Calcutta High Court (Appellete Side)
Ashim Chandra Daw & Ors vs The State Of West Bengal And Anr on 12 December, 2019
Author: Harish Tandon
Bench: Harish Tandon
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
Appellate Side
Present:
The Hon'ble Justice Harish Tandon
AND
The Hon'ble Justice Hiranmay Bhattacharyya
F.A. 247 OF 2013
Ashim Chandra Daw & Ors.
Vs.
The State of West Bengal and Anr.
Mr. Debayan Bera,Adv.
Mr. M.P. Gupta,Adv.
Mr. Arnab Dutt,Adv.
Mr. Ayan Mitra,Adv.
Mr. Sujay Biswas,Adv.
(For the Appellants)
Mr. Partha Pratim Roy,Adv.
(For the Respondents)
Judgment on: 12/12/2019 Harish Tandon, J.-
We would not have interfered with the impugned judgment passed by the Land Acquisition Court until the learned Advocate for 2 the appellant had taken us through the various exhibited documents of the case justifying the error in the impugned judgment and convinced us to set aside the said impugned judgment having based upon guess work, which is normally impermissible in an acquisition proceeding.
Before we proceed to address the points agitated before us by the appellants and defended by the State respondents, it would be axiomatic to adumbrate the salient facts which are more or less undisputed.
The property in acquisition is the land measuring .8863 acres i.e. 2 Bighas 13 kattas 9 chattaks and 40 sq.ft together with the buildings standing thereupon which was initially owned by the mother of the appellants namely Smt. Aruna Rani Daw (since deceased) who expired on 11th November, 2017. A notification under Section 4 of the Land Acquisition Act, 1894 was duly published in the Calcutta Gazette on 7th November, 1973 signifying their decision to acquire the said property to accommodate town outpost, C.I. Office and construction of staff quarters of Howrah Police Station. The possession was taken on 5th May, 1975 though the award passed by the Collector was declared on 29th March, 1975. The Land Acquisition Collector assessed the value of the land at Rs. 6,700/- per kattas and for a structure a consolidated sum of Rs. 1,03,338.85/-. The then owner accepted the awarded sum under protest and filed an application for reference to the Court under Section 18 of the said Act which upon reference was registered as Land Acquisition Miscellaneous Case No. 198 of 2008.
The broad point on which the reference was sought was that the Collector did not consider the location of the property and its advantages being in close proximity to the Howrah Judge's Court, Howrah General Hospital, Howrah Zilla Parishad, Office of CMOH, Howrah Zilla School and the Office of the Howrah Municipal 3 Corporation. The Collector has committed grave error in valuing the structures standing thereupon at Rs. 1,03,338.85/-. It is further stated that the Collector did not extend the benefit under Section 28 of the said Act and also failed to take into consideration that at the time of acquisition the said property was occupied by the Howrah Police Station as monthly premises tenant.
In course of the reference proceeding, the report of the valuer was also submitted to corroborate the stand that the value of the land with the structure as assessed by the Collector is not commensurate with the market value prevalent at the time of the notification. It is pertinent to record that the State did not adduce any evidence nor filed any documents contradicting the stand of the appellants. One of the appellants was cited as first witness before the Land Acquisition Court, who not only produced the documents pertaining to sale of the nearby properties but also tendered the judgment of the Land Acquisition Court being Land Acquisition Case No. 62 of 2000 passed in relation to another property of the appellants being 18, Nityadhan Mukherjee Road in the year 1987-88 which was also pleaded in an application for reference and the written statements filed before the Land Acquisition Court. It was specifically deposed by the said first witness of the appellant that the value of the land cannot be less than Rs. 1,50,000/- per katha and the value of the structure should be Rs. 4,00,000/- and above.
The valuer was cited as the second witness (P.W. 2) who categorically stated that several documents including the judgment passed by the Land Acquisition Court in respect of the nearby property were also taken into consideration. He stood by his statement that the valuation ascertained by him is based on such material and is reasonable and fair.
