Holding

The Supreme Court reduced the deduction for development charges from 70% to 60%, holding that a higher deduction was not justified despite the High Court’s reliance on a single exemplar.

Summary

The State of Haryana acquired 265 kanals of land for a grain market and awarded compensation based on various rates. The High Court, relying on a single sale deed (Exhibit P‑6), enhanced compensation to Rs.2,88,000 per acre but deducted 70% as development charges, which the claimants challenged as excessive given the land's proximity to a developed village. The claimants argued that all sale deeds should be treated as exemplars under Section 51‑A of the Land Acquisition Act and that a 1/3 deduction is the norm. The State contended that a higher deduction was justified due to the need for extensive development. The Supreme Court held that while the High Court’s reasoning for relying on one exemplar was acceptable, a 70% deduction was too high and reduced it to 60% considering the land’s adjacency to developed areas. Consequently, the appeals were allowed in part, modifying the deduction percentage, and no costs were awarded.

Issues considered

Whether the High Court was correct in relying on a single exemplar sale deed and rejecting other exemplars for valuation under Section 51‑A of the Land Acquisition Act, 1894.
Whether a deduction of 70% towards development charges is permissible or excessive in the determination of compensation for acquired land.
Whether the standard deduction of one‑third of market value applies or a higher deduction is justified given the proximity of the land to already developed areas.

Legislation cited

Land Acquisition Act, 1894s. 4, s. 51-A

Subjects

land acquisitioncompensationdevelopment chargesvaluationexemplarsSection 51-Adeduction percentageappellate jurisdiction

Judgment

[2008] 10 S.C.R. 367

"· KANTA DEVI & ORS. A
v.
-I STATE OF HARYANA & ANR. -
(Civil Appeal Nos. 1330-1332 of 2003 etc.)

-- '
JULY 8, 2008
B
[ALTAMAS KABIR AND MARKANDEY KATJU, JJ.]

Land Acquisition Act, 1894 - ss. 4 and 51-A - Land ac-
quired - Compensation - Determination - On the basis of only
one exemplar while rejecting the others . .;. . Deductions towards c
development charges 70% - Propriety of - Held: In view of the
proximity of the acquired lands to the already developed ar-
eas, deduction reduced to 60% - Reliance on one exemplar
and rejection of others well explained by courts below.
__,..
Notification uls 4 of Land Acquisition Act, 1894 was D
issued for acquisition of the land in question. Land Ac-
quisition Collector awarded compensation in respect of
the land in the form of Chahi, Gair Mumkin Tubewell etc.
at the rate of Rs. 60,000/- per acre and in respect of Gair
Mumkin Talab Land and Rasta Land it was granted at the E
rate of Rs. 1,28,000/- per acre and to Rs. 80,000/- per acre
respectively. In appeals Single Judge of High Court tak-
-I
ing one exemplar (Exbt. P-6) and rejecting other exem-
plars, determined the compensation uniformly at the rate
·--~- of Rs. 2,88,000/- per acre after deduction of 70% towards F
development charges. Appeals field by the State were dis-
missed. Letters Patent appeals were dismissed in limine.
Hence the present appeals.
Appellants contended that deduction at the rate of 70%
was on higher side; and that in view of s. 51-A, all the sale G
...
....._ -<(
deeds placed before the Court _should have been treated as
exemplars for the purpose of assessment of compensation .
Partly allowing the appeal, the Court.
367 H
368 SUPREME COURT REPORTS [2008] 10 S.C.R:

-~

A HELD: 1. Single Judge of the High Court has given
reasons for not relying on all the other exemplars in choos-
· ing to rely on Ex.P.6 alone. But the rate of deduction ap-
'plied appears to be on the high side in relation to the de- '
velopmental work involved in making the acquired land
B suitable for the purposes for which they were so acquired. j--.-'
The acquired lands are adjacent to the village abadi which
is already developed. Having regard to the consistent view
of this Court that a deduction of 113n:1 of the market value is
normal, though a higher deduction is permissible, deduc-
c tion of 60% would meet the expenditure towards develop-
mental charges considering the proximity of the acquired
lands to the areas already developed. [Para 30] [368-D,E,F]
2. Division Bench of the High Court while dismiss-
ing the Letters Patent Appeal filed by the claimants could
D have given proper reasons before dismissing the appeals i-
filed by the appellant and all connected appeal same in
limine. However, since the decision of the Division Bench
endorses that of the single Judge, have to be allowed in
part. [Para 31] [377-G, 378-A]
E Lucknow Development Authority vs. Krishna Gopal
Lahoti and Or~. 2007 (12) Scale 685 - relied on.
Cement Corporation of India Ltd. vs. Purya and Ors. 2004 ·~
(8) SCC 270; Ranvir Singh vs. Union of India 2005 (12) SCC
F 59; Union of India v. Ram Phool and Ors. (2003) 10 SCC 167;
Ravinder Narain vs. India 2003 (4) SCC 481; Viluben Jhalejar
+-
Contractor (Dead) by Lrs. vs. State of Gujarat, 2005 (4) SCC
789; K. S. Shivadevamma vs. Assistant Commissioner of Land
Acquisition Officer, 1996 (2) SCC 262; Vasavva (Smt) and
G
Ors. vs, Special Land Acquisition Officer and Ors. 1996 (9)
sec 640 - referred to. ~
I
r
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. >,-
""
1330-1332 of 2003
From the Judgment dated 16.8.2000 of the High Court of
H
KANTA DEVI & ORS. v. STATE OF HARYANA 369
& ANR. [ALTAMA$ KABIR, J.]

Punjab and Haryana at Chandigarh in LP.A. No. 1019 of 2000. A
C.M. No. 1526of2000 in LP.A. No. 1019of2000 and L.P.A.
No. 1020 of 2000
WITH
SLP (C) Nos. 9486/2003, 9380/2003, 9488/2003, 9499/2003, B
9531/2003, 18028/2001, 3914/2002, 18029/2001, 3793/2001,
15919/2001, 15925/2001, 15926/2001, 15922/2001, 15921/2003,
15923/2001, 16136/2001, 16137/2001 and 18032/2001
A.K. Pandey, Abha R. Sharma, Dheerendra Singh,
Susheel.Kr. Tomar, Sudhanshu and Balbir Singh Gupta for the C
Appellants.
Nidesh Gupta, Kavita Wadia, Manjit Singh, Harikesh
Singh, TV. George and J.P. Dhanda for the Respondents.
The Judgment of the Court was delivered by D
ALTAMAS KABIR,J. 1. Apart from Special Leave Peti-
tion (Civil) Nos. 9488, 9499 and 9531, all of 2003, leave is
granted in respect of all the other Special Leave Petitions heard
along with Civil Appeal Nos. 1330-1332 of 2003.
E
2. These appeals, have their genesis in a common award
dated 141h March, 1989, made by the Land Acquisition Collec-
tor, Kurukshetra, whereby he awarded compensation in respect
of the acquired lands at the rate of Rs.60,000/- per acre for land
in the form of Chahi, Gair Mumkin Tubewell, etc. and at the rate F
of Rs. 40,000/- per acre in respect of Gair Mumkin Talab Land
and Rasta Land .
.3. Twenty seven References were made to the Land Ac-
quisition Judge, Kurukshetra, under Section 18 of the Land
Acquisition Act, 1894 and the same were disposed of by an G
Award dated 2"d January, 1993.
4. Being dissatisfied as to the extent of compensation
awarded, the claimants filed Regular First Appeals before the
High Court. Similarly, being aggrieved by the enhancement of H

'• ...
370 SUPREME COURT REPORTS [2008] 10 S.C.R.

