CHANDRASHEKAR (D) BY LRS & Ors. v. LAND ACQUISITION OFFICER & Anr.

1.2. It is essential to earmark appropriate deductions, out of the market value of an exemplar land, for each of the two components. This would be the first step towards balancing the differential •factors. This would pave the way for determining the market value of the undeveloped F acquired land on the basis of market value of the developed exemplar land. For the "first component" under the head of development, deduction of 33-1/3 percent can be made. Likewise, for the "second component" under the head of "development" a further G deduction of 33-1/3 percent can additionally be made. The facts and circumstances of each case would determine the actual component of deduction, for each of the two components. Yet under the head of "development", the applied deduction should not exceed H 418 SUPREME COURT REPORTS [2011] 15 (ADDL) S.C.R. A 67 percent. That should be treated as the upper benchmark. This would mean, that even if deducticn under one or the other of the two components exceeds 331/3 percent, the two components under the head of development put together, should not exceed the upper B benchmark. [Para 17, 18] (437-D-E; 438-C-F]

1.3. In Lal Chand's case and in Andhra Pradesh Housing Board's case this Court expressed the upper limit of permissible deductions as 75 percent. Deductions C upto 67 percent can be made under the head of "development". Further deductions would obviously pertain to considerations other than the head of "development". A deduction could be made keeping in mind the waiting period required to raise infrastructure, as also, the waiting period for sate of developed plots and D or built-up areas. This nature of deduction may be placed under the head "waiting period". Deductions could also be made in cases where the exemplar sale transaction, is of a date subsequent to the publication of the preliminary notification. This nature of deduction may be E placed under the head "de-escalation". Likewise, deductions may be made for a variety of other causes which may arise in different cases. All deductions should not cumulatively exceed the upper benchmark of 75 percent. A deduction beyond 75 percent would give the impression of being lopsided, or contextually unreal, since the land loser would seemingly get paid for only 25 percent of his land. This impression is unjustified, because deductions are made out of the market value of developed land, whereas, the .acquired land is G undeveloped (or not fully developed). Differences between the nature of the exemplar land and the acquired land, it should be remembered, is the reason/cause for . applying deductions. Market value based on an exemplar sale, from which a deduction in excess of 75 percent has H to be made, would not be a relevant sale transac~~n to F CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 419 OFFICER land). Even be taken into consideration, for determining the A compensation of the acquired land. In such a situation, the exemplar land and the acquired land would be uncomparable, and therefore, there would be no question of applying the market value of one (exemplar sale) to determine the compensation payable for the other B (acquired though on account of developmental activities (under the head "development"), the upper benchmark of 67 percent is specified, it would seem, that for the remaining deduction(s), the permissible range would be upto 8 percent. That however, is not the c correct position. The range of deductions, other than under the head "development", would depend on the facts and circumstances of each case. Such deductions, may even exceed 8 percent, but that would be so only, where deductions for developmental activities (under the head "development") is less than 67 percent, i.e., as long as the cumulative deductions do not cross the upper benchmark of 75 percent. Therefore, the range for deductions, for issues other than developmental costs, would depend on the facts and circumstances of each case, they may be 8 percent, or even the double thereof, E or even further more, as long as, cumulatively all deductions put together do not exceed the upper benchmark of 75 percent. (Para 19] [438-G-H; 439-A-H; 440-A-B] 0 F

1.4. Before applying deductions for ascertaining the market value of the undeveloped acquired land, it would be necessary to classify the nature of the exemplar land, as also, the acquired land. This would constitute the second step in the process of determination of the correct G quantum of deductions. The lands under reference may be totally undeveloped, partially developed, substantially developed or fully developed. In arriving at an appropriate classification of the nature of the lands which are to be compared, reference may be made to the H 420 SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R. A developmental activities referred in connection with the "first component'', as also, the "second component". The presence (or absence) of one or more of the components of development, would lead to an appropriate classification of the exemplar land, and the acquired land. B Comparison of the classifications thus arrived, would depict the difference in terms of development, between the exemplar land and the acquired land. This exercise would lead to the final step. In the final step, the absence and presence of developmental components, based on c such comparison, would constitute the basis for arriving at an appropriate percentage of deduction, necessary to balance the differential factors between the exemplar land and the acquired land. [Para 20] [440-C-G] J

1.5. The material sought by the appellant from the Commissioner, Gulbarga Development Authority was irrelevant for the determination of the percentage of deduction to be applied. It is the overall developmental cost, incurred (or incurable) on the entire acquired land which has to be apportioned amongst the landholders In a given case, the developmental cost on a small piece of land, may be far in excess of the cost of the land. That would however not mean, that the landowner in question, would not be entitled to compensation. Again, if no specific developmental activity is carried out on a F particular piece of land, it would be improper to conclude, that no deduction should be made while determining the compensation payable to such landowner, even though the acquired land was undeveloped. What the appellant ought to have ascertained, is the developmental cost on G the entire acquired land. In such a situation, if the entire developmental activity had been completed, it would be permissible to proportionately apportion the same amongst land holders. Such a situation may not arise in actuality. In most cases development is a continuous and H ongoing process, which would be completed over a long CHANDRASHEKAR (D) BY LRS. v. LAND ACQUISITION 421 OFFICER stretch of time extending in some cases to a decade or A even more. Therefore, it cannot be said that no deduction should be made in the instant case under the head of "development" because no expense is shown to have been incurred for development of the land acquired from the appellants. [Para 22] (441-G-H; 442-A-F] B

1.6. In the absence of inputs as were sought by the appellants the Commissioner, Gulbarga Development Authority, the deductions can only be based on reasonable and logical norms. Comparison of C the state of development of the exemplar land, as also, that of the acquired land can be the only legitimate basis, for a reasonable and logical determination on the issue. Based on the said foundation, an assessment has to be made by applying the parameters delineated. It is proceeded on the assumption that the exemplar sale D deed was a fully developed site. In such a situation, keeping in mind the parameters laid down by this Court, and the conclusions drawn as also the facts of the instant case, a deduction of upto 67 percent may have been justified, and the same would fall within the parameters laid down by this Court because the exemplar land could be classified as fully developed, whereas, the acquired land was totally undeveloped land. As against the said, the High Court limited deductions under the head of development to 55 percent. There is no justifiable reason to interfere with the same, specially in an appeal preferred by the land loser, more so, because no justifiable basis for the same was brought to the notice. [Para 23] (442-F-H; 443-A-D] E F

1.7. The High Court while determining the compensation payable to the appellants on the basis of the sale deed dated 30.12.1983 applied a further deduction ·of 10 percent under the head of "de-escalation". Even though escalation of market price of land is a question G H 422 SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R. A of fact, which should ordinarily to be proved through cogent evidence. Yet, keeping in mind ground realities, and taking judicial notice thereof, the land prices are on the rise throughout the country. The outskirts of Gulbarga town are certainly not an exception to the rule. The B exemplar sale deed dated 30.12.1983 was executed exactly 1 year 7 months and 17 days after the publication of the preliminary notification on 13.5.1982 no fault can be found with the determination rendered by the High Court in making a deduction of 10 percent under the c head of "de-escalation", specially when the period in question exceeded one year (as for annual deductions), by 7 months and 17 days. Thus, no fault can be found with the determination rendered by the High Court in making a deduction of 10 percent under the head of de- D escalation. [Paras 24 and 25) [443-E-H; 444-A-F]