Citation : 2024 Latest Caselaw 1077 Guj
Judgement Date : 8 February, 2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 3053 of 2017
With
R/FIRST APPEAL NO. 2639 of 2017
With
R/CROSS OBJECTION NO. 75 of 2017
In
R/FIRST APPEAL NO. 3053 of 2017
With
R/CROSS OBJECTION NO. 78 of 2017
In
R/FIRST APPEAL NO. 2639 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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EXECUTIVE ENGINEER(CONSTRUCTION)
Versus
SHANTABEN W/O NAGINBHAI PATEL & 4 other(s)
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Appearance:
MR VIRAL J DAVE(5751) for the Appellant(s) No. 1
MR.AAKASH CHHAYA, AGP for the Defendant(s) No. 4,5
MR KM SHETH(838) for the Defendant(s) No. 1,2,3
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
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HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 08/02/2024
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV)
1. These First Appeals and the Cross Objections
have been filed by the Executive Engineer -
Gujarat Electricity Board and the original
claimants respectively or being aggrieved by the
common judgement and award passed by the
learned Principal Senior Civil Judge, Ankleshwar,
in LAR No.192 of 2013 and LAR No.191 of 2013
(Main) dated 30.12.2016.
2. Facts in brief are as under:
2.1 The original claimants before the Reference
Court were owners and occupiers of land
situated at Village:Ankleshwar, Ta:Ankleshwar,
District:Bharuch bearing block No.766
admeasuring 8545 square meters and bearing
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plot no.778 admeasuring 9409 + 202 square
meters respectively. The lands were acquired by
the Gujarat Electricity Board, the original
appellants for the purpose of construction of 66
KV sub-station and staff-quarters. Notification
under Section 4 of the Land Acquisition Act was
published on 27.11.1997 and under Section 6 of
the Act was published on 04.06.1998. The Land
Acquisition Officer by an award dated 22.03.1999
awarded a compensation at the rate of Rs.1639/-
per ARE (Rs.16.39 per square meter) in LAQ
Case No.7 of 1997. Aggrieved by the
insufficiency of the amounts awarded, the
original claimants preferred Land Reference
Cases under Section 18 before the Reference
Court, Bharuch, by way of filing Reference
Applications registered as LAR No.191 of 2013
and 192 of 2013, claiming that they were entitled
to an amount of compensation at the rate of
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Rs.10,000/- per ARE. Thereafter the claimants
gave an amendment application at Exh.34 and
claimed that they should be awarded an
additional compensation at the rate of
Rs.20,077/- per ARE (Rs.200.77 per square
meter). The amendment application was
granted. The Reference Court partly allowed the
Reference Cases by determining the
compensation at the rate of Rs.200.77 per square
meter as the additional amount of compensation
with statutory benefits available under the
provisions of the Land Acquisition Act by the
judgement and order dated 30.12.2016. The
appellant which is the acquiring body has
challenged the judgement and award by the
aforesaid appeals challenging the award and the
opponents have filed cross objections praying
that the Reference Court ought to have awarded
Rs.220.74 per square meter as additional
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compensation instead of awarding Rs.200.77 per
square meter as the additional amount of
compensation.
3. Mr.Viral Dave learned advocate appearing for
the acquiring body would submit that the awards
of the Land Reference Court granting the
additional compensation is erroneous. He would
submit that the learned Judge by relying on an
award at Exh.53 of the year 1986 had committed
a grave error inasmuch as the lands are situated
at different locations as compared to the lands in
question which were situated in the interior part
of the village.
3.1 Mr.Dave would submit that the learned
Judge committed a grave error by relying on the
evidence at Exh.53 i.e. the judgement of the
Reference Court passed in LAR Case No.361 of
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1998 to 364 of 1998. He would submit that in
the case and the award which was relied upon,
the notifications in question were of the year
1986 and 1987 respectively i.e. the notification
under Section 4 of the Act on 11.12.1986 and
that under Section 6 was on 02.07.1987. He
would submit that more than 10 years have gone
by and therefore, ought not to have been relied
upon by the Reference Court in enhancing the
compensation to an amount of Rs.200.77 per
square meter.
