TaxTMI 
TaxTMI 
TaxTMI 
2009 (8) TMI 1248
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....ary drain; (ii) construction of sewage treatment plant; (iii) re-modeling of Nangloi drain; and (iv) planned development of Delhi. The said four acquisitions were initiated under notifications dated 13.2.1981, 20.2.1981 13.3.1981 and 31.12.1981 issued under Section 4(1) of the Land Acquisition Act, 1894 ("LA Act' for short). The extent of lands acquired and compensation awarded are as under: 2. The awards of the reference court were challenged by the landowners. The appeals were decided by the Delhi High Court by judgment dated 4.9.2001 awarding Rs. 67000 per bigha in regard to lands covered by notifications dated 13.2.1981, 20.2.1981 and 13.3.1981 and Rs. 73,584 per bigha in regard to lands covered by notification dated 31.12.1981. For arriving at the said market value, the High Court relied upon the allotment rates of Delhi Development Authority for plots shown in its Brochure issued on 9.2.1981 in respect of Rohini Residential Scheme (Phase-I), formed by acquiring part of Rithala village and surrounding villages. The provisional rates of allotment given in the said brochure were Rs. 100, Rs. 125, Rs. 150, and Rs. 200 per sq. m. respectively for plots of the size of ....
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.... Rs. 7,000 per bigha at the rate of 12% per annum for 20 years, was unacceptable. 4. After remand, parties let in further evidence. The High Court examined various pieces of evidence placed before it. It rejected the entire documentary evidence placed by both parties, except two documents for determining the compensation. The first is a sale deed (Ex. PW-1/1) dated 4/11.4.1980 under which land was sold in Rithala village for Rs. 19,000/- per bigha. The second is another sale deed (Ex. A1) dated 9.4.1981 under which one bigha of land was sold for Rs. 35,000/-. The average of the said two sale deeds, namely Rs. 27,000/- per bigha was determined as the market value in regard to the lands acquired under notifications dated 31.12.1981. In regard to the lands that were acquired under notifications dated 13.2.1981, 20.2.1981 and 13.3.1981, having regard to the fact that the said acquisitions were about 11 to 10 months prior to the acquisition of 31.12.1981, it determined the market value as Rs. 25,000/- per bigha. 5. Not being satisfied with the amount awarded the appellants have filed these appeals. According to them, the compensation awarded is low and it ought to have been higher. Th....
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....the economic capacity of the buyer, making it difficult to ascertain the real market value, whereas market value determination for acquisitions is uniform and does not depend upon the economic status of the land loser. Thirdly we are concerned with market value of freehold land, whereas the allotment "rates" in the DDA Brochure refer to the initial premium payable on allotment of plots on leasehold basis. We may elaborate on these three factors. 8. First factor: The percentage of 'deduction for development' to be made to arrive at the market value of large tracts of undeveloped agricultural land (with potential for development), with reference to the sale price of small developed plots, varies between 20% to 75% of the price of such developed plots, the percentage depending upon the nature of development of the lay out in which the exemplar plots are situated. The 'deduction for development' consists of two components. The first is with reference to the area required to be utilised for developmental works and the second is the cost of the development works. For example if a residential layout is formed by DDA or similar statutory authority, it may utilise around....
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....astructure will already be available. (Note: The percentages mentioned above are tentative standards and subject to proof to the contrary). 9. Therefore the deduction for the 'development factor' to be made with reference to the price of a small plot in a developed lay out, to arrive at the cost of undeveloped land, will be for more than the deduction with reference to the price of a small plot in an unauthorized private lay out or an industrial layout. It is also well known that the development cost incurred by statutory agencies is much higher than the cost incurred by private developers, having regard to higher overheads and expenditure. Even among the layouts formed by DDA, the percentage of land utilized for roads, civic amenities, parks and play grounds may vary with reference to the nature of layout - whether it is residential, residential- cum-commercial or industrial; and even among residential layouts, the percentage will differ having regard to the size of the plots, width of the roads, extent of community facilities, parks and play grounds provided. Some of the layouts formed by statutory Development Authorities may have large areas earmarked for water/sewa....
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....wever, in view of the difficulties referred to above, it is not safe or advisable to rely upon the allotment rates/auction rates in regard to the plots formed by DDA in a developed layout, in determining the market value of the adjoining undeveloped freehold lands. The DDA brochure price has therefore to be excluded as being not relevant. Whether the circle rates/guideline value rates can be relied upon to determine the market value? 12. The appellant relied upon the notification dated 21.1.1981 issued by the Land Division of Government of India, Ministry of Works and Housing, notifying the Schedule of Market Rates of land in different parts of Delhi and various outlying areas - showing the minimum rates Rs. 400/- per sq. yard for residential and Rs. 800/- sq. yard for non- residential plots. The question is whether the same could be relied upon for determination of market value in regard to land acquisition. When the matter came up before this Court in the earlier round, the counsel for the appellant had conceded that such rates could not form the basis for determining the market value of the acquired lands. In spite of it, the learned Counsel for appellant submitted before us ....
