Karnataka High Court
Karnataka Neeravari Nigam Limited vs The Special Land Acquisition Officer on 29 June, 2020
Bench: S.Sujatha, Shivashankar Amarannavar
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 29 T H DAY OF JUNE, 2020
PRESENT
THE HON'BLE MRS. JUSTICE S.SUJATHA
AND
THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR
MFA No.103227/2015 (LAC)
BETWEEN:
KARNATAKA NEERAVARI NIGAM LTD .,
REPTD. BY ITS EXECUTIVE ENGINEER,
HBC DIV. ATHANI, DIST. BELAGAVI.
... APPELLANT
(BY SRI. RAMESH N. M ISALE, ADVOCATE)
AND
1. THE SPECIAL LAND ACQUISITION OFFICER,
HIPPARAGI PROJECT, A THANI.
2. SRI. BASAVARAJ MALLIKARJUN HALADAMAL,
AGE MAJOR, OCC: AGRICULTU RE,
R/O. A THANI, TQ. ATHANI, DIST. BELAGAVI.
3. KUMAR CHIDANAND MALLIKARJUN H ALADAMAL,
AGE MINOR, R/O. ATHANI, TQ . A THA NI,
DIST. BELAGAVI.
4. KUMAR CHAITANYA MALLIKARJUN H ALADDAMAL,
AGE MAJOR, R/O. ATHANI, TQ . A THA NI,
DIST. BELAGAVI.
CLAIMANT NOS.2 AND 3/RESPONDENT NOS.3 & 4
ARE MINORS REPRESENTED BY TH EIR FA THER
SRI. BASAVARAJ MALLIKARJUN HALADAMAL.
... RESPONDENTS
(SRI. V.S .KALASURMATH, HCGP FOR R1;
SMT. ARCHANA A. MAGADUM, ADV. FOR R2;
2
R3 & R4 ARE M INORS REPTD . BY R2)
THIS APPEAL IS FILED UNDER SECTION 54(1) OF LAND
ACQUISITION ACT, AGAINST THE JUDGMENT & A WARD
DATED 18.04.2015, PASSED IN LA C NO.840/2011 ON THE
FILE OF THE ADDITIONAL S ENIOR CIVIL JUDGE AND
JUDICIAL MAGISTRATE FIRST CLAS S, ATHANI, AWARDING
THE COMPENSA TION OF RS .5,00,000/- PER ACRE.
THIS APPEAL COMING ON FOR FURTHER
CONTINUATION OF ARGUMENTS AND THE SAME HAVING
BEEN HEARD AND RESERVED FO R PRONOUNCEMENT OF
JUDGMENT, TH IS DAY, S.SUJATHA J., DELIVERED THE
FOLLOWING:
JUDGMENT
The beneficiary is before this Court challenging the correctness and validity of the order dated 18.04.2015 passed in LAC No.840/2011 by the Addl. Senior Civil Judge and JMFC., Athani, (for short 'the reference Court) whereby the market value of the acquired land has been fixed at the rate of Rs.5,00,000/- per acre with all statutory benefits.
2. The lands bearing Sy.Nos.825 and 825/2 in Athani, Athani taluk, Belgaum district, measuring 1 acre 31 guntas and 5 guntas were acquired vide Notification dated 09.08.2007 issued under Section 4 (1) of the Land Acquisition Act, 1894, (for short 'the Act'). The Special Land Acquisition Officer passed the general award, awarding compensation of 3 Rs.1,28,868/- per acre for the lands acquired. Being dissatisfied, the land losers sought for reference under Section 18 (1) of the Act. The Reference Court determined the market value of the subject land at Rs.5,00,000/- per acre with all statutory benefits. Being aggrieved, the beneficiary is seeking for the reduction of the market value of the land acquired.
3. Learned counsel appearing for the beneficiary submitted that the award passed by the Reference Court is contrary to the well settled principles of law and the evidence on record. The Reference Court failed to consider the compensation awarded by this Court relating to the similarly situated lands of the same village acquired for the same project. The reliance placed by the Reference Court on the judgment and award passed in L.A.C.No.807/2011 connected with L.A.C.No.398/2014 dated 17.03.2015 is not proper since the same has not attained finality being challenged by the beneficiary/KNNL on many grounds. The claimants had claimed that in the agricultural lands acquired, sugar cane was grown. Even if it is to be assumed that the subject land 4 has NA potentiality in future, it ought to have deducted 75% of the market value fetched for non-agricultural residential plots. The certificate issued by the Assistant Director of Agriculture is inadmissible in law for not examining the said Officer, and has no evidentiary value. The fixation of market value should have been based on the evidence on record and not the inapplicable judgments and awards of different villages.
