# 15 (ADDL.) S.C.R. 414 CHANDRASHEKAR (D) BY LRS. & ORS v. LAND ACQUISITION OFFICER & ANR

- **Citation:** [2011] 15 S.C.R. 414
- **Court:** Supreme Court of India
- **Decided:** 2011-11-22
- **Case number:** Civil Appeal No. 1743 of 2006
- **Bench:** R.M. Lodha, Jagdish Singh Khehar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/15-addl-s-c-r-414-chandrashekar-d-by-lrs-ors-v-land-acquisition-officer-anr-27336
- **Pages:** 33

## Headnote

Land Acquisition Act, 1894 - s.23 - Market value -
Assessment of - Acquired land, an un-irrigated, undeveloped
C agricultural land admeasuring 144 acres - Assessment of
market value, on basis of the exemplar sale transaction of a
developed site measuring 2400 square feet and executed
subsequent to the date of publication of preliminary
notification -
Quantum of deductions to be applied -
D Determination of - High Court reduced the compensation
awarded by the Reference Court from Rs. 1, 45, 0001- per acre
to Rs. 65,0001- per acre, deducting 55 percent of the market
value assessed on the basis of the exemplar sale deed,
towards developmental charges, 5 percent towards waiting
E period, and 10 percent towards de-escalation - On appeal
held: It is essential to earmark appropriate deductions, out of
the market value of an exemplar land, for each of the two
components-viz. ·first component-for keeping aside area/space
for providing developmental infrastructure and second
F component-for developmental expenditure/expense - This
would be the first step towards balancing the differential factors
- The second step is to classify the nature of the exemplar
land as also the acquired land referring to the development
activities in connection with the first component as also
G second component - Comparison of the classifications
arrived, would depict the difference in terms of development,
between the exemplar land and the acquired land, which
would lead to the final step - In the final step, the absence
and presence of developmental components, based on such
H
414
CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 415
OFFICER
comparison, would constitute the basis for arriving at an
A
appropriate percentage of deduction, necessary to balance
the differential factors between the exemplar land and the
acquired land - Upper limit of permissible deduction is 75 per
cent-Deduction upto 67 per cent i.e. deduction of 33113 per
cent each can be made for the two components under the
B
head of development - Range of deductions other than the
head development would depend on the facts and
circumstances of each case - It may exceed 8 per cent but
that would only be where deductions for development activities
under head development is less than 67 per cent i.e. as long c
as cumulative deductions do not cross the upper bench mark
of 75 percent - High Courl limited deductions under the head
of "development" to 55 percent, thus, does not call for
interference - Deduction of 10 per cent under the head of 'deescalation' is appropriate specially when the period in
0
question exceeded 1year7 months and 17 days - Deduction
of 5 per cent towards waiting period is upheld - Cumulatively
these deductions would amount to 70 percent (55+10+5=70)
which is within the parameters laid down by this Courl- Thus,
there is no infirmity in the quantum to accumulated deductions
E
applied by the High Court - High Court awarded final
compensation at the rate of Rs. 65,0001- per acre to the land
losers relying on its own judgment in an earlier case which
perlained to acquisition of land out of the same notification
under which appellants' land was acquired - Consistency in
the judicial determination is of utmost imporlance - Final
F
compensation determined by the High Courl at Rs.65,0001per acre, was fully justified, even for the land acquired from
the revenue estate of the other village - City Improvement
Trust Board Act, 1976 - s. 15(1).
G
Development Authority issued a preliminary
Notification under Section 15(1) of the City Improvement
Trust Board Act, 1976 for acquisition of land for raising a
residential layout. After seven years final notification was
issued and the land of the appellants falling in the
H
416
SUPREME COURT REPORTS (2011) 15 (ADDL.) S.C.R.
A revenue estate of village 8 and R were acquired. The
Land Acquisition Officer passed an award. The market
value for the village 8 was fixed at the rate of Rs. 4, 100/-
per acre and the market value for the village R was fi

## Text

_Characters 0–39,911 of 67,369. This is a partial read: ask again with offset=39911 for what follows._

A
B
[2011] 15 (ADDL.) S.C.R. 414
CHANDRASHEKAR (D) BY LRS. & ORS.
v.
LAND ACQUISITION OFFICER & ANR.
(Civil Appeal No(s).1743 of 2006)
NOVEMBER 22, 2011
[R.M. LODHA AND JAGDISH SINGH KHEHAR, JJ.]
