THE SPECIAL LAND ACQUISITION OFFICER, DHARWAD versus SMT. TAJAR HANIFABI

Citation: [1996] SUPP. 4 S.C.R. 748 · Decided: 19-08-1996 · Supreme Court of India · Bench: K. RAMASWAMY, G.B. PATTANAIK · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
THE SPECIAL LAND ACQUISITION OFFICER, DHARWAD 
v. 
SMT. TAJAR HANIFABI 
AUGUST 19, 1996 
B 
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.] 
Land Acquisition Act, 1894 : Sections 4, 11, 23 and 28. 
Land Acquisiti01r--Compensation--Detem1ination of-Acquisition of 
C six acres of land for Industrial Development-Award of compensation by 
Land Acquisition Officer on acrage basis-Reference Court and High Court 
determining compensation on square foot basis based upon a sale transaction 
relating to .a small extent of land situated at one and a half kms. away from 
acquired lancf-Appeal-Held the compensation detennined by die High 
Cowt and the reference court was not in accordance with law-The finding 
D of Reference Court that the lands are possessed of potential value was 
obviously illegal-Held a sum of Rs. 45, 000 per acre would be reasonable 
compensation for the acquired lands-Claimants held also entitled to 
solarium interest and additional amount. 
E 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11341 of 
1996 Etc. 
From the Judgment and Order dated 16.6.93 of the Karnataka High 
Court in M.FA. No. 1395 of 1991. 
F 
K.R. Nagaraja and K.L. Taneja for the Appellant. 
K. V. Narayanappa and Ms. Kiran Suri for impleading party. 
P. Mahale ;ind Shanta Kr. Mahale for the Respondents. 
G 
The following Order of the Court was delivered : 
Impleadment allowed. 
Leave granted. 
H 
We have heard learned counsel for parties. 
748 
-
SPL. LAND ACQN. OFFICER v. T. HANIFAlll 
749 
These appeals by special leave arises from the judgment and order A 
of the High Court of Karnataka dated June 16, 1993 made in MFA No. 
1395 of 1995. The admitted facts are that notification under Section 4(1) 
of the Land Acquisition Act, 1894 (for short, the "Act") was published on 
March 7, 1985 acquiring six acres of land near Chikodi municipality for 
industrial development. The Land Acquisition Officer (LAO) granted 
compensation on acrage basis. On reference, relying upon the sale deed 
Ex. P-8 in respect of land of an extent of 40" x 40" situated one and a half 
kms. away from the acquired lands which worked out to Rs. 12 per square 
foot, the Civil Judge enhanced the compensation to Rs. 6 per square foot 
which worked out to Rs. 2,66,360 per acre. On appeal, the High Court 
reduced the compensation to Rs. 4.50 per square foot which worked out 
to Rs. 1,96,020 per acre. 
B 
c 
The only question for consideration is : whether the compensation 
determined by the High Court and the reference Court is in accordance 
with law? It is seen that the sole basis worked out by both the reference D 
Court and the High Court was Ex. P-8 spoken to by the vendor PW-2 in 
respect of land of an ei<tent of 40" x 40" in the developed area in which 
case the compensation worked out to Rs. 12 square foot. Since six acres 
of land was sought to be acquired in two survey numbers, admeasuring 1.15 
gunthas in Rs. No. 407/2 and 4.25 gunthas in RS No. 417/1, no prudent and 
willing vendee would offer that rate of purchase of land on square foot E 
basis. The High Court and the reference Court, therefore, committed 
obvious error of law in determining the compensation on square foot basis 
relying solely on Ex. P-8 It is seen that Ex. P-8 is in respect of a small extent 
of land admeasuring 40" x 40" situated at a distance of 1.5 kms. within the 
developed municipal are. Under those circumstances, PW-8 offered no 
F 
comparable sale. 
The question then is : what would be the reasonable compensation 
for the acquired lands? Though the reference Court has noted that it has 
a potential value, obviously it is a wrong finding given by it. On going G 
through the award of the Collector we find, as specifically stated by him, 
that he had inspected the lands on August 11, 1986 before determination 
of the compensation; he found that the lands were cultivated and certificate 
to that effect was also obtained from the sub-Tehsildar. Under those 
circumstances, the finding that the lands are possessed of potential value 
is obviously illegal. It is seen that the respondents themselves had sold plots H 
750 
SUPREME COURT REPORTS [1996] SUPP. 4 S.C.R. 
A of land admeasuring 60" x 40" which were part of the acquired lands, in 
the year 1985 for a sum of Rs. 6,000 per plot. It would be obvious that this 
document was brought in existence to inflate the market value which 
worked out to Rs. 1,89,000. From the totality of the facts, particularly that 
the lands are agricultural lands, we
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