Holding

Previous awards or judgments are only evidentiary material, not binding precedent, and the compensation must be determined afresh with appropriate development deductions and a flat, not cumulative, increase, resulting in Rs.95 lakh per acre.

Summary

The Supreme Court examined appeals arising from the acquisition of 561.38 acres in Haryana where the High Court had fixed compensation at Rs.1.46 crore per acre by applying a 15% cumulative annual increase and relying heavily on the Swaran Singh judgment. The Court held that such reliance was improper because prior awards are merely evidence, not binding precedent, and must be examined for similarity of land, transaction nature, and timing. It emphasized that appropriate deductions for development (typically one‑third) must be made and that any increase should be on a flat basis (10‑13%) rather than cumulative. Applying these principles, the Court reduced the compensation to Rs.95 lakh per acre with statutory benefits. Consequently, the State’s appeals were partly allowed and the landowners’ appeals dismissed.

Issues considered

The propriety of relying on a prior award/judgment (Swaran Singh) as binding precedent for determining compensation under the Land Acquisition Act, 1894.
The correctness of applying a 15% cumulative annual increase to the compensation.
The necessity and quantum of deductions for development costs in the valuation.
The appropriate methodology for ascertaining market value of land at the date of notification under Section 4 of the Land Acquisition Act.
The admissibility of previous judgments/awards as evidence under Order 41 Rule 27 of the CPC and the Evidence Act.

Legislation cited

Code of Civil Procedure, 1908s. Order 41 Rule 27
Indian Evidence Act, 1872s. 13, s. 43
Land Acquisition Act, 1894s. 16, s. 18, s. 4, s. 6

Subjects

Land acquisitionCompensation determinationComparable salesPrevious award as evidenceDevelopment deductionCumulative increaseSection 4 notificationOrder 41 Rule 27Evidence ActJudicial discretion

Judgment

[2017] 8 S.C.R. 997

MANOJ KUMAR ETC. ETC. A
v.
STATE OF HARYANA AND OTHERS ETC. ETC.
(Civi!Appea!Nos.13132-13141 of2017)
SEPTEMBER 13,2017
[ARUN MISHRA AND "''
MOHAN M. SHANTANAGOUDAR, JJ.)
Land Acquisition Act, 1894:
'
Determination of compensation - Basic principle before C
placing reliance on the previous award/judgment or comparable
sales - High Court relied upon a judgment in which for the
_acquisition of lana in the year 1999, exemplar of 1997 was relied
upon - Held: The High Court passed the judgment in a blind manner
- It was incumbent upon the High Court to take into consideration
D
various transactions that were on record, entered into before the
date of issuance of Notification under s.4 of the Act - High Court
could not have placed an outright reliance on the decision of Swaran ·
Singh's case, without considering the nature of transaction relied
upon in the said decision - The land in Swaran Singh's case was
situated just across the road as observed by the High Court as such E
it was relevant evidence but not binding - As such it could have
·been. taken into consideration due lo the nearness of the area, but
at the same time what was the nature of the transaction relied upon
in the said case was also required to be looked into in an objective
manner - Such decisions in other cases cannot be relied upon without F
examining the basis for determining compensation as to whether
sale transaction referred to therein can be relied upon or not and
what was the distance, size and also bonajide nature of transaction
before such judgments/awards are relied on for deciding the
subsequent cases - High Court ·granted 15% cumulative increase
which was not justified - Even accepting some increase annually G
due to development made after previous acquisition but that could
not have been granted on cumulative basis but on a flat basis, that
too considering subsequent' rate offered for nearby areas -
Therefore, adding between 12-13% flat increase, taking base pri<;e
at Ks.15601- granted in the case of Swaran Singh, the price would
H
997
.
998 SUPREME COURT REPORTS [2017] 8 S.C.R.

A come approximately to Rs.I.JO crores per acre - Further deduction
in addition to deduction made in Swaran Singh s case is required to
be made towards development - it is held appropriate to deduct
further amount of Rs.15 lakhs - Thus, the compensation came to
Rs.95 lakhs per acre, and not Rs.1,46,09,0001- as determined by
B High Court - Thus, it is deemed appropriate to award Rs.95 lakhs
per acre along with statutory benefits.
Comparable sales - Award of compensation - Determining
factors - The compensation cannot be determined by blindly
following the previous award/judgment - it has to be considered
only a piece of evidence not beyond that - Court has to apply the
c judicial mind and is not to follow the previous awards without due
consideration of the facts and circumstances and evidence adduced
in the case in question - The current value reflected by comparable
sale deeds is more reliable and binding for determination of
compensation - Jn such cases award/judgment relating to an
D acquisition made before 5 to 10 years cannot form the safe basis
for determining compensation
Comparable sales - Binding effect - Held: The award and
judgment in the case of others not being inter parties are not binding
as precedents - Recently, it is noticed that courts follow them blindly
E probably under the misconception of the concept of equality and
fair treatment - The courts are being swayed away and this approach
in the absence of and similar nature and situation of land is causing
more injustice and tantamount to giving equal treatment in the case
of unequals.
F Comparable sales - Evidentiary value vis-a-vis precedential
value - The previous awards/judgments are the only piece of
evidence at par with comparative sale transactions - The similarity
of the land covered by previous judgment/award is required to be
proved like any other comparative exemplar - In case previous
award/judgment is based on exemplar, which is not similar or
G acceptable, previous award/judgment of court cannot be said to be
binding - Such determination has to be outrightly rejected - Jn
case some mistake has been done in awarding compensation, it
cannot be followed on the ground of parity as an illegality cannot
be perpetuated - Such award/judgment would be wholly irrelevant.
H
MANOJ KUMAR ETC. ETC. v. STATE OF HARYANA AND 999
OTHERS ETC. ETC.

