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Judgment
(PER : HONOURABLE MR. JUSTICE ILESH J. VORA)
In these first appeals under Section 54 of Land Acquisition Act, 1894 (L.A. Act), involving common questions of facts and law, were taken up for hearing together and are being disposed of by this common judgment.
The common award made by the Principal Civil Judge, at Himmatnagar, Sabarkantha in LAR No.59 of 1999 to 62 of 1999, dated 24.11.2011, has been challenged by the appellants-original land owners as well as the respondent -Western Railway, whereunder the Reference Court has partly allowed the references and has granted the additional amount of compensation @ Rs.305/- per square meter over and above the compensation awarded by the SPLO @ Rs.45/- per square meter.
The facts in brief, necessary for the adjudication of the captioned appeals are as follows:
The land owners had been allotted commercial plots for doing business in the outskirt of City: Himmatnagar allegedly, allotted by the State of Idar before 1955. In order to laying down the meter gauge railway line as well as to construct railway quarters, the State Government transferred the land under acquisition to the respondent-Western Railway in the year of 1960. The land owners on the basis of their allotments, claimed their ownership of the plots under acquisition and in legal battle, the matter went up to the Supreme Court and finally, they succeeded in their claim. In such circumstances, the State had initiated re acquisition proceedings under the LA Act. The necessary dates for the proceedings as well as the process of awarding compensation are as follows:
Section 4 Notification published on 20.04.1995, 30.05.1995, 01.06.1995 and 04.04.1996.
Section 6 notification published on 20.07.1996.
Section 11 Award dated 21.04.1997 was being passed by SLAO, Himmatnagar, granting Rs.45/- per sq. mt.
The land owners being dissatisfied with the amount of compensation, sought Reference under Section 18 of the L.A. Act claiming enhancement of compensation.
The Reference Court (LAR Case No. 59 of 1999 to 62 of 1999) vide its judgment and award dated 24.11.2011 awarded additional compensation of Rs.305/- per sq.mt., over and above the compensation of Rs.45/- per sq.mt. awarded by the Special Land Acquisition Officer, along with the interest and other statutory benefits under Section 23(1)(A) of the L.A. Act.
Before the Reference Court, deceased claimant Bhogilal Shah was examined at Exh.32. In order to prove market rate, the claimants had examined witness Sarlaben Shah at Exh.65 and relied upon the order of the Collector, Sabarkantha and other documents produced at Exh.66 and 67 to show that the market rate at the time of notification published under Section 4 was more than Rs.1000/- per square meter. The appellants-claimants relied on the oral deposition of Patel Devesh Ramanbhai at Exh.94 and documents pertaining to allotment of land to the witness produced at Exh.95 and 96 to prove the market rate of the surrounding lands adjacent to the lands under acquisition. The claimants had also produced Government Jantri to support their claim on the aspect of market rate. Against which, the Deputy Collector Mr. Piyush T. Sadhu at Exh.101 and the Officers of the Western Railway Mr. Kamalprasad Sahu examined at Exh.153 to prove the market rate assessed by the SPLO @ Rs.45/-per square meter.
The Reference Court after hearing the parties and appreciation of the evidence, came to the conclusion that, the market rate of the lands under acquisition assessed by the SPLO @ Rs.45/- is not just and proper and having regard to the oral evidence of witness Sarlaben Shah (Exh.65) and documents pertaining to the allotment of land to the witness, produced at Exh.66 and 67, concluded that, the sale instance of witness Sarlaben is a relevant indicator for fixing market value of the land under acquisition. Admittedly, the land price of witness Sarlaben assessed @ Rs.725/- per square meter which was determined on the basis of Town Planning Committee. However, while awarding the additional amount of compensation to the claimants, the Land Reference Court, considering the location of the lands under acquisition, reduced the 50% amount from the sale instance of witness Sarlaben and accordingly, awarded additional amount of compensation @ Rs.305/- per square meter over and above the rate awarded by the SPLO.
Both the parties being aggrieved with the judgment of the Reference Court, filed the captioned appeals.
We have heard learned counsel Mr. Ashok Prajapati, Mr. Manish Shah, Ms. Surbhi Bhati, learned AGP and Ms. Krishna Raval, appearing for the Union of India – Western Railway.
