Gauri Shankar vs State of Punjab

K.P. Bhandari, J.—This judgment will dispose of Regular First Appeal Nos. 1935 of 1989 and 2369 of 1989 as they arise out of common judgment and decree of the Additional District and Sessions Judge, Ferozepur passed on 10.4.1989. For the purposes of this judgment, facts have been taken from Regular First Appeal No. 1935 of 1989.

Land measuring 29 acres 3 kanals and 16 marlas situated in Ferozepur Cantt. was notified for acquisition for setting up a grain market through notification u/s 4 of the Land Acquisition Act, 1894 (for short ''the Act'') issued on 15.3.1976. On 17.3.1976 notification u/s 6 of the Act was also issued.

The Collector gave the award on 26.3.1982. The Collector allowed compensation at the rate of Rs. 10,000/- per acre and allowed Rs. 1,500/- per tubewell and Rs. 600/- for the standing trees. In addition, the Collector allowed Rs. 4602/- as compensation for the building. The appellant felt aggrieved against the award of the Collector and therefore moved an application u/s 18 of the Act for making a reference to the District Judge. The reference came up for consideration before the Additional District Judge, Ferozepur. The Additional District Judge vide his award dated 10.4.1989 came to the conclusion that the land in dispute has got great potentiality for being used as building site. He also came to the conclusion that the appellant has set up a colony and had started selling plots. The Additional District Judge came to the conclusion that the market value of the land was Rs. 77,427/- per acre. He also allowed Rs. 10,000/- for the tube-wells and Rs. 67,750/- as severance charges and Rs. 8,385/- for the trees. The Additional District Judge also came to the conclusion that the appellants are entitled to enhanced solatium with interest in accordance with the provisions of the Land Acquisition (Amendment) Act. He also came to the conclusion that the appellants are entitled to interest at the rate of 9 per cent with effect from 25.3.1976 for the first year and at the rate of 15 per cent per year afterwards till the payment was made. The Additional -District Judge also came to the conclusion that the appellants are also entitled to the payment of solatium at the rate of 30 per cent of the compensation amount.

Aggrieved against the judgment and decree passed by the Additional District Judge, Ferozepur, the appellants came up in appeal in this Court and filed R.F.A. No. 1935 of 1989. The State had filed cross appeal, R.F.A. No. 2369 of 1989.

Mr. S.K. Bishnoi, learned counsel for the appellant, strongly contended that the land in dispute was situated in the Ferozepur Cantonment area. It has great potential value for being used as residential and commercial purposes. He submitted that the land was situated on the trijunction of Ferozepur-Ludhiana road and Ferozepur-Faridkot road. He also submitted that B.S.F. complex is situated near the land in dispute. He further stated that the railway station is at a distance of 1-1/2 kms. from the land in dispute. He also stated that B.S.F. Offices and colonies of P.S.E.B. are also located near the land. He also brought to my notice that Military Dairy Farm was situated just opposite to the acquired land. He submitted that in view of the situation and location of the land in dispute, the land has got the potentiality of being used as residential and commercial sites. He submitted that the appellant had prepared plan for colonising the land. He had advertised the plots for the sale and some plots had also been sold. He also emphasised that in view of the situation of the land, it has prime potentiality for being used as commercial site and for this reason the Mandi Board selected the land in dispute for setting up a grain market. He submitted that the land should have been evaluated as having commercial and residential potentiality.

The learned Advocate General, Punjab submitted that at the time of acquisition the land was being used for agricultural purposes and therefore the Collector has rightly awarded the compensation amount. The enhanced amount of compensation ordered by the Additional District judge was not called for.