Comparable sales -Acquisition made JO to 12 years ago - A
Held: Reliance of such acquisition is made only when there is
absence of sale transaction before issuance of notification under
s.4 of the Act and for giving annual increase, evidence should reflect
that price of land had appreciated regularly and did not remain
static - The Recent trend for last several years indicates that price B
of land is more or less static if it has not gone down - At present,
there is no appreciation of value - Thus, it is not a very safe method
of determining compensation.
Award of compensation - Previous award/ judgment - Mistake
or illegality in the previous award - Jn case some gross mistake 'or
illegality has been committed in previous award/judgment of not C
making deduction etc. and/or sufficient evidence had not been
adduced and better evidence is adduced in case at hand, previous
award/judgment being not inter-parties cannot be followed and if
land is not similar in nature in all aspects it has to be out-rightly
rejected as done in the case of comparative exemplars - Precedent. D
Precedent - To rely upon judgment/award in case .it does not
form part of evidence recorded by reference court, an application
under Or.41 r.27 is to be filed to adduce evidence and if it is allowed
opposite party has to be given opportunity to lead evidence in
rebuttal - The award/judgment cannot be taken into consideration E
while hearing arguments unless they form part of evidence in the
case - Code of Civil Procedure, 1908 - Or. 41 r. 2 7.
Precedent - Binding effect of - The dismissal of the special
leave petition without assigning of reason cannot be treated as a
·binding precedent of Supreme Court. F
Major General Kapil Mehra & Ors. v. Union of India
& Anr. (2015) 2 SCC 262 : [2014] 10 SCR 1153; The
Land Acquisition Officer, City Improvement Trust Board
v. H. Narayanaiah & Ors. (1976) 4 SCC 9 : [1977) 1
SCR 178; Printers House Pvt. Ltd. v. Mst. Saiyadan G
(dead) by L.Rs. & Ors. (1994) 2 SCC 133 : [1993) 3
Suppl. SCR 296 ; Karan Singh & Ors. v. Union of
India (1997) 8 SCC 186 : (1997) 4 Suppl. SCR 237;
Ranvir Singh & Anr. v. Union of India (2005) 12 SCC
59 : [2005) 3 Suppl. SCR 31 ; Special Land Acquisition
H
1000 SUPREME COURT REPORTS [2017] 8 S.C.R.

A Officer, Mysore Urban Development Authority v.
Sakamma (2010) 14 SCC 503 ; State of Madhya
Pradesh v. Kanshi Ram (2010) 14 SCC 506; Hirabai &
Ors. v. Land Acquisition Officer-cum-Assistant
Commission (2010) 10 SCC 492: (2010111 SCR 1051;
Chimanlal Hargovind Das v. Special Land Acquisition
B
Officer, Poona & Anr. (1988) 3 SCC 751 : (19881 1
Suppl. SCR 531 - relied on.
Case Law Reference
· · · (.2014) 10 SCR 1153 relied on Para 13
c (1977) 1SCR178 relied on Para 19
(1993) 3 Suppl. SCR 296 relied on Para 20
(1997) 4 Suppl. SCR 237 relied on Para 21
(2005) 3 Suppl. SCR 31 relied on Para 22
D
(2010) 14 sec 503 relied on Para 23
c2010) 14 sec 506 relied on Para 24
(2010) 11 SCR 1051 relied on Para 24
(1988) 1 Suppl. SCR 531 relied on Para 26
E

CNILAPPELLATE JURISDICTION: Civil Appeal Nos.13132-
13141 of2017.
From the impugned final Judgment and Order dated 24.02.2016
F passed by the High Court of Punjab and Haryana at Chandigarh in RFA
No.3984 of2014, RFA No.3983 of2014, RFA No.3873 of2014, RFA
No.4219 of2014, RFA No.4218 of2014, RFA No.4216 of2014, RFA
No.8173 of 2014, RFA No.4217 of 2014, RFA No.3863 of 2014, RFA
No.3864 of2014 respectively
G WITH
C.A. No. 13198, C.A. Nos. 13146-13184, C.A. Nos. 13143-13145
C.A. No.13201, C.A. No.13266-13269, C.A. No.13142,
C.A. Nos.13257-13265, C.A. Nos.13199-13200, C.A. No.13185
C.A. No.13197, C.A. No.13194, C.A. No.13196, C.A. No.13193,
H
MANOJ KUMAR ETC. ETC. v. STATE OF HARYANA 1001

C.A. No.13195, C.A. Nos.13186-13192, C.A. Nos.13211-13222, A
C.A. Nos.13224-13230, C.A. Nos.13202-13210, C.A. No.13223,
C.A. Nos.13231-13238, C.A. No.13239-13256, C.A. No.13272,
C.A. Nos.13270-13271, C.A. No.13273, C.A. Nos.13296-13299,
C.A. Nos.13274-13295, C.A. Nos.14539-14556, C.A. Nos.14569-14598
of 2017.
B
Mahabir Singh, Manjeet Singh, Sr. Advs., Ms.Swati Jindal; Nikhil ·
Jain, Robin Dutt, Yash Pal Dhingra, Yadav Narender Singh, Manoj.
Swamp, Akshat Goel, DushyantTiwari, Mukul Kumar, Himanshu Gupta
. (for Anil Kumar Tandale), Dr.Monika Gusain, Abhinaash Jain, Ashok
Kumar, Ms.Surabhi Lata (for M.P. Shorawala), Rajat Sharma, Dinesh
Verma, Subhasish Bhowmick, Aditya Singh, Shish Pal Laler, Sonit C
Sinhmar, Devesh Kumar Tripathi, Gopal Singh, Siddharth Mittal, Tarjit
·Singh, Rajat Rathee (for Mr.Suhass Ratna Joshi), Ms.Preeti Singh,Advs.
with them for the appearing parties. .
The following Order of the Court was delivered:
D
ORDER
1. Heard.
2. Delay condoned.
3. Leave granted.
E
4. The appeals have been filed by the State ofHaryana as well as
by the land owners questioning the determination of compensation by
the High Court by its judgment and order dated 24.2.2016. The
Notification under Section 4 of the Land Acquisition Act, 1894 (in
short 'the Act') had been issued on 30th May 2005 for the land
admeasuring 561.38 acres, the Notification under Section 6 of the Act F
confined the area to 444.71 acres. However, the Award was passed
·with respect to the area admeasuring 354.50 acres. The Revenue Estate,
Jagadhri of village Jaroda, Guiab Nagar and village Bhatauli had been
acquired for the purpose of developing Sectors 22, 23 and 24 by the
Haryana Urban Development Authority, Jagadhari. G
5. The Land Acquisition Collector vide its Awards of dated
16.7.2007 determined the compensation at Rs.24,00,000/-per acre for
the prime land, Rs.20,00,000/- per acre for the area within municipal
limits and Rs. I 0,00,000/- per acre for the remaining land.
H
1002 SUPREME COURT REPORTS [2017] 8 S.C.R.

