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In assessing a sale transaction, what is paramount to assess is, whether it was the price offered by a willing purchaser to pay to the willing seller for a property, having due regard to its existing conditions, with all its existing advantages and its potential possibilities. Such an observation was made by the Hon’ble Telangana High Court before Hon’ble Justice P.NAVEEN RAO & Hon’ble Justice P.SREE SUDHA in the matter of The Land Acquisition Officer-cum Revenue Divisional Office vs S.V. Jagannatha Rao, rep., by the General Power of Attorney [L.A.A.S.No.418 OF 2008].

The facts of the matter were that 11.20 guntas of land of Waridyal village of Kollapur Mandal, Mahabubnagar District, was acquired for the purpose of relocating temples submerged in the Srisailam Irrigation Project. The Land Acquisition Officer determined the market value as Rs.5,000/- per acre. Not satisfied with the compensation determined by the Land Acquisition Officer, the claimant sought reference under Section 18 of the Land Acquisition Act, 1894 for enhancement of the compensation. The reference was registered as L.A.O.P.No.308 of 1996 in the Court of Senior Civil Judge at Nagarkurnool. By order dated 30.09.2005, learned Senior Civil Judge enhanced the market value to Rs.15,000/- per acre. Aggrieved by the said order the instant appeal is preferred by the Land Acquisition Officer.

The Hon’ble High Court referred to the case of Administrator General of West Bengal vs. Collector, Varanasi ((1988) 2 SCC 150) in which it was held by the Hon’ble Supreme Court that “Prices fetched for similar lands with similar advantages and potentialities under bona fide transactions of sale at or about the time of the preliminary notification are the usual, and indeed the best, evidence of market value. Other methods of valuation are resorted to if the evidence of the sale of similar lands is not available”

Furthermore, the Hon’ble High Court observed that it is safe to assume that even if a transaction covers a small extent of land compared to the land acquired, in a given case, it can be relied on to determine the market value of the land in issue. But when reliance is on a sale of land covering a small extent, the Reference Court or the High Court has to consider all aspects carefully to make a realistic assessment of the value of the land acquired. The assessment is to ensure that the landowner gets fair compensation and his claim is not fanciful or imaginary. 

Finally, the Hon’ble High Court upheld the judgment of the reference court and dismissed the instant appeal.

Click Here To Read The Judgment

Judgment Reviewed by: Rohan Kumar Thakur