1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
FIRST APPEAL 142 OF 2000
WITH
FIRST APPEAL 53 OF 2001
WITH
CIVIL APPLICATION (F) No. 2282/2011.
ig ............
FIRST APPEAL No.142/2000.
1.Late Narayanlal Bansilal
(through Shri Madhavlal N. Pittie
Receiver of the Immovable Properties,
appointed in the High Court Suit
No. 224 of 1961) Great Social
Building, 4th Floor, 60 Sir P.M. Road,
Fort, Bombay 400001.
2.Smt. Rajkumari N. Pittie III Plazzo,
Little Gibbs Road, Malabar Hill,
Bombay 400 006 (Deleted as per
Order dated 24.6.1999
below Exh.254).
3.Shri Balkrishnalal N. Pitale,
(HUF), Flat No.12, "Palmera"
Altamount Road, Bombay 400026
(Dead)
3-I. Mrs. Radhabai Pitte.
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3-II.Mrs. Veena N. Ruia,
R/o. Samudra Mahal, 17th Floor,
417, Dr. Annie Besant Road,
Worli, Bombay - 4400018.
4.Shri Madhusudanlal N. Pittie
(HUF), "Suket", (Dead through L.R)
Smt. Damyantibai Madhusudanlal Pittie,
29-B, Dongerisi Road
Malabar Hill, Bombay 400006.
5.Shri Madhavlal N. Pittie
(HUF), "Suket", 29-B, Dongerisi Road
Malabar Hill, Bombay 400006.
6.Shri Madhavlal N. Pittie
(IND), "Suket", 29-B, Dongerisi Road
Malabar Hill, Bombay 400006.
7.Shri Vivek Madhavlal N. Pittie
"Suket", 29-B, Dongerisi Road
Malabar Hill, Bombay 400006.
8.Smt. Sulchana M. Pittie
r/o. "Suket", 29-B, Dongerisi Road
Malabar Hill, Bombay 400006. ....APPELLANTS.
VERSUS
The State of Maharashtra,
through Collector, Amravati,
District - Amravati. ....RESPONDENT
.
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WITH
FIRST APPEAL No.53/2001.
The State of Maharashtra,
through Land Acquisition Officer,
Amravati. ....APPELLANT.
VERSUS
1.Late Narayanlal Bansilal
(through Shri Madhavlal N. Pittie
receiver of the immovable properties),
(Appointed in the High Court Suit
No. 224 of 1961) Great Social
Building, 4th Floor, 60 Sir P.M. Road,
Fort, Bombay 400001.
2.Smt. Rajkumari N. Pittie 4-C III Plazzo,
Little Gibbs Road, Malabar Hill,
Bombay 400 006 (Deleted as per
Order dated 24.6.1999
below Exh.254).
3.Shri Balkrishnalal N. Pitte,
(HUF), Flat No.12, "Palmera"
Altamount Road, Bombay 400026
(Dead)
3.I) Mrs. Radhabai B.Pitte.
Flat No.12, Palmera, Bombay 400026.
3-II)Mrs. Veena N. Raia,
R/o. Samudra Mahal, 17th Floor,
417, Dr. Annie Besant Road,
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Worli, Bombay - 4400018.
4.Shri Madhusudanlal N. Pittie
c/o. Madhavlal Narayanlal Pitte,
r/o. Harinagar Sugar Mills, World Trade
Centre, Kolaba, Mumbai.
L.R. Of R.No.4.
Smt. Damyantibai Madhusudanlal Pittie,
29-B, Dongerisi Road
Malabar Hill, Mumbai 400006.
4.(Shri Dadhusudanlal N. Pittie
(H.U.F), "Suket", 29-B, Dongerisi Road
Malabar Hill, Bombay 400006).
5.Shri Madhavlal N. Pittie
(HUF), "Suket", 29-B, Dongersi Road
Malabar Hill, Bombay 400 006.
6.Shri Madhavlal N. Pittie
(IND), "Suket", 29-B, Dongersi Road
Malabar Hill, Bombay 400006.
7.Smt. Sulochana M. Pittie
"Suket", 29-B, Dongersi Road
Malabar Hill, Bombay 400006.
8.Shri Vivek Madhavlal Pittie
"Suket", 29-B, Dongersi Road
Malabar Hill, Bombay 400006. ....RESPONDENTS
--------------------------
Mr. C.N. Korde, Senior Advocate
with Mrs. Pangarkar, Advocate for Landowners.
Mr. J.J. Chandurkar, Advocate for legal heirs
of deceased Madhusudanlal in both Appeals.
Mr. R.B. Deo, Special Counsel with Shri Ambarish Joshi,
A.G.P. for State.
-----------------------
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CORAM : B. P. DHARMADHIKARI
AND A.P.BHANGALE, JJ.
Date of reserving the Judgment. - 02.09.2011
Date of Pronouncement. - 28.09.2011
JUDGMENT. (Per B.P. Dharmadhikari, J)
1. Judgment dated 31/12/1999 delivered by Joint Civil
Judge, Senior Division, Amravati in Reference proceedings land
acquisition case 13 of 1988 under Section 18 of the Land
Acquisition Act,1894 (hereinafter referred to as “the 1894 Act” for
short), is assailed by both parties i.e., the landowners as also
acquiring authority in these appeals under Section 54 thereof. Said
reference arose out of award dated 16/7/1987 in L.A.C. 3/LAQ-
47/83/84 made by the Land Acquisition Officer for and on behalf
State of Maharashtra. Notification under Section 4 of the 1894 Act
was published on 19/2/1984. While admitting First Appeal No.
53/2001 filed by State, this Court on 12/2/2001 granted stay in
terms of prayer clause (I) of Civil Application No.656/2001 on
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appellant- State depositing decreed amount with Trial Court within
period of 8 weeks. That order continues to operate even today.
2. Civil Application (F) No. 2282/2011 is taken out by
landowners pointing out death of appellant no.4 on 4th August 2011
and seeking leave to amend as per its schedule to bring his legal heir
on record. State government is also asked to effect similar
amendment in its First Appeal No. 53/2001, though no formal
application is as yet moved by it. Shri J.J. Chandurkar, learned
Counsel for said legal heir viz. Smt. Damyanti states that he is
appearing for her in both the matters. State Government has without
prejudice to its rights to verify the position, sought oral leave to
substitute similarly. Accordingly, We permit respective Appellants to
amend their respective memo of appeals forthwith.
3. Plot no. 1 Nazul Survey no. 14 of Amravati town formed
subject matter of acquisition. The area as per last notification under
Section 17 (1) dated 18/7/1985 is 54,168.86 Sq. Mtrs. and
landowners claim it to be 60790 Sq. Mtrs. The award granted them
compensation of Rs. 34,67,030/- towards land, structures, trees and
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statutory benefits. Trial Court or Reference Court found area
acquired to be 59,870 Sq. Mtrs. as per report if Court Commissioner.
By following hypothetical plotting method and using comparable
sale instances, it arrived at rate of Rs. 19.50 per sq. ft. for belt-1
plots, Rs. 16.50 per sq. ft. for belt-2 plots and Rs. 13.70 per sq. ft.
for belt-3 plots. Total amount for all three belts thus worked out by
it was Rs. 74,06,128/-. It then followed judgment of Hon’ble Apex
Court reported at AIR 1998 SC 700 (Hasanali Walimchand vs. State
of Maharashtra) to deduct 50% towards developments and found Rs.
37,03,064/- as value of acquired land. It also found them entitled to
Rs. 17,57,521/- towards costs of structures on acquired land,
Rs.22,120/-as value of barbed wire fencing and Rs. 2990/- as value
of trees. Out of this Rs. 54,85,895/- as sum of Rs. 20,30,116/- was
already received by landowners, it granted them balance amount of
Rs. 34,55,779/-. The premises were being used by State for office of
Divisional Commissioner, Amravati since 1/1/1981 and on
6/8/1985 possession was taken by it after invoking urgency clause.
Trial Court therefore granted them compensation under Section
23(1-A) of the 1894 Act, from 1/1/1981 till 16/7/1987 i.e., date of
award calculated at 12% P.A., on the market value (Rs.14,77,740/-)
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of big bungalow. Said sum given by it is Rs. 11,52,637/-. It granted
them compensation at 12% PA under Section 23(1-A) on other
property from 6/8/1985 till 16/7/1987 at Rs. 9,21,877/-. It thus
awarded to them total sum of Rs. 75,60,409/-. It deducted from this
total, a sum of Rs. 20,30,116/- already awarded by land acquisition
officer and declared landowners entitled to receive Rs. 55,30,293/-
more with 30% solatium on it under Section 23(2), interest on
balance costs and solatium at 9% on it from 16/7/1987 to
15/7/1988 and at 15% thereafter as per Section 28/34 of the 1894
Act. Before us there is no dispute that direction to pay solatium on
Section 23(1-A) grant is unsustainable.
4. Shri Korde, learned Senior Counsel for landowners has
strongly relied upon the appointment of district inspector of land
records as court commissioner to find out exact area of land
acquired to show that land in excess not covered under area in
award under Section 11 is also found acquired and hence, grant of
compensation by LAO is incorrect. He further argues that
landowners and LAO have both resorted to hypothetical plotting
method to determine compensation but then Trial Court has for
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valid reasons held report/lay-out drawn by landowners expert Shri
Gandhi at Ex. 195 more reliable. In this view of matter, it could not
have discarded the belting scheme used by Shri Gandhi and
substituted it by its own estimate. The placement of acquired land,
its more altitude and therefore superior position in market as
compared to adjacent lands is all narrated in detail by Shri Gandhi
and Trial Court overlooked it for no valid reason. Layout of Sant
Sadguru Sitaram Maharaj Sansthan (SMS layout) Public Trust in
plot no. 2 along with other plots in the vicinity have been used by
Shri Gandhi as measure to determine the market value. The
placement of said land is much better than adjacent plot no. 2 where
a layout has come up in 1982/1983 and sales of plots from that
layout are treated as comparable by Trial Court. Shri Gandhi
therefore made 25% allowance over and above price fetched by
plots in that layout and Trial Court could not have ignored it.
Similarly, the layout in plot no. 1(acquired land) has got frontage on
public roads on three sides and hence belting of all such plots in
layout with said benefit in first belt by him could not have been
faulted with. Deductions ordered by it are at variance with report of
said expert and when evidence on record proved need of no such
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expenditure here, the Trial court could not have invoked the thumb
rule. In any case, looking to instances of or nature/extent of
development in adjacent layouts, deductions of 50% from land price
determined is exorbitant and arbitrary. He also places strong
reliance on evidence of Shri Ganeriwal the managing trustee of SMS
Trust. The distance between plots in that layout and in proposed
plots in acquired land is only 400 meters. Shri Gandhi has worked
out market price of plots in acquired land after calculating the
annual escalation, made allowance for valid reasons and assigned
grounds for no development expenditure. He has not been subjected
to any cross-examination in this regard and hence, Trial Court erred
in not acting upon that evaluation. He points out that Shri Gandhi
has already deducted about 25% of land-area for development
activities like roads, garden etc. Hence, further deductions of 50%
flat again by Trial Court is not supported by records and
unwarranted. According to learned Senior Counsel landowners have
suffered total deductions of 75% thereby. Shri Gandhi’s layout held
as better by Trial Court needed to be acted upon by maintaining
belting exercise therein as it is. His reasons for not making any
adjustment towards deferment factor also needed acceptance. Plans
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of Shri Gandhi and other plans on record are relied upon to show
relative placement and to justify treatment thereto for valuation.
Plots 53 to 63 placed behind first row must be treated as in 2 nd belt.
It is urged that plots shown in yellow and on Chilamshah wali road
must be valued at rate between 1st belt rate and 2nd belt rate.
5. Learned Senior Counsel then pointed out how the expert
has applied a well known method of “sinking fund” and used CSR
rates by adding 25% to it to match the type of construction available
while working out its cost. The scientific method adopted by him
have not been doubted in cross by the State. It is further contended
that evidence of Shri Deshmukh, LAO is biased and hence, not
acceptable. Similarly, though other witness Shri Kale accepted that
structures may have future life of 30 to 40 years, he in calculations
adopted it to be 7 years only. His evidence is also urged to be biased
and his failure to support his computation in Court despite grant of
adjournments is pressed into service to discard it. Comparative chart
prepared to show at glance the working of costs of structures by
following sinking fund method (used by Shri Gandhi) and constant%
method (used by State’s witness Shri Kale) to age and future life (30
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years) of respective structures mostly due to Kale’s evidence that
future life was of about 30 to 40 years is also pressed into service.
6. He has placed reliance upon various judgments of
Hon’ble Apex Court to substantiate his contentions and to
demonstrate how the Trial Court has misdirected its exercise. (2011)
6 SCC 47 – (Trishala Jain and another vs. State Of Uttarchal and
another) is relied upon to explain the principles of guesstimate.
(2009) 15 SCC 769 (Lal Chand vs. Union of India and another) is
shown to justify need of proper deduction for development costs and
its extent. (2010) 1 SCC 444 – (Subh Ram and Others vs. State of
Haryana and another) is cited to urge that 40% deduction is ideal in
such matters. He invited attention to impugned judgment in an
attempt to demonstrate those errors. He fairly stated that though
damages awarded for period from 1/1/1981 till 19/2/1984 under
Section 23(1-A) of the 1894 Act are unsustainable, he supported
grant by pointing out the views expressed relief given by Hon’ble 3
Judges of Apex Court (2004) 4 SCC 79 (R.L. Jain vs. DDA and
others), even for such loss of possession and need to award rental
compensation in such facts. The Reference Court should have
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granted damages in lieu of rent lost and interest at the bank rate
upon the sum of damages. Similar view reached in (2003) 7 SCC
448 (para 3 and 9) (State of Maharashtra and others vs. Maimuma
Banu and others) is also shown. (2005) 12 SCC 443–(para 8 ) (Land
Acquisition Officer and Asst. Commissioner vs. Hemanagouda and
another) is also pressed into service and it is contended that as all
relevant material is available, remand for that purpose is not
necessary. How this Court has granted interest for period and
possession prior to Section 4 notification is brought to our notice
through 2009 (1) Mah.L.J. 299 (para 5) (State Of Maharashtra vs.
