# COLLECTOR, RAIGARH v. DR. HARISINGH THAKUR & ANR. AND VICE VERSA - **Citation:** [1979] 2 S.C.R. 183 - **Court:** Supreme Court of India - **Decided:** 1978-10-27 - **Case number:** ; Civil Appeal Nos. 64-65 of 1969 - **Bench:** Jaswant Singh, R. S. Pathak, A. P. Sen - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/collector-raigarh-v-dr-harisingh-thakur-anr-and-vice-versa-7497 - **Pages:** 13 ## Headnote Land Acquisition Act, 1894 (I of 1894) Ss. 4, 9, 18, 23 and 24-Agricu/tura/ land acquired for doubling raitway truck-Payment of compensation-Potential value of such land as a building site-Reliance on comparative sales! capitalisation basis for ascertainment of quantunz of compensation. Agricultural land belonging to the respondent!: was acquired by the rail\\'ays for doubling the railway line, compensation payable for the acquired land was fixed lat Re. 1/6 per sq. ft. But the respondent claimed Re. -/12/- per sq. ft. on the ground that the land had a great potential value as a building site. On reference the Additional District Judge enhanced the rate of compensation to Re. -141- per sq. ft. and allowed solatium at 15%. On appeal the High Court enhanced the compensation to Re. -/8/- per sq. ft. On further appeal to this Court it was contended on behalf of the appellants that the courts below had erred in treating the land, which was primarily agri· cultural land, as abadi land overlooking that it had not been declared as such. [Per Jaswant Singh & Pathak, JJ. Sen, J. dissenting] Dismissing the appeals. B c D HELD : ( 1) Taking all the facts into consideration it cannot be said that E the basis C>n which the Additional District Judge and the High Court proceeded was wrong or that the quantum of compensation awarded by the High Court was in anr way eXcessive or exorbitant. [188 FJ (2) The question as to whether a land, has potential value as a building site or not is primarily one of fact depending upon several factors such as its condi· tion and situation, the user to which it is put or is reasonably capable of being pnt, its suitability for building purposes, its proximity to residential, commercial and industrial areas and educational, cultural or medical institutions, existing amenities like water, electricity and drainage and the possibility of their future extension, whether the nearby town is a developing or a prospering town with prospects of development schemes and the presence or absence of pressure of building tictlvity towards the land acquired or in the neighbourhood thereof. [187&F] (3) In the instant case it was clear from the observations of the Special Land Acquisition. Officer and the Addi. District Judge that the land had a great potential value as a building site. Moreover the Spl. Land Acquisition Officer did not lead any evidence worth the name to show the price of comparable sites but remained content with the production only of the sale. statement prepared by the Revenue Inspector. The sale statement consisted mostly of sales relating to the year 1951 which is not relevant to the question on hand. Without examining the vendors or vendees, the sale statement was not admissible in evidence and could not be relied upon. From the material on record it was clear that Raigarb was a growing town. Instead of utilising the land for doubling the railway track F • H A B c D F G H 184 SUPREME COURT REPORTS [1979] 2 S.C.R. the railway had built staff quarters. On three sides of the land there were pucca buildings and on the fourth side there was a metalled road. [187G-H, 188C-D, E] [Per Sen, J. (dissenting)] 1. Upon compulsory acquisition of property, the owner is entitled to the value of the property in its actual condition at the time of expropriation with all its advantages and with all its possibilities, excluding any advantage due to the carrying out of the claim for the purpose for which the property is acquired. The value of the acquired property with all its possibilities had to be adjudged on the material on record. [191 F, HJ Vyricharla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatnam., 66 IA 104, follu\ved. 2. The market price must be fixed with reference to the date of the notification under s. 4 irrespective of any trend, for an increase to the value thereof. The basis for determination of the market value of the land withins. 