Explore the in-depth legal analysis provided by the court in a recent land acquisition compensation case. The case delves into the complexities of determining market value, emphasizing the need for considerations beyond simplistic valuation methods. Stay tuned to uncover the nuances of the court’s decision and its implications on future land acquisition cases.
Facts
- The Reference Court enhanced the amount of compensation to Rs.21/- per sq. ft.
- The Land Acquisition Officer declared the award determining the total compensation @ Rs.14,33,703/- (at Rs.13.32 per sq. ft.).
- BSNL felt aggrieved by the High Court’s decision to enhance the compensation to Rs.174/- per sq. ft., and appealed the decision.
- The High Court’s decision resulted in an increase of more than 800% of the Reference Court’s compensation and about 1300% of the compensation awarded by the Land Acquisition Officer.
- Land owned by respondents in Yavatmal, Maharashtra was acquired by State Govt under Land Acquisition Act for BSNL.
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Arguments
- PW3 admitted that the Ready Reckoner was prepared only for collecting stamp duty, not for determining market rates
- BSNL’s advocate argued that relying solely on Ready Reckoner rates to enhance compensation was erroneous
- The High Court’s reliance on the Full Bench decision of the Bombay High Court was criticized for not following decisions of the Supreme Court
- State counsel agreed with BSNL’s arguments regarding the error in awarding excessive compensation
- Original claimants’ advocate supported the High Court’s decision to enhance compensation based on Government Resolution and Ready Reckoner
- Government Resolution of 31.10.1994 mandates valuation as per Ready Reckoner or capitalization method, whichever is higher
- Ready Reckoner is prepared considering geographical conditions and buying/selling transactions
- The basis for the increase in compensation by over 800% was the Ready Reckoner rates, deemed impermissible by Supreme Court
- The sale transactions cannot be for a lesser amount than the market price.
- The value of the land in the documents may be higher than the value proposed by the Ready Reckoner.
- Prices in the Ready Reckoner are determined following the procedure required under the Maharashtra Stamp (Determination of True Market Value of property) Rules, 1995.
- Government policy decision to consider Ready Reckoner prices for determining compensation in land acquisition cases is beyond judicial review if not under challenge.
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Analysis
- The Basic Valuation Register cannot form the foundation to determine market value.
- Opinion of experts, price in bona fide transactions, or number of years purchase of profits are relevant methods to determine market value.
- High Court erred in not following the binding decisions in Jawajee Nagnatham and Krishi Utpadan Mandi Samiti cases.
- Mutation entries in revenue records are not evidence unless parties to the transactions are examined.
- Government instruction to determine market value must have statutory foundation.
- Entries in the Basic Valuation Register do not bind parties for stamp duty purposes.
- The Court must consider relevant methods to determine market value in Land Acquisition cases.
- No express power under Section 47-A for the Government to determine market value for stamp duty purposes.
- The burden of proof is on the claimant to prove the prevailing market value as on the date of notification published in the State Gazette.
- The Ready Reckoner land prices cannot be the sole basis for determining compensation under the Land Acquisition Act.
- A reference under Section 18 of the Land Acquisition Act is not an appeal against the award and should be treated as an original proceeding.
- The court must consider various factors such as location, area, and development status of the land to determine market value.
- The Ready Reckoner rates are uniform for all lands in an area and cannot reflect the diverse market values accurately.
- The court should analyze genuine instances for pricing comparisons and adjust for plus and minus factors.
- Materials presented by both parties can be considered for determining market value.
- The market value is to be assessed as of the date of notification under Section 4 of the Land Acquisition Act.
- Assumptions should be made that the hypothetical purchaser and vendor are willing to buy and sell at reasonable prices.
- The Basic Valuation Register for collecting stamp duty has no statutory basis for determining market value.
- Uniform market value of land cannot be determined for compensation under Land Acquisition Act.
- Market value of lands vary from place to place due to various factors.
- Different factors affect the market value of land.
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Decision
- The impugned judgment and order passed by the High Court is quashed and set aside
- The judgment and order passed by the Reference Court determining the compensation rate at Rs.21 per sq. ft. is restored
- The present appeal is allowed and succeeds
- No order as to costs in the given circumstances
Case Title: BHARAT SANCHAR NIGAM LIMITED Vs. M/S NEMICHAND DAMODARDAS (2022 INSC 697)
Case Number: C.A. No.-003478-003478 / 2022
