# Asha Ram & Anr v. U.P.A.E.P. & Ors

- **Citation:** (2016) 3 ILRA 269
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2015-12-16
- **Bench:** Sudhir Agarwal, Rakesh Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/asha-ram-anr-v-u-p-a-e-p-ors-43428
- **Pages:** 22

## Text

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3 All. Asha Ram & Anr. Vs U.P.A.E.P. & Ors.
269
 arising out of Crime No. 392 of 2013 under Sections 363, 366, 376 I.P.C. and POCSO
Act, Police Station Gaur, District Basti whereby the accused appellant Dinesh Kumar
Maurya has been convicted and sentenced, is hereby set aside. The appellant is acquitted for
the charges framed against him.

33. The accused-appellant is in jail. He shall be released forthwith in this case. The
provisions of Section 437A Cr.P.C. shall be complied with.

34. Let a copy of this judgment be transmitted to the trial court.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 16.12.2015

BEFORE

THE HON'BLE SUDHIR AGARWAL, J.
THE HON'BLE RAKESH SRIVASTAVA, J.

First Appeal No. - 552 of 2001

Asha Ram & Anr. ...Appellants
Versus
U.P.A.E.P. & Ors. ...Respondents

Counsel for Appellants:-
Surendra Tiwari

Counsel for Respondents:-
Anand Prakash Srivastava

HELD:

1. The central issue before the Court concerned the determination of fair market value of the acquired
land, particularly whether the Reference Court erred in ignoring relevant exemplars and in making
excessive deductions.
2. The appeal arose from compulsory acquisition for a planned industrial and residential scheme; thus,
the benchmark for valuation must reflect both potential use and the surrounding development of the
area.
3. The Court held that the Reference Court improperly relied on post-notification sale deeds and failed
to give proper weight to pre-notification exemplars that were proximate in time, area, and location.
4. The principle reaffirmed is that the **best evidence for determining market value** is a bona fide
sale of comparable land within reasonable proximity to the notification date; forced, speculative, or
post-notification transactions must be excluded.
5. Circle rates, guideline values, or arbitrary government rates cannot form the basis of compensation,
since they do not reflect real market conditions and are meant only for fiscal purposes.
6. The Court reiterated that the **belting system** may be applied where the land exhibits nonuniform potentiality; however, in the present case, uniformity in location and advantage made belting
unnecessary.
270 INDIAN LAW REPORTS ALLAHABAD SERIES
7. The deduction applied by the Reference Court for development was held excessive; permissible
deductions should ordinarily range from 20-33%, depending on the nature of land and the level of
development required.
8. The Court emphasized that while deduction for development is necessary in acquisitions for planned
schemes, it must be based on rational assessment-not arbitrary percentages.
9. The land's proximity to existing industrial, residential, and road infrastructure established that its
potentiality was significantly higher than assessed by the Reference Court.
10. Land Acquisition Officers' awards cannot be treated as exemplars, as they are not transactions
between willing buyer and willing seller.
11. The Court reaffirmed that even small-sized sale deeds may be relied upon with appropriate
adjustments (loading and unloading) if they represent genuine market value.
12. However, very small or exceptional-value transactions must be disregarded if they distort the
market picture.
13. The claimants were able to prove that the Reference Court ignored crucial exemplars showing
higher valuation and failed to appreciate the developmental potential of the land.
14. The Court determined revised valuation after considering:

(a) proximity to highways;
(b) existing built-up surroundings;
(c) contemporaneous sale deeds;
(d) development potential;
(e) reasonable deductions.

15. Following established Supreme Court precedents, the Court adopted an average method using
reliable exemplars and applied moderate deductions to reach a just compensation.
16. The Court held that a uniform rate was justified and that the landowners were entitled to
enhanced compensation.
17. Statutory benefits under Sections 23(1A), 23(2), and 28 of the Land Acquisition Act were
accordingly allowed.
18. The appeal was allowed in part, modifying the Reference Court's award and enhancing market
value as determined.

Case Law Discussed:

1. Chimanlal Hargovinddas v. Special Land Acquisition Officer, (1988) 3 SCC 751.
2. Land Acquisition Officer v. Karigowda, (2010) 5 SCC 708.
3. Lal Chand v. Union of India, (2009) 15 SCC 769.
4. Viluben Jhalejar Contractor v. State of Gujarat, (2005) 4 SCC 789.
5. Tribeni Devi v. Collector of Ranchi, (1972) 1 SCC 480.

