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Himachal Pradesh High Court · body

2016 DIGILAW 327 (HP)

Shankari v. State of H. P.

2016-03-23

RAJIV SHARMA

body2016
JUDGMENT : Rajiv Sharma, J. 1. Since common questions of law and facts are involved in both these appeals, the same were taken up together for hearing and are being disposed of by a common judgment. 2. RFA No. 49 of 2009 has been instituted against the land reference No.39-S/4 of 08/06 rendered by the learned District Judge (F), Shimla on 23.12.2008 whereby the reference court has awarded compensation of Rs. 5,32,416/- per bigha regardless the nature and category of the land alongwith statutory benefits. The State has also filed an appeal against the land reference No.39-S/4 of 08/06 dated 23.12.2008 for setting aside the award. According to the grounds taken in the appeal, the award made by the Land Acquisition Collector was in accordance with law. 3. The Government of Himachal Pradesh issued a notification under section 4 of the Land Acquisition Act, 1894 (hereafter referred to as the “Act” for brevity sake) to acquire the land of the claimants on 18.11.2003. The report under section 5-A(2) of the Act was sent to the Government on 7.4.2004. The notification under section 6 of the Act was issued on 17.6.2004. The notification under section 9 (1) of the Act was issued to the claimants and they were directed to appear before the Land Acquisition Collector on 17.8.2004 at 11.00 A.M. The Land Acquisition Collector assessed the value of the claimants’ land @ Rs. 80,000/- per bigha. The claimants filed a petition under section 18 of the Act seeking enhancement of compensation of their land before the learned District Judge. The reference petition was allowed by the District Judge on 23.12.2008 and he awarded compensation of the acquired land @ Rs. 5,32,416/- per bigha regardless the nature and category of the land and the structure on it @ Rs. 5,40,000/-. 4. Mr. B.S. Attri, learned counsel for the appellant, has vehemently argued that his clients were entitled to compensation @ Rs. 10,64,832/- alongwith statutory benefits. 5. Mr. Parmod Thakur, learned Additional Advocate General has vehemently argued that the learned Land Acquisition Collector has rightly assessed the market value of the claimants’ land @ Rs. 80,000/- per bigha. 6. I have heard the learned counsel for the parties and have gone through the award and record carefully. 7. The notification under section 4 of the Act was issued on 18.11.2004. PW-1 Gita Ram has proved Ex.P-1, i.e. record of consumer price index. 80,000/- per bigha. 6. I have heard the learned counsel for the parties and have gone through the award and record carefully. 7. The notification under section 4 of the Act was issued on 18.11.2004. PW-1 Gita Ram has proved Ex.P-1, i.e. record of consumer price index. 8. PW-2 Gauri Shankar has produced sale deed No.15 dated 15.1.2003 and sale deed No. 270 dated 26.6.2003 vide Ex.PW-2/A and Ex.PW-2/B. 9. PW-4 Uma Shankar has produced record of RFA No. 171/95 alongwith RFA No. 173/1995 and RFA No. 70 of 1996. 10. PW-6 Shankari Devi deposed that she was owner of the land. The compensation paid to her was inadequate. Chalaunti has all the facilities. Office of LIC is near Chalaunti. 11. RW-1 Saran Dass, Patwari has deposed that Chilondi is at a distance of one and half kilometer from Sanjauli. No land was sold in the village. He admitted that if the distance between Chilondi and Sanjauli Chowk is covered on foot it takes 5-10 minutes. He also admitted that the office of the LIC, Middle School and telephone exchange are in village Chilondi. 12. RW-3 O.P. Bhardwaj deposed that earlier the area was not developed and now the people have developed the same. In his cross-examination, he has admitted that he has not conducted survey. 13. RW-4 Bhajan Dass has proved average price vide Ex.RW-4/A. 14. The reference court has relied upon Ex.PX-1. This award is with reference to the same notification under section 4 of the Act. It pertains to the construction of Sanjauli-Dhalli by pass road. According to Ex.PX-1, the price of the acquired land was assessed at Rs. 5,32,416/- per bigha. The reference court has initially assessed the value @ Rs. 10, 64,832/- per bigha, but has made 50% deductions for development charges. Since the land has been acquired for the purpose of construction of road, no developments were to be made. It is only in those cases where the land is acquired for the purpose of housing colony and allied matters. Thus, the reference court has erred in law by making 50% deductions towards development charges. Since the land acquired was for the construction of road, the classification of land was irrelevant. However, considering the smallness of the plot sold vide sale deed Ex.PW-2/A, the deductions of 15% is permissible and, as such, the value of per bigha land would be Rs. Since the land acquired was for the construction of road, the classification of land was irrelevant. However, considering the smallness of the plot sold vide sale deed Ex.PW-2/A, the deductions of 15% is permissible and, as such, the value of per bigha land would be Rs. 10,64,832-15%, i.e. Rs.10,64,832- Rs.1,59,725 = Rs. 9,05,107/-. 