(Per : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. This appeal is filed by the original claimants seeking enhancement of compensation for acquisition of their land. They have challenged the judgement and award dated 16.11.2006 passed by learned Additional Senior Civil Judge and JMFC, Valsad in Land Acquisition Reference No.51/2002.
2. Notification under section 4(1) of the Land Acquisition Act was issued on 24.7.1997 with respect to land bearing survey no.93 paikee of village Daheri, Taluka Umbergaon, District Valsad admeasuring 9 Hectares 35 Are 84 sq. mtrs of the ownership of present appellants. Declaration under section 6(1) of the Act was issued on 28.7.1998. Land Acquisition Officer passed his award on 28.11.2000 and awarded compensation at the rate of Rs.9.55 per sq. mtr. The claimants, not satisfied by such award accepted the compensation under protest and sought reference before the District Court. They claimed compensation at the rate of Rs.200/ per sq. meters. Such reference came to be dismissed in entirety by the Reference Court. The claimants have therefore, filed this appeal seeking enhanced compensation.
3. Before the Reference Court, the claimants examined Hasmukhlal Vrajlal Darji, appellant no.1 herein. He produced several sale instances at exh.23 to 28 in support of the claimants' prayer for enhancement in the compensation. The witness stated that the land was agricultural land and had irrigation facility. He was taking two crops in a year. He was cultivating paddy, sugarcane etc. and earning income of Rs.40,000/ per vigha from such cultivation. Non agricultural lands surrounded his land. Some of them also had constructed properties on them. GIDC Umbergaon surrounded his land. The land was situated on the road connecting village Daheri to Umbergaon station. The land was acquired for the expansion of GIDC. He relied on several transactions of land in nearby villages which were produced at exh.23 to 28. He stated that village Daheri is a highly developed village with facilities such as electricity, water, telephone connections. There are residential societies in the village. Village also has schools, bank and post office. He stated that he had applied for converting his land to non agricultural use.
In his cross examination, this witness could not show any material to establish that he was growing sugarcane, paddy etc. on the land. He also could not show any source of irrigation nor could he show accounts for establishing that he was earning profit of Rs.40,000/ per vigha per year from such cultivation. He agreed that application for converting the land into NA use was rejected. He however, denied that such an application was made only to get higher compensation for the land which was to be acquired. With respect to the sale instances produced by him, it was put to him that all such instances pertained to non agricultural land to which he agreed. He agreed that part of his land was grass land.
4. This was the only witness examined by the claimants. The opponents also did not examine any witnesses nor produced any documents.
5. On the basis of oral as well as documentary evidence produced before the Reference Court, the Court formed an opinion that the claimants failed to establish their case for grant of higher compensation. The Court was of the opinion that none of the sale instances produced at exh.23 to 28 were comparable. In short, the Reference Court found no case for grant of enhancement.
6. Before us learned counsel Ms. Archana Amin for Mr. G.M. Amin for the appellants contended that the Reference Court committed a grave error in rejecting the reference of the claimants in entirety. She submitted that the transactions evidenced in the documents exh.23 to 28 would show that the market value of the land on the date of section 4 notification was much higher. She further submitted that the land was situated in highly developed area and had non agricultural potential. The Land Acquisition Officer had awarded compensation which was grossly inadequate.
7. On the other hand, learned counsel Shri G.D. Bhatt appearing for the acquiring body and learned AGP Mr. Rahul Dave for the Land Acquisition Officer opposed this appeal contending that the burden was on the claimants to establish that the compensation awarded by the Land Acquisition Officer was inadequate. It was contended that no evidence was produced with respect to the agricultural production or the profit that the claimants earned from such agricultural activities. The sale instances and other documents produced did not represent comparable sale instances. It was pointed out that the areas of land covered under such transactions were extremely small. All the transactions pertained to non agricultural lands whereas the land in question was a large piece of agricultural land.
