Holding

The Supreme Court held that FCI could appeal under Section 54 and that the compensation should be reduced to Rs.80,000 per acre as the earlier award was not supported by proper valuation principles.

Summary

The Punjab government acquired about 50 acres of land for the Food Corporation of India (FCI) and the District Collector awarded Rs.30,000 per acre. Both the landowners and FCI sought references under Section 18 of the Land Acquisition Act, 1894; the reference court barred FCI’s reference but fixed compensation at Rs.1,20,000 per acre based on selected sale comparables. The landowners appealed for higher compensation while FCI appealed for a reduction, and the Punjab and Haryana High Court upheld the Rs.1,20,000 rate. The Supreme Court examined whether FCI could appeal under Section 54 despite the bar on references and whether the appellate court could interfere with the award. It held that FCI, as a keen contestant, could appeal under Section 54 and that the award of Rs.1,20,000 per acre was not justified, directing a reduction to Rs.80,000 per acre. Consequently, FCI’s appeals were allowed and the landowners’ appeals dismissed.

Issues considered

Whether the Food Corporation of India, barred from filing a reference under Section 18 by the proviso to Section 50(2), could file an appeal under Section 54 of the Land Acquisition Act, 1894.
Whether the Supreme Court can interfere with the award of compensation and on what grounds such interference is permissible.
How the market value of the acquired land should be determined – which sale transactions are relevant and how to adjust for location, size and timing.
Whether the compensation of Rs.1,20,000 per acre awarded by the lower courts was excessive and should be reduced.

Legislation cited

Code of Civil Procedure, 1908s. 110
Constitution of Indias. 136
Land Acquisition Act, 1894s. 15, s. 18, s. 23, s. 24, s. 25, s. 4, s. 50, s. 54, s. 6

Subjects

Land acquisitionCompensationMarket value determinationSection 18 referenceSection 54 appealFood Corporation of IndiaSupreme Court valuationPublic purpose

Judgment

FOOD CORPORATION OF INDIA THROUGH ITS DISTRICT A
MANAGER, FARIDKOT, PUNJAB, ETC. ETC.
v.
MAKHAN SINGH AND ANR. ETC. ETC.

APRIL 21,1992
B
[MADAN MOHAN PUNCHHI ANDS. C. AGRAWAL, JJ.]

Land Acquisition Act, 1894 :

Sections 4,6,ll,15,18,23,24,25,50 and 54-Land acquisition for Com- C
pany (Food Corporation of India)-Award-Reference court holding
company's reference barred under Section 50(2)--Reference of claimants--
Company keen contestant-Compensation enhanced-Appeals by Com-
pany-Whether maintainable.

Compensation-Detennination of-Factors for consideration. D

Constitution of India, 1950:

Article 136-Land-Acquisition of-Award-Reference court enhancing
compensation-High Court upholding enhancement but on different E
gr_ounds-Supreme Court-When can inteifere and modify compensation.

The State of Punjab acquired for the Food Corporation of India
(f.c.I.), land measuting a little over 50 acres situated in the revenue estate
of ~illage Danewala near Malout town in District Faridkot. Notifications
under sections 4 and 6 of the Land Acquisition Act, 1894 were issued on F
20.12.1977. The District Collector awarded compensation at the rate of
Rs.30,000 per acre and below, according to the quality ofland. Both, the land
owners and the F.C.I., moved for reference under section 18 of the Act.

The reference· court held the references by the F.C.I. barred under
the proviso to section 50(2) of the Act. As regards the references of the G
land owners, the court relied on two instances of sale, Ext.A-23 dated
6.6.1979 at the rate of Rs.1.20,000 per acre and Ext.A-16 dated 30.6.1981 at
the rate of Rs.2,40,000 per acre. The court considered the sale Ext.A-23
closer in time and situation to the land acquired, and fixed the compensa-
tion at the uniform rate of Rs.1,20,000 per acre. It also held that the two H
615.
616 SUPREME COURT REPORTS [1992] 2 S.C.R.

A sale instances Exts.A-16 and A-23 revealed the average price of Rs.1,80,000
per acre and since those transactions took place after the notification
under s.4, 1/3 of the average price was to be deducted towards roads and
parks, and thus market value would again come to Rs.1,20,000 per acre. It
also awarded 30% solatium and statutory interest.

