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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs.4843-4940   OF 2013 (Arising out of SLP(C) NOs.  17962-18059 of 2011)

Haryana State Industrial Development Corporation Limited    …Appellant

versus

Udal and others etc. etc.                …Respondents

WITH

CIVIL APPEAL NOs.4967-73   OF 2013 (Arising out of SLP(C) NOs. 18660-18666 of 2011)

CIVIL APPEAL NOs.4974-78  OF 2013 (Arising out of SLP(C) NOs. 24153-24157 of 2011)

CIVIL APPEAL NOs.4979-82  OF 2013 (Arising out of SLP(C) NOs.24158-24161 of 2011)

CIVIL APPEAL NO. 4983  OF 2013 (Arising out of SLP(C) NO. 21030 of 2011)

CIVIL APPEAL NO.4984   OF 2013 (Arising out of SLP(C) NO.34338 of 2011)

CIVIL APPEAL NO. 4985  OF 2013 (Arising out of SLP(C) NO. 33240 of 2011)

CIVIL APPEAL NO.4986  OF 2013 (Arising out of SLP(C) NO. 32853 of 2011)

CIVIL APPEAL NOs.4987-92  OF 2013 (Arising out of SLP(C) NOs. 4208-4213 of 2012)

CIVIL APPEAL NOs. 4993-95 OF 2013

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(Arising out of SLP(C) NOs. 33626-33628 of 2011)

CIVIL APPEAL NO.4996  OF 2013 (Arising out of SLP(C) NO. 12103 of 2012)

CIVIL APPEAL NO. 4997  OF 2013 (Arising out of SLP(C) NO. 12104 of 2012)

CIVIL APPEAL NO. 4998   OF 2013 (Arising out of SLP(C) NO. 32826 of 2011)

CIVIL APPEAL NO. 4999  OF 2013 (Arising out of SLP(C) NO. 32827 of 2011)

CIVIL APPEAL NO.5000  OF 2013 (Arising out of SLP(C) NO. 33587 of 2011)

CIVIL APPEAL NO. 5001 OF 2013 (Arising out of SLP(C) NO. 33589 of 2011)

CIVIL APPEAL NO.5002  OF 2013 (Arising out of SLP(C) NO. 33591 of 2011)

CIVIL APPEAL NO. 5003  OF 2013 (Arising out of SLP(C) NO. 33592 of 2011)

CIVIL APPEAL NO.5004 OF 2013 (Arising out of SLP(C) NO. 33593 of 2011)

CIVIL APPEAL NO.5005  OF 2013 (Arising out of SLP(C) NO. 33594 of 2011)

CIVIL APPEAL NO.5006 OF 2013 (Arising out of SLP(C) NO. 33600 of 2011)

CIVIL APPEAL NOs.5007-17  OF 2013 (Arising out of SLP(C) NOs. 4149-4159 of 2012)

CIVIL APPEAL NO.5018  OF 2013 (Arising out of SLP(C) NO. 4325 of 2012)

CIVIL APPEAL NOs. 5019-30  OF 2013 (Arising out of SLP(C) NOs. 17422-17433 of 2012)

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CIVIL APPEAL NO. 5031  OF 2013 (Arising out of SLP(C) NO. 15794 of 2012)

CIVIL APPEAL NOs.5032-33  OF 2013 (Arising out of SLP(C) NO. 24678-24679 of 2012)

CIVIL APPEAL NOs.5034-39   OF 2013 (Arising out of SLP(C) NO. 29009-29014 of 2012)

CIVIL APPEAL NO. 5040  OF 2013 (Arising out of SLP(C) NO. 29015 of 2012)

CIVIL APPEAL NO. 5041  OF 2013 (Arising out of SLP(C) NO. 29020 of 2012)

CIVIL APPEAL NOs.5042-43   OF 2013 (Arising out of SLP(C) NOs. 29021-29022 of 2012)

CIVIL APPEAL NOs.5044-71  OF 2013 (Arising out of SLP(C) NOs. 34068-34095 of 2012)

J U D G M E N T

G. S. Singhvi, J.

1. Leave granted.

2. Feeling  aggrieved/dissatisfied  with  the  judgment  of  the  learned  

Single Judge of the Punjab and Haryana High Court whereby he enhanced  

the amount of compensation payable to the landowners from Rs.28,15,356  

per  acre  to  Rs.37,40,000  per  acre,  the  beneficiary  of  the  acquisition,  

namely, Haryana State Industrial Development Corporation Limited, now  

known  as  Haryana  State  Industrial  and  Infrastructure  Development  

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Corporation (HSIIDC), and the landowners have filed these appeals.

3. In  furtherance  of  the  policy  decision  taken  by  it  to  establish  

Industrial Model  Township at  Manesar  (hereinafter  described as  ‘IMT  

Manesar’), District Gurgaon, the Government of Haryana acquired large  

tracts of land under the Land Acquisition Act, 1894 (for short, ‘the Act’).  

For Phase-I of IMT, Manesar, over 700 acres of land was acquired. By  

notification dated 30.04.1994 issued under Section 4 of the Act,  which  

was followed by declaration dated 30.09.1995 issued under Section 6, 256  

acres 3 kanals and 17 marlas land of village Manesar was acquired.  By  

another notification dated 15.11.1994 issued under Section 4 of the Act,  

which was followed by Section 6 declaration dated 10.11.1995, 490 acres  

3 kanals 17 marlas land situated in villages Manesar,  Naharpur Kasan,  

Khoh and Kasan was acquired.

4. For Phase-II, 1380 kanals 16 marlas land situated  in villages Kasan,  

Bas Kusla, Naharpur Kasan and Manesar was acquired vide notification  

dated 6.3.2002 issued under Section 4 of the Act which was followed by  

Section 6 declaration dated 15.11.2002.  Another notification was issued  

on 7.3.2002 under Section 4 of the Act for the acquisition of 595 acres 5  

kanals 12 marlas land situated in villages Kasan, Bas Kusla, Bas Haria and  

Dhana for Phase-III of IMT, Manesar.  The declaration under Section 6  

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was issued on 25.11.2002.

5. For Phase-IV,  567 acres 4 kanals 3 marlas land was acquired vide  

notification dated 26.2.2002 issued under Section 4 of the Act and for  

Phase-V, 965 acres 5 kanals 18 marlas land was acquired vide notification  

dated 17.9.2004 issued  under Section 4 of the Act.

6. Since the issue arising in these appeals relates to the quantum of  

compensation payable in lieu of the acquisitions made for Phases-II and III  

of IMT, Manesar, we do not consider it necessary to take cognizance of  

the facts relating to other acquisitions but would make a reference to the  

events leading to the judgment of this Court in Haryana State Industrial  

Development Corporation v. Pran Sukh and others (2010) 11 SCC 175,  

and the orders passed in the review applications filed by HSIIDC.

