JUDGMENT
1 The owner of the acquired land not being satisfied with the compensation awarded by the Civil Court has filed this appeal calling in question the legality and validity of the judgment and award dated 24th March, 2001 passed in LAC No. 551 of 1994 on the file of the Court of the Additional Civil Judge (Senior Division) at Gulbarga (for short, ‘the Civil Court’). By the impugned award the Civil Court has awarded compensation at the rate of Rs. 61,000/- per acre for 3 acres 10 guntas of converted land and at the rate of Rs. 43,000/- per acre with regard to 1 acre 20 guntas of agricultural land.
2. The facts of the ease in brief are as follows:
The State acting through the respondent-Land Acquisition Officer (for short, ‘the LAO’), and in exercise of eminent domain power acquired 1 acre 20 guntas of land comprised in Survey No. 12/1/1B and 3 acres 10 guntas of converted land in Survey No. 127272B both situate in Chandapur Village in Chincholi Taluk, Gulbarga District (for short, ‘the schedule land’) for a public purpose, to wit, for construction of Mini Vidhana Soudha and hospital buildings by issuing Section 4(1) notification dated 22-1-1990 under the provisions of the Land Acquisition Act, 1894 (for short, ‘the Act’). The LAO after conducting award enquiry passed an award on 30-9-1992 determining the market value at the rate of Rs. 15,000/- per acre with regard to non-agricultural land and at the rate of Rs. 8,000/- per acre with regard to agricultural land, by placing reliance on sales statistics. The owner of the acquired land not being satisfied with the rate of compensation awarded by the LAO sought reference of her claim under Section 18 of the Act for more compensation and on such reference being made, the Civil Court placing reliance on Ex. P. 8 sale document dated 8-4-1986 by the impugned award determined the market value at the rate of Rs. 61,000/- per acre with regard to non-agriculture land and at the rate of Rs. 43,000/- per acre with regard to
agricultural land. The owner of the acquired land still not being satisfied with the quantum of compensation has approached this Court by way of this appeal,
2-A, We have heard Sri Madhava Reddy, learned Counsel for the appellant and Sri K.P. Ashok Kumar, learned Additional Government Advocate for land acquisition. Sri Madhava Reddy would contend that no exception could be taken for the Civil Court to place reliance on Ex. P. 8 sale document for determination of the market value. The Civil Court has seriously erred in law in making deduction at 2 tires in arriving at the market value of the acquired land as on the date of Section 4(1) notification. Sri Madhava Reddy would also contend that in determining the market value the Civil Court has not appreciated the high potentiality of the acquired land which could be compared to the land covered by Ex. P. 8 sale deed. Sri Madhava Reddy would also contend that there is an error apparent on the face of the award inasmuch as the Civil Court has not at all allowed appreciation in the market value for a period of 41/2 years while determining the market value of the acquired land. The learned Government Advocate for land acquisition, on the other hand, at the threshold, would highlight that the land covered by Ex. P. 8 sale deed cannot be compared to the acquired land for the simple reason that the land covered by Ex. P. 8 is just adjacent to a bus stand situated in the Chincholi, whereas the acquired lands are situate in Chandapur Village 1 k.m. away from the bus station. In that view of the matter, according to the learned Government Advocate, the Civil Court was justified in deducting 50% from the value fetched for the land covered by Ex. P. 8 on that count itself. Learned Government Advocate would also support the action of the Civil Court in further deducting 33% and 53% respectively in determining the market value in the case of non-agricultural land and the agricultural land. In sum and substance the argument of the learned Government Advocate is that no ground is made out by the appellant to interfere with the impugned award and the appeal is devoid of merits.
3. Having heard the learned Counsels for the parties, the only point that arises for our consideration is whether the market value of the acquired land determined by the Civil Court in the facts and circumstances of the case and the evidence on record could be regarded as just compensation within the contemplation of the Act and, if not, what shall be the just compensation for the acquired land.
4. Before dealing with the above question, we may usefully notice the principles governing valuation of the lands acquired for non-agricultural purposes. Sections 23 and 24 of the Act stipulate factors that need to be taken into account and those that need to be eschewed while determining compensation payable to the owners of the acquired land. The Apex Court in a catena of decisions over the past four and half decades and more have evolved principles and norms for determination of compensation of the lands compulsorily acquired by the State in exercise of its eminent domain power under the Act or under any enabling statute. One of the principles discernible from the pronouncements of the Apex Court is that while determining compensation for larger extent of land, price paid for or compensation determined by the Court for smaller parcels of land do not provide a safe and dependable basis. At the same time, it is also discernible by the pronouncements of the Supreme Court that in the absence of any better evidence, even transactions involving conveyance of smaller extents of land or blocks of land which are comparable in terms of proximity of time and the locus would become relevant.