B Two sets of appeals - one by the claimant for enhancement of
compensation and the other by F.C.I. for reduction of compensation - were
filed before the High Court. The Single Judge dismissed all the appeals
and affirmed the compensation awarde~ by the court below. He concluded
that since the land under sale instance Ext.A-24 at the rate of Rs.1,40,000
c had a better access, the compensation for the land acquired was rightly
fixed at the rate of Rs.1,20,000 per acre. Consequent Letters Patent Ap-
peals by the F.C.I. and the land owners were also dismissed by the Division
Bench. It relied on sale instances Ex.A-11 dated 18.12.1978 at the rate of
Rs.96,800 per acre and Ext. A-23 dated 6.6.1979 at the rate of Rs.1,20,000
per acre, and upheld the compensation awarded by" the courts below. The
D t~.C.I. and the claimants further appealed to this Court by special leave.
The land owners, besides challenging the judgments of the courts
below on merits, also raised a preliminary objection to maintainability of
the appeals by F .C.I. It was contended that in view of proviso to s.50(2) of
E the Land Acquisition Act, which debars the local authority or. company
from demanding reference under s.18, the F.C.I. could not tile appeals
against the award of the court.

Allowing the appeals of the F.C.I. and dismissing those of the land
owners, this Court.
F
HELD: 1.1. Food Corporation of India was a keen contestant before
the reference court. Having suffered the award from that court, it had the
right to file an appeal to the High Court under s.54 of the Land Acquisition
Act, 1894. (p. 622 CJ
G 1.2. Limitation on the right of the F.C.I. to ask for a reference under
s.18 only meant that it could not se~k reduction of <;o~pensation as
awarded by the (:ollector because it was an offer by the State. Section.25
is also a pointer to the effect that comp~nsation can in no event be less
than the amount awarded by the , ~ollector. Conversely, subject to
H provisions of s.25, there being no bar for enhancement of compensation
FOOD CORPN. v. MAKHJ\N SINGH 617

from the sum awarded by the Collector, the appeals of the F.C.I., in the A
very nature of things, attacked the amount awarded by the court over and.
above the amount awarded by the Collector. [p. 622 D-E]

1.3. In the references sought by the land owners, they themselves
impleaded the F.C.I. and the State of Punjab as contesting parties. No
objection was made before the High Court with regard to maintainability B
of appeals referred by the F.C.I. Besides, in presence of the power of this
Court to permit any person to appeal, as envisaged by Article 136 of the
Constitution, the objection cannot be allowed to be raised for the first time
at such a belated stage. [pp. 622 C; F-G]

2.1. This Court as the last court of appeal, will ordinarily not ·
c
interfere in an award granting compensation unless there is something to
show not merely that on the balance of evidence it is possible to reach a
different conclusion, but that the judgment cannot be supported by reason
of a wrong application of principle or because some important point
affecting valuation has been over-looked or misapplied. Besides, generally D
speaking, the appellate court interferes not when the judgment under
appeal is not right but only when it is shown to be wrong. [p. 627 A-BJ

The Dollar company, Madras v. Collector of Madras, (1975) 2 S.C.C.
730, relied on.
E
2.2. In the instant case, important points affecting valuation had been
overlooked or misapplied in arriving at and sticking to the rate of compen-
sation at Rs.1,20,000 per acre which would require a correction. [p. 629 CJ

2.3. While determining the amount of compensation, market value
of the land on the date of notification under s.4 must be considered. Court F
should not treat at par land situated on the frontage having special
advantage and the land situated in the interior undeveloped area nor
should they compare smaller plots fet~~ing better price with large tracts
of land. Somewhere in the process, where difficulties crop up, the courts
employ the rule of thumb, since compensation has to be assessed and arms G
cannot be raised in despair. [pp. 621 C-E; 627 CJ

Periyar and Pareekanni Rubbers Ltd v. State of Kera/a, A.l.R. 1990
S.C. 2192, relied on. ·

2.4. Out of the three sale instance Exts.A-11, A-16 and A-23, chosen H
618 SUPREME COURT REPORTS [1992) 2 S.C.R.

A at one stage or the other by the courts below for consideration none
exceeded 1/8 of an acre. These plots are nearer to Malout town and are
facing G.T. Road. [pp. 623 E; 627 D-F]

2.5. Sale Ext.A-16 took places about 3-1/2 y~rs after the date of
notification. It, having been discarded at both stages before the High Court
B and being used by the reference court only as a supporting material to grant
compensation at the rate of Rs.1,20,000 per acre on the basis of sale Ext.A-
23, should be totally ruled out from consideration because it was too distant
in point of ti.me. Having disc~rded the same, the supporting foundation to
maintain sale price at the rate of Rs.1,20,000 per acre either on the basis of
c Ext.A-23 or Ext.A-24, become shaky and open to question. [p. 628 C-F]

