Prices In Ready Reckoner Cannot Form Basis For Determining Compensation Under Land Acquisition Act: SC

The two-judge bench of Justice M. R. Shah, and Justice B. V. Nagarathna while allowing an appeal preferred by the BSNL against the Order of the High Court relying on Ready Reckoner to enhance compensation for lands acquired under the Land Acquisition Act has held that uniform rates for all the lands in the area as mentioned in the Ready Reckoner cannot be the basis for determination of compensation for the lands acquired under the Land Acquisition Act.

"Therefore, the rates mentioned in the Ready Reckoner, which are basically for the purpose of collection of stamp duty and as observed hereinabove, which are the uniform rates for all the lands in the area, cannot be the basis for determination of the compensation for the lands acquired under the Land Acquisition Act.", the Bench observed.

Facts & History of the Case

The lands at Yavatmal, Maharahtra were acquired by the State Government for BSNL. The Land Acquisition Officer had originally declared an award of Rs.14,33,703/-, at Rs.13.32 per sq. ft.. The landowners, approached the Reference Court where the award was enhanced to Rs.21/- per sq. ft. Upon further appeal to the High Court the amount of compensation was enhanced to Rs.174/- per sq. ft.

Feeling aggrieved by the Order of the High Court of Bombay enhancing the compensation relying on the prevailing Ready Reckoner rates of the land, the BSNL approached the Supreme Court.

Issue – Whether process in Ready Reckoner can be considered as the basis for determining compensation of lands acquired under the Land Acquisition Act?

R.D. Agrawala, Senior Advocate appearing on behalf of the BSNL contended that as held by the Apex Court in Jawajee Nagnatham Vs. Revenue Divisional Officer, Adilabad, A.P. and Ors., (1994) and Krishi Utpadan Mandi Samiti, Sahaswan Vs. Bipin Kumar, (2004) it is not permissible to rely on the Ready Reckoner rates of land to decide compensation under the Land Acquisition Act.

Kiran Suri, counsel representing the Original Claimants argued that the High Court had rightly enhanced the compensation to Rs.174/- per sq.ft., by relying on the Government Resolution and the Ready Reckoner.

On considering the submission made by the Counsels, the Bench reiterated that " In the case of Jawajee Nagnatham this Court has observed and held that the amount of compensation for the lands under the Land Acquisition Act is determined by adopting the method of valuation namely, (1) opinion of experts; (2) the price paid within a reasonable time in bonafide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages; and (3) a number of years purchase of the actual or immediately prospective profits of the lands acquired."…in determining the market value, the Court has to take into account either one or the other of the three methods to determine market value of the lands appropriate to the facts of a given case to determine the market value."

It was further noted by the Bench that – "…in the case of Lal Chand Vs. Union of India and Anr., (2009) it is observed that the market value of the land under Section 23 of the Land Acquisition Act cannot be fixed on the basis of the rates mentioned in the Basic Valuation Registers' maintained for the purpose of collection of proper stamp duty."

In view of the aforementioned decisions of the Apex Court, the Bench consequently quashed and set aside the order passed by the High Court, thereby restoring the Order passed by the Reference Court.

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