vil Appeal No 453 NL of 1984
From the Judgment and Order dated 195
1983 of the Allahabad High Court in CM WP
No 8798 of 1980
K Ramamurthi and RD Upadhyay for the Appellant
Anil Kumar Gupta for the Respondents
The Judgment of the Court was delivered by SHARMA J
This appeal by special leave is directed against the judgment of the Allahabad High Court dismissing the appellant s writ petition challenging an award of the Industrial Tribunal
The appellant was working as an Assistant Cashier in the Rampur Zila Sahkari Bank Ltd when a reference of an industrial dispute was made under section 4 A of the U P
Indus trial Disputes Act 1947 hereinafter referred to as the UP Act
The provisions of the U P
Act relevant to the present case are similar to those of the Central Act that is the 
Section 4 K of the UP Act like the corresponding section 10 of the Central Act empowers the State Government to refer industrial disputes to Labour Courts or Tribunals
During the pendency of the reference the appellant was put under suspension and served with a charge sheet in February 1976 which was followed by a domestic inquiry leading to the dismissal of 413 the appellant from service on 168
The UP Act in sections 6 E and 6 F incorporates provisions similar to those in ss 33 and 33 A of the Central Act
The appellant filed a complaint under section 6 F of the UP Act before the Industrial Tribunal and the same was treated as a dispute referred to it and was finally disposed of by the Award which was im pugned before the High Court
The Tribunal in the first instance examined the case of the appellant on the question whether principles of natural justice had been followed in the domestic inquiry and after hearing the parties
decided the issue by its order dated 232
1979 in favour of the workman
Proceeding further the Tribunal asked the management to justify the order of punishment on merits
Accordingly the parties led their evidence and the Tribunal recorded a finding that the charges levelled were established by the materials on the record and the workman therefore was not entitled to any relief
As stated earlier the appellant challenged the award before the Allahabad High Court by filing a writ petition
By a well discussed judgment which is now under challenge before us the High Court dismissed the writ application
Mr Ramamurthi the learned counsel appearing in support of the appeal has raised before us the following two points i After recording its conclusion that the domestic inquiry was vitiated on account of violation of principles of natu ral justice the Tribunal was under the duty of announcing its award in favour of the appellant and since there was no application filed on behalf of the employer for permission to justify the punishment by leading evidence the Tribunal exceeded its jurisdiction in asking the management to do so
ii In any event the appellant was entitled to his salary for the period 1681976 that is the date of his dismiss al to 207
the date of the Award of the Tribunal
Mr Ramamurthi contended that after the conclusion reached by the Tribunal that the domestic inquiry held by the employer was illegal
question of justification of the impugned punishment by fresh 414 materials could arise only if the management had applied to the court for permission to justify the punishment and in the absence of such a prayer the Tribunal did not have the power to call upon the employer to do so
In order to pro ceed further with the Reference for the above purpose it was essential to have a pleading in this regard along with an express prayer by the employer and the Tribunal was not entitled to adopt an advisory role by informing the employer of its rights namely the right to adduce additional evi dence to substantiate the charges
The learned counsel heavily relied on the decision of this Court in Shankar Chakravarti vs Britannia Biscuit Co   which was governed by the Central Act
As rightly urged on behalf of the appellant a relevant decision under the Central Act must be held to apply to a case under the UP Act since the provisions of the two Acts are in pari mate ria
However the case cited is not an authority for the point urged by the learned counsel and he therefore cannot take any aid therefrom
In the aforementioned case the Tribunal came to the conclusion that the inquiry was conducted in violation of the principles of natural justice and was therefore viti ated and the award was pronounced rejecting the application of the management under section 332b for approval of the action terminating the service of the employee
The employer challenged the award in a writ case before the Calcutta High Court on the ground that the Tribunal was under a duty to call upon the management to lead evidence in support of the correctness on merits of the order of punishment which was not done
It was not a case of a prayer having been made by the employer which was rejected
This aspect has been spe cifically mentioned in the judgment and it was further observed that before the learned single Judge who heard the writ case no plea was raised about any denial of opportunity to the respondent Company to lead evidence in proof of charges after the domestic inquiry was found to be defec tive
