Amount determined for land acquisition compensation without any document is arbitrary, trial court judgment, decree set aside: Justice Ashok Kumar Pandey, Patna High Court

Patna High Court delivered 12 judgements on October 14, 2025 in Sri Gudar Sao vs. The State of Bihar, Garbhu Rai vs. Harihar Rai, Kumari Neelam Devi vs. Sri Satish Kumar, Sunila Devi vs. Pankaj Kumar, Alok Kumar vs. Smt. Anupama Singh, Phool Kant Mishra vs. The State Of Bihar, The Bihar Staff Selection Commission vs. Santosh Kumar Tiwari, Surendra Jha vs. The State Of Bihar & Ors., SIFY Digital Services Limited vs. The State of Bihar through Additional Chief Secretary, Baraa Fawzi Haameed AL Bayati vs. The State of Bihar through the Principal Secretary, Home Department, Government of Bihar and Manoj Kumar vs. Krishna Mohan Kumar.

 

In Sri Gudar Sao vs. The State of Bihar (2025), Justice Ashok Kumar Pandey of Patna High Court delivered a 26-page long judgement dated October 14, 2025, wherein, he concluded: ''I am of the view that the learned trial court has arbitrarily decided the compensation and his conclusion was not based on the materials available on the record. The amount which he has determined for compensation was based merely on assumption without any document. 35. As such, considering above facts and circumstances of the case, the judgment and decree of the learned trial court is set aside and in result, these appeals are allowed. 36. Office is directed to prepare the decree/award. 37. Let the records of the learned trial court with a copy of this judgment be sent to the learned trial court.'' Hetu Kishun, son of late Sri Gudar Sao pursued the case which commenced in 1994 in the High Court. 

   

All the three appeals were preferred against the judgment and decree dated October 14, 1993 passed in a Land Acquisition cases of 1990 passed by Sub-Judge 3rd, Patna whereunder the trial court awarded insufficient compensation with respect to the lands and houses which were acquired in these cases. The Land Acquisition Officer, Patna made a reference under Section 18 of the Land Acquisition Act regarding adjudication for the adequacy of the compensation for the lands and houses acquired. There having common question of law and facts of 14 cases including these cases were taken together by the trial court. The facts leading to these cases are that about 01 Acre 15 Dismil of land along with houses standing over the same belonging to these awardees within the village- Mosimpur Kurtha P.S.- Fatwah, District- Patna acquired by the State of Bihar for the purpose of construction of approach road to Punpun bridge by a Gazette notification under Section 4 of the Land Acquisition Act on August 16, 1980. Date of declaration under Section 6 of the Act for the same was on July 1, 1982 and the award of the lands and houses were made by the Collector on September 23, 1989 and the possession of the lands and the houses were taken on May 18, 1987 by the Collector. The compensation money for the bhith lands and homestead land acquired was paid to the awardees at the rate of Rs.96,000/- per acre i.e. Rs.3,000/- only per kattha. The Collector also paid the price of the houses to the awardees varying from Rs.3,690/- to Rs.2,31,750/-. The Collector also paid 30% solatium and interest on the amount of compensation to the awardees. The awardees received compensation money so awarded under protest to the effect that the compensation money awarded by the State of Bihar either for the lands or for the houses standing over the same was inadequate. Therefore, the Collector referred these cases to the court for adjudication of the adequacy of the quantum of the compensation.

 

According to the State of Bihar, compensation was already paid for the lands and houses standing thereon was proper and adequate. On the other hand, the awardees approached the court with their respective cases that the lands of the awardees lies within the notified area of Fatwah at the corner of the main road of Patna-Ranchi national Highway. It was also the case of the awardees that Land Acquisition Officer relied upon the sale deed which do not represent true and real market value of the lands under acquisition and left out the true and genuine sale deed of the locality representing higher price. They claimed the price of the acquired lands at the rate of Rs.50,000/- per kattha. They also made out their case that the Executive Engineer of the State failed to take into account the correct aspect of engineering in respect of making assessment of the value of the buildings of the awardees. He should have taken into account while determining the compensation of the buildings as to what would be real cost in erecting a building similar to existing building of the awardees at the time of notification. According to their cases, inadequate price of their buildings has been fixed by the Land Acquisition Officer on the basis of unscientific report of Executive Engineer. However, the awardees claimed the price of their respective houses varying from Rs.50,000/- to Rs.12,95,475/-. They also claimed compensation for damages done for their business premises. 