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....rose from Uttara Pradesh. In that case, the land owner filed a writ petition seeking a direction to U.P. Jal Nigam to pay compensation in regard to lands acquired on the basis of market value assessed by the Collector, Lucknow. The High Court allowed the petition and directed the U.P. Jal Nigam to pay compensation at the rate determined by the Collector, on the basis of the basic valuation circulars issued for purposes of stamp duty. This Court reversed the decision of the High Court following its earlier decision in Jawajee Naganatham and held that the Collector committed an error in determining the market value on the basis of Basic Value Circulars. Jawajee Naganatham was again followed in Bipin Kumar, which is another case from Uttar Pradesh. 13.3 All the four decisions rejected the value entered in the Basic Valuation Registers, on the ground that they had no statutory basis having regard to the provisions of stamp law applicable in the respective States (Andhra Pradesh and Uttar Pradesh) and cannot be the basis for determination of market value under Section 23 of LA Act. 14. There are also another set of decisions considering such circle rates could be considered as prima f....
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....ect of an area in which the property transferred lies. 16. It should however be noted that as contrasted from the assessment of market value contained in non-statutory Basic Value Registers, the position may be different, where the guideline market values are determined by Expert Committees constituted under the State Stamp Law, by following the detailed procedure laid down under the relevant rules, and are published in the State Gazette. Such state stamp Acts and the Rules thereunder, provide for scientific and methodical assessment of market value in different areas by Expert Committees. These statutes provide that such committees will be constituted with officers from the Department of Revenue, Public Works, Survey & Settlement, Local Authority and an expert in the field of valuation of properties, with the sub-registrar of the sub-registration district as the member secretary. They also provide for different methods of valuation for lands, plots, houses and other buildings. They require determination of the market value of agricultural lands by classifying them with reference to soil, rate of revenue assessment, value of lands in the vicinity and locality, nature of crop yiel....
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....cquisition on 24.10.1961 is relevant. 18. The appellants contend that some lands in Rithala were acquired under Section 4(1) notification dated 24.10.1961 for the planned development of Delhi and compensation was awarded at the rate of Rs. 7000 per bigha. Their contention is that as the present acquisition is in the year 1981, the market value of the acquired land should be determined with reference to the market value determined for the 1961 acquisition by providing an appropriate increase at the cumulative/ compounded rate of 12% per annum. 19. This Court had occasion to examine this issue recently. In The General Manager, Oil & Natural Gas Corporation Ltd. v. Rameshbhai Jivanbhai Patel 2008 (11) SCALE 637, this Court held: Normally, recourse is taken to the mode of determining the market value by providing appropriate escalation over the proved market value of nearby lands in previous years (as evidenced by sale transactions or acquisition), where there is no evidence of any contemporaneous sale transactions or acquisitions of comparable lands in the neighbourhood. The said method is reasonably safe where the relied-on-sale transactions/acquisitions precedes the subject acqu....
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....s were of any relevance to determine the market value in regard to the acquisition under notification dated 13.12.1981. It was of the view that Ex. A10 to A12 related to small bits of land and therefore were not of any assistance. It referred to the fact that the sales on 3.11.1981 (Ex. A10 and A11) were at a price of Rs. 68571 per bigha and sales on 27.7.1981 and 1.12.1981 (Ex.A3 and A12) were at a price of Rs. 49,000/-, whereas the market price on 9.4.1981 (Ex. A1) was only Rs. 35000 per bigha, thereby showing a steep increase in seven months. The High Court was of the view that the increase of nearly 95% in a period of 7 months or even a 40% increase in four/eight months demonstrated that they were not bonafide transactions and therefore, they should be ignored. The High Court did not consider the possibility that the steep increase may be a genuine increase on account of the rapid urbanisation of the area, or on account of the acquisitions in February and March, 1981 and/or on account of the locational advantage (such as nearness to road or nearness to developed area). 23. The High Court also rejected Ex.R3 to R7 relied upon by the respondents, solely on the ground that the pr....
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....(Ex.R3 to R7) relate to sales of lands in Rithala Village, they cannot be excluded from consideration merely on the ground that what has been awarded by the Land Acquisition Collector was higher in regard to some of the acquired lands. We accordingly find that the ground on which the High Court excluded the sale deeds Ex.R3 to R7 is not sound. The question whether these deeds (Ex.R3 to R7) should be excluded on any other relevant ground will be considered later. 24. We are therefore of the considered view that the reasons assigned by the High Court for rejecting Ex. A2,3, A10 to A13 and Ex R3 to R7 are not sound. All the sale deeds related to Rithala village and were of the year of acquisition, namely 1981. They were prior to the acquisition under notification dated 31.12.1981, which is the largest of the four acquisitions. The difficulty arises because of the marked difference in value, disclosed by the sale deeds exhibited by the respondents (Ex.R3 to R7) and the sale deeds exhibited by the appellants (Ex.A1 to A3 and A10 to A13). The sale deeds produced by the respondents (Ex. R3 to R7) which are of the period between 9.2.1981 to 28.11.1981 disclose a value of Rs. 9028 to Rs. 1....
