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Supreme Court of India

SRI SAUNUversusCOLLECTOR, LAND ACQUISITION

Citation
1996 INSC 959
Decided
28 August 1996
Disposal
Dismissed

Holding

Sale deeds of small extents do not provide a reasonable basis for enhancing compensation; the appropriate test is the price a willing prudent purchaser would pay in the open market.

Summary

The Supreme Court considered an appeal by Sri Saunu against the Collector’s award of compensation for 221 bighas of land acquired under the Land Acquisition Act, 1894 for the Beas‑Sutlej Link Project. The Land Acquisition Officer had fixed compensation between Rs 2,000 and Rs 5,000 per bigha, which was confirmed by the Additional District Judge and the Himachal Pradesh High Court. The appellant sought enhancement to Rs 15,000 per bigha, relying on five sale deeds of very small parcels (6‑18 biswas) within the same village. The Court examined whether such isolated sales could be used as a reasonable basis to uplift compensation for the entire acquisition. It held that the proper test is whether a willing prudent purchaser in the open market would pay the rate proposed, and that the small‑scale sales did not satisfy this test. Consequently, the Court found no error in the lower courts’ determination and dismissed the appeal without costs.

Issues considered

  • Whether sale deeds of small parcels can be used to determine higher compensation for a large compulsory acquisition.
  • What is the appropriate standard for assessing compensation in land acquisition under the Land Acquisition Act, 1894.

Legislation cited

Subjects

Land acquisitionCompensationEnhancementMarket valueSale deedsLand Acquisition Act, 1894Supreme CourtCompulsory acquisition

Judgment

                              SRI SAUNU                                            A
                                   v.
                      COLLECTOR, LAND ACQUISITION

                                 AUGUST 28, 1996

              [K. RAMASWAMY AND K. VENKATASWAMY, JJ.]                              B

            Land Acquisition Act, 1894 :

           Compensation-A. ward of by Land Acquisition Officer and confinned
    by the Additional Disflict Judge and High Cowt-On further appeal for           C
    enhancement, held, sale deeds in respect of small extent of land do not fonn
    reasonable basis to detennine higher compensation for vast land--Court to
;   adopt the test as to whether a willing pmdent purchaser in the open market
    would be prepared to offer compensation at the rate which the Court proposes
    to detennine in compulsory acquisition--ln the facts of the case, no inter-
    ! erence is called for.                                                        D
            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3030 of
    1990.

         From the Judgment and Order dated 31.12.82 of the Himachal
    Pradesh High Court in R.F.A. No. 19 of 1970.                                   E

            Chandra Prakash Pandey for the Appellant.

            S. Wasim and A. Qadri for the Respondent.

            The following Order of the Court was delivered :                       F
          Notification under Section 4(1) of the Acquisition Act, 1894 (1 of
    1894) (for short, the "Act") was published on December 4, 1965 acquiring
    221 bighas of land for the construction of approach channel to the Inlet
    Portal of S.S. Tunnel by the Beas-Sutlej Link Project. The Land Acquisi-
    tion Officer in his award dated June 26/27, 1968 classified the lands into 9 G
    items (mentioned at page 4 of the Paper Book) and granted compensation    ,.
    at the rate varying between Rs. 2,000 to Rs. 5,000 per bigha. On reference,
    the Additional District Judge confirmed the award of the Collector. On
    appeal, in the impugned judgment dated December 31, 1982 the Division
    Bench in RFA No. 19nO confirmed the same. Thus, this appeal by special H
                                           313
   314                    SUPREME COURT REPORTS (1996) SUPP. 5 S.C.R.

A leave.
         Admittedly, the appellant's claim is for compensation at the rate of
  Rs. 15,000 per bigha. The classification of the land and the amount
  awarded by the Collector would indicate that in respect of Kohli I, Begicha
  and Abadi Deh lands, he granted 2,000 per bigha; in respect of the lands
B B-1, he granted what was asked for, namely Rs. 1500 per bigha. For
  Kohli-II he granted Rs. 1250 per bigha; for item 5 B-11, he granted Rs, 1000
  per bigha; for banjar and uncultivated lands, he granted Rs. 500 per bigha.
  It is one of the rarest cases where the Land Acquisition Officer has granted
  fair compensation. The question, however, arises : whether it is a case for
C further enhancement? The appellant relied upon five sales instances of a
  small extent of land ranging between 6 biswas and 18 biswas spoken to by
  the witnesses as discussed by the High Court. These lands are situated in
  the Abadi, namely village itself. Under those circumstances, those sale
  deeds do not form any reasonable basis to determine higher compensation
  for the vast eXtent of 221 bighas of land. The test that the Court is required
D to adopt is whether a willing prudent purchaser in the open market would
  be prepared to offer compensation at the rate which the Court proposes
  to determine in a compulsory acquisition. In this case, the courts have
  adopted the correct standard and were not inclined to come to the con-
  clusion that the lands would fetch higher than what was determined by the
E Land Acquisition Officer. Under these circumstances, the courts below
  have not committed any error of principle of law in determining the
  compensation, warranting interference.

         The appeal is accordingly dismissed but, in the circumstances,
    without costs.

     G.N.                                                    Appeal dismissed.


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