Court excludes unreliable evidence, values property based on market rates, awards increased compensation and statutory benefits

The court excluded Ex.R2 from consideration as it was deemed unreliable due to being grossly undervalued or a distress sale. The market value was determined based on twelve sale deeds, resulting in a value of Rs. 98.90 per sq.yd. Additionally, the deduction towards development costs was limited to 40% instead of the usual 67% due to the proximity to a State Highway and existing facilities, leading to a market value of Rs. 59.34 per sq.yd or Rs. 2,87,200 per acre. The compensation was increased accordingly, and statutory benefits were awarded to the appellants.

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Issues Involved:
1. Exclusion of Ex.R2 from consideration.
2. Deduction of one-third of the market value towards development cost.

Detailed Analysis:

Re: First Contention

Issue: The appellants contended that Ex.R2 dated 27.11.1984 relied upon by the Land Acquisition Collector (LAC) should have been excluded from consideration while determining the market value.

Judgment Analysis:
- Ex. R.2 Overview: Ex. R.2 relates to the sale of one acre of land for Rs. 30,000/-, which is significantly lower than the compensation offered by the LAC.
- Court's Finding: Given the large variance between the market value disclosed by the twelve sale deeds exhibited by the claimants (average of Rs. 78/85 per sq.yd) and the market value disclosed by Ex. R2 (Rs. 6.19 per sq.yd), and the fact that the value disclosed by Ex. R2 was even less than what was offered by the LAC, the court inferred that Ex. R2 was either grossly undervalued or was a distress sale and thus unreliable.
- Conclusion: Ex. R2 was excluded from consideration. Consequently, the average of the prices disclosed by the twelve sale deeds relied upon by the claimants (Rs. 78/85 per sq.yd) would be indicative of the market value in 1981-82. Adding 12% per annum cumulatively for two years, the market value as on 22.11.1984 was determined to be Rs. 98/90 per sq.yd.

Re: Second Contention

Issue: The appellants contended that the deduction of one-third of the market value of small plots towards development cost was erroneous and no deduction should have been made.

Judgment Analysis:
- Concept of Deduction: The court explained that when determining the market value of a large tract of undeveloped land with reference to the market value of small developed plots, it is necessary to deduct development costs. This deduction accounts for the non-saleable area (roads, parks, etc.) and the expenses involved in developing the land (levelling, laying roads, installing utilities, etc.).
- Standard Deduction: The standard deduction for development costs is typically one-third for roads and another one-third for development expenses, totaling up to 67%. However, the percentage may vary between 20% to 75% depending on circumstances.
- Court's Decision: Given the proximity of the acquired lands to a State Highway and the availability of facilities, the court limited the deduction to 40% towards development cost instead of the usual higher percentage. Thus, the market value was calculated to be Rs. 59/34 per sq.yd (Rs. 98/90 minus 40%) or Rs. 2,87,200/- per acre.

Relevancy of Other Acquisitions in the Same Village:
- Appellants' Argument: The appellants referred to two judgments of the Punjab & Haryana High Court relating to acquisitions in the same village, suggesting that the compensation should not be less than Rs. 68/- per sq.yd plus 25% for the two-year difference.
- Court's Finding: The lands in the referenced cases were more advantageously situated, adjoining National Highway No.8 and well-developed areas, whereas the acquired lands in the present case were farther away. Thus, the referenced decisions were not applicable.

Conclusion:
The appeals were allowed in part, increasing the compensation for the acquired lands to Rs. 2,87,200/- per acre. The appellants were also entitled to statutory benefits, including solatium at 30%, additional amount at 12% from the date of preliminary notification to the date of the award, and interest on the total compensation less the amount awarded by the LAC at 9% per annum for one year from the date of possession and 15% per annum thereafter. Each party was to bear their respective costs.

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