1 IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NO. 180 0F 2005 Mr. Gopalkrishna Pundalik Prabhu Gaonkar, aged 47 years, occupation, residing at B-9, Ayodhya Apartments, Ambaji, Fatorda, Goa. ... Appellant versus The Executive Engineer, Works Division XXV(NH), PWD, Fatorda, Margao, Goa. ... Respondent Shri Sudesh Usgaonkar, Advocate for the Appellant. Ms. Susan Linhares, Additional Government Advocate for the Respondent. CORAM : F. M. REIS, J. DATE : 21ST JANUARY, 2011. ORAL JUDGMENT The above appeal challenges the Judgment and Award dated 7-3-2005 passed by the learned Additional District Judge, South Goa, Margao, in Land Acquisition Case No.217 of 1994. 2 2. By notification issued under Section 4 of the Land Acquisition Act, 1894(hereinafter referred to as “the said Act”) dated 15-10-1990 published in Official Gazette on 8-11-1990, land at Maxem, Canacona Taluka was acquired for the construction of Maxem bridge and its approaches on the National Highway. Amongst the lands which were acquired, an area of 2153.75 sq. meters from the property surveyed under No.357/2 and 595 sq. meters from the property surveyed under No.356/5 were intended to be acquired which were belonging to the appellant. By an award passed by the Land Acquisition Officer dated 15-6-1993, under Section 11 of the said Act, a sum of Rs.30/- per sq. meter was offered for both the said lands. Being dissatisfied with the said amount, the appellant preferred a reference under Section 18 of the said Act for enhancement of compensation and claimed a sum of Rs.200/- per sq. meter for the land acquired. 3. By Judgment and Award dated 7-3-2005, the Reference Court rejected the reference filed by the appellant. Being aggrieved by the said Judgment, the appellant has preferred the present appeal. 3 4. Shri Sudesh Usgaonkar, learned Counsel appearing for the appellant has assailed the impugned Judgment and has submitted that the Reference Court has misdirected itself while refusing the reference of the appellant. The learned Counsel further submitted that in support of the claim for enhancement of compensation, the appellant has produced two sale transactions, one which is dated 5-6-1987 at Exh.AW1/A, and the other sale deed dated 7-3-1991 which is at Exh.AW1/B which have not at all been appreciated by the Reference Court. He further pointed out that by the said sale deed at Exh.AW1/A, a portion of the property admeasuring 335 sq. meters from survey No.111/1 was sold at Rs.89/- per sq. meter which was a mixed garden and was at a distance of about 20 to 25 meters from the acquired land. The learned Counsel further submitted that by the sale deed at Exh.AW1/B a plot of 85 sq. meters was sold at the rate of Rs.200/- per sq. meters and it was a part of the same property surveyed under No.111/1 at Loliem. He further pointed out that the sale deed relied upon by the respondent at Exh.30 was not comparable to the land acquired. The learned Counsel further submitted that though the sale deed at Exh.30 is in respect of a transaction wherein the appellant was a party nevertheless the same was sold on account of special circumstances and a substantial amount was accordingly 4 awarded. Learned Counsel further submitted that the Reference Court has totally misdirected in not appreciating the evidence on record in accordance with the well settled principles of law, and as such came to an erroneous conclusion that the appellant failed to establish that the price offered by the Land Acquisition Officer was inadequate. Learned Counsel further submitted that there is no reason not to accept the said sale instance produced by the appellant at Exh.AW1/B for the purpose of determining the market value of the acquired land, and as such submitted that the impugned Judgment deserves to be quashed and set aside. 5. Ms. S. Linhares, learned Additional Government Advocate appearing for the respondent has supported the impugned Judgment. Learned Additional Government Advocate further submitted that the sale deed at Exh.30 is a comparable sale instance and as such considering that the appellant was himself a party to the said transaction, the Reference Court was justified in relying upon the said sale instance for determining the market value of the acquired land. Learned Additional Government Advocate further submitted that the sale deed produced by the appellant at Exh.AW1/B is a post notification sale instance which cannot be relied upon as the said transaction appears to have been made only to get 5 higher compensation in respect of the land acquired. Learned Additional Government Advocate further submitted that the genuineness of the sale transaction is itself challenged by the respondent and as such, the question of relying upon the said sale deed would not arise. Learned Additional Government Advocate further submitted that the sale deed Exh.AW1/A is also not comparable with the acquired land and as such the question of relying would not arise. Learned Additional Government Advocate took me through the impugned Judgment and pointed out that the Reference Court has appreciated the evidence on record and has come to the correct decision that the appellant is not entitled for any enhancement in the compensation as offered by the Land Acquisition Officer. Learned Additional Government Advocate as such pointed out that the appeal deserves to be rejected. 6. Having heard the learned Counsel and the learned Additional Government Advocate, and on perusal of the record, the following point arises for determination in the present appeal:- “Whether the Reference Court was justified in rejecting the reference filed by the appellants?” 