P. RAJAN AND ANR. versus THE KERALA STATE ELECTRICITY BOARD AND ANR.

Citation: [1996] SUPP. 8 S.C.R. 3 · Decided: 25-10-1996 · Supreme Court of India · Bench: K. RAMASWAMY · Disposal: Dismissed
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Judgment (excerpt)

f 
P. RAJAN AND ANR. 
A 
~ 
THE KERALA STATE ELECTRICITY BOARD AND ANR. 
OCTOBER 25, 1996 
[K. RAMASWAMY AND S.P. KURDUKAR, JJ.] 
B 
Land Acquisition Act, 1894 : 
Compensation-Award 
of-Reference 
Court 
enhancing 
compensation-High Court reducing the same-Justification-Held, when C 
large extent of land is acquired, determination of compensation on the 
basis of square yard or square foot basis is wrong principle-A/so land 
converted into building plots or land in well developed area like heart of 
commercial centre to be given weightage-Sale deeds furnished-Does not 
furnish reasonable basis since the lands are within municipal limits and 
well developed-Post-notification sale of small extent-A/so does not D 
furnish reasonable basis for determination of market value and 
compensation. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14526 of 
1996. 
From the Judgment and Order dated 29.1.90 of the Kerala High 
Court in L.A.A. No. 232 of 1986. 
John Mathew, Roy Abhram and M.K.D. Namboodri for the 
E 
Appellants. 
F 
G.Viswanatha Iyer, T.G.N. Nair and M.T. George for the 
Respondents, No. I. 
The following Order of the Court was delivered : 
Leave granted. 
Notification under Section 4(1) of the Land Acquisition Act was 
published on October 13, 1979 acquiring a large extent ofland admeasuring 
G 
7 acres, 8 cents together with a building situated in 1600 sq.mtrs. of the H 
3 
4 
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R. 
A land. The Land Acquisition Officer awarded compensation@ Rs. 1432.50 
per cent, Rs. 2,35,283 for the building and Rs. 24,033 for the trees as well 
as Rs. 4, 19,006 for the wells. The reference Court enhanced the 
compensation for the land to Rs. 3 ,000 per cent and awarded an additional 
amount of Rs. 1,83,783,60 towards building and Rs. 17,958 as value of 
improvements. The respondents filed an appeal before the High Court. 
B The High Court allowed the appeal of the responder.!, reducing the land 
value to Rs. 2,000 per cent. This appeal by special leave has been filed by 
the appellants-claimants challenging the reduction of the compensation 
by the High Court. 
The question for consideration is: whether the view taken by the 
C High Court is correct in law? It is seen that the courts below have relied 
upon Exs. A-1, A-2, A-7 and A-9. The respondents have reied upon Exs. 
R-1 and R-6. Ex. A-I is the sale deed dated July 3 l, 1978 pertaining to sale 
of an extent of 2-112 cents of land whose value was worked out @ Rs. 
3,000 per cent spoken to by A W-4. It is an admitted position that the lands 
D covered by the said sale transaction are situated within the municipal limits 
in a developed area. The distance between the acquired land and the land 
covered by the sale deed is 2-1/2 kms. Under these circumstances, the said 
sale deed does not furnish any reasonable basis to determine the market 
value and compensation. Equally, Ex. A-2 is dated November 15, 1978 
spoken to by A W-2. lt is a small extent ofland situated within the municipal 
E limits which worked out at Rs. 4,000 per cent. Ex. A-7 is dated August I, 
1979 and the extent of the land has not been mentioned; but it is an admitted 
position that it is a small piece of land purchased by AW-3 which worked 
out to Rs. 26,000 per cent. Ex. A-9 is a post-notification sale deed dated 
October 9, 1980 pertaining to sale of an extent of three cents of land 
purchased by A W-5 which worked to Rs. 5,000 per cent. This also being 
F post-notification and being in respect of a small extent of land, does not 
furnish any reasonable basis for determination of the market value and 
compensation. 
It is well settled legal position that when large extent of land is 
G acquired, determination of compensation on the foot of a cent, square 
yard or square foot is wrong principle. This Court repeatedly emphasised, 
that the principle of fixation on acreage basis would be the correct principal. 
The other principle is that if the land acquired is situated in a developed 
area and is converted into buildings in a colony after obtaining sanction 
from the competent authority or is situated in a well-developed area like 
· H in the heart of a commercial centre, determination of the compensation 
, 
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P. RAJAN v. KERALA STATE ELECTRICITY BO. 
5 
could be on square yard basis after giving due deduction according to law. A 
Determination on square foot basis would be confined only to highly 
developed Commercial land or land situated at a place in the hea
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