Charan Dass (Dead) By Lrs vs H.P. Housing Urban Dev. Authority & Ors

HIMACHAL PRADESH HOUSING BOARD & ORS. ... RESPONDENTS 2

CIVIL APPEAL NOs. 2221-2227 OF 2001

JAI KISHAN & ORS. ... APPELLANTS

VERSUS

HIMACHAL PRADESH HOUSING AND URBAN DEVELOPMENT AUTHORITY & ORS. ... RESPONDENTS

CIVIL APPEAL NO. 2228 OF 2001

HARPAL & ORS. ... APPELLANTS

VERSUS

HIMACHAL PRADESH HOUSING BOARD & ORS. ... RESPONDENTS

CIVIL APPEAL NOs. 2090-2101 OF 2004

SHONKIA (DEAD) BY L.Rs. ... APPELLANTS

VERSUS

STATE OF HIMACHAL PRADESH & ORS. ... RESPONDENTS

JUDGMENT

D.K. JAIN, J.

This batch of appeals arises from the final judgment and

order dated 7th June, 1999 rendered by the High Court of Himachal

Pradesh at Shimla in twenty Regular First Appeals as also final

judgment and order dated 14th August, 2003 delivered by the said 3

High Court in twelve cognate Regular First Appeals wherein the

former order has been relied upon. By the impugned order, while

allowing the appeal preferred by the Himachal Pradesh Housing

Board (hereinafter referred to as "the Housing Board"), the High

Court has reduced the amount of compensation awarded by the

District Judge in Reference under Section 18 of the Land

Acquisition Act, 1894 (for short "the Act").

2. Material facts common to all the appeals and relevant for the

purpose of disposal of these appeals, are as follows:

The State of Himachal Pradesh, respondent No.2 in Civil

Appeal No.2213 of 2001, intended to acquire land of the appellants

at Shoghi, about 12 K.M. from the capital of the State at Shimla,

for construction of a Housing Board Colony. Accordingly, a

Notification under Section 4 of the Act was issued and published in

the Himachal Pradesh Gazette on 6th November, 1990. The quality

of the lands involved in the acquisition fell in different categories.

The Land Acquisition Collector, respondent No.3 herein, by his

Award dated 3rd August, 1994 assessed the market value of the

acquired land and announced his Award by which compensation at

the rate of Rs.32,073/- per Bigha in respect of Bakhal Awal,

Rs.24,288/- per Bigha for Bakhal Doem and Rs.7,785/- per Bigha 4

for Ghasani Banjar Kadeem was awarded to the appellants-

landowners.

3. Not being satisfied, the appellants filed Reference

Applications before the District Judge under Section 18 of

the Act claiming compensation at Rs.22,00,000/- per Bigha,

inter alia, on the ground that the market value of the acquired

land was much more than what was awarded by respondent

No.3. Vide his order dated 22nd June, 1996, the District

Judge found the evidence adduced by the appellants (Exts.

PW2/B and PW2/A) to be reliable. However, he found the

exemplars filed by the Housing Board (RW3/A and RX), to

be irrelevant for ascertaining the market value of the lands.

Accordingly, he determined the market value of the acquired

land at Rs.2 lakh per Bigha for all kinds of lands irrespective

of their quality and classification. In addition thereto, the

District Judge awarded Statutory interest and solatium to the

appellants. Similarly, vide his order dated 22nd March, 1997,

the District Judge again found the evidence adduced by the

appellants in the form of two sale deeds to be reliable.

Accordingly, relying on his earlier order dated 22nd June, 5

1996 (Ex.PZ), he awarded the same compensation to the

appellants.

4. Being aggrieved with the amount of compensation

determined by the District Judge, the Housing Board

preferred Regular First Appeals to the High Court under

Section 54 of the Act, praying for setting aside the judgments

of the District Judge dated 22nd June, 1996 and 22nd March,

1997. The challenge to the said judgments was on diverse

grounds, including that the two sale deeds relied upon by the

District Judge pertained to two very small pieces of land

having a double storied shop; one sale instance was in

respect of one biswa of land sold four months after

Notification under Section 4 in the present case; the

evidence of Gursaran, one of the claimants, who had

appeared to prove the sale deed in respect of the land with a

double storied shop lacked truthfulness and in some

references the compensation awarded was in excess of the

land owned by the claimants.

