PETITIONER:
PADMA UPPAL ETC.
Vs.
RESPONDENT:
STATE OF PUNJAB & ORS.
DATE OF JUDGMENT23/08/1976
BENCH:
SINGH, JASWANT
RAY, A.N. (CJ)
BEG, M. HAMEEDULLAH
CITATION:
1977 AIR 580 1977 SCR (1) 329
1977 SCC (1) 330
ACT
Land acquisition--Fixing compensation--When the Supreme
Court could interfere.
Procedure--When a Court of appeal can interfere in the
lower court’s judgment.
HEADNOTE
In respect of a vast area of land, partly urban and
partly rural, adjoining each other, acquired by the State
Government the Collector classified a part of it as poten-
tial building area and part as agricultural land and fixed a
slightly higher rate of compensation for the former and a
lower rate for the latter. Accepting the classification, the
Senior Sub-Judge to whom the determination of compensation
was referred enhanced the compensation in respect of both
classes of land. In appeal, the High Court further enhanced
the compensation of both classes of land. In further appeal
to this Court, it was contended that since the whole of
the land in question formed one consolidation block, the
entire area should have been treated as potential building
area and compensation fixed on the basis of the market
value.
Dismissing the appeals,
HELD: In an appeal from an award granting compensation,
this Court should not interfere unless there is a wrong
application of any well-settled principle or unless there is
something to show not merely that on the balance of evidence
it is possible to reach a different conclusion but that the
judgment cannot be supported by reason of a wrong applica-
tion of a. principle or because some important point affect-
ing valuation has been overlooked or misapplied. There is a
prudent condition to which the appellate power, generally
speaking is subject, namely that a court of appeal inter-
feares not when the judgment under attack is not right but
only when it is shown to be wrong. [333 F]
The Special Land Acquisition Officer, Bangalore
v.T..Adinarayan Setty [1959] Supp. 1 S.C.R. 404. Datta-
trayaya Shankarbhat Ambalgi & Ors. v. The Collector of
Sholapur & Anr. [1971] 3 S.C.C. 43 and The Dollar Company,
Madras v. Collector of Madras [1975] 2 S.C.C. 730 referred
to.
In case of acquisition of several plots of land which
constitute one block comprising of agricultural land and
potential building area, the principle of belting has no
application. As such the erstwhile proprietors of the plots
cannot be granted compensation for the agricultural land at
the same rate at which compensation is determined in respect
of potential building area which is better situate and
possesses far greater advantages. [332 G]
Mirza Nausherwan Khan & Anr. v. The Collector (Land
Acquisition) Hyderabad [1975] 1 S.C.C. 238 applied.
JUDGMENT
CIVIL APPEALS Nos. 2694-2695, 2697-2700 and 2703-2704,/72.
Appeals from the Judgment and Order dated 3-1-68 of the
Punjab and Haryana High Court in Regular First Appeal Nos.
190-193, 195198/62, 233 and 234/64 and
CIVIL APPEALS NOS. 2694-2695, 2697-2700 and 2703-2704/72.
Appeals from the Judgment and Order dated 3-1-68 of the
Punjab & Haryana High Court in R.F.A. Nos. 192-193, 195-
198 ’and 233-234/62.
330
S.T. Desai (In C. As. 2394-2397 of 1972), F.S. Nariman
(In C As. 2398 to 2402/72, Naunitlal and Miss Lalita Kohli
for the Appellants in C.As. 2394-2403/72 and for Respondents
in C.As. 2694-2695, 2697-2700. and 2703-2704/72.
O.P. Sharma for the Appellant in C.As. 2694-2695, 2697-
2700 and 2703-2704/72 and for the Respondents in C.As.
2394-2403/72.
The Judgment of the Court was delivered by
JASWANT SINGH, J.--This batch of 18 appeals Nos. 2394 to
2403 of 1972 and 2694, 2695, 2697 to 2700, 2703 and 2704 of
1972 by certificates granted under Article 133(1)(a) of the
Constitution which arise out of acquisition proceedings
under the Land Acquisition Act, 1894 (Act No. 1 of 1894)
(hereinafter referred to as ’the Act’) and are directed
against the common judgment dated January 3, 1969 of the
High Court of Punjab and Haryana shall be disposed of by
this judgment. While the first group of ten appeals Nos.
