The Special Deputy Collector, Land Acquisition (General) vs Chandhrasekara Shetty and Others

P. Ramakrishnam Raju, J.—The Special Deputy Collector, Land Acquisition (General), Hyderabad is the appellant. He acquired-Ac. 6-32 guntas in Survey Nos. 61,62,63 and 68 of Bagh Amberpet belonging to the respondents for purpose of constructing a Housing Colony. A draft notification u/s 4(1) of the Land Acquisition Act was published on 6-1-1972 and the draft declaration u/s 6 was later published in the Gazette dated 13-4-1972. Notices under Sections 9 and 10 of the Act were also issued on 17-4-1972 and the respondents have submitted their claim statement on 3-5-1972. An agreement dated 10-2-1972 was also entered into between the parties fixing the market value of the land at the rate of Rs. l8/-per square yard. However on 27-11-1972 a notification u/s 48 of the Land Acquisition Act was published withdrawing the acquisition proceedings. The respondents-claimants therefore sought for a reference u/s 48(2) of the Land Acquisition Act claiming compensation of Rs. 6,34,560/- consisting of Rs. 2,34,435/- being the difference in the land value as the respondents had to sell away the land subsequently at Rs. 10/-per square yard; while the Housing Board agreed to purchase at Rs. 18/- per square yard and also for a further sum of Rs. 4,00,125/- being the damages suffered by them on account of winding up of their Dairy Farm. The Land Acquisition Officer passed a Nil Award. On reference to the Civil Court, the Civil Court awarded a sum of Rs. 1,22,416/- being the difference in the loss sustained by the respondents due to variation of price. Aggrieved by the said order, this appeal.

Sri T. Ramulu, the learned Standing Counsel for the Housing Board submits that the Lower Court has erred in awarding damages of Rs. 1,22,416/- being the difference of sale price as the sale transaction entered into by the respondents in 1974 after a lapse of about one year after the date of withdrawal of the notification cannot form the basis for fixing the compensation. It is also his contention that there is upward trend of prices in respect of the real estate in the Twin Cities, and therefore, when both parties have fixed the sale price at Rs. 18/- per square yard, there is no reason to believe that the said price has fallen after the withdrawal of the notification. In any event the rate per square yard mentioned in the sale deed cannot reflect the true sale transaction as it is common knowledge that for purpose of avoiding stamp duty and registration charges parties very often resort to under valuing the sale deeds. He finally contended that even assuming that the respondents have suffered loss the respondents have not taken any steps to mitigate the loss and in the absence of proof of taking such steps, they are not entitled to any compensation.

The respondents have examined 8 witnesses besides marking Exs. A-1 to A-26. The appellant examined R.W.1 and marked Exs.B-1 to B-20.

The respondents made a total claim for a sum of Rs. 6,34,560/- the Break- up of which is two-fold. A sum of Rs. 2,34,435/- is claimed under the head ''difference in the land value'' as they were compelled to sell the land at the rate of Rs. 10/- per sq. yard; while the Housing Board agreed to purchase it at Rs. 18/- per sq. yard. They further claimed a sum of Rs. 4,00,125/- being the damages due to winding up of the Dairy Farm which was existing in the said land. The lower Court has rejected the claim of the respondents under the second head. As there is no cross-objection by the respondents, this claim need not be gone into in this appeal. However, the lower Court awarded a sum of Rs. 1,22,416/- being the damages as regards the difference of price agreed to be paid by the Housing Board and the price actually realised by subsequent sale in favour of Padma Co-operative Housing Society. So, the only claim that falls for consideration is a sum of Rs. 2,34,435/- which answers the difference in sale price of Rs. 10/- and Rs. 18/- per square yard.

P.W. 1 is the husband of the claimant No. 3. He admits that he did not give any notice in writing either to the Land Acquisition Officer or to the Housing Board between 10-2-1972 and 27-11-1972 or thereafter. P.W. 2 is the Secretary of the Padma Housing Co-operative Society. In his evidence he states that the Society purchased the land at the rate of Rs. 10/- per square yard under three sale deeds dated 31-5-1974,22-64974 and the last one in October, 1974. P.W.3 was examined to show about the construction of three sheds for running the Dairy Farm. P.W. 4 is a Clerk in Vijaya Bank and he was examined to show about the advance of Rs. 3,00,000/- sanctioned by Vijaya Bank for starting Dairy Farm. P.W. 5 is purchaser of she -buffalloes. P.W.7 is the Minister for Housing Board at that time who also deposed about the 150 she-buffaloes seen in the Dairy Farm at the time of his inspection. P.W.8 was a member of the Housing Board who deposed that he also visited the site in question along with the Chairman of the Housing Board in 1972. Major part of the evidence was let in by the respondent only to establish about the existence of the Dairy Farm, availability of 150 and more she buffaloes and their sale. Therefore/ the relevant evidence for purposes of deciding the dispute in question is that of P.W.1 and P.W.2 as well as R.W.1. The learned Judge observed in his judgment that after de-notification the property was sold at Rs. 10/- per square yard admittedly, and therefore, the difference per square yard is Rs. 8/- and the total loss sustained by the respondents comes to Rs. 1,22,416/- and accordingly, he passed the Award.