A 6. A reference had been made under Section 18 of the Act. The
Reference Court, ignoring the belting system, vide its Awards including
the one dated 10.02.2014 enhanced the market value of the acquired
land, at the uniform rate of Rs.1560/- per square meter.
7. Aggrieved by the aforesaid determination made by the
B Reference Court, the State of Haryana filed the appeals seeking a
reduction of the amount whereas the landowners filed the appeals for
enhancement of compensation. The appeals preferred by the State were
dismissed by the High Court vide judgment and order dated 22.9.2014
whereas the appeals preferred by the landowners have been allowed by
C the impugned judgment.
8. The High Court has determined the compensation at the rate
of Rs.3609 per square meter, rounded off to Rs.3610 per square meter
after adding 15% annual increase on the cumulative basis for six years
i.e. Rs.1,46,09 ,000 per acre. The High Court has passed the judgment
on the basis ofanother award following it in a blind manner i.e. Swaran
D Singh .v. State of Haryana and another, in that in the year 1999 the
land had been acquired it was situated just across the road in front of the
acquired land, in which this Court did not interfere and the special leave
petition was dismissed in limine. It has also been observed that the cut
had been applied by the High Court while deciding the relied upon case
E of Swaran Singh (supra) in as much as exemplar relied upon of the
year 1997 appreciation had not been given up to 1999.
9. Learned counsel appearing on behalf of the State of Haryana
urged that the High Court has erred in law in relying upon the decision of
Swaran Singh (supra). In the evidence recorded by the Reference Court
F parties have filed various sale deeds with respect to the same area
executed before the date of Notification issued under Section 4 of the
Act. In Swaran Singh s case, reliance has been placed on another
judgment in CA No.476/2004 the transaction which had been relied upon
was a transaction of 10.6.1997 between the Power Grid Corporation
and the HUDA, where under the price had been paid for the plot in area
G 8000 sq. meters, sold@ Rs.1560/- per square meter. Thus, the learned
counsel urged that for development, certain deductions were required to
be made. In the said case, Notification under Section 4 of the Act was
issued on 28.4. I 999. Thus, the compensation determined is highly
excessive and deserves to be suitably reduced.
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MANOJ KUMAR ETC. ETC. v. STATE OF HARYANA 1003

10. Per contra, learned senior counsel Shri Mahabir Singh and A
Shri Manoj Swarup, appearing on behalf of the landowners prayed for
enhancement of the compensation. The compensation awarded by the
High Court is on the lower side. The High Court, in Swaran Singh's
case, had applied the cut while not giving increase for two years i.e.
w.ef 1997 to 1999, on relied upon comparable transaction.
B
11. After hearing learned counsel for the parties, we are of the
considered opinion that the methodology adopted by the High Court for
determining the compensation could not be said to be appropriate and in
accordance with the settled proposition of law by a catena of decisions
of this Court. It was incumbent upon the High Court to take into
consideration various transactions that were on record, entered into before C
the date of issuance of Notification under Section 4 of the Act.
12. The High Court has also erred in law in not deducting the
amount towards the development of exemplar sale of 1997. When the
·large area had been acquired. The two kind of deductions have to be
made one for development and in case of exemplar transaction is a D
small area, the reduction is required to be made to arrive at the value of
large tract.
13. In Major General Kapi/ Mehra & Ors. vs. Union of India
& Anr.[(2015) 2 SC 262] this Court has considered various decisions
regarding deduction to be made for development and if exemplar is small E
developed plots how its value is to be worked out for large areas and
observed:-
"33. In Haryana State Agricultural Market Board vs. Krishan
Kumar. (2011) 15 SCC 297, it was held as under:
F
"10. It is now well settled that ifthe value of small developed
plots should be the basis, appropriate deductions will have to be
made therefrom towards the area to be used for roads, drains,
and common facilities like a park, open space, etc. Thereafter,
further deduction will have to be made towards the cost of
development, that is, the cost ofleveling the land, cost oflaying G
roads and drains, and the cost of drawing electrical, water and
sewer lines."
3.5. Reiterating the rule of one-third deduction towards
development, in Sabhia Mohammed Yusuf Abdul Hamid Mul/a
H
1004 SUPREME COURT REPORTS [2017] 8 S.C.R.

A vs. Special Land Acquisition Officer, (2012) 7 SCC 595, this
Court in paragraph 19 held as under:-
"19. In fixing the market value of the acquired land, which is
undeveloped or underdeveloped, the courts have generally
approved deduction of I/3rd of the market value towards
B development cost except when no development is required to
be made for implementation of the public purpose for which
land is acquired. In Kasturi vs. State of Haryana (2003) I
SCC 354) the Court held: (SCC pp. 359-60, para 7)
"7 ... It is well settled that in respect of agricultural land or
c undeveloped land which has potential value for housing or
commercial purposes, n01mally I/3rd amount of compensation
has to be deducted out of the amount of compensation payable
on the al.quired land subject to certain variations depending
on its nature, location, extent of expenditure involved for
development and the area required for road and other civic
D amenities to develop the land so as to make the plots for
residential or commercial purposes. A land may be plain or
uneven, the soil of the land may be soft or hard bearing on the
foundation for the purpose of making constmction; maybe the
land is situated in the midst of a developed area all around but
E that land may have a hillock or may be low-lying or may be
having deep ditches. So the amount of expenses that may be
incurred in developing the area also varies. A claimant who
claims that his land is fully developed and nothing more is
required to be done for developmental purposes must show
on the basis of evidence that it is such a land and it !s so
F located. In the absence of such evidence, merely saying that
the area adjoining his land is a developed area, is not enough,
particularly when the extent of the acquired land is large and
even if a small portion of ,ne land is abutting the main road in
the developed area, does not give the land the character or a
G developed area. In 84 acres ofland acquired even if one portion
on one side abuts the main road, the remaining large area
where planned development is required, needs laying of internal
roads, drainage, sewer, water, electricity lines, providing civic
amenities, etc. However, in cases of some land where there

