Rajasthan High Court - Jodhpur
Raj.State Mines & Minerals Ltd.Udaipur vs Lrs.Of Bala Ram & Ors on 21 July, 2011
Author: Vineet Kothari
Bench: Vineet Kothari
SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011
1/35
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
1. S.B. CIVIL MISC. APPEAL NO.7/2011
The Rajasthan State Mines and Minerals Ltd.
versus
LRs. of Bala Ram and anr.
2. S.B. CIVIL MISC. APPEAL NO.8/2011
The Rajasthan State Mines and Minerals Ltd
versus
Sita Ram and ors.
PRESENT
HON'BLE Dr.JUSTICE VINEET KOTHARI
Mr.M.R.Singhvi, Sr. Advocate, assisted by Mr.Arun Bhansali and Mr. A.S. Rathore, for the appellant. Mr. L.R. Mehta, with Mr. Rajkumar Pareek, for the respondents.
DATE OF JUDGMENT : 21st July, 2011. REPORTABLE
1. These two appeals have been filed by the appellant - Rajasthan State Mines and Minerals Limited, Udaipur (hereinafter referred to as the RSMML or the appellant company) under Section 54 of the Land Acquisition Act, 1894 against the judgment/ order dt.6.12.2010 passed by the learned Dist. Judge, Merta on reference u/s SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 2/35 18 of the Act with respect to award of Land Acquisition Officer (SDO, Nagore) dtd.19.9.2000.
2. The facts giving rise to the present appeal, shorn of unnecessary details, are as under.
3. On 7.11.1997, the notification u/s 4 of the Act of 1894 was issued by the State Government seeking to acquire in all 7400 bighas of agricultural land of village Matasukh, Tehsil Jayal, Dist. Nagaur out of which 98 bighas and 11 biswas of land was of Khatedar Bala Ram, the respondent herein. The notification u/s 6 of the Act was issued on 16.10.1998 as also the notification under section 17(1) of the Act was issued on 16.10.1998. The said land was acquired for the appellant RSMML, a Government of Rajasthan undertaking for mining of lignite which was mineral found under the surface of said land in a survey conducted by the Central Government and the State Government around the year 1995. The total land acquired was around 7400 bighas of land comprised in villages Kasnau, Igyar and Matasukh of Dist. Nagaur. The Land Acquisition Officer - SDO, Nagaur passed the award on 19.9.2000 and on the basis of DLC rates supplied to him by the Sub-Registrar of Jayal vide letter dtd.24.12.1998 and letter dtd.17.8.2000, he passed the award on 19.9.2000 determining the compensation of the said land of various land holders. The DLC rates communicated to him for village Mata SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 3/35 Sukh were Rs.12100/- per bigha for irrigated land away from road/abadi area and Rs.13200/- per bigha of irrigated land near road/abadi area. Similarly, for unirrigated land, the said rates were notified to be 7370/- per bigha for land situated away from road/abadi area and Rs.7920/- per bigha near the road/abad area. For small plots/Baras, the rate of DLC communicated was Rs.55 per sq. yard. Including therein the rate for trees on said land or well if existing on said land, the rate determined by the Land Acquisition Officer in the award was worked out at Rs.12500/- per bigha for the irrigated land and Rs.7500/- for unirrigated land for the land in the said village Matasukh. Being dissatisfied with the same, certain reference applications were filed u/s 18 of the Act seeking enhancement of compensation and by the impugned judgment and order dt.6.12.2010, the learned Court below of Dist. Judge, Merta city (Sh. Surendra Mohan Sharma, RHJS) enhanced the rate of such compensation to Rs.50,000/- per bigha of land quadrupling the rate per bigha uniformally for both irrigated and unirrigated land and further directed that such enhanced rate of compensation be paid with interest @12% from 7.11.1997, date of notification u/s 4 of the Act till the date of passing of award or taking of possession whichever is earlier, after adjustment of compensation already received by the land-owners in pursuance of the award. Solatium @30% was also directed to be paid.
SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 4/35
4. Being aggrieved by the said order of reference u/s 18 of the Act, the appellant RSMML has approached this Court by way of present appeals, which were heard finally at admission stage since a caveat was entered on behalf of respondent - landowner by Mr. L.R. Mehta Advocate and both the learned counsels prayed for final hearing of the case at this stage.
