The Land Acquisition Officer Udhagamandalam vs Pappammal 2 to 27 Omitted and The Nilgiris District Co-operative Milk Producers Union Limited

P.K. Sethuraman, J.—The Land Acquisition Officer, Udhagamandalam, Referring Officer, is the appellant. The appeal is filed under S.54 of the Land Acquisition Act against the judgment and decree passed by the learned Subordinate Judge, Udhagamandalam, in O.P. No. 38 of 1981 enhancing the quantum of compensation with regard to the land acquired which belonged to respondents 21 to 23. An extent of 11.32 acres, in S. No. 1106/4, 1106/4B and 1106/4C in Udhagamandalam was acquired for the purpose of expansion of the Dairy under the Hill Area Development Programme for the Nilgiris District Co-operative Milk Producers Union Limited (hereinafter referred to as the Union) Udhagamandalam. The tenants and others who were claimants 1 to 16 and the present respondents 21 to 23 owners were claimants and they filed claim petitions and the Land Acquisition Officer passed the Award on 26th August 1981 fixing the rate of compensation at Rs. 50,000 per acre and the Officer also fixed the value of trees and crops and the value was worked out at the rate of Rs. 50,000 per acre and with the value of trees and crops the compensation fixed was Rs. 5,60,702.50 with interest and 15 per cent solatium. The total amount of compensation was fixed at Rs. 6,69,599.70. Since the claimants wanted the matter to be referred to the Civil Court, Sub Collector made the reference under S.18 of the Land Acquisition Act. Before the learned Sub Judge. Udhagamandalam, 23rd claimant and one Kannappan had been examined and on behalf of the Government two witnesses had been examined. The documents filed on behalf of the claimants had been marked as Exs.A1 to A6. The Inspection report filed by R.W.2 in the file of the Sub Collector had been marked as Ex. B1 and the Inspection report by the learned Sub Judge dated 23rd June, 1985 had been marked as Ex. C1. The learned Sub Judge after considering the materials on record fixed the rate of compensation at Rs. 5,00,000 per acre and directed compensation to be paid to claimants 21 to 23 for the entire extent of 1132 acres at that rate along with the compensation for trees and crops with interest and solatium as fixed by the Land Acquisition Officer. Aggrieved by the decision of the learned Sub Judge, the present appeal has been filed.

It is contended that the Land Acquisition Officer had correctly fixed the rate of compensation after taking into consideration all the relevant factors and materials and the Court below failed to see that the data lands are similar in nature, tharam and fertility and therefore the Court below erred in enhancing the compensation. The Court below did not even consider whether the lands acquired are similar to the lands under the sale deeds relied on by the claimants and the learned Sub Judge failed to see that the price paid for small plots of land cannot provide a safe guide or criteria for determining the market value. The Court below failed to see that the existing condition with all its existing advantage excluding any advantage due to the carrying out of the scheme for which it is acquired alone should be taken into consideration in fixing the compensation, and the lands acquired were agricultural lands and the same has been properly taken into consideration by the Land Acquisition Officer and the Acquisition Officer his also taken into consideration the limited potential value of the said lands as building sites and therefore the Court below has wrongly observed that the Land Acquisition Officer has not taken into consideration the potential value of the lands. The Court below also failed to properly consider the notes of inspection and in the circumstances, it has been prayed that the judgment and decree of the learned Sub Judge have to be set aside.

Before taking up the discussion of the appeal the petition filed by the union C.M.P. No. 12954/84 under S. 151 C.P.C., and O. 1, R. 10 C.P.C., could be dealt with first in that petition the Union has come forward with the contention that the Land Acquisition proceedings were initiated to acquire the land for the Union at their instance and the Land Acquisition Officer had fixed the compensation at the rate of Rs. 50.000 per acre and the value of crops and the trees has been added and the total compensation worked out at Rs. 6,59,599.70. There was a reference under S.18 of the Act before the learned Sub Judge, Udhagamandalam, and the learned Sub Judge in O.P. No. 38 of 1981 fixed the compensation to be worked out at the rate of Rs. 6,00,000 per acre and such fixing of the compensation is exorbitant and arbitrary. After the Award the Union has deposited Rs. 6,69,599.70 before the Collector and even though the ultimate liability to pay the compensation under the Award is on the Union, the Union has not been impleaded as the respondent and the ultimate beneficiary has not been made a party. The judgment and decree passed by the learned Sub Judge have seriously affected the Union and as such the Union is a necessary and a proper party and is entitled to be impleaded as a party to the appeal. The Government has filed the appeal and after the compensation was given they have put up construction valued at Rs. 1.22 crores and they have also installed plant and machinery worth Rs. 15 crores and the total amount invested comes to Rs. 3 crores. The Union will be gravely affected in making payment of such a huge amount of Rs. 68,00,000 and in such circumstances the Union trust be allowed in raise contention against the judgment of the learned Sub Judge enhancing the compensation, inasmuch as the Union is a person interested under S. 3(b) of the Act.

The learned Senior counsel also contended that under O. 1, R. 10 C.P.C., the Union will be a necessary party for the determination of the matter in dispute and the Union will also be entitled to tile an appeal as a person affected and the Union will be heard as against the enhanced compensation. The learned counsel also submitted decisions in support of his contentions.

The learned senior counsel Mr. M.R. Narayanaswami opposing the contentions put forward on behalf of the Union pointed out that the Union has no right to be represented and heard in the appeal and it is not open to the Union to file any appeal against the decision rendered by the learned Sub Judge in O.P. No. 38 of 1981 and when the Land Acquisition Act provides for filing appeals it is not open to contend that as a person aggrieved the Union is entitled to file the appeal as provided under the Civil Procedure Code. It is not open to contend that the provisions under the CPC could be invoked in support of the contentions put forward on behalf of the Union. The learned counsel contended that the person interested as contemplated under S. 3(b) of the Act does not include the person liable to pay compensation. The learned counsel for the land owners/respondents also placed decisions in support of his contentions.

Under S. 3(b) of the land Acquisition Act the expression "person interested" has been defined and it is as follows:-

the expression "person interested" includes all persons claiming an interest in compensation to be made on account of the acquisition of land under this Act; and a person shall be deemed to be interested in land if he is interested in an easement affecting the land.