Bhaskar Namdeo Wagh). Reliance is being placed on ground no. 38
in memo of appeal to argue that rental compensation at 12% needed
to be calculated on Rs. 16,82,614/-without any deductions. He has
added that if land sufficient to support the big bungalow is worked
out by using FSI/FAR to be “1”, the proportionate land needed is
21,795 Sq. ft. and in that eventuality, 12% of Rs. 15,97,651/- is to
be awarded as rental compensation. In any case, grant of
compensation at 12% is reasonable and as premises were being used
for non-residential purposes, a higher rate is warranted. He also
states that 12% additional component also should have been given
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on remaining property for the period from 19/2/1984 to 6/8/1985.
7. Shri Rohit Deo, learned Special Counsel has pointed out
that entire area of plot no. 1 as per old property card has been
acquired and landowners have failed to demonstrate their title to
anything in excess of area in notification under Section 17 (1) dated
18/7/1985 i.e., 54,168.86 Sq. Mtrs. Landowners claimed it to be
60790 Sq. Mtrs. and Trial Court or Reference Court found area
acquired to be 59,870 Sq. Mtrs. as per report if Court Commissioner.
He argues that plot area recorded in property register i.e., settlement
records way back in 1925 ought to have been accepted. Property
cards at Exh. 247/248 reveal 54,000 Sq. Mtrs. area. The landowners
had/have with them the original sale-deed which could have shown
their entitlement to receive compensation for said area. As sale-deed
is not produced,an adverse inference is/was warranted. Though the
report Exh.24 of DILR appointed as Court Commissioner was not
objected by State, that report does not establish title of Landowners
to 59,870 Sq. Mtrs.
8. He pleads that there was no question of giving any rental
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compensation for period prior to Section 4 notification under the
1894 Act. The rental compensation for period from 1/1/1984 till
Section 4 notification on 19/2/1984 is not payable in any
proceedings under the 1894 Act. Judgment of Hon’ble Apex Court
in R.L. Jain vs. DDA and Others (supra), does not lay down any law
on these lines. Observations of Hon’ble Apex Court are under Article
142 of Constitution of India. According to him reference to Section
48 of the 1894 Act therein shows that dispossession therein was
traceable to that Act. Other judgments relied upon by the
landowners also show same features. By placing reliance upon
(2002) 1 SCC 142 (para 7) (Siddappa Vasappa Kauri vs. Special Land
Acquisition Officer), he points out that no compensation is payable
for period prior to issuance of Section 4 notification and Section
23(1-A) is held to be unambiguous in this respect. He points out that
here possession was never with Landowners and premises were
allotted under C.P. and Berar Rent Control Order,1949 to State for
office of Divisional Commissioner and accordingly establishment of
Divisional Commissioner entered possession on 1/1/1981 and
continued till 6/8/1985 when it was taken under the 1894 Act. In
1981, the acquisition was not even in contemplation. For that
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possession, fair rent or standard rent could have been claimed before
appropriate forum and not in these proceedings. Quashing or setting
aside or cancellation of that allotment by High Court does not
render it a possession pursuant to the 1894 Act.
9. Coming down heavily on evidence/report of Shri Gandhi,
he points out that being a paid expert, his evidence is not impartial.
It also lacks relevant material which might have formed its base and
as that material is not produced for perusal, his opinion can not be
appreciated by this Court. Section 45 of Evidence Act is pressed into
service. The report refers to experience of Shri Gandhi as ground
but that experience and knowledge is not proved on record and
hence, Shri Gandhi can not be relied upon as an expert. As area
considered by him in his report/layout at Ex. 195 is itself drastically
reduced, his layout is rendered irrelevant. Layout looked into by
State is based upon accurate area and hence Trial Court ought to
have been accepted it as base for calculations. In alternative, he
urged that area of layout of Shri Gandhi acted upon by Trial Court
needs to be scaled down proportionately and used as base but
subject to other arguments about market rate, deferred value
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adjustment, development costs etc.
10. It is pointed out that earlier two reports of said expert at
Exh. 204 dated 17/1/1985 and Exh. 205 dated 24th October,1985
reveal inconsistent and contrary position which is sufficient to
impeach his credit and to ignore his report Exh. 195. Due to
absence of title, Shri Gandhi has claimed flat Rate of Rs. 15 per Sq.
feet for excess land. Comparison of these reports is done to show
change in approach to favour his clients viz. Landowners. Last report
Ex. 195 is prepared just 3 to 4 months prior to his deposition by Shri
Gandhi. It is urged that obvious effort is to cure material defect and
to adjust development charges. It is nothing but like an information
booklet or brochure prepared at the instance of a builder to lure
customers. He relies upon (1995) 2 SCC 305–( para 15,16) (P. Ram
Reddy and Others vs. Land Acquisition Officer, Hyderabad Development
Authority) to contend that even if it is presumed (without admitting
it) that there is ineffective cross-examination, still the law courts are
obliged to test probabilities and such improved version can not be
mechanically used. In AIR 1952 SC 214 (para 22) (Bhagwan Singh
vs. State of Punjab(I)) Hon’ble Apex Court shows how the Court has
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to compare the later statements of Shri Gandhi with his earlier
admitted reports when all these mutually inconsistent
reports/statements are admitted and available on record. Exh. 195,
therefore must be rejected. Credit of such witness bringing on
record all these 3 reports is impeached under Section 155(3) of
Evidence Act. Trial Court has erred in acting upon deposition of such
witness. Want of material on record to sustain findings of expert is
found in 1996(3)All MR 507 (para 17) (Government of Goa vs.
Jagannath V. Khalap) enough by this Court to lower him to a
partisan witness. Thus , according to him the Government valuer has
been erroneously rejected as data or calculations of costs is not
produced and as he accepted Shri Gandhi’s method of calculating
depreciation. This observation is urged to be erroneous as there is
no such acceptance or then conditions subject to which he accepted
that method, are overlooked by Trial Court. Shri Kale has not been
effectively cross-examined and his assertions are not even
questioned. Only because off-hand he could not undertake or
explain the cost-exercise undertaken, he could not have been
disbelieved. Even if life of structures is presumed to be 99 to 100
years, depreciation rate would be 1 instead of 1.33 and it does not
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make material difference on total compensation payable in that
regard.
11. In this background, he takes up the issue of land
valuation. He states that because of layout on adjacent plot no. 2 of
SMS Trust, the comparable sale instances are readily available. Due
to proximity, both in time and location, Trial Court has rightly found
it proper to rely on it. The consistent views of Hon’ble Apex Court in
such situation permit escalation of 10% every year from date of sale
deed till date of Section 4 notification. As alleged expert Shri
Gandhi of Landowners has here granted it at compound rate of 25%
annually, that too from the date of agreement for sale, the Trial
Court has rightly rejected it. Judgment of this Court reported at
2008(3) All MR 379 (para-7 and 8) (State Of Maharashtra vs. Punja
Trambak Lahamage) is relied upon to contend that date of actual
transfer of title ie sale-deed is only decisive. Shri Gandhi could not
have made allowance of 25% over the sale-deeds in SMS layout
because of alleged superiority of plot 1 and when Landowners have
sought to discredit State witness Shri Deshmukh’s stand that SMS
layout is located near city, same logic must hold good to deny such
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allowance. Evidence of Shri Deshmukh is not false and as he was
LAO, he proved to be little obstinate about his award and
calculations. He points out that law has always recognized as special
the plots on highways and in 1984-85, Chilamshah Wali Road was a
“Kuchha Road”. Hence, Trial Court has rightly refused to accept
plots on this kuchha road as in belt-1. He also states that 30%
solatium can not be awarded on 12% component under Section
23(1-A). Subh Ram and Others vs. State of Haryana and
another( supra) (paras 9,11,12 to 14, 24 and 32) as also Lal Chand
vs. Union of India and another (supra) (paras 15 and 17) are pressed
into service to buttress contention that 50% to 75% is the standard
range of deductions in such cases.
12. In reply arguments, Shri Korde, learned Senior Counsel
has contended lands received in possession by State from
Landowners has to be decisive in the matter of computation of area
relevant for determination of compensation. Emphasis of notification
declaring intention to acquire is on entire plot no. 1 and its area is
therefore secondary. Even plan prepared by Mr. Watkar for State
Government is relied upon with argument that there is only
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mathematical error in calculation due to irregular area of plot no. 1.
It is urged that if State is happy with acquisition of notified area,
balance land over and above it must be left intact on spot in
possession of Landowners. If this can not be done, they must receive
compensation for entire area as per report of Court Commissioner.
When Shri Deshmukh for State has accepted acquisition of whole
plot no. 1, the dispute about correctness or otherwise of area
recorded in revenue/property cards is irrelevant. He further points
out that title of Landowners to said plot is not in dispute at all.
While making award under Section 11, Collector/State has to
declare true area of acquired land and it is subject to adjudication
under Section 18 thereof. Landowners prayed appointment of
commissioner to resolve this dispute on 7/5/1991 and vide order
passed below Exh. 21, Trial Court granted it. This order was not
assailed by the State. Thereafter, spot was surveyed on 2nd to 4th
March, 1993 and report came to be filed on 8/7/1993. Trial Court
fixed the case on 12/8/1993 for raising objection and then it was
adjourned to 4/9/1993. As no body raised any objection to it, matter
proceeded further to the stage of “issues”. Even otherwise no error
or prejudice is pointed out by the State and State can not take land
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for free. Earlier survey by Shri Watkar on 18-20 February, 1984 was
behind the back of Landowners and with undue haste. Evidence of
Shri Deshmukh is relied upon in support.
13. Learned Senior Counsel states that report of expert Shri
Gandhi just before recording his evidence is in lieu of a detailed
examination in chief to save time and labour. He has been subjected
to cross-examination to the extent necessary by State. His earlier
reports Exh. 204 and 205 were for use of LAO and Exh. 205 is
corrigendum to Ex. 204. Why there is slight change in mode and
manner of computation of development charges is fully explained
by him in Ex. 195. Hence, in this background, effort made by Shri
Deo, learned Counsel to doubt his veracity for the first time before
this Court needs no cognizance. Had he been put these contentions
in cross before the Trial Court, appropriate justification could have
come on record. Though Shri Korde, learned Senior Counsel stated
that he would not like to be too technical in this respect as
Ex.204/205 available in writing were not put to Shri Gandhi, still,
principles of natural justice prohibit such condemnation of witness.
He points out that Shri Gandhi has not scaled down expenditure on
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development to make room for provision of developer’s profits. AIR
1988 SC 1652 (para 4) (Chimanlal Hargovinddas vs. Special Land
Acquisition Officer,Poona and another) is pressed into service to
substantiate these contentions. It is contended that judgment in case
of State Of Maharashtra vs. Punja Trambak Lahamage (supra) (para
7) cannot be construed as laying down a blanket proposition that in
all facts, date of agreement needs to be ignored. It is urged that
responsible judicial officer like joint charity commissioner
functioning under the Bombay Public Trust Act,1950 has ascertained
market value on the relevant date on which SMS Trust invited offers
and then sanction to sell under Section 36 thereof has been
accorded. Judgment of learned Single Judge of this Court in
Arunodaya Prefab vs. M.D. Kambli ( Misc. Petition nos. 415 and 485
of 1974 decided on 17/11/1978 at Bombay) -[para 22], is pressed
into service for said purpose. A separate note explaining calculation
error due to mistake in finding out time-lag between sell-agreements
in SMS layout and 19/2/1984 is also placed on record. Attention is
invited to sale instances on record to demonstrate that annual hike
of 25% by Shri Gandhi is not erroneous or perverse. Chart Annex. G
with Exh. 195 is relied upon. It is urged that material not available
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in 1985 has been utilized while preparing report at Exh. 195 and as
such, no fault has been shown in it. Depreciation of structures is
argued to be a subjective factor and a prospective buyer is bound to
evaluate utility of strong structure still standing on plot no. 1. It is
urged that such technical concepts can not be used in present facts
when witness for State has himself disclosed future life to be 40
years. Hence, charts prepared later by Landowners and submitted to
this Court must be accepted to find out correct valuation of
structures. At the end of his arguments, learned Counsel on
2/9/2011 stated that there is no annual compounding by Shri
Gandhi at 25% and his earlier statements on these lines need to be
ignored.
14. Shri Deo, learned counsel again attempted to
demonstrate that Shri Gandhi has not given any explanation for
bringing down drastically the development charges in Ex. 195. In
Exh. 204, salable area of plot 1 considered is 4,98,100 Sq. Mtrs. with
Rs. 77,50,767/- as its value. In Exh. 195, said area comes down to
4,80,522 Sq. Mtrs. while its price rises to Rs. 91,78,480/-. He points
out that Settlement Map of 1927 itself shows area of plot no. 1 as
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25
acquired and the Landowners have made no efforts to correct it.
Even to establish possession on such excess land, except for report of
Court Commissioner at Ex. 24, there is no other material on record.
15. Briefly stated, the following are the points in dispute
between parties:–
A)
igFor what area, the Landowners are entitled to claim
compensation?Answer- -For 54,168. 86 Sq. Mtrs.
B) Are they entitled to claim rental compensation or
damages for period prior to Section 4 notificationi.e., from 1/1/1981 till 19/2/1984?
