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Judgment
All these appeals are filed seeking the enhancement of compensation by modifying the judgment and order, dated 20.10.2009 passed in M.A.Nos.74, 75, 76, 77 and 78/2007.
The facts of the case in brief are that the lands in question were acquired for the purpose of broadening National Highway No.7 vide preliminary notification, dated 14.7.1994 and final notification, dated 15.7.1995. The Special Land Acquisition Officer (''SLAO'' for short) has passed the award fixing the compensation at the rate of Rs.20/- per sq.ft. Not satisfied with the said award, the claimants sought reference seeking enhancement of compensation. The Reference Court by its common judgment, dated 31.8.2007 dismissed L.A.C. Nos.31, 32, 33, 34 and 35/1998. Aggrieved by the same, the appellant - claimants preferred Misc. Appeal Nos.74, 75, 76, 77 and 78/2007 before the Court of the Principal District Judge, Bengaluru Rural District. The District Court, by its common judgment, dated 20.10.2009 allowed the said appeals in part raising the market value to Rs.39,375/- per gunta.
Sri K. Bhanu Prasad, the learned counsel for the appellant - claimants submits that the District Court has not granted the requisite annual escalation while determining the market value based on the judgment, dated 22.2.2008 passed in M.F.A.No.12163/2005.
Sri Vasanth V. Fernandes, the learned Government Pleader appearing for the respondents submits that the determination of the market value by the District Court is justifiable and that therefore these appeals be dismissed.
The submissions of the learned counsel have received my thoughtful consideration. At the very outset, it has to be noticed that the respondents did not enter the witness box in the Reference Court. Nor did they confront PW1 and PW2 with any document in the course of cross-examination. They do not appear to have taken part in the proceedings before the First Appellate Court also.
The claimants also did not place any clinching material on the record of the Reference Court. For the reasons best known to themselves, they did not examine the vendors and purchasers of the properties, which are sold under Ex.P2 to P5. That is why the Reference Court dismissed the reference application observing that the claimants have failed to establish their case for enhancement of the market value.
The First Appellate Court raised the market value to Rs.39,375/- per gunta based on the judgment in M.F.A.No.12163/2005. The First Appellate Court is justified in determining the market value of the lands in question based on the judgment in M.F.A.No.12163/2005, because the lands covered by these appeals and M.F.A.No.12163/2005 are not only situated in the same village but are abutting each other. The lands covered by M.F.A.No.12163/2005 are at Survey No.42/3 of Chikkathogur Village, Begur Hobli, Bangalore South Taluk. The lands covered by these appeals are at Survey Nos.42/8, 42/6, 42/7, 42/4 and 42/5. Both the lands are acquired for the same purpose of widening National Highway No.7. The only difference between the instant case and the lands covered by M.F.A.No.12163/2005 are that the former were notified for acquisition on 18.6.1994 whereas the latter were notified for acquisition on 1.12.1990.
The First Appellate Court added 5% to Rs.37,500/- per gunta awarded in M.F.A.No.12163/2005 and arrived at Rs.39,375/- per gunta.
The question that arises for my consideration is whether the First Appellate Court erred in giving the escalation at a flat 5% for the entire block period of about 3 1/2 years. To answer this question, it is profitable to refer to what the Apex Court had to say in the case of GENERAL MANAGER, OIL AND NATURAL GAS CORPORATION LIMITED v. RAMESHBHAI JIVANBHAI PATEL AND ANOTHER reported in (2008) 14 SCC 745. The relevant paragraph reads as follows:
"18. The increase in market value is calculated with reference to the market value during the immediate preceding year. When market value is sought to be ascertained with reference to a transaction which took place some years before the acquisition, the method adopted is to calculate the year to year increase. As the percentage of increase is always with reference to the previous year''s market value, the appropriate method is to calculate the increase cumulatively and not applying a flat rate. The difference between the two methods is shown by the following illustration (with reference to a 10% increase over a basic price of Rs.10/- per square metre):
Year By flat rate increase method By cumulative increase method
1987(Base year) 10.00 10.00
1988 10 + 1 = 11.00 10.00 + 1.00 = 11.00
1989 11 + 1 = 12.00 11.00 + 1.10 = 12.10
1990 12 + 1 = 13.00 12.10 + 1.21 = 13.31
1991 13 + 1 = 14.00 13.31 + 1.33 = 14.64
1992 14 + 1 = 15.00 14.64 + 1.46 = 16.10
In the case of ASHRAFI AND OTHERS v. STATE OF HARYANA AND OTHERS reported in (2013) 5 SCC 527, the Apex Court held that the annual escalation in the land prices/market value should be on annual compounding/ cumulative basis.
The allied question is what should be the rate of escalation. It has to be by keeping in view the development potentiality in and around Bengaluru. Taking the judicial notice of the real estate trend in and around Bengaluru, I deem it necessary and just to grant escalation at the rate of 10% per annum.
As noticed earlier, the lands covered by M.F.A.No.12163/2005 were notified for acquisition on 1.12.1990. In the instant case, the preliminary notification is issued on 18.6.1994. Taking the market value as Rs.37,500/- per gunta in 1990 and applying escalation/increase principle with cumulative effect, the amounts towards the market value are re-workable as follows:
Sl. No. Year Cumulative increase at 10% in Rs. Amount in Rs.
1990 37,500 3,750
1991 41,250 4,125
1992 45,375 4,537.5
1993 49,912.5 2,495.6 (50% of 10% escalation - amount of 49,912.5, as the escalation is given only for six months and not for one year considering the date of the issuance of the preliminary notification - 18.6.1994)
1994 52,408.1
Thus, the amounts towards the market value aggregate to Rs.52,408/-. These appeals are allowed in part entitling the appellants to get the market value at the rate of Rs.52,408/- per gunta. Needless to observe that they are entitled to all the statutory benefits also.
If the amounts enhanced herein are more than what the appellants have prayed for, for which court fee is to be paid, the appellants are directed to pay the deficit court fee within an outer limit of two weeks from today. If the appellants default in paying the deficit court fee within two weeks, the full benefit of this order shall not remain accrued to the appellants. If the appellants fail to pay the deficit court fee within the prescribed period, the amounts enhanced herein shall stand modified and restricted to the claim - amounts on which the court fee is already paid.