BHARAT SANCHAR NIGAM LIMITEDversusM/S. NEMICHAND DAMODARDAS & ANR.

                        [2022] 7 S.C.R. 747                             747


             BHARAT SANCHAR NIGAM LIMITED                               A
                                 v.
          M/S. NEMICHAND DAMODARDAS & ANR.
                  (Civil Appeal No. 3478 of 2022)
                                                                        B
                           JULY 11, 2022
        [M. R. SHAH AND B. V. NAGARATHNA, JJ.]
      Land Acquisition Act, 1894: s.4 – Land acquisition –
Compensation – Determination of, on the basis of Ready Reckoner
rates – Correctness of – Held: Rates mentioned in the Ready             C
Reckoner, are for the purpose of collection of stamp duty, which
are the uniform rates for all the lands in the area, thus, cannot be
the basis for determination of the compensation for the lands
acquired under the Act – Market value of the land depends upon
the location of the land; area of the land; whether the land is in a    D
developed area or not; whether the acquisition is of a small plot of
land or a big chunk of land – There cannot be the same market
value for the different lands while determining the compensation –
High Court erred in enhancing the amount of compensation by 800%
from Rs. 21/- per sq. ft. to Rs. 174/- per sq. ft. relying upon the
                                                                        E
Ready Reckoner rates, thus, the order passed by the High Court is
quashed and set aside, and that of the Reference Court determining
the compensation @ Rs.21/- per sq. ft. is restored.
      Allowing the appeal, the Court
      HELD: 1.1 The prices mentioned in the Ready Reckoner              F
for the purpose of calculation of the stamp duty, which are fixed
for the entire area, cannot be the basis for determination of the
compensation under the Land Acquisition Act. In the instant case,
the Reference Court did consider the submission on behalf of
the claimants to determine the market value on the basis of the         G
Ready Reckoner. The Reference Court specifically refused to
accept the same on appreciation of the deposition of PW-3, a
Government Officer who specifically admitted that the Ready
Reckoner was prepared for recovery of the proper stamp duty
and the registration charges and that the actual rates of transaction
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                                747
748            SUPREME COURT REPORTS                      [2022] 6 S.C.R.


A     of sales in market are different than the rates mentioned in the
      Ready Reckoner and that correct market prices cannot be
      reflected from the Ready Reckoner. Even PW-4 also specifically
      admitted in his deposition that the Ready Reckoner is prepared
      only for collecting stamp duty. [Para 9][757-G-H; 758-A-C]
B           1.2 There may be various factors, which are required to be
      considered for determining the market value of the land. The
      market value of the land depends upon the location of the land;
      area of the land; whether the land is in a developed area or not;
      whether the acquisition is of a small plot of land or a big chunk of
C     land and number of other advantageous and disadvantageous
      factors are required to be considered. Therefore, there cannot
      be the same market value for the different lands while determining
      the compensation for the lands acquired under the Land
      Acquisition Act. Therefore, the rates mentioned in the Ready
D     Reckoner, cannot be the basis for determination of the
      compensation for the lands acquired under the Act. Therefore,
      the High Court has committed a serious error in enhancing the
      amount of compensation by 800% from Rs. 21/- per sq. ft. to
      Rs. 174/- per sq. ft. relying upon and/or considering the rates
      mentioned in the Ready Reckoner. [Para 11][761-B-E]
E
             1.3 It is mentioned in the Government Resolution that the
      Ready Reckoner is scientifically prepared by taking into account
      the geographical conditions of each area, major roads, railways,
      etc., as well as by inspecting the information of buying and selling
      transactions and that the Ready Reckoner rates are based on
F
      the talukas in rural areas and the urban areas in different parts of
      the city. There cannot be a uniform market value of the land for
      the purpose of determination of the compensation for the lands
      acquired under the Land Acquisition Act. The market value of
      the different lands vary from place to place and it depends upon
G     various factors. Thus, the impugned judgment passed by the High
      Court is quashed and set aside and the judgment passed by the
      Reference Court determining the compensation @ Rs.21/- per
      sq. ft. is restored. [Para 12, 13][761-F-H; 762-A-B]

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 BHARAT SANCHAR NIGAM LIMITED v. M/S. NEMICHAND                          749
             DAMODARDAS & ANR.