Answer– No.
C) At what rate compensation for land needs to be
granted?Answer– Rs. 4311991/-
D) At what rate compensation for big bungalow and
second bungalow needs to be granted?Answer– Rs. 5,28,000/-.
E) Relief/Order:- See below for details. Appeal of Landowners is dismissed and Appeal of State Government is partly allowed. ::: Downloaded on - 09/06/2013 17:46:55 ::: 2616. As to Point No. A :- In AIR 2004 S.C.3491-(Meher Rusi
Dalal v. Union of India), Hon’ble Apex Court holds that State
Government need not acquire its own interest in land. Following
observations are important here.
“15. In our view, the High Court has clearly
erred in setting aside the order of the Special
Land Acquisition Officer declining a reference. Itis settled law that in land acquisition proceedings
the Government cannot and does not acquire itsown interest. The interest which is acquired in
land acquisition proceedings are interest of 3rd
parties. This Court has as far back as in 1955, inthe case of the Collector of Bombay v.
Nusserwanji Rattanji Mistri and others, reported
in (1955) 1 SCR 1311 negatived a contentionthat when land is acquired valuation is made of
all interest thereon including the interest of the
Government. This Court held as follows :
“We are unable to accept his —- —- ——- — – – –……. …….. ……. ————— …… —————
but only for the acquisition of such interests in
the land as do not already belong to the
Government.”With these observations, we are in entire
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27agreement. When Government possesses an
interest in land which is the subject of acquisition
under the Act, that interest is itself outside such
acquisition, because there can be no question of
Government acquiring what is its own. Aninvestigation into the nature and value of that
interest will no doubt be necessary for
determining the compensation payable for theinterest outstanding in the claimants, but that
would not make it the subject of acquisition. The
language of Section 8 of Act No. VI of 1857 alsosupports this construction. Under that section,
the lands vest in the Government “free from all
other estates, rights, titles and interests,” whichmust clearly mean other than those possessed by
the Government. It is on this understanding of
the section that the award, Exhibit P, is framed.
The scheme of it is that the interests of theoccupants are ascertained and valued, and the
Government is directed to pay the compensation
fixed for them. There is no valuation of the rightof the Government to levy assessment on the
lands, and there is no award of compensation
therefor.”
Here, the Landowners have not shown their title to alleged excess
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28land lying on spot and have also not taken pains to plead or prove
any other interest or even legal possession. There is no effort even to
seek compensation for any such or other interest. The report of
DILR ie Court Commissioner does not show title of Landowners to
this excess land. It is apparent that when the property card did not
contain entire area lying on spot, Landowners ought to have brought
on record their title to it by producing sale deed by which they
purchased plot no. 1 in 1930. The settled possession or any right
flowing therefrom are not the facets which even find mention. In
absence of such an effort, it is obvious that contention that there is
only mathematical error and even plan prepared by Mr. Watkar for
department shows area in excess of what is recorded in property
card does not require more consideration. The Trial Court has
erroneously found the acquired area to be 59,870 Sq. Mtrs. or
6,44,440 Sq. feet. There is no material on record to demonstrate title
of Landowners to more than 54,168.86 Sq. Mtrs. of area. Hence,
they can claim compensation only for 54,168. 86 Sq. Mtrs. of land.
Point no. A above is answered accordingly.
17. As to Point No. B :- Compensation claimed as analogous
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29
to rental compensation for period from 1/1/1981 till 19/2/1984 is
the next dispute. Section 4 notification is published on 19.02.1984
and possession is taken on 06.08.1985. Perusal of judgment
reported in the case of R.L. Jain .vrs. D.D.A and others (supra),
relied upon by Shri Korde, learned Senior Counsel in this respect,
shows consideration of question whether State Government taking
possession before issuance of notification under Section 4[1] of the
Land Acquisition Act and of entitlement of landowners to claim
interest for such anterior period, in accordance with Section 34 of
the Act. This judgment is by Hon’ble Larger Bench and in
paragraph no.11, it has been observed that notification under
Section 4[1] of the Act is sine qua non for any proceedings under the
Act. In paragraph no.12, the words “such compensation” and “so
taking possession” used in Section 34 are interpreted. The words
“so taking possession” are found to make reference to Section 16 or
Section 17 and it has been concluded that if possession is taken prior
to issuance of notification under Section 4[1] of the Act, it cannot be
in accordance with Section 16 or Section 17, will be without any law
and consequently, cannot be recognized for the purposes of Act.
The words “from the date on which he took possession of land”
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30
appearing in Section 28 of the Act are also construed to mean
lawfully taking of possession under Section 16 of Section 17 of the
Act. The judgment reported at 1991 (1) SCC 262 (Shree Vijay
Cotton and Oil Mills Ltd. .vrs. State of Gujarat), is found not an
authority for proposition that where possession is taken before
issuance of notification under Section 4[1] of the Act, interest on
compensation amount can be awarded in accordance with Section
34 of the Act w.e.f. the date of taking possession. In paragraph
no.16, the earlier judgment reported at 1995 [2] SCC 142 (Special
Tahsildar (LA) .vrs. M.A. Jabbar), delivered by Hon’ble two Judges is
noted and in that judgment the Hon’ble Two Judges held that
claimant would not be entitled to such additional sum for period
anterior to publication of notification issued under Section 4[1] of
the Act. Then reference is made to other judgment by Hon’ble Two
Judges reported at 1995 [6] SCC 355 (Assistant Commissioner, Gadag
Sub Division, Gadag .vrs. Mathapathi Basavannewwa and others),
taking a contrary view and holding owner entitled to additional
amount at 12% p.a., has also been noted. The view taken in Special
Tahsildar (supra), is declared to be legally correct and view in case
of Assistant Commissioner (supra), is overruled. The judgment of
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31
larger Bench of Hon’ble Apex Court in the case of Sidappa Vasappa
Kauri .vrs. Special Land Acquisition Officer (supra), has also found the
view taken in the case of Assistant Commissioner (supra),
unsustainable. In paragraph no.16 of R.L. Jain vs. DDA and Others
(supra), the Larger Bench has found it just and equitable that
Collector, determines rate or damages for use of property to which
the landowner is entitled while determining the compensation
amount payable to land owners in respect of possession taken prior
to issuance of preliminary notification. The said view is held to find
support in Section 48 of the Act, and it has been further observed
that for delayed payment of such amount for pre-notification
possession, interest at bank rate should be awarded.
18. In Land Acquisition Officer and Asstt. Commissioner .vrs.
Hemanagouda and another( supra), the Hon’ble Two Judges of
Hon’ble Apex Court did not find it appropriate to deprive the
landowners of their right to receive rent or damages for use of
property prior to the date of acquisition. The landowners were
given liberty to raise claim therefor before the Collector. In State of
Maharashtra and others .vrs. Maimuna Banu and others (supra), the
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32
Hon’ble Two Judges have considered the grievance of similar placed
landowners. Possession was taken by private negotiations. Facts
mentioned in paragraph no.3 show that there non-payment of rental
compensation within time prescription indicated in the resolution
amounted to deprivation of valuable property and in paragraph no.8
it is noted that the Act does not provide for payment of any rental
compensation. In paragraph no.9 it was found illogical and
improper to turn a nelson’s eye to the factual position and the
Hon’ble Apex Court noted that in most of the cases, rental
compensation was not paid. In State Of Maharashtra vs. Bhaskar
Namdeo Wagh (supra), the Division Bench of this Court has found
claimants entitled to 12% component under Section 23[1-A] of the
Land Acquisition Act from the date of notification till the award is
passed by the Land Acquisition Officer. There also possession was
taken before issuance of notification under Section 4 of the Act.
There after noticing the judgment of Hon’ble Apex Court in case of
Special Tahsildar (supra), the Division Bench has granted 12%
component from the date of Section 4 notification i.e. from
10.07.1993 till the date of award i.e. 12.09.1995.
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33
19. In present facts, admittedly the possession was already
with the office of the Commissioner and that possession was taken
under C.P. and Berar House Rent Control Order, as premises were
allotted to said office by Rent Controller. It is no doubt true that
subsequently said allotment is set aside by this Court, but that is
after 06.08.1985. In the meanwhile, notification under Section 4
was published on 19.02.1984 and possession thereafter was taken
by invoking the urgency clause under Section 17 of the Land
Acquisition Act on 06.08.1985. It appears that second bungalow on
plot 1 was in possession of some third person and State took its
possession from him. The Trial Court therefore, has correctly
granted 12% component under Section 23[1-A] of the Act, from the
date of Section 4 notification till taking of possession i.e.
06.08.1985. Possession delivered earlier on 1/1/1981 was under
provisions of C.P. and Berar House Rent Control Order, 1949 and
therefore, as a tenant. That possession was not taken in pursuance
of any decision to acquire the said property. In this situation, claim
by landowners has to be either for rent for said period from a tenant
or then for mesne profits for wrongful dispossession. It cannot form
subject matter of adjudication by Land Acquisition Officer under the
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34
scheme of Land Acquisition Act. In all precedents looked into above
the taking of possession could have been related to Act and person
taking possession were not having any other character like that of
tenant. The judgments looked into above, clearly show that
entitlement to such amount can be only when possession is taken by
initiation of land acquisition proceedings i.e. after Section 4
notification. Division Bench of this Court in one matter has refused
to interfere as period was only of one month, however, that
judgment reported in the case of State Of Maharashtra vs. Bhaskar
Namdeo Wagh (supra), does not law down any law in this respect.
We, therefore, find claim for compensation for period from
01.01.1984 till 19.02.1984 in present proceedings misconceived.
Point No. B is answered accordingly.
20. As to Point No. C :- Next important question is about
market value of land on 19/2/1984.Both sides have adopted
hypothetical plotting method and hence, the procedure to be
followed here is not in doubt. Actual Layout in Plot no. 2 of SMS
Trust is admitted position and during arguments sale instances
therein only have been relied on as comparable. Before proceeding
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35
further, We find it appropriate to briefly mention the location of
Plot. no. 1 as also plot no. 2. Plot no. 1 is bounded on its south by
plot no. 2 and it has got abut 5 sides. Its 3 sides have direct frontage
on roads i.e., Mini bye pass, Chilam Shah Wali Road and a cross
road connecting these two roads. Though there is serious challenge
to reading of evidence of Shri Gandhi- witness of Landowners as
expert or then to his testimony on merits, plan drawn by him
showing the relative placement of these two plots and location of
sale instances looked into by him is not in dispute. Trial Court has
considered this angle and only challenge before us by Landowners
is to its not accepting 10% hike to plots in hypothetical layout in
plot no. 1 or to alleged superior placement of plot 1 due to it
altitude and commanding scene. Trial Court has treated sales in
SMS layout as comparable and there is no serious dispute about it.
Last report at Exh. 195 prepared by Shri Gandhi about 3 months
prior to his entering the witness box reveals that total road frontage
is 2200 running feet and out of it 1000 feet is on Calcutta -Bombay
part of mini bye-pass – part of national high-way. This plot is
situated in Camp-area which is classified as “A” area in Amravati
Municipal Corporation formed later. Residences of District Judge,
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36
Commissioner, Collector and bungalows for other judges are in the
vicinity in this area only across either the national high way or then
Chilam Shah Wali Road. Bungalows of retired army officers are on
west side. Being a corner plot, it has roads on three sides and being
a level plateau at top of Camp area, enjoys westerly breeze,
panoramic view and beautiful surroundings. Eastern view from
plateau remains permanently unobstructed. Offices of R.T.O.,
Collector, Sub-registrar, Post and Telegraph, Zilla Parishad, P.W.D.,
Town Planning are all within half kilometer. Court, Educational
Institutes including Medical College and District Hospital are within
1 to 2.5 Kms. Some shops are stated to be located near this plot and
main market is at distance of 2.5 Kms. This description shows that
except for its location at height, all other features are normal. It
appears to be not in populated but in calm and quiet surroundings.
What is market available for small such plots or land of this nature
in Amravati is not apparent. Evidence to show price offered by a
willing buyer and tendency to pay more by recognizing these
features as special advantages was therefore essential for treating it
as a feature necessitating any premium over and above market rate.
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37
21. The land to be valued here is huge piece and use of
hypothetical plotting method found necessary in paragraph 19 is not
in dispute. Though before the Trial Court several witnesses were
examined to bring on record the relevant sales, in arguments before
us the acceptance of sale instances from SMS layout by it is not even
assailed by any body. Arguments proceed on the base of those sale
instances only. Narration in this regard in paragraph 24 of its
judgment by it is not even whispered to be perverse. Thus its refusal
to look into sale -deeds at Exh. Nos. 171,171-A,177,177-A,172,
173,180 and 175 as the same are of plots located at a distance from
acquired land, does not call for any interference. In said paragraph
and in next one it has noticed that sale instances from just adjacent
plot no. 2 of SMS Layout are available and preferred to rely upon it.
However, Trial Court has used layout prepared by Shri Gandhi and
at Annex. D with his report Exh. 195 and discarded the layout plan
prepared by A.D.T.P. At Exh. 232. Shri Gandhi’s status is challenged
before us on several grounds, it is apparent that about 5782 Sq.
Mtrs. Area is required to be reduced from his drawing. Reason
assigned by Trial Court to prefer it is of better land utilization. This
is not demonstrated to be erroneous by the State. It therefore urged
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38
to reduce the land proportionately from area of each belt as arrived
at by Trial Court. When hypothetical layout prepared for State by
ADTP is found unacceptable for valid reasons and norm has to be
maximum land utilization to cater to the interest of Landowners, We
find it proper to accede to this argument of State.
