Punjab-Haryana High Court
Hydraulics And Pneumatics (India) Llp vs State Of Haryana And Anr on 25 April, 2024
Author: Rajbir Sehrawat
Bench: Rajbir Sehrawat
Neutral Citation No:=2024:PHHC:057835
2024:PHHC:057835
RFA-2532-2021 and 1
RFA-2529-2021
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Date of decision: 25.04.2024
1. RFA-2532-2021 (O& M)
HYDRAULICS AND PNEUMATICS (INDIA) LLP ..Appellant
Versus
STATE OF HARYANA AND ANR ...Respondents
AND
2. RFA-2529-2021 (O & M)
STATE OF HARYANA ..Appellant
Versus
M/S HYDRAULICS AND PNEUMATICS LLP AND ANR
...Respondents
CORAM : HON'BLE MR. JUSTICE RAJBIR SEHRAWAT
Present:- Mr. Puneet Bali, Sr. Advocate with
Mr. Kunal Vajani, Advocate,
Mr. Vipul Joshi, Advocate,
Mr. Shubhang Tandon, Advocate,
Mr. Vishavjeet S. Beniwal, Advocate,
Mr. Prashant Kapila, Advocate and
Mr. Aman Brar, Advocate,
for the appellant in RFA-2532-2021 and
for respondent No.1 in RFA-2529-2021.
Mr. Shivendra Swaroop, DAG, Haryana and
Ms. Nikita Goel, Advocate,
for the appellant in RFA-2529-2021 and
for respondent No.1 in RFA-2532-2021.
Mr. Ankush Chowdhary, Advocate,
for respondent No.2.
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RFA-2529-2021
RAJBIR SEHRAWAT, J. (Oral)
1. This order shall dispose of aforesaid regular first appeals i.e.
RFA-2532-2021 filed by the land-owner whose land has been acquired and
RFA-2529-2021 filed by the State of Haryana.
2. However, for reference, the facts, broadly, are being taken from
RFA-2532-2021.
3. The facts as are emerging in these appeals are that a
notification No.LAC(F)/NTLA/7/17/2011-2TCP dated 04.07.2012 was
issued under Section 4 of the Land Acquisition Act, 1894 (for short, 'the
Act'), for acquisition of land of the appellant, comprised in khasra
no.13/23/1, 20/4, 20/5, 20/6, 20/7, 21/1, 21/2, 21/3/1, 21/8/2, 21/9 and
21/10, situated in village Sarai Khawaja, District Faridabad, for the purpose
of metro stations and parking sites from Badarpur to YMCA Chowk,
Fariadabad. Thereafter, necessary notification under Section 6 of the Act
was also issued on 31.12.2012. After assessing the value of the land, the
Land Acquisition Collector awarded Rs.8,000/- per square yard, taking the
land of the appellant as an Industrial property. Aggrieved against the said
Award passed by the Land Acquisition Collector, the appellant had sought
reference under Section 18 of the Act. The Reference Court enhanced the
compensation and determined the market value of the land of the appellant
at the rate of Rs.70,000/- per square yard, however, deducted the amount of
20% from the awarded amount on the pretext that the project for which the
land was being acquired, was of national importance. Questioning the
assessment of the market value, as well as, the deductions made by the
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Reference Court, the affected land-owner has filed the above-mentioned
appeal i.e. RFA-2532-2021, whereas, questioning the enhancement granted
to the land-owner, the State of Haryana has filed the other above-mentioned
appeal i.e. RFA-2529-2021.
4. Arguing the case, learned Senior Counsel for the appellant has
submitted that land of the appellant, which is situated in Sector 27-D,
Faridabad, though is an Industrial property, however, on the left side, as
well as, on the right side of the property of the appellant, conversion of the
land use, had already been permitted by the respondents-State and the
industrial land on both sides stood converted to commercial land. Not only
that, vide notification dated 16.11.2010, the State had also issued the
notification declaring the entire area, including the area under the premises
of the appellant, to be commercial area. Accordingly, though the Reference
Court has taken the land of the appellant as commercial land, however,
market value of the said land has not been assessed to be commensurate
with the commercial value of the land of the appellant, as well as, the land
situated in the vicinity of this land. Learned Senior Counsel for the
appellant has further submitted that due to acquisition of the land of the
appellant, remaining land of the appellant at that place, measuring 33,892
square yards, has been rendered totally useless on account of severance of
this land, as well as, on account of the fact that the entire frontage of the
land abutting the road has been acquired and the building of Metro Station
has been constructed in the entire front side of the land of the appellant.
Not only that, the building of Metro Station is about 32 metres in height,
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leaving no visibility to the land of the appellant. Moreso, even approach to
the land of the appellant has been given only through the building of the
Metro Station, virtually denying any purposeful commercial use of the land
of the appellant. Despite that, no compensation has been granted to the
appellant on account of severance or on account of extreme diminishing of
the value of the remainder land of the appellant in terms of Clauses 'thirdly'
and 'fourthly' of Section 23(1) of the Act. Learned Senior Counsel for the
appellant has also relied upon the judgment rendered by this Court in
Chanan Singh Vs. State of Punjab (2009) SCC Online P & H 612, to submit
that since the entire frontage of the land of the appellant has been blocked
and the remaining land without any appropriate approach has been rendered
useless, therefore, the appellant is entitled to the compensation on account
of severance of the land as well; at the rate of 50% of the market value of
the land.
5. Learned Senior Counsel for the appellant has further submitted
that the Land Acquisition Collector, as well as, the Reference Court, both
have not properly applied mind to the determination of the market value,
and the irrationality in determination of the market value of the land of the
appellant is writ large on the face of it; because the same Reference Court
has granted the market value of Rs.80,000/- per square yard to the land-
owner whose land is situated at about 12.8 kms. towards Faridabad, which
is farther from Delhi.
