Delhi High Court
Union Of India And Ors. vs Lila Ram And Ors. on 1 January, 1997
Equivalent citations: 65(1997)DLT715
JUDGMENT Devinder Gupta, J.
(1) These five appeals filed under Section 54 of the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act') can conveniently be disposed of by a common judgment since questions of law arising for determination are identical and one set of arguments has been addressed at the Bar by the learned Counsel for the parties.
(2) 475 big has 13 biswas of land situate at village Garhi-Jaria-Maria, Delhi was notified for acquisition through notification published on 3.9.1957 at public expense for public purpose, namely. Planned Development of Delhi, Collector, Land Acquisition on 18.9.1961 made his Award No. 1174. 72 bighas 10 biswas of land owned by Pt. Lila Ram was also included in the award. Feeling dissatisfied with the amount of compensation a reference under Section 18 of the Act was sought by Pt. Lila Ram for determination of the amount of compensation. Delhi Colonizers also sought reference for determination of the amount of compensation with respect to acquisition of 51 bighas 8 biswas of land also included in the said award. Reference of Pt. Lila Ram (Land Acquisition Case No. 418/62) was decided on 20.2.1969 by Shri M.R. Sikka, Additional District Judge, Delhi. The entire land was categorised in two blocks. The land near the abadi was categorised in Block A and far away from abadi in Block B. Market value of the land falling in Block A as on the date of notification under Section 4 of the Act was fixed at Rs. 3.800.00. per bigha and for land falling in Block B at Rs. 3,500.00. per bigha. Following this award the reference of Delhi Colonizers (Land Acquisition Case No. 417/62) was also decided on 20.2.1969 in which also for land in categories A and B, market value was fixed at Rs. 3,800.00. and Rs. 3,500.00. per bigha respectively. Regular First Appeal No. 331/69 is against the award of the Additional District Judge dated 20.2.1969 in Lac 418/62 by Union of India questioning the enhancement in the amount of compensation in favour of Pt. Lila Ram, who also preferred cross-objections (CM 589/91) seeking further enhancement in the amount of compensation at the rate of Rs. 26,000.00. per bigha. Regular First Appeal No. 109/ 70 is an appeal by the Delhi Colonizers against award in Lac 417/62 for further enhancement in the amount of compensation at the rate of Rs. 26,000.00 per bigha. Neither any cross-objections have been preferred nor separate appeal has been filed by the Union of India against the award made by the Additional District Judge in Lac 417/62, Cm 567/91 in Rfa 109/70 is by the claimants for leading additional evidence.
(3) 188 bighas 16 biswas of land situate in Village Zamrudpur was acquired at public expense for public purpose, namely. Planned Development of Delhi through notification issued under Section 4 of the Act on 3.9.1957. Collector, Land Acquisition on 18.9.1961 made his award No. 1176 allowing compensation at the rate of Rs. 2,500.00. per bigha. Pt. Lila Ram sought reference for further enhancement in the amount of compensation with respect to 161 bigha 4 biswas of land. The said reference (Land Acquisition Case No. 519/62) was decided by Shri M.R. Sikka, Additional District Judge, Delhi on 15.7.1969 determining the amount of compensation and fixing the market value of the acquired land at the rate of Rs. 5,000.00 per bigha. Regular First Appeal No. 18/70 against the said award is by the claimants for further enhancement in the amount of compensation at the rate of Rs.26,000.00. per bigha and Cm 563/91 in the said appeal is an application for additional evidence. Regular First Appeal 504 /69 is a cross appeal by the Union of India against the said award of Additional District Judge dated 15.7.1969 questioning the enhancement in the amount of compensation. Regular First Appeal 19/70 is by Delhi Colonizers for further enhancement in the amount of compensation at the rate of Rs. 10,000.00. per bigha with respect of the land measuring I bigha Ii biswas against the similar award made in its land reference. Case No. 521 /62.
