Punjab-Haryana High Court
Sant Singh (Deceased) Through His Lrs vs The State Of Haryana on 18 September, 2012
Author: K.Kannan
Bench: K. Kannan
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
RFA No.2060 of 1999 (O&M)
Date of decision:18.09.2012.
Sant Singh (deceased) through his LRs ....Appellant
versus
The State of Haryana ....Respondent
&
RFA Nos.2061 to 2063, 2201 to 2204, 2476, 1750 to 1757, 2900,
1797 to 1801 of 1999;
RFA Nos.1280 of 2000;
RFA Nos.569 to 600, 5165, 601, 602, 604 to 616 of 2001;
RFA No.2644 of 2002;
RFA Nos.1602, 1588 of 2004;
RFA Nos.638, 640, 641, 1017 to 1019, 1629, 1630, 484 of 2005
Present: Mr. Hawa Singh Hooda, Advocate General, with
Mr.Ashish Gupta, AAG, Haryana.
Mr. A.P. Bhandari, Advocate,
in RFA Nos.1750 to 1757 of 1999 and 5165 of 2001.
Mr. Jagram Singh Cooner, Advocate, for
RFA Nos.1629 and 1630 of 2005.
Mr. Bhag Singh, Advocate.
Mr. Yogesh Saini, Advocate, for
Mr. Pritam Saini, Advocate,
in RFA Nos.1602 and 1588 of 2004
Mr. Amit Jaiswal, Advocate,
in RFA Nos.1017 to 1019 of 2005.
Mr. R.P.S. Ahluwalia, Advocate,
in RFA Nos.2060 to 2063 of 1999.
----
CORAM: HON'BLE MR. JUSTICE K. KANNAN
----
RFA No.2060 of 1999 (O&M) -2-
1. Whether reporters of local papers may be allowed to see the
judgment ? Yes.
2. To be referred to the reporters or not ? Yes.
3. Whether the judgment should be reported in the digest ? Yes.
----
K.Kannan, J.
1. The batch of cases arises out of an acquisition notification which was issued on 08.02.1989 under Section 4 of the Land Acquisition Act. The acquisition related to the land, trees and building in the villages of Shahpur and Nanhera, Tehsil and District Ambala, as a expansion of the neighbourhood scheme of Ambala Cantonment. The Land Acquisition Collector had by an award issued on 23.01.1992 determined the compensation at ` 75,000/- per acre. On a reference to the Additional District Judge, Ambala, the amount of compensation had been raised to ` 2,50,000/-. Before the Reference Court, the landowners as well as the Government produced substantive evidence as regards the valuation. There were also reports by the engineering experts, both on the side of the landowners as well as the Government, for determination of value of the superstructures. The Reference Court rejected both the reports as not worthy of acceptance and took the assessment made by the Collector himself as the basis for the valuation of the superstructures. The landowners and the Government, being both dissatisfied with the awards as regards the quantum, are in appeal before this Court.
RFA No.2060 of 1999 (O&M) -3-
2. The landowners relied on principally the Exhibits P4 to P7, P24 and also R1, R3 and R4 as constituting the appropriate exemplars on the basis of which the assessment of compensation could have been done. Since the entire discussion would rely on the details of properties and whether any of these documents could provide the appropriate basis, it should immediately become necessary to tabulate the same:-
Sr. No. Exhibit Date Extent Consideration Value, per acre
1. P4 4.11.82 5 Acres 9,10,000/- 1,20,800/-
2. P5 17.8.87 5 Marlas 23,000/- 7,36,000/-
3. P6 16.4.86 23K-10M 7,34,375/- 2,50,000/-
4. P7 13.08.86 8 Kanals 2,50,000/- 2,50,000/-
5. P24 14.12.88 100 Sq. Yds 25,000/- 10,00,000/-
6. R1 6.8.87 13 K-13/20M 6,000/- 70,329.67
7. R3 10.10.88 1K-6M 6,000/- 36,923.07
8. R4 10.10.88 2 Kanals 6,000/- 24,000/-
3. Of the various sale deeds, it could be noticed that the properties in Nanhera village is recited as more valuable at least in terms of the sale deeds than the properties in Shahpur village. The total extent of property that was acquired from Nanhera is 60.73 acres, while an extent of 211.29 acres had been acquired from the Village Shahpur. P6 and P7 are dealt with an extent of 23 kanals and 8 kanals respectively for a consideration @ ` 2.2 lakh per acre and ` 2.5 lakh per acre. P24 is a small extent of land and the recitals of the sale consideration show that the sale has been made for RFA No.2060 of 1999 (O&M) -4- establishing a shopping complex. It is evident that the property was dealt with as commercial property and not merely an agricultural land. It does not therefore provide for an appropriate basis for consideration and it is spelt out even at the outset to remove the said document itself for consideration. The learned counsel for the landowners would contend that the entire property which was acquired from two villages adjoined the National Highway-1 and the property adjoining the road itself stretches to a distance of about 1 ½ kilometers. The property is in Ambala Cantonment which is the Divisional Headquarter and even