7. For the acquisition made vide notification dated 30.4.1994, the Land  

Acquisition Collector  passed  award  dated  28.3.1997  whereby he fixed  

market value of the acquired land at the rate of Rs.3,67,400 per acre. On  

a reference made at the instance of the landowners, the Reference Court  

divided the acquired land into two blocks, i.e.,  A and B.  For the land  

falling in Block A, i.e., land situated 500 yards from National Highway 8,  

the  Reference  Court  determined  the  compensation  at  the  rate  of  

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Rs.6,51,994.13 per acre.  For the remaining land categorized as Block B,  

market value was fixed at the rate of Rs.3,91,196.97 per acre.  

8. For the acquisition made vide notification dated  15.11.1994,  the  

Land Acquisition Collector passed award dated 3.4.1997 and fixed market  

value at  the rate  of Rs.4,13,600 per acre.   The Reference Court  fixed  

market value of the acquired land by dividing the same into two blocks.  

Block  A  comprised  of  the  land  falling within  500  yards  of  National  

Highway 8  and  market  value  thereof  was  fixed at  Rs.6,89,333.   The  

remaining land was included in Block B and market value thereof was not  

increased.

9. The  appeals  filed  by  the  landowners  in  relation  to  the  first  

acquisition were disposed of by the learned Single Judge of the Punjab and  

Haryana High Court  vide judgment dated  5.9.2008 and the amount of  

compensation was determined at the rate of Rs.12,00,000 per acre.  The  

appeals filed by the landowners covered by notification dated 15.11.1994  

were disposed of by the learned Single Judge by enhancing the amount of  

compensation  to Rs.15,00,000 per acre for the entire acquired land.

10. The  appeals  arising  out  of  the  special  leave  petitions  filed  by  

HSIIDC and the landowners against the judgments of the High Court were  

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disposed of by this Court vide judgment dated 17.08.2010 titled Haryana  

State Industrial Development Corporation vs. Pran Sukh and others (supra)  

and the amount of compensation payable to the landowners was enhanced  

to Rs.20,00,000 per acre for the entire acquired land with a stipulation that  

they shall be entitled to all statutory benefits.  Paragraphs 22 to 26 of that  

judgment, which contain the reasons for granting enhanced compensation  

to the landowners, are reproduced below:

“22. In our view, the learned Single Judge did not commit  any error by relying upon sale transaction, Ext. P-1 for the  purpose of fixing market value of the acquired land. Un- disputedly, that sale transaction was between two corpor- ate entities and the entire sale price was paid through bank  drafts. It is also not in dispute that the land which was  subject-matter of Ext. P-1 is situated at Village Naharpur  Kasan and is adjacent to the acquired land. The Corpora- tion and the State Government did not adduce any evid- ence to prove that the land sold vide Ext. P-1 was overval- ued with an oblique motive of helping the landowners to  claim higher compensation. Therefore, we do not find any  justification to discard or ignore sale deed, Ext. P-1. The  refusal of the learned Single Judge to rely upon other sale  transactions in which sale price of the land was shown as  Rs. 7 lakhs per acre also does not suffer from any legal in- firmity  because  it  is  well  known  that  transactions  in- volving transfer of properties are usually undervalued with  a view to avoid payment of the requisite stamp duty and  registration charges.

23. However, we agree with the learned counsel for the  landowners that the High Court should not have imposed  cut of 1/4th in one batch of appeals and 20% cut in the  other batch of appeals qua the average sale price reflected  by Ext. P-1 only on the ground that the area of the land  acquired by the State Government was too large as com- pared to 12 acres of land for which sale deed, Ext. P-1  was executed.

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24. In a matter like the present one, it cannot be ignored  that  the  land was  acquired  for  setting up an  industrial  model township at Manesar and after developing the land,  the Corporation was  bound to sell the plots  at  a  much  higher price to the existing or prospective industrial entre- preneurs. In this scenario, the learned Single Judges com- mitted an error by applying 1/4th or 20% cut on market  value determined for the purpose of payment of compens- ation to the landowners.

25. This  approach  is  in  consonance  with  the  law  laid  down in  Subh Ram v.  State of Haryana (2010) 1 SCC  444, the relevant portions of which are extracted below:  

“16. Therefore, when deduction is made from the value  of  a  small residential  plot  towards  the  development  cost, to arrive at the value of a large tract of agricul- tural or undeveloped land with development potential,  the deduction has nothing to do with the purpose for  which the land is acquired. The deduction is with refer- ence to the price of the small residential plot, to work  back the value of the large tract of undeveloped land.  On the other hand, where the value of acquired agricul- tural land is determined with reference to the sale price  of a neighbouring agricultural land, no deduction need  be made towards ‘development cost’.

17. It is no doubt true that this Court in some decisions  has observed that purpose of acquisition will also be  relevant.  But  it  is  made  in a  different  context.  The  Land Acquisition Collectors in some cases adopt belt- ing methods for valuation of land, with reference to a  focal point, that is, either with reference to the distance  from the main road, or distance from a developed area.  Lands that adjoin a developed area or a main road are  given a higher value than a land farther away from the  road or the developed area. The Land Acquisition Col- lectors  also award different compensation depending  upon whether the acquired land is a dry land or wet/ir- rigated land.

18. When different categories of lands (or lands with  different situational advantages)  are  acquired for the  

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same purpose, say for forming of a residential layout,  courts have sometimes felt that determination of their  value  with  reference  to  previous  status  or  situation  should be avoided and a uniform rate of compensation  should be  awarded  for  all  lands  acquired  under  the  same notification.

26. For the reasons stated above, the appeals filed by the  Corporation are dismissed and those filed by the landown- ers  are  allowed with the direction that  the Corporation  shall pay market value of the entire acquired land at the  rate of Rs. 20 lakhs per acre with all statutory benefits.”

11. The  first  batch  of  the  review  petitions  filed  by  HSIIDC  was  

dismissed by detailed order dated 2.7.2012 titled Haryana State Industrial  

Development Corporation Limited v. Mawasi (2012) 7 SCC 200.  The  

second  batch  of  the  review  petitions  was  dismissed  vide  order  dated  

13.1.2011  titled  Haryana  State  Industrial  Development  Corporation  

Limited v. Pran Sukh and others (2012) 7 SCC 721.  While dismissing the  

first batch of review petitions, the Court took cognizance of the following  

averments  contained  in  the  reply  affidavits  filed  on  behalf  of  the  

landowners:   

Paras 4 to 9 of the reply affidavit filed in Review Petition No. 239  of 2011.

