Land Acquisition Act, 1894 - Section 4 - Even while applying some amount of guess work, which is inevitable, it cannot be unfettered and that it has to be based on proper analysis of the location of land in question, its distance from lands subject matter of sale deeds placed on record and a reasonable assessment of potentiality of such land. The process of guess work cannot be based on conjecture and imagination.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : NAGPUR
CORAM : Manish Pitale, J.
March 01, 2018
First Appeal No. 736 of 2006 With First Appeal No. 667 of 2006 With First Appeal No. 798 of 2006 With First Appeal No. 431 of 2007
Municipal Council, Digras Vs. Satischandra Rikhabchandra Mehta & Others
Mr. G.R. Kothari, Advocate h/f Mr.V.R. Choudhari, Advocate for Appellants. Mrs.M.A. Barabde, AGP for Respondent Nos. 1 to 3. Mr. M.P. Khajanchi, Advocate for Respondent No.4.
JUDGMENT
1. These appeals are filed by the acquiring body i.e. Municipal Council and the land owners-claimants challenging common judgment and order dated 28.04.2006 passed by the Court of Civil Judge, Senior Division, Darwha (Reference Court), whereby the Reference Court has granted enhanced compensation to the claimants for acquisition of their lands situated in Digras town. There were two cases decided by the common judgment, Land Acquisition Case No. 2186/2004, wherein land of claimant Satishchandra Mehta is involved and Land Acquisition Case No.2185/2004 wherein land of claimant Manikchand Bhandari is involved. First Appeal No. 736 of 2006 is filed by the Municipal Council Digras while First Appeal No.798 of 2006 is filed by the claimant Satishchandra Mehta. First Appeal No.667 of 2006 is an appeal filed by the Municipal Council, Digras, while First Appeal No.431 of 2007 is filed by the claimant Manikchand Bhandari. Since all these appeals arise out of the acquisition proceedings initiated in pursuance of the notification dated 17.01.1989 issued under Section 4 of the Land Acquisition Act, 1894, they are taken up for hearing and disposal together.
2. The claimants, who were related to each other, had purchased portions of land from Plot No.56, Nazul Sheet No.10 in Digras town, the total area of the plot of land purchased by them came to 33468 sq.ft. By Notification dated 17.01.1989 issued under Section 4 of the aforesaid Act, initially an acquisition of 33356 sq.ft. of land was sought from the said plot, but, later by notice dated 25.01.1991, the respondent Sub Divisional Officer, Darwha informed the State that only 24748 sq. ft. of land was required for acquisition. The said acquisition was undertaken for construction and development of sweepers colony.
3. Upon completion of the acquisition proceedings, the Land Acquisition Officer pronounced award dated 12.03.1991, holding that the claimants herein were entitled to compensation at the rate of Rs.3.42 per sq.ft. for the aforesaid area of land i.e.24748 sq.ft. Aggrieved by the same, the claimants filed application under Section 18 of the aforesaid Act. The said proceedings before the Reference Court were disposed of, but, the appellant acquiring body i.e. Municipal Council, Darwha, was not made a party to the same and, therefore, it challenged the order of the Reference Court by filing First Appeal No. 537 of 2004. The said appeal was allowed by this Court and the proceedings were remanded to the Reference Court with a direction that the appellant- acquiring body shall be made a party to the proceedings and that the reference application would be decided afresh.
4. In pursuance of the proceedings being remanded, the Reference Court by the impugned common judgment and order dated 28.04.2006 partly allowed the applications of the claimants, holding that they were entitled to compensation at the rate of Rs.24/- per sq.ft. Aggrieved by the said common judgment and order, both the acquiring body as well as the claimants, have filed these appeals.
