NATIONAL FERTILIZERS LTD. Vs JAGGA SINGH (D) TH:LRS .
Bench: CYRIAC JOSEPH,A.K. PATNAIK
Case number: C.A. No.-003033-003033 / 2008
Diary number: 22999 / 2005
Advocates: GHANSHYAM JOSHI Vs
AJAY CHOUDHARY
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 3033 OF 2008
National Fertilizers Ltd. … Appellant
Versus
Jagga Singh (Deceased) through L.Rs. & Anr. … Respondents
WITH
CIVIL APPEAL Nos. 3095 OF 2008, 3114 OF 2008, 3105 OF 2008, 3102 OF 2008, 3101 OF 2008, 3099 OF 2008, 3112 OF 2008, 3097 OF 2008, 3100 OF 2008, 3109 OF 2008, 3094 OF 2008, 3093 OF 2008, 3110 OF 2008, 3098 OF 2008, 3103 OF 2008, 3096 OF 2008, 3111 OF 2008, 3107 OF 2008, 3115 OF 2008, 3113 OF 2008, 3117 OF 2008, 3108 OF 2008, 3104 OF 2008
AND 3116 OF 2008
J U D G M E N T
A. K. PATNAIK, J.
These are the appeals by way of special leave against
the judgment and order dated 13.07.2005 of the Division
Bench of the Punjab and Haryana High Court, Chandigarh,
in Letters Patent Appeals determining the market value of
acquired land @ Rs.120/- per square yard (for short ‘the
impugned judgment’).
2. The facts relevant for deciding these appeals briefly are
that the National Fertilizers Limited (for short ‘the NFL’) is a
Government of India Undertaking engaged in the business
of manufacturing fertilizers and has a plant in Bhatinda in
the State of Punjab. To meet the requirement of dwelling
houses for the employees of NFL, the State of Punjab
acquired 29.68 acres of land in village Bhatinda by
notification dated 24.01.1983 issued under Section 4 of the
Land Acquisition Act, 1894 (for short ‘the Act’). The District
Collector sent the market rates to the Land Acquisition
Collector for different classes of agricultural or revenue land
and these were for Nehri – Rs.56,000/- per acre, for Barani
– Rs. 23,000/- per acre and for Gair Mumkin – Rs.23,000/-
per acre. The Land Acquisition Collector determined the
compensation at 50% above the rates sent by the District
Collector for each of the aforesaid classes of land in his
award dated 19.03.1986. Not satisfied with the award, the
landowners made a reference under Section 18 of the Act to
the civil court. Besides the State, NFL was impleaded as a
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defendant in the reference. By order dated 29.04.1991, the
learned Additional District Judge determined the
compensation for all the three classes of land at a uniform
rate of Rs.32.50 per square yard after considering two
unregistered sale agreements (Exhibits A-X and A-Y) and
the order of the High Court in Sadhu Singh’s case
determining the compensation for land acquired for
extension of the military cantonment in the year 1976. The
land owners challenged the order of the Additional District
Judge before the High Court in Regular First Appeals. The
State of Punjab and NFL also challenged the order of the
learned Additional District Judge before the High Court in
Regular First Appeals. The learned Single Judge of the High
Court, who heard the appeals, sustained the determination
of compensation made by the learned Additional District
Judge and dismissed the appeals by a common order dated
09.09.1994.
3. Aggrieved, the land owners as well as NFL challenged
the order dated 09.09.1994 of the learned Single Judge
before the Division Bench of the High Court in Letters
Patent Appeals. In the impugned judgment, the Division
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Bench of the High Court held that as Exhibits A-X and A-Y
were unregistered and did not bear any date, these
documents could not be considered for determination of
compensation. The Division Bench also found from the site
plan that the military cantonment for which Sadhu Singh’s
land was acquired was far away from the land acquired in
the present case. The Division Bench also found that the
land of Sadhu Singh was acquired for the military
cantonment in the year 1976 whereas the lands acquired in
the present case were included in the municipal limits of
Bhatinda city in 1977 and around the land acquired in the
present case, various colonies had come up in the
municipal limits of Bhatinda. The Division Bench further
found from the site plan that the land of Karam Singh which
had been acquired for a municipal park was much nearer to
the land of the land owners acquired in the present case.
