Holding

The court held that compensation must be determined using the comparable‑sales method, that the High Court should have added Rs.1 per sq. yard for price‑rise, that the building’s just equivalent price is Rs.1,46,820, and that solatium is correctly fixed at 10% under the Rajasthan Act.

Summary

The appellant's property was requisitioned under the Defence of India Act, 1962 and later acquired under the Requisitioning and Acquisition of Immovable Property Act, 1952. An arbitrator fixed compensation of Rs.2,50,000 for the building and Rs.7.50 per sq. yard for the land, but the Rajasthan High Court reduced these amounts to Rs.1,41,100 and Rs.4 per sq. yard respectively and fixed solatium at 10%. The appellant appealed, contending that the valuation should reflect open‑market price, that comparable sales and price‑rise trends were ignored, that the building value should include omitted items, and that solatium should be 15% under the Central Act. The Supreme Court held that the comparable‑sales method is appropriate, that the High Court correctly used certain sale deeds but must add Rs.1 per sq. yard for price‑rise, making the land value Rs.5 per sq. yard, and that the building value should be Rs.1,46,820 after adding Rs.5,720 for omitted items. It also affirmed that solatium must be 10% under the Rajasthan Land Acquisition Act. The appeal was partly allowed, modifying the compensation awarded by the High Court.

Issues considered

The appropriate method of valuation for compensation under s.8(3) of the Requisitioning and Acquisition Act
Whether sale deeds of lands in the vicinity constitute comparable sales for valuation
Whether the trend in land price rise between 1961 and 1967 should be accounted for
Whether the building's market value should be the arbitrator's award or the High Court's assessment plus omitted items
Whether solatium should be fixed at 15% under the Central Land Acquisition Act or 10% under the Rajasthan Land Acquisition Act

Legislation cited

Central Land Acquisition Act
Defence of India Act, 1962s. 29, s. 36
Rajasthan Land Acquisition Act, 1952s. 23(2)
Requisitioning and Acquisition of Immovable Property Act, 1952s. 7, s. 8(3)

Subjects

land acquisitioncompensationvaluationcomparable sales methodsolatiumprice riseRequisitioning and Acquisition Acthigh court appeal

Judgment

~

~
RAO NARAIN SINGH (DEAD) BY L.RS. A
v.
UNION OF INDIA

APRIL 6, 1993
~
B
[B.P. JEEVAN REDDY AND N. VENKATACHALA, JJ.)

Land Acquisition:

Requisitioning and Acquisition of Immovable Property Act, 1952: Ss.
7, S-Acquisition of requisitioned property--<:ompensation-Detennination c
, of-Valuation of land-'Comparable Sales MethodL../leld, when patties
~
produce evidence of sales of lands in the vicinity of acquired land; 'com-
parable sales method' is a 'healthy criterion' for determining the market value.

Rajasthan Land Acquisition Ac4 195~S.23(2) Solatiunr-To be paid D
for land acquired under Requisitioning and Acquisition Ac4 1952 cannot be
a benefit of solatium not available for a land acquired under Stute Act.

The respondent-Union of India requisitioned certain properties or
~ the land-owner-appellant comprising, a building and 1,38,117.20 sq. yards
or land appurtenant thereto and acquired the same In May, 1967 under E
the provisions of the Defence of India Act 1962. After the Defence of India
....... Act ceased to have its force, the Collector exercising the powers under the
Requisitioning and Acquisition of Immovable Property Act 1952 (the Act),
offered to the appellant on 10.9.1968 a sum of Rs.S,32,594 as total compen-
sation for the acquired building and land. The appellant rejected the offer F
)-· as inadequate. Consequently, an arbitrator was appointed under S.8(1)(b)
of the Act. The appellant claimed Rs.2,S0,000 for the buildiflg and· Rs.10
per sq. yard for the acquired land as compensation.