8. Having thus heard learned counsel for the parties, it is our duty to ascertain whether any compensation higher than what was awarded by the Land Acquisition Officer is required to be granted to the claimants. It is well settled that the claimants are entitled to compensation for the acquired land on the basis of market value of the land obtaining on date of publication of notification under section 4(1) of the Land Acquisition Act. While determining such market value of the land, Courts resort to either the comparable sale instances method or rely on the yield method or base their conclusion on the opinion of experts on prevailing market rates. In the present case the claimants tried to establish the case of additional compensation on the basis of yield method as well as on the basis of comparable sale instances.
9. Insofar as yield method is concerned, we are of the view that the Reference Court was perfectly justified in not basing its conclusions on the agricultural produce and the income generated from such agricultural activities over the land in question. This is so because the claimants failed to produce any evidence with respect to such yield. Only witness Hasmukhlal Vrajlal Darji, exh.15, examined by the claimants in his oral evidence did suggest that the land had source of irrigation; that atleast two crops per year were being cultivated; that they were growing crops such as paddy, sugarcane, etc. and through such agricultural operations they were earning profit of Rs.40,000/ per vigha per year. However, no evidence was produced in this regard. Source of irrigation was not established. The nature of crops was not proved. The profit margin was nowhere indicated except through oral statement. Accounts were not maintained and even if maintained, were not produced. No bills for purchase of seeds, fertilizer, pesticides were produced. No receipts of sale of farm produce were brought on record. Thus, it would be highly unsafe to base one's conclusion on the premise of yield method, the claimants having failed to prove the level of income generated from such agricultural operation. From the revenue record as well as through cross examination of witness, it has come on record that part of the land was grass land and not cultivable.
10. The question is, whether the comparable sale instance method could and should have been applied in the present case. As already noted, the Reference Court discarded all the instances produced at exh. 23 to 28 on the premise that none of them represented comparable sale instances. Reference Court was particularly influenced by two factors. Firstly, that all the lands covered under such transactions were non agricultural lands against the agricultural land which was acquired and secondly, that the sale instances represented lands which were part of GIDC Estate.
11. In this respect we may peruse the evidence more closely. From the oral evidence of the witness Hasmukhlal Vrajlal Darji, it has come on record that the land was situated in the village which was highly developed. The village had post office, bank, schools, electricity and water facilities. There were residential societies and shopping centres also situated in the village. Further, the land itself was adjacent to the existing GIDC Estate. The witness specifically stated that around his land under acquisition, GIDC Umbergaon Estate was situated. Southeastern border of the GIDC touched his land. The land was situated on the main road leading from village Daheri going to Umbergaon station. These aspects were virtually uncontroverted. In the cross examination also, the opponents never questioned the witness on these material aspects.
We therefore, proceed on such basis. It is also an admitted position that the land was acquired for expansion of GIDC Umbergaon.
12. We may now advert to exh.23 to 28. Perusal of these documents reveal following data :
13. It is undoubtedly true that the above instances represent the sale or lease of non agricultural lands and that such lands covered relatively small areas as compared to the land under acquisition. Question is should such transactions be totally disregarded or can with some deduction such sale transactions be relied upon for ascertaining the market value of the land on the date of section 4(1) notification.
14. In the present case, notification under section 4(1) of the Act was issued on 9.7.1997. Thus the fact that all the transactions covered by these exh.23 to 28 were for period prior to the date of notification and in fact within the close proximity of such date.
15. Insofar as lands covered under exh.23 to 26 are concerned, they admittedly represented a very small area of land. For example, exh.23 pertained to 1047.24 sq. mtr. of land, exh.24 pertained to 971 sq. mtr. of land, exh.25 pertained to 360 sq. mtr. of land and exh.26 pertained to 276.9 sq. mtr. of land. All these lands were admittedly non agricultural lands. They were acquired for different nonagricultural purposes such as for industrial use and/or for residential purpose in residential societies. Further exact location of these lands visavis the acquired land has also not been brought on record. Considering these diverse factors, it would not be possible for us to base our assessment of market value of the land on the basis of sale price indicated in such transactions. In that sense, we are in agreement with the view of the Reference Court that these transactions did not represent comparable sale instances.