2.6. Sales Ext.A-11 as well as Ext.A-23 took place after a year and a
year and half respectively from the date of s.4 notification. They are at an
advantageous position being on the G.T. Road as compared to land under
acquisition which has no such access and is of a large area. These sales
D have as such no positive role to play. If at all, some role is due to Ext.A-11,
which is closest in point of time, and distance wise more close to Malout
town, and on account of its situation. It indicates that for a small plot of
1/2 Kanai (1/16th of an acre) at an advantageous position on G.T. Road
the rate was Rs.96,000 per acre a year after the date of the notification
E under s.4. [pp. 628 F-H; 629 A]

2.7. In the facts and circumstances of the case, compensation for
the land under acquisition must in comparison get lower than the price at
which sale Ext.A-11 took place, but at a figure which does not overlook the
rate as given in awa..d Ext.A-24. The court would now lift the thumb and
F put it to reduce the compensation at Rs.80,000 per acre slicing down 1/6th
(roundedly) from the rate reDective from sale instance Ext.A-11 and l/3rd
from the rate of Rs.1,20,000 as deduced from award Ext.A-24, because of
the poor locale, disadvantageous position and lack of contiguity to the
expansion of Malout town due to the obstructing railway line. Compensa-
G tion at the rate of Rs.80,000 per acre would be just and fair. [p. 629 D-E]

3.1. The purpose of the Land Acquisitio~ Act is to empower the
Government to acquire land only for public purposes or for a company,
and, where it is for a company, the acquisition is subject to provisions of )-
Part-VII.. The Act is neither a tool in the hands of the government to t

H deprive any person of his land without payment of its market value,
FOOD CORPN. v. MAKHAN SINGH [PUNCHHI, J.J 619

solatium at the prescribed rate and statutory interest, nor a bonanza to a A
land owner whose land has been acquired, permitting him to get a fanciful
inflated price. [p. 621_ A-BJ

3.2. It is the bounden duty of the court while ascertaining compen-
sation to see that it is just, not merely to the individual whose property is
taken, but to the public which is to pay for it, even if it be a public B
corporation set up for public needs. [p. 621 E]

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.1711-1737
of 1992.

From the Judgment and Orders dated 1.4.1991 of the Punjab and c
Haryana High Court in L.P.A. Nos.122, 137, 136, 134, 223, 221, 220, 220-A,
219, 218, 214 of 1989, 929/90, 131, 130, 121, 135, 128, 133, 129, 127, 139,
125, 138, 123, 132, 126 and 124 of 1989.

G..L. Sanghi and Y.P. Rao for the Appellants.
D
Rajinder Sachhar, A. Mariarputham and Mrs. Aruna Mathur for the
Respondents.

The Judgment of the Court was delivered by

PUNCHHI, J. In this batch of 87 matters, 19 are special leave E
petitions preferred by the Food Corporation of India through its District

- Manager, Faridkot, Punjab, and the remaining by some claimant-land-
owners against the Food Corporation of India. The dispute is about the
correct assessment of the market value of the land acquired by the State

- of Punjab for the Food Corporation of India. Notice was issued to the
contesting parties indicating to them that the matter may finally be dis-
posed of at the notice stage itself. Therefore these have been heard in full.
On behalf of the Food Corporation of India, Mr. G.L. Sanghi, Sr. Advocate
F

has been heard and Mr. Rajinder Sachar, Sr. Advocate for the claimant-
land-owners. Special leave is granted in all these matters.
G
Land measuring 400 Kanals 12 Marlas (a little over 50 acres) situated
in the revenue estate of village Danewala, Tehsil Muktsar, District Farid-
kot, Punjab, was acquired for construction of food grain godowns. Notifica-
tions under Sections 4 and 6 were issued simultaneously on the same day,
--\ that is, 20th December, 1977. The District Collector of Faridkot on January H
620 SUPREME COURT REPORTS (1992] 2 S.C.R.

