REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7203 OF 2004

Attar Singh and another   ….       Appellants

Versus

Union of India and another ….      Respondents  

WITH

CIVIL APPEAL NOS. 7204 TO 7208 OF 2004

J U D G M E N T

S.B, SINHA, J.  

1. Appellants  were  owners  of  agricultural  lands  situated  in  village  

Jharoda Kalan,  New Delhi.    The subject  matter  of  these appeals is  a

Notification dated 14th July, 1982 issued by the Union of India expressing  

its intention to acquire the land in the said village  

2. The Land Acquisition Collector  made an award on 10th August,  

1983 categorizing the acquired lands in three categories, i.e. ‘A’, ‘B’ and  

‘C’  and  fixed  the  market  value  thereof  at  the  rate  of  Rs.5,800/-  per;  

Rs.4,800/- per bigha; and Rs.2,400/- per bigha respectively.   

3. The  awardees  not  being  satisfied  with  the  said  award  filed  

applications  for  reference  before  the  District  Collector.   References  

having been made, the Reference Court vide its Award dated 22nd July,  

1987 assessed the fair market value of the acquired land at Rs.9,750/- per  

bigha.   

4. Still not satisfied, the appellants preferred appeals before the High  

Court seeking enhancement of compensation for acquisition of their lands  

at the rate of Rs.27,750/- per bigha.     

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5. Before the High Court a contention was raised that in a Lok Adalat  

Settlement,  the  market  value  of  similarly  situated  land  was  fixed  at  

Rs.22,000/-  per  bigha  at  the  instance  of  the  Union of  India,  pursuant  

whereto a Division Bench passed a decree on the said basis.   

6. A Division Bench of the High Court by its order dated February  

28, 2003, however, on the basis of its earlier decision, assessed the fair  

market value at Rs.11,500/- per bigha.  

7. Learned counsel appearing on behalf of the appellants submitted  

that in a matter of this nature, the High Court having regard to the claim  

of  the  appellants,  namely  Rs.27,750/-  per  bigha  should  have  awarded  

compensation at least @ Rs.22,000/- which was fixed as the fair market  

price for lands similarly situated.  

8. The principal question which, therefore, arises for consideration is  

as to whether any agreement entered into by and between the holders of  

the lands and the Union of India in a Lok Adalat should have formed the  

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basis for determination of the amount of compensation in respect of the  

lands which are said to be similarly situated.  

9. It does not appear that before the High Court, the particulars of the  

matter which was settled in the Lok Aalat had been produced.  Before us  

only an order sheet dated 5th November, 1992 passed in R.F.A. No.891 of  

1987 has been produced, which reads as under :-

“Before the Lok Adalat,  the parties  agreed that  the  market  price  of  the  acquired  land  is  Rs.22,000/- per bigha.  In view of the settlement  made before the Lok Adalat, we fix the market  price of the land at Rs.22,000/- per bigha.

The  appellant  shall  be  entitled  to  increased  compensation under Section 23(1A) of the Land  Acquisition Act, 1894 as amended by 1984 Act.  The appellant shall also be entitled to solatium at  30% per annum and interest at the rate of 9% per  annum for the first year and at the rate of 15%  per annum thereafter till payment.  The Supreme  Court  has  already decided  the  matter  regarding  the  payment  of  interest  and,  therefore,  the  question of award of interest need not await the  decision of the Supreme Court  as suggested by  the Lok Adalat.

The appeal is allowed with costs.”

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10. It is now a well settled principle of law that determination of the  

market  value  of  the  land  acquired  indisputably  would  depend  upon a  

large number of factors including the nature and quality thereof.   The  

norms which are required to be applied for determination of the market  

value of the agricultural land and homestead land are different.  In given  

cases location of land and in particular, closeness thereof from any road  

or high-way would play an important role for determination of the market  

value wherefor belting system may in appropriate cases may be resorted  

to.  The position of the land, particularly in rainy season, existence of any  

building  etc.  also  plays  an  important  role.   A  host  of  other  factors  

including  development  in  and  around  the  acquired  land  and/or  the  

potentiality of development will also have a bearing on determination of  

the fair market value of the land.   

