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Himachal Pradesh High Court · body

2015 DIGILAW 1125 (HP)

Land Acquisition Collector v. Bhimi Ram

2015-08-18

RAJIV SHARMA

body2015
JUDGMENT : Justice Rajiv Sharma, Judge. This appeal is directed against the judgment dated 2.7.2010 rendered by the Additional District Judge, Fast Track Court, Kullu in Reference Petition No. 33 of 2009. 2. ?Key facts? necessary for the adjudication of this appeal are that notification under section 4 of the Land Acquisition Act, 1894 was issued on 2.4.2005. It was given vide publicity. It was published in Rajpatra on 13.6.2005, Amar Ujala on 14.4.2005 and Hindustan Times on 15.4.2005. Public notice was issued on 12.5.2005. Notifications under sections 6 and 7 were issued on 10.11.2005. The Land Acquisition Collector awarded a sum of Rs. 3,32,68,516/- as market value of the houses/structures. He awarded 30% solatium and 12% additional amount was also awarded. Respondent filed a Reference Petition No.33 of 2009 before the Additional District Judge, Fast Track Court, Kullu against the award made by the Land Acquisition Collector. According to the respondent, acquired structures were situated adjacent to Sainj Bazar. Offices of HPPWD, HPSEB, Rest House, Central School etc. were adjacent to the acquired structures. One structure was constructed in the year 2002 and its value was not less than Rs. 40,00,000/-. The other structure was also constructed in the year 2002 and its value was not less than Rs. 60,00,000/-. The value of third structure was Rs. 20,00,000/-. He was also getting rent of Rs. 11,000/- per month. 3. Reply was filed by the appellants. According to the averments made in the reply, structures were situated at a distance of 2 KMs from Sainj Bazar. The houses were being used for residential purposes and no commercial activity was being carried out. The value of the houses was got assessed by the competent official from HPPWD. 4. Issues were framed by the Additional District Judge, Fast Track Court, Kullu on 11.12.2009 and the additional issues were framed on 17.3.2010. Award was made by the Additional District Judge, Fast Track Court, Kullu in favour of the respondent. Hence, the present appeal. 5. Mr. Parmod Thakur, learned Additional Advocate General, has vehemently argued that compensation was to be paid from the date of taking over the possession and not from the date of notification. According to him, the reference court has awarded the original cost of the house without making any depreciation and has also allowed 27.4% increase in the cost of material. 6. Mr. According to him, the reference court has awarded the original cost of the house without making any depreciation and has also allowed 27.4% increase in the cost of material. 6. Mr. Naveen K. Bhardwaj has supported the award dated 2.7.2010. 7. I have heard the learned counsel for the parties and have gone through the record carefully. 8. Reference court has not relied upon the report furnished by PW-2 Nihal Singh. There was no proof that the property was rented out at the rent of Rs. 11,000/- per month. However, fact of the matter is that reference court has relied upon statement of RW- 1 G.C. Gupta. According to him, value was assessed by him as per H.P.S.R. 1999. He has admitted that the cost of material has increased from 1999 to 2005 and the increase was to the extent of 27.4%. The increase of 27.4% was not provided to the respondent. Learned reference court has rightly held respondent entitled to the market value assessed by RW-1 G.C. Gupta without depreciation alongwith increase @ 27.4%. The compensation was to be paid from the date of notification under section 4 of the Land Acquisition Act and not from the date of taking over possession of the property. 9. Their Lordships of the Hon'ble Supreme Court in Union of India vs. Savjiram and another, (2004) 9 SCC 312 have held that after calculating the cost of construction at the rate prevalent at the time of fixing of compensation or working out the present value of materials there is no scope for any further deduction. Their Lordships have held as under: “[9] A bare reading of para 44 shows that it is a method of calculation indicated relating to the computation of the compensation. The compensation for houses and buildings are required to be calculated on (a) the present value of materials, (b) in addition to the cost of construction at present rates. Both the components for working out the compensation relate to present value of the materials and cost of construction at present rates less the value of any materials made over to the proprietor. Obviously, the calculation has to be done on the basis of the present value or the present rates, as the case may be. The expression 'present' means in existence at the time at which something is spoken or written, being in a specified place, thing. Obviously, the calculation has to be done on the basis of the present value or the present rates, as the case may be. The expression 'present' means in existence at the time at which something is spoken or written, being in a specified place, thing. Grammatically, it means denoting a tense of verbs used when the action or event described is occurring at the time of utterance or when the speaker does not wish to make any explicit temporal reference. It also means the time being, now. Commonly, it denotes existence of a particular thing or a matter at the time of consideration. Obviously therefore after arriving at the cost of construction at the prevalent rate at the time of fixing the compensation or working out the value of the materials there is no scope for making any further deduction. [10] Generally speaking depreciation is an allowance for the diminution in the value to wear and tear of capital asset employed by an assessee in his business. Black's Law Dictionary (5th Edn.) defines depreciation to mean, inter alia : "A fall in value; reduction of worth. The deterioration, or the loss or lessening in value, arising from age, use and improvements, due to better methods. A decline in value of property caused by wear or obsolescence and is usually measures by a set formula which reflects these elements over a given period of useful life of property. Consistent, gradual process of estimating and allocating cost of capital investments over estimated useful life of asset in order to match cost against earnings." [14] To put it differently, depreciation is the measure of the effective life of an asset owing to use or obsolescence during given period. [15] Therefore, the stand of the appellant-Union with regard to depreciation has no substance. [16] The other relevant question which needs to be determined is the essence of what is provided in paras 43 and 44 of the Manual. A bare reading of para 43 shows that when any house, building or trees on the land to be acquired, should not be required by the Government. The owner is given the option of removing it within a reasonable period to be fixed by the Collector. A bare reading of para 43 shows that when any house, building or trees on the land to be acquired, should not be required by the Government. The owner is given the option of removing it within a reasonable period to be fixed by the Collector. The option is to be given by the Collector and it is for the owner to avail the option and remove the materials within such time as may be fixed by the Collector. Once the option of removing the articles is exercised, the value of such materials has to be deducted from the sum payable as compensation, in case payment has not been made already. In case compensation has already been paid, it is to be recovered from the owner prior to removal of articles. Under para 43 at first Government has to decide whether the house, building or trees standing on the land are required by the Government or not, and in case it is not required the option of removal is given. As provided in Para 44, from the compensation worked out on the basis of procedure laid down in the said para, value of materials made over to the proprietor has to be deducted. The combined reading of paras 43 and 44 make the following position clear. Firstly, the Government has to take a decision whether the house, buildings and trees standing on the land are required by the Government. In case it is not required, the owner is allowed the option to remove the house, building or the trees as the case may be, within a reasonable period. The period has to be fixed by the Collector and the value of materials removed is to be determined in the award. The amount determined has to be deducted from the sum payable as compensation, in case it has not been paid; and if it has already been paid, then there shall be recovery of the amount from the owner prior to the removal of the materials. The value of the materials made over to the proprietor has to be deducted from the compensation.” 10. Thus, no deprecation could be made in view of the law laid down by their Lordships of the Hon'ble Supreme Court in the judgment citied hereinabove. 11. The value of the materials made over to the proprietor has to be deducted from the compensation.” 10. Thus, no deprecation could be made in view of the law laid down by their Lordships of the Hon'ble Supreme Court in the judgment citied hereinabove. 11. In view of the analysis and discussion made hereinabove, there is no merit in the present appeal and the same is dismissed. Pending application(s), if any, also stands disposed of. There shall, however, be no order as to costs.