JUDGMENT
R.V. Raveendran, J.
1. The Appellants in MFAs 2358/2001 and 2360/2001 were respectively the claimants in LAC Nos. 137 and 138/1999 on the file of the II Addl. City Civil Judge, Bangalore City. LAC NO. 137/1999 relates to acquisition of Sy.No. 21 (20 Guntas) and Sy.No. 22 (31 Guntas) in all 1 acre 11 Guntas and LAC No. 138/1999 relates to acquisition of Land bearing Sy.No. 12 (26 Guntas), all situated at Gubbala Village, Uttarahalli Hobli, Bangalore South Taluk.
2. The said lands were acquired for laying the pipe line for Cauvery Drinking Water Supply Scheme, Bangalore (IV Stage) by the Bangalore Water Supply and Sewerage Board under Preliminary Notification dated 28.2.1995 (gazetted on 9.3.1995) and Final Notification dated 24.7.1996 (gazetted on 15.8.1996). The possession of the lands was taken on 25.2.1999, after passing the award on 9.9.1998. As per the Award, the LAO determined the market value of the land as Rs. 2,50,000/- per acre. Separate compensation was awarded for the structure and malkies in survey nos. 21 and 22.
3. Being aggrieved, the claimants (land owners) sought reference under Section 18(1) of the Land Acquisition Act, 1894(for Short the ‘Act’). The references made by the Special Land Acquisition Officer (‘LAO’ for short) were registered as L.A.C.NOS. 137 and 138 of 1999. According to the claimants, the market value was more than Rs. 25 lakhs per acre. Before the Reference Court, the third claimant in L.A.C. No. 137/1999 and the claimant in L.A.C. No. 138/1999 were examined as PWs. 1 and 3. The vendor of a land under a sale deed marked as Ex.P1 was examined as PW2. Exhibits P1 to P29 were marked, on behalf of the claimants. On behalf of the respondents, no evidence was let in. After appreciating the evidence, the Reference Court by judgment and award dated 20.1.2001 has rejected the reference by holding that the market value fixed by the LAO does not call for interference.
4. Feeling aggrieved, the claimants have filed these appeals. The only question that arises for consideration is whether the reference Court was justified in rejecting the reference by holding that the claimants have failed to prove that the market value awarded by LAO was inadequate.
5. The claimants gave evidence that the lands acquired were at a distance of 13 KM from Vidhana Soudha (Centre of Bangalore City), and at a distance of 3 KM from the Bangalore City Corporation Limits and one KM from Konanakunte. The claimants further stated that survey No. 12 is at a distance of about 500 feet from Kanakapura Main road and the Sy.Nos. 21, and 22 are near to Kanakapura Main Road; that the lands are near to Bharath Cooperative House Building Society Layout and K.E.B. Housing Society Layout, several factories and colleges and being near to Bangalore have great potential for non-agricultural use. The said evidence about the situation and potentiality is not seriously challenged in the cross examination.
6. The claimants relied on thee following documents to establish the market value:
(a) Sale deed dated 8.9.1997(Ex.P1) in regard to sale of 10 guntas out of land in sy.No. 58/4 measuring 2 acres 29 guntas situated at a distance of 1 k.m. from the acquired lands, for a consideration of Rs. 2,50,000/-
(b) Sale deeds dated 12.6.1997, 13.12.1995, 15.11.1995, 18.9.1997 and 2.5.1997 (Ex.P2 to P6) relating to sites measuring 8 guntas, (8712 Sq.Ft) 30′ x 50′, (1500 Sq.ft) 30’x 40′ (1200 sq.ft) in Doddakallasandra village and 30’x42′ and 30’x40′ in Vajrahalli village for Rs. 2,25,000/, Rs. 1,48,000/-, Rs. 80,000/-Rs. 2.10,000/- and Rs. 2,01,000/- respectively.
(c) Notification dated 3.12.1998 (Ex.P7) (gazetted on December 4,1998) and other notifications published during earlier years, by the State Government under Section 45B(3) of the Karnataka Stamp Act 1957 in regard to the estimated market value of the immovable properties showing the price of lands in Gubbalala village as Rs. 6,00,000/- per acre.
7. The Reference Court has considered these three sets of documents and rejected them as not to be relied on. We will briefly refer to the reasons assigned for such rejection and consider whether such rejection is justified.
