Incremental value of land from admitted or proved exemplars till the acquisition is evident – CLU certificate discharges the initial burden of establishing that the land under acquisition is not agricultural land – Therefore, apply the standard deduction 1/3 on exemplar value and are not persuaded to factor incremental increase on the exemplar – Market value of the lands Increased – Appeals allowed in part.

SUPREME COURT OF INDIA

DIVISION BENCH

BESCO LIMITED — Appellant

Vs.

STATE OF HARYANA & OTHERS — Respondent

( Before : B.R. Gavai and S.V.N. Bhatti, JJ. )

Civil Appeal No(S). of 2023; (Arising out of SLP(C) No(S).4487 of 2022) with Civil Appeal No. of 2023; (Arising out of SLP (C) No.4872 of 2022); Civil Appeal No. of 2023; (Arising out of SLP (C) No.4996 of 2022); Civil Appeal No. of 2023; (Arising out of SLP (C) No.14506 of 2022); Civil Appeal No. of 2023; (Arising out of SLP (C) No.6893 of 2023); Civil Appeal No. of 2023; (Arising out of SLP (C) No.14507 of 2022); Civil Appeal No. of 2023; (Arising out of SLP (C) No.5574 of 2023); Civil Appeal No. of 2023; (Arising out of SLP (C) No.5546 of 2023); Civil Appeal No. of 2023; (Arising out of SLP (C) No.5549 of 2023); Civil Appeal No. of 2023; (Arising out of SLP (C) No. ); (@ Dy. No(S). 10986 of 2023)

Decided on : 23-08-2023

Acquisition of land – Compensation – Determination of market value – Belting of area for valuation would be incorrect – Land under acquisition cannot be completely treated as agricultural land, and at the same time, the land cannot also be treated as forming part of a developed or approved layout – Land has been in the hands of the landowners for industrial use, and therefore, the applicable deduction to the cases on hand could be 33 per cent – Incremental value of land from admitted or proved exemplars till the acquisition is evident – CLU certificate discharges the initial burden of establishing that the land under acquisition is not agricultural land – Therefore, apply the standard deduction 1/3 on exemplar value and are not persuaded to factor incremental increase on the exemplar – Market value of the lands Increased – Appeals allowed in part.

Counsel for Appearing Parties

Ms. Kaveeta Wadia, Advocate, Mr. Shashank Tripathi, Advocate, Ms. Kiran Suri, Sr. Advocate, Mr. R.P. Kaushik, Advocate, Mr. S.J. Amith, Advocate, Ms. Vidushi Garg, Advocate, Mr. Mukul Kaushik, Advocate, Ms. Aishwarya Kumar, Advocate, Mr. Purvesh Buttan, Advocate, Dr. (mrs. ) Vipin Gupta, Advocate and Mr. Abhigya Kushwah, Advocate, for the Appellant; Mr. Alok Sangwan, Sr. AAG, Mr. Sumit Kumar Sharma, Advocate, Mr. Rajat Sangwan, Advocate, Mr. Vishnu Tallapragada, Advocate, Mr. Vipul Dahiya, Advocate, Mr. Apoorv Yadav, Advocate, Mr. Vaibhav Yadav, Advocate and Mr. Samar Vijay Singh, Advocate, for the Respondent.

Cases Referred

• Acquainted Realtors LLP v. The State of Haryana, (2021) 11 SCC 177
• Bhagwathula Samanna and others v. Special Tahsildar and Land Acquisition Officer, Visakhapatnam Municipality (1991) 4 SCC 506
• Dilbagh Singh and others Vs State of Haryana, 1016(1) RCR (Civil) 736
• Haryana State Agricultural Market Board v. Krishan Kumar, (2011) 15 SCC 297
• Kasturi v. State of Haryana, (2003) 1 SCC 354
• Lal Chand v. Union of India, (2009) 15 SCC 769
• Nelson Fernandes v. Special LAO, (2007) 9 SCC 447
• Shaji Kuriakose And Anr vs Indian Oil Corpn. Ltd. And Ors, (2001) 7 SCC 650
• Smt. Basavva and Ors. v. Special Land Acquisition, (1996) 9 SCC, 640
• Tehsildar Land Acquisition, Vishakhapatnam v. Smt. A Mangala Gowri, (1991) 4 SCC 218
• Tribeni Devi v. Collector of Ranchi, (1972) 1 SCC 480
• Viluben Jhalejar Contractor v. State of Gujarat, (2005)4 SCC 789

JUDGMENT

S.V.N. Bhatti, J. – Leave granted.

