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PETITIONER: STATE OF MAHARASHTRA ETC.

       Vs.

RESPONDENT: DIGAMBER BHIMASHANKAR TANDALE& ORS. ETC.

DATE OF JUDGMENT:       02/02/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. G.B. PATTANAIK (J)

CITATION:  1996 SCC  (2) 583        JT 1996 (2)   528  1996 SCALE  (2)271

ACT:

HEADNOTE:

JUDGMENT:                             WITH              CIVIL APPEAL NOs. 3377-79 of 1996           (Arising out of SLP (C) Nos. 327-29/95)                             AND               CIVIL APPEAL NO. 3380-82 OF 1996       [Special Leave Petition (C) NO. 4152-54 of 1996]                          O R D E R      Delay condoned. Leave granted.         We  have  heard  the  counsel  on  both  sides.  The notification under  section 4(1) of the Land Acquisition Act was  published  in  the  State  Gazette  on  July  14,  1977 acquiring 12.50  acres of  land for extension of the Thermal Power Station  at Parali  Vaidyanath Municipality.  The Land Acquisition Officer  in his award dated 20.9.1978 determined the compensation  at Rs.3,000/-  per acre,  namely, 72.5 per Area. On  reference, the  Additional District  Judge by  his award  and   decree  dated   April  27,  1987  enhanced  the compensation at Rs.5/- per Sq. ft. On appeal, the High Court while confirming  the said  determination, reduced  l/3rd of the amount  towards development  charges. Thus these appeals by special  leave by the State 35 well as by the Electricity Board and  also by  the claimants  against the  deduction of 1/3rd amount. Thus these appeals are heard together.      The only  question  is:  what  will  be  the  just  and adequate compensation  to which  the lands  are  capable  to fetch  in   open  market?   It  is   settled  law  that  the determination of compensation on sq. ft. basis is an illegal principle followed  by the  courts. The  reference Court  on feats of  imagination has  done it. When 12.50 acres of land is sought  to be  acquired, no  reasonable prudent purchaser would come  forward to  purchase the  land on  the  sq.  ft. basis. It  would be  incredulous to believe such a purchase. Therefore, the  premise on which the reference Court and the High Court  had proceeded  to determine  the compensation is obviously illegal.  It is not in dispute that as on the date

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of the  notification,  the  lands  were  agricultural  lands though situated  within the  municipal limits. It is also in evidence that  the lands were converted for non agricultural purpose. But  as on  the date  of notification, there was no development in  that area.  The oral evidence was adduced in which it  was shown that upto a distance of 3/4th km. to the lands there was development. Some illegal constructions were made on the lands. Under those circumstances, as on the date of the  notification there  was no  potential value  to  the lands though  converted  into  non-agricultural  lands.  The determination of  the  compensation  on  the  basis  of  the potential value is also illegal.      The reference  Court has relied upon several sale deeds dated 14.1.1976, Exs.48, 49 and 50 of a small extent of land sold on  sq. ft.  basis and  on that  premise the  Court had determined the  compensation. It  is settled law that when a large extent  of land is acquired, the sales of small pieces of land  though genuine,  cannot be relied upon as the basis to  determine   the  compensation.   Accordingly,  they  are excluded. Having excluded those documents, there is no other acceptable evidence  to determine  compensation on the basis of sq.  yd. or  sq. mtr.  Accordingly, it  is not capable to determine the compensation on sq. yd. or sq. mt. basis since the lands  are not  possessed of potential value as building site as on the date of notification.      The question  then is  what would be the just, fair and adequate compensation  the lands can fetch? In the facts and circumstances and  in view of the statement made by the Land Acquisition Officer  that the lands are abutting the Thermal Power Station,  the possibility  of extension  for  building purpose  can   also  be   easily  ruled  out.  However,  the compensation for  the lands  situated near the Thermal Power Station can be fixed at Rs.40,000/- per acre.      Accordingly, the  appeals of  the State  as well as the Electricity Board  are allowed  and that of the claimants is dismissed. The  claimants are  entitled only  to payment  of solatium and  interest under the Act as amended by Act 68 of 1984. They  are entitled to interest at 9% per annum for one year on  enhanced  compensation  from  the  date  of  taking possession and  thereafter at  15% till the date of deposit. They are also entitled to payment of solatium at 30% on the enhanced compensation.  However, they  are not  entitled  to payment of  additional amount  under section  23(1-A) of the Land Acquisition Act. No costs.