“4. I state that vide five sale deeds all dated 6-7-1992 land  measuring 49  kanals  2  marlas  situated  in  Village  Kherka  Daula, District Gurgaon was sold by some of the co-owners  to one Shri D.C. Rastogi, s/o Shri L.P. Rastogi at the sale  price of Rs 1,35,000 per acre. The said village is at a distance  of about 2 km from the land in question. Copies of five sale  deeds  all  dated  6-7-1992  are  collectively  Annexure  R-1  hereto. Thereafter the vendee Shri D.C. Rastogi sold the said  

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land in terms of agreement to sell dated 6-12-1993 vide sale  deed dated 16-3-1994 at the rate of about Rs 15,73,289 per  acre. This shows that there was a jump in the price of the  land in that  area  equal  to  almost  11  times of  the original  price. It is also common knowledge that the parties often un- dervalue the land price in order to minimise stamp duty and  the land might have been sold at a higher price. Copy of sale  deed dated 16-3-1994 is Annexure R-2 hereto. Thus if M/s  Heritage Furniture (P) Ltd. purchased land, which is the sub- ject-matter of sale  deed dated  16-9-1994,  Ext.  P-1,  in the  year 1993 at a price of about Rs 6 lakhs per acre as alleged  by the review petitioner even though there is no evidence of  purchase at such rate then its value increasing to Rs 20 lakhs  per acre in the year 1994 is commensurate with the market  trend. Moreover agreement to sell dated 31-5-1994 was ex- ecuted after first notification was issued under Section 4 on  30-4-1994 and it is a common knowledge that after publica- tion of Section 4 notification, the value of the land increases.

5. It is further submitted that vide sale deed dated 14-12- 1993 (Ext. P-10) one M/s DCN International Ltd. sold land  measuring 62 kanals 7 marlas situated in Village Naurangpur,  District  Gurgaon  for  Rs  95,21,160  i.e.  at  the  rate  of  Rs  13,74,345 per acre. Copy of sale deed dated 14-12-1993 is  Annexure R-3 hereto.

6. I further state that sale deed dated 16-9-1994 (Ext. P-1)  was executed pursuant to the agreement to sell dated 31-5- 1994 between M/s Heritage Furniture (P) Ltd. (vendor) and  M/s Duracell (India) (P) Ltd. (vendee) wherein the vendor  agreed to sell the land in question measuring about 12 acres  to the vendee at a sale price of Rs 2,42,00,000 (Rupees two  crore forty-two lakhs only) as is clear from the recital in the  sale deed itself. Ultimately vide sale deed dated 16-9-1994  the said land was sold at the same sale price by the vendor to  the vendee. Thus the sale price of the land was agreed upon  and fixed on 31-5-1994 as is clear from the recitation of the  sale deed itself.

7. I further state that as per assertion of the review petitioner  M/s Heritage Furniture (P) Ltd. (vendor) and M/s Duracell  (India) (P) Ltd. (vendee) had common persons in their Board  of Directors, namely, Shri Saroj Kumar Poddar, Ms Jyotsana  

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Poddar and Shri Gurbunder Singh Gill. The review petitioner  has filed search reports of both the said companies to show  that the abovesaid three persons were common Directors of  both the companies. However, from the said search report of  M/s Duracell (India) (P) Ltd. it is clear that the two Direct- ors, namely, Shri Saroj Kumar Poddar and Ms Jyotsana Pod- dar were appointed as Directors of this company on 9-6-1994  whereas Shri Gurbunder Singh Gill was appointed as its Dir- ector on 9-2-1997. Thus all the three alleged common Direct- ors  of the vendor and vendee companies were  not on the  Board of Directors of M/s Duracell (India) (P) Ltd. on or be- fore 31-5-1994 on which date the agreement to sell the land  in question was executed and the sale price was fixed. The  said three Directors had no interest in M/s Duracell (India)  (P) Ltd. (vendee) as on 31-5-1994 when the sale price of the  land was fixed.

8. I further state that except for making a bald allegation that  the sale price of the said land was inflated intentionally so  that the vendee company would increase its share holding in  a joint venture it was going to enter into with one Duracell  Inc. USA, this assertion has not been substantiated by placing  any cogent evidence on record. So much so that even it has  not been pleaded in the review petition as to whether joint  venture between M/s Duracell (India) (P) Ltd. and M/s Dura- cell Inc. USA did take place or not. To the knowledge of the  deponent there was no joint venture between M/s Duracell  (India) (P) Ltd. and M/s Duracell Inc. USA. This fact that  there was no joint venture between the said two companies  also stands proved from the fact that the land purchased vide  the said sale deed dated 16-9-1994 was sold by M/s Duracell  (India) (P) Ltd. vide sale deed dated 28-4-2004 to one M/s  Lattu Finance & Investments Ltd. at a sale consideration of  Rs  13,62,00,000  i.e.  approximately  at  the  rate  of  Rs  1,13,00,000 (Rupees  one crore thirteen lakhs per  acre  ap- proximately). At the time the name of M/s Duracell (India)  (P) Ltd. had been changed to M/s Gillette India Ltd. on ac- count of its amalgamation with other company. In this sale  deed dated 28-4-2004 entire history of purchase of land by  M/s Duracell (India) (P) Ltd. from M/s Heritage Furniture (P)  Ltd. in 1994 onwards has been recited, which includes con- struction of industrial building over the said land, its conver- sion of status from private limited to public limited company,  its amalgamation with Indian Shaving Products  Ltd.  in the  

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year  2000  and  its  change  of  name  from Indian  Shaving  Products Ltd. to Gillette India Ltd. in December 2000 and  thereafter its sale to M/s Lattu Finance & Investments Ltd.  However, in the entire recitation there is no mention of any  joint venture with M/s Duracell Inc. USA.

9. It is submitted by the respondents/landowners that the said  sale deed (Ext. P-1) reflects true market price of the land in  the year 1994 when Section 4 notification for the acquired  land was issued. The allegation of the review petitioner that  the sale deed (Ext. P-1) reflects inflated price is false and  baseless. It is further submitted that another sale deed dated  17-7-1996 which is on record as (Ext. P-9) reflects the mar- ket value of the land in one of the acquired villages at Rs  25,00,000 (Rupees twenty-five lakhs) per acre. In this trans- action 1 kanal 11 marlas of land situated in Village Naharpur  Kasan, has been sold at  a price of Rs 4,84,375. This sale  deed also proves that the market price of the acquired land in  the year 1994 was Rs 20 lakhs per acre. Copy of sale deed  dated 17-7-1996 is Annexure R-4 hereto.  It  may be  men- tioned  here  that  the  same  purchaser  purchased  different  pieces of land at the same rate vide 15 different sale deeds  and the total land purchased was 18 kanals 5 marlas i.e. more  than 2.25 acres.”

Para  5  of  the  reply-affidavit  filed  on  behalf  of  the  landowners  who were  respondents in Civil  Appeal  No.  6561 of 2009

“5. That the present review petition is being filed only on the  ground that  Ext.  P-1,  which has  been  relied  upon by the  Hon’ble High Court as well as upheld by this Hon’ble Court  was entered into by the corporates which were under the con- trol  and  management  of  common Board  of  Directors  and  hence it is not the correct market value. In reply thereto the  respondents humbly submits that:

(a) This fact for the first time is brought into notice at  the level of this Hon’ble Court, therefore, the review peti- tioners are estopped by their own conduct.

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(b) That merely both the corporates have a common  Board of Directors does not prove that the sale in between  the corporates was at escalated rates, rather it should be  on other side i.e. a common Board would have tried to get  the sale as possible as on lower rate. Therefore the ground  for review is not legally justifiable.

