REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. __2385_ OF 2009 ARISING OUT OF

SPECIAL LEAVE PETITION (CIVIL) NO. 14209 OF 2006

MOHAMMAD RAOFUDDIN … APPELLANT

VERSUS

THE LAND ACQUISITION OFFICER … RESPONDENT

J U D G M E N T

D.K. JAIN, J.

Leave granted.

2. Challenge in this appeal by the claimant-land owner is to the

judgment and order dated 16th September, 2004 rendered by

the High Court of Judicature Andhra Pradesh at Hyderabad in

A.S.  No.  1472 of  1999 filed  under  Section  54 of  the  Land

Acquisition Act, 1894 (hereinafter referred to as “the Act”) for

enhancement  of  the  amount  of  compensation.  By  the

impugned judgment,  the High Court  has affirmed the award

made by the Reference Court, Medak in O.P. No.25 of 1993

dated  31st December,  1998  and  dismissed  the  appeal

preferred by the appellant.

3. Lands measuring 4 acres 2 guntas situated in Survey No. 434,

Manthoor village of Pulkal Mandal in Medak District of Andhra

Pradesh  were  acquired  for  a  public  purpose,  namely  for

submergence  under  the  Singnoor  project  by  issuing  a

Notification under Section 4 (1) of the Act on 15th July, 1987.

The  possession  of  the  land  was  taken  on  19th November,

1987.  Pursuant  to the notice issued under Section 9 of  the

Act, the appellant filed a statement claiming compensation for

the land at Rs.25/- per square yard. An additional amount at

the rate of Rs.5,000/- per year was claimed as damages on

account  of  “ill”  dispossession  by  the  government.  After

following the requisite procedure, the Land Acquisition Officer

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made an award on 18th March, 1989, fixing the compensation

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

4. Being  aggrieved  by  the  award,  the  appellant  sought  a

reference  under  Section  18  of  the  Act  for  enhancement  of

compensation. According to the appellant, the village in which

his  land is  located  was fully  developed and on the  date of

Notification, the market value of similar land, meant for house

sites,  was  not  less  than  Rs.35/-  per  square  yard.  Upon

appreciation of the material available on record, the reference

Court  fixed  the  market  value  of  the  acquired  land  at

Rs.20,000/- per acre i.e., an additional amount of Rs.11,000/-

over  and  above  what  had  been  awarded  by  the  Land

Acquisition Officer, alongwith the statutory benefits, viz.  30%

solatium on the enhanced amount of compensation; interest

at 9% per annum for one year from 18th March, 1989, i.e., date

of passing award; interest at 15% per annum after one year of

passing  of  award  till  the  date  of  realization  and  additional

interest at 12% per annum from 18th July, 1987 to 18th March,

1989.  

5. Being not satisfied, the appellant preferred an appeal to the

High Court seeking enhancement of compensation at the rate

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of Rs.35/- per square yard. Relying on Ex. A.6, an order of the

Reference Court in another O.P. No. 112 of 1987, in respect

of land approximately 100 yards away, which was acquired for

the same purpose vide Section 4 (1)  Notification  dated 31st

August, 1985, i.e., nearly two years before the acquisition of

the subject  land whereunder compensation was paid at  the

rate of  Rs.18/-  per  square  yard,  the  stand  of  the  appellant

before  the  High  Court  was  that  the  minimum  amount  of

compensation  had  to  be  at  the  rate  of  Rs.18/-  per  square

yard. As noted earlier, by reason of the impugned order, the

High Court has dismissed the appeal, maintaining the amount

of compensation determined by the Reference Court. Dealing

with the evidence adduced by the appellant, in particular, Ex.

A6, the High Court observed as follows:  

“Admittedly,  the lands that were acquired leading to the judgment of the Reference Court under Exs. A.6 and A.7 are not situated in the same village. The lands that are acquired  thereunder  were  situated  in  Seripeddareddy Village. However, according to the appellant, the distance between the lands acquired leading to the judgment under Ex. A.6 and the acquired lands are at a distance of just about hundred yards. The lands are contiguous to each other. It is unnecessary to further dilate on this subject in view of the decision of this court in A.S. No. 2336 of 1998 wherein this court confirmed the judgment of the Senior Civil  Judge,  Medak  in  O.P.  No.  109  of  1987  dated 7.10.1997 whereunder compensation has been awarded at  the  rate  of  Rs.8,300  per  acre.  In  the  said  O.P.,  an extent  of  Ac.3.09  1/3  guntas  of  land  belonging  to  the

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claimants therein situated at the same Manthoor Village which was acquired for the very same public purpose of construction  of  Singnoor  Project  under  the  draft Notification  dated  4.1.1987.  This  court  assessed  the market  value of the acquired land therein at the rate of Rs.8,300  per  acre.  The  Notification  in  this  case  was published on 15.7.1987. In such view of the matter, it is not possible and permissible to take a different view other than the one taken by this court in A.S. No. 2336 of 1998.

