Delhi High Court
Uoi vs Phire Ram & Anr on 28 July, 2025
Author: Manoj Kumar Ohri
Bench: Manoj Kumar Ohri
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on : 18.07.2025
Pronounced on : 28.07.2024
+ LA.APP. 331/2007
UOI .....Appellant
Through: Mr. Sanjay Kumar Pathak, Standing
Counsel for UOI with Mrs. K.K.
Kiran Pathak, Mr. Sunil Kumar Jha,
Mr. Mohd. Sueb Akhtar, Mr. Divakar
Kapil, Advocates.
versus
PHIRE RAM AND ANR .....Respondents
Through:
Mr. Rajesh Yadav, Senior Advocate
Mr. Rahul Chaudhary, Adv. for R-1.
Ms. Avni Singh, Panel Counsel for
GNCTD.
+ LA.APP. 333/2007
UOI .....Appellant
Through: Mr. Sanjay Kumar Pathak, Standing
Counsel for UOI with Mrs. K.K.
Kiran Pathak, Mr. Sunil Kumar Jha,
Mr. Mohd. Sueb Akhtar, Mr. Divakar
Kapil, Advocates.
versus
JAI CHAND AND ORS .....Respondents
Through:
Mr. Rajesh Yadav, Senior Advocate
Mr. Rahul Chaudhary, Adv. for R-1.
Ms. Avni Singh, Panel Counsel for
GNCTD.
CORAM:
HON'BLE MR. JUSTICE MANOJ KUMAR OHRI
JUDGMENT
Signature Not Verified
Signed By:GAUTAM
ASWAL
Signing Date:28.07.2025
18:21:53
LA.APP. 331/2007 & LA.APP. 333/2007 Page 1 of 12
LA.APP. 331/2007, CM APPL. 13369/2011
LA.APP. 333/2007, CM APPL. 13370/2011
1. The present appeals have been preferred under section 54 of the Land
Acquisition Act, 1984 (hereinafter referred to as ‘LA Act‘), which pertain to
proceedings undertaken in the village of Tughlakabad, New Delhi,
commenced vide notification No.F7(34)/90-L&B/LA dated 02.04.1996
under Section 4 of the LA Act (hereby referred to as ‘acquisition
notification’) for the creation of wildlife sanctuary under ‘Planned
Development of Delhi’, followed by a declaration dated 06.05.1996 under
Section 6 of the LA Act.
2. On 05.12.1997, the Land Acquisition Collector, vide award No.
01/1997-98, awarded compensation for the acquired land @ Rs.1,23,000/-
per bigha to Phire Ram and Sh. Jai Chand (deceased), respondents No.1 in
LA.APP. 331/2007 and LA.APP. 333/2007 respectively. Aggrieved by the
said compensation amount, the aforesaid respondents filed Reference
petitions under section 18 of the LA Act. Vide impugned judgements dated
10.07.2006 in LAC No. 29/1/06 in the case of Phire Ram and LAC No.
27/1/06 in the case of Jai Chand, the Reference Court enhanced the
compensation payable to the said respondents to Rs.4,180/- per sq. yard,
along with other statutory benefits and, while doing so, the reference Court
relied upon the decision of the Division Bench of this Court dated
30.03.2001 passed in RFA No. 461/1995 titled as Hari Chand v. Union of
India.
Signature Not Verified
Signed By:GAUTAM
ASWAL
Signing Date:28.07.2025
18:21:53
LA.APP. 331/2007 & LA.APP. 333/2007 Page 2 of 12
3 The primary ground on which the present appeals were filed was that
the decision in Hari Chand (supra) was based on an earlier decision of
another Division Bench of this Court in based on the decision dated
21.08.1998, in Bhola Nath Sharma Vs. Union of India, passed by the
Division Bench of this Court in RFA No. 65/81. Concededly, the present
appeals came to be filed singularly on the ground that since the challenge to
Bhola Nath (Supra) was pending before the Supreme Court, the Reference
Court ought not to have relied on Hari Chand (supra).
4. However, much water has flown under the bridge since then. The
Supreme Court, in the challenge to decision of Division Bench in Bhola
Nath (Supra), had remitted the matter back to the Reference Court as in the
enhancement proceedings before the Reference Court, the beneficiary i.e.,
DDA was not impleaded. On remand back, while the Reference Court
enhanced the compensation, the Co-ordinate bench of this Court vide
decision dated 23.03.2016 in LA APP. 109/2013 arrived at a market value of
the acquired land at Rs. 2,000/- per square yard, which is the same as that
decided by the Division Bench in Bhola Nath Sharma (Supra). The decision
dated 23.03.2016 was also challenged before the Supreme Court in SLP No.
