COMMISSIONER OF INCOME TAX vs. DLF LTD

ITA/264/2010HC DelhiDLHC01163452200905 September 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH171 pages

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Cases cited in this judgment

Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.

Narendra & Ors. v. State of Uttar Pradesh & Anr.10 8
13 SCC 710 · 2011
69 citing
Sunder v. UOI19. 19
7 SCC 211 · 2001
56 citing
Pushpa Devi Bhagat Vs. Rajinder Singh (2006) 5 SCC 566, Horil v. Keshav
5 SCC 747 · 2010
48 citing
10 SCC 627
10 SCC 627 · 2004
47 citing
15 SCC 290
15 SCC 290 · 2014
47 citing
1963 SCC OnLine SC 305
1963 SCC OnLine SC 305 · 1963
47 citing
1999 SCC OnLine DEL 1070
1999 SCC OnLine DEL 1070 · 1999
47 citing
2 SCC 305
2 SCC 305 · 1995
47 citing
2001 SCC OnLine DEL 325
2001 SCC OnLine DEL 325 · 2001
47 citing
6 SCC 47
6 SCC 47 · 2011
47 citing
Jagdish Gulati v. UOI; LAC No. 224/11. Learned Senior Counsel
14 SCC 367 · 2009
47 citing
Union of India v. Kesar Singh & Ors. 6
4 SCC 180 · 1994
47 citing

LA.APP. 59/2007 & connected

Page 1 of 171 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Judgment Pronounced on : 26.09.2025 + LA.APP. 59/2007 & CM APPL. 13373/2016

BED RAM

.....Appellant Through: Mr. Dhruv Mehta, Sr. Adv. with Mr. Bhagwat Pd. Gupta, Mr. Rajesh Gupta and Mr. Ganga Ram Upadhyay, Advocates.

versus

UOI & ANR

.....Respondents Through: Mr. Sanjay Kumar Pathak, Standing Counsel with Ms. K.K. Kiran Pathak, Mr. Sunil Kumar Jha, Mr. Mohd. Sueb Akhtar, Mr. Divakar Kapil, Advocates for UOI. Mr. Sanjay Poddar, Sr. Advocate with Ms. Mrinalini Sen, Standing Counsel with Ms. Latika Malhotra, Mr. Govind Kumar, Mr. Apurv Kumar, Ms. Anamika, Advocates for DDA. + LA.APP. 372/2007

BHOPAL SINGH

.....Appellant Through: Mr. Dhruv Mehta, Sr. Adv. with Mr. Bhagwat Pd. Gupta, Mr. Rajesh Gupta and Mr. Ganga Ram Upadhyay, Advocates.

versus

UOI & ANR

.....Respondents Through: Mr. Sanjay Kumar Pathak, Standing Counsel with Ms. K.K. Kiran Pathak, Mr. Sunil Kumar Jha, Mr. M.S. Akhtar and Mr. Divakar Kapil, Advocates for UOI.

Mr. Sanjay Poddar, Sr. Advocate with Ms. Mrinalini Sen, Standing Counsel with Ms. Latika Malhotra, Mr. Govind Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

LA.APP. 59/2007 & connected

Page 2 of 171

Kumar, Mr. Apurv Kumar, Ms. Anamika, Advocates for DDA. + LA.APP. 40/2007

DHARAM VEER

.....Appellant Through: Mr. N.S. Chechi, Mr. Vaibhal Chechi and Ms. Rekha Chauhan, Advocates.

versus

UOI & ANR.

.....Respondents Through: Mr. Sanjay Kumar Pathak, Standing Counsel with Ms. K.K. Kiran Pathak, Mr. Sunil Kumar Jha, Mr. Mohd. Sueb Akhtar, Mr. Divakar Kapil, Advocates for UOI.

TABLE OF CONTENTS PREFACE…………………………………………………………………75 BRIEF FACTS………………………………………..……..…………....75 THE HISTORY OF ASSESSMENT……………………………………78 CONTENTIONS OF APPELLANT…………………………………….85 CONTENTIONS OF RESPONDENT NO.2/DDA……………………..92 CONTENTIONS OF RESPONDENT NO.1/UOI……………………...99 REJOINDER BY APPELLANT ………………………………………100 SUR-REJOINDER………………………………………………………103 THE IMPUGNED JUDGMENT.............................................................103 ANALYSIS & FINDINGS………………………...................................108 The Appeals…..…………………………….........................................109 Village Khizrabad ………………………............................................110 Village Kilokari ….…..…………………….........................................111 Village Nangli Razapur…………………............................................114 Village Garhi Mendu……………………............................................117 The Award…………………………………………………………….119 The Reference Court Judgments…………………………………….120 The Additional Evidence..…………………........................................122 The Statute…………………………………………………………….134 Compensation awarded in Village Behlolpur Khadar & Jasola..………………………………………........................................138 Proximity to developed colonies, agricultural activities & potentiality…………………………………………………………….145 The Location Plan………..…………………………………………...152 The Exemplar…………………………………………………………160 CONCLUSION………….………………………....................................170 Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