A plain reading of the said definition can be said to be indicating that the beneficiary cannot claim to be a person interested under the said provision. S. 20 of the Act deals with notice by the Court to which reference under S. 18 has been made. Under that section the Court has to cause service of notice specifying the date on which the Court will proceed to determine the objection and directing appearance before the Court on that day, to be served on the applicant and all ''persons interested'' in the objection, except such (if any) of them as have consented without protest to receive payment of the compensation awarded; and if the objection is in regard to the area of the land or to the amount of the compensation, the Collector.

Under S.50(2) of the Act, in any proceeding held before a Collector or Court in such cases the local authority or Company concerned may appear and adduce evidence for the purpose of determining the amount of compensation. It has been provided that no such local authority or Company shall be entitled to demand a reference under S.18. It is clear from S.50(2) that the local authority or Company concerned may appear and adduce evidence for the purpose of determining the amount of compensation but such local authority or company is not entitled to demand a reference under S.18. Under S.20(c) if the objection is in regard to the area of the land or to the amount of the compensation, the Collector has to be served with the notice by the Court.

The learned counsel for the Union pointed out that in the decision reported in Indian Rare Earths Limited v. The Sub Collector 1986 W.L.R. 145, 146= 99 L.W. Page 221, the learned Justice Natarajan and learned Justice Singaravelu have held that the Award passed by the Court under S.18 without issuing notice to the company under S.20 for whose sake the acquisition proceedings are taken is a contravention of principles of natural justice and the learned Judges quashed the Award A reading of the said decision discloses that the learned Judges have pointed out the distinction between the expression person interested in S.3(b) and persons interested in the objection occurring in S.20(b). The decision has been rendered by the teamed Judges in Writ appeals and writ petitions and the learned Judges have held that extraordinary jurisdiction under Art.226 is available. The writ petitions had been riled by the Company wholly owned by the Government of India for issue of a writ of certiorari to quash the awards passed by the Subordinate Judge in forty-nine original petitions taken on file under S. 18 of the Land Acquisition Act. The writ petition challenged the validity and enforceability of the awards on the ground that even though the petitioner was an interested party, it was not issued any notice in the enquiry conducted by the Sub Judge in the reference proceedings under S.18 of the Act and as such the Award contravened the principles of natural justice and the Awards are ab initio void, and they should be quashed by this Court by means of a writ of certiorari. The maintainability of the writ petition was contended on the ground that appeals had been preferred to the High Court against the Awards passed by the Sub Judge and the petitioner cannot legitimately contend that it is left with no other remedy but to file petitions under Art. 226 of the Constitution. It was also contended that it will not be a person interested within the meaning of S.3(b) or 20(b) of the Act and unless the petitioner is a person interested, it is not entitled to notice in the reference proceedings under S.18 before the Civil Court. The learned Judges have held that the writ petitions will have to be allowed and there will be a rule in each of them quashing the Awards passed by the Sub Court. It has to be pointed out that in paragraph 14 at page 151 Their Lordships have clearly pointed out that in the appeals filed in the High Court by the State Government against the Award passed by the Sub Court, the Company cannot take a direct or active part and seek reduction of the compensation amount. That is because of the fact that in a reference under S.18 there can only be two parties, viz. the Collector and the claimant who has raised the objection to the Award. The person for whom the land is acquired has no locus standi to demand a reference under S.18 and be can only appear and adduce evidence for the purpose of determining the amount of compensation. The proviso to S.50(2) of the Act makes this position clear. Therefore, the petitioner cannot seek intervention in the appeal and advance independent arguments to assail the correctness of the award passed by the Civil Court. The learned Judges have also referred to the decision by a Division Bench of this Court in Kanyaka Parameswari Devasthanam and Charities Vs. Srila Sri Ambalawana Pandara Sannadhi and Another, and also the decision in Indo Swiss Time v. Umrao. Having regard to what has been laid down in the said decision of the Division Bench the contention put forward on behalf of the Union cannot be accepted.

In the decision reported in Sri Kanyaka Parameswari Devasthanam and Charities Vs. His Holiness Sri La Sri Ambalavana Pandara Sannadhi Avl. Adheena Kartha Thiruvaduthurai Adheenam and Another, rendered by Sethuraman and Balasubramanyan, JJ. the learned Judges have clearly laid down that the Devasthanam for which the land was acquired was not a "person interested" within the meaning of S.3(b) and 5A of the Act and as such could not be a party to acquisition proceedings, and it had no locus standi and therefore could not be impleaded as a party respondent. The learned Judge have also pointed out that the provisions of the Act dearly indicate that there are really two parties to the reference in the Civil Court and the further proceedings that may emanate from it, the two parties being the Collector and the owner of the property. Under proviso to S. 50(2) the entity has no locus standi even to demand a reference under S.18 after the Award is passed and can only appear and adduce evidence for the purpose of determining compensation. When such entity is not a party even before the Collector it cannot be impleaded as party respondent after the appeal is disposed of.

The Devasthanam had filed applications purporting under O.1, R-10(2), C.P.C., praying to be impleaded as a party respondent and such a petition was only after a delay of 461 days after the appeal filed by the claimant was disposed of by the High Court. The Devasthanam in another petition riled purporting to be under O.X, R. 21 r/w 151, C.P.C. prayed for setting aside the decree and judgment of this Court in the appeal. That application had been opposed contending that the Devasthanam had no locus standi in filing the petition. The learned Judges have referred to the decision reported in The Andhra Pradesh Agricultural University, Rajendranagar Vs. Mahmoodunnisa Begum and Another, , and other decisions. The learned Judges have fallowed the Full Bench decision of the Andhra Pradesh High Court. The learned Judges have also extracted the observations of the learned Judges of the Andhra Pradesh High Court at page 139 which is as follows:-

Therefore, even if there is anything in the CPC which enables a person to prefer an appeal with leave of the Court, though not a party to the proceeding in the Court below that is not applicable to the person for whose benefit the land has been acquired to prefer an appeal with leave of the appellate Court against the award, because the right foreclosed under the provisions of the Act. The Act treats such a person as a stranger to the acquisition proceedings with whom the Claimant of the land has no concern and has no right in the entire proceedings until the acquisition has been completed.