22. Perusal of deposition of Anandprasad (Exh.75) on behalf
of SMS Trust shows that SMS layout is on comparatively larger piece
of land ad-measuring about 7,60,000 Sq. ft. and little nearer to City.
Plot no. 1 is beyond plot no. 2 and at a height above plot no. 2. Plot
no. 2 is not a plain ground but has a slope towards west. The
difference in elevation on eastern and western side is about 20 feet.
In 1981, SMS layout of 119 residential and 35 shop plots was
approved by Amravati Municipal council. Then Trust advertised the
plots. On 26/11/1981, Joint Charity Commissioner granted approval
to SMS Trust to sell 16 shops and 53 residential plots. Accordingly,
Sale deeds were executed by the Trust. From buyers who paid the
balance sale consideration late and sale deeds were therefore
executed little later, SMS Trust recovered interest for such delay as
per the orders of Joint Charity Commissioner. In response to 2nd
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39
advertisement published in December,1981, offers were received in
January, 1982. The Trust found these offers below their expectations
and hence, plots were re-advertised. Application of Trust to sell to
these offerers was allowed by the Joint Charity Commissioner on
17/4/1982. This witness has stated that plot no. 1 of Landowners is
superior because of its location. He has also exhibited the sale-deeds
and other documents like advertisement, certified copies of orders
of Joint Charity Commissioner and Index-II. His cross-examination
only brings on record no construction of any shop on any of its 35
plots from 1981 till 1995. His evidence has been recorded on
22/7/1996. Thus his sale instances are supported by relevant
documents which can not be doubted.
23. Whether date of agreements entered into by SMS Trust or
then the date of Sale-deeds by them is determinative is another
dispute. According to Shri Deo, learned Counsel it is date of sale
deed only and date of agreement can never be relevant. In State Of
Maharashtra vs. Punja Trambak Lahamage (supra), where the
Division bench rejected the demand claimants for enhancement for
the period of 6 months between the date of agreement and date of
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40
sale-deed. It is observed as under :–
“7. Coming to the other aspect, the claim raised on
behalf of the respondents in the State appeals is
that they would be entitled to enhanced
compensation because of the intervening periodbetween 31st January, 1989 and 4th July, 1989
i.e. the date of the agreement to sell and the date
of registration of the sale deed. This argument isbased on the premise that the parties had agreed
to sell the land ad-measuring 13 ares for
Rs.15,000/- as on the date of agreement to sell i.e.31st January, 1989 and the sale deed was
registered on 4th July, 1989, being Exhibit-74.
Computed on the basis that the market value ofthe land as on January, 1989 is Rs.1,15,385/- per
hectare and the increasing trend in the price of the
land as has been shown by the claimants, the
value of Rs.1,15,385/- should be increased todetermine the market value of the property as on
4-7-1989. This argument on behalf of the
claimants proceeds on a fallacy of fact and lawboth. It is a settled rule of law that agreement to
sell does not pass any title in the property.
Agreement to sell is an agreement between the
parties which would culminate into a registered
sale deed only after the obligations of each of the::: Downloaded on – 09/06/2013 17:46:56 :::
41parties to the agreement is fulfilled by them. Mere
fact that under the agreement to sell, a time is
given for payment of sale consideration by itself is
no evidence on the fact that the value of the
property will increase in the meanwhile. It is noteven necessary that every agreement to sell results
in execution of a registered sale deed. In simple
words, the agreement to sell neither creates anytitle in the property nor is a document by which
transfer of the property takes place between a
willing seller and a willing buyer.”
The Division Bench also considers the judgment of Hon’ble
Apex Court in AIR 2001 S.C. 2532 (State of Haryana v. Ram Singh),
where Hon’ble Apex Court finds the High Court in error in rejecting
Exhibits R/2 and R/3 as inadmissible only on the ground that the
parties to the documents had not been examined by the State. Law
stated is that a certified copy of a registered agreement for sale is
not inadmissible in evidence unless the parties to the document are
examined to prove it. It is pointed out that this does not however
preclude the Court from rejecting the transaction itself as being
malafide or sham provided such a challenge is laid before the Court.
In facts of said case, there was no allegation that the sales
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42
transactions relied upon did not represent genuine transactions. The
High Court was therefore in held error in refusing to consider the
transactions evidenced therein merely because the parties to the
documents were not examined. Therefore, the matter was remanded
to the High Court to take a decision on the market value of the
acquired land taking into consideration Exhibits R/2 and R/3 unless
the claimants were permitted by the High Court to establish their
inadmissibility.
24.. In AIR 1970 Guj. 91 (Collector, Baroda and another, v.
Haridas Maganlal Parikh and others), the Division Bench was
required to consider whether an agreement of sale was a relevant
and good piece of evidence before the Court for the ascertainment
of the market value of the land comprised thereunder and later on
acquired by the Government. Having noted that an agreement of
sale did not in fact create interest in the property as contemplated
under Section 54 of the Transfer of Property Act, Gujrat High Court
held that on that account alone, it cannot be eliminated from being
considered as a relevant and good piece of evidence if established as
a bonafide transaction between a willing purchaser and a willing
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43
vendor. It points out decision of the Hon’ble Supreme Court in AIR
1967 SC. 465– (Raghubans Narain Singh v. Uttar Pradesh Govt.),
where even an offer made by a person for the purchase of any
property and though not accepted, was treated to be a relevant piece
of evidence, and if that evidence is accepted as reliable, it can well
serve as a good piece of evidence for determining the market value
on that basis. In that case, the claimant led the evidence of one
Zaidi, a Deputy Collector, prior to his retirement had written two
letters to the claimant dated October 14, 1945 and November 20,
1945 expressing his desire to purchase the land in question. He had
offered Rs. 18,000/-, but that offer was not accepted by the claimant
who wanted Rs. 24,000/- as price. This part of the evidence was
accepted by the District Judge and on that basis he valued the land
at Rs. 18,000/-. In appeal, the High Court at Allahabad took a view
that such evidence could not afford a true test about the value of the
property. The claimant preferred an appeal to the Supreme Court
against that decision and there while dealing with that part of the
evidence about an offer made by witness Zaidi for the purchase of
that property sought to be relied upon, the Supreme Court has
observed that an offer does not come within the category of sales
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44
and purchases but nonetheless if a person who had made an offer
himself gives evidence such evidence is relevant in that it is evidence
that in his opinion that land was of a certain value. This part of the
evidence was accepted by the Supreme Court and it upheld the view
of the District Judge as against that of the High Court in that case.
Gujrat High Court then finds that :-
” It also appears that an agreement to sell in
respect of any such property would be a relevantmatter and can be used in relation to fixing the
market value of the land. Such an agreement to
sell stands on a stronger and better footing thanwhat a onesided offer can help in determining the
price of the land under acquisition. The
agreement of sale is a bilateral contract
enforceable in law. The vendor agrees to sell theproperty and the purchaser agrees to purchase the
same as per the conditions set out in the
agreement. There is an agreement of price inrespect of the property comprised thereunder.
What remains to be done is to have a deed passed
in respect of the said property as per the terms or
conditions set out in that agreement. In our view,
therefore, such an agreement of sale, apart from::: Downloaded on – 09/06/2013 17:46:56 :::
45the same being perfectly a relevant piece of
evidence, can also be a basis for fixing the market
value of the land under acquisition provided of
course it is found to be a bonafide transaction
between a willing or a prudent purchaser and awilling vendor.”
25. The relevant sale deeds pressed into service to show
escalation are either within few days of agreements or then with gap
of about 6 months. Pawan Agrawal (Exh. 187) has deposed about
two sales of plot no. 30 in SMS layout, first by SMS Trust to Smt.
Meera Agrawal registered on 28/5/1982 as per agreement dated
26/11/1981 and later by Mrs. Meera to Vijay Agrawal on
11/1/1984. These sale deeds are at Exh. 102 and 188. It shows
annual escalation calculated between 26/11/1981 to 11/1/1984 at
23.72%. Here time interval between agreement and actual sale by
SMS is of 6 months and 2 days. Pramod Bathra (Exh. 192) has
spoken of purchase of plot no. 42 in SMS layout on 5/12/1981 as
per agreement dated 26/11/1981 and its sale by him on 23/6/1982
registered on 17/8/1982 to Smt. Usha Malani. These sale-deeds are
at Exhs. 114 and 193. Appreciation here is 34.78% between
26/11/1981 to 23/6/1982. Here time interval between agreement
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46
and actual sale by SMS is of 9 days. At Exh. 189 is evidence of
Avinash Deshmukh and he deposes about purchase and sale of plot
no. 51. It is purchased from SMS Trust as per agreement dated
26/11/1981 on 17/12/1981 and sold on 19/6/1984 to Govind
Rathod of which deed is registered on 19/6/1984 itself i.e., after
Section 4 notification. Annual appreciation in this case is 31.21%
by looking to period from 26/11/1981 to 19/6/1984. These sale
deeds are at Ex. 123 and 190. Here time interval between
agreement and actual sale by SMS is of 21 days. Looking to this
time gap and facts at hand, it is apparent that the answer to the
question about relevant date either way does not very materially
affect the determination of escalation and market price. Here, the
Joint Charity Commissioner has given sanctions under Section 36 of
Bombay Public Trust Act to SMS Trust on 26/11/1981 and
17/4/1982. As held in Arunodaya Prefab vs. M.D. Kambli – Misc.
Petition 415 and 485 of 1974 decided on 17/11/1978 by learned
Single Judge of this Court, Joint Charity Commissioner has to satisfy
himself about the adequacy of price offered and here these orders
are not in any way dispute. Even sales, whether by SMS Trust to
initial buyers or then by such purchasers from it to subsequently are
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47
not challenged as sham or bogus transactions. We therefore find that
reliance on the agreement date to compute escalation in present
matter and therefore acceptance of agreements for that purpose
does not violate any legal provisions. In State Of Maharashtra vs.
Punja Trambak Lahamage (supra) (para 7), claimant – landowners
were demanding escalated value between agreement date 31
January 1989 and date of sale deed i.e., 4th July 1989. Thus, their
own document of agreement was being capitalized for said claim
and observations of this Court need to be understood in this
background. This judgment nowhere lays down that even a third
party genuine agreement for sale – a bonafide transaction can not be
a relevant piece of evidence. Value to be given to it is obviously a
question dependent on facts of each case.
26. Except Shri Gandhi other evidence on valuation of land is
of Owner Madhaolal , LAO Shri Deshmukh and no other evidence is
placed before us. Madhaolal has only said that valuation and area
of acquired land is less. He chose to rely upon the report of expert.
In cross, he could not give the year of construction of two buildings
on acquired property. He stated that that there were no documents
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48
except one on record to support the area of acquired land as claimed
by them. He accepted that distance between land acquired and
Amravati market was about 6 Kms. He had no knowledge whether
said land had non-agricultural potential. He was not aware whether
it formed last corner of town on north-east side. Thus he has not
placed his oath either to give market value of land or then of
structures. Evidence of Shri Gandhi can be looked into little later.
Sale instances of SMS layout are proved by examining the
purchasers also. As there is no dispute about these instances, We are
not referring to that oral evidence here. Exh. 219 is the evidence of
then Sub-divisional Officer and LAO Shri N.K. Deshmukh. He
functioned as such from 1986 to 1988. He got structures valued
through PWD while land through Assistant Director of Town
Planning i.e., ADTP. He also looked into sale instances. He has
deposed that acquired land was on outskirts of Amravati and its last
Nazul sheet. There was no development or any residential locality in
the vicinity. He has also stated that in 1998 also there was no
construction on shopping plots in SMS layout. He has then spoken of
preparation of hypothetical layout, comparison with plots in SMS
layout and recourse to belting method. He has stated that average
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rate of SMS layout was Rs. 90 per Sq. Mtr. and he awarded Rs. 100
for acquired land for first belt, Rs. 85 per Sq. Meter for 2nd belt and
Rs. 72/- for third belt. His cross reveals his reluctance to answer
inconvenient questions. He also accepted that letter for joint
measurement was issued on 18/2/1984 to office of DILR and it was
started on very same day. He agreed that the owners who were at
Bombay therefore had no time to remain present. He further stated
that as sale instances used by him were within one year of Section 4
notification, he did not give 10% annual hike. He did not accept that
purpose of deduction on account of deferment factor was to
compensate developer whose money remained blocked. He stated
that plot no. 2 is slightly nearer to city than plot no. 1. He agreed
that plot no. 1 is at higher level than plot no. 2 but then did not
accept that it was superior. Though this witness has been cross
examined at length and because of his attitude, several questions
were required to noted by Trial Court in question–answer form, We
are not going into details thereof. The contention of learned Senior
Advocate that this witness was biased need no consideration here as
witness was the land acquisition officer himself and was trying to
justify ways and means adopted by him. Those ways and means
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were on record and as Trial Court needed to arrive at market value
independently, said attitude is not decisive either way. We only wish
to note that procedure followed by him to work out average rate of
land in SMS layout is unsustainable. He admits that he has followed
belting method but he considered the mean of rate of first row i.e.,
shopping plots and rate of last row of residential plots in SMS
layout to determine said average and used it for hypothetical layout
in acquired land. Size and number of first belt plots having access
directly to national high-way, location of last belt plots, their
number and distance from national high-way. SMS Layout has
frontage of 579 feet on national high-way where it has laid total 35
shop plots of 30 ft. X 15 ft. Behind this are the rows of plots for
residences. Depth of this layout is 1259 feet. There are total 6 cross
roads and about 5 conservancy lanes till last row. The open space in
layout is at other end of this layout. Thus due to inherent
differences, such average-method used by LAO can not be of any
assistance here.