Re-Ex.P1:
8. The claimants have examined the vendor under the Sale Deed 8.9.1997 as PW-2 and he has spoken about the sale of 10 guntas in Sy.No. 58/4 of the same Village for Rs. 2,50,000/- which works to Rs. 10 lakhs per acre. Nothing is elicited in his cross-examination to show that the transaction is not bona fide transaction.
8.1) However, the Reference Court has found that the sale took place nearly two years and six months after the Preliminary Notification and the claimants failed to establish that there was no abnormal rise or upward surge in prices between the date of Preliminary Notification (28-2-1995) and the date of sale relied on (8-9-1997), on account of acquisition of lands in the said area for formation of lay outs or other circumstances; and therefore it was not possible to work back the price as on 28- 2-1995 by adopting any standard deduction.
8.2) In ADMINISTRATOR GENERAL OF WEST BENGAL v. COLLECTOR, VARANASI, the Supreme Court referred to the circumstances is which sale deeds subsequent to the Preliminary Notification can be relied on. We may usefully extract them:
“The sale transaction Ex.P24 was an year later. Such subsequent transactions which are not proximate in point of time to the acquisition can be taken into account for purposes of determining whether as on the date of acquisition there was an upward trend in the prices of land in the area. Further under certain circumstances where it is shown that the market value was stable and there were no fluctuations in the prices between the date of the preliminary notification and the date of such subsequent transaction, the transaction could also be relied upon to ascertain the market value…….
But, this principle could be appealed to only where there is evidence to the effect that there was no upward surge in the prices in the interregnum. The burden of establishing this would be squarely on the party relying on such subsequent transaction. In the present case appellant did not endeavour to show that between the date of preliminary notification i.e. 4-7-1959 and the date of Ex.P24 i.e., 18-8-1960 there was no appreciation in the value of land in the area. Therefore, Ex.P.24 cannot be relied up as affording evidence of the market value as on 4-7-1959. We cannot accept the argument that the price indicated in Ex.P24 should be accepted after allowing an appropriate deduction for the possible appreciation of the land values during the period of one year. Apart from other difficulties in this exercise, there is no evidence as to the rate and degree of appreciation in the values of the land so that the figure could be jobbed backwards from 14-7-1960 to 4-7-1959.”
(emphasis supplied)
The above principle was reiterated in KARAN SINGH v. UNION OF INDIA.
8.3) While bona fide sale transactions which took place immediately after the Preliminary Notification can be taken into account with appropriate deductions, it is not sate to take note of transactions which took place nearly two and half years later in regard to an area on the outskirts in a fast growing city like Bangalore, where the fluctuations can be and in fact are abnormal. The usual method by assuming an average increase of 5% to 10% per annum may not be safe in regard to such areas. We may demonstrate this, with reference to the sale prices notified by the State Government under Section 45B(3) of the Karnataka Stamp Act, 1957, during 1995, 1996 and 1998. They show a sharp and acute increase in prices up to 1996 and a decline thereafter. It is unsafe to assume that there is always a steady increase in prices of lands; in the absence of evidence in that behalf. For convenience, we have extracted the market prices notified under Section 45B of the Stamp Act relating to several types of land situated at Gubbalala Village during 1995 to 1998 for ready reference.
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Date Garden Land Wet Land Dry Land Adjoining
Rs. Rs. Main Road
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13.3.1995
to 2,20,000 2,14,000 2,00,000 3,04,000
16.6.1996
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17.6.1997
to 2,64,000 2,57,000 2,40,000 3,65,000
18.11.1996
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19.11.1996 8,00,000 8,00,000 8,00,000 10,00,000
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4.12.1998 6,00,000 6,00,000 6,00,000 6,00,000
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The fluctuation is so abnormal and haphazard varying by (+ 200%) and (- 25%) per year it is not possible to take a sale deed executed two and half years after the Preliminary. Notification as the basis to work back the price as on the date of Preliminary Notification. There is no evidence on the part of claimants that the rates had remained steady between 1995 to 1997. Hence, the refusal by the Reference Court to act on the basis of the sale under Ex.P-1 dated 8-9-1997 is proper.
