GULZARA SINGH AND ORS. versus STATE OF PUNJAB AND ORS.

Citation: [1993] 3 S.C.R. 645 · Decided: 11-05-1993 · Supreme Court of India · Bench: K. RAMASWAMY · Disposal: Appeal(s) allowed

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Judgment (excerpt)

GULZARA SINGH AND ORS., ETC. 
v. 
STATE OF PUNJAB AND ORS. 
MAY 11, 1993 
[K. RAMASWAMY AND R.M. SARAI, JJ.] 
Land Acquisition Act, 1984: Section 23(1)-Acidetestfor Market Value of 
acquired land-Rekvance.of Sale deeds mutation entries, Average price, Margin 
for. wholesale price of large extent, Deduction for development charges. 
Notification under section 4 for acquisition of 89 Acres 4 Kanals and 12 
Marlas of land in a village in Punjab, published on January 27, 1978. 
Appellants claimed compensation Rs. 30,000 per Bigha i.e. Rs. 1500 per 
Biswa, on the ground that 15 Biswas ofland situated near the acquired land 
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B 
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had been sold on July 12, 1977, for Rs. 24,000 which works out to Rs; 1600 per 
Biswa. Land Acquisition Collector classified the acquired land in 6 blocks and . D 
awarded Market Value ranging between Rs. 30,000 to Rs~ 6000 per acre. In 
reference under Section 18, the District Judge disagreed with.classification. 
The learned Judge, relying on sale deeds dated September 4, 1972, June 14, 
1976, February 23, 1977 and July 15, 1977, all for small extents, awarded 
compensation @ Rs. 800 for the rest of land, besides solatium and interest. 
Appeals filed in the High Court by State of Punjab and by one batch of E 
claimants. Another batch of claimants filed· cross objections. The learned 
Single Judge allowed appeals filed by the State and dismissed appeals and 
cross-objections of the claimants. Market Value was determined, on working 
out average price on the basis of sale deeds dated September 4, 1972 and June 
14, 1976 filed by claimants and mutation entries dated August 31, 1977 and 
October 4, 1977 fded by the State. Belting was carved at depth oflOo Ft. from 
main road and deduction of 1 3rd was made towards development charges. 
Consequently market value determined @ Rs. 750 per Biswa for land 
abutting main road and @ Rs. 500 per Biswa for the rest of land. Judgment 
and order of the learned Single Judge was conf1rmed by Division Bench. 
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Claimants, by special leave petition fded appeals for higher compensa· 
tion. This court determined market vain~ at Rs.1000 per Biswa and allowing 
the appeals to that extent, 
HELD: It is settled law that to determine market value of the land, the 
sales ofland under requisition if any or the sales in the neighborhood lands, H 
645 
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B 
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H 
646 
SUPREME COURT REPORTS 
(1993] 3 S.C.R. 
that possessed of same or similar features or fertility or other advantageous 
features would furnish basis to fix just and fair market value. (649-E) 
The price for which the willing vender would offer the land and willing 
vendee would agree to purchase it, as a prudent man in normal market 
conditions, as on date of notification or near about the date, is acid test to fix 
market value. Sales and purchases ofland. at throw away price at arms length 
or depressed sales or facade of sales made in quick succession to inflate 
market value do not offer any basis to determine just Market Value. (649-F) 
In order to adjudge, whether sales are bona.fide, whether consideration 
mentioned in the deed was infect and really passed, whether the lands covered 
· by sale deeds and relied on possessed· of same or similar potentialities or 
fertilities or advantageous features would be brought out <in record only by · 
examination of the vendor or the vendee or if neither of them ~ available, the 
attesting witnes8, who has personal knowledge of the bargain and passing of 
consideration. Hence it is mandatory. (650-A) • 
Peri"yar & Pareekanni Rubbers Ltd. v. State f!f Kerala: [1991] 4 SCC 195. 
Sale de.eds of small extents being retail price do not offer comparable 
basis to fix comp~nsation, when. large block is acquired. If sale transactions 
relate to the lands under acquisition and if found to be genuine and bonafule 
·transactions, then it may be considered but reasonable margin must be given 
in fixing wholesale price. 
(650-E) 
Collector of Lakhimpur v. Bhuban Chandra Dutta AIR 1971 SC 2015; Mirza 
Na us herwoan Khan & Anotherv. Collector (Land Acquisition) Hyderabad [197 SJ 
2SCR184; Ram Rattan & Others v. State of Uttar Pradesh [1977) 2 SCR184; · 
Smt. Kaushalya Devi Bogra & Others v. Land Acquisition Officer, Aurangabad 
& Another (1984) 2 SCR 900; Padma Uppal v. Stare of Punjab & Others (1977) 
l SCR 329; Administrator General of West Bengal v. Collector Varanasi AIR 
1988 SC 943 and Special Tehsildar Land Acquisition v. AMangal Gowri (1991) 
4SCC218. 

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