Karnataka High Court
The Agricultural Produce Market ... vs The Assistant Commissioner Cum-Land ... on 24 June, 2004
Equivalent citations: ILR2004KAR4240, 2004(7)KARLJ312, 2004 AIR - KANT. H. C. R. 3091, 2004 AIHC 4310, (2005) 1 LACC 13, (2004) 4 ICC 653, (2005) 1 CIVLJ 455
Author: P. Vishwanatha Shetty
Bench: P. Vishwanatha Shetty, K. Bhakthavatsala
JUDGMENT P. Vishwanatha Shetty, J.
1. Since both these appeals are directed against the common judgment and award dated 17th December 1998 made in LAC No. 224 of 1989 by the Court of the Civil Judge (Sr. Dn.) and Assistant Sessions Judge, Athani, [hereinafter referred to as 'the Reference Court'], these appeals are taken up together and disposed of by this judgment.
2. The Appellant in MFA No. 1970 of 1999 is the Agriculture Produce Market Committee [hereinafter referred to as 'the Committee'] for whose purpose the land in question has been acquired by the State. The Appellant in MFA No. 3448 of 2000 (hereinafter referred to as 'the Claimant'] is the owner of the land in question. While it is the grievance of the Committee that the compensation awarded by the Reference Court is on the higher side, the grievance of the land-owner is that it is on the lower side.
3. Brief facts:
The land measuring 20 acres 1 gunta in Survey No. 790A situated at Athani came to be acquired for the purpose of the Committee. The preliminary Notification under Section 4(1) of the Land Acquisition Act [hereinafter referred to as 'the Act'] came to be issued on 2nd December 1982; Final Notification under Section 6(1) came to be issued on 21st March 1985 and the award came to be made by the Land Acquisition Officer on 27th December 1988. The Land Acquisition Officer on the basis of the materials placed before him, fixed the market value of the land at Rs. 3,500/- per acre. The claimant not being satisfied with the quantum of the compensation determined by the Land Acquisition Officer sought reference to the Reference Court under Section 18 of the Act. Before the Reference Court, the claimant had examined four witnesses as PW. 1 to PW.4 in support of his claim and marked 13 documents as Exhibits P1 to P13. The Committee and the Land Acquisition Officer did not choose to examine any witness. However, the copies of the award and the award statement were marked as Exhibits D1 and D2 respectively. The Reference Court , on consideration of the oral and documentary evidence, determined the market value of the land in question at Rs. 50,000/- per acre as against Rs. 3,500/- determined by the Land Acquisition Officer. To determine the market value at Rs. 50,000/- per acre, the Reference Court took into consideration the average market value referred to in two sale transactions which have been produced as Exhibit P2 dated 29th June 1982 in respect of the site measuring 40' X 60' and Exhibit P4 dated 4th November 1981 which also relates to a site measuring 40' x 60'. The site covered under Exhibit P2 came to be sold for a sum of Rs. 6,000/- (Rupees six thousand only) and the market value of the said site per acre of land works out to Rs. 1,08,900/- (Rupees one lakh eight thousand nine hundred only). The sale consideration in respect of site covered under Exhibit P4 was shown as Rs. 8,000/-and the market value of the site per acre of land works out at Rs. 1,45,200/-. The Reference Court was of the view that since the land acquired relates to a large extent of 20 acres 1 gunta, it is necessary to deduct one third of the market value towards cost of digging, drainage and another one third for other expenses.
4. We heard Sri B.G. Sridharan and Sri Nanda Kishore learned Counsel appearing for the Committee, Sri K.P. Asokumar, learned Additional Government Advocate for the State and Sri C.S. Kothawale along with Sri L. Rajanna, learned Counsel appearing for the claimant.