15. Their Lordships of the Hon’ble Supreme Court in Shaji Kuriakose and another versus Indian Oil Corporation Limited and others, (2001) 7 SCC 650 have laid down the following factors for determination of market value of acquired land inter alia: 1) The sale must be a genuine transaction; 2) that the sale deed must have been executed at the time proximate to the date of issue of notification under Section 4 of the Act, 3) that the land covered by the sale must be in the vicinity of the acquired land, 4) that the land covered by the sales must be similar to the acquired land and 5) that the size of plot of the land covered by the sales be comparable to the land acquired. Their Lordships have held as under: [3] It is no doubt true that Courts adopt Comparable Sales Method of valuation of land while fixing the market value of the acquired land. While fixing the market value of the acquired land, Comparable Sales Method of valuation is preferred than other methods of valution of land such as Capitalisation of Net Income Method or Expert Opinion Method. Comparable Sales Method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it has been sold in open market at the time of issue of notification under Section 4 of the Act. However, Comparable Sales Method of valuation of land for fixing the market value of the acquired land is not always conclusive. There are certain factors which are required to be fulfilled and on fulfillment of those factors the compensation can be awarded, according to the value of the land reflected in the sales. However, Comparable Sales Method of valuation of land for fixing the market value of the acquired land is not always conclusive. There are certain factors which are required to be fulfilled and on fulfillment of those factors the compensation can be awarded, according to the value of the land reflected in the sales. The factors laid down inter alia are : (1) the sale must be a genuine transaction, that (2) the sale-deed must have been executed at the time proximate to the date of issue of notification under Section 4 of the Act, that (3) the land covered by the sale must be in the vicinity of the acquired land, that (4) the land covered by the sales must be similar to the acquired land and that (5) the size of plot of the land covered by the sales be comparable to the land acquired. If all these factors are satisfied, then there is no reason why the sale vlaue of the land covered by the sales be not given for the acquired land. However, if there is a dissimilarity in regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is open to Court to proportionately reduce the compensation for acquired land than what is reflected in the sales depending upon the disadvantages attached with the acquired land. In the present case, what we find is that the first two factors are satisfied. The sale transaction covered by the sale Ex. A-4 is genuine, inasmuch as sale was executed in proximity to the date of notification under Section 4 of the Act. However, there is a difference in the similarity in the land acquired and the land covered by Ex.A-4. The land covered by Ex. A-4 is situated at Kottayam and Ernakulam, PWD Road, whereas the acquired land is situated at a distance of 3 furlong from the main road. There is no access to the acquired land and there exists only an internal mud road which belonged to one of the claimants, whose land has also been acquired. Further, the land coverd by Ex.A-4 is a dry land and whereas the acquired land is a wet land. After acquisition, the acquired land has to be re-claimed and a lot of amount would be spent for filling the land. Further, the land coverd by Ex.A-4 is a dry land and whereas the acquired land is a wet land. After acquisition, the acquired land has to be re-claimed and a lot of amount would be spent for filling the land. Moreover, the land covered by Ex.A-4 relates to a small piece of land which do not reflect the true market value of the acquired land. If it is often seen that a sale for a smaller plot of land fetches more consideration than larger or bigger piece of land. For all these reasons, the High Court was fully justified in lowering the rate of compensation than what was the market value of the land covered by Ex.A-4.We, therefore, do not find any infirmity in the judgment of the High Court.” 