Holding

The Supreme Court held that the High Court exceeded its jurisdiction by resurrecting a judgment set aside, and that the Supreme Court’s direction is binding, thereby fixing compensation at Rs 1.50 per square yard with statutory solatium and interest.

Summary

The Supreme Court examined appeals by two groups of landowners whose properties in Aurangabad were acquired for a medical college under the Land Acquisition Act, 1894. The Land Acquisition Officer had awarded very low compensation, which was enhanced by a Civil Judge and later varied by the High Court. Both the claimants and the State appealed, and the Supreme Court earlier set aside the High Court judgment and remanded the cases. On remand, the High Court attempted to revive the set‑aside judgment, which the Supreme Court held to be beyond its jurisdiction. The Court affirmed that its own directions under Article 136 are binding on lower courts under Article 141, and directly fixed compensation at Rs 1.50 per square yard (Rs 7260 per acre) with a 15% statutory solatium and interest.

Issues considered

The High Court's jurisdiction to revive a judgment that had been set aside by the Supreme Court on remand.
Whether directions issued by the Supreme Court under Article 136 are binding on subordinate courts under Article 141.
The proper method of fixing compensation for large tracts of land under the Land Acquisition Act, 1894, especially the relevance of small‑property transactions.
The permissibility of introducing additional evidence after a remand.

Legislation cited

Constitution of Indias. 136, s. 141
Land Acquisition Act, 1894s. 23, s. 3, s. 4

Subjects

Land acquisitionCompensationValuation of large tractsSupreme Court jurisdictionArticle 136Article 141High Court jurisdictionRemandStatutory solatiumInterest on compensation

Judgment

900

A SMT. KAUSHALYA DEVI BOGRA AND OTHERS ETC.

v.

THE LAND ACQUISITION OFFICER, AURANGABAD
ANDANR.
B
February 15, 1984
[S. MURTAZA FAZAL ALI, A. VARADARAJAN AND
RANGANATH MISRA JJ.]

Constltioa of Iudia 1950, Artie/• UI.
c Supr1me Court in appeal telling asld• jKdgl11'at of High Court-High
Court directed to dispos1_ of cas• afresh-High Court wh1th1r entit/1d to resurrect
th11ariilr Judlfl11'DI.

Land AcquisitioR A.ct, 1894, Section 23-Lar11 tract· of land acquired
valuation of such lmtd--Transactions in respect of small properti'es do not offer
D proper guide-li1H1.
•
A large tract of land located with in the Municipal Limits was notified
for acquisition under a.3 (1) of the Land Acquisition Act prevailing in the
State of Hyderabad, corresponding to section 4 of the Land Acquisition Act.
1894 for a public purpose. Appeals were filed by two groups of people whose
lands were acquired under a common notification-, and they were disposed of
by the High Court by applying a common basis.
E
Dissatisfied with the compensation awarded, the first eroup of claimants
and the State preferred appeals. A Division Bench of the High Codrt after
dividing the land into zones for the· purpose of fixation of compensation
determined the compensation. Beine dissatisfied with the results, the claimants
preferred appeals to this Court.
F
In the appeals, it was urged on behalf of the claimants that the decision
of the Civil Judge in the second groups had not becoffie final and that an en~
hanced compensation was granted by the Civil Judge in that matter, and sought
to introduce additional evidence, This Court set aside the judgments of the
High Court, sent the cases bac'; tr> the Hi&h Court and directed the Hi&h Court
to dispose them.
G
In the connected appeal (second· group), the claimant being dissatisfied
with the compensation awarded both by the Land A"'!uisition . Collector aqd
••

KAUSHALYA DEVI V. LAND ACQN. OFFICER 901

the Civil Judge preferred an .appeal to the High Court, and a Division Beneh A
which reassessed the evidence, held that as no acceptable material was on
record to justify_any enhancement of compen~ation, that award of :the Land
Acquisition Officer should be sustained, The appellant challenged this order
of the High Court, in his appeal to this Court.
When the appeals after remand (first group) came before the same
Division Beneh, the High Court finding that no further evidence was forth... ' B
coming either on behalf of the appellants or the State, held that the ear1ier
Judgment of the High Court shotild be treafed as the substantive judgment
declared it to be placed on tbe record as the judgment of the High Court
after remand by the Supreme Court,. and thereby confirmed the ~aluation
and cornpensatio~ awarded by the earHer Division Bench.

