JUDGMENT
V.K. Bali, J.
1. By this common order, I propose to dispose of four connected Regular First Appeals bearing No. 2474, 2454, 2558 of 1987 and 1740 of 1988 as the same emanate from the same notification and, thus involve common questions of law and facts. The bare minimum facts that, however, need a necessary mention, have been extracted from R.F.A. No. 2454 of 1987 as it is in this case, learned Counsel for the parties state, evidence was recorded.
2. Government of Haryana issued notification under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as ‘the Act of 1894’) on 27.3.1981 intending to acquire three Bighas one Biswa, equivalent to 9228 sq. yards, of land for a public purpose, namely, for construction of the Income Tax Office, Rohtak by the Income Tax Department, The follow up declaration under Section 6 of the Act of 1894 came into being on 27.2.181. Land Acquisition Collector, vide his award dated 27.2.1984 assessed market value of the acquired land @ Rs. 200/- per sq. yard for an area upto 2772-1/2 sq. yards, whereas, rest of the area was evaluated @ Rs. 100/- per sq. yard. Dissatisfied with the wholly inadequate compensation assessed by the learned Collector, landowners sought reference under Section 18 of the Act of 1894 and learned Additional District Judge, Rohtak, vide his award dated 14.8.1987 enhanced the compensation with regard to 2722-1/2 sq. yard to Rs. 300/- per sq. yard, whereas rest of the land was evaluated @ Rs. 200/- per sq. yard.
3. The landowners are still dissatisfied, as they had made a claim for granting compensation @ Rs. 1000/- per sq. yard. They have, thus, filed the present appeal for further enhancement of the compensation.
4. Income Tax Department has filed cross-objections in all the cases seeking restoration of the award passed by the learned Collector, dated 27.2.1984.
5. The sole but significant question, as in all such matters, so also in these, is as to what should be the fair and proper market value of the land, subject-matter of acquisition at the time when notification under Section 4 of the Act of 1894 came to be issued.
6. There may be other evidence that might have been led by the claimants, but, what has been seriously contended before this Court is that the sale instance, Ex. PI dated 16.4.1980 pertaining to an area measuring 20-1/2 sq, yards, which was sold for a sale consideration of Rs. 20,000/- (Rs. 989 per sq. yard) and which was the most relevant piece of evidence, has since been wrongly ignored by learned reference Court.
7. The contention raised on behalf of the claimants appears to have some substance. Before, however, I may delve upon the issue and determine the same, it would be relevant to mention the location and potential of the land, subject-matter of acquisition. The acquired land is located near the State Bank of India, as would be made out from the statement made by PW1 Sri Pal, who further stated that there were 2-3 shops in between his shop and the acquired land and in one of the shops, Indian Bank had been constructed. It was thickly populated area at the time of acquisition and site was surrounded by residential, shops and other commercial buildings. It is further made out from the cross-examination of this very witness that behind his shop, there was a residential house of Shri M.P. Aggarwal, Advocate and there were residential houses behind that residential house of the Advocate as well. It is further, proved that in between the District Courts and the land, subject-matter of acquisition, there is only one khasra number. Opposite to the shop of Sri Pal and cross the road, there were offices of the Superintending Engineer, Treasury, Registrar, Co-operative Societies and so much so that Income Tax Office was itself located in part of the acquired land. Besides oral evidence that was led, site plan, Ex.P-2 which has since been proved and authenticity whereof has not been disputed, would further show that the entire acquired land is situated in the heart of Rohtak town and so is the finding also recorded by learned reference Court. Upto the entire depth of Khasra No. 8335, which is subject-matter of acquisition, on the left and right hand side, in Khasra Nos. 8337, 8338, 8147, 8149 and 8335, there is complete construction either by way of civil Courts or residential houses. In so far as Khasra No. 8336 is concerned, construction is in between the said Khasra number, whereas front and rear were lying vacant. The land, subject-matter of acquisition, had high potential for commercial and residential activities is, thus, proved to the hilt in the present case.
