REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 3033 OF 2008

National Fertilizers Ltd.               …    Appellant

Versus

Jagga Singh (Deceased) through L.Rs. & Anr.   …  Respondents

WITH

CIVIL APPEAL Nos. 3095 OF 2008, 3114 OF 2008, 3105 OF 2008,     3102 OF 2008,    3101 OF 2008, 3099 OF 2008,     3112 OF 2008,    3097 OF 2008, 3100 OF 2008,     3109 OF 2008,    3094 OF 2008, 3093 OF 2008,     3110 OF 2008,    3098 OF 2008, 3103 OF 2008,     3096 OF 2008,    3111 OF 2008, 3107 OF 2008,     3115 OF 2008,    3113 OF 2008, 3117 OF 2008,     3108 OF 2008,    3104 OF 2008

    AND 3116 OF 2008

J U D G M E N T

A. K. PATNAIK, J.

These are the appeals by way of special leave against  

the judgment and order dated 13.07.2005 of the Division  

Bench of the Punjab and Haryana High Court, Chandigarh,  

in Letters Patent Appeals determining the market value of

acquired land @ Rs.120/- per square yard (for  short ‘the  

impugned judgment’).

2. The facts relevant for deciding these appeals briefly are  

that the National Fertilizers Limited (for short ‘the NFL’) is a  

Government of India Undertaking engaged in the business  

of manufacturing fertilizers and has a plant in Bhatinda in  

the State of Punjab.  To meet the requirement of dwelling  

houses  for  the  employees  of  NFL,  the  State  of  Punjab  

acquired  29.68  acres  of  land  in  village  Bhatinda  by  

notification dated 24.01.1983 issued under Section 4 of the  

Land Acquisition Act, 1894 (for short ‘the Act’).  The District  

Collector  sent  the  market  rates  to  the  Land  Acquisition  

Collector for different classes of agricultural or revenue land  

and these were for Nehri – Rs.56,000/- per acre, for Barani  

– Rs. 23,000/- per acre and for Gair Mumkin – Rs.23,000/-  

per  acre.   The Land Acquisition Collector  determined the  

compensation at 50% above the rates sent by the District  

Collector  for  each of  the  aforesaid  classes  of  land in  his  

award dated 19.03.1986.  Not satisfied with the award, the  

landowners made a reference under Section 18 of the Act to  

the civil court.  Besides the State, NFL was impleaded as a  

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defendant in the reference.  By order dated 29.04.1991, the  

learned  Additional  District  Judge  determined  the  

compensation for all the three classes of land at a uniform  

rate  of  Rs.32.50  per  square  yard  after  considering  two  

unregistered  sale  agreements  (Exhibits  A-X and A-Y)  and  

the  order  of  the  High  Court  in  Sadhu  Singh’s case  

determining  the  compensation  for  land  acquired  for  

extension of the military cantonment in the year 1976. The  

land owners challenged the order of the Additional District  

Judge before the High Court in Regular First Appeals.   The  

State of Punjab and NFL also challenged the order of the  

learned Additional District Judge before the High Court in  

Regular First Appeals.  The learned Single Judge of the High  

Court, who heard the appeals, sustained the determination  

of  compensation made by the learned Additional District  

Judge and dismissed the appeals by a common order dated  

09.09.1994.

3. Aggrieved, the land owners as well as NFL challenged  

the  order  dated  09.09.1994  of  the  learned  Single  Judge  

before  the  Division  Bench  of  the  High  Court  in  Letters  

Patent Appeals.   In the impugned judgment,  the Division  

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Bench of the High Court held that as Exhibits A-X and A-Y  

were  unregistered  and  did  not  bear  any  date,  these  

documents  could  not  be  considered  for  determination  of  

compensation.  The Division Bench also found from the site  

plan that the military cantonment for which Sadhu Singh’s  

land was acquired was far away from the land acquired in  

the present case.  The Division Bench also found that the  

land  of  Sadhu  Singh  was  acquired  for  the  military  

cantonment in the year 1976 whereas the lands acquired in  

the present case were included in the municipal limits of  

Bhatinda city in 1977 and around the land acquired in the  

present  case,  various  colonies  had  come  up  in  the  

municipal limits of Bhatinda.  The Division Bench further  

found from the site plan that the land of Karam Singh which  

had been acquired for a municipal park was much nearer to  

the land of the land owners acquired in the present case.  

