ASSISTANT COMMISSIONER AND LAND ACQUISITION OFFICER, BELGAUM v. SECRETARY, GOVERNMENT OF INDIA
1991-11-12
K.S.BHATT, N.VENKATACHALA
body1991
DigiLaw.ai
VENKATACHALA, J. ( 1 ) THESE are Miscellaneous First Appeals of the Land Acquisition Officer, belgaum, preferred under Section 54 of the Land Acquisition Act, 1894 ("the act"), against the common award and separate decrees dated 19-4-1989 made by the Court of Civil Judge, Belgaum ("the Reference Court"), by which compensation for certain lands acquired under the Act has been enhanced on references made to it under Section 18 thereof. ( 2 ) MATERIAL facts, which have given rise to the filing of these appeals by the Land Acquisition Officer, are these : in the year 1942, possession of about 300 acres of agricultural lands lying in the vicinity of Balekundri, Sambra and Mutage villages in Belgaum Taluk was taken for military purposes by the Air Force Station at Sambra. Eversince, the said lands had continued to be in possession of the Air Force Station and used by it for military purposes on payment of annual hire amounts to their owners. By two preliminary notifications issued under Section 4 (1) of the Act-one published in the Karnataka official Gazette dated 24-2-1983 and another published in the Karnataka Official gazette dated 3-2-1986, an extent of 294 acres 20 guntas of the said lands in possession of the Air Force Station had come to be proposed for acquisition for the purposes of the very Air Force Station. Acquisition had come to be completed by issuance of the final notification under Section 6 of the Act. Thereafter, when notices issued by the Land Acquisition Officer under Sections 9 and 10 of the Act had come to be served on the owners of the lands inviting from them claims for compensation for the acquired lands, the concerned owners, in their claims for compensation, sought the determination of the market value of their acquired lands at rates ranging from Rs. 40,000-00 an acre to Rs. 2,00,000-00 an acre. The Land Acquisition officer, by a common award made under Section 11 of the Act, awarded compensation for the acquired lands by determining their market value at an uniform rate of rs. 6,000-00 an acre, purporting to determine such market value having regard to the market value fetched by sale of similar lands during three years previous to the date of publication of the preliminary notification as disclosed from the concerned sub-Registry's sale transactions.
6,000-00 an acre, purporting to determine such market value having regard to the market value fetched by sale of similar lands during three years previous to the date of publication of the preliminary notification as disclosed from the concerned sub-Registry's sale transactions. The owners of the acquired lands-the claimants, who were not satisfied with the market value of their lands, as determined by the land Acquisition Officer, made applications to him under Section 18 of the Act seeking the making of references to the Civil Court (the Reference Court) for determination by it the amount of compensation payable to them for their acquired lands. Some of such references sent by (he Land Acquisition Officer pertaining to compensation determinabte in respect of 179 acres 1 gunta of the acquired lands came to be clubbed for disposal on the basis of common evidence proposed to be adduced by parties in those references on the premise that all the lands concerned were similar in nature and of the same value. The Reference Court, which recorded common evidence in those cases, on the basis of such common evidence, determined the market value of the lands concerned at Rs. 1,750-00 per gunta, that is, Rs. 70,400-00 an acre as against the determination of their market value made by the Land Acquisition officer at Rs. 6,000-00 an acre. Accordingly, compensation awardable to the claimants for their acquired lands under the Act came to be determined by the reference Court by its common award and separate decrees dated 19-4-1989. It is that common award and those separate decrees, by which enhanced compensation is awarded to the claimants, which are appealed against by the Land Acquisition Officer as stated at the outset. ( 3 ) WHETHER the market value of the acquired lands determined by the Reference Court at Rs. 70,400-00 an acre as against their market value determined by the Land acquisition Officer at R. s. 6,000-00 an acre by adoption of Hypothetical layout method of valuation of lands calls to be interfered within these appeals, being the main question which needs our consideration and decision, we shall proceed to do so in the light of the arguments addressed by learned counsel on either side.