2. The Civil Appeals arise from the Common Judgment and Decree dt. 02.11.2021 in RFA No. 1232 of 2019, in the High Court of Punjab and Haryana at Chandigarh. The landowners covered by Sec. 4(1) Notification dt. 13.05.2010 issued under the Land Acquisition Act, 1893 (for short, “the Act”), are appellants before us. The appeals are filed claiming enhanced compensation. Appeals relate to the Notification dt. 13.05.2010. The acquired lands are located in (i) Village Malpura, (ii) Village Kapriwas and Sidhrawali. Hence, they are disposed of by the Common Judgment.

2.1. The State of Haryana, through the District Collector, District Rewari, issued Sec. 4(1) Notification under the Act, proposing to acquire land measuring 1222 Kanal, 6 Marla for establishing and developing an integrated industrial complex and other public utilities in Village Malpura, Sub Tehsil Dharuhera, District Rewari. The Industrial Complex is administered and run by Haryana State Industrial Development Corporation (HSIDC), Tehsil – Bawal, District – Rewari. The Land Acquisition Officer (LAO) by the award dt. 10.05.2013 determined the compensation payable to the landowners. The parties are called landowners, the State, LAO and the HSIDC for convenience. The details of the appellants/ landowners, etc., are stated in the following table:

3. The circumstances preceding the passing of the award, the claim of landowners, and documents relied on for claiming compensation in considerable detail are referred to both, by the High Court and the Reference Court. Therefore, the circumstances necessary for disposing of the batch appeals are adverted to in the judgment.

4. The landowners based on the potential of the acquired land claim commensurate market value as of 13.05.2010. The acquired land is in a controlled area declared by the State of Haryana. Industrial Estate Dharuhera, Primary School at Village Maheshwari, Ghatal Mehnias and Aakera are at a proximate distance. The acquired land is claimed as situated in the industrial zone at Sector 15, Dharuhera. Apart from the advantageous neighbourhood of establishments and industries, the land under acquisition is located alongside National Highway No. 8, i.e., Delhi-Jaipur Highway and Industrial Sectors 15, 16 & 17. Further, land sectors 8, 9, 10, 12 & 13 are opposite the industrial sectors of 17 and 16 across National Highway No. 8. Many development activities have occurred in and around the land acquired. The landowners refer to the existence of industrial units such as Penam Labs, U.B. Group, Capsu Gel, Weston, Hero Motors Ltd., RIICO, Omax, Sona Koya, M. Teck, Bestech, Utility Engineering, Luthra, IST etc within a radius of 1 k.m. of the acquired land. The acquired land had change in land use (CLU) under the Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act, 1963. The gist is that the acquired land cannot be treated as an agricultural land.

5. The second Respondent/ LAO in the award enquiring primarily accepted the market rate determined by a Divisional Level Land Rates Fixation Committee under the Chairmanship of the Commissioner of the Division. The Chairman furnished the data on the request made by the LAO. The rates determined by the said Committee are excerpted hereunder:

6. The award dt. 10.05.2013 determined the market value of the land acquired through Notification dt. 13.05.2010 as follows:-

(Emphasis added)

7. The excerpted portion discloses that the LAO has not determined the market value/compensation to the land acquired in compliance with Sections 23 and 24 of the Act. The rates determined by the Divisional Level Land Rates Fixation Committee, which is no more res integra, do not reflect the market value of the property acquired or basis for awarding compensation. It is a matter of record on the protest by the landowners; the determination of compensation was referred to the Additional District and Sessions Judge, Rewari.

