Land acquisition - fixation of compensation - The compensation determined on the basis of a notification five years later cannot be a yardstick for determining compensation of the land which is subject matter of present acquisition years earlier. A compensation of Rs. 297/- per square yard was awarded for land acquired for the purpose of GDA vide notification dated 28.2.1987 and 16.8.1988 (Sr. No. 4 & 5 in the above table). The said acquisition was five years after the acquisition in question. The development activity initiated vide notification dated 26.6.1982 would be relevant to determine the market value on account of acquisition by virtue of the subsequent notification, but time gap of more than five years will not entail the same amount of compensation in respect of the land acquired five years earlier., the High Court has failed to note that the date of notification for the acquisition of land for the benefit of Parishad is five years earlier than those in the judgments relied upon by the High Court.
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 337 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4445 OF 2020)
U.P. AWAS EVAM VIKASH PARISHAD .....APPELLANT(S)
VERSUS
ASHA RAM (D) THR. LRS & ORS. .....RESPONDENT(S)
WITH
CIVIL APPEAL NO. 360 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5184 OF 2020)
CIVIL APPEAL NO. 340 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4447 OF 2020)
CIVIL APPEAL NO. 338 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4444 OF 2020)
CIVIL APPEAL NO. 361 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5185 OF 2020)
CIVIL APPEAL NO. 362 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5188 OF 2020)
2
CIVIL APPEAL NO. 348 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4685 OF 2020)
CIVIL APPEAL NO. 343 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4680 OF 2020)
CIVIL APPEAL NO. 382 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5244 OF 2020)
CIVIL APPEAL NO. 363 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5190 OF 2020)
CIVIL APPEAL NO. 381 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5242 OF 2020)
CIVIL APPEAL NO. 339 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4446 OF 2020)
CIVIL APPEAL NO. 349 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4686 OF 2020)
CIVIL APPEAL NO. 383 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5245 OF 2020)
CIVIL APPEAL NO. 350 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4687 OF 2020)
CIVIL APPEAL NO. 351 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4688 OF 2020)
CIVIL APPEAL NO. 352 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4690 OF 2020)
CIVIL APPEAL NO. 384 OF 2021
3
(ARISING OUT OF SLP (CIVIL) NO. 5246 OF 2020)
CIVIL APPEAL NO. 341 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4448 OF 2020)
CIVIL APPEAL NO. 364 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5191 OF 2020)
CIVIL APPEAL NO. 353 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4691 OF 2020)
CIVIL APPEAL NO. 354 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4692 OF 2020)
CIVIL APPEAL NO. 385 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5247 OF 2020)
CIVIL APPEAL NO. 357 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4695 OF 2020)
CIVIL APPEAL NO. 365 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5192 OF 2020)
CIVIL APPEAL NO. 355 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4693 OF 2020)
CIVIL APPEAL NO. 366 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5193 OF 2020)
CIVIL APPEAL NO. 347 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4684 OF 2020)
CIVIL APPEAL NO. 342 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4679 OF 2020)
4
CIVIL APPEAL NO. 367 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5194 OF 2020)
CIVIL APPEAL NO. 358 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4696 OF 2020)
CIVIL APPEAL NO. 368 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5195 OF 2020)
CIVIL APPEAL NO. 356 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4694 OF 2020)
CIVIL APPEAL NO. 369 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5197 OF 2020)
CIVIL APPEAL NO. 344 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4681 OF 2020)
CIVIL APPEAL NO. 370 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5198 OF 2020)
CIVIL APPEAL NO. 371 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5230 OF 2020)
CIVIL APPEAL NO. 372 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5231 OF 2020)
CIVIL APPEAL NO. 373 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5232 OF 2020)
CIVIL APPEAL NO. 374 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5233 OF 2020)
CIVIL APPEAL NO. 345 OF 2021
5
(ARISING OUT OF SLP (CIVIL) NO. 4682 OF 2020)
CIVIL APPEAL NO. 386 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5248 OF 2020)
CIVIL APPEAL NO. 346 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4683 OF 2020)
CIVIL APPEAL NO. 375 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5236 OF 2020)
CIVIL APPEAL NO. 376 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5237 OF 2020)
CIVIL APPEAL NO. 377 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5238 OF 2020)
CIVIL APPEAL NO. 387 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5249 OF 2020)
CIVIL APPEAL NO. 359 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4698 OF 2020)
CIVIL APPEAL NO. 378 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5239 OF 2020)
CIVIL APPEAL NO. 379 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5240 OF 2020)
AND
CIVIL APPEAL NO. 380 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5241 OF 2020)
6
J U D G M E N T
HEMANT GUPTA, J.
1. The present appeals arise out of an order passed by the Division Bench
of the High Court of Judicature at Allahabad on 19.07.2019 whereby a
compensation of Rs. 297/- per square yard was awarded for the land
acquired in six villages apart from the statutory benefits. In the present
set of 51 appeals, 38 appeals pertain to land situated at Village Prahlad
Garhi; 2 appeals pertain to land situated at Village Jhandapur; 3 appeals
pertain to land situated at Village Sahibabad; 2 appeals pertain to land
situated at Village Jhandapur/ Sahibabad; 1 appeal pertains to land
situated at Village Arthala and 5 appeals pertain to land situated at
Village Makanpur.
