MUNICIPAL COMMITTEE, BHATINDA AND ORS.versusBALWANT SINGH AND ORS.

A            MUNICIPAL COMMITTEE, BHATINDA AND ORS.
                                         v.
                         BALWANT SINGH AND ORS.

                                  JULY 25, 1995

B             [K. RAMASWAMY AND K.S. PARIPOORNAN, JJ.]

          Land Acquisition Act, 1894 :

          Award of compensation-Belting-Flat rate of market value-Belting
C upheld and award of compensation at flate rate-Held: EIToneous, arbitrary
    and capricious and hence not justified.

          Certain agricultural lands were acquired for establishing water
    treatment plant and allied public purposes. The Collector awarded com-
    pensation upto a depth of 100 yards at the rate of Rs. 50,000 per acre and
D   at the rate of Rs. 15,000 per acre for the rest of the land. On reference it




E
    was enhanced to Rs.1,50,000 per acre in respect of a depth of 50 yards, to
    Rs. 60,000 per acre for depth of 50 to 100 yards and to Rs. 50,000 per acre
    for the rest of the lands. On appeal, a Single Judge of the High Court while
    upholding the principle of belting, disagreed with the distinction between
    50 yards and 100 yards, end granted market value at the rate of Rs.
                                                                                   •
    1,50,000 per acre upto a depth of 100 yards and Rs. 65,000 per acre for the
    rest of the land. On appeal, the Division Bench granted uniform flat rate
    of Rs. 1.50,000 per acre to the entire area. Hence these appeals. The
    cross-appeals have been filed by the claimants.

F         Allowing the appeals and dismissing the cross-appeals, this Court

         HELD : 1. The Division Bench committed patent error of law in
  awarding Date rate. The Single Judge had noticed the prevailing prices of
  lands abutting the roads and lands behind 100 yards from the road. Since
  it was found from intrinsic evidence on the factual matrix, he rightly
G recorded the finding that the court has to resort to belting. It is also to be
  noted that the sale deeds executed on the same day with reference to the
  land situated abutting the road and the lands interior to the road did not
  fetch the same price. Thus, it could be seen that fixation of the flat rate to
  the entire land is a manifest illegality committed by the Division Bench. It
H had also not referred to the factual matrix available on record except
                                        322
             MUNICIPALCOMMITfEE v. BALWANTSINGH                           323

discussion on the principles of law laid down in various decisions of that       A
Court. This Court has also considered this aspect of the matter in several
decisions and held that in an appropriate case, where evidence on record
is available the Court would be justified in fixing the belting and to
determine the market value of the land on that basis. Therefore, the
Division Bench was not right in awarding the compensation at a flat rate
                                                                                 B
to the entire land. [326-G-H, 327-A-B]
e
      2. The principle of average will not be applied in the case to deter-
mine the compensation. The Division Bench did not look into the intrinsic
evidence on record. On the other hand, as a general proposition of law,
the principle of flat rate was adopted which is clearly illegal. When the        C
transactions and the sale deeds relating to the land abutting the road and
the land situated interior, effected on the same day, shows the difference
in the price, the former fetched higher value and the latter securing lesser
value, it itself would lead to an irresistible conclusion that the application
of the principle of flat rate is clearly erroneous, arbitrary and capricious.    D
                                                                    [327-D-E]
      3. The compensation of Rs. 1,50,000 per acre of the land upto a depth
of 100 yards is clearly legal, just and fair. For the rest of the land a sum
of Rs. 80,000 per acre would be just and appropriate compensation since
the lands situated interior fetched lesser prices as evidenced by the sale
deed on record. [327-F]                                                          E

      4. The claimants are not entitled to the payment of additional
amount under s.23(1-A) of the Land Acquisition Act, but they are entitled
to the enhanced solatium at the rate of 30% and interest on enhanced
market value, at the rate of 9% from the date of taking possession for one       F
year and 15% thereafter till the date of the payment of deposit in the Court
whichever is earlier. [327-H, 328:A1

      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5 of 1993.

     From the Judgment and Order dated 11.4.91 of the Punjab &                   G
Haryana High Court in L.P.A. No. 231 of 1984.

     Muni Lal Verma, S.K. Bagga, Gopal Subramaniam, O.P. Sharma,
A.B. Rohtagi, Rajiv Dhawan, Seraj Bagga, Ms. Tanuj Bagga, Ms. S. Bagga
Mukul Mudgal, R.C. Gubrale, KR. Gupta, Vivek, Ashok Sudan, Ms.
Namita Sharma, K.R. Mohan, R.K. Garg and N.D. Garg for the appearing H
    324                     SUPREME COURT REPOR'ts (1995) SUPP. 2 S.C.R.

