1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE FIRST APPEAL NO. 182 OF 1996 Shalini Vaman Godbole ..Appellant Vs. 1.Special Land Acquisition Officer, Special Unit, Solapur and ors. ..Respondents WITH FIRST APPEAL NO. 471 OF 1996 Solapur Municipal Corporation through the Municipal Commissioner ..Appellant Vs. Shri Shankar Ramchandra Mate (deceased) through his heirs 1. Smt. Umabai Shankar Mate and ors. ..Respondents WITH FIRST APPEAL NO. 678 OF 1996 1.The State of Maharashtra and ors ..Appellants Vs. Shri Mahadeo Ramchandra Mate (deceased) 2 through his Lrs. 1A. Sou. Malati Keshav Bhide and ors. ..Respondents WITH FIRST APPEAL NO. 679 OF 1996 The State of Maharashtra ..Appellant Vs. Shankar Ramchandra Mate (deceased) through his Lrs. 1.Smt. Umabai Shankar Mate and ors. ..Respondents WITH FIRST APPEAL NO. 212 OF 1997 The Solapur Municipal Corporation, Solapur through Municipal Commissioner ..Appellant Vs. 1.Mahadeo Ramchandra Mate (deceased) and anr. ..Respondents ......... Mr. V.Z. Kankaria for appellant in F.A. No. 182/1996. Mr. Nitin Jamdar for appellant in F.A. Nos.471/96 and 212/97 and for respondent 3 no.10. in F.A. No. 679/96 and for respondent no.2 in F.A. No. 678/96. Mr. A.R. Patil, AGP for respondent nos.1 and 2 in F.A. No. 182/96 and for respondent no.10 in F.A. No.471/96 and for respondent no.2 in F.A. No. 212/97 and for Appellant in F.A. Nos. 678/96 and 679/96. Mr. P. B. Shah for respondent no.10 in F.A. No. 182/96 and for respondent no.1 in F.A. No.212/97 and for respondent nos.1­A to 1­ F in F.A. No. 678/96. Mr. A.J. Joshi for respondent nos.1 to 4, 7, 11 and 12 in F.A. No. 471/96. ......... CORAM : B.H.MARLAPALLE & S.J.VAZIFDAR, JJ. Reserved on : April 23, 2009. Pronounced on : June 22, 2009. JUDGMENT (PER B.H.MARLAPALLE, J.) 1] All these appeals filed under Section 54 of the Land Acquisition Act, 1894 arise from the common award dated 29/4/1995 rendered by the learned Civil Judge, S.D. at Solapur in L.A.R. Nos. 64 and 65 of 1992. First Appeal No. 182 of 1996 has been filed by one of the claimants in LAR No. 65 of 1992 praying for further enhancement in the market rate as well as for building/structures and severance. Whereas the Solapur Municipal Corporation has filed First Appeal 4 Nos. 471 of 1996 and 212 of 1997 challenging the market rate fixed at Rs.600/­ per sq. mtr. by the Reference Court and similar challenge has been raised by the State Government in First Appeal Nos. 678 and 679 of 1996. Hence, these appeals are being decided by this common judgment. 2] Shri Daji Umbrajkar was the owner of agricultural land in Survey No. 464, which subsequently became a part of the Municipal limits of Solapur. The said land was granted by Shri Daji Umbrajkar to Shri Ganesh Mate in the year 1875, on the condition that he would construct a Shiva Temple and would pay rent equal to the land revenue. Shri Daji Umbrajkar died shortly after the permanent lease was made in favour of Shri Ganesh Mate and Daji’s son Venkat Umbrajkar had filed a Civil Suit for taking over possession of the subject land as the main condition of construction of Shiva Temple was not fulfilled. In the suit proceedings, Mate family agreed to construct the Temple and the suit was compromised. The Temple was constructed in the year 1902­1903 and the land remained with Mate family and came to be known as “Mate Baug”. On the demise of Shri Ganesh Mate, the land came to be mutated in the name of his son Shri Ramchandra who begot three sons i.e. Mahadeo, Shankar and Vishnu. On 5 the demise of Shri Ramchandra, the names of his legal representatives were entered vide Mutation Entry No. 1518 certified on 29/12/1952 and this clearly indicated that Mahadeo, Shankar and Vishnu, the three sons of Shri Ramchandra, succeeded to the property and their ownership was confirmed in Second Appeal No. 1278 of 1964 and Mahadeo’s 1/3 rd share was determined in a suit for partition i.e. Civil Suit No. 284 of 1980 decided on 23/9/1982. 3] The claimants before the Reference Court were these three brothers or their legal representatives. Part of the land re­numbered as CTS No. 8457 (Part), came to be reserved for a public garden as per the development plan approved by the Government of Maharashtra in the year 1978, under Site No. 276 and Final Plot No. 123 (Part). It appears that Final Plot No. 123 (Part) admeasured 9409 sq. mtrs. and the total remainder portion of CTS No. 8457 admeasured 1 H. 20 R. On 26/10/1989 the Land Acquisition Officer issued the Notification under Section 126(4) of the Maharashtra Regional Town Planing Act, 1966 (the M.R.T.P. Act for short) read with Section 4 of the Land Acquisition Act, 1894 of Final Plot No. 123 (Part) admeasuring 9409 sq.mtrs. The said Notification was published in the Maharashtra Government Gazette on 7/12/1989. 