THE HONOURABLE Mrs v. Askar Batcha

Prayer: Petitions filed under Or.41, Rule 27 CPC praying to receivethe documents filed along with the Petitions.For Appellants 1 & 2 : Mr.V.Raviboth the appeals Special G.P. [AS]For 3rd Appellant in : Mr.M.Ravindran,both the appeals Addl. Solicitor General assisted by M/s.P.Wilson Associates For Respondents/ : Mr.S.SilambananClaimants Senior Counsel Mr.R.BharanidaranCOMMON JUDGMENTR.BANUMATHI,JFeeling aggrieved by the enhancement of compensation from 0.79Paise to Rs.100/- per sq. ft. in respect of the lands acquired inVallipuram village, Namakkal Taluk for formation of bye-pass road toNamakkal town, the Special Tahsildar and National HighwaysAuthorities of India have filed these Appeals. Since, all theappeals arise out of common order and the points for considerationare one and the same, all the Appeals were taken up together anddisposed of by this Common Judgment.2. Large extent of lands were acquired for formation of bye-passroad to Namakkal town having length of about 8 Kilometers. An extentof 11.47.0 Hectares of lands in Vallipuram village were acquired.Sec.4(1) notification was approved in G.O.No.1242 P.W. (Highways)H.P.1 dated 24.8.1993 and published in Tamil Nadu Government Gazetteon 22.9.1993. Sec.4(1) notification was also published in Tamilnewspapers viz., "Makkal Kural" and "Kumari Murasu" on 23.9.1993 andthe substance of the above notification was also published in thevillage on 25.10.1993. Sec.5-A enquiry was conducted on 15.04.1994.Sec.6 notification was published in the Government Gazette on20.07.1994 and in the newspapers on 21.07.1994 and substance of thesaid notification under Sec.6 of the Act was also published in thelocality on 08.08.1994.3. To determine the market value of the lands under acquisition,sales statistics for the period of three years from 25.10.1990 to24.10.1993 have been gathered. Totally 95 sales have been takenplace during the said period. Land Acquisition Officer [LAO] has https://hcservices.ecourts.gov.in/hcservices/ examined those sale deeds for fixing the market value for the landsunder acquisition. Except the lands covered in Sl.No.16 in the salesstatistics, the other sales were discarded that they are far awayfrom the lands under acquisition or that the rates do not reflect theprevailing rate of lands under acquisition. Under sale deed[Sl.No.16] dated 08.06.1991 [Document No.829] an extent of 1.27.5Hectares (or) 3.15 acres comprised in Dry S.Nos.277/3A1, 3B, 5A and5B of Vallipuram village has been sold for Rs.75,000/- i.e. perHectare Rs.58,823/- i.e. Rs.23,814/- per acre. LAO was of the viewthat S.Nos.277/3A1, 3B, 5A and 5B is identical to the Manavari Drylands under acquisition. Hence, the above sale which took place inS.Nos.277/3A1, 3B, 5A and 5B has been taken as basis for fixing themarket value for the Manavari Dry lands under acquisition. 4. In so far as irrigated Dry lands, in Serial No.27 - an extentof 1.21.5 Hectares (or) 3.01½ acres comprised in S.No.254/3, 6, 8A ofVallipuram village has been sold for Rs.75,000/- under DocumentNo.949 dated 28.06.1991 which means Rs.61,475/- per Hectare (or)Rs.24,888/- per acre. LAO was of the view that S.F.Nos.254/3, 6, 8Aand the Dry lands under acquisition are identical in all respects andtherefore, the above sale which took place on 28.6.1991 [DocumentNo.949] has been taken for fixing the market value for the irrigatedDry lands under acquisition. Fixing the above value for Manavariand irrigated Dry lands, Award No.3/1995 was passed ordering 30%solatium, 12% additional market value from 25.10.1983 to 05.10.1995.LAO has also fixed appropriate value for the trees in the acquiredlands.5. On objection raised by the land owners, reference underSec.18 of the Land Acquisition Act were made. References were takenon file as LAOP Nos.3, 4, 6, 9, 10, 11, 12, 13/1996 and 11, 12, 13,14, 15/1997 and 27/2002. In the Reference Court, LAOP.Nos.3 to 6, 9to 13/1996 were taken up together and disposed on 28.04.2000 as oneBatch. LAOP.Nos.15, 11 to 14/1997 were taken up together and disposedon 30.09.2002 as one Batch. Adopting the same rate, LAOP.No.27/2002was disposed on 02.04.2004 separately. Before the Reference Court,the Special Tahsildar [Land Acquisition] and the Divisional Engineer,National Highways, Salem alone were Respondents. TheBeneficiary/Requisitioning Body for which the lands were acquiredviz., National Highways Authorities of India [NHAI] was not made asa party in the LAOPs.6. In the Reference Court, in LAOP.No.3/1996 – Batch, respectiveClaimants were examined as CWs.1 to 7 and one Manohar, witness toEx.C4-sale agreement, one Mahalingam, power agent of Askar Basha, oneSeerangan, witness to Ex.C1-sale deed and one Balasubramaniam,witness to Ex.C7 were examined as CWs.8 to 11 respectively. Exs.C1to C7 were marked. No oral evidence on the side of the Respondentsand no document was marked on the side of Respondents. Similarly,in LAOP.Nos.15/1997 Batch, Claimant Ettigan [LAOP.No.15/1997] was https://hcservices.ecourts.gov.in/hcservices/ examined as CW1 and one Thangam was examined as CW2. Exs.C1 to C4were marked. No oral evidence on the side of Respondents and nodocument was marked. Like wise, in LAOP.No.27/2002, Claimant-Kaliappan was examined as CW1. Judgment and Decree inLAOP.No.15/1997-Batch were marked as Exs.C1 and C2 respectively. Onthe side of Respondents, one Venkatesan, the Special Tahsildar [LA]was examined as RW1. Exs.R1 to R3 were marked on the side ofRespondents.7. In LAOP.No.3/1996 Batch, Reference Court has taken Ex.C1-sale deed [19.1.1993] in which an extent of 500 sq. ft. inS.F.No.251/2A1, 2B1, 2A2, 2B2 was sold for Rs.50,000/- by oneSaravanan and others infavour of Jawahar and fixed the market valueof the acquired lands at Rs.100/- per sq. ft. Reference Court hasalso referred to Ex.C5-sale deed [25.8.1993] in which 600 sq. ft.comprised in S.F.No.251/2A2, 2B2, 2A1, 2B1 was sold for Rs.45,000/-by Ramachandran, Power of Attorney of one Doss infavour of oneMarimuthu. After taking Ex.C1-sale deed for fixing the market value,Reference Court has passed:- (i) enhancement of compensation from0.79 Paise to Rs.100/- per sq. ft.; (ii) 12% additional market valuefrom 25.10.1993 to 05.10.1995; (iii) 30% solatium on the enhancedmarket value; (iv) interest at the rate of 9% for one year periodfrom the date of taking possession; and (v) interest at the rate of15% p.a. thereafter till the date of realisation.8. In LAOP.Nos.15/1997 Batch and LAOP.No.27/2002, applying theJudgment and Decree in LAOP.No.3/1996 Batch, Reference Court hasordered:- (i) enhancement of compensation from 0.79 paise to Rs.100/-per sq. ft.; (ii) 12% additional market value from 25.10.1993 to05.10.1995; (iii) 30% solatium on the enhanced market value; (iv)interest at the rate of 9% for one year period from the date oftaking possession; and (v) interest at the rate of 15% p.a.thereafter till the date of realisation.9. Challenging the enhancement of compensation, the LAO/SpecialTahsildar [LA] and the Divisional Engineer, National Highways [notNational Highways Authorities of India] have preferred these Appeals.In the Appeals, on Petitions filed by the National HighwaysAuthorities of India, Requisitioning body [National HighwaysAuthorities of India] was impleaded as 3rd Appellant subsequently. 10. Main contention of learned Additional Solicitor General isthat to determine just and proper compensation the Beneficiary –National Highways Authorities of India ought to have been made as aparty. It was further submitted that though the Divisional Engineer,National Highways was one of the Respondent in the LAOPs, there wasno representation for National Highways Authorities of India. Mainplank of argument of the Appellants is that without proper andeffective representation of NHAI, the compensation amount wasenhanced prejudicially affecting the interest of National Highways https://hcservices.ecourts.gov.in/hcservices/ Authorities of India/Union of India which has to bear the heavycompensation.11. Drawing our attention to the additional documents filed inthe C.M.Ps., Mr.M.Ravindran, learned Additional Solicitor Generalsubmitted that even from 1991, there were protests and demonstrationsin and around Namakkal for forming bye-pass road to Namakkal town andthat after knowing about the scheme for formation of bye-pass road,land owners have brought into existence the sale deeds boosting theland value and the considerations stated in Exs.C1 and C5-sale deedsare fancy value to make a boosted claim for compensation. Taking usthrough the sales statistics and also the sale deeds infavour ofAshok Leyland Company, learned Additional Solicitor General hassubmitted that there was only slow increase in price of the lands andthe sudden spurt in the value of the land was boosted as it was afterthe grant of administrative sanction for formation of bye-pass roadto Namakkal town.12. Learned Additional Solicitor General further argued that ifthe additional documents are received in evidence, it would beevident that Exs.C3 and C2-sale deeds were brought into existenceboosting the value by Mahalingam and Mayilvaganan. It was furtherargued that when large extent of land is acquired, there cannot bedetermination of market value on square feet basis and theenhancement of compensation at Rs.75/- per sq. ft. is not supportedby any objective assessment. It was also urged that for formationof highways, National Highways Authorities of India has spent hugeamount for laying road and developing it and while so, ReferenceCourt erred in not making any deduction for development charges.13. We have also heard Mr.V.Ravi, learned Special GovernmentPleader [AS] appearing for the Appellants 1 and 2 who submitted thatLAO has taken the relevant sale deed which is prior to Sec.4(1)notification and has rightly fixed the market value at 0.79 Paise persq. ft. and while so, Court below erred in relying upon Ex.C1-saledeed without any basis. In support of his contention, learnedSpecial Government Pleader placed reliance upon (1997) 9 SCC 330[P.Rajan and another v. Kerala State Electricity Board and another]and AIR 1995 SC 1004 [M/s.Neyveli