AGRARIAN REFORMS & LAW

COURSE CODE: 2IE1012

CASE SUMMARY

SEMESTER IX
2019 – 2020

SUBMITTED TO: - NUPUR SINHA MA’AM

SUBMITTED BY: - VISHWAJEET SINGH RANAWAT
( 15BAL118)
 IN THE SUPREME COURT OF INDIA
DATED 11.09.2017
BEFORE THE HON'BLE MR. JUSTICE A.K. SIKRI AND
ASHOK BHUSHAN,
CIVIL APPEAL NOS. 10429-10430 OF 2017 (ARISING OUT OF
SLP (C) NOS. 2354-2355 OF 2017)

BETWEEN:

NARENDA AND ORS.

Vs.
THE STATE OF UTTAR PRADESH AND ORS.

FACTS
The Uttar Pradesh governments vide Notification dated 12th September, 1986 issued Under
Section 4(1) of the Land Acquisition Act, 1894 acquired large tracts from the landowners and
villagers in the Makanpur Paragana Loni village, Tehsil-Dadri, District Ghaziabad, Uttar Pradesh
for planned development of Vaishali.

The Special Land Acquisition Officer on 18th January, 1990 passed the award by determining
the market value at the rate of Rs. 50 per square yard. Dissatisfied by the rates fixed the matter
was further referred to the Additional District Judge, Ghaziabad who by an order dated 19th
April, 1999, increased the rate of compensation from Rs. 50/- per sq. yards to Rs. 90/- per square
yards. Further appeals were filed by the landowners to enhance the compensation. The appellant
however demanded the court to fix the compensation at the rate of Rs. 115/- per sq. yards.

The High court while deciding the first batch of appeals fixed the rate of compensation at Rs.
297 per square yards. In contrary the High Court in the appellant’s case fixed the award at the
rate of Rs. 115/- per sq. yards. The villagers, whose land were acquired subsequently, were given
compensation at the higher rate than the appellants on the basis of reasoning that the court fee
paid by the appellant at a lower rate and the compensation was also demanded at a lower rate.
Thus an appeal through Special leave petition under Art. 136 were preferred in the Supreme
Court against the judgment passed by Allahbad High Court.

ISSUE

I. Whether the High Court can fix two different rate of compensation for lands
acquired via Notification dated 12th September, 1986 issued Under Section 4(1) of
the Land Acquisition Act, 1894?

II. Whether or not compensation a cap on the maximum and minimum rate of
compensation can be fixed by the court irrespective of the claim made by the
landowner?

RULE
The legal provisions dealt in this case are: -

1. Section 4(1), Land Acquisition Act, 1894

Whenever it appears appropriate to the Government that land in any locality [ is needed or ]
is likely to be needed for any public purpose, a notification to that effect shall be published in
the Official Gazette, and the Collector shall cause public notice of the substance of such
notification to be given at convenient places in the said locality.

2. Section 6(1), Land Acquisition Act, 1894

Whenever it appears to the L.G that any particular land is needed for public purpose or for a
Company, a declaration shall be made to that effect under the signature of a Secretary to such
Government or of some officer duly authorized to certify its orders.

3. Section 25, Land Acquisition Act, 1894

Rules as to amount of compensation:-
(1) When the applicant has made a claim to compensation, pursuant to any notice given
under section 9, the amount awarded to him by the Court shall not exceed the amount so
claimed or be less than the amount awarded by the Collector under section 11.
(2) When the applicant has refused to make such claim or has omitted without sufficient
reason (to be allowed by the Judge) to make such claim, the amount awarded by the
Court shall in no case exceed the amount awarded by the Collector.
 (3) When the applicant has omitted for a sufficient reason (to be allowed by the Judge) to
make such claim, the amount awarded to him by the Court shall not less than, and may
exceed, the amount awarded by the Collector.

ANALYSIS
I. Whether the High Court can fix two different rate of compensation for lands
acquired via notification dated 12th September, 1986 issued Under Section 4(1) of
the Land Acquisition Act, 1894?