The Arbitrator, by his award, fIXed the market value at Rs.2,S0,000
G

•
of the building and Rs.7.SO per sq. yi\rd of the land and Rs.2,000 as
damages for loss of access to appellant's nnacquired land. Solatium at the
rate of 15 per cent on the market value of the land, and -interest at the rate
of 6% per annum was also awarded. Two appeals - one by the land-owner
seeking enhancement and the other by the Union of India seeking reduc-
lion in the amount of compensation-were filed before the High Court. H
969
970 SUPREME COURT REPORTS [1993] 2 S.C.R. ~
A The High Court dismissed the appeal of the land owner and partly
allowed that of. the Union of India. It reduced the compensation to
Rs.1,41,100 for the building and Rs.4 per sq. yard for the land. Solatium
at a uniform rate of 10 per cent on the market value of the building and ":Jo'
the land and interest at 4% per annum was (rovided. Aggrieved, the land
owner liled the appeal by special leave.
B
The appellant contended that the High Court erred in not awarding
the compensation liable to be paid under s.8(3) of the Requisitioning and .,j
Acquisition Act inasmuch as the price of the property determined by the
High Court fell far short of what the property would have fetched if it bad
C been sold in the open market on the date of its acquisition; that the High
Court did not take into consideration the prices fetched under sale deeds
of similar lands in the vicinity of the acquired land, and trend in price rise
f
of lands; that solatium should have been awarded .at 15 per cent as
permissible under the Central Land Acquisition Act and not at the rate of
D 10 per cent under the Rajathan Land Acquisition Act.

Allowing the appeal in part, this fourt,

HELD: 1.1. Method of valuation to be resorted to by a court in
determining acquired land's just equivalent price has to necessarily"'-
depend on the nature of evidence adduced by parties in that regard. When,
E
in a given case, the parties produce evidence of sales relating to the land
or lands in the vicinity of the acquired land and require the concerned
court to determine the compensation payable for such acquired land, the
court can resort to 'the Comparable Sales Method' of Valuation of land
which is a healthy criterion for determining the market value of an
.F acquired land. [p. 975 C-E] '-1
Atmaram v. Collector of Nagpur, AIR 1929 P.C. 92, referred and
Union of India v. Kamlabhai Harjiwandas Parekh & Ors., [1968] l SCR 463,
relied on.

G 1.2. The High Court was right in examining the sale deeds produced.
as evidence of comparable sales and in relying upon the sale deeds marked
as Ext.P-18 relating to sale of 26,733 sq. yards for Rs.3 per sq. yard which
was a portion of the acquired land, and Ext.P-10 relating to sale of 5124
sq. yards at the rate of Rs.3.50 per sq. yard situated to the close vicinity
H of the acquired land, and taking the prices Mched for them as criteria for
RAO NARAIN "· U.0.1. 971

determining the market value of the acquired land. A
[pp. 976 B-C; 977 E-H; 978 A-El

Bangarn Narasingha Rao .Naidu v. R.D.O. Vizia11agaram, (1980] 1

... sec 75, relied on.
The High Court rightly held the sale deeds, marked as Ext.P-4 and Ex.
P-19 ofland situated in populous area of the city and Sl!le deeds Exts.P-6 and
B

P-7 of small bits of lands as not comparable to the large extent of the acquired

- land situated at a place farther away from the city. [pp. 976 D·G; 977 A·D]

Collector of Lakhimpur v. Bhubdn Chandra Dutta, (1972] 4 SCC 236
c
and Prillm Raj Taneja v. State of M.P., [1977] 1 SCC 684, relied on.

1.3. The evidence in the case indicated trend in price-rise of lands in
the area of acquried land between the year 1961 when the appellant sold the
land adjacent to the acquired land and the year 1967 when the land in
question was acquired. Since the High Court determined the market value of D
·ihe acquired land without taking into account the trend of price-rise of lands
in the vicinity of the acquired land, it would be very just and prope< to add to
.the price of Rs.4 per sq. yard, as determined by the High Court, another Re.1
per sq. yard on account of the factor of price-rise of lands in the area of the
'J. acquired land.. Hence, the market value of the acquired land is determined E
at Rs.5 per sq. yard which would satisfy the principle of awarding to it, an
equivalent price. [pp. 979 B-H; 980-A]

- 1.4, The High Court was justified in fixing the market value of the
acquired building at Rs.1,41,100 on the basis of the estimate prepared and
approved by Rajasthan Public Works Department and produced on behalf F
of the land-owner. However, the High Court should have added to that
amount a sum of Rs.5,720, the price of items in the building which was left
. out in the estimate. Hence, the just equivalent price of the acquired
building would be Rs.1,41,100 plus Rs.5,720. [pp. 981 D-G]

2. The High Court rightly fixed the solatium at the rate of IO per G
cent on the amount of compensation payable for the land and the building
j>-.. under s.23(2) of the Rajasthan Land Acquisition Act, as the solatium to
be paid for the land acquired under the Requisitioning and Acquisition
Act, 1952 cannot be a benefit of solatium not available for a land acquired
under the State Act. [pp. 981 G-H; 982 A-Bl H
972 SuPREME COURT REPORTS [1993f 2 S.C.R. -~

A CIVIL APPELLATE JURISDICTION : Civil Appeal No.1799 of
1980.

