Future Potential Value of Land: Distinguishing Potentiality and Realizable Potentiality

 Now arises the question as to whether the awardees are also entitled to any further increase on account of the potentialities of the land. According to this principle, "value of land should be determined not necessarily according to its present disposition but laid out in its most lucrative and advantageous way in which the owner can dispose of it. If the land has, what may be called, an adventitious value, i.e., beyond its agricultural or normal value, and that is a marketable value in the sense that persons wishing for a purpose for which the land is particularly applicable to purchase that land, then the Arbitrator has a fair right to take that into consideration, it is a matter, no doubt, contingent, but it is still a matter, not to be ignored or put out of consideration. In other words, the land is not to be valued merely by reference to the use to which it is being put at the time at which its value has to be determined, but also by reference to the uses to which it is reasonably capable of being put in future.

Patna High Court

Smt. Tribeni Devi Sarawgi And Anr. vs Collector on 19 December, 1979

Equivalent citations: 1981 (29) BLJR 27

Bench: H L Agrawal, S S Sinha

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When value of trees can be added to value of land for grant compensation under land acquisition Act?

 We are afraid that the High Court has misread the said decision in regard of valuing the land and trees separately. If the land value had been determined with reference to the sale statistics or compensation awarded for a nearby vacant land, then necessarily, the trees will have to be valued separately. But if the value of the land has been determined on the basis of the sale statistics or compensation awarded for an orchard, that is land with fruit-bearing trees, then there is no question of again adding the value of the trees. Further, if the market value has been determined by capitalizing the income with reference to yield, then also the question of making any addition either for the land or for the trees separately does not arise. In this case, the determination of market value was not with reference to the yield. Nor was the determination of market value in regard to the land with reference to the value of any orchard but was with reference to vacant agricultural land. In the circumstances, the value of the trees could be added to the value of the land.
Reportable

Supreme Court of India

Ambya Kalya Mhatra(D) By Lrs.& Ors vs State Of Maharashtra on 12 September, 2011

Bench: R.V. Raveendran, H.L. Gokhale, Gyan Sudha Misra

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