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PETITIONER: STATE OF ORISSA

       Vs.

RESPONDENT: BRIJ LAL MISRA ETC. ETC.

DATE OF JUDGMENT26/07/1995

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. PARIPOORNAN, K.S.(J)

CITATION:  1996 AIR  221            1995 SCC  (5) 203  1995 SCALE  (4)592

ACT:

HEADNOTE:

JUDGMENT:           O R D E R      These  three  appeals  are  disposed  of  by  a  common judgment since the questions of law raised are common.      A notification under s.4(1) of the Land Acquisition Act (for short,  ‘the Act’) was published in 1968 acquiring 0.62 acre, 0.82  acre and  0.15 acre  in Survey  Nos.704, 705 and 706/80 respectively  for construction  of over-bridge,  near Vedavyas in Rajganjpur - Rourkela Road. The Land Acquisition Officer determined  the compensation  under s.11  of the Act between  Rs.1360/-  per  acre  to  Rs.2912/-  per  acre.  On reference, the  Subordinate Judge, by award and decree dated January 19,  1970, while determining the compensation at the rate of  Rs.200/- per  decimal, on  the basis  of comparable sales which ranged between Rs.100/- to Rs.115/- per decimal, further  enhanced   25%  of   the  compensation  for  future potential value  which was  was upheld  by the High Court by its impugned  judgment  dated  August  16,  1978.  The  only question, rightly  canvassed by  Shri Mehta, learned counsel for the  appellant is  whether the  courts having determined the compensation  take the potential value, whether would be right to further enhance compensation at 25% more for future potentiality.  The   High  Court   placed  reliance  on  two judgments of  that court  reported in Musamat Kunduna Bibi @ Khatun Bibi  v. State  of Orissa [1968 (34) Orissa Law Times 1043] and  in State  of Orissa  through the Land Acquisition Collector, Sundergarh  v. Budha  Oram &  Ors. etc. [1977 (2) Orissa Weekly Reporter] and held thus :      "There   is   immense   possibility   of      commercial        development        and      industrialisation in the locality in the      immediate  future  and,  therefore,  the      direction  that   potential   value   be      estimated at  twenty five  per cent  for      purposes of  compensation  is  justified      and does not call for interference."

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    Section 23  (1) of the Act charges determination of the amount of  compensation for  the acquired  land taking  into account firstly  the market value of the land at the date of the publication of the notification under s.4(1) of the Act. The question,  therefore, would  be that  what would  be the market value of the land. The market value prevailing on the date of  the notification  including potentiality  the  land possessed of  or realisable  potentiality existing as on the date of  the notification,  would be  the relevant  fact for consideration to  determine market  value. This question was settled by the Privy Council in V.N. Gajapatiraju v. Revenue Divisional Officer,  Vizagaapatnam [AIR  1939 P.C.  98]. The Privy Council  held that  in determining  market value under s.23, the  Court would  be guided  by ascertaining in a best way from  the material on record from willing vendors. It is possibility of the market value of the land and not realised possibility that  must be  taken  into  consideration.  That judgment is  followed in a catena of decisions of this court and held  that in  determining the  compensation  the  Court would take into consideration the potentialities of the land existing as  on the date of the notification published under s.4(1). The  very concept  of the potential value would mean existing in  possibility but  not in  act, i.e., the land is capable to  be used  in future  in the  existing  condition. Having taken  that factor  into consideration and determined compensation whether the court would be justified in further enhancing at  25% for  further potentiality?  Our answer  is positively no.  Section 24,  fifthly, of  the Act  expressly prohibits taking into account such future use declaring such matters to  be neglected  in determining  compensation.  The Court shall  not take into consideration any increase to the value of  the land acquired likely to accrue from the use to which it will be put when acquired; sixthly, any increase to the value  of the other land of the person interested likely to accrue  from the  use to  which the land acquired will be put. In  other words,  the statute expressly enjoins to omit consideration  of   the  future   use   of   the   land   or potentialities of  the neighbouring  lands on account of the acquisition  in   determining  compensation.   In  a  recent judgment in  P.  Rama  Reddy  &  Ors.  v.  Land  Acquisition Officer, [1995  (2) SCC  305 at 314], this court considering this aspect of the matter held thus:      ".....when   a    land   with   building      potentiality  is   acquired,  the  price      which   its    willing   seller    could      reasonably expect  to  obtain  from  its      willing purchaser  with reference to the      date envisaged  under s.4(1) of the L.A.      Act, ought  to necessarily  include that      portion  of   the  price   of  the  land      attributable     to     its     building      potentiality. Such price of the acquired      land  then   becomes  its  market  value      envisaged under s.23(1) of the L.A. Act.      If that  be  the  market  value  of  the      acquired land with building potentality,      which acquired land could be regarded to      have a building potentiality and how the      market value  of such acquired land with      such building  potentiality requires  to      be measured  or determined  are  matters      which remain for our consideration now."      In Land  Acquisition Officer,  Eluru and Ors. vs. Jasti Rohini (Smt.)  and another,  [1995 (1)  SCC 717 at page 722] this Court held that:

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    "Section 24  of the  Act puts an embargo      on the court that it shall not take into      consideration the  degree of urgency for      the acquisition;  disinclination of  the      person   interested    to   part    with      possession of  the  acquired  land;  any      increase  in   the  value  of  the  land      acquired likely  to accrue  from the use      to which  it will  be put when acquired;      any increase  to the  value of the other      land of  the person interested likely to      accrue from  the use  to which  the land      acquired will  be put  to; any layout or      improvements on  or disposal of the land      acquired etc.  without the  sanction  of      the  Collector  or  after  Section  4(1)      notification  was   published,   special      suitability or  adaptability of the land      for any  purpose or  any increase in the      value of  the land  on  account  of  its      being put  to any use which is forbidden      of law  are opposed  to  public  policy.      Therefore,  in  determining  the  market      value and  fixation of the compensation,      the  court  should  be  alive  to  these      factors and keep them at the back of the      mind and should not be influenced by the      future  or   later  development  in  the      locality or neighbourhood and should not      get   influenced   by   the   prevailing      situation  as   on  the   date  of   the      determination of  the compensation.  Its      consideration should  alone be  confined      to the market value prevailing as on the      date of  the notification  under Section      4(1)."      Thus, having  taken the  existing  potentialities  into consideration and  determined the  compensation at  Rs.200/- per decimal,  the Reference  Court as well as the High Court have  committed   obvious  illegality   in  applying   wrong principle to  award further  increase at 25% more for future potentialities which  is within  the grinding  teeth of  the prohibition engrafted  in s.24,  fifthly and sixthly, of the Act. The  two decisions  relied on by the High Court of that court had  not correctly  laid the law. While confirming the determination of  the market  value of Rs.200/- per decimal, which is  not challenged  before us, further increase of 25% is set  aside. The  claimants are  entitled to the statutory benefits according  to law.  Appeals are accordingly allowed in part. No costs.