High Court Kerala High Court

Muvattupuzha Municipality vs Varkey on 11 December, 2009

Kerala High Court
Muvattupuzha Municipality vs Varkey on 11 December, 2009
       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

LA.App..No. 682 of 2004()


1. MUVATTUPUZHA MUNICIPALITY,
                      ...  Petitioner

                        Vs



1. VARKEY, S/O. KURUVILLA BABU,
                       ...       Respondent

2. MOLLY, W/O. VARKEY,

3. STATE OF KERALA.

                For Petitioner  :SRI.V.M.KURIAN

                For Respondent  :SRI.T.P.KELU NAMBIAR (SR.)

The Hon'ble MR. Justice PIUS C.KURIAKOSE
The Hon'ble MR. Justice K.SURENDRA MOHAN

 Dated :11/12/2009

 O R D E R
           PIUS C.KURIAKOSE & K.SURENDRA MOHAN, JJ.
        ------------------------------------------------------------------------------------
         L.A.A. NOS: 682/04 & CO11/05, 175/04 & CO9/05,750/04,
         718/04 &CO 33/05, 763/04, 630/04& CO 38/05, 628/04,
             678/05 & CO 118/05, 735/04, 955/04,141/05 and
                                    629/04 & CO 42/05

         -----------------------------------------------------------------------------------
                    Dated this the 11th December, 2009.

                                         JUDGMENT

SURENDRA MOHAN,

An extent of 50.91 Ares (125.74 cents) of land in

Velloorkunnam Village of Muvattupuzha Taluk comprised in

different survey numbers was acquired by the State, on the

requisitioning of the Muvattupuzha Municipality, for the expansion

of the Municipal Stadium and formation of a ring road around the

stadium. The Section 4(1) notification is dated 6.12.1996. The

Land Acquisition Officer verified various documents relating to

similar lands executed during the relevant period and fixed the land

value of the properties. For the purpose, he categorized the lands

into two categories, those having road access as the first category

and those without road access as the second category. Relying on

sale deed No: 4059/1994 of Muvattupuzha Sub Registry the Land

Acquisition Officer awarded land value at the rate of Rs.17,000/-

per Are (Rs.6,880 per cent) to the lands in category I and

Rs.15,400/- per Are (6,232 per cent) to the lands in category II,

LAA 682/04 etc. 2

those without road access. Dissatisfied with the land value

awarded by the Land Acquisition Officer the claimants sought a

reference to the Court and thus the matter was referred to the Sub

Court, Muvattupuzha, for considering the claim for enhanced

compensation made by the claimants.

2. Before the Reference Court the claimants adduced

evidence in support of their claims. The evidence in the case

consists of the oral evidence of A.Ws 1 to 5 and Exts. A1 to A9

documents on the side of the claimants. On the side of the

respondents, Exts. R1 to R17 documents were marked and R.W.1

was examined as a witness. Exts. C1 commission report and C1(a)

plan have been marked as Court Exhibits.

3. After an evaluation of the evidence on record, the Sub

Court, Muvattupuzha as per a common judgment dated

31.10.2003 enhanced and fixed the land value of the acquired

properties at a uniform rate of Rs.60,000/- per Are (Rs.24,282 per

cent). The Court thus did away with the categorization adopted by

the Land Acquisition Officer. The Reference Court took note of the

fact that the acquired properties were all lying in close proximity to

LAA 682/04 etc. 3

the properties covered by Exts. A1 to A4, A7 & A8 sale deeds.

Though the records described the properties as wet lands, the

Reference Court, on the basis of the report of the Advocate

Commissioner found that the lands were dry lands with the only

disadvantage that they were lying at levels substantially lower than

the road. The lands were also found to be barren. However, the

properties were found to enjoy locational advantages by virtue of

their proximity to all the important establishments in the

Muvattupuzha Municipality. The Muvattupuzha Municipality which

is the Requisitioning Authority has preferred appeals against the

common judgment of the Reference Court contending that the

award was excessive. The Government has also preferred separate

appeals against the said judgment. The claimants have preferred

cross objections contending that the enhanced land value granted

by the reference Court also did not reflect the real market value of

the acquired properties. They have claimed land value at the rate

of Rs.2,00,000/- per cent. All the appeals and cross objections are

considered together for the reason that the questions that arise for

determination are all same.

