Holding

Compensation must be based on admissible evidence of comparable sales, and while mutation records are inadmissible, the lands’ potential for future residential/commercial development justifies a higher market value of Rs.42,000 per acre for Abi land and Rs.38,000 per acre for Barani land, with solatium and interest awarded.

Summary

The Union Territory of Chandigarh acquired 70.09 acres of land in Manimajra for setting up brick kilns under the Land Acquisition Act, 1894. The Collector fixed compensation at Rs.23,600 per acre for cultivated (Abi) land, Rs.17,000 for rain‑fed (Barani) land and Rs.12,000 for waste (ghair munkin) land, which the Civil Court later enhanced to Rs.33,600 per acre for Abi land only, adding solatium and interest. The appellants argued that the lands possessed potential residential and commercial value and that comparable sale transactions and mutation records showed much higher market values, seeking parity with other acquisitions. The Supreme Court held that mutation entries and unexamined sale documents are inadmissible; however, it recognised the lands’ potential future development and fixed a fair market value of Rs.42,000 per acre for Abi land and Rs.38,000 for Barani land, confirming Rs.12,000 for waste land, and awarded solatium and interest. The Court partially allowed the appeals, adjusting compensation accordingly.

Issues considered

The admissibility of mutation entries and unexamined sale documents as evidence of market value under the Land Acquisition Act.
Whether lands acquired for brick kilns, though not immediately usable for residential/commercial purposes, possess potential future value warranting higher compensation.
Whether the classification of land (Abi, Barani, ghair munkin) should affect the determination of market value and compensation.
Whether solatium and interest should be awarded on the enhanced market value under the provisions of the Act.

Legislation cited

Land Acquisition Act, 1894s. 18, s. 23, s. 32, s. 4, s. 5(1)

Subjects

land acquisitioncompensationmarket valuepotential valuesolatiuminterestmutation entrieseminent domaincomparative sale

Judgment

- INDER SINGH AND ORS. ETC. ETC.
v.
A

UNION OF INDIA ETC. ~C.

APRIL 27, 1993
B
[K. RAMASWAMY AND R.M. SAHAIJJ.]

Land Acquisition Act, 1894:
Sections 4, 18, 32-Acquisition of land-Compensation-Payment
of-Potentional value for future development'-Comparable sale
..... transaction-Consideration of-Determination and payment of c
compensation-Ordered.

The Respondents acquired some lands for setting up Brick Kilns. The
lands consisted of Abi (cultivated land), Barani (rainfed land) and ghair
munkin (waste land) and the Collector fixed the compensation @ at Rs.
23,600, Rs. 17,000 and Rs. 12,000 per acre of the respective lands.
D

On a reference the Civil Court enhanced the compensation to Rs.33,600
per acre for Abi lands. No enhancement was allowed in respect of the other
categories ofland. It however allowed solatium at 15 % and interest at 6 % p.a.
on the enhanced compensation. On appeal, a Single Judge of the High Court E
confirmed the same. These appeals were filed againstthesaid Judgment of the
High Court.

The appellants contended that the acquired lands had the potential
value for residential and commercial purposes and there was no justification
for classification of the lands and all the lands shall be treated at party in F
determination of market value; that in a similar case, the market value was
enhanced to Rs. 75,000 per acre and in view of the fact that certain mutation
entries showed a market value of similar lands ranging from Rs. 1,16,000 to
Rs. 1,60,000, per acre the appellants claimed for compensation of adeast at
Rs. 75,000 per acre.
G

On behalf of the Respondents it was contended that the mutation record
was not admissible as no one connected with the sale transactions was
examined to prove the documents, the ground for sales, comparative advan-
tages and their respective situation; that the lands possessed comparable or
better amenities and wheiher the lands are very near to the lands under H
371
372 SUPREME COURT REPORTS [1993] 3 S.C.R.

A acquisition. The compensation awarded by the Collector at the rate of Rs.
15,525 per acre was upheld by the Reference Court, and this ottered ·a
reasonable base to fix the market value of the lands under acquisition.