Allowing the appeals by both the groups to this Court; c
I' . HELD : 1 (i) The High Court exceeded its jurisdiction in dealing
with the first appeals. This Court. in ex-ercise of its appellate powers vested in
it u:Odcr Article 136 of the Constitution had set aside the Bench decision of
the High Court delivered iP 1971 and that judgment for all inteDts _ and pur·
poses had become non~existetit. The- present ·Division Bench of. the High
Court was not entitled, by any process known to law, to resurrect that judg- o'
ment into life. [909B-C]
(ii) The dfrectio·n of the appell<"te court is binding on all courts subor-
dinate thereto. The provisions of Article 141 of the Constitution, require all
Courts in India to be bo·und to follow the decisions of this Court. Judicial
discipline requires and decorum known to law warrants. that appellate direc·
tions should be taken as binding and followed. [909D-E] E

Broom v. Cassell & Co., [1972] 1 All. E.R 801 :.referred to.

·In the instant case, a jqdgnient which has already been sCt aside has
been brought on record and has been described as the judgment iri the first
appeals. That judgment is a nullity. The Division". Bench of the High Court
a11owed itself to be s"!'ayed awa:Yand landed up in·a sitution which was wholly F
unwarranted. Some of its observations were uncalled for and greater restraint
was expected, It was open to the High Court .to require the parties to move
this Court for modification of the direction. If necessary, a reference could
have been made to the Registry of this Court, so that this Court cotild have
even taken suo motu action. If additional evidence w!s not forth coming, the
Division Bench could have appJied its mind afresh to the materials already on
record, and the appeals should have been disposed of by an independent G
judgment and not by restoring to life a judgment which had, in exercise. of
appellate powers of this Court, been. rendered lifeless. [910G·H; D·FJ
2. When large tracts of 13.nd are acquired, the transaction in respet of
srna11 properties do not offer a proper guideline. Therefore, the valuation intra-
nsactions in regard to smaUer property is not taken asa real basis for determin·
ing the Compensaticn fot larger _tracts of Property. For determining the market
H
value of a large property on the basis of a sale transaction for smaller property
a ded~ction should be s;iven. A reduction of 25% was jndicated in one case:
I

902 SUPREME COURT REPORTS [1984] 2 S.C.R.

A
while certain other cases indicated that the reduction should be to the extent
of 1/3. [912F-H; 913A]

Prithvi Raj Taneja v. State of Madhya Pradesh and Others, [1972] 2 S.C.R
633; Padma Uppal Etc. v. State of Punjab and Others, [1977] 1 S.C.R. 329;
Special Land Acquisition Officer, Bangalore v. T. Adinarayan Setty, [ 19S9] Suppl.
B I S.C.R. 404; referred to.
•
In the instant case, the lands have been acquired in a toY.rn, which was
in a developed part of the State, and was a constituted municipality. Not far
away from it are places of tourist importance. A fort and a place of historical
importance are in the vicinity of the town. There is. evidence that the Jands ,,.
acquired are located close to these spots, and that these areas were developed
and semi-developed portion of the 'town. The town had become the regional
be.ad-quarters
~ .' ,
of a Zon~ of the State and had been: I industrially I developing.
The lands in qµestion had potential value which had to be kept in view
in the matter of fixing the compensation under the iand Acquisition Act.
Taking an overall picture of the matter) ccmpensation is fhted at' the
rateof Rs. J.SO per spuare yard or Rs. 7260/- per acre for all the lands
D acquired by t~e notification in question. Over and above this amount,
.' the appellants shall be entitled to statutory solatium ·of 15 % as also
interest at the rate of 6 % per annum on additional compensation from
the date of di. spossession till payment thereof. The Collector to wOrk
out.t:he compensation within two months. If the amount of com.pensation
deter:mind is not paid within three months thereafter interest at 12 %
per annum on. the additional compensation shall be payable till payment
E is made. [912C-D; 913D-E] .

