Bombay High Court
President/Secretary, Agricultural ... vs Ashok Vyanktesh Avatade And 5 Ors. on 22 July, 2025
2025:BHC-NAG:7831
1 fa608.2009..odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
FIRST APPEAL NO. 608 OF 2009
President/Secretary,
Agricultural Produce Marketing
Corporation (A.P.M.C.),
Chamorshi, Tahsil Chamorshi,
District Gadchiroli .....APPELLANT
...V E R S U S...
1. Ashok Vyankatesh Avatade,
Aged 55 yrs, occ. Service,
2. Anil Vyankatesh Avatade,
Aged 52 yrs, occ. Service,
3. Arvind Vyankatesh Avatade,
Aged 48 yrs, occ. Business,
4. Surekha Chandrakant Puranik,
Aged 45 yrs, Occ. Household,
5. Smt. Lilabai Vyanktesh Avatade, .... (Deleted)
Aged 72 yrs, Occ. Nil
Respondent No.1 r/o Bhadrawati,
Ordinance Factory Colony, Bhadrawati,
Tah. Bhadrawati, Dist. Chandrapur.
Respondent No. 2 r/o. Rampur Ward,
Gadchiroli, Tah. Dist. Gadchiroli
Respondent No. 3&5 r/o Chamorshi,
Tah. Chamorshi, Dist. Gadchiroli,
Respondent No. 4 r/o Shankarnagar
(Gundewar Complex) Nagpur,
Tahsil District Nagpur
2 fa608.2009..odt
6. State of Maharashtra,
through the Collector and Special
Land Acquisition Officer (General),
Gadchiroli .....RESPONDENTS
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Mr. S.S. Ghate, Advocate a/b Mr. Devdatta Sukhdev, Advocate for
appellant.
Mr. S.P. Bhandarkar, Advocate with Mr. G.S. Singh, Advocate for respondent
Nos. 1 to 4.
Ms. H.S. Dhande, AGP for respondent no. 6/State.
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CORAM:- ABHAY J. MANTRI, J.
DATE : 22.07.2025
ORAL JUDGMENT
Original respondent No. 2 - acquiring body, being aggrieved by the judgment and order dated 27.02.2009, passed by Civil Judge Senior Division, Gadchiroli (for sake of brevity, " the Reference Court") whereby reference was allowed, has preferred this appeal.
2. Brief facts of the case are as follows:
Respondent Nos. 1 to 5 were the original owners and possessors of 12 R of land out of Survey No. 1096 and 67R of land out of Survey No. 1097 of the village Chamorshi. Respondent No. 6 has issued a notice dated 25.08.2003 under Section 4(1) of the Land Acquisition Act, 1894 (hereinafter referred to as " the Act") for the acquisition of land in the village of Chamorshi for the construction of
3 fa608.2009..odt a Market Yard of the Agricultural Produce Market Committee. (for short,- 'APMC') Pursuant to the notification, the appellant had acquired land to the extent of 12 R of land. Accordingly, Land Acquisition Officer ("LAO") passed the Award on 30.08.2005 and awarded compensation to the tune of Rs. 2,55,591/-, which was received by the respondent Nos. 1 to 5. Being dissatisfied with the said Award, respondents Nos. 1 to 5 preferred reference before the Reference Court. The Reference Court, after considering the material before it, allowed the reference vide order dated 27.02.2009 and awarded an amount of Rs. 84,000/- for 12 R land @ Rs. 70/- per Sq. Mtr. as per ready reckoner rate of the year 2003 and Rs. 7,04,000/- for 67 R land in Survey No. 1097 @ Rs. 110 per Sq. Mtr. as per the ready reckoner rate of 2003. Being aggrieved by the said judgment and order, the appellant has preferred this appeal.