2. The appellant – U.P. Awas Evam Vikas Parishad1
has been constituted
under the Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 19652
. A
notification was published on 26.06.1982 by the Parishad under Section
28 of the Act intending to acquire 1229.914 acres of land. Subsequently,
a notification under Section 32 of the Act was published on 28.02.1987.
Sections 28 and 32 of the Act are equivalent to Sections 4 and 6 of the
Land Acquisition Act, 18943
.
1 For Short, the ‘Parishad’
2For short the ‘Act’
3 For short, the ‘LA Act’
7
3. The Special Land Acquisition Officer announced an award on 27.02.1989
awarding compensation of Rs. 50/- per square yard in respect of land of
all the six villages and compensation of Rs. 35/- per square yard was
awarded in respect of land owners owning more than 8 acres. The area
of the land for which the compensation was awarded in the six villages is
as under:
Sr. No. Name of Village Area (In Acres)
1 Arhtala 358.95
2 Jhandapur 36.947
3 Prahladgarhi 437.379
4 Makanpur 76.6156
5 Mahiuddin-Re-Kanawani 141.0734
6 Sahibabad 107.05
Total 1157.895
The remaining area measuring 72.019 acres was the land of the
Gram Panchayat or the State Government, for which no compensation
was awarded by Special Land Acquisition Officer.
4. The land owners being aggrieved of the compensation awarded by the
Special Land Acquisition Officer sought a Reference for determining the
market value. The Learned Additional District Judge while deciding the
Reference awarded Rs. 120/- per square yard as the compensation apart
from the statutory benefits vide award dated 23.05.2000.
5. The landowners as well as the Parishad filed appeals against the
decision of the Reference Court. Such appeals were decided separately
by the High Court in respect of land acquired by the above stated
notification under Section 28 of the Act. The first appeal in U.P. Avas
8
Evam Vikash Parishad v. Jawahar Lal & Ors.
4 filed by the Parishad in
respect of land situated in Village Prahladgarhi was dismissed on
21.07.2015. The land owners have relied upon the following three sale
deeds in appeal before the High Court to claim higher compensation:
Sr. No. Date of Sale Deed Area/Village Rate per square
Yard
1 26.12.80 130 sq. mtr./Village
Sahibabad
Rs. 180/-
2 12.5.80 125 sq. mtr./ Village
Sahibabad
Rs. 150/-
3 19.6.82 242 sq. mtr./ Village
Sahibabad
Rs. 150/-
6. The High Court considering the three sale deeds held as under:
“28. Considering the aforesaid facts and circumstances as also
the factum that the court below has already applied deduction of
25%, we do not find any fault on the part of Reference Court in
determining market value of acquired land at Rs. 120/- per sq.
yard. It can neither be said to be excessive or unreasonable, nor it
can be said that appropriate principles in determining market
value have not been considered by court below. The two
judgments cited by appellant do not help it in any manner since
the principles laid down therein have already been noticed by
court below. In these facts and circumstances, in our view, the
aforesaid point for determination formulated above is answered in
favour of respondents and against appellant.”
7. The compensation awarded @ Rs.120/- per square yard vide order dated
21.7.2015 attained finality when the Special Leave Petition (Civil) No.
4636 of 2016 (U.P. Avas Evam Vikas Parishad v. Jawahar Lal (D) through
LRs & Ors.) filed by the Parishad was dismissed on 28.03.2016.
8. Another appeal Asha Ram & Anr. v. U.P. Awas Evam Vikash
4 First Appeal No. 56 of 2005 decided on 21.7.2015
9
Parishad & Anr.
5
arising against the award of the Reference Court
dated 23.5.2000 filed by the land owners in respect of land situated in
Village Jhandapur was initially dismissed by the High Court on
16.12.2015. The land owners in the appeal relied upon the following
sale deeds in support of their contention for determining the market
value:
Sl. No. Date Nature of
document
Area Rate (in Rs.)
1 05/05/82 Sale deed 125 sq. yard 150/- per sq. yard
2 08/06/82 Sale deed 50 sq. yard 200/- per sq. yard
3 15/01/86 Sale deed 60 sq. yard 200/- per sq. yard
4 13/01/86 Sale deed 107 sq. yard 200/- per sq. yard
9. The sale deeds dated 13.1.1986 and 15.1.1986 were not relied upon by
the High Court for the reason that such sale instances were of more than
3½ years after the publication of notification intending to acquire land.
The High Court found that if the compensation has to be awarded on the
basis of sale deeds dated 5.5.1982 and 8.6.1982, the compensation
would be lower than what has been awarded by the Reference Court.
The Court in its order dated 28.10.2015 held as under:
“13. We find that reliance placed by appellants on the aforesaid
sale deeds would not help claimants in any manner. In our view
the court below has already been considerate enough in
determining market value at Rs. 120/- per square yard else the
aforesaid two sale deeds, if relied, would have cause in a lower
market value. Before elaborating our aforesaid observation we
5 First Appeal No. 827 of 2000 decided on 28.10.2015
10
find it appropriate to remind ourselves with principles laid down in
last several decades on the question how market value of land
acquired forcibly under provisions of Act, 1894 should be
determined.”
10. In Asha Ram & Anr. v. U.P. Awas Evam Vikas Parishad & Anr.
6
, the
above order of the High Court was taken as the basis to determine the
market value of land acquired in the said appeal. Another appeal by the
land owners Asha Ram & Anr. v. U.P. Awas Evam Vikas Parishad &
Anr.
