Dy. Collector, Land Acquisition, Gujarat & Anr. versus Madhubai Gobarbhai & Anr.

s.23 - Acquisition of land that would submerge in river c water in process of construction of a dam on the river - Compensation - Computation of - Criteria for - Positive and negative factors to be taken into consideration - Explained - Exemplars considered - Market value of lands acquired determined accordingly. D

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D

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s. 23 - Acquisition of land with construction - Determination of compensation - HELD: For extent of land on which godowns stand, separate compensation need not be paid, when compensation based on rental value of godowns is being paid - Land Acquisition Officer to calculate the compensation accordingly following the method adopted by High Court.

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E

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Large tracts of agricultural and non-agricultural lands situate on bo!h sides of river Thebi in three villages, namely, Amreli, Baxipure and Giriya in the State of Gujarat were acquired under the Land Acquisition Act, 1894 as the said area would sub-merge in water in the process of construction of a dam on river Thebi. The area on eastern bank of the river including the lands in village Giriya :was developed whereas the area on the weste.rn bank including the lands of villages Baxipura and Amreli was under developed. A portion of the acquired land also fell within municipal limit of Amreli town. Compensation

F

G

523

H

524 SUPREME COURT REPORTS [2009] 11 S.C.R.

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¶21

A was awarded to land owners at different rates according to the lands falling in different groups. For fands covered under Group I, compensation was awarded at the rate of Rs.75/- per sq. mtr. for the lands falling in Group II, the Special Land Acquisition Officer awarded compensation B at the rate of Rs.12/- per sq. mtr. for 'Baayat' land, Rs.8/per sq. mtr. for 'Jirayat' land, and Rs.50/- per sq. mtr. For non-agricultural land. The reference court awarded compensation at uniform rate of Rs.400/- per sq. mtr. The High Court maintained the compensation for none agricultural land, but reduced it to Rs.300/- per sq. mtr. for agricultural land. For the lands of Group Ill, the Land Acquisition Officer awarded compensation at Rs.50/- per sq. mtr. for agricultural land, and Rs.150/- for nonagricultural land. The reference court enhanced 0^{compensation to Rs.160/-per sq. mtr. for agricultural} land, and Rs.240/- for non-agricultural land. The High Court confirmed the order.

¶22

Disposing of the appeals, the Court

¶23

E HELD: 1.1. Determining the market value of the land acquired would depend upon a large number of positive and negative factors. Criteria for determinatio'1 of the market value of the agricultural land and homestead land may be different. Amount of consideration mentioned in F a deed of sale executed in respect of similarly situated land near about the date of issuance of acquisition notification is also a relevant factor. In the absence of any such exemplars the market value can be determined on yield basis or in case of an orchard on the basis of G number of fruit bearing trees. [Para 24 and 25] [543-G, H; 544-D]

¶24

Viluben Jha/ejar Contractor vs. State of Gujarat (2005) 4 sec 789, relied on.

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H

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l

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A

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DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 525 ANR. v. MADHUBAI GOBARBHAI & ANR.

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Group I

¶30

1.2. In view of the Constitution Bench decision* an application filed by the appellant for placing additional documents on record was allowed by this Court's order dated 23.10.2008. Therefore, the said transactions as well would be taken into consideration. [Para 23] [543-F]

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8

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*Cement Corporation of India Ltd. etc. etc. v. Purya and others etc. etc. (2004) 8 SCC 270; P. Ram Reddy and Ors. Vs. Land, Acuisition Officer, Hyderabad Urban Development Authority, Hyderabad and Ors. (1995) 2 SCC 305; Ranvir C Singh and another v. Union of India (2005) 12 sec 59 and Land Acquisition Officer & Manda/ Revenue Officer v. V. Narasaiah (2001) 3 SCC 530, relied on .

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. '

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1.3. In the instant matters, the High Court mixed up o the awards made in respect of the lands situated on the eastern side of the River with that of the western side. Admittedly, there was no development on the western side of the river. There was no railway line connecting the village with any big city nor was there any State highway E passing through the area. It has also not been shown that two crops were grown in the land. The High Court proceeded on the basis that although the acquired lands were situated on one side of the river, in view of the fact that entire acquired land was to be submerged, no F justification can be made in regard to the nature of the land. The High Court erred in holding that distance of a few kilo meteFs from the Amreli town would not matter. The High Court furthermore opined that the lands in village Baxipura were also fertile and thus no discrimination can be made. [Para 32,36 and 40-41] [549G G; 548-8, C, D; 550-F, G]

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1.5. The variation in the price of the land within a few years is a matter of great significance. It is true that no single factor would be decisive for the purpose of arriving H

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526 SUPREME COURT REPORTS

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(2009] 11 S.C.R.

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¶39

A at the market value of the land. But in a case of this nature a holistic view is required to be taken. It is wholly improper to ignore the distinction between the agricultural land and the non-agricultural land. Even in the same area, value of the agricultural land and the nonB agricultural land may be considerably different. For the

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said purpose, existence of the road, railway station, airport, schools, colleges, hospitals etc. play an important role. It is not a case where developed area and undeveloped area or for that matter non-agricultural and c agricultural lands are merely divided by a road. It is also not a case where the entire area is known and treated to be one and the same, although a part of it may be governed by the Panchyat and the other part comes within a municipal area. It stands admitted that the 0^{acquired land for all intent and purport is divided into two} parts. The eastern part and only a small part of the western side is within the municipal area, and the other, consisting of agricultural lands, is outside the municipal area. It furthermore, stands admitted that the town has developed only on eastern side of the river and E agricultural lands are situated on the western side in which there is even no residential house. In a case of this nature, indisputably different criteria and norms are required to be adopted for determination of the market value. [Para 42 and 43] [551-A-F]

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F

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Union of India v. Pramod Gupta (2005) 12 SCC 1; Ranvir Singh v. Union of India, (2005) 12 SCC 59; Karimbanakkal Sulaiman (Dead) by L.Rs. v. Special Tahsildarfor K.A.K.P.l.P. (2004) 13 SCC 643; Viluben Jhalejar Contractor v. State of G Gujarat, (2005) 4 SCC 789; Basant Kumar v. Union of India (1996) 11 SCC 542; Satish and Ors. vs. State of U.P. and Ors. (2009) 9 SCALE 632 and National Thermal Power Corporation Ltd. vs. Mahesh Dutta & Ors. (2009) 9 SCALE 591, referred to.

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H

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527

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DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. v. MADHUBAI GOBARBHAI & ANR.

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' -t

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I

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1.6. It has categorically been held by this Court that A ordinarily the entire village should not be treated as one .. unit as 'even in the same village, no two lands command the same market value' as potentially, the fact that land abutting a National Highway or road would command a higher market value vis-a-vis the land which is not so B situated. Potential development and/or likelihood of development are also the factors which have been considered to be relevant. Building potentiality of the land acquired would also be. a relevant consideration. However, the purpose for which the land is sought to be c acquired would also assume some significance. [Para 46,47,51 and 52] [555-D, F; 557-D, E]

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Kanwar Singh v. Union of India (1998) 8 SCC 136 and State of Maharashtra v. Basantibai Mohan/al Khetan (1986) 2 sec 516, referred to.

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D

¶51

1.7. The lands in question are purely agricultural lands. There were no buildings; there was no residential use; there was no factory. No development had taken pla~e-1'1or was any development expected in immediate future. The lands were acquired only for the purpose of submergence. It had thus even no building potentiality. In view of the materials brought on record including the various sale deeds as exemplars, the valuation of the land should be determined at Rs.50/- (Rupees Fifty only) per square meter. [Para 54-55) [557-F, G]

E

F

GROUP- II

·"

3.1. The observations made by reference court regarding price rise due to inflation were wholly G irrelevant. The reference court should sit in the arm chair of a willing and prudent purchaser and put a question to himself as to whether he would offer the same price sought to be awarded for the said land. Besides, the value of agricultural lands could not haye been compared with H

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H

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528

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SUPREME COURT REPORTS

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[2009] 11 S.C.R.

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f-..

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A the value of non-agricultural lands, only because some witnesses stated that there was a potentiality of the said land becoming a developed one. [Para 66 and 71] [569D; 570-D]

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3.2. The price variation and the market value shown B in the two different categories of the land, in the sale transactions relied upon by the claimants, is significant. The price variation between agricultural land and nonagricultural land almost during the same period also is c^{of some significance. It is furthermoreof some interest} to note that within a short period of time, the price of the

¶64

land shot up and that too immediately after the process of acquisition of land had started. It is furthermore important to note that there existed a significant price variation even in regard to the lands situated on Survey D No. 89. which appears to be a very big plot. [Para 76 and 77] [573-D, E]

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3.3. There cannot be any doubt that different potentiality of land in different villages and even in E^{diffetent partsof the same village wouldbeexisting.It} was therefore not proper for the High Court to treat all types of lands situated even in different villages as pertaining to a comparable category. This Court has deprecated the practice of awarding compensation on the F^{basis of anawardmade inregard to a neighbouring land.} It is, however, also true that the court is bound to take into ·consideration the potentiality of the land. [Para 78 and 80] [573-G; 574-C]

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Kanwar Singh & Ors. vs. Union of India (1998) 8 SCC G 136; Basant Kumar v. Union of India (1996) 11 SCC 542; Raghubans Narain Singh v. The Uttar Pradesh Government Through Collector of Bijnor 1967 (1) SCR 489 and Mahabir Prasad Santuka and Ors. v. Collector, Cuttack and Ors [(1987) 1 sec 587, referred to.

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H

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DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. v. MADHUBAI GOBARBHAI & ANR.

529

l

I ~

A

3.5. So far as deeds of sale pertaining to the years A 1988 and 1989 are 'concerned, the same were executed more than three years prior to the date of .icquisition. However, in respect of the deeds of sale pertaining to Survey No. 89, in view of the under-valuation of the lands sold, the Collector fixed the same at the rate of Rs.125/B per sq. mtr. Furthermore, the Collector himself has fixed the premium of Rs.300/- per sq. mtr. for conversion from agricultural land to non-agricultural land. Although the same by itself would not be a safe criterion for determining the market value, both of them may form the c basis for arriving at a reasonable conclusion. [Para 81] [575-C-E]

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B

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3.6. The distance of the lands sought to be acquired apart from other factors from the Highway also plays an important role. Evidence has been brought on record to show that some lands, which are the subject matter of the sale deeds on which reliance has been placed by the claimants, are situated at a distance of 1.5 to 4 kms from the Highway. In that view of the matter, it would be safe to arr!ve at the market value as on the date of acquisition for the non-agricultural lands at Rs.250/- per sq. mtr. So far as the agricultural lands are concerned, even if they had the potentiality of being converted into a nonagricultural lands as on the date of notification, they were agricultural lands albeit in a developed area. The valuation thereof may be determined at 50% of the developed land, that is, at Rs. 125/- per sq. mtr. [Para 82 and 83] [575-F-H; 576-A]

D

E

F

GROUP Ill

G

" ..,,

4.1. The reference court proceeded on the basis that the market value of the land situated in the municipal area was Rs.485/- per square meter at the time of acquisition and, thus, the lands in question being outside the municipal area, the market value thereof should be

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H

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530

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[2009] 11 S.C.R.

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f

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A deducted by 50%, i.e., Rs.2401- per square meter. For determining the value of agricultural land further onethird has been deducted. [Para 99] [584-G-H; 585-A-B]

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4.2. Keeping in view the ratio laid down in the 8^{decisionsof this Court*asalso the materials placedon} record, the amount of compensation for the lands acquired in this matter arrived at by the High Court, that is, Rs.2401- per sq. mtr. for non-agricultural land and Rs.1601- sq. mtr for agricultural land does not warrant any C interference. The High Court, in this regard, has adopted the correct approach particularly in view of the fact that the lands in question are not only situated within a developed area but being situated near Aerodrome, Schools, Hospitals, etc. the market value thereof could not havs been determined at a lesser rate. [Para 102] [586D C-F]

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*Administrator General of West Bengal v. Collector, Varanasi AIR 1988 SC 943, relied on.

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E 5.1. As regards the amount payable for acquisition of 21 godowns and the land, out of the total area of 4250 sq. mtrs of land, 2972 sq. mtrs. is agricultural land and 1278 sq. mtrs. is non-agricultural land on which the godowns have been constructed. Commercial complexes were constructed on it in the year 1984. The F amount of rent of the godowns has been brought on record. The respondents have claimed compensation under various heads, namely, price of the land, loss suffered due to recovery of rent for 2 years of godowns, loss for construction for deep-well, watchman quarter, G etc. [Para 103 and 104] [586-F-G; 587-A]

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5.2. For the extent of land on which the godowns stand, separate compensation need not be paid when compensation with respect to rental income is being paid H for the godowns. The High Court has granted

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DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 531 ANR. v. MADHUBAI GOBARBHAI & ANR.

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compensation, inter alia, applying the multiplier of 10 over A the annual income. The approach of the High Court is correct. [Para 107] [587-E-G]

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Ratan Kumar Tandon & Ors. vs. State of U.P. (1997) 2 sec 161; Airports Authority of India v. Satyagopal Roy and Ors. (2002) 3 sec 527; Assistant Commissioner-cum-Land Acquisition Officer, Bellary vs. S. T. Pompanna Setty (2005) 9 SCC 662; Addi. Special Land .Acquisition Officer vs. Yamanappa Basalingappa Cha/wadi (1994) 3 SCC 323; State of Kera/a vs. P.P. Hassan Kaya AIR 1968 SC 1201; and Special Land Acquisition Officer, Kalinadai (HydroElectric) Project, Dandali, Ultra Kannada District v. Vasant Gundu Bale 1995 Supp (4) SCC 649, referred to.

