Karnataka High Court

Nemani Bhairu Jangale vs The Assistant Commissioner on 2 January, 2024

Author: S G Pandit

Bench: S G Pandit

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                                                           MFA No. 102561 of 2016




                           IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

                               DATED THIS THE 2ND DAY OF JANUARY, 2024

                                                PRESENT
                                  THE HON'BLE MR JUSTICE S G PANDIT
                                                    AND
                                 THE HON'BLE MR JUSTICE K V ARAVIND
                           MISCELLANEOUS FIRST APPEAL NO. 102561 OF 2016 (LAC)

                      BETWEEN:

                      1.   NEMANI BHAIRU JANGALE,
                           AGE: 73 YEARS,
                           OCC: RETIRED GOVERNMENT SERVANT,
                           FOR SELF AND GPA HOLDER OF APPELLANT NO. 2 TO 4

                      2.   BABU @ BABURAO BHAIRU JANGALE,
                           AGE: MAJOR, OCC: AGRICULTURE,

                      3.   SMT. ANANDIBAI W/O RAMCHANDRA JANGALE,
                           AGE: MAJOR, OCC: HOUSEWIFE,

                      4.   JIJABAI D/O RAMCHANDRA JANGALE,
                           AGE: MAJOR, OCC: HOUSEWIFE,

                           ALL ARE R/O: NO.2370, MAHATMA FULE ROAD,
                           KACHERI GALLI, SHAHAPURM, BELAGAVI.
         Digitally
         signed by
         JAGADISH
JAGADISH T R
                                                                        ...APPELLANTS
TR       Date:
         2024.01.09
         15:42:59
         +0530        (BY SRI. SRINIVAS B. NAIK & SRI. K.R. JOSHI, ADVOCATES)

                      AND:

                      1.   THE ASSISTANT COMMISSIONER AND SPECIAL LAND
                           ACQUISITION OFFICER, BELAGAVI.

                      2.   THE COMMISSIONER
                           CORPORATION, BELAGAVI.

                      3.   THE CHIEF SECRETARY,
                           REVENUE DEPARTMENT,
                           VIDHAN SOUDHA, BENGALURU-1.
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                                        MFA No. 102561 of 2016




4.    THE PRINCIPAL SECRETARY,
      URBAN DEVELOPMENT,
      VIDHAN SOUDHA, BENGALURU-1.

                                                   ...RESPONDENTS
(BY SRI. G.K. HIREGOUDAR, GOVT. ADVOCATE FOR R1, R3 & R4,
    SRI. JAGADISH PATIL, ADVOCATE FOR R2)

      THIS MFA IS FILED UNDER SECTION 54(1) OF THE LAND
ACQUISITION ACT, AGAINST THE JUDGMENT AND AWARD DATED
20.12.2014 PASSED IN LAC NO.4/2009 ON THE FILE OF II-
ADDITIONAL SENIOR CIVIL JUDGE AND CJM, BELAGAVI PARTLY
ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING
ENHANCEMENT OF COMPENSATION.
     THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY,
S.G.PANDIT J., DELIVERED THE FOLLOWING:


                           JUDGMENT

The land losers are in appeal under Section 54(1) of the

Land Acquisition Act, 1894 (for short, 'the Act') not being

satisfied with the market value determined by the Special Land

Acquisition Officer (SLAO) as well as by the reference Court

under judgment and award dated 20.12.2014 in LAC No.4/2009

on the file of learned II Addl. Senior Civil Judge & CJM,

Belagavi.

2. Heard the learned counsel for the appellants,

learned Government Advocate for respondents No.1, 3 and 4

and learned counsel for respondent No.2/City Municipal

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Corporation, perused the appeal papers as well as reference

Court records.

3. The appellants/claimants state that they were

owners of the land bearing RS No.274/A in CTS No.5283/A

measuring 17 guntas of land situated at Hulbatte colony,

Belagavi. It is stated that the respondents issued preliminary

notification under Section 4(1) of the Act on 14.2.2008 for

acquisition of 6 guntas of land and final notification under

Section 6(1) of the Act on 6.10.2008. It is further stated that

the SLAO by his award dated 22.01.2009 determined the

market value of the land in question at the rate of

Rs.1,52,000/- per gunta. Not being satisfied with the

determination of market value of the acquired land by the

SLAO, the appellants sought reference under Section 18(1) of

the Act and the reference Court by impugned judgment and

award dated 20.12.2014 enhanced the market value from

Rs.1,52,000/- to Rs.2,02,312/- per gunta with all statutory

benefits. Not being satisfied with the said determination of

market value of Rs.2,02,312/- per gunta by the reference

Court, the appellants are before this Court in this appeal.

