REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 493 OF 2007

Faridabad Gas Power Project,  NTPC Ltd., etc.                                           .....         Appellants

Versus

Om Prakash & Ors., etc.                        .....     Respondents

W I T H

C.A.No.525/2007,  C.A.No.523/2007,  C.A.No.520/2007, C.A.No.518/2007,  C.A.No.524/2007,  C.A.No.506/2007, C.A.No.519/2007,  C.A.No.522/2007,  C.A.No.512/2007, C.A.No.508/2007,  C.A.No.502/2007,  C.A.No.507/2007, C.A.No.504/2007,  C.A.No.509/2007,  C.A.No.517/2007, C.A.No.553/2007,  C.A.No.554/2007,  C.A.No.552/2007, C.A.No.549/2007,  C.A.No.526/2007,  C.A.No.551/2007, C.A.No.510/2007,  C.A.No.516/2007,  C.A.No.514/2007, C.A.No.521/2007,  C.A.No.515/2007,  C.A.No.513/2007, C.A.No.511/2007,  C.A.No.584/2007,  C.A.No.582/2007, C.A.No.583/2007,  C.A.No.696/2007,  C.A.No.580/2007, C.A.No.579/2007,  C.A.No.574/2007,  C.A.No.576/2007, C.A.No.533/2007,  C.A.No.532/2007,  C.A.No.527/2007, C.A.No.529/2007,  C.A.No.530/2007,  C.A.No.531/2007, C.A.No.528/2007,  C.A.No.571/2007,  C.A.No.581/2007, C.A.No.578/2007,  C.A.No.575/2007,  C.A.No.500/2007, C.A.No.572/2007,  C.A.No.497/2007,  C.A.No.567/2007, C.A.No.563/2007,  C.A.No.565/2007,  C.A.No.561/2007, C.A.No.558/2007,  C.A.No.501/2007,  C.A.No.494/2007, C.A.No.564/2007,  C.A.No.560/2007,  C.A.No.559/2007, C.A.No.557/2007,  C.A.No.556/2007,  C.A.No.562/2007, C.A.No.555/2007,  C.A.No.499/2007,  C.A.No.536/2007, C.A.No.537/2007,  C.A.No.541/2007,  C.A.No.544/2007,

C.A.No.546/2007,  C.A.No.548/2007,  C.A.No.585/2007, C.A.No.586/2007,  C.A.No.587/2007,  C.A.No.588/2007, C.A.No.589/2007,  C.A.No.590/2007,  C.A.No.591/2007, C.A.No.592/2007,  C.A.No.535/2007,  C.A.No.547/2007, C.A.No.545/2007,  C.A.No.656/2007,  C.A.No.543/2007, C.A.No.542/2007,  C.A.No.540/2007,  C.A.No.539/2007, C.A.No.871/2007,  C.A.No.845/2007,  C.A.No.655/2007, C.A.No.698/2007,  C.A.No.569/2007,  C.A.No.566/2007, C.A.No.568/2007,     C.A.No.570/2007,       C.A. No.730 of 2009  [arising out of SLP(C) No. 7457/2007],  C. A. No. 731 of 2009    [arising out of SLP(C) No. 7460/2007],   C.A. No.732 of  2009  [arising out of SLP(C)No.7458/2008],   C. A. No. 735 of 2009  [arising out of SLP (C) No.3211/09 [CC 3846/2007 C. A. No.733 of 2009 [arising out of SLP(C) No. 3209/09 [CC 3880/2007],  C. A. No.734 of 2009  [arising out of SLP(C) No. 3210/09 [CC 3893/2007],   C. A. No. 736 of 2009  [arising out of SLP (C)No.11558/2007],  C.A.   No.737 of 2009  [arising out of SLP(C)No.9385/2007], C.A. No.738 of 2009  [arising out of SLP(C)No.9485/2007], C.A. No.739 of 2009  [arising out of SLP(C)No.7031/2006], C.A. No.740 of 2009  [arising out of SLP(C)No.7032/2006], C.A. No.741of 2009  [arising out of SLP(C)No.7033/2006], C.A. No.742 of 2009  [arising out of SLP(C)No.7008/2006]   

2

J U D G M E N T

Lokeshwar Singh Panta, J.

Delay  condoned  and  leave  granted  in  Special  Leave

Petitions.

1.1) The appellant-Faridabad Gas Power Project, NTPCL, has

filed Civil Appeal Nos.493, 523, 520, 518, 524, 519, 522, 512,

508, 502, 504, 509, 517, 553, 554, 552, 514, 521, 515, 513,

584, 582, 583, 596, 580, 579, 574, 576, 532, 527, 529, 531,

528, 571, 497, 567, 501, 494, 564, 560, 545, 656, 543, 540,

539, 570 of 2007 and Civil Appeal arising out of S.L. P. [C] No.

7033/06 with regard to village Mujheri; Civil Appeal Nos. 525,

506, 507, 549, 511, 533, 530, 561, 559, 557, 556, 562, 536,

541, 546, 586, 587, 590, 535, of 2007 and Civil Appeal arising

out of S.L. P. [C] Nos.7457, 9485 of 2007, 7032, 7008 of 2006,

7460, 7458, 3846, 3880, 3893, 9385 of 2007 with regard to

village Sihi; Civil Appeal Nos. 551, 510, 578, 565, 555, 499,

589, 592, 547 of 2007, Civil Appeal arising out of S.L. P. [C]

No.11558 of 2007 with regard to village Jhajru; Civil Appeal

Nos.544, 548, 588, 542, 655, 698 of 2007, and Civil Appeal

arising out of S.L.P. [C] No.7031 of 2006 with regard to village

Neemka and Civil Appeal Nos.516, 575, 500, 572, 563, 558,

537, 591 of 2007 with regard to village Pyala.

