REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.6230-6251 OF 2002

Satish & Ors. … Appellants

Versus

State of U.P. & Ors. … Respondents

WITH

Civil Appeal Nos.6300, 6301-6321, and 6253-6299 of 2002

J U D G M E N T

S.B. Sinha, J.

1. These appeals, involving similar questions of fact and law, were taken  

up for hearing together and are being disposed of by this common judgment.

2. National  Thermal  Power  Corporation  Ltd.  is  a  Public  Sector  

Undertaking and is engaged, inter alia, in generation of electricity.  With an  

intention to set up a thermal power plant at Sarna, Murad Nagar, District

Ghaziabad in the State of Uttar Pradesh and nearby villages, a requisition  

was sent to the Collector of the District for the purpose of acquisition of  

some lands belonging to the appellant herein.  Pursuant to or in furtherance  

of  the  said requisition and having regard to the  fact  that  setting up of  a  

thermal  power plant  was to be treated to be a public  purpose within the  

meaning of provisions of the Land Acquisition Act, 1894 (hereinafter called  

and  referred  to  for  the  sake  of  brevity  as  ‘the  Act’),  the  State  of  Uttar  

Pradesh (the State) on or about 6.9.1984 issued a notification in terms of  

Section 4 thereof.   

3. The  lands  in  question  are  situated  in  villages  Sarna,  Khurrampur,  

Sultanpur, Jalalpur and Mohiuddinpur.  Herein, we are concerned with the  

lands situated in village Sarna only.

The  said  notification  was  published  in  the  official  Gazette  on  

8.9.1984.   Keeping in view the fact  that  generation of  electricity  was of  

urgent and imminent need, a notification under Section 6 read with Section  

17(1) and 17(4) of the Act was also issued by the State on 26.9.1984.  The  

said notification was published in the Gazette published by the State of Uttar  

Pradesh on 29.9.1984.

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4. Notices were issued to the claimants for settlement of their claims in  

terms  of  Section  9  of  the  Act  on  27.10.1984.   80%  of  the  amount  of  

compensation,  as  provided  for  under  Section  17(3A)  of  the  Act,  as  

determined, was also paid to the appellants by way of advance.

Possession of the said lands in question was taken on 16.11.1984.

The Collector made an award on or about 24.9.1986.

The  lands  in  question  were  classified  in  two  categories,  namely,  

‘Dakar Doyat Khaki’ and ‘Dakar Doyat Aabi’ purported to be having regard  

to the nature thereof as also the extent of fertility.  

Before the Collector, a large number of sale deeds in respect of the  

lands situated in the said village and/or neighbouring village were produced.  

A large number of sale deeds were kept outside the purview of consideration  

by the Land Acquisition Collector for the purpose of making the award on  

the premise that the consideration therefor had been paid in terms of square  

yards of land and, thus, the rate would be on higher side.

5. The Collector took into consideration 29 deeds of sale in respect of  

the areas which were within the Murad Nagar Municipality on the premise  

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that they were more useful and the rate being on the higher side, the same  

should also be kept out of consideration.   

He took into consideration only five deeds of sale being No.34, 254,  

480, 629 and 635. Out of the said five sale deeds, three deeds of sale being  

No.480, 629 and 635 were again kept outside the purview of consideration  

having regard to the distance factor as also the fact that the lands under the  

said deeds were situated on the other side of the village.  So far as sale deed  

No.34 is  concerned,  the Collector  was of the opinion that the amount of  

consideration stated therein was deliberately kept low to avoid stamp duty.

6. He  took into  consideration  a  deed of  sale  which  was executed  on  

27.7.1982, i.e., two years prior to the issuance of notification under Section  

4 of the Act being sale deed No.254 in respect of Khasra No.1354 and 1355.  