7
was decided on 01.03.2016, relying upon the earlier two orders.
11. The aforesaid orders dated 28.10.2015; 16.12.2015 and 1.3.2016 were
set aside by this Court on 9.11.2017 and the matters were remanded to
the High Court vide the following order-
“Leave granted.
Learned counsel for the parties have filed certain documents
along with the Special Leave Petitions. The said documents are
taken on record, particularly the decision of this Court in SLP(C)
Nos.1506-1517/2016, titled as Pradeep Kapoor vs. State of
U.P. documents were not on record before the High Court. They
are taken on record. These appeals are remitted back to the High
Court for deciding afresh. A prayer is made for consideration of
the aforesaid documents. It is open to the parties if they so desire
to adduce additional evidence, in that event, the High Court may
ask Reference Court to record additional evidence and to record
finding and then High Court may decide the appeals afresh.
The judgment of the High Court is set aside and the appeals are
remitted to the High Court for being decided afresh in accordance
with law.
The appeals are disposed of accordingly.”
12. The IA to produce additional documents as mentioned in the above
6 First Appeal No. 552 of 2001 decided on 16.12.2015
7 First Appeal No. 412 of 2001 decided on 1.3.2016
11
order has been placed along with the written submissions by the land
owners before this Court. Apart from the award by the Special Land
Acquisition Officer and the order of the Reference Court, various other
judgments pertaining to different acquisitions were produced.
13. The High Court thereafter decided the 53 appeals on 19.07.2019,
awarding a sum of Rs. 297/- per square yard as compensation for
acquiring the land of the six villages as mentioned in the notification. 51
appeals were preferred in respect of acquisition of land by the Parishad
and the others are in respect of the acquisition by Ghaziabad
Development Authority8
. The High Court proceeded as if the notification
for the acquisition for the Parishad and GDA is the same and for the
same acquisition proceedings. The land acquired by the Parishad vide
notification dated 26.06.1982 is the subject matter of the present
appeals. It is pertinent to note that the said land is not for the benefit of
the GDA. The High Court in the impugned judgment held as under:
“Accordingly, we find that all the appellants in both the sets of first
appeals are entitled to compensation at the rate of Rs. 297/- per
square yard. We have mentioned in detail regarding the other
similar cases where compensation has been awarded at the rate
of Rs. 297/- per square yard even though there were gaps
between the different notifications, but the villages are same. As
discussed above, Narendra (supra) lays emphasis on fair
compensation and on parity of compensation in respect of
similarly situated land. A careful analysis of the said judgment
clearly shows that gaps of a few years in the notifications have
been ignored by the Supreme Court and this Court also in the
subsequent judgment in First Appeal No. 522 of 2009, Pradeep
Kumar v. State of U.P., which has been affirmed by the Supreme
Court. We do not find any reason for not awarding compensation
8 For short, ‘GDA’
12
at the same rate. Accordingly, the orders of the Reference Court
dated 13th April, 1998, 18th February, 2000, 23rd May, 2000,
29th March, 2001 and 02nd April, 2002, which are under challenge
in the respective appeals, are set aside. The appellants are
entitled to compensation of the land at the rate of Rs. 297/- per
square yard along with other statutory benefits under the law
which shall be calculated and paid to them expeditiously within six
months from today.”
14. The High Court referred to the judgment of this Court in Narendra &
Ors. v. State of Uttar Pradesh & Ors.
9
wherein compensation of Rs.
297/- per square yard was provided in respect of acquisition by the State
vide notification dated 12.9.1986 for the land situated in Village
Makanpur for planned development of Vaishali. The High Court, in a
judgment under appeal, had restricted the amount of compensation to
the amount on which Court fees was affixed. This Court held as under:
“16) Simply because the appellants had paid court fee on the
claim at the rate of Rs.115/- square yards could not be the reason
to deny the compensation at a higher rate. This could be taken
care of by directing the appellants to pay the difference in court
fee after calculating the same at the rate of Rs.297/- per square
yards.”
15. In another matter referred by the High Court, Pradeep Kumar v.
State of U.P.
10
, this Court had remanded the appeals to the High Court
on 16.2.2016 as it awarded Rs.135/- per square yard as compensation
vide its order dated 15.4.2015. The appeals arose out of a notification
under Section 4 of the LA Act published on 15.03.1988 for acquisition of
land in Village Makanpur for planned industrial development at New
9 Civil Appeal Nos. 10429-10430 of 2017 decided on 11.09.2017
10 (2016) 6 SCC 308
13
Okhla Industrial Development Authority11 constituted under “The Uttar
Pradesh Industrial Area Development Act, 1976”. After remand by this
Court, the High Court on 21.04.2016 awarded Rs. 297/- per square yard
as the compensation for the land acquired.
16. Mr. Mishra, learned senior counsel appearing for the Parishad, argued
that the High Court has ignored the date of notification i.e. 26.6.1982 by
which the land in the present matter was acquired. In the matter of
Pradeep Kumar, the notification was dated 15.03.1988 in respect of
land located in village Makanpur at Noida. However, in the present
matter, more than 1000 acres of land situated in five other villages is to
be acquired. The land in district Ghaziabad sought to be acquired by the
Parishad is on the northern side of the National Highway-24 which
passes through Village Makanpur, whereas the land on the southern side
of National Highway is a part of Noida, District Gautam Budh Nagar.
Noida is a well-developed town as compared to the developing town of
Ghaziabad situated on the other side of the National Highway.
