Supreme Court of India
RAJASHEKHAR SANKAPPA TARADANDI AND ORSversusTHE ASSTT. COMMISSIONER AND LAND ACQUISITION OFFICER AND ORS.
- Citation
- 1996 INSC 398
- Decided
- 15 March 1996
- Disposal
- Dismissed
Holding
Compensation for land acquired under the Act must be based on its market value at the date of the acquisition notification, and future potentiality cannot be considered; thus the High Court’s reduction to Rs 65,000 per acre is correct.
Summary
The appellant challenged the Karnataka High Court’s reduction of compensation for 13 acres of land acquired under a 1979 notification. The land, situated at a considerable distance from any developed area, was initially valued at Rs 18,000 per acre by the Land Acquisition Officer, later inflated to Rs 5,61,729 per acre by the reference civil court, and finally reduced to Rs 65,000 per acre by the High Court. The Supreme Court examined whether the future potentiality of the land could be considered in valuation under Section 24 of the Land Acquisition Act, 1894. It held that compensation must be based on the market value as of the date of the Section 4(1) notification, without regard to speculative future use. Consequently, the High Court’s award of Rs 65,000 per acre was affirmed and the appeal dismissed without costs.
Issues considered
- Whether the future potentiality of land can be taken into account in determining compensation under Section 24, clause fifthly of the Land Acquisition Act, 1894.
- Whether the Karnataka High Court was correct in reducing the compensation from the reference court’s award to Rs 65,000 per acre.
Legislation cited
- Land Acquisition Act, 1894s. 23, s. 24, s. 4(1)
Subjects
Land acquisitionCompensationMarket valueFuture potentialitySection 24Supreme CourtKarnataka High CourtSpecial leaveValuation
Judgment
I
RAJASHEKHAR SANKAPPA TARADANDI AND ORS. A
v.
THE ASSTT. COMMISSIONER AND LAND ACQUISITION
OFFICER AND ORS.
MARCH 15, 1996
B
[K. RAMASWAMY AND G.T. NANAVATI, .I.I.]
Land Acquisition Ac~ 1894: Sections 4(1), 23 and 24 Clause fifthly.
Land Acquisition~ompensation-Principle for detemiination-Fu- C
ture potentiality of land cannot be taken into account.
Land Acquisition-Notification issued in 1979-Land acquired situated
at considerable distance from developed area-On date of notification there
was no development in are~ompensation awarded @ Rs. 18,000 per
acre--Compensation enhanced to sky-high rate of Ri. 5,61,729 by Refernnce D
Cowt-Reduction of compensation by High Court and award @ Rs. 6.5; 000
per acre--Conunissioner ap]Jointed in the case had stated existed feattures of
1992-By the time of inspection i.e. between 1979 and 1992 much develop-
mellt taking plac~Held in the circumstances his evidence not 1ightly relied
upon-Reference Cowt was not justified •in indulging feats of imagination
Dete1111ination of compensation by High Cawt held correct. E
Periyar and Pm~ekamii Rubbers Ltd. v. State of Kera/a, (1990) SC
2192, referred to.
Leave granted.
F
We have heard the counsel on both sides.
Notification under Section 4(1) of the Land Acquisition Act 1of1894
(for short the 'Act') acquiring 13 acres 29 gunthas of land near Dharwad
city for extension of the A.P.M.C. Yard, was published on December 20,
1979. The Land Acquisition Officer in his award dated September 23, 1986 G
determined the compensation at the rate of Rs. 18,000 per acre. On
reference, the civil Court, exhibiting its feats of imagination, and by award
and decree dated April 24, 1992 determined the compensation at the rate
of Rs. 12.90 per sq. ft., which worked out to Rs. 5,61,729 per acre. On
appeal, in MFA No. 2455/92 by judgment and order dated March 4, 1994 H
503
-
504 SUPREME COURT REPORTS (1996] 3 S.C.R.
A the Karnataka High Court has reduced the compensation to Rs. 65,000 per
acre. Thus this appeal by special leave.
Shri Vidya Sagar, learned counsel for the appellant has contended
that High Court having found that the lands are situated near developed
area and also in view of the evidence of the Commissioner appointed in
B this case, has committed grievous error of law in reducing the compensa-
tion to Rs. 65,000 per acre. We find no force in the contention. The
evidence discloses that the developed area was at a considerable distance. ·
The nearest developed place - central bus stand - is situated at a distance
of 1-1J2 to 2.00 k.m. from the acquired land. The Commissioner appointed
C in this case has stated the existing features of the year 1992. By the time
of his inspection, i.e., between 1979 and 1992 much development had taken
place and, therefore, no reliance was rightly placed on the evidence of the
Commissioner. The High Court has considered the circumstances that the
lands had potentiality as non-agricultural land and that their value has been
D determined on that basis. After considering all the relevant aspects, the
value of the lands was determined at the rate of Rs. 65,000 per acre.
In is settled law that the court has the duty to carefully evaluate the
evidence and determine the compensation which is just and adequate for
the lands acquired under compulsory acquisition. It is also settled law that
E the court has to sit in the arm chair of a willing purchaser in an open
market with prevailing market conditions as on the date of publication of
Section 4(1) notification and to determine whether a willing purchaser, if
offered the lands in an open market for sale, would be prepared to
purchase the land at the rate at which the court is called upon to determine
F compensation on the basis of evidence on record. Unfortunately, the Civil
Judge had exhibited, as stated earlier, his feats of imagination and deter-
mined the compensation at sky-high rate on the basis of three sale deeds,
Ex. P-8 to Ex. P-10, of which two sale deeds relate to small extents of 92
sq. yards and 128 sq. yards. The High Court, therefore, rightly determined
the compensation by reducing the value by 10% and fixed at 12.90 per sq.
G ft. This Court in Periyar mid Pareekanni Rubbers Ltd. v. State of Kera/a,
AIR (1990) SC 2192 at 2198, para 8 described the official conduct within
the net of misconduct thus :
"In appropriate cases it may be open to draw inferences even from
H judicial acts of the misconduct. The rule of conduct spurned by
I'
t
I
RAJASHEKHAR SANKAPPA '· AS SIT. COMMR AND LAND ACQN. OFFICER 505
this Court squarely put the nail on the official act as a refuge to A
fix arbitrary and unreasonable market value and the person con-
cerned shall not camouflage the official act to a hidden conduct
in the function of fixing arbitrary or unreasonable compensation
to the acquired land."
The High Court has rightly rejected the approach adopted by the B
reference Court. In view of the fact that as on the date of the notification
there was no development in that area, though the lands were capable to
be put to non-agricultural use and that Section 24, clause fifthly prohibits
taking into consideration of the future potentiality because of acquisition
in determining compensation, the High Court rightly had determined the C
compensation at Rs. 65, 000 per acre. As the State did not file any appeal,
we confirm the High Court order and find no justification to further
enhance the market value.
The appeal is accordingly dismissed, but, m the circumstances,
without costs. D
T.N.A Appeal dismissed.
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