Whether condition mentioned in allotment letter of land is binding on purchaser after execution of sale deed?

 We do not find any merit in any of the aforesaid arguments. In the first instance, it needs to be emphasised that there is no such condition of completion of construction within a period of two years in the sale deed. Such a condition was only in the allotment letter. However, after the said allotment, the Appellant-Corporation not only received entire consideration but executed the sale deeds as well. In the sale deeds no such condition was stipulated. Therefore, the High Court is right in holding that after the sale of the property by the Appellant-Corporation to the Respondents, whereby the Respondents acquired absolute marketable title to the property, the Appellant-Corporation had no right to insist on the conditions mentioned in the allotment letter, which cease to have any effect after the execution of the sale deed.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 3020, 2995, 2994,of 2018

Decided On: 10.04.2018

 The Andhra Pradesh Industrial Infrastructure Corporation Limited 

Vs.

 S.N. Raj Kumar and Ors.

Hon'ble Judges/Coram:

A.K. Sikri and Ashok Bhushan, JJ.

Citation: 2019(1) MHLJ 587

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Whether semi-urban land can be granted more compensation under land acquisition?

The second error committed by the High Court is that while fixing market value, it did not take into account the escalation in land prices. In Ranjit Singh v. U.T. of Chandigarh (1992) 4 SCC 659, Land  Acquisition Officer and Revenue Divisional Officer v. Ramanjulu (2005) 9 SCC 594,Krishi Utpadan Mandi Samiti v. Bipin Kumar (2004) 2 SCC 283, Sardar Jogendra Singh v. State of U.P. (2008) 17 SCC 133, Revenue Divisional Officer-cum-L.A.O. v. Shaik Azam Saheb (supra) and Oil and Natural Gas Corporation Ltd. v.

Rameshbhai Jivanbhai Patel (supra), this Court has repeatedly held that the exercise undertaken for fixing market value and determination of the compensation payable to the landowner should necessarily involve consideration of escalation in land prices. In the last mentioned judgment, the Court noticed the earlier precedents and observed as under:

"We have examined the facts of the three decisions relied on by the respondents. They all related to acquisition of lands in urban or semi-urban areas. Ranjit Singh related to acquisition for development of Sector 41 of Chandigarh. Ramanjulu related to acquisition of the third phase of an existing and established industrial estate in an urban area. Bipin Kumar related to an acquisition of lands adjoining Badaun-Delhi Highway in a semi-urban area where building construction activity was going on all around the acquired lands.

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."

23. Though it may appear repetitive, we deem it necessary to mention that the acquired land is situated in the close vicinity of various residential colonies, educational institutions, hospitals etc. and is on the junction of two important roads. Therefore, it can safely be concluded that the land is semi-urban and has huge potential for being developed as housing sites and the High Court should have added 10% per annum escalation in the price specified in the sale deeds relied upon for fixing market value of the acquired land.

REPORTABLE

Supreme Court of India

Valliyammal & Anr vs Spl.Tahsildar(Laq) & Anr on 1 August, 2011

Bench: G.S. Singhvi, H.L. Dattu

Citation: AIR 2011 SC 2937

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When agricultural land will have non agricultural potentiality for grant of compensation under land acquisition Act?