more valuable than the property which is in the Ambala City. It is contended by all the landowners that Ambala Cantonment itself is a major export zone and the Science City is situate in Ambala Cantonment and very many important offices and commercial properties are situate in the cantonment area. According to them, the property in Ambala Cantonment, if at all, is more valuable than the property in Ambala City. Gradually scaling down, it is also suggested that in any event, the property in the Ambala City itself which is about 8 kilometers from the place where the property acquired is situate, cannot be more valuable than the property in Ambala Cantonment. As if to even out, it is also contended that Ambala City and Ambala Cantonment are now part of the same Corporation and the value of the properties in both the areas are more or less similar. The RFA No.2060 of 1999 (O&M) -5- landowners would rely on the fact that the properties acquired in Ambala City have been the subject of consideration for assessment of compensation before this Court and this Court has provided for an assessment of ` 8 lakh per acre for the property acquired about the same time. In the year 1981, this Court in a LPA award has provided for value of the property in Ambala City at ` 105/- per square yard for Sector 9 and ` 185/- per square yard for Sector 10. If we translate the value per square yard into per acre, the value per acre for Sector 9 comes to ` 5,08,200/- and for Sector 10, it comes to ` 8,95,400/-. The counsel would contend that the property acquired was through a notification of the year 1989 which is later by another 8 years and the property should therefore be valued at least ` 12 lakhs per acre. The counsel would also argue that against the properties mentioned in R3 and R4, the valuation ought to be discarded since the Collector himself had assessed the valuation more than the valuation as found in the document.
4. The learned Advocate General Shri Hawa Singh Hooda appearing on behalf of the State would contend that the properties in Shahpur and Nanhera villages cannot be treated alike as the transaction themselves showed. Apart from the fact that the property in Nanhera village was relatively for a smaller extent the value was higher by virtue of the fact that Nanhera was more populous than Shahpur and the demand being higher than the supply, the value was RFA No.2060 of 1999 (O&M) -6- also higher for the properties in Nanhera. According to him, uniform fixation of value for both the towns was, therefore, irregular. The learned counsel would also argue that the properties in Ambala City are of much more value than the property in Ambala Cantonment. There is a restriction of purchase of properties within Ambala Cantonment which restriction do not apply in Ambala City and, therefore, by mere proximity to the Railway Station and Bus Stand, the properties in Ambala City are much more valuable.
5. The learned Advocate General would argue that potential for the property must be judged from the actual perception of the public at the time when the property was acquired and not judging from how the properties are valued after nearly 20 years hence. When the property was acquired, they were all agricultural lands. The circumstances that many of the properties had borewell and motor sheds would themselves reveal the properties being used as agricultural lands. If the properties in R3 and R4 which were for an extent of 1 kanal 6 marlas and 2 kanals 1 kanal respectively themselves fetched price only at ` 36,923/- per acre and ` 24,000/- per acre respectively, it must be taken that the valuation should be averaged to correspond to the said particulars only. The normal instance of taking the compensation as payable for the highest value ought not to be followed. It is also contended that merely because the Collector's valuation was higher than the valuation recorded in RFA No.2060 of 1999 (O&M) -7- the said sale deeds, it could not be discarded. The counsel would argue that the Supreme Court has held in Lal Chand Versus Union of India-2009(15) SCC 769 that it would be no bar for a Court to consider the valuation given in the sale deeds less than the value given by the Collector, while assessing compensation although Section 25 of the Land Acquisition Act itself would bar the reduction of award less than the amount which has been assessed by the Collector in a case in reference for enhancement under Section
18. In other words, the contention was that the sale deeds would be taken as relevant although they would themselves not be used for reducing the compensation already assessed by the Collector.
