REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 8984-8985 OF 2003

REVENUE DIVISIONAL OFFICER-CUM- L.A.O.       … APPELLANT

Versus

SHAIK AZAM SAHEB ETC. ETC.    … RESPONDENTS

[with C.A. No. 8733-8736/2003, C.A. No. 8987-9001/2003,  C.A. Nos.  108-115/2009    (@ SLP (C) Nos. 4463-4470/2004), C.A. Nos.  116-121/2009    (@ SLP (C) Nos. 12200-12205/2007)  C.A. No.    130/2009           (@ SLP (C) Nos. 12215/2007), C.A. Nos.   122-129/2009   (@ SLP (C) Nos. 12206-12213/2007)].

J U D G M E N T

S.B. SINHA, J.

1. Leave granted in Special  Leave Petition (Civil)  Nos. 4463-4470 of

2004, 12200-12205 of 2007, 12215 of 2007 and 12206-12213 of 2007.

2. These appeals by special leave involving common questions of law

and fact were taken up for hearing together and are being disposed of by

this common judgment.

3. The basic fact of the matter is not in dispute.

A notification under Section 4(1) of the Land Acquisition Act, 1894

was issued (hereinafter referred to for the sake of brevity as, “the said Act”)

expressing  the  intention  of  the State  to  acquire  land to  the  extent  of  87

Acres  96 cents situated in Pasupula and B. Thandrapadu villages for the

purpose of establishing a Post Graduation Centre of Sri Krishna Devaraya

University.

4. Out of the said 87 Acres 96 cents of land, we are concerned only with

25 acres of land of which respondents were owners.  The Land Acquisition

Officer made an award on or about 20.12.1995 fixing the market value of

the lands  at  the rate  of  Rs.15,000/-  per  acre  for  the  lands  situated  in  B.

Thandrapadu  village  and  Rs.16,000/-  per  acre  for  the  lands  situated  in

Pasupula village.

5. Dissatisfied with the quantum of compensation awarded by the Land

Acquisition Officer, the respondents sought for reference from the Collector

before the Civil Court in terms of Section 18 of the said Act.   

The learned Principal Senior Civil Judge, Kurnool by a judgment and

award  dated  28.03.2001  enhanced  the  market  value  thereof  from

Rs.15,000/- to Rs.90,000/- per acre for the lands situated in B. Thandrapadu

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village and from Rs.16,000/- to Rs.1,00,000/- per acre for the lands situated

in Pasupula village.  Appeals and cross-objections were filed thereagainst

by the parties hereto.   

6. By reason of judgments and orders dated 18.3.2002 and 28.3.2003, a

Division Bench of  the Andhra Pradesh  High Court  enhanced the  market

value of the land to Rs.1,90,000/- per acre uniformly for the lands situated

in both the villages.  

7. Parties thereto are, thus, before us.   

8. The High Court in support of its judgment, inter alia, relied upon a

registered deed of sale dated 12.11.1987, which was marked as Exhibit B-3

whereby  and  whereunder  four  cents  of  land  was  sold  for  a  sum  of

Rs.10,000/-.  On that premise, it was contended that the value of the land

per acre would be Rs.2,50,000/-.  The High Court furthermore relied on its

earlier judgment and order passed in A.S. No. 1095 of 1996 (Exhibit B-6)

wherein market value of the lands acquired therein was fixed at the rate of

Rs.2,70,000/- per acre.   

In respect of the land covered by Exhibit  B-6, a notification under

Section  4(1)  of  the  Act  was  issued  on  30.06.1992  for  the  purpose  of

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establishing Bharat Gas Power Station.  It was noticed that the lands which

were acquired  for  the said Bharat  Gas Power  Station  being  situated at  a

distance of about 8 kilometers from Kurnool Town whereas the acquired

lands were situated about 4-5 kilometers away from Kurnool Town.   