6 7. In support of his claim for enhancement, the appellant has examined AW1/Gopal K. Prabhu Gaonkar. He has stated that the acquired portion is a mixed garden and that there were coconut trees, mango trees, etc. in the said land belonging to the appellant. He has also stated that there are houses in the vicinity of the said land belonging to Angelina Dias and Minguel Fernandes. He has further stated that the Loliem Panchayat Office is at a distance of 7 kms. from the acquired land. He has also stated that on account of acquisition his land has been divided and it cannot be developed. He has also stated that there are electricity facilities in the acquired land and water facility is available as the water pipe lines are by the side of the road. In support of his claim, he has produced a sale deed which is dated 5-6-1987 which is at Exh.AW1/A. He has stated that an area of 335 sq. meters was sold for a price of Rs.30,000/- and that the said property is a mixed garden which is similar to the acquired land and it is at a distance of 15 to 20 meters from the acquired land. He has also produced another sale deed which is dated 7-3-1991 in respect of a property wherein 85 sq. meters was sold for a price of Rs.200/- per sq. meter. He has stated that the said land is at a distance of 15 to 20 meters from the acquired land and that in the said property a building has been constructed and a bar and restaurant is 7 located in front of the acquired land. He has also stated that the Galgibag river is at a distance of 500 to 600 meters from the acquired land. In the cross-examination, he has stated that there is a property in between the property surveyed under No.357/2 and the National Highway. He has further stated that by the acquisition, both the properties 356/5 and 357/2 have been severed. He has also submitted that there is a set back for the purpose of putting up a construction. He has further stated that in the property of the sale deed the house was in existence where the purchaser was residing and the land along with trees was purchased. He has further stated that in the sale deed dated 7-3-1991 the property was purchased for the purpose of construction of a bar and restaurant. In his re-examination, he has produced at Exh.30 a copy of the sale deed dated 24-9-1983 executed between him and his wife as the vendors. The sale deed was stated to be of an area of 446.25 sq. meters and he has also admitted that as per the said sale deed the vendors had agreed to maintain 1 meter set back along the western boundary. He has further stated that in the sale deed under Exh.30 there is no mention that Minguel Fernandes was residing in the property for more than 50 years and that he was claiming to be a mundkar. He has further admitted that there were three coconut trees in the said sale deed property. AW2 8 examined by the appellant is Ramchandra Wharik who has stated that the property which is sold is a coconut garden and that his property is similar to the acquired land and is at a distance of 10 to 12 meters from the acquired land. He has further admitted that he had also sold an area of 300 sq. meters of his property to Philip D'Souza in the year 1987. This Philip D'Souza had a house in the property and he had received the price only of the land. He has further admitted in the cross-examination that the survey number of the property is 111/1. 8. The next witness AW3 is Shankar Bhende who has stated that the Galgibag beach is at a distance of 500 meters from the property surveyed under No.357/2. He has further stated that in the said property there is electricity line, water supply and there are residential houses. He has also stated that the property 357/2 is a levelled land. He has further stated that the portion acquired from 357/2 is a higher portion and the other two portions which remained with the owner will be at a lower level. He has further stated that in the western part no development is possible. In the cross-examination, he has admitted that the set back of 21 meters has to be maintained from the center of the road for the purpose of development in the survey No.356/5. The length from survey 9 No.356/5 from the edge of the road will be 30 meters and 38 meters from the southern side. He has further stated that the minimum area for building of 5 Star Hotels is 2,500 sq. meters. The said witness has also produced a Valuation Report whereby he has valued the land acquired at the rate of Rs.200/- per sq. meters. He has also produced a sketch plan. RW1 examined by the respondent is the P.W.D. Engineer who has stated that the land under survey No.357/2 which has been acquired has no construction potentialities. He has further stated that this land is on the bank of the river. He has further stated that the land in respect of a small area of 85 sq. meters is close to the National Highway. In the cross- examination, he has stated that there are houses existing in survey No.357/2 as well as in the neighbouring portion. He has further stated that there is no river or sea in the survey No.356/5. He denied that the river is 100 meters from survey No.357/2. He has further stated that the river touches about 40 meters length of plot under survey No.357/2. In the cross-examination, after re-examination he has stated that the whole width of the acquired land touches the river. He has further admitted that he is not aware whether CRZ came into force in the year 1991. 