Madras High Court
The Land Acquisition Officer/Sub ... vs Kuppuswami Naidu And Five Ors. on 19 February, 1997
Equivalent citations: 1997(1)CTC539, (1997)IMLJ512, 1997 A I H C 3447, (1997) 2 ICC 810, (1997) 1 MAD LJ 512, (1997) 1 MAD LW 623, (1997) 1 LACC 586, (1997) 1 CTC 539 (MAD)
Author: Ar. Lakshmanan
Bench: Ar. Lakshmanan
ORDER AR. Lakshmanan, J.
1. The Land Acquisition Officer/Sub- Collector, Tindivanam, is the appellant herein. The above appeal is preferred against the judgment and decree in L.A.O.P. No. 9 of 1983 dated 11.8.1986 on the file of the Subordinate Judge, Tindivanam.
2. At the instance of the 6th respondent, certain proposals were made for acquisition of lands of an extent of 2.44 acres in R.S. No. 236, etc., for the construction of Bus Depot to the 6th respondent/Corporation. The Notification under Section 4(1) of the Land Acquisition Act (hereinafter referred to as the Act) was published in the Tamil Nadu Government Gazette dated 11.06.1980 and the same was approved by the Government in GO. Ms. No. 623, Transport, dated 23.05.1980. The draft declaration under Section 6 of the Act and the draft direction under Section 7 of the Act have been published in the Tamil Nadu Government Gazette dated 15.07.1981 and duly approved by the Government in G.O.Ms. No. 726, Transport, dated 26.07.1981. The award enquiry under Section 11 of the Act was conducted by the Land Acquisition Officer at Tindivanam on 24.12.1981 and 11.01.1982. After due publication and service of the notices under Sections 9(1) and 10 of the Act and under Sections 9(3) and 10 of the Act, after giving sufficient time.
3. A total of 286 sales took place during the period in question. The lands which are covered by the sales and situated in a far off place to the proposed lands under acquisition, the items of sales covered by structures, etc., the items of sales including land and building, the sales covered by wet and dry lands, the lands covered by sales differ in sort, soil and taram to the land under acquisition, the sales relating to the land situate in thickly populated and already developed residential area, the lands adjoining the road frontage, sales in respect of Serial No. 203, which is classified as street poramboke, the sales of lands which are not in the vicinity of the lands acquired and the lands classified as Railway Poramboke, have not been taken for consideration for fixing the compensation. Thus, 284 sales of lands have not been taken for consideration out of 286 items. Out of the remaining two items, the sale in Serial No. 186 relates to the sale of 0.011/4 cents out of 16 cents in R.S. No. 239/5, which is a vacant house site and the same was sold for Rs. 750. But, the Sub-Registrar valued the sale at Rs. 990 as the market value. Since the sale amount and the market value differs in this sale, this item has not been taken into consideration by the appellant/Land Acquisition Officer. The only remaining item left is Serial No. 185, in which an extent of 9 cents were sold for Rs. 7,900 in R.S. Nos. 239/13 and 239/14. This works out to Rs. 87,778 per acre.
4. According to the appellant, the data field is similar in all respects to that of the acquired lands. This sale is reasonable and reflects the present market value of the acquired lands. As such, the value for the acquired lands is fixed at Rs. 87,778 per acre, which, according to the appellant, is reasonable.
5. The land in R.S. No. 236 measuring 2.29 acres stands registered in the names of Kuppuswami Naidu and Ethirajulu Naidu in the village accounts in Holding No. 737. The land owner who turned up for the enquiry claims higher compensation at the rate of Rs. 4,000 per cent. The appellant fixed the value of the acquired land at the rate of Rs. 87,778 per acre and arrived at the total amount at Rs. 2,01,011.60. The cost of the well, compound wall and other structures has been fixed at Rs. 56,129, and the value of the trees at Rs. 22.50. He also added 15% solatium, which comes to Rs. 38,574-45. In all, the total amount of compensation comes to Rs. 2,95,737.55. The amount payable to V. Kuppuswami Naidu after deducting the loan amount (principal and interest) payable to Susilabai Ammal was fixed at Rs. 2,56,862.55 (Rs. 2,95,737.55 minus Rs. 38,875 = Rs. 2,56, 862.55) As the land owner has demanded enhanced compensation, a reference under Section 18 of the Act was made to the Subordinate Judge, Tindivanam, by the appellant.