LAA 682/04 etc. 4

4. As per order dated 31.3.2009 in I.A.1219 of 2009 in

L.A.A.NO: 682 of 2004 an Advocate Commissioner was appointed

from this Court to make a local inspection of the properties

acquired in these appeals and to make a comparison of the said

properties with the properties acquired as per Exts. A7 and A8

proceedings. Accordingly an Advocate Commissioner conducted a

local inspection on 6.4.2009 and has submitted a report, supported

by rough sketch of the properties that were compared. The said

Commission report and the plan are received in evidence and are

marked as Exts. C2 and C2(a) respectively. Exts. C2 and C2(a) also

endorse the locational importance of the acquired properties.

Nevertheless, it is reported that the acquired properties are lying at

substantially lower levels than the main road. The properties

acquired as per Exts. A7 and A8 are also reported to be not similar

to the acquired properties. Exts. A7 and A8 properties are found

by the Commissioner to be enjoying better advantages than the

acquired properties.

5. The learned Senior Govt. Pleader as well as the counsel for

the Municipality attacked the findings of the Reference Court

LAA 682/04 etc. 5

contending that the Reference Court seriously erred in discarding

the categorization adopted by the Land Acquisition Officer. It is

pointed out that the lands acquired are all `Nilam’ or paddy fields

according to the records. They are all properties which remain

submerged during rainy season. According to the counsel they are

lying barren only for the reason that paddy cultivation has been

discontinued by the owners during the recent past. It is contended

that the properties being 10 to 12 ft. below the road level did not

possess any road access at all though they were by the side of the

road. Exts.A1 and A2 sale deeds are attacked by the counsel

pointing out that they were both post notification documents. The

properties covered by Exts. A3 & A4 sale deeds according to the

counsel were not comparable to the acquired property, since they

were both garden lands facing the National Highway. According to

the counsel the sale deed that was the subject matter of Ext.A6

order of this Court in C.M.A.5/2000 was not produced before the

reference Court. Nor was the agreement for sale produced.

Therefore, the counsel contended that the Reference Court went

wrong in placing reliance on the said document. With respect to

LAA 682/04 etc. 6

Exts. A7 and A8 properties, the contention is that they related to

small bits of land that were acquired by the Municipality for

constructing the TVS-Keecheripady road . The said lands were

located 500 mtrs. away from the acquired property and were not

comparable properties for the reason that the said properties were

facing the M.C.Road and located 500 mtrs. away. The counsel,

therefore, contended that there was no reliable evidence available

in the case for granting enhanced land value for the acquired

properties. Since the burden of proving that they were entitled to

enhanced land value was entirely on the claimants, they were not

entitled to any enhancement for the reason that they had not

discharged the said burden by adducing any acceptable evidence.

6. The counsel for the claimants on the other hand

contended that the land value awarded by the Reference Court was

too low. The Reference Court failed to take into account the clear

and unambiguous data that were available from the evidence

produced in the case to show that the land value was at least

Rs.60,000/- per cent. According to the counsel, Exts.A1 and A2

sale deeds were documents by which the Muvattupuzha

LAA 682/04 etc. 7

Municipality itself had purchased properties for a consideration of

Rs.50,000/- per cent. The properties according to the claimants are

only 300 mtrs. away from the acquired property. Both the

properties are located in the same village. The properties covered

by Exts. A3 and A4 sale deeds relate to a property adjoining the

acquired land. In the said documents also the consideration shown

is Rs.50,000/- per cent. Exts. A7 and A8 are proceedings of the

Land Acquisition Officer in LAC No: 17/1998 and connected cases.