5. The primary and foremost contention raised by Mr. M.R. Singhvi, Sr. Advocate, learned counsel appearing for appellant RSMML was that the Reference Court u/s 18 of the Act has abnormally raised the amount of compensation to Rs.50,000/- per bigha for the land in question more than four times as against Rs.7500/- and 12500/- per bigha in the case of irrigated land awarded by the Land Acquisition Officer. He submitted that the evidence adduced by the respondents - land holders in the form of sale-deeds also did not disclose such high rate of agricultural land and therefore, the market value of land which is required to be determined as per Section 23 of the Act as on the date of publication of notification u/s 4 of the Act and further Section 24 of the Act especially negatives taking into account any increase in the market value of land acquired, which is likely to accrue from the use to which it will be put when acquired. In other words, he submitted that merely because lignite coal was to be mined from the said acquired land at a later point of time and also same was valuable mineral fetching high value in SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 5/35 market and such lignite was to be used for power generation, such consideration could not be taken into account for determining the higher market value. He submitted that the Land Acquisition Officer himself had enhanced the rate from DLC rates made available to him by concerned Revenue Authorities to Rs.7500/- per bigha for unirrigated land and Rs.12500/- per bigha for irrigated land in the award dtd.19.9.2000.
6. Mr. Singhvi also vehemently assailed the basis for enhancement of rate to Rs.50,000/- per bigha by reference Court on the basis of another acquisition of land made by the State Government for the appellant - Company in Barmer of about 17592 bighas of land for Kapurdi Lignite Project in which an award on mutual agreement of State Government and Land-holders was passed under Section 11 (2) of the Act on 14.9.2009 after about 9 years and the notification for such acquisition of land in Barmer for Kapurdi Lignite Project was issued on 13.7.2007 after about 10 years of notification u/s 4 of the Act involved in the present case, which was issued on 7.11.1997.
7. Drawing the attention of the Court towards section 11 (2) and Sub-Section (3), the learned Counsel for the appellant - RSMML urged that award under Section 11(2), which is prefaced with non- obstante clause clearly stipulates that notwithstanding contained in Sub-Section (1) if at any stage of proceedings, the Collector is SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 6/35 satisfied that all the persons interested in the land who appeared before him have agreed in writing on the matters to be included in the award of the Collector in the form prescribed by rules made by the appropriate Government, he may, without making further enquiry, make an award according to the terms of such agreement. Thus it is the award on mutual settlement between the parties as to the rate of compensation, measurement of land etc. He further submitted that Sub-section (3) of Section 11 clearly stipulates that the determination of compensation for any land under sub-Section (2) shall not, in any way affect the determination of compensation in respect of other lands in the same locality or elsewhere in accordance with the other provisions of this Act. Thus, he submitted that the award made for Kapurdi Lignite Project in Barmer after about 10 years on mutual settlement under Section 11(2) of the Act in which State Government agreed to pay Rs.50,000/- per bigha of irrigated land could not form the basis for the enhancement of rate in the present case of acquisition in Nagaur in an award, which was made not by mutual settlement but on the basis of market value determined under Section 23 of the Act in terms of Section 11(1) of the Act.
8. Mr. Singhvi, therefore, prayed that in fact devoid of any other evidence on record, the learned Reference Court in the present case, has abnormally raised the compensation to Rs.50,000/- per bigha which was not the market rate for land in question as on the SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 7/35 date of notification u/s 4 of the Act merely on the basis of Barmer Kapurdi Lignite Project award dtd.14.9.2009 which was not only a different land situated far away from the land in question situated in District Nagaur, but at a much later point of time also and that too upon a mutual settlement between the State Government and the land- holders. He, therefore, prayed for quashing of the impugned order and restoring the award passed by the Land Acquisition Officer. He relied upon the following judgments in support of his contentions:
1. AIR 2010 SC 170 - Lal Chand V/s Union of India and anr.
2. (1994) 4 SCC 595 - Jawajee Nagnatham V/s Revenue Divisional Officer.
3. AIR 1992 (SC) 974 - Ashwini Kumar Dhingra V/s State of Punjab.
4. (1995) 1 SCC 717 - Land Acquisition Officer V/s Jasti Rohiti
9. On the other hand, Mr. L.R. Mehta, learned counsel appearing for the respondents - landowners stoutly supported the impugned order and relying upon the various decisions of the Hon'ble Apex Court, he urged that the amount of compensation awarded by the Reference Court is just and proper and is fair determination of the market value in terms of Section 23 of the Act and therefore, the same SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 8/35 deserves to be maintained. He also urged that in fact, the respondent - land owners were never given proper opportunity to make their claims for compensation as even the notices u/s 9 of the Act were not served on the respondents and the rate of Rs.50,000/- determined by the reference Court was not only based on evidence in the form of sale-deeds of land situated in nearby area, but also the award for Kapurdi Lignite Project of Barmer could also be relied upon and has rightly been relied upon by the Reference Court for enhancing the rate of compensation to Rs.50,000/- per bigha besides interest and solatium.
10. Elaborating further, Mr.L.R. Mehta, learned counsel appearing for the respondents - land-owners further submitted that the evidence of sale-deeds vide Ex.2, 3 and 4 produced before the reference Court also supported such enhancement in rates. Ex.2 is the sale-deed of agricultural land measuring 15 bighas of land in village Arwar of one Rajendra Singh to Laxmi Devi on 31.1.1997 at the rate of Rs.40,000/- per bigha. Ex.3 is the sale-deed for 16 bighas and 17 biswas of land sold by Radha Devi to Rameshwar Prasad on 13.8.1997 at Rs.11000/- per bigha. Ex.4 is another sale-deed dtd.27.12.1990 by which one Basti Ram sold 7 bighas and 4 biswas of land to one Idana Ram in village Matasukh for Rs.50,000/-.
SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 9/35
11. The learned counsel Mr. L.R. Mehta for the respondents - landowners also submitted that the legal representatives of respondents - landowners Teja Ram S/O Bala Ram has also filed his detailed affidavit before the learned Reference Court in his reference case No.35/2003, in which he stated that even prior to 1996, the land near said village Matasukh was being sold around Rs.70,000/- per bigha. In his affidavit dtd.9.4.2010 in para 35 of the said affidavit, he has also stated that his father Bala Ram had spent about Rs.4,50,000/- in the year 1984 to 1986 towards manure of gypsum etc. and had also raised temporary mud boundary of about 5 to 6 ft. height around his land of 98 bighas and for levelling of land which was uneven earlier. He also stated that quality of soil of said land was very good in village Matasukh and therefore, in comparison to land sold in nearby villages, the land of the respondent - landowners in village Mata Sukh was required to be valued at higher price. The said deponent was also cross-examined by the learned counsel for RSMML before the reference Court and in the additional affidavit filed by said Teja Ram on 18.10.2010, he has also produced the award under Section 11(2) of the Act by the Land Acquisition Officer of Barmer regarding Kapurdi Lignite Project and therefore, the same has rightly been relied upon by the Reference Court and in the said award, rate of Rs.1,50,000/- per bigha was given as compensation inclusive of solatium, interest and cost of trees etc. and out of said sum of Rs.1,50,000/-, Rs.50,000/- per bigha was SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 10/35 determined as market value for land in question. Mr. L.R. Mehta, learned counsel for the land owners relied upon the following judgments in support of his contention:
1. AIR 2010 SC 984 - Sagunthala V/s Special Tehsildar.
2. 2010(9) SCC 118 - A. Natesam Pillai V/s Special Tehsildar.
3. 2011(6) SCC 47 - Trishala Jain and anr. V/s State of Uttaranchal and anr.
12. I have heard the learned counsels at length and given my thoughtful consideration to the impugned order, relevant statutes and the judgments cited at the bar.
13. At the outset, it may be stated here that the cross-
objections filed by the land-owners seeking further enhancement of compensation were dismissed as not pressed on 13.7.2011 on account of non-payment of court fee by the land-holders which was paid only of Rs.10/- fixed fee as against the ad-voleram court fee. Though the learned counsel for the land-holders Mr. L.R. Mehta initially relied upon the decision of Hon'ble Supreme Court in the case of Diwan Brothers V/s Central Bank of India, Bombay and ors. reported in in AIR 1976 SC 1503, however, in view of later decision of Hon'ble Supreme Court in the case of Indore Development Authority V/s SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 11/35 Tarak Singh and ors. reported in AIR 1995 SC 1828 and the Division Bench decision of this Court in the case of Prayag Chand V/s Land Acquisition Officer and anr. reported in 2005(2) RWL 1234 following the said view, in which it has been held that ad- voleram court fee has to be paid on such cross-objections and cross- appeals as has been paid by the appellant- RSMML in the present appeals, the learned counsel for the land-holders Mr. L.R. Mehta did not press such cross-objections. With the dismissal of the cross- objections, this Court is seized only to decide the present two appeals of the appellant - RSMML and to decide whether compensation awarded by the Reference Court by the impugned judgment u/s 18 of the Act @Rs.50,000/- per bigha of land is justified or not.
