JUDGMENT M. Katju, J.
1. These four connected appeals are being disposed of by a common judgment.
2. Heard Sri B.D. Mandhyan learned counsel for the appellants and Sri Pankaj Mittal for respondents.
3. These appeals have been filed against the judgment of the IVth Additional District Judge, Meerut dated 25.5.1993 in Reference under Section 18 of the Land Acquisition Act by which compensation awarded in the award by Special Land Acquisition Officer dated 4.12.1987 has been enhanced from Rs. 9.92 paise to Rs. 74 per square yards for the land acquired.
4. The respondent in First Appeal No. 522 of 1993 Khushi Ram was Bhumidhar of Khasra No. 24 area 7 bigha 3 biswa and 3 biswansi in village Latifpur Baraut, district Bagpat. This land was acquired for the Krishi Utpadan Mandi Samiti, Baraut and an award was given on 4.12.1987 under Section 11 of the Land Acquisition Act. Aggrieved against the award Khushi Ram filed a reference application and the matter was referred to the court below for enhancement of the compensation. It was alleged by Khushi Ram that the compensation awarded is much less than the market value of the land. It was alleged that the said land is adjacent to Gurana Baraut Abadi and was very fertile and was a land of class one category having facility for irrigation. It was alleged that the land has great potential and hence the award was not correct and unjustified. It was further alleged that the exemplar relied in the award was not proper and was of very low rate and did not reflect the correct value. He claimed that the compensation should have been awarded at the rate of Rs. 90 per square yard instead of Rs. 9.92.
5. The appellant contested the reference and alleged that the land was used for agriculture purpose. It was denied that the land in dispute was adjacent to the road going from Meerut to Gurana and was adjacent to the Baraut Abadi. It was alleged that the valuation was done at the circle rate. It was denied that the rate awarded was not proper and the exemplar relied by the SLAO was not proper.
6. The court below framed six issues and we are here concerned herewith the finding on issue Nos. 1, 2 and 3. All these issues are connected and are based on the same evidence. These issues related to the question of adequacy of the compensation.
7. On behalf of the claimants P.W. 1 Khushi Ram, P.W. 2 Suresh Chandra Lekhpal and P.W. 3 Arun Kumar Goel Amin, Land Acquisition office, Meerut were produced while on behalf of the Mandi Samiti D.W. 1 Shri Prasad Sharma, Secretary of Mandi Samiti was produced. Both sides also adduced documentary evidence. This case was heard along with the other similar cases. In the impugned judgment reference has been made to the Government order dated 6.7.1981 by which the State Government had directed that the highest exemplar should be the basis of the award. This circular has referred to the previous G.O. dated 24.4.1973. The court below has relied on the exemplar dated 27.6.1983. In this exemplar the compensation awarded was at the rate of Rs. 40 per square yard.
8. It may be mentioned that the aforesaid exemplar dated 27.6.1983 had been sent to the A.D.M. (Finance) for the purpose of determining the stamp duty. By office order dated 22.2.1984 A.D.M. (Finance) was of the opinion that in fact the said land has been undervalued to avoid paying the full stamp duty and the real value was Rs. 74 per square yard as per the circle rate. This order of the A.D.M. (Finance) dated 22.2.1984 is at page 120 of the respondents paper book in this appeal. The State of U. P. issued directions on 29.11.1988 that the compensation should be at the rate of Rs. 74 per square yard vide paper 38 Ga page 58 of the respondent's paper book.
9. It was urged by Sri B.D. Mandhyan learned counsel for the appellants that the exemplar relied on by the court below is of a small area whereas the land which has been acquired for the Mandi Samiti is of a large area. Hence he has urged that the said exemplar should not have been relied upon.
10. In our opinion the facts of the case are squarely covered by the Supreme Court decision in Union of India v. Ram Phool, (2003) 10 SCC 167 and the decision of the Supreme Court in Union of India v. Zila Singh, (2003) 10 SCC 166. In these decisions it was held that the sale price in respect of a smaller piece of land cannot be the basis for determination of the market value of a vast stretch of land.