5. The learned Counsel for the Committee and the learned Additional Government Advocate challenging the quantum of compensation determined by the Reference Court made two submissions. Firstly, they submitted that the Reference Court has seriously erred in law in taking into account the sale transaction referred to in Exhibit P2 dated 29th June 1982 in respect of the site measuring 40' X 60' and Exhibit P4 dated 4th November 1981 which also relates to the sale transaction of a site measuring 40' X 60', to determine the market value of the land in question. According to them, the sale transaction covered in Exhibits P2 and P4 referred to above relate to two sites measuring 40' X 60' and since the land acquired being a large extent measuring 20 acres 1 gunta, the Reference Court should have held that the sites covered in Exhibits P2 and P4 are not comparable lands to the lands acquired and therefore, on the basis of the sale consideration shown in Exhibits P2 and P4 the market value of the land in question cannot be determined. Therefore, they submit that if the said two sale transactions are rejected, there being no evidence adduced by the claimants to establish the market value of the land in question, the Reference Court ought to have rejected the claim made by the claimants for lack of evidence to support this claim. Secondly, they submitted that even if it is held that the market value referred to in the sale transaction Exhibits P2 and P4 could be taken into account to determine the market value of the land in question, the Reference Court ought to have determined the market value of the acquired land only on the basis of the sale consideration referred to in Sale deed Exhibit P2 and the Reference Court has seriously erred in law in taking the average of the sale consideration shown in both the sale deed Exhibits P2 and P4. In support of their submission, they relied upon the decision of Supreme Court in the case of FOOD CORPORATION OF INDIA, FARIDKOT, PUNJAB v. MAKHAN SINGH AND ANR., in the case of BASAVVA AND ORS. v. SPECIAL LAND ACQUISITION OFFICER AND ORS, in the case of HASANALI KHANABHAI AND SONS AND ORS. v. STATE OF GUJARAT, in the case of THE ASSISTANT COMMISSIONER, BIJAPUR v. SMT. SHIVALINGAWWA AND ANR., in the case of K.S. SHIVADEVAMMA AND ORS. v. ASSISTANT COMMISSIONER AND LAND ACQUISITION OFFICER AND ANR., and in the case of RAO NARAIN SINGH v. UNION OF INDIA., . Sri Nanda Kishore, learned Counsel for the Committee, further submitted that the Reference Court has seriously erred in law in giving deductions only up to the extent of 66 2/3 per cent. According to him, having regard to the location, nature and time that is required to be taken to develop the land in question, the Reference Court ought to have provided for a deduction to the extent of 85 per cent. In support of his submission that deduction up to 85 per cent is permissible in law, he relied upon the decision of the Supreme Court in the case of K.S. SHIVADEVAMMA AND ORS. v. ASSISTANT COMMISSIONER AND LAND ACQUISITION OFFICER AND ANR.
6. However, Sri Kothawale, learned Counsel appearing for the land owner-claimant while making a serious grievance that the judgment and award impugned is required to be modified and higher compensation should be awarded to the land acquired, submitted that the market value determined by the Reference Court is highly arbitrary, unreasonable and is on the lower side. According to him the Reference Court has seriously erred in law in making deduction of 66 2/3 per cent towards developmental charges of the land in question. According to him, in the facts and circumstances of the case the deduction could not have been more than one third of the market value towards developmental charges. In support of this submission, he relied upon the Full Bench decision of this Court in the case of THE ASSISTANT COMMISSIONER, SUB-DIVISION KARWAR AND ANR. v. SMT. KAMALABAI KOM LAXMAN METRI, AIR 1998 KAR. 147 in the case of KASTURI v. STATE OF HARYANA, in the case of UP AVAS EVAM VIKAS PARISHAD v. JAINUL ISLAM in the case of SPECIAL LAND ACQUISITION OFFICER, BANGALORE v. V.T. VELU AND ORS., 1966(2) SCC 538 and in the case of VIJAY-KUMAR MOTI LAL v. STATE OF MAHARASHTRA, . He also submitted that the Reference Court has also seriously erred in law in taking the average of the sale consideration shown in Exhibits P2 and P4. According to the learned Counsel, the Reference Court should have taken the sale consideration shown in Exhibit P4 dated 4th November 1981 and added 10 per cent appreciation to the market value referred to in the said sale deed Exhibit P4. In support of his submission that appreciation at 10 per cent for every subsequent year after the base year is required to be taken into consideration, he relied upon the decision of the Supreme Court in the case of SPECIAL LAND ACQUISITION OFFICER, BTDA, BAGALKOT v. MOHD. HANIF SAHIB BAWA SAHIB, . It is also his submission that when there are two or more sale transactions relied upon by the parties, the highest market value referred to in the sale transaction should be taken into account while determining the market value of the land acquired. In support of this submission, he relied upon the decision of Madras High Court in the case of THE STATE OF MADRAS v. P. SEETHARAMAMMAL AND ANR., and the decisions of the Supreme Court in the case of KRISHNA YACHENDRA BAHADURVARU v. THE SPECIAL LAND ACQUISITION OFFICER, CITY IMPROVEMENT TRUST BOARD, BANGALORE AND ORS.; in the case of RANJIT SINGH AND ORS. v. UNION TERRITORY OF CHANDIGARH., .