8. The land, subject-matter of acquisition, it appears, is comprised in Khasra No. 8336. whereas land, subject-matter of sale instance, Ex.P-1, is located in Khasra No. 8337. Immediately, below Khasra No. 8337 is Khasra No. 8336. Khasra No. 8336 is, thus adjoining to Khasra No. 8337. There does not appear to be any difference insofar as potential of two khasra numbers, on pertaining to the land, subject-matter of acquisition and the other from where sale Ex.P-1 was made but for that whereas, the land, subject-matter of sale instance, Ex.P-1 is located on an inter-section of two roads, the one, subject-matter of acquisition is one road, but that is the main road, which is Delhi-Rohtak-Hissar road.
9. In the context of the findings, as mentioned above, with regard to potentiality of the land in question and location of land covered under sale instance, Ex.P-1 and the acquired land, the second question that arises for determination is as to whether sale in- stance, Ex.P-1 could be totally ignored as has been done by the learned Additional District Judge. Learned Trial Court exclude from the array of consideration the sale instance, Ex.P-1 on the ground that the same was a corner plot, best suited for running a restaurant and that there were roads on the two sides of that plot and District Courts, office of the Superintending Engineer, Registrar, Co-operative Societies, Treasury Office and the State Bank of India were situated near that plot. It was a best suited locality for a restaurant and any amount could be thrown for the purchase of such site. It was further observed that it was purchased by Sri Ram and his son and earlier his son was working in Nepal, who wanted to shift to Rohtak. He had set up “Pashupati” restaurant on the site and the name of the hotel suggested that in Nepal, he was running some hotel or restaurant in the aforesaid name. So, he had better means and immense desire for purchasing a suitable site. It is for these reasons that the Court observed that “so the evidence cannot be taken into consideration for fixing the market value of the land in dispute. The land in dispute is a big chunk of land with a small frontage on the road and depth of about 1000 feet. The building situated in the land was a in possession of Income Tax Department since more than 30 years and upto the year 1969 and disputed building was fetching rent from the Department at the rate of Rs. 75/- per month. However, on renovation, the rent was increased to Rs. 800/- per month. The land in dispute, thus cannot be taken as a commercial site.”
10. I have heard learned Counsel for the parties at great length and, with their assistance, examined the records of the case. The reasons given by learned trial Court in totally ignoring the sale instance, Ex.P-1 do not appear to be correct at all. As mentioned above, the acquired land is situated in the heart of the town. Pashupati Restaurant, which has been made in the land covered under the sale instance, Ex.P-1 is in Khasra No. 8337 i.e. adjoining to Khasra No. 8336, subject-matter of acquisition. If the land, subject-matter of sale instance, Ex.P-1 had potential for being converted into a commercial use, same has to be held with regard to the land, subject-matter of acquisition at least upto the depth that has been evaluated at a different and better rate by both the Land Acquisition Collector and learned trial Court. There are no distinguishing features between the land to the extent, mentioned above and the one represented by the sale instance, Ex.P-1 but for that perhaps, the land, subject-matter of sale instance, Ex.P-1 is on inter-section of two roads, whereas the land, subject-matter of acquisition is on one road, but that is the main road, as is the conceded position, which is Delhi-Rohtak-Hissar road. As mentioned above, Khasra numbers adjoining to the Khasra number of the land, subject-matter of acquisition upto the depth of the entire land of Khasra No. 8336 are fully developed by construction of Civil Courts or other commercial or residential buildings. In any circumstances, thus, sale instance, Ex.P-1 could not possibly be totally ignored for determining the market value of the land, subject-matter of acquisition, particularly, when the said sale instance came about a year before the land was notified for acquisition under Section 4 of the Act of 1894.
11. Having determined that sale instance, Ex.P-1 dated 16.4.1980 to be relevant piece of evidence of determining the market value of the land, the question that arises is as to whether, because of the fact that the said sale instance was for a small area measuring 20-1/2 sq. yards and that some part of area within the acquired land was with the Income Tax Department as tenant, some cut should be imposed. It may be recalled that the area, under acquisition, is also not a very vast tract of land, which was only 9228 sq. yards and the entire area had potential for residential or commercial purposes. The fact, however, remains that the land, subject-matter of sale instance Ex.P-1 was situated at an inter-section of two roads and that some part of the acquired area was under tenancy. In these circumstances, this Court is of the considered view that a cut of 43% would result into working out the fair and proper compensation of the land, subject-matter of acquisition. From this 43% cut, 10% has further to be reduced for the reason that notification under Section 4 in the instant case came into being about a year after the sale instant, Ex.P-1. That ultimately would result in making a cut of 33%. If the market value of the acquired land is calculated on the basis, as mentioned above, it will work out to Rs. 660/- per sq. yard. Whereas, the frontage of the acquired land to the extent of 2722-1/2 sq. yards, in considered view of this Court, would have potential for commercial use, rear to that would have potential for residential purposes and, therefore, while working out the market value of the rear portion, further cut of 25% appears to be justified. Worked on that basis, the rear portion, i.e. the portion beyond 2722-1/2 sq. yards would be assessed @ Rs. 495/- per sq. yard.