27. Shri Gandhi in his evidence at Exh. 194. He is graduate in
civil engineering practicing as Architect, Structural Engineer and
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Valuer as claimed for 35 years. He has stated that he is recognized
valuer by finance ministry of Union of India. He has confirmed
contents of report dated 21 August 1995 and it came to be
exhibited as Exh. 195. He has considered area as 59870 Sq. Mtrs. as
disclosed by Court Commissioner. He has then pointed out how
hypothetical layout of ADTP did not provide for maximum land
utilization. He also explained charts with his report and procedure
for valuation undertaken by him. He pointed out comparable sales
and how he added 25% hike annually and gave weightage of 10%
to plots in acquired lands. Then he pointed out decrease of 33%
from price of belt 1 plot for belt 2 and 50% for belt 3 plots. Rs. 25/-
per Sq. foot is rate for first belt plots, Rs. 16.50 for plots in second
belt and Rs. 12.50 per Sq. foot for plots in third belt. These details
are in paras 12.00 to 14.00 of Exh. 195. In said paragraphs, he has
also attempted to justify his figures by using sale instances. He, in
cross examination, has attempted to show how his layout is legal
and absence of need to leave lanes for conservancy. He has also
stated that it is not necessary to provide for common sanitation
system. He also accepted his earlier reports dated 17/1/1985 at Exh.
204 and dated 27/10/1985 at Exh. 205. This working is on the sale
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instances and as already noted above, it is futile to go in more
details of his evidence in this regard as sale instances in SMS layout
only need scrutiny and use in the light of settled legal position.
Proximity in time and area are the tests vital to reach valuation.
28. Trial Court has granted annual hike of 10% after finding
out rate by using comparable sale instances from SMS Layout.
Perusal of various binding precedents in this connection show that
normally such hike is presumed to be 10%. Effort before this Court is
to justify said grant at 25% by Shri Gandhi and Annex. G with his
report at Exh. 195 is heavily banked upon by Landowners. Trial
Court has rejected oral evidence of Prabhakar Desmukh(Exh. 178),
Imrahimkhan Dannekhan(Exh. 179), Balkrishna Dande (Exh.181),
Vinod Padiya (Exh. 182) and sale deeds at Exh. 171,171-A, 177,
177-A, 172,173,180 and 175 as the same are about plots located at
some distance. Four of these sales pertaining to two plots ie plot no.
81 and 16 located in sheet no. 19 figure in Annex. G. Undisputed
calculations by Shri Gandhi in relation to these two plots show
67.34% and 50.22% per year hike on these two plots. It is obvious
that when sale instances from adjacent SMS layout are available,
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reference to distant sales is really not warranted. Plan filed by Shri
Gandhi at Annex. F to show sale instances utilized by him also show
the distance. The other plots are located in already developed areas
in City and hence rejection of those instances or then inclination of
Trial Court to rely upon sales in SMS layout can not be faulted with.
It is not the case of Landowners that any other similarly situated
area at outskirts of City was also showing similar appreciation.
Pawan Agrawal (Exh. 187) has deposed about two sales of plot no.
30 area 3910 Sq. ft in SMS layout, first by SMS Trust to his wife
Smt. Meera Agrawal on 28/5/1982 and later by Mrs. Meera to Vijay
Agrawal on 11/1/1984. These sale deeds are at Exh. 102 and 188.
It shows annual escalation of 23.72%. Pramod Bathra (Exh. 192)
has spoken of purchase of plot no. 42 area 4165 Sq. ft. in SMS
layout on 5/12/1981 and its sale by him on 23/6/1982 to Smt. Usha
Malani. These sale-deeds are at Exhs. 114 and 193. Appreciation
here is 34.78%. At Exh. 189 is evidence of Avinash Deshmukh and
he deposes about purchase of plot 51 area 4569.5 Sq. ft. and sale
of its part 1779.5 Sq. ft by his mother. Plot no. 51 is purchased from
SMS Trust as per agreement dated 26/11/1981 on 17/12/1981 and
its part is sold on 19/6/1984 to Shri Rathod as per deed registered
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on same day. Annual appreciation in this case is worked out at
31.21%. These 3 instances on an average show appreciation of
about 29% in SMS Layout. Trial Court has arrived at annual
appreciation of 10% due to binding precedents. However, when
these three undisputed instances are available on record, it is clear
that there was no scope for adhering to presumption of 10% annual
appreciation. There is nothing on record to hold that these three
instances can not be accepted as representative of market trends.
These instances are of residential plots either in second or third belt
in SMS Layout. However, Landowners plot no. 1 is situated further
away from town and at a height as compared to land of SMS layout.
Evidence on record also shows that there is no shop or commercial
development in the area till 1996 at-least. This appreciation in SMS
Layout is not for shop plots and hence half of it can be safely used
here. Hence, We are inclined to accept appreciation at 15% over and
above SMS rate instead of 25% as canvassed by Landowners. More
reasons for this course will appear little later in this judgment.
29. Shri Deo, learned counsel has contended that rate of
shop-plots in SMS layout can not be applied to residential plots in
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Landowners hypothetical layout. However, shop-plots in SMS Layout
are of 450 Sq. Ft. and buyers have purchased more that one such
plot at a time. These plots are also on mini by pass i.e., National
Highway. Till at least 1996, no shops had come up on any of these
shop-plots. Moreover, the front plots in hypothetical layout have
access either to same National High-way or other public road. The
sale instances of second belt plots in SMS layout i.e., of plots not
touching National Highway but having opening on internal layout
roads are also available. Plot no. 12 ad-measuring 3200 Sq. ft. is sold
by SMS to Smt. Deshmukh on 20/6/1984 as per sanction given by
Joint Charity Commissioner on 26/11/1981 at Rs. 11.88 per sq. ft.
Plot nos. 17 to 20 ad-measuring 10785 Sq. ft. are sold by SMS to
M/s Pooja Builders on 28/6/1984 as per sanction given by Joint
Charity Commissioner on 17/4/1982 at Rs. 12.05 per sq. ft. Plot nos.
21 to 23 ad-measuring 11615 Sq. ft. are sold by SMS to M/s Swati
Corporation on 22/6/1983 as per sanction given by Joint Charity
Commissioner on 17/4/1982 at Rs. 11.62 per sq. ft. Plot no. 29 ad-
measuring 4725 Sq. ft. is sold by SMS to Shri M.M. Sikchi and
Others on 30/6/1984 as per sanction given by Joint Charity
Commissioner on 17/4/1982 at Rs. 11.64 per sq. ft. Plot no. 34 ad-
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measuring 3890.7 Sq. ft. is sold by SMS to Smt. K.D. Vaidya on
20/8/1984 at Rs. 10.79 per sq. ft. This plot is from third belt and
date of sanction given by Joint Charity Commissioner could not be
verified by us. But as sale is by public trust and there are only two
sanction orders as deposed by Anandprasad (Exh. 75), the date has
to be either 26/11/1981 or 17/4/1982. There are no instances on
record of further sales in which these plots are again resold to find
out appreciation. Hence, if We treat average plot rate to be Rs. 11.75
per sq. ft. in November 1981 and apply rate of 15% annual
appreciation arrived at above for period of about 24 months, the rate
works out to Rs. 15.25 per Sq. ft. on 19/2/1984 for second belt plots
in SMS layout. In November, 1981, the average rate of shop plots or
belt 1 plots in SMS is found to be Rs. 14.80 per sq. ft. by Trial Court.
Thus then there was difference of about Rs. 3 per sq. ft. then. Rate of
shop plots then was about 25% more than belt 2 residential plots.
If this proportion is maintained and Rs. 15.25 is increased
similarly to arrive at price of belt 1 plots i.e., shop plots in SMS
Layout, it comes to Rs. 19.00 per sq. ft. Whether this shop plot rate
in SMS Layout can be adopted for first belt residential plots in
Landowners Layout is the issue. For their first belt plots LAO has
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granted rate of Rs. 9.29 per sq. ft., for belt II area at Rs. 7.90 per sq.
ft. and for 3rd belt area plots rate allowed is Rs. 6.69 per sq. ft. Thus
there is 18% rise on 3rd belt to derive price of belt 2 plots and
17.59% rise on 2nd belt to reach price of first belt plots. We have
reached the rate of Rs. 15.25 per Sq. ft. on 19/2/1984 for second
belt plots in SMS layout. If this is proportionately increased by
17.59%, it becomes Rs. 17.93 per Sq. Ft. for first belt residential
plots (hypothetical) in SMS Layout as per LAO. However, Shri
Gandhi has computed value of 2nd belt plots at 2/3rd of the first belt.
If We increase the rate of Rs. 15.25 by 1/3rd, We get rate of Rs.
20.00 per Sq. ft. for these first belt plots (residential) in SMS. Thus
in this hypothetical situation, rate of shop plots in SMS Layout on
19/2/1984 reached is Rs. 19.00 per Sq. Ft. ie. less than residential
rate. Now question is what would a customer prefer! A mixed
layout like SMS or then purely residential one like hypothetical
layout here? Exercise in next paragraph demonstrates rate of Rs.
19.90 for first belt plots. It therefore brings forth the difference of
Rs.1.97 per Sq. ft. on LAO determination. We are looking at the
matter almost 27 years after Section 4 notification. The possible
error if rate of Rs. 19.90 is held correct, may be of 10%. When the
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recourse has to be to guesstimate, it is apparent that market value
can not be determined with mathematical precision. The evidence
on record shows that though SMS Trust laid out shop plots, no shop
activities had commenced till 1996 i.e., at-least for 15 years after
said Layout was sanctioned. Whether People purchased shop plots,
three or four together, perhaps for use as residential plots only?
Trial Court has applied rate of Rs. 19.60 per Sq. ft. for first belt plots
in Landowners hypothetical layout. Learned Senior Advocate has
fairly pointed out the calculation error committed by the Trial Court
in the process. He has successfully shown that if said mistake is
corrected, these rates are required to be lowered to Rs.18.10 for first
belt, Rs. 15.38 for second belt and 13.08 per Sq.Ft. for
third/remaining belt plots. Though Trial Court is in error as it failed
to note that time-gap was of 2 years and 85 days only, in view of
the discussion above, We are not in position to find its rates either
exorbitant or arbitrary.
30. As SMS sale instances are to be applied with 15% annual
hike, We can also safely utilize average calculated at Rs. 14.80 per
Sq. feet by Trial Court in paragraph 29 of its judgment for first belt
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plots for our consideration. Section 4 notification is issued on
19/2/1984 and sale deeds of plot no. 1 to 17 in SMS layout are
registered on 5/12/1981. Agreements for all these shop plots are on
2/11/1981. Hence period from 2/11/1981 to 19/2/1984 of 2 years
3 months and 16 days is the period for which appreciation at 15%
annually needs to be worked out. It works out to 34.48% or 34.50%.
Thus with this hike, average rate as on 19/2/1984 comes to Rs.
19.90. Trial Court has applied such rate erroneously calculated by it
@ Rs. 19.60 to first belt plots in Landowners layout. Shri Gandhi
after this stage gave weightage of 10% to plots in first belt in
acquired land and has arrived at his rate of second belt plots by
reducing this rate by 33% and of third belt plots by decreasing it by
50%. Trial Court has reduced 15% from its rate of first belt and
further 15% for third belt, to calculate rates of second and third
belt respectively. We do not find any relevant material on record to
justify this additional weightage of 10% or its demand by
Landowners. As propriety of this exercise applying 15% factor
undertaken by Trial Court is not seriously in dispute before us, if it is
adopted and accordingly We find Rs. 16.90 and Rs.13.90
respectively to be the rates of second and third belt plots in
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Landowners hypothetical layout. Landowners have neither argued
nor sought any specific increase in this rate. In this situation, We
independently accept the rate as awarded at Rs. 19.60 for first belt
plots, Rs. 16.66 for second belt plots and Rs. 13.80 per sq. ft. for
third belt plots as used by the Trial Court. The consideration of
material directly above obviates need to delve more into evidence of
Shri Deshmukh and Shri Gandhi or into rival contentions in this
regard. Appeal of State to reduce it further does not hold any water.
31. Now the belting exercise needs evaluation. Trial Court
has treated 95,060 Sq. Ft. abutting National Highway as First belt
plots. Those plots are plot nos. 1 to 14 and 15 to 17. Plots 18 to 32
situated at other periphery of the hypothetical layout (drawing of
Shri Gandhi) are valued as second belt plots. Area of these plots
97,020 Sq. ft. Other plots bounded on outer side by belt 1 or 2 plots
having access on internal layout roads are third belt plots. Their
total area is 2,88,440 Sq. ft. Thus Trial Court has considered
4,80,520 Sq. Ft. as plotable land available for actual sale out of total
area 6,44,440 Sq. ft. of plot no. 1. In his drawing Shri Gandhi has
considered plots 1 to 32 at periphery of layout on public roads as
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belt 1 plots. Plots behind belt 1 plots as belt 2 plots. 11 plots forming
boundary of SMS Layout and near big bungalow, including plot of
big bungalow, are shown as third belt. Total area of plot 1 looked
into by him is 6,44,440 Sq. ft. and plot area under three belts is
4,80,520 Sq. ft. Remaining land is for public utility. Land on which
structures are erected are also shown as plots in his layout. If total
land used by Trial Court and Shri Gandhi is presumed to be correct,
it is apparent that reasons given by Trial Court for rejecting Layout
of ADTP can not be faulted with. Layout of Shri Gandhi is not
demonstrated to be contrary to any building bye-laws of Municipal
Council or development control rules. Being hypothetical, it was not
necessary for Landowners to get it sanctioned and State ought to
have brought on record the irregularities or illegalities in it while
Shri Gandhi was subjected to cross examination. As the total area
considered by Landowners and Trial Court is required to be
reduced, State has sought proportionate reduction from all three
belt-areas as arrived at by Trial Court.