Page 81 of 171 at Rs.89,600/- per Bigha. The Coordinate Bench thus dismissed the batch of Appeals including the present Appeal. 10.1 By a separate order dated 07.06.2011 also, the Coordinate Bench of this Court decided the batch of Appeals including LA. APP. 1038/2008 captioned UOI. v. Khazan Singh & Ors. in respect of village Garhi Mendu, and revised the compensation awarded by the learned Reference Court to Rs. 89,600/- per Bigha as in the case of village Kilokari, Nangli Razapur and Khizrabad. 11. The order(s) dated 07.06.2011, as corrected by order dated 22.07.2011 passed by this Court, were challenged by the Appellant by filing a Special Leave Petition before the Supreme Court being Civil Appeal No. 1939/2012 captioned Union of India v. Ram Lal & Ors. and connected matters [hereinafter referred to as “SC Judgment”]. The Supreme Court by order dated 13.01.2015 passed two directions with respect to the matters in villages Kilokari, Khizrabad Nangli Razapur and Garhi Mendu. In the first instance, it was held that a Review Petition be filed before the High Court to permit the Appellant to produce additional documents, maps and awards before Single Judge within 30 days. The Court further held that if the Review Petition(s) were filed within 30 days, the Single Judge would consider the same without going into the question of limitation. The relevant extract of the SC judgment is set out below: “2. Briefly stated, the facts in the present appeals and petition are: the lis pertains to the determination of fair market value of lands admeasuring 1536 Bigha 10 biswa in village Garhi Mendu, belonging to the claimants/respondents herein. The said land was acquired under Section 11 of the Land Acquisition Act, 1894 (for short, "the Act"), by the appellants/petitioner herein for the public purpose of planned development of Delhi. 3. The said land, along with land in three other villages, namely Khirzahad [sic: Khizrabad], Kilolari [sic: Kilokari] and Chak Chilla, was notified by Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

Page 123 of 171 of the Appellant as well as the map of the location of the land. The witness relied on the judgment dated 04.01.2011 passed in LAC 75/2008 captioned Smt. Sudesh Bhatia v. Union of India & Anr.23 [hereinafter referred to as the “Behlolpur Khadar Reference Court Judgment”] as well as in LAC 27/2012 captioned S.S. Dhillon v. Union of India & Anr.24 to submit that these awards have not been challenged by the Respondent. 38. Two witnesses were produced by the Appellants before this Court, Mr. Karan Singh and Mr. Kailash Sharma [AW-1 in LA.APP. 54/2011 and AW- 1 in LA.APP. 59/2007 respectively]. Mr. Karan Singh deposed on the Khasra Girdavari showing notification of the land of the Appellants. He further deposed that the compensation for the adjoining village of Behlolpur Khadar which was acquired by the same notification was given at the rate of Rs.250/- sq. yds. The deponent also relied on the Behlolpur Khadar Reference Court Judgment which awarded Rs. 2.5 lakhs per Bigha for village Behlolpur Khadar as well as the judgment in Jagdish Gulati case which awarded Rs. 49,41,000/- per Bigha for land situated in the village Jasola. In addition, he confirmed that the land was being used by him for agricultural purposes. The relevant extract of the evidence of Mr. Karan Singh is set out below: “4. That it is pertinent to mention here that the instant Appeal of the Appellants i.e., L.A.APP NO. 54 OF 2011 titled Karan Singh vs. Union of India & Ors, was treated as the lead case before the Hon'ble Supreme Court of India as Civil Appeal No. 11236 of 2011 and it is on the basis of these additional documents (the Eicher map showing the location of the land of the instant Appellant, the khasra Girdawri showing cultivation on the land of the Appellant herein, Judgments/Awards by the Court of the LD.ADJ @ Rs.250 per Sq Yard in the adjoining Village Behlolpur which was acquired vide the same notification on the same date and for the same purpose) which were filed before the Hon'ble Supreme Court that the Hon'ble Apex court vide its order/judgment dated 13.01.2015 had granted an opportunity to the Appellant herein to file these

Page 124 of 171 documents before this Hon'ble court for being considered prior to adjudging the quantum of compensation to be awarded to the Appellant herein in comparison to the compensation so awarded earlier. It is further significant to mention that the benefit of the said order/Judgment dated 13.01.2015 so passed by the Hon'ble Supreme Court was extended to all other Appellants who were before the Hon'ble Supreme court then and are now before this Hon'ble Court. 5. That the Copy of the Eicher map showing the location of the land of the Appellant is marked as Exhibit AW1/2 (already filed in L.A.APP NO. 54 OF 2011 at page number 477.) 6. That the true copy of the Khasra girdawari showing the land of the Appellant herein as being used for agricultural purposes is marked as Exhibit AW1/3 (already filed in L.A.APP NO. 54 OF 2011 at page number 350-359.) (Original is in the possession of the Appellant and can be produced as and when directed by this Hon'ble Court).” [Emphasis supplied] 38.1 In his cross-examination conducted on 23.01.2016 by the Respondents the witness deposed that the nomenclature of the land was 'Sailabi', which when translated meant flood in the English translation filed. The witness also clarified that 'Sailabi' as mentioned in Khasra Girdavari meant the area in close proximity to the river Yamuna and that the Khasra Girdawari showed the cultivation carried out on the land. He further deposed that there were several established institutions like the women polytechnic, CRRI staff quarters which came into existence in the vicinity of the acquired land in the period from 1965-75. In addition, he deposed that the Eicher Map was filed to show the proximity of the land to Kalindi Kunj which was near Maharani Bagh the women polytechnic came into being in the year 1978-80. The relevant extract of the cross-examination is set out below: “23.01.2016 AW1 Statement of Mr. Karan Singh, S/o Late Sh. Likhi Ram, aged about 53 years, R/o 88, Taimur Nagar, Near New Friends Colony. New Delhi 110065, On SA.

