STATE OF UTTAR PRADESH ETC. versus SMT. RAM KUMARI DEVI ETC.

Citation: [1996] 2 S.C.R. 749 · Decided: 15-02-1996 · Supreme Court of India · Bench: K. RAMASWAMY, G.B. PATTANAIK · Disposal: Case Partly allowed
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Judgment (excerpt)

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STATE OF UTTAR PRADESH ETC. 
A 
v. 
SMT. RAM KUMARI DEVI ETC. 
FEBRUARY 15, 1996 
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.) 
B 
Land Acquisition Act, 1894: 
Sections 4( I), 11, 23( 1-A), 23(2) and 28-Award of compensation-In 
matters of compulsory acquisition, it is the solemn duty of the Court to assess C 
reasonable compensation and to avoid needless burden on public exche-
que1~Sale deeds brought into existence to inflate market value-Not to be 
accepted-In view of the State agreeing to pay at the rate of Rs. 30, 000 per 
acre, compensation to be detennined accordingly-Claimants entitled to 
statutory solatium, interest till date of deposit of compensation and addition-
al amount on enhanced compensation. 
D 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3814 Of 
1996 Etc. 
From the Judgment and Order dated 16.11.94 of the Allahabad High E 
Court in F.A. No. 603 of 1993. 
AB. Rohtagi, K. Mishra, Sudhanshu and R.B. Misra for the Appel-
lants. 
M.N. Krishnamani, P.K. Jain, R.C. Verma and Ashok K. Srivastava, 
for the Respondents 
The following Order of the Court was delivered : 
F 
Leave granted. We have heard learned counsel on both sides. 
Notification under Section 4(1) of the Land Acquisition Act 1of1894 G 
(for short, the 'Act') was published on September 14, 1985 acquiring 13.75 
acres for setting up the Government Degree College at Lalitpur, State of 
U.P. The Land Acquisition Officer in his award dated September 1, 1988 
made under Section 11 of the Act determined the compensation at the rate 
of Rs. 11,887.78 per acre. On reference under section 18 of the Act, the H 
749 
750 
SUPREME COURT REPORTS 
[1996] 2 S.C.R. 
A 
District Judge by his award and decree dated April 21, 1990 determined 
the compensation at tlie rate of Rs. 5 per sq. ft. On appeal by the 
appellants, the High Court reduced the compensation to Rs. 3.30 per sq. 
ft. by judgment and decree dated November 16, 1994 in First Appeal No. 
603/93 etc. Thus these appeals by special leave. 
B 
.C 
It is contended by Shri AB. Rohtagi, learned senior counsel for the 
appellants that the whole approach adopted by the High Court and the 
reference Court is clearly illegal and erroneous. When 13.75 acres of land 
was acquired for public purpose, would a reasonable prudent purchaser 
offer to purchase the land at the square foot basis is the question posed 
and rightly posed by the learned counsel for the appellant. The reference 
Court relied on three sale deeds Ex. A2, A3 and Al. Ex.A2 relates to an 
extent of 60'x20' of land sold by the claimant himself on October 18, 1984 
for a sum of Rs. 6,000 which worked out at the rate of Rs. 5 per sq. ft. He 
also sold an extent of land of 40'x40' ft. for a sum of Rs. 8,000 under Ex. 
D A3 on January 19, 1983. 1600 sq. ft. was sold for a sum of Rs. 8,000 on 
January 18, 1983 under Ex.Al. The reference Court relied upon these sale 
deeds and also the rates prescribed by the local administration for the 
purpose of stamp duty at Rs. 8 per sq. ft. for the road margins and Rs. 5 
per sq. ft. for the interior land. Relying thereon, the reference Court 
dettrmined the compensation at Rs. 5 per sq. ft. The High Court while 
E accepting the same, deducted l/3rd towards developmental charges and 
determined the compensation at Rs. 3.30 per sq. ft. 
It is seen that small pieces of land of an extent of 60' x 20', 40' x 40' 
and 1600 sq. ft. were sold.by .the claimants, obviously on coming to know 
F 
of the proposed acquisition. It is common knowledge that acquisition 
proposal would be made at an earlier point of time and finalisation of 
acquisition would take long time. In the process,on becoming aware of the 
acquisition, obviously, these sale deeds have been brought into existence to 
inflate the market value. It is laid down by this Court which is well settled 
G principle that it is the duty of the court to assess reasonable compensation. 
Burden in on the owner to prove the prevailing market value. On adduction 
of evidence by the parties, the acid test which the Court has to adopt is 
that the court has to sit in the arm-chair of a prudent purchaser, eschew 
feats of imagination and consider whether a reasonable prudent purchaser 
in the open market would offer the same price which the Court is intending 
H to fix the market value in respect of the acquired land. Since it is a 
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STATE v. RAM KUMAR! DEVI 
751 
compulsory acquisition, it is but the solemn duty of the Court to assess A 
reasonable compensation so
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