Krishi Utpadan Mandi Samiti, ... vs Sri Mohammad Ali & Another
2015 Latest Caselaw 2361 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Court No. - 34
 

 
Case :- FIRST APPEAL No. - 41 of 1995
 
Appellant :- Krishi Utpadan Mandi Samiti, Moradabad
 
Respondent :- Sri Mohammad Ali & Another
 
Counsel for Appellant :- B.D. Mandhyan
 
Counsel for Respondent :- S.C.,Santosh Kumar
 

 
Hon'ble Sudhir Agarwal,J.

Hon'ble Brijesh Kumar Srivastava-II,J.

1. This appeal under section 54 of the Land Acquisition Act, 1894 (hereinafter referred to as the " Act, 1894) has been filed by Krishi Utpadan Mandi Samiti (hereinafter referred to as the "Mandi Samiti"), Moradabad, the defendant-appellant, being aggrieved by award/judgment dated 23.09.1994 and decree dated 07.10.1994 passed by Sri J.S. Yadav, VIIth Additional District Judge, Moradabad in Land Acquisition Reference (hereinafter referred to as "LAR") No. 102 of 1991.

2. Mandi Samiti proposed to construct a new Mandi at Amroha and for that purpose sent requisition to State Government for acquisition of 16.45 acres of land. Acquisition proceedings were initiated by State Government by issuing notification under section 4(1) of the Act, 1894 which was published on 27.06.1987 proposing to acquire requisitioned area of land at Village Gulariya, Pargana and Tehsil, Amroha, District Moradabad. Notification under section 6(1) of the Act, 1894 was also published on 14.09.1987 and possession of acquired land was taken 30.11.1987. Special Land Acquisition Officer (hereinafter referred to as the "SLAO") after inviting objections made its award dated 04.06.1990 determining market value according to nature of soil, as under :-

fdLe tehu

ijrk

{ks=Qy

nj

izekkf.kr izfrdj

ewM+&AA

3&11

13&87

1935&90

266542&98

EkfV;kkj&AA

10&75

2&08

68910&26

143333&84

nqeu&AA rjkbZ

9&75

1&00

62500&00

62500&00

;ksx

16&45

472376&32

3. Aggrieved with offer made by SLAO for compensation and claiming higher market rate, the land owners made applications before Collector for reference under Section 18 of Act, 1894 to District Judge, Moradabad for determination of market value considering the factors mentioned under Section 23 of Act, 1894. The claimants stated that circle rate determined by Collector for the purpose of stamp duty in the area where acquired land is situated was Rs. 150/- to 250/- per sq. meter, hence rate determined by SLAO is unreasonable and extremely low. State Government as well as Mandi Samiti supported market rate determined by SLAO .

4. The Court below, vide impugned award dated 23.09.1994, partly accepted claim of land owner and determined market value for the purpose of compensation at Rs. 60/- per sq. meter. It has further held that claimants are entitled to 30% solatium, 12% additional compensation and 9% interest from the date of possession for a period of one year and thereafter 15 % interest for remaining period till actual payment is made.

5. Mandi Samiti, aggrieved by enhancement of compensation, has come up in this appeal. The actual grievance is confined to the market value determined by Reference Court and the basic contention of learned counsel appearing for appellant is that the aforesaid market value determined by court below is higher, excessive, unjust and does not depict correct market value on the date when acquisition proceedings commenced vide notification under section 4(1) of Act, 1894, i.e., on 27.06.1987.

6. The only point up for determination in this appeal is, "whether market value of acquired land determined by Reference Court at Rs. 60/- per sq. meter is just, valid and reasonable?"

7. Sri B.D. Mandhyan, learned Senior Advocate, appearing for appellant, contended that exemplars relied upon by court below pertain to very small piece of land and therefore, should not have been accepted as valid exemplar for determination of market value. In any case, deduction toward largeness of area ought to have been 75%. He further contended that Reference Court has also failed to apply deduction towards development which was already there in the area where acquired land is situated.

8. Before examining the aforesaid issue, we find it appropriate to remind ourselves with principles land down in past several decades on judicial side which must be taken while determining market value of the land acquired forcibly under the provisions of Act, 1894 .

9. In Chimanlal Hargovinddas vs. Special Land Acquisition Officer, (1988) 3 S.C.C 751, the Court has said that a reference is like a suit which is to be treated as an original proceeding. The claimants is in the position of a plaintiff who has to show that the price offered for his land in the Award is inadequate. However, for the said purpose the 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 the 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 the Act, 1894. The willingness of vendor to sale land on reasonable price shall be presumed. The Court, therefore, would co-relate market value reflated 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.

