NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.24108-24158 OF 2017 (@ SLP (C) No.37368-37418 OF 2017) [Arising out of SLP [C] No....................................

STATE OF HARYANA & ANR.

... APPELLANTS

VERSUS

ROHTAS & ETC. ETC.

... RESPONDENTS

J U D G M E N T

ARUN MISHRA, J.

1. Leave granted.

2. The appeals have been preferred by the State of Haryana and another aggrieved by the judgment and order dated 17.5.2016 passed by the High Court of Punjab & Haryana at Chandigarh determining the compensation for villages Garauli Kalan and Dhankot. The notification under section 4 of the Land Acquisition Act, 1894 was issued on 22.2.2007 for public purpose of development Date: 2014-2015<br>17.05002<br>Masson from Garauli Kalan upto Nazafgarh drain at Gurgaon.

3. The Land Acquisition Collector passed an award on 20.2.2009 for aforesaid villages determining the compensation at uniform rate of Rs.20 lakhs per acre. On reference the Reference Court vide judgment dated 4.2.2013 assessed the market value of the land for village Garauli Kalan at the uniform rate of Rs.34,17,670 per acre. 25% was granted towards severance charges.

4. Reference Court vide another judgment dated 11.4.2013 determined the market value of the land for village Dhankot at the uniform rate of Rs.87,20,000 per acre and 25% as severance charges. That the High Court had determined the compensation for the aforesaid villages vide common judgment dated 17.5.2016, for village Garauli Kalan enhancement has been made from Rs.34,17,670 to Rs.58,27,500 per acre with 50% of severance charges; for village Dhankot the market value has been enhanced from Rs.87,20,000 to Rs.1,81,00,000 per acre along with statutory benefits and 50% severance charges.

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5. We have heard learned counsel for the parties at length. We are not happy with the way in which the High Court has determined the compensation without applying the settled proposition of law. The High Court has failed to apply the appropriate cuts which have to be applied for development and in case exemplar is for small area. The High Court has not looked into whether the sale deed dated 22.2.2007 executed on the date on which notification under Section 4 had been issued could have been relied upon, as it might have been executed after having knowledge of notification. The High Court should have looked into in the circumstances and new evidence on record. Severance charges have also been granted without any discussion on extremely higher side. We are not happy with the way in which the High Court has overall determined compensation and decided the matter.

6. In Major General Kapil Mehra & Ors. v. Union of India & Anr. (2015) 2 SCC 262 this Court has discussed the matter thus:

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"33. In Haryana State Agricultural Market Board and Anr. v. Krishan Kumar and Ors. (2011) 15 SCC 297, it was held as under:

. It is now well settled that if the value of small developed plots should be the basis, appropriate deductions will have to be made therefrom towards the area to be used for roads, drains, and common facilities like park, open space, etc. Thereafter, further deduction will have to be made towards the cost of development, that is, the cost of leveling the land, cost of laying roads and drains, and the cost of drawing electrical, water and sewer lines.

34. Consistent view taken by this Court is that one third deduction is made towards the area to be used for roads, drains, and other facilities, subject to certain variations depending upon its nature, location, extent and development around the area. Further, appropriate deduction needs to be made for development cost, laying roads, erection of electricity lines depending upon the location of the acquired land and the development that has taken place around the area.

35. Reiterating the rule of one third deduction towards development, in Sabhia Mohammed Yusuf Abdul Hamid Mulla (Dead) by L.Rs. and Ors. v. Special Land Acquisition Officer and Ors.(2012) 7 SCC 595, this Court in paragraph 19 held as under:

19. In fixing the market value of the acquired land, which is undeveloped or underdeveloped, the courts have generally approved deduction of 1/3rd of the market value towards development cost except when no development is required to be made for implementation of the public purpose for which land in acquired. In Kasturi v. State of Haryana (2003) 1 SCC 354) the Court held: (SCC pp. 359-60, para 7)

