Karnataka High Court
The Assistant Commissioner vs Bassamma W/O Mahanthappa Yelmalli Anr on 22 February, 2013
Bench: N.Kumar, H.G.Ramesh
1
IN THE HIGH COURT OF KARNATAKA CIRCUIT
BENCH AT GULBARGA
Dated this the 22nd day of February, 2013
PRESENT
THE HON'BLE MR.JUSTICE N.KUMAR
AND
THE HON'BLE MR.JUSTICE H.G.RAMESH
MFA Nos. 31005 of 2011 (LAC-DB)
C/W
MFA Nos. 31004, 31006, 30995, 30996, 31767, 31768
31769, 31770 and 31771 of 2011 (LAC-DB)
In MFA No. 31005 of 2011
BETWEEN:
Bassamma
W/o Mahantappa
Since dead by LR
Mahantappa
S/o Channabasappa Yelmalli
Age 65 years
Occ: Agriculture
R/O Hirapur
Tq. Gulbarga ...Appellant
(By Sri Amaresh S. Roja, Advocate)
2
AND:
1. The Assistant Commissioner &
Special land Acquisition Officer
Gulbarga
2. The Executive Engineer
Karnataka Housing Board
Shanti Nagar
Gulbarga ...Respondents
(By Sri Manavendra Reddy, Advocate)
This MFA is filed under Section 54(1) of L. A. Act
against the judgment and award dated 23-4-2010 passed in
LAC No.114/2003 on the file of the II Additional Civil Judge
(Sr. Dn.) at Gulbarga, wherein partly allowing the Reference
Petition and herein seeking enhancement of compensation.
In MFA No. 31004 of 2011
BETWEEN:
Rajshekhar
S/o Parameshwarappa Yelmalli
Age Major
Occ: Agriculture
R/O Hirapur
Tq. Gulbarga ... Appellant
(By Sri Amaresh S. Roja, Advocate)
3
AND:
1. The Assistant Commissioner &
Special land Acquisition Officer
Gulbarga
2. The Executive Engineer
Karnataka Housing Board
Shanti Nagar
Gulbarga ...Respondents
(By Sri Manavendra Reddy, Advocate for R1;
Sri Ashok R. Kalyanashetty & Sri S. S. Mamadapur,
Advocates)
This MFA is filed under Section 54(1) of L. A. Act
against the judgment and award dated 23-4-2010
passed in LAC No.112/2003 on the file of the II
Additional Civil Judge (Sr. Dn.) at Gulbarga, wherein
partly allowing the Reference Petition and herein
seeking enhancement of compensation.
In MFA No. 31006 of 2011
BETWEEN:
Giriraj
S/o Sharanappa Yelmalli
Age 39 years
Occ: Agriculture & Service
R/O Hirapur
Tq. Gulbarga ... Appellant
(By Sri Amaresh S. Roja, Advocate)
4
AND:
1. The Assistant Commissioner &
Special land Acquisition Officer
Gulbarga
2. The Executive Engineer
Karnataka Housing Board
Shanti Nagar
Gulbarga
...Respondents
(By Sri Manavendra Reddy, Advocate for R1;
Sri Ashok R. Kalyanashetty & Sri S. S. Mamadapur,
Advocates)
This MFA is filed under Section 54(1) of L. A. Act
against the judgment and award dated 23-4-2010 passed in
LAC No.113/2003 on the file of the II Additional Civil Judge
(Sr. Dn.) at Gulbarga, wherein partly allowing the Reference
Petition and herein seeking enhancement of compensation.
In MFA No. 30995 of 2011
BETWEEN:
Giriraj
S/o Sharanappa
Age 44 years
Occ: Agriculture & Service
R/O Hirapur
Tq. Gulbarga ... Appellant
(By Sri Ameet Kumar Deshpande, Advocate)
5
AND:
1. The Assistant Commissioner &
Special land Acquisition Officer
Gulbarga
2. The Executive Engineer
Karnataka Housing Board
Shanti Nagar
Gulbarga- 585 103 ...Respondents
(By Sri Manavendra Reddy, Advocate for R1;
Sri Ashok R. Kalyanashetty & Sri S. S. Mamadapur,
Advocates)
This MFA is filed under Section 54(1) of L. A. Act
against the judgment and award dated 23-4-2010 passed in
LAC No.115/2003 on the file of the II Additional Civil Judge
(Sr. Dn.) at Gulbarga, wherein partly allowing the Reference
Petition and herein seeking enhancement of compensation
herein.
