LAND ACQUISITION OFFICER, ELURU ETC. versus SMT. JASTI ROHINI AND ANR. ETC.

Citation: [1994] SUPP. 5 S.C.R. 232 · Decided: 27-10-1994 · Supreme Court of India · Bench: K. RAMASWAMY, N. VENKATACHALA · Disposal: Appeal(s) allowed

Judgment (excerpt)

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LAND ACQUISITION OFFICER, ELURU ETC. 
v. 
SMT. JASTI ROHINI AND ANR. ETC. 
OCTOBER 27, 1994 
[K. RAMASWAMY AND N. VENKATACHALA, JJ.] 
Land Acquisition Act, 1894- Section 23 (1)- Determination of 
compensation- Fixation of market value on basis of basic valuation 
register- Jllegal and unsustainable- Court's consideration should alone 
be confined tp market value prevailing on date of notification u/s 4 (1) -
Acquisition of vast area~-Reliance of small extents of land does not furnish 
satisfactory basis for fixation of market value. 
Land Acquisition Act, 1894- Section 23 (1) -
Determination of 
compensation- Acquisition of land for providing house sites to poor-
Lands 
situated 
near 
Municipality-
No 
building 
activities · in 
neighbourhood- No rise in market condition- Lands being agricultural 
lands, fixation of market value as agricultural lands is just and fair-
Notifications 1983 and 1985- Market Value fixed at Rs.65,000 per acre 
and Rs.80,000 per acre respectively. 
Notifiction issued u/s 4 (1) of the Land Acquisition Act, 1894 in the 
first case was published in the year 1983 for acquiring 9.47 acres to 
provide house sites tp the poor. Agaian, 14.10 acres of land was 
acquired in the second case for the same purpose in the year 1985. The 
Land Acquisition Officer awarded compensation at Rs.40,000 per acre 
in both the cases. On reference, the market value was enhanced. The 
reference court relied upon the Basic Valuation Register maintained 
by the municipalities on the basis of the notification issued by the 
Government 11/s 47 A of the Stamp Act. On appeal, the High Court 
further enhanced the market value in respect of land in the second case 
but upheld in the first case the market value of the land at Rs.150 per 
sq. yard. Hence these appeals. 
· It was submitted by the claimants that the fixation of market value 
of acquired lands as prevailing in 1983-85 at Rs.150 was not high. In 
the first case claimants had relied upon two sale deeds from the very 
same acquired land. Since the claimants themselves had sold those 
lands to 
others, they would reflect the market value of lands as 
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prevailing near about the date of acquisition. 
232 
LAND ACQN OFFICER v. JASTI ROHINI 
233 
The question, therefore, was what would be the markt value A 
prevailing as on the respective dates of notifications,viz 1983 and 1985. 
Allowing the appeal, this Court 
HELD 1.1 It is settled law that the- market value should 
be 
determined on the hypothesis of the price fetched in the bonafide sale B 
by a willing vendor who would agree to sell the lands to a willing 
vendee of the acquired land or the land in the neighborhood possessed 
of similar features. The notification u/s 47 (A) of the Stamp Act which 
is meant to be a guide for collection of revenue cannot form the basis 
for determination of market value of the Land under Sec. 23 (1) of the 
Land Acquisition Act. (236-C) 
Jawajee Naqnatham v. Revenue Divisional Officer, A. P., [1994) 4 
sec 595, relied on. 
1.2 While fixing market value, future suitability or adaptability of 
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the land for any purpose shall not be taken into account. The 
compensation must, therefore, be determined by reference to the price D 
which a willing vendor might reasonably expect to obtain from a 
willing purchaser as on the date of the notification published u/s 4 (1). 
The disinclination of the seller to part with his land and the urgent 
necessity of the vendee to purchase the land must, be considered as 
acting under compulsion. (236-H, 237-A) 
1.3 The reasonable method to determine the market value of the 
a!!quired land is on the evidence of transactions of bona fide sales of 
acquired land, but not on evidence of sales of such land got up having 
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had knowledge of the proposed acquisition, the former would furnish 
reasonable basis to determine the compensation. In its absence, bona 
fide sales but not manipulated sales of the lands in the neighbourhood F 
possessed of same or similar quality and having the same or similar 
advantages would give an unerring assurance to the Court to determine 
just and proper compensation. Such sales must not only be proved but 
also be bona fide transactions etc. These factors must be established as a 
fact by examining either the vendor or the vandee. Marking of certified 
copies of sale deeds are not proof of either the contents or the G 
circumstancs in which it came to be executed. Bona fide sale or series of 
sales o

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