17. Mr. Gupta, on the other hand, vehemently argued on behalf of the land
owners that the land situated in Village Makanpur was the subject
matter of acquisition for Noida as well as GDA apart from the Parishad.
It was contended that the purpose for which the land is acquired or the
authority which acquired the land is inconsequential as the land owners
are entitled to compensation irrespective of any such factors. In the
written submissions, reference has been made to the statement of
11 For short, ‘Noida’
14
Inderraj Singh (PW-1) to submit that at the time of acquisition, there
were industrial units as well as residential colonies of Vaishali and
Kaushambi. Reliance was placed upon finding of the Reference Court
which is to the following effect:
“10. From the above averments it is proved that the position and
status of disputed acquired land is of high quality and these lands
are of good potential with a view to productivity and other usages
and is fit for residential and commercial capacity.”
18. In the written submissions filed on behalf of the land owners, two maps
have also been referred. First map is of Ghaziabad which is on the
northern side of National Highway-24 and the second map is stated to
be of an area now covered within the jurisdiction of Noida, i.e. in respect
of Chalera Banger, Bhangel Begampur, Nagla Charandas, Tilpatabad,
Kakrana Khawaspur. Such map submitted with the written submissions is
not legible. It is submitted that the Village Makanpur is close to Delhi as
compared to the above said villages which are now parts of Noida. It
has been stated that a compensation of Rs.297/- per square yard has
been awarded under the notification dated 19.12.1980 for the land
situated in Village Makanpur, hence, the present land owners are also
entitled to the same amount of compensation. As per the argument of
Mr. Gupta, the land acquired is better located than the land which is the
subject matter of acquisition for Noida. The distances of the villages
presently under the jurisdiction of Noida and Ghaziabad from the
borders of Delhi have also been submitted before us. Though, such
15
distances are not part of the pleadings or evidence before the Reference
Court or the High Court, the said table has been reproduced hereunder:
“There is no dispute that landowners of village across NH-24, examples of which were cited before this Court during the course of
hearing have all been awarded compensation @ Rs.297/- per
square yard. The approximate distance to Delhi from the villages
involved in the present case and those across NH-24 is as under:
S.
No.
Village under
Ghaziabad
jurisdiction
Approximate
Distance
(in KM)
Village under Ghaziabad
jurisdiction at the
relevant time
[presently under Noida]
Approximate
Distance
[in KM]
1 Arthla 6 Chalera Banger 6.5
2 Jhandapur 3.5 Bhangel 12
3 Prahladgarhi 3.5 Begampur 8
4 Makanpur 3 Nagla Charandas 13
5 Mohiuddinpur
Kanavani
6 Tilpatabad 14
6 Sahibabad 3.5 Chhalera Khadar 5
7 -- -- Kakrana
Khawaspur
13
The above table would show that for villages which are at a distance of 13-14 km from Delhi, have been awarded compensation
@ Rs.297/- per square yard and therefore the respondents in the
present case deserve compensation at least @ Rs.297/- per
square yard, if not more.”
19. In the written submissions submitted on behalf of Shri Rohit Kumar
Singh, learned counsel for the land owners, it is asserted that the State
Government has decided that 731 acres of land would be carved out
from the total land acquired in 1982 and handed over to the GDA. It is
also submitted that a notification was issued under Section 4 of the LA
Act on 28.2.1987 in respect of 731 acres of land. In the present set of
appeals, we are not dealing with the acquisition of land intended to be
16
acquired by way of a notification under Section 4 of the LA Act dated
28.2.1987. Mr. Singh in the written submissions has submitted that the
possession was taken over by the GDA on 14.6.1988 and 29.6.1988
which was based upon development work taken place from 1982
onwards. We do not find such facts emanate from the orders passed by
the Special Land Acquisition Officer, the Reference Court and the order
of the High Court. The land acquired by the GDA is not part of
determination of the compensation in the present set of appeals.
20. The principles of determining the market value are delineated under
Sections 23 and 24 of the LA Act and are well-settled by the plethora of
judgments on the said subject matter. The provisions of the LA Act and
some of the judgments are referred hereinafter-
“23. Matters to be considered in determining compensation. – (1)
In determining the amount of compensation to be awarded for
land acquired under this Act, the Court shall take into
considerationfirst, the market value of the land at the date of the publication of
the notification under Section 4, sub-section (1);
xx xx xx
24. Matters to be neglected in determining compensation. –
xx xx xx
fifthly, any increase to the value of the land acquired likely to
accrue from the use to which it will be put when acquired;
sixthly, any increase to the value of the other land of the person
interested likely to accrue from the use to which the land acquired
will be put;”
17
21. A three Judge Bench of this Court12 indicated methods of valuation to be
adopted to ascertain the market value of land on the date of the
notification under Section 4(1) as: (i) opinion of experts, (ii) the price
paid within a reasonable time in bona fide transactions of purchase of
the lands acquired or the lands adjacent to the lands acquired and
possessing similar advantages; and (iii) a number of years' purchase of
the actual or immediately prospective profits of the lands acquired.
