“REPORTABLE”

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1173 OF 2009 (Arising out of SLP (C) No. 8378 of 2008)

C.R. Nagaraja Shetty …. Appellant

Versus

Special Land Acquisition Officer  and Estate Officer & Anr. …. Respondents

J U D G M E N T

V.S. SIRPURKAR, J.

1. Leave granted.

2. The  present  appeal  has  a  slightly  chequered  history.   Land

acquisition  proceedings  were  initiated  in  respect  of  the  land,  bearing

Survey No. 4 of Beratana Agrahara Village, Begur Hobli, Bangalore South

Taluk,  measuring  35  guntas,  belonging  to  the  appellant.   Section  4

Notification dated 29.11.1990 was published on 20.12.1990.  After Section

5-A  enquiry,  declaration  under  Section  6  of  the  Land  Acquisition  Act

(hereinafter referred to as ‘the Act’) was published on 18.6.1992.  In the

award proceedings dated 9.12.1994, the compensation was determined at

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Rs.10/- per square feet.  An application for enhancement under Section 18

of the Act was filed by the appellant and Reference Court partly allowed the

Reference and enhanced the compensation to Rs.27.50 per square feet.

The appellant was also held to be entitled to solatium at 30% of the market

value and for additional amount at 12% p.a. under Section 23(1-A) of the

Act.  The Reference Court accepted that this was non-agricultural land and

was situated adjacent to the Highway and thus, it had potential for being

used for commercial purpose.  The public purpose for which the land was

acquired, was for widening of the National Highway.

3. Dissatisfied by the judgment of the Reference Court, an appeal was

filed before the High Court.   The High Court  set  aside the order of  the

Reference Court, enhancing the compensation and strangely enough held

that  the  Reference  Court  had  erred  in  enhancing  the  compensation.

Aggrieved by the judgment of the High Court, the appellant filed a Special

Leave Petition, being SLP (Civil) No. 8575 of 2006 before this Court.  This

Court, by its order dated 26.2.2007, set aside the judgment and remanded

the matter to the High Court to consider the appeal afresh.  Accordingly,

the  High  Court  heard  the  matter  again  and  partly  allowed  the  appeal,

enhancing  the compensation amount at Rs.75/- per square feet.  However,

the High Court deducted Rs.25/- per square feet for development charges.

The  High  Court  also  did  not  award  the  compensation  towards yielding

coconut  trees,  barbed  fencing  wire  etc.   Aggrieved  by  that  order,  the

appellant, now, has come before us by way of the present appeal.

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4. The Learned Counsel  appearing on behalf  of  the appellant  urged

that considering that this land was on the outskirts of Bangalore City and

had the  great  commercial  potential,  the  High  Court  was bound to  give

enhanced compensation, at least at the rate of Rs.100/- per square feet.  It

was pointed out that the acquired land was on the National Highway and as

such, had the potential for commercial purposes.  The Learned Counsel

further, by way of his second submission, urged that the High Court, at any

rate, should not have deducted Rs.25/- per square feet, so as to limit the

compensation to Rs.50/- per square feet.  The Learned Counsel pointed

out  that  such  deduction  for  development  charges  was  completely

unjustified,  particularly,  because  there  could  be  no  development  in  the

small  piece  of  land.   The  Learned  Counsel  relied  upon  the  judgment

reported in 2007 (9) SCC 447.

5. As against  this,  the Learned Counsel  appearing on behalf  of  the

respondent, supported the impugned judgment and contended that in fact,

the High Court had given much more compensation than what was actually

deserved by the appellant.

6. The High Court has increased the compensation from Rs.27.50/- per

square feet to Rs.75/- per square feet.  In the impugned judgment, the High

Court observed that the concerned land was abutting the National Highway

and was within 15 kilometers from Bangalore City Corporation limit  and

further that all-round development has taken place as industries have come

up thereby.  In this, the High Court relied upon a Division Bench judgment

passed by the same High Court, wherein, it was found that the value of the

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nearby land was Rs.62.50/-  per square feet.  The High Court ultimately

held that since the said land referred to in the earlier judgment passed by it

was 25-30 kilometers away from Bangalore Bus Station, the present land

would deserve a better rate than the one given in the earlier judgment,

since it was only 15 kilometers away from the Bus Station.  Accordingly,

the High Court recorded a finding that the rate of Rs.75/- per square feet

would be a proper rate.  We are satisfied with this finding of the High Court,

as  the Learned Counsel  has not  been able  to  show anything from the

record to hold that the concerned land would deserve a higher price than

the one awarded by the High Court.  We are generally satisfied with the

finding of the High Court and would choose to confirm the same.  Thus, we

hold  that  the  High  Court  was right  in  awarding the  rate  of  Rs.75/-  per

square feet for the concerned land.

