Holding

Section 24 of the Land Acquisition Act prohibits consideration of purpose, future development, or prospective use in fixing market value, so the compensation awarded by the division bench stands.

Summary

The Supreme Court examined appeals by landowners whose 881 acres were acquired under the Land Acquisition Act, 1894 for municipal development. After a series of assessments by the acquisition officer, district judge, single judge and a division bench, the claimants sought further enhancement of compensation, arguing that the court should consider future development potential, the purpose of acquisition, and that the belting classification and deduction of one‑third for development charges were unjust. The Court held that Section 24 of the Act expressly bars consideration of the purpose of acquisition, prospective use or future development in fixing market value, and that sale transactions of small plots are irrelevant for large tracts. It affirmed the division bench’s award of Rs. 50,000 and Rs. 48,400 per acre and rejected the claimants’ contentions regarding belting and development charges. Consequently, the appeals were dismissed.

Issues considered

The relevance of future development potential, purpose of acquisition, and prospective use in determining market value under the Land Acquisition Act.
Whether the belting (distance from main road) classification and deduction of one‑third for development charges are permissible.
The effect of the State’s filing or non‑filing of appeals on the determination of compensation.

Legislation cited

Land Acquisition Act, 1894s. 18, s. 24, s. 4(1)

Subjects

Land acquisitionCompensationMarket valueSection 24Future developmentPurpose of acquisitionBeltingDevelopment charges

Judgment

I'
A TARLOCHAN SINGH AND ANR; ETC. ETC.
v.
THE STATE OF PUNJAB AND ORS.

NOVEMBER29, 1994

B '
· [K. RAMASWAMY, N.P. SINGH AND N. VENKATACHALA, JJ.]

.Land Acquisition Act, 1894
'
Sections 4 (1), 18 and 24-Compensation-Award of-Factors to be
taken int() account-Relevance 4-Purpose of acquisition and future
c developme~I ·. and potential prospective use-Whether . relevant in .
determining market value-Held: No.

Land to· the extent of 881 acres were acquired for the planned
a
development of municipality. The Land "Acquisition Officer in his
award determined the compensation to the plain lands at Rs. 39,400
D 1- I · _

per acre and to the land abutting upto a depth of 100 karams from the
Ludhiana-Chandigarh main road at Rs. 42,400 per acre and to the ·
other lands at different rates.

On a reference, the District Judge fixed the market value of the
E · land abutting the Ludhiana~handigarh Road upto a depth of 100
Karams at Rs. 72,600 per acre and for the ·remaining land at Rs. 58,080
· per acre. The State did not file an appeal The claimants filed appeals
for enhancement of the compensation. Single Judge of the High Court
determined the market value at Rs. 89,000 and Rs. 39,000 respectively
"· per acre•. The Division Bench maintained the award of compensation to
, F' . t_he land upto a depth of 100 karams abutting the Ludhiana-
Chandiga.rh main road, but enhanced the market value for the rest of
the lands from 100-200 karams a! Rs. 58,080 and for the remaining
lands @ Rs. 50,000 and Rs. 48,400 per acre. The claimants have filed
the present appeals for further increaseJn compensation•
•
G Appellants contended that the Division Bench was not justified in
deducting one-third towards development· charges; that the
·compensation of Rs. 39,000 per acre for the lands in Kuliawal was
··unjust and arbitrary since for the lands equally situated in Jamalpur,
Rs. 50,000 was awarded; that since the State did not prefer any appeal,
H the reduction of the belting from 100 to 55 karams was not correct; and

200
T. SINGH v. THE STATE OF PB. 201

that potential value for future development should have been taken into A
consideration in fixing the market value.

Dismissing the appeals, this Court

HELD : 1.1. The appellants are not entitled to further increase for
determinatioi:t of compensation and the appeals do not warrant B
interference. [204 G]