3. Heard Mr. S.S. Ghate, Advocate a/b Mr. Sukhadev, learned counsel for appellant, Mr. S.P. Bhandarkar, Advocate with Ms. Singh, learned counsel for respondent Nos. 1 to 4 and Ms. Dhande, learned AGP for respondent No. 6, and perused the impugned judgment, record and proceedings as well as the judgments relied upon by the respective parties. Having considered the same, the following points 4 fa608.2009..odt arise for my determination.
"Whether the impugned judgment is just and proper? "Whether interference is required in the judgment and order impugned?
4. It is to be noted that during the pendency of the proceedings, respondent No. 5, Lilabai, has expired. Therefore, her name is deleted from the array of respondents vide order dated 20.03.2023.
Learned counsel for respondent Nos. 1 to 4 has fairly submitted that they have not adduced evidence before the Reference Court nor produced an authentic copy of the ready reckoner in support of their contentions.
5. Learned counsel for the appellant vehemently contended that the learned Reference Court has erred in considering the rate of the land to the tune of Rs. 70/- per Sq. Mtr. and Rs. 110/- per Sq. Mtr.
As per the rate of ready reckoner when undisputedly the nature of land was agricultural land and not non-agricultural land and therefore, finding recorded by learned Reference Court in that regard is contrary to the settled position of law that determination of the valuation of the agricultural land has to be considered according to sale instances and valuation of land has to be for per hector
5 fa608.2009..odt instead considering the same based on valuation of the land for per Sq. Mtr. Therefore, he emphatically submitted that the finding recorded by the Reference Court without considering the evidence on record is contrary to the settled position of law, which cannot be sustained in the eyes of the law. Learned counsel has taken me through paragraph Nos. 7.3, 9 to 11 and 15 of the judgment in Bharat Sanchar Nigam Limited Vs. Nemichand Damodardas and anr (2022)14 SCC 60 ("Bharat Sanchar Nigam") and submitted that the basic valuation of the land has to be determined based on the market rate. Learned Reference Court failed to consider the evidence on record and enhanced the compensation, observing that the calculation made by the LAO is incorrect. For that he submitted that the reference Court cannot sit against the Award and therefore, Court cannot take into account the material relied upon by the LAO in his Award unless the same is produced and proved before the Court, therefore, he submits that in view of the mandate above, the Reference Court ought not to consider the material which has been produced before the LAO, while determining the reference under Section 18 of the Act, hence, he urged that the judgment and order passed by the Reference Court is perverse and contrary to the settled position of law and is liable to be set aside. To buttress his 6 fa608.2009..odt submissions, he has relied on the following judgments:
i) Jawanjee Nagnatham Vs. Revenue Divisional Officer, Adilabad, AP and Ors (1994)4 SCC 595 ("Jawanjee Nagnatham")
ii) Bharat Sanchar Nigam Limited Vs. Nemichand Damodardas and anr (2022)14 SCC 60)
iii) Village Panchayat of Collem Vs. Madhukar Y. Mordekar and anr, 2017(1) Mh. L.J. 915.
iv) Chimanlal Hargovinddas Vs. Special Land Acquisition Officer, Poona and Anr (1988)3 SCC 751 (" Chimanlal Hargovinddas")
v) Krishi Utpadan Mandi Samiti Sahaswan Vs. Bipin Kumar, 2004(2) SCC 283 ("Krishi Utpadan Mandi ").
vi) Laxman Tatyaba Kankate and anr Vs. Taramati Harishchandra Dhatrak (2010)7 SCC 717;
vii) Banarasi and Others Vs. Ram Phal, (2003)9 SCC 606.
6. Per contra, learned counsel for respondent Nos. 1 to 4 has submitted that the judgment and order passed by the Reference Court is just and proper, which requires no interference at the hands of this Court. He has strenuously argued that no sale instances were available before the LAO. Hence, he has considered the ready reckoner rate as the basis to grant compensation, and no fault could be found in considering the ready reckoner rate in the absence of sale instances or material evidence. The Court has to award compensation based on the guess work and therefore, he has canvassed that the finding recorded by the Reference Court is just 7 fa608.2009..odt and proper.
