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2009 DIGILAW 349 (CHH)

STATE OF C. G. v. DAU NIRANJANLAL GUPTA

2009-12-02

DHIRENDRA MISHRA, R.N.CHANDRAKAR

body2009
JUDGMENT As per Hon'ble Shri Dhirendra Mishra, J. :- 1. The aforesaid appeals are being disposed of by this common judgment, as both the appeals are directed against the order dated 9th May, 2008 passed in MJC No.4/06 whereby learned 9th Additional District Judge (FTC) Durg has passed an award under Section 18 of the Land Acquisition Act, 1894 (for short 'the Act') in favour of the original applicant/plaintiff for a sum of Rs. 1,39,93,792.92/- and has further allowed simple interest @ 9% per annum from 26-8-99 if the award is satisfied within a period of one year, failing which interest @ 15% per annum from 26-8-99 till realization has been ordered. 2. Hereinafter the parties shall be referred to as per their description before the Court below. 3. Briefly stated, case of the plaintiff is that the plaintiff and his predecessors were owners and possession holders of land bearing Survey No.967, 971, 975, 990/19 & 995/1, total area 10.50 acres in village Kasaridih, Tehsil and District Durg. The aforesaid property was vested in the State Government after coming into force of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (for short 'the Act, 1950'). The plaintiff and other owners of the property filed a civil suit against vesting of their land and the same was decreed by the trial Court. The decree was reversed by the first appellate Court. The plaintiff filed a second appeal and the same was allowed by the High Court. Special Leave Petition preferred by the State Government against the order of the High Court was further dismissed by the Hon'ble Supreme Court vide order dated 22-9-1986. 4. The property in question was partitioned and the plaintiff got 3.62 acres of land in mutual partition. Defendant No.2 constructed 82 houses on the plaintiffs land and sold the same to various persons. After the suit of the plaintiff was finally decreed, the plaintiff being the owner of the land, demanded vacant possession of the land or payment of due compensation. The Collector, Durg by his memo dated 11th March, 1992 addressed to defendant No.2 directed to deposit Rs.52,47,823/- being 80% of the estimated compensation of Rs.65,59,779/- and the service charge @ 10%. After the suit of the plaintiff was finally decreed, the plaintiff being the owner of the land, demanded vacant possession of the land or payment of due compensation. The Collector, Durg by his memo dated 11th March, 1992 addressed to defendant No.2 directed to deposit Rs.52,47,823/- being 80% of the estimated compensation of Rs.65,59,779/- and the service charge @ 10%. Since the plaintiff was not paid any amount towards compensation, he filed a Writ Petition No. 4388/96 in the High Court and the High Court vide order dated 1-11-98 directed defendant No.1 to initiate proceedings for payment of compensation to the plaintiff and complete the formality within 6 months. On failure of defendant No.1 in complying with the order of the High Court, a contempt petition was filed by the plaintiff. Ultimately, the Collector, Durg initiated land acquisition proceedings and published notifications under Sections 4 and 6 of the Act on 28-5-99 and 30-7-99 with respect to plaintiff's land bearing Khasra Nos.967, area 1.44 acres; 971, area 0.16 acres; 975, area 0.50 acres; 990/19, area 0.68 acres; 995/1 & 995/8 area 0.03 acres, totaling 2.81 acres, respectively. 5. On the basis of report of the Land Acquisition Officer, an amount of Rs.6,57,918/- was fixed as compensation payable to the plaintiff towards acquisition of his 2.81 acres of land. On plaintiffs application (Ex.-P/19) dated 22-9-99 and as per order of the High Court dated 6-12-99 (Ex.-P/8), a reference under Section 18 was made on 11-2-2000. 6. The defendant/State in its written statement denied that the plaintiff was entitled for compensation of Rs.3,52,82,121/- as claimed. It was averred that a total area of 97.66 acres including the disputed land of the plaintiff was transferred to the Housing Board (for short 'the Board'). A total compensation of Rs.44,92,287/- was estimated@ Rs.45,999/- per acre and accordingly, the plaintiff was entitled for compensation of Rs.1,29,257/-. The plaintiff was entitled for solatium @ 30% and interest @ 9% per annum from 4-1-1975 to 3-9-99 and thus, he was entitled for total compensation of Rs.6,57,918/-. The plaintiff was entitled to receive the compensation as per prevailing rate in the year 1974 and he was not entitled for compensation at the prevailing rate on the date of notification under Section 4 of the Act, as land acquisition proceedings were commenced only in compliance of the order of the High Court. 