Lignite Corpn. Ltd., v. SpecialTahsildar (Land Acquisition], Neyvely and others]. Placing relianceupon (1996) 6 SCC 41 [Special Deputy Collector and another v. KurraSambasiva Rao and others], the learned Special Government Pleadercontended that it is the bounden duty of the Court to determine themarket value on an objective assessment of the conditions prevailingin the open market and the value fixed by the Reference Court isexorbitant.14. Laying emphasis upon Exs.C1 and C5-sale deeds,Mr.Silambanan, learned Senior Counsel appearing for the Claimants https://hcservices.ecourts.gov.in/hcservices/ contended that under Exs.C1-sale deed, the land was sold at the rateof Rs.100/- per sq. ft. and Reference Court has rightly taken themarket value at Rs.100/- per sq. ft. and even in January 1993, it wassold for Rs.100/- per sq. ft. It was further argued that merelybecause some persons were agitating for forming bye-pass road, itcannot be the ground to hold that the value was boosted in Exs.C1 andC5-sale deeds. It was contended that Ex.C5-sale deed is said to havebeen preceded by an agreement - Ex.C4 dated 22.12.1992 under whichPlot No.83 comprised in S.F.Nos.251.2A2, 2B2, 2A1, 2B1 measuring anextent of 600 sq. ft. was agreed to be sold for Rs.45,500/-. Standof Respondents-Claimants is that Ex.C5-sale deed was preceded by anagreement which lends assurance to Ex.C5-sale deed. Learned SeniorCounsel further argued that the potential value of the land has to bekept in view and no rebuttal evidence was adduced by the Appellantsand the acquired lands are in the midst of developed area and thevalue prior to Sec.4(1) notification was rightly taken intoconsideration by the Reference Court. Learned Senior Counsel wouldsubmit that the lands situated nearby the acquired lands were alreadypurchased by Ashok Leyland Company and therefore, the market valuefixed by the Reference Court cannot be said to be exorbitant or onthe higher side. In support of his contention, the learned SeniorCounsel placed reliance upon 1985 ALL. LJ 1324 [State of UP v.Afazulul Haq]; 98 LW 725 [Bhag Singh and others v. Union Territory ofChandigarh through the Land Acquisition Collector, Chandigarh]; AIR1992 SC 2298 [Bhagwathula Samanna and others v. Special Tahsildar andLand Acquisition Officer, Visakhapatnam Municipality]; (1995) 2 SCC305 [P.Ram Reddy and others v. Land Acquisition Officer, HyderabadUrban Development Authority, Hyderabad and others]; 1996 LACC 231[Puvvada Nageswara Rao and others v. Land Acquisition Officer]; 2001-1-LW 120 [Special Tahsildar (Land Acquisition), Sipcot, Pudukottai v.RM.Ramasamy and 3 others]; (2001) 7 SCC 211 [Sunder v. Union ofIndia]; 2003-4-LW 137 [Revenue Divisional Officer, Mettur v.N.Swaminathan]; (2004) 2 SCC 184 [H.P.Housing Board v. Bhyarat S.Negiand others]; (2004) 10 SCC 640 [V.Subrahmanya Rao v. Land AcquisitionZone Officer]; 2004-2-LW 673 [The Special Tahsildar Adi DravidarWelfare Sivagangai v. Muthu Konar]; 2005 (1) LACC 413 [TirumalaTirupathi Devasthanams v. Munikrishna Reddy]; (2005) 12 SCC 59[Ranvir Singh and another v. Union of India] and 2006-1-LW 394 [SubCollector, Padmanabhapuram Thakkalai village, Kalkulam Taluk,Kanyakumari District v. R.S.Raveendran].15. We have carefully examined the submissions of learnedAdditional Solicitor General and learned Special Government Pleaderand also learned Senior Counsel for Claimants.16. Lands measuring 11.47.0 Hectares in Vallipuram village invarious sub-divisions comprised in S.F.Nos.123, 124, 125, 127, 128,129, 131, 135, 136, 233, 235 237, 244, 245, 251, 253, 254 and 255have been acquired for formation of bye-pass road to Namakkal town.Vallipuram is a ryotwari village. To determine the market value of https://hcservices.ecourts.gov.in/hcservices/ the lands under acquisition, sale statistics for the period of threeyears from 25.10.1990 to 24.10.1993 were gathered and there weretotally 95 sales during the said period in the village. Upon carefulanalysis of the said sales, it is seen that under Sl.No.5 – sale deeddated 12.03.1991 an extent of 1258 sq. ft. comprised inS.F.No.251/2A1 and 2B1 was sold by Mahalingam and others to oneViswanath for Rs.1000/- i.e. 0.79 Paise per sq. ft. Analysis ofvarious sale deeds contained in the sales statistics would show thatthere was only slow increase in the value of the lands as is seenfrom the following:-Sl.NoDoc. No.and DateS.F.No.Extentsoldinsq.ft.Name ofVendorName ofVendeeSoldatRs.RateperSq.Ft.Rs.536912.03.1991251/2A1,2B11258sq.ft.Mahalingamand othersViswanath1000/-0.79Paise637112.03.1991251/2A1,2B23500sq.ft.Kaliammal andothersJeganathan12,000/-3.43862525.04.191251/2A1,2B1, 2B23000sq.ft.Mayilvagananand othersKambalathanChettiar10,000/-3.331067703.05.1991251/2A1,2B11600sq.ft.Mahalingamand othersAushgarBasha5600/-3.501171308.05.1991251/2A1,2B2,2A1, 2B11500sq.ft.Mayilvagananand othersRaju5000/-3.331988314.06.1991251/2A1,2B11500sq.ft.Mahalingam Saravanan6000/-4.0032100512.07.1991251/2A2,2B1,2B2, 2A21475sq.ft.MahalingamGnanasekaran15,000/-10.1636120505.09.1991251/2A2,2B2,2A1, 2B11500sq.ft.MayilvagananSubramanian15,000/-10.0048150730.10.1991251/2A1,2B1,2A2, 2B2412½sq.ft.Mahalingamand othersSaravanan6,200/-15.056589815.06.1992251/2A2,2B2,2A1, 2B11500sq.ft.Mayilvagananand othersKumarasamy22,500/-15.0071155421.10.1992251/2A2,2B21500sq.ft.MayilvagananKanagaraj30,000/-20.00 https://hcservices.ecourts.gov.in/hcservices/ By analysis of the above sales, it is clear that there was only veryslow increase in the value of the lands. Most of the saletransactions pertaining to house sites were sold only by Claimants-Mahalingam and Mayilvaganan and rest of the transactions werepredominantly of agricultural lands.17. Serial No.76 of sales statistics [Ex.C1] is the sale deeddated 19.1.1993 [registered on 20.1.1993] in which an extent of 500sq. ft. comprised in S.F.No.251/2A1, 2B1, 2A2, 2B2 was sold bySaravanan and others to one Jawahar [Claimant in LAOP.No.6/1996] forRs.50,000/- i.e. Rs.100/- per sq. ft. Like wise, Serial No.93[Ex.C5] is the sale deed dated 25.8.1993 [registered on 27.8.1993] inwhich an extent of 600 sq. ft. was sold by Ramachandran infavour ofMarimuthu for Rs.45,000/- i.e. Rs.75/- per sq. ft. Leaving all thedocuments for a period of three years where the land value was slowlyincreasing ranging from Rs.3/- to Rs.20/-, curiously the ReferenceCourt has taken Ex.C1-sale deed as basis for fixing the market value.For taking Ex.C1-sale deed, Reference Court has observed that Ex.C1is prior to Sec.4(1) notification and therefore, Ex.C1 is taken asbasis for fixing the market value. The value fixed by the Court isnot based on any objective assessment.18. As pointed out earlier, by analysis of sales statistics, oneMahalingam and Mayilvaganan were selling small extent of house sitesand most of the sale transactions in the sales statistics are saledeeds executed by the said Mahalingam and Mayilvaganan. As seen fromSerial No.19, Respondent-Claimant Saravanan purchased 1500 sq. ft. inS.F.No.251/2A1, 2B1 from Mahalingam under Document No.883 [14.6.1991]for Rs.6000/- i.e. Rs.4/- per sq. ft. The said Respondent-ClaimantSaravanan sold 500 sq. ft. in S.F.Nos.251/2A1, 2B1, 2A2, 2B2 toJawahar for Rs.50,000/- i.e. Rs.100/- per sq. ft. Like wise, underEx.C5, an extent of 600 sq. ft. in S.F.Nos.251/2A2, 2B2, 2A1, 2B1 wassold for Rs.45,000/- i.e. Rs.75/- per sq. ft. 19. For quite some time, from May 1991 there was a demand forforming bye-pass road to Namakkal town. From one of the pamphletsfiled by National Highways Authorities of India as additionaldocuments, it is seen that from 1991, there were protests anddemonstrations in and around Namakkal for forming bye-pass road toNamakkal town. Additional documents were also produced to show thatadministrative sanction [C.No.45/93/JDO dated 09.01.1993] was grantedfor the estimate of Rs.83.11 lakhs for formation of Namakkal bye-passroad. When the above Proceedings of administrative sanction wasissued in January 1993 giving details of extent of lands to beacquired in various villages, by the said Proceedings dated09.01.1993 the project has taken final shape. In such circumstancesunder Serial No.76, a small extent of 500 sq. ft. in S.F.Nos.251/2A1,2B1, 2A2, 2B2 was sold by one Saravanan and others infavour ofJawahar under Ex.C1 sale deed dated 19.1.1993 for Rs.50,000/- i.e.Rs.100/- per sq. ft. As rightly contended by Mr.M.Ravindran, learned https://hcservices.ecourts.gov.in/hcservices/ Additional Solicitor General, serious doubts arise as to genuinenessof the transaction of Exs.C1 and C5-sale deeds. Reference Courtappears to have fixed the value unmindful of fact that there was longstanding agitation to form bye-pass road from 1991.20. Laying emphasis upon the sale deeds infavour of AshokLeyland Company, the learned Senior Counsel contended that AshokLeyland Company and TVS Group have purchased the property inS.F.Nos.276, 277 and 278, the value of the lands nearby the acquiredlands has gone up and Reference Court has rightly fixed the value ofthe land at Rs.100/- per sq. ft.21. There is no force in the contention that the value of theland had substantially gone up after Ashok Leyland Company haspurchased the property. In the sales statistics, Serial Nos.80 to 86are the sale deeds dated 29.03.1993 under which an extent of landranging from 4.40 acres to 2.61 acres was sold by Namakkal Auto NagarAssociation to Ashok leyland Company and as per the said sale deeds,rate per Hectare is Rs.1,11,000/-. The details of lands sold toAshok Leyland Company are as under:-Sl.NoDoc. No.and DateS.No.Extentsoldin acresName ofVendorName ofVendeeSold atRs.Rate perHectareRs.8054429.03.1993274/7,3, 2C,9275/1,2276/13B4.40NamakkalAuto NagarAssociationAshokLeylandCompany1,97,838/-1,10,000/-8154529.03.1993276/11,12A277/13B4.35NamakkalAuto NagarAssociationAshokLeylandCompany1,95,624/-[Afterenquiryvalue wasfixed at2,36,260/-1,11,000/-8254629.03.1993276/2B,13A277/3B3.63NamakkalAuto NagarAssociationAshokLeylandCompany1,63,391/-1,11,000/-8354729.03.1993277/1,2, 5A &5B3.51NamakkalAuto NagarAssociationAshokLeylandCompany1,57,829/-1,11,000/-8454829.03.1993278/2293/23.98NamakkalAuto NagarAssociationAshokLeylandCompany1,78,947/-1,11,000/-8554929.03.1993278/32.61NamakkalAuto NagarAssociationAshokLeylandCompany1,17,261/-1,11,000/- https://hcservices.ecourts.gov.in/hcservices/ Sl.NoDoc. No.and DateS.No.Extentsoldin acresName ofVendorName ofVendeeSold atRs.Rate perHectareRs.8655029.03.1993278/32.62NamakkalAuto NagarAssociationAshokLeylandCompany1,17,819/-1,11,000/-22. The sale deed [Document No.545 dated 29.03.1993] presentedfor registration by Ashok Leyland Company was not registered on theground that it was undervalued. After enquiry, the land value wasfixed at Rs.2,36,260/- i.e. Rs.1.25 per sq. ft. and deficit stamp ofRs.4149/- and registration fee of Rs.345/- were collected from AshokLeyland Company. So even after enquiry for under valuation, thevalue fixed was only Rs.1.25 per sq. ft. and not a higher value ascontended by the Claimants.23. By analysis of the sale deeds infavour of Ashok LeylandCompany, three things are emerge:-●Large extent of lands were sold on the basis of valueper Acre.