7... It is well settled that in respect of agricultural land or undeveloped land which has potential value for housing or commercial purposes, normally 1/3rd amount of compensation has to be deducted out of the amount of compensation payable on the acquired land subject to certain variations depending on its nature, location, extent of expenditure involved for development and the area required for road and other civic amenities to develop the land so as to make the plots for residential or commercial purposes. A land may be plain or uneven, the soil of the land may be soft or hard bearing on the foundation for the purpose of making construction; may be the land is situated in the midst of a developed area all around but that land may have a hillock or may be low-lying or may be having deep ditches. So the amount of expenses that may be incurred in developing the area also varies. A claimant who claims that his land is fully developed and nothing more is required to be done for developmental purposes, must show on the basis of evidence that it is such a land and it is so located. In the absence of such evidence, merely saying that the area adjoining his land is a developed area, is not enough, particularly when the extent of the acquired land is large and even if a small portion of the land is abutting the main road in the developed area, does not give the land the character or a developed area. In 84 acres of land acquired even if one portion on one sides abuts the main road, the remaining large area where planned development is required, needs laying of internal roads, drainage, sewer, water, electricity lines, providing civic amenities, etc. 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, may be 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 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.

(emphasis supplied)

The rule of 1/3rd deduction was reiterated in Tejumal Bhojwani v. State of U.P. (2003) 10 SCC 525, V. Hanumantha Reddy v. Land Acquisition Officer (2003) 12 SCC 642, H.P. Housing Board v. Bharat S. Negi (2004) 2 SCC 184 and Kiran Tandon v. Allahabad Development Authority. (2004) 10 SCC 745"

36. While determining the market value of the acquired land, normally one third deduction i.e. 331/3% towards development charges is allowed. One third deduction towards development was allowed in Special Tehsildar, L.A. Vishakapatnam v. Smt. A. Mangala Gowri (1991) 4 SCC 218; Gulzara Singh and Ors. v. State of Punjab and Ors. (1993) 4 SCC 245; Santosh Kumari and Ors. v. State of Haryana (1996) 10 SCC 631; Revenue Divisional Officer-cum-LAO v. Shaik Azam Saheb etc. (2009) 4 SCC 395; A.P. Housing Board v. K. Manohar Reddy (2010) 12 SCC 707; Ashrafi and Ors. v. State of Haryana and Ors. (2013) 5 SCC 527 and Kashmir Singh v. State of Haryana and Ors. (2014) 2 SCC 165.

37. Depending on nature and location of the acquired land, extent of land required to be set apart and expenses involved for development, 30% to 50% deduction towards development was allowed in Haryana State Agricultural Market Board and Anr. v. Krishan Kumar and Ors. (2011) 15 SCC 297; Deputy Director Land Acquisition v. Malla Atchinaidu and Ors. AIR 2007 SC 740; Mummidi

Apparao (Dead by LR) v. Nagarjuna Fertilizers and Chemical Ltd. AIR 2009 SC 1506; and Lal Chand v. Union of India and Anr. (2009) 15 SCC 769.

38. In few other cases, deduction of more than 50% was upheld. In the facts and circumstances of the case in Basavva (Smt.) And Ors. v. Spl. Land Acquisition Officer and Ors. (1996) 9 SCC 640, this Court upheld the deduction of 65%. In Kanta Devi and Ors. v. State of Haryana and Anr. (2008) 15 SCC 201, deduction of 60% towards development charges was held to be legal. This Court in Subh Ram and Ors. v. State of Haryana and Anr. (2010) 1 SCC 444, held that deduction of 67% amount was not improper. Similarly, in Chandrasekhar (dead) by L.Rs. and Ors. v. LAO and Anr. (2012) 1 SCC 390, deduction of 70% was upheld.

39. We have referred to various decisions of this Court on deduction towards development to stress upon the point that deduction towards development depends upon the nature and location of the acquired land. The deduction includes components of land required to be set apart under the building rules for roads, sewage, electricity, parks and other common facilities and also deduction towards development charges like laying of roads, construction of sewerage."

