12 August 2009
Supreme Court
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LAL CHAND Vs UNION OF INDIA

Case number: C.A. No.-004945-004945 / 2006
Diary number: 23453 / 2006
Advocates: RAJ SINGH RANA Vs SAHARYA & CO.


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Reportable  

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4945 OF 2006

Lal Chand  … Appellant

Vs.

Union of India & Another … Respondents

WITH

Civil Appeals of 2006

CA Nos.4946, 4947, 4948, 4949, 4950, 4951, 4952,  4953, 4954, 4955,  4956,  4957, 4958,  4959, 4960,  4961, 4962,   4963,  4964,  4965,  4966,  4967,  4968,  4969,  4970,  4971,  4972,  4973,  4974,  4976,  4977,  5134,  5135, 5136, 5351, and 5890  

Civil Appeals of 2007

CA Nos.23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39,  40, 41, 42, 465, 603, 886, 887, 888, 889, 890, 891, 1228, 1229,  1230,  1231, 1232,   1233, 1295, 1300,   1301,  1302, 1303, 1304, 1305, 1307,  1308,  1309,  1310,  1311,  1976,  1977,  1979,  1980,  1982,  1984,  2461,  2679, 2721, 2722, 2723, 3990, and 4693

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J U D G M E N T

R. V. RAVEENDRAN, J.  

This  batch  of  appeals  arise  out  a  common  judgment  dated  

27.4.2006 of the High Court of Delhi in RFA No.751/1994 (Jas Rath vs.   

Union of India) and other connected cases. They relate to determination  

of  market  value  in  regard  to  lands  situated  at  village  Rithala  on  the  

outskirts of Delhi, acquired for (i) construction of a supplementary drain;  

(ii) construction of sewage treatment plant; (iii) re-modelling of Nangloi  

drain; and (iv) planned development of Delhi. The said four acquisitions  

were initiated under notifications dated 13.2.1981, 20.2.1981 13.3.1981  

and 31.12.1981 issued under section 4(1) of the Land Acquisition Act,  

1894  (“LA  Act’  for  short).  The  extent  of  lands  acquired  and  

compensation awarded are as under:

Date of  notification  

under  Sec.4(1)

Extent  notified

Bighas-Biswas

Rate awarded per Bigha (Unit of 1008 sq. yds.)

By LAO

(In Rupees)

By  Reference  Court (In Rupees)

By  High  Court  (impugned judgment) (In Rupees)

13.2.1981 829 - 00 2600 (Block B) 3800 (Block A)

20,000 25,000

20.2.1981 883 - 08 2600 (Block B) 3800 (Block A)

20,000 25,000

13.3.1981   78 - 16 6500 10,800 25000 31.12.1981 5947 - 00 7000 (Block C) 21,000 27,000

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9000 (Block B) 10840 (Block A)

2. The  awards  of  the  reference  court  were  challenged  by  the  

landowners.  The  appeals  were  decided  by  the  Delhi  High  Court  by  

judgment dated 4.9.2001 awarding Rs.67000 per bigha in regard to lands  

covered by notifications dated 13.2.1981, 20.2.1981 and 13.3.1981 and  

Rs.73,584  per  bigha  in  regard  to  lands  covered  by  notification  dated  

31.12.1981. For arriving at the said market value, the High Court relied  

upon the allotment rates of Delhi Development Authority for plots shown  

in  its  Brochure  issued  on  9.2.1981  in  respect  of  Rohini  Residential  

Scheme  (Phase-I),  formed  by  acquiring  part  of  Rithala  village  and  

surrounding villages. The provisional rates of allotment given in the said  

brochure  were  Rs.100,  Rs.125,  Rs.150,  and  Rs.200  per  sq.  m.  

respectively for plots of the size of 26,32,48,60 and 90 sq. m. The High  

Court  took  the  average  of  those  allotment  rates  as  Rs.150 per  sq.  m.  

Having regard to the fact that the said rate was the premium for allotment  

on leasehold basis, the High Court inferred that the freehold market value  

of the said plots would be at least double, that is Rs.300 per sq. m. Taking  

note of the fact that considerable expenditure would have been involved  

for  developing  the  plots,  the  High  Court  took  the  wholesale  price  of  

freehold plots as Rs.200 per sq. m. and after deducting 60% towards the

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cost  of  development  and  area  required  for  roads  etc.,  determined  the  

market price at Rs.80 per sq. m. (or Rs.67/- per sq. yd.).  The said rate  

was awarded as compensation for the first three acquisitions. In regard to  

land acquired under the last notification (dated 31.12.1981) it provided an  

increase of 12% per annum and arrived at the market value as Rs.73 per  

sq. yd. This worked out to Rs.67,536 per bigha in regard to the first three  

acquisitions and Rs.73,584 per bigha in regard to the last acquisition.  

3. Feeling aggrieved the claimants as well as the Union of India filed  

appeals  before  this  Court.  This  court  by  a  common  judgment  dated  

7.9.2005 (reported in  Ranvir Singh v. Union of India – 2005 (12) SCC  

59) allowed the appeals, set aside the judgment of the High Court and  

remanded the matter to the High Court for determination of the market  

value afresh. This Court held :  

(a) The lease premium in respect of fully developed plots (which was  

given in the DDA brochure) could not be the basis for determining the  

freehold market value of undeveloped land, though the undeveloped land  

may  be  situated  adjacent  to  the  developed  plots.  Therefore  the  DDA  

brochure rates were not of assistance.  

(b) The sale  deeds pertaining  to  the  acquired lands or  nearby lands  

would be the most relevant pieces of evidence and the High Court ought  

not to have ignored the sale deeds exhibited by the parties on the ground  

that neither the vendors nor the purchasers relating to the said deeds were

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examined as witnesses, having regard to the decision of the Constitution  

Bench of this Court in Cement Corporation of India Ltd. V. Purya [2004  

(8) SCC 270].  

(c) The claim of the land owners that the market value of the acquired  

lands should be determined on the basis of acquisition of the year 1961  

in the same village, by increasing the award price of Rs.7,000 per bigha  

at the rate of 12% per annum for 20 years, was unacceptable.

4. After  remand,  parties  let  in  further  evidence.  The  High  Court  

examined  various  pieces  of  evidence  placed  before  it.  It  rejected  the  

entire  documentary  evidence  placed  by  both  parties,  except  two  

documents for determining the compensation. The first is a sale deed (Ex.  

PW-1/1) dated 4/11.4.1980 under which land was sold in Rithala village  

for Rs.19,000/- per bigha. The second is another sale deed (Ex. A1) dated  

9.4.1981 under which one bigha of land was sold for Rs.35,000/-. The  

average of the said two sale deeds, namely Rs.27,000/- per bigha was  

determined as the  market  value in  regard to  the  lands acquired under  

notifications dated 31.12.1981. In regard to the lands that were acquired  

under  notifications  dated  13.2.1981,  20.2.1981  and  13.3.1981,  having  

regard to the fact that the said acquisitions were about 11 to 10 months  

prior to the acquisition of 31.12.1981, it determined the market value as  

Rs.25,000/- per bigha.

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5. Not being satisfied with the amount awarded the appellants have  

filed these appeals. According to them, the compensation awarded is low  

and it ought to have been higher. They contend that the High court was  

not justified in rejecting the following documents from consideration :

(i) Ex.  X-1 (DDA brochure relating to  Rohini  Residential  Scheme)  

issued in 1981 showing an average premium of Rs.150/- per sq. m. in  

respect of DDA plots for allotment.  