The writ petition was dismissed by the learned single Judge and the employer Company preferred a Letters Patent Appeal which was allowed by a Division Bench observing that after holding that the domestic inquiry was defective it was incumbent upon the Tribunal to give an opportunity to the employer to lead evidence to prove the charges and as this was not done the award was vitiated in law
This Court in appeal disagreed with the Division Bench of the High Court and reversed the judgment
It was held that if an opportunity is sought by the employer to adduce additional evidence to substantiate the charges of misconduct the Tribunal or the Labour Court as the case may be should grant the 415 opportunity
But if no such opportunity is sought nor there is any pleading to that effect no duty is cast on the Labour Court or the Industrial Tribunal suo motu to call upon the employer to adduce additional evidence to substantiate the charges
 It was pointed out that there was neither a plead ing in which any claim for adducing additional evidence was made nor any request was made before the Industrial Tribu nal till the proceedings were adjourned for making the Award and till the Award was made
The judgment relied upon does not support the proposition formulated before us that in absence of a prayer the Tribunal is debarred from reminding the employer of his right to adduce additional evidence to substantiate the charges
We do not find any valid ground for accepting the stand of the appellant taken before us
The entire argument of the learned counsel is rounded on the decision of this Court in Chakravarti s case which is clear ly distinguishable
As has been stated earlier in that case the Court was not called upon to consider the point as urged before us and the judgment repeatedly made it clear that what was under consideration was whether a duty has been cast in law on the Labour Court or the Tribunal to afford an opportunity to the employer in absence of a request and the question was answered in negative leading to the conclusion that  if there is no such obligatory duty in law failure to give any such opportunity cannot and would not vitiate the proceedings  8
Analysing the situation it appears that by asking the respondent to justify the punishment by adducing addi tional evidence
the Tribunal merely reminded the employer of his rights and the employer promptly availed of the opportunity
We do not find any illegality in the course adopted which could vitiate the Award
The first point is
therefore rejected
The second ground urged in support of the appeal appears to be well founded
The learned counsel is right in relying on the observations in Gujarat Steel Tubes Ltd vs Gujarat Steel Tubes Mazdoor Sabha  at p 215 that if the order of punishment passed by the manage ment is declared illegal and the punishment is upheld subse quently by a labour tribunal the date of dismissal cannot relate back to the date of the illegal order of the employ er
The appellant is therefore entitled to his salary from 168
1976 to 207
1980 and the entire amount should be paid by the respondent Bank within a 416 period of three months from today  If the amount is not paid or offered to the appellant as directed the respondent Bank will be liable to pay interest thereon at the rate of 12 per annum for the future period commencing on the date of expiry of three months from today till the same is rea lised
The appeal is allowed in part as indicated above
The parties shall bear their own costs
PSS Appeal partly allowed


Summary:
The respondent State had acquired a large extent of land out of the appellant s estate under the Kerala Land Acquisi tion Regulation 1089 for river valley irrigation project and to establish an industrial project
The notification under Section 41 of the Regulation was published on Octo ber 31 1961
This was followed by the declaration under Section 61 published on February 22 1962
The Collector by his awards dated March 29 1962 deter mined the market value under Section 221 of the Regulation at ReO04 per cent for certain lands ReO12 per cent for certain other lands and Rs30 per cent for the wet lands as against the claim of Rs40 and 50 per cent
Compensation for the trees at timber value was also given
The total compen sation fixed was Rs484 lakhs
Dissatisfied therewith the appellant sought reference under Section 18 of the Regulation
They also claimed sepa rate value for fruit bearing trees on potential value and charges for severence and injurious effects on the remaining lands
In support of the claim they relied on exhibit P 7 dated March 9 1951 and exhibit P 9 dated April 4 1957 which worked out at Rs5250 and Rs4350 per cent respectively and the acquisition forming subject matter of exhibit P 10 pertaining to the land in the vicinity of the industrial project award ed at the rate of Rs80 per cent for paddy lands and Rs43 for dry land
The Government pleader stated before the civil court that exhibit P 9 could form the basis for determining the market value
The court enhanced the market value  Rs40 50 per cent as claimed in addition to a sum of Rs30 to 38 per cent
It awarded in all Rs2020 lakhs on all counts includ ing severence and injurious effects 15 per cent solatium and also 6 per cent interest on additional compensation from the date of taking possession till date of payment
