Holding

The High Court correctly determined market value using relevant sale deeds, but a 30% deduction for development charges is appropriate, setting compensation at Rs 1,05,000 per Bigha.

Summary

The State of Himachal Pradesh acquired land for a housing colony and issued a notification under the Land Acquisition Act, 1894. The Collector’s award of compensation was challenged by the landowners, who obtained a higher valuation from the District Judge based on sale deeds. The Housing Board appealed, and the Himachal Pradesh High Court reduced the compensation, using its own sale deed exemplars to fix a market value of Rs 1,50,000 per Bigha and then deducted 40% for development charges, arriving at Rs 90,000 per Bigha. The Supreme Court examined whether the High Court correctly used the sale deeds and whether a 40% deduction was justified. It held that the High Court’s method of determining market value was sound, but the deduction for development charges should be only 30%, fixing the market value at Rs 1,05,000 per Bigha and directing payment of compensation, solatium and interest accordingly. The appeals were partly allowed.

Issues considered

The appropriateness of the High Court’s reliance on the Housing Board’s sale deeds to determine market value of the acquired land.
Whether a 40% deduction for development charges from the market value is justified under the Land Acquisition Act.
The extent to which the Supreme Court may interfere with a lower court’s award of compensation.

Legislation cited

Land Acquisition Act, 1894s. 15, s. 18, s. 23, s. 23(1A), s. 23(2), s. 24, s. 28, s. 4, s. 51A
Registration Act, 1908

Subjects

Land acquisitionCompensationMarket value determinationDevelopment chargesSection 23Section 24Valuation methodologySupreme CourtHigh Court

Judgment

[2009) 14 (ADDL.) S.C.R. 163

;... CHARAN DASS (DEAD) BY L.RS. A
v.
H.P. HOUSING AND URBAN DEVELOPMENT AUTHORITY
AND ORS.
(Civil Appeal No. 2213 of 2001)
- B
SEPTEMBER 7, 2009
[D.K. JAIN AND ASOK KUMAR GANGULY, JJ.]

Land Acquisition Act, 1894:
c
- ss.23, 24 - Compensation - Market value of acquired
land - Methodology of determination - Discussed -
Interference of Court with the award of compensation - Scope
of - Held: Is limited - It is only in cases where it is found that
-<-- the authorities below, including High Court, either applied ' D
wrong principles or omitted to consider relevant factors
affecting valuation, that interference is warranted - On facts,
there is no infirmity in approach of High Court in relying on
location of land and sale deeds for enhancing market value ,
of acquired lands - No interference called for on that account.
E
Compensation for acquired land - Development charges
- Deduction on account. of - Appropriate deduction -:-
Determination of.

In these appeals, appellant challenged the order of F
High Court by which the amount of compensation
awarded by the District Judge in reference under Section
18 of Land Acquisition Act was reduced. High Court held
that the sale deeds filed by the respondent-Housing
Board were relevant exemplars for ascertaining the G
market value of the land in question. Having determined
the market value of the acquired land, the Court noted the
evidence of Assistant Architect (RW4) wherein he had
deposed that only 41.4% of the total area was used for
163 H
164 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R.

A construction and the remaining area was to be used for
services like roads, pathways, green spaces etc. On the
basis of the sa~d evidence, the High Court made a
deduction of 40% from the market value of the land
determined by it. Aggrieved appellants-landowners filed
s these appeals.
Partly allowing the appeals, the Court

HELD: 1.1. Section 15 of the Land Acquisition Act
mandates that in determining the amount of
C compensation, the Collector shall be guided by the
provisions contained in Sections 23 and 24 of the Act.
Section 23 provides that in determining the amount of
compensation to be awarded for the land acquired under
-
the Act, the Court shall, inter alia, take ·into consideration
D the market value of the land at the date of the publication
of the Notification under Section 4 of the Act. The Section
contains the Jist. of positive factors and Section 24 has a
list of negatives, vis-a-vis the land under acquisition, to
be taken into consideration while determining the amount
E of compensation. One of the principles for determination
of the market value of the acquired land would be the
price that a willing purchaser would be willing to pay if it
is sold in the open market at the time of issue of
Notification under Section 4 of the Act. But finding direct
F evidence in this behalf is not an easy task and, therefore,
the Court has to take recourse to other known methods
for arriving at the market value of the land acquired. One
of the well accepted methods adopted for ascertaining
the market value of the land in acquisition cases is the
G sale transactions on or about the date of issue of
Notification under Section 4 of the Act. But here again
finding a transaction of sale on or a few days before the +
said Notification is not an easy exercise. In the absence
of such evidence contemporaneous transactions in
respect of the lands, which have similar advantages and
H
CHARAN DASS (DEAD) BY L.RS. v. H.P. HOUSING 165

