Land Acquisition | Awards From Different Villages Can Be Relevant To Determine Compensation If Location Is Comparable: Allahabad High Court

The Court relied on two Supreme Court decisions on land in another village, acquired under earlier notifications, while fixing the market value here.

Referring to on Supreme Court's decisions in Ghaziabad Development Authority v. Anoop Singh and Ghaziabad Development Authority v. Ram Krishana , Justice Sandeep Jain held,

“It is true that in the instant case neither the acquired land is situated in village Jatwara Kalan, District Ghaziabad nor has been acquired through notification issued under Section 4(1) of the Act in the year 1962, as such, the principle of same village and same notification is not strictly applicable for determining compensation in the instant case by applying the ratio of the case in Anoop Singh(supra) and Ram Krishana(supra) but in the considered opinion of this Court, the location of the acquired land in the above cases is relevant and can be considered for determining compensation in the instant case.”

Land in village Maharajpur, tehsil Ghaziabad, then part of District Meerut, was acquired for planned industrial development on a proposal by the U.P. State Industrial Corporation Ltd., Kanpur, later UPSIDA. The Section 4(1) notification was published in 1967, possession was taken in 1969 and the Collector awarded ₹1.30 per square yard in 1971. He had examined 25 sale deeds executed in the village in the preceding year, at rates running from ₹0.06 to ₹14 per square yard, and rejected the highest exemplar because the purchaser was a coloniser and the plot measured only 150 square yards.

The 3rd Additional District Judge, Meerut upheld that rate in 1980 while granting solatium at 15% and interest at 6% per annum. It declined to act on the evidence of the company's director, holding that the vendors had not been examined, the account books showing levelling expenditure had not been produced, and the land was not a developed colony.

In first appeal before the High Court, counsel for the company submitted that the highest exemplar had been wrongly ignored and that there is no legal requirement of examining the vendor of an exemplar. He relied on Supreme Court's decisions in Ghaziabad Development Authority v. Anoop Singh and Ghaziabad Development Authority v. Ram Krishana, where ₹85 and ₹42.50 per square yard were awarded for land in village Jatwara Kalan acquired in 1962, which lay farther from New Delhi than the land in question. It was argued that potentiality had to be calculated even if the land was agricultural.

Counsel for UPSIDA submitted that the Jatwara Kalan land was commercial and lay in the heart of Ghaziabad city whereas the acquired land was agricultural and on the outskirts. It was submitted that Section 25 as it stood before amendment barred an award exceeding the amount claimed. He relied on Supreme Court's decision in Manoj Kumar v. State of Haryana to argue that a previous award is only a piece of evidence and cannot be followed mechanically.

The Court held that since the notification, the Collector's award and the reference court's award all preceded 24^th September 1984, the pre-amended Section 25 governed, under which compensation can neither exceed the amount claimed by the landowner nor fall below what the Collector awarded.

The Court relied on Supreme Court's decisions in Land Acquisition Officer-cum-DSWO, Andhra Pradesh v. B.V. Reddy & Sons and Stanes Higher Secondary School v. Special Tahsildar (Land Acquisition), Coimbatore, where Section 25 was held to be substantive and the amended provision, showing no indication of retrospective effect, confined to later acquisitions.

It further relied on Bijender v. State of Haryana, Sajan v. State of Maharashtra and Ram Kishan v. State of Haryana to hold that potentiality is to be taken into account in assessing market value, and means the use to which land is put or is reasonably capable of being put.

On the evidence, the Court found that the land stood on the link road from Mohan Nagar to New Delhi, already functional when it was taken, that the company was a coloniser which had bought it at between ₹1.5 and ₹4.5 per square yard to develop colonies and sell plots at a profit. It noted that large and small industries were operating alongside.

“It is apparent that even though the acquired land was not developed but it's potentiality was immense, because it was situated only at a distance of about 8 km from Connaught Place, New Delhi. It is also apparent that the acquired land of village Maharajpur was located in close proximity to New Delhi in comparison to the acquired land of village Jatwara Kalan(Ghaziabad)in the case of Anoop Singh and Ram Krishana.”

Taking into account the company's claim before the Collector that the land was worth not less than ₹12 per square yard, the money spent developing it and the potentiality of land put to industrial use, the Court fixed compensation at ₹20 per square yard, recording that the statutory cap prevented it from going further.

“This Court is conscious that in the instant case, the pre-amended Section 25 of the Act is applicable and consequently, the company cannot be awarded more than the amount claimed by it before the reference court, hence this Court cannot award the appellant company compensation @ ₹42.50 and ₹85 per square yard, as awarded by the Apex Court in the case of Ram Krishana (supra) and Anoop Singh (supra), respectively. It is apparent that the Collector has awarded inadequate compensation @ ₹1.30 per square yard and the reference court has erred by not enhancing it.”

The appeal was accordingly partly allowed, compensation enhanced from ₹1.30 to ₹20 per square yard, with solatium at 15% and interest at 6% per annum from the date possession was taken till payment. Since the appeal was filed in 1980 but the court fee deficiency was made good only in 2004, interest on the enhanced amount was denied for that intervening period.

Case Title: M/s Mahamaya General Finance Company Ltd. v. State of U.P.

Counsel for Appellant :- H.p. Yadav, H.p. Yadav, J.s. Srivastava, K.c. Gupta, Murlidhar, R.p. Singh, Ravindra Kumar Pandey

Counsel for Respondent :- Ashish Agrawal, Swapnil Kumar

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