4The Land Acquisition Court relied on a sale deed dated 24.01.1964 wherein a land measuring 6 kattas 5 chitaks 34 square feet of land comprised in 6, Mukhram Kanoria Road, Howrah was sold by the Trustees of Improvement of Calcutta in favour of a prospective buyer at Rs. 29,100/- per katha and held that the said property was situated within 500 meters from the acquired land having the identical advantages. It was also held that since the said exemplar pertains to a property situated within the said mouza having similar advantages, the same may be accepted for determining of the market value.
Curiously enough, the Land Acquisition Court even after recording its findings as indicated above, awarded the compensation at Rs. 40,000/- per katha together with the solatium at the rate of 30% after deducting the previous amount given by the Land Acquisition Collector. The Land Acquisition Court further awarded an additional interest at the rate of 8% per annum on and from the date of the order till realization and directed the State respondents to pay the aforesaid amount within ninety days from the date of the order.
On the conspectus of the aforesaid facts, the learned Advocate for the appellant assailed the impugned judgment that in determining the market value of the acquired land, the Court cannot surreptitiously ascertain the same without taking into account the materials available on the record. It is vehemently submitted that the Court relied on the sale deed (Exhibit 8) as a guiding factor ignoring the other exhibited documents, more particularly the judgment of the Land Acquisition Court, the High Court affirming such judgment and the Supreme Court dismissing the Special Leave Petition in respect of a contiguous property, tendered by the appellants.
The Ld. Advocate for the appellant further submitted that even if reliance is placed by the Court on Exhibit 8, it does not show that the 5 value would be Rs. 40,000/- per katha and therefore, the presumption over the same is unwarranted. It is further submitted that the valuer's report may be considered as one of the factors in determining the market value if the same is based on reliable materials and recognized procedure. In support of the aforesaid contention, reliance is placed upon the judgment of the Apex Court in case of The Special Land Acquisition Office and anr. -Vs- Sri Siddappa Omanna Tumari & ors. reported in AIR 1995 SC 840. It is strongly submitted by the appellant that the valuer relied upon Exhibit 8 (sale deed dated 24th January, 1964) and upon applying the increase in the price of the land by 10% per annum, ascertained the market value of the land which is in consonance with the judgment of the Supreme Court rendered in case of Mehrawal Khewaji Trust (Registered), Faridkot & ors. vs State of Punjab & ors. reported in (2012) 5 SCC 432.
The learned Advocate for the appellant further submits that the judgment passed in an earlier case in respect of the property previously owned by the appellants and situated in close proximity to the subject land herein should be regarded as the basic piece of evidence to assess market value and relied upon a judgment of the Apex Court in Spl. L.A.O., City Improvement Trust Board Vs S.G. Channabasavana Gowda & anr. reported in AIR 2012 SC (Supp)
616. It is thus submitted that once the valuer's report is based upon the materials, it is impermissible to apply a guess work as held in Rajesh Valel Puthuvalil & anr. vs Inland Waterways Authority of India & anr. reported in (2014) 16 SCC 394.
It is arduously submitted that the Land Acquisition Court failed to take into consideration the amendment brought by Act 68 of 1984 with effect from 24.09.1984 in determining the reference for the year 2013 in not granting the benefit under the said amended Act wherein it is the paramount duty of the Court to determine the fair and just 6 compensation irrespective of the fact what the claimant claimed and placed reliance upon a judgment of the Supreme Court in case of Ashok Kumar & anr. vs State of Haryana reported in (2016) 4 SCC 544. It is strenuously argued that in absence of any exemplar relating to large tract of land situated in the close vicinity, the sale deed of a similar area can be taken into consideration for the purpose of assessment of valuation and placed reliance upon a judgment of the Apex Court in case of Bhagwathula Samanna & ors. vs Special Tehsildar and Land Acquisition Officer, Vishakhapatnam Municipality reported in AIR 1992 SC 2298 and Atma Singh (Dead) through LRS. & ors. vs State of Haryana & anr. reported in (2008) 2 SCC 568. Lastly it is submitted that the interest should be awarded on all the components of the compensation and that too, in tune with the relevant provisions and the Court has committed grave error in awarding less interest.
