Gujarat High Court
Gujarat State Petronet Limited vs A J Shah & on 29 February, 2016
Author: Akil Kureshi
Bench: Akil Kureshi, Z.K.Saiyed
C/SCA/8613/2011 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 8613 of 2011
With
SPECIAL CIVIL APPLICATION NO. 8614 of 2011
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE Z.K.SAIYED
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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GUJARAT STATE PETRONET LIMITED....Petitioner(s)
Versus
A J SHAH & 1....Respondent(s)
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Appearance:
MR ASPI M KAPADIA, ADVOCATE for the Petitioner(s) No. 1
MR RAKESH PATEL, AGP for the Respondent(s) No. 1
MR ARPIT A KAPADIA, ADVOCATE for the Respondent(s) No. 2
RULE SERVED for the Respondent(s) No. 1
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C/SCA/8613/2011 JUDGMENT
CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE Z.K.SAIYED
Date : 29/02/2016
JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. These petitions arise under similar background. We may record facts as arising in Special Civil Application No. 8613 of 2011. The petition is filed by Gujarat State Petronet Limited ('GSPL' for short) challenging orders at Annexures A,B,C and D passed by the Collector, Surat, under the provisions of the Gujarat Water and Gas Pipeline (Acquisition of Right of User in land) Act, 2000, awarding compensation to the respondents. The petitioner had laid down pipeline through the agriculture lands of the respondents in exercise of powers contained in the said Act. The Act contains provisions for compensating the land owners/occupants for the use of land as well as for damage to the crop or the trees thereon. We are concerned with the compensation awarded by the Collector for fruit bearing trees. We make it clear that the disputed issues do not include either the compensation for the purpose of land user or regarding the compensation for non-fruit bearing trees such as saag, saru etc. In other words, the controversy is narrow and revolves around the appropriate compensation determined and awarded by the Collector for destruction of various fruit bearing trees of the respondents standing on the land, where the pipeline was laid.
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Here also, the controversy is substantially narrow. The Collector has assessed the age of the trees in question on the basis of evidence on record. With respect to this aspect, we are not inclined to interfere. The authority also has adopted the average yield of the trees on the basis of opinions and certificates of the Officers of the Gujarat State Horticulture Department which also includes the probable age of the respective trees. With these general considerations, accepted by the Collector in absence of any overwhelming material to the contrary, we are not inclined to interfere in exercise of writ jurisdiction. The crux of the matter, however, lies in adopting the multiplier for awarding the compensation. In this respect, case of the petitioner is that, a proper multiplier should have been adopted which would take into account various imponderences, such as, the failure of a crop in given crop season, drop in the market prices, because of flooding of the crop, the possibility of trees being severely damaged during gale and hurricane or such other similar considerations. He submitted that when the occupant of the land is being compensated in advance for loss that he may suffer over the span of time, these factors would play an important role in determining the correct multiplier. He pointed out that the authority, instead, has multiplied per tree per year yield by the remainder of the life span of the tree and has thus, committed serious error in awarding compensation which is highly exaggerated.
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2. In this regard, counsel for the respondents submitted that Section 10 of the Act refers to compensation to the affected persons for such damage, loss or injury as may have been suffered. This concept of such damage, loss or injury, therefore, would include actual damage and not any portion thereof. Counsel further submitted that the authorities cited by the petitioner relate to the compensation payable for loss of crop or standing trees, in case of acquisition under the Land Acquisition Act, 1894, whereas now, the legislature has enacted the new Act called Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2013, in which, several measures have been included for awarding adequate compensation to the land losers.
3. We may record that earlier, the Collector had awarded the compensation to the respondents under order dated 18.07.2009 on the basis of the yield of the trees multiplied by the remainder of the life span of the tree in question. This order was challenged by the petitioner before the High Court. The High Court had remanded the proceedings under order dated 17.12.2009 for fresh consideration. Thereupon, the Collector passed its first order dated 21.07.2010, took into account the submissions made by both sides but, was persuaded not to depart from his earlier parameters for granting compensation as were adopted in his said order dated 27.07.2009. The GSPL has, thereupon, filed these petitions. In the current order, while adopting the same formula, as was done earlier, the Collector Page 4 of 9 HC-NIC Page 4 of 9 Created On Fri Mar 04 00:43:22 IST 2016 C/SCA/8613/2011 JUDGMENT noted that, as per the opinion of the expert, Kesar Mango tree would have life of 40 years, Jamboo-30 years, Guvava-30years, Gunda-25 years, Goras Ambli-60 years and Banana-01 year. In the operative portion of this order, while accepting such expected age of the respective fruit bearing trees, he decided to award compensation at the average yield value of the tree multiplied by the remainder of the life span of the trees of the claimants. For example, in case of Kesar Mango for a tree which was 6 years old while accepting the yearly yield of 160 kilogram and adopting the sale price of Rs. 20 per kilogram (thus, working the yearly return of the tree at the rate 3200), he applied multiplier of 34 i.e. the remainder of the span our of 40 years for six year old plant. Similar examples are available in all cases from the table of compensation prepared by the State Authority. Short question is, did he commit an error in applying this methodology? This completely ignores cost of cultivation. This apart as pointed out by the counsel for the petitioner, in case of State of Haryana vs. Gurcharan Singh and anr reported in AIR 1996 SC 106, the Court have adopted multiplier of 8 for determining the market value of the land on the basis of yield method for fruit bearing trees. It was observed that for agriculture land, 12 years of multiplier should be adopted. The relevant observations of the Court read as under:
"3. ... ... ... ... The compensation is to the value of the acquired land. The market value is determined on the basis of the yield. Then necessarily applying suitable multiplier, the compensation need to be awarded. Under no circumstances the court should Page 5 of 9 HC-NIC Page 5 of 9 Created On Fri Mar 04 00:43:22 IST 2016 C/SCA/8613/2011 JUDGMENT allow the compensation on the basis of the nature of the land as well as fruit bearing trees. In other words, market value of the land is determined twice over and one on the basis of the value of the land and again on the basis of the yield got from the fruit bearing trees. The definition of the land includes the benefits to arise from the land as defined in s.3(a) of the Act. After compensation is determined on the basis of the value of the land from the income applying suitable multiplier, then the trees would be valued only as fire-wood and necessary compensation would be given. In this case, the High Court did not adopt this procedure. We have looked into the figures furnished in the judgment of the High Court of the amount awarded by the Officer himself. He too while determining the compensation at the rate of Rs. 12,240/- per acre on the basis of the yield, the multiplier applied is more than 8 years. Under no circumstances, the multiplier should be more than 8 years multiplier as it is settled law of this court in catena of decisions that when the market value is determined on the basis of the yield from the trees or plantation, 8 years multiplier shall be appropriate multiplier. For agricultural land 12-- years multiplier shall be suitable multiplier."
