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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  940 OF 2004

Chaturbhuja Modi & Ors.                     ... Appellants

Versus

State of Orissa & Anr.                ... Respondents

JUDGMENT

Dr. Mukundakam Sharma, J.

1. This appeal is directed against the judgment and order  

dated 12.09.2002 passed by the High Court of Orissa at Cuttack.  

The appellant and the State filed three appeals before the High  

Court against the judgment and order dated 16.04.1998 passed by  

the learned Civil Judge (Senior Division), First Court, Cuttack  

in L.A. Case No. 3 of 1995.  The said appeal arose out of a  

land  acquisition  proceeding  pertaining  to  the  land  of  the  

appellants – claimants herein.

2. A notification under Section 4(1) of the Land Acquisition  

Act was published on 09.12.1982, proposing to acquire land of  

the appellants measuring 2.429 acres covered under Khata No.  

581 of Mouza – Bahar Bisinabar for construction of additional  

building, office, garage and staff quarters of Orissa State

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Financial Corporation, Cuttack.  The Land Acquisition Officer  

assessed  the  market  value  of  the  land  at  the  rate  of  Rs.  

75,000/- per acre.  The appellants – claimants sought for a  

reference to the learned Civil Judge as envisaged under Section  

18  of  the  Land  Acquisition  Act,  and  the  Ld.  Judge  after  

receiving  evidence  adduced  by  the  parties,  enhanced  the  

compensation to Rs. 1,50,000/- per acre.  The appellants –  

claimants being dissatisfied with the aforesaid determination  

of  compensation,  filed  an  appeal  before  the  High  Court,  

claiming a higher compensation at the rate of Rs. 12, 50,000/-  

per acre.  After appreciation of the evidence available on  

record  and  relying  primarily  on  the  sale  consideration  in  

Exhibit  1,  dated  06.10.1982,  the  High  Court  enhanced  the  

compensation for the acquired land to Rs. 3,00,000/- per acre  

and also held that the appellants should be entitled to other  

statutory benefits as available under the Act.

3. The appellants, still aggrieved, filed the present special  

leave petition in this Court in which leave was granted after  

which the appeal is listed for hearing.  We took up the appeal  

for hearing during the course of which we heard learned counsel  

appearing  for  the  parties  who  have  painstakingly  taken  us  

through the evidence on record in support of their contentions.

4. This  appeal  is  filed  to  prove  and  establish  that  the

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acquired land is situated in the heart of the Cuttack City and  

close to the National Highway No. 5.  The land was acquired for  

construction  of  additional  building  of  O.S.F.C.  for  

accommodation of office etc.  At the time of acquisition, other  

commercial establishments like a cinema hall, hotel, etc. had  

already come up near about the acquired land.  The learned  

Civil Judge as well the High Court found that the acquired land  

is not on the side of National Highway No. 5 but the same is  

not very far away from the said Highway.  It is also on record  

that the acquired land is a low-lying land and remains water-

logged round the year.  But the said fact could not belie the  

fact that the acquired land had great potential value.  In  

order to assist the Courts to properly assess and determine the  

fair and reasonable market value, the parties adduced evidence,  

both oral and documentary.   

5. In this appeal, the parties have adduced limited evidence  

to  establish  their  case.  The  records  indicate  that  the  

appellants had filed two certified copies of the registered  

sale  deeds,  namely  Exhibits  1  and  2,  which  were  of  course  

exhibited without objection from the respondent.  Sale deeds  

were produced on behalf of the respondent – State and Land  

Acquisition Officer also, and they were exhibited as Exhibit B  

to  B/3  but  the  same  were  marked  as  such  with  objection.  

Exhibit 1, which was produced by the appellants herein, is a  

certified copy of the registered sale deed dated 04.10.1982.  

Under the aforesaid sale deed, a total land of Acre 0.0070

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decimals in Baharbisinabar was sold for Rs. 40,000/- i.e. at  

the  rate  of  22,500/-  per  gunth  or  Rs.  5,50,000/-  

(approximately) per acre.   

6. The  other  sale  deed  relied  upon  by  the  appellants  -  

claimants is Exhibit 2, which is a certified copy of registered  

sale deed dated 17.04.1982 by which land measuring Ac. 0.003  

decimals was sold for Rs. 2,700/-.  Exhibit 2 shows that a very  

small piece of land measuring only Ac. 0.003 decimals was sold  

at the rate of Rs. 9, 00,000/- per acre indicating its highly  

inflated value, which is established even when compared with  

Exhibit 1. Sale of such a tiny piece of land must have been for  

some specific object. The land which is acquired in the present  

case is a large tract of land, measuring Ac. 2.429 decimals and  

therefore, Exhibit 2 cannot be put up as a safe guide and basis  

for determining the market value of the present acquired land.  

