Phira Ram And Ors. vs Union Of India
1994 Latest Caselaw 492 Del

JUDGMENT

Devinder Gupta, J.

(1) This judgment is meant to dispose of 22 appeals arising out of various awards made by the reference courts determining the amount of compensation payable for acquisition of the claimants' lands situated in village Gharoli, which were acquired for public purpose, namely, 'Dairy Colony in Shahdara' by virtue of notification dated 19th August, 1976 issued under Section 4 of the Land Acquisition Act, 1897 (hereinafter referred to (is the Ait.)

(2) 881 bigha 6 biswas of land was notified turn being acquired for the a fore mentioned public purpose at the behest of Delhi Municipal Corporation. Actual acquisition took place with respect of 873 bigha 9 biswas only for which Collector, Land Acquisition (ME), Delhi on 31.1.1979 made his award No.740/78-79. The Collector considered Rs.1,550.00 per bigha to be the fair and reasonable market value of the acquired land. finding compensation award to be inadequate, claimants sought references for determination of amount of compensation payable to them which were duly made.

(3) In 1.1 cases the reference courts by virtue of awards dated 30.7.1982, 31.8.1982, 29.9.1982, 30.9.1982 and 31.10.1982 determined the amount of compensation by enhancing the market value from Rs.l,550.00 to Rs.2,160.00 per bigha. These awards have given rise to Ii separate appeals being R.F.As. 72, 92, 93, 103, 111, 117, 122, 123, 127, 131 and 204 of 1983.

(4) By another set of awards also the reference courts enhanced the compensation by determining the market value of the acquired land as on the date of notification at Rs.9,400.00 per bigha for land classified as Chahi and at Rs.6,267.00 per bigha for land classified as Khaki in revenue records. These awards are dated 21.9,1984, 31.7.1985, 10.3.1987, 23.5.1987 and 30.3.1991 and have given rise to 11 appeals, namely, R.F.As. 152 to 156. 170/85, 127/86, 579/87, 74 & 75/88 and 360/91,

(5) The claimants in all the appeals have prayed for further enhancement in the amount of compensation urging that the market value of the land as on the date of notification und6r Section 4 of the Act ought to have been fixed at Rs.60.00 per sq. yard or at Rs.60,000.00 per higher. In some of cases, applications under Order 41 rule 27 Civil Procedure Code . has also been moved seeking permission for producing additional evidence. In the application for additional evidence, claimants are seeking reliance on some of the judgments of this court determining the market value of the lands situated in villages Dhalupura, Mandavali Fazalpur, Khureji Khas and Karkardooma including that of the Supreme Court of India.

(6) We have heard the learned counsel for the parties and have also gone through the records. The main submission of the learned counsel for the appellants is that the acquired land had tremendous potentiality being located in close proximity to villages Dhalupura, Mandavali Fazalpur and Khureji Khas for which by various awards market value of land was determined at Rs.8,064.00 per bigha and for Karkardooma it was fixed at Rs.9,000.00 per bigha. All these lands were acquired for public purpose, namely, for the Planned Development of Delhi by virtue of notification issued on 13.11.1959 under Section 4 of the Act. Considering the rising trend of the market values of land in and around Delhi from 1959 to 1976, claim of appellants is justified for award of compensation at Rs.60,000.00 per bigha. It is also submitted by them that by virtue of awards made on 17.11.1980 Additional District Judge, Delhi in two cases pertaining to the same village, namely, Gharoli, has determined the market value of land @ Rs.76,550.00 per bigha and for acquiring this land for Planned Development of Delhi notification under Section 4 of the Act was issued on 17.11.1980. This factor can also be taken note of in determining the market value of the acquired land as on the date of notification under Section 4, namely, 19.8.1976. Another submission made is that the reference courts were not right in such of the awards in which the market value of Chahi land was fixed at Rs.9,400.00 per bigha in making a reduction of 35% towards development expenses after having come to the conclusion that the average sale price as per the sale instances works out to Rs.l4,400.00 per bigha. Learned counsel for the respondent has tried to justify the awards by urging that the reference courts were right in arriving at the market value of the land by taking into consideration all the relevant factors.

(7) There cannot be any denial with the proposition nor with the settled principles in law that methods of valuation to be adopted in ascertaining the market value of the land as on the date of notification are: (i) opinion of experts; (ii) the price paid within a reasonable time in bonafide transactions of the purchase or sale of the land acquired or the land adjacent to the land acquired and possessing same advantages; and (iii) number of years purchase of actual or immediately prospective profits of land acquired.

(8) The aforementioned methods, however, do not preclude the court from taking into consideration any other special circumstances obtained in an appropriate case into consideration, since the object is to arrive as near as possible in an estimate of the market value. In arriving at a reasonable correct market value, it may be necessary to take even two or all those matters into account inasmuch as the exact valuation is not always possible as no two lands may be the same either in respect of the situation or the extent or the potentiality,, nor is it possible in all cases to have reliable material from which that valuation can be accurately determined.

