THE SPECIAL LAND ACQUISITION OFFICER, DHARWADversusSMT. TAJAR HANIFABI

A      THE SPECIAL LAND ACQUISITION OFFICER, DHARWAD
                              v.
                     SMT. TAJAR HANIFABI

                                AUGUST 19, 1996

B              [K. RAMASWAMY AND G.B. PATTANAIK, JJ.]

          Land Acquisition Act, 1894 : Sections 4, 11, 23 and 28.

           Land Acquisiti01r--Compensation--Detem1ination of-Acquisition of
C   six acres of land for Industrial Development-Award of compensation by
    Land Acquisition Officer on acrage basis-Reference Court and High Court
    determining compensation on square foot basis based upon a sale transaction
    relating to .a small extent of land situated at one and a half kms. away from
    acquired lancf-Appeal-Held the compensation detennined by die High
    Cowt and the reference court was not in accordance with law-The finding
D   of Reference Court that the lands are possessed of potential value was
    obviously illegal-Held a sum of Rs. 45, 000 per acre would be reasonable
    compensation for the acquired lands-Claimants held also entitled to
    solarium interest and additional amount.

E        CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11341 of
    1996 Etc.

         From the Judgment and Order dated 16.6.93 of the Karnataka High
    Court in M.FA. No. 1395 of 1991.

F         K.R. Nagaraja and K.L. Taneja for the Appellant.

          K. V. Narayanappa and Ms. Kiran Suri for impleading party.

          P. Mahale ;ind Shanta Kr. Mahale for the Respondents.

G         The following Order of the Court was delivered :

          Impleadment allowed.

           Leave granted.

H         We have heard learned counsel for parties.
                                         748
                  SPL. LAND ACQN. OFFICER v. T. HANIFAlll                    749

           These appeals by special leave arises from the judgment and order A
    of the High Court of Karnataka dated June 16, 1993 made in MFA No.
    1395 of 1995. The admitted facts are that notification under Section 4(1)
    of the Land Acquisition Act, 1894 (for short, the "Act") was published on
    March 7, 1985 acquiring six acres of land near Chikodi municipality for
    industrial development. The Land Acquisition Officer (LAO) granted
                                                                                 B
    compensation on acrage basis. On reference, relying upon the sale deed
    Ex. P-8 in respect of land of an extent of 40" x 40" situated one and a half
    kms. away from the acquired lands which worked out to Rs. 12 per square
    foot, the Civil Judge enhanced the compensation to Rs. 6 per square foot
    which worked out to Rs. 2,66,360 per acre. On appeal, the High Court
    reduced the compensation to Rs. 4.50 per square foot which worked out          c
    to Rs. 1,96,020 per acre.

           The only question for consideration is : whether the compensation
    determined by the High Court and the reference Court is in accordance
    with law? It is seen that the sole basis worked out by both the reference D
    Court and the High Court was Ex. P-8 spoken to by the vendor PW-2 in
    respect of land of an ei<tent of 40" x 40" in the developed area in which
    case the compensation worked out to Rs. 12 square foot. Since six acres
    of land was sought to be acquired in two survey numbers, admeasuring 1.15
    gunthas in Rs. No. 407/2 and 4.25 gunthas in RS No. 417/1, no prudent and
    willing vendee would offer that rate of purchase of land on square foot E
    basis. The High Court and the reference Court, therefore, committed
    obvious error of law in determining the compensation on square foot basis


-   relying solely on Ex. P-8 It is seen that Ex. P-8 is in respect of a small extent
    of land admeasuring 40" x 40" situated at a distance of 1.5 kms. within the
    developed municipal are. Under those circumstances, PW-8 offered no F
    comparable sale.

           The question then is : what would be the reasonable compensation
    for the acquired lands? Though the reference Court has noted that it has
    a potential value, obviously it is a wrong finding given by it. On going G
    through the award of the Collector we find, as specifically stated by him,
    that he had inspected the lands on August 11, 1986 before determination
    of the compensation; he found that the lands were cultivated and certificate
    to that effect was also obtained from the sub-Tehsildar. Under those
    circumstances, the finding that the lands are possessed of potential value
    is obviously illegal. It is seen that the respondents themselves had sold plots H
    750                   SUPREME COURT REPORTS [1996] SUPP. 4 S.C.R.

A   of land admeasuring 60" x 40" which were part of the acquired lands, in
    the year 1985 for a sum of Rs. 6,000 per plot. It would be obvious that this
    document was brought in existence to inflate the market value which
    worked out to Rs. 1,89,000. From the totality of the facts, particularly that
    the lands are agricultural lands, we are of the view that a sum of Rs. 45,000
    per acre would be reasonable compensation for the acquired lands.
B
           The appeals are accordingly allowed. The rlaimants are entitled to
    solatium under Section 23(2) @ 30% of the enhanced compensation and
    interest under Section 28 @ 9% of the enhanced compensation from the
    date taking possession of the land for one year and thereafter @ 15% till
C   date of deposit into Court. They are also entitled to additional amount
    under Section 23 (1-A) @ 12 per annum from the date of notification under
    Section 4(1) till date of award under Section 11 or of taking possession,
    whichever is earlier. No costs.

    T.N.A.                                                     Appeals allowed.