(Delivered by Hon'ble Sudhir Agarwal, J.
&
Hon'ble Rakesh Srivastava, J.)

1. Heard Shri Pramod Jain, learned Advocate assisted by Shri Surendra Tiwari, learned
counsel for appellants and Shri Anand Prakash Srivastava, learned counsel for respondent
no.1.

2. This is claimant's appeal under Section 54 of Land Acquisition Act, 1894
(hereinafter referred to as 'Act, 1894') arising from award/judgment dated 23.5.2000 passed
by Shri O.P. Goel, VIIIth Additional District Judge, Ghaziabad adjudicating four Land
3 All. Asha Ram & Anr. Vs U.P.A.E.P. & Ors.
271
Acquisition References (hereinafter referred to as 'LAR') including LAR No.205 of 1995
(Asha Ram and others) determining market value of acquired land under the provisions of
Act, 1894 at the rate of Rs.120/- per square yard for the purposes of payment of
compensation to land owners. Besides it has also directed that claimant shall be entitled for
30% solatium, interest at the rate of 12% per anum for the period 26.6.1987 to 27.2.1989 i.e.
from the date of acquisition notification under Section 4 (1) of Act, 1894 till the date of
award and thereafter 9% for one year and 15% for subsequent period till actual payment is
made.

3. Claimant - appellants are aggrieved by the aforesaid determination of market value
by Reference Court, and according to them, compensation ought to have been paid at the
rate of Rs.200/- per square yard and court below has awarded a much lesser rate, which is
highly inadequate, unjust and unreasonable.

4. It appears, that the appeal was presented before Registrar General on 24.04.2003. He
admitted appeal, though could have been heard and admitted only by Court after hearing
under Order 41 Rule 11 C.P.C. read with Chapter XI Rule 9 of High Court Rules, 1952
(hereinafter referred to as 'Rules, 1952'). The parties have also filed paper book. We
therefore, proceed to hear appeal under Order 41 Rule 11 read with Chapter XI Rule 9 of
Rules, 1952 to decide it finally.

5. Only point for determination for deciding this appeal is "whether claimantsappellants are entitled for higher determination of market value than Rs. 120/- per square
yard or the rate determined by court below is just, valid and needs no interference."

6. Uttar Pradesh Avas Evam Vikas Parishad, Lucknow (hereinafter referred to as
'UPAEVP') is a body constituted under U.P. Avas Evam Vikas Parishad Adhiniyam, 1965
(hereinafter referred to as 'U.P. Act, 1965'). It proposed to acquire certain land in villages
Arthla, Jhandapur, Prahladgarhi, Mohiuddinpur Kanavani, Shahibabad and Makanpur for
developing residential scheme. At the instance of UPAEVP, State of U.P. initiated
acquisition proceedings under Act, 1894 read with U.P. Act, 1965. A notification under
Section 4 (1) of Act, 1894 proposing to acquire 1157.895 acres of land in the aforesaid
villages was published on 26.06.1982. Notification under Section 6 (1) of Act, 1894 was
published on 28.02.1987. Special Land Acquisition Officer (hereinafter referred to as
'SLAO') after considering objections filed by Tenure-holders under Section 9 of Act, 1894
made Award No. 3 of 1987 dated 27.02.1989. It determined marked value at Rs. 50/- per
square yard in respect to all the villages though observed that circle rates were Rs. 50/- per
square yard in villages Prahladgarhi and Makanpur, Rs. 100/- per square yard in village
Arthla, Rs. 150/- per square yard in villages Jhandapur and Shahibabad; and Rs. 20/- per
square yard in village Mohiuddinpur Kanavani. The area of land proposed to be acquired in
the aforesaid six villages is as under:-

Village Area (in acres)

Arthla
358-93
272 INDIAN LAW REPORTS ALLAHABAD SERIES

Jhandapur

36-947

Prahladgarhi

437-379

Makanpur

75-6156

Mohiuddinpur Kanavani

141-97

Shahibabad

107-05

7. Aggrieved by aforesaid determination made by SLAO, land owners/claimants made
applications for reference under Section 18 of Act, 1894 to District Judge for determination
of market value under Section 23 of Act, 1894. Asha Ram claimant-appellant got four such
references made i.e. LAR No.56 of 1995, 205 of 2005, 209 of 1995 and 236 of 1992. All
these references were taken together and have been adjudicated by court below vide
impugned award/judgment dated 23.5.2000 determining market value of acquired land of
claimants-appellants at Rs.120/- per square yard. Appellants Asha Ram and another assailed
award/judgment dated 23.5.2000 LAR No.56 of 1995 in First Appeal No.827 of 2000,
which has been dismissed by this Court vide judgment dated 28.10.2015.

