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Judgment
Jagmohan Bansal, J.
These writ petitions under Article 226/227 of the Constitution of India are directed against Awards passed by Land Acquisition Claims Tribunal, constituted under the Punjab Town Improvement Act, 1922 (for short ‘Tribunal’). The petitioners-landowners are seeking enhancement of market value of the acquired land assessed by Tribunal and Amritsar Improvement Trust (for short ‘Improvement Trust’) is claiming other way round. Tabulated details of the assessment made till date read as:
| Date of notification under Section 36 | 06.01.1995 |
| Date of notification under Section 41 | 17.01.1996 |
| Purpose of acquisition | Development Scheme |
| Revenue estate | Villages:- Sultanwind and Vallah, District Amritsar |
| Area of land acquired | 340 Acres |
| Date of order of Collector (LAC) | 16.01.1998 |
| Market value as per LAC (per acre) | For Village Sultanwind Abutting G.T. Road: ₹15,00,000/- per acre Land situated at more than 1 acre depth from G.T. Road: ₹13,00,000/- per acre For Village Vallah ₹10,00,500/- per acre |
| Date of Tribunal order | 23.12.2016 |
| Market value as per Tribunal | 20% increase over value assessed by Collector. |
As common issues are involved in the captioned petitions filed by landowners as well as Improvement Trust, with the consent of both sides, the same are hereby disposed of by this common order. For the sake of brevity and convenience, facts are borrowed from CWP-10489-2017.
The petitioners-landowners are seeking setting aside of award dated 23.12.2016 whereby Tribunal has not granted compensation as claimed by them.
Learned counsel for the landowners submit that Tribunal has not appreciated evidence on record. The land in question was proposed to be acquired vide notification dated 06.01.1995, however, award was passed on 16.01.1998. The possession was taken over on 14.10.1998. A piece of 10 acres land was allotted to Housefed without any development, meaning thereby, land as such was transferred to Housefed for a consideration of ₹2,100/- per square yard. The landowners due to prevailing political and economic situation in the State, could not furnish sale deeds disclosing correct market value. The Tribunal was supposed to apply principle of de-escalation as recognized by Hon’ble Supreme Court in Ram Kishan (Since Deceased) Vs. State of Haryana, 2025 SCC OnLine SC 715. The value of the land has to be assessed considering its potentiality. The land in question was close to G.T. Road and its surrounding area was fully developed. It was very close to developed industrial areas besides colleges and residential colonies. The Tribunal has assessed the value of land considering 4000 sq. yard in an acre whereas it should be 4840 sq. yard. The authorities missed one kharsa number despite being the subject matter of acquisition. The respondent is bound to pay the value of land which was part of acquisition, however, was missed in the details recorded in the award. The land was acquired for the development scheme, thus, the entire piece of land was required to be treated at par. Different values could not be assessed for the same piece of land.
Per contra, learned counsel for Improvement Trust submits that landowners did not submit any exemplar sale deed before the Collector. The sale deeds which were produced before Tribunal as Ex.A-1, A-4, A-5, C-3 related to very small piece of land in comparison to land acquired. Sale deeds Ex.A-6, A-3, A-2 related to post date of acquisition, thus, could not be relied upon. The landowners have primarily relied upon Ex.AW-20/2 dated 07.12.1998 whereby Improvement Trust allotted 10 acres land to Housefed. The said allotment letter could not be relied upon because Improvement Trust was duty bound to develop the entire piece of land. It was supposed to incur expenses on development like setting up of schools, hospital, roads etc. A part of acquired land was required to be reserved for common purposes. The allotment letter was issued on 07.12.1998 whereas notification under Section 36 was issued on 06.01.1995, thus, relevant date was 06.01.1995. Any transaction which was subsequent to date of notification could not be relied upon. The Tribunal was supposed to assess value on the basis of Collector rate and has wrongly enhanced value by 20%. The land in question was agricultural land and no increase in the name of potentiality can be awarded. The landowners are already awarded addition @ 12% p.a. from the date of notification to date of award under Section 23(1A) and 30% as solatium under Section 23(2) of 1894 Act. The landowners are further paid interest under Section 34 on the amount assessed by Collector and under Section 28 on the amount enhanced by Tribunal. The figure of 4000 sq. yards was wrongly mentioned in the awards and Executing Court vide order dated 11.09.2025 has clarified that 1 acre was equal to 4840 sq. yard and it was a clerical mistake.