6. Qua the evidence led on the file, learned Senior Counsel for the
appellant has referred to Ex.P-30, which is compilation of details of licenses
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of the adjoining properties, showing that the said lands are being used as
commercial ones. He has further referred to Ex.P-42, which is photograph
of the Commercial Mall, named, Sewa Grand Mall & Hotel Misaki, as well
as, of the Crown Business Park. Learned Senior counsel has further
referred to Ex.P-9 and Ex.P-12/Y, which are the un-scaled site plans of the
area, to show that the land of the appellant has been totally sandwiched
from the front side by the Metro Station and on the left side by the office
Complex called Vatika Mindscapes and on the right side by the Commercial
Buildings of L& T Company and of the Clutch Auto. Accordingly, it is
submitted that there is absolutely no scope for disputing the fact that land of
the appellant is having huge commercial value. In the same line, learned
Senior Counsel for the appellant has also referred to Ex.P-31, Ex.P-38,
Ex.P-40, Ex.P-41 and Ex.P-46, to show that the entire area ssurrounding
land of the appellant has been developed in the commercial malls or office
spaces and the multiplexes. Learned Senior Counsel for the appellant has
further submitted that while filing objections dated 14.08.2012 (Ex.P-11),
under Section 5-A of the Act, the appellant had raised the issue of giving
access to its land to the main road so that the remainder of the land can be
put to some commercial use, however, although the lands of proprietors on
the left side and right side of the land of the appellant have been given
approach to the main road on the front side, yet the appellant has been
totally denied that approach to the main road. As a result, the only
approach to the land of the appellant is through the building of the Metro
Station. Therefore, land of the appellant has been rendered totally useless;
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so far as commercial exploitation of the same is concerned. To highlight
the situation of the land and its existing commercial potential, learned
senior counsel for the appellant has referred to the document Ex.P-32,
which is the site plan showing that the land of the appellant is less than 1.5
kms away from Delhi Badarpur Border. To the similar effects are the
documents Ex.P-29B showing the distance of the land of the appellant to be
about 2.1 kms. from Plot No.7, DLF, Industrial Estate No.1, Ex.P-29C
showing the distance of the land of the appellant to be about 5.6 kms. from
Sector 27-A, Main Mathura Road, Faridabad, and also other similar exhibits
which have been placed on record to show that distance of the land of the
appellant is within a small range from premium commercial premises of
other proprietors. Accordingly, it is submitted that the land of the appellant
is closest to Delhi as compared to the above-referred properties. Therefore,
commercial value of the land of the appellant has to be much more than the
value of the above-referred commercial properties. Referring to the above-
said documents Ex.P-29A to P-29C, learned Senior Counsel for the
appellant has submitted that even the value of the properties mentioned in
these exhibits, though was industrial, are ranging from Rs.38,000/- to
Rs.45,000/- per square yard.
7. Qua the assertions of the concrete market value of the land in
terms of money, learned Senior Counsel for the appellant has referred to the
sale exemplars from the surrounding property, namely, Vatika Mindscapes,
in which the developed property has been sold just before issuance of the
notification under Section 4 of the Act, at the rate of Rs.7,500/- per square
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feet super area, as is reflected in the completed transactions of sale in Ex.P-
33/A to Ex.P-33/D. Learned Senior Counsel for the appellant has further
relied upon the valuation report Ex.P-28A, to submit that taking the sale
price of the developed land, the govt. approved valuer has arrived at the
potential value of the undeveloped land by applying the method of reverse
calculations through deduction of development and construction charges.
As per that assessment, the market value of the land in the area has been
arrived at Rs.1 lakh per square yard. Learned Senior Counsel has relied
upon the judgment rendered by the Hon'ble Supreme Court in P.Ram
Reddy and others Vs. Hyderabad Urban Development Authority and
others (1995) 2 SCC 305, to support his argument that in case of sale
exemplar of the developed land, the method of reverse calculations by
deduction of the development and construction charges; so as to arrive at
the value of only the land, is the appropriate method. Hence, it is submitted
that the market value of the land of the appellant has to be taken, at least, at
Rs.1 lakh per square yard.
8. Learned Senior Counsel for the appellant has further submitted
that even before acquisition of the land, the appellant had applied for
permission for change of land use (CLU) after getting a certificate from the
authorities that this land is not going to be acquired. Simultaneously, the
appellant had also entered into a registered joint development agreement
with Adhiraj Construction Pvt. Ltd., and the same was already registered on
16.09.2011; much before the acquisition. As per the above-said
development agreement, the appellant was to receive the value of the land at
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the rate of Rs.1,09,998/- per square yard in addition to the enhanced value
on account of salable floor area ratio (FAR). The document to this effect has
also been placed on record as Ex.P-15A. Accordingly, learned Senior
Counsel for the appellant has submitted that the appropriate value of the
land of the appellant at the relevant time has to be taken somewhere
between Rs.1 lakh to Rs.1,60,000/- per square yard. Hence, the appellant is
entitled to the above-said amount as the amount of compensation alongwith
the requisite statutory benefits and the other benefits on account of
severance compensation and by doing away with the unnecessary
deductions made by the Reference Court.
9. On the other hand, learned counsel for the respondent No.1-
State of Haryana, which is the appellant in the State appeal, has submitted
that the Reference Court has exorbitantly enhanced the value of the land
from what was awarded by the Land Acquisition Collector. There is
absolutely no justification for enhancement granted by the Reference Court.
