:1: IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 21ST DAY OF AUGUST 2018 PRESENT THE HON'BLE MR. JUSTICE G. NARENDAR AND THE HON'BLE MR. JUSTICE [ENTITY] MFA NO.100191/2016 (LAC) C/W [CASE NUMBER] AND [CASE NUMBER] IN MFA NO.100191/2016 BETWEEN: 1. JINNAPPA S/O CHAYAPPA CHINAGI AGE: MAJOR, OCC:AGRICULTURIST, R/O SATTUR, DHARWAD. 2. RAMAPPA S/O CHAYAPPA CHINAGI AGE: MAJOR, OCC:AGRICULTURIST, R/O SATTUR, DHARWAD. APPELLANTS (BY [ENTITY] & SRI. ANANDKUMAR A. MAGADUM, ADVS.) AND: 1. THE [ENTITY] 2. [ENTITY] REP. BY CHIEF ENGINEER S.W. [ENTITY], KESHWAPUR, HUBLI-580023. RESPONDENTS (BY [ENTITY], AGA FOR R1) (BY SRI. [ENTITY], ADV. FOR R2) THIS APPEAL IS FILED UNDER [SECTION] OF THE [ACT] AGAINST THE [ENTITY] AND AWARD DATED 15.10.2015 PASSED IN [CASE NUMBER] ON THE FILE OF THE II ADDL. SENIOR CIVIL JUDGE AND AMACT, :2: DHARWAD, PARTLY ALLOWING THE PETITION FILED UNDER [SECTION] OF THE [ACT]. IN [CASE NUMBER]: BETWEEN: ANANT S/O [ENTITY] AGE: 55 YEARS, OCC:AGRICULTURIST, R/O SATTUR, DHARWAD. APPELLANT (BY [ENTITY] AND SRI. [ENTITY], ADVS.) AND: 1. THE [ENTITY] 2. [ENTITY] REP. BY CHIEF ENGINEER S.W. [ENTITY], KESHWAPUR, HUBLI-580023. RESPONDENTS (BY [ENTITY], AGA FOR R1) (BY SRI. [ENTITY], ADV. FOR R2) THIS APPEAL IS FILED UNDER [SECTION] OF THE [ACT] AGAINST THE [ENTITY] AND AWARD DATED 15.10.2015 PASSED IN [CASE NUMBER] ON THE FILE OF THE II ADDL. SENIOR CIVIL JUDGE AND AMACT, DHARWAD, PARTLY ALLOWING THE PETITION FILED UNDER [SECTION] OF THE [ACT]. IN [CASE NUMBER]: BETWEEN: [ENTITY] S/O BASAPPA CHINAGI DECEASED BY HIS LRS. 1(A) SMT. [ENTITY] W/O [ENTITY] CHINAGI AGE: 73 YEARS, OCC:HOUSEHOLD, :3: 1(B) SMT. [ENTITY] W/O [ENTITY] DEVAKI AGE: 58 YEARS, OCC:HOUSEHOLD, 1(C) SMT. [ENTITY] W/O ANANT DHARWAD AGE: 55 YEARS, OCC:HOUSEHOLD, 1(D) [ENTITY] S/O DEVENDRAPA CHINAGI AGE: 53 YEARS, OCC: AGRICULTURE, 1(E) [ENTITY] S/O [ENTITY] CHINAGI AGE: 50 YEARS, OCC: AGRICULTURE, 1(F) [ENTITY] S/O [ENTITY] CHINAGI AGE: 48 YEARS, OCC:AGRICULTURE, 1(G) [ENTITY] W/O ANANTAPPA YOGAPPANAVAR AGE: 45 YEARS, OCC:HOUSEHOLD, 1(H) [ENTITY] W/O PADMAPPA HULLAMBI AGE: 41 YEARS, OCC:HOUSEHOLD, 1(I) [ENTITY] W/O SHASHIKANT NAVALGUND AGE: 38 YEARS, OCC:HOUSEHOLD, ALL ARE R/O SATTUR VILLAGE, TQ & DIST: DHARWAD. APPELLANTS (BY [ENTITY] AND SRI. [ENTITY], ADVS.) AND: 1. THE [ENTITY] 2. [ENTITY] REP. BY CHIEF ENGINEER S.W. [ENTITY], KESHWAPUR, HUBLI-580023. RESPONDENTS (BY [ENTITY], AGA FOR R1) (BY SRI. [ENTITY], ADV. FOR R2) :4: THIS APPEAL IS FILED UNDER [SECTION] OF THE [ACT] AGAINST THE [ENTITY] AND AWARD DATED 15.10.2015 PASSED IN [CASE NUMBER] ON THE FILE OF THE II ADDL. SENIOR CIVIL JUDGE AND AMACT, DHARWAD, PARTLY ALLOWING THE PETITION FILED UNDER [SECTION] OF THE [ACT]. THESE APPEALS HAVIGNG BEEN HEARD AND RESERVED FOR [ENTITY] ON 24.07.2018, COMING ON FOR PRONOUNCEMENT THIS DAY, [ENTITY] J., DELIVERED THE FOLLOWING: [ENTITY]
