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SUPREME COURT OF INDIA
JASWANT SINGH, R.S. PATHAK AND A.P. SEN, JJ.**
The Collector, Raigarh, Appellant
Versus
Dr. Harisingh Thakur and another, Respondents and vice-versa.
Civil Appeals Nos. 64-65 of 1969, D/- 17-11-1978.
Advocates appeared
Mr. S. K. Gambhir, Advocate, for Appellant in C. A. No. 64 and Respondent in C. A. No. 65 of 1969; Mr. G. L. Sanghi Sr. Advocate (M/s. K. John and J. Sinha, Advocates with him), for Respondent in C. A. No. 65 of 1969; Mr. G. L. Sanghi Sr. Advocate (M/s. K. Johan and J. Sinha, Advocates with him), for Respondent in C. A. No. 64 and Appellant in C. A. No. 65 of 1969.
Constitution of India, 1950 - Payment of compensation - Plot of agricultural land - Giving rise to these appeals are On an undertaking given by him to pay full compensation with interest from date of possession to date of payment compensation as provide Land Acquisition Act hereinafter referred to as Act District Engineer South Eastern Railway took advance possession on January of five plots of agricultural land admeasuring acres and another plot of agricultural land admeasuring acre adjoining railway track situate in village and District suburb belonging to respondents respectively for doubling railway line between Rourkela in South Eastern Railway – Held, In absence of comparable sales only other alternative to adopt is capitalized value - Compensation in respect of agricultural land should be allowed on basis of years purchase - Capitalization basis cannot however be accepted in case whereas in instant case there is no evidence of profits yielded from land – Court would therefore for these reasons allow appeal of State of Madhya Pradesh - It is with reluctance that court have written this separate opinion - There has never been public undertaking in country – Governmental Municipality or industrial but that landholder has generally secured anything from four to forty times as much for land as its agricultural pricey - Many times its real value - This result unfortunately springs from general tendency of District Judges in hearing reference Land acquisition Act assume that purely agricultural lands merely by their proximity to city or town become endowed with special adaptability as building site - While it is not suggested that unfairly low value should be offered on hand temptation to over generosity must equally resisted - Such generosity at public expense reacts against development and against prosperity of country and imposes an unnecessary burden on tax-payer - Appeal dismissed
Based on the provided legal document, the key points are as follows:
The case involves land acquisition for railway expansion, where the government took possession of agricultural land with an undertaking to pay full compensation with interest, as per the applicable Land Acquisition Act (!) (!) .
The land in question was primarily agricultural and situated near a town, with some parts being used for construction of railway staff quarters, but its fundamental classification remained agricultural at the time of acquisition (!) (!) .
The valuation of the land was contested, with the government and courts initially considering the land's potential as a building site based on its proximity to urban areas and existing constructions, leading to higher compensation calculations (!) (!) .
The evidence for comparable sales was weak or inadmissible, and some sale transactions relied upon were deemed fictitious or inflated, which affected the accuracy of the valuation process (!) (!) (!) .
The courts emphasized that the valuation should be based on the actual condition of the land at the time of notification, primarily as agricultural land, unless there was clear evidence of its potential for development or building use (!) (!) .
The principles for determining compensation include considering the market value at the date of notification, the land's potential uses, and comparable sales, with a strict approach towards evidence reliability and relevance (!) (!) .
The courts highlighted the importance of avoiding speculative valuation increases due to anticipated development or future town growth, stressing that compensation should reflect the land's true market value at the relevant date (!) (!) .
Ultimately, the courts dismissed the appeals, affirming that the compensation awarded was appropriate based on the evidence and principles applied, and cautioned against overestimating land value due to proximity to urban areas without concrete evidence of development potential (!) (!) .
A separate minority opinion expressed concern over the tendency of courts to overvalue agricultural land based on its proximity to towns, which can lead to excessive compensation and burden on public resources, advocating for a more cautious and evidence-based approach (!) (!) .
