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Supreme Court of India
Shankarrao Bhagwantrao Patil … vs The State Of Maharashtra Through … on 20 September, 2021Author: Hemant Gupta
Bench: Hemant Gupta, V. Ramasubramanian
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 5712-5713 OF 2021
(ARISING OUT OF SLP (CIVIL) NOS. 33471-33472 OF 2016)
SHANKARRAO BHAGWANTRAO PATIL ETC. …..APPELLANT(S)
VERSUS
THE STATE OF MAHARASHTRA …..RESPONDENT(S)
WITH
CIVIL APPEAL NOS. 5714-5715 OF 2021
(ARISING OUT OF SLP (CIVIL) NOS. 33876-33877 OF 2016)
JUDGMENT
HEMANT GUPTA, J.
1. The present appeals are directed against the order dated
22.03.2016 passed by the High Court of Judicature at Bombay,
Aurangabad in the First Appeals filed by the land owners and the
State determining the compensation of the land acquired at the
rate of Rs.317/- per square meter (29 per square feet) apart from
Signature Not Verified
the statutory benefits, thus reducing the compensation awarded by
Digitally signed by
Jayant Kumar Arora
Date: 2021.09.21
14:29:27 IST
Reason:
the learned Reference Court on 13.08.2003 at the rate of Rs. 70
per square feet.
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2. The land of the appellants measuring 40R (1R = 100 square
meters or 1089 square feet) comprising of a land survey no.
220/4/b was taken into possession by the State through private
negotiations on 14.09.1984. The market price payable to the
landowners was to be settled by negotiations but, since the price
could not be decided, therefore the land comprising land survey
no. 220/4/b admeasuring 40R was intended to be acquired vide
notification dated 04.02.1999 under Section 4 of The Land
Acquisition Act, 18941 published in the Maharashtra Government
Gazette. Such land is the subject matter of Civil Appeals arising out
of SLP (Civil) Nos. 33471-33472 of 2016. The State also intended
to acquire land admeasuring 30R and 20R comprising of Survey
Number 212/b and 220/4 vide the above said notification as well.
The possession of such land was taken on 21.10.1992. Such land is
the subject matter of Civil Appeals arising out of SLP (Civil)
Nos.33876-33877 of 2016. The other statutory requirements were
completed and two separate awards were announced. The learned
Special Land Acquisition Collector determined market value
considering the two sale instances both dated 24.04.1997 forming
a part of the land comprising of Survey No. 220 of an area of 92
square meters sold for a sum of Rs. 3500/-. The first award was
announced on 26.03.2002 in respect of the land admeasuring 40R.
The learned Special Land Acquisition Collector awarded a sum of
Rs.232/- per square meter. The second award was announced by
1 For short the ‘Act’
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the Land Acquisition Collector on 6.4.2002 awarding a
compensation of Rs.217/- per square meter for 1390 square meters
of land out of Survey No. 220/4 and Rs.168/- per square meters
comprising of Survey No. 212/1/b, whereas in respect of the land
admeasuring 100 square meters out of Survey No. 212/1/b, a
compensation of Rs. 179/- per square meter was granted.
3. The land owners dissatisfied with the amount of compensation,
sought reference under Section 18 of the Act claiming
compensation at the rate of Rs. 150/- per square feet for the entire
land measuring 90R. It has also come on record that the land,
subject matter of the appeals, is similarly situated and forms a part
of Bhoom Municipal Council. The population of Bhoom Municipal
Council is 17510 and the land is described in the revenue record as
barren land. PW 1 – Shankarrao had admitted that the land was
rocky and moorum (powdered rock) soil.
4. The land owners relied upon two sale deeds, i.e. Exhibit 30 dated
05.04.1995 whereby the land falling under Survey No. 220 was
sold for a sum of Rs. 3,00,051/- in pursuance of an agreement to
sell dated 02.11.1994. A sum of Rs. 1,00,000/- was to be paid
before 1.11.1995. The Reference Court calculated the rate of the
sale price, it was recorded to be Rs. 137.76 per square feet. The
rate has not been disputed before the High Court or even before
this Court. The land owners relied upon another sale deed i.e.
Exhibit 31 dated 04.09.1996 whereby the land measuring 49.5 x
16.5 feet (816. 75 square feet) was sold for a sum of Rs.1,90,000/-
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that is Rs. 232.50 per square feet. Such property is described as
Municipal Council New Property Number 1480 and 1480/1. The
learned Reference Court arrived at the compensation of Rs.70/- per
square feet of the land acquired after deducting 20% of the price
mentioned in Exhibit 30 and 31 on account of development
charges.