8. Disputed land, in this appeal, is in village Arthala. Further details of claimantappellants' acquired land in dispute is as under: -

Khata Number

Khasra Number

Total Area in Bigha

35

547 M
1-0-0 (3025.00 square yard)

580

2-9-0 (7411.00 square yard)

581

2-0-0 (6050.00 square yard)
36

547 M

0-12-0 (1815.00 square yard)

477

535/2

1-13-0 (4991.25 square yard)

7-14-00 (23,292.50 square yard)

9. Counsel for appellants, at the outset, admitted that against this very award dated
23.5.2000 arising from LAR No.56 of 1995 First Appeal No.827 of 2000 (Asha Ram and
another v. U.P. Awas Evam Vikash Parishad and another) has been decided by this Court
vide judgment dated 28.10.2015 and issues raised in this appeal are squarely by the
3 All. Asha Ram & Anr. Vs U.P.A.E.P. & Ors.
273
aforesaid judgment. However, Shri Pramod Jain, learned counsel for appellants submitted
that he may be allowed to address this Court on the question of deduction so as to urge that
land was in a developed area and, therefore, without applying any deduction, market value
ought to have been determined on the basis of exemplars relied by appellants. Though it is
not proper when appeal has arisen from same award where against judgment has already
been rendered by this Court in another appeal and parties are also same, but in interest of
justice, we have allowed Shri Jain to advance his submissions so that there may not be a
case of denial of justice to claimant-appellants, who have already lost their land pursuant to
acquisition proceedings and may have some grievance that there were some other aspects,
which may have given some advantage to them, went unnoticed.

10. Shri Jain submitted that disputed acquired land is in the middle of two National
Highways i.e. Delhi Nitipas and National Highway - 24. It is near Modern Residential
Colony of Ghaziabad Development Authority where rate of land was Rs.800/- per square
yard and above. Circle rate determined by Collector for the purposes of stamp duty in
village Arthala was Rs.1000/- per square yard. Court below has simply relied upon awards
in other matters instead of considering existing development in the area, its effect on
appreciation of value of land and also the fact that deduction of more than 25% could not
have been applied at all. In support of aforesaid submissions, reliance is placed on decisions
in Thakarsibhai Devjibhai and others v. Executive Engineer, Gujarat and another, JT
(2001) 3 SC 90 and Dhiraj Singh (DEAD) Through Legal Representatives and others v.
State of Haryana and others, 2014 (14) SCC 127. He further contended, when land
acquired consists of different plots having different advantages and disadvantages etc.,
Court must apply belting system. Any determination of uniform rate to all plots, irrespective
of above considerations, is illegal, unjust and impermissible in law. Reliance is placed on
Udho Dass v. State of Haryana, 2010 (12) SCC 51; Anjani Molu Dessai v. State of Goa
and another, (2010) 13 SCC 710; Nelson Fernandes and others v. Special Land
Acquisition Officer, South Goa and others, AIR 2007 SC 1414; Bhagwathula Samanna v.
Special Tehsildar and Land Acquisition Officer, (1991) 4 SCC 506 and certain other
judgments, which we shall discuss hereinafter.

11. Though we find that whatever has been argued is substantially covered by
discussion of various authorities in judgment dated 28.10.2015 in First Apeal No.827 of
2000, but for the ends of justice, we again proceed to discuss the authorities, which have
been cited by Shri Jain in support of his submissions to find out whether there is anything or
some thing, which may turn the scale of justice in a manner different than what has been
adjudicated.