●Per Hectare value is Rs.1,11,000/- that meansRs.44,939/- rounded to Rs.44,940/- per acre whichmeans more or less Rs.1.03 per sq. ft.●Even after enquiry, the value was fixed atRs.2,36,260/- i.e. Rs.1.25 per sq. ft. 24. Likewise, if we take Serial No.78 – sale deed dated05.03.1993, an extent of 0.38½ cent in S.F.No.303/2 was sold by oneMuthusami to Nallusami for industrial purpose for Rs.20,000/- whichmeans per Hectare Rs.1,29,000/- i.e. Rs.52,226/- per acre [Rs.1.19rounded to Rs.1.20 per sq. ft.].25. Ex.C7 [26.02.1993] is an agreement by Mayilvaganan andothers agreeing to sell 0.75.0 Hectares in S.F.Nos.251/2A1, 2A2, 2B1,2B2 at the rate of Rs.200/- per sq. ft. Placing reliance upon 1996LACC 232 [Puvvada Nageswara Rao and others v. The Land AcquisitionOfficer and Revenue Divisional Officer, Ongole], the learned SeniorCounsel Mr.Silambanan contended that reliance can be placed on theagreements to sell and the Reference Court ought to have fixed thevalue at Rs.200/- per sq. ft. In the said decision, the DivisionBench of Andhra Pradesh High Court held that reliance can be placedupon the agreements to sell if they are found to be not merely forclaiming higher compensation. In the said case before the AndhraPradesh High Court, the agreements were registered much prior toissuance of notification and not merely for claiming highercompensation. In the instant case, Ex.C7 is an unregisteredagreement by Mayilvaganan and others. National Highways Authoritiesof India had no chance to meet the agreement [Ex.C7] to bring homethe point whether Ex.C7 could be relied upon or not. https://hcservices.ecourts.gov.in/hcservices/

26. Under Sec.23(1) of the Act, the Court has to determine themarket value of the land. One of the methods of valuation is theprice paid, within a reasonable time, in bonafide transactions ofpurchase of land acquired, or of the land adjacent to the landacquired having similar advantages. Such transactions of saleindicate the price of the land acquired on the date of thenotification. The Court has to consider whether or not anyparticular transaction of sale affords a fair criterion of the marketvalue of the land acquired.27. By perusal of documents now filed as additional documents,there had been protests and demonstrations even from 1991 for formingbye-pass road to Namakkal town. Administrative sanction was grantedvide Proceedings C.No.45/93/JDO dated 09.01.1993 . Exs.C1 and C5-sale deeds are after the administrative sanction. Reference Courtwas swayed by Exs.C1 and C5-sale deeds and does not appear to havecarefully examined Exs.C1 and C5-sale deeds which are not compatiblewith the trend of slow increase of the land value.28. In this case, large extent of lands were acquired forformation of bye-pass road to Namakkal town. In his evidence, RW1[LAOP.No.27/2002] has stated that the lands acquired are very faraway from the village and in and around the acquired lands there isno house or village situate. In this regard, the evidence of RW1reads as follows:-@Mh;$pjk; bra;ag;gl;l epyk; Cuf;F xJf;Fg[wj;jpy; cs;sjhFk;/ vjw;Fk; cgnahfkw;wjhFk;/vdnt. mjd; kjpg;gpid rhpahd Kiwapy; fzf;fpl;L kjpg;gPL eph;zak; bra;ag;gl;Ls;sJ/Mh;$pjk; bra;ag;gl;l epyk; nuhL trjp ,y;yhky; kpft[k; cs;sl';fpa epykhFk;/ nkw;goepy';fSf;F mUfpy; ve;jtpjkhd tPLfnsh. Cnuh ,y;iy/ Mh;$pj epyj;jpw;FmUfhikapy; mnrhf; iynyz;l; epWtdnkh. o/tp/v!;/ epWtdnkh. fhydp tPLfnsh.nfhHpg;gz;izfnsh. tPl;Lkidfnsh. fpwpj;Jt gs;spfnsh. nfhtpy;fnsh.yhhpg;gl;liwfnsh. tptrha epy';fnsh ,y;iy/ beL";rhiyapypUe;J kpf bjhiytpy;cs;sJ/ 29. Viewed from any angle, the value fixed by the ReferenceCourt at Rs.100/- per sq. ft. is exorbitant and very much on thehigher side. The various aspects like demonstration for formation ofbye-pass road to Namakkal town from 1991 and other relevant aspectswould have been brought forth before the Reference Court had theBeneficiary/Requisitioning Body – National Highways Authorities ofIndia been was impleaded. Without impleading the National HighwaysAuthorities of India in the LAOPs and without any basis, ReferenceCourt had fixed the market value of the acquired lands on the higherside unmindful of financial implications.30. Yet another material aspect is relevant to be noted. Whenlarge extent of lands were acquired for formation of bye-pass road to https://hcservices.ecourts.gov.in/hcservices/ Namakkal town and when the acquired lands are far away from Namakkaltown, Reference Court erred in determining the value of the land persquare feet. Holding that when large extent of lands are acquired,determination of value on the square feet basis is a wrong principleand market value could be fixed only per acreage or per cent, in(1997) 9 SCC 330 [P.Rajan and another v. Kerala State ElectricityBoard and another], the Supreme Court held as under:-"When a large extent of land is acquired, determinationof compensation on the foot of a cent, square yard orsquare foot is a wrong principle. The principle offixation on acreage basis would be the correct principle.If the land acquired is situated in a developed area andis converted into buildings in a colony after obtainingsanction from the competent authority or is situated in awell-developed area like in the heart of a commercialcentre, determination of the compensation could be onsquare yard basis after giving due deduction according tolaw. Determination on square foot basis would beconfined only to highly developed commercial land or landsituated at a place in the heart of a city like NarimanPoint in Bombay or Connaught Place in Delhi."31. Yet another infirmity in the Judgment of Reference Court isalso to be noted. Large block of land will have to be developed forformation of bye-pass road. Even though, Highways is a strip forwhich common space like roads, drainage and other common space maynot be required yet like any other scheme, huge amount will have tobe spent for formation of road i.e. place has to be treated and sideways are to be formed and for forming Highways and developing properinfrastructure huge amount will have to be spent. This factor can bebalanced only by making a deduction by way of allowance at anappropriate rate ranging approximately between 20% to 50% to accountfor the land required to be set apart for forming bye-pass road. Aspointed out earlier, though the Reference Court has fixed the marketvalue at Rs.100/- per sq. ft. no percentage of deduction fordevelopment charges was made. More over, we do not find that anydevelopment had taken place in the acquired land as on 4(1)notification. No piece of evidence has been produced by theClaimants showing that the alleged layout has been approved by thecompetent authority and that the lands were converted as house sitesprior to 4(1) notification. In our considered view, the reasonsassigned by the Reference Court for not making deduction towards thedevelopment charges are not convincing.32. National Highways Authorities of India – necessary party :non-impleading of Beneficiary/NHAI in LAOPs:- In the LAOPs. Government has not filed the counter. Themain plank of argument of the learned Senior Counsel for Claimants isthat Government not even chosen to file counter and not even https://hcservices.ecourts.gov.in/hcservices/ elaborately cross examined the Claimants. Learned Senior CounselMr.Silambanan submitted that Divisional Engineer was already a partyand even though opportunity was given, the Government neither choseto file counter nor elaborately cross examined the Claimants and inthe absence of any rebuttal evidence, based upon Ex.C1-sale deed,Reference Court has rightly fixed the market value at Rs.100/- persq. ft.33. In the LAOPs, the Respondent was only the State Governmenti.e. the Land Acquisition Officer and the Divisional Engineer,National Highways, Salem. Requisitioning Body – National HighwaysAuthorities of India who has to pay compensation was not made aparty. Only if National Highways Authorities of India had been madeas a party being Requisitioning Body, NHAI would have put forth theirobjection by filing counter and by adducing evidence.34. The contention of National Highways Authorities of India isthat the acquisition not having been for Tamil Nadu State Governmentbut for the National Highways Authorities of India and therefore, itwas incumbent on the Reference Court to issue notice to the 3rdAppellant – National Highways Authorities of India before consideringthe claim of the Claimants for enhancement of compensation. Eventhough, the Divisional Engineer, National Highways, Salem was shownas 2nd Appellant, the said Divisional Engineer of National Highwayswas represented by State Government Pleader himself. It cannot bedisputed that Requisitioning body – National Highways Authorities ofIndia was not made as a party in the LAOPs nor any opportunity wasafforded to National Highways Authorities of India to adduce evidence.35. Section 20 (c) makes it obligatory for the Court to issuenotice to the person or authority for whose benefit the acquisitionis made. Sec.20 of Land Acquisition Act reads as follows:20. Service of notice. - The Court shall thereupon cause anotice, specifying the day on which the Court will proceedto determining the objection, and directing theirappearance before the Court on that day, to be served onthe following persons, namely :(a) the applicant;(b) all the persons interested in the objection, exceptsuch (if any) of them as have consented without protestto receive payment of the compensation awarded; and(c) if the objection is in regard to the area of theland or to the amount of the compensation, theCollector.36. The Court having seisin of the reference is empowered underSec.20 of the Act to direct appearance before him not only of the:(a) applicant that is applicant for reference but also; (b) allpersons interested in the objection except such (if any) of those as https://hcservices.ecourts.gov.in/hcservices/ have consented without protest to receive payment of the compensationawarded. The term "interested" in Clause (b) is wide enough toinclude both, the persons interested in supporting, or opposing theapplicant, that means, Cl.