Bombay High Court
The State Of Maharashtra vs The Walchandnagar Industries Ltd on 19 November, 2008
Author: B.H.Marlapalle
Bench: B.H.Marlapalle, D.B.Bhosale
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE SIDE
First Appeal No.653 of 1991
The State of Maharashtra Appellant
Vs.
The Walchandnagar Industries Ltd. Respondent
With
First Appeal No.709 of 1991
The Walchandnagar Industries Ltd. Appellant
Vs.
State of Maharashtra Respondent
Mrs.G.P.Mulekar, AGP for State.
Mr.S.U.Kamdar i/b.Mrs.S.V.Sonawane for claimant -
company.
CORAM: B.H.MARLAPALLE & D.B.BHOSALE,JJ.
Reserved on : August 28, 2008.
Pronounced on : November 19, 2008.
JUDGMENT (PER B.H.MARLAPALLE,J.) :
1. These First Appeals are directed against the award dated 14/3/1990 passed by the learned Extra Joint District Judge, Pune in Land Reference No.6 of 1982.
2. The Government of Maharashtra had published a notification under Section 4 of the Land Acquisition ::: Downloaded on - 09/06/2013 14:04:32 ::: 2 Act, 1894 ("the Act" for short) on 26/10/1972 for acquisition of the lands located in village Kumbhargaon, Taluka Indapur, Dist. Pune as they were falling under the submergence of the Ujani Dam Water.
The Land Acquisition Officer passed his first award on 13/3/1976 and he did not grant any compensation to the company except an amount of Rs.53,668/- towards the labour charges for the removal of material. The SLAO passed his second award on 9/12/1981 and granted compensation to the claimant-company as under:-
(a) Jirayat superior land admeasuring 4 H. 87 R. at the rate of Rs.3000/- per hectare Rs. 14,610.00
(b) Jirayat inferior land admeasuring 27 R. at the rate of Rs.1500/-
per hectare Rs. 405.00
(c) Pot Kharaba land admeasuring
1 H. at the rate of Rs.200/- per
hectare. Rs. 314.00
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Total Land Value Rs. 15,329.00
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(d) Value of wells Nil
(e) Value of structures Nil
(f) Embankment 39,032.94
(g) CD works 43,491.12
(h) Labour charges for removing
rails and steel sleepers 12,754.17
(i) Solatium 16,591.08
--------------
1,27,198.31
ig ==============
The company in its claim dated 25/10/1976 had claimed
a total amount of Rs.1,31,039/- in respect of the
length of the trolley line submerged in the
backwater i.e. 6 to 7 kms. The company had made an
additional claim of Rs.1,49,85,251/- by way of
severance and injurious affection for the trolley
line becoming obsolete and running through the
unacquired portion of about 28 kms. and the same was
rejected on the ground that the figures mentioned in
the claim were arbitrary and no separate compensation
for severance and damages was awarded in land
acquisition cases of Takrarwadi and Diksal through
which the trolley line was passing. The Land
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Acquisition Officer also noted that the company had
already started transportation by road even prior to
the relevant dated i.e. 27/9/1972 as transportation by trolley line was not found to be economical.
3. The claimant - company has its factory at Walchandnagar and initially it was engaged in manufacturing of sugar, with a crushing capacity of about 1750 metric tons of sugar-cane per day. It has established ig a well developed self contained township around the factory area, not only for its industrial workforce and officers but also for the residence of its employees. At the relevant time it was employing about 4500 workmen. Subsequently the factory started manufacturing industrial machinery for the sugar factories and was supplying the same to various locations in India as well as abroad. It also started manufacturing and supplying cement machinery for setting up cement plants. It also started manufacturing other engineering goods and products and was a supplier for defence and other Government establishments. It also established its own distillery at Walchandnagar and a separate division of manufacturing of plastic articles and goods. The ::: Downloaded on - 09/06/2013 14:04:32 ::: 5 Walchandnagar township has been provided with all the necessary facilities, amenities and utility services like roads, water supply, drainage, electricity, educational institutions and so on and so forth. At the relevant time there were about 200 teachers in the schools run by the claimant - company in Walchandnagar area and there were about 5000 students in all these schools. This township also has well equipped hospital, sports facility and playground for tennis and cricket etc. The township also has post and telegraph ig office, banks and bus stand of MSRTC along with well laid down and organised bazarpeth.
The population of the township at the relevant time was about 20,000. Its surplus land was taken over by the Government of Maharashtra and handed over to the Maharashtra State Farming Corporation Ltd. For the purpose of its trading and manufacturing activities, the claimant - company was required to depend upon the Indian Railways for transport of machinery, goods, raw materials and other manufacturing goods including exports of sugar bags and machinery from Walchandnagar. The nearest railway station on the Central Railway was at a distance of 30 Kms. from Walchandnagar and there was no direct railway connection from the said station to Walchandnagar.
::: Downloaded on - 09/06/2013 14:04:32 ::: 6The claimant - company, therefore, laid down a trolley line, by acquiring lands from farmers, so as to connect Walchandnagar to Bhigwan railway station.
It had to construct a number of culverts, embankments and bridges as well as necessary structures for this trolley line which was about 36 Kms. in addition to 14 Kms. within the township. The company had also constructed a yard with a big siding at Bhigwan railway station and constructed various buildings along the trolley line, for the trolley line staff.
The rolling ig stock for the trolley line consisting of engines, wagons, carriages, tankers etc. were also purchased by the company and it was running diesel locomotive on the said line.
4. On account of construction of the Ujani Dam on the Bhima river near Indapur a large lake was formed behind the dam spreading the dam waters and, therefore, about 7 Kms. of the trolley line came under the water submerged area of the said land and passing through the villages such as Tarkar Wadi, Bhigwan, Diksail, Dhalj, Kumbhargaon. In the award passed on 13th March 1976 the compensation for the lands covering 6 Kms. trolley line was not granted but in the subsequent award dated 9/12/1981 the ::: Downloaded on - 09/06/2013 14:04:32 ::: 7 Special Land Acquisition Officer awarded the compensation in respect of Survey Nos.296 and 325.
However, no compensation was paid for the remaining 28 Kms. of the trolley line on account of damages for severance, injurious affection and diminution etc. The claimant - company, therefore, submitted its claim statement on 25/10/1976 and claimed compensation for damages and injurious affection of the trolley line. The details of the compensation claimed were as under:
.
Claim for severance Rs.1,13,947/-, 15% solatium - Rs.17,092/- and claim for damages and injurious affection for the trolley line becoming obsolete - Rs.1,49,85,251/-. Thus the total claim preferred was Rs.1,51,16,290/-.
5. The Land Acquisition Officer passed his award on 9/12/1981 and awarded compensation of Rs.1,27,198.31 (Rupees one lakh twenty seven thousand one hundred ninety eight & paise thirty one only).
The claimant - company was not satisfied with the said award and, therefore, submitted an application under Section 18 of the Act on 12/1/1982 to the ::: Downloaded on - 09/06/2013 14:04:32 ::: 8 Special Land Acquisition Officer claiming compensation of Rs.1,51,16,290/- (One crore fifty one lakhs sixteen thousand two hundred ninety only) with a prayer to refer the same to the Court for enhancement of compensation. In the application filed on 12/1/1982 before the SLAO, the Company claimed a total compensation of Rs.2,22,09,845/- and also for interest at the rate of 4% per annum under Section 34 of the Act from the date of possession till the date of payment of compensation. In Exhibit "A" to the ig said application, the summary of claim for compensation was set out under three different heads, namely, (A) Compensation for the land, (B) Compensation for Severance and (C) Compensation towards Injurious Affection. More particularly, the claim made under these three heads was as under:-
(A) Land in Acquisition in Kumbhargaon Village
1. Lands acquired 20 H. 74 Rs. Rs. 50,325.00
2. Embankment Rs. 63,850.00
3. C.D. Works Rs. 68,200.00
4. Trees Rs. 360.00
---------------
Total Rs.1,82,735.00
5. Solatium @ 15% 27,410.00
---------------
Total Rs.2,10,145.00
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(B) Severance
1. Lands 60.38 Hectares Rs. 6,03,800.00
2. Dimunition in value for
lands in Walchandnagar
Township Rs. 8,64,000.00
3. Embankment, C.D. Works &
Buildings Rs.18,85,200.00
4. Trees 27,000.00
---------------
Total Rs.33,80,000.00
---------------
(C) Injurious Affection
1. Rails Sleepers etc. Rs.48,45,000.00
2. Telephone Line Rs. 16,000.00
3. Rolling stocks Rs.22,17,600.00
4. Increase in transportation
costs Rs.80,07,180.00
5. Remoddelling of Bhigwan
Yard Rs. 4,72,100.00
6. Loss of earnings (profits) Rs.35,62,000.00
7. Retrechment compensation Rs. 1,00,000.00
-----------------
Total Rs.1,92,19,880.00
-----------------
6. The impugned award is in two parts. The first part of the award deals with the company's claim under Clauses thirdly and fourthly of Section 23(1) of the Act on account of severance and injurious affection in respect of the trolley line running across 28 kms. in the unacquired portion of the land admeasuring 60.38 H. (width of the trolley line was any where between 60 ft. to 100 ft.), whereas the second part of the award is in respect of the trolley line spread over about 7 kms. and in the area ::: Downloaded on - 09/06/2013 14:04:32 ::: 10 submerged in the backwater. In the first part of the award, the Reference Court has allowed the claim as under:-
(A) Severance (Rs.)
