MOHAMMAD YUSUF AND OTHERS ETC. ETC. versus STATE OF HARYANA AND OTHERS on 16 April 2018

[2018] 3 S.C.R. 1075

MOHAMMAD YUSUF AND OTHERS ETC. ETC.

v.

STATE OF HARYANA AND OTHERS

(Civil Appeal Nos. 3807-3825 of 2018)

APRIL 16, 2018

[R. K. AGRAWAL AND S. ABDUL NAZEER, JJ.]

Land Acquisition Act, 1894 – ss.4, 9, 18 and 23 – Land inFirozpur village acquired by respondent-State for construction ofMini Secretariat – Land Acquisition Collector (LAC) assessed themarket value of the acquired land as Rs. 16 lakhs per acre alongwith 30% solatium and 12% additional amount to the landholders– Land Acquisition Collector-cum-SDO(C) on reference enhancedthe compensation to Rs. 72,00,000/- per acre and applied thedevelopment cut at the rate of 55% and a further cut of 5% onaccount of waiting period, totaling to 60% and determinedcompensation at Rs. 28,80,000/- per acre along with the statutorybenefits – Cross appeals filed before High Court by landholders asalso the State – High Court partly allowed the appeals of thelandholders by enhancing the compensation to Rs. 64,80,000/- peracre, however, reduced the cut on development charges to 10% –Cross appeals filed by State were dismissed – Held: In the presentcase, after having regard to the circumstances of the case and perusalof the sale deeds of adjourning area, the compensation granted atthe rate of Rs.72 lacs per acre is as per the law and no injusticehad occurred to the appellants-landholders – Further, a cut at therate of 10% is very reasonable towards development of acquiredland as some further development would obviously be required tomake it fit for the purpose for which it was acquired – Impugneddecision of the High Court not interfered with – Constitution ofIndia – Art.300A.

Land Acquisition Act, 1894 – Compensation – Meaning of –Discussed.

Land Acquisition Act, 1894 – s.23A – Compensation under –Basis for calculation of – Discussed.

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[2018] 3 S.C.R.

ALand Acquisition Act, 1894 – Deduction on account ofdevelopment charges – Factors to be considered for – Discussed.Dismissing the appeals, the Court HELD: 1.1 The intention behind the enactment of the LandAcquisition Act, 1894 was to acquire land for welfare purposesBand to compensate the owners adequately. It is well known factthat the Right to Property is a Constitutional Right (earlier it wasa Fundamental Right until 1978) as provided under Article 300Aof the Constitution of India. The term “compensation” was interpreted by Supreme Court in a number of cases that it is toCbe “a just equivalent of what the owner has been deprived of.”Hence, the acquisition must pass the test of compensation beingreasonable, just and fair. In a catena of cases, Supreme Court hasheld that compensation should be adequate and there must beno injustice with the land owners since they stand deprived fromtheir very vital right i.e. Right to Property. At the same time, it isDalso to be kept in mind that no hypothetical view shall be takenas it may be harmful to the public exchequer in case of acquisitionfor public purposes. Hence, courts must maintain balance betweenboth the parties.[Paras 10, 11][1081-C-D, E-F]

1.2 On a plain reading of Section 23 of the LA Act, it isEevident that the compensation has to be calculated according tothe value of the land to the owner and the question to beconsidered is whether the person from whom the land was takenwas to lose by having it taken from him. The probable use towhich the land might be put was necessarily an element to beFtaken into consideration for calculating the compensation ofacquired land. The land owners get compensation on the basis ofthe value of the land, in its actual condition at the time of thepublication of the Notification under Section 4 of the LA Act. [Para13][1082-H; 1083-A-B]

1.3 It is a well established rule that in the cases ofGcalculation of compensation, there cannot be a straight jacketformula, hence, each case has to be dealt in the light ofcircumstances of each case. Common sense is the best and mostreliable guide. It is a well settled law that when there are severalexemplars with reference to similar land, usually the highest ofH

the exemplars which is a bonafide transaction, will be considered.[Paras 14, 15][1083-D-E]