H
MANOJ KUMAR ETC. ETC. v. STATE OF HARYANA 1005

are certain advantages by virtue of the developed area around, A
it may help in reducing the percentage of cut to be applied, as
the developmental charges required may be less on that
account. There may be various factual factors which may
have to be taken into consideration while applying the cut in
payment of compensation towards developmental charges, B
may be in some cases it is more than I/3rd and in some cases
less than l /3rd. It must be remembered that there is difference
between a developed area and an ':lrea having potential value,
which is yet to be developed. The fact that an area is developed
or adjacent to a developed area will not ipso facto make every
land situated in the area also developed to be valued as a C
building site or plot, particularly when vasttracts are acquired,
as in this case, for development purpose."
The rule of I/3rd deduction was reiterated in Tejumal
Bhojwani v. State of U.P. ((2003)10 SCC 525, V. Hanumantha
Reddy v. Land Acquisition Officer, (2003) 12 SCC 642, H.P. D
Housing Board v. Bharat S. Negi (2004) 2 SCC 184 and
Kiran Tandon v. Allahabad Development Authority (2004)10
SCC745"
36. While determining the market value of the acquired land,
normally one-third deduction i.e. 33 1/3% towards development E
charges is allowed. One-third deduction towards development was
allowed in Tehsildar(L.A.) vs. A. Mangala Gowri, (1991) 4
SCC 218; Gulzara Singh vs. State of Punjab, (1993) 4 SCC
245; Santosh Kumarivs. State ofHaryana, (1926) 10 SCC 631;
Revenue Divisional Officer & L.A.0. vs. Sk. Azam Saheb,
(2009) 4 SCC 395; A.P. Housing Board vs. K. Manohar Reddy, F
(2010)12 SCC 707; Ashrafi vs. State ofHaryana, (2013) 5 SCC
527 and Kashmir Singh VS. State of Haryana, (2014) 2 sec
165.
37. Depending on nature and location of the acquired land, extent
of land required to be set apart and expenses involved in G
development, 30% to 50% deduction towards development was
allowed in Haryana State Agricultural Market Board vs.
Krishan Kumar (2011) 15 SCC 297; Director, Land Acquisition
vs. Malla Atchinaidua 2006 (12) SCC 87; Mummidi Apparao
H
1006 SUPREME COURT REPORTS [2017] 8 S.C.R.

A vs. Nagarjuna Fertilizers & Chemicals Ltd., AIR 2009 SC 1506;
and Lal Chand vs. Union of India (2009) 15 SCC 769.
38. ln few other cases, deduction of more than 50% was upheld.
In the facts and circumstances of the case in Basavva v. Land
Acquisition Officer, (1996) 9 SCC 640, this Court upheld the
B deduction of 65%. In Kanta Devi vs. State of Haryana (2008)
15 sec 201, deduction of 60% towards development charges
was held to be legal. This Court in Subh Ram vs. State ofHaryana,
(20 I0) I SCC 444, held that deduction of 67% amount was not
improper. Similarly, in Chandrasekhar vs. Land Acquisition
Officer, (2012) 1 SCC 390, deduction of70% was upheld.
c
39. We have referred to various decisions ofthis Court on deduction
towards development to stress upon the point that deduction
towards development depends upon the nature and location of
the acquired land. The deduction includes components of land
required to be set apart under the building rules for roads, sewage,
D electricity, parks, and other common facilities and also deduction
towards development charges like laying of roads, construction
of sewerage."
Thus, it was incumbent on the High Court to make appropriate
deductions.
E
14. In our opinion, the High Court could not have placed an outright
reliance on the decision of Swaran Singh s case, without considering
the nature of transaction relied upon in the said decision. The decision
could not have been applied ipso facto to the facts of the instant case.
In such cases, where such judgments/awards are relied on as evidence,
F though they are relevant, but cannot be said to be binding with respect to
the determination of the price, that has to depend on the evidence adduced
in the case. However, in the instant case, it appears that the land in
Swaran Singh s case was situated jnst across the road as observed by
the High Court as such it is relevant evidence but not binding. As such it
G could have been taken into consideration due to the nearness of the
area, but at the same time what was the nature of the transaction relied
upon in the said case was also required to be looked into in an objective
manner. Such decisions in other cases cannot be adopted without
examining the basis for determining compensation whether sale transaction
referred to therein can be relied upon or not and what was the distance,
H
,•,'".

MANOJ KUMAR ETC. ETC. v. STATE OF HARYANA 1007

size and also bonafide nature of transaction before such judgments/awards A
are relied on for deciding the subsequent cases. It is not open to accepting
determination in a mechanical manner without considering the merit.
Such determination cannot be said to be binding. We have come across
several decisions where the High Court is adopting the previous decisions
as binding. The determination of compensation in each case depends B
.upon the nature of land and what is the evidence adduced in each case,
may be that better evidence has been adduced in later case regarding
the actual value of property and subsequent sale deeds after the award
and before preliminary notification under section 4 are also to be
considered, if filed. It is not proper to ignore the evidence adduced in
the case at hand. The compensation cannot be determined by blindly C
following the previous award/judgment. It has to be considered only a
piece of evidence not beyond that. Court has to apply the judicial mind
and is supposed not to follow the previous awards without due
consideration of the facts and circumstances and evidence adduced in
the case in question. The current value reflected by comparable sale
deeds is more reliable and binding for determination of compensation in D
such cases award/judgment relating to an acquisition made before 5 to
10 years cannot form the safe basis for determining compensation.
15. The awards and judgment in the cases of others not being
inter parties are not binding as precedents. Recently, we have seen the
.trend of the courts to follow them blindly probably under the E
misconception of the concept of equality and fair treatment. The courts
are being swayed away and this approach in the absence of and similar
nature and situation of land is causing more injustice and tantamount to
giving equal treatment in the case ofunequal's. As per situation of a
village, nature of land its value differ from the distance to distance even F
two to three-kilometer distance may also make the material difference
in.value. Land abutting Highway may fetch higher value but not land
situated in interior villages.
16. The previous awards/judgments are the only piece of evidence
at par with comparative sale transactions. The similarity of the land G
covered by previous judgment/award is required to be proved like any
other comparative exemplar. In case previous award/judgment is based
on exemplar, which is not similar or acceptable, previous award/judgment
of court cannot be said to be binding. Such determination has to be out
rightly rejected. In case some mistake has been done in awarding
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1008 SUPREME COURT REPORTS [2017] 8 S.C.R.