A 31, 1984 awarded compensation for the acquired land differentiating be-
tween Nehri lands and Barani lands at the rate of Rs.30,000 per acre and
below. Being not satisfied, the claimant-land-owners moved the Collector; r~
Faridkot, for references under Section 18 of the Act for enhancement of
compensation. Two references were filed by the Food Corporation of India
B as well for reduction. The Additional District Judge on receipt of the
references went into the matter and held the references by the Food
Corporation of India barred under the proviso to sub-section (2) of Section y
50 of the Act. In the other references, the Food Corporation of India as
well as State of Punjab were arrayed by the claimant-land-owners themsel-
ves as respondents. The Additional District Judge after examining the
c matter awarded a uniform rate of Rs.1,20,000 per acre for the land ac-
quired, vide his award dated on 13.6.86. Since the matter was pending in
_the Court of the Additional District Judge when the Land Acquisition
(Amendment) Act, 1984, came into force, solatium at the rate of 30% was---<-
ordered to be paid on the market value of the land. The claimants were
D also held entitled to interest at the rate of 12% per annum from the date
of Notification under Section 4 of the Act to the date of the Award of the
Collector or from the date of taking possession whichever is earlier, and
from the date of taking possessi'1n till one year thereafter at the rate of 9%
per annum and in the rate of 15% per annum from the date of expiry of
E one year from the date of taking of possession till payment.

The appeals of the Food Corporation of India and the State of ~.
Punjab on the one hand and appeals of the claima~t-land-owners on the
other, respectively asking for reduction and enhancement of compensation,
F were dismissed by a common judgment by a learned Single Judge of the
Punjab and Haryana High Court on August 16, 1988. "{he assessment at
the rate of Rs.1,20,000 per acre was affirmed but on a different reasoning
than the one adopted by the Additional District Judge. Likewise, Letters
Patent Appeals by the respective parties to a Division Bench of the High ''-
Court were dismissed maintaining the measure of compensation at the rate ,......_.,,..-
G of Rs.1,20,000 per acre, still on a different reasoning than the one adopted
by the learned Single Judge or the Additional District Judge. Since the
reasoning has differed from court to court, we became inclined to examine
the issue over again and come to a decision regarding the rate of compen-
sation which would be just and equitable in the circumstances, as well as
H meeting the requirements of law.
FOOD CORPN. v. MA.KHAN SINGH [PUNCHHI, J.] 621

The purpose of the Land Acquisition Act is to empower the Govern- A
ment to acquire land only for public purposes or for a company, and, where ·
it is for a company, the acquisition is subject to the provisions of Part VII.
Public purposes being such diverse in nature the Governments of the time
have been undertaking large scale acquisitions to promote and achieve the
common good. The Act is neither a tool in the hands of the Government
B
to deprive any person his land without payment of its market value,
solatium at the prescribed rate and statutory interest, nor a bonanza to a
land owner whose land has been acquired, permitting him to get a fanciful
inflated price. The Act therefore provides a machinery to determine the
market value of the land as existing on the date of the notification under
Section 4 of the Act. Section 15 of the Act mandates that in cietermining c
the amount of compensation, the Collector shall be guided by the pro·rision
as contained in Sections 23 and 24. Section 23 contains a list of positives
to be taken into account by the court determining compensation. The first
requirement is that the court must take into consideration the market value
of the land on the date of the publication of the Notification under
D
sub-section (1) of Section 4 of the Act. This is the reason why courts have
looked for comparable sales of lands at or close to the date of the
Notification under Section 4(1) of the Act to discover a basis i.owards
determining compensation. Somewhere in the process, where difficulties
crop up, the courts employ the rule of thumb, since compensation has to
be assessed and arms cannot be raised in despair. It is the bounden duty E
of the court while ascertaining compensation to see that it is just, not
merely to the individual whose property is taken, but to the public which
is to pay for it; even if it be a public corporation set up for public needs.

- Before we enter into the merits ofthe case it would be necessary to F
meet a preliminary objection raised by Mr. Sachhar as to the main-
tainability of the appeals by the F.C.I. The proviso to sub-section (2) of
Section 50 was pressed into service, which was employed by the Additional
District Judge to reject the two references under Section 18 of the Act
sought by the F.C.I. It was asserted by Mr. Sachhar that when the said
provision debars the local authority or company from demanding reference G
under Section 18, it logically follows that it cannot file an appeal against
the Award of the Court. The Award of the Court was made on 13.6.86
under the amended provisions of the Act. Section 54 provides for appeals
in proceedings before Court. It says that subject to the provisions of the
Code of Civil Procedure 1908, applicable to appeals from original decrees, H
622 SUPREME COURT REPORTS [1992] 2 S.C.R.