To buttress the aforesaid submission, the appellant relied upon the judgment of the Supreme Court in case of Union of India & anr. vs Raghubir Singh (Dead) by LRS. reported in AIR 1989 SC 1933, Union of India & ors. VS Filip Tiago De Gama of Vedem Vasco De Gama reported in AIR 1990 SC 981, Mehrawal Khewaji Trust (Registered), Faridkot & ors. vs State of Punjab & ors. (supra) and Major General Kapil Mehra & ors. vs Union of India & anr. reported in (2015) 2 SCC 262. The appellant thus concludes that the impugned judgment and order under challenge needs interference and just and fair compensation should be determined and awarded to the appellant.
Per contra, the learned Advocate appearing for the State submits that there is no infirmity and/or illegality in the findings recorded by the Land Acquisition Court in enhancing the compensation at Rs. 40,000/- per katha and awarding a solatium at the rate of 30% 7 together with the interest from the date of an order. It is submitted that there is a discrepancy in the evidence of the valuer which would be noticed from the deposition recorded by the Land Acquisition Court and therefore, there is no illegality in discarding the valuer's report while ascertaining the market value of the acquired property. It is fervently submitted that the valuer visited and inspected the acquired property much after the initiation of the acquisition proceeding and the possession having being taken and therefore, such report is not reliable. It is further submitted that the valuer did not find the existence of the structures as claimed by the appellants at the time of inspection and therefore, it was beyond his conceivable competence to assess the value of the structure.
It is, thus, submitted that there is no omission and/or fault in the finding recorded by the Land Acquisition Court in ascertaining the market value based upon the exemplar (Exhibit 8) wherein the Trusties of Improvement of Calcutta sold the property to a private person. Lastly, it is submitted that the appeal should be dismissed.
As depicted hereinabove, the property comprised in 18, Nityandhan Mukherjee Road is fairly a large tract of land fully developed with the structure occupied by several tenants including Howrah Police upon payment of rent. The property is situated in a posh locality of Howrah which is a commercial hub and accessible to various government organizations, facilities and amenities extended to the section of the society. We fully concur with the finding of the learned Judge of the Land Acquisition Court that there is no standard formula for determining the market value of the acquired land/property as it largely depends upon various factors. Ordinarily, the market value is the price or consideration which a willing buyer has agreed to pay to the willing seller bearing in mind the potentials and the possibilities of the advantages. In other words, it is the price 8 paid by the purchaser to the seller in a normal human conduct with the latent market condition but not when an exaggerated price is paid by a willing purchaser who is also an owner of the land at his arm length. It is, thus the potentiality and the advantages of the acquired land which should be taken into consideration while assessing and/or ascertaining the market value in juxtaposition with the capability and/or possibility of being developed in its actuality. It is no gain saying that the market value of the property is determined with the advantages and disadvantages attributable to the same in the existing situation and some of the relevant factor would be its exact position in relation to close proximity to residential, commercial and the existence of important institutions, facilities and amenities. The support can be lent to the observations made in a judgment delivered in Atma Singh (supra) wherein it is held:
"4. In order to determine the compensation which the tenure- holders are entitled to get for their land which has been acquired, the main question to be considered is what is the market value of the land. Section 23(1) of the Act lays down what the Court has to take into consideration while Section 24 lays down what the Court shall not take into consideration and have to be neglected. The main object of the enquiry before the Court is to determine the market value of the land acquired. The expression 'market value' has been subject-matter of consideration by this Court in several cases. The market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when led out in most advantageous manner excluding any 9 advantage due to carrying out of the scheme for which the property is compulsorily acquired. In considering market value disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded. The guiding star would be the conduct of hypothetical willing vendor who would offer the land and a purchaser in normal human conduct would be willing to buy as a prudent man in normal market conditions but not an anxious dealing at arms length nor facade of sale nor fictitious sale brought about in quick succession or otherwise to inflate the market value. The determination of market value is the prediction of an economic event viz., a price outcome of hypothetical sale expressed in terms of probabilities. See Thakur Kanta Prasad v. State of Bihar, AIR 1976 SC 2219; Prithvi Raj Taneja v. State of M. P., AIR 1977 SC 1560; Administrator General of West Bengal v. Collector, Varanasi, AIR 1988 SC 943 and Periyar v. State of Kerala, AIR 1990 SC 2192.