5. Vide order dated 7th June, 1999, the High Court accepted the

appeals filed by the Housing Board. Relying on the decisions

of this Court in Special Tehsildar Land Acquisition, 6

Vishakapatnam Vs. A. Mangala Gowri (Smt.)1, Special

Deputy Collector & Anr. Vs. Kurra Sambasiva Rao &

Ors.2 and Manipur Tea Co. Pvt. Ltd. Vs. Collector of

Hailakandi3, wherein broad parameters, to be kept in view

while determining the market value of the land acquired for

public purpose have been laid down, the High Court

concluded that as compared to the sale instances relied

upon by the appellants viz., Ext. PW2/B and Ext. PW2/A, the

sale deeds filed by the Housing Board viz., RW3A (again

marked as RW5A), RW4A and RX were relevant exemplars

for ascertaining the market value of the land in question.

The High Court observed as follows:

"...we find on record in these cases that there are only three relevant sale deeds which are marked Exhibits PW2/A, PW2/B, RX and RY. Sale deed Ex.PW2/B is dated 22.1.1990 in respect of which vendee PW-Gursaran (RW5) has been examined by both the parties who is also one of the claimants in the claim petitions. He purchased 2 biswas of land from Piara Singh on 22.1.1990 for a consideration of Rs.99,500/-. On this land there was a double storeyed shop. This witness also purchased another piece of 0-1 biswas of land through sale deed Ex.PW2/A, for a consideration of Rs.30,000/- from Satish Balooni and the value of this land comes to Rs.6 lacs per bigha. The second sale deed was executed after notification issued on

6.11.1990 and, therefore, the market value of that sale deed cannot be taken into consideration for 1 (1991) 4 SCC 218 : AIR 1992 SC 666 2 (1997) 6 SCC 41 3 (1997) 9 SCC 673 7

determination of the acquired land. The three sale deeds relied upon by the appellant-Board are marked RX, RW3/A, again marked RW5/A and RY (RW4/A) pertaining to the year 1988-89 in respect of sale and purchase of the land in Shoghi Bazar by the vendors and vendees. To prove sale deed Ex.RW3/A (RW5/A) RW- Gursaran was examined (who appeared as his own witness in the claim petition), the vendee purchased 1-0 bigha of land in the year 1988-89 for a consideration of Rs.11,000/- from one Ranjit Lal. One Shiv Ram sold 0- 12 biswas of land to PW-Sanjiv Goel and his brother Ajay Kumar in the year 1988-89 for a consideration of Rs.48,000/- and the said land was purchased by vendee for the purpose of setting up of steel industries. PW- Prem Kumar purchased two biswas of land from Vishwa Nath for a consideration of Rs.48,000/-, copy of which was marked Ext. RX and again RW4/A. From the perusal of these sale deeds it is clear that they pertain to 1-1/2 or 2 years prior to the issue of notification under Section 4 of the Act. The duty of the court is to keep at the back of its mind that the object of assessment is to arrive at reasonable and adequate market value of the land and in that process, though some guesswork is involved, and mechanical assessment of the evidence should be avoided."

6. Inter-alia, observing that there is sufficient oral and

documentary evidence on record to determine the fair,

reasonable and adequate market value of the acquired land,

the High Court finally determined the market value of the

land as under:

"The value of the land purchased by the three vendees, namely, Prem Kumar, Gursaran and Sanjiv Goel who are also claimants in some of the claim petitions and the prices of the lands purchased by them about 1-1/2 or 2 years prior to the acquisition of the land involved in the present cases after calculation and 8

divided by three would come to Rs.1,03,667/- per bigha. Applying the guesswork of the escalation of the price between the year 1988-89 on 6.11.1990, we determine the market value of the acquired lands on the basis of these sale deeds at Rs.1,50,000 per bigha."

Thus, according to the High Court, the market value of the

acquired lands as on the date of issue of Notification under Section

4 of the Act was Rs.1,50,000/- per Bigha. Having so determined

the market value of the acquired land, the Court noted the

evidence of Mr. A.K. Gupta, Assistant Architect (RW4) wherein he

had deposed that only 41.4% of the total area was being used for

construction and the remaining area was to be used for services

like roads, pathways, green spaces etc. On the basis of the said

evidence, the High Court made a deduction of 40% from the

market value of the land determined by it at Rs.1,50,000/- per

Bigha. Thus, the compensation payable to the land owners for the

land acquired was determined at Rs.90,000/- per Bigha. The

compensation awarded by the District Judge was accordingly

modified to that extent, maintaining solatium and Statutory interest

awarded by him. The High Court also noticed certain

discrepancies in the judgment of the Reference Court in granting

compensation for lands in excess of what were actually owned by 9

the claimants. Aggrieved by the said judgments, the appellants-

landowners are before us in these appeals.