A compensation, it cannot be followed on the ground of parity an illegality
cannot be perpetuated. Such award/judgment would be wholly irrelevant.
17. There is yet another serious infirmity seen in following the
judgment or award passed in acquisition made before 10 to 12 years and
price is being determined on that basis by giving either flat increase or
B cumulative increase as per the choice of individual Judge without going
into the factual scenario. The said method of determining compensation
is available only when there is absence of sale transaction before
issuance of notification under section 4 of the Act and for giving annual
increase, evidence should reflect that price of land had appreciated
regularly and did not remain static. The Recent trend for last several
C years indicates that price ofland is more or less static if it has not gone
down. At present, there is no appreciation of value. Thus, in our opinion,
it is not a very safe method of determining compensation.
18. To base determination ofcompensation on a previous award/
judgment, the evidence considered in the previous judgment/ award and
D its acceptability on judicial parameters has to be necessarily gone into,
otherwise, /gross injustice may be caused to any of the parties. In case
some gross mistake or illegality has been committed in previous award/
judgment of not making deduction etc. and/or sufficient evidence had
not been adduced and better evidence is adduced in case at hand, previous
E award/judgment being not inter-parties cannot be followed and ifland is
not similar in nature in all aspects it has to be out-rightly rejected as done
in the case of comparative exemplars. Sale deeds are at par for
evidentiary value with such awards of the court as court bases its
conclusions on such transaction only, to ultimately determine the value
of the property.
F
19. To rely upon judgment/award in case it does not form part of
evidence recorded by reference court, an application under Order 41
Rule 27 is to be filed to adduce evidence and if it is allowed opposite
party has to be given opportunity to lead evidence in rebuttal. The award/
judgment cannot be taken into consideration while hearing arguments
G unless they form part of evidence in the case. A three-Judge Bench of
this Court has considered the value of previous award and sale exemplar
in The Land Acquisition Officer, City Improvement Trust Board vs.
H. Narayanaiah & Ors. (1976) 4 SCC 9, judgment of the Court was
accepted as relevant evidence under Order 41 Rule 27 by the High
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MANOJ KUMAR ETC. ETC. v. STATE OF HARYANA 1009

Court. Though, appeal was pending against it. This Court held that A
there could be no res judicata. In such cases, as the previous judgment
was not inter-parties. The opposite party was not given opportunity by
the High Court to show that land was different. The decision of High
Court was held to be against the provisions of the Evidence Act, which
regulate admissibility of all evidence including judgments. Such judgments B
are in personam. This Court has observed:
"26, It is apparent that Section 43 enacts that judgments other
than those falling under Sections 40 to 42 are irrelevant unless
they fall under some other provision of the Evidence Act; and,
even if they do fall under any such other provision, all that is
relevant, under Section 43 of the Evidence Act, is "the existence" C
of such judgment, order, or decree provided it "is a fact in issue,
or is relevant under some other provision of this Act". An obvious
instance of such other provision is a judgment falling under Section
13 of the Evidence Act. The illustration to Section 13 of the
Evidence Act indicates the kind of facts on which the existence D
of judgments may be relevant.
27. In Special Land Acquisition Officer, Bombay v. Lakhamsi
Ghelabhai AIR 1960 Born 78, Shelat, J. held that judgments not
inter partes, relating to land acquired are not admissible merely
because the land dealt with in the judgment was situated near the E
land of which the value is to be determined. It was held there that
such judgments would, fall neither under Section 11 nor under
Section 13 of the Evidence Act. Questions relating to value of
· particular pieces ofland depend upon the evidence in the particular
case in which those facts are proved. They embody findings or
opinions relating to facts in issue and investigated in different cases. F
The existence of a judgment would not prove the value of
some piece ofland not dealt with at all in the judgment admitted
in evidence. Even slight differences in situation can,
sometimes, cause considerable differences in value. We do
not think it necessary to take so restrictive a view of the G
provisions of Sections 11 and 13 of the Evidence Act as to
exclude such judgments altogether from evidence even when
good grounds are made out for their admission. In Khaja
Fizuddin v. State of Andhra Pradesh (C.A. No. 176of1962,
decided on April JO, 1963), a Bench of three Judges of this
H
1010 SUPREME COURT REPORTS [2017] 8 S.C.R.

A Court held such judgments to be relevant if they relate to
similarly situated properties and contain determinations of
value on dates fairly proximate to the relevant date in a case.
28. The Karnataka High Court had, however, not complied
with provisions of Order 41 Rule 27 of the CPC which require
B that an appellate court should be satisfied that the additional
evidence is required to enable it either to pronounce judgment or
for any other substantial cause. It had recorded no reasons to
show that it had considered the requirements of Rule 27 Order41
of the CPC We are of opinion that the High Court should have
recorded its reasons to show why it found the admission of such
c evidence to be necessary for some substantial reason. And if it
found it necessary to admit it, an opportunity should have
been given to the appellant to rebut any inference arising
from its existence by leading other evidence.
29. The result is that we allow these appeals and set aside the
D judgment and order of the Kamataka High Court and direct it to
decide the cases afresh on evidence on record, so as to determine
the market value of the land acquired on the date of the notification
under Section 16 of the Bangalore Act. It will also decide the
question, after affording parties opportunities to lead necessary
E evidence, whether the judgment, sought to be offered as
additional evidence, could be admitted. (Emphasis supplied)
This Court has clearly laid down that such judgment/award cannot
be received in evidence and considered without giving an opportunity of
rebuttal to opposite parties by adducing evidence. At the stag1o of appeal
F if award/ judgment has to be read in evidence an application has to be
filed under Order 41 Rule 27 of the Act to take additional evidence on
record and if allowt:d, orportunity to lead evidence in rebuttal has to be
allowed.
20. ln Primers House Pvt. ltd. vs. M~t. Saiyadan (dead) by
G L.Rs. & Ors. ( 1994) 2 SCC 133, A three-Judge Bench of this Court had
considered the value of previous awards and sale exemplar to be similar.
It observed:
"16. If the comparable sales or previous awards are more than
one, whether the average price fetched by all the comparable
H
MANOJ KUMAR ETC. ETC. v. STATE OF HARYANA 1011

