MAYA DEVI (D) THROUGH LRS & ORS. versus STATE OF HARYANA & ANR. on 25 January 2018

[2018] 1 S.C.R. 225

MAYA DEVI (D) THROUGH LRS & ORS.

v.

STATE OF HARYANA & ANR.

(Civil Appeal Nos. 873-874 of 2018)

JANUARY 25, 2018

[RANJAN GOGOI AND R. BANUMATHI, JJ.]

Land Acquisition Act, 1894:

ss.23(1), 4(1) – Land acquisition – Determination ofcompensation – Relevant date – Land acquired by notification dated12.02.1988 – Sale deed relied upon by claimants dated 27.12.1988– High Court did not consider the said sale deed as an exemplar onthe ground that the same is post notification – Justification of –Held: In terms of s. 23(1), the compensation to be awarded shall bedetermined by the reference court, based upon the market value ofthe acquired land on the date of the publication of the notificationu/s. 4(1) – Post notification instances cannot be taken intoconsideration for determining the compensation of the acquiredland – Sale deed relied upon by the claimants dated 27.12.1988 ispost notification, thus, rightly not considered by the High Court.

Land acquisition – Determination of compensation –Deduction at the rate of 67.5% for development charges –Considering the fact that the land acquired was required fordevelopment, and that the property covered under the exemplar wasfor a small extent of 9 marlas of land which was sold for Rs.25,500/-, the High Court adopted the rate of escalation at 10% andcalculated the value at Rs.6,64,887/-, and applied maximumdeduction at 67.5% and calculated the compensation to be paid atRs.2,19,413/- per acre – Justification of – Held: High Court applieddeduction at 67.5% which is on the higher side – In the facts andcircumstance of the case, considering that the exemplar dated26.05.1983 was for a small extent of land and that the acquiredland has to be developed for construction of warehouse, it isappropriate to apply one-third deduction, that is Rs.2,21,629/- fromRs.6,64,887/-, the compensation to be awarded is arrived atRs.4,43,258/- per acre, payable with all statutory benefits.

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Kolkata Metropolitan Development Authority v.Gobinda Chandra Makal and Anr. [2011] 14 SCR 373:(2011) 9 SCC 207 – relied on.

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Haryana State Agricultural Market Board and Anr. v.Krishan Kumar and Ors. (2011) 15 SCC 297;Lal ChandBv. Union of India and Another [2009] 13 SCR 622 :(2009) 15 SCC 769;Andhra Pradesh Housing Boardv. K. Manohar Reddy and Ors. [2010] 11 SCR 1107 :(2010) 12 SCC 707;Major General Kapil Mehra andOrs. v. Union of India and Anr.[2014] 10 SCR 1153 :(2015) 2 SCC 262;Subh Ram and Others v. State ofCHaryana and Anr. [2009] 15 SCR 287 : (2010) 1 SCC444 – referred to.

Case Law Reference

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CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 873-874 of 2018.

From the Judgment and Order dated 14.05.2013 in RFA No. 1519Fof 1993 (O&M) and Final Order dated 12.02.2015 in Review ApplicationNo. 13-CI of 2015 in RFA No. 1519 of 1993 of the High Court of Punjaband Haryana at Chandigarh.

Vijay Hansaria, Sr. Adv., Ajay Garg, Ms. Shilpa Sharma, RajivShankar Dvivedi, Advs. for the Appellants.

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Ms. Alka Agrawal, Ms. Tusharika Sharma, Ms. Anamika Agrawal,Smar Vijay Singh, Sanjay Kumar Visen, Advs. for the Respondents.

The Judgment of the Court was delivered by

R. BANUMATHI, J. 1. Leave granted

2. These appeals arise out of the judgment of the High Court ofPunjab and Haryana at Chandigarh in and by which the High Courtenhanced the compensation to Rs.2,19,413/- per acre and also dismissedthe review holding that the subsequent evidence sought to be brought isnot relevant as it is based upon post notification.