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B

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C

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5.3. However, keeping in view the ratio of the decisions of this Court and the facts of the case, the decision of the High Court is modified by excluding the payment of separate amount of compensation for the 1278 sq. mtrs. of non-agricultural land in which the 21 Godowns have been constructed and market value for these godowns would be calculated on the rental value. Thus, whereas the market value of the land would be determined at Rs.240/- per square feet, the lands on which the godowns have been constructed, the amount of compensation shall be calculated at the rental value thereof by following the method adopted by the High Court. For the said purpose, the matter is remitted to the Land Acquisition Officer. [Para 113) [589-F-H; 590-A]

D

E

r ,....

Case Law Reference:

1995 Supp. (2) SC 168 relied on para 14 G (1995) 2 sec 305 relied on para 22 (2001) 3 sec 530 relied on para 22

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532 SUPREME COURT REPORTS

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[2009] 11 S.C.R.

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A	(2004)8sec_210_	relied on	para22	''
	(2005)12sec59	relied on	para22
	(2005) 4sec789	relied on	para25
B	(2005) 12sec1	referred to	para45
	(2004) 13sec643	referred to	para45
	(1996)11sec542	referred to	para45
	(1996)11sec542	referred to	para45	•
c	(1998)8sec136	referred to	para47
	(1986)2sec516	referred to	para49
	(2009) 9 SCALE632	referred to	para50
D	(2009) 9 SCALE591	referred to	para50
	1967(1)SCR489	referred to	para80
	(1987) 1sec587	referred to	para80
E	AIR1988SC943	relied on	para101
	(1997)2sec161	referred to	para 106
	(2002)3SCC527	referred to	para 108
F	(2005) 9sec662	referred to	para 109	,..
	(1994)3sec323	referred to	para 110
	AIR1968SC1201	referred to	para111
	1995 Supp(4)SCC64	9referred to	para 112
G of	CIVILAPPELLATEJUR 2000.	ISDICTION:CivilA	ppealNo.204

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From the Judgment & Order dated 23.02.1998 of the High Court of Gujrat at Ahmedabad in First Appeal No. 3119of1997.

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H

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DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 533 ANR. v. MADHUBAI GOBARBHAI & ANR.

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WITH

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A

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C.A. Nos. 213. 214-219, 205-212, 221-324, 325-331, · 4090, 4091 of 2000 & 2973-2978 of 2001.

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S.N. Shelati, Yashank Adhyaru, Dinesh Dwivedi, Hemantika Wahi, L.R. Pujari, Pinky, Somanath and Kirti Renu Mishra for the Appellants.

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8

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Ramesh P. Bhatt, Sunil Kr. Gupta, Sirish Amin, Dattatray Vyas, Manish Sharma, Chirag, M. Shroff, Saroj Raichura, H.A. Raichura, Mukesh Kumar Singh, Dr. Manish Singhvi, Atul Jha, Vikash Kr. Pankaj, Dharmendra Kumar Sinha, Sakesh Kumar, Rameshwar Prasad Goyal for the Respondents.

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C

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The Judgment of the Court was delivered by

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S.B. SINHA, J. 1. These appeals involving common questions of law and fact were taken up for hearing together -t and are being disposed of by this common judgment.

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D

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The State of Gujarat issued diverse notifications for acquisition of a huge tract of lands for construction of a dam over a river known as 'Thebi'. The lands sought to be acquired were spread over in three villages, namely, Amreli, Baxipur and Giriya. Whereas villages Amreli and Baxipur are situated on the western side of river and within the municipal limit of the town of Amerli; village Giriya is on the eastern bank thereof and outside the municipal limit of the said town Amreli.

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E

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F

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Amreli is the headquarters of the District Amreli. It is a well developed town. A National Highway known as "Amreli - Chittal Road" passes through the town of Amreli.

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G

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The residents of the town enjoy the facilities of transportation, hospitals, schools, colleges,_telephone, etc. It is, "" however, admitted that the entire development has taken place on the eastern bank of the river and not on the western bank. The villages situate on the western bank, however, admittedly

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534

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[2009] 11 S.C.R.

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•

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A are wholly undeveloped. The lands under acquisition are . agricultural lands. The land upon acquisition were to be submerged under water.

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The Land Acquisition Officer made three different 8^{awards for three different villages.}

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For agricultural lands situate in village Baxipur, which are the subject matters of judgment and order dated 23.02.1998 passed in F.A. No. 3119/1997 and F.A. No. 3120/ 1997 and judgment and order dated 4.5.1999 passed in F.A. C Nos. 6184-6203/1995 and other connected appeals, compensation was awarded at the rate of Rs.75/- per square meter.

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Out of 350 land owners, however, only 156 land owners 0^{filed applications for reference before the Collector in terms of} Section 18 of the Land Acquisition Act, 1894 (hereinafter referred to as, "the said Act").

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The Reference Court awarded compensation calculating the market value thereof at the rate of Rs. 75/- per E square meter in respect of lands situate in Baxipur village (western side of river Thebi), Giriya village (eastern side of river Thebi) and Amreli village (western side of river Thebi). So far as the lands situate within the Amreli town, which is within the municipal area and situate on the eastern side of the river F comprising of residential and commercial area which was developed since 1984, are concerned; the Land Acquisition Officer awarded compensation at the rate of Rs.50/- per square meter in respect of agricultural lands, but the Reference Court and the High Court awarded compensation at the rate of G Rs.160/- per square meter of land. For the same area in respect of non-agricultural lands, the Land Acquisition Officer awarded compensation at the rate of Rs.150/- per square meter whereas the Reference Court as also the High Court awarded compensation at the rate of Rs.240/- per square H meter.

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F

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DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 535 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

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So far as acquisition of lands which are subject matter of C.A. No. 325-331/2000, situated in village Giriya are concerned; whereas the Land Acquisition Officer awarded compensation at the rate of Rs.12/- per square meter in respect of agricultural lands and Rs. 50/- per square meter in respect of non-agricultural lands, the Reference Court awarded compensation for both categories of land at the rate of Rs.400/ - per square meter, the High Court, however, while upholding the said amount of compensation in respect of non-agricultural lands reduced the amount of compensation to Rs.300/- per square meter for agricultural lands.

A

B

c

Aggrieved by and dissatisfied with the aforementioned judgments, the State of Gujarat is before us. An appeal has also been filed by some of the claimants owning non-agricultural lands and raised constructions for use of the same as godown.

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D

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.. 11. We may deal with the relevant facts and submissions made before us in each group separately.

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GROUP -1

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With a view to appreciate the rival contentions of the^E· parties, we may notice heretobelow the number of matters and the other relevant facts for our purpose which are involved in Group -I wherein compensation has been awarded at the rate of Rs. 75/- per square meter

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Group No.	Total matters	C.A.No.	F.A.No.	Notification Section4 dated	Date <i Judgment
1	1	204/2000	3119/1997	5.6.1993	23.2.1998
2	·1	213/2000	3120/997	17.9.1992	23.2.1998
3	20	221-240/2000	6184- 6203/1995	15.3.1990	4.5.1999
	2	241-242/2000	5289- 5290/1996	15.3.1990	4.5.1999

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SUPREME COURT REPORTS [2009] 11 S.C.R.

A

B

c

7	243-249/2000	269- 275/1997	15.3.1990	4.5.1999
11	250-260/2000	910- 920/1996	15.3.1990	4.5.1999
34	261-294/2000	1017- 1050/1996	15.3.1990	4.5.1999
7	295-301/2000	7-13/1997	20.9.1990	4.5.1999
2	302-303/2000	2358- 2359/1997	15.3.1990	4.5.1999
15	304-318/2000	1880- 1894/1997	10.12.1992	4.5.1999
6	319-324/2000	2061- 2066/1997	10.12.1992	4.5.1999
4 1	4090/2000	2546/1997	15.3.1990	4.5.1999
5 1	4091/2000	1166/1997	8.8.1990	4.5.1999

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D

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We may, at the outset, also notice that the Reference Court and High Court refused to take into consideration a large number of deeds of sale (Exh. 86 to 100) produced by the State inter alia relying on or on the basis of the decision of this Court E in P. Ram Reddy and Ors. v. Land Acquisition Officer, Hyderabad Urban Development Authority, Hyderabad and Ors (1995) 2 sec 305, the same were not admissible in evidence. As for the purpose of proving the same, neither the vendor nor the vendee in respect of the said deeds of sale had F been examined. An application for adduction of additional evidence filed before us has been allowed.

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.,.

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Mr. S.N. Shelati, learned Senior Counsel appearing on behalf of the State would submit:

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G (i) The. Reference Court and the High Court committed a serious error in not exhibiting true copies of the Sale Deed (Exhs. 86 to 100) in view of the decision of this Court in P. Ram Reddy and Ors. v. Land Acquisition Officer, Hyderabad Urban Development Authority, Hyderabad and Ors.

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H

•

537

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. v. MADHUBAI GOBARBHAI & ANR. [S.S. SINHA, J.]

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•

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(1995) 2 SCC 305 having been overruled in Land Acquisition Officer and Manda/ Revenue Officer v. V. V. Narasaiah [(2001) 3 SCC 530] and Cement Corporation of India v. Purya & ors. [(2004) 8 SCC 270]. Cement Corporation has also been followed by this Court in Ranvirsingh v. Union of India (2005) 12 sec 59.

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A

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B

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.. (ii) The Reference Court and the High Court awarded a grossly high value towards compensation of the acquired lands by misapplying the principle of c valuation and adopting a wrong method of valuation and thus, committed a manifest error.

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..

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(iii) While making the award, the Reference Court as also the High Court failed to take into consideration the fact that the lands of village Baxipur being situated on western bank of river Thebi far from village Amreli as also the fact that geographic condition of the eastern bank of river Thebi is absolutely different vis-a-vis the lands situated on the western bank. Whereas the lands situated on the eastern bank are mostly converted into nonagricultural lands; the lands situated on the western bank of river Thebi are only agricultural lands and in that view of the matter it is impermissible in law to compare the lands situated on the western bank of the river with those on the eastern bank particularly when even no residential premises have been constructed thereon. The lands situated on the western bank of the river Thebi having not been converted into non-agriculture land and there being hardly any scope for any devel9pment and furthermore in view of the purpose for which acquisition has been made, namely, submergence of the land under water, the Reference Court as also the High Court must be held to have committed

D

E

F

G

H

538 SUPREME COURT REPORTS

[2009] 11 S.C.R.

A

a serious error in comparing the lands with agricultural lands situated on the western bank with the non-agricultural lands situated on the eastern bank of the river Thebi.

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(iv) The Land Acquisition Officer having considered the

¶191

B comparable sales of agricultural lands both on the western bank and eastern bank as also sale of non-agricultural lands and having awarded compensation at the rate of Rs.350/- per Are for Jirayat and Rs.500/- per Are for irrigated lands and,

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c . thus, having considered all relevant factors, the same should not have been interfered with by the Reference Court as well as by the High Court.

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(v) There being no reliable evidence of comparable

¶194

D instances or to show the actual yield from the land and, thus, the land holders having not been able to discharge the burden of proof, the amount of compensation awarded by the Land Acquisition Officer should be held to have been fair and

¶195

E adequate in view of the decisions of this Court in Special Land Acquisition Officer vs. Sidappa Tumari [1995 Supp. (2) SC 168 (Para 22).

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E

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(vi) The Reference Court and consequently the High Court without any material on record awarded

¶198

F compensation at the rate of Rs.75/- per square meter in respect of agricultural lands which admittedly are situated in an undeveloped area and, thus, committed a serious error of law.

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G

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H

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(vii) The Reference Court ought not to have disregarded the distance between the "Amreli - Chittal Road" and the village in question which is 1.5 kilometers to 2 kilometers and, thus, committed a serious error in relying upon the sale instances being Exhs.35 to 40 which were in respect of the lands adjacent to

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DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 539 ANR. v. MADHUBAI G03ARBHAI & ANR. [S.S. SINHA, J.]

¶205

"Amreli - Chittal Road" for the purpose of holding A that the amount of compensation awarded by the Land Acquisition Officer was unjustified.

¶206

(viii) Ignoring the distance of 1.5 to 2 kilometers (holding it to be of not much consequence by the High Court) B

¶207

for the purpose of ascertaining the true market value of the land situated in an undeveloped area was wholly erroneous particularly in view of the fact that the witnesses examined on behalf of the respondents categorically stated that there was no c likelihood that the said area would be developed in future.

¶208

'

¶209

...

¶210

(ix) The High Court furthermore should not have failed to take into consideration the evidence of Jerambhai Devsinhbhai (Exh. 12) who had D categorically admitted that except Oil Mills there was no other industry in village Amreli and there was neither any State High Way passing through the said village nor there was any railway connection. Even witness Bhagvandas had E admitted that between the dam and Pratappura area there were no residential houses. Similarly witness Bharatbhai K.Mehta had admitted that he had purchased the land for his own purpose, namely professional and residential purpose. F

¶211

F

¶212

(x) The Reference Court as also the High Court should not have relied upon the valuation report proved by Bhikhabhai Rami who in no uncertain terms had admitted that he had not seen any document in respect of surrounding lands and furthermore had not taken into consideration the deeds of sale mentioned in the award and moreover there was neither any road facility available nor any residential house could 'be traced out and there was no possibility of any industrial development also on the

G

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SUPREME COURT REPORTS

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•

A

1

western side of the river.

¶223

B

¶224

(xi) The Reference Court as also the High Court committed a serious error insofar as they failed to take into consideration that the land owners failed to discharge their burden to show that the land in question had any potentiality of development.

¶225

Mr. R.P. Bhatt learned Senior Counsel appearing on behalf of the respondents, on the other hand, would submit:

¶226

c i. As upon perusal of the award made by the Land Acquisition Officer itself it would be evident that the entire area is a developed one and the land owners were progressive farmers, no infirmity can be said to have been committed in comparing non-

¶227

D agricultural lands with agricultural lands particularly when in respect of the lands situated in one area he had granted compensation at the rate of Rs.50/ - per square meter, there was absolutely no reason as to why the award at the rate of Rs.3.50 per square meter for non-irrigated lands and Rs.5/- per

¶228

E square meter for the irrigated lands should be awarded.

