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Wednesday, September 24, 2014

Land Acquisition Act - Collector awarded at Rs. two lakhs per acre - Trail court enhanced the same to Rs. Nine lakhs and odd - High court reduced the same to Rs. four lakhs and odd - D.B. confirmed the same -claim for applying deduction for developments at 60% - Apex court held that As regards the judgments relied upon by the appellant, the same are distinguishable. In Indumati Chitaley case (supra), it was noticed that the land in question was agricultural land which could not be valued at par with the value of the non-agricultural land as was sought to be claimed on behalf of the appellant. In the said case, unlike the present case, there was no finding that the land had immediate potential for residential/commercial use. In Basant Kumar case (supra), it was observed that while considering an instance of developed land as the basis for determining the value of the agricultural land, one third of the value has to be deducted towards providing amenities like roads, parks, electricity, sewage etc. We have already noted the law laid down by this Court that extent of cut depends on individual fact situations. In Karigowda case (supra), it was observed that the existing potentiality alone has to be taken into consideration while determining the compensation. Remote beneficial factors cannot be made the basis for determining the compensation. It was further observed that comparable sales method is a preferred method over the other methods for determining the compensation.There is no dispute with these propositions but in the facts and circumstances of the case, we are unable to hold that the view taken by the High Court is vitiated by any error of principle propounded in the relied upon judgment or otherwise. We, thus, do not find any ground to interfere with the impugned judgment. The appeals are dismissed with no order as to costs.= CIVIL APPEAL NO.7314-7365 of 2005 UNION OF INDIA ….. APPELLANT VERSUS RAJ KUMAR BAGHAL SINGH (DEAD) TH. LRS. & ORS. ….. RESPONDENTS= 2014 - Sept. Month - http://judis.nic.in/supremecourt/filename=41897

  Land Acquisition Act  - Collector awarded at Rs. two lakhs per acre - Trail court enhanced the same to Rs. Nine lakhs and odd - High court reduced the same to Rs. four lakhs and odd   - D.B. confirmed the same -claim for applying deduction for developments at 60% - Apex court held that As regards the judgments relied upon by the appellant,  the  same  are distinguishable. 
 In Indumati Chitaley case (supra),  it  was  noticed  that the land in question was agricultural land which could not be valued at  par with the value of the non-agricultural land as was sought to be  claimed  on behalf of the appellant.   In the said case, unlike the present  case,  there was   no   finding   that   the   land   had   immediate    potential    for residential/commercial use
In Basant Kumar case (supra),  it  was  observed that while considering an instance  of  developed  land  as  the  basis  for determining the value of the agricultural land, one third of the  value  has
to be deducted towards providing amenities like roads,  parks,  electricity,
sewage etc.   We have already noted the law laid  down  by  this  Court  that extent of cut depends on individual  fact  situations.   In  Karigowda  case (supra), it was observed that the existing  potentiality  alone  has  to  be taken  into  consideration  while  determining  the  compensation.    
Remote beneficial  factors  cannot  be  made  the   basis   for   determining   the
compensation.   It was further observed that comparable  sales  method  is  a preferred method over the other methods for  determining  the  compensation.There  is  no  dispute  with  these  propositions  but  in  the  facts   and circumstances of the case, we are unable to hold that the view taken by  the High Court is vitiated by any error of principle propounded  in  the  relied
upon judgment or otherwise. We, thus, do not find  any  ground  to  interfere  with  the  impugned
judgment.   The appeals are dismissed with no order as to costs.=

       The
Collector vide award dated 13th August, 1991, assessed the market  value  of
the acquired land at the rate of Rs.2 lakh per acre.
The  Reference  Court
enhanced the amount of compensation to Rs.9,05000/-  per  acre.
A  learned
Single Judge of the High Court reduced the  same  to  Rs.105.80  per  square
yard vide order dated 1st April,  1999,  which  has  been  affirmed  by  the
Division Bench.=

Thus, the Division Bench has upheld the view  of  the  learned  Single
Judge in reducing the compensation from Rs.9,05,000/-  per  acre,  fixed  by
the Reference Court, to Rs.105.80 per  square  yard  fixed  by  the  learned
Single Judge in respect of the  land  covered  by  notification  dated  14th
March,  1989  and  for  the  land  covered  under  notification  dated  16th
September, 1988, the compensation was marginally enhanced  to  Rs.4,54,662/-
per acre.=

 In Chimanlal Hargovinddas vs.  Special  Land  Acquisition
Officer, Poona and anr.[4],
this Court summed up the principle as  follows:-

“4. The following factors must be etched on the mental screen:

      (1)   …………….
      [pic](2)   …………….
      (3)   …………….
      (4)   …………….