        Jawajee Nagnatham v. Revenue Divisional Officer,                 A
        Adilabad, A.P. and Ors (1994) 4 SCC 595 : [1994] 1
        SCR 368; Lal Chand v. Union of India and Anr. (2009)
        15 SCC 769 : [2009] 13 SCR 622; Krishi Utpadan
        Mandi Samiti, Sahaswan v. Bipin Kumar (2004) 2 SCC
        283 – relied on.                                                 B
        Shalini Vaman Godbole v. Special Land Acquisition
        Officer, Special Unit, Solapur and Ors. (2009) 5 Mah
        LJ 884; Chimanlal Hargovinddas v. Special Land
        Acquisition Officer, Poona and Anr. (1988) 3 SCC 751
        : [1988] 1 Suppl. SCR 531 – referred to.                         C

                       Case Law Reference

(2009) 5 Mah LJ 884            referred to             Para 3.2
                                                                         D
[2009] 13 SCR 622              relied on                Para 9

[1994] 1 SCR 368               relied on               Para 9

(2004) 2 SCC 283               relied on               Para 9
                                                                         E
[1988] 1 Suppl. SCR 531        referred to             Para 10

        CIVIL APPELLATE JURISDICTION: Civil Appeal No.3478 of
2022.

       From the Judgment and Order dated 20.01.2021 of the High Court    F
of Judicature at Bombay, Nagpur Bench, Nagpur in First Appeal No.1302
of 2009.

       R. D. Agrawala, Sr. Adv., Pradeep Kumar Mathur, Chiranjeev
Johri, Advs. for the Appellant.
                                                                         G
      Mrs. Kiran Suri, Sr. Adv., Sajid Vorshani, Satyajit A. Desai,
Siddharth Gautam, Ms. Deb Deepa Majumdar, Satya Kam Sharma,
Ms. Aishwarya Kumar, Ms. Anagha S. Desai, Sachin Patil, Rahul Chitnis,
Aaditya A. Pande, Geo Joseph, Advs. for the Respondents.
                                                                         H
750            SUPREME COURT REPORTS                          [2022] 6 S.C.R.


A           The Judgment of the Court was delivered by
            M. R. SHAH, J.
             1. Feeling aggrieved and dissatisfied with the impugned judgment
      and order passed by the High Court of Judicature at Bombay at Nagpur
      Bench in First Appeal No.1302 of 2009 by which the High Court has
B
      partly allowed the said appeal preferred by the original owners/original
      claimants and has enhanced the amount of compensation for the lands
      acquired mainly relying upon the prevailing Ready Reckoner rates of
      the land, the Bharat Sanchar Nigam Limited (BSNL) has preferred the
      present appeal.
C
             2. That the lands owned by the respondents herein – original
      landowners situated at Yavatmal, Maharashtra were acquired by the
      State Government under the provisions of the Land Acquisition Act for
      BSNL. The Land Acquisition Officer declared the award determining
      the total compensation @ Rs.14,33,703/- (at Rs.13.32 per sq. ft.). At the
D
      instance of the landowners, a reference was made to the Reference
      Court. The Reference Court enhanced the amount of compensation to
      Rs.21/- per sq. ft.
            2.1 In a further appeal to the High Court at the instance of the
      original claimants, by the impugned judgment and order, the High Court
E
      has enhanced the amount of compensation to Rs.174/- per sq. ft. (more
      than 800% of the Reference Court compensation and about 1300% of
      the compensation awarded by the Land Acquisition Officer).
            2.2 Feeling aggrieved and dissatisfied with the impugned judgment
F     and order passed by the High Court enhancing the amount of compensation
      to Rs.174/- per sq. ft., BSNL has preferred the present appeal.
             3. Shri R.D. Agrawala, learned Senior Advocate appearing on
      behalf of BSNL has vehemently submitted that the High Court has
      seriously erred in enhancing the amount of compensation solely relying
G     upon the prevailing Ready Reckoner rates. It is submitted that the sole
      basis for more than 800% increase by the High Court is the prevailing
      Ready Reckoner rates of land, which as such is not permissible as held
      by this Court in the case of Jawajee Nagnatham Vs. Revenue
      Divisional Officer, Adilabad, A.P. and Ors., (1994) 4 SCC 595 and
H
 BHARAT SANCHAR NIGAM LIMITED v. M/S. NEMICHAND                               751
        DAMODARDAS & ANR. [M. R. SHAH, J.]

