Holding

The Supreme Court upheld the High Court’s award, holding that using an average of comparable sales is permissible in fragmented acquisitions where specific evidence is lacking.

Summary

The Ahmedabad Municipal Corporation acquired strips of land for a Ring Road under a notification issued under Section 4(1) of the Land Acquisition Act, 1894. The Land Acquisition Officer fixed compensation at Rs 50‑80 per square metre, which the claimants challenged under Section 18, leading the City Civil Court to enhance the award to Rs 100 per square metre in one case and confirm the officer’s award in two others. On appeal under Section 54, the Gujarat High Court uniformly raised compensation to Rs 190 per square metre, basing its determination on the average of comparable sales in the locality despite the lack of specific evidence for each survey number. The appellants argued that such an average method was impermissible. The Supreme Court held that, given the fragmented nature of the acquisition and the difficulty of finding identical sales, reliance on general comparable sales and an average was reasonable and did not warrant interference. Consequently, the Supreme Court dismissed the appeals, directing the corporation to pay the balance amount and interest.

Issues considered

Whether compensation under the Land Acquisition Act may be determined by averaging comparable sale prices when specific evidence for each parcel is unavailable.
Whether the burden of proof lies on the claimants to show that the compensation offered is inadequate.
Whether the High Court’s enhancement of compensation to Rs 190 per square metre was unreasonable.

Legislation cited

Land Acquisition Act, 1894s. 18, s. 4(1), s. 54

Subjects

Land acquisitionCompensation determinationAverage of comparable salesSection 4(1)Section 18Section 54Prudent and willing purchaserRing RoadAhmedabad

Judgment

f

A AHMEDABAD MUNICIPAL CORPN. ETC. ETC.
v.
SHARDABEN AND ORS. ETC. ETC.

JANUARY 19, 1996

B [K. RAMAWSAMY AND G.T. NANA VAT!, JJ.]

Land Acquisition Act, 1984 :

Sections 4( 1), 18, 54-Award of compensation-Principle of detennina-
C tion of compensation on the basis of average-Generally not to be fol-
/owed-Difficulty i11 finding evidence of sale of land identical with each piece
of land acquired-High Cowt looking into evidence generally and broadly and
detennining compe11sation-ln the circumstance of the case, cannot be said
to be unreasonable.

D CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2950-
2991 of 1996 Etc. Etc.

From the Judgment and Order dated 4/5.8.93 of the Gujarat High
Court in F.A. Nos. 291-95, 1579-81, 1644-45, 1955-58, 1961-71/90, 2423,
2425-28/92 and 371-82 of 1993.
E
B.K. Mehta, R.F. Nariman, Prasant Desai, H.S. Parihar, K.S. Pathak,
Aseem Mehrotra, A.K. Pandey, Anil B. Diwan, Ms. Indu Goswamy, S.
Sanjannala, M.D. Jha, Vimal Dave, Gopinath Amin, Ms. Usha, S. Reddy,
Ms. J.S. Wad, Ambrish Kumar, M.V. Goswami, Ms. Meenakshi Arora and
F Ms. H. Wahi for the appearing parties.

The following Order of the Court was delivered :

Leave granted.

We have heard learned counsel for both side. The notification under
G Section 4(1) of the Land Acquisition Act (Act 1 of 1894) (for short, 'the
Act') was published on September 23, 1980 acquiring a large extent of land
in different survey numbers for laying Ring Road around Ahmedabad City.
The Land Acquisition Officer passed three awards relating to two villages.
Wadaj and Memnagar on three different dates, namely, September 29,
r
H 1984, December 31, 1985 and September 23, 1986 fixing compensation
820
)
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AHMEDABADMUNICIPIXL CORPN. v. SHARDABEN 821

ranging between Rs. 50-80. per square meter. Dissatisfied therewith, the A
claimants sought references under Section 18. The City Civil Court at
Ahmedabad by three awards determined the compensation. In the first
award, the civil court enhanced the compensation to Rs. 100 per square
metre and in the next two awards, it confirmed the award of the Land
Acquisition Officer. In other words, he made nil award. On appeal under
B
Section 54 of the Act, the Division Bench of the High Court in the
impugned judgment dated August 4/5, 1993 uniformly enhanced the com-
pensation to Rs. 190 per square metre. Thus, these appeals by special leave.

Mr. B.K. Mehta, learned counsel for the appellant, vehemently con-
tended that the High Court was wrong in its view. when no specific C
evidence relatable to particular survey number of comparable sale had
been adduced by the parties, the High Court was wrong in adopting the
average and determining the compensation on the basis of the average.
Though we find force in the contention of learned counsel for the appel-
lants, one important distinguishing feature which we have to notice in these D
appeals is that the acquisition relates to small strips of lands comprised in
different survey numbers cutting into several lands for the purpose of laying
a running Ring Road. In other words, the acquired land does not consist
of a compact block for determination of compensation in which event the
criticism of Shri Mehta would bear relevance and would need closer
scrutiny and examination. The burden is always on the claimants to prove E
by adducing reliable evidence that the compensation offered by the Land
Acquisition Officer is inadequate and the lands are capable of fetching
higher market value. It is the duty of the Court to closely scruitinise the
evidence, apply the test of prudent and willing purchaser, i.e., whether he
would be willing be purchase in open and normal market conditions of the F
acquired lands and then determine just and adequate compensation.

In these appeals we find that the claimants have adduced evidence
regarding sales of some lands in the locality. Though the evidence as
regards comparability of those lands with the lands under acquisition was G
., general and not specific, it could still be relied upon. So also, though the
sale instances were of lands situated near some of the lands acquired only,
they could still be relied upon as acquisition in these cases is of contiguous
plots. In the very nature of acquisition, it would be difficult to find evidence
of sale of land identical with each piece of land acquired. Under these
circumstances, the High Court has looked into the evidence generally and H
822 SUPREME COURT REPORTS [1996) 1 S.C.R.

A broadly.· and then· determined the compensation. Though this Court has
repeatedly not approved of the principle of determination of compensation
· on the basis of average, the conclusion reached by ih~ High Court in the
peculiar facts and circumstani:es of these cases, cannot be said to be
unreasonable~ Under these circumstances, we .do not' think that "these
appeals call for any interference for further enhancement of the compen-
B sation to reduce the market value. . . .

· The appellant-Corporation is directed to pay the ·balance amount
and interest within four months from today. Contempt Petition Nos. 13-17
of 1995 and IA. Nos. 45-70 are dismissed.· '
c These appeals and cross-appeals are accordingly dismissed. No costs.

G.N. Appeals dismissed. ·

(