      (5)   The market value of land under acquisition has to be  determined
as on the crucial date of publication of the notification  under  Section  4
of the Land Acquisition Act (dates of notifications under Sections 6  and  9
are irrelevant).


      (6)   The determination has to be made standing on the  date  line  of
valuation (date of publication of notification under Section 4)  as  if  the
valuer is a hypothetical purchaser willing to purchase land  from  the  open
market and is prepared to pay a reasonable price as  on  that  day.  It  has
also to be assumed that the  vendor  is  willing  to  sell  the  land  at  a
reasonable price.


      (7)   In doing so by the instances method, the court has to  correlate
the market value reflected in the most comparable  instance  which  provides
the index of market value.


       (8)    Only  genuine  instances  have  to  be  taken  into   account.
(Sometimes instances are rigged up in anticipation of acquisition of land.)


      (9)   Even post-notification instances can be taken into  account  (1)
if they are very proximate, (2) genuine and (3) the acquisition  itself  has
not motivated the purchaser  to  pay  a  higher  price  on  account  of  the
resultant improvement in development prospects.


      (10)  The most comparable instances out of the genuine instances  have
to be identified on the following considerations:


      (i)   proximity from time angle,


      (ii)  proximity from situation angle.


      (11)  Having identified the  instances  which  provide  the  index  of
market [pic]value the price reflected therein may be taken as the  norm  and
the market value of the land under acquisition  may  be  deduced  by  making
suitable adjustments for the plus and minus  factors  vis-à-vis  land  under
acquisition by placing the two in juxtaposition.


      (12)  A balance-sheet of plus and minus factors may be drawn for  this
purpose and the  relevant  factors  may  be  evaluated  in  terms  of  price
variation as a prudent purchaser would do.


      (13)  The market value of the land under  acquisition  has  thereafter
to be deduced by loading the price reflected in the instance taken  as  norm
for plus factors and unloading it for minus factors.


      (14)  The exercise indicated  in  clauses  (11)  to  (13)  has  to  be
undertaken in a common sense manner  as  a  prudent  man  of  the  world  of
business  would  do.  We  may  illustrate  some   such   illustrative   (not
exhaustive) factors:

|Plus factors         |Minus factors        |
|1. smallness of size |1. largeness of area |
|2. proximity to a    |2. situation in the  |
|road                 |interior at a        |
|                     |distance from the    |
|                     |road                 |
|3. frontage on a road|3. narrow strip of   |
|                     |land with very small |
|                     |frontage compared to |
|                     |depth                |
|4. nearness to       |4. lower level       |
|developed area       |requiring the        |
|                     |depressed portion to |
|                     |be filled up         |
|5. regular shape     |5. remoteness from   |
|                     |developed locality   |
|6. level vis-à-vis   |6.  some special     |
|land under           |disadvantageous      |
|acquisition          |factor which would   |
|                     |deter a purchaser    |
|7. special value for |                     |
|an owner of an       |                     |
|adjoining property to|                     |
|whom it may have some|                     |
|very special         |                     |
|advantage            |                     |