12. We may first notice hereat authorities discussed by this Court in its judgment dated
28.10.2015 in First Appeal No.827 of 2000 as contained in paragraphs 14 to 19 and 21 to
31: -

"14. In Jawajee Nagnatham Vs. Revenue Divisional Officer, (1994) 4 SCC 595,
this question came up for consideration in the matter arisen from State of Andhra
Pradesh. Land owners appealed against order of Reference Court before Andhra
274 INDIAN LAW REPORTS ALLAHABAD SERIES
Pradesh High Court claiming higher compensation on the basis of basic valuation
register maintained by Revenue authorities under Stamp Act, 1899. The claim of land
owners failed in High Court which held that such register had no evidenciary value on
statutory basis. In appeal, Apex Court held that basic valuation register was maintained
for the purpose of collecting stamp duty under Section 47-A of Stamp Act, 1899 as
amended in State of Andhra Pradesh. It did not confer expressly any power to the
Government to determine market value of the land prevailing in a particular area, i.e.,
village, block, district or region. It also did not provide, as an statutory obligation, to
Revenue authorities to maintain basic valuation register for levy of stamp duty in
regard to instruments presented for registration. Therefore, there existed no statutory
provision or rule providing for maintaining such valuation register. In the
circumstances, such register prepared and maintained for the purpose of collecting
stamp duty had no statutory force or basis and cannot form a valid criteria to determine
market value of land acquired under Act, 1894. This decision was followed in Land
Acquisition Officer Vs. Jasti Rohini, 1995 (1) SCC 717.

15. Another matter from State of U.P. came up for consideration involving the
same issue in U.P. Jal Nigam Vs. M/s Kalra Properties (P) Ltd., (1996) 3 SCC 124.
The land owners' demand for compensation in regard to land acquired under Act, 1894
on the basis of market value assessed as per circle rate determined by Collector was
accepted by High Court but in appeal Judgment was reversed by Supreme Court
following its earlier decision in Jawajee Nagnatham (supra). The Court held that
market value under Section 23 of Act 1894 cannot be determined on circle rates
determined by Collector for the purpose of stamp duty under Stamp Act 1899. This
view was reiterated in Krishi Utpadan Mandi Samiti Vs. Bipin Kumar, (2004) 2 SCC
283.

16. The issue has again been considered recently in Lal Chand Vs. Union of India
and another, (2009) 15 SCC 769 wherein two Judgments of Apex Court taking a view
that circle rates may be considered as prima facie basis for the purpose of ascertaining
the market value were examined. These decisions are Ramesh Chand Bansal Vs.
District Magistrate/Collector, (1999) 5 SCC 62 and R Sai Ram Bharathi Vs. J
Jayalalitha, (2004) 2 SCC 9. The Court resolved controversy in Lal Chand Vs. Union
of India holding, if in a particular case, guideline market values are determined by an
Expert Committees constituted under State Stamp Law for following a detailed
procedure laid down under the relevant rules and are published in State Gazette, the
same may be considered as a relevant material to determine market value. The Court
said when guideline market values, i.e., minimum rates for registration of properties,
are so evaluated and determined by Expert Committees as per statutory procedure,
there is no reason why such rates should not be a relevant piece of evidence for
determination of market value. Having said so in para 44 the Court further stated as
under:-

"44. One of the recognised methods for determination of market value is with
reference to the opinion of experts. The estimation of market value by such statutorily
3 All. Asha Ram & Anr. Vs U.P.A.E.P. & Ors.
275
constituted Expert Committees, as expert evidence can, therefore, form the basis for
determining the market value in land acquisition cases, as a relevant piece of evidence.
It will be however open to either party to place evidence to dislodge the presumption
that may flow from such guideline market value. We, however, hasten to add that the
guideline market value can be a relevant piece of evidence only if they are assessed by
statutorily appointed Expert Committees, in accordance with the prescribed assessment
procedure (either streetwise, or roadwise, or areawise, or villagewise) and finalised
after inviting objections and published in the gazette. Be that as it may."

17. Following aforesaid decisions and applying the same to the facts of present
case, we find that it is no body's case that circle rates fixed by Collector, Ghaziabad do
satisfy the requirement as observed in Lal Chand Vs. Union of India so as to form relevant
material to be considered for determining market value under Section 23 of Act, 1894. It is,
in these circumstances, we have no hesitation in holding that in respect of determination of
market value of land acquired in these appeals, circle rates fixed by Collector would not be
relevant material to be looked into for determining market value.