14. Recently, the Hon'ble Apex Court in the case of Sagunthala V/s Special Tehsildar (L.A.) reported in AIR 2010 SC 984, heavily relied upon by the learned Court Mr. L.R. Mehta, it has been held by the Hon'ble Supreme court that for determination of market value of land, the purpose for which the land was acquired is a relevant factor. In the said case, th agricultural land was acquired to build quarters of workers of the Company and the acquired land was also potential house sites being adjacent to residential colonies. Therefore, the Hon'ble Apex Court held that fixation of amount of compensation @Rs.1,75,000/- per acre by the reference Court u/s 18 was proper even though the claimants had claimed lesser SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 12/35 compensation of Rs.1,00,000/- per acre, but the Apex Court held, that it was not material and setting aside the judgment of the High Court which determined the market value at Rs.75000/- per acre, the Apex Court restored the market value as determined by the Reference Court at Rs.1,75,000/- per acre. In para 24 to 26, the Apex Court held as under:
"24.In the light of the above material facts, this Court feels that the presence of number of buildings on the lands acquired and the said lands being occupied by the buildings are to be treated as house sites. The basic purpose that has been traced out in the evidence and as admitted by RWs that the lands were acquired for the purpose of putting up residential quarters. As a position of the land is being considered as house site, the adjoining lands have the potential of being put in better use as a house sites in the near future.
25. The other important factor is the proximity of the plots to two residential colonies i.e. Anna Nagar and Gandhi Nagar. As it has come on record that the Anna Nagar Colony has about 50-60 houses and Gandhi SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 13/35 Nagar colony has about 150 houses, as such it is reasonable and proper to conclude that the present lands under dispute were near the residential colonies.
26. It should also be taken into consideration that the disputed lands were situated near the factory premises and further were adjoining the main road which connects the Tanmag Road. As such the aforesaid lands are potential house sites."
While holding that the reference proceedings under Section 18 has to be treated as original proceedings and the claimants are in a position of plaintiffs who have to show that price offered for their land in award is inadequate, the Court held in para 37 that the purpose for which the acquisition is being made is an important factors. Quoting from the decision of Atma Singh V/s State of Haryana reported in (2008) 2 SCC 568, the Court held in para 34 that 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 cnodition with all its existing advantages and its potential possibilities. The Apex Court held in para 34 as under:
SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 14/35 "34. In Atma Singh (Dead) through L.Rs. and others v. State of Haryana and anr. [(2008) 2 SCC 568] : (AIR 2008 SC 709 : 2007 AIR SCW 7835), it was observed that the expression "market value" has been the 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 will all its existing advantages and its potential possibilities when let out in most advantageous manner excluding any 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 principle would be the conduct of hypothetical willing vendor who would offer the land and that of a purchaser who, in normal human conduct, would be willing to buy as a prudent man in normal market SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 15/35 conditions but not of an anxious purchaser dealing in arm's length nor a 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."
15. In a recent decision in the case of Greater Noida Industrial Development Authority vs. Devendra Kumar & ors. Special Leave to Appeal (Civil) No. 16366/2011 - decided on 6/7/2011, the same bench of Apex Court while quashing the land acquisition proceedings itself as colourable exercise of powers by U.P. State Government observed the following while emphasizing that agriculturists whose only source of livelihood i.e. agricultural land is acquired and which land is like mother to those people:
" Before concluding, we consider it necessary to reiterate that the acquisition of land is a serious matter and before initiating the proceedings under the 1894 Act and other similar legislations, the concerned Government must seriously ponder SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 16/35 over the consequences of depriving the tenure holder of his property. It must be remembered that the land is just like mother of the people living in the rural areas of the country. It is the only source of sustenance and livelihood for the landowner and his family. If the land is acquired, not only the present but the future generations of the landowner are deprived of their livelihood and the only social security. They are made landless and are forced to live in slums in the urban areas because there is no mechanism for ensuring alternative source of livelihood to them. Mindless acquisition of fertile and cultivable land may also lead to serious food crisis in the country.
