Market value for land acquisition compensation can be determined by a recent sale price if no evidence exists to show that market conditions materially changed between the date of sale and the date of the government's acquisition declaration.

Lord Carson. -

This appeal relates to two references under the Land Acquisition Act as to the compensation which the Bombay Government should pay to the appellants for certain lands situated in the Island of Salsette near Bombay which they had acquired under the said Act. The appeal relates to two plots only. One was of about 15 acres and 6 gunthas in the village of Vadhawan, and the other of about 36 acres and 8 gunthas in the neighbouring village of Malad. Both the plots were in hills and were chiefly valuable for the building stone of good quality which underlies the surface. Appellant 3 who is substantially the only appellant, had then started quarrying in some of the hills and had purchased the Vadhwan land in question on 30th November 1919, for 7½ annas a square yard.

The Government's declaration under which both plots were acquired was published on 10th February 1921, and it is the market value of the land at that date to which the appellant is entitled. The Salsette Development Officer awarded compensation on the footing that the market value of the land was Rs. 500. But the Assistant Judge and the High Court before whom the question was subsequently considered on appeal have both disregarded this valuation.

The Assistant Judge of Thana, on 24th September 1923, decreed compensation to the appellants for all the land in question at 7½ annas a square yard, or Rs. 2262-8-0 an acre, being at the same rate as appellant 3 had acquired the Vadhwan land in question on 30th November 1919, as already stated.

He examined the facts as to the sale and purchase by the appellant of the said land and came to the conclusion that nothing was shown to have happened which materially affected the value of the land between that purchase and the date of the Government's declaration for acquisition, and therefore held that that sale was evidence of weight as to the market value of the two hills in question. On appeal, the High Court of Judicature at Bombay, by its judgment dated 17th December 1925, reduced the award to Rs. 1000 per acre. The learned Chief Justice who delivered the judgment of the Court, referring to the sale and purchase by the appellant in November 1919, said :

If that sale had taken place about February 1921, it would be good evidence that there was competition for such land so that it was worth the market 7½ annas a square yard. 'But,' he added, by February 1921, it is certain that such circumstances as had existed from the middle of 1919 until the end of 1920 had begun to lose their force, and it is doubtful whether any purchaser would have come forward to pay a high price for these lands on the chance of reaping a profit by opening quarries.

Sir George Lowndes, who appeared for the respondent, very fairly said he did not contest the proposition of the Chief Justice as to evidence of value, and the only question therefore that remains is to see whether there was proper evidence to support the statement of the Chief Justice that the circumstances existing from November 1919, until the end of 1920 had begun to lose their force by February 1921.

The learned Chief Justice does not himself refer to any evidence supporting his conclusion nor have their Lordships been referred to any such evidence. In fact such evidence as was given did not support the suggestion of any such change until the latter part of 1921. It is only necessary to refer to the respondent's own witness on the subject, Mr. E. M. G. Lodge (Land Manager, Development Director, etc.), who stated :

There was some activity in the building trade in Bombay and elsewhere in 1920 and the earlier part of 1921. In the latter part of 1921 slump took place.

In the absence of evidence their Lordships are unable to find any reason for differing from the conclusion arrived at by the Assistant Judge, and they are accordingly of opinion that this appeal should be allowed, that the two decrees of the High Court of Judicature at Bombay, dated 17th December 1925, should be set aside, and