SURESH KUMAR v. TOWN IMPROVEMENT TRUST, BHOPAL

Citation: [1989] 1 S.C.R. 908

Court: Supreme Court of India

Bench: G.L. OZA, K.N. SAIKIA

Case summary

In an appeal under Article 136 of the Constitution of India involving the question of valuation of acquired land, this Court will not interfere with the award unless some erroneous principle has been invoked or some important piece of evidence has been overlooked or...

Judgment text

The Judgment of the Court was delivered by K. N. SAIKIA, J. This Civil Appeal by special leave is from the ·i order dated 7. 10. 1980 of the High Court of Madhya Pradesh, Jabalpur in Misc (F) Appeal No. 78 of 1974, allowing the appeal and enhancing compensation for land acquired by the Improvement Trust, Bhopal. The Improvement Trust, Bhopal, hereinafter referred to as 'the Trust', acquired 152 acres of land of Village Jamalpura by Notification dated 30th April, 1965 issued under Section 68 of the Madhya Pradesh Town Improvement Trust Act, 1960, hereinafter referred to as 'the Act', and took possession of the land sometimes in June, 1967. Out of : ration. On 25. 3. 1966 Notifica(jon under Section 71 of • SURESH v. TOWN IMPROVEMENT TRUST [SAIKIA, J. J 911 the Act was issued vesting the land in the Trust. The Trust offered compensation at the rate of Rs. 950 per acre(@ 14 paise per sq. ft. ) amounting to Rs. 11,997. 00; for the well Rs. 3, 108; and for the trees Rs.

815 and for compulsory acquisition 15% amounting to Rs. 2,400. The appellant made reference, No. 8 of 1970 to the Compensation Tribunal under Section 72(3) of the Act. The Tribunal awarded compensation at the rate. of Rs. 6,000 per acre (Rs. 0. 28 Paise per sqr. ft. ) for the land, Rs. 5,000 for the building, Rs. 3,000 for the well and Rs. 815 for the trees. Thus the Tribunal by its award dated 25th November, 1972 awarded a total sum of Rs. 1,20,060 inclusive of interest as compensation to the appellant, as against his claim at the rate of Rs. 20,000 per acre for the land, Rs. 20,000 for the building, Rs. 5,000 for the well, Rs. 2,500 for the trees and Rs. 10,000 for loss of business and earnings, his total claim amounting to Rs. 13,39,560. On appeal, being Misc. (F) Appeal No. 78 of 1974, the High Court maintained the award in respect of the Building, well and the trees, but enhanced. the compensation in respect of the land determining the market value at Rs.

12,000 per acre and the total area being 12. 62 acres the total compensation inclusive of that allowed for the house etc. and 15% solatium worked out to Rs. 1,84,293. Dissatisfied, the appellant obtained leave and filed this appeal. Dr. L. M. Singhvi learned counsel for the appellant submits, inter alia, that the house and the well were grossly undervalued; that . both the Tribunal as well as the High Court misdirected themselves in treat: iQ.

g the land as agricultural land but not as urbanised developed land on the erroneous ground that there was no building activity of substantial nature at the time of acquisition in spite of the fact that a part of the land was already converted to Abadi; that both the Tribunal as well as the High Court failed to take into consideration the potential value of the land; and that evidence of sales of similar plots was not accepted on the ground that those pertained to small plots; and that the High Court committed an error when it deducted the development charge from the agreed price instead of adding . it to the agreed price while calqilating the market value. Mr.

Krishnamurthi learned counsel for the respondent Trust submits that the house and the well were properly valued; that it was )( not correct that the Tribunal did not correctly consider the question of the nature of the land which ifheld to be agricultural because it did not find therein any building activity of substantial nature. At any rate, counsel submits, the High Court took into consideration the potential value of the land and as such there was no omission to COJ1sider any 'A relevant material or misdirection in tliiS regard. Counsel, however, fails to explain the reason of deducting the development charge from the agreed price, instead of adding it, while calculating market value of the lands on the basis of evidence produced by the claimant. This, however, according to. counsel, is not a sufficient ground for our interference in this appeal under Article 136 of the Constitution of IB India.

' In an appeal under Article 136 of the Constitution of India involving the question of valuation of acquired land, this Court will not interfere with the award unless some erroneous principle has been invoked or some important piece of evidence has been overlooked or misapplied, as was held in Atmaram Bhagwant v. Collector ofNagpur, A. LR. 1929 P. C. 92. In Dollar Company, Madras v. Collector of Madras, 1975 Suppl. S. C. R. 403 the Land Acquisition Officer awarded Rs. 800 per ground as compensation and the City Civil Court on reference awarded at the rate of Rs. 1,000 per ground, and the High Court on appeal awarded Rs. 1800 per ground. The appellant himself purchased the ~nit land about 10 months bii(ore the Notification under Section 4 was made at a price of Rs. 410 i)er ground whereafter the appellant has spent a little- money on filling up a pond.