10 9. The learned Judge whilst passing the impugned Judgment has come to the conclusion that the appellant has failed to establish that he was entitled for enhancement of compensation. The learned Judge also came to the conclusion that the appellant failed to establish his claim for compensation for the rubble stone wall. 10. The contention of Shri Sudesh Usgaonkar, learned Counsel appearing for the appellant to the effect that the appellant had adduced evidence to substantiate his contention that the sale deed was executed in special circumstances cannot be accepted. By the said sale deed at Exh.30 an area of 460 sq. meters was sold at the rate of Rs.15/- per sq. meter. On perusal of the cross-examination of AW1/Gopal Gaonkar, I find that the said sale deed was executed in view of the existence of a mundkarial house but, however, no evidence has been produced to substantiate his contention that a substantial discount was given to the purchaser in view of the existence of the mundkarial house. On the basis of the evidence of AW1/Gopal Gaonkar, I find that there is nothing on record to substantiate the said contention. As no such material has been adduced by the appellant, it would be difficult to fix any amount of discount merely on the basis of such submissions of the learned Counsel 11 appearing for the appellant. As no such special circumstances have been established, the price mentioned in the said sale deed dated 24-9-1983 at the rate of Rs.15/- per sq. meter would have to be accepted as there is no dispute that the land was part of the said property which was subject matter of the acquisition. 11. The Reference Court whilst passing the impugned Judgment has relied upon the said sale deed at Exh.30 to ascertain the market value of the acquired land in the year 1990 when Section 4 notification was formed. The sale instance at Exh.30 is of the year 1983. 12. The Apex Court in the Judgment reported in (2008) 14 SCC 745) in the case of General Manager, Oil and Natural Gas Corporation Limited v. Rameshbhai Jivanbhai Patel and another has held at paras 13, 14 and 15 thus:- “13. Primarily, the increase in land prices depends on four factors: situation of the land, nature of development in surrounding area, availability of land for development in the area, and the demand for land in the area. In rural areas, unless there is any prospect of development in the 12 vicinity, increase in prices would be slow, steady and gradual, without any sudden spurts or jumps. On the other hand, in urban or semi-urban areas, where the development is faster, where the demand for land is high and where there is construction activity all around, the escalation in market price is at a much higher rate, as compared to rural areas. In some pockets in big cities, due to rapid development and high demand for land, the escalations in prices have touched even 30% to 50% or more per year, during the nineties. 14. On the other extreme, in remote rural areas where there was no chance of any development and hardly any buyers, the prices stagnated for years or rose marginally at a nominal rate of 1% or 2% per annum. There is thus a significant difference in increases in market value of lands in urban/semi- urban areas and increases in market value of lands in the rural areas. Therefore, if the increase in market value in urban/semi-urban areas is about 10% to 15% per annum, the corresponding increases in rural areas would at best be only around half of it, that is, about 5% to 7.5% per annum. This rule of thumb refers to the general trend in the nineties, to be adopted in the absence of clear and specific evidence relating to increase in prices. Where there are special reasons for applying a higher rate of increase, or any specific evidence relating to the actual increase in 13 prices, then the increase to be applied would depend upon the same. 15. Normally, recourse is taken to the mode of determining the market value by providing appropriate escalation over the proved market value of nearby lands in previous years (as evidenced by sale transactions or acquisitions), where there is no evidence of any contemporaneous sale transactions or acquisitions of comparable lands in the neighbourhood. The said method is reasonably safe where the relied-on sale transactions/acquisitions precede the subject acquisition by only a few years, that is, up to four to five years. Beyond that it may be unsafe, even if it relates to a neighbouring land. What may be a reliable standard if the gap is of only a few years, may become unsafe and unreliable standard where the gap is larger. For example, for determining the market value of a land acquired in 1992, adopting the annual increase method with reference to a sale or acquisition in 1970 or 1980 may have many pitfalls. This is because, over the course of years, the “rate” of annual increase may itself undergo drastic change apart from the likelihood of occurrence of varying periods of stagnation in prices or sudden spurts in prices affecting the very standard of increase”. 14 13. Considering the said Judgment of the Apex Court, as the said sale instance which is a portion of the land sold to a mundkar which was executed more than 7 years from the said Section 4 notification would not be safe to form the basis for arriving at a market value of the land though the said sale instance was part of the said property. When there are sale instances in the proximity of Section 4 notification in the vicinity of the acquired land, the question of relying upon a sale instance of more than 5 years would not be justified in the circumstances of the case. The Reference Court was not justified to determine the market value of the land by giving escalation on the sale instance. 