1. Diminution in value
of land in Walchandnagar
Township Nil
2. Land (60 H. 38 R) 1,50,950.00
3. (a) Embankments 16,83,758.00
(b) C.D. Works 2,27,597.00
(c) Wells 21,000.00
(d) Structures & Buildings 83,664.00
4. Trees ig Nil
(B) Injurious Affection
1. Retrenchment Compensation 10,000.00
2. Increase in Transportation Cost 8,00,718.00
3. Loss of Earning (Profits) Nil
4. Telephone Line Nil
5. Rails and Sleepers 31,21,816.00
6. Rolling Stock 17,79,884.00
7. Remodelling of Bhigwan Yard 1,30,338.00 The total compensation granted by the Reference Court is Rs.80,09,725/- and it rejected the claim of the remaining amount i.e. 1,41,20,974/-.
. In the second part of the award in respect of the trolley line running across 7 kms., the Reference Court has granted compensation as under:-
::: Downloaded on - 09/06/2013 14:04:32 ::: 11(a) Compensation for land admeasuring 6 H. 71 R. at uniform rate of Rs.4000 per H. 26,840.00
(b) Embankment 62,661.25
(c) CD works 56,250.00
(d) Trees Nil
7.
The claimant-company has filed its appeal being dis-satisfied with the award passed by the Reference Court and it contends that the entire amount claimed i.e. Rs.2,19,99,880/- ought to have been granted by the Reference Court and there was no justification in denying the balance amount of Rs.1,41,20,974/-.
8. The State Government filed its Written Statement at Exh.17 before the reference court and opposed the claim. It was contended that only 6 Kms.
of the trolley line was running over the land submerged in the backwater and the SLAO had already granted compensation for the same. So far as the ::: Downloaded on - 09/06/2013 14:04:32 ::: 12 remaining 30 Kms. of trolley line was concerned, it was submitted that the Company did not adduce satisfactory evidence before the SLAO and, therefore, the said claim was rejected. It was claimed that the compensation demanded was an imaginary and fantastic amount and there was absolutely no possibility of any damage being caused to 30 Kms. stretch of the trolley line. There was no difficulty in using the unacquired portion of the trolley line for transportation and for the remaining stretch of 6 Kms., it ig was possible for the Company to build an alternative trolley line. It was in the year 1974 the claimant-company informed the State Government regarding the prohibitive costs of building the additional stretch of trolley line and, therefore, it had decided to drop the acquisition for diversion of the trolley line. The company resorted to transport by road sometimes in September, 1972 as it was very economical and safe mode of transportation, as per the State Government. It was also alleged that the use of trolley line for transportation was for a seasonal period, limited to about 4 to 6 months a year and for the remaining period transportation was by road. It was denied that transportation by road was costlier than the Rail transportation. It was ::: Downloaded on - 09/06/2013 14:04:32 ::: 13 also pointed out that the trolley line was built in the year 1946 between Walchandnagar Township and Bhigwan Railway Station admeasuring about 36 Kms.
9. The Company examined 18 witnesses and the State Government examined 5 witnesses. The whole claim of the Company was based on the sole ground that the trolley line could not be used as 6 Kms. of its stretch had submerged in the backwater of Ujjani Dam and, therefore, it was required to abandon the trolley line ig in its entirety and resort to road transportation. As per the company the costs of transportation of goods by the trolley line was 20 paise per tone per km., whereas by the road transport (by trucks) the transportation cost came to 80 paise per tone per km. and thus resulting into an increase of 60 paise per tone per km. It further claimed that the trolley line was transporting about 35000 MT of goods per year and the same would increase year by year in future. The Company claimed that the increase in transportation cost would come to Rs.8,07,718/- per year.
9A. When both the parties had examined several witnesses, as noted hereinabove, it was possible to ::: Downloaded on - 09/06/2013 14:04:32 ::: 14 calculate the difference, if any, between the transportation cost by trolley line and the transportation cost by road and fix the compensation amount to be given to the Company. Unfortunately, none of the parties put up their case in the said manner before the Reference Court and in fact in our considered opinion which also has been supported by the learned counsel for the respective parties that it could have been just and proper to consider only the additional component of transportation cost, if any, and award ig compensation to the Company so as to meet its claim in its entirety, rather than considering the claim under various heads like severance and injurious affection etc. For the first time the learned AGP tried to convince us that the company's claim was required to be considered only for the additional transportation cost and she urged before us to consider the evidence adduced by the parties only to calculate the additional cost, if any, that was required to be incurred by the claimant-company and substitute the award only by granting compensation for additional cost of transportation. We are afraid, this cannot be done by the Appellate Court when the parties did not put up such a case before the Reference Court and indeed ::: Downloaded on - 09/06/2013 14:04:32 ::: 15 the additional cost of transportation was one of the components considered under the head of Injurious Affection by the Reference Court. Though, we agree that the company's case for severance and injurious affection was not required to be considered if the claim was considered by the Reference Court only for the additional cost of transportation, because the entire stretch of 30 Kms., including the land remained with the Company and so was the case with the buildings and structures along with the said stretch of ig the trolley line. Even the locomotives, trolleys, wagons, rails, girders and so on and so forth could have been sold by the Company and it could not be permissible to claim compensation on the ground of non use of trolley line if the award was limited only to find out the compensation payable for the additional transportation cost. Be that as it may, we will proceed to consider the challenge to the award by both the parties on merits and as per the compensation claimed and granted under different heads, in the impugned award.
10. Section 23 (1) of the Act states that in determining compensation to be awarded for the land acquired, the court shall take into consideration-
::: Downloaded on - 09/06/2013 14:04:32 ::: 16first, .......
secondly.......
thirdly, the damage (if any), sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of severing such land from his other land;
ig fourthly, the damage (if any), sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings;
fifthly, .......
sixthly, .......
. The Reference Court, therefore, considered the ::: Downloaded on - 09/06/2013 14:04:32 ::: 17 case of the Company under sub-clause thirdly and fourthly of Section 23 (1) of the Act. The Reference Court reproduced the following observations of the Supreme Court in the case of Balammal and ors. vs. State of Madras and ors. [AIR 1968 SC 1425], 1425] "Where there is nothing to prove that the owners had sustained any loss by reason of the severance of the land from their other lands, nor is there any evidence to prove that by reason ig of the acquisition the remaining lands were injuriously affected or the earnings of the owners were affected, nor is there any evidence to show that there was any damage resulting from diminution of the profits of the land between the time of the publication of the declaration and the time of taking possession of the land, the owners cannot claim compensation in respect of the damages due to the severance of their lands."
10A. So far as the compensation in the second part of the award is concerned, the Land Acquisition Officer had fixed the market value of the land at different rates for different kind of lands i.e. ::: Downloaded on - 09/06/2013 14:04:32 ::: 18 Jirayat superior - Rs.3000/- per hectare, Jirayat inferior - Rs.1500/- per hectare and Pot Kharaba land
- Rs.200/- per hectare.
