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MODE OF CALCULATING COMPENSATION FOR LAND ACQUISITION RE-EXPLAINED BY SUPREME COURT 2012 SC

JUSTICE P. Sathasivam, and JUSTICE J. Chelameswar of The Supreme Court of India in the case of Mehrawal Khewaji Trust(Regd) ... vs State Of Punjab & Ors. Decided on 27 April, 2012 has held that "It is clear that when there are several exemplars with reference to similar lands, it is the general rule that the highest of the exemplars, if it is satisfied, that it is a bona fide transaction has to be considered and accepted. When the land is being compulsorily taken away from a person, he is entitled to the highest value which similar land in the locality is shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition. In our view, it seems to be only fair that where sale deeds pertaining to different transactions are relied on behalf of the Government, the transaction representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course. It is not desirable to take an average of various sale deeds placed before the authority/court for fixing fair compensation."

QUOTED CITATIONS


In Ranjit Singh vs. Union Territory of Chandigarh (1992) 3 SCC 659, this Court applied the rule of 10% yearly increase for award of higher compensation.


In Delhi Development Authority vs. Bali Ram Sharma & Ors. (2004) 6 SCC 533, this Court considered a batch of appeals and applied the rule of annual increase for grant of higher compensation.


In ONGC Ltd. vs. Rameshbhai Jivanbhai Patel (2008) 14 SCC 745, this Court held that where the acquired land is in urban/semi-urban areas, increase can be to the tune of 10% to 15% per annum and if the acquired land is situated in rural areas, increase can be between 5% to 7.5% per annum.


In Union of India vs. Harpat Singh & Ors. (2009) 14 SCC 375, this Court applied the rule of 10% increase per annum. Based on the above principle, we fix the annual increase at 12% per annum and with that rate of increase, the market value of the appellants’ land would come to Rs.1,82,000 per acre as on the date of notification.

Constitution Bench in the case of Sunder vs. Union of India, (2001) 7 SCC 211. While considering various decisions of the High Courts and approving the decision of the Punjab and Haryana High Court rendered in State of Haryana vs. Kailashwati, AIR 1980 P&H 117, this Court held that the interest awardable under Section 28 would include within its ambit both the market value and the statutory solatium. In view of the same, it is clear that the person entitled to the compensation awarded is also entitled to get interest on the aggregate amount including solatium. The above position has been further clarified by a subsequent Constitution Bench judgment in Gurpreet Singh vs. Union of India, (2006) 8 SCC 457.


Sri Rani M. Vijayalakshmamma Rao Bahadur, Ranee of Vuyyur vs. Collector of Madras, (1969) 1 MLJ 45 (SC). In this case, this Court has held thus: “… where sale deeds pertaining to different transactions are relied on behalf of the Government, that representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course. In any case we see no reason why an average of two sale deeds should have been taken in this case.”


In State of Punjab and Another vs. Hansraj (Dead) by LRS. Sohan Singh and Others, (1994) 5 SCC 734, this Court has held that method of working out the ‘average price’ paid under different sale transactions is not proper and that one should not have, ordinarily recourse to such method. This Court further held that the bona fide sale transactions proximate to the point of acquisition of the lands situated in the neighbourhood of the acquired lands are the real basis to determine the market value.


Anjani Molu Dessai vs. State of Goa and Another, (2010) 13 SCC 710, after relying upon the earlier decisions of this Court in M.Vijayalakshmamma Rao Bahadur (supra) and Hansraj (supra) held in para 20 as under: “20. The legal position is that even where there are several exemplars with reference to similar lands, usually the highest of the exemplars, which is a bona fide transaction, will be considered.” Again, in para 23, it was held that “the averaging of the prices under the two sale deeds was not justified.”

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