7. That leaves us with the other question of deduction ordered by the

High Court.

8. The High Court  has directed the deduction of  Rs.25/-  per  square

feet.  Unfortunately, the High Court has not discussed the reason for this

deduction of Rs.25/- per square feet nor has the High Court relied on any

piece of  evidence for that  purpose.   It  is  true that  where the lands are

acquired for  public purpose like setting up of  industries or setting up of

housing colonies or other such allied purposes, the acquiring body would

be entitled  to  deduct  some amount  from the  payable  compensation on

account  of  development  charges,  however,  it  has  to  be established by

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positive  evidence  that  such  development  charges  are  justified.   The

evidence must come for the need of development contemplated and the

possible  expenditure  for  such  development.   We  do  not  find  any such

discussion in the order of the High Court.  As if this is not sufficient, when

we see the judgment of the Principal Civil Judge (Sr. Division), Bangalore,

Rural District, Bangalore in Reference proceedings, we find that there is no

deduction  ordered  for  the  so-called  development  charges.   We  are,

therefore,  not  in  a  position  to  understand  as  to  from  where  such

development  charges  sprang  up.   The  Learned  Counsel  appearing  on

behalf of the respondents was also unable to point out any such evidence

regarding the proposed development.  We cannot ignore the fact that the

land is acquired only for widening of the National Highway.  There would,

therefore, be no question of any such development or any costs therefor.

In the reported judgment in  Nelson Fernandes and Others Vs. Special

Land Acquisition Officer, South Goa and Others  in  2007(9) SCC 447,

this Court has discussed the question of development charges.  That was a

case,  where,  the acquisition was for  laying a Railway line.   This  Court

found that the land under acquisition was situated in an area, which was

adjacent to the land already acquired for the same purpose, i.e., for laying

Railway  line.   In  paragraph  29,  the  Court  observed  that  the  Land

Acquisition Officer,  the  District  Judge and the High Court  had failed to

notice  that  the  purpose  of  acquisition  was  for  Railways  and  that  the

purpose is a relevant factor to be taken into consideration for fixing the

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compensation.   The  Court  relied  on  judgment  in  Viluben  Jhalejar

Contractor Vs. State of Gujarat  reported in 2005(4) SCC 789, where it

was held that the purpose for which the land is acquired, must also be

taken into consideration in fixing the market value and the deduction of

development  charges.   Further,  in  paragraph  30,  the  Court  specifically

referred to the deduction for the development charges and observed:-

“30. We are not, however, oblivious of the fact that normally 1/3rd deduction of further amount of compensation has been directed in some cases.  However, the purpose for which  the  land  is  acquired  must  also  be  taken  into consideration.   In  the  instant  case,  the  land  was acquired  for  the  construction  of  new BG line  for  the Konkan Railways………………….  In the instant case, acquisition is for laying a railway line.   Therefore,  the question of development thereof would not arise.”

The  Court  made  a  reference  to  two  other  cases,  viz.,  Hasanali

Khanbhai & Sons Vs. State of Gujarat  and Land Acquisition Officer

Vs. Nookala Rajamallu reported in 1995 (5) SCC 422 and 2003(12) SCC

334 respectively, where, the deduction by way development charges, was

held permissible.  The situation is no different in the present case.  All that

the acquiring body has to achieve is to widen the National Highway.  There

is no further question of any development.  We again, even at the cost of

repetition, reiterate that no evidence was shown before us in support of the

plea of the proposed development.  We, therefore, hold that the High Court

has  erred  in  directing  the  deduction  on  account  of  the  developmental

charges  at  the  rate  of  Rs.25/-  per  square  feet  out  of  the  ordered

compensation at the rate of Rs.75/- per square feet.   We set aside the

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judgment to that extent.  The claimant would, therefore, be entitled to the

compensation at the rate of Rs.75/- per square feet with all the statutory

benefits like solatium under Section 23(2), 12% interest under Section 23

(1-A)  on  the  enhanced  market  value  and  interest  at  9% and  15%  as

provided under Section 34 of the Act for one year and the rest of the period

from  the  date  of  taking  possession  till  the  date  of  payment  of  the

compensation awarded in favour of the claimant.  With this, we partly allow

the appeal and modify the order of the High Court.

………………………………..J. (Tarun Chatterjee)

………………………………..J. (V.S. Sirpurkar)

New Delhi; February 24, 2009.  

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