      (15)  The evaluation of these factors of course depends on  the  facts
of each case. There cannot be any hard and fast or rigid rule. Common  sense
is the  best  and  most  reliable  guide.  For  instance,  take  the  factor
regarding the size. A building plot of land say 500 to 1000 sq. yds.  cannot
be compared with a large tract or block of land of say 10,000  sq.  yds.  or
more. Firstly while a smaller plot is within the  reach  of  many,  a  large
block of land will have to be developed by preparing a lay out, carving  out
roads,  leaving  open  space,  plotting  out  smaller  plots,  waiting   for
purchasers (meanwhile the  invested  money  will  be  blocked  up)  and  the
hazards of an entrepreneur.  The  factor  can  be  discounted  by  making  a
[pic]deduction by way  of  an  allowance  at  an  appropriate  rate  ranging
approximately between 20 per cent  to  50  per  cent  to  account  for  land
required to be set apart for  carving  out  lands  and  plotting  out  small
plots. The discounting will to some extent also depend on whether  it  is  a
rural area or urban area, whether  building  activity  is  picking  up,  and
whether waiting period during which the capital of  the  entrepreneur  would
be locked up, will be longer or shorter and the attendant hazards.


      (16)  Every case must be dealt with on its own  fact  pattern  bearing
in mind all these factors as a prudent purchaser of land in  which  position
the judge must place himself.


(17)   These  are  general  guidelines  to  be  applied  with  understanding
informed with common sense.”

We are not, however, oblivious  of  the  fact  that  normally  one-third
deduction of further amount  of  compensation  has  been  directed  in  some
cases. (See Kasturi v. State of Haryana, (2003) 1 SCC 354, Tejumal  Bhojwani
v.  State  of  U.P.,  (2003)  10  SCC  525,  V.  Hanumantha  Reddy  v.  Land
Acquisition Officer & Mandal R. Officer, (2003) 12  SCC  642,  H.P.  Housing
Board v. Bharat S. Negi, (2004) 2 SCC 184  and  Kiran  Tandon  v.  Allahabad
Development Authority, (2004) 10 SCC 745.)





31. In Registrar, University of Agricultural Sciences5 whereupon  Mr  Ranjit
Kumar placed strong reliance, the Court noticed that if the  acquisition  is
made for agricultural purpose, question of  development  thereof  would  not
arise; but if the sale instance was in respect of  a  small  piece  of  land
whereas the acquisition is for a large piece of land,  although  development
cost may not be deducted, there has to be deduction  for  largeness  of  the
land and also for the fact that these are agricultural lands. In  that  view
of the matter, deduction at the rate of 33%  made  by  the  High  Court  was
upheld. It may not, therefore, be correct to contend, as has been  submitted
by Mr. Ranjit Kumar, that there cannot be different deductions, one for  the
largeness of the land and another for development costs.”


11.   As regards the judgments relied upon by the appellant,  the  same  are
distinguishable.
 In Indumati Chitaley case (supra),  it  was  noticed  that
the land in question was agricultural land which could not be valued at  par
with the value of the non-agricultural land as was sought to be  claimed  on
behalf of the appellant.
In the said case, unlike the present  case,  there
was   no   finding   that   the   land   had   immediate    potential    for
residential/commercial use.
In Basant Kumar case (supra),  it  was  observed
that while considering an instance  of  developed  land  as  the  basis  for
determining the value of the agricultural land, one third of the  value  has
to be deducted towards providing amenities like roads,  parks,  electricity,
sewage etc.
We have already noted the law laid  down  by  this  Court  that
extent of cut depends on individual  fact  situations.   
In  Karigowda  case
(supra), it was observed that the existing  potentiality  alone  has  to  be
taken  into  consideration  while  determining  the  compensation.  
Remote
beneficial  factors  cannot  be  made  the   basis   for   determining   the
compensation.
It was further observed that comparable  sales  method  is  a
preferred method over the other methods for  determining  the  compensation.
There  is  no  dispute  with  these  propositions  but  in  the  facts   and
circumstances of the case, we are unable to hold that the view taken by  the
High Court is vitiated by any error of principle propounded  in  the  relied
upon judgment or otherwise.
12.   We, thus, do not find  any  ground  to  interfere  with  the  impugned
judgment.
13.   The appeals are dismissed with no order as to costs.

