Himachal Pradesh High Court
State Of Himachal Pradesh And ... vs Ramesh Chand And Others on 3 July, 2023
Bench: Jyotsna Rewal Dua
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
R.F.A. No. : 149 of 2015
Reserved on : 23.06.2023
Date of decision : 03.07.2023
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State of Himachal Pradesh and another ..Appellants
Versus
Ramesh Chand and others ..Respondents
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Coram :-
Justice Jyotsna Rewal Dua, Judge
Whether approved for reporting?1
For the Respondents
____________________________________________________
For the Appellants : Mr. Varun Chandel, Additional Advocate General.
: Ms. Ritta Goswami, Senior Advocate, with
Ms. Komal Chaudhary, Advocate
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Jyotsna Rewal Dua, Judge
State is in appeal against the award dated 01.07.2014 passed by
the learned Additional District Judge in Land Reference Petition preferred
by the respondents under Section 18 of the Land Acquisition Act (in short
the Act).
2. The case
Respondents' land in question was situated in village Bhadyara,
Tehsil Jogindernagar, District Mandi, H.P. It was acquired by the State of
Himachal Pradesh for a public purpose i.e. construction of road National
Highway No. 20. Notification under Section 4 of he Act was issued on
28.07.2001. Notifications under Sections 6 & 7 of the Act were issued on
05.03.2002. Notices in terms of Section 9 of the Act were served upon the
concerned persons for appearing before the Collector on 30.09.2002. The
Land Acquisition Collector (LAC) assessed the market value of the
.
acquired land classification-wise. Benefit of 12% additional amount
alongwith 30% solatium on the market value of the land under Section
23(1-A) of the Act, apart from interest, was also awarded to the land
owners. The compensation was accordingly determined and awarded by
the LAC [Collector HP PWD (CZ)], Mandi in award No. 39 passed on
08.01.2004.
The respondents filed reference petition under Section 18 of the
Act before the learned District Judge seeking enhancement of
compensation. The State opposed the petition. Learned District Judge
decided the reference petition on 01.07.2014. In his award, learned
District Judge assessed the market value of the acquired land at flat and
uniform rate of Rs. 30,000/- per bigha, irrespective of classification and
category of the acquired land.
Feeling aggrieved against the award dated 01.07.2014, the State
has come up in this appeal.
3. Submissions
Learned Additional Advocate General submitted that the LAC
had fairly assessed the market value of the acquired land classification-
wise as per following detail :-
1. Dhani Aval Rs. 15,000/- per bigha
2. Shalabi Rs. 15,000/- per bigha
3. Barani Aval Rs. 15,000/- per bigha
4. Gair Mumkin Rs. 15,000/- per bigha
5. Banjar Kable Rs. 10,000/- per bigha
.
6. Banjar Jadid Rs. 10,000/- per bigha
7. Khadyater Rs. 10,000/- per bigha
Learned Additional Advocate General contended that the learned
District Judge committed illegality in determining the market value of the
acquired land at flat and uniform rate irrespective of classification of the
acquired land. Another argument raised by learned Additional Advocate
General was that the assessment of the market value at Rs. 30,000/- per
bigha was even otherwise not in order. Learned District Judge had
assessed Rs. 30,000/- per bigha as market value of the acquired land on
the basis of a sale deed Ex. PW-2/A. This sale deed pertained to a small
piece of land. In view of the decision of Apex Court in 2003 (4) SCC 481
(Ravinder Narain and another Vs. Union of India), sale instance of
small piece of land could not have been considered for determining the
market value of the acquired land.
Learned Senior Counsel for the respondents countered the
submissions made for the appellants and defended the impugned award.
Learned Senior Counsel submitted that there had been no illegality in
assessing the market value of the acquired land at uniform rate
irrespective of classification of the acquired land. She further submitted
that in view of the evidence led by the parties, consideration of sale deed
Ex. PW-2/A pertaining to land of adjoining mohal for assessing the
market value of acquired land, was in order.
.
4. Observations
I have heard learned counsel for the parties and considered the
case record.
4 (i) Assessment of market value of acquired land irrespective of
its classification.
Admittedly, land irrespective of its classification has been
acquired for constructing a road i.e. National Highway 20. Comparative
utility of the land will remain the same irrespective of category of the
land. Since the land bearing different classification was acquired for a
common purpose i.e. construction of a road, learned Reference Court has
rightly applied uniform rate of compensation for different categories of
acquired land.
4(ii) Reliance upon sale deed Ex. PW-2/A.