The properties involved in the said cases are 425 Mtrs. away from

the acquired property. They were acquired for the formation of a

new road. The land value awarded by the Land Acquisition Officer

for the acquired land was Rs.1,00,576/- per Are which corresponds

to Rs.40,072/- per cent. It is pointed out that the Section 4(1)

notification for the said acquisition is also dated 6.12.1996, as in

the present case. It is further pointed out that as per Ext.A9 sale

deed dated 5.11.1993 the father of the claimant in LAR 33/1999

had purchased an item of property at the rate of Rs.20,000/- per

cent. According to the counsel, the said property is in the very

same survey number as the acquired property. Since Ext.A9

LAA 682/04 etc. 8

property was part of the acquired property there is no justification

for discarding the said document. Therefore, it is contended that

the land value may be fixed for the acquired properties by adding

escalation at the rate of 15% per annum from the date of Ext.A9

sale deed till the date of the Section 4(1) notification in the present

case. The decisions reported in State of Kerala v. Jose Simon

{2009(1) KLT 760} and Atma Singh v. State of Haryana {(2008) 2

SCC 568} are also pressed into service.

7. We have heard Mr. V.M.Kurian, Advocate for the appellant-

Municipality, Mr. Basant Balaji, the Senior Govt. Pleader and Mr.

Gopikrishnan Nambiar, counsel for the claimants-cross objectors.

We have gone through the records of the case and the evidence on

record. We have also given anxious consideration to the

contentions advanced by the parties.

8. At the instance of the claimants an Advocate

Commissioner had been deputed by the Reference Court to inspect

the acquired properties. Accordingly he had inspected the

properties and his report and plan are marked as Exts.C1 & C1(a)

by the Court. The Advocate Commissioner has reported that the

LAA 682/04 etc. 9

properties under acquistion are all located in the heart of

Muvattupuzha Municipal town. The proximity of the lands to the

important commercial, Government and non-governmental

establishments indicate that the properties are all situate in a

commercially important locality. Ext.C1 commission report has

referred in detail to the various commercial and other important

establishments near the acquired properties. The Velloorkunnam

Village Office, Temple, Town U.P. School, Market, European

Economic Market, Courts, Office of the Revenue Divisional Officer,

Banks, Homoeo Hospital etc. are all located close to the acquired

lands. The above aspects are endorsed by Ext. C2 report also.

Therefore, the Commercial importance of the acquired lands is

beyond dispute. Considering the locational importance of the

lands, it is clear that the lands were valuable assets, capable of

commercial exploitation by the owners thereof. However, the

commission reports also show that the acquired properties are all

lying at about 10-12 ft. lower than the road level. Therefore, the

counsel for the Municipality has pointed out that commercial

exploitation of the acquired lands would be possible only after

LAA 682/04 etc. 10

properly developing them into commercially attractive lands. Any

such development would involve considerable expenditure, it is

pointed out. According to the counsel, in its present state, the

land was not capable of commanding the same commercial value

that other developed lands were capable of commanding. It is also

pointed out that the sale deeds relied on by the claimants all relate

to fully developed lands which cannot be compared with the

acquired properties. It is true that the acquired lands are lying at

levels substantially lower from the road level. Therefore, the lands

certainly would not fetch the same market value that other level

lands would be capable of fetching. However, it is clear from the

evidence on record that the acquired lands are situate in a

commercially important locality in Muvattupuzha town. Therefore,

the commercial importance of the acquired properties also cannot

be ignored for the sole reason that they are lying at a lower level

from the road.