5. For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable 10 of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like, water, electricity, possibility of their further extension, whether near about Town is developing or has prospect of development have to be taken into consideration. See Collector Raigarh v. Hari Singh Thakur, AIR 1979 SC 472, Raghubans Narain v. State of U.P., AIR 1969 SC 465 and Administrator General, W. B. v. Collector Varanasi, AIR 1988 SC 943. It has been held in Kaushalya Devi v. L.A.O. Aurangabad, AIR 1984 SC 892 and Suresh Kumar v. T.I. Trust, AIR 1980 SC 1222 that failing to consider potential value of the acquired land is an error of principle."
Even though the learned Judge in the Land Acquisition Court recorded its finding on the nuances of the factors required for ascertaining the market value of the acquired land, yet, it surreptitiously jumped to its conclusion that it cannot exceed Rs. 40,000/- per katha in absence of cogent evidence in this regard.
As stated above, the appellants not only relied upon the sale deed (Exhibit 8) in respect a property situated 500 meters away from the acquired land, which is admittedly a smaller plot, but also relied upon a judgment of the Land Acquisition Court which was affirmed by the High Court and the Supreme Court in respect of an adjoining property acquired subsequently by the Government. The judgment of the earlier case can be regarded as the reliable piece of evidence provided such acquisition was made in the close proximity of time. Exhibit 4 is a copy of the judgment passed by the Land Acquisition Court in Land Acquisition Miscellaneous Case No. 62 of 2000, wherein another property of the appellant situated in 18, Nityadhan Mukherjee 11 Road, Howrah was acquired in the year 1987-88 and the market value of the land was determined at Rs. 2,00,000/- per katha.
For proper assessment whether such document can be regarded as the reliable piece of evidence, we perused the said Exhibit 4 and noticed that reliance was placed therein upon another judgment of the Land Acquisition Court where the land was acquired in the year 1976, which is in a proximal point of time with the present acquisition. In the present case, the notification was published in the Official Gazette on 7th November, 1974 followed by a declaration dated 21.06.1974. In the said case the Land Acquisition Court determined the market value of the land at Rs. 1,00,000/- per katha and in the said Exhibit 4, the Court took into account the escalation and/or increment in the price and awarded the compensation at the rate of Rs. 2,00,000/- per katha. The reliance can be placed to the judgment of the Apex Court rendered in Spl. L.A.O., City Improvement Trust Board (supra) wherein it is held:-
"5. Shri Basava Prabhu S. Patil, learned senior counsel appearing for the appellant argued that the High Court was not justified in relying upon Exhibits P.5, P.18 and P.19 because determination of market value made in those judgments has not been approved by the Supreme Court in K.S. Shivadevamma vs. Assistant Commissioner and Land Acquisition Officer (AIR 1996 SC 2886: 1996 AIR SCW 633) (supra). As against this, Shri R.S. Hegde and Shri Naresh Kaushik, learned counsel for the respondents supported the impugned judgment and argued that the High Court rightly relied upon the earlier judgments for fixing market value of the acquired land.
6. We have considered the respective submissions and carefully perused the record. In our view, the High Court 12 did not commit any error by relying upon Exhibits P.5, P.18 and P.19 for granting further enhancement in market value of the acquired land. In K.S. Shivademma v. Assistant Commissioner and Land Acquisition Officer (supra) this Court did not reject the determination of the market value made by the High Court vide Exhibit P.5.
Therefore, the same could furnish basis for determination of market value of acquired land."
