Thakur Kuldeep Singh(D) Thr. Lr.

& Ors vs Union Of India & Ors on 8 March, 2010

Thakur Kuldeep Singh(D) Thr. Lr. & Ors vs Union Of India & Ors
on 8 March, 2010

Equivalent citations: AIR 2010 SUPREME COURT 1272, 2010 (3) SCC 794,
2010 AIR SCW 1738, (2010) 2 RECCIVR 372, (2010) 88 ALLINDCAS 65 (SC),
(2010) 110 REVDEC 115, (2010) 79 ALL LR 732, (2010) 2 GUJ LH 158, (2010) 3
ALLMR 451 (SC), (2010) 1 WLC(SC)CVL 499, (2010) 2 LANDLR 243, (2010) 4
CIVLJ 206, (2010) 3 ANDHLD 108, (2010) 2 ALL WC 1676, (2010) 2 KCCR 21,
(2010) 3 RAJ LW 2117, (2010) 1 CURCC 290, (2010) 2 ICC 12

Author: P. Sathasivam

Bench: H.L. Dattu, P. Sathasivam

REPORTABLE
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 8636 OF 2002

Thakur Kuldeep Singh (D)

Thr. L.R. & Ors. .... Appellant (s)

Versus

Union of India & Ors. .... Respondent(s)

WITH

CIVIL APPEAL NO. 8637 OF 2002

Union of India & Ors. .... Appellant(s)

Versus

Thakur Kuldeep Singh (D)

Thr. L.R. & Ors. .... Respondent(s)

JUDGMENT

P. Sathasivam, J.

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 Thakur Kuldeep Singh(D) Thr. Lr. & Ors vs Union Of India & Ors on 8 March, 2010

1) These appeals are directed against the impugned final judgment and order dated 18.09.2001 of
the Division Bench of the High Court of Delhi at New Delhi in R.F.A. No. 166 of 2000 whereby the
High Court allowed the appeal of the claimants enhancing the compensation payable to them for
acquiring their land @ Rs.3000/- per sq. yds. along with solatium @ 30% and interest @ 9% p.a. for
a period of one year from the date of taking possession by the Collector and thereafter @ 15% p.a. till
date of payment of compensation and held that the appellants are entitled to additional amount
under Section 23(1-A) of the Land Acquisition Act, 1894 (hereinafter referred to as "the Act") @ 12%
p.a. from the date of notification under Section 4 of the Act till the date of award or taking over
possession by the Collector.

2) Dissatisfied with the above compensation awarded by the High Court, the appellants-claimants
have preferred Civil Appeal No. 8636 of 2002 praying for Rs.6000/- per sq. yd. and the
respondents-Union of India filed Civil Appeal No. 8637 of 2002 against the enhancement of
compensation by the High Court from Rs.550/- per sq. yd. to Rs. 3000/- per sq. yd. For
convenience, we shall refer claimants-land owners as appellants and Union of India as respondents.

3) Brief facts in a nutshell are as under:

The appellants had purchased the property situated in Karol Bagh, subject matter of
the present acquisition containing an area of approximately 2475 sq. yds. from the
Ministry of Rehabilitation, Government of India in the year 1961 in a public auction
for a consideration of Rs.1,61,000/-. By notification dated 21.10.1981, Ministry of
Works and Housing (Land Division), Government of India, revised the schedule of
market rates of land in different areas of Delhi/New Delhi w.e.f. 01.04.1981 dividing
entire Delhi/New Delhi in VIII Groups. Ajmal Khan Road and Gaffar Market falls
within Group-III and the rate for residential plots was fixed @ Rs.2000/- per sq. mt.
whereas for commercial plots, it was fixed @ Rs.6000/- per sq. mt. The said
notification was issued with the concurrence of the Ministry of Finance. On
09.05.1983, a notification under Section 4 of the Act was issued by the Land &
Building Department expressing its intention to acquire an area of 4952 sq. yds. of
land situated in Karol Bagh for a public purpose, namely, for Joshi Memorial
Hospital. The appellants herein filed their objections claiming suitable residential or
commercial plot of not less than 500 sq. yds., not far away from the claimant's plot
and also claimed compensation of their acquired land @ Rs.6000/- per sq. yd. in
addition to a sum of Rs.1,53,293/- for superstructure standing on the acquired land.
The Land Acquisition Collector, Delhi vide Award No. 7/86-87 dated 30.05.1986,
determined the market value of the acquired land @ Rs.550/- per sq. yd.