3. Respondent No.2-Haryana State Ware Housing Corporationhad acquired 40 kanal and 8 marlas land at Rania for construction ofwarehouse/godown vide Notification dated 12.02.1988 issued underSection 4(1) of the Land Acquisition Act, 1894 (for short ‘the Act’); outof which 40 kanal 8 marlas land, 21 kanal 6 marlas land was of thepresent appellants; Notification dated 21.02.1989 was issued underSection 6 of the Act. Vide award No.9 dated 19.05.1990, the LandAcquisition Officer awarded compensation of Rs.75,000/- per acre.Being aggrieved by the award dated 19.05.1990, the appellants/claimantsfiled a reference petition under Section 18 of the Act before AdditionalDistrict Judge, Sirsa for enhancement of compensation, which came tobe dismissed by judgment dated 15.02.1993. Being aggrieved by thedismissal of the claim for enhancement, the appellants/claimants filedappeal before the High Court in R.F.A.No.1519 of 1993. The HighCourt relied upon the sale deed dated 26.05.1983 wherein small extentof land of 9 marlas was sold for Rs.25,500/- as an exemplar. The HighCourt gave escalation at 10% for the time gap of 56 months and calculatedthe value at Rs.6,64,887/- per acre and made the deduction at the rate of67.5% for development charges and calculated the compensation to beawarded at Rs.2,19,413/- per acre.

4. Being aggrieved, the land owners filed Special Leave Petition(C)No.27989 of 2013 before this Court which was withdrawn by orderdated 01.08.2014 with liberty to file review before the High Court. Inthe review petition, the appellants/claimants relied upon:- (i) sale deeddated 27.12.1988; and (ii) subsequent acquisition of nearby land videnotification dated 27.03.1989 in which the High Court by its judgmentdated 15.09.2006 in R.F.A. No.866 of 1996 awarded compensation ofRs.7,26,000/- per acre. The High Court dismissed the review, inter alia,holding that the sale deed dated 27.12.1988 is a post notification sale andalso the acquisition vide notification dated 27.03.1989 was subsequentone and the same is not relevant for determining the market value of thelands acquired vide notification dated 12.02.1988. Moreover, the HighCourt found no valid ground for review under Order XLVII C.P.C. Beingaggrieved, the appellants/land owners have filed these appeals.

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A5. Contention of the appellants/claimants are mainly three-fold:-(i) there was only ten months difference between the notification dated12.02.1988 and the sale deed dated 27.12.1988 while so, the High Courtwas not justified in not considering the said sale deed dated 27.12.1988as an exemplar on the ground that the same is a post notification; (ii)considering that the land acquired falls within municipal limits and hadBimmense potential for use for commercial and residential purpose,applying the maximum cut at the rate of 67.5% was not justified; and(iii) for acquisition of the land of the adjoining khasra by notificationdated 27.03.1989, compensation was awarded at the rate of Rs.7,26,000/- per acre by the High Court which is more than three times higher thanCthe compensation awarded in the present case.

6. So far as the first contention is concerned, the sale deed reliedupon by the appellants/claimants dated 27.12.1988 is post notification.Sub-section (1) of Section 23 of the Act provides that the compensationto be awarded shall be determined by the reference court, based uponDthe market value of the acquired land at the date of the publication ofthe notificationunder Section 4(1). In Kolkata MetropolitanDevelopment Authority v. Gobinda Chandra Makal and Anr.(2011)9 SCC 207, it was held that the relevant date for determining thecompensation is the date of publication of the notification under Section4(1) of the Act in the Gazette. In para (34), it was held as under:-E

“34. One of the principles in regard to determination of the marketvalue under Section 23(1) is that the rise in market value after thepublication of the notification under Section 4(1) of the Act shouldnot be taken into account for the purpose of determination ofmarket value. If the deeming definition of “publication of theFnotification” in the amended Section 4(1) is imported as themeaning of the said words in the first clause of Section 23(1), itwill lead to anomalous results. The owners of the lands which arethe subject-matter of the notification and neighbouring lands willcome to know about the proposed acquisition, on the date ofGpublication in the Gazette or in the newspapers. If the giving ofpublic notice of the substance of the notification is delayed by twoor three months, there may be several sale transactions in regardto nearby lands in that period, showing a spurt or hike in value inview of the development contemplated on account of theacquisition itself.”