5. However, the High Court in further appeals filed by the State and
the land owners dismissed the appeal of the land owners for
enhancement but reduced the compensation to Rs.317/- square
meter (29 per square feet). The High Court found that the sale
instances are in respect of the land but in fact the houses were
constructed thereon therefore, the sale deed includes the cost of
construction of the house, such cost has to be reduced. The High
Court also held that since the acquisition is of a large area of 9000
square meters, therefore, the suitable development charges are
required to be deducted as the sale instances pertain to the
smaller area. After discussing the evidence, the High Court
redetermined the compensation as mentioned above.
6. Before this Court, Mr. Jayant Bhushan, learned Senior Advocate on
behalf of the land owners argued that as per Exhibit 30, a plot
measuring 66 x 33 feet (2178 square feet/ 202 square meter) was
sold at the rate of Rs.137.76 per square feet. Another sale instance
Exhibit 31, a plot measuring 815.75 square feet was sold at the
rate of Rs.232.62 per square feet. The land, subject matter of the
sale instance Exhibit 30 and 31 are close to the acquired land inas-
4
much as the land in Exhibit 31 is just 150 feet from the acquired
land. It is argued that the sale instances are of an open land.
Therefore, the finding of the High Court that the land had houses is
not supported by evidence as the permission for construction was
granted only in the year 1997 after the acquisition of sale deed
dated 1996. The learned counsel further argued that in view of the
judgment of this Court in Meharawal Khewaji Trust v. State of
Punjab2, the highest rates from the sale exemplar is to be taken,
therefore, Exhibit 31 is a more suitable exemplar which is required
to be made the basis for determination of compensation.
7. The learned counsel for the appellant also relied upon the judg-
ment of this Court reported as Maya Devi (Dead) Thr. Lrs v.
State of Haryana and Anr.3 that 33% deduction could be made
for large lands being acquired when the exemplar is for a smaller
area. Thus, with Exhibit 31 having the sale price of Rs.232/- per
square feet and 33% deduction is made, the rate would come out
to be Rs.160 per square feet. Therefore, the amount claimed by
the land owners i.e. at the rate of Rs.150/- per square feet should
have been awarded.
8. It is also argued that since the possession was taken in the year
1984/ 1992 though the notification under Section 4 of the Act was
published in the year 1999, therefore, an interest on the amount of
compensation awarded from the date of possession should have
been granted. The reliance is placed upon judgments of this Court
2( 2012) 5 SCC 432
3 (2018) 2 SCC 474
5
reported as R.L. Jain v. DDA & Ors.4, Madishetti Bala Ramul v.
Land Acquisition Officer5, Tahera Khotoon & Ors. v. Revenue
Divisional Officer/Land Acquisition Officer & Ors 6., Balwan
Singh & Ors. v. Land Acquisition Collector & Anr.7. It is thus
argued that the order of the High Court to remit the matter to the
Collector for determination of the compensation from the date of
possession till the date of notification is clearly erroneous and the
land owners would remain further deprived of the value of the ac-
quisition of land.
9. On the other hand, Mr. Sachin Patil, learned counsel for the State
argued that houses were constructed on the land in question which
is evident from the Tax Assessment Register for the period 1983-84
till 1.1.97 (Annexure A-3) filed by the appellant with additional doc-
uments showing the assignment of House property number. In fact,
the sale deed itself is of Municipal Council Property No. 1186/1
(New No. 1481/1). Still further, the permission to construct relied
upon by the appellant is dated 28.1.1997 which was granted to the
vendor, though the land stood sold to the appellant on 4.9.1996.
Thus, the entire story of the land being an open land is not true. It
is argued that the land, subject to the sale exemplar is a very small
area as against the large track of acquired land measuring almost
2 acres. The sale exemplars relied upon by the appellants are of
the smaller area. Therefore, the deduction of at least 50% is re-
4 (2004) 4 SCC 79
5 (2007) 9 SCC 650
6 (2014) 13 SCC 613
7 (2016) 13 SCC 412
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quired to be made towards the land required for development
works apart from the deduction on account of the value of the
house constructed. It is argued that the sale exemplars Exhibit 30
and 31 respectively are not relevant since they are not a part of
the land which is the subject matter of the acquisition. In fact, the
sale exemplars referred to the Reference Court are in respect of
the land acquired. Therefore, the said sale instances become the
most relevant exemplars.
10. We have heard the learned counsel for the parties. We find that the
Exemplar Exhibit 30 is in respect of Survey No. 220 of a sale deed
executed on 05.04.1995. Exemplar 31 is not a part of Survey No.