Page 125 of 171 Q. What is the meaning of flood mentioned in Khasra Girdawari at running pages 350-359 in LA. APP. 54/2011 (Ex. AW1/3). Ans. The translator who-did translation of Khasra Girdawari has described the Urdu word Sailabi as ‘flood' in English. (Volunteered). This Khasra Girdawari also mentions details of the cultivation carried out in the particular years. The Eicher Map (Ex. AW1/2) filed by me along with my affidavit was prepared in the year 2012. (Volunteered) if required, I can produce the original book carrying this map also. I was not at all associated with the preparation of this Eicher Map (Ex. AW1/2). (Volunteered) It was filed only to show the proximity of my land to Kalindi Colony. I never applied to the MCD seeking sanction of the layout plan with respect to land in question. The Kalindi Colony near Maharani Bagh started developing from the year 1970. I do not know about the completion of development of that area. Likewise, Maharani Bagh was also developed in the years 1965- 70. The Women Polytechnic in Maharani Bagh came into being approximately in the year 1978-80. CRRI Staff Quarters came into existence in the year 1975-76 Akshardham Temple also came into existence about 10-12 years back Common Wealth Garnes were held, in the year 2010. According to me, the 'posh colony' means a colony which has all the civic amenities and facilities for the convenience of the residents. According to me, the word 'Sailabi' means the area which is in close proximity to the river Yamuna and has been categorised as such. The other colonies at Maharani Bagh, Kalindi Colony, New Friends Colony have been categorized as plain land. I have never raised any objection to the word ‘Sailibi' [sic; Sailabi] mentioned in Khasra Girdawari (Ex. AW1/3) in relation to my land.” [Emphasis Supplied] 39. The other witness - son of Shri Bed Ram, Shri Kailash Sharma, also deposed before this Court by way of an Affidavit dated 14.09.2015. The said Kailash Sharma deposed that the acquired land in village Kilokari touches New Friends Colony, Kalindi Colony, Maharani Bagh and various other colonies of Delhi and is in the vicinity of Akshardham Temple and Common Wealth Game Village Complex. The witness deposed that the acquired land is neither the river bed nor the flood plain since the land which was submerged Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

Page 128 of 171 70s25 and as did the CRRI staff quarters. Shri Karan Singh also deposed that these colonies of Maharani Bagh and New Friends Colony etc. had all civic amenities and facilities for the convenience of the residence. 41. The Respondents on the other hand placed on record an Affidavit dated 24.05.2016 of the Naib Tehsildar of the Office of the LAC, Shri Ravinder Dang, as RW-1. The said witness referred to the water logging in the areas of Sidharth Nagar and South East Delhi and relied on an inspection report in that behalf. The Respondent’s witness also relied on an inspection report carried out by the Central Ground Water Board (CGWB) where the technical expert of the CGWB as noted in paragraph 4 of the report that the historical level data shows that the wells located at Kalindi Colony, Maharani Bagh and Sarai Kalen Khan being in proximity of the river Yamuna have a shallow ground water levels varying from less than 2 to 4 meters below ground level, in the following terms: “EVIDENCE BY WAY OF AFFADVIT ON BEHALF OF UNION OF INDIA I, Ravinder Dang, aged 50 years S/o Sh. Kesar Dass. Presently Posted As Naib Tehsildar With the Office Of Land Acquisition Collector, South/East, Having Its Office At Lajpat Nagar-IV, New Delhi do hereby solemnly affirm and declare as under: “2. That I say that the answering respondent/UOI on the other hand intend to prove that the compensation as was granted by the than Land Acquisition Collector under the captioned Award was just and fair and the same does not require any enhancement by the Hon’ble Court. 3. That I say that it is stated that in the third week of May 2016, the counsel for the UOI has informed about one writ petition bearing W.P.(C) No. 7957/2014 titled Mohan Lal Ahuja v. Delhi Jal Board which stated to have pertained to the problem of water logging in Siddharth Nagar and adjoining areas of South-East Delhi. The counsel further informed that the Hon'ble Court has passed orders to conduct an inspection as to the reasons of the water logging in Siddharth Nagar and its adjoining areas. The counsel further informed that the Central Ground Water Board has

