1. Land acquisition for public purpose under the Kerala Land Acquisition Act, 1950 — Dispute over the determination of just compensation for acquired land. (Para 1 )
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1996 Supreme(SC) 1472
SUPREME COURT OF INDIA
K. Ramaswamy and G.B. Pattanaik, lJ.
Civil Appeals Nos. 4123 with 4124 of 1991 and 11812 of 1995
Decided On: 17.09.1996
Gheevarghese Mathew etc. Appellants
versus
State of Kerala and another etc. Respondent
The Court held that determining just compensation for land acquisition requires a holistic assessment of all evidence and application of settled legal principles to find the reasonable market value. The High Court may modify a reference court's award based on this assessment without necessarily finding the previous award perverse.
Headnote:
Kerala Land Acquisition Act, 1950 - Section 3(1) - Land Acquisition Act, 1894 - Section 4(1) – Notification – Acquisition of Land – Land Acquired for public purpose – Determination of compensation - Civil Court enhanced compensation by its award and decree - On further appeal by State, High Court reduced compensation - Thus, these appeals by special leave - Counsel for appellants, has contended that lands under Exs. A-6 to A-8, of an extent ranging between 60 cents and 40 cents had been sold on March 31, 1976, April 13, 1976 and April 21, 1976 respectively at the rate of Rs. 800/- percent. Exs. A-3 to A-5 would indicate steep rise in the value till the date of notification – Held, It was not necessary for High Court, before reversing the judgment of reference Court, to reach at a conclusion that the award and judgment of the reference Court was perverse or wholly unsustainable. It is mandatory duty of the Court to consider the entire evidence by applying the tests and principle of law as settled by this Court in assessing compensation and to find out as to what would be the reasonable market value which the lands are capable to command in open market - In estimate of High Court, reasonable compensation is Rs. 1000/- per cent which are three times more than that was offered by claimants themselves - Appeals dismissed.
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Table of Contents
2. Appellants claim higher compensation based on comparable sales and location — Respondent relies on claimants' prior offer to sell at a lower rate. (Para 2 )
3. Comparable sales between related parties or for specific utility are not automatic benchmarks — Prior offers by claimants to sell at lower rates are relevant. (Para 3 , 4 )
4. Courts must apply settled legal tests to determine reasonable market value based on entire evidence, regardless of whether the lower court's finding was perverse. (Para 4 )
5. Appeals dismissed. (Para 5 )
6. How are comparable sales treated when determining land compensation?
Sales of contiguous land between related parties or institutions for specific utilization purposes cannot be automatically treated as comparable sales for determining the market value of acquired land. (Para 3 )
7. Does a court need to find a lower court's award perverse to modify the compensation amount?
No, it is the mandatory duty of the court to consider the entire evidence and apply settled legal tests and principles to determine the reasonable market value in the open market. (Para 4 )
8. What is the evidentiary value of a prior offer to sell the land by the claimants?
A prior offer by the claimants to sell the property at a specific rate can serve as an admission regarding the land's value, impacting claims for further enhancement of compensation. (Para 4 )
JUDGMENT
1. Notification under Section 3(1) of the Kerala Land Acquisition Act, 1950 which is equivalent to Section 4(1) of the Land Acquisition Act, 1894(1 of 1894) was published on July 8, 1980 acquiring an extent of3.37 hectares of land for public purpose, namely, Greater Cochin Development Authority, for the purpose of the Site and Service Scheme at Alwaye. The Land Acquisition Officer in his award dated March 19, 1982 determined compensation at Rs. 280 per cent as against Rs.2000/- per cent claimed by the appellants. On reference, the Civil Court enhanced the compensation to Rs. 1800/- per cent by its award and decree dated August 7,1984. On further appeal by the State, the High Court reduced the compensation to Rs. 1000/-kper cent. Thus, these appeals by special leave.
2. Shri T. L. V. Iyer, learned senior counsel for the appellants, has contended that the lands under Exs. A-6 to A-8, of an extent ranging between 60 cents and 40 cents had been sold on March 31, 1976, April 13, 1976 and April 21, 1976 respectively at the rate of Rs. 800/- percent. Exs. A-3 to A-5 would indicate steep rise in the value till the date of the notification. That was spoken of even by RW-2, the Executive Officer of the Panchayat. The acquired lands are abutting the two roads on either side. The developed area is situated near the acquired lands. These facts had been duly taken note of by the reference Court in determining reference under Section 18. The High Court had not adverted to these relevant facts but considered Exs. A-6 to A-8 and held that the compensation at Rs. 1000/- would be the just compensation. Unless the findings of the reference Court were found to be perverse, the High Court would not have interfered with the award of the reference Court. Shri G. Viswanatha Iyer, learned senior counsel for the respondent, placed reliance on a document, a letter addressed by the claimants themselves wherein they have agreed as on October 15,1979 to sell the property to GCDA @Rs. 350/- per cent. In view of this circumstance, it does not warrant more compensation than that has been awarded by the High Court.
3. Having regard to the respective contentions, the question that arises for consideration is: what would be the reason able compensation which the acquired lands are capable to secure? It is seen that EXS. A-3 to A-5 offer no comparable value. As stated by Shri Viswanatha Iyer, that they offer only an evidence of rise in the price. It is seen that ands under Exs. A-6 to A-8 also were purchased by common institution from the persons, brothers and sisters, which happened to be contiguous to their institution for better utilisation. Under those circumstances, they cannot be automatically offered as comparable sales for the lands in question. Admittedly, the lands are situated outside Always, Municipal limits as on the date of notification. The High Court having considered the totality of the facts and circumstances reduced the compensation to Rs. 1000/- per cent as against Rs. 2000/ - per cent as claimed by the appellants. It is more than 4-1/2 times than what was granted by the Land Acquisition Officer. The State did not file any appeal.
4. It is seen from the letter addressed by the appellants themselves on October 15, 1979, i.e. 10 months prior to the date of the notification, that they had assessed the compensation at Rs. 350/per cent and offered to sell it at that rate. But for the fact that no agreement as contemplated under sub-section (2) of Section I I has been executed, this admission stares at their face to claim any further enhancement in the compensation. It was not necessary for the High Court, before reversing the judgment of the reference Court, to reach at a conclusion that the award and judgment of the reference Court was perverse or wholly unsustainable. It is the mandatory duty of the Court to consider the entire evidence by applying the tests and principle of law as settled by this Court in assessing the compensation and t