7. During the argument, he has taken me through Exhibit 57, i.e. the letter issued by Sub-Registrar, Chamorshi, in favour of the applicant and also taken me through the Award passed by LAO and submitted that based on the observations made in the Award by the LAO, the Reference Court has considered the same and only corrected the arithmetical mistakes which the LAO committed; therefore, the question of adducing evidence does not arise. He has also pointed out Exhibit 63 and submitted that the Sub-Divisional Officer has informed the respondents that no permission for non- agricultural use was granted. He has also taken me through the Index-2 Exhibit Nos. 58 to 61 and submitted that respondents have adduced evidence before the Reference Court and therefore, based on the said evidence, the Reference Court has awarded the compensation; hence, no interference is required in the appellate jurisdiction of this Court. To buttress his submissions, he has relied on the following judgments:
i) Ambya Kalya Mhatre (dead) thr Lrs and ors Vs. State of Maharashtra, (2011)9 SCC 325;
ii) New Okhla Industrial Development Authority Vs. Harnand Singh (deceased) thr Lrs and ors(2024 SCC OnLine SC 1691;
iii) Annasaheb s/o Sambhajirao Deshmukh Vs. State of
8 fa608.2009..odt Maharashtra and anr (2018(6) Mh.L.J. 66;
iv) Joaquim Paulo Furtado and Anr Vs. Land Acquisition Officer, Goa and anr(2011(2)Mh.L.J. 838;
v) Attar Singh and anr Vs. Union of India and anr [(2009)(9) SCC 289];
vi) Atma Singh (dead) thr Lrs and Ors Vs. State of Haryana and anr (2008)2 SCC 568;
vii) Ramanlal Deochand Shah Vs. State of Maharashtra and anr (2013) 14 SCC 50.
8. After considering the decisions in " Jawanjee Nagnatham, Chimanlal Hargovinddas and Krishi Utpadan Mandi Samiti (supra) the Hon'ble Apex Court in paragraph 10 of Bharat Sanchar Nigam (supra) has observed and held that the amount of compensation for land under the Land Acquisition Act is determined by adopting the method of valuation namely (i) opinion of the experts, (ii) the price paid within a reasonable time in bona fide transactions of purchase of the land acquired and (iii) a number of years purchase of the actual land acquired and possessing similar advantage.
9. In paragraph 11, consider the observations made in para 5 of the Jawajee and reproduced, which reads thus:
"11. Thereafter, this Court considered whether the Basic Valuation Register would form the foundation to determine the market value. While negating the same and accepting the view taken by the High Court that the entries under the Basic Valuation Register cannot form the basis to enhance the market value, it is observed and held in paragraph 5 as under : (Jawajee Nagnatham case SCC pp 599-62) 9 fa608.2009..odt "5. The question, therefore, is whether the Basic Valuation Register is evidence to determine the market value. This Court in LAOv. T. Adhinarayan Setty in para 9 held that the function of the Court in awarding compensation under the Act is to ascertain the market value of the land at the date of the notification under Section 4(1). The methods of valuation may be (1) opinion of experts (2) the price paid within a reasonable time in bona fide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages; and (3) a number of years purchase of the actual or immediately prospective profits of the lands acquired. The same was the view in Tribeni Devi v. Collector of Ranchi. It was reiterated in a catena of decisions, vide Periyar and Pareekanni Rubbers Ltd. v. State of Kerala. Therefore, it is settled law that in determining the market value, the Court has to take into account either one or the other three methods to determine market value of the lands appropriate on the facts of a given case to determine the market value. Generally, the second method of valuation is accepted as the best. The question, therefore, is whether the Basic Valuation Register would form the foundation to determine the market value. The Indian Stamp Act, 1899, provides the power to prescribe stamp duty on instruments, etc. Entry 44 of List III, Concurrent List, of the VIIth Schedule read with Article 254of the Constitution empowers the State Legislature to amend the Indian Stamp Act, 1899.