and, in addition, awarded solatium @ 30% and an additional amount under Section 23(1-A) of the
Act @ 12% p.a. w.e.f. 09.05.1983. Dissatisfied with the said Award, the appellants-claimants filed a
reference under Section 18 of the Act before the Civil Court, Delhi. The Additional District Judge
vide order dated 19.11.1999, dismissed the same holding that the compensation awarded by the
Land Acquisition Collector is quite adequate. Aggrieved by the said order, the appellants-claimants
filed R.F.A. No. 166 of 2000 under Section 54 of the Act before the High Court. The Division Bench

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 Thakur Kuldeep Singh(D) Thr. Lr. & Ors vs Union Of India & Ors on 8 March, 2010

of the High Court by its impugned judgment allowed the same and enhanced the compensation @
Rs.3000/- per sq. yd. with all other statutory benefits.

4) According to the appellants, that their plot was surrounded in the north by a commercial
property, namely, Jain Publishing House, in the south by Plot No. 875 which was also acquired by
the impugned award for the same public purpose, namely, construction of Joshi Memorial Hospital,
on the remaining half there were commercial shops, in the east there was Joshi Road and in the west
of which was East Park Road and Ajmal Khan Road. In other words, according to the appellants, the
entire area surrounding the plot in question as on the date of Section 4 (1) notification was
commercial and that the plot had tremendous potential of being used for commercial purposes. It is
also pointed out that adjacent commercial areas are Model Basti, Ajmal Khan Road and Faiz Road.
They placed further materials to show that all amenities such as water, telephone, electricity and
roads were available to the acquired land much prior to the notification issued under Section 4 (1) of
the Act. We have already referred to the fact that the plot of the land was purchased by the
appellants from the Ministry of Rehabilitation, Government of India in the year 1961 for a
consideration of Rs.1,61,000/-.

5) The Land Acquisition Collector, while fixing compensation, considered three sale transactions.
The details as stated in the Award No. 7/1986-87 are as follows:-

Sl.No. Name of Year Total Area Total Price Average per Paid for the Sq. yds Property

1. 1980-1981 203 sq.yds Rs.1,02,000 Rs.502/-

2. 1981-1982 257 sq.yds Rs.1,70,000 Rs.664/-

3. 1982-1983 463 sq.yds Rs.1,94,375 Rs.419/-

Taking note of the average price paid for the property transactions for the last three years and the
area involved as well as other circumstances, the Land Acquisition Collector passed an award fixing
Rs.550/- per sq. yd as the market value for the land under acquisition. Though he fixed
compensation for other structures etc., in view of the fact that the appellants are concerned about
the market value of the plot, there is no need to consider those aspects.

6) Sections 23 and 24 of the Act speak about the matters to be considered and to be neglected in
determining compensation. Let us consider whether the appellants are entitled to higher
compensation than that of the one fixed by the High Court or Union of India is justified in seeking
reduction of the market value/compensation for the acquired land. While fixing compensation, it is
the duty of the Land Acquisition Collector as well as the Court to take into consideration the nature
of the land, its suitability, nature of the use to which the lands are sought to be acquired on the date
of notification, income derived or derivable from or any other special distinctive feature which the
land is possessed of, the sale transactions in respect of land covered by the same notification are all
relevant factors to be taken into consideration in determining the market value. It is equally to
consider the suitability of neighbourhood lands as are possessed of similar potentiality or any

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 Thakur Kuldeep Singh(D) Thr. Lr. & Ors vs Union Of India & Ors on 8 March, 2010

advantageous features or any special characteristics available. The Land Acquisition Collector as
well as the Court should always keep in their mind that the object of assessment is to arrive at a
reasonable and adequate market value of the land. While doing so, imagination should be eschewed
and mechanical assessment of evidence should be avoided. More attention should be on the bona
fide and genuine sale transactions as guiding star in evaluating the evidence. The relevant factor
would be that of the hypothetical willing vendor would offer for the land and what a willing
purchaser of normal human conduct would be willing to buy as a prudent man in normal market
conditions prevailing in the open market in the locality in which the acquired lands are situated as
on the date of notification under Section 4(1) of the Act. In other words, the Judge who sits in the
armchair of the willing buyer and seek an answer to the question whether in the given set of
circumstances as a prudent buyer he would offer the same market value which the court proposed to
fix for the acquired lands in the available market conditions. The market value so determined should
be just, adequate and reasonable.