In MFA No. 30996 of 2011
BETWEEN:
Parmeshwar
S/o Hanmath Hospeti
Since deceased
Basalingamma
W/o Sharanappa
Since deceased
Baswaraj
S/o Hanmanthappa Hospeti
Age: About 64 years
Occ: Agriculture and Service
6
R/o H.No.10-256
Kondad Galli, Brahampur
Gulbarga - 585 103 ... Appellant
(By Sri Ameet Kumar Deshpande, Advocate)
AND:
1. The Assistant Commissioner &
Special land Acquisition Officer
Gulbarga
2. The Executive Engineer
Karnataka Housing Board
Shanti Nagar
Gulbarga- 585 103 ...Respondents
(By Sri Manavendra Reddy, Advocate for R1;
Sri Ashok R. Kalyanashetty & Sri S. S. Mamadapur,
Advocates)
This MFA is filed under Section 54(1) of L. A. Act
against the judgment and award dated 23-4-2010 passed in
LAC No.111/2003 on the file of the II Additional Civil Judge
(Sr. Dn.) at Gulbarga, wherein partly allowing the Reference
Petition and herein seeking enhancement of compensation.
In MFA No. 31767 of 2011
BETWEEN:
The Assistant Commissioner &
Special land Acquisition Officer
Gulbarga ... Appellant
(By By Sri Manavendra Reddy, Advocate)
7
AND:
1. Parmeshwar
S/o Hanmanthappa Hospeti
Age 48 years
Occ: Agriculture
2. Baslingamma
W/o Sharanappa
Age 65 years
Occ: Agriculture
3. Basawaraj
S/o Hanmanthappa Hospeti
Age 53 years
Occ: Agriculture and Service
4. The Executive Engineer
Karnataka Housing Board
Shanti Nagar
Gulbarga- 585 103 ...Respondents
(By Sri Shivakumar Kaloor, Advocate for R3;
Sri Ashok R. Kalyanashetty, Advocate for R4
This MFA is filed under Section 54(1) of L. A. Act
against the judgment and award dated 23-4-2010 passed in
LAC No.111/2003 on the file of the II Additional Civil Judge
(Sr. Dn.) at Gulbarga, wherein partly allowing the Reference
Petition and awarded acquired Land at the rate of Rs.28/-
per Sq.ft.
8
In MFA No. 31768 of 2011
BETWEEN:
The Assistant Commissioner &
Special land Acquisition Officer
Gulbarga ... Appellant
(By Sri Manavendra Reddy, Advocate)
AND:
1. Rajshekhar
S/o Parmeshwarappa Yelmalli
Age Major, Occ: Agriculture
R/o Hirapur
Tq. & Dist. Gulbarga
2. The Executive Engineer
Karnataka Housing Board
Shanti Nagar
Gulbarga- 585 103 ...Respondents
(By Sri Ameet Kumar Deshpande, Advocate for R1;
Sri Ashok R. Kalyanashetty & Sri S. S. Mamadapur,
Advocate for R2)
This MFA is filed under Section 54(1) of L. A. Act
against the judgment and award dated 23-4-2010 passed in
LAC No.112/2003 on the file of the II Additional Civil Judge
(Sr. Dn.) at Gulbarga, wherein partly allowing the Reference
Petition and awarded acquired Land at the rate of Rs.28/-
per Sq.ft.
9
In MFA No. 31769 of 2011
BETWEEN:
The Assistant Commissioner &
Special land Acquisition Officer
Gulbarga ... Appellant
(By Sri Manavendra Reddy, Advocate)
AND:
1. Giriraj
S/o Sharanappa Yelmalli
Age 32 years
Occ: Agriculture & Service
R/O Hirapur
Tq. Gulbarga
2. The Executive Engineer
Karnataka Housing Board
Shanti Nagar
Gulbarga- 585 103 ...Respondents
(By Sri Ameet Kumar Deshpande, Advocate for R1;
Sri Ashok R. Kalyanashetty & Sri S. S. Mamadapur,
Advocate for R2)
This MFA is filed under Section 54(1) of L. A. Act
against the judgment and award dated 23-4-2010 passed in
LAC No.113/2003 on the file of the II Additional Civil Judge
(Sr. Dn.) at Gulbarga, wherein partly allowing the Reference
Petition and awarded acquired Land at the rate of Rs.28/-
per Sq.ft.