14. The appellant in support of his claim for enhancement has relied upon the sale instance at Exh.AW1/A which was a sale deed whereby the property was sold at the rate of Rs.89/- per sq. meter. The said sale deed was also a transaction also in favour of a mundkar and the seller of the sale deed has been examined who has confirmed the contents of the sale deed and stated that the price which was received was on account of the land as the house belonged to the purchaser. The land which was subject matter of the sale deed was at a distance of 20 meters from the acquired land. The nature of the land is comparable. The 15 genuineness of the sale deed has not been challenged by the respondent. As such, I find that the said sale deed Exh.AW1/A can form the basis to fix the market value. The Reference Court was justified to reject Exh.AW1/B which was a post notification sale deed when sale instances prior to Section 4 were available for fixing the market value of the land. 15. Considering the said sale instance Exh.AW1/A, wherein the price at which the land was sold in 1987 is at the rate of Rs.89/- per sq. meter, and the notification under Section 4 of the said Act in the present case was issued in the year 1990 and considering that the land acquired is situated in a rural area and there is no evidence adduced by the appellant to determine the escalation in the price in the vicinity of the acquired land, and in view of the said Judgment of the Apex Court in the case of General Manager, Oil and Natural Gas Corporation Limited v. Rameshbhai Jivanbhai Patel and another(supra) the escalation is to be fixed at 5% per annum for the period of 3 years. As such, considering the gap of 3 years the amount works out to Rs.102/- per sq. meter approximately. The area acquired in the present case is survey Nos.357/2 and 356/5. With regard to the land surveyed under No.357/2, the evidence on record discloses that the said land was not adjoining the 16 National Highway. AW1/Gopal K. Prabhu Gaonkar has himself admitted that between the said National Highway and the said land there are private lands, apart from that, the sale instance at Exh.AW1/A is in favour of the mundkar. Naturally there could be some higher price paid by the purchaser considering that his house was already existing in the said plot of the acquired land. Considering the said factors, I find a deduction of 20% would have to be effected with regard to the price to be fixed in respect of the land under survey No.357/2. After such deduction, the amount works out to Rs.81/- per sq. meter approximately. The Reference Court whilst passing the impugned Judgment has found that the Land Acquisition Officer has awarded compensation for the fruit bearing trees and other trees existing in the acquired portion of the land. Considering the said amount, the Reference Court has found that apart from the sum of Rs.30/- per sq. meter awarded by the Land Acquisition Officer for the land the appellant had also received a sum of Rs.42/- per sq. meter considering the value of the trees. The Reference Court as such found that the appellant had received a sum of Rs.72/- per sq. meter. As such, as far as the land surveyed under No.357/2 is concerned, considering the said amount, I find that the appellant would be entitled to 17 an excess amount of Rs.9/- per sq. meter for the land in respect of survey No.357/2. 16. With regard to the land surveyed under No.356/5, the evidence discloses that the acquired portion by itself is not touching the road and as such apart from the dissimilar factors referred to above in respect of the land surveyed under No.357/2, the said land is sloppy in nature, as stated by AW3/Bhende examined by the appellant. Apart from that, the said land also comes within the set back area to be maintained, in view of the existence of the National Highway. Besides that, the valuer has stated in his cross-examination that the shape of the said portion of the land acquired is a sort of triangle and the minimum width is 10 meters and maximum width is 16 meters. He has also stated that the width of 10 meters is sufficient for construction but it will not be a good construction. Considering all those factors, a further deduction of 40% apart from the 20% referred to above would have to be effected for fixing the market value of the land in survey No.356/5. After such deduction, the amount works out to Rs.41/- per sq. meter. The Reference Court has found that apart from Rs.30/- per sq. meter, the appellant has also been paid a sum of Rs.1.50 per sq. meter considering the value of 18 the trees existing in the said portion of the property. As such, the appellant would be entitled for an excess amount of Rs.9/- per sq. meter for the said portion of the land acquired under survey No.356/5. Even considering the said sale instance at Exh.30 of the year 1983, the said amount arrived at for fixing the compensation of the acquired land is just and proper. 17. On the basis of the evidence on record and considering the submissions of the learned Counsel, I find that the Reference Court was not justified in rejecting the reference filed by the appellant. 18. For the reasons stated herein above, the appellant is entitled for an excess amount of Rs.9/- per sq. meter for the land acquired besides other statutory benefits. The point for determination is answered accordingly. 19. In view of the above, I pass the following order:- ORDER (1) The appeal is partly allowed. (2) The impugned Judgment and Award dated 7-3-2005 is quashed and set aside. 19 (3) The appellant is entitled for an excess amount of Rs.9/- per sq. meter for the land acquired. Needless to say, the appellant would be entitled for statutory benefit under Sections 23(1)(A), 23(2) and 28 of the said Act in accordance with law. (4) The appeal stands disposed of accordingly with no order as to costs. F. M. REIS, J. RD 20