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PETITIONER: SMT. INDUMATI CHITALEY

       Vs.

RESPONDENT: GOVERNMENT OF INDIA & ANR.

DATE OF JUDGMENT01/11/1995

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. KIRPAL B.N. (J)

CITATION:  1996 AIR  531            1995 SCC  Supl.  (4) 219  JT 1995 (8)    63        1995 SCALE  (6)300

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Notification under Section 4(1) of the Land Acquisition Act, 1894  (for short, ‘the Act’) was published in the State Gazette on  October 26, 1960 acquiring an extent of 17 acres 57 cents  situated within  the Nagpur  Municipal limits  for establishment of grain godown by the Central Government. The Land Acquisition  Officer in  his award  under Section 11 on April 13, 1967 adopted market value to some lands @ 50 paise per sq.  ft. and  to some  on  49  paise  per  sq.  ft.  and determined   the    compensation   after    deducting    the developmental costs at Rs.2,28,134.91 and ultimately paid to the claimants  the total  compensation of  Rs.38,414.91.  On reference under  Section 18,  the senior  Civil Judge by his award and  decree dated  June 30, 1966 evaluated the land on two methods,  namely, as  an agricultural  land @ Rs.5,000/- per acre  or alternatively  as a  developed area  and  after deducting  the  developmental  costs  determined  the  total compensation   including    solatium   and    interest    at Rs.1,22,250/-. On  appeal, the High Court in F.A. Nos.80/66, and 76/66,  both filed  by the  appellant as  well as by the State, by  judgment and  decree dated August 7, 1978 adopted that the  market value  of the land would be at 90 paise per sq. ft.  but deducted the developmental costs at Rs.18,000/- per acre  of the  total extent  of  the  land  and  directed payment of  the balance  amount after  deducting the  amount already paid,  of the  sum of Rs.48,694.51. Thus this appeal by special leave.      It is  contended by  Sri  U.R.  Lalit,  learned  senior counsel for  the appellant  that the High Court having fixed the market  value @  90 paise per sq. ft. committed error of law in  deducting Rs.18,000/-  per acre  on the entire total extent  of   the  land   of  17.57  acres  and  thereby  the compensation under  section 23(1)  which was legally due and payable to  the appellant  was  substantially  reduced.  The principle adopted  by the High Court is, therefore, vitiated

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by clear  error of  law warranting  interference. It is seen that admittedly  the lands  remained to be agricultural land even  though  situated  within  the  limits  of  the  Nagpur Municipal Corporation.  The attempt of the appellant to have them converted  into non-agricultural  lands  was  rejected. Thereby,  the  lands  continued  to  be  agricultural  lands without being  developed for building purposes. The question is what  would be  the principle to be adopted in this case. This  Court   has  repeatedly   depricated  the   method  of evaluating the  compensation on  the basis  of square  foot. When a  large extent  of 17.57  acres of land is offered for sale by  private negotiation,  would any  prudent  purchaser negotiate to  purchase lands  put for sale in open market at sqare foot basis? No one would come forward to purchase such a vast  extent of land on square foot basis. It is seen that the lands  are admittedly  agricultural lands. Therefore, no one would prefer to purchase the agricultural land on square foot basis. The Principle of determining the compensation on square foot basis is per se illegal.      The question  thus is  what  would  be  the  reasonable market value  when the  lands are determined as agricultural lands. Though the learned Government pleader appeared before the Reference  Court contended that the market value was Rs. 1,500/- per  acre, the  Court did not accept that contention and held  that the prevailing market value as on October 26, 1960 was  @ Rs.  5,000/- per acre which was also accepted by the High  Court. It would thus be seen that if the lands are sold in  the open  market as an agricultural land, they were capable of  sale @ Rs. 5,000/- per acre. The Reference Court had determined  market value  as agricultural  lands  @  Rs. 90,000/-. Though  alternative method had been adopted to use it as plots for the building purposes which also was adopted by the  High Court,  we think  that the  alternative  method adopted by  the Reference Court as well as by the High Court is not  correct on  the facts  of this case. Accordingly, we hold that  the appellant  would be  entitled to  the  market value of  the land  for a total sum of Rs. 90,000/- together with statutory  rate of interest @ 4% per annum and also 15% solatium on the enhanced compensation under Section 23(2) of the Act.  The appeals  are accordingly  allowed to the above extent, setting  aside the award and decree of the Reference Court as  well as  of the  High Court.  The decree  shall be drawn accordingly  and the  appellant shall be paid the said amount.      The appeals are allowed with costs throughout.