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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2931 (N) of 1981.

From the Judgment and Order dated 7.10.1980 of the Madhya Pradesh High Court in Miscellaneous First Appeal No. 78 of 1974.

L.M. Singhvi, D. Bhandari and A.K. Sanghi for the Appellant. T.S. Krishnamurthy Iyer and S.K. Gambhir for the Respondent. The Judgment of the Court was delivered by K.N. SAIKIA, J. This Civil Appeal by special leave is from the order dated 7.10.1980 of the High Court of Madhya Pradesh, Jabalpur in Misc (F) Appeal No. 78 of 1974, allow- ing the appeal and enhancing compensation for land acquired by the Improvement Trust, Bhopal.

The Improvement Trust, Bhopal, hereinafter referred to as 'the Trust', acquired 152 acres of land of Village Jamal- pura by Notification dated 30th April, 1965 issued under Section 68 of the Madhya Pradesh Town Improvement Trust Act, 1960, hereinafter referred to as 'the Act', and took posses- sion of the land sometimes in June, 1967. Out of these acquired land the instant appellant owned 12.62 acres where- upon stood a house, a well and some trees. The whole of the acquired land including that of the appellant was within the limits of Bhopal Municipal Corporation. On 25.3.1966 Notifi- cation under Section 71 of the Act was issued vesting the land in the Trust. The Trust offered compensation at the rate of Rs.950 per acre (@ 14 paise per sq. ft.) amounting to Rs.11,997.00; for the well Rs.3,108; and for the trees Rs.815 and for compulsory acqui- sition 15% amounting to Rs.2,400. The appellant made refer- ence, No. 8 of 1970 to the Compensation Tribunal under Section 72(3) of the Act. The Tribunal awarded compensation at the rate of Rs.6,000 per acre (Rs.0.28 Paise per sqr. ft.) for the land, Rs.5,000 for the building, Rs.3,000 for the well and Rs.815 for the trees. Thus the Tribunal by its award dated 25th November, 1972 awarded a total sum of Rs.1,20,060 inclusive of interest as compensation to the appellant, as against his claim at the rate of Rs.20,000 per acre for the land, Rs.20,000 for the building, Rs.5,000 for the well, Rs.2,500 for the trees and Rs. 10,000 for loss of business and earnings, his total claim amounting to Rs. 13,39,560. On appeal, being Misc. (F) Appeal No. 78 of 1974, the High Court maintained the award in respect of the Build- ing, well and the trees, but enhanced the compensation in respect of the land determining the market value at Rs. 12,000 per acre and the total area being 12.62 acres the total compensation inclusive of that allowed for the house etc. and 15% solatium worked out to Rs. 1,84,293. Dissatis- fied, the appellant obtained leave and filed this appeal. Dr. L.M. Singhvi learned counsel for the appellant submits, inter alia, that the house and the well were gross- ly undervalued; that both the Tribunal as well as the High Court misdirected themselves in treating the land as agri- cultural land but not as urbanised developed land on the erroneous ground that there was no building activity of substantial nature at the time of acquisition in spite of the fact that a part of the land was already converted to Abadi, that both the Tribunal as well as the High Court failed to take into consideration the potential value of the land; and that evidence of sales of similar plots was not accepted on the ground that those pertained to small plots; and that the High Court committed an error when it deducted the development charge from the agreed price instead of adding it to the agreed price while calculating the market value.