sales should form the 'price basis' for determination of the market A
value of the acquired land or the price fetched by the nearest or
closest of the comparable sales should alone form the 'price basis'
for determination of the market value of the acquired land, being
the real point requiring our consideration here, we shall deal with
it. When several sale-deeds or previous awards are produced B
in court as evidence of comparable sales, court has to
necessarily examine every sale or award to find out as to
what is the land which is the subject of sale or award and as
to what is the price fetched by its sale or by the award made
therefor.
17. If the sale is found to be a genuine one or the award is an C
. accepted one, and the sale or award pertains to land which
was sold or acquired at about the time of publication of
preliminary notification under the Act in respect of the
acquired land, the market value of which has to be determined,
the court has to mark the location and the.features (advantages D
and disadvantages) of the lana covered by the sale or the
award. This process involves the marking by court of the size,
shape, tenure, potentiality etc. of the land. Keeping in view the
various factors marked or noticed respecting the land covered by
the ·sale or award, as the case may be, presence or absence of
such factors, degree of presence or degree of absence of such E
factors in the acquired land the market value of which has to be
determined, should be seen. When so seen, if it is found that the
land covered by the sale or award, as the case may be, is almost
identical with the acquired land under consideration, the land under
the sale or the market value determined for the land in the award F
could be taken by the court as the 'price basis' for determining
the market value of the acquired land under consideration. If there
are more comparable sales or awards oft he same type, no difficulty
arises since the 'price basis' to be got from them would be common.
But, difficulty arises when the comparable sales or awards are
not of the same kind and when each of them furnish a different G
'price basis'. This difficulty cannot be overcome by averaging
the prices fetched by all the comparable sales or awards for getting
the 'price basis' on which the market value of the acquired land
could be determined. It is so, for the obvious reason that such
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1012 SUPREME COURT REPORTS [2017] 8 S.C.R.

A 'price basis' may vary largely depending even on comparable sales
or awards. Moreover, 'price basis' got by averaging comparable
sales or awards which are not of the same kind, cannot be correct
reflection of the price which the willing seller would have got
from the willing buyer, if the acquired land had been sold in the
market. For instance, in the case on hand, there are three claimants.
B
The plots of their acquired land, which are five in number, are not
similar, in that, their location, size, shape vary greatly. One plot of
land of one claimant and another plot of another claimant appear
to be of one type. Another plot of land of one of them appears to
be of a different type. Yet another plot of the second of them
c appears to be different. Insofar as third claimant's plot of land is
concerned, it appears to be altogether different from the rest.
Therefore, if each of the claimants were to sell her/his respective
plots ofland in the open market, it is impossible to think that they
would have got a uniform rate for their lands. The position cannot
be different if the comparable sales or awards when relate to
D
different lands. Therefore, when there are several comparable
sales or awards pertaining to different lands, what is required
of the court is to choose that sale or award relating to a land
which closely or nearly compares with the plot of land the
market value of which it has to determine, and to take the
E price of land ofsuch sale or award as the basis for determining
the market value of the land under consideration."
(emphasis supplied)
21. In Karan Singh & Ors. vs. Union of India ( l 997) 8 SCC
186, this Court held that evidence has to be adduced to show similarity
F of the land in question to the one covered by previous award/judgment.
This Court observed:
"8. Learned counsel for the appellants then urged that the High
Court erroneously discarded Ext. A-11 which was an award in
respect of a land at Village Jhilmil Tahirpur on the ground that it
G was not a previous judgment of the Court. The land comprised in
the award was acquired under notification issued under Section 4
of the Act on 27-7-1981. By the said award, the Court awarded
compensation@ Rs 625 per sq. yd. It has earlier been seen that
in the present case the notification issued under Section 4 of the
H
MANOJ KUMAR ETC. ETC. v. STATE OF HARYANA 1013

Act was earlier in point of time than the notification issued for A
acquisition of land comprised in Ext. A-11. There is no quarrel
with the proposition that judgments ofcourts in land acquisition
cases or awards given by the Land Acquisition Officers can
be relied upon as a good piece of evidence for determining
the market value of the land acquired under certain B
circumstances. One of the circumstances being that .such an
award or judgment of the court of law must be a previous
judgment. In the case of Pal Singh v. · Union Territory of
Chandigarh(1992) 4 SCC 400, it was observed thus: (SCC pp.
402-03, para 5)
"But what cannot be overlooked is, that for a judgment relating C
to value ofland to be admitted in evidence either as an instance
or as one from which the market value of the acquired land
could be inferred or deduced, must have been a previous
judgment of court and as an instance, it must have been
proved by the person relying upon such judgment by D
adducing evidence aliunde that due regard being given to
all attendant facts and circumstances, it could furnish the
basis for determining the market value of the acquired
land."
Following this decision, we hold that it is only the previous E
judgment of a court or an award which can be made the basis
for assessment of the market value of the acquired land subject
to party relying on such judgment to adduce evidence for
showing that due regard being given to all attendant facts it could
form the basis for fixing the market value of acquired land."
F
(emphasis supplied)
22. In Ranvir Singh & Am: v. Union of India (2005) 12 SCC
59, this Court considered value of previous judgment/award and held
·that it is only piece of evidence. There cannot be fixed criteria for
determining compensation at any fixed rate, observing that: G
"36. Furthermore, a judgment or award determining the
amount of compensation is not conclusive. The same would
merely be a piece of evidence. There cannot be any fixed
criteria for determining the increase in the value of land at a
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1014 SUPREME COURT REPORTS (2017] 8 S.C.R.