No, High Court can’t fix two different rates of compensation for land acquired via a same
notification dated 12th September, 1986 issued Under Section 4(1) of the Land
Acquisition Act, 1894. In the given case the High Court In contrary the High Court in
the appellant’s case fixed the award at the rate of Rs. 115/- per sq. yards. The villagers,
whose land were acquired subsequently, were given compensation at the higher rate than
the appellants on the basis of reasoning that the court fee paid by the appellant at a lower
rate and the compensation was also demanded at a lower rate. The judgment of the High
Court was arbitrary and is violates Article 14 of the Constitution of India. The order laid
down by the court is against the spirit of the act as it prevents the poor farmers from
getting fair and equitable compensation.

II. Whether or not compensation a cap on the maximum and minimum rate of
compensation can be fixed by the court irrespective of the claim made by the
landowner?

The High Court while awarding the final compensation to the appellant relied on the
compensation demanded by the appellants that is Rs. 115 per sq. yards. The HC relied on
the reasoning that the court fee paid by the appellant at a lower rate with respect to the
compensation demanded. In Ashok Kumar and Anr. v. State of Haryana1 SC has
stated that court has to award just and fair compensation taking into account true market
value and other relevant factors, irrespective of claim made by the land owner and there
is no cap on the maximum rate of compensation that can be awarded by the court and the
courts are not restricted to awarding only that amount that has been claimed by the land
owners/applicants in their application before it.
As per the amendment in the section 25 of the act the amount of compensation awarded
by Court not to be lower than the amount awarded by the Collector-The amount of
compensation awarded by the Court shall not be less than the amount awarded by the
Collector under Section 11. Thus the amount of compensation that a court can award is

1
(2016) 4 SCC 544
 no longer restricted to the amount claimed by the applicant. It is the duty of the Court to
award just and fair compensation taking into consideration the true market value and
other relevant factors, irrespective of the claim made by the owner.
In Bhag Singh v. Union Territory of Chandigarh2 the court stated that a fair
compensation should be provided to the owner of the acquired land irrespective of the
claim made by the owner and the court should also ensure that in some situations court
can ward compensation the amount higher than claimed may be awarded to the claimant.

CONCLUSION
The land acquired for public purpose should get fair compensation. Once a particular rate of
compensation is judicially determined, which becomes a fair compensation benefit has to be
given to those who are not able to approach the court. The mere fact that the compensation which
was claimed by some of the villagers was at lesser rate than the compensation which is
ultimately determined to be fair compensation, should not be a ground to deny such persons
appropriate and fair compensation on the ground that they claimed compensation at a lesser rate.
In Ashok Kumar and Anr. v. State of Haryana 3 SC has stated similar principle that court has
to award just and fair compensation taking into account true market value and other relevant
factors, irrespective of claim made by the land owner and there is no cap on the maximum rate of
compensation that can be awarded by the court and the courts are not restricted to awarding only
that amount that has been claimed by the land owners/applicants in their application before it.
The true objective of the agricultural reforms is to make farmers self-sufficient and to address the
socio-economic inequalities existing in India. The amended section 25 of the Land Acquisition
act removed the restriction the maximum amount of compensation that can be provided in the
act. Thus it is necessary to cater the needs of farmers due to growing inflation and cost of living
that relevant market conditions.

2
(1985) 3 SCC 737
3
Supra note 1
 IN THE SUPREME COURT OF INDIA
DECIDED ON: 16.04.2018
CIVIL APPEAL NOS. 2294-2295 OF 2011
BETWEEN:

MANIMEGALAI
VS.
THE SPECIAL TAHSILDAR (LAND ACQUISITION OFFICER)
ADI DRAVIDAR WELFARE

FACTS
 The Govt. of Tamil Nadu vide through its notification dated 15.09.1993 Under Section
4(1) of the Land Acquisition Act, 1894 acquired 10.62 acres of land for the purpose of
purpose of providing house sites to 250 landless poor Adi Dravidars in Acharapakkam
Village, Madurandagam Taluk, Chengai, MGR District, Madras.
 The land belonging to the appellant having survey no. 300/2A2, 300/3, 302/1A, 302/4,
317/1B2, 302/2B2B and 320/2C2 were acquired and an award of an Award dated
22.03.1995, determining a sum of Rs. 400/- per cent as compensation to the Appellant
herein.
 Being aggravated by the compensation amount, the appellant preferred reference under
section 18, seeking a compensation market value at the rate of 20,000 Rs per square per
cent. The learned subordinate Judge, granted compensation at the rate of Rs. 2,500/- per
cent together with 30% solatium and 12% additional amount from the date of issue of
Notification dated 15.09.1993.
 The Respondent being aggrieved by order appealed to the High Court, The High Court
via its order thus reduced the amount of compensation granted by learned subordinate
Judge from Rs. 2,500/- to Rs. 1,670/- with solatium and other statutory benefits.
 Thus aggrieved by the judgment and order of the High Court the Appellant moved to the
SC via special leave petition.
ISSUE
I. Whether the The Land Acquisition Officer was correct in adjusting Rs. 400/- per cent as
compensation for the land acquired via notification dated 15.09.1993 Under Section 4(1)
of the Land Acquisition Act, 1894?
II. Whether the High Court was correct in decreasing the amount of compensation from Rs.
2500 per cent to Rs. 1670 per cent?

RULE
1. Section 4(1), Land Acquisition Act, 1894
Whenever it appears appropriate to the Government that land in any locality [ is needed
or ] is likely to be needed for any public purpose, a notification to that effect shall be
published in the Official Gazette, and the Collector shall cause public notice of the
substance of such notification to be given at convenient places in the said locality.

2. 5 A(1) Hearing of objections:-

(1) Any person interested in any land which has been notified under section 4, Sub-
section (1) as being needed or likely to be needed for a public purpose or for a Company
may, within thirty days after the issue of the notification, object to the acquisition of the
land or of any land in the locality, as the case may be.

3. 18(1) .Reference to Court:-

Any person interested who has not accepted the award may, be written application to the
Collector, require that the matter be referred by the Collector for the determination of the
Court, whether his objection be to the measurement of the land, the amount of the
compensation, the persons to whom it is payable, or the appropriate of the compensation
among the persons interested

ANALYSIS
Whether the The Land Acquisition Officer was justified in adjusting Rs. 400/- per cent as
compensation for the land acquired via notification dated 15.09.1993 Under Section 4(1) of
the Land Acquisition Act, 1894?

The Land Acquisition officer have seems to ignored the several factors, including the nature of
the land, its present use and its capacity for a higher potential, its precise location in relation to
adjoining land, the use to which neighboring land was put to use, the impact of such use on the
land acquired, and so on while deciding the compensation for the land. The sole basis for
determining the value was based on a sale herein an extent of 0.26 acres had been sold in Survey
No. 294/A/1-B 16 affected on 15.04.1993. The sale deed cannot be the sole basis of
compensation to be awarded for was grossly inadequate and abnormally low and did not reflect
the correct market value of the lands and that the correct market value of the lands acquired was
not less than Rs. 20,000/- per cent. Since the acquired lands are situated in different survey
numbers, different quantum of compensation has been awarded for the lands so acquired. The
general principles which have been followed in assessing the compensation payable in all these
matters are the location of the lands sought to be acquired, their potential for development, their
proximity to areas which are already developed and the exorbitant rise in the value of the lands
over the years. As per the judgment laid down by the Learned subordinate Judge it was stated
that the land was situated between the National Highways and railway tracks and there were two
sale transactions where land adjoining National Highway at the rate of Rs. 4,893/- per cent and
prior to the notification dated dated 15.09.1993. Thus the land of appellant situated near the
national highway has higher potential will fetch good market value than the lands which are
situated beyond the road.