A the mar_ket.value of the lands, the State also preferred 27 Regu-
lar First Appeals. In all, 51 Regular First Appeals, arising from
the common Notification, Award, and Judgment of the Land
Acquisition Judge, were taken up for hearing together and were 1...,~
disposed of by the learned Single Judge of the High Court by a
B common Judgment dated 1Oth August, 1999. ' j-~
5. Aggrieved by the judgment of the learned Single Judge,
the appellants herein filed Letters Patent Appeals (L.P.As) be-
fore the Di\tisiori Bench of the High Court which were mostly
dismissed in limine or on account of technicalities. All the ap-
e pellants, however, are similarly circumstanced and having the
same grievance. This batch of appeals have been preferred
against the said judgment and order of the Division Bench of l;._
the High Court in the various Letters Patent Appeals.
D 6. Applications have been filed in SLP(C) Nos. 9488/2003, ~
9499/2003 and 9531/2003 for substitution and setting aside
abatement and also permi$sion to file Special Leave Petition.
As they all arise out of the said common judgment of the High
Court, they are allowed and leave is also granted in the con-
nected Special Leave Petitions. As all the appeals relate to the
E same Notification under Section 4 of the Land Acquisition Act,
and arise out of the same Award, they were taken up for hear-
ing and final disposal together. ,
'r.
7. Coming back to the facts of the case, it may be indi- .
F cated that on·12th June, 1986, the State of Haryana issued a
Notification under Section 4 of the Land Acquisition Act, 1894
(hereinafter, referred to as the "LA Act") for the acquisition cf
265 kanals and 19 Marlas of land in the revenue estate of vil-
lage lsmailabad, District Kurukshetra for the establishment of a
G new grain market, construction of rest house, staff quarters and
other connected purposes of the Market Committee, lsmailabad.
Notification _under Section 6 was thereafter issued on 9th June,
1987 and the Collector, Kurukshetra, by his Award dated 14th
March, 1989 awarded compensation for 250 kanals and 17
H marlas, comprising the first category of land referred to above,
KANTA DEVI & ORS. v. STATE OF HARYANA 371
& ANR. [AlTAMAS KABIR, J.]
''I
at the rate of Rs.60,000/- per acre. For 15 kanals and 2 marl~s A
of land comprising the second category of lands, the compen-
sation was awarded at the rate of Rs.40,000/- per acre. Sola-
ti um and interest were also awarded in terms of the provisions
of the LA Act.
.....• _~
8. As indicated earlier, twenty seven References were B
made under Section 18 of the LA Act to the District Judge,
Kurukshetra. All the said References were heard together and
by his award dated 2nd January, 1993, the District Judge,
Kurukshetra enhanced the compensation in respect of the first
category of lands to Rs.1,28,000/- per acre and in respect of c
the second category of lands to Rs.80,000/- per acre.
9. In the Regular First Appeals filed both by the claimants
and the State of Haryana, the High Court by a common Judg-
ment dated 101h August, 1999, enhanced the compensation for
-..:ir D
the acquired lands to Rs.2,88,000/- per acre and it was indi-
cated that all the claimants were entitled to uniform compensa-
tion as the lands had been acquired for a common purpose.
Consequently, the appeals preferred by the State of Haryana
were dismissed and those of the claimants were allowed in part.
E
10. It may be relevant to mention at this stage that in en-
hancing the compensation payable to the claimants-appellants

. .., -~-
herein, the learned Single Judge took one exemplar (Ex. P-q)
for the purpose of comparison vis-a-vis the land acquired. Ex.
P-6 is a sale deed, whereby on 301h January, 1986, a plot of F
land measuring 148 square yards was sold for Rs.24,000/~,
whereas the notification under Section 4 was issued six months
after on 121h June, 1986. On the basis of the above, the price of
the land in question works out to Rs.9,60,000/- per acre. The
learned Single Judge, while accepting the aforesaid valuationi
G
directed deduction of 70% of the value of the lands towards

- ~
development charges to make the acquired land suitable for
the purpose for which it had been acquired and also having
regard to the nature of the lands on the date of publication of the
notification under Section 4 of the LA Act. On the basis of such
H
372 . SUPREME COURT REPORTS [2008] 10 S.C.R.

