Summary
In land acquisition appeals concerning about 302.75 acres in village Tauru, Mewat, the Supreme Court set aside the High Court's restoration of the Collector's rate and restored the Reference Court's award of Rs 92,62,500 per acre. The Court excluded sale deeds executed after the Section 4 notification and those from another village, used the highest bona fide pre-notification exemplar of a small plot in the same village subject to a development cut, and found the Reference Court's figure fair having regard to the land's potential.
Issues
- Whether the landowners were entitled to compensation above the Collector's rate restored by the High Court, and if so to what extent.
- Which sale exemplars could be relied on, and how small-plot exemplars should be adjusted, in assessing market value under Section 23(1) of the Land Acquisition Act, 1894.
Provisions considered
- Section 23(1), Land Acquisition Act, 1894Market value must be assessed as on the date of publication of the Section 4 notification. Sale deeds executed after that date were therefore excluded save in exceptional circumstances, as the acquisition itself may distort prices. (¶¶ 18, 20, 23)
- Section 4, Land Acquisition Act, 1894The notification of 11.02.2011 fixed the crucial date; exemplars were classified as pre- and post-notification on that basis. (¶¶ 3, 16, 20, 23)
- Section 18, Land Acquisition Act, 1894The landowners' references led to the Reference Court's enhancement to Rs 92,62,500 per acre, which the Supreme Court restored. (¶¶ 5, 37, 38)
Held
- Market value is the price a willing buyer would pay a willing seller having regard to the land's condition, advantages and potential. Under the comparable sales method, exemplars should be genuine, close in time to the Section 4 notification, near the acquired land, similar in nature and comparable in size. (¶ 19)
- Sale deeds executed after the Section 4 notification may be used only where better evidence is lacking and the party relying on them shows that prices did not rise because of the acquisition. The High Court erred in rejecting the landowners' post-notification exemplar while itself relying on the State's post-notification exemplars; both sets were excluded. (¶¶ 20, 22, 23)
- Exemplars from an adjacent village ordinarily cannot be used, as land values vary by locality; the State's deeds from another village were excluded. (¶ 24)
- Sale deeds of small plots are not barred but must be subjected to an appropriate development cut, which may range from 20 to 75 per cent depending on the difference in size, access to roads, proximity to developed areas and the nature of the land. (¶¶ 25, 26, 30, 31)
- Where bona fide exemplars vary widely, the highest should be adopted rather than an average. The highest pre-notification exemplar from the same village (Ex. P5, at Rs 1,81,33,867 per acre) was used; given the size disparity on one side and the land's location and potential on the other, a cut of about 46 to 50 per cent was appropriate, which still yielded a rate well above the Collector's and close to the Reference Court's. (¶¶ 28, 29, 32, 33, 34)
- Even on averaging the usable exemplars, the result exceeded the Reference Court's rate, so that rate was neither excessive nor beyond fair value; the High Court erred in reducing it to the Collector's figure. (¶¶ 35, 36, 37)
Result
Appeals allowed; the High Court's leading judgment of 23.08.2022 and the judgments following it set aside, and the Reference Court's compensation restored; unpaid amounts with all statutory benefits including interest to be paid within eight weeks.