( 4 ) WHAT matters should be taken into consideration by the Court in determining the amount of compensation to be awarded for the land acquired under the Act and what matters should be neglected by the Court in determining the amount of compensation to be so awarded, are laid down respectively under Sections 23 and 24 of the Act, The market value of the land at the date of the publication of the notification under Section 4 (1) of the Act should form the basic matter for determining the amount of compensation to be awarded for the land acquired under the Act, becomes obvious from the requirement of the first clause of sub-section (1) of Section 23 of the Act. The market value, the basic matter on which compensation is dcterminable under Section 23 of the Act, means the price that a willing purchaser would pay to a willing seller for a property having due regard to its existing condition with all its existing advantages, and its potential possibility when laid out in its most advantageous manner excluding any advantages due to the carrying out of the scheme for the purposes of which the properly is compulsorily acquired, is well settled (See: raghubans Narain Singh v State of Uttar Pradesh, AIR 1967 SC 465 ). Whenever the market value of the land acquired is required to be determined, one or the other method of valuation of land recognised by Courts is adopted. Some of such methods of valuation of lands recognised by the Supreme Court in Special Land Acquisition officer v T. Adinarayana Setty, AIR 1959 SC 429 , are- (l) opinion of cxpcrt; (2) the price paid in bona fide transaction of purchase of the land acquired or the land adjacent to the acquired land and possessing similar advantages; and (3) number of years purchase of the actual or immediately prospective profits of the lands acquired.
In its recent decision in Administrative General of West Bengal v Collector of varanashi, AIR 1988 SC 943 , the Supreme Court having observed that the determination of the market value of acquired land with potentialities for urban use is an intricate exercise which calls for collection and collation of diverse economiccriteria and such market value for the purpose of Section 23 of the Act would be the price at which the property changes hands from a willing seller to a willing buyer but not too anxious a buyer, dealing at arms length, regards the comparative sales of lands' method, adverted to in its earlier decision in T. Adinarayana Settv's case (supra), as the best method of valuation of the land acquired under the Act, by stating thus: " Prices fetched for similar lands with similar advantages and potentialities under bona fide transactions of sale at or about the time of preliminary notification are the usual and indeed the best evidence of market value. Other methods of valuation are resorted to, if the evidence of sale of similar lands is not available. " thereafter, the Supreme Court, in that very decision, though has pointed out that it is trite proposition that prices fetched for smaller plots cannot form safe basis for the valuation of large tracts of land as the two are not comparable properties, recognises Hypothetical layout method of valuation of lands as a method which could be adopted for determining the market value of large extent of lands acquired under the Act with potentiality for urban use on the basis of the price fetched for small developed plots, by stating thus:" The principles 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 plots cannot directly be adopted in valuing large extents.
The principle requires that prices fetched for small developed plots cannot directly be adopted in valuing large extents. However, if it is shown that the large extent to be valued docs 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 sate 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 Brig. Sahib Singh Kalha v Amritsar Improvement trust, AIR 1982 SC 940 , this Court indicated that deductions for land required for roads and other developmental expenses can, together, come up to as much as 53%. But the prices fetched for small plots cannot directly be applied in the case of large areas, for the reason that the former reflects the 'retail' price of land and the latter the wholesale' price. "as regards the prices fetched by sale of small developed plots, which should form the basis for valuing large extent of land, such prices must be those fetched in bona fide transactions of sale at or about the time of preliminary notification, cannot be a matter which admits of doubt, in that, the Supreme Court, in the very decision, has stated, as pointed out already, that price fetched for similar lands with similar advantages and potentialities under bona fide transaction of sale, at or about the time of the preliminary notification are the usual and indeed the best evidence of the market value.
