IMPORTANT POINTS
1. The purpose for which the land is acquired must also be taken into consideration in fixing the market value and the deduction of development charges.
2. Where lands are acquired for specific purposes deduction by way of development charges is permissible.

Headnote:Land Acquisition Act, 1894—Sections 22, 23, 24 & 18—Compensation claim—Purpose for which the land is acquired must also be taken into consideration in fixing the market value and deduction of development charges—Acquisition of land for construction of new BG line for the Konkan Railways—Notification u/s 4 of the Act was published on 5th and 6th August, 1994—Special Land Acquisition Officer granting compensation to land owners @ Rs. 4/- per sq. metre and Rs. 59,192/- for trees standing on the said land—On Reference, District Judge passed an award increasing rate of compensation from Rs. 4/- per sq. metre to Rs. 192/- per sq. metre, not granting any compensation for trees standing on the said land—In appeals filed by both the parties, High Court rejecting the report of valuer, reduced rate of compensation from Rs. 192/- per sq. metre to Rs. 38/- per sq. metre —High Court held that prices fetched from small plots cannot be applied to the lands covering large area and that considering location of the acquired land vis-a-vis its nature and the plot of sale deeds, a deduction of at least 85% ought to have been made—Whether High Court was justified in reducing the rate of compensation from Rs. 192/- to Rs. 38/- per sq.m.—(No)—Claim of compensation should reasonably be fixed @ Rs. 250/- per sq. mtr. with deduction of 20%—Award of compensation for trees fixed at Rs. 59,192/-.
       Held : The High Court has adopted a rough and ready method for making deductions which is impermissible in law. We have already noticed the valuers report. No reason whatsoever was given by the Reference Court or by the High Court as to why the report of the valuer and her evidence cannot be relied on. In our opinion, the compensation awarded by the High Court had no basis whatsoever and was not supported by cogent reasons and that it did not consider the future prospect of the development of the land in question. The High Court also did not assess the injury that the appellant is likely to sustain due to loss of his future earnings from the said land and also did not assess the damage already suffered due to diminution of the profits of the land between the time of publication of the notice and time of the collector taking possession. The Division Bench of the High Court has miserably erred in passing the order impugned thereby reducing the rate of compensation from Rs. 192/- to Rs. 38/- and in utter mis-reading of the evidence on record and acted in a flagrant error of law and facts. In our view, the orders passed by the Division Bench resulted in manifest injustice being caused to the appellants. The High Court also erred in passing the order by holding that the opinion of the government approved valuer was not based on any opinion method of valuation but solely on the basis of facilities available to the land. In our view, the High Court ought to have appreciated that the government approved valuer is an expert in her field and the opinion of such an expert ought not to have been rejected shabbily.(Para 27)
       Both the Special Land Acquisition Officer, the District Judge and of the High Court have failed to notice that the purpose of acquisition is for Railways and that the purpose is a relevant factor to be taken into consideration for fixing the compensation. This Court held that the purpose for which the land is acquired must also be taken into consideration in fixing the market value and the deduction of development charges.(Para 28)
       We are not, however, oblivious of the fact that normally 1/3 deduction of further amount of compensation has been directed in some cases. However, the purpose for which the land acquired must also be taken into consideration. In the instant case, the land was acquired for the construction of new BG line for the Konkan Railways. Where lands are acquired for specific purposes deduction by way of development charges is permissible. In the instant case, acquisition is for laying a railway line. Therefore, the question of development thereof would not arise. Therefore, the order passed by the High Court is liable to be set aside and in view of the availability of basic civic amenities such as school, bank, police station, water supply, electricity, high way, transport, post, petrol pump, industry, telecommunication and other businesses, the claim of compensation should reasonably be fixed @ Rs. 250/- per sq. mtr. with the deduction of 20%. The appellant shall be entitled to all other statutory benefits such as solatium, interest etc. etc. The appellants also will be entitled to compensation for the trees standing on the said land in a sum of Rs. 59,192 as fixed. (Para 29)

JUDGMENT

Dr. AR. Lakshmanan, J.—

CIVIL APPEAL NO. 1136 OF 2007

(Arising Out of SLP (C) NOS. 16533-16534 OF 2005)

Leave granted.

