2010 Supreme(SC) 189

2010 (2) Supreme 71
SUPREME COURT OF INDIA
G.S. Singhvi and Asok Kumar Ganguly, JJ.
Sagunthala (Dead) through Lrs. — Appellant(s)
versus
Special Tehsildar (L.A.) & Ors. — Respondent(s)
Civil Appeal No(s). 6240-6243 of 2001
With
Civil Appeal Nos. 6244-6248 of 2001 and
Civil Appeal No. 495-504 of 2002
Decided on : 24-02-2010

IMPORTANT POINTS
While determining the value of the property acquired one has to see whether the land has got the building potentiality to be used for the building purposes in the immediate or in near future.
2. It is settled that the burden of establishing/proving the market value of the lands is always on the claimants.

Headnote:Land Acquisition Act,1894-Acquisition of 196 acres of lands for the purpose of expansion of Tamil Nadu Magnesite Limited, a State owned company- Land Acquisition Officer fixed the market value at the rate of Rs.18,000/- per acre for irrigated dry land and Rs.15,000/- per acre for unirrigated dry land-On reference under Section 18 of Act Reference Court, treated the lands as potential house sites and fixed the market value at Rs.1,75,000/- per acre- High Court after taking into note existence of 2 housing colonies held that it could not be concluded that the vast extent of land acquired in the case would also become a housing colony on its own and was of the view that there was no sufficient material to establish that the lands in dispute could be converted into a housing site in near future- Market value was fixed at Rs.75,000/- per acre uniformly for all the lands involved in the acquisition-Appeal thereagainst - Held High Court, relied upon deposition of C.W. 1 who admitted that excepting the plots of land under acquisition, all other lands were agriculture lands,and ignoring other materials on record fell into an error in concluding that acquired lands were agriculture lands and erroneously reversed conclusions arrived by Reference Court- Evidence of RW1 to RW3 that even at the time of the notification under Section 4 (1) there were buildings including the terraced buildings on the land acquired and they were all abutting main road and were at a distance of 1 K.M. from residential colonies - in the light of said material facts held that the presence of number of buildings on the lands acquired and the said lands being occupied by the buildings were to be treated as house sites- The basic purpose that had been traced out in the evidence was that the lands were acquired for the purpose of putting up residential quarters-As a portion of the land was being considered as house site, the adjoining lands had the potential of being put in better use as house sites in the near future- The other important factor was the proximity of the plots to two residential colonies- High Court and the Land Acquisition Officer failed to take into consideration the advantages and facilities, which were available in the acquired land-Apart from that very purpose for which the land was being acquired was also a relevant factor- Reference Court rightly fixed the amount of compensation to be Rs. 1,75,000/- Impugned judgment of High Court set aside and order of Reference Court upheld –Appeals allowed. (Paras 13 to 16, 32, 35 to 42)

        Market Value-Determination of- The market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when let out in most advantageous manner excluding any advantage due to carrying out of the scheme for which the property is compulsorily acquired- In considering market value disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded- The guiding principle would be conduct of hypothetical willing vendor who would offer the land and that of a purchaser who, in normal human conduct, would be willing to buy as a prudent man in normal market conditions but not of an anxious purchaser dealing at arm’s length nor a fictitious sale brought about in quick succession or otherwise to inflate the market value- The determination of market value is the prediction of an economic event viz. a price outcome of hypothetical sale expressed in terms of probabilities-Market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when let out in its most advantageous manner- The question whether a land has potential value or not, is primarily one of facts depending upon its condition, situation, user to which it is put and whether it is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions- The existing amenities like water, electricity, possibility of their further extension, whether near about town is developing or has prospect of development have to be taken into consideration. (Paras 34, 35)

       Facts of the Case :

        196 acres of lands were acquired herein in the instant case for the purpose of expansion of Tamil Nadu Magnesite Limited, a State owned company. Land Acquisition Officer fixed the market value at the rate of Rs.18,000/- per acre for irrigated dry land and Rs.15,000/- per acre for unirrigated dry land.On reference under Section 18 of Act Reference Court, treated the lands as potential house sites and fixed the market value at Rs.1,75,000/- per acre. High Court after taking into note existence of 2 housing colonies held that it could not be concluded that the vast extent of land acquired in the case would also become a housing colony on its own and was of the view that there was no sufficient material to establish that the lands in dispute could be converted into a housing site in near future. Market value was fixed at Rs.75,000/- per acre uniformly for all the lands involved in the acquisition.

        2. Present Appeals have been preferred on plea that acquired lands were potential house sites and that High Court was not justified in ignoring the documentary evidence in that regard.

       Findings of the Court :

        Held High Court, relied upon deposition of C.W. 1 who admitted that excepting the plots of land under acquisition, all other lands were agriculture lands,and ignoring other materials on record fell into an error in concluding that acquired lands were agriculture lands and erroneously reversed conclusions arrived by Reference Court.Evidence of RW1 toRW3 that even at the time of the notification under Section 4 (1) there were buildings including the terraced buildings on the land acquired and they were all abutting main road and were at a distance of 1 K.M. from residential colonies .In the light of said material facts held that the presence of number of buildings on the lands acquired and the said lands being occupied by the buildings were to be treated as house sites. The basic purpose that had been traced out in the evidence was that the lands were acquired for the purpose of putting up residential quarters.As a portion of the land was being considered as house site, the adjoining lands had the potential of being put in better use as house sites in the near future. The other important factor was the proximity of the plots to two residential colonies- High Court and the Land Acquisition Officer failed to take into consideration the advantages and facilities, which were available in the acquired land. Apart from that very purpose for which the land was being acquired was also a relevant factor. Reference Court rightly fixed the amount of compensation to be Rs. 1,75,000/- Impugned judgment of High Court was set aside and order of Reference Court was upheld .Appeals were allowed.

       Result : Appeals allowed