These appeals are filed by those erstwhile owners whose lands situated in Sattur Village of Dharwad are acquired for for the purposes of construction of Railway Station Goods Yard and C and W Facilities. These appeals are filed impugning the judgment and award dated 15.10.2015 in [CASE NUMBER] on the file of the II Addl. Senior Civil Judge and MACT Dharwad, (for short, 'Reference Court'). The Reference Court by the impugned common judgment dated 15.10.2015 has allowed the references under [SECTION] of the [ACT], (for short, 'Act') in part by determining the market value of the acquired lands at the rate of Rs.40,000/- per gunta holding that the appellants are accordingly entitled for statutory benefits and interests as permissible under the Act. However, the appellants have preferred these appeals seeking higher market value for their lands.
On 22.08.2007, a notification under [SECTION] and [SECTION] of the Act was issued for acquisition of an extent of 9 acres of land in Sattur Village of Dharwad. The final notification under [SECTION] of the Act was issued on 20.02.2008 and possession of these acquired lands was delivered to the Railways on 26.05.2008. The Special Land Acquisition Officer declared the award on 12.11.2008 fixing the market value of the lands at Rs.3,743.25 per gunta. Upon a reference being made to the Reference Court under [SECTION] of the Act at the instance of the appellants, the Reference Court by its common award dated 13.10.2011 determined the market value of the appellants' lands at the rate of 35,000/- per gunta.
The Reference Court's common judgment and award dated 31.10.2011 was impugned by the appellants in respective appeals before this Court. These appeals were disposed of by a Co-ordinate Bench of this Court remanding the references back to the Reference Court and directing the Reference Court to consider the appellants' claim for enhancement in the market value based on the sale deeds viz. Ex.P1 to P4 as the appellants claimed that these sale deeds were for exemplar lands.
The appellants, upon remand by this Court to the Reference Court for re-consideration, filed applications under [SECTION] of [ACT] seeking permission to amend the reference applications for determination of the market value of the subject lands at the rate of Rs.3,00,000/- per gunta. These applications were allowed by the Reference Court and the appellants were permitted to amend the reference applications accordingly. In view of the fact that both the appellants and respondents submitted that they had neither additional ocular nor documentary evidence, the Reference Court heard the appellants and the respondents, and by the impugned judgment and award dated 15.10.2015 allowed the reference applications determining the market value of the appellants' lands (referred to 'subject lands') at the rate of Rs.40,000/- per gunta with statutory benefits as noted supra. The appellants have filed these appeals seeking enhancement in the market value at the rate of Rs.2,50,983/- per gunta.