The judgment of the Land Acquisition Court i.e. Exhibit 4 was assailed before the High Court and the same was affirmed reiterating the principles pertaining to the determination of the market value relying upon the market value ascertained in respect of an acquired land within the vicinity and the increase in the price in course of ordinary dealing. The judgment delivered by the Court may be considered as a guiding factor and if found relevant to the issues with clarity and certainty, we do not find any justification in discarding the same and relying on an exemplar which is 500 meters away from the acquired land. The doctrine of binding precedence is a cardinal feature of jurisprudence promoting certainty and consistency in judicial decisions. It augments an organic development of law apart from inculcating a sense of assurance to the individual as to the consequences of transaction in normal course. We are not unmindful that the legal compulsions cannot be squeezed and/or limited by certain impositions as they will always be beyond the frontiers of law inviting judicial scrutiny and choice-making affecting the validity of the exceeding legal dogma. The enlightening observations from the judgment of the Constitution Bench in case of Raghubir Singh (supra) may be placed which runs thus:-
13"13. Not infrequently, in the nature of things there is a gravity-heavy inclination to follow the groove set by prece- dential law. Yet a sensitive judicial conscience often persuades the mind to search for a different set of norms more responsive to the changed social context. The dilemma before the Judge poses the task of finding a new equilibri- um, prompted not seldom by the desire to reconcile opposing mobilities. The competing goals, according to Dean Roscoe Pound, invest the Judge with the responsibility "of proving to mankind that the law was something fixed and settled, whose authority was beyond question, while at the same time enabling it to make constant readjustments and occasional radical changes under the pressure of infinite and variable human desires."
Roscoe Pound, "an Introduction to the Phi- losophy of Law"
p. 19. The reconciliation suggested by Lord Reid in "The Judges as Law Maker" pp. 25-6 lies in keeping both objectives in view, "that the law shall be certain, and that it shall be just move with the times." An elaboration of his opinion is contained in Myers v. Director of Public Prosecutions, L.R. 1965 A.C. 1001, where he expressed the need for change in the law by the court and the limits within which such change could be brought about. He said:
ibid at p. 1021.
"I have never taken a narrow view of the functions of this House as an appellate tribunal. The common law must be developed to meet changing economic conditions and habits of thought, and I would not be deterred by expressions of opinion in this House in old cases. But there are limits to what we can or 14 should do. If we are to extend the law it must be by the development and application of fundamental principles. We cannot introduce arbitrary conditions or limitations: that must be left to legislation. And if we do in effect change the law, we ought in my opinion only to do that in cases where our decision will produce some finality or certainty."
Whatever the degree of success in resolving the dilemma, the Court would do well to ensure that although the new legal norm chosen in response to the changed social climate repre- sents a departure from the previously ruling norm, it must, nevertheless, carry within it the same principle of certainty, clarity and stability.
14. The profound responsibility which is borne by this Court in its choice between earlier established standards and the formulation of a new code of norms is all the more sensitive and significant because the response lies in relation to a rapidly changing social and economic society. In a developing society such as India the law does not assume its true function when it follows a groove chased amidst a context which has long since crumbled. There will be found among some of the areas of the law norms selected by a judicial choice educated in the experience and values of a world which passed away 40 years ago. The social forces which demand attention in the cauldron of change from which a new society is emerging appear to call for new perceptions and new perspectives. The recognition that the times are changing and that there is occasion for a new jurisprudence to take birth is evidenced 15 by what this Court said in The Bengal Immunity Company Limited v. The State of Bihar and Others, [1955] 2 SCR 603, when it observed that it was not bound by its earlier judgments and possessed the freedom to overrule its judgments when it thought fit to do so to keep pace with the needs of changing times. The acceptance of this principle ensured the preservation and legitimation provided to the doctrine of binding precedent, and therefore, certainty and finality in the law, while permitting necessary scope for judicial creativity and adaptability of the law to the changing demands of society."
We do not find any justifiable reasons in taking a different view and relying on a document in disregard with the most reliable document by the Learned Judge of the Land Acquisition Court in determining the market value of the acquired property. Furthermore, even if we consider that Exhibit 8 as relied upon by the Learned Judge is the basic piece of evidence, yet, we failed to persuade ourselves to find out the answer as to why the Learned Judge enhanced the compensation when such exemplar indicates the price of the land at Rs. 29,000/- and odd per katha to Rs. 40,000/- per katha.
