TaxTMI 
TaxTMI 
2007 (12) TMI 480
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.... issued by the Collector under Section 9 of the Act, landowners filed objections claiming compensation for their land which had been acquired. The Land Acquisition Collector, after holding an enquiry, gave an award on 14.7.1983 under Section 11 of the Act. The Collector gave award on the basis of quality of land, for which purpose he divided the acquired land in seven categories and the market value was assessed at Rs. 6,000/- to Rs. 35,000/- per acre for different types of lands. Feeling aggrieved by the award of the Collector, the appellants herein (landowners) sought reference to the Court under Section 18 of the Act. The learned Additional District Judge awarded compensation at a flat rate of Rs. 43,000/- per acre by placing reliance on Ex. R-6 and R-7, two instances of sale deeds of village Chhapra. After taking average of these sale transactions, an addition of 25% was made for fixing the market value of the land. Against the award made by the learned Additional District Judge, the claimant-appellants (landowners) preferred 17 appeals before the High Court. The High Court after appraisal of evidence on record held that the market value of the land acquired was Rs. 1,20,000/- ....
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....n of an economic event viz., a price outcome of hypothetical sale expressed in terms of probabilities. See Thakur Kanta Prasad v. State of Bihar, AIR 1976 SC 2219; Prithvi Raj Taneja v. State of M. P., AIR 1977 SC 1560; Administrator General of West Bengal v. Collector, Varanasi, AIR 1988 SC 943 and Periyar v. State of Kerala, AIR 1990 SC 2192. 5. For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like, water, electricity, possibility of their further extension, whether near about Town is developing or has prospec....
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.... It thus recorded a finding that the market value of the land was Rs. 1,20,000/- per acre. In our opinion, there being no other documentary evidence, the view taken by the High Court that the market value of the land was Rs. 1,20,000/- per acre is perfectly correct and calls for no interference. 8. Shri Rakesh Dwivedi, learned senior counsel for the sugar mill has submitted that the exemplars filed by the appellants were of very small pieces of land and, therefore, they are not safe guide to determine the market value of the land. It may be mentioned here that while determining the market value, the potentiality of the land acquired has also to be taken into consideration. The appellants have led evidence to show that the acquired land had the potentiality to be used for commercial, industrial and residential purposes. PW.1 Rakesh Kumar had prepared a site plan which showed that the acquired land was adjacent to the abadi of Shahabad and abutted the Shahabad-Ladwa Road. The site plan also shows that there existed rice shellers, cold storage, shops, godowns, a college and houses etc. on both sides of Shahabad-Ladwa Road. PW.2 Baldev Singh was Patwari of village Chhapra in the year ....
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....ch as roads, drainage, electricity, communications etc. then the principle of deduction simply for the reason that it is part of the large tract acquired, may not be justified. In the present cases the lands covered by the acquisition are located by the side of the National Highway and the Southern Railway Staff Quarters with the Town Planning Trust road on the north. The neighbouring areas are already developed ones and houses have been constructed, and the land has potential value for being used as building sites. Having found that the land is to be valued only as building sites and having stated the advantageous position in which the land in question lies though forming part of the larger area, the High Court should not have applied the principles of deduction. It is not in every case that such deduction is to be allowed. Therefore, the High Court erred in making a deduction of one third of the value of the comparable sale and thus reducing the fair market value of land from Rs. 10 per sq. yard to Rs. 6.50 per sq. yard." Shri Verma has also referred to Kasturi & Ors. v. State of Haryana (2003) 1 SCC 354, wherein it was observed that in cases of those land where there are cert....
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.... be made." 11. In Chimanlal v. Special Land Acquisition Officer, AIR 1988 SC 1652 it was held as follows in para 4 (15) of the reports. "Firstly while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a lay out, carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers (meanwhile the invested money will be blocked up) and the hazards of an entrepreneur. The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approx, between 20% to 50% to account for land required to be set apart for carving out lands and plotting out small plots. The discounting will to some extent also depend on whether it is a rural area or urban area, whether building activity is picking up, and whether waiting period during which the capital of the entrepreneur would be locked up, will be longer or shorter and the attendant hazards"." 12. Shri Dwivedi has also referred to Basant Kumar & Ors. v. Union of India & Ors. (1996) 11 SCC 542, K. Vasundara Devi v. Revenue Divisional Officer (LAO) (1995) 5 SCC 426, H.P. Housing Board v. Bharat S. Negi & Ors. (2004) 2 SCC 184. In the fi....