 (c) It is submitted that later on corporate Gillette India  

Ltd. made a sale deed (land in issue of Ext. P-1) dated 28- 4-2004 to another corporate, namely, Lattu Finance & In- vestments  Ltd.  for  a  sum of  Rs  13,62,00,000  of  land  measuring 96 kanals and 13 marlas. (i.e. Rupees one crore  sixty-two lakhs per acre). It is submitted that this sale can- not be said to be at an escalated rate and therefore Ext. P- 1 denotes the correct market value at the relevant time.  The copies of the relevant sale deeds are annexed here- with and marked as Annexure R-1.

(d) It is also submitted that some other sale deeds at  the relevant time (20-9-1996) were executed in favour of  Time Master (P) Ltd. which came around Rs 25 lakhs per  acre. Details of the same are as follows:

Sl. No.Vasika No. Date Land sold Sale consideration 1. 8725 20-9-1996 1K 1½M Rs 3,55,000 2. 8726 20-9-1996 1K 8M Rs 3,59,375 3. 8727 20-9-1996 1K 1½M Rs 3,53,000 4. 8728 20-9-1996 1K 5M Rs 4,06,000 5. 8799 20-9-1996 1K 9M Rs 3,75,000 6. 8807 20-9-1996 1K 5M Rs 4,06,000 7. 8815 20-9-1996 1K 6M Rs 4,08,000 8. 8825 20-9-1996 1K 1M Rs 3,53,000 9. 8832 20-9-1996 0K 17M Rs 2,75,000 10. 8839 20-9-1996 1K 6M Rs 4,08,000 11. 8846 20-9-1996 1K 5M Rs 4,06,000 12. 8854 20-9-1996 1K 1M Rs 3,55,000 13. 8861 20-9-1996 0K 17M Rs 2,75,000

Total land sold is 15 kanals 3 marlas, total amount  is Rs 47,34,375 i.e. at the rate of Rs 25 lakhs per acre.

 14. 5431 17-7-1996 1K 11M Rs 4,84,375

i.e. at the rate of Rs 25 lakhs per acre.

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It is submitted that Sale Deed No. 5431 (at Sl. No. 14)  was already produced as Ext. P-9 before the Reference  Court in favour of Time Master (P) Ltd. by Vinod Kumar  (vendor).

Thus Time Master  India (P) Ltd. purchased total  land measuring 16 kanals 14 marlas at the rate of Rs 25  lakhs per acre.

(e) It is also relevant to point out the following are the  sale transactions in December 2006 of Village Naharpur  Kasan:

Land sold of Village Naharpur Kasan

Sl. No. Vasika No. Date  Land sold Sale              Per acre                   Consideration   

1. 18628 4 -12-2006  12K16.5M Rs2,56,50,000  1,60,00,000 2. 18742 5-12-2006  5K  13M Rs1,13,00,000  1,60,00,000 3. 18743 5-12-2006  5K  14M Rs   74,00,000  1,60,00,000 4. 19350 14-12-2006  5K  13M Rs1,13,00,000  1,60,00,000

(f) It is also submitted that the rate at which auction-sale of  Tower site on acquired land is done on 30-6-2006 is as follows:

Tower Area in metres Amount of Per square Site No. consideration  yard

J  6804            Rs 95.10 crores 1,16,865

K 5832            Rs101.50 crores 1,45,518

L 6804 Rs93.00 crores 1,14,284.50

(g) It also submitted the following details of auction by HSIDC  IMT, Manesar:

Auction-sales by HSIDC IMT, Manesar Allotment of SCO sites for shopping booth in Sector 1, IMT,  

Manesar, auction held on 18-8-2009.

Sl. No. Site No. Area in sq m Price of site 1. T-1 144 Rs 2,67,50,000 2. T-2 144 Rs 2,33,50,000 3. T-3 144 Rs 2,29,00,000 4. T-4 144 Rs 2,29,00,000

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5. T-5 144 Rs 2,31,00,000 6. T-7 144 Rs 2,28,00,000 7. T-8 144 Rs 2,25,00,000 8. T-9 144 Rs 2,22,00,000 9. T-10 144 Rs 2,16,00,000 10. D-1 108 Rs 1,82,00,000 11. D-2 108 Rs 1,58,00,000 12. D-3 108 Rs 1,62,50,000 13. D-4 108 Rs 1,60,00,000 14. D-5 108 Rs 1,51,00,000 15. D-6 108 Rs 1,38,50,000 16. D-7 108 Rs 1,40,00,000 17. D-8 108 Rs 1,37,00,000 18. D-9 108 Rs 1,35,00,000 19. D-10 108 Rs 1,33,50,000

Total area 2376 sq m, total amount Rs 35,78,50,000 i.e. Rs  1,50,610.26  per  metre  i.e.  Rs  1,25,928.58  per  yard  i.e.  Rs  60,94,94,327 per acre.

Allotment of SCO sites for shopping booth in Sector 1,  IMT, Manesar, auction held on 11-8-2010:

Sl. No. Site No. Area in sq m  Price of site 1. D-10 108     Rs 2,12,50,000 2. D-12 108     Rs 1,89,50,000 3. D-14 108               Rs 1,90,00,000 4. D-15 108     Rs 1,88,50,000 5. D-16 108     Rs 1,92,00,000

Allotment of triple-storeyed SCO sites  in Sector 1,  IMT,  Manesar, auction held on 11-8-2010 at the following rates:

Sl. No. Site No. Area in sq m    Price of site 1. 11 144        Rs  3,03,00,000 2. 12 144        Rs  3,00,00,000 3. 12-A 144        Rs  2,87,00,000

Total  area  972  sq  m  allotted  for  total  amount  of  Rs  18,62,50,000 i.e. Rs 1,91,615.22 per metre i.e. Rs 1,60,213.67  per square yard or Rs 77,54,34,189 per acre.”

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12. For  the  land  acquired  for  Phase-II  of  IMT,  Manesar,  the  Land  

Acquisition  Collector  passed  award  dated  22.7.2003  and  determined  

market value of the acquired land as under:

Name of the  village  

Chahi  per  acre in Rs.

Bhood  per  acre in Rs.

Banjar  per  acre in Rs.

Gair  Mumkin  per  acre  in  Rs.

Kasan 5,25,000 5,00,000 5,00,000 7,50,000 Bas Kusla 2,25,000 1,75,000 1,75,000 3,60,000 Naharpur  Kasan

5,25,000 4,00,000 4,00,000 7,20,000

Manesar 7,00,000 7,00,000 7,00,000 10,00,000

13. The landowners did not feel satisfied with the award of the Land  

Acquisition Collector and filed applications under Section 18 of the Act.  

The Reference Court relied upon the judgment of the High Court in Pran  

Sukh’s case whereby market value was assessed as Rs.15,00,000 per acre,  

applied an increase of 12% for the time gap of 7 years 3 months and 21  

days and held that the landowners are entitled to  compensation at the rate  

of Rs.28,15,356 per acre with all statutory benefits.  The Reference Court  

also held that its judgment would be subject to the outcome of the cases  

pending before this Court.