. The Reference Court did not agree with this valuation and it noted that when the entire land was submerged under the backwater, there was no justification in making classification of the entire land admeasuring 6 H. 71 R. in different categories. The Reference Court considered the evidence of ig Shri Talim (PW 15) and Shri Gham (DW 1).
Both of them had agreed and based on the earlier award passed in LAR No. 169 of 1977 that the market value could be uniformally fixed at Rs.6250/- per hectare. By giving due allowance to the compact land and its restricted demand, the Reference Court fixed the market rate of the land at Rs.4000/- per hectare uniformally and the learned counsel for the claimant-company had consented for the same. Thus the total compensation amount came to Rs.26,840/- for the land. Out of the total land of 6 H. 71 R., land admeasuring 3 H. 13 R. was owned by the Maharashtra State Farming Corporation and, therefore, an amount of Rs.12,520/- was directed to be paid to the said Corporation. The remaining amount of Rs.14,320/- in ::: Downloaded on - 09/06/2013 14:04:32 ::: 19 respect of 3 H. and 58 R. of land was directed to pay to the company. As regards the embankment for the acquired portion of village Kumbhargaon, there was no dispute that the quantity was 13502 cubic mtrs. The Reference Court accepted the valuation of Shri Talim (PW 15) of the total quantity of embankment at Rs.70,000/- but it did not agree with the depreciation rate of 9.1% fixed by the said witness. On the other hand, DW 1 had calculated the depreciation at the rate of 44%. The Reference Court rejected both ig and fixed the depreciation at 25% from the estimated cost of the claim i.e. Rs.70,000/- and thus fixed the net value for compensation at Rs.52,661.25 paise. Similarly, for the CD works the value estimated by PW 15 was Rs.75000/- and he had allowed depreciation at 9.1%. The witness of the State i.e. DW 1 Shri Gham had estimated the CD work cost at Rs.65,744/- and allowed depreciation at 33.85%. The Reference Court accepted the estimated cost at Rs.75000/- and fixed the depreciation rate at 25% and calculated the net compensation payable at Rs.56,250/-. We are satisfied that no interference is called for in the second part of the award in respect of the trolley line area submerged in the backwater and running across about 7 kms. The ::: Downloaded on - 09/06/2013 14:04:32 ::: 20 Reference Court rightly rejected the additional payment under Section 23(1A) as the award was passed on 9/12/1981 and the possession of the land was lost in the year 1976. However, the Reference Court awarded the increased solatium under Section 23 (2) of the Act but denied the benefit under Sections 28 and 34 of the Act. We shall deal with this issue of benefits under Sections 28 and 34 of the Act while dealing with the first part of the award.
11. At the out set, while considering the main issue as to whether the impugned award in the first part calls for interference in favour of either of the parties or both of them, we must note that the evidence on record clearly demonstrated the steps taken by the State Government to bring to the notice of the Company way back in the year 1967 that it would be advisable for it to lay an alternative trolley line in place of the stretch of 6 kms.
running through the submerged area in the backwater of Ujani Dam. The State Government in its Written Statement also emphasised this issue and pointed out that the Company did not take due steps to lay an alternative trolley line so that the entire stretch of the trolley line from the Company premises to ::: Downloaded on - 09/06/2013 14:04:32 ::: 21 Bhigwan Railway Station could be continued as in the past and thereby without affecting the transportation cost on the goods movement. The Company on its part claimed before the Reference Court that laying of an alternative line was impossible as the length of the trolley line would have increased and acquiring of the land stretched over a distance of about 11 or 18 kms. on the alternative line was impossible. PW 9 Shri D.M. Kothadiya had stated while in the witness box that the company had a plan of having an alternative trolley ig line after the acquisition of the part of the old trolley line and in that connection he had talks with the Collector, Pune as well as the Secretary in the Revenue Department, Government of Maharashtra. He also claimed to have held discussions with the Agriculturists through whose lands the proposed line would pass and such discussions had taken place between 1972 to 1974. He further stated that the Government was willing to acquire the land for the Company for the new line but was not inclined to apply for urgency clause for acquisition and none of the agriculturist had shown willingness to sell the land by consent. He, therefore, stated that under such circumstances it would have taken 5 to 6 years for completing the ::: Downloaded on - 09/06/2013 14:04:32 ::: 22 acquisition of the land and the equal time span for completing the diverted trolley line. In his cross-examination by the learned DGP, it clearly came out that the witness was not disclosing the facts before the court. He admitted in his cross-examination as under:-
". A plan was prepared for the diverted route of the trolley line. There was no written correspondence made with the agriculturist. It was not found necessary to do so. I cannot tell when for the first time we requested Government to apply urgency clause but it was some time after 1972. I know that some meetings had taken place of the officials of the company with Pune Divisional Commissioner in respect of the proposed diverted route and I was not with those officials. I do not know if there was any resolution passed by the company for proposing a diverted route.
. For every outgoing letter an outward number is given. There is no outward number given to letter at Sr.No.2 with list Exh. 48.::: Downloaded on - 09/06/2013 14:04:32 ::: 23
I cannot say if this letter was sent by post or per messenger. The copy is not signed by Shri S.G. Shah, my superior. I do not know if there are any postal acknowledgement about reaching of these two letters. I do not remember if from 1967 there was proposal to divert the trolley line. I cannot say if Executive Engineer had sent letter to our company in 1967. I cannot tell if any letter was really sent by our company to Mantralaya for applying urgency clause. I again say that letters were sent..... It was some time in 1974 to 1976 that the company gave up idea of a diverted route for trolley line...."
. PW 1 - Kamlakar Paranjpe admitted in his cross-examination that in the year 1967 the Government had called upon the Company to send a proposal for diversion of the trolley line and in the same year the Company had given the proposal for acquisition of land for the same. But he did not know if a letter was sent to the Collector by the Company on 26/7/1974 informing that the company did not propose to have any trolley line alternatively.
He further admitted that the alternative trolley line ::: Downloaded on - 09/06/2013 14:04:32 ::: 24 by-pass would be of 11 kms. in place of 6 kms lost in the submerged backwater and thus the total trolley line length could have been 40 kms. i.e. 35 + 5.
He further admitted to have learnt that the comparative study was made for the purpose of working out the cost on running an alternative trolley line and in his opinion the Company gave up the said proposal due to initial expenses involved. PW 16 -
Shivlal Shah stated in his examination-in-chief, ig "....Trolley line was proposed on the alternative route and Company moved the Government for acquisition of the land for this purpose. But no proceedings for acquisition were initiated in time. Till I retired in 1974, no such proceedings were initiated. The land owners not willing to sell their lands to claimant company by private negotiations for that purpose. The Government was not prepared to apply urgency clause for land acquisition. As per him market value of the land to be acquired for the entire 11 kms. stretch of alternative line would be about Rs.25,00,000/- and it would have taken minimum two years for ::: Downloaded on - 09/06/2013 14:04:32 ::: 25 construction of alternate trolley line. The estimate prepared for laying new trolley line was at the rate of Rs.2.5 lakhs to Rs.3 lakhs per km..."
12. Thus, as has been pointed out by the learned AGP, the total cost for laying of this alternative trolley line (11 km) could have been Rs.25 lakhs plus (3 lakhs x 11) i.e. Rs.25 lakhs + 33 lakhs. If the alternative trolley line was 18 km. in length instead of 11 ig km., the cost for laying of the said 18 km. distance of the trolley line would be Rs.25 lakhs + 54 lakhs, thus making a total of Rs.79 lakhs.
The witness further admitted that the claimant-company did not think it profitable to invest so much for the alternative line and he claimed that the letter at Exh.105 dated 17/8/1973 was sent to the Government under his signature. In his cross-examination, Mr. Shah admitted, "......The Government never informed us that it was not prepared to apply urgency clause...... No inquiry was made with the Government for finding out probable amount of compensation....."
::: Downloaded on - 09/06/2013 14:04:32 ::: 26He also admitted that the letters dated 29/11/1973 (Exh.106) and another letter at Exh.107 were sent to the SLAO.
