MANU/SC/0241/1984

Equivalent Citation: AIR1984SC 892, 1984(86)BOMLR655, 1984(1)SC ALE304, (1984)2SC C 324, [1984]2SC R900, 1984(16)UJ429

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 2458-2461 and 2462 of 1981
Decided On: 15.02.1984
Appellants: Kausalya Devi Bogra and Ors.
Vs.
Respondent: Land Acquisition Officer, Aurangabad and Ors.
Hon'ble Judges/Coram:
A. Vardarajan, Ranganath Misra and S. Murtaza Fazal Ali, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Shanti Bhushan, C.S. Vaidyanath, P. Chowdhary, M.
Mudgal, Gurdip Kaur and Prashant Bhushan, Advs
For Respondents/Defendant: O.P. Rana and M.N. Shroff, Advs.
JUDGMENT
Ranganath Misra, J.
1 . All these appeals are by special leave and seek to challenge two separate
judgments of the Bombay High Court. A large tract of land located within the
municipal limits of Aurangabad within the State of Maharashtra was notified for
acquisition under Section 3(1) of the Land Acquisition Act prevailing in the State of
Hyderabad (corresponding to Section 4 of the Land Acquisition Act, Act I of 1894), by
notification dated November 28, 1957, for the purpose of locating a Medical College
and an attached hospital. These lands can be conveniently referred to as Navkhanda
and Ahmadibag properties. Four of these appeals are by one group being Kausalya
Devi Bogra and others and the other is by Syed Yusufuddin Syed Ziauddin. Since
their lands were acquired under a common notification and as would be indicated
later, the appeals were disposed of by the High Court by applying a common basis
and these appeals at the request of the counsel have been heard together, they are
being disposed of by a common judgment. The total acquisition was of about 150
acres of land. Out of it, the first group owned about 74 acres while the claim of
Yusufuddin related to about 15 acres of land.
2 . In so far as the lands of Kausalya Devi's group are concerned, the Land
Acquisition Officer determined compensation at 4 paise per square yard for the
Navkhanda land in the two blocks besides statutory solatium of 15%. At the instance
of the claimants reference was made to the Civil Judge who raised the compensation
to 15 paise per square yard as against the claim laid at the rate of Rs. 2.50 per
square yard. So far as Ahmadibag lands are concerned, the Land Acquisition Officer
awarded compensation at the rate of 3 paise per square yard and on a reference to
the Court, the learned Civil Judge raised the compensation to 12 paise per square
yard besides the statutory solatium of 15% while the claimants had asked for
compensation at the rate of Rs. 1.50 per square yard. In both the cases the claimants
as also the State preferred appeals-the State challenging the enhancement and the
claimants asking for more. A Division Bench of the Bombay High Court by judgment
dated April 27, 1971, divided the Ahmadibag lands into three zones for the purpose
of fixation of compensation; the first portion was on the east, the portion which