Page 129 of 171 conducted an inspection in Siddharth Nagar and adjoining areas of South East Delhi to check the cause of water logging problem and have submitted a report thereto. A copy of the inspection report carried out by the Central Ground Water Board was also placed before the office of answering respondent. The technical experts of Central Ground Water Board must have carried out the said inspection and it has been noted in para 4 of the said report that the historical water level data of its observation wells located at Batla House, Kalindi Kunj. Maharani Bagh and Sarai Kale Khan reveals that these areas being the proximity of Yamuna river have shallow ground water levels varying from less than 2 to 4 meters below ground level. A copy of the said inspection report has been filed before the Hon'ble Court and is exhibited as Ex. RW1/1.” [Emphasis supplied] 41.1 In the cross-examination conducted by the Appellant on 23.09.2016, the said witness confirmed that the areas of Maharani Bagh, Kalindi Colony, New Friends Colony, Central Road Research Institute [CRRI] and the Village Polytechnic are part of the villages of Behlolpur Khadar, Kilokari, Khizrabad and now also Jasola. He further affirmed that these are adjoining to ITO, Ashram Chowk and the Ring Road. 41.2 The witness also deposed that there were multi-storeyed buildings including DDA flats constructed in Siddharth Nagar and Bhagwan Nagar. In addition, the witness affirmed that the areas of Maharani Bagh and New Friends Colony and Siddharth Nagar were developed 30 years ago. The relevant extract of the cross-examination is set out below: “STATEMENT OF RW-1: MR. RAVINDER DANG, S/O SH, KESAR DASS. PRESENTLY POSTED AS NAIB TEHSILDAR WITH OFFICE OF LAND ACQUISITION COLLECTOR, SOUTH/EAST, HAVING ITS OFFICE AT LAJPAT NAGAR-IV, NEW DELHI ON S.A. … Q. I put it to you that the areas, namely, Maharani Bagh, Kalandi Colony, New Friends Colony, Central Road Research Institute and Women Polytechnic are situated in the previously acquired lands which are part of the villages, namely, Behloorpur [sic : Behlolpur]. Khizrabad and Kilokari. What do you have to say? Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

Page 130 of 171 A. It is correct that the areas, namely, Maharani Bagh, Kalandi Colony, New Friends Colony, Central Road Research Institute and Women Polytechnic are part of the villages, namely, Behlolpur, Khizrabad, Kilokari and also Jasola. It is correct that the villages, namely, Behloorpur [sic: Behlolpur], Khizrabad and Kilokari are adjoining to the Ring Road i.e. from ITO to Ashram Chowk via Sarai Kale Khan. It is correct that Maharani Bagh and Kalandi Colony also are adjoining to the Ring Road. It is correct that Siddharth Nagar and Bhagwan Nagar are situated adjacent to each other and both the areas are adjoining the Naala. It is correct that both in Siddharth Nagar and Bhagwan Nagar buildings to the extent of four floors are constructed. It is also correct that multi storied buildings are constructed and existing in areas Maharani Bagh, Kalandi Colony and New Friends Colony. I do not know exactly how many years it is, since Maharani Bagh, Kalandi Clony [sic: colony], New Friends Colony, Siddharth Nagar and Bhagwan Nagar have been developed. Q: I put it to you that there are DDA Flats constructed in Siddharth Nagar and Siddharth Nagar Extension. What do you have to say? It is correct. Again said, I am sure of DDA Flats in Siddharth Nagar Extension. But I do not know about DDA Flats in Siddharth Nagar. Q. Can you deny the fact that the areas, namely, Maharani Bagh, Kalandi Clony [sic : colony], New Friends Colony, Siddharth Nagar and Bhagwan Nagar are developed way back 30-40 years? A. It is correct that they are developed for more than 30 years. I do not know exactly in the land of which village the Akshardham and Common Wealth Village are constructed. May be in Behloorpur [sic : Behlolpur] Village. I have not seen the land of Village Nangli Razapur: I do not know exactly whether Mayur Vihar is situated on one side of the land in village Nangli Razapur. I do not know exactly whether Chiraga Janabi area is there in our revenue records. I can say that only after seeing the record. I am not sure whether Indraprastha is adjoining to Village Chiraga Janubi. It is correct that, Indraprastha Millenium Depot is adjacent to village Behlolpur.”