10
In MFA No. 31770 of 2011
BETWEEN:
The Assistant Commissioner &
Special land Acquisition Officer
Gulbarga ... Appellant
(By Sri Manavendra Reddy, Advocate)
AND:
1. Bassamma
W/o Mahantappa Yelamalli
Age Major]
Occ. Agril and Household
R/o Hirapur
Tq. & Dist. Gulbarga
Dead, represented by her L.R
Mahantappa
through Power of Attorney
Holder by name
Sri Rajshekhar
S/o Parmeshwar Yelimalli
Age Major
Occ: Agriculture
R/O Hirapur
Gulbarga
2. The Executive Engineer
Karnataka Housing Board
Shanti Nagar
Gulbarga- 585 103 ...Respondents
(By Sri Ameet Kumar Deshpande, Advocate for R1;
Sri Ashok R. Kalyanashetty & Sri S. S. Mamadapur,
Advocate for R2)
11
This MFA is filed under Section 54(1) of L. A. Act
against the judgment and award dated 23-4-2010 passed in
LAC No.114 of 2003 on the file of the II Additional Civil
Judge (Sr. Dn.) at Gulbarga, wherein partly allowing the
Reference Petition and awarded acquired Land at the rate of
Rs.28/- per Sq.ft.
In MFA No. 31771 of 2011
BETWEEN:
The Assistant Commissioner &
Special land Acquisition Officer
Gulbarga ... Appellant
(By Sri Manavendra Reddy, Advocate)
AND:
1. Giriraj
S/o Sharnappa Yelmalli
Age 40 years
Occ: Agriculture & Service
R/O Hirapur
Tq. Gulbarga
2. Rajshekhar
S/o Parmeshwarappa
Age Major
Occ: Agriculture & Service
R/O Hirapur
Tq. Gulbarga & Dist. Gulbarga
3. The Executive Engineer
Karnataka Housing Board
Shanti Nagar
Gulbarga- 585 103 ...Respondents
12
(By Sri Ameet Kumar Deshpande, Advocate for R1 & 2
Sri Ashok R. Kalyanashetty & Sri S. S. Mamadapur,
Advocate for R3
This MFA is filed under Section 54(1) of L. A. Act
against the judgment and award dated 23-4-2010 passed in
LAC No.115of 2003 on the file of the II Additional Civil Judge
(Sr. Dn.) at Gulbarga, wherein partly allowing the Reference
Petition and awarded acquired Land at the rate of Rs.28/-
per Sq.ft.
These MFAs coming on for admission this day,
N.KUMAR, J., made the following:
JUDGMENT
The subject matter of these appeals is the common judgement passed by the Reference Court fixing the market value of the lands acquired at Rs.28/- per Sq.ft. and granting all other statutory consequential benefits to the land owners.
2. The parties are referred as they are referred to before the Reference court.
13
3. The claimants in LAC No. 111/2003, 112/2003, 113/2003, 114/2003, 115/2003 are all owners of lands situated in the village Biddapur in Gulbarga taluka. All of them own extent of land as clearly set out in the judgement of the Reference Court. They are situate very near to Gulbarga city. The Government sought to acquire the lands belonging to these claimants by issuing a notification dated 22.06.1985 u/s 4(1) of the Land Acquisition Act 1894 (hereinafter referred to as Act) After complying with all legal formalities, the Special Land Acquisition Officer awarded a sum of Rs.35,000/- per acre as compensation. The claimants protested they sought for reference. Before the Reference court the claimants claimed Rs.50/- per Sq.ft. as compensation on the ground that the lands under acquisition has got NA potential. In support of their claim they examined 05 witnesses as PW 1 to 5 and produced 60 documents. On behalf of respondent an official was examined as RW 1 and they also produced 05 documents which are marked as Ex.R-1 to R-5. On appreciation of 14 aforesaid oral and documentary evidence on record, the Reference court held that the award passed by the Special Land Acquisition Officer is inadequate and improper and the Reference court awarded a sum of Rs.28/- per Sq.ft. as compensation and also granted all statutory benefits.