13. It is pertinent to note that when Shri M.S. Mahajan, Deputy Engineer (DW 3) while in the witness box was specifically asked in his cross-examination as to whether the laying of railway line would cost Rs.2,41,000/- per km. This itself indicated that it was the company's ig case that the cost of laying down the new trolley line would be Rs.2,41,000/- per km.
as a substitute line so as to make the entire trolley line operative and if the distance of the alternative new line was to be taken as 11 km or 18 km, the total cost, including the compensation payable for acquisition of the land would not have exceeded Rs.One crore and that could be the only amount payable to the company by way of compensation and on account of 7 km trolley line stretch having been submerged in the backwater. It is not known why the Reference Court did not address on this issue and instead proceeded to consider the payment of compensation only on the ground of severance and injurious affection. The learned AGP has rightly ::: Downloaded on - 09/06/2013 14:04:32 ::: 27 pressed this issue before us and pointed out that the company did not take any effective steps despite the Government reminders from 1967 to 1974 to work on the alternative trolley line and, therefore, the company had no right to claim compensation on account of severance and injurious affection for abandonment of the remaining 30 km of the trolley line.
. Having regards to the evidence of the claimant-company, we have no doubt that the company by its own ig choice dropped a viable proposal of laying down the alternate trolley line of about 18 km. in place of 6 km. trolley line running through the land submerged in the backwater and so as to make the entire trolley line operational and the company allowed 30 km. trolley line to become redundant by its own actions. It tried to shift the blame on the State Government under the pretext that there was no response to invoke the urgency clause so as to acquire the land. This was only an allegation which did not find any support and the cross-examination of the company's witness clearly proved that it was a blatant lie before the court. Providing the alternate line of 18 km. in place of 6 km. trolley line could have restored the transportation of the ::: Downloaded on - 09/06/2013 14:04:32 ::: 28 company's goods by the trolley line rather than resorting to the road transportation. The Reference Court ought to have considered this deliberate inaction on the part of the claimant-company rather than entertaining an application for the claim of severance and injurious affection.
(A) SEVERANCE:
14. Let us consider the merits and de-merits of the compensation ig granted or refused by the Reference Court by the impugned award in the first part. The first claim made by the company was under the head of Diminution in the value of the land in Walchandnagar Township. The company claimed an amount of Rs.8,64,000/- on this count. The Reference Court has rejected this claim. It considered the evidence of PW 1 - Shri K.L. Paranjape, PW 15 - Shri B.T. Talim and DW 4 - Shri Upendra Dhongade. PW 1 - Shri Paranjape, who was working as an Engineer with the claimant-company admitted that, after the trolley line transportation got stopped, the housing activities within the township had increased, a new market was also constructed and there was general increase in the population. He also admitted that ::: Downloaded on - 09/06/2013 14:04:32 ::: 29 the offices like Posts, Telephones and ST Bus Stand continued as in the past and the students strength in 11th and 12th standards had gone up. Shri Talim on the other hand specifically stated in para 43 of his depositions as under:-
"....I admit that very recently a big market has been built in Walchandnagar. I agree that the growth of the township has not been arrested in any way due to discontinuance of trolley line. The land value in the Walchandnagar township has increased after the acquisition of the land....."
. Shri Dhongade - DW 4 stated that he was assigned the job of undertaking a survey report of Walchandnagar for the years 1971 to 1977 and he submitted his report at Exh.136. He also admitted that though the report was prepared in the year 1979, it was submitted in the next year. As per the said report, students strength in the primary schools in the year 1971 was 1933 but in the year 1977 it went upto 2053. Whereas the strength of the High School students which was at 1280 in the year 1971 had gone upto 1976 in the year 1977. The strength of teachers ::: Downloaded on - 09/06/2013 14:04:32 ::: 30 in the year 1971 was 117 but in the year 1977 had went upto 161. There was one bank in the township and its turn over in the year 1971 was Rs.22,96,636/-
but in the year 1977 its turn over reached the figure of Rs.50,27,731/-. The number of accounts in 1971 were 2000 but in the year 1977 they were 6000.
Telephone connections in the township in the year 1971 were only 20 but in the year 1977 they were 55.
Thus there was an over all development in the Walchandnagar Township and the discontinuance of the trolley line ig did not affect the growth and development of the township in any way. Under these circumstances, the Reference Court was right in its conclusion that the discontinuance of the trolley line did not in any way reduce the land value in the Walchandnagar Township. We agree with this finding and, therefore, no interference is called for in the same.
15. The total length of the trolley line which was abandoned came about 28 to 30 kms. and there is no dispute that the width of the trolley line was between 60 to 100 ft. including the road adjoining the trolley line. There is no dispute between both the parties that the total land under this 30 km.
::: Downloaded on - 09/06/2013 14:04:32 ::: 31stretch of the abandoned trolley line admeasured 60 H. and 38 R. and it was non-agricultural land. Two witnesses, one from each side, have been considered by the Reference Court on this claim. Shri Talim -
PW 15 is the Company's witness and Shri Dhongade - DW 4 is the witness of the State Government. Shri Talim had retired as the Director of the Town Planning from the Government service when he was in the witness box, whereas Shri Dhongade was holding the post of Assistant Director, Town Planning at the relevant time. Both ig these witnesses were unanimous on the market price of the Jirayat land in the concerned villages through which the trolley line was passing and this market rate was Rs.6250/- per hectare.
Though the company claiming compensation at the rate of Rs.8250/- per hectare for 60 H. and 38 R., Shri Talim himself admitted that the prevailing rate at the relevant time was Rs.6250/- per hectare, but the land remained with the company and in any case it was not the land which was submerged in the backwater.
Shri Dhongade - DW 4 admitted that it being a narrow strip of land running across 30 km. distance, its agricultural use was not feasible. He also admitted that for digging and removal of the compact soil and to fill in the land with loose soil, to make it ::: Downloaded on - 09/06/2013 14:04:32 ::: 32 suitable for agricultural, an amount of Rs.2000/- to Rs.2500/- per hectare would be required to be spent.
The Reference Court has accepted this opinion of the State Government's expert but without recording a finding, whether the land could be used for agricultural or for any other purpose, when the said expert witness had stated that its agricultural use would not be feasible. However, if the compact soil was removed and loose soil was filled in, there would be a possibility of the company using the land for horticulture ig like plantation of mango trees or guava trees or even tamarind trees and, therefore, the decision of the Reference Court to grant compensation at the rate of Rs.2500/- per hectare should be maintained. The compensation amount would come to 60.38 x 2500 i.e. Rs.1,50,950/- for restoration of the land to use. The demand made by the Company for higher compensation for the land has been rightly turned down by the Reference Court and we are not impressed by the company's case before us for enhancement of the compensation for the land, more so when the land remained with the company.
16. The Reference Court has considered the claim of the Company for embankment and CD works and the ::: Downloaded on - 09/06/2013 14:04:32 ::: 33 same has been allowed partly. As per the Company the embankment and CD works covering 28 to 30 kms.
trolley line had become useless and, therefore, the company was injuriously affected as the embankment as well as CD works remained of no use to the company.
The company, therefore, asked for Rs.23,96,250/- for embankment and Rs.5,07,128/- for CD works. This was opposed by the learned Government Pleader on the ground that the embankment or the CD works were not a property generating income and they were just structures.
. Embankment consists of earth work so as to provide a firm and level base to the sleepers, on which the rails are fixed for the trolley line. CD works means cross drainage work and consists of pucca masonry structure across the trolley line for the passage of water during the rainy season. As per Shri Talim - PW 15 the depreciation in embankment would be 8% and the depreciated value for 30 km.
length would be Rs.17,52,948/- by adopting the Y.P. (Year purchase) formula. The State Government opposed the valuation made by the year purchase formula and had contended through its expert witness DW 2 - Shri M.S. Mahajan that the said valuation was ::: Downloaded on - 09/06/2013 14:04:32 ::: 34 required to be done as per the straight-line formula.
The Reference Court noted the arguments advanced by the State Government that embankment and CD works were only structures without any market value and, therefore, State Government's contention of accepting valuation by the straight-line formula was conceded to. The learned AGP has invited our attention to the book titled as "Theory & Practice of Valuation" by Dr. Roshan H. Namavati. As per this book in the Straight Line Method of valuation, the cost of an asset less ig its salvage value is distributed or written off at uniform rate for its complete service life and the following formula is used to calculate the annual depreciation:
Annual depreciation= Original cost - Salvage
-----------------------
Life in years The Reference Court also did not agree with the opinion of Shri Talim to give only 8% depreciation.
