1. Land acquisition under the Land Acquisition Act — dispute over determination of market value of acquired land — reference filed under Section 18. (Para 1 , 2 , 3 )
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2000 Supreme(SC) 311
SUPREME COURT OF INDIA
B.N.Kirpal : M.B.Shah
Union Of India
Versus
Mangat
Case No. : 5494 of 1997
Date of Decision : 2/8/00
Market value of acquired land is determined by averaging the per-acre rates of comparable sale transactions and applying a reduction based on the specific facts and circumstances of the case.
Headnote:(A) Land Acquisition Act - Sections 4, 6 and 18 - Determination of market value of acquired land - The land acquisition officer fixed the value based on land quality categories, but the reference court disregarded this, considering the land's potential for future development due to its proximity to a national highway and urban amenities. (Para 3)
(B) Determination of Market Value - Formula for calculation - The methodology for determining market value involves identifying relevant and comparable sale transactions, converting the sale consideration of each deed to a per-acre rate, calculating the average of these rates, and then applying a reduction based on the specific facts and circumstances of the case. (Para 7)
(C) Maintainability of Appeal - A contention regarding the maintainability of a letters patent appeal will not be entertained if such a contention was not raised before the division bench. (Para 6)
Facts of the case:
Land was notified for acquisition for the purpose of setting up a security camp. The land acquisition officer fixed the value based on land quality categories. On reference, the reference court disregarded these categories, noting the land's potential for development due to its location near a national highway and urban amenities, and determined the market value based on an average of sale deeds. This value was subsequently enhanced by the single judge and upheld by the division bench.
Findings of Court:
The court held that the maintainability of the letters patent appeal could not be challenged as it was not raised before the division bench. It further detailed the formula for determining market value, which relies on averaging comparable sale deeds converted to a per-acre basis and applying a situational cut.
Issues: The main issues were the maintainability of the letters patent appeal and the appropriate methodology for determining the market value of the acquired land.
Ratio Decidendi: The court recognized a formula where the market value is derived by averaging the per-acre rates of comparable sale transactions and applying a reduction based on the specific facts and circumstances of the case.
Result: Not specified in the provided text.
Legal Category Hierarchy
Table of Contents
2. Maintainability of Letters Patent Appeal — validity of the mathematical formula used to determine the average market value of acquired land. (Para 6 , 7 )
3. Maintainability of appeal cannot be raised if not contested before the lower court — evaluation of the formula for calculating average market value from comparable sale deeds. (Para 6 , 7 )
4. A plea regarding the maintainability of an appeal is not entertainable if it was not raised before the court that passed the impugned judgment. (Para 6 )
5. The court declined to entertain the challenge to the maintainability of the Letters Patent Appeal and proceeded to analyze the market value determination formula. (Para 6 , 7 )
6. Can a party challenge the maintainability of an appeal in a higher court if the issue was not raised in the lower court?
No, if the parties filed appeals and no contention regarding maintainability was raised before the lower court, the higher court may refuse to permit the party to raise that contention. (Para 6 )
7. What is the formula for determining the market value of acquired land based on sale deeds?
The court identifies relevant comparable sale transactions, converts the area of each deed into one acre to find the price per acre, calculates the average of these prices, and then applies a cut based on the specific facts and circumstances of the case. (Para 7 )
(1) BY notification dated 22-3-1985, 1130 acres, 5 kanals and 4 marlas of land in Village Manesar, District Gurgaon was notified under Section 4 of the Land Acquisition Act for setting up National Security Guard Camp.
(2) AFTER the notification under Section 6 was issued claimants were invited and the Collector, vide his Award No. 4026 dated 3-6-1985 fixed the value of land as follows: "Chahi Rs 50,000 Magda Rs 45,000 Bhud Rs 40,000 Banjar Rs 35,000 Gair mumkin Rs 20,000" 610
(3) BEING dissatisfied, the landowners filed reference under Section 18 of the Land Acquisition Act. Reference was made to the Additional District Judge who came to the conclusion that the location of land was such that it had a lot of potentiality for future development. It was situated on National Highway 8. There were schools, banks, a bazaar, a powerhouse and a residential complex in the vicinity. A commercial establishment had also been set up since 1984 and even though it was not declared as an urban area it was fast growing into one since the last many years. On this basis the Additional District Judge disregarded the quality of land, which the Collector had divided into five categories, and taking an average of the price as determined by the sale deeds which had been produced, he arrived at a market value of the land at a figure of Rs 59,290 per acre.
(4) BOTH the Union of India as well as the claimants filed appeals before the learned Single Judge. The High Court enhanced the compensation to Rs 61,400 per acre.
(5) LETTERS patent appeal was filed by the claimants as well as the Union of India but the Division Bench, by the impugned judgment upheld the determination of the market value of Rs 61,400 per acre arrived at by the learned Single Judge. Hence these appeals by special leave.
(6) IT is contended by learned counsel for the respondents that the LPA was not maintainable and, therefore, these appeals should also not be entertained. We do not propose to go into this question for the simple reason that the claimants as well as the Union of India had filed LPAs, no contention had been raised before the Division Bench that the LPA was not maintainable. We, therefore, do not permit the respondents to raise this contention.
(7) AS far as the merits are concerned the learned Single Judge of the High Court has worked out a formula on the basis of which the price has been determined at Rs 61,400 per acre. This formula in the words of the High Court is as follows:
"THE only formula which this Court has been able to conceive and work out is that court in order to determine the market value of the acquired land should in the first instance find out as to which sale transactions are relevant and comparable vis-a-vis the acquired land and thereafter the area sold in a particular sale deed should be converted into one acre. The sale consideration mentioned in the sale deed, the area of which has been converted into one acre, should be mathematically converted for bringing out the price of the land of one acre. In this manner the price of such sale deed is to be taken out. After totalling up the sale consideration of all the comparable sale deeds the same should then be divided by the number of the sale deeds. The figure after such division would be the average price of the land at the rate of per acre. Thereafter the court is obliged to apply a cut in accordance with the facts and circumstances of a particular case. This is the only principle which seems to have been followed in the past while assessing the compensation."
