Besco Ltd. vs The State Of Haryana

2023INSC759 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO(S). OF 2023 (Arising out of SLP(C) No(S).4487 OF 2022)

BESCO LIMITED ... APPELLANT(S)

VERSUS

STATE OF HARYANA & OTHERS ... RESPONDENT(S)

With

Civil Appeal No. of 2023 (Arising out of SLP (C) No.4872/2022)

Civil Appeal No. of 2023 (Arising out of SLP (C) No.4996/2022)

Civil Appeal No. of 2023 (Arising out of SLP (C) No.14506/2022)

Civil Appeal No. of 2023 (Arising out of SLP (C) No.6893/2023)

Civil Appeal No. of 2023 (Arising out of SLP (C) No.14507/2022) Signature Not Verified

Digitally signed by NIRMALA NEGI Civil Appeal No. of 2023 (Arising out of SLP (C) No.5574/2023) Date: 2023.08.23 17:13:59 IST Reason:

1 Civil Appeal No. of 2023 (Arising out of SLP (C) No.5546/2023)

Civil Appeal No. of 2023 (Arising out of SLP (C) No.5549/2023)

Civil Appeal No. of 2023 (Arising out of SLP (C) No.__________) (@ Dy. No(s). 10986/2023)

J U D G M E N T

S.V.N. BHATTI, J.

1. Leave granted.

2. The Civil Appeals arise from the Common

Judgment and Decree dt. 02.11.2021 in RFA No.

1232 of 2019, in the High Court of Punjab and

Haryana at Chandigarh. The landowners covered

by Sec. 4(1) Notification dt. 13.05.2010 issued

under the Land Acquisition Act, 1893 (for

short, “the Act”), are appellants before us.

The appeals are filed claiming enhanced

compensation. Appeals relate to the

Notification dt. 13.05.2010. The acquired lands 2 are located in (i) Village Malpura, (ii)

Village Kapriwas and Sidhrawali. Hence, they

are disposed of by the Common Judgment.

2.1. The State of Haryana, through the

District Collector, District Rewari, issued

Sec. 4(1) Notification under the Act, proposing

to acquire land measuring 1222 Kanal, 6 Marla

for establishing and developing an integrated

industrial complex and other public utilities

in Village Malpura, Sub Tehsil Dharuhera,

District Rewari. The Industrial Complex is

administered and run by Haryana State

Industrial Development Corporation (HSIDC),

Tehsil - Bawal, District - Rewari. The Land

Acquisition Officer (LAO) by the award dt.

10.05.2013 determined the compensation payable

to the landowners. The parties are called

landowners, the State, LAO and the HSIDC for

convenience. The details of the appellants/

3 landowners, etc., are stated in the following

table:

NAME OF THE CASE NO. IDENTITY OF THE EXTENT OF LOCATION APPELLANTS LAND LAND

Besco Ltd. SLP(C)No. Musteel No. 26 47 Kanals, 13 Village (Formerly 4487/22 Khasra No. 1/1; Marlas Malpura Bhartia Musteel No. 28, (28,828.3 sq. Electric Khasra Nos. 1, 2, yd. or 5.95 Steel Co. 3, 8, 9, 10 acres) Ltd.)

1. M/s SLP(C)No.6 Khewat No. 64/64, 178 kanals 17 Villages Rajdhani 893/23 Rect No. 31, Marlas Kapriwas Nurseries Killa No. 11 (9- (1,08,204.5 and Ltd. 13), 12 (7-18), sq. yd. or Sidhrawali (Formerly 13 (7-13), 17 (8- 22.35 acres) known as 0), 19 (8-0), 20 M/s (8-0), Killa No. Sidharth 21/2 (4-8), 22 Mercantile (8-0), 23 (8-0), Ltd.) 24/1 (1-4)

2. M/s Khewat No. Tower 135/140, Rect.

Leasingg & No. 33, Killa No. Finance 11/1 (5-5) Ltd.