2394 to 2403 of 1972 are by the erstwhile proprietors of
land claiming enhancement of the compensation awarded to
them by the High Court, the rest of the eight appeals are by
the State of Punjab challenging the quantum of compensation
as enhanced by the High Court.
It appears that a vast area of land measuring 832
kanals and 2 marlas (i.e. 416050 sq. yds) situate in Amrit-
sar (Urban) and village Tungbala, Amritsar was acquired by
the Government of Punjab for a public purpose viz. the
expansion of the existing Medical College and allied
institutions in the city of Amritsar. Whereas the notifica-
tion under section 4 of the Act in respect of the aforesaid
area was issued on March 18, 1959, the notification under
section 6 of the Act wag issued on July 4, 1959. The
Collector, Amritsar, classified the aforesaid area for
fixation of compensation into two categories viz. the
potential building area and the agricultural land. The
Collector categorised 60 kanals and 18 marlas (i.e. 30450
sq. yds). which abutted on the circular Road and Majitha
Road as potential building area and the remaining 771
kanals and 4 marlas as agricultural land and by his order
dated December 2, 1959 awarded Re. 1/- per sq. yd. as com-
pensation for the potential building area and Re. -/’6/- per
sq. yd. for agricultural land. Dissatisfied with the
award, the erstwhile proprietors approached the Collector
requesting him to make, references to the Senior Sub-
Judge, Amritsar under section 18 of the Act. The Senior
Sub-Judge made a spot inspection for the purpose of apprais-
al of the evidence adduced before him and by his judgment
and award dated June 9, 1962 accepted the classification
made by the Collector but enhanced the compensation of the
agricultural land to Re. 1/- per sq. yd. and of the poten-
tial building area to Rs. 1.50 per sq. yd. On appeal, the
High Court after taking into consideration some transactions
of sales in the locality proximate in point of time to the
date of the publication of the notification under section
4(1) of the Act, the opinion of the valuers regarding the
trend of the prices of land in the locality and the situa-
tion and potentialities of the land in question by its
aforesaid judgment and decree dated January 3, 1968 awarded
Rs. 3/- per sq. yd. for the agricultural land and Rs. 4.50
per sq. yd. for
331
the potential building area. It is against this judgment
and decree that the present appeals, as already stated have
been preferred.
At the hearing of these appeals, counsel for the appel-
lants in the first set of ten appeals have, in the first
instance, urged that as the plots of land in question formed
one consolidated block, the entire area thereof should have
been treated as potential building area and compensation
awarded accordingly. It has been next contended by coun-
sel for the appellants particularly in appeals Nos. 2402 and
2403 of 1972 that the High Court has erred in overlooking
the evidential value furnished by (i) the award made by the
Collector, Amritsar fixing Rs. 4/12/- per sq. yd. as compen-
sation for the land measuring 28.75 acres in Amritsar
(Urban) and 32.04 acres in village Tungbala, Urban which was
sought to be acquired in February, 1947, and notification
under section 4( 1 ) of the Act in respect whereof was
published on February 22, 1947, (ii) the price paid by the
appellants in purchasing some of the plots in question in
October, 1946 and January, 1947 and (iii) the transactions
of sale of the land in the locality made in 1958-59- which
conclusively established that the market value of the land
in question was much higher than that awarded by the High
Court. On the other hand, it has been contended by counsel
for the State of Punjab and Collector, Amritsar that the
material on record did not warrant the enhancement by the
High Court of the compensation awarded to the erstwhile
properties by the Senior Subordinate Judge, Amritsar; that
the High Court could not justifiably ignore the fact that
for 25 kanals and 10 marlas of land which lay in close
proximity to the plots of land in question and .was acquired
by the State in May, 1956, the market’ value was assessed at
Rs. 25/- per maria i.e., Re. 1/- per sq. yd.; and that in
any event, the High Court acted illegally in awarding com-
pensation in excess of Rs. 4/- per sq. yd. claimed by the
respondents in the second set of six appeals Nos. 2694, 2695
and 2697 to 2700 of 1972.