•' AND URBAN DEVELOPMENT AUTHORITY

,, ~- disadvantages is considered as a good piece of evidence
for determining the market value of the acquired land. It
A

needs little emphasis that the contemporaneous
transactions or the comparable sales have to· be in
respect of lands which are contiguous to the acquired
land and are similar in nature and potentiality. Again, in B
the absence of sale deeds, the judgments and awards
passed in respect of acquisition of lands, made in the
same village and/or neighbouring villages can be
accepted as valid piece of evidence and provide a sound
basis to work out the market value of the land afte~ c
suitable adjustments with regard to positive and negativ~
~
factors enumerated in Sections 23 and 24 of the Act.
Undoubtedly, an element of some guess work is involved
,
~
in the entire exer~_ise, yet the authority charged with the
~
duty to award compensation is bound to make an D
estimate judged by an objective standard. [Para 10) [174-
C-G; 175-A-D]

Special Tehsi/dar Land Acquisition, Vishakapatnam v.
A. Manga/a Gowri (Smt.) (1991) 4 SCC 218; Special Deputy
Collector & Anr. v. Kurra Sambasiva Rao & Ors. (1997) 6 E
SCC 41; Manipur Tea Co. Pvt. Ltd. v. Collector of Hai/akandi
\.
(1997) 9 SCC 673; Smt. Tribeni Devi & Ors. v. Collector of
Ranchi & Vice Versa (1972) 1 SCC 480; Bhagwathu/a
Samanna & Ors. v. Special Tahsildar & Land Acquisition
Officer, Visakhapatnam Municipality, Visakhapatnam (1991): F 1

4 sec 506 Viluben Jhalejar Contractor (Dead) by LRs. v. I

State of Gujarat (2005) 4 SCC 789; Atma Singh (Dead)
through LRs. & Ors. v. st8fn of Haryana & Anr. (2008) 2 sec
568; Shim/a Deve/opm nt Authority & Ors. v. Santosh
Sharma (Smt) & Anr. (1997) 2 SCC 637; Shaji Kuriakose & G
~· Anr. v. Indian Oil Corporation Ltd. & Ors. (2001) 7 SCC 650,
referred to.

1.2. The comparable sales instances of similar lands
in the neighbourhood at or about the date of Notification
H
166 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R.

/y' '
A under Section 4( 1} of the Act are considered to be the best ~
evidence for determining the market value of the acquired "'
land to arrive at a fair estimate of the amount of
compensation payable to a land owner. Nevertheless,
while ascertaining compensation, it is the duty of the
B Court to see that the compensation so determined is just
and fair not only to the individual whose property has
been acquired but also to the public which is to pay for
it. [Para 13] [178-8-C]

2. The scope of interference with the award of
c compensation is very limited. It is only in cases where it
is found that the authorities below, including the High ~
Court, either applied wrong principl~s or omitted to take 1

into consideration the relevant factors affecting-valuation, J
\.
that interference is warranted. If the judgment of the High .,,_
'-
D Court reveals that it has taken into consideration the
relevant factors prescribed by the Act, in appeal'i.mder
Article 133 of the Constitution of India, its assessment of
the fair market value of the acquired land should not be
disturbed. [Paras 14 and 15] [178-D-G]
E
Thakur Kamta Prasad Singh (Dead) by LRs. v. State of
Bihar (1976) 3 SCC 772; Food Corporation of India through --i_
its District Manager, Faridkot, Punjab & Ors. v. Makhan Singh
& Anr. (19~2} 3 sec 67, relied on.
F 3. Bearing in mind the location of the land, subject-
matter of the said sale-deeds, it is difficult to hold that the ,..
exemplars .r~lied upon by the High Court were irrelevant
for delermi.ning the market value of the acquired lands.
There is no legal or factual infirmity in the approach. of
G the High Court in ascertaining the market value of the
lands to interfere with finding of the High Court on that
account. [Para 17]. [179-H; 180-A-C]

4. It is well settled that it is not in every case that
H
CHARAN DASS (DEAD) BY L.RS. v. H.P. HOUSING 167
AND URBAN DEVELOPMENT AUTHORITY