12. This Court has pondered over the percentage of cut required to be made and, in the facts and circumstances of the present case, it appears to this Court that the cut, as suggested above, would result in determining just and fair compensation. There is no strait jacket formula in applying percentage of cut and it is too well settled that the same depends upon the facts and circumstances of each case.
13. Mr. Bindal, learned Counsel for the Income Tax Department, on the basis of two judgments, one of the Full Bench of Bombay High Court in State of Maharashtra v. Shrimant Govindrao Narayanrao Ghorpade, of Hon’ble Supreme Court in M.B. Gopala Krishna v. Special Deputy Collector, Land Acquisition 1996(2) R.R.R. 36, however, contends that the land, subject-matter of acquisition, was under tenancy and it is an established position that the rented buildings do not fetch proper market price as no willing buyer would purchase the same because of difficulty in evicting the tenant in view of the stringent laws dealing with the eviction of a tenant.
14. Full Bench decision of Bombay High Court in Shrimant Govindrao Narayanrao Ghorpade ‘s case (supra), in considered view of this Court, would not be applicable to the facts of the present case, the land, subject-matter of acquisition in the said case, was originally a jagir land. The said jagir alongwith other miscellaneous inams and watans was abolished under the Bombay Merged Territories Miscellaneous Alienations Abolition Act, 1955. The Scheme of the Act was to abolish all alienations or watans. Section 7 of the Act provided that the land under a watan stood resumed and that it shall be granted to the holder of the watan in accordance with the provisions of the said Section Watan of the type, with which the Court was concerned, as per provisions of Section 7(2), was to be granted on payment of certain occupancy price within the prescribed period. That occupancy price was in multiples of the assessment of the land. By virtue of Section 3 of the said Act, occupancy of the land re-granted under Sub-section (2) could not be transferred nor the same was partible by metes and bounds without the previous sanction of the Collector and except on the payment of such amount as the State Government may, by general or special order, determine. On the basis of Sub-section (3) of Section 7, as mentioned above, it was urged on behalf of the State Counsel that compensation should have been fixed at a reduced amount as there was a clog on transfer of the land. The Full Bench of Bombay High Court, relying upon a judgment of the Hon’ble Supreme Court in Special L.A. and R. Officer v. M.S. Seshagiri Rao, , held that in assessing the compensation, the existence of a condition which severely restricted the rights of the owner cannot be ignored and that the compensation which would be payable would be only the market value of the interest of the owner, subject to the clog. The land or building, subject-matter of tenancy, would have no clog on its sale, even though it maybe true that it would not fetch the same price as the property, which may be capable of being taken possession straightaway.