A fixed rate. We, therefore, are unable to accept the contention of
Mr. Nariman that as in one case we have fixed the valuation at
Rs 7000 per bigha wherein the lands were acquired in the year
1961, applying the rule of escalation the market rate should be
determined by calculating the increase in the prices at the rate of
12% per annum. We do not find any justifiable reasvu to base our
B
decision only on the said criterion."
(emphasis supplied)
23. A three-Judge Bench in Special Land Acquisition Officer.
Mysore Urban Development Authority v. Sakamma (2010) 14 SCC
c 50.i has observed in absence of evidence as to comparable land, award/
judgment in another case cannot be accepted. This Court held:
"8. There is no evidence to show that the acquired lands at
Keragalli and Maragowdanahalli are comparable lands with similar
market value. The distance, the extent of development and the
D facilities available in the two villages make it clear that the award
made by the Reference Court with reference to an acquisition in
Maragowdanahalli Village cannot be the basis for determining
the market value for the lands at Keragalli.
9. We are of the view that the Reference Court and the High
E Court committed a serious error in relying upon the judgment (Ext.
P-2) relating to Maragowdanahalli, to determine the market value
oflands at Keragalli. If Ext. P-2 is excluded, we find that there is
no evidence to determine the market value, as the only other
document relied upon by the landowners was a sale transaction
of 2007 which being nearly one decade after the acquisition, is
F not of any assistance. We also find that no evidence has been let
in by the appellant in regard to the market value though the award
of the Land Acquisition Officer refers t0 sale transactions during
1997-1998 showing a value of Rs 2,50,000 per acre in Ker 2a!Ii.
0

But those sale deeds were not produced.
G I0. We are also told that the reference cases in regard to several
other lands under the same acquisition are still pending before the
Reference Court and some cases are pending in the High Court.
In the absence of any acceptable evidence, it is not possible for
us to determine the market value. It would appear that sale
H
MANOJ KUMAR ETC. ETC. v. STATE OF HARYANA 1015

transactions relating to 1996-1998 for lands near to acquired lands A
are available but not produced. maybe. We cannot obviously rely
upon them as they are produced for the first time in this Court and
the landowners did not have an opportunity to have their say in
regard to such transactions by letting evidence. Interests ofjustice,
therefore, requires that the matter should the."
B
24. Basic principle before following award/judgment or
comparative sales is that land should be comparable in nature and quality
as laid_ down in State of Madhya Pradesh vs. Kanshi Ram (2014) 100
SCC 506 and Hirabai & Ors. vs. Land Acquisition Officer-cum-
Assistant Commission (2010) 10 SCC 492 and in close proximity of
time to preliminary notification under section 4 of the Act. In the instant C
case, we hold that the High Court could not have followed the judgment
in a blind manner as done without due consideration of various aspects.
25. The High Court has observed that the decision in Swaran
s
Singh case has been affirmed by the judgment of the Supreme Court.
As a matter of fact, the special leave petition was dismissed. The D
·dismissal of the special leave petition without assigning ofreason cannot
be treated as a binding precedent of this Court. The High Court treated
as if this Court has decided the matter on merits and has approved the
decision of the High Court. Even ifthat be so, the Courts are bound to
take into consideration the various aspects as discussed in each and E
every case before relying upon and following the award or judgment in
other cases relating to determination of the compensation as there is no
res judicata in such cases. In each case, some change in the factual
scenario is bound to be there such as quality of the land, category, time
gap and largeness and smallness, deduction to be made. There are various
factors which have to be taken into consideration only then, decision has F
to be rendered.
26. This Court in Chimanlal Hargovind Das vs. Special Land
Acquisition Officer, Poona & Anr. (1988) 3 SCC 751 has laid down
broad principles to be followed in the case of determination of
compensation thus: G
"4. The following factors must be etched on the mental screen:
(l)A reference under Section 18 of the Land Acquisition Act
is not an appeal against the award and the court cannot take into
H
1016 SUPREME COURT REPORTS (2017] 8 S.C.R.

A account the material relied upon by the Land Acquisition Officer
in his award unless the same material is produced and proved
before the court.
(2) So also the award of the Land Acquisition Officer is not to
be treated as a judgment of the trial court open or exposed to
B challenge before the court hearing the reference. It is merely an
offer made by the Land Acquisition Officer and the material utilised
by him for making his valuation cannot be utilised by the court
unless produced and proved before it. It is not the fum;tion of the
court to sit in appeal against the award, approve or disapprove its
reasoning, or correct its error or affirm, modify or reverse the
c conclusion reached by the Land Acquisition Officer, as ifit were
an appellate court.
(3) The court has to treat the reference as an original
proceeding before it and determine the market value afresh on
the basis of the material produced before it.
D (4) The claimant is in the position of a plaintiff who has to
show that the price offered for his land in the award is inadequate
on the basis of the materials produced in the court. Of course the
materials placed and proved by the other side can also be taken
into account for this purpose.
E (5) The market value of land under acquisition has to be
determined as on the crucial date of publication of the notification
under Section 4 of the Land Acquisition Act (dates of notifications
under Sections 6 and 9 are irrelevant).
(6) The determination has to be made standing on the date line
F of valuation (date of publication of notification under Section 4)
as if the valuer is a hypothetical purchaser willing to purchase
land from the open market and is prepared to pay a reasonable
price as on that day. It has also to be assumed that the vendor is
willing to sell the land at a reasonable price.
G (7) In doing so by the instances method, the court has to
correlate the market value reflected in the most comparable
instance, which provides the index of market value.
(8) Only genuine instances have to be taken into account.
(Sometimes instances are rigged up in anticipation of acquisition
ofland.)
H
MANOJ KUMAR ETC. ETC. v. STATE OF HARYANA 1017