(C) No.19123/2016 which was dismissed vide order dated 06.04.2017 and
thereafter the review petition bearing Review Petition (C) No. 1588/2017
was also dismissed on 09.08.2017. Resultantly, the compensation
ascertained by this Court in Bhola Nath (Supra) has attained finality.
5. Notably, vide order dated 21.03.2024, with the consent of the parties,
the issue in the captioned appeals stands confined to the aspect of
enhancement to be granted annually to the respondents herein. The
Reference Court has granted enhancement @ 10% p.a. cross objections have
Signature Not Verified
Signed By:GAUTAM
ASWAL
Signing Date:28.07.2025
18:21:53
LA.APP. 331/2007 & LA.APP. 333/2007 Page 3 of 12
been filed by respondent No.1 in LA.APP. 331/2007 and the Legal
representatives of respondent No.1 in LA.APP. 333/2007.
6. Mr. Yadav, learned Senior Counsel for the answering respondents,
submits that the respondents in the cross objections are claiming
enhancement in compensation @ Rs.550/- per square yard, over and above
the compensation that has been granted by the learned Reference Court. It is
submitted that respondents are entitled to an annual increase/escalation @
15% per annum, at the compounding rate, from 01.06.1992 to 02.04.1996,
i.e. for 03 years and 10 months, in view of the decisions in Madhusudan
Kabra & Ors. Vs. State of Maharashtra and Ors. 1 Anjani Molu Dessai v.
State of Goa and Anr, 2, order of review dated 30.07.2021 passed in R.P
No.109/2021 in LA Appeal No.749/2008 „Tripat Kaur Vs. Union of India.
and DMRC Ltd v. Union of India & Ors3, which affirmed the decision of
Co-ordinate Bench of this Court dated 04.05.2021, passed in LA Appeal
No.612/2008 titled Adil Singh Vs. Union of India & Ors. and it is submitted
that the respondents are willing to pay any additional court fees in case the
compensation amount is enhanced.
It is next contended that as per the law settled in Ashok Kumar &
Ors. Vs. State of Haryana & Ors.4, and General Manager, Oil and Natural
Gas Corporation Limited. v. Rameshbhai Jivanbhai Patel5, the enhancement
in the market value has to be calculated cumulatively and not by applying a
flat rate.
1
(2018) 1 SCC 140
2
(2010) 13 SCC 710
3
SLP (C) Nos. 13193-13203/2021 decided on 26.11.2023
4
(2015) 15 SCC 200
5
(2008) 14 SCC 745
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ASWAL
Signing Date:28.07.2025
18:21:53
LA.APP. 331/2007 & LA.APP. 333/2007 Page 4 of 12
Lastly, it is contended that the subject land is acquired for ‘Wild Life
Sanctuary’, where no further development is required to be undertaken, and
thus, no development charges are liable to be deducted. Reliance is placed
on the judgment in „Bhikulal Kedarmal Goenka (Dead) Through LRs Vs.
State of Maharashtra & Anr.’6
7. Per contra, Mr. Pathak, learned counsel for the appellant, submits that
the Reference Court erred in awarding escalation @10% as the land
pertained to a rural area and the increase in its market value would be slower
as compared to an urban or semi-urban area. He prays that the rate of
escalation which was awarded be reduced. Reliance in this regard is placed
on the decisions in Central Warehousing Corp. Vs. Thakur Dwara Kalan ul-
Maruf Baraglan Wala (Dead) & Ors., 7& State of Haryana and Another vs.
Subhash Chander and Others. 8
He further submits that the date of acquisition notification in Hari
Chand (supra) based on which the Reference Court enhanced the
compensation was 01.06.1992 and it also pertained to village Tughlakabad.
He contends that since the same is considered to be an exemplar in the
present case, the calculation of the escalation of compensation amount
should commence from 1993, i.e., after excluding the base year of the
relied-upon transaction, being 1992. Reliance in this regard is placed upon
decision in Rameshbhai Jivanbhai Patel (supra).