Page 131 of 171 41.3 In the further cross-examination of the Respondents’ witness, it was deposed that the Akshardham as well as the Commonwealth Games Village are situated in the area adjacent. The witness deposed that there was a construction like "power station" with chimney on the river side of the ‘Ring Road’ adjacent to the petrol pump in the acquired land. He deposed that the land in village Nangli Razapur is opposite to Akshardham which is located on the other side of the Nazimuddin Bridge and that the Indraprastha Millenium Depot is adjacent to Village Behlolpur Khadar. The witness also deposed about the Mayur Vihar area and the fact that there were DDA flats constructed in that area. A question was put to the witnesses as to whether the acquired land was given for the DND flyover or other commercial venture to which the witness responded that he was not aware and that he could not say whether the record was available or not. The relevant extract is below: “STATEMENT OF RW-1: MR. RAVINDER DANG (recalled for further cross-examination post lunch) … Q. I put it to you that an area named Taimoor Nagar Extension has been developed with multi storied buildings in the acquired land unauthorisingly. What do you say? A. I do not know. There is some construction like power station with chimney on the river side of the ring Road adjacent to the petrol pump in the acquired land, however, I am not sure whether it is a power station. It is correct that the acquired land of village Nangli Razapur and Behloorpur [sic: Behlolpur] are opposite to each other and near Chiraga Janubi as per the map prepared by the reference court on the directions of Hon'ble High Court. The Akshardham and Common Wealth Games Village are adjacent to each other and both of them are on the same side of Nizammuddin Bridge. It is correct that the land of Nangli Razapur is opposite to Akshardham and Common Wealth Games Village and situated on the other side of the Nizammuddin Bridge. I do not know whether there was any de-notification with regard to the part of notified land in Nangii Razapur, Kilokari, Behloorpur and Khizrabad. Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

Page 132 of 171 I have seen DND flyover. I do not know exactly in the land of which village the same is constructed. It is correct that toll tax is imposed on vehicular traffic on DND flyover. I do not know the toll tax on DND flyover is collected by a private company. It is correct that DND flyover is a commercial venture. I do not know the DND flyover was planned even before year 1990. I do not know whether the land was given for commercial venture like DND flyover from the acquired land in the villages Kilokari and Khizrabad. I can say only after seeing the record but I cannot say whether the record is available or not. I have not seen the site of acquired land in the village Jasola. In the map prepared by the Presiding Officer of the Reference Court, acquired land of Village Jasola is also shown. I do not know whether the land of village Jasola and the land of villages Kilokari and Khizrabad and Behloorpur [sic: Behlolpur] were acquired by the same notification dated 23.06.1989 in the year 1989. Q. I put it to you that all the acquired lands of villages Kilokari, Khizrabad, Behloorpur [sic: Behlolpur], Nagli Razapur Jasola were acquired by a single notification dated 23.06.1989 for the single purpose of channelization of river Yamuna and for the planned development of Delhi. Is it correct or not? A. I do not know. Q. Where is Batla House situated? A. Near Okhla. I have not visited the places Batla House and Kalindi Kunj. I do not have the personal knowledge of any of the particulars of the W.P.(C)7957/2014. I have visited Mayur Vihar about one to one and half year ago. It is correct that DDA Flats are constructed in the area Mayur Vihar. The said DDA Flats are may be of 3 or 4 floors. I do not know whether there are any DDA Flats with ten floors are constructed in Mayur Vihar. I do not know whether there are any five star hotels namely "Double Tree' and 'Hilton' also constructed in Mayur Vihar. Q. I put it to you that an event i.e. world cultural festival was also organized recently by Shri. Ravi Shankar on 11.03.2016 in the acquired lands which are adjacent to DND Flyover. What do say? A. I do not know. I have come to know about the program only from news channels. I do not know whether any permission was granted by our department for conducting the above said program.” [Emphasis supplied] Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

Page 136 of 171 Court, regardless of whether they have made an Application for such enhancement. Section 28A of the LA Act reads as follows: “28A. Re-determination of the amount of compensation on the basis of the award of the Court. – (1) where in an award under this part, the court allows to the applicant any amount of compensation in excess of the amount awarded by the collector under section 11, the persons interested in all the other land covered by the same notification under section 4, sub-section (1) and who are also aggrieved by the award of the Collector may, notwithstanding that they had not made an application to the Collector under section 18, by written application to the Collector within three months from the date of the award of the Court require that the amount of compensation payable to them may be re-determined on the basis of the amount of compensation awarded by the court: Provided that in computing the period of three months within which an application to the Collector shall be made under this sub-section, the day on which the award was pronounced and the time requisite for obtaining a copy of the award shall be excluded. (2) The Collector shall, on receipt of an application under sub-section (1), conduct an inquiry after giving notice to all the persons interested and giving them a reasonable opportunity of being heard, and make an award determining the amount of compensation payable to the applicants. (3) Any person who has not accepted the award under sub-section (2) may, by written application to the Collector, required that the matter be referred by the Collector for the determination of the Court and the provisions of sections 18 to 28 shall, so far as may be, apply to such reference as they apply to a reference under section 18.” [Emphasis supplied] 42.2 The Supreme Court in Narendra case, while explaining Section 28A of the LA Act has held that once a particular rate of compensation is judicially determined, the benefit must be given to all, even those who could not approach the Court. It held that even in the absence of exemplars and other evidence, a higher compensation can be allowed for those whose land was acquired under the same notification. The Court explained that what needs to be kept in mind in the matter of compulsory acquisition by the Government is that the villagers whose land gets acquired are not willing parties but are Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

