Vithal Rao & Anr. Etc. v. the Special Land Acquisition Officer
12. Mr. Dhruv Mehta, learned senior counsel appearing for the E
appellants(land-owners) while assailing the legality and correctness of
· the impugned order mainly raised five submissions.
13. In the first place, learned counsel urged that the High Court
having rightly held that the appellants were not awarded adequate
compensation by the Land Acquisition Officer and the reference Court F
" -commensurate with the market value of the acquired land erred in
awarding compensation only at the rate ofRs.13,93,920/-per acre., i.e.,
at the rate of Rs. 32/- per sq. ft.
14. According to learned counsel, firstly, the compensation awarded
by the High Court is wholly inadequate and not commensurate with the G
market value of the acquired land and secondly, it is against the evidence
adduced by the appellants and hence unsustainable in law.
15. In the second place, learned counsel urged that the appellants
have filed in evidence 11 sale deeds of the exemplar's land to prove the
market rate of the acquired land. Learned counsel pointed out that out H
.340 SUPREME COURT REPORTS [2017] 6 S.C.R.
A of 11 sale deeds, some sale deeds were part of the acquired land whereas
the remaining pertained to the land adjacent to the acquired land.
16. It was urged that since these 11 sale deeds were executed
much prior in point of time from the date of issuance of Notification
under Section 4, therefore, such sale deeds are the best piece of evidence
B as they represent the correct price/value of the acquired Jan~ for proving
the market value of the acquired land.
17. Learned counsel urged that out of 11 sale deeds, two sale
deeds, which represent the highest value should have been made the
basis for determining the market value of the acquired land.
18. In the third place, learned counsel urged that out of 11 sale
deeds, the High Court having rightly held the four sale deeds (Ex- 55,56,59
and 61) to be of relevance for proving the market value of the acquired
land erred in excluding the three sale deeds out of the four white
determining the market value of the acquired land and confined its reliance
D only on one sale deed, namely, Ex-61 (which was for Rs. 64/- per sq. ft.)
for determining the market value without any justification. It was also
his submission that the High Court erred in making deduction of 50% out
of the price ofEx.P-61 sale deed without there being any justification
and reduced its price to Rs. 32/- per sq. ft. This finding, according to
learned counsel, is legally unsustainable and hence deserves to be set
aside.
19. In the fourth place, learned counsel urged that out of 11 sale
deeds, 2 sale deeds, viz., Exs. 55 and 56 represented the land to have
been sold at Rs. 218/- per sq. ft. and, therefore, Rs.218/- per sq. ft. rate
should have been held to be the market rate of the acquired land that
F being the highest price of the land out of 1 I sale deeds and, accordingly,
the compensation should have been determined at the rate of Rs.218/
per sq ft., if not more.
20. In the fifth place, learned counsel urged that it being an admitted
fact that the acquired land is abutting the main district road (MDR) in
G the city and further surrounded by developed colonies and several
institutions/organisations etc. in its near proximity and being non
agricultural land situated within the limits of municipality has potentiality
to undertake any housing project over the land and, therefore, the rate
claimed by the appellants is well justified having regard to the totality of
the circumstances. H
VITHAL RAO & ANR. ETC. v. THE SPECIAL LAND 341
ACQUISITION OFFICER [ABHAY MANOHAR SAPRE, J.]
21. It is essentially these submissions learned counsel for the A
appellants(land owners) elaborated in his arguments with the aid of
evidence adduced and \fecided case law of this Court.
22. In reply, Mr. B.P.S. Patil, learned senior counsel appearing for
the respondent supported the impugned order and contended that the
submissions urged by the appellants' counsel has no merit. Learned B
counsel contented that 11 sale deeds relied on by the appeilants relate to
very small area/plots whereas the acquired area is quite large ( 30 acres)
and, therefore, the price shown in such sale deeds is of no relevance and
nor can these sale deeds be relied on to determine the tme market value
of the acquired land.
