T.S. Ramachandra Shetty vs Chairman, Karnataka Housing Board & Anr

T.S. Ramachandra Shetty ... Appellant

Versus

Chairman, Karnataka Housing Board & Another ... Respondents

WITH

CIVIL APPEAL NOS.3333 AND 3334 OF 2001

JUDGMENT

Dalveer Bhandari, J.

We are disposing of Civil Appeal Nos.3332 to 3334

of 2001 by this judgment. The facts of these appeals are

identical. For the sake of convenience, the facts are

being taken from Civil Appeal No.3332 of 2001.

Appellant's land measuring 1 acre 32 guntas in Survey

No.32/1 at Henjagondanahalli village was acquired 2

pursuant to the preliminary notification published on

20.5.1997.

The Land Acquisition Officer had granted

compensation at the rate of Rs.17,500/- per acre. The

Reference Court on appeal enhanced the amount from

Rs.17,500/- to Rs.2,17,800/- per acre. This amount was

calculated at the rate of Rs.5/- per square feet. The

Karnataka Housing Board aggrieved by the said

judgment preferred appeal before the High Court of

Karnataka. The Division Bench of the Karnataka High

Court while taking into consideration all the facts

reduced the amount of compensation from Rs.2,17,800/-

to Rs.1,30,680/- per acre. This amount of compensation

has been calculated at the rate of Rs.3/- per square feet.

In the impugned judgment, the High Court has

mentioned that the claimant-appellant herein himself

had purchased the land in question on 24.3.1986 for

Rs.45,000/- which is based on calculation at the rate of

Rs.1.75 per square ft.

3

The preliminary notification under section 4(1) of

the Act was issued a year later i.e. 20.5.1987. The

appellant relied on the sale deeds executed subsequently

and that too for smaller pieces of lands meant for

housing sites being Ex.P.2 and that of 1990. The High

Court in the impugned judgment has rightly observed

that Ex.P.2 cannot be taken into consideration

particularly keeping in view that the sale deed in respect

of this very acquired land which was effected only a year

ago in 1986 itself was available as a ready basis for

determining the market value of the land.

The High Court in the impugned judgment observed

that after giving reasonable deductions towards

development charges, the market rate can be safely taken

as Rs.3/- per square feet since this price was even

suggested for the lands in question even by the

respondent - Housing Board to the claimant-witness.

The High Court granted compensation at the rate of

Rs.3/- per square feet. The compensation in this case

worked out to be Rs.1,30,680/- per acre. The High Court 4

also observed that the appellant - land owner will also be

entitled to other statutory benefits and interest as per the

provisions contained under sections 23 and 28 of the Act.

The fact is that this very land was purchased by the

appellant a year ago i.e. on 24.3.1986 for Rs.45,000/-

and for the same land the High Court gave compensation

of Rs.1,30,680/- per acre only after a year. In our

considered opinion, the view which has been taken in the

impugned judgment is in consonance with the settled

legal position. The High Court has taken into

consideration all the relevant facts in granting

compensation. The High Court was fully justified in

giving due weightage to the fact that the sale deed of

1986 in respect of this very acquired land was available

and the same ought to be the basis for determining the

market value of the land.

Learned counsel for the respondent placed reliance

on the case of Bangaru Narasingha Rao Naidu & Ors.

v. Revenue Divisional Officer, Vizianagaram (1980) 1 5

SCC 575. In this case, this Court observed that the best

evidence of the market value of the acquired land is

afforded by transactions of sale in respect of the very

acquired land.

In the case of Special Tehsildar Land

Acquisition, Vishakapatnam v. A. Mangala Gowri

(Smt.) (1991) 4 SCC 218, this Court observed as under:

"The market value postulated in Section 23(1) of the Act designed to award just and fair compensation for the lands acquired. The word "market value"

would postulate price of the land prevailing on the date of the publication of the notification under Section 4(1).