From the Judgment and Order· dated 95.1980 of the Rajasthan High
Court in D.B. Civil First Appeal Nos. 54 & 56 of 1971.
..,
.

!
B U.R. Lalit, A.K. Sen and Ms. V.D. Khanna for the Appellant.

M.L. Verma (NP), Niranjana Singh, Ms. A. Subhashini (NP) and
C.V.S. Rao for the Respondent. --
The Judgment of the Court was delivered by
c
VENKATACHALA, J. This civil appeal by special leave is preferred
against the common judgment and separate decrees dated 95-1980 of the
Rajasthan High Court, dismissing Civil First Appeal No. 54 of 1971 in
which the appellant had sought enhanced compensation for his acquired
D property and partly allowing Civil First Appeal No-56 of 1971 of the Union
of India in which it had sought reduction in the market value of the same
acquired property.

The appellant, since deceased (represented by his Legal. Repre-
sentatives), was the owner in possession of a property known as 'Masuda
)._
E House' at Ajmer, comprised of a thirty year old building with a large extent

F
of land of about 70 Bighas, 14 Biswas, appurtenant thereto. On 24th April,
1%3, the Union of India, in exercise of its powers under Section 29 of the
Defence of India Act, 1962 (D.1. Act), requisitioned the said building and
land for stationing the Central Reserve Police Force (C.R.P.F.) and took
its posses.,ion. Then, on 5th May, 1967 the Collector of Ajmer, having
-
served a notice on the appellant under Section 36 of the D.I. Act, acquired ·---r
the said building and land. As the D.I. Act ceased to have its force with
effect from 10th July, 1968, the Collector of Ajmer took recourse to Section
8(1) of the Requisitioning and Acquisition of Immovable Property Act,
1952 - the Requisitioning and Acquisition Act and offered to the appellarit
G on 10th September, 1968 a sum of Rs. 5,32,594 as total compensation for
the acquired building and land. The appellant, rejected that offer of -~
compensation as inadequate. This situation led to the appointment of Shri
Updesh Narain Mathur, the Joint Legal Remembrancer for the State of
Rajasthan, as Arbitrator under Section 8{1){b) of the Requisitioning and
H Acquisition Act, for determining the just amount of compensation payable
r RAO NARAIN v. U.0.1. [VENKATACHALA, J.] 973

to the appellant for his acquired buidling and land. On a notice i~ued "by A
the Arbitrator to the appellant inviting his claim for compensation, the
appellant filed a claim-statement claiming Rs.2,50,000 as compensation for
the acquired building and Rs.10 per sq. yard as compensation for the
'( aquired land. The Arbitrator, purporting to act on evidence produced by
parties in an enquiry held by him for determining the compensation pay-
B
able to the appellant, made an award on 15th April, 1971. By that award,

- the market value of the acquired building was fixed at Rs.2,50,000 while
the market value of land was fixed at Rs.7.50 per sq. yard. Then, the
damages for loss of access to the appellant's unacquried land was fixed at
Rs.2,000. Further, the solatium payable on the total market value of the
c
-.. acquired land was fixed at 15 per cent while the interest on the total
compensation payable was fixed at 6 per cent per annum from the date of
the award to the date of payment. The appellant, who felt that the amount
of compensation awarded by the Arbitrator was inadequate, prefe~red an
appeal in the High Court seeking grant of enhanced compensation. The
Union of India which, on the contrary, felt that the amount of compensa-
D
.lion awarded by the Arbitrator was excessive, preferred an appeal in the
High Court seeking reduction in the amount of compensation. The High
Court which clubbed both the appeals and heard them, by its common
judgment partly allowed the appeal of the Union of India and dismissed
~
the appeal of the appellant. By that judgment the market value of the
building was reduced from Rs.2,50,000 to Rs.1,41,100 while the market E
value of the land was reduced from 7.50 per sq. yard to Rs.4 per sq. yard.
Solatium was given at a uniform rate of 10 per cent on the market value
of both the building and the land as against the rate of solatium of 15 per
cent, which had been given on the market value of the land by the award.
Interest at 4 per cent per annum on the amount of compensation was F
)- granted directing payment of that rate of interest on the total amount of
compensation from the date of acquisition till 2nd November, 1968, the
date on which Rs.4,59,150.84 paise was paid to the appellant and on the
balance amount of compensation from 3rd November, 1968 upto the date
of its payment to the appellant. That common judgment of the High Court
and the decrees made thereon, are appealed against by the appellant in G
'}>-- these appeals, where by grant of enhanced compensation is sought. Due to
the death of the appellant during the pendency of this appeal, his Legal
Representatives are permitted lo prosecute this appeal.

