P. VENKATARAJU versus SPECIAL TEHSILDAR (LAND ACQUISITION)

Citation: [1995] SUPP. 6 S.C.R. 284 · Decided: 06-12-1995 · Supreme Court of India · Bench: K. RAMASWAMY, FAIZAN UDDIN, B.N. KIRPAL · Disposal: Dismissed

Judgment (excerpt)

A 
P. VENKATARAJU 
v. 
SPECIAL TEHSILDAR (LAND ACQUISITION) 
DECEMBER 6, 1995 
8 
[K. RAMASWAMY, FAIZAN UDDIN AND B.N. KIRPAL, JJ.] 
Lalld Acquisitioll Act, 1894 : 
S.4( 1 )-Acquisitioll of lalld-Compellsatioll-Determillatioll or 
Evidel!ce-Held, cowts should collsider evidel!ce ill proper perspective-
C Brought up sales should be igllored. 
A large extent of land belonging to the appellant was acquired for 
construction of Vengalarayasagar Project by a Notification under s.4(1) of 
the Land Acquisition Act 1894 published ~n 20th September 1979. The 
D Land Acquisition Officer determined the compensation at the rate 
of Rs. 10,000 per acre. The reference court, relying on the documents dated 
15.12.1976 of a consideration of Rs. 15,000 and Rs. 19,000 per acre .en-
hanced the compensation to Rs. 22,000 per r.cre. In another matter a Single 
Judge of the High Court confirmed the compensation in respect of neigh-
bouring lands at the rate of Rs. 22,000 per acre. The Division Bench of the 
E High Court reduced the compensation to Rs. 20,000 per acre. Aggrieved, 
the land-owner filed the present appeal. 
Dismissing the appeal, this Court 
HELD : It is the duty of the court to consider the evidence in proper 
F perspective and to determine the compensation. The Project was in-
augurated on August 28, 1976, and the documents obviously had been 
brought up for inOating the market valne. The enhancement was, therefore, 
not justified. These facts were not bro11ght to the notice of the Single Judge 
of the High Court when he confirmed the compensation. Under the cir-
G cumstances, the market value cannot be enhanced. [285-G, 286·A] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11906 of 
1995. 
From the Judgment and Order date. 3.3.92 of the Andhra Pradesh 
H High Court in Appeal No. 1766 of 1984. 
284 
P. VENKATARAJU v. SPL. TEHSILDAR (L.A) 
285 
K. Ram Kumar for the Appellant 
A 
T.V.S.N. Chari for the Respondent. 
The following Order of the Court was delivered : 
Leave granted. 
B 
Notification under s.4(1) of the Land Acquisition Act, 1894 (for 
short, "the Act") acquiring a large extent of land for construction of 
Vengalarayasagar Project, West Godavari District of Andhra Pradesh, was 
published on September 20, 1979. The Land Acquisition Officer in his C 
award has determined compensation at the rate of Rs. 10,000 per acre for 
wet land and had also granted value of the coconut trees. The Subordinate 
Judge on reference under s.18(1) enhanced the market value to Rs. 22,000 
per acre. He relied upon two sale deeds and Ex. A2, an agreement of sale 
dated December 15, 1976, for a large extent of land for a consideration of 
Rs. 15,000. One sale deed was executed under Ex.A3 on September 22, D 
1978. Another document, Ex.Al was executed on the same day for a sum 
of Rs. 19,800. It has come on record that the project was inaugurated on 
August 28, 1976. The lower Court enhanced the compensation to 
Rs.22,000 per acre relying upon the above documents. However, in another 
matter, a learned single Judge of the High Court by his judgment dated 
February 14, 1985 had confirmed the compensation in respect of neigh-
bouring lands acquired earlier, at Rs. 22,000 per acre. The Division Bench, 
however, by the impugned order reduced the compensation to Rs. 20,000. 
Thus this appeal by special leave. Unfo.rtunately, the State has not come in 
appeal against the enhanced compensation. 
The only question is whether the appellant is eutitled to compensa-
tion@ Rs. 22,000 per acre. It is seen that when the Project was inaugurated 
on August 28, 1976, all these documents obviously had been brought up 
E 
F 
for inflating the market value. Unfortunately, all these facts were not 
brought to the notice of the learned single Judge when he confirmed the 
compensation of the land at the rate of Rs. 22,000 per acre. It is settled G 
law that it is the duty of the court to consider the evidence in proper 
perspective and to determine the compensation. In each case, the court 
sitting in the arm chair of a hypothetical willing purchaser would as a 
prudent person offer the market value when the owner offered the land for 
sale. Once the project was inaugurated and the lands were acquired, no H 
286 
SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R. 
A prudent person would come forward and purchase the same at higher 
rates. It may be depressed sales in case of acute necessity and urgency of 
the seller for money. Under these circumstances, we hold that

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