UDHO DASS v.

STATE OF HARYANA & ORS. (Civil Appeal No. 3677 of 2010)

APRIL 21, 2010 [Harjit Singh Bedi and J.M. Panchal, JJ.]

2010 (8) SCR 900

The Order of the Court was delivered

O R D E R

1. Permission to file SLPs is granted.

2. Delay condoned in filing substitution applications.

3. Applications for substitution are allowed.

4. Delay condoned in filing the special leave petitions.

5. Leave granted.

6. Vide Notification dated 17th May, 1990 under Section 4 of the Land  

Acquisition  Act,  1894,  (hereinafter  called  `The  Act')  162.5  acres  of  land  

situated in village Patti Musalmanan was notified for setting up of a housing  

project in Sector 12, Sonepat. This Notification was followed by a declaration  

under Section 6 of the Act on 16th May 1991. The Collector rendered his  

Award on 12th May 1993 awarding a sum of  Rs.  2,00,000/-  (Rupees two  

lakhs) per acre as compensation for the entire land.

7.  On a  reference  under  Sec.  18  of  the  Act  to  the  Additional  District  

Judge, Sonepat, the compensation was enhanced to Rs.125/- per sq. yard for  

the land behind the E.C.E. factory situated away and on the left side of the  

Sonepat  Bahalgarh  road  and  Rs.150/-  per  square  yard  on  the  right  side  

abutting the aforesaid road. In arriving at these different figures the Reference  

Court  held that  the land on the left  side did not  abut  the road and it  had  

therefore  less  potential  value  vis-a-vis.  the  land  on  the  right  side  which  

touched the road.

8. The High Court in first appeal further enhanced the compensation from  

Rs.125/- to Rs.135/- for land on the left side and to Rs.160/- from Rs.150/- on  

the right side on the principle applied by the Reference Court. The present set  

of appeals at the instance of the landowners have been filed impugning the  

judgments of the courts below.

9. We have gone through the record and have heard the learned counsel  

for the parties at length.

10.  It  has  been  submitted  by Mr.  A.K.  Srivastava,  the  learned  senior  

counsel in most of the appeals, that the appellants were entitled to take the  

Award for  the acquisition in village Jamalpur  Kalan which pertained to an  

acquisition  of  the  year  1992,  and  which  had  led  to  a  compensation  of  

Rs.250/-  per  square  yard,  as  the  basis  for  the  determination  of  the  

compensation in the present case as well as the land of Jamalpur Kalan had  

a common boundary with the land acquired behind the E.C.E. factory with a  

small deduction in the price as the present acquisition was of the year 1990.  

In the alternative he has submitted that the compensation ought to have been  

settled on the basis of the sale instances exhibits P.2 to P.14 which showed a  

substantial increase yearwise from Rs.300/- per sq. yd in 1984 (Ext. P.2) to  

Rs. 600/- in 1989 (Ext. P.14). He has also submitted that as the land had  

been notified for  the purpose of  a housing project  no distinction could be  

made between the land abutting the main road and that which was slightly  

away and the belting principle applied by the District Judge as well as the  

High Court  was not called for.  For this argument the learned counsel has  

placed reliance on P. Rama Reddi and Others vs. Land Acquisition Officer,   

Hyderabad Urban Development  Authority,  Hyderabad and others (1995) 2  

SCC 305. It has also been submitted that though the potentiality of the land  

had admittedly been noted by the District Judge and the High Court but the  

full potential of land had not been appreciated or recognized and as such it  

was open to  this  Court  to  reappraise the evidence and to arrive at  a fair

assessment on this aspect, as the compensation proceedings started in the  

year 1990, were still continuing.  

11. Mr. P.S. Patwalia, the learned senior counsel for some of the other  

claimants has supplemented the arguments made by Mr. Srivastava and has  

also  placed reliance on the award in  the case of  village Jamalpur  Kalan.  

Some of the other counsel have also raised certain issues but as they are  

substantially covered by the submissions noted above we need not refer to  

them.