22. This Court13 held that the acid test which the court should always adopt
in determining the market value in matters of compulsory acquisition is
to eschew feats of imagination and sit in the armchair of a prudent
willing purchaser. It was held as under:
“6. No prudent purchaser would purchase large extent of land on
the basis of sale of a small extent of land in the open market. The
acid test the court should always adopt in determining market
value in the matter of compulsory acquisition would be to eschew
feats of imagination, sit in the armchair of a prudent willing
purchaser, it should consider whether the willing vendee would
offer the rate at which the trial court proposes to determine the
compensation. Taking these facts into consideration, we are of the
view that the reasonable and adequate compensation for the
lands would be at a net rate of Rs 22 per sq. mtr., after giving
deduction of 1/3rd of the amount towards developmental charges.
Therefore, the claimants would be entitled to the compensation @
Rs 22 per sq. mtr. They are also entitled to the statutory benefits
on the enhanced compensation.”
23. This Court14 has also held that in fixation of rate of compensation under
the Land Acquisition Act, there is always some element of guesswork but
12 Smt. Tribeni Devi & Ors. v. Collector of Ranchi and Vice Versa, (1972) 1 SCC 480
13 Gujarat Industrial Development Corpn. v. Narottambhai Morarbhai & Anr., (1996) 11 SCC 159
14 Land Acquisition Officer v. B. Vijender Reddy & Ors., (2001) 10 SCC 669
18
that has to spring from the totality of evidence, the pattern of rate, the
pattern of escalation and escalation of price in the years preceding and
succeeding the notification under Section 4 of the LA Act. The Court has
held that:
“13. The first question we proceed to consider is, whether the
High Court was right to enhance the rate from the rate recorded in
Exhibits A-1 and A-2 by Rs 10,000 per acre per year for three
years. It is true, in the fixation of rate of compensation under the
Land Acquisition Act, there is always some element of guesswork.
But that has to be based on some foundation. It must spring from
the totality of evidence, the pattern of rate, the pattern of
escalation and escalation of price in the years preceding and
succeeding Section 4 notification etc. In other words, the
guesswork could reasonably be inferable from it. It is always
possible to assess the rate within this realm. In the present case,
we find there are three exemplars i.e. Exhibits A-1 and A-2 which
are three years preceding the date of notification and Exhibit A-3
which is of the same point of time when Section 4 notification was
issued.”
24. Further, this Court15 has held that for determining the market value of
the land under acquisition, suitable adjustments have to be made while
considering the various positive and negative factors. The following
observations have been made-
“18. One of the principles for determination of the amount of
compensation for acquisition of land would be the willingness of
an informed buyer to offer the price therefor. It is beyond any cavil
that the price of the land which a willing and informed buyer
would offer would be different in the cases where the owner is in
possession and enjoyment of the property and in the cases where
he is not.
19. Market value is ordinarily the price the property may fetch in
the open market if sold by a willing seller unaffected by the special
15 Viluben Jhalejar Contractor (Dead) by LRs. v. State of Gujarat, (2005) 4 SCC 789
19
needs of a particular purchase. Where definite material is not
forthcoming either in the shape of sales of similar lands in the
neighbourhood at or about the date of notification under Section
4(1) or otherwise, other sale instances as well as other evidences
have to be considered.
xx xx xx
21. Whereas a smaller plot may be within the reach of many, a
large block of land will have to be developed preparing a layout
plan, carving out roads, leaving open spaces, plotting out smaller
plots, waiting for purchasers and the hazards of an entrepreneur.
Such development charges may range between 20% and 50% of
the total price.”
25. This Court16 has delineated the following factors responsible for increase
in land prices such as situation of the land, nature of development in
surrounding area, availability of land for development in the area, and
demand for the land in the area. It was held:
“16. Much more unsafe is the recent trend to determine the
market value of acquired lands with reference to future sale
transactions or acquisitions. To illustrate, if the market value of a
land acquired in 1992 has to be determined and if there are no
sale transactions/acquisitions of 1991 or 1992 (prior to the date of
preliminary notification), the statistics relating to
sales/acquisitions in future, say of the years 1994-1995 or 1995-
1996 are taken as the base price and the market value in 1992 is
worked back by making deductions at the rate of 10% to 15% per
annum. How far is this safe? One of the fundamental principles of
valuation is that the transactions subsequent to the acquisition
should be ignored for determining the market value of acquired
lands, as the very acquisition and the consequential development
would accelerate the overall development of the surrounding
areas resulting in a sudden or steep spurt in the prices. Let us
illustrate. Let us assume there was no development activity in a
particular area. The appreciation in market price in such area
would be slow and minimal. But if some lands in that area are
16 General Manager, Oil and Natural Gas Corporation Limited v. Rameshbhai Jivanbhai Patel & Anr.,
(2008) 14 SCC 745
20
acquired for a residential/commercial/industrial layout, there will
be all round development and improvement in the
infrastructure/amenities/facilities in the next one or two years, as
a result of which the surrounding lands will become more valuable.
Even if there is no actual improvement in infrastructure,
the potential and possibility of improvement on account of the
proposed residential/commercial/industrial layout will result in a
higher rate of escalation in prices. As a result, if the annual
increase in market value was around 10% per annum before the
acquisition, the annual increase of market value of lands in the
areas neighbouring the acquired land, will become much more,
say 20% to 30%, or even more on account of the
development/proposed development. Therefore, if the percentage
to be added with reference to previous acquisitions/sale
transactions is 10% per annum, the percentage to be deducted to
arrive at a market value with reference to future acquisitions/sale
transactions should not be 10% per annum, but much more. The
percentage of standard increase becomes unreliable. Courts
should, therefore, avoid determination of market value with
reference to subsequent/future transactions. Even if it becomes
inevitable, there should be greater caution in applying the prices
fetched for transactions in future. Be that as it may.”
