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  IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.   3982-3987 of  2011   

NIRMAL SINGH Etc. Etc.                ………APPELLANTS Vs.

STATE OF HARYANA THROUGH COLLECTOR    ………RESPONDENT WITH

C.A. Nos.7916-7918 of 2011, C.A. No. 10207 of 2011,

C.A. Nos. 7547-7549 of 2013, AND

C.A. Nos. 7707-7709 of 2013

J U D G M E N T

V. GOPALA GOWDA, J.           These groups of appeals have been filed against  

the  impugned  Judgment  and  order  dated  10.12.2010  

passed by the High Court of Punjab and Haryana at  

Chandigarh. Since the grievance and prayer of all  

the appellant-land owners are similar, namely, for  

enhancement  of  compensation  in  respect  of  their  

acquired  land  in  question,  for  the  sake  of  

convenience and brevity, we shall refer to the facts  

of C.A. No(s). 3982-3989 of 2011 which have been  

filed  against  the  Judgment  and  award  passed  in  

NON REPORTABLE

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R.F.A. Nos. 69 of 2007, 70 of 2007, 71 of 2007, 72  

of 2007, 288 of 2008, 289 of 2008. All these R.F.A.s  

were disposed of in terms of Judgment and award of  

even date passed in R.F.A. No. 4538 of 2006, whereby  

the High Court enhanced the compensation in respect  

of the acquired lands to Rs.9,00,000/- per acre from  

Rs.6,60,000/-  per  acre  as  was  determined  by  the  

Reference Court.

2.  The State of Haryana issued a notification dated  

22.08.2001 under Section 4 of the Land Acquisition  

Act, 1894 (in short ‘the Act’) for acquisition of  

45.3 acres of land owned by the appellants situated  

at  Pehowa,  District  Kurukshetra,  for  the  public  

purpose,  namely  for  construction  of  road,  

development and utilization of land for residential  

and  commercial  purposes.  At  the  time  of  proposed  

acquisition, the nature of the land was agricultural  

and  mostly  vacant.  Declaration  that  the  land  is  

required  for  a  public  purpose  was  made  vide  

notification  under  Section  6  of  the  Act  on  

25.01.2002.  The  Land  Acquisition  Collector  (for  

short ‘the Collector’) vide award dated 19.11.2003

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assessed the market value of the acquired land at  

the rate of Rs.6,00,000/- per acre.

3.   Being  unsatisfied  with  the  award  of  the  

Collector,  the  appellant-land  owners  filed  

objections claiming a market value of their land at  

Rs.60,00,000/-  per  acre.  The  Collector  made  a  

reference to the Addl. District Judge, Kurukshetra  

which is the Reference Court under Section 18 of the  

Act for determination of the correct market value of  

the acquired land. The learned Addl. District Judge  

vide his order dated 28.08.2006, on the basis of  

material evidence on record assessed the value at  

Rs.6,60,000/-  per  acre  besides  other  statutory  

benefits under Sections 23(1A), 23(2) and 28 of the  

Act.  

4.   Regular  First  Appeals  were  filed  by  the  

appellant-land owners as they were dissatisfied with  

the compensation awarded by the Reference Court and  

sought for further enhancement of compensation for  

the  acquired  land,  whereas  the  State  filed  the  

appeals praying for reduction of the compensation  

before  the  High  Court  of  Punjab  and  Haryana  at

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Chandigarh.    5.   After hearing the parties and going through the  

evidence on record, the High Court found that there  

was significant variation in the sale instances of  

lands located close to the acquired land as depicted  

in the sale deeds produced by the State as well as  

by  the  land  owners.  The  High  Court,  vide  its  

impugned  Judgment  and  award  dated  10.12.2010,  by  

applying a thumb rule, determined and enhanced the  

amount of compensation at Rs.9,00,000/- per acre.  