6 Out of 1 H. 20 R. land (12000 sq.mtrs.), 9409 sq.mtrs. was sought to be acquired for garden, whereas 2247 sq.mtrs. was reserved for the acquisition of D.P. Road. The remaining land admeasuring about 344 sq. mtrs. was not under any acquisition and as per the claimants it was not useful to them and being less than 1/10 th of the total area they were entitled for severance compensation. The Land Acquisition Officer passed his award on 5/12/1991 and fixed the market rate at Rs.120/­ per sq.mtr. after deducting 1789 sq. mtrs. from 9409 sq. mtrs. Thus the compensation was paid by the Land Acquisition Officer for 7620 sq. mtrs. only, but without any consideration for severance of 344 sq. mtrs. The claimants not being satisfied with the said market rate had submitted an application under Section 18 of the Land Acquisition Act, 1894 for enhancement of compensation and the said claim came to be registered as LAR Nos.64 and 65 of 1992. In the impugned common award the Reference Court fixed the market rate at Rs.600/­ per sq.mtr. for the plotable area of 7620 sq.mtrs. and at the same rate granted compensation for the unacquired land admeasuring 344 sq. mtrs. The Reference Court confirmed the compensation amount paid by 7 the Land Acquisition Officer for building/structure and trees etc. The claimants have been consistently claiming that they ought to have been given the market rate at Rs.650/­ per sq. mtr. They also claimed that the deduction of an area of 1789 sq. mtrs. was not just and proper and when the land was being sought for garden, there could not have been any deduction and they ought to have been paid compensation for the total area acquired i.e. 9409 sq. mtrs. plus remaining patch of 344 sq.mtrs. on account of severance. 4] On notice, the State Government appeared before the Reference Court and vide its say at Exh. 47 opposed the Reference for enhancement. It claimed that the compensation granted by the Land Acquisition Officer was just and proper and did not call for any upward revision. The Municipal Corporation, on the other hand, filed its say at Exh. 43 and opposed the claim. It challenged the ownership claim of the claimants and also stated that the remaining area of 344 sq. mtrs. was available for the claimants to utilise and the claim for severance for the said area was not maintainable. It also claimed that the claimants being only the grantees on consideration could not derive the ownership title which, in fact, vested with the Umbrajkar family and, therefore, were not entitled to raise any 8 claim for enhancement of compensation. By consent of the parties, evidence was recorded in LAR No. 64 of 1992 and it was read in LAR No. 65 of 1992 as well (Pursis at Exh.26). The claimants examined Shri K.S. Bhide – PW 1 as the Power of Attorney of Shri Mahadeo Mate, Shri S.M. Parchure – PW 2 and Valuer, Shri Jahagirdar – PW 3 and Mrs. Manjiri Ghatnekar – PW 4, Clerk from the office of Sub Registrar, North Solapur No.I. To oppose the Reference, Shri Prabhkar Shiralkar – DW 1 and valuation expert, Shri Mahadeo Ddhurkhedkar – DW 2 and Shri Malleshwarappa Tanbake – DW 3 were examined. DW 2 and DW 3 were the employees of the Municipal Corporation, whereas DW 1 was the Deputy Director of Town Planning at the relevant time and his valuation report at Exh. 91 has been placed on record. He valued the property at Rs.350/­ per sq.mtr. However, the Reference Court considered the valuation report at Exh. 55 submitted by PW 2 – Shri Parchure, the Government Resolution dated 31/10/1994 (Exh. 118), the ready reckoner of land valuation for the year 1989 onwards (Exhs. 78 and 79). As per the report submitted by PW 2, the market rate of the land was required to be fixed at Rs.650/­ per sq.mtr., whereas as per the ready reckoner the market rate was fixed by the Government at Rs.650/­ per sq.mtr. for payment of stamp duty etc. as noted by the Reference Court and 9 having regard to the sale instances in the adjoining plots from CTS Nos.8457 and 8458 the market rate was required to be fixed at Rs.650/­ per sq.mtr. The Reference Court upheld the deduction of 1789 sq.mtrs. for the purpose of road and open space for the development of the plot. 5] It was submitted by Mr. Shah the learned counsel for the appellant in First Appeal No. 182 of 1996 that though only one of the claimants has filed an appeal for further enhancement of