¶229

E

¶230

•

¶231

ii. For determining a just and fair amount of compensation, no sole decisive factor existed and

¶232

F each case was required to be considered on its own merit. However, when such determination can be made upon applying more than one factor, the appellate court should not have interfered therewith even if another view was possible.

¶233

G

¶234

H

¶235

iii. Location of a land although material keeping in view the fact that for all intent and purpose all the three villages are part of one town, only because a part of the acquired land is situated at a distance of 1.5 to 2 kilometers, the sale instances in respect of

¶236

"

¶237

:

¶238

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 541 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

¶239

developed area can be applied subject of course to such deduction as is applicable in respect thereof.

¶240

Notifications for acquisition of different parcels of land were issued on diverse dates.

¶241

Indisputably the purpose of acquisition was construction of a dam over river Thebi. The lands acquired are situated in three villages. Nature of lands acquired was both agricultural and non-agricultural. Some are situated in the urban area which were well developed and some were not completely developed and mainly agricultural lands.

¶242

The lands at Baxipur which are non-agricultural lands and situate on the Western bank of river Thebi, indisputably were agricultural lands. The purpose for their acquisition was that the said lands would be submerged in water.

¶243

It is also not in dispute that various parts of the village Giriya and Amreli are within the municipal limits while only a portion of the lands situate in village Baxipur is within the municipal limit.

¶244

The parties hereto in support of their respective cases relied upon a large number of documents including deeds of sale. A large number of witnesses including some experts were examined in the matters.

A

B

C

D

E

F

We have noticed hereinbefore the reasonings of the Land Acquisition Collector; the Reference Judge as also the High Court for arriving at their respective opinions.

¶252

The learned Reference Judge, however, rejected the deeds of sale produced by the acquiring authority inter alia on the premise that to prove the same neither, vendor or the vendee thereof had been examined. For the said purpose, it relied upon a decision of this Court in P. Ram Reddi v. Land Acquisition Officer, (Supra). The said decision of this Court,

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SUPREME COURT REPORTS

¶257

[2009] 11 S.C.R.

¶258

G

¶259

A however, has since been reversed inter alia by a Three Judge Bench of this Court in Land Acquisition Officer & Manda/ Revenue Officer v. V. Narasaiah, [ (2001) 3 SCC 530 ]. Later, a Constitution Bench of this Court in Cement Corporation of India Ltd. etc. etc. v. Purya and others etc. etc., [ (2004) 8 SCC B^{270 ],while interpreting Section 51-A of the Act opined that the} said provision seeks to make an exception in regard to proving of sale deeds stating :-

¶260

c

¶261

"25. Section 51-A of the Land Acquisition Act seeks to make an exception to the aforementioned rule.

¶262

In the acquisition proceedings, sale deeds are required to be brought on record for the purpose of determining market value payable to the owner of the land when it is sought to be acquired.

D

E

F

Although by reason of the aforementioned provision the parties are free to produce original documents and prove the same in accordance with the terms of the rules of evidence as envisaged under the Indian Evidence Act, the LA Act provides for an alternative thereto by inserting the said provision in terms whereof the certified copies which are otherwise secondary evidence may be brought on record evidencing a transaction. Such transactions in terms of the aforementioned provision may be accepted in evidence. Acceptance of an evidence is not a term of art. It has an etymological meaning. It envisages exercise of judicial mind to the materials on record. Acceptance of evidence by a court would be dependent upon the facts of the case and other relevant factors. A piece of evidence in a given situation may be accepted by a court of law but in another it may not be.

¶267

..

¶268

Secticn 51-A of the LA Act may be read literally and having regard to the ordinary meaning which can be attributed to the term "acceptance of evidence" relating to transaction evidenced by a sale deed, its admissibility in

¶269

H

¶270

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 543 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

¶271

•

¶272

evidente would be beyond any question. We are not A oblivious of the fact that only by bringing a documentary evidence in the record it is not automatically brought on the record. For bringing a documentary evidence on the record, the same must not only be admissible but the contents thereof must be proved in accordance with law. B But when the statute enables a court to accept a sale deed on the records evidencing a transaction, nothing further is required to be ,done. The admissibility of a certified copy of sale deed by·itself could not be held to be inadmissible as thereby a secondary evidence has been brought on c record without proving the absence of primary evidence. Even the vendor or vendee thereof is not required to examine themselves for proving the contents thereof.This, however, would not mean that the contents of the transaction as evidenced by the registered sale deed 0 would automatically be accepted. The legislature advisedly has used the word "may". A dis_9retion, therefore, has been conferred upon a court to be exercised judicially i.e. upon taking into consideration the relevant factors.

¶273

' (See also Ranvir Singh and another v. Union of India, - [(2005) 12 sec 59 J.

¶274

E

¶275

In view of the aforementioned Constitution Bench decision we allowed an application filed by the appellant for placing additional documents on record by our order dated 23.10.2008. We, therefore, are required to take into consideration the said transactions as well.

¶276

F

¶277

The core question which arises for our consideration is what principles should be applied for determining the market value of the land. It is now a well settled principle of law that the determination of the market value of the land acquired, indisputably would depend upon a large number of factors, nature and quality of the lands is one of them. The norms which are required to be applied for determination of the market value of the agricultural land and homestead land may be different

¶278

G

¶279

H

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SUPREME COURT REPORTS

[2009] 11 S.C.R.

544

F

A In given cases location of land and in particular, closeness thereof from any road or high-way would play an important role for determination of the market value wherefor belting system may in appropriate cases have to be resorted to. The position of the land, particularly in rainy season, existence of any B building etc. also plays an important role. A host of other factors including development in and around the acquired land and/or the potentiality of the development will have a bearing on determination of the value of the land.

¶285

C 25. Determination of the market value of the land may also depend upon the facts and circumstances of each case, amongst them, however, would be the price of land, amount of consideration mentioned in a deed of sale executed in respect of similarly situated land near about the date of issuance of Notification under Section 4( 1) of the Act ; in the absence of D any such exemplars the market value can be determined on yield basis or in case of an orchard on the basis of number of fruit bearing trees. It is also well settled that for price determination purposes, the courts would be well advised to consider the positive and negative factors, as has been laid E down by this Court in Viluben Jhalejar Contractor vs. State of Guj91.at [(2005) 4 sec 789]. namely :-

¶286

'

¶287

Positive factors Negative factors

¶288

(i) Smallness of size (i) Largeness of area (ii) proximity to a road (ii) situation in the interior at a distance from the road

¶289

G (iii) frontage on a road (iii) narrow strip of land with very small frontage compared to depth

¶290

(iv) Nearness to developed (iv) lower level requiring the area depressed portion to

,

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H

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 545 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

¶295

depressed portion to be A filled up

¶296

,.

¶297

(v) Remoteness from developed locality

¶298

(v) regular shape

¶299

(vi) Level vis-a-vis land (vi) Some special under acquisition disadvantageous factors which would deter a purchaser

¶300

(vii) Special value for an owner of an adjoining property to whom it may have some very special advantage.

¶301

The Reference Judge as also the High Court had proceeded to determine the market value inter alia relying upon or on the basis of some deeds of sale ; valuation report; the circular letter issued by the Collector in regard to premium payable on conversion of land etc.

¶302

The Reference Court and the High Court while ign-C,ririg the deeds of sale whereupon reliance was placed by the State, for the reasons stated hereinbefore, principally relied upon a few deeds of sale. We shall take notice of some of them, namely, Exhibits 35, 36, 37, 38, 39 and 40.

B

c

D

E

F

It will also be beneficial to consider some of the documents upon which the State relied upon, they are Exhibits 86, 90 , 91 and 96.

¶309

Criticisms advanced on behalf of the State in respect G of the deeds of sale whereupon the claimants relied are as under. i. Exhibit 35 pertain to a non agricultural resident plot ; construction thereon is only upto plinth level ; it is H

¶310

G

¶311

546

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SUPREME COURT REPORTS

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[2009] 11 S.C.R.

¶314

A

¶315

situated in a municipal area ; it a very small plot and that is why it was not comparable.

¶316

B

¶317

ii. Exhibit 36 and 37 pertain to a non agricultural residential plots of land. They are situated by the side of the highway and in the municipal area.

¶318

iii. Exhibit 38 relates to a non agricultural residential plot, comes under earthen dams area. It is outside the municipal area.

¶319

c

¶320

iv. Exhibits 39 and 40 relate to non-agricultural residential plots of land. They touch Amreli-ChittalRajkot Highway and are in municipal area.

¶321

V. Bharatbhai, PW-7, purchaser of the land under Exhibit 40, stated that the purchase of the plot by D him was for a special purpose, namely - i.e. for professionai and residential purposes.

¶322

The Land Acquisition Officer in his Award noticed the position and place of the land sought to be acquired in the E following words:-

¶323

"Details of land to be acquired.

¶324

The lands of survey number 1007 to 1046 as shown at Sr. No.1 to 28 of the statement of award are cultivable land F situated on west of Thebi river far away from Amreli, near the limits of Baxipur. These land as shown in statement Jirayat dry and Jirayat irrigated, which is black and fe11ile giving 2 crops on monsoon and winter.

¶325

•

¶326

G The land proposed to be acquired is of old and new sharat. Amreli town is the head quarter of Amreli District, is a railway station, S.T. Buses are ravaging throughout the year. The population of Am re Ii is near about 1, 10,000 which consist mainly of Patel, Bania, Brahmins, Weavers etc who H ·are progressive farmers. There are industries of oil mills,

¶327

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 547 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

¶328

land weaving etc."

¶329

A

¶330

In the said Award, summary of sales of agricultural lands was prepared, which read:-

¶331

"Summary of considerable sales of agricultural lands

¶332

B

¶333

Sales of western bank Sale of eastern bank

¶334

Survey No. .	Acres	Dateof sale	Priceof 1 1are ··	Survey No.	Acres	Dateof Sale	Sale 1are
991	308	21/5/85	785-25	37/37/2	6.20	6/6/85	307-69
1063	2.38	13/12/85	381-00	29	0.24	23nt87	1041-66
949	2.28	15/4/87	426.00	33/AB	1.11	2/3/89	3882.35
1063	1.13	3/2/89	754-71	33/AB	1.10	3/3/89	3880.00

¶335

Looking to these sales of agricultural lands Rs.350/- for Jirayat and Rs.5000/- for irrigated lands for 1 Are are seems to be reasonable for the lands of Western b·ank of river Thebi. Looking of these sales and the rise in price of land Rs.2000/- and Rs.3000/- for lands for 1 Are are seems to be reasonable but the geographical copdition of eastern bank is quite different as most of the land are converted into non-agricultural lands and is either - populated or nearly populated area, is situated on Amreli, Chittal State highway. Looking to all these factors it is not possible to compare the land of western bank with land of eastern bank. No lands are converted into non-agriculture and then is no habitation in the western bank of river Thebi. Whilst there are many non-agriculture land and habitation increases day by day. More over many lands of eastern bank are converted into non-agriculture, which were proposed to be acquired. Hence it seems neces§_ary to discuss about sales of non-agricultural plotting too as the

c

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E

F

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SUPREME COURT REPORTS

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548

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(2009) 11 S.C.R.

¶345

A land of eastern bank are situated on Amreli, Chittal, Rajkot Highway and nearer to these and a statement of sales of non-agricultural lands has been taken from the Kasba Talati Amreli which is appending as statement number K- 2 Discussions of these sales are narrated here below."

¶346

B

¶347

Our attention was further drawn to the fact that admittedly there was no development on the western side of the river. Our attention has further been drawn to the evidence of PW-1, Jerambhai. who is one of the claimants. He admitted that in the village form, which he had produced, it has not been C shown that two crops are grown and that he did not maintain any account or balance sheet of the receipt of the crop grown. He furthermore accepted that there was nc railway connecting the village with any big city. It was also admitted that not any State highway passes through Amreli and except oil mills, there D were no other industries.

¶348

The claimants examined one of the experts, namely Bhikhubhai as PW-9, who admitted that he had examined deeds of sale pertaining to residential land only and not E pertaining to agricultural lands. He furthermore admitted that the Land Acquisition Officer had taken into consideration figures of five years' sale transactions in his Award. In his deposition he stated:-

¶349

•

¶350

"(4) I know that Amreli is backward for Industrial purpose

¶351

F and as per my say Industrial Development has been started. It is true that on the western side of river nothing is there. Moreover for the purpose of going towards west side, no road facility is available. As per my say acquired land is residential purpose

¶352

G land. I have enquired from the town planning office. It is true that" in this area no residential houses traced out. In the year 1972, in Amereli town planning has been endorsed and this fact I know very well. The facts stated in column no.9 in Exh.

¶353

H

¶354

f DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 549 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.)

¶355

78, which is mentioned considering sale A transaction."

¶356

On behalf of the State one Ramniklal was examined as DW-1, He was a Deputy Executive Engineer (Thebi Irrigation). He has not only deposed that the acquired land is B situated outside the Amreli Municipality but according to him they are situated at a distance of about 1 Yi km. - 2 km. from Amreli-Chittal road. Whereas the residential area, according to him, was on the eastern side, on the western side of the river Tebi there was no residence. He further stated that no State c highway is passing through Amreli and also that railway is not connected with big city.

¶357

"

¶358

Shri Kaushik who was·examined on behalf of the State , as DW-2 and had been serving the State as a Deputy District Development Officer, in his deposition admitted:-

¶359

"I have awarded compensation at the rate of Rs.150/- per sq. mt. for Agriculture land and which is likely to be developed. The compensation awarded at the rate of Rs.50/- per sq. mt. has been awarded fully and compensation at the rate of Rs.150/- per sq. mt. has been calculated after deducting price of road (way) in the case of not taking possession road, then in such cases, I have awarded compensation at the rate of Rs.1/- which is token and deduction of road was being deducted in such case where possession of road has been handed over. Generally for the purpose of converting land into not- , agriculture purpose, the claimant has to left (sic for leave) 40 to 43% land."