A and notwithstanding anything to the contrary in any enactment for the time
being in force, an appeal shall only lie in any proceedings under this Act
to the High Court from the Award, or from any part of the Award of the 'r-
Court and from any decree of the High Court passed on such appeal as
aforesaid an appeal shall lie to the Supreme Court subject to the provisions
contained .in Section 110 of the Code of Civil Procedure, 1908 and in Order
B 45 thereof. Mr. Sachhar had no quarrel with the proposition that an appeal
could lie under Section 54 at the instance of the State of Punjab or one of
its officers. The objection is to the maintainability of the appeals by the ~
F.C.I. for whose purpose the land was acquired. We are not inclined. to
agree with Mr. Sachhar for three reasons. In the first place, it is evident
c that in the references sought the claimant-land-owners themselves had
impleaded the F.C.I. and the State of Punjab as contesting parties. Before
the Additional District Judge, the F.C.I. was a keen contestant. Having
suffered the Award from the Additional District Judge after a grim battle
it had the right to file an appeal under Section 54 to the High Court. The ~-
F.C.I. may not have had the right to ask a reference under Section 18 but
D
this only meant that it could not seek reduction bf the compensation as '111
awarded by the Collector because the award was an offer by the State
through the Collector. Section 25 too is also a pointer to that effect that
the amount of A ward by the Collector is kept sacrosanct and compensation
can in no event be less than the one awarded by the Collector. Conversely,
E subject to4he provisions of Section 25, there is no bar for enhancement of
compensation from the sum awarded by the Collector. And when there is
no such bar the appeals of the F.C.I. in the very nature of things attack the ~
amount awarded by the Court over and above the amount awarded by the

-
Collector. In the second place, such an objection was not raised at any
F stage in the proceedings before the Courts below. No effort was made the
claimant-land-owners to get struck off the F.C.I. as party in the proceedings
before the Additional District Judge. No objection was made either before
the learned Single Judge or before the Division Bench of the High Court

~
with regard to the maintainability of the appeals preferred at those two
stages by the F.C.I. The objection now at such a belated stage cannot be
G allowed to be raised for the first time in the Supreme Court, whatever be
its merit. In the third place, this Court in its discretion under Article 136
of the Constitution, has wide powers to permit any person to appeal from
any judgment, decree, determination, sentence or order in any cause or
matter passed or made by any Court or Tribunal in the territory of India.
H >-
-~

FOOD CORPN. v. MAK.HAN SINGH [PUNCHHI, J.) 623

The objection raised in either event does not appeal to as and we accord- A'
ingly reject it.

As has been said earlier the land acquired is large area of a little
over 50 acres which is within the municipal area of Malout Town, though
in the revenue estate of village Danewala. It abuts the railway line on one
side across which is the revenue estate of Malout. One and a half years
B
earlier about 70 acres of land was acquired by the State of Punjab vide
notification dated 30.6.76 on the other side of the railway line for setting
up a grain market. That land abuted the G.T. Road on one side. There is
__ ............
·.~
a tendency of extension of urbanisation from Malout towards village
Danewala. Evidence has been led to show that on the G.T. Road, shops c
have been constructed, petrol pumps, factories, workshops and godowns
have come i.:p. Evidence has also been led to show that there is demand
of land for commerCial and residential purpose on the G.T. Road and near
about. The land has been found by the High Court to be neither touching
nor being accessible from the G.T. Road. It was shown in the revenue
papers to be used for agricultural purposes. From these particulars the
courts below have come to the conclusion that the land had potential of
urbanisation. We have no reason to differ from such view.

Before the Additional District Judge, the claimant-land-owners
produced copies of the sale deeds Ex.A-6 to A-23 to support their claim E
which were tabulated by the learned Judge in his Award. These are 18 in
number. Significantly, none of these sales exceeded one Kanai of land. A
Kanai is 1/8th of an acre. Rather in the 18 instances only 2 sales were of

- one Kanai each and those were Ex.A-16 and A-23 which appealed, in one
form or the other, to the courts below. The others were of areas less than · F
even half a Kanai or even lesser. Apart from the sizes of the plots sold, the
first five sales were within the period starting from 30.3.77 to 16.11.77. The
remaining sales were from 18.12.78 to 11.7.84. The instant acquisition being
of 20.12.77 the only sale prior to that date which could be relevant in point
of time was of 1-1/2 Marla of land (1-1/13 of a Kanai) on 16.11.77 disclosing
at its price per acre at Rs.15,78,560. This instance was rightly rejected by G
the Additional District Judge. The sale next in point of time, but after
20.12.77, was A-11 dated 20.12.78, and even though the area sold was less
than one Kanai the price revealed was Rs. 96,800 per acre. This sale for
whatever reason, was overlooked by the Additional District Judge. Besides
he rejected all the sale instances provided by the State showing market rate H
624 SUPREME COURT REPORTS [1992] 2 S.C.R.