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2458-
7461 of 1981.

F Appeals by Special leave from the .Judgment and Order dated
the 16th October, 1979 of the Bombay High Court in 1st. Appeal
.
Nos. 773/67, and 537/68, F.A. No. 774/67 and Cross Appeal No. J
702/68.

WITH
G,
Civil Appeal No. 2462 of 1981.

Appeal by Special leave from the Judgment and Order dated
the 15th October, 1979 of the Bombay High Court in Civil Appeal
H No. 628 of 1972.

Shanti Bhushan, C.S. Vaidyanat'1, P. Chowdhary, M. Mudgal,
·•
KAUSHALYA.DEVI v. LAND ACQN. OFFICER (Ranganatb Misra, J.) 983

Ms. Gurdip Kaur and Prasant Bhushan for the Appellants. A

r O.P. Rana and M.N. Shroff for the Re1pondents.

The Judgment of the Court was delivered by
B

RANGANATH MISRA, J. All these appeals are by special leave
and seek to challenge two _separte judgments of the Bombay High
Court. A large tract of land located within the municipal limits
of Aurangabad within the State of Maharashtra wa11 notified for
acquisition under section 3 (I) of the Land Acquisition Act c
prevailing in the State of Hyderabad ·(corresponding to s. 4 of the.
Land Acquisition Act, Act I of 1894), by notification dated Nove-
mber 28, 1957, for the. purpose of locating a Medical College 11.nd an
attached hospital. These lands can be conveniently referred to
as Navkhanda and Ahmadibag properties. Four of these-appeals
are by one group being Kausalya Devi Bogra and others and the D
other is by Syed Yusufuddin Syed Ziauddin. Since their lands
were acquired under a common notification and as would be·
indicated ·later, the appeals were disposed of by the High Court
by applying a common basis and these appeals at the request of
the counsel have been heard together, they are being disposed of ·
by a common judgment. The total acquisi_tion was of about 150 E
acres of land. Out of it, the first group owi;ied about 74 acres
while the claim of Yusufuddin related to about 15 acres of land.

In so far as the lands of Kausalya _Devi's group are concer-
.. ned, the Land Acquisition Officer ·determined compensaion at 4
F
paise per square yard for the Navkhanda land in--the two blocks
besides statutory solatium of 15%. At the•_instance of the clai.
mants reference was made to the Civil Judge who raised the
compensation ~o 15 paise per square yard as against the claim
laid at the rate of Rs. 2.50 per square yard. So far as •Ahmadibag G
lands are concerned, the Land Acquisition Officer -awarded com-
pensation at the rate of 3 paise per square yard and on a reference
to the Court, the learned Civil Judge raised · the compensation
to 12 paise per square yard besides the statutory solatium of 15%
while the claimants had asked for compensation at the rate of
Rs. 1.50 per square yard. In both the cases the claimants as -H
also !he State preferred appeals-the State challenging the
'enhancement and the claimants asking for more. A Divi~iou
."
" ''904 SUPREME COURT REPORTS [ 1984) 2 S.C.R.

Bench of the· Bombay High Court by judgment dated April 27,
1971, divided the Ahmadibag lands into three zones for the
purpose of fixation of compensation; the firs.t portion was on the
east, the portion which abutted the road near the main gate up
to an indicated depth was treated as the second block and the
... patch of land which was to the north of the second portion was
treated as the third block. The High Court fixed compensation
·at 12 paise per square yard for the middle portion and at 9 paise
per square yard for the rest of .the land. So far as Navkhanda
lands were concerned; the same was also divided into three zones
and depending upon the location of these three blocks, compensa-
c tion was fixed at 16 paise per square yard of the land in· the zone
abu'tting·the road; 10 paise per square yard for the second zone
and at 8 paise per square yard for the remaining lands forming
the third zone. Being dissatisfied with the results obtained in the
first.appeals before the High Court, the claimants came before
this Court by certificate under Article 133 of the Constitution on
D the basis of valuation involved. · Attempt· was made to introduce
additional evidence w.hich · mainly consisted of material to show
that. higher. compensation had been given for similarly situated
,properties. By Judgment dated March 23, 1979, in Civil Appeal
Nos. 1035 & 1038 of 1972, this Court directed :
.,
.E "We, therefore, allow the appeals, set aside the judg-
ment of the High Court and send the cases back to the
High Court ·to be restored and direct the High Court to take ....
the appeals on its file and dispose them of according to law
in the light of the directions given above." ·