(b) must have reference to parties havingconflicting claims to the compensation either whole or party, asagainst the applicant and otherwise. The Court therefore, hadpower, irrespective of any reference in that behalf, to investigatethe claims. 37. The scheme of the Act makes it clear that when the land isacquired for the Government, it is only the Requisitioning Body thatis expected to participate in the proceedings and to safeguard theinterest of the Government for whom the land is acquired. If theGovernment for whom the land is acquired can be regarded as a "personinterested" in the reference, there is no need to have an independentprovision like Clause (c) of Section 20 giving right to the person orauthority other than the Government of being notified andparticipating in the proceedings. Further, it is not reasonable topresume that the legislature intended to make a redundant provisionin Clause (c) of Section 20 of the Act.38. Sec.54-A of Land Acquisition Act was inserted by the TamilNadu State by the Land Acquisition (Tamil Nadu Amendment) Act, 1996(Tamil Nadu Act 16 of 1997), so as to enable to implead therequisitioning body as a party in the cases filed before the HighCourt. Sec.54-A reads as under:-"54-A. Service of notice by High Court.- Notwithstandinganything contained in the Code of Civil Procedure, 1908(Central Act V of 1908), the High Court, before which anappeal has been filed under Section 54, shall cause anotice, specifying the date on which such Court willproceed to hear the case and directing the appearancebefore such Court on that day, to be served on the personor authority also, other than the Government, for whom theacquisition is made."Only if the requisitioning body is impleaded as party, it could putforth its point/objection through counter-affidavit.39. Observing that it was mandatory on the part of ReferenceCourt to have caused a notice on the Requisitioning Body beforeproceeding to determine the compensation, in (1990) 3 SCC 617[Neelagangabai and another v. State of Karnataka and others], theSupreme Court has held as under:-"Admittedly the land was acquired for the purpose of theRespondent-Corporation and the burden of payment of thecompensation is on the Corporation. In this backgroundthe High Court has held that it was mandatory for theCourt of reference to have caused a notice served on therespondent-Corporation before proceeding to determine the https://hcservices.ecourts.gov.in/hcservices/ compensation claim. Since no notice was given to therespondent-Corporation and it was thus deprived of anopportunity to place its case before the Court, thejudgment rendered ion the reference case was illegal andnot binding on the Corporation".40. The Authority or Company for whose benefit the land wasacquired who is a beneficiary is necessary party. Holding thatbeneficiary is a necessary party, in AIR 1995 SC 1004 [M/s.NeyvelyLignite Corporation Ltd., v. Special Tahsildar (Land Acquisition),Neyvely and others], the Supreme Court has held as under:-"11. ....... The beneficiary, i.e. the local authority orcompany, a co-op society registered under the relevantState law, or statutory authority is a person interestedto determine just and proper compensation for theacquired land and is an aggrieved person. Thebeneficiary has the right to be heard by the Collector orthe Court. If the compensation is enhanced it isentitled to canvass its correctness by filing an appealor defend the award of the Collector. If it is not madea party, it is entitled to seek leave of the Court andfile the appeal against the enhanced award and decree ofthe Civil Court under Section 26 or of the judgment anddecree under Section 54 or is entitled to file writpetition under Art.226 and assail its legality orcorrectness. When the award made under Section 11 of theCollector is vitiated by fraud, collusion or corruption,the beneficiary is entitled to challenge it in the writpetition apart from the settled law that the conduct ofthe Collector or Civil Judge is amenable to disciplinaryenquiry and appropriate action. These are very valuableand salutary rights. Moreover, in the language of Order1, Rule 10, CPC in the absence of the beneficiary whoultimately is to bear the higher compensation, nocomplete and effectual determination of binding just andproper compensation to the acquired land would be made.So it is concomitantly a proper party if not a necessaryparty to the proceedings under Order 1, Rule 10 CPC. Thedenial of the right to a person interested is in negationof fair and just procedure offending Art.14 of theConstitution."41. By perusal of the records of Reference Court, it is seenthat the State Government Pleader appeared for Land AcquisitionOfficer also represented the Divisional Engineer, Highways. We donot think that the State Government Pleader can effectively representthe Union of India or National Highways Authorities of India. Asheld by the Supreme Court, the LAO who was represented by the StateGovernment Pleader do not generally adduce evidence much less properand relevant evidence to rebut the claim for higher compensation. https://hcservices.ecourts.gov.in/hcservices/ Even the cross-examination will be formal and ineffective or at time,no evidence at all would be adduced. Observing that GovernmentAgencies remain insensitive even if stakes involved run into severalcrores of public money, in AIR 1995 SC 1004 [M/s.Neyvely LigniteCorporation Ltd., v. Special Tahsildar (Land Acquisition), Neyvelyand others], the Supreme Court held as under:-"12. The reasons are not far to seek. It is notoriousthat though the stakes involved are heavy, the GovernmentPleader or the Instructing Officer do not generallyadduce, much less proper and relevant, evidence to rebutthe claims for higher compensation. Even the cross-examination will be formal, haulting and ineffective.Generally, if not invariably the Governmental agenciesinvolved in the process take their own time and many atime in collusion, file the appeals after abnormal orinordinate delay. They remain insensitive even if thestakes involved run into several crores of public money.The Courts insist upon proper explanation of every day'sdelay. In this attitudinal situation it would bedifficult to meet strict standards to fill theunbridgeable gaps of the delay in filing the appeals andgenerally entail with dismissal of the appeals at thethreshold without adverting to the merits in the hike inthe compensation. On other hand, if the notice is issuedto the local authority etc. it/they would participate inthe award proceedings under Sections 11 and 18 adducenecessary and relevant evidence and be heard beforedetermining compensation. For instance that withoutconsidering the evidence in the proper perspective, theCourt determined the compensation.13. If there is no right of hearing or appeal given tothe beneficiary and if the State does not file the appealor if filed with delay and it was dismissed, is it notthe beneficiary who undoubtedly bears the burden of thecompensation, would be the affected person? ..........But suffice it to state that when the beneficiary forwhose benefit the land is acquired is served with thenotice and brought on record at the state of enquiry bythe Collector and reference Court under Section 18 or inan appeal under Section 54, it/they would be interestedto defend the award under Section 11 or 26 or would filean appeal independently under Section 54 etc. against theenhanced compensation. As a necessary or proper partyaffected by the determination of higher compensation, thebeneficiary must have a right to challenge thecorrectness of the award made by the Reference Courtunder Section 18 or in appeal under Section 54 etc.Considered from this perspective we are of the consideredview that the appellant-company is an interested personwithin the meaning of Section 3(b) of the Act and is also https://hcservices.ecourts.gov.in/hcservices/ a proper party, if not a necessary party under Order 1,Rule 10 of the CPC. The High Court had committedmanifest error of law in holding that the appellant isnot a person interested." [underlining added]42. National Highways Authorities of India is a person orauthority for whose benefit and for whom the land is being acquiredand who may have to pay the compensation ought to have been impleadedas Respondent in the LAOP proceedings. Without being made as aparty, National Highways Authorities of India was subjected toserious hardship in being deprived of an opportunity in putting forthits case. In the absence of beneficiary for whose benefit the landwas acquired who is ultimately to bear the higher compensation, thereis no complete and effectual determination. Without impleading thebeneficiary, there is no effectual determination of binding just andproper compensation to the acquired lands could be made. In ourconsidered view, without impleading the National Highways Authoritiesof India – Requisitioning Body/Beneficiary, there is no effectualdetermination of compensation. Denial of right to a "personinterested" is negation of fair and just procedure offending Article14 of Constitution of India.43. PETITIONS UNDER OR.41, RULE 27 CPC FILED BY