A deduction, the learned Single Judge uniformly enhanced the
compensation in respect of the lands acquired to Rs.2,88,000/
- per acre. As indicated herein before, most of the Letters Patent
Appeals filed by the appellants were dismissed by the Division
Bench in limine or on technical grounds.
B 11. These appeals have been ~4ferred by the claimants
where Letters Patent Appeals were \~~posed of by cryptic or-
ders although they were aggrieved by the rate of deduction ap-
plied by the learned Single Judge of the High Court while dis-
posing of the Regular First Appeals preferred by the appellan.ts
C as also the respondents.
12. On behalf of the appellants, it was conUfoded that the
rate of deduction as applied by the learned Single Judge was
highly excessive as the acquired land~"Nere situated in an area
which was already developed. It was submitted that the ac-
0
quired lands were situated at Ambala Pehowa Road in Village
lsmailabad and were adjacent to the Village abadi where there
were houses and shelters, power house, telephone exchange
and a factory.

E 13. It was also submitted that since the acquired lands
were reserved for commercial and residential purposes, the
claimants had demanded compensation at the rate of
Rs.15,000/- per maria from the Collector and in support thereof
Sale Deeds in respect of lands adjacent to the acquired land
F had been placed on record to show that the valuation of the
said lands were between Rs.8,000/- to Rs.9,0_00/- per maria.
14. It was submitted that this Court had repeatedly held
that in assessing the compensation payable in respect of agri-
cultural land or undeveloped land which had potential ..-~lue for
G housing or commercial purposes, normally 1/3 of the assr;)ssed
value of the land is deducted depending on the nature of the
land, its location, extent of expenditure involved for cavelopment,
and the land required for roads and other civic amenities to
make the land suitable for residential or commercial purposes.
H However, in the instant case, despite the location of the acquired
KANTA DEVI & ORS. v. STATE OF HARYANA 373
& ANR. [ALTAMAS·KABIR, J.]
-~ land and its potential value, the compensation payable to the A
claimants was reduced drastically without proper reason for such
drastic deduction.
15. In addition to the above, it was submitted that both the
learned District Judge and the learned Single Judge of the High
Court had erred in holding that the sale deed in respect of a B
- .J,,
small plot of land was not a proper indicator for the purpose, of
d~termining the value of a large tract of land. It was urged that
even with regard to the said question, this Court had consls-
tently indicated that such sale deeds or such exemplars should
not be discarded in limini, but were to be taken into consider- c
ation while fixing the value of the lands acquired.
'
16. In support of the aforesaid submissions reliance was
.
placed on the decision of this Court in Lucknow Developme'nt
Authority vs. Krishna Gopal Lahoti and Ors. [2007 (12) Scale
D
-..)( 685] where deduction for development charges at the rate of 1/
3 of the amount of compensation was accepted to be normal.
However, it was also indicated that there may be various fac-
tors which were required to be taken into consideration while
deciding the amount of deduction to be made towards devel-
opmental charges. While in some cases,. it could be more than E
1/3, in other cases it could be less, having .regard to the differ-
ence between a developed area or an area having potential
value which is yet to be developed.
17. In the same decision, while observing that where a F
. ~
large area is the subject matter of acquisition the rate at which
small plots are sold cannot be said to be a safe criteria, it was
also observed that it could not be laid down as an absolute
propositionthatthe rates fixed for smatl plots could not be the
basis for fixation of the value of the acquired land. However, in
G
such cases necessary deduction/adjustments have to be made
while determining the value and in the said context it was held
~
+ that a deduction of 1/3 of the cumpensation amount was con . .
sidered to be normal.