Shri A.K. Sen, the learned senior counsel for the appellant, con- H
974 SUPREME COURT REPORTS (1993) 2 S.C.R.

A tended before us that the market value of the acquired building as well as
the market value of the acquired land, determined by the High Court fell
far short of the price which each of them would have fetched in the open
market if had been sold on the date of their acquisition in the same
condition in which they were at the time of requisition and hence were not
B the respective prices liable to be paid for them under Section 8(3) of the
Requisitioning and Acquisition Act. Elaborating the contention, he argued
that the High Court in determining the market value of the acquired land
at Rs.4 per sq. yard had not taken into consideration the relevant factors,
such as, (i) the building potentiality of the acquired land, (ii) the prices
fetched under sale deeds. of similar land' in the vicinity of the acquired
-
C land and (iii) trend in price-rise of lands, which would have warranted
granting of a higher market value for it. He further contended that the High
Court ought not have reduced the market value of the acquired building
to an amount falling short of the amount fixed for it by the Arbitrator on
the basis of the estimate of its value prepared by Shri G.L. Sharma, a
D private Engineer and his own spot inspection report. As regards the
solatium awarded by the High Court at 10 per cent on the market value of
the acquired land and building, his contention was that such solatium
should have been awarded at the rate of 15 per cent as was permissible
under the Central Land Acquisition Act and nol at the rate of JO per cent
as was permissible under the Rajasthan Land Acquisition Act. The learned
E counsel for the Union of India, who refuted the said contentions advanced
on behalf of the appellant, sought to sustain the judgment of the High
Court.

The principal controversy which needs our decision in the light of
the above rival contentions since relates to the correctness of the amount
F
of compensation determined by the High Cou·rt as that payable for the
acquired land of 1.38,117.20 sq. yards, we shall proceed to deal with it at
the first instance.

Sub-section (3) of Section 8 of the Requisitioning and Acquisition
G Act, being the provision according to which the compensation payable for
the acquired land has lo be determined, it is excerpted :

'8(3). The compensation payable for the acquisition of any
property under section 7 shall be the price which the
H requisitioned property would have fetched in the open
RAO NARAIN v. U.0.1. [VENKATACHALA, J.] 975

market, if it had remained in the same condition as it was A
at the time of requisitioning and been sold on the date of
acquisition.!!

As it is ruled by this Court in Union of India v. Kam/abhai Harjiwan-
das Parekh & others, [1968] 1 SCR 463, that the provision of Section 8(3)
of the Requisitioning and Acquisition Act lays down a principle aimed at
B
giving to the owner of the acquired land an amount of compensation which
approximates to such land's just equivalent value on the date of its acquisi-
tion, our endeavour here would be to see whether that principle is rightly
applied by the High. Court in determining the amount of compensation
payable for the acquired land. c
Method of valuation to be resorted to by a court in determining
acquired land's just equivalent price, has to, necessarily depend on the
nature of evidence adduced by parties in that regard. When, in a given
case, the parties produce evidence of sales relating to the acquired land or D
lands in the vicinity of the acquired land and require the concerned court
to determine the compensation payable for such acquried land, such court
naturally resorts to what is known as 'the Comparable Sales Method' of
valuation of land. Indeed, 'Comparable Sales Method' of valuation of an
acquired land is invariably resorted to by every court eversince the Privy
Council in Atmaram v. Collector of Nagpur, AIR 1929 P:C.92, regarded that E
method as one which furnishes 'a healthy criterion' for determining the