¶360

It appears that the High Court had mixed up the Awards made in respect of the lands situated on the Eastern side of 1he River with that of the Western Side.

D

E

F

G

We may now notice the deeds of sale whereupon the State had relied upon.

¶366

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SUPREME COURT REPORTS

[2009] 11 S.C.R.

550

•

A 38. Ext. 86 is in respect of a deed of sale relating to Survey No.991which is adjacent to Survey No.103-A in terms whereof only 0. 77 per sq. meter of land was determined as the market value. It was also placed on record that the vendor Lalubhai Keshavbhai is one of the claimants before us. However, it B appears from Ext. 90 which is a deed of sale dated 7th January, 1987 relate to the land which is adjacent to Survey No.999 K from a perusal whereof it appears that the market value was Rs.1.85 per sq. mt. The subject matter of the said deed of sale is the land situated near nana Ankadira village c road near to the acquired land at the western side of the river.

¶372

Ext. 96 is the deed of sale dated 22nd June, 1989, appertaining to Survey No. 1043 P; from a perusal whereof it would appear that the market value of the land was Rs. 2.08 per sq. meter. Ext. 98 is the deed of sale dated 21st April, 1990 D which is in respect of Jiyarat land situated on the eastern side of the river adjoining Amreli municipal area. The market value of the same comes to Rs.8.41 per sq. met. Ext. 99 is a deed of sale dated 27th September, 1990 appertaining to Survey No.1047/1 and adjacent to Survey No.1031 & 1046 is t:3agayat E land, which is stated to be situated near the acquired land on the western side of the river and down stream of earthen dam, the market value of which was Rs.2.50 per sq. met. .

¶373

The High Court, however, proceeded on the basis that F although the acquired lands were situated on one side of the river, in view of the fact that entire acquired land was to be submerged, no justification can be made in regard to the nature of the land. The High Court held (in our opinion wrongly) that distance of a few kilo meters from the Amreli town would not G matter.

¶374

•

¶375

The High Court furthermore opined that the lands in village Baxipur were also fertile and thus no discrimination can be made. For the said purposeihe High Court relied upon the Awards made in the earlier case exhibited as Exhibits 68 and

I'

551

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DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. v. MADHUBAI GOBARBHAI &ANR. [S.B. SINHA, J.]

¶380

,.

¶381

..

¶382

73 in terms whereof compensation @ Rs.75/- per sq. meter was paid .

¶383

A

¶384

The variation in the price of the land within a few years is a matter of great significance. It is true that no single factor would be decisive for the purpose of arriving at the market value B of the land. But in a case of this nature a holistic view is required to be taken. It is, in our opinion, wholly improper to forget the distinction between the agricultural land and the non agricultural land. Even in the same area, value of the agricultural land and the non-agricultural land may be considerably different. c For the said purpose, existence of the road ; railway station ; airport; schools ; colleges ; hospitals etc. play an important role. It is not a case where the developed area and the undeveloped area or for that matter non agricultural and agricultural lands are merely divided by a road. It is also not a case where the entire D area is known and treated to be one and the same, although a part of it may be governed by the Panchyat and the other part comes within a municipal area. It stands admitted that the acquired lands for all intent and purport is divided into two parts. / The eastern part and only a small part of the western side is within the municipal area and the other, consisting of agricultural E lands, is outside the municipal area. It furthermore stands admitted that the town has developed only on eastern side of the' river and agricultural lands are situated on the western side in which there is even no residential house.

¶385

B

¶386

F

¶387

In a case of this nature, indisputably different criterion and norms are required to be adopted for determination of the · market value.

¶388

. "

¶389

Before us learned counsel for the parties have relied upon a large number of decisions. We may notice some of them

¶390

This Court in Union of India v. Pramod Gupta, [ (2005) 12 SCC 1 J, on the question of determination of market value opined:-

¶391

G

¶392

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¶393

552 SUPREME COURT REPORTS

¶394

(2009) 11 S.C.R.

¶395

•

¶396

A "24. While determining the amount of compensation payable in respect of the lands acquired by the State, the market value therefor indisputably has to be ascertained. There exist different modes therefor.

¶397

The best method, as is well known, would be the B amount which a willing purchaser would pay to the owner of the land. In absen9e of any direct evidence, the court, however, may take recourse to various other known methods. Evidences admissible therefor inter alia would be judgments and awards passed in respect of c acquisitions of lands made in the same village and/or neighbouring villages. Such a judgment and award, in the absence of any other evidence like the deed of sale, report of the expert and other relevant evidence would have only evidentiary value.

¶398

D

¶399

Therefore, the contention that as'the Union of India was a party to the said awards would not by itself be a ground to invoke the principles of res judicata and/or estoppel. Despite such awards it may be open to the Union of India E to question the entitlement of the respondent claimants to the amount of compensation and/or the statutory limitations in respect thereof. It would also be open to it to raise other contentions relying on or on the basis of other materials brought on record. It was also open to the appellant to contend that the lands under acquisition are not similar to F the lands in respect whereof judgments have been delivered. The area of the land, the nature thereof, advantages and disadvantages occurring therein amongst others would be relevant factors for determining the actual market value of the property although such judgments/ G aw?rds, if duly brought on record, as stated hereinbefor~. would be admissible in evidence."

¶400

It was further opined :-

¶401

H

¶402

"36. Yet again in Ras Behari Manda/ v. Raja Jagadish

¶403

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 553 ANR. v. MADHLJBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

¶404

-1:

¶405

Chandra Deo Dhauba/ Deb the Patna High Court A reiterated the presumption that the lessor retains all the rights in mines and quarries. It also noticed the decision of the House of Lords in Great Western R/y. Co. v. Carpal/a United China Clay Co. Ltd.wherein a grant reserving minerals was held to exclude a deposit of china B clay despite the fact that the same was found near the surface."

¶406

..

¶407

It was also held that:-

¶408

"8. In V. Hanumantha Reddy v. Land Acquisition Officer c & Manda/ R. Officer the law is stated in the following terms: (SCC p. 645, para 5)

¶409

"It is now a well-established principle of law that the land abutting the national highway will fetch far more higher price than the land lying interior."

¶410

D

¶411

This Court further opined :-

¶412

"84. It is also trite to state that the market value of agricultural land is lower than that of the land suitable for commercial purposes. (See Om Prakash v. Union of India.)

¶413

E

¶414

It was further opined :-

¶415

"

¶416

"87. The courts will also have to take into consideration the enormity of the financial implication of enhancement in view of the size of the land acquired for a particular project.".

¶417

' In Ranvir Singh v. Union of India, [(2005) 12 SCC 59], this Court opined as under :-

¶418

"22. Concededly, the High Court in its impugned judgment did not place any reliance whatsoever upon the sale instances whereupon strong reliance has been placed by

F

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554 SUPREME COURT REPORTS

¶423

[2009) 11 S.C.R.

¶424

¶425

A the parties solely on the ground that neither the vendors nor the vendees thereof had been examined as witnesses. It has also not placed any reliance upon any other judgment or award filed by the parties. The High Court while arriving at the said finding evidently took into consideration the law as it then stood. The correctness of B the decisions wherein the aforementioned view had been taken was doubted and the matter was referred to a larger Bench."

¶426

~

¶427

Referring to Cement Corporation (supra), it was opined

¶428

c that the High Court was required to consider the deeds of sale in their proper perspective for determining the market value of the acquired land."

¶429

In Karimbanakkal Su/aiman (Dead) by L.Rs. v. Special

¶430

D^{Tahsildar for K.A.K.P.l.P.,[(2004) 13 SCC 643], this Court} held:

¶431

~

¶432

"These factors have been taken into consideration by the High Court in fixing the land value. Moreover, the land acquired was agricultural land and it was acquired for the

¶433

E purpose of an irrigation project. There is nothing on record to show that the land had any commercial value or future potentialities. We do not think that the land value fixed is too low to be interfered with by this Court."

¶434

F In Vi/uben Jha/ejar Contractor v. State of Gujarat, [(2005) 4 SCC 789], this Court opined that :-

¶435

•

¶436

"24. The purpose for which acquisition is made is also a relevant factor for determining the market value. In Basavva v. Sp/. Land Acquisition Officer deduction to the

¶437

G extent of 65% was made towards development charges. "

¶438

~

¶439

In Basant Kumar v. Union of India, [ (1996) 11 SCC 542 ], this Court has opined that even if the entire land is of one

¶440

H

¶441

D

¶442

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 555 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

¶443

_.

¶444

village all the persons cannot be given same compensation, stating:-

¶445

" .... It has been firmly settled law by beadroll of decisions of this Court that the Judge determining the compensation under Section 23(1) should sit in the armchair of a willing prudent purchaser in an open market and see whether he would offer the same amount proposed to be fixed as market value as a willing and prudent buyer for the same or similar land, i.e., land possessing all the advantageous features and to the same extent. This test should always be kept in view and answered affirmatively, taking into consideration all relevant facts and circumstances. If feats of imagination are allowed to sway, he outsteps his domain of judicial decision and lands in misconduct amenable to disciplinary law ... "

¶446

It has categorically been held that ordinarily the entire village should not be treated as one unit as 'even in the same village, no two lands command the same market value' as potentially, the fact that land abutting a National Highway or road would command a higher market value vis-a-vis the land situated at a location which is not so situated.

¶447

Potential development and/or likelihood of development are also the factors which have been considered to be relevant by this Court in Kanwar Singh v. Union of India, [(1998) 8 SCC 136 ] observing:-

¶448

"8. So far as the first argument that the appellants ought to have been given the same rate of compensation which was given to the claimants of the adjoining village is concerned, the amount of compensation for the land acquired depends 011 the market value of land on the date immediately before the notification under Section 4 of the Act or when same land is acquired and offer of compensation is made through an award. Whether such an offer of compensation represents the market value of

A

B

C

E

F

G

H

556 SUPREME COURT REPORTS

¶457

[2009] 11 S.C.R.

¶458

•

¶459

A the land on the date of notification under Section 4 of the Act, has to be determined on the basis of evidence produced before the Court. The claimants have to prove and demonstrate that the compensation offered by the Collector is not adequate and the same does not reflect the true market value of the land on the date of notification B under Section 4 of the Act. This could only be done by the claimants by adducing evidence to the effect that on the relevant date, the market value of the land in question was such at which the vendor and the vendee (buyer and seller) were willing to sell or purchase the land. The consideration c in terms of price received for land under bona fide transactions on the date or preceding the date of notification issued under Section 4 of the Act generally shows the market value of the acquired land and the market value of the acquired land to be assessed in terms D of those transactions. Sale instances showing the price fetched for similar land with similar advantages under bona fide transaction of sale at or near about the issue of notification under Section 4 of the Act is well recognized to be the appropriate evidence for determining the market E value of the acquired land."

¶460

It was opined that the amount of compensation should not be awarded based on the market value of the land determined for a neighbouring village.

¶461

F

¶462

In State of Maharashtra v. Basantibai Mohan/a/ Khetan, [(1986) 2 SCC 516] referring to capitalization method for determining the value of the land, it was opined:

¶463

" ... In order to appreciate this ground of objection, it is G necessary to examine whether the classificatiot'! of the land under the Act into the land in municipal area and the land in rural area for purposes of determining the amount payable on acquisition is bad. It is not denied that the land in municipal area commands various advantages which

¶464

..

¶465

H

¶466

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. l. MADHUBAI GOBARBHAI & ANR. [S.S. SINHA, J.)

557

k

)

A

are not available in the case of land in rural areas."

¶472

Situation of the land and particularly the area in which it is situated is indisputably a relevant factor. We, however, do not mean to suggest that only because the land is situated within the jurisdiction of a Gram Panchayat by itself would go to show B that the value of the lands sought to be acquired cannot under any circumstance be compared with the land situate within the jurisdiction of municipality. There may be a case where the lands situated on one side of the road was within the Gaon Sabha and the other side within the municipality. It is also not c a case where the area is known as one and the same area although divided by a road and are under different jurisdictions. {See also Satish & Ors. vs. State of U.P. & Ors. [(2009) 9 SCALE 632] and National Thermal Power Corporation Ltd. vs. Mahesh Dutta & Ors. [(2009) 9 SCALE 591]}

¶473

D

¶474

It is furthermore beyond any doubt or dispute that building potentiality of the land acquired would also be a relevant consideration.

¶475

However, the purpose for which the land is sought to be. acquired would also assume some significance.

¶476

E

¶477

It is on the aforementioned factual backdrop and legal principles governing grant of compensation, the market value of the lands situate within Group-1 is required to be determined.

¶478

F

¶479

"

¶480

The lands are purely agricultural lands. There were no buildings; there was no residential use; there was no factory. No development had taken place nor was any development expected in immediate future. The lands were acquired only for the purpose of submergence. It had thus even no building potentiality.

¶481

We, therefore, are of the opinion that in view of the materials brought on record, the valuation of the land should be determined at Rs.50/- (Rupees Fifty only) per square meter.

G

H

558

SUPREME COURT REPORTS

[2009] 11 S. C.R.

•

A GROUP- II

This batch of appeals (7 in all) relate to the claimants' lands adjoining villages Giriya, Baxipura and limits of Amreli town and the same are directed against the common judgment 8^{and order dt. 4.5.1999 passedinFirst Appeal Nos. 989/98to} 995/98 arises out main Land Reference Case No. 1/96 with consolidated Land Reference Cases Nos. 1/96 and 82/95 to 87/95 (7 in all) main Land Reference Case being No. 1/96. In these cases, the Notification under Section 4 was published in the daily news paper on 29.11.92 and 30.11.92, the same C was notified in the Gazette on 10.12. 92 and was affixed at the concerned places on 14.12.92 followed by Notification under S. 6 published on 18.2.93 in the Gazette and in the news paper on 20.2.93 and the same was affixed at the concerned places on 24.2.93.

