Holding

The Basic Valuation Register has no statutory basis and cannot be used to determine market value under the Land Acquisition Act; the burden of proving market value rests on the claimant, and the uniform 4% interest rate is valid.

Summary

The appellant owned 18 guntas of land in Adilabad municipality that were acquired under the Land Acquisition Act, 1894. Compensation was initially based on letting value and later enhanced to Rs. 75 per square yard by the reference court. The appellant claimed a market value of Rs. 300 per square yard, relying on the Basic Valuation Register (BVR) used for stamp duty assessment, and sought higher interest. The Supreme Court held that the BVR, maintained solely for stamp duty purposes, has no statutory or evidentiary force for determining market value under Section 23 of the Land Acquisition Act, and Section 47‑A of the Stamp Act does not empower the government to fix such values. The Court reiterated the accepted methods of valuation and placed the burden of proving market value on the claimant. It also affirmed that the uniform interest rate of 4% under the State Amendment Act applies, rejecting any claim of discrimination. Consequently, the appeal was dismissed.

Issues considered

The Basic Valuation Register maintained for stamp duty can be used as evidence to determine market value under the Land Acquisition Act, s.23.
Whether Section 47-A of the Stamp Act, 1899 confers power on the government to determine market value and maintain a Basic Valuation Register for that purpose.
The appropriate method(s) for ascertaining market value of land acquired under the Land Acquisition Act.
Whether the appellant is entitled to a higher rate of interest (6%) on compensation compared to the uniform 4% rate prescribed by the State Amendment Act.

Legislation cited

Indian Stamp Act, 1899s. 47-A
Land Acquisition Act, 1894s. 18, s. 23, s. 24, s. 4(1)
State Amendment Act, 1953 (Andhra Pradesh)s. 33

Subjects

Land acquisitionCompensationMarket valueBasic Valuation RegisterStamp ActSection 47-ABurden of proofInterest rateValuation methods

Judgment

A JAWAJEE NAGNATHAM
v. ·-r-
THE REVENUE DIVISIONAL OFFICER, ADILABAD, AP., ETC.
.....
JANUARY 25, 1994

B [K. RAMASWAMY AND N. VE~l<ATACHALA, JJ.]

Lands Acquisition Act, 1894: S. 23-Acquisition of Land-Compensa-
tion-Matters to be considered in detennination of-Held, Basic valuation ~---
Register maintained for purposes of collecting stamp duty had no evindentiary
c value in that it had no statutory force and it would not be a basis to detennine
market value of lands acquired-Onus is always on claimant to prove prevail-
ing market value.

The Stamp Act, 1899: S. 47-A inserted by Andhra Pradesh Act 22 of
1971-Held, the section confe"ed no express power on government to deter-
D mine market value of lands and to maintain Basic Value Register-The
Register cannot fonn any basis to detennine market value of acquired land
under s. 23 of the Land Acquisition Act, 1894.

Certain land of the appellant-landowner situated in a Municipality
E was acquired under the Land Acquisition Act, 1894. The compensation was
awarded on the basis of letting value. On reference under s. 18 of the Act,
the compensation was enhanced to Rs. 75 per sq. yard. The appellant filed
an appeal in the High Court claiming compensation at the rate of Rs. 300/·
per sq. yard. The claim was dismissed.

F In appeal to this Court, it was contended on behalf of the claimant-
appellant that the High Court erred in dismissing his claim as the ac-
quired land was situated in the commercial area and the Basic Valuation
Register showed that for stamp duty the Revenue authorities fixed the
market value in commercial area at Rs. 300 per sq. yard and since the
G respondents did not produce contra evidence, the Basic Valuation Register
formed foundation to determine the market value of the acquired land at
Rs. 300 per sq. yard.
>-
Dismissing the appeal, this Court

H HELD: 1.1. The High Court rightly held that the Basic Valuation
368
JAWATEE v. DIVISIONAL OFFICER, AP. 369

Register prepared and maintained for the purpose of collecting stamp duty A
had no evidentiary value in that it had no statutory base or force. It cannot
_+ form a foundation to determine the market value mentioned thereunder
in instrument brought for registration, nor would it be a basis to determine
the market value under s. 23 of the Act of the lands acquired. [374-F]

1.2. Section 47-A of the Stamp Act, 1899 enacted by Andhra Prctdesh B
State Legislature, empowering the registering officer to levy stamp duty on
instruments of conveyance etc., conferred no express power on the Govern-
ment to determine the market value of lands prevailing in a particular area
and to maintain Basic Valuation Register for levy of stamp duty for
registration of an instrument. [373-G] C
Jawajee Nagnathan v. Revenue Divisional Officer, Adilabad, A.1.R.
1983 A.P. 155, upheld.