One. of .the consi.deration for remand was reference to . two
F judgments of the Civil Judge where, .in respect of lands covered by
the same Notification, compensation had been worked out at
Rs. 4.50 per square yard. One of these judgments was the.case of
Yusufuddin. As.the ju.dgment of this Court would. show, it had
been represented by the claimants before this Court that the
decision..of the Civil Judge in Yurnfuddin's case had not been
G
challenged in appeal and had become final. That was, however,
not a fact and First Appeal No. 628/72 had been taken to the
High Court by the State.

In· Yusufuddin's case, as already indicated, the property
H
acquired was around 15 acres. These lands were covered by two
sector; 10 'acres and 16 gunthas appertained to Sej Nos. 3, 4 arn;l
ic:AUSHALYA DEVI v. LAND ACQN. OFFICER (Ranganath Misra, J.) 905

5 while 5 acres 32 gunthas related to Saj No. 167, and all these A
lands were situated close to the road leading from Aurangabad
City to Panchakki. The Land Acquisition Officer had given an
award of Rs. 5454.71 inclusive of solatium of 15% for the first
sector and a sum of Rs. 4614.11 inclusive of the solatium in
respect of 5 acres 32 gunthas in Sej 167. The appellant was
B
aggrieved by the Award and laid claim of Rs. 40,360 in respect
of first block and Rs. 2,26,512 in respect of the other. On the
basis of the evidence placed on record, the learned Civil Judge
came to hold that market value of the property on the date of the
preliminary notification was Rs. 4.50 per square yard but as the
claimants had claimed a lesser amount, he confined the compensa- c
tion to the amount claimed and fixed the compensation accor-
dingly. The decision of the Civil Judge was challenged in appeal
as already indicated. The High Court re-assessed the evidence
and came to hold that no acceptable material was on record to
justify any enhancement of compensation and the Award of the
Land Acquisition Offiicer should be sustained. Accordingly, the D
decision of the Civil Jndge was vacated and if out of the enhanced
compensation any amount had been paid, refnnd thereof was
directed.

This first appeal of the State against Ynsufuddin was disposed
of by a Division Bench consisting of Deshmukh, C.J. and Desh- E
pande, J. on October 15, 1979. Before the same Division Bench
the other batch of first appeals remanded pursuant to the direc-
tion of this Court came up for hearing ou the next day, viz.,
October 16, 1976. The High Court referred to these first appeals
as once upon disposed of by a Division Bench of the Court and
F
stated :
"Being dissatisfied with this common judgment dis-
posing of the four appeals, the claimants carried the matter
to the Supreme Court on leave from this Court. According
to the provisions of the law then existing, the leave granted
was as a matter of course as the claim involved in each of G
the appeals was much more than Rs. 20,000 at all stages
of the litigation. After obtaining a certificate of fitness
for leave to appeal to the Supreme Court on I 7th December
1971 from this Court, the petition of appeal was filed in
the Supreme Court on 15th February 1972. Certain state-
H
ments were made in this petition of appeal with an allega-
tion that steps were being taken .to produce additional
SUPRBME COURT REPORTS [19841 i s.c.lt.