Krishi Utpadan Mandi Samiti, Sahaswan Vs. Bipin Kumar, (2004)                 A
2 SCC 283.
       3.1 Learned Senior Advocate appearing on behalf of the appellant
– BSNL has further submitted that in the facts and circumstances of the
case, no reliance could have been placed on the Ready Reckoner as
PW3 – a Government Officer specifically admitted that the actual rates        B
of transaction of sales in market are different from the rates mentioned
in the Ready Reckoner and that the correct market price is not reflected
from the Ready Reckoner. It is submitted that PW3 further specifically
admitted that the Ready Reckoner was prepared only for collecting stamp
duty. It is submitted that therefore, the High Court has seriously erred in   C
enhancing the amount of compensation solely relying upon the Ready
Reckoner prices of the area in question.
      3.2 It is further submitted by the learned Senior Advocate appearing
on behalf of the appellant – BSNL that in the present case, the High
Court has relied upon and/or considered the Full Bench decision of the        D
Bombay High Court in the case of Shalini Vaman Godbole Vs. Special
Land Acquisition Officer, Special Unit, Solapur and Ors., (2009)
5 Mah LJ 884 rather than not following the decisions of this Hon’ble
Court in the case of Jawajee Nagnatham (supra) and Krishi Utpadan
Mandi Samiti, Sahaswan (supra), which are binding on all Courts of            E
the country under Article 141 of the Constitution of India.
      3.3 Making above submissions and relying upon the above
decisions, it is prayed to allow the present appeal.
       4. Shri Sachin Patil, learned counsel appearing on behalf of the
State has adopted the submissions made by the learned Senior Advocate         F
appearing on behalf of the appellant – BSNL and submitted that the
High Court has committed a serious error in awarding such an exorbitant
compensation.
      5. Present appeal is vehemently opposed by Mrs. Kiran Suri,
                                                                              G
learned Senior Advocate appearing on behalf of original claimants.
Mrs. Suri, learned Senior Advocate appearing on behalf of the original
claimants has vehemently submitted that in the present case while
enhancing the compensation amount to Rs. 174/- per sq. ft., the High
Court has rightly relied upon the Government Resolution and the Ready
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752            SUPREME COURT REPORTS                           [2022] 6 S.C.R.


A     Reckoner. It is contended that the value of the land mentioned in the
      Ready Reckoner is a statutory cost and even the Government has issued
      a Resolution that while determining the amount of compensation, the
      price/value mentioned in the Ready Reckoner is required to be taken
      into consideration.
B            5.1 It is submitted that in the present case, the original claimants
      have relied upon the Government Resolution dated 31.10.1994 as well
      as the Ready Reckoner rates by examining the Assistant Town Planner
      as PW-4.
            5.2 It is submitted that the Government Resolution dated 31.10.1994
C     makes it obligatory that on the date of the notification under Section 4 of
      the Land Acquisition Act, wherever, necessary, the capitalization method
      and/or the valuation as per the Ready Reckoner, whichever is higher,
      should be done at the time of market selection. It is submitted that the
      aforesaid Government Resolution provided the basis for the calculation
D     of the market value for Ready Reckoner. It is submitted that Ready
      Reckoner is prepared after taking into consideration the geographical
      conditions of each area, major roads, railways, etc., as well as by
      inspecting the information of buying and selling transactions.
             5.3 It is submitted that the Ready Reckoner is used for registering
E     documents. The sale transactions cannot be for a lesser amount than
      the market price. It is submitted that however, the value of the land in
      the documents may be higher than the value proposed by the Ready
      Reckoner. It is submitted that a policy decision by the Government that
      the value/price mentioned in the Ready Reckoner can be considered for
F     the purpose of determining the compensation for the lands acquired under
      the Land Acquisition Act is beyond the judicial review, more particularly,
      when the same is not under challenge.
             5.4 It is submitted that the prices mentioned in the Ready Reckoner
      are after following the procedure as required under the Maharashtra
G     Stamp (Determination of True Market Value of property) Rules, 1995.
      Relying upon the decision of this Court in the case of Lal Chand Vs.
      Union of India and Anr., (2009) 15 SCC 769 (para 41), it is submitted
      that as observed and held by this Court, the procedure adopted by the
      Expert Committee constituted under the Stamp Act, law is a scientific
H     and methodical assessment of market value, and, therefore, there is no
 BHARAT SANCHAR NIGAM LIMITED v. M/S. NEMICHAND                              753
        DAMODARDAS & ANR. [M. R. SHAH, J.]

