G. NARAYAN RAOversusTHE LAND ACQUISITION OFFICER

A                          G. NARAYAN RAO
                                  v.
                    THE LAND ACQUISITION OFFICER

                                 JULY 15, 1996

B              [K. RAMASWAMY AND G.B. PATTANAIK, JJ.]

          Land Acquisition Act, 1894: Sections 4(1) and23.

           Land Acquisition-Compensation-Principles for determillation
C   of-Factors to be taken into account-Comparable sale-Land adjacent to
    the land acquired-Sale deed-Relia!lce on-Vendor or vendee should be
    examined in proof of the sale-Nature of land and genuineness of document
    should be examined-No reliance should be placed on untested docu-
    ments-Evidence of Land Acquisition Officer regarding land sold to public
    auth01ity--Docwnent not made pwt of record-No one examined in proof of
D   the circu111stances in which sale canie to be n1ade-Held such evidence was
    1ightly not accepted for detenniaation of compensation.

          Potential value-Land in question nnlsf possess potential value on the
  date of notification under section 4( 1)-Development in the neighbourhood
E and absence of statut01y impediments like obtaining sanction for layout held
  relevant factors--Detennination of co111pensation n1ust be just and adequate.

           17ie Collecto1; Raigmii v. Dr. Hwisingh 17iakur and Anr., AIR (1979)
    SC 472; 17te Teltsildw; Land Acquisitioll Vishaklwpatnam v. Slui P. Nar-
    singh Rao & Ors., (1985) 1APW99;Acquisition Office1; Elum & On·.v. Smt.
F   Jasti Rohini and Anr., [1995] 1 SCC 717; P. Ram Reddy & Ors. v. Land
    Acquisition Offiw; Hyderabad Urban Development Autho1ity, Hyderabad &
    Ors., [1995] 2 SCC 305, referred to.

         CIVIL APPELLATE .JURISDICTION: Special Leave Petition (C)
    No. 12895 of 1996.
G
         From the .T udgment and Order dated 30.8.95 of the Andhra Pradesh
    High Court in A. NO. 6 of 1987.

          D. Prakash Reddy and Mrs. D. Bharathi Reddy for the Petitioner.

H         The following Order of the Court was delivered :
                                      584
                   G.N. RAO v. LAND ACQN. OFFJ.CER                    585

       The petitioner questions the correctness of the judgment and order A
 dated August 30, 1995 made in Appeal No. G/87 by the Division Bench of
 Andhra Pradesh High Court, Hyderabad. Petitioner's land in an extent of
 7 acres 25 guntas situated in Nizamabad town was acquired by the Govern-
 ment to provide house sites to the poor by publication of the notification
 under Section 4(1) of the Land Acquisition Act, 1894 (for short, the 'Act').
                                                                              B
 On September 22, 1976, the petitioner claimed compensation @ Rs. 300
 per sq. yd. The Land Acquisition Officer awarded @ Rs. 30,000 per acre.
 On reference, the Additional District Judge, Nizamabad had enhanced the
 compensation at Rs. 63 per sq. yd, and after deducting 1/3 for development
 charges awarded Rs. 46. per sq. yd. by his award and decree dated June
25, 1986. The High Court reversed the ·decree and awarded compensation c
 @ Rs. 32,000 per acre with additional benefits under Amendment Act 68
of 1984. Shri Prakash Reddy in his usual thorough preparation and
vehemence contended that the Division Bench was not right in refusing to
remit the matter to the Court for fresh trial. As per the law then existing,
it was not necessary for landlord to examine the witnesses connected with D
the sale deeds Exhibit A-21 and A-22 relied on and accepted by reference
Court which were proximate to the point of time and adjacent to the land
offering comparable rate to award compensation. He also contended that
the lands are possessed of potential value as building sites since they are
situated in the municipal limits of Nizamabad. The potential value should
be considered and market value determined on that basis. He further E
contended that the Land Acquisition Officer had himself admitted in his
evidence that a small sale deed to an extent of 200 sq. yd. sold to statutory
bodies had secured a rate worked out at Rs. 47 per sq. yd. That would
provide basis to determine the market value after due deduction. At any
rate, as requested for in the High Court, the High Court would have F
remitted the matter for decision afresh. Having given our due consideration
to the forceful contentions of the counsel, we find no merit in any one of
the contentions.

      It is seen that, admittedly, neither the vendor nor the vendee of the
sale deeds, Exhibit A-21 and A-22 was examined. It is settled law from the G
decisions of this Court starting from The Collector, Raigarh v. Dr. Harisingh
Thakur and Anr., AIR (1979) SC 472 and that of the A.P. High Court in
77ie Tehsi/dar, Land Acquisition Vishakhapatanam v. Shri P. Narsingh Rao
& Ors., (1985) 1 APLJ 99 that either the vendor or the vendce should be
examined in proof of the documents to establish passing of the real H
    586                   SUPREME COURT REPORTS [1996) SUPP. 3 S.C.R.

