1 The first clause of Section 23 of the Land Acquisition Act & Ors. v. Collector & Ors.

HELD: 1: 1 The first clause of Section 23 of the Land Acquisition Act, 1894 clearly provides that the amount of compensation awarded for the land acquired is required to be determined on the basis of market value of the lard at the time of publication of the Notification under Section 4 of the Act. Therefore, it is the duty of both, the Land Acquisition Officer as also of the court, to determine the actual compensation payable for the land acquired by referring C compensation near about the proximate date or on the date itself of the publication of the notification under section 4 of the Act. At times, irl order to prove the actual, fair and just compensation for the land acquired, sale deeds of the adjacent land or nearabout adjacent land are D produced to indicate the trend of the value of the land within the near vicinity of ,the acquired land. Such sale deeds are taken notice of generally when they are prior in point of time to the date of Notification, and any sale deed which is dated post Notification is generally ignored, unless evidence is led to show that there was no increase in price despite such acquisition. As a result of such acquisition, the market value of the adjacent land would generally, and in most cases, go up and, therefore, such post notification transaction may not be a sound F criterion to determine and assess the value of the E acquired land. (Paras 12 and 14] (8-F-H; 10-C]

1.2 In the instant case, the appellant has not adduced any evidence to show that the market value of adjacent land has not increased in the interregnum. Ex. A1 and Ex. A4 are sale deeds executed subsequent to the date of notification under Section 4(1) and for this reason, the· High Court held these to be irrelevant for the purpose of determin.ing compensation. The reference court and the High Court were justified in rejecting these sale deeds G H N. NATESAM PILLAI v. SPL. TAHSILDAR, LAND ACQUISITION, TIRUCHY 3 from consideration. Therefore, the said sale deeds must A not be considered while assessing and determining the just and fair compensation for the acquired land. Ex. A2 is also a sale deed but the same also is not a safe guide as the price for the land covered therein was later on increased to make- it in parity with the government B prescribed rate. [Para 14] .[10-C-E] Administrator General of W.B. v. Collector, Varanasi (1988) 2 sec 150, referred to.

2.1. The small area of land measuring 1710 sq. ft. was C sold for Rs. 20,000/- as per Ex. A3 dated 15.7.92 which works out to a value of Rs. 11/- per sq. ft. A comparison of the two plots, namely, land in Ex. A3 and the acquired land shows that they are not identical. While the land in Ex. A3 may not be an excellent guide it is still a better D guide than any other document exhibited on record. The same could be used as a relevant yardstick to assess the just and reasonable compensation in the instant case. [Para 18] [12-B-C]

2.2 It is found from the counter affidavit filed by the E respondent-State that the land covered by Ex. A3 is located out of the Municipal Corporation limit, whereas the acquired land is located within the Municipal Corporation limit.· Consequently, it cannot be disputed that the acquired land, being in the heart of the city and F having excellent prospects of being used as residential site, definitely has an edge regarding the potential value over the land covered by Ex. A3. This building potentiality of acquired land must also be taken into consideration while determining compensation. [Paras 19 and 20] [12- G C·E]

2.3 The potentiality of the acquired land, in so far as it relates to the use to which it is reasonably capable of being put in the immediate or near .future, must be given H 4 SUPREME COURT REPORTS [2010] 10 S.C.R. A due consideration. In the instant case, the acquired land has all the potentiality to be used as building sites, even in the immediate future, as it is located at a place in and around which building activity has already started. The evidence on record also clearly indicated that the B acquired land is abutting the main rQad. The acquired land is also surrounded by schools, Panchayat union office, shops and residential buildings in all three sides. The High Court also found, as a matter of fact, that the area where the acquired land is situated is fit for construction c of houses. On an overall consideration and appreciation of the records, the deduction due to the small size of the exemplar land can easily be set off with the corresponding increase in price of the acquired land when compared with the land in Ex. A3 from the point of view of potential value. [Para 22] [14-E-H] 0

2.4 Although it is true that the land covered by Ex. A3 is a small tract of land and, therefore, cannot be compared in size with the large area of land acquired under the present notification, it is to be concluded that the land in question would definitely fetch a higher price than what is fixed by the High Court. A prospective purchaser would only be too willing to pay for the acquired land having immediate potentiality of being used as a residential site in a prime locale at almost the same, if not higher, price than the land covered by Ex. A3 which is located outside the Municipality area. [Para 23] [15-A B] E F

2.5 The conclusion of the High Court that the G acquisition of a large tract of land merits a discount in compensation is accepted. However, the compensation granted by the High Court did not match the potentiality of the land, even after the discount was taken into consideration. Even on giving a discount in respect of the acquired land being a large tract as compared to the small H portion of land sold under Ex. A3, the rate of Rs. 11/- N. NATESAM PILLAI v. SPL. TAHSILDAR, LAND ACQUISITION, TIRUCHY 5 would be adequate and just compensation for the same. A By scaling down the rate of compensation to Rs. 91- from Rs. 111- per sq. ft., the High Court denied just and reasonable compensation to the appellant, thereby resulting in a miscarriage of justice. Therefore, the appellant would be entitled to compensation at Rs. 111- B per sq. ft. for the acquired land which is considered to be just and fair. The State would be liable to pay additional compensation and solatium on the amount enhanced and fixed in terms of this order including payment of interest in terms of the rate of interest awarded by the reference c court. [Paras 24, 25 and 26] [15-C-G]