7. In the light of the rival contentions advanced by the learned Counsel appearing for the parties, the only question that would arise for our consideration in these appeals is what is fair and correct market value of the land acquired?
8. Now, we will proceed to consider each one of the contentions urged by the learned Counsel appearing for the parties on merits. As noticed by us earlier, while it is the contention of Sri Nandakishore and the learned Additional Government Advocate that the Reference Court has erred in law in relying upon Exhibits P2 and P4 to determine the market value of the land in question, it is the contention of Sri Kothawale that the Reference Court ought to have determined the market value only with reference to the sale consideration mentioned in Exhibit P4 and it should not have taken the average of the sale consideration mentioned both in Exhibits P2 and P4.
9. Now the question is, whether the sale transaction referred to in Exhibits P2 and P4 can be made as a basis to determine the market value of the land in question? The dimension of the sites covered in Exhibits P2 and P4 is 40' X 60'. The house sites covered under Exhibits P2 and P4 have been converted for non-agricultural purpose. According to the evidence of PW. 1, who is the vendor of site covered in Exhibit P4, the site covered under Exhibit-P2 is situated at a distance of 2-3 furlongs and the site covered under Exhibit P4 is situated at a distance of about one kilometer from the land in question. Further, the Land Acquisition Officer also in his award Exhibit-D 1 has found that the acquired land has the potentiality of being used for non-agricultural purpose and the same is situated within Athani Municipal limits. In this connection, it is useful to extract the finding recorded by the Land Acquisition Officer in his award-Exhibit-D 1, which reads as hereunder:
"...The present land proposed for acquisition abuts the gaothana limits and a part of this land has been converted into N.A. use. The land purposed for acquisition is fit for N.A. use as it is having NA. potentiality.
PW. 1 in his evidence has also stated that the acquired land has the potentiality of being used for non-agricultural purposes. PW.2 and PW.4 in their evidence have stated that the acquired land is situated within the limits of Athani municipality. Nothing substantial has been elicited in the cross-examination to discredit evidence of PW. 1, PW.2 and PW.4. Further, it is also necessary to notice that no one has been examined either on behalf of the beneficiary and also on behalf of the State to speak about the market value of the land in question. The Reference Court, on the basis of the evidence on record, has also found that the land in question has the potentiality of being used for non-agricultural purpose. Therefore, if the Reference Court has proceeded on the basis that the land in question has the potentiality of being used for non-agricultural purpose, we are of the view that the said conclusion cannot be found fault with by us in this appeal. Then the question is, whether the Reference Court was justified in taking the average of the sale consideration shown in Exhibits P2 and P4? In our view, as rightly pointed out by the Counsel appearing for the parties the Reference Court, in the facts and circumstances of the present case, was not justified in taking the average of sale consideration shown in sale deed Exhibits P2 and P4. It is because while determining the market value of the land acquired, it is only the genuine and bona fide sale transactions taken place between the willing purchaser and willing seller, which are proximate to the point of acquisition of the lands situated very close to the land acquired which are possessing similar value or utility, could be expected to reflect the correct market value. While the average of sale considerations shown in sale transactions, at times, may give a rough idea about the market value of the lands acquired, but the average price shown in two sale transactions, in our view, cannot be regarded as a price to be fixed by sale of acquired land. When there are more than one sale transaction, as noticed by us earlier, the Court has to consider the sale transactions which is more proximate in point of time to the land acquired and which is more nearer in comparison and similarity to the land acquired. The Supreme Court in the case of STATE OF PUNJAB AND ANR. v. HANSRAJ, SOHAN SINGH AND ORS., has taken the view that the method of working out the average price paid under different sale transaction should not ordinarily be resorted to. In this connection, it is useful to refer to the observation made by the Court at paragraph 4 of the judgment, which reads as follows:
"Having given our anxious consideration to the respective contentions, we are of the considered view that the learned Single judge of the High Court committed a grave error in working out average price paid under the sale transactions to determine the market value of the acquired land, if followed, could bring about a figure of price which may not at all be regarded as the price to be fetched by sale of acquired land. One should not have, ordinarily recourse to such method. It is well settled that genuine and bona fide sale transactions proximate to the point of acquisition of the lands situated in the neighbourhood of the acquired lands possessing similar value or utility taken place between a willing vendee and the willing vendor which could be expected to reflect the true value, as agreed between reasonable prudent persons acting in the normal market conditions are the real basis to determine the market value. The learned Single Judge did not adopt that method. As stated earlier, it is agreed between learned Counsel appearing for contesting parties that ExR-5 dated August 4, 1965 which works out to Rs. 78 per marla, could form the basis for the fixation of the market value of acquired land. On the basis of the said agreement and having regard to lapse of three years' time between the date of the purchase under Ex R-5 in August 1965 and the date of acquisition and sudden developmental activities in and around the acquired land, we are of the view that fixation of the market value of the acquired land @ Rs. 100 per marla would be just and reasonable. The respondent-claimants would be entitled to the proportionate solatium on the enhanced market value of land @ 15% and interest at 6% on the enhanced compensation from the date of taking possession of the land till payment. We do not propose to interfere with the determination of the market value of structure on the acquired land at Rs. 17,000 made by the learned Single Judge it is accordingly confirmed."
