HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Reserved on 08.04.2015 Delivered on 03.11.2015 Court No. 34 1. Case :- FIRST APPEAL No. - 48 of 2005 Appellant :- M/s Indian Oil Corporation Ltd. Respondent :- Jai Ram And Another Counsel for Appellant :- Prakash Padia Counsel for Respondent :- Anil Sharma Along with 2.Case :- FIRST APPEAL No. - 19 of 2005 Appellant :- M/s Indian Oil Corporation Ltd. Respondent :- Hansa & Others Counsel for Appellant :- Prakash Padia Counsel for Respondent :- Anil Sharma 3. Case :- FIRST APPEAL No. - 719 of 2004 Appellant :- M/s Indian Oil Corporation Ltd. Respondent :- Harkesh Singh & Others Counsel for Appellant :- Prakash Padia Counsel for Respondent :- Anil Sharma Hon'ble Sudhir Agarwal,J.
Hon'ble Shashi Kant, J.
(Delivered by Hon'ble Sudhir Agarwal, J.)
1. All these appeals under Section 54 of Land Acquisition Act, 1894 (hereinafter referred to as "Act, 1894") read with Section 96 C.P.C., have arisen from common judgement/award and decree dated 03.11.2003 passed by Sri S.K.Bhatt, Additional District Judge, Court No.3, Bijnor adjudicating nine Land Acquisition Reference (hereinafter referred to as LAR") including LARs No.56 of 1994, 215 of 1995 and 91 of 1994.
2. The number of concerned LARs in the present appeals are detailed in the chart given below :
S.No.
First Appeal No. Parties name Land Acquisition Reference No.
1. 48 of 2005 M/s Indian Oil Corporation Ltd. Vs. Jai Ram & Another.
56 of 1994
2. 19 of 2005 M/s Indian Oil Corporation Ltd. Vs. Hansa & Ors.
215 of 1995
3. 719 of 2004 M/s Indian Oil Corporation Ltd. Vs. Harkesh Singh & Others.
91 of 1994
3. Since common questions of facts and law are involved in all these appeals, they have been heard together and are being decided by this common judgment. For the purpose of convenience and with the consent of parties, facts from the record of First Appeal No. 48 of 2005 (M/s Indian Oil Corporation Ltd. Vs. Jai Ram & Anr.), have been taken.
4. The Court below has determined market value of acquired land for the purpose of compensation at the rate of Rs.120/- per sq. meter besides 30% solatium under section 23(2) of Act, 1894 and interest for various period as per statute.
5. The actual dispute raised before this Court is about rate of market value determined by Court below.
6. M/s Indian Oil Corporation Ltd. (hereinafter referred as "IOCL") is a company owned by Government of India and on its proposal, Government of India issued a Notification dated 26.06.1991 under section 4 (1) of Act, 1894 proposing to acquire certain land at Village Tatarpur Lalu and Rahukedi Gadhu, Tehsil Najibabad, District Bijnor, for the purpose of constructing a Petroleum Product Depot of IOCL. Notification under section 6(1) of Act, 1894 was published on 19th November, 1991 and possession of acquired land was taken on 5th May, 1992. The Special Land Acquisition Officer (hereinafter referred to as 'SLAO') made its award on 19th October, 1993 determining market value at Rs. 150,000/- per bigha (Rs.59.31 per sq. meter).
7. The SLAO determined market value on the basis of sale deed dated 20.02.1990 executed by Sri Ali Ahmad Son of Rahim Bux in favour of Anil Bhanwar, son of Om Prakash transferring by sale Gata No.87 area 3-12-01 for a total consideration of Rs.5,40,376/-.
8. Dissatisfied with the aforesaid determination of market value, claimant/tenure-holders made application requesting for making Reference under Section 18 of Act, 1894 to the District Judge, whereupon LAR No. 56 of 1994, 215 of 1995 and 91 of 1994, with which we are concerned in these Appeals, were made.
9. The claimants said that acquired land is an abadi, near Degree College, Radio Station, Irrigation Department Residential Colony and Adarsh Nagar Colony. On the other side of acquired land, Railway Station Najibabad, its Residential Colony, Bus Stand and Abadi of Najibabad town exists. On the third side of acquired land there is abadi. It has great potential of development. On the one side of acquired land there, exist, factories of Thums Up, Card Board, etc. Therefore the land has potential of Industrial development also.
10. On behalf of claimants, besides documentary evidence, four witnesses namely P.W.1 Rajeev Kumar Sharma, P.W.2 Vijay Singh, P.W.3 Bhupendra Singh and P.W.4 A. Rahman were produced.