.k deduction towards development charges has to be made A
when a big chunk of land is acquired for housing
colonies etc. Where the acquired land falls in the midst
of an already. developed land with amenities of roads,
electricity etc. deduction on this account may not be
warranted. At the same time, where all civic and other ·~
amenities are to be provided to make it suitable for
building purposes or under the local building regulations
setting apart of some portion of the lands for providing
common facilities is mandatory, an appropriate deduction
may be justified. Having regard to the relevant facts and c
circumstances of the case, including the location of the
~·
acquired land, a deduction of 30% towards development
t charges from the market value of land as arrived by the
High Court, would meet the ends of justice. Besides, they
~ will also be entitled to statutory amounts in terms of
D
Section 23(1A) of the Act; solatium at 30% on the market
value of the land in accordance with Section 23(2) of the
Act and interest as stipulated in Section 28 of the Act.
[Paras 19, 21 and 22] [180-E-F; 181-C-E]
Case Law Reference: E
(1991) 4 sec 218 referred to Para 5
(1997) 6 sec 41 referred to Para 5
(1997) g sec 673 referred to Para 5
F
(1972) 1 sec 480 referred to Para 7
(1991) 4 sec 506 referred to Para 7
c2005) 4 sec 789 referred to Para 8
G
c2ooa) 2 sec 568 referred to Para 8
(1997) 2 sec 637 referred to Para 8

H
168 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R.

A c2001) 1 sec sso referred to Para 11 __),._

CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2213 of 2001.

From the Judgment & Order dated 7.6.1999 of the High
B Court of Himachal Pradesh at Shimla in RF.A No. 199of1997.

WITH
I
C.A. No. 2214, 2215, 2216-'2220, 2221-2227, 2228 of 2001
& 2090-2101 of 2004.
c
Chandra Prakash Pandey, Naresh K. Sharma, Atul
'11'1
Sharma, Sarojanand Jha, M.A. Chinnasamy, Y. Prabhakara
Rao for the appearing parties,

The Judgment of the Court was deHvered ·by ~
D
D.K. JAIN; J. 1. This bateh of appeals arises from the final.
judgment and order dated 7th June, 1999 rendered by the High
Court of Himachal Pradesh at Shimla in twenty Regular First
Appeals as also final judgment and order dated 14th August,
E 2003 delivered by the said High Court in twelve cognate
Regular First Appeals wherein the former order has been relied
upon. By the impugned order, while allowing the appeal
preferred by the Himachal Pradesh Housing Board (hereinafter
referred to as "the Housing Board"), the High Court has reduced
F the amount of compensation awarded by the District Judge in
Reference under Section 18 of the Land Acquisition Act, 1894
(for short "the Act").

2. Material facts common to all the appeals and relevant
G for the purpose of disposal of these appeals, are as follows:

The State ·of Himachal Pradesh, respondent No.2 in Civil +

H
Appeal No.22.13 of 2001, intended to acquire land of the
appellants at Shoghi, about 12 K.M. from the capital of the
..
CHARAN DASS (DEAD) BY L.RS. v. H:P. HOUSING AND 169
" URBAN DEVELOPMENT AUTHORITY [D.K. JAIN, J.]

A- State at Shimla, for construction of a Housing Board Colony. A
Accordingly, a Notification under Section 4 of the Act was
_.
\
issued and published in the Himachal Pradesh Gazette on 6th
November, 1990. The quality of the lands involved in the
acquisition fell in different categories. The Land Acquisition
-Collector, respondent No.3 herein, by his Award dated 3rd B
August, 1994 assessed the market value of the acquired land
and announced his Award by which compensation at the rate
of Rs.32,073/- per Bigha in respect of Bakhal Awai, Rs.24,288/
- per Bigha for Bakhal Doem and Rs.7,785/- per Bigha for
Ghasani Banjar Kadeem was awarded to the appellants- c
landowners.