(Emphasis Supplied)
10. It is observed by the Hon'ble Apex Court, after considering the judgments in Jawanjee Nagnatham, Chimanlal Hargovinddas and Krishi Utpadan Mandi Samiti (supra) which were relied upon by the learned counsel for respondent has held that it is settled law that in determining the market value, the Court has to take into account either one or the other three methods to determine market value of the lands appropriate on the facts of a given case to determine the market value. Generally, the second method of valuation is accepted as the best. The question, therefore, is whether the Basic Valuation Register would form the foundation to determine the market value.
10 fa608.2009..odt It is further held that the prices mentioned in the ready reckoner for the purpose of stamp duty, which are fixed for the entire area, cannot be the basis for the determination of the compensation under the Land Acquisition Act.
11. Moreover, in paragraph 15, it has taken into consideration the broad principles laid down in Chimanlal Hargovinddas (supra), to be followed in the case of determination of compensation, which reads thus:
"15.........
"4. The following factors must be etched on the mental screen:
(1) A reference under Section 18 of the Land Acquisition Act is not an appeal against the award, and the court cannot take into account the material relied upon by the Land Acquisition Officer in his award unless the same material is produced and proved before the court .
(2) So also, the award of the Land Acquisition Officer is not to be treated as a judgment of the trial court open or exposed to challenge before the court hearing the reference. It is merely an offer made by the Land Acquisition Officer, and the material utilised by him for making his valuation cannot be utilised by the court unless produced and proved before it . It is not the function of the court to sit in appeal against the award, approve or disapprove its reasoning, or correct its error or affirm, modify, or reverse the conclusion reached by the Land Acquisition Officer, as if it were an appellate court.
(3) The court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it.
(4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in the court. Of course, the materials placed and proved by the other side can also be taken into account for this purpose.
(5) The market value of land under acquisition has to be determined as on the crucial date of publication of the notification under Section 4 of the Land Acquisition Act (dates of 11 fa608.2009..odt notifications under Sections 6 and 9 are irrelevant).
(6) The determination has to be made standing on the dateline of valuation (date of publication of notification under Section 4) as if the valuer is a hypothetical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price. (7) In doing so by the instances method, the court has to correlate the market value reflected in the most comparable instance , which provides the index of market value.
(8) Only genuine instances have to be taken into account . (Sometimes instances are rigged up in anticipation of the acquisition of land.) (9) Even post-notification instances can be taken into account (1) if they are very proximate, (2) genuine, and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects.
(10) The most comparable instances out of the genuine instances have to be identified on the following considerations:
(i) proximity from time angle,
(ii) proximity from the situation angle.
(11) Having identified the instances which provide the index of market value, the price reflected therein may be taken as the norm, and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-à-vis land under acquisition by placing the two in juxtaposition.
(12) A balance sheet of plus and minus factors may be drawn for this purpose, and the relevant factors may be evaluated in terms of price variation as a prudent purchaser would do.
(13) The market value of the land under acquisition has to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors.
(14) The exercise indicated in clauses (11) to (13) has to be undertaken in a common-sense manner, as a prudent man of the world of business would do. We may illustrate some such illustrative (not exhaustive) factors:
12 fa608.2009..odt Plus factors Minus factors 1 Smallness of size 1 Largeness of area 2 Proximity to a road 2 Situation in the interior at a distance from the road..
3 Frontage on a road 3 Narrow strip of land with very small frontage compared to depth 4 Regular shape 4 Lower level requiring the depressed portion to be filled up 5 Regular shape 5 Remoteness from a developed locality 6 Level vis-à-vis land under 6 Some special acquisition disadvantageous factor that would deter a purchaser"
7 Special value for an owner of an adjoining property, to whom it may have some very special advantage.
(Emphasis Supplied) On perusal of the principles 1 and 2 laid down as above, it is evident that the reference under Section 18 of the Act is not an appeal against the award, and the court cannot take into account the material relied upon by the LAO in his award unless the same is produced and proved by the parties before the Court. Similarly, it reveals that it is not the opinion of the Court to sit in appeal against the Award, approve or disapprove its reasoning, correct its error, or affirm or modify the reasoning conclusion reached by the LAO as if it were an appellate Court.
