{"id":223448,"date":"2011-08-24T00:00:00","date_gmt":"2011-08-23T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/chakas-vs-state-of-punjab-ors-on-24-august-2011-2"},"modified":"2015-08-29T07:12:53","modified_gmt":"2015-08-29T01:42:53","slug":"chakas-vs-state-of-punjab-ors-on-24-august-2011-2","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/chakas-vs-state-of-punjab-ors-on-24-august-2011-2","title":{"rendered":"Chakas vs State Of Punjab & Ors on 24 August, 2011"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Chakas vs State Of Punjab & Ors on 24 August, 2011<\/div>\n
Author: …………………….J.<\/div>\n
Bench: Dalveer Bhandari, Deepak Verma<\/div>\n
                                                  1\n\n\n\n\n                                                       REPORTABLE\n\n\n\n                  IN THE SUPREME COURT OF INDIA\n\n\n\n                   CIVIL APPELLATE JURISDICTION\n\n\n\n                  CIVIL APPEAL NO. 7258   OF 2011\n\n             [Arising out of S.L.P.(C)No.1578 of 2007]\n\n\n\nChakas                                        ....Appellant\n\n \n\n                    Versus\n\n\n\nState of Punjab & Ors.                         ....Respondents\n\n\n\n                       W I T H\n\n\n\nC.A.No.7259\/2011[Arising out of SLP(C) No.659 of 2007];\n\nC.A.No.7260\/2011[Arising out of SLP(C) No.5447 of 2007];\n\nC.A.No.7261\/2011[Arising out of SLP(C) No.3319 of 2007];\n\nC.A.No.7262\/2011[Arising out of SLP(C) No.4982 of 2007];\n\nC.A.No.7263\/2011[Arising out of SLP(C) No.8073 of 2007];\n\nC.A.No.7264\/2011[Arising out of SLP(C) No.8649 of 2007];\n\nC.A.No.7265\/2011[Arising out of SLP(C) No.8653 of 2007];\n\nC.A.No.7266\/2011[Arising out of SLP(C) No.9210 of 2007];\n\nC.A.No.7267\/2011[Arising out of SLP(C) No.12156 of 2007];\n\nC.A.No.7268\/2011[Arising out of SLP(C) No.12765 of 2007];\n\nC.A.No.7269\/2011[Arising out of SLP(C) No.14818 of 2007];\n\nC.A.No.7270\/2011[Arising out of SLP(C) No.7253 of 2007];\n\nC.A.No.7272\/2011[Arising out of SLP(C) No.14422 of 2007];\n\nC.A.No.7271\/2011[Arising out of SLP(C) No.14424 of 2007];\n\nC.A.No.7273-7304\/2011 [Arising out of SLP(C) No.1798-1829 \n\nof 2008];\n\nC.A.No.7305\/2011[Arising out of SLP(C) No.11844 of 2008];\n\nC.A.No.7306-7315\/2011 [Arising out of SLP(C) No.9426-9435 \n\nof 2008];\n\nC.A.No.7316\/2011[Arising out of SLP(C) No.21198 of 2008];\n\nC.A.No.7317\/2011[Arising out of SLP(C) No.5427 of 2009];\n\n\n                                                2\n\n\n\n\n                           A N D \n\nC.A.No.7318-7322\/2011 [Arising out of SLP(C) No.10838-10842\n\n                                           of 2010];\n\n\n\n\n\n                          J U D G M E N T\n<\/pre>\n
Deepak Verma, J.\n<\/p>\n
1. Leave granted.\n<\/p>\n
2. Question as to what would be proper, adequate, just <\/p>\n
  and   reasonable   compensation   to   be   awarded   to   the <\/p>\n
  appellant   for   the   land   acquired   by   the   respondent <\/p>\n
  State,   has   once   again   cropped   up   for   our <\/p>\n
  consideration in this and the connected appeals.\n<\/p>\n
3. In this appeal, the land owner, whose land  has been <\/p>\n
  acquired   by   the   State   of   Punjab   is   before   us   for <\/p>\n
  enhancement   of   compensation   awarded   to   him   by   the <\/p>\n
  High Court and the beneficiary respondent No. 3 M\/s.\n<\/p>\n
  Nahar   Industries   Infrastructure   Corporation   Ltd.\n<\/p>\n
  (hereinafter         shall         be         referred         to         as         ‘the <\/p>\n
  Corporation’)   has   preferred   separate   appeals   for <\/p>\n
                                          3<\/span><\/p>\n
      reduction   of   the   compensation   awarded   to   the <\/p>\n
      appellant   by   the   High   Court.     Since   both   set   of <\/p>\n
      appeals   arise   out   of   the   common   judgment   and   order <\/p>\n
      pronounced   by   the   learned   Single   Judge   in   Regular <\/p>\n
      First   Appeal   No.   1072   of   1999   in   the   High   Court   of <\/p>\n
      Punjab and Haryana at Chandigarh on 03.05.2006, they <\/p>\n
      have   been   heard   analogously   and   are   being   disposed <\/p>\n
      of by this common judgment and order.\n<\/p>\n
4. It   may   be   noted   that   for   the   sake   of   brevity   and <\/p>\n
      convenience,   facts   of   appeal   arising   out   of   SLP(C) <\/p>\n
      No.1578 of 2007 have been taken into account.\n<\/p>\n
5.      Short   facts,   shorn   of   unnecessary   details   are <\/p>\n
mentioned hereinbelow:\n<\/p>\n
