1

REPORTABLE

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 337 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4445 OF 2020)

U.P. AWAS EVAM VIKASH PARISHAD …..APPELLANT(S)

VERSUS

ASHA RAM (D) THR. LRS ORS. …..RESPONDENT(S)

WITH

CIVIL APPEAL NO. 360 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5184 OF 2020)

CIVIL APPEAL NO. 340 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4447 OF 2020)

CIVIL APPEAL NO. 338 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4444 OF 2020)

CIVIL APPEAL NO. 361 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5185 OF 2020)

Signature Not Verified

Digitally signed by CIVIL APPEAL NO. 362 OF 2021
GEETA AHUJA
Date: 2021.03.24
10:16:51 IST (ARISING OUT OF SLP (CIVIL) NO. 5188 OF 2020)
Reason:
2

CIVIL APPEAL NO. 348 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4685 OF 2020)

CIVIL APPEAL NO. 343 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4680 OF 2020)

CIVIL APPEAL NO. 382 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5244 OF 2020)

CIVIL APPEAL NO. 363 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5190 OF 2020)

CIVIL APPEAL NO. 381 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5242 OF 2020)

CIVIL APPEAL NO. 339 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4446 OF 2020)

CIVIL APPEAL NO. 349 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4686 OF 2020)

CIVIL APPEAL NO. 383 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5245 OF 2020)

CIVIL APPEAL NO. 350 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4687 OF 2020)

CIVIL APPEAL NO. 351 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4688 OF 2020)

CIVIL APPEAL NO. 352 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4690 OF 2020)

CIVIL APPEAL NO. 384 OF 2021
3

(ARISING OUT OF SLP (CIVIL) NO. 5246 OF 2020)

CIVIL APPEAL NO. 341 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4448 OF 2020)

CIVIL APPEAL NO. 364 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5191 OF 2020)

CIVIL APPEAL NO. 353 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4691 OF 2020)

CIVIL APPEAL NO. 354 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4692 OF 2020)

CIVIL APPEAL NO. 385 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5247 OF 2020)

CIVIL APPEAL NO. 357 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4695 OF 2020)

CIVIL APPEAL NO. 365 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5192 OF 2020)

CIVIL APPEAL NO. 355 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4693 OF 2020)

CIVIL APPEAL NO. 366 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5193 OF 2020)

CIVIL APPEAL NO. 347 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4684 OF 2020)

CIVIL APPEAL NO. 342 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4679 OF 2020)
4

CIVIL APPEAL NO. 367 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5194 OF 2020)

CIVIL APPEAL NO. 358 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4696 OF 2020)

CIVIL APPEAL NO. 368 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5195 OF 2020)

CIVIL APPEAL NO. 356 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4694 OF 2020)

CIVIL APPEAL NO. 369 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5197 OF 2020)

CIVIL APPEAL NO. 344 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4681 OF 2020)

CIVIL APPEAL NO. 370 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5198 OF 2020)

CIVIL APPEAL NO. 371 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5230 OF 2020)

CIVIL APPEAL NO. 372 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5231 OF 2020)

CIVIL APPEAL NO. 373 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5232 OF 2020)

CIVIL APPEAL NO. 374 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5233 OF 2020)

CIVIL APPEAL NO. 345 OF 2021
5

(ARISING OUT OF SLP (CIVIL) NO. 4682 OF 2020)

CIVIL APPEAL NO. 386 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5248 OF 2020)

CIVIL APPEAL NO. 346 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4683 OF 2020)

CIVIL APPEAL NO. 375 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5236 OF 2020)

CIVIL APPEAL NO. 376 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5237 OF 2020)

CIVIL APPEAL NO. 377 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5238 OF 2020)

CIVIL APPEAL NO. 387 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5249 OF 2020)

CIVIL APPEAL NO. 359 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 4698 OF 2020)

CIVIL APPEAL NO. 378 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5239 OF 2020)

CIVIL APPEAL NO. 379 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5240 OF 2020)

AND

CIVIL APPEAL NO. 380 OF 2021
(ARISING OUT OF SLP (CIVIL) NO. 5241 OF 2020)
6

JUDGMENT

HEMANT GUPTA, J.

