Kanta Devi & Ors vs State Of Haryana & Anr

9488, 9499 and 9531, all of 2003, leave is 3 granted in respect of all the other Special

Leave Petitions heard along with Civil Appeal

Nos. 1330-1332 of 2003.

2. These appeals, have their genesis in a common

award dated 14th March, 1989, made by the Land

Acquisition Collector, Kurukshetra, whereby he

awarded compensation in respect of the

acquired lands at the rate of Rs.60,000/- per

acre for land in the form of Chahi, Gair

Mumkin Tubewell, etc. and at the rate of Rs.

40,000/- per acre in respect of Gair Mumkin

Talab Land and Rasta Land.

3. Twenty seven References were made to the Land

Acquisition Judge, Kurukshetra, under Section

18 of the Land Acquisition Act, 1894 and the

same were disposed of by an Award dated 2nd

January, 1993.

4. Being dissatisfied as to the extent of

compensation awarded, the claimants filed

Regular First Appeals before the High Court.

Similarly, being aggrieved by the enhancement

of the market value of the lands, the State 4 also preferred 27 Regular First Appeals. In

all, 51 Regular First Appeals, arising from

the common Notification, Award, and Judgment

of the Land Acquisition Judge, were taken up

for hearing together and were disposed of by

the learned Single Judge of the High Court by

a common Judgment dated 10th August, 1999.

5. Aggrieved by the judgment of the learned

Single Judge, the appellants herein filed

Letters Patent Appeals (L.P.As) before the

Division Bench of the High Court which were

mostly dismissed in limine or on account of

technicalities. All the appellants, however,

are similarly circumstanced and having the

same grievance. This batch of appeals have

been preferred against the said judgment and

order of the Division Bench of the High Court

in the various Letters Patent Appeals.

6. Applications have been filed in SLP(C) Nos.

9488/2003, 9499/2003 and 9531/2003 for

substitution and setting aside abatement and

also permission to file Special Leave 5 Petition. As they all arise out of the said

common judgment of the High Court, they are

allowed and leave is also granted in the

connected Special Leave Petitions. As all the

appeals relate to the same Notification under

Section 4 of the Land Acquisition Act, and

arise out of the same Award, they were taken

up for hearing and final disposal together.

7. Coming back to the facts of the case, it may

be indicated that on 12th June, 1986, the

State of Haryana issued a Notification under

Section 4 of the Land Acquisition Act, 1894

(hereinafter, referred to as the "LA Act") for

the acquisition of 265 kanals and 19 Marlas of

land in the revenue estate of village

Ismailabad, District Kurukshetra for the

establishment of a new grain market,

construction of rest house, staff quarters and

other connected purposes of the Market

Committee, Ismailabad. Notification under

Section 6 was thereafter issued on 9th June,

1987 and the Collector, Kurukshetra, by his 6 Award dated 14th March, 1989 awarded

compensation for 250 kanals and 17 marlas,

comprising the first category of land referred

to above, at the rate of Rs.60,000/- per acre.

For 15 kanals and 2 marlas of land comprising

the second category of lands, the compensation

was awarded at the rate of Rs.40,000/- per

acre. Solatium and interest were also awarded

in terms of the provisions of the LA Act.

8. As indicated earlier, twenty seven References

were made under Section 18 of the LA Act to

the District Judge, Kurukshetra. All the said

References were heard together and by his

award dated 2nd January, 1993, the District

Judge, Kurukshetra enhanced the compensation

in respect of

the first category of lands to Rs.1,28,000/- per

acre and in respect of the second category of lands

to Rs.80,000/- per acre.

9. In the Regular First Appeals filed both by the

claimants and the State of Haryana, the High

Court by a common Judgment dated 10th August, 7 1999, enhanced the compensation for the

acquired lands to Rs.2,88,000/- per acre and

it was indicated that all the claimants were

entitled to uniform compensation as the lands

had been acquired for a common purpose.

Consequently, the appeals preferred by the

State of Haryana were dismissed and those of

the claimants were allowed in part.