The Reference Court has held that the values mentioned in such Sale Deeds Exs.P1 to P4 cannot be taken as exemplar value for determination of the market value of the subject lands. The Reference Court has pointed out the following differences between the residential properties as per Ex. P 1 to P3 in [CASE NUMBER] of Sattur Village (referred to as 'exemplar parcels of land') and the subject lands:
that the exemplar parcels of the lands measure about 150 Sq.mts. - 233 Sq.mts are in the lands of [CASE NUMBER] of Sattur Village that immediately abut NH.4 or were before the railway crossing i.e. between NH.4 and railway crossing while the subject lands are larger extents1 of land and situate after the railway crossing. that even as admitted by the witnesses examined on behalf of the appellants and the revenue map (marked as Ex. P4), the railway track between Dharwad and Hubballi runs parallel to NH.4 with the exemplar parcels of land in [CASE NUMBER] to the right hand side of the railway track and the The details of the appellants' lands that are notified for acquisition are as follows:
(a) In [CASE NUMBER] (MFA 100190/2016) - 13 guntas in Sy.No.125/2B/1-P1 of Sattur Village Dharwad taluk,
(b) In [CASE NUMBER]) - 32 guntas in Sy.No.120/1 of Sattur Village Dharwad taluk, and subject lands to the left hand side of the railway track.
that one could reach the subject lands from NH.4 only after crossing the railway cross while the exemplar parcels of land are before the railway crossing, and that there were no developments in the immediate neighborhood of the subject lands while there were developments (like Dental and Medical Colleges, Hotels, and Plots developed by Hubballi- Dharwad Municipal Corporation and sold in public auction) in the properties that are to the right side of the railway track including the exemplar parcels of the lands.
The Reference Court for these reasons has refused to place reliance upon the Sale Deeds vide Exs.P1 to P3.
(c) In [CASE NUMBER]) - 25 guntas in [CASE NUMBER] of Sattur Village Dharwad taluk. But, the Reference Court has abruptly concluded that the appropriate market value of the subject lands that were acquired during the year 2007-08 would be Rs.40,000/- per gunta while noting that it had earlier determined the market value of the subject lands at Rs.35,000/- per gunta. The appellants have filed these appeals seeking enhancement of the market value of the subject lands by a sum of Rs.2,50,983/- per gunta, that is in addition to Rs.40,000/- per gunta as determined by the Reference Court.
Smt. [ENTITY], the learned counsel for the appellants argued that the determination of the market value of the subject lands by the Reference Court at the rate of Rs.40,000/- per gunta is arbitrary and without any basis. The learned Counsel urged that the Reference Court ought to have seen that the Sale Deeds (Exs.P1 to Ex.P3) for the exemplar parcels of land are executed between January 2007 and February 2008, that the exemplar parcels of land are in Sy.Nos.96 and 109 of Sattur Village Dharwad Taluk, that these lands and the subject lands are in the same village, that as per these Sale Deeds, the market value of the exemplar parcel of lands as of the relevant period was - at the least - Rs.2,90,983/- per gunta and that these lands in Sy.No.96 and 109 and the subject lands were bifurcated only by a running railway track. Therefore, the Reference Court ought to have considered the values as mentioned in Ex.P1 to P3 for determining the market value of the subject lands with permissible deductions from such values for the differences, if any, between these very comparable exemplar parcels of land and subject lands.
Further, the learned counsel also urged that an application under [SECTION] of [ACT] is filed seeking permission to produce Sale Deeds executed by Hubballi-Dharwad Urban Development Authority during the period 2005-06 transferring residential plots developed in the lands in Sy.No.109/5 and 106/2 of Sattur Village; that even according to these Sale Deeds, which relate to the period prior to the subject notifications, the value of the developed property in the village was Rs.1,74,167/- per gunta. The learned counsel, to emphasize that there were developments in the immediate vicinity of the subject lands even as of the date of the notification, submitted that a copy of the Possession Certificate issued by the Karnataka Industrial Area Development Board to M/s. Sree Dharmasthala Manjunatheswara Education Society handing over possession of the different lands in Sattur Village of Dharwad is produced and that M/s. Sree Dharmasthala Manjunatheswara Education indisputably Society has developed Dental/ Medical College in such lands.