·A far far below than what was claimed by the claimants. He, however, fell for r \
two later sales Ex.A-16 and A-23 by adopting the following reasoning:-

"So, in these cases, I am inclined to follow the transactions
relating to at least one Kanai of land, thus, the relevant trans-
actions are covered by the copies Exs. A-16 and A-23. Vide
B sale deed Ex.A-16, one Kanai of land was sold for Rs.30,000 Y'
on 30.6.1981 and vide sale deed Ex.A.-23, one Kanai of la:id
was sold for Rs.15,000 on 6.6.79, vide Ex.A-23, the land sold
comprised in Khasra No.359 which is quite close to the ac-
quired land. The Notification under Section 4 of the Act was
c issued on 20.12.77 so the transaction dated 6.6.1979 reveals a
proper and appropriate data for determining the market value
of the acquired land. This transaction gives the market value
of the land at the rate of Rs.1.,20,000 per acre. The other ·~

transaction covered by Ex.A-16 is dated 30.6.81 and it reveals
the price at the rate of Rs.2,40,000 per acre. The learned
D counsel for the respondents rightly submitted that this, .rans-
action took place much after the Notification of acquisition and,
thus, it cannot provide appropriate data for determining the
market value of the acquired land. The only relevant transac-
tion relating to at least one Kanai of land is dated 6.6.1979
E which gives the market value of Rs.1,20,000 per acre. This
--'(
transaction, to my mind, gives the just and adequate criteria
for determining the market value of the acquired land.

F
From another angle, the market value of the acquired land
can be determined by taking into consideration the two trans-
actions i.e. Exs.A-16 and A-23 of one Kanai each as those two
-
transactions took place. after the Notification for acquisition
and they reveal the average price of Rs.l,80,000 per acre. Since
these transactions took place after the Notification under Sec-
tion 4 of the Act, so one third of the average price is to be
G deducted towards the road and parks and, thus, after deducting
1/3rd price, its market value again comes to Rs.1,20,000 per
acre."
(

)-
When asked to give Rs.1,40,000 per acre as compensation as was
H given for the land acquired for the grain market in Mandi Malout in the
FOOD CORPN. v. MAKHAN SINGH [PUNCHHI, J.] 625

-I ~ earlier year the learned Additional District Judge observed as follows: A

"........... the land acquired for the new Grain Market was towards
Malout town from the railway line. So that very compensation
cannot be appropriately awarded for the acquired land in
, question, though never the less that amount of compensation
/ can be taken in mind while guessing the market value of the B
acquired land. Since Rs.1,40,000 per acre was awarded for the
acquired land for the new grain market vide copy Ex.A-24, the
lt1nd in question h~s equally the potential value and is at a little
distance from the Q.T. Road and is very close to the railway
line and within the municipal limits of Malout, but it being c
situated across the railway line, the proper yardstick to deter-
mine the market value of this land is the transactions Exs.A-16
and A-23, which reveal the market value to be Rs.1,20,000 per
acre, as observed abov~. The land covered by those transactions
is quite close to the acquired land."
D
On that premises, the Additional District Judge determined the
market value of the land at Rs.1,20,000 per acre.

Before the learned Single Judge in the High Court in appeal, the
claimant-land-owners abandoned reliance on Exs.A-16 and A-23. The
E
r1earned Single Judge then observed as follow:-

"The primary submission of the learned counsel for the
claimant appellant while conceding that the sale instances
Ex.A-16 and A- 23, as relied upon by the lower court, were not
very relevant for the purpose of determining the market value F
of the acquired land, is that the sale instances Exs.A-6 to A-10
provide the best possible material to answer the question posed
in the earlier part of the judgment".

The claimants failed to convince the learned single judge to rely G
upon the sale instances Exs. A-6 to A-10. With regard to award, Ex.A-24
the learned Judge observed as follows:

"It is not in dispute that the land covered by Ex.A-24 (in
the light of Exhibit A-1) lies along with Abohar Dabwali road
and a railway line intervenes the two blocks of land, i.e., one H
ti26 SUPREME COURT REPORTS (1992] 2 S.C.R.

covered by Ex.A-24 and the presently acquired land. Thus
..,._.
A
apparently the land covered by Ex.A-24 had a better access
and better potential than the suit land. It appears that on this
"'
account the lower court did not treat the two lands at par and
thus assessed the market value of the suit land at Rs.1,20,000
instead of Rs.1,40,000 per acre. Mr. Garg, however, is at pains
B to urge that this cut deserves to be increased further or, in other '
words, the price of the suit land be reduced to about Rs.93,000
per acre by applying a cut of about 33% on the rate deter~ined
vide Ex.A-24. That does not appear to be justified. The lower
court has already, as pointed but above, reduced the rate by
c Rs.20,000 per acre."

