The Agriculture Produce Market ... vs Ramesh Marotrao Deulkar (Dead) ...
2022 Latest Caselaw 3997 Bom

J-FA-1004-17                                                                1/19


                IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                          NAGPUR BENCH, NAGPUR.

                          FIRST APPEAL NO.1004 OF 2017


The Agriculture Produce Market
Committee, Babhulgaon, through its
Chairman at Post Babhulgaon,
Tq. Babhulgaon, Dist. Yavatmal                           ... Appellant

-vs-

1. Ramesh Marotrao Deulkar (Dead)
   Through his Legal representatives :

       (a) Nirmala Dhanraj Shirbhate,
           Aged about 68 years,
           Occ. Agriculturist,
       (b) Sarla Marotrao Deulkar
           Aged about 68 years,
           Occ. Agriculturist,

   Both R/o D. N. Shirbhate,
   Plot No.60, Zanwar Layout,
   Near Bachpan Play School,
   Wadgaon, Tq. & Dist. Yavatmal

2. The State of Maharashtra
   Through Collector, Yavatmal,
   Tah. And Dist. Yavatmal

3. The Sub Divisional Officer and
   Land Acquisition Officer, Yavatmal,
   Tq. And Dist. Yavatmal                                ... Respondents

                                      .....

Shri Kapil V. Deshmukh, Advocate with Shri Shakil V.Deshmukh, Advocate for appellant.

Shri A. B. Nakshane, Advancement for respondent No.1 (a) and (b) Smt H. N. Jaipurkar, Assistant Government Pleader for respondent Nos.2 and 3.

.....

CORAM : A. S. CHANDURKAR AND SMT M. S. JAWALKAR JJ.

DATE ON WHICH ARGUMENTS WERE HEARD : March 11, 2022 DATE ON WHICH JUDGMENT IS PRONOUNCED : April 13, 2022 J-FA-1004-17 2/19

Judgment : (Per : A. S. Chandurkar, J.)

This appeal filed under Section 54 of the Land Acquisition Act,

1894 (for short, the said Act) read with Section 96 of the Code of Civil

Procedure, 1908 raises challenge to the judgment of the Reference Court

dated 03/05/2017 in LAC No.127/2007. The enhancement granted in the

amount of compensation in proceedings under Section 18 of the said Act

filed by the respondents has been challenged by the beneficiaries of the

acquisition proceedings.

2. Gat No.60 admeasuring 2H 32R situated at mouja Nandura Tal.

Babhulgaon, Dist. Yavatmal was the subject matter of acquisition since land

was required by the Agricultural Produce Market Committee, Babhulgaon.

Notification under Section 4 of the said Act was issued on 17/06/2004. The

Land Acquisition Officer passed his award on 16/06/2006 and awarded

compensation of Rs.1,04,000/- per hectare. The land owners being

dissatisfied with the quantum of compensation filed reference proceedings

under Section 18 of the said Act. The reference Court after considering the

evidence led by the parties by its award dated 03/05/2017 enhanced the

amount of compensation to Rs.603/- per square meter. This enhancement

has been challenged by the Agricultural Produce Market Committee.

J-FA-1004-17 3/19

3. Shri K. V. Deshmukh, learned counsel for the appellant submitted

that the enhancement granted by the Reference Court was in the absence of

sufficient supporting documentary evidence on record. The appellant had

placed on record various sale-deeds from Exhibits-94 to 104 with regard to

transactions of sale of lands located at Nandura itself. However by relying

upon the decision in State of West Bengal vs. Secretary, Union Club AIR 1972

Calcutta 225 the Reference Court discarded various sale transactions on the

ground that those sale transactions had not been considered by the Land

Acquisition Officer while passing his award. This was contrary to the law

laid down by the Honourable Supreme Court in Chimanlal Hargovinddas vs.