5. Mr. M.P.Khajanchi, learned counsel appearing on behalf of the acquiring body Municipal Council, Darwha, has contended that the location of the land in the present case, as is evident from the evidence and material on record, shows that there was hardly any potentiality in the same and that it was surrounded by graveyard and river and further that there was no residential colony surrounding the said land, thereby showing that the rate of compensation granted by the Land Acquisition Officer was justified and that the enhanced compensation granted by the Reference Court deserved to be quashed and set aside. It was contended that even if the land in question was located a few kilometers from the market or developed portion of the town, as claimed by the claimants, in urban areas such distance also made a lot of difference and that a proper appreciation of the location of the land in the present case would show that the enhancement granted by the Reference Court was not justified. It was contended that although the method of sale instances was a recognised method for ascertaining the market value of the land, it was necessary that such sale instances pertained to comparable pieces of land, which were in the vicinity of the acquired land. It was also contended that although guess work can be applied to a certain extent in ascertaining the market value, it cannot be unfettered and that it has to have reasonable connection to the facts on record. In support of the said contentions, the learned counsel appearing on behalf of the appellant-acquiring body relied upon the judgments of the Hon'ble Supreme Court and this Court in the cases of Shaji Kuriakose v. Indian Oil corporation, (2001) 7 SCC 650, Ranvir Singh and another v. Union of India, (2005) 12 SCC 59, Radha Mudaliyar v. Special Tahsildar, (2010) 13 SCC 384, Bhule Ram v. Union of India, (2014) 11 SCC 307, Isabela Gama v. Special Land Acquisition Officer, 2012(1) Mh.L.J. 206 and Abdul Hamid v. State of Maharashtra - 2017(5) Mh.L.J. 799.
6. On the other hand, Mr. G.R. Kothari, Advocate, holding for Mr.V.R. Chaudhary, Advocate appearing on behalf of the claimants submitted that the Reference Court had erred in restricting the enhancement of compensation to Rs.24/- per sq.ft. It was contended that there was sufficient material placed on record in the form of comparable sale instances and map at Exh.152, to show that the market value of the acquired property in 1989 was much higher than the quantum of compensation fixed by the Reference Court in the impugned judgment and order. It was pointed out that the location of the acquired property was near developed market and Digras town and that there were residential colonies surrounding the same, which demonstrated the error committed by the Reference Court in restricting the quantum of compensation to Rs.24/- per sq.ft. It was contended that the sale deeds placed on record were of comparable lands and that therefore, the guess work applied by the Reference Court was not reasonable and that higher compensation ought to have been granted.
7. Having heard the learned counsel for the parties and upon perusal of the pleadings, evidence and material on record, the point that arises for determination in these appeals, is, as to whether the market value of the acquired land was properly assessed by the Reference Court while granting compensation at the rate of Rs.24/- per sq.ft. or the compensation as granted by the Land Acquisition Officer was required to be restored as claimed by the acquiring body or that a much higher quantum of compensation was required to be granted to the claimants, looking to the evidence in the form of sale deeds and map on record. 8. While applying the method of assessing quantum of compensation based on sale deeds placed on record, it is necessary to examine as to whether these sale deeds pertain to comparable pieces of lands. The claimants have placed on record detailed evidence not only in the form of sale deeds, particularly the sale deeds at Exhs. 72, 73 and 74, but also oral evidence in the form of eight witnesses examined by them. As opposed to this, the acquiring body has examined one witness who had served as Assistant Director, Town Planning in the district of Yavatmal. Before an analysis is made of the evidence placed before the Reference Court, it would be relevant to peruse the reason given by the Land Acquisition Officer in his award dated 12.03.1991 wherein he has concluded that the claimants deserved compensation in the present case at the rate of Rs.3.42 per sq.ft.. The Land Acquisition Officer has held that land belonging to the claimants had non-agricultural potentiality. On the basis of sale instances pertaining to lands in the vicinity, the Land Acquisition Officer has arrived at an average rate of Rs.15.31 sq.ft.. On this basis, by relying upon the location of the land in question, in respect of its distance between the road and deducting 30% towards development charges, the Land Acquisition Officer has arrived at the figure of Rs.3.42 sq.ft. as the quantum of compensation payable to the claimants. It is to be examined as to whether the aforesaid reasoning applied by the Land Acquisition Officer is correct. 9. Once the Land Acquisition Officer had come to the conclusion that there was non-agricultural potentiality, the same ought to have been further analysed for arriving at the figure of just and fair compensation. But, the Land Acquisition Officer simply worked out an average rate of Rs.15.31 sq.ft. for the acquired land, on the basis of sale instances pertaining to land in the vicinity. This averaging out could have been done only if the sale instances were of comparable pieces of land. Averaging of amounts mentioned in sale instances pertaining to different kinds of lands has been frowned upon by the Hon'ble Supreme Court in the case of State of Punjab .vs. Hans Raj - (1994) 5 Supreme Court Cases 734. There is nothing on record to show that the Land Acquisition Officer arrived at the aforesaid average figure based on sale instances pertaining to comparable pieces of land. Therefore, the entire basis of calculation by the Land Acquisition Officer stood vitiated.