6. The lands in R.S. No. 232/5 Natham measuring 2 cents, in R.S. No. 232/2B Natham measuring 10 cents and in R.S. No. 232/7 Natham measuring 3 cents in Gidangal village, stand registered in the name of K. Muthu Chettiar in the village accounts. He turned up for the enquiry and claimed higher compensation at the rate of Rs. 4,000 per cent. He has consented to receive the compensation amount for the land in R.S. No. 232/2B Natham measuring 10 cents under protest. In respect of the lands in R.S.Nos.232/5 and 232/7, he refused to receive the compensation amount and wanted to refer the matter to the Sub Court, Tindivanam. According to him, there are buildings in those two survey numbers and therefore, he claimed compensation for the land and building. The cost of compensation worked out by the Land Acquisition Officer/Appellant as payable to K. Muthu Chettiar is as detailed below.
Land value for 10 cents of land in R.S. No. 232/2B Natham at Rs. 87,778 per acre Rs. 8,777-80 Add 15% solatium Rs. 1,316-70 TOTAL Rs. 10,094.50 Land value for 2 cents in R.S. No. 232/5 at the rate of Rs. 87,778 Rs. 1,755-55 Add 15% solatium Rs. 263-30 TOTAL Rs. 2,018-85 Land value for 3 cents in R.S. No. 232/7 at the rate of Rs. 87,778 per acre Rs. 2,633-35 Add 15% solatium Rs. 395-00 TOTAL Rs.3,028-35
7. At the request of the claimants, the matter was referred to the Sub Court, Tindivanam. The 1st claimant/1st respondent herein filed a claim statement stating that the land in question is situated in the midst of the township surrounded by constructed houses and house sites, that the area is termed as an industrial area and licence was granted by the Tindivanam Municipality for running saw mill by the 1st respondent and in fact, he was running the saw mil. Because of the acquisition, the 1st respondent had to discontinue his business and dismantle the constructed shed and remove the materials. Despite the loss in dismantling the industry, the 1st respondent had sustained a loss of Rs. 1,00,000 in discontinuing the industry. These aspects were not considered by the appellant. Therefore, the 1st respondent claimed a sum of Rs. 2,00,000 by way of compensation apart from the value of the acquired property.
8. According to the 1st respondent, while fixing the market value and guidelines, the appellant had not taken into consideration the correct market value and that the reasoning given for rejecting the various sale deeds is not correct. The sale in respect of Serial No. 120 had not been taken into consideration on the ground that it was sold for house site. In the instant case, the acquisition was for the purpose of construction of a Bus Depot. Hence, it is contended by the 1st respondent that the reasoning given by the appellant is not correct. The sale in respect of Serial No. 218 was also rejected on the ground that it was for a particular purpose. In the sale in respect of Serial No. 186, the Sub Registrar has admittedly fixed the marked value at Rs. 990, which was also wrongly rejected by the appellant. The land in question ought to have been acquired as house sites and the valuation thereof should have been fixed as house sites. It is contended by the 1st respondent that out of 286 transactions, more than 200 in the vicinity were with land and buildings, which would go to show that the acquired lands are house sites. Therefore, the 1st respondent prayed for fixing the compensation amount at Rs. 4,000 per cent.
9. The appellant filed a counter statement opposing the claim for enhanced compensation. According to him, he has given clear reasons for rejecting the several items of sale transactions that are found in the sale statistics. He would submit that Serial Nos.185 and 186 are the best sales for consideration. The sale in Serial No. 186 relates the sale of 1 cent in R.S. No. 239/5 for Rs. 750. But the Sub Registrar has valued it at Rs. 990 as per the guideline value, as the market value. Since the market value of the sale price differed, it cannot be taken into consideration. The only remaining sale is Serial No. 185 whereunder an extent of 9 cents in R.S. No. 239/13 was sold for Rs. 7,900 (i.e., 8 cents in R.S. No. 239/13 and 1 cent in R.S. NO. 239/14), which works out to Rs. 87,778 per acre. Since the data lands are similar in all respects to that of the acquired lands, this sale has been considered to be fair and reasonable rate of market price, for fixing the price of the acquired lands.
10. Before the Sub Court, on behalf of the claimants, the 1st ciaimant/1st respondent was examined as P.W. 1 and one Pattabi, purchaser of the land under Ex.A-4 dated 12.6.1980 was examined as P.W.2. On behalf of the referring officer/appellant, one Nagarajan working as Assistant in the Sub Collector's Office, Tindivanam, was examined as R.W.1. Exs.A-1 to A-4 were marked on the side of the claimants while Exs.B-1 to B-7 were marked on the side of the Referring Officer/appellant.
11. The learned Subordinate Judge on a consideration of the entire materials placed before him, both oral and documentary, fixed the compensation amount at Rs. 2.50 lakhs per acre together with 30% solatium and interest at 9% from the date of taking possession of the land.