7. Learned counsel appearing on behalf of the appellants, led

by Mr. Atul Sharma, challenged the finding of the High Court

that the exemplars/sale instances filed by the appellants and

relied upon by the District Judge were not relevant for

ascertaining the market value of the subject lands. It was

argued that since Ext. RX, adduced by way of evidence by

the Housing Board, was not proved, the High Court

committed a patent illegality in relying on the same. Placing

reliance on the decisions of this Court in Smt. Tribeni

Devi & Ors. Vs. Collector of Ranchi & Vice Versa4 and

Bhagwathula Samanna & Ors. Vs. Special Tahsildar &

Land Acquisition Officer, Visakhapatnam Municipality,

Visakhapatnam5, learned counsel contended that the High

Court failed to apply correct principles for reducing the

market value of the land by 40% on account of non-

availability of the land for construction of houses. It was

asserted that the basis of deduction being the end use of the

land and not the nature of the land or the comparable land,

4 (1972) 1 SCC 480 5 (1991) 4 SCC 506 10

there should have been no deduction from the market value

of the land determined by the High Court.

8. Per contra, learned counsel appearing on behalf of the

Housing Board, supported the view taken by the High Court.

Controverting the stand of the appellants that sale deed (RX)

could not be relied upon as the same had not been proved

by the Housing Board, learned counsel submitted that in the

light of Section 51A of the Act, a certified copy of the sale

deed (RX), registered under the Registration Act, 1908 could

be accepted as evidence of the transaction recorded therein

and, therefore, the High Court did not commit any illegality in

placing reliance on it. Learned counsel also contended that

the High Court was justified in making deduction at the rate

of 40% by applying the principles of law laid down by this

Court in Viluben Jhalejar Contractor (Dead) by LRs. Vs.

State of Gujarat6, Atma Singh (Dead) through LRs. &

Ors. Vs. State of Haryana & Anr.7 and Shimla

Development Authority & Ors. Vs. Santosh Sharma

(Smt) & Anr.8.

6 (2005) 4 SCC 789 7 (2008) 2 SCC 568 8 (1997) 2 SCC 637 11

9. Before we enter into the merits of the rival contentions, we

may notice a few broad principles to be kept in view while

ascertaining the market value of the land for the purpose of

determining the amount of compensation payable on

acquisition of land for a public purpose.

10. Section 15 of the Act mandates that in determining the

amount of compensation, the Collector shall be guided by

the provisions contained in Sections 23 and 24 of the Act.

Section 23 provides that in determining the amount of

compensation to be awarded for the land acquired under the

Act, the Court shall, inter alia, take into consideration the

market value of the land at the date of the publication of the

Notification under Section 4 of the Act. The Section contains

the list of positive factors and Section 24 has a list of

negatives, vis-a-vis the land under acquisition, to be taken

into consideration while determining the amount of

compensation. As already noted, the first step being the

determination of the market value of the land on the date of

publication of Notification under sub-Section (1) of Section 4

of the Act. One of the principles for determination of the

market value of the acquired land would be the price that a 12

willing purchaser would be willing to pay if it is sold in the

open market at the time of issue of Notification under Section

4 of the Act. But finding direct evidence in this behalf is not

an easy task and, therefore, the Court has to take recourse

to other known methods for arriving at the market value of

the land acquired. One of the preferred and well accepted

methods adopted for ascertaining the market value of the

land in acquisition cases is the sale transactions on or about

the date of issue of Notification under Section 4 of the Act.

But here again finding a transaction of sale on or a few days

before the said Notification is not an easy exercise. In the

absence of such evidence contemporaneous transactions in

respect of the lands, which have similar advantages and

disadvantages is considered as a good piece of evidence for

determining the market value of the acquired land. It needs

little emphasis that the contemporaneous transactions or the

comparable sales have to be in respect of lands which are

contiguous to the acquired land and are similar in nature and

potentiality. Again, in the absence of sale deeds, the

judgments and awards passed in respect of acquisition of

lands, made in the same village and/or neighbouring villages

can be accepted as valid piece of evidence and provide a 13

sound basis to work out the market value of the land after

suitable adjustments with regard to positive and negative

factors enumerated in Sections 23 and 24 of the Act.