16. Their Lordships of the Hon’ble Supreme Court in Viluben Jhalejar Contractor (Dead) by LRs versus State of Gujarat, (2005) 4 SCC 789 have culled out the following principles to determine the market value of the acquired land: [18] One of the principles for determination of the amount of compensation for acquisition of land would be the willingness of an informed buyer to offer the price therefore. It is beyond any cavil that the price of the land which a willing and informed buyer would offer would be different in the cases where the owner is in possession and enjoyment of the property and in the cases where he is not. [21] Whereas a smaller plot may be within the reach of many, a large block of land will have to be developed preparing a layout plan, carving out roads, leaving open spaces, plotting out smaller plots, waiting for purchasers and the hazards of an entrepreneur. Such development charges may range between 20% and 50% of the total price. 17. Learned Single Judge of Karnataka High Court in The Special Land Acquisition Officer/Assistant Commissioner vs. Vyjanath (deceased by LRs), 2006 (1) AIR Kar R 691 has held that no deduction towards civic amenities is permissible. Deduction towards civic amenities is only in case where land is acquired for housing purpose. 18. Their Lordships of the Hon’ble Supreme Court in Nelson Fernandes and others vs Special Land Acquisition Officer, South Goa and others, (2007) 9 SCC 447 have held that where the land acquired is for laying railway line, question of development of the land would not arise. 18. Their Lordships of the Hon’ble Supreme Court in Nelson Fernandes and others vs Special Land Acquisition Officer, South Goa and others, (2007) 9 SCC 447 have held that where the land acquired is for laying railway line, question of development of the land would not arise. Their Lordships have further held that the purpose for which land acquired is relevant for deciding whether deduction by way of development charges required or not. Their Lordships have held as under: [25] Both the Special Land Acquisition Officer, the District Judge and of the High Court have failed to notice that the purpose of acquisition is for Railways and that the purpose is a relevant factor to be taken into consideration for fixing the compensation. In this context, we may usefully refer the judgment of this Court of Viluben Jhalejar Contractor (D) by Lrs. Vs. State of Gujarat reported in JT 2005 (4) SC 282. This Court held that the purpose for which the land is acquired must also be taken into consideration in fixing the market value and the deduction of development charges. In the above case, the lands were acquired because they were submerged under water of a dam. Owners claimed compensation of Rs. 40/- per sq. ft. LAO awarded compensation ranging from Rs. 35/- to Rs. 60/- per sq. mtr. Reference Court fixed the market value of the land at Rs. 200/- per sq. mtr. and after deduction of development charges, determined the compensation @ Rs. 134/- per sq. mtr. In arriving at the compensation, Reference court placed reliance on the comparative sale of a piece of land measuring 46.30 sq. metre @ Rs. 270 per sq. mtr. On appeal, the High Court awarded compensation of Rs. 180/- per sq. mtr. in respect of large plots and Rs. 200/- per sq. mtr. in respect of smaller plots. On further appeal, this Court held that since the lands were acquired for being submerged in water of dam and had no potential value and the sale instance relied was a small plot measuring 46.30 sq. mtr. whereas the acquisition in the present case was in respect of large area, interest of justice would be subserved by awarding compensation of Rs. 160/- per sq. mtr. in respect of larger plots and Rs.175/- per sq. mtr. for smaller plots. In Basavva (Smt.) and Ors. Vs. Spl. LAO and Ors. mtr. whereas the acquisition in the present case was in respect of large area, interest of justice would be subserved by awarding compensation of Rs. 160/- per sq. mtr. in respect of larger plots and Rs.175/- per sq. mtr. for smaller plots. In Basavva (Smt.) and Ors. Vs. Spl. LAO and Ors. reported in JT 1996 5 SC 580, this Court held that the purpose by which acquisition is made is also a relevant factor for determining the market value. 