(9) In the instant cases there are two sets of awards made by the reference courts. In one set of the awards market value has been determined at Rs.2,160.00 per bigha irrespective of the classification of land and in the second set of awards it has been determined at Rs.9,400.00 per bigha for Chahi (irrigated) and at Rs.6,267.00 per bigha for Khaki (unirrigated) land. Since notification under Section 4 and the purpose of acquisition is the same and the land is situated in the same village there is no reason why all the claimants should not be treated alike in the matter of payment of compensation in the absence of any circumstance on record to warrant a different treatment, more especially when the Collector, Land Acquisition did not make any distinction in various categories of land. In this view of the matter we will be noticing only the later awards of the reference courts in which market value has been determined at Rs.9,400.00 per bigha for Chahi land.

(10) It is the award of Shri S.N. Kapur, Additional District Judge, Delhi in Land Acquisition Case No.16/83 - Raghubir Singh Vs. Union of India decided on 16.1.1984 which has been made the basis for determining the market value at Rs.9,400.00 . Considerable evidence was led in that case and in other cases also which at the time of arguments was not relied upon by counsel for the appellants. We are referring to such evidence which has been relied upon by the reference court or has been adverted to during the course of arguments. In Land Acquisition Case No.16/83 five sale deeds have been proved as Ext. A-4 to A-8 and in Land Acquisition Case No.139/80, which has given rise to Rfa 155/85 the same have been proved as Exts. A-7 to A-1 1. In all these sale deeds vendor is the same, namely, one Shri Anil Khurana, son of Shri Anant Ram Khurana, who after purchasing a big chunk of land sold small plots to various vendees. All these sale deeds pertain to the sale of land in the same village which is the subject matter of the present appeals, namely, village Gharoli.

(11) Through sale deed Ext. A-4, 500 sq. yards of land was sold for Rs.6,000.00 on 24.1.1973 reflecting market value at Rs.l2,000.00 per bigha. Ext. A-5 is the sale deed dated 10.12.1971 by which 208 sq. yards of land was sold for a consideration of Rs.3,120.00 . The price works out at Rs.l5,000.00 per bigha. Ext. A-6 is the sale deed dated 8.8.1972 by which 100 sq. yds. of land was sold for Rs.2,340.00 reflecting market value of the land at Rs.23,400.00 per bigha. Ext. A-7 is the sale deed for 200 sq. yards of land for Rs.3,240.00 . This sale was made on 24.6.1975 and reflects market value at Rs.l6,200.00 per bigha. Ext. A-8 is the sale deed dated 20.4.1975 for 500 sq. yards of land at a consideration of Rs.6,700.00 thereby reflecting market value at Rs.l3,400.00 .

(12) The reference court discarded the latest sale transaction dated 24.6.1975 evidenced by document Ext. A-7 but placed reliance upon a sale transaction made two months prior thereto, namely, Ext. A-8 in which the market value reflected is Rs.l3,400.00 per bigha. Considering the time gap from the date of the sale till the date of preliminary notification he allowed an appreciation of 6% and arrived at a figure of Rs.l4,470.00 which he considered to be the average fair and likely market value of small plots of land in village Gharoli. It was also noticed by him that the vendor Shri Anil Khurana had earlier purchased the property in bulk and had made various sales of small plots of land and naturally would have made considerable profit and thus the price realised by him would also include his profits. Amount must have been spent by him in development and also in leaving passages etc. Thus after making deduction of 35% towards development charges, the reference court held Rs.9,400.00 to be the fair market value of Chahi (irrigated) land. He further made a deduction of l/3rd and held Rs.6,267.00 to be the market value for inferior land, namely. Khaki land.

(13) It is conceded at the Bar that there is no award made either by this court or by the apex court with respect to the market value of the lands situated in village Gharoli. Reliance is placed only on the judgments of this court in which Rs.8,064.00 per bigha has been assessed as the market value of land situated in Dhalupura, Mandavali Fazalpur and Khureji Khas which were acquired by virtue of notification dated 13.11.1959 and on the judgment of the Supreme Court in which Rs.9,000.00 has been assessed as the market value of the land situated in Karkardooma under the same notification dated 13.11.1959. Decision of the apex court in Gokal Vs. State of Haryana has been pressed into service by submitting that since village Gharoli is located in close proximity to the aforementioned four villages and 'lands are similarly situated therefore Rs.9,400.00 cannot be considered to be the fair market value in the year 1976 (after 7 years of earlier acquisition).

