1994 (10) TMI 329 - SC - Indian Laws

Summary

Issues Involved:
1. Determination of market value for acquired land.
2. Admissibility and evidentiary value of Basic Value Register.
3. Potential value of land for building purposes.
4. Errors in the High Court's determination of market value.
5. Compensation calculation under the Land Acquisition Act, 1894.

Issue-wise Detailed Analysis:

1. Determination of Market Value for Acquired Land:
The primary issue was to ascertain the market value of the acquired lands as of the respective dates of notification. In the first case, the notification was published on June 16, 1983, for 9.47 acres, and in the second case, on March 23, 1985, for 14.10 acres. The Land Acquisition Officer (LAO) initially awarded compensation at Rs. 40,000/- per acre. The Subordinate Judge, Eluru, enhanced the market value to Rs. 105/- per sq. yard in the first case and Rs. 70/- per sq. yard in the second case. The High Court further enhanced the market value to Rs. 150/- per sq. yard. However, the Supreme Court found both the Reference Court and the High Court committed manifest errors of law in their assessments.

2. Admissibility and Evidentiary Value of Basic Value Register:
The Reference Court relied on the Basic Valuation Register maintained by municipalities under Section 47A of the Stamp Act to determine compensation. The Supreme Court, referencing Jawajee Nagnatham v. Revenue Divisional Officer, held that the Basic Value Register is maintained for fiscal purposes and cannot form the foundation for determining compensation under Section 23(1) of the Land Acquisition Act. The Court emphasized that market value should be based on bona fide sales between willing buyers and sellers, not on fiscal documents.

3. Potential Value of Land for Building Purposes:
The claimants argued that the lands had potential value as house sites. The Supreme Court clarified that potential value must be established with evidence of market conditions and demand for such use at the time of acquisition. The Court noted that the lands were agricultural with no developmental activities in the neighborhood at the time of notification. Therefore, the fixation of the market value should be based on their status as agricultural lands.

4. Errors in the High Court's Determination of Market Value:
The Supreme Court found that the High Court erred in relying on small extents of land sales (e.g., Ex. A.10) to determine the market value for large tracts of land. The Court emphasized that small plot sales do not provide a satisfactory basis for large area acquisitions. The sales relied upon were not bona fide and appeared to be manipulated to boost market conditions. The Court excluded these documents from consideration, finding no other credible evidence to support the High Court's valuation.

5. Compensation Calculation under the Land Acquisition Act, 1894:
The Supreme Court determined the market value at Rs. 65,000/- per acre for the first case and Rs. 80,000/- per acre for the second case. The claimants were entitled to additional compensation under Section 23(1-A) from the date of notification till possession, solatium under Section 23(2) at 30%, and interest under Section 28 at 9% for one year from possession and 15% thereafter until deposit into the court. The Court set aside the award and decree of the Reference Court and the High Court, directing the parties to bear their own costs.

Conclusion:
The Supreme Court allowed the appeals, recalculating the compensation based on agricultural land value and excluding manipulated sales evidence. The judgment emphasized the need for bona fide sales evidence and rejected the use of fiscal documents for compensation determination.