1. Land acquisition for industrial township development — Dispute over determination of market value and compensation under the Land Acquisition Act, 1894. (Para 3 , 4 , 5 )
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2019 Supreme(SC) 35
SUPREME COURT OF INDIA
UDAY UMESH LALIT, DHANANJAYA Y. CHANDRACHUD, JJ.
Wazir & Ors. – Appellants
Vs.
State of Haryana - Respondent
Civil Appeal Nos. 264-270, 338, 333-335, 336-337, 272-332, 339, 271, 340-341 & 342 of 2019 (Arising out of Special Leave Petition (Civil) Nos. 19284-19290, 27342, 26603-26605, 26607-26608, 26527-26587, 27343, 26457, 28210-28211 & 28985 of 2018) With Civil Appeal Nos. 593-617 & 343-592 of 2019 (Arising out of Special Leave Petition (Civil) Nos. 33586-33610 & 33168-33417 of 2018) (D. Nos. 41362 & 42687 of 2018)
Decided On : 11-01-2019
Important Points
IMPORTANT POINT
While assessing value of the land under acquisition factors like size of plot, year of exemplar sale deeds, cost escalation etc. have to be considered.
While assessing value of the land under acquisition factors like size of plot, year of exemplar sale deeds, cost escalation etc. have to be considered.
Subject
Civil Law - Land Acquisition
Act Referred
Headnote
Land Acquisition Act, 1894 – Section 23 – Compensation – Allotments and instances of auction purchases of developed plots effected by the Development Authority itself – Cannot be made basis for assessment of compensation. (Para 16)
(2009) 15 SCC 769 – Relied upon
Land Acquisition Act, 1894 – Section 23 – Assessment of market value – Increase per annum – Instantly landholders relying on sale deeds for smaller plots in 1997 with maximum value of Rs.8 lakhs – Similarly acquisition after present acquisition cannot be relied upon – The villages ought to be grouped in two groups with different valuations – Courts below considering all villages together and applying same rate – Even taking a uniform base assessment as per Pran Sukh, the escalation would be different in each case – Held, 8% escalation for villages Naharpur Kasan and Kasan will be appropriate – Escalation in respect of villages Bas Kusla, Bas Haria and Dhana held to be half of that in respect of villages Naharpur Kasan and Kasan – In respect of village Manesar rise of 50% granted by High Court approved. (Para 23, 25, 27, 28)
(2010) 11 SCC 175; (2008) 14 SCC 745; (2009) 15 SCC 769; (2018) 3 SCC 278 – Relied upon
(2013) 14 SCC 506; (2017) 4 SCC 760 – Referred
Facts of the case:
About 1500 acres of land was notified under Section 4 of the Land Acquisition Act, 1894 for the public purpose under Phase I, II, III and IV.
Appropriate declarations under Section 6 of the Act were issued by the State Government for all the four phases.
After a series of litigation reaching up to supreme Court the High Court assessed the compensation at Rs.41.40 lakhs per acre along with statutory benefits in respect of lands acquired in villages Naharpur Kasan, Kasan, Bas Haria, Bas Kusla and Dhana (covered by Phases II and III). The compensation in village Maneswar (covered by Phase-IV) was assessed after giving 50% enhancement at Rs.62.10 lakhs per acre along with statutory benefits. As regards M/s Kohli Holdings Pvt. Ltd., additional component of 30% was also awarded on account of severance charges, over and above the rate of Rs.62.10 lakhs per acre.
This order is under challenge in these appeals.
Finding of the Court:
(a) In respect of lands under acquisition from villages Naharpur Kasan and Kasan the market value shall be Rs.37.54 lakhs per acre. Additionally, all statutory benefits would be payable.
(b) In respect of lands under acquisition from villages Bas Kusla, Bas Haria and Dhana the market value shall be Rs.28.77 lakhs per acre.
Additionally, all statutory benefits would be payable.
© In respect of lands from village Manesar the market value shall be Rs.56.31 lakhs per acre. Additionally, all statutory benefits would be payable.
(d) M/s. Kohli Holdings Private Limited shall not be entitled to any severance charges.
Result: Appeals preferred by HSIIDC and the State of Haryana partly allowed. Appeals preferred by all the landholders including M/s. Kohli Holdings Private Limited dismissed.
Legal Category Hierarchy
Advocates:
Advocate Appeared:
Mr. Jasbir Singh Malik, Ms. Usha Nandini V., Mr. S.K. Sinha, Mr. S.J. Amith, Dr. (Mrs.) Vipin Gupta, Mr. Aditya Giri, Mr. Abhishek Singh, Mr. Siddharth Batra, Mr. Ravinder Kumar, Ms. Garima Sehgal, Mr. Vishwajeet Arora, Mr. Alok Sangwan, for Dr. Monika Gusain, Mr. Vibhuti Sushant Gupta, Mr. Ram Naresh Yadav
Advocate Appeared:
Mr. Jasbir Singh Malik, Ms. Usha Nandini V., Mr. S.K. Sinha, Mr. S.J. Amith, Dr. (Mrs.) Vipin Gupta, Mr. Aditya Giri, Mr. Abhishek Singh, Mr. Siddharth Batra, Mr. Ravinder Kumar, Ms. Garima Sehgal, Mr. Vishwajeet Arora, Mr. Alok Sangwan, for Dr. Monika Gusain, Mr. Vibhuti Sushant Gupta, Mr. Ram Naresh Yadav
Table of Contents
2. Landholders seek higher compensation based on developed plot rates; acquiring authority argues for lower escalation rates based on rural land characteristics. (Para 11 , 15 )
3. Allotments of developed plots are unsafe parameters for market value; rural land escalation differs from urban areas and requires cautious application of base rates. (Para 12 , 16 , 18 , 19 , 21 )
4. Market value for large rural acquisitions is determined by applying reasonable escalation to a base rate, adjusting for locational advantages and deducting for small plot exemplars. (Para 18 , 23 , 24 , 25 )
