Holding

The Supreme Court held that the High Court's determination of market value was correct and the appellants were not prejudiced, leading to dismissal of the appeals.

Summary

The appellants, owners of agricultural land in Ghewra village, challenged the compensation awarded for land acquired for a bottling plant, arguing that the market value fixed by the High Court was too low and that three sale deeds had been ignored. The High Court, relying on its earlier decision in Ranjit Singh v. Union of India, fixed market values for categories A, B and C at Rs.26,775, Rs.24,775 and Rs.22,775 per bigha respectively. The Supreme Court examined the principles for determining market value under the Land Acquisition Act, emphasizing factors such as location, size, proximity to roads, and comparable sale transactions. It found that the sale deeds presented were either from different villages or not comparable to the acquired land, and that even assuming appreciation, the value fixed for category C exceeded the deed price. Consequently, the Court held that the appellants were not prejudiced and that there was no error in the High Court's determination, dismissing the appeals.

Issues considered

What principles govern the determination of market value of land acquired under the Land Acquisition Act, 1894?
Whether the High Court erred by not considering the three sale deeds offered by the appellants as evidence of market value.
Whether the appellants suffered prejudice due to the market value fixed by the High Court.
Whether reliance on the earlier Ranjit Singh decision was appropriate in the present case.

Legislation cited

Land Acquisition Act, 1894s. 18, s. 23(1), s. 4(1)

Subjects

Land acquisitionCompensationMarket value determinationLand Acquisition Act 1894Section 4Reference courtCategory A B CSale deedsPrejudiceSupreme Court

Judgment

[2009] 12 S.C.R. 529

-~
BHAGAT SINGH & ORS. A
v.
UNION OF INDIA & ANR.
(CIVIL Appeal No. 7209 of 2004)
AUGUST 4, 2009
B
[S.B. SINHA AND CYRIAC JOSEPH, JJ.]

___.... Land Acquisition Act, 1894 - Acquisition of land for public
purpose - Determination of compensation - Principles
discussed - Held: On facts, landowners were not shown to c
have been prejudiced in any manner by the determination
made by High Court - No reason for interference by Supreme
Court.

Land acquired for public purpose was categorized D
~ into three categories 'A', '8' and 'C'. The High Court,
having regard to its earlier decision rendered in Ranjit
Singh's case*, where the lands were acquired for the same
purpose and under the same Notification, determined
market value for the three categories at Rs.26,775/-;
E
Rs.24,7751- and Rs.22,775/- respectively.

--+ In appeal to this Court, it was contended that the
High Court committed serious error insofar as it did not
take into consideration three sale deeds (marked as Exts.
A-5 to A-7) F

Dismissing the appeals, the Court

HELD: 1.1. The determination of the market value of
the land acquired, indisputably would depend upon a
~ ~ large number of factors, including the nature and quality G
thereof. The norms which are required to be applied for
determination of the market value of the agricultural land
and homestead land may be different. In given cases,
location of land and in particular, closeness thereof from
529 H
530 SUPREME COURT REPORTS [2009] 12 S.C.R.

A any road or high-way would play an important role for I>-.

determination of the market value wherefor belting
system may in appropriate cases have to be resorted to.
The position of the land, particularly in rainy season,
existence of any building etc. also plays an important
B role. A host of other factors including development in and
around the acquired land and/or the potentiality of the
development will have a bearing on determination of the
value of the land. [Para 9] [534-D-F]

1.2. Determination of the market value of the land may
c also depend upon the facts and circumstances. of each
case, amongst them, however, would be the price of land,
amount of consideration mentioned in a deed of sale
executed in respect of similarly situated land near about
the date of issuance of Notification under Section 4(1) of
D the Land Acquisition Act, 1894; in the absence of any
such exemplars the market value can be determined on
yield basis or in case of an orchard on the basis of
number of fruit bearing trees. It is also well settled that
for price determination purposes, the courts would be
E well advised to consider the positive and negative
factors. [Para 10] (534-G-H; 535-A-B]

Viluben Jhalejar Contractor v. State of Gujarat (2005) 4
SCC 789; Union of India v. Pramod Gupta (2005) 12 SCC
F 1; Ranvir Singh v. Union of India (2005) 12 SCC 59
Karimbanakka/ Sulaiman (dead) by L.Rs. v. Special Tahsildar
for K.A.K.P.l.P. (2004) 13 SCC 643 and Basant Kumar v.
Union of India (1996) 11 SCC 542, referred to

2.1. In the present case, the High Court proceeded
G to determine the market value of the land keeping in view
its earlier decision in Ranjit Singh*. A Special Leave
,.. .
Petition filed against the said order stood dismissed in
limine. In absence of any material brought on record, it
is difficult to disagree with the High Court's opinion
H
BHAGAT SINGH & ORS. v. UNION OF INDIA & ANR. 531

