The assessing authority must take into consideration various factors for determining the market value, but exclude the advantages due to the carrying out of the purpose of acquisition and remote potentialities.
The present appeal was filed in regard to issue related to assessment of market value of the land in question.
The land in question was notified Under Section 4 of the Land Acquisition Act, 1894 (Act) for the purposes notified therein. A declaration Under Section 6 of the Act was made and the award Under Section 11 of the Act was subsequently made giving the assessment of market value of the land. The aggrieved land owner preferred a reference under Section 18 of the Act wherein the value was enhanced with other statutory benefits. An appeal was moved under Section 54 of the Act claiming further enhancement whereby marginal enhancement was done and against the said finding present appeal was filed.
It was contended by the claimant(s) that the land ought to have been assessed at the rate on which the land covered by the same notification Under Section 4 of the Act in the neighbouring village were assessed. On the contrary it was submitted that the market value of the land cannot be assessed on the basis of compensation paid in the adjacent village for the reason that the land is not similar in any circumstance, either in quality or geographical situation/location, and thus, there was nothing on record on the basis of which it could be held that the claimant was entitled for the same compensation as given to other claimants in different villages.
The Court observed that the scheme of the Act is that every man’s interest is to be valued on as it occurs at the time of the notification Under Section 4(1). The assessing authority must take into consideration various factors for determining the market value, but exclude the advantages due to the carrying out of the purpose of acquisition and remote potentialities. It is the duty of the claimant that he must produce the relevant evidence for determining the market value while filing his claim Under Section 9 of the Act atleast before the trial Court or before the reference court for the reason that the Appellate court may not permit the party to adduce additional evidence in appeal.
The market value of the land is to be assessed as per Section 23 of the Act. Valuation of immoveable property is subject to uncertainties and no strait-jacket formula can be laid down for arriving at exact market value of the land. There is always a room for conjecture, and thus the Court must act reluctantly to venture too far in this direction. The factors such as the nature and position of the land to be acquired, adaptability and advantages, the purpose for which the land can be used in the most lucrative way, injurious affect resulting in damages to other properties, its potential value, the locality, situation and size and shape of the land, the rise or depression in the value of the land in the locality consequent to the acquisition etc., are relevant factors to be considered. Section 23 mandates that the market value of the land is to be assessed at the time of notification Under Section 4 of the Act. Therefore, value which has to be assessed is the value to the owner who parts with his property and not the value to the new owner who takes it over. Fair and reasonable compensation means the price of a willing buyer which is to be paid to the willing seller. Though the Act does not provide for “just terms” or “just compensation”, but the market value is to be assessed taking into consideration the use to which it is being put on acquisition and whether the land has unusual or unique features or potentialities.
The Act provides for compensation for acquisition of land and deprivation of the property which is reasonable and just. The court must avoid relying on a sham transaction which lacks bona fide and which had been executed for the purpose of raising the land price just before the acquisition to get more compensation for the reason that fraudulent move or design should not be considered as a proof in such cases though such a conclusion can be inferred from the facts and circumstances of the case. The market value of the land should be determined taking into consideration the existing geographical situation of the land, existing use of the land, already available advantages, like proximity to National or State Highway or road and/or notionally or intentionally renowned tourist destination or developed area, and market value of other land situated in the same locality or adjacent or very near to acquired land and also the size of such a land.
Thus, the market value of the land is to be assessed keeping in mind the limitation prescribed in certain exceptional circumstances Under Section 23 of the Act. A guess work, though allowed, is permissible only to a limited extent. The market value of the land is to be determined taking into consideration the existing use of the land, geographical situation/location of the land alongwith the advantages/disadvantages i.e. distance from the National or State Highway or a road situated within a developed area etc. In urban area even a small distance makes a considerable difference in the price of land. However, the court should not take into consideration the use for which the land is sought to be acquired and its remote potential value in future. In arriving at the market value, it is the duty of the party to lead evidence in support of its case, in absence of which the court is not under a legal obligation to determine the market value merely as per the prayer of the claimant.
There may be a case where a huge tract of land is acquired which runs though continuous, but to the whole revenue estate of a village or to various revenue villages or even in two or more states. Someone’s land may be adjacent to the main road, others’ land may be far away, there may be persons having land abounding the main road but the frontage may be varied. Therefore, the market value of the land is to be determined taking into consideration the geographical situation and in such cases belting system may be applied. In such a fact-situation every claimant cannot claim the same rate of compensation.The present appeal based on the facts and records was dismissed.
[Bhule Ram vs. Union of India and Anr.]