reason why such rates should not be a relevant piece of evidence for         A
determination of the market value.
      5.5 Making the above submissions and relying upon the decision
of the Bombay High Court in the case of Shalini Vaman Godbole
(supra), it is prayed to dismiss the present appeal.
                                                                             B
       6. Heard the learned counsel appearing for the respective parties
at length.
       7. At the outset, it is required to be noted that by the impugned
judgment and order, the High Court relying upon the Ready Reckoner
land prices of the area has enhanced the amount of compensation by           C
800% from Rs.21/- per sq. ft. to Rs. 174/- per sq. ft. The High Court
has heavily relied upon the Government Resolution dated 31.10.1994 as
well as the Ready Reckoner prices and the decision of the High Court in
the case of Shalini Vaman Godbole (supra). However, when decision
of this Court in the case of Jawajee Nagnatham (supra) and Krishi
                                                                             D
Utpadan Mandi Samiti, Sahaswan (supra), which were binding, on
whether while determining the compensation for the lands acquired under
the Land Acquisition Act, the Ready Reckoner prices, which are for
determination of the stamp duty can be considered or not, the High Court
has not followed the aforesaid decisions of this Court, which were binding
on the High Court under Article 141 of the Constitution of India.            E
Therefore, High Court has seriously erred in not following the two
decisions of this Court in the case of Jawajee Nagnatham (supra) and
Krishi Utpadan Mandi Samiti, Sahaswan (supra).
       8. Whether the prices mentioned in the Ready Reckoner can be
the basis for determining the compensation for the lands acquired under      F
the Land Acquisition Act has been dealt with by this Court in the two
decisions of this Court in the case of Jawajee Nagnatham (supra) and
Krishi Utpadan Mandi Samiti, Sahaswan (supra). In the case of
Jawajee Nagnatham (supra), this Court has observed and held that
the amount of compensation for the lands under the Land Acquisition          G
Act is determined by adopting the method of valuation namely, (1) opinion
of experts; (2) the price paid within a reasonable time in bona fide
transactions of purchase of the lands acquired or the lands adjacent to
the lands acquired and possessing similar advantages; and (3) a number
of years purchase of the actual or immediately prospective profits of the    H
754            SUPREME COURT REPORTS                           [2022] 6 S.C.R.