7. The plaintiff was entitled to receive the compensation as per prevailing rate in the year 1974 and he was not entitled for compensation at the prevailing rate on the date of notification under Section 4 of the Act, as land acquisition proceedings were commenced only in compliance of the order of the High Court. 7. Defendant No.2 in its separate written statement averred that the Collector, Durg made allotment of the land in favour of the Housing Board by fixing premium of Rs.44,92.287/ The amount against the premium was already paid by the Board and only thereafter constructions were made. The Board is the owner of the disputed land after allotment. Defendant No.2 has been unnecessarily arrayed as party and defendant No.2 is in no way directly or indirectly connected with the dispute. 8. On the basis of pleadings of the respective parties, learned Additional District Judge framed issues. The parties to the proceedings filed documents. The plaintiff examined himself as PW -1 and his witnesses namely, Ashwini Kumar Sharma (PW-2), D.L. Ratre (PW-3), S. Bhattacharya (PW-4) whereas, the State/ defendant No.1 examined M.R. Bharadwaj, Sub Divisional Magistrate, Patan and defendant No.2 Board examined K.V. Samuel, its Assistant Engineer. 9. Learned Additional District Judge passed the impugned order with a finding that the defendants are jointly and severally liable to pay a sum of Rs.1,39,93,792/- along with interest as detailed in para-1 of the judgment. It was further held that the defendants are jointly and severally liable for satisfying the award and the suit was decreed with cost. 10. Shri Vrnay Harit, learned Deputy Advocate General for the State argued that the disputed land was vested in the Government as per the provisions of the Act. The aforesaid land was allotted to the Housing Board/defendant No.2 for the purposes of construction of dwelling houses in the year 1974 along with other land ad measuring 97 acres approximately. Total compensation of Rs. 44,92,287/was estimated for the entire land @ Rs.45,999/- per acre. Thus, the plaintiff was entitled for compensation of Rs. 1,29,257/- with solatium @ 30%. The plaintiff was also entitled for interest @ 9% from 4-1-1975 till the notification dated 28-599 and thus the amount of compensation has rightly been estimated at Rs. 6,57,918/-. Total compensation of Rs. 44,92,287/was estimated for the entire land @ Rs.45,999/- per acre. Thus, the plaintiff was entitled for compensation of Rs. 1,29,257/- with solatium @ 30%. The plaintiff was also entitled for interest @ 9% from 4-1-1975 till the notification dated 28-599 and thus the amount of compensation has rightly been estimated at Rs. 6,57,918/-. The acquisition proceedings were initiated under the Land Acquisition Act in the year 1999 only in compliance of the directions of the High Court, however, the possession of the disputed land was already taken by the State Government and the same was transferred way back in the year 1974 and, therefore, the compensation could not be fixed on the basis of prevailing market rate as on 28-5-99 i.e. on the date of notification. Learned Additional District Judge was also not justified in estimating the compensation on the basis of Collector's guidelines for the year 1998-99 by taking minimum price at Rs.175/- per sq.ft., as the rate fixed by the Collector is only for small pieces of land whereas, in the present case, the possession of 97 acres of land was taken in the year 1974 along with the disputed land ad measuring 2.81 acres. It was also argued that the plaintiff had received compensation without any objection and, therefore, it was not open for him to challenge the award passed by the Land Acquisition Officer by way of reference under Section 18 of the Act. 11. Shri Jitendra Pali, learned counsel for the Board submitted that the disputed land was allotted to the Board in the year 1974 by the Collector after receiving premium from the Board. Since the Board was not a party in the civil suit filed against the State Government, which was finally decreed in favour of the plaintiff, the allotment in favour of the Board was final and the same cannot be questioned in subsequent proceedings initiated by the plaintiff for compensation. The dispute of compensation is basically between the plaintiff and the State. Referring to Section 31 of the Land Acquisition Act, it was argued that a duty is cast upon the Collector to tender payment of compensation awarded by him to the person under Section 11 of the Act and thus from bare reading of Section 31, it is clear that the State alone is liable to pay compensation and not the Board. 