Again at page 140, the legal position was explained as follows:-

What emerges from the above consideration is that the person for whose benefit hind has been acquired, the University in this case could not be a party to the reference even it is applied in be added us one. This is clearly prohibited by the provisions of the Act. A person, who could not be made a party to a proceeding in the lower Court, could not by any stretch of imagination be made a party in the appeal against that decision, much less as appellant. The person for whose benefit land has been acquired is a person excluded from the reference proceedings before court, it most follow that he cannot prefer an appeal to the High Court either with or without leave of the High Court. O.1, R. 10, C.P.C., or the inherent power of the Court under S. 151 C.P.C. cannot be invoked while preferring those appeals to to extent that they are inconsistent with the provisions of the Act. Thus, on principle and on the statute it can be concluded tint the University has neither a right to prefer an appeal nor has it any locus standi to prefer one with leave of the appellate Court.

The learned Judges have also stated that they are in respectful agreement with the legal position enunciated in the above passage by the Andhra Pradesh High Court and accordingly the application filed by the Devasthanam had been dismissed. In that decision the learned Judges of our High Court nave also pointed out that the decisions reported in The Khurshed Bagh Co-operative Housing Society, Ltd., Lucknow Vs. Smt. Satya Devi and Others, and The Hindustan Sanitary-ware and Industries Ltd. and Another Vs. The State of Haryana and Others, , had been dissented in the Full Bench decision rendered by the Andhra Pradesh High Court, and the learned Judges of our High Court, have concurred with the view expressed by the Andhra Pradesh High Court.

The learned counsel for the petitioner/Union submitted the decision reported in The Punjabi University, etc. Vs. Acharya Swami Ganesh and Another, in support of his contention. The case related to acquisition for the Punjab University and an appeal against the Award of enhanced compensation for land acquired for the Punjab University was filed jointly by the University and the State Government two days beyond the limitation due to a bona-fide mis-calculation of the period of limitation by the counsel for the University. The High Court accepting the explanation of the counsel refused to condone the delay solely on the ground that there was no explanation for the delay from the State Government which had primarily the right to tile the appeal. The Supreme Court held that the party which was essentially interested in filing the appeal was the Punjab University, as it had to pay the compensation amount for the land acquired. Moreover, the matter of filing the appeal having been entrusted by the Punjab Government to the University, the absence of explanation from the Government for the delay was of no consequence. The High Court therefore erred in holding that there was no ''sufficient'' cause for condonation. As regards this case it may be pointed out the appeal was filed jointly by the Punjab University as well as the Government and the Government had left the matter in the hands of Punjab University and the Government was defending the case for the benefit of the Punjab University. In such circumstances, it may not be stated that the Supreme Court has laid down in that decision that it is open to the Punjab University to tile the appeal as a person interested.

The learned counsel for the petitioner pointed out the decision reported in Himalaya Tiles and Marble (P) Ltd. Vs. Francis Victor Coutinho (dead) by LR''s., . In that decision the learned Judges of the Supreme Court dealt with the case of a private company having the business of manufacture and sale of artificial marbles and tiles and the Company moved the Government for acquiring additional land for purposes of the Company and the Government also issued necessary notification and the purpose of acquisition was mentioned in the notification as public purposes and the proceedings culminated in an Award. The acquisition was objected in a writ petition before the High Court contending that the Government was not competent to acquire the land for the purposes of a private company which could not be said to be a public purpose under S. 4 of the Act. A Single Judge accepted the plea and allowed the writ petition and quashed the land acquisition proceedings. There was an appeal before the Letters Patent Bench which confirmed the view of the single Judge and the appeal was dismissed slating that the appellant had no locus standi to file the appeal as it was not a person interested within the meaning of S. 18(1) of the Act. There was further appeal before the Supreme Court and the Supreme Court held among other things that the definition of a person interested in S. 18 is an inclusive one and must be liberally construed so as to embrace all persons who may be directly or indirectly interested either in the title to the land or in the quantum of compensation. The learned Judges pointing out that the lands were actually acquired for the purpose of the Company and once the land vested in the Government, after acquisitions, it stood transferred to the Company under the agreement entered into between the Company and the Government. Thus it cannot be said that the company had no claim or title to the land at all Secondly, since under the agreement the company had to pay the compensation, it was most certainly interested in seeing that a proper quantum of compensation was fixed so that the company may not have to pay a very heavy amount of money For that purpose the company could undoubtedly appear and adduce evidence on the question of the quantum of compensation.

The learned counsel for the petitioner Union also pointed out in the decisions reported in Kerala State Electricity Board Vs. Cyriac Stephen, , and Assistant Commissioner & Land Acquisition Officer Bagalkot v. Basappa Ramappa Badardinni AIR 1985 Kar 75, the Kerala High Court and the Karnataka High Court have taken the view which will be in support of the case put forward on behalf of the petitioner. In the decision in Kerala State Electricity Board v. Cyriac Stephen P. Subramoniam Potti, Actg. Chief Justice and George Vadakkel, J. dealt with S.60 of the Kerala Land Acquisition Act which is similar to S. 54 of the Land Acquisition Act dealing with the filing of the appeal. In that case the State Government acquired the land for the purpose of constructing staff quarters for Kerala State Electricity Board and after the Award the matter was referred by the Collector under S 20 of the Act and the Court enhanced compensation and the amount of solatium. The cost of acquisition was to be met by the Electricity Board and the Electricity Board was not a party before the Court and when the Board sought permission to file appeal in the High Court it war held that the Electricity Board was competent to file an appeal and hence permission was given The learned Judges have pointed out that neither S.60 of the Kerala Act nor S. 90 of the Code bars an appeal by one who is not a party to proceedings before the Civil Court to which the matter has been referred by the Collector under S.20 of the Act from the award passed by that Court which for the purposes of appeal is to be treated as a decree passed by that Court. Accordingly, the State Electricity Board would be adversely affected by the decision of the Sub Judge Consequently, the leave to appeal was granted. The learned Judges have referred to the decision of the Supreme Court in Himalaya Tiles and Marble (P) Ltd. Vs. Francis Victor Coutinho (dead) by LR''s., and other casts.