Land Acquisition Act, 1894 - s.23 - Market value -
Assessment of - Acquired land, an un-irrigated, undeveloped
C agricultural land admeasuring 144 acres - Assessment of
market value, on basis of the exemplar sale transaction of a
developed site measuring 2400 square feet and executed
subsequent to the date of publication of preliminary
notification -
Quantum of deductions to be applied -
D Determination of - High Court reduced the compensation
awarded by the Reference Court from Rs. 1, 45, 0001- per acre
to Rs. 65,0001- per acre, deducting 55 percent of the market
value assessed on the basis of the exemplar sale deed,
towards developmental charges, 5 percent towards waiting
E period, and 10 percent towards de-escalation - On appeal
held: It is essential to earmark appropriate deductions, out of
the market value of an exemplar land, for each of the two
components-viz. ·first component-for keeping aside area/space
for providing developmental infrastructure and second
F component-for developmental expenditure/expense - This
would be the first step towards balancing the differential factors
- The second step is to classify the nature of the exemplar
land as also the acquired land referring to the development
activities in connection with the first component as also
G second component - Comparison of the classifications
arrived, would depict the difference in terms of development,
between the exemplar land and the acquired land, which
would lead to the final step - In the final step, the absence
and presence of developmental components, based on such
H
414
CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 415
OFFICER
comparison, would constitute the basis for arriving at an
A
appropriate percentage of deduction, necessary to balance
the differential factors between the exemplar land and the
acquired land - Upper limit of permissible deduction is 75 per
cent-Deduction upto 67 per cent i.e. deduction of 33113 per
cent each can be made for the two components under the
B
head of development - Range of deductions other than the
head development would depend on the facts and
circumstances of each case - It may exceed 8 per cent but
that would only be where deductions for development activities
under head development is less than 67 per cent i.e. as long c
as cumulative deductions do not cross the upper bench mark
of 75 percent - High Courl limited deductions under the head
of "development" to 55 percent, thus, does not call for
interference - Deduction of 10 per cent under the head of 'deescalation' is appropriate specially when the period in
0
question exceeded 1year7 months and 17 days - Deduction
of 5 per cent towards waiting period is upheld - Cumulatively
these deductions would amount to 70 percent (55+10+5=70)
which is within the parameters laid down by this Courl- Thus,
there is no infirmity in the quantum to accumulated deductions
E
applied by the High Court - High Court awarded final
compensation at the rate of Rs. 65,0001- per acre to the land
losers relying on its own judgment in an earlier case which
perlained to acquisition of land out of the same notification
under which appellants' land was acquired - Consistency in
the judicial determination is of utmost imporlance - Final
F
compensation determined by the High Courl at Rs.65,0001per acre, was fully justified, even for the land acquired from
the revenue estate of the other village - City Improvement
Trust Board Act, 1976 - s. 15(1).
G
Development Authority issued a preliminary
Notification under Section 15(1) of the City Improvement
Trust Board Act, 1976 for acquisition of land for raising a
residential layout. After seven years final notification was
issued and the land of the appellants falling in the
H
416
SUPREME COURT REPORTS (2011) 15 (ADDL.) S.C.R.
A revenue estate of village 8 and R were acquired. The
Land Acquisition Officer passed an award. The market
value for the village 8 was fixed at the rate of Rs. 4, 100/-
per acre and the market value for the village R was fixed
at the rate of Rs. 13,500/- per acre respectively, as
s compensation. Thereafte•, on a reference filed for
enhancement of compensation, the compensation
enhanced from Rs. 4,100/- per acre to Rs. 1,46,000/- per
acre. The Reference Court on basis of the sale deed
dated 30.12.1983, from the market value of land
c assessed, applied a deduction of 33 per cent. The
Development Authority as also Land Acquisition Officer
filed separate appeals before the High Court. The High
Court finding the deductions inappropriate remitted the
matter to the Reference Court for reconsideration on the
0 issue of deductions to be made from the market value,
so as to determine compensation payable to the land
losers. The Reference Court re-determined the market
value of the acquired land at Rs. 1,45,000/- per acre. The
Development Authority and the Land Acquisition Officer
filed appeals before the High Court for reducing the
E quantum of compensation awarded and the landowners
filed cross-objections for enhancement thereof. The High
Court reduced the compensation awarded by the
Reference Court from Rs. 1,45,000/- per acre to Rs.
65,000/- per acre. It deducted 55 percent of the market
F value assessed on the basis of the exemplar sale deed,
towards developmental charges, 5 percent towards
waiting period, and 10 percent towards de-escalation.
Therefore, the appellants filed the instant appeals.
G
Dismissing the appeals, the Court
H
HELD: 1.1. The quantum of deductions (tn be made
from the market value determined on the basis of the
developed exemplar transaction) on account of
development is divided into two components. Firstly,
CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 417
OFFICER
B
space/area which would have to be left out, for providing
A
indispensable amenities like formation of roads and
adjoining pavements, laying of sewers and rain/flood
water drains, overhead water tanks and water lines, water
and effluent treatment plants, electricity sub-stations,
electricity lines and street lights, telecommunication
towers etc. Besides the said, land has also to be kept
apart for parks, gardens and playgrounds. Additionally,
development includes provision of civic amenities like
educational institutions, dispensaries and hospitals,
police stations, petrol pumps etc. This "f.irst component", c
may conveniently be referred to as deductions for
keeping aside area/space for providing developmental·
infrastructure. Secondly, deduction has to be made for
the expenditure/expense which is likely to be incurred in
providing and raising the infrastructure and civic 0
amenities, including costs for levelling hillocks and filling
up low lying lands and ditches, plotting out smaller plots
and the like. This "second component" may conveniently
be referred to as deductions for developmental
expenditure/expense. [Para 16] [436-F-H; 437-A-C]
1.2. It is essential to earmark appropriate deductions,
out of the market value of an exemplar land, for each of
E
the two components. This would be the first step towards
balancing the differential •factors. This would pave the
way for determining the market value of the undeveloped
F
acquired land on the basis of market value of the
developed exemplar land. For the "first component"
under the head of development, deduction of 33-1/3
percent can be made. Likewise, for the "second
component" under the head of "development" a further G
deduction of 33-1/3 percent can additionally be made.