          Respondent   No.   1   –   State   of   Punjab,   for   the <\/p>\n
purposes of setting up of an Industrial Focal Point in <\/p>\n
Tehsil   Rajpura   District   Patiala   issued   a   notification <\/p>\n
on 13.11.1992 under Section 4 of the Land Acquisition <\/p>\n
Act   (hereinafter   shall   be   referred   to   as   ‘the   Act’) <\/p>\n
for   acquiring            550.03   acres   in   villages   Lalru, <\/p>\n
                                         4<\/span><\/p>\n
Jalalpur, Lehli, and Hassanpur of the aforesaid Tehsil <\/p>\n
and   District.     The   public   purpose   mentioned   in   the <\/p>\n
same was for Industrial Focal Point.  Subsequently, by <\/p>\n
issuance   of   another   notification   under   Section   6   of <\/p>\n
the   Act,   on   08.04.1993,   the   aforesaid   land   was <\/p>\n
declared to have been acquired.   Thereafter, the Land <\/p>\n
Acquisition Collector started the process of computing <\/p>\n
the   amount   of   compensation   to   be   awarded   to   the   land <\/p>\n
owners.   The   Land   Acquisition   Officer   pronounced   his <\/p>\n
award on 12.9.1994 fixing different rates per acre for <\/p>\n
the   lands   of   four   villages.     The   appellant   and   other <\/p>\n
land   owners   feeling   highly   dissatisfied   with   the <\/p>\n
amount   of   compensation   so   assessed   by   the   Land <\/p>\n
Acquisition         Officer,         preferred         references         under <\/p>\n
Section 18 of the Act to the Civil Court at Patiala.\n<\/p>\n
6.    The   matter   was   accordingly   referred   to   the <\/p>\n
Additional District Judge, Patiala for working out the <\/p>\n
amount of compensation to be awarded to the appellant <\/p>\n
and   other   such   similarly   situated   appellants.     Both <\/p>\n
                                    5<\/span><\/p>\n
the   parties led evidence before the Reference Court.\n<\/p>\n
On   the   basis   of   the   evidence   so   adduced   by   the <\/p>\n
parties, the Reference Court was pleased to assess the <\/p>\n
value of the entire acquired land in four villages at <\/p>\n
a   uniform   rate   and   consequently   held   that   the   land <\/p>\n
owners   were   entitled   to   receive   compensation   of   Rs.\n<\/p>\n
1.5 lakh per acre,  besides the individual claims made <\/p>\n
by   land   owners   with   regard   to   super   structure,   trees <\/p>\n
and   other   facilities     available   in   their   respective <\/p>\n
lands   were   also   taken   into   consideration.     The   land <\/p>\n
owners   were   also   held   entitled   for   the   statutory <\/p>\n
benefits as per the amended provisions of the Act.\n<\/p>\n
7.    Still   not   being   satisfied   with   the   amount   of <\/p>\n
compensation   so   awarded   to   them,   the   land   owners <\/p>\n
preferred   appeals   before   the   High   Court   under   Section <\/p>\n
54 of the Act, whereas the beneficiary respondent No. <\/p>\n
3   herein   the   Corporation   also   preferred   appeals <\/p>\n
purportedly, for reduction of the compensation awarded <\/p>\n
to   the   appellant.   The   Learned   Single   Judge   heard   the <\/p>\n
                                                         6<\/span><\/p>\n
matters   together   and   disposed   of   by   the   common <\/p>\n
judgment   and   order,   which   is   being   impugned,   once <\/p>\n
again by both sides on a variety of grounds.\n<\/p>\n
8.      We   have   accordingly   heard   Mr.   L.   Nageswara   Rao, <\/p>\n
Senior   Advocate   ably   assisted   by   M\/s   Navin   Chawla, <\/p>\n
Gaurav   Kaushik,   Tushar   Singh   praying   for   further <\/p>\n
enhancement   of   compensation   and   Mr.   Anil   Grover,   AAG, <\/p>\n
Punjab   with   Mr.   Kuldip   Singh   and   Mr.   Neeraj   Kumar <\/p>\n
Jain,   Senior   Advocate   with   Mr.   Sanjay   Singh   Advocate <\/p>\n
for   the   respondent   Corporation   at   length   and   perused <\/p>\n
the records.\n<\/p>\n
9.      Certain   dates   material   for   deciding   the   said <\/p>\n
appeal are mentioned hereinbelow:<\/p>\n
\n\n\n\n\n1     Notification under Section 4 of the  Issued on 13.11.1992       For acquisition of 550.03 acres \n\n      Act                                                             of land\n\n\n2     Notification under Section 6 of the  Issued on 08.04.1993\n\n      Act\n\n\n3     Award of Land Acquisition           Passed on 12.09.1994\n\n      Officer\n\n\n4     Award of the Reference Court        Dated 07.12.1998            Amount of compensation at \n\n                                                                      Rs.1.50 lakhs per acre\n\n\n5     Judgment and order of the High      Pronounced on 03.05.2006    Fixing the rate of compensation \n\n      Court                                                           at Rs.2.75 lakhs per acre.\n\n\n                                      7<\/span>\n\n\n\n\n<\/pre>\n