363 The High Court found that the lands covered by exhibit P 7 and exhibit P 9 were paddy lands cultivated by irrigation sources and situated about four miles away from the acquired lands which were not irrigated and therefore held that these could not form the basis for determining market value
Similarly it found exhibit P 10 could not form a base to fix the market value
The High Court did not accept the evidence adduced by the State which was rejected by the civil court as well
The statement made by the State Advocate General across the bar that the market value could be fixed at Rs 18 per cent was also not taken into account
Consequently it reversed the awards and decrees of the civil court
In these appeals by special leave it was contended for the appellant that having rejected the documents produced by the State the High Court ought to have relied upon the documents produced by the appellant as comparable sales and consumed the compensation awarded by the civil court that exhibit P 7 9 and 10 furnished the best material that the Government pleader had conceded before the trial court that exhibit P 9 could form the basis for determining the market value that they had incurred huge expenditure on civil works for protection of the rest of the estate from injuri ous effects for which they should be recompensated that the potential value of the trees had to be taken into account in determining the market value that they were entitled to compensation for severence due to submersion of the lands and that they were also entitled to payment of interest on solatium
Allowing the appeals partly the Court HELD 11 When the Courts are called upon to fix the market value of the land in compulsory acquisition the best evidence of the value of property is the sale of the ac quired land to which the claimant himself is a party in its absence the sales of the neighbouring lands possessed of similar potentiality or fertility or other advantageous features made within a reasonable time of the date of noti fication in bona fide transactions on the hypothesis of a willing seller and a willing purchaser but not too anxious a buyer dealing at arms length nor facade of sale or ficti tious and unreal transactions of speculative nature brought into existence in quick succession or otherwise to inflate the market value
This however does not preclude the Court from taking any other special circumstances into considera tion the requirement being always to arrive at as nearly as possible an estimate of the market value judged by an objec tive standard
181C 182D 364 Gajapati Raju vs Revenue Divisional Officer  Special Land Acquisition Officer vs Adinarayana Setty 1959 Suppl
1 SCR 404 Tribeni Devi  Ors
vs Collector of Ranchi   Dollor Co Madras vs Collector of Madras  Chandra Bansi Singh  Ors etc vs State of Bihar  Ors etc   Tahsildar Land Acquisition Visakhapatnam vs P Narasingh Rao  Ors  Collector Raigarh vs Hari Singh Thakur  Anr   Administrator General of West Bengal vs Collector Varanasi   Mehta Ravindrarai Ajitrai vs State of Gujarat  and Hindustan Oil Co Ltd vs Special Duty Collector Land Acquisition 1990 1 SCR 59 referred to 12 The prices fetched for smaller plots cannot form basis for valuation of large tracts of land as the two are not comparable properties
Smaller plots always would have special features like the urgent need of the buyer the advantageous situation the like of the buyer etc
Similar ly the land situated on the frontage have special advantage and the land situated in the interior undeveloped area will not have the value at par since the latter will have lower value then the former
So is the case with orchard land and agricultural land the former being superior in quality as compared to the latter
If such sales are relied upon rea sonable reduction should be given
182B C Smt
Kaushalva Devi Bogra  Ors
vs The Land Acqui sition Officer Aurangabad  Anr   Pridviraj vs State of Madhya Pradesh   Padma Uppal etc
vs State of Punjab  Ors 1977 1 SCR 329 Chimanlal Hargovinddas vs Special Land Acquisition Officer Poona  Anr  and Mantaben Manibhai vs Special Land Acquisition Officer Baroda AIR  referred to
13 In some cases for lack of comparable sales it may not be possible to adduce evidence of sale of the neighbour ing lands possessed of same or similar quality
So insist ence on abduction of precise or scientific evidence would cause disadvantage to claimants in not getting the reasona ble and proper market value
The courts of facts should therefore keep before them always the even scales to adopt pragmatic approach without indulging in facts of imagination and assess the market value which is capable to fetch rea sonable compensation
They may in that process sometimes trench on the border of the guess work but mechanical as sessment should be eschewed
Misplaced sympathies or undue emphasis solely on the claimants  right to compensation would 365 place heavy burden on the public exchequer to which everyone contributes by direct or indirect taxes
185D G 184F G 14 In the instant case the High Court found that exhibit P 7 and P 9 relied on by the civil court were not applica ble as the lands covered by them were paddy fields cultivat ed by irrigation sources and situated four miles away from the acquired unirrigated lands
