REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No.6057 OF 2012

Mallappa Dead by L.Rs. & Ors.        ….Appellant(s)

VERSUS

The Special Land Acquisition Officer & Anr.        …Respondent(s)

WITH

CIVIL APPEAL No.1573 OF 2018

Arvind  & Ors.         ….Appellant(s)

VERSUS

The Special Land Acquisition Officer         …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

In Civil Appeal No.6057/2012

1. This appeal is directed against the final

order/judgment dated 12.10.2007 passed by the High

Court of Karnataka at Bangalore in M.F.A. No.594 of

2003 whereby the High Court allowed the appeal filed

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by the respondents herein and reduced the

compensation awarded to the appellants herein by

award dated 30.09.2002 passed by the Additional Civil

Judge (Sr. Division) Hubli in LAC No.58/87.

2. In order to appreciate the controversy involved in

this appeal, it is necessary to set out the facts of the

case hereinbelow.

3. The appellants are the claimants (landowners)

and the respondents are the  State  Authorities­non­

applicants in the land acquisition reference

proceedings out of which this appeal arises. The State

of  Karnataka in exercise  of  powers conferred  under

Section 28(1) of the Karnataka Industrial Areas

Development Act, 1966 (hereinafter referred to as “the

Act”) acquired the land measuring 24 acres 15 guntas

bearing Survey No. 44, Naruab Thimmasagar Village,

Hubli Taluk District Dharwad. The land was acquired

for Karnataka Industrial Areas  Development Board,

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Bangalore for a public purpose "expansion of existing

industrial estate in Tahsil Hubli".

4. The notification was accordingly issued under

Section 28(1) on 23/28.06.1980. It was published in

the official Gazette on 03.07.1980 (page 152  part III­

1). This notification was followed by issuance of

another notification on 27.05.1981 under Section 28

(4) of the Act. The appellants being the owners of the

land in question became entitled to claim

compensation for their land.

5. This led to initiation of the proceedings for

determination of the compensation payable to the

appellants  for their land under  the Act.  The Special

Land Acquisition Officer (respondent No. 1 herein) by

his award dated 27.10.1986 awarded compensation to

the appellants at the rate of Rs.5/­ per sq. meter = Rs.

500/­ per Gunta.  

6. The appellants (landowners) felt aggrieved and

prayed for making a reference to the Civil Court for re­

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determination of the rate of compensation. It was

accordingly  made.  By award dated 30.09.2002, the

Reference Court partly answered the reference in

appellants’ favour and enhanced the rate of

compensation at Rs.21,000/­ per Gunta.  

7. The appellants and the State Authorities both felt

aggrieved of the award of the Reference Court and filed

appeals in the High Court of Karnataka at Bangalore.

The appellants prayed for further enhancement in the

rate of compensation  whereas the State prayed for

reduction in the rate.  

8. By impugned judgment/order, the High Court

allowed the appeal filed by the State in part and

reduced the rate of compensation to Rs.10250/­ per

Gunta from Rs.21,000/­ per Gunta fixed by the

Reference Court. The High Court fixed the market rate

at Rs.14,500/­ per Gunta and deducting 30% towards

development charges fixed at Rs.10,250/­ per Gunta.

As a consequence, the appeal filed by the landowners

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was dismissed which has given rise to filing of this

appeal by way of special  leave by the landowners in

this Court.

9. The question,  which arises  for  consideration  in

this appeal, is whether the High Court was justified in

reducing the rate of  compensation  from Rs.21,000/­

per Gunta to Rs. 10,250/­ per Gunta.  

10. In other  words, the question,  which  arises for

consideration in this appeal, is whether the High Court

was justified in holding that the market value of the

land  in question was Rs.10,250/­ per Gunta on the

date of its acquisition.     

11. Having heard the learned counsel for the parties

and on perusal of the record of the case, we are

inclined to allow the appeal and while setting aside the

impugned order of the High Court restore the award of

the Reference Court/Civil Court with slight

modification as indicated infra.  

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12. It may be mentioned that the State had also filed

appeal by special leave in this Court against the

impugned order of the High Court wherein the

grievance of the State was that the High Court was not

justified in fixing the market rate at Rs. 10,250/­ per

Gunta. According to the State,  the rate should have

been determined at a much lower rate than

Rs.10,250/­ per  Gunta. This Court by order dated

04.11.2015 dismissed the appeal filed by the State and

affirmed the impugned order.