2014 - Sept. Month - http://judis.nic.in/supremecourt/filename=41897
                                                       REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                      CIVIL APPEAL NO.7314-7365 of 2005


UNION OF INDIA                                         ….. APPELLANT

VERSUS

RAJ KUMAR BAGHAL SINGH (DEAD)
TH. LRS. & ORS.                            ….. RESPONDENTS


                                    WITH


Civil Appeal No.77-273 of 2006, Civil Appeal No.613-627 of 2006, Civil
Appeal No.5058 of 2006, Civil Appeal No.4683 of 2006,
Civil Appeal No.4599 of 2006, Civil Appeal No.5059 of 2006,
Civil Appeal No.5237 of 2006, Civil Appeal No.5238 of 2006,
Civil Appeal No.4744 of 2006,
Civil Appeal No…8599  of 2014 @ SLP (C) No.21015 of 2006,
Civil Appeal No…8600 of 2014 @ SLP (C) No.21734 of 2006,
Civil Appeal No.118 of 2007, Civil Appeal No.3181 of 2007 and
Civil Appeal No.870 of 2007.


                               J U D G M E N T

ADARSH KUMAR GOEL, J.
1.    Leave granted in SLPs.
2.    These appeals have been preferred against the judgment of  the  Punjab
& Haryana  High  Court  in  a  group  of  matters  involving  the  issue  of
determination of compensation for the land acquired by  the  appellant-Union
of India in two sets of acquisition.
2.    One of the notifications under Section 4 of the Land Acquisition  Act,
1894 (for short “the Act”), in question, was issued on 14th March,  1989  to
acquire 72.9375 acres  of  land  in  villages  Bir  Kheri  Gujran,  District
Patiala, for development of military cantonment at Patiala in  Punjab.   The
Collector vide award dated 13th August, 1991, assessed the market  value  of
the acquired land at the rate of Rs.2 lakh per acre.   The  Reference  Court
enhanced the amount of compensation to Rs.9,05000/-  per  acre.   A  learned
Single Judge of the High Court reduced the  same  to  Rs.105.80  per  square
yard vide order dated 1st April,  1999,  which  has  been  affirmed  by  the
Division Bench.
3.    In the  other  set  of  acquisition,  covered  by  notification  under
Section 4 of the Act dated 16th September,  1988,  for  the  land  measuring
498.03,  the  Collector  vide  award  dated  27th   March,   1991,   awarded
compensation at the rate of Rs.2 lakh per acre  for  the  land  in  villages
Kheri Gujran and Bir Kheri Gujran and for the land in villages  Sher  Majra,
Haji Majra and Pasiana at the rate of Rs.1,50,000/- per acre. The  Reference
Court  vide  award                 dated  6th  April,  1998   enhanced   the
compensation to Rs.2,75,000/- per  acre  for  the  land  in  villages  Kheri
Gujran and Bir Kheri Gujran.  In respect of land in the  revenue  estate  of
village Haji Majra, for the land upto 500 meters on  Patiala  Sangrur  Road,
compensation was awarded at the same rate but  for  the  rest  of  the  land
compensation was awarded at Rs.2,33,750/- per acre.   For  villages  Pasiana
and Sher Majra, the rate awarded was the same as  for  village  Haji  Majra.
On further appeal, the learned Single Judge of the High Court  enhanced  the
amount of compensation to Rs.4,48,159/- per acre which has been affirmed  by
the Division Bench with slight modification by way of enhancement.
4.    Thus, the Division Bench has upheld the view  of  the  learned  Single
Judge in reducing the compensation from Rs.9,05,000/-  per  acre,  fixed  by
the Reference Court, to Rs.105.80 per  square  yard  fixed  by  the  learned