It was stated:

“As can be seen from Ex.B6, this court has fixed the rate of compensation at Rs.2,70,000/- and the notification  was  issued in  June  1992  whereas  in the present  cases notification was issued in  May 1995.  In such an event, if escalation is given at 10% on the value fixed by this Court, it would be around  Rs.3,24,000/-  per  acre.   Let  us  test  the value  from  the  other  angle.  Ex.  B3  is  a  small extent of 4 cents and the purchase took place in the  year  1997.   The  reference  court  correctly observed that  as the purchase was made about 7 years earlier to the notification, the purchase was not made with a view to have an undue advantage of higher compensation.  As per Ex. B3 the value per acre is Rs.4,00,000/- if 10% escalation is given for 7 years, the same comes to Rs.6,80,000/- and even if we take 60% of the amount by keeping in view the small extent sold under Ex.B3 and also giving  discount  for  developmental  activities,  it would  be  Rs.2,72,000/-  per  acre.  Therefore,  we follow  the  safest  method  for  arriving  at  the compensation with reference to Ex.B6 which is in an extent of 27 and the area covered by the batch of appeals is also almost same, and the notification was issued for 87.96 cents, granting of escalation by deduction  40% of  the  amount  and fixing  the

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compensation at Rs.1,90,000/- would be just  and reasonable.  Therefore, we have taken the course of  resorting  to  40%  of  the  amount  as  the  land acquired  was  for  the  University  Buildings, wherein internal  roads have to be laid  and other open spaces have to be left out.  Thus, keeping in view  the  above  facts,  we  feel  that  granting compensation  at  Rs.1,90,000/-  is  just  and reasonable.”

9. Mr. R. Sundarvardhan, learned Senior Counsel appearing on behalf of

appellant would contend:

i. As this  Court  in  Civil  Appeal  No. 5206-5228 of  1997 (A.P.

Industrial  Infrastructure  Corporation  Limited  vs.  G.  Mohan

Reddy & ors.) interfered with the judgment and order passed in

A.S. No. 1095 of 1996 and batch to hold that the market value

of  the  land  in  question  should  be  fixed  at  Rs.1,35,000/-,

Rs.90,000/- and Rs.70,000/- per acre for different survey nos.

on the premise that the situation of the land keeping in view

their distance from the National Highway play a vital role as

the  land  which  is  near  the  Highway  would  definitely  get  a

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higher  price  than  the  land  which  is  away  therefrom,  the

impugned judgment cannot be sustained.     

ii. Exhibit  B-3  being  the  registered  sale  deed  dated  12.11.1987

could not have been relied upon as only 4 cents of land was the

subject  matter  of  transfer  in  terms  thereof  whereas  the

notification had been issued for acquisition of land measuring

87 Acres 96 cents.

10. Mrs. K. Amareswari, learned Senior Counsel appearing on behalf of

the respondents, on the other hand, would contend:

i. It is not correct to contend that an exemplar in terms whereof

only a small portion of land had been transferred can never be

taken into consideration.

ii. Keeping  in  view  the  fact  that  the  market  rate  in  terms  of

Exhibit B-3 would come to Rs.2,50,000/- per acre, even if 50

per  cent  is  deducted  therefrom,  the  market  value  may  be

determined  at  Rs.1,25,000/-  to  which  increase  therein  at  the

rate of 10 per cent per year should be added and as the lands in

question were acquired on 5.5.1994, that is,  7 years after the

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said deed of sale was executed, the market value thereof would

come to Rs.2,12,500/- per acre.  

iii. So far as the judgment of this Court passed in Civil Appeal No.

5206-5228 of 1997 (A.P. Industrial Infrastructure Corporation

Limited  vs.  G.  Mohan  Reddy  &  ors.)  is  concerned,  the

notification therein having been issued on or about 30.6.1992

whereas  the  notification  in  the  instant  case  having  been

published on 5.5.1994, no reliance can be placed thereupon as

admittedly the lands were situated 8 kilometers away from the

National  Highway whereas the lands in question are situated

only 4 kilometers away from the Highway.    

