Manilal Shamalbhai Patel (Deceased) Through His Legal Heirs & Ors. vs Officer On Special Duty (Land Acquisition) & Anr.

2025 INSC 393 NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 14670 OF 2015

MANILAL SHAMALBHAI PATEL (DECEASED) THROUGH HIS LEGAL HEIRS & ORS. …APPELLANT(S)

VERSUS

OFFICER ON SPECIAL DUTY (LAND ACQUISITION) & ANR. …RESPONDENT(S)

JUDGMENT

PANKAJ MITHAL, J.

1. Heard Mr. Neeraj K. Kaul, learned senior counsel

appearing for the appellants and Ms. Deepanwita

Priyanka, learned counsel appearing for the respondents.

2. The land of the appellants, Survey No. 179/3 having an

area of 0-98-14 sq. mt. situate in Village Ranoli, Taluka

and District Vadodara, Gujarat was acquired by the

Signature Not Verified Digitally signed by SNEHA DAS Date: 2025.03.25 18:29:15 IST Reason: 1 Government of Gujarat for a public purpose and for the

benefit of Gujarat Industrial Development Corporation1.

3. The notification proposing to acquire the aforesaid land

under Section 4 of the Land Acquisition Act2 was

published on 24.07.1989 which was followed by the final

Declaration under Section 6 of the Act dated 18.07.1990

to acquire the said land. The Special Land Acquisition

Officer3 in exercise of powers under Section 11 of the Act

vide award dated 25.02.1992 offered compensation @

Rs.11 per sq. mt. The appellants were not satisfied with

the above offer/award and as such preferred a Reference

under Section 18 of the Act. The Reference Court vide its

judgment, order and award dated 31.12.2011 passed in

Land Reference Case No. 2303 of 1992 enhanced the

compensation to Rs. 30 per sq. mt. in place of Rs. 11 per

sq. mt. offered by the SLAO. The appellants were still not

satisfied and as such they preferred First Appeal No.670 of

2012 under Section 54 of the Act before the High Court.

1 ‘GIDC’ for short 2 Hereinafter referred to as ‘the Act’ 3 Hereinafter referred to as the ‘SLAO’

2 The said appeal has been dismissed by the order impugned

dated 14.08.2015.

4. Assailing the judgment and order of the High Court, two

broad submissions have been advanced before us. The first

is that there was ample evidence before the courts below

to award higher compensation at least up to Rs.450/- per

sq. mt. and in this connection much reliance has been

placed upon the allotment of land of Plot No. 7/1 by the

GIDC itself for establishing a petrol pump in the year 1988.

Secondly, the courts below have not considered the

existence of a large number of fruit bearing trees,

particularly that of lemon and the income derived

therefrom has not been taken into account.

5. Learned counsel for the respondents submitted that the

compensation as determined by the SLAO is just and

proper, at least there is no justification for enhancement

of the compensation as awarded by the Reference Court.

Therefore, High Court rightly dismissed the appeal.

6. The main plank of the appellants for enhancement of

compensation is based on the allotment letter dated

07.06.1988 (Exhibit 120) pertaining to Plot No. 7/1

3 admeasuring 1900 sq. mt. situate nearby the acquired

land. The said plot of land was allotted by the GIDC to M/s

Dhanlaxmi Automobiles for establishing a petrol pump @

Rs.450/- per sq. mt. The said allotment was on lease

whereas the land of the appellants was a freehold land and

as such at the time of acquisition its value was not liable

to be below Rs.450/- per sq.mt.

7. No doubt, the aforesaid Plot No. 7/1 was within the

proximity of the GIDC area and was hardly about a

kilometre away from the land of the appellants but it was

for commercial purposes whereas the land of the

appellants, which may have had the potential of becoming

a developed area, was in reality, an agricultural land.

8. The letter of allotment of the said Plot No. 7/1 dated

07.06.1988 is on record. It reveals that the land for the

purposes of petrol pump was first allotted on 18.07.1984

at a tentative price of Rs.70/- per sq. mt. with 25% of the

frontage charges. Originally, the area of land allotted was

25000 sq. mt. but finally only 1900 sq. mt. was allotted

with the condition that the allottee will accept the price

whatever is fixed by the GIDC. The GIDC w.e.f. 25.03.1988

4 revised the premium prices of the lands in Ranoli

Industrial Estate to Rs.180/- per sq. mt. Accordingly, the

actual premium price of the said Plot No. 7/1 was worked

out and was realised from the allottee.

9. The aforesaid allotment letter clearly reveals that the land

of Plot No. 7/1 having an area of 1900 sq. mt. was allotted

for the purposes of establishing a petrol pump initially on

18.07.1984 at a tentative rate of Rs.70/- per sq. mt. which

was revised w.e.f. 25.03.1988 to Rs.180/- per sq. mt.,

meaning thereby that the GIDC, for whose benefit the

present land had been acquired, itself had fixed the rate of

Rs.180/- per sq. mt. of the land of the Ranoli Industrial

Estate w.e.f. 25.03.1988. GIDC admits the premium price

of the industrial land in Ranoli village to be Rs.180/- per

sq. mt. from 25.03.1988.