12.  Mr.  Shakil  Ahmed,  the  learned  counsel  appearing  in  SLP(C)  No.  

18312/2008  has  further  pointed  out  that  the  proper  compensation  for  the  

building and trees had not  been correctly awarded and the compensation  

under these heads needed to be substantially enhanced.

13. The arguments raised by the learned counsel for the claimants have  

been controverted by Mr. Govind Goel, the learned counsel appearing for the  

beneficiary-respondents.  He has  submitted  that  the  Award  in  the  case  of  

Jamalpur Kalan could not be taken into account for the primary reason that it  

pertained to an acquisition of 1992 whereas the present one was of 1990 and  

the District Judge as well as the High Court had fully recognized the potential  

of  the  land  and  had  accorded  compensation  on  that  basis.  He  has  also  

submitted that the reliance by the claimants on the sale instances Ext. P.2 to  

P.14 was misplaced as they pertained to very small areas of one Biswa (50  

sq.  yd)  and  the  other  sale  instances  put  on  record  by  the  claimants  

themselves (Ext.p.15 and P.16) pertaining to two sales made on 28th April,  

1989 for 4400 square yards at Rs.120/- per square yard and P.16 for 1600  

square yards at Rs.122/- per square yard had in fact been accepted by the  

Courts below with a marginal increase towards the potential of the acquired  

land. It has also been submitted that in the light of the fact that these were  

sale instances pertaining to this very village that is Patti Musalmanan there  

was absolutely no justification in going to the Award pertaining to Jamalpur

Kalan for determining the compensation. He has finally submitted that belting  

in the facts of the case was fully justified and in this connection has placed  

reliance on Executive Director Vs. Sarat Chandra Bisoi and Another (2000) 6  

SCC 326)

14. We have heard the learned counsel for the parties and gone through  

the record. The location of the land in order to appreciate its potential for the  

purpose of compensation has first to be understood.. Admittedly, the land is  

situated within the municipal limits of Sonepat which is a district headquarter  

adjoining Delhi and within the National Capital Region. The distance between  

Bahalgarh,  a small  township on the Grand Trunk Road, National Highway  

No.1, built five centuries ago by Sher Shah Suri (and arguably India's most  

important and strategic highway and the lifeline between the rest of India and  

the north and northwest), and Sonepat is 7 km., as per the indication on the  

National Highway itself. The acquired land is situated on both sides of the  

road leading from Bahalgarh to Sonepat with some portions touching the road  

side and some portion slightly away and situated behind the ECE factory. It  

is,  however,  the admitted position and (we have seen the location on the  

maps that  have been produced before  us)  that  the  land behind the  ECE  

factory adjoins the area of village Jamalpur Kalan which had been acquired in  

the year 1992 and which the appellants claim should be made the basis for  

determining  compensation  in  the  present  matter  as  well.  It  must  also  be  

noticed that the enormous development from the Delhi border alongside the  

Grand Trunk Road and well beyond the Bahalgarh – Sonepat bifurcation is  

now a matter for all to see and we have seen this on the maps produced in  

Court  as  well,  as  huge  residential  and  commercial  areas  have  been  

developed with a mind boggling increase in the price of agricultural land in the  

last 15 or 20 years. While dealing with the question of the potential value of  

the land acquired this Court in P. Rama Reddy's case (supra) observed that  

several matters had to keep in mind; they being (and we quote),

“(i)  the  situation  of  the  acquired  land vis-a-vis  the  city  or  the  town or  

village  which  had  been  growing  in  size  because  of  its  commercial,  

industrial,  educational,  religious  or  any  other  kind  of  importance  or  

because of its explosive population;  

(ii) the suitability of the acquired land for putting up the buildings, be they  

residential, commercial or industrial, as the case may be;

(iii)  possibility  of  obtaining  water  and  electric  supply  for  occupants  of  

buildings to be put up on that land;

(iv)  absence of  statutory impediments or the like for  using th acquired  

land for building purposes;

(v)  existence  of  highways,  public  roads,  layouts  of  building  plots  or  

developed residential extensions in the vicinity or close proximity of the  

acquired land;

(vi) benefits or advantages or educational institutions, health care centres,  

or  the  like  in  the  surrounding  areas  of  the  acquired  land  which  may  

become available to the occupiers of buildings, if  built  on the acquired  

land;  

(vii) and lands around the acquired land or the acquired land itself being  

in demand for building purposes, to specify a few.