- market value of an acquired land. As regards the acquired land, with the
market value of which we are concerned, parties themselves had produced
evidence of sales of lands before the Arbitrator in order lo enable him to
determine its market value based on prices fetched for lands under those F
sales. The same sale deeds are considered by the High Court to find as to
which of them could form the basis for determining the market value of
the acqu~ied land. It is why, we have now to see, whether the sale deeds
relied upon by the High Court to determine the market value of the
acquried land did really furnish a proper basis to make such determination
by resorting to 'the Comparable Sales Method' of valuation of land. G

Building potentiality of the acquired land, claimed to be po.ssessed
hy the acquired land, can assume no significance in the inst~nt case as 'the
Comparable Sales Method' of valuation of land is resorted to by the High
Court. Such method is resorted lo, as the acquired land was found to be ·H
\
976 SUPREME COURT REPORTS [1993) 2 S.C.R.

A comparable in its essential features with land(s) respecting which evidence
of certain sale deed(s), was produced. Hence, the contention of the learned
counsel for the appellant raised to establish, that the acquired land had
building potentiality at the time of its acquisition, need not engage our
consideration. Y:
B The High Court, as is seen from it~judgment, has examined the sale
deeds produced as evidence of comparable sales with a view to find out as
to which of them could be taken to relate to a land or lands comparable
to the acquired land. Such examination was necessary to find whether the
land covered under a genuine sale deed was basically similar to the
c acquired land. If so found, it would not be difficult for the Court to hold
that the price fetched for such land could be regarded as the price of the
acquired land, although some amount may have to be either added to sale
price or deducted out of the sale price in balancing certain factors not
common to the land(s) sold and the land acquired.

D
A site plan of an area in Ajmer, available in the record, by consent
of parties, is utilised by the High Court for locating the actual situation of
the lands covered by the sale deeds vis-a-vis the actual situation of the
acquired land. A sale deed dated 11.10.1960 produced in evidence as
Ex.P-4 is found t\) relate to sale of 48.400 sq. yards of land at the rate of
E Rs.650 per sq. yard by Mayo College to Life Insurance Corporation of

-
India while another sale deed dated 17.11.960 produced in evidence as
Ex.P-19 is found to relate to sale of 13,572 sq. yards of land at the rate of
Rs.7 per sq. yard by the very Mayo College to Model Housing & Co-
operating Society Ltd. These sale deeds, according to the High Court, since
F related to lands situated in a populous area of Ajmer City, the lands sold
under them were-not comparable to the acquired land which was situated
at a place farther away from the city. Although it was contended on behalf
of the appellant that the lands sold under the said two sale deeds ought to
have been held by the High Court as those comparable to the acquried
land, that contention cannot merit our acceptance since the location of the
G lands covered by the sale deeds is altogether different from the location of
the acquired land, as becomes apparent from the site plan with reference
to which the High Court bas concluded that the lands covered by the sale
deeds' lands and the acquried land were not comparable.

H Sale deed dated 14.1.1964 produced as Ex.P-5 whereunder Mayo
, RAO NARAIN v. U.0.1. [VENKATACHALA, J.] 977

College had sold 1,000 sq. yards of land at the rate of Rs.IO per sq. yard A
in"favour of Mrs. V.M. Kaula; another sale deed dated 25.9.1964 produced
as Ex.P-6 relating to sale of a small strip of land at Rs.IO per sq. yard
between the same parties; and a third sale deed dated 13.11.1964·produced
'>( as Ex.P-7 whereunder the very Mayo College had also sold to Navin
Chandra Sharma 782 sq. yards of land at Rs.7 per sq. yard, are regarded
B
by the High Court as not comparable sales for determining the value of
the acquired land, in that each of them were small bits as compared to the

- acquired land. The High Court, as suggested on pehalf of the appellant,
cannot be found fault with for its refusal to act upon the said three sale
deeds as comparable sales to determine the market value of the large
extent of the acquired land, when it is well settled that the prices fetched c
1- under sale deeds of small bits of lands ought not to, ordinarily, be made
the basis for determination of large extents of acquired land, (See: Collector
of Laklrimpur v. Blruba11 Chandra Dutta, (1974] SCC 236 and Pritlrvi Raj
Taneja v. State of M.P., [1977] 1 SCC 684. Besides, in the instant case when
sale deeds of lands of even larger extents of lands situated in the very area
D
where the bits of lands covered by the three rejected sale deeds were
situated were not considered by the Higli Court as comparable sales for
the reason of their situation in a populous area of the city, that reason
should equally hold good for the High Court not acting upon the three sale
J... deeds relating to bits of lands as comparable sales for fixing the market
value of the acquired land. E