3. Not being satisfied, the appellants filed Reference
Applications before the District Judge under Section 18 of the

- ,.,
'
Act claiming compensation at Rs.22,00,000/- per Bigha, inter
alia, on the ground that the market value of the acquired land
was much more than what was awarded by respondent No.3.
Vide his order dated 22nd June, 1996, the District Judge found
D

the evidence adduced by the appellants (Exts. PW2/B and
PW2/A) to be reliable. However, he found the exemplars filed
by the Housing Board (RW3/A and RX), to be irrelevant for E
ascertaining the market value of the lands. Accordingly, he
),_ determined the market value of the acquired land at Rs.2 lakh

• per Bigha for all kinds of lands irrespective of their quality and
classification. In addition thereto, the District Judge awarded
F
Statutory interest and solatium to the appellants. Similarly, vide
his order dated 22nd March, 1997, the District Judge again
found the evidence adduced by the appellants in the form of
two sale deeds to be reliable. Accordingly, relying on his earlier
order dated 22nd June, 1996 (Ex.PZ), he awarded the same
compensation to the appellants. G
4. Being aggrieved with the amount of compensation
determined by the District Judge, the Housing Board preferred
Regular First Appeals to the High Court under Section 54 of
the Act, praying for setting aside the judgments of the District
H
170 SUPREME COURT REPORTS [2009] 14 (ADDl!..) S.C.R.
/

A Judge dated 22nd June, 1996 and 22nd March, 1997. The _)...
challenge to the- said judgments was on diverse grounds,
including that the two sale deeds relied upon by the District
Judge pertained to two very small pieces of land having a
'
double storied shop; one sale instance was in respect of one
B biswa of land sold four months after Notification under Section
4 in the present case; the evidence of Gursaran, one of the
claimants, who had appeared to prove the sale deed in respect
l
of the land with a double storied shop lacked truthfulness and ~

in some references the compensation awarded was in excess
c of the land owned by the claimants.

5. Vide order dated 7th June, 1999, the High Court
accepted the appeals filed by the Housing Board. Relying on
the decisions of this Court in Special Tehsildar Land
Acquisition, Vishakapatnam vs. A. Mangala Gowri (Smt.)1,
D Special Deputy Collector & Anr. vs. Kurra Sambasiva Rao & "'"' "-
Ors. 2 and Manipur ·Tea Co. Pvt. Ltd. vs. Collector of
Hailakand1"3, wherein broad parameters, to be kept in view
while determining the market value of the la_nd acquired for
public purpose have been laid down, the High Court concluded
E that as compared to H1~ sale instances relied upon by the
appellants viz., Ext. PW2/B and Ext. PW2/A, the sale deeds
filed by the Housing Board viz., RW3A (again marked as 1-
RWSA), RW4A and RX were relevant exemplars for
ascertaining the market value- of the land in question. The High
....
/

'\

F Court observed as follows:

" ... we find on record in these cases that there are
only three relevant sale deeds which are marked Exhibits
PW2/A, PW2/B, RX and RY. Sale deed Ex.PW2/B is
dated 22.1.1990 in respect of which vendee PW-Gursaran
G
(RW5) has been examined by both the parties who is also
one of the claimants in the claim petitions. He purchased r-
1. (1991) 4 sec 218: AIR 1992 SC 666.
2. (1997) s sec 41.
H 3. (1997) 9 sec 673.
-
-,A
CHARAN DASS (DEAD) BY L.RS. v. H.P. HOUSING AND 171
URBAN DEVELOPMENT AUTHORITY [D.K. JAIN, J.]

A. 2 biswas of land from Piara Singh on 22.1.1990 for a A
consideration of Rs.99,500/-. On this land there was a
_.. double storeyed shop. This witness also purchased
another piece of 0-1 biswas of land through sale deed
Ex.PW2/A, for a consideration of Rs.30,000/- from Satish
Balooni and the value of this land comes to Rs.6 lacs per B
bigha. The second sale deed was executed after
notification issued on 6.11.1990 and, therefore, the market
}
value of that sale deed cannot be taken into consideration
for determination of the acquired land. The three sale
deeds relied upon by the appellant-Board are marked RX, c
RW3/A, again marked RW5/A and RY (RW4/A) pertaining
to the year 1988-89 in respect of sale and purchase of the
land in Shoghi Bazar by the vendors and vendees. To
prove sale deed Ex.RW3/A (RW5/A) RW-Gursaran was
-----...
__I
>- examined (who appeared as his own witness in the claim
D
petition), the vendee purchased 1-0 bigha of land in the
year 1988-89 for a consideration of Rs.11,000/- from one
Ranjit Lal. One Shiv Ram sold 0-12 biswas of land to PW-
Sanjiv Goel and his brother Ajay Kumar in the year 1988-
89 for a consideration of Rs.48,000/- and the said land
was purchased by vendee for the purpose of setting up of E
steel industries. PW-Prem Kumar purchased two biswas
\..

