Supreme Court settles compensation for land acquisition under Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 1965: U.P. Awas Evam Vikas Parishad vs. Asha Ram (23 March 2021)

Date of the Judgment: 23 March 2021
Citation: U.P. Awas Evam Vikas Parishad vs. Asha Ram (D) Thr. Lrs & Ors. CIVIL APPEAL NO. 337 OF 2021
Judges: Uday Umesh Lalit, J., Hemant Gupta, J., S. Ravindra Bhat, J.
Can the compensation for land acquired in 1982 be determined using sale instances and judicial precedents from 1986-1988? The Supreme Court of India addressed this question in a batch of appeals concerning land acquisition in Uttar Pradesh. The core issue revolved around the appropriate compensation for land acquired by the U.P. Awas Evam Vikas Parishad, with the Court ultimately setting aside the High Court’s enhanced compensation and restoring the Reference Court’s original award. The judgment was authored by Justice Hemant Gupta, with a three-judge bench.

Case Background

The U.P. Awas Evam Vikas Parishad (the Parishad) acquired 1229.914 acres of land across six villages in Uttar Pradesh. The initial notification for acquisition was published on 26 June 1982, under Section 28 of the Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 1965. A subsequent notification under Section 32 of the same Act was issued on 28 February 1987. The Special Land Acquisition Officer awarded compensation of Rs. 50 per square yard for all villages, and Rs. 35 per square yard for land owners with more than 8 acres, on 27 February 1989. Aggrieved by this, the landowners sought a Reference for determination of market value. The Additional District Judge awarded Rs. 120 per square yard on 23 May 2000. Both the landowners and the Parishad filed appeals against this decision.

Timeline

Course of Proceedings

The landowners, dissatisfied with the compensation awarded by the Special Land Acquisition Officer, sought a Reference. The Additional District Judge enhanced the compensation to Rs. 120 per square yard. Both the landowners and the Parishad filed appeals in the High Court. The High Court initially dismissed the Parishad’s appeal and later dismissed the landowners’ appeal in respect of land situated in Village Jhandapur. However, the Supreme Court set aside these orders and remanded the matters back to the High Court for fresh consideration. The High Court then awarded a compensation of Rs. 297 per square yard, which was challenged in the present appeals before the Supreme Court.

Legal Framework

The Supreme Court considered the following legal provisions:

• Section 28 of the Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 1965: This section allows the Parishad to publish a notification for the intention to acquire land. It is equivalent to Section 4 of the Land Acquisition Act, 1894.
• Section 32 of the Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 1965: This section allows the Parishad to publish a notification for the actual acquisition of land. It is equivalent to Section 6 of the Land Acquisition Act, 1894.
• Section 23 of the Land Acquisition Act, 1894: This section outlines the matters to be considered in determining compensation for land acquired. It states that the court shall consider the market value of the land at the date of the notification under Section 4(1).
  
  “23. Matters to be considered in determining compensation. – (1) In determining the amount of compensation to be awarded for land acquired under this Act, the Court shall take into consideration- first, the market value of the land at the date of the publication of the notification under Section 4, sub-section (1);”
• Section 24 of the Land Acquisition Act, 1894: This section specifies the matters to be neglected in determining compensation. It states that any increase to the value of the land acquired, likely to accrue from the use to which it will be put when acquired, should be neglected.
  
  “24. Matters to be neglected in determining compensation. – xx xx xx fifthly, any increase to the value of the land acquired likely to accrue from the use to which it will be put when acquired; sixthly, any increase to the value of the other land of the person interested likely to accrue from the use to which the land acquired will be put;”

The Court emphasized that the market value of the land should be determined as of the date of the initial notification for acquisition and that any increase in value due to the acquisition itself should be ignored.

Arguments

Arguments on behalf of the Parishad:

• The Parishad argued that the High Court ignored the date of the notification for acquisition, which was 26 June 1982.
• The Parishad contended that the High Court incorrectly relied on judgments concerning land in Village Makanpur, acquired in 1986 and 1988 for Noida, which is a well-developed town compared to Ghaziabad.
• The Parishad submitted that the land acquired by them is on the northern side of National Highway-24, while the land acquired for Noida is on the southern side.

Arguments on behalf of the Landowners:

• The landowners contended that the purpose of acquisition and the acquiring authority are irrelevant.
• They argued that the land was of high quality with good potential for residential and commercial use.
• They submitted that the land acquired was better located than the land acquired for Noida.
• They relied on the fact that compensation of Rs. 297 per square yard was awarded for land in Village Makanpur acquired in 1980.
• They also argued that the State Government had decided to hand over 731 acres of the acquired land to the Ghaziabad Development Authority (GDA) and possession was taken over by GDA in 1988, based on development work from 1982.