10. The rate of the aforesaid plot fixed by GIDC w.e.f.

25.03.1988 was in close proximity with the acquired land

and as such there appears to be no harm in taking it to be

the best suitable exemplar. The land of the appellants was

notified to be acquired under Section 4 of the Act on

24.07.1989. Thus, there is a gap of over a year between the

5 acquisition of the present land and the allotment of land of

Plot No. 7/1 for establishing a petrol pump and fixing its

price @ Rs.180/- per sq. mt. During this period of one year

if the trend of rising prices is taken into account, one can

easily say that the prices in this one year may have

increased at least by 5%. Thus, increasing the rate of Rs.

180/- per sq. mt. by 5%, the revised rate comes out to

Rs.189/- per sq. mt. rounded off to Rs.190/- per sq. mt.

11. It is an accepted principle that the land acquired is never

used in the form it exists. It has to be first developed and

made suitable either for habitation or for industrial

purposes. In this connection, obviously roads have to be

carved out, some open area has to be left for green belts,

water, sewerage and electricity lines have to be laid down

and the plots have to be carved out into some regular sizes

and shapes. In this way, the transferable/saleable area

hardly remains to be 50% of the land acquired. In such a

situation, the courts have repeatedly held that 30% to 50%

deduction be made from the rate for the purposes of such

development. Even assuming that the acquired land is

within the vicinity of the developed area or the Ranoli

6 Industrial Estate, nonetheless, it is an agricultural land,

may be with a potential of a developed area, which requires

development, as mentioned above. One cannot deny that

the acquired land had to be developed as aforesaid before

making it usable as an industrial site. Therefore, in the

facts and circumstances, by applying some amount of

guess work, we consider that at least 40% of the amount

be deducted for the purposes of development.

12. It is also a settled principle of law that large areas do not

attract the same price as is offered for the small plots of

lands. Therefore, some amount of deduction is also

normally permissible on account of largeness in area.

Thus, deduction of at least 10% has to be applied to

determine the rate of compensation.

13. The determination of the prevalent market value of the

acquired land is not an algebraic formula and that cannot

be determined in a precise or an accurate manner. Some

amount of guess work is always permissible. Therefore, a

judge has to sit in an arm chair and without much taxing

his mind has to determine the market value in a prudent

manner.

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14. Thus, in the facts and circumstances of the case, when the

GIDC itself has fixed the premium price of a plot of land in

Ranoli Industrial Estate at a rate of Rs.180/- per sq. mt.

w.e.f. 25.03.1988, taking it to be the basis or as a best

exemplar, the compensation for the acquired land can

easily be determined by giving advantage of Rs.10/- per sq.

mt. of enhancement on account of rising prices and then

applying deduction of (40% + 10%) 50% on account of

development and largeness in area. Thus, the market rate

of the acquired land to our mind turns out to be (Rs.190/-

reduced to half) Rs.95/- per sq. mt. Accordingly, the

appellants are entitled to compensation of Rs.95/- per sq.

mt. for their acquired land in place of Rs.30/- per sq. mt.

awarded by the Reference Court.

15. In context with the second submission that the courts

below have not considered the income derived from the

fruit bearing trees existing on the land, we find that no

evidence worth the purpose was produced by the

appellants to show the yield of the fruits per year or the

amount of sale consideration realised from the sale of such

fruits. The appellants have simply relied upon the reports

8 of the APMC Anand (Exhibit 104) which simply

demonstrate the existence of lemon trees (big and small)

aged between 5 to 10 years, a few mango trees and some

guava trees. However, these reports do not in any way

indicate the income derived from these trees. In the

absence of any documentary evidence showing the annual

income earned by them from selling the fruits of the trees,

we do not deem it proper to award anything further for the

trees. The SLAO under his award has offered a sum of

Rs.1,06,300/- as the price of the trees and we leave the

compensation with respect to the trees or the income

derived from the trees at that only.

16. The case law cited by the parties is not relevant and

material as the determination of compensation is on facts

and evidence on the settled principles of law.

17. Accordingly, the judgment and order dated 14.08.2015 is

set aside and the award of the SLAO dated 25.02.1992 and

that of the Reference Court dated 31.12.2011 is modified

by fixing the compensation of the acquired land @ Rs.95/-

per sq. mt. with all statutory benefits including interest as

permissible in law.

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18. The civil appeal is allowed to the aforesaid extent.

19. Pending applications, if any, stand disposed of.

.............……………………………….. J.

(PANKAJ MITHAL)

.............……………………………….. J.

(S.V.N. BHATTI) NEW DELHI;

MARCH 25, 2025

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