Important point
Generally instances of sale of small tracks of land cannot form acceptable basis for determining the market value of large tracks of land, unless suitable deductions are made in respect of the developmental charges.

Headnote:Land Acquisition Act, 1894—Sections 4, 6, 18 and 23—Claim for compensation—Principles to be kept in mind with reference to comparable sales—Instance of acquisition by the State Government within a distance of about 500 yards from the present land—Acquisition of land for purpose of establishing a base camp of Sheep Breeding Farm—Petitioner claimed compensation at the rate of Rs 12,000/- per Kanal for the land and compensation for trees separately—Land Acquisition Collector fixed compensation for the land at the rate of Rs. 800 per Kanal—Reference for enhanced compensation—Reference Court held that comparable instances of sale cited by appellant were in respect of very small pieces of land while the acquired land was a big chunk—Reference Court not considering those sales assessed the market value at Rs. 800/- per Kanal—High Court enhanced the compensation for land to Rs. 1,000/- per Kanal—High Court considered an instance of sale of land which was about 400 to 500 yards away from the land acquired across the river @ Rs. 1000/- per Kanal—Whether High Court was justified in taking this as reasonable comparable instance of sale and fixing the market value of the acquired land based thereupon—(Yes)—Whether Reference Court was justified in rejecting his claim for trees—(No).
Held : Generally instances of sale of small tracks of land could not form acceptable basis for determining the market value of large tracks of land, unless suitable deduction was made in respect of the developmental charges and land to be set apart. However, it was pointed out that the nature of the land acquired would be determinative of the issue as to how much of deductions are to be made in respect of developmental charges and other related expenses. This would of course depend on the nature of the land, its topography and special features, if any, and the state of its development so as to make it suitable for being adapted for immediate use. (Para 10)
The Division Bench of the High Court was of the view that although instances of sale of smaller chunks of land could not be always relied upon, there was no reason why the instance of acquisition by the State Government within a distance of about 500 yards from the present land for the purpose of setting up Sheep Breeding Farm could not be considered. In the instant case the land was situated across the river on Thethri on the right side and its market value was fixed at Rs. 1000 per kanal. The High Court was, therefore, justified in taking this as reasonable comparable instance of sale and fixing the market value of the acquired land based thereupon. Turning to the other question as to the valuation of trees, it appears that there has been an omission on the part of the Reference Court in rejecting the claim on the ground that there was no specific reference made. It must be remembered that the Reference made under Section 18 was for determination of the amount of compensation payable to the appellant for the “land” acquired. The expression `land’ as defined in Section 3(a) of the Act is inclusive of benefits to arise out of the land and things attached to the earth or permanently fastened to anything attached to the earth. As a matter of fact, the land acquisition officer had worked out the compensation for 261 trees in Khasra No. 804 determined as Rs. 17,315/- and the cost of 96 trees in Khasra No. 805 determined as Rs. 6207/-. Issue no.2 raised by the Reference Court was “whether the value of trees worth Rs. 300/- per tree, has not been included in the award”. While answering this issue, the Reference Court has taken the view that the Reference Court has no jurisdiction to determine the controversy as it has not been referred by the Collector. This, in our view, is erroneous. The Reference Court ought to have adjudicated the claim of the appellant for higher compensation in respect of trees. On account of the unduly restrictive view taken of its own jurisdiction, the Reference Court fell into error. The single Judge and the Division Bench also fell into the same error in totally rejecting this claim as beyond jurisdiction. In our opinion, the appellant is entitled to have his claim in respect of the trees on the land acquired adjudicated by the Reference Court. (Paras 12 to 15)

Judgment

Srikrishna, J.—The appellant whose land was acquired is aggrieved by the dismissal of his claim for increased compensation by the Division Bench of the High Court.

2. The appellant owned land measuring 137 Kanals and 19 marlas in Khasra No. 804 (77 Kanals and 7 marlas) and Khasra No. 805 (60 Kanals and 12 marlas) situated in Barshalla Tehsil, Doda (Jammu) in the State of Jammu & Kashmir. This land was acquired by a Notification under section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as ‘the Act’) issued by the State Government for the purpose of establishing a base camp of Sheep Breeding Farm, Thathri. The declaration under section 6 of the Act and a direction under section 7 of the Act were issued on 10.12.1976 and possession of the land was taken on 16.1.1977. The petitioner claimed compensation at the rate of Rs. 12,000/- per Kanal for the land and compensation for trees separately. The land acquisition collector made an award in respect of the land bearing Khasra Nos. 804 and 805 and fixed compensation for the land at the rate of Rs. 800 per Kanal for land in Khasra No. 804 and Rs. 250/- per Kanal for land in Khasra No. 805. He also awarded certain compensation for trees on the land. The petitioner accepted it under protest and sought a reference for increase in the compensation. On 27.4.1985 the petitioner made a written application before the land acquisition collector claiming that the market value of the land was not less than Rs. 12,000/- per Kanal. He also specifically claimed that there were 350 trees standing on that land and claimed increased compensation in respect of the said trees also.

3. Upon a reference under Section 18, the reference court after recording evidence came to the conclusion that the comparable instances of sale cited by the appellant were in respect of very small pieces of land while the acquired land was a big chunk measuring about 137 Kanals. Consequently, the reference court was of the view that the instances cited could not be taken as comparable instances of sale of land. The reference court assessed the market value at Rs. 800/- per Kanal in respect of land in Khasra No. 804 and increased the compensation only in respect of Khasra No. 805 from Rs. 250/- per Kanal to Rs. 720/- per Kanal. The reference court also directed 4% per annum interest to be paid.

4. Being aggrieved by the decision of the reference court, the petitioner moved an appeal under section 54 of the Act before the High Court. The learned single Judge enhanced the compensation for land in Khasra No. 804 of Rs. 1000/- per Kanal and the compensation for land in Khasra No. 805 to Rs. 900/- per Kanal. The single Judge also increased the rate of interest to 6% per annum instead of 4% as directed by the District Judge. The appellant still being dissatisfied moved a Letters Patent Appeal before the High Court claiming compensation @ Rs. 8000/- per Kanal in respect of land and Rs. 75000/- for trees. The appeal was dismissed by the High Court and thus the appellant is in appeal before this Court.

5. The learned counsel for the appellant urged that the High Court and the District Judge have completely ignored the evidence, and that their judgments were perverse and liable to be interfered with. He contended that after the year 1971 there was no sale of land in the area concerned because of the coming into operation of the Agrarian Reforms Act, 1976. Consequently, there were no instances of registered sale deeds, though sales unofficially took place during the said period. Some of such sale deeds were actually registered after 1981.

6. In respect of one such sale deed, it was claimed by witness Girdhari Lal that he had sold three marlas of land in the year 1975 at the rate of Rs. 500/- per marla, though the sale deed was registered in 1981 because of ban on sale of land in the interregnum. Another witness Tej Ram stated that he had also purchased land @ Rs. 500 per marla in the year 1975. Witness Om Prakash, Assi

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Judicial Analysis

SupremeToday

2004 Supreme(SC) 1569

Important pointGenerally instances of sale of small tracks of land cannot form acceptable basis for determining the market value of large tracks of land, unless suitable deductions are made in respect of the developmental charges.

Cases Referred (2)

Judicial Analysis

Important point
Generally instances of sale of small tracks of land cannot form acceptable basis for determining the market value of large tracks of land, unless suitable deductions are made in respect of the developmental charges.