A     lands acquired. It is observed that in determining the market value, the
      Court has to take into account either one or the other of the three methods
      to determine market value of the lands appropriate to the facts of a
      given case to determine the market value. Thereafter, this Court
      considered whether the Basic Valuation Register would form the
B     foundation to determine the market value. While negating the same and
      accepting the view taken by the High Court that the entries under the
      Basic Valuation Register cannot form the basis to enhance the market
      value, it is observed and held in paragraph 5 as under:-
            “5. The question, therefore, is whether the Basic Valuation
C           Register is evidence to determine the market value. This Court
            in Special Land Acquisition Officer v. T. Adhinarayan
            Setty [AIR 1959 SC 429] in paragraph 9 held that the function of
            the Court in awarding compensation under the Act is to ascertain
            the market value of the land at the date of the notification under
D           Section 4(1). The methods of valuation may be (1) opinion of
            experts (2) the price paid within a reasonable time in bona fide
            transactions of purchase of the lands acquired or the lands adjacent
            to the lands acquired and possessing similar advantages; and (3)
            a number of years purchase of the actual or immediately
            prospective profits of the lands acquired. Same was the view
E           in Tribeni Devi v. Collector of Ranchi [(1972) 1 SCC 480]. It
            was reiterated in catena of decisions, vide, Periyar and
            Pareekanni Rubbers Ltd. v. State of Kerala [(1991) 4 SCC 195].
            Therefore, it is settled law that in determining the market value,
            the Court has to take into account either one or the other three
F           methods to determine market value of the lands appropriate on
            the facts of a given case to determine the market value. Generally
            the second method of valuation is accepted as the best. The
            question, therefore, is whether the Basic Valuation Register would
            form foundation to determine the market value. The Indian Stamp
G           Act, 1899 provides the power to prescribe stamp duty on
            instruments, etc. Entry 44 of List III, Concurrent List, of the VIIth
            Schedule read with Article 254 of the Constitution empowers the
            State Legislature to amend the Indian Stamp Act, 1899. In exercise
            thereof all the State Legislatures including the Legislature of A.P.
            amended the Act and enacted Section 47-A empowering the
H
BHARAT SANCHAR NIGAM LIMITED v. M/S. NEMICHAND                               755
       DAMODARDAS & ANR. [M. R. SHAH, J.]

   registering officer to levy stamp duty on instruments of conveyance,      A
   etc., if the registering officer has reason to believe that the market
   value of the property, covered by the conveyance, exchange, gift,
   release of right or settlement, has not been truly set forth in the
   instrument, he may refuse registering such instrument and refer
   the same to the Collector for determination of the market value of        B
   such property and the proper duty payable thereon. On receipt of
   such opinion, he may call upon the vendor as per the rules
   prescribed, to pay the additional duty thereon. If the vendor is
   dissatisfied, he has been given the right to file an appeal and further
   getting reference made to the High Court for decision in that
                                                                             C
   behalf. Section 47-A would thus clearly show that the exercise of
   the power thereunder is with reference to a particular land covered
   by the instrument brought for registration. When he has reasons
   to believe it to be undervalued, he should get verified whether the
   market value was truly reflected in the instrument for the purpose
   of stamp duty; the Collector on reference could determine the             D
   same on the basis of the prevailing market value. Section 47-A
   conferred no express power to the Government to determine the
   market value of the lands prevailing in a particular area, village,
   block, district or the region and to maintain Basic Valuation Register
   for levy of stamp duty for registration of an instrument, etc. No         E
   other statutory provision or rule having statutory force has been
   brought to our notice in support thereof. Whether an instrument is
   liable for higher stamp duty on the basis of valuation maintained in
   the Basic Valuation Register, came up for consideration in Sagar
   Cements Ltd. v. State of A.P. [(1989) 3 Andh LT 677] B.P. Jeevan          F
   Reddy, J., as he then was, considered the question and held that
   the Government has unilaterally fixed the valuation of the lands,
   the Basic Valuation Register had no statutory foundation and
   therefore it does not bind the parties. Neither the Registrar nor
   the vendor is bound by it. The market value of the land for proper
                                                                             G
   stamp duty has to be determined as per the law under Section
   47-A itself. That view was followed by another learned Single
   Judge in P. Sasidar v. Sub-Registrar [(1992) 1 Andh LT 49]. It
   is, therefore, clear that the Basic Valuation Register prepared and
   maintained for the purpose of collecting stamp duty has no statutory
                                                                             H
756      SUPREME COURT REPORTS                           [2022] 6 S.C.R.