Single Judge in respect of the  land  covered  by  notification  dated  14th
March,  1989  and  for  the  land  covered  under  notification  dated  16th
September, 1988, the compensation was marginally enhanced  to  Rs.4,54,662/-
per acre.
5.    Aggrieved by the judgment of the Division Bench, the  Union  of  India
has preferred these appeals.  However, the land  owners  have  accepted  the
compensation awarded by the Division Bench.
6.    We have heard learned counsel for the parties.
7.    Learned counsel  for  the  appellant-Union  of  India  submitted  that
enhancement of compensation  beyond  the  award  of  the  Collector  by  the
Reference  Court  and  the  High  Court  was  not  justified  as  the   sale
transactions relied upon by the land owners  could  not  be  the  basis  for
fixation of compensation.  The said instances were of  land  nearer  to  the
city which land, being better located, had higher value.   It  is  for  this
reason that in respect of  the  land  covered  by  notification  dated  14th
March, 1989, rate of compensation fixed by the Reference Court  was  reduced
by the High Court.  Plea that for taking into small  instances  cut  of  60%
should be applied was wrongly disregarded.  Thus,  methodology  followed  by
the High Court was not appropriate.  Reliance has been placed  on  law  laid
down in Basant Kumar and ors. vs. Union of India and Ors.[1], Smt.  Indumati
Chitaley vs. Union  of  India  and  Anr.[2]  and  Special  Land  Acquisition
Officer vs. Karigowda and Ors.[3].  It was further submitted that  the  sale
transactions Exp. P-21 and P-22 have been wrongly relied upon  ignoring  the
objection of the appellant and on that basis the  Division  Bench  erred  in
enhancing the compensation to Rs.4,54,662/-  per  acre  in  respect  of  the
acquisition covered by notification dated 16th September, 1988.
8.    On the other hand, learned Counsel for the land owners  supported  the
view taken in the impugned judgment.  It was pointed out that the  land  was
located adjacent to the municipal limits near Golf  Course  and  residential
area.  Its distance was 3 kms. from Phagwara Chowk.  The land had  potential
value for development into residential and commercial area.
9.    We have considered the  rival  submissions.   Before  considering  the
merits of the rival contentions, we consider it appropriate to refer to  the
discussion on the issue by the High Court which is as follows:-
“In the present case, situation is  altogether  different.   While  deciding
issue regarding cut, referred to above, argument of counsel  for  the  Union
of India that cut imposed is required to be enhanced is also  liable  to  be
rejected.  In view of situation the land under acquisition, as  referred  to
above, cut imposed to the extent of 20% was  perfectly  justified.   Counsel
for the Union of India has tried to support his argument by  citing  various
judgments but no benefit of those judgments can  be  extended  to  Union  of
India because at the time when matter was argued before Additional  District
Judge, no serious dispute was raised by Union of India  regarding  potential
value of the land under acquisition.  No evidence was led to show  that  the
land acquired had  no  potential  for  developing  it  into  residential  or
commercial area.  Argument to impose higher cut was rightly rejected by  the
learned Single Judge, after taking note of evidence on record.