15. The material to be so placed on record or made available in respect of  

the said matters and the like, cannot have the needed evidentary value for  

concluding that  the acquired land being used for  building purposes in  the  

immediate  or  near  future  unless  the  same  is  supported  by  reliable  

documentary evidence,  as far  as the circumstances permit.  When once a  

conclusion is reached that there was the possibility of the acquired land being  

used for putting up buildings in the immediate or near future, such conclusion  

would be sufficient to hold that the acquired land had a building potentiality  

and proceed to determine its market value taking into account the increase in  

price attributable to such building potentiality.”

16. As already indicated above, these are the broad factors that we too  

have kept in mind.

17. Although, in the present matter, sale instances around or near abouts  

the  date  of  Notification  of  the  present  acquisition  are  available  yet  these  

cannot justify or explain the potential of a particular piece of land on the date  

of acquisition as the potential can be recognized only some time in the future  

and it is open to a landowner claimant to contend that the potential can be  

examined first at the time of the Section 18 Reference, the first Appeal in the  

High Court or in the Supreme Court in appeal as well. We must also highlight  

that Collectors, as agents of the State Government, are extraordinarily chary  

in  awarding compensation and the land owners have to fight  for  decades  

before  they  are  able  to  get  their  due.  We  take  the  present  case  as  an  

example.  The land was notified for acquisition in May 1990.  The collector  

rendered his award in May 1993 awarding a sum of Rs.2,00,000/- per acre.  

The  Reference  Court  by  its  award  dated  January  2001  increased  the  

compensation to Rs.125 per square yard for the land of the road behind the  

ECE factory and Rs.150 per square yard for the land abutting the road which  

would  come  to  Rs.6,05,000/-  and  Rs.7,26,000/-  respectively  for  the  two  

pieces of land. This itself is a huge increase vis-a-vis the Collector's award.  

The High  Court  in  First  Appeal  by  its  judgment  of  24th  September  2007  

enhanced  the  compensation  for  the  two  categories  to  Rs.135  and  160  

respectively making it Rs.6,53,400/- and Rs.7,74,400/-. In other words, this is  

the compensation which ought to have been awarded by the Collector at the  

time of his award on 12th May 1993. This has, however, come to the land  

owner for the first time as a result of the judgment of the High Court which is  

under challenge in this appeal; in other words, a full 17 years from the date of  

Notification under Section 4 and 14 years from the date of the award of the  

Collector on which date the possession of the land must have been taken  

from the landowner. Concededly, the Act also provides for the payment of the  

solatium, interest and an additional amount but we are of the opinion, and it is

common knowledge, that even these payments do not keep pace with the  

astronomical rise in prices in many parts of India, and most certainly in North  

India, in the land price and cannot fully compensate for the acquisition of the  

land and the payment of the compensation in driblets. The 12% per annum  

increase which Courts  have often  found to  be adequate  in  compensation  

matters  hardly  does  justice  to  those  land  owners  whose land  have  been  

acquired as judicial notice can be taken of the fact that the increase is not 10  

or 12 or 15% per year but is often upto 100% a year for land which has the  

potential of being urbanized and commercialized such as in the present case.  