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4. Sri. Srinivas B Naik, learned counsel for the

appellants would submit that the market value of the land in

question determined by the SLAO as well as reference Court is

against the material on record and the same is determined

without taking note of the fact that the land in question falls

within the limits of Municipal Corporation of City of Belagavi. It

is also submitted that the question of conversion of land would

not arise once it falls within Municipal Corporation limits. He

further submitted that the respondents could not have

differentiated between the converted land and non-converted

land. Learned counsel further submits that the land in question

is by the side of Mahatma Pule Road and surrounding lands

have already been developed. He would further submit that

the land in question has got residential as well as commercial

potentiality.

5. Learned counsel for the appellants places specific

reliance on Exs.P9 and P10-Sale Deeds dated 2.1.2008 and

16.08.2007 respectively. Learned counsel referring to Ex.P9

would submit that the Corporation City of Belagavi had sold the

property bearing CTS No.2058 measuring 3320.80 sq.mtrs.

(Approximately 35745 sq.ft.) at the rate of Rs.24 lakhs per

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gunta and under Ex.P10, sale has taken place in respect of

property bearing CTS No.107/A, measuring 47.10 sq.mtrs. and

CTS No.107/B measuring 602.56 sq.mtrs. approximately at

the rate of Rs.8,57,000/- per gunta. Further, learned counsel

would submit that the lands under Ex.P9 and P10 are situated

hardly within 1 km of the acquired land in question. It is

therefore, submitted that the reference Court failed to take

note of Ex.P9 and P10-Sale exemplars while determining the

market value of the land in question. Learned counsel would

further submit that the reference Court taking note of Ex.P9

and P10, after deducting developmental charges ought to have

determined the market value.

6. Per contra, Sri. Jagadish Patil, learned counsel

appearing for respondent No.2/Corporation would submit that

the SLAO while determining the market value of the land in

question has taken note of the guidance value and has properly

determined market value. Referring to Ex.P9-Sale Deed dated

2.1.2008, the learned counsel would submit that the same

relates to auction sale and same cannot be taken note while

determining the market value of the land in question in the

present case. Further, learned counsel referring to Ex.P10

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would submit that the said sale transaction was in respect of

converted land and developed land, whereas the appellants'

land is not a developed land. If at all this Court decides to

determine the market value in terms of Ex.P10, he prays for

deducting developmental charges. Thus, learned counsel prays

for dismissal of the appeal.

7. Having heard the learned counsel for the parties

and on perusal of the appeal papers including the reference

Court records, the only question which falls for consideration is,

whether the market value of the land in question determined by

the SLAO and the reference Court is proper and correct?

8. Answer to the above question would be in the

negative and the market value of the acquired land requires re-

determination for the following reasons:

9. It is not in dispute that the land in question i.e.,

acquired land bearing CTS No.5283/A measuring 6 guntas

situated at Hulbatte colony, Belagavi, is within municipal

corporation area. The appellants in support of their case

examined claimant No.1 as PW1 and marked Ex.P1 to P23.

The respondents did not adduce any evidence nor marked any

document. PW1 in his evidence has deposed that the acquired

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land is in the heart of Belagavi City and within Municipal

Corporation limits. Further he has stated that the land in

question is situated adjoining to 100 feet wide Mahatma Pule

Road and it has got NA potentiality. He further deposed that

developments have already taken place in surrounding acquired

land, which has been observed at the time of spot inspection by

the Assistant Commissioner and SLAO.

10. Ex.P9-Sale Deed dated 2.1.2008 is executed by the

Corporation City of Belagavi in favour of Life Insurance

Corporation of India. Admittedly, it is an auction sale. Since it

is an auction sale, the same cannot be exemplar for

determining the market value of the acquired land in the

instant case. Whereas, Ex.P10-Sale Deed dated 16.08.2007 is

executed between two individuals in respect of property

bearing CTS No.107/A, measuring 47.10 sq.mtrs. and CTS

No.107/B measuring 602.56 sq.mtrs. situated at Dane Galli,

Shahapur, Belagavi. The reference Court ought to have taken

note of Ex.P10-Sale Deed. The reference Court brushed aside

Ex.P.10 on the ground that there is no evidence as to what is

the distance between Dane Galli and Hulbatte colony. Sale

statistics of the area is to be taken note of depending on the

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facts of each case. Sale statistics need not be of the adjacent

land itself. Sale statistics could be of in and around the vicinity

of the land.