1.2. It is seen that a land of magnitude of 881 acres when was
acquired for planned development of the town, a willing purchaser
would offer- the same rates at which small plots admeasuring to 120 to
250 sq. ft. were offered and sold. It is impossible to accept that the C
lands would fetch that price when a large track of land was offered for
sale in open market to willing buyer. Under those circumstances, sale
transactions are absolutely and totally irrelevant and cannot form the
basis to determine the compensation. Even though the vendor or
vendees were examined to prove the sale transaction, this Court cannot D
determine market value on that basis and award compensation. The
.court has power and duty to evaluate the evidence in proper
prospective, apply correct principles and award compensation. Since
the State did not file any ap1>4:als, this Court cannot interfere witb the
award of the market value determined @ Rs. 50,000 and Rs. 48,400 by
the Division Bench of the High Court for the said lands. [203 D to F] E
2. It is common knowledge that even all the' lands in the same
village may not possess the same quality and command common
market prices. It is seen that the lands in Jamalpur are cutting across
the main road Ludhiana-Chandigarh and that, therefore, the High
Court awarded·the compensation at different rates on the basis of F
belting. Kuliawal lands are on the northern side below Tajpur Road
and· the road is not an important one. It was also stated in the
impugned judgment that lands.in Kuliawal village is not abutting main
road and that, therefore, the lands do not command higher value.
Accordingly, the market value was determined for the lands abutting
55 karams at different rate and for the rest of the =ands compensation G
was awarded @ Rs. 39,000. The appellants' lands are not within the
belt. Therefore, the classification made on the basis of the situation of
the land - cannot be said to be illegal. Since the lands situated in
Kuliawal are not on par with the lands in Jamalpur village, the
distinction made by the High Court was right. [204 A to CJ H
202 SUPREME COURT REPORTS [1994] SUPP. 6 S.C.R

A 3. The contention that the State did not file any appeal and
therefore the reduction of the belting from 100 to 55 karams, cannot be
accepted since the State in fact had filed the appeals before the Division ·
Bench. The Division Bench had taken that factor of belting into
consideration in determining the market value. [204 D]

B 4. Section 24 of the Land Acquisition Act expressly prohibits and
puts an embargo on the Court in taking the factors mentioned iQ ..
section 24 as irrelevant in determining the market value. Therefore, the
future development and potential prospective use of the acquisition e.tc.
are not relevant circumstances. Even the purpose of acquisition also is
not relevant. [204 F & G] ·
c
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4056-57 of
1984 Etc. Etc.

From the Judgment and Order dated 23-12-87 of the Punjab and
Haryana High Court in L.P.A. Nos. 48 and 44of1981
D
S.S. Javali, B.N. Naik, Harbans Lal, D.V. Sehgal, V.C. Mahajan, Dr.
Meera Aggarwal, R.C. Mishra, Ashok Mahajan, S.K. Mehta, M.K. Dua,
P.N. Puri, R.C. Pathak, P.R. Bahl, Ms. Prema Tandon, RanbirYadav, G.K.
Bansal and R.S. Suri for the appearing parties.

The following Order of the Court was delivered :
E
Notification under section 4 (1) of the Land Acquisition Act, 1894 (for
short 'the Act') was published in the State Gazette on March 1, 1974
acquiring a total extent of 881 acres of land for planned development of the
municipality. The Land Acquisition Collector in his award dated March 31,
1976 determined the compensation to the plain lands at.Rs. 39,400 per acre
F and to the land abutting up~o a depth of 100 karams (5-1/2 feet each karam)
from the Ludhiana-Chan<fig{Uii main road @ Rs. 42,400 per acre and for
the other lands different rates were given with which we are not presently
concerned. On reference under section 18, the Addi. District Judge by his
award and decree dated October 18, 1978 fixed the market value of the land
G
abutting the Ludhiana-Chandigarh Road upto a depth of 100 karams at Rs. .,
72,600 per acre and for the remaining land @ Rs. 58,080 per acre. The
State filed no appeals. On appeal by the claimants for further enhancement,· .
the learned Single Judge by his judgment and decree dated August 20, 1980
determined the market value upto a depth of 100 karams abutting
Ludhiana-Chandigarh Road at Rs. 89;000 and for the remaining land at Rs.
39,000 per acre. On L.P.A., the Division Bench by it$ judgment and decree
H
i . . .