3.2 Mr.Dave would submit that the difference
between the two notifications was of 10 years 11
months and 16 days and therefore, the learned
Reference Court had committed an error of
granting an increase on account of 10% of each
year at a flat rate when the decisions are to the
contrary.
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3.3 Mr.Dave learned counsel for the appellant
would rely on the decision of the Supreme Court
in the case of The General Manager, Oil &
Natural Gas Corporation Ltd. v. Rameshbhai
Jivanbhai Patel and Anr. reported in 2008
(14) SCC 745 and submit that the land was in
the rural areas, the prospect of development was
less, that the increase in the market value to the
extent of 10% was erroneously arrived at and the
corresponding increase as per the decision of the
Supreme Court would only be around half of it
i.e. around 5% to 7% per annum. He would
submit that as recorded by the Supreme Court in
the case of Rameshbhai Jivanbhai Patel and
Anr. (supra) it was unsafe and unreliable
standard to rely on a notification which was more
than 10 years old and the gap is large. He would
therefore submit that the award of the Reference
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Court enhancing the amounts on the
corresponding increase at the rate of 10% is
misconceived and the appeals therefore ought to
be allowed.
4. Mr.Kamlesh Sheth learned counsel appearing for
the original claimant who has also filed Cross
Objections, would make the following
submissions:
4.1 He would submit that it is evident from the
deposition of the original claimant one
Dahyabhai Hirabhai Patel who was examined at
Exh.47 that the lands were at
Village:Ankleshwar. A national highway was
passing through. The village had the facilities of
the primary school, higher secondary school, ITI
college etc. and since the land was acquired for
the purposes of construction of staff quarters, it
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was to be used for residential and commercial
purposes and therefore the increase in the
market value in semi-urban areas upto 10% to
15% per annum. Cumulative effect had to be
applied.
4.2 Mr.Sheth would submit that while
appreciating the evidence at Exh.53 and relying
on the previous award which was produced
before the Reference Court to determine the
market value of the acquired land, it has to be
noted that in the award in question also, the land
was acquired for agricultural purposes, the land
was also put to non-agricultural use for
construction of an entrance road on Amla-Khadi
bridge and taking into consideration even a gap
of 10 years, judicial notice could be taken for
considering 10% increase per year at a
cumulative effect which would entitle the
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claimants to claim compensation at Rs.300.37
per square meter as additional amount of
compensation which the reference Court has
committed an error and considered only 10%
increase per year as an additional compensation
at a flat rate.
4.3 Mr.Kamlesh Sheth learned counsel for the
original claimants and cross-objectors would rely
on the decisions of the Supreme Court and
submit that there could be no gap on the
maximum rate of compensation which can be
awarded by the Court and he would therefore
rely on the decisions in the case of Bhimasha v.
Special Land Acquisition Officer and Anr.
reported in 2008 (10) SCC 797, in case of
Ashok Kumar & Anr. Etc. v. State of Haryana
reported in 2016 4 SCC 544, in case of
Narendra & ors. v. State of Uttar Pradesh &
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ors. reported in 2017 (3) GLH 311.
4.4 Mr.Sheth would further submit that
considering 10% increase per year at the flat
rate even otherwise the claimants were entitled
to an additional compensation at Rs.221.15
instead of Rs.200.77 per square meter awarded
by the Reference Court and the Reference Court
committed an error in restricting the
compensation only on account of observing that
since the claim of the claimants was restricted to
Rs.200/-, it could not award an additional
compensation though admittedly the Reference
Court had opined that the claimants were
entitled to the enhanced compensation of
Rs.220/-. The Reference Court therefore had
committed a grave error in restricting the
compensation of an additional amount to
Rs.200.77 only.
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4.5 Mr.Kamlesh Sheth learned counsel
appearing for the original claimant would submit
that it has been held in the series of judgements
that in the normal circumstances, increase in
price per year of the land are to be considered at
10%. He would rely on the following citations:
(I) In case of Sardar Jogendra Singh (dead)
by LRS. v. State of Uttar Pradesh & Another
reported in 2018 (17) SCC 133
(II) In case of Kanjibhai Ashabhai & others v.
