Municipal Corporation of Greater Mumbai vs State of Maharashtra and Others

Chandiwal K.U., J.—The petitioner (M.C.G.M. for short) have chal, validity of the award dated 30th August 2001 invoking Article 226 of the Constitution of India, to call and withdraw the award passed by the respondents 1, 2 and 3.

The matter has chequered history of litigation and several agrelenged the legalityements between M.C.G.M. and the respondents 4 to 10 and 12 to 14. The present controversy can be condensed as the main grievance of the petitioner M.C.G.M. is to the S.L.A.O. (respondent No. 3) following procedure of Ready Reckoner for valuation and assessment of the land under acquisition instead of collecting sale instances.

Section 50 of the Land Acquisition Act, 1894 contemplate powers to the local authority to appear and adduce the evidence for the purpose of determining the amount of compensation. However, no such local authority is entitled to demand a reference u/s 18 of the Land Acquisition Act, 1894.

By virtue of agreement between the M.C.G.M. and Yashwant Waman Patil (H.U.F.) who was the owner of the land, several pieces of lands owned by the respondents were taken in possession under agreement by M.C.G.M. It is an admitted position that although the petitioner took over possession of almost all the lands belonging to the respondent, only a small portion of land was acquired. Thereafter, the matter was taken to the Court, giving rise to another agreement between parties dated 11th may 1978, whereby the earlier two agreements dated 14th October, 1960 and of 1978 were revoked. It was agreed that the lands of the respondents were to be acquired by following procedure under the Land Acquisition Act and the compensation under such award shall be adjusted towards amount already paid to the original owners. Despite such agreement, the award could not be passed. This was followed by Writ Petition No. 1385 of 1979 by the land owners present respondents for a direction to the Corporation to declare the award of the land already acquired and to pay compensation to them. Said petition was disposed of by order dated 31st August, 1979, as M.C.G.M. agreed to get the award in respect of the land which were already acquired, within a period of six months. It is the matter of record, pursuant to the said orders in Writ Petition 1385 of 1979, as many as 16 awards were declared and the owners got compensation after adjusting the amounts they received as advance. In spite of 16 awards, few lands still remained to be acquired, though the corporation was using the lands for various purposes.

4-A. The land owners contended that the un-acquired land admeasures about 2 acres, 11 gunthas and 14.4 area i.e. 9,295.25 sq.mtrs. The in-action on the part of the M.C.G.M. forced the land owners-respondents to move this Court by Writ Petition No. 109 of 1996 and by order dated 4th December, 1996 the then learned Single Judge of this Court (Now the Hon''ble Chief Justice) allowed the writ petition directing the Corporation and the acquisition authorities to acquire the unacquired lands as expeditiously as possible, and in any event within one year from the date of the judgment dated 4th December, 1996.

The decision in the above writ petition gave rise to the Special Land Acquisition Officer (S.L.A.O.) (respondent No. 3) taking proceedings for passing award u/s 11 of the Land Acquisition Act.

The centre question as indicated earlier is determination of compensation and mode of valuation, in the said Award.

The S.L.A.O. (respondent No. 3) in his award in column 9 under the caption "Valuation" has stated that the land owners claim compensation at the rate of 16,000/- per sq.mtrs. They have not submitted any sale instance in support of their valuation. The land under acquisition is encumbered and about 40% land is encroached and hence, the S.L.A.O. did not take into consideration the rate claimed by the land owners. According to the S.L.A.O., as per the present Ready Reckoner, the value of the land is given at Rs. 1100/- per Sq. ft. i.e. Rs. 11,836/- per sq.mtrs. He has not considered the same as 40% of the lands under acquisition are encroached and in his opinion the value of the land is 50% of the Ready Reckoner i.e. Rs. 5,948/- per sq.mtrs, which is the real value of the land under acquisition. The S.L.A.O. has also observed that the land under acquisition is in fully developed area. The amenities such as Railway Station, market, school, college, hospital, main roads, etc. are available in the surroundings of the land and therefore, he valued the land at the rate of Rs. 5000/- per sq.mtr.