/. . )· T. SINGH v. Tiffi STATE OF PB. • . . 203 ·

·dated December 23,: 1981 while miintain~g the award of the compensation A
of the land upto the depth of I 00 karams abutting the Ludhiana-Chandigarh
main road has enhanced the market value for the rest of the tarids from I 00-
. ·200 karams at Rs. 58,080 and for the remaining lands @Rs. 50,000 and Rs .
. ' · 48,400 per acre. Still dissatisfied therewith, the appellants have filed the
appeals for further increase in the compensation ..
' ' . . B
· Firstly, it was contended that the Division Bench having determined
the . compensation was not justified . in deducting I/3rd . towards
developmental charges as the sales therein though were on yardige basis
and determined the compensation on acreage basis @ Rs. 58,000 Rs.
50,000 and Rs. 48,000 etc. Though we find force in the contention, the
matter does not rest with that conclusion. It is seen that the High Court in its C
judgment has relied upon. the sale transactions small extents of 150 to 250
. sq. yards which was worked out on an average of Rs. l,37,600. They were
sold on yardage basis. The learned Judges have determined market value on
acreage basis and deducted I/3rd towards development charges and
determined the market value on that basis. The · question emerges,
ultimately, whether the fixation of the market value @ Rs. 50,000 and Rs. D
48,000 'is unwazraiited on the facts and circumstances of these cases. It is
seen that a land ofmagnitudeof881 acres when was acquired for planned
development of the town, a willing purchaser would offer the same rates at
which small plots admeasuring to 120 to 250 sq. ft. were offered and sold.
It is impossible to accept that the lands would fetch that price when a large
track of land was offered for sale in open market to willing buyer. Under .E
those circumstances, sale transactions are absolutely and totally irrelevant ·
and cannot form the basis to determine the compensation. Even though the
vendor or vendees were examined to prove the sale transaction, we cannot
· determine market value on that basis and award compensation. The court
bas power and. duty to evaluate the evidence in proper perspective, apply
correct principles and award compensation. Since the State did not file any F
' 'appeals, we cannot interfere with the award of the market value determined
@ Rs. 50,00<i and Rs. 48,400 by the Division Ilench for the lands in
apl?eals;·.· .

.· · It is next contended that for lands in Jamalpur, compensation was
·awarded at the rate of Rs. 50,000. n(e lands in Kuliawal were equally G
situated and compensation paid at the rate of Rs. 39,000 per acre is unjust .
. and arbitrary..We fmd no force in the contention. Though some plans have
·......,. · • been produced before us to show that both the lands are on the side of
· Tajpur Road, they were not filed in the reference court not subjected them
for cross-examination of the L.A.C. of the respective distances of the place, •
_the quality of the land at the respective village and the prices prevailing in H
. 204.
\
•
SUPREME COURT REPORTS [1994] SUPP. 6 S.C.R
'
each village. It is co~on knowledge that even all the lands in the same
A
village may 'not possess the same quality and coinmand common market
prices. It is seen that the lands in Jamalpur are cutting across the main road
Ludhiana-Chandigarh and that, therefore, the learned Judges have awarded ·
the ccmpensation at· different. rates on the basis of belting. Whereas
Kuliawal lands are on the northern side below Tajpur Road and the road is
B · not an important _one.
. ' It was also stated in the judgment that lands in
\ Kuliawal village is not abutting main road and that, therefore, the lands do
not command any higher ·value. Accordingly, the market value was
determined for the lands abutting 55 karams at different rate and for the rest
of the' JaiidS compensation was awarded @ Rs. 39,000. The appellants'
lands are not within the belt Therefore, the classification made on the basis
c of the situation ·of the land cannot be said to be illegal. Since the lands
situated in Kuliawal are not on par with the lands in Jamalpur village the
distinction made by the High Court was right The learned Judges
determined different rates of market value on that basis. ·

It is next contended that the State did not. file any appeal and that,
D therefore, th~ reduction of the belting from 100 to 55 karams is not correct.
On verification when it was pointed out to Shri D.V. Sehgal, learned Senior
counsel, that the State did file Letters Patent appeals against the Single
Judge's decrees, he has fairly stated, on verification, that the State had filed .
the·appeals before the Division Bench. The Division Bench had taken that
factor of belting into consideration in determining the market value.
E
It is next contended that the lands in the small extents of about 33 .sale
transactions would show that the lands are capable of fetching in future·
higher miiket value and the notification itself was published for the
·purpose of planned development of city. Therefore, the High Court was not
• .. justified in determining the market value @ Rs. 58,000 for Jamalpur area.
F "Pot~tial value for future development should have been taken into
• consideration in flXing the market value. Section 24 of the · Land
Acquisition Act expressly prohibits and puts an embargo on the Court in
taking the factors· mentioned in section 24 as relevant in determining the
markefvalue. Under · these circumstances, ·th~ future development and
potential prospective use of the acquisition etc. are not relevant
G circumstances. Even the purpose of acquisition also is not relevant We are
of the opinion that the appellants are not entitled to further increase for
determination of compeiisatioli and the appeals do not warrant interference.
The·· appeals are accordingly dismissed but without costs since the
respondents are not represented by any ccunsel. •
G.N. Appeals dismissed.