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Judgment
K.L. Manjunath, J.—The Special Land Acquisition Officer and Asst. Commissioner These appeals arise out of the judgment and award passed by the IIIrd Additional Senior Civil Judge, Mangalore in LAC No. 7/2004, dated 26.08.2010.
MFA No. 10128/2010 is filed by the claimants being not satisfied with the determination of the market value by the Reference Court. MFA No. 25/2011 is filed by the Karnataka Housing Board contending that the determination of the market value by the Reference Court is on higher side. Therefore, these two matters are heard and disposed off together.
The admitted facts in these two appeals are as hereunder:
5 acres, 12 cents of land in survey No. 168/5 and 1 acre, 76 cents of land in survey No. 169/1, in all measuring 6 acres, 88 cents situated in Padavu Village in Mangalore was notified for acquisition for the benefit of the Karnataka Housing Board for formation of residential layout under preliminary notification dated 06.03.1999. The final notification was published on 22.04.1999. The Land Acquisition Officer passed an award dated 21.06.2001, determining the market value at Rs. 11,12,205/- per acre.
Being not satisfied with the award of the Land Acquisition Officer, the claimants sought a reference under Section- 18 of the Land Acquisition Act. Accordingly, the same was referred to the Reference Court. Both the parties have let-in evidence. Thereafter, the Reference Court determined the market value of the land acquired at Rs. 33,75,000/- per acre. Thereafter, he has deducted 50% of the amount towards developmental charges and passed an award at Rs. 16,87,500/- per acre, with other statutory benefits.
Being not satisfied with the same, the claimants have filed an appeal for enhancement. Similarly, the Karnataka Housing Board has filed an appeal for reduction. Therefore, these matter are heard together.
Shri P.N. Harish, learned counsel for the claimants taking us through the evidence of the claimants and documents relied upon by the parties contend that the determination of the market value by the Reference Court at Rs. 33,75,500/- per acre or otherwise at Rs. 33,750/- per cent is on lower side. He further contends that considering the potentiality of the land in question and the development that has taken place as on the date of the notification, deduction of 50% towards the cost of development is contrary to the judgment of the Hon''ble Supreme Court in Mohinder Singh Vs. State of Haryana, . According to him, the market value determined at Rs. 33,750/- is contrary to the guidance value fixed by the State of Karnataka vide Annexure-P2 and further the deduction of 50% as developmental charges has to be reduced to 25% in terms of the aforesaid judgment.
Per contra, Shri. Basavaraj V. Sabarad, learned counsel appearing for the Karnataka Housing Board contends that the determination of the market value by the Reference Court at Rs. 33,750/- per cent is on higher side. According to him, the Hon''ble Supreme Court in the case of Chandrashekar (D) by L.Rs. and Others Vs. Land Acquisition Officer and Another, has held that the permissible deduction towards cost of development shall be upto 75%. Therefore, he requests the court to reduce the compensation awarded by the Tribunal.
Having heard the learned counsel for the parties, the only question to be considered by us in this appeal is:
"Whether the determination of the market value by the Reference Court requires to be interfered with by this Court?"
We have seen the evidence of PW-1 and also the evidence of RW-1. RW-1, Shri. Sudheer P. Banare, Assistant Executive Engineer of the Karnataka Housing Board. In his evidence, he has stated that the land in question was acquired by the Karnataka Housing Board for formation of residential layout. Accordingly a layout was formed. In all, they have carved 238 sites and the sites have been sold at the market rate. Exhibit-R5 is the award passed by the Land Acquisition Officer. In the evidence of RW-1, he has stated that in and around the lands acquired, properties have been developed for various commercial and residential purpose and on perusal of Exhibit-R5 the copy of the award, it discloses that as on the date of passing of the award in and around Kudupu Village and Padavu Village, the properties were developed for commercial and residential purposes. Some of the lands were sold much prior to the acquisition at Rs. 30,000/- per cent. It is also stated that the property is well connected with the main road and that the property is situated at a distance of 8 km., torn the bus stand of Mangalore and Deputy Commissioner''s officer is adjoining to this property. The Housing Board has acquired the land for formation of the layout under the notification of the year 1993. In the said area, residential layout was formed long back and sites have been allotted to various allottees. It also disclosed that the land in question is converted for residential purpose and it has also come in the evidence that there is dearth of land for formation of residential layout in and around Mangalore as the same is surrounded by Arabian sea.