NHAI:-CMP.Nos.1686/2009 in AS.No.751/2001; 1713/2009 in AS.No.752/2001;1714/2009 in AS.No.753/2001; 1684/2009 in AS.No.937/2001; 1692/2009in AS.No.955/2001; 1712/2009 in AS.No.956/2001; 1693/2009 inAS.No.722/20004; 1680/2009 in AS.No.723/2004; 1685/2009 inAS.No.724/2004; 1683/2009 in AS.No.725/2004; 1681/2009 inAS.No.726/2004: Stating that they have not been impleaded as party in theLAOP and that they have been deprived of opportunity of putting forthrelevant evidence, the National Highways Authorities of India hasfiled applications to receive the documents as additional evidence.The National Highways Authorities of India has filed variousdocuments which are as follows:-S.No.DateDescription of document129.12.1992Xerox copy of Representation of MakkalDevelopment Council, Namakkal addressed tothe Prime Minister of India.2-Xerox copy of pamphlet327.11.1992Copy of Letter No.12014/272/92-TN byGovernment of India, Ministry of SurfaceTransport (Roads Wing) addressed to theSpecial Secretary to Government of TamilNadu. https://hcservices.ecourts.gov.in/hcservices/ S.No.DateDescription of document409.01.1993Xerox copy of Letter C.No.45/93/JDOaddressed by Divisional Engineer (NH),Salem to the District Collector, Namakkal.526.08.1997Xerox copy of Decree in LAOP.No.63/1991 onthe file of Sub-Court, Namakkal.629.04.2003Xerox copy of Judgment in A.S.No.34 of 2000on the file of High Court of Judicature,Madras.7-Xerox copy of Award No.8/1998.803.05.1991Xerox copy of registration copy of saledeed executed by Mahalingam infavour ofAushgar Basha.912.06.1991Xerox copy of registration copy of saledeed executed by Mahalingam infavour ofSaravanan.1012.06.1991Xerox copy of registration copy of saledeed executed by Mahalingam infavour ofSaravanan.44. There had been protests and demonstrations demanding bye-pass road to Namakkal town even from 1991. By perusal of theadditional documents filed, it is also seen that on 09.01.1993,administrative sanction was given to the scheme of bye-pass road.Thereafter, Ex.C1 sale deed [19.1.1993] came into existence. Theweight of the recitals, particularly the consideration aspect, thedocuments will have to be examined in the light of the additionaldocuments filed by National Highways Authorities of India.45. It is also seen from the additional documents filed alongwith the Petitions that for the lands acquired for Master PlanComplex and Neighbourhood scheme, the value of the land was fixed atvery lesser rate and in our considered view that the additionaldocuments are very relevant to be marked. We are of the view thatNational Highways Authorities of India has to be given an opportunityto adduce evidence and to demonstrate its stand in respect of Exs.C1and C5-sale deeds.46. In the light of the above, the additional documents filed bythe National Highways Authorities of India and having regard to theserious doubts that arise regarding genuineness of Exs.C1 and C5 –sale deeds, we are of the view that the impugned order passed by theReference Court in the above said three Batch of cases are to be setaside and the matters are ordered to be remitted back to theReference Court for consideration of the matter afresh. https://hcservices.ecourts.gov.in/hcservices/

47. We are conscious that the lands were acquired about 1½decades ago i.e., in the year 1995 and in some of the LAOPs Judgmentwas pronounced in 2000. We are also conscious that under Or.41, Rule27 CPC, the first Appellate Court can itself receive the documentsproduced as additional evidence and thereafter proceed to analyse thematter by receiving the additional documents. From the chart filedby the learned Additional Solicitor General, it comes to be knownthat as against the estimated cost of acquisition of about Rs.1 croreand odd, by the impugned Judgment, several crores were awarded byenhancement of compensation. Having regard to the higher stakesinvolved, we are of the view that National Highways Authorities ofIndia has to be given sufficient opportunity to adduce oral anddocumentary evidence apart from the additional documents filed beforeus. In such view of the matter, having regard to the higher stakesinvolved, notwithstanding the passage of time, the matter has to beremitted back to the Reference Court for consideration of the matterafresh by affording sufficient opportunity to the Appellants toadduce oral and documentary evidence. Like wise, the Reference Courtshall provide an opportunity to the Claimants to let in additionaloral and documentary evidence by means of examining the witnesses ifthey so desire.48. Guidelines to Subordinate Courts:- While determining the market value and awarding enhancedcompensation, Court is enjoined upon the public duty/public functionand judicial dispensation in determination of the market value of theacquired land. It is the bounden duty of the Court to determine themarket value on objective assessment of the conditions prevailing inthe open market. As discussed earlier, in most of the cases, wenotice that in fixing the market value, Courts are not guided byobjective assessment. The Reference Courts are laying too muchemphasis upon the Claimant's right to compensation and awardinghigher compensation which would place a very heavy burden on thepublic exchequer. We notice that in number of cases, Reference Courtis awarding higher compensation and such higher compensation is notbased upon objective assessment. Even if the sale deeds ofcomparable instances are filed, Courts will have to be weary oftendency of the land owners/others in creating the documents boostingup the value as it appears to have happened in the instant cases.Since, it is enjoined upon the Reference Court to perform the publicfunction of fixing the market value which has serious implication ofpublic exchequer, we deem it appropriate to recapitulate the wellsettled principles:- (i) market value; (ii) duty of the Court infixing the market value; (iii) fixing the market value based oncomparable instances; (iv) deduction for development; (v) duty of theCourt in appreciating the evidence while fixing the market value. https://hcservices.ecourts.gov.in/hcservices/

49. Fixation of Market Value:- Section 23 of Land Acquisition Act enumerates the mattersto be considered in determining compensation. The first criterion tobe taken into consideration is the market value of the land on thedate of the publication of notification under Section 4(1).Similarly, Section 24 of the Act enumerates the matters which theCourt shall not take into consideration in determining thecompensation. A safeguard is provided in Section 25 of the Act thatthe amount of compensation to be awarded by the Court shall not beless than the amount awarded by the Collector under Section 11.Value of the potentiality is to be determined on such materials asare available and without indulgence in any fits of imagination. 50. In a catena of decisions, the Supreme Court has laid downthe governing principles for determination of market value and theamount of compensation. The positive as well as negative factors andpotentiality of the land to be taken into consideration for arrivingat the correct market value. In (2005) 4 SCC 789 [Viluben JhalejarContractor v. State of Gujarat], the Supreme Court held as under:-"18. One of the principles for determination of the amountof compensation for acquisition of land would be thewillingness of an informed buyer to offer the pricetherefor. It is beyond any cavil that the price of the landwhich a willing and informed buyer would offer would bedifferent in the cases where the owner is in possession andenjoyment of the property and in the cases where he is not.19. Market value is ordinarily the price the property mayfetch in the open market if sold by a willing sellerunaffected by the special needs of a particular purchase.Where definite material is not forthcoming either in theshape of sales of similar lands in the neighbourhood at orabout the date of notification under Section 4(1) orotherwise, other sale instances as well as other evidenceshave to be considered.20. The amount of compensation cannot be ascertained withmathematical accuracy. A comparable instance has to beidentified having regard to the proximity from time angle aswell as proximity from situation angle. For determining themarket value of the land under acquisition, suitableadjustment has to be made having regard to various positiveand negative factors vis-a-vis the land under acquisition byplacing the two in juxtaposition. The positive and negativefactors are as under:- https://hcservices.ecourts.gov.in/hcservices/ Positive factorsNegative factors(i) smallness of size(i) largeness of area(ii) proximity to a roaddistance(ii) situation in the interiorat a from the road(iii) frontage on a road(iii) narrow strip of landwith very small frontagecompared to depth(iv) nearness todeveloped area(iv) lower level requiring thedepressed portion to be filledup(v) regular shape(v) remoteness from developedlocality(vi) level vis-a-vis landunder(vi) some specialdisadvantageous acquisitionfactors which would deter apurchaser(vii) special value foran owner of an adjoiningproperty to whom it mayhave some very specialadvantage21. Whereas a smaller plot may be within the reach of many,a large block of land will have to be developed preparing alayout plan, carving out roads, leaving open spaces,plotting out smaller plots,waiting for purchasers and thehazards of an entrepreneur. Such development charges mayrange between 20% and 50% of the total price.51. In (2009) 1 SCALE 545 [Revenue Divisional Officer-cum-L.A.O.v. Shaik Azam Saheb], the positive as well as negative factorsindicated in Viluben Jhalejar Contractor's case (supra) as factorsgermane for consideration for the purpose of determining the marketvalue was reiterated thus:"11. Determination of market value of a land acquired interms of the provisions of the said Act depends upon alarge number of factors, the first being the nature andquality of the land, i.e., whether agricultural land orhomestead land. Apart from nature and quality of landin the event the agricultural lands are acquired theother factors relevant therefor