IN THE HIGH COURT OF KERALA AT ERNAKULAM
LA.App..No. 682 of 2004()
1. MUVATTUPUZHA MUNICIPALITY,
... Petitioner
Vs
1. VARKEY, S/O. KURUVILLA BABU,
... Respondent
2. MOLLY, W/O. VARKEY,
3. STATE OF KERALA.
For Petitioner :SRI.V.M.KURIAN
For Respondent :SRI.T.P.KELU NAMBIAR (SR.)
The Hon'ble MR. Justice PIUS C.KURIAKOSE
The Hon'ble MR. Justice K.SURENDRA MOHAN
Dated :11/12/2009
O R D E R
PIUS C.KURIAKOSE & K.SURENDRA MOHAN, JJ.
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L.A.A. NOS: 682/04 & CO11/05, 175/04 & CO9/05,750/04,
718/04 &CO 33/05, 763/04, 630/04& CO 38/05, 628/04,
678/05 & CO 118/05, 735/04, 955/04,141/05 and
629/04 & CO 42/05
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Dated this the 11th December, 2009.
JUDGMENT
SURENDRA MOHAN,
An extent of 50.91 Ares (125.74 cents) of land in
Velloorkunnam Village of Muvattupuzha Taluk comprised in
different survey numbers was acquired by the State, on the
requisitioning of the Muvattupuzha Municipality, for the expansion
of the Municipal Stadium and formation of a ring road around the
stadium. The Section 4(1) notification is dated 6.12.1996. The
Land Acquisition Officer verified various documents relating to
similar lands executed during the relevant period and fixed the land
value of the properties. For the purpose, he categorized the lands
into two categories, those having road access as the first category
and those without road access as the second category. Relying on
sale deed No: 4059/1994 of Muvattupuzha Sub Registry the Land
Acquisition Officer awarded land value at the rate of Rs.17,000/-
per Are (Rs.6,880 per cent) to the lands in category I and
Rs.15,400/- per Are (6,232 per cent) to the lands in category II,
LAA 682/04 etc. 2
those without road access. Dissatisfied with the land value
awarded by the Land Acquisition Officer the claimants sought a
reference to the Court and thus the matter was referred to the Sub
Court, Muvattupuzha, for considering the claim for enhanced
compensation made by the claimants.
2. Before the Reference Court the claimants adduced
evidence in support of their claims. The evidence in the case
consists of the oral evidence of A.Ws 1 to 5 and Exts. A1 to A9
documents on the side of the claimants. On the side of the
respondents, Exts. R1 to R17 documents were marked and R.W.1
was examined as a witness. Exts. C1 commission report and C1(a)
plan have been marked as Court Exhibits.
3. After an evaluation of the evidence on record, the Sub
Court, Muvattupuzha as per a common judgment dated
31.10.2003 enhanced and fixed the land value of the acquired
properties at a uniform rate of Rs.60,000/- per Are (Rs.24,282 per
cent). The Court thus did away with the categorization adopted by
the Land Acquisition Officer. The Reference Court took note of the
fact that the acquired properties were all lying in close proximity to
LAA 682/04 etc. 3
the properties covered by Exts. A1 to A4, A7 & A8 sale deeds.
Though the records described the properties as wet lands, the
Reference Court, on the basis of the report of the Advocate
Commissioner found that the lands were dry lands with the only
disadvantage that they were lying at levels substantially lower than
the road. The lands were also found to be barren. However, the
properties were found to enjoy locational advantages by virtue of
their proximity to all the important establishments in the
Muvattupuzha Municipality. The Muvattupuzha Municipality which
is the Requisitioning Authority has preferred appeals against the
common judgment of the Reference Court contending that the
award was excessive. The Government has also preferred separate
appeals against the said judgment. The claimants have preferred
cross objections contending that the enhanced land value granted
by the reference Court also did not reflect the real market value of
the acquired properties. They have claimed land value at the rate
of Rs.2,00,000/- per cent. All the appeals and cross objections are
considered together for the reason that the questions that arise for
determination are all same.
LAA 682/04 etc. 4
4. As per order dated 31.3.2009 in I.A.1219 of 2009 in
L.A.A.NO: 682 of 2004 an Advocate Commissioner was appointed
from this Court to make a local inspection of the properties
acquired in these appeals and to make a comparison of the said
properties with the properties acquired as per Exts. A7 and A8
proceedings. Accordingly an Advocate Commissioner conducted a
local inspection on 6.4.2009 and has submitted a report, supported
by rough sketch of the properties that were compared. The said
Commission report and the plan are received in evidence and are
marked as Exts. C2 and C2(a) respectively. Exts. C2 and C2(a) also
endorse the locational importance of the acquired properties.