7. Yet again, on the premise that the lands were very close to the area of  

municipality and it was sold at a very low rate, the same also had not been  

taken into consideration.  The only deed of sale which was, thus, considered  

for the purpose of determination of the amount of compensation was sale  

deed No.423.  It was executed on 2.6.1983.  The land transferred by reason  

thereof admeasured 1 Biswas, 9 Biswansi and 15 Kachhwansi pertaining to  

Khasra No.1054 and 1064.  The amount of consideration for the said lands  

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was shown as Rs.13,500/-,  wrongly stated in the award as  Rs.1,35,000/-.  

Inter alia, on the premise that the deed of sale was executed in respect of a  

piece  of  land  which  was situated  outside  the  municipal  area,  the  market  

value therefor  was calculated at  Rs.1,81,512.60 per  bigha,  the circle  rate  

wherefor was to be Rs.9.62 p.  Although it was held that the lands under the  

said deed were similar to the acquired lands but according to the Collector,  

the  circle  rate  should  be  determined  for  ‘Dakar  Doyat  Khaki  lands  at  

Rs.3.19p. and for ‘Dakar Doyat Aabi’ lands at Rs.4.37 p., the amount of  

compensation on the said basis was determined as Rs.60,189.72 p. per bigha  

for the former category and Rs.82,454.20 p. per bigha for the latter.   

The amount of compensation for the land in question was determined  

at Rs.64,59,429.63 p. on that basis.

Over and above the said amount of compensation, other sums as were  

admissible in law were also granted which is in the following term :

“1. Amount of Compensation Rs.64,59,429.63

2. House, tree etc. Rs.     21,005.00

3. 30% Solatium Rs.19,44,130.39

4. 12% additional from 8.9.84 i.e. from the date of notification till the date of possession  i.e. on 16.11.84 Rs.  1,46,531.69

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5. Amount of Interest Rs.  4,10,740.06

               Total           : Rs.89,81,836.77”

8. Appellants filed applications before the Collector for reference to the  

District  Judge in terms of Section 18 of the Act.   Reference Cases were  

considered by the Reference Court in two bunches, i.e., (1) Baljit’s Bunch;  

and (2) Kanti’s Bunch.

9. In the first group consisting of 22 cases, compensation at the rate of  

Rs.115/- per square yards was awarded as market value of the acquired land  

irrespective of quality of land recorded in the revenue record.  In the second  

group  of  references  consisting  of  25  cases,  however,  the  amount  of  

compensation was determined at the rate of Rs.155/- per square yard.   

10. In the first award upon consideration of the oral evidence adduced by  

the parties, it was opined :

“Thus, from this statement it is clear that village  Sarna  and  town  Murad  Nagar  are  not  distinguishable.”

It was furthermore held that in view of the fact that Muradnagar is  

situated on one side of the road and village Sarna is situated on the other, the  

administrative distinction that  whereas village Sarna was administratively  

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being controlled by Gaon Sabha and Muradnagar was being administratively  

controlled  by  Nagar  Palika  (Municipalty)  was  held  to  be  not  a  relevant  

factor.  With regard to the categorization of land, it was held :

“Keeping this situation in mind, the belting system  even  on  the  basis  of  quality  of  land  will  be  relevant.  In Indra Singh & Ors. V. Union of India  [JT 1993 SC page 653], D.B. Belting system under  these circumstances has been proper.  But in the  present  case  there  is  no  such  evidence  from the  side of the State or NTPC that some land is likely  to  be  used  as  commercial  complex  on  the  best  quality.”

The learned Judge,  having regard  to  the  Khasra  records  and maps  

opined  that  Sarna-Muradnagar  is  a  composite  name  written  on  all  the  

revenue  papers  and,  thus,  the  acquired  land  must  be  treated  to  be  an  

adjoining land covered by the sale deed dated 31.5.1983 in terms whereof  

the  market  rate  was  worked  out  to  be  Rs.155/-  per  square  yard.   For  

determining the amount of compensation, however, although, the reference  

court  referred to  a  decision  of  this  Court  in  Hindustan  Oil  Mills  Ltd. v.  