( 5 ) FROM what is stated above by the Supreme Court, in Administrative General ofwest Bengal v Collector of Varanashi, (supra) while recognising the hypothetical layout method of valuation of land as a method which becomes available for valuing large extent of land with urban potentiality on the basis of price fetched for small adjacent developed plots under bona fide transactions of sale, it becomes clear that the hypothetical layout method of valuation of land could be availed of by the Collector or the Court for determining the market value of a land acquired under the Act when there are present in the given case, the following pre-requisites: (1) That the large extent of acquired land required to be valued does admit of and is ripe for use for building purposes; (2) That building sites if laid out on the acquired extent of land would become good selling propositions; (3) That the building plot (site) sold under the sale transaction/s sought to be relied upon for valuing the acquired land had been sold at or about the time of the preliminary notification; (4) That the building plot (site) sold under the sale transaction sought to be relied upon for determining the market value of the acquired land was in the neighbourhood of the acquired land and could become comparable to the building plots (sites) to be laid-out on the acquired land; and (5) That the sale transaction relating to the building plot (site) sought to be relied upon for valuing the acquired land was a bona flde one. As the Reference Court, by its common award and separate decrees under appeals, has determined the market value of large extent of 179 acres 1 gunta of land on the basis of the price fetched by 22 feet by 50 feet plot (site) under a sale transaction, the certified copy of which is produced as Exhibit P-13, by following the hypothetical layout method of valuation of land, such determination of the market value cannot be interfered with if there existed in the instant case the pre-requisites needed to avail of the hypothetical layout method of valuation of land as envisaged by the supreme Court in Administrative General of West Bengal v Collector of Varanashi, (supra ).
Hence, it has now to be seen whether there existed in the instant case the aforesaid pre-requisites which warranted the adoption by the Reference Court hypothetical layout method of valuation of land for valuing acquired land. ( 6 ) THE first pre-requisite being that the acquired land to be valued does admit of and is ripe for use for building purposes, whether the acquired land satisfies this pre-requisite has to be seen. The acquired land though was in the ownership of the claimants on the date of the publication of the preliminary notifications concerned, its possession and enjoyment was with the Air Force Station as on the dates of the preliminary notifications, is undisputed. In fact, possession of the acquired lands was with the Air Force Station from the year 1942 and the acquired land was used for military purposes eversince, is also an admitted fact. Though there was a controversy as to whether the acquired land was with the Air Force Station on payment of annual hire (lease) amount as urged on behalf of the Air Force Station or was in the occupation of the Air Force Station from the year 1942 without payment of such hire (lease) amount as urged on behalf of the claimants, the possession and enjoyment of the acquired land was with the Air Force Station as on the date of the publication of the preliminary notification, stands uncontrovcrted. If the bundle of rights respecting a property arc regarded as consisting of ownership, possession and enjoyment as would make the property a freehold property, the acquired land was not a freehold land in that sense. The acquired land, therefore, as it stood on the date of the publication of the preliminary notification under the Act, was not available or ripe for use for building purposes by their owners (the claimants) inasmuch as the possibility of re-taking possession of the acquired land from the Air Force Station - the military authorities, for using the same for building purposes by making out plots, was rather remote. Hence, the pre-requisite that the acquired land should admit of or be ripe for use for building purposes at the time of publication of the preliminary notification, could not and did not exist.
Hence, the pre-requisite that the acquired land should admit of or be ripe for use for building purposes at the time of publication of the preliminary notification, could not and did not exist. ( 7 ) THE other pre-requisite that the building sites if laid out on the acquired extent of land would become good selling propositions, is not a pre-requisite which could even be envisaged as being present in the instant case inasmuch as there was no possibility of re-taking possession of the acquired land from the possession of the air Force Station in the immediate future. ( 8 ) HOWEVER, coming to the sale transaction evidenced by the registration copy of the sale deed (Exhibit P-13), the pre-requisite envisaged as to the sale transaction having come into existence at or about the time of the preliminary notifications and was in the neighbourhood of the acquired land could be regarded as existing in the instant case inasmuch as the evidence given by P. W. 1, Krishnaji, and P. W. 2, mohan, was to that effect. ( 9 ) , But, there was no possibility of satisfying the pre-requisite relating toob taining satisfaction that the building plot under the sale transaction (Exhibit p-13) could be compared with the plots (sites) to be laid out on the acquired land, in that, there was no possibility of building plots or building sites being laid out on the acquired land, which was at the relevant point of time with the Air Force Station and was not likely to come into the possession of the owners (claimants) so as to enable them to make a layout of building plots (sites) in that land. ( 10 ) THE other pre-requisite to be satisfied being the sale transaction relating to the building plot (site) to be relied upon for determining the market value of the targe extent of land being a bona fide transaction, an important pre-requisite, it has now to be seen whether the same did exist is satisfied in the instant case. Such sale transaction is what is evidenced by the certified copy of the sale deed (registration copy) under which 22 feet by 50 feet plot (site) situated in the neighbourhood of the acquired land, is purported to have been sold for Rs. 6,000-00.