220 but has been assigned Municipal Council New Property No.
1480 and 1481/1, because the land is situated close to the ac-
quired land. The argument that the construction was raised in pur-
suance of the permission granted on 28.01.1997, therefore, the
finding of the High Court that the house was already constructed is
not tenable. We find that the reliance of the appellant on the Exem-
plar Exhibit 31 is absolutely untenable and based on a false repre-
sentation. A perusal of the permission dated 28.01.1997 shows
that it was granted to Govind Rajaram Bhagwat for the construc-
tion of a house on Plot No. 1480/1, vendor. Such property had al-
ready been sold on 04.09.1996. Still further, the house tax assess-
ment register produced by the appellant shows that the property
was assessed to house tax in the name of Govind Rajaram Bhag-
wat from the year 1983-1984 till 01.01.1997. Therefore, such land
7
had a house constructed thereon, which was assessed to House
Tax as well. The commencement certificate is not reliable since it is
granted to the vendor of the purchaser. Therefore, Exhibit 31 is ex-
cluded from consideration.
11. Thus, the judgment of this Court in Mehrawal Khewaji Trust is of
no help to the appellant inasmuch as the best exemplar Exhibit 31
referred to by the appellant has been found to be a non-bonafide
transaction. In the absence of such an exemplar, only Exhibit 30
remains to be examined in which, the plot of land, of the same
survey number was sold at the rate of Rs. 137.76 per square feet.
12. The question of deductions on account of an exemplar of a smaller
plot as compared to a larger area under acquisition has come up
for consideration before this Court in Chimanlal Hargovinddas v.
Special Land Acquisition Officer, Poona and Anr.8. This Court
held as under:
“8. …….The first two grounds are devoid of merit. It is
common knowledge that when a large block of land is required
to be valued, appropriate deduction has to be made for setting
aside land for carving out roads, leaving open spaces, and
plotting out smaller plots suitable for construction of buildings.
The extent of the area required to be set apart in this
connection has to be assessed by the court having regard to
the shape, size and situation of the concerned block of land
etc. There cannot be any hard and fast rule as to how much
deduction should be made to account for this factor. It is
essentially a question of fact depending on the facts and
circumstances of each case. It does not involve drawing upon
any principle of law.
xxx xxx xxx
12. In the result appellant must be awarded compensation
at Rs 7000 per acre subject to deduction or allowance of 25
8 (1988) 3 SCC 751
8
per cent to account for land required to be set apart for roads,
open spaces etc. In other words appellant will be entitled to be
paid compensation for 13 acres 7 gunthas comprised in Survey
No. 85 at Rs 5250 per acre (Rs 7000 less 25 per cent i.e. less
1750 = Rs 5250) in place of the lesser sum awarded by the
High Court. Appeal must be partly allowed to this extent
accordingly.”
13. In the aforesaid case, reliance of the landowners was on an
exemplar which reflected the sale price of Rs. 20,000/- per acre
which was situated on the Ganeshkhand Road as against Rs.
7,000/- per acre assessed by the High Court. The Court noticed that
the unloading was Rs. 13,000/- per acre which works out at 65%.
14. In the judgment reported as Lal Chand v. Union of India and
Anr.9, this Court held that deduction for development is to be made
to arrive at the market value of large tracts of undeveloped
agricultural land (with potential for development) the deduction
varies from 20% to 75% of the price of such developed plots. This
Court held as under:
“13. The percentage of “deduction for development” to be
made to arrive at the market value of large tracts of
undeveloped agricultural land (with potential for
development), with reference to the sale price of small
developed plots, varies between 20% to 75% of the price of
such developed plots, the percentage depending upon the
nature of development of the layout in which the exemplar
plots are situated.
14. The “deduction for development” consists of two
components. The first is with reference to the area required to
be utilised for developmental works and the second is the cost
of the development works. For example, if a residential layout
is formed by DDA or similar statutory authority, it may utilise
around 40% of the land area in the layout, for roads, drains,
parks, playgrounds and civic amenities (community facilities),
9 (2009) 15 SCC 769
9
etc.
15. The development authority will also incur considerable
expenditure for development of undeveloped land into a
developed layout, which includes the cost of levelling the land,
cost of providing roads, underground drainage and sewage
facilities, laying water lines, electricity lines and developing
parks and civil amenities, which would be about 35% of the
value of the developed plot. The two factors taken together
would be the “deduction for development” and can account for
as much as 75% of the cost of the developed plot.
xxx xxx xxx
22. Some of the layouts formed by the statutory
development authorities may have large areas earmarked for
water/sewage treatment plants, water tanks, electrical
substations, etc. in addition to the usual areas earmarked for
roads, drains, parks, playgrounds and community/civic
amenities. The purpose of the aforesaid examples is only to
show that the “deduction for development” factor is a variable
percentage and the range of percentage itself being very wide
from 20% to 75%.”
