Madras High Court
The Sub Collector vs Tmt. Lakshmi Ammal on 6 November, 2002
Equivalent citations: 2003(1)CTC193, (2003)1MLJ26
Author: A. Kulasekaran
Bench: A. Kulasekaran
ORDER A.S. Venkatachalamoorthy, J.
1. To form a link road between Chellandiamman Koil and Palani road in Chettinaickanpatty, a strip of land was acquired by the State including the one viz., an extent of 1254 sq.ft. comprised in T.S. No. 26 in the said village.
2. The notification under Section 4(1) of the Land Acquisition Act dated 8.12.1971 was duly published. The Land Acquisition Officer, after following the procedure laid down under the Act, passed an award viz., Award No. 4 of 1978. The award is dated 15.12.1978, wherein the Land Acquisition Officer fixed the compensation at Rs. 14,501.04. The split up figures are, value of the land at Rs. 2.40 per sq.ft. for 1254 sq.ft --Rs. 3,009.60; for the super structure at the rate of Rs. 8 for 1200 sq.ft --Rs. 9,600; and damages at 15% - Rs. 1,891.44, thus the Land Acquisition Officer passed the award for Rs. 14,501.04.
3. The respondent/landlady, being aggrieved by the said fixation, requested the Land Acquisition Officer to refer the matter to the Civil Court for the purpose of fixing the market value. The matter was referred to the Subordinate Judge, Dindigul, who took the same on file and it was numbered as L.A.O.P. 177 of 1980. Before the reference Court, the respondent/landlady filed a counter statement wherein she has claimed that the market value of the site should be valued not less than Rs. 35 per sq.ft. She also claimed a sum of Rs. 60,000 by way of cost of construction viz., built up area of 1200 sq.ft. For the damages that is caused to the walls in the west, north and south, she claimed 15% on the amount claimed under the two heads i.e., 15% on 1,06,200 which would work out to Rs. 15,930. Totally in all, the respondent/landlady claimed Rs. 1,07,628.95 (Rs. 1,06,200 + Rs. 15,930 = Rs. 1,22,130 - Rs. 14,501, which represents the amount already received).
4. Before the reference Court, the respondent examined herself as PW-1 and also examined an approved valuer, who is a Civil Engineer. Exs.A-1 to A-3 had been marked. On the side of the State, RW-1 was examined and two documents Exs.B-1 and B-2 were marked. The reference Court, after considering the oral and documentary evidence, came to the conclusion that the Claimant would be entitled for enhanced compensation of Rs. 21,540 with usual solatium and interest, etc. Or in other words, the reference Court enhanced the value of the site from Rs. 2.40 to Rs. 12.40 per sq.ft and value of the construction from Rs. 8 to Rs. 13.10 per sq.ft.
5. The Land Acquisition Officer has filed the above appeal, questioning the correctness of the fixation by the reference Court. The respondent/land lady in turn has filed Cross Objection 7 of 1999 claiming enhanced compensation.
6. The learned Additional Government Pleader appearing for the State would contend that the reference Court can have no reason whatsoever for enhancing the value of the site from Rs. 2.40 to 12.40 per sq.ft. The learned counsel would contend that it is settled law, when the landlady claims higher compensation, the burden is solely on her to prove the same to the satisfaction of the Court. A further submission is also made to the effect that there is no acceptable evidence to fix the value of the construction at Rs. 13.10 per sq.ft.
7. On the contrary, the learned counsel appearing for the respondent/landlady would contend that even way back in the year 1957, she purchased the property for a sum of Rs. 3,500 and that 14 years have elapsed and that there has been steep increase in the price of the land, admittedly when the same is located in an important area in that village. The learned counsel would also contend that fixing the value of the superstructure at Rs. 13.10 per sq.ft. is alarmingly low and that the reference Court should have accepted the testimony of PW-2 and the valuation report Ex.A-3 dated 11.1.1990 given by him ought to have been accepted. Yet another contention is raised to the effect that in the acquired premises, she was carrying on hotel business and the turnover was Rs. 1,000 per day and also having an ice factory, where again the turnover was Rs. 200 per day. Since the respondent/landlady lost all her income, she must be paid damages for which she is entitled to as per Section 23(4) of the Land Acquisition Act.