(14) GOKAL'S case (supra) pertains to acquisition of lands in one particular village adjoining Delhi-Gurgaon road which were .subject matter of five different notifications. Under the first notification of 31.10.1974 the Apex court had on 01.04.1982 upheld the market value of the land at Rs.l7.50 per sq. yard Later on some other lands ih the same village was acquired through notifications dated 20.3.1975, 26.5.1976, 3.9.1976 and 6.1.1978. Assuming that there might have been an increase in the prices of the lands between 1974 and 1978, the court fixed different market rates for each acquisition, namely, at Rs.20, 25, 26 and 30 per sq. yards.

(15) On the analogy of this judgment it is contended that for the time gap, namely, 13.11.1959 to 1976 definitely enhancement is called for in the same proportion in which it was allowed by the apex court.

(16) We are afraid that this submission of the learned counsel for the appellants cannot be accepted by us in the absence of any evidence on record to show that the lands situated in village Dhalupura, Mandavali Fazalpur, Khureji Khas and Karkardooma were similar situated to the lands in village Gharoli, which is the subject matter of these appeals. Had the earlier determination of the market value in the awards been with respect to land situated in village Gharoli, the ratio of decision in Gobi!'s, case (supra) would apply with all force but the ratio cannot be extended to a situation where there is no evidence about similarity in the location or potentiality of the land.

(17) On the submission that no deduction ought to have been made for development since the acquired land was situated in close proximity of developing areas of Delhi which had all the facilities available at the time of acquisition. We also cannot accept this submission in the absence of any evidence on record to that effect.

(18) We need not make reference to a number of decisions since it is almost a settled position in law that prices fetched for similar lands with similar advantages and potentialities under bonafide transactions of sale at or about the time of notification under Section 4 of the Act are the usual and indeed the best evidences of market value. The other methods of valuation are resorted to when the evidence of sales of similar lands is not available. Reference may be made to one of the decision of the apex court in Administrator General of West Bengal Vs. Collector, Varanasi .

(19) The prices fetched for small plots, however, cannot form safe basi for valuation of large tracts of land as the two are not comparable properties. However, in certain cases such transactions may be taken into consideration for determining the market value of large properties on the basis of sale transactions for smaller properties, after making deductions for the purpose of development etc. The reason for making deductions have been noticed in number of decisions,

(20) In Chimanlal Hargovinddas Vs. Special Land Acquisition Officer, Poona and another it was noticed that while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a lay out, carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers and the hazards of an entrepreneur. The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approx . between 20% to 50% to account for land required to be set apart for carving out and plotting out small plots. The discounting will to some extent also depend on whether it is a rural area or urban area, whether building activity is picking up, and whether waiting period during which the capital of the entrepreneur would be locked up would be longer or shorter and the other attending hazards.

(21) Learned counsel for the appellants placed reliance upon a decision in Bhagwathula Samanna and others Vs. Special Tahsildar and Land Acquisition Officer, Visakhapatnam Municipality in support of their submission that no deduction ought to have been made since the land is situated in close proximity of Dhalupura which was already developed. The answer to the submission of the learned counsel for the appellants is itself given in the said decision in. paras 11 and 13 in the following words:

"II.The principle of deduction in the land value covered by the comparable sale is thus adopted in order to arrive at the market value of the acquired land. In applying the principle it is necessary to consider all relevant facts. It is not the extent of the area covered under the acquisition, the only relevant factor. Even in the vast area there may be land which is fully developed having all amenities and situated in an advantageous position. If smaller area within the large tract is already developed and suitable for building purposes and have in its vicinity roads, drainage, electricity, communications etc. then the principle of deduction simply for the reason that it is part of the large tract acquired, may not be justified. "

"13.The proposition that large area of land cannot possibly fetch a price at the same rate at which small plots are sold is not absolute proposition and in given circumstances it would be permissible to take into account the price fetched by the small plots of land. If the larger tract of land because of advantageous position is capable of being used for the purpose for which the smaller plots are used and is also situated in a developed area with little or no requirement of further development, the principle of deduction of the value for purpose of comparison is not warranted. With regard to the nature of the plots involved in these two cases, it has been satisfactorily shown on the evidence on record that the land has facilities of road and other amenities and is adjacent to a developed colony and in such circumstances it is possible to utilise the entire area in question as house sites. In respect of the land acquired for the road, the same advantages are available and it did not require any further development. "

(22) In order to take benefit of the proposition laid down in Bhagwathula Samanna's case that no deductions ought to have been made it was necessary for the appellants to have led evidence on record that the acquired land was fully developed having all amenities and was situated in an advantageous position and that no development charges were required for the purpose of carving out road, drainage, electricity, communications etc. or that such facilities were already available. In the absence of the evidence to this effect by relying upon the ratio in Chimanlal Hargovinddas's case (supra) we consider that the reference court was right in having made a deduction of 35% towards development charges which we also consider to be quite reasonable in the facts and circumstances of the case.

