REPORTABLE

    IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 1760-1761 OF 2004

IYASAMY & ANR. ....

Appellants

Versus

SPL. TAHSILDAR, LAND ACQUISITION …

Respondent

WITH

CIVIL APPEAL NOS. 6875-6877 OF 2004

WITH

CIVIL APPEAL NO. 7434 OF 2004

JUDGMENT

Dr. Mukundakam Sharma, J.

1. All  these  appeals  are  arising  out  of  the  land  acquisition  

proceeding in which various notifications under Section  

4(1)  of  the  Land  Acquisition  Act,  1894  (hereinafter  

referred to as “the Act”) were issued in proximity of time,  

i.e. in 1981, with respect to adjoining lands in the Erode  

and Periasemur Villages for the construction of houses  

for  the  scheme  called  “Erode  West  Neighbourhood  

Scheme” and therefore we propose to decide them by a  

common  judgment  and  order.  The  Civil  Appeal  Nos.  

1760-1761 are directed against final judgment and order  

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dated 18-01-2001 passed by the Madras High Court in  

Appeal No.298/92 and CMP No. 15057/97 wherein the  

High Court by its impugned judgment partly allowed the  

appeal filed by the Respondent and declined to condone  

the  delay  of  7  days  in  filing  the  Cross  appeal  by  the  

appellants  and  consequently,  dismissed  the  CMP  No.  

15057/97. Consequent thereto,  the cross-appeal  of the  

Appellants was also dismissed without going into merit.  

The  Civil  Appeal  No.  6875-6877/04  and  7434/04  are  

directed  against  the  final  judgment  and  order  dated  

17/10/03 passed in A.S. Nos. 754/02, 759/02. 760/02  

and 128/92 by the Madras High Court whereby the High  

Court by its impugned judgment and order dismissed the  

appeals filed by the appellants.  

2. The  appellants  were  not  satisfied  with  the  compensation  

awarded by the Land Acquisition Officer, so there were  

12 LAOPs filed before the Reference Court. The Reference  

Court enhanced the compensation and fixed it at the rate  

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of Rs. 6/- per sq. ft. Both the appellants and respondent  

filed appeals before the High Court. The High Court was  

pleased  to  remand  back  the  appeals  to  the  Reference  

Court except A.S. No. 298/92.

3. In  A.S.  No.  298/92,  the  appellants  moved  CMP  No.  

15057/97 to condone the delay  of  7 days in filing the  

cross  objection.  The  High  Court  dismissed  the  said  

application. Consequently, the cross appeal of appellants  

was  dismissed.  As  far  as  the  appeal  filed  by  the  

respondent in A.S. no. 298/92 was concerned, the High  

Court referred its judgment in A.S. No. 71/92 which was  

in reference to the same scheme for the adjoining survey  

no. and in which the High Court enhanced the market  

value to Rs. 9/- per sq. ft. and thereby the High Court in  

its impugned judgment and order dated 18/1/2001 also  

enhanced the market value of the land involved in A.S.  

No. 298/92 to Rs. 9/- per sq. ft., and deducted 33-1/3%  

towards  development  charges  and  ultimately  the  

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compensation was fixed at Rs. 6/- per sq. ft. The High  

Court also rejected the claim of interest on solatium u/s  

23  (2)  and  additional  compensation  u/s  23(1A)  of  the  

Act.

4. As far as the matters remanded back are concerned,  the  

Reference Court  fixed compensation at the rate of Rs. 6/-  

per sq. ft. after remand for the lands involved in LAOP Nos.  

4/87,  9/87,  19/87  and  25/87,  against  which  A.S.  No.  

754/02,  759/02,  760/02  and  128/92  were  made.  

Simultaneously, by separate orders, the Reference Court in  

LAOP Nos. 22/87, 24/87, 26/87 and 410/00, which were  

matters involving neighbouring lands for the same housing  

scheme and which were also remanded back by the High  

Court, fixed compensation at the rate of Rs. 13-14/- per sq.  

ft., against which appeals were also  filed. All these appeals  

were  decided  by  the  High  Court  by  judgment  and  order  

dated  17/10/03  whereby  the  High  Court  reduced  the  

compensation of 13-14/- per sq. ft. awarded in LAOP Nos.  

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22/87, 24/87, 26/87 and 410/00 by the Reference Court  

to  6.25/-  per  sq.  ft.,  while  A.S.  Nos.  754/02,  759/02,  

760/02  and  128/92  were  dismissed  upholding  the  

compensation @ 6/- per sq. ft.

