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Land Acquisition Act,1894- Guesswork involved in fixation of market value is to be made by adopting well-recognized methods: Supreme Court of India.

It is well settled that fixation of market value in a Reference under Section 18(1) of the Land Acquisition Act,1894 necessarily involves some guesswork. However, the guesswork is required to be made by adopting one of the well-recognized methods, such as the comparison method or capitalization method, and the same was observed by Hon’ble Abhay S. Oka, J in the matter of Soman vs. Inland Waterways Authority of India & Anr. [Civil Appeal No. 2825 of 2021].

The case arises out of the fact that civil appeal nos. 2825, 2826 and 2827 of 2011 took exception to the common Judgment and order dated 25th August 2009 passed by a Division Bench of the High Court of Kerala in LA appeal nos. 829 of 2006, 1005 of 2007 and 1000 of 2007 arising out of the awards made by a Civil Court in References under Section 18(1) of the Land Acquisition Act,1894 (for short “the said Act”) in respect of the lands in village Mullackal in District Allapuzha. The purpose of the acquisition was of widening of National Waterway no. III in Kerala. Civil Appeal No. 2826 of 2011 takes an exception to the Judgment dated 5th March 2010 passed by a Division Bench of the High Court of Kerala in LA. Appeal No. 637 of 2001 arising out of an Award made by a Civil Court in a Reference under Section 18(1) of the said Act in respect of a land in village Maradu, Kanayannur Taluka in Ernakulam District. The purpose of the acquisition was of setting up of Inland Water Transport Terminal. In one of the cases, compensation was granted in respect of the building on the acquired land. In one case, compensation was claimed on account of severance of the remaining land. But in these appeals which are filed by the landowners/claimants, we are concerned only with the land value. There is no dispute about the grant of statutory benefits under Sections 23(1-A), 23(2) and 28 of the said Act.

In support of Appeal Nos.2825, 2826 and 2827, the learned counsel appearing for the appellants submitted that the High Court has given no reasons for reducing the market value of the dry lands to Rs.34,158/- per Are. The Reference Court on the basis of comparable exemplars in the form of its own decisions had fixed the market value of the acquired lands. The reasons recorded by the Reference Court have not been upset by the High Court. Further submission of the appellant in Civil Appeal No.2825 of 2011 is that no reasons have been assigned by the High Court for reducing the market value of the wetlands to Rs.1,500/- per Are.

The learned counsel appearing for the first respondent supported the impugned Judgment and order. In support of the Civil Appeal arising out of Special Leave Petition No. 387 of 2013, the learned counsel for the appellants submitted that the ratio of 100:52:48:43:39 is completely erroneous. He pointed out that Category ‘C’ was of reclaimed lands having river frontage and Category ‘B’ was of the reclaimed lands having road frontage and access to the river. Therefore, the ratio fixed for ‘B’ Category land ought to have been much more than 52. The learned counsel appearing for the respondents supported the impugned Judgment and order.

Supreme court after perusing the facts and arguments presented, held that – “It is well settled that fixation of market value in a Reference under Section 18(1) of the said Act necessarily involves some guesswork. However, the guesswork is required to be made by adopting one of the well-recognized methods, such as the comparison method or capitalization method. Category ‘A’ lands were dry lands having frontage on National Highway No.47. Category ‘B’ was of reclaimed lands with road frontage which had access to the river through the reclaimed portions. Considering these factors, in the facts of the case, it is not possible to find fault with the approach of the High Court of fixing the market value of Category ‘B’ lands at 52% of the market value fixed for Category ‘A’ lands. Therefore, there is no scope to interfere with the Judgment of the High Court. 12. Accordingly, Civil Appeal Nos. 2826 and 2827 of 2011 are allowed and the market value of the dry lands fixed by the Reference Court at Rs.60,000/- per Are is restored; Civil Appeal No. 2825 of 2011 is partly allowed by setting aside that part of the impugned Judgment and order by which market value of Rs.40,000/- per Are of dry land was reduced to Rs.34,158/-. The market value of the dry land at the rate of Rs.40,000/- per Are fixed by the Reference Court is restored. However, the finding of the High Court that the market value of the wetland was Rs.1,500/- per Are is confirmed; In Civil Appeal Nos. 2825, 2826 and 2827 all of 2011, the appellants will be entitled to statutory benefits in accordance with 12 sub-section (1-A) of Section 23, sub-section (2) of Section 23 and Section 28 of the said Act; Civil Appeal arising out of Special Leave Petition No. 387 of 2013 is hereby dismissed”

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Judgement reviewed by Mehvish Alam

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