23(l)(i) of the Act is the value of the land to the owner. ## Text • \ 183 COLLECTOR, RAIGARH v. DR. HARISINGH THAKUR & ANR. AND VICE VERSA October 27, 1978 [JASWANT SINGH, R. S. PATHAK AND A. P. SEN, JJ.J Land Acquisition Act, 1894 (I of 1894) Ss. 4, 9, 18, 23 and 24-Agricu/tura/ land acquired for doubling raitway truck-Payment of compensation-Potential value of such land as a building site-Reliance on comparative sales! capitalisation basis for ascertainment of quantunz of compensation. Agricultural land belonging to the respondent!: was acquired by the rail\\'ays for doubling the railway line, compensation payable for the acquired land was fixed lat Re. 1/6 per sq. ft. But the respondent claimed Re. -/12/- per sq. ft. on the ground that the land had a great potential value as a building site. On reference the Additional District Judge enhanced the rate of compensation to Re. -141- per sq. ft. and allowed solatium at 15%. On appeal the High Court enhanced the compensation to Re. -/8/- per sq. ft. On further appeal to this Court it was contended on behalf of the appellants that the courts below had erred in treating the land, which was primarily agri· cultural land, as abadi land overlooking that it had not been declared as such. [Per Jaswant Singh & Pathak, JJ. Sen, J. dissenting] Dismissing the appeals. B c D HELD : ( 1) Taking all the facts into consideration it cannot be said that E the basis C>n which the Additional District Judge and the High Court proceeded was wrong or that the quantum of compensation awarded by the High Court was in anr way eXcessive or exorbitant. [188 FJ (2) The question as to whether a land, has potential value as a building site or not is primarily one of fact depending upon several factors such as its condi· tion and situation, the user to which it is put or is reasonably capable of being pnt, its suitability for building purposes, its proximity to residential, commercial and industrial areas and educational, cultural or medical institutions, existing amenities like water, electricity and drainage and the possibility of their future extension, whether the nearby town is a developing or a prospering town with prospects of development schemes and the presence or absence of pressure of building tictlvity towards the land acquired or in the neighbourhood thereof. [187&F] (3) In the instant case it was clear from the observations of the Special Land Acquisition. Officer and the Addi. District Judge that the land had a great potential value as a building site. Moreover the Spl. Land Acquisition Officer did not lead any evidence worth the name to show the price of comparable sites but remained content with the production only of the sale. statement prepared by the Revenue Inspector. The sale statement consisted mostly of sales relating to the year 1951 which is not relevant to the question on hand. Without examining the vendors or vendees, the sale statement was not admissible in evidence and could not be relied upon. From the material on record it was clear that Raigarb was a growing town. Instead of utilising the land for doubling the railway track F • H A B c D F G H 184 SUPREME COURT REPORTS [1979] 2 S.C.R. the railway had built staff quarters. On three sides of the land there were pucca buildings and on the fourth side there was a metalled road. [187G-H, 188C-D, E] [Per Sen, J. (dissenting)] 1. Upon compulsory acquisition of property, the owner is entitled to the value of the property in its actual condition at the time of expropriation with all its advantages and with all its possibilities, excluding any advantage due to the carrying out of the claim for the purpose for which the property is acquired. The value of the acquired property with all its possibilities had to be adjudged on the material on record. [191 F, HJ Vyricharla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatnam., 66 IA 104, follu\ved. 2. The market price must be fixed with reference to the date of the notification under s. 4 irrespective of any trend, for an increase to the value thereof. The basis for determination of the market value of the land withins. 23(l)(i) of the Act is the value of the land to the owner. Only such transactions \vould be relevant which can fairly be said to afford a fair criterion of the value of the property as at the date of the notification. That test is clearly not fulfilled in the present case.. [192A-B] 3. In a reference under s. 18 of the Act the burden of providing that the amount of compensation awarded by the Collector is inadequate lies upon the claimant, and he must show affirmatively that the Collector had proceeded upon a wrong basis. The nature and the burden of establishing that he was wrong, depend on the nature of the enquiry held by him. When the proceedings before the Collector disclose that the award was not reasonably supported by the material before him or when the basis was the application of a "multiple" which could not be justified on any rritional ground, the burden can be discharged by a slight evidence. But that is not the case here. [191C-D] 4. In the present case the High Court fell into an error in overlooking the fact that the acquired land was agricultural land. It was recorded as a raiyati land. The land was not recorded as abadi as wrongly assun1ed by the High Court. The claimants admitted that the land was actually under cultivation. The Revenue Inspector stated that the land was a paddy field and was surrounded by agricultural lands. That being so the District Judge was clearly V.Tong in treating the land to be abadi and calculating compensation