9. The claimants rely on Exts.A1 and A2 sale deeds by which

two items of properties have been purchased by the Muvattupuzha

Municipality. As per Ext.A1 sale deed, 7.165 cents and 395 sq.links

LAA 682/04 etc. 11

of land have been purchased. As per Ext.A2 an extent of 2.61

cents of land has been purchased. The properties have been

purchased at the rate of Rs.50,000/- per cent. The lands are

situate in same village and is about 300 mtrs. away from the

acquired land. The sale deeds have been proved by examining

A.W.2 who was the then Secretary of the Municipality. The

Advocate Commissioner has made a comparison of the properties

covered by the above sale deeds with the acquired properties. It is

seen from the report of the Advocate Commissioner that the

properties covered by Exts.A1 and A2 are situate adjacent to the

N.H.49. The said lands were purchased for the formation of the

byepass road. The properties covered by Exts.A1 and A2 are small

extents that were acquired for opening the byepass road. They are

also fully developed garden lands which are by the side of the main

road. Therefore, the value given in Exts.A1 and A2 cannot be

accepted as such. Further, it is to be noticed that Exts.A1 and A2

are post notification documents, though only by a few months.

10. Exts.A3 and A4 documents are two other sale deeds

relating to nearby properties. The value shown in the said sale

LAA 682/04 etc. 12

deeds are Rs.44,444/- and Rs.43,478/- per cent respectively.

However, the said documents show that the properties covered by

the said deeds were garden lands with buildings therein. Ext. A6 is

an order of this Court in C.M.A. 5/2000 which related to an

agreement for sale of an item of immovable property in the same

locality. The value of the property in the agreement for sale

appears to be Rs.2,50,000/- per cent. However, the said agreement

has not been produced in Court. Exts. A7 & A8 relates to

proceedings for acquisition of small bits of property for the

construction of the TVS-Keecheripady road. The land value awarded

is Rs.40,702 per cent, it appears that the acquired land in the said

case was dry lands. The properties under acquisition in the said

case are only 500 mtrs. away from the acquired properties in these

cases. The Section 4(1) notification in the said case is also

6.12.1996. Another document that is pressed into service by the

claimants is Ext. A9 sale deed dated 5.11.1993 by which the father

of the claimant in LAR 33/99 has purchased an item of property at

the rate of Rs.20,000/- per cent. It is the contention of the

claimants that in spite of the unambiguous data available from the

LAA 682/04 etc. 13

above documents, the Reference Court seriously went wrong in not

accepting the same and awarding land value at least at the rate of

Rs.60,000/- per cent.

11. In considering the question as to what is the correct

market value of the acquired lands, it is to be borne in mind that,

what has to be ascertained is the price that would be offered by a

willing buyer to a willing seller. For the purpose of ascertaining

the same, various principles have been laid down by the Apex Court

as well as our Court in a number of cases. In Atma Singh’s case

(supra) at page 572 (paragraph 4), the Apex Court has summed up

the nature of the enquiry required in the following words:-

“The expression ‘market value’ has been the

subject-matter of consideration by this Court in several

cases. The market value is the price that a willing

purchaser would pay to a willing seller for the property

having due regard to its existing condition with all its

existing advantages and its potential possibilities when

led out in most advantageous manner excluding any

advantage due to carrying out of the scheme for which

the property is compulsorily acquired. In considering

market value disinclination of the vendor to part with

his land and the urgent necessity of the purchaser to

LAA 682/04 etc. 14

buy should be disregarded. The guiding star would be

the conduct of hypothetical willing vendor who would

offer the land and a purchaser in normal human

conduct would be willing to buy as a prudent man in

normal market conditions but not an anxious dealing at

arm’s length nor facade of sale nor fictitious sale

brought about in quick succession or otherwise to

inflate the market value. The determination of market

value is the prediction of an economic event viz., a price

outcome of hypothetical sale expressed in terms of

probabilities.”