The facts and circumstances of each case would
determine the actual component of deduction, for each
of the two components. Yet under the head of
"development", the applied deduction should not exceed
H
418 SUPREME COURT REPORTS [2011] 15 (ADDL) S.C.R.
A 67 percent. That should be treated as the upper
benchmark. This would mean, that even if deducticn
under one or the other of the two components exceeds
331/3 percent, the two components under the head of
development put together, should not exceed the upper
B benchmark. [Para 17, 18] (437-D-E; 438-C-F]
1.3. In Lal Chand's case and in Andhra Pradesh
Housing Board's case this Court expressed the upper limit
of permissible deductions as 75 percent. Deductions
C upto 67 percent can be made under the head of
"development". Further deductions would obviously
pertain to considerations other than the head of
"development". A deduction could be made keeping in
mind the waiting period required to raise infrastructure,
as also, the waiting period for sate of developed plots and
D or built-up areas. This nature of deduction may be placed
under the head "waiting period". Deductions could also
be made in cases where the exemplar sale transaction,
is of a date subsequent to the publication of the
preliminary notification. This nature of deduction may be
E placed under the head "de-escalation". Likewise,
deductions may be made for a variety of other causes
which may arise in different cases. All deductions should
not cumulatively exceed the upper benchmark of 75
percent. A deduction beyond 75 percent would give the
F impression of being lopsided, or contextually unreal,
since the land loser would seemingly get paid for only 25
percent of his land. This impression is unjustified,
because deductions are made out of the market value of
developed land, whereas, the .acquired land is
G undeveloped (or not fully developed). Differences
between the nature of the exemplar land and the acquired
land, it should be remembered, is the reason/cause for
. applying deductions. Market value based on an exemplar
sale, from which a deduction in excess of 75 percent has
H to be made, would not be a relevant sale transac~~n to
CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 419
OFFICER
be taken into consideration, for determining the
A
compensation of the acquired land. In such a situation,
the exemplar land and the acquired land would be
uncomparable, and therefore, there would be no question
of applying the market value of one (exemplar sale) to
determine the compensation payable for the other B
(acquired land). Even though on account of
developmental activities (under the head "development"),
the upper benchmark of 67 percent is specified, it would
seem, that for the remaining deduction(s), the permissible
range would be upto 8 percent. That however, is not the c
correct position. The range of deductions, other than
under the head "development", would depend on the
facts and circumstances of each case. Such deductions,
may even exceed 8 percent, but that would be so only,
where deductions for developmental activities (under the
0
head "development") is less than 67 percent, i.e., as long
as the cumulative deductions do not cross the upper
benchmark of 75 percent. Therefore, the range for
deductions, for issues other than developmental costs,
would depend on the facts and circumstances of each
case, they may be 8 percent, or even the double thereof,
E
or even further more, as long as, cumulatively all
deductions put together do not exceed the upper
benchmark of 75 percent. (Para 19] [438-G-H; 439-A-H;
440-A-B]
1.4. Before applying deductions for ascertaining the
market value of the undeveloped acquired land, it would
be necessary to classify the nature of the exemplar land,
F
as also, the acquired land. This would constitute the
second step in the process of determination of the correct G
quantum of deductions. The lands under reference may
be totally undeveloped, partially developed, substantially
developed or fully developed. In arriving at an
appropriate classification of the nature of the lands which
are to be compared, reference may be made to the
H
420
SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R.
A developmental activities referred in connection with the
"first component'', as also, the "second component". The
presence (or absence) of one or more of the components
of development, would lead to an appropriate
classification of the exemplar land, and the acquired land.
B Comparison of the classifications thus arrived, would
depict the difference in terms of development, between
the exemplar land and the acquired land. This exercise
would lead to the final step. In the final step, the absence
and presence of developmental components, based on
c such comparison, would constitute the basis for arriving
at an appropriate percentage of deduction, necessary to
balance the differential factors between the exemplar land
and the acquired land. [Para 20] [440-C-G]
J
1.5. The material sought by the appellant from the
Commissioner, Gulbarga Development Authority was
irrelevant for the determination of the percentage of
deduction to be applied. It is the overall developmental
cost, incurred (or incurable) on the entire acquired land
which has to be apportioned amongst the landholders In
a given case, the developmental cost on a small piece of
land, may be far in excess of the cost of the land. That
would however not mean, that the landowner in question,
would not be entitled to compensation. Again, if no
specific developmental activity is carried out on a
F particular piece of land, it would be improper to conclude,
that no deduction should be made while determining the
compensation payable to such landowner, even though
the acquired land was undeveloped. What the appellant
ought to have ascertained, is the developmental cost on
G the entire acquired land. In such a situation, if the entire
developmental activity had been completed, it would be
permissible to proportionately apportion the same
amongst land holders. Such a situation may not arise in
actuality. In most cases development is a continuous and
H ongoing process, which would be completed over a long
CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 421
OFFICER
stretch of time extending in some cases to a decade or A
even more. Therefore, it cannot be said that no deduction
should be made in the instant case under the head of
"development" because no expense is shown to have
been incurred for development of the land acquired from
the appellants. [Para 22] (441-G-H; 442-A-F]
B
1.6. In the absence of inputs as were sought by the
appellants
from
the
Commissioner,
Gulbarga
Development Authority, the deductions can only be
based on reasonable and logical norms. Comparison of C
the state of development of the exemplar land, as also,
that of the acquired land can be the only legitimate basis,
for a reasonable and logical determination on the issue.