The record shows that Ex. PW-2/A is a sale deed executed on
05.01.2001, wherein land measuring 0-8-15 bigha (8 biswa 15 biswansi)
comprised in Mohal Bhagehar, Tehsil Jogindernagar, District Mandi, H.P.
was sold for Rs. 20,000/-. Ex. PW-2/A was relied upon by the respondents
for assessing the market value of their acquired land in Mohal Bhadyara,
Tehsil Jogindernagar, District Mandi, H.P. Ex. PW-2/A pertained to a
parcel of land measuring 8 biswas 15 biswansis. Even if this area is
considered to be a small parcel of land, then also the settled legal position
remains that consideration of the sale instances of small piece of land for
the purpose of determining market value of the acquired land is not
prohibited. The Hon'ble Apex Court in Ravinder Narain's case (supra)
.
held that rates fixed for small plots can be made basis for assessing the
market value if there is no other material available on record. In such a
situation, adjudicating Court can make comparison of the prices paid for
small plot of land after making necessary deductions/adjustments. It
would be worthwhile to extract the paras from the judgment, relevant to
the context :-
"Where large area is the subject matter of acquisition, rate at which small
plots are sold cannot be said to be a safe critereia. Reference in this context may
be made to three decisions of this Court in The Collector of Lakhimpur v. Bhuban
Chandra Dutta (AIR 1971 SC 2015), Prithvi Raj Taneja (dead) by Lrs. V. The
State of Madhya Pradesh and Anr. (AIR 1977 SC 1560) and Smt. Kausalya Devi
Bogra and Ors. Etc. v. Land Acquisition Officer, Aurangabad and Anr. (AIR 1984
SC 892).
It cannot, however, be laid down as an absolute proposition that the rates
fixed for the small plots cannot be the basis for fixation of the rate. For example,
where there is no other material, it may in appropriate cases be open to the
adjudicating Court to make comparison of the prices paid for small plots of land.
However, in such cases necessary deductions/adjustments have to be made while
determining the prices."
In the instant case, Ex. PW-2/A executed on 05.01.2001 is the
only document evidencing the sale available on record. This sale deed is
nearer to the date 28.07.2001 i.e. the date of Notification under Section 4
of the Act. Ex. PW-2/A does not pertain to Mohal Bhadyara, where the
acquired land was situated, but pertains to Mohal Bahegar. However, it
has come in the evidence that Mohal Bagehar adjoins Mohal Bhadyara
and further that value of land of both the Mohals is almost similar. P.C.
.
Rana (RW-1)-the sole witness examined by the State, during the course of
his cross examination candidly admitted that Mohal Bhadyara is adjoining
to Mohal Bahegar. In view of admission made by RW-1 and taking note
of the evidence on record, there was no impediment for the Reference
Court to have taken into consideration the sale deed Ex. PW-2/A for
determining the market value of the acquired land.
4(iii) Learned Additional Advocate General next contended that
learned reference Court fell in error in not making any standard deduction
in accordance with law from the assessed market value. It was submitted
that in accordance with law laid down in (2003) 1 SCC 354 (Kasturi and
others Vs. State of Haryana), 2009 (9) SCC 409 (Saibanna (dead) by
LRs. Vs. Assistant Commissioner and Land Acquisition Officer) and
(2005) 4 SCC 789 (Viluben Jhalejar Contractor (Dead) by LRs. Vs.
State of Gujarat), learned reference Court was bound to make deductions
while determining the prices. This submission was opposed by the learned
Senior Counsel for the respondents. It was submitted that the land was
acquired for the construction of a road, hence no deduction was required
to be made.
It would be appropriate to first take note of AIR 1992 SC 2298
(Bhagwathula Samanna and others Vs. Special Tahsildar and Land
Acquisition Officer, Visakhapatnam Municipality), wherein the Apex
Court held that the proposition that large area of land cannot possibly
fetch price at the same rate at which small plots are sold, is not absolute
.
proposition. In the given circumstances, it would be permissible to take
into account the price fetched by the small plot 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 the purpose of comparison is not
warranted. The Apex Court further observed that with regard to the
nature of the plots involved in case, the evidence on record showed that
land had facilities of road and other amenities. It was adjacent to a
developed colony. In such circumstances, it was possible to utilize the
entire area in question as house sites. In respect of land acquired for the
road, same advantages are available. It did not require any further
development. Therefore, the principle of deduction applied by the High
Court and reducing the fair market value of the land was held to be
unjustified.
Somewhat similar question arose before this Court in 2014 (3)
SLC 1356 (G.M. Northern Railway Vs. Gulzar Singh and others).