11. Determination of the market  value of the land may also depend  

upon the facts and circumstances of each case, amongst them would be  

the  amount  of  consideration  mentioned  in  a  deed of  sale  executed  in  

respect  of  similarly  situated  land  near  about  the  date  of  issuance  of  

Notification in terms of Section 4(1) of the Act ; in absence of any such  

exemplars, the market value can be determined on yield basis or in  case  

of an orchard on the basis of number of fruit bearing trees.   

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12. It is also well settled that for the purpose of determination of price  

of  acquired  land,  the  courts  would  be  well  advised  to  consider  the  

positive  and negative  factors,  as  has been laid  down by this  Court  in  

Viluben Jhalejar Contractor vs. State of Gujarat [(2005) 4 SCC 789], i.e. :

Positive factors Negative factor

(i) Smallness of size (i) Largeness of area

(ii) Proximity to a road (ii) Situation  in  the  interior  at  a  distance from the road

(iii) Frontage on a road (iii) Narrow strip of land with very  small  frontage  compared  to  depth

(iv) Nearness to developed area (iv) Lower  level  requiring  the  depressed portion to be filled  up  

(v) Regular shape (v) Remoteness  from  developed  locality

(vi) Level  vis-à-vis  land  under  acquisition  

(vi) Some special disadvantageous  factors  which  would  deter  a  purchaser

(vii) Special  value  for  an  owner  of  an  adjoining  property  to  whom  it  may  have  some  very special advantage.

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13. This Court in Union of India v. Pramod Gupta, [(2005) 12 SCC 1],  

on the question of determination of market value opined :-  

“24. While  determining  the  amount  of  compensation  payable  in  respect  of  the  lands  acquired by the State, the market value therefor  indisputably has to be ascertained. There exist  different modes therefor.

25. The best method, as is well known, would  be the amount which a willing purchaser would  pay to the owner of the land. In absence of any  direct  evidence,  the court,  however,  may take  recourse  to  various  other  known  methods.  Evidences admissible therefor inter alia would  be judgments and awards passed in respect of  acquisitions of lands made in the same village  and/or neighbouring villages. Such a judgment  and award, in the absence of any other evidence  like the deed of sale,  report  of the expert and  other  relevant  evidence  would  have  only  evidentiary value.

26. Therefore, the contention that as the Union  of India was a party to the said awards would  not  by  itself  be  a  ground  to  invoke  the  principles  of  res  judicata  and/or  estoppel.  Despite  such  awards  it  may  be  open  to  the  Union of India to question the entitlement of the  respondent  claimants  to  the  amount  of  compensation and/or the statutory limitations in  respect thereof.  It  would also be open to it  to  raise  other  contentions  relying  on  or  on  the  basis  of  other  materials  brought  on  record.  It  was also open to the appellant to contend that  the lands under acquisition are not similar to the  lands in respect whereof judgments have been  delivered.  The  area  of  the  land,  the  nature  thereof,  advantages  and  disadvantages  occurring  therein  amongst  others  would  be  relevant  factors  for  determining  the  actual  market  value  of  the  property  although  such  judgments/awards, if duly brought on record, as  

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stated  hereinbefore,  would  be  admissible  in  evidence.”

It was furthermore opined :-

“36. Yet again in  Ras Behari Mandal v.  Raja  Jagadish Chandra Deo Dhaubal Deb the Patna  High Court reiterated the presumption that the  lessor  retains  all  the  rights  in  mines  and  quarries.  It  also  noticed  the  decision  of  the  House of Lords in  Great  Western Rly.  Co. v.  Carpalla United China Clay Co. Ltd.wherein a  grant reserving minerals was held to exclude a  deposit  of  china clay despite  the fact  that  the  same was found near the surface.”

It was also held that:-

“8. In  V.  Hanumantha  Reddy v.  Land  Acquisition  Officer  &  Mandal  R.  Officer the  law is stated in the following terms:  

“It is now a well-established principle of  law  that  the  land  abutting  the  national  highway will fetch far more higher price  than the land lying interior.”

This Court furthermore opined :-

“84. It is also trite to state that the market value  of agricultural land is lower than that of the land  suitable  for  commercial  purposes.  (See  Om  Prakash v. Union of India.)

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It was observed :-

“87. The  courts  will  also  have  to  take  into  consideration  the  enormity  of  the  financial  implication of enhancement in view of the size  of the land acquired for a particular project.”

