# Bulandshahr Khurja Development Authority Through Secretary v. Smt. Tahira Khatoon & Ors

- **Citation:** (2016) 5 ILRA 25
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-05-25
- **Bench:** Sudhir Agarwal, Rakesh Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/bulandshahr-khurja-development-authority-through-secretary-v-smt-tahira-khatoon-43935
- **Pages:** 37

## Text

_Characters 0–39,961 of 115,727. This is a partial read: ask again with offset=39961 for what follows._

5 All. Bulandshahr Khurja Development Authority Through Secretary Vs Smt. Tahira Khatoon
 & Ors.

25

54. In view of the discussion made above, all the aforesaid criminal appeals preferred by
convicted appellants deserve to be allowed and are hereby allowed. The judgment and order dated
17.12.2008 passed by learned Additional Sessions Judge, Fast Track Court No. 2, Gonda in
Sessions Trial No. 177 of 2004 arising out of Case Crime No.114-A of 2001, Police Station
Nawabganj, District Gonda is hereby set aside. They are acquitted of the charges levelled against
them. The accused appellants are on bail. They need not to surrender. Their bail bonds are
cancelled and sureties discharged.

55. Criminal Appeal No. 1781 of 2009 preferred by the State is hereby dismissed.

56. Office is directed to certify this order to the court concerned forthwith to ensure
compliance and also to send back the lower court record.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.05.2016

BEFORE

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

First Appeal No.- 28 Of 2010

Bulandshahr Khurja Development Authority Through Secretary ...Appellant
Versus
Smt. Tahira Khatoon & Ors. ...Respondents

Counsel for Appellant:
B. Dayal

Counsel for Respondents:
Madan Mohan, Saurabh Basu

Held

The Court held that the award of the Land Acquisition Officer is merely an offer and the Reference Court
functions as a court of original jurisdiction where the claimant must prove inadequacy of compensation.
Market value has to be determined as on the date of Section 4 notification based on reliable evidence,
primarily comparable sale deeds of similar land. Circle rates are generally not reliable for determining market
value unless fixed through a statutory process. Agreements to sell may be considered if genuine, though not
conclusive. The Court must assess value as a prudent purchaser, and where small plot exemplars are used,
appropriate deductions for development and size difference must be applied. Among comparable instances,
the highest bona fide exemplar should ordinarily be preferred for fair compensation

CASE LAW CITED
26 INDIAN LAW REPORTS ALLAHABAD SERIES
Chimanlal Hargovinddas v. Special Land Acquisition Officer
Jawajee Nagnatham v. Revenue Divisional Officer (1994) 4 SCC 595
Land Acquisition Officer v. Jasti Rohini (1995) 1 SCC 717
U.P. Jal Nigam v. Kalra Properties (1996) 3 SCC 124
Krishi Utpadan Mandi Samiti v. Bipin Kumar (2004) 2 SCC 283
Lal Chand v. Union of India
Fort Press Co. Ltd. v. Municipal Corporation of Bombay (1922 PC)
Assam Railway & Trading Co. Ltd. v. Collector (1976 SC)
Samiullah v. Collector of Aligarh (1946 PC)
Mehta Ravindrarai Ajitrai v. State of Gujarat (1989 SC)
Special Land Acquisition Officer v. Sidappa Omanna Tumari (1995 Supp (2) SCC 168)
U.P. Avas Evam Vikas Parishad v. Janul Islam (1998) 2 SCC 467
Kausalya Devi Bogra v. Land Acquisition Officer (1984) 2 SCC 324
Bhagwathula Samanna v. Special Tehsildar (1991) 4 SCC 506
V.M. Salgoacar & Bros. Ltd. v. Union of India (1995) 2 SCC 302
Shakuntalabai v. State of Maharashtra (1996) 2 SCC 152
Basavva v. Special Land Acquisition Officer
Udho Dass v. State of Haryana (2010) 12 SCC 51
Anjani Molu Dessai v. State of Goa (2010) 13 SCC 710
Nelson Fernandes v. Special Land Acquisition Officer (2007 SC)
Special Land Acquisition Officer v. Karigowda (2010) 5 SCC 708
Mohinder Singh v. State of Haryana (2014) 8 SCC 897
Union of India v. Raj Kumar Baghal Singh (2014) 10 SCC 422

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

1. We have heard Sri B. Dayal, Advocate on behalf of appellant. On behalf of respondents two
counsels' names are printed in cause list i.e. Sri Madan Mohan and Sri Saurabh Basu. Sri Madan
Mohan states that he has no instructions in the matter and Sri Saurabh Basu, Advocate has not
appeared though appeal has been called in revised. Hence, we proceed to decide appeal ex-parte
against respondents, after hearing learned counsel for appellant.