11. All the References were consolidated together and LAR No. 56 of 1994 was made "leading case". Documentary evidence adduced by claimants included the following:-
i. Certified copy of sale deed dated 9.8.1989 executed by Harish Chandra in favour of Smt. Vijay Laxmi;
ii. Certified copy of sale deed dated 28.10.1998 executed by Smt. Mithilesh Mudgil in favour of Smt. Vidhu Dwivedi ;
iii. Certified copy of sale deed dated 27.9.1990 executed by Sohan Lal Kukraiti in favour of Sanjeev Kumar ;
iv. Certified copy of sale deed dated 11.12.1990 executed by Suresh Chand in favour of Hargovind ;
v. Certified copy of sale deed dated 13.05.1991 executed by Ameerunisha in favour of Bhupendra Singh ;
vi. Copies of CH Form of Village Dhanaura, Rahukhedi Gadhu, and Tatarpur Lalu ;
vii. Copy of Khasra of village Tatarpur Lalu ;
viii. Copy of Khatauni of village Rahukhedi Gadhu, Pargana & Tehsil - Nazibabad from 1394 to 1399 Fasli.
ix. Copy of CH Form of village Rahukhedi Gadhu relating to 1360 Fasli;
x. Copy of Power of Attorney executed by Jairam Singh in favour of Vijay Singh.
xi. Copy of Khasra of village - Rahukhedi relating to 1389 Fasli, 1397 Fasli and 1398 Fasli.
xii. Copy of Plots table prepared on scale.
xiii. Certified copy of sale deed dated 30.05.1991, executed by Ganesi Singh in favour of Sushila Singh.
xiv. Copy of Khasra of Village - Shekhpur Garhu xv. Copy of CH Form of 1360 Fasli xvi. Copy of map of Village - Tatarpur Lalu of 1360 Fasli
12. Claimants had also relied on following documents vide list, paper no.Ga-112 :
i. Certified copy of award dated 16.10.2003 passed in L.A.R. No.317 of 1993 (Ganeshi Vs. State)
13. Besides, claimants of LAR No. 91 of 1994 relied on following documents :
i. Copy of sale deed dated 03.04.1991, executed by Amirunnisha in favour of Bhupendra;
ii. Certified copy of sale deed dated 27.09.1990, executed by Sohanlal in favour of Sanjeev Kumar;
iii. Certified copy of sale deed dated 18.12.1989, executed by Mithlesh Mudgil in favour of Smt. Vidhu Dwivedi ;
vi. Certified copy of sale deed dated 152.12.1990, executed by Suresh Chandra in favour of Hargovind ;
v. Certified copy of sale deed dated 07.11.1989, executed by Harish Chandra in favour of Smt. Vijay Laxmi ;
vi. Copy of Register of CH Form of Village - Dhanaura and Tatarpur Lalu ;
vii. Copy of six yearly Khatauni of Village - Tatarpur Lalu from 1395 to 1400 Fasli ;
14. There are some further documents filed in other connected LAR. We are not giving any details thereof but, if necessary, will discuss as and when occasion would arise.
15. On behalf of IOCL, the Acquiring Body and State, oral evidence of DW-1 Sanjay Kumar Agarwal and D.W.2 Virendra Kumar Verma were adduced, besides following documentary evidence :-
i. Certified copy of Sale deed dated 17.10.94 executed by A. Hakeem and A. Rahman in favour of Smt. Chand Gupta and Smt. Suresh Gupta.
ii. Certified copy of award dated 02.11.2000, passed by Vth Additional District Judge in LAR No. 133 of 94 (Anil Kumar and Others Vs. State of U.P.) ;
16. The Reference Court observed that SLAO determined market value on the basis of sale deed dated 20.02.1990 relating to Village Rahukhedi Gadhu executed by Ali Ahmad son of Rahim Bux in favour of Anil Kumar Bhanwarwal son of Om Prakash, transferring plot no.87, area 3 bigha 12 biswa 1 biswansi (Quality Soil Sawai Avval) at Village Rahukheri Garhu for a consideration of Rs.5,40,376/- and therefrom the rate of land transferred came to Rs.1,50,000.28 per bigha i.e. Rs.59.31 per sq.meter.The Reference Court, however, held that said document could not have been made exemplar for determining market value since the aforesaid document was barred by Section 168A U.P.Zamindari Abolition And Land Reforms Act for the reason that Khasra No.87 has a total area of 4 bigha 2 biswa 17 biswansi and a part thereof i.e. 3 bigha 12 biswa and 1 biswansi was transferred by sale to Sri Anil Kumar, which was in violation of Section 168A rendering the document void and a void document cannot be made a representative document for the purpose of determining market value.