Khewat No. 63/63, Rect. No. 31, Killa No. 16 (8- 0), 24/2 (6-16), 25 (8-0), Rect. No. 32, Killa No. 20/2 (2-0), 21 (8-0), 22 (4-8), Rect. No. 33, Killa No. 1 (10- 0), 10 (7-12), Rect. No. 34, Killa No. 2(8-0), 3(8-0), 4 (8-0), 5 (8-0), 6 (8-0)

4 1. Ramesh SLP(C)No. Khewat No. 129, 11 Kanals, 11 Village Kumar 14507/22 Rect. No. 43 Kila Marlas Malpura No. 21/2(5-16), (6,987.76 sq. 2. Ashok 22/2(5-15), Kitat yd. or 1.44 Kumar 2 acres)

3. Rajender Prasad(Dea d)

4. Surender Singh

5. Amit Surender SLP(C)No. Khewat No. 109, 5 Kanals, 19 Village Singh 14506/22 Khatoni No. 110, Marlas Malpura Rect. No. 43, (3,599.76 sq. Kila No. 13/2(2- yd. or 0.74 9), 18/1(3-10), acres) Kitat 2 1. Smt. SLP(C)No.5 Financial Extent not Village Premlata 574/23 Commisioner’s indicated Malpura w/o standing order Randhir describes the Singh identity from

2. Randhir Singh

3. Hari Prakash

4. Dharam -chand 1. Gaurav Dy. No. Khewat No.128 11 kanals and Village (now 10986/23 khatoni 132 Rect. 15 marla. Malpura major) s/o No.45 Killa (7,108 sq. yd. Jagdish No.1/2/1 (3-19), or 1.4 acres) 2/2 (3-16), 9/1/2 2. Rahul (4-0) Kita 3. (now major) s/o Jagdish

3. Prapti (now major) s/o 5 Jagdish

M/s Delton SLP(C)No. Rect. No.41 Killa 74 kanals Village Cables 4996/22 No.3,4/1,4/2,5/1, (44,770 sq. Malpura Limited 5/2,6,7,8/1,13/2/ yd. or 9.25 1, 14/1,15/1 acres) Rect. No. 29 Killa No.24,25 Bhram Dutt SLP(C)No. Khewat No.126 12 kanal 17 Village s/o Hari 5546/22 khatoni 130 Rect. Marla Malpura Singh s/o No.43 Killa (7774.26 sq. Gopal No.21/1 (2-4), yd. or 1.6 22/1 (2-5), Rect. acres) No.45 Killa No.1/1 (4-4), 2/1. M/s ARS SLP(C)No. Identity of land 83,296.4 sq. Village Enterprises 4872/22 not indicated. yd. or 17.21 Malpura Private acres. Limited Laxmi SLP(C)No.5 Khewat No. 126, 12 Kanals, 17 Village Narayan 549/23 Khatoni 130, Marlas Malpura s/o Hari Rect. No. 43, (7,774.26 sq. Singh. Killa No. 21/1 yd. or 1.6 (2-4), 22/1 (2- acres) 5), Rect. No. 45, Killa No. 1/1 (4- 4), 2/1 (4-4)

3. The circumstances preceding the passing

of the award, the claim of landowners, and

documents relied on for claiming compensation

in considerable detail are referred to both, by

6 the High Court and the Reference Court.

Therefore, the circumstances necessary for

disposing of the batch appeals are adverted to

in the judgment.