2. This is a defendant's appeal under Section 54 of Land Acquisition Act, 1894 read with
Section 96 of Code of Civil Procedure (hereinafter referred to as "C.P.C.") arising from
award/judgment dated 8th May, 2009 passed by Sri V.K. Tyagi, Special Judge (SC/ST Act),
Bulandshahr/Additional District Judge, Court No. 2, Bulandshahr in Land Acquisition Reference
(hereinafter referred to as "L.A.R.") No. 68 of 1992 determining compensation @ Rs. 9 Lacs per
pucca bigha (Rs. 300/- per square yard). It has further held that claimant-land owner was entitled
for payment of solatium @ 30%, additional compensation @ 12% and interest @ 9% from the date
of possession for one year and thereafter @ 15% till payment.

3. The facts in brief giving rise to this appeal are as under:
5 All. Bulandshahr Khurja Development Authority Through Secretary Vs Smt. Tahira Khatoon
 & Ors.

27

3.1. Bulandshahr Khurja Development Authority (hereinafter referred to as "B.K.D.A.")
is a statutory body constituted under provisions of U.P. Urban Planning & Development Act, 1973.
It sought to acquire 61.801 acres (98 bigha, 17 biswa, 13 biswansi) of land for developing a
housing and commercial colony at Village - Akbarpur, Pargana - Baran, District - Bulandshahr.

3.2. Notification under Section 4(1) of Act, 1894 was published by State Government on
20.12.1988 and Notification under Section 6(1) of Act, 1894 was published on 18th January, 1989.
The proposed acquired land included claimant-respondent's land bearing Plot No. 372, area 4
bigha, 7 biswa, 16 biswansi whereof claimant-respondents were owner of half of land i.e. 2 bigha, 3
biswa and 18 biswansi.

3.3. The claimant-respondents filed objections claiming compensation @ Rs. 30 Lacs per
pucca bigha. The possession of acquired land was taken on 19th May, 1989. Special Land
Acquisition Officer (hereinafter referred to as "S.L.A.O.") made award on 4.4.1991, determining
compensation @ Rs. 88,000/- per bigha (Rs. 30/- per square yard). Dissatisfied therewith, an
application was submitted by claimant - land owner for making reference under Section 18 to
District Judge, Bulandshahr, for determining market value and, thereupon, Reference Court by
impugned judgment dated 8th May, 2009 has determined market value Rs. 9 Lacs per pucca bigha
(Rs. 300/- per square yard).

3.4. It may also be noted here that disputed acquired land in Plot No. 372 (half share) was
initially in the name of Smt. Tahira Khatoon who transferred her share in the acquired land vide
sale deed dated 11th September, 1995 in favour of Smt. Daya Agarwal, Smt. Pramila Agarwal, Sri
Gopi Chand and Sri Hari Ram for a consideration of Rs. 60,000/- (Rs. 9 per square yard). Further
Sri Gopi Chand vide sale deed dated 30.12.1998 has sold his entire rights in dispute in favour of
Smt. Daya Agarwal for a consideration of Rs. 15,000/-.

4. Learned counsel for appellant, however, did not dispute that consideration in aforesaid two
sale deeds was higher than of compensation payable under the award dated 4.4.1991 passed by
S.L.A.O. and effective rate would come to Rs. 39/- per square yard in both sale deeds.

5. Learned counsel for appellant vehemently contended that amount of compensation
determined by Reference Court is patently erroneous, perverse and illegal inasmuch as it has
enhanced market value which was neither true nor proper and is not founded on relevant material
on record. It has also erred in omitting to consider that parties themselves have made transactions
of acquired land @ Rs. 39/- per square yard and that too in 1995 and 1998 for acquisition
commenced on 20.12.1988. It has determined market value @ Rs. 300/- per square yard which is
patently arbitrary, excessive and unjust.

6. He urged that claimants relied on sale deed dated 2.7.1988 transferring by sale 100 square
of land of Plot No. 386 by Sri Anil Kumar in favour of Shanti Devi for a consideration of Rs.
42,000/- ( Rs. 420/- per square yard) which was for a very small piece of land comparing to the
28 INDIAN LAW REPORTS ALLAHABAD SERIES
area of acquired land and also area of disputed acquired land of claimant-respondent which is
6639.875 square yard, being half share of respondent no. 1.