1.4 The appellants produced various sale deeds. The vitalsale deed dated 05.10.2005, wherein land admeasuring 1 kanal 6Marlas, situated in village Ferozpur Namak, Tehsil Nuh, was soldfor a sale consideration of Rs. 11,70,000/- in the same village. Ifthe value of per acre in terms of the above sale deed is calculatedthen it stands at Rs 72 Lakhs per acre. The date of this sale deedis 05.10.2005 which is proximate to the date of Notification i.e.,18.10.2005 under Section 4 of the LA Act. In the present case,after having regard to the circumstances of the case and perusalof the sale deeds of adjourning area, the compensation grantedat the rate of Rs. 72 lacs per acre is as per the law and no injusticehas occurred to the appellants herein. [Para 16][1084-D-F]

1.5 It is a matter of record that the Reference Courtdetermined 60% (55% as development charges and 5% forwaiting period) in totality towards development charges whichlater on in appeal reduced by the High Court to 10%. Deductionsmay be made for a variety of reasons, which may differ in differentcases. However, in the backdrop of judicial precedents on thisissue, it is well settled position that all deductions should notcumulatively be exceeded the upper benchmark of 75% and atthe same time, it should be kept in mind that no hypotheticalview shall be taken in order to calculate the percentage of thedevelopment charges. The appellants contended that the acquiredland has all basic facilities such as water, electricity, sewer,telephone etc which respondent-State has not disputed. Theseare, however, not enough to meet the purpose of acquisition. Tomake such land suitable for the acquisition purpose i.e. for theconstruction of Mini Secretariat at Nuh, some furtherdevelopment is sine qua non. For calculating the percentage ofdevelopment charges, various factors need to be taken intoconsideration such as location of land, facilities available in nearbyarea, size of the land, purpose of acquisition etc. The presentacquired land of Firozpur Namak village which is located at somedistance from the Nuh Town needs to be developed in propermanner like construction of better and wide roads etc., to makeit suitable for the acquisition purposes. The fact that facilities ABC

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Aalready available such as sewer, electricity etc., seems to be takeninto consideration properly while reducing the developmentcharges by the High Court from 60% to 10%. In the case athand, in view of the facts and circumstance noticed hereinabove,a cut at the rate of 10% is very reasonable towards developmentof acquired land as some further development would obviouslyBbe required to make it fit for the purpose for which it was acquired.[Paras 17, 18 and 19][1084-H; 1085-A-F]

Major General Kapil Mehra and Ors. v. Union of India& Anr. (2015) 2 SCC 26 – referred to.

Case Law Reference

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(2015) 2 SCC 26referred toPara 11

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3807-3825 of 2018.

DFrom the Judgment and Order dated 03.06.2016 in Regular FirstAppeal Nos. 6617, 6611, 6612, 6613, 6614, 6615, 6616, 7141, 7142 of2012, R.F.A. Nos. 476, 2155, 5590 of 2013, X (Cross) Objection No. 50-CI/2013 in R.F.A. No. 3460, X (Cross) Objection No. 51-CI/2013 inR.F.A. No. 3458, X (Cross) Objection No. 52-CI/2013 in R.F.A. No.3453,X (Cross) Objection No. 53-CI/2013 in R.F.A. No.3456, X (Cross)EObjection No. 58-CI/2013 in R.F.A. No.3455, X (Cross) Objection No.59-CI/2013 in R.F.A. No.3461 and Order dated 27.07.2016 in R. F. A.No. 7143 of 2012 (O&M) of the High Court of Punjab and Haryana atChandigarh.

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C. A. Nos. 3826 and 3827-3859 of 2018.

Abhimash Jain, AAG, R. S. Suri, P. S. Patwalia, Sr. Advs., Ms.Nabila Hasan, Mukul Kaushik, Ms. Pallavi Tayal Chadha, Avinash Kumar,Pawan Sharma, Balraj Dewan, Samar Vijay Singh, Ms. Harshika, Advs.for the appearing parties.

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The Judgment of the Court was delivered by

R. K.AGRAWAL, J. 1. Leave granted.

2. The above appeals have been filed against the impugnedcommon judgment and order dated 03.06.2016 passed by learned single H

Judge of the High Court of Punjab and Haryana at Chandigarh in R.F.A.No. 6617 of 2012 (O&M) and other connected matters whereby theHigh Court partly allowed the appeal filed by the appellants herein whiledismissing the cross appeals of the respondent-State.