A     base or force. It cannot form a foundation to determine the market
      value mentioned thereunder in instrument brought for registration.
      Equally it would not be a basis to determine the market value
      under Section 23 of the Act, of the lands acquired in that area or
      town or the locality or the taluk etc. Evidence of bona fide sales
B     between willing prudent vendor and prudent vendee of the lands
      acquired or situated near about that land possessing same or similar
      advantageous features would furnish basis to determine market
      value. The Division Bench followed, in support of its view a decision
      of another Division Bench in Land Acquisition Officer v.
      Venkateswara Prasad [A.S. No. 880 of 1980, decided on 11-11-
C
      1981] which also decided that Basic Valuation Register cannot be
      relied on to determine the market value. It would appear that
      in Govt. of A.P. v. Sohan Lal [(1988) 2 Andh LT 306] a Division
      Bench of that High Court, without noticing these two binding
      decisions, held that the Basic Valuation Register would form
D     foundation to determine the market value and directed to determine
      the compensation on that basis. The entire controversy was
      considered by yet another Division Bench in Vasireddi Bharata
      Rao v. Revenue Divisional Officer [(1992) 1 Andh LT 591]. The
      Division Bench, after considering the case law disagreeing
E     with Sohan Lal [(1988) 2 Andh LT 306] view as per incuriam,
      also reiterated that the Basic Valuation Register maintained by
      the registering authority has no statutory foundation to determine
      the market value and cannot form the base under Section 23(1) to
      determine the market value. This Court in Gulzara Singh v. State
F     of Punjab [(1993) 4 SCC 245] held that mutation entries of the
      land transactions in the revenue records are not evidence unless
      the parties to the transactions have been examined in proof of
      documents. In Director of Survey-cum-LAO v. Mohd. Ghouse
      [(1985) 1 MLJ 116] relied on by Mr Ganguli, the Division Bench
      of Madras High Court, relying upon the instructions issued by the
G
      Government to determine the market value for the purpose of
      registration of the instrument under Section 47-A, held that it would
      form basis to determine the market value under Section 23 in an
      appropriate case, subject to proof of the market value. What were
      the instructions issued by the Government and whether they had
H     any statutory foundation, have not been stated by the Division
 BHARAT SANCHAR NIGAM LIMITED v. M/S. NEMICHAND                              757
        DAMODARDAS & ANR. [M. R. SHAH, J.]

      Bench. If the broad proposition of law that under Section 47-A of      A
      Stamp Act such instructions could be issued, as contended for the
      appellant herein, as appears to be the view of the High Court, it is
      not correct law. As we have already noted, Section 47-A being
      local amendment, made by each State Legislature did not find
      any such statutory basis. Like A.P. Act, Tamil Nadu Act is also        B
      referable to transactions intra vivos and not as general guidelines.
      If they are based on evidence inter partes it would be consistent
      with Section 47-A. Accordingly we hold that the basic value of
      registration has no statutory base. It cannot form any basis to
      determine the market value of the acquired lands under Section
                                                                             C
      23 of the Act. The burden of proof is always on the claimant to
      prove, in each case the prevailing market value as on the date of
      notification published in the State Gazette under Section 4(1) of
      the Act with reference to the sale deeds of the same lands or
      neighbour’s lands possessed of same or similar advantages and
      features executed between willing vendor and willing vendee or         D
      other relevant evidence in the reference court. The State did not
      file any appeal against the award of the reference court which
      itself is a matter gone in favour of the appellant. We do not find
      any justification to further enhance the market value.”
       9. The aforesaid decision in the case of Jawajee Nagnatham            E
(supra) has been subsequently followed in a subsequent decision of this
Court in the case of Lal Chand (supra) and it is observed that the
market value of the land under Section 23 of the Land Acquisition Act
cannot be fixed on the basis of the rates mentioned in the Basic Valuation
Registers’ maintained for the purpose of collection of proper stamp duty.    F
In that case, as the Reference Court determined the amount of
compensation on the value of the land fixed by the District Magistrate
for stamp duty purposes, this court has observed and held that the same
was erroneous.
        As such, we are in complete agreement with the view taken in         G
the aforesaid two decisions that the prices mentioned in the Ready
Reckoner for the purpose of calculation of the stamp duty, which are
fixed for the entire area, cannot be the basis for determination of the
compensation under the Land Acquisition Act. It is required to be noted
that in the present case, the Reference Court did consider the submission    H
758             SUPREME COURT REPORTS                           [2022] 6 S.C.R.