7) Keeping the above principles in mind, let us consider the case of both the parties. The appellants
in order to sustain their claim examined one Labh Singh Chane, Under Secretary (Land), Ministry of
Urban Affairs and Employment, Nirman Bhawan, New Delhi as PW-1 and the Circular issued by the
Government of India, Ministry of Works and Housing (Land Division) New Delhi on 21.10.1981
which was marked as Ex. PW 1/1. Inasmuch as the appellants heavily relied on the above circular
before considering the evidence of the officer, it is useful to analyze the said circular:

"No.J-22011/8/80 LD (DOI) Government of India Ministry of Works & Housing

(Lands Division) ****** New Delhi, the 21st October, 1981 To

1. The Land & Development Officer, Nirman Bhawan, New Delhi. (5 copies)

2. The Vice-Chairman, Delhi Development Authority, Vikas Minar, New Delhi. (5

copies) Subject: Schedule of market rates of land in different areas of Delhi/New
Delhi.

***** Sir, The Government of India have had under consideration the question of
revision of the schedule of market rates of land in Delhi/New Delhi w.e.f. 1.4.1981.
The land rates have now been revised as shown in the schedule annexed to this letter
and shall be adopted for all purposes except for (i) hotels, (ii) cinemas and (iii) for the
purpose of recovery of unearned increase due to the lessor, while granting permission
for sale, in respect of residential leases measuring 100 sq. yds. (83.613 sq. metres) or
less only.

2 (a). The market rates for commercial purposes for Group I & II are based on an
FAR of 250, for Group III on FAR of 150 and for other Groups on existing FARs.

(b) Residential rates are based on the existing FAR prescribed for various areas.

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 Thakur Kuldeep Singh(D) Thr. Lr. & Ors vs Union Of India & Ors on 8 March, 2010

NOTES: These rates will be reduced or increased proportionate to the reduction or increase in the
FAR.

3. For multi-storeyed group housing by co-operative group housing societies 1= times the residential
rate and by others twice the residential rate will apply up to an FAR of 100. The rates will be
increased corresponding to the increase in FAR.

4. For the purpose of calculating and recovering lessor's share of unearned increase, while granting
sale permissions, in respect of the residential leases measuring 100 sq. yds. (83.613 sq. metres) or
less, the land rates laid down in this Ministry's letter No. J- 22011/1/75-L.II (i) dated 21st June 1979
will be applicable for a further period of two years from 1.4.1981. i.e. till 31.3.1983.

5. In so far as hotel and cinema sites are concerned, the case should be specifically considered in
consultation with the Ministry of Finance.

6. For any locality not covered by the schedule annexed hereto, the rates for comparable areas will
be applied.

7. These rates are effective from 1st April, 1981 to 31st March, 1983.

8. The review of these rates should be taken up by the Land and Development Officer well before the
date of expiry.

9. This issues with the concurrence of the Ministry of Finance.

10. It may be noted that the revised rates are for area expressed in square metres.

Yours faithfully, Sd/-

(R.Krishnaswamy) Under Secretary (Lands)"

Schedule of Market Rates S.No. Name of the locality Residential Commercial Group I
Xxx xxxx Group II Xxx xxxx Group III

1. Ajmal Khan Road 2,000 6,000

2. Gaffar Market 2,000 6,000

3. Khan Market 2,000 6,000 Xxx xxxx

14. Karol Bagh 2,000 6,000 Xxx xxxx Xxx xxxx Group IV Group V Xxx xxxx

6. Old and New Rohtak Road 1,200 2,400 Group VI Xxx xxxx Group VII Xxx xxxx
Group VIII Xxx xxxx"

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 Thakur Kuldeep Singh(D) Thr. Lr. & Ors vs Union Of India & Ors on 8 March, 2010

8) Before considering the acceptability or relevancy of the circular, let us examine the evidence of
PW-1 - Labh Singh Chane, Under Secretary (Land) Ministry of Urban Affairs and Employment. His
evidence in chief and cross- examination are relevant which reads as under:-

"Labh Singh Chane, Under Secretary (Land) Ministry of Urban Affairs and
Employment, Nirman Bhawan, New Delhi.