23. Learned counsel also doubted the bonafides of the sale deeds
and contented that the manner in which the transactions were made
pursuant to these sale deeds, clearly show that the transactions made
therein are not genuine. In substance, the submission oflearned counsel
for the respondent was that the appeals have no merit.
24. Having heard the learned counsel for the parties and on pemsal
of the record of the case, we find force in some of the submissions of
learned counsel for the appellants.
25. Before we examine the facts of this case, it is necessary to
take note of general principle oflaw on the subject which is laid down by E
this Court in several cases some of which were also cited at the bar by
the learned counsel for the parties. Indeed, if we may say so, law on the
several issues urged herein by the le.arned counsel for the parties is
fairly well settled and what has varied is its application to the facts of
each case.
26. In Chimanlal Hargovinddas vs Special Land Acquisition
Officer, Poona & Anr. ( 1988) 3 SCC 751, this Court dealt with the
question as to how the Court should determine the valuation of the lands
under acquisition and what broad principle oflaw relating to acquisition
of land under the Act should be kept in consideration to determine the
proper market value of the acquired land. .....0
27. In Para 4 of the judgment, this Court laid down as many as 17
principles, which are reproduced below for pemsal:
"(l) to (4) ....................................... .
(5) The market value of land under acquisition has to H
342 SUPREME COURT REPORTS (2017] 6 S.C.R.
· A 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
B 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.
c (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
. D 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
E pay a higher price on account of the resultant improvement
in development prospects.
·G
(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 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-a-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
VITHAL RAO & ANR. ETC. v. THE SPECIAL LAND 343
ACQUISITION OFFICER [ABHAY MANOHAR SAPRE, J.]
evaluated in terms of price variation as a prudent purchaser A
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. B
(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 road 2. situation in the 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 developed 4. lower level requiring the
area depressed portion to be
filled up
5. regular shape 5. remoteness from
developed locality
6. level vis-a-vis land 6. some special
under acquisition disadvantageous 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 ofland will have to be developed
by preparing a lay out, carving out roads, le,aving open
344
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 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 t9 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."
28. These principles are invariably kept in mind by the Courts
while determining the market value of the acquired lands (see also Union
of India vs. Raj Kumar Baghal Singh (Dead) Through Legal
Representatives & Ors. (2014) 10 SCC 422).
29. In addition to these principles, this Court in several cases
have aJso laid down that while determining the true market value of the
acquired land and especially when the acquired land is a large chunk of
undeveloped land, it is just and reasonable to make appropriate deduction
F towards expenses for development of acquired land. It has also been
consistently held that at what percentage the deduction should be made
vary from 10% to 86% and, therefore, the deduction should be made
keeping in mind the nature of the land, area under acquisition, whether
the land is developed or not and, if so, to what extent, the purpose of
G acquisition, etc. It has also been held that while determining the market
value of the large chunk ofland, the value of smaller piece ofland can
be taken into consideration after making proper deduction in the value of
lands and when sale deeds of larger parcel of land are not available.
This Court has also laid down that the Court should also take into
consideration the potentiality of the acquired land apart from other
VITHAL RAO & ANR. ETC. v. THE SPECIAL LAND 345
ACQUISITION OFFICER [ABHAY MANOHAR SAPRE, J.]
