Court No. - 59
Case :- FIRST APPEAL No. - 836 of 1988 Appellant :- Anek Singh Respondent :- State Of U.P. And Another Counsel for Appellant :- G.N. Verma,A.P. Paul,B.B. Paul,Shashwat Kishore Chaturve,Vinod Kumar Agarwal Counsel for Respondent :- V.B.L Srivastava,Ashish Agarwal,Ashish Agrawal,M.C.Chaturvedi AND Case :- FIRST APPEAL No. - 1124 of 2003 Appellant :- Bhunda Ram Respondent :- State Of U.P. And Ors Counsel for Appellant :- G.N. Verma,A.P. Paul,B.B. Paul,Pramod Kumar Jain,Shashwat Kishore Chaturve,Vinod Kumar Agarwal Counsel for Respondent :- Addl. C.S.C.,Ashish Agarwal,M.C Chaturvedi,V.B.L. Srivastava
Hon'ble Surya Prakash Kesarwani,J.
1. Heard Sri P.K. Jain, learned senior advocate assisted by Sri S.K. Chaturvedi, learned counsel for the claimants-appellants and Sri M.C. Chaturvedi, learned senior advocate assisted by Sri Ashish Agarwal, learned counsel for the respondent-U.P.S.I.D.C.
2. Both the appeals relate to the same acquisition and the impugned judgments are almost similar and therefore, with the consent of learned counsels for the parties, both the appeals are heard together.
3. Briefly stated facts of the present case are that by Notification under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act') published in the Gazettee on 05.02.1977, land of village Annanpura, Tehsil and District Mathura measuring 263.05 acres was acquired for U.P.S.I.D.C. for planned industrial development. Notification under Section 6 was published on 07.02.1977. Possession was taken on 13.05.1977. The Special Land Acquisition Officer made the award on 30.08.1980 determining compensation on the basis of soil quality of the acquired land as under:
Soil Quality Rate per acre Baraha Avval Chahi Rs.1489.93 Baraha Avval Khaki Rs.6923.35 Baraha Doyam Chahi Rs.7972.35 Baraha Doyam Khaki Rs.4825.37 Putha Khaki Rs.3143.98
4. Dissatisfied with the offer made by the aforesaid award, some tenure holders filed references under Section 18 of the Act. Such a reference being L.A.R. No.4 of 1984 (Bunda Ram vs. State of U.P.), has been decided by the impugned judgment dated 29.09.1986 passed by District Judge Mathura, whereby he affirmed the compensation determined by the Special Land Acquisition Officer. This judgment is subject matter of First Appeal No.1124 of 2003. The other L.A.R. No.3 of 1984 (Anek Singh vs. State), was decided by court of District Judge, Mathura by judgment dated 29.09.1986 by which he affirmed the compensation determined by the S.L.A.O. This judgment is subject matter of challenge in First Appeal No.836 of 1988.
5. Learned counsel for the claimants-appellants submits that in L.A.R. No.34 of 1979 (Chandra Kishore vs. U.P.S.I.D.C.), decided on 22.07.1982, the compensation was determined @ Rs.15/- per square meter with respect to land of another village Bhainsa on the basis of circle rate fixed by the Collector for payment of stamp duty for roadside land. Copy of a judgment of reference court has been filed in the connected First Appeal No.1124 of 2003 under Order XLI Rule 27, C.P.C. which was passed in L.A. Case No.19 of 1979 (Bahadur Singh and 9 others vs. U.P. State) relating to compensation of plot No.280 measuring 3.36 acres and plot No.283 measuring 1.61 acres situate in village Bhainsa, Tehsil and District Mathura acquired on 05.02.1977, on which certain shops were existing and the compensation was determined @ Rs.20/- per square yard on the ground mentioned in paragraph-12 of the judgment that lekhpal was examined who stated that the opposite parties are selling part of the acquired land @ Rs.21/- per square meter. Learned counsel for the appellants therefore, submits that in view of the aforesaid two judgments of reference court, the appellants are entitled for compensation of the acquired land @ Rs.20/- per square yard. He relied upon judgment of Hon'ble Supreme Court in the case of Ashok Kumar vs. State of Haryana [(2016) 4 SCC 544] and Narendra and others vs. State of U.P. and others [(2017) 9 SCC 426].