(4) The reference Court while determining the amount of compensation payable for acquisition of land situate in Village Garhi Jharia Maria (which is the subject-matter of Rfa 331/69) discarded bulk of the evidence adduced on behalf of the claimant as irrelevant and unreliable. The evidence discarded being the sale deedsExts.A-l,A-2,A-ll,A-12andA-15relatingtothelandsinVillageZamrudpur; Ext. A-3 sale deed of land situate in Village Yakutpur and the two awards Exts. A- 5and A-18relatingtotheacquisitionofland in Village Zamrudpur. Sale Deeds Exts. A-4, A-13 and A-14 being post notification, sales situated in well developed colony of Kailash were also discarded. Reliance was placed only on copies of awards Exts. A-17 and A-27 in L.A.C. Case No. 67/73 and 801/63 decided on 5.11.1965 and 7.6.1967. Both pertained to the determination of the amount of compensation payable for land situate in Village Garhi Jharia Maria and acquired under the same notification issued under Section 4 of the Act. Land near the Abadi was put in Block A and the remaining land in Block B for which market value at Rs. 3,800.00 and Rs. 3,500.00 per bigha was held to be the most reasonable as on the date of notification under Section 4(1) of the Act.
(5) While determining the amount of compensation payable for the lands situate in Village Zamrudpur (which is subject matter of Rf As 18/70 and 19/70) the reference Court discarded the sale instances reflected in Exts. A-1 to A-6 to be irrelevant and inadmissible, being post notification Sale instances. Relying on the sale instances Exts. A-7, A-8, A-9 and A-21, mutation Ext. A-10 and awards Exts. A-12, A-13 and A-19 and A-20 all pertaining to the land situate in Village Zamrudpur, it was held that/the market value of land situate in Village Zamrudpur approximately about the time when notification under Section 4 was published as reflected therein varied from Rs. 6,000.00 per bigha to Rs. 8,000.00 per bigha. Claimants' land was a large piece of land measuring about 161 bighas. As such the market value reflected in the sale instances of small pieces of land was held as not acceptable to be a fair guide for determining the compensation for large chunk of land, since it would be quite difficult to find out a customer who would buy the entire land measuring 161 bighas at the rate, which was offered for small pieces of land. It was observed that even in case the claimants were to convert the lands into plots, at least 33% of the total area would have to be left out for the purposes of road, ., lanes, open space etc. Awards Exts. A-12, A-13 and A-19 and A-20 also pertained to the acquisition of land in the same Village Zamrudpur acquired under the same J notification for same public purpose and were held to furnish a better guide as compared to the mutation Ext. A-IO and sale instances Exts. A-7, A-8, A-9 and A-21.ITwas held that the market value of the lands involved in the sale instances measuring about 15 bigha 6 biswas varied from Rs. 6,000.00. per bigha to Rs. 8,000.00. per bigha, therefore, to arrive at the fair market value for 161 bigha should be 67% of Rs. 6,000.00, namely. Rs. 4,000.00. per bigha. Taking into consideration the circumstances the fact that the acquired land enjoyed a fairly good situation and it constituted one compact block abutting roads and was found to be situated in the immediate vicinity of already developed colony and had a considerable potential value as a building site, it was held that Rs. 5,000.00. per bigha, on the basis of hypothetical building scheme, would be the fair amount of compensation to which the claimants would be entitled.
(6) During the pendency of appeal claimant Pt. Lila Ram expired. The appeals thereafter have been prosecuted by his legal representatives.
(7) It is the case of the claimants that late Pt. Lila Ram by himself and for Delhi Colonizers, a partnership-firm of his sons, purchased land in Village Zamrudpur and Garhi Jaria Maria in 1952-53 with a view to develop it into a colony known as Baikunth Colony. Pursuant to the said objective, lay out plans were submitted to the Delhi Improvement Trust who through its letter dated 8.8.1955 agreed to grant- sanction for development of the area on prescribed charges and wanted Pt. Lila Ram to deposit 25% of the survey and demarcation charges at the rate of Re. 1/ (equal to 0.06 Paise) per square yard at an early date. A sum of Rs. 2,000.00. the first instalment towards survey charges was sent with an enquiry whether the lay out plan of the colony had or had not been passed by the Trust. On 18.3.1957 another letter with triplicate copies of the key plan and site plan of the land was submitted on the lines on which Baikunth Colony was to be developed. It is further submitted that through letter dated 30.4.1957 B.C. Sarkar, Administrative Officer of Delhi Development (Provisional) Authority informed that the lay out plan of Baikunth Colony was under consideration and decision will be communicated shortly, when arrived at. Through letter dated 3.7.1957, Secretary, Delhi Development (Provisional) Authority informed that action on lay out plan had been stopped since the land involved therein was proposed to be acquired by the Government. It is contended that within a period of two months from the last letter a notification under Section 4 of the Act was published on 3.9.1957 conveying the intention of the Government to acquire the land at public expense for public purpose, namely, Planned Development of Delhi.