In  Ranvir Singh v. Union of India,  [(2005) 12 SCC 59], this  

Court held as under :-  

“22. Concededly,  the  High  Court  in  its  impugned judgment did not place any reliance  whatsoever upon the sale instances whereupon  strong reliance has been placed by the parties  solely  on  the  ground that  neither  the  vendors  nor the vendees thereof had been examined as  witnesses.  It  has  also  not  placed  any reliance  upon any other judgment or award filed by the  parties.  The  High Court  while  arriving  at  the  said  finding  evidently  took  into  consideration  the law as it then stood. The correctness of the  decisions wherein the aforementioned view had  been  taken  was  doubted  and  the  matter  was  referred to a larger Bench.”  

Referring to  Cement  Corporation  (supra),  it  was opined that the  

High Court was required to consider the deeds of sale in their  proper  

perspective for determining the market value of the acquired land.

In Karimbanakkal Sulaiman (Dead) by L.Rs.  v.  Special Tahsildar  

for K.A.K.P.I.P., [(2004) 13 SCC 643], this Court held:    

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“These  factors  have  been  taken  into  consideration by the High Court  in fixing the  land  value.  Moreover,  the  land  acquired  was  agricultural  land  and  it  was  acquired  for  the  purpose  of  an  irrigation  project.  There  is  nothing on record to show that the land had any  commercial  value  or  future  potentialities.  We  do not think that the land value fixed is too low  to be interfered with by this Court.”

In Viluben Jhalejar Contractor  v. State of Gujarat, [(2005) 4 SCC  

789], this Court opined :-

“24. The purpose for which acquisition is made  is  also  a  relevant  factor  for  determining  the  market  value.  In  Basavva v.  Spl.  Land  Acquisition  Officer deduction to  the  extent  of  65% was made towards development charges.”

In  Basant Kumar v.  Union of India, [ (1996) 11 SCC 542 ], this  

Court held that even if the entire land is of one village one standard for  

determining the market value should not be applied, stating:-

“….It has been firmly settled law by beadroll of  decisions of this Court that the Judge determining  the compensation under Section 23(1) should sit  in the armchair of a willing prudent purchaser in  an open market and see whether he would offer  the same amount proposed to be fixed as market  value as a willing and prudent buyer for the same  or  similar  land,  i.e.,  land  possessing  all  the  advantageous  features  and  to  the  same  extent.  This  test  should  always  be  kept  in  view  and  

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answered affirmatively, taking into consideration  all  relevant  facts  and circumstances.  If  feats  of  imagination are allowed to sway, he outsteps his  domain  of  judicial  decision  and  lands  in  misconduct amenable to disciplinary law...”

14. On what  basis  the  aforementioned  settlement  in the  Lok Adalat  

was arrived at is not known.  Details of the land with regard to location,  

nature, advantages and dis-advantages pertaining thereto are absent.  In  

absence  of  any detailed  particulars  showing the similarity  of  the  land  

and/or the respective advantages and dis-advantages pertaining thereto, in  

our opinion, the said settlement had rightly not been made the basis for  

determining the market value of the land.   

15. The High Court, thus, was required to determine the fair market  

value of the land on the basis of the legal principles laid down by this  

Court in the decisions referred to heretobefore.   No contention has been/  

could be raised that the High Court in passing the impugned judgment  

failed to take into consideration the well settled legal principles.   

16. There is  another  aspect  of  the  matter  which cannot  also be lost  

sight  of.   The  High  Court  based  its  decision  on  its  earlier  common  

judgment arising out of the same notification.  The lead judgment was  

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delivered in the case of Jia Ram and others  vs. Union of India, -  R.F.A.  

No. 500 of 1987.   

We have not been informed whether any appeal has been preferred  

against that judgment and if so, what was the result thereof.  In absence  

of that information, we are of the opinion that the appellants should not  

be treated differently from Jia Ram (supra) who might not have preferred  

any appeal and have accepted the judgment of the High Court.   

17. For the reasons stated above,  there is no merit  in these appeals.  

The same are dismissed accordingly.  No costs.

………………………………..J. [ S.B. Sinha ]

…………………………… …..J.

[ Cyriac Joseph ] New Delhi August 4, 2009

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