5. Compensation rates fixed for different village groups; severance charges denied. (Para 30 , 31 )
6. Can allotment letters of developed industrial plots be used to assess the market value of acquired agricultural land?
No, the court held that reliance on allotment letters of developed plots or instances of auction sales is not a safe parameter to assess the market value of acquired land. (Para 12 , 16 )
7. How does the rate of annual increase in land prices differ between rural and urban areas?
In urban or semi-urban areas, escalation is higher (10-15%) due to rapid development. In rural areas, increase is slower and gradual, typically around half of urban rates (5-7.5%) in the absence of clear evidence. (Para 18 )
8. How should transactions occurring after the date of acquisition be treated when determining market value?
Transactions subsequent to acquisition should generally be ignored as the acquisition itself accelerates surrounding development. If used, they must be worked back with greater caution and higher deduction percentages. (Para 18 , 23 )
9. When are severance charges awarded under Section 23(1)(thirdly) of the Land Acquisition Act?
Severance charges are granted when acquisition diminishes the quality and value of the remaining holding. They are not awarded if the remainder's commercial potential increases due to neighboring development. (Para 29 )
JUDGMENT :
Uday Umesh Lalit. J.
Leave granted.
2. The landholders and HSIIDC1 have filed these cross appeals challenging the final judgment and order dated 09.03.2018 passed by the High Court of Punjab and Haryana at Chandigarh in RFA No.2373 of 2010 (O&M) titled Madan Pal (III) v. State of Haryana and another and in all connected matters. Since all these matters arise out of the same acquisition proceedings, they are dealt with together by this common Judgment.
3. About 1500 acres of land was notified under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act") for the public purpose of development of Industrial Model Township, Manesar, Gurgaon Phases II, III and IV by three separate notifications. The proposed acquisition was:-
(i) re: Phase II
About 177 Acres 5 Kanal 19 Marla situated in the Revenue Estate of Villages Kasan, Bas Kusla, Naharpur Kasan and Manesar, Tehsil and District Gurgaon was notified on 06.03.2002.
(ii) re: Phase III
About 598 Acres 5 Kanal 12 Marla situated in the Revenue Estate of Villages Bas Kusla, Kasan, Bas Haria and Dhana, Tehsil and District Gurgaon was notified on 07.03.2002.
(iii) re: Phase IV
About 657 Acres 4 Kanal 3 Marla situated in the Revenue Estate of villages Bas Kusla, Bas Haria, Dhana and Kasan, Tehsil and District Gurgaon was notified on 26.02.2002.
4. Appropriate declarations under Section 6 of the Act were issued by the State Government in respect of said lands under Phases II, III and IV on 15.11.2002, 25.11.2001 and 18.11.2002 respectively. Thereafter:
(i) In respect of lands proposed to be acquired for Phase II, Award No.5 of 2003 was passed by the Sub-Divisional Officer (C)-cum-Land Acquisition Collector, Gurgaon on 22.07.2003 and the compensation awarded to the land owners for different types of lands was as under:-
Kinds of Land and rates per acre
Village
Chahi
Banjar
Gair Mumkin
Kasan
5,25,000/-
5,00,000/-
7,50,000/-
Bas Kusla
2,25,000/-
1,75,000/-
3,60,000/-
Naharpur Kasan
5,25,000/-
4,00,000/-
7,20,000/-
Manesar
7,00,000/-
7,00,000/-
10,00,000/-
The extent of lands under various categories in the aforesaid villages was set out in the award as under:-
Name of village
Kinds of Land
Total
Chahi
Gair Mumkin
Banjar
Kanal
Marla
Kasan
210-08
19-07
0
229
15
Bas Kusla
752-18
47-17
0
800
15
Naharpur Kasan
52-12
0-02
0
52
14
Manesar
272-00
16-05
09-07
297
12
Grand Total
1287-18
83-11
09-07
1380
16
(ii) In respect of lands in Phase No.III, Award No.1 of 2003 was passed by the Sub-Divisional Officer (C)-cum-Land Acquisition Collector, Gurgaon on 24.12.2003 and the compensation awarded to the land owners for different types of lands was as under:-
Kinds of land and rates per acre
Village
Chahi
Gair Mumkin
Kasan
5,25,000/-
7,50,000/-
Bas
2,25,000/-
3,60,000/-
Kusla Bas Haria
2,25,000/-
3,60,000/-
Dhana
2,25,000/-
3,60,000/-
The extent of lands under various categories in the aforesaid villages was set out in the award as under:-
Name of Village
Kinds of land
Total
Chahi
Gair Mumkin
Kanal
Marla
K
M
K
M
Kasan
1602
8
234
11
1836
19
Bas Kusla
955
6
32
11
987
17
Bas Haria
163
15
2
7
166
2
Dhana
1740
4
58
10
1798
14
Grand Total
4461
13
327
19
4789
12
(iii) In respect of lands in Phase No.IV, Award No.6 of 2004 was passed by the Sub-Divisional Officer (C)-cum-Land Acquisition Collector, Gurgaon on 20.05.2004 and the compensation awarded to the land owners for different types of lands was as under:-
Kinds of land and rates per acre
Village
Chahi
Gair Mumkin
Bas Kusla
2,25,000/-
3,60,000/-
Bas Haria
2,25,000/-
3,60,000/-
Dhana
2,25,000/-
3,60,000/-
Kasan
5,25,000/-
7,50,000/-
The extent of lands under various categories in the aforesaid villages was set out in the award as under:-
Name of Village
Kinds of land
Total
Chahi
Gair Mumkin
Kanal
