TMI Blog2009 (8) TMI 1248X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 to 11 months earlier, the compensation in regard to the three earlier acquisitions is determined as ₹ 28000/- per bigha. To this extent, the award of the High Court requires to be modified. The reference court had, after referring to several sale transactions, determined the market value as ₹ 15,700/- per bigha in one case and ₹ 18,500/- per bigha in another case. On appeal by the claimants, the High Court excluded several sale transactions relied upon by the reference court as not inspiring confidence, and on the basis of a solitary transaction dated 10.9.1981 in regard to a small area of one bigha, increased the market value to ₹ 30,000/- per bigha. This Court held that the High Court erred in relying upon a single sale deed relating to a small extent of one bigha to determine the market value of a large extent of 5484 bighas. It further held that if that sale deed was excluded, there was no other evidence to support the increase in compensation made by the High Court. Consequently, this Court set aside the increase awarded by the High Court and restored the market value determined by the reference court. We accordingly increase the compensation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of Rohini Residential Scheme (Phase-I), formed by acquiring part of Rithala village and surrounding villages. The provisional rates of allotment given in the said brochure were ₹ 100, ₹ 125, ₹ 150, and ₹ 200 per sq. m. respectively for plots of the size of 26,32,48,60 and 90 sq. m. The High Court took the average of those allotment rates as ₹ 150 per sq. m. Having regard to the fact that the said rate was the premium for allotment on leasehold basis, the High Court inferred that the freehold market value of the said plots would be at least double, that is ₹ 300 per sq. m. Taking note of the fact that considerable expenditure would have been involved for developing the plots, the High Court took the wholesale price of freehold plots as ₹ 200 per sq. m. and after deducting 60% towards the cost of development and area required for roads etc., determined the market price at ₹ 80 per sq. m. (or ₹ 67/- per sq. yd.). The said rate was awarded as compensation for the first three acquisitions. In regard to land acquired under the last notification (dated 31.12.1981) it provided an increase of 12% per annum and arrived at the market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 and 13.3.1981, having regard to the fact that the said acquisitions were about 11 to 10 months prior to the acquisition of 31.12.1981, it determined the market value as ₹ 25,000/- per bigha. 5. Not being satisfied with the amount awarded the appellants have filed these appeals. According to them, the compensation awarded is low and it ought to have been higher. They contend that the High court was not justified in rejecting the following documents from consideration: (i) Ex. X-1 (DDA brochure relating to Rohini Residential Scheme) issued in 1981 showing an average premium of ₹ 150/- per sq. m. in respect of DDA plots for allotment. (ii) The circle rates dated 21.1.1989 issued by the Land Division of Government of India showing a market value of ₹ 400/- per square yard for residential plots (and ₹ 800/- per sq. yd. for commercial plots). (iii) Award relating to the acquisition of land at Rithala under notification dated 24.10.1961 at ₹ 7,000 per Bigha which when increased at a compound rate of 12% per annum for twenty years, would give a market value of ₹ 67,525/- per bigha in 1981. (iv) Sale deeds ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veloped plots, varies between 20% to 75% of the price of such developed plots, the percentage depending upon the nature of development of the lay out in which the exemplar plots are situated. The 'deduction for development' consists of two components. The first is with reference to the area required to be utilised for developmental works and the second is the cost of the development works. For example if a residential layout is formed by DDA or similar statutory authority, it may utilise around 40% of the land area in the layout, for roads, drains, parks, play grounds and civic amenities (community facilities) etc. The Development Authority will also incur considerable expenditure for development of undeveloped land into a developed layout, which includes the cost of levelling the land, cost of providing roads, underground drainage and sewage facilities, laying waterlines, electricity lines and developing parks and civil amenities, which would be about 35% of the value of the developed plot. The two factors taken together would be the `deduction for development' and can account for as much as 75% of the cost of the developed plot. On the other hand, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and expenditure. Even among the layouts formed by DDA, the percentage of land utilized for roads, civic amenities, parks and play grounds may vary with reference to the nature of layout - whether it is residential, residential- cum-commercial or industrial; and even among residential layouts, the percentage will differ having regard to the size of the plots, width of the roads, extent of community facilities, parks and play grounds provided. Some of the layouts formed by statutory Development Authorities may have large areas earmarked for water/sewage treatment plants, water tanks, electrical sub-stations etc. in addition to the usual areas earmarked for roads, drains, parks, playgrounds and community/civic amenities. The purpose of the aforesaid examples is only to show that the `deduction for development' factor is a variable percentage and the range of percentage itself being very wide from 20% to 75%. 10. Second factor: DDA and other statutory development authorities adopt different rates for allotment, plots in the same layout, depending upon the economic status of the allottees, classifying them as high income group, middle income group, low in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Housing, notifying the Schedule of Market Rates of land in different parts of Delhi and various outlying areas - showing the minimum rates ₹ 400/- per sq. yard for residential and ₹ 800/- sq. yard for non- residential plots. The question is whether the same could be relied upon for determination of market value in regard to land acquisition. When the matter came up before this Court in the earlier round, the counsel for the appellant had conceded that such rates could not form the basis for determining the market value of the acquired lands. In spite of it, the learned Counsel for appellant submitted before us that though the said circle rates cannot be the basis for determining the market value, it may be taken note of as one of the relevant pieces of evidence indicative of the market value. There is some confusion as to whether such basic rates/guideline value/minimum registration value rates could form the basis for determining the market value. 