Special Land Acquisition Officer rendered in
First Appeal No.1377 of 2007
(III) In case of Special Land Acquisition
Officer & others v. Udesang Abhesang
and allied matters
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(IV) In case of Deputy Executive Engineer
(General Manager) v. Harisinh Laxmansinh
Vaghela & 1 reported in 2017 (3) GLR 2056
(V) In case of Huchanagouda v. Assistant
Commissioner and Land Acquisition Officer
and Anr. reported in 2020 (19) SCC 236
(VI) In case of Ramesh Kumar v. Bhatinda
Integrated Cooperative Cotton Spinning Mill
and Ors. reported in 2022 (1) SCC 284
4.6 Distinguishing the judgement of the
Supreme Court in case of Rameshbhai
Jivanbhai Patel and Anr. (supra), he would
submit that subsequent decisions of the Supreme
Court have interpreted the judgements and taken
notice of the fact that it is appropriate to give a
10% increase even in the case where there is a
gap of 10%. In support of his submission he
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would also rely on the latest decision of the
Supreme Court in case of The Central
Warehousing Corporation v. Thakur Dwara
Kalan UL-MARUF BARAGLAN WALA (DEAD)
& ORS. arising out of SLP (C) Nos.30817-
30818 of 2016.
5. Having considered the submissions made by the
learned counsel for the respective parties and
having perused the awards of the Reference
Court, and having also perused the award in LAR
Case No.361 of 1988 dated 09.02.2012, perusal
of the awards in comparison would indicate that
for the lands in the same vicinity, which were
acquired by the award Exh.53 for constructing
an entrance road, the lands in question and the
comparable instance was considered by the
Reference Court and in the opinion of this Court,
rightly so.
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5.1 However, when the findings of the
Reference Court in the impugned award is
considered, the Reference Court while relying on
a decision in the case of Special Land
Acquisition Officer, Bharuch v. Motibhai
Mohanbhai reported in 1997 (2) GLH 773,
considering the similar land acquired in the
adjoining village, increased the amount by 10%
at a flat rate in light of the guidelines of the
decision. The reference Court came to the
conclusion that though the difference between
the two notifications was 10 years 11 months and
16 days, the increase would be to an amount of
Rs.220.74 paisa. However, since the claimants
had demanded Rs.200.77 per square meter, the
Court cannot grant such amount grater than the
one demanded by the claimants and therefore
the reference court fixed the market value of the
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acquired land of Rs.200.77 as demanded by the
claimants.
6. At this stage, when we may peruse the decision
of the Supreme Court relied upon by Mr.Viral
Dave in the case of Rameshbhai Jivanbhai
Patel and Anr. (supra), what is evident from
reading the judgement is that, though the
Supreme Court has held that it is unsafe to
consider an award of a sale instance of a
neighboring lands where the gap is of large
number of years and therefore, it is not possible
to award an enhanced amount of 10% and it
would be safe to give an amount of 5% to 7.5%,
perusal of that decision would indicate that
before the Supreme Court, it was a case where
as comparable to the present case, the lands in
Ankleshwar which are a matter of reference had
much more facilities and therefore, enhancement
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at the rate of 10% could not be faulted. Even
otherwise, we would agree with the submission
of the learned counsel for the original claimants/
cross-objectors that the observations of the
Hon'ble Supreme Court in the case of
Rameshbhai Jivanbhai Patel and Anr. (supra)
was in background of the fact that in the rural
areas there is a less prospect of development and
as compared to urban and semi-urban areas
where the development is faster the escalation in
market price is much higher. It was on this
account that the Supreme Court thought it fit
that it would be safe to enhance the amount to
about 5% to 7.5% per annum. As far as the
present case on hand is concerned, it is an
admitted fact that the lands in question are in
semi urban area and when we consider the
decision of the Supreme Court relied upon by
Mr.Viral Dave, we also need to consider the fact
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that the decision in the case of Rameshbhai
Jivanbhai Patel and Anr. (supra) has also been
considered in the subsequent decisions of the
Supreme Court. In the case of Sardar Jogendra
Singh (dead) by LRS. (supra), in para 5 while
considering the decision in case of Rameshbhai
Jivanbhai Patel and Anr. (supra), the Supreme
Court has considered it to be safe to award a
quantum increase of 10% per annum. Paras 5
and 6 of the decision read as under:
"5. The appellant challenged the said award of the Reference Court before the High Court. The High Court dismissed the appeals holding that the determination of the market value by the Reference Court did not call for interference.