The contention was raised for the railways that market value of the land
comprised in sale deed of a small parcel of land could not have been
applied as a whole to the acquired land without accounting for deductions
towards development costs. Negating the contention, the Court held that
deductions were necessary where the entity for whom the land was
acquired, was entailed to make the land fit for the pupose for which it was
.
acquired by incurring exorbitant expenses towards its development. The
deduction in such cases was necessary to balance the scale of economics
to obviate the losses accruing from steep rates of compensation as may be
awarded. Principles of deduction are more applicable where land is
acquired for State holdings, building/housing agency(ies) or the agencies
carrying out and engaged in profiteering work. The Court further held that
in that case, the land was acquired for the purpose of construction of a
railway track. The appellant was doing it as a welfare measure and not as
a profiteering measure. The track would continue to be owned by the
appellant. It was not a case where the acquiring agency after
developing the land would sell it further or gain profit. It was held that
deduction was not warranted in the given facts. It would
be relevant to extract hereinafter relevant paras from the
judgment :-
"10. Even previously in judgments reported, in 1997 (2) SLC 229 and
1998(2) All India Land Acquisition Act LACC (1) SC, it has been mandated that
when the purpose of acquisition is common, the award of compensation at a
uniform rate for different classification/categories of land, is, tenable. Hence, it
can be forthrightly concluded, that, the award of a uniform rate of
compensation by the learned Additional District Judge Una for different lands
bearing different classifications/categories, is, not legally infirm, especially
when on acquisition they acquire a uniform potentiality.
11. The learned counsel appearing for the appellant has concerted, to
also espouse before this Court, that even though, reliance upon Ex. PW1/C by
the learned Court below, is not misplaced, in as much, as it fulfilled the
relevant enshrined legal parameter for its invocation/applicability, in as much,
as (i) it being proximate to the land subjected to acquisition, as also (ii) its
.
execution being contemporaneous to the issuance of the notification under
Section 4 of the Land Acquisition Act. Nonetheless, he has canvassed that (i)
given the largeness or expanse and immensity/immenseness of size of the land
subjected to acquisition vis-à-vis the area of the land sold/ comprised in Ex.PW
1/C, the market value of the land comprised in Ex.PW1/C could not have been,
as a whole applied to the entire land subjected to the acquisition, unless,
deductions for developmental costs as warranted and mandated by the
decisions relied upon by him had been made/accorded. Since, the learned
Additional District Judge, Una omitted to give/make deductions from the total
compensation arrived at/worked out on the basis of the value of the land
sold/comprised in Ex.PW1/C, whereas, he was enjoined to do so, he has
committed a grave legal error necessitating interference by this Court.
12. While proceeding to gauge the sinew of the above contention
canvassed before this Court, it is necessary to bear in mind that the judgments
cited in support of the above view espoused by the learned counsel for the
appellant, are distinguishable, vis-à-vis, the facts at hand, hence, in the humble
view of this Court, not reliable as (a) all the judgments relied upon by the
learned counsel for the appellant, concert to marshal the view, of, deductions
from the lump sum compensation assessed qua a large tract of land on the
score of market value of a small/minimal piece of land being made. In other
words, the emphasis in the aforesaid citations, is that, for the market value of
small a tract of land to be comprising an admissible parameter, for, on its
strength working out the compensation for a large tract of land, it is,
imperative that deductions towards development costs is made. However,
distinguishably in the citations aforesaid, the acquisition was made for the
development of sites for allotment for housing purpose or for construction of a
housing colony or the purpose of acquisition had an inherent profiteering
motive. Therefore, given the purpose for which the land was acquired, in, the
cases relied upon by the learned counsel for the appellant, deductions were
enjoined to be imperative or necessary, as, the entity for whom the land was
brought under acquisition, would be entailed/obliged, to, make the land fit for
the purpose for which it was acquired, in as much, as, such an entity
concomitantly being driven to incur exorbitant expenses, towards its
development for rendering it fit for use. As such, given the magnified increase
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in the scale of economies or given the ultimate manifold increase, in, the scale
of economies or such incurring of exorbitant expenses on development, hence,
acquiring the capacity to proportionately reduce their profit, as such, rendering
the project for which the land was acquired financially viable, or, to obviate the
losses accruing from the steep rates of compensation as may be awarded that
deductions were permitted. In other words, deduction from compensation
mandated to not render the venture and the purpose for which the land was
acquired, in the aforesaid citations relied upon by the learned counsel for the
appellant, to be financially un-whole some, as well as, unviable. More so, when
the land is acquired for State holdings, building/housing agency(ies) or the
agencies carrying out and engaged in profiteering work. However, in contra
distinction, to the facts of the judgments, as relied upon by the learned counsel
for the appellant, in the instant case, the land has been subjected to
acquisition, for the purpose of construction of a railway track. In the appellant
engaging itself in the construction of a railway track, it has assumed the role of
doing so, as, a welfare measure and not as a profiteering measure. The railway
track would continue to be owned by the appellant, in distinction to the facts
of the judgments relied upon by the learned counsel for the appellant, where
the agency for whom the land was subjected to acquisition, would on
developing the land, sell it further or gain profit. (b) The appellant has omitted
to adduce cogent evidence on record displaying the fact that each of the land
holder, whose land was subjected to acquisition was holding a vast expanse of
land. Omission to adduce into evidence such proof demonstrative of each of
the land holders, whose land was subjected to acquisition, owing a wide
expanse or a large sized holding, vis-à-vis, the sale transaction comprised in Ex.