(ii) The circle rates dated 21.1.1989 issued by the Land Division of  

Government of India showing a market value of Rs.400/- per square yard  

for residential plots (and Rs.800/- per sq. yd. for commercial plots).

(iii) Award  relating  to  the  acquisition  of  land  at  Rithala  under  

notification  dated  24.10.1961  at  Rs.7,000  per  Bigha  which  when  

increased at a compound rate of 12% per annum for twenty years, would  

give a market value of Rs.67,525/- per bigha in 1981.

(iv) Sale deeds marked as A-2, A-3, A-10 to A-13 all of the year 1981,  

showing a market value ranging from Rs.35000/- per bigha to Rs.68570/-  

per bigha.

The appellants contend that by taking those documents into account, the  

High  Court  ought  to  have  determined  the  market  value  as  at  least  

Rs.49000/-  per  Bigha.  The  DDA has  filed  cross-objections  in  several  

appeals  for  reducing  the  compensation  to  what  was  awarded  by  the

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reference court.  

Whether DDA brochure is relevant evidence?  

6. The DDA brochure (Ex.X1) dated 9.2.1981 is an invitation seeking  

applications from members of public for allotment of plots on lease basis  

under Rohini Residential Housing Scheme. The Brochure stated that the  

plots were in a layout formed/to be formed in Rithala and the surrounding  

villages. The brochure gives the following provisional rates for allotment  

of plots on leasehold basis :  

S.No. Plot size Category Rate (Per Sq.m.)

1. 26  sqm Economically weaker sections(EWS) Rs. 100/-

2. 32  sqm Low Income Group(LIG) Rs. 125/-

3. 48  sqm Low Income Group (LIG) Rs. 150/-

4. 60  sqm Middle Income Group (MIG) Rs. 200/-

5. 90  sqm Middle Income Group (MIG) Rs. 200/-

The appellants contend that Rs.150/- per sq. m. which is the average of  

the  said  provisional  rates,  should  be  taken  as  indicative  of  the  ruling  

market price.

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7. On careful consideration, we are of the view that such allotment  

rates of plots adopted by Development Authorities like DDA cannot form  

the basis for award of compensation for acquisition of undeveloped lands  

for  several  reasons.  Firstly market  value  has  to  be  determined  with  

reference to large tracts of undeveloped agricultural lands in a rural area,  

whereas the allotment rates of development authorities are with reference  

to  small  plots  in a  developed lay out  falling within Urbana.  Secondly   

DDA and other statutory authorities adopt different rates for plots in the  

same area with reference to the economic capacity of the buyer, making it  

difficult  to  ascertain  the  real  market  value,  whereas  market  value  

determination for acquisitions is uniform and does not depend upon the  

economic status of the land loser. Thirdly we are concerned with market  

value  of  freehold  land,  whereas  the  allotment  “rates”  in  the  DDA  

Brochure refer to the initial  premium payable on allotment of plots on  

leasehold basis. We may elaborate on these three factors.

8.  First factor: The percentage of 'deduction for development' to be  

made  to  arrive  at  the  market  value  of  large  tracts  of  undeveloped  

agricultural land (with potential for development), with reference to the  

sale price of small developed plots, varies between 20% to 75% of the  

price of such developed plots, the percentage depending upon the nature

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of development of the lay out in which the exemplar plots are situated.  

The 'deduction for development' consists of two components. The first is  

with reference to the area required to be utilised for developmental works  

and the second is the cost of the development works. For example if a  

residential layout is formed by DDA or similar statutory authority, it may  

utilise around 40% of the land area in the layout, for roads, drains, parks,  

play  grounds  and  civic  amenities  (community  facilities)  etc.  The  

Development  Authority  will  also  incur  considerable  expenditure  for  

development  of  undeveloped  land  into  a  developed  layout,  which  

includes  the  cost  of  levelling  the  land,  cost  of  providing  roads,  

underground drainage and sewage facilities, laying waterlines, electricity  

lines and developing parks and civil  amenities,  which would be about  

35% of the value of the developed plot. The two factors taken together  

would be the ‘deduction for development’ and can account for as much as  

75%  of  the  cost  of  the  developed  plot.  On  the  other  hand,  if  the  

residential  plot  is  in  an  unauthorised  private  residential  layout,  the  

percentage  of  ‘deduction  for  development’  may  be  far  less.  This  is  

because in an un-authorized lay outs, usually no land will be set apart for  

parks,  play  grounds  and community  facilities.  Even if  any land is  set  

apart,  it  is  likely  to  be  minimal.  The  roads  and  drains  will  also  be  

narrower, just adequate for movement of vehicles. The amount spent on

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development work would also be comparatively less and minimal. Thus  

the  deduction  on  account  of  the  two  factors  in  respect  of  plots  in  

unauthorised layouts, would be only about 20% plus 20% in all 40% as  

against 75% in regard to DDA plots. The ‘deduction for development’  

with references to prices of plots in authorised private residential layouts  

may  range  between  50%  to  65%  depending  upon  the  standards  and  

quality of the layout. The position with reference to industrial layouts will  

be different. As the industrial plots will be large (say of the size of one or  

two  acres  or  more  as  contrasted  with  the  size  of  residential  plots  

measuring100 sq.m. to 200 sq.m.), and as there will be very limited civic  

amenities and no playgrounds, the area to be set apart for development  

(for roads, parks, playgrounds and civic amenities) will be far less; and  

the cost to be incurred for development will also be marginally less, with  

the result the deduction to be made from the cost of a industrial plot may  

range  only  between  45%  to  55%  as  contrasted  from  65  to  75%  for  

residential plots.  If the acquired land is in a semi-developed urban area,  

and not an undeveloped rural area, then the deduction for development  

may be as much less,  that  is,  as little  as  25% to 40%, as  some basic  

infrastructure  will  already  be  available.   (Note:  The  percentages  

mentioned  above  are  tentative  standards  and  subject  to  proof  to  the  

contrary).

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9. Therefore the deduction for the 'development factor'  to be made  

with reference to the price of a small plot in a developed lay out, to arrive  

at the cost of undeveloped land, will be for more than the deduction with  

reference to the price of a small plot in an unauthorized private lay out or  

an  industrial  layout.  It  is  also  well  known  that  the  development  cost  

incurred by statutory agencies is much higher than the cost incurred by  

private developers, having regard to higher overheads and expenditure.  

Even among the layouts formed by DDA, the percentage of land utilized  

for  roads,  civic  amenities,  parks  and  play  grounds  may  vary  with  

reference to the nature of layout – whether it is residential, residential-

cum-commercial  or industrial;  and even among residential  layouts,  the  

percentage will differ having regard to the size of the plots, width of the  

roads, extent of community facilities, parks and play grounds provided.  

Some of the layouts formed by statutory Development Authorities may  

have  large  areas  earmarked  for  water/sewage  treatment  plants,  water  

tanks, electrical sub-stations etc. in addition to the usual areas earmarked  

for roads, drains, parks, playgrounds and community/civic amenities. The  

purpose of the aforesaid examples is only to show that the ‘deduction for  

development’ factor is a variable percentage and the range of percentage  

itself being very wide from 20% to 75%.

