# DADO YOGENDRENATH SINGH & ORS v. THE COLLECTOR, SEONI January 25, 19.77

- **Citation:** [1977] 2 S.C.R. 757
- **Court:** Supreme Court of India
- **Decided:** 1977
- **Case number:** Civil Appeal No. 2128 of 1969
- **Bench:** H. R. Khanna, R. S. Sarkaria, Jaswant Singh
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/dado-yogendrenath-singh-ors-v-the-collector-seoni-january-25-19-77-7105
- **Pages:** 5

## Headnote

The Land Acquisiton Act, 1894, S. 23(1)--Considerations for determination
of compensation, scope of.
Responding to a notice under s. !I of the Land Acquisiton Act, 1894, the
appellants filed a claim for Rs. 1500/- per acre at which .rate the adjoining lands
were sold.
The Collector awarded compensation at the rate of Rs. 450/- per
acre.
At the instance of the appellants under s. 18 of the Act, the matter was
referred to the District Judge who enhanc_ed the compensation to Rs. 11,000/-
per acre.
An appeal by the Collector was allowed by the High Court on the
ground that the District Judge had acted -contrary to the mandate contained in
~. 25(1) of the Act, by awarding compensation in excess of tl)e amount claimed.
The appellants contended that their land had building potentiality and its value
was substantially more than Rs. 500 /- per acre, which had b~en paid by them
to the Government as diversion charges for permission to use 'the adjoining land
for building houses.
Allowing the appeal by certificate, the Court,
HELD : The circumstance that ·the appellants had voluntarily paid Rs. 500/-
per acre as diversion charges, for laying out __ the adjQinjp.g land into_ plots as
building sites, taken in ,conjunction with tne oflier facts, namely, that the land
in question is within the municipal limits and is located just .on the edge of an
inhabited locality of the town, 'having other buildings in the immediate vicinity,
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show that its potential value as building sites is much more than the rate of
RB. 450/- per acre, awarded by the Collector and t)le J:Iigh Court [760 C-D, 761
A-Bl