1.2) Civil  Appeal  Nos.569,  566 and 568 of 2007 have been

filed  by  claimants,  who  are  residents  of  village  Mujheri;

whereas  Civil  Appeal  Nos.526,  581,  585,  871,  845  of  2007

have been filed by claimants of village Jhajru for enhancement

of the amounts of compensation.

2. All the aforesaid appeals arise out of a common judgment

and  order  dated  29.05.2004  passed  by  the  High  Court  of

Punjab and Haryana at Chandigarh, in Regular First Appeal

No.1543 of 2000 and a batch of 146 connected appeals.  By

the  impugned judgment,  the  High Court  has  dismissed  the

appeals filed by M/s. Faridabad Gas Power Project, National

Thermal  Power  Corporation Limited,  as well  as  by the land

owners  and  confirmed  the  judgment  and  decree  dated

21.02.2000  passed  by  the  Additional  District  Judge,

Faridabad, in land references preferred under Section 18 of

the Land Acquisition Act, 1894.   Since common questions of

facts  and  law are  involved  in  these  cases  they  were  heard

together and are being decided by this common judgment.

3. The brief facts, which led to the filing of these appeals,

are as follows:-  

3.1) The  State  of  Haryana  issued  Notification  dated

16.08.1995 under  Section  4(1)  of  the  Land Acquisition Act,

1894 [for short ‘the Act’] for acquisition of a track of 319.31

acres of lands in five villages, namely, Mujheri (154.23 acres),

Neemka (67 acres), Sihi (73 acres), Jhajru (24.12 acres) and

Pyala  (0.96  acres)  situated  in  Tehsil  Ballabhgarh,  District

Faridabad, for public purpose, namely, for construction of 400

MW  Faridabad  Gas  Based  Power  Project  with  an  ultimate

capacity  of  1200  MW  [a  unit  of  National  Thermal  Power

Corporation Limited, Government of India Enterprise].   

3.2) The  Land  Acquisition  Collector,  Faridabad  [for  short

‘LAC’] awarded compensation at the rate of Rs. 2,50,000/- per

acre  for  Chahi  land,  i.e.  about  Rs.52/-  per  sq.  yard  and

Rs.2,00,000/- per acre,  i.e.  Rs.42/-  per  sq. yard for  Banjar

Kadim and Gair Mumkin lands falling in the revenue estate of

villages Mujheri, Neemka and Sihi.  For the land acquired in

village Jhajru, the LAC awarded compensation at the rate of

Rs.1,57,000/- per acre for  Chahi  land and Rs.1,50,000/- per

acre for ‘Gair Mumkin’ land.  With regard to the acquisition of

land in village Pyala, the LAC awarded compensation at the

rate of Rs.1,50,000/- per acre for Chahi land.  Other statutory

benefits  for  which  the  claimants  are  entitled  to  were  also

awarded to the land owners.   

3.3) Being aggrieved against and dissatisfied with the award

passed  by  the  LAC,  the  claimants  preferred  reference

applications under Section 18 of the Act.   According to the

claimants,  they  are  entitled  to  the  enhancement  of

compensation  as  their  land  acquired  by  the  State  has

potential  value for residential  or commercial purposes.  The

State  of  Haryana  contested  the  references,  inter  alia,

contending  that  the  land  owners  had  accepted  the

compensation  without  protest;  that  the  acquired  land  is

situated in different villages far away from the urban areas of

Faridabad  –  Ballabgarh  towns  and  did  not  possess  any

potentiality other than being agricultural land.

3.4) Before  the  reference  court  (Additional  District  Judge,

Faridabad),  the  parties  led  evidence  and  raised  mainly  the

following two issues:-

i) What  was  the  market  price  of  the acquired  land  on  the  date  of publication  of  notification  under Section  4(1)  of  the  Land  Acquisition Act, 1894?

ii) Whether  the  petitioners  are  estopped from  filing  the  petition  by  their  acts and conduct?

The  Additional  District  Judge  vide  common judgments

[judgment dated 21.02.2000 in respect of lands in the villages

Mujheri and Sihi and judgment dated 07.03.2000 in regard to

Neemka lands] awarded compensation at the rate of Rs.306/-

per sq. yard equivalent to Rs.14,81,040/- per acre for the land

acquired in villages Mujheri, Neemka and Sihi respectively.  In

regard to the lands acquired in village Jhajru situated away

from the lands at Mujheri, Neemka and Sihi, compensation at

the rate of Rs.190/- per sq. yard equivalent to Rs.9,19,600/-

per acre was awarded as per award dated 21.02.2000.  For the

land situated in village Pyala, the reference court is said to

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

acre.    In  answer  to  the  second  issue,  the  reference  court

observed  that  the  reference  applications  preferred  by  the

claimants under Section 18 of the Act, could be construed as

protest against the award and there was no need for them to

lodge  separate  protest  in  writing  before  accepting  the

compensation.   The  reference  court  allowed  the  reference

applications  made  by  the  claimants  and  accordingly,

enhanced the amounts of compensation.

3.5) A batch of appeals under Section 54 of the Act came to

be filed before the High Court of Punjab and Haryana, both by

NTPC praying for reduction  of  the amount  of  compensation

awarded by the reference  court,  and a section of  claimants

seeking enhancement of the amounts of compensation for the

acquired land.   

3.6) After  hearing  the  learned  counsel  for  the  parties  and

having gone through the award of the reference court as well

as other material on record, the High Court by its judgment

dated  29.05.2004  dismissed  all  the  appeals  and  thereby

confirmed  the  award  made  by  the  reference  court.   Hence,

these appeals  have been preferred by the NTPC and by the

claimants  challenging  the  correctness  and  validity  of  the

common judgment and order of the High Court.