16. Documents at exh.27 and 28, however, represent somewhat different picture. Exh.27 was sale deed of a piece of land admeasuring 21752 of village Gandhiwadi, Umbergaon. Area of land cannot be stated to be insignificant. Such land was sold at the rate of Rs.150/ per sq. mtr. In this case also, the land forms part of village Gandhiwadi. Relative position of such land with that of present land under acquisition, has not been brought on record. All that is stated is that the land was situated in a nearby village. We would therefore, not base our conclusions solely on the basis of such sale transaction. However, it gives some idea of land prices in the region at the relevant time, ofcourse for non agricultural land. One thing however, is clear that the areas of the land was quite sizable.
17. Transaction exh.28, however, needs to be seen very closely. It was a deed of assignment of right over the plot no.30 of GIDC, Umbergaon. The plot area was 5234 sq. mtr. Deed was executed on 23.5.95. Consideration was paid at the rate of 149.22 per sq. mtr. We are of the opinion that such transaction cannot be discarded for variety of reasons. Firstly, it was a transaction which was entered into before section 4(1) notification in the present case. Secondly, it was an area of land which cannot be stated to be insignificant. Thirdly, the land was situated in GIDC, Umbergaon which is situated adjacent to the acquired land. In fact, as noted earlier, the acquired land touches the border of south eastern portion of GIDC Umbergaon. Land in the present case was being acquired for expansion of GIDC Umbergaon. Considering all these factors after providing appropriate deduction, the market value of the land under acquisition as on date of section 4(1) notification can be judged. By virtue of section 51A of the Land Acquisition Act such document was admissible in evidence. The consideration indicated therein was not disputed by the respondents. Even otherwise, it was a transfer of a plot of land in GIDC estate which would go through legal formalities. Transaction had taken place more than a year before Section 4(1) notification in the present case. No allegation was made that price was inflated to show higher consideration in anticipation of the acquisition. We therefore, have no hesitation in believing that the price indicated therein represented the correct market price for that land.
18. Additionally, we must bear in mind the situation of the land. It is situated in a village which had all the facilities such as roads, banks, schools, hospital etc. It was abutting on a road leading to railway station nearby. It shared boundary with existing GIDC estate and was being acquired for expansion of the same GIDC. The land, though agricultural land, thus had nonagricultural use potential.
19. In this respect, we may refer to the decision of the Apex Court in case of Special Land Acquisition Officer & anr. v. M.K. Rafiq Saheb reported in AIR 2011 Supreme Court 3178. In the said decision, the Land Acquisition Officer had awarded compensation at the rate of Rs.1,30,000/ per acre. Upon reference at the instance of the claimants, the Reference Court enhanced such compensation to Rs.4,00,000/ per acre. The claimants challenged such award before the High Court. High Court enhanced the compensation to Rs.35,17,470/ per acre. It was this judgement of the High Court which was challenged by the Special Land Acquisition Officer before the Apex Court. One of the contentions raised was that the land under acquisition was an agricultural land and the sale instances relied upon by the High Court related to sale of a small piece of non agricultural land. The Apex Court rejected the contention that the land should have been treated as an agricultural land making following observations :
“16. Otherwise also, we are of the opinion that in light of the fact that the land was situated by the side of a residential locality and was in the midst of a highly developed industrial locality, the acquired land was capable of being used for nonagricultural purposes and should be considered as nonagricultural land in determination of compensation. We find support in this reasoning from the judgment of this court in Anjani Molu Dessai v. State of Goa and Anr., reported in (2010) 13 SCC 710. The relevant portion of the said judgment is set out below:
"5. The High Court has also referred to the situation of the property and has noted that the acquired lands are in a village where all basic amenities like primary health centre, high school, post office were available within a distance of 500 meters. It can therefore be safely concluded that the acquired lands are not undeveloped rural land, but can be urbanisable land situated near a developed semiurban village with access to all infrastructure facilities."
The contention that sale instances relating to small piece of land cannot be compared with a larger area under acquisition, is also rejected observing as under :
“18. The judgment of the High Court is well reasoned and well considered. We find no perversity in its reasoning. The only issue is that Ex. P5, which was relied upon by the High Court, relates to a small piece of land, whereas the acquisition is of a larger piece of land. It is not an absolute rule that when the acquired land is a large tract of land, sale instances relating to smaller pieces of land cannot be considered. There are certain circumstances when sale deeds of small pieces of land can be used to determine the value of acquired land which is comparatively large in area, as can be seen from the judicial pronouncements mentioned hereunder.