18. It was also sought to be urged that apart from Exh. P.S H
' I

374 SUPREME COURT REPORTS [2008] 10 S.C.R.

A on which reliance had been placed by the High Court certain
other exemplars were also produced on behalf of the claimants
which were not relied upon on the ground that they had not been
J
properly proved. It was submitted that with the incorporation of '
Section 51-A in the LAActby way of amendment the degree of
B proof had been altered and although the previous legal position
was that all sale deeds on which reliance was placed by the
parties were required to be proved, after the amendment such
proof was not strictly required and the various foras up to the
stage of Regular First Appeal co~ld rely on such documents,
c which included certified copies, as exemplars without having to
prove the same. It was urged that having regard to the provi-
sions of Section 51-A of the LA Act the different foras, including
the High Court, had erred in not placing r~liance on all sale deeds
~that had been produced on behalf of the claimants in assessing

0 the
land.
amount of compensation payable in respect of the acquired

19. In support of the aforesaid submission reliance was
placed on a Constitution Bench decision of this Court in Ce-
m.entCorporation of India Ltd: vs. Purya arid ors. (2004) 8 SCC
E 270 and Ranvir Singh Vs. Union of India (2005) 12 SCC 59,
which supported such contention.
20. Since the grievance of the appellants was only with
regard to the rate of deduction on account of the developmental
charges and an attempt was made on behalf of the appellants
F to assert that 70% deduction was unwarranted as the lands
sought to be acquired were already within or adjacent to a de-
veloped area, on behalf of the State-respondent such deduc-
tion was sought to be justified.
G ·21. It was submitted on behalf of the State-respondent that
the observations made in the Lucknow Development Authority
case'was more by way of caution than laying down the general
law which finds consistent expression in various other decisions
of this Court, such as Union of India vs. Ram Phool and another
H (2003) 10 SCC 167 in which it had been held that an isolated
KANTA DEVI & ORS. v. .STATE OF HARYANA 375
·--y & ANR. [ALTAMAS KABIR, J.]

deed of sale showing a very high price cannot be the sole ba- A

-
~
-\
sis for determining the market value.
22. It was submitted that the said view was reiterated in
the case of Ranvir Singh (supra), which, in fact, had been relied
upon by the appellants in relation to the submissions made with
regard to Section 51-A of the LA Act. !3
23. It was urged that this Court has consistently held that
small tracts of land purchased for a particular purpose may fetch
fancy prices in terms of its location and the need for acquisition
by the vendee, but the same basis could not be applied to each c
tract of land which were yet to be developed for public purposes
such as housing or setting apart an area for a particular pur-
pose such as education and/or industrialization. It was submit-
-~ ted that in such cases there could be no comparison with re-
gard to the value of the lands covered by the sal~ deed and
D
those proposed to be acquired, and that the sale price of such
a small tract of land was not a safe basis for determining the
value of a very large tract of land using the comparative method.
24. It was, however, fairly submitted that in Ravinder Narain
vs. Union of India (2003) 4 SCC 481 it has been observed in E
paragraphs 6 and 7 as follows:
"6. Where large area is the subject-matter of acquisition,
rate at which small plots are sold cannot be said to be a
"* ~ safe criterion. Reference in this context may be made to
three decisions of this Court in Collector of Lakhimpur v. F
Bhuban Chandra Dutta (1972) 4 SCC 236, Prithvi Raj
Taneja v. State of M.P.(1977)1 SCC 684 and Kausaly~
Devi Bogra v. Land Acquisition Officer, Aurangabad (1984)
2 sec 324.
G
7. It cannot, however, be laid down as an absolute
+ proposition that the rates fixed for the small plots cannot
be the basis for fixation of the rate. For example, where
there is no other material, it may in appropriate cases be
open to the adjudicating court to make comparison of the
H
376 SUPREME COURT REPORTS [2008] 10 S.C.R.