4. Aggrieved by the said award of the Reference court the State has preferred 05 appeals seeking reduction in the compensation. The claimants have preferred 05 appeals seeking enhancement of compensation. Thus, all these 10 appeals are before us.
5. The learned Government Advocate assailing the impugned award contended that in coming to the conclusion that Rs.28/- per Sq.ft. is reasonable market value, the Reference court has relied on Ex.P-60 the judgement of Division Bench of this Court rendered on 28th August 2008 in MFA No. 8363/2007, which was preferred against the judgement LAC No. LAC 831/2000 which is also produced in the case as Ex.P-58. In those cases lands situate in 15 Nizampur, Tajsultanpur and Jafarabad of Gulbarga taluka are involved. The preliminary notification in the said case is dated 11.12.1997. In the said case the Reference court has relied on Ex.P-50, P-51 and P-54 and fixed the market price at Rs.12.50 per Sq.ft. They had deducted 33 ½% towards development charges. The appellate court took note of the fact in MFA No. 5637/2005 Rs.28/- per Sq.ft. was awarded. Whereas, in the impugned judgement the Reference court has deducted 33 ½ % and therefore, the appellate court held proper deduction should be 20% and therefore, awarded Rs.28/- per Sq.ft. as market value in MFA No. 5637/2005 and also only 20% has been deducted towards development charges. The learned Government Advocate submits that in the first place the deduction of 20% towards development charges is wholly illegal as the Supreme Court in the case of Gulbarga only has laid down law regarding what is the extent of deduction should be made regarding development charges. Secondly he contends that land situate in those villages are not similarly situate and 16 therefore they are not comparable and the said notifications are issued after two years after the preliminary notification in the instant case. He further submits that awarding of Rs.28/- per Sq.ft is erroneous and it required to be reduced. The learned Government Advocate also submits that the Reference court has awarded compensation from the date of taking possession prior to 4(1) notification which is illegal and liable to be set aside.
6. Per contra the learned counsel appearing for the claimants contend that lands which are the subject matter of acquisition in this case are comparable to the lands which is the subject matter of acquisition in these cases and they are similarly situate. When this Court consistently held that minimum 40% is the development charges to be deducted. There is no reason for to deviate from the said finding. He further contended that in the instant case Government acquired 179 acres of adjoining lands for the purpose of establishment of gliding center by issuing preliminary notification on 06.01.1977. Without acquiring the land 17 under acquisition, along with those lands, they also enclosed these lands. In the said proceedings the Special Land Acquisition Officer awarded Rs.1,500/- per acre as compensation. On reference, the Reference court enhanced to Rs.15,000/- per acre and this Court in appeal has enhanced to Rs.35,000/- per acre. As the lands were acquired without acquisition these claimants were unable to enjoy the properties. Secondly, the proposed gliding center did not come up. On the contrary the acquired lands was given to Housing Board for formation of residential layout and some part of the land has been given to High Court for establishment of Circuit Bench. In the process nearly 15 years have lapsed and there was no development as such in this part of the city. Therefore, the court has to take into consideration the peculiar facts of this case and should not insist on sale deeds of adjoining lands to determine the market value. In Vakkalagera village which is about 5-7 kms from the heart of Gulbarga town which are acquired during the same period Rs.13/- per Sq.ft has been awarded. In case 18 of similar lands which are adjoining the acquired lands, this court has awarded Rs.28/- per Sq.ft as compensation and in fact the Government has not preferred any appeal against said orders. Even if some provision is to be made for reduction of the compensation, as there is two years difference in the notification, in the totality of circumstances no case for reduction is made out. In fact a case for enhancement is made out. Because in the acquired land today the Karnataka High Court Circuit Bench is located, in front of it Housing Board has come with housing colony and all around the value of the property has gone up to Rs.100/- per Sq.ft. These aspects has to be kept in mind to arrive at just compensation payable to the land owners. Even if the possession has been taken prior to the issue of 4(1) notification and the landlords are not using the land as the State has illegally fenced the property and therefore, the claimants are entitled to damages and compensation. Therefore, the award of the Reference court cannot be found fault with.
19
7. In the light of the aforesaid facts and rival contentions the point that arises for our consideration is:
(1) Whether awarding of Rs.28/- per Sq.ft as compensation for the acquired lands is it reasonable? Or is it required to be reduced or enhanced?