13. On perusal of the record, we find that the Special

Deputy Commissioner (LAO) while awarding

compensation recorded a finding that the acquired

land in question is suitable for construction  of the

buildings. It was also held that the land is situated in

the  midst of  well­developed area of the city and is

surrounded by several big factories,  industrial estate

and  the  housing  colonies. It  was  also  held that the

land is abutting the main road passing through Hubli.

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14. In addition, the appellants filed 10 sale deeds by

way of exemplars to prove the market value. These sale

deeds were executed from 1977 to 1982 in relation to

adjacent lands.  The value of the  land sold by  these

sale deeds varies from Rs.7250/­ per Gunta to

Rs.57,000/­ per  Gunta.  The  lands  involved  in  these

sale deeds are of smaller area.

15. As mentioned above, while appreciating the

aforementioned evidence, the Special Deputy

Commissioner determined the market rate of the land

in question at Rs.500/­ per Gunta whereas the

Reference Court fixed the compensation at the rate of

Rs.21,000/­ per Gunta. The High Court, however,

reduced it to Rs.10,250/­  per Gunta.

16. In our considered opinion, the market rate

determined by the reference Court at the rate of

Rs.21,000/­ per Gunta was the proper market rate of

the land in question and the same, therefore, should

have been upheld by the High Court. In other words,

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the High Court was not justified in reducing the rate

determined by the reference Court  from Rs.21,000/­

per Gunta to Rs.10,250/­ per Gunta and instead the

High Court should have upheld the rate fixed by the

Reference Court.

17. In our considered view, there is enough evidence

to  prove the  potentiality of the land in  question  as

would be clear from the findings of the Land

Acquisition Officer mentioned above. Apart from it, the

landowners have also proved the market value of the

land in question by filing 10 sale deeds wherein it is

established that price of the land situated in the

adjacent area has varied from Rs.7250/­ per Gunta to

Rs.57,000/­ per Gunta between 1977 till 1982.

18. Taking into consideration the aforementioned

factors, we are of the view that there was no justifiable

reason for the  High  Court to reduce the rate from

Rs.21,000/­ per Gunta to Rs.14,500/­ per Gunta and

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then deducting 30% towards development charges

fixed at Rs. 10,250/­  per Gunta.  

19. In our opinion, having regard to the totality of the

facts and the circumstances emerging from the record

and keeping in view the evidence adduced by the

parties, we consider just and proper to fix Rs.21,000/­

per Gunta as the market value of the land in question

and  after  deducting   10%  towards the  development

charges fix the market price of the land in question at

Rs.18,900/­  per Gunta.

20. In other words, we hold and accordingly fix the

market value of the land in question at the rate of Rs.

18,900/­   per Gunta for payment of compensation to

the appellants for their land. The appellants are also

entitled  to get  other  statutory compensation payable

under the Act, which is now to be re­calculated on the

basis of the market rate fixed by this Court.  

21. The respondents   are accordingly directed to re­

calculate the compensation amount payable to the

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appellants in the light of the market rate fixed by this

Court, i.e.,  Rs.18,900/­ per Gunta and after making

proper verification pay to the appellants the total

compensation within 3 months.

22. In  view of the foregoing  discussion, the  appeal

succeeds and is accordingly allowed. Impugned order

is set aside.  

In Civil Appeal No.1573 of 2018

This appeal is directed against the final judgment

and order dated 17.07.2017 passed by the High Court

of Karnataka, Dharwad Bench in M.F.A. No.24071 of

2011 whereby the  High  Court  dismissed the  appeal

filed by the appellants herein and reduced the rate of

compensation to 10,250/­ per Gunta from

Rs.21,000/­ per Gunta on the grounds of parity which

was granted to the adjacent land in question in

S.No.44 in LAC No.58/1987.

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In view of the order passed above in C.A. No.6057

of 2012, this appeal is disposed of on the same terms.

                      ………...................................J.        [ABHAY MANOHAR SAPRE]

                                       …...……..................................J.

                         [INDU MALHOTRA]

New Delhi;  December 03, 2018

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