Carrying forward his arguments, learned counsel for respondent No.1 has
submitted that the Reference Court has gone wrong in treating the land of
the appellant to be 'Commercial' one. The Land Acquisition Collector had
rightly assessed the land of the appellant to be 'Industrial' in nature because
even the appellant-Company itself had asserted this fact in the objections
(Ex.P-11) filed by it under Section 5-A of the Act. Even the document Ex.P-
8, which is the purchase deed by the appellant, shows the land to be
industrial in nature. Therefore, there is absolutely no justification for
categorizing the land of the appellant to be commercial by unnecessarily
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changing its category from the industrial one. Rebutting the arguments of
learned Senior Counsel for the appellant that the govt. itself had declared
the area to be commercial one, learned counsel for respondent No.1 has
submitted that the notification referred to by the learned Senior Counsel for
the appellant, had never been issued by the State, rather, it was only a draft
notification, as such, and was not even published at the relevant time. The
final development plan was published only on 14.03.2018. Therefore, the
nature of land, as per the government notification, was changed to
commercial much after the notification issued for acquisition of the land of
the appellant. So far as the assertion of the appellant qua usage of the land
as commercial land is concerned, learned counsel for the respondent has
submitted that no doubt, the appellant had applied for CLU, however, the
application filed by the appellant was totally incomplete and, therefore, vide
communications Ex.HC-3 to Ex.HC-5, the appellant was required to fulfil
the conditions of C.L.U. and to remove the deficiencies. However, the same
were not complied with by the appellant. Accordingly, the application of the
appellant was ordered to be returned, vide Ex.HC-5, with liberty to the
appellant to take its documents back from the office. Hence, the market
value of the land has to be determined with reference to the potential of the
land as on the date of notification, no future prospects on account of
assumption of C.L.U. can be taken into consideration while determining the
market value.
10. Learned counsel for respondent No.1 has questioned the
finding recorded by the Reference Court that the documents Ex.R-3 to R-7
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are not to be read in evidence qua market value because the same reflect the
market value of the land even less than the value awarded by the Land
Acquisition Collector. He has further submitted that the said sale deeds
were not placed on record to seek any reduction of the market value as
determined by the Land Acquisition Collector, rather, the said sale deeds
were placed on record to show the market value of the land only to rebut the
assertions of the appellant seeking much higher value than the value
reflected in the actual sale deeds.
11. Learned counsel for respondent No.1 has also submitted that
there is no severance of the land of the appellant. Only one part of the land
of the appellant-Company has been acquired while its remainder land is as
one parcel only. Since, there is no severance of the land of the appellant in
parcels, therefore, the appellant is not entitled to any compensation on
account of severance, as such. Learned counsel for respondent No.1 has
relied upon the judgment rendered by the Hon'ble Supreme Court in Wazir
and another Vs. State of Haryana 2019(1) RCR (Civil) 702, wherein the
Hon'ble Supreme Court had reversed the judgment passed by this Court
granting 30% of the market value as severance compensation in a similar
situation where only front portion of the land was acquired, leaving the
entire other land of the affected land-owners in a single parcel. Hence, it is
submitted that on that count, no compensation can be awarded to the
appellant.
12. Learned counsel for respondent No.1 has submitted that value
of the land of the appellant has not even been diminished on account of lack
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of passage because the appellant is having at least two passages, one
through the building of the Metro Station and other from the back side of
the Metro Station, which has been created by the Metro authorities as a
service lane. Even, the Metro authorities have already filed an affidavit that
they have no objection to the appellant using both these passages. Hence,
the appellant is not rightly raising the argument that value of the land has
diminished because of non-availability of an appropriate passage. Not only
that, under the agreement, the appellant has even been given a right to
display the signage in specified dimensions on the property belonging to the
Metro authorities.
13. Qua the market value of the land, learned counsel for
respondent No.1 has submitted that learned Reference Court has gone
totally wrong in law in applying pure guess work based on some report of
the earlier Divisional Committee, which was constituted for the purpose of
another NHAI acquisition. The report of that Committee does not even
include the village in which the land of the appellant is situated. Moreover,
even as per the said report, the Committee had not recommended the market
value at the rate of Rs.70,000/- per square yard for any commercial land.
Otherwise, for the industrial land, the said Committee had recommended
only an amount of Rs.15,000/- per square yard as the market value. Hence,
reliance upon the said Committee report, to any extent, is totally uncalled
for and non-sustainable. Otherwise also, the market value of the land has to
be determined with reference to the independent evidence led on the file and
not with reference to any previous acquisition or a document relating to the
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previous acquisition. Learned counsel for the respondent has relied upon the
judgment rendered by the Hon'ble Supreme Court in Manoj Kumar Vs.
State of Haryana and others 2018(2) RCR (Civil) 815, to buttress his
arguments.
14. So far as the sale exemplars are concerned, the respondents
have placed on record the sale deeds as Ex.R-3 to R-7, details of which have
already been mentioned in the judgment of the Reference Court. As per
those sale deeds, the market value of the land ranged from Rs.161/- per
square yard to Rs.6,786/- per square yard. Out of this, the land of highest
value reflected in the sale deed Ex.R-3, pertains to the same village in which
the land of the appellant was situated and it reflects the market value of
Rs.6,786/- per square yard, in the year 2010, and the said sale deed pertains
to industrial land just like the land of the appellant. Therefore, market value
of the land could not have been assessed more than Rs.6,786/- per square
yard. Qua this sale deed, learned counsel for the respondent has fortified his
argument that though no witness was examined to prove the contents of this
sale deed, however, as per Section 51-A of the Act, once the registered sale
deed was being placed on record, then no witness was required to be
produced before the Court to prove the same. This has been so held by the
Hon'ble Supreme Court in Cement Corpn. of India Ltd. Vs. Purya and
others (2004) 8 SCC 270.
15. Referring to the sale deed placed on record by the appellant-
Company itself as Ex.P-29A, which is qua 21.6 square yards of commercial
land, learned counsel for respondent No.1 has submitted that although this
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sale deed was subsequent to the notification of the acquisition, yet the
market value even in this sale deed is reflected only at the rate of
Rs.46,296/- per square yard. No sale deed reflecting the higher market value
than this sale deed, has been placed on record by the appellant-land owner.
Referring to other documents placed on record by the appellant, learned
counsel for the respondent has rebutted that the sale exemplars in the Vatika
Mindscapes Commercial Complex and its surrounding properties, by
submitting that these are not, in fact, the sale deeds. Those are only the
agreements to sell and even that non-registered. Therefore, no evidentiary
value can be attached to the same, as such. Learned counsel for the
respondent has further submitted that since the said agreements are relating
to the transfer of rights and interest in the property of value of more than
Rs.100/-, therefore, unless the sale is registered, their evidentiary value has
to be totally discarded by the Court.