7. He further contended that Reference Court has relied on certain awards which were already
set aside by this court in appeal and there against special leave petition was also dismissed by
Supreme Court. Therefore, the very basis on which impugned award has been passed having
disappeared, the impugned award cannot be sustained.

8. He further submitted that evidence advanced on behalf of appellant has not been looked into
and appreciated and in fact, has been discarded/ignored for totally misconceived and invalid
reasons.

9. The only question up for consideration in this appeal, "whether Reference Court has rightly
determined compensation of acquired land in dispute at Rs. 9 Lacs per pucca bigha i.e. Rs. 300/-
per square yard".

10. The evidence adduced before Reference Court by parties constituted following:-

Oral Evidence

On behalf of claimant respondents Sri Ratan Lal, Narayan Singh and Tahira Khatoon
were examined as PW-1, PW-2 and PW-3 while on behalf of defendant appellants Sri Soran Singh,
Hari Singh were examined as DW-1, DW-2 respectively.

Documentary Evidence filed by claimant

(a) Sale deed dated 2.7.1988 of plot no. 386 executed by Anil Kumar in favour of Shanti
Devi, transferring by sale, 100 square yard land for Rs. 42,000/- (Rs. 420/- per square yard).

(b) Sale deed dated 2.6.1988 executed by Smt. Uma Gupta and Puneeta Gupta in favour
of Sri Anil Kumar transferring by sale 103 square yard of plot for Rs. 34800/- (Rs. 337.86 per
square yard).

(c) Sale deed dated 22.12.1987 (Paper Book No. 144-C), relating to Khata No.371, area
4-8-17 (total), transferring half part thereof, for Rs. 195470/-, by Sri Om Prakash to Sri Chandan
Singh (i.e. @ Rs. 88,850/- per pucca bigha).

(d) The award/judgment (Paper Book no. 70-C) dated 6.8.1991 passed by 4th Additional
District Judge, Bulandshahr in LAR No. 480 of 1991 Smt. Malti Devi Vs. State, 481 of 1991 Smt.
Saroj Bala Vs. State, 482 of 1991 Smt. Sushma Vs. State, wherein compensation was determined at
Rs. 400/- per square yard.
5 All. Bulandshahr Khurja Development Authority Through Secretary Vs Smt. Tahira Khatoon
 & Ors.

29

(e) The award dated 23.3.1990 (Paper Book No. 71-C) whereby LAR No. 40 of 1987
Kedar Nath Kansal Vs. State was adjudicated by 7th Additional District Judge, Bulandshahr.

(f) Award dated 31.5.1994 (Paper Book 67-C, 68-C) passed by District Judge,
Bulandshahr in LAR No. 148 of 1992 Chandan Singh and another Vs. State, LAR No. 150 of 1992
Samman Singh and others Vs. State, LAR No. 151 of 1992 Anand Swarup Vs. State, LAR No. 152
of 1992 Smt. Rekha Goel and others Vs. State, LAR No. 156 of 1992 Khichhu and another Vs.
State, LAR No. 157 of 1992 Naresh Chand Vs. State, LAR No. 158 of 1992 Nathi and others Vs.
State, LAR No. 159 of 1992 Prem Pal Singh and others Vs. State and LAR No. 160 of 1992 Nem
Pal Vs. State wherein compensation was determined at Rs. 350/- per square yard.

(g). Award dated 26.11.1991 in LAR No. 565 of 1991, Ashok Kumar Vs. State and other
37 connected LARs, passed by 4th Additional District Judge, Bulandshahr determining
compensation at Rs. 400/- per square yard. (In aforesaid awards, dispute related to this very
acquisition which is in dispute in this appeal relating to Khasra Nos. 372, 371, 356, 377, 383, 381,
389 and 373.)

