Important point
Best method for arriving at market value for the land acquired would be the amount which a willing purchaser of land would pay to owner of land as may be evidenced by deeds of sale.

Headnote:Land Acquisition Act, 1894—Section 23—Lands in four villages were acquired for use there of by appellant—Question of determination of market value—Land Acquisition Collector taking into consideration several sale deeds between 1981 and 1982 in respect of lands of adjoining villages determined rate of Rs. 1.55 per sq.m.—Reference Court relying on judgments made in other L.A.R. cases awarded compensation at Rs. 10 per sq. m.—High Court upheld the award—Appeal—Appellant being aggrieved person, appeal under Section 54 of the Act was maintainable at its instance—Modes for arriving at market value for land acquired—Best method would be the amount which a willing purchaser of land would pay to owner of land as may be evidenced by sale deeds—Reference Court has to apply comparable sales method as also the situation of land—Reference Court seriously erred in solely relying on testimony of a witness ignoring deeds of sale which were produced before LAC—Insurances of sale in respect of similar land situated in same village and/or neighbouring villages should have been taken as guiding factors—Judgments in other LAR cases relied by reference Court had already been challenged before High Court—Impugned award could not be sustained but in view that financial implication involved only a few thousand rupees in each case, no interference would be warranted in exercise of power under Article 136 of Constitution of India.
       Held : While determining the amount of compensation payable in respect of the lands acquired by the State, indisputably, the market value therefor has to be ascertained. Although, there exist different modes for arriving at market value for the land acquired; the best method, however, as is well-known would be the amount which a willing purchaser of the land would pay to the owner of the land as may be evidenced by deeds of sale. In absence of any direct evidence on the said point, the court may take recourse to other methods; viz. judgments and awards passed in respect of acquisitions of lands made in the same village and/or neighbouring villages. Such a judgment and award in absence of any other evidence like deed of sale, report of expert and other relevant evidence, however, would have only evidentiary value. The Reference Court, it is trite, has to apply the comparable sales method as also the situation of the land which is to be appreciated upon considering the question as to whether acquired land is similar to any land sold in the vicinity. (Paras 10 and 11)
       The Reference Court, in our opinion, committed a serious error in passing the judgment solely relying on or on the basis of the testimony of a witness ignoring the deeds of sale which were produced before the Land Acquisition Collector. If the Reference Court intended to differ with the opinion of the Land Acquisition Collector, it was bound to assign sufficient and cogent reasons therefor. From a bare perusal of the judgment and award passed by the Reference Judge, it is evident that he had relied upon the purported award made in L.A.R. Case No. 1349/92 and 1314/92. It is true that before the Reference Court, the learned Additional Public Prosecutor made a statement that the said judgments have attained finality and no appeal had been preferred thereagainst and as such the same could be taken as the good guidance for the purpose of determining the actual value of the acquired lands; but as has been noticed hereinbefore, the said statement had wrongly been made as appeals had been preferred thereagainst. The High Court, in our opinion, thus, did not pose unto itself a correct question so as to arrive at a correct conclusion on fact and, thus, misdirected itself in law. In determining the amount of compensation, the Reference Court as also the High Court was bound to take into consideration the well-settled principles of law and the factors enumerated in Section 23 of the Act. Instances of sale in respect of the similar land situated in the same village and/or neighbouring villages should have been taken as guiding factors by the Reference Judge as also by the High Court. In absence of any better evidence, the Reference Judge as also the High Court could have made addition in the sale prices for the land as evidenced by the said deeds of sale. (Paras 13 and 14)
       Despite our findings aforementioned, we are of the opinion that these are not fit cases calling for interference in exercise of our discretionary jurisdiction under Article 136 of the Constitution of India. (Para 17)
       The financial implication of these matters involves only a few thousand rupees in each case. In these cases, the Appellants have already deposited 50% of the amount awarded by the High Court and presumably, the Respondents have already withdrawn that amount. Even if we had set aside the impugned judgment and remit the matter back to the High Court, the Appellants as also the Respondents would have to spend a huge amount on litigation. Even otherwise, we might have directed that the amount withdrawn by the Respondents may not be refunded to the Appellants. Even from that angle, the amount involved in these proceedings is not such which would warrant this Court to exercise its discretionary jurisdiction. (Paras 20 and 21)

Judgment

S.B. Sinha, J.—These appeals involving common questions of law and fact were taken up for hearing together and are being disposed of by this common judgment.