Hence, these appeals are filed by the land owners  

with prayer for further enhancement of compensation  

in respect of their acquired land by determining the  

correct market value.

6.  The learned counsel for the appellants contended  

that the market value of the acquired land has not  

been determined by the High Court based on the sale  

instances  duly  produced  and  exhibited  before  the  

Addl. District Judge. The High Court has erroneously  

held that the compensation cannot be awarded for a  

large scale of land on the basis of sale instances  

of small pieces of land. The learned counsel has

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further  contended  that  the  High  Court,  despite  

appreciating that the land pertaining to the sale  

deeds produced by the land owners are located just  

outside  the  boundary  of  the  acquired  land,  has  

failed to determine the correct market value of the  

acquired land based on the sale instances which are  

substantive  evidence  produced  in  justification  of  

the claim. The learned counsel for the appellants  

relied  on  the  case  of  Haridwar  Development  

Authority. v. Raghubir  Singh1 to  support  their  contention, wherein this Court has held thus:-

“7. The acquisition with which we  are  concerned  relates  to  a  comparatively small extent of village  land  measuring  about  38  bighas  of  compact  contiguous  land.  The  High  Court was of the view that the size  and  situation  did  not  warrant  any  belting and all lands deserved the  same  rate  of  compensation.  The  Authority has not placed any material  to  show  that  any  area  was  less  advantageously  situated.  Therefore  the  view  of  the  High  Court  that  compensation should be awarded at a  uniform  rate  does  not  call  for  interference. 9. The claimants do not dispute the  appropriateness  of  the  said  sale  transaction taken as the basis for  determination of compensation. Their  

1

(2010) 11  SCC 581

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grievance is that no deduction or cut  should  have  been  effected  in  the  price disclosed by the sale deed, for  arriving at the market value, in view  of the following factors: (i) that  the acquired lands were near to the  main  Bye-pass  Road  and  had  road  access on two sides; (ii) that many  residential houses had already come  up in the surrounding areas, and the  entire  area  was  already  fast  developing;  and  (iii)  that  the  acquired land had the potential to be  used an urban residential area.”

7.   On the other hand, the learned counsel for the  

State  contended  that  the  High  Court  after  

considering evidence and all relevant materials on  

record  has  already  enhanced  the  amount  of  

compensation payable to the land owners more than  

the  actual  value  of  land.  The  High  Court  

categorically  observed  that  there  is  a  lot  of  

variation in the consideration paid, as is depicted  

in the sale deeds produced by the State as well as  

by the land owners, though they are located close to  

the acquired land. The High Court observed that when  

on facts it is found that the land owners have not  

been  adequately  compensated,  the  courts  have  to  

apply a principle thumb rule. Thus, by applying the

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above principle the High Court has already enhanced  

the compensation from Rs.6,60,000/- to Rs.9,00,000/-  

per acre and hence, the same does not warrant any  

further enhancement. It is further contended by the  

learned counsel that the High Court did not make  

deductions  towards  developmental  charges,  but  

rightly  ignored  the  sale  instances  of  very  small  

pieces of land, upon which reliance was placed by  

the land owners as it had no co-relation with the  

market value of the agricultural land in that area.

8.   With  reference  to  the  above  rival  legal  

contentions, the following points would arise for  

consideration of this Court: i. What  should  be  the  appropriate  rate  of  

compensation  and  extent  of  deductions  towards  

developmental charges for the acquired land in  

question? ii. Whether the sale-consideration mentioned in the  

sale deeds of small pieces of land, which are  

situated  close  to  the  acquired  land  can  be  

considered for determination of the compensation  

in favour of land owners? iii. What award?

Since all the questions are interrelated, we are

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answering all of them simultaneously.