Special Deputy Collector (Land Acquisition) [AIR 1990 SC 731] stating that  

the value of the land doubles in five years but opined that increase at the rate  

of 10% per year only should be allowed.  The rate, therefore, according to  

the learned Judge, could be calculated at the rate of Rs.170/- per square yard.  

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However, having regard to the fact that the said sale deed related to a small  

area, a deduction of 30% was made therefrom in terms whereof the amount  

of compensation came to Rs.119/- per square yard.  It is on that basis that  

the compensation at the rate of Rs.115/- per square yard was arrived at.

11. In the second reference, however, the learned Judge placed reliance on  

a sale deed dated 3.9.1984 involving 50 square yards of land which was sold  

for a consideration of Rs.10,327/-.  The said deed of sale was executed on  

the basis of an agreement of sale entered into by and between the parties in  

the year 1981.  10% increase was added thereto so as to hold that the market  

value of the land was Rs.228/- per square yard.  However, therefrom 30%  

was deducted keeping in view that the area was small as a result whereof the  

calculation of the market value was determined at Rs.160/- per square yard  

and on that basis, according to the learned Judge, compensation at the rate of  

Rs.155/- per square yard would be sufficient.

12. Aggrieved  by and dissatisfied  with  the  said  judgment,  only  NTPC  

preferred appeals before the High Court.  The landholders did not.  The High  

Court, however, opined that the Collector rightly placed reliance on the deed  

of sale dated 2.6.1983 as the other sale deeds were executed in respect of the  

lands which were measured in terms of square yards only.  It was held that if  

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an increase of 10% per year is added to the rate at which the land was sold,  

the net rate shall be Rs.63.92 per square yard, i.e., Rs.64 per square yard (in  

the round figure).

13. Appellants are, thus, before us.

14. We may place on record that although the NTPC had also preferred  

appeals, its contention only is that the compensation payable should have  

been calculated at  the rate  of  Rs.60 per  square yard.   However,  the said  

appeals were not pressed before us.

15. Mr.  Ranjeet  Kumar,  learned  senior  counsel  appearing  in  CA  

Nos.6230-6321 of  2002 and Mr.  Kailash  Vasdev,  learned  senior  counsel  

appearing on behalf of the appellant in CA Nos.6301-6321 of 2002 would  

contend :

(1) The High Court committed a serious error in passing the impugned  

judgment in so far as it failed to take into consideration that even the  

sale deed dated 2.6.1983 was in respect of 1 Bigha, 9 biswansi and 15  

Kachhwansi of land which would come to Rs.331/- per square yard  

and there is no reason as to why the sale deed in respect of 190 square  

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yards of land could not have been taken into consideration as both the  

said deeds involved transfer of small portions of land.

(2) The amount of compensation must be determined on the concept of a  

value which a free seller would receive from a free buyer and in that  

view of the matter as some of the land owners have small holdings,  

there was absolutely no reason as to why both the deeds of sale could  

not have been taken into consideration for the purpose of arriving at a  

correct amount of compensation.

(3) The fact that the High Court itself granted compensation in respect of  

the lands on square yards basis, it could not have upheld the awards of  

the Collector as it had rejected the said method.

(4) The High Court could not have refused to consider the deed of sale  

only relying on or on the basis of the decision of this Court in  A.P.  

State  Road  Transport  Corporation,  Hyderabad,  represented  by  

Managing Director v. P. Venkaiah & Ors. [(1997) 10 SCC 128] as the  

said  judgment  was  overruled  by  this  Court  in  Land  Acquisition  

Officer & Mandal Revenue Officer v.  V. Narasaiah [(2001) 3 SCC  

530] which view was reiterated in Cement Corporation of India Ltd.  

v. Purya & Ors. [(2004) 8 SCC 270].  Refusal on the part of the courts  

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below to consider the deeds of sale produced before the Collector and  

consequentially before the High Court cannot be held to be correct in  

view of Section 51A of the Land Acquisition Act and Section 90A of  

the Indian Evidence Act as amended by the State of Uttar Pradesh.