17. Proceeding further, it has held that out of total acquired land of 26 bigha 13 biswa and 13 biswansi situate in Village Rahu Kheri and 25 bigha 12 biswa and 14 biswansi was in village Tatarpur Lalu. Both the villages were adjacent to each other. It also observed that market rate on the basis of sale deed dated 20.02.1990 executed by Ali Ahmad comes to Rs.49.55 per sq.meter i.e. Rs.1,50,000.28 per bigha. Here we find that calculation of Rs.49.55 per sq.meter is erroneous, inasmuch as, the said rate would come per square yard and if it is taken to be in square meter, it comes to Rs.59.31. Therefore, there is an obvious calculation mistake in respect of rate based on the sale deed dated 20.02.1990. However, that would not make much difference for ultimate conclusion as we discuss further.
18. The Reference Court in respect to exemplars placed before SLAO, by the claimants, i.e. one which related to the land of Village Tatarpur Lalu, the same were all rejected on the ground that they relates to Abadi. The Reference Court took the view that rejection of exemplars relate to Village Tatarpur Lalu merely on the ground that the same pertains to land sought to be transferred for Abadi was not justified for the reason that the acquired land was appurtenant to the land transferred by such exemplars and it shows that the acquired land has great potential for Abadi.
19. It further held that plot no.87 in Village Rahu Kheri Garhu was appurtenant to plot no.85 and 0.039 area of plot no.85 was Talab, 0.039 was a Gaddha and therefore, the land, which was adjacent to Talab and Gaddha, cannot be made basis for determining market value of acquired land, which has a great Abadi potential and has no such Talab Gaddha etc. in the adjacent area.
20. Now coming to topography of the acquired land, Reference Court found that in Village Tatarpur Lalu, Khet No.66, 69/1, 69/2, 72, 93, 97/1, 97/2, 98, 99, 100, 53 and 57 were recorded as Abadi in revenue records. Similarly, in Village Rahu Khedi Garhu, in Khasra of 1398 fasli, Khet no.82, 90, 91 and 88 were recorded as Abadi, which shows that on the date of acquisition notification under Section 4(1), the acquired land has Abadi around it. The relevant findings are :
^^mijksDr ls ;g Kkr gksrk gS fd vftZr dh x;h Hkwfe ds lEcU/k esa /kkjk&4 dh foKfIr ds izdk'ku dh fnukad dks vftZr dh xbZ Hkwfe ds vklikl vkcknh FkhA i=koyh ij xzke 'ks[kiqj x "From the above, it transpires that on the date of publication of notification under Section 4 in connection with the land acquired, the area around it was populated. Available on record are the site-maps of Villages Sheikhpur Garhi, Dhanaura, Rahukheri Gadu and Tatarpur Lalu, a perusal whereof shows that Villages Tatarpur Lalu and Rahukheri Gadu, wherein located is the acquired land of this case, are adjacent to Village Sheikhpur Garhi. It is admitted to both the parties that Villages Tatarpur, Rampur Banwari, Dhanaura, Chhapar and Rahukheri Gadu are adjacent to each other; and Najibabad locality is based in these very villages. There is no separate sitemap of Najibabad locality. Hence, from the aforesaid facts, it is well established that the acquired land adjoins the limits of Najibabad city." (English Translation by the Court)
21. The Reference Court further observed :
^^izi= la[;k&x&113 ds voyksdu ls Kkr gksrk gS fd xzke 'ks[kiqj x "From the perusal of Form No. Ga-113, it transpires that located in Village Sheikhpur Gadu, which is adjacent to the land of Village Tatarpur Lalu, are steel factory, cardboard factory, Thumbsup factory, Nehar Colony Nursing Home and Degree College having 15-16 years old populace and Aakashwani office is also there for more than 20 years. Apart from this, there is a road to the east of Khasra No. 90 of Village Tatarpur and this road is known as Haridwar-Najibabad Bypass. This road is 15-20 years old. In his examination-in-chief, PW-2 Vijay Singh has stated before the court that the acquired land is located on a road which emerges from Jalalabad and joins Kotwali Najibabad road. This road is very old. The acquired land located in Khasra No. 90-91 of Village Rahukheri was populated on the day of publication of the notification under Section 4. The acquired land could have been sold for habitation at that time. The area to the east of the acquired land is populated. There is railway line to the west of the acquired land. To the west of railway line, there are railway quarters; thereafter, comes the Bijnor-Najibabad road and towards the opposite side of the road, there is old population of Najibabad locality. The residential quarters to the west of the railway line are 60-70 years old and the population on the opposite side of the road is 20-30 years old. The population of Najibabad locality is also located 250-300 yards far from the acquired land. Near the acquired land, there is population of Adarsh Nagar 100-150 yards far from it. The population of Jalalabad locality is also habitated 250-300 yards away from the acquired land. The acquired land could have been sold in the year 90-91 for habitation. The population of Najibabad locality is in Village Rampur Banwari which is to the north of Village Rahu Kheri Gadu. Sahu Jain Degree College is situated at a distance of 600-700 yards from the acquired land. Plywood factory is in the north 700 yards away from the acquired land. Cutch factory is also situated at the same distance. In this way, the acquired land had the potential to be populated. Though this witness has been cross-examined at length yet nothing has come out during cross-examination of this witness which may render the testimony unreliable."
