Mummidi Apparao (D) Tr.Lrs vs Nagarjuna Fertilisers & Chem.Ltd.& Anr

Mummidi Apparao (D) Through LRs. ... Petitioner(s)

Versus

Nagarjuna Fertilizers & Chemicals Ltd. & Anr. ... Respondent(s)

WITH

SPECIAL LEAVE PETITION (C) NO.3711 OF 2007

Mummidi Tulsamma ... Petitioner(s)

Versus

Nagarjuna Fertilizers & Chemicals Ltd. & Anr. ... Respondent(s)

WITH

SPECIAL LEAVE PETITION (C) NO.4177 OF 2007

Nagarjuna Fertilizers & Chemicals Ltd. ... Petitioner(s)

Versus

Mummidi Veeraraghavamma & Ors. etc. ... Respondent(s) 2

JUDGMENT

AFTAB ALAM,J.

1. This batch of three special leave petitions arises from land acquisition

proceedings and the matter in dispute is the rate of compensation for the

acquired lands as determined by the Andhra Pradesh High Court. SLP

(Civil) Nos. 3635 and 3711 of 2007 were filed on behalf of

claimants/landholders and SLP (Civil) No. 4177 of 2007 at the instance of

Nagarjuna Fertilizers and Chemicals Ltd. for whose benefit the lands were

taken in acquisition. In course of hearing, counsel appearing for the

claimants/landholders stated that they accepted the compensation fixed by

the High Court and did not wish to challenge the High Court judgment any

longer; hence, SLP (Civil) Nos. 3635 and 3711 of 2007 are dismissed as not

pressed. This leaves us to consider SLP (Civil) No. 4177 of 2007 filed by

the industrial establishment for which the acquisition was made.

2. The Government of Andhra Pradesh acquired altogether about 600

acres of land for the petitioner, Nagarjuna Fertilizers and Chemical Ltd. for

creation of green-belt around the industrial unit and for laying down pipes

for supply of water etc. The present SLP is in regard to lands measuring to

an area of 41.05 acres out of the total acquisition. The area of 41.05 acres,

forming the subject matter of dispute, was acquired in two proceedings. For 3

the area of 6.11 acres the notification under Section 4 of the Land

Acquisition Act was issued on 25 January 1991 and the acquisition

proceeding was concluded in award no.1/92. Another notification under

Section 4 of the Act was issued on 2 December 1991 for the area of 34.94

acres and the second proceeding concluded in award no.2 of 1992. For the

purpose of fixing the rate of compensation the Land Acquisition Officer

classified the lands covered by award no.1/92 in two categories. For

category one lands he fixed the market value @ Rs.42, 000/- Per acre and

for category two lands @ Rs.35, 200/- Per acre. The market value for the

lands covered under award no.2/1992 was fixed at the uniform rate of

Rs.37, 000/- Per Acre. The Land Acquisition Officer fixed the market value

as indicated above by firmly holding that the lands in question were purely

agricultural in nature. He also referred to an earlier acquisition under award

no.10 of 1988, dated 19 October 1988. In the earlier case the matter had

gone up to the High Court and the High Court had determined the amount of

compensation @ Rs.82, 600/- per acre. The Land Acquisition Officer

observed that there was no distinction between the lands covered by award

no.10 of 1988 and the present lands and hence, the rate of compensation

fixed for the earlier acquisition would be a good basis for fixing 4

compensation in the present proceeding. (See award of the Land Acquisition

Officer at Pp.30, 31 and 34 of the SLP brief).

3. Aggrieved by the awards made by the Land Acquisition Officer the

landholders took the matter to the reference court under Sec.18 of the Act.