32. We have already disagreed with the finding that the
acquired area was/is 59,870 Sq. Mtrs. or 6,44,440 Sq. feet. Not
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more than 54,168.86 Sq. Mtrs. of area could have been utilized by
Landowners or Trial Court to prepare a hypothetical layout. ADTP
has contemplated layout on land as acquired i.e., on 54,168 Sq.
Mtrs. Utilizing the equation that 59,870 Sq. Mtrs. is equal to
6,44,440 Sq. feet, about 5702 Sq. Mtrs. (67,836 Sq. Ft) additional
land is required to be proportionately deleted from 3 belts.
Substance in challenge to area of each belt therefore needs to be
verified first. Mini by pass road is National highway and Chilamshah
Wali Road, though a public road, was not a tar road but a kuchha
road then. It therefore was at rear of the layout but with potential to
come on public road if there was plan to construct a pucca tar road
in its place in near future. Kuchha road can not be given more
importance that an internal road in hypothetical layout. Because of
this possibility only, Trial Court has recognized it as second belt. We
therefore can not yield to argument of learned Senior Advocate to
treat plots 18 to 32 shown in yellow colour and valued as 2 nd belt
plots by Trial Court to be at-least of an intermediate belt between
category 1 and 2. We also can not accept the contention to value
plots 53 to 63 located just behind plots on national highway as
second belt plots. Efforts made by him to show plot no. 63 at-least as
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in second belt can not be countenanced. We fail to see any logic in
recognizing plots situated at back of highway touch plots as second
belt plots as those plots have to use internal layout roads only and
are not situated differently than third belt plots demarcated in his
drawing by Shri Gandhi. Uniform treatment as third belt to all such
plots encircled by first and second belt plots by Trial Court appears
more reasonable. We therefore proceed to reduce proportionately
from each belt the area used in excess by Trial Court.
33. Proportionate deductions have to aim to adjust 5702 Sq.
Mtrs. (67,836 Sq. Ft) of area. It forms about 10.49 th part of 59,870
Sq. Mtrs. or 9.49th portion of 6,44,440 Sq. feet. We therefore reduce
about 1o% area form entire chart of land utilization proportionately
from lands left open or for roads and each belt. After such an
exercise, area acquired and becoming available in first belt is
95060-09506=85,554 Sq. ft., in second belt it is 97020-
09702=87,318 Sq. ft. and in third belt land available turns out to
be 288440-028844=2,59,596 Sq. ft. Rate per square foot arrived at
above for three belts is required to be applied to these three areas
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respectively. It thus leads to following :–
Belt. Area Rate. Valuation.
First Belt 85,554 Sq. ft. X Rs. 19.60 = 1676858.40
Second belt 87,318 Sq. ft X Rs. 16.66 = 1454717.88
Third belt 2,59,596 Sq. ft. X Rs. 13.80 = 3582424.80
Thus, total market value of entire land including land on which
structures stand is Rs. 6714001.08 67,14,001/- i.e., Rs. Sixty-Seven
Lac Fourteen Thousand and One only. Thus there is no reason to
consider separately the extent of land required to support the
structures by invoking relevant building bye-laws or development
control rules and FSI/FAR and add its value again to this land costs.
34. Deductions towards developments and deferred value
are to be carried out from this figure of Rs. 67,14,001/-only. In Exh.
204, Shri Gandhi has given details of development expenses worth
Rs. 10,93,000/-. He has also taken deferred value at 6% for 3 years.
In Exh. 205 submitted after gap of about 9 months from Exh. 204,
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he has attempted to set off deferral value adjustment against annual
escalation. In Exh. 195, expenditure towards developer’s profit and
legal selling expenses is mentioned for the first time and its figure
disclosed is 11,02,000/-only. In Exh. 204, he shows following
expenses:–
Work. Cost in Rs.
- Construction of 90,350 sq. ft. Roads
and asphalting at Rs. 6.50 Per Sq. ft.
ig 5,87,275.00
- Garden development 65,650 Sq. ft.
@ Rs. 2.50 Per Sq. Ft. 1,64,125.00
- Storm Water drain, 1000 Rmtrs.
@ Rs. 200 per Rmtrs. 2,00,000.00
- Street lighting 80,000.00
- Architects charges @ 6% 61,884.00
Total liability thus computed by him in it was Rs. 10,93,284/-
rounded up to Rs.10,93,000/-only. As against this, in report Exh.
195 prepared in 1996 on the eve of entering the witness box, the
expenses disclosed in paragraph 18.50 are as under :–
Work. Cost in Rs.
- Construction of water bound macadam road
99,480 Sq. Ft. @ Rs. 1 per Sq. ft. 99,480.00
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- Garden development. 32,000.00
- 40 mm water main 2500 Rft. @ Rs. 13 per
Running feet. 32,500.00
- Street light poles with cable, 36 in number
@ Rs. 2000/-per no. 72,000.00
- Storm water trenches job 05,000.00
- Architects charges @ 6% 14,458.00.
Total of all these items comes to Rs. 2,55,438/- and it has been
rounded up to Rs. 2,55,000/-in this Exhibit. Its paragraph 19.00
deals with developer’s profit and legal selling expenses. It is worked
out at 12% of gross realization of estimated value of plots i.e., of
Rs.91,78,480/-. Said profit is shown to be Rs. 11,02,000/-. Thus
from Rs. 91,78,480/-, Rs.2,55,000/-and Rs. 11,02,000/- are
subtracted by Shri Gandhi to arrive at rounded up net land value of
Rs. 78,21,000/-.
35. Explanation given by Shri Gandhi is in 1996 when he saw
adjacent layout and developments therein, he applied very same
standards to his hypothetical layout. However, there is no
explanation as to why the developer’s profit worth Rs. 11,02,000/-
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could not be reflected in Exh. 204 or 205. His cross-examination
particularly in paragraph 16 shows that he was aware of absence of
municipal drain or sewerage main and has asserted that individual
plot has to provide for it. In Exh. 195 there is no head of expenditure
on storm water drain while in Exh. 204 he has made provision of Rs.
2,00,000/- therefor. He has denied need of common sanitation
system. He has accepted that in layout, he has not shown any
service lane or common sanitation plot. We therefore find this
material sufficient not to accept his working of development
expenditure. Similarly, when law requires market value to be
worked out on section 4 notification date, the layout is presumed to
be complete in all respects on said day and price rise or escalation
thereafter is totally irrelevant in hypothetical plotting method. His
attempt to set of deferral value against future escalation is therefore
erroneous. Hence, his estimate of development expenditure can not
be acted upon. Development expenses and developer’s profit
brought on record by State through its witness Shri Deshmukh (Exh.
219) is only Rs. 7,99,824/-. In award State through him (LAO)
only gave Rs. 3,71,504/- for first belt plots at Rs. 9.29 per sq. ft., Rs.
10,25,678/- for belt II area at Rs. 7.90 per sq. ft. and Rs.
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14,06,858/- for 3rd belt area plots at Rs. 6.69 per sq. ft. Total
compensation worked out was Rs.28,04,040/-. With value of
structures, trees and statutory benefits , award granted Landowners
total compensation of Rs. 34,67,030/-. Out of total land value, about
25% was roughly taken as development expenditure by LAO Shri
Deshmukh. In government layout plots shown are 94 while Shri
Gandhi shows 63 plots. Government layout shows road area to be
24% while in Shri Gandhi’s drawings it is 15%. It is not the case of
Landowners that other layouts in the vicinity were sanctioned
without proposal of tar road or sanitation or drainage. But then
when number of plots and area under road in both layout are
compared, it does not lead to any certain solution. Shri Deshmukh
has attempted to work out average rate of plot per Sq. ft. in SMS
Layout and there due to less frontage on national highway, area of
plots in belt 1 (shop plots) are less as compared to such frontage
available in Landowners hypothetical layout. In this situation, We
find it safe to go by the case of Government and calculations of Shri
Gandhi to compute development expenditure. When Rs.10,93,000/-
envisaged as development expenditure in Exh. 204 is loaded with
developer’s profit of Rs. 11,02,000/- , it works out to Rs. 21,95,000/-
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only. As layout area is reduced by about 10%, We also reduce this
figure by 10% and thus it totals to Rs. 19,75,550/-. Thus developer
expenditure worked out is about 29%. This is only amount to be
spent for development activities from consideration received from
hypothetical buyers and land is already set apart for it. Hence, value
proportionately of such land is not included in it. In paragraph 40 of
impugned judgment, the Trial Court has held that the future
escalation balances the deferral value and hence, has not found it
necessary to make any provision for it. This reasoning is found
wrong above by us. Shri Gandhi had made provision of 6% per year
for three years for said purpose in Exh. 204 in January 1985 before
withdrawing it in October, 1985. We accept the same proportion
here. Total land value worked out by us is Rs. 67,14,001/- only.
Subtracting Rs.1975550/- from it leaves sum of Rs. 4738451/-
which Landowners get in lump-sum as compensation which
otherwise would have been blocked for future at least 3 years. 6% of
Rs. 4738451/- works out to Rs. 8,59,921/-for three years. When half
of this figure i.e., Rs. 426460/-is added to Rs. 1975550/-, total
comes to Rs. 2402010/-. Subtraction of this total form Rs.
67,14,001/-, leaves balance of Rs. 43,11,991/- which therefore is
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net land value. Point No. C is answered accordingly.
36. As to Point No. D : Compensation of two residences i.e.
big bungalow and second bungalow now need consideration.
Landowners have solely relied upon their expert. How to approach
evidence of said expert Shri Gandhi is also a moot question. In AIR
1995 SC. 840 – (Special Land Acquisition Officer v. Sri Siddappa
Omanna Tumari) :-
” 7. When the Collector makes the reference to the
Court, he is enjoined by Section 19 to state thegrounds on which he had determined the amount
of compensation if the objection raised as to the
acceptance of award of the Collector under
Section 11 by the claimant was as regards theamount of compensation awarded for the land
thereunder. The Collector has to state the grounds
on which he had determined the amount ofcompensation where the objection raised by the
claimant in his application for reference under
Section 18 was as to inadequacy of compensation
allowed by the award under Section 11, as
required by sub-section (2) of Section 18 itself.
Therefore, the legislative scheme contained in
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Sections 12, 18 and 19 while on the one hand
entitles the claimant not to accept the award
made under Section 11 as to the amount of
compensation determined as payable for his
acquired land and seek a reference to the court for
determination of the amount of compensation
payable for his land, on the other hand requires
him to make good before the Court the objection
raised by him as regards the inadequacy of the
amount of compensation allowed for his land
under the award made under Section 11, with a
view to enable the Court to determine the amount
of compensation exceeding the amount of
compensation allowed by the award under Section
11, be it by reference to the improbabilities
inherent in the award itself or on the evidence
aliunde adduced by him
to that effect. That is
why, the position of a claimant in a reference
before the Court, is considered to be that of the
plaintiff in a suit requiring him to discharge the
initial burden of proving that the amount of
compensation determined in the award under
Section 11 was inadequate, the same having not
been determined on the basis of relevant material
and by application of correct principles of
valuation, either with reference to the contents of
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the award itself or with reference to other
evidence aliunde adduced before the Court.
Therefore, if the initial burden of proving the
amount of compensation allowed in the award of
the Collector was inadequate, is not discharged,
the award of the Collector which is made final
and conclusive evidence under Section 12, as
regards matters contained therein will stand
unaffected. But if the claimant, succeeds in
proving that the amount determined under the
award of the Collector was inadequate, the
burden of proving the correctness of the award
shifts on to the Collector who has to adduce
sufficient evidence in that behalf to sustain such
award. Hence, the Court which is required to
decide the reference made to it under Section 18
of the Act, cannot determine the amount of
compensation payable to the claimant for his land
exceeding the amount determined in the award of
the Collector made under Section 11 for the same
land, unless it gets over the finality and conclusive
evidentiary value attributed to it under Section
12, by recording a finding on consideration of
relevant material therein that the amount of
compensation determined
under the award was
inadequate for the reasons that weighed with it.
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15. It has become a matter of common
occurrence with the claimants who seek enhanced
compensation for their acquired lands from court
to produce the reports of valuation of their lands
in court purported to have been prepared by the
experts. No doubt, courts can act on such expert
evidence in determining the market value of the
acquired lands, but the court having regard to
the fact that experts will have prepared the
valuation reports in the court and will depose in
support of such reports, at the instance of the
claimants, must with care and caution examine
such reports and evidence given in support
thereof. Whenever valuation report made by an
expert is produced in court, the opinion on the
value of the acquired land given by such expert
can be of no assistance in determining the
market value of such land, unless such opinion
is formed on relevant factual data or material,
which is also produced before the court and
proved to be genuine and reliable, as any other
evidence. Besides, if the method of valuation of
acquired land adopted by the expert in his report
is found to be not in consonance with the
recognized methods of valuation of similar lands,
then also, the opinion expressed in his report
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and his evidence can be of no real assistance to
the court in determining the market value of the
acquired land. Since the exercise which will
have been done by the expert in arriving at the
market value of the land in his report on the basis
of factual data bearing on such valuation, will be
similar to that to be undertaken by the court. In
determining the market value of the acquired
land, it can no doubt receive assistance from such
report, if it is rightly done and the data on which
the report is based is placed before the court and
its authenticity is established.
16. Therefore, when the valuation report of an
acquired land is made by an expert on the basis of
prices fetched or to be fetched by sale deeds or
agreements to sell relating to the very acquired
lands or the lands in the vicinity need arises for
the court to examine and be satisfied about the
authenticity of such documents and the truth of
their contents and the normal circumstances in
which they had come into existence and further
the correct method adopted in preparation of the
report, before acting on such report for
determining the market value of the acquired
land. The opinion expressed in the report that the
author of the report has made the valuation of the
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acquired lands on the basis of his past experience
of valuation of such lands should never weigh
with the court in the matter of determination of
market value of the acquired lands, for such
assertions by themselves cannot be substituted for
evidence on which it ought to be based and the
method or valuation adaptable in such report.