12. 12. On the other hand, Shri Manindra Shrivastava, learned senior counsel for the plaintiff would argue that the defendants did not raise any dispute in reference -proceedings that the plaintiff has received compensation without any objection and, therefore, reference made at his instance was incompetent. No documentary or oral evidence was led by the defendants in this regard, as no issues were framed by the learned Additional District Judge. Even otherwise, referring to the order of reference dated 11-2-2000 made by the Collector, it was argued that amount of Rs.6,57 ,918/- against the award was received by the plaintiff on 24-11-99 under protest. The plaintiff had already filed application under Section 18 of the Act on 22-9-99 before receiving the award and, therefore, the arguments advanced by the appellants/defendants is contrary to their stand before the District Judge. 13. Referring to Section 23(1) of the Land Acquisition Act, it was argued that the compensation is to be awarded by considering the market value of the land on the date of publication of notification under Section 4 sub-section (1) of the Act. The market value has been assessed on the date of notification on the basis of evidence adduced by the plaintiff in this regard as also the evidence of defendant No.2' witness Shri K.V. Samuel, Assistant Engineer of the Housing Board and the documentary evidence i.e. Ex.-P/10, Ex.-P/11, Ex.-P/12, Ex.-P/ 13 and Ex.-P/20. Since the physical possession of the land acquired was indisputably taken in the year 1974, the learned District Judge ought to have awarded interest from the year 1974 and not from the year 1999. Reliance is placed in the matters of Shree Vijay Cotton & Oil Mills Ltd., Vs. State of Gujarat-1 and Manipur Tea Co. Pvt. Ltd., Vs. Collector of Hailakandi-2 . 1. (1991) 1 SCC262 2. AIR 1997 SC 1779 14. We have heard learned counsel for the parties. We have perused the record as also the impugned order. 15. The District Judge, on the basis of admission of M.R. Bharadwaj, witness examined by the State and K.V. Samuel, witness examined by the Board, has inferred that the notification under Sections 4 (1) and 6 of the Act was not issued for acquiring the disputed land in the year 1974 and the land was not legally acquired. The notifications under Sections 4 (1) and 6 of the Act were issued on 28-5-99 and 19-7-99 respectively. The notifications under Sections 4 (1) and 6 of the Act were issued on 28-5-99 and 19-7-99 respectively. Shri K.V. Samuel, witness examined by defendant No.2, admitted in his cross-examination that a request was made to the Land Acquisition Officer (Ex.-P/4) for acquisition of the disputed land and the aforesaid fact was further admitted by Shri M.R. Bharadwaj. The aforesaid letter was addressed to the and Acquisition Officer in the year 1999 and thus, it has been held that the land acquisition proceedings were initiated in accordance with law at the request of the Board in the year 1999. 16. Rejecting the arguments that the whole land acquisition proceedings initiated in the year 1999 was void ab initio, it has been held that in reference under section 18, the District Judge has no jurisdiction to declare the notification issued under the provisions of the Act void and he is only required to decide the rights of the parties. 17. Relying upon the oral evidence of plaintiff Niranjan Lal Gupta, who has proved the documents of Ex.-P/13, Ex.-P/13-A, Ex.-P/20 and Ex.-P/21-A, the evidence of Ashwini Kumar Sharma (PW -2), Revenue Inspector, Nazul Shakha, D.L. Ratre (PW-3), District Registrar in the Registration Office; S. Bhattacharya, record keeper in the office of the Deputy Registrar, Registry Office, Durg and further on the basis of admission of K.V. Samuel, it has been observed that as per guidelines of the Collector, the market value of the residential houses in the area was fixed at Rs.175 per sq. ft.. Further on the basis of oral evidence of K.V. Samuel and Ashwini Kumar Sharma and the documentary evidence available on record, the average market value of the disputed land has been assessed at Rs. 135 per sq.ft.. A deduction of 1/3rd =Rs.45/- from the above market rate has been made towards the development expenses. The market value of the disputed land has been estimated at Rs. 90 per sq. ft. and accordingly, a total compensation of Rs. 1,10,16,324/ - has been estimated. The solatium at the rate of 30% has been added to the above estimated compensation and amount of compensation has been assessed at Rs. 1,46,51,710/-. By deducting a sum of Rs.6,57,918/-, the plaintiff has been held to be entitled for compensation of Rs. 1,39,93,792/-. 