11. The documentary evidence cited on behalf of appellant constituted following:-

sl. Paper No.
Nature of
document
Parties
Plot no.
area
rate
1
122C2
Sale deed
Executed
by
C.P.
Dutt
Sharma
in
favour of Sudheer
Kumar Rana
386/10-1712
213.3
sq.
yard
(2/3rd
share)
Rs. 15000/-
(Rs. 70.4/-
per
sq.
yard)
2
123C2
Sale deed
Executed by Anil
Kumar in favour of
Smt. Seema Jain
386/10-1712
213.3
sq.
yard
(2/3rd
share)
Rs. 15000/-
(Rs. 70.4/-
per
sq.
yard)
3
124C2
Sale deed
Executed by Anil
Kumar in favour of
Smt. Suniti Devi
386/10-1712
253
sq.
yard
(1/5th
share)
Rs. 15000/-
(Rs. 60.4/-
per
sq.
yard)
4
125C2
Sale deed
Executed by Dinesh
Kumar Sharma in
favour
of
Smt.
Santosh
386/10-1712
400
sq.
yard
(1/3rd
share)
Rs. 15000/-
(Rs.
36/-
per
sq.
yard)
5
126C2
Sale deed
Executed by Dinesh
Kumar Sharma in
favour of Harendra
Pal Gupta
386/10-1712
100
sq.
yard
(1/3rd
share)
Rs. 7000/-
(Rs.
70/-
per
sq.
yard)
6
127C2
Sale deed
Executed
by
C.P. 386/10-17320
sq. Rs. 22400/-
30 INDIAN LAW REPORTS ALLAHABAD SERIES
Dutt
Sharma
in
favour of Dr. Prabhat
Kumar
12
yard
(1/3rd
share)
(Rs.
70/-
per
sq.
yard)
7
128C2
Sale deed
Executed by Dinesh
Kumar Sharma in
favour
of
Om
Prakash Jindal
386/10-1712
304
sq.
yard
(1/3rd
share)
Rs. 21000/-
(Rs.
70/-
per
sq.
yard)
8
144C2
Sale deed
Executed
by
Om
Prakash in favour of
Chandan Singh
371/4-8-17 2 bigha, 4
biswa, 8.5
biswansi
(1/2 share)
Rs. 95,400/-
(Rs. 59.28/-
per
sq.
yard)

12. Sri B. Dayal, learned counsel for appellant stated that though in other references,
Reference Court determined compensation at Rs. 400/- and Rs. 350/- per square yard, respectively
but in the case in hand, compensation at Rs. 300/- has been determined.

13. Sri Dayal further submitted that he pointed out to Reference Court that awards rendered in
earlier LARs by Reference Court determining higher market value i.e. Rs. 400/- or Rs. 350/- per
square yard were challenged in appeal and some of them, have been set aside, but Reference Court
has discarded above submission only on the ground that no such order passed in appeal has been
placed before it. The following observations made by Reference Court have been placed before us:-

^^lUnHkZdrkZ ds fo}ku vf/koDrk us mijksDr fof| O;oLFkk ds vk/kkj ij ;g rdZ izLrqr fd;k gS fd
lUnHkZdrkZx.k iwoZ esa ikfjr fu.kZ;ksa ds vk/kkj ij viuh vftZr Hkwfe dk izfrdj 400@& :i;s izfr oxZxt vFkok de ls
de 350@& :i;s izfr oxZ xt izkIr djus ds vf/kdkjh gSA izfroknhx.k ds fo}ku vf/koDrk us bu rdksZ dk [k.Mu fd;kA
bl ckr ij fo'ks"k :i ls mYys[k fd;k x;k fd ftu fu.kZ;ksa dh izekf.kr izfrfyfi;kWa izLrqr dh xbZ gS] mu fu.kZ;ksa ds
fo:) ekuuh; mPp U;k;ky;] bykgkckn ds le{k vihy izLrqr dj nh x;h gS rFkk dqN ekeyksa esa fu.kZ; vkikLr gks pqds
gSa] bl lEcU/k esa mUgksusa esjk /;ku lk{kh Mh0MCyw0&2 gfjflag vehu ds c;ku dh vksj fnyk;k ftleas bl lk{kh us i`"B
la[;k&4 ij ;g crk;k gS fd v'kksd dk jsQjsUl fnukad 31-3-04 o 20-3-04 dks [kkfjt gks x;s FksA esjs fopkj ls bl lk{kh
us v'kksd ds jsQjsUl ds lEcU/k esa tks c;ku fn;k gS] og HkwlUnHkZ la[;k 563 lu~ 91 ds fu.kZ; dh izekf.kr izfrfyfi dkxt
la[;k 69lh1 ds lEcU/k esa gSA vU; fdlh lUnHkZ ds lEcU/k esa dksbZ Li"V lk{; bl lk{kh us ugha nhA bl xokg dk dguk
gS fd dqN dsl esa ekuuh; mPp U;k;ky; o bykgkckn esa vihy yfEcr gSA blesa LVs vkns'k ikfjr gks x;s gS] ijUrq vR;Ur
vk'p;Z dk fo"k; gS fd vihy yfEcr gksus vFkok LVs vkns'k ikfjr gks tkus ds lEcU/k esa dksbZ vfHkys[kh; lk{; U;k;ky;
ds le{k izLrqr ugha dh x;hA v'kksd uke O;fDr ds jsQjsUl fujLr gks tkus ds lEcU/k eas dksbZ vfHkys[kh; lk{; izLrqr ugha
dh x;hA bu fu.kZ;ksa ds fujLr gks tkus vFkok vihy yfEcr gksus ds lEcU/k esa dksbZ Li"V lk{; u rks Mh0MCyw&2 ds c;ku
ls izkIr gqbZ vkSj u gh bl lEcU/k esa dksbZ vfHkys[kh; lk{; izLrqr dh x;hA^^