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Applying the ratio of the above decision, we are of the view thatthe post notification instances cannot be taken into consideration fordetermining the compensation of the acquired land.

7. So far as the contention regarding deduction at the rate of67.5% for development charges is concerned, the exemplar relied uponby the High Court dated 26.05.1983 was for a small extent of land of 9marlas which was sold for Rs.25,500/-. The transaction relates to theperiod which is about 56 months prior to the notification under Section 4of the Act and the High Court adopted the rate of escalation at 10% andcalculated the value at Rs.6,64,887/-. Considering the fact that the acquiredland required for development and that the property covered under theexemplar was for a small extent of 9 marlas of land, the High Courtapplied maximum deduction at 67.5% and calculated the compensationto be paid at Rs.2,19,413/- per acre.

8. In Haryana State Agricultural Market Board and Anr. v.Krishan Kumar and Ors. (2011) 15 SCC 297, this Court has held that“if the value of small developed plots should be the basis,appropriate deductions will have to be made therefrom towards thearea to be used for roads, drains, and common facilities like park,open space, etc. Thereafter, further deduction will have to be madetowards the cost of development, that is, the cost of leveling theland, cost of laying roads and drains, and the cost of drawingelectrical, water and sewer lines.”

9. Observing that the development charges for development ofparticular plot of land could range from 20% to 75%, in Lal Chand v.Union of Indiaand Another (2009) 15 SCC 769, in paras (13), (14)and (20), this Court held as under:

“13. The percentage of ‘deduction for development’ to be madeto arrive at the market value of large tracts of undevelopedagricultural land (with potential for development), with referenceto the sale price of small developed plots, varies between 20%to 75% of the price of such developed plots, the percentagedepending upon the nature of development of the layout in whichthe exemplar plots are situated.

14. The ‘deduction for development’ consists of two components.

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The first is with reference to the area required to be utilised fordevelopmental works and the second is the cost of the developmentworks.

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20. Therefore the deduction for the ‘development factor’ to beBmade with reference to the price of a small plot in a developedlayout, to arrive at the cost of undeveloped land, will be for morethan the deduction with reference to the price of a small plot in anunauthorised private layout or an industrial layout. It is also wellknown that the development cost incurred by statutory agenciesCis much higher than the cost incurred by private developers, havingregard to higher overheads and expenditure.”

The same principle was reiterated in Andhra Pradesh HousingBoard v. K. Manohar Reddy and Ors. (2010) 12 SCC 707.

10. In a catena of judgments, this Court has taken the view toDapply one-third deduction towards the development charges. Afterreferring to various case laws on the question of deduction fordevelopment, in Major General Kapil Mehra and Ors. v. Union ofIndia and Anr. (2015) 2 SCC 262, this Court held as under:

“35. Reiterating the rule of one-third deduction towardsEdevelopment, in Sabhia Mohammed Yusuf Abdul Hamid Mullav. Land Acquisition Officer (2012) 7 SCC 595, this Court inpara 19 held as under: (SCC pp. 606-07)

“19. In fixing the market value of the acquired land, which isundeveloped or underdeveloped, the courts have generallyFapproved deduction of 1/3rd of the market value towardsdevelopment cost except when no development is required tobe made for implementation of the public purpose for whichland is acquired. In Kasturi v. State of Haryana (2003) 1SCC 354 the Court held: (SCC pp. 359-60, para 7)

