SPL.LAND ACQUISITION OFFICER Vs M.K.RAFIQ SAHEB
Bench: ASOK KUMAR GANGULY,SWATANTER KUMAR, , ,
Case number: C.A. No.-001086-001086 / 2006
Diary number: 22786 / 2004
Advocates: ANIL KATIYAR Vs
REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1086 OF 2006
Special Land Acquisition Officer & Anr. ..Appellant(s)
- Versus -
M.K. Rafiq Saheb ..Respondent(s)
J U D G M E N T
GANGULY, J.
1. The issue involved in the present case is
whether the quantum of compensation awarded by the
High Court in a land acquisition dispute is
excessive or not.
2. A notification was published under section 4(1)
of the Land Acquisition Act, 1894 (hereinafter
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referred to as ‘the Act’) on 17.7.1994 for the
acquisition of the respondents land measuring 34
guntas in Sy. No. 6/2 of Binnamangala Mahavartha
Kaval, K.R. Puram, Bangalore South Taluk.
3. The Special Land Acquisition Officer
(hereinafter referred to as ‘SLAO’) passed an award
on 26.9.1995 granting compensation at Rs.1,30,000/-
per acre along with statutory benefits. The SLAO
concluded that the lands were agricultural and no
sale transactions relating to the same were
available. Sale transactions were available in
respect of non-agricultural lands but they could
not be adopted for determining the valuation of
agricultural land. Therefore, the SLAO chose to
rely on acquisition proceedings in respect of lands
in the vicinity for determining land value.
Accordingly, it was found that in the neighbouring
villages of Benniganahalli, B. Narayanapura and
Kaggadasapura villages, land had been acquired in
favour of DRDO complex where the government had
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approved awards fixing land value at Rs.1,30,000/-.
The said valuation was thus adopted by the SLAO in
the instant case.
4. Possession of the land was taken on 11.4.1996.
5. Dissatisfied by the award of the SLAO, the
respondent filed a reference under section 18 of
the Act for enhancement of compensation.
6. The Reference Court, vide judgment dated
28.5.1999, enhanced compensation to Rs.4,00,000/-
per acre and also awarded statutory benefits. The
Reference Court concluded that based on the
evidence on record, it could not be said that the
land in question was agricultural land for all
practical purposes since it was situated by the
side of a residential locality and was in the midst
of a highly developed industrial locality. Thus, it
held that though the land remained agricultural
land on the records, it was not an agricultural
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land for all practical purposes and no agricultural
activities could be carried out on it. The Court
did not rely upon sale deeds Exhibit P3, P4, P5,
P6, P7 and P8. Exhibit P7 and P8 were not relied
upon as the parties to the transaction had not been
examined. Ex. P3 and P4 were corner sites, were not
within vicinity of the acquired land and were sold
in a public auction, and thus also held not
reliable. The respondent had also produced Ex. P9,
which was a gazette notification dated 20.1.1997
issued by the Revenue Secretariat, fixing the
market value of the immovable property coming under
the jurisdiction of several Sub-Registrar’s office
situated in Bangalore, for the purpose of
collecting stamp duty. The Reference Court
discarded the same on the reasoning that the Court
did not know what was the basis of determination of
market value for the purpose of collecting stamp
duty in respect of immovable properties by the Sub
Registrar.
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7. Instead, the Reference Court proceeded to
determine the market value of land on the basis of
compensation awarded in the judgment and award
dated 13.8.1998 made by the Reference Court in
respect of land in the neighbouring villages of
Kaggadasapura and Mahadevapura, pursuant to the
preliminary notification dated 28.7.1988. In the
said villages, about 110 acres of land had been
acquired and market value was fixed at
Rs.2,48,000/- per acre. The difference between
dates of preliminary notifications in the abovesaid
villages and in the instant case was 5 years and 15
days. Accordingly, the Reference Court gave a 10%
enhancement for each year in respect of lands
acquired in and around Bangalore city, relying on
the judgment in J. Narayan v. Land Acquisition
Officer, (1980) 2 KLJ 441, by which land value came
to Rs.3,73,000/- per acre. However, the Reference
Court found that the land had more potentiality and
was situated in the midst of a heavy industrial
area and in the immediate vicinity of an already
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developed residential locality. It was also in the
vicinity of a road known as Old Madras road as well
as the road leading to the airport. Hence, the
Reference Court was of the opinion that the
respondent was entitled to a higher market value
than Rs.3,73,000/- per acre. Thus, the Reference
Court held that Rs.4,00,000/- per acre would be
reasonable and fair market value in the instant
case.