We find that there is no express provision under the Land Acquisition Act to determine compensation for the land acquired under the Act. Therefore, by necessary implication, compensation needs to be determined applying the principles in Section 23 of the Land Acquisition Act, which following mechanism while determining compensation:

First, the market value of the land at the date of the publication of the notification u/s 4, Sub-section (1);

Secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector''s taking possession thereof;

Thirdly, the damage (if any), sustained by the person interested, at the time of the Collector''s taking possession of the land, by reason of severing such land from his other land;

Fourthly, the damage (if any), sustained by the person interested, at the time of the Collector''s taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings;

Fifthly, if, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and

Sixthly, the damage (if any) bonafide resulting from diminution of the profits of the land between the time of the publication of the declaration u/s 6 and the time of the Collector''s taking possession of the land.

Our attention was invited to the judgment in Sukumar M. Khot and Others Vs. State of Maharashtra and Others, delivered by the Division Bench of this Court. Before the said Bench the cardinal question was effect of declaration of Section 6 of the Land Acquisition Act and the Court observed, declaration u/s 6 cannot be extended. These observations will not be applicable to the facts of the present case as nobody has canvassed any infirmity in observing procedural aspects, by S.L.A.O., except reckoning on half of value.

The S.L.A.O. has referred to the letter of M.C.G.M. dated 5th March, 2001 in which M.C.G.M. informed that the value of the land would not be more than Rs. 40/- per square yard. However, M.C.G.M. too did not cite any sale instances. It is obvious, claimants did not produce any sale instances. We quite see that M.C.G.M. has not alleged any fraud collusion between the claimants and S.L.A.O. However, that by itself will not be a yardstick to blindly accept award if it is not in conformity to the settled standards, rules and procedure. The contention of Mr. Singhvi, Senior Counsel that the S.L.A.O. has given a complete go-bye to the method of valuation provided under the statute generate heat, when we have minutely read the award and in particular the valuation arrived at. We endorse, the Ready Reckoner published by the Government of Maharashtra is for the purpose of stamp duty payable on documents for transfer of properties and registration thereof. The Ready Reckoner has in fact no basis as the set standard to accept the valuation of properties in particular areas. The S.L.A.O. (respondent 3) has not taken any other instances or example to arrive at the valuation of the property barring the ready recknor. He should have consider the damage sustained by the persons interested, the damage sustained whether would be resulting in the diminition of the profits of the land. He has to also take into consideration the market value of land at the date of publication of notification u/s 4, Sub-section (1) of the Land Acquisition Act.

Under the Land Acquisition Act, the acquiring body has to pay only the market value as arrived by the S.L.A.O. which have its impact only after following the procedure laid down under the Act and would not be possible on the basis of Ready Reckoner alone. The comparative sale instances in the area should have been called by the S.L.A.O. to his satisfaction about the rationality in the claim of the claimants including the loss suffered by them. The S.L.A.O. has observed that the land under acquisition has suffered encroachments however, the encroachments if any would not be to the detriment of the claimants/respondents as it was the corporation who took possession of the property by virtue of agreement in the year 1960 and allowed mushrooming of encroachment, without bothering for protecting the property. We find, the award is silent as to application of mind by the S.L.A.O. to the importance of location tenure and user of the property except accessibility as he has referred that it is nearby Railway Station.

Our attention is invited by Mr. Singhvi to the judgment of this Court in Writ Petition No. 2687 of 1999 dated September, 19 and 20, 2005, wherein M.C.G.M. has sought to set aside the award of S.L.A.O. which was also declared keeping base on the Government Ready Reckoner. The Division Bench of this Court allowed the writ petition to the extent of quashing the impugned award and remanding the matter to the land acquisition officer with directions to ascertain the market value in accordance with the provisions of law and bearing in mind the observations of the Court, within a period of 6 months from the date of receipt of the writ of the said Court. By the said order, both parties were permitted to lead whatever evidence they want in support of their rival contentions.