 (emphasis added)

"On the basis of the aforesaid case law, the learned counsel for the reference applicants
has argued that the reference applicants are, in view of the judgments passed earlier, entitled to
receive compensation for their acquired land at the rate of Rs. 400/- per square yard or atleast Rs.
350/- per square yard. The learned counsel for the defendants has rebutted these arguments. It has
been specifically mentioned that challenging the judgments certified copies whereof have been
5 All. Bulandshahr Khurja Development Authority Through Secretary Vs Smt. Tahira Khatoon
 & Ors.

31
produced, an appeal has been preferred before the Hon'ble Allahabad High Court and that in some
cases the judgments have been set aside. In this connection, he has drawn my attention towards the
statement of DW-2 Harisingh Ameen who has on its page 4 stated that the references filed by Ashok
were dismissed on 31.03.2004 and 20.03.2004. In my opinion, the statement given by this witness
in respect of Ashok's reference is related to the certified copy of the judgment passed in Land
Reference No. 563 of 1991 being Paper No. 69C1. This witness has not given any clear evidence in
respect of any other reference. This witness has told that in some cases an appeal is pending before
the Hon'ble Allahabad High Court and an stay order has been passed therein but it is extremely
surprising that no documentary evidence has been produced before the court in respect of the
pendency of the appeal or the stay order having been passed. No documentary evidence has been
produced with respect to the dismissal of references filed by Ashok. In respect of these judgments
having been set aside or the appeal being pending, any clear evidence has not emerged from the
statement of DW-2 nor has any documentary evidence been produced on this count."

 English Translation by Court.

14. Reference Court has also noted that exemplar cited by appellant showed transaction of sale
of land in nearby area at different rates ranging between Rs. 59/- per square yard to Rs. 76/- per
square yard but those exemplars have been discarded in the light of earlier judgments/awards of
Reference Courts in different LARs determining market value at Rs. 400/- and Rs. 350/- per square
yard, respectively.

15. It is also contended that since respondent 1 executed sale deed during pendency of
reference which was void, hence, respondents 2, 3 and 4 ought not to have been allowed to pursue
Reference, once respondent 1 ceased to have any interest in disputed property.

16. The points for determination for deciding this appeal, in our view, which have arisen are:

1. Whether Reference Court was justified in relying on awards rendered in LARs though
some of them were set aside in appeal by this Court?

2. Whether Reference Court was justified in discarding exemplars relied by appellant for
determining compensation of acquired land?

3. Whether Reference Court was justified in determining market value of acquired land at
Rs.300/- per square yard?

17. It is not disputed by learned counsel for appellant that while determining market value,
Reference Court has to keep in mind the factors/guidelines stated in Sections 23 and 24 of the Act,
1894. In the past several decades, question as to what are relevant principles necessary to be
considered for determining market value in a reference made under Section 18 have been laid down
in various authorities and we may refer a few of them to recapitulate all such principles.
32 INDIAN LAW REPORTS ALLAHABAD SERIES

18. The authorities laying down principles relevant for determination of market value broadly
may be considered under the following head :

i. Status of the proceeding before Collector/ SLAO in the proceedings before Reference
Court.

ii. Relevance of circle rate determined by Collector / SLAO for the purposes of stamp
duty.

iii. Evidence permissible to be considered by Reference Court for determining market
value/ compensation under Section 23(1) of Act, 1894.

Status of Proceedings of SLAO before Reference Court

19. Collector/ SLAO invites objections from landowners and after hearing them, determine
amount of compensation payable to landowners in respect of acquired land. In this process
generally it considers sale deeds executed in the area where acquired land situates, by collecting
relevant information from the office of Sub-Registrar. Besides, such material as is placed before it
by landowners is also considered. It is supposed to consider situation of land, nature and quality of
soil and other relevant factors.