4. In the light of the factual situation and having carefully

perused the judgment of the High Court impugned before this

Court, we have heard the learned counsel for all the parties.

5. Mr. S. K. Dhingra, learned counsel appearing on behalf

of  the  NTPC,  contended  that  sale  deeds  produced  by  the

appellants  ought  to  have  been  accepted  as  a  piece  of  best

evidence  for  determining  the  market  value  of  the  land  in

question, but the reference court as well as the High Court,

both  have  wrongly  ignored  the  said  transactions  from

consideration merely on the grounds that the instances of sale

portions of the land were made about  two years before the

Notification issued under Section 4(1) of the Act in the present

cases and approximately one year after the acquisition of the

land.    Reference to the sale deed dated 23.06.1994 (Exhibit

R6) (though the actual date of execution is 23.06.1994) has

been made by the  learned  counsel  vide which Raghbir  and

Ram Lal  had  sold  land  measuring  1  Kanal and  10  Marlas

situated in village Mujheri to Manoj Goyal (who is one of the

claimants  in  the  present  cases)  for  a  consideration  of

Rs.40,000/- [about Rs.44.40 per sq. yard].  Copy of another

sale  deed  dated  30.06.1993  (Exhibit  R5)  vide which  Smt.

Kamla had sold land measuring 1  Kanal 11  Marlas in village

Mujheri  in favour of Haria for a sum of Rs.39,000/- [about

Rs.41.58 per sq. yard] was also relied on by Mr. Dhingra to

emphasise his point that the courts below have grossly erred

in ignoring the above-said vital documentary evidence on the

basis of which just compensation could have been determined

and paid to the claimants.   

6. It  was  then  urged  by  Mr.  S.K.  Dhingra  that  for

determining  the  market  value  of  the  land  in  question,  the

reference court as well as the High Court have erred in placing

unnecessary reliance on award dated 29.04.1998 (Exhibit P7)

passed by the reference Court fixing the market value of the

land at village Sihi,  which was acquired for  development  of

Sector-II,  Faridabad  vide preliminary  notification  dated

23.11.1992 at the rate of Rs.250/- per square yard and  later

on enhanced by the High Court to Rs. 291/- per square yard

vide  judgment  dated  26.08.1999  (Ext.  PX)  by  ignoring  the

distance of about  2½ kms. between the lands in question and

the land acquired for Sector-II,  Faridabad, which is situated

on the western side of Agra Canal.  It was also submitted that

in any event determination of the market value of the acquired

lands  at  the  rate  of  Rs.  306/-  per  square  yard  by  giving

annual appreciation at the rate of 5% by the courts below for

agricultural  land  situated  in  villages  Mujheri,  Neemka  and

Sihi, was entirely speculative based upon unsatisfactory and

unreliable evidence led by the claimants.

7. The  learned  counsel  appearing  on  behalf  of  the

contesting claimants, submitted that the reference court and

the High Court both have rightly rejected the sale transactions

relied on by the NTPC as the said sale instances should not be

relied on as related to sale of stray pieces of land sold by the

sellers  for  lesser  consideration  for  obvious  stamp  duty

undervaluation or dire need.  It was also contended that sale

deed [Ex.  R5]  was rightly  ignored by the courts  below from

consideration for determining the market value of the acquired

land as the same was simply a distress sale executed by a co-

sharer  who had only  ⅛thshare  in the  entire  property.   He

submitted  that  the  sale  transaction  under  Ex.R6  dated

23.06.1996 was also rightly rejected as it related to a distress

sale of a share in a land subject to a 99 year lease without

possession.  It was also contended that the land acquired for

the  NTPC in villages  Mujheri,  Neemka and Sihi  are  located

close  to  Ballabgarh –  Tigaon Road and the evidence  led  by

NTPC itself  proved that two gas godowns,  six factories,  one

farm house and one poultry farm are in existence on the road

side  quite  adjacent  to  the acquired  land at the  time of  the

acquisition.  It was also contended that land situated in these

villages have great potential  for industrial  purposes.  It  was

emphasised that sale deed (Ex. R5) dated 30.06.1993 relied on

by NTPC was executed long prior to the date of Notification

under Section 4 of the Act and did not correctly  reflect  the

market value of the acquired land as it did not pertain to land

of similar nature and quality.  By assuming that Ex. R6 was

executed on 23.06.1996 he contended that Ex. R6 pertained

to  a  sale  subsequent  to  the  preliminary  notification  of  the

lands acquired and, therefore, had no evidentiary value.  He

next contended that in the present cases, the reference court

and the High Court both have properly fixed the market value

of the land on the basis of the award dated 29.4.1998 (Ex. P7)

as  confirmed  by  the  High  Court  vide  judgment  dated

26.08.1999  Ex.  PX  in  R.F.A.  No.  3502  of  1998.   It  was

submitted that there was an arithmetical error in calculation,

as the reference court and the High Court have held that the

claimants were entitled to an increase of 5% per year (that is

15% for 3 years)  over Rs.291/- per sq. yard determined for

lands  acquired  for  development  of  Sector-II,  Faridabad,  the

actual value ought to have been Rs.334.65, whereas what has

been awarded was only Rs.306/- per sq. yard and, therefore,

there  was  no  question  of  reducing  the  compensation  so

awarded.   In  the  facts  and  circumstances,  therefore,  the

question that arises for our consideration is:

“Whether  the  market  value  determined  by

the  reference  court  and confirmed by the  High

Court  is  correct  or  there  is  some  error  in

determining the compensation?”  