Heard the arguments and perused the record.
The present matters relate to acquisition under Punjab Town Improvement Act, 1922 (for short ‘1922 Act’). Section 36 of 1922 Act is corresponding to Section 4 and Section 41 is corresponding to Section 6 of Land Acquisition Act, 1894 (for short ‘1894 Act’). The landowners are entitled to statutory benefits provided under 1894 Act i.e. addition under Section 23(1A), solatium under Section 23(2) and interest under Section 34.
For determining market value of a tract of land, based on sale consideration of a small piece of land, cut is imposed on account of any of reasons i.e. cost of development, locational advantages, market value of a small piece of land vis-à-vis a tract of land. Value of a developed plot includes cost of roads, electricity, water, sewage, drainage, common facilities area etc. It is a matter of knowledge that ordinarily a small piece of land fetches more value than a big contiguous piece. Similarly, one plot within the same locality on account of locational advantage may fetch a higher price than other plots. Cut is required to be imposed to determine value of a plot having locational disadvantages. 1894 Act has laid down parameters to determine market value of the land and Courts/authorities are required to apply their mind and determine market value as accurately as possible.
Hon’ble Supreme Court in ‘Shaji Kuriakose v. Indian Oil Corpn. Ltd.’, (2001) 7 SCC 650 has held that in comparison to other methods comparable sales method is adopted by Courts. The exemplar sale deeds should not be treated sacrosanct whereas certain factors are required to be complied with to determine compensation based on comparable sale deeds. The Court has held:
“3.It is no doubt true that courts adopt comparable sales method of valuation of land while fixing the market value of the acquired land. While fixing the market value of the acquired land, comparable sales method of valuation is preferred than other methods of valuation of land such as capitalisation of net income method or expert opinion method. Comparable sales method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issue of notification under Section 4 of the Act. However, comparable sales method of valuation of land for fixing the market value of the acquired land is not always conclusive. There are certain factors which are required to be fulfilled and on fulfilment of those factors the compensation can be awarded, according to the value of the land reflected in the sales. The factors laid down inter alia are: (1) the sale must be a genuine transaction, (2) that the sale deed must have been executed at the time proximate to the date of issue of notification under Section 4 of the Act, (3) that the land covered by the sale must be in the vicinity of the acquired land, (4) that the land covered by the sales must be similar to the acquired land, and (5) that the size of plot of the land covered by the sales be comparable to the land acquired. If all these factors are satisfied, then there is no reason why the sale value of the land covered by the sales be not given for the acquired land. However, if there is a dissimilarity in regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is open to the court to proportionately reduce the compensation for acquired land than what is reflected in the sales depending upon the disadvantages attached with the acquired land. In the present case, what we find is that the first two factors are satisfied. The sale transaction covered by the sale Ext. A-4 is genuine, inasmuch as the sale was executed in proximity to the date of notification under Section 4 of the Act. However, there is a difference in the similarity in the land acquired and the land covered by Ext. A-4. The land covered by Ext. A-4 is situated at Kottayam and Ernakulam, PWD Road, whereas the acquired land is situated at a distance of 3 furlongs from the main road. There is no access to the acquired land and there exists only an internal mud road which belonged to one of the claimants, whose land has also been acquired. Further, the land covered by Ext. A-4 is a dry land and whereas the acquired land is a wetland. After acquisition, the acquired land has to be reclaimed and a lot of amount would be spent for filling the land. Moreover, the land covered by Ext. A-4 relates to a small piece of land which does not reflect the true market value of the acquired land. It is often seen that a sale for a smaller plot of land fetches more consideration than a larger or bigger piece of land. For all these reasons, the High Court was fully justified in lowering the rate of compensation than what was the market value of the land covered by Ext. A-4. We, therefore, do not find any infirmity in the judgment of the High Court.”
