IMPORTANT POINT
Payment of additional amount u/s 23(1-A) of the Land Acquisition Act, is a substantive right, a part of the component of determination of compensation and if the proceedings were pending as on the date the notification u/s 4(1) came into force, the provisions of the Amendment Act. 68 of 1984 would apply.

Headnote:(i) Land Acquisitions-Land Acquisition Act, 1894-Sections 4(1) and 23-Determination of market value-Relevant test laid in that behalf-Burden of proof-Object of enquiry in reference u/s 18-Court enjoined with bounden duty of public function and judicial dispensation in determination of market value of acquired land and compulsory acquisition-Best evidence of value of property being the sale transaction in respect of acquired land to which claimed himself is a party.
       Held that the Court is enjoined to determine the market value on an objective assessment of the conditions prevailing in the open market; the nature of the user of the land to which the land was put on the date of the notification, the situation of the land, the income derived therefrom and all other relevant attending circumstances. The market value so determined should be just, adequate and reasonable. In other words, it must be just equivalent to what the land is capable of fetching in the open market from a walling and prudent buyer. Therefore, the court is required to sit in the arm chair of a bona fide willing and prudent purchaser in the open market and seek an answer to the question whether in the conditions prevailing in the market he would offer the same market value as the court has proposed. (Para 8)
       The best evidence of the value of property are the sale transaction in respect of the acquired land to which the claimant himself is a party; the time at which the property comes to be sold; the purpose for which it is sold; nature of the consideration; and the manner in which the transaction came to be brought out. They are all relevant factors. In the absence of such a sale deed relating to the acquired land, the sale transactions relating to the neighbouring lands in the vicinity of the acquired land. (Para 6)
       The burden of proof that the amount awarded by the Land Acquisition Officer/Collector is not adequate is always on the claimant. The burden is to adduce relevant and material evidence to establish that the acquired lands are capable of fetching higher market value than the amount awarded by the Lands Acquisition Officer/Collector or that the Land Acquisition Officer/Collector proceeded on a wrong premise or applied a wrong principle of law. (Para 4)
       (ii) Land Acquisition Act, 1894-Sections 4(1) and 23-Acquisition of lands of 97 acres in 1980 for development of colony for weaker sections-Except a small fraction of land, lands are agricultural lands-High Court was in error in treating lands as fit for building purpose and on that basis determining compensation @ Rs.23.50 per sq. yard after giving deduction-Taking into consideration all relevant factors, reasonable compensation should be Rs. 50,000/- per acre.
       Held : Except a small fraction of land, the lands are agricultural lands. To make them fit for construction, even according to the conservative estimate, an amount of Rs. 60,000/- per acre would be required. So, no prudent purchaser in open market would be willing to purchase the said lands at the rate of Rs. 23.50 per sq. yard and then spend Rs. 60,000/- per acre to level up the same. It would be figment of imagination to believe that a prudent builder would do that. The High Court, therefore, is clearly in error in treating the lands as fit for building purpose and on that basis determining the compensation after giving the deduction. (Para 9)
       Further held : In a reference under Section 18, as held earlier, the burden of proof always is on the claimants to establish that the lands are possessed of advantageous features and are, therefore, capable of fetching higher market value than what is determined by the Land Acquisition Officer in his award under Section 11. In view of the fact that the High Court itself has rejected all the sale deeds except Ex. A-12 which we are now constrained to reject, and as no other evidence in available, we cannot allow the appeals and dismiss the reference. The Court, instead of indulging into feats of imagination, should sit in the arm chair of a prudent willing purchaser in the normal conditions of the market and seek answer to the question whether he would be willing to offer the amount proposed by the court, after taking into consideration all the features of the land existing as on the date of the notification. In view of the material collected by the Land Acquisition Officer himself as referred in the award, we think that after taking into consideration all the relevant factors, the reasonable compensation should be Rs. 50,000/- per acre. (Para 10)
       (iii) Land Acquisition Act, 1894-Sections 23(1-A) and 30(1)(a)-Additional amount u/s 23(1-A)-Notification u/s 4(1) issued in 1980-Possession taken in 1981-Award made in June, 1982, after introduction of Bill but before the Amendment Act 68 of 1984 came into force -Whether claimants are entitled to additional amount u/s 23(1-A) of the Act ?-(Yes), by operation of transitional provisions in Section 30(1)(a).
       Held : Payment of additional amount under Section 23(1-A) is a substantive right. Under those circumstances, by operation of the transitional provisions in Section 30(1)(a), the claimants are entitled to the additional amount at 12% per annum under Section 23(1-A) from the date of notification under Section 4(1) till the date of taking possession. Instead of Rs. 1,00,000/- per acre, they are entitled to compensation at the rate of Rs. 50,000/- per acre in respect of all acquired lands with solatium at 30% on the enhanced compensation and interest @ 9% for one year from June 20, 1981 and on expiry thereof, @ 15% till date of deposit into the court; and additional amount. Consequently, the award and decree of the reference Court stand modified. The judgment of the High Court stands set aside. (Para 12)

