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PETITIONER: STATE OF UTTAR PRADESH ETC.

       Vs.

RESPONDENT: SMT. RAM KUMARI DEVI ETC.

DATE OF JUDGMENT:       15/02/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. G.B. PATTANAIK (J)

CITATION:  JT 1996 (3)   380        1996 SCALE  (2)627

ACT:

HEADNOTE:

JUDGMENT:                             WITH              CIVIL APPEAL NOS. 3815-16 OF 1996               --------------------------------      (Arising out of SLP (C) Nos.12146/95 and 16059/95)                             AND                CIVIL APPEAL NO. 3817 OF 1996                -----------------------------          [Arising out of SLP (C) No.11256 of 1995]                          O R D E R      Leave granted.  We have  heard learned  counsel on both sides.      Notification under Section 4(1) of the Land Acquisition Act 1  of 1894  (for short,  the  ’Act’)  was  published  on September 14,  1985 acquiring 13.75 acres for setting up the Government Degree  College at  Lalitpur, State  of U.P.  The Land Acquisition  Officer in  his award  dated September  1, 1988 made  under  Section  11  of  the  Act  determined  the compensation at  the rate  of Rs.  11,887.78  per  acre.  On reference under section 18 of the Act, the District Judge by his award  and decree  dated April  21, 1990  determined the compensation at  the rate of Rs.5/- per sq. ft. On appeal by the appellants,  the High  Court reduced the compensation to Rs.3.30 per  sq. ft.  by judgment  and decree dated November 16, 1994  in First Appeal No.603/93 etc. Thus  these appeals by special leave.      It is  contended by  Shri A.B.  Rohtagi, learned senior counsel for  the appellants  that the whole approach adopted by the High Court and the reference Court is clearly illegal and erroneous.  When 13.75  acres of  land was  acquired for public purpose,  would a  reasonable prudent purchaser offer to purchase  the land  at  the  square  foot  basis  is  the question posed  and rightly posed by the learned counsel for the appellant.  The reference  Court relied  on  three  sale deeds Ex.A2,  A3 and  A1. Ex.A2  relates  to  an  extent  of 60’x20’ of  land sold by the claimant himself on October 18, 1984 for a sum of Rs.6,000/- which worked out at the rate of

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Rs.5/- per sq. ft. He also sold an extent of land of 40’x40’ ft. for a sum of Rs.8,000/- under Ex.A3 on January 19, 1983. 1600 sq. ft. was sold for a sum of Rs.8,000/- on January 18, 1983 under Ex.A1. The reference Court relied upon these sale deeds  and   also  the   rates  prescribed   by  the   local administration for  the purpose  of stamp duty at Rs.8/- per sq. ft.  for the road margins and Rs.5/- per sq. ft. for the interior  land.   Relying  thereon,   the  reference   Court determined the  compensation at  Rs.5/- per sq. ft. The High court while  accepting  the  same,  deducted  1/3rd  towards developmental charges  and determined  the  compensation  at Rs.3.30 per sq. ft.      It is  seen that  small pieces  of land of an extent of 60’x20’,  40’x40’   and  1600  sq.  ft.  were  sold  by  the claimants, obviously  on coming  to  know  of  the  proposed acquisition.  It   is  common   knowledge  that  acquisition proposal would  be made  at an  earlier point  of  time  and finalization of  acquisition would  take long  time. In  the process, on  becoming aware  of the  acquisition, obviously, these  sale  deeds  have  been  brought  into  existence  to inflates the  market value.  It is  laid down  by this Court which is  well settled  principle that it is the duty of the court to  assess reasonable  compensation. Burden  is on the owner to  prove the prevailing market value. On adduction of evidence by  the parties,  the acid test which the Court has to adopt  is that  the court has to sit in the armchair of a prudent purchaser,  eschew feats of imagination and consider whether a  reasonable prudent  purchaser in  the open market would offer  the same  price which the Court is intending to fix the  market value in respect of the acquired land. Since it is a compulsory acquisition, it is but the solemn duty of the Court  to assess  reasonable compensation so as to allow the same  to the  owner of  the land whose property has been acquired  by   compulsory  acquisition  and  also  to  avoid needless burden on public exchequer. No feats of imagination would require  to bog the mind that when 13.75 acres of land was offered for sale in an open market, no prudent man would have credulity  to purchase  that land on sq. ft. basis. The High Court  as well  as the  District Judge have committed a grave error  in not  applying  the  above  acid  test  while considering the case. They merely proceeded by accepting the sale deeds  which were  obviously brought  into existence to inflate the  market value and determined the compensation on the price  settled by  them. Thus,  we hold  that  both  the Courts have  applied a wrong principle of law in determining the compensation.      The question  then is:  what would  be  the  reasonable market value?  In the  synopsis of  the case, the appellants themselves have  indicated and  the counsel  has  reiterated that they  are agreeable  to pay  at the rate of Rs.30,000/- per acre.  In view  of their  admission, the market value is determined at Rs.30,000/- per acre.      The claimants  are entitled to statutory solatium under Section 23  [2] and  interest under  Section 28 till date of deposit of  compensation amount  and also  additional amount under  section  23(1-A)  on  enhanced  compensation  of  the compensation.      The appeals of the State are accordingly allowed. No costs. CA NO. 3817 OF 1996 ------------------- [@ SLP (C) No.11256 of 1995]      This appeal  being a  cross-appeal by  the claimant for further enhancement of compensation, is dismissed. No costs.

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