It is further laid down in the said decision that for ascertaining the

market value of the land, the potentiality of the acquired land

should also be taken into consideration. By potentiality what is

meant is the capacity of transforming into or being developed into

a substantial asset or property of much higher value. Therefore,

apart from the actual advantages enjoyed by the property, it is also

necessary to bear in mind and to take into consideration the

capacity of the land to be converted into or being developed into a

much more valuable asset. Viewed in the above prospective it is

clear that though the properties are at present lying at levels much

lower than the road, their location in close proximity to the main

LAA 682/04 etc. 15

road gives them the potential of being developed into very valuable

assets. Therefore, the locational advantages enjoyed by the

properties are further enhanced by the potential for development

which the acquired properties had. Though the properties are

paddy fields, according to the Revenue records the Advocate

Commissioner has reported that the lands were dry lands lying

barren with no cultivation or improvements therein. The presence

of commercial establishments, Banks, Government institutions,

Schools and financial institutions clearly evidence the potential of

the land for development, which has to be considered as an input

while determining the market value of the acquired properties.

However, the above considerations do not appear to have weighed

much, with the Reference Court while fixing the land value of the

acquired properties.

12. The Land Acquisition Officer had categorised the lands

into two. Category I with road access was given a higher value of

Rs.17,000/- per Are while the lands in Category II without road

access was given a lesser value of Rs.15,400/- per Are. However,

the Reference Court has discarded the categorisation that was

LAA 682/04 etc. 16

adopted, without assigning any reason. It cannot be disputed that

lands with road access enjoy a definite advantage over similar lands

that do not have road access. Therefore, lands with road access are

certainly more valuable than similar lands without road access.

Hence the Reference Court went wrong in discarding the

categorisation and granting the same land value for lands with road

access and those without such advantage. For the above reasons,

we hold that the categorisation adopted by the Land Acquistion

Officer was correct and therefore, we treat the three cases in which

the lands had road access a little differently from those without

road access.

13. A perusal of the documents Exts. A1, A2, A3, A4, A6, A7

& A8 show higher value than what has been granted by the

Reference Court. However, the value shown in the said documents

cannot be accepted as such for the reason that they relate to pucca

garden lands. The properties covered by Exts. A1 and A2 relates

to small bits of land. The same is the case with that of Exts. A7 &

A8. But, the locational advantages enjoyed by the acquired

property cannot be lost sight of. At the same time it is to be borne

LAA 682/04 etc. 17

in mind that the acquired lands are lying at substantially lower

levels from the adjacent road. Nevertheless, the potential of the

properties for development must also be taken note of.

Considering all the above aspects, we feel that the correct market

value of the acquired lands can be fixed at Rs.68,000/- per Are for

the lands in Category I (with road access). The lands in category II

are certainly at a disadvantage for want of road access and,

therefore, we fix the disadvantage for such lands without road

access at 10% of the value of the lands with road access.

Accordingly, the market value of the lands in category II works out

to Rs.61,200/- per Are.

14. The result of the above discussion is that LAA Nos:

175/2004, 750/2004, 718/2004, 763/2004, 629/2009, 141/2005,

630/2004, 955/2004, 682/2004, 628/2004, 678/2004 and

735/2004 are dismissed. Cross objection Nos: 9/2005, 33/2005,

42/2005, 38/2005, 11/2005 and 118/2005 are allowed. The

market value of the lands that form the subject matter of Cross

Objection Nos: 9/2005, 11/2005 and 118/2005 are fixed at

Rs.68,000/- per Are while the market value of the lands that form

LAA 682/04 etc. 18

the subject matter of Cross Objection Nos: 33/2005, 42/2005 and

38/2005 are fixed at Rs.61,200/- per Are. It is made clear that the

claimants shall be entitled to the statutory benefits under Sections

23(2), 23(1-A) and 28 of the Land Acquisition Act in respect of the

enhanced compensation. In the circumstances of the case there will

be no order as to costs.

PIUS C.KURIAKOSE
Judge

K. SURENDRA MOHAN
Judge

jj

PIUS C.KURIAKOSE &
K.SURENDRA MOHAN, JJ.

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L.A.A.NO:

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JUDGMENT

Dated: