Land Acquisition - Comparable Sale Deeds - in the absence of other comparable sale deeds, lease deeds of Auction of Developed Plot by a Public authority can be considered as comparable sale deed - trial court refused to enhance the compensation basing on Ex.A7 to Ex.A10 Auction lease Deeds but the High court enchanced compensation basing on public auction lease deeds - Apex court confirmed the same- 2015 SC(2014) MSK LAW REPORTS 11
On 19.2.1997, a fresh notification was issued by the Land and
Building Department, Govt. of NCT of Delhi under Sections 4 and 17 of the
Land Acquisition Act, 1894 (the Act) proposing to acquire the land of the
appellants measuring 12 Bigha (12096 sq. yards) for development of Vasant
Kunj under the planned development scheme of Delhi.
In the reference court, the appellants produced four documents Exs
A7 to A10-perpetual lease deeds of residential plots in Vasant
Kunj, executed between September 1995 to December 1996 at the rates ranging from Rs.28,719/- to Rs.47,542/- per sq. yard. The reference court held that the lease deeds of auction of a developed plot by a public authority are
not a proper guide for determining the fair market value of the acquired
lands and reference court discarded the exemplars- Exs A7 to A10 lease
deeds and rejected the claim of the appellants for enhancement of
High Court had taken average of the exemplars- Exs A7 to A10 and deducted
40% from the average price towards smallness of the area and further
deducted one third towards development of land and fixed the market value
of the land at Rs.14,974/- per sq. yard. High Court held that the
appellants shall be entitled to 30% solatium on the above market value of
the land under Section 23(2) of the Act and 12% of the additional amount
under Section 23(1-A) of the Act. The High Court further ordered that
in terms of Section 28 of the Act on the enhanced market value, the
appellants shall be paid interest @ 9% per annum from 19.2.1997 i.e. date
of notification under Section 4 of the Act till 18.2.1998 and thereafter @
15% per annum till the date of deposit of compensation. It was also held
that interest shall also be paid on solatium and additional amount
appellants filed application C.M. No.735/2011 in L.A. Appeal No.149/2007
before the High Court under Sections 152 and 153 read with Section 151
C.P.C. to award Rs.48 lakhs which was paid as court fees and also prayed
for award of interest under Section 34 for the enhanced compensation. The
application was allowed in part by order dated 13.10.2011, granting
proportionate costs to the appellants over and above Rs.20,000/- as awarded
in High Court’s judgment dated 24.12.2010.
Being aggrieved by the quantum
of compensation and award of proportionate cost, the appellants are before
Special Leave Petition
(Civil) No.15272/2011 filed by DDA was dismissed on 12.5.2011 by a speaking
order. It is well settled that when a special leave petition is dismissed
with reasons, there is a merger of the judgment of the High Court in the
order of the Supreme Court. Dismissal of special leave petition filed by
DDA only means that this Court felt that the quantum of Rs.14,974/- per
sq. yard fixed by the High Court need not be further reduced. In the
special leave petition, though first appellant appeared and resisted the
same, the first appellant could not have advanced his arguments seeking
enhancement of compensation. Dismissal of special leave petition has become
final as against DDA. When SLP filed by DDA was heard and disposed of by
this Court (vide Order dated 12.05.2011), the appellants were pursuing
their review petition before the High Court which came to be dismissed on
13.10.2011. So far as the appellants are concerned, the order was then res
subjudice. Order of this Court dismissing the special leave petition
preferred by DDA, in our view, is not an impediment to the appellants to
pursue their appeals and we proceed to consider merits of the rival
Market Value: First question that emerges is what would be the
reasonable market value which the acquired lands are capable of fetching.
