Himachal Pradesh High Court
Land Acquisition Collector vs Sukhdev Singh on 26 July, 1994
Equivalent citations: AIR1995HP150
JUDGMENT
1. These appeals are being disposed of by a single judgment as these arise out of a common award dated 19-1-1985 passed by District Judge, Solan and Sirmaur Districts Camp at Solan involving common question of law and fact. Out of these twelve appeals, eleven appeals have been preferred by State (RFAs Nos. 112, 110, 111, 113, 114, 115, 116, 117, 118, 124 and 125 of 1985) seeking reduction in the compensation awarded to claimants and one counter appeal (RFA No. 108 of 1985) and cross-objections (CO. 74/87 in RFA 110/85, C.O. 75/85 in RFA 111/85, C.O. 77/87 in RFA 113/85, C.O. 81/87 in RFA 117/85, C.O. 82/87 in RFA 118/85 and C.O. 80/87 in RFA 12485) by the claimants for enhancement of compensation awarded to them.
2. By his common award under appeals, the District Judge had decided eleven reference petitions in respect of acquisition of land for the public purpose of construction of Barog By-pass road by consolidating them with Reference Petition No. 11-S/4 of 1984 (Smt. Phulma widow of Khem Chand v. Land Acquisition Collector) in which evidence was recorded. RFA No. 112 of 1985 has arisen out of Reference Petition No. 11-S/4 of 1984, whose record we have perused for deciding these appeals.
3. The acquired land is situated in two villages, namely, Bara and Barog. For its acquisition, Notification under Section 4 of Land Acquisition Act (hereinafter called the Act) was issued on 3-12-1979. The Land Acquisition Collector gave two separate awards dated 30-7-1982 and 31-7-1982 for villages Bara and Barog. He had assessed the market value of the land on the basis of five years average sale price. His assessment of market value for different kinds of land in village Bara was:--
Bangar Awal Rs. 4308/- per bigha.
Bangar Doam Rs. 2847/- per bigha.
All other types Rs. 500/- per bigha.
and for village Barog was:--
Bangar II. Ill Rs. 8712/- per bigha.
Bangar Kadim Rs. 1734/- per bigha.
Ghasni Rs. 525/-per bigha.
Gair Mumkin R. 500/- per bigha.
4. Being dissatisfied with the awards of Land Acquisition Collector, the landowners filed reference petitions under Section 18 of the Act claiming market value of their lands at the rate of Rs. 60,000/- to Rs. 70,000/- per bigha, keeping in view the potential value of the acquired land. However, during the course of trial, all of them except claimant Hari Krishan, appellant in RFA No. 108 of 1985, had agreed that all kinds of land be assessed at the common rate as mentioned by the District Judge in Para9 of his award. The claim of Hari Krishan was that his land being irrigated and under orchard, was of superior quality, therefore, its market value was much more than the lands of other claimants. His claim was not accepted and the District Judge assessed the market value at a flat rate of Rs. 15,000/- per bigha for all kinds of land keeping in view their potential value. According to the District Judge, the potential value of all the plots of acquired land was same, irrespective of their kind, for the following reasons given in Para 10 of his award. These are:--
"The acquired land is situated in village Barog and village Bara which is adjacent to village Barog and the purpose of acquisition was the construction of some by-pass road. Barog admittedly is a developing complex. There is evidence on record to suggest that not only Commercial Establishments are coming up in this area, but a very important Tourist Complex of Himachal Tourism is already functioning there. The acquired lands are situated near the National Highway. There is evidence that certain crushers have been installed near the acquired land. Not only that the acquired land has gained more importance from the commercial point of view where not only Commercial establishments but residential houses can also be constructed. The acquired land is very near from Solan town of the Pradesh......"
5. For assessing the market value of the acquired land, the District Judge has adopted the 'Comparable Sale Method of Valuation of Land'. He has not accepted the other method of valuation of land, known as, 'Capitalization of Net Income Method', as requested by one of the claimants Hari Krishan, for want of reliable evidence on record.