On S.A. I have seen Circulars dated 21.10.81 No. J- 22011/3/80-LD (DO1) copy of
which is Ex. PW-1/1. We arrive at this conclusion after consulting Income-tax
Department, L& DO, Delhi Admn. and DDA. Thereafter, we issue the circular. There
is a committee which considers this Data and the recommendations are considered
by the Government, Sanction of the Finance Ministry is taken and then we fix the
rates. Xxxx xxxxx by Shri Krishan Kumar, for Union of India:

I was not a party to the above said proceedings or the conclusion arrived at by L & DO
& and our department. I have no personal knowledge about this case. I have made
the above statement on the basis of documents. I am not a party to the
recommendations made by the Committee. The above said rates are primarily
intended for the recovery of misuse charges, recovery of unearned increase and
revision of ground rent in respect of Central Government properties. The Data is
obtained on the basis of values recording in the Registered Sale-Deeds and Auction
rates. I have no knowledge about the property in dispute. I cannot refer to any
Sale-Deeds mentioned above.

Xxxx by Shri S.C.Arora counsel for respondents No.2 & 3:

It is correct that I have never worked with Shri R.Krishnaswami, the then Under
Secretary (Lands). It is correct that I cannot identify the signatures of Shri R.
Krishnaswami, but I am deposing so on the basis of the record. The record produced
by me today in the court is maintained by the office.

It is wrong to suggest that I have deposed falsely.

RO & AC Sd/-

1.12.98 ADJ"

9) According to PW-1, the valuation was fixed after

consulting Income-tax Department, L & DO, Delhi Admn. and DDA. He has also
deposed that there is a Committee which considers the details and the

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 Thakur Kuldeep Singh(D) Thr. Lr. & Ors vs Union Of India & Ors on 8 March, 2010

recommendations are considered by the Government and after sanction of the

Ministry of Finance, the Ministry of Urban Affairs and Employment would fix the
rates. In the cross- examination, though he has admitted that he had no personal
knowledge, however, he has explained that the details/figures in the circular dated
21.10.1981, have been made on the basis of various information/documents. He has
also stated that the rates provided in the circular are primarily intended for the
recovery of misuse charges, recovery of unearned increase and revision of ground
rent in respect of Central Government properties. He has also informed that the data
was obtained on the basis of values shown in the registered sale deeds and auctioned
rates.

10) It is not in dispute that the circular referred to by PW-1 is for the purpose of
recovery of unearned increase while granting permission for sale in respect of
residential leases measuring 100 sq. yds or less. The rates mentioned therein are
effective from 01.04.1981 to 31.03.1983. In the schedule appended to the circular Sl.

No. 14 in Group III relates to Karol Bagh where the acquired lands are situated. It further shows that
if it is residential plots, the value is to be fixed @ Rs.2,000/- per sq. mt. and if it is commercial plots,
the rate notified is @ Rs.6,000/- per sq. mt. Sl. No.6 in Group V which relates to old and New
Rohtak Road and as per the circular, the residential value fixed is Rs.1,200/- per sq. mt. and
commercial value is Rs.2,400/- per sq. mt.

11) Mr. T.S. Doabia, learned senior counsel for the respondents submitted that fixing market value
on the basis of `circle rates' is not sustainable and in support of the same, he relied on the decisions
of this Court in Delhi Development Authority vs. Bali Ram Sharma & Ors. (2004) 6 SCC 533, Union
of India vs. Pramod Gupta(Dead) by L.Rs. & Ors., (2005) 12 SCC 1 and Ranvir Singh & Anr. Vs.
Union of India , (2005) 12 SCC

59.

12) In DDA's case (supra), this Court in view of the market value fixed in the case of Karan Singh &
Ors. vs. Union of India, (1997) 8 SCC 186 and taking note of the fact that acquisition of land under
the same notification without adverting `Government schedule of rates' fixed the market value as
determined in Karan Singh's case (supra). In Pramod Gupta's case (supra), this Court did not
approve the method of fixing market value based on certain notifications issued by the Union of
India in the year 1965 which were meant for the residential plots. In Ranvir Singh's case (supra), the
circle rates were not followed in determining the market value.