10. 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, the 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.

11. 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 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.

12. In V.M. Salgoacar & brother Ltd. vs. Union of India (1995) 2 S.C.C 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".

13. Again in Shakuntalabai (Smt.) and others vs. State of Maharashtra, 1996 (2) S.C.C 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 also 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".

14. 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.

15. 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.

16. 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.

17. 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.

18. 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.

19. 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."

20. We need not go into the catena of other decisions rendered in the last several decades since we have benefit of a recent Division Bench decision of this Court in Meerut Development Authority through Its Secretary vs. Basheshwar Dayal (since deceased) Through His L.Rs and another, 2013(7) ADJ 401 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).

21. In Valliyammal and another v. Special Tahsildar (Land Acquisition) and another, (2011) 8 SCC 91 the Court has looked into various earlier judgments laying down guiding principles for determination of market value of acquired land. The Court has observed that comparable sales method of valuation is preferred since it furnishes the evidence for determination of market value of acquired land at which a willing purchaser would pay for acquired land if it had been sold in open market at the time of acquisition. However, this method is not always conclusive and there are certain factors, which are required to be fulfilled and on fulfillment of those factors, compensation can be determined. Such factors are (a) sale must be a genuine transaction; (b) sale deed must have been executed at the time proximate to the date of issue of notification under Section 4; (c) land covered by the sale must be in the vicinity of acquired land; (d) land covered by the sales must be similar to acquired land; and (e) size of plot of the land covered by the sales be comparable to the land acquired. If there is dissimilarity in regard to locality, shape and size or nature of land, court can proportionately reduce compensation depending upon disadvantages attached with the acquired land. Further, for determining market value, potentiality of acquired land should also be taken into consideration. The potentiality means, capacity or possibility for changing or developing into state of actuality. It is well settled that market value of property has to be determined having due regard to its existing condition, with all its existing advantages and its potential possibility when led out in its most advantageous manner. The Court stated that when undeveloped or underdeveloped land is acquired the exemplar is in respect to developed land, detection towards deduction can be made. Normally, such deduction is 1/3, but it is not a hard and fast rule.

22. In Bhule Ram v. Union of India and another, JT 2014 (5) SC 110 the Court in para 7 has observed that valuation of immovable property is not an exact science, nor it can be determined like algebraic problem, as it bounds in uncertainties and no strait-jacket formula can be laid down for arriving at exact market value of the land. There is always a room for conjecture, and thus the court must act reluctantly to venture too far in this direction. The factors such as the nature and position of the land to be acquired, adaptability and advantages, the purpose for which the land can be used in the most lucrative way, injurious affect resulting in damages to other properties, its potential value, the locality, situation and size and shape of the land, the rise of depression in the value of the land in the locality consequent to the acquisition etc., are relevant factors to be considered. It further said that value, which has to be assessed, is the value to the owner, who parts with his property, and not the value to the new owner, who takes it over. Fair and reasonable compensation means the price of a willing buyer, which is to be paid to the willing seller. Though the Act does not provide for "just terms" or "just compensation", but the market value is to be assessed taking into consideration the use to which it is being put on acquisition and whether the land has unusual or unique features or potentialities.. The Court then also considered as to what is the concept of guess work and observed that it is not unknown to various fields of law as it applies in the cases relating to insurance, taxation, compensation under the Motor Vehicle Act as well as under the Labour Laws. Having said so, the Court further said: -

"The court has a discretion applying the guess work to the facts of the given case but is is not unfettered and has to be reasonable having connection to the facts on record adduced by the parties by way of evidence. The court further held as under: -

"'Guess' as understood in its common parlance is an estimate without any specific information while "calculations" are always made with reference to specific data. "Guesstimate" is an estimate based on a mixture of guesswork and calculations and it is a process in itself. At the same time "guess" cannot be treated synonymous to "conjecture". "Guess" by itself may be a statement or result based on unknown factors while "conjecture" is made with a very slight amount of knowledge, which is just sufficient to incline the scale of probability. "Guesstimate" is with higher certainty than more "guess" or a "conjecture" per se." (para 8)

23. In Bhupal Singh and others v. State of Haryana, (2015) 5 SCC 801 while the above principles laid down in various cases were reiterated, the Court in para 18 of the judgment said: -

"Law on the question as to how the court is required to determined the fair market value of the acquired land is fairly well settled by several decisions of this Court and remains no more res integra. This Court has, inter alia, held that when the acquired land is a large chunk of undeveloped land having potential and was acquired for residential purpose then while determining the fair market value of the lands on the date of acquisition, the appropriate deductions are also required to be made."