on the footing of its being a ·building site. [189E-190A] 5. Secondly, the land was lying undeveloped and undiverted. Unless there was a development scheme the land could not be valued as a building site. At the time of the notification under s. 4(1) there was no recent building activity near about the land. The lantrict Judge, the appellant preferred an appeal to the High C"urt of Madhya Pradesh at Jabalpur which was H · registered as Miscellaneous (First) Appeal No. 43 of 1959. In the said appeal, the respondents filed cross objection5 claiming enhancement of compensation b¥ Rs. 84,518.39 P. The High Court by its • • --· :r • • • • COLLECTOR v. HARISINGH (Jaswant Singh, !.) I 87 judgment dated December 1, 1961 dismissed the aforesaid appeal preA ferred by the appellant but a:lowed the cross objections fifed by the respondents holding the reasonable rate of compensatiO'tl to be _!8/- per square foo.t. Cons•"quently respondent No. 1 was held entitled to Rs. 73,616-8-0 as compensation and Rs. 11,042-8-0 as solatium and respondent No. 2 was held entitled to Rs. 3,049-0-0 as compensation and Rs. 457-8-0 as solatium. It is against this judgment of the High B Court that the present appeals are directed . Appearing for the appellant, Mr. Gambhir while admitting that iP. an appeal und·"r Article 136 of the Constitution, the Court is on; y concerned with finding out wh•"ther the principles on the basis of which compensation has been computed for acquisition of land under the Act have been rightly applied or not and cannot re-appraise the evidence, has urged that the. Additional District Judge and the High Court have erred in treating t!J.:o land in question which was primarily an agricultural land as abadi land overlooking that it had not been declared as such. Mr. Sanghi has on the other hand urged that even according to the findings of the Additional District Judge, who made t!J,,; spot inspection, as also of the High Court, it is abundantly clear that the land in question was Abadi land and has been rightly treated as such. Mr. Sanghi has further urged that the said site has great potentialiti,;s as building site. The question as to whether a land has potential value of a building site or not is primarily one of fact depending upon several factors such as its condition and situation, the user to which it is put or is reasonably capable of being put, its suitability for building purposes, its proximity to residential, commercial and industrial areas and educational, cultural c D E or medical institutions, existing arn,nities like water, electricity and· F drainage and the possibility of their future extension, whether the nearby town is a developing, or a prospering town with prospects of development. .schemes and the presence or absence of pressure of building activity towards the land acquired or in the neighbourhood thereof. In the instant case, the fact that the land in question has a great potential value as a building site is evident not only from the observations made by the Special Land Acquisition Officer himself in his aforesaid award to the effect that the land has assumed semi-abadi site but also from G .. • the followi~ observations made in his judgment dated December 20, .. 1958 by the Additional District Judge who had the advantage of inspecting the site : ~ H "The land abuts Raigarh town. It is within Municipal limits and the nazul perimeter extends upto it. To the east of . ~ ' A B c D E F G 188 SUPREME COURT REPORTS [1979] 2 S.C.R. the plot there are some kutcha buildings inhabited by respectable persons. To the North is a Municipal road leading to the railway quarters to the west To the west beyond the railway quarters, there is further habitation and the locality is called "Banglapara" within Municipal limits. The plot did have a potential value as a building site and it is further supported by the fact that the plot has been used by the Railway authorities for construction of staff quarters thereon though the land was acquired for doubling the railway line." It is also not disputed that the Special Land Acquisition Officer did not lead any evidence worth the name to show the price of the comparabb sites in question and remained content with the production only of the sale statement made by Jujhar Singh, N.A.W.l. Now the sa:e statement consisted mostly of sales relating to the year 1951 which is not relevant for the qm':stion in band. Moreover, the sale statement by itself without examining •either the vendors or the vendees or the persons attesting the sale deeds is not admissible in evidence and cannot be relied upon. The sale deed dated December 14, 1956 in favour of Dr. Das for 4,800 square feet of land out of contigious Khasra No. 256 in lieu of Rs. 2,000/- i.e., at approximately 6t annas per square foot (which has been relied upon by th·~ Additional District Judge and the High Court) could be taken as a safe gnide for determination of the compensation. From the mat•erial