Mr. Ashok Prajapati and Mr. Manish Shah, learned counsel appearing fort the appellants-claimants urged that;
That, the Reference Court has committed error in not considering the oral as well as documentary evidence in its true spirit and prospective and therefore, the assessment of the market value made by the Reference Court is not based on the evidence adduced, but contrary to the evidence and settled principle of law on the aspect of fixation of market rate in the matter of land acquisition.
That, in the facts of the present case, enough material available on record in the sale instances of the similar land in the neighbourhood at or about the date of notification, the Reference Court ought to have considered it as a relevant indicator for determination of the market value of the land under acquisition. Before the Reference Court, the Jantri rate of the Government (Exh.24), the allotment of land to witness Sarlaben Shah at Exh.66 and 67 and allotment of land to the Class-III Employee Association at Exh.95 and 96, were available and it is evident that, the market rate of the lands proximate of the lands under acquisition was more than Rs.1,000/- per square meter. The Reference Court had accepted that, the evidence with respect of allotment of land to witness Sarlaben is the best comparable instance and accordingly, it was taken into consideration for fixation of market rate of the land under acquisition. However, while accepting the evidence of base exemplar (Exh.66 and 67), the Land Reference Court without any justification, reduced the 50% amount of sale exemplar and awarded additional amount of compensation @ Rs.305/- per square meter which suggestive of the fact that, the fixation made by the Land Reference Court is arbitrary and contrary to the evidence on record.
That, the lands under acquisition admittedly in proximate with the Motipura area which is the part of the City: Himmatnagar and in the surrounding area. The area under acquisition having potentiality to develop commercial premises and it was fully developed area at the time of notification as there was a Cinema, schools, Law Colleges, shops and offices, despite of this, the Reference Court failed to appreciate that, the lands under acquisition had potential value on the date of notification.
In such circumstances, the counsels appearing for the land owners submitted that, where direct evidence in the form of sale instances of exemplars pertaining to the land, was available and such evidence constitutes the most desirable preferred basis for determination of market value, the Reference Court mechanically without any justification, discarded the best available evidence and arbitrarily reduced the 50% of the best exemplar for determination of the market value and therefore, it was prayed that, by allowing these appeals, the market rate assessed by the Reference Court require to be modified and additional amount of compensation @ Rs.1,000/- per square meter be assessed and fixed along with the other statutory benefits.
Opposing the appeals, the learned State counsel Ms. Surbhi Bhati supported the impugned judgment and award. She submitted that the compensation awarded by the Reference Court is fair and just compensation and it needs no further indulgence by this Court. The compensation awarded is duly supported by material on record. The Reference Court has rightly reduced the 50% amount from the sale instances Exh. 66 and 67, as the land acquired and the land referred in the sale instance cannot be said to be land adjacent to the land acquired. The land referred in sale instance was situated in the developed area of Himmatnagar, whereas, the land under acquisition is far away from the sale instance and as such the area of the land under acquired, is not possessed similar advantages. In addition to that, learned State counsel submitted that the Reference Court after examining the location, nature, utility and other distinguishing character of the acquired parcel of lands, has rightly reduced 50% amount from the market rate of the sale exemplar. The possession of land under acquired was transferred to the Western Railway way-back in the year 1960 and at that relevant time, as such, there was no development in the vicinity of the area. However, to avoid the technicality, the State Government commenced re-acquisition proceedings in the year 1994-95. Thus, having regard to the peculiar facts of the present case, the Reference Court has not committed any error while fixing the market rate. On the contrary, the determination was on higher side. Thus, it was submitted that the findings arrived at by the Reference Court on the subject of market rate of the land under acquisition are based on the evidence on record and while assessing the market rate, the Reference court has followed the settled principle of law and as such, has not committed any error either on facts or law. Thus, it was prayed that, the appeals of the claimants may not be entertained.
On behalf of the Western Railway – original respondent no. 2 – Ms. Krishna G. Raval has submitted that the land under acquire was transferred to the Western Railway in the year 1960 and at relevant time there was no any development with regard to road, commercial building, etc. Thus, therefore, considering the year of possession, the market rate awarded by the SLAO at rate of Rs.45/-is the reasonable and just amount and reflect the market rate if the willing purchaser would purchase from seller in open market. In such circumstances, it was prayed that, by allowing the appeals filed by the respondent Railway the amount assessed and fixed by the Reference Court is on higher side and same may be reduced, altered and/or modified to the amount assessed by the SLAO.