8. Before  considering  the  evidence  and  the  rival

submissions of the learned counsel  for the parties,  we may

refer  to  the  decisions  referred  to  by  the  parties  regarding

determination of the market value.    

8.1) In State of M. P. v. Shantabai (Smt.) & Ors. [(1995) Suppl.

2 SCC 28], relied upon by Mr. S.K. Dhingra, learned counsel

for NTPC, this Court observed that fixation of market value by

the Civil Court equivalent with reference to contemporaneous

sale transactions was proper.

8.2) In  Shakuntalabai  (Smt.) & Ors.  v.  State of  Maharashtra

[(1996)  2 SCC 152],  it  was held that if  there is evidence  or

admission on behalf of the claimants as to the market value

commanded  by  the  acquired  land  itself,  the  need  to  travel

beyond  the  boundary  of  the  acquired  land  is  obviated.

Further,  when  the  owner  himself  has  purchased  the  land

under acquisition few years earlier to the Notification under

Section 4 of the Act, the consideration mentioned in the sale

deed would form the basis to determine the market value and

it is unnecessary to travel beyond that evidence and consider

the market value prevailing in the adjacent lands.

8.3) In Krishi Utpadan Mandi Samiti, Sahaswan, Distt. Badaun

through its Secretary v. Bipin Kumar & Anr. [(2004) 2 SCC 283],

it is held that basic valuation register maintained for stamp

duty purposes cannot be relied  upon while  determining the

market  value  of  the  acquired  land  and  further  that

comparable  sales  method is the best acceptable  method for

such determination.

8.4) In  V.  Hanumantha  Reddy  (dead)  by  LRs.  v.  Land

Acquisition Officer  & Mandal  R.  Officer  [(2003)  12 SCC 642],

this Court held that while determining the market value of the

acquired land lying in the interior areas, the sale instances of

the land abutting the National Highway cannot be relied on for

determining the compensation of land which was situated 100

yards from the National Highway.

8.5)   In K. S. Shivadevamma & Ors. v. Assistant Commissioner

& LAO & Anr. [(1996) 2 SCC 62; Basavva (Smt.) & Ors. v. Spl.

Land  Acquisition  Officer  &  Ors.  [(1996)  9  SCC  640  and  in

Kasturi  & Ors.  v.  State of  Haryana [(2003)  1 SCC 354], this

Court held that in respect of agricultural land or undeveloped

land  which  has  potential  value  for  housing  or  commercial

purposes,  deductions  between  53%  to  33.33%  should  be

deducted towards the cost of development out of the amount

calculated with reference to market value of developed land.

In some cases where the acquired land is semi-developed or

having road and other facilities, this Court has restricted the

deduction  even  to  20%,  but  that  is  in  exceptional

circumstances.   In  short,  the  extent  of  deduction  depends

upon the nature, location, extent of expenditure involved for

development of the land so as to make the plots for residential

or commercial purposes and the area required for laying out

roads and other civic amenities.  

8.6) In Union of India v. Pramod Gupta (Dead) by LRs. & Ors.

[(2005) 12 SCC 1], this Court held:  

“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 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 records,  as  stated  hereinbefore,  would  be admissible in evidence.

27. Even if the Union of India had not preferred any appeal against the said judgment and award; it  would  not  be  estopped  and  precluded  from raising the said question in a different proceeding as in a given case it is permissible in law to do the  same  keeping  in  view  the  larger  public interest.”

This Court reiterated that one of the modes of computing the

market  value  would  be  with  reference  to  judgments  and

awards  passed  in  respect  of  acquisitions  of  similar  land

subject  to  such increase  or  decrease  thereupon as  may be

applicable having regard to the accepted principles laid down

therefor.   The  extent  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.  This Court also reiterated that

for  the  purpose  of  determining  the  market  value  of  the

acquired lands on the basis of the comparable sales method,

the land sought to be compared must be similar in potentiality

and nature. It also took note of the fact that the market value

of agricultural lands is lower than that of the land suitable for

commercial  purposes.  This  Court  also  cautioned  that  the

enormity  of  financial  implication of  enhancement  in view of

the size of the land acquired for a particular project should be

kept in mind.

8.7) In  Land  Acquisition  Officer,  Kammarapally  village,

Nizamabad District, A. P.  v.  Nookala Rajamallu & Ors.

[(2003) 12 SCC 334 (para 9)], it was observed:

“It can be broadly stated that the element of speculation is reduced to a minimum if the  underlying  principles  of  fixation  of market  value  with  reference  to comparable sales are made:

i) when sale is within a reasonable time of the  date  of  notification under  Section 4 (1);

ii) it should be a bona fide transaction;

iii) it should be of the land acquired or of the land adjacent to the land acquired; and

iv) it should possess similar advantages.”

8.8)   In Panna Lal Ghosh & Ors. v. Land Acquisition Collector &

Ors. [(2004) 1 SCC 467), this Court said that the most reliable

way to determine the value is to rely on the instances of sale

portions of the same land as has been acquired  or adjacent

lands made shortly before or after the Section 4 Notification.   

8.9)   In the case of Suresh Kumar v. Town Improvement Trust,

Bhopal  [(1989)  2  SCC  329],  in  a  case  under  the  Madhya

Pradesh Town Improvement Trust Act, 1960, this Court has

held  that  the  rates  paid  for  small  parcels  of  land  do  not

provide a useful guide for determining the market value of the

land  acquired.   While  determining  the  market  value  of  the

land acquired, it has to be correctly determined and paid so

that  there  is  neither  unjust  enrichment  on  the  part  of  the

acquirer nor undue deprivation on the part of the owner.  