1. The present appeals arise out of an order passed by the Division Bench

of the High Court of Judicature at Allahabad on 19.07.2019 whereby a

compensation of Rs. 297/- per square yard was awarded for the land

acquired in six villages apart from the statutory benefits. In the present

set of 51 appeals, 38 appeals pertain to land situated at Village Prahlad

Garhi; 2 appeals pertain to land situated at Village Jhandapur; 3 appeals

pertain to land situated at Village Sahibabad; 2 appeals pertain to land

situated at Village Jhandapur/ Sahibabad; 1 appeal pertains to land

situated at Village Arthala and 5 appeals pertain to land situated at

Village Makanpur.

2. The appellant – U.P. Awas Evam Vikas Parishad 1 has been constituted

under the Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 1965 2. A

notification was published on 26.06.1982 by the Parishad under Section

28 of the Act intending to acquire 1229.914 acres of land. Subsequently,

a notification under Section 32 of the Act was published on 28.02.1987.

Land Acquisition Act, 18943.

3. The Special Land Acquisition Officer announced an award on 27.02.1989

awarding compensation of Rs. 50/- per square yard in respect of land of

all the six villages and compensation of Rs. 35/- per square yard was

awarded in respect of land owners owning more than 8 acres. The area

of the land for which the compensation was awarded in the six villages is

as under:

Sr. No. Name of Village Area (In Acres)
1 Arhtala 358.95
2 Jhandapur 36.947
3 Prahladgarhi 437.379
4 Makanpur 76.6156
5 Mahiuddin-Re-Kanawani 141.0734
6 Sahibabad 107.05
Total 1157.895

The remaining area measuring 72.019 acres was the land of the

Gram Panchayat or the State Government, for which no compensation

was awarded by Special Land Acquisition Officer.

4. The land owners being aggrieved of the compensation awarded by the

Special Land Acquisition Officer sought a Reference for determining the

market value. The Learned Additional District Judge while deciding the

Reference awarded Rs. 120/- per square yard as the compensation apart

from the statutory benefits vide award dated 23.05.2000.

5. The landowners as well as the Parishad filed appeals against the

decision of the Reference Court. Such appeals were decided separately

by the High Court in respect of land acquired by the above stated

Evam Vikash Parishad v. Jawahar Lal Ors.4 filed by the Parishad in

respect of land situated in Village Prahladgarhi was dismissed on

21.07.2015. The land owners have relied upon the following three sale

deeds in appeal before the High Court to claim higher compensation:

Sr. No. Date of Sale Deed Area/Village Rate per square
Yard
1 26.12.80 130 sq. mtr./Village Rs. 180/-

Sahibabad
2 12.5.80 125 sq. mtr./ Village Rs. 150/-

Sahibabad
3 19.6.82 242 sq. mtr./ Village Rs. 150/-

Sahibabad

6. The High Court considering the three sale deeds held as under:

“28. Considering the aforesaid facts and circumstances as also
the factum that the court below has already applied deduction of
25%, we do not find any fault on the part of Reference Court in
determining market value of acquired land at Rs. 120/- per sq.
yard. It can neither be said to be excessive or unreasonable, nor it
can be said that appropriate principles in determining market
value have not been considered by court below. The two
judgments cited by appellant do not help it in any manner since
the principles laid down therein have already been noticed by
court below. In these facts and circumstances, in our view, the
aforesaid point for determination formulated above is answered in
favour of respondents and against appellant.”

4 First Appeal No. 56 of 2005 decided on 21.7.2015
9

Parishad Anr.5 arising against the award of the Reference Court

dated 23.5.2000 filed by the land owners in respect of land situated in

Village Jhandapur was initially dismissed by the High Court on

16.12.2015. The land owners in the appeal relied upon the following

sale deeds in support of their contention for determining the market

value:

Sl. No. Date Nature of Area Rate (in Rs.)
document

1 05/05/82 Sale deed 125 sq. yard 150/- per sq. yard

2 08/06/82 Sale deed 50 sq. yard 200/- per sq. yard

3 15/01/86 Sale deed 60 sq. yard 200/- per sq. yard

4 13/01/86 Sale deed 107 sq. yard 200/- per sq. yard

9. The sale deeds dated 13.1.1986 and 15.1.1986 were not relied upon by

the High Court for the reason that such sale instances were of more than

3½ years after the publication of notification intending to acquire land.