compensation, by taking recourse to the provisions of Order XLI Rule 33 of C.P.C. the Appellate Court has powers to enhance the compensation amount even in the absence of any appeals by the other claimants. In support of these submissions he has placed reliance on the decision in the case of S. Nazeer Ahmed vs. State Bank of Mysore and ors. [AIR 2007 SC 989]. Mr. Jamdar the learned counsel for the Corporation, on the other hand, submitted that the sale instances considered by the Land Acquisition Officer were just and proper and at any rate when the sale instance of 1986 from the neighbouring plot indicated the market rate at Rs.100/­ per sq.mtr., the Reference Court fell in error in discarding the said sale instances and relying upon the valuation report at Exh. 55 submitted by PW 2 and the ready reckoner 10 (Exhs. 78 and 79). He also submitted that the G.R. Dated 31/10/1994 was not applicable and the Reference Court could not have placed reliance on the said resolution. As per Mr. Jamdar the financial condition of the Corporation is weak and it cannot bear the financial burden as imposed by the impugned award. In support of the challenge to the impugned award, Mr. Jamdar has placed reliance on the following decisions :­ (a) Jawajee Nagnatham vs. Revenue Divisional Officer, Adilabad, A.P. And ors. [(1994) 4 SCC 595]. (b) Union of India vs. Pramod Gupta (dead) by Lrs. and ors. [(2005) SCC 1]. He also placed reliance on a Full Bench decision of this court in the case of State of Maharashtra vs. Prashram Jagannath Aute [ 2007 (5) Mh.L.J. 403]. Mr. Patil, the learned AGP, while impugning the award submitted that the burden of proof for enhancement in compensation was squarely on the claimants and they did not bring on record any sale instances which could be termed as comparable and the Reference Court fell in error in relying upon the sale 11 instances which were discarded by the Land Acquisition Officer. He placed reliance on the following decisions:­ (a) Cement Corporation of India Ltd. vs. Purya and ors. [(2004) 8 SCC 270]. (b) Kiran Tandon vs. Allahabad Development Authority and anr. [(2004) 10 SCC 745]. 6] In the case of Vyricherla Narayana Gajapatiraju vs. Revenue Divisional Officer, Vizagapatam [AIR 1939 Privy Council 98], the Privy Council enunciated the principles for determination of the market rate/compensation within the meaning of Section 23 and Section 24 of the Land Acquisition Act and these principles were further expanded by the Apex Court in the case of Chimanlal Hargovinddas vs. Special Land Acquisition Officer and anr. [(1988) 3 SCC 751]. In the case of Kiran Tandon (Supra) it has been held that where large area, not fully developed, is acquired, normally, deduction of about 33% is permissible and such deduction could be even at 20% where multi storyed residential flats are being constructed. 12 7] So far as the subject land is concerned, it is not in dispute that it is located at a distance of about ½ k.m. from Bhagwat Cinema Theater and it is surrounded by public road from three sides and on the fourth side the Housing Societies in CTS No. 8457 (Part) and 8458 have come up. Its N.A. potentiality is admitted and but for its reservation for a garden, the owners could have developed the property by making plots and selling the same for residential or for commercial purposes, depending upon the development plan of the Municipal Corporation. There was no sanctioned lay out plan nor was there any N.A. Conversion obtained by the owners at any time from 1978 till its acquisition in the year 1989 – 90. The deduction of 1789 sq. mtrs. appears to be even less than 20% and the said deduction, as provided by the Land Acquisition Officer, has been confirmed by the Reference Court and the Corporation as well as the State Government have not challenged the said deduction. Even in First Appeal No. 182 of 1996 filed by one of the claimants, the said deduction has not been questioned. Hence, the only issue that remains for our consideration is, whether the market rate fixed at Rs.600/­ per sq.mtr. by the Reference Court calls for interference in these appeals. 