Dismissing the appeal it was observed that this Court interferes with the judgment of the High Court only if the High Court applies a principle wrongly or because some important point affecting valuation has been overlooked or misapplied. A Court of appeal interferes not when the judgment under attack is not right, but only when it is shown to be wrong. As there was no error in principle in the High Court judgment nor had any of the limited grounds on which that Court's jurisdiction could be legitimately exercised was made out, the appeal was dismissed. There- '--.. , fore, it is for the the appellant to show that there is ground for interfer- I ence in this case. As regards the value of the house, the Land Compensation Tribunal clearly observed that it visited the spot and found that the house 'was in extremely dilapidated condition having big cracks in foundation, walls and pillars. The foundation was getting loose.

The roof of asbestos sheets was sagging, indicating that the wood rafters had been badly damaged. Doors and windows were in bad condition. The two verandahs of the house were temporary, with roof of asbestos sheets. ' The house, according to the Tribunal might be 20 to 25 years old and d~preciation wowd be 5% per year. Considering the above factors SURESH v. TOWN IMPROVEMENT TRUST ISAIKIA, J. I 913 - J( we are of the view that the compensation awarded, namely, Rs. 5,000 is reasonable. Also from evidence we find that Rs. 3,000 for the well was reasonable. There was no error of principle and hence there can be no grievance on these counts. ,. Regarding nature of the land the Tribunal noted that the claimants in most of the references asserted that the acquired land should be 1 valued as urban house site because of alleged potential value and had claimed compensation between the Rs. 3 to Rs. 1 per sqr. ft.

The Trust disputed the claim and urged that the lands at the time of acquisition, -. :~ were either agricultural or- merely fallow land and they had absolutely no urban site value. Th~. claimants also urged that the lands were situated within Corporation limits and lands of some of the claimants were already diverted (converted). We agree with Mr. Krishnamurthi that though the Tribunal treated it as agricultural, the High Court >proceeded on the principle of developed land. · It is true that the marker value of the land acquired has to be correctly determined and paid so that there is neither unjust enrichment on the part of the· acquirer nor undue deprivation on the part of the owner. Dr. Singhvi argues that failing to consider potential value is an error of principle. It is an accepted principle as was laid down in Gajapatiraju v. Rev. Divisional Officer, A. LR. 1939 P. C. 98 that the .. j,.

compensation must be determined by reference to tli_e price which a willing vendor might reasonably expect to obtain from willing purchaser. The disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy it must alike be disregarded. -- Neither must be considered as acting under compulsion. The value of \ the land is not to be estimated at its value to the purchaser but this does not mean that the fact that some particular purchaser might desire the land more than others is to be disregarded. The wish of a r particular purchaser, though not his compulsion, may always be taken . . into _consideration for what it is worth. Any sentimental value for the vendor need not be taken into account. The vendor is to be treated as a vendor willing to sell at the market price. Section 23 of the Land Acquisition Act, 1894, enumerates the matters to be considered in determining compensation.

The first to be taken into consideration is the market value of the land on the date of the publication of the ) - 75 paise (12 annas) per sqr. ft. It had also come in the evidence of Shri Jain that 50 to 60 per cent of the land had to be left for roads, drainage, gardens, school etc. and it was only thei:i that the lay-out plan was sanctioned. High Court, accordingly, deducted improvement charges at the rate of 12 annas per sqr. ft. , and the market rate for unimproved -i land in the light of these agreements worked out to 6 annas per sqr. ft. As 50% of the land at least had to be left out for roads etc; so the market rate of 3 annas per sqr. ft. was applied for the entire undeveloped land. Market rate thus worked out to Rs. 8,000 per acre approximately. However, the High Court awarded Rs. 12,000 per acre. There was an additional factors in the calculation. Mr.

Krishnamurthi therefore submitted that the High Court took into consideration the potential value of the land as a developed area but while making .... calculation it may have committed mistake. To our mind the error was in wholly overlooking the basic price agreed to be paid by the purchaser and the standard of development they visualised. The whole of the basic price could not be expected to be eaten up by the development of the land to the standard contemplated by the vendor and purchaser. When the willing vendor ,has agreed to sell land at 14 annas per sqr. ft. after development and the development charge was to be paid by the willing purchaser, it could be reasonable to deduct only i 50% on account of the land to be set apart for roads, drains etc. and not beyond that. Considering this aspect of the matter and the potential value of the land as urban developed area we are of the view that the compensation may justly be enhanced by 1/6th to Rs. 14,000 per acre and we do so.

We maintain 15% solatium but raise the rate of interest to 9% on the enhanced compensation from today till payment. We leave it open for the appellant to move for higher interest and -. : solatium if entitled by virtue of subsequent judgment of this Court, if any. In the result, this appeal is allowed as above. We make no order as to costs. Y. L. Appeal allowed. II