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Supreme Court of India

THE LAND ACQUISITION OFFICER AND SUB-COLLECTOR, GADWALversusSMT. SREELATHA BHOOPAL AND ANR.

Citation
1997 INSC 415
Decided
21 April 1997
Disposal
Leave Granted & Allowed

Holding

The Supreme Court held that the appropriate market value of the land to be acquired is Rs 20,000 per acre, and substituted this award, setting aside the High Court’s decision.

Summary

The State issued a notification under Section 4(1) of the Land Acquisition Act, 1894 to acquire land in Gadwal for a bus depot. The Land Acquisition Officer initially awarded compensation of Rs 8,000 per acre, which was enhanced by the Civil Court to Rs 20 per square yard and confirmed by the Andhra Pradesh High Court. On appeal, the Supreme Court observed that the High Court had improperly relied on the sale of a small parcel of land to determine market value, ignoring the principle that a large tract commands a higher price. Considering the extent of the land and the evidence, the Court substituted the award with a market value of Rs 20,000 per acre, along with a 30% solatium and interest at 9% per annum (15% thereafter). The appeal was allowed, setting aside the High Court’s order.

Issues considered

  • Whether the compensation awarded under the Land Acquisition Act should be based on the market value of the entire tract rather than a sale of a small parcel.
  • Whether the High Court erred in relying on evidence of a small piece of land to determine market value.
  • What is the appropriate market value and the entitlement to solatium and interest under the Act.

Legislation cited

Subjects

Land acquisitionCompensationMarket valueSolatiumInterestSupreme CourtPublic purposeBus depotLarge tract valuation

Judgment

              THE LAND ACQUISITION OFFICER AND                                A
                   SUB-COLLECTOR, GADWAL
                              v.
              SMT. SREELATHA BHOOPAL AND ANR.

                              APRIL 21, 1997
                                                                              B
              [K. RAMASWAMY AND D.P. WADHWA, JJ.]

        Land Acquisition Act, 1894 :

       Compensatiort-Award of--Land Acquisition Officer awarding Rs. C
8,000 per acre--Confinned by the High Court-On appeal held: --111 view of
the state of evidence, the large extent of land as also the facts the appropriate
market value would be Rs. 20, 000 per acre, which is substituted in place of
Rs. 8, 000 awarded by the Land Acquisition Officer and co11fim1ed by High
Cowt-Also entitled to usual solarium at the rate of 30% and interest 011
enhanced compensation at the rate of 9% per annum from the date of taking D
possession till the date of paymellt of such enhanced compensation and at
the rate of 15% thereafter till deposit of enhanced compensation into the
court.

        CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3147 of               E
1997.

     From the Judgment and Order dated 8.8.96 of the Andhra Pradesh
High Court in A. No. 2391 of 1986.

     Altaf Ahmed, Additional Solicitor General and B. Parthasarathy for        F
the Appellant.

        The following Order of the Court was delivered :

      Though notices have been served, respondents are not appearing
either in person or through counsel.                                          G
        Leave granted.

      Notification under Section 4(1) of the Land Acquisition Act, 1894
(for short, the 'Act') was published on September 26, 1981 for public
purpose, namely, establishment of Bus Depot/Stand in Gadwal Town of H
                                  875
    876                  SUPREME COURT REPORTS                    [1997) 3 S.C.R.

A Mahaboobnagar District in the State of Andhra Pradesh. The Land Ac-
    quisition Officer in his award dated December 27, 1983 awarded compen-
    sation at the rate of Rs. 8,000 per acre. On reference, the Civil Court by
    its award and decree dated November 15, 1985, enhanced the compensa-
    tion to Rs. 20 per sq. yd. On appeal, the Division Bench of the A.P. High
    Court in Appeal No. 2391/86 by judgment and decree dated August 8, 1996
B   has confirmed the same. Thus, this appeal, by special leave.

           The High Court has relied upon Ex. A-4 the sale wherein related to
    a small piece of land, and accordingly confirmed the market value @ Rs.
    20 per sq. yd. It is now well settled legal position that small pieces of land
C   cannot offer the same market value when a large track of land is purchased
    in an open market by a willing and prudent purchaser. It is settled legal
    position that the Court has to put itself in the armchair of a prudent
    purchaser and put the question to itself whether the land, in the given
    circumstances, would fetch the same market value as is likely to be dcter-
D   mined by the court when small piece of land would be offered for sale.
    Unfortunately, the High Court has not adopted that principle; it has merely
    proceeded to rely open sale deed relating to a small piece of land. We have
    gone through the award of the Collector. The Collector referred to various
    sale deeds and ultimately he relied upon a sale transaction and held that
    the lands in the sale deed at SI. No. 120, pertaining to survey Nos. 854,
E   which fetched the rate of Rs. 4,519-77 as on the date of the sale, namely,
     December 27, 1978 was comparable one. The Land Acquisition Officer
     noted that the lands therein were converted into non-agricultural lands and
     the lands in question still remained to be agricultural lands and were
     adjacent to Gadwal Town. Under these circumstances, he awarded the
     market value at the rate of Rs. 8,000 per acre. It is settled legal position
F
     that the burden is on the claimant to prove by adducing acceptable
     evidence for higher compensation. Having rejected Ex. A-4 relied on by
     the High Court, though the award of Land Acquisition Officer is not
     evidence stlicto sensu with a view to do substantial justice. We looked into
     it and considered the material collected therein. Having regard to the stale
G    of evidence and large extent of the land in question as also and the facts,
     we think that the appropriate market value would be Rs. 20,000 per acre
     and would be just and reasonable compensation.

          The appeal is accordingly allowed. The order of the reference Court
H as confirmed by the High Court is set aside. Instead, the award shall be
        LAND ACQUISITION OFFICER AND SUB-COLLECTOR. GADWALv. S. BHOOPAL   877

substituted by Rs. 20,000 per acre with usual solatium at the rate of 30%        A
and interest on enhanced compensation at the rate of 9%oPer annum from
the date of taking possession to the date of payment of such enahnced
compensation and al the rate of 15% thereafter till deposit of enhanced
compensation into the court. No orders as to costs.

G.N.                                                           Appeal allowed.   B


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