¶490

D

¶491

In Survey No. 89 of Village Giriya, lands of 153 la~ holders were acquired. The Special Land Acquisition Officer published the Award on 23.2.95 awarding compensation at the rate of Rs. 12/- per sq. mtr. (Rs. 1200/- per Are) for Bagayat E land and Rs. 8/- per sq. mtr. (Rs. 800/- per Are) for Jirayat land and Rs.50/- per sq. mtr. for non-agricultural land. Out of that 153 claimants, 132 claimants have not filed any reference under ~~ection 18 of the Act and accepted the award of Rs.50/- per sq. mtr. awarded by the Land Acquisition Officer. Being F aggrieved by and dissatisfied with the said Award, some of the claimants applied for reference of their cases in terms of Section 18 of the Act stating that they are entitled to compensation at the rate of Rs. 1000/per sq. mtr. References thereinto were made by the District Collector.

¶492

G 58. The Reference Court decided all these references by its common order dt. 9.1.98 awarding compensation at the rate of Rs. 400/- per sq.mt. with other benefits. The amount of compensation in respect of agricultural lands was reduced to Rs.300/- per square meter by the High Court while making a H distinction between the agricultural lands and non-agricultural

¶493

A

¶494

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 559 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.S. SINHA, J.]

¶495

lands.

¶496

Indisputably, there are 18 cases pending before the Reference Court. In case of neghbouring non-agriculture Survey No. 82 of village Giriya there were 23 claimants, 5 of them had not prayed for reference under Section 18 of the-Act. Reference Court awarded Rs.75/- per sq. mtr.. to 18 claimants and they accepted the same.

¶497

8

¶498

In these cases the lands of the claimants are situated adjoining the villages Giriya, Baxipura and limits of Amreli town. Their lands have also been acquired for the 'THEBI IRRIGATION C PROJECT'. On behalf of the claimants 7 witnesses were examined and the Department had examined 3 witnesses. The claimants' witness No. 1 Gunvantbhai Vallabhbhai has stated that the land bearing S. No. 90/1 is situated on the eastern side of Amreli Rajkot road and land S. No. 89 is also on the same o direction touching the land of S. No. 90/1. According to this witness, land bearing S. No. 91 is situated on the western side of the road touching the road side. The lands of S. No .. 90/1 and 91 are situated on the east and west side of the said Amreli-Rajkot Highway respectively and land S. No. 89 is also E on the eastern side touching the land of S.No. 91. The ReferEl_nce Court referred to the Map (Exh. 39) and noted that the land bearing S. No. 44 touches on its southern side the land bearing S. No. 91 which is on the western side of the road and land bearing S. No. 39 touches S. No. 43 being on the same F direction. The land of S. No. 39 pertains to 'Surya Garden' Hotel and for which the District Collector has ordered to pay premium @ Rs. 300/- per square meter for conversion thereof for use as non-agricultural purposes from agricultural purposes. All these three Survey Numbers are in the one line and on the western _side of the Highway. According to the Geographic~! G situation, on the other side of the road i.e. to say the eastern , side of the road, the land bearing S. No. 51 is just opposite the land of S. No. 39 and on the eastern side the land earmarked for building an Aerodrome being S. No. 51; while

¶499

E -

¶500

H

¶501

SUPREME COURT REPORTS

¶502

[2009] 11 S.C.R.

¶503

560

¶504

A S. No. 44 touches the border of the Aerodrome land S. No. 51 going towards northern side of S. No. 44. The land of S. No. 91 is adjacent to it and at the same time on the western side of S. No. 44 is S. No. 50 and S. No. 49 and the border of land of S. No. 50 touches the land of S. No. 89 to some extent. Thus,

¶505

8^{the lands bearing S.No.39 and51('Surya Garden" Hotel) and} lands of Aerodrome are situated respectively on the opposite side of the Road. S. No. 4~ touches the border of the acquired

¶506

, land of S. No. 91. On the western side of S. No. 43, there are lands of S. Nos. 41and42 and the land of S. No. 38 touches

¶507

C the southern side of S. No. 41. Thus the Geographical situation of all these Survey Numbers show that these lands are around the acquired land.

¶508

P.W. No. 1 Gunvantbhai Vallabhbhai deposed in regard to the particulars of the same Survey Numbers around D the acquired land. He has stated that the award for the land bearing S. No. 43 is at the rate of Rs. 275/- per sq.mt.. S. No. 43 touches the border of the said Amreli-Rajkot road, which is also clear from the Map Exh. 39. The land bearing S. No. 40 is, however, on the interior side of the road for which the amount E of compensation awarded is at the rate of Rs. 70/- per sq.mt. According to this witness, some other lands bearing S. Nos. 41, 43/5, 40/4, 43/2 and 43/4 were also acquired and for these lands the Land Acquisition officer had awarded compensation at the rate of Rs. 150/- per sq. mt. This witness furttiermore F stated that the land of S. No. 39 touches the road and just opposite to the land of the Aerodrome, where the "Surya Garden" Hotel is situated and for this land the Town Planning Department had also assessed the value at the rate of Rs. 217/ - vide letter dt. 16.10.92. He also stated that the land of S. No. G 39 is a new tenure land and to convert this land for Non Agriculture purposes the Collector, Amreli fixed the premium of Rs. 300/- per sq. mtr. by a Circular letter dated 27.11.1992, marked as Exh. 46. According to him, even in cases of some other S. No. viz. S. No. 56, which is only 300 mis. away from H the acquired land by a Registered Sale Deed No. 900 dt.

¶509

..

¶510

..

¶511

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 561 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

¶512

~

¶513

11.5.92, land was sold out at the rate of Rs. 690/- per sq. mtr. and that lands being S. Nos. 34 and 4019, which are about 200 meters from the land in question i.e. plot Nus. 10, 17, 18, 60 and 6 were also sold out at a high price.

¶514

The order of the Reference Court was challenged by the appellants before the High Court mainly on the following grounds:-

¶515

A

¶516

B

¶517

"(a) The Reference Court ought to have believed the deposition of D.W. No. 1 examined at Exh. 69, who had passed the award Exh. 38 becaase he had taken into^c consideration sale instances for 5 years and because he had passed the Award Exh. 38 looking to the market value as per the sale instances of village Giriya in the list of the 5 years sale instances at Exh. 35;

¶518

D

¶519

(b) That the Reference Court had erred in holding that S. Nos. 90/1 and 91 are likely to be converted into non agricultural lands;

¶520

•

¶521

(c) It was argued with reference to the deposition of D.W. No. 2 at Exh. 71 that as per the copy of the sale deed Exh. 72 the said land ad measuring 1000 sq.mts. was sold for Rs. 18500/- on 2.11.88, that means at the rate of Rs. 18.5 per sq. mt. and this price at which the land was purchased by the claimants should be considered to be the best evidence and that this should form the acid test for the purpose of determining the rate at which the compensation should be awarded."

¶522

In regard to geographical situation of the lands and whether the lands are in developed area or in the vicinity of the developed area, the High Court opined:-

¶523

"13.15 We have considered the entire evidence in this case in its entirety and have also gone through the analysis of the evidence, as has been made by the Reference

E

F

G

H

[2009] 11 S.C.R.

562 SUPREME COURT REPORTS

¶530

A Court. It is clearly borne out that the lands acquired in these cases are of S. No. 91 (in Land Refer!'lnce Case Nos. 82/ 95, 83/95 and 84/95), S. No. 89 (in Land Reference Cases Nos. 85/95, 86/95 and 87/95) and S. No. 90/1 (in Land Reference Case No. 1/96). So far as the geographical B situation of these lands and as to whether these lands are in developed area or in the vicinity of the developed area is concerned, we find that the evidence, which has come from both the sides, is not at much variance inasmuch as the lands are on the eastern er western side of the Amrelic Rajkot Highway and also as per the Map Exh. 39. The lands of various S. Nos. , to which the reference has been made herein-above, are all situated in a developed area and the same are around the acquired land. If the lands of various S. Nos. around the acquired land are developed, there is no reason to say that the acquired lands are not D comparable with the lands of various S. Nos. such as S. Nos. 38, 39, 40, 41, 42, 43, 44, 49, 50, 51 and 56. The situation of 'Surya Garden Hotel' in S. No. 39 and the existence of godowns for Scoters and residential premises between the acquired lands of the claimants and the 'Surya E Garden Hotel' is also established. Similarly the situation of the Cement Factory between the lands of S. Nos. 39 and 91 is also made out. The deposition with regard to the municipality pavilion, land of Aerodrome, houses etc. on the eastern side of the road alongwith residential F houses also cannot be disbelieved. Thus in absence of any effective and specific cross-examination with regard to the development of the area in question, it cannot be disbelieved that the lands around th~ acquired lands are developed area. In the judgment itself at page 20 the G Reference Court has recorded as under:-

¶531

"There is no cross-examination with respect to the development of area and therefore there is nothing to disbelieve the say of the witness that the area nearby acquired lands are not developed."

H

'

'

..

'

4

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 563 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

-I:

"

\

"'

It appears that the word "not" before the word 'developed" A is a mistake typographical or otherwise and on that basis no argument could be built up to say that the lands nearby the acquired lands are not developed.

¶544

13.16 The depositions with regard to the acquired lands B that it has wells, pacca houses and the trees, the details of which have been mentioned hereinabove, has remained untrammeled in the cross-examination of P.W.No. 1. All these details do add to the quality of the acquired land for the purpose of fixing the rate at which the compensation is to be given. The case that lands of S. No. 89, which have^c been acquired, are non agricultural lands and the acquired lands of S. Nos. 90/1 and 91 are likely to be converted as non agricultural land has also remained intact. Even D.W. No. 1, who has been claimed as a star witness on behalf D of the Department by the appellants, has admitted that lands of S. Nos. 90/1 and 91 are iikely to be converted into non agricultural lands. The lands of both these S. Nos.,90 and 90/1 are also surrounded by non agricultural lands and are in posh locality near Amreli township. Even if a land is not a non agricultural land, if the same is surrounded by E non agricultural lands and the same is likely to be converted into non agricultural land as per the say of the Land Acquisition Officer himself, it is certainly an important and relevant factor for the purpose of fixing the rate at which the compensation is to be awarded at par or with close F proximity with the rate in respect of non agricultural land. D.W. No. 2, who was examined by the Department, has also admitted that going further towards Amreli town, there are godowns, show room of Bajaj Scooter, Jalaram Commercial Complex, Meghnath commercial Centre, and G Surya Garden Hotel etc. He has also. admitted that area around this land are most developed and posh area of Amreli City and further that the lands of S. Nos. 90 and 91 are situated near the above S. No. 43. D.W. No. 3, who was examined at Exh. 73 by the Department, had sold out H

¶545

H

¶546

564

¶547

SUPREME COURT REPORTS

[2009) 11 S.C.R.

'

•

I·

A the land bearing S. No. 35 - a part of Village Giriya on 2.10.90 to one Vithalbhai Bhanjibhai. This witness in the cross-examination has admitted that lands of S. No. 89, 90 and 91 of the claimants are situated near Amreli-Rajkot road and that it is surrounded by the residential houses, B godowns etc. This witness has also stated that it is adjacent to posh area and this area is a developed one.

¶553

In regard to the determination of the amount of compensation by the Reference Court, the High Court inter alia opining that the rate at which the compensation was granted c by the Land Acquisition Officer i.e. at the rate of Rs. 12/- per sq.mt. for Bagayat land Rs. 8/- per sq.mt. for Jarayat land Rs. 50/- per sq. mt. for non agricultural land is wholly inadequate and upon discussing the materials brought on record in respect of some of the acquired lands vis-a-vis the locations of lands D for which deeds of sale have been executed held as under:

¶554

"While the claimants shall be entitled to compensation to be paid at the rate of Rs. 400/- per sq.mt. as decided by the Reference Court in case of lands of S. No. 89 (in Land E Reference Cases Nos. 85/95, 86/95 and 87/95) i.e. non agricultural lands, the concerned claimants shall only be entitled to the compensation at the rate of Rs. 300/- per sq.mt. instead of Rs. 400/- per sq.mt. as ordered by the Reference Court with regard to the land of S. No. 90/1 (in F Land Reference Case No. 1/96) and that of S. No. 91 (in Land Reference Cases Nos. 82/95, 83/95 and 84/95), which are likely to be converted to non agricultural lands."

¶555

~

¶556

I

¶557

Mr. Shelati would submit:

¶558

G i. That the Reference Court as also the High Court committed a serious error insofar as they failed to take into consideration that the deeds of sale whereupon reliance has been placed by. the claimants although parts of Survey Nos. 34 and 40/ H 9 being Plot Nos. 17 and 18 were sold at the rate

¶559

H

¶560

' & 565

¶561

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. 'v. MADHUBAI GOBARBHAI & ANR. [S.S. SINHA, J.]

¶562

of Rs. 129/- per square meter by reason of a deed A of sale dated 28.7.1988, were in respect of a residential plot and a small piece of land, it being situated within Amreli city and within the municipal limit; being situated in a highly developed area, the same was not comparable with the lands in B question, namely, Survey Nos. 89, 90/1 and 91 which are situated at a distance of 1.5 kilometers therefrom.