The landowners innovatively argued that the purpose of acquisition and the acquiring authority should not be a factor in determining the compensation. They emphasized the potential of the land and its proximity to developed areas.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue was:

1. Whether the High Court was correct in determining the compensation at Rs. 297 per square yard by relying on sale instances and judicial precedents of later dates and for land acquired for different purposes?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

The Court also considered Sections 23 and 24 of the Land Acquisition Act, 1894, as well as Sections 28 and 32 of the Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 1965.

Judgment

How each authority was viewed by the Court?

• The Court relied on Smt. Tribeni Devi & Ors. v. Collector of Ranchi and Vice Versa, Gujarat Industrial Development Corpn. v. Narottambhai Morarbhai & Anr., Land Acquisition Officer v. B. Vijender Reddy & Ors., Viluben Jhalejar Contractor (Dead) by LRs. v. State of Gujarat, General Manager, Oil and Natural Gas Corporation Limited v. Rameshbhai Jivanbhai Patel & Anr., Atma Singh (Dead) through LRs & Ors. v. State of Haryana & Anr., Revenue Divisional Officer-cum-Land Acquisition Officer v. Shaik Azam Saheb & Ors., Mohammad Raofuddin v. Land Acquisition Officer, and Himmat Singh & Ors. v. State of Madhya Pradesh & Anr. for the principles of determining market value.
• The Court distinguished Jagdish Chandra & Ors. v. New Okhla Industrial Development Authority, NOIDA & Anr., Narendra & Ors. v. State of Uttar Pradesh & Ors., and Pradeep Kumar v. State of U.P., stating that these cases were not applicable due to differences in dates of notification, purpose of acquisition, and location of land.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Date of Notification: The Court emphasized that the market value must be determined as of the date of the initial notification (26 June 1982) and not based on subsequent acquisitions.
• Comparable Sale Instances: The Court found that the sale instances relied upon by the landowners were either too far removed in time or involved smaller plots of land, requiring deductions for development charges.
• Judicial Precedents: The Court distinguished the judgments relied upon by the High Court, noting that they pertained to land acquired for different purposes (Noida) and at later dates.
• Location of Land: The Court noted that the land acquired by the Parishad was on the northern side of National Highway-24, while the land acquired for Noida was on the southern side, and that proximity to Delhi was not the sole determining factor.

The Court’s reasoning was based on a careful analysis of the facts and the applicable legal principles, with a greater emphasis on the legal aspects of land acquisition and valuation.

Logical Reasoning

The Court rejected the High Court’s reliance on later sale instances and judicial precedents, emphasizing the importance of determining market value based on the date of the initial notification. The Court also highlighted the need for appropriate deductions for development charges when considering sale instances of smaller plots of land.

The Supreme Court’s decision was unanimous, with all three judges concurring in the judgment.

The Court quoted the following from the judgment:

“The acid test the court should always adopt in determining market value in the matter of compulsory acquisition would be to eschew feats of imagination, sit in the armchair of a prudent willing purchaser…”

“The market value of a property has to be determined while having due regard to its existing conditions with all the existing advantages and its potential possibility when led out in its most advantageous manner.”

“…comparable sale instances of similar lands in the neighbourhood at or about the date of notification under Section 4(1) of the Act are the best guide for determination of the market value of the land…”

Key Takeaways

• The market value of land acquired under the Land Acquisition Act must be determined as of the date of the initial notification for acquisition.
• Sale instances of smaller plots of land require appropriate deductions for development charges when used to determine the market value of larger areas.
• Judicial precedents must be relevant to the specific case, considering the date of notification, purpose of acquisition, and location of the land.
• The purpose of acquisition and the acquiring authority are relevant factors in determining market value.

Directions

The Supreme Court directed that the compensation awarded by the Reference Court at Rs. 120 per square yard, along with statutory benefits, be restored.

Development of Law

The ratio decidendi of this case is that the market value of land acquired under the Land Acquisition Act must be determined as of the date of the initial notification for acquisition and not based on subsequent acquisitions or judicial precedents pertaining to different land acquisitions. This case reinforces the established principles of land valuation and highlights the importance of considering the specific facts and circumstances of each acquisition. There is no change in the previous position of law.

Conclusion

The Supreme Court’s judgment in U.P. Awas Evam Vikas Parishad vs. Asha Ram clarifies the principles for determining compensation in land acquisition cases. The Court emphasized the importance of the date of notification, comparable sale instances, and relevant judicial precedents. By setting aside the High Court’s enhanced compensation and restoring the Reference Court’s original award, the Supreme Court reaffirmed the need for a balanced approach that considers both the interests of the landowners and the public.