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10.  Second factor: DDA and other statutory development authorities  

adopt different rates for allotment, plots in the same layout, depending  

upon  the  economic  status  of  the  allottees,  classifying  them  as  high  

income  group,  middle  income  group,  low  income  group,  and  

economically  weaker  sections.  As  a  consequence,  in  the  same layout,  

plots may be earmarked for persons belonging to economically weaker  

section at a price/premium of Rs. 100/- sq.m, whereas the price/premium  

charged may be Rs.150/- per sq.m for members of low income group,  

Rs.200/- per sq.m for persons belonging to middle income group and Rs.  

250/- per sq. m. for persons belonging to High income groups. The ratio  

of sites in a layout reserved for HIG, MIG, LIG and EWS may also vary.  

All  these  varying  factors  reflect  in  the  rates  for  allotment.  It  will  be  

illogical to take the average of the allotment rates, as the 'market value' of  

those plots,  does not depend upon the cost incurred by DDA statutory  

authority, but upon the paying capacity of the applicants for allotment.

11. Third factor: Some development authorities allot plots on freehold  

basis, that is by way of absolute sale. Some development authorities like  

DDA allot plots on leasehold basis. Some have premium which is almost  

equal to sale price, with a nominal annual rent, whereas others have lesser

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premium, and more substantial annual rent. There are standard methods  

for determining the annual rental value with reference to the value of a  

freehold property. There are also standard methods for determining the  

value of freehold (ownership) rights with reference to the annual rental  

income in regular leases. But it is very difficult to arrive at the market  

value of a freehold property with reference to the premium for a leasehold  

plot  allotted by DDA. As the period of lease is  long, the rent  is  very  

nominal, some times there is a tendency among public to equate the lease  

premium rate (allotment price) charged by DDA, as being equal to the  

market value of the property. However, in view of the difficulties referred  

to  above,  it  is  not  safe  or  advisable  to  rely  upon  the  allotment  

rates/auction rates in regard to the plots formed by DDA in a developed  

layout,  in  determining  the  market  value  of  the  adjoining  undeveloped  

freehold lands. The DDA brochure price has therefore to be excluded as  

being not relevant.  

Whether  the circle  rates/guideline value rates can be relied upon to   determine the market value?  

12. The appellant relied upon the notification dated  21.1.1981 issued  

by the Land Division of Government of India,  Ministry of Works and

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Housing, notifying the Schedule of Market Rates of land in different parts  

of  Delhi  and  various  outlying  areas  –  showing  the  minimum  rates  

Rs.400/-  per  sq.  yard  for  residential  and  Rs.800/-  sq.  yard  for  non-

residential plots. The question is whether the same could be relied upon  

for determination of market value in regard to land acquisition. When the  

matter came up before this Court in the earlier round, the counsel for the  

appellant  had  conceded  that  such  rates  could  not  form  the  basis  for  

determining the market value of the acquired lands.  In spite of it,  the  

learned counsel for appellant submitted before us that  though the said  

circle rates cannot be the basis for determining the market value, it may  

be taken note of as one of the relevant pieces of evidence indicative of the  

market  value.  There  is  some  confusion  as  to  whether  such  basic  

rates/guideline  value/minimum registration  value  rates  could  form the  

basis for determining the market value.  

13. This  Court  in  Jawajee  Nagnatham  v.  Revenue  Divisional   

Officer  [1994  (4)  SCC 595]  and several  cases  following  it,  including  

Land Acquisition Officer, Eluru vs Jasti Rohini [1995 (1) SCC 717], U.P.  

Jal Nigam, Lucknow through its Chairman vs M/s. Kalra Properties (P)  

Ltd.  Lucknow  [1996 (3)  SCC 124] and  Krishi  Utpadan Mandi  Samiti   

Sahaswan  v. Bipin Kumar  [2004 (2) SCC 283] held that maket value

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under section 23 of LA Act cannot be fixed on the basis  of  the rates  

mentioned in the Basic Valuation Registers’ maintained for the purpose  

of detection of undervaluation and collection of proper stamp duty.  

13.1) In  Jawajee  Nagnatham,  the  land  owners  had  appealed  to  the  

Andhra  Pradesh  High  Court  against  the  order  of  Reference  Court,  

claiming increase, relying up on the market value entered in the Basic  

Valuation  Register  maintained  by  the  Revenue  Authorities  under  the  

Stamp  Act.  The  High  Court  rejected  the  claim  based  on  the  Basic  

Valuation Register, as such Register had no evidentiary value or statutory  

basis.  In  appeals  by  the  land  owners,  this  Court  held  that  the  Basic  

Valuation Register was maintained for the purpose of collecting stamp  

duty under Section 47A of the Indian Stamp Act, 1899 (as amended in  

Andhra Pradesh);  that Section 47A conferred no express power to the  

Government to determine the market value of the lands prevailing in a  

particular  area,  village,  block,  district  or  region and to maintain  Basic  

Valuation  Register  for  levy  of  stamp  duty  in  regard  to  instruments  

presented for registration; that there was no other statutory provision or  

rule  having  statutory  force  providing  for  maintaining  such  Valuation  

Register;  and therefore,  such Register  prepared and maintained for the  

purpose  of  collecting  stamp  duty  had  no  statutory  base  or  force  and

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cannot form the basis to determine the market value of any acquired land  

under Section 23 of the LA Act.  Jasti  Rohini also arose from Andhra  

Pradesh  and  followed  Jawajee  Naganatham and  held  that  the  Basic  

Valuation Register had no statutory basis.  

13.2) The case  of  U.P.  Jal  Nigam arose from Uttara  Pradesh.  In  that  

case, the land owner filed a writ petition seeking a direction to U.P. Jal  

Nigam to pay compensation in regard to lands acquired on the basis of  

market  value  assessed  by  the  Collector,  Lucknow.  The  High  Court  

allowed the petition and directed the U.P. Jal Nigam to pay compensation  

at the rate determined by the Collector, on the basis of the basic valuation  

circulars  issued  for  purposes  of  stamp  duty.  This  Court  reversed  the  

decision  of  the  High  Court  following  its  earlier  decision  in  Jawajee  

Naganatham and  held  that  the  Collector  committed  an  error  in  

determining  the  market  value  on  the  basis  of  Basic  Value  Circulars.  

Jawajee  Naganatham was  again  followed  in  Bipin  Kumar,  which  is  

another case from Uttar Pradesh.

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13.3) All  the  four  decisions  rejected  the  value  entered  in  the  Basic  

Valuation Registers, on the ground that they had no statutory basis having  

regard to the provisions of stamp law applicable in the respective States  

(Andhra  Pradesh  and  Uttar  Pradesh)  and  cannot  be  the  basis  for  

determination of market value under Section 23 of LA Act.  

14. There are also another set of decisions considering such circle rates  

could be considered as prima facie basis, for purposes of ascertaining the  

market value and determining whether there was any undervaluation of  

the instrument for purposes of stamp duty, which is a revenue collection  

exercise.  We may  refer  to  one  of  those  cases,  that  is  Ramesh Chand  

Bansal v. District Magistrate/Collector, Ghaziabad  [1999 (5) SCC 62],  

wherein this Court held :

“Reading S. 47-A with the aforesaid R. 340-A it is clear that the  circle  rate  fixed by the Collector  is  not  final  but  is  only a prima facie  determination of rate of an area concerned only to give guidance to the  Registering  Authority  to  test  prima  facie  whether  the  instrument  has  properly described the value of the property.  The circle  rate  under this  Rule is neither final for the authority nor to one subjeted to pay the stamp  duty. So far sub-sections (1) and (2) it is very limited in its application as it  only  directs  the  Registering  Authority  to  refer  to  the  Collector  for  determination  in case property is  under-valued in such instrument.  The  circle rate does not take away the right of such person to show that the  property in question is correctly valued as he gets an opportunity in case of  under-valuation to prove it before the Collector after reference is made.”    