¶563

Although from index it would appear that by reason · C of a deed of sale dated 16.1.1991, One Navnitbhai Kakubhai Ganatra who was a claimant in C.A. No. 244/ 2000 sold the land to one Shri Chunilal Ranchhodbhai Parmar· in respect of part of plot No. 17 appertaining Survey Nos. 34 and 40/9 involving 138 square meters area of land for a sum of D Rs.55,200/-, i.e., at the rate of Rs.400/- per square meter, but the same could not have been relied upon on the self same grounds. The deed of sale dated 16. 1. 1991 executed by Navnitbhai Kakubhai Ganatra being one of the claimants being in C.A. E · No.244/2000 in favour of Shri Ashokbhai Nathabhai Parmar in respect of only 14~'.square meters of land in Plot No. 17 for a sum of Rs.57,200/- , i.e., at the rate of Rs.400/- per square meter could not have been relied uoon for the self same reasons. F iii. No reliance could have been placed on the deeds of sale dated'28.12.1992 and 11.5.1992 concerning Survey Nos. 34 and 40/9 being Plot No. 6 and Survey No. 56/57 comprising area of 328 G square meter and 59.42 square meter respectively which were sold for a sum of Rs.2,30,000/-, i.e., at the rate of Rs. 701. 21 per square meter and Rs.40,000/-, i.e., at the rate of Rs.673.17 per square meter respectively. No reliance could also H

D

E ·

566

SUPREME COURT REPORTS

¶568

(2009) 11 p.C.R.

¶569

A

¶570

have been placed thereupon for the added reasons • that the said deeds of sale were executed subsequent to the date of notification.

¶571

iv. No reliance could have also been placed on the deeds of sale dated 27.10.1988 and 18.1.1991 in B respect of Survey No. 36/1 being Plot No. 8 and Survey No. 34 and 40/9 being Plot No. 10 comprising area of 592.5 sq. meter and 361 sq. meter respectively which were sold for a sum of Rs 83, 500, i.e., at the rate of Rs 140.92 per sq meter c and Rs 150000, i.e., at the rate of Rs 415. 51 per sq meter respectively.

¶572

v. No reliance furthermore could have been placed on the deed of sale dated 27.2.1989 and 28.5.1990

¶573

D in respect of Survey Nos. 89 being Plot No. 26 and 39 and Survey No. 82 being Plot No. 12 comprising area of 240 sq meter and 484 sq meter respectively which was sold for a sum of Rs 4400, that is, at the rate of Rs18.33 per sq meter and Rs

¶574

E 12000 respectively, that is, at the rate of Rs. 28.4 per sq meter; the price variation being apparent on the face of the said deeds of sale; the fair market value should have been determined on the basis of the said deeds of sale dated 27.2.1989, 28.5.1990

¶575

F and 23.10.1990 by adding the market value at the rate of 5% per year which should be a fair market value. Market value of the agricultural lands by no standard could have been compared with the market value of the non-agricultural lands.

¶576

,

¶577

)·

¶578

G Mr. Manish Singhvi, learned counsel appearing on behalf

¶579

of the respondents, on the other hand, urged:

¶580

H

¶581

i. The lands in question being situated by the side of Amreli-Rajkot Highway which is a developed area and being on the eastern side of river 'Thebi'. this

¶582

~

¶583

•

¶584

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 567 ANR. v. MADHUBAI GOBARBHAI &ANR. [S.B. SINHA, J.]

¶585

...

¶586

Court may not interfere with the impugned judgment. A

¶587

ii. The concurrent findings of fact having been arrived at by the Reference Court as also the High Court, the impugned judgment is unassailable particularly in view of the fact that the deeds of sale in respect B of the same area are available.

¶588

•

¶589

~

¶590

iii. The nature of the lands although were agriculture but they being situated within a developed area and having great potentiality of being converted into a non-agricultural land, the guiding principle for c determining the market value thereof, namely, that a willing purchaser would pay to a willing seller for a property having due regard to its existing condition, with all its existing advantages, and its potential probability, should be and has rightly been D followed.

¶591

iv. The deeds of sale relied upon by the State being dated 2.11.1988, 27.2.1989, 4.4.1989 and 20.4.1989 could not have been relied upon inasmuch as admittedly they were grossly undervalued and the Collector had issued notices upon them. The Collector himself having fixed the prices of the land at Rs.125/-/ per square meter, the State should not be permitted to raise any contention contrary thereto or inconsistent therewith. The said deeds of sale, in any event, having been executed four years prior to issuance of the Notification under Section 4(1) of the Land Acquisition Act should not be relied upon.

E

F

G

V . The findings of fact arrived at by the learned Reference court as also the High court relying on or on the basis of Exhibits 30, 51 and 53 showing the value of the land to be Rs.400/-, Rs.701/- and Rs.673 per square meter, no case has been made

¶596

H

¶597

[2009] 11 S.C.R.

¶598

SUPREME COURT REPORTS

568

r

A

out for interference with the impugned judgment.

¶603

vi. Even the deed of sale dated 27.10.1988 (t.xhibit 55) shows the value of the land as Rs.140/- per square meter and the other deeds of sale which were marked as Exhibits 57, 58 :ind 60 having

¶604

B been executed on 18.1.1991, 1¹ . I 0.1991 and 05.01.1991 i.e. being two year;:; p:·ior to the issuance of a notification and the consideration \

¶605

thereof being calculated at the rate of Rs.415/, Rs.425/- and Rs.292/- per square meter, the

¶606

c impugned judgment should not be interfered with.

¶607

vii. D.W.3- Nandlal Trikamjibhai examined on behalf of the State in his deposition having clearly stated that the lands which were the subject matter of Exhibit

¶608

D 74 were situated only four kilometers away from the acquired land of the claimants and, thus, the amount of consideration should not be treated to be a sale instance for the purpose of determining the value of the acquired land being survey Nos. 89, 90/

¶609

E 1 and 91, which were surrounded by residential houses, godowns, etc. and also very near to the posh area of the town.

¶610

E

¶611

•

¶612

viii. The Collector himself having fixed the conversion rate from agricultural land to non-agricultural land at

¶613

F Rs.300/- per square meter, it would wholly be incorrect to contend that the same did not offer any indicia in regard to the value of the land for the enhancement of right in property from agricultural to non-agricultural land.

¶614

G

¶615

Indisputably, the agricultural lands adj-oin Chittal Road whereas the non-agricultural lands are not.

¶616

,.

¶617

The Reference Court while passing its award, inter alia, opined:

¶618

H

¶619

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 569 ., ANR. v. MADHUBAI GOBARBHAI & ANR. [S.S. SINHA, J.]

¶620

"Now a days, nobody would allow to keep a wooden cabin in one squ~re meter area in one's land on rental basis for Rs.8/- to Rs.12/- per sq. mtr. while in these Land Reference Cases, the Land Acquisition Officer has acquired whole lands permanently from the land owners/ claimants by paying compensation of Rs.8/- and Rs.12/per sq. mtr."

¶621

A

¶622

B

¶623

It was furthermore opined:

¶624

"'

¶625

,

¶626

"During this period, one cup tea cost is minimum Rs.3/and that too in the road side cabin."

¶627

In our opinion, the said observations were wholly irrelevant as it is now well settled that the Reference Court should sit in the arm chair of a willing and prudent purchaser and put a question to himself as to whether he would offer the same price sought to be awarded for the said land. We may notice that a portion of land bearing Survey No. 89 was converted into non-agricultural use and the sale transaction of a portion thereof would show that 1000 sq. mtr. of land were purchased for Rs.18,000/- by a deed of sale executed on 2.8.1988 in terms whereof the value of tho land came to Rs.18/ - per sq. mtr. We will advert to the question as to whether the same ought not to be relied upon as the land under the said deed of sale not only was converted into non-agricultural land but even developed as well and all other activities were being carried out by dividing the same into plot a little later.

¶628

It is admitted that subsequently an agreement of sale was entered into in respect of those plots of land wherefor the market value was fixed at Rs.300/- per sq. mtr. It, however, appears that no agreement for sale was produced before the Reference Court. It was urged that the said purported agreement for sale would not b~ relevant for Survey Nos, 90/1 and 91 as the same were agricultural lands.

c

D

E

F

G

We may furthermore place on record the evidence of Deputy Collector, Mr. Mansuri wherein he stated, "Disputed lands are situated at a distance of 4 Kms. away from the

¶635

H

¶636

570 SUPREME COURT REPORTS

(2009] 11 S.C.R.

•

·- .,

A residential area of Amreli." According to the said witness he, having considered the four instances of sale which had taken place in village Giriya, had made his award.

¶641

The Reference Court as also the High Court, however, B^{proceededonthepremisethat astheCollector of theDistrict} himself determined the market value of Survey No. 39 in terms whereof a sum of Rs.300/- per sq. mtr. by way of premium (which is said to have been reduced at a later stage to Rs.100/ - per sq. mtr.) was fixed.

¶642

c 70. Was it wholly irrelevant is the question.

¶643

A part of Survey No. 89 was non-agricultural in nature but indisputably Survey Nos. 90/1 and 91 were agricultural lands. The value of agricultural lands could not have been compared D^{withthevalueof non-agriculturallands;onlybecausesome} witnesses contended that there was a potentiality of the said lands becoming developed.

¶644

..

¶645

We may, for the purpose of determination of the market value of the lands in question, notice certain sale E transactions.

¶646

By reason of a deed of sale dated 28. 7.1988 (Exhibit 48) Survey Nos. 34 and 40/9 (Plot No. 17 & 18) admeasuring an area of 739.21 sq. mtr. was sold for a consideration of F^{Rs.96,000/-at therateof Rs.129/-per sq.mtr.It is,however,} admitted that the land in question consists of residential plots and is a small piece of land within the municipal limit of Amreli city, being situate at a distance of about 1.5 kms. from the acquired land. The deed of sale dated 16.1.1991 (Exhibit 30) G^{showsthat143 sq.mtr.of landinPlotNo.17 wassoldfora} sum of Rs.~7,200/-, that is, at the rate .of Rs.400/- per sq. mtr. It is said to be not only a residential plot, but also a small piece of land situate in village Amreli city in a highly developed area; the acquired land being about 1.5 kms. away therefrom.

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E

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DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 571 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

¶653

Two deeds of sale subsequent to the date of A notification had also been brought on record being Exhibits 51 and 53 in respect of Survey Nos. 34, 40/9 and 56/57 at the rate of Rs.701.21 per sq. mtr. and Rs.673.17 per sq. mtr. respectively. The lands in question are said to be 2 kms. away from the acquired land. A deed of sale dated 27.10.1988 B (Exhibit 55), however, show that plot No. 8 to Survey No. 36/1 admeasuring 592.50 sq. mt. was sold at a price of Rs.83,500/ -, i.e., at the rate of Rs.140.92 per square meter. The said land is said to be situated in a fully de1teloped residential area of Amreli City and is about 2 kms. away from the acquired c agricultural land of Survey No. 90/1, 90/2 and 91 of Village Giriya. By reason of another deed of sale dated 18.1.1991, 361.00 sq. mtr. of land in Survey Nos. 34 & 4019 Plot No. 10 was sold for a sum of Rs. 1,50,000/-, i.e., Rs.415.51 per sq. mtr. Two other deeds of sale being Exhibits 58 and 60 being D dated 11.10.1991 and 5.1.1991 which were in respect of Survey Nos. 34, 40/9 Plot No. 60 Survey No. 41 Plot No. 14 was sold at the rate of Rs. 425.69 per sq. mtr. and Rs.292.30 per sq. mtr. for a sum of Rs.85,000/- and Rs.38,000/respectively.

¶654

B

¶655

D

¶656

We may also notice the deeds of sale whereupon reliance has been placed by the State, the details whereof are as under:

¶657

¶658

S. No.	Sale Deed No.& Date	Vendor	Vendee ,	Revenue Survey No.	Area	Sale Deed Amo- unt (Rs.)	Rate/ Sq. mt. (Rs.) 18-33	Type of Land
1.	258 27.2.89	P.O.A. of Shambhu Vallabh Kabariya	Tulsidas Ambalal Lathigara	S.No.89 Plot No. 26&39	240 Sq. mt.	4400/		Non Agri.
2.	469 4.4.89	P.O.A.of hambhu	Chandresh kumar	S.No. 89 Plot No.	480 Sq.	8800/	18- 33	Non Agri.

F

G

H

572 SUPREME COURT REPORTS (2009] 11 S.C.R.

¶663

A

¶664

A			Vallabh Kabariya Siddik Habib Nagani	Mansukhlal Zinzuvadiya	35, 36, 45 &46	mt.
B	3.	582 20.4.89	Jayesh kumar Durlabhji Mavani, Amreli	Chandrik- aben Jashvan- tray Kothiya	S.No.89 PlotNo.1	300. 62 Sq. mt.	70001-	23- 28	Non f.\gri.
c	4.	886 3.6.89	P.O.A.of Shambhu Vallabh Kabariya, Shri Siddikbhai Habibbhai Nagani	Hitesh kumar Hiralal Zinzuvadiya	S.No.89 Plot No. 89,58, 71	538 Sq. mt.	9500/-	17- 66	Non l\gri.
D	5.	955 20.6.89	Mrs. Diwaliben Babubhai Rokad	Dalsukh Hiraji Jogani	23i2Plot	1-61- 88Ha	22500/-	1- 39	A.gri.
E	6.	1066 211.5.90	P.OAof Ismail Jusabbhai Motiwala etc. 6 Persons lkbal	Revatiben Haribhai Solanki	S.No.82 Plot No.12	484 Sq. mt.	12000/-	24-	Non A.gri.
F	7.	1212 15.6.90	Ismail Jusabbhai Motiwala	Karshan Damji Pithadiya etc.	S.No.82 Plot No. 5&6	704 Sq. mt.	20000/- 40	28-	Non A.gri
G	8. 9.	715 13.4.92 1348	Asagarali lnayatali Saiyad Shambhu	Labhuben Kanaji Khanesa Pankajbhai	2212. ~3/1p S.No.89,	1-53- 78 0-83 -97 2-37- 75 Ha. 1016	191510/ 18500/-	8-05 18-	C..gri. Non

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DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. 573 , v. MADHUBAI GOBARBHAI & ANR. [S.S. SINHA, J.]