A prices paid for small plots of land. However, in such cases
necessary deductions/adjustments have to be made while
determining the prices:"
25. It was also submitted that in the instant case excluding
all the other exemplars, the High C9urt had chosen to rely on
8 Ex. P.6, where a small tra.ct of. land (148 sq. yards) had been
sold at the rate of Rs.9,60,000/- per acre·and the compensa-
tion had been worked out on such basis after applying deduc-
tion of 70% of the market value towards developmental charges,
since the lands acqu1red ·were agricultural and huge investment
C was required to be made by the State to make the same suit-
able for the purpose for which they. had been acquired namely,
the setting up of a new grain market with ·all the ancillary infra-
structure needed by the Market Committee, lsmailabad.
26. ltwas submitted that the deduction of 70%, which had
D been applied by the High Court, was quite reasonable as the
sale deed relied upon by the appellants related to lands sold for
shops etc. and Ex. P.6 and other sale ·instances had been re-
lied· upon by the appellants for smaller areas. It was urged that
in Viluben Jhalejar Contractor (Dead) by Lrs. Vs. State of
E Gujarat, (2005) 4 SCC 789, this Court had held that there can
be different deductions depending upon various factors. It was
submitted that in various other decisions and in particular in
K.S.Shivadevamma vs. Assistant Commissioner of Land Ac-
quisition Officer, (1996) 2 SCC 262, it '('las held that although
F as a general rule 33-1 /2 per cent is required to be deducted for
laying of roads and other amenities, deduction to the extent of
53% was hot improper and the extent ·of deduction depends
upon the development need in each case. In Vasavva (Smt)
and others vs. Special Land Acquisition .Officer and others,
G (1996) 9 SCC 640, this Court upheld a deduction of 65%.
27. As an alternative argument it was urged on behalf of
the State-respondent that since the High Court had relied only
on Ex. P.6 which related to the sale of only 4 marlas of land, the
matter could be remanded to the High Court for consideration
H
KANTA DEVI & ORS. v. STATE OF HARYANA 377
-y. & ANR. [ALTAMAS KABIR, J.]

of all the various sale deeds which were produced on behalf of A
the parties, to arrive at a fresh valuation for the acquired lands.
28. It was submitted that in view of the above the submis-
sions made on behalf the claimants under Section 51-A of the

• "" LA Act was not relevant for determination of the point raised in
these appeals. B

29. Having carefully considered the submissions made 011
behalf of the respective parties we see no reason to interfere
with the decision of the High Court.
30. The learned Single Judge of the High Court has taken, c
into consideration the nature of the land sought to be acquired
in relying on Ex.P.6 in assessing the market value thereof and
has applied a deduction of 70% in arriving at the compensation
_.
_ to be awarded to the claimants in respect of the said lands. The
various other documents which were produced on behalf of the D
claimants were in respect of the lands which were similar to the
lands forming the subject matter of Ex.P.6. The learned Single
Judge has given reasons for not relying on all the other exem-
plars in choosing to rely on Ex.P.6 alone. But the rate of deduc-
tion applied appears to be on the nigh side in relation to the E
I\
developmental work involved in making the acquired land suit-
able for the purposes for which they were so acquired. The ac-
quired lands are adjacent to the village abadi which is already
developed. Having regard to the consistent view that a deduc-
.. t- tion of 1/3rn of the market value is normal, though a higher de- F
duction is permissible, we are of the view that deduction of
60% would meet the expenditure towards developmental
charges considering the proximity of the acquired lands to the
areas already developed.
31. In our view, the Division Bench of the High Court while G
~
...._
., dismissing the Letters Patent Appeal filed by the claimants could
have given proper reasons before dismissing the same in
limine. However, since the decision of the Division Bench en-
dorses that of the learned single Judge, with which we have
dealt with in detail, and with which we agree, save for the amount H
378 SUPREME COURT REPORTS [2008] 10 S.C.R.

A of deduction applied towards developmental charges, these
appeals against the decision 'Of the Division Bench in dismiss-
ing the appeal filed by the appellant in C.A.Nos.1330-1332 of
2003, and all the other connected appeals have to be allowed
in part. As far as the alternative submissions made on behalf of
B the State regarding remand of these appeals to the High Court
is concerned, we are not inclined to accept the same, since we
are not convinced that such a course of action needs to be
adopted.
32. The appeals are accordingly allowed in part only to
C the extent that the deduction of 70% applied by the learned
Single Judge and endorsed by the High Court is reduced to
60%.
33. Having regard to the facts of the case there will be no
order as to costs.
K.K.T. Appeal partly allowed.

,.---
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