REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3726 OF 2001

Saibanna ‘Dead’ by LRs. .. Appellant

Versus

Assistant Commissioner &  Land Acquisition Officer .. Respondent

J U D G M E N T

Dalveer Bhandari, J.

1. This appeal is directed against the judgment of the High  

Court  of  Karnataka  at  Bangalore  dated  16.3.2000  in  

Miscellaneous  First  Appeal  (for  short,  M.F.A.)  No.  3232  of  

1996.

2. The facts in nutshell are as follows:

The preliminary notification was issued on 13.8.1981 to  

acquire  4  acres  and  27  guntas  of  land  belonging  to  the  

appellant situated in Survey Nos. 129/1, 129/3, 129/4 and  

129/74  situated  in  Taj  Sultanpur,  Gulbarga  City  in

Karnataka.   The award was passed on 30.6.1986 awarding  

compensation at the rate of Rs.2,500/- per acre.

3. The Reference Court  by its judgment and award dated  

8.4.1996  determined  the  market  value  at  the  rate  of  

Rs.19,500/- per acre.   

4. The appellant aggrieved by the said judgment preferred  

M.F.A. No. 3232 of 1996 before the High Court.  The appellant  

placed reliance on the judgments and awards passed in M.F.A.  

No.  3738 of  1995 dated 20.1.1998 and M.F.A.  No.  2557 of  

1997 dated 27.1.1998, wherein the market value of the lands  

located at almost the same distance from Gulbarga city and is  

having same potentiality of development.  The appellant also  

produced notification dated 30.10.1965 to show that the Taj  

Sultanpur  village  was  declared  to  be  within  the  municipal  

limits of Gulbarga city of Karnataka.   

5. The High Court dismissed the appeal without considering  

the main submission of the appellant that the acquired lands  

are  within  the  municipal  limits  of  Gulbarga  city  and  the  

deduction at the rate of 53% towards the development charges  

is excessive and not in consonance with the law laid down by  

the Full Bench of the High Court and by this Court.    

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6. In the present appeal, the appellant is aggrieved by the  

deduction at the rate of 53% towards development charges.  In  

the present case, the following questions of law formulated by  

the appellant are reproduced as under:-

“A. Whether  the  High  Court  has  committed  a  serious  error  in  deducting  53%  towards  development  charges  in  the  facts  and  circumstances of the case?

B. Whether the High Court has committed a serious  error in not appreciating that the acquired lands  come within the  Municipal  limits  of  the  city  of  Gulbarga and therefore the development  charges  cannot be more than 33-1/3%?

C. Whether  the  decision  of  Full  Bench  of  the  Karnataka High Court is binding on the learned  Judge passing the impugned judgment?

D. Whether the High Court has failed to appreciate  that the judgment in other appeals is applicable  as it has the same potentiality?

E. Whether the High Court has failed to take note of  the  other  evidences  produced  by  the  appellant  such as valuer’s evidence?”

7. During the course of hearing, the parties have focused  

the entire  argument as to whether  deduction at the rate  of  

53% was  in  consonance  with  law  or  not?    The  appellant  

placed  reliance  on  the  judgment  of  this  court  in  K.S.  

Shivadevamma  & Others  v. Assistant  Commissioner  &  

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Land Acquisition Officer & Another (1996) 2 SCC 62.   In  

para 10 of the judgment, this Court accepted the argument  

that 53% deduction is not automatic but depends upon the  

nature  of  the  development  and  the  stage  of  development,  

meaning  thereby  that  it  would  depend  upon  the  facts  and  

circumstances  of  each  case.   In  this  case,  this  court  has  

further observed as under:-

“This court has laid as a general rule that for laying  the roads and other amenities 33-1/3% is required  to be deducted.  Where the development has already  taken  place,  appropriate  deduction  needs  to  be  made.”     