10. Now the next question is, if the market value is determined by taking the average of sale consideration mentioned in Exhibits P2 and P4 is not correct, out of the two sale transactions covered under Exhibits P2 and P4 which one of the said two transactions is required to be considered for determination of the market value of the land in question? No doubt, Sri Kothawale relying upon the decision of the Supreme Court in the case of SMT. RANI M. VIJAYALAKSHMAMMA RAO BAHADUR, RANEE OF VUYYUR v. THE COLLECTOR OF MADRAS, 1969(1) MADRAS LAW JOURNAL (SC) 45 reported in and also the decision of Madras High Court in the case of P. SEETHARAMAMMAL AND ANR. (supra), as noticed by us earlier, has asserted that the sale consideration shown in the Exhibit P4 should be made as the basis to determine the market value of the land in question. When there is difference in the sale consideration shown in two sale transactions, while determining the market value of comparable lands which are similarly and identically situated, the sale consideration shown in the sale transaction, which is on higher side, has to be generally preferred while determining the market value of the land acquired. In this connection it is useful to refer to the observation made by the Supreme Court in the case of RANEE OF VUYYUR, which reads as hereunder:
"...whatever that may be, it seems to us to be only fair that where sale deeds, pertaining to different transactions are relied on behalf of the Government, that representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course..."
11. From the observation made by the Supreme Court , what appears to our mind is that where there are more than one sale deed pertaining to different transactions are relied upon by the parties, the sale transaction representing the highest value should be preferred to the rest of the sale transactions while determining the market value of the land acquired unless there are strong circumstances justified relying upon the sale transactions which show lower market price. From the observation made by the Supreme Court, it is not possible to read, as contended by Sri Kothawale that in all circumstances when there are more than one sale transaction relied upon by the parties, the higher sale consideration shown in the deed alone must be preferred. Therefore, to put it differently, what follows from the observation made by the Supreme Court referred to above is that in the absence of any special features, if there are two sale transactions covering two items of lands which are similarly and identically situated and in all respects they are comparable to each other, the sale transaction, where the highest market value is fixed, is required to be preferred for determining the market value of the land acquired. As noticed by us earlier, the dimension of the site covered both under Exhibits P2 and P4 is 40' X 60'. The market value of the site covered under Exhibit P2 was Rs. 6,000/- which works out to Rs. 1,08,000/- per acre and the market value of the site covered under Exhibit P4 is Rs. 8,000/- which works out to Rs. 1,45,200/- per acre of land.
12. Now, we will proceed to examine, keeping in mind the principle enunciated by the Supreme Court referred to above, that out of two sale transactions covered under Exhibits P2 and P4, which of them is required to be preferred?
