IMPORTANT POINT
Potentiality of the acquired land, in so far as it relates to the use to which it is reasonably capable of being put in the immediate or near future, must be given due consideration.

Headnote:Land Acquisition Act,1894-Appeal against judgment and order passed by High Court whereby it reversed order passed by Reference Court by reducing the amount of compensation granted by the Reference Court to the appellant from Rs. 17/- per sq. feet to Rs. 9/- per sq.feet-Held potentiality of the acquired land, in so far as it relates to the use to which it is reasonably capable of being put in the immediate or near future, must be given due consideration- On an overall consideration and appreciation of the records, held that deduction due to small size of the exemplar land could easily be set off with corresponding increase in price of the acquired land when compared with the land in Ex. A3 from the point of view of potential value- Although it was true that land covered by Ex. A3 was a small tract of land and therefore could not be compared in size with large area of land acquired under the present notification, it was to be concluded that land in question would definitely fetch a higher price than what was fixed by High Court- A prospective purchaser would only be too willing to pay for the acquired land having immediate potentiality of being used as a residential site in a prime locale at almost the same, if not, higher price than land covered by Ex. A3 which was located outside the Municipality area-Even though conclusion of High Court that acquisition of a large tract of land merits a discount in compensation held justified - However, in the present circumstance, it was significant to note that the compensation granted by High Court did not match potentiality of the land, even after discount had been taken into consideration- Even on giving a discount in respect of the acquired land being a large tract as compared to the small portion of land sold under Ex. A3, a , the rate of Rs. 11/- held to be adequate and just compensation for the same- By scaling down the rate of compensation to Rs. 9/- from Rs. 17/- per sq. ft., High Court denied just and reasonable compensation to appellant, thereby resulting in a miscarriage of justice-Appellant held entitled to compensation at Rs. 11/- per sq. ft. for the acquired land -Appeal allowed to said extent (Paras 22 to 26)
       Facts of the Case :
        Present Appeal has been filed against judgment and order passed by High Court whereby it reversed order passed by Reference Court byreducing the amount of compensation granted by the Reference Court to the appellant from Rs. 17/- per sq. feet to Rs. 9/- per sq.Feet.
       Findings of the Court :
        The present acquired land had all the potentiality to be used as building sites, even in the immediate future, as it was located at a place in and around which building activity had already started.The evidence on record also clearly indicated that acquired land was abutting the main road- The acquired land was also surrounded by schools, Panchayat union office, shops and residential building in all three sides.High Court also found, as a matter of fact,that the area where acquired land was situated was fit for construction of houses. On an overall consideration and appreciation of the records, held that deduction due to small size of the exemplar land could easily be set off with corresponding increase in price of the acquired land when compared with the land in Ex. A3 from the point of view of potential value. Although it was true that land covered by Ex. A3 was a small tract of land and therefore could not be compared in size with large area of land acquired under the present notification, it was to be concluded that land in question would definitely fetch a higher price than what was fixed by High Court. A prospective purchaser would only be too willing to pay for the acquired land having immediate potentiality of being used as a residential site in a prime locale at almost the same, if not, higher price than land covered by Ex. A3 which was located outside the Municipality area.Even though conclusion of High Court that acquisition of a large tract of land merits a discount in compensation held justified . However, in the present circumstance, it was significant to note that the compensation granted by High Court did not match potentiality of the land, even after discount had been taken into consideration- Even on giving a discount in respect of the acquired land being a large tract as compared to the small portion of land sold under Ex. A3, a , the rate of Rs. 11/- held to be adequate and just compensation for the same. By scaling down the rate of compensation to Rs. 9/- from Rs. 17/- per sq. ft., High Court Denied just and reasonable compensation to appellant, thereby resulting in a miscarriage of justice.Appellant held entitled to compensation at Rs. 11/- per sq. ft. for the acquired land .Appeal allowed to said extent.
       Result : Appeal allowed.

JUDGMENT

Dr. Mukundakam Sharma, J. —

1. This appeal is directed against the judgment and order dated 27.11.2002 passed by the Madras High Court whereby the High Court reversed the order passed by the Reference Court by reducing the amount of compensation granted by the Reference Court to the appellant from Rs. 17/- per sq. feet to Rs. 9/- per sq. feet.