The above laid down parameters have been reiterated by Hon’ble Supreme Court in ‘New Okhla Industrial Development Authority Vs Harnand Singh (Deceased) Through LRs and Others’, 2024 SCC OnLine SC 1691. The Court has further held that in the absence of direct evidence, market value may be determined on guesstimation but the exercise ought not to be pure hypothecation. The Court has held that following factors ought to be considered:
“35.Broadly, such relevant factors can be divided into three categories:
i.Characteristics of the land: The valuation of land is undeniably influenced by its inherent characteristics. A parcel of land endowed with advantageous features that enhance its accessibility and usability tends to command higher market price and thus, a greater valuation in comparison to lands lacking such attributes. Key factors contributing to such features include connectivity via roads and other means of transportation, the size and shape of the land, availability of essential utilities such as electricity and water, the evenness or levelling of the land's surface, width of frontage, and nature and status of the surrounding area etc.;
ii.Future potentiality of the land: In addition to its characteristics, the valuation of land is also influenced by its potentiality. Lands with the potential to be used for commercial or residential purposes; that are located in or near a developed area; or which are proximate to tourist destinations, are perceived to hold greater value in the future. Consequently, landowners may anticipate higher future prices and accordingly demand higher sale prices compared to lands lacking these attributes. Accordingly, these features also lead to an increase in valuation; and
iii.Factors denoting market sentiment: Market sentiments are powerful drivers of land valuation. Even if a particular piece of land possesses all desirable features, its valuation can still suffer if the market conditions at the time of publication of the notification under Section 4 of the 1894 Act were unfavourable. Factors such as economic recessions, political instability, speculative investments or real estate crisis can impact the perceived value of the land. Thus, these extraneous economic and political factors must also be considered when assessing land valuation.”
The Collector rate though is revised from time to time yet does not depict a true picture because of multiple reasons, thus, under 1894 Act cannot be mechanically invoked to determine value of acquired land. Collector rate is declared by the State Government for the purpose of stamp duty. Ordinarily people disclose consideration in the sale deed equal to or little more than collector rate. Seller does not want to disclose correct value because it may entail capital gain and buyer firstly due to condition of the seller and secondly to avoid stamp duty as well as lack of accounted/tax paid money avoids disclosing correct value. In such circumstances, it becomes inevitable to make upward adjustment in the available sale consideration which is equal to or little more than collector rate.
In the case in hand, the respondent-Amritsar Improvement Trust vide notification dated 06.01.1995 read with notification dated 17.01.1996 acquired 340 acres of land comprised in 2 villages namely Sultanwind and Vallah, Tehsil & District Amritsar. The land was acquired for the purposes of development scheme. The relevant date for the determination of market value of the acquired land was 06.01.1995 i.e. date of notification under Section 36 of 1922 Act. The Collector determined different rates for different villages e.g. market value for Village-Sultanwind was determined @ ₹15,00,000/- per acre whereas for Village-Vallah @ ₹10,00,500/- per acre. The landowners were held entitled to statutory benefits besides market value of the acquired land. The landowners filed reference petitions and Tribunal vide impugned award has granted enhancement of 20% over value assessed by the Collector.