13. The evidence of the claimant, who has been examined as PW.2, shows that the land covered under Exhibit P2 is situated at about a distance of 2-3 furlongs from the land in question. Further, the said sale transaction had taken place on 29th June 1982. The preliminary notification was issued on 2nd December 1982. Even according to his evidence, the land covered under Exhibit P4 is situated at a distance of about one kilometre from the land in question and the same came to be sold on 4th November 1981, i.e. about 13 months prior to the date of the issue of preliminary Notification. Therefore, having regard to the proximity of the transaction that is covered under Exhibits P2 and P4 with reference to the date of issue of preliminary Notification and also the location of the sites covered under those two documents with reference to the land in question, we are of the view that it is safer to rely upon the market value shown in Exhibit P2 as a basis to determine the market value of the land in question. It is necessary to point out that while determining the market value, the Court has to carefully analyse the nature of the land covered under each sale transaction relied upon and depending upon the facts and circumstances of each case to determine the market value. The Application of any straight-jacket rule or formula enunciated by the Courts depending upon the facts of another case, may, on occasions, if the situation in the case of hand is not analysed, may not lend assistance to determine the correct market value of the land acquired. As observed by the Supreme Court in the case of HASANALI KHANABHAI AND SONS AND ORS. (supra) the Court is required to determine the correct market value after taking all the relevant circumstances and clearly applying its mind whether there is any distinguishing factor from each one of the sale transaction of comparable lands relied upon by the parties in support of their claim for determination of market value of the land acquired. In this connection it is useful to refer to the observation made by the Supreme Court in the said case at page 425 of the judgment, which reads as hereunder:
"But it is settled law by series of judgments of this Court that the Court is not like an umpire but is required to determine the correct market value after taking all the relevant circumstances, evinces active participation in adduction of evidence; calls to his aid his judicial experience, evaluate the relevant facts from the evidence on record applying correct principles of law which would be just and proper for the land under acquisition. It is its constitutional, statutory and social duty, the Court should eschew aside feats of imagination but occupy the armchair of a prudent willing but not too anxious, purchaser and always ask the question as to what are the prevailing conditions and whether a willing purchaser would as a prudent man in the normal market conditions offer to purchase the acquired land at the rates mentioned in the sale deeds. After due evaluation taking all relevant and germane facts into consideration, the Court must answer as to what would be the just and fair market value. These principles were enunciated by this Court in all decisions including the one relied on by Mr. Dholakia which needs no reiteration. It is a question of fact in each case to consider whether the land under acquisition lis possessed of such value which includes 1 potential value, if any, as comparable with reference to the evidence on record. It is seen that the sale instances referred and relied on by the High Court in Survey Nos. 334 and 335 are small pieces of land; they do not offer as comparable sales. This Court in Administrator General of W.B. V. Collector has settled the law that when sales of small lands are found to be germane sales in developed area between willing purchaser and willing vendor but not too anxious buyer the value of small developed plots cannot directly be adopted to fixing the price for large extent and is not a safe guide in valuing large extent of lands. However, if it is found that large extent to be valued admits of and is ripe for use of building purposes, that building lots could be laid out on the land could be a good selling proposition and that valuation on the basis of method of hypotheticol layout could with justification be adopted. Then in valuing such small layout any such valuation as included in the sales comparably small sites in some area at the time of notification would be relevant in such cases. Necessary deduction for the extent of the land required for the formation of the roads and other civic amenities requires to be made. In that case 50% was deducted."
13. Now the next question is, what should be the percentage of deduction that is required to be made while determining the market value of the land in question? The land acquired measures 20 acres 1 gunta. The land sold in Exhibit P2, as noticed by us earlier, is the site measuring 40' X 60'. There cannot be any dispute that the smaller sites fetch much higher price than large tract of land when they are sold. Further, when large tract of land is sold, if it has to be developed as house sites or industrial site or a layout is required to be formed out of the said land, a large extent of the land has to be set apart for formation of road, civic amenity sites, parks, etc. Further, to form a layout either as house sites or as industrial sites, substantial expenditure will have to be incurred towards developmental costs like the cost of formation of road, sewerage, water connection, electricity, development of park and for providing other civic amenities. Further, some provision also will have to be made for waiting period or for the time taken for development of large extent of land. The decisions relied upon by the learned Counsel appearing for the parties show that the Courts, depending upon the facts and circumstances of the case, have provided for deduction from 20 to 65 per cent.