A   parties.

          The following Order of the court was delivered :

          Notification under s.4(1) was published in the State Gazette on April
    9, 1976 acquiring an extent of 116 acres of the agricultural lands for the
B   purpose of establishing Water Treatment Plant and other allied public
    purposes. The Land Acquisition Collector in his award dated March 20,
    1979 awarded compensation upto a depth of 100 yards at the rate of RSI!
    50,000 per acre and for the rest of the land he awarded compensation at
    the rate of Rs. 15,000 per acre. On reference under s.18 of the Act, the
C   Additional District Judge by his award and decree dated the August 9,
    1982, enhanced the market value lo a depth of 50 yards at the rate of Rs.
    1,50,000 per acre and 50 to 100 yards at the rate of Rs. 60,000 per acre and
    for the rest at the rate of Rs. 50,000 per acre. On further appeal, the
    Learned Singh Judge while upholding the principle of belting made by the
    Land Acquisition Collector disagreed with the principle of belting, distinc-
D   tion between 50 yards and 100 yards, and granted market value at the rate
    of Rs. 1,50,000 upto a depth of 100 yards and Rs. 65,000 per acre for the
    rest of the land. On Letters Patent Appeal, the Division Bench by its
    Judgment and Decree dated the April 11, 1991 granted uniform flat rate
    of Rs. i,50,000 per acre to the entire area. Thus, these appeals by special
E   leave by the Appellant Municipal Committee.

          Admittedly, as on the date of notification published in State Gazette,
    the lands are agricultural lands. No sanction of the plan to sell for building
    purposes was obtained by the Owners. The question is whether the lands
    are capable of potential value. The Reference Court on consideration of
F   the evidence found thus :

               "The land has obtained potentialities for being put to residential,
               commercial or industrial uses and is within the urban area of the
               town (Bhatinda). In such circumstances agricultural qualities of
               the land not to be made basis for determination of compensation
G              inclusion of the land within the municipal limits earlier to the
               notification."
                                                  <
    The learned Single Judge while accepting that the lands are possessed of
    potential value, placed reliance on exhibit A-92 plan prepared by AW-4
H   and stated that the acquired land abut Sirhind Canal towards the West and
            MUNICIPALCOMMITfEE v. BALWANTSINGH                        325

beyond the Sirhind Canal is the Thermal Colony. Towards the South, the A
acquired land abuts on the Bhatinda-Barnala road, Central Aviation
Microwave Centre is also towards the South of the acquired land. The
Aviation Centre also abuts on the aforesaid road. Bhatinda-Mansa-Talwan-
di Sabo Road joins the Bhatinda-Barnala road just in the middle of the
acquired land towards the West. There is a bridge over the Sirhind Canal B
for the Bhatinda-Barnala Road. There are two cinema houses besides
numerous residential houses on both sides of that road besides several
homes on the Bhatinda-Barnala road. There is a residential colony in
Khasra No. 1978. It could thus be seen that though the lands were agricul-
tural lands on the date of notification, since they are· situated within the C
municipal limits and nearer to the built up area the lands have potential
value for residential or commercial purposes. The Division Bench also
reaffirmed the finding that the lands are possessed of potential value. We,
therefore, hold that the lands are possessed of potential value.

      The next question is what is the market value to be determined in D
the case. The learned Single Judge having referred to the sale deeds
exhibits A-84 to A-89, found that right from December, 1970, the lands
abutting the road are fetching higher price of Rs. 1,20,000 per acre than to
the land situated behind the belt of 100 yards and that, therefore, it was
concluded thus :                                                             E

        "Whereas out of the same khasra number in December 1970, vide
        Exhibits A-86 to A-89, that much area or area upto the extent of
        300 sq. yards was being sold at an average price of Rs. 1,25,000
        per acre. The aforesaid instances also the other instances brought F
        on the record do show that the land abutting on the two roads is
        of higher value as compared to the land lying behind the belt
        abutting on the road. Therefore, the belting has to be resorted to.
        While the Land Acquisition Collector made the belting abutting
        on the road upto a depth of 100 yards for which higher market G
        value was allowed as compared to the rest of the land, the court
        below divided the 100 yards belt into two belts, one upto a depth
        of 50 yards for which Rs. 1,30,000 per acre were allowed and the
        other beyond the first belt upto 100 yards for which Rs. 60,000 per
        acre were allowed and for the last Rs. 50,000 per acre was allowed. H
    326                   SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R.