Special Land Acquisition Officer, Poona AIR 1988 SC 1652 . He submitted that if

the parties had brought on record of the Reference Court relevant sale

transactions, they were liable to the taken into consideration irrespective of

the fact whether the same were considered or not by the Land Acquisition

Officer. He then submitted that the joint measurement of the acquired land

was undertaken on 10/10/2003. This was clear from the award passed by

the Land Acquisition Officer. Thereafter on 20/10/2003 the present

claimants had executed a sale-deed at Exhibit-64 by which a plot

admeasuring 150 square meters at neighbouring village Kopra came to be

sold for an amount of Rs.1,53,300/- This transaction having been entered

into by the claimants after the joint measurement of the acquired land was

done clearly indicated that the claimants after getting knowledge of the fact J-FA-1004-17 4/19

that their land was to be acquired, entered into a transaction of a small plot

of land. That transaction therefore was not a bonafide transaction for being

taken into consideration in the reference proceedings. The Reference Court

erred in relying upon Exhibit-64 for enhancing the amount of compensation.

4. The learned counsel then submitted that vide Exhibit-72 the

claimants had applied for converting the land in question for non-

agricultural use on 20/09/2003. However before the agricultural land could

be so converted, the notification under Section 4 of the said Act came to be

issued. Thus on the date of issuance of such notification the land remained

to be agricultural land. The Reference Court was not justified in enhancing

the amount of compensation by referring to sale instances of small plots from

a layout located at village Kopra which had been converted for non-

agricultural use. On the contrary the claimants had relied upon various sale-

transactions of agricultural lands especially the sale instances dated

08/08/1999 which were at Exhibits-104 and 105 from village Nandura itself.

Since these sale transactions were of agricultural lands from the same village

there was no reason to discard them at all. It was thus submitted that the

determination of enhanced compensation was also flawed for the reason the

value of small plots from village Kopra which was an adjoining village were

taken into consideration ignoring the sale instances from village Nandura.

When the sale instances of agricultural land from the same village were J-FA-1004-17 5/19

available, there was no reason to take into consideration sale instances of

converted plots of small dimensions from the adjoining village. Assuming

that such sale instances could have been considered, it was submitted that

the deduction towards development charges taken at 33% and 10% for

smallness of those plots was also on a lower side. As a result the

compensation of Rs.1,04,000/- per hectare as granted by the Land

Acquisition Officer was enhanced to Rs.60,30,000/- per hectare. Such

exorbitant enhancement was not at all justified on the basis of the evidence

on record. The learned counsel also submitted that the claimants had

examined their Power of Attorney holder at Exhibit-54 and he had deposed

from his personal knowledge and not of the facts informed to him by the

claimants. The deposition of the Power of Attorney holder was thus liable to

be discarded. The learned counsel placed reliance on the following

decisions to substantiate his contentions :

(1) Chimanlal Hargovinddas vs. Special Land Acquisition Officer, Poona AIR 1988 SC 1652

(2) Land Acquisition Officer Eluru vs. Jasti Rohini 1995 (1) SCC 717

(3) State of Uttar Pradesh vs. Ram Kumari Devi AIR 1996 SC 3370

(4) The Land Acquisition Officer, Revenue Divisional Officer, Chittor vs. Kamalamma (Dead) by LRs and ors. AIR 1998 SC 781 (5) Land Acquisition Officer vs. Nookala Rajamallu and ors. 2004(5) ALLMR (SC) 176 (6) Janki Vashdeo Bhojwani and ors. vs. Indusind Bank Ltd. and ors. 2005 (1) MhLJ 1170 (SC)

(7) Dalip Singh vs. State of U.P. and Ors. (2010) 2 SCC 114 J-FA-1004-17 6/19

(8) Kalyan Kumar Gogoi vs. Ashutosh Agnihotri and anr. 2011(1) SCALE

(9) Vidarbha Irrigation Development Corporation vs. Kamlaji Balaji Jadhav and ors. 2011 (3) Bom.C.R. 331

(10) Chandrashekar (Dead) by LRs and ors. vs. Land Acquisition Officer and anr. (2012) 1 SCC 390

(11) Kapil Mehta vs. Union of India (UOI) 2015(4) MhLJ 40 (SC)

(12) Dattatraya Uddhav Uplenchwar (D) Thr. LRs vs. State of Maharashtra 2015(7) ALLMR 958

It was thus submitted that the judgment of the Reference Court

was liable to be set aside and the award passed by the Land Acquisition

Officer ought to be restored.

