Summary
In a land acquisition compensation appeal, the Supreme Court enhanced the market value of non-agricultural land acquired for the Gujarat Housing Board from Rs. 53 to Rs. 107 per square metre, holding that a genuine sale deed of an adjoining plot executed within a month after the Section 4 notification and a pre-notification Collector's allotment of adjacent land at Rs. 65 per square metre were reliable exemplars, subject to a 30 per cent deduction for development.
Issues
- Whether the compensation of Rs. 45 per square metre fixed by the Reference Court, enhanced to Rs. 53 by the High Court, was fair and reasonable for the acquired land.
- Whether a sale deed executed shortly after the date of the notification under Section 4 of the Land Acquisition Act, 1894 can be relied on as an exemplar for determining market value.
- Whether an allotment of adjoining land by the Collector at Rs. 65 per square metre before the acquisition is a relevant exemplar.
- What deduction should be made towards development when the exemplar is a small developed plot in a cooperative housing society.
Provisions considered
- Section 4, Land Acquisition Act, 1894Market value is to be determined as on the date of publication of the Section 4 notification (30.07.1985); the sale deed of 29.08.1985 executed within a month thereafter was accepted as a proximate, genuine post-notification instance. (¶¶ 2, 8, 9, 11)
- Section 23, Land Acquisition Act, 1894Market value, as explained in Mehta Ravindrarai Ajitrai, is the price at which the property would change hands between a willing seller and a willing but not too anxious buyer; prices fetched for similar lands in bona fide transactions at or about the time of the preliminary notification are the best evidence of it. (¶ 10)
Held
- Following Chimanlal Hargovinddas, a bona fide sale transaction of land adjacent to the acquired land and proximate to the date of acquisition can be relied on to determine compensation; post-notification instances may be taken into account if very proximate and genuine and if the acquisition itself did not motivate the purchaser to pay a higher price. Mehta Ravindrarai Ajitrai likewise permits post-notification instances with appropriate deductions. (¶¶ 8, 9, 10)
- The sale deed dated 29.08.1985 (Exhibit 53), executed within a month of the Section 4 notification and proved by the purchaser's testimony (Exhibit 52), was accepted as an exemplar; a bald assertion that it was not genuine was insufficient to reject it, and it was not shown that the price was inflated by the acquisition since the plot lay in a colony developed by a cooperative society. The State did not dispute that the exemplar land adjoined the acquired land. (¶¶ 7, 11, 13)
- The Collector's own allotment of adjacent Survey No. 864 at Rs. 65 per square metre before the acquisition (Exhibit 44) showed that the Government itself sought a higher value for land in the vicinity; computation of compensation for the acquired land at a lower rate could not be accepted, and the allotment was also a relevant exemplar. (¶¶ 7, 11, 15)
- Potentiality of the acquired land could not be doubted, the departmental witness having admitted that the railway station and bus stand were one kilometre away. (¶ 12)
- Since the land was acquired for residential development by the Housing Board and the exemplar was a developed plot in a cooperative society colony, at least 30 per cent of the acquired land had to be left for development; deducting 30 per cent from the exemplar rate yields Rs. 107 per square metre, which is also close to the mean of the two exemplars (Rs. 108.68). (¶¶ 14, 15)
- The High Court's rate of Rs. 53 per square metre was on the lower side; compensation was directed to be determined at Rs. 107 per square metre, with solatium, severance charges and interest as specified by the Reference Court allowed commensurately. (¶¶ 16, 17)
Result
Appeal partly allowed; compensation to be determined at Rs. 107 per square metre with solatium, severance charges and interest as ordered by the Reference Court allowed commensurately; respondents to calculate and pay the compensation within three months of communication of the order; pending applications disposed of.