Baldev Krishan Singh vs Land Acquisition Collector

V.K. Bali, J.—After working out average of comparable sale instance, a cut of little more than 50% has been applied in assessing the market value of the acquired land at the time of issuance of notification u/s 4 of the Land Acquisition Act, 1894 (hereinafter referred to as the ''said Act'').

Concededly, area of the appellant hereinafter referred to as ''the claimant'') abutted on two main roads and was located in Khanna town itself and was being used for running flour mill and other factory. Facilities of electricity and water supply were available. Undisputed findings returned by the learned Additional District Judge reveal that the acquired land of the claimant was a very valuable piece of land. Its location was ideal. It was already being used for commercial purpose. Two factories were being run on it. One was Balak Ram Flour and Oil Mills and the other was Punjab Wooden Industries. It adjoined the New Grain Market and had been acquired for its extension. It was fully developed. Facilities of electricity and water were already available. There was no need to further develop it. It was a small compact piece of land. It was already being used for commercial purposes for the last more than 30 years. Grain Market, Khanna was the greatest grain market in the country.

Such being the location and development of the land under acquisition, the only question that has been mooted out by the claimant in this appeal filed by him under the Clause X of the Letters Patent is as to whether a cut of 50% from the average price of the comparable sale instance that was cited before the Court, was justified.

Brief facts of the case, insofar as the same are relevant for determination of the point raised in the present appeal, as mentioned above, reveal that pursuant to notification, u/s 4 of the said Act, published on January 25, 1978 some land including land measuring 2 kanals 12 marlas, owned by the claimant, where there was a running flour mill and other factory, and which was situated within the municipal limits of Khanna town, was sought to be acquired for the extension of new grain market. Follow-up declaration u/s 6 was issued on July 2, 1979. The Land Acquisition Collector, vide his aware dated January 30, 1980, assessed the market value of the land under acquisition at Rs.52,000/- i.e. Rs.1,60,000/- per acre. On a reference made by the claimant u/s 18 of the said Act, learned Additional District Judge, vide his award dated August 24, 1984 assessed Rs. 94,250/- as market value of the land under acquisition. On a further appeal, learned Single Judge vide orders dated August 10, 1989 assessed the market value of the acquired land as Rs.100/- per sq. yard. Still not satisfied, claimant has preferred this appeal for further enhancement.

The claimant, in support of his claim of Rs.200/- per sq. yard, relied upon sale instances, Ex.AW9/1 to Ex.AW9/16. Undisputedly, all these sale instances are of small pieces of land but are certainly comparable vis-a-vis the land under acquisition. The average price of said sale instances works out to be Rs.204.12 per sq. yard and while applying a cut of 1/2, learned Single Judge worked out the market value of the land under acquisition @ Rs.100/- per sq. yard. Learned Single Judge also discussed sale instances Ex.AW6/A, AW6/B and AW6/C vide which booths of small sizes in the acquired land itself were later sold @ Rs.300/-per sq. yard. With a view to support the assessment of market value of the acquired land @ Rs.100/- per sq. yard, learned Single Judge, was of the opinion that since sale instances, Ex.AW6/A to Ex.AW6/C were in the shape of small plots and sufficient area was left for parks, roads and other common purposes and as lot of space had to be left while converting on ordinary land into a grain market, for providing parks and open space for parking of vehicles etc., 2/3rd cut ought to have been applied on these sale instances and in that way also, market value could be assessed @ Rs.100/- per sq. yard.

During the course of arguments, learned counsel for the parties were ad-idem that insofar as Ex.AW6/A to Ex.AW6/C are concerned, these could not at all be relied upon to assess the market value of the land under acquisition. All these instances came into being after notification u/s 4 of the said Act was issued and the booths were purchased by way of auction. These sale instances have, thus, to be ignored while working out market value of the acquired land. Insofar as sale instances, Ex.AW9/1 to Ex.AW9/16 are concerned, the same are such instances that can be compared with the land under acquisition. The only question, as mentioned above, is as to whether, on the sale price of EX.AW9/1 to AW9/16, a cut of 50% is justified?

It is true that when a vast area of land is acquired, instance of small places of land do not furnish a very satisfactory guidance to arrive at the market price of the land when the land under acquisition has a potential of being converted into industrial, commercial or residential area, normally a cut of 25 or 30% is applied in view of the fact that land, after acquisition, has to be developed in such a away that streets, parks and other facilities do normally exhaust 1/3rd of the land under acquisition. It is, however, too well settled that slashing down the price by 30% of the comparable sale instances of small pieces of land is not universally true. In other words, there is no strait-jacket formula that might necessarily require a cut of 1/3rd. Depending upon the facts and circumstances of each case, it may be more or less. We may illustrate what we have said above by giving few examples. In a given case, small piece of land, cited as sale instances for working out the market value may in itself have been notified u/s 4 of the Act, obviously, if it is proved that price represented by such sale instance is a genuine one, a cut of 1/3rd shall be wholly unjustified. Conversely, if a land, subject matter of acquisition, has a vivid disadvantage with regard to accessibility or otherwise, as compared to the sale instance, that may otherwise provide a comparable instance, a cut of more than 30% would naturally be justified. In the present case, as mentioned above, the land under acquisition had since been developed from last 30 years. It was fully developed. So much so, two well established factories were running on the same. It was in heart of the busy town and one of the most prestigious and important Mandi in whole of the State. We are of the firm view that a cut of 50% from the comparable sale instance is not justified. As mentioned above, there is no strait-jacket formula for slashing the price and it all depends on facts and circumstances of each case. On the facts, as are before us, we are of the view that 25% cut would have been just and proper. The market value of the land, thus, ought to have been worked out by making a cut of 25% from the average sale instance cited by the claimants. As mentioned above, the average of sale instances Ex.AW9/1 to Ex.AW9/16 works out to be Rs.204.04/- per sq. yard. If 25% cut is applied, it shall work out to Rs. 153.03 per sq. yard. By rounding of the same we work out the market value of the acquired land @ Rs.153/- per sq. yard.

In view of the above discussion, the claimant is held entitled to compensation @ Rs.153/- per sq. yard. Order of learned Single Judge is modified to the extent aforesaid. The claimant shall also be entitled to all statutory benefits admissible to him under the Act, as have been allowed by the learned Single Judge, on the enhanced amount of compensation The appeal is, thus, partly allowed with proportionate costs.