Madhya Pradesh High Court
Dewas Devlopment Authority vs Tarachand And Others on 11 October, 2018
1
HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE
(SINGLE BENCH : HON. Mr. JUSTICE VIVEK RUSIA)
First Appeal No. 176 of 2001
Dewas Development Authority .. Appellants.
Vs.
Yasin (Deceased) through L.Rs. & others. .. Respondents.
First Appeal No. 177 of 2001
Dewas Development Authority .. Appellants.
Vs.
Yasin (Deceased) through L.Rs. & others. .. Respondents.
First Appeal No. 178 of 2001
Dewas Development Authority .. Appellants.
Vs.
Godawari Bai & others. .. Respondents.
First Appeal No. 179 of 2001
Dewas Development Authority .. Appellants.
Vs.
Tarachand Mali. & others. .. Respondents.
First Appeal No. 180 of 2001
Dewas Development Authority .. Appellants.
Vs.
Ghanshyam Mali & others. .. Respondents.
First Appeal No. 181 of 2001
Dewas Development Authority .. Appellants.
Vs.
Laxminarayan (Deceased) through L.Rs. & others. .. Respondents.
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2
None for the appellant.
Shri S.R. Kochatta, Adv. for private respondents.
Smt. Swati Ukhale, Govt. Adv. for respondents/State.
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JUDGEMENT
(Delivered on 11th October, 2018) All the aforesaid First Appeals are being disposed of by this common judgment as facts and grounds are identical. For the sake of convenience, facts narrated in F.A. No.176/2001 are taken into consideration.
2. Appellant - Dewas Development Authority has filed the present appeal u/s. 54 of the Land Acquisition Act, 1894 (hereinafter, for short, "the LA Act") being aggrieved by award dated 25.1.2001 passed by 1st Additional District Judge, Dewas in Reference Case No.10/1988, by which, learned Reference Court has enhanced the amount of compensation in favour of land- owners i.e. respondent No.1 to 5.
3. Facts necessary for disposal of these appeals are as under :-
The respondent/State Government issued Notification u/s. 4 and u/s. 6 of the Act, which was published in Official Gazette dated 13.12.1985 and 7.2.1996 respectively for acquisition of large area of various agricultural lands owned by the respondents/landowners. After complying with the provisions of Section 9 of the Act,the Land Acquisition Officer (LAO) sent the proposal of assessment of compensation on 29.9.1987 to the Collector, Dewas. The LAO and Collector, Dewas passed the award dated 5.2.1998 by assessing the compensation @ Rs.1,06,000/- per Hect. for the irrigated agricultural lands and 3 Rs.85,000/- per Hect. for the un-irrigated agricultural lands.
Being dissatisfied with the aforesaid award, the landowners sought reference for enhancement of compensation. U/s. 18 of the LA Act, the Collector, Dewas referred the dispute to the District Judge, Dewas for adjudication. Before the District Judge, the respondents/landowners claimed enhancement of compensation on the ground that they used to take 3-4 crops in a year and their earning was Rs.25,000/- per Acre, there were various trees and plantation which were not considered by the LAO. At the time of acquisition of the lands, the market rate of the land was Rs.10 to 15 per Sq.ft. and they have been paid compensation @ Rs.5/- per Sq.ft., hence, they are entitled for enhancement of the compensation. As an exemplar, the respondents produced copy of the agreement to sale executed in the year 1981, in which, the land was agreed to sold @ Rs.90,000/- per Acre (Rs.2,95,000/-
per Hect.).
After notice in the Reference Case, the appellant opposed the prayer of enhancement of compensation by submitting that the LAO assessed the compensation keeping in view the various factors and circumstances of the case prevailing at the time of issuance of Notification u/s. 4 of the Act hence no interference is called for.
Vide order dated 17.8.1992, learned District Judge awarded, the compensation @ Rs.85,000/- per Hect. for the unirrigated land and Rs.1,06,000/- for irrigated land. Being aggrieved by above order land owners filed, F.A. Nos. 72/1993, 73/1993, 74/1993, 75/1993 and 76/1993 before this Court .That vide order dated 22.9.2000, this Court set aside all the award and remanded the case to the Reference Court with a liberty to examine the sellers 4 and purchasers of the sale-deed and decide afresh on merit.
