http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

CASE NO.: Appeal (civil)  5708 of 2002

PETITIONER: Om Prakash (D) by Lrs. & Ors.

RESPONDENT: Union of India & Anr.

DATE OF JUDGMENT: 05/08/2004

BENCH: Shivaraj V. Patil & B. N. Srikrishna.

JUDGMENT: J U D G M E N T

with          Civil Appeal Nos. 5709 of 2002,   8591-8592 of 2003   and  Civil Appeal No. 4986 of 2004 @ SLP (C) No. 21335 of 2002, Civil Appeal No. 4991 of 2004 @ SLP (C) No. 21342 of 2002, Civil Appeal No. 4990 of 2004 @ SLP (C) No. 23385 of 2002,          Civil Appeal No. 4989 of 2004 @ SLP (C) No. 1632 of 2003,         Civil Appeal No.  4987 of 2004 @ SLP (C) No. 12968 of 2003 and    Civil Appeal No. 4988 of 2004 @ SLP (C) No. 21343 of 2002

SRIKRISHNA, J.

       Leave granted in the special leave petitions.         These appeals are directed against the judgment of the High Court of  Delhi in appeals filed under Section 54 of the Land Acquisition Act, 1894  (hereinafter referred to as the ’Act’) for determining the compensation  payable for certain lands acquired under the provisions of the Act.

Villages Bhorgarh, Kureni and Mamurpur are located side by side and  the lands situated in these villages were used for agricultural purposes or  purposes subservient thereto.  Under the provisions of Sections 22 and 23 of  Delhi Land Reforms Act, 1954 there were certain restrictions on land usage  due to which the lands could only be used for agriculture, horticulture,  animal husbandry and allied uses. In the master plan the lands were shown  in the green belt.  By a   Notification dated 8.12.1982, issued by the   Government of India, Ministry of Works and Housing, the Central  Government in exercise of its power under sub-section (2) of Section 11 A  modified the master plan for Delhi. The modifications made were as under: "(i)   The land of an area measuring 21.043 hects. (52 acres)  located near Narela Town and situated on the west of  Railway line to Ambala is changed from ’Agricultural  Green Belt’ to ’Commercial (Warehousing and storage  depots)’

(ii)   The land use of an area measuring about 21.043 hects.   (52 acres) located near Village Ghevra and situated on  the North of Railway line to Rohtak is changed from  ’Agricultural Green Belt’ to ’Commercial (Warehousing  and storage depots)’ ".

       On 2.6.1983, a notification was issued under Section 4(1) of the Act,  whereby the lands for certain parcels situated within the said area were  sought to be acquired for the  public purpose of construction of godowns for  the Food Corporation of India.  This was followed by a declaration under  Section 6 of the Act made on 22.7.1983.  Further proceedings under the Act  ensued and on 5.9.1983, the Land Acquisition Collector made an award in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

each of the cases.  The Collector categorized  the lands falling for  acquisition into three blocks, namely, ’A’, ’B’ and ’C’.  He awarded a  compensation of Rs.10,000/- per bigha for land in Block ’A’,  Rs. 8,000/-  per bigha for land in Block ’B’ and Rs. 5,000/- per bigha for land in block  ’C’.  He also awarded compensation for wells, trees and structures.  Not  being satisfied with the compensation awarded by the Collector, the  claimants moved for references under Section 18 of the Act.  The Reference  Court by its judgment dated 12.3.1999 enhanced the market value of the  acquired lands to a uniform rate of Rs.36,300/- per bigha as on the date of  the notification under Section 4 of the Act.  It also granted other reliefs  available under the Act.   The claimants filed Regular First Appeals under Section 54 of the Act  questioning the correctness of the judgment rendered by the Reference  Court.  The High Court assessed the market value of the lands of the  claimants at Rs.82,255/- per bigha.  It also directed solatium @ 30% on the  enhanced amount of compensation and interest @ 9% per annum for a  period of one year from the date of Collector taking possession and  thereafter @ 15% per annum till payment of compensation and on additional  amount @ 12% on the market value from the date of notification till the  possession. It was also directed that if interest was held payable on solatium  in the case pending before the Supreme Court, such interest will be paid to  the claimants.  

       In civil appeals Nos. 5708/2002 and 5709/2002, the claimants- appellants have impugned the judgment of the High Court while the Union  of India is in  appeal in civil appeal Nos. 8591-8592/2003 and civil appeals  arising out of S.L.P. Nos. 21335/2002, 21342/2002, 21343/2002,  23385/2002, 1632/2003, and 12968/2003.   