13 8] The best evidence of the value of property are the sale transactions in respect of the acquired land or the neighbouring land; the time at which the property comes to be sold; the purpose for which it is sold; nature of the consideration; and the manner in which the transaction came to be brought out, are also relevant factors. In the absence of sale deed relating to the acquired land, the sale transactions relating to the neighbouring lands have to be taken into consideration. Undoubtedly, such transactions must be within a reasonable time of the date of the notification and preferably before such date, the transactions must be bona fide and it should be a sale of the land similar to the land acquired or land adjacent to the land acquired. In the instant case, it is not in dispute that the acquired land is located within a distance of ½ k.m. from Bhagwat Theatre, it is surrounded by public road from three sides, it is in the neighbourhood of Ujwal Housing Society and beyond one of the roads there are bungalows. Thus, the land has sufficient access by public roads and undoubtedly it has a very strong N.A. potential. There are residential and commercial buildings on three sides at and beyond the Eastern side road there is a good locality and Solapur Old Mill is in its neighbourhood. At the relevant time it had sufficient access and the amenities like electricity, water, drainage and 14 roads etc. It is an admitted fact that CTS No. 8457 (remaining part) and CTS No. 8458 is on its Southern side. The lay out of the property in CTS No. 8458 was prepared and proved by the Competent Authority and plots were sold to different parties before the notification under Section 126(4) of the M.R.T.P. Act was gazetted on 7/12/1989. While passing his award, the Land Acquisition Officer had before him sale instances of plots from CTS No. 8457/1 and CTS No. 8458. He discarded the sale instances from CTS No. 8458 and accepted the sale instances from CTS No. 8457/1. An open plot admeasuring 1585 sq. mtrs. from CTS No. 8457/1 was sold on 29/1/1986 at the rate of Rs.100/­ per sq.mtr., whereas two other sale instances were of 11/9/1989 from CTS No. 8458 and the average market rate came to Rs.408/­ per sq.mtr. The claimants relied upon the valuation report made by Shir Parchure – PW 2. Shri Shiralkar – DW 1 and who was holding the post of Deputy Director of Town Planning, Pune Division, at the relevant time, in his valuation report at Exh. 91 concluded that it would be reasonable to adopt Rs.350/­ per sq.mtr. as the average rate for the developed plots. However, he did not give any reasons in support of these conclusions more so when he himself considered the Sathe Khat of 27/4/1988 at the market rate of Rs.378/­ per sq. mtr. The said witness in his depositions before the 15 Reference Court clearly admitted that the market rate awarded by the Land Acquisition Officer was inadequate and the acquired land was capable of being developed for residential/commercial purposes, if the same was not reserved or deleted from the reservation. It would be, therefore, safer to discard the valuation report made by Shri Parchure – PW 2 as well as Shri Shiralkar – DW 1. 9] In the evidence of Shri Pandurang Jahagirdar – PW 3 the sale instance at Exh. 74 was proved and it was clear that three plots making a total area of 800.5 sq.mtrs. were purchased for the Co­operative Housing Society and the market rate was Rs.378/­ per sq.mtr. The Sathe Khat was signed on 27/4/1988 and this fact is supported in the valuation report at Exh. 91 and submitted by Shri Shiralkar – DW 1. From April 1988 to December, 1989, the time gap is about one and half years and even if we presume 10% increase every year in the land value, 15% increase as in December, 1989 can safely be claimed on the market rate of Rs.378/­ per sq.mtr. (rounded off at Rs.380/­) and thus an increase of Rs. 57/­ can be granted so as to make the market rate at Rs.417/­ per sq. mtr. as on 7/12/1989. This sale instance is very much comparable because it is from the neighbouring land i.e. CTS No. 8458 and was prior to the date of notification. 16 The Reference Court has not accepted the same and has instead supported its award mainly on two grounds. The valuation report of PW 2 which indicated the average market value at Rs.650/­ per sq. mtr. And the ready reckoner valuation as fixed by the State Government at Rs.650/­. However, the Reference Court fixed the market rate at Rs.600/­ per sq. mtr. No reasons have been set out as to why the market rate was fixed at Rs.600/­ per sq. mtr. The Reference Court considered the evidence of Shri Jahagirdar – PW 3 and by giving 20% rise in the market rate at Rs.408/­ , it concluded that the market rate will be at Rs.500/­ per sq. mtr., as in December, 1989. The Reference Court, as noted earlier, has also relied upon the GR dated 31/10/1994 laying down the guide­lines for offering compensation to the land owners. Para 2 and 3 of the said GR read as under:­ “2. An issue as to whether the ready reckoner should be used or