3. Brief Facts:-

(a) The Government of Haryana, Revenue Department, videNotification under Section 4 of the Land Acquisition Act, 1894(hereinafter referred to as ‘the LA Act’) dated 18.10.2005 has notifiedthe land of Village Ferozpur Namak, Tehsil Nuh, District Mewat for theconstruction of Mini Secretariat at District Mewat, admeasuring 372karnals 2 marlas (i.e. 46 acres 4 karnals and 2 marlas). Consequently,the Government of Haryana, vide Notification dated 25.05.2006, issueddeclaration that the land is required for a public purpose.

(b) Notice under Section 9 of the LA Act was issued to all thelandholders and interested persons. The Land Acquisition Collector(LAC), Nuh, Mewat, vide Award No. 1 dated 05.11.2007 assessed themarket value of the acquired land at the uniform rate of Rs 16 lakhs peracre along with 30% solatium and 12% additional amount to thelandholders.

(c) Being aggrieved, the appellants herein filed a Reference underSection 18 of the LA Act which was registered as LA Case No. 394/01.12.10/19.09.11 before the Land Acquisition Collector-cum-SDO(C)Nuh, Mewat. On 28.08.2012, the Reference Court, enhanced thecompensation to Rs. 72,00,000 lakhs per acre and applied the developmentcut at the rate of 55% and a further cut of 5% on account of waitingperiod, totaling to 60%. Thus, the compensation was determined at Rs.28,80,000/- per acre along with the statutory benefits.

(d) Being not satisfied, the appellants herein preferred a RegularFirst Appeal (RFA) being No. 6617 of 2012 alongwith other set of appealsbefore the High Court. Respondent-State also filed cross appeals beforethe High Court. Learned single Judge of the High Court, vide commonjudgment and order dated 03.06.2016, partly allowed the appeals of thelandholders by enhancing the compensation to Rs. 64,80,000 per acrealong with other benefits while dismissing the cross appeals filed by therespondent-State.

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(e) The landholders, being aggrieved by the judgment and orderdated 03.06.2016, has preferred these appeals by way of special leavebefore this Court.

4. Heard Mr. R.S. Suri, learned senior counsel for the appellantsand Mr. P.S. Patwalia, learned senior counsel for the respondent-StateBand perused the records.

Point(s) for consideration:-

5. The short point of consideration arises before this Court is as towhether in the light of present facts and circumstances of the case, anyinterference is sought for by this Court?

CRival contentions:-

6. At the outset, learned senior counsel for the appellants arguedthat the High court failed to consider that the land acquired had greatfuture potential for being developed as residential as well as commercialarea, hence, the compensation ought to have been awarded accordingly.Learned senior counsel further contended that the assessment of theDcompensation has not been done considering the following factors likepotential value, location of land, future prospects, the development ofland in question and the likely injury to be sustained by the appellantsherein for loss of their future earnings etc. It was also contended thatthe High Court has not considered the facts that the acquired land hasEimmense potential which is situated at a distance of half kilometers fromthe Nuh City, and also situated within 30 kms from the cyber city andcould be directly approachable from Indira Gandhi International Airport,New Delhi.

7. Further, the Reference Court allowed a cut of 55% on accountFof development for raising infrastructural activities and other amenitiesand a cut of 5% on account of waiting period which was reduced by theHigh Court to 10% which is also not in accordance with law vis-à-visthe fact that the acquired land has all the infrastructural facilities on thedate of Notification.

8. Per contra, learned senior counsel for the respondent-StateGsubmitted that the High Court has rightly determined the compensationwhile condoning the potentiality of the area and also after having regardto the sale deeds of adjoining areas and a cut of 10% on the assessedvalue of the acquired land has been applied in accordance with law vis-à-vis the fact that the acquired land has all the infrastructural facilitiesHon the date of Notification.

9. Learned senior counsel further submitted that the compensationawarded is adequate in terms of principles incorporated under Section23 of the LA Act as also interpreted by this Court in a catena of cases.Learned senior counsel finally contended that the amount ofcompensation has been awarded considering the factors like potentialvalue location of land, future prospects, the development of land inquestion and the likely injury to be sustained by the appellants, if any, andno interference is sought for by this Court in the matter.

Discussion:-

10. The intention behind the enactment of the Land AcquisitionAct, 1894 was to acquire land for welfare purposes and to compensatethe owners adequately. It is well known fact that the Right to Property isa Constitutional Right (earlier it was a Fundamental Right until 1978) asprovided under Article 300 A of the Constitution of India. The term“compensation” was interpreted by this Court in a number of cases thatit is to be “a just equivalent of what the owner has been deprived of.”Hence, the acquisition must pass the test of compensation beingreasonable, just and fair. The term justice as enshrined in the preambleincludes justice in economic terms and the term economic justice in itselfmandatorily requires compensation to be adequate.