6. The appellant urged the following two contentions in support of the appeals against the said judgment:
(i) Exhibit 15 and Exhibit 16 did not relate to the Ijapura village, but related to other villages, namely neighbouring Santhal and far away Chalsana (at a distance of 4 kms).
The market value of lands in those villages
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cannot furnish the basis for determining the market value in regard to the acquired lands situated at Ijapura.
(ii) Even if Exhibit 15 and 16 could validly be the basis for determining the market value of lands at Ijapura, the Reference Court and High Court committed three errors in calculating the increase: (a) in applying an annual increase at a high rate of 10% per annum; (b) in calculating the annual increase cumulatively instead of at a flat rate; and (c) in calculating the increase for a period of six and half years instead of for five years.
The appellant submitted that even if Exhibit 15 was to be the basis, having regard to the date of relied-on acquisition under Exhibit 15 (6.1.1987) and date of present acquisition of the Ijapura lands (15.9.1992), the increase ought to have been calculated for only five years; that the percentage of increase should not have been more than a flat rate of 5% per annum; that therefore, the increase ought to have been only Rs. 2.50 for 5 years and the market value of Santhal lands in 1992 would have been Rs. 12.50 per sq.m. and not Rs. 19.10; and that if Rs. 2.00 was deducted for the distance factor, as was done by the Reference Court, the market price would be only Rs. 10.50 per sq.m. and not Rs. 17.10 per sq.m. Whether reliance on Exhibits 15 and 16 erroneous-"
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6.1 Even in the case of Harisinh Laxmansinh
Vaghela & 1 (supra), a Division Bench of this
Court while considering the case of
Rameshbhai Jivanbhai Patel and Anr. (supra)
has in paras 8 to 11 held as under:
"8. The contention of appellant is that even if Exhibit P15 should be the basis, in the absence of any specific evidence regarding increase in prices between 1987 and 1992, the annual increase could not be assumed to be 10% per year.
9. On the other hand, the learned counsel for the respondents/claimants submitted that the rate of escalation in market value at the relevant time was in the range of 10% to 15% per annum. He relied on the decisions of this Court in Ranjit Singh V/s. Union Territory of Chandigarh, 1992 4 SCC 659, and Land Acquisition Officer and Revenue Divisional Officer V/s. Ramanjulu & Ors., 2005 9 SCC 594 wherein this Court had accepted an escalation of ten per cent per annum, and the decision in Krishi Utpadan Mandi Samiti Sahaswom V/s. Bipin Kumar, 2004 2 SCC 283 where this Court had accepted an escalation of 15% per annum. He, therefore, submitted that escalation at
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the rate of 10 per cent adopted by the Reference Court and approved by the High Court is a reasonable and correct standard to be applied.
10. We have examined the facts of the three decisions relied on by the respondents. They all related to acquisitions of lands in urban or semi-urban areas. Ranjit Singh related to acquisition for development of Sector 41 of Chandigarh, Ramanjulu related to acquisition of the third phase of an existing and established industrial estate in an urban area. Bipin Kumar related to an acquisition of lands adjoining Badaun-Delhi Highway in an semi-urban area where building construction activity was going on all around the acquired lands.