A            Once the belt abutting on the road is considered to be of higher
             value, there was no justification in making the second and third
             belts because to my mind that would be of the same value. Ac-
             cordingly, the belting made by the court below is set aside and that
             of the Land ~cquisition Collector is restored. For the belt upto a
B            depth of 100 yards on Bhatinda-Barnala road, I am of the view
             that the market value deserves to be fixed at Rs. 1,50,000 per acre."

          The Division Bench while referring to the decisions of that Court
    with reference to the belting without reference to the evidence on record
    and consideration there of had concluded thus :
c
             "On an analytical examination of the aforementioned judicial
             pronouncements of this Court, it can safely be reiterated or held
             that the courts of law would generally be disinclined to categories
             the land and would be inclined to evaluate the entire land at a flat
D            rate whenever it has got the potentialities for being used for.
             residential, commercial and industrial purposes. The factum of the
             land being situated in a compact block is another consideration
             which must weigh with the court to do away with the belting system.
             The location of the land in urban area is another factor leaning
E            towards the grant of flat rate when the entire land is acquired by
             one notification. Even suburban properties near or around the
             Municipal town can have the same potentialities until and unless
             evidence to the contrary is produced.

         The only question is whether the Division Bench was right in award-
F ing uniform rate at Rs. 1,50,000 per acre to the entire land. We think that
  the Division Bench committed patent error of law in awarding flat rate. It
  is seen that the learned Single Judge had noticed the prevailing prices of
  lands, abutting the roads and lands behind 100 yards from the road.
  Because it was found from intrinsic evidence on the factual matrix, he
G recorded the finding that the court has to resort to belting. In our view,
  the learned Single Judge is right. It is also further to be noted that the sale
  deeds executed on the same day with reference to the land situated
  abutting the road and the lands il!terior to the road did not fetch the same
  price. Thus, it could be seen that fixation of the flat rate to the entire land
H is a manifest illegality committed by the Division Bench. We may also state
             MUNICIPALCOMMITfEE v. BALWANTSINGH                            327

that the Division Bench had not referred to the factual matrix available on A
record except discussion on the principles of law laid down in various
decjsions of that Court. This Court has also considered this aspect of the
matter in several decisions and held that in an appropriate case, where
evidence on record is available the Court would be justified in fixing the
belting and to determine the market value of the land on that basis. B
Therefore, the Division Bench was not right in awarding the compensation
at a flat rate to the entire land.

       The counsel for the claimants contended that when the evidence
shows that the value of different lands are available and the lands are
contiguous and situated in a developing area, application of the principle        C
of belting is illegal. We find it difficult to accept the broad contention. The
principle of average will not be applied in the case to determine the
compensation. The Division Bench did not look into the instrinsic evidence
on record. On the other hand, as a general proposition of law, the principle
of flat rate was adopted which is clearly illegal. As stated earlier, when the    D
transaCtions and the sale deeds relating to the land abutting the road and
the land situated interior, effected on the same day, shows, the difference
in the price, the former fetched higher value and the latter securing lesser
value, it itself would lead to an irresistible conclusion that the application
of the principle of flat rate is clearly erroneous, arbitrary and capricious.     E

       The question thus is, what would be the reasonable price that the
lands would be capable to fetch. We have seen that the learned single
Judge and the Division Bench had awarded Rs. 1,50,000 to the lands. The
learned single Judge had applied the belting while the Division Bench
without the application of the belting awarded a flat rate. We hold that the
                                                                             F
compensation of Rs. 1,50,000 per acre of the land upto a depth of 100 yards
is clearly legal and just and fair. For the rest of the land we think that a
sum of Rs. 80,000 per acre would be just and appropriate compensation
since the lands situated interior fetched lesser prices as evidence by the
sale deed on record.                                                         G

     The appeal is· accordingly allowed to the above extent. The claimants
are not entitled to the payment of additional amount under s.23(1-A) of
the Land Acquisition Act, but they are entitled to the enhanced solatium
at the rate of 30% and interest on enhanced market value, at the rate of          H
A
    328                  SUPREME COURT REPORTS (1995) SUPP. 2 S.C.R.

    9% from the date of taking possession for one year and 15%. thereafter
                                                                                  ...
                                                                                    \
                                                                                        1


    till the date of the payment or deposit in the Court whichever is earlier.

          The appeals are allowed accordingly but in the ci;cumstances the
    parties are directed to bear their own costs. In working out of the decree,   ... -
    if the total amount has not already been paid by now, the appellant is
B   directed to pay the amount within 8 months from the date of the receipt
    of the order. The cross appeals are dismissed.

    G.N.                         Appeals allowed and cross appeals dismissed.