¶670

	3.11.88	Vallabh Kabariya	Mansukh- bhai Zinzuvadiya	10Plots PlotNo. 178 to 187	Sq. Mt. -		20	Agri.
10.	2235 23.10.90	·•rl'11; Bhanabhai Naranbhai 'f'4' 'Limbasiya P.O.A.of Shivlal Bhanjibhai Limbasiya	Bhanabhai Naranbhai Limbasiya Vithalbhai Bhanjibhai Limtiasiya	35/P ~.·	3-67- 04 (Ha) F~	14000/-	00- 38	Agri.

¶671

The price variation and the market value shown is the two aifferent categories'6flhe land relied upon by the claimants and the State in the aforementioned chart is significant. The price variation between agricultural land and non-agricultural land almost d1~iri'ng the same period also is of some s·ignificance.

¶672

77; It is furthermore of some interest to note that within a short period of time, the price of the land had shot up and that too immediately after, the process of acquisition of land had started. It is furthermore important to note that there existed a significant price variation even in regard to the lands situated on Survey No. 89. which appears to be a very big plot.

¶673

There cannot be any doubt or dispute whatsoever that different potentiality of land in different villages and even in different parts of the same village would be existing. It was therefore not proper for the High Court to treat all types of lands situated even in different villages as pertaining to a comparable category . This Court in certain case even has deprecated the pra~tice of awarding compensation on the basis of an award made in a neighbouring land.

A

B

D

E

F

G

In Kanwar Singh & ors. vs. Union of India ((1998) 8 sec 1361

¶681

"If we go by the compensation awarded to claimants of

¶682

H

¶683

574 SUPREME COURT REPORTS

¶684

[2009] 11 S.C.R.

¶685

A adjoining village it would not lead to the correct assessment of market value of the land acquired in the village Rangpuri. For example village 'A' adjoins village 'B', village B adjoins village 'C, village 'C adjoins village 'D', so on and so form and in that process the entire Delhi B vJould be covered."

¶686

[::;ee also Basant Kumar (supra)]

¶687

It is, however, also true that the court is bound to take into consideration the potentiality of the land.

¶688

c In N.B. Jeejabhoy v. The District Collector Thana C. A. Nos. 313 to 315of1965 decided on August 30, 1965, this Court held:

¶689

"A vendor willing to sell his land at the market value will take into consideration a particular potentiality or special D adaptability of the land in fixing the price. It is not the fancy or the obsession of the vendor that enters the market value, but the objective factor namely, whether the said potentiality can be turned to account within a reasonably near future ......... The question therefore turns upon the facts E of each case. In the context of building potentiality many questions will have to be asked and answered : whether there is pressure on the land for building activity, whether the acquired land is suitable for building purposes, whether the extension of the said activity is towards the land F acquired, what is the pace of the progress and how far the said activity has extended and within what time, whether buildings have been put up on lands purchased for building purposes, what is the distance between the built-in-land and the land acquired and similar other questions will have to be answered. It is the overall picture drawn on the said G relevant circumst~mces that affords the solution."

¶690

In Raghubans Narain Singh v. The Uttar Pradesh Government Through Collector of Bijnor [1967 (1) SCR 489], this Court held:

¶691

H

¶692

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

575

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<(

"Market value on the basis of which compensation is payable under s. 23 of the Act means the price that a willing purchaser would pay to a willing seller fo: a property having due regard to its existing condition, with all its existing advantages, and its potential possibilities when laid out in its most advantageous manner, excluding any advantage due to the carrying out of the scheme for the purposes for which the property is compulsorily acquired."

¶697

{See also Mahabir Prasad Santuka and Ors. v. Collector, Cuttack and Ors [(1987) 1 SCC 587]}

¶698

So far as deeds of sale pertaining to the years 1988 and 1989 are concerned, the same were executed more than three years prior to the date of acquisition. However, in respect of the deeds of sale pertaining to Survey No. 89, in view of the under-valuation of the lands sold, the Collector fixed the same at the rate of Rs.125/- per sq. mtr. Furthermore, the Collector himself has fixed the premium of Rs.300/- per sq. mtr. for conversion from agricultural land to non-agricultural land. Although the same by itself would not be a safe criterion for determining the market value, we are of the opinion that both of them may form the basis for arriving at a reasonable conclusion.

¶699

For the aforementioned purpose, this Court must keep in mind that the distance of the lands sought to be acquired apart from other factors. from the Highway also plays an important role. Evidence has been brought on record to show that some lands, which are the subject matter of the sale deeds on which reliance has been placed by the claimants, are situated at a distance of 1.5 to 4 kms from the Highway. In that view of the matter, it would, in our opinion, be safe to arrive at the market value as on the date of acquisition for the nonagricultural lands at Rs.250/- per sq. mtr.

¶700

So far as the agricultural lands are concerned, even if they had the potentiality of being converted into a non-

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D

E

F

G

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576

SUPREME COURT REPORTS

¶712

[2009] 11 S.C.R.

¶713

r ~

¶714

A agricultural lands as on the date of notification, they were agricultural lands albeit in a developed area. The valuation thereof may be determined at 50% of the developed land, that is, at Rs. 125/- per sq. mtr.

¶715

B GROUP-Ill

¶716

In this batch of cases, notification under Section 4 of the Act was issued in the daily newspaper on 2.2.1990 and was published in the Gazette on 15.3.1990. They were said to have been affixed at or near the lands in question on 1.8.1990. On C the lands under acquisition, indisputably godowns were also constructed. A declaration under Section 6 of the Act was issued on 18.6.1991 and published in the Official Gazette on 11. 7.1991.

¶717

o 85. The details of the cases falling in Group-Ill are as under:

¶718

Group No.	Total mat- ters	C.A.No.	FA.No.	NotificationDateof Section4Judgment dated
E⁷	8	205-212/2000	410- 417/1998	15.3.19904.5.1999
8	6	214-219/2000	2073- 2078/1998	....,.. 15.3.19904.5.1999

¶719

F 86. An award was made by the Land Acquisition Collector on 23.7.1993. Respondents herein being aggrieved by and dissatisfied with the quantum of compensation made in the said awards filed applications for reference before the Collector to the District Court. Amreli claiming a sum of Rs.500/- per G square meter for agricultural lands and Rs.600/- to Rs. 750/- for non-agricultural lands as also additional amount of compensation, the details thereof are as under:

¶720

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¶721

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 577 ANR. v. MADHUBAI GOOARBHAI & ANR. (S.B. SINHA, J.]

¶722

•

¶723

F.A. No.	Survey No.	Typeof Land	Arec. in Sqm.	Comp. awar- ded by LAO. Rs. sqm	Comp. claim- edin Lower Court Rs. Sq./ Sqm	Comp. decreed by Lower Court Rs. Sqm	Comp. Decreed byGuj. High Court Rs. Sqm	A B
1	2	3	4	5	6	7	8
410/98 '	44/1	Agri	57445	50	500	160	160
411/98	43/5A-1	Agri.21 Godown					f	c
412/98	43/5A-1	Non- Agri.	541	150	500	240	240
413/98	38/2	Agri	4992	150	500	160	160
414/98	40/4A	Non- Agri	4994	150	600	240	240	D
415/98	43/2	Non- Agri	9407	150	500	240	240
416/98	43/2	Non- Agri	236	150	500	240	240	E
417198 2073/98	43/3 42/1p 43/1p	Non- Agri Agri	632 -32104	150 50	500 600	240 160	240 160	F
2074/98	43/2	Non- Agri	5407	150	600.	240	240
2075/98	38/1	Agri	13717	50	600	160	160
2076/98	43/5A-1	Non- Agri.	307	150	600	240	240	G
2077/98	43/5A-1	Non- Agri.	216	150	600	240	240
2078/98	43/5A-1	Non- Agri.	216	150	600	240	240	H

¶724

c '

¶725

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¶726

SUPREME COURT REPORTS

¶727

(2009] 11 S.C.R.

¶728

578

¶729

A 87. One Mahendrakumar Nathalal Adatiya said to be the power of attorney holder of the claimants deposed twice before the Reference Judge. His depositions was marked as Exhibit 20 and Exhibit 31. In his deposition, he inter alia stated that the lands under acquisition are on Amreli-Rajkot Highway B^{knownasChaitalRoad.Inthesaidtown,thereisa Railway} Station, Civil Hospital, S.T. Depot. Airdrome, Colleges, and market yard, etc. According to him, there was a possibility of further development. The said lands were on the eastern side of the river and the area in question had further been c^{developing. According to the said witness, moreover apart from} a large number of houses constructed by various societies; there is an Eye Hospital, High School and other Hospitals situated near the lands in question. It was furthermore stated that on the other side of the land in question, one Survey No D^{43/5wasconvertedintonon-agriculturaltenancyandinthe} years 1983-1984, commercial complexes were constructed for conversion from agricultural land to non-agricultural land. The Collector fixed premium at the rate of Rs.300/- per square meter in respect of lands which was adjoining Survey No. 43/5 and E^{Survey No.44.Accordingtohim,theprevailingmarket.rateat} the relevant time was Rs.600/- to 8001- per square meter.

¶730

,

¶731

•

¶732

Apart from the claimants, some tenants of the godowns examined themselves being witness No.3 and witness No.4. Several other witnesses including an expert Jivanbhai Pragjibhai F Savliya (Witness No.7) was also examined.

¶733

On behalf of the State, Shri Kaushik Maganlal (D.W.1) Deputy Collector who passed the award was examined.

¶734

One Balubhai V. Savliya (D.W.2), a vendor proved a G deed of sale which was marked as Exhibit 83, whereby. and whereunder he had sold 5 bighas of land in 1985 for a consideration of Rs.10,000/-. The State furthermore examined one Nandlai Trikamjibhai (D.W.3). He had purchased some land H^{near thedamsiteata priceof Rs.150/-per squaremeter.}

•

579

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DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. v. MADHUBAI GOBARBHAI & ANR. [S.S. SINHA, J.]

¶739

. ,+

¶740

The High Court on the basis of the materials brought A on record awarded compensation at the rate of Rs.160/- to Rs.240/- per square meter.

J.

,., "

7

So far as the value of the godowns are concerned, the yearly rent was found to be Rs.1,04,000/- whereas the B Reference Court applied the multiplier of 20, the High Court by reason of its impugned judgment has applied the multiplier of 10.

¶745

Both parties have preferred appeals thereagainst. 94. Separate appeals have been preferred by the parties hereto before this Court also.

¶746

c

¶747

Mr. Shelati, the learned Senior Counsel appearing on behalf of the appellant, would submit:

¶748

D

¶749

i. That the Reference Court wrongly proceeded on the premise that all acquired lands are situated by the side of Amreli - Rajkot Highway despite the fact that Exhibit 39 (map) clearly shows that Survey Nos. 43/ E. 5A-1, 38/2, 40/4A did not abut it . ii. The market rate fixed by the Collector at Rs.300/per square meter for converting agricultural land to non-agricultural land in respect of Survey No. 39 could not have been taken into consideration for the F purpose of determining the market value of the land as by reason thereof the restrictions imposed in a covenant had been removed by enlarging the ambit of the property right over the land. G

¶750

iii. No reliance could .have been placed on the deeds of sale dated 20.9.1990, 16.1.1991and16.1.1991 in respect of Survey Nos. 34 and 40/9 comprising of an area of 240 square meter, 143 square meter and 143 square meter respectively and sold for a

¶751

H

¶752

580

¶753

SUPREME COURT REPORTS

[2009) 11 S.C.R.

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B

sum of Rs.1,20,000/-, i.e., at the rate of Rs.487.80 per square meter, a sum of Rs.57,200/-, i.e., at the rate of Rs.400/- per square meter and Rs. 55,000/ -, i.e., at the rate of Rs.400/- per square meter respectively as the sale instances being Exhibit 58, 60 and 61 were not comparable, as

¶759

(1) the lands under sale were small pieces of land;

¶760

(2) they were situated in highly developed area of Amreli City;

¶761

c

¶762

(3) they were within the territorial limit of municipality;

¶763

D

¶764

(4) the lands were situated 1.5 to 2.5 kilometers away from the acquired lands; and

¶765

(5) the deeds of sale having been executed after ' • the issuance of notification, no reliance could have been placed thereupon.

E

F

G

iv. The deeds of sale dated 21.5.1985 and 26.10.1988 in respect of Survey No. 991 measuring 1-30-51 square meter and 323 .12 square meter respectively which were sold for a sum of Rs 10,000, i.e., at the rate of Rs 0.77 per square meter and Rs 45,000, i.e., at the rate of Rs.139.26 per square meter respectively is demonstrative of the fact that there is a huge disparity.

¶770

v. Godowns having been constructed for the purpose of avoiding payment of octroi duty itself goes to show that the value of the land within.the municipal area would be higher.

¶771

.. '

¶772

vi. The evidence of Dr. Bharat Kantilal Mehta who had purchased the lands having stated that he had

¶773

H

¶774

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 581 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.8. SINHA, J.)

¶775

... ~

¶776

purchased the lands for professional and A residential purpose and having taken a firm decision to purchase the land only in that area and, thus, the same being of some personal value to him could not be a comparable instance.

'

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... ...

1

vii. The potentiality of the land in a munidpal areca must^B be held to be higher than the potentiality of the land in a rural area and, thus, the Reference Court as also the High Court committed a serious error in relying upon the sale instances which were in c respect of the lands situate within the illunicipal area.

¶782

viii. The High Court and the Reference Court committed a serious error insofar as they failed to take into consideration that the sale instances whereupon^D reliance had been placed by the State, viz. Exhibit 83 and Exhibit 85, namely, the deeds of sale dated 21.5.1985 and 26.10.1988 wherefrom it would appear that whereas in the year 1985 the market value was Rs.0.77 per Are, in the year 1988 the^E rate was Rs.139.26 ps. per Are. Both the deeds of sale involving small plots of land and being situated at a distance of 0. 75 kilometer from the acquired land and, thus, should have been taken into consideration. F

¶783

F

¶784

ix. As it was categorically stated by Mahendrakumar, the power of attorney holder, "we could not earn such type of rental income if the godowns were situated within the municipality area because the G godowns were being constructed outside the octroi naka", and similarly H.N. Chandarana having stated that the godowns being situated outside octroi naka, he had hired the same to save octroi duty; and the godowns having bee~ constructed to H

¶785

582 SUPREME COURT REPORTS [2009) 11 S.C.R.

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A evade payment of levy of octroi, it did not reflect the true market value thereof.