26. The relationship between the market value of land and its potentiality
has also been discussed by this Court17 wherein it was observed that-
“4. … The market value is the price that a willing purchaser would
pay to a willing seller for the property having due regard to its
existing condition with all its existing advantages and its potential
possibilities when led out in most advantageous manner excluding
any advantage due to carrying out of the scheme for which the
property is compulsorily acquired. In considering market value
disinclination of the vendor to part with his land and the urgent
necessity of the purchaser to buy should be disregarded. The
guiding star would be the conduct of hypothetical willing vendor
who would offer the land and a purchaser in normal human
conduct would be willing to buy as a prudent man in normal
market conditions but not an anxious dealing at arm's length nor
facade of sale nor fictitious sale brought about in quick succession
or otherwise to inflate the market value. The determination of
market value is the prediction of an economic event viz. a price
17 Atma Singh (Dead) through LRs & Ors. v. State of Haryana & Anr., (2008) 2 SCC 568
21
outcome of hypothetical sale expressed in terms of probabilities….
5. For ascertaining the market value of the land, the potentiality
of the acquired land should also be taken into consideration.
Potentiality means capacity or possibility for changing or
developing into state of actuality. It is well settled that market
value of a property has to be determined having due regard to its
existing condition with all its existing advantages and its potential
possibility when led out in its most advantageous manner. The
question whether a land has potential value or not, is primarily
one of fact depending upon its condition, situation, user to which it
is put or is reasonably capable of being put and proximity to
residential, commercial or industrial areas or institutions. The
existing amenities like water, electricity, possibility of their further
extension, whether near about town is developing or has prospect
of development have to be taken into consideration…”
27. In another three Judge Bench of this Court18, the Court held as under:
“13. One other important factor which also should be borne in
mind is that it may not be safe to rely only on an award involving a
neighbouring area irrespective of the nature and quality of the
land. For determination of market value again, the positive and
negative factors germane therefor should be taken into
consideration as laid down by this Court in Viluben Jhalejar
Contractor v. State of Gujarat [(2005) 4 SCC 789] , namely: (SCC p.
797, para 20)…”
28. The land forming the subject matter of the present appeals was acquired
in pursuance of notification under Section 28 of the Act published on
26.6.1982. Therefore, firstly, the attempt to determine the market value
should be based on the sale instances, which are proximate to both the
date of notification under Section 28 of the Act and to the land sought to
be acquired. The land owners have relied upon seven sale instances in
respect of villages of which the land was acquired. Out of such seven
18 Revenue Divisional Officer-cum-Land Acquisition Officer v. Shaik Azam Saheb & Ors., (2009) 4
SCC 395
22
sale instances, two are almost four years later than the publication of
notification under Section 28 of the Act, and thus cannot be taken into
consideration in terms of the Section 24 of the LA Act.
29. The potentiality of the acquired land is one of the primary factors to be
taken into consideration to determine the market value of the land.
Potentiality refers to the capacity or possibility for changing or
developing into the state of actuality. The market value of a property has
to be determined while having due regard to its existing conditions with
all the existing advantages and its potential possibility when led out in
its most advantageous manner. The question whether a land has
potential value or not primarily depends upon its condition, situation,
use to which it is put or its reasonable capability of being put and also its
proximity to residential, commercial or industrial areas/institutions. The
existing amenities like water, electricity as well as the possibility of their
further extension, for instance whether near about town is developing or
has prospects of development have to be taken into consideration. It
also depends upon the connectivity and the overall development of the
area.
30. The record in the present matter does not suggest that there were large
scale development activities. The evidence is rather of sale of small
areas. There is nothing on record as to when the industrial units were set
up and what was the cost of land. Furthermore, there are no sale
instances of land situated in Village Makanpur prior to date of
23
notification i.e. 26.6.1982. The sale instances produced by the land
owners pertain to Village Sahibabad and Jhandapur which are at a
distance of about 3.5 kms from Delhi border. This Court19 while dealing
with comparable sale instances has held that-
“14. Thus, comparable sale instances of similar lands in the
neighbourhood at or about the date of notification under
Section 4(1) of the Act are the best guide for determination of
the market value of the land to arrive at a fair estimate of the
amount of compensation payable to a landowner. Nevertheless,
while ascertaining compensation, it is the duty of the Court to
see that the compensation so determined is just and fair not
merely to the individual whose property has been acquired but
also to the public which is to pay for it.”
31. The sale instances of a smaller area have to be considered while keeping
in view the principle that where a large area is the subject matter of
acquisition, suitable deduction is required to be made as no prudent
purchaser would purchase large extent of land on the basis of sale of a
small extent in the open market. The Court thus has to consider whether
the willing vendee would offer the rate at which the trial court proposes
to determine the compensation. This Court has even provided for 50%
deduction for development charges on the price mentioned in the sale
deed.20
32. The land owners have not produced any other sale deed or award of
compensation on account of acquisition of land in the northern side of
National Highway-24 prior to notification in question. It could thus lead
to an inference that there were not many sale transactions prior to the
19 Mohammad Raofuddin v. Land Acquisition Officer, (2009) 14 SCC 367
20 Himmat Singh & Ors. v. State of Madhya Pradesh & Anr., (2013) 16 SCC 392
24
notification in question. Some industries might have set up their units
keeping in view the proximity to Delhi but details regarding when such
units were set up and at what price, these units purchased the land have
not been brought on record. As mentioned earlier, the market value has
to be determined on the basis of what a purchaser is willing to pay on
the date of notification. It cannot be as per any rule of thumb without
any reference to the prevalent market value on the date of acquisition
on record.