11. The Hon'ble Apex Court in the case of Special

Land Acquisition Officer Vs. Karigowda & Others1, while

considering Sections 23 and 24 of the Act has laid down

guidelines for determination of fair market value and methods

of computation. Paragraph-71 and 72 of the said judgment

reads as under:

71. Sections 23 and 24 of the Act spell out the have and have-nots, applicable to the scheme of awarding compensation by the Collector but do not describe the methodology which should be adopted by the courts in determining the fair market value of the land at the relevant time. By development of law, the courts have adopted different methods for computing the compensation payable to the landowners depending upon the facts and circumstances of the case. The courts have been exercising their discretion by adopting different methods, inter alia the following methods have a larger acceptance in law:

(a) Sales statistics method.-In applying this method, it has been stated that, sales must be genuine and bona fide, should have been executed at the time proximate to the date of notification under Section 4 of the Act, the land covered by the sale must be in the vicinity of the acquired land and the land should be comparable to the acquired land. The land covered under the sale instance should have similar potential and occasion as that of the

2010 (5) SCC 708

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acquired land (Faridabad Gas Power Project, NTPC Ltd. v. Om Prakash, Shaji Kuriakose v. Indian Oil Corpn. Ltd. Ravinder Narain v. Union of India).

(b) Capitalization of net income method- This method has also been applied by the courts. In this method of determination of market value, capitalisation of net income method or expert opinion method has been applied (Union of India v. Shanti Devi, Executive Director v. Sarat Chandra Bisoi and Nelson Fernandes v. Land Acquisition Officers.

(c) Agricultural yield basis method. - Agricultural yield of the acquired land with reference to revenue records and keeping in mind the potential and nature of the land-wet (irrigated), dry and barren (banjar).

72. Normally, where the compensation is awarded on agricultural yield or capitalisation method basis, the principle of multiplier is also applied for final determination. These are broadly the methods which are applied by the courts with further reduction on account of development charges. In some cases, depending upon the peculiar facts, this Court has accepted the principle of granting compound increase at the rate of 10% to 15% of the fair market value determined in accordance with law to avoid any unfair loss to the claimants suffering from compulsive acquisition. However, this consideration should squarely fall within the parameters of Section 23 while taking care that the negative mandate contained in Section 24 of the Act is not offended. How one or any of the principles aforestated is to be applied by the courts, would depend on the facts and circumstances of a given case.

(Emphasis supplied)

12. The Hon'ble Apex Court in the aforesaid judgment

has made it clear that while determining the market value of

the acquired land, broadly methods like sales statistics,

capitalization of net income and agricultural yield basis method

could be followed. As held by the Hon'ble Apex Court while

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determining the market value, potentiality of the land, existing

land use, surrounding developments, connectivity, its

commercial value etc. is to be taken note of. The Court has to

look into the facts of each case and has to adopt appropriate

method.

13. In the case of Radha Mudaliyar Vs. Special

Tahsildar (Land Acquisition) Tamilnadu Housing Board2,

the Hon'ble Apex Court has observed that comparable sales

instances, subject to their satisfying the basic ingredients of

law, are the best piece of evidence and safest method for

determining the market value of the acquired land. Relevant

paragraphs 12 and 13 reads as follows:

12. It is a well-settled principle of law that comparable sales instances, subject to their satisfying the basic ingredients of law, are the best piece of evidence to be considered by the court for the purpose of determining the compensation. Even awards and transactions of the adjacent areas have been treated as best evidence which will fall within the zone of consideration by the court. Of course, such instances must be comparable and legally admissible in evidence. In this aspect, we may refer to the judgments of this Court in Harcharan v. State of Haryana¹;

Kantaben Manibhai Amin v. Land Acquisition Officer and ONGC Ltd. v. Sendhabhai Vastram Patel.

13. Comparable sales instances are the safest method for determining the market value of the acquired land and as laid down in Shaji Kuriakose v. Indian Oil Corpn. Ltd.4, it

(2010) 13 SCC 384

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should satisfy the factors, inter alia, (1) the sale must be a genuine transaction; (2) the sale deed must have been executed at the time proximate to the date of issuance of notification under Section 4 of the Act; (3) the land covered by the sale must be in the vicinity of the acquired land; (4) the land covered by the sale must be similar to the acquired land; and (5) size of the plot of the land covered by the sale be comparable to the acquired land. The sales instances should preferably be closest to the date of the notification as then alone it would satisfy the touchstone of the principles contemplated under Section 23 of the Act, as held in Kanwar Singh v. Union of India.

(Emphasis supplied)

14. In the case on hand, Ex.P10-Sale Deed is not

questioned on its genuinety of transaction. Ex.P10 is in respect

of sale of the land bearing CTS No.107/A and 107/B situated at

Dane Galli, Shahapur, Belagavi within the vicinity of the

acquired land. Section 4(1) notification for acquisition is dated

14.02.2008 and Ex.P10-Sale Deed is dated 16.08.2007 i.e., six

months prior to issuance of 4(1) notification. Hence, it could be

taken note of for determining the market value of the acquired

land. In the instant case, the land acquired measures

approximately 6 guntas, whereas, the land involved in Ex.P10

is also similar land i.e. smaller plot measuring 649.66 sq.mtrs.