90 per sq. ft. and accordingly, a total compensation of Rs. 1,10,16,324/ - has been estimated. The solatium at the rate of 30% has been added to the above estimated compensation and amount of compensation has been assessed at Rs. 1,46,51,710/-. By deducting a sum of Rs.6,57,918/-, the plaintiff has been held to be entitled for compensation of Rs. 1,39,93,792/-. The objection of defendant No.2 that the Board has unnecessarily been made party has been rejected with a finding that the disputed land has been acquired for the purposes of defendant No.2. Defendant No.2 has erected residential accommodations in the disputed land and, therefore, the Board is a necessary party and is jointly liable for satisfying the award. 18. The first objection taken by the appellant/defendant that the plaintiff has received an amount of compensation of Rs.6,57,918/- without any objection and, therefore, his application for reference under Section 18 was not maintainable, is not tenable, as no issues were framed by the learned District Judge in this regard. Even otherwise, from the order of reference dated 11-2-2000 it is manifestly clear that the plaintiff received the award under protest on 24-11-99 whereas, he had already filed application under Section 18 on 22-9-99. 19. The contention of the defendants that compensation should have been fixed on the basis of the rates prevailing in the year 1974 when the physical possession of the disputed land was taken from the plaintiff can also not be accepted, as the acquisition proceedings were initiated at the request of the Board only in the year 1999 when notifications under Sections 4(1) and 6 of the Act were published. Section 23 deals with the matters to be considered in determining compensation. Sub-section (1) of Section 23 provides that the market value of the land at the date of publication of notification under Section 4 sub-section (1) is to be taken into consideration for detem1ining the amount of compensation. 20. In Shree Vijay Cotton & Oil Mills Ltd.-1 (Supra), possession of the land was taken in the year 1949. A notification under Section 6(1) of the Act was published in February, 1955. Learned District Judge held that the plaintiff was entitled for compensation on the basis of market value of the land on the date of notification under Section 6 of the Act. A notification under Section 6(1) of the Act was published in February, 1955. Learned District Judge held that the plaintiff was entitled for compensation on the basis of market value of the land on the date of notification under Section 6 of the Act. The Hon'ble Supreme Court in para-13 of the judgment has observed that there is no dispute that under the Act the claimant is entitled to compensation at the rate of the market value of the land on the date of notification under Section 4 of the Act. 21. In Manipur Tea Co. Pvt. Ltd.-2 (Supra), it has been observed that while determining compensation under the Land Acquisition Act, what is required to be determined is the prevailing market value of the land as on the date of notification under Section 4 (1) of the Act. 22. Therefore, we are of the considered opinion that there is no force in the arguments advanced by learned counsel for the appellants that for the purposes of determining compensation, the market rate prevailing in the year 1974 ought to have been taken. 23. Next question for our consideration is - whether the appellant Housing Board is a necessary party and whether the liability could also be fastened upon the Board jointly and severally? 24. The land in question was allotted to the Board in the year 1974. After the allotment, the Board constructed 82 residential houses and sold the same to its consumers. Though, the Board has already paid premium fixed by the State Government at the tin1e of allotment of disputed land as also the other land, however, the civil suit filed by the plaintiff against vesting of the disputed land was decreed and the plaintiff was declared to be owner, thereafter the land acquisition proceeding was initiated on the request of the Board. Section 20 reads as under: "20. Section 20 reads as under: "20. Service of no tic e.-The Court shall thereupon cause a notice specifying the day on which the Court will proceed to determining the objection, and directing their appearance before the Court on that day, to be served on the following persons, namely:- (a) the applicant; (b) all persons interested in the objection, except such (if any) of them as have consented without protest to receive payment of the compensation awarded; and (c) in the objection is in regard to the area of the land or to the amount of compensation, the Collector." 