(English Translation by the Court)
22. The Court below then considered the sale deed relied on by the claimants-tenure holders in support of their claim and rejected sale deeds dated 08.9.1989 and 23.10.1989 being much prior to the date of notification issued under Section 4 of Act, 1894 i.e. 26.06.1991 The sale deed dated 27.9.1990 was rejected since it pertains to a very small area of land i.e. 12.5 sq.meter, transferred for commercial purposes. Similarly, sale deed dated 11.12.1990 pertains to a small piece of land i.e. 5.01 sq.meter, hence the same was rejected. The sale deed dated 03.4.1991 though pertains to 182 sq.meters of land but it had a lot of constructions over it and the land and construction both were sold for a consideration of Rs.80,000/-, hence was not taken as a valid exemplar. Thereafter it referred to sale deed dated 30.04.1991 whereby 211.50 sq.meters of land was transferred for consideration of Rs.53,000/- but it was also rejected since there does not exist Abadi on the acquired land rather it contains potential for Abadi.
23. The exemplars relied by State of U.P. i.e. sale deed dated 17.10.1994 was also rejected being more than three years subsequent to the date of acquisition notification under Section 4(1) of Act, 1894.
24. The Court below then relied on the award dated 16.10.2003 in LAR No.317/93, which pertains to acquisition notification dated 06.07.1991 issued under Section 4(1) of Act, 1894 acquiring certain land in Village Tatarpur Lalu. It observed that most of the land acquired in question also belong to Village Tatarpur Lalu. In the award dated 16.10.2003 in LAR No.317/93, Reference Court had determined market value at Rs.150/- per sq. meter.
25. We find that in the award dated 16.10.2003 in LAR No.317/93, the Court relied on exemplar (Paper No.87), a sale deed dated 14.01.1991 executed by Ganeshi Singh, transferring 85 square meters of land in Village Tatarpur for a consideration of Rs.15,000/-. The rate per sq. meter came to Rs. 176.47. There was another exemplar i.e. sale deed dated 10.6.1991 which was also executed by Ganeshi Singh, transferring 223 sq meter of land of village Tatarpur to one Ghasita for consideration of Rs. 39,000/-, which brings rate to Rs. 174.85 per sq. meter. Relying on the aforesaid two exemplars and applying deduction of 15%, the Court below had determined market value of acquired land at Rs. 150/- per sq. meter and made its award accordingly. The acquisition in question has just ten days difference vis a vis the acquisition, which was considered in LAR No.317/93. The Court, therefore, followed the said award but applied a further deduction of 20% and thereby determined market value at the rate of Rs.120 per sq. meter.
26. The learned counsel for the appellant contended that market value determined by Reference Court is highly excessive. It has relied on exemplars of small pieces of land, whereas area of acquired land was more than 52 Bigha and, therefore, 50% to 70% deduction ought to have been applied.
27. Sri Anil Sharma, learned counsel appearing for the claimants-respondents, on the contrary, submitted that there was no question of applying any deduction in the case in hand, yet the Court below has applied deduction.
28. The only point of determination for deciding the appeal is whether determination of market value at the rate of Rs. 120/- per sq. meter is justified or not.
29. Before considering the aforesaid question, it would be appropriate to consider legal principles laid down in last several decades on the question, how market value of land acquired forcibly under the provisions of Act 1894, should be determined. These principles have been settled in a catena of decisions of various Courts.
30. So far as observation made by Reference Court on the material placed before SLAO and award of SLAO is concerned, we find that the same could not have been considered by Reference Court while deciding reference under Section 18 of Act, 1894 for the reason that proceedings in reference are treated to be fresh proceedings and not an appeal from award of SLAO. An award passed by SLAO is like an offer and not to be treated as a judgment of trial Court. It is well settled, when land holders are not agreeable to accept offer made by SLAO, they have a right to approach Collector under section 18 of the Act, 1894, by a written application, for referring the matter to Court, for determination of amount of compensation or if there is any dispute regarding measurement of land, for that also. In the present case References in question were made at the instance of claimants for determining the amount of compensation.