8.10) In Mehta Ravindrarai Ajitrai (Deceased) through his Heirs

and LRs. and Others v. State of Gujarat [(1989) 4 SCC 250], this

Court held that the market value of a property for purposes of

Section 23 of the Land Acquisition Act is the price at which

the property changes hands from a willing seller to a willing,

but not too anxious a buyer, dealing at arms length.  Prices

fetched  for  similar  lands  with  similar  advantages  and

potentialities under  bona fide transactions of sale  at or about

the  time  of  the  preliminary  notification  are  the  usual  and,

indeed the best evidences of market value.  Nelson Fernandes

& Ors. v.  Special  Land Acquisition Officer,  South Goa & Ors.

[(2007) 9 SCC 447] is the ratio to similar effect.   

8.11)  In  Ranjit Singh & Ors. v. Union Territory of Chandigarh

[(1992) 4 SCC 659], this Court held that the market value of

lands acquired pursuant to the preliminary notification could

not  have  been  freezed  at  the  same  market  value  fixed  for

similar  lands  acquired  under  a  previous  notification  after

lapse of period of one year and the general increase of land

prices during that period, higher market value say about 10%

per year should be awarded.  In Delhi Development Authority v.

Bali Ram Sharma & Ors. [(2004) 6 SCC 533], it is  held that in

cases where the purpose of acquisition was the same but the

notification under  Section 4(1)  was issued on a subsequent

date, obviously there would be escalation of prices in regard to

those lands.  Hence, it would be just and appropriate to give

an annual increase of 10% in the market value in respect of

the lands which were acquired by a subsequent notification.

In The General Manager, Oil & Natural Gas Corporation Ltd. v.

Rameshbhai Jivanbhai Patel & Anr. [JT 2008 (9) SC 480], it is

held that increase in market value in urban/semi-urban areas

was  about  10%  to  15%  per  annum,  the  corresponding

increase in rural areas would at best be around half of it, that

is about 5% to 7.5% per annum, in the absence of evidence of

sudden spurts or fall in prices.

8.12)  In  Viluben Jhalejar Contractor (Dead) by Lrs. v. State of

Gujarat [(2005) 4 SCC 789], it is reiterated that the relevant

factors for the determination of compensation are comparable

instance has to be identified having regard to the proximity

from time angle as well as proximity from situation angle.  For

determining the market value of the land under acquisition,

suitable adjustment has to be made having regard to various

positive  and  negative  factors  vis-à-vis  the  land  under

acquisition by placing the two in juxtaposition.  The positive

factors are  (i)  smallness of size (ii)  proximity to a road; (iii)

frontage on a road; (iv) nearness to developed area; (v) regular

shape,  (vi)  level  vis-à-vis land  under  acquisition  and  (vii)

special value for an owner of an adjoining property to whom it

may  have  some  very  special  advantage  and  the  negative

factors are: (i) largeness of area;  (ii)  situation in the interior at

a distance from the road; (iii) narrow strip of land with very

small frontage compared to depth; (iv) lower level requiring the

depressed  portion  to  be  filled  up;  (v)  remoteness  from

developed  locality  and  (vi)  some  special  disadvantageous

factors which would deter a purchaser.

8.13)   In  ONGC Limited v. Sendhabhai Vastram Patel & Ors.

[(2005) 6 SCC 454], it is held that instances of sale in respect

of  the  similar  land  situated  in  the  same  village  and/or

neighbouring  villages  can  be  taken  as  guiding  factors  for

determination of market value.   In Union of India v. Harinder

Pal Singh & Ors.   [(2005)  12 SCC 564], this Court observed

that in the absence of any contemporaneous document, the

market  value  of  the  acquired  land  in  a  village  which  was

acquired at the same time as the lands in other villages, was

considered to be correct comparative unit for determination of

the market value of the acquired lands.  On the other hand in

Kanwar Singh v. Union of India [(1998) 8 SCC 136], this Court

cautioned  that  transactions  of  neighbouring  village  are  not

reliable where the situation and potentialities of lands in the

two villages were different.     

8.14)  We will now examine the correctness and legality of the

judgment  of  the  High  Court  affirming  the  decision  of  the

reference court, in the light of the well-settled principles and

the evidence led by the parties in these cases.

Re: lands at Mujheri, Sihi and Neemka

9. In  support  of  their  claims,  the  claimants  led  evidence

both  oral  and  documentary.   The  documents  relied  on

included the Site Plan (Ex. P1); Aks-Shajra of village Mujheri

(Ex.  P2);  latest  Development  Plan  (Master  Plan)  (Ex.  P3);

Receipt (Ex. P4), copy of sale deed dated 07.01.1994 (Ex. P6)

vide  which  Ramlal  sold  land  measuring  100  sq.  yards  in

favour of  M/s. Assemblies  of God for Rs. 33,000/-; copy of

judgment dated 29.04.1998 (Ex. P7) passed by the Additional

District Judge, Faridabad in LAC Case No. 185/97 titled Ved

Prakash and Ors. v.  State of  Haryana & Ors. and connected

cases whereby and whereunder compensation was awarded at

the rate of Rs. 250/- per square yard in respect of the land

acquired  by  the  State  of  Haryana  vide  Notification  dated

23.11.1992 for development of Sector-II,  Faridabad; Copy of

judgment  dated  07.08.1997  delivered  by  Additional  District

Judge, Faridabad in LAC Case No. 607/97 (Ex. P8) titled Tek

Singh  v.  LAC  and  other  connected  cases  whereby

compensation was awarded at the rate of Rs. 392.50 per sq.

yard in respect  of  the  land acquired  vide notification dated

05.06.1992 and dated 04.06.1993 for development of Sector

20-B Faridabad; copy of judgment dated 27.10.1997 (Ex. P9)

passed by Additional District Judge in LAC Case No.282/97

titled  Nathan  Singh  v.  LAC  and  other  connected  cases

awarding compensation at the rate of Rs. 435/- per square

yard in respect  of  the  land acquired  vide notification dated

07.04.1996  for  green  belt  of  West  of  Delhi-Mathura  Road,

Sector–12, Faridabad.  