Partly allowing the appeals, this Court,

B
HELD: 1. Neither the appellants nor the Land Acquisition Officer had
examined. witnesses in proof of the sale transactions referred in the mutation
entries. It is settled law that a claimant is entitled to just and reasonable
compensation under s. 23, To determine the market value of the lands, it is
necessary to examine witnesses to prove the prevailing prices as on the date
c of publication of the notification under s. 4(1). The sale transaction of the same
Lands or sales oflands situated in the neighbourhood possessed of same or
similar advantages would furnish as evidence of comparable sales. It would
be possible to have reliable evidence when sale transactions are proved by
either the vendor or the vendee and if either of them was not available, the
attesting witness who had personal knowledge of the transactions is to be
D \
examined by producing either the original sale deed or certified copies thereof }
I
as evidence. Since at the relevant time it was not being insisted upon, none of \
the witnesses were called to prove the sale deeds or to prove the sale \----
tr_ansactions. Thus, the documentary evidence of sale transactions or the
mutation entries on either side are clearly not admissible and therefore, they \
cannot be looked into, and are accordingly excluded from consideration.
E (375-GH, 376 A-E)

2. The situation of the lands clearly shows that the lands are situated very
close to developed Chandigarh planned city and are very near to Sukha Lake

F
and the railway track. They are situated within the freezed zone for future
potential development of the city. Though the acquisition was for establish-
ment of Brick Kilns, by its very nature the lands may not immediately be
r
capable of being used for residentiat or commercihl purposes, but certainly
possessed of potential value for future development as residential and com-
mercial purposes. There is a distinction between the lands acquired for Motor
Market or Mansa Housing Complex on the one hand and the lands under r
G acquisition on the other hand, though the lands are Abi lands going by the
situation of the lands, the market value of the land acquired for motor market
do not render any assistance as a comparable price. This would be of
assistance to assess a fair and reasonable compensation in fixing the market
value though an amount of guess work is involved. This Court is conscious of
the fact that it should not be founded on feats of imagination hedged with
H
INDER SINGH v. U.0.1. [K. RAMASWAMY, J.] 373

-- undue emphasis of compulsory deprivation of the possession of the lands of A
the appellant. For the exercise of State's power of eminent domain statutory
solatium is the premium the State pays. Therefore, the approach should be
pragmatic to recompense the appellants to secure alternative lands or to
invest in profitable business for rehabilitation. It is seen that the Reference
Court awarded a sum of Rs. 33,600 per acre to Abi land. No doubt there is a
steady rise in prices of lands. Considering the totality of the_ facts and B
circumstances, the market value @Rs. 42,000 per acre would be just and fair
for Abi lands and at Rs. 38,000 per acre for Barani lands. The market value -
of ghair munkin land at Rs. 12,000 per acre awarded by the Civil Court is
confirmed. The appellants are entitled to solatium and interest on the
inhanced market value at 15 per cent and 6 per cent respectively from the date
of taking possession till the date of payment as the.award and the order of the
c
Civil Court are prior _to the periods mentioned in the Amendment Act 1984
came into force, (376G,H, 371 A-F))

CIVIL APPELLATE JURISDICTION: Civil Appeal N!iJlS:.·335-342/1982.
D
From the Judgment and Order dated 18.8. 1981 of the Punjab and Haryana
High Court in Regular First Appeal Nos. 2605, 2604, 2606, 2610,306, 308, 10 and
11of1980.

D.V. Sehgal, LR. Singh and Yunus Malik for the Appellants.
E

Ranjit Kumar and G.K. Bansal (NP) for the Respondents.

The Judgment of the Court was delivered by

K. RAMASWAMY. J.: By Notification published in the Haryana State F
Gazette on October 12, 1976, under section 4(1) of Land Acquisition Act 1 0,f 1894
for short 'the Act', the respondent Union Territory ofCl'iandigarh acquired a total
extent of 70.09 acres of land situated in Manimajra near Chandigarh for a public
purpose, namely, to set up Brick Kilns therein. The lands comprised in different
Khasra numbers within H.B. No. 375, out of which 63.09 acres are Abi cultivated
G
lands, the rest are Barani (rainfed land) and, ghair munkin (waste land) bouldars,
trenches etc. By award dated January 11, 1977, the Collectoflixed a sum of Rs.
23,600 as market value of Abi, Rs. 17,()()()per acre to Barani and Rs. 12,000 to
Ghait Munkin lands. On reference under- s. 18, the Civil Court enhanced the
compensation to Rs. 33,600 per acre to Abi lands -and no enhancement to other

-
categories with solatium at 15 per cent and interest at 6 per cent per annum on the H
374 SLTPREME COURT REPORTS [1993J 3 s.c.R.

A enhanced compensation from tl)e date of taking possession till date of payment.
On appeal the learned Single Judge in R.F.A. No. 2605 of 1980 etc, by judgment
---
dated August 18, 1981 confirmed the same. Thus these appeals by special leave.
As common questions of law arise for decision, they are disposed of by common
judgment.