The case underscores the necessity of proper evidence, fair valuation methods, and adherence to legal principles in land acquisition cases to ensure just compensation without undue inflation.
Judgment
JASWANT SINGH, J. (For himself and R. S. Pathak, J.) (Majority view) :- These two cross-appeals by certificates of fitness granted by the High Court of Madhya Pradesh at jabalpur are directed against the judgment and decree dated December 1, 1961 of the said High Court dismissing the Misc. (First) Appeal No. 43 of 1959 preferred by the appellant from the Award dated December 20, 1958 of the II Additional District Judge, Raigarh in Miscellaneous Judicial case No. 59 of 1958 being a reference under Section 18 of the Land Acquisition Act, made at the instance of the appellant in respect of the Award dated August 23, 1957 of the Land Acquisition Officer, Raigarh.
2. The facts giving rise to these appeals are : On an undertaking given by him to pay full compensation with interest from the date of possession to the date of payment of compensation as provide in the Land Acquisition Act, 1894 (hereinafter referred to as the Act), the District Engineer, South Eastern Railway, Raigarh, took advance possession on January 17, 1957 of five plots of agricultural land admeasuring 3.38 acres and another plot of agricultural land admeasuring 0.14 acre adjoining the railway track situate in village Darogamuda, Tehsil and District Raigarh, a suburb of Raigarh, belonging to respondents 1 and 2 respectively for doubling the railway line between Rourkela and Durg in the South Eastern Railway. Subsequently Notification dated February 8, 1957 under Section 4 (1) of the Act for acquisition of the aforesaid plots of land was issued and published in the Government Gazette dated February 15, 1957. This was followed on March 21, 1957 by a notification under Section 6 of the Act. Although in the statements filed by them under S. 9 (2) of the Act the respondents claimed compensation at the rate of Rs. 32,670 per acre i. e. at the rate of - /12/- per square foot on the ground that the plots of land in question had a great potential value as a building site and Rs. 500 for improvements and Rs. 100 as the value of one tree, the Special Land Acquisition Officer, Raigarh by his award dated August 23, 1957 awarded compensation at the rate of Rs. 3,327/14/- per acre which roughly worked out at -/1/6 per square foot on the basis of the statement of sales furnished by A. S. L. .R (L. A.) prepared by Juihar Singh N. A.- W. I. Not satisfied with the quantum of compensation, the respondents made an application to the Sepcial Land Acquisition Officer requesting him to refer the matter to the Court under Section 18 of the Act. Acceding to the request of the respondents, the Special Land Acquisition Officer made the aforesaid reference to the II Additional District Judge, Raigrah, who by his award dated December 20, 1958 enhanced the rate of compensation to -/4/- per square foot and awarded Rs. 36,808/4/- and Rs. 1,524/8/- to respondents 1 and 2 respectively as compensation. The Additional District Judge also allowed the solatium at the rate of 15% amounting to Rs. 5,521/4/- and Rs. 228/12/- to respondents 1 and 2 respectively. Aggrieved by the said Award of the II Additional District Judge, the appellant preferred an appeal to the High Court of Madhya Pradesh at Jabalpur which was registered as Miscellaneous (First) Appeal No. 43 of 1959. In the said appeal, the respondents filed cross-objections claiming enhancement of compensation by Rs. 84,518.39 p. The High Court by its judgment dated December 1, 1961 dismissed the aforesaid appeal preferred by the appellant but allowed the cross-objections filed by the respondents holding the reasonable rate of compensation to the -/8/- per square foot. Consequently respondent No. 1 was held entitled to Rs. 73,616-8-0 as compensation and Rs. 11,042-8-0 as solatium and respondent No. 2 was held entitled to Rs. 3,049-0-0 as compensation and Rs. 457-8-0 as solatium. It is against this judgment of the Hgih court that the present appeals are directed.
3. Appearing for the appellant, Mr. Gambhir while admitting that in an appeal und
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