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Vitthalbhai Bakorbha... v. Executive Engineer, ...
Factual and Procedural Background
The opinion concerns a set of civil appeals by special leave arising from various judgments of the Gujarat High Court relating to compensation for acquired land in Vavol village (now forming part of different sectors of Gandhinagar), specifically Sector 4. A notification under Section 4(1) of the Land Acquisition Act, 1894 was published on 7-7-1983.
The Land Acquisition Officer determined compensation between Rs 20 and Rs 24 per sq. metre. Upon reference under Section 18, the civil court enhanced compensation to between Rs 94 and Rs 110 per sq. metre. In an appeal under Section 54, the Gujarat High Court reduced compensation to Rs 50 per sq. metre (after deductions). The Supreme Court treated the facts of one lead matter as sufficient to dispose of all connected appeals.
Legal Issues Presented
- What was the reasonable market value (and resulting compensation) for the acquired lands in Vavol village (Sector 4) covered by the 7-7-1983 notification?
- Whether the High Court erred in rejecting sale instances from developed areas and instead valuing the land based on income/yield with a multiplier of 10 to arrive at Rs 50 per sq. metre?
- Whether earlier acquisitions/notifications (including an acquisition where market value was said to have become final at Rs 80 per sq. metre) required enhancement of compensation in the present acquisition.
Arguments of the Parties
Appellants' Arguments
- The lands were in a developing area, and plots in developed areas had been sold at about Rs 330 per sq. metre (after deductions), making Rs 50 per sq. metre inadequate.
- For land in the same village acquired under a notification dated 29-1-1978, the market value was determined at Rs 80 per sq. metre and allegedly became final; therefore, the appellants were entitled at least to Rs 80 per sq. metre.
- By another notification dated 18-2-1981 for lands about 300 metres away from the present lands, the appellants claimed entitlement to compensation at least at Rs 80 per sq. metre.
Respondents' Arguments
- The High Court considered all relevant facts and took a pragmatic view; its determination of Rs 50 per sq. metre was not incorrect.
- If compensation for the 1983 acquisition was fixed at Rs 50 per sq. metre, then compensation for lands covered by the 1981 acquisition could not be higher than Rs 50 per sq. metre.
- There was no evidence explaining why the award relating to the 29-1-1978 notification became final; that circumstance could not justify enhancing compensation when the court had determined market value on relevant evidence at Rs 50 per sq. metre.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court considered the central question of determining the reasonable market value for the acquired lands. It noted that all lands in the appeals were situated in Vavol village in Sector 4, and accepted the High Court’s finding that the area was not developed. The reference court had also noted that some lands were agricultural and some non-agricultural.
The Court agreed with the High Court that the sale instances relied upon by the reference court were sales of plots in developed areas and were not comparable to the lands under acquisition; on that basis, those sale instances were treated as an improper (described as “clearly illegal”) foundation for valuation in the present context.
The Court endorsed the High Court’s approach of valuing the land on the basis of yield/income, applying a multiplier of 10. It stated that it is “settled law” that a multiplier of 10 is appropriate and that the annual yield is a proper basis for evaluating market value. On the reasons recorded by the High Court, the Supreme Court held that the determination of Rs 50 per sq. metre was not vitiated by application of any wrong principle of law.
As to reliance on earlier acquisitions, the Court acknowledged that no appeal had been filed in respect of the 1978 acquisition but stated it saw no reason why an appeal could not have been filed, and did not treat the finality of that determination as a basis to enhance compensation in the present case. It further held that lands covered by the February 1981 notification could not be granted higher compensation than lands acquired under the 7-7-1983 notification. Consequently, the High Court’s reasoning was found not to suffer from any error of law.
Holding and Implications
DISMISSED: The appeal and all connected appeals were dismissed, with no order as to costs.
The direct effect is that the Gujarat High Court’s determination of compensation at Rs 50 per sq. metre (after deductions) stands for the lands acquired under the 7-7-1983 notification, and no enhancement is granted based on the appellants’ reliance on other notifications/acquisitions. The opinion does not indicate that any new precedent was laid down beyond applying the stated settled approach of valuation based on annual yield with a multiplier of 10.
