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REPORTABLE

IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  10438  OF 2013  (Arising out of SLP (C) No. 12003 of 2013)

Pehlad Ram & Ors.                                    …Appellants

Versus

Haryana Urban Development Authority & Ors.         …Respondents

O R D E R    

1. Leave granted.

2. This appeal has been preferred against the impugned judgment  

and order dated 28.9.2012 passed by the High Court of Punjab and  

Haryana at Chandigarh in Civil Revision No. 1631 of 2011 (O&M)  

allowing the revision filed by the respondents.   

3. Facts and circumstances giving rise to this appeal are that:

A. The appellants claim to have purchased a plot in Khasra No.  

159/3 situate  in revenue estate  of  Village Lohar,  Tehsil  & District

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Bhiwani (Haryana) on 20.3.1972 from its registered owner Ugar Ram  

but  the mutation of  the same had not  been made in  favour  of  the  

appellants.   

B. A large area of land including the land in dispute was notified  

under  Section  4  of  the  Land  Acquisition  Act,  1894  (hereinafter  

referred to as the `Act’) which was published in the Official Gazette  

on 19.6.1973.   

C. The appellants alongwith others filed claim petition.  The Land  

Acquisition Collector assessed the market value of the land at the rate  

of Rs.24/- per marla vide award dated 20.3.1975.

D. On the basis of the other judgments and assessment orders, the  

value  of  the  land  of  the  appellants  had  been  determined  by  the  

Reference Court  as  well  as  by the High Court,  taking in view the  

provisions of Section 28-A of the Act, at the rate of Rs. 9 per Square  

Yard.

4. The appellants preferred an appeal before this Court and when  

the matter  was heard by this  Court  on 28.10.2013, the Court  after  

hearing learned counsel for the appellants, as well for the State, issued  

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show cause notice to the appellants, why the amount of compensation  

awarded to the appellants be not reduced. The relevant part of the said  

order dated 28.10.2013 reads as under:

“Issue  show  cause  notice  to  the  petitioners  why  this   Court  should  not  reduce  the  amount  of  compensation   awarded by the Reference Court in view of the judgment   of this Court in  The Dollar Company vs. Collector of   Madras,  AIR 1975 SC 1670 which clearly stipulates that   in case the land acquisition proceedings stood initiated   in  close  proximity  of  purchase,  then the  consideration   paid  by  the  purchaser  is  the  best  evidence  of  land's   valuation.

In the instant case, the petitioners have purchased   the land on 20.3.1972 and stood notified under Section 4   of the Land Acquisition Act, 1894 on 19.6.1973 i.e. after 15  months  of  purchase.  The  petitioners  have  not   disclosed  anywhere  what  was  the  amount  of   consideration  they  have  paid  for  the  said  land  as  on   20.3.1972.  Therefore,  everything  had  been  decided  on   extraneous consideration by all the courts till now.

In view thereof,  petitioners are directed to show  cause why this Court should not re-determine the whole   amount of compensation as required under the aforesaid   judgment of this Court…”  

5. In response thereto, the appellants submitted a reply to the said  

show cause notice dated 28.10.2013 and tried to persuade the Court  

that the amount of compensation should not be reduced.  However,  

Shri Sukhdev Sharma, learned counsel for the appellants,  has fairly  

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conceded  that  in  view  of  judgment  of  this  Court  in  The  Dollar  

Company (Supra), the award amount has to be reduced.   

6. It is further submitted by the learned counsel for the appellants  

that  this Court  may award the compensation taking note  of  annual  

increase in the market value of the land at the rate of 15 per cent.  

Such a view taken by the learned counsel for the appellants stands  

fully justified in terms of the judgments as referred herein below.  

7.      In  Hindustan Oil  Mills  Ltd.  v.  Special  Deputy Collector  

(Land Acquisition) AIR 1990 SC 731 this Court held that generally  

the value of the land doubles in five years and opined that increase of  

20% per year is a normal formula.  

8. In State of Haryana v. Gurbax Singh & Anr. (2008) 11 SCC  

65, this Court approved the principle adopted by the High Court while  

assessing  the  market  value  under  Section 23 of  the Act,  or  giving  

marginal  enhancement  of  compensation  @12% per  annum for  two  

years  since acquisition,  comparing the value with the land notified  

under Section 4 of the Act, two years prior to the notification under  

Section 4 involved in the case.

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9. In  The  General  Manager, ONGC  Ltd.  v.  Rameshbhai  

Jivanbhai Patel & Anr., (2008) 14 SCC 745, this Court has applied  

the  same formula  giving cumulative  rate  of  escalation  @7.5% per  

annum,  though  found  that  cumulative  increase  of  10  to  15% was  

permissible.   

10. Similarly, in  Sardar Jogender Singh v. State of U.P.  (2008)  

17  SCC 133,  the  same  principle  had  been  applied  by  this   Court  

giving 10% increment per year.  Thus, total increase in ten years to  

the tune of 100% was found justified.  

11. In Lal Chand v. Union of India (2009) 15 SCC 769, a similar  

formula had been applied, however, as the previous sale or acquisition  

was not available for last  20 years,  this Court did not approve the  

formula giving annual increment for 20 years continuously.          

12. In Satish & Ors. v. State of U.P. & Ors. (2009) 14 SCC 758  

the  same  principle  was  followed  adopting  the  formula  of  10%  

increase per year.  

13. This Court in  The Dollar Company (Supra) has categorically  

laid down that in case the land of the claimant has been acquired in  

close vicinity of the purchase, the consideration paid by such claimant  

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to the vendor is the best evidence of the market value of the land. The  

court should not award more unless it is possible to reach a different  

conclusion. Even the appellate court should not interfere in such a fact  

situation  unless  the  judgment  is  based  on  wrong  application  of  

principle  or  because  some  important  point  affecting  valuation  has  

been overlooked or misapplied.  The consideration paid by the owner  

only a  few months ago presents bonafide evidence of value subject to  

certain  exceptions  such  as  relationship  of  the  parties,  market  

conditions and terms of sale and the date of sale.   

14. We are also of the view that in case a purchaser has not shown  

the exact amount of consideration paid by him in the sale deed to save  

the  stamp  duty  under  the  Registration  Act,  1908,  such  dishonest  

vendee is not required to be protected by the court.  

15. It is also evident from the law referred to hereinabove that a  

cumulative increase of 10 to 15 per cent per year in the market value  

of the land may be accepted unless the State agencies or acquiring  

authority prove otherwise.  

16. In view of above, the award as modified to the extent that the  

appellants would be entitled to a sum of Rs. 5.90/- per Sq.Yd. or it  

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may be  taken  as  Rs.  6.00/-  per  Sq.Yd.,  as  the  property  had  been  

acquired only after 15 months from the date of purchase.   

The appeal is disposed of accordingly.   

              …….………………….…J.                                     (Dr. B.S. Chauhan)

                          ………………………….J.                  (S.A. Bobde)

New Delhi,

November 18, 2013

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