2004 JTR(SC) 98
2004 16 AIC 318 ; 2004 AIR(SC) 1800 ; 2004 AIR(SCW) 797 ; 2004 1 AllCJ 487 ; 2004 54 AllLR 500 ; 2004 2 AWC 995 ; 2004 2 CivLJ 325 ; 2004 DNJ 565 ; 2004 2 ICC 583 ; 2004 LatestHLJ 1245 ; 2004 2 RCR(Civ) 186 ; 2004 2 Scale 99 ; 2004 2 SCC 184 ; 2004 1 WBLR 919 ; 2004 KHC 421 ; 2004 1 Supreme 770
2004(1) Supreme 770
SUPREME COURT OF INDIA
(From Himachal Pradesh High Court)
S.N. Variava & H.K. Sema, JJ.
H.P. Housing Board -Appellant
versus
Bharat S. Negi and Ors. -Respondents
Civil Appeal No. 3160 of 1998
With
Civil Appeal No. 3161 of 1998
Decided on 27-1-2004
Counsel for the Parties :
For the Appellant : Y. Prabhakara Rao, Advocate.
For the Respondents : Anant Vijay Palli, Ms. Rekha Palli, J.S. Attri, P.K. Yadav, Naresh K. Sharma, Ms. Madhu Moolchandani, Advocates.
Act Referred :LAND ACQUISITION ACT : S.23, S.53
(A) The Land Acquisition Act provisions cited in this case govern the fixation of compensation for land compulsorily acquired for public purposes. Section 23 of the Act relates to the fixation of compensation, requiring it to be based on the market value and taking into consideration the nature and quality of the land. Section 53 addresses the payment of compensation and the procedure for determining the amount due to the person entitled. In this case, the acquired land was for constructing a social housing colony, and the dispute centered on the correct methodology for calculating compensation, considering sale instances and the nature of the acquired land.
(B) Key legal principles include that compensation must reflect market value, all relevant sale instances must be considered, and deductions may be made for the largeness of land. The nature of the land (irrigated vs. non-irrigated) and its suitability for the intended purpose are relevant, and solatium and interest are payable as per the Act.
Facts of the case:
Approximately 53.12 bighas of land in Tehsil Rohru, District Shimla, Himachal Pradesh was acquired via a Section 4 Notification dated 15th July, 1989 for a social housing colony. The Land Acquisition Officer awarded compensation at Rs. 40,000 per bigha. Claimants and Appellants presented differing sale instances, with the Reference Court averaging all instances after rejecting distinctions between land types, leading to a compensation figure of Rs. 1,11,660 per bigha. The High Court later excluded two sale instances from Appellants, factored in a 40% deduction for largeness of land, and set compensation at Rs. 1,08,000 per bigha.
Findings of Court:
The Supreme Court held that the High Court erred in disregarding the sale instances produced by the Appellants. The offer of Rs. 80,000 per bigha from the Appellants had not been accepted and, when adjusted for solatium and interest, would have resulted in a lower amount. The Reference Courts approach to consider all sale instances was correct, and a 33-1/3% deduction for development costs was appropriate given the scale of acquisition and the nature of the land.
Issues:
Whether the High Court was correct in excluding the sale instances tendered by the Appellants? Whether compensation should be determined by averaging all relevant sale instances? Whether a deduction for largeness of land is permissible and, if so, at what rate? Whether the nature of the acquired land (irrigated vs. non-irrigated) affects compensation when the land is to be used for housing?
Ratio Decidendi:
Compensation under the Land Acquisition Act must be based on a comprehensive consideration of all valid sale instances reflecting market value, without unduly excluding relevant evidence. A reasonable deduction for development costs due to largeness of the acquired land is permissible. The intrinsic nature of the land should be considered in context of its intended use, and solatium and interest are integral components of compensation.
Result:
The appeals are allowed. Compensation is fixed at Rs. 74,444 per bigha, with entitlement to solatium and interest as stipulated under the Act.
(A) The Land Acquisition Act provisions cited in this case govern the fixation of compensation for land compulsorily acquired for public purposes. Section 23 of the Act relates to the fixation of compensation, requiring it to be based on the market value and taking into consideration the nature and quality of the land. Section 53 addresses the payment of compensation and the procedure for determining the amount due to the person entitled. In this case, the acquired land was for constructing a social housing colony, and the dispute centered on the correct methodology for calculating compensation, considering sale instances and the nature of the acquired land.
(B) Key legal principles include that compensation must reflect market value, all relevant sale instances must be considered, and deductions may be made for the largeness of land. The nature of the land (irrigated vs. non-irrigated) and its suitability for the intended purpose are relevant, and solatium and interest are payable as per the Act.
