TEK CHAND (DEAD) BY L.RS. AND ORS. versus UNION OF INDIA AND ORS. ETC.

Citation: [1990] SUPP. 1 S.C.R. 126 · Decided: 31-08-1990 · Supreme Court of India · Bench: M.H. KANIA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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TEK CHAND (DEAD) BY L.RS. AND ORS. 
v. 
UNION OF INDIA AND ORS. ETC. 
AUGUST 31, 1990 
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[M.H. KANIA, K.N. SAIKIA AND K. RAMASWAMY, JJ.] 
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Land Acquisition Act, 1894: Section 4-Acquisition of land-
Determining compensation thereof-Relevant factors and circumstances 
-High Court placing reliance on circumstances not relevant-Matter 
remanded to High Court. 
Notification nnder section 4 of the Land Acqnisition Act, 1894 was 
issned in respect of the appellant's lands in 1959 and the lands were 
acquired. The Land Acquisition Collector awarded compensation at the 
rate of Rs.2,000 per bigha, as also solatium and interest. 
The appellants approached the District Conrt which enhanced the 
compensation from Rs.2,000 per bigha to Rs.4,000/5,000 per bigha. 
The appellants preferred appeals before the High Court. Taking into 
acconnt a comparable sale in the area few months before the Notifica-
tion, the High Court enhanced the compensation to Rs.7,000 per bigha 
and also awarded solatium and interest. The plea for higher compensa-
tion on the gronnd that some developed plots were sold by a real estate 
company at a higher rate was negatived since according to the High 
Co.urt that company was in a better position to develop the land and 
that th~ potentiality of the land in its hands was greater. 
These appeals, by special leave, are against the said orders of the 
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High Court. 
Allowing the appeals, 
HELD: 1. In land acquisition proceedings compensation has to he 
fixed on the basis of a hypothetical sale at or about the time of the 
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notification under section 4 of the Land Acquisition Act of similar land 
by a willing seller to a willing boyer, there being no other factors like 
urgent need of money or urgent need of the land for a special purpose 
and so on which might depress or augment the price. In determining 
this compensation the ability of a particular party or his lack of ability 
to develop the land and to realise its potential, cannot be regarded as a 
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relevant . circmnstance. The High Court, therefore, was in error in 
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TEK CHAND v. U.0.1. [KANIA, J.] 
127 
placing great reliance of the aforesaid circumstance in determining the 
value of the land for fixing the compensation. [128F-H] 
2. The appellants have failed to furnish any material on record of 
this Court on which this Court could fix the proper compensation nor 
have any arguments been advanced in that regard. In these circum-
stances, the impugned judgments and orders are set aside and the appe-
als remanded to the High Court for determination of the proper com-
pensation for the lands acquired in accordance with law, and in the 
light of our judgment. [129A-B] 
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 
1334 and 1335 of 1982. 
From the Judgment and Order dated 9.11.1979 and 8.5.1979 of 
Delhi High Court in LP.A. No. 192 of 1979 and R.F.A. No. 245 of 1969. 
Sasidharan and P.K. Pillai for the Appellants. 
Tapas Ray, A.K. Srivastava and Ms. A. Subhashini for the 
Respondents. 
The following Order of the Court was delivered: 
KANlA, J. Lands comprising a few bighas belonging to the clai-
mants (appellants) and situated in the area now known as 'Nehru Place' in 
Delhi were notified for acquisition by the Government of India by a Notifi-
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tion dated• November 13, 1959, issued under Section 4 of the Land 
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Acquisition Act. 1894. The said lands were duly acquired under the 
said Act. In compensation proceedings the Land Acquisition Collector 
awarded to the claimants (appellants) compensation at the rate of 
Rs.2,000 per bigha and further awarded solatium and interest as pro-
vided by law. In two references under section 18 of the Land Acquisi-
tion Act at the instance of the appellants, the Additional District 
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Judge enhanced the compensation from Rs.2,000 per bigha to 
Rs.4.000/5,000 per bigha. From the orders of the Additional District 
Judge. -the appellants filed appeals in Delhi High Court. The Delhi 
High Court enhanced the compensation to Rs.7 ,000 per bigha and also 
awarded solatium and interest. Compensation was detern1incd at the 
aforesaid rate largely on the footing of a sale of comparable land by 
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128 
SUPREME COURT REPORTS 
[1990] Supp. 1 S.C.R. 
one Puran to the Delhi Finance Company Private Limited (hereinafter 
referred to as the 'DLF Co.'). That sale took place a few months prior 
to the date of the Notification and rate at which the land was sold wa
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