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Judgment
CMP(M) No.1234 of 2016
In view of the grounds taken in the application, duly supported by an affidavit, the delay in filing the appeal is condoned. The application stands disposed of. The appeal be registered.
RFA No.123 of 2017
By medium of this petition under section 54 of the Land Acquisition Act, the appellant has assailed the award passed by the learned Additional District Judge-II, Shimla.
Briefly stated facts of the case are that the land denoted by Khasra Nos.1215 and 1216 kitas 2 measuring 1507.98 meters situated in Up-Mohal Bamloi, Mohal Station Ward Chhotta Shimla was acquired under the Land Acquisition Act, 1894 (for short "Act") for the purpose of general use of Central Potato Research Institute, Shimla.
Notification to this effect under section 4 of the Act was issued by the Government of Himachal Pradesh on 7.9.1998. There is no dispute as regards the publication of various notices as also the follow up action required to be taken under the law was duly followed for acquisition of the land and the dispute is only confined to the enhanced amount of compensation awarded by the learned court below.
It is vehemently argued by the learned Assistant Solicitor General of India that the Reference Court has taken exemplar sale deeds which pertained to small pieces of land and thus could not have been made the basis for fixing the market value of the land.
I have heard the learned counsel for the parties and have gone through the records.
At the outset it may be noticed that the learned court below had taken great pains to have culled out the principles to determine the market value by referring the judgments of the Hon''ble Supreme Court and it was thereafter that it fixed market value of the land.
What would be the factors that would determine the market value of the land has been subject matter in various decisions of the Hon''ble Supreme Court and many of such decisions have been taken note of in a recent judgment by the Hon''ble Supreme Court in Major General Kapil Mehra and others vs. Union of India and another, (2015) 2 SCC 262, wherein it was observed as under:
"[10] Market Value: First question that emerges is what would be the reasonable market value which the acquired lands are capable of fetching. While fixing the market value of the acquired land, the Land Acquisition Officer is required to keep in mind the following factors:- (i) existing geographical situation of the land; (ii) existing use of the land; (iii) already available advantages, like proximity to National or State Highway or road and/or developed area and (iv) market value of other land situated in the same locality/village/area or adjacent or very near to the acquired land.
[11] The standard method of determination of the market value of any acquired land is by the valuer evaluating the land on the date of valuation publication of notification under Section 4(1) of the Act, acting as a hypothetical purchaser willing to purchase the land in open market at the prevailing price on that day, from a seller willing to sell such land at a reasonable price. Thus, the market value is determined with reference to the open market sale of comparable land in the neighbourhood, by a willing seller to a willing buyer, on or before the date of preliminary notification, as that would give a fair indication of the market value.
[12] In Viluben Jhalejar Contractor v. State of Gujarat, 2005 4 SCC 789, this Court laid down the following principles for determination of market value of the acquired land: (SCC pp.796-97, paras 17-20)
"17. Section 23 of the Act specifies the matters required to be considered in determining the compensation; the principal among which is the determination of the market value of the land on the date of the publication of the notification under sub-section (1) of Section 4.
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 therefor. 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.
Market value is ordinarily the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase. Where definite material is not forthcoming either in the shape of sales of similar lands in the neighbourhood at or about the date of notification under Section 4(1) or otherwise, other sale instances as well as other evidences have to be considered.
The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis- -vis the land under acquisition by placing the two in juxtaposition. .."
[13] The courts adopt comparable sales method for valuation of land while fixing the market value of the acquired land. Comparable sales method of valuation is preferred rather than methods of valuation of land such as capitalization of net income method or expert opinion method, because it furnishes the evidence for determination of the market value of the acquired land at which the willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issuance of notification under Section 4 of the Act.
[14] While taking comparable sales method of valuation of land for fixing the market value of the acquired land, there are certain factors which are required to be satisfied and only on fulfillment of those factors, the compensation can be awarded according to the value of the land stated in the sale deeds. In Karnataka Urban Water Supply and Drainage Board and Ors. v. K.S. Gangadharappa & Anr., 2009 11 SCC 164, factors which merit consideration as comparable sales are, interalia, laid down as under:-
"It can be broadly stated that the element of speculation is reduced to minimum if the underlying principles of fixation of market value with reference to comparable sales are made:
(i) when sale is within a reasonable time of the date of notification under Section 4(1);
(ii) It should be a bona fide transaction;
It should be of the land acquired or of the land adjacent to the land acquired; and
It should possess similar advantages.
It is only when these factors are present, it can merit a consideration as a comparable case (See Special Land Acquisition Officer v. T. Adinarayan Setty, 1959 AIR(SC) 429 These aspects have been highlighted in Ravinder Narain v. Union of India, 2003 4 SCC 481."
