1996 JTR(SC) 1272
1996 4 CLT(SC) 49 ; 1996 4 ICC 147 ; 1996 9 JT 540 ; 1996 6 Scale 663 ; 1996 10 SCC 627 ; 1996 Supp4 SCR 748 ; 1996 7 Supreme 172
1996(7) Supreme 172
SUPREME COURT OF INDIA
K. Ramaswamy and G.B. Pattanaik, JJ.
The Special Land Acquisition Officer, Dharward -Appellant
versus
Smt. Tajar Hanifabi etc. -Respondent
Civil Appeal No. 11341 of 1996
(Arising out of SLP (C) No. 18631 of 1994)
And
Civil Appeal No. 11388 of 1996
(Arising out of SLP (C) Nos. 20023 of 1994)
Decided on 16-8-1996
Counsel for the Parties :
For the Appellant : K.R. Nagaraja and K.L. Taneja, Advocates.
For the Impleading Party : K.V. Narayanappa and Ms.Kiran Suri, Advocates.
For the Respondents : P. Mahale and Shanta Kr. Mahale, Advocates.
IMPORTANT POINT
Sale deed in respect of a small extent of land admeasuring 40 x 40 situated in developed municipal area could not be said offering comparable sale for six acres of agricultural land sought to be acquired.
Act Referred :LAND ACQUISITION ACT : S.4, S.23
(A) The Land Acquisition Act, 1894, Section 4 authorises the publication of notification for acquiring land for public purposes, here invoked for industrial development, while Section 23 governs compensation, solatium, and interest payable upon acquisition. The Acts framework for determining fair compensation and protecting claimant entitlements postacquisition notification is central to these appeals.
(B) Compensation must be based on bona fide market value of similar properties; isolated sale deeds from unrelated contexts cannot be the sole determinative benchmark. The law requires assessment of agricultural potential rather than developedarea valuations, and mandates payment of solatium, interest, and additional amounts as stipulated under Sections 23, 23(1A), 28, and 11.
Facts of the case:
Notification under Section 4(1) was published on 7 March 1985 acquiring six acres of agricultural land near Chikodi municipality for industrial use. Compensation was initially determined on acrebased valuation, but both the reference court and High Court relied on a sale deed for a small developed plot to fix rates per square foot, leading to enhancements later reduced on appeal.
Findings of Court:
The High Court and reference Court committed an error of law by using a sale deed from a developed area to value agricultural land, as no prudent buyer would offer such rates. The cultivated lands had potential value, but this finding was incorrect; instead, a sum of Rs. 45,000 per acre was deemed reasonable based on the totality of facts, including prior sale of plots at Rs. 6,000 per plot.
Issues:
Whether compensation determined by the reference court and High Court was lawful; whether reliance on a developedarea sale deed was proper; and what reasonable compensation for agricultural land under the Act is.
Ratio Decidendi:
Compensation for land acquired under the Land Acquisition Act must reflect true agricultural value, not be derived from unrelated developedarea sales. Courts must assess bona fide market rates, and claimants are entitled to statutory solatium, interest, and additional amounts as per Sections 23, 23(1A), 28, and 11.
Result:
Appeals allowed; compensation set at Rs. 45,000 per acre; claimants entitled to solatium @ 30%, interest under Section 28 at 9% for one year then 15%, and additional amount under Section 23(1A) at 12% per annum from notification date to award or possession, whichever is earlier, without costs.
(A) The Land Acquisition Act, 1894, Section 4 authorises the publication of notification for acquiring land for public purposes, here invoked for industrial development, while Section 23 governs compensation, solatium, and interest payable upon acquisition. The Acts framework for determining fair compensation and protecting claimant entitlements postacquisition notification is central to these appeals.
(B) Compensation must be based on bona fide market value of similar properties; isolated sale deeds from unrelated contexts cannot be the sole determinative benchmark. The law requires assessment of agricultural potential rather than developedarea valuations, and mandates payment of solatium, interest, and additional amounts as stipulated under Sections 23, 23(1A), 28, and 11.
Facts of the case:
Notification under Section 4(1) was published on 7 March 1985 acquiring six acres of agricultural land near Chikodi municipality for industrial use. Compensation was initially determined on acrebased valuation, but both the reference court and High Court relied on a sale deed for a small developed plot to fix rates per square foot, leading to enhancements later reduced on appeal.
