CHATURBHUJA MODI AND ORS. v. STATE OF ORISSA AND ANR.

A # [2010] 9 S.C.R. 849 ## CHATURBHUJA MODI AND ORS. _v._ STATE OF ORISSA AND ANR. (Civil Appeal No. 940 of 2004) AUGUST 11, 2010 B **[DR. MUKUNDAKAM SHARMA AND ANIL R. DAVE, JJ.]** _Land Acquisition Act, 1894: Acquisition of large tract of land_ - _Compensation_ - _Determination of market value_ - C _Comparable_ sale - _Criteria for relying on_ sale _deeds_ - _Held: Sale deed by which_ a _very_ small _piece of land_ was _sold cannot be made the_ basis _for determining the market value of the acquired land_ - _Sale deed which_ was _proximate to the date of_ s.4 _notification and_ a/so _in geographical proximity to_ D _the acquired land can be made the_ basis - _Where the market value of large block of land_ is _determined on the_ basis _of sale_ · _transactions for smaller property, appropriate deduction has to be made for making allowance for the_ loss _of the acquired land required to be_ ' _used for internal development_ - _The_ E _extent of area required to be_ set _apart_ has _to be_ assessed _by the court having regard to the shape,_ size _and situation of the concerned block of land_ - _In the instant_ case, _High Court fixed the rate of the land at_ Rs. _3, 00, 0001- per acre after giving_ some _variations and discount, which in the light of evidence_ F _on record_ was _just and proper._ F **A Notification under Section 4 of Land Acquisition Act, 1894 was published on 9.12.1982 proposing to acquire land belonging to the appellants situated in Cuttack, Orissa. The Land Acquisition Officer assessed the market value of the land @ Rs.75,000 per acre. The reference court enhanced the compensation to Rs.1,50,000 per acre. Dissatisfied with the amount of** G H 849 [2010] 9 S.C.R. 850 SUPREME COURT REPORTS A compensation, the appellants-landowners filed appeal before the High Court. They produced two sale deeds, Exhibit 1 dated 4.10.1982 and Exhibit 2 dated 17.4.1982. The High Court did not rely upon Exhibit 2. It, however, relied upon Exhibit 1 and enhanced the compensation to B Rs.3,00,000 per acre. Still aggrieved, landowners filed the instant appeal. Dismissing the appeal, the Court HELD: 1.1. The criterJa which provide a good C indication of whether a sale deed may be comparable to the one in question are: (1) it must be within a reasonable time. of date of notification under Section 4(1) of the Act; (2) it should be a _bonafide_ transaction; (3) it should be sale_ of the land acquired or of the land adjacent to the D one acquired; and (4) it should possess similar advantage. [Para 9] [855-G-H; 856-A] 1.2. Exhibit 2 was a certified copy of registered sale deed dated 17.04.1982 by which a very small piece of E land measuring only Ac. 0.003 decimals was sold at the rate of Rs. 9, 00,000/- per acre and therefore, it cannot be put up as a safe guide and basis for determining the market value of the acquired land which admeasured Ac. 2.429 decimals. It also came in the evidence, which was F relied upon by the civil court, that the purchaser of Exhibit 2 had his own land adjoining the land covered under it and, therefore, he might be in dire necessity for purchasing the said land even at a higher price. The High Court, therefore, rightly kept Exhibit 2 sale deed out of its consideration. As regards the other sale deeds which G were produced on behalf of the Land Acquisition Officer, namely Exhibits B to B/3, there was no evidence by the Collector indicating that the lands covered by the said sale deed transactions were in any manner comparable land with that of the land under acquisition. Therefore, H CHATURBHUJA MODI AND ORS. _v._ STATE OF 851 ORI SSA the said sale deeds also cannot be made the basis for determining fair and reasonable market price of the land acquired. [Paras 6-8] [854-E-H; 855-A-F] A > 1.3. Although the land admeasuring Acre. 0070 > decimals sold at the rate of Rs.5,50,000 per acre, under 8 the sale deed evidenced in Exhibit 1 was not an excellent comparison in terms of area, the same indicated a sale transaction completed at around the same time as the acquisition of the said land. Moreover, Exhibit 1 also concerned a plot that was in geographical proximity to the acquired land. Reliance could be placed on the said C documentary evidence for determining and assessing the compensation of the acquired land after giving the necessary deduction. [Para 9] [856-A-C] 1.4. While determining compensation, some D conjecture is unavoidable as it is generally not possible to have any documentary evidence of sale of land of similar nature and in the near vicinity of the acquired land. Where large tracts of land are required to be valued, valuation in transactions with regard to small plots is not E to be taken as the real basis for determining the compensation of large tracts of land. It follows that where the market-value of large block of land is determined on the basis of sale transactions for smaller property, appropriate deduction has to be made for making F allowance for the loss of the acquired land required to be used for internal development such as construction of roads, drains, sewers, open spaces and the-expenditure involved in providing other amenities like water, electricity etc. The extent of area required to be set apart has to be assessed by the court having regard to the G- shape, size and situation of the concerned block of land. The High Court appeared to have taken notice o.f the criteria and had given some discount in the compensation amount as