•.
~
of land from Vishwa Nath for a consideration of Rs.48,000/
-, copy of which was marked Ext. RX and again RW4/A.
From the perusal of these sale deeds it is clear that they
pertain to· 1-1 /2 or 2 years prior to the issue of notification F
under Section 4 of the Act. The duty of the court is to keep
at the back of its mind that the object of assessment is to
arrive at reasonable and adequate market value of the land
and in that process, though some guesswork is involved,
and mechanical assessment of the evidence should be G
-.+ avoided."

6. lnter-alia,. observing that there is sufficient oral and
documentary evidence on record to determine the fair,
reasonable and adequate market value of the acquired land, H
172 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R. .
"'
A the High Court finally determined the market value of the land .)...

as under: .._'
"The value of the land purchased by the three
vendees, namely, Prem Kumar, Gursaran and Sanjiv Goel
who are also claimants in some of the claim petitions and
B
the prices ofthe lands purchased by them about 1-1/2 or
2 years prior to the acquisition of the land involved in the
present cases after calculation and divided by three would --{_

come to Rs.1,03,667/- per big ha. Applying the guesswork
of the escalation of the price between the year 1988-89
c on 6.11 ~1990, we determine the market value of the
acquired lands on the basis of these sale deeds at
Rs.1,50,000 per big ha."

D
Thus, according to the High Court, the market value of the
acquired lands as on the date of issue of Notification under
Section 4 of the Act was Rs.1,50,000/- per Bigha. Having so
determined the market value of the acquired land, the Court
noted the evidence of Mr. A.K. Gupta, Assistant Architect
·;(

-
(RW4) wherein he had deposed that only 41.4% of the total area
E was being used for con~t:-uction and the remaining area was
to be used for services like roads, pathways, green spaces etc.
On the basis of the said evidence, the High Court made a
deduction of 40% from the market value of the land determined
.:) '

"":'
by it at Rs.1,50,000/- per Bigha. Thus, the compensation
payable to the land owners for the land acquired was
r-
F
determined at Rs.90,000/- per Bigha. The compensation
awarded by the District Judge was accordingly modified to that
extent, maintaining solatium and Statutory interest awarded by
him. The High Court also noticed certain discrepancies in the
judgment of the Reference Court in granting compensation for
G lands in excess of what were actually owned by the claimants.
"'t-
Aggrieved by the said judgments, the appellants-landowners
are before us in these appeals.

7. Learned counsel appearing on behalf of the appellants,
H
CHARAN DASS (DEAD) BY L.RS. v. H.P. HOUSING AND 173
URBAN DEVELOPMENT._A.UTHORITY [D.K. JAIN, J.]
A- led by Mr. Atul Sharma, challenged the finding of the High Court A
that the exemplars/sale instances filed by the appellants and
relied upon by the District Judge were not relevant for
ascertaining the market value of the subject lands. It was argued
that since Ext. RX, adduced by way of evidence by the Housing
Board, was not proved, the High Court committed a patent B
illegality in relying on the same. Placing reliance on the
decisions of this Court in Smt. Tribeni Devi & Ors. vs.
,. Collector of Ranchi & Vice Versa 4 and Bhagwathula
Samanna & Ors. vs. Special Tahsildar & Land Acquisition
Officer, Visakhapatnam Municipality, Visakhapatnam 5 , c
learned counsel contended that the High Court failed to apply
correct principles for reducing the market value ofthe land by
40% on account of non-availability of the land for construction,
of houses. It was asserted that the basis of deduction being
-y the end use of the land and not the nature of the land or the D
comparable land, there should have been no deduction from
the market value of the land determined by the High Court.

8. Per contra, learned counsel appearing on behalf of the
Housing Board, supported the view taken by the High Court.
Controverting the stand of the appellants that sale deed (RX) E
could not be relied upon as the same had not been proved by
.._the Housing Board, learned counsel submitted that in the light
of Section 51 A of the Act, a certified copy of the sale deed
(RX), registered under the Registration Act, 1908 could be ' '
accepted as evidence of the transaction recorded therein and, F
therefore, the High Court did not commit any illegality in placing
reliance on it. Learned counsel also contended that the High
Court was justified in making deduction at the rate of 40% by
applying the principles of law laid down by this Court in Viluben
Jha/ejar Contractor (Dead) by LRs. vs. State of Gujaraf.6, Atma G
-4Singh (Dead) through LRs. & Ors. vs. State of Haryana &

4. (1972) 1 sec 480.
5. (1991) 4 sec 506.
6. (2005) 4 sec 789 . H

..
jr
I

.174 SUPREME COURT REPORTS (2099] 14 (ADDL.) S.C.R.