30. We are not, however, oblivious of the fact that normally 1/3 deduction of further amount of compensation has been directed in some cases. However, the purpose for which the land acquired must also be taken into consideration. In the instant case, the land was acquired for the construction of new BG line for the Konkan Railways. This Court in Hasanali Khanbhai & Sons & Ors. Vs. State of Gujarat, 1995 2 SCC 422 and L.A.O. vs. Nookala Rajamallu, 2003 (10) Scale 307 had noticed that where lands are acquired for specific purposes deduction by way of development charges is permissible. In the instant case, acquisition is for laying a railway line. Therefore, the question of development thereof would not arise. Therefore, the order passed by the High Court is liable to be set aside and in view of the availability of basic civic amenities such as school, bank, police station, water supply, electricity, high way, transport, post, petrol pump, industry, telecommunication and other businesses, the claim of compensation should reasonably be fixed @ Rs. 250/- per sq. mtr. with the deduction of 20%. The appellant shall be entitled to all other statutory benefits such as solatium, interest etc. etc. The appellants also will be entitled to compensation for the trees standing on the said land in a sum of Rs. 59,192 as fixed. I.A. No. 1 of 2006 for substitution is ordered as prayed for. 19. Their Lordships of the Hon’ble Supreme Court in Atma Singh (Dead) through LRs and others vs. State of Haryana and another, (2008) 2 SCC 568 have succinctly explained the general principles for determination of market value of the acquired land. Their Lordships have held as under: [4] In order to determine the compensation which the tenure holders are entitled to get for their land which has been acquired, the main question to be considered is what is the market value of the land. Their Lordships have held as under: [4] In order to determine the compensation which the tenure holders are entitled to get for their land which has been acquired, the main question to be considered is what is the market value of the land. Section 23(1) of the Act lays down what the Court has to take into consideration while Section 24 lays down what the Court shall not take into consideration and have to be neglected. The main object of the enquiry before the Court is to determine the market value of the land acquired. The expression 'market value' has been subject-matter of consideration by this Court in several cases. The market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when led out in most advantageous manner excluding any advantage due to carrying out of the scheme for which the property is compulsorily acquired. In considering market value disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded. The guiding star would be the conduct of hypothetical willing vendor who would offer the land and a purchaser in normal human conduct would be willing to buy as a prudent man in normal market conditions but not an anxious dealing at arms length nor facade of sale nor fictitious sale brought about in quick succession or otherwise to inflate the market value. The determination of market value is the prediction of an economic event viz., a price outcome of hypothetical sale expressed in terms of probabilities. See Thakur Kanta Prasad v. State of Bihar, AIR 1976 SC 2219 ; Prithvi Raj Taneja v. State of M. P., AIR 1977 SC 1560 ; Administrator General of West Bengal v. Collector, Varanasi, AIR 1988 SC 943 and Periyar v. State of Kerala, AIR 1990 SC 2192 . [5] For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. [5] For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like, water, electricity, possibility of their further extension, whether near about Town is developing or has prospect of development have to be taken into consideration. See Collector Raigarh v. Hari Singh Thakur, AIR 1979 SC 472 , Raghubans Narain v. State of U.P., AIR 1969 SC 465 and Administrator General, W. B. v. Collector Varanasi, AIR 1988 SC 943 . It has been held in Kaushalya Devi v. L.A.O. Aurangabad, AIR 1984 SC 892 and Suresh Kumar v. T.I. Trust, AIR 1980 SC 1222 that failing to consider potential value of the acquired land is an error of principle. 