(5) The directives issued by the State of Uttar Pradesh that the sale deed  

involving the highest consideration should be taken into consideration  

having not  been followed by the Collector,  he must  be held to be  

guilty of administrative discipline.  The sale deed of the year 1983  

having admittedly been executed in terms of an agreement for sale  

executed in the year 1981, the amount of consideration should have  

been enhanced keeping in view the development of land which was  

expected in three years and not one year.

16. Mr. Rakesh Dwivedi, learned senior counsel appearing on behalf of  

the respondent, on the other hand, supported the judgment of the High Court  

contending :  

(1) the High Court has rightly relied upon the sale deed dated 3.5.1984 in  

view of the fact  that the consideration mentioned therein took into  

consideration all relevant criterias including its building potentiality as  

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has been held by this Court in Rao Narain Singh (Dead) by LRs. V.  

Union of India [(1993) 3 SCC 60].  

(2) The Reference Court having committed a serious error in relying upon  

the  deeds  of  sale  which  had been  rejected  by  the  Collector  as  no  

reason in support thereof  was assigned,  the High Court  has rightly  

placed  reliance  on  the  said  deed  of  sale,  particularly,  where  some  

amount  of  guess  work  in  fixing  the  quantum  of  compensation  is  

legally permissible as has been held by this Court in Viluben Jhalejar  

Contractor (Dead) by LRs. V. State of Gujarat [(2005) 4 SCC 789].   

(3) The land under acquisition being within the administrative jurisdiction  

of  Gaon  Sabha,  the  same  could  not  have  been  considered  to  be  

similarly situated as the lands within a municipal area for the purpose  

of arriving at the market value of the acquired lands.   

(4) The administrative circular issued by the State of Uttar Pradesh would  

be applicable only when the reliance is placed on a sale deed which is  

comparable with the lands under acquisition and not otherwise.

(5) The judgment of the reference court must be held to be suffering from  

a legal infirmity as in two different awards, two different yardsticks  

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for  calculating  the  amount  of  compensation,  namely,  Rs.115/-  per  

square yard and Rs.155/- per square yard respectively had been taken  

in two different bunch of cases.

17. At the outset, it must be noticed that the learned Reference Judge as  

also the High Court refused to take into consideration a large number of  

deeds of sale relying on or on the basis of a decision of this Court in  P.  

Venkaiah (supra).

Section 51A of the Land Acquisition Act construction of which fell  

for consideration before this Court therein reads as under :

“51A. Acceptance of certified copy as evidence. —In  any  proceeding  under  this  Act,  a  certified  copy  of  a  document  registered  under  the  Registration Act,  1908 (16 of 1908),  including a  copy given under section 57 of that Act, may be  accepted as evidence of the transaction recorded in  such document.”

This  Court  in  P.  Venkaiah (supra)  opined  that  in  absence  of  any  

evidence  adduced  on  behalf  of  the  claimants  that  the  amount  of  

consideration mentioned in respect  of  deeds of sale are correct  either  by  

examining the vendor or the vendee, the documents per se cannot be relied  

upon.   

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The  said  ratio  was  reiterated  by  this  Court  in  State  of  Bihar v.  

Madheshwar  Prasad [(1996)  6  SCC  197]  and  A.P.  State  Road  Trnsport  

Corporation, Hyderabad, represented by Managing Director v.  P. Venkaiah  

& Ors. [(1997) 10 SCC 128].   

Correctness of the aforementioned proposition of law, however, was  

doubted.

A different view was taken in Land Acquisition Officer & Mandal v.  

V. Narsaiah [(2001) 3 SCC 530].  Noticing the conflict between two three  

Judge  Benches’  decision  of  this  Court,  the  matter  was  referred  to  a  

Constitution Bench.  