Insofar deductions from the values mentioned in EX. P1 to P3 (the exemplar sale deeds), the learned counsel for the appellants contended that that the first of such deductions should be at the rate of 20% of the values mentioned in the Sale Deeds viz. Exs.P1 to P3 (and the Sale Deeds produced as additional documents produced before this Court along with an application under [SECTION] of [ACT]) as such sale deeds pertain to auction transfers and the other deduction from the values mentioned in these exemplar Sale Deeds towards cost of development should be at the rate of 33.5%. The learned counsel was emphatic that the total deduction from the exemplar values under Exs.P1 to 3 towards cost of development and auction value cannot be more than 53.5%.
The learned counsel relied upon the decision of the Hon'ble Supreme Court in the case of [PRECEDENT] as regards the first deduction at the rate of 20% and in [ENTITY] vs. The State of Haryana3 for the other deduction at the rate of 33.5%. It is based on these submissions that the learned counsel justified the claim for enhancement in the market value of the subject lands.
Smt. [ENTITY], the learned Additional Government Advocate and Sri. [ENTITY], the learned counsel for the beneficiary, on the other hand, refuted the submissions by the learned counsel for the appellants. They contended that, at the first instance, Exs P1 - P3 (and the Sale Deeds produced as additional documents before this Court) cannot be used as exemplar deeds because the enhancement is being sought in respect of subject lands that are agricultural lands and Exs.P1-P3 relate to small residential plots purchased in auction and such residential plots are AIR 2011 SC 781 (2013) 5 SCC 527 before the Railway Crossing. Further, they contended that even if the values in such sale deeds viz. P1 to P3 could be used as exemplar values, the maximum deduction of 75% from the value of the transactions under Exs.P1 - P3 (referred to as the "exemplar Sale Deeds") should be applied. They buttressed this argument relying upon the decision of the Hon'ble Supreme Court in [ENTITY] (Dead) by Legal Representatives and others vs. the Land Acquisition Officer and another4 and in [ENTITY] and Others vs State of Haryana5.
The learned counsel for the appellants, in reply to such submissions, submitted that it is indisputable that the subject lands are also within the urban conglomeration with non-agricultural potential, and therefore, the values mentioned in the exemplar Sale Deeds should be used as exemplar values for the (2012) 1 SCC page 39 (2015) 5 SCC page 801 purposes of determining the market value of the subject lands. The learned counsel sought to justify the description of the subject lands as lands with Non- agricultural potential and the relevance of exemplar Sale Deeds emphasizing upon the developments in the different lands in Sattur Village, like existence of a residential layout developed by Hubballi-Dharwad Municipal Corporation, industrial area developed by Karnataka Industrial Area Development Board, existence of medical and dental colleges established by Sree Dharmasthala Manjunatheswara Education Society and other commercial establishments.
In view of the rival submissions, the questions that arise for consideration in these appeals are:
whether the determination of Rs.40,000 per gunta by the Reference Court represents the true market value of the subject lands; and if Rs.40,000/- per gunta does not represent the true market value, what amount should be taken as representing the true market value for the subject lands.
The subject lands are at Sattur Village of Dharwad Taluk, and it is obvious from the discussion by the Reference Court, the evidence on record and submissions by the learned counsel for the parties that there is no serious dispute about Sattur Village of Dharwad Taluk being part of the surge in development around the Hubli- Dharwad area even as of the date of the present notification and the development of residential plots (including the exemplar parcels of land) by Hubballi-Dharwad Municipal Corporation and an industrial Area and the Karnataka Industrial Area Development Board respectively in this Village. It is also obvious that there is no dispute that such developments are in those lands of this village that are between National Highway - 4 and Railway Track (and some of the developments are also beyond the National Highway - 4). However, the crucial difference between the subject lands and exemplar parcels of lands, as could be discerned from the evidence on record, is that these developed lands either abut National Highway or have easy access from the National Highway whilst the access to the subject lands from the National Highway - 4 is hindered because one has to cross Railway Crossing to reach the subject lands.