The value of the potentiality has to be determined on such materials as are available and without indulgence in fits of the imagination. In Mahabir Prasad Santuka v. Col- lector, Cuttack, [1987] 1 S.C.C. 587 the evidence on record was that the land was being used for agricultural purposes but it was fit for non-agricultural purposes and it had potentiality for future use as factory or building site and that on industrialisation of the neighbouring areas the prices increased tremendously, and that aspect, it was held, could not be ignored in determining compensation. On the question as to whether the land was urbanised developed land or not we find that the Tribunal consolidated all the 15 references arising out of the acquisition for the purpose of recording evidence and, that is, how it came to consider the Exts. P-1, P-2, P-3, and P-8 being agreements of sale executed by Phool Chand Gupta who was father of the claimant in reference No. 1 of 1970 while the petitioners reference was No. 8 of 1970. Similarly the Ext. D-1 to D-6 also pertained to small plots of land out of land in refer- ence No. 1 of 1970. The High Court rightly held that the Exts. P-1, P-2, P-3 and P-8 and the sale deeds Exts. D-1 to D-6 furnished a more reliable data for working out the market value. If those lands were the urban developed house site lands, their prices would have reflected the same. It cannot, therefore be said that High Court was in error in taking the above Exts. into consideration. However, poten- tial value was not separately considered. Exts. P-1, P-2, P-3 and P-8 were agreements of sale executed on 29th July, 1961 in respect of small parcels of land wherein the vendor agreed to sell the land at that time at the rate of 14 annas per sqr. ft. to Rs. 1 per sqr. ft. It was further agreed that the vendees would pay development charges at the rate of 4 annas per sqr. ft. The vendor and the respective vend- ees were examined- It should be noted that the Exts. were agreements to sell and not sales. The High Court observed. that the idea behind those transactions was that the vendor would apply to the revenue authority for diversion and the town planning authority for sanction of lay-out plan and the sale deeds would be executed after the land was developed. The High Court also noted that there was nothing to show that the agreements were prepared only to be used later as evidence of market value. In Decem- ber 1960 Phool Chand Gupta applied for diversion of his land to the Sub-Divisional Officer. In January 1961 application was also made to the Town Planning Authority for sanction of the lay-out plan but in the meantime the land was notified for acquisition under the Land Acquisition Act sometimes in 1962 and Phool Chand Gupta tried to extricate his land from acquisition which, however, did not materialise and, as already noted, on 30.4.65 the instant notification to ac- quire under Section 68 of the Act was issued. Rejecting the contention that the agreements were spurious, the High Court observed that the very fact that applications were made for diversion and for sanction of lay-out plan went to show that the owner was interested in the development in the land and in selling it after dividing it into plots. Thus, the High Court, rightly took into consideration the above Exts, which pertained to a part of the acquired land of 152 acres. The High Court also considered the sale deeds Exts. D-1 to D-6 which pertained to small plots of lands out of land in reference No. 1 of 1970. Those sale deeds were registered in 1966-67, but the agreements to sale were entered into in 1959-62. The respective purchasers and the vendors were examined. The market value on the basis of Ext. D-2 made in the sale deed of 1962 selling only to 12.50 sqr. ft. for Rs.260 which worked out to Rs.8712 per acre. The High Court did not say that these Exts. were rejected. By Ext. P-5, P-6 and P-32 small parcels of land, at Kumharpura were sold. Kumharpura was noted to be two to three furlongs away from the acquired land. The market rate according to these Exts. ranged from Rs. 1.88 to 2.34 per sqr. ft. The High Court observed that these sales could not be a useful guide for determining the market value of land acquired. We are of the view that compared to Exts. P-1, P-2, P-3 and P-8 Exts. P-5 and P-6 and P-32 were less indicative of the market value of the acquired land. We feel that the appellant should have no grievance for rejection of these sales of Kumharpura. We find force in the contention of Dr. Singhvi that potential value was not taken into account in this case to the extent it should have been done. From the award dated 25.11.1972 it appears that the acquired land was situated at Village Nissatpura, within Corporation limits of Bhopal Town and consisting of Khasra No. 190/ 73, 136/74, 178/74, 135/75-76, the total area being 12.62 acres. The High Court found that the land was bounded on three sides by three roads: towards the eastern side by Berasia road; towards the western side by Sultania road; and towards the northern side by P.G.B.T. College Road. Southern boundary of the land was a Nala. The High Court also noticed that the land abutted to roads, namely, Berasia road and P.G.B.T. College road and the claimant had a house on the land and that the claimant had stated that he had obtained water and electricity connection from the Corporation and the electricity Board.: 7.60 acres of land out of 12.62 acres had been diverted and the land was even. At paragraph 14 of the special leave petition it is stated that the land is approachable from two different and important localities of Bhopal Town. From Bajaria Chowk Shahjanabad, a road, called Sultania Infantry road, proceeds Military Lines called Sultania Infantry lines. On both sides of this road, there is the thickly habited locality of Shahjahanabad, till about two furlongs. Slightly ahead is the enterance porch gate of the Military lines. Just before the gate, a tarred road bifurcates on the right hand side and it enters the acquired land of Swatantra Kumar Ref. No. 1/70. This tarred road was constructed by the Trust after acquisition of the lands. It goes on all sides of village Jamalpura, which is surrounded on all sides by the lands of Ref. No. 1/70. A part of land of Ref. No. 1/70 was developed after acquisition, and the tarred road reaches the developed plots. We have to note that such detail evidence was not there before the Tribunal and no benefit of development pursuant to and after the acquisition can be taken into consideration. Even so, from the map and juxtaposition we have no doubt that the acquired land had potentialities which deserved to be counted.