18. A Constitution Bench of this Court in Cement Corporation of India v.  

Purya & Ors. [(2004) 8 SCC 270] opined that by reason of the insertion of  

Section 51A, the Parliament merely enabled a party to get over the problem,  

namely calling for the original from the vendor or the vendee and proving  

the same and, thus, the decision of this Court in Special Deputy Collector &  

Anr. v. Kurra Sambasiva Rao & Ors. [(1997) 6 SCC 41] was held to be not  

laying down the correct proposition of law, holding :

“18.  From  the  above,  it  is  seen  that  till  the  judgment of the three Judge Bench in Narasaiah's  

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case (supra), the consensus of judicial opinion was  that  Section  51A  was  enacted  for  the  limited  purpose  of  enabling  a  party  to  produce  certified  copy of  a  registered sale  transaction in  evidence  only  and  for  proving  the  contents  of  the  said  document the parties had to lead oral evidence as  contemplated in the Evidence Act.

19.  A careful  perusal  of  the  judgment  in  Kurra  Sambasiva Rao's case and other cases which fall  in  line  with  the  said  view  discloses  that  they  proceeded on the basis that prior to the insertion of  Section 51A in the LA Act, the Evidence Act did  not permit the production of a certified copy of the  registered sale transaction in evidence. Therefore,  by  the  insertion  of  Section  51A  the  legislature  merely enabled a party to get over that problem.  Thereafter,  according  to  the  said  judgments,  the  party concerned had to prove the contents of the  document by adducing oral evidence separately to  prove the contents of the document.

20.  The  above  view  of  the  Court  in  Kurra  Sambasiva Rao's case, in our opinion, is not the  correct position in law. Even prior to the insertion  of  Section 51A of  the  Act  the  provisions  of  the  Evidence Act and the Registration Act did permit  the production of a certified copy in evidence. This  has  been  clearly  noticed  in  the  judgment  in  Narsaiah's  case  wherein  the  court  relying  on  Sections  64  and 65(f)  of  the  Evidence  Act  read  with Section 57(5) of the Registration Act held that  production of a certified copy of a registered sale  document in evidence was permissible in law even  prior to insertion of Section 51A in the LA Act.  We are in agreement with the said view expressed  by this Court in Narasaiah's case.”

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The Constitution Bench, thus, laid down the law that for praying a  

certified copy of a registered deed of sale, the vendor and vendee thereof  

need not be examined.   

19. In the aforementioned backdrop, the Court opined that Section 51A of  

the Act seeks to make an exception to proof of document through primary  

and  secondary  evidence  stating  that  in  the  acquisition  proceedings,  sale  

deeds are required to be brought on record for the purpose of determining  

market  value  payable  to  the  owner  of  the  land  when  it  is  sought  to  be  

acquired.  It was held :

“35.  A  registered  document  in  terms  of  Section  51A of the Act may carry therewith a presumption  of genuineness. Such a presumption, therefore, is  rebuttable. Raising a presumption, therefore, does  not amount to proof; it  only shifts the burden of  proof against whom the presumption operates for  disproving  it.  Only  if  the  presumption  is  not  rebutted by discharging the burden, the court may  act on the basis of such presumption. Even when in  terms  of  the  Evidence  Act  a  provision  has  been  made that the court shall presume a fact, the same  by itself would not be irrebuttable or conclusive.  The genuineness of a transaction can always fall  for adjudication,  if  any question is  raised in this  behalf.”

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20. The Constitution Bench held that a presumption as to the genuineness  

of the contents of the document has to be raised and, thus, reliance can be  

placed thereon unless it is rebutted by other evidence.   

Apart from Section 51A of the Act, we may notice that State of Uttar  

Pradesh,  inter  alia,  has  inserted  Section 90A in  the  Evidence  Act  which  

reads as under :

“90A.(1) Where any registered document or a duly  certified  copy thereof  or  any certified  copy of  a  document which is part of the record of a Court of  justice,  is  produced from any custody which the  Court in the particular case considers proper, the  Court may presume that the original was executed  by the person by whom it  purports to have been  executed.