Such sale transaction is what is evidenced by the certified copy of the sale deed (registration copy) under which 22 feet by 50 feet plot (site) situated in the neighbourhood of the acquired land, is purported to have been sold for Rs. 6,000-00. When this registration copy was sought to be produced along with other documents by one krishnaji, Power of Attorney Holder of the claimants in L. A. C. Nos. 220 and 221/1981 while giving oral evidence on behalf of the claimants as P. W. 1, an objection had come to be raised on behalf of the Land Acquisition Officer for its marking in evidence. The objection so raised has come to be dealt with by the reference Court, thus:" The Advocate for respondent have objected to marking of these documents on the ground that foundation is nol made out for reception of these documents as secondary evidence. Exhibits P-11 to P-13 are marked subject to objection. " (See: para 6 of the deposition of P. W. 1 recorded on 17-2-1989) thus, the registration copy of the sale transaction purported to relate to sale of 22 feet by 50 feet land for Rs. 6,000-00 has come to be marked as Exhibit P-13. P. W. 1, who produced the said registration copy of the sale transaction, is neither the vendor nor the vendee under the sale transaction nor is he a witness for the sale transaction. However, according lo his evidence, the impending acquisition of land of balekundri, Sambra and Mutage villages, obviously in occupation of the Air Force station, was well-known to the villagers, the admission made by him in lhat regard in the course of his evidence being lo the effect that in the year 1975 itself, the villagers of Balekundri, Sambra and Mutage knew lhat their lands would be acquired by the government. Then, there is evidence of P. W. 2, Mohan, who was formerly the owner of the land sold under the sale transaction evidenced by the registration copy (Exhibit P-13 ). It is disclosed from his evidence that 22 feet by 50 feet land purported to have been sold on 16-1-1982 for Rs. 6,000-00 under the sale transaction formed mere one-fifth portion of 155 feet by 35 feel land sold by him just a month and a half earlier on 27-11-1989 for Rs.
It is disclosed from his evidence that 22 feet by 50 feet land purported to have been sold on 16-1-1982 for Rs. 6,000-00 under the sale transaction formed mere one-fifth portion of 155 feet by 35 feel land sold by him just a month and a half earlier on 27-11-1989 for Rs. 10,000-00 under the sale Iransaclion evidenced by the registration copy of the sale deed (Exhibit P-12 ). Significantly, Exhibit P-12 discloses that the land sold under the sale transaction evidenced by it, was sold subject to "the risk of hire or de-hire and acquisition proceedings". P. W. 2 though states in his evidence that he did not know why the sale transaction evidenced by Exhibit P-12 was made subject to 'the risk of hiring or de-hiring and acquisition proceeding' it is clear from his other evidence that he did not know as to what might have been the real market value of the land sold by him, for, he pleaded ignorance about the land being converted as claimed and admitted of being a resident of Bombay for over a decade. Thus, the evidence on record clearly establishes that the sale transaction recorded in Exhibit P-13, the registration copy, related to the land which once belonged to the claimant claiming enhanced compensation for his acquired land in the neighbourhood and the sale transaction recorded in Exhibit p-13 had come into existence when the impending acquisition of other lands in the neighbourhood, that is, the acquired lands, in the possession of the Air Force Station, was well known to all the villagers; that the price paid for the land under the sale transaction was four times higher as compared to the price for which it was purchased just a month and a half earlier. There is no explanation forthcoming as to how there was jump in the value of the land by four times in a short span of time of a month and a half.