(8) In the above background it was vehemently contended that claimants lost the colony as also the profits, which they would have made by selling the plotted area. Situation of the land of the colony had been taken note of by the Collector, Land Acquisition that the land was situated on the road linking Lajpat Nagar with Kalkaji. There were large number of constructions in the immediate vicinity of the land, on both sides. The land had potential value as a building site and a large frontage was along the road on two sides. The land enjoyed a fairly good situation as it constituted one compact block abutting two important roads at the time of acquisition, it was situated in the immediate vicinity of developed colonies. In this background it was submitted by the learned Counsel for the claimants that the awards determining the market value under the provisions of the Act in the neighbouring villages ought to be made basis for determining the market value of the land since they were the relevant pieces of evidence. Developed colony of Kailash had already come up and Friends Colony was being developed in Village Kilokari. Boundaries of Village Kilokari, Bahpur and Zamrudpur adjoin each other. In the case of A.N. Chopra v. Union of India and Others, , market value of the land in Village Zamrudpur has been assessed at Rs. 13.00 per sq. yard. Sale deed of plot in Kailash Colony measuring 500 sq. yards dated 24.3.1961 (Ext. A/7) reflects sale consideration of Rs. 25,000.00 thereby giving market rate of Rs. 50.00 per sq. yard. Another sale deed dated 19.10.1961 measuring 444.26 sq. yards in Kailash Colony was sold for Rs. 20,346.00 thereby giving market rate of Rs. 45.00 per sq. yard. This material was not relied upon by the Additional District Judge for determining the market value of the land.
(9) Another submission made on behalf of the claimants has been that the market value of the acquired land was liable to be determined on hypothetical building scheme for a commercial-cum-residential colony since the appellant had lost a colony and they would have made profits by selling the plotted area. Considerable material had been placed on record to demonstrate that the sole idea for the purchase of the land was to develop the same in a colony. The purpose of assessing the amount of compensation is to determine the question that what the owner lost and not what the later gained. Applying the said dictum to the facts of this case the claimants by the acquisition lost a colony, which they would have built on the acquired land to be sold as a residential-cum-commercial area.
(10) The third submission made by the learned Counsel for the claimants has been that there has been no fair determination of the amount of compensation and prayed that by way of additional evidence the claimants be permitted to place on record judgments in Rfa 108/68 - UOlv. Het Ram decided on 20.2.1980; RFA381 / 70, Chand Behari v. Uoi decided on 3.9.1979; Rfa 95/70, Puneeta Singh v. Uoi decided on 16.7.1984; and Rfa 240/79, Moti Sagar v. Uoi decided on 17.4.1984, which fortified the submission of the claimants that market price of the lands acquired in Village Bahpur on 3.8.1959 was Rs. 19,000.00 per bigha whereas market price in the adjoining estate of Village Kilokari for the acquired land on 17.7.1957 was Rs. 26,000.00 per bigha. It would also suggest that there was fall in the prices of undeveloped land from 1957 to 1959. This fall in prices of undeveloped land, according to the submissions of learned Counsel for the claimants was due to the fact that Section 3(1) of the Delhi (Control of Building Operations) Act, 1955 which had come in force had empowered the Central Government to appoint an authority to be called Delhi Development (Provisional) Authority, which could declare an area to be controlled area regarding development of Delhi according to the plans of Delhi Development Authority. It made the purchases and sales of the land in Delhi useless and moreover, the sales of agricultural land in Delhi were being grossly under-valued, which resulted in low fixation of compensation for compulsory acquisition. It was submitted that the Deputy Commissioner, Delhi had issued an office order in April, 1990 fixing the market value of the lands in Village Bahpur at Rs. 96.00 per sq. yard. On jobbing back the prices at the rate of 12% per year the market value for the acquired land, as on the date of notification ought to be fixed at Rs. 19,035.00 per bigha or in other words at the rate of Rs. 19.35 per sq. yard for the lands situated in Village Zamrudpur and Garhi Jaria Maria.