6. In the manner of appreciation of documents and assessing the proper compensation payable, I would think it essential to set out some of the principles which are involved in the assessment of compensation:
(i) in the case of several exemplars usually the highest exemplar is to be considered. Where the prices range in a narrow bandwidth, the average thereof could be taken but where the prices through sales are markedly different averaging cannot be resorted to. (see: Anjani Molu Dessai Versus State of Goa and another-(2010) 13 SCC 710);
(ii) in the manner of ascertainment of compensation, RFA No.2060 of 1999 (O&M) -8- even apart from the actual use of the property is put to potential of the land for user for commercial or non-
agricultural purpose are always irrelevant;
(iii) whenever the properties acquired are agricultural lands of larger extent, sale deeds of small extent of properties cannot be the ideal exemplars. If there are no other documents, the appropriate deduction must be applied towards development charges (see: Prabhakar Raghunath Patil and others Versus State of Maharashtra-2010 (13)SCC 107);
(iv) the purpose of acquisition of the property itself may not be relevant for determining compensation in terms of Section 24. However, in the manner of providing for deduction for development, it would assume significance to assess whether large tracts of property would be lost for laying roads or setting apart for common purpose, depending on the nature of user that the property would be put to. It will not be therefore unrealistic to assess the actual purpose for which the property is acquired. (Subh Ram Versus State of Haryana-2010(1) SCC 444; Nelson Fernandes and others Versus Special Land Acquisition Officer, South Goa and others-
(2007) 9 SCC 447; and Chakas Versus State of RFA No.2060 of 1999 (O&M) -9- Punjab-(2011) 12 SCC 128);
(v) while taking the valuation of properties for acquisition rendered earlier, the Courts would be justified in providing for escalation upto 10 to 15% in respect of urban properties and half the said rate if they are rural properties. Care, however, must be taken to ensure that there is no long gap between the valuation on acquisition of properties and the value of the properties which are subsequently acquired for which the assessment is sought to be made (see: ONGC Limited Versus Rameshbhai Jivanbhai Patel (2008) 14 SCC
745).
7. In the matter of consideration of appropriate evidence that could be taken as exemplars for determination, in view of voluminous evidence placed by the respective parties, it becomes necessary to weed out certain documents out of reckoning to stay in focus the relevant handful of documents alone that could have immediate bearing to valuation. The learned counsel for the landowners have relied on the awards passed by this Court in LPAs for acquisition of properties in the year 1981 that went for formation of Sector 9 and Sector 10 of the Ambala City. For Sector 9, the valuation was ` 105/- per square yard, whereas for Sector 10, valuation was ` 185/- per square yard. Although the counsel for the RFA No.2060 of 1999 (O&M) - 10 - appellants would contend that the valuation of the property in Ambala City and Ambala Cantonment were same, the counsel for the State stoutly contested the position. I see the weight of the argument that in Cantonment where there are restrictions for housing and for transfer of properties, the value cannot be the same as what could obtain in Ambala City. The valuation in Ambala City, therefore, ought not to be immediately relevant for determination of compensation except that it could provide the idea of the highest swing of prices that a property could fetch at one end of the pendulum. An attempt must be to strike a golden median between a reasonable price within which the valuation could have hovered.
8. I will also discard the valuation of property in P24 since the transaction related to a sale for setting a shopping complex. The sales of property dealt with through R3 and R4 for a value of ` 36,923/- and ` 24,000/- per acre would also not provide an appropriate guide for determination of price only for the reason that the sales have taken place treating them as agricultural lands only, without minding the potential use of the property for housing and non-agricultural purposes. While I agree with the contentions of the learned counsel for the State in his reliance of the judgment of the Supreme Court in Lal Chand's case (supra), I would hold they cannot be used even for averaging the valuation of properties. We have already brought out the precept that averaging must be resorted RFA No.2060 of 1999 (O&M) - 11 - to only for prices that operate within a narrow bandwidth and, therefore, I discard the said sale deeds as not appropriate. P6 and P7 are for an extent of 23 kanals and 8 marlas for ` 2.2. lakhs and ` 2.5 lakhs respectively. The valuation in village Nanhera I would take as representing a higher quotient of price on account of the village more populous, with demand outstripping supply. This is a manner of accepting the arguments of the learned Advocate General that the properties in Shahpur and Nanhera villages cannot be valued similarly. This value by reference to P6 and P7 must, therefore, represent the outer limit. Both these properties are along the GT road. The property in P4 was in respect of a transaction on 04.12.1982 where 5 acres of land has been sold for ` 9,10,000/- @ ` 1,20,800/- per acre. P5 is sale of property on 17.08.1987 which has dealt with an extent of 5 marlas of land for ` 23,000/-. This is too small extent for consideration as representative of the valuation of properties. I would, therefore, discard P5 as not of much substance. P21 has been executed on 25.08.1986 where the properties sold was 17 marlas of land for a sum of ` 45,000/-. This is also even less than a 1 kanal and we are considering the issue of compensation for large tracts of agricultural lands. I would, therefore, find that the valuation as given in P1 cannot be an appropriate exemplar for consideration. For the same reason, the valuation as given in P12 cannot also help us, for, it is a sale in respect of 15 marlas of land RFA No.2060 of 1999 (O&M) - 12 - made on 03.03.1987 for a consideration of ` 4,80,000/-. P23 is for 8 marlas of land on 17.08.1987 for ` 22,000/- which works out to ` 4,49,000/- per acre. P24 property is for an extent of 100 square yards sold for ` 25,000/- on 14.12.1988. All these documents P22, P23 and P24 cannot also, in my view, afford an appropriate guideline for valuation since they are in respect of small parcels of land. P25 is a sale deed executed on 07.11.1983 in respect of 9 kanals-16 marlas of land for ` 1,72,000/- which works out to ` 1,38,000/- per acre. In my view, the averaging ought to be worked out only from amongst the properties covered in P4, P6, P7 and P25. They could now be tabulated to take the average price after making due provision for enhancement for relatively earlier periods than for the relevant period at which the property was acquired.