There is no explanation forthcoming as to how there was jump in the value of the land by four times in a short span of time of a month and a half. If regard is had to the evidence on record pertaining to the sale transaction recorded in Exhibit P-13 and the absence of the evidence of the vendor and the vendee of the sale transaction or any person, who has known about the circumstances in which such sale transaction has come into existence, to the effect that the price of land reflected therein was not an inflated price and the transaction was a bona fide transaction, the Reference Court, in our view, could not have relied upon the price fetched by that sale transaction for the land purported to have been sold thereunder, to determine the market value of the large extent of the acquired land. ( 11 ) HOWEVER, as it was contended on behalf of the claimants-respondents that Section 51-A of the Act, which provided that in any proceeding under the Act, a certified copy of a document registered under the Registration Act, 1908 (Act 16 of 1908) including a copy given under Section 57 of that Act, may be accepted as evidence of the transaction recorded in such document, enabled the Reference; court to regard the sale transaction recorded in the certified copy (Exhibit P-13) as a genuine and bona fide one, we shall examine the merit of that contention. ( 12 ) A certified copy of a document registered under the Registration Act could, no doubt, be accepted by the Court as evidence of the transaction recorded in such document in a proceeding under the Act because of Section 51-A of the Act. Therefore, the certified copy of a document registered under the Registration Act could be treated as good as the original document which could be accepted as evidence of the transaction recorded thereunder. But, acceptance as evidence of a transaction recorded in the certified copy of the document or in the original document itself, cannot be the same as accepting the transaction in either of such documents as a genuine or bona fide one, which could be regarded to be a condition precedent for deciding, on its basis, the market value of the land acquired under the act.
In this context, what must be borne in mind is that it is only the prices fetched for similar lands with similar advantages and potentialities under bona fide transactions of sale at or about the time of preliminary notification which are the usual and indeed the best evidence of the market value of the acquired lands, as is held in Administrative General of West Bengal v Collector of Varanashi, (supra ). If that be so, a claimant, who wants the market value of his acquired land to be determined on the basis of the price fetched under the sale transaction, has to show that such sale transaction was a bona fide one by adducing evidence required to satisfy the tests recognised by Courts in that regard, to wit, (1) that the sale transaction not being a forced sale, but a sale by a willing seller to a willing prudent purchaser, that is, one who will have made the offer after making necessary enquiries of the value of the land and not an offer which will have been made by one who knew nothing of the value of the land in the locality and who had made no enquiries about it (See: Government of Bombay v Merwan Moandigar Aga, ILR 1924 bombay Vol. 48 at page 190; (2) that the willing buyer and the willing seller in fixing the price for the land in the sale transaction, were actuated by business principles prevalent in the locality at the time of such transaction (See: Birjarani v Deputy commissioner, Sitapur, 57 Indian Cases 301; (3) that the price paid under the sale transaction was by a purchaser of good ability and well qualified to put the land to the best advantage (See: Birabad Narayan Chandra Dhir Narendra v The Collector of cuttack, 39 Indian Cases 14; and (4) that the sale transaction was not the one brought into existence in anticipation of the acquisition of lhat land and to claim higher compensation for the acquired land. But, in the instant case, there is no evidence adduced on behalf of the claimants to show the bona fide nature of the sale transaction evidenced by Exhibit P-13. Neither the vendor nor the purchaser under the sale transaction evidenced by Exhibit P-13.