Similarly it also found that exhibit P 10 could not be relied on
The High Court therefore could not be said to be unjustified in reversing the awards and decrees of the civil court
186B D 2
The amount awarded by the Land Acquisition Collector forms an offer
It is for the claimants to adduce relevant and material evidence to establish that the acquired lands were capable of fetching higher market value and the amount offered by the Land Acquisition Collector was inadequate and he proceeded on a wrong premise or principle
It is also the duty of the State to adduce evidence in rebuttal
183B G Ezra vs Secretary of State for India ILR  Raja Harish Chandra vs Dy
Land Acquisition Officer  Khorshed Shapoor Chenai etc
vs As sistant Controller of Estate Duty   Dr GH Grant vs State of Bihar   Asstt
Development Officer vs Tayaballi AIR  Tah sildar Land Acquisition Visakhapatnam vs P Narasingh Rao Secretary of State AIR 1919 Cal
1008 Naresh Chandra Bose vs State of West Bengal  Ors AIR 1955 Cal 398 Smt
Kusumgauri Ramray Munshi  Ors
vs The Special Land Acquisi tion Officer Ahmedabad  Maharao Shri Madansinhji vs State of Gujarat AIR 1969 Gujarat 270 and Chaturbhuj Panda  Ors
vs Collector Raigarh   referred to
22 In the instant case the evidence produced by the appellant was found untrustworthy by the High Court
It also did not accept the evidence adduced by the State
186E F 31 The Appellate Court after rejecting the evidence may have to find whether there are any circumstantial or other material evidence on record to fix reasonable market value
The State Advocate General having stated across the bar in the High Court that the market value can be fixed at Rs18 per cent a concession made by him with all responsibility on behalf of the State the High Court was not justified in 366 not taking into account this submission
186G I87B 32 Any concession made by the Government pleader in the trial court cannot bind the Government as it is always unsafe to rely on the wrong or erroneous or wanton conces sion made by the counsel appearing for the State unless it is in writing on instructions from the responsible officer
Otherwise it would place undue and needless heavy burden on the public exchequer
187C 33 The claimants are therefore entitled to the market value  Rs18 per cent to the lands other than those to which the Collector awarded  Rs30 per cent as the refer ence court shall not reduce the market value to less than that awarded by the Collector as enjoined under the statute
From the very nature of compulsory acquisition 15 per cent solatium as additional compensation was statutorily fixed
Therefore determination of additional market value is unwarranted
187E 34 Section 253 of the Regulation contemplates payment of interest on solatium to recompensate the owner of the land for loss of user of the land from the date of taking possession tilldate of payment into court
The claimants are therefore entitled to interest on solatium
It is fixed at 6 per cent on the excess market value determined under the judgment including solatium from the date of taking possession till the date of payment
In other re spects judgment of the High Court is confirmed
189G 190B Union of India vs Shri Ram Mehar  Anr 1973 2 SCR 720 referred to 4
The Commissioner who collected the evidence in re spect of the injurious effects on the remaining lands of the claimants admitted in the cross examination that the appel lant did not expend any money on civil works
Though from the date of the acquisition till the date of evidence more than six years had passed by the appellant had not produced any material or account books of the estate to establish that they have expended any money in this regard
Both the engineers examined on behalf of the State and also appel lant s witnesses admitted that the road passing through the lands was being used by the appellant to carry its forest produce etc
Though during rainy season that too for a short period at some places the water gets stagnated on the roads at lower levels but that stand no impediment for the car riage of the goods
This phenomena was prevalent even before acquisition
The value of the land of the appellant had not been injuriously effected due to acquisition
No 367 damage due to severence was caused
Under these circum stances the appellant was not entitled to compensation in this regard
187F 188D 5
The Sub Judge appears to be too anxious to award whatever is asked for on mechanical appreciation without subjecting the evidence to legal and critical scrutiny and analysis
In such a case even if the assessment of valua tion is modified or affirmed in an appeal as apart of the judicial process the conduct of the judicial officer drawable from an overall picture of the matter would yet be available to be looked into
In appropriate cases it may be opened to draw inferences even from judicial acts of the misconduct
The person concerned shall not therefore camouflage the official act to a hidden conduct in the function of fixing arbitrary or unreasonable compensation to the acquired land
VR Katarki vs State of Karnataka  Ors Civil Appeal No 4392 of 1986 decided on March 22 1990 referred to