6. Learned counsel for the respondents supports the impugned judgment and submits that the aforesaid two judgments of reference court relied by learned counsel for the appellants are wholly contrary to law. He submits that in the case of Bahadur Singh, the compensation was determined on the basis of the rate of Rs.21/- per square meter at which the U.P.S.I.D.C was selling well developed industrial plots. So far as the judgment of the reference court in the case of Chandra Kishore (supra) relied by the appellants is concerned, it also relates to compensation of a land consisting several shops, situate in a different village. He relied upon a judgment of Hon'ble Supreme Court in the case of Jawajee Nagnatham vs. Revenue Divisional Officer, Adilabad, Andhra Pradesh [(1994) 4 SCC 595].
7. I have carefully considered the submissions of learned counsel for the parties and perused the record.
8. I find no force in the submissions of the learned counsels for the appellants. Reliance placed upon a judgment dated 22.07.1982 in L.A.R. No.34 of 1979 (Chandra Kishore vs. UPSIDC) passed by the reference court determining the compensation @ 15% per square meter, is wholly misconceived. The reason is that the aforesaid decision in L.A.R. No.34 of 1979 relates to determination of compensation with respect to land of a different village, i.e. Bhainsa. That apart, the reference court determined compensation on the basis of circle rate fixed by the Collector for payment of stamp duty for roadside land which is not permissible. It is settled law that market value of an acquired land shall be determined in accordance with the principles mentioned in Section 23(1) of the Act.
PRINCIPLES FOR DETERMIANTION OF COMPENSATION:-
9. The provisions of Section 23(1) of the Act providing for determination of compensation, has been authoritatively explained by Hon'ble Supreme Court in series of the judgments.
10. In Chimanlal Har Govinddas v. Special Land Acquisition Officer (1988)3 SCC 751 (Para 4), Hon'ble Supreme Court laid down broad principles to be followed in determination of compensation of land acquired under Section 4 of the Act, which has been consistently followed and has also been followed in recent decisions in Union of India vs. Dyagala Devamma and others, (2018) 8 SCC 485 and Manoj Kumar and others v. State of Haryana and others (2018)13 SCC 96 (Para 25), as under:
“4. The following factors must be etched on the mental screen:
(1) A reference under section 18 of the Land Acquisition Act is not an appeal against the award and the Court cannot take into account the material relied upon by the Land Acquisition officer in his Award unless the same material is produced and proved before the Court.
(2) So also the Award of the Land Acquisition officer is not to be treated as a judgment of the trial Court open or exposed to challenge before the Court hearing the Reference. It is merely an offer made by the Land Acquisition officer and the material utilised by him for making his valuation cannot be utilised by the Court unless produced and proved before it. It is not the function of the Court to sit in appeal against the Award,approve or disapprove its reasoning, or correct its error or affirm, modify or reverse the conclusion reached by the Land Acquisition officer, as if it were an appellate court.
(3) The Court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it.
(4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in the Court. Of course the materials placed and proved by the other side can also be taken into account for this purpose.
(5) The market value of land under acquisition has to be determined as on the crucial date of publication of the notification under Section 4 of the Land Acquisition Act (dates of Notifications under sections 6 and 9 are irrelevant).
(6) The determination has to be made standing on the date line of valuation (date of publication of notification under Section 4) as if the valuer is a hypothetical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price.
(7) In doing so by the instances method, the Court has to correlate the market value reflected in the most comparable instance which provides the index of market value.
(8) Only genuine instances have to be taken into account. (Some times instances are rigged up in anticipation of Acquisition of land).
(9) Even post notification instances can be taken into account (1) if they are very proximate,(2) genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects.
(l0) The most comparable instances out of the genuine instances have to be identified on the following considerations:
(i) proximity from time angle,
(ii) proximity from situation angle.
(11) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-a-vis land under acquisition by placing the two in juxtaposition.