Before dealing with the rival contentions advanced by
counsel for the parties, it will be appropriate to refer to
the law bearing on the matter. The measure of compensation
to be awarded to the owners of immovable property acquired
by the State is enshrined in section 23(1) of the Act which
is designed to award just and fair compensation for the
acquisition. According to this provision, compensation 13.
as to be awarded on the basis of the market value prevalent
on the date of the publication of the notification under
section 4(1) of the Act. The connotation of the expression
’market value’ has been explained time and again by this
Court. In Khaja Mizuddin v. State of Andhra Pradesh(1), it
was laid down as follows :--
"Under section 23(1) of the Act, in deter-
mining the amount of compensation. the court shall
take into consideration the market value of the
land at the date of publication of the notification
under section 4(1 ) thereof. Decided cases have
laid down that the said market rate must be deter-
mined
1) C.A. 176 of 1962 decided on April 10, 1963.
332
by reference to the price which a willing vendor
might reasonably expect to obtain from a willing
purchaser. For ascertaining the market rate the
court can rely upon such transactions which would
afford a guide to fix the price. Price paid for a
land acquired within a reasonable time from the
date of acquisition of the land in question would
certainly be the best piece of evidence. Price
paid for a land possessing advantages similar to
those of the land acquired in or about the time of
notification will also supply the data for assess-
ment of compensation."
Bearing in mind the above principles, let us
now deal with the contentions raised by counsel for
the erstwhile owners of the plots of land in ques-
tion. The contention of counsel for the appellants
that compensation should have been awarded treating
the entire land as potential building area is
devoid of substance. It is true that the land in
question constitutes one block but it cannot be
overlooked that the entire area thereof is not
similarly situate and does not possess the same or
similar advantages and benefits. The Senior Subor-
dinate Judge (who had the advantage of spot inspec-
tion.) as also the High Court have after careful
analysis of the evidence observed that it is only
the portion of the area which adjoins the Majitha
Road opposite to which is situate the Sacred Heart
Convent which lies close to Gopalnagar and a por-
tion of the land on the Circular Road opposite to
which there are buildings that can reasonably be
regarded as a potential building area and the
remaining area which extends far beyond the align-
ment of the Sacred Heart Convent and does not
possess the same advantages cannot be treated at
par with the former category of the land. It has
also been concurrently found by the Courts below
that apart from the fact that the land which falls
within the second category is situate in the rear
away from habitation, it suffers from two other
drawbacks in that it is not accessible from either
side of the two roads and there are no roads
therein. The erstwhile proprietors cannot, there-
fore, be justifiably granted compensation for the
agricultural land at the rate determined in respect
of the potential building area which possesses far
greater advantages. We are fortified in this view
by a decision of this Court in Mirza Nausherwan
Khan & Anr. v. The Collector (Land Acquisition)
Hyderabad(1) where Krishna lyer, J who spoke for
the Bench said :--
"It is true that the Court has adopted a
higher value for a strip 50 feet wide adjoining the
road, based on the principle of belting. There is
no doubt that when we deal with value of an exten-
sive plot of land in a city the strip that adjoins
an important road will have a higher value than
what is in the rear, for obvious reasons of poten-
tial user or commercial exploitation."
We cannot also accede to the contention of counsel for
the appellants in appeals Nos. 2402 and 2403 of 1972 that
they should have at least been granted compensation for the
potential buildings area at Rs. 4/12/- the rate fixed by the
Collector, Amritsar for 28.75 acres in Amritsar (Urban) and
32.04 acres in village Tungbala, Amritsar
(1) [19751 1 S.C.C. 238.
333
sought to be acquired by the State in February, 1947 as the
proceedings for acquisition of the said area were dropped
and the proximity in point of time to the notification under
section 4 (1 ) of the Act which is a material factor is
lacking.
The contention advanced on behalf of the appellants in
the aforesaid two appeals that the compensation awarded to
them could not be fixed below the price paid by them for
some of the plots in question in 1943, 1946 and 1947 has
also no force. It cannot be ignored that .Amritsar having
come near the border as a result of the partition of the
sub-continent, the prices of land situate therein fell
considerably soon after the partition and kept on maintain-
ing a low level for more than a decade.
