THAKUR KULDEEP SINGH(D) THR. LR. Vs UNION OF INDIA .
Case number: C.A. No.-008636-008636 / 2002
Diary number: 63261 / 2002
Advocates: LAKSHMI RAMAN SINGH Vs
D. S. MAHRA
REPORTABLE IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8636 OF 2002
Thakur Kuldeep Singh (D) Thr. L.R. & Ors. .... Appellant (s)
Versus
Union of India & Ors. .... Respondent(s)
WITH
CIVIL APPEAL NO. 8637 OF 2002
Union of India & Ors. …. Appellant(s)
Versus
Thakur Kuldeep Singh (D) Thr. L.R. & Ors. …. Respondent(s)
J U D G M E N T
P. Sathasivam, J.
1) These appeals are directed against the impugned final
judgment and order dated 18.09.2001 of the Division
Bench of the High Court of Delhi at New Delhi in R.F.A.
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No. 166 of 2000 whereby the High Court allowed the
appeal of the claimants enhancing the compensation
payable to them for acquiring their land @ Rs.3000/- per
sq. yds. along with solatium @ 30% and interest @ 9% p.a.
for a period of one year from the date of taking possession
by the Collector and thereafter @ 15% p.a. till date of
payment of compensation and held that the appellants
are entitled to additional amount under Section 23(1-A) of
the Land Acquisition Act, 1894 (hereinafter referred to as
“the Act”) @ 12% p.a. from the date of notification under
Section 4 of the Act till the date of award or taking over
possession by the Collector.
2) Dissatisfied with the above compensation awarded by
the High Court, the appellants-claimants have preferred
Civil Appeal No. 8636 of 2002 praying for Rs.6000/- per
sq. yd. and the respondents-Union of India filed Civil
Appeal No. 8637 of 2002 against the enhancement of
compensation by the High Court from Rs.550/- per sq. yd.
to Rs. 3000/- per sq. yd. For convenience, we shall refer
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claimants-land owners as appellants and Union of India
as respondents.
3) Brief facts in a nutshell are as under:
The appellants had purchased the property situated in
Karol Bagh, subject matter of the present acquisition
containing an area of approximately 2475 sq. yds. from
the Ministry of Rehabilitation, Government of India in the
year 1961 in a public auction for a consideration of
Rs.1,61,000/-. By notification dated 21.10.1981, Ministry
of Works and Housing (Land Division), Government of
India, revised the schedule of market rates of land in
different areas of Delhi/New Delhi w.e.f. 01.04.1981
dividing entire Delhi/New Delhi in VIII Groups. Ajmal
Khan Road and Gaffar Market falls within Group-III and
the rate for residential plots was fixed @ Rs.2000/- per sq.
mt. whereas for commercial plots, it was fixed @
Rs.6000/- per sq. mt. The said notification was issued
with the concurrence of the Ministry of Finance. On
09.05.1983, a notification under Section 4 of the Act was
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issued by the Land & Building Department expressing its
intention to acquire an area of 4952 sq. yds. of land
situated in Karol Bagh for a public purpose, namely, for
Joshi Memorial Hospital. The appellants herein filed
their objections claiming suitable residential or
commercial plot of not less than 500 sq. yds., not far away
from the claimant’s plot and also claimed compensation of
their acquired land @ Rs.6000/- per sq. yd. in addition to
a sum of Rs.1,53,293/- for superstructure standing on the
acquired land. The Land Acquisition Collector, Delhi vide
Award No. 7/86-87 dated 30.05.1986, determined the
market value of the acquired land @ Rs.550/- per sq. yd.
and, in addition, awarded solatium @ 30% and an
additional amount under Section 23(1-A) of the Act @ 12%
p.a. w.e.f. 09.05.1983. Dissatisfied with the said Award,
the appellants-claimants filed a reference under Section
18 of the Act before the Civil Court, Delhi. The Additional
District Judge vide order dated 19.11.1999, dismissed the
same holding that the compensation awarded by the Land
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Acquisition Collector is quite adequate. Aggrieved by the
said order, the appellants-claimants filed R.F.A. No. 166 of
2000 under Section 54 of the Act before the High Court.
