1996 JTR(SC) 583
1996 AIR(SC) 3168 ; 1996 AIR(SCW) 1854 ; 1996 2 CCC(SC) 189 ; 1996 2 CurCC(SC) 189 ; 1996 5 JT 580 ; 1996 2 RRR 653 ; 1996 3 Scale 299 ; 1996 9 SCC 640 ; 1996 3 SCR 500 ; 1996 KHC 1761 ; 1996 3 Supreme 766
1996(3) Supreme 766
SUPREME COURT OF INDIA
K. Ramaswamy and G.T. Nanavati, JJ.
Smt. Basavva & Ors. etc. -Appellants
versus
Spl. Land Acquisition Officer & Ors. -Respondents
Civil Appeal Nos. 2209-2212 of 1993
With
Civil Appeal No. 2213 of 1993
Decided on 15-3-1996
IMPORTANT POINT
The time lag for real development and the waiting period for development are relevant consideration for determination of just and adequate compensation and for deduction of development charges, the nature of the development conditions and nature of the land, the land required to be set apart for roads, sewerage etc. are to be considered.
Act Referred :LAND ACQUISITION ACT : S.4(1), S.23
A) Section 4(1) of the Land Acquisition Act, 1894 authorized the publication of a notification on October 30, 1981, acquiring 194 acres of land for industrial development near Dharwad, triggering the application of compensation fixation principles under the Act. The provisions governing determination of just and adequate compensation, including the assessment of market value and permissible deductions for developmental delays and non-agricultural use, were engaged in resolving the quantum of compensation for the 33 acres under appeal. The Court applied the principles laid down in its earlier decisions, including the deduction framework for development charges, to evaluate the enhancements and reductions made by the subordinate authorities.
B) The Court held that the determination of compensation must begin with an assessment of whether sales of comparable land are genuine and reliable, and where such lands are small, separate parcels not directly part of the acquired land, sufficient deductions must be made to arrive at the just and fair market value of the larger tract. Deductions for the time lag in development and the lands capacity for non-agricultural use are relevant, with deductions ranging from 33-1/3% to 63% for developmental charges being upheld in prior precedents. An additional deduction of 12% for the long period of development and the location of the land far from the acquired area was held reasonable, leading to the fixation of compensation at Rs. 56,000 per acre.
Facts of the case:
Notification under Section 4(1) of the Land Acquisition Act, 1894 was published on October 30, 1981, acquiring 194 acres of land for industrial development near Dharwad. The Land Acquisition Officer awarded compensation ranging between Rs. 8,000 and Rs. 8,080. Subsequently, the Civil Court enhanced the compensation to Rs. 1.72 per sq. ft., which worked out to Rs. 74,953 per acre. On appeal, the High Court reduced the compensation to Rs. 56,000 per acre, applying a 65% deduction for developmental charges. The appellants sought further enhancement, while the State did not pursue appeals against the enhancement, and the Special Leave Petitions filed by the State were dismissed.
Findings of Court:
The High Court found that the sale deed relied upon by the appellants (Ex.P-10) was a dependable sale but pertained to a small plot situated more than 1 km away, and the land in the area was not developed, requiring years for development. It held that this market sale could not form the sole basis for compensation and, having regard to the development potential and the long waiting period, determined compensation at Rs. 56,000 per acre after deducting 65%. This Court affirmed that the deduction of 33-1/3% to 53% for development charges was valid, and an additional 12% deduction for the time lag and location was not illegal.
Issues:
Whether the High Court committed any error of law in fixing compensation at Rs. 56,000 per acre? Whether the 53% deduction is reasonable and whether the additional 12% deduction for development delay and location was a correct principle of law? Whether the appellants are entitled to the same compensation rate as granted in Kulkarnis case due to the proximity to a national highway?
Ratio Decidendi:
The compensation under the Land Acquisition Act must reflect the just and fair market value after making reasonable deductions for the nature of the land, the intended development, the land required for roads and infrastructure, and the time lag for development. Where the land is not immediately developable and is located far from the developed area, an additional deduction for the waiting period is permissible. The High Courts application of a 65% deduction, comprising a standard developmental charge and an additional 12% for delay and location, was not illegal, and there was no justification for further enhancement.
Result:
The appeals are dismissed with no costs awarded.
A) Section 4(1) of the Land Acquisition Act, 1894 authorized the publication of a notification on October 30, 1981, acquiring 194 acres of land for industrial development near Dharwad, triggering the application of compensation fixation principles under the Act. The provisions governing determination of just and adequate compensation, including the assessment of market value and permissible deductions for developmental delays and non-agricultural use, were engaged in resolving the quantum of compensation for the 33 acres under appeal. The Court applied the principles laid down in its earlier decisions, including the deduction framework for development charges, to evaluate the enhancements and reductions made by the subordinate authorities.
B) The Court held that the determination of compensation must begin with an assessment of whether sales of comparable land are genuine and reliable, and where such lands are small, separate parcels not directly part of the acquired land, sufficient deductions must be made to arrive at the just and fair market value of the larger tract. Deductions for the time lag in development and the lands capacity for non-agricultural use are relevant, with deductions ranging from 33-1/3% to 63% for developmental charges being upheld in prior precedents. An additional deduction of 12% for the long period of development and the location of the land far from the acquired area was held reasonable, leading to the fixation of compensation at Rs. 56,000 per acre.
