BHAGAWATHULLA SAMANNA AND ORS. versus SPECIAL TAHSILDAR AND LAND ACQUISMON OFFICER VISAKHAPATNAM MUNICIPALITY, VISAKHAPATNAM

Citation: [1991] SUPP. 1 S.C.R. 172 · Decided: 18-09-1991 · Supreme Court of India · Bench: N.M. KASLIWAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
BHAGAWATHULLA SAMANNA AND ORS. 
v. 
SPECIAL TAHSILDAR AND LAND ACQUISmON OFFICER 
VISAKHAPATNAM MUNICIPALITY, VISAKHAPATNAM 
SEPTEMBER 18, 1991 
/ 
( N.M KASLIWAL AND M .. FATHIMA BEEVI, JJ. ] 
Land Acquisition Act, 1894: 
Section 24-Compensation-Award of:-£xpenses required for 
C development of the land-Deduction of one-third value thereof-Whether 
and when justified. · ' 
The appellants' lands were acquired under the Land Acquisition Act. 
The appellants claimed land value at the rate of Rs. 10 per sq. yard, '1ut the 
Land Acquisition Officer awarded compensation at the rate of Rs.0.88 per 
D sq. yard. On a reference the Sub'-Judge determined the market value at 
Rs.11 i)er sq. yard on th~ basis ,of'certain ·c~mparable transactions, but 
granted the compens~tion at'the rate ofRs~io as the appellants themselves 
'r 
had claimed only at that rate. 
o~' an appeal preferred by the 
Respondent-State, the High Court determined the market value of the 
E lands at the rate of Rs. 6.50 per sq. yard and reduced the total 
conipensation, following the decision of this Court in Tribeni Devi v. 
Collector, Ranch~ AIR 1972 SC 141 that a deduction of 1/3 of the value is 
to be made when large extent of land is acquired under housing scheme. 
Aggrieved by the High Court's decision, the appellants preferred the 
F 
present appeals, contending that the High Court had erroneously applied 
the principle laid down in Tribeni Devi's case without properly 
appreciating the nature of the land in question and the purpose for which 
it had been acquired. It was further contended that there was n·o 
justification for making any deduction since the land in question was fully 
G developed and eminently suitable for being used as house sites. Even in 
respect of the land acquired for the purpose of formation of the road, it 
was argued, the High Court wrongly proceeded on the basis that expenses 
have to be incurred for development. 
On belralf of the Responde~ts, it was contended that the appellants' 
H lands form part of large tract acquired for the purpose of construction of 
172 
BHAGAWA1HUU.A v. lAND ACQUISIDON OFFICER 
173 
houses, that the other transaction based ·on which compensation was 
decided by the Sub-Judge, related to small plots of land which were fully 
developed and while comparing the transactions, it was necessary to take 
. into account the development that is required to be made for bringing the 
acquired land suitable for the purpose of construction and that 1/3 of the 
value was rightly deducted. 
Allowing the appeals, this Court, 
~--
HELD 1. The principle of deduction in the land value covered by 
A 
B 
the compl'trable sale is adopted in order to arrive at the market value of the 
acquired land. In applying the principle it is necessary to consider all C 
relevant facts. It is not the extent of the area covered under the 
acquisition, the only relevant factor. Even in the vast area there may be 
land which is fully developed having all amenities and situated in an 
advantageous positi.on. If smaller area within the large tract is already 
developed and suitable for building purposes and have in its vicinity 
roads, drainage, electricity, communications etc. then the principle of D 
--(' 
deduction simply for the reason that it is part of the large tract acquired, 
may not be justified. (177-D]. 
Tribeni Devi v;Coll<:ctor, Ranchi, AIR 1972 SC 1417, distinguished. 
Kousholyo Devi v •. Lo11d Acquisitio11 Officer, (1984] 2 SCR 900; 
Admi11istrator Ge11erol of West Be11gal v. Collector, Varanasi, AIR 1988 SC 
943; Special Tahsildar, Land Acquisition, Vishakapat11am v. Smt. A. Man-
go/a Gowri, 1991 (2) Scale 301, relied on. 
E 
2 In the instant case, the lands involved are of even level and fit for 
construction without the necessity for levelling or reclamation. Having F 
fou,nd that the land is to be valued only as building sites and stated the 
advantageous position in which the land in question lies though forming 
part of the larger area, the High Court should not have applied the 
principles of deduction. (177 F-H). 
3. The proposition that large area of land cannot possibly fetch a 
price at the same rate at which small plots are sold is not absolute 
proposition and in given circumstances it would be permissible to take 
into account the price fetched by the small plots of land. If the larger tract 
of land because of advantageous position is capable of being used for the 
purpose for which the smaller plots 

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