7.1. The Reference Court, through the award dt. 21.11.2018, enhanced the compensation from Rs. 66,00,000/- to Rs. 67,12,050/- per acre. The Reference Court relied upon the exemplar in Ex. PW 4/3 dt. 13.08.2008 for an extent of 12 Kanal and 2 Marlas in Malpura Village, sale consideration of Rs. 2,16,00,000/- at Rs. 1,42,80,991/- per acre. The Reference Court refers to the judgments reported in “Smt. Basavva and Ors. v. Special Land Acquisition, (1996) 9 SCC, 640; Bhagwathula Samanna and others v. Special Tahsildar and Land Acquisition Officer, Visakhapatnam Municipality (1991) 4 SCC 506; Viluben Jhalejar Contractor v. State of Gujarat, (2005)4 SCC 789; Dilbagh Singh and others Vs State of Haryana, 1016(1) RCR (Civil) 736“, deducted 60 per cent of the value in Ex. PW 4/3 and granted 10 per cent increment per annum from the date of sale till the date of Sec. 4 (1) Notification.

7.2. The landowners aggrieved by the deduction of 60 per cent from exemplar; and non-consideration of available sale exemplars of developed lands and grant of a minimum increase in value at 10 per cent per annum, filed regular first appeals before the Punjab and Haryana High Court in R.F.A No. 1232 of 2019 and batch. The High Court through the Impugned Judgment determined the market value for the lands at Malpura at Rs. 1,21,33,320/-.

The brief consideration or conclusion of the High Court for arriving at Rs. 1,21,33,320/- per acre is excerpted here under:

Hence, the appeals for determination of market value and compensation payable for the land acquired.

8. We have perused the judgment under appeal and noted the rival contentions of the parties. The point for decision is in a very narrow compass.

9. The Learned Counsel appearing for the landowners contend that the High Court committed a serious illegality in referring to and applying the principle laid down in Lal Chand v. Union of India, (2009) 15 SCC 769, for arriving at the market value of Rs. 1,21,33,320/-. The determination is without a reason. The High Court taking note of the potentiality of the land acquired; the development in the neighbourhood and the purpose of acquisition rightly held that a 60 per cent deduction on the exemplar relied on by the trial court in Ex. P-4/3, is illegal and untenable. The Lal Chand case (supra) refers to permissible deduction between 20 to 75 per cent on exemplar sales, while arriving at the market value of the acquired land. In other words, the percentage of deduction the court adopts must be practical, pragmatic and realistic.

9.1 The Counsel invites our attention to the overall development of the neighbourhood as on Sec. 4(1) Notification dt. 13.05.2010 to claim enhanced compensation. The High Court, having held that the deduction of 60 per cent from the exemplar in Ex. P-4/3 is illegal, still did not adopt a correct percentage of deduction for arriving at the market value. It is pointed out that the High Court examined Ex. P-4/3 dt. 13.08.2008, a sale transaction of a property located in Village Malpura. The High Court recorded a finding of fact that there is no clear-cut boundary or division between Malpura and Kapriwas villages, and on another hand, the land acquired through the Notification and the land covered by Ex. P-4/3 dt. 13.08.2008. To sum up, the argument is even by applying the principle laid down in the Lal Chand case (supra), the determination of market value payable as compensation by the High Court suffers from serious flaws. The breach of mandate of Sec. 23 of the Act is manifested both in adopting exemplar Ex. P-4/3 or making a wrong deduction on the sale consideration recorded by the exemplar. The High Court ought to have accepted Ex. P-Y, upward land value increase in the locality for determining the compensation payable under the subject land acquisition.

10. The Learned Counsel appearing for the Respondents contends that the market value determined by the High Court is completely on the higher side. The High Court lost sight of the total extent acquired through Sec. 4(1) Notification dt. 13.05.2010. The extent acquired through the acquisition proceedings is 153 acres. The Reference Court has examined all the relevant circumstances and applied the very principle laid in the Lal Chand case (supra) and determined the correct compensation payable for the subject land. The Learned Counsel commends to the Court to apply the belting system in determining compensation to the lands abutting the National Highway and lesser compensation to the lands situated away from the National Highway. He invites our attention to the finding recorded by the Reference Court and argues that the compensation determined by the High Court is on the higher side. He prays for either modifying the compensation determined by the High Court or confirm the compensation awarded by the Reference Court.

11. We have taken note of rival contentions and perused the record. Prima facie we are of the view that the appeals on hand do not present laying down a principle for determining compensation for the subject acquisition. The appeals on the other hand call upon us to apply the very precedents and rely on the same exemplars, however, by adopting a correct method and mode. The following sale exemplars are taken note of as located in and around or nearer to the land under acquisition.