2. Before we deal with the contentions raised before us, brief facts leading to the filing of the present appeal are required to be stated. For providing house sites at Adi Dravidas, land measuring an extent of 3.90 acres comprised in Survey No. 118/A in Palangudi Village was acquired by the Government of Tamil Nadu by issuing a notification under Section 4(1) of the Land Acquisition Act which was published on 23.9.1992. The Land Acquisition Officer awarded a sum of Rs. 1.72 per sq. ft. for the acquired land. At the instance of the aggrieved land owner, i.e. the appellant, reference was made under Section 18 of the Land Acquisition Act before the Additional Sub Court, Trichy.

3. Before the Reference Court, the appellant adduced documentary evidence in the form of Sale Deeds Exs. A1 to A4 and examined two witnesses. The Revenue also produced documents exhibited as Exs. B1 and B2, but no witness was examined from the side of the Revenue. The Reference Court after consideration and appreciation of the evidence adduced fixed the market value of the acquired land at Rs. 17/- per sq. feet.

4. Being aggrieved by the said order, the State preferred an appeal before the High Court. The question for consideration before the High Court was whether the amount of compensation for the acquired land fixed by the Reference Court i.e. Rs. 17/- per sq. feet is correct or not and whether the appeal filed by the State for reducing the amount of compensation be allowed.

5. The High Court after consideration of the records came to the conclusion that the amount of compensation i.e. Rs. 17/- per sq. feet is on the higher side, and that the appropriate amount of compensation would be Rs. 9/- per sq. feet and accordingly reversed the order passed by the Reference Court with the aforesaid modification of the rate of compensation fixing the same at Rs. 9/- per sq. ft.

6. The appellant, original owner of the land, has filed this appeal praying for setting aside the order passed by the High Court and has prayed for enhancement of the amount of compensation taking into consideration the potential value of the land.

7. The learned counsel appearing for the appellant contended that the High Court took notice of the market value of the acquired land only with reference to the actual use. According to the appellant, the Court failed to take notice of its value with reference to the better use to which it is reasonably capable of being put to in the immediate or near future and thereby failed to take into consideration future potentiality of the land and instead based itself only on the realized possibility and thus committed an error.

8. The learned counsel appearing for the respondent, on the other hand, contended that the amount of compensation granted by the High Court is appropriate, and does not deserve to be interfered with.

9. The Reference Court granted compensation at Rs. 17/- per sq. feet after holding that the acquired land is a potential house site being located in a very important locality and that the amount of compensation granted by the Land Acquisition Officer, i.e., 1.72 per sq. ft. was totally an unjust and inadequate amount.

10. The High Court, on the other hand, fixed the market value of the acquired land at Rs. 9/- per sq. ft. by setting aside the order passed by the Reference Court. The High Court while coming to the aforesaid conclusion held that Ex. A3 is a comparable sale transaction. Under Ex. A3, 1710 sq. ft. land was sold for Rs. 20,000/- which would work out to Rs. 11/- per sq. ft. Nonetheless, the High Court also pointed out the fact that the acquired land has got higher potenti

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2010 Supreme(SC) 716

2010 (7) Supreme 263SUPREME COURT OF INDIADr. Mukundakam Sharma and Anil R. Dave, JJ. A. Natesam Pillai — AppellantversusSpl. Tahsildar, Land Acquisition, Tiruchy — RespondentCivil Appeal No. 36 of 2004Decided on : 11-8-2010

IMPORTANT POINT Potentiality of the acquired land, in so far as it relates to the use to which it is reasonably capable of being put in the immediate or near future, must be given due consideration.

Cases Referred (4)

2010 (7) Supreme 263
SUPREME COURT OF INDIA
Dr. Mukundakam Sharma and Anil R. Dave, JJ.
A. Natesam Pillai — Appellant
versus
Spl. Tahsildar, Land Acquisition, Tiruchy — Respondent
Civil Appeal No. 36 of 2004
Decided on : 11-8-2010

IMPORTANT POINT
Potentiality of the acquired land, in so far as it relates to the use to which it is reasonably capable of being put in the immediate or near future, must be given due consideration.