8. This Court in  Kasturi & Others v. State of Haryana  

(2003) 1 SCC 354 has extensively dealt with this aspect and  

observed in para 7 as under:

“….. It is well settled that in respect of agricultural  land or undeveloped land which has potential value  for housing or commercial purposes, normally 1/3rd  amount of compensation has to be deducted out of  the  amount  of  compensation  payable  on  the  acquired  land  subject  to  certain  variations  depending  on  its  nature,  location,  extent  of  expenditure involved for development and the area  required  for  roads  and  other  civic  amenities  to  develop  the  land  so  as  to  make  the  plots  for  residential or commercial purposes.   A land may be  plain or uneven, the soil of the land may be soft or  hard bearing on the foundation for the purpose of  making construction; may be the land is situated in  the midst of a developed area all around but that  land may have a hillock or may be low-lying or may  be having deep ditches.  So the amount of expenses  that  may be incurred in  developing  the area also  

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varies.   A claimant who claims that his land is fully  developed and nothing more is required to be done  for development purposes, must show on the basis  of  evidence  that  it  is  such  a  land  and  it  is  so  located.   In the absence of  such evidence,  merely  saying  that  the  area  adjoining  his  land  is  a  developed area, is not enough particularly when the  extent of the acquired land is large and even if  a  small portion of the land is abutting the main road  in the developed area,  does not give  the land the  character of a developed area. …….”

This  court  in  the  said  case  also  observed  that  there  is  a  

difference between a developed area and an area which is yet  

to  be  developed.    The  fact  that  an  area  is  developed  or  

adjacent  to a developed area will  not  ipso  facto make every  

land situated in  the  area  also  developed to  be valued as  a  

building  site  or  plot,  particularly  when  vast  tracts  are  

acquired.

9. In substance,  the ratio  of  the judgment in  Kasturi &  

Others (supra) is that the deduction would depend on several  

factors, particularly the extent of land in question, location of  

the said land and the proximity of the land from the municipal  

limits.

10. In the instant case, the land in question is within the  

municipal  limits  of  Gulbarga  city  since  1965.   The  Taj  

Sultanpur village is located only at a distance of 2-1/2 kms.  

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from Gunj locality of Gulbarga City and, therefore, it is located  

within the close vicinity of Gulbarga City.  The Taj Sultanpur  

village  is  adjoining  Shak  Roza  and  Vakkalgera  limits  of  

Gulbarga city which are part and parcel of Gulbarga city for a  

long period.   So the cost of development is not likely to be very  

high.  As laid down in K.S. Shivadevamma’s case (supra), as  

a general rule that for laying the roads and other amenities  

33-1/3% is required to be deducted.     

11. Deduction  at  the  rate  of  53%  as  laid  down  in  the  

impugned judgment seems to be on the higher side and is not  

in consonance with the ratio laid down by this Court.    We  

would like to emphasize that there cannot be any hard and  

fast  or  a  rigid  rule.   Every  case  has  to  be  decided  on  its  

individual  facts  taking  into  consideration  various  facts  and  

circumstances.     

12. In the instant case, neither the Reference Court nor the  

High  Court  has  assigned  any  specific  reasons  for  making  

deduction at a rate more than 33-1/3%.    On consideration of  

the ratio laid down by this Court in Kasturi’s case (supra) and  

in  V.  Hanumantha  Reddy  (dead)  by  LRs. v.  Land  

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

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and  in  the  facts  and  circumstances  of  this  case,  in  our  

considered view, deduction at the rate of 53% is on the higher  

side and it should not be more than 33-1/3%.  

13. On  consideration  of  the  totality  of  the  facts  and  

circumstances of the case, the impugned judgment of the High  

Court is modified to the extent of deduction charges. We direct  

the  respondent  to  make  deduction  at  the  rate  of  33-1/3%  

towards development charges.    

14. In  view  of  the  above,  the  appeal  stands  allowed.  The  

impugned  judgment  of  the  High  Court  is  modified  and  

disposed of in the abovementioned terms.   The parties are  

directed to bear their own costs.    

…….……………………..J.                                                    (Dalveer Bhandari)

…….……………………..J.                                                          (Harjit Singh Bedi) New Delhi; August 19, 2009.

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