(12) A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in terms of price variation as a prudent purchaser would do.
(13) The market value of the land under acquisition has there after to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors.
(14) The exercise indicated in clauses (11) to (13) has to be undertaken in a common sense manner as a prudent man of the world of business would do. We may illustrate some such illustrative (not exhaustive) factors:
Plus factors Minus factors
1. smallness of size 1. largeness of area
2. proximity to a road 2. situation in the interior at a distance from the Road
3. frontage on a road 3. Narrow strip of land with very small frontage compared to depth
4. nearness to developed area
4. lower level requiring the depressed portion to be filled up
5. regular shape 5. remoteness from developed locality
6. level vis-a-vis land under acquisition
7. special value for an owner of an adjoining property to whom it may have some very special advantage 6. some special disadvantageous factor which would deter a purchaser
(15) The evaluation of these factors of course depends on the facts of each case. There cannot be any hard and fast or rigid rule. Common sense is the best and most reliable guide. For instance, take the factor regarding the size. A building plot of land say 500 to 1000 sq. yds cannot be compared with a large tract or block of land of say l0000 sq. yds or more. Firstly while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a lay out, carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers (meanwhile the invested money will be blocked up) and the hazards of an entrepreneur. The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approximately between 20 percent to 50 percent to account for land required to be set apart for carving out lands and plotting out small plots. The discounting will to some extent also depend on whether it is a rural area or urban area, whether building activity is picking up, and whether waiting period during which the capital of the entrepreneur would be looked up, will be longer or shorter and the attendant hazards.
(16) Every case must be dealt with on its own fact pattern bearing in mind all these factors as a prudent purchaser of land in which position the Judge must place himself.
(17) These are general guidelines to be applied with understanding informed with common sense.”
(Emphasis supplied by me)
What is Market Value:-
11. Thus, as per settled principle of law, compensation for the land acquired has to be determined at market value. Market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when led out in most advantageous manner excluding any advantage due to carrying out of the scheme for which the property is compulsorily acquired. The determination of market value is the prediction of an economic event viz. a price outcome of hypothetical sale expressed in terms of probabilities. For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality.
Principles for Determination of Market Value:-
12. Important principles for determination of market value of acquired land as settled by Hon'ble Supreme Court in various judgments may be summarized as under:-
(i) While fixing the market value of the acquired land, comparable sales method of valuation is preferred than other methods of valuation of land such as capitalisation of net income method or expert opinion method. Comparable sales method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issue of notification under Section 4 of the Act. However, comparable sales method of valuation of land for fixing the market value of the acquired land is not always conclusive but subject to the following factors:-
(a) Sale must be a genuine transaction,
(b) the sale deed must have been executed at the time proximate to the date of issue of notification under Section 4 of the Act,
(c) the land covered by the sale must be in the vicinity of the acquired land,
(d) the land covered by the sales must be similar to the acquired land
(e) the size of plot of the land covered by the sales be comparable to the land acquired.
(f) if there is dissimilarity in regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is open to the Court to proportionately reduce the compensation for acquired land.
(ii) The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-a-vis the land under acquisition.
(iii) For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality.
(iv) Deduction not to be done when land holders have been deprived of their holding 15 to 20 years back and have not been paid any amount.
(v) When there are several exemplars with reference to similar lands, it is the general rule that the highest of the exemplars, if it is satisfied, that it is a bonafide transaction has to be considered and accepted. When the land is being compulsorily taken away from a person, he is entitled to the highest value which similar land in the locality shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition. (Ref. (2012) 5 S.C.C 432, Mehrawal Khewaji Trust (Registered ), Faridkot and others Vs. State of Punjab and others).
(vi) In view of Section 51A of the Act, 1894 certified copy of sale deed is admissible in evidence, even the vendor or vendee thereof is not required to examine themselves for proving the contents thereof. This, however, would not mean that contents of the transaction as evidenced by the registered sale deed would automatically be accepted. The legislature advisedly has used the word 'may'. A discretion, therefore, has been conferred upon a Court to be exercised judicially, i.e., upon taking into consideration the relevant factors. Only because a document is admissible in evidence, the same by itself would not mean that the contents thereof stand proved. Having regard to the other materials brought on record, the Court may not accept the evidence contained in a deed of sale. (Ref. (2004) 8 S.C.C 270 para 28 and 38, Cement Corpn. Of India Ltd. Vs. Purya and others).