After the remand, respondents/landowners examined Ibrahim in support of the claim and also got exhibited sale-deeds dated 12.6.1981 as Ex. P/1; 7.9.1983 as Ex. P/2; 26.2.1983 as Ex. P/3; and 15.5.1982 as Ex. P/4. Map of land was exhibited as Ex. P/7; letter dated 19.3.1987 written by LAO to Housing Board as Ex. P/8. Respondents examined the witnesses in order to establish that all the land acquired were irrigated agricultural lands. In rebuttal appellant, Dewas Development Authority also examined the witnesses.
4. After considering all the material available on record, learned Additional District Judge has held that being irrigated agricultural lands, the landowners are entitled to compensation @ Rs.1,70,000/- per Hect. i.e. double to the compensation payable for unirrigated lands i.e. Rs.85,000/- per Hect.
5. Being aggrieved by the aforesaid award, appellant - Dewas Development Authority has filed the present appeal before this Court.
6. The appellant has assailed the impugned award on the ground that the LAO determined the value of the lands after considering various aspects like sale of land in the locality, market guidelines etc. and rightly assessed the compensation of Rs.1,06,000/- per Hect for irrigated lands, but on hypothetical basis, the Reference Court has considered the same by comparing the land with the diverted and developed land of adjoining area and unnecessary enhanced the compensation . The Reference Court has calculated the compensation at the market rate on 5 illogical and improper manner and on hypothetical imagination and wrongly granted the compensation for irrigated land at double the price of unirrigated land. At the best, it could be in the ratio of 1:1½. Hence, the impugned award is liable to be set aside and the compensation assessed by the LAO be restored.
7. Per contra, Shri S.R. Kochatta, learned counsel appearing for the respondents/landowners, opposed the prayer by submitting that the Reference Court has rightly considered the evidence brought on record by the landowners. The Reference Court has rightly awarded the compensation of irrigated land at the double rate which is permissible under the law. In support of his contention, he has placed reliance over the judgment of apex Court in the case of Sunder V/s. Union of India : 2001 (3) MPLJ 589; and judgment of Division Bench of this Court in the case of State of M.P. V/s. Ku. Rajiya Vano : 2003 (3) MPLJ
514. Hence, no interference is called for and the appeal is liable to be dismissed.
8. The only issue for consideration in these appeals is, whether the Reference Court has rightly enhanced the compensation of irrigated land at the double rate of compensation payable for unirrigated land. Undisputedly, the lands of the respondents/landowners were an irrigated agricultural land at the time of acquisition. The State Government acquired the land for implementation of various town development schemes floated by the appellant-Dewas Development Authority.
9. Before appreciating the rival submissions raised by the learned counsel for the parties, it would be appropriate to have in 6 mind certain decisions of apex Court in this field. That when the land owners sought the reference seeking enhancement of compensation, then the burden lies on them to prove their case by adducing reliable evidence and also to establish that the compensation offered by the Land Acquisition Officer is inadequate and the lands are capable of fetching higher market value. In case of Basant Kumar v/s Union of India : (1996) 11 SCC 542; Special Land Acquisition Officer, v/s Karigowda (2010) 5 SCC 708 and Ahmedabad Municipal Corpn. v/s Sharadaben : (1996) 8 SCC 93, the apex Court has held that it is for the appellant to prove his case if he is claiming enhancement of a compensation granted by the Land Acquisition Officer. It is the duty of the Court to scrutinize the evidence and apply the test of prudent and willing purchaser whether he would be willing to purchase in market the said very land. In the case of Hookiyar Singh v/s Special Land Acquisition Officer : (1996) 3 SCC 766, it has been held that the Court must not indulge in the feats of imagination but consider the very fact that the prudent purchaser in open market is ready to purchase the said land at the rate claimed by the claimants. It has also been held by the apex Court in the case of G.Narayan Rao v/s Land Acquisition Officer (1996) 10 SCC 607 that the claimants must establish that at the time of date of notification under Section 4 of the Act of 1984, any buyer or purchaser were available. The similar view has been followed in the case of State of U.P. v/s Ram Kumari Devi :
(1996) 8 SCC 577. In the case of Gujrat Industrial Development Corporation v/s Narottambhai Morarbhai :
(1996) 11 SCC 159, the apex Court has observed that the criteria and rate for sale of small piece of land and big area of the land are 7 always different. The small plots are easily saleable at higher rate;
whereas the large area of the plots do not get the higher rates. Therefore, while assessing the compensation the Court must keep in the mind that area of the land under acquisition.