16. Rebutting the argument of learned counsel for the appellant
seeking parity with the developed area in the vicinity, qua its market value,
learned counsel for the respondent has relied upon the judgment rendered by
the Hon'ble Supreme Court in Lal Chand Vs. Union of India and another
2009(15) SCC 769, and has submitted that in the above-said case, the
attempt to calculate the market value, as per the brochure rates published by
the Delhi Development Authority for the developed area, was held to be not
proper. Therefore, market value of the land of the appellant cannot be
determined with reference to any rates of sale or rent as reflected qua the
developed area.
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17. Rebutting the submissions of learned Senior Counsel for the
appellant qua the development agreement with Adhiraj Construction Pvt.
Ltd., learned counsel for respondent No.1 has submitted that the said
transaction has been alleged to be fake, and an application has been filed
before the Court seeking prosecution of the appellant by exercising the
powers under Section 340 Cr.P.C. This complaint has been filed by the none
other than the erstwhile partner of the appellant-company. The said
application has already been brought on record before this Court as Ex.HC1.
The said application has highlighted the inter se collusive relations between
the Directors of both the firms, which were parties to the development
agreement. Hence, no value, as such, can be attached to the said agreement
as well.
18. Rebutting the above-said arguments of learned counsel for
respondent No.1, learned Senior Counsel for the appellant has submitted
that so far as the sale deed Ex.R-3 is concerned, there is nothing on record
to show the situation of the land vis-a-vis the land of the appellant or in
terms of its distance from the national highway. Still further, the sale in that
case was finalized in the year 2006, much before the date of publication of
notification of the present acquisition, as is evident from the documents
placed on record, though ultimately the sale deed was registered in the year
2010 due to continuous schedule of payment of sale consideration.
Therefore, by any means, the said sale deed does not serve any reference for
determination of the market value of the land. The same is the situation
regarding other sale deeds produced on record by respondent No.1. No facts
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regarding their situation or relativity to the highway have been brought on
record. Moreover, out of those sale deeds, the lands comprised in two of the
sale deeds, are relating to gair mumkin pahars or to the agriculture land at a
distant place, regarding which the location is not even mentioned. Learned
Senior Counsel for the appellant has also submitted that the sale deeds
produced by respondent No.1 have not even been proved as per law. Those
have just been tendered by the Govt. Pleader and not even by any witness,
as such.
19. Learned Senior Counsel for the appellant has further submitted
that whatever sale deeds, the appellant has placed on record qua the
industrial land, has been placed on record not to show the actual market
value of the land of the appellant, but only to reflect the market value of the
industrial land. The land of the appellant, as argued above, had acquired the
potentiality of the 'Commercial' land on the date of acquisition, therefore,
the land has rightly been treated as commercial by the Reference Court.
20. Regarding the judgment in the case of Lal Chand's case
(supra), as cited by learned counsel for respondent No.1, learned Senior
Counsel for the appellant has submitted that the said judgment is altogether
distinguishable and is not relevant for the decision of the present case. In
that case, the land acquired was undeveloped agriculture land situated in a
remote village, whereas, in the present case, land of the appellant is situated
within the municipal limits and is already fully developed and is also
surrounded by the legally existing licensed commercial properties.
Regarding the objection of learned counsel for the respondent qua the
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builder-buyer agreements, being not registered, learned Senior Counsel for
the appellant has submitted that no registration of the said agreements, as
such, is required. Otherwise, all the relevant witnesses i.e. sellers of the
property have already been examined by the appellant. Therefore, that
documents have to be taken into consideration while determining the value
of the land of the appellant.
21. Regarding the objections of learned counsel for respondent
No.1 qua the development agreement with Adhiraj Construction Pvt. Ltd.,
and the application under Section 340 Cr.P.C., moved by one of the
erstwhile partners, it is submitted by learned Senior Counsel for the
appellant that the application moved by the said person remains un-
prosecuted for more than past three years as of now. Not only that, the said
person himself has been claiming the benefits of the said development
agreement through the various e-mails sent to Adhiraj Construction Pvt.
Ltd. Hence, assertion of the State qua application under Section 340 Cr.P.C.
is totally irrelevant in the matter. Not only that, the dispute having arisen
between the appellant and Adhiraj Construction Pvt. Ltd., the matter was
referred to Justice (Retd.) A.P. Shah, as an Arbitrator, who had passed the
settlement Award for refund of some money by the appellant to Adhiraj
Construction Pvt. Ltd.
22. Qua the assertion made by learned counsel for respondent No.1
qua the right to signage and the right to use of passage from the back side of
the Metro Station, learned Senior Counsel for the appellant has referred to
MoU dated 17.12.2012, to submit that these rights were available to the
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appellant only during the construction of the Metro Station. However, after
the construction was complete, there has not been any fresh MoU or
authorization to the appellant for the right of signage or right to use the
backside passage. Rather, the Metro authorities have given in writing by
supplying the information under RTI that backside service lane was a
restricted and regulated through a gate as per the requirement and not a
public passage.
23. To rebut the arguments of learned counsel for respondent No.1
qua non-entitlement to the severance compensation, learned Senior Counsel
for the appellant has relied upon Clause 'fourthly' of Section 23(1) of the
Act, to buttress that any damage done to the value of the property of the
land-owner is also redressable through compensation under provisions of
law. Therefore, merely because land of the appellant has not been divided
into two parcels, is not the ground to deny the compensation on account of
diminishing the value of the land of the appellant.
24. Qua the judgment rendered in Wazir's case (supra), as cited
by learned counsel for the respondent, learned Senior Counsel for the
appellant has submitted that the said judgment is totally distinguishable and
not applicable to the facts of the present case for two reasons. Firstly, in the
said judgment, Clause 'fourthly' of Section 23(1) of the Act was not even
under consideration before the Hon'ble Supreme Court. Secondly, in that
case, the land-owner had sufficient approach to his land from other side and
the evidence had come in that case that after acquisition, the prices of his
remaining land had increased manifolds. However in the case of the present
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appellant, value of the land of the appellant has gone drastically downward.