      Argument of counsel for the Union of India that  since  the  land  was
situated at a distance of 1 to 1-1/2  kms  of  municipal  limits,  as  such,
higher cut be imposed, is not justified, in view of evidence on record.   It
had come in evidence that the land under acquisition was  situated  next  to
the municipal limits and was situated very near to golf course.  In view  of
this, no case is made out for further cut as prayed for.

      In the present case, learned Single Judge has rightly placed  reliance
to award compensation upon  sale  instance  Ex.  P-21  and  Ex.P-22.   While
determining compensation, reliance has also been placed on statements PW  4,
P27, PW10.  It  had  come  on  record  that  land  subject  matter  of  sale
instance, referred to above, was situated within a distance of 20 killas  or
less from the land  under  acquisition.   Sale  deed  Ex.  P23  was  rightly
ignored as it pertained to constructed house and there was  no  evidence  on
record to show that what was the value of land  underneath  the  constructed
portion of the house.  Under these  circumstances,  this  Court  is  of  the
opinion that award of compensation @ Rs.105.80 paisa per square yard to  the
claimants by the learned Single Judge was perfectly justified.”

10.   It is well settled in  determining  compensation  for  acquired  land,
price paid in a bona fide transaction of sale  by  a  willing  seller  to  a
willing buyer is adopted subject  to  such  transaction  being  adjacent  to
acquired land, proximate to the date of acquisition and  possessing  similar
advantages.  Of course, there are other  well  known  methods  of  valuation
like opinion of experts and yield method.  In absence of any evidence  of  a
similar transaction, it is permissible to take into account  transaction  of
nearest land around the date of notification under Section 4 of the  Act  by
making a suitable allowance.  There can be no  fixed  criteria  as  to  what
would be the suitable addition or subtraction from the value of  the  relied
upon transaction.  In Chimanlal Hargovinddas vs.  Special  Land  Acquisition
Officer, Poona and anr.[4], this Court summed up the principle as  follows:-

“4. The following factors must be etched on the mental screen:

      (1)   …………….
      [pic](2)   …………….
      (3)   …………….
      (4)   …………….

      (5)   The market value of land under acquisition has to be  determined
as on the crucial date of publication of the notification  under  Section  4
of the Land Acquisition Act (dates of notifications under Sections 6  and  9
are irrelevant).


      (6)   The determination has to be made standing on the  date  line  of
valuation (date of publication of notification under Section 4)  as  if  the
valuer is a hypothetical purchaser willing to purchase land  from  the  open
market and is prepared to pay a reasonable price as  on  that  day.  It  has
also to be assumed that the  vendor  is  willing  to  sell  the  land  at  a
reasonable price.


      (7)   In doing so by the instances method, the court has to  correlate
the market value reflected in the most comparable  instance  which  provides
the index of market value.


       (8)    Only  genuine  instances  have  to  be  taken  into   account.
(Sometimes instances are rigged up in anticipation of acquisition of land.)


      (9)   Even post-notification instances can be taken into  account  (1)
if they are very proximate, (2) genuine and (3) the acquisition  itself  has
not motivated the purchaser  to  pay  a  higher  price  on  account  of  the
resultant improvement in development prospects.


      (10)  The most comparable instances out of the genuine instances  have
to be identified on the following considerations:


      (i)   proximity from time angle,


      (ii)  proximity from situation angle.


      (11)  Having identified the  instances  which  provide  the  index  of
market [pic]value the price reflected therein may be taken as the  norm  and
the market value of the land under acquisition  may  be  deduced  by  making
suitable adjustments for the plus and minus  factors  vis-à-vis  land  under
acquisition by placing the two in juxtaposition.


      (12)  A balance-sheet of plus and minus factors may be drawn for  this
purpose and the  relevant  factors  may  be  evaluated  in  terms  of  price
variation as a prudent purchaser would do.


      (13)  The market value of the land under  acquisition  has  thereafter
to be deduced by loading the price reflected in the instance taken  as  norm
for plus factors and unloading it for minus factors.


      (14)  The exercise indicated  in  clauses  (11)  to  (13)  has  to  be
undertaken in a common sense manner  as  a  prudent  man  of  the  world  of
business  would  do.  We  may  illustrate  some   such   illustrative   (not
exhaustive) factors:

|Plus factors         |Minus factors        |
|1. smallness of size |1. largeness of area |
|2. proximity to a    |2. situation in the  |
|road                 |interior at a        |
|                     |distance from the    |
|                     |road                 |
|3. frontage on a road|3. narrow strip of   |
|                     |land with very small |
|                     |frontage compared to |
|                     |depth                |
|4. nearness to       |4. lower level       |
|developed area       |requiring the        |
|                     |depressed portion to |
|                     |be filled up         |
|5. regular shape     |5. remoteness from   |
|                     |developed locality   |
|6. level vis-à-vis   |6.  some special     |
|land under           |disadvantageous      |
|acquisition          |factor which would   |
|                     |deter a purchaser    |
|7. special value for |                     |
|an owner of an       |                     |
|adjoining property to|                     |
|whom it may have some|                     |
|very special         |                     |
|advantage            |                     |