The counsel for the appellants/defendants submitted that the Special Land Acquisition Judge-III committed error of law as also on the facts in deciding the claim of the appellants. The trial court did not appreciate correctly the pleadings of the parties, made wrong and illegal approach to the cases. It was submitted that the total houses of these awardees constructed over 0.045 acres have been acquired by the State of Bihar and paid Rs.2,10,257 and 25 paisa only which was received by the appellants/defendants under protest and they have claimed the rate of land at Rs.50,000/-per kattha and Rs.8,11,414 for the houses. Rs.28,000/- annual for the loss of business and Rs.90,000/- for loss of furniture and goods. It was also submitted that the awardees examined altogether 16 witnesses and they adduced documentary evidence, State of Bihar did not give any written submission nor did it examine any witness except OW-1, Mathura Pandey who only proved rate report over khatiyaan, sale statement, possession certificate. The trial court has not appreciated the evidence adduced by the appellants/defendants. It was submitted that the trial court has held in its judgment that “the aforesaid document in support of the price of the land determined by the State of Bihar have no evidentiary value and as such the aforesaid documents cannot be relied upon and in these circumstances the price of lands determined by the State of Bihar on the basis of sale figure mentioned in column 8 of the sale statement cannot be relied and adopted.”

 

The counsel for the appellants relied on decisions in i) (2010) 13 SCC 710, ii) (2012) 5 SCC 432 and iii) (2025) SCC Online SC 1519.

 

The Respondents/plaintiffs relied on certain citations, such as AIR 1977 SC 580, AIR 1977 SC 560, AIR 2010 SC 170, AIR 2004 SC 4532 :: 2004 AIR SCW 4255 and AIR 2004 SC 288 :: 2003 AIR SCW 6117.
 

The trial court grappled with the following two issues: 

First issue :- The first issue was whether the compensation money awarded by the State of Bihar in respect of land was proper and adequate or it requires to be changes.

Second issue :- Second was whether the amount of compensation paid by the Collector in respect of the house of the awardees was proper and adequate and according to size, age and construction of the building under the acquisition. 

 

The trial court disbelieved the basis on which the compensation has been determined by the Collector. As the price of the land acquired has been determined solely on the basis of only one sale deed mentioned in column-8 of the sale statement as against average rate of all the sale deeds.

The counsel for the appellants/defendants argued that from perusal of the impugned judgment it emerges that the trial court relied on the decision of Supreme Court reported in AIR (1979) 472 in which it was held that ‘mere sale statement is not admissible in law’. Admittedly, the author of sale rate namely, Land Acquisition Officer was not examined in this case. The trial court did not rely upon the documents which were adduced by the respondents and categorically held that sale figures mentioned in Column-8 of the sale statement cannot be relied rather the trial court has relied on the sale deeds. The lands under the aforesaid sale deeds was situated in the vicinity of the acquired lands which fact was evident from survey map. The trial court also held that ‘it does not stand to my reason as to why this sale deed has not been taken into consideration by the Land Acquisition Officer. It was simply rejected on the ground that it was executed on competitive basis although there is no such evidence on the record, so the aforesaid sale deed has to be considered in this case.”