10. For the purpose of calculation of compensation and to arrive fair market value of agricultural land various facts and circumstances of the case are liable to be consider by the court. The Court must exercise its discretion by adopting different methods; like (a) Sales statistics method; (b) Capitalisation of net income method; and (c) Agricultural yield basis method. The Supreme Court in the case of Special Land Acquisition Officer v/s Karigowda : (2010) 5 SCC 708 has held as under :-
"70. To examine what method could be adopted for determining the market value of land and criticism of the method adopted by the Land Acquisition Collector, by the courts, that the same is not in accordance with law, we must notice various methods which are normally adopted by the Courts for determining the fair market value of the land and which of the method can be more properly applied in the facts and circumstances of this case.
71. Sections 23 and 24 of the Act spell out the have and have nots, applicable to the scheme of awarding compensation by the Collector but do not describe the methodology which should be adopted by the courts in determining the fair market value of the land at the relevant time. By development of law, the courts have adopted different methods for computing the compensation payable to the land owners depending upon the facts and circumstances of the case. The Courts have been exercising their discretion by adopting different methods, inter alia the following methods have a larger acceptance in law :
(a) Sales Statistics Method : In applying this method, it has been stated that, sales must be genuine and bonafide, should have been executed at the time proximate to the date of notification under Section 4 of the Act, the land covered by the sale must be in the vicinity of the acquired land and the land should be comparable to the acquired land. The land covered 8 under the sale instance should have similar potential and occasion as that of the acquired land {Faridabad Gas Power Project, N.T.P.C. Ltd. & Ors. v. Om Prakash & Ors. [2009 (4) SCC 719], Shaji Kuriakose & Anr. v. Indian Oil Corp. Ltd. & Ors. [AIR 2001 SC 3341], Ravinder Narain & Anr. v. Union of India [2003 (4) SCC 481]}.
(b) Capitalization of Net Income Method : This method has also been applied by the courts. In this method of determination of market value, capitalization of net income method or expert opinion method has been applied. {Union of India & Anr. v.
Smt. Shanti Devi & Ors. [1983 (4) SCC 542], Executive Director v. Sarat Chandra Bisoi & Anr. [2000 (6) SCC 326], Nelson Fernandes & Ors. V. Special Land Acquisition Officer, South Goa & Ors. (supra).
(c) Agriculture Yield Basis Method : Agricultural yield of the acquired land with reference to revenue records and keeping in mind the potential and nature of the land - wet (irrigated), dry and barren (banjar).
72. Normally, where the compensation is awarded on agricultural yield or capitalization method basis, the principle of multiplier is also applied for final determination. These are broadly the methods which are applied by the courts with further reduction on account of development charges. In some cases, depending upon the peculiar facts, this Court has accepted the principle of granting compound increase at the rate of 10% to 15% of the fair market value determined in accordance with law to avoid any unfair loss to the claimants suffering from compulsive acquisition. However, this consideration should squarely fall within the parameters of Section 23 while taking care that the negative mandate contained in Section 24 of the Act is not offended. How one or any of the principles afore-stated is to be applied by the courts, would depend on the facts and circumstances of a given case.
75. It is a settled principle of law that lands of adjacent villages can be made the basis for determining the fair market value of the acquired land. This principle of law is qualified by -: 10:- First Appeal No.131 of 1999. clear dictum of this Court itself that whenever direct evidence i.e. instances of the same villages are available, then it is most desirable that the court should consider that evidence. But where such evidence is not available court can safely rely upon the sales statistics of adjoining lands 9 provided the instances are comparable and the potentiality and location of the land is somewhat similar. The evidence tendered in relation to the land of the adjacent villages would be a relevant piece of evidence for such determination. Once it is shown that situation and potential of the land in two different villages are the same then they could be awarded similar compensation or such other compensation as would be just and fair.