For the aforesaid reasons, we find no merit in this appeal and the same shall accordingly stand dismissed without costs. The appellant however shall be entitled to payment of  interest  on  30% solatium,  apart  from other  statutory benefits  that  were  already  granted  by  the  Reference Court.”

6. Thus, the High Court preferred to rely on its earlier judgment

and declined to  rely on Ex.  A.6,  heavily relied upon by the

appellant-land owner in support  of  his claim. Aggrieved,  the

claimant-land owner is before us.

7. Learned counsel  appearing  for  the appellant  submitted  that

the  Reference  Court  as  well  as  the  High  Court  erred  in

ignoring a decree of the Court (Ex. A.6) which was tendered in

evidence by the appellant. It was pointed out that appellant’s

land was acquired at the rate of Rs.9,000/- per acre whereas

in  respect  of  another  strip  of  land  situated  only  100  yards

away  from  his  land,  acquired  about  two  years  back,

compensation was paid at the rate of Rs.18/- per square yard.

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In support of the proposition that a judgment of the Court in a

land acquisition case, determining the market value of a land

in  the  vicinity  of  the  acquired  lands,  even  though  not  inter

partes, could be admitted in evidence either as an instance or

one from which the market value of the acquired land could be

deduced or inferred, reliance was placed on a decision of this

Court  in  Pal  Singh  &  Ors.  Vs.  Union  Territory  of

Chandigarh1.  Learned counsel strenuously urged that before

relying on its  earlier  decision,  the High Court  also  failed  to

ascertain whether there was any similarity between the land,

subject  matter  of  A.S.  2336  of  1998  and  the  present  suit

lands.  Learned  Senior  Counsel  appearing  on  behalf  of  the

respondent, on the other hand, supported the view taken by

the High Court.

8. Before  we enter into the merits of the case, we may note a

few broad principles to be kept in view while determining the

amount of compensation payable on acquisition of land for a

public purpose.

9. Section  15  of  the  Act  mandates  that  in  determining  the

amount of compensation, the Collector shall be guided by the

provisions  contained  in  Sections  23  and  24  of  the  Act. 1  (1992) 4 SCC 400

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Section 23 contains the list of positive factors and Section 24

has a list of negatives, vis-a-vis the land under acquisition, to

be taken into consideration while determining the amount of

compensation,  the  first  step  being  the  determination  of  the

market  value  of  the  land  on  the  date  of  publication  of

Notification under sub-Section (1) of Section 4 of the Act. One

of the principles for determination of the market value of the

acquired land would be the price an interested buyer would be

willing to pay if it is sold in the open market at the time of issue

of Notification under Section 4 of the Act.  But finding a direct

evidence in this behalf is not an easy exercise and, therefore,

the Court  has to take recourse to other known methods for

arriving at the market value of the land acquired.  One of the

preferred and well accepted methods adopted for working out

the  market  value  of  the  land  in  acquisition  cases  is  the

comparable  sales  method.   The  comparable  sales  i.e.  the

lands sought  to be compared must be similar in nature and

potentiality.   Again,  in  the  absence  of  sale  deeds,  the

judgments  and  awards  passed  in  respect  of  acquisition  of

lands, made in the same village and/or neighbouring villages

can  be accepted  as  valid  piece of  evidence  and  provide a

sound basis to determine the market value of the land after

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suitable  adjustments  with  regard  to  positive  and  negative

factors  enumerated  in  Sections  23  and  24  of  the  Act.

Undoubtedly, an element of some guess work is involved in

the entire exercise.