The High Court found that if the compensation has to be awarded on the

basis of sale deeds dated 5.5.1982 and 8.6.1982, the compensation

would be lower than what has been awarded by the Reference Court.

The Court in its order dated 28.10.2015 held as under:

“13. We find that reliance placed by appellants on the aforesaid
sale deeds would not help claimants in any manner. In our view
the court below has already been considerate enough in
determining market value at Rs. 120/- per square yard else the
aforesaid two sale deeds, if relied, would have cause in a lower
market value. Before elaborating our aforesaid observation we

5 First Appeal No. 827 of 2000 decided on 28.10.2015
10

find it appropriate to remind ourselves with principles laid down in
last several decades on the question how market value of land
acquired forcibly under provisions of Act, 1894 should be
determined.”

above order of the High Court was taken as the basis to determine the

market value of land acquired in the said appeal. Another appeal by the

Anr.7 was decided on 01.03.2016, relying upon the earlier two orders.

11. The aforesaid orders dated 28.10.2015; 16.12.2015 and 1.3.2016 were

set aside by this Court on 9.11.2017 and the matters were remanded to

the High Court vide the following order-

“Leave granted.

The judgment of the High Court is set aside and the appeals are
remitted to the High Court for being decided afresh in accordance
with law.

The appeals are disposed of accordingly.”

12. The IA to produce additional documents as mentioned in the above
6 First Appeal No. 552 of 2001 decided on 16.12.2015
7 First Appeal No. 412 of 2001 decided on 1.3.2016
11

order has been placed along with the written submissions by the land

owners before this Court. Apart from the award by the Special Land

Acquisition Officer and the order of the Reference Court, various other

judgments pertaining to different acquisitions were produced.

13. The High Court thereafter decided the 53 appeals on 19.07.2019,

awarding a sum of Rs. 297/- per square yard as compensation for

acquiring the land of the six villages as mentioned in the notification. 51

appeals were preferred in respect of acquisition of land by the Parishad

and the others are in respect of the acquisition by Ghaziabad

Development Authority8. The High Court proceeded as if the notification

for the acquisition for the Parishad and GDA is the same and for the

same acquisition proceedings. The land acquired by the Parishad vide

notification dated 26.06.1982 is the subject matter of the present

appeals. It is pertinent to note that the said land is not for the benefit of

the GDA. The High Court in the impugned judgment held as under:

Ors. v. State of Uttar Pradesh Ors. 9 wherein compensation of Rs.

297/- per square yard was provided in respect of acquisition by the State

vide notification dated 12.9.1986 for the land situated in Village

Makanpur for planned development of Vaishali. The High Court, in a

judgment under appeal, had restricted the amount of compensation to

the amount on which Court fees was affixed. This Court held as under:

“16) Simply because the appellants had paid court fee on the
claim at the rate of Rs.115/- square yards could not be the reason
to deny the compensation at a higher rate. This could be taken
care of by directing the appellants to pay the difference in court
fee after calculating the same at the rate of Rs.297/- per square
yards.”

15. In another matter referred by the High Court, Pradeep Kumar v.

State of U.P.10, this Court had remanded the appeals to the High Court

on 16.2.2016 as it awarded Rs.135/- per square yard as compensation

vide its order dated 15.4.2015. The appeals arose out of a notification

land in Village Makanpur for planned industrial development at New

9 Civil Appeal Nos. 10429-10430 of 2017 decided on 11.09.2017
10 (2016) 6 SCC 308
13

Okhla Industrial Development Authority11 constituted under “The Uttar

Pradesh Industrial Area Development Act, 1976”. After remand by this

Court, the High Court on 21.04.2016 awarded Rs. 297/- per square yard

as the compensation for the land acquired.

