1988 JTR(SC) 443
1988 2 CurCC(SC) 483 ; 1988 3 JT 115 ; 1988 2 RRR 196 ; 1988 2 Scale 50 ; 1988 3 SCC 760 ; 1988 2 UJ 378 ; 1988 KHC 1133
SUPREME COURT OF INDIA
VIJAYSINGH LILADHAR
Versus
SPECIAL LAND ACQUISITION OFFICER
Decided on, July 21, 1988
Act
Referred
:CONSTITUTION OF INDIA : Art.133(1)(a)
LAND ACQUISITION ACT : S.23, S.30(2), S.18, S.23(2), S.28
(A) The case centers on the determination of market value and compensation for acquired lands under the Land Acquisition Act. The court examined the application of Section 23 and Section 23(2) regarding the factors influencing market value, particularly the impact of future development and the validity of deductions for infrastructure like roads and open spaces. Section 18 was relevant as the claimants sought enhancement of the Collector's award. The court further analyzed Section 30(2) and Section 28 in the context of the Central Amending Act (Act 68 of 1984) to determine if retrospective benefits regarding solatium and interest could be applied to appeals pending before the court. Additionally, the jurisdiction for the appeal was exercised under Article 133(1)(a) of the Constitution of India.
(B) The primary legal principle established is that while a deduction for land required for roads and open spaces is permissible when valuing undeveloped land, a further deduction based on present value (using actuarial tables like Mirams Tables) to account for a time lag in development is not legally sustainable for determining market value.
Facts of the case:
Agricultural lands were acquired for the construction of a police headquarters. The claimants challenged the compensation awarded by the trial court and the High Court. For certain parcels, the High Court had valued the land at Rs. 7,000 per acre, applied a 25% deduction for development (roads/open spaces), and then applied a further deduction using Mirams Tables because development was expected to take 12 years to reach the interior land.
Findings of Court:
1. The valuation of Rs. 7,000 per acre and the 25% deduction for roads and open spaces were found to be reasonable and unexceptionable.
2. The further deduction to find the 'present value' of the sum based on a 12-year time lag was held to be unjustified and legally incorrect.
3. The entitlement to benefits under the Central Amending Act (Act 68 of 1984) was deferred pending a decision from a Constitution Bench regarding the retrospective application of amended Sections 23(2) and 28.
Issues:
1. Whether a further deduction based on the present value of future expected returns (via Mirams Tables) is permissible in determining compensation for acquired land.
2. Whether the appellants are entitled to enhanced solatium and interest under the Central Amending Act (Act 68 of 1984).
Ratio Decidendi:
Market value should be determined based on the potential of the land; while deductions for necessary infrastructure (roads/open spaces) are valid, reducing the compensation further by discounting it to a present value based on a predicted time lag for development is not a recognized method of valuation under the Land Acquisition Act.
Result:
Appeals partly allowed. The compensation was revised to Rs. 5,250 per acre (Rs. 7,000 less 25% deduction), removing the additional deduction for present value. Benefits of the Amending Act were left subject to the Constitution Bench's decision.
(A) The case centers on the determination of market value and compensation for acquired lands under the Land Acquisition Act. The court examined the application of Section 23 and Section 23(2) regarding the factors influencing market value, particularly the impact of future development and the validity of deductions for infrastructure like roads and open spaces. Section 18 was relevant as the claimants sought enhancement of the Collector's award. The court further analyzed Section 30(2) and Section 28 in the context of the Central Amending Act (Act 68 of 1984) to determine if retrospective benefits regarding solatium and interest could be applied to appeals pending before the court. Additionally, the jurisdiction for the appeal was exercised under Article 133(1)(a) of the Constitution of India.
(B) The primary legal principle established is that while a deduction for land required for roads and open spaces is permissible when valuing undeveloped land, a further deduction based on present value (using actuarial tables like Mirams Tables) to account for a time lag in development is not legally sustainable for determining market value.
Facts of the case:
Agricultural lands were acquired for the construction of a police headquarters. The claimants challenged the compensation awarded by the trial court and the High Court. For certain parcels, the High Court had valued the land at Rs. 7,000 per acre, applied a 25% deduction for development (roads/open spaces), and then applied a further deduction using Mirams Tables because development was expected to take 12 years to reach the interior land.