6. The District Judge has taken into consideration three sale transactions Exhibits PW-8A, PW-8/B and PW-14/A for assessing market value of acquired land. Ext. PW-8/ A is the registered sale deed dated 30-3-1979, whereby 3 biswas of Ghasni land was sold for a consideration of Rs. 4,000/-and Ext. PW-8/B is another registered sale deed dated 31-3-1979 for sale of 2 biswas of Ghasni land for an amount of Rs. 3,000/-. These two sale transactions have been proved by Tulsi Devi (PW-8) vendor and Karam Singh (PW-9) vendee in sale deed Exhibit PW-8/B. The District Judge has kept in view that these sale transactions pertain to land situated in Kumar Haiti, which is at a distance of about 2-3 kilometers from the acquired land and has given adjustment to this factor in determining the market value of acquired land. So far sale transaction Exhibit PW-14/A is concerned, though it was effected about 2 years after the notification under Section 4 of the Act, yet, it pertains to village Barog, where the acquired land is situated, as such it has been considered relevant by the District Judge again after giving punishment for the probable rise in market value of the land in village Barog during the period of two years. As per these three transactions, the market value of the land comes to Rs. 20,000/- to Rs. 30,000/- per bigha, whereas, the District Judge has assessed it at Rs. 15,000/- per bigha for the acquired land. The District Judge has not placed reliance on the awards, copies of which are on record as Ex. PA, Ex. PB, Ex. PC and Ex. PD, on the ground that these pertain to plots of land situated within the municipal limits of Solan, which is a fast developing industrial town and the acquired land in question is situated in rural area, though on the national highway.
7. On behalf of the State of H. P., a number of registered sale deeds were produced which are Ex. R-I dated 7-3-1994, Ex. R-2 dated 14-7-1977, Ex. R-3 dated 17-3-1979 and Ex. R-4 dated 4-11-1977. All these sale transactions have been rejected on the ground that these pertain to the period much before the issuance of notification under Section 4 of the Act and Ex. R-3 was not even relied upon by the Land Acquisition Collector.
8. We have heard learned Counsel for the parties and gone through the record. The first point raised by the learned Advocate General appearing on behalf of the State of H. P. is that the District Judge was not justified in assessing the entire acquired land at a flat rate of Rs. 15,000/- per bigha irrespective of variance in the relevant factors, such as, location, shape, size, potentiality etc. etc. of each plot of acquired land. Another point raised by the learned Advocate General is that three sale transactions Ex. PW-8/A, Exhibit PW-8/B and Ex. PW-14/A were not comparable sales with the acquired land and could not form basis for the market value thereof. He has pointed out that the plots of land sold by Ex. PW-8/A and Ex. PW-8/B are situated on the national highway at Kumar Hatti, which is fast developing industrial place, at a distance of 3 Kms. from the acquired land. The learned Advocate General has tried to substantiate his arguments by comparing the sale price of these two sale transactions with the third sale transaction Ex. PW-14/A, which pertains to the land in village Barog, where the acquired land is situated, that the price of land in Kumar Hatti was much more in the year 1979 as compared to price of land in village Barog even after two years. According to the learned Advocate General, the claimants have miserably failed to prove that the market value of the acquired land was more than that allowed by the Land Acquisition Collector.
9. On the other hand, the learned Counsel for the claimants, except Shri Bhupender Gupta, learned Counsel appearing for Hari Krishan in R.F.A. No. 108 of 1985, have supported the award of the District Judge that in view of the same potential value of plots of acquired land, the market value has rightly been assessed at flat rate for the whole of acquired land Sh. Bhupender Gupta has taken us through the oral evidence of Hari Krishan (PW-1), Professor A. S. Kashyap (PW-2) and Kapur Singh (PW-3), who have made general statements in respect of yield of per bigha of land by growing vegetables or from the fruit trees planted thereon. There is no reliable and cogent evidence in respect of income, which claimant Hari Krishan was getting from the plot of acquired land belonging to him. On such type of evidence, the market value of the acquired land, could not be assessed on the basis of 'Capitalization of Income Method'. So far fruits trees standing on his land are concerned, compensation was awarded to him by the Land Acquisition Collector, which was found just and reasonable.
