Land Acquisition Act, 1894 – ss. 4 and 23 – Compensation – Enhancement of – A Notification u/s.4 was issued on 06.06.1988 and the land in question was acquired for public purposes for establishing Cotton Spinning and Ginning Mills – The Land Acqusition Officer awarded compensation considering the value of the land at the rate of Rs.25,000/- per acre – The Reference Court relying upon the sale deed dated 24.05.1979 as Ex. AW6/C by which the land admeasuring 43 kanals 13 marlas out of the acquired at the rate of Rs.50,000/- per acre and thereafter granted the increase of 12% per acre and thereafter adopting the cut of 25% determined the compensation at Rs.1,12,000/- per acre – However, the High Court determined the value at Rs.88,400/- per acre after adopting cut of 15% – On appeal, held: In the present case both, the Reference Court as well as the High Court, have determined the value of the land considering the sale deed dated 24.05.1979 which is more than 9 years before the notification of the acquisition – Considering the observations made by the Supreme Court in the case of Rameshbhai Jivanbhai Patel that it is reasonably safe to determine the market value by providing appropriate escalation over the approved market value of nearby lands in the previous years, when relied on sale transactions/acquisitions precede the subject acquisition by only a few years, i.e., upto 4-5 years and beyond that it may be unsafe – The fact that time gap between the sale deed relied upon and the date of notification of acquisition is more than
9 years in the instant case, the courts below ought to have been very cautious in relying upon the sale deed dated 24.05.1979 – Be that it may and assuming that the sale deed dated 24.05.1979 was the best evidence available to determine the value of land acquired, in that case also taking annual increase at the rate of 12% is not justified – In the instant case, in the facts and circumstances of the case the annual increase/escalation ought to have been at the rate of 10% maximum – The High Court rightly adopted the cut of 15%, which in the facts and circumstances of the case is not required to be interfered with – Therefore, there is no reason to interfere with the impugned judgment of the High Court.
Dismissing the Appeals, the Court
HELD: 1. The questions which are posed for consideration of this Court are :
(i) Whether in the facts and circumstances of the case the Courts below have erred in taking annual increase at the rate of 12% at the flat rate and not applying the cumulative rate?
(ii) Whether in the facts and circumstances of the case the High Court has erred in adopting the cut/deduction of 15%, while determining the value of the land acquired?
2. In the case of Rameshbhai Jivanbhai Patel, it is specifically observed and held that when market value is sought to be ascertained with reference to transactions which took place before the acquisition, the law adopted is to collect the year to year increase. It is further observed and held that as the percentage of increase is always with reference to the previous year’s market value, the appropriate method is to adopt the increase cumulatively and not applying a flat rate. However, at the same time it is also observed and held in the said decision that it is reasonably safe to determine the market value by providing appropriate escalation over the approved market value of nearby lands in the previous years, when relied on sale transactions/acquisitions precede the subject acquisition by only a few years, i.e., upto 4-5 years. It is further observed in the said decision that beyond that it may be unsafe, even if it relates to a neighbouring land. In the present case both, the Reference Court as well as the High Court, have determined the value of the land considering the Sale Deed dated 24.05.1979 which is more than
9 years before the notification of the acquisition. Therefore, considering the observations made by this Court in the case of Rameshbhai Jivanbhai Patel and considering the fact that time gap between the sale deed relied upon and the date of notification of acquisition is more than 9 years, the courts below ought to have been very cautious in relying upon the Sale Deed dated 24.05.1979. Be that it may and assuming that the Sale Deed dated 24.05.1979 was the best evidence available to determine the value of land acquired in that case also taking annual increase at the rate of 12% is not justified. This Court is of the opinion that, in the facts and circumstances of the case the annual increase/escalation ought to have been at the rate of 10% maximum. Even otherwise, it is required to be noted that State of Punjab suffered due to militancy from 1979 onwards till 1992 and because of that the prices would have crashed. Therefore, to grant the escalation/price rise at the rate of 12% would not be justified at all. After considering the case of Rameshbhai Jivanbhai Patel, it is observed and held by this Court in the case of Lal Chand that even if the transaction is 2 to 3 years prior to the acquisition, the Court should, before adopting a standard escalation satisfy itself that there were no adverse circumstances. It is further observed and held that the question is therefore, necessary before increasing the price with reference to the old transactions. Therefore, assuming that the appellants are right in submitting that the increase in land value should have been adopted on cumulative basis, in the peculiar facts and circumstances of the case noted hereinabove, there is no reason to interfere with the impugned judgment and order passed by the High Court. [Para 6.3][796-H; 797-A-C; 797-G-H; 798-A-E]
3. Now so far as the deduction at the rate of 15% towards the development charges, it also does not call for any interference of this Court considering the fact that the land in question at the relevant time was an agricultural land. However, taking into consideration the fact that the sale instance dated 24.07.1979 relied upon was a quite big chunk of land and the location of the acquired land and the land was acquired for spinning mill, the High Court has rightly adopted 15% cut, which in the facts and circumstances of the case is not required to be interfered with. [Para 6.5][798-F-G]
ONGC Ltd. v. Rameshbhai Jivanbhai Patel & Anr. (2008)
14 SCC 745 : [2008] 11 SCR 927 – relied on.
Mehrawal Khewaji Trust, Faridkot and Ors. v. State of Punjab and Ors. (2012) 5 SCC 432 : [2012] 4 SCR 24; Ashok Kumar and Ors. v. State of Haryana and Ors. (2015) 15 SCC 200; Atma Singh v. State of Haryana (2008) 2 SCC 568 : [2007] 12 SCR 1120; Anjani Molu Dessai v. State of Goa and Anr. (2010) 13 SCC 710 : [2010] 14 SCR 997; Trishala Jain and Anr. v. State of Uttaranchal and Anr. (2011) 6 SCC 47 : [2011] 8 SCR 520; Lal Chand v. Union of India (2009) 15 SCC 769 : [2009] 13 SCR 622 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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