REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7209 OF 2004

Bhagat Singh and others   ….       Appellants

Versus

Union of India and another …      Respondents  

WITH

CIVIL APPEAL NOS. 7210 OF 2004

Mehar Singh and others   ….       Appellants

Versus

Union of India …      Respondent  

J U D G M E N T

S.B, SINHA, J.

1. Appellants  were  owners  of  the  lands  situate  in  village  Ghewra.  

The said lands were acquired for a public purpose, namely construction of  

L.P.G.  Bottling  Plant.   Notification  under  Section  4  of  the  Land

Acquisition Act,  1894 (for short ‘the Act’)  was issued on 18th March,  

1985 in terms whereof, compensation @ Rs.14,000/- ; Rs.12,000/- and  

Rs.10,000/- per bigha was offered categorizing the acquired lands in three  

categories viz. ‘A’, ‘B’ and ‘C’.   

2. Applications for reference in terms of Section 18 of the Act having  

been  made,  the  Reference  Court  determined  the  fair  market  value  at  

Rs.23,970/- ; Rs. 21,970/- and Rs.19,970/- per bigha respectively having  

regard to categorization by the Land Acquisition Collector.    

3. Being  dissatisfied  with  the  said  judgment  the  appellants  filed  

Appeals  before  the  High  Court  claiming  compensation  at  the  rate  of  

Rs.40,000/- per bigha.  However, a Division Bench of the High Court,  

having regard to its earlier decision rendered in Ranjit  Singh  vs.  Union  

of  India reported in 48(1992) DLT 138, where the lands were acquired  

for the same purpose and under the same Notification,  determined the  

market value at Rs.26,.775/- ; Rs.24,775/- and Rs.22,775/- per bigha for  

categories ‘A’, ‘B’ and ‘C’ respectively.   

4. The  contention raised before us is that the High Court committed a  

serious error in passing the impugned judgment in so far as it three sale  

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deeds which were marked as Exts. A-5 to A-7 had not been taken into  

consideration.  The details of the said sale deeds are as under :-

“(i) Vide  Ex.A-5,  2  Bigha  1  Biswas  land  in  village  Ghewra  was  sold  for  Rs.45,000/-  i.e.  around  Rs.22,000/-  per  Bigha  as  on  15.10.81”

(ii) Vide  Ex.A-6,  2  Bigha  13  Bisws  land  was  sold  in  village  Tikri  Kalan  for  Rs.42,000/-  i.e.  Rs.25,500/- approx. per bigha.

(iii) Vide Ex.A-7, 12 Biswas land in village Tikri  was  sold  on  23.10.81  for  Rs.25,000/-  i.e.  @  Rs.41,650/- per bigha approx.  

The  appellants  furthermore  relied  on  a  purported  Lok  Adalat  

Award wherein the market value of the similarly situated land was fixed  

at Rs.22,000/- per bigha.

Our attention has also been drawn to a document purported to be  

showing the Market Price of Delhi Agricultural Lands.

5. The High Court, as noticed above, has proceeded to determine the  

market  value of the land keeping in view its earlier decision in  Ranjit  

Singh (supra).   

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6. A  Special  Leave  Petition  being  No.3211  of  1993  was  filed  by  

Ranjit Singh against the said order which stood dismissed in limine on  

19th April, 1993.   

7. In  absence  of  any  material  brought  on  record,  it  is  difficult  to  

disagree with the High Court’s opinion particularly when our attention  

has not been drawn to any evidence that the lands in the case of  Ranjit  

Singh was inferior in character vis-à-vis the lands acquired in the present  

case or that some other additional materials have been brought on record  

in the present case so as enable this Court to take a different view.    

8. So far as the three deeds of sale relied upon by the appellants are  

concerned, we may notice that Exts.A-6 and A-7 were in respect of land  

situated  in  two  different  villages.   Ext.A-5  pertains  to  the  village  in  

question wherein the land was stated to have been sold at Rs.22,000/- per  

bigha.   

9. The principal question which arises for our consideration is what  

principle should be applied for determining the market value of the land.  