In the case of ADMINISTRATOR GENERAL OF WEST BENGAL v. COLLECTOR, VARANASI the Supreme Court has observed that the market value of piece and property for the purpose of Section 23 of the Act, is the price at which the property changes hand from a willing seller to a willing, but not too anxious a buyer, dealing at arms length. In the said decision, the Court further observed that the price fetched for similar lands with similar advantages and potentialities under bona fide transactions of sale at or about the time of the preliminary notification are the usual, and indeed the best evidences of market value. In this connection, it is useful to refer to the observation made by the Court at paragraph 6 of the judgment which reads as follows:
"It is trite proposition that prices fetched for small plots cannot form safe bases for valuation of large tracts of land as the two are not comparable properties. (See Collector of Lakhmipur V.B.C. Dutta, ; Mirza Nausherwan kham v. Collector (Land Acquisition), Hyderabad, ; Padma Uppal v. State of Punjab, ;, Smt. Kaushalya Devi Bogra v. Land Acquisition Officer, Aurangabad . The principle that evidence of market value of sales of small, developed plots is not a safe guide in valuing large extents of land has to be understood in its proper perspective. The principle requires that prices fetched for small developed lots cannot directly be adopted in valuing large extents. However it is shown that the large extent to be valued does admit of and is ripe for use for building purposes; that building lots that could be laid out on the land would be good selling propositions and that valuation on the basis of the method of a hypothetical layout could with justification be adopted, then in valuing such small, laid out sites the valuation indicated by sale of comparable small sites in the area at or about the time of the notification would be relevant. In such a case, necessary deductions for the extent of land required for the formation of roads and other civic amenities; expenses of development of the sites by laying out roads, drains, sewers, water and electricity lines, and the interest on the outlays for the period of deferment of the realisation of the price; the profits on the venture etc, are to be made.
In the case of BRIG. SAHIB SINGH KALHA ETC. v. AMRITSAR IMPROVEMENT TRUST AND ORS., the Supreme Court observed thus.
"It is well settled principle of valuation that where there is a large area of undeveloped land under acquisition, provision has to be made for providing the minimum amenities of town life such as water connections, well laid-out roads, drainage facility, electric connections, etc. The process necessarily involves deductions of the cost of factors required to bring the undeveloped lands on a par with the developed lands. An extent of 20 per cent of the total land acquired is normally taken as reasonable deduction for the space required for roads. This is apart from the cost of laying roads themselves and the cost of providing other amenities like electricity, water, underground drainage etc. In Tribeni Devi v. Collector of Ranchi, , the Court allowed a deduction of 33 1/3 per cent towards the cost of development. The cost of development may range from 20 to 33 per cent depending on the nature of the land, its situation and the nature of the land, its situation and the stage of development etc.'
15. The observation made by the Supreme Court in the above case show that the deduction for land required for roads and other developments would go upto as much as 53 percent. The subsequent decisions of the Supreme Court fairly reiterated the same position. It may be useful to refer to some of them.
In the case of BASAWA AND ORS. (supra) the Supreme Court has taken the view that the deduction for development charges up to 53 per cent is valid. However, in the facts of the said case, since the land acquired would take long time for development, additional deduction of 12 per cent i.e. 53 + 12 per cent, in all 65 per cent, in determination of the compensation was approved by the Supreme Court. In the said case, the Supreme Court , after referring to the decision of Supreme Court in the case of K. VASUNDARA DEVI v. REVENUE DIVISIONAL OFFICER, LAO, , at p. 3 of the judgment has observed that in the first instance when the Court is satisfied with the sale transactions relied upon are genuine and reliable and the lands covered under the sale transaction relied upon have comparable features, sufficient deduction should be made to arrive at just and fair market value of large tract of land acquired; and the time lag for real development and waiting period of development are also relevant consideration, the Court is required to take into account while determining the just and fair market value. The Court further observed that each case has to be deduced depending upon special features of each case and for deduction of development charges, the nature of development and condition and nature of the land, the land required to be set apart under the Building Rules for roads, sewerage, electricity, parks, water, etc., and all other relevant circumstances involved are required to be kept in mind by the Court while determining the market value of the land acquired.
In the ease of K. VASUNDARA DEVI (supra), the Supreme Court upheld 40 per cent deduction.
In the case of KASTURI (supra), the Supreme Court after reviewing its earlier decisions, having regard to the facts of that case, approved the deduction of only 20 per cent towards developmental charges. It is useful to refer to paragraph 14 of the judgment wherein it is observed thus:
"On facts and in the light of the legal position emerging from the various decisions referred to above, it is not possible for us to say that out of 20% adopted by the learned Single Judge as affirmed by the Division Bench in the impugned judgment is wrong or unsustainable. It appears to us having regard to facts and circumstances of the case that the High Court has applied out of 20% as against the normal 1/3 deduction. We find that the High Court was right and justified in doing so."