adduoed in the case, it appears that Raigarh is a growing town, that instead of utilising tho land for doubling the railway track, the railway has built staff quarters thereon, that on three sides of the acquired land, tlr"r" already existed pucca buildings and on the fourth side, there is a metalled road. It is also in evidence that some lawyers have put up some constructions near the sites in question. Taking all the facts into consideration, it cannot be said that the basis on which the Additional District Judge and the High Court proceed·~d is wrong or that the quantum of compensation awarded by the High Court is in any way excessive or exorbitant. As neither the interest nor compensation on account of sewrance was claimed in the High Court either by Dr. Harisingh Thakur or by Tibm Singh Thakur, we do not think they can justifiably put up claims in that behalf. Mr. Sanghi appearing on their behalf has fairly stat.ed that he would not like to press his cross appeal. In the result, we do uot find any merit in either of the aforesaid ff appeals. W.o would accordingly dismiss them with costs. SEN, J.-I have had the advantage of reading the judgment by my learned brother Jaswant Singh. Since the appeal involves an important • • • I •• • ' • • \ •• COLLECTOR v. HARISINGH (Sen, /.) 189 question afkcting valuation which has heen overlooked by tho High A Court, I would like to say a few words of my own. Normally, this Court does not interfere in appeal with the valuation by the High Court in land acquisition cases, unless the judgment cannot be supported, as it stands, eithor by reason of a wrong application of principles or because some important point in evidence has been overlooked or mis-applied : The Special Land Acquisition Officer, Bangalore v. Adinarayan Setty(') . With respect, I venture to say that the judgment of the High Court cannot be supported by reason of a wrong application of principks. It overlook,,d the fact that there was no discernible basis on which the Additional District Judge could have changed the mode of valuation adopted by thoo Special Land Acquisition Officer treating the land acquired to be agricultural land and in awarding compensation upon the basis as if it were a building site. Indeed, there was no attempt on their part to determine thoo "intrinsic characrer of the land", namely, whether the land acquired should be classified as agricultural laud or not. In the present case, the High Court obviously fell into an error in overlooking the fact that the acquired land situate in village Darogamuda, admeasuring 3.52 acres, was, on the 8th February, 1957 i.e. on the date of the issue of the notification under s. 4(1) of the Act, agricultural land. It was recorded as a raiyati land belonging to the two claimants, Dr. Harisingh Thakur and his brother Vikram Singh Thakur who w're ex-gaontiyas of village Darogamuda. The land was not recorded as abadi as wrongly assumed by the High Court. Perhaps it was misled by the mis-description of the land as abadi in the reference made by the Collector under s. 18 ( l). This is an admitted position between the parties. In response to the notice of admissions and denials of documents served by the claimants, the Collector admitted panchsala khasra for the years 19 50-51 to 1953-54 and kistbandi khatouni for the years 1952-53 and 1953-54. The claimant Dr. Harisingh Thakur, A Wl admits during his crossexamination that till the month of December 1956, the lands were actually under his cultivation and he had reaped the crops before delivering possession of the same on the 17th January, 1957 to the Dis:rict Engineer, Sonth-Eat1tern Railway. He further admits that throughout the land was under cultivation i.e. from the time of his forefathers. In fact, Jujhar Singh NAWl, Assistant Superintendent Land Records, who was at the relevant time a Revenue Inspector, states that th·~ land (l) [1959] Supp. (1) S.C.R. 404. B c D E F G H A B c D E F G H 19 0 SUPREME COURT l\EPORTS [1979] 2 S.C.R. acquired was a paddy field and was surrounded by agricultural lands. That being so, the District Judge; was clearly wrong in treating the land to be ubadi and calculating compensation on the footing of its being a building site. In awarding compensation at a llat rate of Rs. 3,327.87 P. per acre, the Special Land Acquisition Officer took notioo of the fact that the land is situate in village Darogamuda, a suburb of Raigarh, which is a town of great commercial importance, though beyond its nazul perimeter. He also took notiee of the fact that the land abuts tho railway track and there were agricultural fields on two sides. On the other two sides, there •oxisted kutcha hutments of backward classes and a few railway bui:dings. The award of compensation at the rate of Rs. 3,327.87 P. per acre was based on average of sales of lands in recent years as prepared bY Jujhm Singh, Revenue Inspector NAW 1. The Special Land Acquisition Cflicer accordingly observed: "The