In the result, the special leave petitions are dismissed.
The Greater Noida Development Authority is saddled with cost of Rs.10 lakhs for undertaking an exercise of allotment of land to the builders in complete violation of the purpose for which the land was sought to be acquired and even before approval by the SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 17/35 State Government for the change of land use. The amount of cost shall be deposited in the Supreme Court Legal Services Committee within a period of three months from today."
While holding it to be colorable exercise of powers, the Hon'ble Supreme Court relying upon the earlier decision of Supreme Court in the case of State of Punjab vs. Gurdial Singh - 1980 (2) SCC 471 and quoted the following from the said judgment while quashing the acquisition on the ground of malafide exercise of powers:
" This was nothing but a colourable exercise of power by the State Government under the 1894 Act and in our considered view, the High Court did not commit any error by recording a conclusion to that effect. In this context, it will be useful to notice the observations made in State of Punjab v. Gurdial Singh (1980) 2 SCC 471.
In that case, while pronouncing upon the correctness of the order passed by the Punjab and Haryana High Court which had quashed the acquisition of the respondents' land on the ground of malafide exercise of power, this Court observed:
"Legal malice is gibberish unless juristic clarity keeps it separate from the popular concept of personal vice. Pithily put, bad SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 18/35 faith which invalidates the exercise of power
-- sometimes called colourable exercise or fraud on power and oftentimes overlaps motives, passions and satisfactions -- is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal. If the use of the power is for the fulfilment of a legitimate object the actuation or catalysation by malice is not legicidal. The action is bad where the true object is to reach an end different from the one for which the power is entrusted, goaded by extraneous considerations, good or bad, but irrelevant to the entrustment. When the custodian of power is influenced in its exercise by considerations outside those for promotion of which the power is vested the court calls it a colourable exercise and is undeceived by illusion. In a broad, blurred sense, Benjamin Disraeli was not off the mark even in law when he stated: "I repeat . . . that all power is a trust -- that we are accountable for its exercise -- that, from the people, and for SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 19/35 the people, all springs, and all must exist".
Fraud on power voids the order if it is not exercised bona fide for the end designed. Fraud in this context is not equal to moral turpitude and embraces all cases in which the action impugned is to effect some object which is beyond the purpose and intent of the power, whether this be malice- laden or even benign. If the purpose is corrupt the resultant act is bad. If considerations, foreign to the scope of the power or extraneous to the statute, enter the verdict or impel the action, mala fides or fraud on power vitiates the acquisition or other official act."
16. In the case of Lal Chand V/s Union of India and anr. reported in AIR 2010 SC 170 however, the Hon'ble Supreme Court cautioned the lower Courts against adding some fancied percentage to the value shown by sale-deeds to arrive at what they considered to be "realistic market value" presuming that sale-deeds disclosed depressed market value instead of real value. In para 30 and 31, the Hon'ble Supreme Court observed as under:
SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 20/35 "When the respondents rely upon certain sale deeds to justify the value determind by the Land Acquisition Collector or to show that the market value was less than what is claimed by the claimants, and if the claimant produce satisfactory evidence (which may be either with reference to contemporaneous sale deeds or awards made in respect of acquisition of comparable land or by other acceptable evidence) to show that the market value was much higher, the sale deed relied upon by the respondents showing a lesser value may be inferred to be undervalued, or not showing the true value. Such deeds have to be excluded from consideration as being unreliable evidence. A document which is found to be undervalued cannot be used as evidence.
(Para 30).