4. The landowners based on the potential of

the acquired land claim commensurate market

value as of 13.05.2010. The acquired land is in

a controlled area declared by the State of

Haryana. Industrial Estate Dharuhera, Primary

School at Village Maheshwari, Ghatal Mehnias

and Aakera are at a proximate distance. The

acquired land is claimed as situated in the

industrial zone at Sector 15, Dharuhera. Apart

from the advantageous neighbourhood of

establishments and industries, the land under

acquisition is located alongside National

Highway No. 8, i.e., Delhi-Jaipur Highway and

Industrial Sectors 15, 16 & 17. Further, land

sectors 8, 9, 10, 12 & 13 are opposite the

7 industrial sectors of 17 and 16 across National

Highway No. 8. Many development activities have

occurred in and around the land acquired. The

landowners refer to the existence of industrial

units such as Penam Labs, U.B. Group, Capsu

Gel, Weston, Hero Motors Ltd., RIICO, Omax,

Sona Koya, M. Teck, Bestech, Utility

Engineering, Luthra, IST etc within a radius of

1 k.m. of the acquired land. The acquired land

had change in land use (CLU) under the Punjab

Scheduled Roads and Controlled Areas

Restriction of Unregulated Development Act,

1963. The gist is that the acquired land cannot

be treated as an agricultural land.

5. The second Respondent/ LAO in the award

enquiring primarily accepted the market rate

determined by a Divisional Level Land Rates

Fixation Committee under the Chairmanship of

the Commissioner of the Division. The Chairman

8 furnished the data on the request made by the

LAO. The rates determined by the said Committee

are excerpted hereunder:

(a)Chahi/GM land Rs.40,00,000/- per acre.

(b)approach road upto depth 2 1⁄2 acres Rs.48,00,000/-.

(c)NH-8 up to depth of 2 1⁄2 acres Rs.50,00,000/-.

6. The award dt. 10.05.2013 determined the

market value of the land acquired through

Notification dt. 13.05.2010 as follows:-

MARKET VALUE

“To arrive at a conclusion to determine the market value of the land under acquisition, Haryana Govt., has constituted a Divisional Level Land rates Fixation Committee under the Chairmanship of concerned Commissioner of the Division. The District Collector, Rewari who is the member of the said committee, was requested to supply the market rate of the land under award and the same was supplied by the District Collector Chahi/GM Land Rs. 40,00,000/- per acre, Approach Road up to Depth 2 ½ acres Rs. 48,00,000/- and N.H.- 8 Up to Depth of 2 ½

9 acres Rs. 50,00,000/- vide his office Memo No. 2049-63/DRA dt. 29-04-2013. In view, of the above discussion, market rates fixed by the Divisional Level Land Rates Fixation Committee, are just and fair, so, I award the same accordingly”.

Applying the above mentioned rates the land under acquisition has been worked as under:

(Emphasis added)

Name of the Class of land Area under Amount Village Acquisition

Malpura Chahi/ GM 801K-1M 40,05,25,000/- -

Approach Road 66K-2M 03,96,60,000/- Up to Depth 2½ Acre

N.H.-8 to 355K-3M 22,19,68,750/- Depth 2½ Acre

Total 1222K-6M 66,21,53,750/-

7. The excerpted portion discloses that the

LAO has not determined the market value/

compensation to the land acquired in compliance

with Sections 23 and 24 of the Act. The rates

determined by the Divisional Level Land Rates

10 Fixation Committee, which is no more res

integra, do not reflect the market value of the

property acquired or basis for awarding

compensation. It is a matter of record on the

protest by the landowners; the determination of

compensation was referred to the Additional

District and Sessions Judge, Rewari.

7.1. The Reference Court, through the award

dt. 21.11.2018, enhanced the compensation from

Rs. 66,00,000/- to Rs. 67,12,050/- per acre.

The Reference Court relied upon the exemplar in

Ex. PW 4/3 dt. 13.08.2008 for an extent of 12

Kanal and 2 Marlas in Malpura Village, sale

consideration of Rs. 2,16,00,000/- at Rs.