average value based on the above noted sales comes to Rs. 3,327114/- per acre and in my opinion it truly represents the ayerage market value of lands in this predominantly agricultural locality which has assumed semi-abadi site value due to the constructions of houses mostly by low class people besides a few buildings of Railway Department. It is for this reason that the average value per acre comes to as much as Rs. 3,327 /14/- per acre else the lands in question would have fetched lower pric·~ available in respect of agricultural lands to which class they really belong and stand assessed as such till today." While it is no doubt true, as my learned brother Jaswant Singh has rightly observed, that the statement of average of sales, prepared by Jujhar Singh NA W I, was not admissible in evidence unless the Collector proved the transactions in question, upcn which it was based, there is no denying the fact that the acquired land was nothing but agricultural land and the mode of valuation had necessarily to be upon that basis. Now, if the purpose for which the land was acquired. i.e., for the construction of staff quarters in connection with the doubling of the railway line by the South-Eastern Railway. has no bearing on the question of valuation, the future pcssibilities of the land, which admittedly was agricultural land, lying in the vicinity of Raigarh if applied to the most lucrative use, having r~gard to its the then condition, was very litt:e as a building site. The land was lying undeveloped and undiverted. Unless there was a developm~nt schem~, the land could not • • __ ;1 __ , r •• ' .. • •• COLLECTOR v. HARJSJNGH (Sen, !.) 191 be valued as a building site. The land could, however, be put to that i:ise if there was snch development scheme. At the time of the notification under s. 4( 1), there was no recent building activity near about the land, which was either under cultivation or lying desolate. But as I have already said, the laud could be put to a \xltter use provided it was fully developed as a building site. The claimants were, therefore, entitled to the evaluation of the land as agricultural land with an additional allowanoe being made for its future poteutiality as a building site. I just cannot imagine what could be the utility of the acquired land on a building site, looking to its proximity to the railway track. It would, indeed, be very little. In a reference under s. 18 of the Act, the burden of proving that the amount of compensation awarded by the Collector is inadequate lies upon tho claimant, and he must show affirmatively that the Collector had proceeded upon a wrong basis. The nature and the burden of establishing that he was wrong, depend on the nature of the enquiry held by him. When the proceedings before the Collector disclose that the award was not reasonably supported by the material before him, or when the basis was the application of a 'multiple' which could not be justified on any rational ground, the burden can be discharg.;d by a slight evidence. But that is not the case here. The claimants have led no trustworthy 'ovidenc·c. It is equally well-settled that where the claimant leads no evidence to show that the conclusions reached in the award were inadequate, or, that it offered unsatisfactory compensation, the award has to be confirmed. Upon a compulsory acqllisition of property, the owner is entitled to the value of the property in its actual condition, at the time of expropriation, with all its advantages and with all its possibilities, excluding any advantage du·e to the carrying out of the claim for the purpose for which the property is acquired. In Vyricharla Narayana Gajapatjiraju v. Revenue Divisional Officer Vizagapatnam(') the Privy Council state: : "For tlJ.e land is not to be valued merely by refurence to the use to which it is being put at the time at which the valn•c value has to be determined .... but also by reference to the uses to which it is reasonably capable of being put in the future. It is possibilities of the land and not its realized possibilities that must be taken into consideration." The valUe of tho acquired property, with all its possibilities has to be adjudged on the material on record. (1) 66. I.A. 104. A B c D E F G ll A B c D E F G H ' 192 SUPREME COURT REPORTS [1979] 2 S.C.R. The market price must bB fixed with n.,fcrence to the da:e of the notification under s. 4 irrespective of any trend, if any, for an increase in the value thereof. The basis for determination of the market value of the land within s. 23 (1) (i) of the Act is the value of the land to the owner. Only such transactions would be relevant which can fairly be said to afford a fair criterion of the value of the property as at the date of the notification. That test is clearly not fulfilled in the present case. Clause fifthly in s. 24 interdicts the court from considering any prospective increase in value due to acquisition. Market value of the land acquired