The  Division  Bench,  therefore,  took  the  view  in  the  

impugned  judgment  that  the  order  passed  by  the  High  

Court in the case of Sadhu Singh for the land acquired for  

military cantonment could not be preferred over the order of  

the High Court passed in the case of Karam Singh for land  

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acquired for municipal park in the year 1983 for making the  

assessment  of  market  value  of  the  land  acquired  in  the  

present case and determined Rs.120/- per square yard as  

just and reasonable market value for the land acquired in  

the  present  case  and adopted the reasoning given in  the  

order dated 08.11.1989 of the High Court  (Exhibit A-15) in  

the case of Karam Singh (RFA No.906 of 1988).

4. Learned counsel appearing for the appellant submitted  

that the Division Bench of the High Court was not correct in  

coming  to  the  conclusion  that  the  assessment  of  

compensation in Karam Singh’s case was more comparable  

and relevant for making assessment of market value of the  

land acquired in the present case.  He submitted that in  

Karam Singh’s  case  a very small  area of  land measuring  

1058 sq. yards was acquired whereas in the present case a  

much bigger area of acre 29.68 was acquired.  He submitted  

that in Karam Singh’s case the land was a developed land  

located in the heart of the Bhatinda town, but in the present  

case  the  acquired  land  was  water-logged  and  used  for  

agricultural  purpose  and  was  away  from  the  city.   He  

referred to the order  of  the  High Court  passed in Karam  

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Singh’s case to show that the land acquired in that case had  

a great potential value for being used for commercial and  

residential purposes.  He submitted that the land acquired  

in  Karam  Singh’s  case  was  at  a  distance  of  about  200  

karmas  from  the  scheme  of  Improvement  Trust  on  the  

Amrik Singh Road.  He submitted that at a short distance  

from the land acquired in Karam Singh’s case, towards the  

city,  there  were shops of  jewellers,  iron furniture  factory,  

cinema hall as well as Sepal Hotel.    He argued that these  

facts made a big difference to the value of the land that was  

acquired in Karam Singh’s case and that the assessment of  

compensation in Karam Singh’s case was not at all relevant  

to the assessment of compensation for the land acquired in  

the present case.

5. Learned counsel for the appellant submitted that the  

learned  Additional  District  Judge  and  the  learned  Single  

Judge have therefore rightly taken the view that the value of  

the land acquired in the case of Karam Singh could not be  

the  basis  for  determining  the  compensation  for  the  land  

acquired in the present case.  He submitted that the learned  

Additional  District  Judge  and  the  learned  Single  

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Judge of the High Court have in the present case taken the  

average price of two sale transactions in Exhibits A-X and  

A-Y as well as the market value of the land acquired in the  

year 1976 in the case of Sadhu Singh and after adding an  

increase of 12% per annum arrived at the value of the land  

acquired in the present case in 1983 at Rs.32.50 per sq.  

yard, which was just and reasonable.           

6. Learned  counsel  for  the  appellant  cited  Chimanlal   

Hargovinddas v. Special Land Acquisition Officer, Poona and  

Another [(1988) 3 SCC 751] in which this Court has listed  

the plus factors and minus factors which have to be taken  

into consideration for determining the market value of land  

in  land  acquisition  cases.   He  submitted  that  in  this  

decision this Court has mentioned largeness of area of land  

in the list of minus factors for determination of the market  

value of the land.  He also relied on Hasanali Khanbhai &  

Sons and Others v.  State of Gujarat [(1995) 5 SCC 422] in  

which deduction to the extent of 60% of the value of land on  

account of the large size of the land adopted by the High  

Court  was  found  to  be  justified.   He  also  relied  on  K.  