The Division Bench of the High Court by its impugned
judgment allowed the same and enhanced the
compensation @ Rs.3000/- per sq. yd. with all other
statutory benefits.
4) According to the appellants, that their plot was
surrounded in the north by a commercial property,
namely, Jain Publishing House, in the south by Plot No.
875 which was also acquired by the impugned award for
the same public purpose, namely, construction of Joshi
Memorial Hospital, on the remaining half there were
commercial shops, in the east there was Joshi Road and
in the west of which was East Park Road and Ajmal Khan
Road. In other words, according to the appellants, the
entire area surrounding the plot in question as on the
date of Section 4 (1) notification was commercial and that
the plot had tremendous potential of being used for
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commercial purposes. It is also pointed out that adjacent
commercial areas are Model Basti, Ajmal Khan Road and
Faiz Road. They placed further materials to show that all
amenities such as water, telephone, electricity and roads
were available to the acquired land much prior to the
notification issued under Section 4 (1) of the Act. We have
already referred to the fact that the plot of the land was
purchased by the appellants from the Ministry of
Rehabilitation, Government of India in the year 1961 for a
consideration of Rs.1,61,000/-.
5) The Land Acquisition Collector, while fixing
compensation, considered three sale transactions. The
details as stated in the Award No. 7/1986-87 are as
follows:-
Sl.No. Name of Year Total Area Total Price Average per Paid for the Sq. yds Property
1. 1980-1981 203 sq.yds Rs.1,02,000 Rs.502/-
2. 1981-1982 257 sq.yds Rs.1,70,000 Rs.664/-
3. 1982-1983 463 sq.yds Rs.1,94,375 Rs.419/-
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Taking note of the average price paid for the property
transactions for the last three years and the area involved
as well as other circumstances, the Land Acquisition
Collector passed an award fixing Rs.550/- per sq. yd as
the market value for the land under acquisition. Though
he fixed compensation for other structures etc., in view of
the fact that the appellants are concerned about the
market value of the plot, there is no need to consider
those aspects.
6) Sections 23 and 24 of the Act speak about the
matters to be considered and to be neglected in
determining compensation. Let us consider whether the
appellants are entitled to higher compensation than that
of the one fixed by the High Court or Union of India is
justified in seeking reduction of the market
value/compensation for the acquired land. While fixing
compensation, it is the duty of the Land Acquisition
Collector as well as the Court to take into consideration
the nature of the land, its suitability, nature of the use to
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which the lands are sought to be acquired on the date of
notification, income derived or derivable from or any other
special distinctive feature which the land is possessed of,
the sale transactions in respect of land covered by the
same notification are all relevant factors to be taken into
consideration in determining the market value. It is
equally to consider the suitability of neighbourhood lands
as are possessed of similar potentiality or any
advantageous features or any special characteristics
available. The Land Acquisition Collector as well as the
Court should always keep in their mind that the object of
assessment is to arrive at a reasonable and adequate
market value of the land. While doing so, imagination
should be eschewed and mechanical assessment of
evidence should be avoided. More attention should be on
the bona fide and genuine sale transactions as guiding
star in evaluating the evidence. The relevant factor would
be that of the hypothetical willing vendor would offer for
the land and what a willing purchaser of normal human
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conduct would be willing to buy as a prudent man in
normal market conditions prevailing in the open market in
the locality in which the acquired lands are situated as on
the date of notification under Section 4(1) of the Act. In
other words, the Judge who sits in the armchair of the
willing buyer and seek an answer to the question whether
in the given set of circumstances as a prudent buyer he
would offer the same market value which the court
proposed to fix for the acquired lands in the available
market conditions. The market value so determined
should be just, adequate and reasonable.