(11) Learned Counsel for Union of India contended that there was no material justifying any increase in the amount of compensation. Relevant factors had duly been taken note of by the Additional District Judge in determining the amount of compensation. On the basis of the material on record what to say of further enhancement in the amount of compensation, even the award made by the Additional District Judge require interference by reducing the market value.
(12) The first submission made by the learned Counsel for the claimants is that the judgments and awards determining the market value of lands under the provisions of the Act in the neighbouring villages of Bahpur and Kilokari should be made the basis for determining the market value of the land since they are relevant pieces of evidence. It is contended that boundary of Kilokari and Bahpur adjoins Zamrudpur and Zamrudpur adjoins Village Garhi Jharia Maria. Reliance is also placed upon five decisions of this Court namely Het Ram, Chand Behari, Puneeta Singh, Moti Sugar and Amrit Singh Sabharwal's cases (supra) that the sale deed dated 17.7.1957 in favour of Standard Vacuum Oil Company therein was held to be a true guide for determining the amount of compensation in Village Kilokari at the rate of Rs. 26,000.00 per bigha. This submission, in the absence of any evidence on record about the genuine nature of the transactions and non-production of vendor and vendee or even attesting witnesses by the claimants or by the respondent, cannot be accepted. For the purposes of determining the market value of the land situate in Garhi Jharia Maria or Zamrudpur, the awards pertaining to the acquisition of the property in village Kilokari and Bahpur would be relevant only on proof of certain relevant factors.
(13) In order that price under comparable sale is taken into consideration as a relevant piece of evidence as furnishing the price basis for determining the market value of the acquired land, the comparable sale (a) must be genuine; (b) must have taken place at a time proximate to the date of publication of preliminary notification under Section 4(1) of the Act; (e) the land sold under the sale must be similar to the acquired land; and (d) the land sold under the sale must be in the vicinity of the acquired land. The location, size, shape, tenure, user or potentiality of land under comparable sale, if do not compare favourably with the acquired land, the prices fetched in comparable sales cannot furnish the 'price basis' for determination of the market value. Reference may be made to the decision of Supreme Court in M/s Printer's House Pvt. Ltd. v. Mst. Saiyad an (deceased) by L.Rs. and Others, . Comparable sale method of valuation of land in the absence of evidence as regards shape, size, potentiality or tenure of the lands in Village Gahri Jharia Maria and Zamrudpur with the sale instances or of the awards pertaining to land situated in Village Bahpur or Village Kilokari as on the date of the notification under Section 4 of the Act will not be permissible. It was but necessary for the claimants to have adduced relevant evidence in case claimants wanted to make use of any sale transactions pertaining to Village Bahpur or Village Kilokari that the lands in the two villages were similarly situated having same or similar potentiality or fertility or other similar advantageous features. In the absence of comparison as on the date of the notification under Section 4(1) of the Act, the awards relied upon cannot be held and regarded as relevant pieces of evidence and taken as safe guide for arriving at fair market value of the land.
(14) In M/s Printers' House Pvt. Ltd.'s case (supra) the Apex Court held that to determine the market value of the land under Section 23(1) of the Act the sales of the land under acquisition, if any, or the sales in the neighbourhood lands that possessed of same or similar potentiality or fertility or other advantageous features would furnish basis to determine just and fair market value on the premise of a hypothetical willing vendor and willing vendee. The question that whether the lands covered by the sale deeds and relied upon possessed same or similar potentiality or fertility or advantageous features would be a question of fact for which relevant evidence must be brought on record by examining relevant evidence. Since in the instant case there is no evidence of comparison of the lands situate in Village Bahpur or Village Kilokari or with the sale instance dated 17.7.1957 by which some land was alleged to have been sold to Standard Vacuum Oil Company with any part of the land acquired, it will not be safe for us to place reliance upon the decisions relied upon and for that reason to make the awards relevant for assessing the amount of compensation.