Facts of the case:
Approximately 53.12 bighas of land in Tehsil Rohru, District Shimla, Himachal Pradesh was acquired via a Section 4 Notification dated 15th July, 1989 for a social housing colony. The Land Acquisition Officer awarded compensation at Rs. 40,000 per bigha. Claimants and Appellants presented differing sale instances, with the Reference Court averaging all instances after rejecting distinctions between land types, leading to a compensation figure of Rs. 1,11,660 per bigha. The High Court later excluded two sale instances from Appellants, factored in a 40% deduction for largeness of land, and set compensation at Rs. 1,08,000 per bigha.
Findings of Court:
The Supreme Court held that the High Court erred in disregarding the sale instances produced by the Appellants. The offer of Rs. 80,000 per bigha from the Appellants had not been accepted and, when adjusted for solatium and interest, would have resulted in a lower amount. The Reference Courts approach to consider all sale instances was correct, and a 33-1/3% deduction for development costs was appropriate given the scale of acquisition and the nature of the land.
Issues:
Whether the High Court was correct in excluding the sale instances tendered by the Appellants? Whether compensation should be determined by averaging all relevant sale instances? Whether a deduction for largeness of land is permissible and, if so, at what rate? Whether the nature of the acquired land (irrigated vs. non-irrigated) affects compensation when the land is to be used for housing?
Ratio Decidendi:
Compensation under the Land Acquisition Act must be based on a comprehensive consideration of all valid sale instances reflecting market value, without unduly excluding relevant evidence. A reasonable deduction for development costs due to largeness of the acquired land is permissible. The intrinsic nature of the land should be considered in context of its intended use, and solatium and interest are integral components of compensation.
Result:
The appeals are allowed. Compensation is fixed at Rs. 74,444 per bigha, with entitlement to solatium and interest as stipulated under the Act.
JUDGMENT
S.N. Variava, J.-These Appeals are against the Judgment of the High Court dated 31st March, 1998.
2. Briefly stated the facts are as follows:
Approximately 53.12 bighas of land in Tehsil Rohru, District Shimla, Himachal Pradesh was acquired for the purpose of constructing a social housing colony. The said acquisition was pursuant to a Section 4 Notification dated 15th July, 1989. The Land Acquisition Officer passed an Award fixing the compensation at Rs. 40,000/- per bigha. Being dissatisfied the Claimants filed references.
3. The Reference Court, by its Judgment dated 14th August, 1996, fixed compensation at Rs. 1,11,660/- per bigha. The Reference Court so fixed the compensation by taking two consideration 5 sale instances proved by the Claimants/Respondents and 2 sale instances proved by the Appellants. The Reference Court averaged the price of all the sale instances and arrived at the above mentioned figure. It must be mentioned that it was shown to the Reference Court that all the sale instances proved by the Claimants pertained to land which was Kiar Awal (irrigated land), whereas the acquired land was Bakhal Awal (non-irrigated land). The Reference Court held that this made no difference as all the lands were acquired for housing purposes and they were all suitable for and acquired for construction activity. The Reference Court also refused to give any deductions for largeness of the land.
4. The Appellants filed an Appeal in the High Court, which has been disposed of by the High Court by the impugned Judgment. The High Court refused to take into consideration the 2 sale instances cited by the Appellants on the ground that the Appellants have themselves offered a price of Rs. 80,000/- per bigha. The High Court only took into consideration the 5 sale instances cited by the Claimants. Averaging the price of those 5 sale instance, the figure arrived at was Rs.1,80,000/- per bigha. The High Court then deducted 40% for largeness of land and arrived at a figure of Rs. 1,08,000/- per bigha. The High Court fixed compensation at Rs. 1,08,000/- per bigha.
5. We have heard the parties. In our view, the High Court was absolutely wrong in excluding the 2 sale instances cited by the Appellants. The High Court omitted to notice that the offer of Rs. 80,000/- per bigha had not been accepted by the Claimants. In any event the offer was for Rs. 80,000/- per bigha as a consolidated amount. The Appellants would not then have to pay the solatium and interest amounts. We are told, and it is not disputed that the figure of Rs. 80,000/- per bigha would, if solatium and interest is deducted, have gone down to less than Rs. 40,000/- per bigha. In our view the approach of the Reference Court was correct. As all sale instances were proved, they were all to be taken into consideration. If all the sale instances are taken into consideration the average would work out to Rs. 1,11,660/- per bigha. But as all the sale instances are of small pieces of lands and the acquisition is of the large piece of land, a deduction of 33-1/3% must be made towards development cost. Thus the compensation would work out to Rs. 74,444/- per bigha.
6. We accordingly fix the compensation at Rs. 74,444/- per bigha. It is clarified that the Respondents/Claimants would also be entitled to solatium and interest as per the provisions of the Act.
7. The Appeals stand disposed off accordingly. There will be no order as to costs.
Appeal disposed of accordingly.
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