8. Three questions arise for consideration viz.,
(a) What is the value of the acquired land that has to be fixed,
(b) What is the compensation to be awarded with reference to the superstructure, and
(c) Whether the respondent/landlady is entitled for damages for the loss of business as such under Section 23(4) of the Land Acquisition Act.
9. As mentioned supra, the lands that are subject matter of this appeal and other lands were acquired to form a link road between Chellandiammal Koil and Palani road. Apart from the oral evidence, we have two documents viz., Exs.A-1 and B-2. Ex.A-1 is the certified copy of the original deed of sale dated 15.4.1957. Only under the said document, the property now in question was purchased by the landlady from one Kuppayee Ammal for a consideration of Rs. 3,500. The extent is about 1320 sq.ft as mentioned in the document. At the time of purchase of the property in the year 1957, there was a tiled shed. The document does not give split up figures as to what is the value of the land and what is the value of the superstructure. PW-1 viz., the claimant has in her evidence has stated that the property is in Dindigul - Palani road and just 50 feet west of there is cinema theatre. She has further deposed before the Court that close by there is a petrol bunk, lodge, automobile shop. This claim of the landlady has not been disputed by the Revenue. The witness, who has been examined on behalf of the Revenue, in the cross examination has categorically admitted that the acquired property is in the commercial area where there are shops, theatre, petrol bunk, etc. From this it is clear that the property acquired is situated in an important locality with reference to that village. The Claimant/landlady also deposed in her evidence that at the relevant time i.e. at the time of issuance of Section 4(1) notification, value of the acquired land was Rs. 35 per sq.ft. Of course, in the cross examination a suggestion was put to this witness to the effect that the award of Rs. 2.40 per sq.ft. for the vacant land is proper.
10. The other document available before us is Ex.B-2. It is again a certified copy of a sale deed, wherein an extent of 2220 sq.ft. was sold for a sum of Rs. 5,625 at the rate of Rs. 2.40 per sq.ft. By seeing the topo sketch, we find that this is far away from the acquired land.
11. With the available materials, we notice the following, In 1957, property was purchased at the rate of Rs. 2.50 per sq.ft. Section 4(1) notification in this case was issued in the year 1971 that is nearly after 15 years. Necessarily we have to do some guess work and considering the location of the acquired land, the evidence available on record and other circumstances, we are of the view that the market value of the land fixed by the reference Court can be accepted as correct.
12. The next question that arises for consideration is as to what is the compensation that has to be awarded in respect of the superstructure. The Land Acquisition Officer fixed the compensation at Rs. 8 per sq. ft., that is, for 1200 sq. ft. - Rs. 9,600. The Reference Court enhanced it by another five rupees and 10 paise per sq. ft. The claim, that is made with reference to the superstructure is Rs. 60,000 (built up area of 1200 sq. ft.)
13. The respondent/claimant, to substantiate her claim, apart from examining herself, examined a Civil Engineer as PW-2. In evidence, this witness has stated that the value of the vacant site was to be taken at Rs. 20 per sq. ft. and for the superstructure at Rs. 39,760, thus in all Rs. 58,208 plus 10% fluctuation, total in all Rs. 64,029. The said witness has also deposed that in 1972, the site would have been worth at Rs. 10 per sq. ft. and cost of construction would be at Rs. 17.50 per sq. ft. In view of this vital admission made none else than by the witness of the claimant/landlady herself, this Court is of the view that no interference is called for.
14. Learned counsel appearing for the respondent/landlady then contended that in the acquired building, she was carrying on business viz., running a Hotel in the front portion, ice factory in the back portion and living in the middle portion of the house and that she had a business turn over of Rs. 1,000 per day in the hotel business and a sum of Rs. 200 in the Ice Factory business. The learned counsel would place reliance on Section 23(1) of the Land Acquisition Act. In substance, the contention is that the claimant had lost her earnings from business and that she must be suitably compensated.