25. Regarding return of the application of the appellant moved for
change of land use as well, learned Senior Counsel for the appellant has
submitted that what was returned by respondent No.1, was the first
application moved by the appellant. The second application (Ex.P15/1)
moved alongwith requisite fee for seeking change of land use for
establishment of I.T. Park, which is a commercial activity, was never
rejected, as such, till the date of notification of acquisition, nor any defect in
the same was pointed out by the respondent at any time.
26. Learned Senior Counsel for the appellant has pointed out that
report of the Divisional Committee was rightly made reference by the
Reference Court to the limited extent that the land in that report was also
abutting the National Highway-2 and the land of the appellant was also
abutting the national highway only. The villages to which that report
related, were 6 kms. away from the land of the appellant and even farther
from Delhi i.e. towards Faridabad. Therefore, value of the land of the
appellant has to be awarded on a higher side as compared to the market
value reflected in the said report. Hence, the argument of learned counsel
for the respondent denying credit for that report is altogether not
sustainable.
27. This Court has heard the arguments of learned counsel for the
parties and perused the record of the case.
28. The first question which has cropped up in the case is as to the
nature of the land of the appellant at the time of acquisition. The Land
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Acquisition Collector had assessed the value of the land at the rate of
Rs.8,000/- per square yard, as per the recommendations contained in the
Divisional Committee report, constituted by the State Government for the
purpose of the present acquisition. This nature of the land of the appellant
was taken by the Collector as per its existing use as 'industrial' unit.
However, the material placed on record shows that the land of the appellant
had acquired the characteristics of a 'commercial' land. Learned Senior
Counsel for the appellant has rightly placed reliance upon Ex.P-30
containing the details of licenses qua the surrounding properties for the
commercial use. Moreover, the document Ex.P-42 shows that the property
of the appellant is surrounded by the commercial properties on all the sides
except on the side on which the Metro Station has now been constructed.
The photograph shows that there exists Commercial Mall, named, Sewa
Grand Mall & Hotel Misaki, as well as, the Crown Business Park. The
unscaled site plans placed on record as Ex.P-9 and P-12/Y show that on the
left side of the property of the appellant is the office Complex called Vatika
Mindscapes and on the right side of the property of the appellant is the
commercial building of L & T Company and of another Company, named,
Clutch Auto. All these are the established and ongoing commercial
ventures since the time of acquisition of the property of the appellant. As
mentioned above, the documents Ex.P-31, Ex.P-38, Ex.P-40, Ex.P-41 and
Ex.P-46 amply show that the entire area of the appellant-Company had been
surrounded by the commercial malls, office spaces and multiplexes. Not
only that, even the appellant-Company itself had applied for the CLU for
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exploiting the property for commercial purposes. Although, learned counsel
for the respondent-State has submitted that the application of the appellant
already stood rejected by the competent authority in that regard, however,
the record shows that the appellant had applied for licence to use the
property as a commercial property for the first time; which was returned by
the competent authority with certain objections. However, again the
appellant-Company had applied for CLU for establishing an I.T.Hub and
commercial complex; alongwith requisite fee of about Rs.20 lakh. That
application was already pending before the authorities on the date of
issuance of the notification under Section 4 of the Act; qua acquisition of
the property of the appellant. Although, learned counsel for respondent No.1
has submitted that even the subsequent application had been rejected by the
competent authority because of a lot of shortcomings in the application
form, however, the record shows that the said application was rejected much
after the date of issuance of the notification. This rejection of the
application would not reduce the significance of the argument of the learned
Senior Counsel for the appellant qua the commercial nature of the property
because after issuance of the notification of the acquisition, even the
competent authority could not have granted the CLU permission qua the
land; which included the acquired land as well. Therefore, rejection of the
application for CLU for commercial use is more of a formality than having
any substantial effect of denuding the land of the appellant of the
characteristics of the same being a commercial land. The Reference Court
has considered all these aspects and have come to the conclusion that the
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land of the appellant was commercial in nature. In view of the above
discussion, this Court does not find any illegality or impropriety in the
findings recorded by the Reference Court in that regard. Hence, the nature
of the property of the appellant is held to be having 'commercial'
characteristics on the date of issuance of the notification.
29. Having come to the conclusion that the land of the appellant
was having commercial characteristics, the next question which crops up for
consideration of this Court is the fair market value of the land of the
appellant, to which the appellant could be entitled. As mentioned above, the
Land Acquisition Collector had relied upon the report of the Divisional
Level Committee, to award the amount of Rs.8,000/- per square yard
treating at as an 'industrial' property. The said Committee had recommended
Rs.16,000/- per square yard for the 'commercial' property. Although, the
parties to the present lis have led evidence of the sale transactions, however,
none of them is directly relevant as being qua the sale of the land in the
vicinity of the land of the appellant or in proximity of the time of issuance
of the notification. Seeking reduction in the amount awarded by the
Reference Court, learned counsel for respondent No.1-State has submitted
that the respondents have placed on record the sale exemplars showing that
rate of the land in the area concerned was much less than the one awarded
by the Reference Court. In fact, it was not even Rs.8,000/- per square yard.
However, the above-said sale deeds placed on record by respondent No.1-
State have rightly been rejected by the Reference Court on the ground that
the said sale exemplars are showing the market value even less than the one
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awarded by the Land Acquisition Collector. Since the sale exemplars placed
on record by respondent No.1 were not showing the value even upto the
mark at which the Land Acquisition Collector has granted the compensation
to the appellant, therefore, the said documents have to be taken only as
irrelevant for the purpose of the market value of land of the appellant.
Moreover, there is nothing on record to show the situation of the land
contained in the sale exemplars cited by respondent No.1 with reference to
its proximity to the land of the appellant which has been acquired. The said
sale deeds are even much prior in time, therefore, the same cannot serve as a
reference point for determining the market value of the land of the
appellant. Even the alleged sale exemplars placed on record by the appellant
are not qua the sale of the land, as such. Rather, the same are paid-up
'agreements to sell' qua the commercial spaces in the adjoining commercial
complex(s). To what extent, such sale exemplars can have evidence
significance, would be discussed hereinafter, however, suffice it to say that
such a sale exemplar, in itself, cannot be the straight reference point for
determining the value of the land.
