IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos.1330-1332 OF 2003

Kanta Devi & Ors. ...Appellant(s) Vs.

State of Haryana & Anr. ...Respondents With

CIVIL APPEAL No.      of 2008 @ SLP(C) No.9486 of 2003

CIVIL APPEAL No.      of 2008 @SLP(C) No.9380 of 2003

CIVIL APPEAL No.      of 2008 @SLP(C) No.18028 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.3914 of 2002

CIVIL APPEAL No.      of 2008 @SLP(C) No.18029 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.3793 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.15919 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.15925 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.15926 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.15922 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.15921 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.15923 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.16136 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.16137 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.18032 of 2001

CIVIL APPEAL No.      of 2008 @SLP(C) No.9488 of 2003

CIVIL APPEAL No.      of 2008 @SLP(C) No.9499 of 2003

AND

CIVIL APPEAL No.      of 2008               @SLP(C) No.9531 of 2003

J U D G M E N T

ALTAMAS KABIR,J.

1. Apart from Special Leave Petition (Civil) Nos.

9488, 9499 and 9531, all of 2003, leave is

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granted in respect of all the other Special

Leave Petitions heard along with Civil Appeal

Nos. 1330-1332 of 2003.

2. These appeals, have their genesis in a common

award dated 14th March, 1989, made by the Land

Acquisition Collector, Kurukshetra, whereby he

awarded  compensation  in  respect  of  the

acquired lands at the rate of Rs.60,000/- per

acre  for  land  in  the  form  of  Chahi,  Gair

Mumkin Tubewell, etc. and at the rate of Rs.

40,000/- per acre in respect of Gair Mumkin

Talab Land and Rasta Land.

3. Twenty seven References were made to the Land

Acquisition Judge, Kurukshetra, under Section

18 of the Land Acquisition Act, 1894 and the

same were disposed of by an Award dated 2nd

January, 1993.   

4. Being  dissatisfied  as  to  the  extent  of

compensation  awarded,  the  claimants  filed

Regular First Appeals before the High Court.

Similarly, being aggrieved by the enhancement

of the market value of the lands, the State

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also preferred 27 Regular First Appeals.  In

all, 51 Regular First Appeals, arising from

the common Notification, Award, and Judgment

of the Land Acquisition Judge, were taken up

for hearing together and were disposed of by

the learned Single Judge of the High Court by

a common Judgment dated 10th August, 1999.

5. Aggrieved  by  the  judgment  of  the  learned

Single  Judge,  the  appellants  herein  filed

Letters  Patent  Appeals  (L.P.As)  before  the

Division Bench of the High Court which were

mostly dismissed in limine or on account of

technicalities.  All the appellants, however,

are  similarly  circumstanced  and  having  the

same  grievance.  This  batch  of  appeals  have

been preferred against the said judgment and

order of the Division Bench of the High Court

in the various Letters Patent Appeals.

6. Applications have been filed in SLP(C) Nos.

9488/2003,  9499/2003  and  9531/2003  for

substitution and setting aside abatement and

also  permission  to  file  Special  Leave

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Petition. As they all arise out of the said

common judgment of the High Court, they are

allowed  and  leave  is  also  granted  in  the

connected Special Leave Petitions. As all the

appeals relate to the same Notification under

Section 4 of the Land Acquisition Act, and

arise out of the same Award, they were taken

up for hearing and final disposal together.

7. Coming back to the facts of the case, it may

be  indicated  that  on  12th June,  1986,  the

State of Haryana issued a Notification under

Section 4 of the Land Acquisition Act, 1894

(hereinafter, referred to as the “LA Act”) for

the acquisition of 265 kanals and 19 Marlas of

land  in  the  revenue  estate  of  village

Ismailabad,  District  Kurukshetra  for  the

establishment  of  a  new  grain  market,

construction of rest house, staff quarters and

other  connected  purposes  of  the  Market

Committee,  Ismailabad.   Notification  under

Section 6 was thereafter issued on 9th June,

1987 and the Collector, Kurukshetra, by his

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Award  dated  14th March,  1989  awarded

compensation  for  250  kanals  and  17  marlas,

comprising the first category of land referred

to above, at the rate of Rs.60,000/- per acre.

For 15 kanals and 2 marlas of land comprising

the second category of lands, the compensation

was awarded at the rate of Rs.40,000/- per

acre.  Solatium and interest were also awarded

in terms of the provisions of the LA Act.

8. As indicated earlier, twenty seven References

were made under Section 18 of the LA Act to

the District Judge, Kurukshetra.  All the said

References  were  heard  together  and  by  his

award  dated  2nd January,  1993,  the  District

Judge, Kurukshetra enhanced the compensation

in respect of

the first category of lands to Rs.1,28,000/- per

acre and in respect of the second category of lands

to Rs.80,000/- per acre.