33. The Reference Court had applied 1/3rd deduction in respect of land
situated in Village Sahibabad on the sale price of Rs.180/- per square
meters of land measuring 130 square meters vide sale deed dated
26.12.1980 whereas the deduction of 40% deduction in respect of land
situated in Village Jhandapur on the sale price of Rs.200/- per square
meters of land measuring 50 square yards vide sale deed dated
5.5.1982 in view of the fact that the area sold was very small. The High
Court has affirmed such deduction. Thus, we are of the view that the
same is reasonable and adequate deduction. Therefore, the market
value determined at Rs.120/- per square yard is the appropriate market
value on the basis of comparable sale instances.
34. The other method to determine the market value is the judicial
precedents which are proximate to the time of the acquisition and
proximate to the subject matter of land acquired. A table of judicial
precedents with the dates of publication of notification under Section 28
25
of the Act and Section 4 of the LA Act; the village where the land is
situated and the authority for which the land was acquired to arrive at
the market value is produced below. Such table includes the judgments
referred to by Mr. Gupta that a sum of Rs.297/- per square yard is the
market value of the land acquired.
Sl.
No.
Date of
publication
of
Notification
u/s 4
Acquisition
pertain(s) to
Village/Villages
Purpose of
Acquisition
Case Details Compensatio
n per square
yard awarded
by the High
Court
Supreme Court
1. 26.6.1982 Makanpur UP Awasparishad
FA 56 of 2005
decided on
21.7.2015
Rs. 120/- per
square yard
awarded by
Reference
Court
maintained.
SLP (Civil) No.
4636 of 2016
dismissed on
28.3.2016
2 15.3.1988 Makanpur Noida FA No. 522 of
2009
Pradeep Kumar
v. State of UP &
Anr. and other
connected
appeals
decided on
21.4.2016
297/- Earlier Civil Appeal
No. 1506-1507 of
2016 (SLP(Civil)
Nos. 25237-25248
of 2015) –
Pradeep Kumar
etc. etc. v. State of
U.P. & Anr. allowed
on 16.2.2016
(2016) 6 SCC 308
3 12.9.1986 Makanpur, Ghaziabad
Developmen
t Authority
FA No. 451 of
1999
(Narendra v.
State of U.P. &
Ors.) decided
on 5.12.2014
Rs.115/- Civil Appeals No.
10429-10430 of
2017 preferred by
land owners was
allowed on
11.9.2017 and the
compensation was
enhanced to
Rs.297/- per
square yards
4 28.02.1987 Makanpur Ghaziabad
Developmen
t Authority
FA No. 910 of
2000 (GDA v.
Kashi Ram &
Ors.) with
Connected
appeals by the
land owners
decided on
13.11.2014
297/- SLP (Civil) No.
5815 of 2015 with
connected SLPs
filed by GDA
dismissed on
5.5.2015
26
5 16.8.1988 Makanpur Ghaziabad
Developmen
t Authority
FA no. 41 of
2005
Rameshwar
Dayal v. State
of UP
And other
connected
appeals.
Decided on
22.7.2015
Rs.160/- per
square yard
awarded by
Reference
Court
maintained.
Civil Appeal No.
16960 of 2016- Jai
Prakash v. State of
UP allowed on
24.10.2017
Compensation
enhanced to Rs.
297/- per square
yard
6 19.12.1980 Chhalera Khadar Noida FA No. 310 of
2008
(Mohkam &
Anr. v. State of
U.P.)
Decided on
16.2.2015
Rs.297/- Appeal filed by the
State was
dismissed as
withdrawn on
30.6.2016
7 1983, 1986
and 1988
Bhangel
Begumpur
Noida FA No.
564/1997
Khazan & Ors.
v. State of U.P.
and other
connected
appeals
decided on
11.10.2012
Rs.297/- SLP(C) No. 15867-
15883 of 2013 by
Noida dismissed on
5.2.2014
1986, 1988,
1991 and
1992
Nagla
Charandas,
Geha Tilapatabagh
&
Chhalera Bangar
8 24.03.1988 Bhangel
Begumpur
Noida FA No.
1056/1999
(Raghuraj
Singh & Ors. v.
State of U.P. &
Anr.)
With
Connected
appeals
Decided on
19.5.2010
Rs.297/- Appeals preferred
by Authority in CA
No. 1593-1594 of
2011 was
dismissed on
13.1.2015
9 27.2.1988
Corrigendum
24.6.1989
Chhalera Bangar Noida FA No. 744 of
2001
Jagdish
Chandra and
other appeals
decided on
14.12.2007
Rs. 297.50 SLP No. 17209 of
2008 NOIDA vs.
Jagdish Chandra
dismissed on
5.2.2014
10 Notifications
were issued in
different
years.