15. In  R.  Sai  Bharathi  v.  J.  Jayalalitha   [2004  (2)  SCC  9],  while

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examining the issue in the context of a case relating to disproportionate  

assets,  this Court held :

“The guideline value is a rate fixed by authorities under the Stamp Act  for  purposes  of  determining  the  true  market  value  of  the  property  disclosed in an instrument requiring payment  of stamp duty.  Thus the  guideline value fixed is not final but only a prima facie rate prevailing in  an  area.  It  is  open  to  the  registering  authority  as  well  as  the  person  seeking registration to prove the actual  market  value of property.  The  authorities cannot regard the guideline valuation as the last word on the  subject of market value. x x x x This scheme of the enactment and the  Rules  contemplate  that  guideline value will  only afford a  prima facie  basis to ascertain the true or correct market value. Undue emphasis on the  guideline  value  without  reference  to  the  setting  in  which  it  is  to  be  viewed will obscure the issue for consideration. It is clear, therefore, that  guideline value is not sacrosant as urged on behalf of the appellants, but  only a factor to be taken note of, if at all available in respect of an area in  which the property transferred lies.”

16. It should however be noted that as contrasted from the assessment  

of market  value contained in non-statutory Basic Value Registers,  the  

position  may  be  different,  where  the  guideline  market  values  are  

determined  by  Expert  Committees  constituted  under  the  State  Stamp  

Law, by following the detailed procedure laid down under the relevant  

rules, and are published in the State Gazette. Such state stamp Acts and  

the Rules thereunder, provide for scientific and methodical assessment of  

market  value in different  areas  by Expert  Committees.  These statutes  

provide that such committees will be constituted with officers from the  

Department  of  Revenue,  Public  Works,  Survey  &  Settlement,  Local  

Authority and an expert in the field of valuation of properties, with the

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sub-registrar  of  the  sub-registration  district  as  the  member  secretary.  

They also provide for different  methods  of  valuation for lands,  plots,  

houses and other  buildings.  They require determination of the market  

value of agricultural lands by classifying them with reference to soil, rate  

of revenue assessment, value of lands in the vicinity and locality, nature  

of crop yield for specified number of years, and situation (with reference  

to roads, markets etc.). The rates assessed by the committee are  required  

to  be  published  inviting  objections/suggestions  from the  members  of  

public. After considering such objections/suggestions, the final rates are  

published in the Gazette. Such published rates are revised and updated  

periodically. When the guideline market values, that is, minimum rates  

for registration of properties, are so evaluated and determined by expert  

committees as per statutory procedure, there is no reason why such rates  

should not be a relevant piece of evidence for determination of market  

value. One of the recognised methods for determination of market value  

is with reference to opinion of experts. The estimation of market value  

by such statutorily constituted expert committees, as expert evidence can  

therefore  form  the  basis  for  determining  the  market  value  in  land  

acquisition cases,  as a relevant  piece of  evidence.  It  will  be however  

open to either party to place evidence to dislodge the presumption that  

may flow from such guideline market value. We however hasten to add

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that the guideline market value can be a relevant piece of evidence only  

if  they  are  assessed  by  statutorily  appointed  Expert  Committees,  in  

accordance with the prescribed assessment procedure (either street-wise,  

or road-wise, or area-wise, or village-wise) and finalised after inviting  

objections  and published in  the  Gazette.  Be that  as  it  may.  We have  

referred to this aspect only to show that there are different categories of  

Basic  Valuation  Registers  in  different  states  and  what  is  stated  with  

reference to the stamp law in Andhra Pradesh or Uttar Pradesh, may not  

apply  with  reference  to  other  states  where  state  stamp  laws  have  

prescribed the procedure for determination of market value, referred to  

above.   

17. In this case, there is nothing to show the circle rates have been  

determined by any statutorily appointed committee by adopting scientific  

basis. Hence, the principle in Jawajee Naganatham will apply and they  

will not be of any assistance for determining the market value.  Further,  

they do not purport to be the market value for lands in rural areas on the  

outskirts of Delhi, nor the market values relating to Rithala village. The  

circle rates relate to urban/city areas in Delhi and are wholly irrelevant.   

Whether the award relating to acquisition on 24.10.1961 is relevant.

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18. The appellants contend that some lands in Rithala were acquired  

under  section  4(1)  notification  dated  24.10.1961  for  the  planned  

development  of  Delhi  and  compensation  was  awarded  at  the  rate  of  

Rs.7000 per bigha. Their contention is that as the present acquisition is in  

the  year  1981,  the  market  value  of  the  acquired  land  should  be  

determined with reference to the market value determined for the 1961  

acquisition  by  providing  an  appropriate  increase  at  the  cumulative/  

compounded rate of 12% per annum.

19. This  Court  had  occasion  to  examine this  issue recently.  In  The  

General Manager, Oil & Natural Gas Corporation Ltd. v. Rameshbhai  

Jivanbhai Patel [2008 (11) SCALE 637], this court held :

“Normally, recourse is taken to the mode of determining the market  value  by  providing  appropriate  escalation  over  the  proved  market  value  of  nearby  lands  in  previous  years  (as  evidenced  by  sale  transactions  or  acquisition),  where  there  is  no  evidence  of  any  contemporaneous  sale  transactions  or  acquisitions  of  comparable  lands in the neighbourhood. The said method is reasonably safe where  the  relied-on-sale  transactions/acquisitions  precedes  the  subject  acquisition by only a few years, that is upto four to five years. Beyond  that it may be unsafe, even if it relates to  a neighbouring land. What   may be a reliable standard if the gap is only a few years, may become  unsafe and unreliable standard where the gap is larger. For example,  for determining the market value of a land acquired in 1992, adopting  the annual increase method with reference to a sale or acquisition in  1970 or 1980 may have many pitfalls. This is because, over the course  of years, the 'rate' of annual increase may itself undergo drastic change  apart  from  the  likelihood  of  occurrence  of  varying  periods  of  stagnation  in  prices  or  sudden  spurts  in  prices  affecting  the  very  standard of increase.”   

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(emphasis supplied)

Even if the relied upon transaction is only two to three years prior to the  

acquisition, court should, before adopting a standard escalation, satisfy  

that there were no adverse circumstances. For example, if the acquisition  

is of this year 2009, it may not be possible to determine the market value,  

based on the 2007 or 2008 prices, by providing an increase of 12% or  

15%  per  year,  as  the  newspaper  reports  disclose  that  the  price  of  

immovable properties in most areas of the country came down by more  

than 40% to 50% from the 2007 rates.  Caution is  therefore  necessary  

before increasing the price with reference to the old transactions. Be that  

as it may. It is clear that the award made in regard to a 1961 acquisition  

will  not  be  of  any  use  for  determining  the  market  value  for  a  1981  

acquisition.