As per the Reference Court the depreciation ought to be given at 25% keeping in mind that the trolley line was used for 30 years. The Reference Court noted the gross valuation made by DW 2 in his report at Exh.126 ::: Downloaded on - 09/06/2013 14:04:32 ::: 35 at Rs.22,45,156/- and by deducting 25% depreciation, the embankment value came to Rs.16,83,758/-. We are in agreement with these findings and hence confirm the same.
. As far as CD works is concerned, DW 2 -
Mahajan admitted that there were in all 83 CD works and the total cost worked out at Rs.1,63,512/-. Mr. Mahajan stated that the depreciated value would come to Rs.1,02,034/-. No reason has been given by the Reference Courtig in rejecting the valuation of Rs.1,63,512/-. If for the embankment the valuation made by the State Government's expert witness was accepted, there is no reason in discarding the testimony of the said witness in respect of the valuation of the CD works and this was done by the straight-line formula and not on the basis of Y.P. formula. It would be, therefore, appropriate that 25% depreciation amount is reduced from Rs.1,63,512/-
for grating compensation for CD works and if so done, the amount would come to Rs.1,22,634/-. We accordingly modify the impugned award to that extent in respect of the compensation granted for CD works i.e. Rs.1,22,634/- instead of Rs.2,27,597/-. So far as the compensation granted for wells and structures ::: Downloaded on - 09/06/2013 14:04:33 ::: 36 and buildings is concerned, the amount awarded by the Reference Court is based on the evidence of DW 2 -
Mahajan and no interference is called for in the said amount. The Reference Court has rightly turned down the claim for compensation in respect of the trees.
The company had claimed Rs.27,000/-, but there was no evidence.
17. Now coming to the second category of claims i.e. Injurious Affection, it is required to be noted that the claim as made/demanded and as awarded under different heads could be set out as under:-
(B) - Injurious Affection:
Item Demand (Rs) Awarded (Rs.)
---- ----------- -------------
1. Retrenchment
compensation 1,00,000.00 10,000.00
2. Increase in
Transportation cost 80,07,108.00 8,00,718.00
3. Loss of Profit 35,62,000.00 Nil
4. Telephone Lines 43,048.00 Nil
5. Buildings and 2,28,510.00 83,660.00
structures
6. Rails & Sleepers 42,45,000.00 32,21,860.00
::: Downloaded on - 09/06/2013 14:04:33 :::
37
7. Rolling Stock 22,17,600.00 17,79,884.00
8. Remodelling of
Bhigwan Yard 4,72,000.00 1,30,338.00
(1) Retrenchment Compensation:-
18. Shri Satav (PW 18) was working in the Time Office and was responsible for the wage and salary distribution under the claimant-company. He stated in his depositions (Exh. 109) that as per the record, there were in all 52 persons working on the trolley line with the following break-up:
Fitters :7
Diesel Engine Drivers :4
Mukadams :3
Office boys :3
Guards :2
Foreman :1
Coolies : 32
According to the said witness if all these 52
employees were discontinued on closure of the trolley
line, the company would have been required to pay the
compensation amount of Rs.1,25,000/-. However, he
admitted that none of them was retrenched and they
::: Downloaded on - 09/06/2013 14:04:33 :::
38
were absorbed in other departments. He admitted in
his cross-examination that there was no record to
show that they were so absorbed on humanitarian
ground only. He further admitted that even after
1970 the claimant-company had employed new coolies,
fitters and drivers and it did not retrench any
employee of any department. Shri Gowarikar the
learned Advocate for the claimant- company before the
Reference Court, in his oral argument, had urged for
a token compensation of Rs.1,00,000/- and the
Reference Court
ig while rejecting the same granted an
amount of Rs.10,000/- as a token compensation. In
our opinion there is no justification to grant any
token amount by way of compensation, more so when the
company did not place on record any evidence to
suggest that either the employees, on absorption,
were required to be retrained for which the company
incurred an additional cost or by way of redeployment
of these 52 employees formerly engaged on the trolley
line, the company was required to spend an additional
amount of Rs.10,000/- over and above their salary and
other benefits as were payable to them in normal
course. We, therefore, set aside the compensation of
Rs. 10,000/- granted by the Reference Court to the
claimant-company in lieu of retrenchment compensation ::: Downloaded on - 09/06/2013 14:04:33 ::: 39 or as a token amount.
(2) Increase in transportation cost and loss of profit:
19. As against the amount of Rs.80,07,180/-
claimed by the company, the Reference Court has awarded an amount of Rs.8,00,718/-. The company examined and relied upon, in this regard, the evidence of ig Shri Kamlakar Paranjpe (PW 1), Shri Madhav Ganu, Clerk in Transport Department (PW 6) and Shri Mohanlal Purawat, Chief Accountant (PW 7). It was pointed out through the oral depositions and supported by the documentary evidence that the trolley line was transporting a total tonnage of 35000 MT per annum. It was further claimed that the cost of transportation on trolley line was 20 paise per tone per km. and the transportation cost by road was 80 paise per tone per km. As per the company, it was required to spend 60 paise per tone per km. by way of additional cost by road transportation on closure of the trolley line. The Reference Court in the impugned award gave the following reasoning to award an amount of Rs.8,00,718/- by way of ex gratia ::: Downloaded on - 09/06/2013 14:04:33 ::: 40 compensation for one year:
"..........It has been sufficient proved that 35,000 tonnes of goods per annum used to be transported by the claimant-company, through its trolley line between Bhigwan Railway Station and Walchandnagar at Rs.0.20 per tone per km. whereas after the acquisition of trolley line, such goods are to be transported to Bhigwan Railway Station by the claimant company ig from Walchandnagar by truck, at the rate of Rs.0.80 per km. per tone and an increase in this transport cost is certainly a perpetual loss to the claimant company, it is entitled for the capitalisation of this loss, by way of compensation of 10 years increased in the cost of transport. There is absolutely no ruling of any high court or supreme court on this point particularly to award compensation of 10 years, due to increase in the cost of transport. Moreover, the claimant-company has claimed compensation for severance and injurious affection and, therefore, I feel that the claimant company cannot be allowed to claim 10 years increase ::: Downloaded on - 09/06/2013 14:04:33 ::: 41 in the cost of transport, but, I feel that the loss of Rs.8,00,718/- for one year can be awarded as compensation for one year only and the other claim for ten years' loss will have to be rejected and it is rejected."
. The above reasoning of the Reference Court for awarding compensation equivalent to one year's additional transportation cost does not appeal to us.
It ought igto be noted that the Reference Court turned down the compensation for loss of profit which, as per the company, was Rs.35,62,000/-. The Reference Court noted that the company failed to prove that it had suffered any loss in profit due to the abandonment of the trolley line or the suspension of the trolley line. The Reference Court stated, "......It is true that the trolley line was used by the claimant-company for the purpose of transporting its goods and it was a connecting link between Walchandnagar and Bhigwan Railway Station and the said company used to make these trips in a day for ::: Downloaded on - 09/06/2013 14:04:33 ::: 42 transporting 35,000 tonnes of goods p.a. But, now due to the acquisition, the claimant company has been doing the said work by road transport by engaging trucks and for which the claimant company has claimed compensation regarding extra expenses, due to change over of the mode of transport. Therefore, it is really a question as to how the claimant company can claim compensation towards any loss of profit, when there is absolutely no loss igof profit in the industry of the claimant company, much less due to increase in the transport cost. There is absolutely no evidence led by the claimant-company that it had suffered any loss in business due to the disturbance in production or dislocation of supply and delivery of goods, due to the acquisition of the trolley line. Therefore, I am not willing to award any compensation towards the loss of business." (emphasis supplied).