A consideration under the documents, the nature of the respective lands and
    whether the documents are genuine documents etc. It is for the Court to
    consider all the relevant facts to accept the correctness of the sale deeds
    and then consider whether they should form basis to determine compen-
    sation. In tl.e absence of proof of above facts that would be no evidence
B   for the Court to place reliance on untested documents. The reference
    Court, therefore, was clearly in error in acting upon the untested sale deeds
    to determine the compensation @ Rs. 46 per sq. yd. after due deduction.

         The High Court elaborately considered the nature of the land, situa-
  tion in the developed area to find out whether the lands were possessed
C of potential value. It was held that the lay out sanction was obtained three
  years after publication of the notification under Section 4(1) of the Act.
  There was no development in the neighbourhood. It must be established,
  as a fact, that the potential purpose does exist as on the date of the
  notification, the prevailing conditions in the market, the existence of the
D construction of building activities in the neighbourhood and that other
  lands in the neighbourhood possessed similar condition. The High Court
  relied on recent judgments of this Court in Acquisition Officei; E!ul!l & 01~.
  v. Smt. Jasti Rohini and Anr., [~995) 1 SCC 717 and P. Ram Reddy & Ors.
  v. Land Acquisition Office1; Hyderabad Urban Development Auth01ity,
  Hyderabad & Ors., [1995] 2 SCC 305 etc. It is settled law that the Court in
E determining the compensation should sit in the armed chair of a willing
  vendee and determine whether in the given facts and circumstances he
  would be willing, depending upon the prevailing market conditions, to offer
  the rates which the Court proposes to determine as a prudent purchaser.
  In case of approved layout, it is equally settled law that layout was obtained
F in normal course of business venture. The Court must consider the
  suitability of the acquired land for putting up the buildings for residential,
   commercial or industrial buildings which have already come up in the
  neighbourhood and also the possibility to obtain amenities like water,
  drainage, electricity supply etc. Absence of statutory impediments like
   obtaining sanction for layout would be yet another relevant circumstance.
G On taking all material and relevant facts into consideration, the Court
  would consider whether the willing vendee would offer the price at which
   the Court proposes to determine. The determination of the compensation
   under those circumstances must be just and adequate. The High Court
   considered all these relevant circumstances and held that the lands are not
H possessed of potential values as on the date of the notification to determine
                       G.N. RAO v. 1.AND ACQN. OFFICER                      587

the compensation on yardage basis. It is not in dispute that in a related          A
acquisition in O.P. 361177, the Court determined the compensation @Rs.
32,1100 per acre for the lands in the neighbourhood based upon it the High
Court confirmed as under :
         11
              Keeping that in vie\v, as a result of the above discussion we have
         to hold that the award in O.P. No. 361 of 1977 relied on by the           B
         Land Acquisition Officer rurnishes a proper 'price basis' for arriv-
         ing at the market value of the land in question al the relevant time.
         The learned counsel on both sides accept that the said award was
         not questioned and it became final. But we have to notice that the
         Land Acquisition Officer himself proposed to fix the market value         C
         of the land in question at Rs. 32,000 per acre in view of the fact
         that the land covered by O.P. ·No. 361 of 1977 was further away
         from the developed localities than the land under the present
         acquisition, This is borne out by the Master Plan Ex.B.19 and
         Ex.B.26, which is the relevant Portion of the Master Plan though          D
         both the lands were located in undeveloped area at the relevant
         time and were similarly situated from the point of view of poten-
         tialities, Land covered by 0.P. No. 361of1977 is about one furlong
         away and further to the north of the present land. We are, there-
         fore, inclined to take the view that the market value of the land in
         question should be fixed at Rs. 32,000 per acre."                         E
      Accordingly, the High Court determined the compensation @ Rs.
32,000 per acre.

       It would appear that the Land Acquisition Officer stated in his
evidence that the land of an extent of 200 square yards was sold to a public       F
authority at a rate worked out at Rs. 47 per sq. yd. But, as rightly pointed
out by the High Court, the said document was not made part of the record
nor anyone was examined in proof of the circumstances in which sale came
to be made. Under these circumstances, the High Court rightly was not
inclined to accept that part of the evidence to determine compensation in          G
this case. We do not find any error of any principle of Jaw committed by
the High Court warranting interference.

      The special leave petition is accordingly dismissed.

T.N.A.                                                       Petition dismissed.   H