V.G. KULKARNIversusTHE SPL. LAND ACQUISITION OFFICER

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A                                 V.G. KULKARNI
                                          v.
                   THE SPL. LAND ACQUISITION OFFICER

                                  MARCH 15, 1996

B                [K. RAMASWAMY AND G.T. NANA VAT!, JJ.]

            Land Acquisition Act, 1894: Sections 4( 1) and 23.

            Land acquisitiolt-Compensatio11---Dete11nination of-Land acquired
C for Indusoial development-Compensation-Enhancement by Reference
    Cowt-Reduction by High Cowt-Validity of-Comparable case decided by
    High Cowt-Reliance by High Cowt on compensation detennined in com-
    parable case--Detennination of compensation @Rs. 56,000 per acre-Addi-
    tion of 20% more as notification in comparable case was of earlier
    date-High Cowt doing this with a view to doing justice to the claimant-Held
D   approach adopted by High Court was not vitiated by any error of law.

          Judicial Notice-Applicability to escalation of market price of land
    every yem-+leld p1inciple of judicial notice cannot be extended to such a
    matter-Claimant must prove it by adducing evidence.

E           CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1802 of
    1994.

         From the Judgment and Order dated 25.9.92 of the Karnataka High
    Court in Misc. F.A. No. 1898 of 1991.

F         K. Madhava Reddy, S.S. Javali, G.L. Sanghi, D. Dave, Sr. Advs.,
    Anand A. Magadum, E.C. Vidya Sagar, Gopal Singh, T.V. Ratnam, Ms.
    Kiran Suri, B.G. Sricharan, G.V. Chandrashekhar, P.P. Singh, P. Mahale,
    S.K. Kulkarni, M.T. George and Ms. Sangeeta Ku1nar, AU.vs. wilh them for
    the appearing parties.
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            The following Order of the Court was delivered :

           Notification under Section 4(1) of the Land Acquisition Act, 1894
    (for short, the 'Act') acquiring 20 acres and 4 gunthas of land for industrial
    development, was published on January 21, 1982. The Land Acquisition
H   Officer determined compensation at the rate of Rs. 8,000 per acre. On
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                        V.G. KULKARNiv. LAND ACQN. OFFICER                          507

         reference the Civil Court enhanced the compensation to Rs. 8.97 per s.q. A
         ft. which worked out to Rs. 3,90,000 per acre. On appeal, the High Court
         reduced the compensation to Rs. 67,200 per acre. Thus, this appeal by
         special leave.

                Shri J avali, learned senior counsel for the appellant contended that      B
         the High Court, having noticed that the lands are possessed of immense
         potentiality for non-agricultural use and that Dharwad City has been
         developing towards the land under acquisition, committed grievous error
         of law in reducing the compensation. He also referred to another judgment
         of the High Court wherein the High Court had held that 10% escalation
         in price is to be given for each year. In this case, even accepting the view      C
         of the High Court that Rs. 67,200 would be the market value, due to time
         lag of about 10 months from previous notification, the appellant is entitled
         to 10% more compensation.

                The question, therefore, is : whether the High Court has committed         D
         any error of law or applied wrong principle of law in determining the
         compensation ? The High Court in para 37 found that the sale deeds
         Exs.P-2 to P-7 being of the year 1987, i.e., 3-1/2 years after the notification
         published under Section 4(1), were not comparable sales. Moreover, those
         sale deeds related to small corner plots in a developed area. Therefore,          E
         they do not offer any comparable sales. The High Court also fonnd that
         though the lands are situated towards the University area which is develop-
         ing, actual developments would take some more years. There is no evidence
         of actual development taking place near the land in question. Under those
         circumstances, in the absence of any comparable sale i.Tistances, the High
         Court relied upon determination of the market price at Rs. 56,000 per acre        F
         in respect of nearby lands which were the subject-matter of MFA Nos. 678
         to 681 of 1989 and which were also disposed of by the High Court on that
         day, viz., September 25, 1992 and added 20% more as the notification in
         those cases was published on October 30, 1981 while the notification in this
         case is of January 1982. Thus the High Court determined the compensation          G
,_       in this case at the rate of Rs. 67,200 per acre. It can be seen from the
         evidence on record that as on the date of the notification that acquired
         lands did not possess building potentiality. In view of the evidence on
         record that it would have taken 3 to 4 years for actual development of area,
         the finding recorded by the Reference Court that the lands possessed              H
    508                  SUPREME COURT REPORTS                  (1996] 3 S.C.R.
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A building potentiality was not correct. It appears that the learned District
    Judge did not correctly appreciate the legal position. Therefore, deter-
    mination of the compensation by the Reference Court on the basis that the
    lands had already acquired building potentiality was not all proper. No
    willing purchaser would have purchased the land at the rate of Rs. 3,90,000
    per acre. The acid test of the court sitting in the arm chair of a willing
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    prudent purchaser in open market is whether he would be prepared to
    purchase the land at the rate about to be determined by the court. The
    sale deeds, Exs.P-2 and P-3 relied upon by the claimants were not com-
    parable sales as found by the High Court. The lands were sold in plots near
C   the acquired lands only in 1985, only after further development had taken
    place in that area. Therefore, those two instances of sale could not have
    afforded a reasonable basis for determination of compensation. The High
    Court, therefore, has not committed any error of law in rejecting those sale
    instances.

D       Further contention of the learned counsel for the appellant that since
  the judgment in the above referred cases (MFA Nos. 678 to 681 of 1989)
  has not been made a part of the record of this case, the High Court could
  not have taken note of the compensation determined at the rate of Rs.
  56,000 per acre in those cases. Though legally, the learned counsel is right,
E he overlooks the fact that the High Court has done it to do justice to the
  appellant instead of throwing its hands up in despair in the absence of
  evidence justifying giving of higher compensation instead of what was
  awarded by the Land Acquisition Officer. It has held that though the
  claimants have failed to establish on the basis of evidence led in the case
  that the compensation awarded by the Land Acquisition Officer deserved
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  to be enhanced, it can take notice of the market value determined in
  comparable cases disposed of on that day. If at all any complaint could be
  made in this behalf, it would be by the State and not by the appellant. With
  regard to escalation of market price of lands every year it has to be stated
  that the principle of taking judicial notice cannot be extended to such a
G matter also. Each case to be considered on its own facts. The claimants
  would be required to establish by adducing evidence that there was gradual
  rise in price due to development and constant demand for land in the
  neighbourhood. Therefore, the approach adopted by the High Court can-
  not be said to be vitiated by any error of law. The High Court has in fact
H extended the benefit of escalation in price to the claimants, by increasing
              V.G. KULKARNI v. LAND ACQN. OFFICER                      509

the market value determined at Rs. 56,000 per acre in the aforesaid case A
by 20%.

       For all these reasons, we hold that the High Court has not committed
any illegality in determining the compensation at Rs. 67,200 per acre and
holding that further increase in the market price by the reference Court
was not justified.                                                            B

      The appeal is dismissed with costs.

T.N.A.                                                  Appeal dismissed.