RATAN LAL GUPTA AND ORS.versusUNION OF INDIA

A                      RATAN LAL GUPTA AND ORS.
                                  v.
                            UNION OF INDIA

                              NOVEMBER 21, 1995

B            [K. RAMASWAMY AND K. S. PARIPOORNAN, JJ.]

         Land Acquisition Act, 1894 :

         Land Acquisition-Compensation-Principles for determination-
C Land acquired in undeveloped area-f'1ice of the developed area cannot be
    adopted ipso facto as basis for detemiination of compensation.

          For acquisition of appellants' land measuring 28 bighas, the Collec-
    tor awarded compensation @ Rs. 5,000 per bigha together with 15%
    solatium and interest @ 6% while the Reference Court determined com-
D   pensation @ Rs. 30 per sq. yard. On further appeal a single Judge of the
    High Court determined market value @ Rs. 78 per sq. yard deducted Rs.
    7 for development charges, fixed the land available as per the lay out at
    78.45% of the land areas saleable for plots. The Single Judge also held that
    the market value for undeveloped area was Rs. 23 per sq. yard while that
E   for the developed area was Rs. 40 per sq. yard. The Letters Patent Bench
    dismissed the appeal.
                                                                                   f·

          In appeal to this Court it was contended for the appellants that
    having determined the market value at Rs. 78 per sq. yard and having
    deducted an amount towards development charges and also determined
F   the saleable plots of land at 78.45% of the land the Single Judge committed
    an error of law in further reducing the market value.

          Allowing the appeal, this Court

           HELD : When the market value is to be determined on the basis of
G   small plots of land the same price cannot be expected to be realised when
    a large track of land is offered to a willing purchaser by a willing vendor.
    It is an admitted fact that the lands in. question are in undeveloped area
    though adjacent to the developed area. Since the lands in question are
    situated in undeveloped area, though adjacent to the road, it would take
H   long time for realisation of potentialities as they would require further
                                         534
                            R.L. GUPTA v. U.0.1.                        535

development. Considered from this perspective, the price of the developed     A
area cannot be adopted ipso facto as the basis to determine compensation
to these lands. Considering the facts that the land required development
and having deducted 78.45% land which was required for building pur-
poses, the proper market value would be Rs. 50 per sq. yard. The appel-
lants would also be entitled to interest @ 6% and solatium @ 15% on
                                                                              B
enhanced compensation. [536-E-F; 537-B-D]

      Administrator General of West Bengal v. Collect01; Varanasi, AIR
(1988) SC 943 and Hasanali Khanbhai and Sons & Ors. v. State of Gujarat,
[1995) 5 sec 422, referred to.

        CIVIL APPELLATE JURISDICTION : Civil Appeal no. 3279 of
                                                                              c
1984.

      From the Judgment and Order dated 26.8.81 of the Delhi High Court
in L.P.A. No. 173 of 1981.
                                                                              D
        Mukul Mudgal and Tripurari Ray for the Appellants.

        S. Wasim A. Qadri for the Union of India for the Respondents.

        The following Order of the Court was delivered :
                                                                              E
        The application for substitution is allowed.

       Notification under section 4(1) of the Land Acquisition Act, 1874
(for short 'the Act') acquiring, land admeasuring about 5.29 acres (28
bighas) comprised in Khasra No. 351/305/162 etc. situated in Yaquatpur,
Delhi for the planned development (was published in the Union Gazette         F
on February 4, 1964). The Collector in his award dated May 26, 1965
determined compensation at Rs. 5,000 per bigha together with 15%
solatium and interest @ 6%. The Additional District Judge by his award
and decree dated August 5, 1969, determined the compensation at the rate
of Rs. 30 per square yard. On further appeal under section 54 of the Act,     G
the learned single Judge determined market value at Rs. 78 per sq. yard,
deducted Rs. 7 for development charges, fixed the land available as per
the lay out at 78.45% of the land areas saleable for plots. The learned
Judge further held that market value for undeveloped area was Rs. 23 per
square yard while for the developed area in Greater Kailash Part-I, the
market value came to Rs. 39.34 per square yard. On application of the H
    536                   SUPREME COURT REPORTS [1995) SUPP. 5 S.C.R.

A   average, the learned Judge fixed the market value at Rs. 40 per square
    yard. On Letters Patent Appeal, the Division Bench in the impugned
    judgment and decree dated August 26, 1981 dismissed the appeal. Thus
    this appeal by special leave.

          Shri Mukul Mudgal, learned counsel appearing for the claimant,
B   contended that the learned single Judge having found that a sum of Rs. 7
    per square yard would be required for development charges of the saleable
    land of 78.45% as per the lay out, committed an error of law in fixing
                                                             /
    average price of developed and undeveloped land at Rs. 40 per square
    yard. Having determined the market value at Rs. 78 per square yard and
c   having deducted an amount towards development charges and also deter-
    mined the saleable plo~s of land at 78.45% of the land, he committed an
    error of law for further reducing the market value. Thus the learned single
    Judge has applied wrong principle of law warranting interference.

           The question, therefore, is what would be the correct market value
D   that could be fixed as compensation of the land in question. It is seen that
    strong reliance was placed before the Reference Court on the sale trans-
    action relating to developed area and undeveloped area. In the un-
    developed area, the market value was Rs. 23 per square yard and in the
    developed area, the market value was Rs. 39.34 per square yard. It is seen
E   that the High Court found these lands connected with developed roads.

          It has been repeatedly held by a catena of decisions of this Court
  that when the market value is to be determined on the basis of small plots
  of land the same price cannot be expected to be realised when a large track
  of land is offered to a willing purchaser by a willing vendor. When lay out
F has been obtained and the land is situated in a developed area, though sale
  relating to small plots of lands were produced before the Court, on
  recording a finding that such sales are genuine and not intended to inflate
  the market value of the land, this Court held that necessary directions
  should be given in determining the true market value based on resaleable
G price at a future date.
        It is an admitted fact that the lands in question are in undeveloped
  area though adjacent to the developed area, viz., Greater Kailash-1. The
  average price given by the Court also does not appear to be correct. In
  Administrator General of West Bengal v. Collect01; Varanasi, AIR 1988 SC
H 943 in paragraph 6, this Court had laid the principle of deduction of 53%,
                          R.L. GUPTA v. U.0.1.                          537

when small plots of land were found to be of genuine sale and situated in A
a potentially developed area as a wholesale price. In Hasanali Khanbhai
and Sons & Ors. v. State of Gujarat, [1995] 5 SCC 422 this Court also
considered all the earlier cases and held that the small extents of land sold
in plots, would not furnish the sole basis to fix same price offered by them.
Therefore, the deduction of 60% of the value per square yard by the High
                                                                               B
Court was upheld by this Court. It is seen that since the lands in question
are situated in undeveloped area, though adjacent to the road, it would
take long time for realisation of potentialities as they would require further
development. Considered from this perspective, the price of the developed
area cannot be adopted ipso facto as the basis to determine compensation
to these lands. Considered the facts that the land required development       c
and having deducted 78.45% land which was required for building pur-
poses, we think that proper market value would be Rs. 50% per square
yard. The appellants, therefore, are entitled to be compensated at that rate
with interest at the rate of 6% on the enhanced compensation from the
date of taking possession till the date of deposit into the Court. The D
claimants also are entitled to solatium @ 15% on the enhanced compen-
sation.

      The appeal is allowed but, in the circumstances, without costs.

T.N.A                                                      Appeal allowed.