10.    Shri   L.   Nageswara   Rao,   Senior   Advocate   appearing <\/p>\n
for   the   appellant   contended   before   us   that   the   High <\/p>\n
Court   committed   a   grave   error   in   computation   of   the <\/p>\n
base price on the strength of the average price worked <\/p>\n
out   from   the   sale   deeds   Exh.   P.1,   P.2,   P.3,   P.8,   and <\/p>\n
P.15   and   further   committed   another   grave   error   in <\/p>\n
deducting amounts from the same.  According to him, in <\/p>\n
the   process,   the   amount   of   compensation   awarded   is <\/p>\n
much lower than what should have been awarded.  On the <\/p>\n
other   hand,   learned   counsel   for   respondent   Mr.   Anil <\/p>\n
Grover, AAG, Punjab and Mr. Neeraj Kumar Jain, Senior <\/p>\n
Advocate   appearing   for   respondent   No.3   submitted   that <\/p>\n
the   appellant   has   only   been   able   to   prove   the   market <\/p>\n
value of the land from the sale deed at Rs. 2.85 lacs <\/p>\n
per   acre.     He   further   contended   that   there   was   no <\/p>\n
mistake   committed   by   the   Court   in   taking   out   the <\/p>\n
average   price   for   working   out   the   amount   of <\/p>\n
compensation to be awarded to the appellant.\n<\/p>\n
                                     8<\/span><\/p>\n
11.    Learned   counsel   for   respondent   No.   3   Mr.   Neeraj <\/p>\n
Kumar   Jain   strongly   contended   before   us   that   the <\/p>\n
Corporation has preferred appeals for deduction of the <\/p>\n
amount,   primarily   on   the   ground   that   more   deductions <\/p>\n
should   have   been   made   than   what   was   allowed   by   the <\/p>\n
High Court and in any event no case has been made out <\/p>\n
for   further   enhancement   of   amount   of   compensation, <\/p>\n
which is already exorbitant and higher.\n<\/p>\n
12.   First   of   all,   we   would   like   to   deal   with   the <\/p>\n
location and potentiality of the acquired land.   From <\/p>\n
the   evidence   of   P.W   31   Charanjit   Singh,   Patwari   of <\/p>\n
Halqa   of   all   the   four   villages,     it   is   clearly   made <\/p>\n
out   that   all   these   villages   are   adjoining   each   other <\/p>\n
and   form   a   compact   block.     He   has   further   admitted <\/p>\n
that more than 80 to 85 industries near and adjoining <\/p>\n
the acquired land are already running and doing their <\/p>\n
business   since   long.     The   area   acquired   has   been <\/p>\n
reserved   for   industrial   purposes.     He   has   further <\/p>\n
deposed   that   if   the   land   had   not   been   acquired,   many <\/p>\n
                                     9<\/span><\/p>\n
factories   would   have   sprung   up   in   the   acquired   land.\n<\/p>\n
The   details   of   the   industries   which   are   already <\/p>\n
running   in   vicinity   have   been   given   vividly   by   him.\n<\/p>\n
It   is   also   not   in   dispute   that   the   said   land   is <\/p>\n
situated on the Ambala-Chandigarh Highway.\n<\/p>\n
13.    The   evidence   of   other   government   officials,   who <\/p>\n
had appeared before the Reference Court, reflects that <\/p>\n
the   land   acquired   have   great   Industrial   potential   as <\/p>\n
more   than   80-85   big   industries   have   already   set   up <\/p>\n
their factories in the close vicinity to the acquired <\/p>\n
land.   They   have   admitted   that   the   acquired   land   is <\/p>\n
situated   on   the   main   Ambala-Chandigarh   Highway.     From <\/p>\n
the   evidence   adduced   by   respondent   Nos.   1   and   2,   it <\/p>\n
cannot be disputed that it was a valuable land for the <\/p>\n
land owners and it had great potential.  Obviously, in <\/p>\n
1992,   the   market   value   of   the   same,   at   the   time   of <\/p>\n
issuance   of   notification   under   Section   4   of   the   Act, <\/p>\n
would be much more than what has been awarded to them <\/p>\n
vide the impugned judgment.\n<\/p>\n
                                                     10<\/span><\/p>\n
14.     However,   the   question   which   still   remains   for <\/p>\n
consideration is, on what basis, should the amount of <\/p>\n