11. In a catena of cases, this Court has held that compensationshould be adequate and there must be no injustice with the land ownerssince they stand deprived from their very vital right i.e., Right to Property.At the same time, it is also to be kept in mind that no hypothetical viewshall be taken as it may be harmful to the public exchequer in case ofacquisition for public purposes. Hence, courts must maintain balancebetween both the parties. In the cases of land acquisitions, generallycourts confronted with the short but important question that what oughtto be the ideal market value for the acquired land. This Court, in MajorGeneral Kapil Mehra and Ors. vs. Union of India & Anr. (2015) 2SCC 262 while dealing with the matter held as under:- “10. Market Value: First question that emerges is what would bethe reasonable market value which the acquired lands are capable offetching. While fixing the market value of the acquired land, the LandAcquisition Officer is required to keep in mind the following factors:- (i)existing geographical situation of the land; (ii) existing use of the land;(iii) already available advantages, like proximity to National or State AB

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AHighway or road and/or developed area and (iv) market value of otherland situated in the same locality/village/area or adjacent or very near tothe acquired land.”

12. For the purpose of deciding compensation of land in case ofacquisition, Section 23 of the LA Act is the fundamental section whichBsays that some vital factors to be considered while determiningcompensation. At this juncture, it is pertinent to re-produce the said sectionherein below:

23. Matters to be considered in determining compensation.-(1) In determining the amount of compensation to be awarded forCland acquired under this Act, this court shall take into consideration-First, the market value of the land at the date of the publication ofthe notification under section 4,sub-section(1); Secondly, the damage sustained by the person interested, by reasonof the taking of any standing crops or trees which may be on theDland at the time of the Collector’s taking possession thereof; Thirdly, the damage ( if any) sustained by the person interested,at the time of the Collector’s taking possession of the land, byreason of severing such land from his other land; Fourthly, the damage (if any) sustained by the person interested,Eat the time of Collector’s taking possession of the land ,by reasonof the acquisition injuriously affecting his other property, movableor immovable, in any other manner, or his earnings; Fifthly , if , in consequence of the acquisition of the land by theCollector, the person interested is compelled to change hisFresidence or place of business, the reasonable expenses (if any)incidental to such change; and Sixthly, the damage (if any) Bonafide resulting from diminution ofthe profits of the land between the time of the publication of thedeclaration under section 6 and the time of the Collector’s takingGpossession of the land.

13. On a plain reading of Section 23 of the LA Act, it is evidentthat the compensation has to be calculated according to the value of theland to the owner and the question to be considered is whether the personfrom whom the land was taken was to lose by having it taken from him.H

The probable use to which the land might be put was necessarily anelement to be taken into consideration for calculating the compensationof acquired land. The land owners get compensation on the basis of thevalue of the land, in its actual condition at the time of the publication ofthe Notification under Section 4 of the LA Act.

14. In the instant case, the appellants contented and invited ourattention to the fact that the valuation of the acquired land should beassessed on urban land criteria since land had all basic amenities likewater, sewer, electricity and telephone lines were already present on thedate of Notification under Section 4 of the LA Act. However for beingan urban area, there must be some other facilities like commercialactivities, population growth, education activities, paying capacity ofpeople, healthy public transport, infrastructure etc. It is also a wellestablished rule that in the cases of calculation of compensation, therecannot be a straight jacket formula, hence, each case has to be dealt inthe light of circumstances of each case. Common sense is the best andmost reliable guide.

15. It is a well settled law that when there are several exemplarswith reference to similar land, usually the highest of the exemplars whichis a bonafide transaction, will be considered. In the present case, theReference Court, in Para 20 held as under:- “…..Here in this case, applying the said authority to the facts andcircumstances of this case, I am of the considered opinion thatexemplar sale deed Exhibit P1 hold the fields in preference to theother sale deeds. Reason for exclusion of sale deeds Exhibit P2to P3 is that sale deed Exhibit P1 is of the highest land 1 kanal 6marlas and is of the highest amount, which is very close to thedate of notification because vide sale deed Exhibit P1 dated5.10.2005, land measuring 1 kanal 6 Marlas, whose nature was“Narmot”, situated in village Ferozpur Namak, Tehsil Nuh, wassold for a sale consideration of Rs. 11,70,000/- by one Mahmoodson of Inshe Khan in favour of Smt. Hanisha Khatoon wife ofMohammad Iqbal of the same village. The value per acre of theland, as per the said sale deed is calculated as Rs. 72,00,000/- peracre. The said sale deed was executed on 5.10.2005 whereasnotification under Section 4 of the Act for the acquired land waspublished on 18.10.2005 and thus, this sale deed Exhibit P1 isproximate to the point of time from the date of issuance of A