25. Since the land was acquired for the purposes of the Board and, therefore, the Board is a necessary party interested in the objection raised by the plaintiff for enhancement of the compensation and, therefore, learned District Judge has rightly held that the defendants are jointly and severally liable for satisfying the award. 26. The 3rd question for our consideration is - whether learned District Judge was justified in fixing the price of chunk of land on the basis of comparable instances of small plots on the basis of Collector's guidelines issued for the relevant years in this regard or whether learned District Judge ought to have made some allowances in the instant case? 27. In the instant case, indisputably, the possession of 97 acres of land was handed over to the Board in the year 1974 including the disputed land; the suit filed by the plaintiff was finally decreed in the year 1986; the land acquisition proceeding was initiated in the year 1999 only after direction was issued by the High Court in a writ petition filed by the plaintiff; learned District Judge has fixed the price of the land by taking into consideration the guidelines of the Collector issued for the year 1999 fixing the rates of plots for residential purposes. The market value has been determined by fixing the average value of the residential plots at the rate of Rs. 135/- per sq. ft. as per the guidelines of Ex.-P/20 & Ex.-P/21-A. 1/3rd deduction towards development expenditure has been made from the average value so fixed and accordingly, compensation has been fixed by considering the market value at the rate of Rs.90/- per sq. ft.. 28. The document of Ex.-P/20 & Ex.-P/21-A has been filed and proved by the plaintiff. It is the guideline issued by the Collector. ft.. 28. The document of Ex.-P/20 & Ex.-P/21-A has been filed and proved by the plaintiff. It is the guideline issued by the Collector. The price has been fixed by taking into consideration the rates fixed by the Collector as per above guidelines. Paras-14 and 14-A of the aforesaid guidelines are reproduced as under:-' 29. Learned District Judge while determining the value of the land has relied upon the oral evidence of the plaintiff and his witnesses and the guidelines of the Collector fixing the market value for the year 1998-99 in Durg township/municipal area, however, the guidelines reproduced hereinabove have not been taken' into consideration for determining the value. 30. Thus, considering the size of the land acquired by the State and keeping I in view the guidelines issued by the Collector reproduced hereinabove, we are of the opinion that the learned District Judge ought to have fixed the price at the rate of 40% of the average rate of the plots after making 1/3rd deduction towards development charges. Learned District Judge has fixed the compensation at the rate of Rs.90 per sq. ft. whereas, the amount of compensation payable to the plaintiff should have been calculated by taking the prevailing market rate at the rate of Rs.36/- per sq. ft. (40% of Rs.90/-) for the entire land ad measuring 2.81 acres i.e. Rs.1,22,403.9 sq. ft.. Thus, total amount of compensation for which the plaintiff was entitled comes to Rs.44,06,508/-. The amount of solatium at the rate of 30% is Rs. 13,21,952/- and if the san1e is added to the above amount, it comes to Rs.57,28,460/-. The plaintiff has already received compensation of Rs. 6,57 ,918/-less income tax. By deducting this amount, the plaintiff is entitled for Rs.50,70,542/-. 31. In the result, the appeals are partly allowed and the award passed in favour of the plaintiff is modified in the following terms:- The appellants are jointly and severally liable to pay a sum of Rs.50,70,542/- to the legal heirs of the original plaintiff. The appellants/defendants shall also pay simple interest on the aforesaid amount at the rate of 9% per annum from the date of notification till the date of realization. The amount deposited by the appellants shall be disbursed to the plaintiff and the balance amount, if any, shall be paid by the appellants within a period on months. The appellants/defendants shall also pay simple interest on the aforesaid amount at the rate of 9% per annum from the date of notification till the date of realization. The amount deposited by the appellants shall be disbursed to the plaintiff and the balance amount, if any, shall be paid by the appellants within a period on months. If the appellants fail to pay the aforesaid amount within the stipulated period, in that case, the appellants shall pay interest at the rate of 15% per annum from 26-8-99 till the date of realization. The appellants shall bear the cost of litigation through out. Appeal Partly Allowed.