Exhibit-P2 is the guidance value fixed by the State of Karnataka for the purpose of registration of the properties. Exhibit-P2 was prepared much prior to the date of acquisition, it was notified on 01.07.1999. On perusal of Exhibit-P2 in regard to non-agricultural land without municipal number, the maximum value that has been fixed is Rs. 60,000/- per cent, which is equal to Rs. 60 lakh per acre and in the same document it is also stated the minimum value fixed for the property which is facing road side and a separate valuation is also given to the properties situated in the interior place provided the road width is 10 feet and if the road width is less than 10 feet in regard to Padavu Village, 30 different locations are identified for purpose of determining the market value which varies from Rs. 68,750/- to Rs. 27,500/-, if the properties are situated abutting the road. Similarly if the properties are situated in interior place facing road which is more than 10 feet width, the value determined is Rs. 60,500/- to Rs. 24,220/-. If the road width is less than 10 feet from Rs. 55,000/- to Rs. 22,000/-. If any property does not fall within Sl. No. 1 to 29 of Padavu Village in such circumstance, the market value fixed for the purpose of registration is Rs. 27,500/-, if the properties are abutting the road and having other facility of more than 10 feet road width and Rs. 22,000/- if the road width is less than 10 feet. It is needless to state that the Government would fix the guidance value considering the minimum market value of the property for the purpose of collection of stamp duty.
The Reference Court took into account the proximity of the scheduled land to the lands as mentioned in the guidelines. The land situated at Sl. No. 24 and 25, pertaining to Shri. Kulshekar is the surrounding land to the scheduled lands. It is on this basis that the valuation was held. We are of the considered view that the valuation held by the reference court is based on acceptable material. When the land under acquisition are similar to the lands wherein the guidance value has been stated and when admittedly the guidance value is far less than the market "value, we find no error committed by the reference court to hold the guidance value for, the purpose of compensation. Even though the market value could be considered at a higher rate than the guidance value in terms of Exhibit-P2, the guidance value as adopted by the reference court requires to be accepted. The reasoning of the lower court is just and appropriate. It is based on the guidance value. Hence we find no good ground to interfere. Hence, the findings of the reference court at Rs. 33,75,000/- per acre is appropriate.
In the instant case, the reference court has determined the market value of the appellant at Rs. 33,75,000/- per acre, namely Rs. 3,370/- per cent. Then the question is what would be the percentage of deduction in the instant case Considering the nature of the location of the property, it is no doubt true that the Hon''ble Supreme Court in the case of Chandrashekar (D) by L.Rs. and Others Vs. Land Acquisition Officer and Another, , the judgment as relied upon by Mr. Sabarad, learned counsel for the Karnataka Housing Board has held that the upper limit for deduction is 75%. But the same cannot be a Golden Rule to deduct 75% in all cases. The aforesaid judgment was rendered by a coordinate bench of two judges of the Hon''ble Supreme Court. Subsequently, in 2013 a coordinate bench of three judges of the Hon''ble Apex Court has ruled the manner in which the deduction has to be considered keeping in mind the location of the property. In the larger bench judgment of the Hon''ble Supreme Court in the case of Mohinder Singh Vs. State of Haryana, , their lordships have held at para-5 and 7 as follows:
"5. We carefully considered the submissions and perused the record. The only point for consideration in these appeals is as to what would be the reasonable deduction towards development charges, to be made from the market value. With regard to the location and potential of the land, the Reference Court held that the acquired land adjoins the abadi of the township of Shahabad and it is in its municipal limits and it is in evidence that around this land there exit DAV College, Girls High School, cinema hall, cold storage, rice mills, grain market and private nursing homes and all the establishments have sprung up before the acquisition and the acquired land had great potential value for development of residential commercial and industrial units. The learned single Judge while referring to the contention of the State that the land in question was recorded as agricultural land has held that the State has produced no evidence to establish the same and on the contrary the testimony of PW 1 on oath that the land lied within the municipal limit of Shahabad remained unrebutted.
In our view, the High Court on the facts of the case was justified in taking into consideration the size of the plots which were exhibited for the purpose of comparison with the size of the plot acquired, but we are unable to uphold the cut of 40% which has been imposed by the High Court since the acquired lands are already within developed municipal limits and the deduction of 1/4th the market value made by the Reference Court is appropriate and liable to be restored."
In the aforesaid judgment, the larger bench has held that 40% would be reasonable deduction considering the location of the property. In view of the larger bench judgment of the Hon''ble Supreme Court, we are inclined to follow the same.
By following the judgment of the Hon''ble Supreme Court in the case of Mohinder Singh Vs. State of Haryana, , out of Rs. 33,75,000/-, we consider the deduction of 1/4th as being just appropriate in the facts of this case. Hence the market value of the claimants property has to be determined at Rs. 25,31,250/- (Rs. 33,75,000 less 1/4th). Accordingly, we hold that the claimants are entitled for a compensation of Rs. 23,31,250/- with other statutory benefits.
In the result, the appeal filed by the claimants in MFA No. 10128/2010 is allowed in part. The market value of the claimants properties. Is determined at Rs. 25,31,250/- per acre, with other statutory benefits and accordingly the appellants are entitled for proportionate cost. Consequently, MFA No. 25/2011 filed by the Housing Board is dismissed.