It  is  now a well  settled principle  of  law that  the determination of  the  

market  value of  the  land acquired,  indisputably  would depend upon a  

large number of factors, including the nature and quality thereof.  The  

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norms which are required to be applied for determination of the market  

value of the agricultural land and homestead land may be different.  In  

given cases location of land and in particular, closeness thereof from any  

road or high-way would play an important role for determination of the  

market value wherefor belting system may in appropriate cases have to be  

resorted  to.   The  position  of  the  land,  particularly  in  rainy  season,  

existence of any building etc. also plays an important role.  A host of  

other  factors  including  development  in  and  around  the  acquired  land  

and/or  the  potentiality  of  the  development  will  have  a  bearing  on  

determination of the value of the land.   

10. Determination of the market  value of the land may also depend  

upon the facts and circumstances of each case, amongst them, however,  

would be the price of land, amount of consideration mentioned in a deed  

of sale executed in respect of similarly situated land near about the date  

of issuance of Notification under Section 4(1) of the Act ; in the absence  

of any such exemplars the market value can be determined on yield basis  

or in  case of an orchard on the basis of number of fruit bearing trees.  It  

is also well settled that for price determination purposes, the courts would  

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be well advised to consider the positive and negative factors, as has been  

laid  down  by  this  Court  in  Viluben  Jhalejar  Contractor  vs.  State  of  

Gujarat [(2005) 4 SCC 789], namely :-

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 area (iv) Lower  level  requiring  the  depressed portion to be filled  up  

(v) Regular shape (v) Remoteness  from  developed  locality

(vi) Level  vis-à-vis  land  under  acquisition  

(vi) Some special 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.

11. This Court in Union of India v. Pramod Gupta, [(2005) 12 SCC 1],  

on the question of determination of market value opined :-  

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“24. While  determining  the  amount  of  compensation  payable  in  respect  of  the  lands  acquired by the State, the market value therefor  indisputably has to be ascertained. There exist  different modes therefor.

25. The best method, as is well known, would  be the amount which a willing purchaser would  pay to the owner of the land. In absence of any  direct  evidence,  the court,  however,  may take  recourse  to  various  other  known  methods.  Evidences admissible therefor inter alia would  be judgments and awards passed in respect of  acquisitions of lands made in the same village  and/or neighbouring villages. Such a judgment  and award, in the absence of any other evidence  like the deed of sale,  report  of the expert and  other  relevant  evidence  would  have  only  evidentiary value.

26. Therefore, the contention that as the Union  of India was a party to the said awards would  not  by  itself  be  a  ground  to  invoke  the  principles  of  res  judicata  and/or  estoppel.  Despite  such  awards  it  may  be  open  to  the  Union of India to question the entitlement of the  respondent  claimants  to  the  amount  of  compensation and/or the statutory limitations in  respect thereof.  It  would also be open to it  to  raise  other  contentions  relying  on  or  on  the  basis  of  other  materials  brought  on  record.  It  was also open to the appellant to contend that  the lands under acquisition are not similar to the  lands in respect whereof judgments have been  delivered.  The  area  of  the  land,  the  nature  thereof,  advantages  and  disadvantages  occurring  therein  amongst  others  would  be  relevant  factors  for  determining  the  actual  market  value  of  the  property  although  such  judgments/awards, if duly brought on record, as  stated  hereinbefore,  would  be  admissible  in  evidence.”

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It was furthermore noticed :-

“36. Yet again in  Ras Behari Mandal v.  Raja  Jagadish Chandra Deo Dhaubal Deb the Patna  High Court reiterated the presumption that the  lessor  retains  all  the  rights  in  mines  and  quarries.  It  also  noticed  the  decision  of  the  House of Lords in  Great  Western Rly.  Co. v.  Carpalla United China Clay Co. Ltd.wherein a  grant reserving minerals was held to exclude a  deposit  of  china clay despite  the fact  that  the  same was found near the surface.”