Gulzara Singh & Ors. v. State of Punjab & Ors., [1993] 4 S.C.C. 245,
relied on. D
Mis. Sagar Cements Ltd., Mattampalle v. The State ofAndhra Pradesh,
(1989) 3 A.L.T. 677, P. Shashidhar v. Sub-Registrar, (1989) 3 A.L.T. 677,
Land Acquisition Officer v. Venkateswara Prasad, A.S. No. 880of1980 dated
Nov. 11, 1981 & Vasireddi Bharata Rao & Anr. v. Revenue Divisional Officer,
Guntur, (1992) 1 A.L.T. 591, approved. E
Govt. of A.P. v. Sohan Lal (1988) 2 A.L.T. 306, disapproved.

Director of Survey-cum-LA.O. v.Mohammed Ghouse, (1965) 1 M.L.J.
115, in-applicable.
F
2. In order to determine the market value of the land acquired, the
Court has to take into account one of the three methods, namely, (1)
opinion of experts, (2) the price paid within a reasonable time in bona fide
transactions of purchase of the lands acquired or the lands adjacent to
the lands acquired and possessing similar advantages, and (3) a number
of years purchase of the actual or immediately prospective profits of the G
lands acquired. Generally the second method of valuation is accepted as
the best. Evidence of bona fide sale8 between willing prudent vendor and
--{__ prudent vendee of the lands acquired or situated near about that land
possessing same or similar advantageous feature would furnish basis to
determine market value. [373-C-E] H
370 SUPREME COURT REPORTS (1994] 1 S.C.R.

A Special· Land Acquisition Officer, Bangalore v. Adhinarayan Setty,
A.I.R. 1959 S.C. 429; Tribeni Devi & Ors. v. Collector of Ranchi, [1972) 3
S.C.R. 208 & Periyar and Pareekanni Rubbers Ltd. v. State of Kera/a, relied -+-
on.

3. The burden of proof is always on the claimant to prove, in each
B case the prevailling market value as on the date of notification published
in the State Gazette under s. 4(1) of the Act with reference to the sale deeds
of the same lands or neighbouring lands possessed of same or similar
advantages and features executed between willing vendor and willing ven-
dee or other relevant evidence in the reference court. [375-G-H]
-+ . .
c 4.1. The claim of the appellant that the lands acquired are to be
treated as of commercial area cannot be accepted to be totally correct.
Admittedly the appellant had not prepared nor got approved any lay out
demarcating as sites either for commercial purpose or for residential
purpose. The entire land acquired cannot be treated as capable of being
D sold only for commercial purpose. Besides, the entire land cannot be
earmarked for sites unless some land is set apart under Building Rules
for laying roads. Deduction ought equally to be made for further develop·
ment purposes. The entire land cannot be treated to be possessed of
commercial value. (372-F-H; 373-A]
E
4.2. The State did not file any appeal against the award of the
reference court which itself is a matter gone in favour of appellant. There
is no justification to further enhance the market value. (375-H; 376-A]

S. It cannot be said that the appellant was discriminated in the
F payment of interest at 4% on enhanced market value. No distinction was
made between lands acquired either for public purpose of the Central
Government or the State Goverunent. Besides, s. 33 of the State Amend·
ment Act, 1953 amended the interest payable under the Act and reduced
the rate of interest from 6% to 4% and the same is uniformly being awarded
G for all the acquisitions in the State. [376-B-C]
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1920-21
of 1989.

From the Judgment and Order dated 29.10.1982 of the Andhra
H Pradesh High Court in Appeal No. 44 of 1981 & W.P. No. 6031 of 1979.
JAWAJEE v. DIVISIONALOFFICER,AP. 371

A.K. Ganguli, T.V.S.N. Chari, Nikhil Nayyar and Ms. Promila A
+ Choudhary for the Appellant.

