MAHABIR PRASAD SANTUKA & ORS. versus COLLECTOR, CUTTACK & ORS.

Citation: [1987] 2 S.C.R. 289 · Decided: 11-02-1987 · Supreme Court of India · Bench: A.P. SEN · Disposal: Appeal(s) allowed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

-
MAHABIR PRASAD SANTUKA & ORS. 
v. 
COLLECTOR, CUTIACK & ORS. 
FEBRUARY 11, 1987 
[K.N. SINGH & A.P. SEN, JJ] 
Land Acquisition Act, 
1894-S.23-Compensation-Market 
value-Determination of-Offer of land to industrialists on conces-
. -i 
sional rate-Whether indicates 'market value' of land. 
Certain plots of land owned by the appellants were acquired by 
the Government for the purpose of construction of Aviation Research 
Centre. The Collector awarded compensation at the rate of Rs.2,000 
per acre. On a reference, the Subordinate Judge enhanced the compen-
sation and awarded at the rate of Rs. 15,000 per acre. On appeal by the 
respondents, the High Court reduced the compensation holding that 
since the State Government had been offering land situate in the adja-
cent Industrial Area to the industrialists at the rate of Rs. 7 ,500 per 
acre, the appellants were entitled compensation at that rate and that the 
appellants had purchased the land at the rate of Rs. 100 per acre in the 
year 1956, they were not entitled to compensation more than Rs. 7 ,500 
per acre. 
In the appeal to this Court, on behalf of the appellants it was 
contended that the High Court was not justified in reducing the com-
pensation as there was ample evidence or record to show that the 
market value of the land was much more than determined by the High 
Court and developmental activities had taken place near the land as a 
result of which the value of the land had appreciated tremendously and 
that for adjacent land acquired by the same Notification was deter-
mined by the High Court itself at the rate of Rs. 15,000 per acre. 
Allowing the appeal, 
A 
B 
c 
D 
E 
F 
HELD: I. The judgment and the order of the High Court is set G 
aside and it is directed that the appellant shall be paid compensation at 
the rate of Rs. 15,000 per acre. [294E] 
-\ 
2. Section 23 of the Land Acquisition Act, 1894 lays down princi-
ples for determining compensation according to which the owner is 
entitled to recieve the market value for the land. [291H] 
H 
289 
290 
SUPREME COURT REPORTS 
[1987] 2 S.C.R. 
A 
3. Market value means what a willing purchaser would pay to a 
willing s~ller for the property having regard to the advantages available 
to the land and the denlopment activities which may be going on in 
the vicinity and the potentiality of the land. l292A·Bl 
4. An offer of sale of land to industrialists on concessional rates 
B with a view of induce them to set up their industries in a particular area 
does not reflect the prevailing market value of the land. The Indus-
trialists who were olfen!d the land at concessional rates were not the 
willing purchasers. l292Fl 
S. The High Court committed error in proceeding on the assump· 
C lion that the concessional rate offered by the Government to the in· 
dustrialists indicated the market value of similar land. l292F ·GI 
6. In the instant case, on the evidence on record it is apparent 
that the land In question ;,. adjacent to the industrial area where a large 
number of factories are situate. Even though the land was being used 
D for agricultural purposes but it was lit for mm-agricultural purposes 
and it bad potentiality for future use as factory or building site. l292B·CI 
7. There is no valid. reason to award compensation to the appel· 
lants at a reduced rates specially so when the respondents have failed to 
point out any material difference in the situation, topography, lay out of 
E the appellants' land In respect of which compensation has been awarded 
at the rate of Rs.15,000 per acre. [293F] 
F 
G 
CIVIL APPELLA1E JURISDICTION: Civil Appeal No. 696 
of 1973. 
From the Judgment and Order dated 14. 7 .1972 of the Orissa 
High Court in First Appeal No. 117of1971. 
B.P. Singh and Ranjit Kumar for the Appellants. 
Vi jay Mohanty, P.N. Misra S.K. Jaina for the Respondents. 
The Judgment of the Court was delivered by, 
SINGH, J. This appeal on certificate under Art. 133(1)(a) of 
the Constitution is directed against the Judgment and Order of the 
H 
High Court of Orissa at Cuttack setting aside the order of the Subordi-
~· 
-
MAHABIR PRASAD SANTUKA v.·COLLECTOR !SINGH ,J.] 
291 
nate Judge, Cuttack and reducing the amount of compensation A 
awarded to the appellants. 
The appellants are owners of plots in dispute which include Plot 
Nos. 177/16, 177/16-A, 177/17 and 177/17-A and situate in village 
Jagbhairab having an area of about 12 acres. A notification under 
sec.4 of the Land Acquisition Act, 189
Excerpt shown. Read the full judgment & AI analysis in Lexace.