The counsel for the appellant had drawn any attention to the evidence on record. Particularly reference was made to the evidence of Puran Chand, Draftsman, A.W. 2. This witness deposed that he prepared a plan Ex. A/2 according to the site. He stated that marginal notes on the plan are in his hand and are correct. He further stated that in the year 1975, the landowner took steps for setting up a colony on the land in dispute and he prepared the scale plan Ex.A/3. He also prepared the sketch plan of the farm house Ex. A/5. He also stated that there are two tube-wells in the acquired land. He further deposed that the land is situated on the G.T. Road, that is, Ferozepur -Ludhiana road and Ferozepur-Faridkot road. According to the witness there is a ice-factory, sheller, workshop and residential houses on the Ferozepur-Faridkot road which is just near the acquired land. The witness further pointed out that on Ferozepur-Ludhiana road there is a rice-sheller just opposite to the acquired land. There is also a Military Dairy Farm situated very close to the land in dispute. He also stated that B.S.F. complex and warehouse are also situated on the Ferozepure-Ludhiana road. Cantonment area, P.S.E.B. offices and colonies and military quarters were in existence near the land in dispute before 1976. The witness rebutted the suggestion that the alleged plan Ex. A/2 has been prepared at the instance of the claimant and it does not represent the facts truly. Inder Dev, A.W. 3, deposed that he applied for the membership of Bhagwa Nagri Colony and paid Rs. 500/- and obtained the membership receipt from the society. Hans Raj Aggarwal, AW 4, who is member of the Cantonment Board also appeared in the witness box. He deposed that in view of the advertisement issued by the claimant (Ex.A.9) he applied for the membership of the colony for the purchase of a plot. He paid Rs. 500/- for the membership. He further submitted that he paid Rs. 11,000/- for a plot of 100 square yards. He also stated that the acquired land is situated on the tri-junction of Ferozepur-Faridkot road and Ferozepur-Ludhiana road. He deposed that Military Dairy Farm and P.S.E.B office and colony were situated very near to the land in dispute before the acquisition of the land. The railway station is situated parallel to the Ferozepur-Faridkot road. The railway line is at a distance of one kilometer from the land in dispute. He further deposed that there is in existence B.S.F. colony across the railway line on the Ferozepur-Ludhiana road. He further stated that two shellers are also in existence on Ferozepur-Ludhiana road. He also deposed that there is a residential colony on the Ferozepur-Faridkot road at a distance of 400 yards from the tri-junction. He also stated that the workshops and factories etc. are very close to the acquired land. Lalit Mohan A.W. 16, is the son of Sh. Gauri Shankar. He appeared as a witness and deposed that the land in dispute is situated on Ferozepur-Ludhiana road and Ferozepur-Faridkot road. He also deposed that the railway station is situated at a distance of 1-1/2 kilometers from the acquired land. This witness deposed that B.S.F. complex and a colony were in existence in the year 1962. Near the land in dispute B.S.F. complex is at a distance of 200 square yards and he pointed out that the acquired land is surrounded by residential and commercial buildings on all sides. According to this witness, P.S.E.B. colony and office is situated just opposite to the acquired land. He further deposed that Guru Nanak Flour Mill and Ice-Factory were in existence near the land in dispute before the acquisition. He further pointed out that the land of the appellant is the only land which touches the national highway. He deposed that before the acquisition of land a plan was prepared for the setting up of the colony on the land in dispute. He also deposed that 100 square yards plot was sold for Rs. 11,000/-. He further deposed that membership was Rs. 500/- and the membership of the Society rose to 29 members. He also deposed that possession of the acquired land was taken in the year 1976. He stated that there was tube-well on the land in dispute and the appellant was running dairy farm.

State examined Ravinder Gupta, R.W. 1 Secretary of the Market Committee, Ferozepur Cantt. He deposed that at present a full-fledged grain market is functioning. Malkiat Singh, R.W. 2, Patwari of the Colonisation Office deposed that there was a farm house of the appellant in Khasra No. 123. He also deposed that petrol pump is there opposite to the land in dispute. He further submitted that P.S.E.B. Office and complex was situated opposite to the acquired land on Ferozepur-Faridkot road. He also admitted that across the railway line there is B.S.F. Colony. State has also examined Joginder Singh, Naib Tehsildar (retired) R.W. 5, who deposed that possession of the land was taken from 243.1976. Swaran Singh, Naib Tehsildar, R.W. 6, also appeared in the witness box. Hardeep Singh, Deputy Director of Colonisation Department (R.W. 7)also appeared in the witness box. This witness was the Collector who gave the award in this case.

A perusal of the claimants evidence as well as of the State clearly shows that the acquired land is situated on the tri-junction of Ferozepur-Ludhiana road and Ferozepur Faridkot road. The land is situated at a distance of about 2 kms. from the railway station. B.S.F. complex and offices are also situated very near to the land. There is lot of development near the land in dispute. The land-owner had also set up a residential colony on the land in dispute and some plots have been sold at the rate of Rs. 110/- per square yard. The land in dispute, in view of the evidence on record, has potentiality of being used for residential and commercial purposes.

In view of the evidence on record, the Additional District Judge recorded the following finding: -

" The contention of the learned counsel is devoid of any merit. No doubt, the pamphlet was issued and the acquired land was earmarked for residential colony, but according to the Colonisation Act, atleast 25% land is to be left for the common purposes i.e. for the streets, school, parks etc. and the colony must be developed before hand and other-wise, the Colonisation Department will develop the same and charge the owners for the same and the development charges are more than 50%. So, if the rate is 110, then there must be deduction of atleast 75% from it and it works out to be 27-1/2 rupees per yard and it comes to Rs. 13,750/- per Kanal or Rs. 1,10,000/- per acre."

The learned Advocate General, Punjab has not offered any substantial criticism against the aforesaid finding of the Additional District Judge that the plots were sold at the rate of Rs. 110/- per square yard. The learned State Counsel did not dispute that the plots have been sold by the appellant at the rate of Rs.110/- per square yard in the colony set up by him. He, however, submitted that substantial portion of the acquired land was being used for agricultural purposes at the time of acquisition, therefore, the valuation adopted by the Collector was correct.