9.   We  have  carefully  considered  the  respective  

arguments  of  the  learned  counsel  for  both  the  

parties with reference to the material evidence on  

record with a view to examine as to whether the land  

owners are entitled for enhanced compensation on the  

basis of sale instances placed by the appellants on  

record  in  relation  to  the  small  bits  of  land  

situated near the acquired land. It has been proved  

on record that the acquired land is surrounded by  

hafed go-downs, marriage places, grain market and  

rice  shelters.  Undoubtedly,  the  acquired  land  is  

advantageously located in a prime locale, as it is  

close to commercial and residential establishments.  

Therefore,  the  acquired  land  has  attained  non  

agricultural potentiality. The said land also falls  

within the municipal limits of Pehowa, besides being  

bound by the river Saraswati.

10.  Further, it is on record that the land has been  

acquired by the State Government for the purpose of  

developing commercial, residential and urban estate,  

Pehowa. Since the acquired land is situated within

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the  developed  area  of  the  municipal  limits  of  

Pehowa,  there  is  no  doubt  that  it  has  acquired  

potential value to be utilised for both residential  

and commercial purposes in the future.

11.  With respect to the general principles that are  

to be followed for determining just and reasonable  

compensation to land owners for acquisition of their  

land, we refer to the case of Smt. Tribeni Devi and  

Ors. v.  Collector  of  Ranchi2; in  support  of  the  

same, wherein this Court held that:-

“4. The  general  principles  for  determining  compensation  have  been  set  out  in  Sections 23 and 24 of  the  Act.  The  compensation  payable  to  the  owner  of  the  land  is  the  market value which is determined by  reference  to  the  price  which  a  seller  might  reasonably  expect  to  obtain  from  a  willing  purchaser,  but as this may not be possible to  ascertain  with  any  amount  of  precision,  the  authority  charged  with the duty to award is bound to  make  an  estimate  judged  by  an  objective  standard.  The  land  acquired  has,  therefore,  to  be  valued not only with reference to  its  condition  at  the  time  of  the  declaration  under  Section 4 of  the  Act  but  its  potential  value  also  must  be  taken  into  account.  The  

2  (1972)1 SCC 480

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methods  into  account  inasmuch  as  the exact valuation is not always  possible as no two lands may be the  same  either  in  respect  of  the  situation  or  the  extent  or  the  potentially nor is it possible in  all cases to have reliable material  from  which  that  valuation  can  be  accurately determined.”

12.     A perusal of the record shows that there is  

significant variation in the consideration paid in  

the  array  of  sale  instances  submitted  by  the  

parties.  Moreover  the  consideration  paid  for  the  

sale  instances produced  by  the  appellants  are  in  

relation to small pieces of land which are near the  

acquired  land.  To  consider  these  small  pieces  of  

land as the basis for determining just compensation  

to be paid to the appellants for the acquired land  

as urged by the learned counsel for the appellants,  

we refer to the legal principles laid down by this  

Court after examining the relevant provisions of the  

Act in catena of cases. In Special Land Acquisition  

Officer and Anr. v. M.K. Rafiq Saheb  3 this Court  

held as under:-

3  (2011)7 SCC 714

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considered the entire case law and  has held that the Court, in the first  instance,  has  to  consider  whether  sales relating to smaller pieces of  lands are genuine and reliable and  whether  they  are  in  respect  of  comparable lands. In the event the  Court  finds  that  such  sales  are  genuine and reliable and the lands  have comparable features, sufficient  deduction should be made to arrive at  the  just  and  fair  market  value  of  large tracks of land. The time lag  for real development and the waiting  period  for  development  are  also  relevant  consideration  for  determination  of  just  and  adequate  compensation. Each case depends upon  its  own  facts.  For  deduction  of  development  charges,  the  nature  of  the  development,  conditions  and  nature of the land, the land required  to be set apart under the building  rules  for  roads,  sewerage,  electricity,  parks,  water  etc,  and  all  other  relevant  circumstances  involved are to be considered.”