7
• _J..
A Anr. and Shim/a Development Authority & Ors. vs. Santosh
Sharma (Smt) & Anr. 8 •

9. Before we enter into the merits of th~ rival contentions,
we may notice a few broad principles to .be kept in view while
ascertaining the market value of the land for the purpose of
8
determining the amount of compensation payable on
acquisition of land for a public purpose.
.....
10. Section 15 of the Act mandates that in determining the
amount of compensation, the Collector shall be guided by the
c provisions contained in Sections 23 and 24 of the Act. Section
23 provides that in determining the amount of compensation
to be awarded for the land acquired under the Act, the Court
shall, inter alia, take into consideration the market value of the
land at the date of the publication of the Notification under ~
D Section 4 of the Act. The Section contains the list of positive
factors and Section 24 has a list of negatives, vis-a-vis the land
under acquisition, to be taken into consideration while
determining the amount of compensation. As already noted, the
first step being the determination of the market value of the land
E on the date of publication of Notification under sub-Section (1)
of Section 4 of the Act. One of the principles for determination
of the market value of the acquired land would be the price that _,(
~
a willing purchaser wo•1ld be willing to pay if it is sold in the open
market at the time of issue of Notification under Section 4 of
F the Act. But finding direct evidence in this behalf is not an easy
task and, therefore, the Court has to take recourse to other
known methods for arriving at the market value of the land
acquired. One of the preferred and well accepted methods
adopted for ascertaining the market value of the land in
-G acquisition cases is the sale transactions on or about the date
of issue of Notification under Section 4 of the Act. But here
again finding a transaction of sale on or a few days before the
+-
said Notification is not an easy exercise. In the absence of
7. (2008) 2 sec 568.
H 8. (1997) 2 sec 637.
CHARAN DASS (DEAD) BY L.RS. v. H.P. HOUSING AND 175
URBAN DEVELOPMENT AUTHORITY [D.K. JAIN, J.]
j._
such evidence contemporaneous transactions in respect of the A
lands, which have similar advantages and disadvantages is
(
considered as a good piece of evidence for determining the
market value of the acquired land. It needs little emphasis that
<
the contemporaneous transactions or the comparable sales
have to be in respect of lands which are contiguous to the B
acquired land and are similar in nature and potentiality. Again,
,4
in the absence of sale deeds, the judgments and awards
passed in respect of acquisition of lands, made in the same
village and/or neighbouring villages can be accepted as valid
piece of evidence and provide a sound basis to work out the c
market value of the land after suitable adjustments with regard
to positive and negative factors enumerated in Sections 23 and
24 of the Act. Undoubtedly, an element of some guess work is
involved in the entire exercise, yet the authority charged with
y
( the duty to award compensation is bound to make an estimate D
judged by an objective standard.

11. In Shaji Kuriakose & Anr. vs. Indian Oil Corporation
Ltd. & Ors. 9 , this Court has observed as under:

"It is no doubt true that courts adopt comparable sales E
method of valuation of land while fixing the market value
)... of the acquired land. While fixing the market value of the
acquired land, comparable sales method of valuation is
preferred than other methods of valuation of land such as
capitalisation of net income method or expert opinion F
method. Comparable sales method of valuation is
preferred because it furnishes the evidence for
determination of the market value of the acquired land at
which a willing purchaser would pay for the acquired land
if it had been sold in the open market at the time of issue
G
-+ of notification under Section 4 of the Act. However,
comparable sales method of valuation of land for fixing the
market value of the acquired land is not always conclusive.
There are certain factors which are required to be fulfilled

9. c2001) 7 sec 650. .H
176 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R.

A and on fulfilment of those factors the compensation can be ....i..
awarded, according to the value of the land reflected in the
sales. The factors laid down inter alia are: (1) the sale must ..
be a genuine transaction, (2) that the sale deed must have
been executed at the time proximate to the date of issue
B of notification under Section 4 of the Act, (3) that the land
covered by the sale must be in the vicinity of the acquired
land, (4) that the land covered by the sales must be similar
to the acquired land and (5) that the size of plot of the land
covered by the sales be comparable to the land acquired.
c If all these factors are satisfied, then there is no reason why
the sale value of the land covered by the sales be not given
for the acquired land. However, if there is dissimilarity in
regard to locality, shape, site or nature of land between
land covered by sales and land acquired, it is open to the
court to proportionately reduce the compensation for ~
D
acquired land than what is reflected in the sales depending
upon the disadvantages attached with the acquired land". >--
12. Yet again in Viluben Jhalejar Contractor (supra),
making reference to a number of cases on the point, it was
E observed as follows:

"18. One of the principles for determination of the amount -"
of compensatio,., for acquisition of land would be the
willingness of an informed buyer to offer the price therefor.
F It is beyond any cavil that the price of the land which a
willing and informed buyer would offer would be different
in the cases where the owner is in possession and

G
enjoyment of the property and in the cases where he is not.