Based on the said foundation, an assessment has to be
made by applying the parameters delineated. It is
proceeded on the assumption that the exemplar sale
D
deed was a fully developed site. In such a situation,
keeping in mind the parameters laid down by this Court,
and the conclusions drawn as also the facts of the instant
case, a deduction of upto 67 percent may have been
justified, and the same would fall within the parameters
laid down by this Court because the exemplar land could
E
be classified as fully developed, whereas, the acquired
land was totally undeveloped land. As against the said,
the High Court limited deductions under the head of
development to 55 percent. There is no justifiable reason
to interfere with the same, specially in an appeal
preferred by the land loser, more so, because no
justifiable basis for the same was brought to the notice.
[Para 23] (442-F-H; 443-A-D]
1.7. The High Court while determining the
compensation payable to the appellants on the basis of
the sale deed dated 30.12.1983 applied a further deduction
·of 10 percent under the head of "de-escalation". Even
though escalation of market price of land is a question
F
G
H
422
SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R.
A of fact, which should ordinarily to be proved through
cogent evidence. Yet, keeping in mind ground realities,
and taking judicial notice thereof, the land prices are on
the rise throughout the country. The outskirts of Gulbarga
town are certainly not an exception to the rule. The
B exemplar sale deed dated 30.12.1983 was executed
exactly 1 year 7 months and 17 days after the publication
of the preliminary notification on 13.5.1982 no fault can
be found with the determination rendered by the High
Court in making a deduction of 10 percent under the
c head of "de-escalation", specially when the period in
question exceeded one year (as for annual deductions),
by 7 months and 17 days. Thus, no fault can be found
with the determination rendered by the High Court in
making a deduction of 10 percent under the head of deD escalation. [Paras 24 and 25) [443-E-H; 444-A-F]
Delhi Development Authority Vs. Bali Ram Sharma
(2004) 6 SCC 533; ONGC Limited Vs. Rameshbhai
Jeewanbhai Patel, (2008) 14 SCC 748; Val/iyammal & Anr.
Vs. Special Tehsildar (Land Acquisition) & Anr. (2011) 8 SCC
E 91 - relied on.
1.8. Under the head "waiting period", the High Court
allowed a deduction of 5 percent. During the course of
hearing, the appellants did not assail the said deduction.
F Therefore, it is not necessary to record any findjng in
respect of the deduction applied by the High Court under
the head of "waiting period". The "waiting period" is one
of the relevant components for making deductions. The
instant deduction of 5 percent applied by the High Court
G is upheld. [Para 26) [444-G-H; 445-A-B]
H
Chimanlal Hargovinddas vs. Special Land Acquisition
Officer Poona & Anr. (1988) 3 SCC 751: 1988 (1) Suppl. SCR
531: Land Acquisition Officer Revenue Divisional Officer,
CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 423
OFFICER
Chittor vs. L. Kamalamma (Smt.) Dead by LRs. & Ors. (1998)
A
2 SCC 385: 1998 (1) SCR 1153; Atma Singh (Dead) through
LRs & Ors. Vs. State of Haryana (2008) 2 SCC 568: 2007
(12) SCR 1120 - referred to.
1.9'. 55 percent deduction accorded by the High
B
Court towards "development" is upheld. The deduction
of 10 percent on account of "de-escalation", as also, the
deduction of 5 percent on account of "waiting period" is
upheld. Cumulatively these deductions would amount to
70 percent (55+10+5=70). The outer benchmark for
deductions laid down by this Court in Lal Chand's case
C
and in Andhra Pradesh Housing Board's case is 75
percent. Cumulatively also the deduction allowed by the
High Court, fall well within the parameters laid down by
this Court. Therefore, there is no infirmity in the quantum
of accumulated deductions applied by the High Court D
during the course of making an assessment of the market
value of the acquired land. [Para 27] [445-C-E]
1.10. Based on the said deductions, the High Court
calculated the market value of the acquired land at E
Rs.67,954/- per acre. The market value of the acquired
land for disbursement of compensation to the land losers
was fixed by the High Court at Rs.65,000/- per acre. In
allowing final compensation at the rate of Rs.65,000/- per
acre to the land losers, the High Court had placed reliance
F
on market value fixed by the High Court itself in an earlier
case. The High Court had awarded Rs.65,000/- per acre
as compensation payable to the land losers, in an earlier
process of litigation pertaining to acquisition of land, out
of the same notification (under which the appellants land
G
was acquired). The said determination was rendered in
respect of the land acquired from the revenue estate of ·
village 8. While recording its final determination the High
Court expressed, that it was desirable to arrive at a
uniform value, specially when the land in question came
H
424
SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R.