compensation   is   to   be   worked   out.     The   appellant   to <\/p>\n
prove his case with regard to market value of the land <\/p>\n
had   produced   many   sale   deeds   but   only   relevant <\/p>\n
following              five          sale         deeds              are           taken                into <\/p>\n
consideration:\n<\/p>\n
Exhibit No.    Dated of sale deed                 Price paid                     Price per acre<\/p>\n
P.1            16.08.1990                         1,20,000                       3,02,157<\/p>\n
P.2            16.08.1990                         1,50,000                       3,51,219<\/p>\n
P.3            16.08.1990                         1,50,000                       3,51,219<\/p>\n
P.8            20.04.1993                         17,34,000                      4,08,000<\/p>\n
P.15           04.06.1990                         9,75,000                       2,99,041<\/p>\n
15.     The   appellant   had   also   examined   the   vendors   of <\/p>\n
the   aforesaid   sale   deeds   to   show   the   genuineness   and <\/p>\n
correctness   of   the   same.     The   most   appropriate   sale <\/p>\n
deed   touching   the   issuance   of   notification   under <\/p>\n
Section 4 is Exh. P.8.  The base price of the land per <\/p>\n
acre   according   to   this   comes   to   Rs.   4,08,000\/-.     The <\/p>\n
total area of the land so purchased was 20 Bighas and <\/p>\n
8   biswas.   Before   execution   of   the   sale   deed,   an <\/p>\n
                                     11<\/span><\/p>\n
Agreement   to   Sell   dated   30.10.1992   (Exh.   P.45)   was <\/p>\n
executed   between   the   vendor   and   vendee.     As   required <\/p>\n
under   the   law,   permission   was   sought   from   the   Income <\/p>\n
Tax   Department   which   granted   a   Clearance   Certificate <\/p>\n
Exh. P.44.\n<\/p>\n
16.  It is also pertinent to mention here that the land <\/p>\n
so   sold   covered   under   (Exh.P.8)   sale   deed   neither <\/p>\n
belonged   to   any   of   the   land   owners   nor   they   had   any <\/p>\n
interest   whatsoever   in   the   said   deed.     Thus,   it   can <\/p>\n
safely be assumed that it was a genuine and bona-fide <\/p>\n
transaction between two parties, who had nothing to do <\/p>\n
with the acquisition of land of the appellant. It was <\/p>\n
not executed for the purposes of creating evidence as <\/p>\n
Agreement   to   sell   (Exh.   P.45)   is   dated   30.11.1992, <\/p>\n
before the issuance of Notification under Section 4 of <\/p>\n
the   Act.     On   the   said   date,   it   could   not   have   been <\/p>\n
imagined   that   the   adjoining   land   is   going   to   be <\/p>\n
acquired   shortly.     The   said   land   is   almost   abutting <\/p>\n
the   acquired   land.     It   is   also   manifest   that   the <\/p>\n
                                    12<\/span><\/p>\n
Agreement   dated   13.10.1992   is   very   close   to   the <\/p>\n
notification   issued   on   13.11.1992   under   Section   4   of <\/p>\n
Act.     The   whole   transaction   executed   under   the   Sale <\/p>\n
deed Exh. P.8 fully proves and establishes the case of <\/p>\n
the   appellant.   As   per   this   sale   deed,   the   base   price <\/p>\n
of   the   land   would   come   to   Rs.   4,08,000\/-   per   acre.\n<\/p>\n
According   to   us,   the   correct   base   price   would   be   Rs.\n<\/p>\n
4,08,000\/- per acre.\n<\/p>\n
17.    It   is   profitable   to   refer   to   the   following <\/p>\n
judgment   of   this   Court   on   this   issue.     (1969)   1   MLJ <\/p>\n
(SC) 45  Shri Rani M. Vijayalakshmamma Rao Bahadur Vs.  <\/p>\n
Collector   of   Madras.  Relevant   para   2   is   reproduced <\/p>\n
hereinbelow:\n<\/p>\n
           “It seems to us that there is substance in <\/p>\n
           the   first   contention   of   Mr.   Ram   Reddy. <\/p>\n
           After   all   when   land   is   being   compulsorily <\/p>\n
           taken away from a person he is entitled to <\/p>\n
           say   that   he   should   be   given   the   highest <\/p>\n
           value   which   similar   land   in   the   locality <\/p>\n
           is   shown   to   have   fetched   in   a   bona   fide <\/p>\n
           transaction entered into between a willing <\/p>\n
           purchaser   and   a   willing   seller   near   about <\/p>\n
           the   time   of   the   acquisition.     It   is   not <\/p>\n
           disputed   that   the   transaction   represented <\/p>\n