4. In case of Airports Authority of India vs. Satyagopal Roy and ors. reported in AIR 2002 SC 1423, the Supreme Court was considering the compensation for damage caused by cutting the trees. In the context of the Land Acquisition Act, 1894, the Court referred to and relied upon the earlier decision in case of State of Haryana vs. Gurcharan Singh and anr(Supra) observing as under:
"14. Hence, in our view, there was no reason for the High Court not to follow the decision rendered by this Court in Gurucharan Singh's case (supra) and determine the compensation payable to the respondents on the basis of the yield from the trees by applying 8 years' multiplier. In this view Page 6 of 9 HC-NIC Page 6 of 9 Created On Fri Mar 04 00:43:22 IST 2016 C/SCA/8613/2011 JUDGMENT of the matter, in our view, the High Court committed error apparent in awarding compensation adopting the multiplier of
18."
5. The Court also referred to the decision in case of Special Land Acquisition Officer, Malaprabha Dam Project, Saundatti and ors vs. Madivalappa Basalingappa Melavanki and ors. reported in AIR 1995 5 SC 670 where, on account of smallness of the claim the Court refused to interfere however, providing that "it would not operate as a precedent to any future case or other cases arising from the same notification. All cases need to be decided applying only 10 years' multiplier."
6. Counsel for the petitioner also drew our attention to the decision of Supreme Court in case of Shaik Imambi vs. Special Deputy Collector (Land Acquisition), Telegu Ganga Project reported in (2011) 11 SCC 639, in which, the question of determining market value of the land for compensation under the Land Acquisition Act, 1894 on the basis of yield method came-up for consideration. The High Court had applied multiplier of 14 in case of lime tree which was the remainder of the life span of the trees. Before the Supreme Court, it was argued that the High Court should not have exceeded the multiplier of 10, as has been repeatedly observed by the High Court, that too, in absence of any special circumstances. The Supreme Court applied a multiplier of 10 and readjusted the compensation allowing other relevant parameters.
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7. It can thus be seen that the choice of multiplier for a fruit bearing trees though somewhat discretionary, through series of judgements of the Supreme Court it has been held and observed that ordinarily the same should not exceed 10 unless there are special circumstances which may be noted. This proceeded on the basis that through yield method the claimant is being compensated for the possible loss which may arise in future. Such compensation is being paid presently and does not account for the imponderables and vagaries of life. Under the circumstances, to multiply the annual yield of a tree by remainder span of the tree is not approved in any of the judicial pronouncements we have noticed. The method adopted by the Collector therefore to assess the age of a tree, compute its possible yearly yield and its market value and to multiply the same by the remainder span of the age of the tree was thus wholly erroneous. The argument of the respondents that Section 10 of the Act refers to compensation for actual loss or damage and therefore the multiplier method should not be adopted is not a valid argument. The method of multiplier brings in a degree of uniformity and seeks to assess more accurately the loss or damage likely to be caused or suffered by the claimant on account of cutting or removing the fruit bearing trees.
8. Under the circumstances, impugned orders at Annexure A, B,C and D in both the petitions are set aside. The authorities shall recount the compensation payable to the respondents by applying multiplier of 10 in all fruit bearing trees. We have Page 8 of 9 HC-NIC Page 8 of 9 Created On Fri Mar 04 00:43:22 IST 2016 C/SCA/8613/2011 JUDGMENT clarified that we are not interfering with the assessment of number of trees lost, the annual yield thereof, the expected market value of the produce and current age of these trees. Only modification would be with respect to substitution of the multiplier of 10 uniformly in all cases.
9. Both the petitions are disposed of accordingly. The amount deposited by the petitioner before this Court shall be remitted with accrued interest before the competed authority who shall after fresh working out of the compensation and release it, as may be found payable upon fresh orders of compensation being passed in terms of this judgement which may be done latest by 30.05.2016. If there is any amount to be released in favour of the claimants, the same shall carry proportionate interest as the deposits may have earned during interregnum period. It is, however, clarified that by reworking out of the compensation as per this judgement, if the total compensation payable works out to be less than what was awarded by the competent authority, there shall be no recovery. In absence of any further material on record we have not disturbed the compensation for the sag trees, which are, in any case, only three in number.
(AKIL KURESHI, J.) (Z.K.SAIYED, J.) Jyoti Page 9 of 9 HC-NIC Page 9 of 9 Created On Fri Mar 04 00:43:22 IST 2016