xxx 7. It transpires from the bare reading of the aforesaid provision that even in the absence of exemplars and other evidence, higher compensation can be allowed for others whose land was acquired under the same notification. 8. The purpose and objective behind the aforesaid provision is salutary in nature. It is kept in mind that those landowners who are agriculturist in most of the cases, and whose land is acquired for public purpose should get fair compensation. Once a particular rate of compensation is judicially determined, which becomes a fair compensation, benefit thereof is to be given even to those who could not approach the court. It is with this aim the aforesaid provision is incorporated by the legislature. Once we keep the aforesaid purpose in mind, the mere fact that the compensation which was claimed by some of the villagers was at lesser rate than the compensation which is ultimately determined to be fair compensation, should not be a ground to deny such persons appropriate and fair compensation on the ground that they claimed compensation at a lesser rate. In such cases, strict rule of pleadings are not be made applicable and rendering substantial justice to the parties has to be the paramount consideration. It is to be kept in mind that in the matter of compulsory acquisition of lands by the Government, the villagers whose land gets acquired are not willing parties. It was not their voluntary act to sell off their land. They were compelled to give the land to the State for public purpose. For this purpose, the consideration which is to be paid to them is also not of their choice. On the contrary, as per the scheme of the Act, the rate at which compensation should be paid to the persons divested of their land is determined by the Land Acquisition Collector. The Scheme further provides that his determination is subject to judicial scrutiny in the form of reference to the District Judge and appeal to the High Court, etc. In order to ensure that the landowners are given proper compensation, the Act provides for “fair compensation”. Once such a fair compensation is determined judicially, all landowners whose land was taken away by the same notification should become the beneficiary thereof. Not only it is an aspect of good governance, failing to do so would also amount to discrimination by Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

Page 140 of 171 30-10-1963. The High Court noticed that in several judgments of this Court escalation at different and varying rates i.e. 6% per annum from 1959 to 1965, @ 10% per annum for every year from 1966 to 1973 and @ 12% per annum from 1975 had been considered to be reasonable increase to arrive at the fair market value, assuming that the pace of escalation during this period was normal for the entire period from 1959 onwards. Since no material was placed on record to show that there was any abnormality during the period, the High Court applied the same principle to the facts and circumstances before it, and accepted increase of 10% every year progressively from 1963 to 1973 and thereafter @ 12% every year progressively up to the date of acquisition. The High Court noticed in the judgment that if escalation is allowed on this basis, the fair market value would be Rs 1,28,889 per bigha. In case progressive increase is allowed @ 10% for the entire period, the amount will work out to Rs 1,08,397 per bigha. Allowing appreciation @ 12% for every year, not cumulatively, but at a flat rate of 12% per annum from 1963 to 1983, the amount would work out to Rs 56,112 per bigha. The High Court in its judgment under appeal pointed out that the market value of Rs 16,750 per bigha fixed in the case of Dharambir v. Union of India [RFA No. 554 of 1992, decided on 23-9-1996] was not in respect of commercial land but only of agricultural land. That the market value of agricultural land is much lower than that of land suitable for commercial purposes, is trite. After having worked out the market value of the lands on various bases and keeping in view the fact that between 8-12-1982 and 2-6-1983, the lands in question had at least some commercial potentiality, the High Court decided that the fair market value of all categories of lands situated in the villages in question as on the date of acquisition should be fixed at Rs 82,255 per bigha.” [Emphasis supplied] 45. The Supreme Court in K. Periasami Vs. Sub-Tehsildar (Land Acquisition)26 has held that since the land of the Appellant was held by the LAC to be in a more advantageous position and a higher rate of compensation was awarded to such land, the other lands situated in the same area acquired by the same notification were also entitled to compensation at parity and the compensation was enhanced accordingly. The relevant extract of the K. Periasami case is out below: “2. It is not disputed that the market value of lands acquired pursuant to the said notification has been determined by different Benches of the High Court such as Appeal Nos. 538 of 1987 and 1226 of 1986 titled Special Tehsildar,

Page 145 of 171 per Bigha to be too high. Relying on the potentiality of the land and its close proximity to Maharani Bagh and Kalindi colony which were developed in the late 1980’s and given its potential, found the market value of the land at Rs. 2.5 lakhs per Bigha. Thus, it was directed that the enhanced compensation be awarded. The relevant extract is set out below: “18. The notification under Section 4 in the present case was passed on 23.06.1989. In the late eighties, land prices in Delhi had a spiral rise. The distance and fertility lost significance keeping in view the potentiality of the acquired land being put to the use of the planned development in the Capital city of India. The land in question lies in close proximity to Maharani Bagh and Kalindi Colony. In late eighties, the question of having amenities or being surrounded by developed areas can hardly be an Issue In question. In the matter of Krishna Yachendra Bahadurvaru V. The Special Land Acquisition Officer, City Improvement Trust Board, Bangalore & Ors reported in AIR 1979 SC 869, the Apex Court has held that the process of determination of market value in any case must depend largely on evaluation of any Imponderables and hence it must necessarily be to some extent a matter of conjecture or guess work. 19. Keeping in view of the aforesaid factors in mind, more particularly the sales of the land in almost similar areas and around the sametime and the cited Judgments, though not a conclusive proof of evidence, It would be afford some basis, after taking into consideration that there is a general tendency to under- value the sales for the purpose of evading the stamp duty etc., as also the compensation awarded almost 30 years ago i.e. 1959 as Rs. 26,000/- per bigha, I would quantify the market value of the land, keeping Its potential of being put to better use, at Rs. 2.5 lakh per bigha.” [Emphasis supplied] Proximity to developed colonies, agricultural activities and potentiality 49. The Respondent/DDA has contended that the Awards records that the acquired land is situated between two ‘Forward Bunds’ and the Yamuna river and thus, there is no construction on the land and only a few trees were found available. Emphasis has thus been laid by the Respondents on the fact that the acquired land was ‘Sailabi’ in nature and between the two "Forward Bunds" and thus had limited or no potentiality. The learned Reference Court found Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