R. Venugopal Reddy and G. Prabhakar for the Respondents.

The following Order of the Court was delivered:
B
1. The appellant is the owner of 18 Guntas ofland, i.e. 2178 sq. yards,
situated in Ward No. 5, Block No. 7 in Adilabad Municipality of Andhra
Pradesh, which was proposed for acquisition under notification issued
+ under s. 4(1) of the Land Acquisition Act and published on April 17, 1975,
for a public purpose. The Land Acquisition Officer awarded compensation
on the basis of letting value. On reference under s. 18, the Addl. District C
Judge, Adilabad in his award and decree announced the market value to
Rs. 75 per sq yard. Not having been satisfied, the appellant filed the appeal
in the High Court and claimed Rs. 300 per sq. yard. The High Court by
the impugned judgment and decree dated 29.10.1982 (A.I.R. 1983 A.P.
155), dismissed the appeal. D
2. Sri A.K. Ganguli, the learned senior counsel for the appellant
contended that the High Court having accepted that the acquired lands
were situated in the heart of the municipal area; the State Bank of
Hyderabad and the Andhra Bank were located on the eastern and western
sides across the roads; Gandhi Chowk Market and Ambedkar Chowk E
Market also existed on the National Highway towards Nagpur each at a
distance of 200 yards from the land; two cinema theatres were situated at
a distance of 50 to 60 yards from the acquired site; three co-operative
consumer's stores were situated at a short distance of 10 years from the
acquired land; the Basic Valuation register showed that for stamp duty the F
Revenue authorities had fixed the market value in commercial area at Rs.
300 (on complaints being reduced to Rs. 250) and for residential area Rs.
75 per sq. yard, it should have seen that the land had a very high market
value. The revenue authorities themselves having determined market value
in that area at Rs. 300 per sq. yard for purposes of stamp duty, unless the
respondent produced contra evidence, which was not done, the Basic G
Valuation Register formed foundation to determine the market value of
acquired land at Rs. 300. The fixation of market value at Rs. 75 per sq.
yard was unjust and arbitrary. It is also contended that the appellant is
entitled to interest at 6% under the Act. The State Act has no application
to and the owner cannot be discriminated in payment only at the rate of H
372 SUPREME COURT REPORTS [1994) 1 S.C.R.

A 4%, while other land acquired for Central Govt. would get interest at the
rate of 6%.

3. Having given anxious consideration to the contentions we find
them to be without force. Though the district Court fixed the market value
at the rate of Rs. 75 per sq. yard, the State did not file any cross objection
B or appeal. So the need for the High Court to go into the question whether
fixation of the market value at Rs. 75 per sq. yard was high did not arise.
The High Court held that the post notification sale deeds were not admis-
sible as none of the persons connected with them were examined to
establish the genuineness of the sales or of similarity of the lands acquired
c and those covered in the sale transactions. It also rejected the agreements
of sales finding them to be those fabricated to inflate the market value. We
cannot find fault with the approach made by the High Court in the facts
and circumstances of the case. The sales claimed to be comparable were
rightly not acted upon.
D
4. The High Court found that Basic Valuation Register had no
evidenciary value, in that it had no statutory basis. Therefore, the entries
in the Basic Valuation Register cannot form the basis to enhance the
market value. The contention of Sri Ganguli, as stated earlier was that the
Basic Valuation Register, prepared in official capacity by Revenue Depart-
E ment having been acted upon to collect stamp duty and registration charges
at Rs. 300 per sq. yard for commercial use, the government cannot ask the
court to adopt different standards to award market value under section
23(1). Having regard to the fact that the lands are situated in commercial
area of the busy town, the appellant is entitled to the market value at Rs.
F 300 per sq. yard. Firstly, the contention that the lands are to be treated as
of commercial area cannot be accepted to be totally correct. Admittedly,
the appellant had not prepared nor got approved any lay out demarcating
as sites either for commercial purpose or for residential purpose. The
entire extent of 2178 sq. yard cannot be treated as capable of being sold
only for comme1 ;;ial purpose. May be the lands abutting the main road
G were capable of being sold for commercial purpose. But the entire land,
unless there is proof of lay out and demarcation for commercial purpose,
cannot be treated as and available for commercial purpose. In addition the
entire land cannot be earmarked for sites unless some land is set apart
under the Building Rules for laying roads. Deduction ought equally to be
H made for further developmental purposes. The entire land cannot be
~..