Lastly, it is submitted that cumulative increase in market value is not
an absolute rule and cannot be granted in a mechanical manner. Reliance is
6
(2016) 14 SCC 279
7
(2023) SCC OnLine SC 1361
8
(2013) 5 SCC 527.
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Signed By:GAUTAM
ASWAL
Signing Date:28.07.2025
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LA.APP. 331/2007 & LA.APP. 333/2007 Page 5 of 12
placed on the decision of the Supreme Court in Manik Panjabrao Kalmegh
v. Executive Engineer Bembla Project Division Yavatmal.9
8. In Rejoinder, learned Senior Counsel for the answering respondents
submits that the village Tughlakabad was urbanised on 03.06.1996, and in
this regard refers to the Gazette Notification No. F. 2(49)/65- LSG.
9. I have heard the counsels for the parties and have perused the
documents which have been placed on record.
10. The question of escalation becomes circumspect in cases where
market value of land situated in a particular area needs to be calculated and
there are no contemporaneous sale transactions available in respect of
similarly situated land for the period when the acquisition begins. In such a
scenario, previously proven market value can be taken as a base to which
appropriate escalation has to be applied. The rate of increase is also not
uniform, as the same depends on the location, demand, existing development
and availability of land for future development in an area. Usually, the
increase in rural areas is slower compared to urban and semi-urban areas.
9. The Supreme Court in Rameshbhai Jivanbhai Patel (supra) has held
that this method of applying escalation to older sale transactions is only safe
for shorter time spans, like 4-5 years as there are chances of the rate of
escalation itself changing drastically. The relevant extract is reproduced
hereunder for convenience:-
“15. Normally, recourse is taken to the mode of determining the market
value by providing appropriate escalation over the proved market value of
nearby lands in previous years (as evidenced by sale transactions or
acquisitions), where there is no evidence of any contemporaneous sale
transactions or acquisitions of comparable lands in the neighbourhood.
The said method is reasonably safe where the relied-on sale9
2024 SCC OnLine SC 3185Signature Not Verified
Signed By:GAUTAM
ASWAL
Signing Date:28.07.2025
18:21:53
LA.APP. 331/2007 & LA.APP. 333/2007 Page 6 of 12
transactions/acquisitions precede the subject acquisition by only a few
years, that is, up to four to five years. Beyond that it may be unsafe, even if
it relates to a neighbouring land. What may be a reliable standard if the
gap is of only a few years, may become unsafe and unreliable standard
where the gap is larger. For example, for determining the market value of
a land acquired in 1992, adopting the annual increase method with
reference to a sale or acquisition in 1970 or 1980 may have many pitfalls.
This is because, over the course of years, the “rate” of annual increase
may itself undergo drastic change apart from the likelihood of occurrence
of varying periods of stagnation in prices or sudden spurts in prices
affecting the very standard of increase.”
10. As to the question whether flat rate of escalation should be given or a
cumulative rate, the Supreme Court in Rameshbhai Jivanbhai Patel (supra)
holds that since the year on year increase to be calculated is always in
reference to the market value of the previous year, the appropriate method is
to calculate the increase cumulatively and that a flat rate can lead to
anomalies. It held as follows:-
Whether the increase should be at a cumulative rate or a flat rate?
18. The increase in market value is calculated with reference to the market
value during the immediate preceding year. When market value is sought
to be ascertained with reference to a transaction which took place some
years before the acquisition, the method adopted is to calculate the year
to year increase. As the percentage of increase is always with reference
to the previous year’s market value, the appropriate method is to
calculate the increase cumulatively and not applying a flat rate. The
difference between the two methods is shown by the following illustration
(with reference to a 10% increase over a basic price of Rs 10 per square
metre):
…
19. We may also point out that application of a flat rate will lead to
anomalous results. This may be demonstrated with further reference to the
above illustration. In regard to the sale transaction in 1987, where the
price was Rs 10 per square metre, if the annual increase to be applied is a
flat rate of 10%, the increase will be Rs 1 per annum during each of the
five years 1988, 1989, 1990, 1991 and 1992. If the price increase is to be
determined with reference to sale transaction of the year 1989 when the
price was Rs 12 per square metre, the flat rate increase will be Rs 1.20 per
annum, for the years 1990, 1991 and 1992. If the price increase is
determined with reference to a sale transaction of the year 1990 when theSignature Not Verified
Signed By:GAUTAM
ASWAL
Signing Date:28.07.2025
18:21:53
LA.APP. 331/2007 & LA.APP. 333/2007 Page 7 of 12
price was Rs 13 per square metre, then the flat rate increase will be Rs
1.30 per annum for the years 1991 and 1992. It will thus be seen that
even if the percentage of increase is constant, the application of a flat
rate leads to different amounts being added depending upon the market
value in the base year. On the other hand, the cumulative rate method
will lead to consistency and more realistic results. Whether the base
price is Rs 10 or Rs 12.10 or Rs 13.31, the increase will lead to the same
result. The logical, practical and appropriate method is therefore to
apply the increase cumulatively and not at a flat rate.