19. Market value is ordinarily the price the property may
fetch in the open market if sold by a willing seller
•
\
I

unaffected by the special needs of. a particular purchase. r-
Where definite material is not forthcoming either in the
shape of sales of similar lands in the neighbourhood at or
about the date of notification under Section 4(1) or
H otherwise, other sale instances as well as other evidences
CHARAN DASS (DEAD) BY L.RS. v. H.P. HOUSING AND 177
URBAN DEVELOPMENT AUTHORITY [D.K. JAIN, J.]
~ .). have to be considered. A

20. The amount of compensation cannot be ascertained
with mathematical accuracy. A comparable instance has
to be identified having regard to the proximity from time
angle as well as proximity from situation angle. For B
determining the market value of the land under acquisition,
suitable adjustment has to be made having regard to
,)._ various positive and negative factors vis-a-vis the land
under acquisition by placing the two in juxtaposition. The
positive and negative factors are as u~der:
c
--------------------
Positive factors Negative Factors
.,._ ----- ------- D
(i) smallness of size (i) largeness of area

(ii) proximity to a road (ii) situation in the
interior at a distance
from the road E
(iii) frontage on a road (iii) narrow strip of land
( )..
4 with very small frontage
compared to depth

.·, (iv) nearness to developed (v) lower level requiring
area the depressed
F

portion to be filled up

(v) regular shape (v) remoteness from
developed locality
G
--1 (vi) level vis-a-vis land under (vi) some special
acquisition
disadvantageous factors
which would deter a
purchaser H
178 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R.
,.
-.l ,,~
A (vii) special value for an owner ,,
of an adjoining property to
whom it may have some very
special advantage".

13. Thus, comparable sales instances of similar lands in-
B
th~ neighbourhood at or about the date of Notification under
Section 4(1) of the Act are considered to be the best evidence
...!._
for determining the market value of the acquired land to arrive
at a fair estimate of the amount of compensation payable to a
land owner. Nevertheless, while ascertaining compensation, it
c is the duty of the Court to see that the compensation so
determined is just and fair not only to the individual whose
property has been acquired but also to the public which is to
pay for it. ..
~

----{
D 14. Before examining the correctness of the cases at hand,
in the light of the legal principles enumerated above, it would
also be appropriate to keep in view the scope of interference F I

by this Court in an award granting compensation. It is trite that
the scope of interference in such matters is very limited and it J-

E is only in cases where it is found that the authorities below,
including the High Court, have either applied wrong principles
or have omitted to take into consideration the relevant factors -~
!"---
affecting valuation, that this Court ~ould interfere. I

15. The scope of interference by this Court was delineated
F by this Court in Thakur Kamta Prasad Singh (Dead) by LRs. r
.t
vs. State of Bihar10 wherein it was held that ther~ is an element
of guesswork inherent in most cases involving determination
of the market value of the acquired land. If the judgment of the
High Court reveals that it has taken into consideration the t
G relevant factors prescribed by the Act, in appeal under Article
-~
133 of the Constitution of India, its assessment of the fair market
value of the acquired land should not be disturbed. t-
"
16. The following observations of this Court in Food
H 10. (1976) 3 sec 112.
CHARAN DASS (DEAD) BY L.RS. v. H.P. HOUSING AND 179
--t
/
URBAN DEVELOPMENT AUTHORITY [D.K. JAIN, J.]
~ Corporation of India through its District Manager, Faridkot, A
Punjab & Ors. vs. Makhan Singh & Anr. 11 are quite apposite:

"This Court as the last Court of appeal, will ordinarily not
interfere in an award granting compensation unless there
is something to show not merely that on the balance of
evidence it is possible to reach a different conclusion, but
B
that the judgment cannot be supported by reason of a
wrong application of principle or because some important
point affecting valuation has been overlooked or
misapplied. Besides, generally speaking, th~ appellate
court interferes not when the judgment under appeal is not
c
right but only when it is shown to be wrong."