76. The cases of acquisition are not unknown to our legal system where lands of a number of villages are acquired for the same public purpose or different schemes but on the commonality of purpose and unite development. The parties are expected to place documentary evidence on record that price of the land of adjoining village has an increasing trend and the court may adopt such a price as the same is not impermissible. Where there is commonality of purpose and common development, compensation based on statistical data of adjacent villages was held to be proper. Usefully, reference can be made to the judgments of this Court to the cases of Kanwar Singh & Ors. v. Union of India [JT 1998 (7) SC 397] and Union of India v. Bal Ram & Anr. [AIR 2004 SC 3981].
77. In this regard we may also make a reference to the judgment of this Court in the case of Kanwar Singh & Ors. v. Union of India [AIR 1999 SC 317], where sale instance of the adjacent villages were taken into consideration for the purpose of determining the fair market value of the land in question and their comparability, potential and acquisition for the same purpose was hardly in dispute. It was not only permissible but even more practical for the courts to take into consideration the sale statistics of the adjacent villages for determining the fair market value of the acquired land."
11. The Division Bench of this Court in the case of M.P.Housing Board (supra) has also scrutinized the various earlier judgments of the apex Court in respect of calculation of amount of compensation. Para 14 to 18 of the judgment are reproduced below :-
"14. In the case of Kanwar Singh v. Union of India, (1998) 8 SCC 136, it has been held that the amount of compensation for the land acquired 10 depends on the market value of land on the date immediately before the notification under Section 4 of the Act or when same land is acquired and offer of compensation is made through an award. The market value has to be determined on the basis of evidence produced before the Court. It was further held that the consideration in terms of price received for land under bona fide transactions on the date or preceding the date of notification issued under Section 4 of the Act generally shows the market value of the acquired land and the market value of the acquired land to be assessed in terms of those transactions. It is also noteworthy to state here that in the case of Hansali Walichand v. State of Maharashtra, (1998) 2 SCC 388, Their Lordships held that the land having future potential on account of its location can not be ignored and realised potential is not the sole pivotal factor. 15. In this regard it is noteworthy to refer to the decision rendered in the case of Land Acquisition Officer, Revenue Divisional Officer v. L. Kamalamma, (1998) 2 SCC 385, where in it has been held by Their Lordships that when no sales of comparable land were available where large chunks of land had been sold, even land transactions in respect of small extent of land could be taken note of as indicating the price that it may fetch in respect of large tracts of land by making appropriate deductions such as for development of the land by providing enough space for roads, sewers, drains, expenses involved in formation of a layout, lump sum payment as also the waiting period required for selling the sites that would be formed.
16. In this case we may also refer to the decision rendered in the case of Union of India v. Mangat (Dead) by L.Rs. and Ors., (2000) 10 SCC 609, wherein Their Lordships held in Para 8 as under:--
"8. Even if one was to disregard the quality of the land, i.e., irrigated, semi-irrigated or barren, one can not be oblivious of the fact that the market value of land which abuts on the national highway would be much more than the land which is away from it. A price of the land which is landlocked and which is farther away from the national highway can not be the same as that which abuts on the national highway. The formula which had been applied by the High Court, however, seems to indicate that the price of the entire land irrespective of the location of different parcels of land is the same. The formula which was applied by the learned Single Judge of the High Court 11 is obviously incorrect."
17. In this regard we may profitably refer to the decision rendered in the case of Kasturi v. State of Haryana, (2003) 1 SCC 354, wherein it was held when there is difference between a developed area and an area having potential value though yet to be developed cut 20% towards development charges as against the normal 1/3rd, from the amount of compensation was treated to be justified in the facts and circumstances of the case.
18. In this regard it is worth referring to the decision rendered in the case of Land Acquisition Officer v. B. Vijender Reddy and Ors., (2001) 10 SCC 669. In the aforesaid case a two Judge Bench of the Apex Court held as under:--
"13 ....... It is true, in the fixation of rate of compensation under the Land Acquisition Act, there is always some element of guesswork. But that has to be based on some foundation. It must spring from the totality of evidence, the pattern of rate, the pattern of escalation and escalation of price in the years preceding and succeeding Section 4 notification etc. In other words, the guesswork could reasonably be inferable from it. It is always possible to assess the rate within this realm. In the present case, we find there are three exemplars, i.e., Exhibits A-l and A-2 which are three years preceding the date of notification and Exhibit A-3 which is of the same point of time when Section 4 notification was issued."