Be that as it may, we must assume that the landowners were entitled to the  

compensation  fixed  by  the  High  Court  on  the  date  of  the  award  of  the  

Collector and had this amount been made available to the landowners on that  

date, it  would have been possible for them to rehabilitate their holdings in  

some other place. This exercise has been defeated for the simple reason that  

the payment of compensation has been spread over almost two decades. In  

this view of the matter, we are of the opinion that a landowner is entitled to  

say that if the compensation proceedings continued over a period of almost  

20 years as in the present case, the potential of the land acquired from him  

must also be adjudged keeping in view the development in the area spread  

over the period of 20 years if the evidence so permits and cannot be limited to  

the  near  future  alone.  We,  therefore,  feel  that  in  the  circumstances,  the  

appellants herein were fully entitled to say that the potential of the acquired  

land had not been fully recognized by the High Court or by the Reference  

Court. We must add a word of caution here and emphasize that this broad  

principle would be applicable where the possession of  the land has been  

taken pursuant to proceedings under an acquiring Act and not to those cases  

where land is already in possession of the Government and is subsequently  

acquired.

18. There is another unfortunate aspect which is for  all  to see and to  

which the Courts turn a Nelson's eye and pretend as if the problem does not

exist. This is a factor which creates an extremely grim situation in a case of  

compensation based exclusively on sale instances. This is the wide spread  

tendency to under value sale prices. The provision of Collector's rates has  

only marginally corrected the anomaly, as these rates are also abnormally  

low and do not reflect the true value. Where does all this leave a landowner  

whose land is being compulsorily acquired as he has no control over the price  

on which some other landowner sells his property which is often the basis for  

compensation?

19. We are, therefore, of the opinion that the above sale instances relied  

upon by the parties do not accurately reflect the potential of the acquired land  

and the award of the High Court in the case of Jamalpur Kalan granting a  

sum of  Rs.250/-  per  square  yard  as  compensation  is  the  minimal  proper  

base.

20. Mr. Goyal has, however, submitted that the belting system ordered by  

the reference and the High Court was the proper one in the circumstances,  

more particularly as it was well known that land alongside the road had more  

value vis.a.vis. the land away therefrom. He has, accordingly, submitted that  

the land behind the ECE factory which was not abutting the road needed to  

be given lower compensation. Mr. Goyal's reliance on Sarat Chandra's case  

for this argument is however to no avail. In this matter, agricultural land which  

had no potential for urbanization and commercialization had been acquired  

and  it  was  on  that  basis,  this  Court  held  that  the  belting  system  was  

permissible. In the case before us, admittedly the land was acquired in the  

year 1990, had great potential value, and has been completely urbanized as  

huge  residential  complexes,  industrial  areas  and  estates  and  a  huge  

education city have come up in the last ten or fifteen years. Moreover, insofar  

land which is to be used for residential purposes is concerned, a plot away  

from the main road is often of more value, as the noise and the air pollution  

alongside the arterial roads is almost unbearable. It is also significant that the  

land of Jamalpur Kalan was touching the rear side of the ECE factory and the

High Court  had granted compensation of Rs.250/- per square yard for the  

acquisition  of  the  year  1992.  We have  also  seen  the  site  plan  to  satisfy  

ourselves  and  find  that  the  land  acquired  from  Jamalpur  Kalan  and  the  

present land share a common boundary behind the ECE factory. The belting  

system in the facts of the present case would thus not be permissible.

21. We are, therefore, of the opinion as the said award pertained to the  

year  1992,  a  sum  of  Rs.225/-  per  square  yard  which  would  come  Rs.  

10,89000/- per acre would be the adequate compensation in the present case  

and for arriving at this figure not only have we computed the value of the land  

on the date of the Notification under Section 4 but have also recognized its  

potential  on the basis of  evidence of  development  in the area around the  

Bahalgarh-Sonepat road.

22. Mr. Shakil Ahmed, the learned counsel appearing in one of the cases  

has also prayed that compensation for the building and trees awarded in his  

case was inadequate and needed to be enhanced. We are unable to accept  

this submission as there is no evidence with  regard to the value of  these  

buildings and trees.

23. For the reasons mentioned above, we allow these appeals and award a sum of  

Rs.225/- per square yard as compensation for the entire acquired land and further  

direct that the appellants will have all statutory benefits that they would be entitled to  

as a consequences of this order. We also direct the respondent State of Haryana or the  

beneficiaries, as the case may be, to pay the compensation as enhanced by us by the  

end of this year.