Supreme Court Upholds Land Compensation for Housing Scheme: U.P. Avas Evam Vikas Parishad vs. Ganga Saran

The Supreme Court of India, in U.P. Avas Evam Vikas Parishad vs. Ganga Saran & Others, ruled in favor of landowners by upholding the compensation awarded for land acquisition under the Land Acquisition Act, 1894. The case involved a dispute over the valuation of land acquired for a housing scheme by the Uttar Pradesh Avas Evam Vikas Parishad. The Court held that the market value of the land, as determined by the Reference Court, was justified and did not require interference.

Background of the Case

The dispute arose from the acquisition of land under a notification issued on September 29, 1979, under Section 4(1) of the Land Acquisition Act, 1894, for the implementation of a housing scheme in Tanda, Bulandshahr. The acquired land included:

2 bighas, 13 biswas of Khasra No. 174
17 biswas of Khasra No. 175

The Land Acquisition Officer (LAO) fixed the compensation for the acquired land at Rs. 29.08 per square yard. Dissatisfied with the compensation amount, the landowners sought a reference under Section 18 of the Act to the District Court.

Reference Court’s Decision

The Reference Court (District Judge, Bulandshahr), upon reviewing the matter in Land Acquisition Reference (L.A.R.) No. 128 of 1987, enhanced the compensation to Rs. 99 per square yard on December 19, 1994. The Court also awarded statutory benefits, including:

30% solatium under Section 23(2) of the Act.
12% additional compensation under Section 23(1A).
Interest under Section 28 from the date of possession.

The Reference Court justified the increase based on documentary evidence, which showed that market rates in the vicinity ranged between Rs. 100 to Rs. 200 per square yard at the relevant time.

Appeal Before the High Court

The U.P. Avas Evam Vikas Parishad challenged the enhancement in the Allahabad High Court through First Appeal No. 354 of 1995. However, the High Court dismissed the appeal on January 19, 2010, confirming the Reference Court’s valuation.

Appeal Before the Supreme Court

Aggrieved by the High Court’s decision, the appellant approached the Supreme Court, arguing that:

The High Court failed to re-appreciate evidence in a First Appeal.
The market value of Rs. 99 per square yard was excessive and unsupported by proper sale transactions.
The Reference Court had relied on sale deeds of smaller land parcels, which should not have been used to determine the market value of a large area.

Supreme Court’s Observations

1. High Court’s Limited Interference

The Supreme Court noted that while a First Appeal allows the High Court to re-examine evidence, it is not required to do so in cases where findings are well-reasoned. The judgment stated:

“The High Court has rightly dismissed the appeal, as the Reference Court’s determination was based on sound reasoning and documentary evidence.”

2. Comparable Sale Transactions

The Court upheld the valuation of Rs. 99 per square yard, noting that:

Multiple sale transactions in the area showed prices ranging between Rs. 100 to Rs. 200 per square yard.
The Land Acquisition Officer had ignored these transactions in his assessment.
Sale transactions involving small parcels can be used as a basis for valuation of larger land, with suitable deductions.

The judgment emphasized:

“The Reference Court’s decision to consider smaller sale transactions with reasonable deductions was appropriate and does not warrant interference.”

3. Nature of the Acquired Land

The Court observed that the land was adjacent to abadi (inhabited) areas and was suitable for residential development. It stated:

“The Land Acquisition Officer himself admitted that the acquired land was near residential and commercial areas, making it appropriate for housing development.”

4. Just and Reasonable Compensation

The Supreme Court concluded that the compensation awarded by the Reference Court was fair and reasonable given the market conditions. The judgment held:

“The market value of Rs. 99 per square yard, as fixed by the Reference Court, is just, reasonable, and reflective of the true value of the land at the time of acquisition.”

Final Judgment

The Supreme Court dismissed the appeals and upheld the compensation of Rs. 99 per square yard. The ruling confirmed that:

The compensation awarded was not excessive and was based on market evidence.
The High Court was correct in refusing to interfere with the Reference Court’s well-reasoned order.
Sale transactions involving smaller plots can be used as a reference for determining market value.

Key Takeaways

Land compensation must reflect actual market value: The Court upheld the Reference Court’s reliance on documentary evidence.
Comparable sales can justify enhanced compensation: Smaller land sales can be considered for larger land valuation with reasonable adjustments.
High Court’s role in appeals: The Supreme Court reaffirmed that appellate courts should avoid unnecessary interference if the lower court’s findings are justified.
Development potential matters: Compensation must consider the land’s suitability for future urban development.

Conclusion

The Supreme Court’s ruling in U.P. Avas Evam Vikas Parishad vs. Ganga Saran reinforces the principle of just compensation for land acquisition. The judgment ensures that landowners are fairly compensated based on market realities and development potential while discouraging arbitrary reductions in compensation awards.

Petitioner Name: U.P. Avas Evam Vikas Parishad.
Respondent Name: Ganga Saran & Others.
Judgment By: Justice R. Banumathi, Justice R. Subhash Reddy.
Place Of Incident: Bulandshahr, Uttar Pradesh.
Judgment Date: 26-02-2019.

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