REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 2042-44 OF 2004

Hirabai & Ors.                              ……. Appellants

Versus

L.A.O. cum Asst. Commnr.                  ..... Respondent     

With

CIVIL APPEAL NOS. 2045-52 OF 2004

With

CIVIL APPEAL NOS. 2053-77 OF 2004

With

CIVIL APPEAL NO. 5900 OF 2005

JUDGMENT

Dr. Mukundakam Sharma, J.

1. The  applications  seeking  for  substitution  of  the  legal  

representatives  of  the  deceased  appellants  pending

consideration  are  allowed  while  condoning  delay,  directing  

substitution of the names of the legal representatives in place  

of deceased appellants. The said applications are accordingly  

disposed of by this common order.

2. Having  passed  an  order  for  substitution  of  the  legal  

representatives in place of the deceased appellants, we now  

proceed  to  dispose  of  all  these  appeals  by  this  common  

judgment and order as all these appeals are interconnected  

and issues raised and urged are almost identical in nature.

3. The  Government  of  Karnataka  issued  a  preliminary  

notification under Section 4(1) of the Land Acquisition Act,  

1894 [for short “the Act”] proposing to acquire lands for the  

Bhima River Lift  Irrigation Project  which was published in  

the  Government  Gazette  on  08.06.1995  by  which  the  

Government  proposed  to  acquire  lands  belonging  to  the  

appellants herein. The lands proposed to be acquired consist  

of  both  irrigated  and  dry  lands  pertaining  to  Devangaon  

Village, Bijapur District. Subsequently, the State Government  

also  issued  declaration  under  Section  6  of  the  Act  on  

2

25.01.1996.  Subsequent  to  the  aforesaid  issuance  of  

notification  under  Section  4(1)  followed  by  the  notification  

under  Section  6  of  the  Act,  the  Land  Acquisition  Officer  

passed  an  award  on  14.12.1996  whereby  he  fixed  the  

compensation and the market value of the acquired irrigated  

land at  the  rate  of  Rs.  15,000/-  per acre  and for  the  dry  

lands at Rs. 13,000/- per acre.  

4. Aggrieved by the aforesaid award, reference applications were  

filed by the claimant – appellants on the basis of which a  

reference  was  made  to  the  reference  court.  Before  the  

reference  court  parties  adduced  evidences  both  oral  and  

documentary.  At  the  conclusion  of  the  trial,  the  reference  

court  enhanced  the  compensation  of  dry  lands  from  Rs.  

13,000/-  per  acre  to  Rs.  31,500/-  per  acre  by  way  of  

judgment  and  order  dated  31.01.2000  and  so  far  as  the  

irrigated lands are concerned, the reference court by way of  

its judgments and orders dated 08.04.1999 and 13.12.1999  

enhanced  the  compensation  of  irrigated  lands  from  Rs.  

15,000/- per acre to Rs. 45,900/- per acre.

3

5. The  claimants  preferred  appeals  before  the  High  Court  of  

Karnataka and the High Court by the impugned judgments  

and orders enhanced the market value for the irrigated lands  

and determined the same at the rate of Rs. 75,600/- per acre  

and in respect of dry lands the High Court determined the  

market value at Rs. 38,000/- per acre. Being aggrieved by  

the  aforesaid  judgments  and  orders  passed  by  the  High  

Court, the present appeals were filed in this Court, in which  

we have heard the learned counsel appearing for the parties.

6. The learned counsel appearing for the appellants contended  

before  us  that  the  High Court  was wrong in  applying  the  

capitalisation method of valuation for calculating the market  

value of both the categories of lands. In order to strengthen  

her  argument,  she  had  extensively  taken  us  through  the  

judgments and orders of the High Court, reference court and  

also the other evidences on record.  

7. The first submission which was advanced before us by the  

counsel appearing for the appellants was that the High Court  

was  wrong  to  hold  that  appellants  have  restricted  their  

4

claims at Rs. 80,000/- per acre whereas it is shown from the  

claim petition filed before the reference court that the claim  

was made at Rs. 1,00,000/- per acre, although, appellants  

paid the court fee only at Rs. 80,000/- per acre for the lands  

in question. Therefore, on this basis, we find that there was  

nothing wrong on the part of the Division Bench of the High  

Court mentioning that the prayer of the appellants was to fix  

the market value of the acquired land at Rs. 80,000/- per  

acre.  