The aforementioned undisputed circumstances, despite the crucial difference in that the access to the subject lands from the National Highway is through a Railway Crossing, establish that the market value for the subject lands should be decided on the basis that the subject lands are lands with non-agricultural potential rather than as agricultural lands. The appellants to establish the market value of such developed areas have produced Ex. P1 (and also other Sale Deeds Exs.P2 and P3 - which are for residential plots) in the same village as the subject lands and within the proximate time of issuance of notifications for acquisition of the subject lands. It is settled law that the development potential of the acquired lands and the consequential increase in the value of such properties will have to be considered in determining the true market value, especially when the land losers are able to place on record the evidence of such development within immediate vicinity of the acquired lands. It is also settled that for these purposes, transaction value of smaller plots can be taken for determining the market value of the larger property with appropriate deduction towards the costs of development. In this regard, useful reference can be made to decisions of the Hon'ble Supreme Court in [PRECEDENT] and Atma Singh vs. State of Haryana7 (2013) 14 SCC Page 406 (2008) 2 SCC Page 568 The appellants have marked deeds as per Ex. P1 - P3 which are for the smaller residential plots in the same village as the subject lands. There is no other evidence to establish the market value of the subject lands as of the relevant date. Therefore, the Reference Court erred in not considering the value of the transactions under Exs.P1 - P3 for the purposes of determining the market value of the subject lands. Further, the Reference Court's finding that the market value of the subject lands as of the relevant date is Rs.40,000/- is not founded in specific evidence on record. As such, this Court is of the considered opinion that.Rs.40,000/- per gunta could not have been the true market value of the subject lands as of the relevant date.
The value of transaction under Ex. P1, which is dated 5th January 2007, is Rs.2,98,983/- per gunta. This deed is a few months prior to the date of the first notification. The average value of the transaction under Ex. P2 and P3 (which are for the period between December 2007 and February 2008) are almost twice this amount of Rs.2,98,983/- per gunta. The transaction value under Ex. P 1, which is a few months prior to the date of the first notification would be the appropriate exemplar value, especially when these Ex. P 1 to P3 are deeds executed pursuant to sale in open auction; and even otherwise, the appellants' themselves have restricted their claim for enhancement in the value of the subject lands based on the value of the transaction as per Ex.P1. Therefore, Rs.2,98,983/- per gunta is taken as the exemplar value and the deductions applied as hereinafter to arrive at the more appropriate value of the subject lands.
The Hon'ble Apex Court in the case of [ENTITY] and Others (supra) has reiterated its earlier decision in [ENTITY] (dead) by LRs. declaring that the total deduction from the exemplar value cannot be more than 75%, and if the aggregate deduction were to be more than 75%, then the exemplar lands and the acquired lands cannot be comparable lands. It is also declared that the maximum deduction from the exemplar value towards cost of development cannot be more than 67%. In the present case, given the nature of evidence on record as regards the exemplar value vide Ex. P1 and the location of the subject lands, deductions will have to be under two heads viz., rationalization because exemplar values are accepted in open auction and towards the cost of development.
The exemplar value viz., Ex.P1 (even P3 and other sale deeds produced along with an application under [SECTION] of [ACT]) is related to transaction values in an open auction. The Hon'ble Supreme Court in the case of Executive Engineer, Karnataka Housing Board (supra) has held that in cases where exemplar value is the transaction value accepted in an open auction there is high probability of competitive bidding and a tendency for the value to go up, but if the only values available are values of auction transactions, deduction of 20% from the auction price would ensure that both competitive pricing and possibility of prices going up are rationalized. This proposition will squarely apply in the present case inasmuch as the only evidence available as regards the exemplar value is the transaction value in open auction and such value relate to the period during which notifications for acquisition were issued and possession of the subject lands were taken over from the appellants. Therefore, 20% deduction from the exemplar value of Rs.2,98,983/- would not only be appropriate but also enable fair determination of the market value of the subject lands.