II. Whether the High Court was correct in decreasing the amount of compensation from
Rs. 2500 per cent to Rs. 1670 per cent?

There was no basis in reducing the per cent rate of compensation by the High court as it was
already established by the appellant previously in court of Learned subordinate Judge that the
land was situated between the National Highway and railway track. In admission laid down
before the subordinate judge the Judge it was stated that the land was situated between the
National Highways and railway tracks and there were two sale transactions where land adjoining
National Highway at the rate of Rs. 4,893/- per cent and prior to the notification dated
15.09.1993. Thus the land of appellant situated near the national highway has higher potential
will fetch good market value than the lands which are situated beyond the road. Thus High court
was wrong in it approach in reducing the compensation amount from Rs. 2500 to 1670.

CONCLUSION
While acquiring land the purpose to acquire the land should be clear and transparent. There are
various factors that need to be kept in mind while acquiring the land like future developmental
possibilities, proximity to urban centers and markets. The land should be properly surveyed
before the acquisition and all the transactions with respect to similar lands nearby should be
clearly examined before acquisition. The Land acquisition officer should not consider any
transaction in isolation to determine the compensation and should always determine the veracity
of a transaction and sale deed keeping in mind the notification. Sale deeds should always be
looked on grain of salt. As majority of them are often devalued for the purpose of saving stamp
duty are not the correct parameter to assess market value.
 IN THE SUPREME COURT OF INDIA
DECIDED ON: 25.07.2018
CIVIL APPEAL NO. 6986-6987 OF 2018
BETWEEN:

UNION OF INDIA
VERSUS

DYAGALA DEVAMMA & ORS.

FACTS:
The government of Andhra Pradesh through its notification dated 12.11.2003 under Section 4
of the Land Acquisition Act, 1894 acquired the land measuring about 101- 00 acres for the
purpose of aying new broad gauge single railway line from Karimnagar to Jagitial. The LAO
under section 11 of the act determined the market value of the acquired land at the rate
of Rs.1,30,000/- per acre for wet lands" and Rs.1,24,000/- per acre for dry lands.

Feeling aggrieved the appellants sought reference under Section 18 of the Act. The Reference
court determined the market value at Rs.21, 29,600/− per acre uniformly. The reference court
however deducted 50% as developmental charges and adjusted the market value at Rs.10, 64,800
per acre. The appellant filed cross objections where else the Railways filed Cross appeal in the
High Court which further adjusted the compensation amount at Rs.15,97,200/ per acre by
reducing the deductions in the developmental charges at the rate of 25%. Therefore Appellant
Railway filed special leave petition under Article 136 of Constitution of India.

ISSUE
I. What are different factors that determine the market value of the land and
developmental charges?
II. Whether the reduction in developmental charges from 50% to 25% by the High
Court was justified?
RULE
1. Section 4(1), Land Acquisition Act, 1894

Whenever it appears appropriate to the Government that land in any locality [ is needed or ] is
likely to be needed for any public purpose, a notification to that effect shall be published in the
Official Gazette, and the Collector shall cause public notice of the substance of such notification
to be given at convenient places in the said locality.

2. Section 5 A(1) Hearing of objections:-

(1) Any person interested in any land which has been notified under section 4, Sub-section (1) as
being needed or likely to be needed for a public purpose or for a Company may, within thirty
days after the issue of the notification, object to the acquisition of the land or of any land in the
locality, as the case may be.

3. Section 18(1) .Reference to Court:-

Any person interested who has not accepted the award may, be written application to the
Collector, require that the matter be referred by the Collector for the determination of the Court,
whether his objection be to the measurement of the land, the amount of the compensation, the
persons to whom it is payable, or the appropriate of the compensation among the persons
interested

ANALYSIS
What are different factors that determine the market value of the land and developmental
charges?