30. Another aspect raised by the appellant; that it had entered into
an MoU with Adhiraj Construction Pvt. Ltd. for the development of the
commercial land and from there, the appellant was to get more than Rs.600
crore as profit, can also not be a reference point for determination of the
market value, as such. First of all, learned counsel for respondent No.1 has
pointed out that the Directors in the appellant-Company and some of the
Directors in Adhiraj Construction Pvt. Ltd. were common, therefore, the
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said MoU having been created for avoiding some legal and financial
consequences only cannot be ruled out. Although, the respondents have
disputed the bonafides of said MoU and have referred to the complaint
made by the one of the Directors of the Company alleging fraud in the said
MoU and an application under Section 340 Cr.P.C. being pending against
the Directors of the appellant, and the appellant has referred to the
arbitration proceedings between the two Companies to stress upon the
bonafides, however, whether the said agreement was bonafide or otherwise,
per se, is irrelevant for the purpose of determination of market value
because the said MoU can, at the best, fortify the case of the appellant that
the property was to be used as the 'commercial' property. Such MoU, in any
case, again, cannot be a reference point for determination of the market
value of the land of the appellant which it would have brought on the date
of issuance of the notification of the acquisition.
31. It is well settled by now that the market value of the acquired
land is the value which a willing buyer would offer to the willing land-
owner/seller as on the date of issuance of the notification; by considering all
its advantages and disadvantages. Therefore, it is the existing potential of
the land under acquisition which has to be the basis for determining the
market value of such land. Qua the advantages of the land in question, it has
come on record that the land of the appellant-Company was located at 12/4,
Milestone, Sector 27-D, Delhi Mathura Highway, Faridabad, in village
Sarai Khawaja, which is only about 1.5 km. away from Badarpur Border,
Delhi. The land of the appellant was rectangular in shape and one side of the
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land was abutting to the above-said national highway and was having a
substantial frontage on the main highway. Therefore, an intending buyer
would have considered the locational advantages, if one was to purchase the
said land on the date of acquisition.
32. It has come on record; and the Reference Court has so
considered that the earlier Divisional Level Committee while dealing with
an earlier acquisition made through an earlier notification dated 04.12.2009
had fixed the rates of about 12 villages for the acquisition of the land for
widening of the same highway on which the land of the appellant is
situated. The said Committee, vide its report dated 27.12.2010, Ex.P-37,
recommended the rate of commercial value of the land as Rs.50,000/- per
square yard in 09 villages. The above-said villages are towards Faridabad
side of the land of the appellant, and are at a more distance from Delhi
Border as compared to the land of the appellant. Moreover, the said rates
having been fixed for the earlier acquisition on the same highway, but for
the distant villages, can be taken as one of the guiding factors for the
determination of the value of the land of the appellant. Not only that, even
the sale deed Ex.P29/A, which is of village Sarai Khawaja only, though is of
a date subsequent to the notification and is for only 21.6 square yards,
however, even the said sale deed shows the market value of the land to be
Rs.46,296/- per square yard. This makes the report of the earlier Divisional
Level Committee even more relevant. Though, learned counsel for
respondent No.1 has submitted that the Divisional Level Committee report,
Ex.P-37, is not pertaining to the time of the present acquisition or to the
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village where the land of the appellant is situated, rather, the subsequent
Divisional Committee report Ex.R-1, prescribed only Rs.16,000/- per square
yard for the commercial land, however, it defies the logic that the Divisional
Level Committee could fix the commercial value of Rs.50,000/- per square
yard at an earlier point of time and for a place which was farther from Delhi;
and subsequently, the Divisional Level Committee would fix the rate of
commercial property for the land abutting to Delhi as low as Rs.15,000/- per
square yard. Therefore, the subsequent Divisional Level Committee report,
by any means, cannot be the reference point even as per the standards of
assessment of the govt. authorities. Needless to say that there is nothing on
record to specifically show any disadvantage of the land of the appellant
vis-a-vis the land of 09 other village for which the commercial rate for the
land was fixed by the Divisional Level Committee, at Rs.50,000/- per
square yard.
33. For claiming compensation at par with the properties qua which
the agreements to sell were entered into in the adjoining commercial
complexes, the appellant while relying upon the documents Ex.P-33/A to
Ex.P-33/D, has suggested that the market value of sold out commercial
spaces in those malls was Rs.2,41,007/- per square yard. After deducting the
development expenses, the market value of the land would be about
Rs.1,60,415/- per square yard. Therefore, the said value should be granted
to the appellant. Learned Senior Counsel has relied upon the judgment of
the Hon'ble Supreme Court rendered in P.Ram Reddy's case (supra), to
support his contentions in this regard, however, this argument of learned
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Senior Counsel for the appellant has its own fallacy, as would be explained
herein below. Not only that, learned Senior Counsel for the appellant has
also relied upon Ex.P-28A, the report of the govt. approved valuer, who has
given the valuation of the land of the appellant by taking the building
potentiality of the land of the appellant and the entire sale value thereof; and
then by making the deductions of construction and other charges by making
reverse calculations. Learned Senior Counsel for the appellant has asserted
that even as per the value arrived at by the govt. approved valuer, the rate
comes at about Rs.1,09,998/- per square yard. However, these arguments of
learned Senior Counsel for the appellant cannot be taken on their face value.