12. Aggrieved by the award of the learned Subordinate Judge enhancing the compensation amount, the State has filed the appeal contending that the learned Subordinate Judge has erred in accepting the interested oral testimony of the claimants and also accepting the description of the location of the acquired lands. It is also contended that the learned Subordinate Judge has committed an error in considering the acquired lands as house sites. Dissatisfied with the amount of compensation awarded by the learned Subordinate Judge, claimants Kuppuswami Naidu, Manavalan, Kalyani and Santhi have filed the memorandum of cross- objections contending that the Court below ought to have awarded compensation at the rate of Rs. 4,000 per cent for the acquired lands.
13. Both the first appeal and the memorandum of cross- objections were heard together. We have heard the arguments of Mr.K.Ravi, learned Additional Government Pleader for the appellant and Mr. V. Raghavachari and Ms. P.V. Rajeswari for the claimants and perused the documents, both oral and documentary and also the order impugned.
14. The only point that arises for consideration is:
Whether the amount of compensation fixed by the trial court is to be reduced as prayed for by the State or to be further enhanced as prayed for by the cross-objectors.
15. Point: - Ex.A-1 is the approved plan sanctioned by the Tindivanam Municipality for the land in R.S. No. 236 dated 6.4.1961. Ex.A-2 is the Tindivanam Municipal Town Map. Ex.A-3 dated 11.1.1979 is the proceedings of the Collector of South Arcot in K.Dis. No. 216124 of 1978 rejecting the application of the 1st respondent for the grant of a No Objection Certificate for locating a semi-permanent cinema in R.S. No. 236 of Tindivanam Town and Taluk. Ex.A-4 is the sale deed dated 12.6.1980 in favour of Pattabi Reddiar (P.W.2) by one Abdul Wahab Sahib. The sale consideration is Rs. 27,000.
16. Ex.B-1 dated 24.12.1981 is the statement of the 1st respondent before the appellant. Ex.B-2 dated 11.1.1982 is the further statement of the 1st respondent before the appellant. Ex.B-3 dated 30.8.1980 is the further statement of the 1st respondent to the appellant. Ex.B-4 dated 30.8.1980 is the statement of Muthu Chettiar to the appellant. Ex.B-5 is the Gidangal Village Map. Ex.B-6 dated 1.2.1982 is the letter from the 6th respondent/Corporation to the appellant wherein it is stated that the 1st respondent is running a saw mill in the land in question and the machineries and wooden blocks are yet to be taken away from the site by him and unless this is done immediately, the land in question cannot be put to their use effectively. Ex.B-7 is the notification under Section 4(1) of the Act made in the gazette.
17. The notification under Section 4(1) of the Act was made on 23.5.1980 and it was published in the gazette on 11.6.1980. On behalf of the claimants, a sale deed under Ex.A-4 dated 12.6.1980 executed by one Abdul Wahab Sahib in favour of Pattabi (P.W.2) for Rs. 27,000 was filed for claiming enhanced compensation. It is seen from Ex.A-4 that one cent of land would cost Rs. 4,000. The vendee was examined as P.W.2. It is his evidence that when he purchased that property, there was a small house in the site, that he purchased an extent of 3,600 Sq.Ft. (30'x 120') and constructed a house in an extent of 10' x 15'. He purchased the same for Rs. 39,000. According to him, the acquired land is situated 150' west of his land purchased under Ex.A-4. At the time when he purchased the property, the market value per cent would range from Rs. 4,000 to Rs. 6,000. Since the property purchased by him was not even and a portion of it was low lying, it was sold to him at the rate of Rs. 4,000 per cent. He denied the suggestion that on coming to know of the land acquisition proceedings, he purchased the property covered by Ex.A-4 at the instigation of the 1st respondent for an inflated price. He also denied the suggestion that he is deposing before Court in order to help the 1st respondent.
18. P.W. 1, the 1st claimant/1st respondent at the time of his examination proved and marked Exs.A-1 to A-3. He deposed that he was running a 25 H.P. saw mill and that the lands surrounded by the acquired lands are all house sites. According to him, many people are running industries, that people select only this area for their business purposes, that the site in question is 100' away from Madras Trichy Highways, that the road leading to Pondicherry is situated on the south of the property in question, which is situated about 150' away and that on the south of that road, there are house sites. According to him, there are about 500 houses in that area and close to the site in question and that the office of the P.W.D. Veeranam Project House and the Thiruvalluvar Transport Corporation Bus Depot are situated about 500' away from the suit site. The police station is situated 150' away from the site and the railway station is also about 150' away from the suit site. In all, according to P.W.I, there are about 200 house sites in the area in question. In cross-examination, nothing concrete had been elicited from P.W.1 to discredit his testimony. In the cross-examination, P.W.1 has stated that he has been running the saw mill from 1965 onwards and that he has obtained municipal licence for the same. He has also raised a compound wall on all four sides after obtaining permission from the municipality.