While fixing the market value of the acquired land, the Land Acquisition
Officer is required to keep in mind the following factors:- (i) existing
geographical situation of the land; (ii) existing use of the land; (iii)
already available advantages, like proximity to National or State Highway
or road and/or developed area and (iv) market value of other land situated
in the same locality/village/area or adjacent or very near to the acquired
Market value is ordinarily the price the property may fetch in the
open market if sold by a willing seller unaffected by the special needs of
a particular purchase. Where definite material is not forthcoming either
in the shape of sales of similar lands in the neighbourhood at or about
the date of notification under Section 4(1) or otherwise, other sale
instances as well as other evidences have to be considered.
Appellants have produced Exs A7 to A10-four perpetual lease
deeds of residential plots in Pocket C of Vasant Kunj Area between
September 1995 to December 1996, the details of which are as under:
|Exh. |Sale Date|Plot |Size |Sale Price |Rate |
| | |No. |(Sq.Mtr.)|(Rs.) |(Rs. per |
| | | | | |sq.yd.) |
|A-7 |22.09.95 |59C |218 |5,75,05,000/-|28,719/- |
|A-8 |02.02.96 |5C |220 |96,55,000/- |36,695/- |
|A-9 |02.02.96 |8C |231 |1,01,61,000/-|36,779/- |
|A-10 |10.12.96 |13C |242 |1,37,60,000/-|47,542/- |
Exs A7 to A10 are lease deeds of small plots executed by DDA.
Plots in the above lease deeds are in the same vicinity of the acquired
land and High Court had taken the same as comparable sales.
‘Freehold land’ and ‘leasehold land’ are conceptually
different. If a property subject to a lease and in the possession of a
lessee is offered for sale by the owner to a prospective private
purchaser, the purchaser being aware that on purchase he will get only
title and not possession and that the sale in his favour will be subject to
encumbrance namely, the lease, he will offer a price taking note of the
encumbrances. Naturally, such a price would be less than the price of a
property without any encumbrance. But when a land is acquired free from
encumbrances, the market value of the same will certainly be higher.
Exs A7 to A10 are the perpetual lease deeds relating to the
period from September 1995 to December 1996 and to get the perpetual lease
deeds converted as freehold, the holder of perpetual leasehold has to pay
further amount to DDA.
Having regard to the period of Exs A7 to A10 and
the date of issuance of Section 4 notification dated 19.2.1997, in our
view, addition of 20% is to be added for arriving at the value of
‘freehold’ property. Adding 20% to Rs.37,433.75 per sq. yard which comes
to Rs.7,486.75, the value is calculated at Rs.44,920.50 rounded off to Rs.
44,921/- per sq. yard.
The general rule that the sale prices of the comparable sales
should be relied upon for calculating the market value will not apply when
the sale transactions relied upon are auction sales. As per the decision
in Karnataka Housing Board’s case (2011) 2 SCC 246, in our view, 20%
deduction is to be made for competitive bidding. Deducting 20% i.e.
Rs.8,984/- from Rs.44,921/-, balance arrived at Rs.35,937/- per sq. yard
is fixed as the value for the acquired land.
In the instant case, having regard to the extent of the land
acquired and the development in and around Vasant Kunj area, in our view,
it is appropriate to make 35% deduction towards utilization of the land
area in the layout for roads, drains, parks, playgrounds and civic
amenities. So far as the expenditure for development of the large extent
of land into a developed area by construction of proper roads,
underground drainage, sewerage and erection of electricity lines, it is
appropriate to make further deduction of 25%, though 35% of the value was
deducted in Lal Chand case (supra) towards development charges. Two
components taken together, the total deduction to be made would be 60%.
60% of Rs.35,937/- works out to Rs.21,562/- and deducting the same, the
value of the land would be Rs.14,375/- per sq. yard.
What was awarded by the High Court was Rs.14,974/- per sq. yard.
Since the SLP (Civil)
No.15272/2011 filed by DDA was dismissed by this Court on 12.5.2011 and the
sale has become final as against the appellants, we are not inclined to
further reduce the value of the acquired land from Rs.14,974/- per sq. yard
as determined by the High Court and the compensation awarded by the High
Court at Rs.14974/- per sq. yard is maintained.