11. In the present case the exemplar relied on by the claimant is of 1050 square yards of land i.e., about 0.7 bigha, whereas the land which has been acquired is of 88 bighas of land. Similarly, in all the connected cases the exemplar sale deeds which have been relied upon are of very small area as compared to the land which has been acquired.
12. In the Land Acquisition Officer v. Nookala Rajamallu and Ors., JT 2003 (9) SC 433, the Supreme Court observed that it cannot be laid down as an absolute proposition that the rates fixed for the small plots cannot be made the basis for fixation of the rate for a large plot. However, to do so necessary deductions and adjustments had to be made while determination of the price. On the facts of that case a deduction of 53% was held to be proper.
13. It is well-settled that where a large area is the subject matter of acquisition the rate for a small plot cannot be said to be a safe guide. In Collector of Lakhimpur v. B.C. Dutta, AIR 1971 SC 2015 ; Prithvi Raj v. State of M. P., AIR 1977 SC 1560 ; Kausalya Devi v. Land Acquisition Officer, AIR 1984 SC 892 and Suresh Kumar v. Town Improvement Trust, AIR 1989 SC 1222, the Supreme Court held that the rate paid for a small parcel of land does not provide a safe guide or criterion for determining the market value of the land of large area which is acquired. It is an undisputed principle as laid down in Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam, AIR 1939 PC 98, that the compensation must be determined by reference to the price which a willing vendor might reasonably expect to receive from a willing purchaser.
14. In Chimanlal Hargovinddas v. Special Land Acquisition Officer, AIR 1988 SC 1652, the relevant considerations for valuing the land acquired under the Land Acquisition Act have been given in great detail. In Hasan Ali v. State of Maharashtra, AIR 1988 SC, deduction was made of 50% where the exemplar was of a smaller area. In Kisan Utpadan Mandi Samiti, Jhansi v. State of U. P., 1998 RD 732, it was held that if the land which has been acquired runs into a large chunk of area and the smaller plot cannot be made as a basis for determination of the compensation. In Lila Ghosh v. State of West Bengal, (2004) 1 UPLBEC 467, the Supreme Court held that large plots always fetch less than small plots.
15. Learned counsel for the respondents submitted that the market value has been calculated on the basis of the value fixed by the A.D.M. (Finance) who calculated the value for the purpose of stamp duty. In this connection it has been held by the Supreme Court in Kisan Utpadan Mandi Samiti v. Vipin Kumar, JT 2004 (1) SC 344, that this cannot be done. The market value has to be determined on the basis of sale deeds of comparable land and not on the basis of the value calculated under the Stamp Act. In Jawajee Nagnatham v. Revenue Divisional Officer, JT 1994 (2) SC 604, the Supreme Court held that the market value for the purpose of Land Acquisition Act cannot be determined on the basis of the value in the Basic Valuation Registration prepared and maintained for the purpose of collecting stamp duty.
16. It is well-settled that the circle rate cannot be the basis for determining of market value under the Land Acquisition Act. The circle rate is meant only to collect the stamp duty but it cannot be treated as the market rate for the purpose of the Land Acquisition Act, particularly when a vast stretch of land was acquired.
17. In our opinion, the court below has also wrongly relied upon the Government orders which directed that exemplar sale deed of the highest value should be treated as the basis for determination of value. These Government orders have no statutory force and in fact they were subsequently withdrawn. The court below has to apply its own judicial mind for determining the evaluation, and it cannot be held bound by the aforesaid Government orders vide Basdeo Singh v. State of U. P., 2004 (1) AWC 822 : 2004 ALR 305 (Para 19). In our opinion the court below has not followed the relevant principles of valuation of land for the purpose of the Land Acquisition Act as laid down in the aforesaid decisions of the Supreme Court and this Court. The court below should not have relied on the exemplar sale deed dated 27.6.1983 which was only for a smaller plot of land of 1050 square yards i.e., 0.7 bighas of land whereas the land acquired is of 88 bighas i.e., more than 100 time bigger than the land of the exemplar relied upon.
18. For the reasons given above, all these appeals are allowed and the matter is remanded to the court below for fresh determination of the market value of the land acquired in accordance with the principles laid down in the aforesaid decisions of the Supreme Court and this Court. We hope and trust that the court below will decide the matter expeditiously.