10. In rebuttal, NTPC and the State examined ten witnesses

and tendered  in evidence  Development  Plan of  Faridabad –

Ballabgarh  Controlled  Area  (Ex.  R1);  award  of  Land

Acquisition  Collector  (Ex.  R2);  copy  of  payment  of

compensation (Ex.  R3);  copy of  sale  deed  dated 30.06.1993

(Ex. R5) vide which Smt. Kamla sold 1 kanal 11 marlas land in

favour of Haria for a sum of Rs. 39,000/-; copy of sale deed

(Exhibit R6) dated 23.6.1996 vide which Raghuvir and Ramlal

sons of Lal Singh sold land measuring 1  kanal 10  marlas in

favour of Manoj Goyal for Rs. 40,000/-; copy of mutation of

sales  for  the  year  1992-93  (Ex.  R7)  and  a  copy  of  Site

(Development) Plan (Ex. R-8).   

11. The  reference  court  as  well  as  the  High  Court  have

considered  the  entire  oral  and  documentary  evidence  on

record  and  concluded  that  the  sale  deed  [Ex.  P6]  dated

07.01.1994  on  which  reliance  has  been  placed  by  the

claimants cannot be considered as a comparable instance to

determine  the  market  value  of  large  extent  of  the  acquired

land as the document Ex. P6 pertained to a small piece of land

measuring only 100 sq. yards in the developed area of village

Sihi which was sold by Ramlal in favour of M/s Assemblies of

God, New Delhi for a sum of Rs. 33, 000/-.  We find no fault in

the finding of the courts below in rejecting the sale deed (Ex.

P6) on the well-reasoned ground.  The copy of the mutation

entries  of  sales  transaction  effected  in  the  year  1992-93

cannot be accepted as admissible evidence for determining the

market  value  of  the  land  acquired.   The  sale  deed  dated

30.06.1993 (Ex. R5) has been rightly rejected by the reference

court  and  the  High  Court  because  the  said  sale  deed  was

executed about two years prior to the preliminary notification

issued in the present cases and the said sale is nothing but a

distress  sale  made by a co-owner  who had only one-eighth

share in the land.  Sale deed dated 23.06.1996 (Ex. R6) is also

rightly rejected as it relates to a share in a land, which was

given on lease  for  a period  of  99 years  without  possession.

Exhibits P1, P2, P3 and R1 would merely reflect the location of

the  land  acquired  and  Exhibit  P3  and  Exhibit  R1  are  the

Development Plans for Faridabad – Ballabgarh Controlled Area

issued from the office of the MCF, Faridabad.   

12) It is not in dispute that 154.23 acres of acquired land in

village Mujheri was adjacent to Sector-II, Faridabad, for which

preliminary  notification  was  issued  on  23.11.1992  and  by

award dated 29.04.1998 (Ex. P7), the reference court awarded

compensation at the rate of Rs. 250/- per square yard.  Being

aggrieved  thereto,  the  claimants  and  the  Government  of

Haryana both preferred Regular First Appeals before the High

Court of Punjab and Haryana.  The High Court vide Judgment

dated 26.8.1999 allowed Regular First Appeal No. 3502/1998

of the claimants titled Ved Prakash & Anr. v. State of Haryana

and enhanced the market value to Rs. 291/- per square yard.

A copy of the judgment dated 26.08.1999 [Ex. PX] of the High

Court  was  placed  on  record  of  the  reference  court  in  the

present proceedings, which was not objected to and disputed

by  the  NTPC.   The  reference  court  relying  on  the  said

judgment of the High Court came to the conclusion that the

land  in  question  was  similar  in  quality  and  by  adding  5%

increase, the market value of the acquired land is enhanced

from Rs.250/- per square yard to Rs.291/- per square yard.

The High Court has also observed that by all standards there

existed similarity of location and potential  value of the land

acquired by NTPC and the land for Sector-II, Faridabad which

was utilized for urbanization.   

13. It  is  the  evidence  of  Mohinder  Singh-claimant [P.W. 4]

that  the  boundaries  of  villages  Mujheri  and Sihi  adjoin  the

boundaries  of  lands  situated  in  villages  Okhla  and

Muharajpur.   He  stated  that  at  the  time  of  publication  of

Notification under Section 4 of the Act in the present cases,

the market value of the land was approximately Rs. 1,200/- to

Rs.  1,500/-  per  square  yard.   There  is  pucca road  from

Ballabgarh  to  village  Tigaon  which is  extended  upto  village

Manjhawali  and the land situated at village Mujheri  adjoins

the  land  situated  at  Ballabgarh-Tigaon  Road.   It  is  his

evidence that the potential value of the land falling within the

vicinity of village Mujheri and village Sihi are the same.  This

witness  has  given  speculative  market  value  of  the  land

without any basis.   Therefore,  his evidence in regard to the

market value of the land does not lead us to believe that the

market  value  of  the  acquired  land  was  approximately

Rs.1,200/- to Rs.1,500/- per  square  yard.  The  evidence  of

this  witness  mainly  deals  with the  location  of  the  acquired

land.    

14.  R.W. 4 – Dharambir Singh, Deed Writer, District Court,

Faridabad is the subscriber of original sale deed Exhibit R5.