Findings of Court:
The High Court and reference Court committed an error of law by using a sale deed from a developed area to value agricultural land, as no prudent buyer would offer such rates. The cultivated lands had potential value, but this finding was incorrect; instead, a sum of Rs. 45,000 per acre was deemed reasonable based on the totality of facts, including prior sale of plots at Rs. 6,000 per plot.
Issues:
Whether compensation determined by the reference court and High Court was lawful; whether reliance on a developedarea sale deed was proper; and what reasonable compensation for agricultural land under the Act is.
Ratio Decidendi:
Compensation for land acquired under the Land Acquisition Act must reflect true agricultural value, not be derived from unrelated developedarea sales. Courts must assess bona fide market rates, and claimants are entitled to statutory solatium, interest, and additional amounts as per Sections 23, 23(1A), 28, and 11.
Result:
Appeals allowed; compensation set at Rs. 45,000 per acre; claimants entitled to solatium @ 30%, interest under Section 28 at 9% for one year then 15%, and additional amount under Section 23(1A) at 12% per annum from notification date to award or possession, whichever is earlier, without costs.
ORDER
Impleadment allowed.
Leave granted.
We have heard learned counsel for the parties.
2. These appeals by special leave arises from the judgment and order of the High Court of Karnataka dated June 16, 1993 made in MFA No. 1395 of 1995. The admitted facts are that notification under Section 4 [1] of the Land Acquisition Act, 1894 [for short, the "Act"] was published on March 7, 1985 acquiring six acres of land near Chikodi municipality for industrial development. The Land Acquisition Officer [LAO] granted compensation on acrage basis. On reference, relying upon the sale deed Ex. P-8 in respect of land of an extent of 40 x 40 situated one and a half kms. away from the acquired lands which worked out to Rs. 12/- per square foot, the Civil Judge enhanced the compensation to Rs. 6/- per square foot which worked out to Rs. 2,66,360/- per acre. On appeal, the High Court reduced the compensation to Rs. 4.50 per square foot which worked out to Rs. 1,96,020/- per acre.
3. The only question for consideration is: whether the compensation determined by the High Court and the reference Court is in accordance with law? It is seen that the sole basis worked out by both the reference Court and the High Court was Ex. P-8 spoken to by the vendor PW-2 in respect of land of an extent of 40 x 40 in the developed area in which case the compensation worked out to Rs. 12/- square foot. Since six acres of land was sought to be acquired in two survey numbers, admeasuring 1.15 gunthas in RS No. 407/2 and 4.25 gunthas in RS No. 417/1, no prudent and willing vendee would offer that rate for purchase of land on square foot basis. The High Court and the reference Court, therefore, committed obvious error of law in determining the compensation on square foot basis relying solely on Ex. P-8. It is seen that Ex. P-8 is in respect of a small extent of land admeasuring 40 x 40 situated at a distance of 1.5 kms. within the developed municipal area. Under those circumstances, PW-8 offered no comparable sale.
4. The question then is: what would be the reasonable compensation for the acquired lands ? Though the reference Court has noted that it has a potential value, obviously it is a wrong finding given by it. On going through the award of the Collector we find, as specifically stated by him, that he had inspected the lands on August 11, 1986 before determination of the compensation; he found that the lands were cultivated and certificate to that effect was also obtained from the Sub-Tehsildar. Under those circumstances, the finding that the lands are possessed of potential value is obviously illegal. It is seen that the respondents themselves had sold plots of land admeasuring 60 x 40 which were part of the acquired lands, in the year 1985 for a sum of Rs. 6,000/- per plot. It would be obvious than this document was brought in existence to inflate the market value which worked out to Rs. 1,89,000/-. From the totality of the facts, particularly that the lands are agricultural lands, we are of the view that a sum of Rs. 45,000/- per acre would be reasonable compensation for the the acquired lands.
5. The appeals are accordingly allowed. The claimants are entitled to solatium under Section 23 [2] @ 30% of the enhanced compensation and interest under Section 28 @ 9% of the enhanced compensation from the date taking possession of the land for one year and thereafter @ 15% till date of deposit into Court. They are also entitled to additional amount under Section 23 [1-A] @ 12% per annum from the date of notification under Section 4 [1] till date of award under Section 11 or of taking possession, whichever is earlier. No costs.
Appeal allowed.
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