A to be acquired out of the same process of acquisition,
and had not been shown to be any different from the
appellants land. The said view expressed by the High
Court is upheld. This sentiment expressed by the High
Court should never be breached. Consistency in judicial
B determination is of utmost importance. s'ince the
judgment relied upon by the High Court has attained
finality, the final compensation determined by the High
Court at Rs.65,000/- per acre, was fully justified. [Para 28]
(445-F-H; 446-A-C]
c
1.11. The conclusions drawn pertaining to
acquisition of land falling in the revenue estate of village
B apply equally to land acquired from the revenue estate
of village R. The High Court, while making a reference to
the land acquired from village R, noticed that·village R
D had a lower market value as it was farther from the nerve
centre of Gulbarga town as compared to village B. As·
such, in the facts and circumstances of the instant case,
it would be just and appropriate to uphold the
compensation determined by the High Court at Rs.65,000/
E - per acre, even for the land acquired from the revenue
estate of village R. [Para 29] (446-D-F]
Brigadier Sahib Singh Katha & Ors. v. Amritsar
Improvement Trust & Ors., (1982) 1 SCC 419; Administrator
F General of West Bengal vs. Collector, Varanasi (1988) 2 SCC
150: 1988 ( 2 ) SCR 1025; Chimanlal Hargovinddas vs.
Special Land Acquisition Officer, Poona & Anr. (1988) 3 SCC
751: 1988 (1) Suppl. SCR 531; Land Acquisition Officer
Revenue Divisional Officer, Chottor vs. L. Kamalamma (Smt.)
Dead by LRs. & Ors. (1998) 2 SCC 385: 1998 (1) SCR 1153;
G Kasturi and others vs. State of Haryana (2003) 1 SCC 354:
2002 (4) Suppl. SCR 117; Land Acquisition Officer,
Kammarapal/y Village, Nizamabad District, A.P. vs. Nookala
Rajamallu & Ors. (2003) 12 SCC 334: 2003 (6) Suppl. SCR
67; V. Hanumantha Reddy (Dead) by LRs. vs. Land
H
CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 425
OFFICER
Acquisition Officer & Manda/ R. Officer (2003) 12 SCC 642;
A
Viluben Jha/ejar Contractor (Dead) by LRs. vs. State of
Gujarat (2005) 4 SCC 789: 2005 (3) SCR 542; Atma Singh
(Dead) through LRs & Ors. vs. State of Haryana and Anr.
(2008) 2 sec 568: 2001 (12) SCR 1120; Lal Chand vs.
Union of India & Anr. (2009) 15 SCC 769: 2009 (13) SCR
B
622; Subh Ram & Ors. vs. State of Haryana & Anr., (2010) 1
SCC 444: 2009 (15 ) SCR 287; Andhra Pradesh Housing
Board vs. K. Manohar Reddy & Ors. (2010) 12 SCC 707: 2010
(11).SCR 1107; Special Land Acquisition Officer & Anr. vs.
MK. Rafiq Sahib (2011) 7 SCC 714 - referred to
c
Case Law Reference:
(1982) 1 sec 419
Referred to.
Para 15
1988 (2) SCR 1025
Referred to.
Para 15
D
1988 (1) Suppl. SCR 531 Referred to.
Para 15
1998 (1) SCR 1153
Referred to.
Para 15
2002 (4) Suppl. SCR 117 Referred to.
Para 15
2003 (6) Suppl. SCR 67
Referred to.
Para 15
E
(2003) 12 sec 642
Referred to.
Para 15
2005 (3) SCR 542
Referred to.
Para 15
2007 (12 ) SCR 1120
Referred to.
Para 15
F
2009 (13 ) SCR 622
Referred to.
Para 15
2009 (15) SCR 287
Referred to.
Para 15
2010 (11) SCR 1107
Referred to.
Para 15
G
(2011) 1 sec 114
Referred to.
Para 15
(2004) 6 sec 533
Referred to.
Para 25
(2008) 14 sec 148
Referred to.
Para 25
H
426 SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R.
A
(2011) 8 sec 91
Referred to.
Para 25
1988 (1) Suppl. SCR 531 Referred to.
Para 26
1998 (1) SCR 1153
Referred to.
Para 26
B
2007 (12) SCR 1120
Referred to.
Para 26
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1743 of 2006.
From the Judgment & Order dated 2.4.2004 of the High
c Court of Karnataka at Bangalore in M.F.A. No. 2615 of 2003
along with Cross Objection 132 & M.F.A. No. 2170 of 2003.
D
E
WITH
C.A. No. 8899-8901 of 2011.