31. In Chimanlal Hargovinddas vs. Special Land Acquisition Officer, (1988) 3 SCC 751, the Court has said that a Reference is like a suit which is to be treated as an original proceeding. The claimants are in the position of a plaintiff who has to show that price offered for his land in award is inadequate. However, for the said purpose Court would not consider the material, relied upon by Land Acquisition Officer in award, unless the same material is produced and proved before the Court. The Reference Court does not sit in appeal over the award of Land Acquisition Officer. The material used by Land Acquisition Officer is not open to be used by the Court suo motu unless such material is produced by the parties and proved independently before Reference Court. Determination of market value has to be made as per market rate prevailing on the date of publication of notification under section 4 of Act, 1894. The basic principle which has to be followed by Reference Court for determining market value of land, as if, the valuer i.e. the Court is a hypothetical purchaser, willing to purchase land from the open market and is prepared to pay a reasonable price, as on the crucial day, i.e., date of publication of notification under section 4 of Act, 1894. The willingness of vendor to sell land on reasonable price shall be presumed. The Court, therefore, would co-relate market value reflected in the most comparable instance which provides the index of market value. Only genuine instances would be taken into account. Sometimes even post-notification instances may be taken into account if they are very proximate, genuine and acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects. Proximity from time angle and from situation angle would be relevant considerations to find out most comparable instances out of the genuine instances. From identified instances which would provide index of market value, price reflected therein may be taken as norm and thereafter to arrive at the true market value of land under acquisition, suitable adjustment by plus and minus factors has to be made. In other words a balance sheet of plus and minus factors may be drawn and the relevant factors may be valuated in terms of price variation, as a prudent purchaser would do. The market value of land under acquisition has to be deduced by loading the price reflected in the instances taken for plus factors and unloading for minus factors.
32. Some of the illustrative examples of plus and minus factors given by the Court in Chimanlal Hargovinddas (supra) are as under:
S.N.
Plus factors Minus factors 1 Smallness of size Largeness of area 2 Proximity to a road.
Situation in the interior at a distance from the road.
3Frontage on a road.
Narrow strip of land with very small frontage compared to depth.
4Nearness to developed area.
Lower level requiring the depressed portion to be filled up.
5Regular shape.
Remoteness from developed locality.
6Level vis-a-vis land under acquisition.
Some special disadvantageous factor which would deter a purchaser.
7Special value for an owner of an adjoining property to whom it may have some very special advantage.
33. The size of the land, therefore, would constitute an important factor to determine market value. It cannot be doubted that small size plot may attract a large number of persons being within their reach which will not be possible in respect of large block of land wherein incumbent will have to incur extra liability in preparing a lay out and carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers etc. The Court said that in such matters, factors can be discounted by making deduction by way of an allowance at an appropriate rate ranging between 20% to 50%, to account for land, required to be set apart for carving out road etc. and for plotting out small plots.
34. The concept of smaller and larger plots should be looked into not only from the angle as to what area has been acquired, but also the number of land holders and size of their plots. When we talk of concept of a prudent seller and prudent buyer, we cannot ignore the fact that in the category of prudent seller the individual land holder will come. It is the area of his holding which will be relevant for him and not that of actual total and collective large area which is sought to be acquired.
35. In V.M. Salgoacar & brother Ltd. vs. Union of India (1995) 2 SCC 302 the land acquired by notification dated 06.07.1970 in village Chicalim near Goa Airport belonged to a single owner. The Court observed, when land is sold out in smaller plots, there may be a rising trend in the market, of fetching higher price in comparison to the plot which are much higher in size. Having said so the Court further said " though the small plots ipso facto may not form the basis per se to determine the compensation, they would provide foundation for determining the market value. On its basis, giving proper deduction, the market value ought to be determined".
36. Again in Shakuntalabai (Smt.) and others vs. State of Maharashtra, 1996 (2) SCC 152, 20 acres of land in Akola town was sought to be acquired by notification published on 11.08.1965 under section 4(1) of Act, 1894 which was owned by a single person. It is in this context the Court said "the Reference Court committed manifest error in determining compensation on the basis of sq. ft. when land of an extent of 20 acres is offered for sale in an open market, no willing and prudent purchaser would come forward to purchase that vast extent of land on sq. ft. basis. Therefore, the Reference Court has to consider valuation sitting on the armchair of a willing prudent hypothetical vendee and to put a question to itself whether in given circumstances, he would agree to purchase the land on sq. ft. basis. No feat of imagination is necessary to reach the conclusion. The answer is obviously no".
37. We may also notice at this stage that deduction for development is different than deduction permissible in respect of largeness of area vis-a-vis exemplar of small piece of land. Many times, land owners relied on the rates on which development authorities used to offer allotment of developed plots cropped out by them in residential or industrial area. Such rates apparently cannot form basis for compensation for acquisition of undeveloped lands for reasons more than one. The market value in respect of large tract of undeveloped agricultural land in a rural area has to be determined in the context of a land similarly situated whereas allotment rates of development authorities are with reference to small plots and in a developed lay out falling within urban or semi-urban area. The statutory authorities including development authorities used to offer rates with reference to economic capacity of the buyer like economic weaker sections, low income group, middle income group, higher income group etc. Therefore, rates determined by such authorities are not uniform. The market value of acquired land cannot depend upon economic status of land loser and conversely on the economic status of the body at whose instance the land is acquired. Further, normally, land acquired is a freehold land whereas allotment rates determined by development authorities etc. constitute initial premium payable on allotment of plots on leasehold basis.