(b) Re.Ex.P-2 to P-6:
9. Ex.P-2 relates to extent of 8 guntas. Exts.P-3 to P-6 relate to small sites measuring 1200 Sq.ft to 1500 sq.ft (about 1 gunta). As neither the purchasers nor the sellers under these sale deeds have been examined to prove the relevancy and genuineness of the sale deeds, the Reference Court has rejected the said sale deeds relying on a decisions of a Three Judge Bench of the Supreme Court in SPECIAL LAND ACQUISITION OFFICER v. KURRA SAMBASIVA RAO, and several Judgments of Two Judge Benches of the Supreme Court in RATHAN KUMAR TANDON v. STATE OF UTTAR PRADESH, , G. NARAYANA RAO v. LAO, , APSRTC v. P. VENKAIAH, and UPSRTC v. STATE OF UP,
9.1) The learned Counsel for the Appellants submitted that the said decisions are based on the earlier decisions of the Supreme Court in INDER SINGH v. UNION OF INDIA, 1994 AIR SCW 1552 and P. RAMA REDDY v. LAO, that those decisions have been overruled in LAO & MANDAL REVENUE OFFICER v. V. NARASAIAH, 2001 AIR SCW 867; and that therefore the rejection of the sale transactions under Ex.P2 to P6 is erroneous. He contended that the transactions covered by those Exhibits ought to have been relied on even if the vendors or purchasers under the said deeds were not examined.
9.2) In NARASAIAH’s’ case (2001 AIR SCW 867), a three Judge Bench of the Supreme Court, relying on Section 51A of the Act, held as follows:-
“…..when the Section says that certified copy of the registered document “may be accepted as evidence of the transaction recorded in such document” it enable the Court to treat what is recorded in the document, in respect of the transactions referred to therein, as evidence.
The words “may be accepted as evidence” in the Section indicate that there is no compulsion on the Court to accept such transaction as evidence, but it is open to the Court to treat them as evidence. Merely accepting them as evidence does not mean that the Court is bound to treat them as reliable evidence. What is sought to be achieved is that the transactions recorded in the documents may be treated as evidence, just like any other evidence, and it is for the Court to weigh all the pros and cons to decide whether such transaction can be relied on for understanding the real price of the land concerned.
……. In the case of Section 51A of the LA Act also the position cannot be different, as it is open to the Court to act on the documents regarding the transaction recorded in such documents. However, this will not prevent any party who supports or opposes the said document or the transaction recorded therein to adduce other evidence to substantiate their stand regarding such transactions. But it is not possible to hold that even after the introduction of Section 51A the position would remain the same as before.
In the light of the above discussion we are unable to concur with the observations made by the two Judge bench in the decisions in Inder Singh v. UOI and P. Ram reddy v. Land Acquisition Officer, Hyderabad (supra) that even in spite of Section 51A of the Act certified copies of the sale- deed could not be considered without examining persons connected with the transactions mentioned therein.”
9.3) The learned AGA however submitted that there is an earlier three Judge Bench Judgment of the Supreme Court in SPECIAL deputy Controller v. Kurara Sambasiva Rao which lays down the principles laid down in INDER SINGH and RAMA REDDY: and as the later decision in NARASAIAH has not noticed it, the decision in KURARA SAMBASIVA RAO holding that a certified copy of a sale deed is not per se not admissible in evidence unless the vendor or vendee or scribe is examined continues to hold good. He relies on the following observations in the said decision:
“The best evidence of the value of property are…. In the absence of a sale deed relating to the acquired land, the sale transactions relating to the neighbouring lands in the vicinity of the acquired land. In that case, the features required to be present are; it must be within a reasonable time of the date of the notification; it must be bona fide transaction; it should be a sale of land similar to the land acquired or land adjacent to the land acquired; and it should possess similar advantageous features. These are relevant features to be taken into consideration to prove the market value of the acquired land as on the date of the notification published under Section 4(1) of the Act. This would be established by examining either the vendor or the vendee. If it is proved that they are not available, the scribe of the document may also be examined in that behalf. Section 51-A of the Act only dispenses with the production of the original sale deed and direct to receive certified copy for the reason that parties to the sale transaction would be reluctant to part with the original sale deed since acquisition proceedings would take long time before award of the compensation attains finality any in the meanwhile the owner of the sale deed is precluded from using the same for other purposes vis-a-vis this land. The marking of the certified copy is per se is not admissible in evidence unless it is duly proved and the witnesses. Viz., the vendor or the vendee, are examined. This principle has been repeated in a catena of subsequent decisions of this Court.”