- However, there are other two important s'l)e deeds which the High
Court· has regarded as sales of lands comparable to the acquired land and
has taken the prices fetched for them as the criteria for determining the
market value of the acquired land. A sale deed of the year 1961 produced F
y as Ex.P-18 related to sale of 26,733 sq. yards of land which was a portion
of the acquired land. That land had been sold by the very appellant to
Navjiwan Co-operative Housing Society Ltd. at the rate of Rs.3 per sq.
yard. Another sale deed dated· 14.3.1958 produced as Ex.P-10 refated to
sale of 5,124 sq. yards of !and situated in the close vicinity of the acquired
land. That land had been sold at the rate of Rs.3.50 per sq. yard by Joharilal G
-f-- to Saraswati Balika Vidhyalaya. As regards sale deed Ex.P-18 under which
the appellant had sold a large extent of land to Navjiwan Co-operative
Society at the rate of Rs.3 per sq. yard, the contention of learned counsel
for the appellant before us was, as was before the High Court, that the real
value of the land as on the date of sale was Rs.6 pe; sq. yard as stated by H
978 SUPREME COURT REPORTS 11993] 2 S.C.R.

A P.W.6, Sadu Singh, and hence that rate should have formed the basis for
determining the market . value of the acquired land. The High Court
rejected this contention on its view that the statement of P.W.6, the
President of the 'Society, that the price of the land was Rs.6 per sq. yard
at the time of its purchase in the year 1958 was difficult of acceptance when
the Society had accepted its price at the rate of Rs.4 per sq. yard in relation
y
B to the year 1965, when it had been acquired. Besides, what cannot be
overlooked is that neither the vendor of 'the land nor P.W.l, Narayana

-
Singh, who has given evidence on behalf of the vendor,_ had stated at any
time that the real price of the land in Ex.P-18 was Rs.6 per sq. yard as on
the date of its sale. The High Court, therefore, cannot be found fault with
c for relying upon the sale deed relating to a land which formed part and
parcel of the acquired land earlier, as furnishing the real criterion for
determining the price of acquried land (See: Bangarn Narasingha Rao -t
Naidu v. R.D.O. Vizianagram, 11980] .1 SCC 75. Hence, the contention
urged that the price under sale deed Ex.P-18 should be regarded as Rs.6
per sq. yard and that price should form the basis for determining the
D
market value.of the acquired land, ought to fail.

The contention that the rate of Rs.3.50 per sq. yard at which Joharilal
sold the land under Ex.P-10 to Saraswathi Balika Vidayalaya had to be
regarded as a concession price since he was the Vice-President of the
E vendee Vidayalaya, was not accepted by the High Court because of its view
that oral testimony given by Joharilal as P.W.2, several decades after the

-
actual sale had taken place, was difficult to act upon, particularly, when
.there was nothing in the sale deed which could give such indication. This
contention has been rightly not accepted by the High Court. We are unable
to find any good reason to take a contrary view in the matter.
F
"(
The learned counsel for the appellant then contended that the High
Court should not have brushed aside the. claim of the appellant that the
market value of the acquired land as on the date of its acquisition could
be fixed at least at the rate of Rs.6 per sq. yard, as had been done by the
G Arbitrator taking into consideration the trend of price-rise of lands. The
High Court has taken the view that there was no reliable evidence available
on record to show that the land price in the area between the year 1961 ~-
when the deceased-appellant had sold the land adjoining the acquired land
at Rs.3 per sq. yard and the year 1967, when the land, the compensation
H for which had to be determined, was actually acquired, had gone up
>-

r- RAO NARAIN''· U.0.1. [VENKATACHAJ_A, J.] 979

appreciably. The view so taken by the High Court, according to the learned A
counsel for the appellant, ignored the reliable e\idence on record relating
to the sale prices of building plots formed .:m a land far beyond the
acquired land by the Urban Improvement Trust of Ajmer fixed in the year
"'(
1963, that is, Rs.15 per sq. yard for commercial plots and Rs.7 per sq. yard
for residential plots and the said prices were approved by the State
Government. This e\idence, it was asserted by the learned counsel for the
B