10. It may be relevant to mention at this stage

that in enhancing the compensation payable to

the claimants-appellants herein, the learned

Single Judge took one exemplar (Ex. P-6) for

the purpose of comparison vis-`-vis the land

acquired. Ex. P-6 is a sale deed, whereby on

30th January, 1986, a plot of land measuring

148 square yards was sold for Rs.24,000/-,

whereas the notification under Section 4 was

issued six months after on 12th June, 1986.

On the basis of the above, the price of the

land in question works out to Rs.9,60,000/-

per acre. The learned Single Judge, while

accepting the aforesaid valuation, directed 8 deduction of 70% of the value of the lands

towards development charges to make the

acquired land suitable for the purpose for

which it had been acquired and also having

regard to the nature of the lands on the date

of publication of the notification under

Section 4 of the LA Act. On the basis of such

deduction, the learned Single Judge uniformly

enhanced the compensation in respect of the

lands acquired to Rs.2,88,000/- per acre. As

indicated hereinbefore, most of the Letters

Patent Appeals filed by the appellants were

dismissed by the Division Bench in limine or

on technical grounds.

11. These appeals have been preferred by the

claimants where Letters Patent Appeals were

disposed of by cryptic orders although they

were aggrieved by the rate of deduction

applied by the learned Single Judge of the

High Court while disposing of the Regular

First Appeals preferred by the appellants as

also the respondents.

9

12. On behalf of the appellants, it was contended

that the rate of deduction as applied by the

learned Single Judge was highly excessive as

the acquired lands were situated in an area

which was already developed. It was

submitted that the acquired lands were

situated at Ambala Pehowa Road in Village

Ismailabad and were adjacent to the Village

abadi where there were houses and shelters,

power house, telephone exchange and a factory.

13. It was also submitted that since the

acquired lands were reserved for commercial

and residential purposes, the claimants had

demanded compensation at the rate of

Rs.15,000/- per marla from the Collector and

in support thereof Sale Deeds in respect of

lands adjacent to the acquired land had been

placed on record to show that the valuation of

the said lands were between Rs.8,000/- to

Rs.9,000/- per marla.

14. It was submitted that this Court had

repeatedly held that in assessing the 10 compensation payable in respect of

agricultural land or undeveloped land which

had potential value for housing or commercial

purposes, normally 1/3 of the assessed value

of the land is deducted depending on the

nature of the land, its location, extent of

expenditure involved for development, and the

land required for roads and other civic

amenities to make the land suitable for

residential or commercial purposes. However,

in the instant case, despite the location of

the acquired land and its potential value, the

compensation payable to the claimants was

reduced drastically without proper reason for

such drastic deduction.

15. In addition to the above, it was submitted

that both the learned District Judge and the

learned Single Judge of the High Court had

erred in holding that the sale deed in respect

of a small plot of land was not a proper

indicator for the purpose of determining the

value of a large tract of land. It was urged 11 that even with regard to the said question,

this Court had consistently indicated that

such sale deeds or such exemplars should not

be discarded in limini, but were to be taken

into consideration while fixing the value of

the lands acquired.

16. In support of the aforesaid submissions

reliance was placed on the decision of this

Court in Lucknow Development Authority vs.

Krishna Gopal Lahoti and Ors. [2007 (12) Scale

685] where deduction for development charges

at the rate of 1/3 of the amount of

compensation was accepted to be normal.

However, it was also indicated that there may

be various factors which were required to be

taken into consideration while deciding the

amount of deduction to be made towards

developmental charges. While in some cases,

it could be more than 1/3, in other cases it

could be less, having regard to the difference

between a developed area or an area having

potential value which is yet to be developed. 12

17. In the same decision, while observing that

where a large area is the subject matter of

acquisition the rate at which small plots are

sold cannot be said to be a safe criteria, it

was also observed that it could not be laid

down as an absolute proposition that the rates

fixed for small plots could not be the basis

for fixation of the value of the acquired

land. However, in such cases necessary

deduction/adjustments have to be made while

determining the value and in the said context

it was held that a deduction of 1/3 of the

compensation amount was considered to be

normal.