7) Keeping the above principles in mind, let us consider
the case of both the parties. The appellants in order to
sustain their claim examined one Labh Singh Chane,
Under Secretary (Land), Ministry of Urban Affairs and
Employment, Nirman Bhawan, New Delhi as PW-1 and the
Circular issued by the Government of India, Ministry of
Works and Housing (Land Division) New Delhi on
21.10.1981 which was marked as Ex. PW 1/1. Inasmuch
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as the appellants heavily relied on the above circular
before considering the evidence of the officer, it is useful to
analyze the said circular:
“No.J-22011/8/80 LD (DOI) Government of India
Ministry of Works & Housing (Lands Division)
****** New Delhi, the 21st October, 1981
To 1. The Land & Development Officer, Nirman Bhawan, New Delhi. (5 copies) 2. The Vice-Chairman, Delhi Development Authority, Vikas Minar, New Delhi. (5 copies)
Subject: Schedule of market rates of land in different areas of Delhi/New Delhi.
***** Sir,
The Government of India have had under consideration the question of revision of the schedule of market rates of land in Delhi/New Delhi w.e.f. 1.4.1981. The land rates have now been revised as shown in the schedule annexed to this letter and shall be adopted for all purposes except for (i) hotels, (ii) cinemas and (iii) for the purpose of recovery of unearned increase due to the lessor, while granting permission for sale, in respect of residential leases measuring 100 sq. yds. (83.613 sq. metres) or less only.
2 (a). The market rates for commercial purposes for Group I & II are based on an FAR of 250, for Group III on FAR of 150 and for other Groups on existing FARs. (b) Residential rates are based on the existing FAR prescribed for various areas.
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NOTES: These rates will be reduced or increased proportionate to the reduction or increase in the FAR.
3. For multi-storeyed group housing by co-operative group housing societies 1½ times the residential rate and by others twice the residential rate will apply up to an FAR of 100. The rates will be increased corresponding to the increase in FAR.
4. For the purpose of calculating and recovering lessor’s share of unearned increase, while granting sale permissions, in respect of the residential leases measuring 100 sq. yds. (83.613 sq. metres) or less, the land rates laid down in this Ministry’s letter No. J- 22011/1/75-L.II (i) dated 21st June 1979 will be applicable for a further period of two years from 1.4.1981. i.e. till 31.3.1983.
5. In so far as hotel and cinema sites are concerned, the case should be specifically considered in consultation with the Ministry of Finance.
6. For any locality not covered by the schedule annexed hereto, the rates for comparable areas will be applied.
7. These rates are effective from 1st April, 1981 to 31st March, 1983.
8. The review of these rates should be taken up by the Land and Development Officer well before the date of expiry.
9. This issues with the concurrence of the Ministry of Finance.
10. It may be noted that the revised rates are for area expressed in square metres.
Yours faithfully, Sd/-
(R.Krishnaswamy) Under Secretary (Lands)”
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Schedule of Market Rates S.No. Name of the locality Residential Commercial 1 2 3 4
Group I Xxx xxxx Group II Xxx xxxx Group III
1. Ajmal Khan Road 2,000 6,000 2. Gaffar Market 2,000 6,000 3. Khan Market 2,000 6,000 Xxx xxxx 14. Karol Bagh 2,000 6,000 Xxx xxxx Xxx xxxx
Group IV Group V
Xxx xxxx 6. Old and New Rohtak Road 1,200 2,400
Group VI Xxx xxxx Group VII Xxx xxxx Group VIII Xxx xxxx”
8) Before considering the acceptability or relevancy of
the circular, let us examine the evidence of PW-1 - Labh
Singh Chane, Under Secretary (Land) Ministry of Urban
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Affairs and Employment. His evidence in chief and cross-
examination are relevant which reads as under:-
“Labh Singh Chane, Under Secretary (Land) Ministry of Urban Affairs and Employment, Nirman Bhawan, New Delhi. On S.A.