17. Therefore, when a report of an expert is got
produced by a claimant before the
court giving
market value of the acquired lands, the court
may, choose to act upon such report for
determination of the amount of compensation
payable for the acquired lands, if the data or the
material on the basis of which such report is
based is produced before the Court and the
authenticity of the same is made good and the
method of valuation adopted therein is correct.”
37. In Prabhakar Raghunath Patil v. State of Maharashtra,
(2010) 13 SCC 107, Hon’ble Apex Court has appreciated the
evidence of expert on structures. Reliance was placed by the
appellants on the evidence of the expert witness and also on the
circular dated 3-1-1991 issued by the Chief Engineer, Amravati in
respect of cost of construction in justification of their prayer for the
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increase of the valuation of the structure. Under that circular the
cost of residential building was fixed for Ground floor at Rs. 2800
per square metre, for First floor at Rs. 2200 per square metre and for
Second floor at Rs. 2200 per square metre. Insofar as the opinion of
the expert is concerned, he had not given any specific evidence as to
what was the age of the structure when it was notified for
acquisition. Hon’ble Court held that without making enquiry
regarding the age of the structure, it would be difficult to assess its
valuation and, therefore, the expert was not justified in not making
an assessment with regard to the age of the structure. He was
faulted on the basic principle of assessment of valuation of a
construction. Hon’ble Court also noted that the cost of construction
of the ground floor is always on the higher side while the cost of
construction of first floor and second floor is on the lower side. The
expert examined had also ignored the said fact going to the root of
the valuation and for that also the evidence of the expert was held
not reliable. The only evidence that, therefore, was available before
Apex Court was the circular issued by the Chief Engineer, Amravati
dated 3-1-1991 regarding district schedule rates in respect of cost of
construction with reference to the Building and Construction
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Department of the State of Maharashtra. This High Court, had held
that the aforesaid evidence for the year 1991 in District Amravati
could not be a safe guide for the determination of the compensation
of the structure acquired in the year 1983. Hon’ble Apex Court
noted that the practice of issuing such circular by the Chief Engineer
was for the first time introduced in the year 1991 and no such
practice was in existence in the year 1983. But since there was at
least some evidence indicating the district schedule rates for the
standing structure in the year 1991, Hon’ble Court undertook the
exercise of relating it back to the year 1983 after pointing out how
and why it must be undertaken with great care and caution. The
High Court, while referring to the oral evidence adduced by the
expert, had stated found the fine condition of the structures and the
superior quality of materials used for construction of the same
beyond doubt. Hence, despite the ambiguity surrounding the age of
the structures, as the condition and quality of the building was never
called into question. Therefore, Hon’ble Apex Court raised the
compensation awarded. It also observed that the margin of error in
comparing schedule rates for construction of buildings in the same
district would be lesser than in attempting to use future sale
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transactions as exemplars. Hon’ble Apex Court considered a
deduction of 60% (approximate) from the said valuation of the cost
of construction in 1991 appropriate, and accordingly arrived at a
compensation of 1700 per square metre for the structure. This
percentage of deduction at 60% is based on the building cost index
between 1983 and 1991 published by the Central Public Works
Department. Thus Hon’ble Apex Court did not accept the report of
expert but relied upon other evidence/material brought on record by
parties to determine the compensation for structure.
38. It is obvious that data of type and nature looked into
by Shri Gandhi while determining the market price of plot no. 1 or
then charts prepared by him to substantiate that exercise is not
available when one comes to his report on valuation of structures.
There he blindly accepts 1930 – the year of purchase of properties by
his client i.e., Landowners, as year of construction and decides the
age to be 54 as on 19/2/1984. He then points out approximate
future life of the structures and treating total life thereof to be 85
years, he applies depreciation. He claims that he has used full
replacement costs method to arrive at 1984 value of structures.
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Here, we may point out that in P
rabhakar Raghunath Patil v. State of
Maharashtra, (supra) Hon’ble Apex Court has made following
observations on principles relevant for deciding the full
replacement cost of structures:–
“13. In Administrator General of W.B. v. Collector-
(1988) 2 SCC 150=AIR 1988 Sc 943, this Court heldthat:
“17. … building value is estimated on the basis of the
prime cost or replacement cost less depreciation. Therate of depreciation is, generally, arrived at by
dividing the cost of construction (less the salvage value
at the end of the period of utility) by the number ofyears of utility of the building. The factors that
prolong the life and utility of the building, such asgood maintenance, necessarily influence and bring
down the rate of depreciation.”
39. Admittedly, following buildings stand on the acquired
land – One big bungalow; One small bungalow, One barrack type
building, Two toilet blocks and Mali Shed. Award under Section 11,
grants land owners sum of Rs. 3,78,000/- towards these structures,
and before Reference Court they had claimed compensation of Rs.
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18,22,000/-. They thus, claimed Rs. 14,44,000/- more towards
these structures. Before us, learned Senior Counsel has restricted his
arguments to only two structures namely – Big bungalow and small
bungalow. Evidence available on record is of Government Valuer –
Shri Manoharrao Gulabrao Kale at Exh.217 and his valuation report
is at Exh.218. Land owners have relied upon evidence of Shri
Gandhi and his report at Exh.195.
40. The Reference Court/Trial Court has found that Shri
Kale, fixed the rate of construction of ground floor of big bungalow
at Rs.1150/- per square meter and of first floor at Rs.1050/- per
square meter. For small bungalow, he determined the rate at
Rs.900/- per square meter. The valuation was claimed to be made
on the basis of CSR rates of 1984. It is not in dispute that these
rates are not placed on record, or even figure anywhere in his report
Exh.218. His cross examination reveals that as measurements of
existing structures were available with him, he was given time to
point out how on the basis of CSR rates a particular valuation was
arrived at by him. He got two adjournments also to substantiate his
calculations. On one occasion CSR Rates were shown to him and he
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was called upon to justify his calculations, but he failed to produce
anything on record to show correctness of his calculations by
applying CSR Rates. Trial Court therefore, has refused to believe his
report at Exh.218. The Trial Court has also noted the fact that he
did not consider the Porch and Balcony for construction valuation
and no reason was assigned for excluding the same. Then it found
that he had deducted sum of Rs. 1,50,000/- from valuation of
structure i.e. of Big bungalow on account of renovation expenses.
No document could be produced to show that such expenses were
actually incurred. Taking over all view of the matter, it did not rely
upon the evidence of Shri Kale. For same reasons it also refused to
accept evidence of the Land Acquisition Officer Shri Deshmukh.
41. In paragraph no.49 of its judgment, the Trial
Court has referred to the evidence of Shri Gandhi. It found that he
has looked into the construction of Porch and Balconies and arrived
at construction cost by using data collected by him, his personal
experience and CSR Rates for cross checking. It has given
importance to admission by Shri Manohar Kale in his cross
examination that Shri Gandhi has correctly applied the depreciation
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method. It further looked into the cross examination and found that
assertions of Shri Gandhi were not shaken and hence, in view of
these 5-6 lines, it proceeded to accept his evidence and relied upon
his figure of Rs. 17,57,721/- as value of big bungalow, small
bungalow, out houses, Porch, Balconies, Mali Shed and lavatory box.
It deducted an amount of Rs. 3,78,000/- already awarded by the
Land Acquisition Officer and fixed the compensation payable in this
respect at Rs. 13,79,721/-. It also found that there was one Well,
but then it was without water and hence of no use, but a
disadvantage. It therefore, did not allow land owners anything
towards value of that Well.
42. The Trial Court itself has relied upon the judgment
reported at 1997 (2) Land Acquisition Laws 537 (Indian Rarearth
Ltd. .vrs. Elsave Fernandis). It noted that as per said judgment, it
was incumbent upon the valuation officer to show details of
valuation in his report. If his report is supported by proper data, it
would help the Court in finding out whether building and other
structures were properly valued or not, and to show that valuation
exercise was impartial and not arbitrary. It found that neither the
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Land Acquisition Officer Shri Deshmukh nor Shri Kale, had produced
relevant material. However, one fails to understand why the Trial
Court could not apply very same standard while appreciating the
evidence of Shri Gandhi.
43. This brings us to consideration of evidence of Shri
Gandhi on these two buildings i.e., big building and small building.
In his examination-in-chief he has given his qualifications and
thereafter has stated that he was practicing as Architect, Structural
Engineer and Valuer for about 35 years and as on date on which his
deposition was recorded, i.e. on 07.12.1996. He has stated that he
was fellow of Institution of Valuers and a registered valuer with the
Ministry of Finance, Government of India. He was panel valuer of
Life Insurance Company and of Bombay High Court for immovable
properties, and had worked as an Editor of a Technical Journal by
name “Indian Valuer” for a duration of 6 years. He claimed that
during practice he planned, designed and supervised number of
residential and industrial buildings and fixed valuation of properties
in rent fixation matters and also for taxation and loan advance
purposes and land acquisition purposes. He also stated that he had
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appeared in the Court as an expert. He confirmed statement made
by him in his report, and that report came to be exhibited as
Exh.195. His cross-examination reveals in paragraph 22 that he
inspected two buildings on 21.03.1984 and he had no knowledge
whether main building was then repaired already by government.
Thereafter, he visited the buildings on 11.07.1984 and 27.12.1988.
He accepted that the building was very old having old structure and
he could not trace any document about the date of construction. He
accepted that he did not mention CSR rates in his report and his
report was based upon his personal experience and data collected by
him. He further volunteered that he used CSR to cross check and,
therefore, CSR is not mentioned in his report. He adopted lump-
sum per square feet prices as per his experience for valuation. He
accepted various method, but stated that those methods were not for
arriving at valuation of building, but for valuation of property which
included land and building both. He further stated that he adopted
rates on the basis of his own experience and he has mentioned those
rates applicable to built up floor area basis. He included porch and
galleries also in built up area. He accepted that porch of building
has no plinth and he calculated total area of porch as built up area.
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He has given same average rate for porch as also for projecting
balconies. He accepted that cost of first floor of any building is less
then ground floor. He denied that porch and balconies needed to be
excluded from cost estimation and he also denied that cost of
projecting structure was also included and built up area. He
accepted that because of thicker walls, carpet area is reduced. He
accepted that he gave weightage of 35% in respect of big building.
He further stated that he had not prepared detailed estimate of
acquired building and he considered depreciation of about 22% for
all the buildings. He denied that rate of depreciation is about 1%
per year of the building cost and he stated that he applied “sinking
fund of depreciation method”. He took 1930 as base year for
construction. He explained the term “sinking fund” to mean that
funds required to be set aside every year to recoup capital invested
in the building. No document was supplied to him by land owners
for arriving at annual fund and according to him it was not
necessary. The sinking fund method and calculation was based
upon assumption. He further stated that other methods i.e. Straight
Line Method, Constant Percentage Basis and Qualify Survey Method
were not scientific. He further stated that he had not verified the
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Government Method of valuation, and therefore, could not say
whether the rate given by him was higher than the government rate.
He claimed that he determined the valuation on the basis of his
experience and on the basis of the market rate prevailing in
Amravati City.
44. His (Gandhi’s) report at Exh.195, in it’s paragraph
no.5.00 shows type of construction of Bungalow No.1 as also
Bungalow No.2. He has given general description like, old
conventional bungalow built in Palatial style with number of large
sized rooms at each floor, high ceiling, large size doors and
windows of Burmah teak, which was than available freely, but very
rate at the time of preparation of report. He has pointed out that the
structure was load bearing and external walls were 21 inches thick.
He has also given the length and breadth of brick pillars, he has
pointed out teak wood paneled windows with iron fittings and oil
paint, guard bars, different type of teak wood doors. Some doors
were paneled and some were partly glazed and partly paneled.
Upper floor doors and windows have curved glazed ornamental fan
lights and have brass fittings. No specific number of doors or
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windows is disclosed by him. All wooden work is stated to be
painted. Floor is stated to be of Shahabad Ladi on both the floors.
Steel joists with ladi and brick coba on first floor and terrace of first
floor is finished with patent stone paving of water proof coba. Use
of ornamental concrete balusters provided with top decorative
coping for a terraces to add to architectural beauty , is also
mentioned. A concrete staircase with teak wood railing and first
floor roof of Manglori tiled with teak wood trusses, teak wood
perlins and teak wood boarding, is also mentioned. Best timber is
used for roof work. It is mentioned that the bungalow is in good
condition, due to use of quality material and good workmanship.
There was no indication of white ants and timber was not decayed.
Temporary sheds open on sides were provided at ground level
touching walls of main building and it was having wooden bulley
posts and asbestos corrugated sheets roof with natural ground, as
its floor. A balcony covered at top with C.I. Jali and teak wood hand
rail, is also mentioned. Electrical wiring is stated to be open type
with wiring on teak wood battens. A toilet block with pipe fittings,
waste line is connected to septic tank, is also noted. The report also
mentions provision of standard plumbing and water supply fittings.
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45. About bungalow no.2, report of Shri Gandhi discloses
that it is a load bearing structure with 9 inches plinth and about 17
feet height. It’s side verandah has front height of 10 feet above
plinth, 8 feet wide paved and a uncovered platform is also provided
around the main building at plinth level. It has brick walls which
are about 15 inches thick and teak wood paneled or partly glazed
and partly paneled doors are fixed. Windows have teak wood with
ornamental curve fan light and fly proof jali. Burmah teak is used
for wood work. It’s roof is of manglore tiles with teak wood perlins
and teak wood boarding. Verandah has manglore tile roof with balli
rafter. Entrance porch has manglore tile roof with teak wood
trusses. Flooring is of plain cement tiles and some rooms have patent
stone floor. Cooking platform is provided in kitchen. W.C. and bath
are connected to waste lines and to septic tanks and soak pit.