1. We have heard the learned counsel appearing on behalf of  

the parties at length. The principal issue that arises for our  

consideration  is  what  would  be  the  reasonable  

compensation for the acquired lands in the present  case.  

The  learned  counsel  for  Appellants  contended  before  us  

that  the  Reference  Court  in  LAOP  Nos.  22/87,  24/87,  

26/87 and 410/00 fixed compensation at the rate of Rs.  

13-14/-  per  sq.  ft.,  therefore,  the  appellants  are  also  

entitled to the same amount of compensation and that the  

High  Court  by  its  impugned  judgment  and  order  dated  

17/10/03 erroneously fixed the market value @  Rs.6.25/-  

and 6/- by overlooking the evidence of sale instances (i.e.  

Ex. C15, C16 and C17) which shows the market value of  

the adjoining lands at Rs. 19-20/- per sq. ft. Further, the  

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learned  counsel  for  appellants  contended  that  the  

deduction of  1/3rd towards development charges  is illegal  

and not sustainable.

1. We have considered the evidence on record and appreciated  

the  documents  to  determine  the  just  and  fair  market  

value  of  the  acquired  lands.  The  High  Court  by  its  

impugned  judgment  and  order  dated  17.10.2003  

considered Exhibit C3 which is a sale deed in which the  

sale of the adjoining land was made at the rate of Rs.  

10/- per sq ft. The evidence produced further proves that  

this land is on the Nasiyanur Road and very near and  

almost  adjacent  to  the  land  acquired.  Therefore,  this  

piece  of  evidence  is  very  valuable  and  dependable  for  

determining  the  market  value  in  the  present  case.  

However,  this  sale  deed  pertains  to  a  small  portion of  

land i.e. one acre and four cents, while the acquired land  

is a large tract of land.

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1. The legal position in this regard has been reiterated by this  

court time and again. It  was held in  Smt.Kausalya Devi  

Bogra and Ors. Vs. Land Acquisition Officer, Aurangabad  

& Anr.  reported at (1984) 2 SCC 324, (in paragraph 13)  

that: -  

“Where large tracts of  land are acquired,  valuation  in  transaction  in  regard  to  smaller properties does not offer a proper  guideline and therefore, cannot be taken a  real  basis for  determining  compensation.  For  determining  the  market  value  of  a  large  property  on  the  basis  of  a  sale  transaction  for  smaller  property  a  deduction should be given.”

Besides, in  Kasturi & Ors. v. State of Haryana reported at  

(2003) 1 SCC 354 it was held that (in paragraph 7):-

“It  is  well  settled  that  in  respect  of   agricultural  land  or  undeveloped  land  which has potential  value  for  housing or   commercial  purposes,  normally  1/3rd  amount  of  compensation  has  to  be  deducted  out  of  the  amount  of   compensation  payable  on  the  acquired  land  subject  to  certain  variations  

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depending on its nature, location, extent of   expenditure involved for development and  the area required for roads and other civic  amenities  to  develop  the  land  so  as  to  make  the  plots  for  residential  or   commercial purposes.”

1. If  we assess the market value of the land acquired at Rs.  

10/- per sq ft. on the basis of Ex. C3 and deduct 1/3rd  

towards development charges, it comes approximately to  

Rs.  6.25  per  sq  ft.  As  far  as  Exs.  15,  16  and  17  are  

concerned, in those documents, transaction were made  

at the rate 20/- per sq. ft. But the lands pertaining to  

those sale deeds are highly developed and better located  

being situated right on the Manickampalayam road not  

very far from the Mettur road, and the Municipal Colony.  

Therefore,  if a deduction of 65% should be made as is  

done in some cases decided by this Court, the valuation  

would come to Rs. 6.25/-. The aforesaid lands covered by  

the three exhibits are land of better quality, and better  

location with better connectivity. Besides, these are small  

pieces of land compared to a large tract of land acquired  

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in  the  present  case.  Therefore,  a  deduction  of  65% of  

land  value  appears  to  be  just  and  appropriate.  For  

quality and location of land, if deduction is permissible at  

1/3rd valuation  and  for  smaller  piece  of  land  pitted  

against large tract of land also another 1/3rd deduction is  

permissible,  the same would again amount to valuation  

being  fixed  at  Rs.  6/-  or  Rs.  6.25/-.  This  amount  of  

compensation was awarded by the High Court in respect  

of  acquired  lands  in  LAOP Nos.  22/87,  24/87,  26/87  

and  410/00.   The  lands  in  LAOP Nos.  22/87,  24/87,  

26/87  and  410/00  have  an  access  to  road  which  

connects Nasiyanur Road and Manickampalayam Road,  

however, such advantages are not available to the land in  

the  present  case  as  the  same  are  landlocked  plots.  