the land under Exhibit 1 was a H 852 SUPREME COURT REPORTS [2010] 9 S.C.R. A very small piece of land and the land acquired in the case in hand was much larger in size. After giving some variations and discount, the High Court fixed the rate of the land at Rs. _3,00,0001-_ per acre, which in the light of evidence on record, seems to be just and proper. [Paras B 10-11] [856-E-H; 857-A-C] _Administrator General of West Bengal v. Collector, Varanasi_ (1988) 2 SCC 150 - referred to. ## Case Law Reference: c (1988) 2 sec 150 referred to Para 10 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 940 of 2004. D From the Judgment and order dated 12.09.2002 of the High Court of Orissa in First Appeal No. 300 of 1998. Ashok Panigrahi, Suvender S. Dash and Satya Mitra Garg for the Appellants. E Anukul Chandra Pradhan, Shiv Sagar Tiwari and Radha Shyam Jena for the Respondents. The Judgment of the Court was delivered by DR. MUKUNDAKAM SHARMA, J. 1. This appeal is F directed against the judgment and order dated 12.09.2002 passed by the High Court of Orissa at Cuttack. The appellant and the State filed three appeals before the High Court against the judgment and order dated 16.04.1998 passed by the learned Civil Judge (Senior Division), First Court, Cuttack in G L.A. Case No. 3 of 1995. The said appeal arose out of a land acquisition proceeding pertaining to the land of the appellants - claimants herein. 2. A notification under Section 4(1) of the Land Acquisition H Act was published on 09.12.1982, proposing to acquire land CHATURBHUJA MODI AND ORS. _v._ STATE OF 853 'ORISSA [DR. MUKUNDAKAM SHARMA, J.] of the appellants measuring 2.429 acres covered under Khata A No. 581 of Mouza - Bahar Bisinabar for construction of additional building, office, garage and staff quarters of Orissa State Financial Corporation, Cuttack. The Land Acquisition Officer assessed the market value of the land at the rate of Rs. 75,000/- per acre. The appellants - claimants sought for a B reference to the learned Civil Judge as envisaged under Section 18 of the Land Acquisition Act, and the Ld. Judge after receiving evidence adduced by the parties, enhanced the compensation to Rs. 1,50,000/- per acre. The appellants - claimants being dissatisfied with the aforesaid determination c of compensation, filed an appeal before the High Court, claiming a higher compensation at the rate of Rs. 12, 50,000/ - per acre. After appreciation of the evidence available on record and relying primarily on the sale consideration in Exhibit 1, dated 06.10.1982, the High Court enhanced the 0 compensation for the acquired land to Rs. 3,00,000/- per acre and also he!d that the appellants should be entitled to other statutory benefits as available under the Act. 3. The appellants, still aggrieved, filed the present special leave petition in this Court in which leave was granted after which the appeal is listed for hearing. We took up the appeal for hearing ,during the course of which we heard learned counsel appearing _i_ for the parties who i"1ave painstakingly taken us through th~ evidence on record in support of their contentions. 4. Thi~ appeal is filed to prove and establish that the acquired lartd is situated in the heart of the Cuttack City and close to the National Highway No. 5. The land was acquired for construction of additional building of O.S.F.C. for accommodation of office etc. At the time of acquisition, other commercial establishments like a cinema hall, hotel, etc. had already come up near about the acquired land. The learfled Civil Judge as well the High Court found that the acquired land is not on the side of National Highway No. 5 but the same is not very far away from the said Highway. It is also on record E F G H 854 SUPREME COURT REPORTS [2010] 9 S.C.R. - A that the acquired land is a low-lying land and remains waterlogged round the year. But the said fact could not belie the fact that the acquired land had great potential value. In order to assist the Courts to properly assess and determine the fair and reasonable market value, the parties adduced evidence, both - B oral and documentary. 5. In this appeal, the parties have adduced limited evidence to establish their case. The records indicate that the appellants had filed two certified copies of the registered sale C deeds, namely Exhibits 1 and 2, which were of course exhibited without objection from the respondent. Sale deeds were produced on behalf of the respondent - State and Land Acquisition Officer also, and they were exhibited as Exhibit B to B/3 but the same were marked as such with objection. Exhibit 1, which was produced by the appellants herein, is a D certified copy of the registered sale deed dated 04.10.1982. Under the aforesaid sale deed, a total land of Acre 0.0070 decimals in Baharbisinabar was sold for Rs. 40,000/~ i.e. at the rate of 22,500/- per gunth or Rs. 5,50,000/- (approximately) per acre. E 6. The other sale deed relied upon by the appellants - claimants is Exhibit 2, which is a certified copy of registered sale deed dated 17.04.1982 by which land measuring Ac. 0.003 decimals was sold for Rs. 2,700/-. Exhibit 2 shows that F a very small piece of land measuring only Ac. 0.003 decimals was sold at the rate of Rs. 9, _00,0001-_ per acre indicating its highly inflated value, which is established even when compared with Exhibit 1. Sale of such a tiny piece of land must have been for some specific object. The land which is acquired in the G present case is a large tract of land, measuring Ac. 