38. However, where an exemplar of small piece of land is relied, in absence of any other relevant material, Court may determine market value in the light of evidence relating to sale price of small developed plots. In such cases, deduction varying from 20% to 75% is liable to apply depending upon nature of development of lay out in which exemplar plot is situated.
39. In Lal Chand Vs. Union of India and another, (2009) 15 SCC 769, Court noticed that this deduction for development constitutes two components- one is with reference to area required to be utilized for development work and second is the cost of development work. It further held that deduction for development in respect of residential plot may be higher while not so where it is an industrial plot. Similarly, if acquired land is in a semi-developed urban area or in any undeveloped rural area, then deduction for development may be much less and vary from 25 to 40 percent since some basic infrastructure will already be available. The percentage is only indicative and vary depending upon relevant factors. With reference to exemplars of transfer of land between private parties, Court would also look into the intrinsic evidence, i.e., the exemplar sale deed where the sale deed recites financial difficulties of vendor and urgent need to find money as a reason for sale or other similar factors, like litigation or existence of some other dispute. These are all the factors constituting intrinsic evidence of a distress sale.
40. In Lal Chand Vs. Union of India (supra), the Court also observed, if acquisition is in regard to a large area of agricultural land in a village and exemplar sale deed is also in respect of an agricultural land in the same village, it may be possible to rely upon the sale deed as prima facie evidence of prevailing market value even if such land is at the other end of village, at a distance of one or two kilometers. But, the same may not be the position where acquisition relates to plots in a town or city where every locality or road has a different value. A distance of about a kilometer may not make a difference for the purpose of market value in a rural area but even a distance of 50 meters may make a huge difference in market value in urban properties. Thus, distance between two properties, the nature and situation of property, proximity to the village or a road and several other factors may all be relevant in determining market value.
41. Normally, the Courts have held that exemplars should be such which are before the date of notification under Section 4(1) of Act, 1894 but an exemplar sale deed of a subsequent period of date of acquisition notification is not completely ruled out to be relevant document provided circumstances to justify the same are available.
42. In State of U.P. Vs. Major Jitendra Kumar and others, AIR 1982 SC 876, notification under Section 4 was published on 6.1.1948. The Court determined rate of compensation relying on sale deed dated 11.7.1959, i.e., a document executed after almost three and half years after the date of acquisition notification. Supreme Court upheld reliance of such document observing that if there is no material to show that there was any fluctuation in market rate between the date of acquisition and the date of concerned sale deed, such document may be considered as a relevant material in absence of any other apt evidence. This view was followed in a subsequent decision, i.e., Administrator General of West Bengal Vs. Collector, Varanasi, AIR 1998 SC 943, where the Court said as under:-
"Such subsequent transactions which are not proximate in point of time to the acquisition can be taken into account for purposes of determining whether as on the date of acquisition there was an upward trend in the prices of land in the area. Further under certain circumstances where it is shown that the market was stable and there were no fluctuations in the prices between the date of the preliminary notification and the date of such subsequent transaction, the transaction could also be relied upon to ascertain the market value."
43. We need not go into a catena of other decisions rendered in the last several decades since we have benefit of a recent Division Bench decision of this Court in First Appeal No. 454/2003 and other connected matters, Meerut Development Authority through Its Secretary vs. Basheshwar Dayal (since deceased) Through His L.Rs and another decided on 01.08.2013 wherein the legal principles settled by Apex Court in various judgments, relevant for determination of market value have been crystallized as under:
(i) Function of the Court in awarding compensation under the Act is to ascertain the market value of the land on the date of the notification under Section 4(1),
(ii) The method for determination of market value may be :
(a) Opinion of experts,
(b) the price paid within a reasonable time in bona fide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages,
(c) a number of years purchase of the actual or immediately prospective profits of the land acquired.
(Ref. (1994) 4 SCC 595 para 5 Jawajee Nagnatham Vs. Revenue Divisional Officer & others)
(iii) While fixing the market value of the acquired land, comparable sales method of valuation is preferred than other methods of valuation of land such as capitalisation of net income method or expert opinion method. Comparable sales method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issue of notification under Section 4 of the Act. However, comparable sales method of valuation of land for fixing the market value of the acquired land is not always conclusive but subject to the following factors:-
(a) Sale must be a genuine transaction,
(b) the sale deed must have been executed at the time proximate to the date of issue of notification under Section 4 of the Act,
(c) the land covered by the sale must be in the vicinity of the acquired land,
(d) the land covered by the sales must be similar to the acquired land
(e) the size of plot of the land covered by the sales be comparable to the land acquired.