Findings of Court:
1. The valuation of Rs. 7,000 per acre and the 25% deduction for roads and open spaces were found to be reasonable and unexceptionable.
2. The further deduction to find the 'present value' of the sum based on a 12-year time lag was held to be unjustified and legally incorrect.
3. The entitlement to benefits under the Central Amending Act (Act 68 of 1984) was deferred pending a decision from a Constitution Bench regarding the retrospective application of amended Sections 23(2) and 28.
Issues:
1. Whether a further deduction based on the present value of future expected returns (via Mirams Tables) is permissible in determining compensation for acquired land.
2. Whether the appellants are entitled to enhanced solatium and interest under the Central Amending Act (Act 68 of 1984).
Ratio Decidendi:
Market value should be determined based on the potential of the land; while deductions for necessary infrastructure (roads/open spaces) are valid, reducing the compensation further by discounting it to a present value based on a predicted time lag for development is not a recognized method of valuation under the Land Acquisition Act.
Result:
Appeals partly allowed. The compensation was revised to Rs. 5,250 per acre (Rs. 7,000 less 25% deduction), removing the additional deduction for present value. Benefits of the Amending Act were left subject to the Constitution Bench's decision.
Judgment-
THAKKAR
( 1 ) THE appellants are original claimants whose lands were placed under acquisition pursuant to a notification under S. 4 of the Land Acquisition Act published on 8/03/1956. By the said notification a large block of undeveloped agricultural land admeasuring about 101 acres 33 gunthas was placed under acquisition for a public purpose viz. : for constructionof the headquarters, Poona Rural Police Charge. Dissatisfied with the determination of market value made by the High court by its judgment dated 1/03/1972 the appellants have approached this court by way of the present appeals. Another land owner whose lands were placed under acquisition, by the identical notification for the identical purpose has also approached this court by way of Civil Appeals Nos. 2721 and 2722 (N) of 1972 which are being disposed of by a separate judgment. Since the lands belonging to the appellants were acquired under the identical notification and the appeals relating to said lands were also disposed of by the High court by the aforesaid common judgment rendered on 1/03/1972, the present appeals by special leave were heard together with the aforesaid two appeals. As the questions involved in the present two appeals are common and the reasoning which commended to the High court applies equally to the matters pertaining to the appellants, the present appeals can also be conveniently dealt with in accordance with the view taken by us in the case of Chimanlal Hargovinddas v. Special Land Acquisition Officer, Poona.
( 2 ) IN the present appeal, the land under acquisition is comprised in Survey Nos. 85 and 86. There were two parcels of lands, one admeasuring 2 acres and 1/4 gunthas, and another admeasuring 13 acres and 17 gunthas. Insofar as the smaller parcel admeasuring 2 acres and 1/4 gunthas is concerned, the trial court has awarded Rs. 33,975. 00 by way of compensation. The High court has increased the amount awarded to the appellant from Rs. 33,975. 00 to Rs. 35,223. 98. No doubt the basis of computation adopted by the High court is different from the basis adopted by the trial court. But in the ultimate result the High court has enhanced the compensation. It is not shown that the High court has undervalued the lands. No good reason is shown of interfere with the total amount of compensation awarded by the High court. The amount awarded by the High. court will accordingly remain undisturbed.