18. So far as material placed before SLAO and his award is concerned, we find
that the same was not material to be looked into by Reference Court since proceedings
before Reference Court are independent and separate. An award by SLAO is like an offer
and not to be treated as a judgment of Trial Court. It is well settled, when the land holders
are not agreeable to accept the offer made by Land Acquisition Officer, they have a right to
approach Collector under section 18 of the Act, 1894, by a written application, for referring
the matter to court, for determination of the amount of compensation or if there is any
dispute regarding measurement of land for that also. In the present case the references in
question were made at the instance of claimants for determining the amount of
compensation.

19. In Chimanlal Hargovinddas vs. Special Land Acquisition Officer, (1988) 3
S.C.C 751, the Court has said that a reference is like a suit which is to be treated as an
original proceeding. The claimants is in the position of a plaintiff who has to show that the
price offered for his land in the Award is inadequate. However, for the said purpose the
Court would not consider the material, relied upon by Land Acquisition Officer in Award,
unless the same material is produced and proved before the Court. The Reference Court
does not sit in appeal over the Award of Land Acquisition Officer. The material used by
Land Acquisition Officer is not open to be used by the Court suo motu unless such material
is produced by the parties and proved independently before the Reference Court.
Determination of market value has to be made as per market rate prevailing on the date of
publication of notification under section 4 of Act, 1894. The basic principle which has to be
followed by Reference Court for determining market value of land, as if, the valuer i.e. the
Court is a hypothetical purchaser, willing to purchase land from the open market and is
prepared to pay a reasonable price, as on the crucial day, i.e., date of publication of
notification under section 4 of the Act, 1894. The willingness of vendor to sale land on
reasonable price shall be presumed. The Court, therefore, would co-relate market value
reflated in the most comparable instance which provides the index of market value. Only
276 INDIAN LAW REPORTS ALLAHABAD SERIES
genuine instances would be taken into account. Sometimes even post-notification instances
may be taken into account if they are very proximate, genuine and acquisition itself has not
motivated the purchaser to pay a higher price on account of the resultant improvement in
development prospects. Proximity from time angle and from situation angle would be
relevant considerations to find out most comparable instances out of the genuine instances.
From identified instances which would provide index of market value, price reflected
therein may be taken as norm and thereafter to arrive at the true market value of land under
acquisition, suitable adjustment by plus and minus factors has to be made. In other words a
balance sheet of plus and minus factors may be drawn and the relevant factors may be
valuated in terms of price variation as a prudent purchaser would do. The market value of
land under acquisition has to be deduced by loading the price reflected in the instances taken
for plus factors and unloading for minus factors.

21. The size of the land, therefore, would constitute an important factor to
determine market value. It cannot be doubted that small size plot may attract a large number
of persons being within their reach which will not be possible in respect of large block of
land wherein incumbent will have to incur extra liability in preparing a lay out and carving
out roads, leaving open space, plotting out smaller plots, waiting for purchasers etc. The
Court said that in such matters, the factors can be discounted by making deduction by way
of an allowance at an appropriate rate ranging between 20% to 50%, to account for land,
required to be set apart for carving out road etc. and for plotting out small plots.

22. The concept of smaller and larger plots should be looked into not only from
the angle as to what area has been acquired, but also the number of land holders and size of
their plots. When we talk of concept of prudent seller and prudent buyer, we cannot ignore
the fact that in the category of prudent seller the individual land holder will come. It is the
area of his holding which will be relevant for him and not that of actual total and collective
large area which is sought to be acquired.

23. In V.M. Salgoacar & brother Ltd. vs. Union of India (1995) 2 S.C.C 302 the
land acquired by notification dated 06.07.1970 in village Chicalim near Goa Airport
belonged to a single owner. The Court observed when land is sold out in smaller plots, there
may be a rising trend in the market, of fetching higher price in comparison to the plot which
are much higher in size. Having said so the Court further said " though the small plots ipso
facto may not form the basis per se to determine the compensation, they would provide
foundation for determining the market value. On its basis, giving proper deduction, the
market value ought to be determined".