JAWATEE v. DIVISIONAL OFFICER, AP. 373

+ treated to be possessed of commercial value. Under s. 24 clause sixty of A
the Act, in fact, the future potential use is not relevant but decided cases
show that it may be a factor to be kept in view in an appropriate case for
determining the market value. In this case, there is no evidence on record
except the Basic Valuation Register admittedly maintained by the
authorities.
B
5. The question, therefore, is whether the Basic Valuation Registra-
tion is evidence to determine the market value. This court in Special Land
-+ Acquisition Officer, Bangalore v. T. Adhinarayan Setty, A.I.R. 1959 S.C. 429,
in paragraph 9 held that the function of the Court in awarding compensa-
tion under the Act is to ascertain the market value of the land at the date C
of the notification under s. 4(1). The methods of valuation may de (1)
opinion of experts; (2) the price paid within a reasonable time in bona fide
transactions of purchase of the lands acquired or the lands adjacent to the
lands acquired and possessing similar advantages; and (3) a number of
years purchase of the actual or immediately prospective profits of the lands D
acquired. Same was the view in Tribeni Devi & Ors. v. Collector of Ranchi,
[1972) 3 S.C.R. 208. It was reiterated in catena of decisions, vide, Periyer
and Pareekanni Rubbers Ltd. v. State of Kera/a, (1991) 4 S.C.C. 195.
Therefore, it is settled law that in determining the market value, the Court
has to take account either one or the other three methods to determine
market value of the lands appropriate on the facts of a given case to E
determine the market value. Generally the second method of valuation is
accepted as the best. The question, therefore, is whether the Basic Valua-
tion Register would form foundation to determine the market value. The
Indian Stamp Act, 1899 provides the power to prescribe stamp duty on
instruments, etc. Entry 44 of List III. Concurrent List, of the Seventh F
Schedule read with Art. 254 of the Constitution empowers the State
Legislature to amend the Indian Stamp Act, 1899. In exercise thereof all
the State Legislatures including the legislature of Andhra Pradesh
amended the Act and enacted s. 47-A empowering the registering officer
to levy Stamp Duty on instruments of conveyance, etc, if the Registering
Officer has reason to believe that the market value of the property, covered G
by the conveyance, excha-ge, gift, release of right or settlement, has not
been truly set forth in the instrument, he may refuse registering such
instrument and refer the same to the Collector for determination of the
market value of such property and the proper duty payable thereon. On
receipt of such opinion, he may call upon the vendor as per the Rules H
374 SUPREME COURT REPORTS [1994] 1 S.C.R.

A prescribed, to pay the additional duty thereon. If the vendor is dissatisfied,
he has been given the right to file an appeal and further getting reference
+
made to the High Court for decision in that behalf. Section 47A would thus
clearly show that the exercise of the power thereunder is with reference to
a particular land covered by the instrument brought for registration. When
he has reasons to believe it to be under valued, he should get verified
B
whether the market value was truly reflected in the instrument for the
purpose of stamp duty; the Collector on reference could determine the
same on the basis of the prevailing market value. Section 47A conferred
no express power to the government to determine the market value of the
lands prevailing in a particular area, village, block, District or the region
-+-
C and to maintain Basic Valuation Register for levy of stamp duty for
Registration of an instrument, etc. No other statutory provision or rule
having statutory force has been brought to our notice in support thereof.
Whether an instrument is liable for higher stamp duty on the basis of
valuation maintained in the Basic valuation Register, came up for con-
D sideration in M/s. Sagar Cements Ltd., Mattampalle v. The State of Andhra
Pradesh, (1989) 3 A.L.T. 677. B.P. Jeevan Reddy, J., as he than was,
considered the question and held that the government bas unilaterally fixed·
the valuation of the lands, the Basic Valuation Register had no statutory
foundation and therefore it does not bind the parties. Neither the Registrar
-
E nor the vendor is bound by it. The market value of the land for proper
stamp duty has to be determined as per the law under s. 47A itself. That
view was followed by another learned single Judge in P. Shashidhar v.
Sub-Registrar, (1989) 3 A.L.T. 677. It is, therefore, clear that the Basic
Valuation Register prepared and maintained for the purpose of collecting
stamp duty has no statutory base or force. It cannot form a foundation to
F determine the mark.et value mentioned thereunder in instrument brought
for Registration. Equally it would not be a basis to determine the market
value under section 23 of the Act, the lands acquired in that area or town
or the locality or the Taluk etc. Evidence of bona fide sales between willing
prudent vendcr and prudent vendee of the lands acquired or situated near
G about that land possessing same or similar advantageous features would
furnish basis to determine market value. The Division Bench followed, in
support of its view a decision of another division bench in Land Acquisition
Officer v. Venkateswara Prasad, A.S. No. 880 of 1980 dated Nov. 11, 1981,
which also decided that Basic Valuation Register cannot be relied on to
H determine the market value. It would appear that in Govt. Of Andhra
JAWAJEE v. DNISIONALOFFICER,AP. 375