      (15)  The evaluation of these factors of course depends on  the  facts
of each case. There cannot be any hard and fast or rigid rule. Common  sense
is the  best  and  most  reliable  guide.  For  instance,  take  the  factor
regarding the size. A building plot of land say 500 to 1000 sq. yds.  cannot
be compared with a large tract or block of land of say 10,000  sq.  yds.  or
more. Firstly while a smaller plot is within the  reach  of  many,  a  large
block of land will have to be developed by preparing a lay out, carving  out
roads,  leaving  open  space,  plotting  out  smaller  plots,  waiting   for
purchasers (meanwhile the  invested  money  will  be  blocked  up)  and  the
hazards of an entrepreneur.  The  factor  can  be  discounted  by  making  a
[pic]deduction by way  of  an  allowance  at  an  appropriate  rate  ranging
approximately between 20 per cent  to  50  per  cent  to  account  for  land
required to be set apart for  carving  out  lands  and  plotting  out  small
plots. The discounting will to some extent also depend on whether  it  is  a
rural area or urban area, whether  building  activity  is  picking  up,  and
whether waiting period during which the capital of  the  entrepreneur  would
be locked up, will be longer or shorter and the attendant hazards.


      (16)  Every case must be dealt with on its own  fact  pattern  bearing
in mind all these factors as a prudent purchaser of land in  which  position
the judge must place himself.


(17)   These  are  general  guidelines  to  be  applied  with  understanding
informed with common sense.”











Again in Viluben Jhalejar Contractor (D) by LRs. vs. State of  Gujarat  [5],
it was observed:-

“24. The purpose for which acquisition is made is  also  a  relevant  factor
for determining the market  value.  In  Basavva  v.  Spl.  Land  Acquisition
Officer, (1996) 6 SCC 640, deduction to the extent of 65% was  made  towards
development charges.





25. In Bhagwathula Samanna, (1991) 4 SCC 506, it has  been  held:  (SCC  pp.
510-11, para 11)





“11. The principle of deduction in the land value covered by the  comparable
sale is thus adopted in order to arrive at the market value of the  acquired
land. In applying the principle it is necessary  to  consider  all  relevant
facts. It is not the extent of the area covered under the acquisition  which
is the only relevant factor. Even in the vast area there may be  land  which
is fully developed having all amenities  and  situated  in  an  advantageous
position. If smaller area within the large tract is  already  developed  and
suitable for building purposes and have in  its  vicinity  roads,  drainage,
electricity, communications, etc. then the  principle  of  deduction  simply
for the reason that it is part of the  large  tract  acquired,  may  not  be
justified.”





26. In L. Kamalamma, (1998) 2 SCC 385, this Court held: (SCC  p.  387,  para
6)


“Ext. B-30 is a sale deed  dated  9-8-1976,  the  transaction  having  taken
place prior to eight months from the issue of the  preliminary  notification
for acquisition of land in the present case. Having found that the piece  of
land referred in Ext. B-30 is situated very close  to  the  lands  that  are
acquired under the notification in question  the  Reference  Court  and  the
High Court relied upon the said document and, in our view, rightly.  Further
when no sales of comparable land were available where large chunks  of  land
had been sold, even land transactions in respect of smaller extent  of  land
could be taken note of as indicating the price that it may fetch in  respect
of large tracts of  land  by  making  appropriate  deductions  such  as  for
development of the  land  by  providing  enough  space  for  roads,  sewers,
drains, expenses involved in formation of a  layout,  lump  sum  payment  as
also the waiting period  required  for  selling  the  sites  that  would  be
formed.”





27. In Administrator General  of  W.B.  v.  Collector,  (1988)  2  SCC  150,
deduction to the extent of 53% was allowed.





28. In K.S. Shivadevamma v. Asstt.  Commr.  and  Land  Acquisition  Officer,
(1996) 2 SCC 62, it was held: (SCC p. 65, para 10)





“10. It is then contended that 53% is not automatic  but  depends  upon  the
nature of the development and the stage of development. We are  inclined  to
agree with the learned counsel that the extent  of  deduction  depends  upon
development need in each case. Under the  Building  Rules  53%  of  land  is
required to be left out. This Court has laid as  a  general  rule  that  for
laying the roads and other amenities 33-1/3% is  required  to  be  deducted.
Where the development has already taken  place,  [pic]appropriate  deduction
needs to be made. In this case, we do not find  any  development  had  taken
place as on that date. When we are determining  compensation  under  Section
23(1), as on the date  of  notification  under  Section  4(1),  we  have  to
consider the situation of the land development, if already made,  and  other
relevant facts as on that date.  No  doubt,  the  land  possessed  potential
value, but no development had taken place as on the date.  In  view  of  the
obligation on the part of the owner to  hand  over  the  land  to  the  City
Improvement Trust for roads and for other amenities and his  requirement  to
expend money for laying the roads, water  supply  mains,  electricity  etc.,
the deduction of 53% and further deduction towards development charges @ 33-
1/3%, as ordered by the High Court, was not illegal.”