Page 148 of 171 The officials led to embankment of River Yamuna in village Nanglirazapur via Marginal Bund Road through ‘Pantoon Road’. A rough sketch i.e., Site plan by approximation; prepared by officials of DDA to give a broad idea of the location of villages has been handed over. The same is Annexure 1 and clearly depicts the location of villages Behlolpur Khadar, Nangli Razapur, Kilokari, Chakchilla, Khizrabad, Jogabai, Okhla, Jasola and Madanpur Khadar. A copy of site plan indicating the khasra no.'s of village Nanglirazapur has been handed over by officials of LAC South. The officials explained at site that some of the Khasra no's which are sub-merged or likely to be sub-merged and are adjacent to water stream had been de-notified while the others had been acquired. The same are reflected in different shades in the site plan (Annexure II). The officials informed that the acquired land extended upto 500 meters and may be more from the stream of water which was flowing currently. The land on both sides at the 'site spot’ appeared to be under cultivation. However, it is pertinent to note that officials from Irrigation and Flood Control Department informed that as and when the water level in river Yamuna crosses a mark of 204.83, the land gets covered with water, depending an amount of discharge of water in the river. It was also pointed out that owing to aforesaid reasons no development has been permitted from 'Marginal Bund Road till embankment of River Yamuna (As depicted in Annexure I). It was observed that there was no substantial development except that land appears to be utilized near the site for agricultural purpose. Thereafter the officials led to show the approximate location of land of village Kilokari, Behlolpur and Khizrabad from Ring Road and D.N.D.Road. The officials showed that no activity/development on the land near to the embankment could be undertaken except for agricultural activity. The spot inspection commenced at about 2.40 p.m and has been completed at about 4.45 p.m.” [Emphasis supplied] 51.1 This also becomes clear from the photographs which were annexed along with the Inspection Report. These photographs evidence the cultivation of the land and reflect that agricultural activity on the land. They show dry cultivated land with some bushes and shrubs as well and that the lands appear to be irrigated. Some of these photographs are reproduced below: Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

Page 157 of 171 valuation method requires consideration of both the current market value as well as the potential increase in that market value in the immediate or near future. Hence, the Court held that valuation must rest on evidence, not conjectures, and must be grounded in realistic market conditions. The relevant extract of the P. Ram Reddy case is below: “8. Building potentiality of acquired land.— Market value of land acquired under the LA Act is the main component of the amount of compensation awardable for such land under Section 23(1) of the LA Act. The market value of such land must relate to the last of the dates of publication of notification or giving of public notice of substance of such notification according to Section 4(1) of the LA Act. Such market value of the acquired land cannot only be its value with reference to the actual use to which it was put on the relevant date envisaged under Section 4(1) of the LA Act, but ought to be its value with reference to the better use to which it is reasonably capable of being put in the immediate or near future. Possibility of the acquired land put to certain use on the date envisaged under Section 4(1) of the LA Act, of becoming available for better use in the immediate or near future, is regarded as its potentiality. It is for this reason that the market value of the acquired land when has to be determined with reference to the date envisaged under Section 4(1) of the LA Act, the same has to be done not merely with reference to the use to which it was put on such date, but also on the possibility of it becoming available in the immediate or near future for better use, i.e., on its potentiality. When the acquired land has the potentiality of being used for building purposes in the immediate or near future it is such potentiality which is regarded as building potentiality of the acquired land. Therefore, if the acquired land has the building potentiality, its value, like the value of any other potentiality of the land should necessarily be taken into account for determining the market value of such land. Therefore, when a land with building potentiality is acquired, the price which its willing seller could reasonably expect to obtain from its willing purchaser with reference to the date envisaged under Section 4(1) of the LA Act, ought to necessarily include that portion of the price of the land attributable to its building potentiality. Such price of the acquired land then becomes its market value envisaged under Section 23(1) of the LA Act. If that be the market value of the acquired land with building potentiality, which acquired land could be regarded to have a building potentiality and how the market value of such acquired land with such building potentiality requires to be measured or determined are matters which remain for our consideration now.” [Emphasis supplied] Digitally Signed By:RAHUL Signing Date:05.10.2025 11:29:12 Signature Not Verified