Pradesh v. Sohan Lal, (1988) 2 A.L.T. 306, a division bench of that High A
Court, without noticing these two binding decisions, held that the Basic
Valuation Register would form foundation to determine the market value
and directed to determine the compensation on that basis. The entire
controversy was considered by yet another division bench in Vasireddi
Bharata Rao & Anr. v. Revenue Divisional Officer, Guntur, (1992) 1 A.L.T. B
591. The Division Bench, after considering the case law disagreeing with
Roshan Lal's view as per incurium, also reiterated that the Basic Valuation
Register maintained by the registering authority has no statutory founda-
+ tion to determine market value and cannot form the base under section
23(1) to determine the market value. This Court in Gulzara Singh & Ors.
v. State of Punjab & Ors., [1993] 4 S.C.C. 245, held that mutation entries of C
the land transactions in the revenue records are not evidence unless the
parties to the transactions have been examined in proof of documents. In
Director of Survey-cum-LA.a. v. Mohammed Ghouse, (1965) 1 M.L.J. 115,
relied on by Mr. Ganguli, the Division Bench of Madras High Court,
relying upon the instructions issued by the Government to determine the D
market value for the purpose of registration of the instrument under
section 47-A, held that it would form basis to determine the market value
under s. 23 in an appropriate case, subject to proof of the market value.
What were the instructions issued by the Government and whether they
had any statutory foundation, have not been stated by the Division Bench. E
If the broad proposition of law that under s. 47-A of Stamp Act such
instructions could be issued, as contended for the appellant herein, as
appears to be the view of the High Court, it is not correct law. As we have
already noted, Section 47-A being local amendment, made by each State
Legislature did not find any such statutory basis. Like Andhra Pradesh Act, F
Tamil Nadu Act are also referable to transactions inter vivos and not as
general guidelines. If they are based on evidence inter parties it would be
consistent with Section 47-A. Accordingly we hold that the basic value of
registration has no statutory base. It cannot form any basis to determine
the market value of the acquired lands under s. 23 of the Act. The burden
of proof is always on the claimant to prove, in each case the prevailing G
market value as on the date of notification published in the State Gazette
under s. 4(1) of the Act with reference to the sale deeds of the same lands
or neighbours lands possessed of same or similar advantages and features
executed between willing vendor and ·willing vendee or other relevant
evidence in the reference court. The State did not file any appeal against H
376 SUPREME COURT REPORTS [1994) 1 S.C.R.

A the award of the reference court which itself is a matter gone in favour of
appellant. We do not find any justification to further enhance the market +
value.

6. The question of discrimination in the-payment of interest at 4%
on enhanced market value also has no fo_ll!ldation. No Doubt, the reasons
B given by the Division Bench to deny the claim may not be sound but the
fact remains that no distinction was made between lands acquired either
for public purpose by the Central Government or the State Govemm<!nt.
Section 33 of the State Amendment Act, 1953 amended the interest payable +
under the Act and reduced the rate of interest from 6% to 4% uniformly
C being awarded for all the acquisitions in the State of Andhra Pradesh.
Under these circumstances, the view of the High Court in that behalf,
though the for different reasons, is correct and accordingly it is upheld.
The appeals are accordingly dismissed. But in the circumstances parties
are directed to bear their own costs.

R.P. Appeals dismissed.