I have seen Circulars dated 21.10.81 No. J- 22011/3/80-LD (DO1) copy of which is Ex. PW-1/1. We arrive at this conclusion after consulting Income-tax Department, L& DO, Delhi Admn. and DDA. Thereafter, we issue the circular. There is a committee which considers this Data and the recommendations are considered by the Government, Sanction of the Finance Ministry is taken and then we fix the rates. Xxxx xxxxx by Shri Krishan Kumar, for Union of India:
I was not a party to the above said proceedings or the conclusion arrived at by L & DO & and our department. I have no personal knowledge about this case. I have made the above statement on the basis of documents. I am not a party to the recommendations made by the Committee. The above said rates are primarily intended for the recovery of misuse charges, recovery of unearned increase and revision of ground rent in respect of Central Government properties. The Data is obtained on the basis of values recording in the Registered Sale-Deeds and Auction rates. I have no knowledge about the property in dispute. I cannot refer to any Sale-Deeds mentioned above. Xxxx by Shri S.C.Arora counsel for respondents No.2 & 3:
It is correct that I have never worked with Shri R.Krishnaswami, the then Under Secretary (Lands). It is correct that I cannot identify the signatures of Shri R. Krishnaswami, but I am deposing so on the basis of the record. The record produced by me today in the court is maintained by the office.
It is wrong to suggest that I have deposed falsely. RO & AC Sd/-
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1.12.98 ADJ”
9) According to PW-1, the valuation was fixed after
consulting Income-tax Department, L & DO, Delhi Admn.
and DDA. He has also deposed that there is a Committee
which considers the details and the recommendations are
considered by the Government and after sanction of the
Ministry of Finance, the Ministry of Urban Affairs and
Employment would fix the rates. In the cross-
examination, though he has admitted that he had no
personal knowledge, however, he has explained that the
details/figures in the circular dated 21.10.1981, have
been made on the basis of various
information/documents. He has also stated that the rates
provided in the circular are primarily intended for the
recovery of misuse charges, recovery of unearned increase
and revision of ground rent in respect of Central
Government properties. He has also informed that the
data was obtained on the basis of values shown in the
registered sale deeds and auctioned rates.
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10) It is not in dispute that the circular referred to by
PW-1 is for the purpose of recovery of unearned increase
while granting permission for sale in respect of residential
leases measuring 100 sq. yds or less. The rates
mentioned therein are effective from 01.04.1981 to
31.03.1983. In the schedule appended to the circular Sl.
No. 14 in Group III relates to Karol Bagh where the
acquired lands are situated. It further shows that if it is
residential plots, the value is to be fixed @ Rs.2,000/- per
sq. mt. and if it is commercial plots, the rate notified is @
Rs.6,000/- per sq. mt. Sl. No.6 in Group V which relates
to old and New Rohtak Road and as per the circular, the
residential value fixed is Rs.1,200/- per sq. mt. and
commercial value is Rs.2,400/- per sq. mt.
11) Mr. T.S. Doabia, learned senior counsel for the
respondents submitted that fixing market value on the
basis of ‘circle rates’ is not sustainable and in support of
the same, he relied on the decisions of this Court in Delhi
Development Authority vs. Bali Ram Sharma & Ors.
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(2004) 6 SCC 533, Union of India vs. Pramod
Gupta(Dead) by L.Rs. & Ors., (2005) 12 SCC 1 and
Ranvir Singh & Anr. Vs. Union of India , (2005) 12 SCC
59.
12) In DDA’s case (supra), this Court in view of the
market value fixed in the case of Karan Singh & Ors. vs.
Union of India, (1997) 8 SCC 186 and taking note of the
fact that acquisition of land under the same notification
without adverting ‘Government schedule of rates’ fixed the
market value as determined in Karan Singh’s case
(supra). In Pramod Gupta’s case (supra), this Court did
not approve the method of fixing market value based on
certain notifications issued by the Union of India in the
year 1965 which were meant for the residential plots. In
Ranvir Singh’s case (supra), the circle rates were not
followed in determining the market value.
13) We accept that in view of the purpose for which the
‘circle rates’ have been notified by the Ministry of Urban
Affairs and Employment, market value of a plot cannot be
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determined solely on the basis of the circle rates. On the
other hand, it cannot be ignored in toto. If
other materials are available, Government rates can also
be considered as corroborative evidence. The nature of the
land plays an important role. Likewise, market conditions
prevailing as on the date of notification are also relevant.