It was furthermore noticed :-

“82. In  V.  Hanumantha  Reddy v.  Land  Acquisition  Officer  &  Mandal  R.  Officer the  law is stated in the following terms:  

“It is now a well-established principle of  law  that  the  land  abutting  the  national  highway will fetch far more higher price  than the land lying interior.”

This Court furthermore opined :-

“84. It is also trite to state that the market value  of agricultural land is lower than that of the land  suitable  for  commercial  purposes.  (See  Om  Prakash v. Union of India.)

It was observed :-

“87. The  courts  will  also  have  to  take  into  consideration  the  enormity  of  the  financial  implication of enhancement in view of the size  of the land acquired for a particular project.”

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In  Ranvir Singh v. Union of India,  [(2005) 12 SCC 59], this  

Court held as under :-  

“22. Concededly,  the  High  Court  in  its  impugned judgment did not place any reliance  whatsoever upon the sale instances whereupon  strong reliance has been placed by the parties  solely  on  the  ground that  neither  the  vendors  nor the vendees thereof had been examined as  witnesses.  It  has  also  not  placed  any reliance  upon any other judgment or award filed by the  parties.  The  High Court  while  arriving  at  the  said  finding  evidently  took  into  consideration  the law as it then stood. The correctness of the  decisions wherein the aforementioned view had  been  taken  was  doubted  and  the  matter  was  referred to a larger Bench.”  

Referring to  Cement  Corporation  (supra),  it  was opined that the  

High Court was required to consider the deeds of sale in their  proper  

perspective for determining the market value of the acquired land.

In Karimbanakkal Sulaiman (Dead) by L.Rs.  v.  Special Tahsildar  

for K.A.K.P.I.P., [(2004) 13 SCC 643], this Court held:    

“These  factors  have  been  taken  into  consideration by the High Court  in fixing the  land  value.  Moreover,  the  land  acquired  was  agricultural  land  and  it  was  acquired  for  the  purpose  of  an  irrigation  project.  There  is  nothing on record to show that the land had any  commercial  value  or  future  potentialities.  We  do not think that the land value fixed is too low  to be interfered with by this Court.”

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In Viluben Jhalejar Contractor  v. State of Gujarat, [(2005) 4 SCC  

789], this Court opined that :-

“24. The purpose for which acquisition is made  is  also  a  relevant  factor  for  determining  the  market  value.  In  Basavva v.  Spl.  Land  Acquisition  Officer deduction to  the  extent  of  65% was made towards development charges.”

In  Basant Kumar v.  Union of India, [ (1996) 11 SCC 542 ], this  

Court  has opined that  even if  the entire  land is  of  one village all  the  

persons cannot be given same compensation, stating:-

“….It has been firmly settled law by beadroll of  decisions of this Court that the Judge determining  the compensation under Section 23(1) should sit  in the armchair of a willing prudent purchaser in  an open market and see whether he would offer  the same amount proposed to be fixed as market  value as a willing and prudent buyer for the same  or  similar  land,  i.e.,  land  possessing  all  the  advantageous  features  and  to  the  same  extent.  This  test  should  always  be  kept  in  view  and  answered affirmatively, taking into consideration  all  relevant  facts  and circumstances.  If  feats  of  imagination are allowed to sway, he outsteps his  domain  of  judicial  decision  and  lands  in  misconduct amenable to disciplinary law...”

12. Our attention has not been drawn to any discussion made either by  

the Reference Court or any other evidence brought on record to establish  

that the land under Ext. A-5 was similar to the lands under acquisition in  

the appeals in question.   It has also not been shown to which category the  

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land sold in terms of the sale deed Ext.  A-5 dated 15th October,  1981  

would fall.   Even assuming that some appreciation has taken place, the  

market  value  of  the  land,  even  for  ‘C’  category  has  been  fixed  at  

Rs.2275/- per bigha; as such we are of the opinion that appellants have  

not been prejudiced in any manner.

13. For the reasons aforesaid these appeals fail and are dismissed.  No  

costs.

……………………… ………..J.

[ S.B. Sinha ]

…………………………… …..J.

[ Cyriac Joseph ] New Delhi August 4, 2009

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