24. Again in Shakuntalabai (Smt.) and others vs. State of Maharashtra, 1996 (2)
S.C.C 152, 20 acres of land in Akola town was sought to be acquired by notification
published on 11.08.1965 under section 4(1) of Act, 1894 which was also owned by a single
person. It is in this context the Court said "the Reference Court committed manifest error in
determining compensation on the basis of sq. ft. When land of an extent of 20 acres is
offered for sale in an open market, no willing and prudent purchaser would come forward to
purchase that vast extent of land on sq. ft. basis. Therefore, the Reference Court has to
3 All. Asha Ram & Anr. Vs U.P.A.E.P. & Ors.
277
consider valuation sitting on the armchair of a willing prudent hypothetical vendee and to
put a question to itself whether in given circumstances, he would agree to purchase the land
on sq. ft. basis. No feat of imagination is necessary to reach the conclusion. The answer is
obviously "no".

25. We may also notice at this stage that deduction for development is different
than deduction permissible in respect of largeness of area vis-a-vis exemplar of small piece
of land. Many times, land owners relied on the rates on which development authorities used
to offer allotment of developed plots cropped out by them in residential or industrial area.
Such rates apparently cannot form basis for compensation for acquisition of undeveloped
lands for reasons more than one. The market value in respect of large tract of undeveloped
agricultural land in a rural area has to be determined in the context of a land similarly
situated whereas allotment rates of development authorities are with reference to small plots
and in a developed lay out falling within urban or semi-urban area. The statutory authorities
including development authorities used to offer rates with reference to economic capacity of
the buyer like economic weaker sections, low income group, middle income group, higher
income group etc. Therefore, rates determined by such authorities are not uniform. The
market value of acquired land cannot depend upon economic status of land loser and
conversely on the economic status of the body at whose instance the land is acquired.
Further, normally, land acquired is a freehold land whereas allotment rates determined by
development authorities etc. constitute initial premium payable on allotment of plots on
leasehold basis.

26. However, where an exemplar of small piece of land is relied, in absence of any
other relevant material, Court may determine market value in the light of evidence relating
to sale price of small developed plots. In such cases, deduction varying from 20% to 75% is
liable to apply depending upon nature of development of lay out in which exemplar plot is
situated.

27. In Lal Chand Vs. Union of India and another, (2009) 15 SCC 769, Court
noticed that this deduction for development constitutes two components- one is with
reference to area required to be utilized for development work and second is the cost of
development work. It further held that deduction for development in respect of residential
plot may be higher while not so where it is an industrial plot. Similarly, if acquired land is in
a semi-developed urban area or in any undeveloped rural area, then deduction for
development may be much less and vary from 25 to 40 percent since some basic
infrastructure will already be available. The percentage is only indicative and vary
depending upon relevant factors. With reference to exemplars of transfer of land between
private parties, Court would also look into the intrinsic evidence, i.e., the exemplar sale deed
where the sale deed recites financial difficulties of vendor and urgent need to find money as
a reason for sale or other similar factors, like litigation or existence of some other dispute.
These are all the factors constituting intrinsic evidence of a distress sale.

28. In Lal Chand Vs. Union of India (supra), the Court also observed, if
acquisition is in regard to a large area of agricultural land in a village and exemplar sale
278 INDIAN LAW REPORTS ALLAHABAD SERIES
deed is also in respect of an agricultural land in the same village, it may be possible to rely
upon the sale deed as prima facie evidence of prevailing market value even if such land is at
the other end of village, at a distance of one or two kilometers. But, the same may not be the
position where acquisition relates to plots in a town or city where every locality or road has
a different value. A distance of about a kilometer may not make a difference for the purpose
of market value in a rural area but even a distance of 50 meters may make a huge difference
in market value in urban properties. Thus, distance between two properties, the nature and
situation of property, proximity to the village or a road and several other factors may all be
relevant in determining market value.

29. Normally, the Courts have held that exemplars should be such which are
before the date of notification under Section 4 (1) of Act, 1894 but an exemplar sale deed of
a subsequent period of date of acquisition notification is not completely ruled out to be
relevant document provided circumstances to justify the same are available.