In the decision in Asst. Commissioner & Land Acquisition Officer, Bagalkot v. Basappa Ramappa Badardinni AIR 1985 Kar 75 the learned Judges of the Karnataka High Court dealt with the case where the land was acquired as the instance and for the purpose of the Market Committee and the compensation awarded for the lands was also payable by the Committee, it was a person interested within the meaning of the inclusive definition of the expression under S. 18 of the Act. The Committee was vitally interested in seeing that just and not a heavy compensation was paid for the land acquired. Award made without notice to the Committee and the enhanced compensation awarded on reference were held to be illegal and had to be set aside The learned Judges of the Karnataka High Court have also followed the decision reported in Himalaya Tiles and Marble (P) Ltd. Vs. Francis Victor Coutinho (dead) by LR''s., .

Lastly the learned counsel for the petitioner pointing out the decision in National Textile Workers'' Union and Others Vs. P.R. Ramakrishnan and Others, which was a case under the Companies Act relating to winding up petition submitted that the learned Judges of the Supreme Court in a majority view have held that the workers of a Company are entitled to appear at the hearing of the winding up petition whether to support or to oppose it so long as no winding order is made by the Court. The workers hive a locus standi to appear and be heard in the winding up petition both before the winding up petition is admitted and an order for advertisement is made as also after the admission and advertisement of the winding up petition until an order is made for winding up the company. The learned Judges have pointed out that if a winding up order is made and the workers are aggrieved by it, they are also entitled to prefer an appeal and contend in the appeal that no winding up order should have been made by the Company Judge.

On the other hand, the learned senior counsel for the respondents Mr. M.R. Narayanaswami contended that the Division Bench of our High Court in the decision reported in Kanyaka Parameswari Devasthanam and Charities Vs. Srila Sri Ambalawana Pandara Sannadhi and Another, , following the view held by the Andhra Pradesh High Court in the decision reported in The Andhra Pradesh Agricultural University, Rajendranagar Vs. Mahmoodunnisa Begum and Another, , has held that the Devasthanam for which the land was acquired cannot be impleaded and the Devasthanam was not a person interested within the meaning of S. 3 (B) or 5(A) of the Act and as the Devasthanam could not be a party to the acquisition proceedings it had no locus standi. The learned counsel also pointed out that the Supreme Court in the decision reported in Santosh Kumar and Others Vs. Central Warehousing Corporation and Another, have clearly pointed out that the scheme of the Act is that, apart from fraud, corruption or collusion, the amount of compensation awarded by the Collector under S. 11 may not be questioned in any proceeding either by the Government or by the Company or local authority at whose instance the acquisition is made. S.50(2) and S.25 lead to that inevitable conclusion and what may not be done under the provisions of the Act may not be permitted to be done by invoking the jurisdiction of the High Court under Art. 226. When S.50(2) expressly bars the company or local authority at whose in-instance the acquisition is made from demanding a reference under S.18 notwithstanding that such company or local authority may be allowed to adduce evidence before the Collector, and when S. 25 expressly prohibits the Court from reducing the amount of compensation while dealing with the reference under S.18, it is not clearly permissible for the company or local authority to invoke the jurisdiction of the High Court under Art. 226 to challenge the amount of compensation awarded by the Collector and having reduced.

The learned counsel also pointed out that the Supreme Court in a recent decision reported in Shri Chandu Lal Chandraker v. Shri Puran Mal Judgment Today 1988 2 S.C. 15, has held that a school which was given part of the land acquired by the Municipal committee under an agreement which required that in the event of compensation being enhanced, the school will be liable to pay the same which wanted to be impleaded in the proceedings regarding the enhanced compensation, the Tribunal refused to implead and the Supreme Court affirmed that the school cannot be held to be a person interested and the School bad no right to question the Award. The learned Judges referring the case of Himalaya Tiles and Marble (P) Ltd. Vs. Francis Victor Coutinho (dead) by LR''s., have held that the ratio laid down by the Supreme Court in that case will not apply as the appellants were not interested persons and they have no right to question the Award.

On a careful consideration of the contentions put forward on either side and also taking into consideration the principles laid down, we are unable to accept the contention put forward on behalf of the Nilgiris District Co-operative Milk Producers Union Limited however much they were persuasive and we bold that the Union cannot be said to be a person interested. Merely because the Union filed the petition C.M.P. No. 12954 of 1984 and that petition was ordered, it is not open to the petitioner to be impleaded in these proceedings.

Now coming to the main appeal the Land Acquisition Officer who was the Referring Officer before the Sub Judge, Udhagamandalam, has filed the appeal, as already pointed out, contending that the compensation had been fixed by the Land Acquisition Officer after taking into consideration all the relevant factors and materials and the compensation fixed by the Officer is correct, but the Court below has enhanced the compensation treating the land as house site when they are actually agricultural lands and the Court below failed to see that the price paid for small plots of land cannot be a safe guide for determining the compensation and the sale deeds dated 30-3-1977. 30-12-1978 and 2-12-1980 could not be relied on for enhancing the compensation as there is no evidence to show that the lands under acquisition are similar in nature to the lands sold thereunder and the Court below also failed to see that due regard to the existing condition with all its existing advantage excluding any advantage due to the carrying out of the scheme for which it is acquired alone should be taken into consideration and at any rate fixing up compensation at the rate of Rs. 5,0,0000 per acre is highly exorbitant.

It is to be pointed out that on behalf of the claimants, claimant No. 23 had been examined as P.W.1 and another witness also had been examined on their behalf. On behalf of the Land Acquisition Officer two witnesses had been examined. S.4(1) notification in this case is dated 15-12-1980 and possession was taken on 5-1-81. The land acquired is in Udhagamandalam-Coonoor main road and it is within a distance of about � K.M. from a place known as Charring Cross in Ooty town. The evidence of P.W.1 (Claimant No. 23) is to the effect that there are residential bungalows also near about the place. His evidence is also clear that there were tenants in the land who were cultivating. The facts that the lands acquired were agricultural lands is not in dispute. Level of the land is stated to be even and it is the case of the claimants that though the lands are agricultural lands, the land is having the potentiality of building sites. Decisions have been placed before the learned Sub Judge contending that the compensation has to be worked out treating the land as potential site for building. The learned Sub Judge referring to the evidence of the Land Acquisition Officer has pointed out that he has stated that there is no classification in Ooty of lands either as housing sites or agricultural lands and in agricultural lands building could be constructed. The witness has stated that the land is flat land and the land has got good water facility and the land of that nature fit for building purpose will get better price. Referring to the documents relied on by the claimants dated 30-3-1977, 30-12-1978 and 12-12-1980 the learned Sub Judge has pointed out that they are earlier to the date of notification (15-12-1980) and those documents could be taken into consideration in arriving at the market value. As regards the first document dated 30-3-1977 it is shown that the sale price included a building and land and the second document as well as the third document are comprised of building its well as land. The learned Sub Judge has pointed out that inasmuch as those sale deeds comprised of land as well as building the Land Acquisition Officer had not taken them into consideration without referring to the price of the land fixed by the Government.