On the aspect of enhancement of additional amount of compensation claimed by the land owners is concerned, the counsel Ms. Raval had adopted the contentions advanced by learned State counsel herein.
We have heard at length the learned counsel for the respective parties. Perused the impugned judgment and records and proceedings of the Reference Court and upon re-appreciation of the evidence, the issue falls for our consideration, as to whether market rate determined by the Reference Court is fair and adequate?
Before adverting to the rival contentions, it may be germane to refer the principles which are required to be kept in mind while determining the market value of the acquired land as held by the Supreme Court in Chimanlal Hargovinddas Vs. Special Land Acquisition Officer, 1998 (3) SCC 751, wherein, it has been held thus:
“4.The following factors must be etched on the mental screen:
(1)A reference under Section 18 of the Land Acquisition Act is not an appeal against the award and the court cannot take into account the material relied upon by the Land Acquisition Officer in his award unless the same material is produced and proved before the court.
(2)So also the award of the Land Acquisition Officer is not to be treated as a judgment of the trial court open or exposed to challenge before the court hearing the reference. It is merely an offer made by the Land Acquisition Officer and the material utilised by him for making his valuation cannot be utilised by the court unless produced and proved before it. It is not the function of the court to sit in appeal against the award, approve or disapprove its reasoning, or correct its error or affirm, modify or reverse the conclusion reached by the Land Acquisition Officer, as if it were an appellate court.
(3)The court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it.
(4)The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in the court. Of course the materials placed and proved by the other side can also be taken into account for this purpose.
(5)The market value of land under acquisition has to be determined as on the crucial date of publication of the notification under Section 4 of the Land Acquisition Act (dates of notifications under Sections 6 and 9 are irrelevant).
(6)The determination has to be made standing on the date line of valuation (date of publication of notification under Section 4) as if the valuer is a hypothetical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price.
(7)In doing so by the instances method, the court has to correlate the market value reflected in the most comparable instance which provides the index of market value.
(8)Only genuine instances have to be taken into account.
(Sometimes instances are rigged up in anticipation of acquisition of land.)
(9)Even post-notification instances can be taken into account (1) if they are very proximate, (2) genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects.
(10)The most comparable instances out of the genuine instances have to be identified on the following considerations: (i) proximity from time angle, (ii) proximity from situation angle.
(11)Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-a-vis land under acquisition by placing the two in juxtaposition.
(12)A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in terms of price variation as a prudent purchaser would do.
(13)The market value of the land under acquisition has thereafter to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors. The exercise indicated in clauses (11) to (13) has to be undertaken in a common sense manner as a prudent man of the world of business would do. We may illustrate some such illustrative (not exhaustive) factors:
| Plus factors | Minus factors |
|---|---|
| 1. smallness of size | 1. largeness of area |
| 2. proximity to a road | 2. situation in the interior at a distance from the road |
| 3. frontage on a road | 3. narrow strip of land with very small frontage compared to depth |
| 4. nearness to developed area | 4. lower level requiring the depressed portion to be filled up |
| 5. regular shape | 5. remoteness from developed locality |
6. level vis-a-vis land under acquisition | 6. Some special disadvantageous factor which would deter a purchaser |
| 7. special value for an owner of an adjoining property to whom it may have some very special advantage |
In the case on hand, the Reference Court, relying upon the exemplars Exh. 66 & 67, determined the market value of the acquired lands. The Reference court has also considered the oral evidence of witness Sarlaben Shah, Exh. 65. The witness Sarlaben Shah was doing business in partnership in the name and style ‘Care Well Traders’ on the land, which was adjacent to the land under acquired. The land survey No. 437/112 paiki 221-58-75 sq.mt along with 76-73-75 sq.mt land, totaling Rs.298.32 sq.mt land was allotted to witness Sarlaben by State Government. The price of the land was fixed by Office of the Town Planning, Himmatnagar and it was fixed at the rate of Rs.1090/- per sq.mt. The order to this regard is produced at Exh. 66 and the order of allotment dated 07.01.1998 along with the order of Collector, Himmatnagar produced at Exh. 66 and 67. The Reference Court has taken into consideration the land allotted to witness Sarlaben Shah as a best indicator to determine the land under acquisition. We are also in complete agreement with the findings of the Reference Court with respect to comparable instance relied upon by the Reference Court. We are conscious about the size of the plots allotted to Sarlaben Shah as against the largeness of the area of the land under acquisition. However, fact remains that, the State Government by considering the report of the Town Planning Committee, accepted the market rate and then, allotted the land to witness Sarlaben. Thus, the transaction of Sarlaben is not between private parties and therefore, the sale example of Sarlaben can form basis for determination of the compensation of a large extent of land. We have also considered the other sale exemplars allotted to the Employees Union Association but having regard to the distance and other factors of the exemplar instance, it cannot be accepted as best indicator to determine the market value of the land under acquisition.