No doubt, the Hon'ble Supreme Court in the judgment rendered in P.Ram
Reddy's case (supra), has held that the building potentiality of the
acquired land can be made basis for the determination of the market value,
however, this judgment does not approve of any specific heads of
permissible deductions and the calculations as to how the value of the land
only is to be assessed after taking the sale price of the developed
commercial spaces in already constructed commercial mall(s). It only talks
of determination of value of only the land by suggesting certain general
development costs deductions. Needless to say that there is a huge
difference between the existence of only the land having commercial
building potentiality and the existence of already developed commercial
complex. If the valuation, as suggested by learned Senior Counsel for the
appellant; and as made by the govt. approved valuer, are taken as the basis,
then these calculations would assume the existence of already constructed
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and running mall, whereas, none exists on the land of the appellant. If the
sale exemplars in the adjoining commercials malls are being made the basis,
then one has to realize that for construction of a commercial complex on a
huge chunk of land would involve hundreds of crores of financial
investment, if not of thousand crores. Availability of such huge amount
with the appellant could not be just presumed. And if the appellant was to
arrange such amount as fund from the financial institutions, then there
would have been a huge debt servicing liability, as well as, investment of
human efforts and resources therein. Therefore, by merely reducing the
construction and brokerage charges etc., from the value of the developed
commercial space in the adjoining commercial complex, value of the land of
the appellant could not be assessed. It is the common knowledge that a
developed commercial mall gets its own commercial value which is much
higher than the sum total of mere value of the land and the development
charges incurred on the construction of the mall, which have been deducted
by the govt. approved valuer in his report Ex.P-28A. The developed mall
has its own market value which may not necessarily have any significant
relation with the value of the land on which it is developed. Craving of the
traders having enough money to have the commercial space in already
developed mall and the competition therefor, can artificially raise the value
of the commercial space in the mall to such an extent which virtually has no
connection with the value of the land, as such. Therefore, neither the sale
exemplars suggesting the market value of the land acquired to be
Rs.1,60,415/- per square yard based upon the adjoining commercial malls
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nor the valuation report Ex.P-28A statedly prepared by the govt. approved
valuer could be legitimately made an exclusive basis for determining the
market value of the land, as such. Moreover, it has already been repeatedly
held that the expert report can hardly be the basis for determination of the
value of the acquired land, which has to be determined with reference to
hard facts and the material brought on record of the case. Therefore, the
above-said report of the govt. approved valuer does not suggest the correct
market value of the land. Moreover, even as per the said report, while
calculating the building potentiality, the govt. approved valuer has given
benefit of extra space based on the permissible FAR to calculate the actual
value of the entire space in the mall. However, as observed above, there
was no existing mall on the land of the appellant and if the appellant was to
bring a mall into existence that would have been contingent upon so many
factors, including thousands of crores of rupees as finance. Hence, value of
the land cannot be determined with reference to what benefit of permissible
FAR would have been available on construction of the mall on the same. No
intending purchaser would have given the value of the FAR as well to the
appellant as on the date of the notification for acquisition of the land.
Whatever benefit the FAR would have brought that would have been the
creation of the independent finance and effort of the intending purchaser, of
which the appellant is not entitled to take advantage by raising the
assumptions and presumptions. Even in case of P.Ram Reddy (supra),
though the Hon'ble Supreme Court held the building potentiality method of
evaluation, however, in that case, the Hon'ble Supreme Court has held that it
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is value of 'land' which is to be paid as compensation, and not the value of
commercial spaces, as such. So far as the value of the land only is
concerned, even the above said report of the govt. approved valuer has
assessed the value of the land only at the rate of Rs.6,786/- per square ft.,
which translates into about Rs.61,000/- per square yard. Therefore, the
report of the govt. approved valuer can, at the best, be suggestive of the
value of the land to be Rs.61,000/- per square yard.
34. Accordingly, keeping in view the fact that the Divisional Level
Committee had recommended the market value of the commercial land to be
Rs.50,000/- per square yard for an earlier acquisition on the same highway,
but at a place which is distant from the land of the appellant with reference
to Delhi Border and by applying an appropriate time based enhancement
and with reference to the market value of the land only, as is coming from
even the report of the govt. approved valuer mentioned above, as well as, by
applying some rationale guess work, the market value of the land could
have very well been assessed to be Rs.70,000/- per square yard, as has been
done by the Reference Court. Qua this finding as well, this Court does not
find any ground to interfere. Neither there is any material on record to
suggest that the value is in excess nor is there any concrete material to show
that the value could have been enhanced any more. Therefore, market value
of the land of the appellant is assessed to be Rs.70,000/- per square yard. In
this regard, it deserves to be mentioned that although learned Senior
Counsel for the appellant has referred to the land of Crown Business Park
and has submitted that the same Reference Court has assessed the market
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value of the land of that land-owner at the rate of Rs.80,000/- per square
yard for the commercial land, despite the fact that the said land is situated at
about 6 kms. away from the land of the appellant, but away from Delhi,
therefore, the appellant also deserves to be granted market value of
Rs.80,000/- per square yard, however, this argument of the counsel has to be
noted only to be rejected. Though, the locational advantage can be taken as
a basis for the appropriate guess work for arriving at an appropriate market
value, however, the concrete market value cannot be determined with
reference to a location and distance between the two properties with
reference to Delhi only. Needless to say that within the city of Delhi itself,
there could be so many places where the value of the commercial land could
be even less than what has been awarded to the appellant. The entire aspect
would depend upon the actual situational aspect, actual usage and the actual
surrounding circumstances of a property. It has come on record that the
above-said land-owner was granted higher value of commercial land
because the said land was having established commercial mall with
completion and occupation certificates, as well as, having the operational
commercial spaces at the same place. Therefore, there can hardly be any
parallel between the two land owners and their properties, as such.