¶790

x. In any event, the cost of the construction of the godowns should have been considered for determining the market value. Provision for

¶791

B expenses incurred like taxes, labour charges, maintenance of the godown and salary payable to the watchman having not been taken into consideration while determining the actual rental income derived by the claimants, the impugned

¶792

c judgment should be suitably modified.

¶793

c

¶794

xi. In any view of the matter, once the market value was determined on the basis of the income thereof, no separate compensation could have been granted towards the value of the land.

D

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Mr. Sunil Kr. Gupta and Mr. Dinesh Dwivedi, learned Senior Counsel appearing on behalf of the claimants - respondents, on the other hand, urged:

E

F

G

i. The last publication of notification having been made on 1.8.1990, the deeds of sale which were executed in September 1990 and a few months thereafter had rightly been relied upon by the courts below being contemporaneous documents.

¶803

ii. Market value of the land in terms of Section 23 of the Land Acquisition Act being required to be determined as on date of issuance of the notification, the same would connote nearness and not a date prior to issuance of the notification.

¶804

iii. The lands acquired being situated on the eastern side of the river and just outside the Amreli town, the Reference Court as also the High Court committed a serious error in deducting 50% from

¶805

H

¶806

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 583 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

¶807

the market value of the land situated in a municipal A area.

¶808

iv. The map on which reliance has been placed by the State of Gujarat would itself show that the area in question is a highly developed one and the same 8

¶809

were situated near the Aerodrome, School, Hotel, a large number of housing societies, and in that view of the matter, there was absolutely no reason as to why the sale instances whereupon reliance has been placed by the claimants should not have been considered to be the determinative factor for C fixation of the amount of compensation.

¶810

v. Godowns having been constructed on nonagricultural lands and for the purpose of proving the rental income therefrom not only Mahendrakumar D was examined in two reference cases as P.W. 1 and P.W.3 but also two tenants, namely, Harshad Nathalal Chanarana (P .W .3) and Paresh Dinkarbhai Davda (P.W. 4) who proved the advantages of such godowns, there was no reason E as to why the multiplier of ten should have been used although ordinarily a multiplier of 25 is applied.

¶811

vi. The value of the godowns was required to be determined keeping in view the loss of earning F therefrom in terms of the 'fourthly' appended to Section 23 of the Act.

¶812

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¶813

vii. P.W. 6 - Navnitbhai Kakubhai Ganatra, who was the vendor in respect of Exhibits 60 and 61, relating to. Survey Nos. 34 and 40/9 having been proved, G the sale deed which was executed within a period of six months from the date of publication of the notification under Section 4(1) of the Act, there was no reason as to why the same could not have

¶814

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SUPREME COURT REPORTS

[2009] 11 S.C.R.

584

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A

B

formed the basis for determining the market value.

¶824

viii. Even Jivanbhai Pragjibhai Savliya (P.W. 7) has proved the assessment report and map to show that Survey No. 43/5A was adjacent to the godown. The lands under acquisition being small plots, the contention of the State of Gujarat that the deeds of sale being Exhibits 58, 60 and 61 could not have been relied upon must be held to be incorrect.

¶825

ix. The Reference Court as also the High Court having

¶826

c arrived at a categorical finding that most of the contemporaneous sale-deeds relied upon by the respondents were in the vicinity of the acquired lands, there is no reason as to why a different view should be taken by this Court.

¶827

D

¶828

Notification for acquisition of the said lands was issued on 15.3.1990. The lands under acquisition appertain to Survey Nos. 44/1, 43/5A-1, 38/2, 40/4A, 43/2, 43/3, 42/1p, 43/1p, 38/ 1, 38/2. Whereas Survey Nos. 44/1, 38/2, 42/1p, 43/1p and 38/ 1 are agricultural lands; other Survey Nos. including Survey No. "E 43/5A-1 are non-agricultural lands.

¶829

•

¶830

On a part of Survey No. 43/5A-1, 21 godowns have been constructed wherefor separate amount of compensation has been awarded. The claimants in support of their claim had F relied upon the deeds of sale dated 20.9.1990 marked as Exhibit 58. The deeds of sale which were executed on behalf of the State are dated 21.5.1985 and 26.10.1988.

¶831

The Reference Court as also the High Court G determined the amount of compensation at the rate of Rs.240/ - per square meter for non-agricultural lands and deducted onethi rd therefrom, i.e., Rs.160/- towards compensation for agricultural lands. In arriving at the said figure, the Reference Court proceeded on the basis that the market value of the land

¶832

H

¶833

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 585 ANR. v. MADHUBAI GOBARBHAI &ANR. [S.B. SINHA, J.]

¶834

' ~

¶835

situated in the municipal area was Rs.485/- per square meter A at the time of acquisition, and, thus, the lands in question being outside the municipal area, the market value thereof should be deducted by -50%, i.e., Rs.240/- per square meter. As indicated hereinbefore,. for determining the value of agricultural land further one-third has been deducted. B

¶836

B

¶837

We may place on record that even before the High Court, the claimants had preferred cross objections, which were rejected on the premise that requisite amount of court fee had not been paid.

¶838

c

¶839

In Administrator General of West Bengal v. Collector, Varanasi [AIR 1988 SC 943], this Court held:

¶840

'•

¶841

... •

¶842

''The determination of market-value of a piece land with potentialities for urban use is an intricate exercise which D calls for collection and collation of diverse economic criteria. The market-value of a piece of property, for purposes of Section 23 of the Act, is stated to be the price at which the property changes hands from a willing seller to a willing, but not too anxious a buyer, dealing at arms E length. The determination of market-value, as one author put it, is the prediction of an economic event, viz, the priceoutcome of a hypothetical sale, expressed in terms of probabilities. Prices fetched for similar lands with similar advantages and potentialities under bonafide transactions F of sale at or about the time of the preliminary notification are the usual; and indeed the best, evidences of marketvalue. Other methods of valuation are resorted to if the evidence of sale of similar lands is not available."

¶843

In 'State of Punjab and Anr. vs. Hans Raj (Dead), by Lrs.^G Sohari Singh and Ors., this Court held: '·

¶844

"As the method of averaging the prices fetched by sales of different lands of different kinds at different times, for

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[2009] 11 S.C.R.

·~

, ;

A fixing the market value of the acquired land, if followed, could bring about a figure of price which may not at all be regarded as the price to be fetched by sale of acquired land. One should not have, ordinarily recourse to such method. It is well settled that genuine and bona fide sale B transactions in respect of the land under acquisition or in its absence the bona fide sale transactions proximate to the point of acquisition of the lands situated in the neighbourhood of the acquired lands possessing similar value or utility taken place between a willing vendee and c the willing vendor which could be expected to reflect the true value, as agreed between reasonable prudent persons acting in the normal market conditions are the real basis to determine the market value."

¶853

Keeping in view the ratio laid down in the D aforementioned decisions as also the materials placed on record, we are of the opinion that the amount of compensation for the lands acquired in this matter arrived at by the High Court, that is, Rs.240/- per sq. mtr. for non-agricultural land and Rs.160/- sq. mtr for agricultural land does not warrant any E interference on our part. The High Court, in this regard, has adopted the correct approach particularly in view of the fact that the lands in question are not only situated within a developed area but being situated near Aerodrome, Schools, Hospitals, etc. the market value thereof could not have been determined F at a lesser rate.

¶854

Now we shall deal with the question of the amount payable for acquisition of 21 godowns and the land on which they stand in Survey No. 43/SA-1. Out of the total area of 4250 G^{mtrsof land,2972sq.mtrs.is agriculturallandand1278 sq.} mtrs. is non-agricultural land on which the godowns have been constructed. Commercial complexes were constructed on it in the year 1984.

¶855

Respondents have constructed 6 big god owns and

H

• '

.. ;

,__

~

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 587 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, 'J.]

¶862

15 small godowns. The amount of rent of the godowns has been A brought on record. Respondents have claimed compensation under various Heads, namely, price of the land, loss suffered due to recovery of rent for 2 years of godowns, loss for construction for deep-well, watchman quarter, etc.

¶863

B

¶864

\

¶865

One of the principal questions, as indicated hereinbefore, raised on behalf of the State is that the valuation of the land cannot be determined indirectly twice over, one on the basis of the value of the land and the other on the basis of the rental income. Matter would, however, be different where c only there is a construction on a land which is used for residential or other purposes.

¶866

In Ratan Kumar Tandon & Ors. vs. State of UP. [(1997) 2 SCC 161], this Court held:

¶867

D

¶868

"It is well-settled law that when land and building are acquired by a notification, the claimant is not entitled to separate valuation of the building and the land. They are entitled to compensation on either of the two methods but not both. If the building is assessed, it is settled law that E the measure of assessment be based on either the rent received from the property with suitable multiplier or the value of the building is the proper method of valuation."

¶869

... ;

¶870

'?

¶871

We are in agreement with the view that for extent of F land on which the godowns stand, separate compensation need not be paid when compensation with respect to rental incom? is being paid for the godowns.

¶872

The High Court by reason of the impugned judgment has granted compensation inter alia applying the multiplier of 10 G over the annual income. The approach of the Hrgh Court is correct.

¶873

In Airpotts Authority of India v. Satyagopal Roy and Ors. [(2002)3SCC527], it was .held that:

¶874

H

¶875

~

¶876

588 SUPREME COURT REPORTS

[2009] 11 S.C.R.

..... ~-

f

j "

A "8. It is settled law that in evaluating the market value of the acquired property, namely, land and building or the land with fruit-bearing trees standing thereon, value of both is to be determined not as separate units but as one unit. Therefore, it would be open to the Land Acquisition Officer 8 01 the Court either to assess the land with all its advantages and fix the market value thereof on the basis of comparable sale instances. In case where comparable sah~ instances are not available and where there is reliable and acceptable evidence on record of the annual income, market value could be assessed and determined on the c basis of net annual income multiplied by appropriate multiplier for its capitalization."

¶882

In Assistant Commissioner-cum-Land Acquisition D^{_Officer,Bellary vs._S.}^{T.PompannaSetty[(2005)9 SCC662],} this Court has held:

¶883

"15. From the above cases, it is clear that normally in the cases where compensation is awarded on yield basis, multiplier of 10 is considered proper and appropriate. In E the case on hand, multiplier of 15 has been applied which is on the higher side ... ."

¶884

It was an agricultural land.

¶885

{See also Addi. Special Land Acquisition Officer vs. F Yamanappa Basalingappa Cha/wadi [(1994) 3 SCC 323]}

¶886

In State of Kera/a vs. P.P. Hassan Koya [AIR 1968 SC 1201], the method which was generally resorted to in determining the value of the land with buildings especially those G used for business purposes, was the method of capitalization of return actually received or which might reasonably be received from the land and the buildings. Whereas the Reference Judge had multiplied the annual income by 35 times, the High Court had reduced it to 33 1/3 times. The view of the H^{HighCourt wasupheld.}

• '

589

yr

4

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.)

¶892

In Special Land Acquisition Officer, Kalinadai A (Hydro-Electric) Project, Dandali, Uttra Kannada District v. Vasant Gundu Bale [1995 Supp (4) SCC 649] it was held that:

¶893

" "

¶894

... ,.

¶895

" 2. Sri Veerappa, the learned Counsel for the State, has contended that the High Court committed grave error of B law in recording a finding that lands were possessed of potential value for building purposes. We find no force in the contention. It is seen that when 7,800 lineaments were constructed in the project area, it would be clear that a township had come into existence. It is an admitted fact c that the land under acquisition is about the township. It is also an admitted fact that in Ext. A-12 sanction was obtained on September 13, 1973 for conversion of agricultural lands into urban lands of the layout and sale of plots which could not take place due to the fact that mud D was dumped on this land. Consequently, the sanction came to be cancelled By the Assistant Commissioner. Be that as it may, the High Court on the basis of the rental value had determined compensation at the rale of Rs. 1200 per acre applying the multiplier of 15 and arrived at the net E income at Rs. 18,000 per acre. It is now settled law that the uniform rate of multiplier of 10 is being applied for the lands acquired even in the State of Karnataka. Even acceding the multiplier of 12 as held by this Court in Special Land Acquisition Officer, Davangree v. P. F Veerabhadarappa and Ors. ( 1984 ) 2 SCC 120, the claimant cannot get more than Rs. 14,000 per acre."

¶896

Hence, keeping in view the ratio of the above mentioned decisions and the facts of the present case, we modify the decision of the High Court to the extent of excluding G the payment of separate amount of compensation for the 1278 sq. mtrs. of non-agricultural land in which the 21 Godowns have been constructed would be calculated on the rental value. In other words, whereas the market value of the land would be determined at Rs.240/- per square feet, the lands on which the H

¶897

SUPREME COURT REPORTS

(2009) 11 S.C.R.

590

, J

A godowns have been constructed, the amount of compensation shall be calculated at the rental value thereof by following the method adopted by the High Court. For the said purpose, the matter is remitted to the Land Acquisition Officer.

¶902

'-

¶903

These appeals are disposed of with the

¶904

8 aforementioned observations and directions. In the facts and circumstances of the case, there shall be no order as to costs.

¶905

R.P. Appeals disposed Of.

Dy. Collector, Land Acquisition, Gujarat & Anr. v. Madhubai Gobarbhai & Anr.

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Dy. Collector, Land Acquisition, Gujarat & Anr. v. Madhubai Gobarbhai & Anr.

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