 

The counsel for the appellants/defendants submitted that recently in Manohar and others vs. State of Maharashtra and Others, the Supreme Court held in Paragraphs 31, 38, 39 and 40, which reads:-
31. In the case of Anjani Molu Dessai (supra) this Court, while referring to two previous
decisions of this Court, held thus: 
"20. The legal position is that even where there are several exemplars with reference to similar lands, usually the highest of the exemplars, which is a bona fide transaction, will be considered. Where however there are several sales of similar lands whose prices range in a narrow bandwidth, the average thereof can be taken, as representing the market price. But where the values disclosed in respect of two sales are markedly different, it can only lead to an inference that they are with reference to dissimilar lands or that the lower value sale is on account of undervaluation or other price depressing reasons. Consequently, averaging  annot be resorted to. We may refer to two decisions of this Court in this behalf.

 

In M. Vijayalakshmamma Rao Bahadur v. Collector, [(1 969) 1 Mad LJ 45 (SC)], a three-Judge Bench of this Court observed that the proper method for evaluation of market value is by taking the highest of the
exemplars and not by averaging of different types of sale transactions. 

 

The High Court relied on decision in State of Punjab vs. Hans Raj, [(1994) 5 SCC 734], wherein it was held: "4. Having given our anxious consideration to the respective contentions, we are of the considered view that the learned Single Judge of the High Court committed a grave error in working out average price paid under the sale transactions to determine the market value of the acquired land on that basis. As the method of averaging the prices fetched by sales of different lands of different kinds at different times, for fixing the market value of the acquired land, if followed, could bring about a figure of price which may not at all be regarded as the price to be fetched by sale of acquired land. One should not have, ordinarily recourse to such method. It is well settled that genuine and bona fide sale transactions in respect of the land under acquisition or in its absence the bona fide sale transactions proximate to the point of acquisition of the lands situated in the neighbourhood of the acquired lands possessing similar value or utility taken place between a willing vendee and the willing vendor which could be expected to reflect the true value, as agreed between reasonable prudent persons acting in the normal market conditions are the real basis to determine the market value.”

Now that the High Court has decided that trial court had arbitrarily decided the compensation without any document based on assumption, the judgment and decree of the trial court has been set aside and the office has been directed to prepare the decree/award, the same will have to be prepared with reference to the provisions under Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. which is operational from January 1, 2014. 

 

Given the fact that the judgment and decree dated October 14, 1993 by the trial court in a 1990 case wherein the trial court had awarded insufficient compensation with respect to the lands and houses which were acquired, has been set aside by the High Court, it cannot be said that land acquisition proceedings were already been concluded. As a consequence, the appellants become entitled to benefits of Section 24(2) of the 2013 Act  

  

Section 24 reads:''Land acquisition process under Act No. 1 of 1984 shall be deemed to have lapsed in certain cases. (1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894,--
(a) where no award under section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or
(b) where an award under said section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.
(2) Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894), where an award under the said section 11 has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act:
Provided that where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act.'' 

  

The CAG's audit report of the Revenue and Land Reforms Department, Bihar states that "The LA Act, 1894 and the Act, 2013, provides that in case the compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount with interest at the prescribed rates from the time of taking possession till it has been so paid or deposited. The Departmental circular of February 2009 provides that the land acquisition process can only be started after receipt of full cost of compensation from requiring body." 

 

Notably, the benefits of the compensation, rehabilitation and resettlement provided in the Act have been extended in cases of land acquisition made under the 13 Acts specified in the Fourth Schedule, namely,. 

1. The Ancient Monuments and Archaeological Sites and Remains Act, 1958
2. The Atomic Energy Act, 1962 
3. The Damodar Valley Corporation Act, 1948 
4. The Indian Tramways Act, 1886 
5. The Land Acquisition (Mines) Act, 1885

6. The Metro Railways (Construction of Works) Act, 1978
7. The National Highways Act, 1956
8. The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962
9. The Requisitioning and Acquisition of Immovable Property Act, 1952
10. The Resettlement of Displaced Persons (Land Acquisition) Act, 1948
11. The Coal Bearing Areas Acquisition and Development Act, 1957
12. The Electricity Act, 2003
13. The Railways Act, 1989