Sale exemplars

12. A careful perusal of the above table makes one argument for the appellants, i.e., the High Court failed to stipulate the percentage of deduction while determining the market value. The reasoning must be complete in arriving at the compensation payable as Rs. 1,21,33,320/-. We are convinced that the conclusion of the High Court does not satisfy the requirements stipulated by Sec. 23 of the Act in determining the compensation.

12.1. (i) The High Court substantially accepted that the land under acquisition is in the neighbourhood of a developing area;

13. A court, in determining the market value of acquired land as one of the factors, relies on exemplar sale deeds, decides the location/ potentiality of the land sold through a private sale, and compares the nature and neighbourhood of the land acquired. The court is guided by relevant and admissible evidence and practical or pragmatic ways of commercial transactions suitable adjustment towards deduction for development charges and developed area.

13.1. The Reference Court relied on Ex. P-4/3 dt. 13.08.2008. Ex. P-4/3 is in respect of land situated in Village Malpura. The Sec. 4(1) Notification is dt. 13.05.2010. Ex. P-4/3 is anterior in point of time, and the extent of land is 12 Kanal 2 Marlas, which cannot be treated as a small residential or commercial plot. The Reference Court determined compensation after deducting 60 per cent towards development. The High Court, in our considered view, has rightly disagreed with the approach of the Reference Court. But the High Court failed by arriving at a market value of Rs. 1,21,33,320/- without factoring in an applicable deduction. We are convinced that Ex P-2 and P-4/3 are not appropriate exemplars to rely on and are taken into consideration for appreciating the upward increase in market value in the subject village.

14. The findings of fact recorded both by the Reference Court and the High Court are kept in our perspective viz that as on the date of acquisition, the lands under acquisition were having CLU certificate under Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act, 1963. The land under acquisition cannot be completely treated as agricultural land, and at the same time, the land cannot also be treated as forming part of a developed or approved layout. The land has been in the hands of the landowners for industrial use, and therefore, the applicable deduction to the cases on hand could be 33 per cent. The incremental value of land from admitted or proved exemplars till the acquisition is evident from Ex. P-4/3 and Ex. P-Y.

15. We are convinced that the land values in Malpura Village as evidenced in Ex. P-Y dt. 15.02.2010 are increasing. Ex P-Y has been brought on record as additional evidence before the High Court. The Map filed as Annexure P-1 in SLP No. 4487 of 2022 presents a quick view of the location, distance etc. of both, the acquired land and the land covered by private sale. The extent of land covered by Ex. P-Y is 5 Kanal, 2 Marla. The land in Ex. P-Y is on the western side beyond National Highway No. 8 [Delhi-Jaipur Highway]. The land in sale exemplar Ex. P-Y is in Malpura Village. The sale consideration in P-Y is Rs. 1,42,62,445/-for 5 Kanal, 2 Marla, per acre works out to Rs. 2,23,72,463. Ex. P-Y dt. 15.02.2010 is immediately preceding Sec. 4(1) Notification dt. 13.05.2010. Therefore, we place reliance on Ex. P-Y and is an applicable exemplar for determining the market value of the land under acquisition. The above discussion takes us to the next aspect viz applicable deduction on the exemplar.

16. The acquired lands are not shown or established as agricultural land. Admittedly, substantial portions of the land under acquisition is abutting the National Highway No. 8. The area, even by the date of acquisition, is developed with industries in the proximity and has good potential for industrial use. CLU certificate discharges the initial burden of establishing that the land under acquisition is not agricultural land. Therefore, we apply the standard deduction 1/3 on exemplar value and are not persuaded to factor incremental increase on the exemplar in as much as the time gap between Ex. P-Y and Sec. 4(1) Notification is brief. Assessed as above, the market value payable to 1 acre in Malpura village is arrived as follows:

17. The subject lands are acquired under one notification and the plan brought on record evidences the location and proximity to development in and around the acquired land. The belting of area for valuation would be incorrect. We reject the argument of the State. Since we have not applied incremental value on the exemplar, we deem it just to determine uniform market value to the lands under acquisition.

18. Hence, for the above reasons and discussion we allow the appeals in part and determine the market value at Rs. 1,49,14,975/-per acre for the acquired lands with standard statutory benefits. Appeals allowed in part. No order as to costs.