The contention of counsel for the appellants .in the
aforesaid two appeals that they should have at least been
awarded compensation for the potential building area at the
rate prevalent in Gopalnagar in 195859 cannot also be acced-
ed to. A glance at the chart of the acquisitions which
appears at page 85 of the Paper Book shows that the sales
were of very small plots of land. In seven transactions out
of eight to which our attention has been invited, the land
acquired was below 200 sq. yds. and in the eighth transac-
tion, it was 250 sq. yds. It is also well settled that in
determining compensation the value fetched for small plots
of land cannot be applied to the lands covering a very large
extent and that the large area of land cannot possibly fetch
a price at the same rate at which small plots are sold.
(See Collector of Lakhimpur v. Bhuban Chandra Dutta(1).
All the three contentions advanced on behalf of the claim-
ants of compensation, therefore, fail.
Let us now deal with the second set of the aforesaid eight
appeals preferred by the State of Punjab. While doing so,
it would be well to recall that it is well established that
in an appeal from an award granting compensation, this Court
should not interfere unless there is a wrong application of
any well settled principle or unless there is something to
show not merely that on the balance of evidence it is possi-
ble to reach a different conclusion but that the judgment
cannot be supported by reason of a wrong application of a
principle or because some important point affecting valua-
tion has been overlooked or misapplied. Moreover, there is
a prudent condition to which the appellate power, generally
speaking, is subject. A court of appeal interferes not when
the judgment under attack is not right but only when it is
shown to be wrong. (See The Special Land Acquisition Offi-
cer, Bangalore v. T. Adinarayan Setty(2) Dattatrayaya
Shankarbhat Ambalgi & Ors. v. The Collector of Sholapur &
Anr.(3) and The Dollar Company, Madras v. Collector of
Madras(4).
The first contention advanced on behalf of the State
that the erstwhile owners of the land in question could not
be given compensation higher than that assessed for the
acquisition made by the State for the construction of Hy-
giene and Vaccine Institute is devoid of force.
(1) A.I.R. 1971 S.C. 2015 (2) [1959] Supp. 1 S.C.R.
404.
(3) [1971] 3 S.C.C. 43. (4) [1975] 2 S.C.C. 730.
334
Whereas the notification under section 4(1) of the Act with
regard to that acquisition was published on May 17, 1956,
the notification under the said provision or the Act in
respect of the instant acquisition was published on March
18, 1959 when the market value of the land in the locality
had risen very high. The ratio of compensation assessed for
the former acquisition cannot, therefore, serve as a safe
guide for determination of compensation for the acquisition
in question. Similarly, the consideration paid by Smt.
Balwant Kaur to Shri Girdbari Lal in March, 1957 for the
purchase of land cannot also serve as a safe guide as this
transaction also took place in March, 1957 i.e., nearly
two years before the publication of the aforesaid notifica-
tion in respect of the present acquisition. The High Court
was, in our opinion, perfectly justified on the basis of the
material before it in fixing compensation at Rs. 4.50 per
sq. yd. for the potential building area and Rs. 3.00 for the
agricultural area in respect of the plots of land involved
in appeals Nos. 2402 and 2403 of 1972. The High Court,
however, was wrong in overlooking an important point affect-
ing compensation payable to the erstwhile owners of the
potential building area involved in appeals Nos. 2694, 2695
and 2697 to 2700 of 1972. The said claimants having claimed
compensation only at the rate of Rs. 4.00 per sq. yd. in the
first appeals filed by them in the High Court, they could
not have been awarded compensation exceeding that rate.
Thus the said appeals filed by the State cannot but be
allowed to the extent to which the compensation awarded to
the claimants in respect of the potential building area
acquired exceeds Rs. 4.00 per sq. yd.
In the result, appeals Nos. 2394 to 2403 of 1972 and
2703 and 2704 of 1972 fail and are hereby dismissed with
costs (limited to one hearing fee) and appeals Nos. 2694,
2695 and 2697 to 2700 of 1972 are allowed with costs (limit-
ed to one hearing fee) to the extent indicated above.
P.B.R. Appeals partly
allowed.
335