11. In the above noted case, the land was located in Ijapura village,
Gujarat. The gap between the date of transaction and acquisition notification
was of five years and eight months, and the cumulative rate of escalation
which was determined was 7.5% p.a. for five years after excluding the base
year. Though both sides have relied on a plethora of decisions, this Court
does not deem it necessary to go through each one of them. An endeavour
would be made to go through some of the recent decisions cited by both
sides.
12. The decision in Rameshbhai Jivanbhai Patel (supra) was cited with
approval by a 3 Judge Bench of the Supreme Court in Ashok Kumar & Ors.
Vs. State of Haryana & Ors.(supra), wherein it was held that :-
“22. In light of the aforesaid view of this Court, the Reference Court has
correctly ascertained the premium to be paid at the rate of 12% per
annum with cumulative effect from the date of earlier acquisition, dated
02.07.1985 to the acquisition herein, dated 29.01.1990 and therefore,
determined the fair market value of acquired lands as Rs. 394/- per square
yards.
23. In our view, the High Court has incorrectly relied upon the sale
transactions which date much prior in time than the date of notification
and thus, do not reflect the true market value. In the event of an award
more proximate to the date of acquisition was available, it would have
been proper for the High Court to consider the same as best evidence than
the post-dated sale transactions. Thus, in our considered opinion, the
judgment and order passed by the High Court does not fairly andSignature Not Verified
Signed By:GAUTAM
ASWAL
Signing Date:28.07.2025
18:21:53
LA.APP. 331/2007 & LA.APP. 333/2007 Page 8 of 12
adequately assess the compensation payable to the claimants and requires
to be set aside and consequently, the judgment and order passed by the
Reference Court requires to be restored.”
The case pertained to Villages Fatehpur, Maheshpur, Kundli and
Railley, Haryana. Herein, the gap between the date of transaction and
acquisition notification was of approximately four and a half years, and the
cumulative rate of escalation which was determined was 12% p.a.
13. In the case of State of Haryana and Another vs. Subhash Chander
(supra) and Others, relating to acquisition of land situated at village Kherki,
Majra, the Supreme Court awarded annual increase cumulatively at the rate
of 10% for a period of two years. The relevant extract is reproduced
hereunder:-
10. However, at the same time considering the fact that in the present case
with respect to the very village, the acquisition proceedings came to be
initiated in the month of January 2008, it will not be safe and/or prudent
to grant the cumulative increase of 12%. In the facts and circumstances of
the case and even considering the sale instances produced on record, we
are of the opinion that if instead of 12% enhancement on Rs 2,38,00,000,
10% increase is accepted it can be said to be a just compensation and it
may meet the ends of justice.
14. The Supreme Court Central Warehousing Corp.(supra), dealing with
a time period gap of 11 years between the acquisition notification for
Naraingarh, district Ambala and the sale deeds, awarded only 8% annual
escalation. It held that:
“the fair and reasonable compensation in the present case would be best
determined if we apply 8% annual increase with cumulative effect. This is
for the reason that the gap is huge i.e. 11 years. For shorter period of 3-5
years, it could have been 10% or 12%. But in no case 15% would be
justified for a period of 11 years as awarded by the High Court in theSignature Not Verified
Signed By:GAUTAM
ASWAL
Signing Date:28.07.2025
18:21:53
LA.APP. 331/2007 & LA.APP. 333/2007 Page 9 of 12
impugned order. In the present case, given the 11 years gap, 8% would be
considered just and proper.”