19. R.W.1 is an Assistant working in the Sub Collector's Office, Tindivanam. It is elicited from him that the notification under Section 4(1) of the Act was published in the gazette on 11.6.1980 and that the same was served on the 1st respondent only on 14.8.1980. It is also elicited from him that on 26.7.1979 one acre of land in Survey No. 69/2 at Jayapuram was sold for Rs. 1,25,000. Likewise, Survey No. 412 was sold on 4.6.1979 at the rate of Rs. 1,50,000 per acre. The above two sales are shown as Item Nos.69 and 220 in Ex.B-5 sketch. Item No. 207 in Ex.B-5 sketch is the sale which took place on 18.5.1979 whereunder the land was sold at the rate of Rs. 1,70,000 per acre. Item No. 200 in Ex.B-5 sketch was sold on 27.8.1979 at the rate of Rs. 1,90,000 per acre. Survey No. 409 was sold on 19.11.1979 at the rate of Rs. 2,50,000 per acre whereas Survey No. 403/19 was sold on 23.10.1979 at the rate of Rs. 3,80,000 per acre. On 10.5.1979 according to R.W.1, one acre in Survey No. 401/12 was sold at the rate of Rs. 4,10,000. R.W.1 would aver that the Thiruvalluvar Transport Corporation Bus Depot, police station and railway station are all situate in the heart of the town.
20. A combined consideration of both the oral and documentary evidence would only reveal that the market value fixed by the appellant is ridiculously low and that the market value fixed by the Sub Court does not reflect the real market value. The evidence discloses that the lands acquired are house sites and that the 1st respondent was running a saw mill in that place from 1965 onwards. Ex.A-1 would clearly establish that the 1st respondent had applied for and obtained plan from the Tindivanam Municipality on 6.4.1961 for construction of a saw mill in the suit land. Ex.A-3 would also clearly establish the case of the 1st respondent. Ex.A-3 is the rejection order of the Collector of South Arcot refusing to issue No Objection Certificate to the 1st respondent for construction of a theatre in Survey No. 236. From Ex.A-4 it is seen that the land covered by the sale deed was sold at the rate of Rs. 4,000 per cent.
21. Admittedly, the notification under Section 4(1) of the Act was served on the 1st respondent on 14.8.1980 only. Therefore, no knowledge can be attributed to Ex.A-4 sale, which was executed the very next day of the publication of the notification under Section 4(1) of the Act in the gazette. It is also seen from the evidence of R.W.1 that the lands situated in the area in question are all house sites and one acre of land in that area has been sold on different dates as follows:
On 10.5.1979 ..... Rs. 4,10,000-00 On 18.5.1979 ..... Rs. 1,70,000-00 On 4.6.1979 ..... Rs. 1,50,000-00 On 26.7.1979 ..... Rs. 1,25,000-00 On 27.8.1979 ..... Rs. 1,90,000-00 On 23.10.1979 .....Rs. 3,80,000-00 On 19.11.1979 .....Rs. 2,50,000-00
22. The above statement of R.W.1 in his evidence would disclose that the lands in the surrounding area are sold during 1979 ranging from Rs. 1,25,000 to 4,10,000 per acre. Some of those sales were also marked in Ex.B-5 sketch filed by the appellant. Therefore, in our considered view, the market value of the land in question can safely be fixed at Rs. 3,00,000 per acre. In our opinion, this value would be just, fair and reasonable taking into consideration of the totality of the circumstances. There is no reason for us to disbelieve Ex.A-4. In our opinion, it is a bona fide transaction. Courts have held that the compensation payable to the owner of the land is the marked value which is determined by reference to the price which a seller might reasonably expect to obtain from a willing purchaser. This may not possible to ascertain with any amount of precision. The authority charged with the duty to award compensation is bound to made an estimate judged by an objective standard. The land acquired has, therefore, to be valued not only with reference to its condition at the time of the declaration under Section 4 of the Act but its potential value also must be taken into account. The sale deeds of the lands situated in the vicinity and the comparable benefits and advantages which they have, furnish a rough and ready method of computing the market value. Applying to the above test to the case on hand, it can be safely concluded that the condition of the land acquired at the time of the notification under Section 4(1) of the Act was only house site. If we take the potential value also into account besides the market value of the land sold in the vicinity, this court is justified in fixing the market value at Rs. 3,00,000 per acre.