Sale price in respect of small piece of land cannot be the
basis for determination of market value of large stretch of
land.
14) It is also useful to refer the recent decision of this
Court in Lal Chand vs. Union of India & Another, JT
2009 (11) SC 490. A two-Judge Bench has held that the
circle rates relate to urban/city areas in Delhi and are
wholly irrelevant when the court has to decide the market
value in regard to land situated in a village on the
outskirts of Delhi. Based on this, learned counsel for the
appellants submitted that this Court has not completely
ignored the rates notified by the Government though it
cannot be applied to the area other than urban/city.
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15) It is clear from the above decisions and discussion
that merely on the basis of ‘circle rate’, market value for
acquired lands cannot be fixed but, at the same time, as
observed earlier, the locality and the prevailing
circumstances are relevant for determining the real value
of the land. We have adverted to the assertion of the
claimants about the proximity and various other attending
circumstances. It is seen from the evidence of PW-2,
Power of Attorney holder of the appellants that the
acquired plot was located in the midst of commercial
properties, had commercial potentiality and for similar
properties, the rates in the locality were not less than
Rs.6,000/- per sq. mtr. He tendered evidence and placed
documents Ex.PW-2/1 to PW-2/11 which includes Eicher
City Map. PW-2 has also highlighted that the plot was
located within the developed commercial hub of Karol
Bagh having all facilities. As rightly observed by the High
Court, the Reference Court overlooked the evidence on
record that after the property was purchased by the
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appellants in 1961, considerable development in and
around the area had taken place. The acquired property
was purchased by the appellants in the year 1961 and it
is not in dispute that the acquisition proceedings started
in the year 1983 i.e. after a period of 22 years from the
date of 4 (1) notification (9/5/1983). The High Court has
also relied on Ram Lal Bansiwal vs. Union of India &
Ors., R.F.A. No. 131/88, a decision of fixing market value
@ Rs.2320/- per sq. yard for commercial plots based on
the circle rates. When the appeal was carried to this
Court, by decision dated 17.02.1997, this Court enhanced
the amount of compensation to Rs.3,000/- per sq. yd by
observing that the land was located in a commercial hub
and was adjoining to a petrol pump. It is pointed out that
the said decision relates to Chowkri Mubarkabad being a
locality adjacent to Karol Bagh situated by the side of
main Rohtak Road. It is also demonstrated that the same
is in close proximity to Karol Bagh area and the plot in
question was located in the midst of Karol Bagh. Though
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in the award, the Land Acquisition Collector has
mentioned that the plot is 2 km. away from the
commercial area in the Karol Bagh admittedly, the very
same Joshi Memorial Hospital was running on the land
under acquisition since 1970-71 and the hospital was
paying rent to the pattedars/owners. This information
has been mentioned in the synopsis filed by the Union of
India in their Civil Appeal No. 8637 of 2002.
16) We have also verified the Delhi Government Map
survey of 1982. On going through the location as found in
the Government Map, the assertion of PW-1, an officer of
the Government, PW-2, Power of Attorney of the
appellants, various activities in and around the plot and
considering the fact that the Land Acquisition Collector
relied on the three property transactions relating to 1980-
81, 1981-82 and 1982-83 and not nearer to the date of
notification under Section 4 (1) i.e. 09.05.1983 and also of
the fact that even on the date of notification the very same
hospital i.e. Joshi Memorial Hospital was running on the
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land, we hold that even if we eschew ‘circle rate’, the
amount determined by the High Court is just, reasonable
and acceptable. For the same reasons and in the absence
of additional material, we are not inclined to increase the
market value as claimed by the claimants-appellants.
17) In the light of the above discussion, the appeals filed
by the claimants as well as the Union of India are
dismissed. No costs.
...…………………………………J. (P. SATHASIVAM)
...…………………………………J. (H.L. DATTU)
NEW DELHI; MARCH 8, 2010.
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