The landowners as well as Improvement Trust led their evidence before the Tribunal. Both sides in support of their case submitted sale deeds. Details of sale deeds are reproduced as below:
Sale deeds submitted by Landowners:
| Exhibit / Sale Deed | Buyer's Name | Land Measuring | Area Where Situated | Value |
|---|---|---|---|---|
| Photo copy of sale deed Dt. 05.02.1994 Ex.A1 | Balwant Singh | 57.5 sq. yards | Sultanwind Suburb – New Azad Nagar | ₹ 313/sq. yard; Total Rs.18,000/- |
| Photo copy of sale deed Dt.24.12.1997 Ex.A2 | Madan Lal | 100 sq. yards | -do- | ₹ 1600/sq. yard; Total Rs.1,60,000/- |
| Photo copy of sale deed Dt.20.10.1997 Ex.A3 | Kuljit Singh | 244 sq. yards | -do- | ₹ 696/sq. yard; Total Rs.1,70,000/- |
| Photo copy of sale deed Dt.08.05.1995 Ex.A4 | Kulwant Singh | 120 sq. yards | New Shaheed Udham Singh Nagar | ₹341.66/sq. yard; Total Rs.41,000/- |
| Photo copy of sale deed Dt.29.01.1991 Ex.A5 | Ajit Singh | 250 sq. yards | -do-G.T. Road | ₹.492/sq. yard; Total Rs.1,23,000/- |
| Photo copy of sale deed Dt.06.10.1997 Ex.A6 | Baba Teja Singh Radha Swami Trust | 1100 sq. yards | -do- Behniwal Near Abad Jawahar Nagar | ₹.446/sq. yard; Total Rs.4,89,000/- |
| Photo copy of sale deed Ex.C1 Dt.30.07.1997 | Same as above | 1000 sq. yards | -do- | ₹.445/sq. yard; Total Rs.4,45,000/- |
| Photo copy of sale deed Ex.C3 Dt.22.02.1994 | Pingalwara Society | 665.5 sq. yard | Sultanwind Suburban | ₹ 330/sq. yard; Total Rs.1,81,500/- |
| Ex.C2 Photo copy of sale deed Ex.C2 Dt.15.07.1997 | Teja Singh Radha Swami | 1000 sq. yards | Behniwal Near Abad Jawahar Nagar | ₹ 445/sq. yard; Total Rs.4,45,000/- |
Sale deeds submitted by Improvement Trust:
| Exhibit / Sale Deed | Buyer's Name | Land Measuring | Area Where Situated | Value |
|---|---|---|---|---|
| Photo copy of sale deed dated Dt. 11.12.1996 Ex.R1 | Manjit Kumar | 80 sq. yards | Sultanwind Suburb - G.T. Road, Doburji | ₹ 186/- per sq. yard; total ₹ 15,000/- |
| Photo copy of sale deed dated Dt. 10.05.1996 Ex.R2 | Gurinder Singh | 375 sq. yards | -do- | Rs.200/- per sq. yard; total Rs.75,000/- |
The petitioners-landowners are not relying upon exemplar sales deeds submitted by themselves as well as Improvement Trust whereas are claiming that market value of their land must be assessed based on allotment letter dated 07.12.1998 whereby Improvement Trust has allotted 10 acres land to Housefed @₹2100/- per sq. yard. The petitioners are claiming that as per judgment of Hon’ble Supreme Court in Chimanlal Hargovinddas Vs. Special Land Acquisition Officer, Poona, 1988 (3) SCC 751 even post-notification instances can be taken into account if they are very proximate, genuine and acquisition itself has not motivated the purchaser to buy at a higher price on account of resultant improvement in the development prospects. Having identified the instances which provide the index of market value, the price reflected therein may be taken as the norm and the market value of the land acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-à-vis land under acquisition by placing the two in a juxtaposition. Hon’ble Supreme Court in Ram Krishan (supra) has approved doctrine of escalation and de-escalation. In the present case, the price at which the Improvement Trust has allotted 10 acres land to Housefed may be considered as norm and suitable adjustments for the plus and minus factors ought to be made.
It is settled law that market value as on the date of notification under Section 4 of 1894 Act (Section 36 of 1922 Act) must be considered. The future market price cannot be considered. As per aforecited judgments, in exceptional circumstances, post-notification instances may be noticed, however, cannot be sole factor to determine market value.