But, in the instant case, there is no evidence adduced on behalf of the claimants to show the bona fide nature of the sale transaction evidenced by Exhibit P-13. Neither the vendor nor the purchaser under the sale transaction evidenced by Exhibit P-13. muchlcss any person, who had personal knowledge of such transaction, has given evidence in the instant case in support of the bona fide nature of the transaction, as already pointed out. The evidence on record, to which we have already adverted, if anything, shows that the sale transaction evidenced by Exhibit P-13 cannot at all be regarded as a bonafide one. As such sale transaction evidenced by Exhibit P-13, the registration copy, which is not a bonafide transaction of sale is made the basis for determination of the market value of the acquired land by the Reference Court, such determination of the market value becomes unsustainable. Hence, the contention raised on behalf of the claimants (respondents here) that the Reference Court was justified in acting upon the sale transaction evidenced by the certified copy (Exhibit P-13) as a genuine or bona fide sale transaction in determining the market value of the acquired land of the claimant because of the provision in Section 51-A itself, docs not merit acceptance. ( 13 ) ONE basic fact, which should have made the Reference Court not to relyupon the sale transaction evidenced by Exhibit P-13 as the basis for determining the market value of the acquired lands is unfortunately overlooked by it, that is, the land concerned in the sale transaction at the time of sale not being capable of compared with the land acquired. The land in the sale transaclion (Exhibit P-13) could not be compared at all with the land acquired because the former at the lime of sale while was in the possession and enjoyment of the seller the latter was not in possession and enjoyment of the claimants, being in occupation of the Air Force Station and used for military purposes cvcrsince the year 1942, thercbcing no sign of giving back the possession of them to the claimants either immediately or in the near future. Hence, the Reference Court could not have determined the market value of the acquired lands as if they were free-hold lands, on the basis of the sale transaclion of the free-hold land evidenced by Exhibit P-13 alone.
Hence, the Reference Court could not have determined the market value of the acquired lands as if they were free-hold lands, on the basis of the sale transaclion of the free-hold land evidenced by Exhibit P-13 alone. ( 14 ) THUS, when there was no satisfactory evidence adduced by the claimants asregards the pre-requisites required to exist for determining the market value of the acquired lands adoption of the hypothetical layout method of valual ion of land and the evidence made available on record was, in itself, sufficient to show that all such pre-requisities did not exist, there is no option left to us except to interfere with the determination of the market value of the acquired land made by the Reference court at Rs. 70,400-00 an acre as against the market value of the acquired lands determined by the land Acquisition Officer at Rs. 6,000-00 as that not made in consonance with settled principles of valuation of land and the evidence on record. ( 15 ) IN fact, realisation on the part of the contesting parties in these appeals that there was no sufficient evidence adduced before the Reference Court by them, on the basis of which this Court could determine the market value of the acquired lands, has made them file applications seeking permission to adduce additional evidence. As the evidence sought to be adduced by each of the parties, who have made the applications, is objected to by the opposing parties, we consider it most appropriate to set aside the common award and separate decrees appealed against and remit the cases to the Reference Court for their fresh disposal by permitting the parties to adduce further evidence as sought by them in their applications, by sending the applications to the Reference Court with a direction to decide upon them and permit the parties to adduce also any other evidence which they may propose to adduce in the course of the trial of the cases before it.
( 16 ) HOWEVER, since we have found that these are fit cases which are to beremitted to the Reference Court for fresh disposal, we must point out that the reference Court had shirked its responsibility in not deciding on the question of the date from which the claimants would be entitled to interest on the compensation amount to be awarded to them, by stating in its common award under appeal, thus :" There is a lot of controversy regarding the date of dispossession. This point need not detain me any longer. I leave this point by simply observing that the petitioners are entitled for interest from the date of dispossession of acquired lands from the hands of petition in the capacity of owners. "hence, our direction to the Reference Court would be as well, to examine the question on the evidence to be adduced by the parties, as to the date from which they would be entitled for payment of interest under the Act on the compensation amount to be awarded for their acquired lands and decide upon it. ( 17 ) IN the result, we allow these appeals, sel aside the common award and separate decrees appealed against and remit the cases to the Court of Civil Judge, Belgaum, for fresh disposal in the light of the observations we have made in the course of the above Judgment and in accordance with law. However, in the circumstances of these cases, we direct the parties to bear their own costs. --- *** --- .