The learned counsel for the appellants has relied upon the decisions of the Hon'ble Supreme Court in [ENTITY]'s case (supra) to bolster the argument that the maximum deduction towards development costs should not be more than 33.5%. The learned counsel tried to draw similarity between the present case on hand and the case on hand before the Hon'ble Supreme Court for applying deduction of only 33.5% as against any other higher percentage. However, the Hon'ble Supreme Court has declared that the maximum deduction towards cost of development, subject to the maximum of 75% under all heads depending on the facts and circumstances of a given case, cannot be more than 67%. The subject lands are acquired for the purposes of construction of stationyard with C&W facilities. The total extent of lands acquired for this purpose is 9 acres and the claimants/appellants have individually lost lands measuring between 32 guntas to 13 guntas as detailed earlier. If the subject lands were to be developed whether into a residential or an industrial area, it would necessarily entail setting apart lands for roads and other facilities in addition to incurring other expenses; only if such extents are lost and investments made, the potential of the subject lands as projected could be realized. Further, the exemplar parcels of residential plots are before the railway crossing from the National Highway while subject lands are after the railway crossing. This would undoubtedly impede the value of any development in the subject lands vis vis, exemplar parcel of the lands. Thus, in the totality of the facts and circumstances of the case, this Court is of the considered opinion that a deduction of 50% ought to be made towards cost of development from the exemplar value of Rs.2,98,983/-. Thus, a total of 70% should appropriately be deducted from the exemplar value to arrive at the true market value of the subject lands as of the relevant date. Thus, the market value of the subject lands after such deduction would be Rs.89,700/- per gunta (after necessary rounding off) and the same is computed as follows:
The exemplar value as per Ex. P 1 Rs. 298,983.00 Deduction at the rate of 20% as the exemplar value is based on Rs. 59,796.60 auction transaction Deduction at the rate of 50% towards the development and the differences between the subject Rs. 149,491.50 lands and the exemplar parcel of lands The market vale of the subject land after the deductions as Rs. 89,694.90 stated above i.e, Rs.298,983 -
(Rs.59,796/- + Rs.149,491/-) The learned counsel for the appellants lastly relied upon the decisions of the co-ordinate benches of this Court in [CASE NUMBER] and [CASE NUMBER], wherein the market value of the lands situate in Kelageri Village of Dharwad is taken at the rate of Rs.98,700/- per gunta and urged that this should be taken as the exemplar value emphasizing that such proceedings emanated from the acquisition of lands in Kelageri Village which is closer to Sattur Village where the subject lands and exemplar parcel of land as per Ex. P 1 are situated. But, this contention cannot be accepted as the lands in the proceedings [CASE NUMBER] and [CASE NUMBER] are notified vide different notifications during the year 2008 for the purposes of construction of double lane Railway Track and the decisions of this Court in [CASE NUMBER] and [CASE NUMBER] are rendered in a given set of circumstances specific to such lands. The appellants have not placed any evidence on record to lay the foundation for establishing the significance of the decisions in those cases to the present case, and even otherwise, in view of the evidence on record as regards the location of the lands vis vis exemplar parcels of lands, this Court is of the considered opinion that the market value of the subject lands cannot be taken at Rs.98,700/- per gunta and it should be taken at Rs.89,700/-.
Hence, the following order:
i) The above appeals filed by the claimants are allowed in part.
ii) The appellants/claimants in each appeal shall be entitled for compensation
determined on the basis of the market value of the subject lands at the rate of Rs.89,700/- per gunta with all statutory benefits.
iii) The pending applications, in view of the disposal of the appeal in the above terms, are also disposed off.
JUDGE Sd/-
JUDGE msr/JTR