The Division Bench, therefore, took the view in the
impugned judgment that the order passed by the High
Court in the case of Sadhu Singh for the land acquired for
military cantonment could not be preferred over the order of
the High Court passed in the case of Karam Singh for land
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acquired for municipal park in the year 1983 for making the
assessment of market value of the land acquired in the
present case and determined Rs.120/- per square yard as
just and reasonable market value for the land acquired in
the present case and adopted the reasoning given in the
order dated 08.11.1989 of the High Court (Exhibit A-15) in
the case of Karam Singh (RFA No.906 of 1988).
4. Learned counsel appearing for the appellant submitted
that the Division Bench of the High Court was not correct in
coming to the conclusion that the assessment of
compensation in Karam Singh’s case was more comparable
and relevant for making assessment of market value of the
land acquired in the present case. He submitted that in
Karam Singh’s case a very small area of land measuring
1058 sq. yards was acquired whereas in the present case a
much bigger area of acre 29.68 was acquired. He submitted
that in Karam Singh’s case the land was a developed land
located in the heart of the Bhatinda town, but in the present
case the acquired land was water-logged and used for
agricultural purpose and was away from the city. He
referred to the order of the High Court passed in Karam
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Singh’s case to show that the land acquired in that case had
a great potential value for being used for commercial and
residential purposes. He submitted that the land acquired
in Karam Singh’s case was at a distance of about 200
karmas from the scheme of Improvement Trust on the
Amrik Singh Road. He submitted that at a short distance
from the land acquired in Karam Singh’s case, towards the
city, there were shops of jewellers, iron furniture factory,
cinema hall as well as Sepal Hotel. He argued that these
facts made a big difference to the value of the land that was
acquired in Karam Singh’s case and that the assessment of
compensation in Karam Singh’s case was not at all relevant
to the assessment of compensation for the land acquired in
the present case.
5. Learned counsel for the appellant submitted that the
learned Additional District Judge and the learned Single
Judge have therefore rightly taken the view that the value of
the land acquired in the case of Karam Singh could not be
the basis for determining the compensation for the land
acquired in the present case. He submitted that the learned
Additional District Judge and the learned Single
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Judge of the High Court have in the present case taken the
average price of two sale transactions in Exhibits A-X and
A-Y as well as the market value of the land acquired in the
year 1976 in the case of Sadhu Singh and after adding an
increase of 12% per annum arrived at the value of the land
acquired in the present case in 1983 at Rs.32.50 per sq.
yard, which was just and reasonable.
6. Learned counsel for the appellant cited Chimanlal
Hargovinddas v. Special Land Acquisition Officer, Poona and
Another [(1988) 3 SCC 751] in which this Court has listed
the plus factors and minus factors which have to be taken
into consideration for determining the market value of land
in land acquisition cases. He submitted that in this
decision this Court has mentioned largeness of area of land
in the list of minus factors for determination of the market
value of the land. He also relied on Hasanali Khanbhai &
Sons and Others v. State of Gujarat [(1995) 5 SCC 422] in
which deduction to the extent of 60% of the value of land on
account of the large size of the land adopted by the High
Court was found to be justified. He also relied on K.
Vasundara Devi v. Revenue Divisional Officer (LAO) [(1995) 5
7
SCC 426] in which it was held that sufficient deduction
should be made to arrive at the just and fair market value of
large tracts of land, which were not developed. He also
relied on Kanta Devi and Others v. State of Haryana and
Another [(2008) 15 SCC 201] in which this Court made
deduction of 60% for meeting the expenditure towards
development charges.
7. Learned counsel for the respondent-land owners, on
the other hand, submitted that all the witnesses produced
by the land owners before the Additional District Judge
have testified to the fact that the acquired land is situated
on the National Highway leading from Bhatinda to
Ferozepur via Goniana and was within the municipal limits
of Bhatinda and was situated by the side of a metal road.