4. Learned counsel has placed reliance on the following judgments:
i) M.F.A.No.23838/2012 disposed of on 17.09.2019,
ii) M.F.A.No.101376/2015 connected with M.F.A.No.101377/2015 disposed of on 01.08.2018,
iii) M.F.A.Crob.100178/2016 in M.F.A.No. 23853/2013 disposed of on 21.02.2018,
iv) M.F.A.No.25705/2012 disposed of on 11.10.2019.
v) KARNATAKA URBAN WATER SUPPLY AND DRAINAGE BOARD VS. K.S.GANGADHARAPPA AND ANOTHER (2009 (11) SCC 164), 5
vi) PANNA LAL GHOSH AND OTHERS VS. LAND ACQUISITION COLLECTOR AND OTHERS (AIR 2004 SC 1179),
vii) THE SPECIAL LAND ACQUISITION OFFICER AND ANOTHER VS. SRI SIDDAPPA OMANNA TUMARI AND OTHERS (AIR 1995 SC 840),
5. Learned counsel appearing for the claimants submitted that the acquired lands are situated adjoining the Athani town wherein Mini Vidhana Soudha, Petrol Bunk, Commercial buildings, biscuit factories, etc., are located. The nature of the adjoining converted NA lands would indicate the NA potentiality of the subject land. The Sub-Registrar's guidance value ought to have been taken as the guiding factor for determination of the market value of the acquired land.
Neither any cross-examination was made by the beneficiary nor NA potentiality of the land acquired was objected by the beneficiary. It was submitted that 33% of deduction towards development charges for the agricultural land having non- agricultural potentiality would be reasonable. The evidence placed on record by the claimants was not properly appreciated by the Reference Court in determining the just 6 and reasonable compensation for the land acquired. However, learned counsel fairly submitted that in the reference application, no specific assertion was made inasmuch as the NA potentiality of the acquired land. Hence, she submitted that the matter requires to be remanded to provide an opportunity to the claimants to putforth their claim of NA potentiality in the acquired land, the same being situated in the Athani municipal limits.
6. Learned counsel has placed reliance on the following decisions along with other host of cases:
i) CHIMANLAL HARGOVINDDAS VS. SPECIAL LAND ACQUISITION OFFICER, POONA (AIR 1988 SC 1652),
ii) LAL CHAND VS. UNION OF INDIA (AIR 2010 SC
170),
iii) ASHRAFI VS. STATE OF HARYANA (AIR 2013 SC 3654),
iv) M.F.A.No.31097/2010 connected with M.F.A.No.31152/2010 disposed of on 04.12.2019,
v) M.F.A.No.25105/2011 disposed of on 08.02.2012, 7
vi) M.F.A.No.20268/2012 disposed of on 29.11.2012.
7. We have carefully considered the submissions of the learned counsel appearing for the parties and perused the material on record.
8. It is not in dispute that the claimants have not pleaded the NA potentiality aspect of the acquired land before the reference Court. However, the Reference Court has considered the NA potentiality of the acquired land placing reliance on Exs.P.53 and 54, the common judgment passed in L.A.C.No.53/2012 as well as L.A.C.No.807/2011 connected with L.A.C.No.398/2014. It is not in dispute that the beneficiary has challenged the judgment and award passed in huge number of cases relating to the acquisition of land for the purpose of construction of the canal under the Hipparagi barrage project in Athani taluk. Three division benches of this Court have adopted the valuation as worked out by this Court in M.F.A.No.23768/2013 wherein the market value was fixed at Rs.3,69,000/- in respect of irrigated land acquired under the Notification of the year 2004-2005 which has been upheld by the Hon'ble Apex Court by dismissing the Special 8 Leave Petition preferred by the beneficiary in S.L.P.No.8107/2016. Thereafter, the Court has awarded escalation at the rate of 5% in respect of the lands acquired under the Notification of subsequent years. In respect of the lands acquired under the Notification of the year 2007, this Court has granted compensation determining the market value of the acquired lands at Rs.4,05,900/- per acre by calculating escalation at the rate of 5% p.a. in respect of the market value of Rs.3,69,000/-. In the present case also, the subject land was acquired under the Notification dated 09.08.2007 which was considered by the cognate bench of this Court in M.F.A.No.101376/2015 and connected matters. In M.F.A.Crob.100178/2016, the division bench of this Court (Hon'ble SSJ was a member), considering the lands acquired under the Notification dated 12.04.2007 has referred to M.F.A.No.23768/2013 and determined the market value of the acquired lands therein, at Rs.4,05,900/- along with statutory benefits, interest and costs.