1,42,80,991/- per acre. The Reference Court

refers to the judgments reported in

“Smt. Basavva and Ors. v. Special Land

Acquisition, (1996) 9 SCC, 640; Bhagwathula

Samanna and others v. Special Tahsildar and

11 Land Acquisition Officer, Visakhapatnam

Municipality (1991)4 SCC 506; Viluben Jhalejar

Contractor v. State of Gujarat, (2005)4 SCC

789; Dilbagh Singh and others Vs State of

Haryana, 1016(1) RCR (Civil) 736”, deducted 60

per cent of the value in Ex. PW 4/3 and granted

10 per cent increment per annum from the date

of sale till the date of Sec. 4 (1)

Notification.

7.2. The landowners aggrieved by the

deduction of 60 per cent from exemplar; and

non-consideration of available sale exemplars

of developed lands and grant of a minimum

increase in value at 10 per cent per annum,

filed regular first appeals before the Punjab

and Haryana High Court in R.F.A No. 1232 of

2019 and batch. The High Court through the

Impugned Judgment determined the market value

for the lands at Malpura at Rs. 1,21,33,320/-.

12 The brief consideration or conclusion of the

High Court for arriving at Rs. 1,21,33,320/-

per acre is excerpted here under:

“Since the most appropriate sale exemplar appears to be Ex. P2, which is not only abutting the acquired land but also forms a part of the acquired land, therefore, it is safe to rely upon the same. However, the sale instance is of 19.06.2008, whereas the Notification under Section 4 of the 1894 Act was issued on 13.05.2010. The Court is required to determine the market value of the acquired land as on 13.05.2010. From a careful perusal of the sale exemplar (Exh. PW 4/3) and the sale deed produced in additional evidence (Ex. PY), it becomes evident that the price of the land was increasing quite rapidly. The location of the acquired land is prime. In fact, the Industrial Estate of Dharuhera has already been developed and a lot of builders/ developers/ industrialists have already started purchasing the properties in and around the Industrial Estate of Dharuhera. Hence, it will be safe to assume that the market value of the land was increasing @ 10% per annum. Taking into consideration the aforesaid facts, the amount arrived at comes to Rs. 1,21,33,320/- per acre. The Court is expected to take a pragmatic view while assessing the market value, particularly when the parcel of land covered by Ex. P2, although situated in village Kapriwas, is abutting the acquired land of village Malpura. The land sold through Ex. P2 has 13 also been acquired. Hence, the market value of the land is assessed at Rs. 1,21,33,320/- per acre”.

Hence, the appeals for determination of

market value and compensation payable for the

land acquired.

8. We have perused the judgment under appeal

and noted the rival contentions of the parties.

The point for decision is in a very narrow

compass.

9. The Learned Counsel appearing for the

landowners contend that the High Court

committed a serious illegality in referring to

and applying the principle laid down in Lal

Chand v. Union of India1, for arriving at the

market value of Rs. 1,21,33,320/-. The

determination is without a reason. The High

Court taking note of the potentiality of the

land acquired; the development in the

1 (2009) 15 SCC 769 14 neighbourhood and the purpose of acquisition

rightly held that a 60 per cent deduction on

the exemplar relied on by the trial court in

Ex. P-4/3, is illegal and untenable. The Lal

Chand case (supra) refers to permissible

deduction between 20 to 75 per cent on exemplar

sales, while arriving at the market value of

the acquired land. In other words, the

percentage of deduction the court adopts must

be practical, pragmatic and realistic.

9.1 The Counsel invites our attention to the

overall development of the neighbourhood as on

Sec. 4(1) Notification dt. 13.05.2010 to claim

enhanced compensation. The High Court, having

held that the deduction of 60 per cent from the

exemplar in Ex. P-4/3 is illegal, still did not

adopt a correct percentage of deduction for

arriving at the market value. It is pointed out

that the High Court examined Ex. P-4/3 dt.