9. In the Regular First Appeals filed both by the

claimants and the State of Haryana, the High

Court by a common Judgment dated 10th August,

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1999,  enhanced  the  compensation  for  the

acquired lands to Rs.2,88,000/- per acre and

it was indicated that all the claimants were

entitled to uniform compensation as the lands

had  been  acquired  for  a  common  purpose.

Consequently,  the  appeals  preferred  by  the

State of Haryana were dismissed and those of

the claimants were allowed in part.

10. It may be relevant to mention at this stage

that in enhancing the compensation payable to

the claimants-appellants herein, the learned

Single Judge took one exemplar (Ex. P-6) for

the purpose of comparison vis-à-vis the land

acquired.  Ex. P-6 is a sale deed, whereby on

30th January, 1986, a plot of land measuring

148  square  yards  was  sold  for  Rs.24,000/-,

whereas the notification under Section 4 was

issued six months after on 12th   June, 1986.

On the basis of the above, the price of the

land in question works out to Rs.9,60,000/-

per acre.   The learned Single Judge, while

accepting  the  aforesaid  valuation,  directed

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deduction of 70% of the value of the lands

towards  development  charges  to  make  the

acquired  land  suitable  for  the  purpose  for

which it had been acquired and also having

regard to the nature of the lands on the date

of  publication  of  the  notification  under

Section 4 of the LA Act.  On the basis of such

deduction, the learned Single Judge uniformly

enhanced the compensation in respect of the

lands acquired to Rs.2,88,000/- per acre.  As

indicated  hereinbefore,  most of the Letters

Patent Appeals filed by the appellants were

dismissed by the Division Bench in limine or

on technical grounds.

11. These  appeals  have  been  preferred  by  the

claimants  where  Letters Patent Appeals were

disposed of by cryptic orders although they

were  aggrieved  by  the  rate  of  deduction

applied by the learned Single Judge of the

High  Court  while  disposing  of  the  Regular

First Appeals preferred by the appellants as

also the respondents.

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12. On behalf of the appellants, it was contended

that the rate of deduction as applied by the

learned Single Judge was highly excessive as

the acquired lands were situated in an area

which  was  already  developed.    It  was

submitted  that  the  acquired  lands  were

situated  at  Ambala  Pehowa  Road  in  Village

Ismailabad and were adjacent to the Village

abadi where there were houses and shelters,

power house, telephone exchange and a factory.

13.    It  was  also  submitted  that  since  the

acquired  lands  were reserved for commercial

and  residential  purposes, the claimants had

demanded  compensation  at  the  rate  of

Rs.15,000/- per marla from the Collector and

in support thereof Sale Deeds in respect of

lands adjacent to the acquired land had been

placed on record to show that the valuation of

the  said  lands  were  between  Rs.8,000/-  to

Rs.9,000/- per marla.   

14. It  was  submitted  that  this  Court  had

repeatedly  held  that  in  assessing  the

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compensation  payable  in  respect  of

agricultural  land  or undeveloped land which

had potential value for housing or commercial

purposes, normally 1/3 of the assessed value

of  the  land  is  deducted  depending  on  the

nature of the land, its location, extent of

expenditure involved for development, and the

land  required  for  roads  and  other  civic

amenities  to  make  the  land  suitable  for

residential or commercial purposes.  However,

in the instant case, despite the location of

the acquired land and its potential value, the

compensation  payable  to  the  claimants  was

reduced drastically without proper reason for

such drastic deduction.

15. In addition to the above, it was submitted

that both the learned District Judge and the

learned Single Judge of the High Court had

erred in holding that the sale deed in respect

of  a  small  plot  of  land  was  not  a  proper

indicator for the purpose of determining the

value of a large tract of land.  It was urged

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that even with regard to the said question,

this  Court  had  consistently  indicated  that

such sale deeds or such exemplars should not

be discarded in limini, but were to be taken

into consideration while fixing the value of

the lands acquired.  

16. In  support  of  the  aforesaid  submissions

reliance was placed on the decision of this

Court  in  Lucknow  Development  Authority  vs.

Krishna Gopal Lahoti and Ors. [2007 (12) Scale

685] where deduction for development charges

at  the  rate  of  1/3  of  the  amount  of

compensation  was  accepted  to  be  normal.

However, it was also indicated that there may

be various factors which were required to be

taken  into  consideration while deciding the

amount  of  deduction  to  be  made  towards

developmental charges.  While in some cases,

it could be more than 1/3, in other cases it

could be less, having regard to the difference

between a developed area or an area having

potential value which is yet to be developed.