                                     13<\/span><\/p>\n
          by   Ex   Rule   19     was   a   few   months   prior   to <\/p>\n
          the   notification   under   Section   4,   that   it <\/p>\n
          was   a   bona   fide   transaction     and   that   it <\/p>\n
          was   entered   into   between   a   willing <\/p>\n
          purchaser   and   a   willing   seller.     The   land <\/p>\n
          comprised   in   the   sale   deed   is   11   grounds <\/p>\n
          and   was   sold   at   Rs.   1951   per   ground.     The <\/p>\n
          land   covered   by   Rule   27   was   also   sold <\/p>\n
          before the notification but after the land <\/p>\n
          comprised   in   Ex.   Rule   19   was   sold.     It   is <\/p>\n
          true   that   this   land   was   sold   at   Rs.   1096 <\/p>\n
          per   ground.     This,   however,   is   apparently <\/p>\n
          because of two circumstances.   One is that <\/p>\n
          betterment levy at Rs.500\/- per ground had <\/p>\n
          to   be   paid   by   the   vendee   and   the   other <\/p>\n
          that the land comprised in it is very much <\/p>\n
          more   extensive,   that   is   about   93   grounds <\/p>\n
          or   so.     Whatever   that   may   be,   it   seems   to <\/p>\n
          us   to   be   only   fair   that   where   sale   deeds <\/p>\n
          pertaining   to   different   transactions   are <\/p>\n
          relied   on   behalf   of   the   Government,   that <\/p>\n
          representing   the   highest   value   should   be <\/p>\n
          preferred   to   the   rest   unless   there   are <\/p>\n
          strong         circumstances           justifying         a <\/p>\n
          different   course.   In   any   case   we   see   no <\/p>\n
          reason   why   an   average   of   two   sale   deeds <\/p>\n
          should have been taken in this case.”<\/p>\n<\/blockquote>\n
18.     The   said   judgment   has   been     considered   by   this <\/p>\n
Court reported in (2008) 14 SCC 745    General Manager,  <\/p>\n
Oil   and   Natural   Gas   Corporation   Ltd.   Vs.   Rameshbhai  <\/p>\n
Jivanbhai   Patel   and   Anr.  wherein   the   Division   Bench <\/p>\n
                                                           14<\/span><\/p>\n
has considered this aspect of the matter succinctly in <\/p>\n
para 13, 14 and 15 reproduced hereinbelow:\n<\/p>\n
                13)        Primarily,   the   increase   in   land <\/p>\n
        prices   depends   on   four   factors:   situation <\/p>\n
        of   the   land,   nature   of   development   in <\/p>\n
        surrounding   area,   availability   of   land   for <\/p>\n
        development   in   the   area,     and   the   demand <\/p>\n
        for   land   in   the   area.     In   rural   areas, <\/p>\n
        unless there is any prospect of development <\/p>\n
        in   the   vicinity,   increase   in   prices   would <\/p>\n
        be   slow,   steady   and   gradual,   without   any <\/p>\n
        sudden spurts or jumps.  On the other hand, <\/p>\n
        in   urban   or   semi-urban   areas,   where   the <\/p>\n
        development is faster, where the demand for <\/p>\n
        land          is               high           and             where             there                is <\/p>\n
        construction   activity   all   around,   the <\/p>\n
        escalation   in   market   price   is   at   a   much <\/p>\n
        higher   rate,   as   compared   to   rural   areas. <\/p>\n
        In some pockets in big cities, due to rapid <\/p>\n
        development   and   high   demand   for   land,   the <\/p>\n
        escalations in prices have touched even 30% <\/p>\n
        to   50%   or   more   per   year,   during   the <\/p>\n
        nineties.<\/p><\/blockquote>\n
           14)             On   the   other   extreme,   in   remote <\/p>\n
        rural   areas   where   there   was   no   chance   of <\/p>\n
        any  development  and  hardly  any  buyers,  the <\/p>\n
        prices             stagnated                       for             years             or         rose <\/p>\n
        marginally   at   a   nominal   rate   of   1%   or   2% <\/p>\n
        per   annum.     There   is   thus   a   significant <\/p>\n
        difference  in  increases  in  market  value  of <\/p>\n
        lands              in              urban\/semi-urban                         areas                and <\/p>\n
        increases   in   market   value   of   lands   in   the <\/p>\n