9. In M.F.A.No.23838/2012, the co-ordinate bench has held that it would be safer to follow the same sale 9 statistics method which was followed consistently in about 720 cases out of nearly 810 cases of acquisition for determining the compensation accepted by huge number of land losers, which has reached finality without there being any appeal against the order of the Reference Court. In the said context, it is observed that the same analogy should be applied in adjudicating upon the appeal filed by the beneficiary. Accordingly, the amount of Rs.1,32,000/- per acre fixed in huge number of cases with respect to the lands acquired for the same project was fixed.
10. In KARNATAKA URBAN WATER SUPPLY AND DRAINAGE BOARD AND OTHERS, supra, the Hon'ble Apex Court has observed thus:
"8. Where a large area is the subject-matter of acquisition, rate at which small plots are sold cannot be said to be a safe criterion. Reference in this context may be made to three decisions of this Court in Collector of Lakhimpur v. Bhuban Chandra Dutta, Prithvi Raj Taneja. v. The State of Madhya Pradesh and Kausalya Devi Bogra v. Land Acquisition Office,.
9. It cannot, however, be laid down as an absolute proposition that the rates fixed for the small plots cannot be the basis for fixation of the rate. For example, where there is 10 no other material it may in appropriate cases be open to the adjudicating Court to make comparison of the prices paid for small plots of land. However, in such cases necessary deductions/adjustments have to be made while determining the prices
10. In Suresh Kumar v. Town Improvement Trust, in a case under the Madhya Pradesh Town Improvement Trust Act, 1960 this Court held that the rates paid for small parcels of land do not provide a useful guide for determining the market value of the land acquired. While determining the market value of the land acquired, it has to be correctly determined and paid so that there is neither unjust enrichment on the part of the acquirer nor undue deprivation on the part of the owner. It is an accepted principle as laid down in Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam that the compensation must be determined by reference to the price which a willing vendor might reasonably expect to receive from the willing purchaser. While considering the market value disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy it must alike be disregarded; neither must be considered as acting under any compulsion. The value of the land is not to be estimated as its value to the purchaser. But similarly this does not mean that the fact that some particular purchaser might desire the land more than others is to be disregarded. The wish of a particular purchaser, though not his compulsion may always be taken into consideration for what it is worth. Section 23 of the Act enumerates the matters to be considered in determining compensation. The first criterion to be taken into 11 consideration is the market value of the land on the date of the publication of the notification under Section 4(1). Similarly, Section 24 of the Act enumerates the matters which the Court shall not take into consideration in determining the compensation. A safeguard is provided in Section 25 of the Act that the amount of compensation to be awarded by the Court shall not be less than the amount awarded by the Collector under Section 11. Value of the potentiality is to be determined on such materials as are available and without indulgence in any fits of imagination. Impracticability of determining the potential value is writ large in almost all cases. There is bound to be some amount of guesswork involved while determining the potentiality.
11. It can be broadly stated that the element of speculation is reduced to minimum if the underlying principles of fixation of market value with reference to comparable sales are made:
(i) when sale is within a reasonable time of the date of notification under Section 4(1);
(ii) it should be a bona fide transaction;
(iii) it should be of the land acquired or of the land adjacent to the land acquired; and
(iv) it should possess similar advantages.
12. It is only when these factors are present, it can merit a consideration as a comparable case (See The Special Land Acquisition Officer, v. T. Adinarayan Setty.
13. These aspects have been highlighted in Ravinder Narain. V. Union of India.
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14. The deduction to be made towards development charges cannot be proved in any straitjacket formula. It would depend upon the facts of each case."
11. In PANNA LAL GHOSH AND OTHERS, supra, the Hon'ble Apex Court has observed thus:
"5. Compensation payable on a piece of land acquired under the Act is determined by taking into account the market value of the land so acquired. The most reliable way to determine the market value is to rely on the instances of sale of portions of the same land as has been acquired or adjacent lands made shortly before or the after the Section 4 notification .
6. Accordingly, the appellants had produced before the High Court a certified copy of an award passed by the learned L.A. Judge in another acquisition proceedings. In this case, the land was 150 ft. away from the lands involved in the present proceedings. In those proceedings, the learned L.A. Judge had awarded Rs.1 lakh per acre as compensation. This was sought to be relied on by the appellants. The High Court chose not to rely on this document as no evidence was led to show that both lands are similar in nature having similar potentiality."