(23) The contention of learned counsel for the appellants that the awards made with respect of lands which were acquired in 1980 in this very village in which market value has been assessed at Rs.76,550.00 deserves to be taken note of. We are afraid that such a submission also cannot be accepted. Determination of the market value of the property has to be with reference to the date of preliminary notification under Section 4 of the Land Acquisition Act which in this case was 19.8.1976. Obviously when land came to be acquired for establishing a Dairy Colony in Shahdara by virtue of notification dated 19.8.1976 a lot of developments must have taken place thereafter in and around the village and there will be tremendous increase in prices, thereafter. This development activity taking place will definitely affect the market value of the land after a period of four years when land in this very village was acquired by virtue of notification dated 17.11.1980 for the purpose of Planned Development of Delhi. Thus the determination of market value in subsequent award will not be a relevant factor to be taken into consideration and will not be a relevant piece of evidence in determining the market value of land which was subject matter of earlier notification.

(24) We may notice that except by tendering the copies of judgments and awards and examining one or two witnesses, no effort was made by the appellants in leading any evidence of comparing the lands situated in village Gharoli with the lands situated in the alleged adjacent villages of Dhalupura, Mandavali Fazalpur, Khureji Khas and Karkardooma. In the absence of any such evidence it will not be permissible for us to place reliance upon the awards given with respect to the said villages and the same also will not be relevant pieces of evidence for determining market value of the land. Relevant evidence, as noticed by us, would be the prices fetched for lands similar to acquired lands with similar advantages and potentialities at or about the date of notification under Section 4, which have rightly been taken note of by the reference court, namely, Ext. A-4 to A-8 but the reference court was not right in excluding sale deed Ext. A-7. No cogent reason has been assigned in excluding sale transaction which is dated 24.6.1975. In case all the sale transactions are taken together, the average of sale price works out to Rs.16,000.00 per bigha. In case the latest sale transaction evidence by Ext. A-7 dated 24.6.1975 is taken into consideration the sale price reflected therein is at the rate of Rs.16,200.00 per bigha. The reference court relied on the earlier sale transactions evidenced by Ext. A/8 which was at the rate of Rs.l3,400.00 per bigha. In our opinion instead of taking the earlier sale transaction to be the basis, reference court ought to have taken the latest sale deed as the basis or ought to have taken the average of all the sale transactions which, as noticed above, were by one single individual in favor of different vendees. Thus, taking the base figure of Rs.l6,000.00 per bigha as on 24.6.1975 and allowing 6% appreciation thereupon till date of notification dated 19.8.1976, it can safely be assumed that the retail price as distinguished from the wholesale price of plots of land in the village was Rs.17,120.00 per bigha on the date of preliminary notification. After deducting 35% towards development charges, the amount per bigha works out to Rs-11,984. Rounding up this figure to Rs.12,000.00 , we hold that Rs.12,000.00 per bigha would be the fair market value of the acquired land to which the appellants are entitled.

(25) The reference court was also not right in fixing two separate market value one for Chahi land and the other for Khaki land - which are the classifications of lands for revenue purpose with reference to the use of property for agricultural. The reference court determined the market value of the land not with reference to agricultural purposes but considering its potentiality for construction activity by comparing it with smaller plots of land which were the subject matter of sale transactions which had been sold for building purposes. As such market value ought to have been fixed at a flat rate irrespective of different classification for revenue purposes. Thus, the appellants will be entitled to market value at the rate of Rs.12,000.00 per bigha irrespective of classification of the land as per the revenue record.

(26) It is made clear that in addition to the market value of the land at the rate of Rs.12,000.00 per bigha the appellants will also be entitled to an amount calculated @ 12% p.a. on such market value for the period commencing on and from the date of publication .of notification under Section 4(1) of the Act in respect of such land to the date of the award made by the Collector or the date of taking possession of the land, whichever is earlier. In addition to the market value of the land, as above provided, the appellants will also be entitled to 30% on such market value towards compulsory nature of acquisition and interest at the rate of 9% p.a. from the date on which the Collector took possession of the land to the date of payment of such excess amount as might have been awarded by the Additional District Judge on a reference under Section 18 of the Act over and above that given by the Collector in his award under Section 11 of the Act. If such excess or any part thereof has been paid into court, after the date of expiry of period of one year, from the date when the possession was taken, the appellants will also be entitled to interest @ 15% p.a. from the date of expiry of the period of one year on the amount of excess or part thereof which had not been paid into court. The appellants will also be entitled to interest @ 9% p.a. for the period of one year from the date of taking over of possession and @ 15% thereafter till the enhanced amount of compensation as per our judgment.

(27) The applications for additional evidence, in view of the above discussion stands disposed of.

(28) In view of the above, the R.F.As. are allowed with proportionate costs.