Nevertheless, it is reported that the acquired properties are lying at
substantially lower levels than the main road. The properties
acquired as per Exts. A7 and A8 are also reported to be not similar
to the acquired properties. Exts. A7 and A8 properties are found
by the Commissioner to be enjoying better advantages than the
acquired properties.
5. The learned Senior Govt. Pleader as well as the counsel for
the Municipality attacked the findings of the Reference Court
LAA 682/04 etc. 5
contending that the Reference Court seriously erred in discarding
the categorization adopted by the Land Acquisition Officer. It is
pointed out that the lands acquired are all `Nilam’ or paddy fields
according to the records. They are all properties which remain
submerged during rainy season. According to the counsel they are
lying barren only for the reason that paddy cultivation has been
discontinued by the owners during the recent past. It is contended
that the properties being 10 to 12 ft. below the road level did not
possess any road access at all though they were by the side of the
road. Exts.A1 and A2 sale deeds are attacked by the counsel
pointing out that they were both post notification documents. The
properties covered by Exts. A3 & A4 sale deeds according to the
counsel were not comparable to the acquired property, since they
were both garden lands facing the National Highway. According to
the counsel the sale deed that was the subject matter of Ext.A6
order of this Court in C.M.A.5/2000 was not produced before the
reference Court. Nor was the agreement for sale produced.
Therefore, the counsel contended that the Reference Court went
wrong in placing reliance on the said document. With respect to
LAA 682/04 etc. 6
Exts. A7 and A8 properties, the contention is that they related to
small bits of land that were acquired by the Municipality for
constructing the TVS-Keecheripady road . The said lands were
located 500 mtrs. away from the acquired property and were not
comparable properties for the reason that the said properties were
facing the M.C.Road and located 500 mtrs. away. The counsel,
therefore, contended that there was no reliable evidence available
in the case for granting enhanced land value for the acquired
properties. Since the burden of proving that they were entitled to
enhanced land value was entirely on the claimants, they were not
entitled to any enhancement for the reason that they had not
discharged the said burden by adducing any acceptable evidence.
6. The counsel for the claimants on the other hand
contended that the land value awarded by the Reference Court was
too low. The Reference Court failed to take into account the clear
and unambiguous data that were available from the evidence
produced in the case to show that the land value was at least
Rs.60,000/- per cent. According to the counsel, Exts.A1 and A2
sale deeds were documents by which the Muvattupuzha
LAA 682/04 etc. 7
Municipality itself had purchased properties for a consideration of
Rs.50,000/- per cent. The properties according to the claimants are
only 300 mtrs. away from the acquired property. Both the
properties are located in the same village. The properties covered
by Exts. A3 and A4 sale deeds relate to a property adjoining the
acquired land. In the said documents also the consideration shown
is Rs.50,000/- per cent. Exts. A7 and A8 are proceedings of the
Land Acquisition Officer in LAC No: 17/1998 and connected cases.
The properties involved in the said cases are 425 Mtrs. away from
the acquired property. They were acquired for the formation of a
new road. The land value awarded by the Land Acquisition Officer
for the acquired land was Rs.1,00,576/- per Are which corresponds
to Rs.40,072/- per cent. It is pointed out that the Section 4(1)
notification for the said acquisition is also dated 6.12.1996, as in
the present case. It is further pointed out that as per Ext.A9 sale
deed dated 5.11.1993 the father of the claimant in LAR 33/1999
had purchased an item of property at the rate of Rs.20,000/- per
cent. According to the counsel, the said property is in the very
same survey number as the acquired property. Since Ext.A9
LAA 682/04 etc. 8
property was part of the acquired property there is no justification
for discarding the said document. Therefore, it is contended that
the land value may be fixed for the acquired properties by adding
escalation at the rate of 15% per annum from the date of Ext.A9
sale deed till the date of the Section 4(1) notification in the present
case. The decisions reported in State of Kerala v. Jose Simon
{2009(1) KLT 760} and Atma Singh v. State of Haryana {(2008) 2
SCC 568} are also pressed into service.
7. We have heard Mr. V.M.Kurian, Advocate for the appellant-
Municipality, Mr. Basant Balaji, the Senior Govt. Pleader and Mr.
Gopikrishnan Nambiar, counsel for the claimants-cross objectors.
We have gone through the records of the case and the evidence on
record. We have also given anxious consideration to the
contentions advanced by the parties.
8. At the instance of the claimants an Advocate
Commissioner had been deputed by the Reference Court to inspect
the acquired properties. Accordingly he had inspected the
properties and his report and plan are marked as Exts.C1 & C1(a)
by the Court. The Advocate Commissioner has reported that the
LAA 682/04 etc. 9
properties under acquistion are all located in the heart of
Muvattupuzha Municipal town. The proximity of the lands to the
important commercial, Government and non-governmental
establishments indicate that the properties are all situate in a
commercially important locality. Ext.C1 commission report has
referred in detail to the various commercial and other important
establishments near the acquired properties. The Velloorkunnam
Village Office, Temple, Town U.P. School, Market, European
Economic Market, Courts, Office of the Revenue Divisional Officer,
Banks, Homoeo Hospital etc. are all located close to the acquired
lands. The above aspects are endorsed by Ext. C2 report also.