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17. In  the  same  decision,  while  observing  that

where a large area is the subject matter of

acquisition the rate at which small plots are

sold cannot be said to be a safe criteria, it

was also    observed that it could not be laid

down as an absolute proposition that the rates

fixed for small plots could not be the basis

for  fixation  of  the  value  of  the  acquired

land.   However,  in  such  cases  necessary

deduction/adjustments  have  to be made while

determining the value and in the said context

it was held that a deduction of 1/3 of the

compensation  amount  was  considered  to  be

normal.

18. It was also sought to be urged that apart from

Exh. P.6 on which reliance had been placed by

the High Court certain other exemplars were

also produced on behalf of the claimants which

were not relied upon on the ground that they

had not been properly proved. It was submitted

that with the incorporation of Section 51-A in

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the LA Act by way of amendment the degree of

proof  had  been  altered  and  although  the

previous  legal  position  was  that  all  sale

deeds on which reliance was placed  by the

parties were required to be proved, after the

amendment such proof was not strictly required

and  the  various  foras  up  to  the  stage  of

Regular  First  Appeal  could  rely  on  such

documents, which included certified copies, as

exemplars without having to prove the same. It

was urged that having regard to the provisions

of Section 51-A of the LA Act the different

foras,  including the High Court, had erred in

not placing reliance on all sale deeds that

had been produced on behalf of the claimants

in  assessing  the  amount  of  compensation

payable in respect of the acquired land.

19. In  support  of  the  aforesaid  submission

reliance was placed on a Constitution Bench

decision of this Court in Cement Corporation

of India Ltd. vs. Purya and ors. (2004) 8 SCC

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270 and Ranvir Singh Vs. Union of India (2005)

12 SCC 59, which supported such contention.

20. Since the grievance of the appellants was only

with  regard  to  the  rate  of  deduction  on

account of the developmental charges and an

attempt was made on behalf of the appellants

to assert that 70% deduction was unwarranted

as  the  lands  sought  to  be  acquired  were

already  within  or  adjacent  to  a  developed

area, on behalf of the State-respondent such

deduction was sought to be justified.

21. It  was  submitted  on  behalf  of  the  State-

respondent that the observations made in the

Lucknow Development Authority case was more by

way of caution than laying down the general

law  which  finds  consistent  expression  in

various other decisions of this Court, such as

Union  of  India  vs.  Ram  Phool  and  another

(2003) 10 SCC 167 in which it had been held

that an isolated deed of sale showing a very

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high  price   cannot  be  the  sole  basis  for

determining the market value.

22. It  was  submitted  that  the  said  view  was

reiterated  in  the  case  of  Ranvir  Singh

(supra), which, in fact,had been relied upon

by  the  appellants  in  relation  to  the

submissions made with regard to Section 51-A

of the LA Act.

23. It was urged that this Court has consistently

held that small tracts of land purchased for a

particular purpose may fetch fancy prices in

terms  of  its  location  and  the  need  for

acquisition by the vendee, but  the same basis

could not be applied to each tract of land

which  were  yet  to  be  developed  for  public

purposes such as housing or setting apart an

area  for  a  particular  purpose  such  as

education  and/or  industrialization.  It was

submitted that in such cases there could be no

comparison  with regard to the value of the

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lands   covered  by  the  sale  deed  and  those

proposed to be acquired, and that the sale

price of such a small tract of land was not a

safe basis for determining the value of a very

large  tract  of  land  using  the  comparative

method.

24. It  was,  however,  fairly  submitted  that  in

Ravinder Narain vs. Union of India (2003) 4

SCC 481 it has been observed in paragraphs 6

and 7 as follows:

“6.  Where large area is the subject- matter of acquisition, rate at which small plots are sold cannot be said to be a safe criterion. Reference  in this  context  may  be  made  to  three decisions of this Court in Collector of Lakhimpur v. Bhuban Chandra Dutta (1972) 4 SCC 236, Prithvi Raj Taneja v. State of M.P.(1977)1 SCC 684 and Kausalya  Devi  Bogra   v.  Land Acquisition  Officer,  Aurangabad (1984) 2 SCC 324.

7. It cannot, however, be laid down as an absolute proposition that the rates  fixed  for  the  small  plots cannot be the basis for  fixation of the rate. For example, where there is no  other  material,  it  may  in appropriate  cases  be  open  to  the adjudicating court to make comparison

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of the prices paid for small plots of land.  However,  in  such  cases necessary deductions/adjustments have to  be  made  while  determining  the prices.”