12. Recently, the apex Court in the case of Union of India V/s. Dyagala Devamma (Civil Appeal No.69866987/2018) decided on 25.7.2018, has held as under :
19. In Chimanlal Hargovinddas v. Special Land Acquisition Officer, Poona and Anr. : (1988) 3 SCC 751, this Court dealt with the question as to how the Court should determine the valuation of the lands under acquisition and what broad principle of law relating to acquisition of land under the Act should be kept in consideration to determine the proper market value of the acquired land.
20. In Para 4 of the judgment, this Court laid down as many as 17 principles, which are reproduced below for perusal:
(1) to (4)........................................ (5) The market value of land under acquisition has to be determined as on the crucial date of publication of the 12 notification Under Section 4 of the Land Acquisition Act (dates of notifications Under Sections 6 and 9 are irrelevant).
(6) The determination has to be made standing on the date line 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 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 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-a-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 thereafter 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:
13 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. Nearness to developed area 4. lower level requiring the
depressed portion to be
filled up.
5. Regular shape 5. remoteness from
developed locality.
6. Level vis-a-vis land under 6. some special disadvan-
acquisition. tageous factor which
would deter a purchaser.
7. Special value for an owner
of an adjoining property to
whom it may have some very
special advantage.
(15) The evaluation of these factors of course depends on the facts of each case. There cannot be any hard and fast or rigid rule. Common sense is the best and most reliable guide. For instance, take the factor regarding the size. A building plot of land say 500 to 1000 sq. yds. cannot be compared with a large tract or block of land of say 10,000 sq. yds. or more. Firstly while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a lay out, carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers (meanwhile the invested money will be blocked up) and the hazards of an entrepreneur. The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approximately between 20 per cent to 50 per cent to account for land required to be set apart for carving out lands and plotting out small plots. The discounting will to some extent also depend on whether it is a rural area or urban area, whether building activity is picking up, and whether waiting period during which the capital of the entrepreneur would be locked up, will be longer or shorter and the attendant hazards.
(16) Every case must be dealt with on its own fact pattern bearing in mind all these factors as a prudent purchaser of land in which position the judge must place himself. (17) These are general guidelines to be applied with understanding informed with common sense."
13. In the case of Chindha Fakira Patil V/s. Special Land Acquisition Officer : (2011) 10 SCC 787, the apex Court has upheld the order of Reference Court by which compensation 14 of Rs.3,00,000/- per Hect. was awarded for unirrigated land and Rs.6,00,000/- per Hect. was awarded as compensation for irrigated land, double the rate of unirrigated land.
14. Likewise, in the case of Premji Nathu V/s. State of Gujarat : (2012) 5 SCC 250, the apex Court allowed the reference and held that the landowners are entitled to Rs.450/- per Are. For the irrigated land and Rs.280/- per Are. For non-irrigated land with an additional amount of Rs.2/- per Sq.mtr. Para 23 of the aforesaid judgment is reproduced below :
"23. In the result, the appeal is allowed. The impugned judgment and the award passed by the Reference Court are set aside and the respondents are directed to pay enhanced compensation to the appellant at the rate of Rs.450 per Are for the irrigated land and Rs.280 per Are for non-irrigated land with an additional amount of Rs.2 per square meter. The appellant shall also be entitled to other statutory benefits like solatium and interest. The respondent shall calculate the amount payable to the appellant and make payment within three months from today."
15. In view of the foregoing discussion, the factual aspect of the case is not in dispute as the acquired lands were irrigated lands and the respondents/landowners were taking 3-4 crops in one calendar year from it. The assessment at the double rate of unirrigated land is just and proper and no interference is called for.
16. Accordingly, all the appeals fail and are hereby dismissed.
No order as to costs.
( VIVEK RUSIA ) JUDGE Alok/- Digitally signed by Alok Gargav Date: 2018.10.12 16:16:38 +05'30'