Chief Justice Of India B.R. Gavai, Justice Augustine George Masih, Supreme Court
Highest Of Exemplars Will Be Considered Even Where There Are Several Exemplars Regarding Similar Lands: Supreme Court
|The Supreme Court observed that only where there are several sales of similar lands whose prices range in a narrow bandwidth, the average thereof can be taken, as representing the market price.
The Supreme Court reiterated that even where there are several exemplars with reference to similar lands, usually the highest of the exemplars, which is a bona fide transaction will be considered.
The Court reiterated thus in a batch of Civil Appeals, challenging the common Judgment of the Bombay High Court, which dismissed the First Appeals of the claimants.
The two-Judge Bench comprising Chief Justice of India (CJI) B.R. Gavai and Justice Augustine George Masih observed, “It was sought to be contended by the learned counsel for the Respondent No. 3 (MIDC) that the Reference Court has rightly used the principle of averaging of sale price of sale exemplars at Sr. No. 1, 2, 3 and 5 for determination of market value of acquired land. However, it is clear from a reading of paragraph 20 of the judgment of this Court in the case of Anjani Molu Dessai (supra) that the legal position is that even where there are several exemplars with reference to similar lands, usually the highest of the exemplars, which is a bona fide transaction will be considered.”
The Bench added that only where there are several sales of similar lands whose prices range in a narrow bandwidth, the average thereof can be taken, as representing the market price.
AOR Bharat Thakorlal Manubarwala appeared for the Appellants while Advocates Rukhmini Bobde and Shyamali Gadre appeared for the Respondents.
Factual Background
The Appellants were farmers and owners of a land which was acquired in the 1990s under the provisions of the Maharashtra Industrial Development Act, 1961 (MIDA) for setting up an industrial area near Jintur town in Parbhani District. In 1992, the Land Acquisition Officer (LAO) and Deputy Collector issued a notice under Section 32(2) of the MIDA. Thereafter, the Respondent-State took possession of the Appellants’ land and an award was passed by the LAO. In terms of the said award, the total area subject matter of the acquisition was 89 Hectares and 44 Are and the total compensation awarded was Rs. 45,70,508/-.
Being aggrieved by the quantum of compensation awarded, the Appellants accepted the compensation under protest and simultaneously filed a Reference under Section 18 of the Land Acquisition Act, 1894 (LA Act) in the year 1997. Subsequently, the Reference Court partly allowed the reference with proportionate costs and directed the State to pay the Appellants an amount of Rs. 46,26,013/- along with future interest @ 15% per annum from the date of award until the payment is made on the additional market value of Rs. 16,43,224/-. Still aggrieved, the Appellants filed a First Appeal and the High Court’s Single Bench dismissed the same. Challenging this, the Appellants were before the Apex Court.
Reasoning
The Supreme Court after hearing the contentions of the counsel, noted, “… we could have very well remitted the matter back to the High Court for consideration afresh, however, taking into consideration the fact that the Appellants are farmers and that their land was acquired by the Respondent-State in the early 1990s, we are of the view that it would be appropriate that we ourselves consider the case of the Appellants as to whether they ought to be granted compensation on the basis of the highest exemplar sale deed dated 31st March, 1990, showing market value of Rs. 72,900/- per Acre.”
The Court said that it is a settled position of law that when there are several exemplars with reference to similar land, usually the highest of the exemplars, which is a bona-fide transaction, will be considered.
“It is well-settled that the compensation payable to the owner of the land is determined by reference to the price which a seller might reasonably expect to obtain from a willing purchaser. It is further settled law that the land acquired has to be valued not only with reference to its condition at the time of notification under Section 4 of the LA Act but its potential value must be taken into account. In this respect, the sale deeds of lands situated in the vicinity and the comparable benefits and advantages which they have, provide a ready method of computing the market value”, it enunciated.
The Court was of the opinion that the land of the Appellants was situated in a prime location and they deserve the benefit of the highest sale exemplar.
“Even in the case of Kapil Mehra (supra), relied upon by the learned counsel for Respondent No. 3 (MIDC), it has been held that where there are several sales of similar lands, more or less, at the same time, whose prices have marginal variation, averaging thereof is permissible”, it further noted.
The Court remarked that no occasion arose for the Reference Court to deviate from the well settled position of law and that the claimants/Appellants deserve the benefit of the highest sale exemplar dated March 31, 1990.
“Not only that but in the event, the values of the sale instances taken into consideration by the Reference Court had a “marginal variation”, averaging thereof would have been permissible. But the sale exemplars taken into consideration by the Reference Court, in the present case, were the ones from Sr. Nos. 1 to 6 and they ranged from Rs. 25,000/- per Acre to Rs. 72,900/- per Acre. In such a case, the averaging thereof was clearly not permissible”, it also said.
Conclusion
The Court, however, observed that the Reference Court correctly came to the conclusion that while accepting the sale instances a reasonable reduction requires to be made.
“As such, the land which is acquired being much larger in area, the Reference Court applied a deduction of 20% in the price determined. Being in agreement with the same, while accepting the sale exemplar at Sr. No. 4 dated 31st March 1990, and having market value of Rs. 72,900/- per Acre, we deem it appropriate to apply a deduction of 20% i.e., Rs. 14,580/- per Acre”, it concluded.
Accordingly, the Apex Court allowed the Appeals, quashed the impugned Judgment, and enhanced the compensation from Rs. 32,000/- per acre to Rs. 58,320/- per acre.
Cause Title- Manohar and Others v. The State of Maharashtra and Others (Neutral Citation: 2025 INSC 900)
Appearance:
Appellants: AORs Bharat Thakorlal Manubarwala and Deshmukh Adith Satish.
Respondents: AORs Aaditya Aniruddha Pande, Soumik Ghosal, Advocates Rukhmini Bobde, Shyamali Gadre, Siddharth Dharmadhikari, Soumya Priyadarshinee, Vinayak Aren, Amlaan Kumar, Naveen Kumar Bhardwaj, G Pal, and Ashutosh Chaturvedi.