. The balance-sheets for the years 1972 to 1978 were placed on record and there was no loss caused in the profit of the company on account of the ::: Downloaded on - 09/06/2013 14:04:33 ::: 43 discontinuation of the trolley line from the year 1976 onwards. If there was no loss of profit suffered by the company, there was no justification in awarding compensation on account of increase in transportation cost, even for one year. It is well known that the transportation cost is one of the factors taken into consideration for deciding the cost of the goods manufactured and obviously this increase in transportation cost at the rate of 60 paise per tone per km. from the year 1976 onwards was added while ig working out the manufacturing cost of the company's products and thus the increase in the cost was off-set and recovered from the buyers of the goods manufactured by the company. The company was not entitled to claim compensation under the head "Injurious Affection" stating that it suffered additional financial burden on account of increase in transportation cost. The Reference Court, in our opinion, committed a grave error in allowing compensation at Rs.8,00,718/- by way of increase in transportation cost, even for one year. If the company, admittedly, did not suffer any loss in profit and the said demand of Rs.35,62,000/- on account of loss in profit was turned down by the Reference Court and in our opinion rightly so, there ::: Downloaded on - 09/06/2013 14:04:33 ::: 44 was no justification to grant compensation to off-set the increase in transportation cost. We, therefore, set aside the compensation of Rs.8,00,718/- granted by the Reference Court and uphold the rejection of loss of profit claim at Rs.35,62,000/-.
(3) Telephone lines and buildings/structures:
20. As per the claimant-company it was entitled for Rs.43,048/- towards the compensation for telephone ig lines and Rs.2,28,510/- towards the buildings and wells. In support of the claim for telephone lines, the company had examined Shri Ramchandra Sawant (PW 11) at Exh.81. He was working as Junior Enigneer-cum-Telecom Officer under the Central Government. In his cross-examination he admitted that when he was examined before the Reference Court on 30/9/1987 he did not have the rates prevailing for the year 1975-76. He also admitted that the rates are revised intermittently and during his service of 12 years, the rates were revised on 7 to 8 occasions. He also admitted that the estimate given by him for the year 1975-76 was on the basis of the rates prevailing in the year 1983.
He also admitted that the life of the telephone line ::: Downloaded on - 09/06/2013 14:04:33 ::: 45 is about 20 years and the telephone line was installed for the first time in 1946. Thus in 1976 it had completed 30 years and in terms of value it had become obsolete. The Reference Court rightly turned down the demand for compensation for telephone lines.
. So far as the compensation for buildings is concerned, there was no dispute that there were six buildings along the trolley line. These buildings were constructed ig for residential purpose of the staff members who were working on the trolley line at different locations, namely, Kumbhargaon, Vadwali and Kalas Camp. There was two chawls in each place. The company claimed that on discontinuation of the trolley line, the buildings had become redundant and useless. The Government opposed this claim on the grounds that the buildings were never acquired and nothing was brought on record by the company to show that in its book the buildings had any value. In short, the Government claimed that there was no severance and, therefore, there could be no compensation granted, in as much as the buildings could be utilised by the company.
::: Downloaded on - 09/06/2013 14:04:33 ::: 46. In support of its claim of Rs.2,28,510/- the company relied upon the evidence of Shri Paranjpe (PW
1), Shri Talim (PW 15) and Shri Rane (PW 10).
Whereas the Government while opposing the said claim relied upon the evidence of Shri Mahajan (DW 2), who had done the valuation of these three chawls (Exh.
128). The valuation report of Shri Talim was at Exh.97 and it was on the basis of the estimated cost as in the year 1976. The Reference Court discarded the evidence of the company and accepted the valuation made ig by Shri Mahajan (DW 2). The report of Shri Mahajan was by adopting rate of D.S.R. work for the year 1975-76 and the value was calculated on the basis of the straight-line formula. Shri Mahajan had estimated cost of all the three chawls at Rs.1,54,483/- and the depreciated cost was estimated at Rs.92,690/-. It was the evidence of the company that these buildings were demolished and the scrap material would fetch about 10% of the depreciated cost. The Reference Court, therefore, deducted 10% from Rs.92,690/- and fixed the net loss to the company at Rs.83,664/- and granted the said amount by way of compensation. No fault could be found with the said view and, therefore, we confirm the compensation granted by the Reference Court in ::: Downloaded on - 09/06/2013 14:04:33 ::: 47 respect of the residential buildings along side the trolley line.
(4) Compensation for Rails and Sleepers:
21. The company claimed an amount of Rs.50,08,228/- by way of compensation for rails and sleepers on the basis of the report submitted by Shri Talim (PW 15) and at Exh.97. In the submerged area the rail line was about 7 kms., whereas in the non submerged area ig it was about 28 kms. The width of the rail line was 2 ft. and 6 inches (narrow gage). As per the report of Shri Talim, the cost of laying the rail line in the year 1976 would be Rs.2,41,053 per km. and the same was based on the estimate submitted by some of the companies like Hindustan Steels Ltd.
The company claimed that by allowing 15% depreciation on the estimated cost of Rs.2,41,053/-, the total trolley line of 35 kms. would cost Rs.72,08,207/-.
It was admitted that the rails and sleepers and other materials of the 28 kms. length from the unacquired trolley line area was sold at Rs.19,00,000/- and at the same rate the company would fetch for the balance of 7 kms. submerged area of trolley line Rs.4,87,608/-. The labour cost for removal and ::: Downloaded on - 09/06/2013 14:04:33 ::: 48 transport of the rails and sleepers had come to Rs.1,89,205/-. The company, therefore, claimed the total of Rs.50,08,288/- for rails and sleepers.
. This claim was opposed by the Government, firstly, on the ground that the company by its own choice did not work out the alternative trolley line despite the fact that it was allowed in the year 1967 to take such steps and in 1974 it gave up the idea of laying down of alternative trolley line in place of 7 kms. area ig submerged in the backwater. The company had to blame itself on account of its inaction and it was, therefore, not entitled to claim any compensation from the Government on account of the entire trolley line having become redundant.
Secondly, it was contended that the report made by Shri Talim (PW 15) was unreliable and on the other hand the report of Shri Mahajan (DW 2) was more scientific and was required to be accepted. As per the report of Shri Mahajan, estimated cost for the sleepers and rails was Rs.83,643/- per km. and depreciated cost came to Rs.52,193/- per km. The learned Judge of the Reference Court discarded the evidence of Shri Mahajan though he accepted the straight-line formula adopted by Shri Mahajan. The ::: Downloaded on - 09/06/2013 14:04:33 ::: 49 Reference Court accepted the estimated cost of Rs.2,41,053/- per km. for the sleepers and rails and fixed the depreciation at 35% and thus the depreciated cost was arrived at Rs.1,56,650/- per km.
From the said amount, an amount of Rs.23,89,131/- was deducted and the balance depreciated cost was fixed at Rs.31,21,816/-. The Reference Court was pleased to grant the said amount of Rs.31,21,816/- by way of compensation.
22. Whether the Reference Court was justified in granting the said amount of Rs.31,21,816/- by way of compensation for rails and sleepers is a question posed before us by the State Government, whereas the company claims that it ought to have been granted additional amount of Rs.10,00,000/-. In our opinion, the company cannot be granted compensation for rails and sleepers covering 28 kms. of the trolley line.
In the earlier part of this judgment we have held that the company was at fault in not taking due steps to lay the alternative trolley line for 6 to 7 kms.
area submerged in the backwater. It gave up this proposal by its own choice and the reasons put forward before the Reference Court were false and fabricated. Even otherwise the company did not ::: Downloaded on - 09/06/2013 14:04:33 ::: 50 suffer any loss after the trolley line was discontinued in 1976, as was evident from the balance-sheets placed on record upto the year 1978.
The increase in transport cost i.e. road transportation by trucks was offset by increasing the manufacturing cost which is so obvious from the fact that the company did not incur any losses after it resorted to road transportation. The company could not have prayed for injurious affection on account of discontinuation of the trolley line and claimed compensation ig for rails and sleepers spread over 28 kms. of the trolley line. We do not find any justification that the company should be allowed to go with this compensation amount and have the double benefit. It would be a premium for its inaction for laying the alternative trolley line. However, for the area of 7 kms. which was submerged in the backwater, the company is required to be compensated. The depreciated cost as fixed by the Reference Court is Rs.1,56,650/- per km. for the rails and sleepers. The rails and sleepers and other materials covering the length of 7 kms. would fetch Rs.4,87,608/- as per the company's own case and this amount will have to be deducted from the estimated depreciated cost, which comes to Rs.1,56,650 x 7 = ::: Downloaded on - 09/06/2013 14:04:33 ::: 51 10,96,550/-. By deducting Rs.4,87,608/- from the said amount of Rs.10,96,550/-, the balance amount payable to the company would be Rs.6,08,942/-. Hence the compensation amount of Rs.31,21,860/- granted by the Reference Court is hereby set aside and instead we grant Rs.6,08,942/- to the claimant-company by way of compensation towards rails and sleepers.