13. This Court in Jawajee Nagnatham v. Revenue Divisional Officer 1994 (4) SCC 595 and several cases following it, including Land Acquisition Officer, Eluru v. Jasti Rohini 1995 (1) SCC 717; U.P. Jal Nigam, Luckn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and held that the Collector committed an error in determining the market value on the basis of Basic Value Circulars. Jawajee Naganatham was again followed in Bipin Kumar, which is another case from Uttar Pradesh. 13.3 All the four decisions rejected the value entered in the Basic Valuation Registers, on the ground that they had no statutory basis having regard to the provisions of stamp law applicable in the respective States (Andhra Pradesh and Uttar Pradesh) and cannot be the basis for determination of market value under Section 23 of LA Act. 14. There are also another set of decisions considering such circle rates could be considered as prima facie basis, for purposes of ascertaining the market value and determining whether there was any undervaluation of the instrument for purposes of stamp duty, which is a revenue collection exercise. We may refer to one of those cases, that is Ramesh Chand Bansal v. District Magistrate/Collector, Ghaziabad 1999 (5) SCC 62, wherein this Court held: Reading Section 47-A with the aforesaid Rule 340-A it is clear that the circle rate fixed by the Collector is not final but is only a prima facie determination of rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide for scientific and methodical assessment of market value in different areas by Expert Committees. These statutes provide that such committees will be constituted with officers from the Department of Revenue, Public Works, Survey Settlement, Local Authority and an expert in the field of valuation of properties, with the sub-registrar of the sub-registration district as the member secretary. They also provide for different methods of valuation for lands, plots, houses and other buildings. They require determination of the market value of agricultural lands by classifying them with reference to soil, rate of revenue assessment, value of lands in the vicinity and locality, nature of crop yield for specified number of years, and situation (with reference to roads, markets etc.). The rates assessed by the committee are required to be published inviting objections/suggestions from the members of public. After considering such objections/suggestions, the final rates are published in the Gazette. Such published rates are revised and updated periodically. When the guideline market values, that is, minimum rates for registration of properties, are so evaluated and determined by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 1961 acquisition by providing an appropriate increase at the cumulative/ compounded rate of 12% per annum. 19. This Court had occasion to examine this issue recently. In The General Manager, Oil Natural Gas Corporation Ltd. v. Rameshbhai Jivanbhai Patel 2008 (11) SCALE 637, this Court held: Normally, recourse is taken to the mode of determining the market value by providing appropriate escalation over the proved market value of nearby lands in previous years (as evidenced by sale transactions or acquisition), where there is no evidence of any contemporaneous sale transactions or acquisitions of comparable lands in the neighbourhood. The said method is reasonably safe where the relied-on-sale transactions/acquisitions precedes the subject acquisition by only a few years, that is upto four to five years. Beyond that it may be unsafe, even if it relates to a neighbouring land. What may be a reliable standard if the gap is only a few years, may become unsafe and unreliable standard where the gap is larger. For example, for determining the market value of a land acquired in 1992, adopting the annual increase method with reference to a sale or acquisition in 1970 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igha and sales on 27.7.1981 and 1.12.1981 (Ex.A3 and A12) were at a price of ₹ 49,000/-, whereas the market price on 9.4.1981 (Ex. A1) was only ₹ 35000 per bigha, thereby showing a steep increase in seven months. The High Court was of the view that the increase of nearly 95% in a period of 7 months or even a 40% increase in four/eight months demonstrated that they were not bonafide transactions and therefore, they should be ignored. The High Court did not consider the possibility that the steep increase may be a genuine increase on account of the rapid urbanisation of the area, or on account of the acquisitions in February and March, 1981 and/or on account of the locational advantage (such as nearness to road or nearness to developed area). 23. The High Court also rejected Ex.R3 to R7 relied upon by the respondents, solely on the ground that the prices therein were lower than the market value offered by Land Acquisition Collector and therefore, they had to be excluded under Section 25 of the LA Act. Section 25 provides that the amount of compensation awarded by a reference court shall not be less than the amount awarded by the Collector under Section 11. We fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt excluded the sale deeds Ex.R3 to R7 is not sound. The question whether these deeds (Ex.R3 to R7) should be excluded on any other relevant ground will be considered later. 