Whether the High Court was justified in rejecting the sale deeds (Ex.A- 2 to A-3 and A-10 to A-13 and Ex.R3 to R7) from consideration?

20. The  appellants  have  relied  upon  A-2,  A-3  and  A-10  to  A-13  

relating  to  sale  of  land in  Rithala  village,  the  details  of  which are  as  

under:  

S.No. Ex. No. Date of  execution

Sale  consideration

Extent sold Rate per bigha

1. A-1 09.4.1981 35000 1 bigha 35000 2. A-2 15.9.1981 35000 1 bigha 35000

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3. A-13 15.9.1981 35000 1 bigha 35000 4. A-3 27.7.1981 49000 1 bigha 49000 5. A-10 03.11.1981 24000 7 biswas 68571 6. A-11 03.11.1981 24000 7 biswas 68571 7. A-12 01.12.1981 49000 1 bigha 49000

21. On  the  other  hand,  the  respondents  relied  upon  Ex.R3  to  R7  

relating to sale  of land in  Rithala  Village,the details  of which are as  

under:

S No.

Ex.  No.

Extent of land  Bigha-Biswas

Date of  Execution

Sale  consideration

Rate per  Bigha

1. R5 1 - 3 09.2.1981 Rs.10,800/- Rs.9,391/-

2. R7 1 - 3 09.2.1981 Rs.10,800/- Rs.9391/-

3. R4 3 - 12 05.6.1981 Rs.32,500/- Rs.9028/-

4. R6 3 – 3 17.7.1981 Rs.34,000/- Rs.10,793/-

5. R3 4 - 12 28.11.1981 Rs.46,000/- Rs.10000/-

22. The High Court, as noticed above, determined the market value as  

Rs.27000/-  per  bigha by taking the average of the prices disclosed by  

Ex.A1 dated  9.4.1981  (Rs.35000/-)  and Ex.  PW1/1  dated  4/11.4.1980  

(Rs.19000/-). It rejected Ex. A2, A3 and A10 to A13 on the ground  that  

they  were  post-notification  sales  with  reference  to  acquisitions  dated  

13.2.1981, 20.2.1981 and 13.3.1981. Then it examined whether the said  

sale deeds were of any relevance to determine the market value in regard

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to the acquisition under notification dated 13.12.1981. It was of the view  

that Ex. A10 to A12 related to small bits of land and therefore were not of  

any assistance.  It referred to the fact that the sales on 3.11.1981 (Ex. A10  

and A11) were at a price of Rs.68571 per bigha and sales on 27.7.1981  

and 1.12.1981 (Ex.A3 and A12) were at a price of Rs.49,000/-, whereas  

the  market  price  on 9.4.1981 (Ex.  A1)  was  only  Rs.35000 per  bigha,  

thereby showing a steep increase in seven months. The High Court was of  

the view that the increase of nearly 95% in a period of 7 months or even  

a  40% increase  in  four/eight  months  demonstrated that  they  were  not  

bonafide transactions and therefore,  they should be ignored.  The High  

Court did not consider the possibility that the steep increase may be a  

genuine increase on account of the rapid urbanisation of the area, or on  

account  of  the  acquisitions  in  February  and  March,  1981  and/or  on  

account of the locational advantage (such as nearness to road or nearness  

to developed area).    

23. The  High  Court  also  rejected  Ex.R3  to  R7  relied  upon  by  the  

respondents, solely on the ground that the prices therein were lower than  

the market  value offered by Land Acquisition Collector and therefore,  

they  had to  be  excluded under  section  25  of  the  LA Act.  Section 25  

provides that the amount of compensation awarded by a reference court

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shall  not  be  less  than  the  amount  awarded  by  the  Collector  under  

section  11.  We fail  to  see  how the  said  section  has  any relevance  in  

regard  to  determination  of  market  value as  contrasted  from award  of  

compensation. If the sale deeds relied on by the respondents showed a  

particular  market  value,  they  cannot  be  ignored  merely  because  the  

Collector  had awarded compensation  at  a  higher  rate  in  regard to  the  

acquired land. All that section 25 requires is that courts should not award  

an amount which is less than what is awarded by the Land Acquisition  

Collector, even if the evidence may show a lesser market value. So, the  

bar under section 25 of the LA Act is not in regard to determination of a  

market value, which is less than what was awarded by the LAO. The bar  

is  only  upon  the  reference  court  (or  any  higher  court)  reducing  the  

compensation awarded by the Land Acquisition Collector. The fact that  

the Land Acquisition Collector has awarded compensation at a particular  

rate  does  not  mean  that  the  sale  deeds  which  are  otherwise  reliable,  

cannot be relied upon to find out what was the real market value. Further  

the very assumption that all awards made by the Collector were at a rate  

higher than what was disclosed by the sale deeds (Ex.R3 to R7) is also  

not correct. The Land Acquisition Collector awarded a sum of Rs.2600 to  

Rs.3800  per  bigha  in  regard  to  acquisitions  under  notifications  dated  

13.2.1981  and  20.2.1981,  Rs.6500  in  regard  to  acquisition  under

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notification dated 13.3.1981. These amounts were certainly lower than  

the market value shown by Ex.R3 to R7. Even in regard to the acquisition  

under  notification  dated  13.12.1981,  the  award  by  the  Collector  at  

Rs.7,000/- and Rs.9000/- were lower than the value disclosed by Ex.R3 to  

R7. As noticed above, these sale deeds show that the market value was  

around Rs. 9000 per bigha in February to June 1981 and 10,000 to 11,000  

per  bigha  between  July,  1981  and  November,  1981.  The  Land  

Acquisition Officer awarded Rs. 10,840 (which is more than the price  

shown by Ex.R3 to R7) in regard to only some lands acquired under the  

December, 1981 acquisition. Be that as it may. As the sale deeds (Ex.R3  

to R7) relate to sales of lands in Rithala Village, they cannot be excluded  

from consideration merely on the ground that what has been awarded by  

the  Land  Acquisition  Collector  was  higher  in  regard  to  some  of  the  

acquired lands. We accordingly find that the ground on which the High  

Court excluded the sale deeds Ex.R3 to R7 is not sound. The question  

whether  these  deeds  (Ex.R3 to  R7)  should  be  excluded  on any  other  

relevant ground will be considered later.  

24. We are therefore of the considered view that the reasons assigned  

by the High Court for rejecting Ex. A2,3, A10 to A13 and Ex R3 to R7  

are not sound. All the sale deeds related to Rithala village and were of the

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year  of  acquisition,  namely  1981.  They  were  prior  to  the  acquisition  

under  notification  dated  31.12.1981,  which  is  the  largest  of  the  four  

acquisitions.  The difficulty arises because of the marked difference in  

value, disclosed by the sale deeds exhibited by the respondents (Ex.R3 to  

R7) and the sale deeds exhibited by the appellants (Ex.A1 to A3 and A10  

to  A13).  The sale  deeds  produced by the  respondents  (Ex.  R3 to  R7)  

which are of the period between 9.2.1981 to 28.11.1981 disclose a value  

of Rs.9028 to Rs.10791 per bigha, that is an average of Rs.10000 per  

bigha. On the other hand the sale deeds, produced by the appellant (Ex.  