20. Their Lordships of the Hon’ble Supreme Court in Thakur Kuldeep Singh (Dead) through LRs and others versus Union of India and others, (2010) 3 SCC 794 have held that it is the duty of the Land Acquisition Collector and the court to take into consideration the nature of the land, its suitability, nature of the use for which the lands are sought to be acquired on the date of notification, income derived or derivable from or any other special distinctive feature which the land is possessed of, the sale transactions in respect of land covered by the same notification are all relevant factors to be taken into consideration in determining the market value. It is equally relevant to consider the suitability of neighbor-hood lands as are possessed of similar potentiality or any advantageous features or any special characteristics available. The Collector as well as the court should always keep in their mind that the object of assessment is to arrive at a reasonable and adequate market value of the land. Their Lordships have held as under: “11. The Collector as well as the court should always keep in their mind that the object of assessment is to arrive at a reasonable and adequate market value of the land. Their Lordships have held as under: “11. Sections 23 and 24 of the Act speak about the matters to be considered and to be neglected in determining compensation. Let us consider whether the appellants are entitled to higher compensation than that of the one fixed by the High Court or Union of India is justified in seeking reduction of the market value/compensation for the acquired land. 13. The Land Acquisition Collector as well as the Court should always keep in their mind that the object of assessment is to arrive at a reasonable and adequate market value of the land. While doing so, imagination should be eschewed and mechanical assessment of evidence should be avoided. More attention should be on the bona fide and genuine sale transactions as guiding star in evaluating the evidence. The relevant factor would be that of the hypothetical willing vendor would offer for the land and what a willing purchaser of normal human conduct would be willing to buy as a prudent man in normal market conditions prevailing in the open market in the locality in which the acquired lands are situated as on the date of notification under Section 4(1) of the Act. In other words, the Judge who sits in the armchair of the willing buyer and seek an answer to the question whether in the given set of circumstances as a prudent buyer he would offer the same market value which the court proposed to fix for the acquired lands in the available market conditions. The market value so determined should be just, adequate and reasonable.” 21. Their Lordships of the Hon’ble Supreme in Trishala Jain and another versus State of Uttaranchal and another, (2011) 6 SCC 47 have held that the sale instances even of smaller plots could be considered for determining the market value of a larger chunk of land with some deduction unless, there was comparability in potential, utilization, amenities and infrastructure with hardly any distinction. Their Lordships have held as under: 44. Their Lordships have held as under: 44. It is thus evident from the above enunciated principle that the acquired land has to be more or less developed land as its developed surrounding areas, with all amenities and facilities and is fit to be used for the purpose for which it is acquired without any further expenditure, before such land could be considered for no deduction. Similarly the sale instances even of smaller plots could be considered for determining the market value of a larger chunk of land with some deduction unless, there was comparability in potential, utilisation, amenities and infrastructure with hardly any distinction. On such principles each case would have to be considered on its own merits.” 22. Their Lordships of the Hon’ble Supreme Court in Himmat Singh and others versus State of Madhya Pradesh and another, (2013) 16 SCC 392, in a case where the reference court has made three tier deductions viz. (i) 25% for leaving out portions of acquired land for purpose of laying roads, drains etc., (ii) 25% towards expenses for development work, and (iii) 50% towards smallness of plots sold, which was approved by High Court, have held that such approach was clearly erroneous since respondent State had not even suggested that such development work was undertaken for purpose of laying railway line. Hence, deductions made under first two heads were unsustainable. 23. In the present case, there is neither any evidence nor any suggestion that such development was undertaken while constructing Sanjauli-Dhalli by pass road. 24. Accordingly, In view of the analysis and discussion made hereinabove, RFA No. 49/2009 is allowed and the award dated 23.12.2008 is modified to the extent that the market value of the claimant’s land is assessed Rs. 9,05,107/- per bigha alongwith statutory benefits. RFA No.294 of 2009 is dismissed. Pending application(s), if any, also stands disposed of. No costs.