14. For the  land acquired  for  Phase-III  of  IMT,  Manesar,  the  Land  

Acquisition Collector  passed award dated 24.12.2003 and assessed  the  

market value of the acquired land as under:  

Name of the village Chahi per acre in Rs. Gair  Mumkin per  acre  in Rs.

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Kasan 5,25,000 7,50,000 Bas Kusla 2,25,000 3,60,000 Bas Haria 2,25,000 3,60,000 Dhana 2,25,000 3,60,000

15. The Reference Court relied upon the judgment rendered in relation  

to the acquisition made vide notification dated 6.3.2002 and held that the  

landowners are entitled to compensation at the rate of  Rs.28,15,849 per  

acre with all statutory benefits.

16. In  the  appeals  filed  by  them under  Section  54  of  the  Act,  the  

landowners  prayed  for  further  enhancement  in  the  amount  of  

compensation. HSIIDC also challenged the judgments of the Reference  

Court  and  prayed  that  the  amount  of  compensation  awarded  to  the  

landowners be reduced.  In some of the matters cross objections were also  

filed by the parties.

17. When the appeals and cross objections were taken up for hearing,  

the learned Single Judge found that the site plans Ext. PW1/1 and P8 did  

not clearly depict the location of various chunks of land acquired in 1994  

and  thereafter.   Therefore,  learned  counsel  for  HSIIDC was  asked  to  

submit a plan showing the exact location of the lands acquired in the years  

1994 and 2002.  Accordingly, a fresh site plan marked ‘A’ was produced,  

the correctness of which was not disputed by the counsel appearing for the  

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landowners.   

18. The learned Single Judge then took  cognizance  of  the  site  plan  

marked ‘A’ and the acquisitions made for Phases-II to V of IMT, Manesar  

and proceeded to observe as under:

“The aforesaid facts  clearly establish that the area was  developing.  There was demand for plots.   That is  the  reason that  the State  also  sought to  acquire  substantial  land after acquisition of land for development of Phase-I,  regularly after  some intervals.  It  had also  come in the  cross-examination of R.W.1-Dalbir Singh Bhati that 80%  of the plots carved out of the land acquired in the year  1994  had  already  been  sold  when  notification  under  Section 4 of the Act in the present case was issued.  50%  thereof had either been built or were under construction.  This was the pace of development, which clearly establish  that the land in question had potentiality for being used for  industrial/commercial purposes.”  

19. In support  of their claim for award of higher compensation,  the  

landowners relied upon the judgment of this Court in Pran Sukh’s case  

and  the  allotments  made  by  HSIIDC  and  its  predecessor  to  various  

persons.  The learned Single Judge did take cognizance of the allotments  

made  vide  Exhibits  P4  to  P7  but  declined  to  rely  upon  them  for  

determination of the compensation payable to the landowners.   This is  

evinced from paragraphs 25 and 26 of the impugned judgment, which are  

extracted below:

“25. In  addition  to  that,  reference  was  made  to  four  allotment letters, namely, Ex. P4 to Ex. P7, the details of  which are as under:

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Ex. Date Area in sq.  meters

Amount of  Consideration  in Rs.

Rate  per  sq.  yard  in Rs.

P 4

2.2.2000 30,000 4.50 crores 1,371.60

P 5

30.6.2006 6,804 95.10 crores 1,27,806.77

P 6

30.6.2006 5,832 101.50 crores 1,74,039.78

P 7

30.6. 2006 6,804 93.00 crores 1,36,684.30

26. The aforesaid plots were big chunks of land.  The  average sale consideration paid therein was stated to be  Rs.1,25,608.67 per square yard.  However, the fact is that  these  plots  were  sold  in  open  auction  for  commercial  purpose  and  more  than  4  years  after  the  issuance  of  notification  under  Section   4  of  the  Act  and  that  too  carved out of the land, which had already been acquired in  the  year  1994  and  located  quite  close  to  National  Highway  No.8.   Reference  had  also  been  made  to  allotment  letter  dated  2.2.2000  (Ex.P38)  pertaining  to  plots  No.  13,  14  and  15,  Sector  5,  IMT,  Manesar,  whereby 30,000 square meters  of land was allotted for  Rs.4,50,00,000/- at an average price of Rs.1,254.72 per  square yard.  The aforesaid allotment was two years prior  to the acquisition in question.  However, the fact remains  that even the aforesaid plots were also carved out of the  land acquired in the year 1994.”  

20. The learned Single Judge then noted that the State and HSIIDC did  

not adduce any documentary evidence to support the award made by the  

Collector and observed:

“28. As against the evidence led by the landowners, the  State  or  even  HSIIDC  did  not  lead  any  documentary  evidence to justify the award of the Collector by showing  any sale transaction pertaining to agricultural land in the  area.  This is not a case in isolation of the type.  A lot of  hue and cry is  raised  by the  agencies  of  the  State  for  

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whose benefit  the land is  acquired that  they should be  heard before assessment of compensation at every stage,  but the experience is that it is very rare that in any case  they lead evidence or raise any effective argument in the  court below and many a times, even in this Court.”

21. The learned Single Judge finally relied upon the judgment of this  

Court in Pran Sukh’s case and held that the landowners are entitled to  

compensation at the rate of Rs.37,40,000 per acre.  The reasons recorded  

by the learned Single Judge for arriving at this conclusion are contained in  

paragraphs 29 and 30 of the impugned judgment, which are  extracted  

below:

“29. From the  appreciation  of  evidence  produced  on  record, in my opinion, the price of the agricultural land,  which was acquired in the year 1994, as determined by  Hon’ble the Supreme Court in Pran Sukh’s case (supra),  can very well be taken as base for assessment of value of  the acquired land, which also on the date of notification  was  being  put  to  agricultural  use.   The  additional  advantage available at the time of acquisition of the land  in question was that the area in the vicinity had started  developing during interregnum of 7-8 years after the first  acquisition in the year 1994.  The value of the land, which  was being put to agricultural use and was in the vicinity of  the  land already  acquired  cannot  be  determined at  the  same rate at which the plots were being sold by way of  allotment or  auction in the  already developed area  but  those  prices  are  certainly  the  guiding  factors  for  determination  of  rate  at  which  the  increase  should  be  awarded,  which in my opinion,  should be  @ 12% per  annum.  Taking the same into account and considering the  time  gap  in  the  two  acquisition  being  7  years  and  3  months,  the  value  of  the  land  is  determined  at  Rs.37,40,000/- per acre.   The landowners shall also be  entitled to the statutory benefits available to them under  the Act.

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30. The  aforesaid  value  will  be  quite  close  if  we  consider the valuation of land from different angle, i.e.,  considering the allotment of 30,000 square meters of land  vide  allotment  letter  (Ex.P38)  @ Rs.1254/-  per  square  yard on 2.2.2000, granting increase thereon @ 12% per  annum and reducing 50% therefrom on account of various  factors.”