13) We accept that in view of the purpose for which the `circle rates' have been notified by the
Ministry of Urban Affairs and Employment, market value of a plot cannot be determined solely on
the basis of the circle rates. On the other hand, it cannot be ignored in toto. If other materials are
available, Government rates can also be considered as corroborative evidence. The nature of the
land plays an important role. Likewise, market conditions prevailing as on the date of notification
are also relevant. Sale price in respect of small piece of land cannot be the basis for determination of

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 Thakur Kuldeep Singh(D) Thr. Lr. & Ors vs Union Of India & Ors on 8 March, 2010

market value of large stretch of land.

14) It is also useful to refer the recent decision of this Court in Lal Chand vs. Union of India &
Another, JT 2009 (11) SC 490. A two-Judge Bench has held that the circle rates relate to urban/city
areas in Delhi and are wholly irrelevant when the court has to decide the market value in regard to
land situated in a village on the outskirts of Delhi. Based on this, learned counsel for the appellants
submitted that this Court has not completely ignored the rates notified by the Government though it
cannot be applied to the area other than urban/city.

15) It is clear from the above decisions and discussion that merely on the basis of `circle rate',
market value for acquired lands cannot be fixed but, at the same time, as observed earlier, the
locality and the prevailing circumstances are relevant for determining the real value of the land. We
have adverted to the assertion of the claimants about the proximity and various other attending
circumstances. It is seen from the evidence of PW-2, Power of Attorney holder of the appellants that
the acquired plot was located in the midst of commercial properties, had commercial potentiality
and for similar properties, the rates in the locality were not less than Rs.6,000/- per sq. mtr. He
tendered evidence and placed documents Ex.PW-2/1 to PW-2/11 which includes Eicher City Map.
PW-2 has also highlighted that the plot was located within the developed commercial hub of Karol
Bagh having all facilities. As rightly observed by the High Court, the Reference Court overlooked the
evidence on record that after the property was purchased by the appellants in 1961, considerable
development in and around the area had taken place. The acquired property was purchased by the
appellants in the year 1961 and it is not in dispute that the acquisition proceedings started in the
year 1983 i.e. after a period of 22 years from the date of 4 (1) notification (9/5/1983). The High
Court has also relied on Ram Lal Bansiwal vs. Union of India & Ors., R.F.A. No. 131/88, a decision of
fixing market value @ Rs.2320/- per sq. yard for commercial plots based on the circle rates. When
the appeal was carried to this Court, by decision dated 17.02.1997, this Court enhanced the amount
of compensation to Rs.3,000/- per sq. yd by observing that the land was located in a commercial
hub and was adjoining to a petrol pump. It is pointed out that the said decision relates to Chowkri
Mubarkabad being a locality adjacent to Karol Bagh situated by the side of main Rohtak Road. It is
also demonstrated that the same is in close proximity to Karol Bagh area and the plot in question
was located in the midst of Karol Bagh. Though in the award, the Land Acquisition Collector has
mentioned that the plot is 2 km. away from the commercial area in the Karol Bagh admittedly, the
very same Joshi Memorial Hospital was running on the land under acquisition since 1970-71 and the
hospital was paying rent to the pattedars/owners. This information has been mentioned in the
synopsis filed by the Union of India in their Civil Appeal No. 8637 of 2002.

16) We have also verified the Delhi Government Map survey of 1982. On going through the location
as found in the Government Map, the assertion of PW-1, an officer of the Government, PW-2, Power
of Attorney of the appellants, various activities in and around the plot and considering the fact that
the Land Acquisition Collector relied on the three property transactions relating to 1980- 81,
1981-82 and 1982-83 and not nearer to the date of notification under Section 4 (1) i.e. 09.05.1983
and also of the fact that even on the date of notification the very same hospital i.e. Joshi Memorial
Hospital was running on the land, we hold that even if we eschew `circle rate', the amount
determined by the High Court is just, reasonable and acceptable. For the same reasons and in the

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 Thakur Kuldeep Singh(D) Thr. Lr. & Ors vs Union Of India & Ors on 8 March, 2010

absence of additional material, we are not inclined to increase the market value as claimed by the
claimants-appellants.

17) In the light of the above discussion, the appeals filed by the claimants as well as the Union of
India are dismissed. No costs.

..........................................J. (P. SATHASIVAM) ..........................................J. (H.L. DATTU) NEW

DELHI;

MARCH 8, 2010.

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