He submitted that the witnesses have also testified that the
acquired land was surrounded by many industrial concerns
and residential colonies, such as thermal plant, the plant of
NFL as well as colony of the employees of the two plants and
Sucha Singh Colony, Amar Singh Colony, Kheta Singh
Colony, Mandir Colony etc. He submitted that the
witnesses have also stated that the abadi of Bhatinda town
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has extended towards the land acquired in the present case
and three sides of the acquired land are already occupied
and on the fourth side is the metal road. He submitted that
the learned Additional District Judge has taken note of all
such evidence or the witnesses and has held that the land
acquired in the present case has the potentiality of urban
land and not of agricultural land.
8. Learned counsel for the respondent-landowners
submitted that the land acquired in the present case may be
at some distance from the land acquired in Karam Singh’s
case but this cannot be a ground for not treating the
acquired land in the present case as comparable with the
land acquired in Karam Singh’s case for the purpose of
determination of compensation. In support of his
submission he relied on Thakarsibhai Devjibhai and Others
v. Executive Engineer, Gujarat and Another [(2001) 9 SCC
584] in which this Court has held that if the quality,
including potentiality, of two areas of land is similar then
distance between the two would not by itself lead to a
change in their respective market values. He submitted
that it is not correct as has been submitted on behalf of the
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appellant that the acquired land was a low waterlogged
agricultural land and as per the evidence of RW-1, the
Patwari, Land Acquisition, Industries Department,
Government of Punjab, the level of the acquired land was
the same as that of the existing land of township of the NFL.
He submitted that the quality of the acquired land and the
quality of the land acquired in the case of Karam Singh were
therefore one and the same and the Division Bench of the
High Court has rightly held that the compensation
determined for the land acquired in the case of Karam Singh
should be the basis for determination of compensation of
the acquired land in the present case. He submitted that in
any case the value of the acquired land in Karam Singh’s
case was determined by the High Court under Ext.A-15 at
Rs.176/- per square yard and the Division Bench in the
impugned order has applied a cut and determined the
compensation for the land acquired in the present case at a
reduced rate of Rs.120/- per square yard and this was a
just and reasonable compensation awarded for the land
acquired in the present case.
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9. Learned counsel for the respondent-landowners next
submitted that the determination of compensation by the
learned Single Judge of the High Court in the present case
on the basis of land acquired in Sadhu Singh’s case was not
at all correct because the land acquired in the case of
Sadhu Singh was located in the cantonment area and the
acquisition was in 1976, whereas the Municipal Council of
Bhatinda was constituted only in 1977 and the land in the
present case was acquired in 1983 when the land was
within the municipal limits. He submitted that the
acquisition in Sadhu Singh’s case was made in 1976 more
than seven years before the acquisition in the present case
and therefore the value of land as determined in Sadhu
Singh’s case cannot be the basis for determination of
compensation in the present case. He cited General
Manager, Oil and Natural Gas Corporation Limited v.
Rameshbhai Jivanbhai Patel and Another [(2008) 14 SCC
745] in which this Court has held that sale transactions
which precede the subject acquisition by only a few years,
i.e. upto four to five years, can be relied upon but relying on
sale transactions beyond that would be unsafe, even if it
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relates to a neighbouring land. He submitted that in the
absence of any appropriate sale transaction of the year 1983
in respect of land in an around the acquired land in the
present case, the Division Bench rightly relied on the
judicial precedent in the case of Karam Singh and
determined the compensation at the rate of Rs.120/- per
square yard. He relied on Pal Singh and Others v. Union
Territory of Chandigarh [(1992) 4 SCC 400] wherein this
Court has observed that a judgment of a court in a land
acquisition case determining the market value of a land in
the vicinity of the acquired lands, even though not inter
partes, is admissible in evidence either as an instance or
one from which the market value of the acquired land could
be deduced or inferred. He submitted that Ext.A-15 which
was the order of the High Court in the case of Karam Singh
has therefore been rightly relied upon by the Division Bench
of the High Court in determining the compensation of
Rs.120/- per square yard for the land acquired in the
present case.