A     on behalf of the claimants to determine the market value on the basis of
      the Ready Reckoner. The Reference Court specifically refused to accept
      the same on appreciation of the deposition of PW-3. PW-3, a Government
      Officer specifically admitted that the Ready Reckoner was prepared
      for recovery of the proper stamp duty and the registration charges and
B     that the actual rates of transaction of sales in market are different than
      the rates mentioned in the Ready Reckoner and that correct market
      prices cannot be reflected from the Ready Reckoner. Even PW-4 also
      specifically admitted in his deposition that the Ready Reckoner is prepared
      only for collecting stamp duty. The Refence court, therefore, rightly relied
      upon and followed the decisions of this Court in the case of Jawajee
C
      Nagnatham (supra) and Krishi Utpadan Mandi Samiti, Sahaswan
      (supra).
            10. Why the prices mentioned in the Ready Reckoner, which is
      basically for the purpose of collecting proper stamp duty and registration
D     charges shall not be the basis for determination of the compensation for
      the lands acquired under the Land Acquisition Act is required to be
      considered from another angle also. It cannot be disputed that the rates
      mentioned in the Ready Reckoner are for the lands of the entire area
      and the uniform rates are determined with respect to different lands. In
      the case of Chimanlal Hargovinddas Vs. Special Land Acquisition
E     Officer, Poona and Anr., (1988) 3 SCC 751, this Court has laid down
      the broad principles to be followed in the case of determination of
      compensation, which are as under:-
            “4. The following factors must be etched on the mental screen:
F                  (1) A reference under Section 18 of the Land Acquisition
            Act is not an appeal against the award and the court cannot take
            into account the material relied upon by the Land Acquisition
            Officer in his award unless the same material is produced and
            proved before the court.

G                  (2) So also the award of the Land Acquisition Officer is not
            to be treated as a judgment of the trial court open or exposed to
            challenge before the court hearing the reference. It is merely an
            offer made by the Land Acquisition Officer and the material utilised
            by him for making his valuation cannot be utilised by the court
            unless produced and proved before it. It is not the function of the
H
BHARAT SANCHAR NIGAM LIMITED v. M/S. NEMICHAND                              759
       DAMODARDAS & ANR. [M. R. SHAH, J.]

   court to sit in appeal against the award, approve or disapprove its      A
   reasoning, or correct its error or affirm, modify or reverse the
   conclusion reached by the Land Acquisition Officer, as if it were
   an appellate court.
         (3) The court has to treat the reference as an original
   proceeding before it and determine the market value afresh on            B
   the basis of the material produced before it.
          (4) The claimant is in the position of a plaintiff who has to
   show that the price offered for his land in the award is inadequate
   on the basis of the materials produced in the court. Of course the
   materials placed and proved by the other side can also be taken          C
   into account for this purpose.
         (5) The market value of land under acquisition has to be
   determined as on the crucial date of publication of the notification
   under Section 4 of the Land Acquisition Act (dates of notifications
   under Sections 6 and 9 are irrelevant).                                  D
           (6) The determination has to be made standing on the date
   line of valuation (date of publication of notification under Section
   4) as if the valuer is a hypothetical purchaser willing to purchase
   land from the open market and is prepared to pay a reasonable
   price as on that day. It has also to be assumed that the vendor is       E
   willing to sell the land at a reasonable price.
         (7) In doing so by the instances method, the court has to
   correlate the market value reflected in the most comparable
   instance, which provides the index of market value.
          (8) Only genuine instances have to be taken into account.         F
   (Sometimes instances are rigged up in anticipation of acquisition
   of land.)
           (9) Even post-notification instances can be taken into account
   (1) if they are very proximate, (2) genuine, and (3) the acquisition
   itself has not motivated the purchaser to pay a higher price on          G
   account of the resultant improvement in development prospects.
         (10) The most comparable instances out of the genuine
   instances have to be identified on the following considerations:
         (i) proximity from time angle,
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760      SUPREME COURT REPORTS                          [2022] 6 S.C.R.