5. The Supreme Court in Administrator General of West Bengal v. Collector, Varanasi , observed thus.–
“The determination of market value of a piece of land with potentialities for urban use is an intricate exercise which calls for collection and collation of diverse economic criteria. The market value of a piece of property, for purposes of Section 23 of the Act, is stated to be the price at which the property changes hands from a willing seller to a willing, but not too anxious a buyer, dealing at arms length. The determination of market value, as one author put it, is the prediction of an economic event, viz., the price outcome of a hypothetical sale, expressed in terms of probabilities. Prices fetched for similar lands with similar advantages and potentialities under bona fide transactions of sale at or about the time of the preliminary notification are the usual, and indeed the best, evidences of market value. Other methods of valuation are resorted to if the evidence of sale of similar lands is not available”.
6. This Court in Jade Basappa (dead) by L.Rs and Ors. v. Assistant Commissioner and Land Acquisition Officer, Hospet, Bellary District 1995(6) Kar. L.J, 130 : , held:
“The approach of the Courts while dealing with the case of an agriculturist,…, is to average and round off the figure, the acceptance always being on a little higher side rather than on the lower side. The object has not been to end up with the State paying more money, but to take note of the fact that whatever amount that the landowner seeks is a one-time compensation, the computation of which must never be grudgingly done because even a generous compensation is more than offset by the real land value in the hands of the acquirer, and that consequently the lands have always a tremendous potential both for actual financial yield and capital appreciation”.
7. K.S. Shivadevamma and Ors. v. Assistant Commissioner and Land Acquisition Officer, Davanagere and Anr. 1992(4) Kar. LJ. 428 (DB): (DB), a Division Bench of this Court held:
“It is clear that, if reasonably the land acquired has a potentiality for urban use, said benefit should be extended to it while awarding compensation. Lands in the outskirts of an expanding city has every tendency to become ripe for building use in course of time. Court has to make a reasonable exercise to find out the market value by reference to the existing material, unless the material on record is absolutely useless to find out the value of similar lands. If the value of comparable land, is of small size, appropriate deduction has to be made after applying the said rate, when a hypothetical building layout is imagined to work out the market value of the acquired land. A few decisions also indicate that, Court may take note of the value of land which may not be in the very locality but, situated in a nearby locality, provided, it is comparable to the acquired land with regard to the potentiality. If the available market rate is of some recent past, appropriate escalation rate may be applied to estimate the rate as on the date of the preliminary notification. No doubt, the entire exercise by the Court would be indirectly guided by the Court’s own judicial sense as to what would have been a reasonable value for the land in question, at the relevant point of time”.
8. This Court in Alisab (since deceased) by L.Rs v. Assistant Commissioner and Land Acquisition Officer, Bellary 995(6) Kar. L.J. 686, dealing with factors to be considered in determining the compensation and onus of fixing fair compensation observed thus.–
“It is the onus of the State acting through the Land Acquisition Officer to fix the fair compensation in the first instance. Though the law assumes that the Land Acquisition Officer will act correctly, the law also makes provision for revision of the figure awarded, by the Court, and experience has shown that in almost every case, the Courts had even required to intervene by stepping up the compensation. It is true that if the original awarded amount is disputed that the onus lies on the claimant and that on such basic issues as the question as to how much grain or other agricultural produce a particular piece of land yielded in a particular year is concerned, that it is the landowner who is the best person to testify. If one were to take not of the fact that for purposes of obtaining some more money that there would be a natural tendency to exaggerate, a Court will go by the prevailing standards and figures and as far as these are concerned, if independent evidence is not forthcoming then some reliance of a considerable degree will have to be placed on the figures which the State comes out with”.
9. In deciding what shall be the actual market value of the acquired land, the Court, whether it is Reference Court or the Appellate Court, would be well-advised to remind itself that the question as to what is the market value of the acquired land in whatever form and at whosoever behest, a dispute may be brought before the Court, it is essentially a question of fact and such question should be answered by the Court on the basis of the substantive legal evidence placed before it. It is trite that such question cannot be answered solely on the basis of any straight-jacket formulae ignoring the merits of individual cases.
10. In the premise of the above principles governing the determination of the market value of the acquired land let us have a look at the facts of this case and the evidence on record. It is nobody’s case that except Ex. P. 8 there exists any other sale transaction or award which could be comparable in terms of proximity of time and space. Therefore, no exception can be taken to the Civil Court placing reliance on Ex. P. 8.
11. The controversy between the parties relates to what shall be the appropriate deduction to be made from the actual market value of the acquired land, taking into account Ex. P. 8 sale deed, in order to determine the market value of the acquired land as on the date of Section 4(1) notification. In Ex. P. 8. 11 guntas of land comprised in Survey No. 150/B of Chincholi town was purchased by P.W. 3 from one Smt. Nagamma, by name, for Rs. 15,000/- under a registered sale deed dated 8-4-1986. It is true that even according to the appellant the said 11 guntas of land is situated by the side of bus stand in Chincholi town. P.W. 1, the owner of the acquired land has also submitted that the acquired land is 1 k.m. away from the land covered by Ex. P. 8 in his cross-examination. But, there is sufficient credible evidence on record to show that the acquired land is also highly potential and it is surrounded by number of Government offices, hospital etc., P.W. 1, owner of the acquired in his evidence recorded on 23-11-2000 has stated:
“Chincholi – Thandhur main road passes through my land. By the side of my acquired land there is a road and after that there is degree college, KEB office and APMC yard, there is also Government hospital situated by the side of my acquired land. All the Taluk Offices of Chincholi Taluk have been situated at Chandapur. Chandapur is developing faster than Chincholi”.