8. The respondent, still dissatisfied with the
compensation awarded, filed an appeal before the
High Court of Karnataka. The appellant also filed
cross-objections under Order 41, Rule 22 of CPC.
9. The High Court, by way of impugned judgment
dated 17.6.2004, enhanced the compensation to
Rs.35,17,470/- per acre and also awarded all other
statutory benefits.
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10. The High Court accepted the finding of the
Reference Court that the land in question was fit
to be utilized as a non-agricultural site as it was
fully supported by evidence on record. The High
Court agreed with the Reference Court that the land
had ceased to be agricultural land and was fit to
be used as a housing site or an industrial site.
11. The High Court then went onto determination of
quantum of compensation. It concurred with the
Reference Court in rejecting Ex. P7, P8 and P9,
stating that they could not be relied upon as they
related to transactions which had happened after
the issuance of the preliminary notification. Since
other sale transactions were available, which had
taken place within reasonable time prior to the
issuance of the section 4(1) notification, post-
dated sale transactions could not be considered.
The High Court also concurred in rejecting Ex. P3
and P4 on ground that these sale transactions
related to corner sites sold at a public auction.
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Corner sites fetched much more than other sites and
when sold at a public auction, the price depended
upon the whims and fancies of the bidders. Thus,
Ex. P3 and P4 could not be relied upon to determine
market value. Ex. P6 related to the sale of a site
with a building and thus it was not accepted. The
High Court was of the opinion that Ex. P5 could be
used to determine market value. Ex. P5 was a sale
deed dated 23.4.1993 of the market value of a site
measuring around 30’ X 40’ fixed at Rs.2,50,000/-,
which worked out to Rs.182/- per square feet. The
High Court also deducted 50% of the market value
shown in Ex. P5 towards developmental charges, and
market value of the acquired land was computed at
Rs.95/- per sq. ft.
12. Being aggrieved by the enhancement in
compensation granted by the High Court, the
appellant approached this court by filing this
appeal.
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13. The point that arises for consideration before
us is whether High Court has correctly enhanced
compensation? Two related questions have to be
answered to determine the same.
a. Whether the land is agricultural land or has
it ceased to be so?
b. Whether Ex. P5, which relates to sale instance
of a small piece of non-agricultural land, can
be used to determine the market value of land?
14. The appellant has challenged the finding of the
High Court that the land ceased to be agricultural
land. It contended that the land was agricultural
land, as was clearly seen from the records and no
conversion charges were paid to convert it into
non-agricultural land.
15. We reject this contention of the appellant.
That the land has ceased to be agricultural land
and is capable of being used as a residential or
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industrial site is a concurrent finding of fact by
both the Courts below and is amply supported by the
evidence on record. We uphold the same. The
appellant did not file any appeal impugning the
finding of the Reference Court that the land could
not be treated as agricultural land. Not having
done so, it is not open to the appellant to
question the finding of the High Court that the
land is not agricultural land.
16. Otherwise also, we are of the opinion that in
light of the fact that the land was situated by the
side of a residential locality and was in the midst
of a highly developed industrial locality, the
acquired land was capable of being used for non-
agricultural purposes and should be considered as
non-agricultural land in determination of
compensation. We find support in this reasoning
from the judgment of this court in Anjani Molu
Dessai v. State of Goa and Anr. reported in (2010)
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13 SCC 710. The relevant portion of the said
judgment is set out below:
“5. The High Court has also referred to the situation of the property and has noted that the acquired lands are in a village where all basic amenities like primary health centre, high school, post office were available within a distance of 500 meters. It can therefore be safely concluded that the acquired lands are not undeveloped rural land, but can be urbanisable land situated near a developed semi-urban village with access to all infrastructure facilities.”
17. We find that the High Court relied on Ex. P5 to
determine the market value of compensation. It
appears that the said sale instance relates to a
small residential site measuring 30’ X 43’ (125.309
sq. mts). The acquired land in question measures 34
guntas. The Reference Court rejected Ex. P5 in
determining market value of land since it found
that the land covered by Ex. P5 was at a distance
of 2 kms from the acquired land. We are of the
opinion that the Reference Court erred in rejecting
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Ex. P-5 in determining compensation for the
acquired land.
18. The judgment of the High Court is well reasoned
and well considered. We find no perversity in its
reasoning. The only issue is that Ex. P-5, which
was relied upon by the High Court, relates to a
small piece of land, whereas the acquisition is of
a larger piece of land. It is not an absolute rule
that when the acquired land is a large tract of
land, sale instances relating to smaller pieces of
land cannot be considered. There are certain
circumstances when sale deeds of small pieces of
land can be used to determine the value of acquired
land which is comparatively large in area, as can
be seen from the judicial pronouncements mentioned
hereunder.