17. Bearing these principles in mind, we may now advert
,. to the facts of the present case. As noted earlier, in the instant
·r
cases the Reference Court had relied on Exh. PW2/A and D
PW2/B to determine the market value of the land. Being the
Court of First Appeal, the High Court re-evaluated the entire
evidence and found that Exh. RW4/A, RW3/A and sale deed
marked RX in respect of pieces of the land purchased by Prem
Kumar, Gursaran Singh, Sanjiv Goel who were also claimants E
in some of the cases, were the best pieces of evidence to
)... ascertain the market value of the acquired lands. Accordingly,
..... taking the same as the base and applying the formula of

' averages, the High Court enhanced the said average amount
on account of escalation of the prices between the year 1980- F
89 as on 6th November, 1990, and determined the market
value of the acquired land at Rs.1,50,000/- per Bigha. During
the course of hearing we required counsel for the Housing
Board to place before us the site plan showing the actual
location of the subject lands and the location of the plots, in
G
respect whereof, the sale-deeds were filed by the Housing
~
Board as well as the land owners. Having bestowed our anxious
consideration to the lay out plan vis-a-vis the land in question
and bearing in mind the location of the land, subject-matter of
17. (1992) 3 sec 67. H
180 SUPREME COURT REPORTS (2009] 14 (ADDL.) S.C.R.

A the said sale-deeds, we find it difficult to hold that the exemplars
relied upon by the High Court are.irre_levant for determining the
'market value of the acquired lands. W_e are in agreement with
the High Court that the location and the date of sale in the cases,
relied upon by the High Court, were relevant for determining the
B market value of the acquired land. Having carefully examined
the relevant evidence, we are convinced that there is no legal
or factual infirmity in the approach of the High Court· in
ascertaining the.mar~et value of the lands as.might induce us
to interfere with finding of the High Court on that account. As
c noted above, unless some glaring infirmity is shown in the
assessment of evidence by the High Court, this Court would
ordinarily be slow in interfering with the approach of the High
Court in that behalf.

18. The next question which now survives for consideration
D is whether .the deduction of 40% from the market value
determined by the High Court. towards development charges
for laying roads etc., is justified?

19. It is well settled that it is not in every case that
E deduction towards development charges has to be made when
a big chunk of land is acquired for housing_ colonies etc. Where
the acquired land falls in the midst of an already developed land
with amenities of roads, electricity etc. deduction on this
account may not be warranted. At the same time, Vi.{here all civic
F and other amenities are to be provided to make it suitable for
building purposes or under the local building regulations setting
apart of some portion of the lands for providing common
facilities is mandatory, an appropriate deduction may be
justified. ·

G 20. In Special Tehsildar Land Acquisition,
Vishakapatnam (supra}, following Tribeni Devi's case (supra},
this Court had observed as under:

"It is to be noted that in building regulations, setting apart
H the lands for development of roads, drainage and other
<.
CHARAN DASS (DEAD) BYL.RS. v. H.P. HOUSINGAND181
I
I URBAN DEVELOPMENT AUTHORITY [D.K. JAIN, J.]

4-- amenities like electricity etc. are condition precedent to A
\
(
... approve layout for building colonies. Therefore, based
upon the situation of the land and the need for development
the deduction shall be made. Where acquired land is in
the midst of already developed land with amenities of
roads, drainage, ellfctricity etc. then deduction of 1/3 would B
not be justified. In the rural areas housing schemes relating
to weaker sections deduction of 1/4 may be justified."
.J_

21. In the light of the afore-noted parameters, we are of
f the view that in the instant case having regard to the relevant
c
facts and circumstances of the case, including the location of
~ the acquired land, a deduction of 30% towards development
charges from the market value of land as arrived by the High
Court, would meet the ends of justice. Accordingly, we hold that
I' )-:
the market value of the land for the purpose of payment of
D
compensation to the land owners in all these appeals is to be·
asse_ssed at Rs.1,05,000/- per Bigha.

22. In the result, the appeals are partly allowed. The
appellants shall be entitled to compensation at Rs.1,05,000/-
per Bigha. Besides, they will also be entitled to Statutory E
amounts in terms of Section 23(1A) of the Act; solatium at 30%
).... on the market value of the land ·in accordance with Section
.._. 23(2) of the Act and interest as stipulated in Section 28 of the
·Act.

23. There will, however, be no order as to costs.
F

D.G. Appeals partly allowed.