Basava Prabhu S. Patil, G.V. Chandrashekar, N.K. Verma,
P.P. Singh, B. Subrahmanya Prasad, Nandeesh Patil, Anirudh
Sanganeria, A.S. Bhasme, Kiran Suri, S.J. Amith, V.N,
Raghupathy, Lagnesh Mishra for the appearing parties.
The Judgment of the Court was delivered by
JAGDISH SINGH KHEHAR, J. 1. Through this common
order, we propose to dispose of Civil Appeal no.1743 of 2006,
as also, Civil Appeal nos.8899-8901 of 2011. For convenience,
F the factual position, as has been depicted in Civil Appeal
no.17 43 of 2006, has been referred to.
2. Gulbarga Development Authority, consequent upon its
desire to acquire land for raising a residential layout, issued a
G preliminary notification under section 15(1) of the City
Improvement Trust Board Act, 1976 on 13.5.1982. Through the
aforesaid notification, it was proposed to acquire 144 acres
of land falling in the revenue estate of villages Rajapur (71
acres) and Badepur (73 acres). The matter in respect of the
acquisition of land crystallized, when the final notification was
H
CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 427
OFFICER [JAGDISH SINGH KHEHAR, J.]
issued on 14.12.1989. Thereby the land of the appellants.
A
measuring 8 acres 4 guntas, situated in survey no.63 of the
revenue estate of village Badepur, came to be acquired.
Insofar as Civil Appeal nos.8899-8901 of 2011 is concerned,
the appellants' land measuring 7 acres 7 guntas, falling in survey
no.14/2, in the revenue estate of village Rajapur, was acquired.
B
3. The Land Acquisition Officer announced his award on
7.7.1990. By the aforesaid award, the market value of the land,
falling in the revenue estate of village Badepur, was fixed at the
rate of Rs.4, 100/- per acre. For the land falling in the revenue
C
estate of village Rajapur, the Land Acquisition Officer,
assessed the market value at Rs.13,500/- per acre. The
landowner, Chandrashekar (whose LRs. are the appellants in
Civil Appeal no.17 43 of 2006) filed Writ Petition nos.15489496 of 1990 to assail the acquisition proceedings initiated by
the Gulbarga Development Authority, by finding fault with the
D
procedure adopted. The High Court of Karnataka (hereinafter
referred to as the High Court), while issuing notice, passed an
interim order staying dispossession for a period of 3 weeks.
By a motion bench order dated 10.8.1990, the interim order
passed on 23.7.1990 was continued, "till further orders". Writ
E
Petition nos. 15489-496 of 1990 came to be dismissed on
12.8.1991. The notification for acquisition of land as also the
procedure adopted was held to be in consonance with law.
4. During the pendency of the writ petition referred to in
the foregoing
paragraph, the original landowner
Chandrashekar, filed a protest petition assailing the quantum
of compensation assessed by the Land Acquisition Officer. In
F
the aforesaid protest petition dated 24.9.1990, reference was
also sought, for enhancement of compensation awarded to the
G
appellant. Since the protest petition filed by the landowner was
not referred for adjudication, the landowner filed an application
under section 18(3)(b) of the Land Acquisition Act, 1894. The
aforesaid application was allowed, and the claim raised by the
landowner was registered for adjudication.
H
428
SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R.
A
5. After adjudicating upon the matter, the Reference Court
announced its award on 19.6.1999. The compensation
determined by the Land Acquisition Collector at Rs.4, 100/- per
acre, was enhanced to Rs.1,46,000/- per acre. The Gulbarga
Development Authority, as also, the Land Acquisition Officer
B preferred independent appeals before the High Court. By an
order dated 3.11.1999, the High Court allowed the appeals,
and remitted the matter to the Reference Court for
reconsideration, on the issue of deductions to be made from
the market value, so as to determine compensation payable
C to the land losers. In this behalf, it would be relevant to mention,
that while determining the compensation payable to the
appellant, the Reference Court had based its assessment on
a sale deed dated 30.12.1983. From the market value of land
assessed, on the basis of the aforesaid sale deed, the
D Reference Court had applied a deduction of 33 percent. The
High Court having concluded, that the aforesaid deduction was
inappropriate, had remanded the matter for re-determination.
It is the case of the appellants before this Court, that the only
issue, which the Reference Court was called upon to settle, after
the High Court by its order dated 3.11.1999 had remitted the
E matter to the Reference Court was, the perc.entage of
deductions to be made from the market value determined on
the basis of the exemplar sale transaction, so as to determine
the fair compensation payable to the landowners for acquisition
F
of their land.
6. By its order dated 21.12.2002, the Reference Court redetermined the market value of the acquired land at
Rs.1,45,000/- per acre. This determination by the Reference
Court was again assailed before the High Court. Whilst the
G Gulbarga Development Authority and the Land Acquisition
Officer filed appeals before the High Court for reducing the
quantum of compensation awarded, the landowners preferred
cross-objections for enhancement thereof. The appeals filed by
the Gulbarga Development Authority and the Land Acquisition
H Officer were partly allowed, inasmuch as, the High Court
CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 429
OFFICER [JAGDISH SINGH KHEHAR, J.]
reduced the compensation awarded by the Reference Court
A
from Rs.1,45,000/- per acre to Rs.65,000/- per acre. The
instant order passed by the High Court dated 2.4.2004 has
been assailed before this Court through Civil Appeal no. 1743
of 2006, as also, through ihe connect'o!d Civil Appeal nos.