7. In Chimanlal Hargovinddas v. Special Land Acquisition Officer, Poona & Anr. (1988) 3 SCC 751 it

was observed:

"4. The following factors must be etched on the mental screen:

(1) A reference under Section 18 of the Land Acquisition Act is not an appeal against the award and the Court cannot take into account the material relied upon by the Land Acquisition Officer in his Award unless the same material is produced and proved before the Court.

(2) So also the Award of the Land Acquisition Officer is not to be treated as a judgment of the trial Court open or exposed to challenge before the Court hearing the Reference. It is merely an offer made by the Land Acquisition Officer and the material utilised by him for making his valuation cannot be utilised by the Court unless produced and proved before it. It is not the function of the Court to suit in appeal against the Award, approve or disapprove its reasoning, or correct its error or affirm, modify or reverse the conclusion reached by the Land Acquisition Officer, as if it were an appellate Court.

(3) The Court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it.

(4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in the Court. Of course the materials placed and proved by the other side can also be taken into account for this purpose.

(5) The market value of land under acquisition has to be determined as on the crucial date of publication of the notification under Section 4 of the Land Acquisition Act(dates of Notifications under Sections. 6 and 9 are irrelevant).

(6) The determination has to be made standing on the date line of valuation (date of publication of notification under Section 4) as if the valuer is a hypothetical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price.

(7) In doing so by the instances method, the Court has to correlate the market value reflected in the most comparable instance which provides the index of market value.

(8) Only genuine instances have to be taken into account. (Some times instances are rigged up in anticipation of Acquisition of land).

(9) Even post notification instances can be taken into account (1) if they are very proximate, (2) genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects.

(10) The most comparable instances out of the genuine instances have to be identified on the following considerations:

(i) proximity from time angle, (ii) proximity from situation angle.

(11) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-a-vis land under acquisition by placing the two in juxtaposition.

(12) A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in terms of price variation as a prudent purchaser would do.

(13) The market value of the land under acquisition has thereafter to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors.

(14) The exercise indicated in Clauses (11) to (13) has to be undertaken in a common sense manner as a prudent man of the world of business would do. We may illustrate some such illustrative (not exhaustive) factors:

(15) The evaluation of these factors of course depends on the facts of each case. There cannot be any hard and fast or rigid rule. Common sense is the best and most reliable guide. For instance, take the factor regarding the size.

A building plot of land say 500 to 1000 sq. yds cannot be compared with a large tract or block of land of say 1000 sq. yds or more

Firstly while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a lay out, carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers (meanwhile the invested money will be blocked up) and the hazards of an entrepreneur. The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approx. between 20% to 50% to account for land required to be set apart for carving out lands and plotting out small plots. The discounting will to some extent also depend on whether it is a rural area or urban area, whether building activity is picking up, and whether waiting period during which the capital of the entrepreneur would be looked up, will be longer or shorter and the attendant hazards. (16) Every case must be dealt with on its own facts pattern bearing in mind all these factors as a prudent purchaser of land in which position the

(17) These are general guidelines to be applied with understanding informed with common sense.

Judge must place himself.

8. We set aside the judgment and order passed by the High Court and request it to decide the case in accordance with law in the light of the observations made in the order.

9. The Civil Appeals are disposed of accordingly.

.......................J. (ARUN MISHRA)

.......................J. (MOHAN M. SHANTANAGOUDAR)

NEW DELHI; DECEMBER 12, 2017.