The acid test that for determining the market value of the land, the price which a willing vendor might reasonably expect to obtain from a willing purchaser would form the basis to fix the market value. For ascertaining the market rate, the Court can rely upon such transactions which would offer a reasonable basis to fix the price. The price paid in sale or purchase of the land acquired within a reasonable time from the date of the acquisition of the land in question would be the best piece of evidence. In its absence the price paid for a land possessing similar advantages to the land in the neighbourhood of the land acquired in or about the time of the notification would supply the data to assess the market value. But exclusion of bona fide and genuine sale transactions in respect of the same land under acquisition and to place reliance on the award of some other land is obviously illegal. 6 In the case of Periyar and Pareekanni Rubbers

Ltd. v. State of Kerala (1991) 4 SCC 195, in para 10,

this Court observed as under:

"10. ..When the Courts are called upon to fix the market value of the land in compulsory acquisition, the best evidence of the value of property is the sale of the acquired land to which the claimant himself is a party, in its absence the sales of the neighbouring lands. In proof of the sale transaction, the relationship of the parties to the transaction, the market conditions, the terms of the sale and the date of the sale are to be looked into. These features would be established by examining either the vendor or vendee and if they are not available, the attesting witnesses who have personal knowledge of the transaction etc. The original sale deed or certified copy thereof should be tendered as evidence. The underlying principle to fix a fair market value with reference to comparable sales is to reduce the element of speculation. In a comparable sale the features are: (1) it must be within a reasonable time of the date of the notification; (2) it should be a bona fide transaction; (3) it should be a sale of the land acquired or land adjacent to the land acquired and (4) it should possess similar advantages. These should be established by adduction of material evidence by examining as stated above the parties to the sale or persons having personal knowledge of the sale transactions. The proof also would focus on the fact whether the transactions are genuine and bona fide transactions."

Learned counsel for the respondent also placed

reliance on Printers House Pvt. Ltd. v. Cold Storage 7

and Food Products and Ors. (1994) 2 SCC 133. He

drew our attention to paragraph 7 of this judgment

which deals with the similar proposition that the sale

price of the acquired land is an important factor for

determining the compensation.

Reliance has also been placed on the case of

Ranvir Singh and Another v. Union of India (2005) 12

SCC 59. In this case, the Court reiterated the well

settled principle that the sale deeds pertaining to the

portion of lands which are subject to acquisition would

be the most relevant piece of evidence for assessing the

market value of the acquired lands.

The facts of the case of The Dollar Company,

Madras v. Collector of Madras (1975) 2 SCC 730 are

identical to the facts of the instant case. Relevant

portion of paragraphs 5 and 6 read as under:

"In determining the market value the main criterion is what a willing purchaser would pay a willing vendor. Ordinarily a party will be entitled to get the amount that he actually and willingly paid for a particular property, provided the transaction be bona fide and entered into with due regard to the prevalent market conditions and is proximate in 8

time to the relevant date under Section 23. The best evidence of the value of property is the sale of the very property to which the claimant is a party. If the sale is of a recent date, then all that need normally be proved is that the sale was between a willing purchaser and a willing seller, that there has not been any appreciable rise or fall since and that nothing has been done on the land during the short interval to raise its value. But if the sale was long ago, may be the Court would examine more recent sales of comparable lands as throwing better light on current land value. Such lands should be close by and not a mile-and-half away as one of the examples pressed here was. So, an actual transaction with respect to the specific land of recent date is a guide-book that courts may not neglect when called upon to pin the precise compensation."

Similarly, in the instant case, only an year ago, the

appellant himself purchased this very piece of land for

Rs.45,000/- and after an year, the State has given

compensation of Rs.1,30,680/-, which cannot be said to

be inadequate by any stretch of imagination. The

Reference Court was not justified in enhancing the

amount of compensation to Rs.2,17,800/-. There is no

basis whatsoever. In our considered opinion, the view

which has been taken by the High Court in the

impugned judgment is based on settled legal position of

law, as indicated in some of the cases noted above. No 9

interference is called for. These appeals being devoid of

merits are accordingly dismissed, leaving the parties to

bear their own costs.

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

...........................J. (H.S. Bedi) New Delhi;

January 22, 2009.