The Apex Court in (Krishi Utpadan Mandi Samiti, Sahaswan, District Badaun, through its Krishi Utpadan Mandi Samiti Vs. Mohammed Ibrahim and Another, Saidullah alias Saidul and Others, Smt. Rashida Begum and Another and Rayazul Haque and Another, has dis-approved the decision of the reference Court in relation to the market value of the land acquired solely on the basis of the order of the stamp officer, while reiterating its earlier decision in the matter of Jawajee Nagnatham Vs. Revenue Divisional Officer, Adilabad, A.P. and Others, . In Jawaji Nagnatham''s case, the Hon''ble Supreme Court rejected the foundation of such register as it was maintained for the purpose of collecting stamp duty which has no statutory base or force. The law on the point that such register, which is essentially prepared for ascertaining the market value of the land which is the subject matter of an instrument brought for registration, having no statutory base or force, cannot be a reliable evidence for the purpose of ascertaining the market value of the land sought to be acquired under the said Act or the M.R.T.P. Act.

The Ready Reckoner as indicated earlier is for all purposes to generate revenue for the Government at the time of application of stamp duty and registration of the documents. It can serve simply as guidelines but it cannot be used to be a rule as a whole in derrogation to the statutory scheme contemplated u/s 23 of the Land Acquisition Act. It is again an important aspect that the Ready Reckoner fixed by the Government varies from time to time. It will not be taking into consideration the importance of the property, its location and particular user of the claimants. The necessary evidence about the market value would be the development, the sale instances, its potentiality, the loss suffered by the claimants and benefits to the acquiring body,

The Hon''ble Supreme Court in the matter of (Special Land Acquisition Officer, Bangalore v. A. Shetty) reported in AIR 1969 S.C. 429 indeed has set out a procedure to be followed in respect of getting market value of the land under which proper consideration of experts opinion, price paid within the reasonable time in bonafide transaction of purchase of land acquired or land adjacent to the land acquired and other advantages to be considered.

The claimants were required to produce necessary evidence in support of their claim for a particular price which in the instance case is not reflected. We cannot ignore the basic requirement expected from the S.L.A.O. in determination of the valuation which in the facts and circumstances referred above we find, is not legally effected and the award of S.L.A.O. suffers from a vice

We have no doubt in our mind that the respondents/land owners are deprived of their legitimate claims from 1960 and every time they have to resort to legal avenues. Still, sympathy and sentiment by itself should not be a ground to accept the method of calculation of market value arrived at by S.L.A.O., when Law does not recognise such course. Statutory Scheme u/s 23 of Land Acquisition Act will have to be read as a whole in its context, which is certainly unambiguous. We endorse, the lapses committed by S.L.A.O. cannot be attributed to any fault of respondent Nos. 4 to 10 and 12 to 14 (Claimants).

During the course of submissions, the respondent''s Counsel claimed that if the lapse of the acquisition proceedings is made effective by this Court, it would be prejudicial to the interest of the respondent/claimants and, it would be legitimate that this Court should give directions to the S.L.A.O. for issuing fresh notice u/s 4 of the Land Acquisition Act and complete the acquisition proceedings within one year from the date of judgment. We respectfully do not agree to the said alternative submissions. It was also canvassed by them that the respondents 4 to 10 and 12 to 14 have not received even a rupee towards compensation for the said lands. The advance paid on 14th October, 1960 was adjusted long time ago in respect of some other lands. They also canvassed that the amount already deposited in this Court which has been invested should continue to remain invested till the disposal of the proceedings before the Land Acquisition Officer and further for a period of 6 weeks, subject to final decision in the acquisition proceedings. We do not, for the reasons stated herein before propose to accept the alternate submissions on behalf of respondents 4 to 10 and 12 to 14. The S.L.A.O. will have to take care of the legalities required to be followed while declaring the award. We do not wish to interfere in the legal domain of S.L.A.O.

The amounts deposited in Court and invested by the Prothonotary and Sr. Master be refunded to M.C.G.M. with accrued interest.

In the result, the award passed by S.L.A.O. on 30th August, 2001 is quashed and set aside. Rule is made absolute with no order as to costs.

Prayer is made by the learned Counsel for the respondent to keep the decision in abeyance to enable them to approach Supreme Court. In the facts and circumstances, the effective operation of order is stayed for a period of six weeks.