(2) Whether the claimants are entitled to payment of interest from the date of taking possession illegally till the date of issue of final 4(1) notification?
POINT NO.1:
8. The material on record clearly discloses that the lands which are subject matter of acquisition are situate in the village Biddapur. They are all agricultural lands. Roughly it is about 37 acres. On the northern side of these lands lies a road leading to Afzalpur. To the south lies road leading to Jewargi and Bijapur. Towards the east is the Gulbarga city. Towards west the agricultural lands. It is not 20 in dispute that an extent of 179 acres of land adjoining acquired lands were notified for acquisition on 06.01.1977 for setting up the gliding center proposal (Airport) for Gulbarga. It is also on record while enclosing the said acquired lands they have also included the lands under acquisition and fenced it without initiating any acquisition proceedings. In fact the possession was taken on 02.02.1983 and the claimants were prevented from enjoying their property from that day onwards. As stated above the High Court has fixed Rs.35,000/- per acre as compensation for the dry land to the lands acquired in the said notification. It is on 10.01.1995 after the petitioners' filed Writ petition and got direction a Government order was passed taking a decision to acquire lands under acquisition. Accordingly on 22.06.1995 4(1) notification issued to acquire the lands for gliding center. The Special Land Acquisition Officer awarded a sum of Rs.35,000/- per acre as compensation for the acquired lands. It is interesting to note that this Court in MFA No. 4534/1999 awarded sum of Rs.35,000/- per are to 21 the lands which are similarly situate which are the subject matter of notification of 06.01.1977 which is adjoining to these lands, but still the Special Land Acquisition Officer after 18 years awarded Rs.35,000/- per acre. The claimants did not accept the award and sought for reference. The Reference court relied on the judgement of this court in MFA No. 1863/2007 marked at Ex.P-60 in the case to arrive at the conclusion that the market value of the acquired lands should be Rs.28/- per Sq.ft. The said order was passed by this court in appeal against the award passed in LAC No. 831/2000, where the Reference court had awarded compensation at the rate of Rs.12.50 per Sq.ft. in respect of a notification issued on 11.12.1997. In arriving at the said figure 33 ½% was deducted towards development charges treating the land as NA potential. This Court in Ex.P-60 took note of the judgement in MFA No. 5837/2005 where compensation had been awarded Rs.28/- per Sq.ft. As in the impugned judgement 33 ½ % was deducted towards development charges and as in MFA No. 5837/2005 20% 22 had been deducted towards development charges, adopting the said procedure i.e., 20% deduction the Court awarded Rs.28/- per Sq.ft. We are unable to make out the basis for arriving Rs.28/- per Sq.ft. except that the development charges was reduced from 33 ½ % to 20%. When the amount awarded was Rs.12.50 per Sq.ft even after the deduction it will not become Rs.28/- per Sq.ft. Said notification was two years subsequent to the present notification. But unfortunately in the present case we do not have comparable sales as well as another reason may be there is substantial extent of land was acquired for setting up of Airport, but now Airport was not developed. Then the purpose for which the lands acquired has changed. It is now given to Housing Board and the acquired land is given to High Court. In the process probably no developmental activity took place and there are no sale transactions to determine the correct market value. The learned counsel appearing for the claimants submits that that aspect has to be taken note of and because when the lands were acquired for Airport and 23 entire lands was fenced, normally many restrictions came to be imposed around the area of Airport for development purpose. Therefore, no development took place in the surrounding area nor any development in the lands which is acquired. Even if the Airport had come up, the value of the lands acquired 08 years thereafter would have multiplied. Even that advantage was lost to the claimants. He submits that this aspect has to be taken into consideration, and the court has to make sufficient provision for fixation of the correct market value on the date of acquisition. The learned Government Advocate submits in respect of acquisition for the similar period in Vakkalagera which is situate about 7 kms from the lands acquired, Rs.13/- was awarded as compensation per Sq.ft. which has been upheld by this Court. That is a well developed area. Therefore, under no circumstances amount to be awarded in the instant case can be more than Rs.13/- per Sq.ft.