11. Determination  of  market  value  of  a  land  acquired  in  terms  of  the

provisions of the said Act depends upon a large number of factors; the first

being the nature and quality of the land, i.e., whether agricultural land or

homestead  land.  Apart  from nature  and  quality  of  land  in  the  event  the

agricultural lands are acquired the other factors relevant therefor  are also

required to be considered, namely, as to whether they are irrigated or non-

irrigated,  extent  of facilities  available  for  irrigation,  location of  the  land,

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closeness  thereof  from  any  road  or  highway,  the  evenness  of  land,  its

position in different seasons particularly in rainy season, existence of any

building or structure as also the development in and around the area.  A host

of other factors will  also have a bearing on determining the valuation of

land.  

12. The mode and manner in which determination of such valuation are to

be carried out would also depend upon the facts and circumstances of each

case,  namely,  whether  any deed  of  sale  executed  in  respect  of  similarly

situated land near about the date of issuance of notification under Section 4

(1) of the Act is available, or in absence of any such exemplars whether the

claim can be determined on yield basis or in case of an orchard on the basis

of the number of fruit bearing trees and the yield therefrom.   

13. One other important factor which also should be borne in mind is that

it may not be safe to rely only on an award involving a neighbouring area

irrespective  of  the  nature  and  quality  of  the  land.   For  determination  of

market  value  again,  the  positive  and  negative  factors  germane  therefor

should be taken into consideration, as laid down by this Court in  Viluben

Jhalejar Contractor vs. State of Gujarat [(2005) 4 SCC 789], namely:

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Positive factors Negative factors

(i) Smallness of size (i) Largeness of area

(ii) proximity to a road (ii) situation  in  the  interior  at  a distance from the road

(iii) frontage on a road (iii )

narrow strip  of land with very small  frontage  compared  to depth

(iv) Nearness to developed area (iv) lower  level  requiring  the depressed  portion  to  be  filled up  

(v) regular shape (v) Remoteness  from  developed locality

(vi) Level  vis-à-vis  land  under acquisition  

(vi) Some  special  disadvantageous factors  which  would  deter  a purchaser

(vii )

Special value for an owner of an  adjoining  property  to whom it may have some very special advantage.

14. Before determination of the market value of the land, we may notice

that  the  town of Kurnool  is  the District  Headquarter  of  Kurnool  district.

The acquired lands are situated about 4 kilometers away from the said town

abutting National Highway No. 18.  The lands in question have been held to

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have the requisite potential  value as building site as also for constructing

industrial complexes.  The learned Reference Judge noticed that there are

educational institutions like Pulla Reddy Engineering College, Don Bosco

School, St. Mary’s Residential School etc. surrounding the acquired lands.

G. Pulla Reddy Engineering College is said to be situated just on the other

side of the road of the lands acquired.  As on the date of acquisition, it was

found that the vicinity surrounding the land was well developed.   

15. Indisputably, a big chunk of lands, namely, 87 Acres 96 cents were

acquired for the purpose of establishing an institution known as Sri Krishna

Devaraya University.   The award of  the  Land Acquisition  Collector  was

accepted by most of the persons.  Only the respondents before us objected

thereto.   

16. The lands are situated in two different villages.  The plan showing the

location of the land vis-à-vis the National Highway No. 18 had not been

placed before us.  From the award of the learned Reference Judge, it appears

that the lands situated in Pasupula village are better placed than the lands

situated in B. Thandrapadu village.  Such a distinction had also been kept in

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mind not only by the Land Acquisition Collector but also by the Reference

Court.   

17. We agree with the judgment of this Court in Civil Appeal No. 5206-

5228  of  1997  (A.P.  Industrial  Infrastructure  Corporation  Limited  vs.  G.

Mohan Reddy & ors.) that the market value of the land would also depend

upon the situation thereof.   