 The sale instances in relation to the small residential plots covered in the sale deeds Exhs. 20-21 are situated in the same area, which sales were prior to the issuance of the preliminary notification i.e. before 14.06.1990 and it has similar topographical and physical characteristics and the fact is that the land of the appellants is acquired for the purpose of industrial development, which has got the potentiality for development of the land as industrial estate and to carve out industrial plots in it. That the acquisition of the land is for commercial purpose should be the relevant criteria for determining the market value by both the Land Acquisition Officer and reference Court placing reliance upon the sale instances even in relation to small plots of land, though it is shown from the records that the acquired land on the date of notification is an agricultural land. But the acquired land has got non agricultural potentiality as the said land was proposed by the District Collector after identifying the land for acquisition and stated that it is suitable for the purpose of industrial development. Therefore, the principles laid down at para 16 of Sabhia Mohammed Yusuf Abdul Hamid Mulla's case and the principles laid down in Viluben Jhalejar Contractor’s case referred to supra laid down the criteria for determination of the market value of the acquired land. Also, in Atma Singh’s case (supra) it was stated that the criteria for the determination of the market value the potentiality of the acquired land should also be taken into consideration which has been explained stating that potentiality means capacity or possibility for changing or developing into a state of actuality. Further, the legal principles laid down in the case of Atma Singh (supra)at para 5 which portion is extracted above, gives us the criteria to be followed for determination of the market value of a property keeping in view its existing condition with all its existing advantages and its potential possibility when let out in its most advantageous manner. The various criteria laid down in the above referred case namely, the existing amenities like water, electricity, possibility of their further extension, whether near about the acquired land, town is developing or has prospect of development in future, have to be taken into consideration by both the Land Acquisition Collector and the courts for determination of the market value. The aforesaid advantages are very much abundantly available in respect of the acquired land as the said land is within the proximity of New Venkateshnagar Layout, wherein residential sites are formed, and it is on record and there is a school and college near the Highway. Therefore, the principles laid down in the aforesaid case are aptly applicable to the fact situation of the case in hand. Hence, we have to apply the aforesaid principles laid down in the cases of Atma Singh & Sabhia Mohammed Yusuf Abdul Hamid Mulla (supra) to the case on hand.

  REPORTABLE

Supreme Court of India

Digamber & Ors vs State Of Maharashtra & Ors on 1 August, 2013

Bench: G.S. Singhvi, V. Gopala Gowda

Citation:2013 AIR SC 3532

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Whether court can grant enhanced amount of compensation on basis of potential prospective use of acquired land?

The enhancement is only on the ground that it is an industrial
area,   having non­agricultural potentiality and therefore, the
market value of the land would not be as the market value of
the dry crop land.  The Reference Court holds that the market
value of the non­agricultural land is aways more than that of
the agricultural land and therefore, it would be proper and
reasonable to fix the market value at Rs.50,000/­ per acre.
The   findings   are   not   supported   by   any   sale   instances
produced by the claimants.   The Reference Court has also
rejected the claim based upon the rates mentioned in the
ready­recknor   published   after   the   Government   Resolution
was issued on 31.10.1994, to determine the market value of

the   land   on   the   basis   of   value   recorded   in   such   readyrecknor.
 There is absolutely no evidence on record to grant
enhancement of compensation.  If the land is to be treated as
non­agricultural land,   then appropriate deductions are also
required to be considered on account of development. That
has also not been done.
In terms of Section
24 of the Land Acquisition Act, the Court is prohibited from

taking into consideration any increase to the value of the land
acquired likely to accrue from the use to which it will be put
when acquired. Hence, the future development and potential
prospective   use   of   the     acquisition   are   not   the   relevant
circumstances to be taken into consideration by the Court to
determine the market value of the land as has been held by
the Apex Court in its decision in the case of Tarlochan Singh
and another   vrs.   State of Punjab and others  reported in
(1995) 2 SCC 424.
In   view   of   above,   the   Reference   Court   has
committed an error in holding that the claimant is entitled to
enhancement of compensation from Rs.26,500/­ per hectare
to   Rs.1,25,000/­   per   hectare   (Rs.50,000/­   per   acre).   The
enhancement   granted   is   without   any   basis   and   cannot,
therefore, be sustained.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
FIRST APPEAL NO. 265 OF 2004 
Maharashtra Industrial Development
Corporation, 
...VERSUS...
Sau. Bhagatdasi w/o Rajendrakumar Verma

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
CORAM: R. K. DESHPANDE, J.
DATE    :   4thFEBRUARY, 2016 .
Citation;2016(3) MHLJ252,2016(2) ALLMR 397

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