has to be fixed with reference to the date of notification under s. 4(1). In Vyrfcharla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam (supra) the Privy Council observed that where the owner is a person who could turn the potentiality of the land into account, it is immaterial that the utilization of the same po~entiality is also the purpose for which the land is acquired. The underlying principle is that a speculative rise in price of land due to acquisition should not be an element which should enter into computation. Sometimes the prices shown in sale deeds executed subsequent in point of time are not the actual prices paid. The sales may be unreal and may not reflect the true value of the land. There always elapses a certain interval between the time when the intention to acquire a certain land first becomes known and the actual notification under s. 4(1) is issued. Here though the notification under s. 4(1) was issued on 8th February, 1957, but the claimants had, in fact, delivered the possession to the District Engineer, South-Eastern Railway on the 17th January, 1957, and were indeed, as it appears from the evidence, aware of the fact that the land was being acquired by the South-Eastern Railway much earlier, i.e., in December, 1956. · In view of this, the prospective rise iu value, if any, has to be kept out of consideration. The principles to determine the quantum of compensation are contained in s. 23 (1) of the Act. The court in fixing the amount has to take into consideration the prevailing market value of the land at the date of the notification under s. 4 (1) and the said market value has to be determined by reference to the price which a willing seller might have reasonably expected for similar property from a willing purchaser. The underlying principle of fixing the market value with reference to comparable sales is to reduce the element of speculation. In a comparable sale, the features are: (i) it must be within a reasonable time of the date of notification under s. 4(1); (ii) it should be a bona fide transaction; (iii) it should be a sale of the land acquired or of the land adjacent to the acquired ; and (iv) it should possess • • __ .JJ-~ f •• ' • • • • COLLECTOR v. HARISINGH (Sen, J.) 193 similar advantages. Before such instances of sales can be considered there must be material evidence either by the production pf the sale deeds or by examining the parties to the deeds or persons having knowledge of the sales, to prove that the transactions are genuine. In the light of these principles, the three sale deeds relied upon by the High Court, Ext. P-14, Ext. P-15 and Ext. P-17, pertaining to the small portions of the acquired land executed by the claimants, c.ould not obvionsly be the basis for the determination of the market value of the land. These sale deeds had clearly been brought into existence by the claimants in quick succession, in an attempt to inflate the price of the land, after they became aware of the proposed acqrns1t1on. Of these, the land covered by the sale deed Ext.P-14, dated 14th December, 1956 executed by Tikam Singh Thakur, i.e., just a month before the delivery of the possession, shows a sale of a pM measuring 4,800 sq.ft. to Dr. Dhirendra Chandra Das, AW 2, for a price of Rs. 2,000/-. The rate works out to about 42P per sq. ft. It evidently could not afford a fair criterion of the value of the property on the date of the notification under s. 4(1). Dr. Das aclmits that he is in Railway service and when he purchased the land he knew that it was being acquired by the South-Eastern Railway. No doubt Dr. Das is a willing friend of Dr. Harisingh Thakur prepared to lend a belpiiig hand but, by no stretch of imagination, could he be treated to be a willing purchaser, in the true sense of the term. Though Dr. Das asserts that he had purchased the land for building a house, he admits that he did not construct upon it because he would have been required to invest considerable money for levelling the land making it fit to be utilised as a building site. This transaction indubitably does not appear to be a real sale and could not furnish any guide for determination of 1he true market value. I am afraid, the other two sale deeds, Ext.P-15 dated 19th December, 1956 and Ext.P-17 dated 21st February, 1957 executed by Dr. Harishingh Thakur, by which he sold 300 sq. ft. of the acquired land to Jhallu Dani. AW 13 for Rs. 150 /- and 280 sq. ft. to Baido, A B c D E F AW 15, for Rs. 200/- were, in fact, fictitious sales -:fleeted by him G after delivery of possession to the South-Eastern Railway. The tran~a ctions speak for themselves. Indeed, Ext. P-17 was executed by him after issue of the notification under s.4(1 ). The first sale was effected by the claimants to show the price of the land to be 50P per sq. ft. They were evidently not satisfied by this and, therefore, brought the other sale deed into existence, a few days after the notifi- ~ H cation, showing