10. Before the Reference Court, the claimants produced exhaustive oral and documentary evidence. The evidence of witnesses for the claimants have emphasised on the location of the land to demonstrate that there was all round development in the vicinity of the land and that, therefore, the quantum of compensation payable to the claimants was much higher than the amount granted by the Land Acquisition Officer. There were sale instances placed on record, on behalf of the claimants, including sale instances at Exhs. 72, 73 and 74. The rate at which the lands were sold in these sale instances were, in Exh.72 at the rate of Rs.133/- per sq.ft. , in Exh.73 at the rate of Rs.100/- per sq. ft. and in Exh.74 at the rate of Rs.68/- per sq.ft. On this basis, it was contended on behalf of the claimants that even the Reference Court erred in granting enhanced compensation only at the rate of Rs.24/- per sq.ft. Reliance was also placed on the map at Exh.152 to contend that there were residential area, hospital and other amenities surrounding the acquired land and that, therefore, the claimants deserved further enhanced amount of compensation.
11. On the other hand, as contended by the learned counsel appearing on behalf of the appellant-acquiring body, there were admissions in the evidence of the claimants themselves that the acquired land was some distance away from the main developed areas of the town like Durga Chowk and that the acquired land was adjoining a river and a graveyard. It was pointed out that there had been no development activities in the land in question and that eventually a sweepers' colony was constructed thereon, which was the purpose of acquisition, demonstrating that there was hardly any potentiality in the land in question.
12. It is no doubt true that the claimants have placed on record sale instances pertaining to lands in the same town which fetched price at the rates noted above. But, the most crucial aspect in such cases is, as to whether the sale instances placed on record on behalf of the claimants, are comparable to the acquired land and hence whether they depict correct market value of the acquired land. If there is dissimilarity in regard to location, site or shape of the lands, the sale instances cannot be termed as comparable sale instances and they cannot become a basis for accurate assessment of the market value of the acquired land. The Hon'ble Supreme Court has held in the case of Radha Mudaliyar v. Special Tahsildar (supra) as follows:-
"12. It is a well settled principle of law that comparable sale instances, subject to their satisfying the basic ingredients of law, are the best piece of evidence to be considered by the Court for the purpose of determining the compensation. Even awards and transactions of the adjacent areas have been treated as best evidence which will fall within the zone of consideration by the Court. Of course, such instances must be comparable and legally admissible in evidence. In this aspect, we may refer to the judgments of this Court in the case of Harcharan v. State of Haryana, [(1982) 3 SCC 408]; Kantaben Manibhai Amin vs. Special Land Acquisition Officer, Baroda, [(1989) 4 SCC 662] and ONGC Ltd. vs. Sendhabhai Vastram Patel, [(2005) 6 SCC 454].
13. Comparable sales instances are the safest method for determining the market value of the acquired land and as laid down in Shaji Kuriakose vs. Indian Oil Corporation, [(2001) 7 SCC 650], it should satisfy the factors, inter alia, (1) the sale must be genuine transaction; (2) the sale deed must have been executed at the time proximate to the date of issuance of notification under Section 4 of the Act; (3) the land covered by the sale must be in vicinity of the acquired land; (4) the land covered by the sale must be similar to the acquired land; and (5) size of the plot of the land covered by the sale be comparable to the acquired land. The sales instances should preferably be closest to the date of the notification as then alone it would satisfy the touchstone of the principles contemplated under Section 23 of the Act, as held in Kanwar Singh vs. Union of India, [(1998) 8 SCC 136]."
13. In spite of documentary evidence on record in the form of sale instances as well as location of the land in question, some amount of guess work in arriving at a figure of just and fair compensation, is inevitable. The Hon'ble Supreme Court has laid down in the case of Bhule Ram v. Union of India (supra) in this respect as follows:-
"16. In view of the above, the law can be summarised to the effect that the market value of the land is to be assessed keeping in mind the limitation prescribed in certain exceptional circumstances under Section 23 of the Act. A guess work, though allowed, is permissible only to a limited extent. The market value of the land is to be determined taking into consideration the existing use of the land, geographical situation/location of the land alongwith the advantages/disadvantages i.e. distance from the National or State Highway or a road situated within a developed area etc. In urban area even a small distance makes a considerable difference in the price of land. However, the court should not take into consideration the use for which the land is sought to be acquired and its remote potential value in future. In arriving at the market value, it is the duty of the party to lead evidence in support of its case, in absence of which the court is not under a legal obligation to determine the market value merely as per the prayer of the claimant."