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 abutted the road near the main gate up to an indicated depth was treated as the
second block and the patch of land which was to the north of the second portion was
treated as the third block. The High Court fixed compensation at 12 paise per square
yard for the middle portion and at 9 paise per square yard for the rest of the land. So
far as Navkhanda lands were concerned, the same was also divided into three zones
and depending upon the location of these three blocks, compensation was fixed at 16
paise per square yard of the land in the zone abutting the road; 10 paise per square
yard for the second zone and at 8 paise per square yard for the remaining lands
forming the third zone. Being dissatisfied with the results obtained in the first
appeals before the High Court, the claimants came before this Court by certificate
under Article 133 of the Constitution on the basis of valuation involved. Attempt was
made to introduce additional evidence which mainly consisted of material to show
that higher compensation had been given for similarly situated properties. By
Judgment dated March 23, 1979, in Civil Appeal Nos. 1035 & 1038 of 1972, this
Court directed :
We, therefore, allow the appeals, set aside the judgment of the High Court
and send the cases back to the High Court to be restored and direct the High
Court to take the appeals on its file and dispose them of according to law in
the light of the directions given above.
3. One of the consideration for remand was reference to two judgments of the Civil
Judge where, in respect of lands covered by the same Notification, compensation had
been worked out at Rs. 4.50 per square yard. One of these judgments was the case
of Yusufuddin. As the judgment of this Court would show, it had been represented by
the claimants before this Court that the decision of the Civil Judge in Yusufuddin's
case had not been challenged in appeal and had become final. That was, however,
not a fact and First Appeal No. 628/72 had been taken to the High Court by the State.
4 . In Yusufuddin's case, as already indicated, the property acquired was around 15
acres. These lands were covered by two sector; 10 acres and 16 gunthas appertained
to Sej Nos. 3, 4 and 5 while 5 acres 32 gunthas related to Sej No. 167, and all these
lands were situated close to the road leading from Aurangabad City to Panchakki. The
Land Acquisition Officer had given an award of Rs. 5454.71 inclusive of solatium of
15% for the first sector and a sum of Rs. 4614.11 inclusive of the solatium in respect
of 5 acres 32 gunthas in Sej 167. The appellant was aggrieved by the Award and laid
claim of Rs. 40,360 in respect of first block and Rs. 2,26,512 in respect of the other.
On the basis of the evidence placed on record, the learned Civil Judge came to hold
that market value of the property on the date of the preliminary notification was Rs.
4.50 per square yard but as the claimants had claimed a lesser amount, he confined
the compensation to the amount claimed and fixed the compensation accordingly.
The decision of the Civil Judge was challenged in appeal as already indicated. The
High Court re-assessed the evidence and came to hold that no acceptable material
was on record to justify any enhancement of compensation and the Award of the
Land Acquisition Officer should be sustained. Accordingly, the decision of the Civil
Judge was vacated and if out of the enhanced compensation any amount had been
paid, refund thereof was directed.
5 . This first appeal of the State against Yusufuddin was disposed of by a Division
Bench consisting of Deshmukh, C.J. and Deshpande, J. on October 15, 1979. Before
the same Division Bench the other batch of first appeals remanded pursuant to the
direction of this Court came up for hearing on the next day, viz., October 16, 1976.
The High Court referred to these first appeals as once upon disposed of by a Division
Bench of the Court and stated :

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 Being dissatisfied with this common judgment disposing of the four appeals,
the claimants carried the matter to the Supreme Court on leave from this
Court. According to the provisions of the law then existing, the leave granted
was as a matter of course as the claim involved in each of the appeals was
much more than Rs. 20,000 at all stages of the litigation. After obtaining a
certificate of fitness for leave to appeal to the Supreme Court on 17th
December 1971 from this Court, the petition of appeal was filed in the
Supreme Court on 15th February 1972. Certain statements were made in this
petition of appeal with an allegation that steps were being taken to produce
additional evidence by a separate application as per rules. Accordingly, a
separate application for production of additional evidence was made on 27th
February 1972. Presumably a copy of the appeal memo, as also a copy of
this application was served upon the State Government of Maharashtra, who
were the respondents, and we further presume that those copies were made
available to the learned Counsel who were engaged by the State to defend
the said appeals. We are told that before the matter comes up for hearing,
there is an intervening stage when a statement of case is required to be filed
before the final hearing. The learned Counsel is not aware whether in these
appeals any such statement of case was filed by the parties. After a lapse of
about seven years these appeals were called out for hearing before the
Supreme Court on 23rd March, 1979. By a speaking order, the Supreme
Court set aside the Judgment of this Court and remanded the original four
appeals for being further heard and disposed of on merits. It is only in this
manner that we are hearing today the said four appeals over again.
For reasons which we will detail hereafter, we have not heard the parties on
merits at all. It is true that the Supreme Court has set aside the judgment of
this Court and remanded the appeals for further hearing and disposal
according to law. That is what precisely we are doing but for reasons which
we will record hereunder why we have not heard the parties on merits.
On considering in detail the long and able judgment delivered by the two
judges of this Court and after reading the Supreme Court order and noting
the factual position, there is not much force in hearing the appeal afresh and
further there is no necessity for the application of mind by another two
judges of this Court to the same evidence which is on record. The factual
position that has come to our notice reveals a state of affairs which cannot
be described as very commendable so far as the handling of the Government
litigation is concerned....What surprises us is that when copies of original
appeal, petition as well as civil application for additional evidence are served
upon the Government no attempt is made to file a reply that these judgments
need not be admitted as additional evidence as the High Court is already
seized of the judgments in appeals which are admitted and they have not
become final as alleged by the appellants in their memo of appeal to the
Supreme Court. Even after seven years when the matter was called out for
final hearing before the Supreme Court, we are surprised to find from the
Supreme Court's order that the Government representative before the
Supreme Court was on the defensive all the while and merely wanted to state
that he should be heard further in the matter of additional evidence. We do
not know whether any attempt was made to seek instructions from the State
Government or in spite of query being made the information was wanting
from this end. Whatever the reason may be for the Government's failure to
provide instructions to the counsel appearing for the State in the Supreme
Court or whatever may be the reason for the failure of the Government
counsel in Delhi to seek information either of them is not a very

