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U.P. Awas Evam Vikash Parishad vs. Asha Ram(D) Th. Lrs - (Supreme Court) (23 Mar 2021)

Potentiality of acquired land has to be taken into consideration to determine market value


Land Acquisition

The present appeals arise out of an order passed by the High Court whereby a compensation of Rs. 297 per square yard was awarded for the land acquired in six villages apart from the statutory benefits. The Appellant – U.P. Awas Evam Vikas Parishad has been constituted under the Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 1965. A notification was published on 26th June, 1982 by the Parishad under Section 28 of the Act intending to acquire 1229.914 acres of land. Subsequently, a notification under Section 32 of the Act was published on 28th February, 1987. Sections 28 and 32 of the Act are equivalent to Sections 4 and 6 of the Land Acquisition Act, 1894.

The potentiality of the acquired land is one of the primary factors to be taken into consideration to determine the market value of the land. Potentiality refers to the capacity or possibility for changing or developing into the state of actuality. The market value of a property has to be determined while having due regard to its existing conditions with all the existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not primarily depends upon its condition, situation, use to which it is put or its reasonable capability of being put and also its proximity to residential, commercial or industrial areas/institutions. The existing amenities like water, electricity as well as the possibility of their further extension, for instance whether near about town is developing or has prospects of development have to be taken into consideration. It also depends upon the connectivity and the overall development of the area.

A compensation of Rs. 297 per square yard was awarded for land acquired for the purpose of GDA vide notification dated 28th February, 1987 and 16th August, 1988. The said acquisition was five years after the acquisition in question. The development activity initiated vide notification dated 26th June, 1982 would be relevant to determine the market value on account of acquisition by virtue of the subsequent notification, but time gap of more than five years will not entail the same amount of compensation in respect of the land acquired five years earlier.

The compensation determined on the basis of a notification five years later cannot be a yardstick for determining compensation of the land which is subject matter of present acquisition years earlier. Still further, the High Court was not justified in observing that gaps of few years in the notification have been ignored by this Court. In fact, on the contrary, the High Court has failed to note that the date of notification for the acquisition of land for the benefit of Parishad is five years earlier than those in the judgments relied upon by the High Court.

The order passed by the High Court in the appeals preferred by the land owners is set aside and the compensation awarded by the Reference Court @ Rs.120 per square yard apart from statutory benefits is restored. Appeals partly allowed.


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