16. Mr. Mishra, learned senior counsel appearing for the Parishad, argued

that the High Court has ignored the date of notification i.e. 26.6.1982 by

which the land in the present matter was acquired. In the matter of

Pradeep Kumar, the notification was dated 15.03.1988 in respect of

land located in village Makanpur at Noida. However, in the present

matter, more than 1000 acres of land situated in five other villages is to

be acquired. The land in district Ghaziabad sought to be acquired by the

Parishad is on the northern side of the National Highway-24 which

passes through Village Makanpur, whereas the land on the southern side

of National Highway is a part of Noida, District Gautam Budh Nagar.

Noida is a well-developed town as compared to the developing town of

Ghaziabad situated on the other side of the National Highway.

17. Mr. Gupta, on the other hand, vehemently argued on behalf of the land

owners that the land situated in Village Makanpur was the subject

matter of acquisition for Noida as well as GDA apart from the Parishad.

It was contended that the purpose for which the land is acquired or the

authority which acquired the land is inconsequential as the land owners

are entitled to compensation irrespective of any such factors. In the

written submissions, reference has been made to the statement of
11 For short, ‘Noida’
14

Inderraj Singh (PW-1) to submit that at the time of acquisition, there

were industrial units as well as residential colonies of Vaishali and

Kaushambi. Reliance was placed upon finding of the Reference Court

which is to the following effect:

“10. From the above averments it is proved that the position and
status of disputed acquired land is of high quality and these lands
are of good potential with a view to productivity and other usages
and is fit for residential and commercial capacity.”

18. In the written submissions filed on behalf of the land owners, two maps

have also been referred. First map is of Ghaziabad which is on the

northern side of National Highway-24 and the second map is stated to

be of an area now covered within the jurisdiction of Noida, i.e. in respect

of Chalera Banger, Bhangel Begampur, Nagla Charandas, Tilpatabad,

Kakrana Khawaspur. Such map submitted with the written submissions is

not legible. It is submitted that the Village Makanpur is close to Delhi as

compared to the above said villages which are now parts of Noida. It

has been stated that a compensation of Rs.297/- per square yard has

been awarded under the notification dated 19.12.1980 for the land

situated in Village Makanpur, hence, the present land owners are also

entitled to the same amount of compensation. As per the argument of

Mr. Gupta, the land acquired is better located than the land which is the

subject matter of acquisition for Noida. The distances of the villages

presently under the jurisdiction of Noida and Ghaziabad from the

borders of Delhi have also been submitted before us. Though, such
15

distances are not part of the pleadings or evidence before the Reference

Court or the High Court, the said table has been reproduced hereunder:

“There is no dispute that landowners of village across NH-24, ex-
amples of which were cited before this Court during the course of
hearing have all been awarded compensation @ Rs.297/- per
square yard. The approximate distance to Delhi from the villages
involved in the present case and those across NH-24 is as under:

S. Village under Approximate Village under Ghaziabad Approximate
No. Ghaziabad Distance jurisdiction at the Distance
jurisdiction (in KM) relevant time [in KM]
[presently under Noida]
1 Arthla 6 Chalera Banger 6.5
2 Jhandapur 3.5 Bhangel 12
3 Prahladgarhi 3.5 Begampur 8
4 Makanpur 3 Nagla Charandas 13
5 Mohiuddinpur 6 Tilpatabad 14
Kanavani
6 Sahibabad 3.5 Chhalera Khadar 5
7 — — Kakrana 13
Khawaspur

The above table would show that for villages which are at a dis-
tance of 13-14 km from Delhi, have been awarded compensation
@ Rs.297/- per square yard and therefore the respondents in the
present case deserve compensation at least @ Rs.297/- per
square yard, if not more.”

19. In the written submissions submitted on behalf of Shri Rohit Kumar

Singh, learned counsel for the land owners, it is asserted that the State

Government has decided that 731 acres of land would be carved out

from the total land acquired in 1982 and handed over to the GDA. It is

Act on 28.2.1987 in respect of 731 acres of land. In the present set of

appeals, we are not dealing with the acquisition of land intended to be
16

28.2.1987. Mr. Singh in the written submissions has submitted that the

possession was taken over by the GDA on 14.6.1988 and 29.6.1988

which was based upon development work taken place from 1982

onwards. We do not find such facts emanate from the orders passed by

the Special Land Acquisition Officer, the Reference Court and the order

of the High Court. The land acquired by the GDA is not part of

determination of the compensation in the present set of appeals.