But Court noticed a disturbing trend in some recent cases, where a Court accepts the sale deed exhibited by the claimants as the basis for ascertaining the market value. But then, it also accepts a contention of the claimants that the general tendency of members of public is SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 21/35 not to show the real value, but show a lesser value to avoid tax/stamp duty and therefore the sale deeds produced and relied on by them, should be assumed to be undervalued. On such assumption, some courts have been adding some fancied percentage to the value shown by the sale deeds to arrive at what they consider to be "realistic market value'. The addition so made may vary from 10% to 100% depending upon the whims, fancies and the perception of the learned Judge as to what is the general extent of suppression of the price in the sale deeds. Such increase, in the market value disclosed by the sale deeds, on the assumption that all sale deeds show a 'depressed' market value instead of the real value, is impermissible. The Court can neither accept the document as showing the prevailing the market value, in which event it has to be acted upon. Or the Court may find a document to be undervalued in which it should be rejected straightway as not reliable. There is no third way of accepting a document, by adding to the market value disclosed by the SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 22/35 document, some percentage to off-set the under-valuation. There is no legal basis to proceed on a general assumption that parties, without exception, fail to reflect the true consideration in the sale deeds, that there is always undervaluation or suppression of the true price and that consequently, all sale deeds reflect a depressed value and not the real market value and therefore, some percentage should be added to arrive at the real value. Such a course also amounts to branding all vendors and purchasers as dishonest persons without any evidence and without hearing them. It ignores the fact that government has fixed minimum guideline values and whenever a registering authority is of the view that a sale deed is undervalued, proceedings are initiated for determination of the true market value. It also ignores the fact that a large number of sale deeds are accepted by the registering authorities as disclosing the current market value.
(Para 31)."
SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 23/35
17. In earlier decision in the case of P. Ram Reddy and ors. V/s Land Acquisition Officer, Hyderabad reported in (1995) 2 SCC 305, the Hon'ble Supreme Court held that market value of acquired land with building potentiality is required to be determined with reference to the material to be placed on record or made available in that regard by the parties concerned and not solely on surmises conjectures or pure guess. In para 10 and 12, the Hon'ble Supreme Court held as under:
"The market value of the acquired land with building potentiality is required to be determined with reference to the material to be placed on record or made available in that regard by the parties concerned and not solely on surmises, conjectures or pure guess.
(para 12) Market value of the acquired land with building potentiality comprises of the market value of the land having regard to the use to which it was put on the relevant date envisaged under Section 4(1) of the LA Act plus the increase in that market value because of the possibility of the acquired land being used for putting up buildings, in the immediate SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 24/35 or near future. If there is any other land with building potentiality similar to the acquired land which had been sold for a price obtained by a willing seller from a willing purchaser, such price could be taken to be the market value of the acquired land, in that, it would have comprised of the market value as was being actually used plus increase in price attributable to its building potentiality. If the prices fetched by sale of similar land with building potentiality in the neighbourhood or vicinity of the acquired lands with building potentiality, as on the relevant date envisaged under Section 4(1) of the LA Act, are unavailable, it becomes necessary to find out whether any building plots laid out in a land simlar to the acquired land had been sold by a willing seller to a willing buyer on or nearabout the relevant date under Section 4 (1) when the acquired land had been proposed for acquisition and then to find out what would be the price which the acquired land would have fetched if it had been sold by making it into building plots similar to those SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 25/35 sold. In other words, a hypothetical layout of building plots in the acquired land similar to that of the layout of building plots actually made in the other similar land, has to be prepared, and the price fetched by sale of building plots in the layout actually made should form the basis for fixing the total price of the acquired land with building potentiality to be got if plots similar to other plots had been made in the latter land and sold by taking into account plus factors and minus factors involved in the process."
18. Upholding the discretion to apply guesstimate, when no evidence is led by either of the parties for determining the market value and how such fair discretion should be applied was recently determined by the Apex Court in the case of Trishala Jain and anr. V/s State of Uttaranchal and anr. reported in (2011) 6 SCC 47. The relevant gist of judgment from the head-note of SCC is reproduced hereunder for ready reference:
"More often than not, it is not possible to fix the compensation with exactitude or arithmetic accuracy. Depending on the facts SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 26/35 and circumstances of the case, the court may have to take recourse to some guesswork while determining the fair market value of the land and the consequential amount of compensation that is required to be paid to the persons interested in the acquired land.
(Para 56) The concept of "guesswork" is not unknown to various fields of law. It has been applied in cases relating to insurance, taxation, compensation under the Motor Vehicles Act as well as under the Labour Laws.