9.4) There is clear and visible conflict between the two three Judge Bench decisions of the Supreme Court in KURRA SAMBASIVA RAO and NARASAIAH. There is also a divergence of views as to what the High Court should do if there is a conflict in the views of two Benches of the Supreme Court consisting of equal number of Judges. While some other High Courts have taken the view that in such cases, the High Court will have the choice of following that which is considered to be more appropriate, the position as far as this Court is concerned is settled by the decisions of two Full benches of this Court in GOOVINDA NAIK G. KALAGHATIGI, AIR 1980 SC 92 and M.M. YARAGATTIAL v. VASANT, AIR 1987 KAR 1860. The view of this Court is that where both benches of the Supreme Court consist of equal number of Judges, the later of the two decisions shall be followed by the High Court. We are therefore bound to follow the decision in NARASAIAH, though our preference may be for the view expressed in KURRA SAMBASIVA RAO. Be that as it may.
9.5) We may however note that there is agreement between the two decisions on the following: (i) a certified copy can be accepted as evidence without taking steps to secure the original; (ii) there must however be proof that the transaction covered by such copy of deed relates to a land which is similar to the acquired land, or adjacent to the acquired land; and (iii) the transaction under the deed is a bonafide transaction.
9.6) But, the position that the sale deeds’ (Ex.P2 to P6) may be considered as evidence in spite of non-examination of the vendors or purchasers, is not of much assistance to the landowners in these cases. All the sale deeds are executed long after the date of the preliminary notification and therefore of no assistance for the reasons stated while considering Ex.R1.
(c) Re.Ex.P7:
10. Ex.P-7 is a notification dated 3-12-1998 under Section 45B(3) of the Stamp Act, publishing the estimated market value of immovable properties in several areas of Bangalore City and surrounding areas as on 4.12.1998. Similar Notifications had been published during earlier years also (referred to in para 8.2 above. The question is whether the said notifications can be relied on for the purpose of determination of market value.
10.1) The Reference Court however has rejected the said notification dated 3-12-1998 (Ex.P7), on the ground that the estimation of market value published for the purposes of the Stamp Act cannot be the basis for determination of market value, relying on the decisions of the Supreme Court in JAWAJEE NAGANATHAM v. REVENUE DIVISIONAL OFFICER ADILA BAD, 1994 AIR SCW 2852 and the two subsequent decisions of the Supreme Court following the said decision that is LAO ELURU v. JASTI ROHINI, and U.P. JAL NIGAM, LUCKNOW v. KALRA PROPERTIES (P) LTD., .
10.2) The learned Counsel for the appellants submitted that the said decisions are inapplicable as they related to non-statutory determination of market value contained in Basic Valuation Registers maintained by the Registration Department for purposes of collection of stamp duty. He argues that in Karnataka the estimation of market value is by an Expert Committee constituted in terms of statutory provisions and the same is required to be published by the State Government in the Karnataka Gazette. It is further contended that the valuation published by the Government periodically, after scientific estimation by a Expert Committee constituted as required by the statute, is relevant evidence and at all events binding on the State Government, unless the State is able to produce other evidence to show that on the facts and circumstances, the valuation contained in the Notification is inapplicable.
10.3) Jawajee Nagnatham’s case arose from Andhra Pradesh. In that case, the land owners had appealed to the High Court against the order of Reference Court, claiming increase in market value, relying on the market value entered in the basic valuation register maintained by the Revenue Authorities under the Stamp Act. The Andhra Pradesh High Court rejected the contention based on the basic valuation register, as it had no evidentiary value and had no statutory basis. In appeal by the land owners, the Supreme Court held that the Basic Valuation Register was maintained for the purpose of collecting stamp duty under Section 47A of the Indian Stamp Act, 1899 (as amended in Andhra pradesh); that Section 47A did not confer any power expressly to the Government to determine the market value of the land prevailing in a particular area, village, block, and District and to maintain Basic Valuation Register for levy of stamp duty for Registration of an instrument; that there was no other statutory provision or rule having statutory force providing for maintaining such Valuation Register; and that the Basic Valuation Register prepared and maintained only for the purpose of collecting stamp duty has no statutory base or force and cannot form any basis to determine the market value of any acquired land under Section 23 of the Land Acquisition Act.