In view of the overwhelming evidence on record, discussed above, I have no hesitation in affirming the finding of the Additional District Judge that the appellant had set up a colony on the land in dispute before the acquisition and he has started selling the plots at the rate of Rs. 110/- square yard. The Additional District Judge had, however, imposed a cut at the rate of 75 per cent on the value of the land fetched as a result of the sale of the plots.

The Supreme Court has laid down that for determining the market value of the land where it is fit for residential and commercial purposes, normally a cut of 33 per cent should be imposed; See Vijay Kumar Moti Lal Vs. State of Maharashtra, , Brig. Sahib Singh Kalha and Others Vs. Amritsar Improvement Trust and Others, . This Court in Bharat Singh v. State of Haryana,3 (1979) 81 P.L.R. 27, imposed a cut of one-third on the market value of the acquired land. In view of the law laid down by the Supreme Court, the view of the Additional District Judge in imposing a cut of 75 per cent on the market value of the land cannot be sustained. Moreover, there is nothing in the Punjab Colonies (Development & Regulation) Act that 75 per cent of the land is to be left for development purposes. Additional District Judge has not appreciated the provisions of the Act. Considering the evidence on record and as the area acquired is fairly large, I am of the opinion that it would be quite reasonable to impose a cut of 50 per cent on the market value of the land fetched by sale of plots in order to determine the market value of the land in dispute.

It is significant to note that price fetched as a result of sale of residential plots is Rs. 110/- per square yard. The fact that land has been selected by the Mandi Board for grain market also shows that the land was fit to be used for commercial site. The land in dispute is commercial property and had definitely more value on the date of acquisition than it was fetching by the sale of plots for residential purposes. On the basis of the evidence on record, I am of the opinion that it would be quite reasonable to fix the market value of the land at the rate of Rs. 55/- per square yard.

The appellants had a farm house and a dairy farm and were maintaining large number of catties on the land in dispute. Counsel for the appellants has also drawn my attention to the evidence of Naresh Kumar, AW 13, who was working as Office Assistant in Food Specialities, Moga. This witness deposed that Lalit Mohan entered into agreement to supply milk to the Food Specialities, Moga. Lalit Mohan, AW 16, is the son of Shri Gauri Shankar, landowner. He has deposed that there was a well developed farm house and the appellants were running the dairy farm on the land in dispute. There were two tube-wells on the land in dispute. He further deposed that they used to earn Rs. 7000/- to Rs. 8000/- per month by selling milk. He further deposed that as a result of the acquisition of the land they had to close the dairy farm. This evidence of the appellant has not been rebutted by the State. Obviously, when the appellant had about 29 acres of land, a farm house and a dairy farm, he must be having income of Rs. 8000/- a month. So, the annual income of the appellant from the dairy farm was Rs. 96,000/-. As a result of the acquisition of the land, the dairy farm had to be closed and the appellant had to change his profession. This resulted in the loss of income. The Supreme Court in Collector Saharanpur v. Jagdish Saran, (Civil Appeal No.457 of 1965 decided on 1.3.1968) 1968 (10) S.C. 117 (63), allowed compensation for loss of earning as a result of acquisition for four years. The judgment of the Supreme Court was followed by the Division Bench of this Court in Raghbir Singh Vs. The Union of India, , and the Division Bench considered the question whether any compensation should be awarded in terms of Section 23 of the Act for change of business. In this case, the Division Bench observed that the landowners had to change the brick-kiln profession and allowed compensation to them for it. In my opinion, the appellants had to change their business of dairy farming as a result of acquisition of land and are, therefore, entitled to compensation for it. I assess their annual income from dairy farm at Rs. 96,000/- and allow two years annual income as compensation for change of business.

In view of the above discussion, the appeal of the claimant i.e. R.F.A. No. 1935 of 1989 is partly accepted and market value of the land in dispute is fixed at Rs. 55/- per square yard. In addition, the appellants are entitled to Rs. 1,92,000/- for loss of income due to close of dairy farm and change of business. The appellants shall be entitled to all the statutory benefits according to the provisions of Sections 23(1)(A). 23 (2) and 28 of the Land Acquisition (Amendment) Act. In other words, the appellants are entitled to the payment of solatium at the rate of thirty per cent on enhanced amount alongwith interest at the rate of nine per cent for the first year with effect from 17.3.1976 and thereafter at the rate of 15 per cent for subsequent years till the payment is made or is deposited. The appellants shall be entitled to proportionate costs.

Civil Misc. application is allowed and the appellants are allowed to amend the claim for enhancement of compensation. They are granted three months time to make up the deficiency in the payment of Court fee.

In view of the above, R.F.A. No. 2369 of 1989 filed by the State is dismissed with costs.