11. Primarily, the increase in land prices depends on four factors - situation of the land, nature of development in surrounding area, availability of land for development in the area, and the demand for land in the area. In rural areas unless there is any prospect of development in the vicinity, increase in prices would be slow, steady and gradual, without any sudden spurts or jumps. On the other hand, in urban or semi- urban areas, where the development is faster, where the demand for land is high and where there is construction activity all around, the escalation in market price is at a much higher rate, as compared to rural areas. In some pockets in big cities, due to rapid development and high demand for
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land, the escalations in prices have touched even 30% to 50% or more per year, during the nineties. On the other extreme, in remote rural areas where there was no chance of any development and hardly any buyers, the prices stagnated for years or rose marginally at a nominal rate of 1% or 2% per annum. There is thus a significant difference in increases in market value of lands in urban/semi-urban areas and increases in market value of lands in the rural areas. Therefore if the increase in market value in urban/semi-urban areas is about 10% to 15% per annum, the corresponding increases in rural areas would at best be only around half of it, that is about 5% to 7.5% per annum. This rule of thumb refers to the general trend in the nineties, to be adopted in the absence of clear and specific evidence relating to increase in prices. Where there are special reasons for applying a higher rate of increase, or any specific evidence relating to the actual increase in prices, then the increase to be applied would depend upon the same."
The Court in the facts of that case also approved
10% increase in the award of compensation.
6.2 In the case of Ramesh Kumar (supra)
reiterating the decision in the case of
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Rameshbhai Jivanbhai Patel (supra) the
Supreme Court in para 6.3 to 6.5 has held as
under:
"6.3 Now so far as the submission on behalf of the land owners that while considering the annual increase at the rate of 12%, the High Court ought to have applied the cumulative rate and reliance placed upon the decision of this Court in Rameshbhai Jivanbhai Patel (Supra) and in the case of Ashok Kumar (Supra) are concerned, it is true that as held by this Court in aforesaid two decisions increase in the market value should be at a cumulative rate and not at a flat rate. In the case of Rameshbhai Jivanbhai Patel (Supra) in paragraph 18, it is specifically observed and held that when market value is sought to be ascertained with reference to transactions which took place before the acquisition, the law adopted is to collect the year to year increase. It is further observed and held that as the percentage of increase is always with reference to the previous year's market value, the appropriate method is to adopt the increase cumulatively and not applying a flat rate. However, at the same time it is also observed and held in the said decision that it is reasonably safe to determine the market value by providing appropriate escalation over the approved market value of nearby lands in the previous years, when relied on sale transactions/acquisitions precede the subject acquisition by only a
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few years, i.e., upto 45 years. It is further observed in the said decision in para 15 that beyond that it may be unsafe, even if it relates to a neighbouring land. In para 15 it is observed and held as under:
"Normally, recourse is taken to the mode of determining the market value by providing appropriate escalation over the proved market value of nearby lands in previous years (as evidenced by sale transactions or acquisition), where there is no evidence of any contemporaneous sale transactions or acquisitions of comparable lands in the neighbourhood. The said method is reasonably safe where the reliedonsale transactions/acquisitions precedes the subject acquisition by only a few years, that is upto four to five years. Beyond that it may be unsafe, even if it relates to a neighbouring land. What may be a reliable standard if the gap is only a few years, may become unsafe and unreliable standard where the gap is larger. For example, for determining the market value of a land acquired in 1992, adopting the annual increase method with reference to a sale or acquisition in 1970 or 1980 may have many pitfalls. This is because, over the course of years, the `rate' of annual increase may itself undergo drastic change apart from the likelihood of occurrence of varying periods of stagnation in prices or sudden spurts in prices affecting the very standard of increase. In the present case both, the Reference Court as well as the High Court, have determined the value of the land considering the Sale Deed dated 24.05.1979 which is more than 9 years before the notification of the acquisition. Therefore, considering the observations made by this Court in para 15 in the case of Rameshbhai Jivanbhai Patel (Supra) reproduced hereinabove and considering the fact that time gap between the sale deed relied upon and the date of notification of acquisition is more than 9 years, the courts below ought to have been very cautious in relying upon the Sale Deed dated 24.05.1979. Be that it may and assuming that the Sale Deed dated 24.05.1979 was the best evidence available to determine the value of land acquired in that case also taking annual increase at the rate of 12% is not justified. We are of the opinion that, in the facts and circumstances of the case the annual increase/escalation ought to have been at the rate of 10% maximum. Even otherwise, it is required to be noted that State of Punjab suffered due to militancy from 1979 onwards till 1992 and because of that
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the prices would have crashed. Therefore, to grant the escalation/price rise at the rate of 12% would not be justified at all. After considering the case of Rameshbhai Jivanbhai Patel (Supra), it is observed and held by this Court in the case of Lal Chand (Supra) that even if the transaction is 2 to 3 years prior to the acquisition, the Court should, before adopting a standard escalation satisfy itself that there were no adverse circumstances. It is further observed and held that the question is therefore, necessary before increasing the price with reference to the old transactions. Therefore, assuming that the appellants are right in submitting that the increase in land value should have been adopted on cumulative basis, in the peculiar facts and circumstances of the case noted hereinabove, we see no reason to interfere with the impugned judgment and order passed by the High Court.