2. The representative fact of the matter, however, is being noticed from Civil Appeal No. 173 of 2004.

3. The lands situated inter alia in villages Santhal, Memadpur, Saduthla and Balol were acquired by the State of Gujarat for the purpose of use thereof by the Appellant.

4. A notification under Section 4 of the Land Acquisition Act (for short “the Act”) was issued on 31.7.1986. In terms of Section 6 of the Act, the declaration was issued on 29.12.1987. Upon service of notice upon the claimants, the Land Acquisition Collector made an award in terms of Section 11 of the Act. In doing so; several deeds of sale executed between 1981 and 1982 in respect of lands adjoining some of the villages were taken into consideration and market value of the land was determined at the rate of Rs. 1.55 per sq. m. The claimants - Respondents did not accept the said award and prayed for a reference to the Civil Court. Such a reference having been made the Reference Court purported to be relying on or on the basis of judgments dated 30th October, 1996 and 10th November, 1996 passed by 4th Extra Assistant Judge and 2nd Extra Assistant Judge, Mahesana respectively in L.A.R. Case No. 1349/92 and 1314/92 passed an award computing the amount of compensation at the rate of Rs. 10/- per sq.m.

5. The Appellant herein was not impleaded as a party in the Reference Court. It had, thus, no opportunity also to adduce any evidence either before the Land Acquisition Collector or before the Reference Court. It preferred appeals before the High Court being aggrieved by and dissatisfied with the said judgment and award passed by the Reference Court.

6. A contention raised by the Appellant before the High Court inter alia was that the Reference Judge acted illegally and without jurisdiction in passing the said judgment solely on the basis of the deposition of one Sendhabhai Vastaram Patel who alleged that the agricultural lands which he and others had been cultivating were of high fertility and three crops in a year were grown therein. The witness further alleged that the village was well-developed. He further contended that the lands of one Govindhbhai Ambaram was acquired for the Appellant wherein compensation at the rate of Rs. 10/- per sq.m. was awarded. It was argued that the Reference Court was bound to consider the deeds of sale relied upon by the Land Acquisition Collector in his Award.

7. A Division Bench of the Gujarat High Court rejected the said contentions stating that the Reference Court had not committed any error of law in taking into consideration the evidence adduced by the said witness. It was held:

“It appears that after the evidence, another judgment was pointed to the Reference Court for which there is a reference in the impugned judgment in para 15. The lands covered under that reference cases were situated in the sim of village Santhal and Kasalpura and the Reference Court awarded Rs. 10/- per sq. mtrs. In the instant case, the lands are situated at village Santhal. In view of this evidence, we find no substance in the appeals and appeals are dismissed.”

Aggrieved, the Appellants are before us

8. Mr. Ashwani Kumar, learned senior counsel appearing on behalf of the Appellant inter alia would contend that the High Court committed a serious error in passing the impugned judgment insofar as it failed to take into consideration that the Reference Court committed a mistake in relying on the sole testimony of a witness and ignoring the deeds of sale which were produced before the Land Acquisition Collector. It was pointed out that the appeals were filed against Award Nos. 2571 of 1993 and 2573 of 1993 and in that view of the matter, the Reference Court could not have acted only on the basis thereof.

9. The Appellant was a person aggrieved and the appeal under Section 54 of the Act was maintaina

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2005 Supreme(SC) 1011

Important pointBest method for arriving at market value for the land acquired would be the amount which a willing purchaser of land would pay to owner of land as may be evidenced by deeds of sale.

Cases Referred (9)

Important point
Best method for arriving at market value for the land acquired would be the amount which a willing purchaser of land would pay to owner of land as may be evidenced by deeds of sale.