Standard electrical wiring work is also done.
46. This discussion shows that except for giving the details of
structure, the report does not give other necessary background
which might have looked into by said expert witness. He has
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undertaken the exercise of valuation in paragraph no.20 and there
he has given calculations of area of bungalow no.1. The ground
floor is stated to 5582 sq. ft. with porch and first floor is stated to be
3374 sq. ft with Balcony. Total floor area is given as 8956 sq. ft. He
has then in next paragraph given rates felt by him as fair and
reasonable cost of construction of a new (full replacement cost) such
structure for Bungalow no.1. He has applied rate of Rs. 165/- per
sq. ft. for bungalow no. 1 and for Bungalow no.2 he has disclosed
rate of Rs.150/- per sq. ft. In paragraph thereafter, he has
mentioned that the structures were built some time in the year 1930
and hence at the time of acquisition their age was 54 years. He has
mentioned that all structures were in sound condition and actually
in use and would last for a tenure of 30-40 years. Total life of the
structure is, therefore, taken to be 85 years by him. He has then
mentioned sinking fund method for depreciation and then
proceeded to undertake mathematical calculations. He has arrived
at depreciated value or present value of bungalow no.1 at
Rs.11,60,064/- and of Bungalow no.2 at Rs. 3,41,722/-.
47. His exercise shows that he has applied same rate for
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ground floor and first floor of big bungalow. He has applied that
rate even for structures which had no plinth, though in his evidence
he has mentioned that he has cross-checked it by using CSR, there is
no such mention anywhere in the said report at Exh.195. He has
also mentioned that he has looked into the market rates prevailing
in Amravati City, but that statement also no where figures in his
report at Exh.195. The report itself is prepared on 21.08.1995 and
recording of his evidence has commenced on 07.12.1996. In
absence of either CSR rates or then rates verified from Amravati
market on record, it is difficult to appreciate the rates worked out
and applied by him. As already noted above, in paragraph
no.20.20 of his report, he suddenly mentions the rate per square feet
applied by him, without disclosing any basis therefor. Even if his
experience is to be looked into, he has not pointed out it’s use while
preparing report at Exh.195. The report has obviously been
obtained by the landowners for using in Court matters and Shri
Gandhi was aware of its purpose. It cannot be forgotten that he had
appeared before land acquisition officer, when that officer had
undertaken efforts to find out market value of the acquired property.
He has not given the rates of bricks or wood prevailing in 1984, rate
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of cement or steel then prevailing and even labour charges are not
mentioned. He has not pointed out regular maintenance. It is,
therefore, obvious that in absence of this relevant material, it is not
possible to find out correctness or otherwise of his claim in Exh.195
in this regard. An expert like him has to describe the property in
requisite details and thereafter mention the prevailing market
position also, so as to enable the Court or the authority to ascertain
the correctness of his stand by appreciating his line of application of
mind. Here, though CSR rates were made available to one witness of
State Government during his cross-examination and effort has been
made to discard him, Landowners have not brought that rate on
record and Shri Gandhi, has not pointed out that CSR also provided
rates for same or similar type of construction. On the contrary, in
paragraph no.26, this witness has stated that he has given positive
weightage of 35% in respect of building no.1. During arguments, it
was stated that the CSR rates consider cement and iron at controlled
rate and not at open market rate. However, this fact and its use it
also not apparent in report at Exh.195. The report, therefore,
appears to be prepared only on the basis of the assumptions which
the expert claims as supported by his experience, however, law does
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not permit use of said report for the purpose of determination of
valuation. Landowners and said expert Shri Gandhi, ought to have
produced relevant basic data, so as to enable the trial Court and
thereafter, this Court to understand the nature of exercise
undertaken by him and to verify it. We find that for reasons
recorded by it to reject the report of Shri Kale, the trial Court also
ought to have rejected the report of Shri Gandhi.
48. Here, Shri Gandhi does not disclose search made by
him to find out age of construction and he remains satisfied with
accepting year of purchase as year of construction. He has not given
any data to show the contemporary rates of construction then
prevalent in that area. He does not find it necessary to refer to CSR
rates or any material gathered by him for arriving at his rates. Thus
he refuses to supply anything to enable State to cross check his
claim or to Court to evaluate it. In ultimate analysis, one has to only
accept his word or the his experience to support that word. He
includes structures without plinth and also values first floor at
wrong rates. Depreciation rate applied by him is also not sustainable
in the light of above verdict of Hon’ble Apex Court. We find that
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initial burden to show that valuation of structures by LAO is
incorrect has itself not been discharged by Landowners. By pointing
out cross examination of Shri Kale, effort was made to show that he
could not and did not choose to substantiate exercise undertaken
therein. It is not sufficient to rebut the presumption attached to
award under Section 12 of Act. Moreover that also does not mean
that Landowners automatically become entitled to something more
towards costs of construction or as compensation for structures.
Appreciation of evidence and approach of Court in such matters can
be gathered from judgment in case of P. Ram Reddy and Others vs.
Land Acquisition Officer, Hyderabad Development Authority (supra).
Hon’ble Apex Court has held that in land acquisition references
before Civil Courts, when witnesses give oral evidence in support of
the claims of claimants for higher compensation the in-effective
cross-examination of such witnesses, is not an uncommon feature if
regard is had to the manner in which claims for enhanced
compensation in land acquisition cases are defended in courts on
behalf of the State. It is observed that if the courts were to accept
such statements of witnesses as true merely because they are not
subjected to cross-examination or effective cross-examination or
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because evidence in rebuttal thereof has not been adduced, it would
amount to doling out public money to the claimants far in excess of
their legitimate entitlement for just compensation payable for their
lands. If such situation is prevented by courts dealing with claims for
compensation by testing the statements of witnesses for claimants on
the basis of probabilities, the Courts will have performed the duty
justly expected of them. Hence, no Court which tests the oral
evidence of the claimants on the touch-stone of probabilities calling
into aid, its experience of life, men and matters and find such
evidence to be untrustworthy, the same cannot be found fault with
In Bhagwan Singh vs. State of Punjab(I) (supra) (Para 22), the Hon’ble
Apex Court states that resort to Section 145 of Evidence Act would
only be necessary if the witness ‘denies’ that he made the former
statement. In that event it would be necessary to prove that he did,
and ‘if the former statement was reduced to writing,’ then Section
145 requires that his attention must be drawn to those parts which
are to be used for contradiction. But that position does not arise
when the witness admits the former statement. In such a case all
that is necessary is to look to the former statement of which no
further proof is necessary, because of the admission that it was
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made. Here, We find that Shri Gandhi admits all his reports at Exh.
204,205 and Exh.195. We accordingly have refused to accept his
evidence and report on valuation of structures. The land value also
has been worked out by us independently. In this situation, as
landowners have failed to bring anything on record to show that the
valuation of big bungalow or other bungalow as per report at
Exh.195, or then Exh. 195 can be looked into and have failed to
substantiate their demand for enhancement of compensation on that
account, no relief in that regard can be given to them. Merely
because the valuation by the Land Acquisition Officer and grant of
compensation for structures is not found to be substantiated,
burden cast by law on Landowners is not discharged. Hence, the
land owners cannot claim additional compensation for these two
structures.
49. We will still briefly consider the valuation exercise
undertaken by Shri kale and Shri Gandhi. Later has used rate of Rs.
165/-per Sq. ft. flat for entire big bungalow and Rs. 150/-per sq. ft.
for bungalow no. 2 to reach its total replacement cost. This rate is
same in Ex. 204 as also Exh. 195. He has used 4.5% on age 54 years
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of both these structures to calculate depreciation. There is no
explanation or justification for using this figure or the calculating
less depreciation in his evidence or report. When he takes total life
of both these structures to be 85 years , replacement costs per year
work out to Rs. 17,385/-for big bungalow and Rs. 5,121/-for
second bungalow. Rs. 9,38,799/- is therefore depreciation for big
bungalow for 54 years and Rs. 2,76,543/- is therefore total
depreciation for bungalow 2. Even if the salvage value at the end of
the period of utility of 85 years is presumed “nil”, still the when Rs.
9,38,799/- is deducted from Rs. 14,77,740/-, Rs. 5,38,961/- works
out to be the value of big bungalow as against Rs. 11,60,064/-stated
by Shri Gandhi . Similarly, when Rs. 2,76,543/-is reduced from Rs.
4,35,300/-, Rs.1,58,757/- is the cost of bungalow no. 2 while he
mentions it to be Rs. 3,41,722/-. Thus total replacement costs of
both these bungalows comes to Rs. 6,97,718/- only. Thus even
presuming or believing entire exercise of Shri Gandhi, the total costs
of both these buildings is Rs.6,97,718/- while he takes it at
Rs.15,01,786/-. His method or calculation do not find any support
at-least on record. Though his report shows that both these
bungalows have completed more than half of their life, depreciation
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shown by him is not proportionate as he has used full replacement
cost method. For both bungalows, depreciation is little less than
25% of replacement cost. Depreciation amount is 21.49% of the
value worked out by him. The factors that prolong the life and utility
of the building, such as good maintenance, necessarily influence and
bring down the rate of depreciation are not on record. There is no
evidence of timely or annual repairs. On the contrary, State had
claimed adjustment of Rs. 1,50,000/- spent by it on
renovation/repairs of big bungalow and Trial Court has not
accepted it. Methodology of Shri Gandhi runs counter to similar
principles illustrated in “Administrator Genl. of West Bengal v.
Collector, Varanasi”(supra) by Hon’ble Apex Court.
50. Shri Kale had worked out cost of ground floor of big
bungalow at Rs. 5,98,900/-and of first floor at Rs. 2,94,000/-. Value
of bungalow no. 2 reached by him is 2,47,980/- only. He has then
taken the age of building to be 69 years and thereafter claims to
have calculated depreciation as per page 14.40 of civil engineering
hand-book. His computation does not disclose the total life period
looked into by him. However, it appears to be 100 years. His
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exercise is not accepted for valid reasons by Trial Court and also
does not help in determination of market value. But as burden has
not been discharged by the Landowners, the grant in award can not
be disturbed. His cross examination is not sufficient to prove any
procedural or other error in method adopted by him or its result.
LAO had accepted his calculations and then deducted Rs. 1,50,000/-
allegedly spent on renovation by State. He therefore awarded Rs.
3,78,000/- as compensation towards structures. Trial Court has set
aside this sum of Rs. 1,50,000/- as said expenditure has not been
established at all. Evidence on record does not establish any such
sum of Rs. 1,50,000/- or any other sum spent on renovation. We
therefore maintain this finding of Trial Court and grant Landowners
Rs. 5,28,000/- towards the structures. Point No. D is answered
accordingly.
51. As to Point No. E :- As a result of this discussion, We find
the quantum of compensation payable to Landowners under various
heads as under :–
A. Towards Lands:- Rs. 4311991.00. ::: Downloaded on - 09/06/2013 17:46:58 ::: 99 B- Towards structures :- Maintained as per award. This includes Rs. 22,120/-towards fence but nothing towards Trees. Rs. 528000.00. C- Towards Trees:- Rs. 2990.00. Sub-Total of A to C = Rs. 4842981.00. D- 30% solatium u/S 23(2) of the Act on Rs. 4842981. = Rs. 1452894.00. Total of A to D = Rs. 6295875.00. Landowners have already received = Rs. 2030116.00. E. Net amount of compensation payable on plot no. 1 (Land+Structure+Trees+ = Rs. 4265759.00. Solatium) F. Addl. component at 12% on Rs. 4842981/- from 19/2/1984 till 6/8/1985 i.e., for 1 year and 5 months and 19 days (533 days) = Rs. 848649.00. Compensation towards plot 1 and Rental compensation - E and F. = Rs. 5114408.00. ::: Downloaded on - 09/06/2013 17:46:58 ::: 100
Interest at 9% on this sum of Rs. 51,14,408/- from 6/8/1985 to
5/8/1986 and thereafter, at 15% till date of its payment to
Landowners.
If Landowners have already recovered anything in excess
of what We have found them entitled to, State Government is free to
recover the same as per law with 15% interest on it from date on
which it was paid by it till its recovery back by State Government. .
Accordingly, We proceed to pass following order:–
ORDER.
Landowners are held entitled to receive :–
1. Rs. 42,65,759.00. (Forty Two Lac Sixty-Five Thousand Seven
Hundred Fifty Nine Only) towards acquired lands, structures,
trees and solatium.
2. Rs. 8,48,649.00 (Eight Lac Forty Eight Thousand Six Hundred
Forty Nine only) towards 12% additional component under
Section 23(1-A) of Act.
3. Interest at 9% on above sum of Rs. 51,14,408.00 (Fifty One
Lac Fourteen Thousand Four Hundred and Eight Only) from
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6/8/1985 to 5/8/1986 and thereafter at 15% till date of its
payment to Landowners.
4. Appeal of State is partly allowed and that of Landowners is
also dismissed. However, in the circumstances, parties to bear
costs as incurred.
5. If Landowners have already recovered anything in excess from
State , State Government is free to recover that excess sum as
per law with 15% interest on it from date on which it was
paid to Landowners till its recovery back by State
Government.
6. Judgment dated 31/12/1999 delivered by Joint Civil Judge,
Senior Division, Amravati in Reference proceedings land
acquisition case 13 of 1988 is accordingly modified and
substituted.
7. Decree be drawn accordingly in both matters.
JUDGE JUDGE
Dragon.
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