10. By now, it is well settled that to determine the market value of the land under Section 23(1) of the Act, sales of the land under acquisition, if any, or the sales of land in the neighborhood possessed of the same or similar potentiality or other advantages furnish basis to assess just and fair market value for the acquired land on the premise of hypothetical willing vendor and willing vendee. What a willing vendor would offer and a willing vendee would accept as prudent men in the normal market conditions, near about the date of notification under Section 4 of the Act, is the acid test of the market value of the acquired land. However, the comparable sales which are taken into consideration for determining the market value of the acquired land must inspire confidence to be genuine. In view of the amended provision of Section 51-A of the Act, inserted by Act No. 68 of 1994, it is not necessary to produce the vendor or the vendee to prove the transactions recorded in the registered sale deeds and production of certified copy of the registered sale deeds is sufficient proof of the sale transactions.
11. While determining the market value of the acquired land on the basis of comparable sale transactions, the factors which are required to be kept in view have been laid down by Supreme Court in Chimanlal Hargovinddas v. Special Land Acquisition Officer, Poona, AIR 1968 SC 1652 :--
(1) A reference under Section 18 of the Land Acquisition Act is not an appeal against the award and the Court cannot take into account the material relied upon by the Land Acquisition Officer in his Award unless the same material is produced and proved before the Court.
(2) So also the Award of the Land Acquisition Officer is not to be treated as a judgment of the trial Court open or exposed to challenge before the court hearing the Reference. It is merely an offer made by the Land Acquisition Officer and the material utilised by him for making his valuation cannot be utilised by the Court unless produced and proved before it. It is not the function of the court to sit in appeal against the Award, approve or disapprove its reasoning, or correct its error or affirm, modify or reserve the conclusion reached by the Land Acquisition Officer, as if it were an appellate Court.
(3) The Court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it.
(4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in the Court. Of course, the materials placed and proved by the other side can also be taken into account for this purpose.
(5) The market value of land under acquisition has to be determined as on the crucial date of publication or the notification under Section 4 of the Land Acquisition Act (dates of Notifications under Ss. 6 and 9 are irrelevant).
(6) The determination has to be made standing on the date line of valuation (date of publication of notification under Section 4) as if the valuer is hypothetical purchaser willing to purchase land from the open market land is prepared to pay a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price.
(7) In doing so by the instances method, the Court has to correlate the market value reflected in the most comparable instance which provides the index of market value.
(8) Only genuine instances have to be taken into account. (Sometimes instances are rigged up in anticipation of Acquisition of ' land.) (9) Even post-notification instances can be taken into account (1)if they are very proximate, (2) genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects.
(10) The most comparable instances out of the genuine instances have to be identified on the following considerations:--
(i) proximity from time angle, (ii) proximity from situation angle.
(11) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-a-vis land under acquisition by placing the two in juxtaposition.
(12) A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in the terms of price variation as a prudent purchaser would do.
(13) The market value of the land under acquisition has thereafter to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors.
Plus factors
1. Smallness of size.
2. Proximity to a road.
3. Frontage on a road.
4. Nearness to developed area.
5. Regular shape.
6. Level vis-a-vis land under acquisition.
7. Special value for an owner on an adjoining property to whom it may have some very special advantage.
(14) The exercise indicated in Clauses (11) to (13) has to be undertaken in a common sense manner as a prudent man of the world of business would do......"
The learned Judges of Supreme Court have further pointed out that evaluation of these factors depends upon the facts of each case i and there cannot be any hard and fast or rigid rule. Common sense is the best and most reliable guide.
