Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2011 Supreme(SC) 715

IN THE SUPREME COURT OF INDIA
G.S. Singhvi and H.L. Dattu, JJ.
Appellants: Valliyammal and Anr. etc. etc.
Vs.
Respondent: Special Tahsildar (Land Acquisition) and Anr. etc. etc.
Civil Appeal Nos. 6127-6128 of 2011 (Arising out of Special Leave Petition (Civil) Nos. 22086-22087 of 2009), Civil Appeal Nos. 6132-6133 of 2011 (Arising out of SLP (C) Nos. 25581-25582 of 2009), Civil Appeal No. 6134 of 2011 (Arising out of SLP (C) Nos. 25591 of 2009), Civil Appeal Nos. 6135-6138 of 2011 (Arising out of SLP (C) Nos. 25587-25590 of 2009), Civil Appeal Nos. 6139-6140 of 2011 (Arising out of SLP (C) Nos. 25596-25597 of 2009), Civil Appeal Nos. 6141-6146 of 2011 (Arising out of SLP (C) Nos. 33777-33782 of 2009), Civil Appeal No. 6147 of 2011 (Arising out of SLP (C) No. 33808 of 2009), Civil Appeal Nos. 6148-6154 of 2011 (Arising out of SLP (C) Nos. 2194-2200 of 2010), Civil Appeal No. 6155 of 2011 (Arising out of SLP (C) No. 12581 of 2010), Civil Appeal No. 6156 of 2011 (Arising out of SLP (C) No. 22831 of 2010), Civil Appeal No. 6157 of 2011 (Arising out of SLP (C) No. 23654 of 2010), Civil Appeal No. 6158 of 2011 (Arising out of SLP (C) No. 23655 of 2010), Civil Appeal No. 6159 of 2011 (Arising out of SLP (C) No. 23656 of 2010), Civil Appeal No. 6160 of 2011 (Arising out of SLP (C) No. 23657 of 2010), Civil Appeal No. 6161 of 2011 (Arising out of SLP (C) No. 23658 of 2010), Civil Appeal No. 6162 of 2011 (Arising out of SLP (C) No. 23659 of 2010), Civil Appeal No. 6163 of 2011 (Arising out of SLP (C) No. 23666 of 2010), Civil Appeal No. 6164 of 2011 (Arising out of SLP (C) No. 23669 of 2010), Civil Appeal No. 6165 of 2011 (Arising out of SLP (C) No. 23641 of 2010), Civil Appeal No. 6166 of 2011 (Arising out of SLP (C) No. 23643 of 2010), Civil Appeal No. 6170 of 2011 (Arising out of SLP (C) No. 1147 of 2011), Civil Appeal No. 6168 of 2011 (Arising out of SLP (C) No. 1961 of 2011), Civil Appeal No. 6169 of 2011 (Arising out of SLP (C) No. 2187 of 2011), Civil Appeal No. 6171 of 2011 (Arising out of SLP (C) No. 3520 of 2011) and Civil Appeal No. 6167 of 2011 (Arising out of SLP (C) No. 26825 of 2011)
Decided On: 01.08.2011

Advocates Appeared:
For Appellant/Petitioner/Plaintiff: V. Giri, Sr. Adv., S. Ravi Shankar, V.P. Sengottuvel, Mohammed Sadiquec T.A., M.A. Chinnasamy, K. Krishna Kumar, Preetam Shah and P. Soma Sundaram, Advs.
For Respondents/Defendant: Gurukrishna Kumar, AAG, Anesh Paul, Prasannan, Subramonium Prasad and R. Nedumaran, Advs.

IMPORTANT POINT
Factors to be considered for determining market value, compensation and deductions discussed.

Headnote:(a) Land Acquisition Act, 1894 – Section 23 – Compensation – Market value – Factors to be considered – Sale deeds, size of plot, stage of development etc. (Para 15)
       (2005) 4 SCC 789; (2008) 2 SCC 568; (2001) 7 SCC 650 – Relied upon
       (b) Land Acquisition Act, 1894 – Section 23 – Compensation – Deductions for development etc – 1/3rd of market value – Can vary between 20 and 75 per cent of the price of developed plots. (Para 17, 18, 19)
       (2003) 1 SCC 354; (2003) 10 SCC 525; (2003) 12 SCC 642; (2004) 2 SCC 184; (2004) 10 SCC 745; (2009) 15 SCC 769; (2010) 12 SCC 707; (2010) 1 SCC 444 – Relied upon
       (c) Land Acquisition Act, 1984 – Section 23 – Compensation – High Court allowing 40% deduction toward development cost – Ignoring its own finding of land being situated in vicinity of developed residential colonies – Ought to be limited to 1/3, at the best – Secondly, not taking cost escalation into consideration while determining market value – Instantly land semi-urban having huge potential for development as housing sites – 10% per annum escalation should have been added – High Court relying on sale deed of 1990 but not adding cost escalation – Not proper – Directions issued. (Para 21 to 27)
       (1992) 4 SCC 659; (2005) 9 SCC 594; (2004) 2 SCC 283; (2008) 17 SCC 133; (2009) 4 SCC 395; (2008) 14 SCC 745 – Relied upon
       (1996) 8 SCC 577; (2009) 4 SCC 719 – Referred
       Facts of the case:
       The petitioners in these cases are aggrieved by orders of the different Division Benches of the High Court reducing the compensation granted by LA officers/Reference courts.
       Finding of the Court:
       High Court erred on many counts.
       Result:
       Appeals allowed.