Order
1. Leave granted.
2. We have heard learned counsel on both sides.
3. These appeals by special leave arise from various judgments of Gujarat High Court. Facts in first of them, viz., CA @ SLP (C) No. 24953 of 1995 directed against First Appeal No. 704 of 1993 would be sufficient for disposal of all the appeals. The High Court determined the compensation at the rate of Rs 50 per sq. metre (after giving due deductions). Notification under Section 4(1) of the Land Acquisition Act, 1894 was published on 7-7-1983. The Land Acquisition Officer determined compensation between Rs 20 and Rs 24 per sq. metre. On reference under Section 18, civil court fixed it between Rs 94 and Rs 110 per sq. metre. On appeal under Section 54, the High court reduced the compensation to Rs 50 per sq. metre. The lands in this case are situated in Vavol village which is now part of different sectors of Gandhinagar. The lands are in Sector 4. The High Court has pointed that though Sector 4 was an underdeveloped area as stated by the reference court, the plots of land under sale are situated in a developed area, their claim for compensation @ Rs 300 per sq. metre cannot be accepted. The High Court relied upon the yield of the income after taking into consideration all the attendant circumstances and more particularly the location of the land, its proximity to developed area and the existing potentials of its use etc. and applying the multiplier of 10, determined the compensation at the rate of Rs 50 per sq. metre. Shri Bhatt, learned Senior Counsel has contended that when the lands are situated in a developing area and plots in developed area were already sold after ploughing at the rate of Rs 330 per sq. metre after giving due deduction, the determination of the compensation at the rate of Rs 50 is inadequate. He also contended that for the same land in the same village acquired by notification dated 29-1-1978 market value was determined at the rate of Rs 80 per sq. metre which was allowed to become final. The appellants are entitled at least to that rate. He further contended that by virtue of another notification dated 18-2-1981 in respect of lands situated at close proximity of 300 metres to the lands covered in the present notification dated 15-1-1978, the appellants are entitled to compensation at the rate of at least Rs 80. It is contended by Smt H. Wahi, learned counsel for respondents that the High Court has considered all the relevant facts of the case and taken a pragmatic view in determining the compensation. The view arrived at by the High Court cannot be said to be incorrect compensation. When the High Court had determined compensation at the rate of Rs 50 per sq. metre for the acquisition of 1983, for the lands covered by acquisition of 1981 it cannot be higher than the rate of Rs 50 per sq. metre though there is no evidence as to under what circumstances the appeal against the award dated 29-1-1978 had come to become final. It cannot be a ground to further enhance the compensation to the land when the court, on the relevant evidence, had adjudged the reasonable compensation and determined the market value at Rs 50 per sq. metre.
4. Having given anxious consideration to the respective contentions, the question arises as to what will be the reasonable market value for the acquired lands? In these appeals, all the acquired lands are situated in Vavol village in Sector 4. The High Court has recorded a finding that it is not a developed area. The reference court also has noted that some of the lands are agricultural lands and some of the lands are non-agricultural lands. On the basis thereof, the reference court has determined the compensation. All the sale instances of the lands sold in the developed area for determination of compensation by the reference court, as pointed by the High Court are clearly illegal because they are not sales comparable to the sale of lands in question. The High Court, therefore, relied upon the yield of income and applied multiplier of 10. It is now settled law that multiplier of 10 is the appropriate multiplier. Proper basis for evaluating the market value is the annual yield. The finding recorded by the High Court is that the lands are, as existing, capable of fetching market value at the rate of Rs 50 per sq. metre. In view of the reasons recorded by the High Court, we cannot say that the finding is vitiated by any application of wrong principle of law. It is true that in respect of 1978 acquisition no appeal came to be filed, but we do not see any reason as to why the appeal could not be filed. The lands covered in the notification dated February 1981 cannot be given higher compensation than given in respect of land acquired under notification dated 7-7-1983. The reasoning adopted by the High Court, therefore, is not vitiated by any error of law.
5. The appeal and consequentially all connected appeals are accordingly dismissed. No costs.
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