Page 158 of 171 55.1 The Court further held that at the time of determining market value of the land acquired with building potentiality, the possibility of the acquired land used for putting up buildings in the near future has to be seen and a hypothetical layout of the building plots in the acquired land has to be prepared. It further held that whether or not the acquired land as a building potentiality as to be decided with reference to the material on record. The relevant extract is below: “10. Then, comes the question of determining the market value of the acquired land with building potentiality. Undoubtedly such market value of the acquired land with building potentiality comprises of the market value of the land having regard to the use to which it was put on the relevant date envisaged under Section 4(1) of the LA Act plus the increase in that market value because of the possibility of the acquired land being used for putting up buildings, in the immediate or near future. If there is any other land with building potentiality similar to the acquired land which had been sold for a price obtained by a willing seller from a willing purchaser, such price could be taken to be the market value of the acquired land, in that, it would have comprised of the market value of the land as was being actually used plus increase in price attributable to its building potentiality. If the prices fetched by sale of similar land with building potentiality in the neighbourhood or vicinity of the acquired lands with building potentiality, as on the relevant date envisaged under Section 4(1) of the LA Act, are unavailable, it becomes necessary to find out whether any building plots laid out in a land similar to the acquired land had been sold by a willing seller to a willing buyer on or nearabout the relevant date under Section 4(1) when the acquired land had been proposed for acquisition and then to find out what would be the price which the acquired land would have fetched if it had been sold by making it into building plots similar to those sold. In other words, a hypothetical layout of building plots in the acquired land similar to that of the layout of building plots actually made in the other similar land, has to be prepared, and the price fetched by sale of building plots in the layout actually made should form the basis for fixing the total price of the acquired land with building potentiality to be got if plots similar to other plots had been made in the latter land and sold by taking into account plus factors and minus factors involved in the process. xxxx

Page 162 of 171 river Yamuna, escalation at Rs. 1,000/- will not be reasonable. The relevant extract of the Tindey case is below: “We will have to place reliance upon decision in Deewan Ram Saroop's case (supra) wherein in 1961 also acquisition had taken place for similar purpose as in the instant case and compensation was fixed at Rs. 12,500/- per bigha. It is a fact that there has been increase in market value of the land. In the absence of any other material, we presume that in this locality increase must have taken place from 1961 to 1976 at a normal pace. It will not be unreasonable to allow an increase @ 12% p.a. in order to arrive at market value. In Prakash Chand Kashyap v. Union of India, AIR 1988 Delhi 316, an escalation of 12% p.a. was considered as reasonable instead of past practice of Court in allowing escalation @ Rs. 1,000/- per bigha. In Rameshwar Solanki's v. Union of India, 57 (1995) DLT 410, also placing reliance on the decision in Prakash Chand Kashyap's case (supra). Divisions Bench observed that it would be appropriate to discard the past practice of this Court to give escalation @ Rs. 1,000/- per bigha and to allow escalation @ 12% p.a., which has been given following statutory provisions made by the amendments in the Act. In the absence of any other material in the instant case also, we are of the view that the market value as on 10.5.1976 can be worked out by placing reliance upon the earlier award of the Court in Deewan Ram Saroop's case (supra) and by allowing 12% p.a. escalation thereon. Otherwise also as the land was situated in Yamuna, we are of the view that the past practice of allowing escalation @ Rs. 1,000/- per bigha p.a. will not be reasonable. As such, we are of the view that the market value as on 10.5.1976 would be Rs. 35,000/- per bigha. Consequently, we allow the appeal with proportionate costs, holding the appellants to be entitled to compensation @ Rs. 35,000/- per bigha. Over and above the amount of compensation, the appellants are also entitled to solatium @ 15% and interest @ 6% p.a. from the date of Collector taking over possession till date of making payment.”

Page 166 of 171 “flooded” as in the case of Garhi Mendu or “khaddar” as in the case of Khizrabad and Nangli Razapur or ‘Sailabi’ as in the case of Kilokari. The categorization of all these lands in view of their potentiality and proximity to developed colonies as assessed by the LAC is the same. 65.2 The approach of LAC in awarding similar compensation in respect of village having Khadar land and flooded land [Garhi Mendu] also shows that the Government viewed the lands for potential development on an equal scale. Hence, the vast difference between the award of village Behlolpur Khadar and villages that are covered in this reference is unwarranted. 66. The Supreme Court in Union of India v. Bal Ram and Anr.31 had held that while taking into consideration the lands coming under different villages which had been acquired for the same purpose and whether the nature and quality of the lands is by and large similar, there was no justification to make any distinction between the lands lying in different villages. The Court was deciding the lands acquired in 13 villages for the Plan Development Area near the Palam Airport. The Court held that the view taken that it would be unfair to discriminate between the land owners when the purpose of acquisition is the same and the lands are identical and similar though lying in different villages, could not be interfered with. The relevant extract is below: “3. The ground urged before us is that in view of the decision in Kanwar Singh v. Union of India contiguity of villages could not by itself be sufficient to draw an inference of similarity in character of the lands in awarding the compensation and, therefore, the reasoning of the High Court is not correct. 4. The High Court indeed did not rely upon the contiguity of the lands alone but it found that the nature/quality of the lands is by and large similar to those lands considered in Satpal case. If that is the finding of the High Court, we do not think there would be any justification to make any distinction