Now the issue is whether the Reference Court was justified in deducting 50% from the market value fixed by the Government with respect to the land allotted to witness Sarlaben, for determination of the land under acquisition?
We have carefully examined the oral as well as documentary evidence, as discussed above. The witness Sarlaben Exh. 65, admitted in her evidence that the land allotted to her and the land under acquisition are at the distance of 1000 sq.mt. Admittedly, the land allotted to Sarlaben is in the market area of city Himmatnagar, where the bus stand and other business entity including the commercial shops and offices are situated in the area, where the plot is situated. So far as land under acquisition is concerned, it is also located in the developed area of the city Himmatnagar, more particularly the area known as ‘Motipura’ and therefore, the land under acquisition can be said to be adjacent to the sale exemplar Exh. 66 and 67 and having possessed similar advantage compare to the comparable instance. The Reference Court in its judgment, at page-34, while determining the market value observed that,
“there is a vast difference with regard to location of both the lands i.e. land under acquired and sale exemplar and therefore, considering the market value of sale exemplar at Rs.725/-, it is reasonable and just to determine the additional market value of the land in question at the rate of Rs.305/- sq.mt.”
In our opinion, the Reference Court has not considered the price of the sale exemplar in its proper prospective. The price fixed for the sale exemplar by the Planning Committee was Rs.725/- per sq. mt + 50% rise per sq.mt, which would come to Rs.1090/- per sq.mt. (Exh. 66). The Reference Court failed to appreciate the fact that both the lands having been situated in the developed area of city Himmatnagar and as such, there is no vast difference with regard to location and distance of both the lands. Thus, the deduction of 50% is being made by the Reference Court without any justifiable reasons. This case is unique case, because in the year 1960, the possession was transferred without initiating any acquisition proceedings to Western Railway by the State Government. In the year 1995, the process of re-acquisition of the land being undertaken by the State Government. In such circumstances, having regard to the date of notification and the market rate of the sale exemplar Exh. 66 and 67, the appropriate market rate of the land under acquisition can be considered at the rate of Rs.680/- per sq.mt, instead of Rs.305/- per sq,.mt. determined by the Reference Court, over and above the amount awarded by the SLAO. Thus, the additional amount at the rate of Rs.680/- per sq.mt having regard to the area, proximity to the area of the vicinity like road and other admitted development of Motipura area, Himmatnagar is the just and reasonable market value of the land under acquisition.
For the reasons aforementioned, the Appeals filed by the land owners allowed in part. The appeals filed by the Western Railway having no any merits and accordingly stand dismissed. The market rate assessed and fixed by the Reference Court at Rs.305/- per sq.mt is altered and/or modified to Rs.680/- per sq.mt. over and above the amount awarded by the SPLO at the rate of Rs.45/- per sq.mt. along with the interest as well as statutory benefits. The appeals of the land owners to that extent shall stand allowed. The rest of the common judgment and award of the Reference Court shall remain unaffected. The amount deposited by the State is permitted to be withdrawn by the landowners with accrued interest thereon, if not already withdrawn. The Reference Court shall release the amount of the enhanced compensation alongwith statutory benefit, as and when deposited by the respondents. R&P be transmitted to the concerned court forthwith. However, there shall be no order as to costs. Registry is directed to keep copy of this judgment in each matter.