A           (ii) proximity from situation angle.
             (11) Having identified the instances which provide the index
      of market value, the price reflected therein may be taken as the
      norm and the market value of the land under acquisition may be
      deduced by making suitable adjustments for the plus and minus
B     factors vis-à-vis land under acquisition by placing the two in
      juxtaposition.
             (12) A balance sheet of plus and minus factors may be
      drawn for this purpose and the relevant factors may be evaluated
      in terms of price variation as a prudent purchaser would do.
C           (13) The market value of the land under acquisition has
      thereafter to be deduced by loading the price reflected in the
      instance taken as norm for plus factors and unloading it for minus
      factors.
             (14) The exercise indicated in clauses (11) to (13) has to be
D     undertaken in a common sense manner, as a prudent man of the
      world of business would do. We may illustrate some such illustrative
      (not exhaustive) factors:
               Plus factors                Minus factors
      1. smallness of size             1. largeness of area
E
      2. proximity to a road           2. situation in the interior at
                                          a distance from the road
      3. frontage on a road            3. narrow strip of land with
                                          very small frontage
                                          compared to depth
F
      4. nearness to developed area 4. lower level requiring the
                                       depressed portion to be
                                       filled up
      5. regular shape                 5. remoteness from
G        developed locality
      6. level vis-à-vis land          6. some special
         under acquisition                disadvantageous factor
                                          which would deter a
                                          purchaser
H
 BHARAT SANCHAR NIGAM LIMITED v. M/S. NEMICHAND                              761
        DAMODARDAS & ANR. [M. R. SHAH, J.]

      7. special value for an                                                A
         owner of an adjoining
         property to whom it
         may have some very
         special advantage
                              XXXXXXXXXX”                                    B
       11. Thus, there may be various factors, which are required to be
considered for determining the market value of the land. The market
value of the land depends upon the location of the land; area of the land;
whether the land is in a developed area or not; whether the acquisition is
of a small plot of land or a big chunk of land and number of other           C
advantageous and disadvantageous factors are required to be considered.
Therefore, there cannot be the same market value for the different lands
while determining the compensation for the lands acquired under the
Land Acquisition Act. Therefore, the rates mentioned in the Ready
Reckoner, which are basically for the purpose of collection of stamp         D
duty and as observed hereinabove, which are the uniform rates for all
the lands in the area, cannot be the basis for determination of the
compensation for the lands acquired under the Land Acquisition Act.
Therefore, the High Court has committed a serious error in enhancing
the amount of compensation by 800% from Rs. 21/- per sq. ft. to Rs.
                                                                             E
174/- per sq. ft. relying upon and/or considering the rates mentioned in
the Ready Reckoner.
       12. Now, so far as the reliance placed upon the Government
Resolution dated 31.10.1994 by the claimants as well as the High Court
is concerned, apart from the fact that the same is contrary to the law       F
laid down by this Court in the aforesaid two decisions, what is mentioned
in the said Government Resolution is that the Ready Reckoner is
scientifically prepared by taking into account the geographical conditions
of each area, major roads, railways, etc., as well as by inspecting the
information of buying and selling transactions and that the Ready
                                                                             G
Reckoner rates are based on the talukas in rural areas and the urban
areas in different parts of the city.
       As observed hereinabove, there cannot be a uniform market value
of the land for the purpose of determination of the compensation for the
lands acquired under the Land Acquisition Act. As observed herein above,
                                                                             H
762                SUPREME COURT REPORTS                      [2022] 6 S.C.R.


A     the market value of the different lands vary from place to place and it
      depends upon various factors as observed hereinabove.
              13. In view of the above and for the reasons stated above, present
      appeal succeeds. The impugned judgment and order passed by the High
      Court is hereby quashed and set aside and the judgment and order passed
B     by the Reference Court determining the compensation @ Rs.21/- per
      sq. ft. is hereby restored.
            Present Appeal is Allowed accordingly. However, in the facts
      and circumstances of the case, there shall be no order as to costs.

C
      Nidhi Jain                                                  Appeal allowed.




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