        rural areas.  Therefore, if the increase in <\/p>\n
        market   value   in   urban\/semi-urban   areas   is <\/p>\n
        about              10%             to         15%             per          annum,                the <\/p>\n
                                  15<\/span><\/p>\n
corresponding   increases   in   rural   areas <\/p>\n
would   at   best   be   only   around   half   of   it, <\/p>\n
that is, about 5% to 7.5% per annum.   This <\/p>\n
rule   of   thump   refers   to   the   general   trend <\/p>\n
in   the   nineties,   to   be   adopted   in   the <\/p>\n
absence   of   clear   and   specific   evidence <\/p>\n
relating   to   increase   in   prices.       Where <\/p>\n
there   are   special   reasons   for   applying   a <\/p>\n
higher   rate   of   increase,   or   any   specific <\/p>\n
evidence relating to the actual increase in <\/p>\n
prices,   then   the   increase   to   be   applied <\/p>\n
would depend upon the same.\n<\/p>\n
15)Normally, recourse is taken to the mode <\/p>\n
  of   determining   the   market   value   by <\/p>\n
  providing   appropriate   escalation   over <\/p>\n
  the   proved   market   value   of   nearby   lands <\/p>\n
  in   previous   years   (as   evidenced   by   sale <\/p>\n
  transactions   or   acquisitions),   where <\/p>\n
  there         is         no           evidence         of         any <\/p>\n
  contemporaneous   sale   transactions   or <\/p>\n
  acquisitions   of   comparable   lands   in   the <\/p>\n
  neighbourhood.                   The   said   method   is <\/p>\n
  reasonably safe where the relied-on sale <\/p>\n
  transactions\/acquisitions                       precede           the <\/p>\n
  subject acquisition by only a few years, <\/p>\n
  that   is,   up   to   four   to   five   years.\n<\/p>\n
  Beyond that it may be unsafe, even if it <\/p>\n
  relates   to   a   neighbouring   land.     What <\/p>\n
  may be a reliable standard if the gap is <\/p>\n
  of   only   a   few   years,   may   become   unsafe <\/p>\n
  and unreliable standard where the gap is <\/p>\n
  larger.     For   example,   for   determining <\/p>\n
  the   market   value   of   a   land   acquired   in <\/p>\n
  1992,   adopting   the   annual   increase <\/p>\n
  method   with   reference   to   a   sale   or <\/p>\n
  acquisition   in   1970   or   1980   may   have <\/p>\n
  many   pitfalls.     This   is   because,   over <\/p>\n
                                     16<\/span><\/p>\n
             the   course   of   years,   the   “rate”   of <\/p>\n
             annual   increase   may   itself   undergo <\/p>\n
             drastic change apart from the likelihood <\/p>\n
             of   occurrence   of   varying   periods   of <\/p>\n
             stagnation in prices or sudden spurts in <\/p>\n
             prices   affecting   the   very   standard   of <\/p>\n
             increase.”\n<\/p>\n
19.  The   Reference   Court   committed   a   grave   error   in <\/p>\n
deducting   50%   of   the   value   assessed   by   him,   towards <\/p>\n
development   charges   and   further   reduced   the   said <\/p>\n
amount   for   the   reasons   not   assigned   by   him.     The <\/p>\n
learned   Single   Judge   vide   the   impugned   judgment   has <\/p>\n
enhanced   the   amount   of   compensation   but   committed   an <\/p>\n
error in fixing the base price as 2,75,000\/- per acre <\/p>\n
for   the   acquired   land,   applying   the   doctrine   of <\/p>\n
reasonable cut  to the average price worked out by him <\/p>\n
at   Rs.3,42,527\/-   per   acre.     We   do   not   approve   of   the <\/p>\n
reasonings adopted either by the reference Court or by <\/p>\n
the   High   Court.     How   much   amount   is   to   be   deducted <\/p>\n
from the base price would depend on various factors.\n<\/p>\n
20.    As mentioned hereinabove, in the case in hand the <\/p>\n
bulk   of   the   land   that   is   almost   525   acres   has   been <\/p>\n
                                               17<\/span><\/p>\n
given   to   respondent   No.3,   the   Corporation   for   setting <\/p>\n
up   its   own   industry   and   other   infrastructure   thereon.\n<\/p>\n
Thus,   the   lands   likely   to   be   used   towards   roads, <\/p>\n
sewage   and   other   such   facilities   would   be   minimum   as <\/p>\n
most   of   the   vacant   land   would   be   utilised   by <\/p>\n
respondent No. 3 for its own benefits.\n<\/p>\n
21.   Needless to say, once the industry is set up, it <\/p>\n