25. It was also submitted that in the instant case

excluding all the other exemplars, the High

Court had chosen to rely on Ex. P.6, where a

small tract of land (148 sq. yards) had been

sold at the rate of Rs.9,60,000/- per acre and

the compensation had been worked out on such

basis after applying  deduction of 70% of the

market  value  towards  developmental  charges,

since the lands acquired were agricultural and

huge investment was required to be made by the

State  to  make  the  same  suitable  for  the

purpose  for  which  they  had  been  acquired,

namely, the setting up of a new grain market

with all the ancillary infrastructure needed

by the Market Committee, Ismailabad.  

26. It was submitted that the deduction of 70%,

which had been applied by the High Court, was

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quite reasonable as the sale deed relied upon

by the appellants related to lands sold for

shops  etc.  and  Ex.  P.6  and  other  sale

instances  had  been  relied  upon  by  the

appellants  for  smaller  areas.  It  was  urged

that in  Viluben Jhalejar Contractor (Dead) by

Lrs. Vs. State of Gujarat, (2005) 4 SCC 789,

this  Court  had  held  that  there  can  be

different  deductions  depending  upon  various

factors.  It  was  submitted  that  in  various

other  decisions  and  in  particular  in

K.S.Shivadevamma vs. Assistant Commissioner of

Land Acquisition Officer, (1996) 2 SCC 262, it

was held that although as a general rule 33-

1/2 per cent is required to be deducted for

laying of roads and other amenities, deduction

to the extent of 53% was not improper and the

extent  of  deduction  depends  upon  the

development  need  in  each  case.  In  Vasavva

(Smt) and others vs. Special Land Acquisition

Officer and others, (1996) 9 SCC 640, this

Court upheld a deduction of 65%.

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27. As an alternative argument it was urged on

behalf of the State-respondent that since the

High Court had relied only on Ex. P.6 which

related to the sale of only 4 marlas of land,

the matter could be remanded to the High Court

for  consideration  of  all  the  various  sale

deeds which were produced on behalf of the

parties, to arrive at a fresh valuation for

the acquired lands.

28. It was submitted that in view of the above the

submissions made on behalf the claimants under

Section 51-A of the LA Act was not relevant

for determination of the point raised in these

appeals.

29. Having  carefully  considered  the  submissions

made on behalf of the respective parties we

see no reason to interfere with the decision

of the High Court.

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30. The learned Single Judge of the High Court has

taken  into  consideration  the  nature  of  the

land  sought  to  be  acquired  in  relying  on

Ex.P.6 in assessing the market value thereof

and has applied a deduction of 70% in arriving

at  the  compensation  to  be  awarded  to  the

claimants in respect of the said lands. The

various other documents which were produced on

behalf of the claimants were in respect of the

lands which were similar to the lands forming

the subject matter of Ex.P.6.  The learned

Single Judge has given reasons for not relying

on all the other exemplars in choosing to rely

on Ex.P.6 alone. But the  rate of deduction

applied  appears  to  be  on  the  high  side  in

relation to the developmental work involved in

making  the  acquired  land  suitable  for  the

purposes for which they were so acquired. The

acquired  lands  are  adjacent  to  the  village

abadi   which  is  already  developed.  Having

regard to the consistent view that a deduction

of 1/3rd of the market value is normal, though

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a  higher deduction is permissible, we  are of

the view that deduction of 60% would meet the

expenditure  towards  developmental  charges

considering  the  proximity  of  the  acquired

lands to the areas already developed.

31. In our view, the Division Bench of the High

Court  while  dismissing  the  Letters  Patent

Appeal filed by the claimants could have given

proper reasons before dismissing the same in

limine.  However,  since the decision of the

Division Bench endorses that of the learned

single Judge, with which we have dealt with in

detail, and with which we agree, save for the

amount  of  deduction  applied  towards

developmental charges, these appeals against

the  decision  of  the  Division  Bench  in

dismissing the appeal filed by the appellant

in  C.A.Nos.1330-1332  of  2003,  and  all  the

other connected appeals have to be allowed in

part. As far as the alternative submissions

made on behalf of the State  regarding remand

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of  these  appeals  to  the  High  Court  is

concerned, we are not inclined to accept the

same, since we are not convinced that such a

course of action needs to be adopted.

32. The appeals are accordingly allowed in part

only to the extent  that the deduction of 70%

applied  by  the  learned  Single  Judge  and

endorsed by the High Court is reduced to 60%.

33. Having regard to the facts of the case there

will be no order as to costs.

………………………………………J. (ALTAMAS KABIR)

…………………………………………J. (MARKANDEY KATJU)

New Delhi Dated: July 8, 2008

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