5. Shri A. B. Nakshane, learned counsel for the claimants supported

the award passed by the Reference Court. He invited attention to the

evidence on record and especially the documents at Exhibits-73, 76 and 109

to indicate the proximate location of the sale instance at Exhibit-64 with the

acquired land. The sale transaction at Exhibit-64 was dated 20/10/2003

which was just prior to the notification under Section 4 of the said Act dated

17/06/2004. The other sale instances relied upon by the appellant were

rightly discarded since they were executed much prior to issuance of the

notification under Section 4 of the said Act. Placing reliance on the decision

in Mehrawal Khwaji Trust (Regd) Faridkot and ors vs. State of Punjab and ors. AIR

2012 SC 2721 it was submitted that the highest sale instance on record ought

to be considered and the same was rightly considered by the Reference J-FA-1004-17 7/19

Court. The acquired land having been acquired for setting up the market of

the Market Committee, it was obvious that it had great non-agricultural

potential. The surrounding lands had been converted for non-agricultural

use and the enhancement in the amount of compensation on that basis was

justified. The reliance placed by the Reference Court on the decision in

Secretary, Union Club (supra) was justified. The claimants had also examined

the valuer who had inspected the claimants' land and had submitted the

valuation report. The witness examined by the claimants was fully aware

about the subject matter of the proceedings and he had deposed on the basis

of instructions given by the claimant. His deposition therefore could not be

faulted. In support of his submissions the learned counsel placed reliance on

the decisions in Land Acquisition Officer and Mandal Revenue Officer vs. V.

Narasaiah AIR 2001 SC 1117, Thakarsibhai Devjibhai and ors. vs. Executive

Engineer, Gujrat and anr. AIR 2001 SC 2424, Chandra Bhan (Dead) Thr. LRs and

ors. (2015) 15 SCC 343 and K. S. Sanjeev (Dead) By LRs and ors. vs. State of

Kerala and anr. (2016) 12 SCC 425. He therefore submitted that as the

enhancement granted by the Reference Court was reasonable and justified in

the facts of the case, there was no reason to interfere with the impugned

judgment.

6. In the light of rival submissions the following point arises for

determination :

J-FA-1004-17 8/19

" Whether the Reference Court has granted fair compensation to the claimants not warranting any interference or whether the compensation as enhanced by the Reference court is on a higher side without sufficient supporting evidence ? "

7. For answering the point as framed it would be necessary to first

refer to the relevant evidence led by the parties before the Reference Court.

The claimants examined one Shailesh D. Shirbhate who was the Power of

Attorney holder of the claimants. His affidavit is at Exhibit-54. He has

deposed about the non-agricultural potentiality of the acquired land to justify

the enhancement in the amount of compensation. He has stated that various

lands adjoining the acquired land were already converted for non-

agricultural use. The land was got valued by one Shri C. P. Wankhade and

his valuation report was also placed on record. The said witness placed on

record various sale-deeds including the valuation report. In his cross-

examination he admitted that he had not filed sale transactions of village

Nandura nor was any document filed to indicate the income earned from the

acquired land. The suggestion that the land would be acquired in the future

for which reason the application for conversion for non-agricultural use was

filed was denied.

The second witness examined was Chandrashekhar Panjabrao

Wankhade at Exhibit-77. The said witness was a registered valuer and

according to him the value of the acquired land was Rs.17,212/- per square J-FA-1004-17 9/19

meter. In his cross-examination he admitted that Gat No.60 was situated in

front of Gat No.61. He denied the suggestion questioning the manner in

which valuation of the land was undertaken.

8. The acquiring body examined Shri Nitin Mankar who was Secretary

of the Market Committee at Exhibit-90. He placed on record various sale

transactions of village Nandura to indicate the prevailing market price of the

said lands. He denied the suggestion that the acquired lands had got great

non-agricultural potentiality.