18. Applying  the  said  formula,  if  we  rely  on  Exhibit  B-3,  the  market

value of the land in question would come to about Rs.1,25,000/- per acre.  It

is, however, not possible to agree with the submissions of Mrs. Amareswari

that we should determine the market value only on that basis upon addition

of 10 per cent enhancement of the market value each year.  It must be bear

in mind that the lands in question were agricultural lands whereas the lands

which were the subject matter of the said deed of sale was a homestead land,

thus,  some  amount,  therefore,  will  have  to  deducted  towards  the

development cost.   

19. Indisputably while  comparing the market  value of  developed lands

with that of undeveloped lands, the court has to make suitable deductions

towards the cost of development.  

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We,  however,  may  notice  that  this  Court,  at  different  times,  has

spoken in different voices.  

In  P.S. Krishna and Co. Pvt. Ltd. v. The Land Acquisition Officer,

(Deputy Collector) Hyderabad [(1991) 2 SCALE 1186], this Court refused

to  interfere  with  the  judgment  of  the  High  Court  which  had  given  a

deduction  of  20%  towards  development  charges.  Recently,  a  Division

Bench  of  this  Court  in  Mummidi  Apparao  v.  Nagarjuna  Fertilizers  and

Chemicals Ltd. [2008 (16) SCALE 226] did not interfere with the decision

of  the  High Court  which had given a direction  for  deduction  of  50% as

development charges. However, we are not oblivious of the fact that this

Court had observed in  Viluben Jhalejar Contractor (D) v. State of Gujarat

[(2005) 4 SCC 789]:

“28. In Hasanali Khanbhai & Sons v. State of Gujarat [(1995) 5 SCC 422] and Land Acquisition Officer v. Nookala  Rajamallu (2003)  12  SCC 334:  (2003)  10 SCALE 307 it has been noticed that where lands are acquired for specific  purposes  deduction by way of development charges is permissible.

29.  We are  not,  however,  oblivious  of  the  fact  that normally  one-third  deduction  of  further  amount  of

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compensation has been directed in some cases. (See Kasturi v.  State  of  Haryana [(2003)  1  SCC  354], Tejumal Bhojwani v.  State of U.P., [(2003) 10 SCC 525],  V.  Hanumantha  Reddy v.  Land  Acquisition Officer  & Mandal  R.  Officer (2003)  12  SCC 642, H.P. Housing Board v. Bharat S. Negi (2004) 2 SCC 184  and  Kiran  Tandon v.  Allahabad  Development Authority and Anr. (2004) 10 SCC 745).”

20. In  the  facts  and  circumstances  of  the  present  case,  one-third

deduction, in our opinion, should be made towards development costs for

the lands situated both in Pasupala village as also B. Thandrapadu village.

Keeping in view the fact that the lands are abutting National Highway and

near the district town, where a large number of educational institutions have

come  up,  10  per  cent  escalation  per  year  has  to  be  added.  Thus,  Rs.

1,41,666.66 per acre may be fixed for the lands in Pasupala village.  

The lands in another village B. Thandrapadu Village being situated

away from the NH 18, another 10 per cent from the amount fixed for the

lands in Pasupala village must be deducted. Thus, Rs. 1,27,499.99  per acre

may be fixed for the lands in B. Thandrapadu village.  

We have adopted the same method which had been adopted by the

Reference Judge inasmuch as the Reference Judge had fixed market value

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for  the lands  situated  in  Pasupala  village  at  Rs.  1,00,000/-  per  acre  and

Rs.90, 000/- per acre in respect of B. Thandrapadu village.

21. The appeals are allowed to the aforementioned extent.   No costs.

.……………….…..………….J. [S.B. Sinha]

..………………..……………J. [Lokeshwar  Singh  Panta]

……………….…..………….J. [B. Sudershan Reddy]

New Delhi; JANUARY 13, 2009

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