15 13.08.2008, a sale transaction of a property

located in Village Malpura. The High Court

recorded a finding of fact that there is no

clear-cut boundary or division between Malpura

and Kapriwas villages, and on another hand, the

land acquired through the Notification and the

land covered by Ex. P-4/3 dt. 13.08.2008. To

sum up, the argument is even by applying the

principle laid down in the Lal Chand case

(supra), the determination of market value

payable as compensation by the High Court

suffers from serious flaws. The breach of

mandate of Sec. 23 of the Act is manifested

both in adopting exemplar Ex. P-4/3 or making a

wrong deduction on the sale consideration

recorded by the exemplar. The High Court ought

to have accepted Ex. P-Y, upward land value

increase in the locality for determining the

16 compensation payable under the subject land

acquisition.

10. The Learned Counsel appearing for the

Respondents contends that the market value

determined by the High Court is completely on

the higher side. The High Court lost sight of

the total extent acquired through Sec. 4(1)

Notification dt. 13.05.2010. The extent

acquired through the acquisition proceedings is

153 acres. The Reference Court has examined all

the relevant circumstances and applied the very

principle laid in the Lal Chand case (supra)

and determined the correct compensation payable

for the subject land. The Learned Counsel

commends to the Court to apply the belting

system in determining compensation to the lands

abutting the National Highway and lesser

compensation to the lands situated away from

the National Highway. He invites our attention

17 to the finding recorded by the Reference Court

and argues that the compensation determined by

the High Court is on the higher side. He prays

for either modifying the compensation

determined by the High Court or confirm the

compensation awarded by the Reference Court.

11. We have taken note of rival contentions

and perused the record. Prima facie we are of

the view that the appeals on hand do not

present laying down a principle for determining

compensation for the subject acquisition. The

appeals on the other hand call upon us to apply

the very precedents and rely on the same

exemplars, however, by adopting a correct

method and mode. The following sale exemplars

are taken note of as located in and around or

nearer to the land under acquisition.

Sale exemplars

18 Sr Exhibit Village & Total Sale Per acre Remarks Extent of Consideration land.

1. P-2 Kapriwas Rs. Rs. (i) The exemplar dt. & 90,35,000 1,04,00,000 is nearly two 19.06.08 6 Kanal years before Sec.

19 Marlas 4(i) Notification.

(ii) The sale deed relates to a property in Kapriwas village.

(iii) The sale deed can be relied on if no other exemplar is available.

2. P-4/3 Malpura Rs. Rs. (i) The sale deed dt. & 2,16,00,000 1,42,80,991 is from the same 13.08.08 1 Acre 4 village. Kanal 2 Marlas (ii) The sale deed covers an extent of 1 Acre 4 Kanal.

(iii) The sale deed is two years prior to Sec. 4(1) Notification.

(iv) The exemplar Could be relied upon subject to conditions such as location of both the lands, their development, applicable deduction etc.

(v) The exemplar is relied on to appreciate the value two years back and the upward escalation in the village.

19 3. P-Y Malpura Rs. Rs. (i) Exemplar from dt. & 1,42,62,445 2,23,72,463 the same village. 15.02.10 5 Kanal, 2 Marla (ii) The extent covered by the exemplar is 5 Kanal 2 Marla = 60.5 square yards.

(iii) The location is at a distance 500 mtrs on western side inside the main road.

(iv) The exemplar is immediately preceding Sec. 4(1) Notification.

(v) The exemplar is not contested as collusive etc.

(vi) The exemplar of all the three sale deeds, represents comparable market value of plots.

12. A careful perusal of the above table

makes one argument for the appellants, i.e.,

the High Court failed to stipulate the

percentage of deduction while determining the

market value. The reasoning must be complete in

arriving at the compensation payable as Rs.

1,21,33,320/-. We are convinced that the

conclusion of the High Court does not satisfy

20 the requirements stipulated by Sec. 23 of the

Act in determining the compensation.