We are not unmindful of the principle of law that the large tract of land cannot fetch the same value as that of the small tract of land for the simple reason that in order to reject the exemplar relating to small tract of land, the Court must bear in mind the advantages and the disadvantages which the large tract of land have. It is no longer in dispute that the Court may not accept the value of the smaller plot to the larger plot provided there are other mitigating factors vis-à-vis development of the road, filling up to make it compatible with the 16 object of the acquisition and leaving the areas for sewerage, drainage etc. In case of Bhagwathula Samanna (supra), the Apex Court held:-
"13. The proposition that large area of land cannot possibly fetch a price at the same rate at which small plots are sold is not absolute proposition and in given circumstances it would be permissible to take into account the price fetched by the small plots of land. If the larger tract of land because of advantageous position is capable of being used for the purpose for which the smaller plots are used and is also situated in a developed area with little or no requirement of further development, the principle of deduction of the value for purpose of comparison is not warranted. With regard to the nature of the plots involved in these two cases, it has been satisfactorily shown on the evidence on record that the land has facilities of road and other amenities and is adjacent to a developed colony and in such circumstances it is possible to utilise the entire area in question as house sites. In respect of the land acquired for the road, the same advantages are available and it did not require any further development. We are, therefore, of the view that the High Court has erred in applying the principle of deduction; and reducing the fair market value of land from Rs. 10 per sq. yard to Rs. 6.50 paise per sq. yard. In our opinion, no such deduction is justified in the facts and circumstances of these cases. The appellants, therefore, succeed."17
In case of Atma Singh (supra) the Apex Court reiterated that exemplar of a smaller property cannot be disregarded while ascertaining the market value of the larger property provided the other factors are conspicuously absent in these words:-
"8. Shri Rakesh Dwivedi, learned senior counsel for the sugar mill has submitted that the exemplars filed by the appellants were of very small pieces of land and, therefore, they are not safe guide to determine the market value of the land. It may be mentioned here that while determining the market value, the potentiality of the land acquired has also to be taken into consideration. The appellants have led evidence to show that the acquired land had the potentiality to be used for commercial, industrial and residential purposes. PW.1 Rakesh Kumar had prepared a site plan which showed that the acquired land was adjacent to the abadi of Shahabad and abutted the Shahabad-Ladwa Road. The site plan also shows that there existed rice shellers, cold storage, shops, godowns, a college and houses etc. on both sides of Shahabad-Ladwa Road. PW.2 Baldev Singh was Patwari of village Chhapra in the year 1983. He deposed that all the four villages viz. Kankar Shahbad, Chhapra, Jandheri and Jhambara are adjacent to each other and the acquired land abutted the Shahabad- Ladwa Road. He further deposed that the acquired land was 2 kilometer from G.T. Road and there were buildings, godowns, a cinema hall, factories on both sides of the Shahabad-Ladwa Road. Therefore, there can be no manner of doubt that the acquired land had the potentiality for being used for commercial, industrial and 18 residential purposes and there was fair possibility of increase in its market value in the near future. Therefore, the fact that the exemplars filed by the appellants were of the small pieces of land could not be a ground to discard them specially when exemplars of large pieces of land were not available. They could, therefore, be used as a safe guide for determining the market value of the land."
It is thus, manifest from the above reports that there cannot be any hard and fast rule to disregard the exemplar of the smaller property for the larger property in ascertaining the market value. In case of housing development, the factors relating to development of infrastructure, making property compatible for housing purposes, leaving of considerable amount for construction of a road, drain etc. are the factors when such exemplars cannot be considered as a safe guide for determining the market value. In the instant case, both the properties i.e. property comprised in Exhibit 8 and the acquired property were fully developed as the acquired property was being used for habitable purposes by letting out to various tenants.
However, the point remains whether Exhibit 8 as relied on by the Land Acquisition Collector was fully justified as the property comprised in Exhibit 8 was situated at the distance of 500 meters from the acquired land when the Court had Exhibit 4, the judgment of the Land Acquisition Court, in respect of the property situated adjoining to the acquired property.