JUDGMENT

G.S. Singhvi, J.

1. Delay in filing Special Leave Petition (Civil) Nos. 33777-33782/2009, 22831/2010, 23641/2010, 23643/2010 and 1961/2011 is condoned.

2. Leave granted.

3. These appeals filed against the judgments/orders passed by different Division Benches of the Madras High Court substantially reducing the amount of compensation determined by Additional District Judge, Erode and Principal Subordinate Judge, Erode (hereinafter referred to as, "the Reference Court") are illustrative of the plight of the owners of small parcels of land, who are deprived of the only source of livelihood and who have to spend substantial amount in litigation and wait for years together to get just and reasonable compensation in lieu of the compulsory acquisition of their land by the State.

4. For the sake of convenience, we shall first advert to the factual matrix of the appeals arising out of SLP (C) Nos. 25581-82 of 2009 Jaganatha Gounder v. Special Tahsildar (Land Acquisition), Erode and another because learned Counsel for the parties made submissions keeping in view the factual matrix of those cases.

5. In exercise of the powers vested in it under Section 4(1) of the Land Acquisition Act, 1894 (for short, "the Act"), the Government of Tamil Nadu issued notification dated 17.1.1997 for the acquisition of 55.89 acres land comprised in different survey numbers of village Erode for construction of houses by the Tamil Nadu Housing Board (for short, "the Board").

6. By an award dated 3.3.2000, the Land Acquisition Officer fixed market value of the acquired land at the rate of Rs. 50,000/- per acre. This did not satisfy the Appellants who filed applications under Section 18(1) of the Act and claimed compensation at the rate of Rs. 50/- per square yard by asserting that the acquired land is situated near Erode-Perundurai and Sennimalai Road junction and residential colonies like Anna Nagar, Sri Nagar, Bharthi Nagar, Rail Nagar, Jeeva Nagar, Subramania Nagar, Kalaigner Karunanidhi Nagar, Arts College, Women's College, Kongu Higher Secondary School, St. Joseph Clinic, Hospitals etc. and was having potential for being used for housing and business purposes. Thereupon, the Collector made reference to the Court for the determination of the compensation payable to the Appellants. The Reference Court considered the pleadings of the parties and evidence produced by them and concluded that the Appellants are entitled to compensation at the rate of Rs. 28/- per square feet.

7. Both, the Appellants and the Respondents challenged the judgment of the Reference Court by filing appeals under Section 54 of the Act. They also filed applications under Order XLI, Rule 27 of the Code of Civil Procedure for permission to adduce additional evidence. The High Court allowed the applications and directed the Reference Court to give opportunity to the parties to adduce additional evidence and make fresh determination of the compensation payable to the Appellants and remit its findings along with the documents.

8. In compliance of the direction given by the High Court, the Reference Court considered the additional evidence produced by the parties and opined that the Appellants are entitled to compensation at the rate of Rs. 19.28 per square feet.

9. After receiving the report of the Reference Court, the High Court considered the evidence produced by the parties and held that valuation of the land, which was made basis by the Land Acquisition Officer for fixing market value cannot be relied upon because that land was situated far away from the acquired land. The High Court noted that there was a steady increase of property value in the area because of repeated acquisitions made on behalf of the Board, referred to the topo-sketch and sale deed Exhibit C.8 dated 8.2.1991 and observed:

...The said property is in a housing colony by name K.K. Nagar and the area is considered to be a developed area. Therefore we are of the opinion that the valuation as found mentioned in Ex. C.8 coul

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2011 Supreme(SC) 715

IMPORTANT POINTFactors to be considered for determining market value, compensation and deductions discussed.

Cases Referred (17)

IMPORTANT POINT
Factors to be considered for determining market value, compensation and deductions discussed.