10.4) The decision in JASTI ROHINI also related to Andhra Pradesh. The Supreme Court merely followed the decision in JAWAJEE NAGANATHAM and held that the Basic Valuation register had no statutory basis.
10.5) The third case (U.P. Jal Nigam) arose from Uttara Pradesh. In that case, the land owner filed a Writ Petition seeking direction to U.P. Jal Nigam to pay compensation in regard to lands acquired on the basis of market value assessed by the District Magistrate/Collector, Lucknow. The High Court allowed the petition and directed the U.P. Jal Nigam to pay compensation at the rate determined by the Collector, on the basis of the Basic valuation circulars issued for purposes of Stamp Duty. The Supreme Court following the earlier decision in JAWAJEE NAGANATHAM held that the Collector committed an error in determining the market value on the basis of Basic value circulars.
10.6) All the three decisions rejected the value entered in the Basis valuation Registers, on the ground that they had no statutory basis having regard to the provisions of Stamp Law applicable in the respective States (Andhra Pradesh and Uttar Pradesh) and cannot form the basis for determination of market value under Section 23 of LA Act. But we find that the Law relating to stamp duty in Karnataka is different.
10.7) Section 45-A of the Karnataka Stamp Act provides how instruments undervalued should be dealt with. Section 45-B relates to constitution of Committees for estimation of market value. The said Section as it existed at the relevant time is extracted below:
“45-B (1) Subject to such rules as may be prescribed, the State Government shall, by notification, constitute for each Taluk or any part thereof one or more committees consisting of such number of members, as may be prescribed, to estimate the market value of any property or of such properties in any area in the prescribed manner and at prescribed intervals.
2. The Committee shall follow such procedures as may be prescribed;
3. The State Government shall, by notification publish the market value estimated under Sub-section (1).
Note: The said Section was inserted by the Act No. 11/1991 with effect from 1-4-1991. The said Section was amended by Act No. 6/1999 with effect from 1-4- 1999, omitting Sub-section (3) and adding the following at the end of Sub-section (1) ” (and to publish the estimated market value in such manner as may be prescribed.)”
Thus, it is seen that the Constitution of the Committee for estimation of market value, is statutorily provided. Further publication of the market value estimated by such Committee by means of notification in the Gazette by the State Government is also specifically provided for by Section 45-B(3). Section 45B(1) as amended from 1-4-1999 provides for publication of the estimated market value in the manner prescribed. Therefore the notifications published under Section 45B(3) before 1-4-1999, and notifications published under Section 45B(1) after 1-4-1999, showing the market value cannot be ignored on the ground that they do not have a statutory basis.
10.8) The Committee constituted under Section 45B is required to estimate the market value in an area, in the prescribed manner. The State Government has framed the Karnataka Stamp (Constitution of Committee for Estimation of Property) Rules, 1992 in exercise of its power under Section 45-B r/w Section 68 of the Karnataka Stamp Act. Rule 3 provides that the Estimation Committee shall consist of not less than three and not more than five members who shall be the Officers of the Department of Revenue, Public Works, Survey and Settlement, Officers of the Local Authorities Municipal Corporation, Municipal Council, or Panchayat as the case may be) and an expert in the field of valuation of properties in such area; and the Sub-Registrar of the Taluk or sub-District, shall be the Member Secretary of the Committee. Rule 4 provides the manner of estimation of the market value of properties, and the matters to be considered for valuation of lands, house sites, Buildings and other properties. For estimating the market value of land, the said Rules requires the Committee to have regard to the following:
Agricultural Land:
(i) classification of the land as dry, garden, wet and the like;
(ii) classification, under various classes of soil in the survey records;
(iii) the rate of revenue assessment for each classification;
(iv) other factors which influence the valuation of the land in question;
(v) points, if any, mentioned by the parties to the instrument or any other person which requires special consideration;
(vi) value of adjacent land or lands in the vicinity;
(vii) average annual yield from the Land for five consecutive years till the determination and nearness to road and market, distance from village site, its location in general, level of land, transport facilities, facilities available for irrigation, such as tanks, wells and pumpsets; and
(viii) the nature of crops raised on the land.
