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
compensation.
 The
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
 The
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
us.

 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
contentions.

 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
land.

 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.

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