Vasundara Devi v. Revenue Divisional Officer (LAO) [(1995) 5  

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SCC 426]  in  which  it  was  held  that  sufficient  deduction  

should be made to arrive at the just and fair market value of  

large  tracts  of  land,  which  were  not  developed.   He  also  

relied on  Kanta Devi and Others v.  State  of  Haryana and  

Another [(2008)  15  SCC  201]  in  which  this  Court  made  

deduction  of  60%  for  meeting  the  expenditure  towards  

development charges.

7. Learned  counsel  for  the  respondent-land owners,  on  

the other hand, submitted that all the witnesses produced  

by  the  land  owners  before  the  Additional  District  Judge  

have testified to the fact that the acquired land is situated  

on  the  National  Highway  leading  from  Bhatinda  to  

Ferozepur via Goniana and was within the municipal limits  

of Bhatinda and was situated by the side of a metal road.  

He submitted that the witnesses have also testified that the  

acquired land was surrounded by many industrial concerns  

and residential colonies, such as thermal plant, the plant of  

NFL as well as colony of the employees of the two plants and  

Sucha  Singh  Colony,  Amar  Singh  Colony,  Kheta  Singh  

Colony,  Mandir  Colony  etc.   He  submitted  that  the  

witnesses have also stated that the abadi of Bhatinda town  

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has extended towards the land acquired in the present case  

and three sides of the acquired land are already occupied  

and on the fourth side is the metal road.  He submitted that  

the learned Additional District Judge has taken note of all  

such evidence or the witnesses and has held that the land  

acquired in the present case has the potentiality of urban  

land and not of agricultural land.  

8. Learned  counsel  for  the  respondent-landowners  

submitted that the land acquired in the present case may be  

at some distance from the land acquired in Karam Singh’s  

case  but  this  cannot  be  a  ground  for  not  treating  the  

acquired land in the present case as comparable with the  

land  acquired  in  Karam Singh’s  case  for  the  purpose  of  

determination  of  compensation.   In  support  of  his  

submission he relied on Thakarsibhai Devjibhai and Others  

v.  Executive  Engineer,  Gujarat  and Another [(2001) 9 SCC  

584]  in  which  this  Court  has  held  that  if  the  quality,  

including potentiality, of two areas of land is similar then  

distance  between  the  two  would  not  by  itself  lead  to  a  

change  in  their  respective  market  values.   He  submitted  

that it is not correct as has been submitted on behalf of the  

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appellant  that  the  acquired  land  was  a  low  waterlogged  

agricultural  land  and  as  per  the  evidence  of  RW-1,  the  

Patwari,  Land  Acquisition,  Industries  Department,  

Government of Punjab, the level of the acquired land was  

the same as that of the existing land of township of the NFL.  

He submitted that the quality of the acquired land and the  

quality of the land acquired in the case of Karam Singh were  

therefore one and the same and the Division Bench of the  

High  Court  has  rightly  held  that  the  compensation  

determined for the land acquired in the case of Karam Singh  

should be the basis for determination of compensation of  

the acquired land in the present case.  He submitted that in  

any case the value of the acquired land in Karam Singh’s  

case was determined by the High Court under Ext.A-15 at  

Rs.176/-  per  square  yard and the Division Bench in  the  

impugned  order  has  applied  a  cut  and  determined  the  

compensation for the land acquired in the present case at a  

reduced rate of Rs.120/- per square yard and this was a  

just  and  reasonable  compensation  awarded  for  the  land  

acquired in the present case.