A1 to A3 and A10 to A13) which are the period 9.4.1981 to 1.12.1981  

show market values of Rs.35000/-, Rs.49000/- and Rs.68371/- per bigha,  

the average being Rs.50790/- per bigha. The variation between the sale  

deeds relied upon by the respondents and appellants is as much as 400%.  

The  question  then  is  which  set  of  sale  deeds  should  be  accepted,  for  

determination of the market value of the acquired lands.   

25. The appellants contend that the sale transactions as per Ex.R3 to  

R7  relied  upon  by  the  respondents,  showing  an  average  value  of  

Rs.10000 per bigha, should be excluded from consideration as they do  

not reflect the true market value and as they were obviously undervalued  

transactions where only a part of sale price was shown in the document,

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the balance having been suppressed either to evade capital gains tax and  

stamp duty, or to invest black money. Alternatively, it is submitted that  

they may be distress sales. On the other hand the respondents submitted  

that the sale deeds exhibited by them represent the true market value as  

they showed a consistent price range whereas the sale deeds exhibited by  

the appellants (Ex. A1 to A3 and A10 to A13) showed prices with a large  

variation  demonstrating  that  they  were  got  up  to  show  artificially  

increased value and that it should be inferred that they were created only  

for  the  purpose  of  providing proof  in  support  of  the  claim for  higher  

compensation.  It  is  submitted  that  they  do  not  represent  bona  fide  

transactions. It is pointed out that the residents of the locality knew in the  

year 1980 itself, or at least by February, 1981 that there will be further  

acquisition of lands in Rithala village for development of existing Rohini  

Scheme  and  related  purposes  and  therefore,  these  documents  were  

brought into existence to create evidence of a higher than real  market  

price.  It  is  submitted  that  there  is  no  explanation  regarding  the  large  

variance in the price disclosed by Ex.A1 to A3 and A10 to A13. This  

necessitates consideration of effect of section 51A of the LA Act and the  

relevance of undervalued documents.

What is the effect of section 51A of LA Act?

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26. Before the amendment to the LA Act, introducing section 51A, it  

was necessary to examine either the vendor or a vendee to exhibit a sale  

deed and prove its contents. If the vendor or vendee was so examined, it  

was  possible  to  cross-examine  them  so  as  to  ascertain  whether  the  

transaction  reflected  by  the  exhibited  instrument  was  a  genuine  

transaction or a transaction showing a depressed value or a boosted value.  

But with the insertion of section 51A, certified copies of registered sale  

deeds could be tendered as evidence without examining the vendor or  

vendee thereof and the court is enabled to accept them as evidence of the  

transaction recorded therein. The scope of section 51A was explained by  

a Constitution Bench of this  Court in  Cement Corporation of India v.   

Purya [2004 (8) SCC 270] thus :  

“But when the statute enables a court to accept a sale deed on  the records evidencing a transaction, nothing further is required to be  done.  ……… Even  the  vendor  or  vendee  thereof  is  not  required  to  examine themselves  for proving the contents  thereof.  This,  however,   would not mean that the contents of the transaction as evidenced by the   registered sale deed would automatically be accepted. The legislature  has advisedly used the word ‘may’.  A discretion, therefore, has been  conferred upon a court to be exercised judicially, i.e. upon taking into  consideration the relevant factors.

The submission of Mr. G. Chandrasekhar to the effect that the contents  of a sale deed should be a conclusive proof as regard the transaction  contained therein or the court must raise a mandatory presumption in  relation thereto in terms of Section 51 of the Act cannot be accepted as  the  Court  may  or  may  not  receive a  certified  copy  of  sale  deed  in  evidence.  It  is  discretionary  in  nature.  Only  because  a  document  is  admissible  in  evidence,  as  would  appear  from the  discussions  made  hereinbefore,  the  same  by  itself  would  not  mean  that  the  contents  thereof stand proved.  Secondly, having regard to the other materials  

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brought on record, the court may not accept the evidence contained in  a deed of sale. When materials are brought on record by the parties to  the  lis,  the  court  is  entitled  to  appreciate  the  evidence  brought  on  records  for  determining  the  issues  raised  before  it  and  in  the  said  process, may accept one piece of evidence and reject the other.”

[emphasis supplied]

The following view expressed earlier  in  Land Acquisition Officer  and  

Mandal  Revenue  Officer  vs.  Narasaiah [2001  (3)  SCC  530],  was  

approved in Cement Corporation of India (supra) and is extracted below :  

"The words "may be accepted as evidence" in the Section indicate that  there  is  no  compulsion  on  the  court  to  accept  such  transaction  as  evidence, but it is open to the court to treat them as evidence. Merely  accepting them as evidence does not mean that the court is bound to  treat them as reliable evidence. What is sought to be achieved is that the  transactions recorded in the documents may be treated as evidence, just  like any other evidence, and it is for the court to weigh all the pros and  cons  to  decide  whether  such  transaction  can  be  relied  on  for  understanding the real price of the land concerned".

Therefore, courts may accept and act upon certified copies of sale deeds  

exhibited  without  examining  the  vendor  or  vendee.  They  may not  be  

relied upon if  there is  other acceptable  evidence which throw a doubt  

about the correctness of the sale price shown therein.  

27. The evidence to reject an exemplar sale deed as not relevant, may  

be either extrinsic or intrinsic. The statement of a witness describing the  

advantageous or disadvantageous features of the land which is the subject  

matter of such document will be extrinsic evidence. An absurdly low or

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high freakish value when compared to the prevailing price disclosed by  

other contemporaneous transactions may also be an extrinsic evidence.  

Where the sale deed recites the financial difficulties of the vendor and the  

urgent need to find money as reasons for the sale, that will be an intrinsic  

evidence of a distress sale. Therefore, though a certified copy of a sale  

deed may be received in evidence and exhibited even without examining  

the vendor and vendee, and accepted as proof of the transaction to which  

it  relates,  the courts  have the discretion to rely  upon it  or  reject  it  as  

unreliable or unacceptable for reasons to be recorded.  

28. But a word of caution. What Narsaiah and Cement Corporation of   

India clarified was that a certified copy of a sale deed could be marked as  

an exhibit and its contents may be relied upon as evidence of the sale  

transaction, even without examining either the vendor or the vendee, in  

view  of  the  enabling  provision  in  Section  51  of  the  LA  Act.  If  the  

acquisition is in regard to a large area of agricultural lands in a village,  

and the exemplar sale deed is also in respect of an agricultural land in the  

same village, it may be possible to rely upon the sale deed as prima facie  

evidence of the prevailing market value, even if such land is at the other  

end of the village at a distance of one or two kilometres. But the same

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may not be the position where the acquisition relates to plots in a town or  

city where every locality or road has a different value. For example in a  

place like Delhi there are some areas where the plot value is many times  

more  than  the  value  of  plots  in  a  neighbouring  middle  class  locality  

which  in  turn  may  be  many  time  more  than  the  value  of  plot  in  a  

neighbouring slum area. Or the price of a property on a main road may be  

many times more than the price of a property on a parallel smaller road,  

though the two properties may be situated back to back. It cannot be said  

that merely because two properties adjoin each other or touch each other  

the value applicable to the property facing a main road, should be applied  

to  the  property  to  its  rear  facing  a  service  road.  Therefore,  while  a  

distance of about a kilometre may not make a difference for purposes of  

market value in a rural village, even a distance of 50 metre may make a  

huge difference in market value in urban properties.  