15. In Adil Singh (Supra), a Co-ordinate bench of this Court had awarded
an escalation @15% p.a. for 3 years for the acquisition of the property
bearing No.8 at Jantar Mantar Road, New Delhi for traffic integration and
the intake shaft for the underground Metro Rail at Patel Chowk. This
decision was upheld by the Supreme Court in DMRC (Supra), holding that:-
“9.The issue of annual escalation was next examined together with the
deduction of 25% of the market price towards development charges
ordered by the Reference Court. The learned Judge then went on to
observe that the rate of escalation at 15% per annum should be awarded
to the affected land owners. In reaching such conclusion, the Court took
into account that the property owners had not led any evidence on price
escalation of immovable property in the proximate area where the
acquired property was located. On this aspect, the learned counsel for the
land owners had contended i.e. that transaction of the property in the area
of Jantar Mantar is very rare and one cannot possibly have sale exemplars
of property sold in the said area.
xxx
12. As can be noticed the Reference Court while rejecting comparability of
properties, weighed in not only the price & size difference, but also the
customer base for properties located at Amrita Shergil Marg & Golf
Links. The Court noted that the per sq.mtr. price of a house situated at
Golf Links could not be an indice for determination of the per sq.mtr. price
of a bungalow on Jantar Mantar Road. Thus, the High Court rightly
concurred with the findings of Reference Court while rejecting the
semblance between the properties located at Amrita Shergil Marg (& Golf
Links) & the subject properties for being incomparable to those at Jantar
Mantar. Bringing on record the correct exemplar, the High Court
considered the sale of property No.11, Barakhamba Road, New Delhi, its
price & residential nature amongst other things. The Court drew a rather
fair comparison between the property no.11, Barakhamba Road & held it
to be identically positioned to the subject property at Jantar Mantar.
xxx
15. While putting to rest the issue of compensation, the High Court rightly
set aside the 25% deduction from the market value, towards development
cost, ordered by the Reference Court. It was noted that deduction towards
development cost is required to be made when development of the property
would lead to certain portions of the property being sacrificed in such
Signature Not Verified
Signed By:GAUTAM
ASWAL
Signing Date:28.07.2025
18:21:53
LA.APP. 331/2007 & LA.APP. 333/2007 Page 10 of 12
development, towards providing common areas / amenities & which
portions are not capable of fetching any value. Since the subject property
was located in an area with sufficient civic amenities that do not require
any further development, it correctly held that the question of any part of
acquired land being wasted and/or any monies being required to be paid
for development, would not arise.
16. Following a thorough analysis of the precedents on the question of
escalation, the High Court correctly noted that no specific property’s price
escalation was required to prove that there had been a general increase in
value or rental over the years. Therefore, the High Court rightly allowed
for escalation at the rate of 15% per annum in prices, for a period of three
years without deducting any development charges.”
Thus, it is seen that the land in the abovementioned case was located
at Jantar Mantar Road, right in the heart of the capital with sufficient civic
amenities and does not require any further development. On the other hand,
the land in the present case is located in a relatively undeveloped area, as the
very reason for acquisition is stated to be for the purpose of creating a
wildlife sanctuary. Thus, the escalation being awarded @15% for 3 years in
DMRC (Supra) can be distinguished from the present case on a factual basis.
16. Coming to the present case, the date of acquisition notification in
Hari Chand (supra) based on which the Reference Court enhanced the
compensation was 01.06.1992 whereas the acquisition notification for the
land in question was issued on 02.04.1996. Thus, there is a gap of around 3
years and 10 months. Keeping in view the decision of Supreme Court in
Ashok Kumar (Supra), which has a comparable time gap, the Court deems it
fit to increase the enhancement rate from 10% which has been awarded by
the Reference Court, to 12%, which is to be calculated cumulatively, along
with all consequential benefits. The cross objections are allowed to the
aforesaid extent.
Signature Not Verified
Signed By:GAUTAM
ASWAL
Signing Date:28.07.2025
18:21:53
LA.APP. 331/2007 & LA.APP. 333/2007 Page 11 of 12
17. The appeals are dismissed and cross objections are allowed to
aforesaid extent.
18. The respondents shall deposit additional Court fees.
19. A copy of this judgement be sent to the Reference Court for
information.
MANOJ KUMAR OHRI
(JUDGE)
JULY 28, 2025
ry
Signature Not Verified
Signed By:GAUTAM
ASWAL
Signing Date:28.07.2025
18:21:53
LA.APP. 331/2007 & LA.APP. 333/2007 Page 12 of 12
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