6.4 Now so far as the submission on behalf of the appellants of not taking into consideration the other sale deeds, it is required to be noted that those sale deeds are with respect to small portions of land and thereafter rightly discarded.
6.5 Now so far as the deduction at the rate of 15% towards the development charges, it also does not call for any interference of this Court considering the fact that the land in question at the relevant time was an agricultural land. However, taking into consideration the fact that the sale instance dated 24.07.1979 relied upon was a quite big chunk of land and the location of the acquired land and the land was acquired for spinning mill, the High Court has rightly adopted 15% cut, which in the facts and circumstances of the case is not required to be interfered with."
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6.3 Reading the aforesaid decisions indicate
that though the gap between the award which
was relied upon was an instance of sale which
was 9 years, the Court was of the opinion that in
the facts and circumstances of the case, the
annual increase ought to have been at the rate of
10% of the maximum.
6.4 Having considered therefore the
submissions made by the learned counsel for the
respective parties and as per the statement made
in the cross-objections and to which Mr.Sheth
has agreed to, the claimants though had claimed
an enhanced amount of Rs.300/- by way of the
submission, their submission was that even the
reference Court admitted that the claimants
were entitled to an amount of Rs.220.74 per
square meter instead of Rs.200.77 per square
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meter and therefore, if the cross-objections were
allowed and the claimants were held entitled to
Rs.220.74 per square meter as an additional
amount of compensation instead of Rs.200.77 per
square meters, their cross-objections would be
considered in light of such fact, as claimants had
only restricted their claim to Rs.220.74 as
additional amount of compensation based on
which the Court fees had been paid.
6.5 What is therefore apparent is that the
perusal of the award of the Reference Court
would indicate that it was erroneous on the part
of the Reference Court to restrict the claim to an
additional amount of Rs.200.77 per square
meters though having admitted that the
claimants were entitled to an additional amount
of Rs.220.74 per square meters and only because
the claim was restricted to that amount, the Land
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Reference Court committed an error in not
enhancing the amount to the additional claim of
Rs.220.74 per square meters.
6.6 In light of the judgements of this Court as
well as that of the Supreme Court interpreting
the decision in case of Rameshbhai Jivanbhai
Patel and Anr. (supra) giving a statement of law
that it will not be erroneous even if the gap is
large to award a 10% flat increase in the
compensation, we dismiss the First appeals of
the acquiring body, and partly allow the cross-
objections of the original claimants and hold that
the original claimants are entitled to Rs.220.74
per square meter instead of Rs.200.77 per
square meter awarded by the Reference court
and accordingly in addition to the awarded
amount of Rs.200.77 per square meter, the
claimants are entitled to an additional amount of
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Rs.20/- per square meter over and above the
amount awarded by the Reference Court and the
Land Acquisition Officer. Accordingly, the
judgement and order passed by the Reference
Court is modified and it is held that the present
claimants/cross-objectors are entitled to
Rs.220.74 per square meter instead of Rs.200.77
per square meter on the basis of the evidence led
before the Reference Court and also on the basis
of the decisions relied thereupon. The rest of the
award on the amount of interest and statutory
benefits shall remain the same.
7. Appeals dismissed, cross-objections partly
allowed.
(BIREN VAISHNAV, J)
(NISHA M. THAKORE,J) ANKIT SHAH
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