15. Section 23(1) of the Land Acquisition Act sets out as to what all the considerations that the Court should take note of. The 4th Clause reads thus:-
"Fourthly, the damage if any was sustained by the person interested, at the time of the collector's taking possession of the land, by reason of the acquisition injuriously affecting is other property, movable or immovable in any other manner, or his earnings."
16. There is no difficulty that by virtue of the acquisition of the building if the land owner has lost her earnings in business, she must be suitably compensated. In a case reported in Collector, Bilaspur v. Janki Devi, a learned single Judge of the Himachal Pradesh High Court ruled that such compensation can be the land owner's total six months net income. Similar view is taken again by the same Court in the ruling reported in Collector, Bilaspur v. Daulat Ram, .
17. But however, in a case decided by a Division Bench of the Allahabad High Court, reported in Nagar Mahapalika, Agra v. Lajpat Rai Kapoor and Anr., the Court took the view that a still higher compensation must be paid under the head of loss of earnings. That was a case where the Court came to the conclusion that the net earning of the land owner's business (running a cold storage) was at Rs. 7500 per year at the relevant time and the capacity of the cold storage was reduced because of acquisition to half and consequently fixed the compensation for loss of earning per year at Rs. 3,750. The court multiplied it by 20 times and reached at the figure of Rs. 75,000. Out of the same, the amount paid under the award would be liable to be deducted. In that case, the figure was Rs. 26,250.
18. The question is what is the amount of compensation by way of damages sustained by the person, whose land has been acquired, wherein he was carrying on a business. It may be in some cases, the land/building acquired are in villages and there are cases where the acquisition is in respect of a property situated in town. The State invokes the special powers in cases of urgency under Section 17 of the Land Acquisition Act. In those cases, the possession will be taken early when compared to other cases. We find, the Allahabad High Court, in the decision referred supra, adopted 20 multiplier on the basis that the net income is multiplied for the purpose of finding out the capitalised value.
This Court finds it rather difficult to accept the view of the Allahabad High Court, cited supra. In Koyappathodi M. Ayisha Umma v. State of Kerala, , the Supreme Court has ruled that when there are standing coconut trees in the acquired land and the value of the lands is assessed on the basis of comparable sale transaction so far as the standing trees are concerned, the same has to be treated only as timber. But however, when the compensation is calculated on the basis of yield method, various multipliers are adopted depending upon the standing trees (kind of trees).
In the present case, it is not as if the source of income is destroyed by acquisition, but the only thing is, instead of carrying on business in the acquired property, the business has to be shifted to somewhere else and normally this should mean that it will take some time. Only keeping in mind the loss that may be incurred during that transit period, compensation has to be made. This Court is of the view that grant of six months net income would be a proper compensation in normal cases, where the emergency provision is not invoked. In fact, normally after Section 6 declaration is made, for the authorities to hold award enquiry and to take possession, it will take minimum of six months. Only on the basis of the above reasonings, this Court is of the view that compensation under the head of Loss of Earnings should be six months net income in ordinary cases, where emergency provision is not invoked. But however, where the emergency provision is invoked, the Court has to award some more compensation, which should be nine months net income. Needless to mention, the burden is solely on the Claimant/Land Owner, who is put to strict proof, to the satisfaction of the Court, as to what was the net income per month on the date of notification under Section 4(1) of the Land Acquisition Act.
19. But coming to the present case, to award compensation under the said head, this Court finds it rather difficult to accept the submission for various reasons. First of all, before the Reference Court, in the counter statement, what all the landlady has stated is that she was carrying on business and the turn over was Rs. 1000 and Rs. 200 per day in the hotel and ice factory respectively. But, she has not stated, what was the net profit she gained. Coming to her evidence, what all she has stated is that she was getting good income from the business, but has not specified any amount. It is absolutely necessary, when a person claims for compensation on the ground of loss of earning, that he/she must not only plead but also prove it to the satisfaction of the Court. In this case, there is neither proper pleading nor proof. That being so, the claim of the respondent/landlady has to necessarily fail.
20. In this view of the matter, the appeal and cross objection stand dismissed.