10. In Shaji Kuriakose & Anr. Vs. Indian Oil Corpn. Ltd. & Ors.2

this Court had observed as under:

“While  fixing  the  market  value  of  the  acquired  land, Comparable Sales Method of valuation is preferred than other methods of valuation of land such as Capitalisation of  Net  Income  Method  or  Expert  Opinion  Method. Comparable  Sales  Method  of  valuation  is  preferred because it furnishes the evidence for determination of the market  value of  the  acquired  land,  (sic)  which  a  willing purchaser would pay for the acquired land if it has been sold  in  open market  at  the time of  issue of  Notification under Section 5 of the Act. However, Comparable Sales Method of valuation of land for fixing the market value of the  acquired  land  is  not  always  conclusive.  There  are certain  factors  which are required to  be fulfilled  and on fulfillment  of  those  factors  the  compensation  can  be awarded,  according to the value of  the land reflected in the sales. The factors laid down inter alia are: (1) the sale must be a genuine transaction, that (2) the sale deed must have been executed at the time proximate of the date of issue of Notification under Section 4 of the Act, that (3) the land  covered  by the  sale  must  be  in  the  vicinity  of  the acquired land, that (4) the land covered by the sales must be similar to the acquired land and that (5) the size of plot of the land covered by the sales be comparable to the land acquired. If all these factors are satisfied, then there is no reason why the sale value of the land covered by the sales be not  given for  the acquired land.  However,  if  there  is dissimilarity in regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is  open  to  Court  to  proportionately  reduce  the

2  (2001) 7 SCC 650

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compensation for acquired land than what is reflected in the  sales  depending  upon  the  disadvantages  attached with the acquired land”.

11. Yet again in  Viluben Jhalejar  Contractor  (D) by LRs.  Vs.

State of Gujarat3, making reference to a number of cases on

the point, it was observed as follows:

“18. One of the principles for determination of the amount of  compensation  for  acquisition  of  land  would  be  the willingness of an informed buyer to offer the price therefor. It  is beyond any cavil that the price of the land which a willing and informed buyer would offer would be different in  the  cases  where  the  owner  is  in  possession  and enjoyment of the property and in the cases where he is not.

19.  Market value is ordinarily the price the property may fetch  in  the  open  market  if  sold  by  a  willing  seller unaffected by the special needs of a particular purchase. Where  definite  material  is  not  forthcoming  either  in  the shape of sales of similar lands in the neighbourhood at or about  the  date  of  Notification  under  Section  4(1)  or otherwise, other sale instances as well as other evidences have to be considered.  

20.  The amount of compensation cannot be ascertained with mathematical  accuracy.  A comparable instance has to be identified having regard to the proximity from time angle  as  well  as  proximity  from  situation  angle.  For determining the market value of the land under acquisition, suitable  adjustment  has  to  be  made  having  regard  to various  positive  and  negative  factors  vis-à-vis  the  land under acquisition by placing the two in juxtaposition. The positive and negative factors are as under:

3  (2005) 4 SCC 789

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---------------------------------------------------------------------------- - Positive factors                                Negative Factors ---------------------------------------------------------------------------- - (i)   smallness of size                 (i)  largeness of area

(ii)  proximity to a road               (ii) situation in the interior                                                          at a distance from the                                                         road

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

(iv) nearness to developed       (v)   lower level requiring    area                                             the depressed

portion                                                          to be filled up

(v)   regular shape                     (v)   remoteness from         developed                                  locality

(vi)  level vis-a-vis land under    (vi)  some special        acquisition        disadvantageous

                                                     factors which would                                                          deter a purchaser (vii) special value for an owner        of an adjoining property to       whom it may have some       very special advantage”.

12. Thus,  comparable  sale  instances  of  similar  lands  in  the

neighbourhood  at  or  about  the  date  of  Notification  under

Section 4(1) of the Act are the best guide for determination of

the market value of the land to arrive at a fair estimate of the

amount  of  compensation  payable  to  a  land  owner.

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Nevertheless, while ascertaining compensation, it is the duty

of the Court to see that the compensation so determined is

just and fair not merely to the individual whose property has

been acquired but also to the public which is to pay for it.

13. The next question is as to the scope of interference by this

Court  in  an  award  granting  compensation.  The  scope  of

interference by this Court  was delineated by the decision in

Kamta Prasad Singh Vs. State of Bihar4 wherein this Court

held that there was an element of guesswork inherent in most

cases  involving  determination  of  the  market  value  of  the

acquired land. If the judgment of the High Court revealed that

it had taken into consideration the relevant factors prescribed

by the Act, in appeal under Article 133 of the Constitution of

India, assessment of market value thus made should not be

disturbed by this Court.