Other lands:
(i) The nature and condition of the Property.
(ii) Purpose for which the property is being put to use; and
(iii) Any other special features having a bearing on the valuation of the Property.
Rule 5 requires review of the estimates once in three years or as and when required by the State Government.
10.9) Thus the Estimation of Market value prepared periodically by an Expert Committee consisting of Officers from the Department of Revenue/Public Works/Survey Settlement/Local Authority/Registration as also a local valuation, export, as required by Section 45B(1) and published in the Karnataka Gazette by the State Government under Section 45-B(3) of the Karnataka Stamp Act, has certainly a statutory basis and will be a relevant piece of evidence for determination of market value. In the absence of comparable sales, one of the recognised methods of determination of market value is with reference to the opinion of experts. The estimation of market value by the statutorily constituted Expert Committee can therefore be considered as relevant evidence, and can be acted upon, in the absence of evidence to the contrary or evidence showing that such valuation is inapplicable. As it is prepared and published under Section 45B, there is also no need to examine any member of such Expert Committee to prove the Notification containing the Estimate of Market Value.
Therefore the reference Court committed an error in ignoring the Notification relating to the estimation of price issued under Section 45B of Karnataka Stamp Act, 1957. The decisions of the Supreme Court in JAWAJEE NAGANATHAM, JASTI ROHINI and U.P. JAL NIGAM are not applicable where the market value is estimated by a statutory committee scientifically and published as required by law.
10.10) It should however be clarified that the estimate of Market value mentioned in the Notifications issued under Section 45B is only a piece of evidence like any other evidence and can always be rebutted by other evidence.
10.11) The Notification exhibited by the claimants (Ex.P7) related to land prices as on 4.12.1998, more than three and half years after the date of Preliminary Notification. While dealing with Ex.P-1 we had referred to the abnormal variations in prices between 1995 to 1998 and therefore the said notification (Ex.P7) cannot furnish any basis for arriving at the market value for the acquiring lands in February/March 1995.
10.12) The claimants submitted that even though they had not produced and marked the earlier notification published under Section 45B showing the estimated market value in 1995, we may take note of them, as they are statutory Notifications published in the Karnataka Gazette under Section 45B(3) of the Stamp Act. But, that would be permitting evidence without giving the other side an opportunity to rebut the same. As already noticed, the estimated value mentioned in the Notification issued under Section 45B(3) is nothing but a piece of evidence. It is always opera to either party to prove that such evidence is not relevant or that the market price established by such Notification should be modified having regard to any plus and minus factors enjoyed or suffered by the acquired land. Therefore, the appropriate course is to remit the matter to the Reference Court, so that both parties will have due opportunity to let in appropriate evidence.
CONCLUSION:
11. As we have held that rejection of the documentary evidence relating to market value (Ex.P1 to P7), by the Reference Court is proper and as the Land Acquisition Officer has neither stepped into the witness box nor tendered any evidence, there is virtually no material available to determine the market value. It is unfortunate that both the Land Acquisition Officer and the Government Pleader who appeared for the LAO before the Reference Court did not bestow the attention needed. In fact, PW-2 and PW-3 were not even cross examined and the LAO did not chose to adduce any evidence. He should have got marked the award, and also ought to have produced the copies of the sale deeds referred and relied upon by him in the award. Be that as it may.
12. We have also held that notifications issued under Section 45B of Stamp Act can be a valid piece of evidence and parties should have an opportunity to let it necessary evidence in that behalf. In such circumstance, the Supreme Court has held in SREENIVASA REDDY v. MANDAL REVENUE OFFICER CUM – LAO, 2001 AIR SCW 2507 that the High Court could remit the matter for adducing proper evidence. We are therefore of the view that this is a fit case for remand.
13. We accordingly allow these appeals in part and set aside the judgment and the awards of the Reference Court in LAC No. 137 and 138/1999 which are under challenge in these appeals and remand the matter to the Reference Court for fresh consideration after giving due opportunity to both the parties to let in further evidence. We direct refund of Court fee paid on the appeals, as a consequence of remand. Parties to bear respective costs in this appeal.