relevant considerations. This Court has also recognized that the Courts A
can always apply reasonable amount of guesswork to balance the equities
in order to fix a just and fair market value in terms of parameters specified
under Section 23 of the Act. (See Trishala Jain & Anr. Vs. State of
Uttaranchal & Anr., (2011) 6 SCC 47)
30. Keeping the aforementioned principles in mind when we take
note of the facts of the case at hand, we find that firstly, the land acquired
in question is a large chunk of land (30 acres approx.); Secondly, the
purpose of acquisition is "Establishment of Rehabilitation Centre"; Thirdly,
it is situated within the municipal limits; Fourthly, its one side is abutting
the main district road (MDR); Fifthly, it is not fully developed; Sixthly,
some buildings have come up in its near proximity; Seventhly, the C
appellants(land owners) have not filed any exemplar's sale deeds relating
to large piece of land sold in acres to prove the market value of the
acquired land; Eighthly, all sale deeds relied on by the appellants pertain
to very small piece ofland such as, 25x55ft., 40x20ft., 40x40ft., 12x45ft,
30x40ft., 12x45ft., 60x60ft., 10x65ft., 50x65ft., 40x65ft. and 29x49ft. D
whereas the land acquired, as mentioned above, is quite large (3 0 acres);
and, the price at which these small plots were sold is Rs.85/- per sq. ft.,
Rs.70/- per sq. ft., Rs.80/- per sq. ft., Rs 69/- per sq. ft., Rs. 55/- per sq.
ft., Rs. 64/- per sq. ft., Rs. 65 per sq. ft., Rs. 100/- per sq. ft., and
Rs.218/- per sq. ft.,; Ninthly, these eleven plots were sold prior to the
date of acquisition (2000, 2001 and 2002) whereas the acquisition was in
the year 2003; Tenthly, the small parcel of lands sold under these sale
deeds are situated in near proximity of the acquired land and some were
part of the acquired land; Eleventhly, all the eleven sale deeds are held
bona fide and proper and lastly, these sale deeds, therefore, can be
relied on for determining the proper market value of the acquired land.
31. Taking into account the factual scenario of the acquired land
and having regard to the totality of the circumstances taken note of
supra, we are of the considered view that it would be just, fair and
proper to take out the average value of these plots. Since the acquired
land is not fully developed and it requires for construction ofrehabilitation G
centre, it would be just, fair and proper to deduct 40% of the amount
towards development charges out of the average price worked out. Such
deduction is permissible in law (Land Acquisition Officer Revenue
Divisional Officer, Chittor vs. L. Kamalamma (Smt.) Dead by LRs.
& Ors. Etc.(1998) 2 sec 385.
A 32. The average value of the land in this way is worked out to
Rs.99/- per sq. ft. and after deducting 40% towards development
charges, we get a rate ofRs.60/- per sq. ft.(rounded off).
33. In our considered opinion, the market value ofRs.60/- per sq.
ft. which we have worked out, is just, fair and proper market value of
· B the acquired land having regard to the totality of the circumstances taken
note of above and on applying the aforementioned principle oflaw laid
down by this Court. It is this value which, in our opinion, should have
been awarded to the appellants for the acquired land. ·
34. We are unable to accept the submission ofleamed counsel for
c the appellants when he urged that the appellants are entitled to claim
compensation at the rate ofRs.218/- per sq. ft. or even more that being
the highest rate of the land out of total sale deeds.
35. As held supra, firstly, all the sale deeds relate to very small
piece ofland; secondly, except two parcels ofland sold for Rs. I 00/- and
D Rs.218/-, remaining plots were sold in the range ofRs.?5/- to Rs.85/
and lastly, the appellants did not file any sale deed in relation to large
chunk ofland to prove the price in acres. For these reasons, in our view,
it is not safe to rely on one or two isolated sale deeds of high value of
very small plots. We have, therefore, preferred to work out the average
. E of these sale deeds for determining the market value of the acquired
land.
36. In the light of foregoing discussion, the appeals succeed and
are accordingly allowed in part. The impugned order is modified to the
extent that the appellants are held entitled to claim compensation for the
acquired land at the rate of Rs.60/- per sq ft. As a consequence, the
F appellants are held entitled to claim all statutory compensation accordingly.
37. Letthe compensation now awarded by this Court by enhanced
rate be re-worked and after making proper calculation and verification
of the land, the same be paid to the appellants (respective land owners)
within 3 months from the date of this order.
Nidhi Jain Appeals partly allowed.