(f) if there is dissimilarity in regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is open to the Court to proportionately reduce the compensation for acquired land.
(iv) The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-a-vis the land under acquisition which are as under : -
Positive factors Negative factors
(i) Smallness of size
(i) Largeness of area
(ii) Proximity to a road.
(ii) Situation in the interior at a distance from the road.
(iii) Frontage on a road.
(iii) Narrow strip of land with very small frontage compared to depth.
(iv) Nearness to developed area.
(iv) Lower level requiring the depressed portion to be filled up.
(v) Regular shape.
(v) Lower level requiring the depressed portion to be filled up.
(vi) Level vis-a-vis land under acquisition.
(vi) Some special disadvantageous factor which would deter a purchaser.
(vii) Special value for an owner of an adjoining property to whom it may have some very special advantage.
(v) For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality.
(vi) Deduction not to be done when land holders have been deprived of their holding 15 to 20 years back and have not been paid any amount.
(vii) In fixing market value of the acquired land, which is undeveloped or under-developed, the Courts have generally approved deduction of 1/3rd of the market value towards development cost except when no development is required to be made for implementation of the public purpose for which land is acquired. ( Ref. (2011) 8 SCC page 9, Valliyammal and another Vs. Special Tahsildar Land Acquisition and another , paras 13, 14, 15, 16, 17, 18 and 19).
(viii) When there are several exemplars with Reference to similar lands, it is the general rule that the highest of the exemplars, if it is satisfied, that it is a bona fide transaction has to be considered and accepted. When the land is being compulsorily taken away from a person, he is entitled to the highest value which similar land in the locality shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition.(Ref. (2012) 5 SCC 432, Mehrawal Khewaji Trust (Registered), Faridkot and others Vs. State of Punjab and others).
(ix) In view of Section 51A of the Act certified copy of sale deed is admissible in evidence, even the vendor or vendee thereof is not required to examine themselves for proving the contents thereof. This, however, would not mean that contents of the transaction as evidenced by the registered sale deed would automatically be accepted. The legislature advisedly has used the word 'may'. A discretion, therefore, has been conferred upon a Court to be exercised judicially, i.e., upon taking into consideration the relevant factors. Only because a document is admissible in evidence, the same by itself would not mean that the contents thereof stand proved. Having regard to the other materials brought on record, the Court may not accept the evidence contained in a deed of sale. (Ref. (2004) 8 SCC 270 para 28 and 38, Cement Corpn. Of India Ltd. Vs. Purya and others).
(x) While fixing the market value of the acquired land, the Land Acquisition Collector is required to keep in mind the following factors : -
(a) Existing geographical situation of the land.
(b) Existing use of the land.
(c) Already available advantages, like proximity to National or State Highway or road and/ or developed area,
(d) Market value of other land situated in the same locality/ village/ area or adjacent or very near the acquired land.
(xi) Section 23(1) of the Act lays down what the Court has to take into consideration while Section 24 lays down what the Court shall not take into consideration and have to be neglected. The main object of the enquiry before the Court is to determine the market value of the land acquired. The market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when led out in most advantageous manner excluding any advantage due to carrying out of the scheme for which the property is compulsorily acquired. The determination of market value is the prediction of an economic event viz. a price outcome of hypothetical sale expressed in terms of probabilities. For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality.
(xii) The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like water, electricity, possibility of their further extension, whether near about town is developing.
(xiii) In fixing market value of the acquired land, which is undeveloped or under-developed, the Courts have generally approved deduction of 1/3rd of the market value towards development cost except when no development is required to be made for implementation of the public purpose for which land is acquired. Deduction of "development cost" is the concept used to derive the "wholesale price" of a large undeveloped land with Reference to the "retail price" of a small developed plot. The difference between the value of a small developed plot and the value of a large undeveloped land is the "development cost". (Ref. (2012) 7 SCC 595 paras 16, 17, 18, 21 and 22, Sabhia Mohammed Yusuf Abdul Hamid Mulla (dead) and others).
44. In Bhupal Singh & Ors. Vs. State of Haryana, 2015(5) SCC 801, the Court said that the fair market value of acquired land is required to be determined under Section 23 of Act, 1894 on the basis of market rate of adjacent land similarly situated to the acquired land prevailing on the date of acquisition or/and prior to acquisition but not subsequent to the date of acquisition. In appropriate cases, addition of 10% per annum escalation in the prices specified in the sale deeds (if filed and relied on) in relation to adjacent, similarly situated, lands for fixing market value of acquired land may be permitted.
45. Similar view was expressed earlier also in General Manager, Oil and Natural Gas Company Ltd. Vs. Rameshbhai Jivanbhai Patel and Anr., (2008) 14 SCC 745; Valliyammal and Anr. Vs. Special Tehsildar (Land Acquisition) and Anr., (2011) 8 SCC 91; and K. Devalimma & Ors. Vs. Tirumala Tirupati Devasthanams & Ors., 2015(5) SCALE 454.