A evidence by a separate application as per rules. Accor-
dingly, a separate application for production of additional
evidence was made on 27th February 1972. Presuma.bly
a copy of the appeal memo, as also a copy of this appliica-
tion was served upon the State Government of Mahara-
shtra, who were the respondents, and we further presume
B
that those copies were made available to the learned
counsel who were engaged by the State to defend the said
appeals. We are told that before the matter comes up for
hearing, there is an intervening stage· when a statement of
case is required to be filed before the final hearing. The
learned counsel is not aware whether in these appeals any
c such statement ·of case was filed by the parties. After a
lapse of aboUt·seven years these appeals were called out for
hearing before the Supreme Court on 23rd March, 1979.
By a speaking order, the Supreme Court set aside the . ·~
Judgment of this Court and remanded the original four
appeals for being Jurther heard and disposed of on merits.
D
It is only in this manner that we are hearing today the
.said four appeals over again.

For reasons which we will detail hereafter, we have not
heard the parties on merits at all. It is true that the
E Supreme Court has set aside the judgment of this Court
and remanded the appeals for further hearing and disposal
according to law. That is what precisely we are doing but
for reasons which we will record hereunder why we have
not heard the parties on merits.

F On considering in detail the long and able judgment
delivered by the two judges of this Court and afcer reading·
the Supreme Court order and noting the factual position,
there is not much force in hearing the appeal afresh and
further there is no necessity for the application of mind. by
another two judges of this Court to the same evidence which
G is on record. The factual position that has come to our
notice reveals a state of affairs which cannot be described as
very commendable so far as the handling of the Government
litigation is concerned ......... What surprises us is that when
copies of original appeal, petition as well as civil application
. for additional evidence are served upon the Government no
H attempt is made to file a reply that these judgments need not
9c admitted as additional evidence as the High Court is
KAUSHALYA DEVI v. LRND ACQN. OFFICER' (Riillgailath Misra, J.) "9'61
A
already seized of the judgments in appeals which are admit·
ted and they have not become final as alleged by the appel-
lants in their memo of appeal to the Supreme Court. Even
after seven years when the matter was called out for .final
hearing before the Supreme Court, we are surprised to find
from the Supreme Court's order that the Govermnent repre, B
sentative before the Supreme Court was on the defensive all
the while and merely wanted to state that he shonld be heard
further in the matter of additional evidence. We do not
know whether any attempt was made to seek instructions
from the State Government or in spite of query being made
C I
the informatiOn was wanting from this end. Whatever the
reason may be for the Government's failure to provide ins-
tructions to the counsel appearing for the State in the Supreme.
Court or whatever may be the reason for the failure of the
r
Government counsel in Delhi to seek information either of
them is not a very commendable state of affairs. The
D
Supreme Court. should have been told at once that those
· judgments were subjected to appeals and the appeals are
pending and almost ready for· hearing. We are sure the
Supreme Court would have adjourned the hearing unti!'ihe
decision by the High Court in First Appeal Nos. 628 of
1972 and 179 and 180 of 1972. That undoubtedly would E
have been the proper course for the Government to adopt
and we have no doubt that the Supreme Court would have ·
valued that suggestion."

Then followed a long paragraph censuring the conduct of'
counsel for the claimants which closed with the following observa· F
\ tion:

l "The Supreme Court took cogniza~ce of all ·this and
thinking that that Court cannot go into such questions in
•

detail as it may invoive taking of evidence, the Supreme
Court passed the order and that is how this group of appeals
G
has come back to us for further hearing." · ·
A set of first appeals one of which related to Yusiifuddin's
matter being of the year 1972 first came up for hearing before the
High Court. In course of hearing thereof, when the judgment of
the Division Bench of 1971 in the case of Kausalya Devi's group H ·•
was produced, it was pointed out that this Court had already
vacated the judgment of the· Division ·Bench and .the matter h'ad
908 SUPREME COURT REPORTS (1984(2 S.C.R.
A been remanded. The Division Bench hearing tl1e appeals after
remand, therefore, directed as stated in its order :

'.'We, therefore, said that the office may find out as to
which are the group of appeals which were rema:nded and
B issue notice fixing 8th October, 1979 as the date of hearing
along with those group of appeals. That is how they came
to ·be shown on our Board from that day onwards continu-
ously until they reached the final hearing.

