The Supreme Court in a land acquisition case allowed the appeals filed by the State of Madhya Pradesh and remitted back the matter to the High Court to determine the valuation of compensation for fresh consideration as per the law and settled principles.

The two-Judge Bench of Justice S. Abdul Nazeer and Justice Krishna Murari was dealing with the appeals against the orders passed by the Madhya Pradesh High Court, Indore through which the appeals of the State got dismissed by reducing the deduction awarded by the Reference Court for irrigated and un-irrigated land respectively. The Bench held –

"… insofar as the determination of the market value of the land in question by the High Court is concerned, the same is not sustainable and the matter needs to be remitted back to the High Court to determine the valuation of compensation for fresh consideration in accordance with law and the settled principles culled out for such determination."

The two main issues before the Apex Court were the determination of the market value of the land acquired and the deduction to be made towards utilization of land and development charges.

The Court held that "From a perusal of the impugned judgment passed by the High Court, we find that none of the above principles enunciated for determining the valuation of the acquired land has been taken into consideration by the High Court. The High Court blindfoldly relied on the case of Upendra Singh Vs. State of M.P. & Anr., on the ground that the judgment of the High Court in the said case has attained finality on account of dismissal of the Special Leave Petition being Diary No. 12907 of 2017 now registered as SLP No. 23225-226 of 2017 and other connected matters, preferred by the land owners vide judgment and order dated 18.07.2017."

Advocate Sunny Choudhary appeared for the appellant i.e., the State.

Advocate Vikas Upadhyay represented the respondent i.e., the landowners.

Brief Facts –

A Notification under Section 4(1) read with Section 17(1) of the Land Acquisition Act, 1894 was published in the official gazette for the acquisition of the land admeasuring 38.178 hectares of a village located in Dhar District for the purpose of "rehabilitation of displaced persons" of villages which came under the submergence due to increase of height of Sardar Sarovar Dam. The Land Acquisition Officer passed an award for the said land wherein the market value was assessed and compensation was awarded. The respondents i.e., the landowners being dissatisfied with the amount of compensation claimed enhancement of the same under Section 18 of the 1894 Act. The Reference Court enhanced the compensation based on sale deeds filed as exemplars along with a 48% deduction towards development charges.

However, both the appellant and respondent filed appeals before the High Court assailing the order passed by the Reference Court. The High Court while partly allowing the appeals filed by the respondent and dismissing the appeals filed by the appellant reduced the deduction and enhanced the compensation. Therefore, being aggrieved by the orders of the High Court, the State approached the Supreme Court.

The Apex Court after considering the aforementioned facts noted –

"We failed to understand that as to how the market value determined in the case of Upendra Singh would automatically be applied to the land acquired in the present case, without recording any finding that both the lands are in vicinity and identical in nature and similarly situated. In our considered opinion, the High Court fell in a grave error in applying the market value of the land determined in the case of Upendra Singh to the land involved in the case at hands."

The counsel for the appellant had submitted before the Court that the Reference Court enhanced the compensation multi-fold by relying on a small portion of land to determine the market value of large pieces of land. The Court in this regard stated –

"… if there is a large tract of land under acquisition but is capable of being used for the purpose for which smaller plots are used and is situate in a fully developed area with little or no requirement of any further development to be made, there would be no need for deduction of the value. Similarly, when all civic and other amenities are to be provided to make the land under acquisition suitable for the purpose for which it is being acquired setting aside some part of the land for development like roads, drainage, electricity, communication providing for common facilities and appropriate deduction, is liable to be made."

The Court further observed that the view taken by the High Court in the matter is not liable to be sustained.

Hence, the Court concluded that "The High Court shall also re-determine the deduction to be made towards development charges afresh taking into account all the relevant evidence, facts and materials on record. Insofar as, the order dated 08.09.2017 passed by the High Court in application being MCC No. 304 of 2017 for correction of alleged accidental slip in judgment dated 20.06.2016 is concerned, the same also hereby stands set aside as a fresh determination of the market value is to be made."

Accordingly, the Supreme Court set aside the judgment of the High Court, remitted back the matter to the High Court, and allowed the appeals.

Cause Title – State of Madhya Pradesh & Anr. v. Radheshyam & Ors.

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Justice S. Abdul NazeerJustice Krishna MurariLand Acquisition ActMadhya Pradesh High CourtCompensation

Swasti Chaturvedi