9. It would be necessary to refer to the sale transactions relied upon

by the claimants as well as by the Market Committee with a view to

determine the fair market value of the acquired land. The claimants placed

on record sale-deed at Exhibit-63 which is dated 14/09/2000. By this sale-

deed land admeasuring 0.02R which is about 600 square feet from Gat

No.85 Survey No.37 situated at village Kopra was sold for a consideration of

Rs.3,00,000/-. At Exhibit-64 is another sale-deed dated 20/10/2003 by

which 150 square meters or 1416 square feet of non-agricultural land from

a layout plot situated at village Kopra was sold for Rs.1,53,000/-. The

vendors were the claimants themselves. The claimants had sought to

convert the land from Gat No.60 which was subsequently acquired for non-

agricultural use.      The application in that regard dated 20/09/2003 is at
 J-FA-1004-17                                                                10/19

Exhibit-72. At Exhibit-73 is a map showing location of various plots/Gat

numbers of village Nandura after consolidation.

Insofar as the Market Committee is concerned it has relied upon the

sale-deeds at Exhibit-96 dated 12/02/2004 by which plot Nos.22 and 32

admeasuring 437.50 square meters or 4707.50 square feet from mouja

Nandura were sold for Rs.52,500/- or Rs.120/- per square meter. Yet

another sale-deed at Exhibit-101 is with regard to plot Nos.8 and 9 of village

Nandura. The sale-deed dated 23/04/2004 was in respect of sale of 518.58

square meters for Rs.63,500/- or Rs.120/- per square meter. At Exhibit-104

is a sale-deed dated 18/08/1999 from Gat No.58 of village Nandura.

Agricultural land admeasuring 1H 62R was sold for Rs.85,500/- which comes

to approx. Rs.53,000/- per hectare. At Exhibit-105 is another sale-deed of

agricultural land from village Nandura dated 18/08/1999. Gat No.68 of

village Nandura admeasuring 1H 77R was sold for Rs.93,000/-. Rate per

hectare comes to Rs.53,000/-. The aforesaid sale instances are found to be

relevant for determining the fair market value.

10. At this stage it would be necessary to refer to the observations of the

Reference Court in paragraph 11 of the impugned judgment. While

considering various sale instances on record reference was made to the

decision in Secretary, Union Club (supra) and it was held that it would not be

permissible for the acquiring body to rely upon those sale instances that were J-FA-1004-17 11/19

not taken into consideration by the Land Acquisition Officer while passing

the award. On that count various sale instances relied upon by the Market

Committee were not taken into consideration by the Reference Court.

Perusal of the decision in Secretary, Union Club (supra) indicates that it has

been held by the Calcutta High Court that when the Collector who acts as the

agent of the Government in assessing the market value of the acquired land

has not relied upon particular sale transactions, it will not be open for the

Government to rely on such transactions in reference proceedings. We

however find that the aforesaid observations ought not to have been relied

upon by the Reference Court as the Honourable Supreme Court in Chimanlal

Hargovinddas (supra) has in paragraphs 3 and 4 of its decision held that the

Reference Court has to treat the proceedings under Section 18 of the said Act

as original proceedings before it and determine the market value afresh on

the basis of the material produced before it. The claimant is in the position

of a plaintiff who has to show that the price offered for his land is inadequate

on the basis of the material produced before the Court. The material placed

and proved by the other side can also be taken into account for this purpose.

Thus from the aforesaid decision it is clear that the Reference Court is

bound to take into consideration the entire material placed before it and

proved in accordance with law notwithstanding the fact that the Land

Acquisition Officer had not referred to that material while passing the award.

We therefore find that the Reference Court committed an error in refusing to J-FA-1004-17 12/19

take into consideration the sale instances placed on record by the acquiring

body only for the reason that said sale instances had not been considered by

the Land Acquisition Officer while making the award.

11. The material on record indicates that on 10/10/2003 joint

measurement of the land proposed to be acquired was undertaken. This fact

is evident as it has been stated in paragraph 2 of the award dated

06/06/2006 passed by the Land Acquisition Officer. The sale-deed at

Exhibit-64 dated 20/10/2003 is shortly after the aforesaid joint

measurement. This sale-deed has been executed by the claimants and a

small plot admeasuring 150 square meters at village Kopra, an adjoining

village was sold at the rate of Rs.1022/- per square meter. This sale-deed at

Exhibit-64 has been relied upon by the claimants for seeking enhancement.