19. It has been held in the case of Land
Acquisition Officer, Kammarapally Village,
Nizamabad District, Andhra Pradesh
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v. Nookala Rajamallu and Ors. reported in (2003) 12
SCC 334 that:
“6. Where large area is the subject-matter of acquisition, rate at which small plots are sold cannot be said to be a safe criterion. Reference in this context may be made to few decisions of this Court in Collector of Lakhimour v. Bhuban Chandra Dutta: AIR 1971 SC 2015, Prithvi Raj Taneja v. State of M.P. AIR 1977 SC 1560 and Kausalya Devi Bogra v. Land Acquisition Officer AIR 1984 SC 892.
7. It cannot, however, be laid down as an absolute proposition that the rates fixed for the small plots cannot be the basis for fixation of the rate. For example, where there is no other material, it may in appropriate cases be open to the adjudicating Court to make comparison of the prices paid for small plots of land. However, in such cases necessary deductions/adjustments have to be made while determining the prices.”
20. In the case of Bhagwathula Samanna and Ors. v.
Special Tahsildar and Land Acquisition Officer,
reported in (1991) 4 SCC 506, it was held:
“13. The proposition that large area of land cannot possibly fetch a price at the
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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. If the larger tract of land because of advantageous position is capable of being used for the purpose for which the smaller plots are used and is also situated in a developed area with little or no requirement of further development, the principle of deduction of the value for purpose of comparison is not warranted...”
21. In Land Acquisition Officer, Revenue Divisional Officer, Chittoor v. Smt. L. Kamalamma (dead) by Lrs. and others, AIR 1998 SC 781, this Court held as under:-
“…when no sales of comparable land was available where large chunks of land had been sold, even land transactions in respect of smaller extent of land could be taken note of as indicating the price that it may fetch in respect of large tracts of land by making appropriate deductions such as for development of the land by providing enough space for roads, sewers, drains, expenses involved in formation of a lay out, lump sum payment as also the waiting period required for selling the sites that would be formed.”
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22. Further, it has also been held in the case of
Smt. Basavva and Ors. v. Special Land Acquisition
Officer and Ors , reported in AIR 1996 SC 3168, that
the court has to consider whether sales relating to
smaller pieces of land are genuine and reliable and
whether they are in respect of comparable lands. In
case the said requirements are met, sufficient
deduction should be made to arrive at a just and
fair market value of large tracks of land. Further,
the court stated that the time lag for real
development and the waiting period for development
were also relevant factors to be considered in
determining compensation. The court added that each
case depended upon its own facts. In the said case,
based on the particular facts and circumstances,
this court made a total deduction of 65% in
determination of compensation.
23. It may also be noticed that in the normal
course of events, it is hardly possible for a
claimant to produce sale instances of large tracks
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of land. The sale of land containing large tracks
are generally very far and few. Normally, the sale
instances would relate to small pieces of land.
This limitation of sale transaction cannot operate
to the disadvantage of the claimants. Thus, the
Court should look into sale instances of smaller
pieces of land while applying reasonable element of
deduction.
24. In the present case, the land acquired is 34
guntas and the notification under section 4 of the
Act was issued on 17.7.1994. We have already held
that for the purposes of determining compensation,
the acquired land should be considered to be non-
agricultural land. Ex. P-5 is a sale deed for sale
of a non-agricultural land dated 23.4.1993. The
land covered by the sale deed is about 2 kms. away
from the acquired land.
25. In contrast, the Reference Court relied upon
the compensation awarded for acquisition of land in
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the neighbouring villages, which had occurred 5
years prior to the present acquisition. We are of
the opinion that market value of the land acquired
in the present case is much better reflected by
exemplar Ex. P-5, which relates to sale of land
just 2 kms. away from the acquired land and is just
a little over a year before the issuance of the
section 4 notification in the present case. All
other sale deeds presented before this Court could
be relied upon and were rightly rejected by both
the Reference Court and the High Court for the
reasons given above.
26. Thus, we are of the opinion that the sale deed
Ex. P-5 was rightly relied upon by the High Court
in determining compensation.
27. The High Court made a 50% deduction since the
sale instance Ex. P-5 related to a smaller piece of
land. We are of the considered view that the said
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deduction should be increased to 60%, which we find
fair, just and reasonable in the circumstances.
28. Hence, the judgment of the High Court is
modified to the extent of the abovementioned
deduction. All other findings of the High Court are
sustained.
29. The appeal is thus dismissed with the aforesaid
modification.
30. No order as to costs.
.....................J. (ASOK KUMAR GANGULY)
.....................J. New Delhi (SWATANTER KUMAR) July 05, 2011
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