would   be   for   the   financial   benefit   and   gain   of <\/p>\n
respondent No.3 year after year.  Thus, looking to the <\/p>\n
matter from all angles, respondent No. 3 – Corporation <\/p>\n
would be a great beneficiary at the cost of depriving <\/p>\n
the   appellant   –   land   owner   of   his   sole   livelihood   of <\/p>\n
agriculture.\n<\/p>\n
22.  Therefore,   it   is   neither   desirable   nor   proper   to <\/p>\n
deduct   more   than   10%   of   the   amount   in   the   base   price <\/p>\n
fixed by us at Rs. 4,08,000\/-. We accordingly do so.\n<\/p>\n
23.       The   question   with   regard   to   the   deduction   to   be <\/p>\n
made         also         stands         settled          by         this         Court         in <\/p>\n
Atma   Singh   (dead)  through   Lrs.   and   Ors.   Vs.   State   of  <\/p>\n
                                              18<\/span><\/p>\n
Haryana   and   Another.  (2008)   2   SCC   568.   The   relevant <\/p>\n
portion   thereof  are reproduced herein below:\n<\/p>\n
         “14) The   reasons   given   for   the   principle <\/p>\n
         that   price   fetched   for   small   pots   cannot <\/p>\n
         form   safe   basis   for   valuation   of   large <\/p>\n
         tracts         of      land,         according      to         cases <\/p>\n
         referred   to   above,   are   that   substantial <\/p>\n
         area is used for development of sites like <\/p>\n
         laying   out   roads,   drains,   sewers,   water <\/p>\n
         and   electricity   lines   and   other   civic <\/p>\n
         amenities.   Expenses   are   also   incurred     in <\/p>\n
         providing   these   basic   amenities.                           That <\/p>\n
         apart   it   takes   considerable   period   in <\/p>\n
         carving   out   the   roads   making   sewers   and <\/p>\n
         drains   and   waiting   for   the   purchasers. <\/p>\n
         Meanwhile the invested money is blocked up <\/p>\n
         and   the   return   on   the   investment   flows <\/p>\n
         after   a   considerable   period   of   time.     In <\/p>\n
         order   to   make   up   for   the   area   of   land <\/p>\n
         which is used in providing civic amenities <\/p>\n
         and   the   waiting   period   during   which   the <\/p>\n
         capital of the entrepreneur gets locked up <\/p>\n
         a   deduction   from   20%   onward,   depending <\/p>\n
         upon the facts of each case, is made.<\/p><\/blockquote>\n
         15)    The   question   to   be   considered   is <\/p>\n
         whether   in   the   present   case   those   factors <\/p>\n
         exist   which   warrant   a   deduction   by   way   of <\/p>\n
         allowance   from   the   price   exhibited   by   the <\/p>\n
         exemplars   of   small   plots   which   have   been <\/p>\n
         filed   by   the   parties.     The   land   has   not <\/p>\n
         been   acquired   for   a   housing   colony   or <\/p>\n
         government   office   or   an   institution.     The <\/p>\n
         land   has   been   acquired   for   setting   up   a <\/p>\n
         sugar   factory.     The   factory   would   produce <\/p>\n
         goods   worth   many   crores   in   a   year.     A <\/p>\n
                                  19<\/span><\/p>\n
sugar   factory   apart   from   producing   sugar <\/p>\n
also produces many by-products in the same <\/p>\n
process.          One   of   the   by-products   is <\/p>\n
molasses,   which   is   produced   in   huge <\/p>\n
quantity.     Earlier,   it   had   no   utility   and <\/p>\n
its   disposal   used   to   be   a   big   problem.\n<\/p>\n
But now molasses is used for production of <\/p>\n
alcohol   and   ethanol   which   yield   lot   of <\/p>\n
revenue.     Another   by-product   begasse   is <\/p>\n
now   use   for   generation   of   power   and   press <\/p>\n
mud   is   utilized   in   manure.       Therefore, <\/p>\n
the   profit   from   a   sugar   factory   is <\/p>\n
substantial.   Moreover,   it   is   not   confined <\/p>\n
to   one   year   but   will   accrue   every   year   so <\/p>\n
long   as   the   factory   runs.                               A   housing <\/p>\n
board   does   not   run   on   business   lines.\n<\/p>\n
Once         plots         are              carved            out         after <\/p>\n
acquisition   of   land   and   are   sold   to <\/p>\n
public,   there   is   no   scope   or   earning   any <\/p>\n
money   in   future.     An   industry   established <\/p>\n