In Jasti Rohini (supra) the Honourable Supreme Court has observed that the

reasonable method to determine the market value of the acquired land is on

the evidence of transactions of bona fide sales, but not on evidence of sale of

such land got up having had knowledge of the proposed acquisition. The

sale transaction must not only be proved but it must also be a bona fide

transaction. It is in this context it was urged by the learned counsel for the

Market Committee that the sale-deed at Exhibit-64 was got executed by the

claimants after getting knowledge of the proposed acquisition of their

agricultural land at Nandura in view of the joint measurement carried out.

J-FA-1004-17 13/19

This aspect would have to be kept in mind while determining the amount of

fair compensation for the acquired land.

12. Another aspect to be borne in mind is that the acquired land

admeasures 2H 32R. This land was not converted for non-agricultural use

and an application for its conversion at Exhibit-72 dated 20/09/2003 was

pending when the notification under Section 4 of the said Act came to be

issued. The Reference Court has proceeded to enhance the amount of

compensation by relying upon Exhibit-64 which pertains to village Kopra and

that sale transaction was with regard to 150 square meters of non-

agricultural land. In Ramkumari Devi (supra) the Honourable Supreme

Court has held that the burden to prove the prevailing market value of the

acquired land is on the owner and it is the duty of the Court to assess

reasonable compensation based on the evidence led by the parties. The acid

test which the Court has to adopt is that it has to sit in the armchair of a

prudent purchaser and consider whether a reasonable prudent purchaser in

the open market would offer the same price which the Court intends to fix as

market value of the acquired land. In that case while determining the

market value of 13.75 acres of land sale instances of small pieces of land

admeasuring about 1600 square feet were taken into consideration. It was

held that the Court had applied a wrong principle of law while determining

the compensation relying upon the sale instance of a small plot of land.

J-FA-1004-17 14/19

This is another relevant aspect that cannot be disregarded while assessing

the fair market value of the acquired land.

13. A perusal of the village map at Exhibit-73 indicating location of

various Gat numbers situated in village Nandura after consolidation reveals

that village Kopra shares a boundary with village Nandura. After Gat No.60

which is the acquired land there are various lands situated after which one

would reach the border of village Nandura so as to come in the area of

mouja Kopra. The Market Committee has sought to rely upon the sale

instances at Exhibits-104 and 105 which pertain to sale of agricultural land

from Gat No.68 of village Nandura itself. As can be seen from Exhibit-73 Gat

No.68 is nearer to Gat No.60 while village Kopra is at a distance from Gat

No.60. In other words, though sale instances of agricultural land from the

same village were available, the Reference Court on the specious plea that

these sale transactions were not referred to by the Land Acquisition Officer

in his award refused to consider the same. It is also material to note that

Gat Nos.60 and 68 are agricultural lands while the sale instance at Exhibit-64

relied upon by the Reference Court pertaining to village Kopra is a small plot

of non-agricultural land. We therefore find that when sale instances of

agricultural lands from the same village were available on record in the form

of Exhibits-104 and 105 there was no justification whatsoever to rely upon a

sale transaction of a small plot of non-agricultural land from the adjoining J-FA-1004-17 15/19

village. Moreover, that sale-deed at Exhibit-64 was executed after the joint

measurement of the proposed acquired land was undertaken by the

Authorities. As stated above when agricultural land admeasuring 2H 32R

was the subject matter of acquisition, it would not be prudent and

reasonable to determine its market value by considering the market value of

the small plot of land admeasuring 150 sq. meters that too situated in an

adjoining village. We may note that in a recent decision of the Honourable

Supreme Court in Civil Appeal Nos. 176 and 177 of 2022 (Union of India vs.

Premlata and others) decided on 06/04/2022, it has been reiterated that

small plot/parcels of land cannot offer same market value when a large tract

of land is purchased in open market by a willing and prudent purchaser.

Generally, sale instances with regard to small plots/parcels of land are not

comparable to a large tract of land for the purpose of determining the

amount of compensation.

For these reasons, we find that the Reference Court was not

justified in relying upon Exhibit 64 which is a sale deed dated 20/10/2003 of

a small plot of land admeasuring 150 square meters from the adjoining

village as a comparable sale instance while determining the market value of

the acquired land which is admeasuring 2 H 32 R.

