards.  In fact, the  

growth is by leaps and bounds in magnitude as well as  

number of industries and virtually all the industries  

of  the  country  are  represented  on  the  industrial  

estates scattered on this highway.

23. The  sale  instances  in  relation  to  the  small  

residential plots covered in the sale deeds Exhs. 20-

21 are situated in the same area, which sales were  

prior to the issuance of the preliminary notification  

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i.e.  before  14.06.1990  and  it  has  similar  

topographical  and  physical  characteristics  and  the  

fact is that the land of the appellants is acquired  

for the purpose of industrial development, which has  

got the potentiality for development of the land as  

industrial estate and to carve out industrial plots in  

it. That the acquisition of the land is for commercial  

purpose  should  be  the  relevant  criteria  for  

determining  the  market  value  by  both  the  Land  

Acquisition  Officer  and  reference  Court  placing  

reliance upon the sale instances even in relation to  

small  plots  of  land,  though  it  is  shown  from  the  

records  that  the  acquired  land  on  the  date  of  

notification is an agricultural land. But the acquired  

land has got non agricultural potentiality as the said  

land  was  proposed  by  the  District  Collector  after  

identifying the land for acquisition and stated that  

it  is  suitable  for  the  purpose  of  industrial  

development.  Therefore,  the  principles  laid  down  at  

para 16 of  Sabhia Mohammed Yusuf Abdul Hamid Mulla's  

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case and the principles laid down in Viluben Jhalejar  Contractor’s case referred to supra  laid down the  criteria for determination of the market value of the  

acquired land. Also, in  Atma Singh’s case (supra) it  was stated that the criteria for the determination of  

the market value the potentiality of the acquired land  

should also be taken into consideration which has been  

explained stating that potentiality means capacity or  

possibility for changing or developing into a state of  

actuality. Further, the legal principles laid down in  

the case of Atma Singh (supra)at para 5 which portion  is  extracted  above,  gives  us  the  criteria  to  be  

followed for determination of the market value of a  

property keeping in view its existing condition with  

all  its  existing  advantages  and  its  potential  

possibility  when  let  out  in  its  most  advantageous  

manner.  The various criteria laid down in the above  

referred  case  namely,  the  existing  amenities  like  

water,  electricity,  possibility  of  their  further  

extension,  whether near about the acquired land, town  

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is  developing  or  has  prospect  of  development  in  

future, have to be taken into consideration by both  

the  Land  Acquisition  Collector  and  the  courts  for  

determination  of  the  market  value.  The  aforesaid  

advantages  are  very  much  abundantly  available  in  

respect  of  the  acquired  land  as  the  said  land  is  

within  the  proximity  of  New  Venkateshnagar  Layout,  

wherein residential sites are formed, and it is on  

record  and  there  is  a  school  and  college  near  the  

Highway.  Therefore, the principles laid down in the  

aforesaid  case  are  aptly  applicable  to  the  fact  

situation of the case in hand. Hence, we have to apply  

the aforesaid principles laid down in the cases of  

Atma Singh & Sabhia Mohammed Yusuf Abdul Hamid Mulla  (supra) to the case on hand.  

24. In view of the foregoing reasons, we are of the  

view that the findings of fact and reasons recorded by  

the learned Judge of the reference court in determining  

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the market value of the acquired land are well founded  

and  the  same  are  based  on  facts,  cogent  and  legal  

evidence adduced on record by the appellants.  The same  

has  been  rightly  accepted  by  the  learned  reference  

Judge after having noticed that the Land Acquisition  

Officer in a casual manner rejected the claim of the  

appellants  and  determined  the  meager  sum  of  Rs.  

50,000/- per hectare as the market value of the land  

which is unrealistic and contrary to the legal evidence  

on record and the law laid down by this Court in the  

cases referred to supra.  The findings of fact recorded  

by the reference Judge on the relevant issue has been  

erroneously  set  aside  by  the  High  Court  without  

assigning  valid  reasons.  The  findings  and  reasons  

recorded by the High Court in its judgment are contrary  

to  the  facts  and  legal  evidence  and  various  legal  

principles  laid  down  by  this  court  in  the  cases  

referred to supra. Therefore, we have to record our  

finding that reversing the judgment and award of the  

reference court is not only erroneous on facts but is  

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also erroneous in law. Accordingly, we answer the first  

point in favour of the appellants.

25. Since, we have answered the first point in favour  

of the appellants,  the second point is also answered  

in favour of the appellants and it would be just and  

proper for this Court to restore the judgment and award  

passed by the reference court.  Since we have affirmed  

the award of the reference court, having regard to the  

undisputed fact that this acquisition is of more than  

23 years, it would be just and proper for this Court to  

direct  the  respondent  No.3  –  M.I.D.C.  to  issue  the  

Demand Draft in favour of the landowners/appellants or  

their  legal  representatives  or  deposit  the  same  in  

their bank accounts within six weeks from the date of  

receipt  of  a  copy  of  this  judgment  and  submit  the  

compliance report before the reference court.  

26.  The appeal is allowed accordingly.  There shall be  

no order as to cost.  

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…………………………………………………………J  [G.S. SINGHVI]

…………………………………………………………J.     [V. GOPALA GOWDA]

New Delhi, August 1, 2013

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