8899-8901 of 2011.
B
7. It would be relevant to mention, chat while determining
the controversy, the High Court was satisfied in deducting 55
percent of the market value assessed on the basis of the
exemplar sale deed, towards developmental charges, 5 percent
C
towards waiting period, and 10 percer,t towards de-escalation.
By virtue of the aforesaid deductions, the High Court
determined the market v·alue of the land at Rs.67,954/- per
acre. Having done so, by applying the rule of averages, the
High Court held, that compensation for the acquired land was
payable at Rs.65,000/- per acre.
D
8. During the course of hearing, learned counsel for the
appellants in both set of appeals contended, that the deduction
of 55 percent towards developmental charges, was arbitrary,
and without application of mind. It was sought to be asserted,
E
that the High Court did not record any reason(s) for applying
the aforesaid deduction. Likewise, it was contended, that
deduction of 10 percent by way of de-escalation was also
arbitrary. In this behalf, it was sought to be contended, that the
Reference Court had determined 3 percent as deduction on
F
account of de-escalation, whereas, the High Court had
enhanced the aforesaid deduction to 10 percent, without
recording any reason(s).
9. For the determination of market value of the acquired
land, it is apparent that primary reliance has been placed by
G
the appellants, on the exemplar sale deed dated 30.12.1983
(Exhibit P-18, before the Reference Court). It would also be
relevant to mention, that through the aforesaid sale deed, land
measuring 2400 square feet (40' x 60') falling in survey no.63/
H
430 SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R.
A 1, of the revenue estate of Badepur village, was sold for a total
consideration of Rs.12,500/-. It would also be relevant to
mention, that the Reference Court on the basis of the aforesaid
exemplar sale deed, assessed the value of the land at Rs.5.20
per square foot. Having applied a deduction of 33 percent
B towards developmental charges, the Reference Court had
arrived at the figure of Rs.3.47 per square foot. At the aforesaid
rate, the value of the acquired land was assessed at
Rs.1,51,153.20 per acre. The Reference Court also allowed deescalation at the rate of 3 percent per annum, as the exemplar
c sale deed was executed after the issuance of the preliminary
D
E
. notification. Consequent upon the aforesaid deduction, the
Reference Court arrived at the figure of Rs.1,44,552.20 per
acre, as compensation payable for the acquired land. The said
determination was rounded of to Rs.1,45,000/- per acre.
10. According to the appellants before this Court, the
determination rendered by the Reference Court, was in
consonance with the law laid down by this Court, and
accordingly, the compensation determined by the Reference
Court, should be restored to the land losers.
11. The issue which falls for our consideration in the
present appeal falls in a narrow compass. As already noticed
hereinabove, through the impugned notifications, the Gulbarga
Development Authority had sought acquisition of 144 acres of
F land, falling in the revenue estates of villages Rajapur (71 acres)
and Badepur (73 acres). As compared to the acquired land,
the exemplar sale deed dated 30.12.1983 reflects sale of a
small piece of land measuring 2400 square feet (40' x 60' =
2400 square feet). The aforesaid sale transaction (dated
29.12.1983) was executed 1 year 7 months and 17 days after
G the date of the preliminary notification (dated 13.5.1982).
12. Insofar as the nature of the acquired land of the
appellant measuring 8 acres 4 guntas, in survey no.63 of the
revenue estate of village Badepur is concerned, reference may
H be made to the statement recorded by the landowner before
CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 431
OFFICER [JAGDISH SINGH KHEHAR, J ]
the Reference Court. Chandrashekar recorded his statement
A
before the Reference Court on 16.2.1998. In his statement he
asserted, that the acquired land was wet land and was being
cultivated by him by taking water from a well situated in survey
no.62. It was acknowledged, that the well situated in survey
no.62 belonged to his uncle. In his cross-examination, he
B
accepted that he used to grow "jawar" and "logri" in the land.
He also affirmed that vegetables were also grown by him on
the land in question. He produced 8 bills pertaining to sale of
crops grown on the land. In the pleadings filed before this Court,
it was sought to be asserted, that the Sedam Gulbarga Highway c
is located on the northern side of the acquired land. It is also
mentioned, that a ring road exists on the southern side of the
acquired land. It is also pointed out, that there are some
approved residential layouts, in the close vicinity of the acquired
land. Based on the statement of the land loser, it is natural to
0
infer, that the appellants' land was undeveloped agricultural land
at time of its acquisition. Furthermore, the appellants land did
not have any independent irrigation facilities. Since it is not the
case of the appellants, that any layout or road abuts or passes
through the appellants' land, it is natural to conclude, that the
appellants' land was surrounded on all sides, by similar lands.