30. In State of U.P. Vs. Major Jitendra Kumar and others, AIR 1982 SC 876,
notification under Section 4 was published on 6.1.1948. The Court determined rate of
compensation relying on sale deed dated 11.7.1959, i.e., a document executed after almost
three and half years after the date of acquisition notification. Supreme Court upheld reliance
of such document observing that if there is no material to show that there was any
fluctuation in market rate between the date of acquisition and the date of concerned sale
deed, such document may be considered as a relevant material in absence of any other apt
evidence. This view was followed in a subsequent decision, i.e., Administrator General of
West Bengal Vs. Collector, Varanasi, AIR 1998 SC 943, where the Court said as under:-

"Such subsequent transactions which are not proximate in point of time to the
acquisition can be taken into account for purposes of determining whether as on the
date of acquisition there was an upward trend in the prices of land in the area. Further
under certain circumstances where it is shown that the market was stable and there
were no fluctuations in the prices between the date of the preliminary notification and
the date of such subsequent transaction, the transaction could also be relied upon to
ascertain the market value."

31. We need not go into a catena of other decisions rendered in the last several
decades since we have benefit of a recent Division Bench decision of this Court in First
Appeal No. 454/2003 and other connected matters, Meerut Development Authority
through Its Secretary vs. Basheshwar Dayal (since deceased) Through His L.Rs and
another decided on 01.08.2013 wherein the legal principles settled by Apex Court in
various judgments, relevant for determination of market value have been crystallized as
under:

(i) Function of the Court in awarding compensation under the Act is to ascertain
the market value of the land on the date of the notification under Section 4(1),

(ii) The method for determination of market value may be :
3 All. Asha Ram & Anr. Vs U.P.A.E.P. & Ors.
279
(a) Opinion of experts,
(b) the price paid within a reasonable time in bona fide transactions of purchase of
the lands acquired or the lands adjacent to the lands acquired and possessing similar
advantages,
(c) a number of years purchase of the actual or immediately prospective profits of
the land acquired. (Ref. (1994) 4 SCC 595 para 5 Jawajee Nagnatham Vs. Revenue
Divisional Officer & others)

(iii) While fixing the market value of the acquired land, comparable sales method
of valuation is preferred than other methods of valuation of land such as capitalisation
of net income method or expert opinion method. Comparable sales method of valuation
is preferred because it furnishes the evidence for determination of the market value of
the acquired land at which a willing purchaser would pay for the acquired land if it had
been sold in the open market at the time of issue of notification under Section 4 of the
Act. However, comparable sales method of valuation of land for fixing the market
value of the acquired land is not always conclusive but subject to the following
factors:-
(a) Sale must be a genuine transaction,
(b) the sale deed must have been executed at the time proximate to the date of
issue of notification under Section 4 of the Act,
(c) the land covered by the sale must be in the vicinity of the acquired land,
(d) the land covered by the sales must be similar to the acquired land
(e) the size of plot of the land covered by the sales be comparable to the land
acquired.
(f) if there is dissimilarity in regard to locality, shape, site or nature of land
between land covered by sales and land acquired, it is open to the Court to
proportionately reduce the compensation for acquired land.

(iv) The amount of compensation cannot be ascertained with mathematical
accuracy. A comparable instance has to be identified having regard to the proximity
from time angle as well as proximity from situation angle. For determining the market
value of the land under acquisition, suitable adjustment has to be made having regard to
various positive and negative factors vis-a-vis the land under acquisition which are as
under : -

Positive factors

Negative factors

(i) Smallness of size

(i) Largeness of area

(ii) Proximity to a road.

(ii) Situation in the interior at a distance
from the road.

(iii) Frontage on a road.

(iii) Narrow strip of land with very small
frontage compared to depth.
280 INDIAN LAW REPORTS ALLAHABAD SERIES
(iv) Nearness to developed area.

(iv) Lower level requiring the depressed
portion to be filled up.

(v) Regular shape.
(
v) Lower level requiring the depressed
portion to be filled up.

(vi) Level vis-a-vis land under acquisition.

(vi) Some special disadvantageous factor
which would deter a purchaser.

(vii) Special value for an owner of an
adjoining property to whom it may have
some very special advantage.

(v) For ascertaining the market value of the land, the potentiality of the acquired
land should also be taken into consideration. Potentiality means capacity or possibility
for changing or developing into state of actuality.

(vi) Deduction not to be done when land holders have been deprived of their
holding 15 to 20 years back and have not been paid any amount.

(vii) In fixing market value of the acquired land, which is undeveloped or underdeveloped, the Courts have generally approved deduction of 1/3rd of the market value
towards development cost except when no development is required to be made for
implementation of the public purpose for which land is acquired. ( Ref. (2011) 8 SCC
page 9, Valliyammal and another Vs. Special Tahsildar Land Acquisition and another ,
paras 13, 14, 15, 16, 17, 18 and 19).