The learned Sub Judge after referring to the decisions cited on behalf of the claimants with regard to arriving at the market price by taking into consideration the potential value of the land after extracting relevant passages has held that the potential value has to be taken into consideration in arriving at the market value. Then referring to He of the land and the alternative method of arriving at the compensation on the basis of income for 20 years from the land and the contention based on the evidence of P.Ws. 1 and 2 and pointing out that there had been potato cultivation and the claim made by P.W.1 of realising an income of Rs. 30,000 per year the learned Sub-Judge has chosen to come to the conclusion that income could be fixed at Rs. 25,000 per year. Further down the learned Sub-Judge Mating that on the basis of the decisions relied on by the claimants and the documents relied on by them had fixed the rate of compensation at Rs. 5,00,000 per acre. The learned Sub-Judge while coiling to such conclusion has observed that the and acquired is on the western side of Ooty-Coonoor Road and taking into consideration the documents marked as Exs.A1 to A3 and the potential value of the land as a building site and its nearness to Charring Cross, it will be fair and proper that the price could be fixed at Rs. 5,00.000 per acre. As contended by the learned Additional Government Pleader appealing for the appellant apart from slating ho, the learned Sub Judge did not indicate any other aspect having been taken into consideration by him in arriving at that rate. No doubt, in fixing the rate of compensation the process may involve some kind of guess work, but then such fixing of the rate of compensation should not appear to be baseless or arbitrary.

Ss.23 and 24 of the Land Acquisition Act or the relevant provisions dealing with mailers to be considered in determining compensation and matters to be excluded in determining compensation respectively. In determining the amount of compensation for the land acquired the market value of the land on the date of notification under S. 4(1) is quite relevant. As laid down in S.23 such market value could be ascertained from instances of sale of land proximate in time and it will also include potentiality of the land and decisions have laid down that the value of the land should not depend on the actual use it was put to on the date of publication of notification under S. 4 of the Act. The term ''market value'' according to the decisions is the price that an owner is willing, and not obliged to sell, might reasonably expect to obtain from a willing purchaser with whom he was bargaining for the sale and purchase of the land, under circumstances, where neither can be considered as acting under compulsion. The price it may mean mat would be paid by a willing purchaser to a willing seller where both are actuated by fair business principles prevalent at the time in the locality, and there is no disinclination on the part of the vendor to part with his land and the purchaser is not compelled by some urgent necessity to buy. It has been made clear that the land is not to be valued by reference to use to which it was put at the, time at which is value has to be determined but also by reference to the user to which it is reasonably capable of being put in they immediate or reasonably near future. Therefore, it may be stated that in the present case the compensation has to be arrived at treating the land as agricultural land only considering the potential value of the land. It may be pointed out that the documents marked as Ex. A1 to 3 referred to by the learned Sub Judge are not in respect of lands only and as shown earlier they comprised land as well as building. While taking into consideration such documents comprising land and building it may be pointed out that potential value of the land need not be separately awarded in view of the fact that such sales can be stated to be covering such potential value also.

In this case, it can be stated that the land acquired measuring 11-32 acres to be a large extent. So it can be stated that valuation of small extent under the documents at the time of notification could be made to govern the valuation for acquisition of large areas of land since it is well known that when large area has to be sold, it cannot possibly fetch a price at the same rate at which small plots could be sold. It may be stated that in this case though the acquisition was made for a public purpose by the Government it cannot at all be stated that the claimants who are respondents 21 to 23 to whom the land belonged were not willing to sell the land and it has been pointed out that they suggested the lands to be acquired under the land acquisition proceedings, since the lands were under the cultivation of tenants who had been shown as Respondents 2 to 20 and 24 to 28. In such circumstances only land acquisition proceeding was taken at the instance of the Nilgiris District Co-operative Milk Producers Union Limited. Now it was stated that the matter had been settled between the tenants and respondents 21 to 23. It may also be pointed out that the Union through its Managing Director has filed ant affidavit before us stating among other Things that after taking into consideration the requirement of the Union they have decided to forego about 4 to 5 acres Of land south of their buildings erected by them and a portion of the land is bifurcated by a small stream running across the total area of the land acquired and they have filed the affidavit without prejudice to the objections raised for the enhanced compensation. Such filing of the affidavit at this stage cannot be said to be having any impact in arriving at the compensation. But it may be stated that the rate of compensation arrived at by the Sub Judge may not be the price that marry be offered by a willing purchaser which is one of the criteria in arriving at the market value. We may also venture to say that Courts dealing with such reference under the Land Acquisition Act may not by themselves be parties to enhance the value of the land in any place, without taking into consideration all aspects in arriving at the rate of compensation. Courts have to be cautious in this regard since any rate that maybe fixed by the Courts may be quoted as one Judicially fixed and such rate should prevail. We may hasten to add that we are not stating that Courts should not at all consider contentions with regard to the enhanced compensation. The compensation must be deter mined by reference 10 the price which a willing vendor might reasonably expect to obtain from a willing purchaser. The disinclination of the vendor to part with his land or the urgent necessity of the purchaser to buy must alike be disregarded. The land has to be valued without considering any increase to the value of the land acquired likely to accrue from the use to which the land acquired will be put when acquired (Fifth Item of S.24). In this connection it may also be pointed that documents marked as Exs.A1 to A3 lay down the value of realised possibilities and not the potential value as contemplated under the, provisions of the Act.