The witness P.W. 1 was cross-examined on behalf of the LAO. The correctness of the potentiality spoken by P.W. 1 in his examination-in-chief is not contested in the cross-examination. In addition, even according to R.W. 1 evidence, the acquired land has high potentiality. The distance of 1 k.m. between the two lands in a taluk headquarters like Chincholi which is said to be fast growing would not matter much for the purpose of determination of the market value unless contrary evidence is led by the LAO as already pointed out supra as against the evidence of P.W. 1 with regard to the locus of the acquired land in the midst of highly developed area. There is absolutely no contra evidence adduced by the LAO. Be that as it may, we do not have any good or sound reason to discredit the evidence of P.W. 1, particularly, when not even a suggestion was made in the cross-examination to deny what the witness said in the examination-in-chief. We are quite aware that in the absence of corroborating evidence much credence should not be given to the oral testimony of the self-interested witness like P.W. 1. If the LAO or the State authorities were to deny the correctness of what P.W. 1 has stated in the examination-in-chief, perhaps the burden would have been on the appellant to adduce corroborative evidence before the Court. There is absolutely no argument before us on behalf of the State that the potentiality spoken to by the witness, P.W. 1 in his evidence is incorrect.
12. In the premise of the above facts, the question is what shall be the appropriate deduction to be made out of the price fetched by the land covered by Ex. P. 8 for the determination of the market value of the acquired land. In terms of the rate fetched by the land covered by Ex. P. 8, the market value of the acquired land per acre would be Rs. 1,81,800/- per acre. At this stage itself, it needs to be noticed that Ex. P. 8 is dated 8-4-1986, whereas the acquisition of the acquired land was initiated by issuing Section 4(1) notification dated 22-11-1990 roughly after 41/2 years from the date of Ex. P. 8. It is quite reasonable and fair to allow appreciation in the market value of the acquired land having regard to the span of time between the date of Ex. P. 8 and the date of Section 4(1) notification. In our considered opinion having regard to the kind of development which is taking place in and around Chincholi town, it seems to our mind that 8% appreciation per annum would be just and appropriate. Although the time-gap is 41/2 years, we are persuaded to allow appreciation only with regard to 4 years at 8%. Thus by the time Section 4(1) notification was issued, there was 32% appreciation in the market value of the acquired land and 32% of Rs. 1,81,800/- would come to Rs. 58,176/-. Thus, the market value of the one acre of land on the date of Section 4(1) notification would be Rs. 2,39,976. Out of this it becomes necessary to deduct reasonable sum of money having regard to the fact that the land covered by Ex. P, 8 is not only a small extent of land compared to the acquired land but also it is situated adjacent to bus station in Chincholi town. At the same time we could also not escape the attention of the Court that the land in this case is acquired for construction of a Mini Vidhana Soudha and hospital, in an area which is already surrounded by large number of Government offices and hospitals etc., referred to above. Taking the attendant facts and circumstances and the high potentiality of the land and also having regard to the fact that the distance between Ex. P. 8 land and the acquired land is only 1 k.m. which distance cannot be regarded as quite far away from the town. Keeping in mind the norms and principles laid down by the Apex Court and this Court in the judgments noticed above, we think that 40% of deduction would be appropriate deduction to determine the actual market value of the acquired land as on Section 4(1) notification. If we deduct 40% of Rs. 2,39,976/-, the market value of the acquired land would be Rs. 1,43,985/-peracre.
13. The Civil Court has awarded compensation at different rates with regard to non-agricultural lands and agricultural land understandably. Undoubtedly, non-agricultural land can fetch higher rate than agricultural land. In that view of the matter, the Court could not award same rate of compensation with regard to non-agricultural land and agricultural land. But in this appeal, the owner of the acquired land has restricted his claim to Rs. 1,30,680/- per acre with regard to non-agricultural land as well as agricultural land. Of the 4 acres 30 guntas, 3 acres 10 guntas is non-agricultural land whereas the remaining 1 acre 20 guntas is agricultural land. The Civil Court has held that both non-agricultural land and agricultural land are situate abutting each other. In determining the market value, the conversion fee paid by the owner for conversion has to be deducted while determining the market value of the agricultural land. Since we have come to the conclusion that the market value of the non-agricultural acquired land is Rs. 1,43,985 per acre, even allowing deduction towards conversion fee that might have been paid by the owner, even then, the market value of the acquired land would not be less than Rs. 1,30,680/- per acre at which rate the owner has restricted his claim in this appeal.
14. In the result and for the foregoing reasons, we allow the appeal with costs and award compensation at the rate of Rs. 1,30,680/- per acre. It is made clear that the appellant is entitled to all statutory benefits in accordance with law. The Advocate’s fee is fixed at Rs. 1,500/-. The impugned award shall stand modified accordingly.