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 commendable state of affairs. The Supreme Court should have been told at
once that those judgments were subjected to appeals and the appeals are
pending and almost ready for hearing. We are sure the Supreme Court would
have adjourned the hearing until the decision by the High Court in First
Appeal Nos. 628 of 1972 and 179 and 180 of 1972. That undoubtedly would
have been the proper course for the Government to adopt and we have no
doubt that the Supreme Court would have valued that suggestion.
6. Then followed a long paragraph censuring the conduct of counsel for the claimants
which closed with the following observation:
The Supreme Court took cognizance of all this and thinking that that Court
cannot go into such questions in detail as it may involve taking of evidence,
the Supreme Court passed the order and that is how this group of appeals
has come back to us for further hearing.
7. A set of first appeals one of which related to Yusufuddin's matter being of the year
1972 first came up for hearing before the High Court. In course of hearing thereof,
when the judgment of the Division Bench of 1971 in the case of Kausalya Devi's
group was produced, it was pointed out that this Court had already vacated the
judgment of the Division Bench and the matter had been remanded. The Division
Bench hearing the appeals after remand, therefore, directed as stated in its order :
We, therefore, said that the office may find out as to which are the group of
appeals which were remanded and issue notice fixing 8th October, 1979 as
the date of hearing along with those group of appeals. That is how they came
to be shown on our Board from that day onwards continuously until they
reached the final hearing.
However, the very next day after 18th September 1979, Mr. Savant came to
tell us that he would not be in a position to apply for additional evidence, as
the very judgments of the Civil Judge in respect of which certain
representations were made before the Supreme Court are those which are the
subject-matters of First Appeals Nos. 179 and 180 of 1972 as also first
appeal No. 628 of 1972. Since we had already adjourned the matter, we
decided to hear these appeals first and take up these remanded appeals.
The Division Bench continued to State :
The first factual position which we note here is that neither the appellant has
pressed for additional evidence nor the State could lend additional evidence,
though the wording of the Supreme Court order says that both the parties
will be at liberty to apply for additional evidence. None of the parties has any
additional evidence to offer. In fact, in our humble view, remand seems to be
a direct result of a rash statement, not being denied even at final hearing
stage. If this is the position in so far as the appeal in the matter was
concerned where two other judges of this Court who were seized of the
matter had given full hearing to the parties at an earlier stage we told Mr.
Andhyarujina, Advocate, that there was no necessity for any further hearing
in the matter and that we are not inclined to do so. Since there is no change
in the record and no additional evidence is offered and the High Court
judgment was pronounced on the evidence already recorded, we see no
reason to differ in any way with the well considered earlier judgment of this
Court. We, therefore, declare that a copy of that judgment, which will be our
substantive judgment, be placed on record as the judgment of this Court
after remand by the Supreme Court. We thus not only confirm the valuation

