Ready Reckoner Rates Meant For Calculation Of Stamp Duty Cannot Be The Basis For Determination Of Land Acquisition Compensation: Supreme Court

The Supreme Court observed that prices mentioned in the Ready Reckoner meant for calculation of the stamp duty cannot be the basis for determination of the compensation under the Land Acquisition Act.

In this case, the Bombay High Court, allowing appeal of land owners/claimants enhanced the amount of compensation for the lands acquired mainly relying upon the prevailing Ready Reckoner rates of the land.

Before the Apex Court, in appeal, the appellant contended that the High Court seriously erred in enhancing the amount of compensation solely relying upon the prevailing Ready Reckoner rates. It was submitted that the sole basis for more than 800% increase by the High Court is the prevailing Ready Reckoner rates of land, which as such is not permissible as held in the case of Jawajee Nagnatham Vs. Revenue Divisional 2 Officer, Adilabad, A.P. and Ors., (1994) 4 SCC 595 and Krishi Utpadan Mandi Samiti, Sahaswan Vs. Bipin Kumar, (2004) 2 SCC 283. The respondents contended that the value of the land mentioned in the Ready Reckoner is a statutory cost and even the Government has issued a Resolution that while determining the amount of compensation, the price/value mentioned in the Ready Reckoner is required to be taken into consideration.

"We are in complete agreement with the view taken in the aforesaid two decisions that the prices mentioned in the Ready Reckoner for the purpose of calculation of the stamp duty, which are fixed for the entire area, cannot be the basis for determination of the compensation under the Land Acquisition Act", the Apex Court bench noted.

The court also explained why the prices mentioned in the Ready Reckoner, which is basically for the purpose of collecting proper stamp duty and registration charges shall not be the basis for determination of the compensation for the lands acquired under the Land Acquisition Act. While allowing the appeal, the bench observed:

"Thus, there may be various factors, which are required to be considered for determining the market value of the land. The market value of the land depends upon the location of the land; area of the land; whether the land is in a developed area or not; whether the acquisition is of a small plot of land or a big chunk of land and number of other advantageous and disadvantageous factors are required to be considered. Therefore, there cannot be the same market value for the different lands while determining the compensation for the lands acquired under the Land Acquisition Act. Therefore, the rates mentioned in the Ready Reckoner, which are basically for the purpose of collection of stamp duty and as observed hereinabove, which are the uniform rates for all the lands in the area, cannot be the basis for determination of the compensation for the lands acquired under the Land Acquisition Act."

Case details

Bharat Sanchar Nigam Limited vs Nemichand Damodardas | 2022 LiveLaw (SC) 603 | CA 3478 OF 2022 | 11 July 2022

Coram : Justices MR Shah and BV Nagarathna

Counsel; Sr. Adv R.D. Agrawala for appellant,  Sr. Adv Kiran Suri for respondents, Adv Sachin Patil for State

Headnotes

Land Acquisition Act, 1894 - The rates mentioned in the Ready Reckoner, which are basically for the purpose of collection of stamp duty, which are the uniform rates for all the lands in the area, cannot be the basis for determination of the compensation for the lands acquired under the Land Acquisition Act - The market value of the land depends upon the location of the land; area of the land; whether the land is in a developed area or not; whether the acquisition is of a small plot of land or a big chunk of land and number of other advantageous and disadvantageous factors are required to be considered - There cannot be a uniform market value of the land for the purpose of determination of the compensation for the lands acquired under the Land Acquisition Act - Referred to Jawajee Nagnatham Vs. Revenue Divisional Officer, Adilabad, A.P. and Ors., (1994) 4 SCC 595 and Krishi Utpadan Mandi Samiti, Sahaswan Vs. Bipin Kumar, (2004) 2 SCC 283 (Para 9-12)

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