In Chimanlal Hargovinddas vs Special Land Acquisition Officer4 court laid down the
following guidelines for the purpose determining the market value of the land by the Land
Acquisition officer under section 4 of the Land Acquisition act, 1894

 The determination has to be made as per the date of publication of the notification as per
the section 4 of the Land acquisitions act, 1894. The LOA has to assume that the vendor
is willing to sell the land at a reasonable price.

4
(1988) 3 SCC 75
  The court has to correlate the market value reflected in the most comparable instance
which provides the index of market value.
 The instances need to be genuine and post notification instances can also be taken into
account if they are proximate and genuine.
 Norm of the market should also be taken into account.
 A balance−sheet of plus and minus factors may be drawn for this purpose and the
relevant factors may be evaluated in terms of price variation as a prudent purchaser
would do.

PLUS FACTORS MINUS FACTORS

smallness of size largeness of area

proximity to a road situation in the interior at a distance from

the road

frontage on a road narrow strip of land with very small

frontage compared to depth

nearness to developed area lower level requiring the depressed portion to be filled
up

regular shape remoteness from developed locality

level vis−à−vis land u some special acquisition disadvantageous

factor which would deter a purchaser special
value for

 The Court should also take into consideration the potentiality of the acquired land
apart from other relevant considerations.

Whether the reduction in developmental charges from 50% to 25% by the High Court was
justified?

No, the High Court was not justified in reducing the developmental charges from 50% to 25% as
the land acquired lacked serious avenues for development. The sale deed was for a small site and
it was situated away from the road. The land acquired in question is a large chunk of land (101
acres approx.. the respondent have not filed any exemplar sale deed relating to large pieces of
land sold in acres to prove the market value of the acquired land. And it also lacked all the
important factors in sale deed as covered in the case In Chimanlal Hargovinddas vs Special Land
Acquisition Officer, Poona5. Thus a lot of money had to be spent on the development of land
therefore it was necessary to deduct developmental charges and therefore the High Court was not
justified in the reduction of developmental rate.

CONCLUSION
Development cost or development charges are expenses bearded by the State for the purpose of
development of land post acquisition to make it suitable for the purpose it was acquired. The
development cost should be assessed based upon the developmental needs of the project and
taking in mind the overall market value of the land. A high developmental charge without
assessing the market value of the land can jeopardize the claimant’s right to get a fair
compensation. In Chimanlal Hargovinddas vs Special Land Acquisition6 Officer the SC has
laid down positive and negative factors that could determine the overall development charges. In
the given case the High Court ignored all the important factors laid down thus decreased the
development charges without reasoning and evidence. Thus a proper assessment should be made
while determining the developmental charges.

5
Ibid
6
ibid
 IN THE SUPREME COURT OF INDIA
DECIDED ON 11.05.2018
CIVIL APPEAL NO. 5008 OF 2018
BETWEEN:

BILQUIS
VS
THE STATE OF MAHARASHTRA

FACTS
The government of Maharashtra through its notification dated 13.11.1986 acquired 9 Hectares
and 20 Ares of village Pimpri Mokhed, Taluka Karanja, District Akola, Maharashtra for the
purpose of construction of ‘Percolation Tank’ at village Pimpri Mokhad Section 4 of the Land
Acquisition Act, 1894. The LAO granting compensation at the rate of Rs.9,500/- per hectare for
the dry land and Rs.12,500/- for irrigated land which was later challenged by the appellant under
section 18 of the Land Acquisition act, 1894 seeking enhanced compensation with salutary
benefits.

The Reference court enhanced compensation to the tune of Rs.1,62,500/- per hectare for the land,
and Rs.1200/- per orange tree (325 orange trees) totaling to Rs.3,90,000/. And also awarded
Rs.10, 000/ for barbed fencing babul trees and underground pipe line etc., apart from other
statutory benefits.