As indicated above, though the adjoining property was acquired nearly after a decade from the acquisition of the present property, yet the market value was ascertained taking into account an exemplar i.e. a judgment of the Land Acquisition Court rendered in respect of a property acquired at the proximal time i.e. 1976-77. Two year's 19 difference does not bring about a considerable increase in the price though the Apex Court in case of Mehrawal Khewaji Trust (Registered), Faridkot & ors. (supra) held that increase in the market value can be to the tune of 10% to 15% per annum. It would be appropriate to quote the relevant excerpts from the said judgment which runs thus:-
"19. This Court has time and again granted 10% to 15% increase per annum. In Ranjit Singh vs. Union Territory of Chandigarh (1992) 3 SCC 659, this Court applied the rule of 10% yearly increase for award of higher compensation. In Delhi Development Authority vs. Bali Ram Sharma & Ors. (2004) 6 SCC 533, this Court considered a batch of appeals and applied the rule of annual increase for grant of higher compensation. In ONGC Ltd. vs. Rameshbhai Jivanbhai Patel (2008) 14 SCC 745, this Court held that where the acquired land is in urban/semi-urban areas, increase can be to the tune of 10% to 15% per annum and if the acquired land is situated in rural areas, increase can be between 5% to 7.5% per annum. In Union of India vs. Harpat Singh & Ors. (2009) 14 SCC 375, this Court applied the rule of 10% increase per annum.
20. Based on the above principle, we fix the annual increase at 12% per annum and with that rate of increase, the market value of the appellants' land would come to Rs.1,82,000 per acre as on the date of notification."
So far as the valuation report is concerned, there are large number of decisions including the one cited by the appellant that the same is acceptable as a guiding piece of evidence provided such report 20 is based upon the proper materials and not on the guess work [The Special Land Acquisition Office and anr.-Vs- Sri Siddappa Omanna Tumari & ors. reported in AIR 1995 SC 840, Rajesh Valel Puthuvalil & anr. vs Inland Waterways Authority of India & anr. (2014) 16 SCC 394]. Since, we find that the safe guide would be the Exhibit 4 where Rs. 1,00,000/- per katha was assessed as the market value in the year 1976-77, we do not find any justifiable cause in not accepting the same. Though the learned Advocate for the appellant has also argued on the effect of the amendment having brought in the year 1984 relating to the benefit on quantum of solatium to be applied if the matter was pending as on the date of coming in force of the said Act, we do not want to detain us in this regard as we find that the Trial Court awarded the solatium at the rate of 30%, which is in tune with the amended provision. It would be too academic now to deal with the judgments cited in this regard.
So far as the component of interest is concerned, we find that the Trial Court awarded the interest at the rate of 8% per annum from the date of the order till realization which is not in tune with Section 28 and 34 of the said Act. Both the Sections are quoted hereinbelow:-
"28. Collector may be directed to pay interest on excess compensation:-
If the sum which, in the opinion of the Court, the Collector ought to have a awarded as compensation is in excess of the sum which the Collector did award as compensation the award of the Court may direct that the Collector shall pay interest on such excess at the rate of nine per centum per annum from the date on which he took possession of the land to the date of payment of such excess into Court:21
Provided that the award of the Court may also direct that where such excess or any part thereof is paid into Court after the date of expiry of a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the amount of such excess or part thereof which has not been paid into Court before the date of such expiry.
34.Payment of interest:-
When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited:
Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry."
It is apparent from the aforesaid provision that if the Court opines that the Collector ought to have awarded compensation in excess of the sum constituting the part of the award, the Court may direct the Collector to pay interest at the rate of 9% per annum from the date on which he took possession to the date of payment of such excess amount in the Court. The proviso inserted in Section 88 of the 22 said Act makes the position more clear that after the expiry of one year from the date of taking possession, the interest at the rate of 15% per annum shall be payable from the date of expiry of the said period of one year on an excess amount or a part thereof which has not been paid in the Court before the date of such expiry. Section 34 of the said Act makes it imperative on the Collector to pay the awarded amount with interest at the rate of 9% per annum from the date of taking possession for one year and at the rate of 15% after the expiration thereof. Though Section 28 confers a discretion upon the Court to award interest at such rate but Section 34 makes it obligatory.