12. Evaluating the above stated factors in the facts and circumstances of appeals in hand, we find that the District Judge has rightly relied upon Ex. PW-8/A and Exhibit PW-8/B sales transactions as these are proximate to the date of notification under Section 4 of the Act and proved to be genuine by the statement of Smt. Tulsi Devi (PW-8) vendor in Ex. PW-8/A and Ex. PW-8/B, Karam Singh (PW-9) vendee in sale deed of Ex. PW-8/B. There is nothing in the cross-examination of these witnesses or otherwise on record, to show that these sale transactions were not genuine. It is correct that the plots of land sold by these sale deeds are situated at Kumar Haiti on the national highway, which is at a distance of 2 to 3 Kms. from the plots of acquired land situated in villages Barog and Bara, but distance in space is immaterial in the present case, as the plots of acquired land are also situated adjacent to the national highway and potential value of the plots of land sold by these transactions and the plots of acquired land is found same. Like Kumar Haiti, villages Bara and Barog are also fast developing commercial areas, especially, Barog, which has come up as a place of special attraction for tourists after establishment of tourist complex by Himachal Pradesh Tourism. So far the sale deed Ex. PW-14/ A is concerned, the land sold by it is situated in village Barog and it could provide sure hint of market value of acquired land. Though this land was slopy (Dhank) as admitted by Shankar (PW-14), vendee, yet it could fetch Rs. 20,000/-per bigha on 30th October, 1981, that is, after about one year and ten months from the date of notification under Section 4 of the Act. It could be taken into account, after giving adjustment for rise in prices during the said period. Therefore, we find that the District Judge has rightly identified the comparable instances, which provided index for the market value of the acquired land and assessed market value of Rs. 15,OOG/- per bigha, after giving adjustment for the distance and location as well as proximity of time from notification under Section 4 of the Act.
13. We do not find any substance in the submission of the learned Advocate General that the market value of different plots of acquired land was required to be assessed differently and not at flat rate, keeping in view the factors, such as, location, shape, size and potentiality etc. etc. of each plot of acquired land as he has failed to point out how these factors were different in respect of each plot of acquired land. Rather, we find that it is proved on record that all the plots of acquired land are situated adjacent to national highway and the relevant factors of each plot are similar keeping in view the purpose of construction of Barog by-pass road, for which the land was acquired. The main factor is potentiality, which was undisputedly same in respect of all the plots of acquired land, as all of them could be used for the establishment of commercial units, guest houses and residential houses.
14. Our attention is drawn-to the latest judgment of the Supreme Court in M/s. Printers House Pvt. Ltd. v. Mst. Saiyadan (deceased) by L.Rs., AIR 1994 SC 1160, which lays down that if there is evidence that the relevant factors, such as, location, shape, size, potentiality etc. etc. of one plot of acquired land widely differ from other plots of acquired land, then, the market value of each plot of acquired land has to be determined independently because "differential factors" relating to different plots of acquired land greatly affect their value. But in the appeals in hand, such evidence is lacking that there were variations in "differential factors" of each plot of acquired land. Therefore, we have no hesitation to approve the determination of the market value of the acquired land at a flat rate of Rs. 15,000/- per bigha by the District Judge.
15. We find that in M/s. Printers House Pvt. Ltd. v. Mst. Saiyadan (deceased) by L.Rs., AIR 1994 SC 1160 (supra), approving 'Comparable Sales Method of Valuation of Land' as most favoured method, the learned Judges of Supreme Court have reiterated that :--
"..... the comparable sale must, firstly be genuine, secondly it must have taken place at a time proximate to the date of publication of the preliminary notification under Section 4( 1) of the Act, thirdly the land sold under, the sale must be similar to the acquired land, and fourthly the land sold under the sale must be in the vicinity of the acquired land. It has, therefore, to be noted that the location, size, shape, tenure, user or potentiality of land under comparable sale, if do not compare favourably with the acquired land, price fetched in comparable sale cannot furnish the 'price basis for determining the market value of the acquired land. However, if any differing feature or factor in a land covered by comparable sale admits of adjustment in terms of money, depending on whether it is plus factor or minus factor, the market value of the acquired land is determined either by increasing its price or decreasing its price vis-a-vis the price fetched for land under comparable sale. What applies to comparable sale, equally applies to comparable award, if such award is relied upon as that furnishing a price-basis for determination of the market-value of the land, cannot be disputed."
16. The result of above discussion is that there is no merit in these appeal as well as cross-objections and these are dismissed. There is no order as to costs.
17. This judgment is being signed and pronounced by one of the (Kamlesh Sharma, J.) because the other member of the Bench Hon'ble V. Ratnam, C. J., is not available on his appointment as Governor of Himachal Pradesh on 10-7-1994 and demit-ting his office of Chief Justice on 31-7-1994. However, in his capacity as Chief Justice, his Lordship has agreed to the judgment and consented to its pronouncement.