2.429 decimals and therefore, Exhibit 2 cannot be put up as a safe guide and basis for determining the market value of the present acquired land. The High Court has therefore rightly kept said sale deed out of its consideration. It has also come in evidence, H which is referred to and relied upon by the Civil Judge, that the CHATURBHUJA MODI AND ORS. _v._ STATE OF 855 ORISSA [DR. MUKUNDAKAM SHARMA, J.] purchaser of Exhibit 2 had his own land adjoining to the south A of the land covered under it. Therefore, it appears that the purchaser was in dire necessity for purchasing the said land for the convenience of his own adjoining land. That being the position, the purchaser of the land in Exhibit 2 was even prepared to purchase the same at a higher value. Figures B represented in sale deeds may not always be seen by Courts as a parameter of existing fair values. In that view of this 1 aspect, the assessed value of the acquired land is not comparable to the land mentioned in Exhibit 2. 7. In so far as the evidentiary value of Exhibit 1 is concerned, the same is found to be proximate to the date of notification under Section 4(1) but under the said notification, another small piece of land measuring Ac. 0.070 decimals of land was also sold for Rs. 5,50,000/- per acre. The document, however, did not indicate whether the said land is in proximity to the acquired land or if the same is comparable to the land in question. By the aforesaid' sale deed, only a small piece of land was sold whereas the acquired land is a large tract of land. C D 8. Other sale deeds which were produced on behalf of the Land Acquisition Officer, namely Exhibits B to B/3, were placed on record under objection. There is no evidence by the Collector indicating that the lands 1.~vered by the aforesaid sale deed transaction are in any manner comparable land with that of the land under acquisition. The land under the said sale deeds are located in some other village whereas the acquired land is "Puratan Partita" in Kisan, but the land sold vide Exhibit B series are Bari in Kisan. Therefore, the said sale deeds also cannot be made as the basis for determining fair and reasonable market price of the land acquired. 9. The only evidence that could be considered and relied upon is Exhibit 1. The following criteria provide a good indication of whether a sale deed may be comparable to the one in question: (1) it must be within a reasonable time of date of notification under Section 4(1) of the Act; (2) it should be a ·'E ·F G H 856 SUPREME COURT REPORTS > [2010) 9 S.C.R. A bonafide transaction; (3) it should be a sale of the land acquired or of the land adjacent to the one acquired; and (4) it should possess similar advantage. Although the land whose sale is evidenced in Exhibit 1 is not an excellent comparison in terms of area, the same indicates a sales transaction completed at 1 8 around the same time as the acquisition of the said land. Moreover, Exhibit 1 also concerns a plot that is in geographical proximity to the acquired land. There being no other evidence on record, and since we are not inclined to remand the matter after such a long delay, we would rely on Exhibit 1 with C necessary scrutiny and caution. Reliance could be placed on the said documentary evidence for determining and assessing the compensation of the acquired land after giving the necessary deduction. 10. The High Court appears to have taken notice of the D aforementioned criteria and has given some discount in compensation as the land under Exhibit 1 is a very small piece of land and the land acquired in the case in hand is much larger in size. After giving the said discount, the High Court computed the compensation at the rate of Rs. 3,00,000/- per acre for the E acquired land. While determining compensation, some conjecture is unavoidable as it is generally not possible to have any documentary evidence of sale of land of similar nature and in the near vicinity of the acquired land. The value shown in Exhibit 1 cannot be assessed as the value of the acquired land F for the reason that the said land which is sold under Exhibit 1 is a very small piece of land, whereas the acquired land being a large tract of land. This Court has held in _Administrator General of West Bengal v. Collector, Varanasi,_ reported at (1988) 2 sec 150, that where large tracts of land are required G to be valued, valuation in transactions with regard to small plots is not to be taken as the real basis for determining the compensation of large tracts of land. It follows that where the market-value of large block of land is determined on the basis of sale transactions for smaller property, appropriate deduction H has to be made for making allowance for the loss of the CHATURBHUJA MODI AND ORS. _v._ STATE OF 857 ORISSA [DR. MUKUNDAKAM SHARMA, J.] acquired land required to be used for internal development such A as construction of roads, drains, sewers, open spaces and the expenditure involved in providing other amenities like water, electricity etc. The extent of area required to be set apart has to be assessed by the Court having regard to the shape, size and situation of the concerned block of land. B B 11. After giving some variations and discount, the High Court fixed the rate of the land at Rs. 3, 00,000/- per acre, which in our considered opinion and in the light of evidence on record, seems to be just and proper. Consequently, we dismiss C this appeal as we find no merit in it but without any cost. D.G. Appeal Dismissed.