22. The learned Single Judge separately considered the claim of M/s.  

Kohli Holdings Private Limited which had filed R.F.A. No.4646 of 2010.  

He took cognizance of the location of 69 kanals 15 marlas land belonging  

to  M/s.  Kohli  Holdings  Private  Limited  on  National  Highway 8  with  

frontage of two acres and the existence of a five star hotel and a resort on  

the adjoining land.  The learned Single Judge relied upon allotment of  

30,000 square meters land made by HSIIDC vide Exhibit P38 to M/s.  

Orient  Craft  Limited  (sister  concern  of  M/s.  Kohli  Holdings  Private  

Limited)  at  the  rate  of  Rs.1,254  per  square  yard,  granted  an  annual  

increase of 15% on that price and awarded  compensation at the rate of  

Rs.2119 per square yard (Rs.1,02,55,960 per acre).  Paragraphs 31, 33  

and 34 of the impugned judgment which exclusively deal with the case of  

M/s. Kohli Holdings Private Limited are as under:

“31.

As far as  value of the land owned by M/s Kohli  Holdings Private Limited (R.F.A. No.4646 of 2010)  is  concerned,  the  same  has  to  be  determined  separately.   This  fact  was  not  even disputed  by  learned counsel for HSIIDC and rightly so for the  reason that the aforesaid portion of 69 kanals and  15  marlas  is  located  on  National  Highway No.8  

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with frontage of two acres.   Even from the back  side also, it has connection from a link road.  It was  also not disputed that adjoining thereto is a five star  hotel and a resort.  The other area adjoining to it,  which was earlier acquired by the State in the year  1994,  had already been developed.  Even on the  other side of   National Highway No.8, opposite the  acquired land, the area had already been developed  as  Housing Project  for  industrial  workers.   The  value of this land cannot be assessed merely at the  rates,  which have been granted to  the owners  of  land which is located 4-5 kilometers from National  Highway No.8.  

33.

The aforesaid sale  transaction having taken place  two years prior to the issuance of notification under  Section 4  of the Act  and looking at  the pace  of  development  close  to  the  acquired  land,  in  my  opinion, increase @ 15% per annum can very well  be added in the value, as  is evident in Ex  P38.  Adding the same, the value of the land will come  out to Rs.1,630/- per square yard.  The aforesaid  plot  is  located  about  one  kilometer  inside  from  National Highway No.8,  though in the developed  industrial estate,  but as  against that,  the acquired  land is abutting the National Highway with frontage  of two acres out of 69 kanals and 15 marlas owned  by the appellant-landowner.  The value of the land  on National Highway is always more as against the  value of the land, which is located off the road.  It  has  its  own  advantages.   There  are  certain  limitations for which the land located off the main  road can be used, but as far as the land located on  the  National  Highway  or  the  State  Highway  is  concerned, it can be put to many uses, to which the  land located off the road may not be appropriately  used.

34.

Considering  the  aforesaid  facts,  in  my  opinion,  applying a thumb rule, an addition of 30% thereon  

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can  very  well  be  added  on  account  of  special  locational  advantage  available  to  the  land  in  question.  Adding the same, the value of the land  owned by M/s  Kohli Holdings Pvt.  Ltd.  (R.F.A.  No.4646  of  2010)  is  assessed  at  Rs.2,119/-  per  square yard.  The land owner shall also be entitled  to the statutory benefits available under the Act.”

    23. Although in the  special  leave petitions filed by HSIIDC several  

grounds  have  been  taken  for  challenging the  judgment of  the  learned  

Single Judge,  the  only point  urged by Shri Parag P.  Tripathi,  learned  

senior counsel appearing on its behalf is that the escalation of 12% granted  

by the learned Single Judge in the amount of compensation determined by  

this Court in Pran Sukh’s case is excessive and is not in consonance with  

the law laid down by this Court.  He relied upon the judgment of this  

Court  in  Oil  and  Natural  Gas  Corporation  Limited  v.  Rameshbhai  

Jivanbhai Patel and another (2008) 14 SCC 745 and argued that while  

assessing market value of a large chunk of land, the Court cannot award  

more than 7.5% escalation in the market value determined in respect of  

similar parcels of land.  Learned senior counsel emphasized that HSIIDC  

had to spend a substantial amount on carrying out development and argued  

that this factor should have been taken into consideration by the learned  

Single Judge while fixing market value of the acquired land.  Shri Tripathi  

also criticized the impugned judgment insofar as it relates to the award of  

compensation at the rate of Rs.1,02,55,960 per acre in the case of M/s.  

Kohli Holdings Private Limited by arguing that in view of several statutory  

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restrictions on the development of land along National Highway 8,  the  

landowners could not have been awarded higher compensation.

24. Shri V.K. Bali, learned senior counsel, and other learned counsel  

appearing for the landowners, who are the appellants in various appeals  

except  the  appeals  arising out  of  SLP(C)  No.18044  of  2011  (R.F.A.  

No.4278  of  2010)  and  SLP(C)  No.21030  of  2011  raised  several  

contentions  in  support  of  their  clients’  prayer  for  grant  of  further  

enhancement in the amount of compensation determined by the learned  

Single Judge of the High Court.  Their main contentions are enumerated  

below:  

1. The  High  Court  committed  

an error by not awarding higher compensation to all the landowners  

as was done in the case of M/s. Kohli Holdings Private Limited.

2. The  impugned  judgment  

suffers  from the  vice  of  discrimination inasmuch as  M/s.  Kohli  

Holdings Private Limited has been allowed 15% increase over and  

above the price for which 30,000 square meters land was allotted to  

M/s.  Orient  Craft  Limited  whereas  the  other  landowners  were  

allowed  only 12% increase.   Likewise,  they were  not  given an  

additional  30% amount as  was  done  in the  case  of  M/s.  Kohli  

Holdings Private Limited.

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3. The  learned  Single  Judge  

committed an error by not clarifying that the landowners shall be  

entitled to the benefit of annual increase on cumulative basis.

4. Though  the  land  of  M/s.  

Kohli Holdings Private Limited appears to have special locational  

advantage inasmuch as it is adjacent to National Highway 8, the  

development  potential  of  land  belonging to  other  landowners  is  

much higher because the same is located between two highways,  

i.e.,  National Highway 8 and KMP Express Way and a 60 meter  

road connects that land and National Highway 8.

5. The  learned  Single  Judge  

committed  an  error  by  not  relying  upon  Exhibit  PW9/A  dated  

23.11.1999 by which HSIIDC allotted 26.778 acres land to M/s.  

Honda Motorcycles and Scooters India (Private) Limited at the rate  

of  Rs.1254.18  per  square  yard  for  manufacture  of  two  

wheelers/three wheelers. Even if 40% deduction is made towards  

development  cost,  as  was  done  in  Sanath  Kumar  v.  Special  

Tahsildar and another (2011) 12 SCC 404 and cumulative increase  

of 15% is given, the landowners will be entitled to compensation at  

a much higher rate.