Therefore, we uphold the compensation at the rate of Rs.  

6/- per sq. ft. in respect of present lands as awarded by  

the High Court.

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1. There  is  also  other  guidance  available  on  record  to  

determine the valuation in the form of various awards with  

respect to acquisition of adjoining lands. These awards are  

important piece of evidence for arriving at the market value  

acquired  land  in  view  of  the  decision  of  this  court  in  

Mohammad  Raofuddin  vs.  Land  Acquisition  Officer  

reported at (2009) 14 SCC 367, wherein it was held that  

(paragraph 21): -

“….reliance on earlier judgment in respect  of  a  land  situated in  the  same  village,  acquired only six months ago, could not be  said to be an irrelevant factor affecting the  determination  of  market  value/  compensation in respect of the land of the  appellant.”

1.  The  High  Court  in A.S. No. 875 of  1991  and  cross-

objection   No.   253  of  1992  fixed   the  market  value  at  

Rs. 6, 99, 934/- for one acre and ten cents, which works  

out to Rs. 6/- per sq. ft.  The lands are situated in S.No.  

147/1,  Periasemur  village  acquired  for  the  same  public  

purpose pursuant to notification under Section 4 of the Act  

dated 15.07.1981. Though the revenue village is different,  

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the lands are located very adjacent and in the same locality  

having similar facilities. Similarly in A.S. No. 137 of 1993  

and the cross-objection No. 72 of 1994, the Division Bench  

of the High Court fixed  the market  value of the land Rs.  

5.53 per sq. ft. In this matter the land was covered by S.No.  

145/1,2,3 and 4, Erode village acquired for the same Erode  

neighbourhood scheme by the notification dated 5/1/1981,  

which is next to the present acquired land. In A.S. No.  584  

of  1986  in  which  adjoining  land  was  acquired  via  

notification dated 14-3-1973, the division bench of the High  

Court fixed the market value Rs. 5/- per sq. ft. Since all  

these  awards  have  become  final  and  binding,  therefore  

reliance  could  be  placed  on the same.  Consequently,  the  

reasonable  compensation  and  fair  market  value  of  the  

present acquired land should be Rs. 6/- per sq.ft.

1. The  learned  counsel  for  Appellants  in  Civil  Appeal  Nos.  

1760-1761/04 are also claiming interest on solatium and  

additional compensation as the impugned order of the High  

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Court  was  pronounced  prior  to  judgment  in  Sunder  v.  

Union of India reported at  (2001) 7 SCC 211. Since the  

present appeal was pending before this court, therefore, the  

ratio  of  Sunder  v.  Union  of  India would  entitle  the  

appellants to receive interest on solatium under section 23  

(2) and additional compensation under Section 23 (1A) in  

terms  of  the  said  decision.  It  was  decided  in  Gurpreet  

Singh v. Union of India reported at (2006) 8 SCC 457 that  

such  interest  can  be  claimed  only  from  the  date  of  the  

judgment in  Sunder (supra) i.e. 19.9.2001. Therefore,  the  

appellants in the Civil Appeal Nos. 1760-1761/04 shall be  

entitled to such interest for the period after 19.9.2001, not  

the period prior to the same.

1.  In  view of  the  aforesaid,  we do not  find any merit  in  

these  appeals  to  interfere  with  the  quantum  of  

compensation  awarded  by  the  High  Court  and  

accordingly, dismiss the Civil Appeal Nos. 6875-6877/04  

and 7434/04. However, we partly allow the Civil Appeal  

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Nos. 1760-1761/04 with respect to interest on solatium  

u/s 23(2) and additional compensation u/s 23(1A) of the  

Act,  which  shall  be  guided  by  observations  and  

directions made in paragraph 11 above. The parties are  

left to bear their own cost.

............................................J         [Dr. Mukundakam Sharma ]

............................................J         [ Anil R. Dave ]

New Delhi, September 30, 2010

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