[Land Acquisition] Sale Deed Relevant Factor For Determining Just & Fair Compensation: Himachal Pradesh High Court

The Himachal Pradesh High Court on Monday ruled that for determining the value of a piece land, both transactions, i.e. acquisition of land vide Award as well as sale deed are relevant for determining the value of land and, therefore, for arriving at just and fair value of land, it would be appropriate to consider both these transactions and determine the value of land accordingly.

The pronouncement to this effect was made by a bench comprising Justice Vivek Singh Thakur while hearing an appeal preferred under Section 54 of Land Acquisition Act, 1894 against an award passed by Additional District Judge, Solan in a Land Reference Petition whereby it had enhanced the value of land at uniform rate at the rate of Rs.3,60,000/- per bigha, irrespective of its classification and category, whereas Land Acquisition Collector had determined the value of land ranging from Rs.15,000/- to Rs.1,00,000/- per bigha on the basis of classification and category of land.

The appellants submitted that Award No.4 of 2000 was in respect of land acquired under the same notification issued under Section 4 of Act wherein value of land was determined at the rate of Rs.2 lac per bigha for cultivated land and Rs.50,000/- per bigha for uncultivated land and the said fact has been stated in examination-in-chief by witness Shyam Singh Pal, Sub Divisional Kanungo examined by land owners.

Appellants contended that the Reference Court has failed to take into consideration the value so determined in the Award belonging to the same village, acquired under the same notification with regard to other acquisitions.

Per contra, the respondents argued that Award No. 4 of 2000 was a consent award and therefore, fair value of compensation was not determined during adjudication of the said Award but it was agreed value of land between two parties which cannot be taken into consideration for determining the value of land for calculating the compensation payable to land owners in present appeal.

After considering the rival contentions the bench noted that in Award No. 4 of 2000, two different values were settled between the parties ie Rs.2 lacs value was determined for cultivated land, whereas Rs.50,000/- was determined for uncultivated land.

Observing that value of land in cases of acquisition like present one, is to be determined at uniform rate, irrespective of classification and category of land, the court said that for that purpose, highest value of land, as determined by Land Acquisition Collector, can be made basis for determining value of land for all kinds of land irrespective of its classification and category.

"Therefore, for taking into consideration value of land determined in Award No. 4 of 2000, highest value i.e. Rs.2 lacs per bigha can be taken into consideration along with an other relevant exemplar deed i.e. sale deed Ext.PW4/A to determine the value of land for calculating the compensation", the bench added.

While noted that a sale deed dated August 27 1997 whereby land measuring 1-3 bighas was sold for consideration of Rs.3,56,500/- and was executed within a period of five months before issuance of notification under Section 4 of the Act, therefore, the court said that the sale deed has rightly been considered by Reference Court as a relevant transaction for determining the compensation.

Expounding the law on the determination of market value of land for acquisition, the court observed that it is the purpose for which the land is acquired which is relevant and not nature and classification of land and where nature and classification of the land has no relevance for purpose of acquisition, market value of the land is to be determined as a single unit irrespective of nature and classification of the land. In such a case, uniform rate to all kinds of land under acquisition as a single unit irrespective of their nature and classification is to be awarded, it underscored.

Acknowledging the fact that in the consent award value of land is not determined on merits, the court said but definitely it is a transaction between two parties with respect to transfer of land for compensation payable as per agreed value of land. It is like a sale deed where two parties negotiate between them for sale and purchase of land for a consideration and, therefore, it is also a relevant document for determining the value of compensation payable to other land owners. The Reference Court has failed to take note of this transaction, the bench pointed.

Observing that for determining the value of land both transactions, i.e. acquisition of land vide Award No.4 of 2000 as well as sale deed are relevant for determining the value of land, the court said that it would be appropriate to consider both these transactions and then determine the value of land accordingly. Total of Rs. 2 lacs as Award amount and Rs.3,56,500 as per sale deed becomes Rs.5,56,500/- and mean thereof would be 2,78,250/-, the bench calculated.

The bench further observed that since Award 4 of 2000 has not been proved on record by either party but the facts regarding said Award pertaining to classification of land and value consented by land owners for two different kinds of land has come on record in examination-in-chief of a witness examined by land owners it would be appropriate to calculate the value of land slightly higher than Rs.2,78,250/- and it would be appropriate to determine the value of land as Rs.2,85,000/- per bigha.

Allowing the appeal the bench held the land owners to be entitled for compensation on the basis of value of land at the rate of Rs.2,85,000/- per bigha along with all other statutory benefits.

Case Title: M/s Gujrat Ambuja Cement Factory, Darlaghat & others Vs Sukh Ram (deceased) through LRs & others

Citation: 2023 LiveLaw (HP) 15

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