24. We are therefore of the considered view that the reasons assigned by the High Court for rejecting Ex. A2,3, A10 to A13 and Ex R3 to R7 are not sound. All the sale deeds related to Rithala village and were of the year of acquisition, namely 1981. They were prior to the acquisition under notification dated 31.12.1981, which is the largest of the four acquisitions. The difficulty arises because of the marked difference in value, disclosed by the sale deeds exhibited by the respondents (Ex.R3 to R7) and the sale deeds exhibited by the appellants (Ex.A1 to A3 and A10 to A13). The sale deeds produced by the respondents (Ex. R3 to R7) which are of the period between 9.2.1981 to 28.11.1981 disclose a value of ₹ 9028 to ₹ 10791 per bigha, that is an average of ₹ 10000 per bigha. On the other hand the sale deeds, produced by the appellant (Ex. A1 to A3 and A10 to A13) which are the period 9.4.1981 to 1.12.1981 show market values of ₹ 35000/-, ₹ 49000/- and ₹ 68371/- per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a transaction showing a depressed value or a boosted value. But with the insertion of Section 51A, certified copies of registered sale deeds could be tendered as evidence without examining the vendor or vendee thereof and the court is enabled to accept them as evidence of the transaction recorded therein. The scope of Section 51A was explained by a Constitution Bench of this Court in Cement Corporation of India v. Purya 2004 (8) SCC 270 thus: But when the statute enables a court to accept a sale deed on the records evidencing a transaction, nothing further is required to be done.... Even the vendor or vendee thereof is not required to examine themselves for proving the contents thereof. This, however, would not mean that the contents of the transaction as evidenced by the registered sale deed would automatically be accepted. The legislature has advisedly used the word `may'. A discretion, therefore, has been conferred upon a court to be exercised judicially, i.e. upon taking into consideration the relevant factors. The submission of Mr. G. Chandrasekhar to the effect that the contents of a sale deed should be a conclusive proof as regard the transaction contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed recites the financial difficulties of the vendor and the urgent need to find money as reasons for the sale, that will be an intrinsic evidence of a distress sale. Therefore, though a certified copy of a sale deed may be received in evidence and exhibited even without examining the vendor and vendee, and accepted as proof of the transaction to which it relates, the courts have the discretion to rely upon it or reject it as unreliable or unacceptable for reasons to be recorded. 28. But a word of caution. What Narsaiah and Cement Corporation of India clarified was that a certified copy of a sale deed could be marked as an exhibit and its contents may be relied upon as evidence of the sale transaction, even without examining either the vendor or the vendee, in view of the enabling provision in Section 51 of the LA Act. If the acquisition is in regard to a large area of agricultural lands in a village, and the exemplar sale deed is also in respect of an agricultural land in the same village, it may be possible to rely upon the sale deed as prima facie evidence of the prevailing market value, even if such land is at the other end of the village at a distance of one or two ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table evidence) to show that the market value was much higher, the sale deed relied upon by the respondents showing a lesser value may be inferred to be undervalued, or not showing the true value. Such deeds have to be excluded from consideration as being unreliable evidence. A document which is found to be undervalued cannot be used as evidence. 31. But we have noticed a disturbing trend in some recent cases, where a court accepts the sale deed exhibited by the claimants as the basis for ascertaining the market value. But then, it also accepts a contention of the claimants that the general tendency of members of public is not to show the real value, but show a lesser value to avoid tax/stamp duty and therefore the sale deeds produced and relied on by them, should be assumed to be under valued. On such assumption, some courts have been adding some fancied percentage to the value shown by the sale deeds to arrive at what they consider to be `realistic market value'. The addition so made may vary from 10% to 100% depending upon the whims, fancies, and the perception of the learned Judge as to what is the general extent of suppression of the price in sale deeds. Such incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Sant Co.). Obviously, the land was not sold for agricultural purpose, as it is not possible to imagine plots measuring only 350 sq. yards being sold for agricultural purposes. Significantly, the other sale deeds, each of which relate to an area of one bigha and show a price of ₹ 35000/- per bigha (three deeds) and ₹ 49000/- per bigha (two deeds). It is evident the plots which were the subject matter of these sale deeds were sold as semi-urban land for residential or other non-residential purposes. There is no evidence or material to show that they were nominal or sham documents intended to create evidence of a higher market value. The variation in price between ₹ 35000 to ₹ 68571 may possibly be on account of several factors. It is possible that some plots were nearer while others were far away from roads or developed areas. In the absence of the evidence of vendors/vendees of these documents, we propose to take average of these transactions, which is approximately ₹ 50,790/- per bigha, as the market value of small plots sold for residential or non- agricultural purposes. 34. But when the market value of such small plots intended for non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue as ₹ 15,700/- per bigha in one case and ₹ 18,500/- per bigha in another case. On appeal by the claimants, the High Court excluded several sale transactions relied upon by the reference court as not inspiring confidence, and on the basis of a solitary transaction dated 10.9.1981 in regard to a small area of one bigha, increased the market value to ₹ 30,000/- per bigha. This Court held that the High Court erred in relying upon a single sale deed relating to a small extent of one bigha to determine the market value of a large extent of 5484 bighas. It further held that if that sale deed was excluded, there was no other evidence to support the increase in compensation made by the High Court. Consequently, this Court set aside the increase awarded by the High Court and restored the market value determined by the reference court. The learned Counsel for DDA submitted that a rate in that range (₹ 15700 to ₹ 18500 per bigha) should therefore be adopted for the Rithala lands also. But that decision relating to Poothkalan is not of any assistance with reference to the Rithala acquisitions for the following reasons: (i) It is now well settled that sal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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