B Appellants' contenttons is that the acquired lands possessed of potential
value for residential and commercial purposes and there is no justification for
Classification of the lands and all the lands are entitled to parity to determine the
market value. By notification dated June 30, 1976 in the same village under the
same H.B. No. 375, 54.37 acres were acquired for construction of Motor Market
C Complex. The Collector and the Civil Court awarded the same market values as
were fixed in these appeals but the learned Single judge denied parity of market \
value to these lands while enhancing the market value at Rs. 75,000per acre to the ''
similar lands in belting No. 2 and awarded @Rs. 3, 72,200 to the lands abutting
the main road upto a depth of 140feetin other case. Therein the Single Judge relied
upon Ex. P28 of the year 1972 in which 17 marlas of land was sold @Rs. 75,000
D per acre, Having relied upon the same and having enhanced the market value, the
same yardstick should have. been applied in awarding market value to the lands
under acquisition. The learned counsel also placed strong reliance on 6 mutation
entries which would show that the market value of the lands ranges between Rs.
1,16,000 to 1,60,000 per acre and •the appellants, therefore, are entitled to
compensation at least @ Rs. 75,000 M claimed by them. He also contended that
E having found that the lands are possessed of potential value being similar to the
lands in other appeal, the appellants are entitled to parity in determination of the
market value as well. The Haryana Govt, acquired by notification dated January
8, 1971 vast extent oflands in J udian Village for Mansa Housing and Commercial
Complex and thereunder Abiflll'igated lands were awarded at a sum of Rs. 28,800
per acre which was confirmed by the High Court. After five years the notification
F ' .
was issued on October 12, 1976, the Court should have taken note of steady rise
in prices and have suitably enhanced the market value. Since no one was appearing
for the respondent, we sent for Mr. Ranjit Kumar, the previous standing counsel
for the Union Territory, Chandigarh and requested him to assist the court.
Accordingly he has meticulously analysed the entire evidence and rendered
G valuable assistance. He contended that the lands are situated beyond railway line
on North-West and 1-1/2 k.m. to the motor market on the other side of the road.
The lands are nearer to Sukhna Choe (lake) at a distance of one furlong. The
mutation record is not admissible as none, connected with the sale transactions,
were examined to prove the documents; the grounds for sales, comparative --....
advantages and their respective situation. The motor market ~s situated • in a
H developed area on the Eastern side of the road and .the lands in these cases are
INDER SINGH v. U.0.1. [K. RAMASWAMY, J.] 375

located away from those lands. Shri Ranjit also 9ontended that lands in Judian A
Village for Mansa Housing and Commercial. Complex were nearer to abadi
possessing better amenities and they do not afford any comparable grounds. He
contended that the lands for canalisation of Sukhna Choe was acquired by
notification dated March 21, 1972 and the Reference Court upheld the award of
the Collector at Rs. 15,525 for ~bi lands which was confirmed by the High Court.
The location being very near to the lands tinder requisition, they offer reasonable B
base to fix market value. Notification was issued under s.6 of the Punjab New

, Capital (Perefery) Control Act, 1952, freezing development of the lands situated
within a radious of 10 miles from Chandigarh boundary for any residential and
commercial purposes. Therefore, they are not possessed of any potential value.
The learned Judge on the same day decided both the cases upholding the award of C
the Civil Court in these cases while enhancing 'the market value in motor market
cases relied on by the appellants. He was aware of the location and differential
value bet~eentwo types of land. Therefore, he was not inclined to enhance the
r market value of the land under acquisition.
'
The first question that arises for consideration is whether the High Court has. D

,
cominitted any legal error in affirming the market value determined by the
Reference Court. The Dist, Judge, Chandigarh in L.P.J. No. 105nO and batch,
found that the total extent of the land acquired is 70.09 acres, 560 Kanai 15 maria,
out of which 63. 91 (511 Kanai) 6 Marla _3!~Abiland and 4.22 (33 Kanai 15 Marla)
is Barani land and the rest are Gbaii' Munkin lands. It is admitted by the witnesses
that the acquired land is _nearer to the railway track and also situated at a distance E
of 1-112 k.m. from timber and motor market. They are situated in wide area with
the population of about 3000-3500. There are about 290. shops situated in
Manimazra town. The acquired land is towards north-western side of Manimazra.
The railway line is 2 to 3 furlong from Manimaira on the north-western side. They
are also situated near the boundary of Chandigarh and one furlong from Sukhna
Choe. It was also adrilitted that part of the land is situated-ffi Sector 26. Thus it could
F·
be seen that the lands are situated very near to Chandigarh.

Neither the appellants nor the Land Acquisition Officer had examined
witnesses in proof of the sale transactions referred in mutation entries Ex. P4to pg
on behalf of the appellants and R l and R2 on behalf of the respondent. It is settled G
law that claimant is entitled to just and reasonable compensation and under s. 23
to determine the market-value of the lands the prevailing prices as on the date of
the publication of the notification under s. 4(1), the sale transaction of the same
lands or sales oflands situated in the neighbourhood would furnish as evidence of
comparable silles. The price which a hypothetical willing vendor might reasonably
expects to obtain from a willing purchaser would form the basis to fix the market H
376 SUPREME COURT REPORTS [1993) 3 S.C.R.