The rate as per Ex.A1 document dated 30-7-1977 is shown to be Rs. 4.166,66 per cent. Under Ex.A2 dated 30-12-1978 the rate is stated to be working out at Rs. 6761.90 per cent and the rate under Ex.A3 dated 12-12-1980 stated to be working out at Rs. 8,000 per cent. It may be pointed out that the learned Additional Government Pleader has filed C.M.P. No. 9728 of 1988 under O. 41 R. 27 and S. 151. C.P.C., for reception, of the xerox copy of the Document No. 1166/78 dated 15-9-1978 The document proposed to be filed is shown to have been executed by Ali Sait, 23rd respondent in the appeal and under the document 24 cents in S. No. 1106/4C has been shown to be sold to one Hongar Gowder for a sum of Rs. 12,000. The land sold under the document formed part of the acquired land and according to the affidavit filed by the Collector of Nilgiris District the said land is situate in a more advantageous place than the acquired land. Accordingly, the value under the said document is stated to be the correct market value for the acquired land also and the Land Acquisition Officer therefore relied upon the document. The said document was not filed as one of the documents before the Sub Court, Uthagamandalam, but mention has been made about it in the Award. But the Court has not referred to the said document and as the Additional Government Pleader wanted registration copy of the said document, but as the staff were on strike during the period, they could not get the registration copy, but they obtained the original document from the purchaser and xerox copy had been taken and in such circumstances it has been prayed that the said document which is the xerox copy of Document No. 1106/78 dated 15-9-1978 has to be received as additional evidence.

The petition has been opposed on behalf of respondents 21 to 23 contending that the petition is not maintainable at this stage and the appeal having been filed on 15-2-84 this petition has been filed belatedly and having regard to the facts the provision under O. 41, R. 27 will not be applicable and it is not the case of the appellant that the trial court refused to receive the document and it is also not the case of the appellant that it was not within the knowledge of the appellant at the time when the matter was pending the trial Court Further on behalf of the respondents it was submitted in the trial Court that the land was sold to the tenant under the said document as a matter of concession. The said tenant was holding an extent of 122 cents belonging to them and a deal was struck and the tenant agreed that if 24 cents were sold to him at a concessional rate he was prepared to surrender rest of the land. In such circumstances only it was sold at a concessional rate and further 24 cents sold did not form part of the land acquired and be has also built a house there. Further, according to the respondents, the Land Acquisition Officer has apparently been satisfied with the reason put forth by them that it was a concessional sale and that the document was not produced and at any rate if that is now produced the respondents will be deprived of the opportunity to adduce evidence relating to the special circumstances attending upon that sale. When the document proposed to be received requires further oral evidence that would be one of the grounds for rejecting the additional evidence. There was nothing in the Memorandum of Appeal expressing any grievance that the trial Court had not taken into consideration that document and therefore the present petition is not at all maintainable. Hence it has been prayed that the petition has to be dismissed.

As already stated, the learned Sub Judge mentioning about the documents marked as Exs.A1 to A3 and also staling that the land is having potential value has fixed the rate of compensation at Rs. 5,00,000 per acre. In the decision reported in AIR 1939 98 (Privy Council) which relates to a case from our High Court reported in Revenue Divisional Officer v. Sri Rajah Vyricherlu Narayana Gajapati Raju Bahadur Garu 46 L.W. 492= AIR 1937 Mad. 902, the Privy Council has disclosed the general principles laid down in English decisions under the Land Acquisition Act, 1845 and have stated that they are equally applicable to proceedings under the Land Acquisition Act. Some of those principles have been mentioned earlier. The case related to acquisition of land for Vizag Port Trust. While dealing with the question of increase accruing to value owing to potentialities it has been pointed out that the value of potentialities mast be ascertained by the Arbitrator on such materials as are available to him and without indulging in feats of imagination. When there is only one possible purchaser, the value should be the sum which the arbitrator estimates a willing purchaser will pay and not what a purchaser will pay under compulsion (page 102). At the same time their Lordships have also pointed out that S. 24(5) (fifthly) of the Land Acquisition Act, 1984 does not mean that the possibility that a particular purchaser of land will give a higher price for it by reason of its possessing a special adaptability must be disregarded merely because the land will be more valuable in his hands when he exploits that adaptability than it would be if left in the bauds of the vendor who was unable to exploit it. (page 108).

In that case on the south of the laud acquired by the Harbour Authority the property of the appellant known as Lova Gardens was situate and the gardens consisted of a valley running from high ground on the south west to low ground on the northeast adjoining the land of the Harbour Authority. The upper portion of the valley consisted of a shallow basin in the hills forming the catchments area of a spring water that emerged from the ground at the northeast end of the basin. That spring is stated to have yielded even in the dry season an average flow of 50,000 gallons a day of excellent drinking water. A portion of the water was diverted by the Harbour Authority and the rest of it ran down the valley to the lower end of Lova Gardens and discharged itself into the creek. On the basis of that spring among other things the contention was put forward for awarding compensation for the special adaptability of the land to special drinking water. With regard to the same the Sub Judge valued the special adaptability as being one at Rs. 1,05,000 on the footing that the appellant could not have been in a position to supply water to the Harbour but for compulsory acquisition. Pointing out that water could not be exploited by the appellant himself and that it would necessarily be some years before the water would become a profit-earning asset in their hands, the Harbour Authority, however willing purchasers they might be, would not have agreed to pay anything like that sum. In such circumstances, their Lordships of the Privy Council have taken up the view to refer the matter back to the Sub Judge to revise his award. But as the parties requested their Lordships with a view to save expense to state what should be the proper amount of the award, their Lordships consented to do ST and ultimately reduced the compensation.