13 fa608.2009..odt
12. Learned counsel for appellant forcefully argued that appellant's case is covered by principles Nos. 1 and 2 and drew my attention to the findings recorded by the Reference Court without appreciating the evidence on record, held that LAO incorrectly calculated the compensation while passing of the award, therefore, had enhanced the compensation. He drew my attention to paragraph 16 of the judgment and submitted that the Reference Court has erred in awarding the compensation based on the ready reckoner rate of the year 2003, which is contrary to the settled position of law, and therefore, submitted that said finding cannot be sustained in the eyes of the law.
13. On perusal of the impugned judgment, it is apparent that the Reference Court has not considered the evidence adduced by the respondents in its proper perspective and observed that the Reference is glaring example of callous and negligent approach of LAO while making a simple arithmetical calculations, the LAO considered the ready reckoner rate as a proper rate while passing the award but his wrong calculation of area erred the entire calculation of the land. There is no obstacle referred to in the Award for granting the benefit as per the rates shown in the ready reckoner.
14 fa608.2009..odt The said finding of the Reference Court appears contrary to the mandate in the case of Bharat Sanchar Nigam Limited (supra) that the Reference Court was not sitting in an appeal against the award to approve or disapprove its reason or correct its error or affirm, modify, or reverse the conclusion reached by the LAO. Likewise, the Reference Court cannot take into account the material relied upon by the LAO in his award unless the same was produced and proved before it. But the Reference Court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it.
14. The impugned judgment indicates that the Reference Court, though in paragraph 9 of the judgment referred to the documents relied upon by the respondents, did not consider those documents nor give a finding on them, but only observed that LAO has committed an arithmetical error while calculating the compensation as per the ready reckoner rate. However, the ready reckoner rate referred to in the Award has been taken into consideration and has enhanced the compensation. Undisputedly, none of the parties had produced the ready reckoner rate before the Court to consider the same, nor had the LAO taken into consideration while determining 15 fa608.2009..odt the compensation. Therefore, in view of the mandate laid down in Bharat Sanchar Nigam Limited (supra), the Reference Court cannot take into consideration the said ready reckoner rate while passing the judgment as the same was not produced and proved before it. Thus, the said finding of the Reference Court appears contrary to the settled position of law. On that count alone, the impugned judgment is liable to be quashed and set aside.
15. The fact remains that the respondents in support of their claim have produced documents from Exhibit Nos. 59 to 80, out of which Exhibit Nos. 52,53, 54, 57 to 61, 63, 64 were produced to demonstrate the valuation of the lands in the said area. However, the Reference Court has not considered those documents nor given a finding on them. It was incumbent on the Reference Court to consider and deal with those documents and record a finding on the same, but it has failed to do so. In that situation, in my view, for proper consideration of said documents, the matter is required to be remanded back to the Reference Court.
16. At this stage, learned counsel for appellant submitted that the judgments in Village Panchayat of Collem (supra), Laxman Tatyaba 16 fa608.2009..odt Kankate and anr (supra) and Banarasi and Others (supra) are not relevant in respect of the land acquisition proceedings. Therefore, he is not relying on them. At this stage, learned counsel for the parties relied on the judgment in Jawanjee Nagnatham (supra) and Chimanlal Hargovinddas (supra), which were already considered by the Hon'ble Apex Court in Bharat Sanchar Nigam Limited (supra), and therefore, what has been held in those matters has been considered in Bharat Sanchar Nigam Limited.