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9. Learned  counsel  for  the  respondent-landowners  next  

submitted that the determination of  compensation by the  

learned Single Judge of the High Court in the present case  

on the basis of land acquired in Sadhu Singh’s case was not  

at  all  correct  because  the  land  acquired  in  the  case  of  

Sadhu Singh was located in the cantonment area and the  

acquisition was in 1976, whereas the Municipal Council of  

Bhatinda was constituted only in 1977 and the land in the  

present  case  was  acquired  in  1983  when  the  land  was  

within  the  municipal  limits.  He  submitted  that  the  

acquisition in Sadhu Singh’s case was made in 1976 more  

than seven years before the acquisition in the present case  

and  therefore  the  value  of  land  as  determined  in  Sadhu  

Singh’s  case  cannot  be  the  basis  for  determination  of  

compensation  in  the  present  case.   He  cited  General  

Manager,  Oil  and  Natural  Gas  Corporation  Limited v.  

Rameshbhai  Jivanbhai  Patel  and  Another [(2008)  14  SCC  

745]  in which this  Court  has held  that  sale  transactions  

which precede the subject acquisition by only a few years,  

i.e. upto four to five years, can be relied upon but relying on  

sale transactions beyond that would be unsafe,  even if  it  

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relates to a neighbouring land.  He submitted that in the  

absence of any appropriate sale transaction of the year 1983  

in respect of land in an around the acquired land in the  

present  case,  the  Division  Bench  rightly  relied  on  the  

judicial  precedent  in  the  case  of  Karam  Singh  and  

determined the compensation at  the rate  of  Rs.120/- per  

square yard.  He relied on  Pal Singh and Others v.  Union  

Territory  of  Chandigarh [(1992)  4  SCC  400]  wherein  this  

Court has observed that a judgment of a court in a land  

acquisition case determining the market value of a land in  

the  vicinity  of  the  acquired lands,  even though not  inter  

partes,  is admissible in evidence either as an instance or  

one from which the market value of the acquired land could  

be deduced or inferred.  He submitted that Ext.A-15 which  

was the order of the High Court in the case of Karam Singh  

has therefore been rightly relied upon by the Division Bench  

of  the  High  Court  in  determining  the  compensation  of  

Rs.120/-  per  square  yard  for  the  land  acquired  in  the  

present case.

10. We  have  considered  the  submissions  of  the  learned  

counsel for the parties and we find that while the case of the  

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appellant is that the learned Additional District Judge and  

the  learned  Single  Judge  correctly  determined  the  

compensation  payable  to  the  landowners  for  the  land  

acquired in the present case at the rate of Rs.32.50 per sq.  

yard,  the  case  of  the  respondent-landowners  is  that  the  

Division Bench of the High Court has correctly determined  

the compensation in the impugned judgment at the rate of  

Rs.120/- per sq. yard. Therefore,  the  question  that  we  

have  to  decide  in  these  appeals  is  whether  the  

compensation for the lands acquired as determined by the  

Additional District Judge and as upheld by the order of the  

learned Single Judge is a correct assessment of the market  

value  of  the  acquired  land  or  the  compensation  as  

determined by the Division Bench of the High Court in the  

impugned judgment is a more accurate assessment of the  

market value of the land acquired in present case.   

11.  We  may  first  deal  with  the  determination  of  the  

compensation by the Additional District Judge as affirmed  

by the learned Single Judge of the High Court in the Regular  

First Appeals.  The Additional District Judge has taken into  

consideration  two  sale  agreements  (Exts.  A-X  and  A-Y).  

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Exhibit  A-X is  executed by one Satish Gupta agreeing to  