- appellant, clearly demonstrated the price-rise of land in the area of the
very acquired land after the year 1961. In our view, the contentions of
learned counsel as regards trend of price-rise of land in the area of the
acquired land are well founded. No doubt, the plots of Urban Improvement
Trust made ready for sale at high prices pertained to a developed lay-out. c
Yet, they clearly indicated the prices of iand situated beyond the acquired
land, as prevailed in the year 1963. Besides, in the instant case it is
addmitted that for the land which was purchased under Ex.P-18 by Nav-
jiwan Housing Society in the year 1961 at Rs.3 per sq. yard the Arbitrator
had awarded a rate of Rs.4 per sq. yard with reference to its acquisition
D
in the year 1965, and that award was not challenged by the State, as fixing
a high price. From this, it becomes obvious that even the State was well
aware of the trend of price-rise of lands in the area of the acquired land
j,._ between the year 1961 and 1965. Thus, trend in price-rise of lands in the
area of the acquired land between the year 1961, the year in which the
appellant sold the land adjacent to the acquired land and the year 1%7, E

- the year in .which the land in question was acquired, was therefore, very
much seen. Indeed, the rising trend in prices of immovable properties is a
common phenomenon all over the country after the year 1950, although
such rising trend has varied i.n degree from place of place and year to year,
The lands around Ajmere City, were no exception to such trend in price-
F
rise. However, as the market value of the acquired land is determined by
the High Court at Rs.4 per sq. yard in the year 1967, without taking into
account the trend of prise-rise of lands in the vicinity of the acquired land,
we consider that it would be very just and proper to add to that price of·
Rs.4 per sq. yard, another Re.l per sq. yard on account of the factor of
price-rise of lands in the area of the acquired land between the year 1%1 G
j>k
and the year 1967. If Re.l ·per sq. yard is so added to Rs.4 per sq. yard,
the market value of the acquired land in 1967, the year of its acquisition,
would work out lo Rs.5 per sq: yard, Hence, as against the market value
of the acquired land determined by the High Court at Rs.4 per sq yard,
H
1
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980 SUPREME COURT REPORTS [1993] 2 S.C.R ..
-1
A we determine the same at Rs.5 per sq. yard, inasmuch as, such determina-
tion of market value of the acquired land would satisfy the principle of
awarding to it an equivalent price.

The next question which requires our examination keeping in view y
the arguments of learned counsel for the contesting parties, is as to whether
B the High Court had gone wrong in not accepting the price of the acquired
building - 'Masuda House' determined by the Arbitrator in a sum of Rs.
..
~
2,50,000 as on the date of its acquisition as the correct market price.

The Arbitrator for fixing the price of the acquired building had acted
--
c on an estimate of one G.L. Sharma, a retired F<ecutive Engineer of
Government of Rajasthan, who had claimed that he had prepared the
estimate of the acquired building on an inspection of the building in the -t
presence of Shri B.D. Gupta, Assistant Surveyor, C.P.W.D. representing
the C.R.P.F. Ajmer for which the building had been.acquried. So also the
D Arbitrator had acted on the inspection report which he had claimed as
prepared on local inspection of the building. The High Court found that
the retired Executive Engineer, who, it was said, had prepared the estimate
of the building for fixing its price on the date of acquisition, had not given
evidence about .it as a witness and that had led to denial to the contesting
party, an opportunity of cross-examining him as to acceptability of the ~.
E Report. Therefore, according to the High Court, such estimate could not
have had any evidentiary value and the price of the building fixed by the
Arbitrator on the basis of such estimate had to be discarded. Further, the
High Court has found fault with the Arbitrator to have relied upon his
Inspection Report to test the estimate of the building prepared by the
-
F retired Executive Engineer, although it had not been admittedly signed by
the Arbitrator at the time of making his award. In the view of the High
Court, such report could not have been made use of by the Arbitrator for
the purpose of accepting the estimate of the building made by the retired '
Executive Engineer, inasmuch as the parties against whom such inspection
report had been used, had no opportunity of knowing about the very
G exitence of such report. As is seen from the evidence on record and the
proceedings before the High Court the reasons as to why the High Court -~
did not attach any value to the estimate made by the retired Executive
Engineer and the Inspection Report, cannot be said to be ill-founded.
Besides, it was not disputed before us that the retired Executive Engineer
H had been employed by the appellant-Rao Narain Singh, the owner of the
RAO NARAIN v. U.O.l. [VENKATACHALA, J.) 981

acquired building, as his private Engineer, inasmuch as that Executive A
Engineer had admittedly visited the building_ and prepared the estimate of
costs and specification of structures in the building on behalf of Rao Narain
Singh. Again, it was not disputed that the Arbitrator came to sign the
Inspection Report said to have been prepared by him after the award had
been made and when he had become 'functus officio' as an Arbitrator. In
the said view of the matters, it is difficult for us to think that the High Court
B
was in any way unjustified in refusing to accept the valuation of the building