The High court further reduced to Rs.50,000/- per hectare for irrigated land and Rs.9,500/- per
hectare for dry land and also set aside the other statutory benefits with respect to Orange trees
and barbed fencing. The High court relied on Capitalization method and also on its own
previous judgment dated 14.08.2008 although there was no proof to show that the judgment was
relating to the lands acquired under the very notification dated 13.11.1986 under which the land
in question is acquired.
ISSUE
I. Whether the High Court was justified in its approach in setting aside the
compensation for orange trees and barbed wires?
II. Whether the High Court was justified in assessing the overall compensation per
hectare based on the total irrigated land?

RULE:

1. Section 4(1), Land Acquisition Act, 1894

Whenever it appears appropriate to the Government that land in any locality [ is needed or ] is
likely to be needed for any public purpose, a notification to that effect shall be published in the
Official Gazette, and the Collector shall cause public notice of the substance of such notification
to be given at convenient places in the said locality.

2. Section 5 A(1) Hearing of objections:-

(1) Any person interested in any land which has been notified under section 4, Sub-section (1) as
being needed or likely to be needed for a public purpose or for a Company may, within thirty
days after the issue of the notification, object to the acquisition of the land or of any land in the
locality, as the case may be.

3. Section 18(1) .Reference to Court:-

Any person interested who has not accepted the award may, be written application to the
Collector, require that the matter be referred by the Collector for the determination of the Court,
whether his objection be to the measurement of the land, the amount of the compensation, the
persons to whom it is payable, or the appropriate of the compensation among the persons
interested

ANALYSIS
I. Whether the High Court was justified in its approach in setting aside the
compensation for orange trees and barbed wires?

No, The High Court was not justified in setting aside the compensation for Orange
trees and barbed wires. The High Court has overlooked the material on record and
evidence adduced by the appellants and the Tehsildar’s report. As per the report there
were about 325 orange trees which were planted in the year 1981-1982. The records
of the acquisition including the panchanama by the authorities at the time of taking
possession clearly reveal that there were more than 300-325 orange trees which were
about 4 to 5 years old. The orange trees were fruit yielding that the income from
orange trees was Rs.1, 50,000/- per annum. Although the Reference court was not
correct in taking Rs. 1200 as compensation for each tree and 20 years period as
multiplier a period for deciding compensation for orange trees as the trees were only
5 years old. Thus therefore, the total compensation in respect of 325 orange trees
would be Rs.1, 95,000/- (600 x 325 = 1, 95,000

II. Whether the High Court was justified in assessing the overall compensation per
hectare based on the total irrigated land?

The High Court has ignored the higher revenue assessment of the land of the claimant.
The Special Land Acquisition Officer has shown 4 to 6 hectares of the land in question as
irrigated land, but the panchanama, prepared by the Tahsildar shows 8 hectares of the
land of the claimant as irrigated land. Thus, it is clear that as on the date of taking
possession, 85%-90% of the acquired land was irrigated land. The land has abundant
source of water and was irrigated through a 3 HP motor and a variety of crops were
cultivated on the land such as Chilli, Tur crop and Moong and there was barbed fencing
around the whole land.
The High court’s reasoning was based on the ‘Talathi’ statement which relied upon the
assessment report of the year 1927 and no revenue assessments from the year 1988 were
presented by the State. There was also ample record to show that the land was s situated
at a distance of five kilometers from Karanja town, which is having about a population of
50,000 to 60,000, and is having an Agriculture Produce market.

CONCLUSION

There was a grave error on the part of the Land Acquisition officer and the High Court by
neglecting the orange plants as well as the barriers while assessing the final compensation
that is to be paid to the farmers. As per the Tehsildar’s report all the orange plants were
fruit bearing and thus acquiring the land without paying compensation would be a hard
setback for the farmers and the cultivators as there hard earned labour would have gone
in vain. The state should asses the final compensation taking look at all the infrastructure
on the land. The High Court reasoning was based upon the taalif’s assessment report
from the year 1927 and not prior to the notification. Thus if 1927 report would be
considered it would have jeopardized the claimant’s right and surely would be against the
basic principle of fair compensation. The High court and LAO also committed grave
error by not assessing the total irrigated land and thus wrongly computed the final award.