20. The principles of determining the market value are delineated under

some of the judgments are referred hereinafter-

“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-

xx xx xx

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;”
17

21. A three Judge Bench of this Court 12 indicated methods of valuation to be

adopted to ascertain the market value of land on the date of the

paid within a reasonable time in bona fide transactions of purchase of

the lands acquired or the lands adjacent to the lands acquired and

possessing similar advantages; and (iii) a number of years’ purchase of

the actual or immediately prospective profits of the lands acquired.

22. This Court13 held that the acid test which the court should always adopt

in determining the market value in matters of compulsory acquisition is

to eschew feats of imagination and sit in the armchair of a prudent

willing purchaser. It was held as under:

“6. No prudent purchaser would purchase large extent of land on
the basis of sale of a small extent of land in the open market. 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, it should consider whether the willing vendee would
offer the rate at which the trial court proposes to determine the
compensation. Taking these facts into consideration, we are of the
view that the reasonable and adequate compensation for the
lands would be at a net rate of Rs 22 per sq. mtr., after giving
deduction of 1/3rd of the amount towards developmental charges.
Therefore, the claimants would be entitled to the compensation @
Rs 22 per sq. mtr. They are also entitled to the statutory benefits
on the enhanced compensation.”

23. This Court14 has also held that in fixation of rate of compensation under

that has to spring from the totality of evidence, the pattern of rate, the

pattern of escalation and escalation of price in the years preceding and

held that:

24. Further, this Court15 has held that for determining the market value of

the land under acquisition, suitable adjustments have to be made while

considering the various positive and negative factors. The following

observations have been made-

“18. One of the principles for determination of the amount of
compensation for acquisition of land would be the willingness of
an informed buyer to offer the price therefor. It is beyond any cavil
that the price of the land which a willing and informed buyer
would offer would be different in the cases where the owner is in
possession and enjoyment of the property and in the cases where
he is not.

19. Market value is ordinarily the price the property may fetch in
the open market if sold by a willing seller unaffected by the special

15 Viluben Jhalejar Contractor (Dead) by LRs. v. State of Gujarat, (2005) 4 SCC 789
19

xx xx xx

21. Whereas a smaller plot may be within the reach of many, a
large block of land will have to be developed preparing a layout
plan, carving out roads, leaving open spaces, plotting out smaller
plots, waiting for purchasers and the hazards of an entrepreneur.
Such development charges may range between 20% and 50% of
the total price.”

25. This Court16 has delineated the following factors responsible for increase

in land prices such as situation of the land, nature of development in

surrounding area, availability of land for development in the area, and

demand for the land in the area. It was held:

“16. Much more unsafe is the recent trend to determine the
market value of acquired lands with reference to future sale
transactions or acquisitions. To illustrate, if the market value of a
land acquired in 1992 has to be determined and if there are no
sale transactions/acquisitions of 1991 or 1992 (prior to the date of
preliminary notification), the statistics relating to
sales/acquisitions in future, say of the years 1994-1995 or 1995-

1996 are taken as the base price and the market value in 1992 is
worked back by making deductions at the rate of 10% to 15% per
annum. How far is this safe? One of the fundamental principles of
valuation is that the transactions subsequent to the acquisition
should be ignored for determining the market value of acquired
lands, as the very acquisition and the consequential development
would accelerate the overall development of the surrounding
areas resulting in a sudden or steep spurt in the prices. Let us
illustrate. Let us assume there was no development activity in a
particular area. The appreciation in market price in such area
would be slow and minimal. But if some lands in that area are

acquired for a residential/commercial/industrial layout, there will
be all round development and improvement in the
infrastructure/amenities/facilities in the next one or two years, as
a result of which the surrounding lands will become more valuable.
Even if there is no actual improvement in infrastructure,
the potential and possibility of improvement on account of the
proposed residential/commercial/industrial layout will result in a
higher rate of escalation in prices. As a result, if the annual
increase in market value was around 10% per annum before the
acquisition, the annual increase of market value of lands in the
areas neighbouring the acquired land, will become much more,
say 20% to 30%, or even more on account of the
development/proposed development. Therefore, if the percentage
to be added with reference to previous acquisitions/sale
transactions is 10% per annum, the percentage to be deducted to
arrive at a market value with reference to future acquisitions/sale
transactions should not be 10% per annum, but much more. The
percentage of standard increase becomes unreliable. Courts
should, therefore, avoid determination of market value with
reference to subsequent/future transactions. Even if it becomes
inevitable, there should be greater caution in applying the prices
fetched for transactions in future. Be that as it may.”