However, the very next day'after 18th September 1979,
c Mr. Savant came to tell us that he would not be in a position
to apply for additional evidence, as the very judgments of
the Civil Judge in respect of which certain representations
were made before the Supreme Court ·are those which are
the subject-matters of First Appeals Nos. 179 and 180 of
1972 as also first appeal no. 628 of 1972. Since we had
D
already adjourned the matter, we decided to hear these
appeals first and take up these remanded appeals."

The Division Bench continued to State :

E "The first factual position which we note here is that
neither the appellant has pressed for additional evidence
nor the State could lend additional evidence, though the
wording of the Supreme Court order says that both the
parties· will be at liberty to apply for additional evidence.
None of the parties has any additional evidence to offer.
F In fact, in our humble view, remand seems to be a direct
result of a rash statement; not being deniec;I even at final
hearing stage. If this is the position in so far as the appeal
in the matter was concerned where two other judges of this
Court who were seized of the matter had given full hearing
to the parties at an earlier stage we told Mr. Andhyarujina,
G Advocate, that there was no necessity for any further hear-
ing in the matter and that we are not inclined to do so. Since
there is no change in the record anc:I no additional evidence
is offered and the High Court judgment was pronounced
on the evidence already recorded, we see no reason to
differ in any way with the well considered earlier judgment
H
of this Court. We, therefore, declare that a copy of that
judgment, which will be our substantive judgment, be placed

I
.
'
KAUSHALYA DEVI v. LA' D ACQN. OFFICER (Ranganath Misra, J.) 909

on record as the judgment of this Court afier remand by the A
Supreme Court. We thus not only confirm the valuation
and compensation awarded by the earlier Bench of this
Court hut also confirm their order .as to costs." .

Having read the judgment cif the High Court and considering
the manner in which the. first appeals have been .disposed of, we B
have no doubts in our mind that the High Court exceeded its
jurisdiction in dealing with the first appeals. This Court in exercise
·of appellate powers vested it under Article 136 of the Consititution
had set aside the Bench decision of the High. Court delivered in
1971 and that judgment for all intents and pnrposes had become
non-existent. The. present Division Bench of the High Court was
c
not entitled, ~y any process known to law, to resurrect that judg-
ment into life.

. The direction of the appellate court is certainly binding on
the courts subordinate thereto. That apart, in view of the provisions D
of Article 141 of the Constitution, all courts in India are bound.
to follow the decisions of this Court. Judicial discipline requires
and decorum known to law warrants that appellate directions
should be taken as binding and followed. It is appropriate to
usefully recall certain observations of the House of Lords in
Broom v. Cassell & Co.(1) Therein Lord Hailsham, L. C. observed : E

''The fact is, and I hope it will never be necessary to
say so again, that in the hierarchical system of courts which
exist in this country, it is necessary for each lower tier, includ-
ing the Court of Appeal, to accept loyally the decisions ·of
the higher tier." F

Lord Reid added :

"It seems to me obvious that the Court ofAppeal failed
· to understand Lord .Delvin's speech but whether they did or G
not, I would have accepted them to know that they had no
power to give any such direction and to realise the impossi-
ble position in which they were seeking to put those judges
in advising or .directing them to disregard a decision of this
House."
H
(1) [1972] I All E. R. 801.
'stlPREMB COuRT REPOR1'S (1984} 2 s:c.R.

A Lord Diplock observed at p. 874 of the Reports :

"It is inevitable in a hierarchical system of courts that
there are decisions of the Supreme appellate tribunal which
do not attract the unanimous approval of all members of
B the judiciary. When I sat in the Court of Appeal, I some-
times thought the House of Lords was wrong in over ruling
me. Even since that time there have been occasions, of
which the instant appeal is one, when alone or in company.
I have dissented from a decision of the majority of this
House. But the judicial system orily works if someone is
c allowed to have the last word and if that last word, once
spoken, is loyally accepted."

