THE LAND ACQUISITION OFFICER, KAMMARAPALLY VILLAGE, NIZAMABAD DISTRICT, ANDHRA PRADESH versus NOOKALA RAJAMALLU AND ORS.

Citation: [2003] SUPP. 6 S.C.R. 67 · Decided: 21-11-2003 · Supreme Court of India · Bench: DORAISWAMY RAJU · Disposal: Case Partly allowed

Judgment (excerpt)

THE LAND ACQUISITION' OFFICER, KAMMARAPALLY 
A 
VILLAGE, NIZAMABAD bJS;fRICT, ANl)HRA PRADESH 
V.tq 
NOOK.ALA RAJAMALLU AND ORS. 
NOVEMBER 21, 2003 
B 
[DOORAISWAMY RAJU AND ARIJIT PASAYAT, JJ.] 
Land Acquisition Act, 1894 : 
Section 23-Land acquisition-Compensation-Awarding of-
Relevant factors to be considered-Held: Where large area was acquired, C 
rate at which small plots were sold not a safe criterion to fix compensation-
However, where there was no. material to determine marke/ value, prices 
paid for small plots maybe taken as compensation to fix market value of 
the land acquired-Market value of the land on the date of acquisition a 
relevant factor-Necessary deductions for the formation of roads and other D 
civic amenities, laying out roads, drains, sewers, water and electricity lines 
to be made while fixing the market value. 
The appellant acquired the lands belonging to the respondents for 
providing house sites to the weaker sections of people. The Notification 
under Section 4(1) of the Land Acquisition Act, 1894 was duly gazetted. E 
The appellant awarded a certain compensation to the respondents, 
which was enhanced by the Reference Court under Section 18 of the 
Act. The High Court further enhanced the said compensation. Hence 
this appeal. 
Allowing the appeal in part, the Court 
HELD: 1.1. Where large area is the subject matter of acquisition, 
rate at which small plots are sold cannot be said to be a safe criterion. 
(71-D] 
t••i ( 
The Collector of Lakhimpur v. Bhuban Chandra Dutta, AIR (1971) 
SC 2015; Prithivi Raj Taneja v. State of MP., AIR (1977) SC 1560 and 
Smt. Kausalya Devi Bogra v. Land Acquisition Officer, AIR (1984) SC 
892, relied on. 
F 
G 
1.2. It cannot, however, be laid down as an absolute proposition H 
67 
68 
SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. 
A that the rates fixed for the small plots cannot be the basis for fixation 
of the rate. For example, where there is no othf'r material it may in 
appropriate cases be open to the adjudicating Court to make compari-
son of the prices paid for small plots of land. However, in such cases 
necessary deductions/adjustments have to be made while determining 
B the prices. [71-E-FJ 
2.1. While considering the market value disinclination of the 
vendor to part with his land and the urgent necessity of the purchaser 
to buy it must alike be disregarded. Neither must be considered as 
C acting under any compulsion. The value of the land is not to be 
estimated as its value to the purchaser. But similarly, this does not 
mean that the fact that some particular purchaser might desire the 
land more than others is to be disregarded. The wish of a particular 
purchaser, though not his compulsion, may always be taken into 
consideration for what it is worth. The first criterion to be taken into 
D consideration under Section 23 of the Land Acquisition Act, 1894 is the 
market value of the land on the date of the publication of the 
notification under Section 4(1) of the Act. (72-A-C) 
Suresh Kumar v. Town Improvement Trust, AIR (1989) SC 1222 and 
E Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, AIR 
(1939) PC 98, referred to. 
2.2. Value of the potentiality is to be determined on such materials 
as are available and without indulgence· in any fits of imagination. 
F Impracticability of determining the potential value is writ large in 
almost all cases. There is bound to be some amount of guesswork 
involved while determining the potentiality. (72-D-E] 
3.1. It can be broadly stated that the element of speculation is 
G reduced to a minimum if the underlying principles of fixation of 
market value with reference to comparable sales are made: 
(i) when the sale is within a reasonable time of the date of 
notification under Section 4(1); 
H 
(ii) it should be a bona fide transaction; 
LAND ACQUISITION OFFICER v. NOOKALA RAJAMALLU 
69 
(iii) it should be of the land acquired or of the land adjacent to A 
the land acquired; and 
(iv) it should possess similar advantages. [72-E-G) 
3.2. It is only when the above factors are present, it can merit a B 
consideration as a comparable case. (72-H) 
The Special Land Acquisition Officer v. T Adinarayan Setty, AIR 
(1959) SC 429, relied on. 
4. The evidence on record shows that the acquired lands were C 
agricultural lands. Obviously; ·their· valuation would differ to a 
considerable extent from)the land used for house sites. In such a case, 
necessary deductions for the extent of land

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