(15) The other submission of the learned Counsel for the claimants has been that the market value in the present case is liable to be determined on hypothetical building scheme for a commercial-cum-residential colony. In the impugned awards the Additional District Judge duly took into consideration the material on record in separately assessing that part of the land of Village Garhi Jharia Maria, which was found to be adjoining to or located near the link road by putting it in block A and separately assessing the remaining land, which was found to be further away. The same was put in block B. Similarly for the lands situated in Village Zamrudpur the reference Court while arriving at the conclusion that the fair market value of the land situate in Village Zamrudpur deserves to be assessed at Rs. 4.000.00, allowed additional sum of Rs. 1,000.00 per bigha at a flat rate for the acquired land making it as Rs. 5,000.00, keeping in view its advantageous position being nearer to the road. The claimants had pleaded that they had purchased the property for developing a colony for which purpose they had submitted lay outplans. But the reference Court in the impugned awards held that neither any concrete steps had been taken by the claimants from 1955 till the date when notification under Section 4 of the Act was issued, nor any amount was shown to have been spent for development. In the light of this finding on record that no steps had been taken by the claimants towards development of the land as colony and it was only a proposal, the only other factor which now deserves to be taken into consideration in arriving at the fair market value of the land would be the potentiality of the acquired land.
(16) In Dlf United (P) Ltd. v. Union of India, , the land' involved therein sought to be acquired was located in an undeveloped area but adjoining a developed colony, namely. Greater Kailash. The reference Court while determining the market value on the basis of hypothetical building scheme firstly arrived at the total value of plots as the developed area (namely. Greater Kailash). The cost required for development and the cost of land was deducted from the price of developed plots. The balance figure was held to be the market value of undeveloped land on the basis of hypothetical building scheme. Approving the method, this Court observed that the land in question had a potential value. The acquired land was purchased for the extension of colony, therefore, land had a special value in the hands of the claimants as they would have exploited it for the purpose of extension had the land not been acquired.
(17) The above method, as was adopted and approved by this Court by taking into consideration the cost of development into account cannot be applied in the instant case. No such data is placed or is available on the record of this case, in order to arrive at any workable method to assess the amount of compensation on the basis of hypothetical building scheme. It was but necessary for the claimants to have produced on record some material as to the cost of the land, the amount that was likely to be spent for development of the colony, the prices likely to be fetched as on the date of notification under Section 4 of the Act. Statement of Prem Raj made on behalf of the claimants that the claimants were colonisers and the land was purchased for the purpose of making colony and the price of land prevailing in the locality varied from Rs. 60.00 to Rs. 70.00. per sq. yard and an expenditure of Rs. 3.50 sq. yard was the ordinary expense in those days is without any supporting evidence and cannot be relied upon.
(18) It is now a settled law that market value cannot be fixed with mathematical precision but must be based on sound discretion exercised by the Reference Court in arriving at just and reasonable price. It should not be based on feats of imagination or flight of fancy. Determination of compensation for compulsory acquisition involves consideration of the price which a hypothetical willing purchaser can be expected to pay for the lands in the existing use as well as valuable potentialities. The acid test is the arm chair of the willing vendor would offer and a prudent willing buyer, taking all relevant prevailing conditions of the normal market, fertility of the land location, suitability of the purpose it was purchased, its existing potentialities and likely use to which the land is capable of being put in the same condition would offer to pay the price, as on the date of the notification. In case of acquisition of large tracts of lands for projects situated in several villages, stray sale-deeds of small extent here and there would not form the basis to determine the compensation. Reference, if any, in case it is required, may be made to a decision of the Supreme Court in K. Posayya b Others v. Special Tehsildar, .
(19) It is also necessary that a fair estimate with respect to the surrounding circumstances and the evidence be made so that the party who looses the property on account of compulsory acquisition gets a fair amount of compensation. The submission of the claimants that a colony was lost to them and they must be compensated on that basis by allowing re-instatement value has to be negatived in the light of the ratio of the decision in K. Possiaya's case (supra), holding that the doctrine of re-instatement value cannot be applied in determining the market value under Section 23(1) of the Act. The reference Court in impugned awards has duly taken into consideration the potentiality of the land that the same could be utilized for the purpose of building sites. For that reason, that part of the land, which was found adjacent to the road in Garhi Jharia Maria, the same was rightly put in block A and higher amount of compensation as compared to the remaining land was allowed.