We refuse to accept the submission of Mr, Shanti Bhushan for
the appellants that the High Court intended to disobey the direction
given in the appellate order of remand. Nevertheless, the Division
0
D Bench of the High Court allowed itself to be swayed away and
landed up in a situation which was wholly unwarranted. Some• of
the ,observations which we have extracted. were uncalled for and
greater restraint was expected. It was open to the High Court to
require the parties to move this Court for modification of the direc-
tion. If necessary, a reference could have been made to the
E Registry of this Court so that this Court could have even taken
suo motu action. Finally, if additional evidence was not forth
coming, the Division Bench could have applied its mind afresh
to the materials already on record and the appeals should have
been disposed of by an independent judgment and not by rcstori ng
to life judgment which had, in exercise of appellate powers of
F this Court, been rendered lifeless. We hope and believe that such
an unfortunate situation will never recur and, therefore, we propose
to say no more on this aspect of the matter.

As already indicated, the order of remand has not been opera~
tive on account of the High not giving effect to it. On the other
G hand, a judgment which haJ already been set aside has been brou-
ght on record and has been described as the judgment in the first
appeals. In our opinion, that judgment is a nullity. The two
options available before the Court, therefore, are, a further remand
to the High Court asking for a fresh disposal of the appeals or to
H
dispose of the ·appeals in exercise of appellate powers by recording
findings. Acquisition in this case is of the year 1957. Twentyseven
KAlisliALYA DEVI v. LAND ACQN. OFFICER (Ranganath Misra, J.) 911
years have already passed. A remand at this stage would indeed' A
be not in the interest of the parties nor in public interest. We
have, therefore, decided to look into the materials ourselves and
dispose of these appeals finally.
Aurangabad was in a developed part of the Nizam's State of
Hyderabad and .was· a constituted municipality. Hyderabad had B
become a part of India by 1948. By the State Re-organisation
Act of 1956, Aurangabad and certain other tracts of Hyderabad
became parts of the then State of Bombay. Aurangabad was cif
historical importance. Not far away from it are the famous
caves of Ajanta and Ellora. Aurangabad, therefore, had been of
tourist importance from before. A fort and a palace of historical
c
·importance are in the vicinity of this town. There is evidence
that the lands acquired in the instant appeals are located close to
these spots. There· is also evidence that these areas were developed
r and semi-developed portions of the town.
The learned Civil Judge Clid take into account certain docu- D
ments for fixing up the valuation of the property on the date of
the notification. In Yusufuddin's case a sale deed of October 18,
1957, was relied upon where ihe valuation was about Rs. 4.50 per
square yard. This sale deed was of the year of the notification
though the transaction ·happened to be a few months after the
E
date. The learned Civil Judge had found that the property was
located not away from the acquired land. Exhibit 36 was also the
c:ertified copy of a sale deed of 1957 but since it bad a construc-
tion on the property and the separate valuation thereof could
not be known in the absence of any substantive, no reliance had
actually been placed on this transaction. · Exhibit 37 was a F
transaction of 1953 and the rate adopted there was about Rs. 5
y per square yard. A party to the transaction was examined as a
I witness. As noticed by the learned Civil Judge, the property was
located at a distance of about there furlongs from the acquired
land. The ·learned Civil Judge stationed at l\uran'gabad was
. certainly in a better position to take judicial notice of the location G
of important landmarks within Aurangabad than the learned
Judges of the Bombay High Court or even the Judges of this.
Court sitting at a long distance from the place wh¢re the lands .
are situated. Exhibit 42 is a. saledeed of 1960 and keeping in
view the extent of lands sold and the consideration per square
H
yard, the rate worked out at Rs. 2.25. The purchaser had:been
examined as a witness and the land'has be·en found to -be abOut
912 SUPREME COURT REPORTS (1984) 2 s.c.R. ..
A half a· furlong away from the acquired land. The learned Civil
Judge also relied upon a letter of the Collector of Aurangabad
addressed to the Deputy Director of Excise Department wherein it
was indicated that the price ofland in the area was about Rs. 5 per
square yard and that was stated with reference to some land near
the Railway Station. The acquired land is admittedly not far
B away from the Railway Station.
The learned Civil Judge did in fact state in his order that the
lands of Yusufuddin were situated by the side of the road leading
from Panchakki to Bhadkal gate. The historical monument of
Panchakki has been stated to be located by the side of the
c acquired land. A State Hotel has come up not far away from the
land. The Court took judicial notice of the fact that Aurangabad
city had developed rapidly following police action which brought
about accession of the Nizam's State to India. Aurangabad had
become the regional headquarters of a zone of the State. The
city had been industrially developing. Therefore, the lands in
D question had potential value which had to be kept in view in the
matter of fixing the compensation under the Land Acquisition Act.
Admittedly, the lands of Yusufuddin and the lands belonging
to Kausalya Devi group are in one adjacent tract. Therefore,
it would not be improper to assume, particularly in the absence
E of any contrary evidence from the side of the State that there
was no great disparity in the quality of lands and that all these
lands were substantially of similar type.
Two principles relating to the matter of fi•ation of compensa-
tion relevant for the present purpose may be kept in view. When
F large tracts are acquired, the transaction in respect of small proper-
ties do not offer a prope~ guideline. Therefore, the valuation in
transactions in regard to smaller property is not taken as a real
basis for determining the compensation for larger tracts of property
(see Prithvi Raj Taneja v. State of Madhya Pradesh and Ors(1). ;
Padma Uppal etc. v. State of Punjab & Ors('). In certain .other
G cases this Court indicated that for determining the market value of·
a large property on the basis of a sale transaction for smaller.
property a deduction should be given~ In Special Land Acquisition
Officer, Bangalore v. T. Adinarayan Setty, (') a reduction of 25 %
--------· - - ·
(1) [1972) 2 S.C.R. 633.
H (2) [1977] 1 S.C.R. 329.
(3) [1959) Suppl. 1 s.c.R. 404.
KAUSHALYA DEVI v. LAND ACQN. OFFICER (Ranganath Misra, J.) 913