10. We have considered the submissions of the learned
counsel for the parties and we find that while the case of the
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appellant is that the learned Additional District Judge and
the learned Single Judge correctly determined the
compensation payable to the landowners for the land
acquired in the present case at the rate of Rs.32.50 per sq.
yard, the case of the respondent-landowners is that the
Division Bench of the High Court has correctly determined
the compensation in the impugned judgment at the rate of
Rs.120/- per sq. yard. Therefore, the question that we
have to decide in these appeals is whether the
compensation for the lands acquired as determined by the
Additional District Judge and as upheld by the order of the
learned Single Judge is a correct assessment of the market
value of the acquired land or the compensation as
determined by the Division Bench of the High Court in the
impugned judgment is a more accurate assessment of the
market value of the land acquired in present case.
11. We may first deal with the determination of the
compensation by the Additional District Judge as affirmed
by the learned Single Judge of the High Court in the Regular
First Appeals. The Additional District Judge has taken into
consideration two sale agreements (Exts. A-X and A-Y).
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Exhibit A-X is executed by one Satish Gupta agreeing to
transfer his plot of land measuring 400 sq. yards for
Rs.17,300/- to one Sham Singh and Exhibit A-Y is executed
by one Balram Shukla agreeing to transfer his plot of 400
sq. yards for Rs.17,000/- to Satnam Singh. The average
sale price in these two sale agreements comes to Rs.42.87
per sq. yard. The sale agreements are between the
employees of NFL, who were members of the NFL Employees
Co-operative Society. The Division Bench of the High Court
has held in the impugned judgment that these sale
agreements, which have no details with regard to the date of
execution and were not really sale deeds, could not have
been taken into consideration for determining the market
value of the acquired land. We have perused a copy of the
sale agreement between Balram Shukla and Satnam Singh,
which has been annexed in Civil Appeal No.3033 of 2008 as
Annexure P-13 and we find that the sale agreement does not
mention the date on which the agreement has been entered
into. In the absence of any date of the sale agreement, the
sale agreement could not have constituted the basis for
determination of the market value of land in 1983 when the
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land was acquired in the present case. The Division Bench
of the High Court, therefore, was right in taking the view
that Exhibits A-X and A-Y cannot constitute the basis for
determination of the market value of the acquired land in
the present case.
12. The learned Additional District Judge has also relied
on the order of the High Court determining compensation of
land acquired in the case of Sadhu Singh (RFA No.1207 of
1984). The land in the case of Sadhu Singh was acquired
within the revenue village of Bhatinda for extension of the
military cantonment by notification dated 29.10.1976 and
the High Court determined a rate of compensation of
Rs.17/- per sq. yard. The Additional District Judge has
given an increase of 12% per annum on this rate of Rs.17/-
per sq. yard from 29.10.1976 to 24.01.1983 to arrive at the
market value of the land as on 24.01.1983, i.e. the date of
notification under Section 4 of the Act in the present case.
The learned Single Judge of the High Court while sustaining
the order of the learned Additional Judge, has held that
although the exact location of the land is not given in Sadhu
Singh’s case, yet the same can be made the basis for
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determining the market value of the acquired land in the
present case as the land acquired in the Sadhu Singh’s case
was within municipal limits of Bhatinda. In our considered
opinion, the reliance on order of the High Court passed in
Sadhu Singh’s case by the learned Additional District Judge
and the learned Single Judge was not correct because from
the site plan it appears that the land in Sadhu Singh’s case
which was acquired for military cantonment was far away
from the land acquired in the present case which was
located adjacent to the colony of NFL and other colonies.
From the site plan, we also find that compared to the land
acquired in Sadhu Singh’s case, the land acquired in Karam
Singh’s case was much more nearer to the land acquired in
the present case.