(viii) When there are several exemplars with Reference to similar lands, it is the
general rule that the highest of the exemplars, if it is satisfied, that it is a bona fide
transaction has to be considered and accepted. When the land is being compulsorily
taken away from a person, he is entitled to the highest value which similar land in the
locality shown to have fetched in a bona fide transaction entered into between a willing
purchaser and a willing seller near about the time of the acquisition.(Ref. (2012) 5 SCC
432, Mehrawal Khewaji Trust (Registered), Faridkot and others Vs. State of Punjab and
others).

(ix) In view of Section 51A of the Act certified copy of sale deed is admissible in
evidence, even the vendor or vendee thereof is not required to examine themselves for
proving the contents thereof. This, however, would not mean that contents of the
transaction as evidenced by the registered sale deed would automatically be accepted.
The legislature advisedly has used the word 'may'. A discretion, therefore, has been
conferred upon a Court to be exercised judicially, i.e., upon taking into consideration
the relevant factors. Only because a document is admissible in evidence, the same by
itself would not mean that the contents thereof stand proved. Having regard to the other
3 All. Asha Ram & Anr. Vs U.P.A.E.P. & Ors.
281
materials brought on record, the Court may not accept the evidence contained in a deed
of sale. (Ref. (2004) 8 SCC 270 para 28 and 38, Cement Corpn. Of India Ltd. Vs. Purya
and others).

(x) While fixing the market value of the acquired land, the Land Acquisition
Collector is required to keep in mind the following factors : -

(a) Existing geographical situation of the land.
(b) Existing use of the land.
(c) Already available advantages, like proximity to National or State Highway or
road and/ or developed area,
(d) Market value of other land situated in the same locality/ village/ area or
adjacent or very near the acquired land.

(xi) Section 23(1) of the Act lays down what the Court has to take into
consideration while Section 24 lays down what the Court shall not take into
consideration and have to be neglected. The main object of the enquiry before the Court
is to determine the market value of the land acquired. The market value is the price that
a willing purchaser would pay to a willing seller for the property having due regard to
its existing condition with all its existing advantages and its potential possibilities when
led out in most advantageous manner excluding any advantage due to carrying out of
the scheme for which the property is compulsorily acquired. The determination of
market value is the prediction of an economic event viz. a price outcome of
hypothetical sale expressed in terms of probabilities. For ascertaining the market value
of the land, the potentiality of the acquired land should also be taken into consideration.
Potentiality means capacity or possibility for changing or developing into state of
actuality.

(xii) The question whether a land has potential value or not, is primarily one of
fact depending upon its condition, situation, user to which it is put or is reasonably
capable of being put and proximity to residential, commercial or industrial areas or
institutions. The existing amenities like water, electricity, possibility of their further
extension, whether near about town is developing.

(xiii) In fixing market value of the acquired land, which is undeveloped or underdeveloped, the Courts have generally approved deduction of 1/3rd of the market value
towards development cost except when no development is required to be made for
implementation of the public purpose for which land is acquired. Deduction of
"development cost" is the concept used to derive the "wholesale price" of a large
undeveloped land with Reference to the "retail price" of a small developed plot. The
difference between the value of a small developed plot and the value of a large
undeveloped land is the "development cost". (Ref. (2012) 7 SCC 595 paras 16, 17, 18,
21 and 22, Sabhia Mohammed Yusuf Abdul Hamid Mulla (dead) and others).
282 INDIAN LAW REPORTS ALLAHABAD SERIES
13. Besides, there are some further authorities on the subject, which may also be
referred hereat.
14. In Valliyammal and another v. Special Tahsildar (Land Acquisition) and another,
(2011) 8 SCC 91 the Court has looked into various earlier judgments laying down guiding
principles for determination of market value of acquired land. The Court has observed that
comparable sales method of valuation is preferred since it furnishes the evidence for
determination of market value of acquired land at which a willing purchaser would pay for
acquired land if it had been sold in open market at the time of acquisition. However, this
method is not always conclusive and there are certain factors, which are required to be
fulfilled and on fulfillment of those factors, compensation can be determined.