Land Acquisition Act - Compensation - Section 54 - The judgment and award dated 28-2-2002 passed in L. A. C. No. 49 of 1999 as amended on 18-4-2002 in L. A. Misc. No. 33 of 2002 on the file of the Court of the Principal Civil Judge (Senior division) and CJM, Shimoga - Sections 23 to 25 offer a complete code for the guidance of the Court in determining compensation - Valuation of immovable property is not an exact science and cannot be made by merely applying algebraic formulae - The market value of a piece of property is the price at which the property changes hands from a willing seller to a willing buyer, dealing at arms length - The determination of market value is the prediction of an economic event, expressed in terms of probabilities - The Court should take into consideration the evidence adduced as to the nature, situation, income, and potential value of the land - The market value should be fixed not only by reference to the use to which it was put on the date of publication of section 4 (1) notification, but also by reference to the uses to which it is reasonably capable of being put in the future - The Court can also take into account any special circumstances, apart from the methods of valuation traditionally adopted, in order to arrive at an estimate of the market value - The Court should balance plus factors such as smallness of area of the land acquired, proximity to road, frontage on road, vis-a-vis land acquired etc., as well as minus factors such are largeness of area, situation in the interior at a distance from the road, remoteness from development locality and any other disadvantageous factor which would deter a purchaser and then evaluate all those relevant plus and minus factors in terms of price variation as a prudent purchaser would do - The Court should adequately and reasonably compensate the loss sustained by a person as a consequence of compulsory acquisition of his property by the State by invoking its eminent domain power - The Parliament itself, to avoid injustice to the persons whose lands are acquired, in Section 24 of the Act, has enacted factors which should go into the decision making while determining the market value and fixation of compensation - The Court should be alive to the factors mentioned in Section 24 of the Act and keep them at the back of the mind - The assessment of the market value depends mainly on evaluation of many imponderables and uncertainties and may involve to some extent a matter of guesswork - The Court's attempt should always be to adequately and reasonably compensate the loss sustained by a person as a consequence of compulsory acquisition of his property by the State by invoking its eminent domain power - No man can be deprived of his land except on payment of compensation and the person who is deprived of his land is entitled to be compensated to the full value of the deprivation caused - The Court should also remember that it awards compensation cumulatively under all possible heads only once for deprivation of the land and injurious affection and there is no scope for an afterthought in the matter of claims to compensation - The State should be fair and reasonable in compensating the uprooted agriculturists and it shall not be permitted to make unlawful gain while exercise eminent domain power under the Act or any other statute

Fact of the Case:

The appellant, the owner of Site Nos. 171 and 181, was aggrieved by the compensation awarded by the Civil Court under the Land Acquisition Act, 1894. The land was acquired for non-agricultural use and developed into house-sites. Possession was taken over without initiating proceedings under the Act or any other enabling Statute. The appellant, along with others, filed a writ petition, which directed the Special Deputy Commissioner to issue Notification for acquisition of the lands concerned and thereafter to pass awards for compensation. The Civil Court passed the award fixing the market value at the rate of Rs. 6/- per sq. foot, which the appellant contested seeking compensation at the rate of Rs. 13.20 per sq. foot.

Finding of the Court:

The Court found that the Civil Court erred in fixing the market value at the rate of Rs. 6/- per sq. foot and held that the appellant is entitled to compensation at least at the rate of Rs. 13.20 per sq. foot. The impugned award was modified accordingly, and the appellant was declared entitled to all other statutory benefits under the Act based on the market value fixed by the Court.

Issues: The main issue was whether the market value fixed by the Civil Court at the rate of Rs. 6/- per sq. foot could be considered just and reasonable in the facts and circumstances of the case and evidence on record, and if not, what is the just and reasonable market value of the acquired land as on the date of Section 4 (1) Notification.

Ratio Decidendi: The Court applied the principles and norms for determination of compensation of the lands compulsorily acquired by the State, emphasizing the need to adequately and reasonably compensate the loss sustained by a person as a consequence of compulsory acquisition of his property by the State by invoking its eminent domain power. The Court also highlighted the factors to be considered in determining the compensation and the onus of fixing fair compensation, as well as the need for the State to be fair and reasonable in compensating the uprooted agriculturists and not making unlawful gain while exercising eminent domain power.

Final Decision: The appeal was allowed with costs, and the market value of the land comprised in Site Nos. 171 and 181 of the appellant was fixed at the rate of Rs. 13.20 per sq. foot. The impugned award was modified accordingly, and the appellant was declared entitled to all other statutory benefits under the Act based on the market value fixed by the Court.