Before the reference court it was strongly urged on behalf of the

claimants/landholders that the Land Acquisition Officer grossly erred in

treating the acquired lands as merely agricultural lands. The

claimants/landholders submitted that having regard to their location and the

developments all around the acquired lands had fully the potential of

developing into housing sites and as a matter of fact were fast taking up that

character; small pieces of land in close vicinity of or even abutting on the

acquired area were being sold for construction of dwelling units. In support

of their submission the claimants/landholders relied upon a number of sale

deeds (exts.B2 to B7) produced in evidence before the reference court. The

reference court accepted the case of the claimants/landholders and the

Principal Senior Civil Judge, Kakinada by his judgment dated 30 October

2000 held that the sale deed ext. B2 formed a sound basis for fixing the rate

of compensation for the acquired lands. Exhibit B.2 is in regard to the sale

of a piece of land, 110 sq. yards in area, that took place on 23 July 1990 for

a consideration of Rs.14, 850/-. The Principal Senior Civil Judge observed

that the piece of land sold under the sale deed ext.B.2 just abutted on the 5

acquired land. He also observed that though the sale transaction was

brought to the notice of the Land Acquisition Officer he rejected it on the

ground that it related to S No.248 where house sites were already made,

whereas the acquired land was not readily fit as a housing site. Discussing

the evidentiary value of ext. B.2 the Civil judge observed as follows:

"No suggestions are made to R.W.4 to the effect that Ex. B.4 (sic. Ex.B.2) transaction is fraudulent transaction or nominal transaction, as such it can be held that on considering the potential value of the site covered under Ex.B.2, R.W.4 purchased the house site covered under Ex.B.2 It is to be further held that the site covered under Ex.B.2 is under approved lay out made in the year 1987 itself. As such sale transaction under Ex.B.2 can be looked into, to see whether Ex.B.2 sale transaction can be relied upon as comparative or representative sale for fixation of the market value for the present acquired land."

4. The market value of the acquired land on the basis of the sale deed

ext.B.2 worked out to Rs. 6, 53,400/- per acre. The Civil judge deducted one

third of the value so arrived at as development cost and came to the figure

Rs.4, 35,000/- Per acre. It recorded its finding as follows:

"Accordingly I find that market value fixed by Land Acquisition Officer for the acquired land covered under O.P.203/93 at Rs.35, 200/- is not adequate. So also market value fixed by Land Acquisition Officer at the rate of Rs.37, 000/- for the lands covered under O.Ps. 200/93, 201/93, 205/93, 206/93 and 208/93 is not adequate. So also market value fixed at the rate of Rs. 42,000/- for the land covered under O.Ps. 202/93, 6

204/93, is not adequate and market value fore the above lands is enhanced to Rs. 4, 35,600/- per acre. Claimants are entitled to 12% additional market value on the enhanced market value, 30% Solatium on enhanced market value. Claimants are also entitled to interest at 9% p.a. for one year from the date of taking possession and thereafter at 15% p.a. till payment of enhanced market value on the enhanced market value. Claimants are not entitled to interest on additional market value and Solatium."

5. Against the order passed by the reference court, the petitioner filed

appeals before the Andhra Pradesh High Court. During the pendency of the

appeals the petitioner also brought on record certified copies of the earlier

decrees and judgments of the High Court dated 11 August 2003 in A. S. No.

906/1999 and dated 28 February 2005 in A. S. No. 664/2000 by which

compensation for the lands acquired in 1985 for the same purpose of

creation of Green Belt for the petitioner's factory was fixed @ Rs.82, 600/-

per acre.

6. The High Court, however, didn't disturb the basic premise of the

Civil Judge that the sale deed ext.B.2 served as a good basis for fixing the

market value of the acquired land. But having regard to the small area of the

land transferred under the sale deed ext.B.2 and further in view of the

undeveloped state of the acquired land at the time of acquisition deemed fit

to deduct as development charges 50% from the market value of the land 7

fixed on the basis of ext.B2. Thus by its judgment and order dated 9 October

2006 the High Court arrived at the figure of Rs.3, 25,000/- per acre and

fixed the compensation at that rate. The High Court further clarified that the

claimants would be entitled to 12% towards additional market value and

other statutory benefits as laid down in the judgment of this Court in Sunder

Vs. Union of India, AIR 2001 SC 3516

7. Mr. Parasaran Learned Senior Counsel appearing for the petitioner

assailed the High Court judgment for accepting the sale deed ext.B.2 as the

basis for fixing the rate of compensation and merely enhancing the ratio of

deduction from 1/3rd to half. Learned counsel submitted that the entire

approach of the Civil Judge and the High Court was quite wrong. The sale

deed, ext.B.2 was in respect of a very small piece of land, only 110 square

yards in area that was purchased with the declared intent to construct a

dwelling house. The consideration shown in ext.B.2 could not, therefore,

form the basis for determining the rate of compensation for the acquired

land.