The decision reported in Dollar Company, Madras v. Collector of Madras 89 L.W. 103= AIR 1975 S.C. 167, was placed before us on behalf of the appellant to show that their Lordships of the Supreme Court have laid down that compensation for compulsory acquisition as governed by S.23, gives high priority to the market value of the land at the date of the publication of the notification under S.4 sub-S.(1) and the main criterion to determine the market value is what a wilting purchaser would pay to a willing vendor. An actual transaction with respect to the specific land of recent dare is a guide-book that Courts may not neglect when called upon to fix the precise compensation. The best evidence of the value of the property is the sale of the very properly to which the claimant is a party. If the sale is of recent date, then all that need normally be proved is that the sale was between a willing purchaser and a willing seller, that there has not been any appreciable rise or fall since then and that nothing has been done on the land during the short interval to raise its value. Price paid by the owner recently represents an expression of market value, as bona fide evidence of value, subject to such matters as (a) the relationship of the parties, (b) the market conditions and the terms of sale, and (c) the date of sale. I may not end the enquiry, but does a long way to solve the problem. In paragraph 6 at page 1672 their Lordships have pointed out an actual transaction with respect to the specific land of recent date is a guide-book that courts may not neglect when called upon to fix the precise compensation. Viewed from a slightly different aspect, it is but fair that compulsory land-acquisition while assuring a just equivalent should not be converted into an avaricious windfall. This decision is sought to be relied on with regard to the land sold by the 23rd respondent under the document dated 15-9-1978 which had been referred by the learned Sub-Judge, but the document had not been filed before the teamed Sub Judge and the xerox copy of which has been sought to be filed in C.M.P. No. 9728 of 1988.

The learned counsel for the appellant submitted the decision reported in Mohammed Karimuddin v. The Collector of Madras 77 L.W. 509= 1965 1 M.L.J. 66 rendered by Justice G.R. Jagadeesan and Justice T. Venkatadri dealing with the principles for fixing the compensation with regard to extensive site which was acquired for Saying oat house sites for Government servants, the learned Judges have pointed that where Government acquires land in an undeveloped area for the purpose of converting into housing site, when certain potions of the land have naturally to be set apart for laying roads and other amenities, it will be proper to make allowance for such cost in the compensation payable to the owners of the acquired land But, that principle will not apply to cases of acquisition of large extent of land in the occupation of a single owner and situate in the heart of the town with all amenities provided. Merely because the acquired lands have to be laid down in smaller plots and such laying out necessitates formation of roads and provision of amenities to such newly laid down roads, the owner of the land cannot be called upon to bear the cost of such amenities. It is for the Government to lay the roads and provide the amenities within the area acquired by them.

In the decision reported in Mrs. V. Kannialal v. Collector of Madras 78 L.W. 474= AIR 1966 Mad. 82, rendered by Veeraswami. J, (as he then was) and Venkatadri, J. the learned Judges have pointed out that where the value of an undeveloped land in a developed area is to be assessed on a comparison with the value of the developed area, the cost of factors required to bring the lands on a par with the developed lands has necessarily to be deducted from the process of estimating the compensation Allowance for the space for roads and also for the cost of laying roads and of other amenities has to be made. The land acquired regarding which compensation has been referred is shown to be in respect of land abutting the bazaar road and it appears one of the documents on the basis of which compensation was claimed related to a plot of and sold within three years of the date of acquisition, but it was smaller in extent than the area of the land under acquisition. As regards the same the learned Judges have held that the claims in respect of another plot of land abutting the main lane and the sale deed relating to smaller plot about 5 years prior to the date of acquisition were reasonable. The learned Judges have also pointed out that though a price fetched by a small plot of land could not be the only basis for determining the market value of a plot of a larger extent, since the second plot of land abutting a main lane and the prices had also increased since 1955 the claim in respect of that land must also be considered reasonable. In this decision as shown earlier the learned Judges have pointed out that allowance has to be made for the space for roads and also for the cost of laying roads and other amenities.

In the decision reported in Brig. Sahib Singh Kalha and Others Vs. Amritsar Improvement Trust and Others, , their Lordships of the Supreme Court pointing out the matters to be considered for determination of compensation under S.23 of the Act with reference to land acquired being in an undeveloped area, the Collector basing ''belting'' principle and working out the compensation making a cut of 33 per cent of the market value in one case and 70 percent in others was held to be justified. In paragraph 3 at page 941 stating the facts their Lordships have pointed out the area of 269 kanals and 9 marlas out of a total area of 118.5 acres had been acquired. The Collector based the award on the ''belting'' principle and classified the acquired area into two belts, namely ''A'' and ''B''. An area measuring 48 kanals and 13 marlas abutting the roads on three sides to a depth of 40 kanals was classified as belt ''A'' and the remaining 200 kanals 11 marlas as belt ''B''. The land acquired is situate undoubtedly in the vicinity of a developed locality, but is itself undeveloped, although it is bounded by 4 roads, and the bungalow and factories situate outside the acquired area and the area being extensive, it has to be plotted out into small house sites with amenities consisting of roads, drainage, lighting and so on and roads will require space and laving of roads will mean expenditure. In such circumstances the cut of 33 per cent of the market value in one case and 20 per cent in the other case by the Tribunal were upheld and extracting what the Tribunal observed. Their Lordships have further stated that it is well settled principle of valuation that where there is a large area of undeveloped land under acquisition, provision has to be made for providing the minimum amenities of town life such as water connections, well laid-out roads, drainage facility, electric connections, etc. The process necessarily involves deduction of the cost of factors required to bring the undeveloped lands on a par with the developed lands. An extent of 20 per cent of the total land acquired is normally taken as a reasonable deduction for the space required for roads. This is apart from the cost of laying roads, themselves and the cost of providing other amenities like electricity, water underground drainage, etc. In Smt. Tribeni Devi and Others Vs. Collector of Ranchi, , the Court allowed a deduction of 33-1/3 per cent towards the cost of development. The cost of development may range from 20 to 33 per cent depending on the nature of the land site situation and the stage of development, etc. Their Lordships pointing out that there was material before the Tribunal for deducting such cuts of 20 per cent and 33 per cent have observed that such deductions were not arbitrary or unreasonable, having regard to the fact that the land acquired is an undeveloped area and the award of the Tribunal is based on the ''belting'' principle.