26. The relationship between the market value of land and its potentiality

has also been discussed by this Court17 wherein it was observed that-

5. For ascertaining the market value of the land, the potentiality
of the acquired land should also be taken into consideration.
Potentiality means capacity or possibility for changing or
developing into state of actuality. It is well settled that market
value of a property has to be determined having due regard to its
existing condition with all its existing advantages and its potential
possibility when led out in its most advantageous manner. The
question whether a land has potential value or not, is primarily
one of fact depending upon its condition, situation, user to which it
is put or is reasonably capable of being put and proximity to
residential, commercial or industrial areas or institutions. The
existing amenities like water, electricity, possibility of their further
extension, whether near about town is developing or has prospect
of development have to be taken into consideration…”

27. In another three Judge Bench of this Court18, the Court held as under:

28. The land forming the subject matter of the present appeals was acquired

26.6.1982. Therefore, firstly, the attempt to determine the market value

should be based on the sale instances, which are proximate to both the

be acquired. The land owners have relied upon seven sale instances in

respect of villages of which the land was acquired. Out of such seven

sale instances, two are almost four years later than the publication of

29. The potentiality of the acquired land is one of the primary factors to be

taken into consideration to determine the market value of the land.

Potentiality refers to the capacity or possibility for changing or

developing into the state of actuality. 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. The question whether a land has

potential value or not primarily depends upon its condition, situation,

use to which it is put or its reasonable capability of being put and also its

proximity to residential, commercial or industrial areas/institutions. The

existing amenities like water, electricity as well as the possibility of their

further extension, for instance whether near about town is developing or

has prospects of development have to be taken into consideration. It

also depends upon the connectivity and the overall development of the

area.

30. The record in the present matter does not suggest that there were large

scale development activities. The evidence is rather of sale of small

areas. There is nothing on record as to when the industrial units were set

up and what was the cost of land. Furthermore, there are no sale

instances of land situated in Village Makanpur prior to date of
23

notification i.e. 26.6.1982. The sale instances produced by the land

owners pertain to Village Sahibabad and Jhandapur which are at a

distance of about 3.5 kms from Delhi border. This Court 19 while dealing

with comparable sale instances has held that-

31. The sale instances of a smaller area have to be considered while keeping

in view the principle that where a large area is the subject matter of

acquisition, suitable deduction is required to be made as no prudent

purchaser would purchase large extent of land on the basis of sale of a

small extent in the open market. The Court thus has to consider whether

the willing vendee would offer the rate at which the trial court proposes

to determine the compensation. This Court has even provided for 50%

deduction for development charges on the price mentioned in the sale

deed.20

32. The land owners have not produced any other sale deed or award of

compensation on account of acquisition of land in the northern side of

National Highway-24 prior to notification in question. It could thus lead

to an inference that there were not many sale transactions prior to the

notification in question. Some industries might have set up their units

keeping in view the proximity to Delhi but details regarding when such

units were set up and at what price, these units purchased the land have

not been brought on record. As mentioned earlier, the market value has

to be determined on the basis of what a purchaser is willing to pay on

the date of notification. It cannot be as per any rule of thumb without

any reference to the prevalent market value on the date of acquisition

on record.

33. The Reference Court had applied 1/3rd deduction in respect of land

situated in Village Sahibabad on the sale price of Rs.180/- per square

meters of land measuring 130 square meters vide sale deed dated

26.12.1980 whereas the deduction of 40% deduction in respect of land

situated in Village Jhandapur on the sale price of Rs.200/- per square

meters of land measuring 50 square yards vide sale deed dated

5.5.1982 in view of the fact that the area sold was very small. The High

Court has affirmed such deduction. Thus, we are of the view that the

same is reasonable and adequate deduction. Therefore, the market

value determined at Rs.120/- per square yard is the appropriate market

value on the basis of comparable sale instances.