In the case of UP AVAS EVAM VIKAS PARISHAD (supra) the bench of three Judges of the Supreme Court upheld the deduction of one third of the price towards cost of development for the housing scheme involving construction of roads and other amenities, etc. However, in the case of SHIVADEVAMMA (supra), relied upon by Sri Nanda Kishore, the Supreme Court, having regard to the special features of that case has approved the deduction made by the High Court up to 86 1/3 per cent. That has been approved on the ground that in that case under the Building Rules, 53 per cent of the land was required to be left out and facts of that case indicated that no developmental activity had taken place on the land acquired. In that context the Supreme Court, as noticed by us earlier, has approved the deduction of 53 per cent towards formation of road and other amenities and further 33 1/3rd per cent towards developmental charges. It is Clear from the observation made at paragraph 10 of the judgment, which reads as hereunder:
"10. It is then contended that 53% is not automatic but depends upon the nature of the development and the state of development. We are inclined to agree with the learned Counsel that the extent of deduction depends upon development need in each case. Under the Building Rules 53% of land is required to be left out. This Court has laid a general rule that for laying the roads and other amenities 33 1/3% is required to be deducted Where the development has already taken place, appropriate deduction needs to be made. In this case, we do not find any development had taken place as on that date. When we are determining compensation under Section 23(1), as on the date of notification under Section 4(1), we have to consider the situation of the land development, if already made, and other relevant facts as on that date. No doubt, the land possessed potential value, but no development had taken place as on the date. In view of the obligation on the part of the owner to hand over the land to the City Improvement Trust for roads and for other amenities and his requirement to expend money for laying the roads, water supply mains, electricity, etc, the deduction of 53% and further deduction towards development charges @ 33-1/3%, as ordered by the High Court, was not illegal."
16. The Supreme Court has taken the view that a particular percentage of deduction is not automatic and the percentage of deduction is required to be made depending upon the stage and nature of the development and location of the land and percentage of deduction has to be made depending upon the facts and circumstances of each case keeping in mind the building by-laws or building regulations governing formation of layout which requires the percentage of the land to be left as open space for parks, roads and other civic amenity sites and the amount required to be spent towards formation of roads, sewerage, water connection, underground drainage, etc.
17. From the principle enunciated by the Supreme Court referred to above and other decisions which are considered in the decisions referred to by us above, the percentage of deductions required to be made while large tract of land is acquired, generally varies from 33 1/3 to 65 per cent; and the same has to be determined depending upon the facts of each case taking into account the relevant circumstances like the purpose for which the land is acquired, the percentage of land required to be set apart for road, civic amenity sites, as per the bye law governing the land acquired, waiting period for the development of the land in question if it is to be formed as a lay-out and sold either as a house site or as industrial site, the developmental activities that has already come up surrounding the land in question and such other relevant circumstances.
18. Keeping the above principle in mind, we will now proceed to consider what should be the percentage of deduction that should be provided for while determining the market value of the land in question. The land in question has been acquired for the purpose of extension of APMC yard. Therefore, it is clear that the land in question is situated touching the existing APMC yard. The evidence of PW.2 and PW.4 show that the land in question is situated within the limits of Athani Municipality, which is the Taluk headquarter of Athani Taluk. Their evidence also gets support from the observation made by the Land Acquisition Officer in his Award Exhibit D 1. The site sold in Exhibit P2 is situated at a distance of 2-3 furlongs from the land in question. Therefore, it is clear that the land in question is located in a developed area though the land in question, as such, has not been developed as a layout. Under these circumstances, we are of the view that it is fair and reasonable to provide 50 per cent deduction out of the market value of the site covered under Exhibit P2 to determine the market value of the land in question. As noticed by us earlier, the market value per acre of land sold in Exhibit P2 will work out at Rs. 1,08,900/ - Rupees one lakh eight thousand nine hundred only). If 50 per cent is deducted towards developmental costs, the market value of the land per acre will be Rs. 54,450/- (Rupees fifty four thousand four hundred and fifty only). Therefore, we are of the view that it would be fair and reasonable to fix the market value of the land in question at Rs. 54,450/ - as against Rs. 50,000/- fixed by the Reference Court. Accordingly, we modify the judgment and award dated 17th December 1998 passed in LAC No. 224/89 by the Reference Court and enhance the market value to Rs. 54,450/-. Further, it is also made clear that the claimant-owner will also be entitled for statutory benefits like solatium and interest on additional market value.
19. In the light of the discussion made above, MFA No. 1970 of 1999 filed by the Committee is hereby dismissed, however, without costs. The Miscellaneous First Appeal No. 3448 of 2000 filed by the claimant-owner is partly allowed in terms stated above with proportionate costs.