13. The Division Bench of the High Court has thus relied
upon its order in the case of Karam Singh (RFA No.906 of
1988) passed on 08.11.1989 which was marked in the
reference proceedings as Ext. A-15. The land in the case of
Karam Singh was acquired for a municipal park by
notification issued under Section 4 of the Land Acquisition
Act on 30.08.1983 and is located within the municipal
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limits. In Karam Singh’s case there was evidence of three
transactions of sale of the same date i.e., 29.06.1973,
showing that some land in the area had been sold at the
rate of Rs.100/- per sq. yard, some land in the area had
been sold at Rs.70.30 paise per sq. yard and some land in
the area had been sold at the rate of Rs.62.50 per sq. yard
and the Court took the average rate of the three sale
transactions which worked out to Rs.80/- per sq. yard. The
Court then added an increase of 12% per annum for ten
years to arrive at the value of the land in the year 1983
when the land was acquired and the figure worked out at
Rs.176/- per sq. yard. For finding out the market value of
the land acquired in the present case, the Division Bench of
the High Court applied a cut to this rate of Rs.176/- per sq.
yard and determined the rate of Rs.120/- per sq. yard as
just and reasonable value of the land acquired in the
present case considering the location and potentiality of the
acquired land. The Division Bench has, therefore, taken
into consideration the fact that the land in Karam Singh’s
case was located in the heart of the Bhatinda town, whereas
the land acquired in the present case was slightly away from
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the heart of the town and was located adjacent to the
existing colony of the NFL and other colonies, namely, the
residential colonies of the thermal plant, Sucha Singh
Colony, Amar Singh Colony, Kheta Singh Colony, Mandir
Colony, etc. and reduced the market value of the land
acquired in the present case.
14. We may now consider whether any further cut to the
rate of Rs.120/- per sq. yard as determined by the Division
Bench of the High Court in the impugned judgment was
called for, considering the size and quality of the land
acquired in the present case. Regarding the size of the land,
the argument of learned counsel for the appellant is that the
size of the land acquired in the case of Karam Singh was .04
acres (1058 sq. yards), whereas the size of the land acquired
in the present case is acre 29.68 (143651 sq. yards). But on
a reading of the order dated 08.11.1989 of the High Court in
the case of Karam Singh (RFA No.906 of 1988) marked as
Annexure Ext.A-15, we find that the High Court has taken
into consideration three sale deeds of the same date to work
out the average rate of the land at Rs.80/- per sq. yard in
1973 and applied an increase of 12% per annum to arrive at
18
the figure of Rs.176/- per sq. yard, but has not mentioned
the size of the lands which were sold under the three sale
deeds. In the absence of the size of the plots of land which
were sold under the sale deeds, which were taken into
consideration by the High Court while determining the
market rate of the land in Karam Singh’s case, it is difficult
to accept the contention of the learned counsel for the
appellant that the determination of market value of the land
in Karam Singh’s case was in respect of land which was sold
was much smaller in size as compared to the land which
was acquired in the present case. Regarding quality of the
land acquired in the present case, learned counsel for the
appellant submitted that the land in Karam Singh’s case
was developed urban land meant for residential and
commercial purpose, whereas the land acquired in the
present case was low, water-logged agricultural land. We,
however, find from the evidence of Basant Singh Patwari,
Land Acquisition, Industries Department Punjab,
Chandigarh, examined as RW-1, that the level of the land,
which was acquired in the present case, was that of the
existing land of the township of NFL. The learned
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Additional District Judge in his order dated 29.04.1991 has
in fact held, after considering all the oral and documentary
evidence adduced by the parties, that the market value of
the land acquired in the present case has to be determined
on the basis of its potentiality for urban development and
not on the basis of the revenue or agricultural classification
of the land as done by the Collector because the land
acquired in the present case had a great potential value for
urban purposes, i.e. commercial, industrial and residential.
We, therefore, do not find any merit in the submission of
learned counsel for the appellant that a cut of 60% should
have been applied to the rate as determined in Karam
Singh’s case considering the larger size and lower quality of
the land acquired in the present case. In our opinion, the
cut applied by the Division Bench of the High Court in the
impugned judgment so as to reduce the value from
Rs.176/- per sq. yard to Rs.120/- per sq. yard was just and
reasonable in the facts of the present case.
15. In the result, we do not find any merit in these
appeals and we dismiss the same and award a cost of
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Rs.10,000/- in favour of the respondents in each of the
appeals.
.……………………….J. (Cyriac Joseph)
………………………..J. (A. K. Patnaik) New Delhi, November 15, 2011.
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