In  cross-examination  this  witness  admitted  that  village

Mujheri  is  situated  on  Ballabgarh-Tigaon  Road.   He  also

admitted that the acquired land of village Mujheri adjoins the

land of village Sihi, a part of which has also been acquired for

the purpose of NTPC and out of the vast track of lands, some

area  was  earlier  acquired  for  development  of  Sector-II,

Faridabad.  He stated that many factories are in existence in

the village.  There exists a water treatment plant just opposite

to the acquired land in village Mujheri  and on the opposite

side of village Mujheri,  a vast track of land falling in village

Neemka  has  been  acquired  by  HUDA  for  the  purpose  of

establishment of big industries.  According to him, at the time

of Notification issued under Section 4 of the Act, the value of

the acquired land was Rs. 900/-  to Rs. 1,000/- per square

yard.  R.W. 6 – Bisham Singh, at the relevant time was posted

as  Patwari  in Land Acquisition Collector’s  Office, Faridabad.

He has placed on record two awards of  the  reference  court

passed  in  LAC  Case  No.  607/1997  and  LAC  Case  No.

282/1997.   In  cross-examination,  he  admitted  that  he  has

seen the land acquired in village Mujheri and the land earlier

acquired for development of Sector-II,  Faridabad.  He stated

that Agra Canal falls between land at village Mujheri and land

in  Sector-II,  Faridabad  and  the  land  acquired  at  village

Mujheri  is situated on Ballabgarh - Tigaon Road.  R.W. 7 –

Ashok  Kumar  Patwari,  village  Mujheri,  Tehsil  Ballabgarh

stated that lands of villages Sihi and Mujheri are situated on

Ballabgarh-Tigaon Road and there exists a disposal tank just

opposite to the acquired land across the Ballabgarh – Tigaon

Road which is located in Mirjapur.  He deposed that near the

acquired  land  at  village  Mujheri,  there  are  three  or  four

factories in existence, besides gas godowns etc. and the abadi

of  village  Sihi  has extended  upto Agra Canal  near  Sector-II

and Sector-III, Faridabad.  He admitted that the value of the

land near Sectors-II  and III,  Faridabad are not less than Rs.

1000/-  per  square  yard  and  the  value  of  lands  at  village

Mujheri and village Sihi could not be assessed less than Rs.

500/-  to  Rs.  600/-  per  sq.  yard  during  the  years  1996  to

1999.  It is the evidence of R.W. 8 – Mohanlal, Field Kanungo

posted  at  Ballabgarh  that  in  terms  of  the  order  of  the

Tehsildar,  he  demarcated  the  acquired  land  at  the  time  of

acquisition.  He stated that on the western side of the lands,

there are agricultural lands of village Sihi and on the eastern

side of the acquired lands there is a track of agricultural lands

of  the land owners of  villages  Neemka,  Navada,  Tigaon and

Mujheri  respectively.   He  admitted that  abadi of  Ballabgarh

has  extended  upto  Sector-II,  Faridabad  and  after  Sector-II

there  exists  Agra  Canal  and  farther  thereto  village  Sihi  is

situated.   He  also  stated  that  two  small  factories  are  in

existence apart from gas godowns adjoining to village Mujheri

and  the  land  acquired  for  NTPC  adjoins  Ballabgarh-Tigaon

Road.  He further stated that the land in question acquired at

villages Mujheri,  Neemka and Sihi were of the same quality

and potentiality.

15. The  evidences  led  by both sides  shows that  the  relied

upon judgment relates to acquisition of lands for development

of Sector-II,  Faridabad, situated on the western side of Agra

canal  and the lands acquired  for  NTPC,  which are  subject-

matter of these appeals, are situated on the eastern side of the

Agra  canal.   The  evidence  also  discloses  that  the  areas  of

villages Mujheri and Sihi on the western side of the Agra canal

are far better developed and are close to urban areas.  On the

other hand, the lands on the eastern side of the Agra canal

acquired for NTPC were undeveloped and purely agricultural

in nature. The evidence also shows that the distance between

the two lands separated by the Agra canal may vary from 1 km

to 2.5 km.  

16. The  evidence  of  RW.7-Ashok  Kumar,  Patwari  Halqa

Mujheri,  Tehsil  Ballabgarh,  clearly  establishes  that  the

acquired land was agricultural land which was surrounded by

left out agricultural lands of the owners.  His statement finds

corroboration with RW-8-Mohan Lal, Field Kanungo, who also

deposed that on the western side of acquired land there exists

large area of agricultural land situated at village Sihi and on

the  eastern  side  there  are  agricultural  lands  of  villages

Neemka,  Mujheri,  Navada  and Tigoan  and on the  northern

side there is a Tigaon Road and agricultural lands of village

Neemka and on the southern side there are agricultural lands

at village Mujheri.  It has come in the evidence of PW-1 Satya

Prakash Mittal, Draftsman in Civil Court Premises, Faridabad

that ‘abadi’  of  village  Sihi  falls  on the western side of  Agra

Canal whereas the acquired lands were situated to the east of

Agra  Canal  at  a  distance  of  1  km on  eastern  side  of  Agra

Canal.  

17. On  an  independent  scrutiny  of  the  above-referred  to

entire evidence placed on record, it is proved that the entire

chunk of acquired land was purely agricultural in quality and

of  lesser  potentiality.   The  lands  acquired  for  Sector-II,

Faridabad, as per notification dated 23.11.1992 were situated

in a better developed area with greater potentiality than the

lands acquired for NTPC.  