Undoubtedly, an element of some guess work is involved in

the entire exercise, yet the authority charged with the duty to

award compensation is bound to make an estimate judged

by an objective standard.

11. In Shaji Kuriakose & Anr. Vs. Indian Oil Corporation Ltd.

& Ors.9, this Court has observed as under:

"It is no doubt true that courts adopt comparable sales method of valuation of land while fixing the market value of the acquired land. While fixing the market value of the acquired land, comparable sales method of valuation is preferred than other methods of valuation of land such as capitalisation of net income method or expert opinion method. Comparable sales method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issue of notification under Section 4 of the Act. However, comparable sales method of valuation of land for fixing the market value of the acquired land is not always conclusive. There are certain factors which are required to be fulfilled and on fulfilment of those factors the compensation can be awarded, according to the value of the land reflected in the sales. The factors laid down inter alia are: (1) the sale must be a genuine transaction, (2) that the sale deed must have been executed at the time proximate to the date of issue of notification under Section 4 of the Act, (3) that the land covered by the sale must be in the vicinity of the acquired land, (4) that the 9 (2001) 7 SCC 650 14

land covered by the sales must be similar to the acquired land and (5) that the size of plot of the land covered by the sales be comparable to the land acquired. If all these factors are satisfied, then there is no reason why the sale value of the land covered by the sales be not given for the acquired land. However, if there is dissimilarity in regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is open to the court to proportionately reduce the compensation for acquired land than what is reflected in the sales depending upon the disadvantages attached with the acquired land".

12. Yet again in Viluben Jhalejar Contractor (supra), making

reference to a number of cases on the point, it was observed

as follows:

"18. One of the principles for determination of the amount of compensation for acquisition of land would be the willingness of an informed buyer to offer the price therefor. It is beyond any cavil that the price of the land which a willing and informed buyer would offer would be different in the cases where the owner is in possession and enjoyment of the property and in the cases where he is not.

19. Market value is ordinarily the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase. Where definite material is not forthcoming either in the shape of sales of similar lands in the neighbourhood at or about the date of notification under Section 4(1) or otherwise, other sale instances as well as other evidences have to be considered.

20. The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable 15

adjustment has to be made having regard to various positive and negative factors vis-`-vis the land under acquisition by placing the two in juxtaposition. The positive and negative factors are as under:

-----------------------------------------------------------------------------

Positive factors Negative Factors

-----------------------------------------------------------------------------

(i) smallness of size (i) largeness of area

(ii) proximity to a road (ii) situation in the interior at a distance from the road

(iii) frontage on a road (iii) narrow strip of land with very small frontage compared to depth

(iv) nearness to developed (v) lower level requiring area the depressed portion to be filled up

(v) regular shape (v) remoteness from developed locality

(vi) level vis-a-vis land under (vi) some special acquisition disadvantageous factors which would deter a purchaser

(vii) special value for an owner of an adjoining property to whom it may have some very special advantage".

13. Thus, comparable sales instances of similar lands in the

neighbourhood at or about the date of Notification under

Section 4(1) of the Act are considered to be the best

evidence for determining the market value of the acquired 16

land to arrive at a fair estimate of the amount of

compensation payable to a land owner. Nevertheless, while

ascertaining compensation, it is the duty of the Court to see

that the compensation so determined is just and fair not only

to the individual whose property has been acquired but also

to the public which is to pay for it.

14. Before examining the correctness of the cases at hand, in

the light of the legal principles enumerated above, it would

also be appropriate to keep in view the scope of interference

by this Court in an award granting compensation. It is trite

that the scope of interference in such matters is very limited

and it is only in cases where it is found that the authorities

below, including the High Court, have either applied wrong

principles or have omitted to take into consideration the

relevant factors affecting valuation, that this Court would

interfere.

15. The scope of interference by this Court was delineated by

this Court in Thakur Kamta Prasad Singh (Dead) by LRs.

Vs. State of Bihar10 wherein it was held that there is an

element of guesswork inherent in most cases involving

10 (1976) 3 SCC 772 17

determination of the market value of the acquired land. If the

judgment of the High Court reveals that it has taken into

consideration the relevant factors prescribed by the Act, in

appeal under Article 133 of the Constitution of India, its

assessment of the fair market value of the acquired land

should not be disturbed.