19. It has been held in the case of Land Acquisition Officer, Kammarapally Village, Nizamabad District, Andhra Pradesh v. Nookala Rajamallu and Ors., reported in (2003) 12 SCC 334 : (AIR 2004 SC 1031: 2003 AIR SCW 6674) that:
"6. Where large area is the subjectmatter of acquisition, rate at which small plots are sold cannot be said to be a safe criterion. Reference in this context may be made to few decisions of this Court in Collector of Lakhimpur v. Bhuban Chandra Dutta, AIR 1971 SC 2015; Prithvi Raj Taneja v. State of M.P., AIR 1977 SC 1560 and Kausalya Devi Bogra v. Land Acquisition Officer, AIR 1984 SC 892.
7. It cannot, however, be laid down as an absolute proposition that the rates fixed for the small plots cannot be the basis for fixation of the rate. For example, where there is no other material, it may in appropriate cases be open to the adjudicating Court to make comparison of the prices paid for small plots of land. However, in such cases necessary deductions/adjustments have to be made while determining the prices."
The Apex Court went on to observe that in the normal course of events, it is hardly possible for a claimant to produce sale instances of large tracks of land. Such sale are generally very far and few. The Court should look into sale instances of smaller pieces of land while applying reasonable element of deduction. While saying so, the Apex Court increased the deduction of 50% applied by the High Court to 60% on this factor.
20. We are therefore, of the opinion that the basis for awarding compensation in the present case can be taken from transaction exh.28. However, substantial adjustment must be made due to certain factors. Such factors are that the land under acquisition was agricultural land visavis the land covered under transaction at exh.28 which was non agricultural land. It was situated in GIDC estate. It was being acquired for industrial use. In addition to making adjustment for a larger plot of land covered under the acquisition visavis relatively smaller piece of land relied upon by the claimants, further deduction shall have to be made, since in the present case, substantial investment and improvement shall have to be made before such land can be put to industrial use. The acquiring body would have to provide for internal roads, drainage, electricity, levelling, plotting, etc. before such land can be offered for industrial use. Ordinarily, the Courts have been adopting deduction in the range of 30 to 70% depending on facts and circumstances of each case. In the present case, we are required to make deduction on two counts. Firstly, on account of comparing the sale instance of a small piece of land visavis a relatively larger piece of land under acquisition. Secondly, for the purpose of comparing the agricultural land under the acquisition with the sale instance which represents non agricultural land acquired for the purpose of industrial use.
21. In the present case, if we round off the rate indicated in transaction exh.28 to Rs.150/ per sq. mtr and apply deduction of 70%, it would come to Rs.45/ per sq. mtr. Even such rate in our opinion would be on the higher side looking to the vast area of agricultural land being acquired which would have to be developed, plotted, before it can be put to industrial use. Further sizeable area would be covered for internal roads and common facilities. Considering such factors we are of the opinion that if we assess market value of land at the rate of Rs.30/ per sq. mtr as on date of section 4(1) notification, same would serve the purpose of justice. Some amount of guesswork and estimation is always involved in any such exercise. In the present case facts are very peculiar. We have had to make our estimates on the basis of few isolated sale instances that too representing the land used for industrial purpose. We have therefore, adopted this formula which may not have application in ordinary cases.
22. Thus considering the totality of facts and circumstances of the case as recorded, we are of the opinion that claimants should be awarded compensation at the rate of Rs.30 per sq. mtr. with attendant statutory benefits. The Land Acquisition Officer having already granted compensation at the rate of Rs.9.55 pe sq. mtr., the claimants would thus receive additional compensation at the rate of Rs.21.45 per sq. mtr. They will also be entitled to solatium and additional payment under Section 23(1A) of the Act and statutory interest on such additional payments. Judgement and award of the Reference Court stands modified accordingly.
23. Appeal is disposed of in above terms.
R and P be transmitted to the trial Court.
(Akil Kureshi,J.) (C.L. Soni,J.) (raghu)