34. The other method to determine the market value is the judicial

precedents which are proximate to the time of the acquisition and

proximate to the subject matter of land acquired. A table of judicial

situated and the authority for which the land was acquired to arrive at

the market value is produced below. Such table includes the judgments

referred to by Mr. Gupta that a sum of Rs.297/- per square yard is the

market value of the land acquired.

Sl. Date of Acquisition Purpose of Case Details Compensatio Supreme Court
No. publication pertain(s) to Acquisition n per square
of Village/Villages yard awarded
Notification by the High
u/s 4 Court
1. 26.6.1982 Makanpur UP Awas- FA 56 of 2005 Rs. 120/- per SLP (Civil) No.
parishad decided on square yard 4636 of 2016
21.7.2015 awarded by dismissed on
Reference 28.3.2016
Court
maintained.

2 15.3.1988 Makanpur Noida FA No. 522 of 297/- Earlier Civil Appeal
2009 No. 1506-1507 of
Pradeep Kumar 2016 (SLP(Civil)
v. State of UP Nos. 25237-25248
Anr. and other of 2015) –
connected Pradeep Kumar
appeals etc. etc. v. State of
decided on U.P. Anr. allowed
21.4.2016 on 16.2.2016
(2016) 6 SCC 308
3 12.9.1986 Makanpur, Ghaziabad FA No. 451 of Rs.115/- Civil Appeals No.
Developmen 1999 10429-10430 of
t Authority (Narendra v. 2017 preferred by
State of U.P. land owners was
Ors.) decided allowed on
on 5.12.2014 11.9.2017 and the
compensation was
enhanced to
Rs.297/- per
square yards

4 28.02.1987 Makanpur Ghaziabad FA No. 910 of 297/- SLP (Civil) No.
Developmen 2000 (GDA v. 5815 of 2015 with
t Authority Kashi Ram connected SLPs
Ors.) with filed by GDA
Connected dismissed on
appeals by the 5.5.2015
land owners
decided on
13.11.2014
26

7 1983, 1986 Bhangel Noida FA No. Rs.297/- SLP(C) No. 15867-
and 1988 Begumpur 564/1997 15883 of 2013 by
Khazan Ors. Noida dismissed on
v. State of U.P. 5.2.2014
and other
connected
appeals
decided on
11.10.2012
1986, 1988, Nagla
1991 and Charandas,
1992 Geha Tilapatabagh

Chhalera Bangar
8 24.03.1988 Bhangel Noida FA No. Rs.297/- Appeals preferred
Begumpur 1056/1999 by Authority in CA
(Raghuraj No. 1593-1594 of
Singh Ors. v. 2011 was
State of U.P. dismissed on
Anr.) 13.1.2015
With
Connected
appeals
Decided on
19.5.2010
9 27.2.1988 Chhalera Bangar Noida FA No. 744 of Rs. 297.50 SLP No. 17209 of
Corrigendum 2001 2008 NOIDA vs.
24.6.1989 Jagdish Jagdish Chandra
Chandra and dismissed on
other appeals 5.2.2014
decided on
14.12.2007

Chhalera Bangar
27

35. The order passed by this Court on 9.11.2017 for fresh determination on

the basis of additional documents was based on the judgments

pertaining to above-mentioned acquisitions. In terms of the order

passed by this Court, no additional evidence was produced before the

High Court and the submissions were confined to the material already on

record. Such judgments, as discussed above, are later in time except

the land situated in Chhalera Khadar, now forming part of Noida, for

which notification was published on 19.12.1980. It is pertinent to note

that the proximity from Delhi border would not be the determining factor

but the distance between the two villages inter se would be relevant as

Noida spread over a large area, has different access roads from Delhi

and Ghaziabad. However, such distance has not been disclosed.

36. The High Court in Jagdish Chandra Ors. v. New Okhla Industrial

Development Authority, NOIDA Anr.21 had determined Rs. 297/- as

the market value of the land situated in Chhalera Bangar, now forming

part of Noida, intended to be acquired vide notification published under

advantageous location of Noida when it held that:

“…Valuation of the landed property is enormously rising day by
day. The location of the land, as stated, is nearer to developed
area of NOIDA. The land is acquired for the purpose of making
park. Neither it is required for commercial purpose nor for
residential purpose. No question of largeness of the land is
available. Therefore, we are not aware what is the basis of

21 First Appeal No. 744 of 2001 decided on 14.12.2007
28

deduction.”