(vii) While fixing the market value of the acquired land, the Land Acquisition Collector is required to keep in mind the following factors:
(a) Existing geographical situation of the land.
(b) Existing use of the land.
(c) Already available advantages, like proximity to National or State Highway or road and/ or developed area,
(d) Market value of other land situated in the same locality/ village/ area or adjacent or very near the acquired land.
(viii) Section 23(1) of the Act lays down what the Court has to take into consideration while Section 24 lays down what the Court shall not take into consideration and have to be neglected. The main object of the enquiry before the Court is to determine the market value of the land acquired.
(ix) The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like water, electricity, possibility of their further extension, whether near about town is developing.
(x) In fixing market value of the acquired land, which is undeveloped or under-developed, the Courts have generally approved deduction of 1/3rd of the market value towards development cost except when no development is required to be made for implementation of the public purpose for which land is acquired {Reference: (2011) 8 SCC 91, Valliyamal and another vs. Special Tehsildar Land Acquisition and another (Paras 13 to 19)}.
(xi) Deduction of "development cost" is the concept used to derive the "wholesale price" of a large undeveloped land with reference to the "retail price" of a small developed plot. The difference between the value of a small developed plot and the value of a large undeveloped land is the "development cost".[Ref. (2012) 7 S.C.C 595 para 21, Sabhia Mohammed Yusuf Abdul Hamid Mulla (dead) and others Vs. Special Land Acquisition Officer and (2010) 1 SCC 444 (Paras- 24 & 25), Subh Ram vs. State of Haryana].
(xii) The circle rate filed by the Collector or valuation register maintained by the Revenue Authorities under the Stamp Act, 1899 are irrelevant and cannot form a valid criteria to determine market value of land acquired under the Act, 1894, unless such determination is under a statutory obligation and after following a prescribed procedure. {Reference: Jawajee Nagnatham v. Revenue Divisional Officer, Adilabad, A.P. and others, (1994) 4, SCC 595, the Land Acquisition Officer v. Jasti Rohini (1995)1 SCC 717, U.P. Jal Nigam v. M/s Kalra Properties (P) Ltd. (1996) 3 SCC 124, Krishi Utpadan Mandi Samiti v. Bipin Kumar, (2004) 2 SCC 283}.
13. Thus, the judgment of reference court in the case of Chandra Kishore (supra) relating to compensation of land of a different village, is of no help to the claimants-appellants. That apart, circle rate fixed by the Collector for the purposes of stamp duty is not a valid criteria to determine the market value of land acquired under the Act unless such determination is under a statutory obligation and after following a prescribed procedure.
14. The second submission based on the judgment of the reference court in the case of Bahadur Singh and 9 others (supra) in L.A. Case No.19 of 1979 is also wholly irrelevant. Firstly the judgment in L.A. case of the reference court in Bahadur Singh and 9 others (supra) has no relevance for determination of compensation of land of the claimants-appellants inasmuch as that judgment relates to land of a different village and secondly, the determination of compensation in the said L.A. case was wholly erroneous and contrary to law laid down by Hon'ble Supreme Court in the case of Ranvir Singh vs. Union of India (2005) 12 SCC 59 (paragraphs-24 to 30), in which Hon'ble Supreme Court laid down the law that market value of a fully developed land cannot be compared with the wholly undeveloped land although they may be adjoining or situated at a little distance.
15. Thus, both the submissions made by the learned counsels for the claimants-appellants, deserve to be rejected and is hereby rejected.
16. In view of the above discussion, the judgment of Hon'ble Supreme court in Ashok Kumar (supra) and Narendra and others (supra), relied by learned counsels for the claimants- appellants are wholly distinguishable on facts of the present case.
17. For all the reasons afore-stated, both the appeals are dismissed.
Order Date :- 30.04.2019 NLY