are also required to beconsidered, namely, as to whether they are irrigated ornon-irrigated, extent of facilities available forirrigation, location of the land, closeness thereof fromany road of highway, the evenness of land, its positionin different seasons particularly in rainy season,existence of any building or structure as also thedevelopment in and around the area. A host of other https://hcservices.ecourts.gov.in/hcservices/ factors will also have a bearing on determining thevaluation of land.12. The mode and manner in which determination of suchvaluation are to be carried out would also depend uponthe facts and circumstances of each case, namely,whether any deed of sale executed in respect ofsimilarly situated land near about the date of issuanceof notification under Section 4(1) of the Act isavailable, or in absence of any such exemplars whetherthe claim can be determined on yield basis or in caseof an orchard on the basis of the number of fruitbearing trees and the yield therefrom.13. One other important factor which also should beborne in mind is that it may not be safe to rely onlyon an award involving a neighbouring area irrespectiveof the nature and quality of the land. Fordetermination of market value again, the positive andnegative factors germane therefor should be taken intoconsideration, as laid down by this Court in VilubenJhalejar Contractor v. State of Gujarat (supra)."52. Considering the factor whether the land has got potentialvalue, in (2008) 3 MLJ 806 (SC) [Atma Singh (died) through LRs andothers v. State of Haryana and another], the Supreme Court held asunder:-"5. For ascertaining the market value of the land, thepotentiality of the acquired land should also be takeninto consideration. Potentiality means capacity orpossibility for changing or developing into state ofactuality. It is well settled that market value of aproperty has to be determined having due regard to itsexisting condition with all its existing advantages andits potential possibility when led out in its mostadvantageous manner. The question whether a land haspotential value or not, is primarily one of factdepending upon its condition, situation, user to whichit is put or is reasonably capable of being put andproximity to residential, commercial or industrial areasor institutions. The existing amenities like, water,electricity, possibility of their further extension,whether near about Town is developing or has prospect ofdevelopment have to be taken into consideration. SeeCollector Raigarh v. Hari Singh Thakur, AIR 1979 SC 472,Raghubans Narain v. State of U.P., AIR 1969 SC 465 andAdministrator General, W.B. v. Collector Varanasi(supra). It has been held in Kaushalya Devi v. L.A.O.Aurangabad, AIR 1984 SC 892 and Suresh Kumar v.T.I.Trust, AIR 1980 SC 1222 that failing to considerpotential value of the acquired land is an error ofprinciple." https://hcservices.ecourts.gov.in/hcservices/

53. Duty of the Courts in fixing the market value:- What emerges from the above decisions is that the burden ison the owner to prove the prevailing market value. On adducing ofevidence by the parties, the acid test which the Court has to adoptis that the Court has to sit in the arm-chair of a prudent purchaser,eschew feats of imagination and consider whether a reasonable prudentpurchaser in the open market would offer the same price which theCourt is intending to fix the market value in respect of the acquiredland. Since it is the compulsory acquisition, it is but the solemnduty of the Court to assess reasonable compensation so as to allowthe same to the owner of the land whose property has been acquired bycompulsory acquisition and also to avoid needless burden on publicexchequer. No feats of imagination would require to bog the mindthat when large extent of land was offered, no prudent man would havecredulity to purchase that land on square feet basis.54. Holding that when large extent of land is acquired,determination of compensation cannot be on square feet basis and thatit would be confined only to highly developed commercial land or thelands situated in the Cities, in (1997) 9 SCC 330 [P.Rajan andanother v. Kerala State Electricity Board and another], the SupremeCourt held as under:-"4. It is a well-settled position that when a largeextent of land is acquired, determination of compensationon the foot of a cent, square yard or square foot is awrong principle. The principle of fixation on acreagebasis would be the correct principle. If the landacquired is situated in a developed area and is convertedinto buildings in a colony after obtaining sanction fromthe competent authority or is situated in a well-developed area like in the heart of a commercial centre,determination of the compensation could be on square yardbasis after giving due deduction according to law.Determination on square foot basis would be confined onlyto highly developed commercial land or land situated at aplace in the heart of a city like Nariman Point in Bombayor Connaught Place in Delhi."55. Burden is on the Claimant to establish that the land wascapable of fetching higher market value. Duty of the Court is toscrutinise and the objective assessment of evidence tendered by theparties and fix fair, reasonable and adequate market value which is aquestion of fact depending on the evidence adduced. Holding that itis the paramount duty of the Courts to assess the evidence tenderedby the parties on proper consideration in correct perspective, in(1997) 6 SCC 41 [Special Deputy Collector and another v. KurraSambasiva Rao and others], the Supreme Court held as under:-"6. ...... Burden of proof is always on the claimants toprove by adduction of cogent and acceptable evidence that https://hcservices.ecourts.gov.in/hcservices/ the lands are capable of fetching higher compensationthan what is determined by the Land Acquisition Officer,which is only an offer. If the award is accepted withoutprotest, it binds the parties. It is the bounden duty ofthe court to evaluate the evidence on the basis of thehuman conduct, even if no rebuttal evidence is producedby the Land Acquisition Officer, to assess the marketvalue applying the relevant tests laid down by this Courtin beadroll of decisions. In Periar and PareekanniRubbers Ltd. v. State of kerala [(1991) 4 SCC 195], thisCourt considered the entire case-law as on that date, onthe principle of determination of market value and therelevant test laid in that behalf. The burden of proofthat the amount awarded by the Land AcquisitionOfficer/Collector is not adequate is always on theclaimant. The burden is to adduce relevant and materialevidence to establish that the acquired lands are capableof fetching higher market value than the amount awardedby the Land Acquisition Officer/Collector or that theLand Acquisition Officer/Collector proceeded on a wrongpremise or applied a wrong principle of law. The objectof the enquiry in a reference under Section 18 of the Actis to bring on record the price which the land underacquisition was capable of fetching in the open market ason the date of the notification, income derived orderivable from or any other special distinctive featurewhich the land is possessed of and the sale transactionsin respect of lands covered by the same notification areall relevant factors to be taken into consideration indetermining the market value. It is, therefore, theparamount duty of the courts of facts to subject theevidence to very close scrutiny, objectively in correctperspective to arrive at adequate and reasonable marketvalue. The attending facts and circumstances in eachcase would furnish guidance to arrive at the market valueof the acquired lands. It is equally relevant toconsider the neighbourhood lands as are possessed ofsimilar potentiality or any advantageous features or anyspecial circumstances available in each case. The Courtis required to take into account all the relevantconsiderations. The Court is required to keep at theback of its mind that the object of assessment is toarrive at a reasonable and adequate market value of thelands. In that process, though some guesswork isinvolved, feats of imagination should be eschewed andmechanical assessment of the evidence should be avoided.Even in the absence of oral evidence adduced by the LandAcquisition Officer or the beneficiaries the Judges areto draw from their experience the normal human conduct ofthe parties and bona fide and genuine sale transactions https://hcservices.ecourts.gov.in/hcservices/ are guiding star in evaluating the evidence. Misplacedsympathies or undue emphasis solely on the claimants'right to compensation would place very heavy burden onthe public exchequer to which everyone contributes bydirect or indirect taxes."7. Whether fair and reasonable and adequate market valueis always a question of fact depends on the evidenceadduced, circumstantial evidence, and probabilitiesarising in each case. The guiding star or the acid testwould be whether a hypothetical willing vendor wouldoffer the lands and a willing purchaser in normal humanconduct would be willing to buy as a prudent man innormal market conditions prevailing in the open market inthe locality in which the acquired lands are situated ason the date of the notification under Section 4(1) of theAct; but not an anxious buyer dealing at arm's lengthwith throw-away price, nor facade of sale or fictitioussales brought about in quick succession or otherwise toinflate the market value. The Judge should sit in thearmchair of the said willing buyer and seek an answer tothe question whether in the given set of circumstances asa prudent buyer he would offer the same market valuewhich the court proposed to fix for the acquired lands inthe available conditions. The court is, therefore,enjoined with the bounden duty of public function andjudicial dispensation in determination of the marketvalue of the acquired land and compulsory acquisition........11. It would thus be settled law that the Court isenjoined to determine the market value on an objectiveassessment of the conditions prevailing in the openmarket, the nature of the user of the land to which