RAMESH KUMAR V. BHATINDA INTEGRATED COOPERATIVE COTTON SPINNING MILL AND ORS. versus BHATINDA INTEGRATED COOPERATIVE COTTON SPINNING MILL AND ORS.

Citation: [2021] 7 S.C.R. 787 · Decided: 13-09-2021 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Dismissed

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Judgment (excerpt)

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RAMESH KUMAR
v.
BHATINDA INTEGRATED COOPERATIVE
COTTON SPINNING MILL AND ORS.
(Civil Appeal Nos. 3875 – 3876 of 2009)
SEPTEMBER 13, 2021
[M. R. SHAH AND ANIRUDDHA BOSE, JJ.]
Land Acquisition Act, 1894 – ss. 4 and 23 – Compensation –
Enhancement of – A Notification u/s.4 was issued on 06.06.1988
and the land in question was acquired for public purposes for
establishing Cotton Spinning and Ginning Mills – The Land
Acqusition Officer awarded compensation considering the value of
the land at the rate of Rs.25,000/- per acre – The Reference Court
relying upon the sale deed dated 24.05.1979 as Ex. AW6/C by which
the land admeasuring 43 kanals 13 marlas out of the acquired at
the rate of Rs.50,000/- per acre and thereafter granted the increase
of 12% per acre and thereafter adopting the cut of 25% determined
the compensation at Rs.1,12,000/- per acre – However, the High
Court determined the value at Rs.88,400/- per acre after adopting
cut of 15% – On appeal, held: In the present case both, the Reference
Court as well as the High Court, have determined the value of the
land considering the sale deed dated 24.05.1979 which is more
than 9 years before the notification of the acquisition – Considering
the observations made by the Supreme Court in the case of
Rameshbhai Jivanbhai Patel that it is reasonably safe to determine
the market value by providing appropriate escalation over the
approved market value of nearby lands in the previous years, when
relied on sale transactions/acquisitions precede the subject
acquisition by only a few years, i.e., upto 4-5 years and beyond
that it may be unsafe – The fact that time gap between the sale deed
relied upon and the date of notification of acquisition is more than
9 years in the instant case, the courts below ought to have been
very cautious in relying upon the sale deed dated 24.05.1979 – Be
that it may and assuming that the sale deed dated 24.05.1979 was
the best evidence available to determine the value of land acquired,
in that case also taking annual increase at the rate of 12% is not
justified – In the instant case, in the facts and circumstances of the
[2021] 7 S.C.R. 787
787
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SUPREME COURT REPORTS
[2021] 7 S.C.R.
case the annual increase/escalation ought to have been at the rate
of 10% maximum – The High Court rightly adopted the cut of 15%,
which in the facts and circumstances of the case is not required to
be interfered with – Therefore, there is no reason to interfere with
the impugned judgment of the High Court.
Dismissing the Appeals, the Court
HELD: 1. The questions which are posed for consideration
of this Court are :
(i) Whether in the facts and circumstances of the case the
Courts below have erred in taking annual increase at the rate of
12% at the flat rate and not applying the cumulative rate?
(ii) Whether in the facts and circumstances of the case the
High Court has erred in adopting the cut/deduction of 15%, while
determining the value of the land acquired?
2. In the case of Rameshbhai Jivanbhai Patel, it is
specifically observed and held that when market value is sought
to be ascertained with reference to transactions which took place
before the acquisition, the law adopted is to collect the year to
year increase. It is further observed and held that as the
percentage of increase is always with reference to the previous
year’s market value, the appropriate method is to adopt the
increase cumulatively and not applying a flat rate.  However, at
the same time it is also observed and held in the said decision
that it is reasonably safe to determine the market value by
providing appropriate escalation over the approved market value
of nearby lands in the previous years, when relied on sale
transactions/acquisitions precede the subject acquisition by only
a few years, i.e., upto 4-5 years.  It is further observed in the said
decision that beyond that it may be unsafe, even if it relates to a
neighbouring land. In the present case both, the Reference Court
as well as the High Court, have determined the value of the land
considering the Sale Deed dated 24.05.1979 which is more than
9 years before the notification of the acquisition.  Therefore,
considering the observations made by this Court in the case of
Rameshbhai Jivanbhai Patel  and considering the fact that time
gap between the sale deed relied upon and the date of notification
of acquisition is more than 9 years, the courts below ought to
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have been very c

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