Therefore, the Commercial importance of the acquired lands is
beyond dispute. Considering the locational importance of the
lands, it is clear that the lands were valuable assets, capable of
commercial exploitation by the owners thereof. However, the
commission reports also show that the acquired properties are all
lying at about 10-12 ft. lower than the road level. Therefore, the
counsel for the Municipality has pointed out that commercial
exploitation of the acquired lands would be possible only after
LAA 682/04 etc. 10
properly developing them into commercially attractive lands. Any
such development would involve considerable expenditure, it is
pointed out. According to the counsel, in its present state, the
land was not capable of commanding the same commercial value
that other developed lands were capable of commanding. It is also
pointed out that the sale deeds relied on by the claimants all relate
to fully developed lands which cannot be compared with the
acquired properties. It is true that the acquired lands are lying at
levels substantially lower from the road level. Therefore, the lands
certainly would not fetch the same market value that other level
lands would be capable of fetching. However, it is clear from the
evidence on record that the acquired lands are situate in a
commercially important locality in Muvattupuzha town. Therefore,
the commercial importance of the acquired properties also cannot
be ignored for the sole reason that they are lying at a lower level
from the road.
9. The claimants rely on Exts.A1 and A2 sale deeds by which
two items of properties have been purchased by the Muvattupuzha
Municipality. As per Ext.A1 sale deed, 7.165 cents and 395 sq.links
LAA 682/04 etc. 11
of land have been purchased. As per Ext.A2 an extent of 2.61
cents of land has been purchased. The properties have been
purchased at the rate of Rs.50,000/- per cent. The lands are
situate in same village and is about 300 mtrs. away from the
acquired land. The sale deeds have been proved by examining
A.W.2 who was the then Secretary of the Municipality. The
Advocate Commissioner has made a comparison of the properties
covered by the above sale deeds with the acquired properties. It is
seen from the report of the Advocate Commissioner that the
properties covered by Exts.A1 and A2 are situate adjacent to the
N.H.49. The said lands were purchased for the formation of the
byepass road. The properties covered by Exts.A1 and A2 are small
extents that were acquired for opening the byepass road. They are
also fully developed garden lands which are by the side of the main
road. Therefore, the value given in Exts.A1 and A2 cannot be
accepted as such. Further, it is to be noticed that Exts.A1 and A2
are post notification documents, though only by a few months.
10. Exts.A3 and A4 documents are two other sale deeds
relating to nearby properties. The value shown in the said sale
LAA 682/04 etc. 12
deeds are Rs.44,444/- and Rs.43,478/- per cent respectively.
However, the said documents show that the properties covered by
the said deeds were garden lands with buildings therein. Ext. A6 is
an order of this Court in C.M.A. 5/2000 which related to an
agreement for sale of an item of immovable property in the same
locality. The value of the property in the agreement for sale
appears to be Rs.2,50,000/- per cent. However, the said agreement
has not been produced in Court. Exts. A7 & A8 relates to
proceedings for acquisition of small bits of property for the
construction of the TVS-Keecheripady road. The land value awarded
is Rs.40,702 per cent, it appears that the acquired land in the said
case was dry lands. The properties under acquisition in the said
case are only 500 mtrs. away from the acquired properties in these
cases. The Section 4(1) notification in the said case is also
6.12.1996. Another document that is pressed into service by the
claimants is Ext. A9 sale deed dated 5.11.1993 by which the father
of the claimant in LAR 33/99 has purchased an item of property at
the rate of Rs.20,000/- per cent. It is the contention of the
claimants that in spite of the unambiguous data available from the
LAA 682/04 etc. 13
above documents, the Reference Court seriously went wrong in not
accepting the same and awarding land value at least at the rate of
Rs.60,000/- per cent.
11. In considering the question as to what is the correct
market value of the acquired lands, it is to be borne in mind that,
what has to be ascertained is the price that would be offered by a
willing buyer to a willing seller. For the purpose of ascertaining
the same, various principles have been laid down by the Apex Court
as well as our Court in a number of cases. In Atma Singh’s case
(supra) at page 572 (paragraph 4), the Apex Court has summed up
the nature of the enquiry required in the following words:-
“The expression ‘market value’ has been the
subject-matter of consideration by this Court in several
cases. The market value is the price that a willing
purchaser would pay to a willing seller for the property
having due regard to its existing condition with all its
existing advantages and its potential possibilities when
led out in most advantageous manner excluding any
advantage due to carrying out of the scheme for which
the property is compulsorily acquired. In considering
market value disinclination of the vendor to part with
his land and the urgent necessity of the purchaser to
LAA 682/04 etc. 14
buy should be disregarded. The guiding star would be
the conduct of hypothetical willing vendor who would
offer the land and a purchaser in normal human
conduct would be willing to buy as a prudent man in
normal market conditions but not an anxious dealing at
arm’s length nor facade of sale nor fictitious sale
brought about in quick succession or otherwise to
inflate the market value. The determination of market
value is the prediction of an economic event viz., a price
outcome of hypothetical sale expressed in terms of
probabilities.”