18. On the facts and circumstances of the matters before us

and  difference  in  quality  and  potentiality  of  the  lands

acquired,   we are  of  the  view that the market  value  of  the

acquired lands for NTPC when compared to the lands acquired

for Sector-II,  Faridabad, should be reduced by at least one-

fifth (20%). The value of Sector-II lands had been determined

at Rs.291/- per square yard with reference to a preliminary

notification issued on 23.11.1992.  As on 16.08.1995 (date of

preliminary notification in regard to the acquired lands), the

market value of lands acquired for Sector-II was Rs.291/- plus

a cumulative increase of 7.5% per year for three years, which

works  out  to  be  Rs.361.50p.  per  square  yard.   If  20%  is

deducted  from the  said  market  value  on  account  of  lesser

potential  value  and  quality  of  the  acquired  land  and  the

distance  between  the  two  areas,  the  market  value  of  the

acquired  land  would  be  Rs.289/-  per  square  yard.   We,

accordingly,  hold  that  the  market  value  for  the  acquired

agricultural  lands  situated  at  Mujheri,  Sihi  and  Neemka

should be Rs.289/- per square yard.

Re : Lands at Jhajru  

19. The  LAC  awarded  compensation  at  the  rate  of

Rs.1,57,000/-  for  Chahi lands  and  Rs.1,50,000/-  for  Gair

Mumkin and  Banjar  Kadim lands.  The  reference  court

increased it to Rs.190/- per square yard (Rs.9,19,600/- per

acre).   The  lands  at  village  Jhajru  are  far  away  from  the

acquired lands of villages Mujheri, Sihi and Neemka.  Lands at

village  Jhajru  were  also  agricultural  lands  situated  beyond

Sectors  58  &  59  of  Faridabad  Town.   The  reference  court

relied upon the market value of Rs.155/- per square yard as

determined in respect of an acquisition of land on 10.06.1988

for  Sector-59.  As  the  acquisition  for  NTPC  was  in  1995,  it

determined the market value as Rs.190/- per square yard, by

providing an increase of Rs.5/- per year.  

20. Learned  counsel  for  the  appellants  submitted  that  at

least the market value of the acquired land ought to have been

determined at the rate of Rs.425/- per square yard awarded

for  acquisition  of  land  for  Sector-59  by  notification  dated

10.07.1995 and covered  by award of  the reference  court  in

LAC  No.26  of  14.08.2003  decided  on  31.03.2004.

Alternatively,  it  was  submitted  that  yearly  increase  should

have been calculated at the rate of 10% per annum for 7 years

over  the  market  value  of  Rs.155/-  per  square  yard  and

increase awarded in these cases at the rate of Rs.5/- per year

is at a lower rate and wholly unjustified.   

21. In the facts and circumstances, we are of the view that

the reference court should have worked out the market value

of the acquired land by calculating an increase at least at the

cumulative rate of 7.5% per annum for 7 years to arrive at the

market  value  as  determined  in  the  year  1995  and  then  it

ought  to  have  deducted 20% in that value  as the  acquired

lands were farther away from Sector-59.  Thus, we determine

the market value for the Jhajru lands at Rs.205/- per square

yard (that is 80% of Rs.155/- increased by 7.5% for 7 years).  

Re : Land at Pyala:

22. A  small  track  of  0.96  acres  of  land  was  acquired  in

village Pyala.   This village is  located in the  close  vicinity of

Sector-59,  Faridabad.   The  Collector  awarded  compensation

for  the  acquired  land  in  this  village  at  the  rate  of

Rs.1,50,000/- per acre irrespective of the quality of land.  The

reference  court  vide  Award dated  21.02.2000 enhanced  the

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

NTPC in support of its case has produced copies of Mutation

of Sale (Exs. R2 and R4) pertaining to the period 1992 to 1995

for determining the market value of the acquired land in this

village.  Exs. R1 and R7 are the final development plans for

Faridabad-Ballabhgarh Controlled Area which show the exact

location of the acquired land.  As per Aks Shajra (Ex. R3), the

acquired land was situated at a distance of 2 to 3 Kilometres

from Delhi-Mathura  Road.   It  has  come  in  the  evidence  of

Hukam  Singh,  who  at  that  time  was  posted  as  Patwari  at

village  Pyala,  that  the  acquired  land  was  surrounded  by

Bharat  Petroleum  Corporation  Ltd.  and  Indian  Oil

Corporation, etc.  He also admitted that the land was acquired

by NTPC for commercial purposes.  The reference court and

the High Court both have not found any tangible evidence led

by NTPC to rebut the claim of the claimants.  In that view of

the matter, we do not find any manifest error or perversity in

the judgment of the reference court fixing the market value of

the acquired land at Rs.3,00,000/- per acre which has been

confirmed by the High Court.     

23. In  view  of  the  above,  the  appeals  are  disposed  of  as

follows:-  

i ) The Civil Appeals filed by the NTPC in regard to the

lands acquired at villages Mujheri,  Sihi and Neemka

are allowed in part and as a result thereof the market

value of the lands acquired is reduced from Rs.306/-

per square yard to Rs.289/- per square yard.  

ii) The  appeals  filed  by  claimants-land  owners  for

enhancement of compensation in regard to acquisition

of  lands  of  villages  Mujheri,  Sihi  and  Neemka  are

dismissed.  

ii i) In regard to the lands at village Jhajru, the appeals of

NTPC  are  dismissed  and  the  appeals  of  the  land-

owners of Jhajru are allowed in part and the market

value  is  increased  from  Rs.190/-  to  Rs.205/-  per

square yard.

iv ) In  regard  to  lands  at  village  Pyala,  the  appeals  are

dismissed  and  the  compensation  determined  is

confirmed.

v ) The solatium, additional amount and interest awarded

by  the  reference  court  and  confirmed  by  the  High

Court are left in tact.  

vi ) Parties are left to bear their respective costs.  

........................................J.                                                (R. V. RAVEENDRAN)

........................................J.                                               (LOKESHWAR SINGH PANTA)

New Delhi, February  05, 2009.