24. It is also reaffirmed that an exemplar where relates to small piece of developed land and is sought to be relied to determine market value on large tract of undeveloped acquired land, deduction can be applied ranging between 20% to 75%. The Court in para 20 of the judgment relied upon its decision in Chandrashekar v. Land Acquisition Officer, (2012) 1 SCC 390 stating that the deduction has two components, one is development and another with respect to the size of the area. The earlier percentage of deduction was restricted in Subh Ram v. State of Haryana, (2010) 1 SCC 444 stating that deduction of both components should be around 1/3 each in its entirety, which would roughly come to 67% of component of sale consideration of exemplar sale transaction. Thus, with respect to escalation of price where exemplar is much earlier in point of time, the Court in K. Devakimma and others v. Tirumala Tirupati Devasthanam and another, 2015 (111) ALR 241 said that recourse can be taken in appropriate cases to the mode of determining market value by providing appropriate escalation over the proved market value of nearby land in previous years where there is no evidence of any contemporaneous sale transaction or acquisition of comparable lands in neighborhood. The percentage of escalation may vary from case to case so also the extent of years to determine the rates.

25. In nut-shell, we find that land if the land is wholly undeveloped situated in an undeveloped area and exemplars which are relied upon for the purpose of determination of market value pertains to a land which is developed or situated in developed area, an appropriate deduction towards development should have been applied. This is one kind of deduction. The another kind of deduction contemplated in aforesaid authorities is towards largeness of area. If exemplars relate to very small piece of land and acquired land of the particular claimants is larger, then appropriate deduction would apply under this head also. Then third is the factor of appreciation or depreciation relating to gap of date of exemplar and date of acquisition notification. If the exemplar is of some earlier period may be a year or more from the date of notification under Section 4, then the Courts have completed application of appreciation towards cost unless the finding is recorded that there is no considerable development in the area justifying any appreciation. Similarly, if the exemplar relates to a subsequent period of notification under Section 4, a depreciation of reasonable amount would be applied. Percentage of two kinds of deduction and appreciation/ depreciation may vary depending on various factors as discussed hereinabove.

26. In the light of aforesaid exposition of law, we now proceed to consider, whether the rate determined by Reference Court is just, valid and reasonable or an inflated rate has been determined justifying interference by this Court.

27. The disputed area of acquired land of claimant-respondent is 7.61 dismal, plot No. 239, 240 and 237 at Village Gulariya, Pargana and Tehsil Amroha, District Moradabad. At the time of acquisition there were a large number of trees of various kinds, namely, Guava, Eucalyptus, Barry etc. It show that land was being used for agricultural purpose. It was an irrigated land as irrigation facility by installing pump set was available. The land was plain. The factum regarding standing trees etc. is not disputed by appellant as well as State of U.P. but they pleaded that there was no declaration under Section 143 of U.P. Zamindari Abolition and Land Reforms Act, 1950, hence it continued to be an agricultural land at the time of acquisition. The Reference Court however has found that acquired land situate in an area which was sufficiently developed having Abadi and Pucca Road. It has great future potential. Amroha Railway Station was very near and acquired land was within the jurisdiction of Nagar Palika Amroha. A large number of houses were already constructed thereat. The findings recorded by court below in this regard read as under:

^^vejksgk jsyos LVs'ku ds dkQh djhc gS] uxj ikfydk vejksgk dh lhek ds vUrxZr gS] Hkwfe ds djhc vkcknh c<+ jgh gS vkSj dkQh edku Hkh cus gq, gSaA blds fo:) izfroknhx.k dh vksj ls dksbZ lk{; ugha fn;k x;k gSA bu ifjfLFkfr;ksa esa eSa bl fu"d"kZ ij igqWaprk gwa fd orZeku vftZr dh gq;h Hkwfe Hkkofud {kerk j[krh gS] d`f"k mRiknu eaMh lfefr ds fuekZ.k Lfky ds fy, yh x;h gS] blds vkl ikl vkcknh Hkh gS vkSj vkcknh ds c<+us dh lEHkkO;rk Hkh ekStwn gS vkSj ;g uxj ikfydk vejksgk dh lhek ds vUnj Hkh gSA vr% vijksDr ifjfLFkfr;ksa ds vk/kkj ij futk;h Hkwfe dk cktkjh ewY; Hkkofud {kerk ds vk/kkj ij fu/kkZfjr fd;k tk;sxkA**