It is further laid down in the said decision that for ascertaining the
market value of the land, the potentiality of the acquired land
should also be taken into consideration. By potentiality what is
meant is the capacity of transforming into or being developed into
a substantial asset or property of much higher value. Therefore,
apart from the actual advantages enjoyed by the property, it is also
necessary to bear in mind and to take into consideration the
capacity of the land to be converted into or being developed into a
much more valuable asset. Viewed in the above prospective it is
clear that though the properties are at present lying at levels much
lower than the road, their location in close proximity to the main
LAA 682/04 etc. 15
road gives them the potential of being developed into very valuable
assets. Therefore, the locational advantages enjoyed by the
properties are further enhanced by the potential for development
which the acquired properties had. Though the properties are
paddy fields, according to the Revenue records the Advocate
Commissioner has reported that the lands were dry lands lying
barren with no cultivation or improvements therein. The presence
of commercial establishments, Banks, Government institutions,
Schools and financial institutions clearly evidence the potential of
the land for development, which has to be considered as an input
while determining the market value of the acquired properties.
However, the above considerations do not appear to have weighed
much, with the Reference Court while fixing the land value of the
acquired properties.
12. The Land Acquisition Officer had categorised the lands
into two. Category I with road access was given a higher value of
Rs.17,000/- per Are while the lands in Category II without road
access was given a lesser value of Rs.15,400/- per Are. However,
the Reference Court has discarded the categorisation that was
LAA 682/04 etc. 16
adopted, without assigning any reason. It cannot be disputed that
lands with road access enjoy a definite advantage over similar lands
that do not have road access. Therefore, lands with road access are
certainly more valuable than similar lands without road access.
Hence the Reference Court went wrong in discarding the
categorisation and granting the same land value for lands with road
access and those without such advantage. For the above reasons,
we hold that the categorisation adopted by the Land Acquistion
Officer was correct and therefore, we treat the three cases in which
the lands had road access a little differently from those without
road access.
13. A perusal of the documents Exts. A1, A2, A3, A4, A6, A7
& A8 show higher value than what has been granted by the
Reference Court. However, the value shown in the said documents
cannot be accepted as such for the reason that they relate to pucca
garden lands. The properties covered by Exts. A1 and A2 relates
to small bits of land. The same is the case with that of Exts. A7 &
A8. But, the locational advantages enjoyed by the acquired
property cannot be lost sight of. At the same time it is to be borne
LAA 682/04 etc. 17
in mind that the acquired lands are lying at substantially lower
levels from the adjacent road. Nevertheless, the potential of the
properties for development must also be taken note of.
Considering all the above aspects, we feel that the correct market
value of the acquired lands can be fixed at Rs.68,000/- per Are for
the lands in Category I (with road access). The lands in category II
are certainly at a disadvantage for want of road access and,
therefore, we fix the disadvantage for such lands without road
access at 10% of the value of the lands with road access.
Accordingly, the market value of the lands in category II works out
to Rs.61,200/- per Are.
14. The result of the above discussion is that LAA Nos:
175/2004, 750/2004, 718/2004, 763/2004, 629/2009, 141/2005,
630/2004, 955/2004, 682/2004, 628/2004, 678/2004 and
735/2004 are dismissed. Cross objection Nos: 9/2005, 33/2005,
42/2005, 38/2005, 11/2005 and 118/2005 are allowed. The
market value of the lands that form the subject matter of Cross
Objection Nos: 9/2005, 11/2005 and 118/2005 are fixed at
Rs.68,000/- per Are while the market value of the lands that form
LAA 682/04 etc. 18
the subject matter of Cross Objection Nos: 33/2005, 42/2005 and
38/2005 are fixed at Rs.61,200/- per Are. It is made clear that the
claimants shall be entitled to the statutory benefits under Sections
23(2), 23(1-A) and 28 of the Land Acquisition Act in respect of the
enhanced compensation. In the circumstances of the case there will
be no order as to costs.
PIUS C.KURIAKOSE
Judge
K. SURENDRA MOHAN
Judge
jj
PIUS C.KURIAKOSE &
K.SURENDRA MOHAN, JJ.
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L.A.A.NO:
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JUDGMENT
Dated: