1. Land acquisition under the Land Acquisition Act, 1894 — Dispute over compensation based on market value and the validity of a percentage deduction. (Para 1 )
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2019 Supreme(SC) 134
SUPREME COURT OF INDIA
L. Nageswara Rao, M.R. Shah, JJ.
Mahanti Devi – Appellant
Versus
M/s Jaiprakash Associates Ltd. and another – Respondents
Civil Appeal Nos. 1572, 1573 of 2019 (Arising Out of S.L.P. (Civil) Nos. 29623, 29626 of 2016)
Decided On : 08-02-2019
Important Points
IMPORTANT POINT
Any deduction from quantum of compensation must be supported by reasons.
Any deduction from quantum of compensation must be supported by reasons.
Subject
Land Acquisition - Compensation
Act Referred
Headnote
Land Acquisition Act, 1894 – Sections 4 and 18 – Acquisition of land – Quantum of compensation – Deductions – Logic followed by Reference Court was adopted and compensation of Rs. 5 lakhs per bigha was maintained – There was no detailed discussion either by Reference Court or Appellate Court by taking into account relevant factors for making deduction of 60% from market value of a sale deed which was executed – Large number of cases pertaining to acquisition in issue in this case are pending before High Court and Reference Court – Matters remitted to High Court for fresh consideration on justifiability of imposition of 60% deduction on market value while computing compensation to be paid to Appellants – High Court advised to take into account principles laid down by Apex Court for the purpose of deductions to be made on market value. (Paras 2, 3, 4 and 5)
Facts of Case:
Notification was issued under Section 4 of Land Acquisition Act, 1894 on 11.04.2005 for acquiring land measuring 720-18 bighas and 95-4 bighas for Himachal Cement Project. Notification was published on 12.04.2005. Award was passed on 27.01.2006. Compensation was computed by Land Acquisition Collector at the rate of Rs. 2,10,000/- per bigha for cultivated land and Rs. 40,369/- per bigha for uncultivated land. Sale deeds which were executed one year prior to issuance of notification under Section 4 of Act were brought on record. According to the well-established law as laid down by this Court, sale deed representing highest market value was taken into account by Reference Court for the purpose of computing compensation.
Findings of Court:
There was no detailed discussion either by Reference Court or Appellate Court by taking into account relevant factors for making deduction of 60% from market value of a sale deed which was executed.
Result : Appeals disposed of.
Legal Category Hierarchy
Advocates Appeared:
For the Appellant : Mr. Sanjeev Bhushan, Sr. Adv., Mr. Virender Thakur, Adv., Mr. Subhash Chandran K.R., Adv., Mr. Nikilesh Ramachandran, AOR
For the Respondent: Mr. Abhinav Mukerji, AOR, Ms. Bihu Sharma, Adv., Mr. Siddharth Garg, Adv., Mr. S.B. Upadhyay, Sr. Adv., Mr. Pawan Upadhyay, Adv., Mr. Sarvjit Pratap Singh, Adv., Ms. Vanshika Gupta, Adv., Mr. Nishant Kumar, Adv., Unuc Legal LLP, AOR
For the Appellant : Mr. Sanjeev Bhushan, Sr. Adv., Mr. Virender Thakur, Adv., Mr. Subhash Chandran K.R., Adv., Mr. Nikilesh Ramachandran, AOR
For the Respondent: Mr. Abhinav Mukerji, AOR, Ms. Bihu Sharma, Adv., Mr. Siddharth Garg, Adv., Mr. S.B. Upadhyay, Sr. Adv., Mr. Pawan Upadhyay, Adv., Mr. Sarvjit Pratap Singh, Adv., Ms. Vanshika Gupta, Adv., Mr. Nishant Kumar, Adv., Unuc Legal LLP, AOR
Table of Contents
2. Justifiability of imposing a 60% deduction on the market value of a small piece of land when computing compensation for acquired land. (Para 2 , 5 )
3. The Reference and Appellate Courts failed to provide a detailed discussion or justification for the 60% deduction applied to the market value of the sale deed. (Para 2 )
4. Market value adjustments for compensation must be based on specific positive and negative factors, such as plot size and location, rather than arbitrary deductions. (Para 3 )
5. Matter remitted to the High Court for fresh consideration of the justifiability of the 60% deduction in accordance with established principles for market value adjustments. (Para 5 , 6 )