(5) Rolling Stock:-
23. The company had claimed an amount of Rs.22,16,044/- towards the compensation in respect of the rolling stock and in this regard it had relied upon the evidence of Shri Bhalchandra Kamat (PW 13) as well as the evidence of Shri Paranjpe (PW 1). The valuation report made by Shri Kamat was placed before the Reference Court at Exh.93 and the said valuation was done in the year 1986. Rolling stock included three diesel locomotives, more than 100 four and eight wheeler wagons. The valuation made by Shri Kamat was based on the quotations he had received from the companies like Shahajhan Engineers and M/s.
Suyog Electrics. He admitted in his depositions that the total scrap of the rolling stock weighed 652.2 tonnes and its scrap value worked out at ::: Downloaded on - 09/06/2013 14:04:33 ::: 52 Rs.4,56,540/- as in the year 1976. Mr. Kamat further admitted that the rail line was not referred for valuation while he submitted the report at Exh.93. As per Mr.Kamat the life of the locomotives was 25 years and that of the wagons varied from 35 to 60 years depending on the type of the wagon. The State Government claimed that the life of the locomotive would be 10 years and that of the wagon would be 20 years. The State Government also opposed compensation on the same grounds as were advanced to oppose the ig compensation for rails and sleepers, namely, that the company by its own inaction dropped the proposal for laying the alternative trolley line in place of the submerged trolley line. The Reference Court considered the evidence of Mr. Kamat (PW 13) and Mr. Ramkrishna Chinchore (DW 5) and fixed the life of locomotive at 20 years and that of the wagon at 35 years. The Reference Court accepted the formula adopted by Mr.Kamat for valuation of the rolling stock, namely, the straight-line formula which is as under:-
N.C.R.C. = G.C.R.C. x Residual life
-------------
Total life ::: Downloaded on - 09/06/2013 14:04:33 ::: 53 . The Reference court accepted the valuation done by Mr.Kamat of the rolling stock i.e. estimated cost of Rs.48,49,618/- and the scrap value of Rs.4,56,540/-. The depreciated value by adopting the straight-line formula was calculated at Rs.22,36,424/- and by deducting Rs.4,56,540/-, the compensation amount has been fixed at Rs.17,79,884/-.
. Though the company relied upon the evidence of
Mr.Paranjpe (PW
ig 1), Mr. Kamat (PW 13) and Mr.Talim
(PW 15) in support of its claim for compensation in
respect of the rolling stock, it did not bring before
the court its book value. However, in his
cross-examination Mr.Kamat (PW 13) admitted as under:-
".......I verified from the assets register the year of manufacture and purchase of the concerned rolling stock. I saw these assets registers in 1986 before preparing the report.
The purchase price of the assets is recorded in the assets register. It is correct that in the asset books, every year, depreciation, is shown in the value of the particular assets ::: Downloaded on - 09/06/2013 14:04:33 ::: 54 after its purchase. I have not recorded the said book value of purchase in the assets register. It is not correct that the formulas stated by me for working out depreciated value is never adopted by experts. It is not true that I did not consider the original value of the assets, because in the book, the value was very much low. In the book value, the depreciation of assets is shown as 10 to 15 per cent every year. In isolated cases, it is 5% ig also. It is possible that in book value, the assets might become zero value in the instant case....... For assessment, I have taken for granted 1950 as the base year. This base year is based on guess work. I say that it is an intelligent guess work. There was no way to find out whether the assets when installed were new or used one.......... I had seen the record that the 3 diesel locomotives were fabricated by the claimant company from 1969 to 1971. I have accepted the prices supplied by the claimant company as the value of these three diesel engines......If in the books the assets, after depreciation are shown as of zero value, then ::: Downloaded on - 09/06/2013 14:04:33 ::: 55 the value would be the price of the scrap of those assets. I have given in my report the weight of the total assets of rolling stocks as 652.2 tonnes and that is correct. The scrap value of this weight would be Rs.4,56,540/- as in 1976....."
. The above admissions of Mr. Kamat who was the company's own expert witness, the value of the rolling stock ig was almost zero and, in fact, by selling the scrap of the rolling stock, the company would earn Rs.4,56,540/-. Obviously, there was no justification for granting any compensation or the compensation of Rs.17,79,884/- by the Reference Court for the rolling stock. If the rolling stock had become useless, the company could have sold it as it is or in the alternate its scrap of 652.2 tonnes would fetch Rs.4,56,540/-. It had the choice and even if it is presumed that the rolling stock of a narrow gage had a very limited market, no evidence was brought before the Reference Court that the company had taken utmost steps to dispose it off by inviting tenders at the national level or in the alternate it had approached the Indian Railways and ::: Downloaded on - 09/06/2013 14:04:33 ::: 56 offered to sell the locomotives as well as the wagons. It has also come in the evidence that within the company premises, the trolley line admeasuring about 14 kms. was in operation till the year 1983 and obviously the rolling stock was being used. The report of Mr. Kamat is very clear and in his depositions he admitted that he started the valuation work after 1983 onwards and the valuation was based on the prices prevailing in the year 1986. We have no doubt that the Reference Court did not consider these aspects ig and fell in serious error in awarding the compensation of Rs.17,79,884/- for the rolling stock. In our view, the company could not claim any compensation from the State Government for the rolling stock and therefore the amount awarded in the impugned award deserves to be set aside.
(6) Remodelling of Bhigwan Yard:
24. Coming to the last issue of compensation for remodelling the Bhigwan yard, it is required to be noted that the claimant-company mainly relied upon the evidence of Shri Gangadhar Pujari (PW 4), Deputy Chief Engineer and Shri Talim (PW 15). It claimed an amount of Rs.4,89,292/- as compensation for ::: Downloaded on - 09/06/2013 14:04:33 ::: 57 remodelling of Bhigwan yard. It was claimed by the company that after acquisition of the trolley line, it had resorted to transportation by road and, therefore, it was required to remodel its yard at Bhigwan Railway Station and this involved extra expenditure on the company. As per the company a new mobile crane was required to be purchased to handle the loading and unloading operations at the Bhigwan Railway yard and alterations and modifications were also required to be made to the godown, platform as well as ig the existing diesel and oil tanks. This claim was opposed by the State Government and it was contended that so far as purchase of new mobile crane was concerned, it was so done by the company for its convenience and not as a necessity. It was pointed out on the basis of the admissions made by PW 4 Shri Pujari that prior to the purchase of the new mobile crane, the company used to send its existing crane from Walchandnagar to Bhigwan on 3 to 4 days in a week as per its requirement and it was only on account of the increase in load and to meet the convenience of the company, the new mobile crane was purchased. It was further pointed out that there was no additional expenditure required to be made for godown, platform and the diesel as well as oil tanks.::: Downloaded on - 09/06/2013 14:04:33 ::: 58
. The Reference Court accepted the submissions made on behalf of the State Government that the company was not entitled for any compensation for the purchase of the new mobile crane. However, having regards to the evidence of Shri Talim (PW 15) and his report at Exh.97, the Reference Court accepted that the company spent an amount of Rs.31,086/- for civil work at Bhigwan yard, such as extension, modifications of the platform and provisions of RCC tanks etc. ig The court also accepted that for the modifications/repairs of storage tank, the company was required to spent an amount of Rs.2,31,211/-.
Shri Talim had taken into consideration the depreciation at 15% and calculated the depreciated value at Rs.1,96,529/-. The Reference Court, however, held that the depreciation ought to have been taken at 30%, having regards to the life span of about 50 years and more than 30 years life span was already over. The Reference Court further held that the scrap value at 30% was also required to be deducted and thus it held that 30% depreciation would be Rs.65,510/- and the scrap value at 30% would be Rs.65,510/- and after deducting this total amount of Rs.1,31,020/- the net amount payable came to ::: Downloaded on - 09/06/2013 14:04:33 ::: 59 Rs.96,328/-. In addition, as per the Reference Court the company was required to bear additional cost of Rs.34,010/- towards the labour charges and it, therefore, granted a total amount of Rs.1,30,338/-.
