SURESH KUMAR versus TOWN IMPROVEMENT TRUST, BHOPAL

Citation: [1989] 1 S.C.R. 908 · Decided: 03-03-1989 · Supreme Court of India · Bench: G.L. OZA · Disposal: Appeal(s) allowed

Judgment (excerpt)

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SURESH KUMAR 
v. 
TOWN IMPROVEMENT TRUST, BHOPAL 
MARCH 3, 1989 
[G.L. OZA AND K.N. SAIKlA, JJ.] 
Madhya Pradesh Town Improvement Trust-Section 68-Land 
acquired-Compensation for such /and-Determine market value 
taking into account its special value. 
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Constitution of India, 1950:-Art. 136--Appeal involving ques-
tion of valuation of acquired /and-interference with award-Only when 
erroneous principle invoked or important piece of evidence overlooked 
or misapplied. 
Land Acquisition Act, 1894-Sections, 4, 23-25-Compensation 
for land acquired-Principles for <ietermination-Determine market 
value of land taking into consideration its special value. 
Respondent-Town Improvement Trust Bhopal acquired 152 
acres of land in village J amalpura under section 68 of the Madhya 
Pradesh Town Improvement Trust Act within the municipal limits of 
Bhopal. That land included 12.62 acres of land belonging to the appel-
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lant on which stood a house, a well and some trees. The appellant being 
not satisfied with the amount of compensation offered to him by the 
Trust, made a Reference to the Compensation Tribunal. The Tribunal 
awarded compensation at the rate of Rs.6,000 per acre for the land, 
Rs.5,000 for the building, Rs.3,000 for the well and Rs.815 for the 
trees. Thus the Tribunal awarded a total sum of Rs.1,20,000 as com-
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pensation as against a claim ofRs.13,39,560 made by the appellant. On 
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appeal, the High Court, maintained the award in respect of the build· 
ing, well and the trees but enhanced the same so far as the land is 
concerned by determi_nitlg the market value of Rs.12,000 per acre. 
Working or this basis, including 15% solatium, the total amount of 
compensation awarded worked out to be Rs.1,84,923. 
Being dissatisfied with the Order of the High Court, he has come 
up to this Court after obtaining special leave. 
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The main contentions urged by the appellant are (i) that the house 
and well are undervalued; (ii) that the land ought to have been treated 
as urbanised developed land; (iii) that potential value of the land has not 
908 
SURESH v. TOWN IMPROVEMENT TRUST 
909 
been taken into consideration while determining compensation; (iv) that 
the value of the sales of similar plots has wrongly been rejected. 
Partly allowing the.appeal, this Court, 
HELD: Jn determining market value, where there was no suffi-
cient direct evidence of market price, the Court is required to ascertain 
as best as possible from the materials before it, what a willing vendor 
would reasonably have expected to obtain from a willing purchaser 
from the land in its particular position and with its particular poten-
tiality. [914C-D] 
A land which is certainly or likely to be used in the immediate or 
reasonably near future for building purposes but which at the valuation 
date is waste land or has been used for agricultural purposes, the 
owner, however, willing a vendor he is, is not likely to be content to sell 
the land for its value as waste or agricultural land as the case may be. 
The possibility of its being used for building purposes would have to be 
taken into account. However, it must not be valued as though it had 
already been built upon. It is the possibilities of the land and not its rea-
lised possibilities that must be taken into consideration. [914E-F] 
In estimating the marktt value of the land, all the capabilities of 
the land and all its legitimate purposes to which it may be applied, or 
for which it may be adapted are to be considered and not merely the 
condition it is in and the use to which it is put at the time applied by the 
owner. The proper principle is to ascertain the market value of the land 
taking into consideration the special value which ought to be attached to 
the special advantage possessed by the land; namely, its proximity to 
developed urbanised areas. [915A-ll] 
The value of the potentiality has to be determined on such 
materials as are available and without indulgence in Ots of imagina-
tion. [91511-C] 
A court of appeal interferes not when the judgment under attack 
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is not right, but only when it is shown to be wrong. [912E] 
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In an appeal under Art. 136 of the Constitution of India involving 
the question of valuation of acquired land, the Supreme Court will not 
interfere with the award unless some erroneous principle has been 
invoked or some important piece of evidence has been overlooked or 
misapplied. -[91211-cf 
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