(20) The submission of the learned Counsel for the claimants that the Court ought to determine the market value of the acquired land on the basis of the office order dated 2.5.1990 also deserves to be negatived, in the absence of relevant and material evidence on record. Market value of the acquired land has to be determined with reference to the date of preliminary notification. Assuming that the office order issued by the Government notifying certain rates of the lands in different localities of Delhi may be taken a piece of evidence, but such an order notifying rates as prevalent in 1990 will not be relevant. In order that jobbing backward may be resorted to in arriving at the market value in the year 1957 with reference to the prices in 1990 what was necessary for the claimants was to bring on record relevant material and the conditions prevailing in between 1957 and 1990; the market index of the rise in prices of the lands from 1957 to 1990, the rate of the development etc It is a well-known fact that on issuance of general preliminary notification in 1957 for acquiring vast tract of land for the planned development of Delhi, development activity in and around Delhi started taking place at a tremendous place and there has been many-fold rise in prices. The crucial date for determining the market value under the provisions of the Act would be the date of publication of notification under Section 4(1) of the Act. When comparable sales are not available of the same date as the date of publication of notification under Section 4(1) of the Act, what is required is that such sales should be of the dates proximate in point of time to the date of notification. Most of them are bound to be of a date either prior to or subsequent to the date of notification. It is also of paramount consideration that in determining the market value and fixation of compensation, the Court should be alive to the factors mentioned in Section 24 of the Act and keep them at back of the mind and should not be influenced by the future or later development in the locality or neighbourhood and should not get influenced by the prevailing situation as on the date of determination of the compensation. Its consideration should alone be confined to the market value prevailing as on the date of the notification under Section 4(1) of the Act.
(21) For the revenue estates in question, namely, Garhi Jharia Maria and Zamrudpur notifications were issued in 1957. The same were for the planned development of Delhi and there has been tremendous development in and around the area. As such it will not be safe to place reliance upon any office order issued by the Government in the year 1990 notifying market value of the lands in 1990 which States that irrespective of the sale consideration mentioned in any sale deed, minimum price for agricultural land, for its sheer location in Union Territory of Delhi, irrespective of quality of land for the purpose of registering the sale deed w.e.f. 27.4.1990 would be Rs. 4.65 lacs per acre for all agricultural lands. In case jobbing backward ought to be resorted to in order to arrive at the market value of 1957 with reference to the market value of 1990 it was also necessary for the claimants to have produced on record material that prices either remained static during the intervening period or that there has been gradual rise in prices and not erratic or abnormal rise in prices of the lands. Post notification sales or sale transactions or awards are also considered relevant under certain circumstances but for that also it is necessary for the persons relying on such instances to bring on record some relevant material so that the extent of deduction, which is to be made per year, may be arrived at, when jobbing back has to be resorted to. In the absence of any material, it may not be possible to hold that on jobbing back from 1990 the market value of lands in Garhi Jharia Maria or Zamrudpur would be Rs. 26,000.00 per bigha in the year 1957 as in the case of lands in Kilokari or Bahpur.
(22) Taking into consideration the evidence adduced on record, we do not find that any wrong principles have been applied by the reference Court in arriving at die fair and reasonable market value of the land. For Village Garhi Jharia Maria awards Exts. A-17 and A-27 were made the basis for arriving at the compensation, which awards were not challenged by the State Government and were taken to be an admission on its part as the fair market value of the land. Similarly for Village Zamrudpur also we find that awards Exts. A-12 to A-20 were made the basis and since the same were with respect to smaller pieces of land, allowing the deduction of 33% towards development charges and taking 67% to be the value, the Court arrived at a figure of Rs. 4,000.00 per bigha to be the market value but added Rs. 1,000.00 per bigha as an increase due to potentiality and better locality of the land. Claimants' appeals, thus, deserve dismissal, which are hereby dismissed.
(23) The reference Court in its award rightly allowed interest under Section 4(3) of Land Acquisition Act, 1967 taking into consideration the fact that notification under Section 4(1) was published on 3.9.1957 and declaration under Section 6 was made on 15.2.1961 and award was made on 18.9.1961. The award of interest under Section 4(3) of the Act is perfectly in consonance with law. No interference is called for in that behalf. Consequently the appeals filed by the Union of India have also no force, which are dismissed. Though no separate orders have been passed on applications for additional evidence, arguments at the bar were addressed as if the said evidence was allowed to be taken on record and we have also taken into consideration the evidence while deciding the appeals.