K. POSAYYA AND ORS. versus SPECIAL TAHSILDAR

Citation: [1995] SUPP. 1 S.C.R. 342 · Decided: 10-05-1995 · Supreme Court of India · Bench: K. RAMASWAMY · Disposal: Dismissed

Judgment (excerpt)

A 
K. POSAYYA AND ORS. 
v. 
SPECIAL TAHSILDAR 
MAY 10, 1995 
B 
[K. RAMASWAMY AND N. VENKATACHALA, JJ.J 
Land Acquisition Act 1894: 
S.23( I )-Compensation-Award of-Large extent of land acquired for 
C Project-T1ibal la11ds-No11-transferable-No sale deed to rely 01t-Transac-
tion in adjacent villag,,-Brought up document to inflate market valu~Hence 
rightly rejected by High Cowt-Valuation detennined by High Court-Held, 
no inteiference called for-Doctrine of Reinstatement value-Held not ap-
plicable. 
D 
Lands to the extent of 163.80 acres belonging to the appellants, were 
acquired under the Land Acquisition Act and the Award fixed the market 
value of the lands at Rs. 400 per acre. The lands were rain-fed, in which 
dry crops were raised prior to acc1uisition. On Reference, the Subordinate 
Judge enhanced the compensation to Rs. 22,000 per acre. On appeal the 
E High Court reduced the compensation to Rs. 21,000 per acre. 
In these appeals, it was contended that the lands were situated in a 
notified tribal area in which the Scheduled Areas Land Transfer Regula-
tion Act, 1970 has been in force thus prohibiting sale of the lands by tribals 
to non-tribals, and therefore the appellants could not secure any sale deed, 
F but in the neighbouring village, one acre of land was sold for Rs. 20,000 
and the High Court was not justified in acting upon the same. 
Dismissing the appeal, this Court 
HELD : 1. The sale deed (Ex.A-1) was brought into existence after 
G the notification and possession was taken of the lands. This is the 
notorious document relied in all the subsequent references. Only the 
attestor was examined in proof of the documents. It would be obvious that 
it was a brought up document to inflate the market value of the lands 
under acc1uisition not only in the village but in the surrounding villages. 
H The High Court, therefore, was right in rejecting the said document and 
342 
• 
K.POSAYYAv. SPL. TAHSILDAR 
343 
refusing to place reliance for determination of the compensation. Exhibit A 
A-2, judgment of the single Judge of the High Court relied upon by the 
appellants relate to the same reference court. The lands therein were 
acquired for project. They are the wet lands. Since the counsel for the 
Government did not appear and no material was placed on record and 
since in earlier cases, award was confirmed for a sum of Rs. 22,000 per B 
acre, the single Judge enhanced the compensation to Rs. 22,000. That is 
obviously illegal approach adopted by the High Court in determining the 
market value of large tracts of lands covered by the project. It would 
appear that the other references were not brought to the notice of the 
Judges. Therefore, it cannot form the basis for fixing the market value at 
a higher rate. (346-C-E] 
C 
2. The contention that the doctrine of reinstatement value in deter-
mination of the market value to the lands of depressed value due to 
operation of the Andhra Pradesh Scheduled Areas Land Transfer Regula-
tion Act, 1970 prohibiting alienation of the land between the tribals and 
non-tribals cannot be accepted. What is relevant in fixation of the market 
value of the land under s.23(1) is prevailing price as on the date of 
notification under s.4 (1). The reasoning of the High Court that since the 
tribals have no capacity to purchase the land an_d the lands, therefore, are 
not possessed of market value also is not a correct approach. (347-C] 
3. The reference Court should be circumspect, pragmatic and careful 
in analysing the evidence and arriving at just and fair market value of the 
. lands under acquisition which could be fetched on the date of the notifica-
tion. The nature of the land, the crops raised and the nature of the income 
likely to be derived from the lands, the expenditure to be incurred for 
raising the crops and the net profits etc. would be the relevant factors in 
arriving at the net market value and if evidence is produced in that behalf 
on its basis applying the suitable 10 years multiplier, the market _value 
need to be determined. The owner or claimant should not be put to loss 
by under valuation. But, at the same time public exchequer should not be 
D 
E 
F 
put to undue burden by excess valuation. It is the statutory duty of the G 
Court to maintain the balance between diverse interests. (347-H, 348-A-B] 
Administrator General of West Bengal v. Collect01; Varanasi, AIR 
(1988) SC 943, distinguished. 
4. Claimant stands in the position of plaintiff 

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