- as Rs.2,50,000 .based on the estimate made by Shri G.L. Sharma retired
Executive Engineer and the spot Inspection Report claimed to have been
made use of by the Arbitrator. However, as is seen from the judgment of
the High Court, it has fixed the market price of the acquired building at c
Rs.1,41,100 having regard to the. estimate prepared by the Executive En-
gineer, scrutinised by the Superintending Engineer of the Rajasthan Public
Works Department and approved by the Chief Engineer Gf the Rajasthan
Public Works Department. Such estimates, admittedly had been produced
on behalf of the owner of the building - Rao Narain Singh of 'Masuda D
House', by his own witness P.W.5, Ramdayal Gupta and spoken to by him.
We cannot, therefore, say that the High Court in the said circumstances,
was not justified in relying upon the estimates made by the Public Works
Department of the State of Rajasthan in fixing the price of the building at
Rs.l,41,100. Yet, we consider that the High Court should have added to
that price of the building a sum of Rs.5,720 when it had found that that E
amount of Rs.5,720 was the price of items in the building which were left
out in the estimate of the Engineers of the Public Works Department of
-· the State of Rajasthan. As stated by the High Court itself, the items for
which cost had not been fixed by the Engineers of the Public Works
Department in their estimate, were 'road side retaining walls', 'wire F
y fencing' and 'main gate wall'. The cost of those left out items was found to
be Rs.5,720. We, therefore, consider it just and reasonable to add that
amount of Rs.5, 720 to the price of the acquired building. Hence, in our
view, the just equivalent price of the acquired building would be
Rs.1,41,100 plus Rs.5,720 i.e. Rs.l,46,820 and not merely Rs.1,41,100, its
price determined by the High Court. G

The last question that arises for olir consideration is whether the
High Court had acted rightly in fixing the solatium payable on the amount
of compensation for land and building at 10 per cent instead of at 15 per
. cent. The High Court in fixing the solatium at the rate of 10 per cent on H
. ---;

982 SUPREME COURT REPORTS (1993) 2 S.C.R. 1
A the amount of compensation payable for the land and building has held
that the land and building acquired being in the State of Rajasthan the
solatium payable was the rate admissible therefor under Section 23(2) of
the Rajasthan Land Acquisition Act - the State Act and not the rate
admissible under the corresponding provision in the Central Land Acquisi- y
tion Act. We find no good reason to disagree with the High Court in the
B said matter as the solatium to be paid for the land acquried under the

--
Requisitioning and Acquisition Act cannot be a benefit of solatium not
available for a land acquired under the State Act, i.e. under the Rajasthan '
Land Acquisition Act. Thus, the appellant cannot succeed nn this question.

c and decrees
In the result, we allow this appeal partly and modify the judgment
of the High Court under appeal. The market price of acquired
land of 70 Bighas, 14 Biswas and 1412 sq. yard is enhanced to Rs.5 per sq.
~
yard from Rs.4 per sq. yard awarded by the High Court. The market price
of the Masuda House is enhanced to Rs.1,46,820 from Rs.1,41,100 awarded
by the High Court. The solatium at 10 per cent shall be payable on the said t
D total amount of.the price of the land and price of the quilding, as deter-
mined by us. The damages of Rs.2,000 awarded by the High Court as loss
of access to and utility of the unacquired land of the appellant stands
t
undisturbed. The interest of 4 per cent per annum shall be payable on the
total of all the said amounts in the manner indicated'by the High Court in ~.

E its judgment and decrees under appeal. Since the appellant died during the

-[
pendency of this civil appeal, the ·amount of compensation which has
become payable under this judgment, less the amount ot compensation
already paid or deposited, shall be paid to the legal representatives of the
"'
deceased-appellant, who are prosecuting this appeal. Costs payable in this
appeal shall be paid by the respondent to the legal representatives of the
F deceased-appellant, in proportion to their success. -r
' t
~
R.P. Appeal partly allowed.
r,
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