(9) Even post-notification instances can be taken into account A
(I) if they are very proximate, (2) genuine and (3) the acquisition
itself has not motivated the purchaser to pay a higher price on
account of the resultant irnprovement in development prospects.
(10) The most comparable instances out of the genuine
instances have to be identified on the following considerations: B
(i) proximity from time angle,
(ii) proximity from situation angle.
(11) Having identified the instances which provide the index
of market value the price reflected therein may the as the norm c
and the market valm: of the land under acquisition may be deduced
by making suitable adjustments for the plus and minus factors vis-
a-vis land under acquisition by placing the two in juxtaposition.
(12)A balam:e sheet of plus and minus factors may be drawn
for this purpose and the relevant factors may be evaluated a price D
variation as a prudent purchaser would do.
( 13) The market value of the land under acquisition has
thereafter to be deduced by loading the price reflected in the
instance taken as norm for plus factors and unloading it for minus.
factors.
E
(14) The exercise indicated in clauses (11) to (13) has to be
undertaken in a common sense manner, as a prudent man of the
world ofbusiness would do. We may illustrate some such illustrative
(not exhaustive) factors:
Plus factors Minus factors F
I.smallness of size 1. largeness of area

2.proximity to a road 2. situation in the
interior at a
distance from
the road G

3. frontage on a road 3. narrow strip of
land with very
small frontage
compared to depth
H
1018 SUPREME COURT REPORTS (2017] 8 S.C.R.

A 4. nearness to 4. lower level
developed area requiring the depressed
portion to be
filled up
5. regular shape 5. remoteness from
developed locality
B
6. level vis-a-vis 6. some special
land under disadvantageous factor
acquisition which would deter a
purchaser
7. special value for
c an owner of an adjoining
property to whom it may
have some very special
advantage

D ( 15) The evaluation of these factors of course depends on the
facts of each case. There cannot be any hard and fast or rigid
rule. Common sense is the best and most reliable guide. For
instance, take the factor regarding the size. A building plot ofland
say 500 to 1000 sq. yds. cannot be compared with a large tract or
block ofland of say 10,000 sq. yds. or more. Firstly while a smaller
E
plot is within the reach of many, a large block of land will have to
be developed by preparing a lay out, carving out roads, leaving
open space, plotting out smaller plots, waiting for purchasers
(meanwhile the invested money will be blocked up) and the hazards
of an entrepreneur. The factor can be discounted by making a
F deduction by way of an allowance at an appropriate rate ranging
approximately between 20 per cent to 50 per cent to account for
land required to be set apart for carving out lands and plotting out
small plots. The discounting will to some extent also depend on
whether it is a rural area or urban area, whether building activity
is picking µp, and whether waiting period during which the capital
G
of the entrepreneur would be locked up, will be longer or shorter
and the attendant hazards.
( 16) Every case must be dealt with on its own fact pattern
bearing in mind all these factors as a prudent purchaser of land in
which position the judge must place himself.
H
MANOJ.KUMAR ETC. ETC. v. STATE OF HARYANA 1019

(17) These are general guidelines to be applied with A ·
understanding informed with common sense."
27. When we take into consideration various sale transactions,
even if we choose out of sale deeds which had been placed on record,
.one of the transaction reflects the price of approximately Rs.2,500/- per
square yard. When we consider the d~cision of Swaran Singh, the B
compensation has been determined by the High Court with respect to
Notification dated 28.4.1999.' The Award was passed, on the basis of
the transaction dated l 0.6.1997, at the rate of Rs.1560/- per square
meter between Power Grid Corporation and HUDA.
28. The High Court has fixed the compensation at Rs.1560/- per c
square meter in the case of Swaran Singh (supra). In the case of
Swaran Singh (supra), the High Court has observed that it was prepared
to make reductfon at about 20% but, as the transaction took place in the
year 1997, an escalation at about l 0% per year would offset the reduction . \

that might be required. Then the value of the land under Ex.PS on
l 0.6.1997 has been taken into consideration. Thus the arguments raised D
by the learned counsel for the State that in the Swaran Singh 's case, no
cut had been applied, cannot be said to be correct but at the same time,
the adequate cut had not been applied in said case for development
.when large tract is acquired. The Certain area has to be utilized in
development. E
29. Though we could have discarded decisions of Swarna Singh
in toto. However considering the sale transactions of subsequeJ!t. year
also the compensation has to be worked out. We take .into consideration .... •
both.
30. The High Court has determined the compensation in the instant F
case by adding 15% cumulatively over and above what has been
determined in the case of Swaran Singh. The High Court has given
compensation at the rate of Rs.3610/- per square meters i.e.
Rs. l,46,09,000/- per acre.
31. The High Court has granted 15% cumulative increase which G
was not justified. In the decision of Om Prakash (supra) 12% increase
was given. Even if we accept some increase annually due to development
made after previous acquisition but that could not have been granted on
cumulative basis but on a flat basis, that too considering subsequent rate
offered for nearby areas. There was no justification to grant 15%
H
1020 SUPREME COURT REPORTS [2017] 8 S.C.R.

A cumulative increase per annum. Normally 10% to 12% flat increase is
to be given, as observed in Haridwar Development Authority v.
Raghubir Singh & Ors. (2010) 11 SCC 581.
32. Even if we calculate compensation by adding between 12 to
13% flat increase, taking base price at Rs.1560/- granted in the case of
B Swaran Singh in the facts of the case, the price would come
approximately to Rs. I. I0 crores per acre. Further deduction in addition
to deduction made in Swaran Singh's case (supra) is required to be
made towards · :velopment, it would be appropriate to deduct further
amount of Rs.15 lakhs. Thus the compensation that we award comes to
Rs.95 lakhs per acre, not Rs.1,46,09,000/- as determined by the High
C Court. Approximation of compensation, when made on comparable sale
method, would by and large be similar. We reduce the amount awarded
by the High Court. Thus, we deem it appropriate to award the amount
@ Rs.95 lakhs per acre along with statutory benefits.
33. The appeals filed by the State are partly allowed and the appeals
D preferred by the landowners are hereby dismissed.
No costs.

Devika Gujral Appeals disposed of.