It is in this manner that the rate of Rs.1,20,000 was stuck to. ~-

In Letters Patent Appeal, the Division Bench in variation of both the
reasoning of the courts below observed as follows:
D
"On a consideration of the matter, we are of the view that there
is no scope °for interference in these appeals. The Land Ac-
quisition Court in para 6 of its award has tabulated the instan-
ces and a look at the same shows that decision of the learned
Single Judge is well based. Acquisition was made in December,
E
1977 whereas instances A-11 and A-23 dated 18.12.1978 and -.....(
6.6.1979 show that the price fetched was Rs.96,800 per acre and '
Rs.1,20,000 per acre respectively."

Instance A-11, though of a small area, revealed the price at the rate
F of Rs.96,800 per acre, was closer to the date of the Notification having
taken place a year thereafter, but earlier than sales A-16 and A-23. Yet the
Division Bench fell for maintaining the market price at Rs.1,20,000 by t
observing as follows:- ~
"Moreover, there was another acquisition slightly earlier to
G the present acquisition for the new grain market for which
compensation was awarded by the Court at the rate of
Rs.1,40,000 per acre. That land was situated on Abohar Dab-
wali road and had higher potential as compared to the land in fa.
question which is not assessible by road. Accordingly, the value
H at Rs.1,20,000 per acre for the land in dispute has been cor-
FOOD CORPN. v. MAKHAN SINGH [PUNCHHI, J.) 627

rectly assessed by the Land Acquisition Court and upheld by A
the learned Single Judge."

This Court as the last Court of appeal, will ordinarily not interfere
in an award granting compensation unless there is something to show not
merely that on the balance of evidence it is possible to reach a different
B
~ conclusion, but that the judgment cannot be supported by reason of a
wrong application of principle or because some important point affecting
. valuation has been overlooked or misapplied. Besides, generally speaking,
the aopellate court interferes not when the judgment under appeal is not
......._ right but only when it is shown to be wrong. See in this connection, The
_. Dollar Company, Madras v. Collector of Madras, [1975] 2 SCC 730. Added c
thereto are other rules of prudence that the courts do not treat at par land
-~ situated on ~he frontage having special advantage and the land situated in
the interior. undeveloped area, or to compare smaller plots fetching better
price with large tracts of land. See in this connection Periyar and Pareekan-
ni Rubbers Ltd. v. State of Kera/a, A.LR. 1990 S.C. 2192.
D
Bearing these principles in mind, we now proceed to examine the
matter. Learned counsel for the claimant-land-owners placed before us a
plan showing the topography of the area. We had the advantage of using
it without objection from learned counsel of the F.C.I. It is evident that if
one comes from Malout towards village Danewala on the G.T. Road, one E
),-. has first to pass the railway crossing and then go some distance to reach
!
the plot which is subject-matter of sale Ex.A-11, facing G.T. Road. Then
one has to go further down to reach plot of land covered by sale instance
Ex. A-16 facing the G.T. Road on the other side. At a short distance
further down is the plot of land covered by sale instance Ex.A-23 again
facing the G.T. Road, almost opposite to land of sale instance Ex.A-16. F
These are the only instances which have been chosen at one stage or the
other for consideration. Before crossing the railway line lies the large
'---""' chunk of land which was acquired for constructing a grain market for
... Malout Mandi having considerable frontage on the G.T. Road. It is evi-
dently close to the DAV College. Besides it surrounds the office of the
Market Committee. As observed by the learned Single Judge of the High
G
Court the grain market land covered by award Ex.A-24 had a better access
and better potential than the land under acquisition. Obviously the two
~-'- lands could not be treated at par as the market value of the instant land
cannot be the same. So far there can be no dispute. Amongst the three sale
instances figuring in the discussion, sale Ex.A-11 is the closest in point of H
628 SUPREME COURT REPORTS [1992) 2 S.C.R.

