Saturday 24 May 2014

Supreme court issued directions in land acquisition case to ensure that claimants are not fleeced by middlemen,


With a view to ensure that the  appellants  are  not  fleeced  by  the
middlemen, we direct the respondent to depute an  officer  of  the  rank  of
Tahsildar who shall contact  the  appellants  and  ask  them  to  open  bank
accounts, if they already do not have such accounts.   This  shall  be  done
within a period of 8 weeks from today.  Thereafter, the  concerned  official
shall inform the respondent about the bank account nos. of  the  appellants.
Within next 8 weeks, the respondent shall deposit the  amount  in  the  bank
account of the appellants in the form of a demand draft got prepared from  a
nationalized bank.
 NON-REPORTABLE


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO.6414 OF  2012




Salaha Begaum Vs     Special Land Acquisition Officer           



Citation;(2013) 11 SCC 426

G. S. Singhvi, J.



1.    Dissatisfied with the enhancement granted by the Karnataka High  Court

in the amount  of  compensation  determined  by  the  Reference  Court,  the
appellants have preferred this appeal.


2.    The appellants’ land comprised in Survey No.39/MF (3 acres 6  guntas),

Survey No.39/E (1 acre 23 guntas) and Survey No.39/MJI (9 acres  15  guntas)
situated in Srirampuram village, Mysore Taluk  was  acquired  by  the  State
Government  for  construction  of   Varuna   Nalla.    For   this   purpose,
notification under Section 4(1) of  the  Land  Acquisition  Act,  1894  (for
short, ‘the Act’)  was  issued  on  9.3.1995.   After  finalization  of  the
acquisition proceedings, the Special Land Acquisition Officer  passed  award
dated 28.11.1995 and fixed market value of the acquired land at the rate  of
Rs.65,000/-  per acre. On a reference made by the  Collector  under  Section
18 of the Act, the Reference Court determined the amount of compensation  at
the rate of Rs.1,00,000/- per acre.


3.    The appellants filed appeals under Section 54 of the Act  and  pleaded

that they were entitled to compensation at the  rate  of  Rs.2,20,000/-  per
acre. The Division Bench of the High Court partly allowed  the  appeals  and
enhanced the amount of compensation from Rs.1,00,000/- to Rs.1,70,000/-  per
acre.


4.    Learned senior counsel for the appellants relied upon  judgment  dated

15.9.2003 of another Division Bench of the High Court  in  MFA  No.2435/2000
Sri Ugregowda v. Special Land  Acquisition  Officer,  registered  sale  deed
dated 7.1.1993 (Exhibit P-12) and  argued  that  the  High  Court  committed
serious error by not awarding compensation to the appellants at the rate  of
Rs.2,20,000/- per acre with benefit of escalation  in  the  price  of  land.
Learned senior counsel pointed out  that  the  land  of  Sri  Ugregowda  was
situated in the same village and was acquired  for  the  same  purpose  i.e.
construction of Varuna Nalla and argued that once the  High  Court  accepted
his claim for higher compensation, there could be no justification  to  deny
similar treatment to the appellants. He further pointed out  that  the  land
belonging to Shri Ugregowda was acquired vide notification  dated  20.1.1993
and that of the appellants’ was acquired vide  notification  dated  9.3.1995
and argued that his clients are entitled to the benefit of 12% increase  per
annum.


5.    Learned counsel for the respondents supported  the  impugned  judgment

and argued that the High Court did not commit any  error  by  fixing  market
value of the appellants’ land at the rate of Rs.1,70,000/- per acre.


6.    We have considered  the  respective  arguments.  Although,  the  lands

belonging  to  the  appellants  and  Sri  Ugregowda  were  acquired  by  two
different notifications, the purpose of  acquisition  was  the  same,  i.e.,
construction of Varuna Nalla. It is not in dispute that in the appeal  filed
by Sri Ugregowda under Section 54 of the Act, the  High  Court  relied  upon
sale deed dated 7.1.1993 and held that he was entitled  to  compensation  at
the rate of Rs.2,20,000/- per acre. However, as Sri Ugregowda  had  confined
his claim for compensation to Rs.2,00,000/- per acre,  the  High  Court  did
not award compensation at the rate of Rs.2,20,000/- per acre.


7.    A careful reading of the impugned judgment shows  that  the   Division

Bench of the High Court did take notice of  sale  deed  dated  7.1.1993  but
treated the sale consideration for three  acres  land  as  Rs.5,10,000/-  by
deducting Rs.1,50,000/- towards value of farmhouse and electric  connection.
 By doing so, the High Court committed serious error because in the case  of
Sri Ugregowda no such deduction was made and sale deed  dated  7.1.1993  was
relied upon for holding that he was entitled to compensation at the rate  of
Rs.2,20,000/- per acre. In our view, once the High Court accepted sale  deed
dated 7.1.1993 as the  touchstone  for  determination  of  the  compensation
payable for identically situated land, there could be no  justification  for
awarding less compensation to the appellants.