       The only question argued before us was the assessment of the market  value of the acquired lands as on the date of the notification under Section 4  of the Act.  No other issue was canvassed.  The High Court has correctly  found that the topography, potentiality and advantages attached to and  available to the lands in the five adjoining villages, namely, Bhorgarh,  Kureni, Mamurpur, Narela and Tikri Khurd were almost the same on the  date when the notification under Section 4 was issued.  It also referred to the  fact that in its judgment in R.F.A. 554/92 (Dharambir & Ors.  vs.  Union of  India, decided on 23.9.1996)  the market value of the land had been assessed  at Rs.25,000/- per bigha as against the assessment made by the Reference  Court @ Rs.17,500/- per bigha.  An appeal therefrom was carried to this  Court and is the subject matter of the decision of this Court in civil appeal   No. 4405/1997 (Union of India  vs. Dharambir & Ors). While allowing the  appeal of the State Government, this Court held that Rs.16,750/- per bigha  was the fair market value of all categories of land situate at village  Mamurpur as on the date of the notification under Section 4 of the Act, i.e.,  on 30.10.1963.  

       While the claimants-appellants urged that after the notification issued  on 8.12.1982 the lands in question had acquired great commercial  potentiality and that this fact had been lost sight of by the High Court in  assessing the fair market value as on the date of the notification under  Section 4 of the Act, the learned counsel for the Union of India contends  that, despite the change in the master plan, there was hardly any change in  the land use between 8.12.1982 and  2.6.1983 when the notification under  Section 4 of the Act was issued.  The land had been continued to be used for  agricultural and allied purposes and there was no commercial exploitation of  the land at all despite it being allowed as a result of change in the master  plan.

       Interestingly, a perusal of the appeal memorandum of the Union of  India shows that, even according to the Union of India the ascertainment of  the fair market value of the lands in question should have proceeded on the  basis of Rs.16,750/- per bigha as on 30.10.1963 with 12% escalation per  year.  If this method is adopted, according to the Union of India, the fair  market value of the land as on the date of the notification under     Section 4

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

of the Act would come to Rs.56,112/- per bigha. [See ground (e) in the  appeals arising out of SLP) Nos. 21335/2002, 21343/2002, 23385/2002,  and 12968/2003, and ground (d) in the appeal arising out of SLP)  No.1632/2003 and civil appeal Nos.8591-8592/2003]

       The High Court noticed that the Government had not filed appeals in  most of the cases except a few and further that even the claimants-appellants  had not produced any evidence in support of their case for increase in the  amount of compensation.  Apart from urging that  there was increase in the  potentiality of the land in question, no material was placed before the  Reference Courts to show as to what would have been the market value of  the lands in question as on the date of the notification under Section 4 of the  Act, had the property been sold for the purpose of construction of a  warehouse or godown.

       In the circumstances, the High Court was justified in working out the  fair market value of the lands in question on the basis of Rs.16,750/- per  bigha as on 30.10.1963. The High Court noticed that in several judgments of  this Court escalation at different and varying rates i.e. 6% per annum from  1959 to 1965, @ 10% per annum for every year from 1966 to 1973 and @  12% per annum from 1975 had been considered to be reasonable increase to  arrive at the fair market value, assuming that the pace of escalation during  this period was normal for the entire period from 1959 onwards.  Since no  material was placed on record to show that there was any abnormality during  the period, the High Court applied the same principle to the facts and  circumstances before it, and accepted increase of 10% every year  progressively from 1963 to 1973 and thereafter @ 12% every year  progressively upto the date of acquisition.  The High Court noticed in the  judgment that if escalation is allowed on this basis, the fair market value  would be Rs.1,28,889/- per bigha.  In case progressive increase is allowed @  10% for the entire period, the amount will work out to Rs.1,08,397/- per  bigha. Allowing appreciation @ 12% for every year, not cumulatively, but at  a flat rate of  12% per annum from 1963 to 1983, the amount would work  out to Rs.56,112/- per bigha. The High Court in its judgment under appeal  pointed out that the market value of Rs.16,750/- per bigha fixed in the case  of Dharambir & Ors.  vs.  Union of India  was not in respect of commercial  land but only of agricultural land.  That the market value of agricultural land  is much lower than that of  land suitable for commercial purposes, is trite.  After having worked out the market value of the lands on various bases and  keeping in view the fact that between 8.12.1982 and 2.6.1983, the lands in  question had at least some commercial potentiality, the High Court decided  that the fair market value of all categories of lands situated in the villages in  question as on the date of acquisition should be fixed at Rs.82,255/- per  bigha.

       Having heard the learned counsel and perused the judgment, we find it  difficult to disagree with the exercise carried out by the High Court.  We  think that the High Court was justified in assessing the market value at a  higher rate on account of some increased potentiality of the lands. If at all,  the High Court has erred on the safer side in fixing the market value at  Rs.82,255/- per bigha.  In the circumstances, we are unable to accept the  contention advanced by the claimants-appellants and the Union of India in  their respective appeals.  Taking an overall view of the matter, we are  satisfied that the judgment of the High Court requires no interference under  Article 136 of the Constitution of India.   

In the result, we dismiss all the appeals. However, in the  circumstances, there shall be no order as to costs.