12.1. (i) The High Court substantially

accepted that the land under

acquisition is in the neighbourhood of

a developing area;

(ii) the sale exemplars do not deal with

small plots or parcels of land;

(iii) the deduction of 60 per cent on

sale consideration covered by Ex. P-4/3

is erroneous;

(iv) that the land values in the

locality are showing an upward

increase, still in an abstract way

arrived at Rs. 1,21,33,320/- for the

land situated at Village Malpura, yet

failed to give sufficient reasons for

determining the market rate as Rs.

21 1,21,33,320/- on a reference for

determination of market value, the

Judgment substantially decides the

method, mode and the final market value

payable to the lands under acquisition.

The Impugned Judgment missed one or the other.

Before embarking the market value of the lands

under acquisition, the following principles are

kept in our view.

A. Tehsildar Land Acquisition, Vishakhapatnam v. Smt. A Mangala Gowri2: “Where acquired land is in the midst of already developed land with amenities of roads, drainage, electricity etc., then deduction of 1/3 would not be justified. In the rural areas housing schemes relating to weaker sections, deduction of 1/4 may be justified.”

B. Tribeni Devi v. Collector of Ranchi3: “In order to develop that area atleast the value of 1/3 of the land will have to be deducted for roads, drainage and other amenities.”

2 (1991) 4 SCC 218 3 (1972) 1 SCC 480 22 C. Kasturi v. State of Haryana4: “Maybe the acquired land with potentiality for construction of residential and commercial buildings had some advantages, which aspect is taken note of by the High Court in giving cut of only 20% as against 1/3 normal deduction.” D. Lal Chand (supra): “The percentage of 'deduction for development' to be made to arrive at the market value of large tracts of undeveloped agricultural land (with potential for development), with reference to the sale price of small developed plots, varies between 20% to 75% of the price of such developed plots, the percentage depending upon the nature of development of the lay out in which the exemplar plots are situated. The 'deduction for development' consists of two components. The first is with reference to the area required to be utilised for developmental works and the second is the cost of the development works. For example, if a residential layout is formed by DDA or similar statutory authority, it may utilise around 40% of the land area in the layout, for roads, drains, parks, playgrounds and civic amenities (community facilities) etc. The Development Authority will also incur considerable expenditure for development of undeveloped land into a developed layout, which includes the cost of levelling the land, cost of providing roads, underground drainage and sewage facilities, laying waterlines, electricity lines and developing parks and civil amenities, which would be about 35% of the value of the developed plot. The two factors taken together would be the `deduction for development' and can account for as much as 75% of the cost of the developed plot. On the other hand, if the residential plot is in an unauthorised private residential layout, the

4 (2003) 1 SCC 354

23 percentage of `deduction for development' may be far less. This is because in an un- authorized lay out, usually no land will be set apart for parks, playgrounds and community facilities. Even if any land is set apart, it is likely to be minimal. The roads and drains will also be narrower, just adequate for movement of vehicles. The amount spent on development work would also be comparatively less and minimal. Thus, the deduction on account of the two factors in respect of plots in unauthorised layouts, would be only about 20% plus 20% in all 40% as against 75% in regard to DDA plots. The `deduction for development' with references to prices of plots in authorised private residential layouts may range between 50% to 65% depending upon the standards and quality of the layout. The position with reference to industrial layouts will be different. As the industrial plots will be large (say of the size of one or two acres or more as contrasted with the size of residential plots measuring100 sq.m. to 200 sq.m.), and as there will be very limited civic amenities and no playgrounds, the area to be set apart for development (for roads, parks, playgrounds and civic amenities) will be far less; and the cost to be incurred for development will also be marginally less, with the result the deduction to be made from the cost of a industrial plot may range only between 45% to 55% as contrasted from 65 to 75% for residential plots. If the acquired land is in a semi-developed urban area, and not an undeveloped rural area, then the deduction for development may be as much less, that is, as little as 25% to 40%, as some basic infrastructure will already be available. (Note: The percentages mentioned above are tentative standards and subject to proof to the contrary). Therefore, the deduction for the