46. In Bhule Ram Vs. Union of India & Ors., JT 2014 (5) SC 110, the Court said :
"The market value of the land should be determined taking into consideration the existing geographical situation of the land, existing use of the land, already available advantages, like proximity to National or State Highway or road and/or notionally or intentionally renowned tourist destination or developed area, and market value of other land situated in the same locality or adjacent or very near to acquired land and also the size of such a land."
47. The Court further held that Court should not take into consideration the use for which land is sought to be acquired and its remote potential value in future. In arriving at the market value, it is the duty of party to lead evidence in support of its case, in absence of which the court is not under a legal obligation to determine market value merely as per the prayer of the claimant.
48. In the light of above general guidelines and also considering the fact that claimants have to be considered as plaintiffs before Reference Court, therefore, onus initially lay upon them to prove what is the appropriate market rate, we proceed to consider first whether in the present case such onus has been discharged by plaintiffs or not.
49. In the present case, the exemplars relied by State have been rejected validly since pertained to sale deeds of 1994 while acquisition was made in 1991. The Court thereafter has followed its own award dated 16.10.2003 in LAR No.317/93 wherein it had relied on exemplars placed before Reference Court therein by the defendant itself.
50. But even then, instead of applying same rate, in the present case, the Reference Court has applied a further 20% deduction and determined market rate at Rs.120/- per sq.meter. In both the matters, acquired land was/is in Village Tatarpur Lalu, and acquisition is also simultaneous i.e. 06.7.1991 and 26.06.1991. That being so, no valid objection, in our view, is available to the appellants when Reference Court has already made a further deduction of 20% in the present case.
51. The contention of Sri Anil Sharma, learned counsel appearing for the claimants, that no deduction ought to have been made and Court below has erred in law by applying 20% deduction would not help him, since no cross objection or appeal has been filed by claimants-respondents against deduction applied by Reference Court. The award cannot successfully be assailed by claimants on that count. The impugned award, however, having already shown favour to appellant, in our view warrants no interference.
52. The rate determined by court below is not very adequate so far as claimants' point of view is concerned, still it cannot be said to be excessive or unjust or unreasoned as claimed by appellant.
53. Here, we would also like to observe that these appeals have actually arisen from acquisition of land of respondent(s), who is/are basically farmer(s). The State, in exercise of its statutory powers, has taken away valuable source of earning livelihood and rather, the only source of livelihood available to respondent(s), and in lieu thereof, compensation is sought to be paid. It is true that acquisition of land is a statutory right of State and therefore, respondent(s), by itself, may not oppose it successfully. But the fact remains that action of State has deprived respondents from having the solitary means of earning livelihood, which is being pursued, by farmer(s), normally from generation to generation. The cash amount, paid to them, does not result, normally, in acquisition of another land by these persons. Experience has shown that most of time, cash money is spent on material luxuries and thereafter these poor farmers, deprived of their land, come on road, find it difficult to sustain a bare two times meal for themselves as also the family. The conflict of development of nation and right of individual relating to his very sustenance, has a long chequered history of litigation as also legislation, giving rise to multifarious amendments in Land Acquisition Act. Now, a new enactment has come up.
54. The fact remains that agricultural land is continuously reducing though population of country is increasing and thereby creating another complication in the field of agricultural produce. The Court also finds that in the matter of compensation, if amount, thought to be adequate by State, is not accepted by Court below and compensation is increased, almost invariably land holders/farmers are dragged to higher Courts with continued litigation, which result in exhaustion of such person(s) not only in respect of their labour and energy but residuary worth and financial capacity etc. also. Sufficient amount of compensation, they are compelled to spent, in such litigation also.
55. The appeals normally are filed by State and its instrumentalities, as a matter of course, without any proper initial scrutiny whether it is worth filing or not and that is how a very huge chunk of appeal, in such matters, are filed by State against land holders/farmers, who are already denuded of their most valuable possession i.e. land/agricultural land. The State has constitutional obligation of a welfare State, must think over such aspect seriously. There should be an honest attempt to curtail frivolous, unfruitful litigation, particularly, if it can save innocent and poor citizens from litigious harassment.
56. Be that as it may, since we have already noticed that Reference Court has already shown due lenient view in favour of appellant, we do not find any justification to interfere with the award in question so far as it determined market value for the purpose of compensation payable to the claimants-respondents. In the circumstances, we do not find any error in the impugned award requiring interference.
57. The point for determination above, is answered against the appellant and in favour of the respondents- tenure holders.
58. In the result, all the appeals lack merit, hence, dismissed with costs throughout.
(Shashi Kant, J.) (Sudhir Agarwal, J.)
Order Date :- 03.11.2015
KA