9. In the light of these material and submissions we have looked into those judgements. In the judgement 24 where Rs.28/- per Sq.ft. is awarded, the date of preliminary notification is dated 11.02.1997. Whereas, in the instant case the preliminary notification is dated 10.01.1995. Therefore, atleast 20% has to be deducted by backwards. Then we have to take Rs.5.60 out of Rs.28/-. 20% taken as the deduction towards development charges which is contrary to law declared by the Supreme Court. The Supreme Court in the case of Lal Chand v. Union of India and Anr., has law laid down following guidelines for determining the market value of the lands acquired.
"7. On careful consideration, we are of the view that such allotment rates of plots adopted by Development Authorities like DDA cannot from the basis for award of compensation for acquisition of undeveloped lands for several reasons. Firstly, market value has to be determined with reference to large tracts of undeveloped agricultural lands in a rural area, whereas the allotment rates of development authorities are with reference 25 to small plots in a developed lay out falling within Urban area. Secondly DDA and other statutory authorities adopt different reates for plots in the same area with reference to the economic capacity of the buyer, making it difficult to ascertain the real market value, whereas market value determination for acquisitions is uniform and does not depend upon the economic status of the land loser. Thirdly, we are concerned with market value of free hold land, whereas the allotment "rates" in the DDA Brochure refer to the initial premium payable on allotment of plots on leasehold basis. We may elaborate on these three factors.
8. First factor: The percentage of 'deduction for development' to be made to arrive at the market value of large tracts of undeveloped agricultural land (with potential for development), with reference to the sale price of small developed plots, varies between 20% to 75% of the price of 26 such developed plots, the percentage depending upon the nature of development of the lay out in which the exemplar plots are situated. The 'deduction for development' consists of two components. The first is with reference to the area required to be utilised for development works and the second is the cost of the development works. For example if a residential layout is formed by DDA or similar statutory authority, it may utilise around 40% of the land area in the layout, for roads, drains, parks, play grounds and civic amenities (community facilities) etc. The Development Authority will also incur considerable expenditure for development of undeveloped land into a developed layout, which includes the cost of levelling the land, cost of providing roads, underground drainage and sewage facilities, laying waterlines, electricity lines and developing parks and civic amenities, which would be about 35% of the value of 27 the developed plot. The two factors taken together would be 'deduction for development' and can account for as much as 75% of the cost of the developed plot. On the other hand, if the residential layout, the percentage of 'deduction for development' may be far less. This is because in an unauthorised lay outs, usually no land will be set apart for parks, play grounds and community facilities. Even if any land is set apart, it is likely to be minimal. The roads and drains will also be narrower, just adequate for movement of vehicles. The amount spent on development work would also be comparatively less and minimal. Thus the deduction on account of the two factors in respect of plots in unauthorised layouts, would be only about 20% plus 20% in all 40% as against 75% in regard to DDA plots. The 'deduction for development' with references to prices of plots in authorised private residential layouts may range between 50% to 65% depending upon the 28 standards and quality of the layout. The position with reference to industrial layouts will be different. As the industrial plots will be large (say of the size of one or two acres or more as contrasted with the size of residential plots measuring 100 Sq.m.to 200 Sq.m.), and as there will be very limited civic amenities and no playgrounds, the area to be set apart for development (for roads, parks, playgrouds and civic amenities) will be far less; and the cost to be incurred for development will also be marginally less, with the result the deduction to be made from the cost of a industrial plot may range only between 45% to 55% as contrasted from 65% to 75% for residential plots. If the acquired land is in a semi-developed urban area, and not an undeveloped rural area, then the deduction for development may be as much less, that is, as little as 25% to 40%, as some basic infrastructure will already be available. (Note: The percentages mentioned above 29 are tentative standards and subject to proof to the contrary).
9. Therefore the deduction for the 'development factor' to be made with reference to the price of a small plot in a developed layout, to arrive at the cost of undeveloped land, will be for more than the deduction with reference to the price of a small plot in an unaturhorised private layout or an industrial layout. It is also well known that the development cost incurred by statutory agencies is much higher than the cost incurred by private developers, having regard to higher overheads and expenditure. Even among the layouts formed by DDA, the percentage of land utilized for roads, civic amenities, parks and play grounds may vary with reference to the nature of layout-whether it is residential, residential-cum-commercial or industrial; and even among residential layouts, the percentage will differ having regard to the size of the plots, width of the 30 roads, extent of community facilities, parks and play grounds, provided. Some of the layouts formed by statutory Development Authorities may have large areas earmarked for water/sewage treatment plants, water tanks, electrical sub-stations etc. in addition to the usual areas earmarked for roads, drains, parks, playgrounds and community/civic amenities. The purpose of the aforesaid examples is only to show that the 'deduction for development' factor is a variable percentage and the range of percentage itself being very wide from 20% to 75%.