(Emphasis laid by this Court) A similar opinion was held in Bhagwathula Samanna  

and  others v. Special  Tahsildar  and  Land  

Acquisition Officer, Visakhapatnam Municipality 5,  

wherein this Court held as under:-

“7. …. In fixing the market value of  a large property on the basis of a  sale  transaction  for  smaller  property,  generally  a  deduction  is  given  taking  into  consideration  the  

5  (1991)4 SCC 506

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expenses required for development of  the  larger  tract  to  make  smaller  plots within that area in order to  compare  with  the  small  plots  dealt  with under the sale transaction. 13.  The proposition that large area  of land cannot possibly fetch a price  at the same rate at which small plots  are sold is not absolute proposition  and in given circumstances it would  be permissible to take into account  the price fetched by the small plots  of land…..”           (Emphasis laid by this Court)

13.  Further, this Court has discussed the basis on  

which deductions on the market value should be made  

for the development of land, keeping in mind various  

factors that influence it. In the case of  Viluben  

Jhalejar  Contractor  v. State  of  Gujarat6,  wherein  

this Court held thus:-   “20.  The  amount  of  compensation  cannot  be  ascertained  with  mathematical  accuracy.  A  comparable  instance has to be identified having  regard  to  the  proximity  from  time  angle  as  well  as  proximity  from  situation angle. For determining the  market  value  of  the  land  under  acquisition, suitable adjustment has  to be made having regard to various  positive and negative factors vis-à- vis  the  land  under  acquisition  by  placing the two in juxtaposition. The  positive and negative factors are as  under:

6  (2005)4 SCC 789

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Positive factors Negative factors 1. smallness of size largeness of area

2. proximity to a road situation  in  the  interior  at  a  distance  from  the  road

3. frontage on a road narrow strip of land with  very  small  frontage  compared to depth

4. nearness to developed area lower  level  requiring  the  depressed  portion  to  be  filled up

5. regular shape remoteness  from  developed  locality

6. level vis-à-vis land under  acquisition

some  special  disadvantageous  factors  which  would  deter  a  purchaser

7. special value for an owner  of an adjoining property to  whom it may have some very  special advantage

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21.  Whereas  a  smaller  plot  may  be  within  the  reach  of  many,  a  large  block  of  land  will  have  to  be  developed  preparing  a  layout  plan,  carving  out  roads,  leaving  open  spaces,  plotting  out  smaller  plots,  waiting for purchasers and the hazards  of an entrepreneur. Such development  charges may range between 20% and 50%  of the total price.”

Thus, when it comes to deductions for development of  

land, it can sway back and forth and can only be  

determined after carefully considering factors such  

as size of land, nearness to developed area, etc. as  

discussed in the above case.

14.   Keeping in mind the guidelines laid down by  

this Court in the catena of cases referred to supra,  

we  are  of  the  opinion  to  determine  just  and  

reasonable compensation for the acquired land on the  

basis  of  the  sale  instances  as  submitted  by  the  

appellants  by  taking  the  average  of  the  sale  

considerations mentioned therein that are relevant  

to the date of issue of Notification under Section 4

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of the Act. However, the same is to be determined  

keeping in mind that developmental costs are higher  

for  larger  areas  of  land  as  compared  to  small  

portions of land. The rate of compensation must be  

subject to deductions towards developmental purpose  

that will have to be incurred by the respondent-

State.

15.   Sale instances in relation to small pieces of  

land  situated  near  the  acquired  land  can  be  

considered, subject to (i) reasonable deductions for  

developmental  costs  that  will  be  incurred  in  the  

future as per the cases referred to supra and (ii)  

the evidence that these lands can be compared to the  

acquired  land  in  terms  of  its  vicinity  and  the  

comparable benefits and advantages.