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 and compensation awarded by the earlier Bench of this Court but also
confirm their order as to costs.
8. Having read the judgment of the High Court and considering the manner in which
the first appeals have been disposed of, we have no doubts in our mind that the High
Court exceeded its jurisdiction in dealing with the first appeals. This Court in exercise
of appellate powers vested it under Article 136 of the Constitution had set aside the
Bench decision of the High Court delivered in 1971 and that judgment for all intents
and purposes had become non-existent. The present Division Bench of the High Court
was not entitled, by any process known to law, to resurrect that judgment into life.
9. The direction of the appellate court is certainly binding on the courts subordinate
thereto. That apart, in view of the provisions of Article 141 of the Constitution, all
courts in India are bound to follow the decisions of this Court. Judicial discipline
requires and decorum known to law warrants that appellate directions should be
taken as binding and followed. It is appropriate to usefully recall certain observations
of the House of Lords in Broom v. Cassell & Co. [1972] 1 All E.R. 801 Therein Lord
Hailsham, L.C. observed :
The fact is, and I hope it will never be necessary to say so again, that in the
hierarchical system of courts which exist in this country, it is necessary for
each lower tier, including the Court of Appeal, to accept loyally the decisions
of the higher tier.
Lord Reid added :
It seems to me obvious that the Court of Appeal failed to understand Lord
Delvin's speech but whether they did or not, I would have accepted them to
know that they had no power to give any such direction and to realise the
impossible position in which they were seeking to put those judges in
advising or directing them to disregard a decision of this House.
Lord Diplock observed at p. 874 of the Reports :
It is inevitable in a hierarchical system of courts that there are decisions of
the Supreme appellate tribunal which do not attract the unanimous approval
of all members of the judiciary. When I sat in the Court of Appeal, I
sometimes thought the House of Lords was wrong in over ruling me. Even
since that time there have been occasions, of which the instant appeal is one,
when alone or in company. I have dissented from a decision of the majority
of this House. But the judicial system only works if someone is allowed to
have the last word and if that last word, once spoken, is loyally accepted.
10. We refuse to accept the submission of Mr. Shanti Bhushan for the appellants that
the High Court intended to disobey the direction given in the appellate order of
remand. Nevertheless, the Division Bench of the High Court allowed itself to be
swayed away and landed up in a situation which was wholly unwarranted. Some of
the observations which we have extracted were uncalled for and greater restraint was
expected. It was open to the High Court to require the parties to move this Court for
modification of the direction. If necessary, a reference could have been made to the
Registry of this Court so that this Court could have even taken suo motu action.
Finally, if additional evidence was not forth coming, the Division Bench could have
applied its mind afresh to the materials already on record and the appeals should
have been disposed of by an independent judgment and not by restoring to life
judgment which had, in exercise of appellate powers of this Court, been rendered
lifeless. We hope and believe that such an unfortunate situation will never recur and,

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 therefore, we propose to say no more on this aspect of the matter.
11. As already indicated, the order of remand has not been operative on account of
the High not giving effect to it. On the other hand, a judgment which had already
been set aside has been brought on record and has been described as the judgment
in the first appeals. In our opinion, that judgment is a nullity. The two options
available before the Court, therefore, are, a further remand to the High Court asking
for a fresh disposal of the appeals or to dispose of the appeals in exercise of
appellate powers by recording findings. Acquisition in this case is of the year 1957.
Twenty-seven years have already passed. A remand at this stage would indeed be not
in the interest of the parties nor in public interest. We have, therefore, decided to
look into the materials ourselves and dispose of these appeals finally.
12. Aurangabad was in a developed part of the Nizam's State of Hyderabad and was
a constituted municipality. Hyderabad had become a part of India by 1948. By the
State Re-organisation Act of 1956, Aurangabad and certain other tracts of Hyderabad
became parts of the then State of Bombay. Aurangabad was of historical importance.
Not far away from it are the famous caves of Ajanta and Ellora. Aurangabad,
therefore, had been of tourist importance from before. A fort and a palace of
historical importance are in the vicinity of this town. There is evidence that the lands
acquired in the instant appeals are located close to these spots. There is also
evidence that these areas were developed and semi-developed portions of the town.
13. The learned Civil Judge did take into account certain documents for fixing up the
valuation of the property on the date of the notification. In Yusufuddin's case a sale
deed of October 18, 1957, was relied upon where the valuation was about Rs. 4.50
per square yard. This sale deed was of the year of the notification though the
transaction happened to be a few months after the date. The learned Civil Judge had
found that the property was located not away from the acquired land. Exhibit 36 was
also the certified copy of a sale deed of 1957 but since it had a construction on the
property and the separate valuation thereof could not be known in the absence of any
substantive, no reliance had actually been placed on this transaction. Exhibit 37 was
a transaction of 1953 and the rate adopted there was about Rs. 5 per square yard. A
party to the transaction was examined as a witness. As noticed by the learned Civil
Judge, the property was located at a distance of about there furlongs from the
acquired land. The learned Civil Judge stationed at Aurangabad was certainly in a
better position to take judicial notice of the location of important landmarks within
Aurangabad than the learned Judges of the Bombay High Court or even the Judges of
this Court sitting at a long distance from the place where the lands are situated.
Exhibit 42 is a sale deed of 1960 and keeping in view the extent of lands sold and the
consideration per square yard, the rate worked out at Rs. 2.25. The purchaser had
been examined as a witness and the land has been found to be about half a furlong
away from the acquired land. The learned Civil Judge also relied upon a letter of the
Collector of Aurangabad addressed to the Deputy Director of Excise Department
wherein it was indicated that the price of land in the area was about Rs. 5 per square
yard and that was stated with reference to some land near the Railway Station. The
acquired land is admittedly not far away from the Railway Station.
14. The learned Civil Judge did in fact state in his order that the lands of Yusufuddin
were situated by the side of the road leading from Panchakki to Bhadkal gate. The
historical monument of Panchakki has been stated to be located by the side of the
acquired land. A State Hotel has come up not far away from the land. The Court took
judicial notice of the fact that Aurangabad city had developed rapidly following police
action which brought about accession of the Nizam's State to India. Aurangabad had
become the regional headquarters of a zone of the State. The city had been