15. This Court in the judgment reported as Kasturi and Ors. v. State
of Haryana10, held that there may be various factual factors which
may have to be taken into consideration while applying the cut in
payment of compensation towards developmental charges, maybe
in some cases it is more than 1/3rd and in some cases less than
1/3rd. This Court held as under:
“7 …….. However, in cases of some land where there are
certain advantages by virtue of the developed area around,
it may help in reducing the percentage of cut to be applied,
as the developmental charges required may be less on that
account. There may be various factual factors which may
have to be taken into consideration while applying the cut in
payment of compensation towards developmental charges,
maybe in some cases it is more than 1/3rd and in some
cases less than 1/3rd. It must be remembered that there is
difference between a developed area and an area having
potential value, which is yet to be developed. The fact that
10 (2003) 1 SCC 354
10
an area is developed or adjacent to a developed area will
not ipso facto make every land situated in the area also
developed to be valued as a building site or plot, particularly
when vast tracts are acquired, as in this case, for
development purpose.”
16. Exhibit 30 is part of the same survey number whereby land was
sold at the rate of Rs.137.76 square feet. In the present case, there
is no evidence that the sale exemplar Exhibit 30 was a part of any
developed layout but is an isolated instance of sale. Such sale of a
small area as compared to the acquisition of 9000 square meters
can be taken into consideration after a suitable deduction is made
on account of the development cost. The land in question was
rocky and had a moorum soil. Such land is not cultivable. Still
further, the State has taken possession of a part of the land in
1984 and another part in 1992 as is apparent from the reading of
the two awards of the Special Land Acquisition Officer. The Bhoom
town has a small population of 17150. The possession of the land
was taken for construction of government quarters and a road.
Since the use of the land for a government quarter was known,
therefore, the smaller area was sold keeping in view the intended
use of the land acquired for the residential purposes. The
deduction of 50% is proper as the sale deed was executed after 11
years of possession of rocky land and moorum soil was taken.
Therefore, we find that deduction towards the development cost at
the rate of 50% is warranted in the facts of the present case. Thus,
the compensation to be awarded is (137.76/2= 69 rounded off to
Rs.70 per square feet) which was the market value assessed by the
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Reference Court as well.
17. We find that the order of the learned Reference Court is justified in
law whereas the High Court has reduced the compensation drasti-
cally without any reasonable basis. Therefore, we find that the ap-
pellant is entitled to a compensation at the rate of Rs.70/- per
square feet from the date of award by the Land Acquisition Collec-
tor. Apart from statutory benefits, such compensation has been ar-
rived at keeping in view the development activity that has already
taken place by the virtue of possession of the acquired land deliv-
ered to the State.
18. The possession of the land acquired was taken in the year 1984/
1992. The land owners have claimed interest from 1984/1992 when
the possession was taken, whereas the acquisition is in the year
1999. In respect of the argument for determination of amount of
compensation from the date possession was taken by the State till
the date of notification under Section 4 of the Act, judgments relied
upon by the appellant have been referred to in para 8 above. A pe-
rusal of the said judgments shows that grant of payment of interest
for the pre-acquisition period is in the nature of an order passed un-
der Article 142 of the Constitution to do substantial justice. Keeping
in view the aforesaid judgments, we find that instead of remitting
the matter to the Land Acquisition Collector for determination of
the compensation for use and occupation by the State, we deem it
appropriate to decide this issue in the present appeal itself.
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19. There is no evidence that such land was being put to use by the
landowners even prior to the taking of possession by the State. But
the fact remains that the possession has been taken without pay-
ment of compensation depriving the landowners of the right to use
land. Therefore, the land owners would be entitled to interest on
the amount of compensation awarded at the rate of 9% per annum
from the date of possession which was taken in the year
1984/1992 till the date of notification under Section 4 of the Act on
the amount awarded after acquisition that is the sum of Rs.70/- per
square feet. The appellant shall be entitled to others statutory ben-
efits on the compensation amount of Rs.70/- per square feet from
the date of award till realization. With the above said directions,
the appeals are disposed of.
………………………………………J.
(HEMANT GUPTA)
………………………………………J.
(V. RAMASUBRAMANIAN)
NEW DELHI;
SEPTEMBER 20, 2021
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