## Text

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757
DADO YOGENDRENATH SINGH & ORS.
v.
THE COLLECTOR, SEONI
January 25, 19.77
[H. R. KHANNA, R. S. SARKARIA AND JASWANT SINGH, JJ.]
The Land Acquisiton Act, 1894, S. 23(1)--Considerations for determination
of compensation, scope of.
Responding to a notice under s. !I of the Land Acquisiton Act, 1894, the
appellants filed a claim for Rs. 1500/- per acre at which .rate the adjoining lands
were sold.
The Collector awarded compensation at the rate of Rs. 450/- per
acre.
At the instance of the appellants under s. 18 of the Act, the matter was
referred to the District Judge who enhanc_ed the compensation to Rs. 11,000/-
per acre.
An appeal by the Collector was allowed by the High Court on the
ground that the District Judge had acted -contrary to the mandate contained in
~. 25(1) of the Act, by awarding compensation in excess of tl)e amount claimed.
The appellants contended that their land had building potentiality and its value
was substantially more than Rs. 500 /- per acre, which had b~en paid by them
to the Government as diversion charges for permission to use 'the adjoining land
for building houses.
Allowing the appeal by certificate, the Court,
HELD : The circumstance that ·the appellants had voluntarily paid Rs. 500/-
per acre as diversion charges, for laying out __ the adjQinjp.g land into_ plots as
building sites, taken in ,conjunction with tne oflier facts, namely, that the land
in question is within the municipal limits and is located just .on the edge of an
inhabited locality of the town, 'having other buildings in the immediate vicinity,
-
show that its potential value as building sites is much more than the rate of
RB. 450/- per acre, awarded by the Collector and t)le J:Iigh Court [760 C-D, 761
A-Bl
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2128 of 1969.
From the Judment and Order dated 4th May,
1968
of
the
Madhya Pradesh ;High Court .in First App~al No. 88/67.
M. S. Gupta for the Appellants.
Ram Panjwanii and H. S. Parihar for Respondent.
The Judgment of the Court was delivered by
SARKARIA, J.
This appeal on certificate is directed
against
a
judgment, dated May 4, 1968, of the High Court of Madhya Pradesh.
It arises out of these facts :
The appellants were owners of 7.35 acres of land being a part of
Khasra No. 47 /1 ·.in the area of village Manglipeth District Seoni,
Madhya Pradesh.
On November 4, 1963, a notification under s. 4
read·with Sub-s. (1) of s. 17 of the Land Acquisition Act, 1894 (to
be hereinafter referred to as the Act) was published in the Government Gazette stating that this land was needed by the State Government for implementation of Seoni Water Supply Scheme. The declaration under s. 6 of the Act was published on December 18, 1963, and
notices· under s. 9 of the Act were issued by the Collector on December :28, 1963.
In response to that notice, the appellants filed a claim
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758
SUPREME COURT REPORTS
[1977] 2 S.C.R.
that they were willing to accept compensation in respect of this land
at the rate of Rs. 1500 /- per acre, "as the lands adjoining this land
and situated in a lesser advantageous position are sold at this rate".
The Collector made his award on August 17, 1964,
whereby he
awarded compensation for this land at the rate of Rs. 450/- per acre.
The total amount awarded for this piece of land after adding solatium
at the rate of 15%, was Rs. 2,904/-. He also awarded interest at
the rate ot 4% from September 19, 1964, on which date, the Collector had taken over possession of the land.
D1ssafo,fied with the Collector's award, the appellants made
an
applic3tion under s. 18 of the Act for reference to the District Court
for enhancement of the compensation.
The Collector accordingly
made a reference.
The Additional District Judge, Seoni, who heard
the reference, enhanced the compenstion to Rs. 11,000/- per acre.
In this way, after adding solatium, he awarded to the
appellants,
herein, a total amount of Rs. 80,850/- together with interest at the
rate of 6%.
Against that judgment, dated May 2, 1967, of
the Additional
Dist.net Judge, an appeal was preferred by the Collector, to the High
Court.
The High Court accepted the appeal, set aside the award of
the Additional District Judge and restored that of the Collector. The
High Court however, granted a certificate under Art 133 of the Constitution.
·
The first contention of Shri M. S. Gupta,
appearing
for
the
appellants, is that the appeal filed in the Wgh Court
against
the
award of the Additional District Judge w.as not an appeal in the eye
of law inasmuch as the Collector, who filed it, was not competent to
do so.
It is stressed that no appeal was filed by the State as such,
and consequently, the incompetent appeal filed by the Collector should
have been dismissed summarily on this preliminary ground without
entering upon the merits.
This objection was raised before the High
Court,
also.
The
High Court fully considered it against the background of this case,
and found no substance in it.
In the interests of justice we are not
disposed to interfere with that finding.
On merits, we find, in agreement with the High Court, that the
District Judge was palpably wrong inasmuch as he awarded compensation at a rate far higher than what had been claimed by the appellants themselves, pursuant to the notice under s. 9 of the Act.
The
learned Additional District Judge acted contrary to the legislative
mandate contained in s. 25 ( 1) of the Act, according to which,
the
Court "shall not award" compensation to an applicant in excess of the
amount claimed by him pursuant to any notice under s. 9.
The only question that remains for our decision. is, whether the
High Court was right in scaling down the compensation to Rs. 450/-
per acre?
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UNION v. :BHANUDAS K'. GAWDE (Jaswant Singh, J.)
7 59
Mr. Gupta contends . that the High Court was no~ right i.n hold-
.ing that there was no ex1dence to show that the land m question had
. potential value as building sites.
It is submitted that the High Court
has simply ignored that evidence.
In this connection Counsel has
referred to the evidence on record showing that the appellants had
before the acquisition, paid diversion charges to the Government, at
the rate of Rs. 500/- per acre in respect of the adjoining land, for
bringing it into use as building sites.
Counsel has further rcferr~d
to the evidence showing that the land in question is close to a built
.up quarter of the town, and is within the Municipal limits.
Shri Ram Pahjwani, appearing for the Respondent, submits that
this evidence was much too insufficient to establish the potential value
d the land as building sites, because the existing buildings in the
vicinity of this land are old buildings, and the deposit of Rs. 500/-
.as diversion charges for the adjacent land made by the appellants,