Where the parties have not brought on record any evidence, then the Court will not be in a position to award compensation merely on the basis of imagination, conjecture, etc. There are different methods of computation of compensation payable to the claimants, for example it can be based upon comparable sale instances, awards and judgments relating to the similar or comparable lands, method of averages, yearly yields with reference to the revenue earned by the land, etc. Whatever method of determining the SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 27/35 compensation is applied by the court, its result should always be reasonable, just and fair as that is the purpose sought to be achieved under the scheme of the Act.
(Para 63) The court may apply some guesswork before it could arrive at a final determination, which is in consonance with the statutory law as well as the principles stated in the judicial pronouncements. This principle is only intended to bridge the gap between the calculated compensation and the actual compensation that the claimants may be entitled to receive as per the facts of a given case to meet the ends of justice.
Principles controlling the application of "guesstimate" are :
(a) Wherever the evidence produced by the parties is not sufficient to determine the compensation with exactitude, this principle can be resorted to.
(b) Discretion of the court in applying guesswork to the facts of a given case is not unfettered but has to be reasonable and SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 28/35 should have a connection to the date on record produced by the parties by way of evidence. Further, this entire exercise has to be within the limitations specified under Sectinos 23 and 24 of the Act and cannot be made in detriment thereto.
(Para 65)"
19. In the case of A. Natesam Pillai V/s Special Tehsildar reported in (2010) 9 SCC 118, the Apex Court held that deduction in valuation of large tracts of land where exemplar land is a small plot is permissible. Applying the principles of potentiality of acquired land, the Apex Court held that High Court was not justified in reducing compensation from Rs.11 per sq. ft. to Rs. 9 per st. ft. In para 22 to 27 of the said judgment, the Hon'ble Supreme Court held as under:
"22. Therefore, it is clear from the aforementioned decisions of this Court that the potentiality of the acquired land, insofar as it relates to the use to which it is reasonably capable of being put in the immediate or near future, must be given due consideration.
SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 29/35
23. The present acquired land has all the potentiality to be used as building sites, even in the immediate future, as it is located at a place in and around which building activity has already started. The evidence on record also clearly indicates that the acquired land is abutting the main road. The acquired land is also surrounded by schools, Panchayat Union Office, shops and residential buildings on all three sides. The High Court also found, as a matter of fact, that the area where the acquired land is situated is fit for construction of houses. On an overall consideration and appreciation of the records, we feel that the deduction due to the small size of the exemplar land can easily be set off with the corresponding increase in price of the acquired land when compared with the land in Ext.A-3 from the point of view of potential value.
24. Although it is true that the land covered by Ext.A-3 is a small tract of land and therefore, cannot be compared in size with the large area of land acquired under the SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 30/35 present notification, it is to be concluded that the land in question would definitely fetch a higher price than what is fixed by the High Court. A prospective purchaser would only be too willing to pay for the acquired land having immediately potentiality of being used as a residential site in a prime locale at almost the same, if not, higher price than the land covered by Ext.A-3 which is located outside the municipality area.
25. We are in agreement with the conclusion of the High Court that the acquisition of a large tract of land merits a discount in compensation. However, in the present circumstance, it is significant to note that the compensation granted by the High Court does not match the potentiality of the land, even after the discount has been taken into consideration. Even on giving a discount in respect of the acquired land being a large tract as compared to the small portion of land sold under Ext.A-3, according to us, the arte of Rs.11 would be adequate and just compensation for the same.
SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 31/35
26. In our considered, by scaling down the rate of compensation to Rs.9 from Rs.11 per sq. foot, the High Court denied just and reasonable compensation to the appellant, thereby resulting in a miscarriage of justice.
27. We, therefore, hold that the appellant shall be entitled to compensation at Rs.11 per square foot for the acquired land which we consider to be just and fair. Needless to say that the State shall also be liable to pay additional compensation and solatium on the amount enhanced and fixed in terms of this order including payment of interest in terms of the rate of interest awarded by the Reference Court. The appeal stands allowed to the aforesaid extent without any costs."
20. In light of the aforesaid judgments, it is clear that the market value has to be determined with reference to the date of notification under Section 4(1) of the Act, which in the present case was 7.11.1997 and the market value should be based on the evidence led by the parties in the reference proceedings, which has to be treated as original jurisdiction proceedings and some amount of guess work can be made by the Court by fair use of discretion, but no SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 32/35 surmises or wild guess work can be applied to arrive at so called "realistic market value". While potentiality of the land acquired can be taken into consideration also and is relevant factor, it is nonetheless burden of the claimant to prove such potentiality before the reference Court.