"It is quite near to the Amroha Railway Station, falls within the limits of Municipality of Amroha; near the land, population is on the rise and there are also many houses constructed. No evidence gainsaying this has been produced on behalf of the defendants. In these circumstances, I conclude that the land currently acquired has construction potential; it is acquired for construction of Krishi Utpadan Mandi Samiti, population does also exist around it with probability of its increase and this town even falls within the limits of Municipality of Amroha. Hence, on the basis of the aforesaid circumstances, the market price of the land in question shall be determined taking into account its construction potential."

(English Translation by the Court)

28. Sri Mandhyan, learned Senior Advocate, when asked, could not dispute that acquired land has development potential and situate in a sufficiently developed area.

29. Before Reference Court the claimant relied on an award (paper No. 20 Ga) delivered by Vijendra Singh, 13th Additional District Judge, Moradabad in LAR No. 111 of 1988 in respect of an acquisition in which notification under Section 4 was published on 01.05.1987 and therein market value was determined at Rs. 80/- per sq. meter. The aforesaid acquisition was also in respect of Mandi at Amroha. Besides, the claimant relied on three sale deeds and one agreement to sell, details whereof are given in the following chart:

Nature of document

Parties

Date

Paper No.

Area

Rate-Total/per Sq. meter

Sale deed

Kanhaiyya-Vendor

Parvansh Kaur-Vendee

13/04/88

23Ga

133.83 sq. mt.

20,000/-

i.e., 150/- per sq. mt.

Sale deed

Buddhan Singh-Vendor

Ganga Ram-Vendee

10/12/85

24Ga

23 sq. mt.

6,000/-

i.e., 260/- per sq. mt.

Sale deed

Buddhan Singh-Vendor

Munne Ahmad-Vendee

24/12/85

25Ga

24 sq. mt.

5000/-

i.e. 208/- per sq. mt.

Agreement to sell

Kanhaiyya-proposed vendor

Manohar Lal-proposed vendee

14/11/88

22Ga

320 sq.mt.

60,000/-

i.e., 187/- per sq. mt.

30. All these exemplars were rejected, (except sale deed dated 13.04.1988, Paper No. 23 Ga) by Reference Court holding that agreement to sell is almost one and half years subsequent to the date of acquisition notification under Section 4 and two sale deeds relates to a very small piece of land which would not be appropriate documents for showing correct market value of disputed acquired land. The Reference Court thereafter referred to award of SLAO wherein sale deed dated 27.01.1987 executed by Bhoop Singh transferring 0.47 acres of land was relied and held that it does not show appropriate topography of land under transaction and, therefore, would not be appropriate guidelines for determining market value of disputed acquired land. Then there remains only paper No. 23 Ga, whereby 133 sq. meter land was transferred at the rate of Rs. 150/- per sq. meter vide sale deed dated 13.04.1988. The Court noticed the fact that disputed acquired land of claimant land-owner was a very big plot while land under exemplar was smaller land, therefore, 60% deduction towards largeness of area must be applied and that is how it determined market value at Rs. 60/- per sq. meter.

31. Sri Mandhyan, admitted that claimant-land owner had adduced oral evidence of claimant, Mohd. Ali as PW-1 as well as documentary evidence but no evidence was adduced on the part of Mandi Samiti either oral or documentary and they solely relied on the award of SLAO.

32. When acquired land is situated in a developed area and exemplar also relates to land situate in that very area, we find no justification for applying deduction towards development. Learned counsel for appellant also could not tell us as to how and why such deduction could have been justifiably applied.

33. Thus the only question now remains is, whether deduction on account of largeness of area applied by court below is correct or it should have been higher.