12. In RANVIR SINGH AND ANOTHER VS. UNION OF INDIA (2005 (12) SCC 59), it has been held that the market value of fully developed land cannot be compared to wholly 13 underdeveloped land though both the lands may be situated adjacent to each other.
13. It is well settled law that the market value of the land under acquisition has to be determined as on the date of the Notification under Section 4 of the Act. In determining the market value, the Court has to compare the market value reflected in most comparable instances and the judgments rendered by the Courts would be a safe guide for such determination. It is also significant to note that in huge number of cases before the Lok Adalath also, the very same principle adopted in M.F.A.No.23768/2013 has been followed.
14. In CHIMANLAL's case supra, the Hon'ble Apex Court has held that the following factors have to be borne in mind while determining market value of the land:
"(1) Determined as on the crucial date of publication of the notification under S.4 of the Land Acquisition Act (dates of Notifications under Ss.6 and 9 are irrelevant).
(2) The determination has to be made standing on the date line of valuation (date of publication of notification under S.4) as if the valuer is a hypothetical purchaser willing to purchase land from the open market and is prepared to pay 14 a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price.
(3) In doing so by the instances method, the Court has to correlate the market value reflected in the most comparable instance which provides the index of market value.
(4) Only genuine instances have to be taken into account. (Some times instances are rigged up in anticipation of Acquisition of land).
(5) Even post notification instances can be taken into account (1) if they are very proximate, (2) genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects.
(6) The most comparable instances out of the genuine instances have to be identified on the following considerations:
(i) proximity from time angle,
(ii) proximity from situation angle.
(7) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-a-vis land under acquisition by placing the two in juxtaposition.
(8) A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be 15 evaluated in terms of price variation as a prudent purchaser would do.
(9) The market value of the land under acquisition has there after to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors.
The exercise indicated in clauses (1) to (10) has to be undertaken in a common sense manner as a prudent man of the world of business would do. We may illustrate some such illustrative (not exhaustive) factors:-
Plus factors
1. smallness of size.
2. proximity to a road.
3. frontage on a road.
4. nearness to developed area.
5. regular shape.
6. level vis-a-vis land under acquistion.
7. special value for an owner of an adjoining property to whom it may have some very special advantage."
15. In LAL CHAND's case supra, the Hon'ble Apex Court has observed that the sale transactions or awards relating to neighbouring village will not be relied upon on when acceptable evidence by way of contemporaneous sale transactions or awards are available in regard to the very village where the acquisition took place. (Where there are no contemporaneous sale deeds or awards relating to the same 16 village, then the sale transactions or awards of the same period relating to the neighbouring village can be considered provided there is evidence to show that the acquired lands and the lands covered by the exemplar deeds of the neighbouring village are similarly situated). The evidence to reject the exemplar sale deed as not relevant, may be either extrinsic or intrinsic.
16. In the circumstances, the determination of the market value made by this Court inasmuch as similar lands, placing reliance on all these aspects, cannot be lost sight of. In the absence of adequate plea and material placed on record by the claimant, the determination of compensation based on the sale statistics (Exs.P.45 to 47) would not be appropriate. Even if the sale statistics method is adopted, the deductions would be 40% to 50% which would be more or less the compensation determined in M.F.A.Crob.100178/2016 and other related matters at Rs.4,05,900/- per acre with all statutory benefits.
17
17. At the time of conclusion of the arguments though the learned counsel for the claimant sought for remand to file an application for amendment of the reference application contending that such an amendment can be sought at any stage of the proceedings, we are not inclined to accept the same, more particularly, the compensation being determined for huge number of identical lands situated in the vicinity of Athani, acquired for the very same project and under the very same Notification as discussed above. The judgments relied upon by the learned counsel for the claimant would be of little assistance in the facts and circumstances of the case.
18. For the reasons aforesaid, we deem it appropriate to fix the market value of the subject land at Rs.4,05,900/- per acre with all statutory benefits including interest and costs.
19. Hence, the following:
ORDER
i) Appeal filed by the beneficiary is allowed in part, 18
ii) The compensation determined by the reference Court is modified fixing the market value of the subject land at Rs.4,05,900/- per acre with all statutory benefits including interest and costs,
iii) Registry shall draw the modified award accordingly.
(Sd/-) JUDGE (Sd/-) JUDGE Jm/-