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....sale deed and prove its contents. If the vendor or vendee was so examined, it was possible to cross-examine them so as to ascertain whether the transaction reflected by the exhibited instrument was a genuine transaction or a transaction showing a depressed value or a boosted value. But with the insertion of Section 51A, certified copies of registered sale deeds could be tendered as evidence without examining the vendor or vendee thereof and the court is enabled to accept them as evidence of the transaction recorded therein. The scope of Section 51A was explained by a Constitution Bench of this Court in Cement Corporation of India v. Purya 2004 (8) SCC 270 thus: But when the statute enables a court to accept a sale deed on the records evidencing a transaction, nothing further is required to be done.... Even the vendor or vendee thereof is not required to examine themselves for proving the contents thereof. This, however, would not mean that the contents of the transaction as evidenced by the registered sale deed would automatically be accepted. The legislature has advisedly used the word `may'. A discretion, therefore, has been conferred upon a court to be exercised judicially....
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....urdly low or high freakish value when compared to the prevailing price disclosed by other contemporaneous transactions may also be an extrinsic evidence. Where the sale deed recites the financial difficulties of the vendor and the urgent need to find money as reasons for the sale, that will be an intrinsic evidence of a distress sale. Therefore, though a certified copy of a sale deed may be received in evidence and exhibited even without examining the vendor and vendee, and accepted as proof of the transaction to which it relates, the courts have the discretion to rely upon it or reject it as unreliable or unacceptable for reasons to be recorded. 28. But a word of caution. What Narsaiah and Cement Corporation of India clarified was that a certified copy of a sale deed could be marked as an exhibit and its contents may be relied upon as evidence of the sale transaction, even without examining either the vendor or the vendee, in view of the enabling provision in Section 51 of the LA Act. If the acquisition is in regard to a large area of agricultural lands in a village, and the exemplar sale deed is also in respect of an agricultural land in the same village, it may be possible to r....
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....y be either with reference to contemporaneous sale deeds or awards made in respect of acquisition of comparable land or by other acceptable evidence) to show that the market value was much higher, the sale deed relied upon by the respondents showing a lesser value may be inferred to be undervalued, or not showing the true value. Such deeds have to be excluded from consideration as being unreliable evidence. A document which is found to be undervalued cannot be used as evidence. 31. But we have noticed a disturbing trend in some recent cases, where a court accepts the sale deed exhibited by the claimants as the basis for ascertaining the market value. But then, it also accepts a contention of the claimants that the general tendency of members of public is not to show the real value, but show a lesser value to avoid tax/stamp duty and therefore the sale deeds produced and relied on by them, should be assumed to be under valued. On such assumption, some courts have been adding some fancied percentage to the value shown by the sale deeds to arrive at what they consider to be `realistic market value'. The addition so made may vary from 10% to 100% depending upon the whims, fancies,....
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.... relate to 7 biswas of land each (about 350 sq. yds. each) and the purchaser is a business firm (M/s. Sant & Co.). Obviously, the land was not sold for agricultural purpose, as it is not possible to imagine plots measuring only 350 sq. yards being sold for agricultural purposes. Significantly, the other sale deeds, each of which relate to an area of one bigha and show a price of Rs. 35000/- per bigha (three deeds) and Rs. 49000/- per bigha (two deeds). It is evident the plots which were the subject matter of these sale deeds were sold as semi-urban land for residential or other non-residential purposes. There is no evidence or material to show that they were nominal or sham documents intended to create evidence of a higher market value. The variation in price between Rs. 35000 to Rs. 68571 may possibly be on account of several factors. It is possible that some plots were nearer while others were far away from roads or developed areas. In the absence of the evidence of vendors/vendees of these documents, we propose to take average of these transactions, which is approximately Rs. 50,790/- per bigha, as the market value of small plots sold for residential or non- agricultural purpose....
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....ransactions, determined the market value as Rs. 15,700/- per bigha in one case and Rs. 18,500/- per bigha in another case. On appeal by the claimants, the High Court excluded several sale transactions relied upon by the reference court as not inspiring confidence, and on the basis of a solitary transaction dated 10.9.1981 in regard to a small area of one bigha, increased the market value to Rs. 30,000/- per bigha. This Court held that the High Court erred in relying upon a single sale deed relating to a small extent of one bigha to determine the market value of a large extent of 5484 bighas. It further held that if that sale deed was excluded, there was no other evidence to support the increase in compensation made by the High Court. Consequently, this Court set aside the increase awarded by the High Court and restored the market value determined by the reference court. The learned Counsel for DDA submitted that a rate in that range (Rs. 15700 to Rs. 18500 per bigha) should therefore be adopted for the Rithala lands also. But that decision relating to Poothkalan is not of any assistance with reference to the Rithala acquisitions for the following reasons: (i) It is now well settl....