Sri T. Ramulu, the learned Standing Counsel for the Housing Board submits that the post-notification sales cannot be relied on. I may straight away 1 observe that there is no hard and fast rule that all post-notification sales should I be ignored. In this case more or less the post notification sales were admitted. In the counter-affidavit filed by the appellant before the lower Court no plea was taken disputing the genuineness of the sales entered into by the respondents with Padma Co-operative Housing Society. It is not disputed that the sales are not genuine nor the rate per square yard mentioned in the sale deeds was cooked up with, any ulterior motive or even the correct sale price was not reflected in the documents in order to avoid payment of stamp duty and registration charges or even to claim-compensation from the Housing Board in these proceedings. There is not even any suggestion to P.Ws. that the sale deeds were under-valued. In the absence of any basis to doubt that the said sale transactions do not reflect correctly the agreed sale price, I cannot accept the contention of the learned Standing Counsel for the appellant that the post-sale transaction cannot be relied on. No doubt judicial notice can be taken that the prices of real estate are going up day by day and there is no scope to imagine that prices have come down during any particular period. But as rightly contended by Sri V. Madhava Reddy that A.P. Vacant Lands (Prohibition of Alienation) Act, 1972 (Act 12 of 72) preceded by Ordinance in May, 1972 has brought about a situation immediately after the promulgation of Ordinance and bring out the Legislation on the Statute Book resulted in sudden fall of prices. In fact in the withdrawal notification dated 27-11-1972 the reason for withdrawal of the acquisition proceedings is mentioned as due to the impending Legislation imposing ceiling on Urban property. Therefore, in my view there is every justification for disposing of the land at a low price. There were pressing demands on the respondents including threat of sale by the Bank for the outstandings on the borrowals. Therefore, I cannot accept the contention of the learned Standing Counsel for the appellant that post-notification sales cannot be relied on or that the correct sale price is not reflected in the sale deeds particularly in the absence of any plea to that effect in the lower Court

Section 48(2) of the Land Acquisition Act provides for compensation to me land-owner which runs as follows:-

"Whenever the Government withdraws from any such acquisition, the Collector shall determine the amount of compensation due for the damage suffered by the owner in consequence of the notice or of any proceedings thereunder, and shall pay such amount to the person interested, together with all costs reasonably incurred by him in the prosecution of the proceedings under this Act relating to the said land."

The principle on which the compensation is based in the Act is the common law doctrine of dammum absque injuria"

The parametres of claims for damages are well settled. In Murlidhar Chiranjilal Vs. Harishchandra Dwarkadas and Another, the Supreme Court observed as follows:

"The two principles on which damages in such cases are calculated are well-settled. The first is that, as far as possible, he who has proved a breach of a bargain to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed but this principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps."

It is also equally well settled that (1) plaintiff cannot recover avoidable loss; (ii) he can recover even If he suffers more loss while acting to avoid loss as a reasonable prudent man; and (iii) if mere is benefit while so acting, the defendant would be entitled to the said benefit. To put it in a different way, if the plaintiff wilfully allows himself to suffer, though the wrong doer is primarily guilty, the responsibility will be entirely with the sufferer. If on the other hand notwithstanding reasonable steps taken by the injured party damage actually occurs, the responsibility will be upon the wrong-doer, compensation cannot be awarded to the plaintiff who had acted obstinately in denying himself of the opportunities to remedy the inconvenience caused to him and minimise the loss suffered by him. The rule therefore is that there could be no recovery for the consequences that could have reasonably avoided. The leading case is British Westinghouse Electric and Manufacturing Company Limited v. Underground Electric Railways Company of London 1912 AC 673. What were contended there by the appellant is that they are not liable for the cost of Parsons machines because the purchase of those machines was not the consequence of any defect in the appellants machine, but arose from other considerations and the contention was repelled stating that the respondents have acted as reasonable prudent person by purchasing new machine without losing time. In S.J. Rangasamy Aiyar v. S. Venkatarama Aiyar, 1915 Indian Cases 635 the Madras High Court observed that the claim for compensation not being the out come of contractual obligations, the party whose contract has been broken has to lay the foundation for it by showing that he has acted fairly and justly towards the defaulter before he can claim to be reconipensated. In G. Karibasavans Gowd v. N. Veerabhadrappa, ILR XXXV 136 Madras a Division Bench of the Madras High Court took the view that the damages which the plaintiff is entitled to must result directly from the wrongful act of the defendant and no claim can be made to damages which are too remotely connected with it, and it is the duty of the plaintiff to a contract as a prudent man to take all measures to reduce the damage by taking measures to obtain the result he expects from the defendant''s performance. In Namayya v. Union of India 1958 (2) An. W.R. 153 : AIR 1958 A.P. 533. a Division Bench of this Court observed that the plaintiff cannot claim to be compensated for any loss which was due to his own failure to behave reasonably after the purchase and the question as to what action should be taken would always be whether what was done by the plaintiff was a reasonable thing to do having regard to all the circumstances aimed at reducing the loss.

Having regard to the above discussion, it is clear that the respondents have a duty to take all reasonable steps like any other prudent person (could) having a claim for compensation against any person would do under the said circusmtances. But as already stated, the appellant has not taken any plea that the respondents did not take reasonable steps to mitigate the damages. On the other hand it is not even suggested mat there is any under-hand dealing in the sale transactions entered into by the respondents, or that the price settled under those transactions does not tally with the market price prevailing at mat time. Therefore, I cannot agree with the contention of the appellant that the respondents have not taken proper degree of care expected of them in mitigating the damages.

For all the above reasons, I do not find any ground to interfere with the decree and judgment of the lower Court. The appeal therefore fails, and is accordingly dismissed, but in the circumstances without costs.