20. The award made by Collector/SALO determining market value of acquired land for the
purposes of compensation is an offer made to landowners. Statute provides that landowners, if
satisfied with said offer, may accept compensation, but if not, they have a remedy of submitting
application before Collector for making reference to District Judge for determining market value of
acquired land. District Judge then would consider the matter, looking into the principles laid down
in Act, 1894 and, in particular, Sections 23 and 24.

21. Before us, it is not disputed that an award made by SLAO is an offer made by Collector to
land owners for compensation payable against acquired land. Reference Court does not sit in appeal
over award of SLAO to find out whether determination made by SLAO is correct or not. The
proceeding before Reference Court is original and treated like a suit. Material considered by SLAO
is not to be seen by Reference Court unless such material has been relied and proved in accordance
with law before it.

22. In Chimanlal Hargovinddas vs. Special Land Acquisition Officer (supra), Court has said
that a reference is like a suit which is to be treated as an original proceeding. The claimant is in the
position of a plaintiff who has to show that price offered for his land in the Award is inadequate.
However, for the said purpose, Court would not consider the material, relied upon by Land
Acquisition Officer in Award, unless some material is produced and proved before Court.

23. Thus, Reference Court does not sit in appeal over the Award of Land Acquisition Officer.
Material used by Land Acquisition Officer is not open to be used by Court suo motu unless such
5 All. Bulandshahr Khurja Development Authority Through Secretary Vs Smt. Tahira Khatoon
 & Ors.

33
material is produced by the parties and proved independently before Reference Court.
Determination of market value has to be made as per market rates prevailing on the date of
publication of notification under section 4 (1) of Act, 1894.

Circle Rate- Relevance

24. Many a times it is seen that Collector / SLAO or even landowners justify a particular
market value with reference to circle rate published by Collector which has been determined for the
purposes of stamp duty. This approach has not been approved by Courts time and again.

25. In Jawajee Nagnatham v. Revenue Divisional Officer, (1994) 4 SCC 595, this question
came up for consideration in the matter arisen from State of Andhra Pradesh. The landowners
appealed against order of Reference Court before Andhra Pradesh High Court claiming higher
compensation on the basis of the 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 upon the Government
to determine market value of land prevailing in a particular area, i.e., village, block, district or
region. It also did not provide, a statutory obligation upon 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.

26. Another matter from State of U.P. came up for consideration involving same issue in U.P.
Jal Nigam Vs. M/s Kalra Properties (P) Ltd., (1996) 3 SCC 124. Landowners' demanded
compensation in regard to land acquired under Act, 1894 on the basis of market value assessed as
per circle rate determined by Collector. It was accepted by High Court, but in appeal, judgment was
reversed by Supreme Court following its earlier decision in Jawajee Nagnatham (supra). 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.

27. The issue has again been considered recently by a larger Bench in Lal Chand Vs. Union
of India and another (supra) 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 v. District Magistrate/Collector, (1999) 5
SCC 62 and R Sai Ram Bharathi v. J Jayalalitha, (2004) 2 SCC 9. The Court resolved
controversy holding, if in a particular case, guidelines for market values are determined by an
Expert Committee constituted under State Stamp Law for following a detailed procedure laid down
34 INDIAN LAW REPORTS ALLAHABAD SERIES
under the relevant rules and are published in State Gazette, the same may be considered as a
relevant material to determine market value. Court said, when guidelines of market value, 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, Court further said
:-

"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 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 finalized
after inviting objections and published in the gazette. Be that as it may."

28. It is thus evident that for the purposes of determining market value circle rate fixed by
Collector for the purposes of stamp duty would not be a relevant material unless such determination
is under a statutory obligation and after following a prescribed procedure.

Agreement to Sell- whether relevant material

29. The relevant material has consensus of precedents so constitute and includes sale deeds of
immovable properties situate in area in which acquired land comes, particularly, if it has been
executed in proximity of the date of acquisition notification published under Section 4(1). Even
"agreement to sell" has been held relevant though with caution and in given circumstances. Court
below, in the case in hand, ought to have examined exemplar (Paper No. 24Ga) which is an
"agreement to sell" relating to a land measuring 3161.12 sq. yard at Rs.150/- sq. yard which was
executed on 29th April, 1994, just ten months before Notification under Section 4 was issued in the
case in hand. There is no hard and fast Rule which may exclude an 'agreement to sell' to be
considered for the purposes of determining market value. When 'agreement to sell' has
subsequently matured in a sale transaction and there is nothing to create any doubt over genuity of
transaction, it may constitute a relevant material.