6. How is the market value of land determined for compensation purposes in land acquisition?
Market value cannot be ascertained with mathematical accuracy. It requires identifying comparable instances based on time and situational proximity, making suitable adjustments for positive factors and negative factors by placing the two in juxtaposition. (Para 3 )
7. What are the positive factors considered when adjusting the market value of land under acquisition?
Positive factors include smallness of size, proximity to a road, frontage on a road, nearness to developed area, regular shape, level vis-a-vis land under acquisition, and special value for an owner of an adjoining property. (Para 3 )
8. What are the negative factors considered when adjusting the market value of land under acquisition?
Negative factors include largeness of area, situation in the interior at a distance from the road, narrow strips of land with small frontage compared to depth, lower levels requiring filling, and remoteness from developed locality. (Para 3 )
JUDGMENT :
L. Nageswara Rao, J.
Leave granted.
1. A notification was issued under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act') on 11.04.2005 for acquiring land measuring 720-18 bighas and 95-4 bighas for the Himachal Cement Project (a unit of M/s Jaiprakash Associates Ltd.) in the villages Baga and Karog, Tehsil Arki, District Solan, Himachal Pradesh. The said notification was published on 12.04.2005. An award was passed on 27.01.2006. Compensation was computed by the Land Acquisition Collector at the rate of Rs. 2,10,000/- per bigha for cultivated land and Rs. 40,369/- per bigha for uncultivated land. In the reference filed under Section 18 of the Act, the Appellants were held entitled for compensation at the rate of Rs. 5 lakh per bigha. The sale deeds which were executed in 2004, i.e., one year prior to the issuance of the notification under Section 4 of the Act were brought on record. According to the well-established law as laid down by this Court, the sale deed representing the highest market value was taken into account by the Reference Court for the purpose of computing the compensation. Exhibit PW2/A pertained to sale of 2 biswas of land for Rs. 1,20,000/- as per which the market value of one bigha would be Rs. 12 lakhs. In view of the said sale deed pertaining to a small piece of land, the Reference Court imposed a deduction of 60% of the value of the land in Exhibit PW2/A and concluded that the Appellants are entitled for compensation at the rate of Rs. 5 lakhs per bigha.
2. It is clear from a perusal of the judgment of the High Court of Himachal Pradesh which heard the appeals filed by the Respondent and the cross-objections filed by the Appellants, that the logic followed by the Reference Court was adopted and the compensation of Rs. 5 lakhs per bigha was maintained. There was no detailed discussion either by the Reference Court or the Appellate Court by taking into account the relevant factors for making a deduction of 60% from the market value of a sale deed which was executed.
3. It was held by this Court in Viluben Jhalejar Contractor v. State of Gujarat, (2005) 4 SCC 789 p 797 as under:-
"20. The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-a-vis the land under acquisition by placing the two in juxtaposition. The positive and negative factors are as under:
Positive factors
Negative factors
(i) smallness of size
(i) largeness of area
(ii) proximity to a road
(ii) situation in the interior at a distance from the road
(iii) frontage on a road
(iii) narrow strip of land with very small frontage compared to depth
(iv) nearness to developed area
(iv) lower level requiring the depressed portion to be filled up
(v) regular shape
(v) remoteness from developed locality
(vi) level vis-a-vis land under acquisition
(vi) some special disadvantageous factors which would deter a purchaser
(vii) special value for an owner of an adjoining property to whom it may have some very special advantage".
4. We are informed by the learned counsel that a large number of cases pertaining to the acquisition in issue in this case are pending before the High Court and the Reference Court.
5. We deem it proper to remit these matters to the High Court by setting aside the judgment in RFA No. 178 of 2013 for a fresh consideration on the justifiability of imposition of 60% deduction on the market value, while computing the compensation to be paid to the Appellants. The High Court would be well advised to take into account the principles laid down by this Court for the purpose of deductions to be made on the market value.
6. The ap