Before we determine the extent of deductions  

to be allowed on the market value of the acquired  

land, we must take note of the following details;  

firstly, the acquired land is mostly agricultural in  

nature  and  vacant  at  the  moment;  secondly,  the  

determination of the market value of the acquired  

land  based  on  the  sale  instances  in  relation  to

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small pieces of land situated near the acquired land  

as produced by the land owners; thirdly, the well  

settled principle by this Court in a catena of cases  

that  larger  portions  of  land  incur  higher  

developmental costs compared to smaller portions of  

land. Therefore, we are of the opinion based on the  

facts and circumstances of the cases on hand and  

keeping in mind the legal principles laid down in  

the cases referred to supra, to allow 60% deduction  

on the market value of the acquired land towards  

developmental expenses.   

  The following table depicts the relevant sale  

deeds as per the date of notification under Section  

4 of the Act that are produced as evidence by the  

land  owners,  followed  by  the  deduction  towards  

developmental expenses and the value per acre of the  

acquired land:

Ex. Date Area sold Value  Per  acre(Rs.)

P4 17.5.2001 200 sq. yards 48,40,000

P12 20.6.2001 95 sq. yards 33,88,000

P13 11.1.2001 5.37 marlas 24,13,407

P14 11.1.2001 80 sq. yards 24,20,000

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Average market value per acre 32,65,351 Deductions for developmental  expenses

60%  

VALUE PER ACRE 13,06,140

16.   However,  having  regard  the  fact  that  the  

acquired land have got non-agricultural potentiality  

as the same being in close proximity to the already  

developed commercial and residential areas, within  

the municipal limits of Pehowa & and the significant  

variation in the sale considerations of small pieces  

of land situated in the proximity of the acquired  

land,  we  are  of  the  view  to  award  a  just  and  

reasonable compensation in respect of the acquired  

land  at  Rs.12,00,000/-  per  acre.   It  is  the  

contention  of  the  appellants  that  the  lands  

described in Ex. P4, P12, P13 and P14 are comparable  

to  the  acquired  land  with  respect  to  their  

potentiality,  location  and  conditions,  but  on  

perusal of the evidence on record, we are of the  

view that the said contention may be correct to some  

extent, but the exact location of the small pieces  

of  land  covered  in  the  sale  instances  is  not

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of  the  appellants  by  way  of  demand  draft  after  

proper calculation made within eight weeks from the  

receipt of copy of this Judgment and Award. There  

shall be no order as to costs.

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

………………………………………………………J.                       [ADARSH KUMAR GOEL]

New Delhi,                               September 26, 2014

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ITEM NO.1A-For Judgment      COURT NO.13               SECTION IV                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS Civil Appeal  No(s).  3982-3987/2011 NIRMAL SINGH & ETC.ETC.                            Appellant(s)                                 VERSUS STATE OF HARYANA TR.COLLECTOR                      Respondent(s) WITH C.A. No. 7916-7918/2011  C.A. No. 10207/2011  C.A. No. 7547-7549/2013  C.A. No. 7707-7709/2013   Date : 26/09/2014 These appeals were called on for JUDGMENT today. For Appellant(s)    Ms. Jaspreet Gogia,Adv.                       

Mr. Vipin Gogia, Adv.  Mr. Brijendra Singh, Adv.  Mr. Sanjay Bansal, Adv.

                    Mr. Ajay Choudhary,Adv.  Mr. Sachin Jain, Adv.

                    Dr. Kailash Chand,Adv.  Mr. Dinesh Verma, Adv.  Mr. Rajat Sharma, Adv.

                    Mr. Subhasish Bhowmick,Adv. For Respondent(s)                      Ms. Anubha Agrawal,Adv.                      

Hon'ble  Mr.  Justice  V.Gopala  Gowda  pronounced  the  judgment of the Bench comprising His Lordship and Hon'ble Mr.  Justice Adarsh Kumar Goel.

The appeals are allowed in terms of the signed order.       (VINOD KUMAR)    (MALA KUMARI SHARMA)

COURT MASTER COURT MASTER (Signed Non-Reportable judgment is placed on the file)