29. There  would  be  lesser  likelihood  of  rejection  of  a  sale  deed  

exhibited to prove the market  value, if  some witness speaks about the  

property  which  is  the  subject  matter  of  the  exemplar  sale  deed  and  

explains  its  situation,  potential,  as  also  about  the  similarities   or  

dissimilarities  with  the  acquired  land.  The  distance  between  the  two

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properties,  the  nature  and  situation  of  the  property,  proximity  to  the  

village  or  a  road  and  several  other  factors  may  all  be  relevant  in  

determining the market value. Mere production of some exemplar deeds  

without ‘connecting’ the subject matter of the instrument, to the acquired  

lands  will  be  of  little  assistance  in  determining  the  market  value.  

Section 51A of the LA Act only exempts the production of the original  

sale deed and examination of the vendor or vendee.  

What is the utility or relevance of under-valued sale deeds in determing  market price?  

30. This takes us to the value of “undervalued” sale deeds. When the  

respondents rely upon certain sale deeds to justify the value determined  

by the Land Acquisition Collector or to show that the market value was  

less than what is claimed by the claimants, and if the claimants produce  

satisfactory  evidence  (which  may  be  either  with  reference  to  

contemporaneous sale deeds or awards made in respect of acquisition of  

comparable land or by other acceptable evidence) to show that the market  

value  was much higher,  the  sale  deed relied  upon by the  respondents  

showing a lesser value may be inferred to be undervalued, or not showing  

the true value.  Such deeds have to be excluded from consideration as  

being unreliable evidence. A document which is found to be undervalued

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cannot be used as evidence.  

31. But we have noticed a disturbing trend in some recent cases, where  

a court accepts the sale deed exhibited by the claimants as the basis for  

ascertaining the market value. But then, it also accepts a contention of the  

claimants that the general tendency of members of public is not to show  

the  real  value,  but  show  a  lesser  value  to  avoid  tax/stamp  duty  and  

therefore  the  sale  deeds  produced  and  relied  on  by  them,  should  be  

assumed to be under valued. On such assumption, some courts have been  

adding some fancied percentage to the value shown by the sale deeds to  

arrive at what they consider to be ‘realistic market value’. The addition so  

made may vary from 10% to 100% depending upon the whims, fancies,  

and the perception of the learned Judge as to what is the general extent of  

suppression of the price in sale deeds. Such increase, in the market value  

disclosed by the sale deeds, on the assumption that all sale deeds show a  

‘depressed’ market value instead of the real value, is impermissible. The  

Court can either accept the document as showing the prevailing market  

value, in which event it has to be acted upon. Or the Court may find a  

document to be undervalued in which it should be rejected straightaway  

as not reliable. There is no third way of accepting a document, by adding  

to the market value disclosed by the document, some percentage to off-

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set the under-valuation. There is no legal basis to proceed on a general  

assumption  that  parties,  without  exception,  fail  to  reflect  the  true  

consideration in the sale  deeds,  that  there is  always undervaluation or  

suppression of the true price and that consequently, all sale deeds reflect a  

depressed  value  and  not  the  real  market  value  and  therefore,  some  

percentage should be added to arrive at the real value. Such a course also  

amounts  to  branding  all  vendors  and  purchasers  as  dishonest  persons  

without any evidence and without hearing them. It ignores the fact that  

government  has  fixed  minimum  guideline  values  and  whenever  a  

registering  authority  is  of  the  view  that  a  sale  deed  is  undervalued,  

proceedings are initiated for determination of the true market value. It  

also ignores the fact that a large number of sale deeds are accepted by the  

registering authorities as disclosing the current market value. Be that as it  

may.  

Whether valuation by the High Court is proper?      

32. The existence of several other sale deeds showing a much higher  

value and the fact that the Land Acquisition Collector chose to award a  

higher rate in regard to some of the acquired lands, leads to an inevitable  

inference that Ex.R3 to R7 were either undervalued or were distress sales.  

Whatever  be  the  reason,  they  are  liable  to  be  excluded  from

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consideration.  

33. The sale transactions under Ex. A1 to A3 and A10 to A13 relate to  

plots  used  for  residential  or  other  non-agricultural  purposes.  Though  

these  sale  deeds  describe  the  lands  sold  as  agricultural  lands,  having  

regard to the prevailing land reforms laws, the size of the plots show that  

they were not used for agricultural purposes. For example, two of the sale  

deeds - Exs. A10 and A11, relate to  7 biswas of  land each (about 350 sq.  

yds.  each)  and  the  purchaser  is  a  business  firm  (M/s.  Sant  &  Co.).  

Obviously,  the land was not  sold for agricultural  purpose,  as  it  is  not  

possible to imagine plots measuring only 350 sq. yards being sold for  

agricultural purposes. Significantly, the other sale deeds, each of which  

relate to an area of one bigha and show a price of Rs.35000/- per bigha  

(three deeds) and Rs.49000/- per bigha (two deeds). It is evident the plots  

which were the subject matter of these sale deeds were sold as semi-urban  

land  for  residential  or  other  non-residential  purposes.  There  is  no  

evidence or material to show that they were nominal or sham documents  

intended to create evidence of a higher market value. The variation in  

price  between  Rs.35000  to  Rs.68571  may  possibly  be  on  account  of  

several  factors.  It  is  possible that some plots were nearer while others  

were  far  away  from roads  or  developed  areas.  In  the  absence  of  the

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evidence  of  vendors/vendees  of  these  documents,  we  propose  to  take  

average  of  these  transactions,  which  is  approximately  Rs.50,790/-  per  

bigha,  as  the  market  value  of  small  plots  sold  for  residential  or  non-

agricultural purposes.  

34. But when the market value of such small plots intended for non-

agricultural purposes is made the basis for determining the market value  

of large tracts of agricultural lands, it is necessary to make an appropriate  

deduction  towards  ‘development’  factor.  The  evidence  shows that  the  

acquired lands were at the relevant time (1981) in a rural  area on the  

outskirts of Delhi, with access to roads and services nearby. In fact the  

Municipal  Corporation  of  Delhi,  within  a  few  months  after  the  

acquisition, issued a notification dated 23/4/1982, under section 507(a) of  

Delhi  Municipal  Corporation  Act,  1957  declaring  that  Rithala  in  the  

northern zone of Delhi shall cease to be a rural area. The appellants have  

also let in evidence to show that the acquired lands were situated in an  

area having a potential for development for residential use. The policy  

resolution dated 27.12.1980 of Delhi Development Authority in regard to  

development of Zones H7 and H8 (Rohini Scheme) in North-West Delh  

shows that  the area was earmarked for fast  urban development.  Some  

facilities like roads, water, electricity had reached the area in a limited  

manner.  Therefore,  the  appropriate  deduction  towards  development,

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needs to be only 40% instead of the higher standard percentage of 60% to  

70%.   

35. On deduction of 40% from Rs.50790/- per bigha which the market  

value  of  small  plots,  the  market  value  for  the  large  tracts  of  lands  

acquired  in  December,  1981  would  be  Rs.30,474/-  (rounded  off  to  

Rs.30500/-) per bigha. As the earlier three acquisitions were of the same  

year, but were in February and March (that is on 13.2.1981, 20.2.1981  

and  13.3.1981)  which  are  about  10  to  11  months  earlier,  the  

compensation in regard to the three earlier acquisitions is determined as  

Rs.28000/- per bigha. To this extent, the award of the High Court requires  

to be modified.  