10. Second factor: DDA and other statutory development authorities adopt different rates for allotment, plots in the same layout, depending upon the economic status of the allottees, classifying them as high income group, middle income group, low income group, and economically weaker sections. As a consequence, in the 31 same layout plots may be earmarked for persons belonging to economically weaker section at a price/premium of Rs.100/- Sq.m, whereas the price /premium charged may be Rs.150/- per sq.m. for members of low income group, Rs.200/- per sq.m. for persons belonging to middle income group andRs.250/- sq.m. for persons belonging to High income groups. The ratio of sites in a layout reserved for HIG, MIG, LIG and EWS may also vary. All these varying factors reflect in the rates for allotment. It will be illogical to take the average of the allotment rates, as the 'market value' of those plots, does not depend upon the cost incurred by DDA statutory authority, but upon the paying capacity of the applicants for allotment.
11. Third factor: Some development authorities allot plots on freehold basis, that is by way of absolute sale. Some development authorities like DDA allot plots on leasehold basis. Some have premium 32 which is almost equal to sale price, with a nominal annual rent, whereas others have lesser premium, and more substantial annual rent. There are standard methods for determining the annual rent value with reference to the value of a freehold property. There are also standard methods for determining the value of free hold (ownership) rights with reference to the annual rent income in regular leases. But it is very difficult to arrive at the market value of a freehold property with reference to the premium for a lease hold plot allotted by DDA. As the period of lease is long, the rent is very nominal, some times there is a tendency among public to equate the lease premium rate (allotment price) charged by DDA, as being equal to the market value of the property. However, in view of the difficulties referred to above, it is not safe or advisable to rely upon the allotment rates/auction rates in regard to the plots formed by DDA in a developed layout, in 33 determining the market value of the adjoining undeveloped freehold lands. The DDA brochure price has therefore to be excluded as being not relevant.
Whether the circle rates/guideline value rates can be relied upon to determine the market value?
10. Following the judgement of Supreme Court in the case of Chandrasekhar dead by LRs. .vs. Land Acquisition Officer and another reported in 2012(1) Supreme Court Cases 390, dealing with the lands situate in village Badepur and Rajapur of Gulbarga district have held as under;
"19.1. Firstly, space/area which would have to be left out, for providing indispensable amenities like formation of roads and adjoining pavements, laying of sewers and rain/flood water drains, overhead water tanks and water lines, water and effluent treatment plants, electricity sub-stations, electricity lines and 34 street lights, telecommunication towers, etc. Besides the aforesaid, land has also to be kept apart for parks, gardens and playgrounds. Additionally, development includes provision of civic amenities like educational institutions, dispensaries and hospitals, police stations, petrol pumps, etc. This "first component" may conveniently be referred to as deductions for keeping aside area/space for providing developmental infrastructure.
19.2. Secondly, deduction has to be made for the expenditure/expense which is likely to be incurred in providing and raising the infrastructure and civic amenities referred to above, including costs for levelling hillocks and filling up low-lying lands and ditches, plotting out smaller plots and the like. This "second component" may conveniently be referred to as deductions for developmental expenditure/expense.35
20. It is essential to earmark appropriate deductions out of the market value of an exemplar land, for each of the two components referred to above. This would be the first step towards balancing the differential factors. This would pave the way for determining the market value of the undeveloped acquired land on the basis of market value of the developed exemplar land.
23. Having given our thoughtful consideration to the analysis of the legal position referred to in the foregoing four paragraphs, we are of the view that there is no discrepancy on the issue in the recent judgments of this Court. In our view, for the "first component" under the head of "development", deduction of 33 1/3% can be made. Likewise, for the "second component" under the head of "development", a further deduction of 33 1/3% can additionally be made. The facts and circumstances of each case would 36 determine the actual component of deduction, for each of the two components. Yet under the head of "development", the applied deduction should not exceed 67%. That should be treated as the upper benchmark. This would mean, that even if deduction under one or the other of the two components exceeds 33 1/3%, the two components under the head of "development" put together, should not exceed the upper benchmark.