(2) This presumption shall not be made in respect  of any document which is the basis of a suit or of  defence or is relied upon in the plaint  or written  statement.”

21. This legal position, thus, being neither in doubt nor dispute, all the  

deeds of sale which have been brought on record subject to the applicability  

thereof, therefore, in our opinion should have been taken into consideration.

The  ‘State’  in  acquiring  land  of  another  State  or  a  private  person  

exercises its power of Eminent Domain which envisages that expropriation  

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of one’s property is permissible if it is in public interest and a reasonable  

amount of compensation as provided for in a statute is paid to the owner  

thereof.   

Keeping in view the aforementioned principle in mind, the provisions  

of  Section  23  of  the  Land  Acquisition  Act  laying  down  the  factors  

enumerated therein must be taken into consideration.  The first factor which  

the Parliament mandates to be relevant therefor is the market value of the  

land at the date of publication of the notification under Section 4 sub-section  

(1).  Market value of a land would, inter alia, mean a free seller of a land  

would transfer his right in the property to a free buyer.  It is only for the  

aforementioned purposes, deeds of sale or other transfers made in respect of  

similar types of land in the surrounding areas assume significance.

22. For determination of the amount of compensation in terms of Section  

23  of  the  Act,  the  methods  of  valuation  which  can  be  adopted  for  

ascertaining market  value are – (1) opinion of experts;  (2) the price paid  

within a reasonable time in bona fide transactions of purchase of the lands  

acquired or the lands adjacent to the lands acquired and possessing similar  

advantages; and (3) number of years purchase of the actual or immediately  

prospective profits of the lands acquired.

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23. While  adopting  the  second  method,  the  transactions  which  are  

relevant, thus, are required to be taken into consideration.  The Collector, the  

Reference Judge or the High Court without assigning appropriate reasons  

would not be entitled to discard one deed of sale and rely upon the other.  It  

must be done on some legal principle, rationality and cogent reasons.

24. Some other factors which are relevant for determination of the amount  

of compensation are – the nature and quality of land, whether irrigated or  

unirrigated, facilities for irrigation, presence of fruit bearing trees, location  

of  the  land,  closeness  to  any  road  or  highway,  evenness  of  the  land,  

existence of any building or structure and a host of other factors bearing on  

the valuation of the land.   

25. The claimant made a claim of Rs.160/- per square yard in one bunch  

of  cases  and  Rs.200/-  per  square  yards  in  the  other  bunch.   Before  the  

learned District Judge, the first bunch of cases, as many as 22 deeds of sale  

were taken into consideration.  The question is as to whether the acquired  

land had any building potentiality.  Upon consideration of various deeds of  

sale including the one dated 31.5.1983 involving 192½ square yards, it was  

opined that the valuation thereof would be Rs.155/- per square yard.  For  

arriving at the aforementioned figure, the learned Reference Judge took into  

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consideration  a  circular  letter  issued  by the  State  of  Uttar  Pradesh  itself  

directing  that  the  Land  Acquisition  Officers  “that  the  highest  sale  deed  

should  be  made  as  the  basis  for  determination  of  the  market  value”.  

Reliance was also placed on a decision of this Court in Hindustan Oil Mills  

Ltd. & Anr. v. Special Deputy Collector (Land Acquisition) [AIR 1990 SC  

731] wherein it has been held that the value of the land doubles in five years  

to  opine  that  the  increase  of  20%  per  year  is  a  normal  phenomenon.  

However, the Land Acquisition Judge give only 10% increase per year for  

the aforementioned purpose.   