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‘7. … It is well settled that in respect of agricultural land orundeveloped land which has potential value for housing orcommercial purposes, normally 1/3rd amount ofcompensation has to be deducted out of the amount ofcompensation payable on the acquired land subject to certainvariations depending on its nature, location, extent of H

expenditure involved for development and the area requiredfor road and other civic amenities to develop the land so asto make the plots for residential or commercial purposes. Aland may be plain or uneven, the soil of the land may be softor hard bearing on the foundation for the purpose of makingconstruction; maybe the land is situated in the midst of adeveloped area all around but that land may have a hillock ormay be low-lying or may be having deep ditches. So theamount of expenses that may be incurredin developing thearea also varies.....................There may be various factualfactors which may have to be taken into considerationwhile applying the cut in payment of compensationtowards developmental charges, maybe in some cases itis more than 1/3rd and in some cases less than 1/3rd. Itmust be remembered that there is difference between adeveloped area and an area having potential value, whichis yet to be developed. The fact that an area is developedor adjacent to a developed area will not ipso facto makeevery land situated in the area also developed to bevalued as a building site or plot, particularly when vasttracts are acquired, as in this case, for developmentpurpose.’

The rule of 1/3rd deduction was reiterated in Tejumal Bhojwaniv. State of U.P. (2003) 10 SCC 525, V. Hanumantha Reddy v.Land Acquisition Officer (2003) 12 SCC 642, H.P. HousingBoard v. Bharat S. Negi (2004) 2 SCC 184 and Kiran Tandonv. Allahabad Development Authority (2004) 10 SCC745.”(emphasis in original)

36. While determining the market value of the acquired land,normally one-third deduction i.e. 33 1/3% towards developmentcharges is allowed. One-third deduction towards development wasallowed in Tehsildar (LA) v. A. Mangala Gowri (1991) 4 SCC218, Gulzara Singh v. State of Punjab (1993) 4 SCC 245,Santosh Kumari v. State of Haryana (1996) 10 SCC 631,Revenue Divl. Officer and LAO v. Sk. Azam Saheb (2009) 4SCC 395, A.P. Housing Board v. K. Manohar Reddy (2010) 12SCC 707, Ashrafi v. State of Haryana (2013) 5 SCC 527 andKashmir Singh v. State of Haryana (2014) 2 SCC 165.

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37. Depending on the nature and location of the acquired land,extent of land required to be set apart and expenses involved fordevelopment, 30% to 50% deduction towards development wasallowed in Haryana State Agricultural Market Board v. KrishanKumar (2011) 15 SCC 297, Director, Land Acquisition v. MallaAtchinaidu (2006) 12 SCC 87, Mummidi Apparao v. NagarjunaFertilizers & Chemicals Ltd. (2009) 4 SCC 402 and Lal Chandv. Union of India (2009) 15 SCC 769.

38. In few other cases, deduction of more than 50% was upheld.In the facts and circumstances of the case in Basavva v. LandAcquisition Officer (1996) 9 SCC 640, this Court upheld thededuction of 65%. In Kanta Devi v. State of Haryana (2008) 15SCC 201, deduction of 60% towards development charges washeld to be legal. This Court in Subh Ram v. State of Haryana(2010) 1 SCC 444, held that deduction of 67% amount was notimproper. Similarly, in Chandrashekar v. Land AcquisitionOfficer (2012) 1 SCC 390, deduction of 70% was upheld.”

11. In Subh Ram and Others v. State of Haryana and Anr.(2010) 1 SCC 444, the deduction of 67% was held to be not improper.In the case in hand, the High Court applied deduction at 67.5% which inour considered view is on the higher side. In the facts and circumstancesof the present case and considering that the exemplar dated 26.05.1983was for a small extent of land and that the acquired land has to bedeveloped for construction of warehouse, we deem it appropriate toapply one-third deduction and deducting one-third that is Rs.2,21,629/-from Rs.6,64,887/-, the compensation to be awarded is arrived atRs.4,43,258/- per acre.

12. The impugned judgment is modified and the appellants/claimants are entitled to get enhanced compensation of Rs.4,43,258/-payable with all statutory benefits. The appeals are partly allowed. It ismade clear that the appellants/claimants shall not be entitled to claiminterest for the period of delay in preferring the appeals from the review.

Nidhi Jain

Appeals partly allowed.