A value. It would be possible to have reliable evidence when sale transactions are
proved by either the vendor or the vendee and if either of them was not available,
the attesting witness who had personal knowledge of the transaction is to be
examined by producing either the original sale deed or certified copies thereof as
evidence. Under s. 5 lA of the Act as amended in 1984 the certified copies have.
been permitted to be brought on record as evidence of sale transaction recorded
B therein. The examination of the witnesses is to find that the sale transactions are
bonafide and genuine transactions between willing vendor and willing vendee as
reasonable prudent men and the price mentioned is not throw away price at arms
length or depressed sales or brought into existence to inflate market value-qf the
lands under acquisition and the sales are accommodating one. Equally it must be
brought on record the comparative nature of the lands covered under the sale deed
c and the acquired lands whether adjacent or actual distance or possessed of similar
advantages and whether transactions themselves are genuine and bonafide trans-
actions. This proposition of law, since settled law, in fqimess, has not been
disputed across the bar. The contention is that at the relevan't time it was not being
insisted upon. Therefore, none of the witnesses were called to prove the sale deeds. ;,
or to prove the sale transactions. Therefore, when evidence of potential value is
. available, the same could be considered. We find merit iri the contention. At one
time we thought of remanding the cases but we find that it would be needless
prologation and the complexion on ground by now would have been completely
.changed. In view of the above settled legal position and the circumstances, the
documentary evidence of sale transactions or in the mutation entries on either side
E are clearly not admissible and therefore, they cannot be looked into, and are
accordingly excluded from consideration.

The only'question, therefore, is whether the lands are possessed of potential
value and whether the same treatment couid be meted out to Abi and Sarani lands.
Ghair Munkin land stands on a different footing and, therefore, they cannot be
F
equated with the Abi and Barani lands. The situation of the lands as extracted here
in before clearly shows that the lands are situated very close to developed
Chandigarh planned city and are very near to Sukhna Lake and are also nearer to
railway track. They are situated within the freezed zone for future potential
development of the city. Thereby, it is clear that though the acquisition was for
G establishment of Brick Kilns, by its very nature may not immediately be capable
of being t1sed for residential or commercial purposes, but certainly possessed of
potential value for future development as residential and commercial purposes.
Then what would be the reasonable market value prevailing as on the date of
notification. As rightly contended by Shri Ranjit Kumar that there is a distinction
between the lands acquired for motor market or Mansa Housing Complex on one
H ·hand and the lands under acquisition on the other hand, though the lands are Abi
INDER SINGH v. U.O.I. [K. RAMASWAMY, J.] 377

lands. The acquired lands are situated on the western side ofManimazra Panchkula A
road and the motor market was situated on the other side of the road. Therefore,
· the market value of the land acquired for motor market do not render any assistance
as comparable prices. Obviously for that reason the same learned Single Judge
while deciding both the appeals on the same day declined to enhance the market
value to these lands while he awarded to lands in 2nd belt at Rs. 75,000 per acre.
We have no information whether any appeal was filed against that judgment. But B
certainly the facts of these cases would assist us to assess a fair and reasonable
compensation in fixing the market value though an amount of guess work is
involved. We are conscious of the fact that it should not be founded on feats of
imagination hedged with undue emphasis of compulsory deprivation of the
possessi~n of the land of the appellants, for the exercise of State's power of
eminent domain, statutory solatium is the premium the state pays. Therefore, the
c
approach should be pragmatic to recompense the appellants to secure alternative
lands or to invest in profitable business for rehabilitation, It is seen that the
Reference Court awarded asumofRs.33,600per acre to Abi land. There is a steady
rise in prices as reflected in the judgment in the other appeals relied on by the
learned counsel for appellants. The High Court also recorded a finding in that D
behalf in those appeals. The lands are situated in the same H.B. No. 375, though
at different places and distance having future potential development. Considering
the totality of the facts and circumstances we find that market value @ Rs. 42,000
per acre would be just and fair. This value should be for Abi and for Barani lands
at Rs. 38,000 per acre and the market value to ghair munkin land at Rs. 12,000 per
acre awarded by the Civil Court is confirmed. The appellants are entitled to E
Solatium and interest on the enhanced market value at 15 per cent and 6 per cent
respectively from the date of taking possession till the date of payment as the award
and the order of the Civil Court are prior to the periods mentioned in the
Amendment Act 1984 came into force. In the circumstances parties are directed
to bear their own costs.

G.N. Appeals PartJy allowed.

-