8. The  next  contention  of  the  counsel  appearing  for  the  

appellants is that the High Court was unjustified to reject the  

certificate  dated  24.02.1996  [Exhibit  P-71]  issued  by  the  

Assistant  Director  of  Agriculture,  Sindgi  in  respect  of  

agricultural  land in Devangaon Area indicating a standard  

yield of sugarcane as 60 tonnes per year per acre. She also  

submitted that the market value of the irrigated lands in the  

present case should be decided on the basis of a similar case  

in which Rs. 79,000/- was awarded by the Land Acquisition  

Officer himself for the sugarcane growing lands by way of a  

consent  award  dated  20.10.1997  in  respect  of  the  lands  

5

which  were  acquired  under  preliminary  notification  dated  

08.08.1996 at Vadahalli Village in Bagalkot Taluk. Relying on  

the same, the counsel for the appellants submitted that even  

if the claim of the appellants for fixing the market value of  

land at Rs. 1,00,000/- per acre is not accepted by the court,  

the market value should be fixed on the basis of the market  

value fixed for sugarcane growing lands of Vadahalli Village  

in  Bagalkot  Taluk  as  per  the  award  of  Land  Acquisition  

Officer dated 20.10.1997.

9. Counsel  appearing for  the  respondent,  however,  supported  

the impugned judgments and orders and relying on the same  

submitted  that  the  said  orders  do  not  call  for  any  

interference by this Court.  

10.In the present case we are concerned with the acquisition of  

irrigated  lands  and  dry  lands.  By  issuing  the  aforesaid  

preliminary notification issued under Section 4(1),  lands of  

the  appellants  were  acquired.  Having  carefully  scrutinized  

the judgment of the Division Bench of the High Court,  we  

find  that  the  High  Court  has  examined  the  issue  of  

6

determining  fair  and  just  market  value  of  the  lands  from  

various angles.  

11.Appellants drew the attention of the High Court to a certified  

copy of the sale deed relating to sale of one acre of land in Sy.  

No. 109/2 [Exhibit  P-26] of Kallahalli  Village situated at a  

distance of 3 kilometers from the acquired lands. The said  

sale deed indicates that the aforesaid land was sold at the  

rate of Rs. 75,000/- per acre on 05.07.1994 which is about  

one year prior to the date of the preliminary notification in  

the present case. The encumbrance certificate relating to Sy.  

No. 1/5 of Kallahalli Village, which shows that the said land  

measuring 1 acre 25 guntas was sold for a consideration of  

Rs. 1, 15,000/- per acre and was marked as Ex. P-27, was  

also produced before the High Court by the appellants.  

12.The aforesaid documents, filed on behalf of the appellants to  

justify  their  claim  at  Rs.  1,00,000/-  per  acre,  were  not  

accepted by the High Court as the aforesaid lands covered by  

the  said  sale  deeds  were  lands  which  were  situated  at  a  

distance of 2 to 3 kilometers from the acquired lands. There  

7

is no definite evidence to indicate the nature and quality of  

the said land, and hence there is nothing on record to show  

their comparability  with the acquired lands. We are of the  

considered opinion that the High Court rightly kept the said  

sale deeds out of its consideration for lands situated about 2  

to  3  kilometers  away,  which  could  not  be  said  to  be  

comparable lands with that of the acquired lands. There was  

no other direct documentary evidence which could prove and  

establish or act as a guide in determining the market value of  

the acquired lands. Therefore, the High Court fell back upon  

the capitalisation method of valuation for the acquired lands  

and in that process it  relied upon the extract of  the Fully  

Revised  Estimate  of  Area,  Production  &  Average  yield  of  

Commercial  Crops in Karnataka for  1995-96 published by  

the Directorate of Economics and Statistics. According to the  

Division Bench of the High Court the said document was the  

safe  guide  to  determine  the  market  value  of  the  acquired  

lands on the basis of capitalisation method.