the rate to be about 72P per. sq. ft. It is needless to stres:> that such fictitious and unreal transactions which are but A B c 194 SUPREME COURT REPORTS [1979] 2 S.C.R. specnlative in Bature could not be taken into acconnt by the High Court at all. In Raglwbans Narain Singh v. The VIiar Pradesh Government(") this Court quoted with approval the following passage from one of its earlier decision in N. B. Jeajabhoy v. The District Collector, fhana,(•) where it was said : "The question therefore turns upon the facts of each case. In the context of building potentiality many question> will have to be asked and answered : whether there is pressure on the land for building activity, whether the acquireJ land is suitable for building purpose, whether the extension of the said activity is towards the land acquired, what is the pace of the progress and how far the said activity has extended and within what time, whether buildings have been put up on the lands purchased for building purposes, what i• the distance between the built in land and the land acquired and similar other questions will have to b;: answered. D It is the overall picture drawn on the said relevant circumstances that affords the solution." E F G H In Raghubans Narain Singh's case (supra) there \\as evidence to tile effect that there was a school building near the acquired land, that the land abutted on the road and that some houses had been built on the opposite side of the road. It was nevertheless held by this Court that all this did not constitute evidence of building potentiality. It was pointed out that there should be evidence, on the record, 'of building activity of a substantial nature, being carried on in the neighbourhood of the acquired land, at about the time when the notification \Vas issued'. There is complete absence of such evidence in this case. It is beyond doubt that the acquired land was agricultural land, and had not been diverted for non-agricultural purposes. Indeed, the claimant, Dr. ·Harisingh Thakur had himself admitted the land to b,, agricultural land. The land is on the outskirts of Raigarh Lown but that itself does not show that the land had a potential value for building purposes. It was for the claimants to show that at the relevant time there was a tendency of the town to develop in that direction and that prior to the acquisition new buildings had been constructed in the neighbourhood. Topography of the acquired land which abuts the railway track is given by Jujhar Singh, NA W 1, the then Revenue Inspector, who states that actually paddy used to be grown on the land. To the north of this land, there was cultivation. Beyond it, there was a 10 ft. (!) [1967] I S.C.R. 489. (2) C.A. Nos. 313 to 315 of 1965 decided on August 30, 1965. • • ' • ' • • • '\ •, COLLECTOR v. HARJSINGH (Sen, J.) 195 broad pucca road. About three furlongs way from the land was the house of Ambalal. About one and a quarter miles away there was a skin godow::i. In the east, there were smali huts. Beyond them, in the east, at a distance of about half a furlong, there was the house of Jairamvalji. In the west, about a furiong away, there was an old l!iungalow. At about the same distance, there is '.he burial ground. In between and all around, there were agricultural fields. That is the total evidence of the case. On this evidence it cannot be said that valuation should be made on the basis of tl!e potentiality of the land as building site. In the 2bsence of comparable sales, the only other alternative to adopt is the capitalised value. Compensation in respect of the agricultural land should be allowed on the basis of 20 years' purchase. The capitalisation basis cannot, however, be accepted in a case where, as in the instant case there is no evidence of the prO'fits yielded from the land. A B c I would, therefore, for these reasons allow the appeal of the State D of Madhya Pradesh. · It is with reluctance that I have written this separate opinion. There has never h~en a public undertaking in this country-Governmental, Municipal, city or industrial, but that the land-holder has generally secured anything from four to forty times as much for the land as its agricultural price, i.e., many times its real value. This result unfortunately springs from a general tendency of District Judges in hearing a reference under s.18 of the Land Acquisition Act, 1894, to assume that purely agricultural lands, merely by their proximity to a city or town, become endowed with 'special adaptability' as a building •ite. While it is not suggested that unfairly low value should be offered, on the other hand the temptation to over-generosity must b~ equally resisted. Such generosity at the public expense reacts against the development and against the prosperity of the country and imposes an unnecessary burden on the, taxpayer. Per Curi~m In accordance with the opinion of the majority, the appeals are dismissed with costs. N.V.K. Appeals dismissed. E F G r