The High Court has therefore rightly kept said sale deed out of  

its consideration.  It has also come in evidence, which is  

referred  to  and  relied  upon  by  the  Civil  Judge,  that  the  

purchaser of Exhibit 2 had his own land adjoining to the south  

of the land covered under it. Therefore, it appears that the  

purchaser was in dire necessity for purchasing the said land  

for the convenience of his own adjoining land. That being the  

position,  the  purchaser  of  the  land  in  Exhibit  2  was  even  

prepared  to  purchase  the  same  at  a  higher  value.  Figures  

represented in sale deeds may not always be seen by Courts as a  

parameter of existing fair values. In that view of this aspect,

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the assessed value of the acquired land is not comparable to  

the land mentioned in Exhibit 2.

7. In  so  far  as  the  evidentiary  value  of  Exhibit  1  is  

concerned, the same is found to be proximate to the date of  

notification  under  Section  4(1)  but  under  the  said  

notification, another small piece of land measuring Ac. 0.070  

decimals of land was also sold for Rs. 5,50,000/- per acre.  

The document, however, did not indicate whether the said land  

is  in  proximity  to  the  acquired  land  or  if  the  same  is  

comparable to the land in question.  By the aforesaid sale  

deed, only a small piece of land was sold whereas the acquired  

land is a large tract of land.    

8.    Other sale deeds which were produced on behalf of the  

Land Acquisition Officer, namely Exhibits B to B/3, were placed  

on  record  under  objection.   There  is  no  evidence  by  the  

Collector indicating that the lands covered by the aforesaid  

sale deed transaction are in any manner comparable land with  

that of the land under acquisition. The land under the said  

sale  deeds  are  located  in  some  other  village  whereas  the  

acquired land is “Puratan Partita” in Kisan, but the land sold  

vide Exhibit B series are Bari in Kisan.  Therefore, the said  

sale deeds also cannot be made as the basis for determining  

fair and reasonable market price of the land acquired.

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9. The only evidence that could be considered and relied upon  

is Exhibit 1. The following criteria provide a good indication  

of  whether  a  sale  deed  may  be  comparable  to  the  one  in  

question: (1) it must be within a reasonable time of date of  

notification under Section 4(1) of the Act; (2) it should be a  

bonafide  transaction;  (3)  it  should  be  a  sale  of  the  land  

acquired or of the land adjacent to the one acquired; and (4)  

it should possess similar advantage. Although the land whose  

sale is evidenced in Exhibit 1 is not an excellent comparison  

in  terms  of  area,  the  same  indicates  a  sales  transaction  

completed at around the same time as the acquisition of the  

said land. Moreover, Exhibit 1 also concerns a plot that is in  

geographical proximity to the acquired land.  There being no  

other evidence on record, and since we are not inclined to  

remand the matter after such a long delay, we would rely on  

Exhibit 1 with necessary scrutiny and caution. Reliance could  

be placed on the said documentary evidence for determining and  

assessing the compensation of the acquired land after giving  

the necessary deduction.  

10.  The  High  Court  appears  to  have  taken  notice  of  the  

aforementioned  criteria  and  has  given  some  discount  in  

compensation as the land under Exhibit 1 is a very small piece  

of land and the land acquired in the case in hand is much  

larger in size. After giving the said discount, the High Court  

computed the compensation at the rate of Rs. 3,00,000/- per  

acre for the acquired land.  While determining compensation,

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some conjecture is unavoidable as it is generally not possible  

to have any documentary evidence of sale of land of similar  

nature and in the near vicinity of the acquired land.  The  

value shown in Exhibit 1 cannot be assessed as the value of the  

acquired land for the reason that the said land which is sold  

under Exhibit 1 is a very small piece of land, whereas the  

acquired land being a large tract of land. This Court has held  

in Administrator General of West Bengal v. Collector, Varanasi,  

reported at (1988) 2 SCC 150, that where large tracts of land  

are  required  to  be  valued,  valuation  in  transactions  with  

regard to small plots is not to be taken as the real basis for  

determining  the  compensation  of  large  tracts  of  land.  It  

follows that where the market-value of large block of land is  

determined  on  the  basis  of  sale  transactions  for  smaller  

property,  appropriate  deduction  has  to  be  made  for  making  

allowance for the loss of the acquired land required to be used  

for internal development such as construction of roads, drains,  

sewers, open spaces and the expenditure involved in providing  

other amenities like water, electricity etc. The extent of area  

required to be set apart has to be assessed by the Court having  

regard to the shape, size and situation of the concerned block  

of land.  

11. After giving some variations and discount, the High Court  

fixed the rate of the land at Rs. 3, 00,000/- per acre, which  

in  our  considered  opinion  and  in  the  light  of  evidence  on  

record, seems to be just and proper.  Consequently, we dismiss

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this appeal as we find no merit in it but without any cost.  

     ...............………………………J.      [Dr. Mukundakam Sharma]

..............………………..J.  [Anil R. Dave]

New Delhi, August 11, 2010.