34. It is no doubt true that exemplar 23 Ga pertained to a small piece of land while area of disputed land was big. Therefore, in normal circumstance sufficiently higher deduction should have been applied. However, we also find that for same purpose, i.e., Mandi Samiti at Amroha, in another acquisition proceeding which is quite corresponding to acquisition with which we are concerned, the Reference Court therein had determined market value at Rs. 80/- per sq. meter and no valid reason has been assigned by court below for not following the same. There is only one Mandi at Amroha. Therefore, acquisition for Mandi itself demonstrate that the acquired land in both proceedings was in vicinity. It show that actual market value at the time of acquisition was sufficiently higher and the mere fact that land owners could lay their hand to an exemplar which pertains to small piece of land, does not mean that higher rate of land should have been ignored altogether. However, claimant-land owners have not come up before this Court for enhancement of market value, therefore, we cannot help them in this matter but have no hesitation in holding that Reference Court has already shown a considerate view in favour of appellant by determining market value at a lower rate, completely ignoring another award which was also placed before it. Thus the question of further deduction of market value, in our view, would not arise as that would cause serious prejudice to a farmer who has lost his holding due to forcible acquisition and still if not paid appropriate compensation for the outgoing land, it would be injustice.

35. Here, we would also like to observe that this appeal has 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.

36. 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.

37. 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.

38. Moreover, we are of the view that the Body who has acquired the land in question is 'State' as defined under Article 12 of Constitution of India. Acquisition is by forcibly taking away land of private individuals. The State, therefore should not litigate with private individual(s) like private litigants and, instead, adopt broad-hearted view, particularly when claimants are those who have been deprived of their land forcibly and many of them might come to situation, where they may lose the only source of earning livelihood for themselves and their family members. Their cause needs to be looked into with due compassion and attempt should have been made to pay them appropriate compensation, with which they may maintain themselves dignified life and explore any other source of earning livelihood in place of their erstwhile source of livelihood, which they are losing on account of acquisition proceedings.

39. We may also remind that a decree of reversal is not to be passed as a matter of right but the judgment of the court below can be reversed by Appellate Court only when justified reasons and grounds are available.

40. In S.V.R.Mudaliar (Dead) by Lrs. and Ors. Vs. Rajabu F.Buhari (Mrs) (Dead) by Lrs. and Ors. AIR 1995 SC 1607, the Court in paras 14 and 15 of the judgment has upheld the contention that though the Appellate Court is within its right to take a different view on the question of fact, but that should be done after adverting to the reasons given by Trial Court in arriving at the findings in question. The Appellate Court before reversing a finding of fact has to bear in mind the reasons ascribed by Trial Court. The Apex Court relied and followed an earlier decision of Privy Council in Rani Hemant Kumari Vs. Maharaja Jagadhindra Nath, 10 CWN 630 and in para 15 of the judgment said:

"There is no need to pursue the legal principle, as we have no doubt in our mind that before reversing a finding of fact, the appellate court has to bear in mind the reasons ascribed by the trial court. This view of ours finds support from what was stated by the Privy Council in Rani Hemant Kumari Vs. Maharaja Jagadhindra Nath, (1906) 10 Cal.W.N. 630, wherein, while regarding the appellate judgment of the High Court of judicature at Fort William as "careful and able", it was stated that it did not "come to close quarters with the judgment which it reviews, and indeed never discusses or even alludes to the reasoning of the Subordinate Judge."

41. Following the above decision Hon'ble B.L.Yadav, J in Smt. Sona Devi Vs. Nagina Singh and Ors. AIR 1997 Patna 67 observed that whenever judgment of Appellate Court is a judgment of reversal, it is the primary duty of Appellate Court while reversing the findings of Trial Court to consider the reasons given by Trial Court and those reasons must also be reversed. Unless that is done, judgment of Lower Appellate Court cannot be held to be consistent with the requirement of Order XLI, Rule 31, which is a mandatory provision.

42. The above view has also been followed recently in Jaideo Yadav Vs. Raghunath Yadav & Anr., 2009(3) PLJR 529 wherein the Court said that Trial Court recorded its findings but Lower Appellate Court had not reversed the said findings and rather on the basis of some findings of its own, title appeal was allowed by Lower Appellate Court without appreciating findings of Trial Court on the concerned issue. The Court then said :

"The law is well settled in this regard that where the judgment of the lower appellate court is a judgment of reversal it is primary duty of the appellate court to consider the reasons given by the trial court and those reasons must also be reversed."

43. This Court has also followed the same view in Doodhnath and another Vs. Deonandan AIR 2006 Allahabad 3.

44. In view of above discussion we answer the question formulated above against appellant and in favour of respondent-claimant.

45. No other point has been argued.

46. The appeal is devoid of merit. Dismissed with costs.

Dated 17.09.2015.

Aks/AK