18. It was also sought to be urged that apart from

Exh. P.6 on which reliance had been placed by

the High Court certain other exemplars were

also produced on behalf of the claimants which

were not relied upon on the ground that they

had not been properly proved. It was submitted

that with the incorporation of Section 51-A in 13 the LA Act by way of amendment the degree of

proof had been altered and although the

previous legal position was that all sale

deeds on which reliance was placed by the

parties were required to be proved, after the

amendment such proof was not strictly required

and the various foras up to the stage of

Regular First Appeal could rely on such

documents, which included certified copies, as

exemplars without having to prove the same. It

was urged that having regard to the provisions

of Section 51-A of the LA Act the different

foras, including the High Court, had erred in

not placing reliance on all sale deeds that

had been produced on behalf of the claimants

in assessing the amount of compensation

payable in respect of the acquired land.

19. In support of the aforesaid submission

reliance was placed on a Constitution Bench

decision of this Court in Cement Corporation

of India Ltd. vs. Purya and ors. (2004) 8 SCC 14 270 and Ranvir Singh Vs. Union of India (2005)

12 SCC 59, which supported such contention.

20. Since the grievance of the appellants was only

with regard to the rate of deduction on

account of the developmental charges and an

attempt was made on behalf of the appellants

to assert that 70% deduction was unwarranted

as the lands sought to be acquired were

already within or adjacent to a developed

area, on behalf of the State-respondent such

deduction was sought to be justified.

21. It was submitted on behalf of the State-

respondent that the observations made in the

Lucknow Development Authority case was more by

way of caution than laying down the general

law which finds consistent expression in

various other decisions of this Court, such as

Union of India vs. Ram Phool and another

(2003) 10 SCC 167 in which it had been held

that an isolated deed of sale showing a very 15 high price cannot be the sole basis for

determining the market value.

22. It was submitted that the said view was

reiterated in the case of Ranvir Singh

(supra), which, in fact,had been relied upon

by the appellants in relation to the

submissions made with regard to Section 51-A

of the LA Act.

23. It was urged that this Court has consistently

held that small tracts of land purchased for a

particular purpose may fetch fancy prices in

terms of its location and the need for

acquisition by the vendee, but the same basis

could not be applied to each tract of land

which were yet to be developed for public

purposes such as housing or setting apart an

area for a particular purpose such as

education and/or industrialization. It was

submitted that in such cases there could be no

comparison with regard to the value of the 16 lands covered by the sale deed and those

proposed to be acquired, and that the sale

price of such a small tract of land was not a

safe basis for determining the value of a very

large tract of land using the comparative

method.

24. It was, however, fairly submitted that in

Ravinder Narain vs. Union of India (2003) 4

SCC 481 it has been observed in paragraphs 6

and 7 as follows:

"6. Where large area is the subject- matter of acquisition, rate at which small plots are sold cannot be said to be a safe criterion. Reference in this context may be made to three decisions of this Court in Collector of Lakhimpur v. Bhuban Chandra Dutta (1972) 4 SCC 236, Prithvi Raj Taneja v. State of M.P.(1977)1 SCC 684 and Kausalya Devi Bogra v. Land Acquisition Officer, Aurangabad (1984) 2 SCC 324.

7. It cannot, however, be laid down as an absolute proposition that the rates fixed for the small plots cannot be the basis for fixation of the rate. For example, where there is no other material, it may in appropriate cases be open to the adjudicating court to make comparison 17 of the prices paid for small plots of land. However, in such cases necessary deductions/adjustments have to be made while determining the prices."