24 'development factor' to be made with reference to the price of a small plot in a developed lay out, to arrive at the cost of undeveloped land, will be for more than the deduction with reference to the price of a small plot in an unauthorized private lay out or an industrial layout. It is also well known that the development cost incurred by statutory agencies is much higher than the cost incurred by private developers, having regard to higher overheads and expenditure. Even among the layouts formed by DDA, the percentage of land utilized for roads, civic amenities, parks and play grounds may vary with reference to the nature of layout - whether it is residential, residential- cum-commercial or industrial; and even among residential layouts, the percentage will differ having regard to the size of the plots, width of the roads, extent of community facilities, parks and play grounds provided. Some of the layouts formed by statutory Development Authorities may have large areas earmarked for water/sewage treatment plants, water tanks, electrical sub-stations etc. in addition to the usual areas earmarked for roads, drains, parks, playgrounds and community/civic amenities. The purpose of the aforesaid examples is only to show that the `deduction for development' factor is a variable percentage and the range of percentage itself being very wide from 20% to 75%. E. Haryana State Agricultural Market Board v. Krishan Kumar5: “Having regard to the fact that the acquired lands were in a semi- developed area within the Ganaur municipal limits, we are of the view that it would be appropriate to apply an aggregate deduction of 45% from the value of residential plots

5 (2011) 15 SCC 297 25 (towards the land for development and the cost of development) to arrive at the market value of the acquired lands. The High Court has taken the highest of the rates for residential plots. Such a rate will apply to residential plots in developed layouts adjoining the main road, in prime areas. There is no evidence to show the situation of the plots which fetched Rs 425 per square yard and situation of the plots which fetched Rs 225 per square yard. In the absence of any evidence, the deduction of 45% should be made from Rs 225 per square yard which necessarily will apply to residential plots in outlying areas like the acquired lands. Therefore, the market value will be Rs 225 less 45% per square yard, that is, Rs 140 per square yard or Rs 6,77,600 per acre.”

F. In the case Acquainted Realtors LLP v. The State of Haryana6, this Court granted 8% flat increase over the market value assessed by the High Court, in respect of lands from villages which were found to be comparable, observing the slight developmental changes affecting increase in valuation.

G. In the case of Nelson Fernandes v. Special LAO7, this Court increased the High Court’s evaluation of the land from Rs. 38 to Rs. 250 per sq. m. and reduced the deductions from 85% to 20%, holding the High Court’s deductions impermissible in law.

H. In Shaji Kuriakose And Anr vs Indian Oil Corpn. Ltd. And Ors8, this Court has held that

6 (2021) 11 SCC 177 7 (2007) 9 SCC 447 8 (2001) 7 SCC 650

26 in case of a dissimilarity in respect of locality, shape, size or value of the land between the land covered by the sale exemplar under the land acquired, the court can proportionately reduce the value. This Court noticed the following 5 factors while assessing a fair market value of the acquired land:

(i) the sale must be a genuine transaction,

(ii) that the sale deed must have been executed at the time proximate to the date of 14 issue of Notification under Section 4 of the Act,

(iii) that the land covered by the sale must be in the vicinity of the acquired land,

(iv) that the land covered by the sales must be similar to the acquired land, and

(v) that the size of plot of the land covered by the sales be comparable to the land acquired.

13. A court, in determining the market value

of acquired land as one of the factors, relies

on exemplar sale deeds, decides the location/

potentiality of the land sold through a private

sale, and compares the nature and neighbourhood

of the land acquired. The court is guided by

relevant and admissible evidence and practical

or pragmatic ways of commercial transactions, 27 suitable adjustment towards deduction for

development charges and developed area.