23. The market value of the property at the time of acquisition for purpose of determining the compensation payable under Act is its then value in its actual condition with all its existing advantages including the realised possibilities plus in cases where there is possible enhancement of its value in future considering the peculiar location and use the property may potentially be put to, such additional value.
24. The learned Addl. Government. Pleader argued that the sale transaction subsequent to the preliminary notification in respect of the land cannot be relied upon. It is contended by him that in the instant case, the notification under Section 4(1) of the act was published in the gazette on 11.6.1980 and the sale under Ex.A-4 was on 12.6.1980 and therefore, the market value mentioned in Ex.A-4 cannot be taken into consideration for determining the market value of the land in question. In our view, the sale under Ex.A-4 was just one day later. Such subsequent transactions, in our opinion, can be taken into account for purposes of determining whether as on the date of the acquisition, there was an upward trend in the price of land in the area in question. Further, under certain circumstances where it is shown that the market value was stable and there were no fluctuations in the prices between the date of preliminary notification and the date of such subsequent transaction, the transaction could also be relied upon to ascertain the market value. The evidence of R.W.1 in cross-examination would clearly reveal the upward trend of the market value and the fluctuation in prices between 10.5.1979 and 12.6.1980. Therefore, Ex.A-4 can safely be relied on, as rightly urged by the learned counsel for the claimants.
25. We are also unable to accept the arguments of the learned Additional Government Pleader that the prices fetched for small plots cannot form safe basis for valuation of large tracts as the two are not comparable properties. In the instant case, an extent of 2.29 acres in R.S. No. 236, 2 cents in R.S. No. 232/5, ten cents in R.S. No. 232/2B and three cents in R.S. No. 232/7 were acquired. Most of the plots had been sold in that area only as small plots. Therefore, as observed by the Supreme Court in the decision reported in Administrator General of West Bengal v. Collector, Varanasi, if it is shown that the large extent to be valued does admit of and is ripe for use for building purposes, that building lots that could be laid out on the land would be good selling propositions and that valuation on the basis of the method of a hypothetical lay-out could with justification be adopted, then in valuing such small, laid-out sites the valuation indicated by sale of comparable small sites in the area at or about the time of the notification would be relevant.
26. The learned Additional Government Pleader then argued that 1/3rd of the market value of the land acquired is to be deducted towards development charges. We are unable to agree with this contention as well. The learned Additional Government Pleader forgets the fact that the lands in the instant case were acquired for the establishment of a bus stand. If it were a case where the lands are acquired for providing house sites, necessarily the roads, drainage facilities, sewage facilities and electricity facilities have to be provided for. In that regard, some additional expenditure is to be incurred and also some portions of land are to be set apart from the land acquired. In that context, Courts have held that at least 1/3rd of the market value of the land acquired is to be deducted towards development charges. But, when the land is required for the establishment of a bus stand, these requirements are not needed except to level the land. In the instant case, it is found, that the lands are even lands and therefore, no additional expenditure is needed for leveling the lands. Therefore, we do not find any merit in this contention.
27. We are also unable to countenance the arguments of the learned Additional Government Pleader that the principle of deduction in the land value covered by the comparable sale has to be made in this case if the compensation is to be enhanced any further. In applying the principle it is necessary to consider all the relevant facts. It is not the extent of area covered under the acquisition is the only factor. Even in the vast area there may be land which is fully developed having all amenities and situated in an advantageous position. If smaller area within the large tract is already developed and suitable for building purposes and have in its vicinity roads, drainage, etc., then the principle of deduction simply for the reason that it is part of the large tract acquired may not be justified. We, therefore, reject this contention also.
28. In the instant case, in order to adjudge whether Ex.A-4 is bona fide between the willing vendor and vendee and whether the consideration mentioned in the deed was in fact and really passed on under transaction, P.Ws.1 and 2 were examined. It is their evidence that the sale deed relied on possessed of same or similar potentialities or advantageous features. Therefore, as pointed out by the Supreme Court in the decision reported in Gulzara Singh v. State of Punjab, , every endeavour was made by the claimants to fix the fair and reasonable market value on the lands acquired.
29. In the result, for the fore-going reasons, we hold that the claimants would be entitled to compensation at the rate of Rs. 3,00,000 per acre. Accordingly, we fix the compensation amount at Rs. 3,00,000 per acre for the acquired lands and the claimants would be entitled to the same with solatium at 30% and interest at 9% per annum from the date of taking possession of the land from the claimants. The appeal is dismissed without costs and the memorandum of cross-objections is allowed in part, as indicated above, with proportionate costs.