transfer  his  plot  of  land  measuring  400  sq.  yards  for  

Rs.17,300/- to one Sham Singh and Exhibit A-Y is executed  

by one Balram Shukla agreeing to transfer his plot of 400  

sq. yards for Rs.17,000/- to Satnam Singh.  The average  

sale price in these two sale agreements comes to Rs.42.87  

per  sq.  yard.   The  sale  agreements  are  between  the  

employees of NFL, who were members of the NFL Employees  

Co-operative Society.  The Division Bench of the High Court  

has  held  in  the  impugned  judgment  that  these  sale  

agreements, which have no details with regard to the date of  

execution and were not really  sale deeds, could not have  

been taken into consideration for  determining the market  

value of the acquired land.  We have perused a copy of the  

sale agreement between Balram Shukla and Satnam Singh,  

which has been annexed in Civil Appeal No.3033 of 2008 as  

Annexure P-13 and we find that the sale agreement does not  

mention the date on which the agreement has been entered  

into.  In the absence of any date of the sale agreement, the  

sale  agreement  could  not  have  constituted  the  basis  for  

determination of the market value of land in 1983 when the  

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land was acquired in the present case.   The Division Bench  

of the High Court, therefore, was right in taking the view  

that Exhibits A-X and A-Y cannot constitute the basis for  

determination of the market value of the acquired land in  

the present case.

12. The learned Additional District Judge has also relied  

on the order of the High Court determining compensation of  

land acquired in the case of Sadhu Singh (RFA No.1207 of  

1984).  The land in the case of Sadhu Singh was acquired  

within the revenue village of Bhatinda for extension of the  

military cantonment by notification dated 29.10.1976 and  

the  High  Court  determined  a  rate  of  compensation  of  

Rs.17/-  per  sq.  yard.   The Additional  District  Judge  has  

given an increase of 12% per annum on this rate of Rs.17/-  

per sq. yard from 29.10.1976 to 24.01.1983 to arrive at the  

market value of the land as on 24.01.1983, i.e. the date of  

notification under Section 4 of the Act in the present case.  

The learned Single Judge of the High Court while sustaining  

the  order  of  the  learned  Additional  Judge,  has  held  that  

although the exact location of the land is not given in Sadhu  

Singh’s  case,  yet  the  same  can  be  made  the  basis  for  

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determining the market value of the acquired land in the  

present case as the land acquired in the Sadhu Singh’s case  

was within municipal limits of Bhatinda.  In our considered  

opinion, the reliance on order of the High Court passed in  

Sadhu Singh’s case by the learned Additional District Judge  

and the learned Single Judge was not correct because from  

the site plan it appears that the land in Sadhu Singh’s case  

which was acquired for military cantonment was far away  

from  the  land  acquired  in  the  present  case  which  was  

located adjacent to the colony of NFL and other colonies.  

From the site plan, we also find that compared to the land  

acquired in Sadhu Singh’s case, the land acquired in Karam  

Singh’s case was much more nearer to the land acquired in  

the present case.

13. The Division Bench of the High Court has thus relied  

upon its order in the case of Karam Singh (RFA No.906 of  

1988)  passed  on  08.11.1989  which  was  marked  in  the  

reference proceedings as Ext. A-15.  The land in the case of  

Karam  Singh  was  acquired  for  a  municipal  park  by  

notification issued under Section 4 of the Land Acquisition  

Act  on  30.08.1983  and  is  located  within  the  municipal  

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limits.   In Karam Singh’s case there was evidence of three  

transactions  of  sale  of  the  same  date  i.e.,  29.06.1973,  

showing that some land in the area had been sold at the  

rate of Rs.100/- per sq. yard, some land in the area had  

been sold at Rs.70.30 paise per sq. yard and some land in  

the area had been sold at the rate of Rs.62.50 per sq. yard  

and  the  Court  took  the  average  rate  of  the  three  sale  

transactions which worked out to Rs.80/- per sq. yard.  The  

Court then added an increase of 12% per annum for ten  

years to arrive at the value of the land in the year 1983  

when the land was acquired and the figure worked out at  

Rs.176/- per sq. yard.  For finding out the market value of  

the land acquired in the present case, the Division Bench of  

the High Court applied a cut to this rate of Rs.176/- per sq.  

yard and determined the rate of Rs.120/- per sq. yard as  

just  and  reasonable  value  of  the  land  acquired  in  the  

present case considering the location and potentiality of the  

acquired land.   The  Division Bench has,  therefore,  taken  

into consideration the fact that the land in Karam Singh’s  

case was located in the heart of the Bhatinda town, whereas  

the land acquired in the present case was slightly away from  

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the  heart  of  the  town  and  was  located  adjacent  to  the  

existing colony of the NFL and other colonies, namely, the  

residential  colonies  of  the  thermal  plant,  Sucha  Singh  

Colony,  Amar Singh Colony,  Kheta  Singh Colony,  Mandir  

Colony,  etc.  and  reduced  the  market  value  of  the  land  

acquired in the present case.      