( 3 ) INSOFAR as the larger parcel admeasuring 13 acres and 17 gunthas is concerned, the High court has taken the view that this land forming a part of Survey No. 86 was situated much in the interior. Having regard to the situation, the High court was of the opinion that development would take about 12 years to reach the appellants land. On this premise the High court has valued the land at Rs. 7,000. 00 per acre. The High court has also reached the conclusion that a deduction of 25 per cent required to be made for selling aside land for roads and open spaces etc. So far, the High courts view is unexceptionable. But having computed the compensation on these premises, the High court further directed that a further deduction should be made in order to find out the present value of the total amount computed on the basis of valuation at Rs. 7,000. 00 (less 25 per cent) on the premise that this amount wouldcome to the hands of the vendor only after 12 years. In Chimanlal Hcirgovimidas case we have taken the view that the High court was perfectly justified in determining the market value at Rs. 7,000. 00, subject to deduction at 25 per cent to account for land needed for roads and open spaces etc. We have also taken the view that the High court was not justified in directing that a further deduction should be made on the basis of Mirams Tables in order to find out the present value of the sum computed on the aforesaid basis on the premise that this amount would be fetched after a time lag of 12 years. It is not necessary to reiterate the same reasoning in the context of the present appeals for the reasons have been elaborately set out in Chimanlal Hargovinddas case. We must accordingly pass an order in the same terms as we passed in Chimanlal case :
IN the result appellant must be awarded compensation at Rs. 7,000. 00 per acre subject to deduction or allowance of 25 per cent to account for land required to be set apart for roads, open spaces etc. In other words appellant will be entitled to be paid compensation for 13 acres 7 gunthas comprised in Survey No. 85 at Rs. 5,250. 00 per acre (Rs 7,000. 00 less 25 per cent i. e. less 1,750. 00 Rs. 5,250. 00 in place of the lesser sum awarded by the High court. This appeal must be partly allowed to this extent accordingly.
( 4 ) THE land under acquisition admeasures 19 acres and 33 gunthas. The High court has formed the opinion that inasmuch as the land in question is situated very much in the interior, development would take about 12 years to reach the said parcel of land. Accordingly the High court has determined the market value at Rs. 7,000. 00 per acre. As in the companion matters the High court had directed a deduction of 25 per cent to account for the extent of land required to be set apart for roads and open spaces. So far no exception can be taken. However the High court has also directed that a further deduction should be made in order to ascertain the present value of the total amount of compensation payable to the appellant having regard to the fact that such amount would come into the hands of the vendor after 12 years. For the reasons we have set out at length in Chimanlal case while we confirm the determination of the market value at Rs. 7,000. 00 per acre and the direction regarding setting apart of 25 per cent to account for land required to be set aside for roads and open spaces, we are of the opinion that the direction to make a further deduction by recourse to Mirams Table in order to deduce the present value of the land in question cannot be sustained. Under the circumstances in the matter of the appellant also an order in the following terms must be passed as has been done in Chimanlal Hargovinddas case and in Civil No. 1561 (N) of 1973 dealt with a short while ago :
IN the result appellant must be awarded compensation at Rs. 7,000. 00 per acre subject to deduction or allowance of 25 per cent to account for land required to be set apart for roads, open spaces etc. In other words appellant will be entitled to be paid compensation for 19 acres 33 gunthas at Rs. 5,250. 00 per acre (Rs 7,000. 00 less 25 per cent i. e. less Rs. 1,750. 00 = Rs. 5,250. 00 in place of the lesser sum awarded by the High court. This appeal must be partly allowed to this extent accordingly. 764 The following further order which will govern both appeals viz. Civil Appeals Nos. 1561 (N) and also 817 of 1973 requires to be passed as was done in the case of Chimanlal Hargovinddas case :
THE question however remains whether the appellants are entitled to the benefit of central Amending Act (Act 68 of 1984 providing payment of solatium and interest at enhanced rates on the ground that present appeals were pending before this court on 30/04/1982, The appellants would be entitled to the benefit thereof by virtue of S. 30 (2 of the Act if the view is taken that the said Act has retrospective operation in the sense that amended S. 23 (2 and S. 28 apply also in relation to an order under appeal against an award made by the Collector or court between 30/04/1982 and the commencement of the Amending Act. This must depend on the decision of the Constitution bench which is expected soon. The appellant will be entitled to the benefit of central Amending Act (Act 68 of 1984 in case the Constitution bench upholds the view expressed in Bhag Singh case and overrules the view expressed in Kamalajammanniavaru case. In case the Constitution bench affirms the view taken in Kamalajammanniavaru case, the appellants will not be entitled to such benefit.
( 5 ) APPEALS are partly allowed accordingly to the aforesaid extent. Order passed by the High court is modified to the corresponding extent.
( 6 ) HAVING regard to the facts and circumstances of the case there will be no order regarding costs in this court.