The market value as determined by the High Court is unsustainable: Supreme Court of India

The market value as determined by the High Court of Allahabad cannot be sustained either on the basis of the sale deeds or on the strength of judicial orders. There was no justification of enhancement of compensation awarded by the Reference Court i.e. Rs.120/- per square yard. This remarkable judgment was passed by the Hon’ble Supreme court in the matter of U.P. AWAS EVAM VIKASH PARISHAD vs. ASHA RAM (D) THR. LRS & ORS. [CIVIL APPEAL NO. 337 OF 2021 (ARISING OUT OF SLP (CIVIL) NO. 4445 OF 2020)] by Justice HEMANT GUPTA, J.

This appeal arose from the 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, where the present appeals arose out of an order passed by the Division Bench of the High Court of Judicature at Allahabad on 19.07.2019 whereby compensation of Rs. 297/- per square yard was awarded for the land acquired in six villages apart from the statutory benefits. The landowners being aggrieved of the compensation awarded by the Special Land Acquisition Officer sought a Reference for determining the market value where value Rs. 120/- per square yard as the compensation apart from the statutory benefits vide award dated 23.05.2000 was awarded by the learned Additional District Judge.

The court opined that “The principles of determining the market value are delineated under Sections 23 and 24 of the LA Act and are well-settled by the plethora of judgments on the said subject matter.”

The court referred to its precedents on this act by referring to the case of Gujarat Industrial Development Corpn. v. Narottambhai Morarbhai & Anr., (1996) 11 SCC 159, and 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”.

This court further referred to the judgment of Land Acquisition Officer v. B. Vijender Reddy & Ors., (2001) 10 SCC 669 where it was held that “in fixation of rate of compensation under the Land Acquisition Act, there is always some element of guesswork but that has to spring from the totality of the evidence, the pattern of rate, the pattern of escalation and escalation of price in the years preceding and succeeding the notification under Section 4 of the LA Act.”

This court contemplated that, “Market value is ordinarily the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase. Where definite material is not forthcoming either in the shape of sales of similar lands in the neighborhood at or about the date of notification under Section 4(1) or otherwise, other sale instances, as well as other pieces of evidence, have to be considered.”

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