8.    Another error committed by the High Court is that  it  has  not  given

the benefit of principle of escalation of  price  to  the  appellants.  This
Court has repeatedly held that the exercise  undertaken  for  fixing  market
value and determination of compensation  payable  to  the  landowner  should
necessarily involve consideration of escalation  in  land  prices  –  Ranjit
Singh v. UT of Chandigarh (1992) 4 SCC 659, Krishi Utpadan Mandi  Samiti  v.
Bipin Kumar (2004) 2 SCC 283, Land Acquisition Officer v.  Ramanjulu  (2005)
9 SCC 594,  Sardar Jogendra Singh v. State of U.P. (2008)  17  SCC  133  and
Revenue Divisional Officer-cum-LAO v. Sk. Azam Saheb (2009) 4 SCC 395.


9.    In ONGC Ltd. v. Rameshbhai Jivanbhai Patel  (2008)  14  SCC  745,  the

Court held as under:


      “Primarily, the increase in  land  prices  depends  on  four  factors:

      situation of the land, nature  of  development  in  surrounding  area,
      availability of land for development in the area, and the  demand  for
      land in the area. In rural areas, unless  there  is  any  prospect  of
      development in the vicinity, increase in prices would be slow,  steady
      and gradual, without any sudden spurts or jumps. On the other hand, in
      urban or semi-urban areas, where the development is faster, where  the
      demand for land is high and where there is construction  activity  all
      around, the escalation in market price is at a much  higher  rate,  as
      compared to rural areas. In some pockets in big cities, due  to  rapid
      development and high demand for land, the escalations in  prices  have
      touched even 30% to 50% or more per year, during the nineties.


      On the other extreme, in remote rural areas where there was no  chance

      of any development and hardly any buyers,  the  prices  stagnated  for
      years or rose marginally at a nominal rate of  1%  or  2%  per  annum.
      There is thus a significant difference in increases in market value of
      lands in urban/semi-urban areas and increases in market value of lands
      in the rural areas. Therefore, if the  increase  in  market  value  in
      urban/semi-urban  areas  is  about  10%  to   15%   per   annum,   the
      corresponding increases in rural areas would at best  be  only  around
      half of it, that is, about 5% to 7.5% per annum. This  rule  of  thumb
      refers to the general trend in the nineties,  to  be  adopted  in  the
      absence of clear and specific evidence relating to increase in prices.
      Where there  are  special  reasons  for  applying  a  higher  rate  of
      increase, or any specific evidence relating to the actual increase  in
      prices, then the increase to be applied would depend upon the same.


      Normally, recourse is taken to the  mode  of  determining  the  market

      value by providing appropriate escalation over the proved market value
      of nearby lands in previous years (as evidenced by  sale  transactions
      or acquisitions), where there is no evidence  of  any  contemporaneous
      sale  transactions  or  acquisitions  of  comparable  lands   in   the
      neighbourhood. The said method is reasonably safe where the  relied-on
      sale transactions/acquisitions precede the subject acquisition by only
      a few years, that is, up to four to five years. Beyond that it may  be
      unsafe, even if it relates to a  neighbouring  land.  What  may  be  a
      reliable standard if the gap is of only a few years, may become unsafe
      and unreliable standard where the gap  is  larger.  For  example,  for
      determining the market value of a land acquired in 1992, adopting  the
      annual increase method with reference to a sale or acquisition in 1970
      or 1980 may have many pitfalls. This is because, over  the  course  of
      years, the ‘rate’ of annual increase may itself undergo drastic change
      apart  from  the  likelihood  of  occurrence  of  varying  periods  of
      stagnation in prices or sudden spurts in  prices  affecting  the  very
      standard of increase.”




10.   In view of the above discussion,  we  hold  that  the  appellants  are

entitled to compensation  at  the  rate  of  Rs.2,20,000/-   per  acre  with
benefit of  10%  increase  for  the  time  gap  of  two  years  between  the
notification issued for the  acquisition of Shri Ugregowda’ s land  and  the
notification issued for the acquisition of their land.


11.   In the result, the appeal is allowed, the  impugned  judgment  is  set

aside and it is declared that the appellants are  entitled  to  compensation
at the rate of Rs.2,64,000/- per acre. The competent authority  is  directed
to pay to the appellants  the  enhanced  compensation  together  with  other
statutory benefits.


12.   With a view to ensure that the  appellants  are  not  fleeced  by  the

middlemen, we direct the respondent to depute an  officer  of  the  rank  of
Tahsildar who shall contact  the  appellants  and  ask  them  to  open  bank
accounts, if they already do not have such accounts.   This  shall  be  done
within a period of 8 weeks from today.  Thereafter, the  concerned  official
shall inform the respondent about the bank account nos. of  the  appellants.
Within next 8 weeks, the respondent shall deposit the  amount  in  the  bank
account of the appellants in the form of a demand draft got prepared from  a
nationalized bank.
                                                …..……….....……..….………………….…J.
                             [G.S. SINGHVI]




                                                    …………..………..….………………….…J.

                           [SUDHANSU JYOTI MUKHOPADHAYA]
New Delhi,
December 03, 2012.




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