- Bookmark
- Share
- CaseIQ
Hookiyar Singh And Others v. Special Land Acquisition Officer, Moradabad And Another
Factual and Procedural Background
A notification under Section 4(1) of the Land Acquisition Act, 1894 was published on 28-9-1981 for acquisition of 171.46 acres in Village Tigarea Bhoor, Tehsil Hansanpur, District Moradabad for a public purpose—industrial development through the Uttar Pradesh State Industrial Development Corporation (UPSIDC).
The Land Acquisition Officer (LAO) classified the land into several categories and, relying on Sale Deed No. 51, fixed compensation at a highest rate of Rs 15,500 per acre, decreasing it for lower-grade classifications. Upon a reference under Section 18, the District Judge on 22-5-1989 enhanced the compensation uniformly to Rs 40,000 per acre.
Both the claimants and the State challenged the award before the High Court. The High Court discarded the LAO’s classification, held that all parcels commanded one value, accepted the same sale deed, multiplied its value five-fold based on uncontroverted oral testimony, and ultimately fixed compensation at Rs 50,000 per acre. The claimants, the State, and UPSIDC then filed the present appeals.
Legal Issues Presented
- Whether the acquired land should be treated uniformly for valuation purposes despite the LAO’s prior classification.
- What constitutes “just and adequate” compensation for the land as of the Section 4(1) notification date.
Arguments of the Parties
Claimants
- Through oral evidence they asserted that the consideration shown in the key sale deed understated the real price paid.
- Contended that refunding any excess compensation already paid would be burdensome, urging confirmation of the higher values fixed by the courts below.
State/UPSIDC
- Did not “seriously dispute” before the High Court that the land could be valued uniformly.
- Through counsel Shri Manoj Swarup, noted that UPSIDC had sold the acquired plots to beneficiaries at rates lower than those fixed by the courts and suggested it could recover any proportionate increase in compensation from such allottees.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court accepted the High Court’s unchallenged finding that all parcels held equal value, rendering the LAO’s classifications irrelevant. However, it scrutinised the evidentiary basis for valuation:
- Observed that the sale deeds relied on involved small plots, with only one covering about an acre and that too connected to a claimant and his wife, raising doubts about its representativeness.
- Noted that the District Court’s reliance on “future potentiality” was misplaced because Section 24 (clause fifthly) bars consideration of subsequent industrial use.
- Reiterated the settled principle that the burden of proving market value rests on the claimants, and that courts must test the genuineness of sale deeds rather than accept figures blindly, applying the “prudent purchaser” test.
- Taking into account: (i) fluctuating market prices ranging from Rs 5,000 to Rs 49,500 per acre, (ii) the large acquisition size, (iii) the agricultural nature and location of land, and (iv) the unreliable nature of the key sale deed, the Court fixed a uniform market value of Rs 35,000 per acre.
- Rejected the claimants’ plea to maintain higher awards merely to avoid refund obligations, emphasising the appellate court’s duty to set proper compensation.
Holding and Implications
The appeals are disposed of. The Court determined the market value at Rs 35,000 per acre for all acquired land.
Direct implications: Claimants will receive compensation recalculated at Rs 35,000 per acre; any excess previously paid must be refunded, and UPSIDC may recover corresponding amounts from subsequent allottees. The decision turns on fact-specific valuation and sets no new broad precedent.
Order
1. Substitution allowed.
2. Leave granted. We have heard learned counsel on both sides.
3. Notification under Section 4(1) of the Land Acquisition Act, 1894 (for short ‘the Act’) acquiring an extent of 171.46 acres of land situated in Village Tigarea Bhoor, Tehsil Hansanpur, District Moradabad for public purpose, viz., UPSIDC, was published on 28-9-1981. The Land Acquisition Officer (LAO) classified the lands into several categories and accepting the sale deed, Item 51, determined compensation at the highest rate of Rs 15,500 and gradually reduced the market value basing upon the classification. On reference under Section 18, the District Judge by his award and decree dated 22-5-1989 increased the compensation to Rs 40,000 per acre. Dissatisfied with the determination of the compensation, the claimants as well as the State filed appeals in the High Court.
4. As seen, the High Court proceeded on the premise that the classification of the lands was not warranted, the entire land commands same value and that, therefore, uniform rate of market value is required to be adopted in determining the compensation. The High Court had accepted the sale deed relied on by the LAO and on that basis it increased the market value by five times, holding that in the oral evidence of the claimants they had stated that they paid much more than what was reflected as consideration in the sale deed and that there was no cross-examination in that behalf. It fixed the market value at Rs 62,500 and ultimately determined the compensation in respect of all lands at Rs 50,000 per acre. Thus these appeals by claimants and the State as well as the UPSIDC.
5. The question for consideration is: what is the just and adequate compensation to which the lands would command determination? We accept the finding of the High Court as the State did not seriously dispute in the High Court that all the lands are of equal value and, therefore, compensation should be determined uniformly in respect of all lands. It is seen that the market value of the lands varies from Rs 5000 to Rs 49,500 per acre. But the sale deeds are of small extents of land. Only one sale deed in which large extent of land, i.e, one acre and odd was sold, appears to be related to one of the claimants and part of the transfer was in favour of his wife. The civil court also pointed out that those lands are abutting the national highway and that they do not command the same market value as the lands under acquisition. In view of those facts, we cannot accept the sale deed to be reflective of the true and genuine market value. But the fact remains that the LAO himself had adopted the highest rate of Rs 15,500 and the High Court accepting the sale deed relied on by the LAO had enhanced the market value five times accepting the oral evidence.
6. It is settled law that the burden of proof of market value prevailing as on the date of publication of Section 4(1) notification is always on the claimants. Though this Court has time and again pointed out the apathy and blatant lapse on the part of the acquiring officer to adduce evidence and also improper or ineffective or lack of interest on the part of the counsel for the State to cross-examine the witnesses on material facts, it is the duty of the court to carefully scrutinise the evidence and determine just and adequate compensation. If the sale deeds are found to be genuine, the market value mentioned therein must be presumed to be correct. If the genuineness is doubted, it cannot be relied upon. Proper tests and principles laid down by this Court must be applied to determine compensation. Since the LAO as well as the High Court placed reliance on the sale deed which commanded market value of a maximum of Rs 15,000 and odd, the question is: what would be the just and adequate compensation to be paid in respect of the lands? The court must not indulge in feats of imagination but, sit in the armchair of a prudent purchaser in open market and to put a question to itself whether as a prudent purchaser it would offer the same price in the open market as is to be determined? This should be the acid test. The District Court was not right in holding that the lands are possessed of future potentiality as public purpose is industrial development. Section 24 clause fifthly prohibits taking into consideration future user to which the land will put when acquired. Considered from the fluctuation in the prices placed on record and large area involved in the acquisition, situation of the lands, actual user of the lands as agricultural lands and on the totality of the facts in this case, treating all the lands as agricultural lands, we are of the considered view that the market value of the land per acre would be Rs 35,000. The claimants are accordingly entitled to this amount. It is no ground for the claimants to contend that as they are required to refund the difference of the compensation amount, the amount determined by the High Court or Reference Court should be confirmed. If that contention is given acceptance in no case proper compensation can be fixed by the appellate court.
7. It is stated by Shri Manoj Swarup, learned counsel that the lands have been sold to the beneficiaries at lesser rates than what was determined. It would be obvious that if higher compensation was paid in respect of the lands, UPSIDC is entitled to recover the proportionate increase in the compensation from the allottees.
8. The appeals are accordingly disposed of. No costs.
Alert