A time having taken place on 18.12.78 (about a year after the date of notifica-
tion under Section 4 of the Act) and distance wise closest from the land
acquirt;d for grain market, Malout. This discloses the rate of Rs.96,800 per
acre, even though the area involved is less than half a Kanai. Only a plot,
sizeable though, intervenes between this plot and the land under acquisi-
tion. This sale instance engaged the attention of Letters Patent Bench o.f
B the High Court and not by any of the two courts below. The next in point
of time is sale instance Ex.A-23 showing the rate of Rs.1,20,000 per acre
but the land sold was only one Kanai. It took place on 6.6.79 about lxl/2
years later than the date of Section 4. notification. This sale instance
engaged the attention of the Additional District Judge and the Letters
C Patent Bench but was dropped from consideration by the learned Single
Judge on the concession of the claimant-land-owners. Lastly in point of
time is sale instance Ex.A-16 of 30.6.81 involving one Kanai of land, the
rate being Rs.2,40,000 per acre. In point of situation, plot covered under
Ex.A-16 is almost opposite to plot covered by sale Ex.A-23 but slightly
towards Malout town. Ex.A-16 took place two years after sale Ex.A-23 and
D as such was about 3xl/2 years after the date of the notification. Sale
Ex.A-16 appealed to the Additional District Judge only as a supporting
material to grant compensation at the rate of Rs.1,20,000 per acr~ on the
basis of sale Ex.A-23. Sale Ex;A-16 neither appealed to the learned Single
Judge nor to the. Letters Patent Bench. Sale Ex.A-16 having been discarded
by the learned Single Judge as well as by the Letters Patent Bench of the
E High Court and the Additional District Judge too having used it only in a
limited way, as disclosed in his reasoning, we feel that sale Ex.A-16 should
be totally ruled out from cosideration because it was too distant in point
of time having taken place 3-1/2 years after the date of notification. Having
/"
discarded the same the supporting foundation to maintain sale price at the
rate of Rs.1,20,000 per acre either on the basis of sale instance Ex.A-23 or
F
on the basis of award Ex.A-24 become shaky and open to 'lluestion.

Now we have seen sales Ex.A-11 as well as Ex.A-23 are of very small
areas and have taken place a year and a year and half respectively from
the date of Section 4 notification. Evidently they are at an advantageous
G position being on the G.T. Road as compared to the land under acquisition
which has no access to the G.T. Road and is of a large area. These sales
have as such no positive role to play. If at all, some role is due to sale .Ex.A-
ll, which is closest in point of time, and distance wise ·more close to Malout
town, and on account of its situation. This tells us that for a small plot at
IH an advantageous position on the G.T. Road the rate was Rs.96,000 per ~le
FOOD CORPN. v. MAK.HAN SINGH [PUNCHHI, J.] 629

a year after the date of the notification under Section 4. The land under A
acquisition cannot fetch on any reasoning the same price as fixed in sale
Ex.A-11, because comparably the area acquired is large, almost 800 times
than the land sold vide Ex.A-11. So the land acquired has to fetch a price
lesser than the price of Rs.96,800 per acre. At this stage, it would be
relevant to mention that in the grounds of appeal before the High Court,
the Food Corporation of India disclosed its willingness to pay a sum of
B
Rs.80,000 per acre for the land acquired. In the same strand the learned
counsel appearing for the F.C.I. had projected before the learned Single
Judge that there should be a further cut to reduce the compensation from
Rs.1,20,000 per acre to about Rs.93,000 per acre. These statements by
I themselves are no concessions and are at best indications of vacillation to c
find the correct market value. On such statements public purses cannot be
allowed to open their mouths. Having regard to these conflicting claims we
get to the view that important points affecting valuation had been ovt!r-
looked or misapplied in arriving at and sticking to the rate of compensation
at Rs.1,20,000, which would require a correction from us. We feel that in D
the facts and circumstances of the case the compensation !llUSt in com-
parison get lower than the price at which sate ExA-11 took place, but at
a figure which does not overlook the rate as given in award Ex.A-24. Now
we lift our thumb and put it to reduce the compensation to Rs.80,000 per
acre slicing down l/6th (roundedly) from the rate reflective from sale
instance Ex.A-11 and 1/3rd from the rate of Rs.1,20,000, as deduced from E
award Ex.A-24, because of the poor locale, disadvantageous position and
lack of contiguity to the expansion of Malout town due to the obstructing
railway line. In our opinion, compensation at the rate of Rs.80,000 per acre
is just and fair in the circumstances, and we hold so.

Accordingly, the appeals of the Food Corporation of India are F
allowed, the judgment and decrees of the High Court as well as the Award
of the Additional District Judge are modified to the extent aforementioned;
other conditions of solatium and interest ·subsisting. The appellant F.C.I.
shall have its proportionate costs. The appeals of the claimant-land-owners
appellants are dismissed but with no order as to costs. G
R.P. Appeals of F.C.I. allowed and land-owners dismissed.