Facts of the case:
Notification under Section 4(1) of the Land Acquisition Act, 1894 was published on October 30, 1981, acquiring 194 acres of land for industrial development near Dharwad. The Land Acquisition Officer awarded compensation ranging between Rs. 8,000 and Rs. 8,080. Subsequently, the Civil Court enhanced the compensation to Rs. 1.72 per sq. ft., which worked out to Rs. 74,953 per acre. On appeal, the High Court reduced the compensation to Rs. 56,000 per acre, applying a 65% deduction for developmental charges. The appellants sought further enhancement, while the State did not pursue appeals against the enhancement, and the Special Leave Petitions filed by the State were dismissed.
Findings of Court:
The High Court found that the sale deed relied upon by the appellants (Ex.P-10) was a dependable sale but pertained to a small plot situated more than 1 km away, and the land in the area was not developed, requiring years for development. It held that this market sale could not form the sole basis for compensation and, having regard to the development potential and the long waiting period, determined compensation at Rs. 56,000 per acre after deducting 65%. This Court affirmed that the deduction of 33-1/3% to 53% for development charges was valid, and an additional 12% deduction for the time lag and location was not illegal.
Issues:
Whether the High Court committed any error of law in fixing compensation at Rs. 56,000 per acre? Whether the 53% deduction is reasonable and whether the additional 12% deduction for development delay and location was a correct principle of law? Whether the appellants are entitled to the same compensation rate as granted in Kulkarnis case due to the proximity to a national highway?
Ratio Decidendi:
The compensation under the Land Acquisition Act must reflect the just and fair market value after making reasonable deductions for the nature of the land, the intended development, the land required for roads and infrastructure, and the time lag for development. Where the land is not immediately developable and is located far from the developed area, an additional deduction for the waiting period is permissible. The High Courts application of a 65% deduction, comprising a standard developmental charge and an additional 12% for delay and location, was not illegal, and there was no justification for further enhancement.
Result:
The appeals are dismissed with no costs awarded.
ORDER
Notification under Section 4(1) of the Land Acquisition Act, 1894 [for short, the Act ] acquiring 194 acres of land [out of which 33 acres is subject matter in these appeals] for industrial development near Dharwad was published on October 30, 1981. The Land Acquisition Officer awarded compensation at the rate ranging between Rs. 8000/- to Rs. 8080/- by his award dated August 22, 1985. On reference the Civil Court enhanced the compensation to Rs. 1.72 per sq. ft. by judgment and order dated October 11, 1988 which worked out to Rs. 74,953/- per acre. On appeal by judgment and order made in FMA No. 575/89 and batch the High Court reduced the compensation to Rs. 56,000/- per acre. Thus, this appeal by the claimants for further increase. It is also not in dispute that though the State wanted to file appeals against enhancement of the compensation, this Court has dismissed their Special Leave Petitions.
2. Shri K. Madhava Reddy, learned senior counsel for the appellants contended that 53% deduction is reasonable, as held by this Court but deduction of 65% towards the developmental charges by the High Court is not correct principle of law. Therefore, the High Court has committed error of law in reducing the same. He also contended that when the lands acquired are adjacent to national highway and compensation for acquisition, though subsequent to the date of notification in this case, for the lands in Kulkarni s case which is just disposed of, was granted at the rate of Rs. 67,200/- per acre, the appellants also are entitled to the same benefit. The High Court, therefore, was in error in determining the compensation at the rate of Rs. 56,000/- per acre. Shri Sanghi, learned senior counsel for the respondents resisted the contention.
3. Having given our consideration, the question that arises for consideration is: whether the High Court has committed any error of law in fixing the compensation at the rate of Rs.56,000/- per acre? On the principle of deductions in the determination of the compensation, this Court in K. Vasundara Devi v. Revenue Divisional Officer, LAO1 has considered the entire case law and has held that the Court, in the first instance, has to consider whether sales relating to smaller pieces of lands are genuine and reliable and whether they are in respect of comparable lands. In the event the Court finds that such sales are genuine and reliable and the lands have comparable features, sufficient deduction should be made to arrive at the just and fair market value of large tracks of land. The time lag for real development and the waiting period for development are also relevant consideration for determination of just and adequate compensation. Each case depends upon its own facts. For deduction of development charges, the nature of the development, conditions and nature of the land, the land required to be set apart under the building rules for roads, sewerage, electricity, parks water etc. and all other relevant circumstances involved are to be considered. In this case the facts recorded by the High Court are that Ex.P-10 sale deed is dependable sale but it is in respect of a small plot of land situated at a distance of more than 1 k.m. It is has also found that the land in the area is not developed and there is no development towards that area. The High Court also noted that it takes years for development in those lands though, the lands are capable to be used for non-agricultural purpose. On those findings the High Court held that the market value under Ex.P-10 cannot form the sole basis but keeping in view the developments the lands are capable to fetch compensation at the rate of Rs. 56,000/- after deducting 65%. For developmental charges, that deduction between 33-1/3 to 53% was held to be valid by this Court in several judgments. In Vasundara Devi s case 63% deduction was upheld. In view of the fact that development of land would have taken years, the High Court has deducted another 12%. Obviously, the High Court kept in view the fact that the lands under Ex.P-10 were situated at far flung places from the lands under acquisition and since the land takes long time for development it has given additional deduction of 12% i.e. 53 + 12% = 65% in determination of the compensation. On the basis of the rationale referred to above, the principle adopted by the High Court cannot be said to be illegal. Thus considered, we hold that there is no justification for interference in the finding recorded by the High Court or to further increase the compensation.
4. The appeals are accordingly dismissed. No costs.
Appeals dismissed.
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Parallel Citations of other Journals :
Smt. Basavva & Ors. etc. v. Spl. Land Acquisition Officer, 1996(3) Supreme 766