2017 (9) TMI 2025 - SCH - Indian Laws

Circle rates is made the basis for determination of the compensation - It was submitted by learned counsel appearing for the parties that it would be appropriate to permit the parties to adduce additional evidence. The High Court may permit the parties to adduce the evidence before the Reference Court and call for the finding of the Reference Court. HELD THAT - The circle rates for purpose of stamp duty could not have been made the basis for determining the market value. Resultantly, the judgment passed by the High Court is set aside - The appeals are allowed and the matters are remitted to the High Court for deciding afresh.

Summary

Issues:
1. Use of circle rates in determining compensation for land acquisition.

Analysis:
The Supreme Court, in a judgment delivered by Hon'ble Mr. Justice Arun Mishra and Hon'ble Mr. Justice Mohan M. Shantanagoudar, addressed the issue of using circle rates as a basis for determining compensation in land acquisition cases. The Court set aside the impugned judgment, emphasizing that circle rates, which are primarily used for stamp duty purposes, cannot be solely relied upon to determine the actual market value of the property. The Court highlighted that the circle rates may vary based on the nature and situation of the land, and their determination should involve a scientific and methodical assessment by a statutory committee. The judgment of the High Court was deemed unsustainable due to the lack of evidence showing a scientific basis for the circle rates used.

In referencing the case of Lal Chand vs. Union of India & Anr., the Court reiterated the importance of expert committees constituted under State Stamp Laws for determining guideline market values. These expert committees follow a detailed procedure and provide for a scientific assessment of market value in different areas. The Court emphasized that the circle rates used in the case did not meet the criteria of being determined by a statutorily appointed committee through a scientific basis, rendering them irrelevant for determining market value. The Court highlighted the need for expert evidence to establish market value in land acquisition cases.

Additionally, the Court referred to the case of Government (NCT of Delhi) & Ors. v. Ajay Kumar & Ors., where it was held that circle rates could not be the sole criteria for fixing market value in land acquisition cases. The Court emphasized the comprehensive mechanism provided by the law for determining compensation, and the importance of objective criteria in the process. It was clarified that the power to determine market value cannot be controlled by judicial fiat, and each case must be decided based on objective factors.

Consequently, the Supreme Court allowed the appeals, remitting the matters to the High Court for fresh consideration. The Court emphasized that circle rates for stamp duty purposes cannot be the sole basis for determining market value in land acquisition cases, and parties should be allowed to adduce additional evidence to assist in the determination of compensation. The judgment underscored the need for a thorough and objective assessment of market value in such cases, ensuring fairness and accuracy in compensation calculations.