was only a speculative investment with an eye on the distant future
In support of his contention, Shri Panjwani has referred to the decision
of this Court in R. N. Singh v. U.P. Government(').
ln our opinion, there is evidence on the record which unmistakably shows that from the view-point of a willing purchaser, at the relevant time, this land had potential value as building sites.
Firstly, it
was admitted even by Gokul Prasad who was examined by the Respondents as their Witness No. 1, that in front of the land in question
there are buildings which are being used as the office of the Range
Officer and as residential quarters for the employees of that Department.
Adjoining the ·Range Office is the house or Dewan Najaf Ali
1n which the Additional District Judge was
residing.
The witness
further admitted that the land in dispute abutt~ on Seoni-Chhindwara
Road.
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Dadu Yogendra Nath Singh, appellant, testified in the
witnessstand that" apart from the office and the quarters of the Forest Department, there were other buildings also, near this land.
At a short distance .was the bun&alow of Sh!i Bhargava, Barrister.
The Municipal
Octro1 Post was ad1acent to this land.
The land in question is within
the Municipal limits of Seoni.
The appellant further stated that he
intended to parcel out this land into plots and sell the same as build-'
in1 sites and that was why for the adjacent land, he had obtained for
t~~t purpOlo, the permission of the Government by depositing diverilon charges at the rate of Rs. 500(- per acre.
He added that negotiations for tho sale of two plots had already been completed at the
rate of 12 annas per foot.
He also cited other instances of sales of
la11.d in the vicinity at rates ranging from 4 annas per foot to 6 annas
per foot.
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The oral evigence of Dadu Yogendra Nath Singh with regard to·
!he fact that the adjoining Jang had been laid out into plots for buildmg purpose~, receives full corroboration from unimpeachable docu-
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.,mentary evidence on record,. which shows that the . appellants
had
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SUPREME CO~RT REPORTS
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b.efore this acquisition, in 1963, made an application to the Sub-Divisional Officer, Seoni, for permission to bring 6.16 acres of
agricultural land out of Kh. No. 47 /1, "in non-agricultural use viz.,
for
construction of houses".
The order of the officer concerned was that
~uch permission was granted to him on depositing diversion charges
m respect of that area at the rate of Rs. 500/- per acre. It is significant to note that this piece of 6.16 acres was also a part of Khasra
No. 47 /1, out of which Khasra, the land, admeasuring 7.35 acres, is
in question.
This circumstance unerringly indicates that the land in
question was suitable for being used as building sites, and had for that
purpose, a potential value substantially in excess of Rs.
500/-
per
acre.
The High Court has not at all discussed this evidence.
It is difficult to accept the argument advanced on behalf of the
respondent that the appellant had paid Rs. 500/- per acre as diversion
charges for the adjacent land, merely as speculative business in the
hope of making money in the remote future.
No prudent person
would make such an investment if there was no reasonable chance of
a good return over that investment in the present, or immediate future.
In our opinion this circumstance coupled with the other .facts, namely,
that the land-in question is within the Municipal limits and is located
just on the edge of an inhabited locality of the town, having other
buildings in the immediate vicinity, was sufficient to establish its
potential value as building sites.
The observations made by this Court in R. N.
Singh v.
U.P.
Government (supra) do not advance the case of the respondent. In
that case, Shelat J. quoted these observations from an earlier decision,.
in N. B. Jeejabhoy v. The District Collector, Thana (C.A. Nos. 313
to 315 of 1965 decided on August 30, 1965) :
"A vendor willing to sell his land at the market value will
take into consideration a particular potentiality or special
adaptability of the land in fixing the price.
It. is not the
lincy or the obsession of the vendor that enters the market
ia]ue, but the objective factor namely, whether the
said
potentiality can be turned to account within a reasonably
near future.
The question therefore turns upon the facts of
each case.
In the context of building potentiality many
questions will have to be asked and answered, whether there
is pressure on the land for building activity,
whether
the
acquired land is suitable for building purposes, 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 lands purchased for building purposes, what is the distance between the built-in-land and the
land acquired and similar other questions will have to be
answered. It is the over-all picture drawn on the said
relevant circumstances that affords the solution."
What has been extracted above are broad guidelines
and
not
immutable absolutes.
The essence of the whole thing is in tl1e sentence which has been underlined. It shows that in the ultimate
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DADU YOGENDRENATH v. COLLECTOR (Sarkaria, !.)
· 161
analysis, the question, whether or not a land has potential value as
building site, 1s primarily one of fact.
In the present case, the circumstance that the appellants had voluntarily paid Rs. 500/- per acre
as diversion charges, for laying out the adjoining land into plots as
building sites, was of a clinching character, and taken in conjunction
with the o~her facts, noticed above, conclusively showed that its potential value as building sites was much more than the rate of Rs. 450/-
per acre awarded by the Collector and the High Court.
In their application dated 17-10-1964, under s. 18 of the Act, the
appellants sta·,ed that similar land in the immediate vicinity had been
sold at the rate of Rs. 1,250 /- per acre and another plot at the rate
of Rs. 1,350/- per acre.
These lands are close to the area for which
they had paid the diversion charges at the rate of Rs. 500/- pc,-r acre.
They filed a map also, showing the location· of those lands.
On an
over-all view, after taking into account the potential value of the land,
we think it will be reasonable to award compensation to the appellants
at the ra'..e of Rs. 1,250/- per acre with interest at 6% per annum till
payment, from the date on which the possession was taken ewer by
the Collector.
The appellants shall also be entitled to solatium at
15% on the compensation amount awarded for the land.
Accordingly, we allow the appeal with proportionate costs
and
modify the decree of the High Court to the extent indicated above.
M.R.
Appeal allowed.
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