2. The above appeal was filed against the final judgment and order dated 01.03.2005 passed by the Division Bench of the Bombay High Court at Goa in First Appeal Nos. 66 of 2002 and 75 of 2002 arising out of Land Acquisition Case No. 58 of 1996 wherein the Division Bench rejected the claim of compensation of the appellants for acquisition of the land belonging to them of Rs. 750/- per sq. metre and reduced the rate of compensation from Rs.192/- per sq. metre as awarded by the District Judge to Rs.38/- per sq. metre after re-appraising the evidence and substituting their own finding of facts in place of the findings of the District Judge.

3. In the above case, notification under Section 4 of the Land Acquisition Act, 1894 (hereinafter called the ‘Act’ for short) was published by the Special Land Acquisition Officer South Goa for acquisition of land for construction of new BG line for the Konkan Railways. The notification was published in the local dailies on 5th and 6th August, 1994. Under Section 6 of the Act a declaration stating the government’s intention to acquire the land for the purpose of construction of new broad gauge line of the Konkan Railways between Roha and Mangalore was made on 09.11.1994. An award was passed by the Special Land Acquisition Officer granting compensation to the appellant @ Rs.4/- per sq. metre and Rs.59,192/- for trees standing on the said land. The appellant on 06.12.1996 made an application before the Land Acquisition Officer to refer the matter for determination of compensation under Section 18 of the Act and claimed a sum of Rs.89,06,250/- for the acquired land and Rs.71,000/- for the trees standing thereon. Reference under Section 18 was made by the Special Land Acquisition Officer to District and Sessions Judge on 28.02.1996 and reference under Section 19 of the Act was made by the Special Land Acquisition Officer, Margao. Evidence was adduced by the appellant - Mr. Nelson Fernandes before the Addl. District Judge. Two sale deeds dated 13.12.1993 are annexed and marked as Annexure-P5. Evidence was adduced by Government Approved Valuer - Pratima Kumar on the valuation report submitted by her before the Addl. District Judge, Margao on 15.12.2000. Evidence was adduced by Bartoleuma Gama on the sale of land by him @ Rs. 449/- per sq. metre by sale deed being Ex.AW1/B was annexed and marked as Annexure-P7.

4. The Addl. District Judge passed an award increasing the rate of compensation from Rs. 4/- per sq. metre to Rs.192/- per sq. metre, but did not give any compensation for the trees standing on the said land. First Appeal Nos. 66 and 75 of 2002 were preferred by both the appellants and the respondents before the High Court against the judgment and award dated 29.08.2001 of the learned District Judge.

5. First Appeal Nos. 66 of 2002 and 75 of 2002 were disposed of by the Division Bench of the High Court by rejecting the appeal of the appellants and allowing the appeal of the respondents. The Division Bench rejected the report of the valuer and the findings of the District Judge and reduced the rate of compensation from Rs. 192/- per sq. metre as awarded by the District Judge to Rs. 38/- per sq. metre. Hence the above appeal.

CIVIL APPEAL NO. 1137 OF 2007

(Arising Out of SLP (C) NOS. 16503-16504 OF 2005)

6. Leave granted.

The above appeal was filed against the final judgment and order dated 09.03.2005 passed by the Division Bench of the Bombay High Court at Goa in First Appeal Nos. 63 and 67 of 2002 arising out of Land Acquisition Case No. 391 of 1995 wherein the Division Bench rejected the claim of compensation of the appellants for acquisition of the land belonging to them of Rs.470/- per sq. metre and reduced the rate of compensation from Rs.108/- per sq. metre as awarded by the District Judge to Rs.27/- per sq. metre after re-appraising the evidence and substituting t

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2007 Supreme(SC) 297

IMPORTANT POINTS1. The purpose for which the land is acquired must also be taken into consideration in fixing the market value and the deduction of development charges.2. Where lands are acquired for specific purposes deduction by way of development charges is permissible.

Cases Referred (6)

IMPORTANT POINTS
1. The purpose for which the land is acquired must also be taken into consideration in fixing the market value and the deduction of development charges.
2. Where lands are acquired for specific purposes deduction by way of development charges is permissible.