14. Thus, it is evident that even while applying some amount of guess work, which is inevitable, it cannot be unfettered and that it has to be based on proper analysis of the location of land in question, its distance from lands subject matter of sale deeds placed on record and a reasonable assessment of potentiality of such land. The process of guess work cannot be based on conjecture and imagination.
15. Therefore, it has to be assessed in the present case as to whether the quantum of compensation granted by the Reference Court is just and fair and whether it can be said to be based on proper analysis of the evidence and material on record, in terms of the aforesaid guiding principles laid down by the Hon'ble Supreme Court.
16. The most crucial aspect in the present case is the location of the land in question. A perusal of the map at Exh.152 shows that the said land is adjacent to a road, that there is Gaothan towards its east with houses and shops across the road towards the south and west. The lands that are subject matter of aforesaid sale deeds at Exhs. 72, 73 and 74 are situated in the centre of Digras town. It has come on record that the said sale deeds pertained to the main residential area of the town. The evidence on record further shows that the land in question is located near a graveyard and river and that area called Bhangipura is adjoining on the eastern side of the land in question and further that river Dhawada is next to the said Bhangipura area which is a colony of shanties (Zopadpatti). Apart from this, it is on record that the land in question was acquired for construction of sweepers' colony.
17. The rates at which the lands at Exhs. 72, 73 and 74 were sold, show that rates ranging between Rs.68/- per sq. ft. to Rs.133/- per sq. ft. were fetched by the lands that were located in the main area of Digras town. A perusal of the map at Exh.152 and the evidence on record showing the location of the land in question, demonstrates that the said acquired land could not be said to be comparable to the lands that were subject matter of the sale deeds at Exhs. 72, 73 and 74. In this situation, the Reference Court was required to adopt certain amount of guess work to arrive at a figure of just, fair and reasonable compensation payable to the claimants for the acquisition of their lands. Although such guess work is permissible only to a limited extent and it is not unfettered, if applied in a reasonable manner, based on proper analysis of the evidence and material on record in respect of the location of the acquired land, it can be sustainable.
18. The Reference Court in the present case has taken into consideration the entire oral and documentary evidence on record, including the map at Exh.152, to come to the conclusion that the land in question could have fetched market price of Rs.24/- per sq. ft. on the date of Notification under Section 4 of the said Act i.e. 17.01.1989. It cannot be said that the aforesaid figure arrived at by the Reference Court is wholly unreasonable or in the teeth of evidence on record showing much higher market value of the land in question on the date of issuance of the Notification under Section 4 of the said Act. It can also not be said that the Reference Court has not taken into consideration potentiality of the land or its location. In fact, an analysis of the oral and documentary evidence on record shows that the location of the acquired land was such that it did not have high potentiality and that it was not comparable to the lands which were subject matter of sale deeds at Exhs. 72, 73 and 74. The totality of the circumstances in the present case show that the figure of Rs.24/- per sq.ft. arrived at by the Reference Court as compensation payable to the claimants, was a just, fair and reasonable estimate of compensation.
19. The evidence on record certainly shows that the rate of Rs.3.42 per sq.ft. fixed by the Land Acquisition Officer in his award was wholly inappropriate and that it was based on averaging of sale instances of different lands, which was not sustainable or permissible.
20. The learned counsel for the appellants has relied upon the judgments of the Hon'ble Supreme Court referred to above, but, since they are in support of the proposition of law, that have been noted and dealt with in this judgment, an exhaustive reference to all the judgments has not been made.
21. In the light of the above, it is evident that the impugned judgment and order of the Reference Court does not deserve any interference from this Court and that the appeals filed by the acquiring body as well as the claimants deserved to be dismissed. The impugned judgment and order of the Reference Court deserves to be confirmed.
22. Accordingly, First Appeal Nos.736/2006, 667/2006, 798/2006 and First Appeal No. 431/2007 are dismissed with no order as to costs.
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