14. Now the sale instances of agricultural land from village Nandura

itself being sale deeds dated 18/08/1999 of Gat Nos.58 and 68 can be taken J-FA-1004-17 16/19

into consideration as comparable sale instances for determining the fair

market value subject to necessary appreciation considering the passage of

time. As stated above Exhibit 104 is a sale deed dated 18/08/1999 of

agricultural land admeasuring 1 H 62 R for Rs.85,500/-. Exhibit 105 is

another sale deed of the same date of agricultural land admeasuring 1 H 77

R which was sold at Rs.93,000/-. The rate per hectare of both the aforesaid

lands comes to Rs.53,000/-. Since these sale deeds were dated 18/08/1999,

appreciation in the value of the land with the passage of time would have to

be considered. The normal rule prescribed for such appreciation is 10% of

the value for each year. Considering the evidence on record, we find that

besides standard appreciation, there is evidence on record to indicate non-

agricultural potentiality of surrounding lands in the vicinity. The claimants

herein had also sought such conversion for non-agriculture use prior to

issuance of the Notification under Section 4 of the said Act. The land

however remained agricultural land on 17/06/2004 when the Notification

under Section 4 came to be issued. For this reason, additional appreciation

of 10% per year is liable to be considered in the present case. If the rate per

hectare in 1999 was Rs.53,000/-, 20% appreciation for the first year would

come to Rs.10,600/-. The claimants would be entitled for similar

appreciation for the subsequent years on the appreciated value. For the

second year the appreciation would be Rs.12,720/-, for the third year it

would be Rs.15,264/-, for the fourth year it would be Rs.18,317/- and for J-FA-1004-17 17/19

the fifth year the appreciation would come to Rs.21,980/-. The total

appreciated value would be Rs.1,31,881/-. Taking an overall view of the

matter and considering the purpose of acquisition of land in question, in our

view an amount of Rs.1,35,000/- per hectare would be fair market value of

the acquired land on 17/06/2004 when compared to its value at Rs.53,000/-

hectare in 1999.

15. The reference Court committed an error in determining the

market value by referring to Exhibit 64 which was a sale deed of non-

agriculture plot of land admeasuring 150 square meters from adjoining

village Kopra. This sale transaction was executed by the claimants on

20/10/2003 shortly after the joint measurement of the acquired land was

conducted on 10/10/2003. If the market value of Rs.603/- per square meter

as determined by the Reference Court is taken into consideration the rate per

hectare comes to Rs.60,30,000/-. Thus, when the said market rate is

compared with the sale transactions dated 18/08/1999 of agricultural lands

from the same village, the great discrepancy in the market value becomes

quite obvious. Within a period of five years the appreciation in the prices of

lands in the same village would not rise more than sixty times. The sale

transactions brought on record by the acquired body were ignored by the

Reference Court only on the ground that those sale transactions did not find J-FA-1004-17 18/19

mention in the award passed by the Land Acquisition Officer. It is only on

that count that the Reference Court determined the market value on the

basis of square meters after considering the sale transaction of non-

agricultural land of 150 square meters. The report of the valuer examined at

Exhibit 77 has not been considered by the Reference Court and the claimants

have not challenged the same. After considering the ratio of the decisions

cited by the learned counsel we are satisfied that the market value of the

acquired land deserves to be fixed at Rs.1,35,000/- per hectare. For these

reasons, the determination of the market value of the acquired land by the

Reference Court is erroneous and same is liable to be set aside. The point as

framed is answered by holding that the Reference Court was not justified in

enhancing the compensation to the extent it did so without sufficient

supporting evidence.

16. Accordingly, the following order is passed:

(i) The judgment of the Reference Court in LAC No.127 of 2007

dated 03/05/2017 is modified. It is held that the claimants are entitled to

compensation for land admeasuring 2 H 32 R from Gat No. 60 Mouza

Nandura, Taluka Babhulgaon, District Yavatmal @ Rs.1,35,000/- per hectare

alongwith all statutory benefits.

              J-FA-1004-17                                                         19/19


             (ii)              First Appeal No.1004/2017 is partly allowed in aforesaid

             terms with no order as to costs.



                      (SMT. M.S.JAWALKAR, J.)       (A.S.CHANDURKAR, J.)



             Asmita/Andurkar




Digitally Signed byJAYANT S
ANDURKAR
Personal Assistant
Signing Date:
13.04.2022 17:47