16. The following observations of this Court in Food

Corporation of India through its District Manager,

Faridkot, Punjab & Ors. Vs. Makhan Singh & Anr.11 are

quite apposite:

"This Court as the last Court of appeal, will ordinarily not interfere in an award granting compensation unless there is something to show not merely that on the balance of evidence it is possible to reach a different conclusion, but that the judgment cannot be supported by reason of a wrong application of principle or because some important point affecting valuation has been overlooked or misapplied. Besides, generally speaking, the appellate court interferes not when the judgment under appeal is not right but only when it is shown to be wrong."

17. Bearing these principles in mind, we may now advert to the

facts of the present case. As noted earlier, in the instant

cases the Reference Court had relied on Exh. PW2/A and

PW2/B to determine the market value of the land. Being the

Court of First Appeal, the High Court re-evaluated the entire 11 (1992) 3 SCC 67 18

evidence and found that Exh. RW4/A, RW3/A and sale deed

marked RX in respect of pieces of the land purchased by

Prem Kumar, Gursaran Singh, Sanjiv Goel who were also

claimants in some of the cases, were the best pieces of

evidence to ascertain the market value of the acquired lands.

Accordingly, taking the same as the base and applying the

formula of averages, the High Court enhanced the said

average amount on account of escalation of the prices

between the year 1980-89 as on 6th November, 1990, and

determined the market value of the acquired land at

Rs.1,50,000/- per Bigha. During the course of hearing we

required counsel for the Housing Board to place before us

the site plan showing the actual location of the subject lands

and the location of the plots, in respect whereof, the sale-

deeds were filed by the Housing Board as well as the land

owners. Having bestowed our anxious consideration to the

lay out plan vis-`-vis the land in question and bearing in mind

the location of the land, subject-matter of the said sale-

deeds, we find it difficult to hold that the exemplars relied

upon by the High Court are irrelevant for determining the

market value of the acquired lands. We are in agreement

with the High Court that the location and the date of sale in 19

the cases, relied upon by the High Court, were relevant for

determining the market value of the acquired land. Having

carefully examined the relevant evidence, we are convinced

that there is no legal or factual infirmity in the approach of the

High Court in ascertaining the market value of the lands as

might induce us to interfere with finding of the High Court on

that account. As noted above, unless some glaring infirmity

is shown in the assessment of evidence by the High Court,

this Court would ordinarily be slow in interfering with the

approach of the High Court in that behalf.

18. The next question which now survives for consideration is

whether the deduction of 40% from the market value

determined by the High Court towards development charges

for laying roads etc., is justified?

19. It is well settled that it is not in every case that deduction

towards development charges has to be made when a big

chunk of land is acquired for housing colonies etc. Where

the acquired land falls in the midst of an already developed

land with amenities of roads, electricity etc. deduction on this

account may not be warranted. At the same time, where all

civic and other amenities are to be provided to make it 20

suitable for building purposes or under the local building

regulations setting apart of some portion of the lands for

providing common facilities is mandatory, an appropriate

deduction may be justified.

20. In Special Tehsildar Land Acquisition, Vishakapatnam

(supra), following Tribeni Devi's case (supra), this Court

had observed as under:

"It is to be noted that in building regulations, setting apart the lands for development of roads, drainage and other amenities like electricity etc. are condition precedent to approve layout for building colonies. Therefore, based upon the situation of the land and the need for development the deduction shall be made. Where acquired land is in the midst of already developed land with amenities of roads, drainage, electricity etc. then deduction of 1/3 would not be justified. In the rural areas housing schemes relating to weaker sections deduction of 1/4 may be justified."

21. In the light of the afore-noted parameters, we are of the view

that in the instant case having regard to the relevant facts

and circumstances of the case, including the location of the

acquired land, a deduction of 30% towards development

charges from the market value of land as arrived by the High

Court, would meet the ends of justice. Accordingly, we hold

that the market value of the land for the purpose of payment 21

of compensation to the land owners in all these appeals is to

be assessed at Rs.1,05,000/- per Bigha.

22. In the result, the appeals are partly allowed. The appellants

shall be entitled to compensation at Rs.1,05,000/- per Bigha.

Besides, they will also be entitled to Statutory amounts in

terms of Section 23(1A) of the Act; solatium at 30% on the

market value of the land in accordance with Section 23(2) of

the Act and interest as stipulated in Section 28 of the Act.

23. There will, however, be no order as to costs.

.......................................J. (D.K. JAIN)

........................................J. (ASOK KUMAR GANGULY) NEW DELHI SEPTEMBER 7, 2009.