In the latest decision reported in Administrator General of West Bengal Vs. Collector, Varanasi, , rendered by S. Natarajan and M.N. Venkatachaliah, JJ. their Lordships have elaborately discussed the determination of market value of a land with potentialities for urban use and have also discussed the determination of market value with regard to large extents of land with potentialities for urban use. While discussing their Lordships have pointed out that necessary deductions for development costs are to be made. In paragraph 6 at page 947 pointing out earlier decisions their Lordships have stated that the principle that evidence of market value of sales of small developed plots is not a safe guide in valuing large extents of lands has to be understood in its proper perspective. The principle requires that prices fetched for small developed plots cannot directly be adopted in valuing large extents. However, if it is shown that the large extent to be valued does admit of and is ripe for use for building purposes, that building lots that could be laid out on the land would be good selling proposition and that valuation on the basis of the method of a hypothetical lay-out could with justification be adopted, then in valuing such small laid-out sites, the valuation indicated by the sale about the time of the notification would be relevant. In such a case, necessary deductions for the extent of land required for the formation of roads and other civic amenities, expenses of development of the sites by laying-out roads, drains, sewers, water and electricity lines, and the interest on the outlays for the period of deferment of the realisation of the price, the profits on the venture, etc. are to be made. Referring to the earlier decision in Brig Sahib Singh Kalha v. Amritsar Improvement Trust 1982-1-SCC-419 their Lordships have stated that the said decision indicates deductions for land required for roads and other developmental expenses and they can together come upto as much as 53%. Their Lordships at the end of paragraph 7 at page 948 have stated what is to be estimated therefrom is the ''wholesale'' price of land. In Bombay Improvement Trust Vs. Mervanji Manekji Mistry, Macleod, C.J. suggested a simple rule:

Valuation cases must be dealt with just as much from the point of view of the hypothetical purchase as of the claimant. The valuation itself most often be more or less a matter of guesswork. But it is obviously wrong to fix upon a valuation which judged by everyday principles no purchaser would he likely to give...

...I have always been adverse to elaborate hypothetical calculations which are no more likely to lead to a fair conclusion, than far simple method. But in any event, no harm can be done by testing a conclusion arrived at in one way by a conclusion arrived at in another...

...A very simple method of valuing laud wholesale from retail price is to take anything between one and half and one-third according to circumstances of the expected gross valuation as the whole sale price...

With reference to the abovesaid four decisions it may be stated that the acquired laud in our case as pointed out by the learned Sub Judge is having potential value with regard to building construction. It may also be stated that the land at the time of notification was used for agricultural purpose. But at the same time it was within about � K.M. to Charring cross. It may also be stated that it cannot be called either an undeveloped area or developed land. As pointed out earlier, while fixing the market value the learned Sub Judge has not discussed about making deductions at all as laid down in the abovesaid decisions. The land has been acquired for definite purpose for the Union and they have constructed buildings for the dairy and necessarily the buildings should have come up after expending some considerable sums for laying roads making electricity connection, drainage and other amenities. In the absence of such deduction or any finding with regard to the same we ate unable to uphold the fixing of the market value by the learned Sub Judge. We find that the learned Sub Judges erred in fixing the value without taking such aspects into consideration.

It may also be pointed out that as regards the document dated 15-9-1978 which is now sought to be filed as additional evidence, even according to respondents 21 to 23, the sale deed was under a particular circumstance, namely, to get the remaining portion of the land which was in the possession of the tenant after selling 24 cents to the tenant. When the respondents have come forward stating that they have offered some explanation in the Sub-Court itself there cannot be any valid objection for the said document being received as additional evidence on behalf of the appellant, Land Acquisition Officer giving an opportunity to the respondents to put forward their explanation. In such circumstances stated above, we feel the market value fixed by the leaned Sub Judge at Rs. 5,00,000 per acre has to be set aside and the matter could be remitted back to the court of the learned District Judge. Udhagamandalam for being considered afresh, giving an opportunity to the parties to adduce further evidence. It may be pointed out that as regards the document which is sought to be now filed the Collector has stated in the affidavit that registration copy of the document will be obtained. As regards the said document it may be relevant to point out that the document was impounded for collecting stamp duty penalty and after payment of such penalty only the document has been validated. In such circumstances it cannot be stated that there had been delay which could not be condoned. Therefore, registration copy of the said document could be received as additional evidence by the learned District Judge giving opportunities to the parties to adduce further evidence and dispose of the case according to law.

Mr. M.R. Narayanaswami, learned senior counsel pointing out the memo filed on behalf of respondents 21 to 23 contended that in addition to the amount awarded by the Court below, they will be entitled to amounts as per calculation in the memo filed having regard to the decision reported in Bhag Singh and Others Vs. Union Territory of Chandigarh through the land acquisition collector, Chandigarh, , and it is further stated in that memo that the respondents are not liable to pay Court fee on the said amount on the basis of the decisions reported in J. Pattammal Vs. The Collector of Madras and Another, , and Mouli Abun Naser Khuthubuddin Syed Shah Mohammed Rakher Khadiri v. The Special Tahsildar of Land Acquisition (N.H. Scheme), Sathuvachari 100 L.W. 138. The appellant has raised objections to the said memo stating that the decision in Bhag Singh and Others Vs. Union Territory of Chandigarh through the land acquisition collector, Chandigarh, is subject to a reference before the Constitution Bench of the Supreme final and the decisions reported in Mahavir Prasad Santuka v. Collector, Cuttack 100 L.W. 660= 1987-1-S.C.C. 587= AIR 1997 S.C. 720, has given the right to move the Court again for the reliefs under the Amended Act, if the judgment is delivered in their favour by the Constitution Bench of the Supreme Court of India. Having regard to the conclusion reached by us remitting the matter to the Court of the District Judge we feel no order need be passed as regards the same.

As regards the additional affidavit filed on behalf of the Union through the Managing Director, stating that the Union faced with severe financial burden has reconsidered the requirement and decided to forego 4 to 5 acres of land south of the buildings which have been erected and the portion is bifurcated by a small street, we wish to state that if the Union feels in such manner to forego the said extent, the same may be intimated to the District Collector for being utilised for any other public purpose and thereby the Union may not suffer in the event of enhancement of compensation after the final disposal of the reference.

Thus on a consideration of the materials on record we find that the Award passed by the learned Sub Judge, Udhagamandalam has to be set aside and the matter has to be remitted back to the learned District Judge for fresh disposal bearing in mind the principles to be applied and after giving opportunities to adduce further evidence and dispose of the same in accordance with law. In the result, the appeal is allowed as indicated above. In the circumstances the parties are directed to bear their own costs.