13.The High Court considered the said document of Directorate  

of Economics and Statistics and found therefrom that during  

8

1995-96,  the  relevant  year  in  which  the  notification  for  

acquisition of the land in the present case was issued, the  

average yield of sugarcane per hectare was 90 tonnes for the  

State  of  Karnataka  and  the  average  yield  per  hectare  for  

Bijapur District was 106 tonnes and, therefore, according to  

the Division Bench average yield per acre was 36.422 tonnes  

[rounded off to 36 tonnes] for Karnataka and 42.89 tonnes  

for Bijapur District.  

14.There was no dispute with regard to the fact that price of  

jaggery at the relevant time was Rs. 700/- per quintal and on  

the  basis  thereof  and  after  making  calculation,  the  High  

Court  came  to  the  finding  that  the  market  value  on  the  

capitalisation  method would  come to  Rs.  75,600/-  for  the  

acquired sugarcane growing irrigated lands. The calculations  

on the basis of which the aforesaid figure was arrived at by  

the High Court in its judgment are stated  at para 18 which  

reads as follows: -  

“18. ………….. It is well-settled and recognized  that one ton of sugarcane will yield one quintal   of jaggery. If Rs. 700/- is the price of jaggery   per quintal,  40% has to be deducted towards  

9

cost  of  conversion  of  sugarcane  into  jaggery,   overheads, profit of dealer, and transportation.   The balance will  be Rs. 420/-. Out of it,  50%  will  have  to  be  deducted  towards  cost  of   cultivation. Therefore, net realization will be Rs.   210/-  per  tonne  of  sugarcane.  For  36 tonnes  the  realization  will  be  Rs.  7,560/-.  Thus  the  value of net yield will be Rs. 7,560/-. Thus the  value of net yield will  be Rs. 7,560/- per acre  after expenses. By applying the multiplier of 10,  for capitalisation, the market value will  be Rs.  75,600/-.”

15.The aforesaid calculation made by the Division Bench of the  

High  Court  was  challenged  before  us  by  the  counsel  

appearing for  the appellants contending  inter  alia that the  

aforesaid  document  on  which  reliance  was  placed  by  the  

High Court, although issued by a Government Department,  

the  same  should  not  have  been  accepted  as  it  was  not  

produced in the evidence. It was also submitted by her that  

reliance instead should have been placed on the certificate  

produced by her dated 24.02.1996 issued by the Assistant  

Director of Agriculture, Sindgi giving particulars of the yield  

in  respect  of  the  lands  in  Devangaon  Village  indicating  

standard yield of sugarcane as 60 tonnes per year per acre.  

Relying on the said document, it was submitted by her that  

10

as  one  tonne  of  sugarcane  could  yield  about  a  quintal  of  

jaggery and hence the yield of jaggery would be 60 quintals of  

jaggery which is of the value of Rs. 42,000/- and if 50 % was  

deducted towards cost of cultivation, the net yield was Rs.  

21,000/- and by capitalizing it with the multiplier factor of  

10, the market value would be Rs. 2,10,000/- per acre.  

16.When we consider the aforesaid submission in the light of  

the  records  we  find  that  at  least  in  two respects  there  is  

agreement between the parties, i.e., to the extent of sale price  

of  jaggery  being  Rs.  700/-  per  quintal  and  that  for  

capitalizing the market value the multiplying factor should be  

10.

17.The  aforesaid  certificate  dated  24.02.1996  was  shown  to  

have been issued by the  Assistant  Director  of  Agriculture,  

Sindgi but Assistant Director himself was not examined nor  

anybody from his office was examined to indicate as to under  

what circumstances the aforesaid certificate was issued and  

what is the basis of giving such a certificate and also to show  

what is the method of calculation to arrive at the aforesaid  

11

statistics.  The  said  document  was  produced  by  the  

appellants very casually and without there being any further  

evidence  in  support  of  the  aforesaid  contents  of  the  

certificate. It is not safe to rely on such a certificate, shown to  

have been issued by a Government officer without the author  

of the said certificate being produced for testing the veracity  

of the certificate and the contents thereof.  