was indicated while there are certain other cases where the view is A
that the reduction should be to the extent of 1/3. Again, in the
very scheme for fixation of compensation provided by the· Land
Acquisition ·Act there is bound to be some amount of arbitrariness.
The acquistion is deemed to be a statutory purchase and on the
basis-Of. evidence the law requires an assumed consideration to be
determined. Keeping in view the fact that acquisition is of com- B
pulsory nature, a solatium of 15 % on the valuation is provided.
Bearing these considerations in view and taking into account the
fact that the lands in question were located in a developed part of
Aurangabad and had considerable potential value, we proceed to
fix the market value of the property. One acre of land is equal c
to 4840 square yadrs. The learned Civil Judge had maintained a
distinction between the two classes oflands. We take note of that
fact also in the matter of determing the compensation. We, how-
ever, do not propose to indicate separate valuations for thet wo
classes of lands. Taking an overall picture of the ma!ter, we direct·
compensation to be fixed at the rate of Rs. 1.50 per square yard D
or Rs. 7260 per acre for all the lands of the present appellants
acquired by the notification in question. Over and above this
amount, the appellants shall be entitled to statutory solatium of
15 % as also interest at the rate of 6 % per annum on the addi-
tional compensation from the date of dispossession till payment E
thereof. We direct the Collector to work out the compensation
on the basis indicated above within two months from today. If
Ute amount so determined is not paid within three monts there-
after, the interest on the additional compensatfoµ shall be at the
rate of 12 % par annum till payment is made.
F
OrJintily, thi appJl!ants should have been entitled to costs.
Keeping in view the history of the litigation and manner in which the
Kausalya Dovi group of appellants had conducted themselve• on
the earlier occasion before this .court, we do not award costs to
them. In Civil Appoal No. 2462/81 appellant Syed Yusufuddin
Syed Ziauddin will be c 1titled to .his costs in this Court and hearing .G
fee of Rs. 1,000.

H
J'!.V.K. Appeals a/lo>eeq.