theland was put on the date of the notification, thesituation of the land, the income derived therefrom andall other relevant attending circumstances. The marketvalue so determined should be just, adequate andreasonable. In other words, it must be just equivalentto what the land is capable of fetching in the openmarket from a willing and prudent buyer. Therefore, theCourt is required to sit in the armchair of a bona fidewilling and prudent purchaser in the open market andseek an answer to the question whether in the conditionsprevailing in the market he would offer the same marketvalue as the Court has proposed.56. Comparable instances:- In AIR 2008 SC 399 (Lucknow Development Authority v.Krishna Gopal Lahori and others), the Supreme Court highlighted theaspects for taking as comparable sales as under:-"18. It can be broadly stated that the element of https://hcservices.ecourts.gov.in/hcservices/ speculation is reduced to minimum if the underlyingprinciples of fixation of market value with reference tocomparable sales are made:(i) when sale is within a reasonable time of the dateof notification under Section 4(1):(ii) it should be a bona fide transaction;(iii) it should be of the land acquired or of the landadjacent to the land acquired; and(iv) it should possess similar advantages.19. It is only when these factors are present, it canmerit a consideration as a comparable case [See TheSpecial Land Acquisition Officer, Bangalore v.T.Adinarayan Setty (AIR 1959 SC 429).20.These aspects have been highlighted in RavinderNarain and another v. Union of India (2003 (4) SCC 481).57. The best evidence of the value of property are the saletransactions in respect of the acquired land to which the claimanthimself is a party; the time at which the property comes to be sold;the purpose for which it is sold; nature of the consideration; andthe manner in which the transaction came to be brought out. They areall relevant factors. In the absence of such a sale deed relating tothe acquired land, the sale transactions relating to the neighbouringlands in the vicinity of the acquired land have to be taken intoconsideration. In that case, the features required to be presentare: it must be within a reasonable time of the date of thenotification; it must be a bona fide transaction; it should be a saleof land similar to the land acquired or land adjacent to the landacquired; and it should possess similar advantageous features. Theseare relevant features to be taken into consideration to prove themarket value of the acquired land as on the date of the notificationpublished under Section 4(1) of the Act. This would be establishedby examining either the vendor or the vendee. If it is proved thatthey are not available, the scribe of the document may also beexamined in that behalf. Section 51-A of the Act only dispenses withthe production of the original sale deed and directs to receivecertified copy for the reason that parties to the sale transactionwould be reluctant to part with the original sale deed sinceacquisition proceedings would take long time before award of thecompensation attains finality and in the meanwhile the owner of thesale deed is precluded from using the same for other purposes vis-a-vis this land. The marking of the certified copy per se is notadmissible in evidence unless it is duly proved and the witnesses,viz., the vendor or the vendee, are examined. This principle hasbeen repeated in a catena of decisions of the Supreme Court.58. Large extent of land acquired - rate of small plot cannotbe the basis:- Where large area is the subject matter of acquisition,rate at which small plots are sold cannot be said to be a safe https://hcservices.ecourts.gov.in/hcservices/ criteria. In this context, reference may be made to the decisions ofthe Supreme Court in AIR 1971 SC 2015 [The Collector of Lakhimpur v.Bhuban Chandra Dutta]; AIR 1977 SC 1560 [Prithvi Raj Taneja (dead) byLRs. v. The State of Madhya Pradesh and another]; AIR 1984 SC 892[Kausalya Devi Bogra and others v. Land Acquisition Officer,Aurangabad and another] and (2008) 2 SCC 568 [Atma Singh v. State ofHaryana].59. It cannot, however, be laid down as an absolute propositionthat the rates fixed for the small plots cannot be the basis forfixation of the rate. For example, where there is no other materialit may in appropriate cases be open to the adjudicating Court to makecomparison of the prices paid for small plots of land. However, insuch cases necessary deductions/adjustments have to be made whiledetermining the prices [See AIR 2008 SC 399 (Lucknow DevelopmentAuthority v. Krishna Gopal Lahori and others].60. Deduction towards Development charges:- Learned Additional Solicitor General and learned SpecialGovernment Pleader submitted that Reference Court has failed to givededuction towards development charges. Placing reliance upon (2009)5 MLJ 2 [Special Tahsildar, Neighbourhood Scheme, Erode, ErodeDistrict v. Jaganathan Gounder and another], Mr.Ravindran, learnedAdditional Solicitor General and Mr.Ravi, learned Special GovernmentPleader submitted that 40% deduction should be made towardsdevelopment cost and 20% on account of small size of plot taken asbasis to arrive at the market value.61. Reiterating the settled principles regarding deductions, inAtma Singh's case, the Supreme Court held as under;-"13. The reasons given for the principle that pricefetched for small plots cannot form safe basis forvaluation of large tracts of land, according to casesreferred to above, are that substantial area is used fordevelopment of sites like laying out roads, drains,sewers, water and electricity lines and other civicamenities. Expenses are so incurred in providing thesebasic amenities. That apart, it takes considerable periodin carving out the roads making sewers and drains andwaiting for the purchasers. Meanwhile, the invested moneyis blocked up and the return on the investment flows aftera considerable period of time. In order to make up forthe area of land which is used in providing civicamenities and the waiting period during which the capitalof the entrepreneur gets locked up, a deduction from 20%onward, depending upon the facts of each case, is made."62. The Supreme Court in Atma Singh v. State of Haryana [(2008)3 MLJ 806 (SC)] referred to an earlier decision relating to deductiontowards development charges, in Bhagwathula Samanna v. Special https://hcservices.ecourts.gov.in/hcservices/ Tahsildar & Land Acquisition Officer, AIR 1991 SC 2298 : (1991) 4 SCC506 : (1992) 1 MLJ 9, wherein it was held as follows:-"9. ..... In fixing the market value of a large propertyon the basis of a sale transaction for smaller property,generally a deduction is given taking into considerationthe expenses required for development of the larger tractto make smaller plots within that area in order to comparewith the small plots dealt with under the saletransaction. However, in applying this principle ofdeduction it is necessary to consider all relevant facts.It is not the extent of the area covered under theacquisition which is the only relevant factor. If smallerarea within the large tract is already developed andsituated in an advantageous position suitable for buildingpurposes and have all amenities such as roads, drainage,electricity, communications, etc. then the principle ofdeduction simply for the reason that it is part of thelarge tract acquired, may not be justified."63. The principle of deduction was elaborately considered by theSupreme Court in (2009) 8 SCC 979 [Subh Ram and others v. HaryanaState and another]. Referring to various decisions, the SupremeCourt held as under:-"12.2. In Chimanlal Hargovinddas v. Special LandAcquisition Officer, AIR 1988 SC 1652 : 1988 (3) SCC751, this Court held:" ..... a large block of land will have to be developedby preparing a lay out, carving out roads, leaving openspace, plotting out smaller plots, waiting forpurchasers (meanwhile the invested money will beblocked up) and the hazards of an enterpreneur. Thefactor can be discounted by making a deduction by wayof an allowance at an appropriate rate rangingapproximately, between 20% to 50% to account for landrequired to be set apart for carving out lands andplotting out small plots. The discounting will, tosome extent – also depend on whether it is a rural areaor urban area, whether building activity is picking up,and whether waiting period during which the capital ofentrepreneur would be locked up, will be longer orshorter and the attendant hazards."It should be noted that deduction of 20% to 50% referredto therein is only in regard to the land to be earmarkedfor roads, community areas, etc. and does not refer tothe further deduction towards the expenses ofdevelopment.12.3. In K.S.Shivadevamma v. Asstt. Commissioner & LandAcquisition Officer, AIR 1966 SC 2886 : 1996 (2) SCC 62,this Court held:"It is then contended that 54% is not automatic but https://hcservices.ecourts.gov.in/hcservices/ depends upon the nature of the development and the stageof development. We are inclined to agree with thelearned counsel that the extent of deduction dependsupon development need in each case. Under the BuildingRules 53% of land is required to be left out. ThisCourt has laid as a general rule that for laying theroads and other amenities 33 – 1/3% is required to bededucted. Where the development has already takenplace, appropriate deduction needs to be made. In thiscase, we do not find any development had taken place ason that date. When we are determining compensationunder Section 23(1), as on the date of notificationunder Section 4(1), we have to consider the situation ofthe land development, if already made, and otherrelevant facts as on that date. No doubt, the landpossessed potential value, but no development had takenplace as on the date. In view of the obligation on thepart of the owner to hand over the land to the CityImprovement Trust for roads and for other amenities andhis requirement to expend money for laying the roads,water supply mains, electricity, etc., the deduction of53% and further deduction towards development charges @ 33 – 1/3%, as ordered by the High