In the case in hand, the landowners produced sale deeds Ex.A-1 to A-6 and C-1 to C-3. Area comprised in Ex.A-1 to A-5 is very small i.e. 57.5 sq. yard to 250 sq. yards. Area involved in Ex.A-6 dated 06.10.1997 and Ex.C-1 dated 30.07.1997 is 1100 sq. yard and 1000 sq. yard respectively. The sale consideration disclosed in both the sale deeds is ₹446/- per sq. yard. The aforesaid sale deeds are post-notification still are disclosing value ₹446/- per sq. yard whereas landowners are relying upon allotment letter dated 07.12.1998 disclosing rate ₹2100/- per sq. yard. Sale deed Ex.C-2 dated 15.07.1997 involving 1000 sq. yard area is also disclosing vale @ ₹445 per sq. yard. Ex.C-1, A-6 and C-2 where area involved is substantially more than area disclosed in other sale deeds are disclosing uniform rate ₹445 per sq. yard.
The landowners are heavily banking upon allotment letter dated 07.12.1998 disclosing rate ₹2100/- per sq. yard. Acquisition of land in question was initiated vide notification dated 06.01.1995, thus, relevant date to determine market value was 06.01.1995. The allotment letter dated 07.12.1998 was issued after almost three years from the relevant date. The Collector rate as on 06.01.1995 was available. The petitioners submitted sale deeds in support of their contentions. In view of availability of Collector rate and sale deeds, allotment letter which was issued after almost three years from the relevant date cannot be relied upon. The land in question at the time of acquisition was agricultural and out of the acquired land 10 acres was allotted to Housefed as non-agricultural land. It is well-known that value of agricultural land increases multiple times the moment it is converted into non-agricultural. There was further gap of three years between the relevant date and date of aforesaid allotment letter. The State of Punjab was facing militancy since 1984. It was on the verge of elimination in the year 1995 and there was a complete peaceful atmosphere in 1998. The prices of land increased after 1995 due to restoration of peace and harmony in the State. The land in question after acquisition became part of development scheme. Thus, aforesaid allotment letter cannot be made foundation to determine value of the land which was subjected to notification under Section 36 of 1922 Act in January’ 1995 i.e. 3 years prior to date of allotment letter.
The Collector had determined market value as per Collector rate. The Collector rate does not depict a correct picture. The State during the relevant period was facing militancy, thus, possibility of sale transactions was minimal. There were stray transactions. In these circumstances, the Collector rate could not be considered as gospel truth. The Tribunal considering facts and circumstances found it appropriate to enhance assessed value by 20%. It is settled law that there is no hard and fast or straitjacket formula to determine market value. It is determined on the basis of experience, location, availability of exemplar sales etc. The Tribunal has rightly found that there should be enhancement by 20% over collector award.
The petitioners-landowners have raised question of uniform market rate. The Collector based on Collector rate determined three different market rates. The same came to be approved by the Tribunal. Two rates have been determined for Village Sultanwind and one rate for Village Vallah. In case of Village Sultanwind, two different rates are determined on the basis of proximity to G.T. Road. The respondent has acquired 340 acres land as contiguous piece of land. It was acquired for one purpose i.e. development scheme. There is no justification to discriminate between two similarly situated landowners. This Court finds that uniform rate ought to be granted to all the landowners. Accordingly, market value of land irrespective of its location is determined @ ₹18,00,000/- per acre. The landowners would be entitled to consequential statutory benefits as provided under 1894 Act.
In the wake of above discussion and findings, appeals of the landowners are allowed in above terms and appeals of the Improvement Trust are hereby dismissed.
In CWP-10833-2017, CWP-10488-2017 and CWP-18034-2017, the landowners have raised question of missing khasra numbers. The Collector is bound to correct mistake and award compensation with respect to land which was actually acquired, however, missed in the awards. The respondent is not objecting to said proposition. Accordingly, Collector is directed to consider claim of aforesaid petitioners to the effect of non-inclusion of their khasra numbers in the award. If it is found that their land was actually acquired, however, khasra numbers were not included in the award, they would be paid compensation along with interest as per their entitlement.
Pending application(s), if any, also stands disposed of.