Ex. Date Extent Price Value, per acre P4 4.11.82 5 acre 9,10,000/- 1,20,800/- P6 16.4.86 23K-10M 7,34,375/- 2,50,000/- P7 13.8.86 8K 2,50,000/- 2,50,000/- P25 7.11.83 9K-16M 1,72,000/- 1,38,000/-
9. We have already seen that the land acquisition notice under Section 4 even amongst the properties which are shortlisted, it would seen that P4 itself is in respect of a transaction on 04.11.1982 while we are considering the acquisition notice for the petitioner of 08.02.1989 where the gap is longer say 4 to 5 years, the Supreme RFA No.2060 of 1999 (O&M) - 13 - Court has held on ONGC's case, referred to above, that it would be unsafe to take such a transaction for valuation. For the same reasons, even P25 is in relation to a property which was transacted on 07.11.1983 which is more than 6 years prior to the date of notification. That would therefore, leave us for consideration only the properties in P6 and P7. Both P6 and P7 have been dealt with only as agricultural lands. Both the transactions are of the year 1986. Considering the fact that those transactions refer to the period of 1986, it would only be appropriate that for acquisition of the property in the year 1989, it should be necessary to provide for an escalation for 3 years. The rate of escalation has been taken for urban property between 10 to 15% in ONGC's case, referred to above. The property is in Ambala Cantonment which is on the National Highway-I and comprised of prestigious public institutions and an export zone. I would, therefore, apply the rate of escalation at 15% per year for 3 years and the escalation shall be 45%. Since the average of the value of the property in P6 and P7 alone are `2,50,000/- per acre and providing for 45% increase, the valuation would come to ` 3,62,500/-. This manner of valuation has not taken note of the potential of the property for use for non- agricultural purposes. The transactions which were sold in small parcels of land, fetch prices as high as ` 7,36,000/- (for example, Ex.P5) and, therefore, it would only be appropriate that the RFA No.2060 of 1999 (O&M) - 14 - properties along the National Highway must be provided with the compensation providing for a further escalation of at least 25%. This shall be ` 4,53,125/- per acre. The property cannot be the same value for the entire stretch of lands falling on either side of the National Highway. It shall only be appropriate that we take note of the fact that we have already seen that the properties in Village Nanhera are relatively more valuable than the properties in Shahpur. Consequently, the price of the property in Village Shahpur along with Highway shall be reduced by 10%, which shall return the value at ` 4,08,000/- per acre. Along this, the other important consideration shall be that even apart from the location of the properties in the above two villages, the distance from the Highway must be taken as relevant for determination of compensation. The manner of assessment adopted in such situations is a system of belting which would apply differential rates depending on the proximity to the main road. There has been a consistent string of authorities commencing from Sher Singh Versus State of Haryana- (1991) 3 SCC 335 explaining where property is acquired in abroad strip, with varying advantages by relative proximity to main roads and markets and where the property bears potential for residential, commercial or industrial user depending on location, belting method could be followed. In Gurugobind Singh Refineries Limited Versus State of Punjab-(2010) 10 SCC 401 , the Supreme Court RFA No.2060 of 1999 (O&M) - 15 - upheld the belting method but remanded the case to reference Court to determine prices after evidence from parties. Here, Shri A.P. Bhandari himself favours belting method to be adopted and suggests appropriate cuts could be made depending on the location. The valuation could vary between 5% to 25% reduction as the properties fall in various strips from the main road. For the first 100 meters along the Highway, the value shall be at the rates specified above, namely, ` 4,53,125/- per acre for Village Nanhera, ` 4,08,000/- per acre for Village Shahpur. For location of properties beyond 200 meters, the value of the property shall stand reduced to another 15% and for properties still further beyond the next 200 meters and more the value of the property will be reduced by another 10%. There is a certain guesswork in this process but it is inevitable, considering the fact that all properties along a large track cannot obtain the same valuation.