26. However, in the second bunch of cases while taking into consideration  

25 deeds of sale, the learned Land Acquisition Judge took into consideration  

the deed of sale  dated 3.9.1984 involving 50 yards of land wherefor  the  

amount of compensation fixed was Rs.10,327/-, i.e., Rs.206.50 p. per square  

yard.  The Court, however, notice that in respect of the said sale deed an  

agreement was entered into by and between the parties in the year 1981 and  

not in 1983 as noticed by the High Court at 10% increase per year for a  

period of  three years,  the learned Reference Judge held that  the flat  rate  

would come to Rs.128 per square yard.  From the said amount, however,  

30% was deducted as the lands in question were agricultural lands and on  

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that bases the market value at the rate of Rs.55/- per square yard was found  

to be sufficient.  The High Court relied upon a deed of sale dated 27.7.1983  

involving  Khasra  No.1354  and  1355  rejected  the  deed  of  sale  deed  

27.7.1982.  Relying on a deed of sale dated 2.6.1983 in terms whereof 1  

Biswas 9 Biswasin and 15 Kachhwansi land pertaining to Khasra No.1054  

and  1064  was  sold  for  a  sum  of  Rs.1,35,000/-,  the  Land  Acquisition  

Collector  opined  that  the  market  value  of  the  land  would  come  to  

Rs.1,81,512.60 p. per bigha, i.e., at the rate of 9.62 p. circle rate.  It was  

held:

“Now only sale deed No.423 remained.  This sale  deed is executed on 2.6.83.  From this 1 Biswa, 9,  Biswasi, 15 Kachwasi land of Khasra No.1054 and  1064  was  sale  for  135000.   This  sale  deed  is  outside  the  area  of  municipality  and it  is  sell  in  bigha,  biswa  and  biswasi  which  comes  to  1,81,512.60  paise  per  bigha  at  the  rate  of  9.62  paise  circle.   This  sale  deed  is  similar  to  the  acquired land.  But the circle rate of this land is  suitable to amend according to the circle rate of the  acquired  land  which  is  suitable  and  justified  to  select this.  The acquired land is of two types i.e.  Dakar  Dayam  Khakhi  whose  circle  rate  is  3.19  paise and dakan doyam Awi whose circle rate is  4.37 paise.  On the basis of selected sale deed at  the rate of Rs.3.19 circle rate it comes to 60,189.72  and at  the rate of  Rs.4.37 it  comes to 82,454.26  which is right and justified.  The compensation of  the acquired and estimated to 64,59,429.63 which  is payable to the land owner.”

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27. The High Court, however, while rejecting all the other deeds of sale  

opined that reliance should be placed on the deed of sale dated 2.6.1983 in  

terms  whereof  the  value  of  the  land  was  determined  at  Rs.58.11  p.  per  

square yard.  Opining, however, that the Special Land Acquisition Officer  

was not justified in reducing the compensation on the basis of fertility of the  

soil and the circle rate, the High Court upon adding 10% increase to the said  

road held that the net rate would come to Rs.63.92 p. per square yard, i.e.,  

Rs.64/- per square yard.   

28. It was furthermore held that the building potentiality would not be a  

relevant  factor  for  calculating  the  market  value  of  the  land.   Building  

potentiality of land, in our opinion, is a relevant factor.  National Thermal  

Power Corporation intended to set up an industry.  For the said purpose, they  

have built up a large number of offices quarters.

29. Submission of Mr. Dwivedi that market value of the land should not  

have  been determined  on square  yard  basis  may not  be  entirely  correct.  

Some of the landholders have very small holdings.  Even the High Court, as  

noticed  hereinbefore,  determined  the  valuation  on  that  basis  only.   As  

noticed  hereinbefore,  most  of  the  deeds  of  sale  are  in  respect  of  small  

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holdings.  Even the deed of sale dated 2.6.1983 involves  land measuring 1  

Biswas,  9  Biswasin and 15 Kachhwansi.   One Biswa is  equal  to  151.25  

square  yards;  one  Biswasi  is  equal  to  7.5625  square  yards;  and  one  

Kachwasi is equal to 0.378 square yards.  Calculating in terms of square  

yards, it is about 224.98 square yards.  The Reference Judge relied upon a  

deed of sale which involved transfer of 190 square yards.  If the 1983 deed  

of sale is to be taken into consideration, there is no reason as to why the  

deed of sale dated 2.6.1983 whereupon the learned Reference Judge placed  

reliance was kept out of consideration.  As indicated hereinbefore, the High  

Court  has  without  any  valid  and  adequate  reason  refused  to  take  into  

consideration a large number of deeds of sale which were relevant for the  

purpose  of  arriving  at  the  amount  of  compensation  upon  taking  into  

consideration the market value of the land.