. It was submitted by the learned AGP that the Reference Court was in error in fixing the depreciation at 30% more so when more than 50% of the life span was already spent i.e. about 30 years from 1946 to 1976 and, therefore, the depreciation ought to have been ig taken at 50%. Though these submissions are impressive, the fact remains that on a total sum of Rs.2,62,297/- the depreciation being calculated from 30% to 50% would make a difference of only few thousands. The fact remains that the expenditure was made by the claimant-company only after the trolley line had become obsolete and, therefore, in our considered opinion no interference is called for in the amount awarded by the Reference Court for remodelling of the railway yard at Bhigwan.
25. Now coming to the additional benefits under Section 23 (1A), 23(2) and 28 of the Act, the Reference Court had denied the added benefits of interest and solatium as permissible under Section ::: Downloaded on - 09/06/2013 14:04:33 ::: 60 23(2) of the Act on the ground that the said benefit is available only on the compensation for the land and it cannot be granted for severance and injurious affection in respect of the unacquired land.
. As noted earlier, the notification under Section 4 of the Act was published on 26/10/1972 and the declaration under Section 6 of the Act was published on 1/8/1974. The first award was passed by the Land Acquisition Officer on 13/3/1976 but except granting some ig amount towards reimbursement of labour charges, the Land Acquisition Officer could not grant any compensation either for the area of the trolley line submerged in the backwater or trolley line area not acquired. It was only on 9/12/1981 the SLAO passed the second award and granted compensation in respect of the land covering about 6 to 7 kms. of the trolley line and submerged in the backwater of Ujani Dam. The claim for severance and injurious affection was rejected. The said award proceeds on the basis that the company lost its possession over the land in March, 1976. As per the scheme of Section 23(1A) of the Act, it is clear that in the instant case the benefit of additional component is not available to the company.
::: Downloaded on - 09/06/2013 14:04:33 ::: 6126. In the impugned award the Reference Court has denied the benefit of enhanced solatium under Section 23(2) and interest under Sections 28 and 34 of the Act. It has been stated by the Reference Court that the amount of solatium can be granted only on the compensation for the land and it cannot be so granted on the compensation on account of severance and injurious affection. This reasoning is not in keeping with the language of Section 23(1) of the Act and as ig is well settled the word "compensation for land" includes the compensation as available under Clauses thirdly and fourthly therein i.e. for severance as well as for injurious affection. In the instant case, the award concerning the claim of the company has been passed on 9/12/1981 by the Land Acquisition Officer and the claim under Section 18 of the Act for enhancement was submitted before the Land Acquisition Officer on 12/1/1982. The impugned award has been passed by the Reference Court on 14/3/1990.
By following the law laid down in the case of Union of India vs. Raghubir Singh [(1989) 2 SCC 754] and subsequently followed in the case of Communidade of Morombi-O-Pequeno vs. State of Goa [(2004) 12 SCC 430] and Panna Lal Ghosh and ors. vs. Land ::: Downloaded on - 09/06/2013 14:04:33 ::: 62 Acquisition Collector and ors. [AIR 2004 SC 1179], the claimant-company is entitled for solatium at the enhanced rate of 30% on the compensation amount payable to it in respect of the amount determined for severance, injurious affection as well as the compensation awarded in Part-II of the award in respect of the trolley line running through the 7 kms. length and submerged in the backwater. The Reference Court has awarded solatium on the second part only 15% and the larned AGP fairly conceded that in view of ig the settled position in law, the company must receive the amount of solatium at 30% on the compensation awarded in Part-I as well as In Part -II of the award passed by the Reference Court. To this extent the appeal filed by the company succeeds partly.
. Coming to the issue of interest payable under Sections 28 and 34 of the Act, the law laid down in this regard and more particularly in the case of Shree Vijay Cotton and Oil Mills Ltd. vs. State of Gujarat [(1991) 1 SCC 262] and followed subsequently in the case of Patel Joitaram Kalidas and ors. vs. Spl. Land Acquisition Officer and anr. and anr.
::: Downloaded on - 09/06/2013 14:04:33 ::: 63[(2007) 2 SCC 341], the company is entitled for said benefits on the amount of compensation as well as solatium. The interest under Sections 28 and 34 of the Act will be payable till the date the State Government has deposited the enhanced amount of compensation in the District Court, Pune. The Supreme Court in the case of Shri Vijay Cotton and Oil Mills Ltd. stated, inter alia, thus, ig ".... There is inherent evidence in the wording of Sections 28 and 34 to show that the framers of the Act intended to assure the payment of interest to the person whose land was acquired and it was not the intention to subject the said payment to procedural hazards. Section 34 lays down that 'the Collector shall pay the amount awarded with interest at 6 per cent per annum...' The legislative mandate is clear. It is a directive to the Collector to pay the interest in a given circumstance. Section 34 nowhere says that the interest amount is to be included in the award-decree as prepared under Section 23(1) read with Section 26 of the Act.
::: Downloaded on - 09/06/2013 14:04:33 ::: 64Similarly Section 28 provides 'the award of the court may direct that the Collector shall pay interest'. Here also the award under Section 23(1) read with Section 26 has been kept distinct from the payment of interest under the section. The interest to be paid under Section 34 and also under Section 28 is of different character than the compensation amount under Section 23(1) of the Act.
Whereas the interest, if payable under the Act, ig can be claimed at any stage of the proceedings under the Act, the amount of compensation under Section 23(1) which is an award-decree under Section 26, is subject to the rules of procedure and limitation. The rules of procedure are handmaiden of justice.
The procedural hassle cannot come in the way of substantive rights of citizens under the Act..."
. In the instant case, admittedly as on 30/4/1982 the application under Section 18 was pending before the Reference Court and the award has ::: Downloaded on - 09/06/2013 14:04:33 ::: 65 been passed on 14/3/1990, the claimant-company will be entitled for interest at the enhanced rate as per the Amendment of 1984 in the Act. This is one more area in which the appeal filed by the company succeeds partly.
27. In the premises, we modify the impugned award by allowing First Appeal No. 653 of 1991 and First Appeal No. 709 of 1991 partly and fix the compensation for severance as well as injurious affection as under:-
Part - I (unacquired trolley line) (A) Severance (Rs.)
1. Diminution in value of land in Walchandnagar Township Nil
2. Land (60 H. 38 R) 1,50,950.00
3. (a) Embankments 16,83,758.00
(b) C.D. Works 1,22,634.00
(c) Wells 21,000.00
(d) Structures & Buildings 83,664.00
4. Trees Nil
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20,62,006.00 Solatium at 30% 6,18,601.80
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Total Rs. 26,80,607.80
============
::: Downloaded on - 09/06/2013 14:04:33 :::
66
(B) Injurious Affection
1. Retrenchment Compensation Nil
2. Increase in Transportation Cost Nil
3. Loss of Earning (Profits) Nil
4. Telephone Line Nil
5. Rails and Sleepers 6,08,942.00
6. Rolling Stock Nil
7. Remodelling of Bhigwan Yard 1,30,338.00
------------
7,39,280.00
Solatium at 30% 2,21,784.00
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Total Rs. 9,61,064.00
============
Part - II (Acquired trolley line)
1. Compensation for land
ig 14,320.00
(3 H. 58 R)
2. Embankment 52,661.25
3. CD Works 56,250.00
-----------
1,23,231.25
4. Solatium 30% 36,969.37
-----------
Total Rs. 1,60,200.62
===========
. In addition to the above amounts, the
claimant-company shall be entitled for interest under
Section 28 as well as Section 34 of the Act, as
amended, on the entire amount of compensation as well
as solatium from March, 1976 till the date the State
Government deposited the amount with the District Court at Pune.
. The Registry to draw a fresh decree in terms ::: Downloaded on - 09/06/2013 14:04:33 ::: 67 of the above directions.
. On satisfaction of this award, if there is any amount remaining balance from the deposited amount, the same shall be allowed to be withdrawn by the State Government.
(D.B. BHOSALE,J.) ig (B.H. MARLAPALLE,J.) ::: Downloaded on - 09/06/2013 14:04:33 :::