It is no longer res integra that the discretionary power is to be exercised by the Court in a judicious manner as opposed to a whimsical and capricious manner. Such discretion should not be exercised arbitrarily but based upon cogent findings in conjunction with the materials available on record. The Apex Court in case of Major Kapil Mehra (supra) held:-
"42. Contention of the appellants is that on the enhanced compensation, the mandatory interest under Section 34 of the Act has not been awarded to them. Placing reliance upon Commissioner of Income Tax, Faridabad vs. Ghanshyam (HUF), (2009) 8 SCC 412, it is contended that the impugned judgment is silent on granting statutory interest under Section 34 of the Land Acquisition Act and the appellants pray for award of interest on the enhanced compensation. The appellants filed C.M. No.735/2011 before the High Court seeking review for payment of interest which according to the appellants was omitted to be included and the said application was dismissed by the High Court.
43. The Land Acquisition Act, 1894, provides for payment of interest to the claimants either under Section 34 or 23 under Section 28 of the Act. Section 34 of the Act fastens liability on the Collector to pay interest on the amount of compensation to be worked out in accordance with provisions of Section 23(1) and the sub-section thereof, at the rate of 9% per annum from the date of taking possession until the amount is paid or deposited. As per proviso to Section 34, if the compensation amount or any part thereof is not paid or deposited within a period of one year from the date of taking over possession, interest shall be payable at the rate of 15% per annum from the date of expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry.
44. Section 28 empowers the courts, if it was enhancing the compensation awarded by the Collector, to award interest on the sum in excess of what the Collector had awarded as compensation. Both in terms of Section 34 and Section 28, interest at 9% per annum is payable for the first year of taking possession and 15% per annum thereafter, if the amount of compensation was not paid or deposited within a period of one year or deposited thereafter.
45. Award of interest under Section 34 is mandatory in as much the word used in the Section is 'shall'. The scheme of the Act and the express provisions thereof establish that the interest payable under Section 34 is statutory. The claim for interest under Section 28 of the Act proceeds on the basis that due compensation not having been paid, the 24 claimant should be allowed interest on the enhanced compensation amount. The award of interest under Section 28 is discretionary power vested in the Court and it has to be exercised in a judicious manner and not arbitrarily. The use of the word "may" in Section 28 does not confer any arbitrary discretion on the Court to disallow interest for no valid or proper reasons. Normally, Court awards interest if it enhances the compensation in excess of the amount awarded by the Collector, unless there are exceptional circumstances."
We, thus, find that the learned Judge of the Land Acquisition Court has not recorded any finding while exercising the discretion bestowed upon him in Section 28 of the said Act and therefore, such finding cannot be concurred with.
So far as the valuation of the structure standing thereupon is concerned, there is no material forthcoming in support thereof. The valuer in his report categorically stated that he was appointed by the predecessor of the appellant or the appellant; which he inspected in the year 1973 and further inspected the property in the year 2009 when there was no original structure standing thereupon. Though the valuer stated that he had noted the structures in his first visit in the year 1973 but he could not give any plausible explanation towards the value of the structure as on the date of the acquisition. In absence of any cogent material, the report of the valuer cannot be accepted and therefore, we do not find any ground to interfere with the value of the structure assessed by the Land Acquisition Court.
On the basis of the discussion made hereinabove, we are of the view that, the market value of the land as on the date of the acquisition was Rs. 1,00,000/- per katha. The appellants are entitled 25 to get the compensation in relation to the land at the rate of Rs. 1,00,000/- per katha together with the solatium at the rate of 30% subject to the statutory deductions. The appellants are entitled to an interest at the rate 9% per annum from the date of the possession for a period of one year and thereafter at the rate of 15% per annum till realization.
The appeal is thus allowed.
However, there shall be no order as to costs.
Urgent photostat copy of this order, if applied for, be given to the parties upon compliance of all formalities.
( Hiranmay Bhattacharyya, J.) (Harish Tandon, J.)