25. Shri  Dushyant  Dave,  learned  senior  counsel  appearing for  M/s.  

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Kohli Holdings Private Limited vehemently argued that the learned Single  

Judge  of  the  High Court  committed  an  error  by  not  awarding higher  

compensation to his client in the light of the auction sale conducted by  

HSIIDC in 2006.   He submitted that even though these auctions were  

conducted  about  four  years  after  finalization  of  the  acquisition  

proceedings,  the rate  at  which the land was sold should be taken into  

consideration for the purpose of fixation of market value because no other  

tangible evidence  was  available for  that  purpose.   He relied upon the  

judgment  in  Executive  Engineer,  Karnataka  Housing  Board  vs.  Land  

Acquisition Officer, Gadag and others (2011) 2 SCC 246 and submitted  

that in the absence of private sale transactions, auction sale conducted by  

the beneficiary of acquisition can be relied upon for the purpose of fixing  

market value.

26. Shri P.S. Patwalia and Dr. Abhishek Manu Singhvi, learned senior  

counsel  appearing for  Maruti  Suzuki India  Limited (for  short,  ‘Maruti  

Udyog Limited’) opposed the landowners’ claim for further enhancement  

in  the  amount  of  compensation  by  arguing  that  this  would  place  

unbearable burden on the company.  They pointed out that out of 771  

acres land acquired for Phases-II and III of IMT, Manesar, 600 acres land  

was allotted to Maruti Udyog Limited at the rate of Rs.19,00,000 per acre  

in 2008 and if further enhancement is granted, the financial health of the  

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company will be seriously impaired.  Learned senior counsel pointed out  

that  vide letter  dated 1.10.2012 HSIIDC has  already made demand of  

Rs.500 crores in lieu of the enhanced compensation to the landowners and  

submitted that if further enhancement is granted,  the management may  

have to take a decision to discontinue the plant at Manesar.  Shri Patwalia  

emphasized that if the manufacturing activities are closed by the company  

at Manesar, more than 20000 workers will be rendered jobless and the  

State will suffer revenue loss to the tune of Rs.8000 crores.   Both the  

learned senior counsel emphasized that the land was allotted to Maruti  

Udyog Limited without any development and argued that this should be  

taken as the criteria for determination of the compensation.  Shri Patwalia  

also made an additional submission that the judgments of the Reference  

Court and the High Court are liable to be set aside because Maruti Udyog  

Limited was not impleaded as a party despite the fact that it falls within  

the ambit of the expression ‘person interested’ in Section 3(b) of the Act.  

In support of this argument, reliance has been placed on the judgments of  

this Court in Himalayan Tiles and Marble (P) Limited v. Francis Victor  

Coutinlo (1980) 3 SCC 223, U.P. Awas Vikas Parishad v. Giyan Devi  

(1995) 2 SCC 326 and DDA v. Bhola Nath Sharma (2011) 2 SCC 54.

27. Learned  counsel  for  the  landowners  controverted  the  statement  

made by the learned senior counsel for Maruti Udyog Limited that the  

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company was allotted the land in 2008.   They pointed out that as  per  

conveyance  deed  dated  7.8.2008,  501.8  acres  of  land was  allotted  to  

Maruti Udyog Limited vide allotment letter  dated 5.4.2004 which was  

followed by agreement dated 9.8.2004.  They further argued that if the  

object  of  the  acquisition  was  to  benefit  Maruti  Udyog  Limited,  the  

Government should have resorted to the provisions contained in Part VII  

of  the Act  and its  failure to  do  so  should be  treated  as  sufficient for  

quashing the acquisition proceedings in their entirety.  In support of this  

argument, learned counsel relied upon the judgment of this Court in Royal  

Orchid  Hotels  Limited  v.  G.  Jayarama  Reddy  (2011)  10  SCC  608.  

Learned counsel also pointed out that as per Exhibit P11 which was filed  

in L.A.C. No.34/2008, 7875 square meters of land was allotted to M/s.  

Krishna Maruti Limited (subsidiary of Maruti Udyog Limited) at the rate  

of Rs.73,38,795 per acre and argued that this by itself should be treated as  

sufficient for awarding higher compensation to the landowners.

28. We  have  considered  the  respective  submissions  and  carefully  

scrutinized the records including the additional affidavits filed on behalf of  

the parties and their written arguments.    

29. A careful scrutiny  of the impugned judgment shows that  while  

determining the amount of compensation payable to the landowners other  

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than M/s.  Kohli Holdings Private Limited, the learned Single Judge did  

make a reference to Exhibit P38 (paragraph 30) but did not rely upon the  

same for the purpose of determination of the amount of compensation.  

Instead  of  adopting a  holistic  approach  and  examining the  documents  

produced before the Reference Court,  the learned Single Judge simply  

referred to the judgment of this Court in Pran Sukh’s case, granted a flat  

increase of 12% for the time gap of about 7 years and 3 months between  

the two acquisitions, i.e., 1994 and 2002 and determined market value at  

the rate of Rs.37,40,000 per acre.   In the case of M/s.  Kohli Holdings  

Private Limited, the learned Single Judge squarely relied upon  Exhibit  

P38 for the purpose of fixing market value of the acquired land, granted an  

increase at a flat rate  of 15% per annum on the price of land specified in  

Exhibit P38 with  an addition of 30% on account of special locational  

advantage  and  held  that  the  particular  landowner  is  entitled  to  

compensation at the rate of Rs.2119 per square yard (Rs.1,02,55,960 per  

acre).   However, no discernible reason has been given for granting the  

benefit of annual increase at different rates to M/s. Kohli Holdings Private  

Limited on the  one  hand and the  remaining landowners  on the  other.  

Therefore, we find merit in the argument of the learned counsel for the  

remaining  landowners  that  their  clients  have  been  subjected  to  

discrimination in the matter of grant of annual increase.

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30. The other error committed by the learned Single Judge is that he  

granted annual increase at a flat rate of 12/15%.   

31. The question whether  the  benefit  of  annual increase  in the pre-

determined price of a portion of the acquired land or a similar land should  

be  cumulative  was  considered  by  this  Court  in  Oil  and  Natural  Gas  

Corporation Limited v. Rameshbhai Jivanbhai Patel (supra) and answered  

in the affirmative.  Paragraphs 12 to 15 and 18 and 19 of that judgment,  

which contain the rationale of granting cumulative increase are extracted  

below:

12. We have examined the facts of the three decisions relied on  by the respondents. They all related to acquisition of lands in  urban or semi-urban areas. Ranjit Singh related to acquisition for  development of Sector 41 of Chandigarh. Ramanjulu related to  acquisition of the third phase of an existing and established in- dustrial estate in an urban area.  Bipin Kumar related to an ac- quisition of lands adjoining Badaun-Delhi Highway in a semi- urban area where building construction activity was going on all  around the acquired lands.