13.1. The Reference Court relied on Ex. P-4/3

dt. 13.08.2008. Ex. P-4/3 is in respect of land

situated in Village Malpura. The Sec. 4(1)

Notification is dt. 13.05.2010. Ex. P-4/3 is

anterior in point of time, and the extent of

land is 12 Kanal 2 Marlas, which cannot be

treated as a small residential or commercial

plot. The Reference Court determined

compensation after deducting 60 per cent

towards development. The High Court, in our

considered view, has rightly disagreed with the

approach of the Reference Court. But the High

Court failed by arriving at a market value of

Rs. 1,21,33,320/- without factoring in an

applicable deduction. We are convinced that Ex

P-2 and P-4/3 are not appropriate exemplars to

rely on and are taken into consideration for

28 appreciating the upward increase in market

value in the subject village.

14. The findings of fact recorded both by the

Reference Court and the High Court are kept in

our perspective viz that as on the date of

acquisition, the lands under acquisition were

having CLU certificate under Punjab Scheduled

Roads and Controlled Areas Restriction of

Unregulated Development Act, 1963. The land

under acquisition cannot be completely treated

as agricultural land, and at the same time, the

land cannot also be treated as forming part of

a developed or approved layout. The land has

been in the hands of the landowners for

industrial use, and therefore, the applicable

deduction to the cases on hand could be 33 per

cent. The incremental value of land from

admitted or proved exemplars till the

29 acquisition is evident from Ex. P-4/3 and

Ex. P-Y.

15. We are convinced that the land values in

Malpura Village as evidenced in Ex. P-Y dt.

15.02.2010 are increasing. Ex P-Y has been

brought on record as additional evidence before

the High Court. The Map filed as Annexure P-1

in SLP No. 4487 of 2022 presents a quick view

of the location, distance etc. of both, the

acquired land and the land covered by private

sale. The extent of land covered by Ex. P-Y is

5 Kanal, 2 Marla. The land in Ex. P-Y is on the

western side beyond National Highway No. 8

[Delhi-Jaipur Highway]. The land in sale

exemplar Ex. P-Y is in Malpura Village. The

sale consideration in P-Y is Rs. 1,42,62,445/-

for 5 Kanal, 2 Marla, per acre works out to Rs.

2,23,72,463. Ex. P-Y dt. 15.02.2010 is

immediately preceding Sec. 4(1) Notification

30 dt. 13.05.2010. Therefore, we place reliance on

Ex. P-Y and is an applicable exemplar for

determining the market value of the land under

acquisition. The above discussion takes us to

the next aspect viz applicable deduction on the

exemplar.

16. The acquired lands are not shown or

established as agricultural land. Admittedly,

substantial portions of the land under

acquisition is abutting the National Highway

No. 8. The area, even by the date of

acquisition, is developed with industries in

the proximity and has good potential for

industrial use. CLU certificate discharges the

initial burden of establishing that the land

under acquisition is not agricultural land.

Therefore, we apply the standard deduction 1/3

on exemplar value and are not persuaded to

factor incremental increase on the exemplar in

31 as much as the time gap between Ex. P-Y and

Sec. 4(1) Notification is brief. Assessed as

above, the market value payable to 1 acre in

Malpura village is arrived as follows:

2,23,72,463 x 1/3 = Rs. 74,57,488/-

2,23,72,463 – 74,57,488 = Rs.

1,49,14,975/-

17. The subject lands are acquired under one

notification and the plan brought on record

evidences the location and proximity to

development in and around the acquired land.

The belting of area for valuation would be

incorrect. We reject the argument of the State.

Since we have not applied incremental value on

the exemplar, we deem it just to determine

uniform market value to the lands under

acquisition.

32

18. Hence, for the above reasons and

discussion we allow the appeals in part and

determine the market value at Rs. 1,49,14,975/-

per acre for the acquired lands with standard

statutory benefits. Appeals allowed in part. No

order as to costs.

................J. [B.R. GAVAI]

................J. [S.V.N. BHATTI]

NEW DELHI;

AUGUST 23, 2023.

33