·~ particularly when the aUention of this Court was not A
drawn to any evidence that the lands in the case of Ranjit
Singh was inferior in character vis-a-vis the lands
acquired in the present case or that some other additional
materials were brought on record in the present case so
as enable this Court to take a different view. [Paras 6 and B
7] [533-G-H; 534-A-B]

2.2. So far as the three deeds of sale relied upon by
----.( the appellants-landowners are concerned, Exts.A-6 and
A-7 were in respect of land situated in two different
villages while Ext.A-5 pertains to the village in question
c
wherein the land was stated to have been sold at
Rs.22,000/- per bigha. The attention of this Court was not
drawn to any discussion made either by the Reference
Court or any other evidence brought on record to
establish that the land under Ext.A-5 was similar to the D
lands under acquisition in the appeals in question. It was
also not shown to which category the land sold in terms
of the sale deed Ext. A-5 would fall. Even assuming that
some appreciation has taken place, the market value of
the land, even for 'C' category has been fixed at E
Rs.22,775/- per bigha; as such appellants-landowners
were not prejudiced in any manner. [Para!:\ 8 and 12] [534-
-+
C; 539-C-E]

*Ranjit Singh v. Union of lndi$, 48 (1992) DLT 138, F
referred to.
Case Law Reference:
48 (1992) DLT 138 referred to Para 3
(2005) 4 sec 789 referred to Para 10 G
.~

(2005) 12 sec 1 referred to Para 11
(2005) 12 sec 59 referred to Para 11
(2004) 13 sec 643 referred to Para 11 H
532 SUPREME COURT REPORTS [2009] 12 S.C.R.

A (1996) 11 sec 542 referred to Para 11

CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7209 of 2004.

From the Judgment & Order dated 07.11.2002 of the High
B Court of uelhi at New Delhi in R.F.A. No. 240 of 1992.

WITH
C.A. No. 7210 of 2004.

C Somvir Singh Deswal, M.P. Shorawala, for the Appellants.

S.P. Singh, Krishna Kumar, Rekha Pandey, Asha G. Nair,
Gargi Khanna, Sanjeev Kumar Bhardwaj, Anil Katiyar, for the
Respondents.
D The Judgment of the Court was delivered by

S.B. SINHA, J. 1. Appellants were owners of the lands
-
,sftuate in village Ghewra. The said lands were acquired for a
public purpose, namely construction of LP .G. Bottling Plant.
E Notification under Section 4 of the Land Acquisition Act, 1894
(for short 'the Act') was issued on 18th March, 1985 in terms
whereof, compensation @ Rs.14,000/- ; Rs.12,000/- and
+
Rs.10,000/- per bigha was offered categorizing the acquired
lands in three categories viz. 'A', 'B' and 'C'.
F
2. Applications for reference in terms of Section 18 of the
Act having been made, the Reference Court determined the fair
market value at Rs.23,970/-; Rs. 21,970/- and Rs.19,970/- per
bigha respectively having regard to categorization by the Land
G Acquisition Collector.

3. Being dissatisfied with the said judgment the appellants
filed App~als before the High Court claiming compensation at •
the rate of Rs.40,0001- per bigha. However, a Division Bench
of the High Court, having regard to its earlier decision rendered
H
BHAGAT SINGH & ORS. v. UNION OF INDIA & ANR. 533
[S.B. SINHA, J.]
.~ in Ranjit Singh vs. Union of India reported in 48(1992) DLT A
138, where the lands were acquired for the same purpose and
under the same Notification, determined the market value at
Rs.26,.775/- ; Rs.24,775/- and Rs.22,775/- per bigha for
categories 'A', 'B' and 'C' respectively.
B
4. The contention raised before us is that the High Court
committed a serious error in passing the impugned judgment
in so far·as it three sale deeds which were marked as Exts. A-
5 to A-7 had not been taken into consideration. The details of
the said sale deeds are as under :-
c
"(i) Vide Ex.A-5, 2 Bigha 1 Biswas land in village Ghewra
was sold for Rs.45,000/- i.e. around Rs.22,000/- per Bigha
as on 15.10.81"

(ii) Vide Ex.A-6, 2 Bigha 13 Bisws land was sold in village D
"+ Tikri Kalan for Rs.42,000/- i.e. Rs.25,500/- approx. per
big ha.

- (iii) Vide Ex.A-7, 12 Biswas land in village Tikri was sold
on 23.10.81 for Rs.25,000/- i.e.@ Rs.41,650/- per bigha
approx. E

The appellants furthermore relied on a purported Lok
-+ Adalat Award wherein the market value of the similarly situated
land was fixed at Rs.22,000/- per bigha.
F
Our attention has also been drawn to a document
purported to be showing the Market Price of Delhi Agricultural
Lands.