37. The first notification for acquisition of land in Village Makanpur, the

village which is located on both sides of National Highway-24, was

published on 26.6.1982, for the land situated on the northern side of the

National Highway, that is the notification in question.

38. In Pradeep Kumar, after remand, the High Court awarded Rs.297/- per

square yard as the compensation in pursuance of notification dated

15.3.1988 of the land situated in Village Makanpur (Sr. No. 2 in the

above table) for the benefit of Noida. This Court in Narendra awarded

compensation of Rs.297/- per square yard for the land acquired in

LA Act published on 12.9.1986 (Sr. No. 2 in the above table). Such land

is in the area of Noida on the southern side of the National Highway.

39. The other villages, subject matter of acquisition i.e. Arthla, Jhandapur,

Prahladgarhi, Mahiuddin-Re-Kanawani and Sahibabad are farther away

from the National Highway than the land situated in Village Makanpur.

Since the Special Land Acquisition Collector as well as the Reference

Court has determined uniform compensation for the entire land

acquired, therefore, we do not find that the compensation awarded of

land situated in Village Makanpur on the basis of notification 4-5 years

later is a reasonable yardstick for determining compensation of over

1100 acres of land in the other villages. There is no judicial precedent in

respect of land situated in other five villages which are subject matter of
29

the acquisition in the present group of appeals. The orders passed by

this Court relied upon are either subsequent to the notification in

question and/or for the acquisition for the purpose of planned

development of Noida.

40. A compensation of Rs. 297/- per square yard was awarded for land

acquired for the purpose of GDA vide notification dated 28.2.1987 and

16.8.1988 (Sr. No. 4 5 in the above table). The said acquisition was

five years after the acquisition in question. The development activity

initiated vide notification dated 26.6.1982 would be relevant to

determine the market value on account of acquisition by virtue of the

subsequent notification, but time gap of more than five years will not

entail the same amount of compensation in respect of the land acquired

five years earlier.

41. The compensation determined on the basis of a notification five years

later cannot be a yardstick for determining compensation of the land

which is subject matter of present acquisition years earlier. Still further,

the High Court was not justified in observing that gaps of few years in

the notification have been ignored by this Court. In fact, on the

contrary, the High Court has failed to note that the date of notification

for the acquisition of land for the benefit of Parishad is five years earlier

than those in the judgments relied upon by the High Court.

42. In respect of land situated on northern side of National Highway, the

land was acquired vide notifications dated 28.2.1987 and 12.9.1986 in
30

the case of Narendra and Kashi; and on 16.8.1988 in the case of Jai

Prakash. Whereas, on the southern side of National Highway for the

benefit of Noida, the land of Village Makanpur became subject matter of

acquisition vide notification dated 10.3.1988 in the case of Pradeep

Kumar and on 15.3.1988 in the case of Charan Kaur.

43. For the land situated on the northern side of the National Highway for

the benefit of the Parishad, the acquisition has attained finality with the

dismissal of SLP (Civil) No. 4636 of 2016 on 28.3.2016. The

compensation assessed in the other aforementioned cases is

subsequent to the date of notification, therefore, none of the orders are

determinative of the amount of compensation. Hence, the market value

as determined by the High Court cannot be sustained either on the basis

of the sale deeds, or on the strength of judicial orders. There is no

justification of enhancement of compensation awarded by the Reference

Court i.e. Rs.120/- per square yard.

44. Consequently, the present appeals are hereby allowed. The order

passed by the High Court in the appeals preferred by the land owners is

set aside and the compensation awarded by the Reference Court @

Rs.120/- per square yard apart from statutory benefits is restored.

………………………………………J.

(UDAY UMESH LALIT)
31

………………………………………J.

(HEMANT GUPTA)

………………………………………J.

(S. RAVINDRA BHAT)

NEW DELHI;

MARCH 23, 2021.