[15] Appellants have produced Exs A7 to A10-four perpetual lease deeds of residential plots in Pocket C of Vasant Kunj Area between September 1995 to December 1996, the details of which are as under:
Exts Sale Date. Plot No Size(Sq m) Sale Price (Rs) Rate (Rs per square yard
A-7 22-9-1995 59C 218 5,75,05,000 28,719
A-8 2-2-1996 5C 220 96,55,000 36,695
A-9 2-2-1996 8C 231 1,01,61,000 36,779
A-10 10.12.1996 13C 242 1,37,60,000 47,542
[16] Exs A7 to A10 are lease deeds of small plots executed by DDA. Plots in the above lease deeds are in the same vicinity of the acquired land and High Court had taken the same as comparable sales. The size of the plots covered in the exemplars are smaller. If there is a dissimilarity in regard to the area, it is open to the court to make proper deduction towards smallness of area. We find no error in the approach of the High Court taking Exs A7 to A10 as comparable sales for fixation of market value.
[17] The High Court has taken average of sale price of Exs A7 to A10 and deducted 40% towards smallness of the plot taken for comparison, further deducted one third towards development. Though we may finally affirm the rate fixed by the High Court, for the reasons stated infra we fix the market value in accordance with the well settled principles laid down by this Court.
[18] Determination of Market Value on the basis of average price paid under sale transactions: For ascertaining the fair market value of the acquired land, High Court adopted the ''average method'' by averaging the sale price of Exs A-7 to A-10 and calculated the rate at Rs.37,433.75 paise per sq. yard. The appellants contend that when land is being compulsorily taken away, the landholder is entitled to claim the highest value which similar land in the locality is shown to have fetched in a bonafide transaction and High Court was not justified in averaging the sale prices of four perpetual lease deeds. Appellants placed reliance upon the judgments of this Court in M. Vijayalakshmamma Rao Bahadur vs. Collector,1969 1 MLJ 45 and State of Punjab and Anr. vs. Hans Raj (D) by Lrs. And Ors., 1994 5 SCC 734. In Hans Raj case it was held as under:
"4. Having given our anxious consideration to the respective contentions, we are of the considered view that the learned Single Judge of the High Court committed a grave error in working out average price paid under the sale transactions to determine the market value of the acquired land on that basis. As the method of averaging the prices fetched by sales of different lands of different kinds at different times, for fixing the market value of the acquired land, if followed, could bring about a figure of price which may not at all be regarded as the price to be fetched by sale of acquired land. One should not have, ordinarily recourse to such method. It is well settled that genuine and bona fide sale transactions in respect of the land under acquisition or in its absence the bona fide sale transactions proximate to the point of acquisition of the lands situated in the neighbourhood of the acquired lands possessing similar value or utility taken place between a willing vendee and the willing vendor which could be expected to reflect the true value, as agreed between reasonable prudent persons acting in the normal market conditions are the real basis to determine the market value."
[19] Referring to Hans Raj''s case in Anjani Molu Dessai vs. State of Goa And Anr., 2010 13 SCC 710, this Court held as under:-
"20. The legal position is that even where there are several exemplars with reference to similar lands, usually the highest of the exemplars, which is a bonafide transaction, will be considered. Where however there are several sales of similar lands whose prices range in a narrow bandwidth, the average thereof can be taken, as representing the market price. But where the values disclosed in respect of two sales are markedly different, it can only lead to an inference that they are with reference to dissimilar lands or that the lower value sales is on account of undervaluation or other price depressing reasons. Consequently, averaging cannot be resorted to. We may refer to two decisions of this Court in this behalf."
[20] Where the lands acquired are of different type and different locations, averaging is not permissible. But where there are several sales of similar lands, more or less, at the same time, whose prices have marginal variation, averaging thereof is permissible. For the purpose of fixation of fair and reasonable market value of any type of land, abnormally high value or abnormally low value sales should be carefully discarded. If the number of sale deeds of the same locality and the same period with short intervals are available, the average price of the available number of sale deeds shall be considered as a fair and reasonable market price. Ultimately, it is in the interest of justice for the land losers to be awarded fair compensation. All attempts should be taken to award fair compensation to the extent possible on the basis of their accessibility to different kinds of roads, locational advantages etc. Four perpetual lease deeds A-7 to A-10 relied upon by the appellants are of the same locality Vasant Kunj Residential Scheme and relate to the period ranging from September 1995 to December 1996, but they are just prior to Section 4(1) notification. In our view, the High Court was justified in taking the average of the said four exemplars and approach adopted by the High Court in averaging the sale prices of Exs A7 to A10 cannot be said to be perverse.
Bearing in mind the aforesaid exposition of law, it would be noticed that the learned court below had as many as 10 sale deeds before it but then it took into consideration three sale deeds, which were in close proximity to the time of acquisition of land and had been executed in the year 1999 itself and thereafter worked out the amount at Rs. 1810/- per square meter by adding total amount of the sale consideration in these three deeds and thereafter divided the same with the total area mentioned in the sale deeds and in this manner worked out the consideration to be Rs. 1810/- per square meter.
It is not in dispute that the land in question is situated in prime location, is convenient for both residential and commercial purposes and is a stone''s throw from the High Court. This land is virtually adjoining the main road (Cart Road), Shimla and thus by no standard can the enhanced compensation of Rs. 1810/- be termed to be excessive much less arbitrary.
The exemplar sale deeds relied upon by the learned court below were not even so small when compared to the total area acquired, which itself is hardly 1507.98 square meters.
In view of aforesaid discussion, I find no merit in the appeal and the same is dismissed leaving the parties to bear their own costs.