30. In Fort Press Co. Ltd. vs. Municipal Corporation of City of Bombay, AIR 1922 PC 365,
it was held that an agreement between the parties as to the price does not interfere with the
jurisdiction of Collector under Act, 1894. Referring to the aforesaid decision in Assam Railway
and Trading Co. Ltd. vs. Collector of Lakhimpur and another, AIR 1976 SC 1182, Court held
"there was an agreement between the parties about the price that is not disputed; whether this
amounted to a concluded contract it does not seem to us a question that is required to be decided in
this appeal. Assumption to this was an agreement which bound the parties, the Collector had still
the jurisdiction to determine the market value of the land." In the aforesaid decisions agreement
5 All. Bulandshahr Khurja Development Authority Through Secretary Vs Smt. Tahira Khatoon
 & Ors.

35
was not discarded merely for the reason of its being agreement but what the Court said that it is
only a material to be considered by statutory authorities but jurisdiction to determine market value
lies upon Collector under section 11 of Act, 1894. The document of agreement would not be a
conclusive material.

31. Court in Assam Railway and Trading Co. Ltd (supra) also referred to another Privy
Council decision in Samiullah vs. Collector of Aligarh, AIR 1946 PC 75, holding " in assessing
compensation he is bound to exercise his own judgment as to the correct basis of valuation and his
judgment could not be controlled by an agreement between the parties interested. On a Reference
under section 18 the District Judge must also exercise its own judgment and consider among other
things whether the award of the Land Acquisition Officer was based on a correct principle".

32. In Mehta Ravindrarai Ajitrai and others vs. State of Gujrat, AIR 1989 SC 2051,
claimants relied on instances by way of agreement of sale dated 21.01.1957 and the sale deed dated
2nd April, 1957. The notification under section 4(1) of the Act, 1894 was published on 6th August,
1956 and agreement for sale was executed about five months thereafter. Court held that such an
agreement of sale, per se, could not be rejected for the reason that it was executed posterior to the
date of acquisition notification under section 4(1) and said:

"....the agreement for sale in connection with that land, pertains to a sale after the
acquisition, it can be fairly regarded as reasonably proximate to the acquisition and, in the
absence of any evidence to show that there was any speculative or sharp rise in the prices after the
acquisition, the agreement to sell dated January 21, 1957 must be regarded as furnishing some
light on the market value of the land on the date of publication of Section 4 notification." (emphasis
added)

33. Similar to the case in hand, we find that an issue came before a Division Bench of
Karnataka High Court in Purushotham Pandit Kher vs. Special Deputy Commissioner, ILR 1989
Karnataka 2042. Therein also, an agreement for sale was registered on 22.08.1972. Before it could
fructify in to sale, one of the land, referred to in the agreement for sale, was sought to be acquired
vide notification dated 21.02.1974, issued under section 4(1) of the Act, 1894. The agreement to
sell was relied by the body for whose benefit land was acquired and opposed by purchaser claimant
before the High Court. The claimant contended that Reference Court should not have relied upon
the value of acquired land as reflected in the registered agreement for sale. The question formulated
by Court therein reads as under:

"......whether the Reference Court would be justified in placing reliance on an agreement
to sell relating to an acquired land to which the claimant was a party, as reflecting its market value,
instead of relying upon the value of sites or lands in the neighborhood of the acquired land as
reflecting the value of each of them for determining the market value of the acquired land on a
comparable basis. "

34. Court answered the question as under:
36 INDIAN LAW REPORTS ALLAHABAD SERIES

"......we are not left in doubt that a Reference Court would be fully justified in relying
upon a bonafide, genuine and authentic transaction of an agreement to sell entered into by the
claimant for purchase of the very acquired property, as reflecting its market value, instead of
relying upon the transactions of sites or lands in the neighbourhood of the acquired land as
furnishing proper criteria for determining its (acquired land's) market value on a comparable
basis". (emphasis added)

35. In Special Land Acquisition Officer and another vs. Sidappa Omanna Tumari and
others, 1995 Supp. (2) SCC 168 which is a judgment of three Hon'ble Judges, Court, in para 11 of
the judgment has said:

"What could be regarded as the near estimate of the acquired land has to be ascertained,
be it the Collector or be it the court on the basis of authenticated transactions of sales or
agreements to sell relating to the same land or a portion of it wherever possible because such
transactions of sale or agreements to sell are always regarded as the best evidence available for
the purpose." (emphasis added)

36. Again, in para 13, Court expressing its view of permissibility to look into an agreement for
sale has observed as under:

"However, if sale deed or agreement to sell relating to the small extent of land on the
basis of which the market value of the large extent of the agricultural land has to be determined is a
portion of the acquired agricultural land itself or other land in its close proximity, it may be made
the basis for determining the market value of the acquired large extent of agricultural land but
has to be done when there is satisfactory evidence of the absence of sales or agreements to sell off
bigger extents of land pertaining to the acquired land or other lands in the vicinity of the acquired
land." (emphasis added)

37. Court in Special Land Acquisition Officer and another vs. Sidappa Omanna Tumari and
others (supra), again in para 14 of judgment, said as under:

"14. Therefore, where a sale deed or an agreement to sell relating to a small extent of
land is produced by the claimant, in the enquiry held for determination of compensation payable
for his large extent of land, the court is not always bound to determine the market price of such
large extent of acquired land on the basis of the price fetched or to be fetched by small extent of
land covered by such sale deed or agreement to sell." (emphasis added)

38. In U.P. Avas Evam Vikas Parishad vs. Janul Islam, (1998) 2 SCC 467, a three Judge
Bench of Supreme Court, in para 35 of the judgment said:

"[35] We do not find any substance in the submissions urged on behalf of the Parishad
regarding rejection of the application for adducing additional evidence by the High Court. The
High Court, in our opinion, has rightly held that in the absence of any material that the
5 All. Bulandshahr Khurja Development Authority Through Secretary Vs Smt. Tahira Khatoon
 & Ors.

37
agreements for sale relied upon had matured into sale transactions not much assistance could be
derived from them in the matter of determination of the market value of the acquired land,".
(emphasis added)

39. The aforesaid decisions, therefore, do not exclude agreement to sell from being a relevant
material for determining market value where it has matured into sale transaction. There are some
other authorities earlier to aforesaid judgment in this regard.

40. The authorities under Act, 1894, therefore, while determining rate of compensation
payable to land holders may consider material placed before it by the parties. An agreement for
sale, relied by any of parties, is not to be discarded merely for the reason that it is an agreement for
sale unless there are other reasons justifying its rejection.

41. A Division Bench judgment of this Court also has considered the aforesaid aspect in
National Thermal Power Corporation through its G.M. Vs. State of U.P. and others (supra) and
in para 48 of judgment, Court has said as under:

"48. In view of the above discussions, we are of the view that there is no inherent
anathema to consider a registered agreement of sale, if genuinity of a valid and honest transaction is
not disputed but the Court tried otherwise. In the present case, it is admitted position that land
which was subject matter of registered agreement of sale was included in the acquisition
notification and, therefore, parties could not conclude their transaction into sale. Thus the reason
for non-execution of sale deed was something beyond their control."

42. No authority otherwise has been brought to the notice of this Court wherein it has been
held that agreement to sell even if reflects bona fide transactions and having not resulted in sale
deed for reasons beyond the control of the parties, cannot be taken into account in any
circumstance, whatsoever, even if it belongs to same land or constitutes part of the same land
which has been acquired and determination of market value whereof is under consideration.

Other Principles relevant for determining market value

43. The basic principle which has to be followed by Reference Court for determining market
value of land, as if, the valuer i.e. Court, is a hypothetical purchaser, willing to purchase land from
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 sell land on
reasonable price shall be presumed. Court, therefore, would co-relate market value reflected in the
most comparable instance which provides the index of market value. Only 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 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
38 INDIAN LAW REPORTS ALLAHABAD SERIES
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 valued 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.

44. In Kausalya Devi Bogra and others v. Land Acquisition Officer, Aurangabad and
another, (1984) 2 SCC 324, about 150 acres of land was acquired. Owners of acquired land were in
two groups, i.e. Kaushalya Devi Bogra and Syed Yusufuddin Syed Ziauddin. First group, i.e.
Kaushalya Devi Bogra owned 74 acres, while Yusuffuddin owned about 15 acres of land. In these
facts of case where almost 60% of total acquired land was owned by two sets of owners and
exemplar of smaller property was relied, Court said that "when large tracts are acquired, the
transaction in respect of small properties do not offer a proper guideline. In certain other cases, for
determining market value of a large property on the basis of a sale transaction for smaller property,
a deduction should be given.

45. In Bhagwathula Samnna and others v. Special Tehsildar and Land Acquisition Officer,
Visakhapatnam Municipality (1991) 4 SCC 506, High Court applied deduction of 33.3%
observing, when large extent of land was acquired under housing scheme and exemplar is of small
land, reasonable deduction can be made.