25. It was also submitted that in the instant case

excluding all the other exemplars, the High

Court had chosen to rely on Ex. P.6, where a

small tract of land (148 sq. yards) had been

sold at the rate of Rs.9,60,000/- per acre and

the compensation had been worked out on such

basis after applying deduction of 70% of the

market value towards developmental charges,

since the lands acquired were agricultural and

huge investment was required to be made by the

State to make the same suitable for the

purpose for which they had been acquired,

namely, the setting up of a new grain market

with all the ancillary infrastructure needed

by the Market Committee, Ismailabad.

26. It was submitted that the deduction of 70%,

which had been applied by the High Court, was 18 quite reasonable as the sale deed relied upon

by the appellants related to lands sold for

shops etc. and Ex. P.6 and other sale

instances had been relied upon by the

appellants for smaller areas. It was urged

that in Viluben Jhalejar Contractor (Dead) by

Lrs. Vs. State of Gujarat, (2005) 4 SCC 789,

this Court had held that there can be

different deductions depending upon various

factors. It was submitted that in various

other decisions and in particular in

K.S.Shivadevamma vs. Assistant Commissioner of

Land Acquisition Officer, (1996) 2 SCC 262, it

was held that although as a general rule 33-

1/2 per cent is required to be deducted for

laying of roads and other amenities, deduction

to the extent of 53% was not improper and the

extent of deduction depends upon the

development need in each case. In Vasavva

(Smt) and others vs. Special Land Acquisition

Officer and others, (1996) 9 SCC 640, this

Court upheld a deduction of 65%.

19

27. As an alternative argument it was urged on

behalf of the State-respondent that since the

High Court had relied only on Ex. P.6 which

related to the sale of only 4 marlas of land,

the matter could be remanded to the High Court

for consideration of all the various sale

deeds which were produced on behalf of the

parties, to arrive at a fresh valuation for

the acquired lands.

28. It was submitted that in view of the above the

submissions made on behalf the claimants under

Section 51-A of the LA Act was not relevant

for determination of the point raised in these

appeals.

29. Having carefully considered the submissions

made on behalf of the respective parties we

see no reason to interfere with the decision

of the High Court.

20

30. The learned Single Judge of the High Court has

taken into consideration the nature of the

land sought to be acquired in relying on

Ex.P.6 in assessing the market value thereof

and has applied a deduction of 70% in arriving

at the compensation to be awarded to the

claimants in respect of the said lands. The

various other documents which were produced on

behalf of the claimants were in respect of the

lands which were similar to the lands forming

the subject matter of Ex.P.6. The learned

Single Judge has given reasons for not relying

on all the other exemplars in choosing to rely

on Ex.P.6 alone. But the rate of deduction

applied appears to be on the high side in

relation to the developmental work involved in

making the acquired land suitable for the

purposes for which they were so acquired. The

acquired lands are adjacent to the village

abadi which is already developed. Having

regard to the consistent view that a deduction

of 1/3rd of the market value is normal, though 21 a higher deduction is permissible, we are of

the view that deduction of 60% would meet the

expenditure towards developmental charges

considering the proximity of the acquired

lands to the areas already developed.

31. In our view, the Division Bench of the High

Court while dismissing the Letters Patent

Appeal filed by the claimants could have given

proper reasons before dismissing the same in

limine. However, since the decision of the

Division Bench endorses that of the learned

single Judge, with which we have dealt with in

detail, and with which we agree, save for the

amount of deduction applied towards

developmental charges, these appeals against

the decision of the Division Bench in

dismissing the appeal filed by the appellant

in C.A.Nos.1330-1332 of 2003, and all the

other connected appeals have to be allowed in

part. As far as the alternative submissions

made on behalf of the State regarding remand 22 of these appeals to the High Court is

concerned, we are not inclined to accept the

same, since we are not convinced that such a

course of action needs to be adopted.

32. The appeals are accordingly allowed in part

only to the extent that the deduction of 70%

applied by the learned Single Judge and

endorsed by the High Court is reduced to 60%.

33. Having regard to the facts of the case there

will be no order as to costs.

.............................................J. (ALTAMAS KABIR)

................................................J. (MARKANDEY KATJU) New Delhi Dated: July 8, 2008