SMT. INDUMATI CHITALEY versus GOVERNMENT OF INDIA AND ANR.

Citation: [1995] SUPP. 4 S.C.R. 701 · Decided: 01-11-1995 · Supreme Court of India · Bench: K. RAMASWAMY, B.N. KIRPAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

SMT. JNDUMATI CHITALEY 
v. 
GOVERNMENT OF INDIA AND ANR. 
NOVEMBER 1, 1995 
[K. RAMASWAMY AND B.N. KlRPAL, JJ.] 
Land Acquisition Act, 1894 : 
Compensatio1r-Award of-Square foot basis-Per se illegal-Lands 
being agiieultural lands compensation detennined by Reference Court on that 
basis held vali~Also entitled to solarium and enhanced compensation. 
Certain lands were acquired under the Land Acquisition Act for 
establishment of grain godown by the Central Government. The Land 
Acquisition Officer in his award adopted market value to some lands @ 
A 
B 
c 
SO paise per sq. ft. and @ 49 paise per sq. ft. in respect of other lands and D 
determined the compensation after deducting the developmental costs at 
Rs. 2,28,134.91 and ultimately paid to the claimants the total compensation 
of Rs. 38,414.91. 
On a reference the Civil Judge evaluated the lands on two methods, 
one as agricultural land @ Rs. 5000 per acre and another as developed E 
area and after deducting developmental costs @ Rs. 8,000 per acre, 
determined the total compensation including solatium and interest at Rs. 
1,22,250. 
On appeal the High Court adopted the market value of the land at 
90 paise per S<J. ft. but deducted the development costs at Rs. 18,000 per 
acre of the total extent of land and directed the payment of the balance 
amount. Hence the appeal. 
Allowing the appeal, this Court 
F 
HELD 1. Admittedly the lands remained to be agricultural land even G 
though situated within the limits of the Nagpur Municipal Corporation. 
The attempt of the appellant to have them converted into non-agricultural 
lands was rejected and the lands continued to be agricultural lands 
without being development for building purposes. This Court has 
repeatedly deprecated the method of evaluating the compensation on the H 
701 
702 
SUPREME COURT REPORTS [1995] SUPP. 4 S.C.R. 
A basis of square foot. When a large extent of 17.57 acres of land is offered 
for sale by private negotation, no one would come forward to purchase 
such a vast extent of land on s<1uare foot basis. The principle of determin-
ing the compensation of square foot basis is per se illegal. [703-D-E) 
B 
c 
2. If the lands are sold in tlie open market as agricultural land, they 
were capable of sale @ Rs. 5000 per acre. The Reference Court had deter-
mined market value as agricultural lands @ Rs. 90,000. Though alternative 
method had been adopted to use it as plots for the building purposes which 
also was adopted by the High Court, the alternative method adopted by the 
Reference Court as well as by the High Cpurt is not correct on the facts of 
this case. Accordingly, the appellant would be entitled to the market value 
of the land. for a total sum of Rs. 90,000 together with statutory rate of 
interest @4% per annum and also 15% solatium on the enhanced compen-
sation under Section 23(2) of the Act. [703,H, 704-A-B) 
CIVIL APPELLATE JURISDICTION : Civil Appeal<;-Nos. 2336-
D 36A of 1978. 
E 
From the Judgment and Order dated 7.8.78 of the Bombay High 
Court in A. No. 80 & F.A. No. 76 of 1966. 
U .R. Lalit, P.H. Parekh and Ms. Sunita Shamra for the Appellant. 
Wasim Qadri for the Respondents. 
The following Order of the Court was delivered : 
Notification under Section 4(1) of the Land Acquisition Act, 1894 
F 
(for short, 'the Act') was published in the State Gazette on October 26, 
1960' acquiring an extent of 17 acres 57 cents situated within the Nagpur 
Municipal limits for establishment of grain godown by the Central Govern-
ment. The Land Acquisition Officer in his award under Section 11 on 
April 13, 1967 adopted market value lo some lands @ 50 paise per sq. ft. 
and to some on 49 paise per sq. ft. and determined the compensation after 
G deducting the developmental costs at Rs. 2,28,134.91 and ultimately paid 
to the claimants the total compensation of Rs. 38, 414.91. On reference 
under Section 18, the senior Civil Judge by his award and decree dated 
June 30, 1966 evaluated the land on two methods, name)y, as an agricul-
tural land @ Rs. 5,000 per acre or alternatively as a developed area and 
H after deducting the developmental costs @ Rs. 8,000 per a.;,e determined the 
INDUMATI CHIT ALEY v. GOVf. OF INDIA 
703 
total compensation including solatium and interest at Rs. 1,22,250. On A 
appeal, the High Court in F.A. Nos. 80/66 and 76/66, both filed by the 
appellant as well as by the State, by judgment and decree dated August 7, 
1978 adopted that the market value of the land w

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