PW1/C, a firm conclusion can be formed, that, the size of the holding or the
size of the land of the each of the land holders, whose land was subjected to
acquisition was more or less equal to or not disproportionately larger in size to
the area of the land comprised in Ex.PW1/C. Hence, there was no jurisdictional
error, on the part of the learned Additional District Judge, Una, in not affording
deduction, given the smallness in size of the land comprised, in, Ex.PW1/C, vis-
à-vis, the lands of each of the individual land owners, whose land was
subjected to acquisition. Besides, it has also not been cogently proved by the
appellant that any part of the land owned by each of the land owners and
subjected to acquisition did not bear potentiality nor would have commanded
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a market value, lesser than the value earned by the expanse of land comprised
in Ex.PW1/C. It appears, that, given the proximity of the acquired land, as
deposed by PW-4 Gulzar Singh and PW-3 Gurbachan Singh, to educational
institution, temple and abadi of the villagers it enjoyed or commanded
immense market value. Therefore, when each parcel of the land subjected to
acquisition bore a market value, equivalent to the land subjected to
acquisition, hence, there was, no, legal error committed by the learned
Additional District Judge in relying upon for the market value depicted, in,
Ex.PW1/C and applying it to the entire tracts of the land subjected to
acquisition even, when it was smaller in size vis-à-vis the land subjected to the
acquisition."
Reliance can also be placed upon 2017 (Supp) Shim. LC 263
(Everest Power Corporation Limited Vs. Shri Khub Ram and others).
Relevant paras from the judgment are as follows :-
"21. Plea of the appellants on this issue is misconceived. In present case,
acquisition is not for the purpose of developing a Housing Colony, setting up a
commercial unit or any other purpose of like nature which may have resulted
development of area on the cost of the State. In the judgments relied upon by
the appellants, the deductions were allowed for two purposes i.e. (a) deduction
for providing development infrastructure and (b) deduction for development
expenditure/expenses and these deduction have been explained by the Apex
Court in case titled Chandrashekar (dead) by LRs and others Vs. Land
Acquisition Officer, reported in (2012)1 SCC 390, which is as under:-
"19. Based on the precedents on the issue referred to above it is seen,
that as the legal proposition on the point crystallized, this Court divided the
quantum of deductions (to be made from the market value determined on
the basis of the developed exemplar transaction) on account of
development into two components.
19.1 Firstly, space/area which would have to be left out, for providing
indispensable amenities like formation of roads and adjoining pavements,
laying of sewers and rain/flood water drains, overhead water tanks and
water lines, water and effluent treatment plants, electricity sub stations,
electricity lines and street lights, telecommunication towers etc. Besides
.
the aforesaid, land has also to be kept apart for parks, gardens and
playgrounds. Additionally, development includes provision of civic
amenities like educational institutions, dispensaries and hospitals, police
stations, petrol pumps etc. This "first component", may conveniently be
referred to as deductions for keeping aside area/space for providing
developmental infrastructure.
19.2 Secondly, deduction has to be made for the expenditure/expense
which is likely to be incurred in providing and raising the infrastructure and
civic amenities referred to above, including costs for levelling hillocks and
filling up low lying lands and ditches, plotting out smaller plots and the
like. This "second component" may conveniently be referred to as
deductions for developmental expenditure/expense.
20. It is essential to earmark appropriate deductions, out of the market
value of an exemplar land, for each of the two components referred to
above. This would be the first step towards balancing the differential
factors. This would pave the way for determining the market value of the
undeveloped acquired land on the basis of market value of the developed
exemplar land.
22. Further, in Nelson Fernades Vs. Special Land Acquisition Officer 2007
(9) SCC 447 while dealing with the case where the land was acquired for laying
a Railway line, the Court held that no deduction by way of development
charges was permissible as there was no question of any development
thereof."
In view of the ratio of above judgments, no error was committed
by the learned reference Court in not making any deduction from the
compensation by way of development charges as there was no question of
any development of the land. The acquisition was for the purpose of
constructing a road.
5. No other point was urged.
For the foregoing reasons, I do not find any error in the impugned
award. The appeal is dismissed alongwith the pending applications, if any.
.
3rd July, 2023 (K) Jyotsna Rewal Dua
Judge
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