35. Another aspect which this Court finds, rather surprising, is the
deduction applied by the Reference Court, to the market value assessed for
the land of the appellant. For determining the compensation payable for the
land of the appellant, the Reference Court has applied 20% deduction to the
determined market value on the ground that the 'purpose' of acquiring the
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land was to construct a metro Station, and other common facilities like
parking etc., which would be used by the public at large, therefore, the
project being a project of public importance, the appellant has to contribute
towards that purpose, and hence, 20% deduction was required to be made. It
deserves to be clarified in no uncertain terms that no charge can be levied
upon the patriotism of a citizen. No land-owner can be put to extra
disadvantage only for the reason that some project of public importance was
to be developed on his land. The appellant being a land-owner was
concerned with the market value of its land, of which it has been deprived
for a wrong reason. The law requires that the appellant was fully entitled to
the fair market value of the land without any ifs and buts. The appellant
was under no liability to develop a Metro Station which could be used by
the general public. It is the liability of the concerned govt. to spend money
for construction of the Metro Station and the development of the necessary
appurtenant facilities at the costs of the State revenue, if it is a public
project. No private person can be forced to contribute towards a project
only because such a project is of public importance and a person is having
money or is to receive the money on account of acquisition of his land. The
Hon'ble Supreme Court has held in case of Subh Ram Vs. State of
Haryana and others, (2010) 1 SCC 444 that no deduction in payable
compensation could be made on account of 'purpose' of acquisition. Hence,
the deduction applied by the Reference Court is thoroughly irrational,
unjustified, and hence, cannot be sustained. This kind of approach is not
even expected from a Court of the level of the Reference Court, as such.
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However, probably, the Court below has been carried away by certain
observations made in some judgments of the Hon'ble Supreme Court
wherein without much dilating upon the nature of the land of sale exemplar
(s) and extent of development on that land, it has been observed that if the
land is being acquired for the development of a housing project, then the
deduction of 30% as development charges was the well settled rule.
However, neither there is any such settled rule nor can there be any such
settled rule ever. The above-said observations of the Hon'ble Supreme
Court have been made only as an attempt towards standardization of a
guesswork for arriving at the market value of the acquired land in those
cases where the sale exemplar was qua a land which fulfilled the
contingency of full civic development. The concept of deduction on account
of the development expenses has very limited application only in a case
where the sale exemplar cited by the land-owner is of the property situated
in the residential area developed by the govt. housing authority and is
having all specified civic amenities and the acquired land is fully
undeveloped land. In that case, there can be some justification for reducing
the compensation to some degree on the rationale that to bring the acquired
land of the land owner at par with the land contained in the sale exemplars,
certain expenses would be required to be meted out, and hence, deductions
by the reverse calculations would be required to be made. This concept has
very limited application if the sale exemplar is from the land developed by a
private developer where there is no guarantee of full development of civic
amenities, as has been held by the Hon'ble Supreme Court in case of Lal
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Chand Vs. Union of India (2009) 15 SCC 769. This kind of deduction
has no place even in a case where the sale exemplar is for a property
situated in an unauthorized colony where there is no certainty of provision
of all or any civic amenities, or is from the residential area where the houses
have been constructed in a haphazard and random manner. Therefore, the
concept of deduction on account of development expenses can be applied
only in a case where there is an evidence qua the development activities in
the area of sale exemplar and there is no development at all in the land
being acquired. This can be very well understood if one reads the judgments
of the Hon'ble Supreme Court rendered in Anjani Molu Desai Vs. State of
Goa (2010) 12 SCC 707 and in the case of Haryana State Agricultural
Market Board Vs. Krishan Kumar (2011) 15 SCC 297, simultaneously.
Accordingly, the deduction of 20% applied by the Reference Court to the
compensation payable for the land of the appellant assessed by that Court, is
hereby set aside.
36. Another significant aspect which has been overlooked by the
Reference Court is that the value of the remainder land of the appellant at
that place has been diminished to a huge extent. So much so, the remainder
land of the appellant has not even been given any independent access to the
National Highway, despite the fact that in the objections raised under
Section 5-A of the Act, the appellant had highlighted this aspect. The only
passage available to the remainder land of the appellant is through the
building of the Metro Station. Therefore, the access to and from the
remainder land of the appellant can be only through the restricted area
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available under the building of the Metro Station. Because of such
restriction, it may not even be possible to take heavy construction
machinery to the land of the appellant easily. Not only that, the remainder
land of the appellant is sandwiched on three sides by the other commercial
lands of the other land-owners and on the side of the National Highway, the
entire frontage of the land of the appellant has been covered by the building
of the Metro Station which is having the height of about 32 metres.
Accordingly, the remainder land of the appellant is not even visible from
the National Highway. Hence, the status of the remainder land of the
appellant having been degraded from the one being a prime land having its
one entire side abutting to the National Highway to a land which is not even
visible from the National Highway any more. Another interesting aspect in
the case is that during hearing of the present appeals as well, the appellant
had offered to sell the land to either the Metro Rail authorities or to the
government at the same rates which were determined by the Reference
Court for value of land 12 years back. Both the authorities were called upon
to consider the proposal. However, none of them had shown interest to
purchase the land even at such a depreciated price. Therefore, applying the
standard test of price to be offered by an intending willing buyer, one can
safely say that the value of the land of the appellant has been diminished, at
least, to the extent of 50%. The remainder land of the appellant cannot now
be put to any meaningful and paying commercial use. The appellant
deserves to be compensated for the same. Hence, the appellant is entitled to
50% of the market value as a compensation for the damage to the value of
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the remaining land of the appellant. Although, learned counsel for
respondent No.1 has submitted that no compensation on account of
severance of land can be awarded to the appellant because its remaining
land is left only in a single parcel without there being a division, however,
this argument cannot stand in the way of the appellant in view of the
provisions contained in Clause 'fourthly' of Section 23(1) of the Act. Hence,
the appellant is held entitled to the compensation to the extent of 50% of the
market value assessed for the land, on account of diminishing of value of
the remaining land of the appellant.
37. Needless to say that the appellant shall also be entitled to the
statutory benefits and the interests at the rate prescribed in the Act, on
account of delay in payment. The necessary payments are ordered to be
made within 03 months.
38. In view of the above, RFA-2532-2021 filed by the land owner-
Company is allowed in the above said terms. However, RFA-2529-2021
filed by the State of Haryana is hereby dismissed.
39. All pending miscellaneous applications in both the cases shall
stand disposed of.
25.04.2024 (RAJBIR SEHRAWAT)
parveen kumar JUDGE
Whether reasoned/speaking? Yes/No
Whether reportable? Yes/No
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