29. In Hasanali Khanbhai & Sons v. State of Gujarat (1995)  5  SCC  422  and
Land Acquisition Officer v. Nookala Rajamallu, (2003) 12 SCC  334  :  (2003)
10 Scale 307, it  has  been  noticed  that  where  lands  are  acquired  for
specific purposes deduction by way of development charges is permissible.





30. We are not, however, oblivious  of  the  fact  that  normally  one-third
deduction of further amount  of  compensation  has  been  directed  in  some
cases. (See Kasturi v. State of Haryana, (2003) 1 SCC 354, Tejumal  Bhojwani
v.  State  of  U.P.,  (2003)  10  SCC  525,  V.  Hanumantha  Reddy  v.  Land
Acquisition Officer & Mandal R. Officer, (2003) 12  SCC  642,  H.P.  Housing
Board v. Bharat S. Negi, (2004) 2 SCC 184  and  Kiran  Tandon  v.  Allahabad
Development Authority, (2004) 10 SCC 745.)





31. In Registrar, University of Agricultural Sciences5 whereupon  Mr  Ranjit
Kumar placed strong reliance, the Court noticed that if the  acquisition  is
made for agricultural purpose, question of  development  thereof  would  not
arise; but if the sale instance was in respect of  a  small  piece  of  land
whereas the acquisition is for a large piece of land,  although  development
cost may not be deducted, there has to be deduction  for  largeness  of  the
land and also for the fact that these are agricultural lands. In  that  view
of the matter, deduction at the rate of 33%  made  by  the  High  Court  was
upheld. It may not, therefore, be correct to contend, as has been  submitted
by Mr. Ranjit Kumar, that there cannot be different deductions, one for  the
largeness of the land and another for development costs.”


11.   As regards the judgments relied upon by the appellant,  the  same  are
distinguishable.  In Indumati Chitaley case (supra),  it  was  noticed  that
the land in question was agricultural land which could not be valued at  par
with the value of the non-agricultural land as was sought to be  claimed  on
behalf of the appellant.  In the said case, unlike the present  case,  there
was   no   finding   that   the   land   had   immediate    potential    for
residential/commercial use. In Basant Kumar case (supra),  it  was  observed
that while considering an instance  of  developed  land  as  the  basis  for
determining the value of the agricultural land, one third of the  value  has
to be deducted towards providing amenities like roads,  parks,  electricity,
sewage etc.  We have already noted the law laid  down  by  this  Court  that
extent of cut depends on individual  fact  situations.   In  Karigowda  case
(supra), it was observed that the existing  potentiality  alone  has  to  be
taken  into  consideration  while  determining  the  compensation.    Remote
beneficial  factors  cannot  be  made  the   basis   for   determining   the
compensation.  It was further observed that comparable  sales  method  is  a
preferred method over the other methods for  determining  the  compensation.
There  is  no  dispute  with  these  propositions  but  in  the  facts   and
circumstances of the case, we are unable to hold that the view taken by  the
High Court is vitiated by any error of principle propounded  in  the  relied
upon judgment or otherwise.
12.   We, thus, do not find  any  ground  to  interfere  with  the  impugned
judgment.
13.   The appeals are dismissed with no order as to costs.


                                                            ….…………………………….J.
                                                         [ V. GOPALA GOWDA ]

                                                           ….……………………………..J.
NEW DELHI                    [ ADARSH KUMAR GOEL ]
September  9, 2014

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[1]    (1996) 11 SCC 542
[2]    (1995) Suppl. 4 SCC 219
[3]    (2010) 5 SCC 708
[4]    (1988) 3 SCC 751
[5]    (2005) 4 SCC 789

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