on   acquired   land,   if   run   efficiently, <\/p>\n
earns   money   or   makes   profit   every   year.\n<\/p>\n
The   return   from   the   land   acquired   for   the <\/p>\n
purpose   of   housing   colony,   or   offices,   or <\/p>\n
institution           cannot                even         remotely               be <\/p>\n
compared     with   the   land   which   has   been <\/p>\n
acquired   for   the   purpose   of   setting   up   a <\/p>\n
factory   or   industry.                         After   all   the <\/p>\n
factory   cannot   be   set   up   without   land   and <\/p>\n
if such land is giving substantial return, <\/p>\n
there   is   no   justification   for   making   any <\/p>\n
deduction   from   the   price   exhibited   by   the <\/p>\n
exemplars even if they are of small plots.\n<\/p>\n
It is possible that a part of the acquired <\/p>\n
land   might   be   used   for   construction   of <\/p>\n
residential   colony   for   the   staff   working <\/p>\n
in   the   factory.       Nevertheless,   where   the <\/p>\n
                                              20<\/span><\/p>\n
          remaining   part   of   the   acquired   land   is <\/p>\n
          contributing             to         production         of         goods <\/p>\n
          yielding   good   profit,   it   would   not   be <\/p>\n
          proper to make a deduction in the price of <\/p>\n
          land shown by the exemplars of small plots <\/p>\n
          as   the   reasons   for   doing   so   assigned   in <\/p>\n
          various   decisions   of   this   court   are   not <\/p>\n
          applicable               in          the         case             under <\/p>\n
          consideration.”\n<\/p>\n
24.       In   the   light   of   the   aforesaid   contention   and <\/p>\n
taking cue from the settled position of law decided by <\/p>\n
this   Court   in   the   aforesaid   matters,   we   are   of   the <\/p>\n
firm opinion that the base price has to be fixed @ Rs.\n<\/p>\n
4,08,000\/-   per   acre.     Keeping   in   mind   that   more   than <\/p>\n
525   acres   has   been   given   to   respondent   No.   3   –\n<\/p>\n
Corporation,   which   in   turn   has   set   up   its   factory,   a <\/p>\n
deduction   of   10%   on   the   aforesaid   amount   would   be <\/p>\n
reasonable.   Needless to say on the aforesaid amount, <\/p>\n
the appellant would be entitled for statutory benefits <\/p>\n
as   mandated   under   the   amended   provisions   of   the   Act.\n<\/p>\n
This   appeal   and   the   connected   appeals   filed   by   land <\/p>\n
owners   are   hereby   allowed   and   the   appeals   filed   by <\/p>\n
respondent No.3 are dismissed.\n<\/p>\n
                                     21<\/span><\/p>\n
25.    The   Reference   Court   is   hereby   directed   to <\/p>\n
recalculate   the   amount   of   compensation   to   be   awarded <\/p>\n
to the appellants and all such other land owners whose <\/p>\n
lands have been acquired in the light of the direction <\/p>\n
as contained hereinabove and to pay them the remainder <\/p>\n
amount   within   a   period   of   2   months   from   the   date   of <\/p>\n
communication of this order.\n<\/p>\n
26.    For the foregoing reasons, this and the connected <\/p>\n
appeals   preferred   by   land   owners   are   hereby   allowed <\/p>\n
and those filed by the Corporation are dismissed with <\/p>\n
costs   throughout.       Counsel’s   fee   quantified   at   Rs.\n<\/p>\n
10,000\/- in each Appeal.\n<\/p>\n
                                   …………………….J.\n<\/p>\n
                                   [DALVEER BHANDARI]<\/p>\n
                                   …………………….J.\n<\/p>\n
                                   [DEEPAK VERMA]<\/p>\n
New Delhi<\/p>\n
August 24, 2011 <\/p>\n
22<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Chakas vs State Of Punjab & Ors on 24 August, 2011 Author: …………………….J. Bench: Dalveer Bhandari, Deepak Verma 1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 7258 OF 2011 [Arising out of S.L.P.(C)No.1578 of 2007] Chakas ….Appellant Versus State of Punjab & Ors. ….Respondents W […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-223448","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nChakas vs State Of Punjab & Ors on 24 August, 2011 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/chakas-vs-state-of-punjab-ors-on-24-august-2011-2\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chakas vs State Of Punjab & Ors on 24 August, 2011 - 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