21. Viewed from this angle, jacking up of the rate of compensation by the reference Court from Rs.7500/- per bigha for unirrigated land and Rs.12,500/- per bigha for irrigated land straightway to Rs.50,000/- per bigha at four times is rather a wild guess work. The said judgment of the learned Dist. Judge u/s 18 of the Act is only based on the award made after 10 years in respect of Kapurdi Power Project in Barmer on mutual agreement between the landholders and the State Government on 14.9.2009 u/s 11(2) of the Act, which determined such compensation with respect to notification under Section 4 dtd.13.7.2007, whereas in the present case, for village Matasukh in Dist. Nagaur, the notification under section 4 was issued on 7.11.1997. Not applying any discounting factor for a period of 10 years by the learned Reference Court on the rate of Rs.50,000/- per bigha even assuming for the argument's sake that subsequent award could be taken into consideration as relevant evidence, was not at all justified. Comparison of Rs.50,000/- applied in the present case by the learned Dist. Judge in the impugned order dtd.19.9.2000 with total compensation including interest, solatium SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 33/35 and compensation for damages @Rs.1,50,000/- per bigha in the case of Kapurdi Lignite Project should not mislead any one because the rate per bigha for the agricultural land was Rs.50,000/- only on mutual agreement award under Section 11(2) of the Act with the reference to the date of notification dtd.13.7.2007 in respect to Kapurdi Lignite Project, Barmer. The same rate of Rs.50,000/- per bigha could not be taken as market value of the land acquired in the present case in district Nagaur 10 years back. The deduction of 40% to 50% from that market value would have been quite appropriate and justified even if such evidence in the form of award u/s 11(2) of the Act could be taken into consideration notwithstanding a bar u/s 11(3) of the Act. The other evidence of sale-deeds produced before the reference Court also did not disclose such higher rate of Rs.50,000/- per bigha. The evidence in the form of Ex.2, 3 and 4 discussed above, as produced by the landholders also discloses the per bigha rate of Rs.10,000/- to Rs.40,000/- during that period. Therefore, even if such rates for small plots were to be applied, the same could be applied with appropriate discounting factor because a huge chunk of land of 7400 bighas has been acquired. The rate could not be jacked up to as high as Rs.50,000/- per bigha. At the same time, this Court is of the opinion that the rates determined by the Land Acquisition Officer at the rate of Rs.7500/- per bigha for unirrigated land and Rs.12500/- per bigha for unirrigated land in the present case is also extremely conservative and does not take into account, the possible increase in SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 34/35 the market value keeping in view the potentiality of the land to be used and also the fact that the agriculturists have been deprived of only source of their livelihood permanently. The DLC rates also cannot be taken as sole basis for determining the market value u/s 23 of the Act. Thus, a balance has to be struck between the two rival claims between the parties. This Court is of the opinion that upon fair and reasonable estimation of market value on the basis of material on record, the market value of Rs.25,000/- per bigha for the agricultural land can be applied uniformly irrespective of the land in question being irrigated or unirrigated because just after its acquisition, the said difference would not matter as the land in question is not intended to be put to use for the agricultural purposes, but lignite has to be mined therefrom by the appellant RSMML for power generating projects. The huge length of period which has passed uptill now from the date of Notification u/s 4 dtd.7.11.1997 and land price have gone up in the meanwhile considerably is another reason to justify the increase from the rates of compensation awarded by the Land Acquisition Officer.
22. Accordingly, these two appeals are partly allowed and the order of Reference Court dtd.19.9.2000 is modified to the extent of rate of compensation being reduced from Rs.50,000/- to Rs.25,000/- per bigha as on 7.11.1997. The interest under Section 34 of the Act @9% per annum from the date of possession till the date SBC MA NO. 7/2011- RSMML V/S LRs. OB BALA RAM AND ONE CONNECTED MATTER.
: JUDGMENT DTD.21.7.2011 35/35 of payment and solatium shall be computed accordingly. However, the other parts of compensation for trees, damages for dislocation etc. is maintained as held by the Reference Court. The amount of compensation so determined may be paid accordingly to the landholders within a period of three months from today. No order as to costs.
(Dr.VINEET KOTHARI)J. ITEM NO.
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