18.Reliance was also placed by the counsel appearing for the  

appellants on the consent award which however again was  

not  accepted  by  the  High  Court  and  rightly  so,  we  feel,  

because the same was a consent award which cannot be said  

to be binding on the parties hereto. Therefore, there was no  

valid document in the instant case wherefrom it can safely be  

deduced as to what  the exact  market  price  of  the land in  

question could be. Therefore, there was no other option but  

to fall back upon the capitalisation method of valuation as  

there  is  no  other  safe  and  reliable  evidence  available  on  

record.  While  calculating  market  value  of  the  land on the  

basis  of  such capitalisation  method of  valuation,  the  High  

Court  relied  on  the  aforesaid  Government  document  

12

published  by  the  Directorate  of  Economics  and  Statistics  

which was also pertaining to the relevant year in question,  

i.e.,  1995-96.  According  to  the  said  document  which  was  

accepted as a reliable document, average yield per acre was  

36.422 tonnes [rounded off to 36 tonnes] for Karnataka and  

42.89 tonnes for Bijapur District. The High Court accepted  

the main statistics  for  arriving  at  the  market  value of  the  

land. On going through the format and method of calculation  

as appearing from paragraphs 16 and 18 of  the judgment  

and order of the Division Bench of the High Court, we do not  

find  any  reason  to  interfere  with  the  same  as  the  said  

calculation is found to be just and appropriate. Without any  

disputing material  on record,  we do not see as to why we  

should not accept the deduction of 40 per cent towards cost  

of conversion of sugarcane into jaggery and if that is accepted  

the  remaining  basis  of  the  calculation  is  found  to  be  

appropriate, as even according to the appellants, 50 per cent  

could be deducted towards cost of cultivation which was also  

the submission of the counsel appearing for the appellant as  

appearing from paragraph 7 of the judgment itself.  

13

19.Having  decided  thus,  with  regard  to  the  determination  of  

market  value  of  the  irrigated  lands,  we  now  focus  our  

attention to the determination of the market value for the dry  

lands which was fixed by the High Court at Rs. 38,000/- per  

acre.  There  again,  the  High  Court  relied  upon  the  earlier  

decision of the Division Bench  in respect of the land of the  

same village which was also acquired for the same purpose  

by  the  same notification.  The  aforesaid  decision  on which  

reliance was placed by the High Court in its judgment is also  

placed on record and on going through the same we find that  

the aforesaid decision to fix the market value of the land at  

Rs. 38,000/- was arrived at on the ground that the market  

value of the irrigated lands would be taken as about one-and-

half  times  of  the  value  of  dry  lands.  After  making  25%  

deduction  from  the  market  value  fixed  for  the  sugarcane  

growing irrigated lands, the Division Bench of the High Court  

arrived  at  a  finding  that  the  market  value  of  the  other  

irrigated  land  would  be  around Rs.  57000/-per  acre,  and  

consequent thereto, the High Court fixed the amount of Rs.  

38,000/- per acre for the dry land taking notice of one and  

14

half time calculation. The aforesaid calculation given by the  

High Court could not be assailed by the counsel appearing  

for the appellants by giving any other justification.

20.Once we have agreed with the findings of the Division Bench  

of the High Court to fix the market value of the sugarcane  

growing irrigated lands at Rs. 75,600/- per acre, necessarily,  

for the dry land the market value shall have to be held to be  

fixed  at  Rs.  38,000/-  per  acre,  by  following  the  aforesaid  

criteria which is ordinarily accepted and followed and also to  

be rational.

21.In that view of  the matter  we do not find any reasonable  

ground to interfere with the decisions of the High Court for  

fixing the market value of sugarcane growing irrigated lands  

at Rs. 75,600/- and at Rs. 38,000/- for the dry lands. We,  

therefore, find no merit in these appeals which are dismissed,  

but we leave the parties to bear their own costs.  

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

15

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

New Delhi, September 23, 2010.

16