ORDER

Delay condoned.

Substitution ordered.

Leave granted.

2. This batch of appeals relates to the acquisition of the lands of 97 acres 42 cents of land situated in the outskirts of the Tenali town of Guntur District in the State of Andhra Pradesh. The lands were acquired for the development of the colony for the weaker sections - middle income group persons - etc. The notification under Section 4(1) of the Land Acquisition Act was published on December 9, 1980. The Land Acquisition Officer awarded compensation @ Rs 22,940/- per acre for levelled up land and Rs. 21,700/- per acre for unlevelled land. On reference, the Subordinate Judge, Tenali by his award and decree, dated February 26, 1991 award uniform compensation at the rate of Rs. 1,00,000/- per acre. On appeal by the appellants as well as the claimants-respondents, the High Court by judgment and decree dated March 23, 1994, further enhanced the compensation to Rs.23.50 per sq. yard; thus it allowed the appeals of the respondent-claimants and dismissed those of the appellants. Thus, these appeals by special leave and cross appeals by the respondent-claimants for further enhancement of compensation. They are disposed of by common order.

3. The High Court, after rejecting the entire evidence adduced by the claimants relied only on a sale deed, Ex. A-12 dated May 19, 1978 relating to a piece of land of an extent of 250 sq. yard with a thatched house. It worked out compensation at the rate of Rs.48/- per sq. yard; on that basis, it gave margin of deduction of 50% of the awarded compensation, namely, at the rate of Rs. 23.50 per sq.yrd. The question for consideration is: whether the principle laid down by the High Court is correct in law? The Land Acquisition Officer in his award had referred to the topographical features of the land thus :

"The lands under acquisition form a compact block surrounded on the north by Tenali-Guntur Railway Track, on the east by lands owned by South Central Railways. On the south by lands which about the Tenali-Guntur Highway road and also built up area in T.S. No. 22 (in the case for T.S. No. 27) and on the west by Agril lands. T.S. Nos. 26 and 29 which fall in the compact block have already been acquired. The beneficiaries have raised a few huts here and there. R.S. No. A-250 also forms part of the block and it is under acquisition for house sites for weaker sections separately under a separate scheme.

All the lands in the block under acquisition barring a few levelled up fields are similar because of the following reasons :

(1) All the lands are more or less equally inaccessible from the township.

(2) All the lands (excepting few levelled up fields) are read as wet paddy fields similar in soil fortility and productivity.

(3) Excepting the few levelled on plots to level each of the under acquisition, similar levelling up cost is required to be incurred which works out to approximately Rs. 60,000/- per acre in the most conservative estimate. All the lands under acquisition have equal potentiality or otherwise of being used as house sites.

In between the block of lands under acquisition, there is channel running in North-South direction and it touches the Guntur Narakodur Tenali Road. The channel is now not in use.

A metal road has been formed along with the channel by the side of T.S. 15 to make across from truck road to the built up area in T.S. Nos. 23 and 22.

T.S. No. 142 and T.S. Nos. 12, 13, 14 16 which are not under acquisition field in between the lands under acquisition and the Guntur-Narakodur Tenali Road. Unless these fields are developed into Township, there is no prospect of the lands under acquisition features of a township.

Only a few fields stands classified in accounts as semidry and all others stand classified as wet. Notwithstanding the variation in classification, all the lands under acquisition executing a few levelled up plots are wet paddy fields on ground. The few lands which were not grown with paddy

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1997 Supreme(SC) 758

Cases Referred (6)