36. The  learned  counsel  for  DDA  contended  that  market  value  

determined by the High Court required to be reduced with reference to  

the market value of the acquired lands in the neighbouring village. He  

relied upon the decision of this Court in Union of India vs. Ram Phool –  

2003 (10) SCC 167, which related to acquisition of 5484 bighas of land  

in  revenue  village  Poothkalan  on  the  outskirts  of  Delhi,  in  regard  to  

which  the  preliminary  notification  was  issued  on  11.12.1981.  The  

reference  court  had,  after  referring  to  several  sale  transactions,  

determined the market value as Rs.15,700/- per bigha in one case and

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Rs.18,500/- per bigha in another case. On appeal by the claimants, the  

High  Court  excluded  several  sale  transactions  relied  upon  by  the  

reference court as not inspiring confidence, and on the basis of a solitary  

transaction  dated  10.9.1981  in  regard  to  a  small  area  of  one  bigha,  

increased the market value to Rs.30,000/- per bigha. This Court held that  

the High Court erred in relying upon a single sale deed relating to a small  

extent of one bigha to determine the market value of a large extent of  

5484 bighas. It further held that if that sale deed was excluded, there was  

no other evidence to support the increase in compensation made by the  

High Court. Consequently, this Court set aside the increase awarded by  

the High Court and restored the market value determined by the reference  

court.  The learned counsel for DDA submitted that a rate in that range  

(Rs.15700 to Rs.18500 per bigha)  should therefore be adopted for the  

Rithala lands also. But that decision relating to Poothkalan is not of any  

assistance  with  reference  to  the  Rithala  acquisitions  for  the  following  

reasons:  

(i) It is now well settled that sale transactions or awards relating to  

neighbouring village will not be relied on when acceptable evidence by  

way  of  contemporaneous  sale  transactions  or  awards  are  available  in  

regard to the very village where the acquisition took place. (Where there  

are no contemporaneous sale deeds or awards relating to the same village,  

then the sale transactions or awards of the same period relating to the

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neighbouring  village  can be  considered  provided  there  is  evidence  to  

show that the acquired lands and the lands covered by the exemplar deeds  

of the neighbouring village are similarly situated).  

(ii) The  decision  in  Ram  Phool itself  lays  down  as  follows:  

‘Contemporaneous award no doubt is a useful guide for every court to  

determine the market value but that award must be taken into evidence in  

accordance  with  law  by  giving  an  opportunity  to  the  other  side  for  

rebutting the same and that has not been done in the case on hand.’ In this  

case while the learned counsel for respondents contended that the lands at  

Rithala  and  Poothkalan  were  similar,  the  learned  counsel  for  the  

appellants  submitted that  the  acquired  lands  in  Rithala  were  far  more  

valuable than the lands in Poothkalan and that Rithala was nearer to the  

city when compared to Poothkalan.  Neither  stand is  supported by any  

evidence or material on record. In the absence of any evidence, we cannot  

assume that acquired lands in Rithala and lands acquired in Poothkalan  

were similarly situated.  

(iii) In Ram Phool, this Court set aside the decision of the High Court  

and restored the  award of  reference  court,  not  because  it  came to  the  

conclusion  that  the  market  value  was  only  Rs.15,700/-/Rs.18,500/-  as  

decided by the reference court, but because the only piece of evidence  

that  was  relied  on  by  the  High  Court  to  fix  the  market  value  of  

Rs.30,000/-  was  found  to  be  not  reliable  and  no  other  evidence  was  

available.  Therefore,  decision  of  this  Court  in  Ram Phool was  not  a  

positive  determination  of  market  value  of  Poothkalan  lands,  but  the  

rejection of a determination of a higher value by High Court for want of  

acceptable evidence.

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Conclusion :

37. We accordingly increase the compensation, in regard to acquisition  

dated  31.12.1981  from Rs.27000/-  to  Rs.30,500/-  per  bigha.  We  also  

increase the compensation in regard to the acquisition dated 13.2.1981,  

20.2.1981 and 13.3.1981 from Rs.25,000/- to Rs.28,000/- per bigha. The  

statutory benefits and interest awarded are not disturbed.  

38. The  appeals  by  the  claimants  are  partly  allowed  increasing  the  

compensation  as  per  para  37  above.  As  a  consequence,  the  cross  

objections by DDA seeking reduction of the compensation are rejected  

without  going  into  the  question  whether  such  cross  objections  are  

maintainable. Parties to bear their respective costs.                

......................................J. (R V Raveendran)

New Delhi; ....................................J. August 12, 2009. (B. Sudershan Reddy)

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Not Reportable IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1853 OF 2007

Karam Singh (dead) Through LRs & Ors. … Appellants

Vs.

Union of India & Anr. … Respondents

WITH

Civil Appeal Nos.1981 of 2007, 4118 to 4124 of 2008, 4283 of 2008,  5429 of 2008 and 551 of 2009  

AND CA No. 5792 of 2009  (@ SLP(C)No.1684/2007) CA No. 5361 of 2009  (@ SLP(C) No.6560/2007) CA No. 5362 of 2009  (@ SLP(C) No.6563/2007) CA No. 5363 of 2009  (@ SLP(C) No.8259/2007) CA No. 5364 of 2009  (@ SLP(C) No.12121/2007)  CA No. 5365 of 2009  (@ SLP(C) No.12746/2007) CA No. 5366 of 2009  (@ SLP(C) No.12933/2007)  CA No. 5367 of 2009  (@ SLP(C) No.12935/2007)  CA No. 5368 of 2009  (@ SLP(C) No.12936/2007)  CA Nos. 5369-5370 of 2009 (@ SLP(C) No.12937-12938/2007) CA No. 5371 of 2009  (@ SLP(C) No.12939/2007)  CA No. 5372 of 2009  (@ SLP(C) No.12940/2007)  CA No. 5373-5374 of 2009  (@ SLP(C) No.12942-12943/2007)     CA No. 5375 of 2009  (@ SLP(C) No.14313/2007) CA No. 5377 of 2009  (@ SLP(C) No.14314/2007)  CA No. 5378 of 2009 (@ SLP(C) No.14315/2007)

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CA No. 5379 of 2009  (@ SLP(C) No.16352/2007)  CA No. 5380 of2009  (@ SLP(C) No.16353/2007)  CA No. 5381 of 2009  (@ SLP(C) No.4334/2008)  CA No. 5382 of 2009  (@ SLP(C) No.13579/2008)  

CA Nos. 5383-5384 of 2009 (@ SLP(C) No.16207-16208/2008)  CA No. 5385 of 2009  (@ SLP(C) No.28889/2008)  

J U D G M E N T

R. V. RAVEENDRAN, J.  

Leave granted in the special leave petitions.  

2. These appeals are by claimants for increase in compensation in  regard to acquisitions of lands situated at Rithala village initiated under  preliminary notifications dated 13.2.1981, 20.2.1981, 13.3.1981, and  31.12.1981.  

3. These matters are covered by the judgment in Lal Chand vs. Union  of India [Civil Appeal No.4945 of 2006] and connected cases, decided  today. Following the decision and in terms of it, these appeals are  allowed in part.    

......................................J. (R V Raveendran)

New Delhi; ....................................J. August 12, 2009. (B. Sudershan Reddy)