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 industrially developing. Therefore, the lands in question had potential value which
had to be kept in view in the matter of fixing the compensation under the Land
Acquisition Act.
15. Admittedly, the lands of Yusufuddin and the lands belonging to Kausalya Devi
group are in one adjacent tract. Therefore, it would not be improper to assume,
particularly in the absence of any contrary evidence from the side of the State that
there was no great disparity in the quality of lands and that all these lands were
substantially of similar type.
16. Two principles relating to the matter of fixation of compensation relevant for the
present purpose may be kept in view. When large tracts are acquired, the transaction
in respect of small properties do not offer a proper guideline. Therefore, the
valuation in transactions in regard to smaller property is not taken as a real basis for
determining the compensation for larger tracts of property (see Prithvi Raj Taneja v.
State of Madhya Pradesh and Ors. MANU/SC/0281/1977: [1972] 2 S.C.R. 633 ;
Padma Uppal etc. v. State of Punjab and Ors. MANU/SC/0371/1976 : [1977]1SCR329
. In certain other cases this Court indicated that for determining the market value of a
large property on the basis of a sale transaction for smaller property a deduction
should be given. In Special Land Acquisition Officer, Bangalore v. T. Adinarayan
Setty MANU/SC/0114/1958 : [1959] Suppl. 1 S.C.R. 404 a reduction of 25% was
indicated while there are certain other cases where the view is that the reduction
should be to the extent of 1/3. Again, in the very scheme for fixation of
compensation provided by the Land Acquisition Act there is bound to be some
amount of arbitrariness. The acquisition is deemed to be a statutory purchase and on
the basis of evidence the law requires an assumed consideration to be determined.
Keeping in view the fact that acquisition is of compulsory nature, a solatium of 15 %
on the valuation is provided. Bearing these considerations in view and taking into
account the fact that the lands in question were located in a developed part of
Aurangabad and had considerable potential value, we proceed to fix the market value
of the property. One acre of land is equal to 4840 square yadrs. The learned Civil
Judge had maintained a distraction between the two classes of lands. We take note of
that fact also in the matter of determining the compensation. We, however, do not
propose to indicate separate valuations for the two classes of lands. Taking an overall
picture of the matter, we direct compensation to be fixed at the rate of Rs. 1.50 per
square yard or Rs. 7260 per acre for all the lands of the present appellants acquired
by the notification in question. Over and above this amount, the appellants shall be
entitled to statutory solatium of 15% as also interest at the rate of 6% per annum on
the additional compensation from the date of dispossession till payment thereof. We
direct the Collector to work out the compensation on the basis indicated above within
two months from today. If the amount so determined is not paid within three months
thereafter, the interest on the additional compensation shall be at the rate of 12% per
annum till payment is made.
17. Ordinarily, the appellants should have been entitled to costs. Keeping in view the
history of the litigation and manner in which the Kausalya Devi group of appellants
had conducted themselves on the earlier occasion before this Court, we do not award
costs to them. In Civil Appeal No. 2462/81 appellant Syed Yusufuddin Syed Ziauddin
will be entitled to his costs in this Court and hearing fee of Rs. 1,000.

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