else, while preparing the awards of the land under acquisition, was under the reconsideration of the Government. In this regard, upon making the inquiry from the legal view point following 17 things have become clear: A) Ready reckoner has been prepared in a scientific manner by obtaining the information about the geographical condition of each area, big roads, railways etc. and by making inspection (visiting site) in that regard and by collecting the sale­purchase transaction information. B) The rates in the ready reckoner have been prepared (determined) by considering Taluka as a component (unit) in the rural area and by dividing into different parts of the city in the case of urban area. Therefore, the valuation being determined as per ready 18 reckoner of a particular property becomes the market value of the said land from the comprehensive view point. 3. Considering the status in the aforesaid para 2, the Government has taken following decision: A) While preparing the award on the date of notification under Section 4 of the Land Acquisition Act, the valuation of the land by way of sale­purchase transaction method, income capitalization method wherever necessary and the valuation being accrued as per ready reckoner, out of which whichever market value is greater, the same should be held valid. 19 B) On the date of publication of notification under Section 4 of the Land Acquisition Act, a copy of the ready reckoner being required for valuation of the land in accordance with the ready reckoner should be made available by the Land Acquisition Officer from the concerned Assistant Director, Town Planning (Valuation). C) Orders in the Government Circular, Revenue and Forest Department, No.LQN 1890/(4746)/A­2, dated 26/9/1990 have been withdrawn.” 10] It was submitted by Mr. Jamdar as well as Mr. Patil, AGP, that the Reference Court was in error in relying upon the GR dated 31/10/1994. We do 20 not find any force in these submissions. If the Government of Maharashtra in its wisdom has laid down a policy for offering compensation to the owners of the land which has been acquired for public purposes, it would be proper for the Reference Court to rely upon such a policy as well. The said GR clearly states that the compensation for the acquired land is to be granted on the basis of the valuation of the land by way of sale­purchase transaction method and the valuation as per ready reckoner, whichever is higher. On the date of the publication of the notification under Section 4 of the Land Acquisition Act, 1894, the rate prescribed in the ready reckoner by the Government is found to be higher than the market rate as reflected in the sale transactions, it would be necessary that the Reference Court grants market rate on the basis of the valuation as appearing in the ready reckoner. The Government Resolution clearly speaks of the State’s intention to offer a better/higher price of land which is acquired for public purposes. It would be, therefore, appropriate that the market rate in the instant case is fixed by following the GR dated 31/10/1994 and in our opinion the Reference Court did not commit any error in relying upon the same. 21 11] Mr.Jamdar submitted that the ready reckoner cannot be relied upon as evidence of the value of the acquired land. He relied upon the judgment of the Supreme Court in the case of Jawajee Nagnatham v. Revenue Divisional Officer, Adilabad, (1994) 4 Supreme Court Cases, 595, paragraph 5 whereof read as under :­ “5. The question, therefore, is whether the Basic Valuation Register is evidence to determine the market value. This Court in Special Land Acquisition Officer v. T. Adhinarayan Setty, AIR 1959, SC, 429, in paragraph 9 held that the function of the Court in awarding compensation under the Act is to ascertain the market value of the land at the date of the notification under Section 4(1). The methods of valuation may be (1) opinion of experts (2) the price paid within a reasonable time in bona fide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages; and (3) a number of years purchase of the actual or immediately prospective profits of the lands acquired. Same was the view in Tribeni Devi v. Collector of Ranchi (1972) 1 SCC, 480. It was reiterated in catena of decisions, vide, Periyar and Pareekanni Rubbers Ltd. v. State of Kerala (1991) 4 SCC, 195. Therefore, it is settled law that in determining the market value, the Court has to take into account either one or the other three methods to determine market value of the lands appropriate on the facts of a given case to determine the market