Court was notillegal."64. In (1996) 2 SCC 62 [K.S.Shivadevamma v. AssistantCommissioner & Land Acquisition Officer], the Supreme Court held asfollows:-"It is then contended that 54% is not automatic butdepends upon the nature of the development and the stageof development. We are inclined to agree with thelearned counsel that the extent of deduction dependsupon development need in each case. Under the BuildingRules 53% of land is required to be left out. ThisCourt has laid as a general rule that for laying theroads and other amenities 33-1/3% is required to bededucted. Where the development has already taken lace,appropriate deduction needs to be made. In this case,we do not find any development had taken place as onthat date. When we are determining compensation underSection 23(1), as on the date of notification underSection 4(1), we have to consider the situation of theland development, if already made, and other relevantfacts as on that date. No doubt, the land possessedpotential value, but no development had taken place ason the date. In view of the obligation on the part ofthe owner to hand over the land to the City ImprovementTrust for roads and for other amenities and his https://hcservices.ecourts.gov.in/hcservices/ requirement to expend money for laying the roads, watersupply mains, electricity etc., the deduction of 53% andfurther deduction towards development charges @ 33 –1/3% as ordered by the High Court was not illegal."65. Summarising the above principles, we deem it appropriate toissue the following guidelines to the Subordinate Courts whilefixing the market value and determining the compensation:-●Court is enjoined upon the bounden duty of performingpublic function and judicial dispensation indetermination of the market value guided by objectiveassessment.●For determining the market value of the land underacquisition, suitable adjustment has to be made havingregard to the various positive and negative factorsvis-a-vis the land under acquisition by placing the twoin juxtaposition. The positive and negative factorsare as under:-Positive factorsNegative factors(i) smallness of size(i) largeness of area(ii) proximity to aroad distance(ii) situation in theinterior at a from the road(iii) frontage on aroad(iii) narrow strip of landwith very small frontagecompared to depth(iv) nearness todeveloped area(iv) lower level requiringthe depressed portion to befilled up(v) regular shape(v) remoteness fromdeveloped locality(vi) level vis-a-visland under(vi) some specialdisadvantageous acquisitionfactors which would deter apurchaser(vii) special valuefor an owner of anadjoining property towhom it may have somevery special advantage●While taking comparable instances, Courts will have tocarefully analyse the documents whether they areproximate in time and having proximity in situationangle.●When other sale deeds are produced as comparableinstances, Courts will have to carefully examine whetherany willing purchaser would pay the same amount.Comparable instance has to be identified having regard tothe proximity from time angle as well as from proximityfrom situation angle. https://hcservices.ecourts.gov.in/hcservices/ ●Courts will have to carefully examine whether the saledeed produced by the Claimants falls in the line withsteady increase or whether there is a sudden spurt inincrease of the value. ●Courts will have to carefully examine the sale deed toascertain whether the sale deed is for a fancy price. Itis a matter of common knowledge that before the lands areacquired for public purpose/scheme, steps are taken wellin advance i.e. Officials visiting the locality,measuring the property, testing the quality of the soiland other relevant factors. The news of acquisitionspreads like wild fire. ●Reference Court to assess reasonable compensation and itis the duty of the Court to avoid burden on publicexchequer. ●Courts cannot be oblivious of the tendency of land owners/ claimants to create documents at a fancy price so as toderive maximum benefit of compensation. Courts will haveto see that there is neither unjust enrichment nor thereis any undue deprivation of the lands. ●Any document executed in respect of the lands situatedprior to issuance of notification under Sec.4(1) of theAct is to be taken into consideration. ●Courts will have to carefully examine particularly thesale deed of small extent as to whether the sale deed wasbrought into existence for a fancy price.●When the sale deed referring to smaller tract is producedas comparable instance, Court will have to bear in mindthat a large block of land will have to be developedpreparing a layout plan, carving out roads, leaving openspaces, plotting out smaller plots, waiting forpurchasers, deduction of 20% to 50% is to be made and inappropriate case even higher percentage of deduction hasto be made. The Supreme Court has laid down a generalrule that for laying roads, water supply mains,electricity and other amenities, 33 – 1/3% required to bededucted.●Courts will have to make suitable deduction fordevelopment charges like laying down roads, drain,sewers, water and electricity lines.●There cannot be any fixed amount of deduction towardsdevelopment charges, but it varies from place to place,area to area and amount of development which are requiredto be carried out. [See (2008) 3 MLJ 806 (SC) Atma Singhv. State of Haryana; (1991) 4 SCC 506 Bhagwathula Samannav. Special Tahsildar & Land Acquisition Officer].●Reference Court should ensure that apart from the LandAcquisition Officer, the RequisitioningBody/Requisitioning Department has to be impleaded asparty [AIR 1995 SC 1004] and opportunity has to be given https://hcservices.ecourts.gov.in/hcservices/ to the Beneficiary who has to bear the burden of payingcompensation.66. Though, LAOP.No.27/2002 was disposed of by Fast Track CourtNo.III, Namakkal and all other LAOPs were disposed of by theSubordinate Judge, Namakkal, as the common Award was passed inrespect of the subject lands , we are of the view that LAOPNo.27/2002 also has to be heard and disposed of afresh by theSubordinate Judge, Namakkal.67. CONCLUSIONS:- In the result, the Judgments of the Reference Court in LAOPNos.3,4,6,9,10,11,12,13/1996 dated 28.04.2000 andLAOP.Nos.15,11,12,13,14/1997 dated 30.09.2002 on the file of Sub-Court, Namakkal and LAOP No.27/2002 dated 02.04.2004 on the file ofFast Track Court No.III, Namakkal respectively are set aside andthese Appeals are allowed and all the LAOPs are ordered to beremitted back to the Reference Court [Sub-Court, Namakkal] for freshdisposal. Reference Court – Sub-Court, Namakkal is directed to implead theProject Director and General Manager, National Highways Authoritiesof India, Ministry of Shipping, Road Transport and Highways, No.10,Kamadhenu Nagar, Karur-639 001 as Respondent inLAOP.Nos.3,4,6,9,10,11,12,13/1996 and LAOP.Nos. 11,12,13,14,15/1997and LAOP.No.27/2002. Reference Court is directed to receive thedocuments filed by National Highways Authorities of India filed inthese Appeals as well as any other documents to be filed by NationalHighways Authorities of India. Reference Court is further directedto afford sufficient opportunity to National Highways Authorities ofIndia and also to Appellants to adduce oral and documentary evidence.The Reference Court is directed to receive the additional documentsfiled by NHAI and other documents to be filed by NHAI and affordopportunity to adduce oral evidence. The Reference Court shall alsoafford opportunity to the Land Acquisition Officer and to theRespondents/Claimants who are already on record to adduce oral anddocumentary evidence if they so desire and consider the matter afreshand pass appropriate orders preferably within a period of six monthsfrom the date of receipt of copy of this Judgment.As per the interim order of the Court, part of the compensationamount was deposited to the credit of respective LAOPs. From out ofthe deposited amount, Claimants have withdrawn part of the amount ofcompensation with security/without security. The amount so withdrawnby the Claimants/Land owners varies in the Petitions. The amount sowithdrawn by the Claimants/Land owners with security/without securityshall be subject to the result of the final order to be passed by theReference Court. The balance compensation amount shall continue toremain in the fixed deposits on reinvestment plan. The securityfurnished by the Claimants is also ordered to be retained. https://hcservices.ecourts.gov.in/hcservices/ All the parties are directed to appear before the ReferenceCourt on 19.04.2010.A.S.No.416/2002:- In view of the conclusions supra, the Appealpreferred by Claimant-Jawahar is dismissed. Since Reference Court is enjoined upon the public function andjudicial dispensation in determining the market value of the acquiredlands by objective assessment, we direct the Registry to place thisJudgment before the Hon'ble The Chief Justice for obtaining necessaryorders for circulating the copy of this Judgment to all the Courtsincluding Civil Judges [Jr Division] in Tamil Nadu and Puducherry fortheir guidance. In view of the remand of the matter and permitting the partiesto adduce additional evidence, all CMPs including Petitions filed forreception of additional documents are closed.In the circumstances of the case, there is no order as to costsin these Appeals.The learned Special Government Pleader (AS) shall be entitled tolegal fee as per Rule 12 of the Legal Practitioners Fee Rules.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarTo1. The Subordinate Judge,Namakkal.2. The Additional District Judge (FTC No.III) Namakkal.3. The Registrar-Judicial,High Court, Madras – to report compliance.4. The Section OfficerF Section, High Court, Madras https://hcservices.ecourts.gov.in/hcservices/ 14 ccs To Mr.P.Wilson, Advocate, SR.Nos.22788 to 22798,22807 & 228098 ccs To Mr.S.Silambanan Associates,SR.22537 to 225391 cc To Mr.R.Karthikeyan, Advocate, SR.226401 cc To Mr.Sarvabhauman Associates, SR.23082 Common Judgment in A.S.Nos. 751, 752, 753, 937, 938, 939, 955, 956 of 2001; A.S.Nos.722, 723, 724, 725, 726 of 2004 & A.S.No.7 of 2006NG, GV(CO)sra 12/04/2010