30. Mr. Dwivedi places strong reliance upon a decision of this Court in  

Rao Narain  Singh (Dead) By Lrs. v.  Union of  India [(1993) 3  SCC 63]  

wherein it was held :

“Building  potentiality  of  the  acquired  land,  claimed to be possessed by the acquired land, can  assume no significance in the instant case as ‘the  comparable sales method’ of valuation of land is  resorted  to  by  the  High Court.   Such method  is  resorted to, as the acquired land was found to be  

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comparable  in  its  essential  features  with  land(s)  respecting which evidence of certain sale deed(s),  was  produced.   Hence,  the  contention  of  the  learned counsel for the appellant raised to establish  that the acquired land had building potentiality at  the  time  of  its  acquisition,  need  not  engage  our  consideration.”

31. No legal principle has been laid down therein.  This Court had not  

declared  the  law that  building  potentiality  is  an  irrelevant  consideration.  

This case has some special features.  The acquired lands although pertain to  

the administrative jurisdiction of Gaon Sabha, enough evidence had been  

placed on record to show that the entire area is commonly known as Murad  

pura area.  On the one side of the road is Gaon Sabha and on the other side  

of the road is the municipality.  We assume that that make some difference  

but then the difference is not such which would lead us to a conclusion that  

the said factor should not be taken into consideration at all.

32. Reliance has also been placed by Mr. Dwivedi on a decision of this  

Court in  Viluben Jhalenjar Contractor (Dead) by LRs. v.  State of Gujarat  

[(2005) 4 SCC 789].  In that case, the lands in question were acquired only  

because they would remain submerged under water  and,  thus,  would not  

have any potential value.  It is only in the aforementioned context this Court  

opined  that  the  purpose  for  which  the  lands  were  acquired  would  be  a  

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relevant consideration.  In that case, the area was not developed at all.  No  

facility like internal roads, drainage, etc. was available.   

There may not be any quarrel with the proposition that circulars of the  

State Government that highest sale deed should be taken into consideration  

for determination of the fair market value of the land by itself may not be  

decisive insofar as the doctrine of compatibility by reason thereof would be  

given a complete go by.   But when comparable exemplars are brought on  

record,  the  one carrying the  highest  market  value amongst  them may be  

followed.  We, therefore, are of the opinion that the determination of market  

value at the rate of Rs.115/- per square yard as arrived at by the High Court  

cannot be held to be on a higher side.  

33. We,  however,  are  of  the  opinion  that  there  was  no  reason  for  the  

learned Reference Judge to determine the market value of the land in the  

other bunch of cases at the rate of Rs.155/- per square yard.  The market  

value of the land of both the bunch of cases is determined at Rs.115/- per  

square yard.   

34. Civil  Appeal  Nos.6230-6251,  6300,  6301-6321  of  2002  are,  thus,  

allowed with costs and Civil Appeal Nos. 6253-6299 of 2002 are dismissed  

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as  not  pressed  for.   Counsel’s  fee  assessed  at  Rs.50,000/-  in  each  case  

payable by National Thermal Power Corporation.   

35. Before parting, however, we may notice that National Thermal Power  

Corporation  had  given  an  undertaking  before  the  High Court.   The  said  

amount  has  not  yet  been  paid.   The  amount  of  compensation  even  as  

determined by the High Court has not been paid.  It is, thus, expedient that  

the  amount  of  compensation  would  be  paid  to  the  land  owners  as  

expeditiously as possible.

……………………………….J. [S.B. Sinha]

..…………………………..…J.  [Cyriac Joseph]

New Delhi; July 16, 2009

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