30. As such, it was the vehement contention of the learned counsel for the appellants, that it was impermissible for the High Court to have made the deduction of 55% from the market value determined on the basis of the exemplar sale deed dated 30-12-1983 under the head of "development". In fact, based on the aforesaid inference, it was contended, that no deduction whatsoever was permissible under the head. Alternatively, it was contended, that the deduction of 33% 37 applied by the Reference Court, would have been appropriate in the facts and circumstances of the case.
33. In the absence of the actual expenditure incurred towards development, we shall now endeavour to determine whether the deduction of 55% allowed by the High Court towards development of the land, out of the market value determined on the basis of the exemplar sale deed, was just and proper. The determination in question, more often than not, has to be in the absence of inputs as were sought by the appellants from the Commissioner, Gulbarga Development Authority. Obviously, deductions can only be based on reasonable and logical norms. Comparison of the state of development of the exemplar land, as also that of the acquired land can be the only legitimate basis for a reasonable and logical determination on the issue. Based on the aforesaid foundation, an assessment has 38 to be made by applying the parameters delineated above.
11. In the light of the aforesaid authoritative pronouncement of Apex Court regarding how the market value is to be determined is respect of the land which has NA potential, the minimum development charge to be deducted is 40%. Therefore, we would like to deduct another 20% out of Rs.22.40. If that deduction is given, the market value would come to Rs.17.60ps, which can be rounded off to Rs.18/-. The objections to the said valuation is in respect of developed area of Vakkalagera village, this Court has awarded Rs.13/- per Sq.ft. However it is equally true this Court has awarded Rs.28/- per Sq.ft. in respect of the land in adjoining villages. It is well settled law that there cannot be any straight jacket formula in determination of the market value. The market value has to be assessed keeping in mind the principles enunciated by the aforesaid decision of the Apex Court, and the ground realities and facts of that particular case. It necessarily involves an element of guess 39 work. It is in this background we would like to state apart from guess work we have also taken note of special circumstances in this case. Firstly as stated above a large extent of land was acquired for Airport and this 37 acres of land was also encroached without acquisition. Airport did not come up. Because of that probably permission was not freely given for development around that area because there will be restrictions. In the process, no development has taken place in this part of the city. If only Airport had come up and in 1995 when they acquired the lands of the claimants it would have fetch a very good market value. Neither the Airport came nor the petitioners had the liberty to use the lands as they want and without acquisition they have encroached preventing the claimants to enter the property. This aspect has to be borne in mind. Secondly, as it is clear from the evidence on record that without acquisition the property belonging to these claimants which is the subject matter of acquisition was fenced on 02.02.1983 and nearly for 12 long years they have deprived 40 of the benefit of enjoyment of these lands. Under the Land Acquisition Act there is no provision for payment of compensation or payment of interest for the period anterior to 4(1) notification. But the fact remains in anticipation of acquisition the possession of the petitioners' land was taken and they were deprived of the using of the land. They are entitled to damage for such wrong caused to them. Already acquisition has taken 28 years have lapsed and that aspect also has to be borne in mind which is fixing the market value. As anterior to 4(1) notification possession is taken 12 years back, they have to be compensated. But there is no statutory provision providing for such compensation under the Act. Taking into consideration these two peculiar facts of this case and taking note of Ex.P-60, Ex.P-58 and also the market value fixed by this Court for the lands acquired in Vakkalagera village and more importantly that the lands is used for setting up of Circuit Bench of High Court of Karnataka, we are of the view that justice of the case would be met by awarding Rs.18/- per Sq.ft. for the acquired lands 41 which includes the damages suffered by the claimants for deprivation of the lands prior to 4(1) notification, in our view it will meet the ends of justice. For the aforesaid reasons, we pass the following:
ORDER (1) The appeals filed by the Government are partly allowed.
(2) The market value of the acquired lands as fixed by the Reference court at Rs.28/- per sq.ft. is reduced to Rs.18/- per sq.ft.
(3) The claimants would be entitled to all consequential benefits as provided u/s 23(1)(A), 23(2) and 28 and 34 under the Act.
(4) The appeals preferred by the claimants are dismissed.42
(5) The amount shall be deposited by the State within three months from today.
Parties to bear their own costs.
Sd/-
JUDGE Sd/-
JUDGE *MK