5. The High Court, as noticed above, has proceeded to
determine the market value of the land keeping in view its earlier G
~ -A
decision in Ranjit Singh (supra).
,.
6. A Special Leave Petition being No.3211 of 1993 was
filed by Ranjit Singh against the said order which stood
dismissed in limine on 19th April, 1993. H
534 SUPREME COURT REPORTS [2009] 12 S.C.R.

A h
7. In absence of any material brought on record, it is difficult
to disagree with the High Court's opinion particularly when our
attention has not been drawn to any evidence that the lands in
the case of Ranjit Singh was inferior in character vis-a-vis the
lands acquired in the present case or that some other
B additional materials have been brought on record in the present
case so as enable this Court to take a different view.

8. So far as the three deeds of sale relied upon by the
appellants are concerned, we may notice that Exts.A-6 and A-
7 were in respect of land situated in two different villages. Ext.A-
c 5 pertains to the village in question wherein the land was stated
to have been sold at Rs.22,000/- per bigha.

9. The principal question which arises for our consideration
is what principle should be applied for determining the market
D value of the land. It is now a well settled principle of law that
the determination of the market value of the land acquired,
indisputably would depend upon a large number of factors,
-
including the nature and quality thereof. The norms which are
required to be applied for determination of the market value of
E the agricultural land and homestead land may be different. In
-
given cases location of land and in particular, closeness thereof
from any road or high-way would play an important role for
determination of the market value wherefor belting system may
in appropriate cases have to be resorted to. The position of
F the land, particularly in rainy season, existence of any building
etc. also plays an important role. A host of other factors including
development in and around the acquired land and/or the
potentiality of the development will have a bearing on
determination of the value of the land.
G 10. Determination of the market value of the land may also " 1

depend upon the facts and circumstances of each case, ...
amongst them, however, would be the price of land, amount of
consideration mentioned in a deed of sale executed in respect
of similarly situated land near about the date of issuance of
H
BHAGAT SINGH & ORS. v. UNION OF INDIA & ANR. 535
[S.B. SINHA, J.]
,-.1i Notification under Section 4(1) of the Act ; in the absence of A
any such exemplars the market value can be determined on
yield basis or in case of an orchard on the basis of number of
fruit bearing trees. It is also well settled that for price
determination purposes, the courts would be well advised to
consider the positive and negative factors, as has been laid B
down by this Court in Viluben Jhalejar Contractor vs. State of
Gujarat [(2005) 4 SCC 789], namely :-
Positive factors Negative factors
-----'<
(i) Smallness of size (i) Largeness of area
c
(ii) Proximity to a road (ii) Situation in the interior
at a distance from the
road
(iii) Frontage on a road (iii) Narrow strip of land with
very small frontage D
compared to depth
(iv) Nearness to developed (iv) Lower level requiring
the area the depressed portion to
be filled up
(v) Regular shape (v) Remoteness from E
developed locality
-+ (vi) Level vis~a-vis land (vi) Some special under
acquisition disadvantageous
factors whichwould
deter a purchaser F

(vii) Special value for an owner
of an adjoining property to
whom it may have some
very special advantage. G-
.~
11. This Court in Union of India v. Pramod Gupta, [(2005)
12 SCC 1], on the question of determination of market value
opined :-

"24. While determining the amount of compensation H'
536 SUPREME COURT REPORTS [2009] 12 S.C.R.

A payable in respect of the lands acquired by the State, the ,, '

market value therefor indisputably has to be ascertained.
There exist different modes therefor. ...
25. The best method, as is well known, would be the
amount which a willing purchaser would pay to the owner
B
of the land. In absence of any direct evidence, the court,
however, may take recourse to various other known
methods. Evidences admissible therefor inter alia would
be judgments and awards passed in respect of
acquisitions of lands made in the same village and/or
c neighbouring villages. Such a judgment and award, in the
absence of any other evidence like the deed of sale, report
of the expert and other relevant evidence would have only
evidentiary value.

D 26. Therefore, the contention that as the Union of India was
a party to the said awards would not by itself be a ground
to invoke the principles of res judicata and/or estoppel.
Despite such awards it may be open to the Union of India
to question the entitlement of the respondent claimants to
E the amount of compensation and/or the statutory limitations
in respect thereof. It would also be open to it to raise other
contentions relying on or on the basis of other materials ,__
brought on record. It was also open to the appellant to
contend that the lands under acquisition are not similar to
the lands in respect whereof judgments have been
F
delivered. The area of the land, the nature thereof,
advantages and disadvantages occurring therein amongst
others would be relevant factors for determining the actual
market value of the property although such judgments/
awards, if duly brought on record, as stated hereinbefore,
G Ir
would be admissible in evidence."