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C)..CC No(s).2050-2100/2017 (Arising out of impugned final judgment and order dated 17-05-2016 in RFA No. 3158/2013 17-05-2016 in RFA No. 3159/2013 17-05-2016 in RFA No. 3160/2013 17-05-2016 in RFA No. 3161/2013 17-05-2016 in RFA No. 3162/2013 17-05-2016 in RFA No. 3163/2013 17-05-2016 in RFA No. 3164/2013 17-05-2016 in RFA No. 3165/2013 17-05-2016 in RFA No. 3166/2013 17-05-2016 in RFA No. 3167/2013 17-05-2016 in RFA No. 3168/2013 17-05-2016 in RFA No. 3169/2013 17-05-2016 in RFA No. 3170/2013 17-05-2016 in RFA No. 3971/2013 17-05-2016 in RFA No. 3972/2013 17-05-2016 in RFA No. 3973/2013 17-05-2016 in RFA No. 4636/2013 17-05-2016 in RFA No. 4637/2013 17-05-2016 in RFA No. 4638/2013 17-05-2016 in RFA No. 4639/2013 17-05-2016 in RFA No. 4640/2013 17-05-2016 in RFA No. 4746/2013 17-05-2016 in RFA No. 4989/2013 17-05-2016 in RFA No. 5041/2013 17-05-2016 in RFA No. 5042/2013 17-05-2016 in RFA No. 5770/2013 17-05-2016 in RFA No. 5771/2013 17-05-2016 in RFA No. 5772/2013 17-05-2016 in RFA No. 5773/2013 17-05-2016 in RFA No. 5774/2013 17-05-2016 in RFA No. 5775/2013 17-05-2016 in RFA No. 5776/2013 17-05-2016 in RFA No. 5777/2013 17-05-2016 in RFA No. 5778/2013 17-05-2016 in RFA No. 5779/2013 17-05-2016 in RFA No. 5780/2013 17-05-2016 in RFA No. 5781/2013 17-05-2016 in RFA No. 5850/2013 17-05-2016 in RFA No. 6098/2013 17-05-2016 in RFA No. 6414/2013 17-05-2016 in RFA No. 6415/2013 17-05-2016 in RFA No. 6416/2013 17-05-2016 in RFA No. 6806/2013 17-05-2016 in RFA No. 6807/2013 17-05-2016 in RFA No. 6808/2013 17-05-2016 in RFA No. 6978/2013 17-05-2016 in RFA No. 239/2014 17-05-2016 in RFA No. 2297/2014 17-05-2016 in RFA No. 4996/2014 17-05-2016 in RFA No. 6124/2014 17-05-2016 in RFA No. 8815/2014 passed by the High Court of Punjab & Haryana at Chandigarh)

THE STATE OF HARYANA

THR. COLLECTOR & ANR. Petitioner(s)

VERSUS

ROHTAS AND OTHERS & ANR. Respondent(s) (FOR CONDONATION OF DELAY IN FILING ON IA 1/2017 FOR CONDONATION OF DELAY IN REFILING ON IA 52/2017)

Date : 12-12-2017 These matters were called on for hearing today.

CORAM :

HON'BLE MR. JUSTICE ARUN MISHRA HON'BLE MR. JUSTICE MOHAN M. SHANTANAGOUDAR

For Petitioner(s)

Mr.Alok Sangwan, Adv. Dr.Monika Gusain, Adv.

Mr.Gautam Sharma, Adv. Mr.Sanjay Kumar Visen, AOR For Respondent(s) Mr.V.M.Popli, Adv. Mr.Anurag, Adv. Mr.Siddharth Batra, Adv. Mr.Ravinder Kumar, Adv. Mr.Ajit Sharma, Adv. Mr.Naresh Kaushik, Adv. Mr.R.P.Kaushik, Adv. Mr.Manoj Joshi, Adv. Mr.Mukul Kaushik, Adv. Mr.Omung Raj Gupta, Adv. Ms.Lalita Kaushik, Adv. Mrs.B. Sunita Rao, AOR Mr.Aditya Singh, AOR Dr.Kailash Chand, AOR Mrs.Amita Gupta, AOR Mr.Jay Kishor Singh, AOR UPON hearing the counsel the Court made the following O R D E R Delay condoned. Leave granted. The civil appeals are disposed of in terms of the

signed order.

(Ashok Raj Singh) (Madhu Narula) Court Master Court Master (Signed Order is placed in the file)