A two-judge Bench of Justice Vineet Saran and Justice JK Maheshwari in a land acquisition case has held that the determination of compensation has to be made by taking into consideration the circle rate which has been determined as per the market value.

The Bench held so while placing heavy reliance on the precedent Bhopendra Singh & Others v. Awas Evam Vikas Parishad and Others.

Appeals were preferred before the Supreme Court assailing the order of the Allahabad High Court in which the High Court had intervened in the award of the compensation passed by the Additional District Magistrate (Land Acquisition) for acquired land of the Appellant situated in Gautam Buddha Nagar. The order of the High Court was challenged by both the parties before the Apex Court.

Senior Counsel Mr. Ranjit Kumar appeared for the Appellant – Original Landowner and ASG Mr. Balbir Singh appeared for NOIDA before the Apex Court.

  • Quantum of Compensation

The Apex Court noted that in view of the settled legal position with respect to the binding nature of the judgment that has attained finality, there is no iota of doubt that NOIDA is under mandatory obligation to determine the compensation as per the law laid down in Bhopendra Singh (supra).

Further, the Bench while referring to Bhopendra Singh's (supra) case held –

"Bare perusal of the aforesaid makes it clear that, the determination of the compensation has to be made by taking into consideration the circle rate which has been determined as per the market value."

The Court also held that the market value of the property is the price that a willing purchaser would pay to a willing seller for it, taking into account its current condition, all existing advantages, and potential possibilities when led out in the most advantageous manner.

In this context, the Bench held –

"Therefore, the market value is to be determined in the light of price paid by the purchaser of similar land in the neighbourhood of the land in question and in cases, where no records for such transaction/purchase is available, the minimum statutory value in accordance with Stamp Act must be taken as market value for circle rate."

The Court refused to interfere with the findings of the High Court since the title of the Appellant on the scheduled piece of land has not been contested and the adjudication is confined only to the quantum of compensation.

The Bench also opined, "As previously stated, the land in dispute was not only designated for commercial use, rather it was also declared to be part of industrial development plan area. After development, even a mall has been constructed on it. In our view, the High Court in the impugned order has rightly determined payment of compensation at the rate of Rs. 1,10,000/­ per square meter as per circle rate. We, therefore, confirm the findings of High Court for grant of compensation with rate Rs. 1,10,000/­ per sq. mt.

  • Deduction of 50% towards development charges

The Bench noted that in this context, there is no straitjacket formula to arrive at the quantum of deduction of development charge and must be assessed based on the facts of the individual case after due consideration of all the factors which might affect such quantum.

The Court additionally opined, "As evident, the High Court did not take into consideration all the factors encircling the issue and routinely proceeded with the maximum deduction of 50% development charge. We say so because, on perusal of the impugned judgment, it is clear that the High Court has inter­alia highlighted the glaring mischiefs played by NOIDA in the whole acquisition proceedings but at the same time, it has failed to accord a substantial reason for maximum deduction of development charges. It is further observed that, it is not for the first time that NOIDA is in cross­roads before this Court for playing hand­in­glove with large developers."

Thus, the Court held that considering the possession of a scheduled piece of land, though taken long back in year 2004­2005, but till date, the appellant has not been able to reap the fruits of compensation and kept litigating before courts even up to subsequent rounds, deduction made to the extent of 50% in by the High Court cannot be sustained and is set aside.

The Court finally held that the compensation at the circle rate of Rs. 1,10,00-/- would be paid to the Appellant along with interest of 9% p.a.

The Court also held that the liability to pay the compensation would be borne by NOIDA since the land was acquired by it in the public auction and allowed the appeal in part filed by the Appellant and dismissed the appeal filed by NOIDA.

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