8. Mr. Parasaran submitted that the real controversy in the matter is

whether at the time of acquisition the acquired land was agricultural or it

had the potential to develop into a housing site. He took the stand that the

acquired land was nothing but agricultural and it was wrong to see in it any

potential to develop into a site for construction of houses. He further 8

submitted that the Land Acquisition Officer had rightly taken the land as

purely agricultural. In support of the submission he invited our attention to

different passages in the awards made by the Land Acquisition Officer. He

also referred to the statements of witnesses examined before the court to

contend that the acquired land was agricultural in nature and had no

potential to develop into a housing site.

9. Mr. Parasaran submitted that the High Court disposed of the appeal in

a very perfunctory manner. He also stated that the observations made by the

High Court in Paragraph 4 of the judgment hardly justified the final order

passed in the appeals. Learned counsel also questioned the direction of the

High Court for deduction of 50% as development charges from the value of

the land fixed by the court and contended that in the facts of the case the

ratio of deduction should have been much higher. In support of the

submission he relied upon several decisions of this Court which we do not

consider necessary to mention here.

10. Mr. Parasaran also referred to the earlier judgment and decree of the

High Court dated 8 November 2003 by which compensation for the lands

acquired in the year 1985 was fixed @ Rs.82, 600/- per acre.

11. Mr. Parasaran placed strong reliance on the government order bearing

G. O. Ms. No.81 H. M. Agrl. U.D. Dept. (12) M. A. dated 23 February 1989

issued by the Govt. of Andhra Pradesh and published in the AP gazette 9

issue no. 14 dated 6 April 1989. The aforesaid order prohibited any

constructions on the lands around the industrial unit or the sale of those

lands as house sites and set apart the use of those lands for the purpose of

green belt and afforestation. The learned Counsel submitted that in view of

the government order it was meaningless and futile to contend that the

acquired lands had the potential of developing into housing sites since such

user of the land was expressly prohibited by the government.

12. Learned Counsel appearing on behalf of the respondents/claimants

supported the Judgment of the Civil Judge and submitted that he rightly

took into account the potential of the acquired land to develop into a

housing site. Learned counsel submitted the finding that the acquired lands

had the potential to develop into housing sites is one of fact, arrived at on

proper appreciation of the evidences brought before the Civil Judge and

warranted no interference by this Court. He further submitted that as a

matter of fact the claimants/landholders at one time felt aggrieved by the

large deduction, directed by the High Court from the market value of the

acquired land but they no longer wanted to make an issue of it. Learned

counsel submitted that there was a background to the acquisition of the

lands, forming the subject matter of dispute. In a public interest litigation

filed against the petitioner industrial unit for causing heavy environmental

pollution the Court directed for creation/extension of the green belt around 10

the factory unit and that led to further acquisition of lands, including the

lands forming the subject matter of the present dispute. Learned counsel

submitted the net result is that the common man went to the Court

complaining about the petitioner industrial establishment causing

environmental pollution and ended up by having his lands forcibly acquired

for creation/extension of the green belt.

13. In regard to the 1989 government order earmarking the lands around

the factory for afforestation and setting-up the green belt learned counsel

submitted that the Government order was published in the gazette on 6

April 1989 just a few months before the issuance of the Sec. 4 notifications

on 25 January 1991 and 2 December 1991. He further submitted that

having regard to the back ground in which the acquisitions were made it

would be quite unjust and unreasonable to put a cap onto the compensation

for the acquired lands on the basis of the government order completely

disregarding the potential inherently acquired by the lands in question as a

result of the developments taking place all around in the natural course.

14. On hearing counsel for the parties and on a careful consideration of

the materials on record we are satisfied that this matter doesn't merit any

interference by this Court. The Civil Judge came to hold and find that the

acquired lands had the potential to develop into housing sites and

accordingly took ext.B.2 as the basis for fixing the rate of compensation. 11

The High Court having regard to the present state of the lands enhanced the

ratio of deduction to half of the market value as worked out on the basis of

ext. B2. We are satisfied that compensation awarded by the High Court to

the claimants/landholders is correct, just and proper and warrants no

interference by us.

15. This special leave petition is dismissed. The parties shall bear their own costs.

......

........................J. [Tarun Chatterjee]

..............................J. [Aftab Alam]

New Delhi, November 21, 2008.