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1084SUPREME COURT REPORTS

Anotification under Section 4 of the Act. No iota of evidence couldbe led by the respondents to rebut the veracity of this sale deed.There is nothing on record to show that the sale deed is not Bonafideand a genuine transaction. In fact despite availing number ofopportunities, the respondents failed to lead any evidence to rebutthe evidence led by the petitioners.”B

16. On a perusal of the Map of the concerned area which isproduced on record by the appellants, we find that the acquired land inthe present case falls within the control area of Nuh and newly constructedNalhar Medical College is at a distance of 3-4 kms from the acquiredland. We also find that the said acquired land is situated on Palwal RoadCfrom one side and on Delhi Road on the other. However, it is a matter ofrecord that such acquired land is far away from D.C. office and otheroffices. Also, Bus Stand as well as Nuh Town is situated far away fromthe acquired land. Hence, acquired land of Firozpur village in such termscannot be said to be situated very near to the urban area of Nuh Town.DThe appellants produced various sale deeds for the perusal of this Court.The vital sale deed dated 05.10.2005, wherein land admeasuring 1 kanal6 Marlas, situated in village Ferozpur Namak, Tehsil Nuh, was sold for asale consideration of Rs. 11,70,000/- by one Mahmood s/o Inshe Khanin favour of Smt. Hanisha Khatoon w/o Mohammad Iqbal of the samevillage. If we calculate the value of per acre in terms of the above saleEdeed then it stands at Rs 72 Lakhs per acre. It is pertinent to mentionhere that the date of this sale deed is 05.10.2005 which is proximate tothe date of Notification i.e., 18.10.2005 under Section 4 of the LA Act.In the present case, after having regard to the circumstances of thecase and perusal of the sale deeds of adjourning area, we are of theFconsidered view that the compensation granted at the rate of Rs. 72 lacsper acre is as per the law and no injustice has been occurred to theappellants herein.

17. Now coming to the point of development charges which appliedby the High court @10% on the assessed value of acquired land.GAppellants herein contended that the rate of deduction as applied by theHigh Court was not required as the acquired land is situated in the areaalready developed and have all the potential for development. It is amatter of record that the Reference Court determined 60% (55% asdevelopment charges and 5% for waiting period) in totality towardsdevelopment charges which later on in appeal reduced by the High CourtH

to 10%. Deductions may be made for a variety of reasons, which maydiffer in different cases. However, in the backdrop of judicial precedentson this issue, it is well settled position that all deductions should notcumulatively be exceeded the upper benchmark of 75% and at the sametime, it should be kept in mind that no hypothetical view shall be taken inorder to calculate the percentage of the development charges.

18. In the present case, the appellants contended that the acquiredland has all basic facilities such as water, electricity, sewer, telephoneetc which respondent-State has not disputed. These are, however, notenough to meet the purpose of acquisition. To make such land suitablefor the acquisition purpose i.e. for the construction of Mini Secretariat atNuh, some further development is sine qua non. For calculating thepercentage of development charges, various factors need to be takeninto consideration such as location of land, facilities available in nearbyarea, size of the land, purpose of acquisition etc. The present acquiredland of Firozpur Namak village which is located at some distance fromthe Nuh Town needs to be developed in proper manner like constructionof better and wide roads etc., to make it suitable for the acquisitionpurposes. The fact that facilities already available such as sewer,electricity etc., seems to be taken into consideration properly whilereducing the development charges by the High Court from 60% to 10%.

19. In the case at hand, after giving our thoughtful considerationto the facts and circumstance noticed hereinabove, we are of theconsidered view that a cut at the rate of 10 % is very reasonable towardsdevelopment of acquired land as some further development wouldobviously be required to make it fit for the purpose for which it wasacquired.

20. In view of above discussion, we are not inclined to interferewith the impugned decision of the High Court. Accordingly, the appealsare hereby dismissed leaving parties to bear their own cost.

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