13. Primarily,  the  increase  in  land  prices  depends  on  four  factors: situation of the land, nature of development in surround- ing area, availability of land for development in the area, and the  demand for land in the area. In rural areas, unless there is any  prospect of development in the vicinity, increase in prices would  be  slow,  steady  and  gradual,  without  any  sudden  spurts  or  jumps. On the other hand, in urban or semi-urban areas, where  the development is faster, where the demand for land is high and  where there is construction activity all around, the escalation in  market price is at a much higher rate, as compared to rural areas.  In some pockets in big cities, due to rapid development and high  demand for land,  the escalations in prices have touched even  30% to 50% or more per year, during the nineties.

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14. On the other extreme, in remote rural areas where there was  no chance of any development and hardly any buyers, the prices  stagnated for years or rose marginally at a nominal rate of 1% or  2% per annum. There is thus a significant difference in increases  in market value of lands in urban/semi-urban areas and increases  in market value of lands in the rural areas. Therefore, if the in- crease in market value in urban/semi-urban areas is about 10%  to 15% per annum, the corresponding increases in rural areas  would at best be only around half of it, that is, about 5% to 7.5%  per annum. This rule of thumb refers to the general trend in the  nineties, to be adopted in the absence of clear and specific evid- ence relating to increase in prices. Where there are special reas- ons for applying a higher rate of increase, or any specific evid- ence relating to the actual increase in prices, then the increase to  be applied would depend upon the same.

15. Normally, recourse is taken to the mode of determining  the market value by providing appropriate escalation over the  proved market value of nearby lands in previous years (as evid- enced by sale  transactions or acquisitions),  where there is no  evidence of any contemporaneous sale transactions or acquisi- tions  of  comparable  lands  in  the  neighbourhood.   The  said  method  is  reasonably  safe  where  the  relied  on  sale  transactions/acquisitions precede the subject acquisition by only  a few years, that is, up to four to five years.  Beyond that it may  be unsafe, even if it relates to a neighbouring land.  What may be  a reliable standard if the gap is of only a few years, may become  unsafe and unreliable standard where the gap is larger.  For ex- ample, for determining the market value of a land acquired in  1992, adopting the annual increase method with reference to a  sale or acquisition in 1970 or 1980 may have many pitfalls.  This  is because,  over the course of years,  the “rate”  of annual in- crease may itself undergo drastic change apart from the likeli- hood of occurrence of varying periods of stagnation in prices or  sudden spurts in prices affecting the very standard of increase.

18. The increase in market value is calculated with reference to  the market value during the immediate preceding year.  When  market  value is  sought to  be  ascertained with reference  to  a  transaction which took place some years before the acquisition,  the method adopted is to calculate the year to year increase. As  the percentage of increase is always with reference to the previ- ous year's market value, the appropriate method is to calculate  

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the increase cumulatively and not applying a flat rate. The differ- ence between the two methods is shown by the following illus- tration (with reference to a 10% increase over a basic price of Rs  10 per square metre):

Year By flat rate increase By cumulative increase  method method

1987           10.00 10.00         (Base year)

1988    10 + 1 = 11.00            10.00 + 1.00 = 11.00 1989    11 + 1 = 12.00            11.00 + 1.10 = 12.10 1990    12 + 1 = 13.00            12.10 + 1.21 = 13.31 1991    13 + 1 = 14.00            13.31 + 1.33 = 14.64 1992    14 + 1 = 15.00            14.64 + 1.46 = 16.10

19. We may also point out that application of a flat rate will lead  to anomalous results. This may be demonstrated with further ref- erence to the above illustration. In regard to the sale transaction  in 1987, where the price was Rs 10 per square metre, if the an- nual increase to be applied is a flat rate of 10%, the increase will  be Rs 1 per annum during each of the five years 1988, 1989,  1990, 1991 and 1992. If the price increase is to be determined  with reference to  sale  transaction of the year 1989 when the  price was Rs 12 per square metre, the flat rate increase will be  Rs 1.20 per annum, for the years 1990, 1991 and 1992. If the  price increase is determined with reference to a sale transaction  of the year 1990 when the price was Rs 13 per square metre,  then the flat rate increase will be Rs 1.30 per annum for the  years 1991 and 1992. It will thus be seen that even if the per- centage of increase is constant, the application of a flat rate leads  to  different amounts being added depending upon the market  value in the base year. On the other hand, the cumulative rate  method  will  lead  to  consistency  and  more  realistic  results.  Whether the base price is Rs 10 or Rs 12.10 or Rs 13.31, the in- crease will lead to the same result. The logical, practical and ap- propriate method is therefore to apply the increase cumulatively  and not at a flat rate.”

32. The same view was reiterated in Valliyammal v. Special Tahsildar  

(Land Acquisition) (2011) 8 SCC 91.  Of course, in that case annual in-

crease of 10% was allowed to the landowners.

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33. We also find merit in the argument of the learned counsel for the  

landowners that while fixing market value of the acquired land the learned  

Single Judge committed serious error  by not  considering an  important  

piece  of  evidence,  i.e.,  Exhibit  PW9/A dated  23.11.1999  vide  which  

HSIIDC had allotted land to M/s. Honda Motorcycles and Scooters India  

(Private) Limited at the rate of Rs.1254.18 per square yard.  Although, this  

document was produced before the Reference Court but the same was not  

taken into consideration while determining the amount of compensation.  

The same error has been repeated in the impugned judgment. If this docu-

ment is taken into consideration, then market value of the acquired land  

would come to Rs.60,69,360 per acre.  By making deduction of 50% to-

wards development cost and granting annual increase of 12/15% (cumulat-

ive), market value of the land will be much higher than Rs.37,40,000 per  

acre.

34. In view of the above conclusions, we do not consider it necessary to  

deal with the other points argued by learned counsel for the parties/inter-

venors and feel that ends of justice will be served by setting aside the im-

pugned judgment and remitting the matters to the High Court for fresh dis-

posal of the appeals and cross objections filed by the parties subject to the  

rider  that  the  State  Government/HSIIDC  shall  pay  the  balance  of  

Rs.37,40,000  to the landowners along with other statutory benefits.

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35. In the result, the appeals are allowed, the impugned judgment is set  

aside and the matter is remitted to the High Court for fresh disposal of the  

appeals filed by the parties under Section 54 of the Act as also the cross  

objections. The parties shall be free to urge all points in support of their  

respective cause and the High Court shall decide the matter uninfluenced  

by the observations contained in this judgment.

36.  Maruti Udyog Limited shall be free to file an appropriate applica-

tion before the High Court for its impleadment or grant of leave to act as  

intervenor in the appeals filed by the parties.   If such an application is  

filed, the same shall be decided on its own merits.  

37. The State Government/HSIIDC shall pay the balance of compensa-

tion determined by the High Court, i.e., Rs.37,40,000  - Rs.28,15,356 =  

Rs.9,24,644 per acre to the landowners and/or their legal representatives  

along with all statutory benefits within a period of four months from today.  

The payment shall be made to the landowners and/or their legal represent-

atives by following the procedure laid down in the interim orders passed  

by this Court.

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

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NEW DELHI;      ...................................................................J. JULY 02, 2013.     [SUDHANSU JYOTI MUKHOPADHAYA]

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