15. Insofar as judgment of Hon’ble Supreme Court in M.B. Gopala Krishna’s case (supra) is concerned, it has indeed been observed therein that a free-hold land and the one burdened with encumbrances do make a big difference in attracting willing buyers and that a freehold land normally commands higher compensation while the land burdened with encumbrances secures lesser price and that the fact of tenant in occupation would be an encumbrance and no willing purchaser would willingly offer the same price as would be offered for a freehold land. 16. In considered view of this Court, the judgment of Hon’ble Supreme Court would indeed be relevant but, for that, the nature of tenancy has first to be determined. It is an admitted position that the Income Tax Department did not contest the claim of the landowners on the basis that part of the property, which was on rent with it, would fetch far less price. No pleadings to that effect were made in response to the petition filed by the landowners under Section 18 of the Act of 1894. No issue was claimed nor the Court framed such an issue. The claimants were not put to a notice that the claim made by them would be contested on the ground that the rented building with the Income Tax Department would not fetch the market value similar or equivalent to the one which may be vacant. What this Court has observed is for the reason that if perhaps such a plea was raised, the owner of the area, in which Income Tax Department was a tenant, might have brought evidence on record to show the nature of tenancy. It is possible that tenancy was for a fixed period like year to year, extendable at the option of the landowner. It could well be a tenancy in perpetuity or for a long period in which case, of course, it would have been difficult for the landowner to secure vacant possession. It is too well settled that reduction in price in determining the market value, if the same is subject-matter of tenancy, would depend upon inter se agreement between the parties, particularly the one that may deal with the nature of tenancy. That apart, it is conceded position that even the Land Acquisition Collector assessed market value of the acquired land based upon sale instances and the fact that a part of land/building was on tenancy with the Income Tax Department and, therefore, its market value should be less, was not even considered. Inasmuch as the matter with regard to assessment of compensation was not contested on the basis of part of land/building being on tenancy, as mentioned above, there was no issue with regard to the same. Even the reference Court did not determine its market value on the said basis, even though one of the reasons for which sale instance. Ex.P-1 was not held relevant, was that some part of the area under acquisition was under tenancy. The other aspect of the case dealing with the issue of tenancy is that it is only part of the land/building which was on tenancy with the Income Tax Department. Even if, therefore, the contention of Mr. Bindal is to be accepted, it is only the part of the land/building which was under tenancy that would be assessed at a lesser rate, whereas, rest of the land shall have to be evaluated at a different rate which may not be in consonance with the provisions of Section 28-A of the Act of 1894, even if they may not have even prayed for reference under Section 18 of the Act of 1894. Section 28-A makes no distinction of the land which may be under tenancy. If, therefore, the owner of the land/building, which was under tenancy of the Income Tax Department, was not to make a reference under Section 18 and was to depend upon the decision rendered by the court with regard to other landowners and would have made an application under Section 28-A, the Collector, on such application made by the person, who owned the land/building, subject-matter of tenancy, could have not denied the same compensation to him. “Even otherwise, it would be too iniquitous to grant more compensation to the landowners, whose land was not subject-matter of tenancy and give less to the one, whose land was under tenancy with the Income Tax Department.” The Court in any case has taken into consideration the fact that pat of the land/building was under tenancy of the Income Tax Department while applying the cut.
17. Before I may part with this order, I would like to mention that Mr. Kapoor, learned Counsel for the appellants has relied upon a judgment of the Hon’ble Supreme Court in Land Acquisition Officer Revenue Divisional Officer, Chiitor v. Kamlamma (Smt.) and Ors. , to convass that on the market value assessed by this Court, there should not be any cut. The facts of the said case, however, would show that Puttur was an urban area and the lands were abutting the main road leading from Tirupathi to Arkonam via Puttur and the acquired land was in the heart of Puttur town. To the both of the land in question there was a famous Venkateshwaraswamy temple and to the immediate south, the famous Tiruthani, one of the abodes of Lord Subrahamanyaswamy. It is while taking into consideration the topography of the land, the Court proceeded to hold that the situation of the land had the potentiality of being developed as urban land. The distinguishing feature in the present case is that the entire land is not located abutting the main road as was the situation in L. Kamlamma’s case (supra). The whole road leading from Tirupathi to Arkonam via Puttur had already been developed. In considered view of this Court, some cut from the market price worked out, as mentioned above, is required to be made in this case.
18. In view of the discussion made above, I allow these appeals and dismiss the cross-objections filed by the Income Tax Department. I determine the market value of the acquired land upto 2722-1/2 sq. yards @ Rs. 660/- per sq. yard and rest of the land @ Rs. 495/- per sq. yard. The claimants shall also be entitled to the benefits under Section 23(1)(A) of the Act of 1894 as concededly, award in the present case came into being on 27.2.1984 and, thus, the claimants shall be entitled to the said relief in view of law laid down in Kashiben Bhjikabai and Ors. v. Special Lands Acquisition Officer, A.I.R. 2002 S.C. 1105. As mentioned above, this part of the relief that the claimants are entitled to, is not even disputed by learned Counsel for the respondents. The appellants shall be entitled to proportionate costs, i.e., to the extent they have paid the Court fee.