14.   We may now consider whether any further cut to the  

rate of Rs.120/- per sq. yard as determined by the Division  

Bench of  the High Court  in  the  impugned judgment  was  

called  for,  considering  the  size  and  quality  of  the  land  

acquired in the present case.  Regarding the size of the land,  

the argument of learned counsel for the appellant is that the  

size of the land acquired in the case of Karam Singh was .04  

acres (1058 sq. yards), whereas the size of the land acquired  

in the present case is acre 29.68 (143651 sq. yards).  But on  

a reading of the order dated 08.11.1989 of the High Court in  

the case of Karam Singh (RFA No.906 of 1988) marked as  

Annexure Ext.A-15, we find that the High Court has taken  

into consideration three sale deeds of the same date to work  

out the average rate of the land at Rs.80/- per sq. yard in  

1973 and applied an increase of 12% per annum to arrive at  

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the figure of Rs.176/- per sq. yard, but has not mentioned  

the size of the lands which were sold under the three sale  

deeds.  In the absence of the size of the plots of land which  

were  sold  under  the  sale  deeds,  which  were  taken  into  

consideration  by  the  High  Court  while  determining  the  

market rate of the land in Karam Singh’s case, it is difficult  

to  accept  the  contention  of  the  learned  counsel  for  the  

appellant that the determination of market value of the land  

in Karam Singh’s case was in respect of land which was sold  

was much smaller in size as compared to the land which  

was acquired in the present case.  Regarding quality of the  

land acquired in the present case, learned counsel for the  

appellant  submitted that  the  land in Karam Singh’s  case  

was  developed  urban  land  meant  for  residential  and  

commercial  purpose,  whereas  the  land  acquired  in  the  

present case was low, water-logged agricultural land.  We,  

however,  find from the evidence of Basant Singh Patwari,  

Land  Acquisition,  Industries  Department  Punjab,  

Chandigarh, examined as RW-1, that the level of the land,  

which was acquired  in the  present  case,  was that  of  the  

existing  land  of  the  township  of  NFL.   The  learned  

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Additional District Judge in his order dated 29.04.1991 has  

in fact held, after considering all the oral and documentary  

evidence adduced by the parties, that the market value of  

the land acquired in the present case has to be determined  

on the basis of its potentiality for urban development and  

not on the basis of the revenue or agricultural classification  

of  the  land  as  done  by  the  Collector  because  the  land  

acquired in the present case had a great potential value for  

urban purposes, i.e. commercial, industrial and residential.  

We, therefore, do not find any merit in the submission of  

learned counsel for the appellant that a cut of 60% should  

have  been  applied  to  the  rate  as  determined  in  Karam  

Singh’s case considering the larger size and lower quality of  

the land acquired in the present case.  In our opinion, the  

cut applied by the Division Bench of the High Court in the  

impugned  judgment  so  as  to  reduce  the  value  from  

Rs.176/- per sq. yard to Rs.120/- per sq. yard was just and  

reasonable in the facts of the present case.   

15.  In  the  result,  we  do  not  find  any  merit  in  these  

appeals  and  we  dismiss  the  same  and  award  a  cost  of  

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Rs.10,000/-  in  favour  of  the  respondents  in  each  of  the  

appeals.            

.……………………….J.                                                             (Cyriac Joseph)

………………………..J.                                                             (A. K. Patnaik) New Delhi, November 15, 2011.    

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