It was furthermore noticed :-·

"36. Yet again in Ras Behari Manda/ v. Raja Jagadish
H Chandra Dea Dhaubal Deb the Patna High Court
BHAGAT SINGH & ORS. v. UNION OF INDIA & ANR. 537
[S.B. SINHA. J.]
,--., reiterated the presumption that the lessor retains ail the A
rights in mines and quarries. It also noticed the decision
of the House of Lords in Great Westt-rn Rly. Co. v.
Carpal/a United China Clay Co. Ltd.wherein a grant
reserving minerals was held to exclude a deposit of china
clay despite the fact that the same was found near the B
surface."

It was furthermore noticed :-
--.<,
"82. In V. Hanumantha Reddy v. Land Acquisition Officer
& Manda/ R. Officerthe law is stated in the following_terms: c
"It is now a well-established principle of law that the
land abutting the national highway will fetch far more
higher price than the land lying interior."
D
This Court furthermore opined :-

"84. It is also trite to state that the market value of
agricultural land is lower than that of the land suitable for
commercial purposes. (See Om Prakash v. Union of
India.) E

It was observed :-

"87. The courts will also have to take into consideration the
enormity of the financial implication of enhancement in
view of the size of the land acquired for a particular project." F

In Ranvir Singh v. Union of India, [(2005) 12 SCC 59],
this Court held as under :-

"22. Concededly, the High Court in its impugned judgment
G
' -,;.
did not place any reliance whatsoever upon the sale
instances whereupon strong reliance has been placed by
the parties solely on the ground that neither the vendors
nor the vendees thereof had been examined as witnesses.
It has also not placed any reliance upon any other judgment
H
538 SUPREME COURT REPORTS [2009] 12 S.C.R.

A or award filed by the parties. The High Court while arriving ;-. .
at the said finding evidently took into consideration the law
as it then stood. The correctness of the decisions wherein
the aforementioned view had been taken was doubted and
the matter was referred to a larger Bench."
B
Referring to Cement Corporation (supra), it was opined
that the High Court was required to consider the deeds of sale
in their proper pE3rspective for determining the market value of
the acquired land. ~-

c In Karimbanakkal Sulaiman (Dead) by L.Rs. v. Special
Tahsi/dar for K.A.K.P.l.P., [(2004) 13 SCC 643J, this Court
held:

"These factors have been taken into consideration by the
D High Court in fixing the land value. Moreover, the land
acquired was agricultural land and it was acquired for the
purpose of an irrigation project. There is nothing on record
to show that the land had any commercial value or future
potentialities. We do not think that the land value fixed is
too low to be interfered with by this Court~"
E
In Viluben Jha/ejar Contractor v. State of Gujarat, [(2005}
4 SCC 789], this Court opined that :-·

"24. The purpose for which acquisition is made is also a
F relevant factor for determining the market value. In
Basavva v. Sp/. Land Acquisition Officer deduction to the
extent of 65% was made towards development charges."

In Basant Kumar v. Union of India, [(1996) 11 SCC 542
J, this Court has opined that even if the entire land is of one
G village all the persons cannot be given same compensation, ...
stating:-

".... It has been firmly settled law by beadroll of decisions
of this Court that the Judge determining the compensation
H under Section 23(1) should sit in the armchair of a willing
BHAGAT SINGH & ORS. v. UNION OF INDIA & ANR. 539
[S.S. SINHA, J.]
/~ prudent purchaser in an open market and see whether he A
would offer the same amount proposed to be fixed as
market value as a willing and prudent buyer for the same
or similar land, i.e., land possessing all the advantageous
features and to the same extent. This test should always
oe kept in view and answered affirmatively, taking into B
consideration all relevant facts and circumstances. If feats
of imagination are allowed to sway,· he outsteps his
domain of judicial decision and lands in misconduct
,
~ amenable to disciplinary law ... "
{

12. Our attention has not been drawn to any discussion
c
made either by the Reference Court or any other evidence
brought on record to establish that the land under Ext. A-5 was
similar to the lands under acquisition in the appeals in question.
It has also not been shown to which category the land sold in
terms of the sale deed Ext. A-5 dated 15th October, · 1981 D
-t would fall. Even assuming that some appreciation has taken
place, the market value of the land, even for 'C' category has
been fixed at Rs.2275/- per bigha; as such we are of the
opinion that appellants have not been prejudiced in any manner.
E
13. For the reasons aforesaid these appeals fail and are
dismissed. No costs.

B.B.B. Appeals dismissed.