Names of Villages
not available from
the order but land
acquired is said to
be situated near
to the villages
Bhangel
Begumpur
Nagla
Charandas,
Geha Tilapatabagh
&
Chhalera Bangar
Noida FA 162 of 1987-
Kareem v. State
of UP and other
connected
appeals
decided on
3.12.2014
Rs. 297/- SLP (CC No. 22480-
22500 of 2015)
dismissed on
27.1.2016
27
35. The order passed by this Court on 9.11.2017 for fresh determination on
the basis of additional documents was based on the judgments
pertaining to above-mentioned acquisitions. In terms of the order
passed by this Court, no additional evidence was produced before the
High Court and the submissions were confined to the material already on
record. Such judgments, as discussed above, are later in time except
the land situated in Chhalera Khadar, now forming part of Noida, for
which notification was published on 19.12.1980. It is pertinent to note
that the proximity from Delhi border would not be the determining factor
but the distance between the two villages inter se would be relevant as
Noida spread over a large area, has different access roads from Delhi
and Ghaziabad. However, such distance has not been disclosed.
36. The High Court in Jagdish Chandra & Ors. v. New Okhla Industrial
Development Authority, NOIDA & Anr.
21 had determined Rs. 297/- as
the market value of the land situated in Chhalera Bangar, now forming
part of Noida, intended to be acquired vide notification published under
Section 4 of the LA Act on 27.2.1988. The High Court had noted the
advantageous location of Noida when it held that:
“…Valuation of the landed property is enormously rising day by
day. The location of the land, as stated, is nearer to developed
area of NOIDA. The land is acquired for the purpose of making
park. Neither it is required for commercial purpose nor for
residential purpose. No question of largeness of the land is
available. Therefore, we are not aware what is the basis of
21 First Appeal No. 744 of 2001 decided on 14.12.2007
28
deduction.”
37. The first notification for acquisition of land in Village Makanpur, the
village which is located on both sides of National Highway-24, was
published on 26.6.1982, for the land situated on the northern side of the
National Highway, that is the notification in question.
38. In Pradeep Kumar, after remand, the High Court awarded Rs.297/- per
square yard as the compensation in pursuance of notification dated
15.3.1988 of the land situated in Village Makanpur (Sr. No. 2 in the
above table) for the benefit of Noida. This Court in Narendra awarded
compensation of Rs.297/- per square yard for the land acquired in
Village Makanpur in pursuance of the notification under Section 4 of the
LA Act published on 12.9.1986 (Sr. No. 2 in the above table). Such land
is in the area of Noida on the southern side of the National Highway.
39. The other villages, subject matter of acquisition i.e. Arthla, Jhandapur,
Prahladgarhi, Mahiuddin-Re-Kanawani and Sahibabad are farther away
from the National Highway than the land situated in Village Makanpur.
Since the Special Land Acquisition Collector as well as the Reference
Court has determined uniform compensation for the entire land
acquired, therefore, we do not find that the compensation awarded of
land situated in Village Makanpur on the basis of notification 4-5 years
later is a reasonable yardstick for determining compensation of over
1100 acres of land in the other villages. There is no judicial precedent in
respect of land situated in other five villages which are subject matter of
29
the acquisition in the present group of appeals. The orders passed by
this Court relied upon are either subsequent to the notification in
question and/or for the acquisition for the purpose of planned
development of Noida.
40. A compensation of Rs. 297/- per square yard was awarded for land
acquired for the purpose of GDA vide notification dated 28.2.1987 and
16.8.1988 (Sr. No. 4 & 5 in the above table). The said acquisition was
five years after the acquisition in question. The development activity
initiated vide notification dated 26.6.1982 would be relevant to
determine the market value on account of acquisition by virtue of the
subsequent notification, but time gap of more than five years will not
entail the same amount of compensation in respect of the land acquired
five years earlier.
41. The compensation determined on the basis of a notification five years
later cannot be a yardstick for determining compensation of the land
which is subject matter of present acquisition years earlier. Still further,
the High Court was not justified in observing that gaps of few years in
the notification have been ignored by this Court. In fact, on the
contrary, the High Court has failed to note that the date of notification
for the acquisition of land for the benefit of Parishad is five years earlier
than those in the judgments relied upon by the High Court.
42. In respect of land situated on northern side of National Highway, the
land was acquired vide notifications dated 28.2.1987 and 12.9.1986 in
30
the case of Narendra and Kashi; and on 16.8.1988 in the case of Jai
Prakash. Whereas, on the southern side of National Highway for the
benefit of Noida, the land of Village Makanpur became subject matter of
acquisition vide notification dated 10.3.1988 in the case of Pradeep
Kumar and on 15.3.1988 in the case of Charan Kaur.
43. For the land situated on the northern side of the National Highway for
the benefit of the Parishad, the acquisition has attained finality with the
dismissal of SLP (Civil) No. 4636 of 2016 on 28.3.2016. The
compensation assessed in the other aforementioned cases is
subsequent to the date of notification, therefore, none of the orders are
determinative of the amount of compensation. Hence, the market value
as determined by the High Court cannot be sustained either on the basis
of the sale deeds, or on the strength of judicial orders. There is no
justification of enhancement of compensation awarded by the Reference
Court i.e. Rs.120/- per square yard.
44. Consequently, the present appeals are hereby allowed. The order
passed by the High Court in the appeals preferred by the land owners is
set aside and the compensation awarded by the Reference Court @
Rs.120/- per square yard apart from statutory benefits is restored.
.............................................J.
(UDAY UMESH LALIT)
31
.............................................J.
(HEMANT GUPTA)
.............................................J.
(S. RAVINDRA BHAT)
NEW DELHI;
MARCH 23, 2021.