E
13. During the course of hearing, learned counsel for the
appellants did not invite our attention to any evidence on the
basis of which we could ascertain the nature of the land, which
was the subject matter of the Selle dated 30.12.1983. From the
F
dimensions of land (40' x 60'), it emerges that the same was
a developed site meant for use for some urban purpose. The
High Court has recorded, that the exemplar sale is of a
developed site. The said factual position is not a subject matter
of challenge at the hands of the appellants. We shall therefore
G
assume, that the exemplar sale d~ed was in respect of a
developed site measuring 2400 square feet.
14. From the afore-stated deliberations, the following
inferences emerge:
H
432
SUPREME COURT REPORTS [2011] 15 (ADDL) S.C.R.
A
Firstly, that the acquired land is a large chunk of land
measuring 144 acres.
Secondly, the acquired land owned by the appellants was
un-irrigated agricultural land, surrounded on all sides by similar
B lands, and as such, unquestionably undeveloped land.
Thirdly, the exemplar sale deed dated 30.12.1983, was in
respect of a small piece of land measuring 2400 square feet
(40' x 60' = 2400 square feet).
c
Fourthly, the exemplar sale deed dated 30.12.1983,
D
constituted sale of a developed site.
And fifthly, the exemplar sale deed dated 30.12.1983, was
executed 1 year 7 months and 17 days, after the publication of
the preliminary notification on 13.5.1982.
15. The present controversy calls for our determination on
the quantum of the deductions to be applied, to the market value
assessed on the basis of the exemplar sale transaction, so as
to ascertain the fair compensation payable to the land loser.
E The only factual parameters to be kept in mind are, the factual
inferences drawn in the foregoing paragraph. On the issue in
hand, we shall endeavor to draw our conclusions from past
precedent. In the process of consideration hereinafter, we have
referred to all the judgments relied upon by the learned counsel
F for the appellants, as well as, some recent judgments on the
issue concerned:
(i) In Brigadier Sahib Singh Ka/ha & Ors. v. Amritsar
Improvement Trust & Ors., (1982) 1 SCC 419, this Court
opined, that where a large area of undeveloped land is
G acquired, provision has to be made for providing minimum
amenities of town-life. Accordingly it was held, that a deduction
of 20 percent of the total acquired land should be made for land
over which infrastructure has to be raised (space for roads etc.).
Apart from the aforesaid, it was also held, that the cost of
H raising infrastructure itself (like roads, electricity, water,
CHANDRASHEKAR (0) BY LRS. v. LAND ACQUISITION 433
OFFICER [JAGDISH SINGH KHEHAR, J.]
underground drainage, etc.) need also to be taken into
A
consideration. To cover the cost component, for raising
infrastructure, the Court held, that the deduction to be applied
would range between 20 percent to 33 percent. Commutatively
viewed, it was held, that deductions would range between 40
and 53 percent.
B
(ii) Noticing the determination rendered by t~is Court in
Brigadier Sahib Singh Katha's case (supra), thls Court in
Administrator General of West Bengal vs. Co/le(tor, Varanasi,
(1988) 2 sec 150, upheld deduction of 40 percent (from the c
acquired land) as had been applied by the High Court.
(iii) In Chimanlal Hargovinddas vs. Special Land
Acquisition Officer, Poona & Anr., (1988) 3 SCC 751, while
referring to the factors which ought to be taken into
consideration while determining the market value of acquired
D
land, it was observed, that a smaller plot was within the reach
of many, whereas for a larger block of land there was implicit
disadvantages. As a matter of illustration it was mentioned, that
a large block of land would first have to be developed by
preparing its lay out plan. Thereafter, it would require carving
out roads, leaving open spaces, plotting out smaller plots,
waiting for purchasers (during which the invested money would
remain blocked). Likewise, it was pointed out, that there would
be other known hazards of an entrepreneur. Based on the
aforesaid likely disadvantages it was held, that these factors
could be discounted by making deductions by way of allowance
E
F
at an appropriate rate, ranging from 20 percent to 50 percent.
These deductions, according to the Court, would account for
land required to be set apart for developmental activities. It was
also sought to be clarified, that the applied deduction would
G
depend on, whether the acquired land was rural or urban,
whether building activity was picking up or was stagnant,
whether the waiting period during which the capital would
remain locked would be short or long; and other like
entrepreneurial hazards.
H
434 SUPREME COURT REPORTS [2011) 15 (ADDL.) S.C.R.
A
(iv) In Land Acquisition Officer Revenue Divisional
Officer, Chottor vs. L. Kamalamma (Smt.) Dead by LRs. &
Ors., (1998) 2 SCC 385, this Court arrived at the conclusion,
that a deduction of 40 percent as developmental cost from the
market value determined by the Reference Court would be just
B and proper for ascertaining the compensation payable to the
landowner.
(v) In Kasturi and others vs. State of Haryana, (2003) 1
sec 354, this court opined, that in respect of agricultural land
C or undeveloped land which has potential value for housing or
commercial purposes, normally 1/3rd amount of compensation
should be deducted, depending upon the location, extent of
expenditure involved for development, the area required for
roads and other civic amenities etc.