10. Amongst the cases where there are buildings and other structures such as borewell, sheds etc., the issue regarding assessment of compensation in that regard has been contested only in RFA No.1750 of 1999. The grievance of the learned counsel Shri A.P. Bhandari appearing on behalf of the landowners is that the Reference Court has not properly considered the evidence placed through expert regarding the valuation even when there was no serious challenge to his evidence. The case would, therefore, RFA No.2060 of 1999 (O&M) - 16 - require to be seen whether the Reference Court has committed any error in discarding relevant evidence.
11. I find the mistake in the award consisted of merely taking the existence of farmhouse in one of the items of property acquired, viz. Khasra No.13//26 without reference to the valuations undertaken by the expert to underground pipeline, houndi, open drain, hand pump, open well, deep tubewell to the depth of 395 feet and shallow dug well to the depth of 65 feet. The total valuation given as ` 2,89,080/- and not merely ` 1,10,000/- as seen by the Reference Court. The average which the Reference Court has assessed was clearly erroneous, for, it completely excluded out of reckoning several other structures in the very same property. I have no reason to discard the entire evidence. I would take the valuation for the structures at ` 2,50,000/-. In khasra No.26//26, 26//6/1 and 20/5/1, the Land Acquisition Collector had found the structure existing in the property to be 3 borewells, 1 underground nali, Store, tubewell, cattle shed and wall. The landowners were contending that there were other structures also such as poultry farm in the said property. The Land Acquisition Collector had assessed the value at ` 84,971/-, while the Reference Court found that G.L. Sharma had assessed the value only at ` 24,470/-. Here again the Reference Court has merely referred to the assessment made for the cattle shed and has completely discarded the valuation for the poultry farm. RFA No.2060 of 1999 (O&M) - 17 - The total valuation given for the structures in these khasra numbers was ` 1,42,270/- by the expert. He has made a separate assessment of ` 11,660/- for the tubewell room and for the shallow well in khasra No.20//5/1. The award of ` 54,720/- alone does not appear to be fair. I would enhance the value to ` 1,30,000/- for the structures in the above khasra numbers.
12. For the structures in Khasra No.6//22/2, the Reference Court has made reference to the Collector's assessment of existence of tubewell with chamber and a well at ` 4,228/-. The Reference Court has observed the expert has assessed the value at ` 8,700/-. This is again erroneous for even apart from the tubewell room, the expert had valued at ` 8,700/-. The expert has made assessment of value for water supply, houndi and shallow dug well tubewell at a depth of 65 feet. The total valuation given by him is 15,900/-. I would enhance the compensation awarded by the Reference Court as ` 6,064/- to ` 10,000/-.
13. As regards the structure in khasra No.19//22/1, the Collector has found the existence of tubewell with kotha and nali and assessed the value at ` 3,422. The Reference Court has observed that the expert has valued the same at ` 8,440/-, but this again is a mistake, for, it does not refer to all the structures which were admittedly found in the said khasra number. The valuation as given by the expert is ` 14,705/- and I would assess the value at RFA No.2060 of 1999 (O&M) - 18 - another ` 10,000/-. On the whole, the compensation payable would be ` 4 lakhs. This therefore constitutes an enhancement for the structures in the various khasra numbers more that what has been assessed by the Reference Court.
14. In terms of the reasons set out in the aforesaid paragraphs, the compensation assessed shall stand enhanced to ` 4,53,125/- per acre for village Nanhera and ` 4,08,000/- for village Shahpur. This value shall be for the first 100 meters along the highway on either side and for location of the property beyond 200 meters, the value of the property shall stand reduced by 15% and for properties still further beyond the next 200 meters or more, the value of the property would be reduced by another 10%.
15. Apart from the above valuation, as regards the value of the superstructures which are the subject of appeal in RFA No.1750 of 1999, the compensation will be an additional amount of ` 4 lakh. This shall be added to the compensation already determined for the land in the above cases as well.
16. All the appeals filed by the landowners are allowed and by the State are dismissed.
(K.KANNAN) JUDGE 18.09.2012 sanjeev