MAJ. GEN. KAPIL MEHRA & ORS. versus UNION OF INDIA & ANR.

Citation: [2014] 10 S.C.R. 1153 · Decided: 17-10-2014 · Supreme Court of India · Bench: T.S. THAKUR · Disposal: Dismissed

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2014] 10 S.C.R. 1153 
MAJ. GEN. KAPIL MEHRA & ORS. 
v. 
UNION OF INDIA & ANR. 
(Civil Appeal Nos. 2545-2546/2012) 
OCTOBER 17, 2014 
[T.S. THAKUR AND R. BANUMATHI, JJ.] 
Land Acquisition Act, 1894 - s.23 - Acquisition of land 
A 
B 
- Market Value - Determination of - Held: Market value is 
determined with reference to the open market sale of C 
comparable land in the neighbourhood, by a willing seller to 
a willing buyer, on or before the date of preliminary notification, 
as that would give a fair indication of the market value. 
Land Acquisition Act, 1894 - s.23 - Acquisition of land 
0 
- Market Value - Determination of - Comparable sales 
method for valuation of land - Held: Comparable sales 
method of valuation is preferred rather than methods of 
valuation of land such as capitalization of net income method 
or experl opinion method, because it furnishes the evidence 
for determination of the market value of the acquired land at 
E 
which the willing purchaser would pay for the acquired land if 
it had been sold in the open market at the time of issuance 
of notification u/s. 4. 
Land Acquisition Act, 1894 - s.23 - Determination of 
F 
Market Value on the basis of average price paid under sale 
transactions - Scope - Legal position - Discussed - Held: 
Where the lands acquired are of different type and different 
locations, averaging is not permissible - But where there are 
several sales of similar lands, more or less, at the same time, 
G 
whose prices have marginal variation, averaging thereof is 
permissible - For fixation of fair and reasonable market value 
of any type of land, abnormally high value or abnormally low 
value sales should be carefully discarded - If the number of 
1153 
H 
1154 
SUPREME COURT REPORTS 
[2014] 10 S.C.R. 
A 
sale deeds of the same locality and the same period with 
short intervals are available, average price of the available 
number of sale deeds shall be considered as a fair and 
reasonable market price - Ultimately, it is in the interest of 
justice for the land losers to be awarded fair compensation -
B All attempts should be taken to award fair compensation to 
the extent possible on the basis of their accessibility to 
different kinds of roads, locational advantages etc. - On facts, 
the four perpetual lease deeds A-7 to A-10 relied upon by the 
appellants were of the same locality and related to the period 
c just prior to s.4(1) notification - High Court justified in taking 
average of the said four exemplars and approach adopted by 
the High Court in averaging the sale prices of Exs A 7 to A 10 
cannot be said to be perverse. 
Land Acquisition Act, 1894 - s. 23 - Determination of 
D Market Value - Gap between "leasehold" price and "freehold" 
price - To be taken into consideration -Held: 'Freehold land' 
and 'leasehold land' are conceptually different - If a property 
subject to a lease and in possession of a lessee is offered 
for sale by the owner to a prospective private purchaser, the 
E purchaser being aware that on purchase he will get only title 
and not possession and that the sale in his favour will be 
subject to encumbrance namely, the lease, he will offer a 
price taking note of th'e encumbrances - Naturally, such a 
price would be Jess than the price of a property without any 
F 
encumbrance -
But wtien a land is acquired free from 
encumbrances, the market value of the same will certainly be 
higher - On facts, Exs A 7 to A 10 were the perpetual lease 
deeds relating to the period from September 1995 to 
December 1996 and to get the perpetual lease deeds 
G converted as freehold, the holder of perpetual leasehold had 
to pay further amount to DOA - Having regard to the pen"od 
of Exs A 7 to A 10 and the date of issuance of s.4 notification 
dated 19.2.1997, addition of 20% to be added for arriving at 
the value of 'freehold' property. 
H 
MAJ. GEN. KAPIL MEHRA & ORS. v. UNION OF 
1155 
INDIA & ANR. 
Land Acquisition Act, 1894 - s. 23 - Determination of A 
Market Value - Auction sales of commercial I residential 
plots - If a true index - Deduction towards competitive bidding 
-
Held: The general rule that the sale prices of the 
comparable sales should be relied upon for calculating the 
market value will not apply when the sale transactions relied s 
upon are auction sales - On facts, 20% deduction made for 
competitive bidding and value of acquired land fixed 
accordingly. 
Land Acquisition Act, 1894 - s. 23 - Determination of C 
Market Value - Deduc

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