17. The learned counsel for respondents relied on the judgment in Ambya Kalya Mhatre (supra) and pointed out paragraph 27 of the same, which is not at all relevant to determine the controversy in the facts of the case at hand, and therefore, the finding recorded in paragraph 27 of said judgment is hardly of any assistance to the respondents.
a) In case of Joaquim Paulo Furtado and Anr (supra) and Attar Singh and anr (supra) this Court has held that valuation of the acquired land is to be determined regarding the sale price of the neighbouring agricultural land, however, in the case in hand, the applicants have not produced any sale instances of the agricultural land but the copies of Index 2 register produced on record. Index 2 17 fa608.2009..odt register was in respect of house properties or non-agricultural land. Undisputedly, the land in the present case is agricultural land and therefore, the observations in the said case are not helpful to the respondents. Apart from that, the learned Reference Court has not considered any of the documents produced by respondents, and therefore, the observations made in both judgments are not helpful to them in support of their case.
b) In New Okhla Industrial Development Authority (supra), he points out observations in paragraphs 11, 12, and 31 to 40 and submits that the Court can use the principle of guesstimation in reasonably estimating the value of the land in the absence of direct evidence; the exercise ought not to be purely hypothetical. The respondents failed to produce any sale instances in support of their claim to grant enhanced compensation, nor were the same considered by the Reference Court, and therefore, the observations in the said judgment are hardly of any assistance to him.
c) In Annasaheb s/o Sambhajirao Deshmukh Vs. State of Maharashtra and anr (supra), this Court has observed that the Index-2 registered documents have to be taken into consideration while determining the valuation of the land. It is to be noted that respondents have not filed any Index 2 register in respect of 18 fa608.2009..odt agricultural land, but the Index 2 that they filed were in respect of house property or non-agricultural land, and therefore, in my view, the observations made in that judgment are not helpful to him.
d) In Ramanlal Deochand Shah Vs. State of Maharashtra and anr (supra), the Hon'ble Apex Court, in paragraph 16, has categorically observed as under:
"16 The failure or the omission to lead evidence to prove the claim appears in the above context to be a case of some kind of misconception about the legal requirement as to evidence needed to prove cases of enhancement of compensation. We do not, in that view, see any reason to deny another opportunity to the landowners to prove their cases by adducing evidence in support of their claim for enhancement. Since, however, this opportunity is being granted ex debito justitiae, we deem it fit to direct that if the Reference Court eventually comes to the conclusion that a higher amount was due and payable to the appellant landowners, such higher amount including solatium due thereon would not earn interest for the period between the date of the judgment of the Reference Court and the date of this order. These appeals are with that direction allowed, the judgments and orders impugned in the same modified to the extent that while the enhancement order by the Reference Court shall stand set aside, the matters shall stand remanded to the Reference Court for a fresh disposal in accordance with law after giving to the landowners opportunity to lead evidence in support of their claims for higher compensation. No costs."
It is worth noting that the learned Reference Court, though it referred the documents relied on by the respondent Nos. 1 to 3 in support of their case, failed to consider and appreciate the same. The Reference Court has not given any finding on those documents whether they are admissible in evidence or helpful in support of the case of appellant but only relied on the observations in the judgment 19 fa608.2009..odt of the Reference Court about price of land based on ready reckoner has enhanced compensation which is not permissible as per the settled position of law laid down in various judgments of the Hon'ble Apex Court and therefore, in my view, the impugned judgment cannot be sustained in the eyes of law and matter is liable to be remanded to the Reference Court for fresh disposal. Thus, I answer points No. 1 in the negative and 2 in the affirmative.
18. As a result, the appeal is allowed. The impugned judgment and order passed by the Reference Court are quashed and set aside, and the matter is remanded back to the Reference Court for fresh consideration, in accordance with law, after allowing both parties to lead evidence, if any, in support of their claims. The parties are directed to appear before the Reference Court on 02.09.2025. The Reference Court should dispose of the matter as early as possible, within one year from the date of appearance of the parties. The amount deposited by the appellant shall be transferred to the learned Reference Court. It shall be kept in fixed deposit in any Nationalised bank till the disposal of the reference proceedings.
(ABHAY J. MANTRI, J.) Belkhede