14. The following observations of this Court in Food Corporation

of India through its District Manager, Faridkot, Punjab &

Ors. Vs.  Makhan Singh and Anr.5 are quite apposite:

“This Court as the last Court of appeal, will ordinarily not interfere in an award granting compensation unless there is something to show not merely that on the balance of

4  (1976) 3 SCC 772 5  (1992) 3 SCC 67

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evidence it is possible to reach a different conclusion, but that  the judgment  cannot  be supported  by reason of  a wrong application of principle or because some important point  affecting  valuation  has  been  overlooked  or misapplied.  Besides,  generally  speaking,  the  appellate court  interferes not when the judgment under appeal is not right but only when it is shown to be wrong. See in this  connection,  The  Dollar  Company,  Madras  v. Collector  of Madras,  (1975) 2 SCC 730. Added thereto are other rules of prudence that the courts do not treat at par  land  situated  on  the  frontage  having  special advantage  and  the  land  situated  in  the  interior undeveloped area, or to compare smaller plots fetching better  price  with  large  tracts  of  land.  See  in  this connection Periyar and Pareekanni Rubbers Ltd. v. State of Kerala, (1991) 4 SCC 195 : AIR 1990 SC 2192.”

15. Therefore, the scope of interference in such matters is very

limited  and  it  is  only  in  cases  where  it  is  found  that  the

authorities below have either applied wrong principles or have

omitted  to  take  into  consideration  some  important  point

affecting valuation, that this Court can interfere.

16. Bearing these principles in mind, we may now advert to the

facts of the present case.

17. In the instant case before the Reference Court, the appellant

had  examined  4  witnesses  including  himself  as  PW-1.   In

support  of  his  claim,  he brought  on record  Ex.  A.1  to  A.8.

However, presently we are required to consider Ex. A.6, the

judgment  of  Subordinate  Judge,  Medak  in  O.P.  No.112  of

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1987 dated 25th April, 1991, fixing the rate of compensation for

the land, stated to be contiguous to the land of the appellant,

at Rs.18/- per square yard. Ex. A.7 is the certified copy of the

decree in the said original petition.   As is clear from its afore-

extracted order, the High Court relied on its decision in A.S.

No.2336 of 1998 on the ground that the land in question in the

said suit was acquired vide Notification under Section 4 of the

Act dated 4th January, 1987; the area of the land was 3 acres

9 guntas; the land was situated in the same village and was

acquired for the same very public purpose of construction of

Singnoor  project  as  in  the  present  case.   The  High  Court

noted that the Notification under Section 4 of the Act in the

case of the appellant having been published within 6 months

of the date of Notification in the afore-mentioned suit i.e. 15th

July,  1987,  it  was  not  possible  and  permissible  to  take  a

different view other than the one taken in the said suit.  While

discarding  Exs.  A.6  and  A.7,  the  Court  has  noted  that  the

lands, subject matter of that acquisition, were not situated in

the same village.  

18. Therefore,  the  question  for  consideration  is  whether  in  the

light of the said finding of the High Court, it could be said that

the High Court  has applied a wrong principle  of  law or has

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taken  into  consideration  irrelevant  material,  warranting

interference by this Court.  Having gone through the evidence

on  record,  we  find  it  difficult  to  accept  the  stand  of  the

appellant  that the High Court  should have relied on Ex. A.6

instead of its earlier decision in A.S. No.2336 of 1998.  It may

be true that in the absence of the instance relied upon by the

High Court, Ex. A.6 could be taken into consideration as one

of  the  comparable  sale  instances  but  at  the  same  time

reliance on its 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.  As  observed  in  Pal  Singh’s case  (supra),  said

judgment is a valid instance from which the market value of

the subject land could be deduced. Merely because a different

conclusion could be possible on two sets of sale/acquisition

instances, in our judgment, is no ground to interfere with the

award of the High Court when it has taken into consideration

an instance which is more closer to appellant’s land in respect

of the date of acquisition; happened to be in the same village

and acquired for the same purpose.

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19. In the light of above discussion, we do not find any ground to

interfere with the decision of the High Court. There is no merit

in the appeal, which is dismissed accordingly.  We make no

order as to costs.  

………………………………….…J.           ( D.K. JAIN )  

…………………………………….J.          ( R.M. LODHA )

NEW DELHI, APRIL 13, 2009.

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